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Leung Wai Cheung v Octel Networks Ltd And Another

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date07 May 2021
Neutral Citation[2021] HKCA 656
Year2021
Judgement NumberCAMP145/2020
Subject MatterMiscellaneous Proceedings
CourtCourt of Appeal (Hong Kong)
CAMP145/2020 LEUNG WAI CHEUNG v. OCTEL NETWORKS LTD AND ANOTHER

CAMP 145/2020

[2021] HKCA 656

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO 145 OF 2020

(ON AN INTENDED APPEAL FROM DCCJ NO 4454 OF 2017)

_______________

LEUNG WAI CHEUNG Plaintiff
and
OCTEL NETWORKS LTD. 1st Defendant
MR. MOHAMMED BAVA
DIVAN HASAN		 2nd Defendant
FLOURISH PROPERTY AGENCY (C.I.) LIMITED Third Party

_______________

Before: Hon Lam VP and Au JA in Court

Dates of Written Submissions: 27 August and 5 October 2020

Date of Judgment: 7 May 2021

_______________

J U D G M E N T

_______________

Hon Au JA (giving the Judgment of the Court):

A. INTRODUCTION

1. This is the plaintiff’s renewed application[1] for leave to appeal against the judgment (“the Judgment”) of Deputy District Judge Barbara Wong (“the Judge”) of 15 May 2020. By way of the Judgment, the Judge dismissed the plaintiff’s claim against the defendants arising out of a tenancy agreement dispute.

2. The plaintiff first sought leave from the Judge who refused the application by way of her decision dated 14 August 2020. He now renews his leave application before this Court.

3. After reviewing the summons and the parties’ respective written submissions, we find it appropriate to deal with this leave application on the basis of the written submissions only pursuant to Order 59, rule 2A(5) of the Rules of the High Court (Cap 4A) (“RHC”).

B. BACKGROUND

4. The Judge has comprehensively summarized the background leading to the dispute in the Judgment at [3] ‑ [37]. For the present purpose, we will only highlight the following.

5. The plaintiff is the owner of the premises situated at workshop units 6 & 7 on 6th floor of Block B, Hang Wai Industrial Center, No 6 Kin Tai Street, Tuen Mun, New Territories (“the premises”). In July 2017, the 2nd defendant was looking for a place for the business operation of his company, the 1st defendant. It engaged the service of the Third Party as its estate agent (“the estate agent”).

6. On 20 July 2017, Shirley Wong (“Wong”) of the estate agent took the 2nd defendant to look at the premises, which was at that time occupied by an existing tenant. Wong informed the 2nd defendant that the existing tenant would move out on 15 August 2017. The plaintiff and the 2nd defendant then negotiated through Wong for the renting of the premises. On or about 25 July 2017, the parties, again through Wong, reached an oral understanding that the 1st defendant would rent the premises for a year from 15 August 2017 at a monthly rental of HK$20,000, which was to be paid by 12 post‑dated cheques in advance. The 1st defendant as tenant shall be responsible to pay the stamp duty for the tenancy agreement.

7. On 7 August 2017, Wong provided a written tenancy agreement for renting the premises to the 2nd defendant for his confirmation and signing. The written tenancy agreement was in the estate agent’s standard form. It provided that the monthly rental was $20,000 and its term was from 15 August 2017 to 14 August 2018 with an option for renewal. It also provided that the tenant shall pay the landlord the Rental Deposit (representing two months’ rental)[2] and the first month’s rental[3]. The 2nd defendant signed the written tenancy agreement on behalf of the 1st defendant and himself (acting as the guarantor), and handed a cheque which was post‑dated to 13 August 2017 to Wong in the sum of $60,000 for the said Rental Deposit and first month’s rental. It was the 2nd defendant’s case and evidence, which was accepted by the Judge, that he explained to Wong that he issued the post‑dated cheque as he wanted to make sure that the existing tenant would vacate the premises by 12 August 2017 as said by the landlord so that the 1st defendant could move into it on 15 August 2017. He asked Wong to relate this to the plaintiff.

8. Later, on the evening of 7 August 2017, the plaintiff also signed the written tenancy agreement on behalf of his company, Metak Investment Management Company Ltd (“Metak”), which managed the premises. He also signed on the tenancy agreement that under the printed acknowledgement acknowledging the receipt of Rental Deposit and first month rental at $60,000. Nevertheless, the plaintiff only realized on the next day, 8 August 2017, that the cheque was post‑dated.

