WELLINGTON INVESTMENT CO LTD v. HONG KONG INSTITUTE OF LANGUAGES LTD

HCA 1813/2025

[2026] HKCFI 4392

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1813 OF 2025

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BETWEEN

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D E C I S I O N

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Introduction and Background

1.  The Plaintiff (“P”) is and was the registered owner of the 2^nd Floor (“1^st Premises”), Rooms 301 and 302 on the 3^rd Floor (“2^nd Premises”), Room 502 on the 5^th Floor (“3^rd Premises”) and 6^th Floor (“4^th Premises”) of Wellington Plaza, Nos. 56-58 Wellington Street (collectively, “the Premises”).

2.  The Premises were let by P, as landlord, to the Defendant (“D”), as tenant, by four tenancy agreements all dated 14 September 2022 (collectively, “the Agreements”) with a term of 3 years from 1 September 2022 to 31 August 2025. The rent (exclusive of rates) was HK$79,086, HK$75,054, HK$27,930 and HK$58,884 per month for the 1^st Premises, 2^nd Premises, 3^rd Premises and 4^th Premises respectively.

3.  Prior to the Agreements, P had let the Premises to D for also a term of 3 years in 2019 (“the 2019 Agreements”) and D had been running a French kindergarten and children’s courses at the Premises. According to D’s evidence and submissions (but this was not pleaded), the 2019 Agreements and the Agreements were entered into as part of an agreement on “3+3+3 years lease” reached in 2019 with Dr Samson Sun where for: (1) the first 3 years, 2019-2022, rent was fixed at HK$38 per square foot; (2) the second 3 years, 2022-2025, rent was fixed at HK$42 per square foot; and (3) the last 3 years, 2025-2028, rent was fixed at market rate.

4.  P’s pleaded case is that D has failed and/or refused to pay the rent of the Premises since around June 2024. By letter dated 20 June 2025, P terminated the Agreements, demanded D to vacate the Premises and pay the sum of HK$2,101,008.40 being the then outstanding sum (after forfeiting the rental deposits).

5.  D’s pleaded case (the Defence and Counterclaim filed on 12 December 2025 (“D&CC”) was filed when D was still legally represented) is that:

(1) D had continued to pay rent until at least September 2024;

(2) D has paid rent totalling HK$744,640 from September 2025 to December 2025; and

(3) The tenant of the Premises has been varied from D to Hong Kong Kids Academy (Central) Limited (“HKKAC”) with effect from 1 October 2025.

6.  In D’s Counterclaim, it claims that:

(1) P has no right to forfeit the rental deposit and seeks payment of HK$481,908 (the rental deposit) with interest;

(2) A declaration should be granted that D is no longer the tenant with effect from 1 October 2025; and

(3) Damages for breach of contract to be assessed for “wrongful acts and omissions of P” and “unjustified increase of rent by P as compared to other tenants at Wellington Plaza”.

7.  By Summons dated 9 February 2026 (“the Summons”), P seeks:

(1) To strike out §§13, 18-22 of D&CC under O.18, r.19 of the Rules of High Court (“RHC”); and

(2) Summary judgment on part of P’s claim under O.14, r.1 of RHC, namely vacant possession of the Premises to be delivered to P, the sum of HK$1,657,663.14 (after taking into account the rental deposit and various payments by D), mesne profits until vacant possession is given, interests and costs.

8.  The following affirmations have been filed in relation to the Summons:

(1) 1^st Affirmation of Sun Dai Hoe Harold (“Harold”) dated 6 February 2026 in support;

(2) Affirmation of Chasset Abadie Dominique Berthe dated 5 March 2026 (“Chasset’s Affirmation”) and Affidavit of Andrew Nicholas Hart dated 6 March 2026 in opposition; and

(3) 2^nd Affirmation of Harold dated 1 April 2026 in reply.

9.  At the hearing of the Summons, Mr Suen, counsel, appeared for P and Ms Chasset, a director of D, appeared on behalf of D.

