Huge Grand Ltd v. Lulu Floral Lab Ltd

LDPE 75/2025

[2025] HKLdT 32

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPE 75 OF 2025

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BETWEEN

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JUDGMENT

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Background

1.By a Notice of Application (Form 22) filed to the Lands Tribunal (“the Tribunal”) on 14 January 2025, the Applicant sought recovery of possession of Shop C3, Ground Floor, Prince Edward Building, Nos 152A-D Prince Edward Road West, Kowloon, Hong Kong (“the Property”) on the ground that the Respondent had failed to pay the rent reserved in the Tenancy Agreement dated 29 August 2023 (“2023 Tenancy”) for the period since 1 March 2024.

2.More particularly, by reference to the Attachment to the Form 22, the Applicant explained that[1]:

(1) Notwithstanding that the rent was stated to be HK$80,000 per month in the 2023 Tenancy, it was orally agreed that the actual rent payable per month would be HK$67,000.

(2) For the period from 1 September 2023 to 31 July 2024, rent was outstanding and the total sum of outstanding rent was HK$737,000 at HK$67,000 per month.

(3) For the period from 1 September 2023 to 31 July 2024, management fees at the rate of HK$400 per month was outstanding and the total sum of outstanding management fees was HK$4,400.

(4) For the period from 1 September 2023 to 31 July 2024, rates at the rate of HK$6,721 per quarter was outstanding and the total sum of outstanding rates was HK$20,163.

(5) Rent, management fees and rates were paid from 1 August 2024 to 31 January 2025 and receipts were issued accordingly.

(6) On the basis of the first-in-first-out principle:-

(i) outstanding rent at HK$67,000 per month from 1 March 2024 up to the date of delivery up of vacant possession of the Property;

(ii) outstanding management fees at HK$400 per month from 1 March 2024 up to the date of delivery up of vacant possession of the Property;

(iii) outstanding rates at HK$6,721 per quarter from 1 March 2024 up to the date of delivery up of vacant possession of the Property.

3.The 2023 Tenancy referred to was in Chinese and dated 29 August 2023 whereby the Applicant let the Property to the Respondent for a term of two years commencing from 1 September 2023 to 31 August 2025 with an option term (生約) for two years at an increased rent of 20%[2].

Notice of Opposition

4.On 22 January 2025, the Respondent filed a Notice of Opposition[3]. In gist, it stated that rent had been paid in cash to the Applicant’s representative, Mr Lai Chik Yeung (hereinafter referred to as “LCY” or “Johnny” where appropriate) for the period between 1 September 2023 and 1 July 2024 until August 2024, from which time onwards the monthly rent was deposited in the Applicant’s bank account according to Johnny’s request. The Respondent denied having any rental in arrears.

5.This Notice of Opposition was amended on 7 April 2025 as follows[4]:

“A. The Parties

2. As to the Applicant, at all material times:-

2.1 It is a company incorporated in Hong Kong.

…

2.3 Its bank account maintained with the HSBC is xxx-xxxxxx-001 (the “Bank Account”). The name of the account holder of the Bank Account is “H**E GR**D LIM***D”.

2.4 It has a company chop bearing the name of “HUGE GRAND LIMITED 太宏有限公司” (the “Chop”).

2.5 Its letterhead bears a logo of “花墟一號” (the “Letterhead”)

2.6 Mr Lai Chik Yeung (“LCY”) was the main contact person and/ or agent and/ or authorised representative of the Applicant. To the best of the Respondent’s knowledge, LCY is responsible for all of the rental businesses of the Lai’s family, including that of the Plaintiff’s[5].

3. As to the Respondent:-

3.1 It is a company incorporated in Hong Kong. It runs a floristry business.

3.2 Ms Chiu Wan Ki (“CWK”) and Ms Ng Suet Ying (“NSY”) each holds 5,000 ordinary shares of the Respondent as founder members. They were both first directors of the Respondent. CWK and NSY have both been the directors of the Respondent.

3.3 CWK has at all material times been in charge of the finances, bank transfers and rental matters of the Respondent.

B. The Tenancy Agreements Between 2021 and 2025

B1. The First Tenancy Agreement (01/08/2021 – 31/07/2023)

4. By a Tenancy Agreement dated 30 July 2021, LCY on behalf of the Plaintiff leased (the Property) to the Luluflorist Limited[6] (represented by CWK) (“Luluflorist”) for the period between 1 August 2021 to 31 July 2023 (the “First Tenancy Agreement”).

5. Although the First Tenancy Agreement stated that the monthly rent was HK$65,000, LCY on behalf of the Plaintiff and CWK on behalf of Luluflorist agreed that the actual rent payable would be HK$50,000 per month[7].

6. Throughout the First Tenancy Agreement:-

6.1 The Plaintiff issued debit notes bearing its Letterhead, Address, Bank Account and Chop to collect monthly payments. CWK received said debit notes either by hand or through WhatsApp from LCY.

6.2 CWK would then arrange for rent, management fee and rates to be paid either in cash to LCY or by cheque to the Plaintiff[8].

6.3 LCY would resolve issues arisen from the tenancy as a representative of the Plaintiff.

(the “Established Practice”.)

7. In August 2023, LCY on behalf of the Plaintiff and CWK on behalf of Luluflorist Limited agreed that the First Tenancy Agreement would be extended for one month with an increased monthly rent of HK$67,000. The parties performed their obligations following the Established Practice.

B2. The Second Tenancy Agreement (01/09/2023 – 31/08/2025)

8. By another Tenancy Agreement dated 29 August 2023, LCY on behalf of the Plaintiff leased (the Property) to the Respondent (represented by CWK) for the period between 1 September 2023 to 31 August 2025 (the “Second Tenancy Agreement”).

9. Although the Second Tenancy Agreement stated that the monthly rent was HK$80,000, LCY on behalf of the Plaintiff and CWK on behalf of the Respondent varied the Second Tenancy Agreement by agreeing that the actual rent payable would be HK$67,000 per month[9].

10. LCY and CWK also agreed on behalf of the Plaintiff and the Respondent respectively that the Second Tenancy Agreement would follow the Established Practice.

11. In reliance of and adherence to the Established Practice, throughout the Second Tenancy Agreement (up to including March 2025):-

11.1 The Plaintiff issued debit notes bearing its Letterhead, Address, Bank Account and Chop to collect monthly payments from the Respondent. CWK received said debit notes through WhatsApp from LCY.

