LEUNG WAI CHEUNG v. OCTEL NETWORKS LTD AND ANOTHER

DCCJ 4454/2017

[2020] HKDC 609

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVL ACTION NO 4454 OF 2017

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DECISION

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APPLICATION FOR LEAVE TO APPEAL

1.  This is the plaintiff’s application by way of Inter-parties Summons for leave to appeal against the judgment handed down by me on 15 May 2020 (“the Judgment”).  Three reasons elaborated into 19 paragraphs forming the grounds of appeal are set out in his supporting Affirmation and his Grounds of Appeal.

BACKGROUND

2.  The facts of this case appear in the Judgment and I do not propose to repeat them in detail.  

3.  In the Judgment, the plaintiff’s action was dismissed and in the third party action, judgment was entered in favour of the 1^st defendant against the Third Party in the sum of HK$1,205, with interest. 

4.  The Third Party has paid the said sum of HK$1,205 (with interest) to the 1^st defendant in satisfaction of the Judgment.  Thereafter, the third party sought leave to be excused from attendance of the hearing of the plaintiff’s summons for application for leave to appeal against the Judgment.

5.  Thus, only the plaintiff and the defendants appeared in the hearing for leave to appeal.   The plaintiff, as in the trial, appeared in person.    The defendants, appeared in person by the 2^nd defendant in trial but were legally represented in this application hearing by Ms Leung of Messrs. Cheung Fung & Hui, Solicitors.

6.  I shall adopt the same abbreviations used in the Judgment in this decision.

DISCUSSION

Applicable principles for leave to appeal

7.  As rightly pointed out by Ms Leung, Solicitor for the defendants, under Section 63A(2) of the District Court Ordinance Cap 336, leave to appeal shall not be granted unless the appeal has a reasonable prospect of success or there is some other reason in the interests of justice why the appeal should be heard. 

8.  This has now been clearly established by the authorities to mean more than just an arguable case, but for an appeal that has merits, the prospects of succeeding must be “reasonable” and therefore more than “fanciful”, without having to be “probable” (Ho Yuen Ki Winnie & Anor v Ho Hung Sun Stanley & Others HCMP 1009/2009; Le Pichon JA in SMSE v KL [2009] 4 HKLRD 125 at §17; Hartmann and Fok JJA (as they then were) in KNM v HTF, unrep, HCMP 288/2011 (Court of Appeal; 7 September 2011 at §9).

9.  In considering whether this application has merits, I also bear in mind that by O 59 Rule 3(1), an appeal to the Court of Appeal is by way of re-hearing.  But it is a re-hearing on the record, and findings of this Court will be looked by the Court of Appeal as to whether there was an error of law, or error of procedure or whether there was no reasonable basis for a finding of fact or findings of fact, which is or are sufficiently fundamental for the appellate court to overturn the judgment of this Court.  These standards of review by an appellate court exist in our legal system because otherwise, there will be little finality in the adjudication of cases by the Court System.  Thus, I have to consider whether the Grounds of Appeal of the plaintiff (Applicant for leave to appeal) stand a reasonable chance, as defined in the authorities, of meeting these standards of review.  I can understand that the plaintiff is unhappy with the result but rightly or wrongly, the Court has come to the result encapsulated in the Judgment and much as I would want to assist the plaintiff (who is acting in person), I can only do so, if I can discern a reasonable chance of meeting these standards of review.

Grounds relied on by the plaintiff

10.  On 27 May 2020, the plaintiff took out an Inter-partes Summons for leave to appeal against the Judgment for the following 3 reasons (quoted exactly from the grounds set out in the summons):-

“(1) the tenancy agreement made on the 7^th August 2017 (refers (sic) the Trial bundle P. 177-180) between the plaintiff and defendants was conclusive and confirmed by the plaintiff on the 8^th August 2017. It was because Shirley Wong has informed the plaintiff in the morning on the 8^th August 2017 that the defendants’ down payment cheque was post-dated which she forgot to tell him yesterday night. The plaintiff has accepted her apologize (sic) and confirmed his acceptance of defendant’s offer by phone. Under the binding tenancy agreement, the plaintiff instructed immediately the (sic) Shirley to arrange the termination of the existing tenant (TB P. 182, P. 220-221) so as to vacate the premise for the defendant’s use by sending the existing tenant information to the (sic) Shirley at 11:52 am on the 8^th August 2017 (TB P. 220). It was evidenced by Shirley’s whatsapp (TB P. 220) on her apologize (sic) and agreed to buy the plaintiff dinner for her careless forget (sic).

