Cbre Ltd v. Superform Investment Ltd
Read the full judgment text of HCA 1420/2019 on BabelCite. This High Court CFI judgment was delivered on 31 July 2020.
1. There are two summonses before the Court:
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HCA 1420/2019 [2020] HKCFI 1799 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1420 OF 2019 _____________ BETWEEN
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__________________________ D E C I S I O N __________________________ I. Introduction and Background 1.There are two summonses before the Court:
2.CBRE filed a supporting and a reply affirmation of Mr Mok Wong Ning (“Mr Mok”), a director of CBRE, in support of its summons. Superform filed an affirmation of Mr Yuen Chi Pang, a director of Superform, in opposition to CBRE’s summons and in support of its own summons. 3.I deal first with CBRE’s application for summary judgment, as the outcome of that application would potentially impact upon the necessity of the other reliefs sought in CBRE’s summons as well as Superform’s summons. 4.The principles on summary judgment are well established and need not be rehearsed here. The Court is primarily concerned at this stage with undisputed or indisputable facts and cogent documentary evidence. Whilst the burden is upon the defendant to raise a triable issue on affidavit, a summary judgment application is not the occasion to resolve or prefer conflicting versions of material events, save where the defendant’s version is hopelessly irreconcilable with the contemporaneous documents or is otherwise incapable of belief. 5.Save where otherwise indicated, the following matters are not in serious dispute or can be gleaned from the contemporaneous documents. 6.Superform is an indirect subsidiary of a publicly listed company on the Hong Kong Stock Exchange and was the owner of the entire 24th floor of Lippo Centre Tower 1 (the “Property”), in respect of which it wished to subdivide into units for sale. 7.In or around July and August 2018, Superform entered into negotiations with CBRE to provide project management services for the intended subdivision works and “lead sale agency” services for the sale and marketing of the subdivided units. 8.The main contact person for Superform was one Tess Ng Kit Ling (“Ms Ng”), a director of Superform who has since resigned, and the main contact persons for CBRE were Mr Mok and one Murphy Dik (“Mr Dik”). 9.Negotiations between Ms Ng, Mr Mok and Mr Dik culminated in a 7-page engagement letter issued by CBRE under its letterhead on 19 September 2018 and addressed to Ms Ng of Superform. The caption on the letter read, “Re: Appointment Letter for Strategic Consultancy Services on 24/F Lippo Centre Tower I” (the “September 19 Letter”). 10.The September 19 Letter provided, inter alia:
11.The September 19 Letter was: (1) signed on behalf of CBRE by Mr Mok as director and one Ryan Wong as associate director project management and chopped with CBRE’s company chop; and (2) signed by Ms Ng “for and on behalf of Superform…” and chopped with Superform’s company chop underneath the words, “Confirmed and Accepted by Superform…”. 12.At the bottom of the last page of the September 19 Letter, which was otherwise blank, appeared at first blush a standard boilerplate, but which upon closer inspection, (somewhat curiously) disclaimed any contractual obligations between the parties:
13.On 27 September 2018, CBRE issued another letter under its letterhead addressed to Ms Ng, with the following caption, “Re: Supplemental Agreement of the Appointment Letter For Strategic Consultancy Services of 24/F Lippo Centre Tower 1” (the “September 27 Letter”). There is no dispute that the September 27 Letter was concerned solely with revising the fee structure for project management services and not the “lead sale agency” services referred to in the September 19 Letter. 14.The September 27 Letter was signed by the same parties and in a similar manner as the September 19 Letter, save that neither party affixed its company chop. At the bottom of the signature page appeared also a disclaimer in precisely the same wording as, but in a smaller font, the Disclaimer. 15.On the next day, 28 September 2018, Superform issued a cheque of HK$180,000 in favour of CBRE (the “September 28 Cheque”). A copy of the cheque superimposed on the September 27 Letter was countersigned by Mr Mok on behalf of CBRE, evidencing receipt. 16.Following the September 27 Letter, CBRE appears to have provided project management services to Superform in relation to the subdivision works for the Property. On 28 January 2019, CBRE issued an invoice to Superform seeking final payment of HK$160,000, being payable upon practical completion of the works. Mr Yuen does not dispute that a binding agreement was concluded for the project management services described in the September 19 Letter, although he contended that the September 27 Letter was the “definitive agreement” mentioned in the Disclaimer which resulted in a binding contract between the parties for project management services. There also appears to be some dispute as to the project management services provided, although nothing turns on that here. 17.There is also contemporaneous documentary evidence that CBRE made marketing efforts for the Property with Superform’s knowledge and consent, including inter alia:
18.On or around 4 March 2019, on the introduction of Centaline, Superform entered into a sale and purchase agreement with a purchaser in respect of certain subdivided units of the Property at a consideration of HK$108,300,000 (the “March 2019 Sale”). On or around 17 April 2019, again on the introduction of Centaline, Superform entered into a sale and purchase agreement with a purchaser in respect of a subdivided unit of the Property at a consideration of HK$35,732,308.00 (the “April 2019 Sale”). 19.On 6 August 2019, CBRE issued the writ in the present action (amended on 30 March 2020) claiming, inter alia, a liquidated sum of HK$5,046,646.16 for commissions due and payable to CBRE for services provided pursuant to an “agreement made between [CBRE] and [Superform] as evidenced by, among others, [the September 19 Letter]”. Alternatively, CBRE claimed damages for breach of contract or restitution for unjust enrichment in the same amount. On 16 September 2019, CBRE filed its statement of claim, which was amended on 30 March 2020. 20.On 28 November 2019, Superform filed a defence denying any liability to CBRE, which was amended on 29 April 2020. 21.On 9 March 2020, CBRE issued the present application for summary judgment. At the beginning of the hearing, Mr Kevin Lau, counsel for CBRE, indicated that he would not be pursuing summary judgment on the basis of restitution for unjust enrichment and would rely solely on its contractual claim. II. CBRE’s Summary Judgment Application 22.In Mr Mok’s supporting affirmation, he contended that the September 19 Letter constituted a binding contract between the parties, notwithstanding the Disclaimer:
23.In his oral submissions, Mr Lau accepted that Mr Mok’s contention that the Disclaimer was mistakenly included by CBRE in the September 19 Letter was not a matter suitable for summary judgment. However, he relied upon the principle that a provision such as “subject to contract” which deprived a document of legal force can be ignored where the parties have by their words or conduct demonstrated that they agree for such provision to be expunged.
24.In the present case, he says that the parties by their conduct impliedly agreed to expunge or waive the Disclaimer, or otherwise mutually acted on the basis that it had no legal force. As to the conduct giving rise to such an implied agreement or waiver, Mr Lau submitted that:
25.Mr Lau also submitted that the same facts can also support a case of offer and acceptance by conduct. He invited the Court:
26.In opposition to CBRE’s summary judgment application, Superform contends that there are at least triable issues in respect of the following pleaded defences: (1) by reason of the Disclaimer, no binding contract had been concluded between the parties on 19 September 2018 (the “No Contract Defence”); and (2) in any event, Ms Ng did not have authority to enter into a binding contract on behalf of Superform with CBRE (the “No Authority Defence”). 27.One of the difficulties faced by Superform, according to Mr Yuen’s affirmation, was that Ms Ng left the employment of Superform in November 2019 and “…has rejected Superform’s invitation to give evidence on behalf of Superform in relation to these disputes with CBRE”. Superform’s evidence in this regard was not challenged by CBRE. Superform therefore does not have access to, for instance, the full message history of the WhatsApp Chatgroup, extracts of which have been exhibited and relied upon by Mr Mok. 28.I address first the No Contract Defence. In my judgment, there are plainly triable issues as to whether a binding contract was concluded between the parties, and whether the terms of such contract (if any) were those contained in the September 19 Letter. 29.As mentioned above, Mr Lau accepts for present purposes that no binding contract was concluded as at 19 September 2018. I would add that, in addition to the Disclaimer, the time for payment of the commission fee was expressly stated to be “subject to change” in the September 19 Letter. Although this is a relatively minor term, it nonetheless suggests that not all of the terms may have been concluded between the parties on that date and further negotiations were anticipated. 30.Mr Lau also accepts that, subsequent to the September 19 Letter, there was no clear expression of intention in writing waiving or agreeing to expunge the Disclaimer. Rather, as mentioned above, he invites the Court to infer such agreement or waiver from the conduct of the parties, or alternatively, he invites the Court to make a finding of offer and acceptance by conduct. 31.As noted by Mr Jason Lee, counsel for Superform, Mr Lau’s case as now advanced, whether it be implied agreement or waiver, or offer and acceptance by conduct, is nowhere to be found in the pleadings. The Amended Statement of Claim, which pleads the alleged contract between the parties simply as follows:
32.First of all, any case of offer and acceptance by conduct as now advanced by Mr Lau plainly must be pleaded. There is also no inkling of such a case in the affirmation evidence. Indeed, when I asked him at the hearing when he says a binding contract was concluded in respect of agency services, he was unable to proffer a date, but said that this must have happened, “at the latest by 31 January 2019”. This is obviously unsatisfactory. I therefore reject any case of offer and acceptance by conduct. 33.As to the case of waiver, it is trite law that this, too, must be specifically pleaded (see e.g. Hong Kong Civil Procedure 2020 at §18/8/11). It might be argued, however, that such waiver or implied agreement should be pleaded in the reply in response to Superform’s denial of any contract due to the Disclaimer, and no reply has yet been filed. Even if that is correct, given that Superform had already filed a defence, it was incumbent upon CBRE in my view to set out its case with full particulars on implied agreement and waiver in its supporting affirmation, so that Superform was fully apprised of the case it had to meet. 34.As mentioned above, in Mr Mok’s supporting affirmation, he maintained that the September 19 Letter was a binding contract on the date it was signed. Thereafter, he described various matters under the heading, “Parties’ conduct inconsistent with no binding contract.”, which comprised the September 27 Letter, project management services provided by CBRE and payment made by Superform for project management services. This is in my view inadequate to support the case now advanced by submissions that the September 19 Letter subsequently became binding as a result of an implied agreement to expunge or waiver of the Disclaimer to be inferred from the conduct of the parties. 35.In any event, it must be relatively rare in a contested action that the Court would be able to draw such an inference summarily, save in very clear cases. This is not such a case. None of the authorities cited by Mr Lau was concerned with summary judgment. The oft-cited maxim, “in law, context is everything” is plainly apposite here. In evaluating the conduct of a party, it will be necessary for the Court to have regard to all the circumstances in which the conduct occurred. 36.First, the mere fact that the parties agreed and appeared to have performed the project management part of the September 19 Letter does not necessarily mean that they must have impliedly agreed to expunge or waive the Disclaimer in relation to the agency services part of the letter. Assuming for present purposes that the September 19 Letter was not itself binding on the date it was signed, it is plausible that the parties subsequently agreed to certain of the services described but not others. This is in fact Superform’s case. 37.Moreover, as mentioned above, the Screenshot (which Mr Lau now relies upon as the “high watermark” of his case), the Marketing Materials and the January 5 Email were only raised and exhibited for the first time in Mr Mok’s reply affirmation. This was not only inappropriate for the reason mentioned above but also highly unfair to Superform. On the first return date of CBRE’s summons on 30 March 2020, Recorder Yvonne Cheng SC ordered that no further affirmations were to be filed after CBRE’s reply affirmation(s) without leave. In the absence of good reason (and there is none here), Superform should not have been required to seek leave to reply to matters which could and should have been raised by CBRE at the outset. 38.In any event, even with these additional materials (and without Superform having the opportunity to respond to them), CBRE falls far short of being able to show, in a summary judgment application, that the parties had impliedly agreed to expunge or waive the Disclaimer. 39.First, the Screenshot posted by Ms Ng on 31 January 2019 is wholly devoid of context. It cannot be seen from the selected extracts of the WhatsApp Chatgroup exhibited by Mr Mok whether and what messages immediately preceded the Screenshot. Although some messages subsequent to the Screenshot can be seen, Mr Lau accepted those messages concerned a different subject matter. 40.Moreover, as Mr Lee pointed out, even taking the words of the Screenshot at face value, “承諾” [promise] is not necessarily the same thing as “合同” [contract] or “協議” [agreement], nor does it necessarily imply acceptance or recognition that the parties are governed by the terms of the September 19 Letter, which was signed over three months earlier and expressly stated to be non-binding. Much will depend on the context in which the Screenshot was posted, including the message history of the WhatsApp Chatgroup and other prior communications between the parties. 41.Mr Lau explained that the message history of the WhatsApp Chatgroup is too voluminous to exhibit in its entirety and contained irrelevant but confidential information which CBRE did not wish to exhibit in its affirmation. I am not impressed by such an explanation, and in any event, it merely highlights the need for discovery in the normal course. 42.Similarly, the Marketing Materials and the January 5 Email must be viewed in context. The fact that CBRE marketed the Property, brought offers to Superform from potential purchasers and offered advice in relation to that offer did not necessarily mean that it was doing so pursuant to an agency contract in the terms of the September 19 Letter. Moreover, as Mr Lee pointed out, it is common knowledge that in Hong Kong, estate agents often bring offers and proffer advice to sellers without any exclusive or lead sale agency contract between them. 43.Mr Yuen also pointed out in his affirmation that in the preliminary sale and purchase agreements for the March and April 2019 Sales, Centaline was named as the estate agent and no mention was made of CBRE. Mr Mok responded that, inter alia:
Suffice it to say that this is plainly not an issue that can be resolved in a summary judgment application. 44.Finally, the fact that CBRE has pleaded an alternative claim on the grounds of unjust enrichment and restitution only highlights the possibility that services had been rendered by CBRE to Superform in the absence of a binding contract. As mentioned above, Mr Lau, sensibly in my view, no longer pursues the restitution claim by way of summary judgment. 45.My view that the No Contract Defence clearly raises issues that can only be resolved at trial is sufficient to dispose of the present application. In the circumstances, it is unnecessary for me to comment on the merits of the No Authority Defence. I should mention also that Mr Mok has raised a number of other matters in his affirmations which he relies in support of CBRE’s case for summary judgment. I have considered them and do not intend to set them out here, save as to say that, having regard to my views above, they are plainly matters for trial. 46.As Superform had filed a defence putting CBRE on notice of its defence prior to the application for summary judgment, it is appropriate to dismiss the application rather than to grant unconditional leave to defend. There is no reason why costs should not follow the event, and I make a costs order nisi that Superform is to have the costs of the application, to be summarily assessed. I will come back to directions in this regard at the end of this Decision. III. CBRE’s Application for Relief from Sanctions 47.The background of the application is not in serious dispute. I take the following chronology from Mr Lau’s submissions, with some modifications:
48.Mr Lau submits, firstly, that as no unless order was made on the consent summons, the present application should be treated as a normal application for extension of time. I have no hesitation in rejecting this submission. It seems to me that a consent summons, signed by the solicitors for both parties, should be regarded as having contractual effect conditional only upon the approval of the Court. Although the Court retains the discretion whether to make an order in terms of the consent summons, in the present case, it is not (nor can it be seriously) suggested that, but for the GAP, an unless order would not have been made. In the circumstances, there is no reason why the Court should not apply the same threshold for granting relief from sanction in deciding whether to extend time. 49.It is also well established that the Court’s jurisdiction to extend time notwithstanding that time to do an act had been consented to by the parties (see e.g. Re Good Idea International Investment Ltd [2014] 4 HKLRD 186, CA). However, in my view, the Court should be slow to do so in the absence of good reason – a fortiori where the parties have consented to an unless order, which by its very nature is peremptory, and the consequence of non-compliance automatically applies unless relief is granted. 50.In the present case, although I accept Mr Lau’s submission that there was some initial confusion as to the effect of the GAP, I do not understand why a draft reply could not have been annexed to CBRE’s summons, or in any event, provided to Superform and the Court prior to the present hearing. In a situation where an applicant is seeking indulgence from the Court to be excused from non-compliance with a peremptory order, it is wholly unsatisfactory that no attempt has even been made to purge his default at the earliest opportunity. The fact that an application for summary judgment was included in CBRE’s summons is irrelevant. 51.For those reasons, I would have dismissed CBRE’s application for relief from sanction and extension of time to file a reply but for the fact that on 29 April 2020, Superform filed an amended defence containing amendments which are not insubstantial. Mr Lee submits that I should only allow CBRE to reply to the amended or additional paragraphs of the amended defence. However, it seems to me that that would be a rather blinkered approach and result in possibly incoherent pleadings. For this reason, and for this reason only, I order that notwithstanding the consent summons, CBRE do have leave to file and serve, on an “unless basis” a reply to the amended defence within 7 days from the date of this Decision, failing which it be barred from filing any reply. I also make an order nisi that CBRE bear the costs of the application, to be assessed summarily. IV. Superform’s Summons 52.As mentioned above, Superform seeks leave to issue a third party notice against Centaline. Mr Lau indicated that he had no objection to the application. I have considered the draft notice annexed to the summons and am satisfied that I should make an order in terms of the summons. V. Directions on Costs of CBRE’s summons 53.For the reasons explained above, I make a costs order nisi that Superform is to have the costs of CBRE’s summons (on a party and party basis), to be assessed summarily on paper. I therefore direct that Superform file and serve a skeleton bill of costs within 7 days from the date of this Decision, and that CBRE file a list of objections within 7 days thereafter. 54.Last but not least, I thank both counsel for their assistance.
Mr Kevin Lau, instructed by Stephenson Harwood, for the plaintiff Mr Jason Lee, instructed by Miao & Co., for the defendant | |||||||||||||||||||||||||||
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