11.2 CWK would then arrange for rent, management fee and rates to be paid to the Plaintiff’s Bank Account[10].

11.3 The Plaintiff would then issue receipts bearing its Letterhead, Address, Bank Account and Chop to the Respondent. CWK received said receipts through WhatsApp from LCY.

12. At all material times, the Plaintiff was and/ or must have been aware of the matters pleaded at paragraphs 8 to 11 above, by reason of, inter alia, the long passage of time between 1 September 2023 and 31 July 2024.

13. Up until 17 December 2024 (See paragraph 16 below), the Plaintiff made no complaint of the Respondent’s usage of the (Property) and/ or the Respondent’s reliance and performance of the Second Tenancy Agreement pursuant to the Established Practice.

14. In the premises, the Plaintiff is estopped from obtaining relief sought or any other relief vis-à-vis the Respondent.

15. …

16. By a pre-action letter dated 17 December 2024, the Plaintiff through its instructing solicitors Messr Yick & Chan Solicitors alleged that the Respondent did not pay rent for the period between August 2023 and July 2024 (both months inclusive).

17. By a letter dated 6 January 2025, the Respondent wrote to Messrs Yick & Chan Solicitors, stating that the Respondent has had paid rent throughout the Second Tenancy Agreement and enclosing all relevant receipts issued by the Plaintiff (the “Respondent’s Letter” and the “Receipts” respectively). The Receipts bear the same Letterhead, Address, Bank Account and Chop of the Plaintiff.

18. The Plaintiff and/ or its solicitors did not respond to the Respondent’s Letter.

…”

Amended Reply by Applicant

6.On 18 March 2025, Mr Edward T C Chan (“Mr Chan”), instructed by Messrs Yick & Chan, filed a Reply on behalf of the Applicant.

7.However, in light of the Amended Notice of Opposition filed by the Respondent, Mr Chan filed an Amended Reply dated 28 April 2025[11].

8.Firstly, in this Amended Reply, the Applicant clarified that its letterhead does not have the logo of “花墟一號” though the Debit Notes and Receipts adduced in the present proceedings do bear such logo.

9.Then, the Applicant clarified that Mr Lai Chik Chor (hereinafter referred to “LCC” or “George” where appropriate) is the sole shareholder and sole director of the Applicant.

10.George is in fact the elder brother of LCY. The two plus another brother aged between them are the three sons of Mr Lai Sing who was the founder of 黎氏藥業 (Lai’s Medicine), a Chinese medicine business established many years ago.

11.Except that the Applicant authorised LCY to enter into the 2023 Tenancy, the Applicant denied LCY was the main contact person and/ or agent and/ or authorised representative of the Applicant, particularly in respect of the rental businesses of the Lai’s family. George had asked different persons to handle the rental business of the Lai’s family as such rental business comprises many properties.

12.Specifically, the Applicant had not authorised LCY to collect rents, management fees or rates from the Respondent.

13.The Applicant also raised query on the ownership of the Respondent. Under the Respondent’s Annual Return (NAR1) as of 28 September (which was filed on 26 October 2023)[12], the Respondent listed only NSY as direct. On the other hand, under the Respondent’s NAR1 as of 28 September 2024 (filed on 3 March 2025, ie approximately 5 months afterwards), the Respondent listed NSY and CWK as directors.

14.The Applicant doubted that if CWK had at all material times been in charge of the finances, bank transfers and rental matters of the Respondent.

15.The Applicant also claimed that NSY is an insider of the Lai’s family business. George arranged NSY to work in the group companies including Lai Sing Medicine Factory Limited (黎昇中藥有限公司), the Lai’s family flagship where NSY is the company secretary, a director and a nominee shareholder. According to the Applicant, George expressly informed his staff including NSY and LCY should not collect rental and/ or handle cash.

16.The Applicant stated that, over the years, LCY is the agent of the Respondent in liaising with the Applicant or George while LCY was authorised to sign the 2023 Tenancy for the Applicant. The Applicant even challenged that when LCY on behalf of the Applicant leased (the Property) to the Luluflorist on 30 July 2021, whether CWK actually represented Luluflorist because a Mr Chiu King Tao was the sole shareholder and sole director of Luluflorist[13]. The correct date of the tenancy was also 20 July 2021 instead of 30 July 2021 and the subject of the tenancy was Shop C2 instead of Shop C3, ie the Property.

17.Again, the Applicant denied the so-called Established Practice, claiming that LCY was a mere middleman between the Applicant and Luluflorist. Similarly, the Applicant challenged that when LCY on behalf of the Applicant leased the Property to the Respondent, whether the latter was represented by CWK.

18.In any event, any authority that LCY used to have in handling the rental business has been revoked since December 2023 when George and LCY had an intense dispute on the distribution of the family wealth of the Lai’s family. Then George asked LCY to stop operating, handling and/ or representing the family in business of the Lai’s family, including the business of the Applicant and other businesses of the family. Also, while NSY was present at the scene, she should be fully aware that LCY has no authority to deal with the business of the Applicant.

19.Thus, for those Receipts for the rents in arrears in the possession of the Respondent, the Applicant had not authorised anyone, including LCY to issue those Receipts or use the company chop on those Receipts.

20.In a letter from LCY to George dated 11 July 2024, LCY admitted that he collected and retained the rental income of the Applicant as security deposit (保證金). He further admitted that he deposited those funds into his own independent bank account, and he would continue to do so until George paid for the unpaid outstanding family expenses and salaries.

Witness Statement of George

21.George filed a witness statement dated 6 May 2025[14].

22.This witness statement is written in Chinese and I am going to summarise it in English.

23.George is the Applicant’s sole director and shareholder. For years, George has been running his family businesses on investment and medicine manufacturing (which is collectively referred to as “The Lai’s Group”) and has been the sole and final decision maker of the Lai’s Group which comprises also real estate investment on retail properties. The latter have been leased out in return for rental income.

24.The Applicant is one of those companies of the Lai’s Group. George has been assisted by the Lai’s Group’s staff in collecting rental from the tenants of various properties owned by the Lai’s Group.

25.George has two younger brothers, ie Johnny and Mr Lai Chik Wang. However, NSY is Johnny’s wife and CWK is NSY’s cousin.