(2) The acceptance of the tenancy agreement by the plaintiff was well before the offer withdrawal (sic) by the defendant on the 13^th August 2017. Hence, the agreement was binding on both parties. The defendant was (sic) deliberately breached the agreement for his personal and undisclosed reason which was reveal (sic) by the whatsapp message at 5:48 pm on 13^th August 2017 (TB P. 281) that Shirley complained that the defendants could not use the premise long and then decided to cancel the tenancy. It was confirmed by that defendants that they could only use the premise 3-5 months max which was likely the main reason for them to breach the agreement deliberately.

(3) The defendants knew clearly that the existing tenant of the premise was willing to move out and vacate the premise in the mid-August 2017 for their use because the plaintiff has informed and re-confirmed with his agent Shirley at 1:12 pm on the 25^th July 2017 (TB P. 217, P. 251). The defendants showed a clear intention to confirm and secure the tenancy agreement. On the 8^th August 2017, the plaintiff has also informed their agent about the confirmation on the termination of the existing lease so as to handover the premise to the defendant on the 15^th August 2017 as per the agreement. The defendant’s defense on worrying about that he would not be able to get the premise for his use on time which might cause great business loss, was unreasonable and lies to the court.

Hence, the tenancy agreement was successfully concluded between the parties. The defendant has deliberately breached the agreement and caused direct loss & damages to the plaintiff. The witness statement of both the plaintiff and the 3^rd third parties has confirmed the above facts with solid evidence to support. The plaintiff relied on the 3^rd party as a licensed agent who has confirmed the agreement was final and binding on the 8^th August 2017. The defendant’s defense as unreasonable and unbelievable without any legal and objective evidence to support.

As a conclusion, the judgment was unacceptable and biased.  It was fundamental wrong in respect of law principal (sic) and trial evidences.  Thus, the plaintiff has to appeal against the judgment to protect his legal interest and social justice because it was unreasonable and caused further loss & great stress to the innocent plaintiff.”

11.  The above 3 reasons are further elaborated upon into 19 paragraphs in the Grounds of Appeal.  The Solicitors for the defendants have helpfully boiled down into 9 grounds which are consolidated by the Court into 5 Grounds. 

12.  I shall discuss the five consolidated grounds in turn below. 

Ground 1 (paragraphs 1 to 5, 16 & 17 of the Grounds of Appeal)

13.  In Ground 1, the plaintiff alleges that the agreement signed by both parties on 7 August 2017 was “final, concluded and binding”.  This was, he alleges, supported by the fact that he asked his agent Shirley Wong, who also acted for the defendants, to get an early termination of the tenancy with his then existing tenant to prepare for the delivery of vacant possession of the Premises on time.  His argument seems to be along the lines that the defendants would have known about this arrangement through the agent Shirley Wong.  The plaintiff claims he has accepted the offer including the post-dated cheque despite Shirley Wong having advised the 2^nd defendant to make immediate payment of the deposit as it was open for the plaintiff landlord to look for other tenants until such was done.  In this regard, the plaintiff said it’s just Shirley Wong’s own personal advice to the defendants “on how to protect their interest” and has nothing to do with the plaintiff.  

14.  In gist, the plaintiff argues that:-

(1)  He has accepted the defendants’ offer including the post-dated cheque, by phone with the agent Shirley Wong on 8 August 2017, when Shirley Wong told him that post-dated cheque of $60,000 was given to him instead of immediate payment;  He said “he had accepted the post-dated cheque, which he did not return and would deposit (it) according to the agreement”, “the acceptance of the tenancy agreement by the plaintiff was well before the offer withdrawal (sic) by the defendant on the 13^th August 2017.  Hence the agreement was binding on both parties”[1];

(2)  He had immediately instructed Shirley Wong to arrange for early termination of the tenancy of his then tenant on 8 August 2017 so as to vacate the premises for the defendant’s use.  He argues that “it happened only if the plaintiff has accepted the defendants’ offer and confirmed with their agent Shirley Wong in that morning on 8^th August 2017… there should be no doubt that the plaintiff has accepted the defendant (sic) offer including the post-dated cheque on 8 August 2017” [2] ;  

(3)  The agreement was final and concluded: “the agreement has been accepted and reconfirmed by the plaintiff before 11:41 am of 8^th August 2017.  It already became binding on both parties at that moment in the morning.  Any cancellation or amendment need mutual written agreement even if (it) were instructed by the plaintiff;” [3]

