Smart International Industrial Ltd. v. Twinkle Step Investment Ltd.

CACV000201/1998

CACV 201/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 201 OF 1998

(On appeal from HCA9883/1997)

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Coram : Hon. Nazareth, V.P., Godfrey & Rogers, JJ.A.

Date of Hearing : 8 December 1998

Date of Judgment : 13 January 1999

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J U D G M E N T

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Godfrey, J.A. :

Introduction

1. This is an appeal from an order of Findlay, J. made on 11 August 1998, dismissing a purchaser's action for return of its deposit, and for other relief, following the failure of the contract between the purchaser and its vendor for the sale by the vendor to the purchaser of a house in Hong Lok Yuen ("the property"). The contract foundered because the vendor denied the purchaser's request to be allowed to inspect the property before completing the purchase. The issue we now have to consider (there are other issues between the parties) is whether in these circumstances the purchaser was entitled, as it did, to refuse to complete the contract.

The facts

2. These may be summarised as follows.

3. The contract (a "provisional" sale and purchase agreement; no "formal" sale and purchase agreement was ever made) was made on 15 June 1997, on a broker's standard form, between the defendant ("the vendor") and the plaintiff ("the purchaser"). The property agreed to be sold was House No. 85, 10th Street, Hong Lok Yuen. The price was $28,140,000. The deposit was $2,814,000 (which was duly paid). The date fixed for completion was 12 September 1997. Vacant possession was to be given on completion. The contract contained the following term (in the English version) :

"All fixtures, decoration and air-conditioner in the property with photographs attached to prove."

4. The parties appear to have fallen out over an overhead projector system and an electrically operated water closet system installed at the property. The purchaser claimed but the vendor denied that these items were included in the sale. The purchaser refused to complete unless it was first afforded an opportunity to inspect the property. The vendor refused it that opportunity, and accordingly the purchaser refused to complete the purchase.

The purchaser's case

5. The purchaser says that, as a matter of general law, a vendor on a sale of land with vacant possession is obliged to co-operate with the purchaser to bring the contract to a successful conclusion, and, in particular, is obliged to allow the purchaser to inspect the property on completion, to satisfy himself that vacant possession will be given. Further, if (as here) the sale includes specified fixtures and fittings, the vendor is obliged to allow the purchaser, on completion, to satisfy himself that the fixtures and fittings are in situ and have not been removed by the vendor. The purchaser accepts that it can point to no authority directly supporting these propositions. It prays in aid, however, an extempore judgment of a county court judge in Wilson County, Ontario, given in chambers, which demonstrates that the judge in that case would have regarded as "ridiculous" the proposition that a purchaser should have to complete the transaction and pay over his money before ascertaining whether or not he had been entitled to terminate the agreement prior to completing it : see In re Harkness v. Cooney (1979) 131 DLR 765. And it points out that, since a purchaser will, or at least may, take the property subject to the right of tenants (and others) who have entered into actual occupation of the property between the date of contract and the date of completion, he cannot properly protect his own interest unless he does inspect the property at completion; and, therefore, he must be taken as having the right to be allowed to do so. How else, the purchaser asks, can the purchaser ensure that he can do what (as is the case) all the conveyancing text-books advise him to do?

The vendor's case

6. The vendor says that the purchaser, if he wants to be able to inspect the property on completion must expressly stipulate for this. No such general right is to be implied from the relationship between vendor and purchaser. If, says the vendor, there was any such general right, it would long ago have been the subject of judicial decision, or at least mentioned in the text-books : but there is, instead, complete silence. So, it says, there is no such general right.

The judgment below

7. The judge accepted the vendor's case. He reasoned as follows :-

"..... The only basis on which the plaintiff failed to complete was that the defendant refused to allow inspection of the property. That could justify the failure only if the defendant had an obligation under the contract to allow inspection.

