PERVEZ AKHTER v. JACKY CHAU KING YIN AND ANOTHER

LDPE 1575/2025

[2026] HKLdT 21

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPE 1575 OF 2025

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BETWEEN

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DECISION

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A. The Judgment

1.  By my judgment dated 22 January 2026 (“the Judgment”), this Tribunal ordered the Respondents to:

(1) pay balance of arrears of rent in the sum of $105,000 for the period from 1 September 2025 to 30 November 2025 to the Applicant;

(2) pay balance of arrears of rent/ mesne profits at the rate of $35,000 per month for the period from 1 January 2026 to 5 January 2026 to the Applicant;

(3) pay the Applicant costs of this Application summarily assessed at $1,365.

B. The Leave Application

2.  By Interlocutory Application in Form 1 filed on 5 February 2026, the Respondents applied for (i) leave to appeal against the Judgment (“Leave Application”) and (ii) stay of execution of the said Judgment.

3.  At the oral hearing of the Leave Application, the Applicant attended in person, while the 1^st Respondent, being also the representative the 2^nd Respondent, attended in person.

C. Procedural History

4.  By Form 22[1] filed on 21 November 2025 (“the Application”), the Applicant applied for recovery of vacant possession of Apartment No.1, 2/Fl. Kiu Kin Mansion, No.568 Nathan Road, Yaumatei, Kowloon, Hong Kong (“the Premises”), payment of arrears of rent and mesne profits, and costs on the ground that the Respondents had failed to pay rent since 1 September 2025.

5.  By Form 7[2] filed on 10 December 2025[3], the Respondents opposed the Application on the following grounds written in Chinese (translated into English by this Tribunal): -

(1) The Applicant had failed to comply with the Building Order for the replacement/ maintenance of glass (C/TF/00738/12/K) since 2013. Since 21 November 2021, the Respondents had repeatedly requested the Applicant, both verbally and in writing, to complete the relevant works, but the Applicant had consistently refused the same, or the works had been unreasonably delayed. Due to such failure to comply with the Building Order, the Respondents’ application for licence renewal was unsuccessful. This constitutes a “fundamental breach of tenancy”.

(2) There was a breach of the express or implied maintenance obligations by the Applicant, thereby affecting the Respondents’ quiet enjoyment. This had caused substantial economic loss to the Respondents, including but not limited to business loss, additional rental expenses etc., with the estimated total amount exceeding $140,000.

(3) The unsuccessful renewal, caused by the aforementioned breach by the Applicant, was made known to the public or the clients of the Respondents. This had resulted in a “reputational damage and loss of goodwill” and further led to indirect economic loss, such as loss of customers and a decrease in business turnover, estimated at $1,000,000.

6.  The Respondents therefore asked for

(1) Dismissal of the Application for repossession of the Premises;

(2) A declaration on a termination of the Tenancy Agreement due to the Applicant’s fundamental breach;

(3) An order for the Applicant to pay damages to the Respondents in a sum of $1,140,000 and return the deposit of $105,000 to the Respondents.

(4) An order for the Applicant to pay costs for the Application.

7.  At the hearing on 22 January 2026, the Applicant attended in person, while the 1^st Respondent attended in person and also as the authorized representative of the 2^nd Respondent before this Tribunal. The hearing ran for a total of 4 hours, substantially longer than the 1-hour time originally reserved, and was conducted in English with the service of a court interpreter. The Applicant spoke and gave evidence in English, while the 1^st Respondent in Punti.

D. Undisputed or Indisputable Facts

8.  It is common evidence that, by a written and stamped tenancy agreement dated 1 June 2023 (“the Tenancy Agreement”), the Applicant (i.e. “1^st Party” in the Tenancy Agreement) had let the Premises (“FLAT” in the Tenancy Agreement) to the Respondents (i.e. “2^nd Party” in the Tenancy Agreement) for a term of 3 years from 1 June 2023 to 31 May 2026 at a monthly rent of $35,000 (inclusive of management fee and rates) and on other printed clauses of the Tenancy Agreement.

