Wong Kam Lan v. Well Win Investment Ltd
Read the full judgment text of CACV 208/1995 on BabelCite. This Court of Appeal judgment was delivered on 15 February 1996.
1. The parties to this action appeared before Leonard, J. on various disputes arising from a Provisional Agreement for Sale and Purchase of Flat C on the 1st floor and a carpark in a building known as Villa Crestview at 17 Tung Shan Terrace. The appellant/plaintiff was the purchaser and the respondent/defendant was the developer vendor. I shall call them "the plaintiff" and "the defendant" respectively. The plaintiff's case is that the Provisional Agreement for Sale and Purchase was unenforceabl
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IN THE COURT OF APPEAL 1995, No. 208
------------------- Coram: Nazareth, V.-P., Liu, J.A. and P. Chan, J. in Court Date of Hearing: 11 and 12 January 1996 Date of handing down of Judgment: 15 February 1996 ---------------------- J U D G M E N T ----------------------- Liu, J.A.: 1. The parties to this action appeared before Leonard, J. on various disputes arising from a Provisional Agreement for Sale and Purchase of Flat C on the 1st floor and a carpark in a building known as Villa Crestview at 17 Tung Shan Terrace. The appellant/plaintiff was the purchaser and the respondent/defendant was the developer vendor. I shall call them "the plaintiff" and "the defendant" respectively. The plaintiff's case is that the Provisional Agreement for Sale and Purchase was unenforceable or alternatively repudiated by the defendant. The plaintiff claimed for the return of the $200,000 Temporary Deposit paid upon the signing of the Provisional Agreement for Sale and Purchase and the $198,000 Further Deposit held by the defendant's solicitors as stakeholders pending the signing of a formal Sale and Purchase Agreement. The defendant's solicitors have since paid into the court the said Further Deposit of $198,000 pursuant to an order made in interpleader proceedings, MP 3949 of 1993. The plaintiff further claimed interests, costs and the expense for investigating title. On the plaintiff's alleged wrongful repudiation of the Provisional Agreement for Sale and Purchase, the defendant counterclaimed to forfeit the entire deposit of $398,000. The defendant also counterclaimed damages, interest and costs. Leonard, J found against the plaintiff on all her claims, and judgment was thereupon entered for the defendant with costs. For the plaintiff's repudiation of the Provisional Agreement for Sale and Purchase, damages were ordered to be assessed with interest at the rate of 10% per annum. The defendant was relieved of its obligation to perform the Provisional Agreement for Sale and Purchase and allowed to forfeit the Temporary Deposit of $200,000. The judge left the Further Deposit of $198,000 to be disposed of in the said interpleader proceedings. The plaintiff feels aggrieved and this is her appeal. 2. The plaintiff has filed 18 Grounds of Appeal. Miss Lam, counsel for the plaintiff produces a 57-page written submission. I propose to deal first with the kernel of the submissions in grounds 11-15. For this purpose, I assume against the plaintiff in what would appear to be her only appealable complaint in grounds 1-3 that the Provisional Agreement for sale and Purchase was enforceable in the absence of an exchange of signed copies. No signed copy Provisional Agreement for Sale and Purchase was returned to the plaintiff until after the institution of the action. I also assume in favour of the defendant the following:
I shall return to these other Grounds of Appeal later in my judgment. 3. I would immediately turn to the incident commencing from 3 pm on 30 September 1993. There was no meeting nor was there any telephone communication between 3 - 5 pm that day. Solicitors of the plaintiff had previously taken a great many objections and purported to accept the defendant's alleged repudiation of the Provisional Agreement for Sale and Purchase. But as at 3 pm on 30 September 1993, the defendant nevertheless stood firm on its determination to complete. Whatever was said or done prior to 3 pm 30 September 1993 could only be water under the bridge, but what had transpired before 3 pm would highlight the anxieties the defendant expressed in the correspondence and her requisitions. 