Mr Chain does not attempt to argue his case on the basis that the defendant had a contractual obligation to allow inspection. He argues that Litton, JA (as he then was) in Pang [Chor Ying Annie v. Lifton Investment Ltd [1979] 2 HKC 57] 'did not proceed on the basis of any contractual entitlement'. This is not right. Any reading of that case reveals that the Court of Appeal decided it on the basis that the vendor was in breach of the contractual obligation to deliver the furniture. Mr Chain seems to see the obligation to allow inspection as an integral part of the completion, independent of any contractual obligations, but, as I see it, the obligation must be contractual, or it does not exist at all.

I can understand, of course, why Mr Chain does not base his case on a contractual obligation. That is because he knows he cannot establish this. There is certainly no express term in the contract placing an obligation on defendant to allow inspection of the property as part of its obligation to complete. And it cannot be implied because it not necessary to do so to give business efficacy to the contract. One cannot even say that such an implied term would be reasonable and practicable. If one were to imply into a contract for the sale of land an obligation resting on the vendor to allow inspection of the property as part of the process of completion, there would be a revolutionary change to the system of conveyancing in Hong Kong. Presently, completion is done by exchanging documents, undertakings and money, usually by messenger, as was contemplated in this case very few face-to-face completions happen. To imply the obligation sought by the plaintiff would mean, in effect, completion would have to take place face-to-face at the property concerned, or, at least, some complex system of communications would need to be put in place, with the purchaser or his agent at the property and his solicitor sitting opposite the vendor's solicitor waiting for the all clear and ready to hand over the money.

The fact of the matter is that, if a purchaser is not content to rely on a pre-contract inspection, which any sensible purchaser would undertake before agreeing to buy, he must stipulate expressly for some further post-contract inspection. The plaintiff in this case did not do that."

Conclusion

8. I am, for my part, disinclined in this case "to decide more than I have to" : see Schindler v. Pigault (1975) 30 P & CR 328, per Megarry, J. at p.333. In that case, a vendor had failed to give access to an intending sub-purchaser. Megarry, J., deciding that the purchaser had been entitled to call the contract off, said this :

"Mr. McDonnell put his submissions under four heads. First, he said that the vendor could not treat the purchaser as being in breach of contract by failing to complete on November 5, since the purchaser's failure was due to the vendor's act or default in failing to give the sub-purchaser access until November 6. He did not contend that there had been any novation, or that the vendor was under any contractual obligation to afford the sub-purchaser access to the property. What he did say was that on each party to a contract there rested what may shortly be termed an implied duty of co-operation in carrying out the bargain, on the footing set out in Chitty on Contracts, 23rd ed. (1968), Vol. 1, pp. 629, 630, and certain of the authorities there cited, to which he added Pagebar Properties Ltd. v. Derby Investment Holdings Ltd. In its application as between a vendor and purchaser of land, he said that just as a vendor must afford reasonable facilities for inspection to a prospective mortgagee who was to provide the purchaser with some of the purchase money, so the principle required a vendor to afford reasonable access to a sub-purchaser who was to provide all the purchase money. This obligation was a fortiori where the vendor had agreed (as in the present case) to transfer the property to the sub-purchaser direct. To this contention Mr. Lightman's answer was that the vendor had no obligation to afford the purchaser any access before completion unless the contract provided for it. Furthermore, even if there were any implied obligation to allow access to the purchaser's prospective mortgagee, a sub-purchaser was very different.

No authority bearing at all directly on the point was put before me, and I do not want to decide more than I have to. Under a contract for the sale of land the vendor may or may not be under an enforceable obligation to allow reasonable access to the property to the purchaser and his prospective mortgagees, sub-purchasers or others with whom he has actual or proposed dealings: that remains for decision."

