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Colonial Cases

Wong Chay-chee v. Artindale, 1883

[leases]

Wong Chay-chee v. Artindale

Supreme Court for China and Japan

Rennie CJ, 6 November 1883


Source: North China Herald, 7 November 1883



LAW REPORTS.
H.B.M.'s SUPREME COURT.
Shanghai, 6th November.
Before Sir Richard T. Rennie, Chief Justice.
WONG CHAY-CHEE v. R. H. ARTINDALE.
  This was a claim for relief from forfeiture of a lease through non-payment of ground rent.
  Mr. Myburgh appeared for the plaintiff, and Mr. R. E. Wainewright for the defendant.
The pleadings are as follows-
The Twentieth day of September, 1883. Between Wong Chay-Chee, plaintiff, and Robert Henry Artindale defendant.
To Sir Richard Temple Rennie, Knight, Chief Justice of the said Court.
  The petition of Wong Chay-Chee, the above named plaintiff, shows as follows:-
- The plaintiff is a Banker and Merchant, and resides at Shanghai, and the defendant is a Merchant, and resides at Shanghai.
- By an denture dated the third day of December, one thousand eight hundred and eighty-one, the defendant devised to the plaintiff for the term oF twenty years, from the first day of January, then next ensuing, at the yearly rent of six hundred and fifty pounds, to be paid in Shanghai Taels at a British Bank's sight, rate of exchange on London, of the day on which the payments are respectively due, and in advance, by two equal half-yearly payments on the first of January and the first of July in every year, the two lots of land situate in the Tientsin Road at Shanghai, and known in the books for the registration of land kept at the British Consulate at Shanghai aforesaid as Lots Numbers I, 177 and I, 890, the Title Deeds thereof being numbered respectively I, 170 and I, 173, together with the buildings thereon, and the rights, easements and appurtenances to the said premises belonging.
- The said indenture contains a clause of re-entry authorizing the defendant to re-enter on the demised premises in case the rent thereby reserved should be in arrear for twenty-one days.
- The plaintiffs took possession of the premises and duly paid the rent for the first half-year, but made default in payment of the half-year's rent which became due on the first day of July, one thousand eight hundred and eighty-three, and thereby incurred a forfeiture, and the defendant thereupon re-entered on the premises and is now on possession of the same.
-The plaintiff is desirous of being relieved against the said forfeiture, and brings into Court the sum of Taels 1,634.45 being the equivalent of 325 Pounds at the exchange rate of 4s. 11 3/4d., and interest thereon to date from the first day pf July, one thousand eight hundred and eighty-two, after the rate of ten per cent per annum, in satisfaction of half-year's rent due and interest thereon.
- The plaintiff is also ready and willing to pay the defendant's taxed costs in the suit and also all such expenses incurred by him on re-entering and taking possession of the premises as the Taxing Master shall allow.
The plaintiff therefore prays:-
- That he may be relieved against the said forfeiture, and that the defendant may be decreed to give over possession of the said premises to him.
- That he may have such further or other relief as the nature of the case may require.
The defendant to this petition is Robert Artindale, of Shanghai, Merchant.
- The defendant admits the truth of the allegations contained in the first four paragraphs of the petition.
- And further in answer to the petition the defendant says that on the 23rd of July last the plaintiff called upon the defendant and informed him that he was then unable to pay the half-year's rent that had become due on the first of the  said month of July, that he would endeavour to obtain the money, and that if he failed to do so on or before the 31st of the said month of July he was willing that his lease mentioned in the petition should be treated as cancelled; and the defendant hereupon agreed to this arrangement, and the terms of the same were on the same day reduced into writing and signed by the defendant and read over and explained to the plaintiff. And he again verbally signified his assent thereto.  The defendant's entry upon the premises referred to in the fourth paragraph of the petition was in accordance with and in pursuance of the said arrangement and agreement.
