Cathay Pacific Airways Ltd. v. Winlight Development Ltd.
Read the full judgment text of DCCJ 10199/2001 on BabelCite. This District Court judgment was delivered on 11 December 2001.
1. The chronology of events agreed by the parties pretty much puts in focus the issues before me:-
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DCCJ010199/2001 DCCJ10199/2001 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 10199 OF 2001 -----------------------
---------------------- Coram: H.H. Judge Li in Chambers Date of Hearing: 3 December 2001 Date of Handing Down Judgment in Court: 11 December 2001 ___________ JUDGMENT ___________ 1. The chronology of events agreed by the parties pretty much puts in focus the issues before me:-
2. On 3rd December 2001, the parties came before me on cross summonses. The Plaintiff sought summary judgment. The Defendant applied to strike out the Plaintiff's claim for being frivolous, vexatious or an abuse of process. Actually, there is no reason at all to think that the Plaintiff's claim was frivolous, vexatious or an abuse of process. The application to strike out the claim was misconceived. What the Defendant in fact argued, through Miss Lam, was that the Defendant had three defences to the claim. So my responsibility, really, was to determine whether the Defendant had good arguable defences to resist the Plaintiff's summons for summary judgment. 3. It is common ground that the Plaintiff as tenant has delivered up vacant possession of the Property to the satisfaction of King Step. It is also admitted that the Defendant did receive and hold the Deposit of $90,000. But the Defendant alleged that at the time of the assignment of the Property it had also paid over the Deposit to King Step and that the Plaintiff knew about this transfer of the Deposit to King Step. 4. Against the Plaintiff's claim, the Defendant relied on three defences:-
5. As Miss Yeung for the Plaintiff contended, the covenant to return the Deposit is a personal covenant which does not run with the land and the Defendant remain personally liable to refund the Deposit to the Plaintiff notwithstanding that it has assigned the Property to King Step. See Hua Chiao Commercial Bank Limited v. Chiaphua Industries Limited [1988] 1 HKLR 443 and Hui Sai Hoi v. Chan Lai Wan and Wong Leung Shi [1932-1933] HKLR 31. I find that the principle in this regard is well established. The fact that the Plaintiff delivered up vacant possession to King Step simply supports the Plaintiff's claim for refund of the Deposit. 6. As to knowledge on the part of the Plaintiff that the Deposit had been transferred and yet the Plaintiff did or said nothing, it is trite law that silence is not consent. The Plaintiff's inaction or silence certainly did not amount to consent to novation. The Plaintiff might or might not realize that the Defendant (who was represented by solicitors in the assignment of the Property) was labouring under the illusion that by transferring the Deposit to King Step it (the Defendant) would be discharged from liability to refund the Deposit to the Plaintiff. The Plaintiff did no act to waive its rights to claim against the Defendant for breach of agreement. In any event, it is not the duty of the Plaintiff to advise the Defendant what to do to protect the Defendant's interest. The transfer of the Deposit was not an act detrimental to the interests of the Plaintiff such that if the Plaintiff did not take remedial action it (the Plaintiff) could be taken to have acquiesced in the Defendant's act. Whatever prejudice suffered by the Defendant following the transfer of the Deposit was the result of the Defendant's own mistaken belief about its (discharged) obligations to the Plaintiff. Hence, the Plaintiff is not estopped from claiming against the Defendant. 7. As to laches, Miss Yeung submitted that the Plaintiff brought this action within the statutory time limit and therefore the equitable objection of laches by the Defendant does not apply. See Section 4(1) of Limitation Ordinance (Cap. 347); Halsbury's Laws of England, volume 16 para 925; Snell's Principles of Equity para 3-18; and Re Pauling's Settlement Trusts Younghusband v. Coutts & Co. [1961] 3 ALL ER 713. Again the law is quite clear. I agree with Miss Yeung entirely. 8. Since all three pleaded defences were unsupportable, and there being no factual issue for trial, I dismissed the Defendant's application to strike out with costs to be taxed if not agreed and gave judgment for the Plaintiff in the following terms:-
9. There remained the Defendant's claim against a third party. Since I was not seized with that aspect of the case the Defendant will have to take further steps in that regard.
Representation: Ms. Majestic S. Yeung of Messrs. Johnson, Stokes & Master for the Plaintiff. Ms. Lam Pui King of Messrs. Lam Pui King & Co. for the Defendant. Ms. Dardon of Messrs. Baker & Mckenzie for the Third Party. |