DRAGON WORKSHOP LTD AND ANOTHER v. TREASURE EXPRESS INDUSTRIAL LTD AND ANOTHER

DRAGON WORKSHOP LTD AND ANOTHER v. TREASURE EXPRESS INDUSTRIAL LTD AND ANOTHER

The Tenant breached Clause 16 by refusing to sign and assist with the licence transfer (breach date 10 August 2017); as a direct result the New Tenant incurred additional consultancy costs of HK$63,000 and attributable renovation costs of HK$9,000 (total HK$72,000) recoverable from the Tenant; the Landlords may set off that loss against the retained deposits of HK$40,144.73 and the Tenant must pay the balance of HK$31,855.27; the Tenant's counterclaim is dismissed; costs ordered nisi in favour of the Landlords at 85% on a Small Claims Tribunal scale.

Citation
[2022] HKDC 839
Parties
1st Plaintiff: Dragon Workshop Limited; 2nd Plaintiff: Huge Target Limited; 1st Defendant / Plaintiff (consolidated): Treasure Express Industrial Limited; 2nd Defendant: Lai Yu San
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
16 August 2022
Case Number
DCCJ2497/2018
Procedural Posture
Landlord and Tenant Dispute (breach of Lease and Counterclaim) / Judgment (district Court, After Trial)
Outcome
Judgment for the plaintiffs (Landlords) in part; counterclaim dismissed.
Legal Topics
Breach of Lease, Assignment/transfer of Licences, Deposit Retention, Damages, Costs
Source Language
EN
Contract Landlord and Tenant Property Licensing Breach of Lease Assignment/transfer of Licences Deposit Retention Damages +1 more

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Parties

Dragon Workshop Limited

1st Plaintiff

Huge Target Limited

2nd Plaintiff

Treasure Express Industrial Limited

1st Defendant / Plaintiff (consolidated)

Lai Yu San

2nd Defendant

Procedural Posture

Landlord and Tenant Dispute (breach of Lease and Counterclaim) / Judgment (district Court, After Trial)

Legal Issues

  1. 1 Did the Tenant breach Clause 16 of the leases by refusing to assist transfer of food and liquor licences?
  2. 2 If breach, did the consultancy fee of HK$78,000 arise from that breach?
  3. 3 If breach, did the renovation fee of HK$35,000 arise from that breach?

Ratio Decidendi

The Tenant breached Clause 16 by refusing to sign and assist with the licence transfer (breach date 10 August 2017); as a direct result the New Tenant incurred additional consultancy costs of HK$63,000 and attributable renovation costs of HK$9,000 (total HK$72,000) recoverable from the Tenant; the Landlords may set off that loss against the retained deposits of HK$40,144.73 and the Tenant must pay the balance of HK$31,855.27; the Tenant's counterclaim is dismissed; costs ordered nisi in favour of the Landlords at 85% on a Small Claims Tribunal scale.

Court Disposition

Judgment for the plaintiffs (Landlords) in part; counterclaim dismissed.

Orders

  • The 1st and 2nd defendants (Treasure Express Industrial Limited and Lai Yu San) do pay the 1st and 2nd plaintiffs (Dragon Workshop Limited and Huge Target Limited) HK$31,855.27.
  • Pre-judgment interest at 1% above prime rate to accrue from the date of the Writ of Summons in DCCJ No 2497 of 2018.