9. What followed was a series of communications between the parties, through Wong as the intermediate. These communications were mostly contained in the respective WhatsApp messages between the plaintiff and Wong on the one hand, and the 2nd defendant and Wong on the other. The Judge found that the gist of these messages showed that Wong accepted and apologized that she had not drawn the plaintiff’s attention to the post‑dated nature of the cheque, and the plaintiff complained about the post‑dated cheque and he demanded for the immediate payment of the Rental Deposit and the first month rent. At the same time, the other messages also showed that the 2nd defendant also insisted on the post‑dated cheque payment of the Rental Deposit as he was not happy with the plaintiff’s attitude and reiterated his concern about whether the plaintiff would be able to deliver vacant possession of the premises to him on 15 August 2017.

10. On 13 August 2017, the 2nd defendant indicated to Wong by WhatsApp message that he decided to cancel the deal and would not rent the premises.

11. Thereafter, the plaintiff commenced the present action, claiming damages for the defendants’ breach of the tenancy agreement. The defendants raised various defences. Relevant for the present purpose is the main defence that there was never a concluded binding agreement between for renting the premises.

12. By way of the Third Party action, the defendant also in turn claimed against the estate agency for loss, on the basis that the estate agent had breached its duty owed to the defendants in cashing the two cheques issued by the defendants for the respective payment of commission and the stamp duty when the plaintiff had not accepted the defendants’ offer made on 7 August 2017[4].

C. THE JUDGMENT

13. The trial went before the Judge who heard the evidence of the plaintiff, the 2nd defendant and Wong.

14. As mentioned above, the Judge dismissed the plaintiff’s claim after finding that there was no binding agreement concluded between the parties.

15. In coming to that finding, the Judge evaluated all the available evidence as to whether the parties had reached a binding agreement for renting the premises. She adopted an objective assessment of the evidence against what reasonable persons in the positions of the parties would behave in the factual circumstances faced by them: [42] of the Judgment.

16. In evaluating the evidence, the Judge placed more weight on the WhatsApp messages as they were written contemporaneous record of the communications between the parties, conducted through Wong as the go‑between. The messages between Wong and the plaintiff was referred to in the Judgment as the “Leung Series of WhatsApp Messages” and those with the 2nd defendant as the “Abrar Series of WhatsApp Messages” in the Judgment. For convenience, we will adopt the same abbreviations in this Decision.

17. The Judge first found that the defendants in issuing a post‑dated cheque with the signed tenancy agreement was making a counter offer to the plaintiff for renting the premises. This was so as the written tenancy agreement stipulated for the immediate payment of the Rental Deposit and one‑month rental, which was an important material term of the standard format agreement. The post‑dated cheque therefore amounted to a counter offer with a change of a material term. In this respect, the Judge also accepted the 2nd defendant’s evidence and held that the counter offer was conditional upon the plaintiff accepting the post‑dated cheque payment: [46] ‑ [49] of the Judgment.

18. The Judge then found that the condition was not conveyed by Wong to the plaintiff. She also found that the plaintiff did not accept the post‑dated cheques. Hence, he had not accepted the counter offer: [50] ‑ [53] of the Judgment.

19. Since by 13 August 2017, the plaintiff still had not accepted the counter offer, the 1st defendant was entitled to withdraw it as it did through the 2nd defendant. There was therefore no concluded contract between the plaintiff and the defendants for renting the premises. She therefore dismissed the claim: [54] ‑ [61] of the Judgment.

D. THE INTENDED APPEAL

D.1 Grounds of appeal

20. In a lengthy draft Grounds of Appeal dated 26 August 2020 (which will be treated as the draft Notice of Appeal), the plaintiff advanced in substance three grounds of appeal[5]:

(1) The Judge erred in law in holding that the post‑dated cheque was an essential condition for the defendants’ offer and in any event in failing to find that the plaintiff had confirmed his acceptance of the cheque via phone through Wong in the morning of 8 August 2017: paragraphs 1.1 ‑ 1.15 (“Ground 1”).

(2) The Judge failed to clarify the conflicting evidence in court which resulted in an improper trial: paragraphs 2.1 ‑ 2.2 (“Ground 2”).

(3) The Judge failed to attach weight to Wong’s evidence and showed unreasonable favour to the defendants’ defence which lacked support and contradicted with Wong’s evidence. She also disregarded the plaintiff’s evidence which was corroborated by Wong’s evidence: paragraphs 3.1 ‑ 3.6 (“Ground 3”).

21. In support of these grounds, the plaintiff has also filed a lengthy written submission and a supporting affirmation to elaborate his contentions.

D2. Legal principles

22. Section 63A(2) of District Court Ordinance (Cap 336) provides that leave to appeal shall not be granted unless the court is satisfied that the appeal has...

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