Bright Region Enterprise Ltd and Others v. Well Prestige Investment Ltd t/a Igarashi Japanese Restaurant
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HCA860/2006 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 860 OF 2006 ------------------------------ BETWEEN
------------------------------ Before : Mr Recorder Shieh, SC in Court Dates of Hearing : 19—21 September 2007 Date of Judgment : 16 November 2007 ------------------------------ JUDGMENT ------------------------------ Overview 1.Tseung Kwan O Plaza (“TKO Plaza”) is a shopping arcade in No. 1, Tong Tak Street, Tseung Kwan O, New Territories. A food court (“the Food Court”) is located on Level 2 of the Commercial Portion. The plaintiffs are the registered owners of the Food Court. 2.By a Tenancy Agreement dated 3 January 2005 between Nan Fung Development Limited acting as agent for the plaintiffs as the landlord and the defendant (“the TA”), Well Prestige Investment Limited (“Well Prestige”) as tenant, Shop No. 2-021a of the Food Court (“Shop 2-021a”) was let to Well Prestige for use as a food shop for a term of three years from 14 December 2004 to 14 December 2007 both days inclusive. The monthly rental was HK$39,000 inclusive of government rent, rates, management fees and air conditioning charges. 3.Under the TA, Shop 021a was leased to Well Prestige expressly for the purpose of a food shop for retail sale of food and drinks as per Appendix 1 attached to the TA and for no other purpose. Well Prestige was to trade under the trade name of “Igarashi Japanese Restaurant” (“五十嵐日本料理”). 4.Apart from Shop 2-021a, there were six other stalls in the Food Court. They were leased to six other tenants who sold different types of cuisine, namely (i) Thai, (ii) Shanghainese, (iii) Western, (iv) Taiwanese, (v) Congee/noodles and (vi) Cantonese. 5.Clause 11(e) of the TA provided that Well Prestige was not to sell any types of items other than the food and drinks listed in Appendix 1 attached to the TA without the previous consent in writing of the plaintiffs. Appendix 1 of the TA consisted of a list of food and drinks (in the form of printed menus). 6.Clause 11(e) of the TA went on to provide that if Well Prestige was to sold any food or drinks which were not listed in Appendix 1 and without the plaintiffs’ prior consent in writing, the plaintiffs would be entitled to absolutely cease and determine the TA in its absolute discretion but without prejudice to any right of action by the plaintiffs in respect of any outstanding breach or non-observance or non-performance of any of the provisions in the TA. 7.As a matter of proper interpretation of the TA (in particular clause 11(e) and Appendix 1), the types of food and drinks which Well Prestige was permitted to sell in五十嵐日本料理is not defined by reference to whether it could be characterised as Japanese food or not. The types of “permitted food” are defined by reference to their appearance in Appendix 1 of the TA (or such prior written consent as might be given by the plaintiffs from time to time). 8.In the context of a food court, I can readily understand the rationale for such a requirement. Where a food court has a number of outlets selling different types of food, it is in the interest of both the landlord and the tenants that the types of food sold in the outlets were subject to some form of control. It would be in the interest of the landlord, because this can ensure a proper and appropriate “spread” of the available choices. It would also be in the interest of the tenants because each of them could operate without competition in connection with its specialty cuisine from any neighbouring stalls in the same food court. There is nothing in the documents before me which suggests that a tenant had a right of action directly against a neighbouring tenant who sold unauthorised food or drinks, but if he were to refer the matter to the landlord or to make a complaint, he could look to the landlord to take the matter up with the “offending” tenant. Irrespective of whether a landlord had any legal obligation to take up a complaint or to enforce the requirement against the “offending” tenant, as a matter of commercial reality one would expect a landlord to do so. 9.I do not think I need any form of positive witness testimony or evidence to support the points set out in the previous paragraph. All of them are obvious as a matter of plain common and commercial sense. I make these observations here in order to put the debate in this case in context. The respective cases of the parties 10.It is the plaintiffs’ case that towards the end of 2005, Well Prestige began to sell food and drinks which were not listed in Appendix 1 of the TA without obtaining the prior consent in writing of the plaintiffs. 