DRAGON HILL PROPERTIES LTD v. JOB WIDE DEVELOPMENT LTD AND ANOTHER

DCCJ 1709/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1709 OF 2011

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BETWEEN

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DECISION

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BACKGROUND

The judgment against the defendant

1.  The plaintiff is the current owner of the premises known as the 2^nd Floor, No.18 Merlin Street, Hong Kong (“the Premises”).  It purchased the Premises from a Mr. Chung Tai Kung (“Chung”) on 28^th February 2011.

2.  On 16^th March 2011, the plaintiff served a notice to quit on the defendant and informed the defendant that the tenancy would be terminated on 17^th April 2011.

3.  As the defendant has failed to vacate the Premises by 17^th April 2011, the plaintiff initiated the present action against the defendant and asked for, inter alia, an order for possession.  Such an order was granted on 13^th June 2011 upon the default on the part of the defendant to file notice of intention to defend.

The intended 2^nd defendant’s applications

4.  On 30^th June 2011, the intended 2^nd defendant applied to be joined as a defendant on the ground that he is the actual occupier of the Premises.  His application was dismissed by Master B. Mak on 8^th July 2011.

5.  The intended 2^nd defendant then brought an appeal against the learned Master’s decision and the matter was fixed to be heard by me today.

6.  He has also filed a summons by which he seeks leave to file an affirmation of Madam Ouyang Yu Yu in support of his appeal.

ADMISSION OF NEW EVIDENCE

7.  In an appeal from master to judge in chambers, parties are not allowed to adduce new evidence (other than evidence as to matters which have occurred after the date on which the judgment, order or decision was given or made) except on special grounds: Order 58 r.1(5) of the Rules of the District Court.

8.  As to what constitutes “special grounds”, guidance may be sought from the case of Chan Yauv. Chan Calvin and another (HCA 666/2007, unreported, 15 May 2009) where Sakhrani J. held that a party who intends to adduce new evidence in an appeal to a judge in chambers has to fulfill the Ladd v Marshall [1964] 1 WLR 1849 conditions.  To recap, those conditions are:

(1)   that the evidence could not have been obtained with reasonable diligence for use at the hearing below;

(2)   the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive;

(3)   the evidence must be such as is presumably to be believed.

9.  The intended 2^nd defendant has not filed any evidence in support of his application to adduce further evidence on appeal and Madam Ouyang has not put forward any explanation in her Affirmation as to why she could not have made her Affirmation earlier for use at the hearing below.

10.  It should be particularly noted that Madam Ouyang is the intended 2^nd defendant’s wife, and according to the intended 2^nd defendant’s evidence, they have been living under the same roof together all along.  There is thus no difficulty for the intended 2^nd defendant to obtain evidence from Madam Ouyang.

11.  Madam Ouyang stated in her Affirmation that Chung had assured her in 2007 that her family could stay in the Premises for 10 years (“the Assurance”).  She also exhibited two written tenancy agreements.  The first one was dated 1^st November 2007 for a term of two years.  The second one was dated 1^st November 2009 for a term of one year.

12.  Mr. Kwong for the intended 2^nd defendant submitted that since the intended 2^nd defendant was not present when the Assurance was given by the plaintiff to Madam Ouyang, therefore the intended 2^nd defendant could not give hearsay evidence on such an assurance in his own Affirmation which was filed for use in the hearing before the learned Master.  With respect, Mr. Kwong has overlooked Order 41 rule 5(2) of the RDC which allows admission of hearsay evidence in affidavits used in interlocutory applications so long as the sources of information are provided in such affidavits.  His submission in this regard must therefore be rejected.   

13.  Furthermore, there is no reason why the written tenancy agreements could not be produced as evidence earlier.

14.  As the intended 2^nd defendant has failed to satisfy condition (1) of the Ladd and Marshall conditions, the application to adduce fresh evidence must be dismissed.