- And further in answer to the petition the defendant says that in the month of July 1882 the plaintiff applied to the defendant for a loan of 4,000 Shanghai Taels upon the security of his said lease and the houses built by him upon the land thereby demised; but the defendant, thinking the security insufficient, declined to make the desired advance.  The plaintiff thereupon or shortly afterwards obtained from an association at Shanghai calling itself the Shanghai Fire insurance Company a loan on the security of the lease and houses of 10,000 Shanghai Taels for the term of five years and at interest after the rate of 12 per cent per annum; and the said land and houses were thereupon mortgaged to Alexander Myburgh, of Shanghai, Barrister-at-law, as a trustee for the said association accordingly.  To the best of the defendant's acknowledge, information and belief the said mortgage is still subsisting.
- On the defendant taking possession of said premises in August last he found that the average gross monthly rental of the said premises for the fourth, fifth and sixth Chinese months of the current Chinese year had been 334 dollars Mexican only, and at this rate the annual net rental of the property would be about Tls. 2,500, while the ground rent payable to the defendant was about Tls. 2,610 per annum.
- The plaintiff is now, as the defendant is informed, and verily believes utterly insolvent, and is or lately was in gaol in the City of Shanghai on account of his debts.
-By reason of the facts mentioned in the last three preceding paragraphs of this answer, it would, the defendant contends, be unequitable to oblige him, the defendant, to give up the said land and premises to the plaintiff as his tenant.
  Mr. Myburgh said that as the defendant admitted all the allegations which were material to the case, he supposed his learned friend would begin and prove his statements.
  His Lordship said he understood that the plaintiff claimed relief.
  Mr. Myburgh said that was so.  He said his client had paid the ground-rent for six months, and then fallen in to default, whereby he incurred forfeiture of his lease.  The defendant took advantage of this and entered into possession; and the defendant claimed relief from the forfeiture.
 His Lordship said he understood that the defendant admitted these facts; but alleged that there was an agreement between the parties, by which the plaintiff was to give up the premises; and the defendant also alleged certain facts as to the plaintiff's circumstances.
  Mr. Wainewright said that was so. His defence was divided into two heads: first that the plaintiff had entered into a special agreement to give up the premises; and secondly that it would be inequitable to let the tenant back in to the premises, because he was hopelessly insolvent, and had mortgaged the premises to such an extent that there was no possibility of his paying the rent.
  Mr. Myburgh admitted that his client was in embarrassed circumstances, and also that he had mortgaged the premises.
  His Lordship - Do you admit the agreement?
  Mr. Myburgh - No, my Lord; I leave that for the defendant to prove.
  His Lordship - Then as that is the matter in dispute the defendant had better begin.
  Mr. Wainewright - But I do not know on what grounds he claims relief.
 Mr. Myburgh - As a matter of equity.
  Mr. Myburgh then proceeded to argue at length that his client having bought the land on lease, and having offered to do everything in respect to it which was right and equitable, was entitled to relief from forfeiture on the mere grounds of his being in arrears with his rent.  He quoted a number of cases in which a Court of Equity had granted relief in cases where a lease was forfeited through non-payment of rent.
  Mr. Wainewright, in reply to Mr. Myburgh's argument, said he relied on the equitable doctrine that he who sought equity should do equity.  The Court would not give relief where it saw that to give relief would be to do injustice.  The plaintiff was insolvent, and had admitted that he had not paid his rent.
     His Lordship - You admit that, assuming there were no special circumstances, the Court would grant relief?
    Mr. Wainewright - I admit that a clause of re-entry in a lease is construed as simply a protection to the landlord.  Supposing there were nothing else in it, I admit that the present plaintiff would be entitled to relief on certain terms, though not on the terms proposed by my learned friend; but my position is that the Court being appealed to as  a Court of Equity to relieve from forfeiture, is entitled to look at the whole position of the parties, and is justified in refusing relief if it sees that the equity claim will work an inequitable result to the defendant.- After quoting cases in support of this argument, Mr. Wainewright said he would contend, and bring evidence to prove, not only that his client had entered into possession by agreement between the plaintiff and defendant, but that the defendant's position and prospects, and the way in which her had dealt with the property, were such that to give the property back to him would be simply working injustice to the defendant; it would compel him to enter into possession every half-year.  The plaintiff was at the present time imprisoned in the City for debt.
 Mr. Myburgh - Here he is.
  Mr. Wainewright - Yes; I believe he is out for the day.  I am very glad to see he has got a holiday. (Laughter.) -Mr. Wainewright concluded by saying that the plaintiff was utterly incapable of fulfilling his contract, and therefore the property should not be given back to him.
