YEUNG WAI MAN v. LEE ALOYSIOUS WAN HOI AND OTHERS

HCA 577/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 577 OF 2014

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The Application

1. I have before me an application by the defendants by summons dated 6 August 2014 for:

(1) summary judgment against the plaintiff for various relief as set out in the Counterclaim pursuant to Order 14, rule 1 of the Rules of the High Court; and

(2) an order that the Statement of Claim be struck out under Order 18, rule 19 of the Rules of the High Court or the inherent jurisdiction of the court on the grounds that (a) it discloses no reasonable cause of action, (b) it is frivolous or vexatious, and/or (c) it is otherwise an abuse of the process of the court.

The background facts

2. The background facts of this case are relatively straightforward.

3. The defendants are the registered owner of the premises known as Shop B-1, G/F & Cockloft, Yuk Wah Court, Nos 17 & 19 Tai Kwong Lane and Nos 35 & 37 Heung Sze Wui Square, Tai Po, New Territories (“the Premises”).

4. By a tenancy agreement in writing dated 14 March 2009, the defendants agreed to let and the plaintiff agreed to take the Premises for a term of five years (of which the first three years were fixed) commencing on 1 April 2009 and expiring on 31 March 2014 at the monthly rent as stated therein.

5. Clause 2 of the tenancy agreement provides that if the tenant should wish to (inter alia) renew the tenancy after its termination, he has to give written notice of his intention to renew, and the renewal shall become effective only upon the making of a new tenancy agreement.

6. On 17 October 2013, the 6^th defendant on behalf of the defendants made a written offer to the plaintiff to renew the tenancy, which was due to expire on 31 March 2014, for a term of two years at the monthly rent of HK$75,000.  In the written offer, the plaintiff was asked to reply within one month whether he wished to renew the tenancy; otherwise the defendants would treat the plaintiff as having decided to terminate it.  The offer also expressly requested the plaintiff to reply in writing.

7. In the 1^st defendant’s affirmation in support of the defendants’ summons, it is emphasised that the defendants stipulated the requirement of a written reply by the plaintiff because, apparently, some of the defendants were not in Hong Kong and it was considered that a written reply would facilitate those defendants who were in Hong Kong to report the matter to other defendants who were out of Hong Kong, and also because the defendants wished to have certainty and to avoid any unnecessary arguments as to whether a new tenancy agreement had been reached and what the terms of the new tenancy were.

8. There is no dispute that the written offer was served on the plaintiff by the defendants through an estate agent (Ms Tsang), and that the plaintiff did not give any written reply to the defendants’ offer, whether within one month of the date of the offer or at any time thereafter.

9. On 23 December 2013, the defendants served a written notice on the plaintiff stating that his tenancy of the Premises would expire on 31 March 2014 and they had decided to terminate the tenancy on its expiry.

10. Also on 23 December 2013, the defendants entered into a written provisional agreement for tenancy to let the Premises to a third party for a fixed term of two years from 1 April 2014 to 31 March 2016 at the monthly rent of HK$100,000 (with an option to the new tenant to renew for a further term of three years).

11. On 31 March 2014, the plaintiff’s tenancy expired, but he has since remained in occupation of the Premises.

12. It is the plaintiff’s case that he orally informed Ms Tsang that he accepted the defendants’ offer, and thus there was a binding agreement for renewal of the tenancy for a term of two years from 1 April 2014 to 31 March 2016 at the monthly rent of HK$75,000.

13. On 2 April 2014, the plaintiff commenced the proceedings herein by writ seeking, inter alia, a declaration that the alleged oral tenancy agreement mentioned in paragraph 12 above is valid and subsisting, and specific performance of the same.

14. The defendants filed and served their Defence and Counterclaim on 24 June 2014, contending that the plaintiff’s tenancy had come to an end, and there was no valid renewal of the tenancy.  In the Counterclaim, the defendants seek (inter alia) an order that the plaintiff shall deliver up vacant possession of the Premises to the defendants and damages for trespass and/or mesne profits.