Applicable Principles

10.  The applicable principles for summary judgment are well-established. The defendant has the burden to satisfy the court that he has a real or bona fide defence (i.e. there are triable issues) or there ought for some reason to be a trial of the plaintiff’s claim. The defendant must satisfy the Court that his evidence is capable of being believed and that on the basis of such evidence, there is a fair or reasonable probability of the defendant having a real or bona fide defence. In considering whether there are triable issues, the court will not take the defence on its face value but test it against the evidence disclosed in the affidavit including matters such as contemporaneous documents, whether the alleged defence is inconsistent with the defence previously put forward or whether the defence is only recently raised despite the opportunity given to the defendant to respond earlier. See Hong Kong Civil Procedure 2026, Vol.1, §14/4/9A.

11.  Furthermore, where a defendant has already filed a defence, in opposition to a summary judgment application, the defendant cannot rely on a case not pleaded in the defence: see Link Properties Ltd v 1968 Ltd [2025] 5 HKC 705 per H Au Yeung J at §§13-26.

12.  As for the applicable principles for a strike-out application under O.18, r.19 of RHC, these are also trite and include the following:

(1) It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule. There should not be any trial upon affidavit. Disputed facts are to be taken in favour of the party sought to be struck out;

(2) Nor should the court decide difficult points of law in striking out proceedings. The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out. If the court does not think the matter to be clear beyond doubt or if it fails to be satisfied that there is no reasonable cause of action or that the proceedings are frivolous or vexatious, then, there should be no striking out;

(3) Where the legal viability of the cause of action is sensitive to the facts, an order to strike out should not be made;

(4) The mere fact that the case is weak and not likely to succeed is no ground for striking it out;

(5) It is for the party seeking to strike out an indorsement on a writ or pleading to demonstrate that the case is a plain and obvious one in which the other party’s claim is bound to fail;

(6) This rule also powers the court to amend the indorsement on any writ or any pleading. If a statement of claim does not disclose the cause of action relied on, an opportunity to amend may be given, even though the formulation of the amendment is not before the court. However, unless there is reason to believe that the case can be improved by amendment, leave will not be given.

See Hong Kong Civil Procedure 2026, Vol.1, §18/19/4.

Discussion

Re: summary judgment application

13.  None of the pleaded defence raises any triable issue or defence to P’s claim for vacant possession, claim for arrears in rent and mesne profits.

14.  There is no real dispute by D that rent was outstanding to P. At the hearing, Ms Chasset acknowledged that between October 2024 and August 2025 rent was in arrears. Accordingly, P has a right to terminate the Agreements by reason of the failure to pay rent. See clause 4(a) of the Agreements which provides: “If and whenever any part of the Rent hereby reserved shall be in arrear for 15 days whether the same shall have been legally demanded or not or if any term, condition or stipulation on the Tenant’s part herein contained shall not be performed or observed….then and in any of the said cases it shall be lawful for the Landlord at any time thereafter to re-enter upon the Premises or any part thereof in the name of the whole and thereupon the tenancy hereby created shall absolutely determine but without prejudice to the right of action of the Landlord in respect of any breach of the Tenant’s term, conditions or stipulations herein contained”. P was therefore plainly entitled to terminate the Agreements which it did by letter on 20 June 2025.

15.  In any event, the term of the Agreements was only until 31 August 2025. Whilst parties attempted to negotiate a new lease, undisputedly it led to no agreement to lease the Premises to D. P was entitled not to consider granting a new lease to D or any of its related parties when the rent remained in arrears and did not agree to repayment by instalments by D. The without prejudice email dated 21 July 2025 relied upon by D for rent for “new lease” were expressly stated to be without prejudice and “subject to contract”. Besides, even on D’s pleaded case, any new tenancy agreement would be made with HKKAC and D is no longer the tenant of the Premises from 1 October 2025. As between P and D, it is not arguable that there remain any landlord and tenancy relationship beyond the term of the Agreements which would entitle D to remain on the Premises.

16.  With the termination of the Agreements by P and, in any event, upon the end of the term of the Agreements, there is no legal basis for D to remain in the Premises. Notwithstanding the return of the 4^th Premises on 3 March 2026, D remains in occupation of the 1^st, 2^nd and 3^rd Premises. P is entitled to seek an order for vacant possession of the 1^st, 2^nd and 3^rd Premises.

