CHOW LILY AND OTHER v. HAU SAI ON AND ANOTHER

DCCJ 1732/2013

[2020] HKDC 896

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1732 OF 2013

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J U D G M E N T

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1.  The 1^st plaintiff, who claimed to be an agent of Madam Chow Cheung Tai (“Madam Chow”), together with 2^nd and 3^rd plaintiffs, the administrators of the estate of Madam Chow, are bringing the current action to evict the 2^nd defendant, the occupier of House 17, San Wai Village, Wong Chuk Hang, Aberdeen, Hong Kong (“the Premises”).

2.  Default judgment has already been entered on the 1^st defendant (“Mr. Hau”), the brother of the 2^nd defendant.

Background

3.  According to the Land Registry, the Premises is owned by a Chau Ping Fai (“CPF”) and his 3 brothers. However, it is not disputed between the parties that all the owners have long passed away.

4.  The plaintiffs claim that Madam Chow, being the CPF’s only daughter, became the sole occupier of the Premises since 1930’s when both CPF and his then wife (Madam Chow’s mother) left the Premises and never returned.

5.  In any case, what is not in dispute is that Madam Chow has occupied the Premises for a very long time before she passed away in 2009, and the 2^nd and 3^rd plaintiffs, who are Madam Chow’s only children and beneficiaries of her estate (Madam Chow’s husband has pre-deceased her) obtained the Letters of Administration in 2016.

6.  The 2^nd defendant is currently in occupation of the Premises. The dispute is how and on what capacity that she came to occupy the Premises. The 2^nd defendant initially made the claim for adverse possession but this claim was abandoned.

The 2^nd defendant’s case

7.  The 2^nd defendant denied ever being aware of any tenancy agreement signed by Mr. Hau regarding the Premises.

8.  Instead, the 2^nd defendant’s case is that she was desperate after her divorce in late 1996 when she met Madam Chow who suggested that she could move into the Premises. Madam Chow explained that, as she was getting old, she would be leaving the Premises to move into an elderly home, and that she would not return.

9.  The 2^nd defendant also claims that Madam Chow had told her that she was not the owner of the Premises but merely a “housekeeper keeping the Premises on behalf of the owners”, and, being sympathetic to the 2^nd defendant’s circumstances, she would not charge any rent.

10.  Despite Madam Chow’s apparent refusal to accept rent, the 2^nd defendant had volunteered to pay Madam Chow HK$1,000 each month as “living expense supplement”. From mid-1997 onwards, the 2^nd defendant has volunteered to increase such “supplement” to HK$1,100 per month.

11.  In around 1999, the 1^st plaintiff, who had been the care-taker of Madam Chow, informed the 2^nd defendant that, since Madam Chow was getting old, the “supplement” should be paid firstly to the 1^st defendant who would pass this to Madam Chow. The 2^nd defendant started paying the 1^st plaintiff this “supplement” until March 2012, when she became aware of the passing away of Madam Chow.

12.  As such, the 2^nd defendant’s case is that Madam Chow, who was in any case not a legal owner of the Premises, has passed the possessory title to her, and thus the 2^nd and 3^rd plaintiffs do not have better possessory title to evict her from the Premises.

The plaintiffs’ case

13.  The plaintiffs’ case is that the 1^st plaintiff’s family has always helped Madam Chow with the affairs regarding her houses (e.g. paying ground rent, rates and other miscellaneous outgoings): both the Premises and House 18 next to it. The 1^st plaintiff took over from her father in helping Madam Chow since around 1959 because her English was better and she was also older than Madam Chow’s children (that is, the 2^nd and 3^rd plaintiffs).

14.  Madam Chow had always lived in House 18 and the Premises until she left for USA in 1994. She intended to emigrate there with her son (the 2^nd plaintiff). At the time, Madam Chow gave the keys of the Premises and House 18 to the 1^st plaintiff and entrusted her to look after both properties. As such, the 1^st plaintiff always acted as Madam Chow’s agent in looking after the properties.

