Benny Lee Wai Kheong and Another v. Lam Ken Chung Simon and Another

DCCJ 342/2021

[2026] HKDC 1855

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 342 OF 2021

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BETWEEN

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DECISION

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INTRODUCTION

1.This is the Defendants’ application by summons dated 15 April 2026 (with a draft notice of appeal annexed to it (“the Draft Notice of Appeal”)), for leave to appeal against my judgment dated 19 March 2026 (“the Judgment”). I will continue to use the defined terms and expressions in the Judgment.

2.By the Judgment, this Court allowed the Plaintiffs’ claim in the sum of HK$742,224.84 with interest and dismissed the Defendants’ counterclaim. The present application was directed to be dealt with on the papers and the parties have respectively filed their written submissions.

3.The action arose out of a three-year tenancy of the Property. The Defendants’ principal contentions at trial were that they had been induced to enter into the Tenancy by misrepresentations concerning the timing and method of the anticipated building renovation of Block 8 of Cavendish Heights, that the Tenancy Agreement should be rectified to include a tenant-only termination clause, ie the Early Termination Clause, and that the Plaintiffs were in repudiatory breach of the covenant for quiet enjoyment by reason of the renovation works carried out by the IO (“the IO”).

4.In the Judgment, I rejected those contentions. In gist, I found that the alleged Misrepresentations had not been proved, that there was no basis for rectification, and that the renovation works, having been carried out by the IO, were not attributable to the Plaintiffs as landlords for the purposes of the covenant for quiet enjoyment. The Defendants’ non-payment of rent and premature vacation of the Property consequently constituted repudiatory breach.

APPLICABLE PRINCIPLES

5.Under s 63A(2) of the District Court Ordinance (Cap 336), leave to appeal shall not be granted unless the judge or the Court of Appeal is satisfied that:

5.1 The appeal has a reasonable prospect of success; or

5.2 There is some other reason in the interests of justice why the appeal should be heard.

6.A “reasonable prospect of success” involves the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125 at §17, per Le Pichon JA. It is not enough that the appeal is merely arguable: Hong Kong Civil Procedure 2026 §59/2A/4 and Wynn Resorts (Macau) SA v Mong Henry [2009] 5 HKC 515 at §19.

7.Circumstances in which the Court of Appeal would find that there is “some other reason in the interests of justice that the appeal should be heard” are not exhaustive. Leave may be granted if the question is one of general principle which required determination for the first time or a question of importance upon which further argument and a decision of the Court of Appeal would be to the public advantage: Chiang Sham Lam Anthony v Accounting and Financial Reporting Council [2026] HKCA 391 at §27.

8.Where an intended appeal challenges findings of fact, the Court of Appeal will not interfere unless the findings are shown to be plainly wrong. This is particularly so where the findings depend upon the trial judge’s assessment of oral evidence, credibility, demeanour and inherent probabilities. The Court of Appeal does not re-try the case and it is insufficient that the judges might have reached a different conclusion or that the appellant merely asserts that the finding was against the weight of the evidence. An appellant challenging findings of fact must identify a material error in this Court’s evaluation of the evidence sufficient to undermine the conclusion, such as a finding for which there was no evidential basis, a finding based on a misunderstanding of the evidence, or a finding which no reasonable judge could have reached. The restraint reflects both the advantage enjoyed by the trial judge, who has seen and heard the witnesses, and the policy that parties should put forward their best case on the facts at trial, rather than regard an appeal as a second opportunity to reargue factual matters: Watt (or Thomas) v Thomas [1947] AC 484 at 487-488; Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §42; China Gold Finance Ltd v CIL Holdings Ltd (CACV 11/2015, 27 November 2015), at §§11-23; Ageas Insurance Co Ltd v Lam Hau Wah Inneo, (CACV 65/2014, 9 January 2015), at §§28-30; YYT v CCM [2026] HKCA 727 at §31; Practice Direction 4.1 at §21.