9.  Pursuant to Clause 2 of the Tenancy Agreement:

“… the 2nd Party needs to pay three-month-rent as deposit to the 1st Party upon signing this agreement”

10.  Clause 6(a) of the Tenancy Agreement reads:

“The 2nd Party knows that present decoration of the FLAT is in the form of a Coffee Shop named Urban Cafe. It is registered with the Licensing Authority of HKSAR Government as a registered club under Meow Mi Home. The 2nd Party may not do any kind of decoration that will jeopardize the license. …”

11.  Clause 6(b) of the Tenancy Agreement states that:

“At the expiry of this agreement the 2nd Party must ensure the FLAT remains in its present state as a Coffee Shop with all its present decoration and valid licence. If the Government cancels the Licence the 1st Party allows the 2nd Party to carry out any other legal business till the expiry of this agreement. However, 2nd Party must inform the 1st Party of any such situation at least 1-month prior to the cancellation. The deposit will be refunded after 31 May 2026.”

12.  Clause 7(b) of the Tenancy Agreement sets out that:

“2nd Party is solely responsible for maintenance and upkeep of the FLAT after the signing of this agreement. …”

13.  According to Clause 8 of the Tenancy Agreement:

“the 2nd Party will pay the monthly rent to the 1st Party in advance or on before the 3rd day of every calendar month. Should the 2nd Party fail to pay the rent of $35,000, the 1st Party can exercise the following rights:

• … From 7^th day of each month, 1^st Party will impose a surcharge of $500/day until the rent is completely settled. Excuses will not be entertained. Money may also be deducted from the above deposit.

• If the rent is not received by the 15^th day of the month, the 2^nd Party is required to leave the rented FLAT by the end of the 15^th day. The 1^st Party will take over the FLAT and the associated club business after the 15^th day. After the 1^st Party resumes the occupancy of the FLAT, the 1^st Party will use the deposit to pay all outstanding bills and rent payments owed by the 2^nd Party. 2^nd Party may have to pay for restoration costs. The left-over balance from the deposit, if any, may be refunded to the 2^nd Party.

• The 2^nd Party should never use the deposit to settle the monthly rent payments.”

14.  Since 1 September 2025, the Respondents had defaulted in payment of monthly rent to the Applicant. The monthly rent due respectively on 1 September 2025, 1 October 2025 and 1 November 2025 all remained wholly unpaid up to the date of hearing on 22 January 2026. There was however a payment of $35,000[4] made by the Respondents to the Applicant after the filing of Form 22.

15.  The Respondents did not serve the Notice of Opposition (which was mainly written in Chinese Language) to the Applicant[5]. The original of the same was therefore presented to the Applicant and its content was verbally translated into English during an adjournment in the said hearing with the assistance of the court interpreter.

16.  The parties signed an Early Termination of Tenancy Agreement on 12 December 2025 (“the Early Termination Agreement”). According to the Early Termination Agreement, the Applicant agrees to an early termination of the Tenancy Agreement subject to the following conditions.

(1) 2^nd Party will pay all rent due from 1 September 2025 to 31 December 2025, i.e. 4 months. (“Condition 1”)

(2) 1^st Party permits 2^nd Party to use their 3-month deposit in settlement of the rent. It means 2^nd Party only pays $35,000 today[6]. (“Condition 2”)

(3) 2^nd Party must leave all fixtures and equipment in working order at the time of return of the possession on or before 5 January 2025. 1^st Party may earlier go to inspect the same. (“Condition 3”)

(4) Any damage to drainage, electricity, fixtures etc. will be fixed by the 2^nd Party within this month. (“Condition 4”)

(5) 2^nd Party may remove their personal computers and other items that 1^st Party permits. (“Condition 5”)

