A major Hong Kong film studio has been slapped with a multimillion lawsuit for allegedly violating contractual terms when it shut down a cinema earlier this year, in a fresh blow to the industry which has struggled to recover from the economic downturn.
A High Court writ reviewed by the Post on Friday claimed the closure of GH Kai Tak in April constituted a breach of its six-year lease originally due to expire at the end of September this year.
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.
Landlord Merry Growth Development Limited also accused the Golden Harvest arm of failing to give six months’ advance notice to terminate 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million, if the shopping centre could not find a new tenant in the next three years covering the extended period of the rescinded contract.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 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 imposed during the pandemic, when residents were either told to stay at home or theatres were restricted to operating 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.
The day also marked the city’s second “Cinema Day” when discount tickets were offered at 63 venues.
The first cinema day was held last year as part of the “Happy Hong Kong” campaign, a government drive designed to revitalise the economy and promote the city on the international stage.
Hong Kong box office statistics showed cinema revenue stood at HK$1.43 billion last year, up by 25 per cent from HK$1.14 billion in 2022.
But the latest figure was down by about 25 per cent from 2019, when box office receipts reached HK$1.92 billion.
