Link Properties Ltd v. 1968 Ltd

HCA 1282/2024

[2025] HKCFI 3471

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1282 OF 2024

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REASONS FOR DECISION

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A.   INTRODUCTION

1.This is the defendant’s appeal against the summary judgment granted by Master KW Wong on 8 May 2025, under which the defendant had been ordered to, among other things, deliver vacant possession of the Premises[1] and to pay the plaintiff mesne profit/rent at the rate of $164,100 per month from 1 July 2024 until the date of delivery of vacant possession of the Premises (“the Decision”).

2.By summons filed on 14 July 2025 (“the Stay Summons”), the defendant also applies for stay of execution of the Decision pending the final determination of the appeal by this Court.

B.   BACKGROUND OF THIS ACTION

3.By a tenancy agreement dated 2 January 2024 entered into between the plaintiff as landlord and the defendant as tenant, the plaintiff let 2 shops in Lok Fu Commercial Centre (“the Premises”) to the defendant for a fixed term of 3 years from 26 February 2024 (“the Tenancy Agreement”)

4.On 2 July 2024, the plaintiff commenced this action, by which it sought to, among other things, forfeit the tenancy as held by the defendant under the Tenancy Agreement and recover vacant possession of the Premises. 

5.The plaintiff alleges that the breaches which gave rise to the plaintiff’s right to forfeit the tenancy include[2]:

(1)  The defendant had altered the external walls on the two sides adjacent to the shopfront of the Premises (“the Areas”) by hacking off the original finishes and tiles, converting them into a structure laid with new tiles and finishes, and festooning them with illuminated logos or signages without consent of the plaintiff (“the External Walls Breach”)[3];

(2)  The defendant did not operate a “specialty restaurant in Shanghainese style” (“the Cuisine Breach”)[4].

6.The defendant contends that it has raised triable issues in relation to the alleged breaches.  Its lines of defence may be summarised as follows.

7.In respect of the External Walls Breach, it is said that:

(1)  The Areas are not part of the structural members/columns of the shopping centre as alleged by the plaintiff.   If the Areas are part of the structural members/columns of the shopping centre as alleged, then that means they would not be part of the Premises, and that in turn means that the defendant could not have breached the Tenancy Agreement;

(2)  The plaintiff had made representations (“the plaintiff’s Licence Representations”) which amounted to approval or consent of the plaintiff for the renovation or fitting works to be done to the Areas by the defendant;

(3)  It is an implied term to the Tenancy Agreement that the plaintiff would licence the Areas to the defendant for advertising / marketing purpose;

(4)  Further or in the alternative, the Areas form part of the Premises which had been leased to the defendant and therefore the defendant was entitled to undergo renovation thereof.

8.Regarding the Cuisine Breach, it is the pleaded case of the defendant that:

(1)  The Tenancy Agreement does not provide that the Premises shall be used as a restaurant offering cuisine in Shanghainese style;

(2)  Furthermore, the defendant had provided its customers with Shanghainese menu on 5 July 2024.

C.   LEGAL PRINCIPLES

C1.  Summary Judgment

9.In Li Chuen Kwai v. Po Lam Construction Development Limited (HCA 2376/2013, unreported, 24 September 2014), it was held that:-

“11. As far as the plaintiff’s claim is concerned:

(1) An application for summary judgment must be supported by an affidavit verifying the facts on which the claim is based [Order 14, rule 2(1), Rules of the High Court].

(2) The Statement of Claim must be good and complete in itself; any defect or omission in the Statement of Claim cannot be corrected or supplemented by the plaintiff’s affidavit. If the defect is one of substance, the application for summary judgment will be dismissed [see: Hong Kong Civil Procedure 2014 at Practice Note 14/1/5].

(3) This means that an Order 14 application has to proceed on the case as pleaded, and it is those facts (as pleaded) which have to be verified on affidavit.

(4) Where the assertions in the plaintiff’s affirmation constitute a material deviation from the plaintiff’s pleaded case, the plaintiff will have failed to verify his claim as pleaded, and summary judgment should not be granted [Lin Jan v Long Xiaobo, HCA 1516/2012 (Judgment dated 4/09/2013)].

(5) Equally, summary judgment will not be granted where the plaintiff’s affidavit evidence is materially different from and inherently inconsistent with his/her case in the Statement of Claim [see: Sin Yuk Hung v Sin Tung San, HCA 474/2013 (Judgment dated 18/12/2013)].

12. As far as the defendant’s defence is concerned:

(1) The defendant shoulders the burden to satisfy the court that he has a real or bona fide defence (ie that there are triable issues), or that there ought for some reason to be a trial of the plaintiff’s claim.