(6) 1^st Party agrees to waive $175,000 contractual rent that is payable under the Tenancy Agreement signed on 1 June 2023. (“Condition 6”)

(7) 1^st Party also waives legal costs incurred in the past 3 months in relation to actions in pursuit of the outstanding rent. 1^st Party agrees to stop all legal actions. (“Condition 7”)

(underlines added by this Tribunal)

17.  On 5 January 2026, the Applicant and the Respondents met in the Premises in around 5 pm in the evening, when the Respondents were taking their personal belongings. There were disputes between the parties, in particular on the handover of items left in the Premises. The Applicant left the Premises. The Respondents deposited the keys to the management office after taking away their personal belongings. The keys were collected by the Applicant later on the same day.

18.  The Early Termination Agreement was entered after the filing of Notice of Application and Notice of Objection. However, no party has made amendment to the filed Notice of Application or Notice of Objection, or provided supplemental information to this Tribunal mentioning the existence or impact of the Early Termination Agreement before the hearing on 22 January 2026.

E. Reasons for the Judgment

19.  Having considered the relevant facts and evidence, the Judgment was delivered in the hearing on 22 January 2026 with oral reasons given as follows.

(1) There was no agreement on the fulfilment of Conditions 3 and 5 in the Early Termination Agreement by the Respondents.

(2) The Respondents raised that the Applicant had failed to comply with the Building Order, which eventually led to a failure of renewing the licence causing substantial loss to the Respondents. The Respondents however could not point out under which clause of the Tenancy Agreement, or under what legal principle, that there was an obligation of the Applicant to ensure or guarantee the Respondents could get a licence.

(3) Even if it was the case, there was no reason for the Respondents not to pay rent. The Respondents’ obligation to pay rent is set out in Clause 8 of the Tenancy Agreement. It is not expressed to be subject to or conditional upon compliance by the Applicant of all or part of his obligations thereunder.

(4) The Tenancy Agreement therefore contemplates the obligation to pay rent to be operated independently from the other contractual obligations. Under common law, the covenant to pay rent has been regarded as independent of the other covenants or obligations under a lease. The Respondents had failed to provide any reference to the Tenancy Agreement, legal provisions or precedent cases suggesting otherwise. Hence, the points raised by the Respondents in their Form 7 do not assist their case.

(5) Regarding the deposit, no relevant clause in the Tenancy Agreement would allow it to be used for offsetting the arrears of rent.

(6) As no reasonable ground was provided by the Respondents to justify their non-payment of rent, the Tribunal agreed with the Applicant’s application for the recovery of arrears of rent and mesne profits.

F. The Respondents’ Submissions

20.  Upon reading the 1^st Respondent’s affirmation filed together with the Interlocutory Application in Form 1 on 5 February 2026, and having considered the 1^st Respondent’s oral submissions made on the first day of hearing for the Leave Application, it appeared that the Respondents were pursuing the following grounds of appeal which are now summarised below. These grounds, as claimed by the Respondents, involve not only factual disputes but also points of law covering interpretation of contract, substantial performance, waiver by conduct, burden of proof, and misuse of relief[7].

(1) Firstly, the Tribunal is erred in law in the determination of the validity of the Early Termination Agreement by overemphasizing the importance of “secondary conditions”[8]. The Respondents claimed that the “primary conditions”[9] under the Early Termination Agreement include (a) payment of the arrears of rent by an instant payment of $35,000 with the remaining outstanding balance to be offset by the deposit, and (b) the delivery of possession of the Premises. The acceptance of the payment of $35,000 by the Applicant and the receipt of keys of the Premises on 5 January 2026 should be regarded as an “acceptance of performance” and “waiver by conduct” by the Applicant. While an offset of outstanding rent by deposit was not specifically allowed under the Tenancy Agreement, it was clearly stated in the Early Termination Agreement which effectively alters the Tenancy Agreement. This negligence of the Tribunal violates the principle of contract law, particularly in the area on “substantial performance” of conditions. (“Ground 1”)

