JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS

JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS

The formal lease was signed by the plaintiff in reliance on a misrepresentation by Lau (the solicitor present who also acted for the landlord) that the lease permitted sauna use; that misrepresentation induced execution and therefore the plaintiff was entitled to rescind the formal lease notwithstanding clause 5(k); accordingly the plaintiff recovered the sums paid under the formal lease ($1,353,750) with interest and the landlord's counterclaim was dismissed.

Citation
JUNSA DEVELOPMENT LTD v. APPEARANCE ESTATE LTD AND OTHERS
Parties
Plaintiff: Junsa Development Limited; 1st Defendant: Appearance Estate Limited; 2nd Defendant / Plaintiff in HCA 5173 (consolidated): Vigers Hong Kong Limited; 3rd Defendant: Fong Tse Kin; Third Party / Solicitors: K.B. Chau & Co.
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 December 2005
Case Number
HCA9036/1998
Procedural Posture
Civil Consolidated Actions Concerning Lease, Misrepresentation and Related Claims / Judgment After Trial
Outcome
Judgment for the plaintiff (Junsa Development Limited) for recovery of sums paid under the formal lease; landlord's counterclaim dismissed; costs ordered in favour of plaintiff (order nisi).
Legal Topics
Misrepresentation, Rescission, Entire Agreement Clause, Lease Interpretation, Remedies, Return of Deposits, Interest, Zoning and Licensing
Source Language
EN
Contract Law Property Law Tort (misrepresentation/negligence) Administrative Law (planning/zoning) Misrepresentation Rescission Entire Agreement Clause Lease Interpretation +4 more

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Parties

Junsa Development Limited

Plaintiff

Appearance Estate Limited

1st Defendant

Vigers Hong Kong Limited

2nd Defendant / Plaintiff in HCA 5173 (consolidated)

Fong Tse Kin

3rd Defendant

K.B. Chau & Co.

Third Party / Solicitors

Procedural Posture

Civil Consolidated Actions Concerning Lease, Misrepresentation and Related Claims / Judgment After Trial

Legal Issues

  1. 1 Whether landlord or its agents represented or warranted that premises could be used as a sauna
  2. 2 Whether provisional tenancy contained a term permitting sauna use
  3. 3 Whether formal lease was entered into under mistake of fact

Ratio Decidendi

The formal lease was signed by the plaintiff in reliance on a misrepresentation by Lau (the solicitor present who also acted for the landlord) that the lease permitted sauna use; that misrepresentation induced execution and therefore the plaintiff was entitled to rescind the formal lease notwithstanding clause 5(k); accordingly the plaintiff recovered the sums paid under the formal lease ($1,353,750) with interest and the landlord's counterclaim was dismissed.

Court Disposition

Judgment for the plaintiff (Junsa Development Limited) for recovery of sums paid under the formal lease; landlord's counterclaim dismissed; costs ordered in favour of plaintiff (order nisi).

Orders

  • Judgment for plaintiff Junsa Development Limited in the sum of HKD 1,353,750
  • Interest on HKD 1,353,750 from issue of writ (3 June 1998) until judgment at 1% above prime and thereafter at judgment rate until payment