LEE KAM YIN v. KWONG YI LING

DCCJ 4605/2022

[2026] HKDC 851

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4605 OF 2022

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BETWEEN

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AND BETWEEN

(By Counterclaim)

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JUDGMENT

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A. Introduction

1.  This case concerns the business venture between the Plaintiff by original action (“Lee”), the 2^nd Defendant by counterclaim (“Lau”) and others including the Defendant by original action (“Kwong”) in the incorporation of a company named MAST Medical Group Limited (“MAST Medical”) on about 2 March 2016 (i) to provide a Chinese Medical Center for licensed Chinese Medicine Practitioners using MAST technique to provide medical services (“the Medical Center Business”) and (ii) to sole distribute MAST related healthcare apparatus supplied by Yidao Chinese Medical Center Co Limited (“Yidao”) incorporated in 2013 and/or Tech Health (International) Group Co Limited incorporated in 2014 (“the Distribution Business”) at the premises at Rooms Nos 1001-1001A, 10^th Floor, Grand Center, 8 Humphreys Road, Tsimshatsui, Hong Kong (“the Premises”).

2.  The “Meridian Activation Stimulation Therapy” (“MAST” in Chinese “經穴激活系統療法”) is a technique developed by Lau, Lee and others in about 2004, this is undisputed. MAST requires the use of apparatus for low-frequency stimulation.

3.  Kwong came to know MAST therapy when she attended a 10-lesson course in 2015 taught by Lau and/or Lee.

4.  It seems there is no written agreement to clearly delineate the scope of business of MAST Medical and the respective roles (the rights, duties and obligations) of the five original shareholders.

5.  The five original shareholders (Lee, Lau, Kwong, Chan Sean Yee and Leung To Chu) each (save for Lau) contributed HK$ one million each and held 20% of the shares of MAST Medical. Chan Sean Yee and Leung To Chu dropped out in 2016, and the remaining shareholders Lee, Lau and Kwong held and hold shares respectively in the following proportions of 39%, 22% and 39%. All three were directors of MAST Medical.

6.  It seems irreconcilable disputes immediately surfaced between Lee and Lau on the one part and Kwong on the other part over the operation of MAST Medical.

7.  On or around 10 August 2017, Lee, Lau and Kwong entered into Sub-lease Agreement (分租合約協議書) in writing. This Agreement is referred to by both Lee and Kwong as “the Cessation Agreement”.

8.  The purpose and the terms of the Cessation Agreement will be explored more fully in context below. Suffice to say that Kwong signed the Cessation Agreement since she recognized that a breakup of the joint venture she had with Lee and Lau could not be prevented (para 38 of her witness statement) and that there was the lease agreement (the “Lease”) for the Grand Center Premises from which they practiced Chinese medicine. Lee and Kwong guaranteed as sureties due performance of the Lease that had one year and three months to run from December 2017.

9.  Lee claims against Kwong for the breach of Clause 3 of the Cessation Agreement in that she failed and/or refused to pay her one third share of the rent and electricity charges and other expenses of the Premises since December 2017. Lee seeks for damages in the sum of HK$480,026.06 being the total of the amounts Lee said she paid on Kwong’s behalf. Kwong, at the trial, confirmed she does not dispute the quantum of the sum which appears at Annex 1 to Lee’s Statement of Claim at A/10.

10.  Kwong, in her Amended Defence and Amended Counterclaim (“AD&CC”) denied the claim against her and alleges she was forced to vacate the Premises on 24 November 2017 due to Lee and Lau’s fundamental and repudiatory breaches of the implied terms of the Cessation Agreement. Kwong counterclaims for her loss and damage suffered: (i) for loss of revenue from her practice as a Chinese medicine practitioner from 24 November 2017 to 31 December 2017 (to be assessed), (ii) for the difference in her expenses payable between the Cessation Agreement and the new lease for the period from 1 January 2018 to 14 March 2019, and (iii) for the renovation fees of her New Clinic in the sum of HK$123,980 to set off in diminution of Lee’s claim against her.

11.  It is to be noted as Lau suffered a stroke, by an Order of DDJ Alfred Cheng dated 27 November 2023, leave was granted to Lee to conduct this action for and on behalf of Lau as his guardian ad litem.

B. Background Facts and Contentions

12.  It is undisputed that Lee and Lau on the one part and Kwong on the other part had numerous disagreements as to running of the Medical Center Business and the sharing of the distribution income for MAST equipment between MAST Medical and MAST Animal Health Centre Limited (“MAST Animal”), and on about 21 August 2017, a written agreement to cease the Medical Center Business and the arrangement for Lee, Lau and Kwong to practice separately at the Premises was formalized.

13.  This was by way of the Cessation Agreement between Lee, Lau and Kwong, the terms of which are at the center of the present disputes. The Cessation Agreement is recited in full:

“分租合約協議書

一.分租人：

1.劉冠良先生HKID : A898945⑷

2.李金燕女士 HKID : G571971(1)

3.鄺銥鈴女士 HKID : G674877⑷

二.分租地址 : 九龍尖沙咀堪富利士道8號格蘭中心1001-1A

分租日期：2017年8月1日至2019年3月14日

三.租金計算方法：根據租約每月將電費、租金、管理費及差餉(如有)分為三份，每個分租人負責繳交一份。

*每月租金按恒隆地產發出月結單為準而電費亦按中電發出的電費單為準。

四.分租守則

1. 大堂、走廊、接待處、茶水間、1號房屬共同使用空間。

2. 其餘空間分配組合如下：

A.劉冠良：現時使用的醫師房及4號、5號房。

B.李金燕：2間醫師房及6號房。

C.鄺銥鈴：現時使用的醫師房、走廊的藥櫃及2號、3號房。

*各人可獲房間鎖匙，日後房内一切設備、管理、維修、清潔、使用等權利或義務，皆歸使用者所有，但必須保持房內清潔，不能有影響衛生的情況出現。

3. 共同使用空間之清潔每人負責2天，所有清潔用品由各人自行負責。

4. 所有營運開支均歸各人自行負責，因鄺銥鈴醫師仍需經由經穴激活集團有限公司聘請人員繼續營運，故由2017年8月份開始所聘員工之一切薪酬福利、強積金、長期服務金或日後之遣散費用等相關支出，皆由鄺銥鈴醫師負責。

