CHEN HSONG INVESTMENTS LTD v. WONG PING CHUEN AND OTHERS

HCMP 1769/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1769 OF 2007

(ON AN INTENDED APPEAL FROM LDPE 1146 OF 2006)

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DECISION

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1.  This is Madam Ko’s, the 3^rd named 2^nd respondent to the proceedings, application for leave to appeal out of time.  The judgment was handed down on 29 June 2007, and time to appeal expired on 20 July 2007.  The application for leave to appeal out of time was made on 18 September 2007.  The delay is about 2 months.

2.  Madam Ko explained that part of the delay was caused by her having to sell her flat in order to fund the appeal.  That would not of itself excuse the delay but help to put the delay in its context.

3.  Also, in the meantime, on 3 August 2007, Madam Ko applied for a review of the decision.  That application was made out of time and was dismissed on 24 August 2007.

4.  I am satisfied that the delay is inexcusable.

5.  However, I have decided that this is a suitable case for leave to appeal out of time to be given.  I do so because I am of the view that the appeal has a reasonably good prospect of success.

6.  I will state my views very briefly.

7.  The 1^st respondent was the applicant’s tenant in relation to a shop in Kowloon under a Tenancy Agreement dated 3 May 2004 for a term of 3 years commencing on 1 April 2004.

8.  It appeared that the 1^st respondent had failed to pay rent since at least 1 January 2006.  By the present proceedings, the tenancy was forfeited.

9.  The 2^nd and 3^rd respondents were sued as sub-tenants of the 1^st respondent and/or as occupiers, and mesne profits at HK$30,000.00 a month were claimed from them as from 1 November 2006.

10.  The 2^nd respondent was a partnership.  Mr Li, the 2^nd named 2^nd respondent, and Madam Ko were partners.

11.  Judgment by default was entered against the 1^st and 2^nd named 2^nd respondent.  The 1^st named 2^nd respondent is apparently a firm and does not have separate legal existence.  It appeared to be a name under which the 2^nd named as well as the 3^rd named 2^nd respondent traded, but whether that is so or not does not really matter.

12.  At the trial, Madam Ko was represented and took part in the proceedings.  The 3^rd respondent appeared in person.  The 1^st respondent was represented by a Madam Wong at the hearing.  The applicant was represented at trial but not by Mr T M Lee, who appears today on behalf of the applicant.

13.  H H Judge Wong after trial gave judgment against Madam Ko for mesne profits as from 1 November 2006 until vacant possession.  I am told that the vacant possession was delivered up presumably by the 3^rd respondent on 4 June 2007.

14.  I do not think it was disputed that so far as Madam Ko was concerned, she was not physically in possession of the premises after 1 November 2006.

15.  Mr Lee, who appeared for the applicant, submitted that on the proper reading of the judgment, the learned judge seemed to have found that the 2^nd respondent were the assignee of the 1^st respondent’s tenancy.  I have to say that looking at the judgment, it is not clear to me that that was indeed the judge’s conclusion.  Certainly, that was not how the case was pleaded on behalf of the applicant below.  There was no amendment to the application before the learned judge.

16.  But whether Mr Lee is right or not perhaps does not matter for the present purpose.  He submitted that Madam Ko as assignee would be liable as long as the privity of estate continues, the liability would only cease:

“	… as soon as the assignee further assigns the lease, except as regards rent accrued due and breaches of covenant incurred at the time of the assignment. …” Hill & Redman’s Law of Landlord and Tenant, Vol. 1, para. A[2009]

17.  However, according to Madam Ko’s defence, she alleged in para. 4(vii), (viii) of her Grounds and Particulars of Opposition that by an agreement dated 27 February 2006, Mr Li and Madam Ko agreed to terminate their partnership, and that Mr Li should be responsible for all rent and miscellaneous charges in relation to the premises thereafter.

18.  That being the case, I believe it is reasonably arguable that she might have assigned her interest to Mr Li as of 27 February 2006 even if she was indeed the assignee of the 1^st respondent’s interest.  And if that were so, according to Hill & Redman, she would not be liable thereafter.

19.  For the above reasons, I will grant leave to appeal out of time.

Costs

20.  Costs of the application be to the applicant in any event.