CONVENIENT LTD v. GREAT DAY INTERNATIONAL LTD AND ANOTHER

HCA1353/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1353 OF 2008

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J U D G M E N T

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1. (i)   The plaintiff as the landlord and the defendant as the tenant entered into a fixed term tenancy of two years from 18 July 2006 to 17 July 2008.  

(ii)  The 2^nd defendant entered into a Guarantee and Indemnity in favour of the plaintiff in consideration of the plaintiff entering into the aforesaid tenancy agreement. 

2. The tenancy expired on 17 July 2008 and in this action the plaintiff claimed for vacant possession of the property at Shop C on Ground Floor of Golden Crown Court in Nathan Road. 

3. In the defence of the defendants they alleged that on 3 March 2008 there was a meeting between Mr Chau of the plaintiff and Mr Tso of the 1^st defendant whereby the landlord offered a renewal of tenancy at $700,000 per month which is a small raise from the original rental of $680,000 for two years.  This offer, according to Mr Tso, was accepted by him seven days later on 10 March 2008 over a telephone conversation with Mr Chau. 

4. However the sequence of events did not point to any oral agreement at all.  Before the expiration of the tenancy agreement the plaintiff through Messrs Deacons, their solicitors, issued two letters on 17 and 26 March 2008 to the 1^st defendant notifying them that they should deliver up vacant possession of the property upon expiration of the term on 17 July 2008.  That was of course shortly after the alleged oral agreement.  There was no immediate response by the 1^st defendant raising the alleged oral agreement of renewal.  

5. Instead on 28 April 2008 the 1^st defendant wrote back by a Chinese letter and requested a short-term extension of the tenancy until the end of 2008.  It had also stated that the 1^st defendant felt regrettable that the plaintiff had already let out the property to a jewellery company and therefore they had no other alternative but to look for another place.  This is totally inconsistent with the alleged oral agreement. 

6. The 1^st defendant sought to explain their position by saying that Mr Tso was only a layman, he did not know the binding effect on the oral agreement.  However both parties are businessmen they should know the importance of an agreement.  If there was a renewal of tenancy, albeit by an oral agreement, the 1^st defendant would not have written a letter in such a term.  To the aforesaid letter of the 1^st defendant the plaintiff replied by a letter dated 13 May 2008 refusing to grant an extension and reminded the 1^st defendant to deliver up vacant possession upon the expiration of the tenancy agreement.  That oral agreement was not put forward until the 1^st defendant was represented by their solicitors and the oral agreement was only put forward later on. 

7. Although in a summary judgment application this court should not resolve the dispute on affidavit evidence, yet the case put forward by the defendants was totally incredible.  Accordingly in my view the plaintiff is entitled to final judgment in this application with costs of the action including this application.