(2) However, a complete defence need not be shown. The defence set up need only show that there is a triable issue or question or that for some other reason there ought to be a trial; and leave to defend ought to be given unless there is clearly no defence in law and no possibility of a real defence on the question of fact.

(3) Although the mere assertion in an affidavit does not, ipso facto, provide leave to defend, the court will not embark upon a mini‑trial of the action on paper and leave to defend will be granted unless the defence raised is so incredible or so contradicted by contemporaneous documents or circumstances that it becomes clear that the defence is a sham.

(4) The test is not whether the defendant’s assertions are to be believed, rather it is whether those assertions are believable, ie capable of being believed. If so, the defendant must have leave to defend.

(5) Whether the defendant’s assertions are believable is a question that should be answered not by taking those assertions in isolation bur rather by taking them in the context of so much of the background as either undisputed or beyond reasonable dispute.”

10.In Time Rich 08 Limited v DBE (HK) Limited & Others [2018] HKCA 404, it was held by the Court of Appeal that:

“…in deciding whether a plaintiff is entitled to summary judgment the relevant test is whether the defendant has raised credible triable issues. If there are, the matter should go to trial. If not, judgment should be entered against the defendants. In considering whether there are triable issues, the Court will not take the defence on its face value but test it against the evidence disclosed in the affidavit including matters such as contemporaneous documents, whether the alleged defence is inconsistent with the defence previously put forward or whether the defence is only recently raised despite opportunity being given to the defendant to respond earlier. The Court will also consider the inherent probability of the defence but what the Court should not do is to conduct a mini-trial on complicated factual issues : Paul Y Management Ltd v Eternal Unity Development Ltd (CACV 16/2008)” (at paragraph 5.2) (emphasis added)

11.To raise a triable issue or arguable defence, the defendant cannot be sparing of the particulars of his defence, and then claim, as a result of his own parsimony in details, that there is an obscurity which must await trial for illumination.^[5]

12.If summary judgment were to be granted, it could only be granted on the claims set out in the statement of claim: Wong Chow Hoi Sze Elsie v Crown Wine Cellars Limited (CACV 262/2015, unreported, 15 April 2016), at [10].  It has therefore been held that the statement of claim has to be complete and good in itself, and any defect or omission cannot be corrected or supplemented by the plaintiff’s affidavit: Tan Khay Chuen & Another v Ko Ping Shun Benson (CACV 238/2015, unreported, 8 July 2016), at [23].

13.The same logic applies to the defendant’s pleaded case.  That means that if a defendant has already filed a defence, in opposition to a summary judgment application, the defendant cannot rely on a case not pleaded in the defence: Wang Shuai v Zhang Qiaohui [2024] HKCA 304, at [46]; Kaefer AG v Winfield Marine Services Co Ltd [2022] HKCA 807, at [30] – [32].

14.Mr Lau for the defendant argued that there is no general principle that a defendant cannot rely on a defence not pleaded in the Defence.  He relied on Commentary 14/4/3A (p.364) of the Hong Kong Civil Procedure 2025 (Vol.1) which states that:

“Recent authorities have cited a rule (referred to herein as the ‘sale rule’) to the effect that a defendant cannot rely upon an unpleaded defence to resist an application for summary judgment when they have already filed a defence: see (inter alios) Hong Kong Topkey Ltd v Wintac (Hong Kong) Ltd [2023] HKCFI 1711, [14] – [16]; and Wang Shuai v Zhang Qiaohui [2023] HKCFI 2067, [52(1)], which was affirmed without elaboration by the Court of Appeal in [2024] HKCA 304, at [46].

The said rule is said to be based on the dictum of the Court of Appeal in Kaefer AG v Winfield Marine Services Co Ltd [2022] HKCA 807, [30] – [32]. However, in Kaefer AG, the new unpleaded defence was raised for the first time before the judge (on appeal from the master’s decision) on the day of the hearing: [2021] HKDC 656, [94]. There are therefore obvious case management reasons why the defendant was not allowed to rely on the new unpleaded defence. It is not apparent from this dictum that the Court of Appeal should be understood as laying down a general rule that would prohibit a defendant (who has already filed a defence) from relying on an unpleaded defence, even where (eg) such defence is raised fairly and squarely in the defendant’s affidavit in opposition.