五.財務安排

1.每日收入現金由各人核數後存入恒生銀行帳戶：924060593883(經穴激活集團有限公司)，入帳後需交回入數紙以作記帳之用。

2.信用卡收入毎日由雙方接待員核對無誤簽名作實後，再由各醫師簽名核實。

3.每月1號會將各人現金、信用卡收入扣除手續費後發回。

六.銷售安排

1.經穴激活集團及經穴激活動物中心合作的銷售部份，會將7月31日前的收入及開支計清，而截至現時為止，經銷商共2個，一個是新加坡的鄭先生，一個是香港的吳先生，往後2個分銷買機收入，兩間公司仍然各佔一半，除此兩個分銷外，由2017年8月份開始，經穴激活集團及經穴激活動物中心分開銷售。

*以上協議經三方商議確立，三方均承諾遵守以上協議。”

14.  The terms which Kwong now seeks to imply into the Cessation Agreement are at paras 10 and 10A of the Amended Defence [A/17-18]:

“10. Alternatively, it is an implied term of the Cessation Agreement that the Shareholders agreed not to take any step to obstruct, disrupt or interfere with each other’s practice as a Chinese medicine practitioner at the Premises, which is necessary to give business efficacy of the Cessation Agreement and represents the obvious intention of the parties.

10A. Furthermore, the Cessation Agreement also contained the following implied terms:

10A.1 The Shareholders shall not make verbal threats of injury/harm against each other, as well as family members and/or staff of other Shareholders.

10A.2 The Shareholders shall not cause verbal abuse, harassment and/or use of offensive language (such as swearing) against each other.

10A.3 The Shareholders shall not cause, attempt to cause or threaten to cause physical harm against each other, as well as family members and/or staff of other Shareholders.

10A.4 As a result of a party breaching the implied terms as pleaded in Paragraphs 10 and 10A above, the innocent party or parties shall be entitled to terminate the Cessation Agreement and seek damages from the defaulting party or parties.”

15.  Further, by way of background, on around 30 May 2016, MAST Medical Group Limited (“the Tenant”) entered into a tenancy with the Landlord of Rooms 1001-1001A of 10^th Floor, Grand Center, 8 Humphreys Avenue, Tsimshatsui, Kowloon (“the Grand Center”) for a fixed term of 3 years from 15 March 2016 to 14 March 2019 [“the Tenancy” or “the Lease”] [C1/11/209-235] at a rent of HK$72,000 per calendar month from 15^th March 2016 to 14^th September 2017 and at a rent of HK$75,000 per calendar month from 15^th September 2017 to 14^th March 2019. Both Lee and Kwong were sureties who undertook to guarantee due performance by the Tenant.

16.  Both Lee and Kwong said they were forced to continue to operate at the Premises due to the continuation of the Tenancy until 14 March 2019. Hence, continuation of their practices under the same roof at the Premises was not a clean break and MAST Medical became a vehicle for the collection of rent to be paid to the landlord and for the payment of expenses. In reality, after the Cessation Agreement, each of Lee, Lau and Kwong practiced separately and not under the MAST Medical’s Medical Center Business.

Contentions for Lee

17.  Lee’s claim is straightforward. It was Kwong that breached Clause 3 of the Cessation Agreement in failing to pay her share of rent and other expenses since December 2017 and she is liable to reimburse Lee for her share of the payments to the Landlord and the electricity company in the total sum HK$480,026.06.

18.  Lee says that the Cessation Agreement in writing is the formal agreement on the logistics and administrative arrangement for the sharing of the Premises for their separate practices.

19.  Lee rejects the “true construction” or alternatively the implied terms at paras 10 and 10A pleaded by Kwong. Lee’s position is that it is well-established that for a term to be implied: (i) it must be reasonable and equitable; (ii) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (iii) it must be so obvious that “it goes without saying”; (iv) it must be capable of clear expression; and (v) it must not contradict any express term of the contract, citing Chitty on Contracts 36^th Edn, 2025, at §17-011; Marks & Spencer Plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742 at §18 and the CFA judgment in Kensland Realty Ltd v Whale View Investment Ltd (2001) 4 HKCFAR 381, at §59.

20.  On Lee’s part, the expression “not to obstruct, disrupt or interfere” (“Obstruction Term”) at para 10 of the Amended Defence should not be implied into the Cessation Agreement as it is imprecise and unclear. It is not a term that goes without saying, and in the context of circumstances leading to the Cessation Agreement, it is not necessary for giving business efficacy.

21.  Further, the implied terms at para 10A of the Amended Defence, referred to as the “Abuse Term” (para 10A.1, 10A.2 and 10A.3) and the “Termination Term” (para 10A.4) should also be rejected as these terms are not obvious without saying nor necessary for giving business efficacy.

Contentions for Kwong

22.  Kwong at para 9 of the AD&CC pleads that on a “true construction” of the Cessation Agreement, Lee, Lau and Kwong had agreed “not to take any step to obstruct, disrupt or interfere with each other’s practice as a Chinese medicine practitioner at the Premises”.

23.  However, by an amendment, the true construction defence at para 9 of the AD&CC is deleted and at para 11 only the allegation of the breach of the implied terms pleaded at paras 10 and 10A remains. This is confirmed by the Agreed List of Issues, issues agreed to be adjudicated.

