DCCJ 1695/2021
[2024] HKDC 1346
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO 1695 OF 2021
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BETWEEN |
| | 金藝企業有限公司 | Plaintiff |
| | and | |
| | 余曉燕 | Defendant |
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| Before: | His Honour Judge Alan Kwong in Court |
| Dates of Hearing: | 7-9 and 13 August 2024 |
| Date of Judgment: | 26 August 2024 |
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JUDGMENT
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A. Introduction
1. This action is concerned with the use and occupation of House No H-32, Green Crest, No 93 San Tam Road, Yuen Long (the “Property”).
2. In the present trial, Ms Van Ma represents the Plaintiff, and Mr Kevin CW Wong represents the Defendant.
B. Material Background
B1. The Plaintiff’s Case
3. The Plaintiff has been the registered owner of the Property since 20 June 2008.
4. Pursuant to a tenancy agreement dated 15 June 2018 (the “Tenancy Agreement”), the Plaintiff leased the Property to the Defendant at a monthly rental of HK$29,000 for a term of 2 years commencing on 1 April 2018.
5. It is the Plaintiff’s case that the parties entered into the Tenancy Agreement under the following circumstances:-
(1) On 5 June 2015, Madame Cheung Lai (“Madame Cheuk”) acquired the 100% shareholding (ie 10,000 shares) in the Plaintiff from Mr Cheung Shing Tai (“Mr Cheung”) and became the Plaintiff’s sole shareholder and sole director.
(2) On 9 March 2016, Madame Cheuk caused the Plaintiff to allot 10,000 shares to Mr Wong Ka Ho (“Mr Wong”). Since then, Madame Cheuk and Mr Wong have been (i) respectively holding 50% shareholding in the Company; and (ii) acting as the Company’s directors.
(3) Whilst Mr Wong is a shareholder and director of San Tong Lee Company Limited (“San Tong Lee”), Madame Cheuk and her husband Mr Lo Chiu Cheung (“Mr Lo”) are the shareholders and directors of Sino Target International Limited (“Sino Target”).
(4) The Defendant has an interest in San Tong Lee. According to the public records from the Companies Registry, the Defendant is a minority shareholder and a director of San Tong Lee.
(5) On 15 June 2018, the Defendant acting on behalf of San Tong Lee and Mr Lo acting on behalf of Sino Target entered into a co-operation agreement that was written in Chinese (the “2018 Agreement”).
(6) The 2018 Agreement contains the following terms that are pertinent for present purposes:
(a) The parties acknowledged that San Tong Lee had the rights to develop certain lands in Yuen Long (the “Yuen Long Lands”), and Sino Target was interested in participating in this development project (see preamble).
(b) San Tong Lee agreed that 25% of the interest in the development project be sold to Sino Target for the consideration of HK$25 million (see clause 1).
(c) Upon signing the 2018 Agreement, Sino Target should pay HK$8.5 million to San Tong Lee as deposit (see clause 2).
(d) Sang Tong Lee should be solely responsible for obtaining the rights of way and the letter for redevelopment (see clause 3).
(e) Within 24 months after singing the 2018 Agreement, San Tong Lee should obtain a judgment in its favour in HCA 1081/2012 (see clause 5).
(f) The parties agreed that Sino Target should pay the balance of the consideration for acquiring the 25% interest in the development project by transferring the Property (which was owned by the Plaintiff), and the price thereof was agreed at HK$12.5 million (see clause 6).
(g) The provisions under clause 6 set out the details as to how the shareholding in the Plaintiff and indebtedness owed by the Plaintiff should be dealt with. Clause 6(8) envisaged the Defendant would live in the Property after the 2018 Agreement was signed, and a sum of HK$1 million (being the rental and related expenses of the Property) would be utilized to set-off against the total consideration (ie HK$25 million).
6. In light of the provisions under clause 6(8) of the 2018 Agreement, Mr Wong acting on behalf of the Plaintiff and the Defendant entered into the Tenancy Agreement on the same day when the 2018 Agreement was signed. It was agreed that the Property be leased to the Defendant at the monthly rental of HK$29,000.
