KENWELL LTD v. SAFETY GONDOLA LTD

HCA 1494/2024

[2025] HKCFI 5894

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1494 OF 2024

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J U D G M E N T

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The application

1.  This is the hearing of the Defendant’s appeal from the order of summary judgment granted by Master Michael Lok (“the Master”) on 28 July 2025 in favour of the Plaintiff for:-

(a)  possession of that part of Lot 764RP in DD99 as identified in a Lot Index Plan annexed to the Statement of Claim as the Schedule and shed [sic] pink (“the Subject Lot”); and

(b)  damages to be assessed.

2.  The evidence filed on the summary judgment application prior to the hearing before the Master is:

(a)  on behalf of the Plaintiff:

i.  the Affirmation of Ng Ting Biu dated 8 October 2024 (“Ng 1”) ;

ii.  the Joint Affirmation of Man Ping Nam & Man Tai Sang dated 28 September 2024 (“Man & Man”);

(b)  on behalf of the Defendant: the Affirmation of Yuen Chi Kwong dated 28 October 2024 (“Yuen 1”);

(c)  on behalf of the Plaintiff in reply: the 2^nd Affirmation of Ng Ting Biu dated 8 November 2024 (“Ng 2”).

3.  The Defendant has filed a 2^nd affirmation dated 11 September 2025 without leave. At the start of the hearing, Mr Chan for the Defendant submitted that he would not make an application to adduce this evidence, so that affirmation is excluded.

4.  I have the advantage of a transcript of the reasons of the Master.

Summary judgment: legal principles

5.  The essential principles in respect of summary judgment pursuant to Order 14 of the Rules of the High Court, Cap 4A (“RHC”) are not disputed.

6.  An appeal from a Master under RHC O. 58 is a rehearing and to be approached de novo: Hong Kong Civil Procedure 2025 at §58/1/2.

7.  Once the plaintiff is able to show a prima facie case, the defendant bears the burden of showing that there are triable issues: see Ju Yan Di Emperory Genesisy v. Yau Wai Han [2015] 1 HKLRD 822 (at §14).

8.  The defendant’s affidavit must condescend upon particulars and should, as far as possible, deal specifically with the plaintiff’s claim and affidavit, and state clearly and concisely what the defence is, and what facts are relied on to support it: Hong Kong Civil Procedure 2025 at §14/4/4.

9.  The mere assertion in an affidavit of a given situation which is to be the basis of a defence does not, ipso facto, provide leave to defend; the court must look at the whole situation and ask itself whether the defendant has satisfied the court that there is a fair or reasonable probability of the defendant’s having a real or bona fide defence: Banque de Paris et des Pays-Bas (Suisse) SA v. Costa de Naray [1984] 1 Lloyd Rep. 21 at §28.

10.  Although a court cannot resolve issues of fact on affidavits, there are some cases in which the defendant’s own case is so incredible or so contradicted by contemporary documents or circumstances that it becomes clear that his defence is a sham: Manciple Ltd. v. Chan On Man [1995] 3 HKC 459, at §466G.

Undisputed Factual Background

11.  It is undisputed, or indisputable, that:

(a)  Man Shui Tong Wui (文水塘會) (the “Wui”), which is a business t’ong registered under s.15 of New Territories Ordinance (Cap. 97), is the registered owner of the Subject Lot;

(b)  The Wui granted a 10-year tenancy of the Subject Lot in 1986 to 4 individuals including the father of Man Whi Chung (“MWC”) (“the 1986 Tenancy”);

(c)  After 1986, various people including MWC and/or his associates occupied the Subject Lot without any formal tenancy from the Wui;

(d)  By a deed of agreement in Chinese dated 23 June 2023, the Wui granted a lease to the Plaintiff in respect of several lots of land which included the Subject Lot, for a term of 3 years and 2 months, commencing on 23 June 2023 (the “2023 Tenancy Agreement”), and this lease was registered on 7 July 2023;

(e)  At that time, the Defendant physically occupied the Subject Lot (or part of it), in reliance upon a sub-tenancy agreement dated 13 March 2023 between Fortune Nine (HK) Company Ltd (九記行有限公司, (“Fortune Nine”) and the Defendant for 3 years, from 1 April 2023 to 31 March 2026 (the “2023 Sub-Tenancy Agreement”). This agreement was not made by deed and is not registered. MWC is the director and shareholder of Fortune Nine.

(f)  On 30 June 2023, the Plaintiff issued a notice to “all persons occupying the lands of [the Wui]” including the Defendant, stating that their occupation was unauthorised and requiring them to vacate within 14 days (“Notice to Vacate”).