11.Well Prestige takes issue with this. It says that the list of food and drinks in Appendix 1 to the TA had been supplemented by a document dated 6 December 2006. This document (which I shall call the “Supplemental List”) set out further items of food (i.e. on top of those listed in Appendix 1). It was faxed to Miss Hillary Lam, a leasing officer in the Leasing Department of Nan Fung Development Limited (“Nan Fung”), the plaintiffs’ agent (I should add that there is no dispute that Nan Fung was the plaintiffs’ agent in relevant matters concerning this action). Miss Lam put a tick on a number (but not all) of the items on the Supplemental List to signify the plaintiffs’ approval. 12.Well Prestige says that at all material times, the food and drinks sold at五十嵐日本料理were those listed in either Appendix 1 or the Supplemental List. The plaintiffs do not dispute that additional items of food had been approved by way of the Supplemental List, but say that五十嵐日本料理had been selling food and drinks which were listed in neither Appendix 1 nor the Supplemental List. 13.The plaintiffs claim that Well Prestige’s sale of unauthorised items of food and drinks entitled the plaintiffs to forfeit the lease. A letter was sent by the plaintiffs’ solicitors to Well Prestige dated 14 February 2006 requesting Well Prestige to cease selling unauthorised food failing which the plaintiffs would take further legal action against Well Prestige. By the issuance of the writ herein the plaintiffs claim to have forfeited the lease. The plaintiffs also claimed mesne profits. 14.Well Prestige contests the claim by denying sale of unauthorised items of food and drinks. Initially Well Prestige’s pleading consisted of a counterclaim against the plaintiffs for (i) alleged misrepresentation and (ii) relief against forfeiture. Shortly before the commencement of the trial, counsel for Well Prestige informed counsel for the plaintiffs that the counterclaim (on both counts) would not be pursued. This was confirmed to me on the first day of the trial. I granted leave to Well Prestige to withdraw its counterclaim, with costs of and occasioned by the counterclaim to the plaintiffs to be taxed if not agreed. 15.The dispute before me at this trial therefore boils down to the single issue of fact as to whether Well Prestige had, as alleged by the plaintiffs, been selling unauthorised items of food and drinks which were not covered by Appendix 1 or the Supplemental List. The burden of proving this is on the plaintiffs. The evidence 16.Two witnesses were called for the plaintiffs : Miss Hilary Lam who, as I said above, was the leasing officer of Nan Fung, the plaintiffs’ agent; and Mr Frendi Leung, an estate officer of Vineberg Property Management Limited (“Vineberg”) which was the estate manager of TKO Plaza. One witness was called for Well Prestige, Mr Chan Ying Kai, the managing director of Well Prestige. 17.The key points of the evidence given by the respective witnesses are as follows. 18.Miss Hillary Lam :
19.Frendi Leung :
20.Mr Chan Ying Kai :
Discussion 21.As I said above, the case turns on one issue of fact namely whether Well Prestige had been selling unauthorised food at Shop 2-021a in breach of the TA. More specifically, in view of the timing of the writ and in view of the way the pleadings had been framed, the issue is whether prior to the issuance of the writ, namely 19 April 2006 Well Prestige had sold any of the items of unauthorised good particularised in paragraph 1 of the Further and Better Particulars of the Statement of Claim supplied by a letter from the plaintiffs’ solicitors of that date. 22.In this connection, the key witnesses are Mr Leung and Mr Chan. Miss Lam gave evidence about two occasions where she directly observed what was sold by Well Prestige at Shop 2-021a; in other aspects her evidence as to receipt of complaints and reports were in the nature of hearsay. Though hearsay is generally admissible nowadays it is abundantly clear that the plaintiffs are relying on Mr Leung to prove their case. Miss Lam’s evidence is more in the nature of providing the background to how the dispute began to develop and how it was handled by the management of Nan Fung. That said, I have also taken her evidence into account in resolving the relevant factual issue in this case. 23.Mr Leung came across as a straightforward witness. There is nothing inherently incredible about his evidence. There is no incentive for him to fabricate evidence. His responsibility was to monitor the tenants’ compliance with the requirements in their respective tenancy agreements but there is no evidence (and it has not been suggested) that he would have anything to gain by falsely accusing Well Prestige of selling unauthorised food. It has not been suggested that somehow he had any grudge against Well Prestige. His reports on unauthorised food covered not just Well Prestige, but other tenants as well. 24.Further, in the context of the evidence in this case there is little scope for mistake or misunderstanding as to what food he saw and what they actually were. Either the food names would be displayed, or he would be told what they were by the staff of Well Prestige, or the types of food would be so easily recognisable (either by sight or by taste) that there would be little scope for mistaking what they were. After all, we are not talking about very esoteric types of food. 25.Counsel for Well Prestige pressed the point that there was no photographic evidence to support Mr Leung’s evidence for the relevant period (save and except exhibit P1 which as disclosed during trial), and it was argued that if indeed unauthorised food had been sold it would have been easy for photographs to be taken (even in the face of objections from the staff of Well Prestige). 