7. In around late 2019, Mr Wong became aware that the Defendant was incapable of procuring San Tong Lee to obtain a favourable judgment in HCA 1081/2012 before the contractual deadline.
8. In the circumstances, around early January 2010, Mr Wong, Mr Lo and the Defendant agreed that the 2018 Agreement be terminated and that the provisions thereof should cease to have effect. Thus, the Defendant should pay the outstanding rental in respect of the Property pursuant to the terms of the Tenancy Agreement.
9. Despite repeated demands, the Defendant has not paid any rental at all. Meanwhile, she continued to use and occupy the Property.
10. On 16 April 2021, the Plaintiff commenced the present action. It seeks the following reliefs against the Defendant: (i) vacant possession of Property; (ii) a sum of HK$696,000 (ie outstanding rental pursuant to the Tenancy Agreement from 1 April 2018 to 31 March 2020: and (iii) mesne profits in respect of the Property at the rate of HK$29,000 per month from 1 April 2020 until vacant possession is delivered.
B2. The Defendant’s Case
11. The contents of the Defendant’s homemade defence and counterclaim (as well as witness statements) are convoluted and most difficult to comprehend.
12. The Defendant only engaged legal representatives after the pre-trial review. In his opening submissions, Mr Kevin Wong helpfully clarified that the Defendant would only seek to rely on the following lines of defence:
(1) The Tenancy Agreement is a sham, in that the parties did not have the intention to create a tenancy relationship at all.
(2) The Tenancy Agreement (which was undated) was signed in 2016, not on 15 June 2018.
(3) When the Tenancy Agreement was signed, Mr Wong said that the Defendant only needed to pay 0.5% of the value of San Tong Lee’s shareholding as the annual rental in respect of the Property or the Yuen Long Lands owned by San Tong Lee.
13. For completeness, it should be pointed out that the Defendant has brought a number of counterclaims. She alleges that:
(1) Sky Trinity Enterprises Ltd shall pay damages in respect of her alleged loss of HK$4.56 million arising from the project regarding the Yuen Long Lands;
(2) Mr Wong shall pay her a sum of HK$3.8 million being the indebtedness arising from his acquisition for the shareholding in San Tung Lee;
(3) Sky Trinty Enterprises Ltd shall pay her alleged legal expenses of HK$800,000; and
(4) The Plaintiff shall pay her a sum of HK$241,158.10 being the management fees in respect of the Property.
C. Witnesses
14. The Plaintiff adduces evidence from Mr Wong.
15. The Defendant adduces evidence from herself and Mr Cheung.
D. Legal Principles on Assessing Credibility
16. In Lee Fu Wing v Yan Paul Po Ting [2009] 5 HKLRD 513 at 524, DHCJ Au (as Au JA then was) set out the well-established approach on assessing credibility. In the course of assessing the credibility of a party’s case, the Court shall consider the following matters:
(1) whether the party’s case is inherently plausible or implausible;
(2) whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;
(3) where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests, this is relevant to the assessment of his overall credibility; and
(4) the demeanour of the witnesses.
17. In the context of adjudicating a dispute in relation to an alleged oral agreement or understanding, in Joint and Several Trustees of Yeung Wing Sing v Yeung Wing Sing & Anor[2021] HKCFI 2018 at para 26, Yvonne Cheng J pointed out that:
(1) contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility;
(2) in deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events;
(3) care should be taken in regard to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence;
(4) care should be taken in drawing conclusions about truthfulness and reliability solely or mainly from the appearance of a witness or from the assessment of a witness’ character; and
(5) witnesses’ credibility should be tested by reference to the objective facts proved independently of their testimony, and regard should be had to their motives and to the overall probabilities.
18. The aforesaid approach is well-established: see eg Siu Miu Hua v Wu Ching Kuen[2024] HKCFI 232, para 84 (per Keith Yeung J); Hui Chi Ming v Koon Wing Yee[2023] HKCFI 93 at para 147; Salleh Abu Baker v Anway Ltd[2021] HKCFI 3407 at para 12 (per Recorder William Wong SC). I will apply the same in assessing the credibility of the parties’ case and their assertions.
