A High Court writ reviewed by the Post on Friday maintained the closure of GH Kai Tak in April constituted a wrongful breach of its six-year lease originally due to expire at the end of September 2024.
M Cinemas Company Limited, a Golden Harvest subsidiary that operated the venue at Yue Xiu Plaza in San Po Kong, allegedly failed to pay rent and miscellaneous charges since December last year as well as neglected to restore the premises to their original state upon return.
The landlord, Merry Growth Development Limited, also accused the Golden Harvest arm of failing to tender a six-month advance notice for terminating an automatic renewal clause that would have extended the latter’s tenancy by another three years.
The court filing claimed the plaintiff suffered a loss of HK$5.16 million (US$661,870), which could snowball to a sum in excess of HK$17 million, if the shopping centre could not find a new tenant in the next three years covering the extended period of the rescinded contract.
Merry Growth Development is a company controlled by Yue Xiu Enterprises, an investment vehicle of the Guangzhou municipal government.
The local cinema industry has struggled to recover from the effects of four years of strict anti-Covid measures during the pandemic, when residents were either told to stay at home, or theatres were allowed to operate under stripped-down hours and capacities.
Golden Harvest pulled the plug on GH Kai Tak after its last day of operation on April 21, saying its closure came with the expiry of the lease.
Hong Kong Box Office statistics showed annual cinema revenues stood at HK$1.43 billion last year, up 25 per cent from HK$1.14 billion in 2022.
But 2023 revenues were still down by about 25 per cent from 2019, when box office receipts reached HK$1.92 billion.