(2) Secondly, the Tribunal erred in the consideration of the fulfilment of the conditions under the Early Termination Agreement. Clause 6 of the Tenancy Agreement only requires the Respondents to keep the Premises in the state as a coffee shop with all its present decoration and valid licence. In the Tenancy Agreement, no requirement was put on the Respondents for the handover of all equipment or fixtures in working order or for the removal of items subject to the Applicant’s permission. The requirements under Conditions 3 and 5 of the Early Termination Agreement, which exceed those of the Tenancy Agreement, should be regarded as secondary conditions under waiver after the acceptance of possession by the Applicant[10]. The Respondents also provided photographs, extracted from CCTV recording, to the Tribunal to prove that the fixtures and equipment left were in normal working order. (“Ground 2”)

(3) Thirdly, it was procedurally unfair to the Respondents, and this Tribunal erred in the assessment. By accepting the Applicant’s alleged breach of conditions of the Early Termination Agreement by the Respondents, this Tribunal accepted and relied only on the oral submissions of the Applicant who had not provided any photo or inspection report to prove his case, and ignored (a) the fact that the Applicant acknowledged the receipt of $35,000, (b) the fact that the Applicant acknowledged the receipt of the keys and possession of the Premises, and (c) the CCTV Records (as defined below). (“Ground 3”)

(4) Fourthly, this Tribunal has not exercised its discretion fully or properly to give relief against forfeiture. To avoid unreasonable recovery of rent by the Applicant, the Tribunal should provide relief to the Respondents by considering the fact that (a) the Applicant has signed a waiver, (b) the Applicant acknowledged the receipt of $35,000 and keys, and (c) the good condition of the Premises as shown by the CCTV Records. (“Ground 4”)

21.  The Respondents also requested this Tribunal to accept the CCTV records (“the CCTV Records”) taken on 5 January 2026 as new evidence and considered that the submission of such evidence complies with the principles set out in Ladd v Marshall [1954] 1 WLR 1489: (1) the evidence could not have been obtained with reasonable diligence for use at the hearing as the Respondents did not expect the severity of disputes on the handover condition of the Premises[11], (2) the CCTV Records are apparently credible, and (3) the evidence would have an important influence on the outcome of the case.

22.  The Respondents requested for leave to appeal, and for stay of execution of the Judgment pending outcome of the appeal.

G. The Applicant’s Response on Respondents’ Submissions

23.  The Applicant lodged a written response to the Respondents’ submissions on the second day of hearing for the Leave Application. He considered there had been no reasonable ground to support the Respondents to appeal against the Judgment and objected to the Leave Application, in particular on the following grounds.

• “In order to early terminate the Tenancy Agreement, R1 and R2 enticed me by proposing that they are willing to leave the premises with the restaurant business in running mode on 5 January 2026. The rational was that I can start earning revenue from the business on 5 January 2026.

• Hence on 12 December 2025, I signed an Early Termination Agreement (“ETA”) where I agreed to waive $175,000 rent for the remaining contracted Tenancy Agreement provided they stick with its terms.

• Unfortunately, R1 and R2 failed to abide by the provisions of ETA. They rendered it invalid.

• CCTV photos do not validate the ETA because photos show clearly that R1 & R2 abandoned the premises after stripping it 60% of the assets required for the normal functioning of the business.

• I had visited the premises on 28 December 2025. Business was normal. I met some staff and reminded her not to remove business items when they leave.

• On 3 January and again 4 January I sent many messages to R1 that I wish to inspect the premises. He belatedly told me he can’t come.

• Finally on 5 January 2026 he did not come until 5pm. When I gained access I found the premises in disarray and business equipment missing.”

24.  During the hearing, the Applicant further added that (a) the payment of $35,000 should also be deemed as rent payment; and (b) he did not agree that the breaches made by the Respondents were minor.

