TOP UNION CORPORATION LTD v. BRAND’S INTERNATIONAL (H.K.) LTD

DCCJ 5748/2018

[2023] HKDC 1037

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5748 OF 2018

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JUDGMENT

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Background

1.  The disputes herein arise from a provisional tenancy agreement signed between P, the landlord of Flat F, 2F Lai Yuen Apartments, No. 61 Russell Street, Hong Kong (the “Property”), and D, the tenant dated 3 September 2014 (the “PTA”).

2.  The following are uncontroversial: -

2.1.  D paid a sum of $50,000 per clause 3 of the PTA as deposit and this sum still remains with P;

2.2.  The lease under the PTA was for a term of 3 years, from 15 September 2014 to 14 September 2017;

2.3.  Monthly rent was $25,000 and D had duly paid the same every month up to the last payment of $25,000 on 17 May 2017;

2.4.  The above payment covered the rent up to 14 June 2017, hence in so far as the 3-year term is concerned, there had been no rental payment for the remaining 3 months (i.e. 15 June to 14 September 2017);

2.5.  In the 1^st week of July 2017, D left the keys to the Property in the letterbox of the Property;

2.6.  P then entered into the Property in the presence of police but in the absence of anyone of D;

2.7.  At the time, there were chattels such as a safe and a LED display left in the Property by D;

2.8.  D had also erected an additional partitioning wall inside the Property between the pre-existing kitchen and toilet;

2.9.  The safe and the LED display were not returned to or removed by D;

2.10.  P subsequently cleared out the Property, including removal of all chattels and demolition of all fixture and fittings, in about September to October 2017.

3.  P now claims the 3 months of unpaid rent and also the cost of reinstating the Property.

4.  D denies P’s entitlement to any further rental, counterclaims for partial return of the deposit and loss of the chattels left in the Property.

History of Previous Proceedings and Positions taken by Parties

5.  P apparently on 3 July 2017 (an earlier date of “26 June 2017” was crossed out on the form) took out an application in LDPE 652/2017, seeking to recover possession of the Property on ground of failure to pay rent, and claim sums of $4,000 and $2,000 as rental shortfall for the 15 February 2017 payment and water tap remedial works fee respectively.

6.  There is also a Notice to Persons in Actual Possession/ Occupation issued by P to D for the purpose of recovery of the Property, but it was dated 26 June 2017.

7.  Whatever the date, these documents show that P in late June/ early July 2017 had actually attempted to evict D from the Property, for the stated reason that D had failed to pay rent on 15 June 2017.

8.  There is no reference to this matter in any of P’s pleadings or witness evidence and it is not known what transpired in that application.

9.  Then after about half a year later on 5 January 2018, P filed a claim in the Small Claims Tribunal, i.e. SCTC 921/2018 (the “SCTC”), for $34,000 in demolition and clearing cost; $15,000 in dismantling and removing the safe; and $1,000 administrative charge.

10.  D, represented by Ms Ho Ming Yuk, filed a defence to that claim on 22 January 2018, stating that: -

10.1.  P had agreed to have the Property recovered “as is”;

10.2.  Ms Ho never received any complaint from P or request/receipt for demolition;

10.3.  Ms Ho was “surprised about the safe being dismantled and removed, as it was of high value, at the time P was anxious to recover the Property so agreed to recover “as is”, now we very much need a safe, P never notified us to arrange for removal or requested us to remove it, if we had received notice, we would definitely have had taken it back, P just removed it without notifying us”;

10.4.  When D terminated the lease, P retained 1-month rental and not returned to D.

11.  There is a document dated 16 March 2018 bearing reference to the SCTC, D’s company chop and a signature apparently of Ms Wu Shuk Wai in the trial bundle. The contents of it concern 2 matters: (a) the actual cost of removing the safe by P and (b) D giving notice to quit (退租通知) a month prior to departure to both the property agent and P.

