Lam Kit Ieng v. Wise Empire Investments Ltd

HCMP 476/2021

[2021] HKCFI 3441

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 476 OF 2021

________________________

________________________

BETWEEN

________________________

Before:  Madam Recorder Rachel Lam, SC in Court

Date of Hearing:  2 November 2021

Date of Judgment:  22 November 2021

________________________

J U D G M E N T

________________________

INTRODUCTION

1.This matter concerns two car parking spaces situated at No. 38 Mount Kellett Road, Hong Kong.

2.By Originating Summons dated 9 April 2021 (“OS”), the Plaintiff (“Madam Lam”)  seeks various reliefs against the Defendant (“Wise Empire”)  in respect of an Agreement of Mutual Grant of Rights dated 16 September 2010 concerning the said car parking spaces (“the Licence Agreement”).  The Licence Agreement was entered into between Wise Empire on the one hand and Madam Lam’s predecessor-in-title on the other.

3.This was the substantive hearing of the OS.  The matter proceeded on the affirmations without any cross examination of the affirmants.

4.At the hearing, the Plaintiff was represented by Counsel Mr Tommy Cheung, and the Defendant was represented by Counsel Mr Michael Yin.

BACKGROUND

5.The essential background to this matter is summarized below.

The Parties and the respective Car Parking Spaces

6.Madam Lam is the present registered owner of Flat 4C, 4^th Floor and Car Parking Space No. 4C, Eredine, No. 38 Mount Kellett Road (“the 4C Flat” and “the 4C Car Parking Space” respectively; together, “the 4C Property”).

7.Prior to Madam Lam’s acquisition of the 4C Property, the relevant ownership history of the same as reflected in the Land Register is as follows:

DATE OF INSTRUMENT	OWNER
17 February 2003	The Defendant
16 September 2010	Redhill Properties Limited (“RPS”)

8.Madam Lam acquired the 4C Property from RPS in 2018.  The documents relating to this transaction are: (1)  a provisional sale and purchase agreement dated 17 January 2018, (2)  an agreement for sale and purchase dated 8 February 2018, and (3)  an assignment dated 17 April 2018.  At the time of this transaction, Mayer Brown JSM acted for RPS.  By these documents, Madam Lam agreed and acknowledged that the sale was subject to the terms and conditions of the Licence Agreement.

9.Wise Empire, a BVI company, is the present registered owner of Flat 6B, 6^th Floor and Car Parking Space No. 6B, Eredine, No. 38 Mount Kellett Road (“the 6B Flat” and “the 6B Car Parking Space” respectively; together “the 6B Property”). Wise Empire acquired the 6B Property on 17 March 2010 (i.e. about 6 months prior to its sale of the 4C Property to RPS).

10.Mr James Arthur Filmer-Wilson (“Mr Filmer-Wilson”)  is a director of Wise Empire and the affirmant of Wise Empire’s evidence in opposition in these proceedings.

11.As can be seen from the brief background above, the Licence Agreement in question was entered into on the same date as the Assignment of the 4C Property by Wise Empire to RPS.  The Licence Agreement was drafted by Mayer Brown JSM upon instructions from Wise Empire.

12.At the time when Wise Empire entered into the Licence Agreement, there were two shares in Wise Empire which were respectively held by an Aptor Limited (“Aptor”)  and a Quilnom Limited (“Quilnom”).  As shown in Wise Empire’s register of members, these were subsequently transferred as follows:

(1)  On 24 July 2017, Aptor transferred its share to Ms Linker.

(2)  On 9 August 2019, Quilnom transferred its share to Ms Linker.

13.The net result is that on the face of the register, Ms Linker is now the registered shareholder of both shares in Wise Empire.

The Licence Agreement

14.Relevant terms of the Licence Agreement are as follows:

(1)  The registered owner of the 6B Property (i.e. Wise Empire)  was defined as the “First Owner” and the “1^st Property” was the 6B Property.  The “1^st Car Park” was the 6B Car Parking Space.

(2)  The registered owner of the 4C Property (i.e. RPS)  was defined as the “Second Owner” and the “2^nd Property” was the 4C Property.  The “2^nd Car Park” was the 4C Car Parking Space.

