Chan Yat Wah v. Moonland Enterprise Ltd.

HCMP003061B/1998

HCMP 3061/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 3061 OF 1998

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Coram: Deputy High Court Judge Longley in Court

Date of Hearing: 16 October 2000

Date of Ruling: 16 October 2000

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THIRD RULING

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1. The Defendant counterclaims damages from the Plaintiff as a result of the Plaintiff's failure to complete the Sale and Purchase Agreement.

2. Mr Pow for the Plaintiff expressly conceded before the Defendant opened its case on its counterclaim that the Plaintiff is liable to return the deposit it received from the Defendant; and also to pay the Defendant its costs of investigating title including surveying fees.

3. He says that these matters fall within the normal principles of remoteness of damage. They are expenses which were within the contemplation of both parties as resulting from a breach of contract by the Plaintiff.

4. The Defendant seeks further damages resulting from the fact that it intended to develop the land in question for housing. Mr Lim, counsel for the Defendant has expressly limited these damages to the losses incurred by the Defendant in purchasing the rights of indigenous villagers in order to carry out such a development. Mr Lim has called the sole witness for the Defendant, Mr So Sui Hong. After the conclusion of that evidence and the defence case Mr Pow submits there is no case to answer on this aspect of the Defendant's claim.

5. Mr Pow says that the normal measure of damages would be the market value of the property at the contractual time for completion less the contract price. He points out that there is no evidence in this case that the market value at the contractual time for completion was any greater than the contract price.

6. In order to take the case out of this category in which the normal measure of damage would apply, the Defendant would have to show "special circumstances" which in this case would be a knowledge on the part of the Plaintiff that the Defendant intended to develop the land for housing. He relies upon the judgment in the case of Duncan v. Camill Jones [1961] Chan. Div. p. 22 and Cottrill v. Steyning and Littlehampton Building Society [1966] 1 WLR at 753. He submits that there is no evidence from which the Court could impute such knowledge to the Plaintiff - indeed on the contrary the land is described in Clause 38 of the Sale and Purchase Agreement as "non-residential property".

7. I find this submission by Mr Pow to be well founded. There is no evidence that the Plaintiff was made aware that the Defendant intended a building development for the land in question.

8. Although, as Mr Lim pointed out in his reply, the Plaintiff alleged that he was informed that the Defendant intended to use the property for car parking, this does not avail the Defendant. There is no evidence whatsoever that it would be necessary to buy any rights of indigenous villagers to construct a car park as opposed to a housing development. The contracts with the indigenous villagers expressly referred to the purchase of the right to apply for building New Territories small houses.

9. There is, therefore, nothing in the evidence to suggest that it was within the Plaintiff's contemplation that the Defendant would have to buy any rights of indigenous villagers.

10. I find that there is no case to answer in relation to this aspect of the Defendant's counterclaim.

Representation:

Mr Jason Pow, instructed by Messrs T H Koo & Associates, for the Plaintiff

Mr Malcolm Lim, instructed by Messrs Leung Kin & Co., for the Defendant