World of Wigs Ltd v. Femina Ltd
Read the full judgment text of HCA 1062/1971 on BabelCite. This High Court CFI judgment.
1. This is an application by the judgment creditor for a garnishee order nisi made on the 21st August 1971 to be made absolute.
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HCA001062/1971 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION ACTION NO. 1062 OF 1971 -----------------
----------------- Coram: Mr. B.L. Jones, Assistant Registrar, in Chambers. Date of Judgment: 6th day of November, 1971. ----------------- DECISION ----------------- 1. This is an application by the judgment creditor for a garnishee order nisi made on the 21st August 1971 to be made absolute. 2. A judgment was obtained by the judgment creditor in default of appearance against the judgment debtor on the 24th May 1971 for the sum of $385,456 and $454.75 costs. 3. It is admitted that the garnishee let the premises known as Room 1236, 12th floor, Tung Ying Building, 100 Nathan Road, Kowloon, to the judgment debtor for a period of 3 years from the 1st June, 1971 at a rent of $740.00 per month and air conditioning charges of $163.00 per month by an agreement dated the 25th June, 1971. By clause 5(a) of the agreement the judgment debtor deposited with the garnishee the sum of $3,060.00 in order to secure due observance and performance of the agreement. In the event of the judgment debtor's failure to observe and perform the agreement the garnishee was entitled to deduct from the deposit an amount for any loss or damage sustained. 4. On the 20th July 1971 the judgment creditor's solicitor Mr. Duffy informed the garnishee that the judgment debtor had sublet the premises to S.G.S. Semi Conductors Limited which constituted a breach of clause 2(v) of the agreement. A Mr. Levy had conducted the negotiations for the tenancy on behalf of the judgment debtor but it was subsequently ascertained that he was not a duly authorised officer of the company although he had described himself as the President. On or about 14th August 1971 it was agreed between the garnishee and Mr. Levy that in consideration of the lease being surrendered by the judgment debtor and the deposit of $3,060 being forfeited the garnishee would grant a new tenancy to one of Mr. Levy's companies. A lease was entered into by the garnishee with Mr. Levy's company on the 16th August 1971 and the tenancy agreement of the 25th June 1971 with the judgment debtor was endorsed as follows:-
5. It is significant that despite the garnishee's knowledge of the breach of agreement on the 20th July 1971 the agreement was not terminated until the 14th August 1971. Further it is pertinent to observe that the garnishee has a waiting list for accommodation at Tung Ying Building yet the premises were let to Mr. Levy's company which was not on the list and without advertising the premises to the general public. The action of the garnishee in this matter is to say the least somewhat strange for they were quite prepared to enter into another lease with Mr. Levy although the Companies he represented or purported to represent were different and despite the fact that he was in breach of the terms of the first agreement by subletting the premises. 6. In an affidavit dated the 1st October 1971 Mr. Hung Shek Chiu, the manager of the Sang Kee Rent Office of the garnishee Bank that manages the premises deposed that the total damage suffered by the garnishee as a result of the breach of the agreement by the judgment debtor amounted to $1,403.00. It was admitted by Mr. Hung in cross examination that by the agreement of the 16th August 1971 the premises had been let at an increased rent and that in addition a higher deposit had been paid. 7. It was apparent that although Mr. Levy was not the duly authorised officer in the judgment debtor company nevertheless to all intents and purposes he was physically the actual tenant, whilst the new agreement was also made for his benefit. 8. The judgment creditor claims that the garnishee is not entitled to make any deduction from the deposit as no loss or damage was suffered. On the other hand the garnishee contends that as there was a breach of the agreement they are entitled to forfeit the deposit. However by virtue of clause 5(a) the garnishee can only deduct an amount from the deposit in respect of any loss or damage incurred. There is therefore no automatic right to forfeit the deposit upon a breach of the agreement. Accordingly the garnishee must prove the loss or damage suffered. If no loss or damage is proved the deposit must be refunded to the judgment debtor in accordance with clause 5(b). 9. It has been established that the premises have been relet at an increased rent and that a higher deposit was paid although Mr. Hung professed that he was not aware of the figures in either case. Although the full deposit has been forfeited nevertheless on the garnishee's own admission the actual damage suffered only amounted to $1,403. 10. However after considering the evidence I am satisfied that the garnishee has not suffered any loss or damage as claimed but has profited as a result of entering into the new tenancy agreement. I am not satisfied that the garnishee is entitled to appropriate the deposit in the manner that they have done so as to deprive the judgment creditor of his rights as against the judgment debtor with the result that the deposit of $3,060 should have been refunded to the judgment debtor. 11. The garnishee order nisi will therefore be made absolute. 12. The costs of this application will be paid by the garnishee. 13. Dated this the 6th day of November, 1971.
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