THE PROPOSED GROUNDS OF APPEAL

9.The Defendants have advanced 5 grounds of appeal in the Draft Notice of Appeal. Grounds 1 to 4 challenge factual findings, including findings based on the assessment of witnesses against the contemporaneous documents and inherent probabilities. Ground 5 is put as a question of law concerning the effect of the BMO and the attribution of acts of an IO to an individual owner-landlord.

Ground 1

10.Ground 1 is directed at my assessment of the 1^st Plaintiff’s credibility, in particular in the light of the finding at §81.4 of the Judgment that the Plaintiffs had not proved the alleged Phone Call in which the 2^nd Defendant was said positively to have agreed to the removal of the Early Termination Clause.

11.The Defendants submit, in substance, that the absence of a record in the Telephone Bills demonstrated that the 1^st Plaintiff had lied under oath about the Phone Call. They submit that this necessarily undermined my finding at §51 of the Judgment that the 1^st Plaintiff was, on the whole, a credible and reliable witness. They further submit that the Judgment did not provide a sufficient analysis comparable to that undertaken in Hu Lan v David Golden [2023] HKCFI 873 at §§36(5), 41-44.

12.This submission mischaracterises the Judgment. At §81, having considered the evidence as a whole, I found that it was not satisfied, on the balance of probabilities, that the Plaintiffs had proved that alleged Phone Call occurred. At §81.4, I concluded that the Plaintiffs had not discharged the burden of proving that there was a Phone Call in which the parties positively agreed to remove the Early Termination Clause altogether.

13.§§81.1 to 81.3 explain why I reached that conclusion. The Telephone Bills contained no record of the alleged call; the contemporaneous WhatsApp messages immediately before and after the alleged three-minute interval did not support its occurrence; and the manner in which the 1^st Plaintiff had formulated his case in his witness statement placed emphasis upon the Defendants’ subsequent absence of objection rather than a positive agreement communicated during the alleged Phone Call. The observation at §81.3 that, if there had in truth been such a call and positive agreement, one would have expected the 1^st Plaintiff to rely squarely upon it, was an consideration relevant to the assessment of his account.

14.The finding that the Plaintiffs had not proved the alleged Phone Call on the balance of probabilities did not amount to a finding that the 1^st Plaintiff had lied under oath. A finding that an asserted fact is not proved, or that a witness’s evidence on that matter is not sufficiently reliable or persuasive to establish it, is distinct from a finding that the witness knowingly gave false evidence. The Judgment contains no finding that the 1^st Plaintiff deliberately gave false evidence concerning the alleged Phone Call.

15.The distinction is material. A witness may be mistaken, may have an inaccurate recollection, or may give evidence which the Court is unable to accept without being found dishonest. §§47 to 53 of the Judgment set out my assessment of the witnesses by reference principally to the contemporaneous WhatsApp records, the consistency of the evidence with those records, the internal coherence of the respective accounts, and the inherent probabilities. At §51, I expressly recognised that the alleged Phone Call was not proved, while explaining why that conclusion did not require rejection of the entirety of the 1^st Plaintiff’s evidence.

16.The Defendants have identified no legal error in that approach, no material fact overlooked by me, and no conclusion which could not reasonably be reached. They instead seek to transform my rejection of the 1^st Plaintiff’s evidence concerning the alleged Phone Call into a finding that he deliberately lied under oath, and then to deploy that supposed finding to reopen the broader credibility assessment. That is not what I decided in the Judgment.

17.The issue whether the Phone Call occurred was, in any event, not decisive of the rectification issue. As explained at §§82 to 92 of the Judgment, the decisive questions were whether a continuing common intention to include the proposed term was established, or whether the Defendants proved unilateral mistake of which the Plaintiffs had the requisite knowledge. Those questions were resolved by reference to the sequence of drafts, the Defendants’ own comments on the revised drafts, their execution of the final agreement, and their subsequent conduct.

18.Ground 1 has no reasonable prospect of success.

