YUK YUNG IP AND ANOTHER v. ALL NATIONS EDUCATIONAL SERVICES LTD

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

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JUDGMENT

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1. By a Deed dated 10th November 1995, the Plaintiffs agreed to let the premises for a term of two years to the Defendant. The term of two years ran from 27th November 1995 to 26th November 1997. The Plaintiffs in this case are Mr. and Mrs. Yuk. The Defendant in this case largely acted through a Mrs. Choy. Mrs. Choy, starting in about April 1997 some six months before the termination of lease, had tried to seek the agreement of Mr. Yuk for the earlier termination of the lease. Mr. Yuk said no. There was an important meeting on 12th July 1997, where on one side Mr. Yuk's evidence to this court, both by witness statement and by oral evidence, is that he refused to agree to earlier surrender. The Defendant's case is that on 12th of July at the meeting, Mr. Yuk agreed to earlier surrender. This is the essential dispute of the whole case.

2. Followed on after the 12th July meeting, there was an inspection on the 27th July. There was in fact, substantial agreement between the parties on the evidence that at the site inspection, the Yuks refused to accept the keys when they were offered to them by Mrs. Choy. Present at the inspection on 27th was also a Mrs. Chan who gave evidence before the court. The Yuks left for holiday that day on 27th. Mrs. Chan who had the keys, the two sets of keys, gave them to Mrs. Choy and the Defendant therefore had the keys until 30th August when there was another inspection. The case of the Defendant is that on 30th August, one set of keys was returned to the Mr. Yuk. On the pleading however, there was no issue on this and I would describe this matter as not relevant.

3. Finally on 4th December, the keys were delivered by the Defendant to the Plaintiffs through the Plaintiffs' solicitors. The Plaintiffs by this action sued for a number of heads of damages, the total quantum of which is agreed at the sum of $249,942.38. The only issue in relation to that point for me to decide is the liability for that quantum, namely whether the defence of the Defendant is accepted by the court. The defence is a simple one, namely on 12th July there was an oral agreement between Mrs. Choy of the Defendant and Mr. Yuk of the Plaintiffs whereby the Plaintiffs accepted an earlier termination of the lease. Evidence put before the court at the trial came from Mr. Yuk and Mr. Fung, the Plaintiffs' solicitor and from the Defendant, Mrs. Chan a so-called consultant to the Defendant. There was also a hearsay witness statement of Mrs. Choy which came in by agreement of the parties. I also have before me a bundle of documents consisting of some important letters, being contemporaneous letters from the Plaintiffs' solicitors to Defendant.

4. First on the assessment of witnesses credibility: having seen and heard the three witnesses, I have no doubt that the witnesses of the Plaintiffs are credible and are to be believed. Mr. Yuk, who is at times a little bit agitated and too anxious to tell his story, might seem sometimes to be less than perfectly clear. But I have no doubt that he is a truful and reliable witness and I accept his evidence. Mr. Fung's evidence was not even challenged. On the other hand, I have the gravest reservation about the evidence of Mrs. Chan. I do not find her a reliable witness and so far it may be material, I reject her evidence.

5. The documentary evidence strongly supports the Plaintiffs' case. First is the letter of the 22nd July 1997 which is to be found at page 185 of the bundle. Page 187 is particularly crucial and it reads (this is from the solicitors of Plaintiffs to the Defendant): "We understand from our client that you intend to sooner determination the term with the tenancy on 26th July 1997. Know that that the contractual term of the tenancy would only expire on 26th November 1997. Purported sooner determination tenancy of the term is also a breach of the tenancy agreement." If there had been an agreement on 12th July, the letter would not be written in that sort of term. Therefore for me the letter is strongly supportive of the Plaintiffs' case that there had been no agreement on the 12th.

6. Before I come to the letter however of 1st September 1997, it is important to note the absence of any correspondence immediately after the important day of the 27th July. On that day, the case as I understand of the Defendant is that Mr. Yuk had reneged and had gone back on his word of the agreement of the 12^th. It was never put by Mr. Kwong to Mr. Yuk that he had gone back on his word and suddenly on 27th he had refused to honour the agreement of the 12th July. Be that as it may, what is important on 27th is that during that inspection, there is no evidence from any one that Mrs. Choy said to the Yuks: "You had gone back on your word of 12th July". But what is even more significant, is that after the refusal of the Yuks to accept the keys on the 27th July, there was no letter from the Defendant or the Defendant's solicitors complaining that there had been a reneging of the agreement of the 12^th of July nor was there any attempt to send the keys back to the Yuks. So I attach also significance to the lack of correspondence from the Defendant to the Plaintiff.

7. The significant of the letter of the 1st September is more marginal because it really relates to the question of the keys. What happened was that on the 30th August, there was an inspection at which the door was opened by the Defendant. After the sudden departure of Mrs. Choy, the door was not locked so the Plaintiffs caused their solicitors to write the letter of 1st September on page 125 pointing out that they could not lock the doors because they did not have the keys and asking the Defendant to lock the door. And that is perfectly consistent with there being no agreement on the 12th.

8. The totality of the picture built up by the material present to the court, I regret to say that to Mr. Kwong, a convincing picture that there was no agreement on the 12th July. I have no hesitation in coming to the conclusion that the Plaintiffs are right and that there was no agreed surrender on the 12th. It follows therefore, that there shall be judgment in the agreed quantum of damages and also for the cost of the action to the Plaintiff. There should be interest at 2% above prime, from the date of the issue of the writ until today.

9. To avoid any confusion, my judgment is to the effect that the Defendant do pay to the Plaintiffs the agreed sum of $249,942.38 plus interests thereon as indicated earlier and that in addition, the $40,000.00 held by the stakeholders shall be released to the Plaintiffs forthwith.