9. I propose to confine my own opinion to the particular facts of this case. There was no dispute here over the matter of vacant possession. The dispute here concerned the fixtures and fittings included in the sale. I have come to the conclusion that, at any rate to this extent, the purchaser was in the right; that is to say, it was entitled to satisfy itself on completion that it was going to be put into possession of the fixtures and fittings it had agreed to buy. For the vendor to refuse to allow it to inspect the property, as it needed to do for this purpose, was to defeat that entitlement. The entitlement is founded, as the purchaser contends (in my view, rightly) on the duty of the vendor to co-operate with the purchaser in bringing the transaction to a successful conclusion. There is, no doubt, an alternative : to hold that the purchaser, although denied the opportunity to inspect the property on completion in order to satisfy himself that he is getting what he contracted to buy, must nevertheless complete the purchase. If he finds that he has not got what he contracted to buy, he may then sue the vendor claiming damages for breach of contract. Like the Canadian county court judge, I regard this alternative as "ridiculous".

10. For these reasons, I would allow this appeal with costs and send the case (which has come to this court only on this one issue) back to the Court of First Instance for determination of such further issues between the parties as remain to be decided.

Rogers, J.A. :

11. I agree that this appeal should be allowed. I reach the same conclusion as Godfrey J.A. but by a slightly different route.

12. I consider that some confusion has crept into the case because of the use of the word "inspection". On analysis, that might constitute any form of examination and also often connotes examining an object with a view to assessing quality. In this case, there would have been no difficulty if a term as to inspection were written into the contract, but here the contract is silent.

In an open contract does a purchaser have a general right of inspection?

The textbooks

13. The textbooks are in general silent as to whether any right of inspection exists after a contract for the sale of land has been entered into. Our attention was drawn to p.735 of Williams on Vendor and Purchaser, 4th Edition (1925). This is a passage which deals with the execution of the conveyance and the completion of the sale of land. The learned author there cautions that the purchaser must not only receive the duly executed conveyance and ensure that he pays the purchase money to those that he should but goes on to say:-

"He must also ascertain, as we have seen, that there is no obstacle to his entering, immediately after completion, into actual possession or enjoyment of the property sold; and of course this should be done before payment of the purchase-money."

14. That passage comes at the end of the chapter entitled "The Completion of the Contract". Section 2 of that chapter is entitled "Searches and Inquires". There is a cross-reference in the passage which I have cited to the end of section 2 of Chapter 12, namely p.637 where there is a passage as follows :-

"The purchaser should also carefully inspect the whole of the property sold and, if appropriate, have it surveyed prior to completion, and should make inquiry of the tenants or occupiers with respect to the boundaries or other matters regarding the physical condition of the property. For if by reason of any material defect of quantity or otherwise the property sold does not correspond with the description of it given in the contract, or in any representation which induced the purchaser to make the contract, and the error is caused by the innocent misrepresentation of the vendor and not by fraud, the purchaser will be entitled to resist the specific performance of or to rescind the contract, while it remains uncompleted. But when the contract has been fully performed, the purchaser will not be entitled to any relief in respect thereof, except by virtue of an express agreement contained in the contract to make compensation for such errors, or if the defect is really a defect of title and compensation is recoverable under the covenants for title contained in the conveyance, or if the representation amounted to a warranty, collateral to the contract for sale, of the truth of the fact stated."

15. It seems to be clear from the whole paragraph, and indeed the section in the book from which it is taken, that the exhortation that the purchaser should inspect the whole property must be referring to a time after exchange of contracts. The work is, of course, an invaluable authority but it is not clear whether the author considers that the inspection recommended would take place because of the exercise of a legal right, or of a contractual right which should be written into the contract by a prudent conveyancer or simply by reason of the goodwill of the vendor. Certainly the work seems to be silent as to any authority that the purchaser has a general right to require the vendor to allow inspection at any particular time. Perhaps, the absence of authority for the proposition that the purchaser is entitled to inspect is explained by the rarity of the occasions upon which a vendor has ever declined a request for inspection.

16. Paragraphs 38 to 40 of the Law Commission's report on the implication of Boland (Law Commission 115 of 1982) also proceeds upon the basis that inspection can take place prior to completion. Again, however, it is not clear whether that inspection is considered to be by way of right or by way of courtesy between contracting parties.