12.  Ms Ho has also filed a statement in the SCTC, dated 8 May 2018. She raised the following: -

12.1.  At a “conference” (會議) with P in June 2017: -

(a)  As the tenancy agreement did not contain any agreement regarding early departure, “we” explained to P over the phone about early termination and both parties orally agreed that D was to move out in July 2017;

(b)  At the time P was aware of the presence of a mid-size safe in the Property, which was not arranged to be removed in time;

(c)  P also agreed to recover the Property “as is” and “deduct” the deposit for “that month’s rent” (當月租金);

(d)  D never received any notice or receipt for moving cost from P and P had still yet return the “difference” (差額) of $25,000 in deposit;

12.2.  Challenges to P’s purported cost of removing the safe and also authenticity of a quotation issued by “Peter Leung Deco Co”.

13.  Then later, on 2 August 2018, D filed a counterclaim in the SCTC and claimed for return of $25,000 in deposit and loss of the safe and the LED display.

14.  A statement made in the name of Ms Ho dated 14 August 2018 was filed in the SCTC. Among other matters, Ms Ho stated that the agreement with P was for D to move out of the Property in June 2017.

15.  Before the abovesaid counterclaim in the SCTC was filed, on 12 April 2018, P filed another application in LDPE 315/2018, seeking essentially the same reliefs as in the earlier LDPE 652/2017, except the $2,000 claim for fixing the water tap.

16.  D filed its defence in LDPE 315/2018 on 30 April 2018, this time represented by a Ms Wu Suk Wai. It was stated that “…as the unit was for residential use, we found that out during the lease, there was a chance that we would have no protection due to fire regulations, so we quit earlier, and had in May 2017 notified the landlord and the agent, and also checked that the tenancy agreement had not specified compensation for early quitting. So on 15 May 2017 we paid the landlord that month’s rent 15 May 2017 to 14 June 2017 and then gave vacant possession. The landlord had attended the unit in July and for unknown reason also called the police, if the landlord now claims to be unaware of the situation, why attend the unit in July? And when we notified the landlord of early quitting, he asked for us to return the keys and remaining rents, at that time we directly stated that it was not possible, because if we pay rent up to September then why return the keys in June? And the landlord has not yet refunded to us all the deposit.”

17.  LDPE 315/2018 was dismissed due to P’s absence from a hearing, and apparently P sought to set aside the dismissal. What had come of this set of proceedings is unclear on document, but nothing really turns on how it concluded, or whether it had concluded at all.

18.  The SCTC has been transferred to the District Court and become this action.

Agreed Issues — Analysis and Findings

19.  I shall follow the Agreed Statement of Issue in Dispute signed by parties on 2 June 2023.

20.  Issue 1.1 concerns D’s contention that there should be “recission” of the PTA for misrepresentation, in that the Property was only permitted to be used for residential purposes and not commercial purposes but P had represented otherwise by virtue of clause 9 of the PTA, which stipulated that the Property must only be used for “commercial” purposes. D alleges that it was induced into the PTA by such a misrepresentation.

21.  There is no dispute that the Property is indeed only permitted to be used for residential purposes, as stated in its Occupation Permit.

22.  It is also clear that clause 9 of the PTA, at least by necessary implication, constituted a representation that the Property could be used for commercial purpose.

23.  The critical question herein is however whether D was induced by the representation under clause 9 to enter into the PTA.

24.  For inducement, “the test is whether the misrepresentee would have entered the contract had the representation not been made, rather than what he would have done had he known the truth” (Chitty on Contract (34^th ed, 2021) Vol 1 §9-043 at p.738–739).