(g)  In the third quarter of 2023, proceedings DCCJ 3616/2023 were commenced by the Plaintiff against a third-party firm occupying part of the land lots leased by the Wui to the Plaintiff under the 2023 Tenancy Agreement (but a different piece of land from the Subject Plot) (“the DCCJ Action”). The third party also claimed to be a sub-tenant of MWC/Fortune Nine. MWC gave evidence on behalf of the alleged sub-tenant to oppose the summary judgment application in the DCCJ Action, asserting that MWC and/or Fortune Nine were lawful head-tenants by virtue of rights consequential to the 1986 Tenancy. Summary judgment was entered in favour of the Plaintiff on 4 March 2024.

(h)  On 15 March 2024, proceedings HCA 1207/2023 were commenced by MWC and Fortune Nine against the managers of the Wui and the Plaintiff, claiming that the 2023 Tenancy Agreement was void and that MCW/Fortune Nine had the right to renew the 1986 Tenancy (“the HCA Action”). Further and better particulars of the claim were requested and answered (no further progress in the HCA Action is in evidence).

The pleaded claim

12.  The Plaintiff claims entitlement to possession of the Subject Lot as against the Defendant on the basis of the 2023 Tenancy Agreement between the Wui and the Plaintiff. The Plaintiff refers to the Defendant’s occupation of the Subject Lot in reliance on the 2023 Sub-Tenancy Agreement between Fortune Nine and the Defendant. The Plaintiff alleges that the Wui has not granted any tenancy to Fortune Nine, so that there can be no lawful sub-tenancy granted by Fortune Nine.

13.  The Plaintiff’s evidence includes Man & Man which deposes to the fact that it granted the 2023 Tenancy Agreement to the Plaintiff, and that the Wui has never granted any tenancy to Fortune Nine.

The pleaded defence

14.  It is important to see exactly how the Defendant has pleaded its case.

15.  §3a pleads that, by virtue of the wording of the 2023 Tenancy Agreement, the Plaintiff admits that there are tenants holding over from previous tenancies who were still paying rent at the time the 2023 Tenancy Agreement was made.

16.  §3b of the Defence contains the averral by the Defendant:

“By a letter of Messrs. Peter Mo & Co. (acting [for MWC and Fortune Nine]) to the Managers dated 15th July 2023, the Defendant is given to understand that :

i. the said [MWC] is a member of the Wui;

ii. Fortune Nine is the principal tenant of the said land (including Lot764RP);

iii. there is estoppel by convention that the Wui and/or Managers are estopped from denying a tenancy relationship with the said [MWC] and/or Fortune Nine;

iv. the said [MWC] and/or Fortune Nine have a right to renew the tenancy dating back 1986 and they are still holding over the said land (including Lot764RP) after expiry of the said 1986 tenancy and renting the said land by a periodic tenancy which has not been terminated by the Wui and/or Managers; and

v. there was no record that the landlord/members of the Wui had held any valid meeting discussing the 2023 Tenancy with the Plaintiff thus the 2023 Tenancy shall be null and void.”

17.  The Defendant does not plead as a matter of fact that Fortune Nine is a tenant of the Wui. Rather, they plead that that is their understanding on the basis of the contents of a letter from the solicitors of MWC and Fortune Nine to the Wui dated 15 July 2023 (“the Peter Mo letter”). Insofar as relevant to the status of Fortune Nine, the Defendant pleads their understanding that:

(a)  The Wui are estopped from denying a tenancy relationship with MWC and/or Fortune Nine;

(b)  MWC and/or Fortune Nine have a right to renew [the 1986 Tenancy]; and

(c)  MWC and/or Fortune Nine are still holding over the [Subject Lot] after expiry of the [1986 Tenancy]; and

(d)  MWC and/or Fortune Nine are renting the [Subject Lot] by a periodic tenancy which has not been terminated by the Wui.

18.  §3c pleads:

“Fortune Nine rented to the Defendant Lot764RP (as more particularly colored in the plan attached to a Chinese agreement signed on 13th March 2023 which tenancy commences on 11 April 2023 to last for three years) before the agreement in relation to 2023 Tenancy dated 23rd June 2023. The area rented to the Defendant is referred to as ‘Def_Lot764RP’.”

19.  Accordingly, the Defendant alleges that Fortune Nine granted the 3-year 2023 Sub-Tenancy Agreement to the Defendant before the 2023 Tenancy Agreement was made.

20.  At §7, the Defendant pleads that the Subject Lot appears to be different from the land subject of the 2023 Sub-Tenancy Agreement “Def_Lot764RP" (“the Boundary Issue”). No particulars nor consequences are pleaded.