E. Deliberation
E1. The 2013 Agreement and 2013 Letter of Promise
19. There is no dispute that the Plaintiff was all along (and still is) the registered owner of the Property.
20. In her evidence, the Defendant alleges that back in January 2013 (by which time Mr Cheung was still the sole shareholder and director of the Plaintiff), she on behalf of San Tong Lee and Mr Cheung signed a co-operation agreement dated 8 January 2013 (the “2013 Agreement”). In gist, it was agreed that (i) Sang Tong Lee had the rights to develop the Yuen Long Lands; (ii) Mr Cheung wished to acquire 25% interest in the project for the consideration of HK$17.5 million; and (iii) the Property (which was owned by the Plaintiff) would be utilized to defray part of the consideration, and the price thereof was agreed at HK$12.5 million.
21. The Defendant says that in light of the 2013 Agreement, Mr Cheung signed a letter of promise dated 16 February 2013 (the “2013 Letter of Promise”) confirming that the Defendant was authorized to use and occupy the Property without paying any rental until the transaction under the 2013 Agreement was completed.
22. When the Defendant gave oral evidence, she admitted that the 2013 Agreement was no longer operative as Mr Cheung failed to perform the payment obligations thereunder and she had not received a single penny. The Defendant also accepted that the 2013 Agreement (from which the 2013 Letter of Promise derived) was superseded by the 2018 Agreement[1].
23. In the premises, the 2013 Agreement and the 2013 Letter of Promise would not avail the Defendant’s defence at all. As accepted by the Defendant, the underlying transaction under the 2013 Agreement had derailed, and the same was superseded by the 2018 Agreement. It follows that the bare license granted by Mr Cheung on behalf of the Plaintiff (which was evidenced or reflected by the 2013 Letter of Promise) must have lapsed.
24. In any event, there is no reason why the Plaintiff may not revoke the bare license granted by Mr Cheung. Mr Cheung ceased to be a shareholder of the Plaintiff as early as 5 June 2016, and he is no longer a director of the Plaintiff. Mr Wong (who is now a director and shareholder of the Plaintiff) must have authority to (i) cause the Plaintiff to enter into the Tenancy Agreement; (ii) enforce the Tenancy Agreement; (iii) recover possession of the Property; and (iv) commence and pursue the present action against the Defendant.
25. In this connection, it is pertinent to refer to Bold Shine Investment Ltd v Zheng De & Ors[2024] HKCA 767 at paras 26-28. There, Chu VP, applying Kammy Town Limited v Super Glory Corporation (HCA 3524/2003, 14 January 2005) at paras 11, 13-14 and 18-21 (per A Cheung J (as Cheung CJ then was)), pointed out that a defendant must raise challenge in respect of authority to sue at the earliest opportunity, and even the challenge involves substantial dispute of facts, the issue must be determined before the case proceeds further.
26. In the present case, the Defendant has never raised any challenge in respect of Mr Wong’s authority. All along, the parties conducted the present proceedings on the basis that Mr Wong did have authority to act on the Plaintiff’s behalf. There is no room to suggest that the Mr Wong had no authority to sue the Plaintiff and to recover possession of the Property[2]; nor is there any basis to contend that the Mr Wong could not enter into the Tenancy Agreement on the Plaintiff’s behalf. The Defendant has not even pleaded that the Tenancy Agreement is void for want of authority.
27. In these premises, Mr Kevin Wong (who represented the Defendant) does not seek to dispute Mr Wong’s authority to act on behalf of the Plaintiff. This is fair and appropriate.
E2. The 2018 Agreement and the Tenancy Agreement
28. It is not in dispute that:-
(1) the 2018 Agreement was signed;
(2) the transaction under 2018 Agreement has derailed, and the terms thereof are no longer operative; and
(3) the parties did sign the Tenancy Agreement.
29. However, the Defendant alleges that the 2018 Agreement was signed in 2016, and the Tenancy Agreement was signed in 2014. She alleges that when Mr Wong asked her to sign the Tenancy Agreement (which was undated) back in 2014, Mr Wong said that the Tenancy Agreement was used for the purpose of obtaining a bank mortgage. The Defendant also alleges that she and Mr Wong signed a document which provided that the annual rental of the Property should be equivalent to 0.5% of the value of San Tong Lee’s shareholding or the value of the Yuen Long Lands. However, Mr Wong refused to disclose this document.