(4)  “there was no further conversation and request or instruction between the plaintiff and Shirley from 11:52 am of 8^th August 2017 to 11:43 am of 13^th August 2017 as evidenced in their whatsapp record (TB P. 221 & 222).  This supported the above argument that the agreement was agreed and final;” [4] and

(5)  Regarding paragraphs 20 to 27 of the Judgment, whereby Shirley Wong told the 2^nd defendant that the plaintiff wanted immediate payment of HK $60,000 (instead of being given the post-dated cheque) and if that was not made, then the plaintiff could only accept the offer on or after 13 August 2017 and would meanwhile be at liberty to rent the Premises to another tenant.  The plaintiff argues that “it was just Shirley’s personal advice to her client i.e. defendants on how to protect their interest.  The plaintiff did not instruct Shirley and own (sic) any legal liability for her own personal opinion to her client”[5].

15.  In this regard, there is no dispute that:-

(1)  Shirley Wong is a dual agent who acted for both the plaintiff and the defendants. In this regard, it is noteworthy that:

(a)  in paragraph 6 of the plaintiff’s Grounds of Appeal, the plaintiff said, “The third party was a professional and licensed estate agent who represented both parties to final (sic) and conclude the tenancy agreement dated 7^th August 2017;

(b)  in paragraph 18 of the plaintiff’s Grounds of Appeal, it is said, “the plaintiff has appointed a reliable license (sic) estate agent i.e. 3^rd party to follow the normal and standard trade practice to reach a binding tenancy agreement with the defendant.”

(2)  A post-dated cheque of $60,000 (which comprised the payment of 1 month rental in the sum of HK$20,000 in advance and 2 months’ rental deposit in the sum of HK$ 40,000) was given by Shirley Wong on behalf of the defendants to the plaintiff on 7 August 2017 upon the putative tenancy agreement was first signed by the 2^nd defendant and then signed by the plaintiff.  

(3)  The putative tenancy agreement signed by the parties on 7 August 2017 originally stated that “The Tenant shall pay the Rent in advance on the first day of each and every calendar month during the said term” but the word “first” was crossed and replaced by “15^th” and such revision was signed by the 2^nd defendant Abrar as confirmation.  

(4)  In the putative tenancy agreement, the plaintiff signed in the capacity of the Landlord and acknowledged the receipt of the Rental Deposit and 1^st month rental (which is an acknowledgement of immediate payment).

(5)  In the putative tenancy agreement, no company chop of the 1^st defendant appeared and only the 2^nd defendant Abrar signature appeared on it. 

16.  The Court noted that the plaintiff claims that he had accepted the offer including the post-dated cheque on 8 August 2017 and he relies on his WhatsApp records with Shirley Wong at the material times in support. 

17.  The plaintiff even argues, as the agreement signed on 7 August 2017 was final and concluded, any cancellation or amendment needed mutual written agreement.  

18.  Is it really the case?

19.  The plaintiff’s fundamental assertions are:-

(1)  He had accepted the defendants’ offer and confirmed in the morning, on 8^th August 2017; and

(2)  There were no communications between 11:52 am on 8^th August 2017 and 11:43 am on 13 August 2017 which departed from this position.

20.  The evidence before the Court at trial and Court’s findings of fact do not bear out any of these assertions.  The evidence was that the plaintiff had clearly not accepted the post-dated cheque, as can be seen from the communications set out in the Judgment from paragraphs 18-31, and the Court’s findings therein (see: also, paragraphs 46-61 of the Judgment). In fact, the WhatsApp messages on 13 August 2017 and 14 August 2017 that the plaintiff now relies upon in support of his allegation rebut his own arguments, and they are reproduced in Figure 1.

21.  These WhatsApp messages between the plaintiff and Shirley Wong on 13 August 2017 and 14 August 2017 are in pages 220 to 222 of the trial bundle and are also attached in the Affirmation by the plaintiff in support of the present application for leave to appeal.  

22.  On 13 August 2017 at about 11:43 am, the plaintiff and Shirley Wong had whatsapped each other.  This took place shortly before the 2^nd defendant informed Shirley Wong on the same day later in the afternoon that the Defendants decided to pull out of the deal (See para. 28 of the Judgment). 