In Gao Xin Jian Group (Hong Kong) Holding Co Ltd v Kin Lee Precast Concrete Products Co Ltd [2024] HKCFI 1058, [34], the court observed that the Court of Appeal in Kaefer AG ‘did not appear to lay down any general rule that in an O.14 application, a defendant cannot rely on a defence which has not been pleaded.  After all, RHC O.14 r.4(1) provides that a defendant may show cause against a summary judgment application by affidavit or otherwise to the satisfaction of the court.  This includes showing cause by the exhibition of a draft defence to the defendant’s affidavit: Chinakong Manufactory Ltd v Uniden Hong Kong Ltd [1993] 1 HKLR 28 at 31 line 1.’  However, it should be noted that this judgment did not address the Court of Appeal’s apparent affirmation of the said rule in Wang Shuai v Zhang Qiaohui, presumably because argument was heard before the judgment in Wang Shuai was handed down.”

15.With greatest respect to the learned authors, I do not agree with the view that there is no general rule that would prohibit a defendant (who has already filed a defence) from relying on an unpleaded defence (see 2^nd paragraph in the said Commentary).

16.Firstly, it should be noted that, according to Chu JA (as she then was), the learned District Judge in Kaefer AG:

“[…] refused to consider the new defence of bona fide purchaser for value without notice, which was raised shortly before the commencement of the hearing. The Judge was of the view that it was a new and distinct defence, notwithstanding the elements or ingredients which constitute the defence might have been mentioned ‘in passing’ or ‘accidentally’ in the pleadings or affirmations in the context of an entirely different plea. The Judge further held that there was no satisfactory explanation as to the lateness of the application, noting that at the hearing before the Master, the defendant’s counsel had confirmed that the defendant only relied on the change of position defence.”[6]
(emphasis added)

17.It can therefore be seen that the learned District Judge in Kaefer AGhad refused to allow the defendant’s reliance on the unpleaded defence for 2 separate reasons.

18.When Chu JA dismissed the defendant’s renewed application for leave to appeal, it was held that:

“28.  Ground 1.1 is a challenge against the Judge’s refusal to consider the bona fide purchaser for value without notice defence. It is said that the Judge should have considered this new defence despite it was not pleaded because (i) it was permissible for the defendant to show cause by affidavit or otherwise under Order 14 rule 4 of the RDC; and (ii) it was sufficient for the defendant to plead material facts without any need to state the legal result.

29.The Judge rejected this ground of appeal, referring to the discussions at §§94 to 110 of the Judge’s Decision and pointing out that: (i) the reference in the Defence (at §10(b)) to acting in good faith without notice was made only in the context of the change of position defence; (ii) the defendant’s counsel confirmed at the hearing before the Master that only the defence of change of position was relied on; and (iii) it is inapt to rely on Order 14 rule 4 of the RDC, which relates typically to a situation where the defence is yet to be filed, as is often the case in Order 14 applications.

30.We agree with the Judge that the bona fide purchaser defence is a separate and distinct defence from the defence of change of position. It was clearly not intended to be part of the defendant’s case when it took out the summons for security for costs. In fact, the defendant does not dispute that the bona fide purchaser defence is a new defence and that its counsel had confirmed to the Master that it only relied on the change of position defence. The defendant’s argument is that despite the defence was not pleaded, it is entitled to raise it based on the uncontradicted evidence and the pleaded facts. We do not agree.

31.Fundamentally, the two defences are not interchangeable. The nature and the tests required to establish the two defences are different. One cannot be passed off as another based on the similarity in the elements of the defence. The point was made clear by Lord Goff in Lipkin Gorman, supra, at 580H to 581A:

‘The defence of change of position is akin to the defence of bona fide purchase; but we cannot simply say that bona fide purchase is a species of change of position. This is because change of position will only avail a defendant to the extent that his position has been changed; whereas, where bona fide purchase is invoked, no inquiry is made (in most cases) into the adequacy of the consideration.’

The Judge was accordingly correct to hold that the defendant could not rely on the facts that were specifically pleaded as particulars for the change of position defence to support a distinct and separate bona fide purchaser defence.

32.The case of Lo Yuk Sui v Fubon Bank [2020] HKCFA 6 does not assist the defendant. Read in its proper context, the Court of Final Appeal is not suggesting that a party is at liberty to run any defence based on the pleaded facts; otherwise, the other side and the court would be taken by surprise, which would go against the purpose of the rules of pleadings as stated by the Court of Final Appeal.

33.Further, in the context of case management, given the circumstances in which this defence was raised, including that it was raised shortly before the start of the hearing before the Judge and the lack of satisfactory explanation for the lateness, it cannot be said that the Judge was plainly wrong in refusing to allow the defendant to run this defence: see Wong Kar Kee Mimi v. Severn Villa Ltd [2012] 1 HKLRD 887 at §31; RK v TS (unreported) HCMP 1969/2012 at [6]; and Hong Kong Civil Procedure 2022, Vol 1, §§59/0/54 and 59/2A/4.

