CHING YIP INVESTMENT LTD v. FAMEWELL HOLDINGS LTD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. The Plaintiff's claim against the Defendant is for damages for breach of a tenancy agreement.

2. Final and interlocutory judgment on liability was given on 5th December 1995 with damages to be assessed.

3. The tenancy agreement in question was dated 9.9.1994 ("the Tenancy Agreement") whereby the Plaintiff let to the Defendant the premises known as Workshop Nos. 1 & 40 ("the Workshops") on the 2nd Floor of Sino Industrial Plaza, No. 9 Kai Chung Road, Kowloon together with Carpark No. P10 on the Basement of the same building ("the Carpark") for the term of 1 year commencing on 1.9.1994 at the respective monthly rentals of $66,000 and $3,200, exclusive of rates and management fees.

4. Under the Tenancy Agreement, the Defendant was granted a rent free period in respect of the Workshops for the period between 1st and 15th September 1994, during which the rent for the Carpark and the rates and management fees remained payable.

5. On 12.9.1994, the Defendant gave oral notice of termination of the Tenancy Agreement, which repudiation was accepted by the Plaintiff on 14.10.1994. The Defendant had paid no rent nor management fees nor rates under the Tenancy Agreement.

6. The Plaintiff re-advertised the Workshops and Carpark for letting. Through the service of a real estate agency, the Workshops and the Carpark were re-let to another tenant for a term of 6 years at the respective monthly rentals of $60,000 and $3,200, also exclusive of rates and management fees, to commence on 7.12.1994. The new tenant was granted a rent free period up to 28.2.1995 under the new tenancy agreement.

7. The Defendant is therefore liable for arrears of rent for the Workshops from 16.9.94 to 13.10.94; arrears of rent for the Carpark from 1.9.94 to 13.10.94; loss of rentals for the Workshops and the Carpark from 14.10.94 to 28.2.95; the difference in rent for the Workshops under the 2 tenancy agreements from 1.3.95 to 31.8.95; and also management fees and rates from 1.9.94 to 28.2.95.

8. The Defendant is also liable for the Plaintiff's costs of re-advertising the premises for letting, being the sum of $1,750, and the service charge of the estate agent in concluding the new tenancy agreement, being the sum of $30,000.

9. Before the term of the Defendant's tenancy agreement commenced, renovation work was carried out to the Workshops at the Defendant's request and through the Plaintiff's arrangement. The costs of the work was $25,000 and was paid by the Plaintiff. When the Tenancy Agreement was terminated, the Plaintiff incurred $35,000 for the purpose of reinstating the premises. The Defendant is liable for the total costs of $60,000, less $30,000 which it had paid to the Plaintiff as security deposit for the renovation work, being the balance of $30,000.

10. In addition, the Plaintiff had also incurred legal costs in the preparation, execution and registration of the Tenancy Agreement. The solicitor's bill came up to $13,470.50, of which $2,800 and $60 are the costs for preparing and registering a statutory declaration of a Miss Lam Kim Fei. The statutory declaration was to give Miss Lam the necessary authority to execute tenancy agreement on behalf of the Plaintiff, since she was not a director of the Plaintiff. The costs for the statutory declaration are therefore not wasted costs and the Defendant should not be liable for them as the Plaintiff can and did rely on the document in the execution of future tenancy agreements.

11. In the premises, the amount of damages to be recovered by the Plaintiff from the Defendant is as follows:-

12. Accordingly, there will be judgment against the Defendant in the sum of $529,985.50, together with interest thereon at the rate of 2% per month from the date of writ to date of this judgment, pursuant to clause 7(1) of the Tenancy Agreement, and thereafter at judgment rate until full payment.

13. The Plaintiff is also awarded the costs of the action (but excluding the O.14 application for which an order for costs had been made by Master O'Donnell) on a solicitors-client basis, based on the terms of the Tenancy Agreement. There will also be a certificate for counsel.