Treasure Rock Development Ltd. v. Splendid Duesseldorf Production Ltd.

HCA001784/1995

1995, No. A1784

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: The Hon. Mr. Justice Wong in Chambers

Date of hearing: 13 October 1995

Date of handing down of judgment: 18 October 1995

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J U D G M E N T

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1. This is an appeal against the decision of Master Woolley dismissing the plaintiff's application for summary judgment under Order 14 of the Rules of Supreme Court.

2. The plaintiff is the registered owner of two premises which were let to the defendant for commercial purpose for a fixed term to expire on 24th January 1995. The defendant did not deliver vacant possession until 9th February 1995 in respect of one unit and 22nd March 1995 in respect of the other. A writ was issued on 25th February 1995. The summons which was heard before Master Woolley was taken out on 24th March 1995 in which the plaintiff asked for summary judgment for the forfeiture of the rental deposit, mesne profits, management fees, arrears of mesne profits and management fees, interest and damages to be assessed.

3. It is not in dispute that Part V of the Landlord and Tenant (Consolidation) Ordinance applies to the tenancies and Part II and Part IV have no application. Section 122(c) of Part V of the Ordinance provides:

"A tenancy for a fixed term shall not cease at the end of that term unless notice is served by the landlord, not less than 6 months, or by the tenant, not less than 1 month, before that end."

4. During the hearing before Master Woolley, the defendant relied solely on the ground that the statement of claim was defective in that the plaintiff failed to plead that a notice of termination had been served on the defendant. There was no allegation by the defendant that no such notice was served.

5. It was submitted by Mr. Paul Lam on behalf of the appellant/plaintiff that the notice of termination required to be served under section 122(c) was a condition precedent. Order 18 r.7(4) of the Rules of Supreme Court, on which he relied, reads:

"A statement that a thing has been done or that an event has occurred, being a thing or event the doing or occurrence of which, as the case may be, constitutes a condition precedent necessary for the case of a party is to be implied in his pleading."

6. In support of his contention, he cited the decision in Gates v. Jacobs [1920] 1 Ch.567. At p.570 Lawrence J. said:

"In my judgment the concluding words of r.14 of Order XIX mean that an averment that the notice was given, although not specifically pleaded, must be implied. In other words the statement of claim must be read as if it contained an allegation that the plaintiffs had given the necessary notice under s.14 of the Act before the commencement of the action."

7. Mr. Daniel Wan for the defendant/respondent argued that the omission to plead the service of the notice of termination was fatal and he relied on the passage at 14/1/4 of the White Book, Volume 1 which reads:

"The statement of claim must be complete and good in itself; any defect or omission 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".

8. He also relied on the judgment of Kaplan J. in Chinakong Manufactory Ltd. v. Uniden Hong Kong Ltd. [1993] 1HKLR 28. Without going into any details, it suffices to say that the decision is only relevant to the question whether it is necessary for a defendant to file an affidavit to oppose an Order 14 application where the statement of claim shows no cause of action or which should not be within Order 14.

9. In my judgment, the plaintiff's failure to plead the service of the notice of termination is not a defect that should result in the dismissal of the application. The case falls within Order 18 r.7(4) and Gates v. Jacobs. But as a good practice, it is desirable that the matter should be pleaded.

10. Mr. Lam conceded that the plaintiff could not recover an amount greater than the rental deposit.

11. Accordingly, the appeal is allowed with costs and judgment is entered for the plaintiff for the forfeiture of the rental deposit of HK$289,200.00. Since the money has always been with the plaintiff, the plaintiff is not entitled to interest.

12. This judgment is handed down in open court as it may be of some interest to practitioners.

Representation:

Mr. Paul Lam instructed by M/S Charles Yeung Clement Lam & Co. for Appellant/Plaintiff.

Mr. Daniel Wan instructed by M/S Stephane Hui Bon Hoa & Co. for Respondent/Defendant.