The decided cases

17. A number of cases have been cited. None of them appears to be conclusive, although, with one notable exception, the preponderance does seem to indicate that there is no general right of inspection after an open contract of sale of land.

18. The decision in the case of Siti & another v. Lee Kay Li, Court of Appeal, Singapore 1996-3 SLR 310, firmly rejected such a notion. Thean, J.A. in delivering the judgment of the Court said that the purchaser's demand to have a joint inspection of the premises:-

"..... was again not justified."

19. In Eighth SRJ Pty Ltd v. Merity, Supreme Court of New Wales Equity Division, 1997, NSW Lexis 317, the position is perhaps less clear because there was a clause in the contract providing for "pre-completion" inspection. Two matters arise from this. The first is that there was clearly here a specific clause relating to inspection and the second is that the Supreme Court drew a distinction between pre-completion inspection and inspection in the period between exchange of contracts and completion.

20. The case of Moore and another v Khan-Ghauri [1991] 32 EG 63 also seems to lead to the conclusion that there is no general right of inspection of property after exchange of contracts. In that case the Purchaser claimed that there had been an assurance that he would be able to inspect and value property for which he had successfully bid at auction. The Court of Appeal, Dillon and Nourse LJJ and Sir David Croom-Johnson, unanimously upheld the conclusion of the trial Judge, Michael Wheeler Q.C., that there were no grounds for establishing the existence of any such term. It has to be noted that the Appellant appeared in person and the decision turns on the facts as to whether any assurance said to have been given by the auctioneer had contractual effect and as to whether the auctioneer had the vendor's authority to give any such assurance. Nevertheless, it would seem to be a decision which would not have been arrived at if a purchaser of property had a general right of inspection.

21. The case of In re Harkness v. Cooney (1979) 131 DLR 765 is the main decision which would indicate to the contrary. However, in my view, it is not necessarily conclusive. In so far as it deals with a general right of inspection, the reasoning appears to be based more on instinctive reaction of the Judge than on an analysis of the law lying behind it. The basis of it seems to be that the Judge thought that it was ridiculous that a purchaser should be required to pay over his money and complete the transaction before ascertaining whether or not he was entitled to terminate the agreement. The right of inspection as broadly referred to in the Cooney decision would be tantamount to a right to fish for grounds to set aside the contract which were unknown to the purchaser. It may seem only a small difference but I do not see that that right exists although, as I shall explain below, I consider that the purchaser is entitled to make sure that he is being given what he contracted to buy before he hands over the money.

22. If the right is simply a right to inspect the property, then it seems to me it can make no difference in principle whether it is exercisable immediately prior to the completion of the contract or at some other time. Like Megarry, J. in Schindler v Pigault and Another (1975) 30 P&CR 328 in the passage which has already been cited from page 333, I would be very hesitant to say that, in the absence of specific provision, a purchaser has a right of inspection of the property. In most circumstances, it is reasonable to assume that the vendor would give the purchaser an opportunity to inspect. Indeed, the failure to do so without giving good reason is a matter which would be liable to attract suspicion.

Simultaneous Performance of the Mutual obligations

23. The real matter of complaint, it seems to me, lies not in the failure on the part of the vendor to allow inspection as such, but in the failure of the vendor to perform its obligation to deliver the property contracted to be delivered at the same time as the purchaser performed its obligations. This might be categorised as a failure to perform the mutual obligation contemporaneously.

24. Prior to the 12th September 1997, the parties had agreed, whether reluctantly or otherwise matters not, that there would be a formal completion, that is that the completion would not be by way of undertakings between the solicitors. Completion was scheduled for 3.30 p.m. on the 12th September at the Vendor's solicitor's office. The letter agreeing to that from the Purchaser's solicitors was apparently faxed at about 11.26 a.m. In that letter, the Purchaser's solicitors made clear that they were agreeing to completion taking place in that manner provided that inspection of the property was allowed prior to the balance of the purchase price being paid. The Purchaser's representatives attended the Vendor's solicitor's office just before 4 p.m., but no point is taken on that because it seems that completion might have taken place any time up until midnight that day. The Purchaser wanted to inspect the property and the Vendor refused inspection prior to completion. It seems that one of the reasons that inspection was demanded was that the Purchaser wished to ascertain that the overhead projector had not been removed. The Purchaser maintained the item was a fixture and therefore was part of the property and, at the very least was sold as part of the property. The parties maintained their positions. The Purchaser's representatives left the Vendor's solicitor's office at about 5.15 p.m. No completion took place that day.