34.In any event, we do not accept that this defence, even if allowed to be raised, is a credible defence which merits a trial in view of the Judge’s finding that the defence ‘is unconvincing and lacks a ring of truth to it’.”

(emphasis added)

19.It can therefore be seen that the Court of Appeal considered that the learned District Judge was right in refusing the defendant to rely on the new defence both because:

(1)  the new defence was unpleaded; and

(2)  the new defence was raised too late without satisfactory explanation. 

20.Hence, I do not agree that this Court of Appeal’s Judgment may be explained by reason of the fact that the defence was raised at last minute without satisfactory explanation.  “A defendant cannot rely on an unpleaded defence in the pleading when opposing an Order 14 application” must be one of the ratio of the said Judgment.

21.Secondly, no matter what, the position has been made clear in another Judgment of the Court of Appeal in Wang Shuai v Zhang Qiaohui [2024] HKCA 304 (at [46]), in which Anthony Chan J expressed his agreement to DHCJ Sara Tong SC’s view that “it is trite that where a defendant has already filed a Defence, it cannot, in opposition to a summary judgment application, rely on a case not pleaded in the Defence”.

22.Thirdly, as recognised in the last paragraph of the said Commentary 14/4/3A, it appears that the learned Judge in Gao Xin Jian Group (Hong Kong) Holding Co Ltd v Kin Lee Precast Concrete Products Co Ltd [2024] HKCFI 1058 was not addressed by the parties on the Court of Appeal’s Judgment in Wang Shuai v Zhang Qiaohui [2024] HKCA 304 which was handed down only 5 days prior to the Gao Xin Jian Group case. 

23.Fourthly, insofar as it is contended that the defendant may rely on an unpleaded defence pursuant to Order 14 rule 4(1) of the Rules of the High Court (“RHC”)[7] so long as it is covered by an affidavit, this suggestion cannot be accepted.  Emphasis should be laid on the requirement of the said rule that the defendant’s showing of cause must be “to the satisfaction of the Court”.  In the case where the defendant has not yet filed any Defence, it is of course understandable that the defendant may show cause by virtue of an affidavit without filing any pleading.  However, once a Defence has been filed, the issues would have been defined by such a pleading.  In my view, the trite principles set out in Kwok Chin Wing v 21 Holdings Ltd (2013) 16 HKCFAR 663 by Chief Justice Ma at [21] must be equally applicable to an Order 14 application:

“It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings.  The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited[8]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial.  Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round.  In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced […]”

24.Indeed, there are often cases in which the plaintiffs decide to make applications for summary judgment after they have had sight of the defendants’ Defence.  If the defendants are allowed to rely on any unpleaded defence freely so long as such new defence is included in their affidavit evidence, that would defeat the purpose of pleadings.  That cannot be right. As Chief Justice Ma pointed out in Kwok Chin Wing, it is the pleadings that will dictate the course of proceedings both before and at trial.

25.Hence, the defendant’s reliance of an unpleaded defence cannot be “to the satisfaction of the Court” as required under Order 14 rule 4(1) of the RHC.

26.In fact, it should be noted that the same argument had been made in Kaefer AG before the Court of Appeal but it was rejected (see [28] – [30] of Kaefer AG as quoted in [18] above).

C2.  Appeal from Master’s decision

27.In relation to an appeal brought against Master’s decision, it is well established that such an appeal is dealt with by way of an actual rehearing of the application which led to the order under appeal, and the judge treats the matter as though it came before him for the first time.  The judge will give the weight it deserves to the previous decision of the Master, but he is in no way bound by it.  The judge in chambers is in no way fettered by the previous exercise of the Master’s decision. (Hong Kong Civil Procedure 2025, Volume 1, paragraph 58/1/2).

D.   DISCUSSION

D1.    The External Walls Breach

28.To recap, the plaintiff alleges that the defendant had altered the Areas without the consent of the plaintiff.

29.The defendant’s defence in this regard is plainly unarguable.

30.First, insofar as it is said that since the Areas are not part of the structural members/columns of the shopping centre as alleged by the plaintiff, and therefore the defendant could not have breached the Tenancy Agreement, this is an argument which is made to be rejected, for the defendant has covenanted under the Tenancy Agreement:

Clause 4.16

“Not to exhibit or display on or affix to the exterior of the Premises any writing, poster, signboard, sign, notice or advertising matter of any kind or other device whether illuminated or not except with the prior written approval of the [plaintiff] and then only in such place and in such manner as shall be approved by the [plaintiff].”