Ground 2

19.Ground 2 challenges the findings rejecting rectification of the Tenancy to include the Early Termination Clause. The Defendants submit that the conclusion that they knew of, but remained silent about, the removal of the clause was unsatisfactory. They contend that certain matters were either undisputed or insufficiently considered: the errors which the 1^st Defendant identified in the drafts; the Defendants’ trip to Taiwan; the alleged urgency generated by the availability of other prospective tenants; and their evidence that they signed without checking the final printed agreement

20.This ground does not identify an arguable appellate error. The premise of the argument is that the Plaintiffs unilaterally and non-consensually removed the Early Termination Clause. That was not an established fact. It was a central matter in dispute. The conclusion reached in the Judgment was not that the Plaintiffs had proved a telephone agreement to remove the clause; as already noted, I found that the alleged Phone Call was not proved. The conclusion was instead that the Defendants failed to prove the ingredients necessary for rectification, whether on the footing of common mistake or unilateral mistake.

21.§§83 to 92 of the Judgment give detailed reasons. The original Clause 5a was a prominent provision on a separate page, under a capitalised heading, and dealt with the important subject of early termination. The 1^st Defendant had specifically proposed a change to it. The evidence also showed that he reviewed revised drafts, identified an error in his identity-card number on the signature page, and made comments on other terms. The Defendants did not comment on the absence of Clause 5a in the subsequent drafts and proceeded to execute a written tenancy which contained no Early Termination Clause.

22.I was entitled to regard it as inherently implausible that the 1^st Defendant, having paid close attention to Clause 5a and other details in the drafts, did not notice the disappearance of an entire, conspicuous clause dealing with a right which the Defendants now describe as essential. My finding was reinforced by their subsequent conduct. When the dispute concerning the renovation arose, they and their solicitors scrutinised and invoked Clauses 3d and 4g of the Tenancy, but did not invoke, or complain of the omission of, any tenant-only right to terminate.

23.The Defendants submit that I failed to take into account certain matters which they describe as undisputed, namely that they were in Taiwan and say that they reviewed the revised drafts through mobile devices, that the 1^st Plaintiff indicated there were other prospective tenants, and that, on the morning of 20 May 2019, they signed the printed copies of the Tenancy Agreement in the lobby of Block 8 without checking its contents. Their submission is, in substance, that those circumstances made it more likely that they did not read the revised drafts or the final agreement carefully and therefore did not notice that Clause 5a had been removed.

24.There are no merits to this complaint. The fact that the Defendants were in Taiwan at the relevant time formed part of the factual context addressed at §14 of the Judgment in considering the alleged Phone Call and the relevance of the Telephone Bills. The fact was also expressly raised by both parties in their closing submissions, namely at §347 of the Plaintiffs’ Closing Submissions and §163 of the Defendants’ Closing Submissions. I was therefore aware of the point when assessing the evidence. The Judgment also addressed, at §§83 to 85, the Defendants’ review of the drafts on an iPad, their identification of the error in the 1^st Defendant’s identity-card number, and their comments upon other amendments. The Judgment further referred, at §87, to the existence of other prospective tenants and the 1^st Plaintiff’s preference for a three-year fixed tenancy. There is accordingly no basis for suggesting that I overlooked those matters when assessing the evidence concerning the proposed Early Termination Clause. The Judgment must be read as a whole, rather than as if a matter was disregarded merely because it was not separately repeated in the particular part of the reasons dealing with rectification.

25.In any event, the proposition that the Defendants signed the final agreement without checking its contents was not an undisputed fact. The 1^st Defendant accepted in cross-examination that he might have flipped through the Tenancy Agreement before signing, although not page by page. The Plaintiffs challenged his evidence that he did not check the agreement before signing. Likewise, the assertion that the 1^st Plaintiff “hard pressed” the Defendants to sign on an urgent basis was disputed and was not borne out by the contemporaneous WhatsApp messages.