15.  In around 1995, Mr. Hau, who was the 2^nd defendant’s brother arranged, with the 1^st plaintiff (as agent of Madam Chow) to rent House 18. However, the tenancy did not last long as another person took over the rental and Mr. Hau moved out.

16.  In 1996, Madam Chow returned to Hong Kong because she could not get used to living in USA. She lived in the Premises for a few days before moving into an elderly home.

17.  In November 1996, Mr. Hau approached the 1^st plaintiff again to arrange to rent the Premises. The 1^st plaintiff attended the elderly home and obtained agreement from Madam Chow.

18.  As such, the 1^st plaintiff arranged for the Premises to be rented to Mr. Hau, with the tenancy commencing on 1 December 1996. She has produced a copy of the relevant tenancy agreement (“the Tenancy Agreement”) as evidence (Core Bundle p. 125).

19.  The Tenancy Agreement named the 1^st plaintiff as the agent of the landlord (“業主代理人”) and Mr. Hau as the tenant, and appeared to be signed, amongst others, by Mr. Hau himself. The tenancy would be for 2 years from 1 December 1996 to 1 December 1998 for a monthly rent of HK$1,000.

20.  According to the 1^st plaintiff, Mr. Hau, soon after commencement of the tenancy, informed her that the Premises was actually for his sister, the 2^nd defendant, to rent. Mr. Hau gave her the relevant contact and asked her to contact the 2^nd defendant regarding tenancy matters.

21.  The 1^st plaintiff has produced a letter apparently written by Mr. Hau dated 5 June 2013 (“Mr. Hau’s Letter”) after the commencement of the current action confirming that he did sign a tenancy agreement for the period 1996 to 1998 with the 1^st plaintiff regarding the Premises and further that, very soon after the signing, he had sought the agreement from the 1^st plaintiff for her sister, the 2^nd defendant, to rent the Premises instead of him.

22.  The 1^st plaintiff claimed that she had requested the 2^nd defendant to sign a new tenancy agreement but the 2^nd defendant refused, saying that it was “too troublesome”. The 1^st plaintiff then obtained reassurance from Mr. Hau that he would take responsibility so the 1^st plaintiff did not take the matter further. As such, the 2^nd defendant began renting the Premises in December 1996.

23.  Every 2 years, as the tenancy period was running out, the 1^st plaintiff would call the 2^nd defendant to check whether she would continue with the tenancy. She would then record these new rental periods on the Tenancy Agreement. She had increased the rent to HK$1,100 per month starting from 2 January 1999 which was also recorded.

24.  Initially, the rent was paid into Madam Chow’s bank account. Madam Chow had given the 1^st plaintiff the bank account passbook so the 1^st plaintiff would check if rent was paid on every 10^th day of each month. If not, she would call the 2^nd defendant to chase.

25.  By around 2003, to simplify matters and with consent of Madam Chow, the rent was to be paid directly into the 1^st plaintiff’s account. Part of that income would be used by the 1^st plaintiff to pay for the rates and ground rent of the Premises, and the rest would contribute to Madam Chow’s medical and other expenses.

26.  Since 2006, as the 2^nd defendant has been renting for over 10 years, the 1^st plaintiff no longer contacted the 2^nd defendant for tenancy renewal as long as the monthly rent continued to be paid.

27.  Madam Chow passed away in 2009. During the wake, the 2^nd and 3^rd plaintiffs instructed the 1^st plaintiff to continue to deal with the rental of the Premises as an agent.

28.  In early 2012, the 3^rd plaintiff requested the 1^st plaintiff to seek an increase in rent since there has been no increase for over 10 years but the 2^nd defendant did not agree. The 1^st plaintiff claimed that she had written a letter on 12 March 2012, sent by registered mail to the 2^nd defendant (“the Letter”, Core Bundle p. 169).