Clause 4.17.1

“Not to make any alterations or additions which […] (iii) affect the external appearance of the Premises […]”

31.Second, the defendant submitted that the plan attached to the Tenancy Agreement does not show that the Areas are outside the ambit of the Premises. 

32.In my view, whether the Areas are part of the Premises rented to the defendant is neither here nor there, because, as aforesaid, pursuant to the aforesaid clauses, the defendant is not permitted to display or affix any sign or advertising matter of any kind or to make any alterations which affect the external appearance of the Premises without the plaintiff’s approval anyway.  The operation of the said clauses is not affected by whether the Areas are part of the Premises.

33.Furthermore, the defendant’s argument that the Areas are part of the Premises which the defendant had rented from the plaintiff is contradicted by its own pleaded case that the defendant anticipated that the use of the Areas would be further granted by the plaintiff by virtue of a separate licencing agreement which would be executed after the execution of the Tenancy Agreement.

34.Third, the defendant’s allegation on the plaintiff’s Licence Representations is bound to be rejected.

35.In gist, it is the defendant’s pleaded case that, on 6 December 2023, Vivian Lo (Senior Manager of the plaintiff) represented to Helen Ho of the defendant that the Areas would be licenced to the defendant for advertising and/or marketing purposes, and that the plaintiff would prepare a separate licencing agreement in respect of the Areas.  Between 6 December 2023 and 18 January 2024, Vivian Lo had informed Helen Ho at least twice that she was preparing the licencing agreement in respect of the Areas (i.e. the plaintiff’s Licence Representations).  This amounts to approval or consent of the plaintiff for the renovation or fitting works to be done to the Areas by the defendant.

36.As pointed out by Mr Li for the plaintiff, the Tenancy Agreement comprises an “entire agreement” clause at Clause 6.21 which states that:

“This Agreement (including all its Schedules and Annexures) sets out the full agreement between the parties and supersedes all prior engagements, arrangements, agreements and contracts oral or in writing whatsoever between the parties.  No other warranties or representations have been made or given by the [plaintiff] to the [defendant] and if any warranty or representation has been made the same are hereby waived.”

37.In Glory Gold Limited v Star Play Development Limited [2008] 2 HKLRD 416, Cheung JA explained at [16] that:

“The clause constitutes a binding agreement between the parties that the full contractual terms are to be found in the document containing the clauses and not elsewhere and that any promises or assurances made in the course of negotiation (which in the absence of such a clause may have effect as a collateral warranty) shall have no contractual force, save, insofar as they are reflected and given effect in that document.  The clause is not merely to render evidence of the collateral warranty inadmissible in evidence but to deny what would, otherwise, constitute a collateral warranty of legal effect […]”

38.While the “entire agreement” clause in Glory Gold Limited is not identical to Clause 6.21 of the Tenancy Agreement, I am of the view that they have the same effect.

39.There is therefore no room for the defendant to rely on the plaintiff’s Licence Representations.

40.In Mr Lau’s submissions, he emphasised that part of the representation of the plaintiff was made after the execution of the Tenancy Agreement.  Presumably, that is done for the purpose of countering the effect of the “entire agreement” clause.  However, his effort is futile:

(1)  According to the defendant’s pleaded case, Vivian Lo’s representation that the Areas would be licenced to the defendant was made on 6 December 2023 (i.e. before the date of the Tenancy Agreement) but at no other time.  Once that representation is rendered useless for the defendant’s purpose by virtue of the “entire agreement” clause, the defendant’s case on the plaintiff’s Licence Representations collapses.

(2)  The defendant alleged that, on 18 January 2024, Vivian Lo of the plaintiff informed Helen Ho by WhatsApp that she was preparing the licencing agreement in respect of the Areas.  However:

(a)  It can be seen from the WhatsApp messages produced by Helen Ho herself that they in fact do not support her allegation that Vivian Lo did say that the licencing agreement which was being prepared was in respect of the Areas.  The relevant messages read:

Helen Ho: 廣告位合約幾時會有啊

Vivian Lo: 文件下個禮拜就會有㗎啦

In fact, it is undisputed that the defendant did execute a few licencing agreements prepared by the plaintiff for advertisement spaces but none of those agreements related to the external walls of the Premises (see further below).

(b)  The defendant’s case that the plaintiff had breached its promise in providing licencing agreements is apparently not supported by the WhatsApp messages produced by Helen Ho:

(i)    Consistent with her promise made on 18 January 2024 that the “document(s)” would be ready in the following week, Vivian Lo informed Helen Ho on the following Tuesday (23 January 2024) that the “document(s)” was/were ready for collection.

(ii)   It can be seen that, since then, Helen Ho did not chase Vivian Lo further for licencing agreement(s).