The evidence, taken de bene esse, of Robert Henry Artindale, the defendant, who is at present absent from Shanghai, was then read over by Mr. Wainewright as follows:-
  Robert henry Artindale deposed - I am the owner of the premises mentioned in the petition, leased to the plaintiff.  Some time in the summer of 1882 the plaintiff applied to me for an advance upon the lease.  He wanted Tls. 4,000. He named no rate of interest.  I did not agree to make a loan because my compradore informed me that the houses were very badly let and the security was insufficient.  I had sent him to look.  I afterwards heard from the compradore that the Shanghai Fire Insurance Company Limited had lent to plaintiff Tls. 10,000.  Shortly afterwards I got this notice of mortgage "A" from Mr. Myburgh. It was after this I told him, (Mr. Myburgh) I had refused to lend Tls. 4,000.  I have never heard that the mortgage has been paid off.  I know it has not.  When the rent payable on the 1st July fell due, I sent to get it.  During the 21 days' grace I saw him (plaintiff) talking to my compradore in the compradore's office once or twice.  After the 21st, I told the compradore he must ascertain something definite, and whether there was any chance of getting the money.  Plaintiff and compradore came to me on the 23rd. Plaintiff told me that he had no money, that his bank had broken, and his wood hong had failed, and that he owed a large sum.  He asked if I would give him a few days more. I gave him till the end of the month.  He had previously stated that if he could not get the money in the two or three days he asked for I might take the houses and consider the lease cancelled.  I know at that time that the rents of the houses were less than the ground rent.  I wrote to him a letter of which "B" is a press copy, and I instructed my compradore to explain it to him. He told me next day that he had done so.  My compadore's name is Loong-king.  The letter expresses as nearly as I could put it what our arrangement was.  I wrote on the same day a letter to Mr. Myburgh of which "C" is a press copy.  I meant that I would take possession on the 1st August when I wrote "I am about to take possession." That evening Mr. Myburgh told me he had handed my letter to Lee Chu-ping, whom I believe to be his compradore, and who is advertised as manager of the Shanghai Fire Insurance Company Limited. I told him I should certainly foreclose if I did not get the rent.  He said it made no difference to him as he was only trustee.  I told the compradore on the 1st August to take possession and notified the tenants, and told the compradore to re-arrange it, and do his best to increase the rental.   I know what the rent had been three previous months, as one of the compradore's shroffs had been collecting the rents for the plaintiff.  The compradore about the 1st August handed me this paper "D"." The writing in black ink alone was his; the pencil was added by Mr. Ambrose, the red ink by myself.  I have been informed today that plaintiff is still in prison in the City.
Cross-examined by Mr. Myburgh - My firm are agents for the Royal Insurance Company.  I have never said that if a suit were brought against me in connection with the property I would defend it on behalf of the Royal Insurance Company. I have never stated that I wanted to expose the dealings of the China Fire Insurance Company.  I don't recollect saying that I wanted to show on what rotten security the China Fire insurance Company advance, so as to depreciate the value of their policies.  I have never stated that since the establishment of that Company the Royal has lost. I have certainly not made these statements to you in your office.
  The plaintiff offered me no other security beyond the houses.  I don't know whether the mortgagees for the Tls.  10,000 got any other security. I should be surprised to hear that the China Fire Insurance Company have nothing to do with the mortgage. I believe that the houses cost more than Tls. 4,000.  They were let at $500, I believe, the first month.  Rents were very high then.  Last month, August and September, they were $408; that is when they were managed by our firm.  I am sure it was Wong Chay-chee to whom I spoke on the 23rd.  I gave no instructions to the compradore to get the letter "B" signed by Wong. It did not occur to me to have that done.  I cannot say whether the property is more valuable now than it was when the lease was made.  The rents have increased since we have had the management in consequence of a re-modelling of the property. Now the rents are more than the ground rent.  I cannot tell whether the Royal Insurance Company has lost any business since the establishment of the China Fire insurance Company.  I don't know of any properties formerly insured with the Royal being now insured with the China Fire Insurance Company.  I have nothing to do with the Insurance department.
