THE WORLD REALTY LTD v. BEIJING INVESTMENT LTD

HCA3557/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3557 OF 2003

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J U D G M E N T

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1.  This is an assessment of damages following an order that I issued on 13 September 2004, when the parties came before me on a disputed Order 14 summons.  Those proceedings resulted in an interlocutory judgment against the defendant for damages to be assessed in relation to two tenancy agreements that had been breached by the defendant.  A brief summary of the background is pertinent for consideration of today’s application. 

2.  Before I embark on providing an overview of the factual matrix of this case, it should be mentioned that the defendant had not participated in these proceedings since the Order 14 hearing.  I am satisfied on the affirmation of service filed that the defendant should be fully apprised of today’s hearing.  The court has waited some 20 minutes for the appearance of the defendant.  In the event, no one from the defence attended.

3.  The plaintiff, the World Realty Limited, was at all material times the registered owner of premises known as all those suites 1001 to 3 on the 10th Floor of Chinachem Hollywood Centre at Hollywood Road, Hong Kong.  Pursuant to the first tenancy agreement, the defendant entered into possession of those premises for a term of one year, one month and three days commencing on 19 April 2001.  That tenancy agreement expired by effluxion of time on 21 May 2002.  The reserve rental was $34,900.80 per month, exclusive of rates and management fees, which under the first tenancy agreement formed the continuing obligations of the defendant during the tenure.

4.  A second tenancy agreement came into being when the plaintiff let the premises to the defendant for a renewed two-year term starting on 22 May 2002.  That tenancy provided for expiry on 21 May 2004.  The monthly rental was slightly reduced to $34,372 per month, exclusive of rates and management fees.

5.  I do not propose, nor do I think it is necessary, to quote the relevant clauses governing the defendant’s obligations in either of those tenancy agreements.  Suffice it to say that I am aware of the relevant provisions in the tenancy agreements and that I have read them.  It is important to note also, and this forms one of the heads of claim of the plaintiff under both tenancy agreements, that interest was payable for late or non payment of rent, management fees and other outgoings at the rate of 3.5 per cent per month.  There is also provision for forfeiture and entry under both tenancy agreements.

6.  The defendant has paid deposits of $124,532.40 and $122,946 under the first and second tenancy agreements respectively.  Those deposits will be taken into account in assessing the defendant’s liability for damages to be assessed. 

7.  In mounting the plaintiff’s case against the defendant, a sole witness was called to testify at today’s hearing.  He is Mr Tam Wai-koon, manager of the leasing department of the defendant.  He has conduct of these proceedings and is fully aware of the factual background to this case.  No evidence was adduced in any form against Mr Tam’s evidence and I wholly accept his evidence as credible and reliable and above all correct.  He has set out in his witness statement, which he adopted as his evidence, the details of the loss and damage under various heads of damages that the plaintiff has suffered on account of the defendant’s breach under both tenancy agreements.  Paragraphs 20 and seq. of his witness statement refer.

8.  Ms Po Wing-kay, counsel for the plaintiff, submitted a schedule of loss and damage this morning, which I have perused, and she confirms that it represents the details that had been given by Mr Tam in the paragraphs to which I have just referred. 

9.  It is clear to me on the evidence that the defendant has been in breach of his obligation to pay rent and management fees as and when they became due under the first tenancy agreement.  The particulars appear in Mr Tam’s witness statement.  Under the second tenancy agreement, the various heads of claim encompass arrears of rent and means profit, loss of rent, management fees, loss of management fees, rates, loss of rates, and contractual interest for late or non payment of rent and management fees. 

10.  At page 11 of the very helpful schedule supplied by Ms Po, the various heads of claim, as well as the amount payable in respect of each of them have been detailed.  They total nine in number. 

11.  Returning briefly to the facts which are not disputed, the defendant left the premises altogether on 16 May 2003.  This was without the consent of the plaintiff.  What the defendant had done was simply to leave the keys to the premises with the management office at the Chinachem Hollywood Centre. 

12.  On 12 June 2003, the plaintiff’s solicitors communicated by letter with the defendant informing the defendant that its conduct had amounted to repudiation of the tenancy agreement then subsisting.  One of course refers to the second tenancy agreement which was then in place.  Surprisingly, the defendant responded in writing on 16 June 2003 contending that it had not surrendered the premises by its act of depositing the keys with the management office.  Further correspondence on that note ensued.   

13.  Eventually, the plaintiff issued the writ of summons in this case in September of 2003.  A final interlocutory judgment and order was granted against the defendant on 7 November 2003, the defendant having defaulted in acknowledging the plaintiff’s writ.  Following that, the plaintiff obtained a writ of possession and Fieri Facias and recovered possession on 30 March 2004.  By consent, however, the default judgment was set aside on 21 May 2004 and the defendant filed and served a defence on the plaintiff on 3 June 2004.  That eventually led to the Order 14 summary judgment proceedings before me. 

14.  On the evidence which is totally uncontradicted by the defence, I am satisfied that the plaintiff is patently entitled to all its claims under both tenancy agreements.  I have no hesitation in adopting the particulars of loss and damage, including the accrual of interest for late payments, as set out in Mr Tam’s witness statement and more helpfully repeated in Ms Po’s schedule of loss and damage. 

15.  That schedule of loss and damage will form part of my judgment today and will be annexed to the judgment.  I do not propose to read out the details.  It suffices to say that I have examined the figures given by both Mr Tam and as set out in Ms Po’s schedule of loss and damage and they seem to me to be correct. 

16.  Under various heads of claim given on page 11 of the schedule of Ms Po, the total aggregate of damages amount to $1,041, 423.28.  From that sum must be deducted the deposits which the defendant has furnished under both tenancy agreements.  That should leave a net liability to be satisfied by the defendant in the sum of $916,890.98. 

17.  I am further satisfied that late payment interest at 3.5 per  cent per month would be payable on items B, E, F and G on page 11 of the schedule from 16 October 2004, which incidentally is the date of the calculation of the damages suffered by the plaintiff, to the date of judgment.  There will also be interest at judgment rate from the date hereof until full payment of the damages. 

18.  In summary, the plaintiff is awarded damages of $916,890.98 and interest which I have already made mention of.  In addition, the plaintiff will be entitled to the costs of the assessment hearing, including any costs that may have been reserved in respect thereof against the defendant, taxed if not agreed.  I shall also certify this matter fit for attendance of counsel.