21.  At §10, the Defendant admits that the Defendant has been using “Def_Lot764RP" since 1 April 2023 and has refused to vacate it upon the Plaintiff’s request.

The Pleaded Reply

22.  The Plaintiff pleads that in the DCCJ Action, MWC and Fortune Nine had claimed a right to renew the 1986 Tenancy, and in those proceedings, the judge had determined (1) as a matter of fact, MWC and Fortune Nine had admitted by their solicitors’ letter dated 19 June 1996 that the 1986 Tenancy had not been renewed; and (2) in any event, a renewal of the 1986 Tenancy would have expired by March 2006 at the latest.

The O.14 evidence

23.  Yuen 1 relies upon the following matters in order to defend the O.14:

(a)  The 2023 Sub-Tenancy to the Defendant was granted before the 2023 Tenancy to the Plaintiff;

(b)  The Boundary Issue;

(c)  The wording of the 2023 Tenancy Agreement acknowledges that there were tenants of the Subject Lot holding over from previous tenants prior to the 2023 Tenancy Agreement;

(d)  The understanding as to MWC/Fortune Nine’s rights derived from the Peter Mo Letter (as pleaded);

(e)  The lack of proper authorisation for the 2023 Tenancy Agreement; and

(f)  The Plaintiff’s lack of authority to bring this action against the Defendant.

24.  The Defendant has only filed evidence from Mr Yuen, a director of the Defendant. No supporting evidence is provided by Fortune Nine or MWC.

25.  Ng 2 was filed in reply in support of the Plaintiff’s case:

(a)  This affirms that the only tenancy registered in respect of the Subject Lot is the 2023 Tenancy Agreement;

(b)  This states that in respect of the claim in the Peter Mo letter that MWC/Fortune Nine were entitled to renew the 1986 Tenancy:

i.  the same claim was made in the DCCJ Action supported by evidence from MWC, but that was rejected by the judge in the light of inconsistent contemporary documents and the fact that a renewal of the 1986 Tenancy would have expired in 2006 in any event;

ii.  the same claim was being made by MWC/Fortune Nine in the HCA Action, in the course of which MWC/Fortune Nine had pleaded by way of further and better particulars that they only claimed renewal of the 1986 Tenancy for 10 years i.e. until 2006.

(c)  In respect of the claim in the Peter Mo letter that the Wui were estopped from denying the tenancy relationship and the right of MWC/Fortune Nine to renew the 1986 Tenancy, Ng 2 points out that again would not extend rights after 2006 in any event.

(d)  Ng 2 points out that in respect of the claim in the Peter Mo letter of holding over after the expiry of the 1986 Tenancy, that was framed as being by way of a half-yearly periodical tenancy giving rise to a requirement of 6 months’ notice to quit. If accepted, in any event, no complaint could be made about the issue of the Writ on 29 July 2024 after giving notice to quit on 30 June 2023.

The Issues raised on appeal

26.  The Defendant has narrowed and altered its case on appeal as follows:

(a)  The Defendant claims its right to possession derives from Fortune Nine. The dispute between the rival head-tenants, Fortune Nine and the Plaintiff, is the subject of the HCA Action so that this Court should not determine the issue herein and run the risk of inconsistent verdicts (“the Rival Head Tenants Issue”).

(b)  It is not appropriate to order the Defendant to surrender possession to the Plaintiff, when (i) the Defendant no longer has possession over the Subject Lot, and (ii) the Defendant’s obligation under the 2023 Sub-Tenancy Agreement is to surrender possession to Fortune Nine (“the Possession Issue”).

(c)  The Boundary Issue, which the Defendant claims may necessitate the Plaintiff to adduce evidence to establish the boundaries of the land occupied by the Defendant.

27.  It is immediately apparent that:

(a)  The Rival Head Tenants Issue is not the defence pleaded or set out in affidavit evidence. It relies on the existence of the HCA Action which was raised in the Plaintiff’s reply evidence.

(b)  The Possession Issue was neither pleaded nor raised in evidence.

(c)  The Boundary Issue was pleaded but not particularized.

(d)  Other pleaded issues such as the validity of the 2023 Tenancy and the Plaintiff’s authority were not pursued.

The Rival Head Tenants Issue

28.  This Court is required to consider whether the Defendant has raised a triable issue. The fact that an identified issue has been raised in another action does not make the issue triable. If I was satisfied that the Defendant had raised a triable defence, such that O. 14 should not be granted, then there may well be case management questions to follow as to whether there should be a consolidation or stay of any cases raising the same issues. However, the Defendant still has to demonstrate a bona fide defence. To test it the other way, if I were to find that the Defendant did have an arguable defence so that the matter should proceed to trial, that would simply be a finding on the O.14 evidence before me and that should not prejudice a decision on different facts between different parties in another court (although one would hope for sensible case management at an appropriate time).

