Read the full judgment text of CACV 000051/1999 on BabelCite. This Court of Appeal judgment was delivered on 11 June 1999 before Godfrey JA, Rogers JA.
Property law – contract for sale of land – requisitions on title – sufficiency of requisition – unauthorized building alterations to bathroom window – summary judgment under Order 86 of the Rules of the High Court – unconditional leave to defend – appellate review of discretionary decision to grant leave to defend – whether vendor under duty to seek clarification of unclear requisition – triable issue – application of Lloyds Bank v Ellis-Fewster, European Asian Bank v Punjab Bank, and R.G. Carter v Clarke – both appeal and cross-appeal dismissed with costs. The plaintiff purchaser entered into a provisional sale and purchase agreement on 19 September 1997 to buy Flat C, 10th Floor, 17 Nassau Street, Mei Foo Sun Chuen, Kowloon, Hong Kong from the defendant vendor for HK$4,380,000, with completion fixed for 23 December 1997. The purchaser became concerned that alterations to the property were unauthorized and that the vendor's title was accordingly defective. The purchaser's solicitors raised a requisition on title by letter dated 16 December 1997 enclosing an architect's letter suggesting that a bathroom window alteration may have required the Building Authority's consent. The vendor's solicitors responded only that the requisition was out of time, and the vendor refused to return the deposit. The purchaser issued a writ on 31 December 1997 and the matter came before Keith J on the purchaser's summons under Order 86 seeking summary judgment against the vendor. By judgment dated 19 January 1999, Keith J granted the vendor unconditional leave to defend, finding the requisition sufficiently confusing to justify refusal to answer and finding a triable issue as to the risk of enforcement action regarding the unauthorized alterations. The purchaser appealed to the Court of Appeal. The Court of Appeal (Godfrey and Rogers JJA) dismissed both the purchaser's appeal and the vendor's cross-appeal, the latter contending that the purchaser's summons ought to have been dismissed. The court held that it would not interfere with the first instance judge's discretion to grant unconditional leave to defend, applying the principle that the Court of Appeal will be very reluctant to disturb a first instance judge's finding that there is a triable issue of fact. The court followed Lloyds Bank Ltd v Ellis-Fewster, European Asian Bank AG v Punjab Bank (No 2), and R.G. Carter Ltd v Clarke, holding that summary judgment under Order 86 is available only for the summary disposal of plain and obvious cases in which the defendant clearly has no defence, and that the dismissal of an application for summary judgment leaves the rights of both parties wholly intact. The court further observed that the question of whether a vendor faced with a requisition he considers unclear has a duty to seek clarification rather than refuse to answer is a question of some importance that merits mature consideration at trial, and is not an appropriate point to decide on an application for summary judgment. The court did not disturb the order as to costs made below. Costs of the appeal and cross-appeal were ordered to be paid by the unsuccessful parties respectively.
Legal issues: Appellate review of grant of unconditional leave to defend under Order 86
Outcome: Plaintiff's appeal dismissed; defendant's cross-appeal dismissed.
Cited by 1 case