25.  Hence the test herein should be whether D would have stilled entered into the PTA had clause 9 not been included in the PTA or left blank (as opposed to had D known that the Property was for residential use only). I find that it would have still entered the PTA, for these reasons: -

25.1.  Before signing the PTA, Ms Ho of D had inspected the Property and there is no dispute that a business under the name “勝記” was operating from the Property at the time;

25.2.  Ms Ho therefore knew as a fact that the Property was being used for commercial purpose, and in fact it must be the reason why she eventually decided that D should rent the Property;

25.3.  By the time the PTA came to be signed, it must be the case that all terms had already been agreed, otherwise the PTA would not have been prepared for execution on that day;

25.4.  Clause 9 is a proforma term, with a blank to fill in the purpose/use if needs be and more importantly, it is couched in excluding terms, i.e. by filling in “commercial” it excludes other uses, but leaving it blank does not mean commercial use (or any other use) is not permissible;

25.5.  By logic therefore, Ms Ho did not need the presence of clause 9 or the word “commercial” filled in to induce her to make the decision — she had made that decision before ever seeing clause 9 as filled in.

26.  I wish also to add that Ms Ho’s almost relentless attempts to refer to clause 9 and the word “commercial” therein and say it was seeing that that she signed, regardless of the actual questions asked of her, was to me more contrived than convincing.

27.  At closing it was submitted that on evidence Ms Ho did say in the box that on the day of the execution of the PTA she did ask and was told that the Property was for commercial use. This however does not appear on pleadings, wherein only misrepresentation by way of clause 9 of the PTA has been pleaded. I therefore cannot proceed on the basis of this submission.

28.  The above is sufficient to reject D’s misrepresentation argument.

29.  Issue 1.2 concerns D’s contention of breach of quiet enjoyment, of which 3 specific allegations are made.

30.  The first is that Mr Menon Senior of P frequently visited the Property, stayed and chatted with his friends for a long time each time, which caused disruption to P’s business.

31.  I find this allegation unsubstantiated on evidence and inherently unlikely. Evidentially, all D had to offer was Ms Ho’s hearsay evidence of what her staff told her. There was no particular at all as to frequency, time of visits, length of stay etc. It would in fact be rather strange, to say the least, for Mr Menon Senior, or anyone, to do such a thing to begin with, not to mention that D’s staff there must have expressed some degree of objection and Mr Menon Senior had to persist regardless.

32.  The second is that the flush water and freshwater mains were fixed the wrong way.

33.  This I must say is a rather curious matter: one would have thought this was a very substantial inconvenience, if at all still making it possible to use the Property as per normal; however on D’s own case it “tolerated” the situation until April 2015, i.e. around 7 months into the lease. One could not help but wonder how in the meantime D had coped.

34.  It seems to me there are only 2 possible scenarios: either it never happened or D had no real problem “making do” with the situation.

35.  On P’s case it was admitted that D had indeed made such a complaint, but about a year into the tenancy. Timing aside, there is therefore no dispute that such a problem did exist at some time. That sufficiently rules out the first possible scenario above.

36.  I should also add that it was unlikely that the mix-up was due to renovation work done by D, as P alleged: -

36.1.  Firstly, as will be seen below when dealing with Issue 2.2, the evidence shows that D only added a portioning wall in the Property between the pre-existing toilet and kitchen, which in all likelihood did not require any tampering with the piping or water mains;

36.2.  Secondly, if D had tampered with the piping or water mains in the course of its renovation, which evidence and inherent probability both suggest took place in the beginning of the lease, there would be no possible explanation why D would raise the complaint only a year into the lease.

37.  As to the second scenario, the inevitable conclusion must be that in terms of extent this problem did not go up to the height of “substantial interference” in the context of D’s business run at the Property. As such, I hold that the water mains problem did not constitute breach of quiet enjoyment, not to mention entitling D to rescind the PTA.

38.  The third allegation is that air-conditioning at the Property broke down in July 2016.

39.  There is no dispute that this had happened and P cannot really dispute D’s pleaded case that it was fixed on 26 July 2016 for a cost of $4,000.

40.  There is however no evidence to show when the air-conditioning first broke down, and in turn how many days had D “endured” without air-conditioning, or indeed how D “endured”.

41.  What is clear is that D continued to use the Property after the air-condition was fixed, for another year no less. For it to say now that the problem was so substantial and so serious that it would be entitled to rescind the PTA is entirely disingenuous. In any event, there is no particulars at all to establish the extent and thus seriousness of the effects this problem.