17.  As for the claim for outstanding rent and mesne profits, the pleaded defence also raises no bona fide defence or triable issues. As mentioned, there is no dispute that rent was outstanding. Whilst some payments were made from September to December 2025, January and February 2026, which were after the term of the tenancy had expired, this was not sufficient to wholly satisfy the outstanding rate and rates. The sums paid, confirmed by Ms Chasset at the hearing to have been paid on behalf of D, have now been taken into account in P’s claim for arrears against D. P confirmed that it now claims the sum of HK$877,363.14 as outstanding arrears and interest. P should be entitled to judgment of that sum.

18.  As for the pleaded defence of alleged “variation” of the tenant, this is a bare assertion not supported by any contemporaneous document. The only matter that had been relied upon was the acceptance of rent by P from HKKAC, but with the confirmation that the payments were made on behalf of D, this cannot support its case on variation. In any event, any alleged variation of parties could not affect the contractual obligations incurred by D under the Agreements prior to 1 October 2025.

19.  I now turn to various unpleaded matters. In Chasset’s Affirmation, it was asserted that the Agreements were entered into “under duress” as a result of “illegitimate pressure” by P “exploiting D’s economic vulnerability”. In essence, it was said that when the time came for lease renewal in May-June 2022, P insisted on the agreed rate of HK$42 per square foot or if D wished a lower rent then it would have to give up the “3+3” option and accept a 6-month redevelopment clause which D could not accept so D had no choice but to accept and sign the Agreements at HK$42 per square foot. The reason why D had no choice was because it is said that operating a kindergarten required complex and lengthy licensing so D could not simply relocate to another premises. Furthermore, it was said that the directors of D had invested HK$10M for the renovations, had obtained Government-back loans of over HK$9M and D was suffering from the COVID-related difficulties which is the reason they were forced to sign the Agreements but under protest.

20.  The alleged duress, not being a pleaded defence, is not a matter which can be relied. Only at the hearing of the Summons (and not even in D’s two sets of submissions), to answer this point, Ms Chasset first indicated D’s wish to amend its Defence and made an oral application to do so. I did not accede to the oral application as there was no proper application by Summons nor even a draft amendment placed before me for my consideration. It is well-established that the rules and procedures of the Court apply equally to litigants acting in person: see AXA China Region Insurance Company Limited v Leong Fong Cheng (unrep) CACV 113/2016, 28 October 2016 at §§53 and 55.

21.  In any event, in my view, the alleged defence of duress is devoid of merits. What was asserted in Chasset’s Affirmation, remain bare assertions unsupported by contemporaneous documents to evidence any complaint that the Agreements were entered into and the payment of rent were “under protest”. On the other hand, it is contrary to the acceptance that rent was in arrears and outstanding. Even if I were to accept the bare assertions, at its highest, what has been asserted amounts to no more than ordinary commercial pressure but cannot amount to illegitimate pressure particularly all that P was insisting was to rely on its contractual rights: see Chitty on Contracts, Vol.1, 35^th Edn, §11-010. Even on D’s case the “3+3+3 year lease” agreement was only for rent at $42 per square foot which was the rent under the Agreements. Besides, even if there was any duress, D has plainly lost the right to rescind the Agreements when it has clearly and unequivocally ratified the Agreements by continuing to occupy the Premises and paying the agreed rent on its case until September 2024 and not taking any actions to rescind the Agreements prior to these proceedings. I do not accept the mere assertion that D was too busy or were too focused on running the kindergarten to take any legal action.

22.  In any event, Ms Chasset clarified at the hearing that she was not seeking to rescind the Agreements (notwithstanding that was what was sought in Chasset’s Affirmation) but D was seeking a review of the terms of the Agreements to a “fairer rental rate” and to seek rent already paid to be “recalculated at this fair rent and the overpaid amount refunded”. However, in the absence of legal authorities submitted, I am not satisfied that there is any legal basis for this court to rewrite the terms of the Agreements which has already been terminated and come to an end.