26.It is not necessary for this Court to refer expressly to every factual matter or submission advanced by the parties. The reasons must be read fairly and as a whole. The question is whether the Judgment sufficiently explains the essential basis upon which this Court reached its conclusion. A judge is entitled to deal with the real issues without rehearsing every item of evidence or every argument advanced by counsel: LWH v NKWS [2018] HKCA 260 at §9 and Chau Tat Wing v Wong Kwai Wan [2025] HKDC 2087 at §39 (citing Eagil Trust Co Ltd v Pigott-Brown [1985] 3 All ER 119 at 122c-e). In the present case, the Judgment identified the material evidential matters bearing on the Defendants’ alleged lack of awareness of the removal of Clause 5a and gave reasons for rejecting their case. The matters now relied upon by the Defendants do not show that I overlooked a material matter, misunderstood the evidence, or reached a conclusion which no reasonable judge could have reached. The fact that it did not separately discuss every circumstance said to bear on the Defendants’ state of mind does not establish an error of law or fact.

27.Nor is there any inconsistency between this Court observing that the 1^st Defendant identified errors in the documents and not accepting the Defendants’ case that they failed to notice the absence of Clause 5a. The former was a circumstance which supported, rather than undermined, the conclusion that the 1^st Defendant scrutinised the drafts. The Defendants’ case that the clause was accidentally omitted and unnoticed was considered and rejected for reasons which were fully open to this Court on the evidence.

28.Ground 2 is no more than an attempt to reargue the factual case advanced at trial, and identifies no material error or plainly wrong finding. It has no reasonable prospect of success.

Ground 3

29.Ground 3 concerns the absence of an express allegation of misrepresentation in the Defendants’ solicitors’ letter dated 17 July 2020. The Defendants contend that I failed to consider, or gave insufficient consideration to, the later letter dated 30 July 2020 (“30 July 2020 Letter”) and the explanation that the 1^st Defendant did not initially raise misrepresentation because he did not wish to be overly confrontational and mistakenly thought that Clause 4g prevented reliance upon it.

30.The premise is incorrect. The Judgment expressly referred to the 30 July 2020 Letter at §42, including the fact that the Defendants first alleged misrepresentation in that letter and referred to Clause 4g. There can therefore be no suggestion that I was unaware of, or failed to consider, that letter.

31.Further, the Judgment addressed the explanation based on Clause 4g at §68.2. I accepted that the 1^st Defendant said that, without undertaking legal research, he believed Clause 4g precluded reliance on misrepresentation, but found that explanation unconvincing in the circumstances. If he regarded the alleged assurances as fundamental to the bargain, the existence of an entire-agreement clause was a powerful reason to insist that those assurances be recorded in the written agreement at the time of contracting. He accepted that he did not do so.

32.The suggestion that the Defendants had wished initially to avoid being confrontational was also recorded in the Judgment, including in the summary of their case at §62. The Judgment did not need to repeat the proposition when addressing each individual reason why the absence of a prompt allegation was probative. It was plainly considered and rejected in the overall assessment of the evidence.

33.Those matters were considered as part of a cumulative assessment, not in isolation. The Judgment also considered the contemporaneous WhatsApp exchanges, including the Defendants’ references to their “expectations”, their recognition that the renovation was something expected when the Tenancy was entered into, the absence of any assertion that the 1^st Plaintiff had promised that renovation would not occur soon or that the Platform Method would be used, and the late introduction in cross-examination of an alleged specific Cantonese phrase not previously pleaded or mentioned in the witness statements.

34.In other words, the conclusion rested upon my evaluation of the documentary record and the evidence as a whole. The Defendants’ explanations were considered but were not accepted for reasons given in the Judgment.

35.Ground 3 identifies neither a material matter overlooked nor an inadequacy of reasons. It has no reasonable prospect of success.

Ground 4

36.Ground 4 challenges the finding at §52 of the Judgment that the Defendants were seeking an excuse to extricate themselves from a bad bargain which they had consciously entered into when the disturbance from the anticipated renovation proved more serious than they expected. The Defendants submit that this was pure surmise and contradicted by uncontroverted evidence.