(iii)  What Helen Ho did chase Vivian Lo on 11 March 2024 for was the original copy of the licencing agreement(s) in relation to 3 advertisement locations.  This shows that by then, the defendant had signed the licencing agreement(s) which it had chased the plaintiff for.

41.Fourth, the defendant alleged that there is an implied term to the Tenancy Agreement that the plaintiff would licence the Areas to the defendant for advertising / marketing purpose.

42.The law on implied term is well established.  In Kensland Realty Ltd v Whale View Investment Ltd & Another (2001) 4 HKCFAR 381, the Court of Final Appeal adopted the requirements identified by Lord Simon in BP Refinery v Shire of Hastings (1978) 52 ALJR 20 as follows:

“ ... for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that “it goes without saying”; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.”

(emphasis added)

43.The defendant’s argument is bound to fail because the alleged implied term is plainly contradicted by Clause 4.16 of the Tenancy Agreement which provides that the defendant covenants with the plaintiff:

“Not to exhibit or display on or affix to the exterior of the Premises any writing, poster, signboard, sign, notice or advertising matter of any kind or other device whether illuminated or not except with the prior written approval of the [plaintiff] and then only in such place and in such manner as shall be approved by the [plaintiff].”

44.Fifth, the defendant pleaded that there is a conventional practice in that:

“Helen Ho has, through other companies within the THAC Group, entered into 6 other tenancy agreements with the Plaintiff (which are currently ongoing) to conduct different restaurant operations.  On those occasions, the Plaintiff would provide separate licencing agreements after the tenancies were signed, which governed the leasing of marketing and advertising space outside the restaurants, which were similar to the Areas.”[9] (emphasis added)

45.Mr Lau argued that:

“25a(iv)  As mentioned, D is part of the THAC Group. The THAC Group Restaurants had rented other shops with P. In those instances, P would, akin to the present, confirm verbally that the external walls will be part of the premise to be leased where those restaurants’ logos would be fitted (i.e. the 1^st Representation) and with licensing agreements only signed and executed subsequent to the completion of renovation works thereat. […]

25a(v) On 21.02.2024 (2 months after the Tenancy Agreement was signed), Jess and Mable stated in the WhatsApp conversation between them and representatives of D, including Helen that they shall confirm the location of the advertising space […]”

(emphasis added)

46.Reference was made by the defendant’s counsel to the affirmation of Helen Ho who stated at paragraph 31 of her Affirmation that:

“[…] I would also point out that Jess and Mable [of the plaintiff] also mentioned on 21 February 2024 (i.e. 2 months after we had signed the Tenancy Agreement) that they needed to confirm the location of the advertising space.  This corroborates with the Conventional Practice […]”

47.With greatest respect, the above arguments are self-contradictory.  If there was any conventional practice as alleged that “the external walls will be part of the premise to be leased where those restaurants’ logos would be fitted”, it does not make sense for the defendant to rely on the alleged statement of the plaintiff’s staff that “they shall confirm the location of the advertising space”.

48.Moreover, according to the defendant’s pleaded case (see [44] above), taking the defendant’s case to the highest, the conventional practice would only entitle the defendant to make use of certain advertising spaces outside the restaurants pursuant to separate licencing agreements, but not necessarily the external walls of the Premises. The undisputed evidence is that the plaintiff had indeed entered into such licencing agreements with the defendant, just that the advertising spaces concerned were not the external walls of the Premises.

49.Sixth, Mr Lau laid emphasis on the plaintiff’s evidence in that the plaintiff would arrange for advertising spaces for the defendant’s use and that the plaintiff had treated as if licenses had been granted even though the plaintiff did not execute the various licencing agreements in relation to 4 advertising spaces. It was said that this shows that the plaintiff habitually considered an agreement/agreement(s) as being concluded despite the fact that the plaintiff “did not go through the motion or formality”.  He further argued that this corroborates the mutual understanding and/or commercial expectations at the material time as averred by Helen Ho.

50.This argument is not understood, because the evidence is not that there was no agreement.  What is undisputed is that the defendant did sign a number of licencing agreements drafted by the plaintiff.  What the plaintiff was only saying was that even though it did not countersign the same, it treated as if those licencing agreements were binding.  This is quite different from counsel’s argument that there was a convention that the defendant would be allowed to use the external walls of the let premises for advertisement purpose, which is not even the defendant’s pleaded case.

51.Seventh, the defendant argued that even if the External Walls Breach could be established, such breach had been waived by the plaintiff.

52.Although the defendant’s counsel refused to accept it, waiver in relation to the External Walls Breach is apparently not pleaded in the Amended Defence.  The defendant is therefore not entitled to rely on this defence.

