Lai Fung Lin v. Saddiq Environmental Solutions (Hong Kong Ltd) and Another

HCA 2224/2019

[2021] HKCFI 698

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2224 OF 2019

____________

_____________

Before: Deputy High Court Judge Le Pichon in Chambers

Date of Hearing: 8 March 2021

Date of Decision: 8 March 2021

Date of Reasons for Decision: 16 March 2021

_________________________________

REASONS FOR DECISION

_________________________________

1.This was an appeal by Majid Abdul (“the 2^nd defendant”) from the order of Master Connie Lee dated 15 September 2020 granting summary judgment to the plaintiff against Saddiq Environmental Solutions (Hong Kong) Limited (“the 1^st defendant”) and the 2^nd defendant. At the conclusion of the hearing, the 2^nd defendant’s appeal was dismissed (with costs to be summarily assessed) for the reasons which I now hand down.

Background

2.Lai Fung Lin (“the plaintiff”) is the registered owner of a unit in an industrial building in Yuen Long (“the property”).  

3.Under a tenancy agreement dated 4 February 2019 the plaintiff granted the 1^st defendant a two-year term of the property from 26 January 2019 to 25 January 2021 at the rate of $80,000 per month.  The 1^st defendant was also responsible for paying the rates, government rent and management fees in the total sum of $16,500 per month.

4.The 2^nd defendant is the sole director and shareholder of the 1^st defendant.  He executed a deed of guarantee (“the Guarantee”) also dated 4 February 2019 to guarantee the due performance of the Tenancy Agreement by the 1^st defendant.

5.The plaintiff brought these proceedings against the 1^st defendant for vacant possession of the property and against both defendants the sum of $193,000 being arrears of rent, rates, government rent and management fees up to 25 November 2019 together with mesne profits until delivery up of vacant possession. 

6.The Master entered the final judgment in favour of the plaintiff against the defendants.

This appeal

7.Mr Allan, counsel for the 2^nd defendant, raised the following issues in his written submissions:

(1)  whether the Guarantee is a deed;

(2)  whether the Guarantee is enforceable because of a lack of consideration;

(3)  whether the High Court is the proper court for these proceedings against the 2^nd defendant; and

(4)  whether the 2^nd defendant’s case is credible.

8.At the hearing, surprisingly, counsel chose not to make oral submissions on any of the issues and, instead, to rest on his written submissions. In the brief exchange counsel had with the Court, it emerged that the central (if not only) issue of the appeal is whether the 2^nd defendant has raised any triable issue as to when the Guarantee was signed.  

9.The Guarantee bears the date 4 February 2019.  It is the plaintiff’s case that the 2^nd defendant attended the office of her solicitors on 4 February 2019 and signed both the Tenancy Agreement and the Guarantee.

10.The 2^nd defendant’s evidence is that he sought independent legal advice on receipt of the draft documents from the plaintiff, and after receiving that advice he decided only to sign the Tenancy Agreement and not the Guarantee.  

11.To support his case, the 2^nd defendant relied on an email dated 13 February 2019 sent to him by Mrs Ko (a member of staff of the plaintiff’s solicitors) in these terms:

“Please be informed that the Tenancy Agreement has been duly stamped, you are required to do the followings:

(1)  Arrange Mr Chow[1], the estate agent to sign Guarantee as your witness; …”

12.The 2^nd defendant submitted that if the Guarantee had been signed at the same time as the Tenancy Agreement on 4 February 2019, Mrs Ko would not have made that request.  

13.The Tenancy Agreement signed by the 2^nd defendant for and on behalf of the tenant was witnessed by Mr Chau.  It was submitted that if the 2^nd defendant signed the Guarantee on 4 February as is the plaintiff’s case, Mr Chau’s signature would also appear on the Guarantee signed the same day and there would be no reason for the plaintiff’s solicitors to request the 2^nd defendant to arrange for Mr Chau to sign the Guarantee as witness on 13 February 2019.  Hence, it was said that a triable issue arises as to the date when the Guarantee was executed which should go to trial.

14.The evidence shows that the 2^nd defendant admitted the plaintiff’s allegations that both the Tenancy Agreement and the Guarantee were signed on 4 February 2019 in his defence and counterclaim filed on 2 March 2020.  There has been no amendment made to the defence and counterclaim.

15.The 2^nd defendant’s affirmation made 3 months later put forward his new version, namely, that it was signed on or after receiving Mrs Ko’s email on 13 February 2019.  There is no independent evidence (such as an affirmation from Mr Chau) in support of the 2^nd defendant’s new version.

16.In her reply affirmation, the plaintiff explained why the email of 13 February 2019 was sent.  Mr Chau was present on 4 February to witness the signing of both the Tenancy Agreement and the Guarantee but, as he was in a rush, he only put his signature on the Tenancy Agreement as witness and forgot to put his own signature on the Guarantee as witness.

17.Mr Chau did attend the solicitors’ office to add his signature to the Guarantee as witness but there is no evidence to show that the 2^nd defendant accompanied Mr Chau on that occasion.  Mrs Ko’s request was confined to arranging for Mr Chau to attend her office to sign the Guarantee as the 2^nd defendant’s witness.  There was no request that the 2^nd defendant should also attend to sign the Guarantee.

18.The 2^nd defendant does not deny that the signature on the Guarantee is his signature.  But given his evidence that after receiving advice from lawyers he was not willing to sign Guarantee on 4 February 2019 (see §10 above), what caused him to change his mind 9 days later?

19.Looking at the whole of the evidence objectively, it is clear that there is no substance to the 2^nd defendant’s new version as would give rise to any triable issue: it is pure moonshine.

20.As to the other miscellaneous points raised in the 2^nd defendant written submissions, they can be disposed of swiftly:

(a)  the fact that the witness signed the Guarantee on a later date does not render the Guarantee invalid: see Shah v Shah [2002] QB 35 at §§30, 32 and 33;

(b)  the Guarantee which was in the form of a deed satisfies section 19 (1) and (2) (b) of the Conveyancing and Property Ordinance, Cap 219 and operates as a valid deed:  see Re Tam Siu Ki, Debtor [2019] HKCFI 83 at §22;

(c)  the Guarantee as a deed does not require to be supported by consideration: see Islestarr Holdings Limited v Aldi Stores Limited [2019] EWHC 1473 (Ch) at §66 and The Modern Contract of Guarantee English Edition, 3^rd Ed., 2 – 090.

21.As regards the jurisdiction point that the claim against the 2^nd defendant should have been brought in the District Court and not the High Court, counsel for the 2^nd defendant did not attempt to make good that submission which is so obviously bad.  Since the vacant possession claim fell outside the jurisdiction of the District Court, these proceedings were properly brought in the High Court.  The notion that there should have been separate proceedings against the 2^nd defendant in the District Court is absurd.

22.This appeal was hopeless from the start and should never have been brought.

23.The plaintiff’s costs are summarily assessed at $69,000 (inclusive of counsel’s fees) and payable by the 2^nd Defendant forthwith.

Mr Anthony L K Ko, instructed by T K Tsui & Co, for the plaintiff

Mr William G Allan and Mr David T H Lee, instructed by Mohnani & Associates, for the 2^nd defendant