(Please go to next page)

Figure 1

23.  On this occasion, Shirley Wong told the plaintiff that:-

(1)  She had reminded the 2^nd defendant to ensure sufficient funds on his current account as the plaintiff will deposit the “post-dated cheque” on the following day;

(2)  The 2^nd defendant raised with Shirley Wong to see if he could only rent 2-3 months instead of one year;

(3)  She was worried whether the 2^nd defendant would hand over 12 post-dated cheques for the monthly rent of HK$20,000;

(4)  She thought the 2^nd defendant was “a dangerous person”;

(5)  She then suggested that she could have told the existing tenant that the Premises was not yet rented out as the plaintiff had not yet signed the Termination of Tenancy Agreement; and

(6)  She will return the cheque of her commission to the plaintiff as she had not yet deposited this cheque given by the plaintiff as her commission.

24.  The plaintiff replied to Shirley Wong by WhatsApp on the same day and told her that her suggestions were unacceptable.  The plaintiff said tenancy agreement had to be signed properly (租約要簽好!), deposit received (訂收了) and it had to be done in accordance with the contract (按合同办事).  He said he needed a satisfactory reply otherwise he would complain to her company and also needed to get stamp duty done.

25.  Interestingly, on the next day on 14 August 2017, contrary to the terms in the putative tenancy agreement, which was signed by both parties on 7 August 2017, and the fact that plaintiff now claims that this putative tenancy agreement was conclusive and binding on both parties and cannot be cancelled or amended except with mutual written agreement, the plaintiff instructed Shirley Wong to:-

(1)  Wait till confirmation of receipt of funds by him before handover of the Premises to the tenant.  This was because the cheque of $60,000 was post-dated, it was only until 4 pm on 15 August 2017 could the plaintiff be confirmed whether the said post-dated cheque could be deposited into his account;

(2)  Get 12 post-dated cheques for the monthly rent of HK$20,000 from the tenant (defendants) “according to the contract”, before the handover of the Premises to the tenant on the following day on 15 August 2017; and

(3)  Amend the putative tenancy agreement as it was agreed previously that the unit will be rented in the name of a company.

26.  The above obviously flies in the face of the allegation by the plaintiff that the putative tenancy agreement signed by him and the 2^nd defendant was “conclusive” and “binding on both parties” especially when he insisted on getting the 12 post-dated cheques for the monthly rent from the tenant (defendants) which is contrary to the putative tenancy agreement which had a term that monthly rent was to be paid on every 15^th day of each month.

27.  Furthermore, the plaintiff instructed Shirley Wong to “amend” the agreement (之前說過租約用公司名，請收(sic) 改 (修改) ). 

28.  The above evidence drawn to the attention of the Court, not only does nothing to rebut the evidence enumerated by the Court in paragraphs 18 -31 of the Judgment, but serves to further support such evidence, as it shows clearly that the plaintiff had not accepted the defendants’ offer as depicted by the putative tenancy agreement.   

29.  Despite the putative tenancy agreement having been signed, the communications between Shirley Wong and Abrar (2^nd defendant) between 8^th and 13th August clearly showed that the plaintiff had not accepted Abrar’s terms.  And, even the agent Shirley Wong, who acted for both parties, thought on 13^th August 2017, that the defendants should provide the 12 post-dated cheques for the monthly rent despite the fact that it was contrary to the terms of the signed putative tenancy agreement.

30.  The law as to what constitutes a legally enforceable contract has been stated in paragraphs 41 and 42 in the Judgment and I would not repeat herein.  Suffice it to say that subjective thoughts of the parties are not to be taken into account by the Court in deciding whether there is a binding contract, on the contrary, the Court will look at the evidence on an objective perspective. 

31.  Also, as set out in the Judgment and also it is an agreed fact, Shirley Wong acted for both parties, the plaintiff and the defendants in this case.  In the circumstances, it is obvious that the “tenancy agreement” was neither conclusive nor binding as was found by the Court in the communications between Shirley Wong (who was acting for the plaintiff) and the defendants.  

32.  Even on 13 August 2017, Shirley Wong said the 2^nd defendant asked if the tenancy could be 2-3 months instead of one year as stated in the signed putative tenancy agreement.  This further indicates that there was no understanding of a concluded agreement.

33.  On the other hand, on 14 August 2017, a day after the 2^nd defendant Abrar informed Shirley Wong that he liked to cancel the deal, the plaintiff still asked for provision of 12 post-dated cheques for the monthly rent of HK$20,000 before handover of the Premises despite the putative tenancy agreement provided that payment of rental was to be done monthly by the 15^th day of every calendar month. 

