XCHRX SHUI ON CENTRE CO. LTD. v. TO PERSONS UNKNOWN AND ANOTHER

HCMP 6029/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 6029 OF 2001

____________

____________

_______________

J U D G M E N T

_______________

1. This is the plaintiff's application under Order 113 of the Rules of the High Court for possession of Shop G02 on the ground floor of Shui On Centre, 6-8 Harbour Road of which it is the registered owner.

2. The application which was made on 15 November 2001 was supported by an affirmation of Mr Lau Wan Ching, its Senior Manager. In that affirmation he stated that the premises had been the subject of a tenancy agreement dated 3 November 1998 with a company called Silver Grand Holdings Ltd ("Silver Grand") which carried on business in the name of Gin Bishi Japanese Gold Restaurant. Rent rates and management fees had not been paid since 1 July 2001. The tenancy had expired on 15 October 2001.

3. The plaintiff through its solicitors had demanded vacant possession of the premises from Silver Grand in a letter of 18 October 2001 without result. The plaintiff had subsequently discovered that Silver Grand had been dissolved by deregistration on 8 June 2001. As a consequence, Silver Grand no longer existed in law and no permission had ever been granted to anyone else to occupy the premises. The plaintiff consequently sought an order for possession against the occupier or occupiers of the premises.

4. On 19 November 2001 the 2nd defendant successfully applied to be joined as a defendant to the originating summons. Its application was supported by an affirmation of Mr Chan Fai Kee who described himself as "Assistant to Manager" of the 2nd defendant but who incidentally had signed the original tenancy agreement on behalf of Silver Grand. The affirmation essentially alleges that Silver Grand entered the tenancy agreement as agent for the 2nd defendant which was an undisclosed principal. Accordingly the present occupation of the premises by the 2nd defendant amounts to the 2nd defendant simply holding over after termination of its tenancy. In such circumstances the plaintiff is not entitled to proceed under Order 113 by virtue of the terms of Order 113 rule 1. Mr Cheung who appears for the 2nd defendant today has expressly conceded that he is not alleging that the 2nd defendant was a disclosed principal prior to the signing of the tenancy agreement.

5. In his affirmation Mr Chan Fai Kee, in particular, alleges that before the signing of the tenancy agreement, he notified the plaintiff through the estate agent that there would be a possible change of party to the tenancy agreement after the execution of the tenancy agreement, and that the actual party trading in the premises would be the 2nd defendant.

6. He alleges that after the signing of the tenancy agreement, he made a request to the plaintiff for the signing of a new tenancy agreement in the name of the 2nd defendant as Silver Grand was only acting as agent for the 2nd defendant, and that the plaintiff has said that they had no objection. The 2nd defendant had not, however, proceeded with its request for a new tenancy agreement because he understood that the plaintiff was aware that Silver Grand was the agent of the 2nd defendant.

7. In an affirmation in reply, Mr Lau Wan Ching, on behalf of the plaintiff, affirmed that it was advised by the intended tenant's accountant prior to the signing of the tenancy agreement that the tenancy agreement should be in the name of Silver Grand. There had never been any suggestion prior to the signing of the tenancy agreement that there would possibly be a change of party to the tenancy after execution, or that the party actually trading there would be the 2nd defendant. There had never been any approach to the plaintiff for the signing of a new tenancy agreement in the name of the 2nd defendant, still less any intimation on the part of the plaintiff that it had no objection. He pointed out that the allegation that it was the 2nd defendant who had been trading at the premises was untrue since on 21 October 1998 Silver Grand had applied to the Business Registration Office for registration on the basis that it was the party carrying on the restaurant business at the premises.

8. Mr Lee, for the plaintiff, has argued with some force as to the inherent lack of credibility of the allegations in Mr Chan's affirmation. It is, however, not necessary for me to go into those matters for the purpose of deciding this application.

9. The law is clear.

As an exception to the parol evidence rule:

"where an agent enters into a contract, oral or written, in his own name evidence is admissible to show who is the real principal in order to charge him or to entitle him to sue on the contract. But the rights of the undisclosed principal to sue and his liability to be sued on a contract made by his agent may be excluded by the terms of the contract, expressed or implied."

See Bowstead and Reynolds on Agency (16th ed.) paragraph 8-069.

10. In so far as the latter proposition is concerned, Lord Lloyd of Berwick said in Siu v. Eastern Insurance Co. Ltd [1994] 2 AC 199 at 207:

"The terms of the contract may expressly or by implication, exclude the (undisclosed) principal's right to sue and his liability to be sued. The contract itself or the circumstances surrounding a contract may show that the agent is the true and only principal."

11. The case of Danziger v. Thompson & Ors [1944] 1 KB 655 shows that the mere description of a party as "tenant" does not of itself give rise to an implication that the person so described is not acting as an agent or nominee.

12. In this case, however, it is abundantly clear from the terms of the tenancy agreement that the parties were agreeing that Silver Grand would be the true and only principal. It is specifically provided in clause 3.32 that "the tenancy shall be personal to the tenant named in this tenancy agreement" (i.e. Silver Grand).

13. Furthermore, it is provided in sub-clause (f) that "the holding on trust by the tenant of the premises or any part thereof for a third party" should, unless approved in writing by the landlord, be a breach of the agreement.

14. The 2nd defendant's allegation that it was a party to the tenancy agreement and is now holding over must therefore fail.

15. I accordingly make an order in terms of the originating summons.