Yeung Kwai Yin v. Chung Hing Chung and Another
Read the full judgment text of HCA 2681/1991 on BabelCite. This High Court CFI judgment.
1. On 3rd March 1991, the plaintiff signed a Provisional Agreement for Sale and Purchase of even date with the defendants, Mr and Mrs Chung, for the acquisition of Flat D on the 6th Floor of Block 3, Sceneway Garden in Lam Tin. The Provisional Agreement for Sale and Purchase was in a printed form filled in by Mr Chan in the small office of his company, The Rich Company. After the signing of the said Provisional Agreement for Sale and Purchase, dissatisfaction was voiced by Mr Chung, but Mr Chan
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HCA002681/1991 1991, No. A2681 IN THE SUPREME COURT OF HONG KONG HIGH COURT ----------------- BETWEEN
--------------------- Coram: Hon. Liu, J. in Court Dates of hearing: 17th - 19th and 23rd - 26th March 1992 Date of delivery of judgment: 6th April 1992 ---------------------- J U D G M E N T ---------------------- 1. On 3rd March 1991, the plaintiff signed a Provisional Agreement for Sale and Purchase of even date with the defendants, Mr and Mrs Chung, for the acquisition of Flat D on the 6th Floor of Block 3, Sceneway Garden in Lam Tin. The Provisional Agreement for Sale and Purchase was in a printed form filled in by Mr Chan in the small office of his company, The Rich Company. After the signing of the said Provisional Agreement for Sale and Purchase, dissatisfaction was voiced by Mr Chung, but Mr Chan of The Rich Company sided with the plaintiff. An attempt was made, but in vain, to replace the said Provisional Agreement for Sale and Purchase by another like agreement on terms more favourable to the defendants. The defendants claim that the parties had agreed to a cancellation of the said Provisional Agreement for Sale and Purchase. This claim of the defendants' is denied by the plaintiff who seeks specific performance of the said Provisional Agreement for Sale and Purchase, including a declaration that the same ought to be specifically performed and carried into execution with consequential directions. I shall call the plaintiff, "Mr Yeung", the defendants, "Mr and Mrs Chung", the said Provisional Agreement for Sale and Purchase "the Provisional S/P Agreement" and the like agreement in the futile attempt "the New S/P Agreement". 2. Mr Yeung's version is quite ordinary : he and his wife lived with his mother. His wife purchased a shop space in the Kwun Tong area. When the family income had become more comfortable, they were desirous of acquiring a place of their own on mortgage. Mr Chan of The Rich Company was found by chance and the suit premises in a building then under construction happened to be available. Building construction of Sceneway Garden was expected by everyone involved to be completed in or about February 1992. It was realised that there might be delay as in all construction works. Mr Yeung was asked to pay first $76,100, being the price difference between the Chungs' acquisition price and the sub-sale price to Mr Yeung, as to $20,000 immediately for deposit and as to $56,100 on 14th March. As from 15th March 1991, he was to carry the mortgage instalments of the Chungs until completion, at which time the balance of the purchase price was to be paid less a refund by Mr and Mrs Chung of the mortgage principal in the mortgage instalments already paid. In fact, that seemed to be the general comprehension. I shall deal specifically with their respective understandings. On 3rd March 1991, Mr Chan of The Rich Company completed the printed form with these agreed terms, which he signed and Mr and Mrs Chung also signed. The property market rose sharply around 8th March when Mr Chung was increasingly disquiet. By then Mr Yeung had secured bank mortgage finance through Mr Chan. Meanwhile, Mr Chung was complaining about, in the main, not getting an additional deposit of 10% on his acquisition price, which he had paid and the vagueness of the Chinese terms of "prior to (Yap For)" in Clause (3) of "Manner of Payment" and "Bau Gung" in the "Remarks" column. Miss Chan of the Rich Company communicated with Mr Yeung who managed merely to receive a bare outline of Mr Chung's complaint. Mr Yeung met Mr and Mrs Chung at a pre-arranged meeting on the evening of 11th March at the small office of The Rich Company. There is no evidence that Mr Chan of The Rich Company filled Mr Yeung in, but Mr Yeung had arrived earlier himself on 11th March. Mr and Mrs Chung arrived later with Mr Chung's grand-uncle. They saw Mr Chan and Mr Yeung in conversation. Mr Yeung was prepared to accommodate the Chungs by paying more and earlier i.e. $88,000 being 10% of the purchase price of $108,000 (not, be it noted, the acquisition price) less the $20,000 deposit on 14th March, and on 13th April, a month later, the whole outstanding balance. Mr