42.  Hence, although such a problem had happened, and would cause some disruption to D’s business when it persisted, hence may constitute breach of quiet enjoyment, I am unable to find or hold that it reached the level that would entitle D to rescind the PTA.

43.  Given the above, Issue 1.3 can be answered in the negative.

44.  I shall add here that D raised in its closing submissions that it would alternatively be entitled to damages for such breach of quiet enjoyment. I reject this argument because reading D’s AD&CC the only relief sought for breach of quiet enjoyment was that of entitlement to rescind; there was not even a plea of loss and damage caused, not to mention any particulars thereof. The general prayer of “Damages for breach of the [PTA]…” changed nothing as it has no “anchor point” in the substantive part of the AD&CC at all.

45.  Issue 1.4 concerns D’s allegation that there was an Early Departure Agreement made between the parties; P denies any such agreement. This factually allegation requires detailed analysis.

46.  I shall start with D’s pleaded case (not settled by counsel appearing at trial). The key factual elements as pleaded now are as follows: ‑

46.1.  The parties agreed to the terms below after discussion in around April 2017;

46.2.  D’s tenancy would terminate early on 15 July 2017;

46.3.  D would pay $25,000 on 15 May 2017 as covering rent for 15 May 2017 to 15 June 2017;

46.4.  Rent for the period from 15 June 2017 to 15 July 2017 would be deducted from the $50,000 deposit; the remaining $25,000 would be refunded to D;

46.5.  D would leave the Property in around May to June 2017 but would leave the keys in the letterbox to facilitate viewing of the Property if necessary;

46.6.  In any event, vacant possession of the Property would be delivered by 15 July 2017;

46.7.  The safe, a display shelf and the LED display were likely to be the last items to be removed, by 15 July 2017 the latest.

47.  At the outset I note that the above pleaded case does not represent a consistent stance on D’s part in relation to an alleged oral agreement permitting it to terminate the lease before its 3-year term: -

47.1.  The document dated 16 March 2018 bearing reference to the SCTC stated that D gave notice to quit a month prior to departure to both P and the property agent (see §11 above) — the timing of the alleged agreement therein (a month prior to departure, i.e. in June 2017) and the basis of termination (i.e. a notice to quit) are inconsistent with the case currently pleaded;

47.2.  Ms Ho’s statement filed in the SCTC dated 8 May 2018 stated that there was a “conference” in June 2017 when early termination was allegedly agreed (see §12 above) — inconsistent in timing of alleged agreement compared with the case currently pleaded;

47.3.  Another statement in the name of Ms Ho dated 14 August 2018 and filed in the SCTC stated that the agreement was for D to move out of the Property in June 2017 (see §14 above) — inconsistent in allegedly agreed timing of departure (i.e. June 2017) compared with the case currently pleaded;

47.4.  D’s defence filed in LDPE 315/2018 on 30 April 2018 stated that P was notified in May 2017 of D’s early departure and vacant possession was delivered after last month’s rent (covering 15 May 2017 to 14 June 2017) was paid (see §16 above) — the timings of discussion (i.e. May 2017) and delivery of vacant possession (i.e. after final rent payment covering up to 14 June 2017) and basis of termination (i.e. by notice) were all inconsistent with the case currently pleaded;

47.5.  As indeed, this defence stated that P had actually demanded for the rent of the remainder of the lease, but D refused, suggesting that there was actually no agreement but a case of D unilaterally terminating by way of giving notice to P, after checking the PTA and taking comfort in finding no compensation liability on D for early termination;

47.6.  Further, in the original Defence D did not mention any agreement, not to mention any specific terms, but only stated that D had given notice of early termination to P (see original Defence §6 & 8); although not with the benefit of legal advice, these are factual matters that a lay person, in particular a businesswoman like Ms Ho, is capable of spelling out clearly.

48.  Ms Ho’s evidence, either in her statement filed herein or in the box, goes nowhere to cure or even address any of the above inconsistencies.