24.  Kwong’s allegation of breaches are (i) of interference and (ii) verbal and physical threat into six heads, namely:

(i) Trade name registration interference;

(ii) Credit card machine disconnection interference;

(iii) Use of the chop of MAST Medical interference;

(iv) Removal of Kwong’s Online Profile interference;

(v) “False” Reports to Police and to Chinese Medicine Council of Hong Kong interference; and

(vi) Verbal and attempted Physical Intimidation.

25.  These heads of alleged breaches would be investigated and findings of facts arrived at in view of the evidence of the two factual witnesses: Lee and Kwong.

C. The Agreed List of Issues

26.  The Issues for adjudication are these:

“1. Whether Kwong (the Defendant (by original action)) was in breach of the Cessation Agreement?

2. Whether the Cessation Agreement contained the implied terms as pleaded by Kwong in paragraphs 10 and 10A of the Amended Defence and Counterclaim, which are as follows:-

(1) The Shareholders (i.e. the parties herein) agreed not to take any step to obstruct, disrupt, or interfere with each other’s practice as Chinese medical practitioner at the Premises;

(2) The Shareholders shall not make verbal threats of injury/harm against each other, as well as family members and/or staff of other Shareholders;

(3) The Shareholders shall not cause verbal abuse, harassment and/or use of offensive language (such as swearing) against each other;

(4) The Shareholders shall not cause, attempt to cause or threaten to cause physical harm against each other, as well as family members and/or staff of other Shareholders; and

(5) As a result of a party breaching the implied terms, the innocent party or parties shall be entitled to terminate the Cessation Agreement and seek damages from the defaulting party or parties.

3. Whether Lee and Lau (the 1^st and 2^nd Defendants (by counterclaim)) (or any one of them) were in breach of the implied terms in the Cessation Agreement?

4. In the event that Lau was in breach of the Cessation Agreement, whether Kwong's action would nevertheless be in breach of the Cessation Agreement as against Lee.

5. Depending on the Court's findings in paragraphs 1 to 4 above, whether Lee is entitled to damages as claimed.

6. Depending on the Court’s findings in paragraphs 1 to 4 above, whether Kwong is entitled to damages as claimed.”

D. Evidence

LEE’s evidence

27.  Lee gave evidence by her Witness Statement and Supplemental Witness Statement, which stood as her evidence in chief. She was cross-examined.

28.  She confirmed at the Trial her relationship of 30 years with Lau, out of which a daughter was born out of their relationship. Lee gave evidence that MAST technology was developed to take the place of acupuncture. Lee’s evidence is that Lau was a good Chinese medicine practitioner and teacher. In relation to MAST Medical, it was her who handled the operation of MAST Medical. She was taken to C1/242 to C1/257 for the payments made by Lee for Kwong. In was put that these payments were made by Yidao but not by Lee. Lee explained that these payments were made from her account with Yidao and it was so reported to the Inland Revenue Department.

29.  Lee explained that prior to the Cessation Agreement, cash and credit card revenue were paid into MAST Medical and an account would be taken each month, and one half of the net revenue would be distributed to Kwong, Lee and Lau: to Kwong as director’s fee and to Lee and Lau’s account with Yidao. Lee says after the Cessation Agreement, the Medical Center Business ceased and Lee, Lau and Kwong were to operate separately as independent Chinese medicine practitioners, each earning revenue and sharing the rent and expenses for the use of the Premises until the end of the Tenancy Agreement. Lee says that MAST Medical’s role was then limited to that as the Tenant of the Grand Center Premises, that had sub-leased the Premises to Lee, Lau and Kwong under the Cessation Agreement in Chinese 分租合約協議書.

30.  Kwong alleges that an event happened on 17 November 2017 on about 2:10 pm (“17 November 2017 Incident”), described by Kwong as Intimidation and attempted physical assault by Lau. Kwong alleges this event triggered and forced her to pre-maturely terminate her practice at the Premises.

31.  The event was the occasion of an oral argument in the corridor inside the Clinic between Lau and Kwong over staff of Kwong’s mistreatment of Ms Lo (“Lo”) and Ms Fung (“Fung”), staff of Lee and Lau. The event was captured in CCTV (without sound) video and was replayed during the evidence of both Lee and Kwong. Lee who was present at the scene gave evidence against Kwong’s allegation of Lau’s verbal threats of violence against Kwong, her family and her staff. Lee’s case is that the allegation is an exaggeration and an excuse fabricated by Kwong in order to justify her abandoning of her obligations under the Cessation Agreement and her early exit from the Premises.

32.  As to the 17 November 2017 Incident, Lee was taken to para 22 of Lee’s supplemental witness statement that sets out Lee’s responses to Kwong’s allegations in a table by reference to what was recorded in CCTV (without sound) time reference 14:38:44 to 14:46:59. Lee explained:

(i) 14:39:10: She stood to separate Lau and Kwong in order to protect Lau against unnecessary accusations, as Lau habitually speaks with physical motion (習慣性的大動作);

(ii) 14:39:11 to 14:39:44: Lee said she and another assistant restrained Lau, as Lau pushed to reach for room 3 to locate Kwong’s staff to point out her bullying of Lo and Fung.

33.  At para 60 of Kwong’s witness statement [B/69], Kwong extracted and cited paras 2 and 3 of her statement to the Police on 17^th November 2017 (“Police Statement”). The Police Statement was shown to Lee. Lee in response disagreed with the allegation therein and denied Lau had uttered what Kwong attributed to Lau at para 3 of her Police Statement.

