XCHRX WING LUNG BANK LTD. v. AUTO-GRAND CO. LTD. AND ANOTHER

HCMP 2256/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2256 of 1998

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REASONS FOR DECISION

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1. The premises involved in this dispute are the 1st to the 4th Floor, Ruby Commercial Building, 1st Floor of Golden Dragon Commercial Building and the 1st Floor of Tai Shing Commercial Building in Yau Ma Tei. The plaintiff is the mortgagee of all these properties. Auto-Grand Company Limited is the mortgagor of four of the said properties. The remaining two properties were mortgaged by All Lucks Industrial Company with Auto-Grand Company Limited as the borrower.

2. The applicant, Asian Shine Limited, claim to be occupier of all the said properties under tenancy agreements with Auto-Grand Company Limited and All Lucks Industrial Company Limited, running an institute known as the Norton Institute of English, Commerce and Computer. The plaintiff obtained judgment for possession of the said properties under mortgagee actions, and on the application by the applicant, execution of the said judgment was stayed for 28 days by Master CHUNG.

3. The applicant now appeals against such an order and seeks to have further extension of the stay for an additional six months on the basis that if vacant possession is to be delivered back to the plaintiff, students studying at this institute would be adversely affected.

4. The applicant claims not to be associated at all with Auto-Grand and All Lucks, and their relationship is simply one of landlords and tenant, under the tenancy agreements which were executed on 1 June 1998. Although there was not one single document proving it or supporting it or showing it, the applicant claims to be the institute running this Norton Institute of English, Commerce and Computer, which institute was also said to be run by Auto Rise Company Limited between 1988 and 1995, and then by Asset Faith International Limited between 1995 and 1998. But there was also evidence to the effect that Auto-Grand was trading as Norton Institute of English, Commerce and Computer in around 1996 to 1997 when Auto-Grand was, in fact, sued in such capacity in an action, ACCJ Action No 13929 of 1996.

5. CHAN Hing Kuen and CHAN Mei Mei have been and still are directors of Auto-Grand, and they were then appointed directors of the applicant in around October 1997. They then resigned as directors in March 1998 and were then replaced by Madam CHAN Sau Ngor and YEUNG Chiu Ping.

6. There was an indication to the effect that Auto-Grand and the applicant used to have the same registered address at the same place. In July 1998 the applicant changed its address to a place in Dundas Street in Mong Kok. The address of Auto-Grand and its directors were also changed to the same address at around the same time.

7. The situation as demonstrated in all these matters no doubt arouse grave suspicions pertaining to the actual relationship between the applicant and Auto-Grand and All Lucks Industrial Company Limited. I also bear in mind the nature of the alleged tenancy agreements between the applicant and Auto-Grand and All Lucks. As suggested by Mr TANG, the tenancy agreements and the receipts pertaining thereto were unsupported by any other evidence and one cannot help but feel that those documents could be easily made, if that is the correct word to describe it.

8. In fact, in those tenancy agreements, there is no reference to the applicant at all. There is no indication that the applicant was registered to be trading as Norton Institute of English, Commerce and Computer. On the evidence before this court, it is difficult for any reasonable tribunal to accept the suggestion that the applicant is, in fact, unrelated to Auto-Grand and All Lucks. Despite all these suspicious circumstances, and despite being given the opportunity, the applicant chose not to offer any explanation on such matters. The applicant is seeking an indulgence from this court. The applicant must be completely true and frank to the court, so as to enable the court to be able to apprehend the entire background and all factual matters before the discretion can be properly exercised.

9. Unfortunately, the applicant had not done so, and that in my view led to the only proper conclusion, that there was something sham about these so called transactions between the various parties in question. Hence, that being the case, there is no proper base upon which a court can even begin to consider the exercise of the discretion, because the court had not been given a true and frank picture of the factual matters upon which the discretion must be exercised.

10. The order for possession or the enforcement of which may have some adverse effect on the students studying at this Norton Institute of English, Commerce and Computer. Those were the making entirely of the applicant and/or perhaps its associates. If the students feel aggrieved and was looking for anyone for redress, they should go after those who land them in such an unenviable position. As I have said earlier there is no base, or proper base, upon which the court can even begin to consider the question of discretion when there is no full and frank disclosure of the matters relevant to the issue in question.

11. That being the case, the appeal must be dismissed.