49.  Her witness statement only had this much to say regarding the alleged Early Departure Agreement: “During the phone call in April/May, Landlord agreed to our moving out in July and agreed to take property on as-is basis, and set off last month’s rent with deposit.” (§5). This is no better than a bare assertion.

50.  In her live evidence in the box, she said that the reason for early departure was due to the fact that she was unable to obtain insurance coverage for the Property, as it was only for residential use and not commercial use. This she said was discovered in late 2016 to early 2017, later more specifically between December 2016 to January 2017, and that she had raised this with P. She said she would try to speak to more insurers, and would not leave the Property if she could eventually obtain insurance coverage.

51.  There is no evidence proffered as to what had transpired from that point to “April/May”, e.g. whether Ms Ho tried to source insurance coverage as she said she would but to avail, so in another call in “April/May” with P the alleged agreement was made or otherwise.

52.  Lastly, there is no contemporaneous record of any kind showing, indicating or even hinting existence of some agreement under which D was allowed to terminate/depart earlier.

53.  One would have thought, if there were indeed such an agreement, which was made between two commercial entities in a commercial setting, D would have made at least some attempt to have a record of it.

54.  Given Ms Ho’s evidence that the communication was through WhatsApp and phone calls with Ms Menon of P, who also spoke Punti fluently, she could have simply recorded and sent to Ms Menon a voice message saying that an agreement was reached.

55.  It does appear to me odd that an apparently experienced businesswoman such as Ms Ho did not have the idea of obtaining some form of protection for D even cross her mind. When asked about it in the box, her answer was simply that P did not ask for anything in writing, which really did not address the issue at all.

56.  Such overall quality of evidence is unsatisfactory and certainly insufficient to convince me on balance that there was such an Early Departure Agreement as currently pleaded, not to mention in the face of the inconsistencies in D’s stance pointed out above.

57.  I therefore reject D’s case that there was the alleged Early Departure Agreement.

58.  I find that in fact D merely gave notice to quit to P in about June 2017, thinking that it could do so because there was no compensation/ penalty for early termination stipulated in the PTA, and left the Property in about the first week of July with the keys left in the letterbox.

59.  Issue 1.5 concerns D’s contention that P’s entry to the Property in the first week of July 2017 amounted to repudiation of the PTA.

60.  Given my finding above at §58, it was in fact D which was in repudiatory breach of the PTA, by failing/refusing to pay rent due on 15 June 2017, if not also renunciation of the PTA, by giving a notice to quit when it was not entitled to.

61.  I therefore reject D’s contention that P repudiated the PTA by its entry to the Property in the first week of July 2017.

62.  In such circumstances, P’s entry to the Property after D left the keys in the letterbox was but an act of acceptance of the repudiation by D. Hence, the PTA was terminated as at that point with both parties discharged from further performance. For P it means that there would no longer be a duty to provide the Property for D’s use as per the PTA; for D it means however there was in substitution of its original primary duty to pay rent, a replacement secondary duty to pay P damages for loss caused by D’s failure to perform the original primary duty (Chitty on Contract (supra) §27-083 at p. 2041).

63.  Given the above, it follows that in respect of Issue 1.6, D is liable to pay P damages for P’s loss caused by D’s repudiatory breach of the PTA.

64.  I assess such damages at $75,000, being equivalent to the rent P would have received until the end of the 3-year term under the PTA had D not breached the same, namely rent for 15 June to 14 July, 15 July to 14 August and 15 August to 14 September 2017.

65.  There is no issue of mitigation raised in the Agreed List of Issues and in any event I fail to see any unreasonable act on the part of P; after all, when D left the keys in the letterbox there were effective only 2 months remaining in the 3-year term, so there was in fact nothing much P could have done otherwise to mitigate its loss in rental income.

66.  Issue 2.1 is predicated upon there being the Early Departure Agreement. Given my findings above, it now falls by the wayside.

