WIN CENTURY INVESTMENT LTD. v. SUN TING TINA

DCCJ 6216/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6216 OF 2002

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JUDGMENT

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This is an 0.14 appeal against the decision of Master Roy Yu.

2. The Defendant sought leave to file 2 affidavits. As this appeal is by way of re-hearing I gave leave. Likewise I allow the Plaintiff to file affidavit in reply.

3. The Plaintiff's claim is in respect of a cheque issued by the Defendant in favor of the Plaintiff in the sum of $180,000. The Plaintiff presented the cheque for payment and was marked "refer to drawer" and dishonoured.

4. The Defendant's case is that the Plaintiff is the landlord and had entered into a provisional tenancy agreement to lease the ground to 4th floor of Wah Ying Cheong Central Building to Ever Harvest International Ltd. (Ever Harvest) at a monthly rental of $180,000.00. The Defendant is a Director of Ever Harvest.

5. Pursuant to the provisional agreement Ever Harvest had paid a Rental Deposit equivalent to 3 months rental and management fees in the sum of $566,400.00.

6. Ever Harvest failed to pay rent for the month of July and August 2002 and the Defendant issued the cheque in the sum of $180,000.00 on 1/8/02 postdated to 20/8/02 purportedly to pay for the July rental of Ever Harvest. The said cheque was dishonoured.

7. The Defendant went on to say that there was a settlement reached in September 2002 when the Plaintiff agreed with Ever Harvest that the rental deposit of $566,400.00 would be applied to settle the arrears of rent for the months of July, August and September and the balance for clearing and clearance of the rented premises.

8. The Defendant's submission is that no consideration was given for the said dishonoured cheque.

9. The Defendant's case is that there was a credit balance of $566,400.00 with the Plaintiff because the Plaintiff and the Ever Harvest had not entered into a formal tenancy agreement. With due respect to Mr. Tang solicitor for the Defendant the provisional agreement was a memorandum in writing. There was substantial performance. The $566,400.00 was paid as rental deposit. It is trite law that rental deposits would be returned to Ever Harvest after deducting damages and outstanding charges after delivery of vacant possession. It cannot be used for payment of rentals.

10. The Plaintiff is at liberty to sue Ever Harvest for payment of the July 2002 rental. The dishonoured cheque issued by the Plaintiff can be construed as either payment on behalf of Ever Harvest for July's rental or forbearance to sue by the Plaintiff against Ever Harvest. So there was consideration.

11. As to the purported settlement it was not signed by the Plaintiff. The evidence put forward is not at all convincing. If it were agreed by the Plaintiff it did not need anymore than a few minutes for the Plaintiff to sign on it. It is illogical to say that due to shortage of time the Plaintiff did not sign the agreement.

12. In any event, if there was any agreement it was well after the cheque was dishonoured. There was consideration when the cheque was issued and dishonoured.

13. There is no defence to the Plaintiff's claim.

14. In the premises there be judgment for the Plaintiff in the sum of $180,000.00 with interests at 1% above prime p.a. from 20/8/02 until judgment and thereafter at judgment rate until the judgment debt is satisfied. Costs to the Plaintiff. Certificate for counsel.