UNITED HOLDINGS LTD v. KEEN ASCENT INVESTMENT LTD

HCA 1081/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1081 OF 2006

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DECISION

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The application

1. The plaintiff applies for summary judgment against the defendant.  By consent of parties, this matter is to be dealt with on papers submitted by parties.  This court will deliver its decision and make orders in writing.  The plaintiff has filed with court affidavit evidence and counsel’s submissions in support of the application.  Defendant has filed its affidavit evidence.  There is no written submission from the defendant.  Time for defendant to submit the written submission expired on 16 August 2006.  This court now proceeds to consider the plaintiff’s application and gives its reasons for the orders to be made.

The facts

2. By a lease in Chinese, the plaintiff as the landlord leased the premises at Flat 4 on the Ground Floor with cockloft, Tak Yan House, Stage 16, Nos. 53,57,59,63,69,71 and 75 Tai Pa Street, Tsuen Wan, New Territories, Hong Kong (the premises) to the defendant at a monthly rent of $50,000 payable in advance on 28^th day of each month. Clause 3 of the lease provides that if the rent shall be in arrears for 10 days, the plaintiff shall be entitled to determine the lease.  The plaintiff alleges that the defendant has failed to pay the rents for the premises from February 2006 up to present.  By issuing the writ of this action, the plaintiff terminated the lease and demanded payment of the arrears of the rent, possession of the premises, mesne profits, interest and costs against the defendant.

Defence

3. The defendant does not dispute the above facts. In the affidavit evidence, the defendant puts up the defence as follows:

(a)    There was leakage problem on the premises;

(b)    The plaintiff agreed to waive the rent as from February 2006 until the problem is solved by the plaintiff; and

(c)    The plaintiff had refused to rectify the problem unless the defendant agreed to increase the rent for the premises.

4. The plaintiff submits affidavit evidence to deny any water leakage problem on the premises.  The plaintiff also denies having agreed to waive the rent.

Reasons for decision

5. Having considered the affidavit evidence filed by the parties and plaintiff counsel’s written submissions, I consider that the evidence filed by the defendant to support the above defence is simply not believable.  It is against commercial sense for the plaintiff to agree to waive the rent simply because of allegation of serious water leakage problem alleged by the defendant.  Also, I believe that if the water leakage problem were a real problem affecting the defendant’s business, the defendant would have taken remedial measures to address it and demand a set-off of the rent payable.

6. It is trite law that the burden is on the defendant to show to this court that the defendant has a triable issue.  The defendant has failed to discharge this burden.

7. I find that the plaintiff has proved its case against the defendant and summary judgment should be given to the plaintiff.

Orders

8. I make the following orders:

(a) Possession of the premises be to the plaintiff at the expiration 7 days from the date of service of this Decision or the order on the defendant, whichever is the earlier, unless within this period of time the defendant pays into court all the rent in arrear up to the date of payment and a sum of $15,000 on account of the costs of this action;

(b) Arrears of rent in the sum of $200,000.00;

(c) Mesne profits at the rate of $50,000 per month as from 28 May 2006 to the date of delivery of possession of the premises to the plaintiff;

(d) Interest at the judgment rate on $200,000 from the date of the writ and; on the mesne profits as from 28 May 2006 until full payment;

(e) Order nisi that the defendant shall pay the plaintiff costs of this action including this application and all costs reserved for this application. This order is made under Order 42 rule 5B(6) of the Rules of the High Court. Unless an application is made to vary it, this order becomes absolute 14 days after this decision is pronounced.