H. Applicable Law on Leave to Appeal

25.  Any party to proceedings before the Tribunal may appeal to the Court of Appeal against a judgment of the Tribunal on the ground that such judgment is erroneous in point of law: s.11(2) of Lands Tribunal Ordinance, Cap.17 (“LTO”).

26.  Leave to appeal shall not be granted unless the Tribunal hearing the application for leave is satisfied that (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard: s.11AA(6) of LTO.

I. Construction of the Early Termination Agreement

27.  A major ground raised by the Respondents was that there was no breach of the primary conditions by the Respondents under the Early Termination Agreement. Despite the above, this Tribunal cannot find any categorisation or definition of primary or secondary conditions in the Early Termination Agreement. It is therefore necessary to review the construction of the Early Termination Agreement to determine whether the conditions therein should be categorised into primary and secondary conditions; and if there is such categorisation, whether Condition 3 and Condition 5 fall into the category of primary conditions.

28.  The well-established principles of construction of documents has been set out in Jumbo King Ltd v Faithful Properties Ltd and others [1999] 3 HKLRD 757 -

“The construction of a document is not a game with words. It is an attempt to discover what a reasonable person would have understood the parties to mean. And this involves having regard, not merely to the individual words they have used, but to the agreement as a whole, the factual and legal background against which it was concluded and the practical objects which it was intended to achieve. Quite often this exercise will lead to the conclusion that although there is no reasonable doubt about what the parties meant, they have not expressed themselves very well. Their language may sometimes be careless, and they may have said things which, if taken literally, means something different from what they obviously intended.”

29.  And the overall importance of context when construing contractual documents is highlighted in Fully Profit (Asia) Ltd v Secretary for Justice (2013) 16 HKCFAR 351 -

“What emerges from these cases – and other authorities on contractual interpretation – is the overall importance of context when construing contractual terms. … The surer guide to interpretation is context. Here, I would just add that in the area of statutory and constitutional interpretation, it is context that is key; context is the starting point (together with purpose) rather than looking at what may be the natural and ordinary meaning of words.”

30.  The Early Termination Agreement was entered between the parties on 12 December 2025 after the filing of Form 22 by the Applicant on 21 November 2025 and Form 7 by the Respondents on 10 December 2025. At that time, 4-month rent was overdue.

31.  Among the seven “conditions” in the Early Termination Agreement, Conditions 1, 2 (front part), 3, 4 and 5 are the obligations of the Respondents, while Conditions 2 (rear part), 6 and 7 are obligations of the Applicant if the Respondents fulfil the above obligations and the early termination takes effect. Looking at the wordings used in the Early Termination Agreement that “1^st Party agrees to the early termination of the Tenancy Agreement signed between both parties on 1 June 2023 subject to the following conditions”, the Respondents’ obligations under Conditions 1 to 5 are a condition precedent to the Applicant’s obligations under Conditions 2, 6 and 7.

32.  There is no categorisation of “primary” or “secondary” conditions among these 7 conditions in the Early Termination Agreement.

33.  The first two conditions in the Early Termination Agreement relate to the payment of the overdue rent: Condition 1 requires the payment of the overdue 4-month rent by the Respondents; Condition 2 sets out the required cash payment at only $35,000, equivalent to 1-month rent, as the Applicant agrees the remaining 3-month rent to be offset by the deposit. Conditions 6 and 7 set out the obligations of the Applicant to waive the contractual rent payment for the remaining duration of the tenancy term, waive the legal costs incurred, and stop all legal actions. These four conditions are either based on the original obligations of the Respondents (to pay rent) under the Tenancy Agreement, or conditions favourable to the Respondents by allowing the offset of outstanding rent by the deposit (which was not allowed under Clause 8 of the Tenancy Agreement) and granting waiver of the Applicant’s rights for his potential claims for the potential loss of future rental income and the costs. The Respondents can also occupy the Premises for free during the period between 1 to 5 January 2026, as the period of rent payment covers only up to 31 December 2025, while handover of the possession of the Premises was on 5 January 2026.