(3)  The Recitals:

“WHEREAS :-

(1)  In this Agreement the following expressions shall have the following meanings except where the context otherwise permits or requires:- …

“Licence Period” means subject to early determination as provided for in this Agreement, such period insofar as the First Owner is the registered owner of the 1^st Property.

…

 (4)  The First Owner has agreed to grant to the Second Owner the right to use the 1^st Car Park and the Second Owner has agreed to grant to the First Owner the right to use the 2^nd Car Park on the terms and conditions hereinafter contained.”

(4)  Relevant parts of Clauses 1, 2, 4, 5, 7 and 8:

“1. In consideration of the grant by the Second Owner herein contained, the First Owner HEREBY GRANTS unto the Second Owner a licence for the Second Owner and any persons authorized by it from time to time and at all times to use the 1^st Car Park for the Licence Period without charges or fees.

2. In consideration of the grant by the First Owner herein contained, the Second Owner HEREBY GRANTS unto the First Owner a licence for the First Owner to use the 2^nd Car Park for the Licence Period subject to the payment of the monthly licence fee of HK$1,000.00 (inclusive of rates, government rent and management fee).

…

4. For the avoidance of doubt, the First Owner and the Second Owner further agree that:-

(a)  the rights to use the 1^st Car Park hereby granted unto the Second Owner by the First Owner shall only be used an enjoyed by the Second Owner together with the sole and exclusive right to hold use occupy and enjoy Flat of the 2^nd Property or flat(s)  of the Building owned or to be owned by the Second Owner;

(b)  the rights to use the 2^nd Car Park hereby granted unto the First Owner by the Second Owner shall be personal to the First Owner for personal use by its directors, Filmer Wilson, James Arthur and Linker, Lola Prinska and shall not be capable of being assigned, let, leased, licenced or otherwise disposed of (except by surrender to the Second Owner)  and only be used and enjoyed by the First Owner in connection with the First Owner’s sole and exclusive right to hold use occupy and enjoy the Flat of the 1^st Property; and

(c)  The grant of rights to use the 2^nd Car Park given by the Second Owner is personal to the First Owner and shall not ensure for the benefit of the First Owner’s successors and assigns.

5. (a)  The First Owner shall pay to the Second Owner the monthly licence fee of HK$1,000.00 (inclusive of rates, government rents and management fees)  which shall be paid in advance clear of all deductions and set-off on the 1^st day of each calendar month. The 1^st of such payment for the period from 16^th September 20210 to 30^th September 2010 shall be made upon signing of this Agreement and the last of such payments to be apportioned according to the number of days in the month (inclusive of the surrender date)  included in the Licence Period.

…

7. This Agreement shall immediately cease to have any effect and the Licence Period hereby created shall immediately cease and determine on the happening of the following events, whichever shall first occur:-

(i)  if and when the First Owner shall cease to be the registered owner of the 1^st Property;

(ii)  the Mortgagee of the 1^st Property shall enter into possession of the 1^st Property;

(iii)  if either party shall be wound up or enter into liquidation;

(iv)  if there is a breach of Clauses 4(b), 4(c)  or 8 herein;

(v)  if there is a change(s)  in the shareholder(s)  and/or transfer(s)  of the First Owner’s issued share capital or any part thereof.

In such event, each party hereto shall deliver vacant possession of the respective Car Parks granted to it to the other party or the Mortgagee or the person entitled thereto (as the case may be). Upon termination of this Agreement either party shall release to other from its agreements covenants or obligations hereunder but without prejudice to the rights and remedies of either party against the other in respect of any antecedent claim or breach of this Agreement.

8.  It is hereby agreed that upon demand by the Second Owner, the First Owner shall furnish to the Second Owner within 7 days from the date of such demand certified copies of documents to prove its shareholding.”

15.There is no dispute that the 4C Car Parking Space is substantially larger than the 6B Car Parking Space.  In terms of measurements, the 4C Car Parking Space measures 114 inches wide by 239 inches long, whereas the 6B Car Parking Space measures 71 inches wide by 164 inches long.  In visual terms, Mr Filmer-Wilson has deposed that his Bentley Convertible fits into the 4C Car Parking Space, but clearly would not fit within the 6B Car Parking Space, which would only accommodate a Mini Minor.

