Read the full judgment text of CACV 000037/1996 on BabelCite. This Court of Appeal judgment was delivered on 2 July 1996 before Nazareth VP, Godfrey JA, Liu JA.
Property law – sale and purchase of land – provisional agreement for sale and purchase – common-form agreement – whether time is of the essence in the absence of express provision – Hong Kong secondary market practice – whether vendors justified in repudiating agreement – specific performance – Property at Flat A, 21/F Woodbury Court, Discovery Bay, agreed price $1,190,000 inclusive of club membership – vendors' solicitors delayed sending draft formal agreement until 26 April 1991 because tenant's notice of surrender only obtained on 22 April 1991 – purchasers signed engrossed agreement and tendered $69,000 cheque on 2 May 1991, later substituted with cash on 4 May 1991 – vendors sold property to third party on 14 May 1991 and called off sale to purchasers on 18 May 1991 – Whether time was of the essence of the provisional agreement – Held: yes, in the absence of special circumstances, a common-form provisional agreement for sale and purchase in Hong Kong is treated as one of which time is of the essence, following Man Sun Finance, Lee Kenny, and Health Link Investment – However, time ceased to be of the essence when the vendors' own solicitors failed to produce the agreement for signature on the specified date 23 April 1991 – Whether vendors were justified in repudiating – Held: no; it was the vendors who repudiated, not the purchasers – The purchasers were entitled to a reasonable time to perform and the acceptance of cash in place of the dishonoured cheque constituted a waiver – Appeal dismissed with costs – Decree of specific performance in favour of purchasers upheld.
Legal issues: Whether time was of the essence of the provisional agreement for sale and purchase · Whether the vendors were justified in repudiating the agreement
Outcome: Appeal dismissed with costs. The decree of specific performance in favour of the purchasers (defendants/respondents) on their counterclaim was upheld.