CHAN ALEX AND ANOTHER v. TAKE CARE LOGISTICS LTD

CAMP 17/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 17OF 2017

(ON AN INTENDED APPEAL FROM DCCJ NO 5024 of 2013)

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.  This is an application for leave to appeal against the judgment of Judge Kot in DCCJ 5024/2013. By a judgment of 5 June 2017, the judge gave judgment in favour of the Plaintiffs for damages in the sum of $7,952.50 plus interest. At the same time the judge ordered the Plaintiffs to repay the deposit to the Defendant. She also ordered the Defendant to pay 50% of the costs of the Plaintiffs in the claim and counterclaim.

2.  The Defendant applied for leave to appeal before the judge.  The judge refused leave on 14 August 2017.

3.  The Defendant renewed the application for leave before us. 

4.  After hearing the parties, we refuse leave. 

5.  The dispute between the parties is about an aborted tenancy agreement.  The key issue was which party repudiated the tenancy agreement.  The judge’s findings were that:

(a) The provisional tenancy agreement was not made with the Defendant, instead it was made with Wong in the latter’s personal capacity;

(b) The Defendant had no right to enforce the provisional tenancy agreement;

(c) The Defendant therefore had no right to any rent free period in the absence of any provision to that effect in the tenancy agreement;

(d) The Plaintiffs had not given possession of the Premises to the Defendant prior to 3 January 2013 and the Defendant had not entered into possession;

(e) The Plaintiffs had not intimated that they would not rent the Premises to the Defendant notwithstanding the proposal to add 3 terms to the tenancy agreement;

(f) On the contrary it was the Defendant which informed the Plaintiffs that it would not rent the Premises on 3 January 2013;

(g) Hence it was the Defendant who repudiated the agreement;

(h) The repudiation was accepted by the Plaintiffs with the changing of the lock of the Premises.  

6.  These findings were made in light of the conflicting evidence.  The judge duly explained her assessment of the evidence in the judgment.  She found the Plaintiffs’ witness Chin credible and the Defendant’s witnesses Carmen and Yu unbelievable. 

7.  The judge therefore found the Defendant liable for breach of the agreement and ordered it to pay damages accordingly. 

8.  The intended grounds of appeal, as set out in the draft notice of appeal, mainly challenged the findings of fact by the judge and her assessment of the evidence.  Those grounds had been canvassed before the judge and she had explained in the Decision of 14 August 2017 that they were not reasonably arguable. 

9.  We agree with the judge.  Findings of fact are not easily disturbed on appeal.  Even taking account of Mr Chong’s submissions (written as well as oral) before us, we are not satisfied that the findings in the present case were plainly wrong or that there was any error in the assessment of evidence which warrant this Court’s intervention.  In the circumstances, applying the established principles regarding appeal on facts (see Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD 1; China Gold Finance Ltd v CIL Holdings Ltd CACV 11/2015, 27 November 2015), the intended appeal based on such grounds does not have a reasonable prospect of success.

10.  The Defendant also submitted that it should be entitled to relief against forfeiture under Section 58 (1) of the Conveyancing and Property Ordinance Cap 219.  The judge held that Section 58(1) was not applicable in the present case as it was a case of non-performance of the agreement rather than a case of breach of covenant or condition in a lease. 

11.  Section 58 is about the exercise of right of re-entry or forfeiture.  According to the findings of the judge, the Plaintiffs had not handed possession of the Premises over to the Defendant.  The lease had not yet commenced.  The Plaintiffs did not exercise any right of re-entry or forfeiture when the locks for the Premises were changed. 

12.  The Defendant’s reliance on the rent free period is misconceived since the judge found that the Plaintiffs did not enter into the Provisional Tenancy Agreement with the Defendant and there was no rent free period under the tenancy agreement with the Defendant. 

13.  The commencement date of the tenancy under the tenancy agreement with the Defendant was 10 January 2013.  The agreement had been repudiated before its commencement.

14.  On the findings of the judge, it is purely a case of breach of contract.  The Defendant repudiated before entering into possession. Section 58 is not engaged.

15.  Therefore, the Section 58 argument has no merit.

16.  We cannot see any other reasons in the interest of justice to warrant leave to be granted.

17.  For these reasons, we dismiss the Defendant’s summons of 24 August 2017 with costs.