53.In any event, it has been expressly provided by Clause 6.9 that there is no waiver of the plaintiff’s rights in respect of breach of the Tenancy Agreement on the part of the defendant:

“6.9.1  No condonation, excusing or overlooking by the [plaintiff] in respect of any default, breach or non-observance or non-performance by the [defendant] at any time or times of the agreements, stipulations, terms, covenants and conditions contained in this Agreement shall operate or be regarded by the [defendant] as a waiver of the [plaintiff]’s rights under this Agreement in respect of any continuing or subsequent default, breach or non-observance or non-performance or so as to defeat or affect in any way the rights and remedies of the [plaintiff] under this Agreement in respect of any such continuing or subsequent default or breach. No waiver by the [plaintiff] shall be inferred from or implied by anything done or omitted by the [plaintiff], unless expressed in writing and signed by the [plaintiff];

6.9.2  Any consent given by the [plaintiff] shall operate as a consent only for the particular matter to which it relates and shall in no way be considered as a waiver or release of any of the provisions hereof nor shall it be construed as dispensing with the necessity of obtaining the specific written consent of the [plaintiff] in the future, unless expressly so provided.”

D2.  The Cuisine Breach

54.It is admitted by the defendant that its trade proposal annexed to the Tenancy Agreement stipulates that the Premises shall be used for no purpose other than for “operating a specialty restaurant in shanghainese style”.

55.It is the plaintiff’s case that the defendant did not operate a “specialty restaurant in shanghainese style” at all, hence the breach.

56.On the other hand, it is the pleaded case of the defendant that:

(1)  The Tenancy Agreement does not provide that the Premises shall be used as a restaurant offering cuisine in Shanghainese style;

(2)  Furthermore:

“21.1 The Defendant made available a hard copy Shanghainese menu in its restaurant at the Premises on or around 5 July 2024.

21.2  Also on or around 5 July 2024, the Shanghainese menu options were uploaded onto the Defendant’s Point of Sale (POS) system, which is a system used by the Defendant to process payments and complete customer purchases. Customers could therefore order food items from the Shanghainese menu at the Defendant’s restaurant at the Premises.”

(emphasis added)

57.From the Amended Defence, it can be seen that it is not the defendant’s pleaded case that it had offered Shanghainese cuisine before 5 July 2024.

58.However, in her affirmation, Helen Ho had expanded the defendant’s defence:

“49.  When the Defendant was renovating the Premises, the food displaced on the hoarding stickers, include pan-fried water dumpling and sour and hot and sour soup (酸辣湯), which are well-known Shanghainese cuisine.

[…]

51.Further, the Defendant had offered Shanghainese cuisine on its menu which can also be ordered through its online system. […] This menu was made available by the Defendant since around June 2024.”

(emphasis added)

59.As explained in [13] above, if Defence has already been filed, the defendant is bound by its pleading, and is not permitted to oppose a summary judgment application on the basis of a defence which is not pleaded.

60.I will therefore disregard Helen Ho’s evidence in her affirmation insofar as such evidence has covered an unpleaded defence.

61.Coming back to the defendant’s defence:

(1)  I do not agree that there is any room for argument as to the meaning of “specialty restaurant in shanghainese style”.  Although the word “cuisine” is not expressly used, there cannot be any doubt as to what this phrase means. 

(2)  In the Amended Defence, the defendant pleaded that it would reserve its rights to adduce expert evidence to explain the nature and meaning of the said phrase.  With respect, it is difficult to understand why an expert is required to interpret such an ordinary and simple phrase.

(3)  In the present case, having referred to the defendant’s menu annexed to the Statement of Claim as “Annex-3” (and exhibited to the plaintiff’s supporting affirmation), there is no doubt that the defendant was in fact operating a typical local tea café (茶餐廳).  It should be noted that, in Helen Ho’s affirmations, she did not address the said menu produced by the plaintiff at all.  She only emphasized that the defendant has made available a Shanghainese menu in around June 2024[10], and that the Shanghainese menu options had been uploaded onto the defendant’s “Point of Sale system” (which is a system used to process payments and complete customer purchases) on around 5 July 2024.  This, in my view, is a confirmation that no such menu had been provided by the defendant to its customers beforehand.

(4)  Even if the defence case is accepted in that Shanghainese cuisine has indeed been offered at the Premises since 5 July 2024, that is already too late because this action has already been commenced on 2 July 2024.