26.Prior to December 2023, Johnny and NSY had worked for the Lai’s Group for years (Johnny及吳雪影曾在黎氏集團工作多年)[15].

27.George, Johnny and NSY had worked together since their involvement in Lai Sing Medicine Factory Limited (“the Medicine Company”) which is one of the major businesses of the Lai’s Group. In 2018, Mr Lai Chik Wang transferred his 3,000 shares in the Medicine Company to NSY while George has been holding the remaining 7,000 shares. Since then NSY had become a director and company secretary of the Medicine Company.

28.While NSY is one of the two directors of the Respondent, Johnny has acted as the contact person between the Applicant and the Respondent or particularly the Respondent’s agent. And prior to December 2023, Johnny was also the Applicant’s representative and agent (Johnny也曾經同時是申請人的代表及代理人)[16]. Johnny signed the 2023 Tenancy on behalf of the Applicant.

29.Although the Debit Notes demanding rental payment from tenants stated, inter alia, “Please Deposit to HSBC A/C No xxx-xxxxxx-001 and fax the deposit slip to xxxx xxxx”, the Applicant permits payments in cash by the tenants (申請人是容許租戶以現金交租)[17].

30.George would himself chop on the lower part of every Debit Note or Receipt with a round company chop (圓印) after “Received by”. But as far as he knows, prior to December 2023, the Applicant had three round company chops, one deposit with the company, another being kept by Johnny and the remaining one being kept by NSY for the reason that they had assisted in dealing with the tenancy matters of the Applicant (這是因為當時Johnny及吳雪影有協助處理申請人的租務事宜)[18]. Nevertheless, after December 2023, Johnny and NSY have not returned the chops to the Applicant.

31.Before September 2023, the Applicant let Shop C2 (instead of C3) to Luluflorist though by reference to the respective floor plans attached to the tenancy agreements, the area of Shop C3 overlaps that of the former Shop C2[19].

32.Prior to December 2023, Johnny and NSY had assisted the Applicant on tenancy matters, including issuing Debit Notes and Receipts. They however were not authorised to collect the rental payments directly from the tenants. Should they receive any cash payment from the tenants, George or the Applicant would not permit them to retain the cash without depositing the money into the Applicant’s bank account (即使收到任何現金，申請人及我絕不容許Johnny或其他人持有任何租金而不存入申請人指定的銀行戶口)[20]. Because of this, what the Respondent stated in its Notice of Opposition dated 22 January 2025 did not reflect the truth.

33.Around December 2023 or thereafter, George’s assistant (who turns out to be in fact Johnny’s son named Adrian (or大元in Chinese)) has taken over the tenancy matters. He would send the corresponding Debit Notes or Receipts to Johnny via WhatsApp because Johnny was the representative of the Respondent and Johnny’s wife, NSY, is a director of the Respondent. The Applicant would however only issue Receipts when payments had been received[21].

34.Nevertheless, no payment from the Respondent has ever been received during the period from 1 September 2023 to 31 July 2024 and as far as the Applicant is aware, no Receipt for payment during this period has been issued.

35.And in December 2023, George and Johnny had an intense dispute on family matters. George then no longer trusted Johnny and NSY. On that day, at the meeting room of Lai Sing Medicine Factory Limited in the presence of NSY and Adrian, he told Johnny to quit dealing with the Lai’s Group’s businesses that include tenancy matters.

36.Therefore, since that day onwards, Johnny and NSY should have become aware that all the authority that they might have should be terminated.

37.The Applicant had tried to demand the outstanding rents, management fees and rates for the Property to no avail. Instead, in July 2024, George received a registered mail from Johnny stating that he (ie Johnny) had been collecting rentals on behalf of the Applicant. He would deposit those rentals into the Applicant’s bank account only when George had settled all family expenses and staff salary:

「…… 本人黎藉揚在此通知閣下有關太宏有限公司物業租金事宜有關該物業之租金一直由本人代為收取直至閣下繳清家庭一切開支及員工薪酬後，本人會直接將相關租金存入相關戶口，但近二十二個月閣下並未有履行支付家庭開支及員工薪酬因此本人將有關租金保存在本人一個獨立戶口作為保證金直至閣下提供證明已支付相關家庭開支及員工薪酬後會即時存入相關戶口。在此本人敦促閣下盡快繳清尚未支付之家庭開支及員工薪酬以便本人將保存之租金存入相關戶口。」[22]

38.In that letter, Johnny acknowledged he had been keeping the rents, management fees and rates paid by the Respondent as follows[23]:

	LULU FLORAL
2023	July	53262
2023	August	67400
2023	October	67400
2023	November	70362[24]
2023	December	67400
2024	January	67400
2024	February	76550
2024	March	67400
2024	April	67400
2024	May	75550
2024	June	67400
2024	July	67400
		814924[25]

39.George stated that even if the Respondent had passed all the payments above to Johnny, this should not have happened because NSY, being a director of the Respondent, should have known that it was wrong to do so.

Witness Statement of CWK

40.CWK filed a witness statement dated 6 May 2025 as a director of the Respondent[26].

41.CWK stated she worked at a flower shop called “太子區 (樂天派)” between 2010 and 2015, gaining experience in the floristry industry before she decided to have her own shop.

42.In July 2021, CWK formed Luluflorist when her father, Mr Chiu King Tao, was the only director and shareholder. CWK wanted her father to hold Luluflorist on her behalf because she was new to the business. Notwithstanding this, CWK suggested in fact her father was only a nominee holding Luluflorist and she herself was the only person running the floristry business.

43.On 30 July 2021, CWK signed the First Tenancy Agreement in respect of the C2 Premises on behalf of Luluflorist, considering herself as the alter ego of the company[27]. By that time, LCY and NSY had already married. NSY, though as CWK’s cousin, never got involved in the rental arrangement of the C2 Premises.

44.As well, CWK stated she never knew anything about the arguments between LCY and his family despite NSY is her cousin. CWK stated she had never pried into the private affairs of the Lai’s family and had never been close with them.

45.Although the First Tenancy Agreement specified that the monthly rent was HK$65,000, LCY on behalf of the Applicant and CWK on behalf of Luluflorist agreed that the actual rent payable would be HK$50,000 per month. And throughout the First Tenancy Agreement,

a. LCY would pass CWK debit notes bearing the Applicant’s Letterhead, Address, Bank Account and Chop either by hand or through WhatsApp.

b. CWK would then arrange for rent, management fees and rates to be paid mostly in cash to LCY[28].

c. LCY would resolve issues arisen from the tenancy as a representative of the Applicant. For instance, when there was a water leakage problem from the 1^st floor above the C2 Premises, LCY would voice out on her behalf[29].