37.In my view, Ground 4 likewise has no reasonable prospect of success. The said finding at §52 of the Judgment was expressly made “On the evidence available as a whole” and stated that the reasons for the assessment would be apparent from the subsequent sections of the Judgment. It was not a free-standing conclusion, nor was it based on speculation or surmise. It was a conclusion reached after my’s assessment of the totality of the evidence.

38.In particular, I found that the Defendants consciously entered into a three-year fixed tenancy knowing that Block 8 Building Renovation might occur during the tenancy. The expression ‘bad bargain’ in §52 was not a finding that the contractual rent was above market rent at the date of the Tenancy, or that the Defendants had entered into an objectively disadvantageous tenancy from the outset. It described the position in which they found themselves after the anticipated renovation proceeded in a manner which they regarded as more burdensome than they had expected.

39.The contemporaneous WhatsApp messages showed that they were willing to “stay through the whole renovation period”, and later acknowledged that renovation was something expected when they entered the Tenancy. In those circumstances, the Defendants proceeded with the Tenancy on the apparent expectation that any resulting disturbance would be tolerable to them. When the renovation was carried out using the Traditional Method and the disturbance proved more serious than the Defendants had expected, they sought to present their position as one in which they had been induced into the Tenancy by the Plaintiffs’ alleged Misrepresentation and sought to rely on the various defences in order to justify leaving the Tenancy early. I rejected that case after evaluating the contemporaneous documents, the parties’ evidence and the inherent probabilities.

40.I also found that the alleged Misrepresentations had not been proved. The fact that the Defendants’ expectation was later disappointed did not, of itself show that the Plaintiffs had made the alleged Misrepresentations concerning the timing of the renovation or the method to be adopted. I further found that the Defendants had not proved that the Tenancy contained or should be rectified to include an Early Termination Clause, and that the renovation works were acts of the IO not attributable to the Plaintiffs for the purposes of the quiet enjoyment covenant. Those findings supplied a cogent evidential foundation for the assessment in §52. The matters said to be uncontroverted identify no material matter which I overlooked or misunderstood, and does not assist them.

41.Ground 4 is again an attempt to reargue the factual case advanced at trial and to attack on an evaluative factual conclusion anchored in this Court’s primary findings concerning the reliability of the parties’ evidence and the significance of contemporaneous documentation.

Ground 5

42.Ground 5 challenges the conclusion that the decisions and acts of the IO in carrying out the Block 8 Building Renovation were not attributable to the Plaintiffs as individual owners and landlords, and therefore did not constitute a breach by the Plaintiffs of the covenant for quiet enjoyment.

43.I do not consider that this ground is reasonably arguable. The Judgment addressed the issue in detail at §§102 to 112. It proceeded from the relevant legal question: whether the acts complained of were acts of the landlord, or of a person claiming under or authorised by the landlord, such that they could engage the landlord’s covenant for quiet enjoyment.

44.As stated in Chong Lap Fu, the IO is a separate and distinct legal person from the individual owners. Unless the statute provides otherwise, the IO’s acts are not to be regarded as the individual acts of the owners merely because the IO represents their interests. That principle is consistent with Kou Mei Juan v Incorporated Owners of Pak Cheung Building (Blocks C & D), Tung Choi Street (CACV 24/1985, 11 April 1985). It was subsequently applied in the context of major renovation works in Bright View Properties Ltd v New King Properties Ltd [2020] HKDC 1240 and White Dragon Ltd v Evertime Technology Development Ltd (LDPD 643/2017, 9 August 2017).

45.The Defendants’ reliance on s 17 of the BMO is misplaced. S 17 provides a particular statutory mechanism by which a judgment or order against a corporation may, with the leave of the Lands Tribunal, be enforced against an owner. Such an enforcement provision does not deem every act of the IO to be the personal act of every owner for all purposes. Nor does it alter the separate legal personality of the IO.

46.S 34 is likewise directed to a specific context: the winding-up of an IO and the owners’ obligations to contribute to the corporation’s assets to discharge its debts and liabilities. Wong Tak Man Stephen v Chang Ching Wai [2017] 5 HKLRD 758 concerns the construction of that specific winding-up provision. It does not provide that an owner is personally answerable to a tenant for every act done by the IO. The statutory identification of particular circumstances in which owners may be exposed to liability is inconsistent with the Defendants’ broad submission that all IO acts are, without more, automatically acts of every individual owner.