16.As can be seen from the above, by the Licence Agreement, the right to use the respective car parking spaces were swapped for the duration of the Licence Period.  The key question now before the Court is whether, as claimed by Madam Lam, the Licence Period has ceased and been determined pursuant to Clause 7(v).

THE PARTIES’ CASES

17.It is Madam Lam’s case that in view of the transfers of the shares to Ms Linker (at paragraph 12 above), Clause 7(v)  of the Licence Agreement has been triggered, since the legal shareholding of Wise Empire has changed.  The arrangement has thus terminated and the swap which was originally arranged between the 4C Car Parking Space and the 6B Car Parking Space must come to an end.

18.To that end, she seeks the following by the OS:

(1)  Declaratory relief that the Licence Agreement has ceased to have effect upon the transfer of the issued share capital of Wise Empire on 24 July 2017.

(2)  Further or alternative to the above, declaratory relief that the Licence Agreement has ceased to have effect upon the transfer of the issued share capital of Wise Empire on 9 August 2019.

(3)  An Order that Wise Empire do, pursuant to Clause 7 of the Licence Agreement, deliver vacant possession of the 4C Car Parking Space to her, upon her delivery, pursuant to Clause 7 of the Licence Agreement, of vacant possession of the 6B Car Parking Space to Wise Empire.

19.On the other hand, it is Wise Empire’s case that the Licence Agreement was entered into with the intent that Mr Filmer-Wilson and Ms Linker were to retain the benefit of using the 4C Car Parking Space for so long as they remained in residence at the 6B Property and held the ultimate beneficial ownership of Wise Empire.  It is Wise Empire’s case, therefore, that Clause 7(v)  has not been triggered, as a reasonable understanding of that clause within context is that it cannot be understood to apply to a situation where the change in the shareholder(s)  or the transfer of the issued share capital of Wise Empire would not result in divesting the ultimate beneficial ownership of the 6B Property from Mr Filmer-Wilson and Ms Linker.

20.The above competing cases rest on the differing interpretations of the Licence Agreement and, in particular, Clause 7(v)  put forward by the parties.  In the simplest terms:

(1)  Madam Lam’s position is that the clause must refer to any change in the legal shareholding of Wise Empire;

(2)  Wise Empire’s position is that the clause could only be triggered by the change of the ultimate beneficial ownership of the company.

These competing positions and the relevant arguments as to construction are explored in further detail below.

21.Madam Lam has also put forward a fallback argument.  In essence, she says that even on Wise Empire’s own construction (viz. necessitating the change of ultimate beneficial ownership), this has occurred at the latest by 9 August 2019 since the ultimate beneficial ownership would have vested entirely in Ms Linker, as opposed to Mr Filmer-Wilson and Ms Linker jointly (“the Fallback Argument”).  Both counsel have put forward submissions on this Fallback Argument in their written submissions, and at the substantive hearing, sought to expand beyond those written submissions and develop this further.  To the extent necessary, this is also addressed below.

DISCUSSION

Legal Principles on Construction of Contract

22.The parties are essentially ad idem on the legal principles to be applied, albeit they understandably emphasize different aspects of these principles.  Reference was made to three cases (Truearns Company Limited v Wealthy Fountain Holdings Inc [2019] HKCFI 1840 at §18 per DHCJ MK Liu; Lam Man Lai & Another v OJ VC Limited & Others [2020] HKCFI 2495 at §56 per Coleman J and the well-known case of Jumbo King Ltd v Faithful Properties & Ors (1999)  2 HKCFAR 279 at 296D-I per Lord Hoffman NPJ).  The principles derived therefrom are summarized below:

(1)  The ultimate aim of interpreting a provision in a contract, especially a commercial contract, is to determine what the parties meant by the language used, which involves ascertaining what a reasonable person would have understood the parties to have meant.