30. For the following reasons, I reject Defendant’s contention that the Tenancy Agreement was a sham, and I am of the view that the Defendant has no defence to the Plaintiff’s claims at all.
31. As Diplock LJ (as Lord Diplock then was) pointed out in Snook v London and West Riding Investments Ltd [1967] 2 QB 786 at 802C-F, a sham in law means:
“ … acts done or documents executed by the parties to the ‘sham’ which are intended by them to give to third parties or to the court the appearance of creating between the parties legal rights and obligations different from the actual legal rights and obligations (if any) which the parties intend to create. But one thing, I think, is clear in legal principle, morality and the authorities … that for acts or documents to be a ‘sham,’ with whatever legal consequences follow from this, all the parties thereto must have a common intention that the acts or documents are not to create the legal rights and obligations which they give the appearance of creating.” (my emphasis)
32. In her homemade defence and counterclaim, the Defendant briefly mentioned that at the occasion where the Tenancy Agreement was signed, Mr Wong represented to her that he would simply show the document to a bank, and the same was not enforceable. The Defendant does not expressly plead that the Tenancy Agreement was a sham or that the parties did not have the intention to create the legal rights and obligations stipulated by the document.
33. In my view, the Defendant’s pleas are inadequate. In order to support a case on sham, the Defendant should have expressly pleaded the material fact that she and the Plaintiff shared a mutual intention that the Tenancy Agreement did not create the legal rights and obligations that it purported to create. This material fact would be crucial to the assertion that the Tenancy Agreement was a sham. Had the same been pleaded, the Defendant would have been entitled to seek particulars in respect thereof: see Hong Kong Civil Procedure (2024) at para 18/12/21. In light of the convoluted nature of the allegations contained in the homemade defence and counterclaim, I am of the view that the Defendant’s pleas are far too obscure, and an objective bystander could not have appreciated that the Defendant seeks to run a case based on sham.
34. In the circumstances, the Plaintiff was caught by surprise, and would be prejudiced if the Defendant were permitted to pursue the contention. Since the contents of the Defendant’s defence and counterclaims, witness statements and affirmations are very convoluted, I have sympathy towards the Plaintiff. Being confused by the Defendant’s stance and convoluted allegations, the Plaintiff could not have appreciated the case that it was expected to meet, and thus put forward a full-blow response and gathered all the relevant evidence and materials.
35. In any event, putting aside the inadequate pleas, I am of the view that the evidence does not before the Court support the Defendant’s assertion that the Tenancy Agreement was a sham.
36. In A v A [2007] 2 FLR 467 at paras 53-54, Munby J (as Munby LJ then was), following National Westminster Bank plc v Jones [2000] BPIR 1092 at para 59 (per Neuberger J (as Lord Neuberger then was), pointed out that the Court would not lightly find that a transaction was a sham. His Lordship stated:-
“53. An allegation of sham is a serious matter. As Neuberger J said in National Westminster Bank plc v Jones [2000] BPIR 1092 at para [59]:
‘there is a very strong presumption indeed that parties intend to be bound by the provisions of agreements into which they enter, and, even more, intend the agreements they enter into to take effect.’
Moreover, and because as Neuberger J pointed out (see paras [40], [46] and [59]) ‘a degree of dishonesty is involved in a sham’, it follows (see para [59]) that:
‘there is a strong and natural presumption against holding a provision or a document a sham.’
54. Moreover, it has to be borne in mind that a finding of sham may have serious implication …”.
37. If the Defendant’s assertion were true, what Mr Wong did was to seek obtaining properties by deception, in that he sought to mislead the bank to grant a mortgage loan by creating a false pretense as if there were a genuine tenancy relationship between the Plaintiff and the Defendant under the Tenancy Agreement when the truth was that no such relationship existed. The Defendant’s assertion is a grave accusation that attacks the honesty and integrity of Mr Wong. If the assertion were established, Mr Wong as well as the Defendant herself may incur criminal liability.
