Yang Dandan v. Hong Kong Resort Co Ltd

CACV 247/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 247 OF 2015

(ON APPEAL FROM HCA NO. 1787 OF 2010)

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BETWEEN

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J U D G M E N T

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Hon Lam VP:

1.I have read the judgment of Kwan JA in draft and I agree with it. For the reasons given by Her Ladyship, the appeal must be dismissed. I can understand the Plaintiff’s annoyance when she found out that the height of Amalfi was not as significantly different from the height of her duplex apartment at Chianti as she expected. But it does not follow that she had a viable cause of action against the Defendant.

2.As Kwan JA explains in her judgment, based on the Brochure alone, the Plaintiff does not have a cause of action based on misrepresentation.  When the claims were brought, the Plaintiff also relied on the alleged oral representation by the sales representative of the Defendant.  That claim, if established, would put a different complexion to her case.  However, the judge rejected her evidence in that regard and there is no appeal in that respect.

3.On its own the Brochure contained many statements which could only be regarded as sale puffs.  The Plaintiff relied on the description of Amalfi as a mid-rise development in contrast with the description of Chianti as blocks of high-rises.  She then drew the conclusion that the difference in height should not have impacted on the “unobstructed seaview” her apartment should enjoy.  For the reasons given by Kwan JA, this is not a conclusion one could reasonably come to even if the statements were read in context and there was therefore no representation in the Brochure to such effect.  In light of the facing of the Plaintiff’s unit and the view it commands (as shown in the video), a reasonable reader could not infer from the Amalfi Description that the unit would enjoy an unsurpassed seaview of the Victoria Harbour as submitted by Mr Tong SC.

4.A further difficulty in the Plaintiff’s case is that as a matter of law there could not be any representation of future fact or intention.  If a person wishes to rely on a statement about future fact or intention, he or she needs to ensure that such statement is incorporated into the contract or actionable as a collateral contract.  Short of that, except in the case of misrepresentation of present intention on the part of the representator, the law does not regard such statements as actionable.  In the present appeal, the Plaintiff did not run her case on any of these bases.

5.On the other reasons given by Kwan JA, I content to say I respectfully agree with her analysis and have nothing to add.

Hon Kwan JA:

6.The plaintiff, Madam Yang Dandan, brought this action against the developer of Discovery Bay, Hong Kong Resort Company Limited, claiming damages for misrepresentation under section 3(1) of the Misrepresentation Ordinance, Cap 284 (“the MO”).  In December 2007, she purchased a duplex apartment on 20^th and 21^st floors of Block 5 (“the Property”), being the topmost floors in the block of a residential development known as Chianti in Discovery Bay.  From March 2008 to February 2011, the defendant built another residential development, Amalfi, to the east of Chianti.  The plaintiff claimed that Block 1 of Amalfi has blocked the easterly and north-easterly view of the Property such that it no longer enjoys unobstructed sea view.  She alleged misrepresentation in the floor plan brochure (“the Brochure”) and by a sales staff of the defendant.  The action came before Deputy High Court Judge Kent Yee in April and May 2015.  After a ten-day trial, he dismissed her claim in the judgment handed down on 2 October 2015.  This is her appeal.

The background

7.The relevant background, as taken from the judgment or the evidence given at trial, may first be related as follows.

8.The plaintiff and her husband are highly educated people.  She read a course leading to a PhD in optoelectronics and her husband has a PhD in electrical engineering.  They reside in Canada primarily.  In late 2007 the plaintiff looked for a property in Hong Kong as an investment for the purpose of applying for residence in Hong Kong.  And as a result of her acquisition of the Property, she became a permanent resident of Hong Kong.

9.The defendant is the only developer of Discovery Bay.  Chianti was a new development in 2007.  It comprises five blocks of different height and orientation. Blocks 1 and 2 are perpendicular to Blocks 3, 5 and 6 so they form an L-shape.  There is no Block 4.  Block 1 has 24 storeys, Block 2 has 21 storeys, Block 3 has 18 storeys, Block 5 has 17 storeys and Block 6 has 16 storeys.  In the Sub-Deed of Mutual Covenant for Chianti dated 27 December 2006, Chianti was described as “high-rise buildings”.

10.Block 5 is sandwiched by Blocks 3 and 6.  There are no 4^th, 13^th and 14^th floors in Block 5.  So although the Property is on the 20^th and 21^st floors, it actually sits on the 16^th and 17^th storeys.

11.On the first floor of the Property (20^th floor), there is a balcony of 84 sq ft in area.  On the second floor (21^st floor), there is a balcony of 155 sq ft in area.  Chianti has several styles of duplex units and the Property is of the style known as verandah duplex.  There are a total of five verandah duplex apartments in Chianti.

12.In terms of view, the Property is south facing with an open view of the Central Park of Discovery Bay.  On the right (the west) there are mountains and on the left (the east) there is a sea view.

13.The construction of Amalfi commenced only after the completion of Chianti. In June 2007, the first building plan for Amalfi was prepared for submission to the Building Authority.  Its foundation work was commenced in March 2008 and construction was completed in February 2011.