4. The Provisional Agreement for Sale and Purchase was signed by the plaintiff in triplicate in the office of the defendant's solicitors in July 1993. These copies were expected to be signed later by the defendant. About a year earlier in July 1992, the defendant as developer sold Flat C on the 2nd floor and carpark No. 6 of Villa Crestview to Madam Chau who executed the assignment by her Attorney. That was the first assignment executed by the developer. A deed of mutual covenant was expected to be, as it is customarily the case, entered into between the developer and the first purchaser. Hence the DMC was executed by the defendant and Madam Chau. Two other parties executed the DMC, namely the mortgagee bank and the defendant in its different capacity of management manager. In November 1992, Flat 2C and carpark No. 6 were reassigned by Madam Chau to the defendant. In the Land Officer Register, the defendant became once again the sole registered owner of the entire property. 5. The conveyancing practice in Hong Kong is that a draft formal Sale and Purchase Agreement will be prepared by the solicitors of the vendor who would, in a multi-storeyed building scheme, send over to the solicitors of the purchaser a pro-forma assignment for engrossment. It is a device to preserve uniformity in documentation. In the latter part of July 1993, such a draft formal Sale and Purchase Agreement was accordingly given by the defendant's solicitors to the plaintiff's solicitors, in which the carpark was erroneously designated as carpark No. 4 instead of the agreed carpark No. 8. Solicitors of the plaintiff did not take any point on the deed of mutual covenant therein referred to, nor the hours for completion therein specified. The same was duly returned with amendments. In early August 1993, solicitors of the defendant in turn sent back to solicitors of the plaintiff a re-engrossment of that draft of formal Sale and Purchase Agreement, taking in all the suggested amendments including the correct carpark space. At the same time, title deeds and documents were dispatched to solicitors of the plaintiff except for a signed copy of the Provisional Agreement for Sale and Purchase. A signed copy came after the commencement of this action. It was said to be an innocent oversight. The next day, solicitors of the defendant confirmed the consensus that the costs provided for in clause 10 were to be modified. In early September 1993, solicitors of the defendant further confirmed an agreed postponement of the completion date to 30 September 1993 and the agreed substitution of a new carpark space No. 3 for carpark space No. 8. The need for a deed of mutual covenant was not questioned. No objection was made to the hours for completion between 9.30 to 5.00. Not a word was uttered over the omission to furnish a signed copy of the Provisional Sale and Purchase Agreement. The parties had conducted themselves on the basis of a binding Provisional Agreement for Sale and Purchase. In mid and the latter part of September 1993, solicitors of the plaintiff raised three requisitions on title. Requisition 1 sought confirmatory evidence on the execution of Madam Chau's Deed of Power of Attorney which was undated. Requisition 2 enquired as to plans or sketches, if any, of the flat and carpark for the assignment with a request for a timely inspection. Requisition 3 solicited a statutory declaration as to the circumstances in which the defendant again became the sole registered owner of the building after the DMC. The defendant's response to the requisitions was that the back sheet of the Power of Attorney carried a date of 25 July 1992 and that plans would be annexed to the formal Sale and Purchase Agreement. It was claimed that with the Land Office entries, no statutory declaration for tracing the transactions which culminated in the reinstatement of the defendant as the sole registered owner, was necessary. But the defendant's solicitors asked the plaintiff's solicitors to ignore the existing DMC and produced a draft new deed of mutual covenant together with a pro-forma Assignment which envisaged the execution of a fresh deed of mutual covenant. 6. By the time these documents reached the plaintiff's solicitors, by their letter of 25 September 1993 solicitors of the defendant gave notice of the vendor's desire to complete the sale and purchase on time as agreed and made time of the essence of the contract. In the meantime, unbeknown to the plaintiff, although her solicitors should perhaps have expected it, solicitors of the defendant sent a draft new deed of mutual covenant to the mortgagee bank for its perusal. The bank refused to execute any new deed of mutual covenant on the legal advice that the subsisting one was valid. Mr Tsang, solicitor of the defendant, kept all this close to his chest and embarked himself upon research as to whether the subsisting DMC was valid. That lasted three days, on 25, 26 and 27 September when finally he decided to consult counsel. On 27 September, solicitors of the plaintiff pressed for the statutory declaration requested in Requisition 3, acknowledging that the