26.I have taken this point into account. However, I accept Mr Leung’s explanation as to why there were no photographs for the relevant period. I accept his evidence that there had been objections to photo-taking. In retrospect it may well be said that he could have taken photographs surreptitiously (whether with a digital camera or a mobile telephone), or have taken photographs of food that he actually ordered. However, people do not always think or conduct themselves on the basis that they should always try every means to obtain what a court might regard as “better evidence”. Here we have a staff of a management company who had tried to take photographs and who had been “told off” by the staff. He had personally seen the food and tried the food and he had said in cross-examination that he could rely on what he had eaten and seen. I do not regard that as an unreasonable attitude to taken and the absence of any photographic evidence has not undermined the weight that I place on his evidence as to what he had seen and eaten. 27.Mr Chan, on the other hand, was not an impressive witness. In particular, his attempts to explain away the photographic evidence were unconvincing and unsatisfactory. He was at times shifty and evasive, mostly when he realised that he was being pushed into a corner in cross-examination. Where his evidence conflicts with that of Mr Leung I have little hesitation in preferring Mr Leung’s evidence over his evidence. 28.His evidence summarised in paragraphs 20(6) to (8) is an example of the unsatisfactory features of his testimony. 29.Take the case of豬柳三絲拉麵and豚肉生薑燒for example, he was asked specifically why, if豬柳三絲拉麵was actually meant to be a reference to豚肉生薑燒the white board did not simply say豚肉生薑燒. His answer was that if the white board had said豚肉生薑燒, a lot of people would not know what it was. This explanation had just to be stated to be rejected : First of all I cannot see what was so difficult about the name豚肉生薑燒that it would not be understood by the staff or customers. Secondly, it is natural that a Japanese style restaurant would have a lot of food names that carry a Japanese flavour, and it has not been suggested that Well Prestige had changed the names of all its food to “user friendly” Chinese style names. Thirdly if豬柳三絲拉麵were truly an “understandable” way of referring to豚肉生薑燒then the easiest way to deal with it would be to apply for approval to sell a food called豬柳三絲拉麵. Fourthly, there is no hint of the ginger element in the name of豬柳三絲拉麵. Lastly the approved item豚肉生薑燒did not have the ramen (拉麵)element in it. I reject this explanation completely. 30.Take獅子頭and日式燒魚餅as another example. I have taken a look at the relevant photograph. I cannot see any resemblance between the food in the relevant tray and any form of fishcake. The contents of the relevant tray appear spherical rather than flat, cake-like. There also appeared to be some gravy in the tray, something which naturally went with獅子頭, yet he persisted in his evidence that they were燒魚餅. I accept Mr Leung’s evidence and I regard Mr Chan’s attempted explanation to be disingenuous. 31.Likewise for the food depicted in exhibit P1 :
32.He was shown a photograph at [B/119] :
33.Another example of the unsatisfactory and evasive nature of his evidence comes in the photograph at [B/116] (magnified to become exhibit P2) :
34.The list could continue, but I do not intend to burden this judgment by going through each and every explanation given by Mr Chan. At times Mr Chan’s evidence sounded like an improvisation session where he picked up Japanese food names at will and applied them to food items which were plainly not on Appendix 1 or the Supplemental List. He had also questioned whether there were any problems with Mr Leung’s taste-buds. I reject all his attempts in cross-examination to explain that the food items shown to him (whether by way of photograph of actual food or photographs of the written food names written at Shop 2-021a) were covered by Appendix 1 or the Supplemental List. 35.Overall, I have considered the entirety of the evidence given by Mr Leung and Mr Chan and I prefer the evidence of Mr Leung over that of Mr Chan’s in case of conflict or inconsistency between them. I accept Mr Leung’s evidence as to the food that was sold at Shop 2-021a, as observed by him, and as described in his evidence. 