67.  Issues 2.2 and 2.3 concerns the extent to which D had altered the interior of the Property.

68.  D at paragraph 21 of its AD&CC pleaded a Diagram A, showing that the Property had already been partitioned to have a toilet, a kitchen and a window room when it took over the Property. This was admitted by P at paragraph 18 of its AR&DCC as being the state of the Property as at September 2014, i.e. when the PTA commenced its term.

69.  The only dispute therefore concerns a further partitioning built between the kitchen and the toilet. D’s own case is that this further partitioning was built by it.

70.  As per the PTA clause 8, P was to handover the Property on “as is” basis. P is not arguing, and in any event I see no basis for P to argue, that the Property should be returned to P otherwise than on “as is” basis.

71.  As such, it follows that D should only be liable for cost of removing the further partitioning built by it between the existing toilet and kitchen.

72.  P claims a total sum of $49,000 in demolition and removal cost, which comprised $34,000 for the item “Demolish and Clear Interior from the flat” and $15,000 for the item “Dismantle and Dispose the Locker Safe from the 2/FL flat: weight 700 Kgs”, relying on an invoice dated 31 October 2017 issued by Alam’s Deco & Trad Co (“Alam’s”).

73.  I see no basis to disbelieve that P did engage Alam’s to carry out the above works and paid those amounts. It was not put to P’s witness that the invoice issued by Alam’s was forged or inaccurate in any respect.

74.  However, the item of “Demolish and Clear Interior from the flat” was in fact for demolition of the pre-existing kitchen and window room as well, apparently leaving only the toilet in place.

75.  As such, the cost of $34,000 was clearly not entirely attributable to returning the Property to “as is” basis as at handover of the same in September 2014.

76.  As will be seen from my conclusion on Issue 4.1 below, cost for removal of the LED display and the display shelf should be awarded.

77.  At its closing submissions P fairly accepted that there should be a reduction of that part of the cost.

78.  Doing the best I can in the absence of any breakdown by Alam’s, I will assess such demolition and clearing cost at $15,000.

79.  As to the cost of the other item pertaining to the safe, I shall deal with it together with Issue 4.1 below.

80.  Issues 3.1 and 3.2 concern the deposit of $50,000 admittedly paid by D to P upon signing of the PTA: D seeks a refund of the same.

81.  At its closing submissions P fairly accepted that credit should be given for it as there is no justification for P to retain or forfeit the same.

82.  I must add that technically that means D succeeds on its counterclaim for the refund of $50,000. I say “technically” because the pleaded basis for this refund claim is actually inconsistent with D’s case of agreed termination, and instead based on a curious plea that there was no formal agreement in respect of the tenancy.

83.  Finally Issue 4.1 concerns D’s claim for loss of its safe, LED display and display shelf.

84.  As I see it, the key question is whether D intended to leave these items behind when it left the Property in about the first week of July 2017 or did it intend to keep them but to have them removed at a later stage.

85.  At the outset, as currently pleaded, D’s case is predicated upon there being the Early Departure Agreement and on that basis D alleges that it had informed P that it would return to collect the safe etc. by 15 July 2017.

86.  Having rejected the Early Departure Agreement allegation, what remains for me to analysis will be D’s intention as shown by the objective circumstantial evidence.

87.  What immediately jumps out to me is the fact that ever since P’s entry into the Property in about the first week of July 2017, D had apparently taken no action at all as an attempt to take back these items — there is no record of any demand, by way of letter, message or phone call, to the landlord.

88.  Even in terms of witness evidence, Ms Ho of D in the box referred to only 1 single phone call to the “daughter”, by that I took her to mean Ms Geeta Menon, after she allegedly found out that the items were being locked inside the Property in July 2017.

89.  When I took up the issue with her, her answers were simply that she was happy to wait for the landlord to sue D, as the “daughter” threatened to do so, and just waited month after month without even thinking that she should take action to recover those items.

90.  Making it even more surprising is Ms Ho’s evidence that D actually needed the safe for its new premises, which at the latest was certified suitable to house the safe in about end of June 2017. Again, Ms Ho’s answer to queries raised by me was simply that she could wait.