14.Amalfi was known as the phase 14 development at the material time in late 2007.  It consists of three blocks, each of which has 16 storeys.  Amalfi One is closest to Chianti and is to the east of Block 6.

15.The Outline Zoning Plan (“OZP”) dated 1 February 2005 is applicable to both Chianti and Amalfi.  In the OZP, both Chianti and Amalfi had the same stipulated maximum building height of 18 storeys.  However, owing to the difference of the landscape of the sites, the mPD (metres above Hong Kong Principle Datum) are different for each development.  The maximum permissible height of Chianti was 101 mPD whereas that of Amalfi was 103 mPD.  The actual mPD of Chianti upon completion is 97.7 mPD and that of Amalfi is 92.9 mPD.

16.The judge had a site visit of the Property on the first day of trial.  He gave this succinct description of the impact on the view after the construction of Amalfi in §29 of the judgment:

“From the interior of the Property on both floors, the view remains the same. When one enters in the middle of the terrace[1] facing straight ahead, Amalfi One appears within the 20 odd degrees on the left. The sea view on the left is blocked to that extent and not completely blocked. Other than that, the predominant southern view of Central Park remains intact.”

17.The above description accords with a video of the vista of the Property seen by this court.  Until Amalfi was built, on a sunny day with good visibility, the plaintiff would be able to see from her upper floor balcony to the east a section of Victoria Harbour (from IFC Two in Central to the western and southern parts of Hong Kong Island) in the background and on her right Yee Pak Wan (二白灣)[2].  After the construction of Amalfi, there is no impact on the view from inside the apartment, as noted by the judge and accepted by the plaintiff[3].  And as there is a wall dividing the upper floor balcony of the Property from the adjacent apartment in Flat C to the left, there has always been a limit to which one can view the sea on the eastern side from the upper floor balcony.  It is only when one stands on the edge and leans out of the upper floor balcony, that part of the sea view is blocked by Amalfi One[4].  A large section of the body of water, Yee Pak Wan, can still be seen in the foreground which is more to the right, but not the western part of Victoria Harbour in the background which is more to the left[5].

18.In §108 of the judgment, the judge remarked that whilst he did not doubt the genuineness of the plaintiff’s frustration with the loss of the sea view, to his mind it is “very minor”.

19.The plaintiff entered into a memorandum for sale (“the Memorandum”) with the defendant on 8 December 2007 for the purchase of the Property at $18,880,000, with a rebate of $1,671,000.  The sale and purchase agreement (“the Agreement”) was signed on 28 December 2007 and the assignment was executed on 28 January 2008.

20.The plaintiff first raised her complaint about the loss of sea view by the letter of her solicitors dated 20 September 2010.  She demanded the defendant to either repurchase the Property from her at the contractual price or pay her compensation for her loss of sea view.  This was followed by a writ issued in 2010.

The judgment below

21.The judge identified three core issues before him and resolved them in this order:

(1) whether there were actionable misrepresentations;

(2) if so, whether the plaintiff is contractually estopped by clause 16 of the Memorandum and/or clause 34 of the Agreement from making her claim in misrepresentation;

(3) if there is no contractual estoppel arising, whether the plaintiff has proved her loss or damage.

22.The judge resolved all three issues in favour of the defendant.

23.On issue (1), he held there was no actionable misrepresentation in respect of the alleged written representation in the Brochure.  As for the alleged oral representation by the defendant’s sales staff, he was not satisfied it was actually made and in any event there was no actionable misrepresentation.  There is no appeal against the holding on oral misrepresentation.

24.Having concluded there was no actionable misrepresentation, it was not strictly necessary for the judge to determine issues (2) and (3).  He nevertheless considered them and gave his views briefly.

25.On issue (2), the judge applied the law on contractual estoppel in the English cases (Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd [2006] 1 CLC 582; JP Morgan Chase Bank & Ors v Springwell Navigation Corp [2010] 2 CLC 705), which have been followed in two decisions at first instance in Hong Kong (DBS Bank (Hong Kong) Ltd v San-Hot HK Industrial Co Ltd & Anr [2013] 4 HKC 1; DBS Bank (Hong Kong) Ltd v Sit Pan Jit, HCA 382/2009, 2 April 2015).  He held that clause 16 of the Memorandum was not aimed at limiting or excluding liability and so section 4 of MO is not engaged.  Even if section 4 is engaged, he was of the view that clause 16 would satisfy the reasonableness requirement in that provision.  Hence, the plaintiff would be precluded from claiming in misrepresentation by reason of contractual estoppel arising from clause 16.  As for the entire agreement clause in clause 34 of the Agreement, the judge held that this provision cannot preclude the plaintiff from making a claim in misrepresentation, following the decision of the Court of Appeal in Glory Gold Ltd v Star Play Development Ltd [2008] 2 HKLRD 416.  There is no cross-appeal in respect of the holding that clause 34 is not effective to preclude a claim in misrepresentation.