34.  The remaining conditions, including the two “secondary conditions” as suggested by the Respondents, are the obligations of the Respondents specifically required under the Early Termination Agreement: (a) deliver possession of the Premises on or before 5 January 2026 by leaving all fixtures and equipment in working order (Condition 3), (b) fix any damage to drainage, electricity, and fixtures, etc. within a month (Condition 4), and (c) remove personal computers, and other items with the permission of the Applicant (Condition 5).

35.  Condition 4 echoes with Clause 7(b) of the Tenancy Agreement, which requires the Respondents to maintain and upkeep the Premises. The difference is that Condition 4 requires the fixing of damages to be carried out within a specified period of 1 month.

36.  As correctly pointed out by the Respondents in their Notice of Appeal, the requirements under Conditions 3 and 5 exceed the original handover requirements under the Tenancy Agreement. Obviously, there is a key element in the Respondents’ obligations under Conditions 3 and 5 – the Respondents requires the Applicant’s permission to remove any items (except personal computers) from the Premises, and the fixtures and equipment must be in working order.

37.  Without a list of agreed fixtures and equipment, the items included in “all fixtures and equipment” in Condition 3 would rely solely on what fixtures and equipment were available as at the time of inspection by the Applicant. Reading Conditions 3 and 5 together provides a clearer picture of these requirements. Condition 5 explicitly states that the removal of items (excluding personal computers) requires the Applicant’s permission, while Condition 3 further requires all fixtures and equipment, among all items, to be in working order.

38.  At the hearing, when asked if a list of fixtures and equipment existed, the Applicant said that no such list existed because the removal of personal belongings of the Respondents would be subject to his permission during the handover inspection. This was not disputed by the Respondents. This arrangement coincides with the importance of permission under Condition 5, and sounds reasonable to this Tribunal.

J. Discussion

J.1 Whether Conditions 3 and 5 are “secondary conditions” to the Early Termination Agreement?

39.  The Early Termination Agreement contains only 7 conditions, with Conditions 3 and 5 being among the few. There is no categorisation of primary or secondary conditions in the Early Termination Agreement.

40.  As discussed in Paragraph 36 above, Conditions 3 and 5 are specific requirements under the Early Termination Agreement additional to the handover requirements under the Tenancy Agreement. Having considered that the Applicant had already filed an application to recover possession of the Premises and rent, but have not got a readily available replacement tenant, it could hardly be reasonable for the Applicant to accept an early termination, an offset of outstanding rent by deposit, and to waive the rights to recover future contractual rent and costs (which were all favourable to the Respondents), without the need for fulfilling the obligations under Conditions 3 and 5 by the Respondents.

41.  It is also unreasonable to interpret these two conditions as “secondary conditions” or less important compared to other conditions, considering their drafting with the use of specific terms such as “in working manner” and “other items that 1^st Party permits”. These are obviously special requirements.

42.  Put the question in a different way. If the Respondents are correct that Conditions 3 and 5 are secondary conditions and should be considered waived once the Applicant accepts the keys and the $35,000 payment (which is not an additional payment but a repayment of the unpaid rent), then effectively the Respondents would not be required to fulfil Conditions 3 and/ or 5 in all circumstances. It is absurd to suggest that the parties had such agreement.

43.  This Tribunal is hard to find any reasonable ground to suggest Conditions 3 and 5 are secondary conditions in the Early Termination Agreement.

J.2 Whether the Respondents have breached Conditions 3 and 5?

44.  Regarding the return of possession under Condition 3, the Respondents delivered the keys to the management office on 5 January 2026 and the Applicant accepted the keys on the same day. There has been no dispute on the fulfilment by the Respondents in relation to the return of possession on or before 5 January 2026.