34.  It is useful to set out para 3 of her Police Statement:

“於2017 年11 月17 日，大約下午2 時10 分，當時我係公司門口等電梯，我聽到我診所好嘈，之後我番入診所，劉冠良就用手指住我講話：「你個助理玩野，我今日就要打你，我想打你好耐。」跟住劉冠良就衝過黎打我，但當時現場佢老婆李金燕就擋住咗劉冠良，而另一個診所職員亦拉住劉冠良，當時劉冠良就舉高雙拳，不停向住我揮舞，當時我同劉冠良約一尺距離，我不停咁閃避，因為如果我唔閃避劉冠良就會打到我。當時因為李金燕擋住，所以劉冠良打我唔到。李金燕就同劉冠良講：「唔好呀！犯法架。」，劉冠良隨即回應：「我坐監都要打。我要隊冧你全家，叫你老公出黎，你老公係佛山我會叫人去佛山office 攪佢添呀！我今日唔攪你，一年後我都攪你，我黑白兩度都有人，而家即刻call 人上黎！ 」跟住我個助理劉文善就走出黎，劉冠良當時就衝過去打我個助理劉文善，但劉冠良老婆李金燕同另外兩個職員拉住劉冠良，劉冠良就同我助理劉文善講：「我今日唔攪你，一年後我都攪你。」之後劉冠良就返回自己房，而李金不停咁鬧我同我助理，當時我好驚就番左入自己房，同埋叫我助理清潔完診所就好離開。”

35.  As a continuation of the same incident, Kwong’s allegation was that when she left the Premises, Lau followed her to the lift lobby and further verbally intimidated and threatened to harm her and her husband. This is at para 11.7 of the Amended Defence, pursuant to an amendment dated 20^th September 2023 to her Defence dated 19^th August 2019.

36.  Kwong alleged at para 62 of her witness statement of the verbal threats whilst she was waiting for the lift. Lee denied that had happened. As to an audio recording, alleged taken by Kwong, that recorded verbal threats made at the lift lobby, Lee admits as to the content of the audio recording, but denies it happened at the lift lobby.

37.  Kwong also alleged interference with her practice:

(i) On Trade name registration, the trade name was registered by Yidao. Lee’s explanation and evidence was reduced into writing at footnote no 19 of Kwong’s closing submissions. Lee’s understanding was that there was no prohibition against multiple registration using the same trade name, and further she would not have objected to Kwong’s use of the same trade name as the trade name was already exhibited at the Grand Center signboard.

(ii) On Credit card machine disconnection, it was suggested disconnection interfered with Kwong’s business, Lee disagreed.

(iii) On the Use of the chop of MAST Medical, Lee agreed that before the Cessation Agreement, the chop kept by Lee and was used by all. But after October 2017, Kwong had a private chop made without knowledge or consent of MAST Medical. Lee explained after the Cessation Agreement, MAST Medical ceased the Medical Center Business and Lee, Lau and Kwong was to separately operate their practices and it would not be correct to continue to use the chop of MAST Medical for receipts or prescriptions. Lee denied that stopping the use of the MAST Medical chop amounts to interference with Kwong’s practice.

(iv) On the Removal of Kwong’s Online Profile, Lee admitted she did not first discuss with Kwong before such removal. Again, Lee disagreed that removal of Kwong’s online profile amounts to interference with Kwong’s business.

(v) On the Report to Police, Lee’s evidence is that the report was made by her former staff, who had had poor relation with Kwong, and the Police report was not made by Lee. It was suggested that the report to police amounts to interference with Kwong’s practice. Lee disagreed.

(vi) There is also the matter of a report made by Lee to the Chinese Medicine Council of Hong Kong (CII/1264) that resulted in the Council’s reprimand letter to Kwong of March 2018.

38.  On the whole, after hearing the evidence of Lee, I find Lee’s account as to what happened on 17^th November 2017 believable. I considered the inherent probability or improbability of what was alleged to have been uttered by Lau in respect of a staff dispute.

Kwong’s evidence

39.  After Lee gave her evidence in Court and just before Kwong gave evidence, she sought to withdraw the amendment she made to para 11.7 of the AD&CC to introduce the alleged lift lobby incident and delete the corresponding evidence in her witness statement in which: (i) she alleged at para 62 [B/71] an incident at the lift lobby during which she alleged she was harassed with offending threats; (ii) she further alleged she made an audio recording of what was said by Lau on the occasion of the alleged lift lobby incident. It turned out that the recording was not made by Kwong, it was recorded by an assistant Michael who then sent it to Lau’s assistant Elaine, who then had it forwarded to Kwong’s assistant Ms Lau [at para 8 of Kwong’s closing submissions].

40.  Kwong gave evidence as to the alleged verbal threat and attempted physical assault on the 17^th November 2017:

(i) She was questioned on her evidence at B/72, the transcript of the audio recording. To the suggestion that the words did not threaten anyone, in reply, Kwong said you can say so (“你可以咁講”);

(ii) Kwong was also questioned on the 17 November 2017 Incident at the lift lobby, which she described as Intimidation and attempted physical assault (para 62 of her witness statement), that she wanted to retract. Her explanation to the retraction was “英文水平不夠好，講得吾清楚，講錯”. This is significant as her witness statements and the corresponding paragraphs of her AD&CC were made under statements of truth. In fact, Kwong was conversant with the English language in Court;

(iii) She was questioned when she first discovered about the error. She said last week before the trial when she looked at the CCTV. She said she did not notify anyone including her lawyer. She said she did not know she can retract;

(iv) She was shown the CCTV footage at 14:55:53 that showed her leaving the Premises for the lift lobby without anyone following after her. She said she got it wrong;

(v) She agreed that the arguments only happened at the corridor inside the Clinic;

(vi) It was pointed out to her that the CCTV footages were soundless and could not show she was frightened. She disagreed.

(vii) It was pointed out she fabricated the entire lift lobby incident. She disagreed.

(viii) She was asked whether she knew what was disputed. She said she did not know.