(5)  The defendant’s counsel relied on Helen Ho’s instructions to her team in early April 2024 for the preparation of a Shanghainese menu, and argued that even if there had been any breach of the cuisine requirement, such a breach had been purged “well before the commencement of this Action [on 2 July 2025] but also, arguably before the letters issued by [the plaintiff’s solicitors dated 23 April 2024, 7 June 2024 and 24 June 2024]”[11].  With respect, this is a bold submission, for there is clearly a difference between “giving instruction to take remedial action” and the “actual taking of the remedial action”.

D3.  Other reasons for trial

62.The defendant argued that there are other reasons which render it inappropriate for the Court to deprive the defendant a chance to have the disputes between the parties resolved at a trial, namely:

(1)  The overall circumstances as set out hereinabove.

(2)  The parties’ differences pertaining to whether the Areas are part of the Premises.

(3)  The bureaucracy within the plaintiff which had caused confusions.  The defendant has sometimes received inconsistent comments from different units of the plaintiffs concerning the drawings, plans, etc. submitted and whether those documents had been approved.  An example is the supply of chilled water, which shows that the plaintiff had given implied consent or approval to the defendant to commence the fitting out work at the Premises.

(4)  Apart from Helen Ho’s involvement, there were other staff members who were responsible to liaise with the plaintiff and they had used various means of communications, such as WhatsApp, emails and letters, to contact the plaintiff.  Some of those other staff had left their position and are no longer under the defendant’s employment.  The defendant was in the course of gathering further evidence.  Further, the defendant’s past employees had communicated verbally with the plaintiff.  As a result, the matters in this Action require further investigation.

63.These submissions are rejected.

64.I have already dealt with the first 2 points in the earlier part of this Reason and I do not think it is necessary to repeat the same.

65.For the complaint about bureaucracy within the plaintiff which allegedly had caused miscommunications with the defendant, I do not think that, even if true, would have any bearing on the merits of the present case. In any event, this complaint relates to some other breaches allegedly committed by the defendant which the plaintiff no longer relies on for the purpose of this appeal.  The complaint has therefore become irrelevant.

66.In relation to the defendant’s need for further time for the purpose of gathering evidence, it should be noted that:

(1)  Helen Ho first raised such a need in her Affirmation filed on 14 January 2025, in which she stated that another 28 days would be required.

(2)  At the call-over hearing of the Order 14 summons held on 20 January 2025, Master Phoebe Man had as a result of the defendant’s request granted leave to the defendant to file further affirmation in opposition within 28 days (i.e. by 17 February 2025) – that means the Court had given the defendant the full amount of time as requested.

(3)  The said deadline had subsequently been extended by Master Phoebe Man to 10 March 2025.

(4)  Helen Ho then filed her 2^nd Affirmation on 10 March 2025, in which she no longer stated that she needed further time to locate the defendant’s ex-employees.  On the other hand, she affirmed that:

“I have made attempts to contact other past employees to retrieve other communication records between them and the Plaintiff.  However, I understand from them that most of their communications with the Plaintiff were conducted verbally.  They were therefore not able to provide further records on paper as to their communications with the Plaintiff.”

(5)  It can be seen from the above that Helen Ho had been able to locate all those ex-staff members of the defendants for the purpose of gathering evidence.  She did not say that there were other relevant witnesses whom she was unable to locate because of limitation of time.

(6)  Insofar as it is said that because the communications between those ex-employees and the plaintiff were not in writing and therefore the matters have to be further investigated at the trial, I am afraid the defendant has simply failed to particularise what those communications are about.  The Court would not accede to this kind of a request upon such a vague assertion.

67.Hence, this line of submissions should also be rejected.

D5.  Conclusion of the Order 14 appeal

68.The plaintiff relies on 2 different breaches on the part of the defendant for the purpose of the present appeal.

69.In order to set aside the learned Master’s Decision, the defendant has to establish triable issues in respect of both breaches.

70.However, as analysed above, I am of the view that the defendant has failed to establish any triable issue at all.  Neither is the defendant able to show that there are other reasons that there should be a trial of this action.

71.The defendant’s appeal against the Decision should therefore be dismissed.

D5.    The Stay Summons

72.By reason of the aforesaid, the Stay Summons should also be dismissed.

E.   ORDERS

73.It was ordered that:

(1)  The defendant’s appeal against Master K.W. Wong’s Decision dated 8 May 2025 be dismissed.

(2)  The Stay Summons be dismissed.

F.   COSTS

74.Costs should follow the event.  The defendant was therefore ordered to bear the plaintiff’s costs of the appeal and of the Stay Summons, which, as agreed, should be assessed on indemnity basis[12].

75.Having considered the plaintiff’s statement of costs and the defendant’s objections, such costs were summarily assessed in lieu of taxation at $175,550.  The costs assessed shall be paid by the defendant by 13 August 2025.