Yu Hing Tong Ltd v Fung Hing Chiu Cyril

HCA 1360/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1360 OF 2016

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DECISION

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Introduction

1. This case involves a claim for vacant possession of, and for unpaid rent and mesne profits said to be owed by the defendant as tenant of, Rooms 502 and 1102 in the Shiu Fung Hong Building (“the Premises”). The Premises are owned by Dawns Light International Limited (“Dawns Light”) and Connaught Real Estate Ltd (“Connaught”) as tenants in common. Dawns Light and Connaught are, therefore, landlords of the Premises under the material tenancy agreements.

2. The claim was commenced by Writ dated 23 May 2016. In its original form, the Writ identified the plaintiff as “YU HING TONG LIMITED (as the true and lawful attorney for and on behalf of Connaught Real Estate Limited and Dawns Light International Limited)”. The Statement of Claim was specially endorsed on the Writ.

3. By summons dated 3 August 2016, the defendant has applied to strike out the Statement of Claim and for the action to be dismissed, on the ground that the plaintiff lacks the authority to sue in its own name ("the Striking Out Application").

4. By Order of Master Hui made on 2 September 2016, the Striking Out Application was adjourned for argument before a Judge in Chambers. It came before me for that argument.

5. In the same Order, the Master gave the plaintiff leave as sought by its summons dated 15 August 2016 (“the Amendment Summons”) to amend the Writ endorsed with the Statement of Claim, essentially to remove from the description of the plaintiff the reference to Connaught (with consequential amendments to the body of the claim). Hence the description of the plaintiff on the Writ is now “YU HING TONG LIMITED (as the true and lawful attorney for and on behalf of Dawns Light International Limited)”. The costs of the Amendment Summons were reserved to the Judge hearing the Striking Out Application.

6. The same Order also dealt with two other applications. One was the application made by summons dated 16 August 2016, by which the plaintiff sought judgment in default of the filing of a Defence (“the Default Judgement Summons”). The Master made no order on that summons, save that the costs of it were reserved to the Judge hearing the Striking Out Application.

7. The other application was an application for extension of time within which the defendant might file a Defence (“the Time Extension Summons”). The Master gave leave to the defendant to file and serve his Defence (if necessary) within 14 days after the final disposal of the Striking Out Application.

8. At the hearing, therefore, I was concerned to deal with:

(a) the Striking Out Application, and any costs consequences;

(b) the costs of the Amendment Summons; and

(c) the costs of the Default Judgement Summons.

9. The defendant was represented at the hearing by Mr Michael Lok, and the plaintiff by Mr Jonathan Chang together with Mr Martin Ho, all of Counsel.

Background

10. For current purposes, I am not concerned with an evaluation of the merits of the substance of the claim. However, it is necessary to set out some factual background.

11. The building (“the Property”) in which the Premises are located was originally owned by two brothers, as equal tenants in common. Each of them subsequently assigned their respective half share in the Property(and hence in the Premises) to Connaught and Dawns Light respectively.

12. By two Powers of Attorney (“POAs”) made in 1997, and which are in substantially identical terms, Dawns Light and Connaught each appointed Yu Hing Tong Limited (“YHT”) as their attorney in relation to the Property. The terms of the POAs included that YHT was appointed to be “our true and lawful attorney for us and in our name to do the following acts and things or any of them in relation to our share and interest of and in the Property”, such as:

(a) “to instruct … Solicitors as the Attorney shall select to act for us in and to advise on all matters relating to the property … and to … prosecute for us … any decree order judgment … in any proceedings relating to the Property”;

(b) “to demand sue for and receive all rents and arrears of rent due or which at any time shall become due to us by any tenant or tenants or occupier or occupiers in respect of the Property or any part thereof”;

(c) “to commence prosecute defend or compromise and determine upon such terms as the Attorney shall deem desirable any action suit or other proceedings touching and concerning the Property or any part thereof”.

13. By virtue of various tenancy agreements and renewals, the defendant became tenant of the Premises. It seems that each of the agreements was made through YHT as attorney, but that the landlords were identified and defined as Connaught and Dawns Light. In other words, YHT is not a party to the relevant tenancy agreements.

14. The claim now made arises out of the alleged default in payment of rent in relation to the defendant's occupation of the Premises.

15. After the commencement of the claim, on 27 July 2016 Connaught (which is apparently now controlled by the defendant) revoked its POA under which YHT had been its lawful attorney. It is that fact which led to the Amendment Summons, under which the amendment itself was not controversial save as to the appropriate costs consequences.

16. It is also to be noted that there has been considerable correspondence between solicitors for the parties as to whether or not the claim as formulated has been properly constituted, as well as to the reason why the Amendment Summons became necessary, and as to the issue of the Default Judgement Summons. I do not think for present purposes it is necessary to detail that correspondence, except to point out that it identifies the battle lines drawn by the parties reflected in the arguments dealt with below.

The Striking Out Application

17. The principles applicable on an application to strike out a pleading are well known and are not in dispute. They are summarised in, for example, the Hong Kong Civil Procedure 2017 at §18/19/4. In short, the court should exercise its summary powers to strike out any pleading only in plain and obvious cases. There should be no trial on affidavit and any disputed facts are to be taken in favour of the party whose pleading is sought to be struck out. Difficult points of law should not be decided in striking out applications. For a claim to be struck out, it must be obviously unsustainable; and it must be impossible not just improbable for the claim to succeed before the court will strike it out.

18. Mr Lok also drew my attention to Kammy Town Limited v Super Glory Corporation Limited (unreported, HCA 3524/2003, 14 January 2005), in which A Cheung J (as he then was) accepted that where there is a question of authority on the part of someone to bring proceedings in the name of the plaintiff, it is not open to the defendant to raise that question by way of defence to the action. Rather, the proper course is to move at an early stage of the action to have the name of the plaintiff struck out, and so bring the proceedings to an end.

19. Therefore, it seems to me that the usual principle, that allegations in pleadings will only be struck out in plain and clear cases, is not strictly applicable in a case such as the present, where the basis of the application is that the named plaintiff had no authority to sue and/or had no cause of action itself. On the basis that it is settled law that an issue as to lack of authority cannot be raised by way of defence, a strike‑out application made on that basis seems to me to fall to be decided simply on the court’s decision as to whether the plaintiff had authority or not, or had an arguable cause of action itself or not.

20. Mr Lok identifies that it is well established that a donee of a power of attorney cannot sue in his own name, and must sue in the name of the donor. He referred me to Hong Kong Civil Procedure 2017 at §6/1/9, and to the cases of Jones and Saldanha v Gurney [1913] WN 72 and Davis v Anthony (unreported, 5 July 1995, English Court of Appeal).

21. In the first case, Mr Jones was the principal who had granted a power of attorney to his lawyer, Mr Saldanha. Both were made plaintiffs to the action, but the court held that there was no ground for making the latter a party, as proceedings taken by an attorney ought to be taken in the name of his principal. The statement of claim showed no cause of action at all in Mr Saldanha, and it appeared that his name had been added with the obvious purpose of seeking to escape security for costs.

22. In the other case, Mr Davis was originally the sole plaintiff making a claim for himself personally. Subsequently, he sought and was granted leave to amend the claim to join, subject to its consent, “Javelin Charters Ltd, suing by its attorney, Paul Michael Davis”. Later, when ordering that company to provide security for costs, the judge struck out the words “… suing by its attorney, Paul Michael Davis” on the expression of his view that Javelin Charters should either be a plaintiff in the action in its own right, and with the...