Hong Kong Island Development Ltd v. Maurieilo Ltd

CACV000040/1983

BETWEEN

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Coram: Roberts, C.J., Cons and Fuad, JJ.A.

Date: 13th March 1983.

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JUDGMENT

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Fuad, J.A.:

1. This is an appeal from a decision of a Judge in Chambers, and the matter arose in this way. On 17th May 1982, Hong Kong Island Development Ltd. took out a writ against Mauriello (Hong Kong) Ltd., claiming that there was an agreement for a lease between the parties in October 1981 in respect of certain shops in the New world Centre.

2. The lease was to be for three years from the 3rd December 1981, the date when an existing three year lease for the shops would expire. The rent was to go up from $44,214 to $58,520, with air-conditioning charges also to be increased. It was averred that when the old lease expired on the 2nd December 1981, by consent of the parties, Mauriello had remained in possession 'pursuant to the new lease". Hong Kong Island sent the new tenancy agreement for execution and exchange but Mauriello refused to enter into the new lease, and declined to pay the difference between the two rents and the additional air-conditioning charges.

3. And so by their Writ Hong Kong Island claimed a declaration that a lease for three years at the new rent existed from 3rd December 1981; an order that Mauriello should execute the new lease; and that Mauriello should pay the difference in the rent etc. from the 3rd of December 1981. Alternatively the Plaintiff sought possession and mesne profits.

4. On the 5th June 1982, Mauriello filed their Defence, to the effect that there had been no agreement for a new lease since it was incomplete and subject to contract. If it had been concluded, it was not enforceable for want of a memorandum in writing and Mauriello was entitled not to execute the new agreement, and not to pay rent etc. at the new rate.

5. On the 22nd July 1982, Hong Kong Island took out a Summons under 0.27 r.3 asking for judgment for possession and mesne profits on the admissions contained in the Defence.Later in July (the date does not appear readily from the papers) Mauriello issued a Summons to amend their Defence and asked for it to be heard at the same time as the Summons for judgment on admissions. The amendment sought was to aver that Mauriello had not remained in possession under the new agreement for a lease but under the old lease, no valid notice to quit (as required by Cap. 7) had been served, and Hong Kong Island had continued to accept rent at the old rate.

6. On the 5th August 1982, the Master granted the application for leave to amend the Defence and Hong Kong Island's Summons was adjourned. In an affidavit filed on behalf. of the Plaintiff, Miss So states that it was not intended that their.application for judgment on admissions should proceed in the light of the amendment. They asked for the costs from the Defendant by letter dated the 12th August 1982. Mauriello's solicitors refused to pay by their letter of the 22nd September 1982.

7. On the 2nd September 1982, Mauriello's solicitors wrote saying that the tenancy would be terminated and vacant possession delivered on the 2nd October. On the 6th October, Hong Kong Island replied saying that the promised "deliver-up date has passed, the premises were deserted and there had been no official hand over. They asked for the keys at once and the keys were handed over and received on the 8th October.

8. On the 13th January 1983 Mauriello took out a Summons for the striking out of paragraphs 3,5,6,7 and 8 of the Statement of Claim, certain words in paragraph 4, and paragraphs 1,2 and 3 of the prayer for relief. All these averments and reliefs related to the agreement for a lease.

9. On the 17th February, the Master heard the Summons and dismissed Mauriello's application, with costs. We have no reasons before us that he might have given, but the arguments are related in affidavits filed by Miss So, and by Mr. Griffiths on behalf of Mauriello.

10. On the 18th February, Notice of Appeal was filed against the Order dismissing Mauriello's Summons to the Judge in Chambers. On the 7th March 1983, the hearing took place before the Judge. He allowed the appeal and gave leave to amend. paragraphs 1 and 3 of the prayer. He struck out paragraph 2 of the prayer and paragraphs 6 and 7 of the Statement of Claim, ordered that "costs here and below" should be to Mauriello, and gave a certificate for Counsel for both hearings.

11. Again we have not seen any reasons as to the basis of the learned Judge's decisions. The effect of the Judge's Order was that in view of the surrender of the lease (or the agreement for a lease) which had now been conceded by Mr. Chain on behalf of Hong Kong Island, their claim was limited to the averment that they were entitled to the difference in the rent from the 3rd December 1981 until the 8th October 1982, which was the date the keys were handed over. The Judge struck out the paragraph which related to the claim for specific performance of the new lease.

12. I am bound to say that the whole procedure adopted by the parties was misconceived from the beginning and it is a pity the matter did not go straight to trial. If it had, the hearing might well by now have been concluded. I am unable to understand upon what admissions judgment was sought in the first place and how, as I think Mr. Faulkner has now fairly conceded, it could be said that the mere taking out of a Summons for judgment on admissions, which was not in the event proceeded with, could be regarded as an irrevocable election to abandon some of the reliefs sought by the writ.

13. Once leave to amend the Defence had been given, Hong Kong Island, in effect, abandoned their original Summons. when Mauiello took out their Summons under 0.18 r.19 and the inherent jurisdiction, the grounds stated were that the paragraphs in the Statement of Claim and the prayers for relief mentioned should be struck out, because by taking out the Summons of the 22nd July Hong Kong Island had elected not to pursue their. claim under paragraphs 1 and 2 of the prayer and, alternatively, Hong Kong Island-had thereby indicated that they were no longer ready and willing to execute and deliver the alleged new lease, contrary to the pleading contained in paragraph 6 of the Statement of Claim.

14. As I have said, in my view, this application was wholly misconceived and I think that the Master was fully justified in dismissing Mauriello's Summons on the arguments that were addressed to him. However, when Mauriello appealed to the Judge in Chambers, he was entitled to approach. the matter be novo and since Mr. Chain had accepted that there had been a bind king surrender of the tenancy by operation of law, the Judge was perfectly right in the Orders he made in relation to the Statement of Claim, so that the only issues now remaining for trial are thereby adequately formulated and correctly circumscribed.

15. The question of costs is not an easy one but, with respect, in my judgment the Judge was wrong in the Order he made about costs be fore the Master.  Since both parties have been at fault to varying degrees, the Order that I would make, while maintaining the learned Judge's decision on the merits, would be that Hong Kong Island should have their costs before the Master. In relation to the costs before the Judge and before us, I would make no order as to costs.

Roberts, C.J. :

16. I agree and have nothing to add.

Cons, J.A. :

17. I also agree.