26.On the issue of damages in (3), having noted the plaintiff’s loss as pleaded is the loss of an opportunity to purchase another property with a permanent and unobstructed sea view in Discovery Bay or elsewhere in Hong Kong with the budget she used to pay for the Property (about $17 million), the judge held that the alleged loss of a chance is not established on the evidence before him.  The plaintiff failed to prove that such an alternative property was available at the time and that it was within her budget.

27.On appeal, Mr Ronny Tong, SC[6] sought to challenge the judge’s findings on all three issues.  Like the judge, our focus at the hearing was on actionable misrepresentation.

The Brochure

28.It is not in dispute that the alleged misrepresentation in the Brochure must be read in context.  I will first set out the relevant parts of the Brochure.

29.As the Brochure does not appear to have page numbers, I will use the page number in the appeal bundle for ease of reference.

30.On page 362, Chianti is described as “Premium Waterfront  Residence at Discovery Bay” and in Chinese “矜貴  愉景灣稀世海隅豪宅”.

31.On page 363, a map of Discovery Bay is given, showing the site where Chianti is, and to the east of Chianti a “Residential/Other Development Area Under Planning” including facilities under planning which made up a “Coastal Leisure and Entertainment Development Concept”.  The facilities under planning are denoted with an asterisk and they are an indoor recreational centre, community centre, public recreational centre, shopping arcade, luxurious hotel and transport terminus.  There also appear these qualifying words at the bottom right: “All information and photos are for reference only.  The Developer reserves the right to make modifications and changes to the future development without prior notice.  The plans are subject to the final plans approved by or record plans accepted by The Buildings Department and The Lands Department.”

32.On page 365 is the Master Plan of Chianti, showing the layout of the development and the five blocks that made up the development.  The site immediately to the east of Chianti is marked with these words: “Mid-rise Residential Development Area Under Planning” and in Chinese “籌劃中中座發展項目”.  The site immediately to the south of Chianti is marked with these words: “Garden House Residential Development Area Under Planning” and in Chinese “籌劃中花園別墅住宅發展項目”.  The layout of the facilities under planning stated on page 363 is shown in greater detail, and the facilities are again denoted with an asterisk.  At the bottom right, these qualifying words appear: “All information and photos are for reference only.  The Developer reserves the right to make modifications and changes to the future development without prior notice.  The overall design, height and colour scheme of the buildings and The Development are subject to change and final approval by the relevant Government Departments and Authorities.  The images have been enhanced by computer graphics and are for reference only.  All plans are subject to the final plans approved by or record plans accepted by The Buildings Department or The Lands Department.”

33.On page 366, there are these words: “Chianti Possession極級精萃”, “Vista·稀世視野”.

34.On page 367 is a map of the five blocks of Chianti showing the units A to G to be found on each floor in each block.  On the top left corner, these words appear:

“Chianti, five blocks of waterfront high-rises, are the gem of Discovery Bay.

Unique features:

• Ultra-wide balconies or terraces and full-height windows in all units

• Units capitalise on the amazing Disneyland fiesta*, Central Park* or the breath-taking Victoria Harbour*

• Units are east or south facing* …

* Applicable to certain units only.

尚堤5幢臨海大宅，鑄造當代經典，價值出眾。

尚堤獨家建築特色：

• 所有單位特設廣闊露台/平台及落地大窗

• 單位眺望中央公園園景*、維港或廸士尼煙花盛景*

• 單位位處東面或南面座向*，…

*只適用於部份單位。”

35.In the bottom right, there appear these qualifying words: “All information and photos are for reference only.  The Developer reserves the right to make modifications and changes to the future development without prior notice.  The overall design’s height and colour scheme of the buildings and The Development are subject to change and final approval by the relevant Government Departments and Authorities.  The images have been enhanced by computer graphics and are for reference only.  All plans are subject to the final plans approved by or record plans accepted by The Buildings Department or The Lands Department.”

36.On page 407, there appear the words “Outline Zoning Plan” and a part of the Discovery Bay-Outline Zoning plan dated 1 February 2005 is shown.  It is also stated that the latest Outline Zoning Plan at the date of the printing of the sales brochure is available for free inspection during normal office hours at the sales office.

The misrepresentation as pleaded and argued

37.Having given the context of the alleged misrepresentation in the Brochure, I come to the pleading of the misrepresentation.  The plaintiff has twice amended the statement of claim and given answers to particulars in her pleadings several times at the defendant’s requests.  So she has had more than ample opportunity from November 2010 to the time of the trial in April 2015 to plead her case on misrepresentation accurately.

38.There is no misrepresentation in law in the case of mere exaggerated praise by a vendor of his wares as the vendor is entitled to assume that his statement will be construed as mere puffing (Clerk & Lindsell on Torts (21^st ed) at §18-16).  It has been accepted by those acting for the plaintiff that these statements in the Brochure set out earlier are mere sales talk and puffs[7]: the words on page 362; the words on page 366; and some of the statements on the top left corner of page 367.  It is the plaintiff’s contention that the court should take into account the customary commercial puffs and sales talk as the “core context” for the understanding of the meaning of the alleged misrepresentation in the Brochure[8].