46.CWK referred to the above as Established Practice.

47.Around August 2022, according to CWK, the business of Luluflorist was stable despite the outbreak of Covid-19. CWK decided to keep running and possibly expanding the online presence of the floristry business. As NSY had experience in online marketing, CWK asked her to assist on an as-needed basis.

48.By that time, CWK’s father was getting older and CWK decided to start a new company under her own name, fading out the usage of Luluflorist. Prior to that CWK could not open a bank account using her own name for Luluflorist. Then on 28 September 2022, the Respondent was formed[30] and CWK had invited NSY to become a director as well, each holding 50% of the new company.

49.At about the same time,

a. CWK reached out to LCY to discuss matters in relation to tenancy renewal of the C2 Premises.

b. CWK was told that the area of and around the C2 Premises would be renamed and/ or repartitioned by the Applicant.

c. LCY told CWK that the rent would be increased from HK$50,000 to HK$67,000.

d. CWK claimed that she was shocked by the substantial increase. Therefore, she and LCY agreed to extend the First Tenancy Agreement for 1 month using the increased rent as a test.

50.On 28 August 2023, LCY on behalf of the Applicant leased the Property to the Respondent under the 2023 Tenancy. According to CWK, the Property was only renamed from Shop C2 to Shop C3.

51.Again, although the 2023 Tenancy stated that the monthly rent was HK$80,000, LCY on behalf of the Applicant varied the agreement by agreeing that the actual rent payable would continue to be HK$67,000 per month. LCY and CWK also agreed that they would continue following the Established Practice. It was only around July 2024 when LCY told CWK to deposit rents, management fees, rates into the Applicant’s bank account as per the debit notes instead of paying cash.

52.Then, from August 2024 onwards, CWK started depositing all rents, management fees and rates into the Applicant’s bank account. She have kept the proof of transfer and adduced them in the Respondent’s List of Documents filed and exchanged on 2 April 2025. CWK also received debit notes and receipts from LCY.

53.Around September 2023, the Respondent’s company secretary filed the NAR1 dated 28 September 2023. CWK did not realise that the company secretary failed to include her as a director on the record. According to CWK, she had never been removed as a director of the Respondent. The Respondent used a different company secretary and filled in the correct information in the NAR1 dated 28 September 2024.

54.Lastly, CWK emphasised that she had never spoken with anyone from the Applicant other than LCY in relation to the rental matters. No one ever claiming on behalf of George had reached out to her in respect of the rental arrangement of the 2023 Tenancy.

Witness Statement of LCY (ie Johnny)

55.LCY filed a witness statement dated 6 May 2025 in response to allegations made against him by the Applicant and/ or George in the Applicant’s Amended Reply dated 28 April 2025[31].

56.According to LCY, the father of both George and him started engaging in the businesses of real estate and Chinese traditional medicine (“the Lai’s Family Businesses”) in 1960s and 1980s respectively. In around 1990s, their father started using limited liability companies for some of his purchases and acquisitions for the Lai’s Family Businesses. He would use different family members’ names as shareholders and/ or directors. Both George and LCY or other family members knew and agreed to be so in the Lai’s Family Businesses as nominees only[32].

57.In 1995, LCY’s son Adrian was born.

58.In 2003, LCY met and started living with NSY in their matrimonial home at Yee Hop Yuen at 11 Miles, Route Twisk, Chuen Lung, Tsuen Wan (“Yee Hop Yuen”) which comprises some 7 houses each accommodating the following:

i. George;

ii. Adrian;

iii. LCY and NSY;

iv. Lai Chik Wang;

v. The helpers;

vi. Medicine Factory; and

vii. Office.

59.In 2010, LCY and NSY became married officially and in August, the Lai’s family decided to use the Applicant to purchase Flats B, C, D, E, F and Forecourt on G/F, Nos 152A, 152B, 152C and 152D Prince Edward Road West, Nos 222G and 222H Fa Yuen Street (“Prince Edward Road West Premises”). While LCY admitted he has never been a director or shareholder of the Applicant, he has been tasked with, inter alia, the management and investment in relation to the Prince Edward Road West Premises. For that reason, contribution of MPF has been made by the Applicant since 1 November 2018[33].

60.LCY emphasised that he has been the only person responsible for liaison and dealing with the tenants of different portions of the Prince Edward Road West Premises at all material times on behalf of the Applicant, including the signing of the First Tenancy Agreement on 20 July 2021 and the 2023 Tenancy.

61.Particularly, LCY claimed that he has been collecting rental payments mostly in cash from the tenants of the Prince Edward West Premises, including those from CWK between August 2021 and around May 2024.

62.LCY alleged that in around 2022, George told him that the money in the Lai’s family accounts was running low and that business was forecasted to be difficult due to Covid-19. George told the various Lai’s families to spend less. LCY and NSY listened to George and reduced their household expenses by almost 30%[34], only to find out later that George was using the income generated through the Lai’s Family Businesses to purchase more than 10 second-hand cars for himself[35]. LCY explained during cross-examination that the purchases had to made prior to June 2022 so that the second-hand cars imported from overseas but seeking first registration in Hong Kong might not have to comply with the requirements of the Air Pollution Control (Vehicle Design Standards) (Emission) Regulations (Cap 311J) and Noise Control (Motor Vehicles) Regulation (Cap 400I).

63.At about the same time, according to LCY, George kept delaying transferring money for the Lai’s family households’ expenses[36] and business disbursement for the Lai’s Family Businesses, including the salary of helpers and staff working at the medicine office[37]. The delay had accumulated to a sizable sum for around 20 months.

64.In light of the above, LCY made the business disbursement on behalf of the Lai’s family businesses from his own personal wealth. Meanwhile, he kept the rent received from the Prince Edward Road West Premises to make sure that George would reimburse him in due course. LCY confirmed that the monies are still sitting in his bank account. He alleged further that the Applicant and/ or George had never objected to this arrangement.