(2)  The exercise of construction is essentially one unitary exercise in which the Court must consider the language used and ascertain what a reasonable person would have understood the parties to have meant.  In doing so, the Court must have regard to all the relevant surrounding circumstances.  If there are two possible constructions, the Court is entitled to prefer the construction which is consistent with business common sense and to reject the other.  The business sense is which businessmen, in the course of their ordinary dealings, would give the document.

(3)  Some agreements may be successfully interpreted principally by textual analysis, for example, because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals.  The correct interpretation of other contracts may be achieved by a greater emphasis on the factual matrix, for example, because of their informality, brevity or the absence of skilled professional assistance.  Textualism and Contextualism are not conflicting paradigms.  The extent to which each tool will assist the Court in its task will vary according to the circumstances of the particular agreement.

(4)  The more unreasonable the result the more unlikely it is that the parties could have intended it, and if they do intend it, the more necessary it is that they shall make that intention abundantly clear.  On the other hand, the Court must also be alive to the possibility that one side may have agreed to something which with the benefit of hindsight may not have served his interest.

(5)  In serious utterances such as legal documents, one does not readily accept that parties would have used wrong words.  If the ordinary meaning of the word makes sense in relation to the rest of the document and the factual background, then the court will give effect to that language, even though the consequences may appear hard for one side or the other.

(6)  Finally, there can be no dispute that evidence of negotiations is inadmissible.

Which construction is correct?

23.In arguing for the position that Clause 7(v)  refers to the change in legal shareholding, Mr Cheung takes the following points:

(1)  He submits that there is no ambiguity in Clause 7(v), which does not specify or reference any form of beneficial ownership.  As a corollary to this, he points to the fact that the Licence Agreement was drafted by professional lawyers (Mayer Brown JSM)  and due weight should be given to the sophistication and precision of the drafting and language adopted.  Lawyers would have been familiar with the concepts of legal and beneficial ownership, and his submission is that had there been any intention to single out beneficial ownership, this would have been made clear in the language of Clause 7(v)  itself; the fact that it was not drafted in such a way is itself indicative of the parties’ intentions.

(2)  Looking beyond the plain terms of Clause 7(v)  itself, he submits that the other aspects of Clause 7 also point to a construction of Clause 7(v)  which prefers an understanding of that of change of legal shareholding rather than ultimate beneficial shareholding.  By way of example, he points to Clause 7(i), arguing that a hypothetical transfer to a subsidiary of Wise Empire would trigger Clause 7(i), thereby bringing the arrangement to an end.  Such a change in the ownership of the 6B Property triggering Clause 7(i)  would not make sense if the overall intention and focus of the Licence Agreement was on the underlying beneficial ownership of the 6B Property.

(3)  Mr Cheung also points to the fact that there is no contemporaneous documentary evidence nor any affirmation evidence by the drafters which support the understanding put forward by Wise Empire.  In this regard, he invites the Court to disregard Mr Filmer-Wilson’s evidence on his subjective intentions at the time (citing Barlow Investments Ltd v Cliftons Ltd [2019] HKCFI 2768 at §30 per DHCJ William Wong SC; Lam Man Lai (supra)  at §56).  He also points to various emails which had been circulated at around the time of the drafting of the Licence Agreement.  In relation to these points, the short answer is that evidence of negotiations are inadmissible and I will focus on known context, the Licence Agreement itself and interpretation of the same on the face of the terms as they appear therein.

24.As against the above arguments, Mr Yin argues for a construction of Clause 7(v)  which has, he says, as its underlying premise the intention reflected throughout the Licence Agreement that the use of the 4C Car Parking Space should remain with Mr Filmer-Wilson and Ms Linker so long as they remained the ultimate beneficial owners of the 6B Property.  The Licence Agreement is said to have as its main objective the intention of conferring upon Mr Filmer-Wilson and Ms Linker such a ‘personal’ right to use the 4C Car Parking Space.  Mr Yin advances the following points in support of his argument:

(1)  He points to the structure of the Licence Agreement, saying that although there are no headings within the substantive body, it is clear that it consists of different parts.  It is his submission inter alia that Clauses 1 and 2 set out the mutual grants; Clause 3 defines the rights conferred thereby; Clause 4 supplements the mutual grants and inter alia renders the use of the 4C Car Parking Space ‘personal’ to Mr Filmer-Wilson and Ms Linker; and that Clause 7 reinforces the ‘personal’ nature of the arrangement by providing for termination upon certain events.  Clause 8 provides for verifying whether the events in Clause 7(v)  have occurred.

