VIGERS HONG KONG LTD v. JUNSA DEVELOPMENT LTD

VIGERS HONG KONG LTD v. JUNSA DEVELOPMENT LTD

The lease was induced by a misrepresentation made by the solicitor present (who acted for both parties) that the formal lease permitted use as a sauna; that misrepresentation vitiated the tenant's consent so the lease was rescinded, clause 5(k) could not be relied upon to defeat the misrepresentation claim, and the tenant was entitled to repayment of sums paid under the formal lease and interest; the landlord's counterclaim for repudiation fails.

Citation
VIGERS HONG KONG LTD v. JUNSA DEVELOPMENT LTD
Parties
Plaintiff (hca 5173); 2nd Defendant (hca 9036): VIGERS HONG KONG LIMITED; Defendant (hca 5173); Plaintiff (hca 9036): JUNSA DEVELOPMENT LIMITED; 1st Defendant (hca 9036): APPEARANCE ESTATE LIMITED; 3rd Defendant (hca 9036); Estate Agent: FONG TSE KIN; Third Party: K.B. CHAU & CO. (a firm)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
22 December 2005
Case Number
HCA5173/1998
Procedural Posture
Consolidated Civil Actions Concerning Lease, Misrepresentation, Rescission and Related Claims / Judgment at Trial of Consolidated Proceedings (court of First Instance)
Outcome
Judgment for the plaintiff (Junsa Development Limited); formal lease rescinded for misrepresentation; counterclaim dismissed; costs ordered against the 1st defendant.
Legal Topics
Misrepresentation, Rescission, Entire Agreement Clause, Lease Covenants, User Restrictions, Damages, Interest, Costs
Source Language
EN
Contract Property Tort Equity/remedies Misrepresentation Rescission Entire Agreement Clause Lease Covenants +4 more

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Parties

VIGERS HONG KONG LIMITED

Plaintiff (hca 5173); 2nd Defendant (hca 9036)

JUNSA DEVELOPMENT LIMITED

Defendant (hca 5173); Plaintiff (hca 9036)

APPEARANCE ESTATE LIMITED

1st Defendant (hca 9036)

FONG TSE KIN

3rd Defendant (hca 9036); Estate Agent

K.B. CHAU & CO. (a firm)

Third Party

Procedural Posture

Consolidated Civil Actions Concerning Lease, Misrepresentation, Rescission and Related Claims / Judgment at Trial of Consolidated Proceedings (court of First Instance)

Legal Issues

  1. 1 Whether landlord or its agents represented or warranted premises could be used as a sauna
  2. 2 Whether the provisional tenancy or formal lease contained a term permitting use as a sauna
  3. 3 Whether the tenant executed the formal lease under mistake or as result of misrepresentation

Ratio Decidendi

The lease was induced by a misrepresentation made by the solicitor present (who acted for both parties) that the formal lease permitted use as a sauna; that misrepresentation vitiated the tenant's consent so the lease was rescinded, clause 5(k) could not be relied upon to defeat the misrepresentation claim, and the tenant was entitled to repayment of sums paid under the formal lease and interest; the landlord's counterclaim for repudiation fails.

Court Disposition

Judgment for the plaintiff (Junsa Development Limited); formal lease rescinded for misrepresentation; counterclaim dismissed; costs ordered against the 1st defendant.

Orders

  • Judgment for the plaintiff in the sum of 1353750 HKD
  • Interest on 1353750 HKD from issuance of writ on 3 June 1998 until judgment at 1% above prime rate and thereafter at judgment rate until payment