15. As earlier mentioned, the defendants’ application for summary judgment and striking out was made by summons dated 6 August 2014.  The application was supported by the 1^st defendant’s affirmation also filed on 6 August 2014 in compliance with the requirements of Order 14, rule 2 of the Rules of the High Court.

16. For reasons given at the hearing today, I decline to permit the plaintiff to rely on his affirmation filed on 8 October 2014 in breach of the previous court order made on 20 August 2014 and without leave of the court.

Discussion

17. The main issue to be determined by me is whether, assuming that the plaintiff did orally communicate his acceptance of the defendants’ offer to Ms Tsang within one month of the date of the offer, such oral acceptance is valid such as to give rise to a binding oral tenancy agreement between the defendants and the plaintiff.

18. When considering this issue, I bear in mind the principles applicable to an application under Order 14, which are too well known to require recitation, and which have recently been summarised in the judgment of Deputy High Court Judge B Chu in Pacific Harbor Advisors Pte Ltd and Another v Winson Federal Ltd and Others, HCA 1257/2013 (1 August 2014), at paragraphs 61 to 66.

19. I also bear in mind that a pleading should not be struck out summarily unless it is plain and obvious that the case as advanced in the pleading is bad and not capable of being cured by appropriate amendments.

20. In relation to the present case, the following general principle is stated in Chitty on Contracts, 31^st Ed, Vol 1, at paragraph 2‑065:

“An offer which requires the acceptance to be expressed or communicated in a specified way can generally be accepted only in that way. Thus if the offeror asks for the acceptance to be sent to a particular place one sent elsewhere will not bind him, nor will he be bound by an oral acceptance if he has asked for one to be expressed in writing. This rule is particularly strict where the offer is contained in an option.”

21. However, the learned editors of Chitty go on to state at paragraph 2‑067 as follows:

“Stipulations as to the mode of acceptance are usually made by the offeror with some particular object in view, eg to obtain a speedy acceptance, or one expressed (for the sake of certainty) in a particular form. It seems that an acceptance which accomplishes that object just as well as, or better than, the stipulated method may bind the offeror. For this purpose, the court must first decide, as a matter of construction, what object it was that the offeror had in view. For example, a requirement that the acceptance must be sent by letter by return of post may ‘fix the time for acceptance and not the manner of accepting.’ An acceptance by telex could then suffice. But such an acceptance would not be effective if the offeror’s object (in the true construction of the offer) was to have a full, accurate and signed record of the acceptance.”

22. Support for the above propositions can be found in Tinn v Hoffman & Co (1873) 29 LT 271; and Manchester Diocesan Council for Education v Commercial & General Investments Ltd [1970] 1 WLR 242.

23. In the present case, there is no doubt that the defendants’ offer stipulated a particular mode of acceptance by the plaintiff, namely, by writing.  Having regard to the background of this matter, including clause 2 of the tenancy agreement and the importance of renewal of a tenancy, I consider it to be reasonably clear that the defendants did insist that only a written acceptance of the offer would be regarded as valid.

24. In any event, on an objective view of the matter, the purpose of the requirement for a written acceptance is clear, namely, the achievement of certainty and clarity.  An oral acceptance, it seems to me, cannot be regarded as being “just as well as, or better than,” the stipulated mode of acceptance.

25. In my view, it is clear that the oral acceptance by the plaintiff of the defendants’ offer alleged to have been communicated to Ms Tsang as agent for the defendants was not a valid acceptance of the defendants’ offer.

26. I therefore conclude that the plaintiff has no defence to the defendants’ claim for possession of the Premises.  I give final judgment in favour of the defendants in terms of paragraph 3 of the defendants’ summons, and interlocutory judgment for mesne profits to be assessed for the period from 1 April 2014 to the date of delivery up of vacant possession of the Premises by the plaintiff (having regard to the fact that, in my view, there is no satisfactory evidence of the open market rent of the Premises).  Credit should be given for the amount of payments received by the defendants from the plaintiff purportedly as “rent” since 1 April 2014.

27. I also strike out the plaintiff’s Statement of Claim, and make an order that the plaintiff’s action be dismissed.

28. I shall hear the parties on the question of costs.