Shum Wai Kwan v. Ho Sun Lee Mahjong School
Read the full judgment text of CACV 28/1982 on BabelCite. This Court of Appeal judgment was delivered on 8 April 1982.
1. The respondent Tenant took out an originating summons by which it sought in effect a ruling as to the true construction of three tenancy Agreements into which it had entered with the Landlord. The Agreements were not in fact identical but it was agreed in the court below, and accepted before us, that the material clause should properly be translated as follows:
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CACV000028/1982
BETWEEN
_________ Coram: Sir Alan Huggins, V.-P., Yang & Barker, JJ.A. Date: 8 April 1982 ___________ JUDGMENT __________ Sir Alan Huggins, V.-P. : 1. The respondent Tenant took out an originating summons by which it sought in effect a ruling as to the true construction of three tenancy Agreements into which it had entered with the Landlord. The Agreements were not in fact identical but it was agreed in the court below, and accepted before us, that the material clause should properly be translated as follows:
It was common ground that if Clause 27 was for any reason not applicable the rent on a first renewal would be that which was in each Agreement prescribed by Clause 28. 2. The Tenant argued that Clause 27 was void for uncertainty and this contention found favour with the trial judge. At the outset he rightly said that he had to assume that the parties had meant something by the words they had used, and he thought their object was clear:
Mr. Wei relies on this as a correct conclusion, whilst Mr. Cheung submits that the judge was right in thinking that Clause 27 was intended to be a "gold value clause but not that it was necessarily intended to safeguard the Landlord. This apparently simple issue is fundamental to the Landlord's case. Mr. Wei did not point specifically to any particular words as indicating an intention to favour the landlord, but I take it that he bases his contention upon the fact that it is the landlord who is given the option. To that extent the clause must, of course, favour the Landlord, but it does not follow that once the option has been exercised the clause must continue to favour the Landlord. That depends upon the proper construction of the remainder of the clause and thus begs the question which we have to decide. 3. The judge nevertheless applied the right test when he asked himself whether the concept underlying the clause was uncertain when one approached the words used with reasonable goodwill: see Brown v. Gould [1972] 1 Ch. 33, 61. It appeared to him that, although this was intended to be "a gold value clause" , it was not clear how it was to operate. First he said that:
That seems to me to be a difficulty which arises from his own alternative way of putting what he understood to be the Landlord's contention. The clause does not require the percentage rise in the price of gold to be applied to either rent. What the landlord was entitled to choose, if he wished, was "the price of 99% gold" for rent payment. The price of that quantity of gold? What the judge was saying in effect was that, if it was the quantity which the original rent would have purchased at the date of the agreement, it would be 13.84778 taels, whereas, if it was the quantity which the rent fixed by Clause 28 would have purchased at the date of first renewal, it would be 24.048625 taels. Merely on the wording of the clause either alternative is equally possible. However, Mr. Wei submits that as a matter of commercial sense the latter was clearly intended, for on renewal Clause 28 allowed the Landlord a rent of $22,750.00 in any event (which was an increase of 68.702% after three years and would take care of the actual rate of inflation) and he would rot opt for "the gold value clause" unless he would thereby receive more than that Burn. This, Mr. we says, would have meant that if the earlier date was intended the parties in 1978 were contemplating the possibility that the price of gold might rise more than 73.665% and that this cannot have been in their minds, otherwise they would not have made the option depend upon an increase of only 10%. 4. Mr. Cheung concedes that there is some force in the argument that the quantity of gold should be 24.048625 taels, but he says that, it remains uncertain whether, in choosing the price of that quantity of gold for rent payment, it was intended that the Landlord should opt for a rent which was to become fixed throughout he term at the price ruling at the date of renewal or for a rent which would vary with subsequent rises and falls in the price of gold. Mr. Wei replies that it must be an unvariable rent and that any other interpretation would only be suggested by someone who was looking for uncertainty and who was not approaching the matter with reasonable goodwill. That seems to me to be going too far and to call for a liberality of interpretation greater even than that which the latest authorities demand. It calls for bias rather than for goodwill. If the date of renewal had come when the market price of gold was at an exceptionally high peak, the Tenant could have been compelled to continue paying an exorbitant rent throughout the term. I see nothing unseemly, or indeed novel, in a rent which is pegged to a specified quantity of a named commodity although varying with the market price of that commodity. Had the rent been payable in arrears I suppose it might have been argued that, if a variable rent had been intended, the clause would have stated more specifically whether each payment of rent was to be calculated by reference to the market price of gold ruling on the date on which that payment fell due or by reference to the average market price during the whole period in respect of which the payment of rent was being made. However, by Clause 4 the rent was payable in advance and, if a variable rent was intended, it could only be calculated by reference to the market price on the date on which each payment fell due. 5. I have come to the conclusion that Mr. Justice Fuad was right and that Clause 27 was void for uncertainty. The formal Judgment (Order) drawn up, however, was hardly consistent with the decision of the learned judge. What had been sought was not orders but declarations, the second being as to the rent payable upon renewal. That declaration could not be made in the form suggested by the summons, because the Plaintiff was not entitled to renew the tenancy agreement pursuant to Clause 28: there should have been a declaration that upon renewal the rent payable would be as prescribed by Clause 28 in each Agreement. I would therefore dismiss the appeal but direct that judgment for the Plaintiff be entered accordingly. 6. There is a matter of practice to which I must refer. A few months ago it was agreed by the judges that when copies of a recent judgment were circulated amongst them those copies would be accompanied by a brief resume, showing the nature of the case and the ratio decidendi. Although this was intended merely as a convenience to the judges themselves, it has apparently become a practice that the resume should be attached to copies supplied to the parties or otherwise made available to the public. As a result we sometimes find, as in this case, that a copy of the resume is included in a record on appeal. It may not be long before counsel try to rely upon such a resume as an aid to the interpretation of the judgment to which it is attached. The practice is wrong and must not be allowed to continue. The resume forms no part of the judgment, and where the judgment is one of the Court of Appeal is not even approved by all the judges who were sitting. It is the duty of the court staff to ensure that the resume is attached only to such copies as are circulated to those for whom it is intended. If a copy should come into the hands of a practitioner, it should in no circumstances be included in a record on appeal. Yang, J.A. : 7. This has not been an easy case. Here we have a clause which is capable of more than one reasonable interpretation. I agree that there is an uncertainty of concept. I too would dismiss the appeal. Barker, J.A. : 8. I agree. 8th April 1982. |