29.  The Letter stated, inter alia, that the 1^st plaintiff was an agent of the landlord (“代業主”), that the monthly rent would be increased to HK$1,650 for a tenancy period of 2 years, that the 2^nd defendant would need to sign the “replacement” tenancy agreement herself, and that if this was not agreed, there would be a one-year notice (until 31 March 2013) to deliver up vacant possession.

30.  The 2^nd defendant failed to pay any rent since 1^st April 2012. The 1^st plaintiff has issued a Notice of termination to both defendants on 20 April 2012 that the tenancy would be terminated on 30 April 2013 but the defendants have failed to deliver up vacant possession. Thus, the current action was commenced on 13 May 2013 to claim vacant possession and outstanding rentals.

The Legal Principles

31.  There is no dispute between the parties that the common law principle of “relativity of title” is applicable in this case. Thus it is irrelevant that Madam Chow was not the registered owner of the Premises: it is not in dispute that she had a possessory right to the Premises prior to the 2^nd defendant (Tang Man Kit v Hip Hing Timber Co. Ltd (CACV 137/2002, 13 May 2005), Chow Kum Wing v Lam Wing Ching (CACV 31/1985), Asher v Whitlock 91865) LR 1 QB 1).

32.  The only question is whether Madam Chow had “gifted”, “passed on” or “abandoned” the possessory title of the Premises to the 2^nd defendant in 1996. This would be a simple matter of finding of facts.

33.  Firstly, much can be said about why the court should prefer the evidence of the 1^st plaintiff over that of the 2^nd defendant:

i)  the 1^st plaintiff’s demeanor in court was open and sincere whilst the 2^nd defendant’s was evasive;

ii)  the 1^st plaintiff was able to provide plenty of details of family history, rental dealings etc. but the 2^nd defendant provided very little details or reasons (for example, reasons why Madam Chow refused to charge rent due to her “sympathy” to the 2^nd defendant’s situation but yet she would accept payments of “living supplement”, or why the 2^nd defendant would voluntarily increase that payment in 1997), and

iii)  the 1^st plaintiff has always held herself to be the agent of the landlord so she had little to gain: any recovery for vacant possession and rent arears etc. would be for the benefit of the 2^nd and 3^rd plaintiffs.

34.  However, the most persuasive finding for the court was the existence of the Tenancy Agreement and Mr. Hau’s Letter.

35.  If Madam Chow had intended to pass on the possessory title to the 2^nd defendant free of rent payments, this document should not exist: I cannot envisage, and the 2^nd defendant has not advanced, any convincing scenario to explain how Mr. Hau could be persuaded to sign a tenancy agreement for the Premises under such circumstances. Thus, in the 2^nd defendant’s case, the Tenancy Agreement has to be a forged document.

36.  As such, Mr. Hau’s Letter confirming that he had signed the Tenancy Agreement must also be forged.

37.  Surprisingly, no allegation of fraud or forgery was pleaded by the 2^nd defendant.

38.  The 2^nd defendant, under cross-examination, only claimed that she believed that the Tenancy Agreement was forged. However, on further questioning, she admitted that the reason for her belief was that she was not aware that her brother had ever signed a tenancy agreement regarding the Premises at the time.

39.  When asked why she did not call her brother to testify as to the authenticity of this document, the 2^nd defendant’s explanation was simply that she did not get on with Mr. Hau’s wife, so she was not close to him and did not have his contact details.

40.  It is of note that the 2^nd defendant has not provide any evidence as to what attempts had been made to locate Mr. Hau and, indeed, any attempts to persuade him to testify: it is not the 2^nd defendant’s case that she has tried her best to try to locate her brother but failed, or that after locating him, he has refused to testify despite all persuasive attempts (including, perhaps, showing him documents with his “forged” signatures). It is simply this: she has not contacted her brother because they are “not close” and she does not have his contact details.

