Filipino church’s ownership of Kowloon cinema premises affirmed upon determining its valid exercise of an option to purchase

In JIL Investments Limited v Jesus Is Lord Church Limited [2026] HKCFI 1119, the Court of First Instance ruled that the Defendant, the Hong Kong branch of a global evangelical Christian church founded in the Philippines, after having paid in excess of HK$23 million by way of monthly payments over 12 years, had validly exercised an option to purchase its premises in Sham Shui Po from the Plaintiff landlord for a further HK$1.

In 2003, the parties entered into a Lease and Purchase Agreement (“LPA”) under which the Plaintiff leased the property to the Defendant for a 12-year term.  Upon the Defendant’s settlement of its 144 monthly payments, it would have a right to exercise an option to purchase the former cinema premises.

After making the final monthly payment in late 2015, and despite the Defendant’s indication of its intention to exercise the option, the landlord sued and claimed inter alia that (i) the Defendant exercised the option and tendered the HK$1 fee out of time; and (ii) in any event the alleged recipient of the notice did not have the authority to receive it, having already resigned as a director of the Plaintiff. The Defendant maintained (amongst its various defences and counterclaims) that, upon a proper construction of the LPA terms, the option was validly exercised.

Deputy High Court Judge Jonathan Wong ruled in favour of the Defendant’s construction of the LPA.  Upon finding that the notice had been properly served, new joint obligations arose after the exercise of such option to purchase (finding support from a string of authorities in the U.K.). The Court further found as a matter of fact, in the context of such joint obligations, that the Plaintiff would not have upheld its end of the bargain and would have refused to transfer the premises to the Defendant in any event.   The Plaintiff had, without notifying the Defendant, encumbered the premises in return for a credit facility of HK$30 million merely months before the Defendant was entitled to exercise the option to purchase. 

The Court also found that the Plaintiff failed to challenge the authenticity of the Defendant’s documentation of the notice under RHC Order 27, rule 4 (citing Hu Lan v David Golden [2024] 1 HKLRD 1252); and that the recipient of the notice had apparent authority to validly receive it because he failed to inform the Defendant of his resignation from directorship and, moreover, because he remained a visible and key decision maker within the Plaintiff group.

Accordingly, the Plaintiff’s claim was dismissed.  The finalization of the relief is currently under determination.

Acting for the Defendant were Rede Chambers’ Ambrose Ho S.C. who led Plowman Chambers’ Jacky Lam, instructed by Or & Partners.

The full judgment can be viewed here : https://legalref.judiciary.hk/doc/judg/word/vetted/other/en/2016/HCA002689_2016.docx

See Jacky’s profile here: https://lnkd.in/e2EtHDDk