65.At the same time, the former accountant of the Lai’s Family Businesses, Maggie Wong, left, at which point his son, Adrian, took up the same role. LCY stated that what used to be done by Maggie Wong has now been done by Adrian, ie issuing debit notes, stamping the same with the Applicant’s chop (which has always been in either Maggie or Adrian’s possession), passing the said debit notes to him as the Applicant’s representative liaising with the tenants and being authorised to collect rental payments on behalf of the Applicant.

66.In around May 2024, George went to the Prince Edward Road West Premises, telling the tenants (save for CWK) that LCY was no longer responsible for their tenancies in respect of the Prince Edward West Premises. George even told those tenants to call police if LCY went further to collect rent.

67.In June 2024, LCY told Adrian to start collecting rental income of the Prince Edward West Premises to avoid George’s feuds from affecting the operation of the Lai’s Family Businesses and the tenants of the Prince Edward Road West Premises.

68.In July 2024, LCY wrote a letter to George asking him to reimburse expenses incurred by the Lai’s family and the Lai’s Family Businesses, after which he would deposit the rental income between July 2023 and July 2024 into the relevant bank account[38].

69.In August 2024, LCY told CWK to start paying rent to the Applicant’s Bank Account. LCY stated that he has been liaising between the Applicant (through Adrian as its accountant) and CWK in relation to all rental debit notes, bank transfers and receipts to-date. LCY alleged that the Applicant and/ or George had never objected to this arrangement.

70.In light of the above, LCY maintained that he has the authority to collect rental payment from the Respondent throughout the 2023 Tenancy.

Witness Statement of NSY

71.NSY filed a witness statement dated 6 May 2025 in response to allegations made against her by the Applicant and/ or George in the Applicant’s Amended Reply dated 28 April 2025[39].

72.NSY stated that she met LCY in 2003 and shortly thereafter, they started living together in their matrimonial home at Yee Hop Yuen. They got married officially on 11 November 2010.

73.In 2013, LCY and NSY gave birth to a son who is not however Adrian. Adrian is only NSY’s stepson.

74.According to NSY, in around 2021, her cousin, ie CWK told LCY that she wanted to open a flower shop in the Prince Edward area. They signed the First Tenancy Agreement and the 2023 Tenancy.

75.NSY emphasised that although she is a director of the Respondent, CWK only included her in name out of respect for her as an elder cousin, as well as recognition of her assistance regarding online promotion of the Respondent. NSY stated that she had never been involved in the rental arrangements of the First Tenancy Agreement and the 2023 Tenancy. She even had not told CWK about rift between LCY and his family for the reason that she did not want her side of the family to be worried about her or think badly of LCY, her husband. More particularly, this dispute within the Lai’s family did not concern CWK or her business.

76.NSY refuted the allegations by Mr Chan that:

a. The Applicant said that George arranged her to work at Lai Sing Medicine Factory Limited and expressly informed her that her husband “should not collect rental and/ or handle cash” [40].

b. The Applicant said that NSY was present at a dispute between George and LCY in December 2023[41].

77.NSY maintained that:

a. She was never told that LCY should not collect rent or handle cash. To the contrary, LCY had always been responsible for the rental matters of, inter alia, the Property of the Applicant since around late 2010[42].

b. Since November 2023, NSY had never seen George in person. She remembered this clearly because George sent her a WeChat message on 7 November 2023 saying that he “fired” her. NSY had never met him then on.

Discussion

78.Having reviewed the above and having heard the cross-examination of the various persons who filed their witness statements, I cannot but agree with Ms Fontanne Chu (“Ms Chu”), acting on behalf of the Respondent, that this case arises from a dispute within the Lai’s family rather than a landlord and tenant matter. The amount of time spent on understanding the operation of the Lai’s Family Businesses, as well as the relationship between George and LCY was significant.

79.With respect, I am of the view that the Lai’s Family Businesses have been conducted not in an coordinated manner if not haphazardly:

a. All the senior management of the Lai’s Family Businesses are carried out by members within the Lai’s family without any formal arrangement.

b. Although LCY has never been formally employed by the Lai’s Group, he has been allowed to use a name card, purporting to show that he is the Director of :

(i) Lai Sing Medicine Factory Limited, the Lai’s family flagship;

(ii) Lai’s Medicine; and

(iii) Lai Sing Investment Ltd[43].

c. While George appears to have taken the helm of the Lai’s Group, holding and signing the cheques in particular, all the ground works of the Lai’s Group had been performed by LCY despite his relationship with George got sour;

d. LCY took the responsibility to:

(i) collect cheque for payment of rent from the tenant of Shop B2 and Shop C2, G/F, ie (“the Combined Unit”) on the left side of the Property on 17 June 2023[44];

(ii) assist Adrian in offering the Combined Unit for sale on 6 September 2023;

(iii) take the readings of the water meters for the Prince Edward Road West Premises on 18 August 2023 and 11 December 2023[45];

(iv) oversee the payment of rates by the tenants of the Prince Edward Road West Premises on 6 February 2024[46];

(v) liaise with the tenant of Shop D, G/F, ie the unit on right side of the Property, on 11 May 2023 when the tenant received a letter from Messrs Yick & Chan dated 10 May 2024[47] informing him that LCY “no longer represents our client in handling tenancy matters”, and alleging that he had not paid the rent for the period from 1 April 2024 to 30 April 2024. LCY suggested in WhatsApp to Adrian that it took him 3 hours to resolve the matter with the tenant[48];

(vi) to collect the cheque from that tenant for paying the rent, management fees and rates on 12 May 2024 despite the tenant had been informed that LCY “no longer represents our client in handling tenancy matters” [49];

(vii) whereas a similar letter was sent by Messrs Yick & Chan to the tenant of the Combined Unit[50], to collect the cheque from that tenant for paying the rent, management fees and rates on 12 May 2024 despite the tenant had been informed that LCY “no longer represents our client in handling tenancy matters” [51];

(viii) continue to get the bank deposit payment slips from the various tenants of the Prince Edward West Premises and copy them to Adrian[52];

(ix) pass the electricity bills to the various tenants of the Prince Edward West Premises[53]; and

(x) collect cash payments on 8 February 2024 for letting out the open area of the Prince Edward Road West Premises to stalls or kiosks prior to the period before and after Chinese New Year[54].

e. Most of the allegations by Mr Chan in the Amended Reply were indeed rebutted by contemporary documents or George’s own witness statement, including but not limited to:

(i) It was alleged that Applicant did not authorised LCY to collect rents, management fees or rates. But George said in his witness statement that should they receive any cash payment from the tenants, George or the Applicant would not permit them to retain the cash without depositing the money into the Applicant’s bank account (即使收到任何現金，申請人及我絕不容許 Johnny 或其他人持有任何租金而不存入申請人指定的銀行戶口)[55].