36.I have not forgotten that Mr Leung’s photographs dated 10 and 11 May 2007 were taken after the writ. Proving that Well Prestige had sold unauthorised food on 10 May 2007 does not, of itself, entitle the plaintiffs to forfeit the lease by issuance of the writ in April 2006. However, the significance of Mr Chan’s evidence on the photographic evidence on 10 and 11 May 2007 is it affects my view on his overall credibility. This has a bearing particularly when I come to assess Mr Chan’s evidence in denying the sale of unauthorised food for the relevant period namely the period prior to the issuance of the writ where, save for exhibit P1-P1B, there was no photographic evidence and where one is basically facing a your-word-against-my-word situation. 37.Further, it has not been suggested that there was somehow a change in the modus operandi of Well Prestige between the issuance of the writ and 10 May 2007. For example, it has not been said that Well Prestige might have sold some unauthorised food but that only started after the writ and the plaintiffs had somehow jumped the gun in issuing the writ. Well Prestige’s position on the evidence is one of denial throughout the timeframe from December 2005 to May 2007. There was no fallback, no half way house. Once Mr Chan’s evidence is shown to be unreliable in relation to the post-writ sale of unauthorised food, there is really nothing to persuade me to accept his denial in relation to the pre-writ period. 38.I have borne in mind that the fact a witness had given incorrect or unreliable evidence on one point does not necessarily mean that he had given incorrect or unreliable evidence on another point. On the facts of this case, however, I am satisfied that I am entitled to take into account Mr Chan’s performance in explaining the 10 and 11 May 2007 photographs in assessing his credibility on the pre-writ period. 39.For the avoidance of doubt I also accept Miss Lam’s evidence in relation to what she observed to be sold by Well Prestige during her visits to Shop 2-021a in early December 2005 and before the meeting on 26 January 2006. 40.In the course of cross-examination, the witness on both sides had been tested on many other areas, such as why certain matters were not mentioned in the witness statement, why the specific food names were not listed out in Vineberg’s warning letter dated 12 January 2006 and Messrs Woo Kwan Lee & Lo’s letter dated 14 February 2006, why specific food names were mentioned in the warning letters to the other tenants, and the type of clientele served by the Food Court in TKO Plaza. I have considered all the cross-examination. Any points not covered by this judgment are points which I do not regard to be relevant or sufficiently weighty to affect or detract from my conclusions above. 41.For the avoidance of doubt I consider Messrs Woo Kwan Lee & Lo’s letter dated 14 February 2006 to be sufficiently clear to inform Well Prestige the subject matter of the complaint — the complaint was not the sale of food by the format of三餸飯; the complaint was as to the choice of food offered for三餸飯. 42.There are also some minor inconsistencies between the evidence of Mr Lam and Miss Lam. By way of example, Mr Leung had said that by the time of the 26 January 2006 meeting, not all seven tenants were selling unauthorised food. However, Miss Lam had said at paragraph 11 of her witness statement that all seven had been selling unauthorised food (I took this to mean that they were still selling at the time of the meeting; if not, then there was no inconsistency). I do not regard any inconsistencies in the evidence of these two witnesses affects by assessment of their overall credibility on the crucial issues. 43.Lastly I do not think that the resolution of this case requires any expert evidence on food or cooking method. Whatever may be the position (and I make no comment on that) if one is dealing with more esoteric or borderline type of cuisine or food, this is not such a case. Here we are talking about common type food dishes usually seen at food courts all over Hong Kong and consumed everyday by inhabitants of Hong Kong. All that is needed to resolve the issue is a dose of common sense. Relief 44.I therefore find that the plaintiffs have proved their case against Well Prestige. I now come to the question of relief. 45.The plaintiffs seek an order for vacant possession. This follows from my finding above, given that there is no longer any claim for relief against forfeiture. 46.I would order that vacant possession be delivered within seven days. 47.As to mesne profits, the plaintiffs seek mesne profits at the rate of rental up to the date when vacant possession is delivered. No contrary submission has been made to this and it is so ordered. 48.The plaintiffs are to have their costs, on a nisi basis, to be taxed if not agreed.
Mr Alan M.S. Ng, instructed by Messrs Woo, Kwan, Lee & Lo, for the Plaintiffs Mr Victor W.T. So, instructed by Messrs Wat & Co., for the Defendant |