PROSPEROUS NURSING CENTRE LTD v. CHEUNG YUK YING AND ANOTHER

PROSPEROUS NURSING CENTRE LTD v. CHEUNG YUK YING AND ANOTHER

The Agreement was illegal and unenforceable because it sought to separate licence holding from operation of the residential care home in contravention of the Ordinance and public policy; the Agreement, by its terms and circumstances, excluded an undisclosed principal claim by Yek Tak so Yek Tak had no standing on the counterclaim; Cheung breached an implied term to notify the Social Welfare Department and to protect the licence; Prosperous was entitled to permanent injunction for trespass and mesne profits of HKD 76,000; counterclaims dismissed and restitution of deposit failed on in pari delicto and because consideration (vacating premises) was provided.

Citation
PROSPEROUS NURSING CENTRE LTD v. CHEUNG YUK YING AND ANOTHER
Parties
Plaintiff (original Action); 2nd Defendant (counterclaim): Prosperous Nursing Centre Limited; 1st Defendant (original Action): Cheung Yuk Ying; 2nd Defendant (original Action); Plaintiff (counterclaim): Yek Tak International Holdings Limited; 1st Defendant (counterclaim): Mak Siu Chun
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
10 January 2008
Case Number
HCA3810/2002
Procedural Posture
Civil Contract and Tort (trespass; Contractual Counterclaim) / Judgment at Trial (court of First Instance)
Outcome
Judgment for plaintiff Prosperous Nursing Centre Limited on trespass; permanent injunction granted; counterclaims by Yek Tak and counterclaim-to-counterclaim by Mak dismissed; costs ordered as described.
Legal Topics
Illegality, Undisclosed Principal/agency, Trespass and Mesne Profits, Restitution/money Had and Received, Implied Terms
Source Language
EN
Contract Tort Property Administrative/regulatory (licensing) Illegality Undisclosed Principal/agency Trespass and Mesne Profits Restitution/money Had and Received +1 more

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Parties

Prosperous Nursing Centre Limited

Plaintiff (original Action); 2nd Defendant (counterclaim)

Cheung Yuk Ying

1st Defendant (original Action)

Yek Tak International Holdings Limited

2nd Defendant (original Action); Plaintiff (counterclaim)

Mak Siu Chun

1st Defendant (counterclaim)

Procedural Posture

Civil Contract and Tort (trespass; Contractual Counterclaim) / Judgment at Trial (court of First Instance)

Legal Issues

  1. 1 Whether the contracting party acted as agent for an undisclosed principal
  2. 2 Nature and enforceability of the Agreement for transfer of a licensed residential care home business
  3. 3 Knowledge of expiry of prior tenancy and its attribution

Ratio Decidendi

The Agreement was illegal and unenforceable because it sought to separate licence holding from operation of the residential care home in contravention of the Ordinance and public policy; the Agreement, by its terms and circumstances, excluded an undisclosed principal claim by Yek Tak so Yek Tak had no standing on the counterclaim; Cheung breached an implied term to notify the Social Welfare Department and to protect the licence; Prosperous was entitled to permanent injunction for trespass and mesne profits of HKD 76,000; counterclaims dismissed and restitution of deposit failed on in pari delicto and because consideration (vacating premises) was provided.

Court Disposition

Judgment for plaintiff Prosperous Nursing Centre Limited on trespass; permanent injunction granted; counterclaims by Yek Tak and counterclaim-to-counterclaim by Mak dismissed; costs ordered as described.

Orders

  • Permanent injunction restraining Cheung Yuk Ying and Yek Tak International Holdings Limited from trespass to the Premises
  • Award of mesne profits in favour of Prosperous Nursing Centre Limited: HKD 76,000