38. It is trite that the Court will not make findings involving grave misconduct or wrongdoing unless the same is proved by cogent evidence that commensurate the seriousness of allegations: see eg Nina Kung v Wang Din Shin (2005) 8 HKCFAR 387 at para 182 (per Ribeiro PJ); and Re ChinaCulture.com Limited[2022] HKCFI 1114 at paras 22-23 (per Harris J).
39. I am not satisfied the Defendant’s assertion is supported by the evidence. In my view, the Defendant’s assertion is inconsistent with the objective circumstances of the case and the inherent probabilities.
40. As evidenced by the public records from the Lands Registry, the Plaintiff charged the Property in favour of HSBC under a mortgage dated 18 January 2017. However, the Tenancy Agreement was dated 15 June 2018. It is important to note that the Tenancy Agreement was presented to the Inland Revenue Department for assessment and properly stamped in accordance with the provisions of the Stamp Duty Ordinance (Cap 117). Had the Mr Wong intended to rely on the Tenancy Agreement to obtain a mortgage loan as alleged by the Defendant, Mr Wong would have inserted a date that was earlier than 18 January 2017 into the Tenancy Agreement and the Tenancy Agreement would have been presented to the Inland Revenue Department for assessment before 18 January 2017. This was not the case. In light of the chronology of events, it was plain that the Tenancy Agreement had nothing to do with the mortgage loan granted by HSBC. In my view, the Defendant’s assertions are plainly contradicted by the incontrovertible facts and the objective evidence.
41. Furthermore, I cannot see any logical reason why Mr Wong and the Defendant would seek to agree that the annual rental of the Property should be based on 0.5% of the value of the shareholding in San Tong Lee or the Yuen Long Lands owned by San Tong Lee. The rental value of the Property had nothing to do with the value of the shareholding in San Tong Lee or the Yuen Long Lands. Furthermore, it would cumbersome to value the shareholding in San Tong Lee and/or the Yuen Long Lands from time to time. The Defendant’s assertion does not make commercial sense and is inherently improbable.
42. In contrast, the Plaintiff’s case makes sense and is consistent with the objective circumstances and the incontrovertible facts. Whilst the Defendant emphasizes the facts that she continuously occupied the Property without being asked to pay rental, it is important not to lose sight of the terms and provisions of the 2018 Agreement, which provided that the rental in respect of the Property was to be set-off against the consideration for acquiring the 25% of the interest in the development project regarding the Yuen Long Lands. This arrangement was commercially explicable. I accept that due to the agreement under clause 6(8) of the 2018 Agreement, the parties entered into the Tenancy Agreement. I also accept Mr Wong’s evidence that the monthly rental of HK$29,000 under the Tenancy Agreement was based on the comparable rental value in respect of other properties in the same residential estate (ie Green Crest), and back in 2018 Mr Wong did check the information on the websites operated by the well-known estate agents in Hong Kong.
43. Furthermore, I do not lose sight of the fact that the Defendant issued a lengthy WeChat message to Mr Lo on 18 January 2020. In this message, the Defendant expressed her displeasure about the fact that the Plaintiff’s solicitors issued a letter demanding her to pay outstanding rental in respect of the Property. Had the Tenancy Agreement been a sham, the Defendant would have mentioned this expressly as this was the forefront of her defence. However, not an iota of the message suggests that the Tenancy Agreement was a sham. The Defendant only accused Mr Lo of failing to perform the 2018 Agreement and causing embarrassment to her (as the demand letter from the Plaintiffs’ solicitors was posted at a place where the public could access).
44. For all the above reasons, I prefer the Plaintiff’s case to the Defendant’s case. I also prefer Mr Wong’s evidence to the Defendant’s evidence.
45. In the premises, I find that:-
(1) Although Mr Cheung on behalf of the Plaintiff granted a bare license for the Defendant to use and occupy the Property, such bare license had lapsed alongside the 2013 Agreement (which was, as admitted by the Defendant, not performed by Mr Cheung and superseded by the 2018 Agreement).
(2) In any event, Mr Wong, who is a shareholder and director of the Plaintiff, must have revoked the previous bare license granted by Mr Cheung. The previous arrangement was superseded by the 2018 Agreement as well as the Tenancy Agreement, which created a tenancy relationship between the Plaintiff and the Defendant.