41.  It would be obvious to the 2^nd defendant, and those advising her, that if Mr. Hau would testify that the relevant signatures were not his, this would be a “knock-out punch” against the plaintiffs. When presented with such a great opportunity, and with the prize being the possessory title of a house, one would expect any reasonable person to try a lot harder.

42.  The reasonable inference from this is that the 2^nd defendant has never honestly believed that the Tenancy Agreement and Mr. Hau’s Letter were forged in the first place. Further, the 2^nd defendant’s case begs an even more obvious question: if such documents were forged, why would Mr. Hau, as the 1^st defendant, not defend this claim?

43.  On the other hand, from the plaintiffs’ points of view, it would have been utterly inconceivable that, having named Mr. Hau as a party (as the 1^st defendant), the 1^st plaintiff would then produce a forged document purported to be signed between herself and Mr. Hau (and, in addition, produced a forged “supportive” letter purported to be written by him after the commencement of this very action), thus committing a very risky and easily discoverable criminal offence with, as I observed previously, little or nothing to gain for herself even if these forgeries were somehow, by a miracle, not challenged.

44.  Furthermore, what about the Letter? This was purported to be a registered letter sent by the 1^st plaintiff to the 2^nd defendant at the Premises, and its content was consistent with the evidence of the 1^st plaintiff regarding the past history of the tenancy of the Premises. The 2^nd defendant denied ever receiving it. Again, one need to consider the likelihood of the 1^st plaintiff forging the Letter.

45.  As such, the logical conclusion must be that the 2^nd defendant has all along been aware of the existence of the Tenancy Agreement or, at the very least, been aware of the nature of her occupation of the Premises: that she was a tenant paying rent and that the 1^st plaintiff has been acting as an agent of the landlord. Thus, it must logically follow that Madam Chow could not have said anything to the effect of passing the possessory title to the 2^nd defendant as she now alleged.

46.  In applying the doctrine of “relativity of title”, I find that that the 2^nd and 3^rd plaintiffs, being the administrators of the estate of Madam Chow, have a better title relative to the 2^nd defendant because Madam Chow had been in possession prior to the 2^nd defendant and she had rented the Premises to the 2^nd defendant. Madam Chow had not, as a matter of fact, gifted, passed on or abandoned the possessory title to the 2^nd defendant.

The capacity of the 1^st plaintiff

47.  It is trite that the agency relationship should terminate upon the death of the principal Farrow v Wilson and wife, Administratrix & C [1869] L.R. 4 C.P. 744

48.  There was much argument on whether, after the death of Madam Chow, the 2^nd and 3^rd plaintiff had the capacity to continue to appoint her as an agent: the plaintiff’s case was that 2^nd and 3^rd plaintiffs instructed the 1^st plaintiff so during the funeral wake of Madam Chow around June 2009 (Core Bundle p. 105 paragraph 20), but the 2^nd and 3^rd plaintiffs did not apply for a Letter of Administration until 22 July 2016 and obtaining the same on 7 June 2016 (Core Bundle p.114 paragraph 21).

49.  The 2^nd defendant therefore challenged the validity of the agency agreement and the hence the tenancy agreement made by 1^st plaintiff after 2009.

50.  Mr. Ng, counsel for the plaintiffs, argued that the 1^st plaintiff had the authority to act on behalf of the estate in 2009 by applying the “doctrine of relation back”.

51.  The doctrine was discussed in Chan Lan Hong v Cheung Poh Choo [2005] 3 HKLRD 811 (CA):

“37. As a general rule, an intended administrator has no power to do anything as administrator before the grant of letters of administration. The doctrine of relation back is an exception to that general rule. For the doctrine to apply, it must be shown: (1) that the person whose conduct is relied upon as binding the estate should have been acting in the assumed character of an administrator, and he does that if the act is done by him when professedly intending to take out letters of administration so that he is an executor de son tort…”

52.  In this case, the 2^nd and 3^rd plaintiffs gave the instruction around June 2009 but they did not apply for the letters of administration until July 2016 (for the reason of the current proceedings as admitted by the 3^rd plaintiff in court). There is no evidence as to whether the 2^nd or 3^rd plaintiffs ever “professed an intention to take out letters of administration” when the instruction to the 1^st plaintiff was made during the funeral wake: the 3^rd plaintiff’s evidence was that she was not aware of such a legal procedure at the time.