34.  Also, as rightly pointed out by Ms Leung, the Solicitor for the defendants in her submissions that “there is no evidence showing that the plaintiff had informed Shirley Wong in the WhatsApp message that he had noticed that the cheque was post-dated despite the acknowledgement of immediate payment in the tenancy agreement when he signed it or he decided to accept these terms after he had got such notice.”  It was only after the Judgment was delivered that the plaintiff claims he had accepted post-dated cheque as “immediate payment” which he had acknowledged in the putative tenancy agreement.

35.  In fact, now in this application for leave to appeal, the plaintiff admitted that it was only on 8 August 2017 did he become aware the cheque of HK$60000 given to him by Shirley Wong on the previous day on 7 August 2017 was post-dated, when he was informed by Shirley Wong by WhatsApp.

36.  It is pertinent to note that the plaintiff in the present application hearing, said if he knew of the findings in the Judgment, he would have sued Shirley Wong for her advice given to the 2nd defendant that it was still open to the plaintiff to look for other tenants as the 2nd defendant had given the plaintiff a post-dated cheque of HK$60,000.  

37.  The Court notes that on the one hand, the plaintiff said “the third party was a professional and licensed estate agent who represented both parties to final (sic) and conclude the tenancy agreement dated 7^th August 2017”[6], on the other hand, the plaintiff now argues that this was “just Shirley’s personal advice to her client  i.e. defendants on how to protect their interest” [7] and “the Plaintiff did not instruct Shirley and own (sic) (owe) any legal liability for her personal opinion to her client” [8].  This argument clearly ignored the fact that Shirley Wong was also his agent.  The plaintiff could not simply shift everything that was against his case by claiming that he did not instruct Shirley to do so and all were her “personal advice or opinion”.  The plaintiff cannot have his cake and eat it.

38.  The Court would like to refer to paragraphs 51 and 52 of the Judgment in this respect and would not repeat herein in response to this argument of the plaintiff.  

39.  The plaintiff (applicant) could not show that the Court’s findings had no reasonable basis nor could he show that there was an error of law.  In the circumstances, the plaintiff (applicant) has not been able to demonstrate that there is any reasonable chance of success in an appeal on this set of Grounds.  I will now proceed to the next set of Grounds. 

Ground 2 (paragraphs 6 to 9 of the Grounds of Appeal)

40.  Ground 2 is based on the premise that “it was irrelevant and unreasonable for the Court to find for the Defendants that there was an uncertainty as to whether the plaintiff could deliver vacant possession by 15 August 2017.”

41.  In gist, the plaintiff argues that:-

(1)  what had happened before and after the signing of the putative tenancy agreement, helps to demonstrate the knowledge of the defendants that vacant possession could be delivered.  The plaintiff said he had informed Shirley Wong about “confirmation on the termination of the existing lease” so that the defendants “knew clearly that the existing tenant of the Premise was willing to move out and vacate the premise in the (sic) mid-August 2017 for their use because the plaintiff has informed and re-confirmed with the 3^rd party i.e. Shirley at 1:12 pm on the 25^th July 2017 ”[9]； 

(2)  “Each parties (sic) has to take some risk under any legal agreement.  The terms and condition of the tenancy agreement provide legal remedies of the any parties (sic) in case that the other party breached it.  There is no legal right for the defendants to withdraw the offer after its acceptance without paying remedies to the Plaintiff.  The third party was a professional and licensed estate agent who represented both parties to final (sic) and conclude the tenancy agreement dated 7^th August 2017…”[10] ；and

(3)  “The defendants were well experienced in doing business and renting properties for many years in Hong Kong.  Their defence that they believed the putative tenancy agreement was not a binding document and could withdraw their offer at any time they like and have no contractual liability to compensate the Plaintiff were “unreasonable and illogical as per the normal and common practice”.  [11]

42.  Certainly, as it has been argued by the plaintiff at trial, the defendants could have sued the plaintiff if he failed to deliver vacant possession in due course, which is by 15 August 2017 in this case, and can claim compensation, but that is not good enough in this case.  The Court had borne in mind that prospective tenants look for premises for occupation for their businesses and often their losses might exceed losses claimable by legal action, such as client goodwill and an order for specific performance is of no use when there is a sitting tenant.  Such an order would in any event take time to procure by legal action, and such time lost could mean losses which cannot be recovered.  Thus, it is not unreasonable for someone in the position of the 2^nd defendant to be cautious about getting actual possession on commencement of the intended tenancy.   But the Court’s finding that the defendants would need certainty that the premises were available was another reason supporting the finding already made that there was no concluded contract of tenancy (see: paragraphs 49 and 53 of the Judgement).  This set of Grounds do not assist the plaintiff.  I will now proceed to the next set of Grounds.