(3) It is not open to the Defendant to assert that the Tenancy Agreement was a sham. Whilst sham has not been expressly pleaded, the material facts regarding the parties’ mutual intention have not been pleaded as well. In the circumstances, the Plaintiff would suffer prejudice if the Defendant were allowed to pursue the contention.
(4) Even if the Defendant were allowed to pursue the contention that the Tenancy Agreement was a sham, I would firmly reject such contention on the evidence before me. The Defendant has failed to adduce sufficiently cogent evidence that commensurate with her assertion, which attacks the honesty and integrity of Mr Wong and which carries connotations as to criminal liabilities. Moreover, the Defendant’s assertion is not only inherently improbable, but also contradicted by the objective circumstances and incontrovertible facts in the present case.
46. Having said that I prefer the Plaintiff’s case and evidence, I also find that the Tenancy Agreement was signed on 15 June 2018 on the same occasion where the 2018 Agreement was signed. There is no question that the Tenancy Agreement is binding on the Defendant as it is trite that a person of age and capacity is bound by his or her signature to a document: see Bank of China (Hong Kong) Ltd v Fung Chin Kan (2002) 5 HKCFAR 515 at 533 (per Litton NPJ); Dah Sing Bank Limited v Sun Create Richly Holdings (Asia) Limited[2024] HKCFI 1512 at para 19 (per DHCJ Pe Lichon).
47. In my view, the Defendant ought to know that she was bound by the terms and effect of the 2018 Agreement as well as the Tenancy Agreement and that she was not entitled to occupy the Property without the Plaintiff’s consent. As stated in page 3 of her affirmation dated 29 November 2021, the Defendant alleged that she was financially capable of buying or renting the Property, and it was for Mr Lo to make a choice. When the Defendant gave oral evidence, she even said that she proposed to buy the Property because the 2018 Agreement had ceased to have effect. This is a glaring admission. The Defendant knew that she had no basis to occupy the Property without the Plaintiff’s authorization, and this was why she proposed to buy or rent the Property.
48. For all the above reasons, I accept the Plaintiff’s claims based on the Tenancy Agreement, and I order the Defendant to:-
(1) deliver vacant possession of the Property forthwith;
(2) pay the sum of HK$696,000, being the outstanding rental under the Tenancy Agreement.
E3. Mensne Profit after the expiry of the Tenancy Agreement
49. I now deal with the Plaintiff’s claim for mesne profit. In her closing submissions, Ms Ma accepts that the mense profits to which the Plaintiff is entitled shall be based on “the prevailing market rent of the Property during the period of wrongful occupation”.
50. However, the Plaintiff has not adduced any evidence in relation to the rental value of the Property after the Tenancy Agreement expired on 31 March 2020. This is not satisfactory. Bearing in mind the changing economic circumstances in the previous years, I cannot simply assume that the market rental value of the Property has been HK$29,000 per month all along.
51. When the Defendant gave oral evidence, she informed me that she had a Korean neighbor who was in good relationship with her, and they gathered from time to time. The house occupied by the Korean neighbor (which was in the same residential estate, ie Green Crest) was of the same size as the Property. They both faced the swimming pool, and the views were very similar. The Defendant was told by this Korean neighbor that she had been renting the house at a monthly rental of HK$20,000 in the past few years.
52. In light of the way in which the Defendant spontaneously provided the details in respect of (i) her discussion with the Korean neighbor; (ii) their friendly relationship; and (iii) the location and condition of the house rented by the Korean neighbor, I am of the view that the Defendant’s evidence was truthful.
53. This is indeed the only evidence before me that sheds light on the rental value of the Property. Although Mr Wong informed me that he checked the rental value of the properties in the same residential estate back in 2018 before the Tenancy Agreement was prepared, he did not say that he underwent the same exercise after the Tenancy Agreement expired.
54. In the premises, based on the evidence from the 1st Defendant (which I accept), I find that the market rental value of the Property has been HK$20,000 per month since 31 March 2020, and I order the Defendant to pay mesne profits in respect of the Property at the rate of HK$20,000 per month from 1 April 2020 until vacant possession is delivered.
