XCHRX KEENEE INVESTMENT LTD. v. ROYAL ASIA HOLDINGS LTD.

HCA 21989/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 21989 OF 1998

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J U D G M E N T

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Godfrey, J.A. :

1. This is a landlord's application for summary judgment for rent due. The tenant's defence is that the landlord warranted that the premises were suitable for use for the tenant's (or its sub-tenant's purposes), i.e. a bakery.

2. Clause 7(k) of the Tenancy Agreement, made on 20 May 1998, expressly excludes any such warranty, on what I am satisfied (despite an argument to the contrary on the part of the tenant) is its true construction. But the tenant relies on a collateral warranty in writing to the above effect, given on 18 May 1998, contradicting clause 7(k) and purporting to be given by one Chan on behalf of the plaintiff.

3. If the warranty was given with the plaintiff's authority, then the plaintiff is in breach of it, for the premises cannot be used for the intended purpose, and the plaintiff is accordingly liable to the defendant for breach of warranty. However, the tenant has continued to turn the premises to account and has received rent from sub-tenants.

4. I cannot at this stage of these proceedings decide the dispute as to whether the warranty relied on was or was not given with the plaintiff's authority, but, if it was, it is arguable that the tenant's claim for damages is a good one, notwithstanding clause 7(k) of the Tenancy Agreement.

5. In these circumstances, I propose to give the defendant conditional leave to defend, the condition being that the whole amount of the outstanding rent be paid into court within 14 days from today. If the condition is not met, there will be judgment for the plaintiff for the amount claimed, with costs.

6. I will make no order on the plaintiff's application for interim payment.

7. As to the costs of the plaintiff's application for summary judgment, I will order that costs be in the cause.