existing DMC had been extinguished by the said Reassignment of Madam Chau. On the same day, 27 September 1993, solicitors of the defendant advanced the somewhat startling proposition that by having taken possession on the flat since August, the plaintiff was deemed to have accepted title to the property agreed to be sold. As to this, the judge held against the defendant, from which there is no appeal. Solicitors of the defendant did not impart to the plaintiff the view expressed by the mortgagee bank until 29 September 1993 when for the first time one Mr Lam, a clerk of the defendant's solicitors, disclosed to the plaintiff's solicitors in a telephone conversation that the defendant was seeking counsel's advice as to whether a new deed of mutual covenant would have to be executed. Immediately, solicitors of the plaintiff wrote to the solicitors of the defendant for clarification. 7. Another requisition, Requisition 4, was made on the effect of Madam Chau's Reassignment and the validity or otherwise of the existing DMC. A copy of counsel's opinion was also requested. Requisition for confirmatory evidence of execution of Madam Chau's Power of Attorney was renewed. Immediately following, solicitors of the defendant purported to meet these requisitions by relying on possession having been taken in August and their view as to the true purpose the plans were designed to serve, that is to say, for identification only. Without prejudice, a copy of counsel's opinion was promised to be soon dispatched. As a matter of fact, counsel's opinion had not reached the defendant itself on 29 September 1993. In the same letter, solicitors of the defendant drew attention to their demand that the plaintiff was "bound to complete the purchase on 30 September 1993" and asked for immediate return of the assignment for approval. The plaintiff's solicitors were reminded that the defendant reserved all its right in the matter "including but not limited to forfeit (ing) your client's deposit in respect of the above premises if the balance of purchase price (was) not received by us on 30 September 1993". On the same day, the plaintiff through her solicitors made a demand for the return of all the deposits by 5 pm on 30 September 1993. The plaintiff's demand was ignored and on the same day floor plans of the property were sent by solicitors of the defendant to solicitors of the plaintiff. The plaintiff's solicitors also did not follow up with their demand but continued to deal with the defendant's solicitors who pressed for completion. 8. Came 3 pm on 30 September 1993, a letter to the solicitors of the plaintiff was sent by the solicitors of the defendant, enclosing a new draft formal Sale and Purchase Agreement but without attached plans. It was persisted that the existing DMC was valid. The plaintiff was notified that clause 20 of the formal Sale and Purchase Agreement had been accordingly amended. It was in fact not. A copy of counsel's opinion was also enclosed. Without prejudice, solicitors of the defendant also enclosed a Statutory Declaration dated 30 September 1993 made by one Mr Chan, a clerk to Messrs Lo, Wong & Tsui, verifying the date of execution of Madam Chau's Power of Attorney. Solicitors of the plaintiff were further informed that Madam Chau was in the course of being located for executing a confimatory deed. In its final paragraph, the letter of 30 September 1993 from solicitors of the defendant cautioned in these terms:
9. It is reasonably clear that the plaintiff as purchaser was required to accept the validity of the existing DMC and complete by 5 pm on 30 September 1993. It was envisaged that the plaintiff would at least have to consider the validity of the existing DMC, the new draft formal Sale and Purchase Agreement, the draft pro-forma Assignment and Mr Chan's Statutory Declaration. The plaintiff might also wish to consult counsel considering that the defendant had itself obtained counsel's advice on the mortgagee's view as to the DMC. Enquiry from the mortgagee bank as a party to the DMC might also be regarded as desirable and appropriate. Aside from the correspondence, there was no contact between the plaintiff and the defendant or their respective solicitors. The documents were later discovered to contain a number of errors. There is no evidence as to precisely when these errors and omissions were detected, but their very existence demonstrates the need for caution: a new clause 1(i)(b) was included in the formal Agreement for Sale and Purchase, reserving areas coloured yellow on the Ground Floor Plan for the benefit of the developer defendant; clause 10 re costs liability was left unamended; similarly, clause 20 was not deleted for reinstating the existing