(ii) It was alleged that the property under the First Tenancy Agreement was not the same identical shop as in this Action. This suggestion does not accord with the floor plans attached to the First Tenancy Agreement and the 2023 Agreement.

(iii) The Applicant denies that paragraphs 6.1, 6.2 and 6.3 would constitute any pattern or established practice. But the manner of receiving rentals by LCY from tenants of the Prince Edward Road West Premises proves otherwise.

(iv) George stated in his witness statement at §26 that his assistant, around December 2023 or thereafter, had sent the corresponding Debit Notes or Receipts to LCY via WhatsApp because LCY was the representative of the Respondent and Johnny’s wife, NSY, is a director of the Respondent. However, the two letters sent by Messrs Yick & Chan on 10 May 2024 to other tenants of the Prince Edward Road West Premises betrayed him:

a. Adrian had not informed any of the tenants of the Prince Edward Road West as regards the cessation of LCY’s authority to receive payment on behalf of the Applicant. That explained why the tenant of Shop D was surprised when he received the letter from Messrs Yick & Chan[56]. The Applicant had provided no evidence to prove that Adrian or anybody had indeed so informed any of the tenants;

b. The Applicant had relied on LCY to collect rentals as agent of the Applicant from the tenants of the Prince Edward Road West Premises (instead of agent of the Respondent as alleged). The letters from Messrs Yick & Chan stated: “our client’s representative has reminded you that Mr Lai Chik Yeung Johnny … no longer represents our client in handling tenancy matters. However, it has come to our client’s attention that subsequently, you as tenant have paid monthly rent … to (LCY) …” (underline added)

f. It is surprised that if, as alleged by George, he had told LCY not to follow the Lai’s Family Businesses, including that of the Applicant, Adrian continued to send the Debit Notes and the Rates Demand Notes of the Prince Edward Road West Premises to LCY at least on 6 February 2024[57].

g. If NSY was “fired”, the Applicant had produced no record or resolution to prove its case.

h. Everything regarding the management of the Lai’s Family Businesses by members of the Lai’s family appears to be at the whims of George.

80.As regards the Established Practice again, the query raised by Mr Chan on the ownership of the Respondent at §13 above is readily resolved by the Incorporation Form (NNC1) filed with the Company Registry on 28 September 2022 which stated that both NSY and CWK were the founder members and directors[58].

81.By reference to the copy of the First Tenancy Agreement and the 2023 Tenancy produced by the Applicant, CWK signed with her English name “Vicky” on behalf of either Luluflorist or the Respondent[59]. She could even remember that on both occasions, she went aboard LCY’s car parking outside the Property to sign the tenancy agreements.

82.Despite the signing of the 2023 Tenancy, the Receipts issued to the Respondent still addressed to Luluforist instead of the new name, 花仙子花藝園藝設計有限公司[60]. All these Receipts stated rents, management fees, rates etc payable by the Respondent had been received by the Applicant for the period since 1 September 2023 to 31 March 2025 with the Applicant’s company chop though the Applicant alleged that only the rent, management fees and rates from 1 September 2023 to 31 March 2024 are outstanding. One cannot tell any difference from the face of these Receipts. George himself had not signed on any of these Receipts but appears to acknowledge that payments from the Respondent since the payments from 1 April 2024 onwards have been received.

83.I agree that the area covered by Shop C2 in the First Tenancy Agreement and that of the Property are approximately the same save that in the latter, part of the area covered by Shop C2 has been carved out as part of the open yard[61]. In my view, the same open yard should have existed by the time when the First Tenancy Agreement was signed. It is extremely unlikely and against common sense that the Applicant would create an open yard subsequent to the issue of the occupation permit when this concerns a high-rise building with upper floors. Indeed, by reference to the rental analysis as shown on the WhatsApp exchange between LCY and Adrian on 1 August 2023[62], the Respondent appeared to have occupied the open yard as well. The parties only did not bother to mark out the area of the open yard in the First Tenancy Agreement.

84.Bearing in mind of the above, I am convinced that the Established Practice existed between the Applicant and the Respondent as well as other tenants of the Prince Road West Premises. While George suggested that he has been assisted by the Lai’s Group’s staff in collecting rental from the tenants of various properties owned by the Lai’s Group[63], I am convinced by the evidence before me that it has been only LCY who is doing that. In fact, neither the Applicant nor George could name any person or even Adrian who has been doing the same. In any event, the Applicant has not called or arranged any such person or even Adrian to give evidence in court.

85.For George himself, he said during cross-examination by Ms Chu that he had no idea of what was going on with the properties owned by the Lai’s family because they owned so many properties. At one point during cross-examination, George was adamant that the First Tenancy Agreement and the 2023 Tenancy had the details of the Applicant’s bank account written down so that the Respondent was required to pay the monthly rents, management fees etc to it. When he was taken to the corresponding tenancy agreements, he could find nothing about it.

86.George also suggested that Adrian would go to the Prince Edward Road West Premises to collect rent from the tenants. Yet his witness statement did not sit well with his assertion. He could provide no evidence on that.

87.Following from the above, I am of the view that both George and the Applicant had allowed LCY to hold out as the agent of the Lai’s Family Businesses including the Applicant itself. LCY has been allowed to liaise with the tenants of the Lai’s investment properties and collect rentals from the tenants until Messrs Yick & Chan sent the two letters to the Respondents’ neighbours on 10 May 2024 but even so these tenants were content to hand over their open cheques dated 12 May 2024 and 10 May 2024 in payment of rent to LCY on 12 May 2024 without addressing the payee[64]. This further supports the existence of the Established Practice even with the other tenants of the Prince Road West Premises.

88.In reply to Mr Chan’s cross-examination, LCY stated that he has been acting on behalf of the Lai’s Family Businesses instead of George himself even though he has not been conferred a formal authority on behalf of the companies involved[65].