39.The alleged misrepresentation is the words “Mid-rise Residential Development Area Under Planning” (in Chinese “籌劃中中座發展項目”) on page 365[9].  This is referred to in the judgment as the “Amalfi Description”.  I will also adopt this term.

40.Further or alternatively, another misrepresentation is these words on page 367, “Chianti, five blocks of waterfront high-rises”[10] (in Chinese “尚堤5幢臨海大宅”).

41.It is pleaded that the Amalfi Description was false in that the defendant represented that the development in Phase 14 was “Mid-rise Residential Development Area”[11].  Alternatively, the statement that Chianti consisted of “five blocks of waterfront high-rises” was false if the development in Phase 14 could properly be described as “mid-rise residential development”[12].  Particulars of falsity were given and they included the following:

“A reasonable-minded reader of the brochure in the position of the Plaintiff would understand that there was a significant enough contrast in heights between the buildings in Chianti and those in Phase 14 with the use of the contrasting descriptions “high-rises” and “mid-rise residential development”, otherwise the difference of descriptions serve no sensible purpose.”[13] (Emphasis supplied)

“On either scenario, it was a misrepresentation in that it conveyed to the Plaintiff the understanding that the Property which she intended to purchase would be significantly higher than the top floor apartment of the mid-rise residential building on Site N1d/e[14] so that such building would not obstruct the seaview she enjoyed in the Property.”[15] (Emphasis supplied)

42.That was the main plank of the plaintiff’s case as presented to the judge, namely, that if Block 5 and Block 6 of Chianti (consisting of 17 and 16 storeys respectively) are described as high-rises, the Amalfi Description cannot be correct as each of the three blocks of Amalfi consists of 16 storeys too[16].

43.There is further pleading of the meaning of the misrepresentations as “conveyed to a reasonable person in the position of the Plaintiff” in these terms:

“(a) those living on the top floor units of Chianti can enjoy unobstructive [sic, unobstructed] view of the sea though the view of the sea or harbour in question may naturally vary, depending on the orientation of the flats, and

(b) the Defendant as the developer has the intention to provide those living on the top floor units such seaview continuously.”[17]

44.And finally, there is pleaded an implicit representation in these terms:

“Having regard to the fact stated above that the Defendant is the developer of the entire Discovery Bay, the conduct of the Defendant mentioned above discloses also an implicit representation that it was and has always been ready, willing and able to develop the rest of Discovery Bay yet to be developed in such a manner so as to enable the owner of the top floor units of Chianti to enjoy the seaview continuously in future.”[18]

45.To sum up, the meaning of the alleged misrepresentation to a reasonable person in the position of the plaintiff, as pleaded and argued below, is that those living on the top floor units of Chianti would enjoy unobstructed sea view and the defendant had the intention of providing the top floor units of Chianti unobstructed sea view continuously in future.

46.Mr Tong, who did not appear for the plaintiff below, sought leave to further amend the Notice of Appeal. Some of the proposed amendments, which are opposed by Mr Benjamin Yu, SC[19], relate to the contention that the judge should have found in the overall context of the Brochure a representation which was untrue in that the Property would continue to be a “unique development with unsurpassed seaview”.  In his skeleton arguments, Mr Tong sought to advance a case that the representation as understood by the plaintiff on reading the Brochure was that “(a) the Property commands unsurpassed seaview of Victoria Harbour; (b) such view would not be blocked by the “mid-rise residential development” in front of the Property which was also being built by the defendant”.

47.As pointed out by Mr Yu, the case that the misrepresentation was for an “unsurpassed seaview of Victoria Harbour” was not pleaded and was not the way the case was argued below.  I agree with Mr Yu the word “unsurpassed” is embarrassingly vague and lacking in particularity.  The plaintiff was cross-examined at length on her understanding of the misrepresentation as pleaded (an unobstructed sea view she would be able to enjoy continuously) and had accepted it was very possible that part of the sea view would be blocked by Amalfi[20].  The defendant would be prejudiced by the proposed amendment in that it would be denied the opportunity to cross-examine her on the new case of an “unsurpassed seaview of Victoria Harbour”.  The experts who provided valuation reports did so on the basis of the pleaded case that there was loss of a chance of purchasing another property with a permanent and unobstructed sea view[21], not the criteria of a “unique development with unsurpassed seaview”.  It would be unfair to allow the plaintiff to move the goal posts on appeal.

48.Mr Tong submitted in reply that the words “unsurpassed seaview” in the draft amendments are not in quote.  It was just a submission that in the context of the Brochure as a whole, the misrepresentation in the Brochure conveyed to the plaintiff the meaning that she would be able to see Victoria Harbour and that because Amalfi was a mid-rise development, it would not block her view.

49.I am not minded to allow the proposed amendment mentioned above.  If the intention of Mr Tong is not to put forward an unpleaded case on misrepresentation, the proposed amendment is simply unnecessary.