DMC; the undeleted clause 20 was also in conflict with part II in the Second Schedule to the document; a possible discrepancy or ambiguity existed between clause 11 and paragraph F in the Third Schedule; a wrong carpark space No. 4 was delineated on the plan. In addition, the plans were arguably intended for more than identification purposes because in the formal Sale and Purchase Agreement, the flat and carpark space were described "as respectively shown and coloured Pink on the 1st - 3rd Floor Plan and the Ground Floor Plan annexed hereto". Except for clause 1(i)(b), the other errors and omissions could have been readily corrected if they had been pointed out to solicitors of the defendant in time. Supply of a correct plan would probably take more time. As I have said, there is no evidence as to when solicitors of the plaintiff came to be aware of these errors and omissions, but these serve to illustrate the importance of allowing reasonable time for perusal of conveyancing documents. Placing to one side these errors and omissions which had not been brought to the notice of the defendant's solicitors before 5 pm on 30 September 1993, the time constraint made it clearly impossible for the solicitors of the plaintiff to advise their client as purchaser on the conveyancing documents, the validity of the existing DMC, counsel's opinion which gave the conclusion in one singular sentence without reference to authorities and Mr Chan's Statutory Declaration. There was hardly time to consult their own counsel or the mortgagee bank. The floor plans sent over on the previous day had also to be examined. The plaintiff might have wished also to consider whether she should wait for the confirmatory deed which was in the course of being procured from Madam Chau by solicitors of the defendant. In the circumstances, the defendant's demand to complete by 5 pm on 30 September 1993 was so oppressive and unreasonable that it was rightly taken as evincing an intention no longer to be bound by the contract. The judge was wrong in not holding the defendant as having repudiated the Provisional Agreement for Sale and Purchase. 10. In effect, the judge did not draw an inference that the plaintiff herself had no intention to complete. Against the background circumstances I have set out, the defendant could not be fairly criticised for lack of co-operative spirit. What he decided was, in outline, this. He recognised the need to sort out "the mess". More time for doing so was evidently necessary. The judge concluded that the plaintiff who " might have been expected to" ask for an extension of time wrongfully chose to treat the defendant's conduct as repudiation. It was held that by not seeking further time for completion the plaintiff herself repudiated the Provisional Agreement for Sale and Purchase. Before us, counsel for the defendant has not produced any authority in support of a purchaser's duty to seek an extension of time to complete in circumstances where "the mess" created by his vendor needs to be resolved. Solicitors of the plaintiff in their letter of 30 September 1993 complained:
This letter reached the solicitors of the defendant at about 5.15 pm. Further time should have been volunteered to solicitors of the plaintiff . The difficulty had not been generated by the plaintiff or her solicitors. Far from it having been for them to seek an indulgence when their client had not been guilty of delay, they should have been provided with reasonable time to prepare for completion in the first place. Mr Mumford, leading counsel for the defendant lent heavily on the decision of Haneet Chandru Vaswani v. Italian Motors (Sales and Services) Ltd., given in Privy Council Appeal No. 57 of 1994 on 12 December 1995. There Mr Vaswani refused to pay the balance of the purchase price and take delivery of a Ferrari. He failed to keep his repeated assurances that he would complete the sale. After he changed solicitors, it was challenged belatedly that the sellers were not entitled to receive the sum which they had demanded. Lord Woolf had this to say at p. 9:
11. In this appeal, we are faced with a decidedly different situation. In the time set for completion, an ultimatum was delivered with threatened serious consequences. The defendant's attitude was wholly inconsistent with any desire to continue with the contract for sale after 5 pm. By its unreasonable conduct, the defendant repudiated the contract. This appeal must, in my judgment, be allowed. 12. I turn then to grounds 1 - 3 of the Grounds of Appeal These three grounds were canvassed in the court below within a narrow ambit viz whether the Provisional Agreement for Sale and Purchase was null and void and unenforceable without an exchange of signed copies. This is not a case parallel to Eccles v. Bryant and Pollock [1948] 1 Ch 93, where the sale was expressly made "subject to contract". It was held in Eccles that in an agreement for sale and purchase made "subject to contract", the contract must prima facie be exchanged before it would become binding. Granted that the signed Provisional Sale and Purchase Agreement in this appeal was only given to the plaintiff after the issuance of the writ, but the plaintiff had throughout proceeded on the basis of a binding contract. The Provisional Sale and Purchase Agreement she had signed would itself constitute a sufficient memorandum. Solicitors of the plaintiff had all along allowed conveyancing documents to be processed. They returned the draft formal Agreement for Sale and Purchase with amendments and accepted for consideration the draft pro-forma Assignment. Legal advisers for the plaintiff even sought to take advantage of the "open contract rules" and they purported to accept a repudiation. That the Provisional Sale and Purchase Agreement was, in these circumstances, unenforceable without an exchange of signed copies is not sustainable. 13. Ground 4 is an alternative contention advanced on the basis that the defendant had, prior to 30 September 1993, repeatedly repudiated the Provisional Sale and Purchase Agreement. The cogent evidence in this case supports the judge's findings that no repudiation on the part of the defendant prior to 30 September 1993 was to be inferred and that on the contrary the defendant had persistently demanded completion up to the very end. Ground 4 therefore fails. 14. Grounds 5 - 6: it is argued that the DMC was extinguished by Madam Chau's reassignment of flat 2C and carpark space No. 6. Miss Lam, counsel for the plaintiff, has not identified the restrictive covenants and easements contained in or created by the DMC for our closer examination. Counsel concedes that parts of the DMC would be unaffected, and that is precisely what the judge held. Therefore, at least part of the DMC as registered in the Land Office would remain an equity affecting the sale and purchase of the property in this case. Further, assume for the moment that the archaic doctrine of seisin is equally applicable to persons other than a freeholder such as leaseholders (see p. 45 the Law of Real Property, Megarry & Wade 5th edn.), by what is known as unity of seisin "a restrictive covenant will be discharged when a person becomes entitled to both the dominant and servient lands to which it relates". See p. 640 Cheshire and Burn's Modern Law of Real Property, 15 edn. The Privy Council expressed the view that in a building scheme, unity of seisin would only suspend a restrictive covenant within the particular area of unity, to be revived on severance. See Texaco Antilles Ltd. v. Kernochan [1973] AC 609, PC at p. 626 B/C - C/D. However, Miss Lam for the plaintiff is at pains to direct our attention to the premise on which this view as articulated by Lord Cross of Chelsea in delivering the judgment of the Board, was based viz. that provided "the whole (development) area has never at any time come into common ownership". Even if the doctrine of seisin should apply to leasehold interests, Texaco affords an illustration that the doctrine would not operate in a development scheme with full rigour. Unity is often spoken of in terms of fusion of the servient tenement with the dominant tenement. By the provisions in the DMC, particularly the definitions of "Owner(s)" and "Second Owner's Unit" in its clause (1), the defendant as developer and Madam Chau as the first purchaser were clearly made tenants in common of all the 214 undivided parts or shares of the building and land, with Madam Chau holding 15/214ths parts or shares and the defendant 199/214ths parts or shares of every speck of dirt in the property. Despite the variation in the ratio of shares in the undivided estate and their respective exclusive right of user, both parties were each entitled to the entirety. For every integral part, the defendant stood to hold 199/214ths parts or shares and Madam Chau 15/214ths. In other words, under the DMC the dominant and servient lands over that same property were concurrently enjoyed by each in ownership and possession. That was the condition which the DMC had created and it is inconceivable that the DMC was capable of being destroyed by the defendant gaining 15/214ths parts or shares more but with the same wholesome entitlement to the same land and building as before in its capacity of a tenant in common. It would appear therefore that a deed of mutual covenant in a multi-storeyed development with respective owners each holding a ratio of the