45.  The Respondents’ compliance with the remaining parts for Condition 3 is a focus of dispute: the Applicant alleged that the Respondents had taken away something, while the 1^st Respondent insisted that they had left behind tables and chairs (exceeding the numbers allowed in the licence), fridge, electromagnetic stovetop, air fryer etc. which would be sufficient for new comers to start doing business.

46.  The issue is not on how many fixtures and equipment are left. The requirement in Condition 3 is that the Respondents must leave all fixtures and equipment in working order. There was (i) no evidence provided either by the Applicant or the Respondents on an agreed list of all fixtures and equipment; (ii) no evidence to show if all fixtures and equipment had been left in the Premises; and (iii) no evidence or report to demonstrate whether those left in the Premises were in working order. Overall, there has been insufficient information to come to the conclusion of whether the Respondents have fulfilled or breached Condition 3.

47.  The story for Condition 5 was however different. The Respondents did not provide evidence on any permission given by the Applicant for the Respondents to take away any items, on or before the handover date of the Premises. According to the oral submission of the 1^st Respondent, when the Applicant arrived at the Premises on 5 January 2026, the Respondents were taking the last of their personal stuffs[12]. The Applicant then suddenly left. Later, as the Respondents had already taken away their personal items but could not contact the Applicant, they handed over the keys to the management office. The Respondents admitted that they had taken away items (termed “personal belongings” by the 1^st Respondent), prior to and after the arrival of the Applicant in the Premises.

48.  There was no evidence provided by the Respondents that any permission had been given by the Applicant when the Applicant arrived at the Premises on 5 January 2026. Based on the happenings described by the 1^st Respondent and the Applicant and on a balance of probabilities, this Tribunal also could not find the Applicant had given any permission to the Respondents to take away any item when the parties met on the Premises.

49.  As the Respondents failed to prove the existence of any permission given by the Applicant under Condition 5, the Respondents’ action of taking away items was in breach of Condition 5. The Applicant, who is the innocent party, may decide whether or not to bring the Early Termination Agreement to an end, and can terminate further performance of the Early Termination Agreement or he can decide not to do so: Chitty on Contracts Vol 1, 36^th edition §28-054.

J.3 The Respondents’ Grounds 1 and 2

50.  It is the assertion of the Respondents that the Early Termination Agreement was valid so that they can, relying on the conditions in the Early Termination Agreement, use the deposit to offset the outstanding rent and occupy the Premises for the period between 1 to 5 January 2026 without the need to pay rent. Following the general principle that he who asserts must prove, the Respondents have a burden to prove that the Applicant has an obligation to perform or fulfil the conditions under the Early Termination Agreement.

51.  As mentioned above, the Respondents were in breach of Condition 5 of the Early Termination Agreement, and this Tribunal deems there were insufficient reasonable grounds to suggest that Condition 5 is a secondary condition as alleged by the Respondents. Following the Respondents’ breach of Condition 5, the Applicant can choose to terminate further performance of the Early Termination Agreement, including his agreement for the Respondents to use the deposit to offset the outstanding rent and waiver on legal costs.

52.  The Respondents argued the acceptance of $35,000 and the keys are a waiver by conduct. This Tribunal does not agree. This amount is not an additional sum offered by the Respondents but part of the unpaid rent. The Applicant’s acceptance of this money, which happened well before the handover of the Premises, is irrelevant to the Applicant’s position after the breach. It is also reasonable for the Applicant to take back possession of the Premises to fulfil his duty to mitigate potential loss. Neither of these actions should be regarded as a “waiver by conduct” as alleged by the Respondents, not to mention the inherent unreasonableness of the Respondents’ interpretation as explained in Paragraph 42 above.

53.  The Respondents further argue that Conditions 3 and 5 are additional requirements when compared to the handover requirements stipulated under the Tenancy Agreement. This Tribunal does not find it relevant or logical to draw to the conclusion that these two conditions should therefore be classified as secondary conditions.