(2)  In further support of the ‘personal’ nature of the rights granted, Mr Yin further points to the asymmetry of the arrangement.  By way of example, by Clause 2, only Wise Empire itself (and not any subsequent assignees)  is granted the licence in relation to the 4C Car Parking Space.  This is to be contrasted with the position set out in Clause 1, which allows parties authorized by RPS to use the 6B Car Parking Space for the duration of the Licence Period.  He also points to the fact that the 6B Property owners were required to pay a licence fee to the 4C Property owners, in recognition of the different sizes of the car parking spaces.

(3)  Drawing the above together, he argues that Clause 7 is not standalone, but rather is ancillary to the main objective of the Licence Agreement (summarized in the main body of paragraph 24 above).  He then suggests that the triggering events in Clause 7 should not be treated as independent objects, since this would lead to the absurdity that Mr Filmer-Wilson and Ms Linker could not effect any restructuring of the shareholding of Wise Empire even though it did not ultimately affect the beneficial ownership of the 6B Property.

(4)  Mr Yin similarly makes reference to some select email correspondences exchanged in and around the time of Wise Empire’s acquisition of the 6B Property to raise further support for his arguments.  In particular, he suggests that there may be a suggestion that RPS (the original party to the Licence Agreement)  might have had knowledge of the underlying intention of Mr Filmer-Wilson and Ms Linker to retain the use of the 4C Car Parking Space so long as they remained in residence at the 6B Property.  As indicated at paragraph 23(3)  above, I do not consider it helpful to consider evidence of negotiations.  The few documents referred to by Mr Filmer-Wilson are, in my view, inconclusive and do not support any such contention.  Further and in any event, both parties’ references are somewhat piecemeal and would not offer a full picture of what actually went on at the time.

(5)  Finally, Mr Yin invites the Court not to place too much weight on the fact that the Licence Agreement was drafted by lawyers.  He suggests that the drafting was sloppy, and that the Court should not readily assume that just because it is a legal document the words used must be given their normal meaning.  (I note that implicit within this argument is an acknowledgment that the normal meaning of Clause 7(v)  is a reference to legal rather than beneficial shareholding).

25.In answer to the above, Mr Cheung argues that:

(1)  There is nothing to suggest that the ‘main objective’ of the Licence Agreement was to confer a ‘personal right’ on Mr Filmer-Wilson and Ms Linker in the manner argued for by Mr Yin.  He points to the various restrictions and limitations on the rights, and the fact that such rights could be lost by any number of means (e.g. non-payment of licence fees, assignment of the 6B Property to a different legal owner, etc).

(2)  He also disagrees with the notion that Clause 7 is somehow ancillary to the main objective.  Whilst agreeing that Clauses 4 and 5 confer upon the directors of Wise Empire the right to use the 4C Car Parking Space, he argues that this does not mean that the grant was to be rendered any more permanent than a usual licence arrangement.  His ultimate point seems to be that the parties had made clear by Clause 7 the circumstances in which the agreement was to be terminated, and that there is no main or overriding objective which should detract from the plain terms of the clause.

26.Having considered the parties’ respective arguments, I take the view that Madam Lam’s construction is to be preferred.  In so finding, I have weighed the above arguments and taken the following matters into account.

27.First, as to the wording of Clause 7(v)  itself:

(1)  It seems apparent to me that the plain meaning of the words in Clause 7(v)  point to an understanding that is reflective of the change in legal shareholding.  There is no mention of beneficial ownership.

(2)  Similarly, it does not make sense for Clause 7(v)  to reference the “transfer of the issued share capital” if the intention were truly to focus on the ultimate beneficial ownership of Wise Empire.

(3)  Bearing in mind this was drafted by lawyers, if the intent were to focus on and identify the ultimate beneficial ownership of the 6B Property by Mr Filmer-Wilson and Ms Linker, then it would have been an obvious point to put in and draft accordingly.  The fact that the clause is silent on this itself speaks volumes.