(ix) She was shown CCTV footage at about 14:38:54 - 14:38:59 in which Lee was holding a cell phone to show to Kwong how her staff Ms Lau 劉文善bullied Lee’s staff 羅芯芯 and 豐曉燕. She was reminded the dispute was about asking her staff Lau to come forth to answer to the bullying. Kwong said in reply “I remember”. Kwong’s evidence had been reduced into writing at footnote no 33 of her closing submissions. Kwong also agreed when shown the video passage 14:39:31 – 14:39:50 that Lau attempted to open the door of room 3 to look for Ms Lau but not rushing forward to attack her.

41.  Kwong gave evidence as to Interference and other matters at the trial:

(i) She admitted she was taught the MAST procedure by Lau and Lee in 2015 and MAST treatment requires the use of equipment that was developed by Lau and Lee;

(ii) MAST Medical was incorporated in about March 2016;

(iii) She understood her duties as a director of MAST Medical was to act in the best interest of the Company;

(iv) She disputed that ending their cooperation (“分手”) was unavoidable, due to the volume of MAST equipment being stocked at MAST Medical;

(v) She agreed after the Cessation Agreement each of three of them was to operate separately and to bear their respective expenses (“自己生意”);

(vi) She denied she wanted to leave the Premises after the Cessation Agreement;

(vii) She agreed MAST Medical would earn no profit from their practices after the Cessation Agreement;

(viii) She said even after the Cessation Agreement, MAST Medical still had the Distribution Business;

(ix) As to the chop of MAST Medical, it was put to Kwong she could sign herself or use other chops and as director, Kwong should not harm MAST Medical. She agreed in principle (原則上同意);

(x) She agreed under Clause 4 of the Cessation Agreement, each of three of them were allotted different rooms to use;

(xi) She agreed she had not paid per share of the rent in respect of the Premises and expenses since December 2017;

(xii) It was put to Kwong that MAST Medical is the name of the company but not a trademark. She disagreed;

(xiii) On the use of the credit card machine, it was put to Kwong as MAST Medical was under liquidation and Kwong knew a final account had to be carried out for determination and distribution of profit to be shared between MAST Medical and MAST Animal, all were denied use of the MAST Medical’s credit card machine. Kwong disagreed. She said there was no board meeting of MAST Medical and she had not agreed not to use the credit card machine;

(xiv) She agreed there was no further discussion on the use of the credit card machine since 18 October 2017;

(xv) She agreed another credit card machine in her personal capacity can be applied for and obtained; it is her evidence that she had applied for a credit card machine for her practice at the New location in January 2018;

(xvi) As to the use of MAST Medical chop, she agreed inability to use the MAST Medical chop did not affect her business;

(xvii) It was put to Kwong as it was not MAST Medical that received cash or credit card payments for services rendered by Kwong (不是公司收錢) since the Cessation Agreement, the Company chop should not be used. She disagreed;

(xviii) On the removal of her online profile from the MAST Medical’s website, it was put to Kwong that it was a matter of internal dispute, not a matter of the Cessation Agreement. She agreed;

(xix) She agreed it was MAST Medical that paid for the website;

(xx) She agreed ceasing to be displayed on the website of MAST Medical affected her MAST Medical’s rights, not that of the Cessation Agreement;

(xxi) It was suggested that the website was for the promotion of the MAST technique and not for their individual practices, she disagreed;

(xxii) She agreed after the return of the MAST equipment, she no longer practiced MAST療法;

(xxiii) It was pointed out to Kwong as she no longer practices MAST, it was right to delete her profile from the MAST website; it was pointed out to Kwong that the deletion did not affect her practice. She agreed and amplified that her practice was mainly about acupuncture and prescription of Chinese medicine and she thrived because of her own reputation;

(xxiv) As to the complaint to the Chinese Medicine Council of Hong Kong, she agreed it did not affect her practice at the Premises;

(xxv) She also agreed it was not Lee that reported her to the Police, it was a staff of Lau. She also had to agree the report to the Chinese Medicine Council of Hong Kong resulted in a cautioning letter to her, reminding her to exhibit her practicing certificate in a visible place in the Clinic; and

(xxvi) She was also questioned on how she computed her loss of income claim, the rental difference claim and her renovation fees claim.

E. Analysis and Findings on the Issues

42.  What had happened at the 17 November 2017 Incident is central and determinative of this case, it is the verbal threats of harm and injury alleged to have been uttered by Lau as recorded at para 3 of Kwong’s Police Statement, repeated at para 34 above.

43.  I find in respect of a staff dispute, it is improbable that Lau had said to Kwong：「你個助理玩野，我今日就要打你」, 「我坐監都要打。我要隊冧你全家，叫你老公出黎，你老公係佛山我會叫人去佛山office 攪佢添呀！我今日唔攪你，一年後我都攪你，我黑白兩度都有人，而家即刻call人上黎」, 『劉冠良就同我助理劉文善講：「我今日唔攪你，一年後我都攪你。」』

44.  In the Police Statement, it was also alleged that Lau lunged forward to attack Kwong:「當時劉冠良就舉高雙拳，不停向住我揮舞，當時我同劉冠良約一尺距離，我不停咁閃避，因為如果我唔閃避劉冠良就會打到我」. This is not made out when the video passages were viewed. There was an argument between Kwong and Lau over staff behavior and I find Kwong’s account inflated.

45.  Burden is upon Kwong to make good this serious allegation of the verbal threats of harm and injury. Other than her own assertion, the only evidence before this Court is the video without sound. There is no evidence from Kwong’s assistants who were present at the scene of the incident. The recorded audio passage of part of what was said had been reduced into a transcript in writing at CII/1355-1356. It does not contain the alleged verbal threats.