E4. The Counterclaims brought by the Defendant
55. Mr Kevin Wong (for the Defendant) fairly and appropriately accepts that it is not open to the Defendant to pursue the purported counterclaims against Sky Trinity Enterprises Ltd and Mr Wong as they have not been joined as defendants by counterclaim in the present proceedings.
56. The Defendant has also brought a counterclaim against the Plaintiff, and it is suggested that the Defendant paid the management fees in respect of the Property in the total amount of HK$241,158.10. The Defendant contends that the Plaintiff should reimburse her in respect thereof.
57. As pointed out by Ms Ma:-
(1) The Defendant has failed to produce any documentary evidence (such as receipts, bank records, etc) to prove that she made the alleged payments of HK$241,158.10.
(2) It is Mr Wong’s unchallenged evidence that the management fee in respect of the Property was around HK$3,000 odd per month. Upon discovering that the Plaintiff had not paid the management fees in respect of the Property for a substantial period, on 30 September 2022 he immediately pay a sum of HK$135,528.15 to the incorporated owners of Green Crest in order to defray the outstanding management fees.
(3) The payment of HK$135,528.15 made by Mr Wong is evidenced by a bank deposit slip. This payment covered a period of 34 to 45 months prior to September 2022.
58. I accept Ms Ma’s submissions. I am not satisfied that the Defendant has proved her counterclaim in relation to the management fees. I also prefer the evidence of Mr Wong (which is supported by the contemporaneous bank record and which contradicts the Defendant’s bare assertions).
59. I accordingly dismiss all the counterclaims brought by the Defendant in the present proceedings.
E5. Other Allegations raised by the Defendant
60. For completeness, I should mention that in her oral evidence, the Defendant kept alleging that Mr Lo and Madame Cheuk defrauded Mr Cheung. She alleged Mr Wong and herself were the victims of the alleged frauds perpetrated by Mr Lo and Madame Cheuk. I am of the view that the disputes relating to these accusations are not directly relevant to the core issues in the present action. In any event, it is for Mr Cheung to consider how the dispute should be resolved. It is neither desirable nor necessary for me to express any view on the dealings amongst Mr Cheung, Mr Lo, Madame Cheuk and Mr Wong.
F. Orders and Disposition
61. For all the above reasons, I order that:-
(1) the Defendant do deliver vacant possession of the Property forthwith;
(2) the Defendant do pay the Plaintiff a sum of HK$696,000, being the outstanding rental under the Tenancy Agreement;
(3) the Defendant do pay mesne profits in respect of the Property to the Plaintiff at the rate of HK$20,000 per month from 1 April 2020 until vacant possession is delivered; and
(4) all the counterclaims brought by the Defendant in this action be dismissed.
62. There is no reason why costs do not follow event. I make a costs order nisi that the Defendant do pay the Plaintiff’s costs in the present action (including all costs reserved) to be taxed if not agreed (with certificate for counsel).
63. Any application to vary such costs order nisi shall be taken out within 14 days.
G. Other Matters
64. I thank Ms Van Ma and Mr Kevin CW Wong for their helpful assistance rendered to me.
| | ( Alan Kwong )
District Judge |
Ms Van Ma, instructed by Lo & Lawyers, for the Plaintiff
Mr Kelvin Wong, instructed by KWC & Associates, for the Defendant
[1] However, the Defendant insisted that the 2018 Agreement was signed as early as 2014 (not on 15th June 2018).
[2] I do not lose sight of Mr Cheung’s evidence. He said he genuinely believed that he was still the sole beneficial owner of the shareholding in the Plaintiff, and Madame Cheuk merely held the shareholding in the Plaintiff for him. However, Mr Cheung has not taken any steps to regain control over the Plaintiff, and he allowed Mr Wong to continue acting as the Company’s director. Mr Cheung also took no steps to deal with the matters relating to the Property throughout the years. The objective conduct on the part of Mr Cheung shows that he was an outsider in regard to the affairs of the Plaintiff as well as the Property. In the premises, I am of the view that for the purposes of the present action, the personal opinion of Mr Cheung is neither here nor there. There is no dispute that Mr Wong has been a director and shareholder of the Plaintiff, and his status as a director has not been challenged.