CAI YI RUI formerly known as CHOI CHI FUNG v. CHATEAU CELLAR LIMITED

CAI YI RUI formerly known as CHOI CHI FUNG v. CHATEAU CELLAR LIMITED

The court found on the balance of probabilities that the seller had obtained oral landlord approval and had provided the Lease to the buyer; the buyer did not prove that the seller made a misrepresentation, fraudulent or otherwise, nor that the seller breached Clause 5 or repudiated the Agreement; accordingly the buyer failed to discharge the burden of proof and the counterclaim was dismissed.

Citation
CAI YI RUI formerly known as CHOI CHI FUNG v. CHATEAU CELLAR LIMITED
Parties
Plaintiff (original Action) / Defendant (counterclaim): Cai Yi Rui formerly known as Choi Chi Fung; Defendant (original Action) / Plaintiff (counterclaim): Chateau Cellar Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
20 September 2016
Case Number
HCA1583/2014
Procedural Posture
Contract Dispute Concerning Sale of Restaurant Business With Counterclaim for Misrepresentation and Rescission / Judgment After Trial on Counterclaim (original Plaintiff's Claim Previously Struck Out Under RHC Order 25 Rule 1 C)
Outcome
Counterclaim by Chateau Cellar Limited dismissed; costs ordered in favour of Cai Yi Rui; original plaintiff's claim had earlier been struck out under RHC Order 25 rule 1C(6).
Legal Topics
Misrepresentation, Fraudulent Misrepresentation, Rescission, Repudiation, Licence Transfer, Assignment of Lease, Damages, Costs
Source Language
EN
Contract Law Tort (misrepresentation/fraud) Property (lease/assignment) Civil Procedure Misrepresentation Fraudulent Misrepresentation Rescission Repudiation +4 more

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Parties

Cai Yi Rui formerly known as Choi Chi Fung

Plaintiff (original Action) / Defendant (counterclaim)

Chateau Cellar Limited

Defendant (original Action) / Plaintiff (counterclaim)

Procedural Posture

Contract Dispute Concerning Sale of Restaurant Business With Counterclaim for Misrepresentation and Rescission / Judgment After Trial on Counterclaim (original Plaintiff's Claim Previously Struck Out Under RHC Order 25 Rule 1 C)

Legal Issues

  1. 1 Whether the seller made a (fraudulent) misrepresentation about landlord consent to transfer the business/lease
  2. 2 Whether oral landlord approval had been obtained and whether the buyer was provided with the Lease and supporting documents
  3. 3 Whether the seller breached contractual obligations (Clause 5) or repudiated the Agreement

Ratio Decidendi

The court found on the balance of probabilities that the seller had obtained oral landlord approval and had provided the Lease to the buyer; the buyer did not prove that the seller made a misrepresentation, fraudulent or otherwise, nor that the seller breached Clause 5 or repudiated the Agreement; accordingly the buyer failed to discharge the burden of proof and the counterclaim was dismissed.

Court Disposition

Counterclaim by Chateau Cellar Limited dismissed; costs ordered in favour of Cai Yi Rui; original plaintiff's claim had earlier been struck out under RHC Order 25 rule 1C(6).

Orders

  • Counterclaim dismissed.
  • Chateau Cellar Limited to pay the costs of defending the Counterclaim to Cai Yi Rui; order nisi to be made final after 21 days.