46.  Actually, the CCTV footages from 14:39:00 to 14:46:00 shown that Kwong was robust in arguing with Lau during which they both pointed fingers and gestured to each other. It was not a case of Kwong gripped with fear of harm due to Lau’s threats. Further, when shown the footages at 14:44:17, Kwong admitted that Lau was not pointing his finger at her, but was directed that at her staff Ms Lau 劉文善.

47.  I also take note of the Lau’s Interview Records with the Police. In Lau’s interview on 21^st November 2017, he denied the allegations made against him (CI/873-874) and Lau also gave an account to the Police as to what had happened on 17^th November 2017 (CI/875- 877).

48.  In Kwong’s statement to the Police, it was her account that she tried to slip away when Lee/Lau was not in the corridor. This statement is proved to be incorrect as the CCTV footages showed that Kwong openly lingered in the corridor and walked past Lee when she departed. In her evidence, Kwong said she departed openly “光明正大走”. The footage also showed that she did not slip away in fear.

49.  All the above leads me to the conclusion that Kwong is not credible and she tends to inflate and fabricate. Her account of what was alleged to have been said by Lau is rejected.

Issue 1: Whether Kwong (the Defendant (by original action)) was in breach of the Cessation Agreement?

The Cessation Agreement in Chinese is 分租合約協議書, in which the terms specified are:

一.分租人：

1.劉冠良先生HKID：A898945⑷

2.李金燕女士 HKID：G571971(1)

3.鄺銥鈴女士 HKID：G674877⑷

二.分租地址：九龍尖沙咀堪富利士道8號格蘭中心1001-1A

分租日期：2017年8月1日至2019年3月14日

三.租金計算方法：根據租約每月將電費、租金、管理費及差餉(如有)分為三份，每個分租人負責繳交一份。

*每月租金按恒隆地產發出月結單為準而電費亦按中電發出的電費單為準。

四.分租守則

1. 大堂、走廊、接待處、茶水間、1號房屬共同使用空間。

2. 其餘空間分配組合如下：

A.劉冠良：現時使用的醫師房及4號、5號房。

B.李金燕：2間醫師房及6號房。

C.鄺銥鈴：現時使用的醫師房、走廊的藥櫃及2號、3號房。

*各人可獲房間鎖匙，日後房內一切設備、管理、維修、清潔、使用等權利或義務，皆歸使用者所有，但必須保持房內清潔，不能有影響衛生的情況出現。

3. 共同使用空間之清潔每人負責2天，所有清潔用品由各人自行負責。

4. 所有營運開支均歸各人自行負責，因鄺銥鈴醫師仍需經由經穴激活集團有限公司聘請人員繼續營運，故由2017年8月份開始所聘員工之一切薪酬福利、強積金、長期服務金或日後之遣散費用等相關支出，皆由鄺銥鈴醫師負責。

五.財務安排

1.每日收入現金由各人核數後存入恒生銀行帳戶：924060593883(經穴激活集團有限公司)，入帳後需交回入數紙以作記帳之用。

2.信用卡收入毎日由雙方接待員核對無誤簽名作實後，再由各醫師簽名核實。

3.每月1號會將各人現金、信用卡收入扣除手續費後發回。

六.銷售安排

1.經穴激活集團及經穴激活動物中心合作的銷售部份，會將7月31日前的收入及開支計清，…，由2017年8月份開始，經穴激活集團及經穴激活動物中心分開銷售。

*以上協議經三方商議確立，三方均承諾遵守以上協議。”

50.  It is clear from clause 3 of the Cessation Agreement that each of the three signatories was to bear one third of the monthly electricity charges, rent, management fees and rates (if any). And Kwong was in breach of the Cessation Agreement when she failed to pay one third of the monthly sums agreed to be payable by each of them for the months of December 2017 to March 2019, totaling 16 months. It appears at Annex-1 to the Statement of Claim (“SoC”).

51.  Kwong at para 5 of her closing submissions explained that she reluctantly signed the Cessation Agreement because of her investment in MAST Medical. But having put her signature on the dots, she is bound by the terms therein.

Issue 2: Whether the Cessation Agreement contained the implied terms as pleaded by Kwong in paragraphs 10 and 10A of the Amended Defence and Counterclaim?

52.  First, the context is the Cessation Agreement being signed to alter the arrangement and cease the Medical Center Business of MAST Medical, to hence forth re-arrange for Lee, Lau and Kwong to practice separately at the Premises until termination of the Lease and to share rent and expenses during the remaining 16 months of the Lease.

53.  Second, the Cessation Agreement was entered into because of numerous disagreements between Kwong and Lee/Lau which made the cessation of their cooperation inevitable. It must have been foreseen that there may be disagreements and differences and hence arguments while Lee, Lau and Kwong continued to occupy and share the Premises.

54.  Third, the Cessation is clear as to the sharing of costs and the Cessation Agreement ended with the reminder that all the signatories were to undertake to honour and comply with the terms of the Cessation Agreement: 以上協議經三方商議確立，三方均承諾遵守以上協議.

55.  It is not disputable that the key requirement of an implied term is one of necessity and not of reasonableness. In Marks and Spencer Plc at paras 23, 24 and 29, Lord Neuberger stated that:

“23 First, the notion that a term will be implied if a reasonable reader of the contract, knowing all its provisions and the surrounding circumstances, would understand it to be implied is quite acceptable, provided that (i) the reasonable reader is treated as reading the contract at the time it was made and (ii) he would consider the term to be so obvious as to go without saying or to be necessary for business efficacy. (The difference between what the reasonable reader would understand and what the parties, acting reasonably, would agree, appears to me to be a notional distinction without a practical difference.) The first proviso emphasises that the question whether a term is implied is to be judged at the date the contract is made. The second proviso is important because otherwise Lord Hoffmann’s formulation may be interpreted as suggesting that reasonableness is a sufficient ground for implying a term. (For the same reason, it would be wrong to treat Lord Steyn’s statement in Equitable Life Assurance Society v Hyman [2002] 1 AC 408, 459 that a term will be implied if it is “essential to give effect to the reasonable expectations of the parties” as diluting the test of necessity. That is clear from what Lord Steyn said earlier on the same page, namely that “The legal test for the implication of … a term is … strict necessity”, which he described as a “stringent test”.)

