Susan Chan Pui Wan and Another v. Thomas Young
Read the full judgment text of HCMP 15/1983 on BabelCite. This High Court CFI judgment.
1. This is a somewhat unusual application. As declarations are being sought, let there be no mistake about the nature of these proceedings which were adjourned to and must be treated as if the same had been conducted in open court.
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HCMP000015/1983
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______ Coram: Hon. Liu J. Date: 18th February 1983 ___________ JUDGMENT ___________ 1. This is a somewhat unusual application. As declarations are being sought, let there be no mistake about the nature of these proceedings which were adjourned to and must be treated as if the same had been conducted in open court. 2. The matter arose as a result of expiration of the three years' term granted by the plaintiffs to the defendant under a Tenancy Agreement dated the 22nd May 1979, whereby the premises in suit were let by the plaintiffs to the defendant for a term of three years commencing from the 1st June 1979 at a 'rental of $3,200 per month. Clause 4(i) of the ' said Tenancy Agreement provided:
3. The original three years term having expired, the plaintiffs through their solicitors invited the defendant to enter into a fresh Tenancy Agreement at a new rent of $4,000 per month. Paragraph 3 of that letter dated 24th May 1982 to the defendant containing the said invitation reads as follows:
Paragraph 4 continued in these terms:
That letter concluded:
There is not a shadow of doubt that shortly prior to the expiration of the said three years terms, the plaintiffs through their solicitors wrote to the defendant by that said letter acknowledging his exercise of the "option to renew" under a provision of the said Tenancy Agreement and offering to grant a renewal pursuant to the same provision. For reasons best known to the defendant, the invitation of the plaintiffs through their solicitors was not complied with. The defendant replied by a letter which purports to come from the defendant himself, paragraph 2 of which reads as follows:
This court is not called` upon to decide as to what, however Clause 4(i) of the said Tenancy Agreement is to be interpreted, the legal relationship between the parties is on account of steps taken pursuant to Clause 4(i) of the said Tenancy Agreement; nor is this court enjoined by the present proceedings to adjudicate and determine, again whatever is the legal effect of Clause 4(i), the position vis-a-vis the plaintiffs and the defendant by virtue of the exchanged correspondence. There may or may not be questions of estoppel, acceptance of the plaintiffs' offer as evidenced by the defendant's reply, creation of a new relationship etc. These are possible matters at issue, which may remain after the determination of this originating summons. What this court is invited to construe is the legal effect of Clause 4(i) of the said Tenancy Agreement. 4. Counsel for the plaintiffs contended that there was no workable formula provided in Clause 4(i) to endow it with the necessary validity for enforcement. On behalf of the defendant, it was submitted that the intention of the parties to renew for a further term was a matter of fixed intention, particularly as reflected by the narrow margin between 15% and 25% as provided for in clause 4(i) of the said Tenancy Agreement. It was urged that with that fixed intention to renew, it was the bounden duty of this court to supply the necessary machinery for determinging the rate of rental in the renewed term. Both parties relied on Brown v. Gould (1) and the observations of Macgarry J., as he then was, at page 60C et seq. 5. The range between 15% to 25% cannot said to be insignificant. Once it is accepted that the margin is wide and the variation real and substantial, it may readily be seen that there can be no appreciable difference between the nature of such a provision for a minimum of 15% and the maximum of 25% and that of a more conspicuous provision for a minimum of 1% and the maximum of 300%. Both examples are in my view equally too uncertain to be valid. If I am right in this conclusion, the formula is not one capable of yielding a determinable rate, and it will be futile for the court to supply the machinery for a wholly unworkable formula. I am driven to the conclusion that the contention of Mr. Lee should be upheld. Consequently, I am prepared to grant a declaration in terms of prayer 1 of the Originating Summons without the last four words thereof. 6. As I have explained broadly earlier, clause 4(i), though imprefect and uncertain, might well have been given legal effect to by the conduct of the parties. A legal relationship might well have arisen on the acceptance by letter of the defendant in response to the offer made on behalf of the plaintiffs under or independent of the option to renew. These were matters not canvassed in and immaterial to these proceedings. For that reason, it would not be fair or proper for me to go beyond the bare minimum required to state my view on the true interpretation of Clause 4(i) of the said Tenancy Agreement dated the 22nd May 1979. By the same parity of reasoning, it would be at least imprudent of me to consider making a declaration in terms of prayer 2 which is uncalled for and unnecessary for the determination of the legal effect of Clause 4(i) of the said Tenancy Agreement. The same may be said for paragraphs 3 and 4 of the Originating Summons. For all these reasons, there is no warrant for any other declaration to be made, save for the declaration in terms of paragraph 1 of the Originating Summons with the deletion of the last four words thereof. I make the declaration in those terms accordingly with costs to the plaintiffs.
Representation: Mr. Philip Lee instructed by Messrs. Woo & Woo for the Plaintiffs Ms. Sze-Kin instructed by Messrs. P.T. Fung & Co. for the Defendant (1) [1972] 1 Ch. 53 |