Re-examined - The gross rents exceed the ground rent by about $60 a month.  To get at the net rental we should deduct 20- per cent.  Mr. Lester informed me that he had been sent by the China Fire Insurance Company to ask me to give the property back to the nominal lessee. This was after I had taken possession. He told me they wanted to get back their property as they could not appear before their directors with such a bad debt as Tls. 10,000 unaccounted for.
  Mr. Wainewright then offered to read a letter from Mr. Artindale with respect to that part of his evidence, given under cross-examination, in which he denied having made certain statements with respect to the Shanghai Fire Insurance Company Limited.
  Mr. Myburgh declined to hear the letter read.
  Mr. Wainewright said the evidence which Mr. Artindale had given was literally correct; and he simply offered to read this explanation for his learned friend's satisfaction.
  Mr. Myburgh said he did not wish to hear it.
     Mr. J. Ambrose was then called and examined by Mr. Wainewright.  He said he was employed by Messrs. Iveson & Co. to look after the property under the management of the firm.  He remembered the lease being entered into with Wong Chay-chee.  Personally he first had to do with the property on the 1st of the 7th Chinese moon of this year; since which time the rents had been collected and the property had been managed by Iveson & Co. The rents for the 7th moon amounted to $480.80, and for the eighth moon, $409.25.  Since Mr. Artindale took possession of the property, $61.10 had been laid out in alterations and repairs, the alterations comprising the conversion of each of some of the larger houses into two.  In addition to this there had been a regular expense of $7 a month for a watchman.
  Cross-examined by Mr. Myburgh, the Witness said he had since heard that before Mr. Artindale took possession of the premises Iveson & Co.'s compradore collected the rents for Wang Chay-chee. He had also heard that Wang Chay-chee had spent from twelve to fourteen hundred taels in rebuilding the premises; but this included the value of the old materials which were on the ground at the time he took over.
     Loong King, Rent-Compradore to Messrs. Iveson *& C, was then called and examined by Mr. Wainewright, partly in  pidgin English, and partly through Mr. Wainewright's Chinese clerk, acting as interpreter. He said he collected rent for Wong Chay-chee from the sixth moon of last year to the sixth moon of this year.  Since then he had collected the rents for Messrs. Iveson & Co.  About the 15th of the 6th moon of this year he handed to the plaintiff a letter from Messrs. Iveson and Co., and at the same time, by Mr. Artindale's instructions, he told Wong Chay-chee that he would be allowed till the 31st July to pay his ground rent, and if he did not pay it that Mr. Artindale would take over the houses.  He went to Mr. Artrindale's office with the plaintiff once in reference to the payment of the rent for this property; but they failed to come to an agreement.  The plaintiff went several times to see Mr. Artindale up to the 25th July, and then he did not go any more.  He also sent a friend to see Mr. Artindale.
  Mr. Wainewright asked if the plaintiff ever told the witness that he would agree to give up the houses.
     The witness said no; the plaintiff said if he could not pay the ground rent he would allow Messrs. Iverson and Co. to collect the rents, and they would go towards paying the ground rent.  He did not ask the plaintiff to sign a paper which Mr. Wainnewright produced.
     Mr. Myburgh, in cross-examining the witness, reminded him that he had said Mr. Artindale was to collect the rents, and they were to go towards paying the ground rent.  He asked how the deficiency was to be met.
  The Witness said he did not know.
  Mr. Myburgh - Did the defendant hand the plaintiff something in Chinese and ask him to sign it?
  The Witness said he did not remember it.
  Mr. Myburgh - How much did the houses cost the plaintiff?
  Witness - About Tls. 11,000.
     Lee Chu Ping, Compradore to Messrs. Myburgh & Dowdall, was then called and examined by Mr. Wainewright.
 Mr. Wainewright - You know the plaintifxx
  Witness - Yes.
  Has the plaintiff got any money? - He has property.
     What property? - He has a private house in Pooting, and two hongs for selling tiles and bricks.
 Has he any other property? - No.
  And he has a good many debts, has he not? - I do not know that.
  Don't you know he has been in prison for debt? - I do not know; he is here.
   Yes, he is out for the day; but don't you know he has been in prison? - I know he has had a case with a Chinese bank, and he has been staying at the Taotai's yamen for two or three weeks to settle his accounts.