Ground 3 (paragraphs 10 to 13 of the Grounds of Appeal)

43.  Under Ground 3, insofar as I can understand his arguments, the plaintiff appears to say that the post-dated cheque was irrelevant or not an essential issue to hinder the formation of a final and binding agreement.  Because, despite a post-dated cheque for deposit was given, the defendants did promise the agent Shirley Wong subsequently that funds would be transferred to the plaintiff’s account if plaintiff was unhappy.  The plaintiff says this shows that this was different from their defence that they did not intend to form an immediately binding and final agreement with the plaintiff by giving a post-dated cheque. The plaintiff says the defence of the defendants was contradictory to their actual promise and instruction to the agent who represent them to finalise the agreement with the plaintiff.

44.  In gist, using his own language, the plaintiff’s arguments are:-

(1)  “Refers to the message between the defendants and their agent (TB at pp. 250-268) show clearly that both parties has (sic) a clear intention to arrive a confirm (sic) agreement in respect that it is a provisional or final agreement”; [12]

(2)  “At 9:07 pm of (sic) the 4th August 2017, Shirley was instructed by the defendant to confirm the agreement on Monday, 7th August 2017 as all the terms and condition has been verbally agreed by both parties. The verbally (sic) agreement was reconfirmed and accepted by both parties at about 10:30 am on the 7^th August 2017.  Hence, there was a conclusive verbal contract between the parties which was witness (sic) by the 3^rd party.” [13]

(3)  “The defendants signed the agreement with Shirley Wong at about 5 pm in their office on 7 August 2017.  But they failed to transfer the down payment to plaintiff’s bank account.  They just gave her a post-dated cheque as payment and instructed her to finalise the deal with the plaintiff”; [14]

(4)   Later, “Shirley Wong informed the (2^nd) defendant at 6:54 pm that she was worried that the plaintiff would not sign the agreement as the defendant failed to pay the down payment immediately as agreed.  However, the (2^nd) defendant has confirmed with Shirley Wong immediately that he would transfer funds to the plaintiff bank account if he was not happy with the post-dated cheque”[15]; and

(5)  “Hence the post-dated cheque was irrelevant or not essential issue to hinder the forming a final and binding agreement.  It was different from their defence that they did not intent to form an immediately binding and final agreement with plaintiff by giving a post-dated cheque.  The defence of the defendants was contradicting to their actual promise and instruction to the agent who represent them to finalise the agreement with the plaintiff.”  [16]

45.  It is interesting to note that the plaintiff now even attempts (at paragraph 11 of his grounds of appeal) to argue that “there was a verbal agreement which was reconfirmed and accepted by both parties in the morning on 7^th August 2017” before the putative tenancy agreement was signed later in the evening and night on 7^th August 2017 by the defendants and the plaintiff respectively.  First of all, this evidence of verbal agreement was never adduced at trial.  It cannot on appeal, be admitted as new evidence, unless the conditions in the well-established rule in Ladd v Marshall [1954] 1 WLR 1489 are met.  But the conditions are not met, since that evidence must have been available at the trial.  Also, the plaintiff may have forgotten that all along the parties in negotiation including in the WhatsApp message between Shirley Wong and the 2^nd defendant Abrar on 4 August 2017 (which is now relied upon by the plaintiff in support of his application for leave to appeal), the defendants were asked to “prepare rental checks for the whole period”[17] and yet, the putative tenancy agreement signed on 7 August 2017 by the parties did not have such term and instead rental was only to be paid on the 15^th day of each month. 

46.  One thing has to be made clear about the findings of the Court. The Court found that the signing of the putative agreement and the inclusion of the post-dated cheque was an offer by the defendants, which if accepted on exactly the same terms would have created a binding contract (see: paragraph 48 of the Judgment).  But the evidence found by the Court clearly showed that this did not happen (see: paragraphs 51-61 of the Judgment).  The common law requires a clear offer and acceptance from objective facts before it could infer that the parties had a clear intention to enter into a legally binding relationship.  The Court found that did not happen on the evidence presented.