The main arguments on actionable misrepresentation

50.I turn to consider the arguments on actionable misrepresentation.

51.The judge mentioned at the outset that the plaintiff’s case on misrepresentation is “fraught with difficulties”[22].  I am inclined to agree.  In my judgment, there are three main reasons why there was no actionable misrepresentation and the plaintiff’s claim must fail on that basis alone.  These reasons are: firstly, the misrepresentation cannot reasonably be understood to have the meaning as alleged; secondly, it is not a statement of fact but a statement of future intention; and thirdly, it is not a statement on which the representee was entitled to rely.

The meaning of the misrepresentation as alleged

52.In §37 of the judgment, the judge quoted this pertinent passage from Misrepresentation, Mistake and Non-Disclosure by Cartwright (3^rd ed)[23]:

“3-06 Objective Interpretation. … Sometimes, however, there is some doubt about the meaning which was, or might have been, conveyed to the representee. In such cases the courts need a test to interpret the words or conduct. The test which is generally applied in the construction of the communications between the parties when considering whether a contract has been formed is objective, viewing the communication from the perspective of a reasonable person in the position of the recipient of it. Applied by analogy to misrepresentation, the test is whether: (a) the words or conduct in fact led the representee to believe the alleged false fact, and (b) it was reasonable for the representee to believe it from the words or conduct as he perceived them. Where there is a dispute over the meaning of a statement, this is the approach the courts should use in determining whether it is to be treated as a misrepresentation. In applying this test, the characteristics of the representee are important. “The court may regard a sophisticated commercial party who is told that no representations are being made to him quite differently than it would a consumer.”[24] Where the alleged representation was express, the question is how a reasonable person in the claimant’s position would have understood the words used. Where it is alleged that there was an implied representation, the question is what a reasonable person would have inferred was being impliedly represented by the representor’s words and conduct in their context.”

53.Mr Tong disputed the correctness of the law as stated in the above passage, claiming that no authorities were referred to by the learned author in support of his propositions.  That is plainly not so.  The authorities cited by the author included Smith v Chadwick (1884) 9 App Cas 187 at 190; MCI WorldCom International Inc v Primus Telecommunications plc [2004] EWCA Civ 957; and Raiffeisen Zentralbank Osterreich AG v Royal Bank of Scotland Inc [2011] 1 Lloyd’s Rep 123.  The last-mentioned case was cited by both parties here, although each had relied on different parts in the judgment of Christopher Clarke J.

54.As explained by the author in footnote 15 to §3-06, there are other related issues which require an approach different from the objective interpretation, such as: when the representor’s mind is relevant as in a deceit claim, and the court is concerned with the meaning which the representor intended his words or conduct to convey; or the inquiry as to whether there was reliance on the statement, in which case the court may look only to the actual response by the representee to the statement, not whether his response was reasonable.  There is no conflict between the law as stated in §3-06 of Misrepresentation, Mistake and Non-Disclosure by Cartwright and the other extracts cited by Mr Tong in Spencer Bower & Handley on Actionable Misrepresentation (5^th ed) at §§11.05 and 11.09 (where the representor’s mind is relevant in a deceit claim) and Clerk & Lindsell on Torts at §18-37 (also concerned with the representor’s mind in a deceit claim) and §18-38 (which deals with the claimant’s reliance on the statement in a deceit claim).

55.Mr Yu drew our attention to these relevant paragraphs in Raiffeisen Zentralbank:

“Making a representation

81. RZB must show that RBS made to it a statement which amounts to a representation, that is to say a statement of fact upon which RBS was entitled to rely. Whether any and if so what representation was made has to be “judged objectively according to the impact that whatever is said may be expected to have on a reasonable representee in the position and with the known characteristics of the actual representee.” MCI WorldCom International Inc v Primus Telecommunications Inc [2004] EWCA Civ 957, per Mance LJ, para 30. …

82. In the case of an express statement, “the court has to consider what a reasonable person would have understood from the words used in the context in which they were used”: IFE Fund SA v Goldman Sachs International [2007] 1 Lloyd’s Rep 264, per Toulson J at para 50 (upheld by the Court of Appeal at [2007] 2 Lloyd’s Rep 449). The answer to that question may depend on the nature and content of the statement, the context in which it was made, the characteristics of the maker and of the person to whom it was made, and the relationship between them.

83. … In the case of an implied statement, “the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context”: ibid.

…

85. The essential question is whether in all the circumstances it has been impliedly represented by the defendant that there exists some state of facts different from the truth. In evaluating the effect of what was said a helpful test is whether a reasonable representee would naturally assume that the true state of facts did not exist and that, had it existed, he would in all the circumstances necessarily have been informed of it: Geest plc v Fyffes plc [1999] 1 All ER (Comm) 672, at page 683 (per Colman J). …

86. It is also necessary for the statement relied on to have the character of a statement upon which the representee was intended, and was entitled, to rely. In some cases the statement in question may have been accompanied by other statements by way of qualification or explanation which would indicate to a reasonable person that the putative representor was not assuming a responsibility for the accuracy or completeness of the statement or was saying that no reliance can be placed upon it. Thus the representor may qualify what might otherwise have been an outright statement of fact by saying that it is only a statement of belief, that it may not be accurate, that he has not verified its accuracy or completeness, or that it is not to be relied on.”