23.  At the hearing, Ms Chasset also relied on the “3+3+3 years lease”, the 2019 Agreements and clause 11 of the Agreements that allows D as tenant to request P to grant a further term of three year. Again, this is not a pleaded defence nor were these earlier agreements pleaded. In any event, it does not assist D because clause 11 of the Agreements expressly provides that it is subject to “there shall not at the time of such request be any existing breach of non-observance of any of the terms and stipulations on the part of the Tenant herein”. As mentioned, it is admitted that D was in arrear of rents at least by October 2024. D has no right to demand a further term of 3 years after the Agreements and in fact, no new tenancy was entered into between P and D.

24.  As for P’s entitlement to interest at 8% for outstanding arrears of rent and rates, this is as provided for in clause 8 of the Agreements and there is no arguable basis to contest P’s contractual entitlement.

25.  As for mesne profits, given there was no dispute on the rental values of the Premises by D and the mesne profits have been calculated based on the rental value, and as there is no legal basis for D to remain in possession after 20 June 2025, D must pay mesne profit for its unlawful occupation of the Premises.

26.  Accordingly, I would grant final judgment to P that: (1) D do give to P vacant possession of the 1^st Premises, 2^nd Premises and 3^rd Premises within 28 days from the date of judgment; (2) D shall pay to P: (a) the sum of HK$877,363.14; (b) mesne profits to P at the rate of HK$51,000, HK$51,000, HK$19,250 and HK$39,000 for the 1^st Premises, 2^nd Premises, 3^rd Premises and 4^th Premises respectively from 20 June 2025 until vacant possession is given save for the 4^th Premises which should be from 20 June 2025 until 3 March 2026; (3) pre-judgment interest at 1% above HSBC prime rate in respect of (2)(a) and (b) until date of judgment and thereafter at judgment rate until payment in full.

Re: strike-out application

27.  I am of the view that D’s Counterclaim should be struck out in its entirety.

28.  In respect of the claim for the rental deposit and interest, under clause 4(d) of the Agreements, in the event of any breach, non-observance or non-performance by D of the Agreements, P is entitled to deduct from the deposit the monetary loss incurred by P in consequence of the breach etc. Even in the scenario when D is not in breach, which is not the case as already mentioned above, that clause expressly states that the deposit is to be refunded without interest within 14 days after the expiration or determination of the Agreements and delivery of vacant possession of the Premises. There is therefore no basis to claim interest. It is plain and obvious that this claim is bound to fail.

29.  In respect of the claim for a declaration, it is premised on the unmeritorious claim that there has been a variation of the tenant. There is therefore no reasonable cause of action to support seeking such a declaration. It is plain and obvious that this claim is also bound to fail.

30.  As for the claim that P has caused loss and damage to D by “the wrongful acts and omissions of P in respect of the Premises” and “the unjustified increase of rent by P without the agreement of D”, no sufficient particulars have been pleaded as to what were the alleged acts and omissions and how and on what basis they are wrongful. Only from the Bar Table, Ms Chasset submitted that D’s legal representatives had intended to plead the alleged duress in forcing D to execute the Agreements on those terms when the contractual rent was divorced from market rate, and this was what was intended by the words “unjustified increase of rent” and the claim for damages for breach of contract. Even so, it is clear that there is no sufficient particulars pleaded to support such a claim and how and what loss and damages had been caused as a result of the alleged duress. A claim of duress must be specifically and carefully pleaded. It should contain full particulars of the facts and circumstances relied upon as to where, when, by whom, over whom, and in what way duress was exercised. See Hong Kong Civil Procedure 2026, Vol.1, §18/8/12. As it is currently pleaded, the alleged duress claim is wholly unmeritorious and is bound to fail. For the reasons already discussed above in relation to the lack of merits of the alleged defence of duress, I also take the view that any claim based on duress could not be improved by any amendments and is bound to fail.

31.  Accordingly, I will order D’s counterclaim be struck out.

Costs

32.  I see no reason why costs should not follow the event. I will therefore order D to pay P’s costs of and occasioned by the Summons, including costs of this action, to be taxed if not agreed.