25. When the Purchaser's representatives were sitting in the Vendor's solicitor's office demanding inspection prior to completion and the Vendor's solicitors were refusing that, what the purchaser was doing was demanding that it received vacant possession and the fixtures and fittings at the same time as it paid the money. The Purchaser's position is perhaps made clear in the first letter of their solicitors of the 12th September, that faxed at 11.26 a.m., where it is said :-

"We do not see how it is right that on a formal completion by exchange of the Deed of Assignment and the purchase money, which obligations are concurrent, why at least immediately prior to such exchange, our client has no right to physically inspect the Property just to ensure that he is getting what he bought, afterall, our client is buying the Property and not just a document entitled 'Assignment'."(emphasis in letter)

26. On the other hand, the Vendor's solicitors were demanding that the contract be completed by an exchange of conveyance and the payment of the consideration first and the Purchaser actually receiving vacant possession and the fixtures and fittings thereafter. Their position was perhaps spelt out in what seems to have been their first letter of the 12th September 1997, where it is said :-

"We also re-iterate our legal opinion that since the contract did not provide for right of inspection, your client has no such right to inspect. If indeed your client is worried about any damage to the Property, we write to assured you that our client has not at any time cause any damage thereto and, indeed, your client still have a action against the Vendor after completion if there is indeed such damage made recklessly by the Vendor."(emphasis added)

27. In effect, that would be on the basis that there was an express or implied undertaking that after the payment was made and the conveyance exchanged vacant possession would be given and the fixtures and fittings would be present.

28. There seems to me to be no reason why the Purchaser's rights should be relegated to accepting the undertaking if it is not satisfied with that course. Obviously, the handing over of vacant possession of a property together with the fixtures and fittings cannot be performed in an identical manner to that in which a chattel may be passed, but the principle is the same: vacant possession of the property together with the fixtures and fittings must be given at the same time as the payment is made. In practice, this may only be possible if the purchaser is allowed to be at and have sight of the property in question at the time the mutual obligations are performed by the purchaser on its part paying over the consideration and taking the assignment of the property and the vendor giving the assignment. Looked at in those terms, what would be done at the property in question may be called inspection but in reality it is only the practical manifestation of the exercise of the legal right which is to have the property transferred with vacant possession and with the fixtures and fittings intact at the same time that payment is made.

29. I find comfort in the view that a purchaser is entitled to ensure that he receives what he is buying at the time he pays the purchase price by a passage in the judgment of the Privy Council delivered by Lord Brightman in Edward Wong Finance Co. Ltd. v. Johnson Stokes & Master [1984] 1 A.C. 296 at page 303H. In that passage, reference was being made to what was considered to be the normal method of completing a contract for the sale of land in England. Having stated that the draft for the purchase money would only be handed over against the duly executed grant of the land, the judgment went on :-

"This procedure is merely a reflection, in the context of a contract for the sale of land, of the common-sense principle that, in the absence of an agreement for credit, the purchase money is not handed over to the vendor or anyone else except in exchange for the delivery of the subject matter of the sale, whether it be a loaf of bread or a parcel of land ...."

30. Admittedly, what was in contemplation was the exchange of documents of title simultaneously with the passing of the purchase of money, but as the Privy Council pointed out, the principle is the same no matter what is being sold.

31. Looked at in this way I consider that the decision in the Cooney case is justified.

32. Irrespective of the correctness or otherwise of the Purchaser's contention that it was entitled to receive the house with the projector and water closet apparatus in place, I consider that the Purchaser was entitled to vacant possession and the undisputed fixture on completion. To this end, the Purchaser was entitled to insist on ascertaining vacant possession and the presence of the fixtures at the precise moment of completion and not some time, however shortly, thereafter.

