BEST GALAXY LTD v. 廖笑

DCCJ3134/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3134 OF 2015

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DECISION

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Introduction

1.  This is the plaintiff’s application for summary judgment against the defendant.

The plaintiff’s claim

2.  The plaintiff is the landlord of a piece of land known as “Lot No 2242 in Demarcation District 51, Fanling, New Territories, Hong Kong” (“the Land”). The defendant is an occupant.  The plaintiff seeks an order for vacant possession with damages to be assessed.

3.  The plaintiff acquired the Land on 29 October 2004 subject to an oral tenancy where Kwan Ping（關炳）as the tenant at an annual rental value of $1,800.  The defendant was the lawful wife of Kwan Ping.  Kwan Ping passed away in July 2011.

4.  The plaintiff served on Kwan Ping a notice of termination on 16 February 2011 by way of leaving at the Land. The said notice was also posted on the main door of the Land (or the house on the Land) from 16 February 2011 until 18 February 2011.   By giving six months’ notice in the notice of termination, Kwan Ping’s tenancy was terminated on 17 August 2011.  Nevertheless, the defendant and her family have been in possession of the Land until present.

5.  Neither Kwan Ping nor the defendant paid rent to the plaintiff.  Annual rent was only paid up to 17 August 2007.  Two subsequent payments were made in April 2009 and August 2014.

6.  The ratable value of the Land is less than $240,000 per year.

7.  In or about late 2014, the Government promulgated re-development of the north east New Territories, the plaintiff claimed vacant possession of the Land, (with damages to be assessed) for the purpose of negotiation for exchange of land.

The defendant’s defence

8.  The defendant relied on two promissory estoppels.  The 1^st promissory estoppel was alleged to be made by a local gentry-man, Chu Tak Hing (朱德興) in or about 1948.  Chu Tak Hing was as an agent of the owner of the Land, he rented the Land for and on behalf of the owner to the defendant at that time.  Chu promised Kwan, he could occupy and use the Land for cultivation so long as he and his successors wished to.  Chu also promised Kwan that he shall have the pre-emptive right to purchase the Land.  As a result, the defendant said the duration of the tenancy was binding on the Kwan’s successors and shall expire until the expiry of the Government Grant.

9.  The 2^nd promissory estoppel was alleged to be made by a representative/agent of the plaintiff in or about mid 2014.  In light of the redevelopment of the north east New Territories by the Government, the plaintiff’s representative/agent made representation to the defendant that it would recover a small portion of Land, around 360 square feet from the defendant, to facilitate exchange of land with the Government. The representative/agent of the plaintiff promised the defendant that she could continue to occupy the remaining part of the Land at an annual rental of $1800. The defendant sent two cheques of $1,800 each to the plaintiff in August 2013 and August 2014.

Legal principles

10.  The proper approach for granting summary judgment has been summarized by DHCJ B. Chu (as she then was) in Pacific Harbor Advisors PTE v. Winson Federal Ltd, HCA 1257/2013 (unreported, 1 August 2014):

(i)    Once the plaintiff shows a prima facie case, the burden shifts to the defendant to demonstrate why judgment should not be entered.

(ii)   A defendant must show that his assertions are believable and that there is a fair possibility of reasonable grounds that a bona fide defence exists.

(iii)  Whether a defendant’s assertions are believable should be tested against contemporaneous documents and other pertinent circumstances.

(iv)  Judgment should be granted if the defence put forward is “frivolous and practically moonshine”.

Concession by the defendant at hearing

11.  Mr Chow, counsel for the defendant sensibly conceded the following points at the hearing of the plaintiff’s summons:-

(i)    Kwan Ping had passed away and no live evidence can be tendered at trial but hearsay evidence.  The defendant abandons the 1^st promissory estoppel, ie, allegation of representation by Chu Tak Hing to Kwan Ping in or about 1948.  

(ii)   Section 6 of the Conveyancing and Property Ordinance, Cap 219 stipulated for all interest in land created by parol and not put in writing, it is capable to be terminated at will. Being an oral lease, the defendant admits the notice of termination was validly served on Kwan Ping on 16 February 2011 and the lease has been terminated on 17 August 2011.

