(a) Katrina owns a 2 storey building called Good Luck Centre in Wan Chai, Hong Kong. Katrina also runs a Korean Restaurant at the Ground Floor of Good Luck Centre. She enters into the following arrangements on 1 February 2017:-

Katrina agrees orally with Ruby, allowing Ruby to run a kiosk for selling cigarette at entrance lobby without charge for two years. The agreement also provides that Ruby will supply cigar to the Cigar Room in the Restaurant. Katrina will retain a key to the kiosk so that her cleaners for the Restaurant can also clean the kiosk daily. Ruby spends $100,000 in the design and refurbishment for the kiosk.

Katrina enters into a written agreement with Martin. In the agreement, it is expressly provided that Martin will run a zen meditation centre at the 1st floor of the Good Luck Centre for four years. The monthly rent of $10,000 is half of the market rent for the 1st floor as determined by a professional surveyor.

Six months later, Katrina sells the Ground Floor together with the Restaurant to Kenneth. Kenneth wants to terminate the agreement with Ruby because he is a non smoker. Martin also wants to terminate the agreement with Katrina because his customers complain that the smells and noises of the Restaurant disturb them when they practice meditation exercise. Advise Kenneth and Katrina.

(b) Adrian and Betty fell in love at the first sight even though both were married. They jointly purchased a flat at Taipo and lived together. Each contributed to half of the purchase price. By reason that Betty was facing divorce litigation with her husband, the flat was registered in Adrian’s sole name. Betty was a successful interior designer. She had carried out extensive home improvements so that the value of their flat had significantly increased.

One year later, while Betty was on a business trip to England for 3 months, Adrian sold the flat to Steve for half of its then market price and absconded. When Betty came back to Hong Kong and found that the flat was sold, she wished to institute legal proceedings against Steve and got back the ownership of the flat.

Advise Betty.

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