47.The Defendants’ reliance upon s 68 of the Sex Discrimination Ordinance (Cap 480) also does not assist them. That provision expressly confers immunity from personal liability upon specified persons acting in good faith in the performance of functions under that Ordinance. The Defendants submit that, because the BMO contains no equivalent general protection for individual owners, the acts of an IO must therefore be attributable to every individual owner. I do not agree with such submissions. The BMO separately addresses particular issues of liability and enforcement, including enforcement against an owner of a judgment obtained against an IO under s 17, protection for participants of a management committee under s 29A, and owners’ liability upon winding up under s 34. Those specific provisions do not abrogate the separate legal personality of the IO or render every corporate act of the IO the personal act of every owner for the purposes of a landlord’s covenant for quiet enjoyment.

48.As explained in §109 of the Judgment, “binding effect is not the same as attribution of acts”. A binding corporate decision is not thereby transformed into the personal act of each person bound by it. The distinction between being bound by a corporate decision and being the legal actor responsible for it is fundamental.

49.The fact that the renovation was authorised at a general meeting does not supply a principled basis for departing from Chong Lap Fu. The reasoning in that decision is not confined to a particular scale of works, to renovation of one flat, or to a decision under s 16 of the BMO. It concerns both the scope of the covenant for quiet enjoyment and the separate legal personality of the IO. No statutory provision has been identified which provides that building-wide works authorised by a general meeting are, by that fact alone, acts of each individual owner for the purposes of a landlord’s covenant with his tenant.

50.The submission that the pertinent reasoning in Chong Lap Fu was obiter is also unpersuasive. The court determined the claim on alternative grounds, each of which was sufficient to dispose of the matter. A distinct ground which is necessary to one of the alternative bases for the decision is not deprived of ratio status simply because another sufficient ground was also available. The reasoning in Catalyst Capital Group Inc v VimpelCom Ltd [2019] ONCA 354 at [30]-[33], is consistent with this conclusion. In any event, the Court of Appeal decision in Kou Mei Juan and the subsequent decisions referred to above support the same principle.

51.Nor does Budd-Scott v Daniell [1902] 2 KB 351 assist the Defendants. That case concerned whether the landlord himself had breached the covenant for quiet enjoyment by carrying out painting work to the premises during the tenancy in order to comply with an Act of Parliament. The present case is materially different. The renovation works were performed by the IO, a separate legal person, and not by the Plaintiffs in their capacity as landlords. Budd-Scott does not address the attribution to an individual owner-landlord of works undertaken by an IO, nor does it undermine the principles stated in Kou Mei Juan or Chong Lap Fu.

52.The Defendants also seek to argue that the issue is of public importance due to the prevalence of multi-storey buildings in Hong Kong. I do not accept that submission. The general legal principle is not novel or unsettled. It is established by authority and is capable of straightforward application to the circumstances of this case. The proposed point does not disclose an important unresolved question requiring consideration by the Court of Appeal in the public interest.

53.In the circumstances, Ground 5 has no reasonable prospect of success.

CONCLUSION

54.For the aforesaid reasons, none of the proposed grounds has a reasonable prospect of success. Nor is there any other reason in the interests of justice why the proposed appeal should be heard. The Defendants’ application for leave to appeal is dismissed.

55.Costs should follow the event. I make an order nisi that the Defendants pay the Plaintiffs’ costs of this application, with certificate for Counsel. Having considered the statement of costs, I summarily assess the Plaintiffs’ costs at $90,000.

56.It remains for me to thank the legal representatives of both sides for their assistance.

Mr Alvin Tsang, instructed by C. S. Chan & Co, for the 1^st and 2^nd Plaintiffs

Messrs. Kelvin Cheung & Co, for the 1^st and 2^nd Defendants