undivided estate as tenants in common would not be extinguished by any one tenant in common becoming thereafter entitled to all the undivided shares in the property. Lastly, recital (5) of the DMC makes reference to an agreement to enter into the deed "for the purpose of making provision for the management, maintenance, insuring and servicing of the land, the building and equipment, services and apparatus therein". The agreement was entered into by the defendant as developer owner, Madam Chau as the first purchaser, the defendant again in a different capacity as management manager and the mortgagee bank. There was no provision in the agreement for the DMC to expire by vesting unity of possession and ownership in either the defendant as developer vendor or Madam Chau as the first purchaser without the consent of the mortgagee bank or the management manager. Their interests were not expressly made so defeasible. Clause 5 of section I in the "Operative Words" of the DMC enables each owner "to sell, assign, mortgage, charge, lease, licence or otherwise dispose of or deal with his share of interest in Land and Building together with (his) exclusive right" of user, but the exercise of such a power is expressly made "subject to and with the benefit of" the DMC. At the time when Madam Chau reassigned the flat and carpark space back to the defendant, she was obliged so to assign "subject to and with the benefit of" the DMC and in fact she did do so in the Reassignment she executed. She reassigned to the defendant and "TO HOLD the same unto the (defendant the flat and carpark space) Subject to the payment of the due portion of Crown rent and the covenants, conditions and provisos contained in the Crown Lease AND SUBJECT ALSO to and with the benefit of the Deed more particularly described in the Schedule hereto". In the Schedule to the said Reassignment executed by Madam Chau on 13 November 1992, the DMC in this case as registered in the Land Office was specified. In view of such an express reservation, the DMC was clearly not to be overriden or extinguished. There is no substance in grounds 5 and 6 of the Grounds of Appeal. 15. By grounds 7 and 8, it is contended that as the Provisional Agreement for Sale and Purchase made no reference to any deed of mutual covenant, the property could not be sold impliedly subject to such a deed. In Goodtex Land Co. Ltd. v. Lung Kwong Emporium Co. Ltd [1993] 1 HKC 645, Godfrey JA, as he now is, held that the absence of reference to any deed of mutual covenant in the title documents would not by itself disable the intended vendor from showing and passing a good title. The judge did not rule out the possibility of implying a usual deed of mutual covenant in a multi-storeyed development. In fact, the judge held that a purchaser's right to exclusive user was to be implied as a matter of commercial necessity, otherwise conveyances on sale of this nature "could not be made to work". See p. 648 E. By parity of reasoning, conveyances on sale in a Hong Kong multi-storeyed development could not be made to work unless they are, by necessary implication, made subject to and with the benefit of a deed of mutual covenant in usual terms. Moreover, the plaintiff had never resisted the introduction of a fresh deed of mutual covenant in almost identical terms. The disagreement only focused on the validity or otherwise of the existing DMC. Grounds 7 and 8 also fail. 16. Grounds 9 and 10 are, we are told, recitation of facts. I have disposed of grounds 11 - 15. Ground 16 is founded on Requisition 2, seeking a statutory declaration for explaining the circumstances in which the defendant had become once more the sole owner of the property. It was asked for so that the presence of two deeds of mutual covenant registered in the Land Office may be readily understood. In view of my finding, ground 16 falls away. 17. Ground 17 complains of the judge's refusal to order a return of the Further Deposit of $198,000. The Further Deposit was paid to the solicitors of the defendant to be held as stakeholders pending completion and that sum has since been paid into court pursuant to an order made in the said interpleader proceedings. Moreover, the plaintiff's application for payment out was refused "at (that) stage pending the application against Mr Justice Leonard's decision". The plaintiff's summons for payment out was itself adjourned sine die with liberty to restore after the determination of this appeal. The plaintiff has not appealed against that refusal and it would seem inconsistent of the plaintiff to ignore that refusal by seeking afresh an order for the Further Deposit to be paid to him in this appeal. 