33. In most cases, a vendor will be prepared to allow inspection of the property being sold provided that does not cause inconvenience. Likewise, a purchaser who has inspected the property will normally be prepared to accept appropriate undertakings that the property is in the same condition as when he last saw it; the purchaser would generally be prepared to accept the handing over of the keys to the property as the symbols of the effectual handing over of vacant possession of the property and the fixtures in good condition. If there is any risk no doubt the purchaser would normally be prepared to take that risk and rely on any right to damages. But where trust has broken down, it may be necessary to go back to a more fundamental course of action.

Disruption to Hong Kong Conveyancing Practice

34. If circumstances dictate that completion takes place at the property then I see nothing to prevent that. In the past completion took place at the property sold where the circumstances warranted it, for example, in the sale of public houses in England and Wales. Indeed, the same edition of Williams on Vendor and Purchaser, in referring to the place for completion where it is not specified in the contract says :-

"The purchase shall be completed at such one of the following places as the vendor shall appoint, namely, his solicitor's office, his own residence, on or near the land sold, in London, or at any other place in England where the vendor shall at the time for completion be."

35. This again confirms my view that it would not be unheard of for completion to take place at the premises sold. That is also a conclusion which can be derived from a passage in Barnsley's Conveyancing Law and Practice, 4th Edition, page 416 which cites Report II of the Conveyancing Committee of the Law Society (of England and Wales) as showing that consideration had been given to whether a recommendation should be made that there should be a general practice that completion should take place at the property to ensure that vacant possession is given.

36. Whereas I appreciate that it would be unusual for completion to take place on the premises sold rather than at the solicitor's office, I, for my part, do not consider that the disruption that could be caused to normal conveyancing is necessarily unwarranted. Furthermore since the advent of the ubiquitous mobile telephone I see very little inconvenience if completion were to take place in a solicitor's office whilst the purchaser or his agent were to enter the property and give instructions to the solicitor by telephone. That, incidentally, was a course which seems to have appealed to the Committee of the Law Society according to the passage in Barnsley referred to above.

37. Whilst established conveyancing practice should not be unnecessarily disturbed, sometimes practice has to change. As the Edward Wong case demonstrated, practice which was accepted to be standard and convenient has even been held to be negligent. But, in my view, it would require more than the existence of a common practice or the imposition of some added inconvenience to deny a purchaser the right to ascertain that he is in fact receiving what he has contracted to receive at the same time as he hands over his money.

38. In most circumstances, it could be anticipated that the vendor would agree to reasonable requests for inspection and if there were no suspicious circumstances, a purchaser would probably be content to accept undertakings from a solicitor in the full knowledge that he would be entitled to damages for any fixtures that might have been removed.

39. For these reasons, I would concur with the Order proposed by Godfrey, J.A.

Nazareth, V.-P. :

40. I gratefully adopt the outline of facts given by Godfrey and Rogers JJA.

41. It seems to me significant that no authority has been found which suggests a right in the purchaser to inspect at or immediately before completion, to ensure e.g. that all the fixtures are in place. I find it difficult to believe that, had there been such a right, implied by law as Mr Tang for the purchaser would have it, there would not have been authority for it. Moreover, since it is the purchaser that is seeking enforcement of such a right, it must be for him to establish its existence. However, I do not think those considerations can on their own be taken very far.

42. On the other hand, as can be seen from his reasons as comprehensively quoted by Godfrey JA in his judgment, the judge does state that if one were to imply into a contract for the sale of land an obligation on the vendor to allow inspection of the property as part of the process of completion, there would be a revolutionary change to the system of conveyancing in Hong Kong. And he explains why. While I would not put it in such extreme terms, I agree that there would be a very significant change and, in my view, rather more scope for disputes. In its present form the system of sale, conveyancing and transfer of property seems to work well. At the very least, there is no suggestion that it does not do so particularly in regard to the physical state of the property and of the fixtures. So that it is a fair assumption that these matters do not occasion problems on any significant scale. At any rate, they do not seem to present obstacles to completion.