47.  As Ms Leung, Solicitor for the defendants, pointed out in her submissions, “The 2^nd Defendant did make such statement [18] on 7 August 2017 (to Shirley Wong) at 6:54 pm (while she was on the way to take the putative tenancy agreement for the plaintiff to sign on that night)”.  “However, the Plaintiff made his decision through Shirley Wong not to be legally bound by the putative agreement and insisted on his freedom to rent the premises to other potential tenant unless and until the 1^st defendant had made actual payment of the deposit.  It was open to the 1^st defendant to decide whether to make such transfer or to take the risk that it might lose the premises.  The 2^nd defendant kept saying that he should think about it before he had withdrawn the offer.” [19]  At the end, it remains a post-dated cheque and no immediate payment of HK$60,000 was ever made.  Action speaks louder than words.  

48.  As set out in the Judgment, by signing the tenancy agreement and handing over the cheque intended for the plaintiff, the defendants were clearly making an offer to the plaintiff.  If it had been accepted upon its precise terms, there would have been a concluded contract. 

49.  But it must be noted that the cheque which was handed over by the 2^nd defendant to Shirley Wong, was a post-dated cheque and that represented a departure from the terms of putative tenancy agreement.  The 2^nd defendant had explained to Shirley Wong why he had issued a post-dated cheque, different to the terms to the tenancy agreement that was signed.  The terms have been changed so that the plaintiff would not have his Deposit and the first month’s rent paid immediately but could only be paid on 13 August 2017 upon confirmation of availability of vacant possession of the Premises to be let, despite what was written into the terms of the putative tenancy agreement.  Merely signing the tenancy would not have been sufficient to signify acceptance in light of this change of terms.  The handing over of the signed tenancy agreement by the defendants to Shirley Wong was clearly attached with a condition that the acceptance must mean that the plaintiff would have to acknowledge that indeed he accepted the post-dated cheque, contrary to the terms of the tenancy agreement.  

50.  Suffice it to say that, as rightly pointed out by Ms Leung, Solicitor for the defendants, an intention to arrive at an agreement at the beginning is not good enough.  Mere signing on the putative tenancy agreement is not sufficient.  The offeree should unequivocally express his acceptance of an offer in all of its aspects.  Complaining about the failure of Shirley Wong to remind him of the post-dated cheque, on the following day after he had signed the putative tenancy agreement well indicates that the plaintiff would not have signed the said agreement should he know that the cheque was post-dated, it also indicated that he insisted on having immediate payment of HK$60,000 (which consists of two months’ rental deposit and one month payment of rental in advance) instead of post-dated cheque in order to give the putative tenancy agreement immediate legal binding effect.

51.  In the circumstances, the plaintiff (applicant) cannot show that the findings of the Court had no reasonable basis on this set of his Grounds. I will now proceed to deal with the next set.

Ground 4 (paragraph 14 of the grounds of appeal)

52.  Under Ground 4, the plaintiff says that the defendants breached the agreement deliberately as the defendants revealed later that they would only rent the Premises for 3 to 5 months.  The delivery of vacant possession or handover of the Premises was only used by the defendants as an excuse to “cover their own mistakes”.

53.  In gist, the plaintiff argues that:-

(1)  “If the defendants wanted to ensure in getting the premise on or before the handover date, they could easily negotiate with the existing tenant through their agent or the plaintiff so that the tenant would agree to move out immediately.  This was a more practical way to solve their worries.”;

(2)  “But the defendants did not request which showed the inconsistent (sic) with their defense. Furthermore, it was reveal (sic) by the whatsapp message at 5:48 pm on 13th August 2017 that Shirley complained that the defendants could not use the premise (sic) long and then decided to cancel the tenancy.  It was confirmed by that defendants’ replied message that they could only use the premise 3-5 months max which was likely the main reason for the to breach the agreement deliberately”;

(3)  “It have (sic) a great difference from their previous intention to confirm one year tenancy agreement with the plaintiff which amounted a possible loss of 7-9 months rent to HKD$140,000 - $180,000 under the agreement;” and

(4)  Thus, “it has explained exactly why the defendant decided to breach the agreement deliberately so as to save this likely loss and cover their own mistakes.”

(5)  “Despite the advice and warning from the 3^rd party, defendants decided not to make any compensation to the Plaintiff for their own mistakes by stopping the payment of the post-dated cheque and breaching the agreement.  Their defense that the Plaintiff would give trouble was obviously unsound excuse without any reasonable supporting (sic).  The Judge’s failed (sic) to consider this important evidence and points.  The judge’s sympathy and trust on the defendant was betrayed.”