24 It is necessary to emphasise that there has been no dilution of the requirements which have to be satisfied before a term will be implied, because it is apparent that the Belize Telecom case [2009] 1 WLR 1988 has been interpreted by both academic lawyers and judges as having changed the law. Examples of academic articles include Chris Peters, “The Implication of Terms in Fact” [2009] CLJ 513, Paul S Davies, “Recent Developments in the Law of Implied Terms” [2010] LMCLQ 140, John McCaughran, “Implied Terms: The Journey of the Man on the Clapham Omnibus” [2011] CLJ 607 and JW Carter and Wayne Courtney, “Belize Telecom: a reply to Professor McLauchlan” [2015] LMCLQ 245. And in Foo Jong Peng v Phua Kiah Mai [2012] 4 SLR 1267, paras 34—36, the Singapore Court of Appeal refused to follow the reasoning in the Belize Telecom case at least in so far as “it suggest[ed] that the traditional ‘business efficacy’ and ‘officious bystander’ tests are not central to the implication of terms” (reasoning which was followed in Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] SGCA 43). The Singapore Court of Appeal were in my view right to hold that the law governing the circumstances in which a term will be implied into a contract remains unchanged following the Belize Telecom case.

29 In any event, the process of implication involves a rather different exercise from that of construction. As Bingham MR trenchantly explained in the Philips case [1995] EMLR 472, 481:

“The courts’ usual role in contractual interpretation is, by resolving ambiguities or reconciling apparent inconsistencies, to attribute the true meaning to the language in which the parties themselves have expressed their contract. The implication of contract terms involves a different and altogether more ambitious undertaking: the interpolation of terms to deal with matters for which, ex hypothesi, the parties themselves have made no provision. It is because the implication of terms is so potentially intrusive that the law imposes strict constraints on the exercise of this extraordinary power.”

56.  It is clear that the Cessation Agreement is operable without the alleged implied terms, these terms in the context of the Cessation Agreement 分租合約協議書 are not obvious without saying.

57.  Having considered the authorities, Chitty on Contracts 36^th Edition, 2025, para 17-011 and Marks and Spencer Plc, I do not find that the terms of the Cessation Agreement to be necessary and as a result they are not implied.

58.  To be complete, I will deal with sub-issues (1), (2), (3), (4), (5) in three groups.

59.  Sub-issues (2), (3) and (4) concern paras 10A.1, 10A.2 and 10A.3 of the AD&CC. These are the terms that the Kwong seeks to imply as the Non-Hostility Terms. As I have found that Kwong’s allegation of threats of violence of Lau are not proved and are rejected, there is strictly no need to deal with these sub-issues, even if these implied terms are found.

60.  Clause 10A.1 reads: “The Shareholders shall not make verbal threats of injury or harm against each other, as well as family members and/or staff of other Shareholders”.

61.  Clause 10A.2 reads: “The Shareholders shall not cause verbal abuse, harassment and/or use of offensive language (such as swearing) against each other”.

62.  Clause 10A.3 reads: “The Shareholders shall not cause, attempt to cause or threaten to cause physical harm against each other, as well as family members and/or staff of other Shareholders”.

63.  The Cessation Agreement in the first place is between the parties, the natural persons thereto, and not in their capacities as the shareholders of MAST Medical.

64.  Secondly, many of the terms sought to be implied are imprecise such as verbal abuse, harassment and/or use of offensive language. In short, the terms suffer from the defect of lack of clear expression or scope, such that they are not capable of being defined.

65.  Sub-issue (1) concerns para 10 of the AD&CC and deals with the implied term of non-interference / non-obstruction.

66.  Clause 10 of the AD&CC reads: “it is an implied term of the Cessation Agreement that the Shareholders agreed not to take any step to obstruct, disrupt or interfere with each other’s practice as a Chinese medicine practitioner at the Premises, which is necessary to give business efficacy of the Cessation Agreement and represents the obvious intention of the parties”.

67.  First, as before, the contracting parties are natural persons, and they did not enter into the Cessation Agreement in their capacities as the Shareholders of the MAST Medical. Second, it is not necessary to have the implied term at Clause 10 to give business efficacy to the Cessation Agreement. Third, there is no basis for the assertion that Clause 10 represents the obvious intention of the parties. Importantly. The words “obstruct, disrupt or interfere” are vague, imprecise and ambiguous and this inherent difficulty goes squarely against Clause 10 being implied.

68.  Kwong seeks to have Clause 10 implied for the purpose of her allegation of instances of interference of Lee:

(i) Disconnection of the credit card machine of MAST Medical;

(ii) Disallowing Kwong’s use of the chop of MAST Medical;

(iii) Removal of Kwong’s online profile on MAST Medical’s website;

(iv) Misappropriation of Trade Name registration;

(v) Lee’s “false” report to the Chinese Medicine Council of Hong Kong;

(vi) The “false” Police report by Lee’s former staff.

69.  Kwong in Court emphasized her rights as a shareholder of MAST Medical. But disputes (i), (ii), (iii) are matters for MAST Medical, between Kwong and Lee/Lau as the shareholders and directors and did not arise out of the Cessation Agreement. Importantly, it was agreed by Kwong that disputes (i), (ii), (iii) and (iv) are internal disputes and did not affect her practice.

70.  Further, arising out of the termination of the Medical Center Business of MAST Medical, the new arrangement was for each of Kwong, Lee and Lau to practice independently and separately, and in the circumstance, discontinuation of the use of the MAST Medical’s credit card machine and chop may be necessary, as each of them could receive fees from clients and issue separate receipts. The parties can also have their profiles separately placed on websites and register separate trade names.