56.Applying the law as stated above, the question here is whether the Amalfi Description, read in the context of the Brochure, and viewing this from the perspective of a reasonable person in the position of the plaintiff, can be understood to have the meaning as alleged: that those living on the top floor units of Chianti would enjoy unobstructed sea view and the defendant had the intention of providing the top floor units of Chianti unobstructed sea view continuously in future.

57.This seems to me an impossible proposition.

58.Assuming that the Amalfi Description (“Mid-rise Residential Development Area Under Planning”) would convey to a reasonable person in the position of the plaintiff (a highly educated person who knew that the Property is on the 16^th and 17^th storeys of Block 5) there would be a difference in height between a mid-rise development (Amalfi) and a high-rise development (Chianti), it is a quantum leap to deduce from this that (1) the difference in height would be significant or sufficiently significant; or (2) the sea view would not be obstructed (this would depend on a number of factors including the orientation of the unit, the relative distance of the unit from the mid-rise development under planning, the topography of the sites); or (3) there would be unobstructed sea view continuously in future (there was nothing in the advertisements or the Brochure to suggest permanence of any view, as accepted by the plaintiff [25]).

59.As mentioned by the judge in §51 of the judgment:

“… in my view, a high-rise building is not necessarily significantly taller than a mid-rise building. Even if there is a significant difference in height, which in itself is not amenable to exact definition, it is possible that the sea view of a high-rise building could still be obstructed by a mid-rise building. It very much depends on the relative distance between the harbour/sea and the buildings.”

60.Mr Tong submitted that the “main theme” of the Brochure is that the Property commands unsurpassed sea view, and in particular, that of Victoria Harbour.  But it was clearly denoted on page 367 that a Victoria Harbour view was “applicable to certain units only”.  Even assuming that to be the main theme the Property commands unsurpassed sea view in particular that of Victoria Harbour, there was no representation that that state of affairs would continue indefinitely.

61.These parts of the plaintiff’s cross-examination are particularly telling:

“Q. Is there anything in the floor plan brochure that suggests to you as the reader that the information there would be good not only at the time when it was published, but that it was going to be good forever and a day; a permanent position? Is there anything to suggest that?

A. Yes.

…

Q. So that’s what you relied on. What you see is that it says “Mid-rise Residential Development Area Under Planning”; is that right?

A. Correct.

Q. From that, you deduced that whatever view that one has would be permanent?

A. This is one of the factors.

Q. This is one of the factors. But why?

A. Because when we purchase -- when we make a buying decision, there are many factors to consider. So, first of all, I was lured by the advertisement, but that was just an advertisement. As we all know, advertisement tends to exaggerate.

Q. Right.

A. So as a scientist, an engineer’s nature, I need to look into details. So the floor plan document is the one I relied on. I looked at the position of Chianti. I compared the surrounding areas, where it says that the garden houses under planning, or mid-rise building under planning, which gave me the firm impression that by sitting on top of a high-rise building, this future construction would not block my view. This is one determining factor which led me to make the decision. However, I should say that this is not the only reason.

Q. But what I’m asking you is what is there on this page[26] to suggest to you that it’s going to be a permanent view? There is nothing expressed there, right?

A. It does not --

Q. There is nothing expressed to say, “We can assure whoever is purchasing any of the Chianti units that the view they enjoy would be permanent”, nothing like that; right?

A. There is nothing that says that. However, by describing the building under planning as “mid-rise” with a definition of our Chianti building as “high-rise”, it implies automatically that I would be sitting higher than the future construction.

Q. Do you accept that even on that reasoning, part of the sea view would be blocked? Do you accept that?

A. By sitting on top of a high-rise, with construction under planning which is called “mid-rise”, I did not expect that my view toward the sea, the wide angle, the openness, and the look out to the Victoria Harbour, would be blocked.

Q. My question is whether part of the sea view would be blocked. Could you answer that question, please.

A. Whether or not part of the sea would be blocked?

Q. Yes.

A. It did not say that the part of the sea will be or will not be blocked.

Q. Right. So it is equally possible that part of the sea view would be blocked, possible that part of --

A. Very possible.

Q. That’s possible?

A. But there is a part of sea that matters more to me when I was making the purchasing decision.

Q. Right. So you were prepared to accept that part of the sea view might be blocked?

A. Can be blocked, right.”[27]

62.The plaintiff’s case on misrepresentation, founded essentially on the contrast between a mid-rise building and high-rise building, cannot get off ground.  Her assumption that because Chianti was described as “high-rise” (notwithstanding she knew that the blocks in Chianti are of varying heights and the Property is on the 16^th and 17^th storeys of Block 5) and the development under planning was described as “mid-rise”, it would automatically imply that the Property would be sitting much higher than the future construction so that her view toward the sea and the lookout to the Victoria Harbour would not be blocked is not a meaning that could reasonably be placed on the Amalfi Description, applying an objective interpretation from the perspective of a reasonable person in her position.