89.When I raised the question to George during cross-examination that if he or the Applicant had informed the Respondent that LCY had no authority to collect rental payment from the Respondent or his authority, if any, to do so had been revoked. George answered either Adrian told him so or Adrian should have done it. In any event, George said under cross-examination that he did not know whether and how Adrian reached the Respondent and told whoever of the Respondent about LCY’s cessation of authority. As said, Adrian has not been called to give evidence and neither George nor the Applicant could provide evidence that Adrian had done so.

90.On the other hand, George suggested that NSY and Adrian were present when he told LCY not to collect rental payment from the tenants. Firstly, as stated in §77 above, NSY denied she was present and again, Adrian had not been called to give evidence to prove otherwise. Additionally, according to George’s own evidence, the event took place in December 2023 but NSY had not met him since George sent a message to her that she was “fired” in November 2023. Although NSY had clearly stated so in her witness statement dated 6 May 2025[66], neither George nor the Applicant could provide evidence to disprove it.

91.It was NSY’s evidence that “my Husband had always been responsible for the rental matters of, inter alia, the C2 Premises/ Premises of the Applicant since around late 2010”. She said, during cross-examination, LCY had never told her or intimated to her that his role to collect payments from the tenants had been revoked prior to the subject action by the Applicant. NSY also said she worked for the Lai’s Family Businesses. This was acknowledged by George’s witness statement as well when he stated at §7 that: Prior to December 2023, Johnny and NSY had worked for the Lai’s Group for years (Johnny 及吳雪影曾在黎氏集團工作多年)[67]. NSY’s evidence was candid and her answer was direct. I accept NSY was a creditable witness.

92.In addition to the lack of evidence from Adrian, the Applicant had not produced a single shred of contemporaneous document in support of George’s allegation that LCY’s authority was terminated in December 2023.

Apparent Authority

93.I find from the above that the Applicant has for a long period of time at least since signing the First Tenancy Agreement in 2021 held out that LCY was the only person acting on its behalf in the tenancy matters at least in respect of the Prince Edward Road West Premises[68]. LCY even had the authority to vary the monthly rent payable in the First Tenancy Agreement and the 2023 Tenancy, a fact that both George or the Applicant have agreed. I am also persuaded that the Established Practice had existed since signing the First Tenancy Agreement in 2021.

94.Even taking the Applicant’s case to the highest, LCY had authority to collect the rent from tenants of the Prince Edward Road West Premises until December 2023. But the cessation of authority has been denied by all witnesses, ie CWK, LCY and NSY. George could provide no evidence to the contrary.

95.On the other hand, it is evidence that Adrian continued to send the corresponding Debit Notes and Rates Demand Notes to LCY at least on 6 February 2024. LCY said in his evidence under cross-examination that he would send Debit Notes and Rates Demand Notes etc to the tenants of the Prince Edward Road West Premises and then collect rent (either in cheque or cash) in person when he visited the Prince Edward Road West Premises on the following day. As said, the tenants (not including the Respondent) were content to entrust LCY with their open cheques without addressing payment to the Applicant or anybody. Evidently, LCY was not acting as a representative of the tenants but a representative or agent of the Applicant.

96.Indeed, LCY acknowledged in his letter to George dated 11 July 2024 that he kept around HK$814,000 in a separate bank account, being rent paid by the Respondent for the period between July 2023 to July 2024 (save for September 2023). George confirmed under cross-examination that the Applicant had never responded to this letter. If LCY had lost his authority or had no authority at all, why George or the Applicant did not say so?

97.Mr Chan cross-examined CWK on payment of rent through bank account in and from August 2024 onwards. He then asked if it was weird for LCY to ask her to change the payment method from cash to bank deposit. CWK unequivocally said no as it was the landlord’s decision. Upon being repeatedly asked of the same question in different ways, CWK’s answer remained the same.

98.On the other hand, it was weird that Messrs Yick & Chan sent the letters to the Respondent’s neighbours dated 10 May 2024, complaining the two tenants had not paid rent for April 2024 but no similar letter was sent to the Respondent if the rental since July 2023 remained unpaid for say 9 months.

99.Even the tenant of Shop D treated LCY as an agent of the Applicant when he received the letter from Messrs Yick & Chan. The tenant sent a WhatsApp message to LCY questioning why LCY asked solicitors to send him such a letter (早晨黎生！昨天你叫律師嗰邊送封信俾我是什麼！)[69]. Clearly to the tenants of the Prince Edward Road Premises, LCY was “on the side of the Applicant” even in May 2024.

100.Here, Mr Chan referred to Akai Holdings Ltd (in Liquidation) v Kasikornbank plc [2011] 1 HKC 357; (2010) 13 HKCFAR 479 in which the Court of Final Appeal cited at §43 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480, 506 where Diplock LJ identified four conditions which have to be satisfied before a third party, a “contractor”, can enforce a contract against a company entered into by a purported agent with no actual authority:

(1) A representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor;

(2) Such representation was made by a person or persons who had “actual” authority to manage the business of the company either generally or in respect of those matters to which the contractor relates;

(3) The contractor was induced by such representation to enter into the contract, that is, that he is in fact relied upon it; and

(4) That under its memorandum or articles of association the company was not deprived of the capacity either to enter into a contract of the kind sought to be enforced or to delegate authority to enter into a contract of that kind to the agent.

101.Diplock LJ explained at 503 that apparent authority:

“… is a legal relationship between the principal and the contractor created by a representation, made by the principal to the contractor, intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of a kind within the scope of the ‘apparent’ authority, so as to render the principal liable [thereunder].”

102.Mr Chan submitted that on LCY’s own evidence, LCY had no actual authority because:

(1) he did not work for the Applicant;

(2) he worked for the Lai’s Family Businesses;

(3) his salary was not paid by the Applicant but by George via personal account;

(4) the MPF was solely for tax purposes.

103.With respect, however, LCY’s evidence was that George and his father formed various limited liability companies, assigning different family members as shareholders and/ or directors as nominees only. Neither George nor the Applicant disputed this in trial.

104.In fact, LCY’s evidence was that he worked for the Lai’s Family Businesses which include the Applicant. Whether George issued cheque in payment of the Yee Hop Yuen households expenses which include LCY’s salary out of his personal account or otherwise is not so important because the MPF was indeed paid on the account of LCY stating “Employer Name” being the Applicant[70]. I trust on the company record or even the tax returns filed to the Inland Revenue, LCY had been regarded as an employee.