54.  I do not see any error of law in this Tribunal in law in the determination of the validity of the Early Termination Agreement.

J.4 The Respondents’ Ground 3

55.  The breach of Condition 5 is a factual finding by this Tribunal based on the oral evidence regarding the happenings before and on the handover date of the Premises given by both the 1^st Respondent and the Applicant during the hearing. Their evidences are generally consistent regarding (a) the happenings upon the arrival and departure of the Applicant on the handover date, and (b) the handover of keys of the Premises by the Respondents to the Applicant through the management office. The Respondents misunderstood that this Tribunal relied only on the oral evidence of the Applicant.

56.  The conditions under Ladd v Marshall for determining whether new evidence should be admitted for an appeal are:

(1) The evidence could not have been obtained with reasonable diligence for use at the trial (“Principle 1”);

(2) The evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive (“Principle 2”); and

(3) The evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible (“Principle 3”).

57.  The Respondents did not explain why the CCTV Records were not available on the date of hearing of 22 January 2026, which is more than 2 weeks later than its filming date on 5 January 2026. The Respondents had failed to show Principle 1 in Ladd v Marshall was satisfied.

58.  Even if Principle 1 in Ladd v Marshall is satisfied, the CCTV Records did not assist the Respondents’ case. Firstly, although the photograph records may be able to show something in good appearance, they cannot show something in “working order”. Secondly, even if video records could be provided, they might only show the working status of items, fixtures and equipment which were filmed, but could not show the status of those items, fixtures and equipment which were not filmed, or demonstrate the coverage of “all fixtures and equipment”. Thirdly, according to the affirmation of the 1^st Respondent filed on 5 February 2026, the CCTV Records aimed to show that all the fixtures and equipment had been left in the Premises and they were in working order. It is not an evidence to demonstrate the Applicant had permitted the Respondents to take away any items and therefore cannot save the Respondents’ breach of Condition 5. This Tribunal is not convinced that the CCTV Records would have an important effect on the present case. Principle 2 in Ladd v Marshall is not satisfied.

59.  Overall, this Tribunal does not see there was any procedural unfairness to the Respondents.

J.5 The Respondents’ Ground 4

60.  Pursuant to s.21F of High Court Ordinance, if a right of re-entry or forfeiture in respect of any land for non-payment of rent is enforced against a lessee for the first time during the term of a lease, and the lessee pays the arrears of rent/ mesne profits and costs on or before the Relief Expiration Date set by the Tribunal, a relief from forfeiture will be provided to the lessee and the lease of the suit premises will be reinstated.

61.  In the present case, the Respondents had already delivered possession of the Premises to the Applicant. The abovementioned relief mechanism is therefore inapplicable herein.

62.  This “ground” is therefore irrelevant to the Respondents’ Leave Application.

J.6 Conclusion

63.  The Respondents had, this Tribunal concludes, not been able to identify any arguable error of law made by this Tribunal in the Judgment. This Tribunal is thus not satisfied that the intended appeal enjoys any reasonable prospect of success or that there is some other reason in the interests of justice why it should be heard. The Respondents’ application for leave to appeal is dismissed.

K. Stay of the Judgment pending appeal

64.  An appeal shall not operate as a stay of execution of the proceedings or decision. Unless a party could justify a stay of execution, a stay would not be ordered.

65.  The Respondents relied on the same grounds in the application for a stay of execution of the Judgment. As there is no reasonable ground in the Respondents’ intended appeal being the minimum requirement for the grant of a stay, the Respondents’ application for a stay of execution is also dismissed.

L. Costs

66.  The general rule is that costs should follow the event. Having considered the costs submissions of the parties and all the relevant circumstances, I order that the Respondents do pay the Applicant the costs of the Respondents’ Interlocutory Application filed herein on 5 February 2026, including all costs reserved in the hearings on 27 February 2026 and 10 March 2026, which are summarily assessed at $350.