Time Rich 08 Ltd v. Dbe (HK) Ltd and Others

HCA 566/2017

[2018] HKCFI 116

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 566 OF 2017

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REASONS FOR DECISION

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Introduction

1.This is an application by Ds for stay of execution pending appeal against the judgment handed down by this Court on 23 November 2017 (“Judgment”), pursuant to which an order was made under Order 14 rules 1 and 2 of the RHC for final judgment in favour of P for a sum of HK$2,329,459.59 and interlocutory judgment that Ds do pay damages for repudiation of the tenancy agreement to be assessed together with costs.  

2.At the hearing on 17 January 2018, I have declined to grant a stay.  Here are my reasons.

3.Save otherwise indicated, I shall adopt the same abbreviations as in the Judgment.

4.The parties’ dispute arose out of the Tenancy Agreement, whereby the Premises were let by P to D1 with D2 and D3 as guarantors for the performance of the agreement.

5.D1 failed to pay the rent and related expenses and P issued the writ herein seeking possession and claiming outstanding amounts and mesne profits.  About a week later, D delivered vacant possession of the Premises.

6.Ds’ defence and D1’s counterclaim was essentially based on P’s breach of express and implied terms of the Tenancy Agreement in that there had been water leakage which led to flooding and that D1 had suffered loss and damage as a result thereof.

7.There were 3 implied terms which Ds’ Counsel, Mr Dickson Chan, had argued should be read into the Tenancy Agreement.  As stated in the Judgment, I came to the view that, amongst other things, the Tenancy Agreement was a standard tenancy agreement with standard clauses, and having considered the express provisions, the tenancy agreement was clear and effective and there were no implied terms or was it necessary to imply any terms.  Further the water leakage was not caused by P or any other person “lawfully claiming under or in trust for P” and there was no breach on the part of P, as the leakage was caused by unrelated third party and D1 failed to pay the rent even prior to the 1^st period of water leakage.

Grounds of Appeal

8.There were 8 grounds of appeal, and Grounds 1 to 5 were over this Court’s finding that there were no implied terms.  Ground 6 was in relation to this Court’s holding that there was no breach of Implied Terms by P, and Grounds 7 and 8 were over this Court not finding any triable issues as to the effects of the water leakage and the Court’s conclusion that D’s assertion that the water leakage had a serious effect was incapable of belief.

Whether arguable appeal

9.As said by Ma J, as he then was, in Star Play Development Ltd v Bess Fashion Management Co Ltd,unrep, 7 June 2002, HCA 4726/2001.  Ds had to satisfy this Court that there were arguable grounds of appeal.

10.So far as Grounds 1 and 2 were concerned, as set out in the Judgment it was clearly this Court’s view that the Implied Terms (1) and (2)   contradicted express provisions of the Tenancy Agreement.  As for Ground 3 the complaint was that this Court did not clearly state which side’s submissions were accepted/rejected.  Mr Chan’s then argument was that Clause 3.1 of the Tenancy Agreement was not a “Quiet Enjoyment Clause”.  In paragraph 60, as pointed out by Ms Lee, a similar clause was referred to Waung J to be a “Quiet Enjoyment Clause” in the case cited by her.  Mr Chan submitted that the case was wrongly relied on by the Court and that Implied Term (3) must be determined with regards the circumstances of this case.  However, this Court did consider the Tenancy Agreement in the present case and the Court’s conclusion was clearly set out in paragraph 62 of the Judgment.

11.I agree with Ms Lee that Grounds 4 and 5 were misconceived. As for Grounds 6, 7, 8, Mr Chan was repeating the same arguments as those at the then hearing.

12.Having considered both parties’ submissions and authorities, I found there were no arguable grounds in D’s appeal.   

Whether irreparable prejudice to Ds

13.The order Ds seek to appeal against is a money judgment only and there was no suggestion and no evidence that P would not be able to repay in the event of a successful appeal.  There was no suggestion that the appeal would be rendered nugatory if no stay were to be granted.

14.Further, there was no sufficient evidence for Ds to suggest there would be serious deleterious effect of execution of the money judgment in the sum of HK$2,329,459.59 with interest and costs.  D1 appeared to have been operating its business since at least when the Tenancy Agreement was entered into in October 2015, and yet no audited accounts were provided by Ds apart from a “balance sheet”.  No supporting evidence was provided by D2 and D3 as to their own financial position.

Exercise of discretion

15.P being the successful party should not be deprived of the fruits of its success.  Having considered the above and the submissions from both sides, I declined to grant a stay.

Order

16.Ds’ summons issued on 13 December 2017 was accordingly dismissed with costs to P summarily assessed to be HK$60,000, to be paid by Ds within 7 days.

Ms Connie Lee, instructed by Tsangs, for the plaintiff

Mr Dickson Chan, instructed by Henry Fok & Co, for the 1^st to 3^rd defendants