105.On the other hand, LCY has been allowed to use a name card, purporting to show that he is the Director of :

(i) Lai Sing Medicine Factory Limited, the Lai’s family flagship;

(ii) Lai’s Medicine; and

(iii) Lai Sing Investment Ltd[71].

106.Even at trial, neither George nor the Applicant disputed LCY had the authority on behalf of the Applicant to sign the First Tenancy Agreement and the 2023 Tenancy. Neither George nor the Applicant disputed that LCY even had the authority on behalf of the Applicant to vary the rents payable under the two tenancies. In §10 of George’s witness statement, he acknowledged that prior to December 2023, LCY was also the Applicant’s representative and agent (Johnny 也曾經同時是申請人的代表及代理人)[72]. George or the Applicant only disputed retrospectively whether LCY had the authority on behalf of the Applicant to collect rents from the Respondent.

107.With respect, I have found that the Established Practice put forward by the Respondent had existed ever since the First Tenancy Agreement with Luluflorist as well with other tenants of the Prince Edward Road West Premises. As stated in §95 above, LCY said in his evidence under cross-examination that he would send Debit Notes and Rates Demand Notes etc to the tenants of the Prince Edward Road West Premises and then collect rent (either in cheque or cash) in person when he visited the Prince Edward Road West Premises on the following day. Such practice is reasonable in the market and is supported by the WhatsApp messages on 6 February 2024[73]. In contrast, neither George nor the Applicant could put forward any evidence to dispute it.

108.In fact, the Court of Final Appeal in Akai, supra, referred at §45 to a decision of the Supreme Court of Western Australia Court of Appeal, Auxil Pty Ltd and Another v Terranova & Others (2009) 260 ALR 164 where Newnes JA said at §176 about representations capable of creating an apparent authority:

“A representation creating an apparent authority of an agent may be made in a number of ways but the most common form of representation by a principal is by conduct, that is, by permitting the agent to act in the management or conduct of the principal’s business. By permitting the agent to act in the management or conduct of the business, the principal thereby represents to anyone dealing with the agent that he or she has authority to do those acts on behalf of the company which an agent authorised to do acts of the kind which he or she is in fact permitted to do normally does in the ordinary course of such business.” (underline added)

109.I am of opinion that LCY had been clothed with such apparent authority in the present case.

110.Here again, Mr Chan contended, as the plaintiff in Akai, supra, the Respondent had actual knowledge of LCY’s lack of authority or its belief that LCY’s had authority was dishonest or irrational[74]. Mr Chan tried to argue, by piercing the corporate veil of the Respondent, the Respondent was not an outsider. Mr Chan pinpointed that LCY accepted cheques from all other long term tenants but he took cash from the Respondent. Mr Chan referred to CWK as an extended family friend and she was even invited to Yee Hop Yuen when she was a kid. NSY is a 50% shareholder and interested in the financial health of the Respondent.

111.With respect, I do not agree with Mr Chan. CWK had explained during cross-examination she did not have a bank account when she operated Luluflorist. The floristry business had enabled her to receive cash day in and day out and therefore she tendered cash in payment of the rent, management fees and rates. This had happened since the First Tenancy Agreement and no query had ever been raised by the Applicant through George, its accountant or anybody. CWK just continued to do so under the 2023 Tenancy (insofar when Mr Chan would like to pierce the corporate veil) and there had been nothing wrong with it until LCY reminded her to deposit the payments into the Applicant’s bank account in August 2024. George stated in his witness statement at §15 that the Applicant permits payments in cash by the tenants (申請人是容許租戶以現金交租)[75]. George also stated in his witness statement at §18 that prior to December 2023, LCY and NSY had assisted in dealing with the tenancy matters of the Applicant (這是因為當時Johnny 及吳雪影有協助處理申請人的租務事宜)[76].

112.Indeed, other tenants of the Prince Edwards Road West Premises were content to pass the open cheques in payment of their rent to LCY without addressing the name of payee. I do not see any material difference in receiving cash or open cheques in the present case so long as LCY has the apparent authority to do so.

113.It was also NSY’s evidence that LCY had always been responsible for the rental matters of, inter alia, the Property of the Applicant since around late 2010. I consider her evidence credible as I am persuaded that all family members of the Lai’s family believe they all worked for the Lai’s Family Businesses. In any event, NSY lived with LCY in Yee Hop Yuen rather than with CWK. The Applicant had put forward no evidence to dispute that NSY had not been involved in running the business of the Respondent save for online marketing as suggested by CWK. In any event, CWK had considered herself the alter ego of both Luluflorist and the Respondent. The Applicant by extension failed to impute actual knowledge on CWK or the Respondent of LCY’s lack of authority if that really was the case.

114.To conclude, I do not consider either the Respondent or CWK an insider as suggested by Mr Chan. The Applicant failed to prove that the Respondent or CWK had actual knowledge of LCY’s lack of authority (which is denied by LCY) or its belief that LCY’s had authority was dishonest or irrational. CWK in fact denied knowing that LCY was allegedly not authorised to collect rent because no one other than LCY had ever approached her.

115.As Lord Neuberger of Abbotsbury NPJ concluded in Akai, supra, at §75:

“In my view, once a third party has established that the alleged agent had apparent authority, i.e. that the principal held out the alleged agent as having authority to bind the principal, and that the third party has entered into a contract with the alleged agent on behalf of the principal, then, in the absence of any evidence or indication to the contrary, it would be an unusual case where reliance was not presumed.”

Conclusion

116.In conclusion, I find the Respondent had paid rents, management fees and rates to the Applicant through LCY for the period from 1 September 2023 to 31 July 2024. She had in fact received Receipts for her payments apparently from the Applicant. There had been nothing at least up to August 2024 that may put CWK upon inquiry of the authority of LCY.

117.Therefore, there is no ground for the Applicant to commence the present proceedings and the application by the Applicant on 14 January 2025 is hereby dismissed.

Costs

118.Costs normally follow the event after trial.

119.There is, I think, nothing in this case to depart from the above general rule.

120.I therefore make a costs order nisi that the costs of this action, including all reserved costs and costs of this trial, together with certificate for counsel, be paid by the Applicant to the Respondent to be taxed on District Court scale if not agreed.

121.Finally, I thank counsels for their assistance.

Mr Edward T C Chan, instructed by Yick & Chan, for the Applicant

Ms Fontanne Chu, instructed by Eddie Lee & Company, for the Respondent