54.  This argument ignores the fact or rather demonstrates that the plaintiff failed to appreciate, that it is the landlord’s duty to ensure vacant possession could be duly delivered.  An existing or outgoing tenant would not deal with a potential tenant or any third party unless the latter was authorized by the landlord.

55.  Also, as aforesaid, the offer had not been accepted by the plaintiff as he insisted of getting the deposit paid immediately by bank account transfer instead of accepting the post-dated cheque unequivocally.

56.  Solicitors for the defendants rightly pointed out that, “before the offer had been accepted by the plaintiff, the defendants were free to withdraw it at any time.”[20]

57.  In the submissions made by the Solicitors for the defendants, it was pointed out that “what the 2^nd defendant told Shirley Wong in the whatsapp message at 5:48 pm on 13^th August 2017 is irrelevant. Because by that time, the offer had already been withdrawn.  It can at most be seen as one of the reasons why the defendants decided to withdraw the offer”[21]. I agree with this submission.

58.  It is interesting that in this regard, the plaintiff seems to argue that the Third Party (Shirley Wong) who was acting for both parties, has the authority to give advice and warning to the defendants (to compensate the plaintiff). On the other hand, the plaintiff argues that he owes no legal liability for the advice given by the Third Party (Shirley Wong) that it was open to the plaintiff to look for alternative tenants when post-dated cheque of HK$60,000 was given until and unless an immediate bank transfer was made by the defendants to the plaintiff.  Not only was this not argued at trial but these are mutually contradictory propositions.  One cannot have one’s cake and eat it.

59.  In the circumstances, the plaintiff has failed to show that the findings of the Court had no reasonable basis, and thus fails to demonstrate that he has a reasonable case on appeal on this set his Grounds.  I will now proceed to the next and final, set of Grounds.

Ground 5 (paragraph 16 of the grounds of appeal)

60.  In Ground 5, the plaintiff says, on 15 August 2017, the 2^nd defendant agreed to take the Premises and “reconfirm to pay” two days after the 2^nd defendant informed the agent Shirley Wong via What’s App on 13 August 2017 that he would cancel the deal.

61.  In gist, in the plaintiff’s language, he argues that:-

“As Defendant’s agent, Shirley have (sic) explained in vain to the defendants that the disputed tenancy agreement was concluded and binding. She also advised their likely liability (Trial Bundle pp. 280-293). The defendants clearly understood and agreed to take the place and re-confirm to pay at 2:26 pm of 15 August 2017 (Trial Bundle at p. 293). But, they breached again their promise which showed their dishonest 9sic). It also reflected that they were hesitating and calculating their likely cost & risk.”

62.  As I had repeated many times, whether an agreement was concluded and binding has to be assessed from an objective point of view, not by the subjective intention of a party or his agent. 

63.  Also, by 15 August 2017, the 2^nd defendant had already informed Shirley Wong that he liked “to cancel the deal” which took place two days before on 13 August 2017.  What Shirley Wong said on 15 August 2017 is no longer relevant.  She was at most making a last-ditched attempt to get the deal resumed. 

DISPOSITION

64.  In order to get the Court to grant leave to appeal, the grounds raised would have to satisfy the test for an application for leave to appeal to be granted, namely, such point(s) raised in the intended appeal would have reasonable prospects of success on appeal.

65.  Having tried my best to understand the plaintiff’s written application for leave to appeal and having heard his oral arguments, I regret that I must conclude that the plaintiff’s intended appeal does not have any real prospect of success and, accordingly, I dismiss, as I must, the plaintiff’s application for leave to appeal with an order of costs nisi of the application to the defendants, to be taxed on the District Court Scale if not agreed, such order nisi will become absolute within 14 days of this Decision if no application for variation is made.

CONCLUDING NOTE

66.  When things seem to be getting better, a sudden surge of the coronavirus, now in its 3^rd wave, is inflicted upon Hong Kong.  Social distancing measures are further tightened with the result that judiciary acted swiftly by imposing measures in line with the Government policy to combat for the spread of the virus in the public interest.  As a result, this judgment could only be made available to the parties now despite its readiness for delivery some time before handing down today.  We are painfully reminded, yet again, that whilst Man proposes, it is God who finally disposes.  May all concerned be blessed with Good Health and Happiness for now and for the times ahead!