43. That seems to me to be understandable on the basis that the purchaser will and should have viewed the premises before making an offer, and would ordinarily not have experienced problems with the physical state of the premises or fixtures having changed since viewing. And, if he did, he would be entitled to claim for his loss, if any.

44. In addition to these considerations, we have those identified by the judge and the unnecessary disruption of the present well-established system of house purchase and conveyancing. Furthermore, in those particular cases in which the purchaser may be concerned about the physical state of the premises or the removal of the fixtures by the time of completion, the matter could very simply be dealt with by the incorporation into the sale and purchase agreement, of appropriate provision for inspection immediately before or at completion.

45. The foregoing seems to me to point strongly to the absence of any right of inspection vested in the purchaser by implication of law as contended for by the vendor; and to the necessity, if such a right is desired, for it to be duly provided for in the sale and purchase agreement. That position is reinforced by the only two decisions to which we have been referred, the first in Singapore, and particularly the other in New South Wales (Siti and anor v Lee Kay Li (CA) Singapore 1996-3 SLR 310, 1996 SLR LEXIS 363, 04 September 1996; and Eighth SRJ Pty Ltd v Merity - Supreme Court of NSW Equity Division, 1997 NSW LEXIS 317 13 June 1997). Both of these suggest that a right of inspection only exists if provided for in the sale and purchase agreement or equivalent.

46. As to Re Harkness v Cooney (1979) 131 DLR 765, the County Court Judge there was confronted with a requisition for "an opportunity for a final inspection on the morning of the day of" completion. He prefaced his short extempore judgment with the following comments:

"It was a new point which neither counsel nor I had seen before and on which no case-law directly on the point seems to exist. There is not sufficient time to properly research the matter between now and the date for closing and I choose to give oral reasons now in order not to delay the matter."

He added at p.767:

"The matter of usage and common practice was raised by the purchaser's counsel, but I do not base my decision on that point because of the absence of evidence other than counsel's own statements as to the usage and practice in the area permitting, as a general rule, pre-completion inspection."

His remark in effect that it seems "ridiculous" that the purchaser should have to complete and pay before ascertaining whether he had been entitled to terminate prior to completion, was undoubtedly pertinent even if it did not benefit from regard to the pertinent matter of usage. But it is no authority for a right of inspection being implied by law. Nor am I able to agree that the County Court Judge's comment would be apposite here, particularly in the light of established local conveyancing and sale and purchase procedures and practice.

47. As I see it, therefore, the most likely position is that no right of inspection is implied by law; and it is essentially a matter of policy whether a right of inspection should be provided for by law, or left to the parties to be provided for in their agreement of sale and purchase. It seems to me, therefore, that this is eminently a matter for the legislature after consideration by the Law Reform Commission or some suitable non-judicial quarter.

48. For my part, I can see no special circumstances in this case that would, in my view, warrant interference with the judge's conclusion and the appeal being allowed upon its own particular facts or otherwise.

49. For the reasons I have endeavoured to give, I would dismiss the appeal with an order nisi for costs to the respondent.

50. Given the view of the majority of this Court, the appeal is allowed with a costs order nisi that the appellant is to have its costs of the appeal and below.

Representation:

Mr. Robert Tang, S.C. & Mr. Benjamin Chain (M/s. King & Co.) for Appellant/Plaintiff

Mr. Kenneth Kwok, S.C. & Mr. Louis Chan (M/s. K.C. Ho & Fong) for Respondent/Defendant

Remarks:
On appeal by the Defendant to the Court of Final Appeal: Appeal dismissed with costs. Please refer to FACV000004/1999.

Remarks: On appeal by the Defendant to the Court of Final Appeal: Appeal dismissed with costs. Please refer to FACV000004/1999.