Statement of future intention

63.The Amalfi Description (“Mid-rise Residential Development Area Under Planning”) is not a statement of present fact but of future intention.  It concerned a development under planning and not yet materialised.  A statement of future intention is not an actionable misrepresentation.

64.If the representor does not have the belief or plan for his future conduct at the time he speaks, he is not telling the truth about his present state of mind and his representation can be characterised as a fraudulent representation of fact and hence actionable (Misrepresentation, Mistake and Non-Disclosure by Cartwright at §3-42).  But that is not the situation here as the plaintiff’s counsel had disavowed reliance on fraudulent misrepresentation at the trial[28].

65.An honest statement of future fact or intention is simply a prediction or a promise, not a representation.  “A statement as to a future state of affairs can in itself neither be true nor false at the time it is made, since the future cannot be foretold.”  (Bank Leumi Le Israel B.M. v British National Insurance Co Ltd [1988] 1 Lloyd’s Rep 71, cited in Misrepresentation, Mistake and Non-Disclosure by Cartwright at §3-43).  And if one party wishes to hold the other liable in the event that the prediction is not borne out by the facts as the future finds them or if the promise is not kept, the remedy at law is not in pre-contractual misrepresentation (Misrepresentation, Mistake and Non-Disclosure by Cartwright at §3-43).

66.The judge is plainly correct in holding that there was no actionable misrepresentation on this ground too.

Statement on which the representee not entitled to rely

67.Here one considers whether the plaintiff was in the circumstances entitled to rely on the statement in the Amalfi Description.  The applicable law is as stated in the relevant paragraphs in Raiffeisen Zentralbank set out earlier.  It is to be judged objectively according to the impact of the statement on a reasonable person in the position of the representee.  The court considers what a reasonable person would have understood from the words used by looking at the nature and content of the statement, the context in which it was made, the characteristics of the maker and the person to whom it was made, and the relationship between them.  Where the statement is accompanied by a qualification or explanation, this may indicate to a reasonable person that the representor was not assuming responsibility for the accuracy or completeness of the statement or was saying no reliance can be placed on it.

68.Here, the Amalfi Description was accompanied by qualifying statements at the bottom right corner of page 365.  Similar qualifying statements are found on pages 363 and 367.  The defendant made clear that all information and photos are for reference only, it reserves the right to make modifications and changes to the future development without prior notice, and that all plans are subject to the final plans approved by or record plans accepted by the relevant government departments.

69.The judge concluded at §§44 to 46 of the judgment that a reasonable person could not have relied on the Amalfi Description as a definite statement of fact in light of these qualifying statements which are so clear.  I respectfully agree.

70.Mr Tong cited cases on exclusion clauses (J Spurling Ltd v Bradshaw [1956] 2 All ER 121 at 125; Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433 at 438) to support his contention that the qualifying statements had not been brought clearly to the attention of the plaintiff and so the defendant should not be allowed to rely on them.  The cases on exclusion clauses are not to the point.  We are here concerned with what a reasonable person in the representee’s position would have understood the statement to convey in the context the statement was made and where it is accompanied by qualifying statements.  We are not concerned with the question whether a condition or clause has been incorporated into a contract.  Besides, it is the plaintiff’s evidence that she had “studied the most” the Brochure[29].  She was cross-examined about the qualifying statements at some length and made no indication that she was unaware of those statements at the time[30].

71.Mr Tong also relied on Walker v Boyle [1982] 1 WLR 495 at 501 and Assicurazioni Generali SpA v Arab Insurance Group (BSC) [2003] 2 CLC 242 at §§63 and 64 to submit that clear language is required to negative the representation in the Amalfi Description.  I do not think these cases would assist him.

72.The representation in Walker v Boyle was made in a wholly different context.  It was an answer given to a pre-contract inquiry in the sale and purchase of a property whether the vendor was aware of any boundary dispute.  As stated by Dillon J at 501, the object of a purchaser in making such inquiry was to obtain information on which the purchaser could decide whether to proceed to exchange contracts and “any vendor will know that that is the object of asking the questions, and will know that the answers are likely to be relied upon”.  It was in that context that Dillon J went on to say that “a person who makes a representation of fact cannot negative the representation by words such as those in the small print” and he ignored them accordingly.  This is a far cry from the present situation.  The statement in the Amalfi Description is that the development was “under planning”, it could change and the qualifying statements expressly reserve the right of the developer to make modifications and changes to that development without prior notice and provide that all plans are subject to the final plans approved by the relevant government departments.

73.In Assicurazioni Generali a misrepresentation was held to be made and the question considered at §§63 and 64 was what was required to be done to correct the misrepresentation.  It has no bearing to the present case.