53.  As such, I do not think that the doctrine of relation back would apply in this case.

54.  Mr. Ng also argued, as an alternative argument, that once the letters of administration have been obtained, the 2^nd and 3^rd plaintiffs have ratified the act of the 1^st plaintiff back in 2009 (raised in the Reply, Core Bundle p. 85).

55.  It is trite that the personal representatives can ratify contracts made for the estate (Chitty on Contracts 31-029). It is also trite that “ratification will be implied from any act showing an intention to adopt the transaction, including commencement of and pleadings in an action in law on the transaction in question….It may be inferred in appropriate cases even from…mere acquiescence.” (Chitty on Contract 31-028).

56.  Ratification is specifically pleaded in this case. Further, it can also be inferred from the evidence of the 3^rd plaintiff as stated in paragraphs 19, 20 and 21 of her witness statement that she had clearly acquiesced to instructing the 1^st plaintiff acting as the agent of the estate of Madam Chow: the witness statement was made in January 2019 which was after the Letters of Administration were obtained. I would therefore accept that the 2^nd and 3^rd plaintiffs have ratified the 2009 instruction and agreement for the 1^st plaintiff to act as an agent for the estate.

57.  In any case, I am not sure whether disputing the validity of the agency agreement (after 2009) would assist the 2^nd defendant’s case.

58.  The Tenancy Agreement was originally made between Madam Chow and the defendants, with the 1^st plaintiff acting as the agent. If it was the 2^nd defendant’s case that the 1^st plaintiff no longer had the authority to act as Madam Chow’s agent after her death and that there was no valid tenancy agreement, that still would not afford her any entitlement to continue to occupy the Premises nor dispute the title of Madam Chow (or her estate).

59.  A more prudent tenant might have delivered up vacant possession in the absence of a valid tenancy agreement. However, if one chose to continue to occupy as a trespasser to take advantage of the situation, perhaps in hope that no representatives of the deceased’s estate would come forward, then one must also take the risk of an eviction and claim for mesne profit when the representatives of deceased’s estate did come forward.

60.  Having said that, I do agree with Mr. Chan, the counsel for the 2^nd defendant, that the 1^st plaintiff has no standing in this claim: she has always maintained that she has acted as an agent of the landlord, and she has confirmed in court that she was not claiming any title to the Premises. Instead, the 1^st plaintiff’s proper role might be as a witness, and, as stated above, the court found no issue on her credibility as such. But this matter should only concern with the issue of costs.

Conclusion

61.  In conclusion, I find that the 1^st and 2^nd defendants have failed to pay the monthly rent since the month of April 2012 and, despite receiving a Notice of Termination that the tenancy would be terminated on 30 April 2013, have failed to deliver up vacant possession of the Premises to the 2^nd and 3^rd plaintiff.

Order

62.  I would accordingly give the order that:

(i)  The 1^st and 2^nd defendants shall:

(a)  Deliver up vacant possession of the Premises to the 2^nd and 3^rd plaintiffs;

(b)  Pay the 2^nd and 3^rd plaintiffs outstanding rents from 1 April 2012 to 30 April 2013 amounting to HK$14,300 with interests at half judgment rate per annum from 1 April 2012 until payment; and

(c)  Pay the 2^nd and 3^rd plaintiffs the mesne profit at HK$1,100 per month from 1 May 2013 until vacant possession.

(ii)  In view of the question of the 1^st plaintiff’s standing in this claim, I would give a cost order nisi that the 1^st and 2^nd defendants shall pay 2/3 of the costs of the action of the plaintiffs to be taxed if not agreed, and with certificate for counsel.