29.  At one point, Mr Chan for the Defendant lightly submitted that the Defendant did not have access to all the relevant facts or documentation. There is not one iota of evidence as to attempts made to obtain facts, documentation or evidence from anyone else. The burden is on the Defendant to establish an arguable defence in order to resist summary judgment.

30.  Given Mr Chan’s argument that the Rival Head Tenants Issue should be decided in the HCA Action, and not by this Court, then it is clear that this is not a situation falling within the limb of “some other reason for trial” in this case.

31.  I did not understand Mr Chan for the Defendant to seriously argue that he had adduced sufficient evidence to demonstrate a bona fide defence that Fortune Nine had better title than the Plaintiff, and/or that the 2023 Sub-Tenancy Agreement was valid as against the Plaintiff’s 2023 Tenancy Agreement.

32.  In any event, the evidence before me on this issue may be summarized as follows:

(a)  The Plaintiff has adduced the Man & Man evidence from the legal owner (i.e. the Wui) to the effect that, since 1986, they have only granted a tenancy to the Plaintiff, and to no one else.

(b)  The Defendant has adduced no direct contrary evidence, in particular from Fortune Nine.

(c)  The Defendant has referred to pre-HCA Action solicitor correspondence (i.e. the Peter Mo Letter) and further and better particulars in the HCA Action (without the context of the full pleadings). The contents of those documents have not been verified by the relevant solicitors or clients. This is wholly inadequate to rebut the direct evidence from Man & Man.

(d)  That in itself is sufficient for me to find that the Defendant has not demonstrated a bona fide defence to the Plaintiff’s claim of a right to possession as against the Defendant.

(e)  In any event, the pre-HCA Action correspondence makes claims which have been found in the DCCJ Action to be inconsistent with contemporary documents, or which claims (whether of renewal of the 1986 Tenancy or 6-month periodic tenancy) would not give rise to a valid tenancy subsisting as at 2023 when the 2023 Tenancy Agreement was granted.

33.  I do not consider it necessary to decide whether the judgment in the DCCJ Action gave rise to an issue estoppel to the effect that it has already been determined that Fortune Nine has no tenancy which would take priority over the Plaintiff’s 2023 Tenancy Agreement. However, I can take at least as much regard of the description of the contemporaneous documents considered in the DCCJ Action judgment as I can of the assertions in the Peter Mo Letter and the HCA Action further and better particulars, where none of these documents are adduced as being true in the action before me.

34.  I need only decide whether the Defendant has raised a bona fide arguable defence to the Plaintiff’s claim against the Defendant for possession of the Subject Lot. Certainly, the Defendant has not established on evidence an arguable case of having a valid tenancy agreement as against the Plaintiff, in the light of the uncontested direct evidence that only the Plaintiff has been granted a tenancy. The fact that Fortune Nine has brought the HCA Action asserting a tenancy as against the Plaintiff does not take the matter further.

The Possession Issue

35.  This issue was raised for the first time before the Master below. As to the first limb, that the Defendant is no longer in possession of the Subject Lot:

(a)  there is no supporting evidence;

(b)  the Defence itself admits that the Defendant was in occupation and refused to vacate the Subject Lot at the Plaintiff’s request.

36.  As to the second limb, the Defendant’s submission was that the Defendant should only be surrendering possession to its landlord, Fortune Nine, and to surrender possession to the Plaintiff would prevent that and give rise to problems if Fortune Nine is held in the HCA Action to be the true head-tenant. This submission must fail on the basis that the Defendant has not established an arguable case of the validity of the 2023 Sub-Tenancy Agreement.

The Boundary Issue

37.  The Defendant’s complaint is that in comparing the plans attached to the 2023 Tenancy Agreement and the 2023 Sub-Tenancy Agreement, it is not clear that they are identifying the same land. As accepted by Mr Chan, the plan attached to the 2023 Tenancy Agreement is an official plan whereas the plan attached to the 2023 Sub-Tenancy Agreement is a sketch plan.

38.  If the Defendant considered that it was in occupation of a different piece of land than that claimed by the Plaintiff, that would have been a matter to plead and prove clearly.

39.  The Defendant has done no more than raise a query as to whether an official plan differs from a sketch plan. That is clearly insufficient to raise an arguable defence to the Plaintiff’s claim for the possession of the Subject Lot.

Order

40.  Accordingly, I dismiss the appeal. As submitted by counsel, should this be the outcome, costs follow the event. The Defendant is to pay the Plaintiff’s costs of the appeal, to be taxed if not agreed.