(4)  I would even venture to suggest that the interpretation proposed by Wise Empire requires the reader of the Licence Agreement to do a degree of violence to the language of Clause 7(v)  now used.

28.Second, insofar as one seeks to read into and test the operation of Clause 7(v)  against other aspects of the agreement and/or the other triggering events in Clause 7:

(1)  I do not consider Clauses 4 and 5 have the effect argued for by Mr Yin (i.e. supporting a ‘main objective’ and rendering Clause 7 ancillary thereto).  It is clear that by these clauses, the agreement seeks to set out and in some ways limit the circumstances in which Wise Empire may use the 4C Car Parking Space.

(2)  Clause 7 then seeks to enumerate the various circumstances by which the arrangement will come to an end.  Clauses 7(i)  and 7(ii)  deal with circumstances in which legal ownership of the 6B Property is altered.  Clause 7(iii)  deals with the scenario where either party goes into liquidation.  Clause 7(iv)  deals with the situation where the restrictions set out in Clause 4 are not adhered to.  Clause 7(v)  deals with the situation where the ownership of Wise Empire changes, and in connection with this Clause 7(iv)  also references the scenario where the 6B Property owners do not comply with Clause 8 (i.e. they need to disclose the status of the ownership of Wise Empire).

(3)  One must assume that at the time of drafting, the parties had applied their minds to and agreed the particular situations where the arrangement was to terminate.  Not only was there no reference to ultimate beneficial ownership, but the clause could well operate in circumstances where the ultimate beneficial ownership had not changed.  In this regard, I have already set out Mr Cheung’s example relating to Clause 7(i)  at paragraph 23(2)  above.

(4)  Similarly, one might query what would happen if, for example, Ms Linker were to pass away, and how Clause 7 caters for that eventuality in a manner consistent with the ‘main objective’ / ‘personal right’ interpretation put forward by Wise Empire in these proceedings.  One must presume that whatever testamentary provisions are in place would take effect, and the ownership of the 6B Property would be transferred from Ms Linker’s estate to the legatees or beneficiaries of her estate.  Whilst there is no evidence before the Court as to what those testamentary provisions are, what seems at least tolerably clear is that the Licence Agreement would be terminated, because there would be necessarily a change in the ultimate beneficial ownership of the 6B Property.  In those circumstances, assuming Mr Filmer-Wilson survives Ms Linker and wished to remain in the 6B Property, his ‘personal right’ would not hold up.

(5)  The above exercise illustrates the difficulty of reading into the clause a proposed main objective which has not been expressly stated anywhere in the Licence Agreement. It is obvious that Clause 7 was not intended to cater for all possible eventualities regarding the so-called ‘personal’ nature of the arrangement.

(6)  I would also note that Clause 8 tends to suggest that Clause 7(v)  refers to legal rather than beneficial shareholding.  If the intention is that the shareholding can be readily demonstrated by certified copies of documents, then it is much more likely that this is a reference to legal rather than beneficial shareholding.

(7)  The Licence Agreement and Clause 7 in particular set out, as far as could be envisaged at the time, the circumstances in which the arrangement was to come to an end.  This included inter alia the scenario where the shareholding of Wise Empire changed and/or the issued share capital thereof was transferred.

29.In the circumstances, I prefer Madam Lam’s proposed interpretation of Clause 7(v)  and accordingly, find that the said Clause 7(v)  was triggered upon the legal shareholding of Wise Empire having been transferred from Aptor to Ms Linker on 24 July 2017.

The Fallback Argument

30.In light of my finding above, it becomes unnecessary to deal with the Fallback Argument put forward by Madam Lam (summarized at paragraph 21 above).  For completeness, I will set out briefly the parties’ respective positions on this Fallback Argument and my observations thereon.