71.  Kwong also agreed that the complaint to the Chinese Medicine Council of Hong Kong did not affect her practice at the Premises. In fact, the complaint resulted in a reprimand letter dated 1^st March 2018 from the Chinese Medicine Council of Hong Kong to Kwong. There is also no evidence that the complaint to the Police was made by Lee.

72.  So clearly, even had Clause 10 been allowed to be implied (which it is not), and there been some interference, it did not impact Kwong’s practice to the extent that compelled her to vacate the Premises on 24^th November 2017 and justify her breach in ceasing to pay her 1/3 share of the rent and expenses from December 2017 to March 2019.

73.  Sub-issue (5): whether, as a result of a party breaching the implied terms, the innocent party or parties shall be entitled to terminate the Cessation Agreement and seek damages from the defaulting party or parties?

74.  Sub-issue (5) arises out of para 10A.4 of the AD&CC, the implied Termination Term.

75.  This is the term relied upon by Kwong to justify her purported termination of the Cessation Agreement and her liability to pay her 1/3 share of the rent and expenses. It was Kwong’s case that “Lau’s Attack constitutes Repudiatory Breach”, citing the case Universe Artiste Management Ltd v Kong Yi Ching Elanne [2022] HKCFI 443 at para 176 at paras 66-67 of Kwong’s closing submissions. As said earlier, attack or attempted attack is not found. Even had there been any inconvenience or minor interference, this was to be expected due to the stressed relationship between Kwong and Lee/Lau, carry-over from or before the signing of the Cessation Agreement. In this case some interference (even if accepted) was minor and did not affect Kwong’s practice, and as such it did not go to the root and affect the purpose and use of Kwong’s rooms at the Premises for her practice pursuant to the terms of the Cessation Agreement. In short, first, it is not necessary to imply such an implied Termination Term; second, Kwong should not be allowed to terminate the Cessation Agreement upon the enumerated instances of alleged interference at paras 11.1 to 11.6 of the AD&CC and the letter issued by Kwong’s solicitors Messrs Betty Chan & Co dated 29^th November 2017; third, Kwong did not suffer and is not entitled to seek the damages she pleads at paras 13.1 to 13.3 of the AD&CC.

Issue 3: Whether Lee and Lau (the 1^st and 2^nd Defendants (by counterclaim)) (or any one of them) were in breach of the implied terms in the Cessation Agreement?

76.  Having rejected the necessity of the terms Kwong seeks to imply into the Cessation Agreement pursuant to paras 10 and 10A of the AD&CC, Lee and Lau could not have been in breach of the rejected terms sought to be implied into the Cessation Agreement.

Issue 4: In the event that Lau was in breach of the Cessation Agreement, whether Kwong's action would nevertheless be in breach of the Cessation Agreement as against Lee?

77.  I have found that Kwong’s allegations against Lau are unfounded, as such, Lau could not have been in breach of the Cessation Agreement. Kwong had admitted at para 17 of the AD&CC of not having paid her 1/3 share of the rent and expenses in respect of the Premises for 16 months, from December 2017 to March 2019, and her failure to pay was in breach of clauses 3 and 4.4 of the Cessation Agreement.

Issue 5: Depending on the Court's findings in paragraphs 1 to 4 above, whether Lee is entitled to damages as claimed?

78.  It is pleaded at para 13(2) of the SoC “MAST Medical was simply a vehicle through which rent was to be paid to the landlord of the Premises”.

79.  At para 20 of the AD&CC, Kwong’s pleads she knew “the Shareholders would continue to practice as a Chinese medicine practitioner at the Premises” and the rent of the Premises would continue to be paid. Kwong further pleads at para 21 of the AD&CC that “Neither Lee nor Lau would have to pay any rent or electricity expenses if the same were settled by MAST Medical …”.

80.  In the first place, given the Cessation Agreement, Kwong, Lee and Lau were each to be responsible 1/3 of the rent and electricity charges pursuant to Clause 3 to the Cessation Agreement.

81.  I accept as a fact that as surety to the Lease and a director of MAST Medical, Lee did pay for Kwong’s 1/3 share of the rent and electricity expenses in the total amount of HK$480,026.06 at Annex-1 to the SoC.

82.  Evidence is adduced at C1/242 to C1/257 of Lee’s payment for Kwong in respect of the monthly sums to MAST Medical through her account with Yidao (易道醫療中心有限公司) to MAST Medical.

83.  Kwong also admits at para 23 of the AD&CC that she did not pay or re-imburse Lee the sum of HK$480,026.06.

84.  As such, I find that Lee is entitled to be reimbursed by Kwong in the amount of HK$480,026.06.

Issue 6: Depending on the Court’s findings in paragraphs 1 to 4 above, whether Kwong is entitled to damages as claimed?

85.  Arising out of the Court’s findings in paragraphs 1 to 4 above, I find that Kwong is not entitled to the damages she claims, as pleaded at para 13 of the AD&CC.

F. Conclusion

(1) It is ordered that the Defendant shall pay to the Plaintiff forthwith the sum of HK$480,026.06, being the sum the Plaintiff paid on behalf of the Defendant arising out of the Defendant’s liability to pay under the Cessation Agreement.

(2) Interest shall accrue at the judgment debt rate from the date of this Judgment to the date of actual payment by the Defendant.

(3) The Defendant’s Counterclaim is dismissed.

(4) Costs is to follow the event, with the Defendant being liable to pay the Plaintiff’s costs of the action on party and party basis with certificate for counsel, to be taxed if not agree. This cost order is made on nisi basis with liberty for any party to apply to vary this order within 14 days from the date of this Judgment.

(5) Lastly, I thank Counsel for their useful assistance.