  He is your friend? - Yes
  You think he could pay everything he owes? - I not know.
  You know his bank has broken? - Yes.
  And his wood hong? - He had no wood hong.  His brick and tile shops are doing business now.
  And you think he could pay this rent, supposing he goes back? - Yes.
  You have lent him, Tls. 10,000? - Yes.
  How much interest? - 12 per cent.
  What security have you got? - A mortgage on the lease of this property and one on his private house; and I have got s secure man too.
  Mr. Wainewright asked to see the mortgage deed on the private house, and it proved to be of quite recent date.  He remarked that the witness had evidently just got fresh security for his loan.  He asked - when you lent that money, you only got Mr. Artindale's lease?
  Witness - And the secure-man.
  Who is the secure man? - Wong Sung-kee.
  When did he go security? - When I lent the money.
  Was it your own money or the Insurance Company's money? - My own money. Then Insurance Company was not started then.
   But you insured some houses before the company began, didn't you? -No.
 Your Company is formed under the Limited Liability Act, is it not - registered in England?
  The Witness, who did not appear to understand the question, said the company was formed of English and Chinese.
  Mr. Wainewright - What does "Limited" mean?
  The Witness, who again appeared to misunderstand the question, said the capital was limited to Tls. 500,000.
  His Lordship - What does it matter?
  Mr. Wainewright  said it did not matter; but he was always interested to know what the word "Limited" at the end of the title of the Shanghai Insurance Company meant, and he thought this was a favourable opportunity to get at it.  He asked - This money was yours?
  Witness - Yes.
  And you think he can pay you? - Yes.
  How much interest has he paid you up to the present? - Tls. 600.
  You think you will get your interest every year? - Yes.
  How can he pay you? - Out of the rents.
  How much is your interest? - Tls. 1,200 a year.
  Mr. Wainewright then pointed out that the ground rent amounted to Tls. 2,600, while the rents only came to Tls. 3,700; so that out of Tls. 3,700, the plaintiff would have to pay Tls. 3,800.  He asked the witness how he expected to be paid.
     The Witness said if the plaintiff did not pay him, the security man would have to.
    Mr. Myburgh) cross-examining the witness) - Mr. Artindale any time talkee you he wantee spoil your insurance pidgin?
  The Witness was proceeding to state something which he had heard from some body else as to what Mr. Artindale had said, when Mr. Wainewright interposed, objecting that this was not evidence.
  Mr. Myburgh argued that it was admissible for the witness to continue his statement; but his Lordship ruled that the statement was not evidence, and therefore could not be heard.
  Mr. Myburgh then said he had no questions to pit to the witness.
  Mr. Wainerwright said these were all the witnesses he had to call.
 Mr. Myburgh then submitted it to his Lordship's consideration whether the defendant had made out sufficient defence, according to the evidence, to allow of his Lordship's departing from the rule in Equity which would give relief to the plaintiff from the forfeiture.  He defied his learned friend to produce a single case where the court had refused to grant relief when the amount of the rent due had been paid into Court.
  His Lordship said he was prepared to hear what Mr. Myburgh had to say on the point.  While the evidence did not appear to him very strong, at present it was contradicted; and he preferred to hear more before deciding.  He asked if Mr. Myburgh had any witnesses to call.
  Mr. Myburgh said he had.  He called:
  Henry Lester, architect.
  Mr. Myburgh said he called this witness to disprove part of the evidence of Mr. Artindale. He a sked - Do you remember going to Mr. Artindale with regard to Wong Chay-chee's lease?
  Witness - Yes.
  Did you ever state to him that you had been sent by the China Fire Insurance Company to ask him to give back the property to the nominal leesee? -No; I said I came from Lee Chu-ping. I was under the impression that it was the company who lent the money.
  I ask you whether you said you had been asked by the China Fire Insurance Company? - No.
  Did you tell him they wanted to get back their property, as they could not appear before their directors with such a debt as Tls. 10,000 unaccounted for? - No.
  Mr. Wainewright said he had no questions to ask the witness.
  The hearing was then adjourned till Tuesday, the 13th November, at 10.30 a.m., Mr. Wainewright stating that his client would have returned to Shanghai by that time, and it was possible that they might see their way to relieve his Lordship of further trouble in the matter.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School