91.  In terms of legal proceedings that ensued, the earliest clear indication of a claim for these items was in D’s counterclaim in the SCTC (see para 14 above) that was filed in August 2018, i.e. a year after the event. I should also note that the counterclaim therein was limited to the safe and the LED display; there was no mentioning of the display shelf.

92.  Common sense dictates that such conduct is rather inconsistent with a claim that there was a genuine intention of recovering those items, and certainly does not sit well with Ms Ho’s repeated emphasis that these items were of high value and needed for D’s business in as early as June 2017.

93.  Further, it certainly does not help D’s cause that in the original D&CC filed in the present action in July 2019, there was no claim for the loss of the safe, the LED display or the display shelf. It is of course noted that D was unrepresented at the time, but to make such a claim would have just required a matter-of-fact allegation that “D asked but P refused to return D’s items” and claim the loss of these items; no legal niceties would be required.

94.  Lastly, going back to the rejection of the Early Departure Agreement, the rejection gives the leaving of the keys in the letterbox a different significance: as oppose to it being an agreed convenience for P to show the Property to prospective tenants (as D pleaded), common sense says that it signified an intention on D’s part that it no longer wish to access the Property, and by extension it no longer wish to keep any of the items left behind therein.

95.  I therefore find that D did not have any intention to keep the safe, the LED display or the display shelf; it in effect abandoned them at the Property upon its departure in about the first week of July 2017. I therefore answer Issue 4.1 in the negative.

96.  What follows is the issue of removal cost for these items. They were not part of the “as is” basis of the Property upon handover in September 2014, P naturally is entitled to have them removed at D’s cost. I have dealt with cost in relation to removal of the LED display and display shelf above under Issues 2.2 and 2.3.

97.  The cost for removing the safe, as pleaded and shown in the invoice issued by Alam’s, was $15,000.

98.  As evidence transpired, the actual safe removal job was in fact carried out by Chigo Engineering Co for $7,000.

99.  It seems that workers of Alam’s firstly dismantled the safe as they were unable to move it, but then even after dismantling they still could not remove it. Hence, Chigo Engineering Co, the original supplier of the safe, was contacted to only carry out the removal.

100.  I do not find it unreasonable for P to engage Alam’s to carry out also the removal of the safe, and it was not unreasonable for Alam’s to attempt the removal by firstly dismantling the safe. The fact that Chigo Engineering Co could have done so without dismantling the safe and for a lower fee does not in itself make it otherwise; as indeed, to say that Chigo Engineering Co should have been engaged in the first place is to argue with the benefit of hindsight and as counsel for perfection.

101.  I shall therefore allow the safe removal cost of $15,000 as well.

Conclusion

102.  For the above reasons, I give judgment to P in the net sum of $55,000.

103.  Interest on this sum should start to accrue from different time points: $25,000 of it, being the $75,000 in damages to P for breach of the PTA minus the deposit refund of $50,000, should start to accrue from the date of acceptance of the breach by P, i.e. say 3 July 2019 (being the middle of the first week of July); the remaining $30,000 of it interest should accrue from 1 November 2019, i.e. after Alam’s issued its invoice to P dated 31 October 2019.

104.  As to interest rate, I reckon the commercial rate, i.e. HSBC prime rate plus 1% is appropriate as P had been effectively out of pocket, i.e. deprived of the use, of such funds since those dates.

105.  However, as from the date of this judgment, interest on the whole sum should carry judgment rate until full payment.

106.  In respect of costs, both sides are technically successful, to different extent and on different issues. I also note that the net award is worryingly close to falling within the jurisdiction of the Small Claims Tribunal at the relevant time (its jurisdiction being lifted from $50,000 to $75,000 on 3 December 2018).

107.  As foreshadowed after hearing parties’ closing submission, I will make a costs order nisi initially pending parties’ application to vary the same. At this stage, I am minded to order D to pay 80% of P’s costs, to be taxed if not agreed.

108.  I will not however give certificate for counsel given the modesty of the amounts at stake and complexity of the matter. This is of course not saying that counsel for parties have not be helpful.