World Food Fair Ltd and Hong Kong Island Developing Ltd were negotiating for the grant of a lease of premises in a shopping which was owned by the defendant, Hong Kong Island Development Ltd. A cheque for $200,000.00 was paid as an initial deposit. Then, the tenants were allowed to enter the premises and to carry out alternation work. Finally, the decision of the Court of Appeal was overturned by the Court of Final Appeal on the basis that there was in fact no concluded contract.
As the court had to decide whether there was a concluded agreement, the Court of Appeal’s found that the payment of the deposit and going into possession were sufficient acts of part performance which leaded to a concluded contract. The Final Court of Appeal made decision against and overturned the decision of the Court of Appeal. No concluded contract was made because the evidence does not support the existence of interim agreement. The acts of part performance which was critical evidence of The Court of Appeal’s decision was defined as equivocal acts which could not show the intention to contract.
The Court of Appeal decided that "agreement was reached orally as to the identity of the relevant premises, user, rent, rent-free period, deposit, duration of tenancy, commencement date and the identity of the tenant." But the Court of Final Appeal's view point is that there essential terms had "never got beyond the stage of negotiation".
1. commencement of the lease
Mr. Mak’s evidence did not support the commencement on 8 March 1997 which as understood by Mr. Siu and the Court of Appeal. Although the Letter of intent showed that “commencing 8 March 1997 tentatively”, the document was never signed. Also, as Mr. Mak’s knowing, the commencement date was not fixed. The minutes of 9 July 1997 only showed that the kitchen facilities were taken over by plaintiff on 1 August 1997. Moreover, in the subject to contract letter on 15 July 1997, plaintiff he...