74.The judge is right in holding that there was no actionable misrepresentation for this reason as well.

Conclusion on actionable misrepresentation

75.For the above reasons, the judge is plainly right to hold that there was no actionable misrepresentation.  On this ground alone, the plaintiff’s claim must be dismissed.

76.Mr Tong complained that the judge did not make findings on these matters: (1) whether the plaintiff had actually relied on the alleged misrepresentation; (2) the falsity of the misrepresentation; (3) whether the defendant has a defence under section 3(1) of MO, namely, that there was belief on reasonable grounds in the truth of the alleged misrepresentation.  Mr Tong submitted that the judge had not directed his mind to the above matters and had adopted a wrong approach.  Instead of finding whether the plaintiff had actually relied on the alleged misrepresentation, the judge just questioned the reasonableness of the plaintiff’s reliance in view of the disclaimers in the Brochure and criticised her for jumping to the conclusion that Chianti must be substantially higher than Amalfi without making further enquiries or checking the OZP which was in the public domain[31].  Instead of addressing the issue whether the defendant had any reasonable ground to believe in the truth of the alleged misrepresentation, he focused on whether the defendant’s witnesses were honest and whether there was dishonesty in the Amalfi Description[32].

77.The judge did not deal with the three matters mentioned above because he found there was no actionable misrepresentation and that is sufficient to dismiss the plaintiff’s claim.  The defence under section 3(1) of MO does not arise. Like the judge, I do not find it necessary to deal with them.  Lest it should be thought there is substance in the contentions made on behalf of the plaintiff, I will deal with them briefly.

78.I do not accept the judge had erred in questioning whether it was reasonable for the plaintiff to rely on the alleged misrepresentation.  As explained earlier, in considering the meaning of the misrepresentation and whether the representee was entitled to rely on it, the approach is objective based on the perspective of a reasonable person in the position of the plaintiff.  This is separate from the issue of reliance on the representation as dealt with in Clerk & Lindsell on Torts at §18-38 cited by Mr Tong.

79.Nor do I accept Mr Tong’s submission that the Amalfi Description was untrue.  The judge rightly held that the statement in the Amalfi Description was of future intention.  There was no evidence that this was not the defendant’s intention at the time the statement was made.  There is no basis for contending that the statement “Mid-rise Residential Development Area Under Planning” was untrue.

80.I do not agree with Mr Tong that the judge was just making a finding that the defendant’s witnesses were honest in general.  In §§49 and 50, he accepted the explanation given by the defendant’s witnesses about the Amalfi Description, he accepted the defendant’s case about its intention at the time and made a finding there was no dishonesty in the statement.

Contractual estoppel

81.I do not propose to deal with the arguments addressed to us on contractual estoppel as this is not necessary to the disposal of the appeal.  I note in the recent decision of the Court of Appeal in DBS Bank (Hong Kong) Ltd v Sit Pan Jit, CACV 91/2015, 10 June 2016, the court left open the question whether the English cases on contractual estoppel should be followed (at §§130 to 132).  It would be more appropriate to consider the availability of this defence and its juridical basis on another occasion.  I express no view on contractual estoppel, and on the judge’s holding that clause 16 is not to be construed as a provision limiting or excluding liability for misrepresentation.

Damages

82.The question of damages does not arise for consideration given that the plaintiff’s case on actionable misrepresentation is not made out.  I would only say that I could detect no error in the judge’s approach in finding that on the evidence before him, the plaintiff has not proved her pleaded loss, being the loss of a chance to purchase an alternative property with a permanent unobstructed sea view with her budget of $17 million odd.

83.I also disagree with Mr Tong that even if the plaintiff was unable to prove her loss as pleaded, the judge should have found that she must have suffered more than nominal damages due to the loss of sea view as a matter of common sense and awarded the costs of the trial to the plaintiff.

84.Quite apart from the unsatisfactory evidence on an alternative property she could have purchased at the time, the valuation experts on both sides agreed that the Property has appreciated in value.  The plaintiff also gave evidence that she only lived in the Property for several months a year initially and has rented it out in 2013 or 2014[33].

85.Section 3(1) of MO requires the claimant to prove that he has suffered loss as a result to be entitled to the remedy of damages provided by statute (Misrepresentation, Mistake and Non-Disclosure by Cartwright at §7-15).  The claim under the statutory provision is not actionable per se.  If the claimant has not discharged his onus to prove loss, the claim should be dismissed.  There should be no award for nominal damages.

Conclusion

86.For the above reasons, I would dismiss the plaintiff’s appeal and make an order nisi that the plaintiff should pay the defendant’s costs of the appeal, with a certificate for two counsel.

Hon McWalters JA:

87.I agree with the judgment of Kwan JA.

Mr Ronny Tong SC, Mr Albert Yau and Mr Bache Sit, instructed by Hau, Lau, Li & Yeung, for the Plaintiff (Appellant)

Mr Benjamin Yu SC and Mr Elliot Fung, instructed by Kao, Lee & Yip, for the Defendant (Respondent)