31.Madam Lam’s point is essentially that by 9 August 2019, the beneficial ownership position had changed in that it vested entirely in Ms Linker and not Mr Filmer-Wilson and Ms Linker jointly.  She relies on inter alia (1)  the share register and the admitted change in legal shareholding reflected in the documents, (2)  Mr Filmer-Wilson’s own evidence where he acknowledges that ownership of the share in Wise Empire held through Quilnom was transferred to Ms Linker, (3)  a letter dated 27 December 2016 where it was acknowledged and declared by Quilnom that it was a nominee shareholder of Ms Linker in respect of the share in Wise Empire.

32.In answer, Mr Filmer-Wilson deposed in his evidence that although the transfers had indeed taken place, he and Ms Linker had a mutual understanding that she was to hold the 1 share in Wise Empire that he had caused to be transferred to her on his behalf until his demise (Mr Yin referred to this at the hearing as a “life interest”).  In such circumstances, he says that there was no trigger.

33.As to the aforementioned evidence of Mr Filmer-Wilson, Madam Lam takes the further point that there is a lack of evidence in support by Ms Linker.

34.Supplementing Wise Empire’s evidence, Mr Yin further takes a submission point on the burden of proof.  In short, his point seems to be that:

(1)  It rests on Madam Lam to fulfil the legal and persuasive burden of her case.

(2)  This fallback case was not relied upon as a further alternative in the OS, and it was not the case his clients came to meet; and

(3)  Madam Lam does not have any evidence to counter or disprove his clients’ allegation regarding the mutual understanding between Mr Filmer-Wilson and Ms Linker.  In other words, he says that Madam Lam has not fulfilled her evidential burden to counter Mr Filmer-Wilson’s affirmed evidence.

35.It was also suggested to the Court that Mr Yin had standing instructions to file confirmatory evidence by Ms Linker, but Wise Empire would not do so at this juncture.  This was somewhat perplexing, given full opportunity had been afforded to Wise Empire to file all relevant evidence prior to the hearing.

36.Purely by way of observation, it seems to me that:

(1)  Whatever objection Wise Empire might have in relation to the case that it came to meet, this is more a matter of form over substance.  The factual case it put forward in answer to Madam Lam’s claim was as set out in Mr Filmer-Wilson’s evidence.  I cannot see how the factual position contended for or the evidence that ought to have been filed would change.

(2)  If this were in fact a live issue (in that the Court would seek to make a finding on the basis of the Fallback Argument rather than the parties’ primary arguments), it might have been prudent for Mr Filmer-Wilson to be cross examined on his evidence.  As things stand, it is not necessary to do so.

37.In any event, and noting that both counsel made yet further submissions at the hearing going beyond what was in their respective skeleton arguments, it seems to me that it is unnecessary for the Court to make findings either way as to the disputed matters summarized above in light of my finding in favour of Madam Lam’s primary case.

Form of Relief?

38.I note finally that in the context of the discussion of the Fallback Argument, at the hearing, Mr Yin developed a point which was not in his skeleton submissions (nor Wise Empire’s evidence).  In gist, he submitted that relief in the form sought in paragraph 3 of the OS (paragraph 18(3)  above)  could not follow from the Fallback Argument because the Licence Agreement could not be enforced by Madam Lam.  He pointed to the 2018 sale and purchase documents wherein Madam Lam had bound herself to observe the Licence Agreement, but he said that this was only because she had bound herself to RPS to observe the agreement so that RPS would not be exposed to liability.

39.Quite apart from the fact that this was raised for the first time at the hearing, I would note that there seems to be little dispute that the parties have all along proceeded on the basis they are respectively bound by the Licence Agreement and the Court could determine whether it had been terminated in such circumstances.  In the circumstances, I do not consider that this final point should impact upon the orders to be granted.

CONCLUSION

40.I will thus grant relief in terms of paragraphs 1 and 3 of the OS.  As to costs, I make a costs order nisi that the Defendant do pay the Plaintiff’s costs, to be assessed by way of gross sum assessment in writing.  The Plaintiff shall lodge and serve its statement of costs within 7 days of this Decision, and the Defendant shall provide comments thereon within 7 days thereafter.

41.I thank both counsel for their assistance.

Mr Tommy Cheung, instructed by Chow, Griffiths & Chan, for the plaintiff

Mr Michael Yin, instructed by Haldanes, for the defendant