(iii)  As the defendant is unable to tender believable evidence that a lease is still valid. The defendant is a trespasser who fell short of privity of contract with the plaintiff. The defendant does not rely on her pleaded case that contractual terms existed between herself and the plaintiff.  

The issues

12.  The issues in this application boil down to one issue: whether the 2^nd alleged promissory estoppel amounts to a bona fide defence.

Analysis

13.  The trite law on promissory estoppel is laid down in Lou Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1, the principles has been be summarized in paragraph 55 – 57 of the judgment:-

(i) The parties were in a relationship involving enforceable or exercisable rights, duties or powers.

(ii) One party (the promisor) by words or conducts, conveyed or was reasonably understood to convey a clear and unequivocal promise or assurance to the other (the promisee) that the promisor would not enforce or exercise some of those rights, duties or powers.

(iii) The promise reasonably relied upon that promise and was induced to alter his position or unconscionable for the promisor to act inconsistently with the promise.

(iv) Each element does not exist in its own watertight compartment to be kept separate from the others.  Each element acquires its meaning and content in the context of the other elements.

14.  The defendant pleaded, in or about mid-2014, there was once a representative/agent of the plaintiff promised her to surrender approximately 360 square feet of the Land for exchange of land with the Government, in turn she could continue to occupy the land at a rate of $1,800 per year.

15.  In the outset, the defendant is a trespasser and was subject to eviction. The defendant was not in a position of enforceable rights of any sort but in a disadvantaged position and should have no expectation of renewal of lease. The plaintiff intention is clear throughout all the years. The lease entered into by Chu Tak Hing and Kwan Ping has long been expired.  The plaintiff has clear intention to obtain vacant possession of the Land.  It could be evidenced by a similar claim commenced by the plaintiff for vacant possession in 2009 (DCCJ 2393 of 2009). For some reasons, the action was discontinued in 2010.  

16.  Secondly, the defendant must establish the plaintiff promisor had, by words or conducts, conveyed or was reasonably understood to convey a clear and unequivocal promise or assurance to her that the plaintiff would not seek vacant possession of the Land but to enter into a new tenancy agreement with the defendant.  The defendant had only pleaded a representative/agent of the plaintiff had made such representation.  Surprisingly, the defendant did not identify that person.  No particulars of the promise were ever pleaded in the defence.  Not until the plaintiff applies for summary judgment against the defendant, the defendant identified Mr Ning as the representative of the plaintiff in the affirmations in opposition. The evidence in the defendant’s affirmations is far from believable but mere assertion and was practicably moonshine.  

17.  Even if the defendant’s defence is put to the highest, the alleged promise of granting a new tenancy in exchange of a small strip of land has never proceeded. No contemporaneous document or evidence of any sort from the defendant can be seen that the defendant had in fact surrendered some area of the Land to the plaintiff. The defendant   remained a trespasser on the Land without actually forgone any part of the Land.  The representation itself was only mere negotiation, as submitted by Mr Ng, counsel for the plaintiff, which I accept.  

18.  Finally, bearing in mind each element does not exist in a watertight context, the defendant has an uphill battle to establish an existence of a bona fide defence when the defence was only premised on the 2^nd alleged promissory estoppel. No believable evidence can be demonstrated in the affirmations that there are some reasons that the plaintiff’s claim ought to proceed to trial. No believable evidence can be found in the defendant had ever relied on the alleged representation (if any) to alter her position.  She remains as a trespasser since the termination of the tenancy with a wishful thinking that she could have possessed the Land by whatever means or at least as long as she could.  

19.  With the foregoing reason, I am satisfied summary judgment should be entered for the plaintiff against the defendant.  

Conclusion

20.  I make the following orders:-

(i) Final judgment be entered for the plaintiff that the defendant shall deliver vacant possession of the land known as “Lot 2242 in Demarcation District 51, Fanling, New Territories” to the plaintiff.  

(ii) Damages to be assessed.

(iii) The defendant do pay the costs of the plaintiff’s summons filed on 18 April 2016, with certificate for counsel, to be taxed if not agreed.

(iv) The defendant’s own costs be taxed in accordance with the Legal Aid Regulations.