18. Lastly, it is complained under ground 18 of the Grounds of Appeal that the learned judge ought to have proceeded with assessment of damages. In view of my judgment, this ground does not call for a determination. In any case, the judge duly exercised his discretion and it has not been shown that his discretion was exercised improperly or against principle. 19. In the result, I would allow the appeal and set aside the judgment of Leonard J. I would declare that the conduct of the defendant on 30 September 1993 amounted to a repudiation which was accepted by the plaintiff. The plaintiff was thus relieved of her obligation to further perform the Provisional Sale and Purchase Agreement. I would order the return of the Temporary Deposit of $200,000 and declare that subject to orders made in the interpleader proceedings, the plaintiff is entitled to the Further Deposit. The plaintiff is entitled to interest on these sums from the date of writ to judgment at 10% per annum provisionally. The parties be at liberty to make submissions on the rate of interest. I further order the defendant to pay the plaintiff costs for investigating the title to the property comprised in the Provisional Agreement for Sale and Purchase. The issues in these other grounds of appeal are, in the main, relevant to and necessary for the prosecution of the substantive grounds 11 - 15 which I hold in favour of the plaintiff. I would therefore make a costs order nisi that costs of this appeal be costs against the defendant; the plaintiff to have also the costs of the action in the court below; these costs including costs for investigating the title to the property to be taxed, if not agreed. I would also order that the defendant's counterclaim do stand dismissed also with an order nisi for costs to the plaintiff. Chan, J.: 20. I agree with the judgments given by my Lords, the Vice-President and Liu, JA and the orders proposed by them. For the reasons given by them, I too would allow the appeal. Nazareth, V.-P.: 21. Progressively the defendant made it increasingly plain to the plaintiff that completion would have to take place by 5 pm on 30 September 1993. But at the same time the defendant, primarily through its solicitors, embarked upon a course of conduct that by 3 pm on 30 September made it impossible, upon any reasonable view, for the plaintiff to complete by 5 pm (or for that matter, by 1200 hours midnight of that day, also sought to be relied upon by Mr Mumford QC upon the basis of the 'midnight rule'). 22. This is clear from the several material matters detailed by Liu JA, which the plaintiff and her solicitors would have to consider and resolve before completing. Plainly, the plaintiff could not complete in time. That situation was produced by the defendant and its solicitors. 23. Nonetheless, the defendant insisted on completion by 5 pm upon dire threats to otherwise forfeit all deposits; threats that the defendant thereafter did everything possible to carry out to the full. This was in breach of the contract, and compounded by the defendant's insistence and threat to forfeit, in my judgment, clearly evinced an intention, indeed, every determination, in that manner no longer to be bound by the contract. That repudiation, for it could be nothing less, was accepted by the plaintiff. 24. The defendant did not produce any authority for its contention, which was accepted by the judge and renewed before this Court, that the plaintiff should have asked for an extension of time. Without such authority I am unable to accept that view, which seems to me plainly unreasonable. Accordingly, in my judgment, it was not, at least in the particular circumstances of this case, for the plaintiff to apply for an extension of time, and the judge erred in taking that view. If anything, it seems to me that it was for the defendant in the particular circumstances to volunteer an appropriate extension of time. But that said, I prefer not to express any view upon what effect such an offer by the defendant might have had, particularly as the point was not canvassed before us. 25. It follows, in my view, that the appeal must be allowed and the defendant's counterclaim dismissed. I also agree with the costs order nisi proposed. 26. The appeal is accordingly allowed, the order of Leonard J set aside, the defendant's counterclaim dismissed, and there will be a costs order nisi that the plaintiff is to have her costs of the appeal and of the action below, including the costs of investigating the title to the property, the costs to be taxed if not agreed.
Representation: Miss Cissy Lam inst'd by Simon Ho & Co. For appellant Mr E C Mumford, QC Mr C Y Li inst'd by Norman M K Yeung & Co for respondent |
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