THE APPEAL

15.  The applicable legal principles are set out in the case of Yu Wing Kan v Lau Shuk Lan (CACV 68/1989, unreported, 28^th June 1990) in which Clough JA cited Minet v Johnson (1890) 6 T.L.R. 417 (CA) as follows:

“The defendant allowed judgment to go by default. The judgment was to the effect that the Sheriff should give possession of the premises to the plaintiff. Up to that time the plaintiff has supposed that the defendant was in possession by himself, his tenants, or his servants. But on the writ of possession being executed the appellants, who were in actual possession, said that they ought not to be ejected without being heard. Of course, if they were tenants of the defendants it was the defendant’s possession, and out they must go. But supposing that they showed a right to possession not derived from the defendant, then what was their remedy? It was not to set aside the judgment obtained against the defendant, but to come in themselves and defend the action. They had a right to do this, because there had been, on their showing, a miscarriage of justice. If their application was made before judgment signet then they were to be treated at (sic) though they were defendants in the action. But if after judgment had gone by default the persons in actual possession, not knowing of the former proceedings, made their application, then they must be let in to defend, and so much of the judgment as affected them crust (sic) be set aside.” (see paragraph 29 of the Judgment)

16.  Having quoted the paragraph above, Clough JA had this to say:

“Minet v. Johnson is authority for the proposition that any person in actual possession of lama who is not made a party to an action for possession of that land by a plaintiff against a defendant is entitled to be added under Order 15 rule 10 as a defendant before or after judgment, provided he has a bona fide independent claim to be in possession. However, as Lora Esher pointed out in the passage cited above, if the applicant has no independent claim because his rights are wholly dependent upon those of the defendant in the action, out he must go. If the application is made after judgment, Minet v. Johnson confirms that if there are grounds for the application the judgment must be set aside so far as it affects the application but not as against the original defendant.” (see paragraph 31 of the Judgment)

17.  Mr. Kwong submitted that the intended 2^nd defendant is “not a sub-tenant of the defendant but is a representative of the corporate tenant” (at paragraph 8(b) of his written submissions).  If that is so, then the intended 2^nd defendant has no independent claim because his rights are wholly dependent upon those of the company defendant.  When I raised this with Mr. Kwong, he accepted that the intended 2^nd defendant does not have any independent claim as such.  However, he submitted that “the availability of independent claim” is not the right question to ask.  He said that the real question is: what is the nature of tenancy between the plaintiff and the defendant.

18.  I do not consider Mr. Kwong’s submissions have any merits at all.

19.  It can be seen that by asking to be added, in reality the intended 2^nd defendant is in attempt to set aside the judgment against the company defendant.  That cannot be permissible.

20.  Mr. Kwong also pointed out that the tenancy between Chung and the company defendant is not a “monthly tenancy” but of a term for 10 years from 1^st November 2007 subject to a rent review.  He also stated that Madam Ouyang’s Affirmation could shed light on this.

21.  Firstly, even if Madam Ouyang’s Affirmation is admitted as evidence (which is not), I cannot find any evidence therein to the effect that Chung had agreed that the tenancy would be for a term of 10 years. 

22.  Secondly, as accepted by Mr. Kwong, such a 10-year tenancy would be between Chung and the company defendant because apparently Madam Ouyang was dealing with Chung in her capacity as a representative of the company defendant (she is the secretary of the company defendant).  As aforesaid, I cannot see why the defendant should be allowed to set aside the judgment through the backdoor by an application made by the intended 2^nd defendant who is its director.  There is clearly no “independent claim” here.

23.  Thirdly, Mr. Kwong’s assertion is totally contradicted by the written tenancy agreement dated 1^st November 2007 which provided that the term was only two years and that the defendant was under an obligation to deliver up vacant possession of the Premises on the expiration or sooner determination of the agreement (i.e. latest by 31^st October 2009).

24.  Fourthly, even if there was such an agreement in 2007 as alleged, that must have been superseded by another written agreement dated 1^st November 2009 by virtue of which the tenancy was extended for only one year up to 31^st October 2010, and by the end of which the company was required to deliver vacant possession of the Premises back to the plaintiff.

25.  I should add that the analysis above supplies another ground in refusing the intended 2^nd defendant’s application to adduce Madam Ouyang’s Affirmation as this affirmation simply cannot assist his appeal at all.

CONCLUSION

26.  By reasons of the aforesaid, the intended 2^nd defendant’s appeal and his summons filed on 12^th July 2011 are dismissed with costs.