Yeung was also to pay the mortgage interest after mid March. Mr Chung did not raise any objection to the adjusted payments as proposed, which were more favourable to himself. Mr Chan incorporated the same in another printed form which is the New S/P Agreement. At the time when Mr Chan was preparing the New S/P Agreement, Mr Chung took Mr Yeung out of the office, and outside its entrance the Chungs attempted to impress upon him that both the estate agent and the solicitors' firms were untrustworthy and that the Chungs were themselves honest and would not deceive him, Mr Yeung. Mr Chung suggested to Mr Yeung that the matter should best be called off on his return of the paid deposit of $20,000. Mr Yeung refused this overture as he found it "extremely unreasonable" and he returned to Mr Chan who had by then completed the New S/P Agreement. The New S/P Agreement was then explained by Mr Chan to all, but only Mr Yeung signed. Mr Chung still expressed his dissatisfaction with the terms in the New S/P Agreement and would like to have his newly nominated solicitors going over it. At that time, there seemed to be a heated exchange between Mr and Mrs Chung in Hakka. The Chungs then removed themselves from the office of The Rich Company for a little time and'returned, with Mr Chung maintaining that the New S/P Agreement "had problems and that he would like to let his solicitors to peruse the agreement first before he would sign it". Thereupon, Mr Chan said that he would fax the New S/P Agreement over to the Chungs' solicitors. The Chungs' attitude throughout was that they would sign the New S/P Agreements if it was free of "problems". Mr Chung was less than specific. That is, in totality, the version of Mr Yeung. 3. Whatever had actually transpired on 3rd March and thereafter until the evening of 11th March, Mr Chung's complaint about the Provisional S/P Agreement lay in the alleged omission to include payment of 10% acquisition price in addition to the balance of the price difference on 14th March and in the allegedly obscure terms "prior to (Yap For)" and "Bau Gung". 4. The defendants' case is that the Provisional S/P Agreement was cancelled by the parties in the evening of 11th March. The property market was rocketting. Mr Yeung had successfully procured mortgage facilities from a bank. He and his wife were enjoying a substantial joint-income. They had also family backing. There was a real urge to be on their own. Mr Yeung was even prepared to pay more on 14th March and the whole balance of the purchase price earlier on 13th April. He would carry on with the mortgage interests. Mr Yeung was doing everything possible to appease the Chungs. It is ludicrous to suggest, as the defence does, that Mr Yeung would be agreeable to a forthright cancellation of his purchase. Evidently, it was to be expected that once the New S/P Agreement was signed, it would supersede the Provisional S/P Agreement. Mr Chung maintained that it was Mr Yeung who first expressed concern on the alleged uncertainty in payment terms. Mr Chung categorically stated that he "had no doubt as to the contents of the Agreement by itself." It is also incredible that in a rising market and for a flat of his liking, Mr Yeung would himself draw attention to any obscurity in the payment terms. Moreover, even if Mr Yeung had entertained any doubt, he would have had little anxiety, and he proved himself, with the aid of his bank mortgage, able to pay off all earlier by 13th April. Mr Yeung also told the Court that independent of the bank mortgage he was financially sound and that the in-laws would be helpful. Mr Chung was, according to Mr Yeung, vague about "the problems". Mr Chung had to be all the more so on 11th March because Mr Yeung was ready to meet practically all his demands. The defendants set out on the footing of these highly strained allegations,, but this Court was determined to make every effort in keeping an open mind. 5. Mr Yeung, on the suggestion of Mr Chan and with apparently the acquiescence of the Chungs, offered to pay 10% of the purchase price i.e. all told .$108,000 by 14th March. The defendants' allegation was that the initial agreement was to pay the price difference plus 10% of the acquisition price i.e. $76,100 plus $100,390, totalling $176,490. There was to be an immediate $20,000 deposit. Therefore, it is the defendants' case that on 14th March Mr Yeung had to pay $156,490. Between $176,490 and $108,000, there is a difference of $68,490 (i,.e. $176,490 - $108,000). Mr Chung denied that the New S/P Agreement was prepared in his presence on 11th March. He further maintained that he was unaware of the faxing over of the new document to his solicitors. Mr Chung's implausible explanation was that Mr Chan took it upon himself to fax a copy of the New S/P Agreement to a number on a calling card of his solicitors' litigation clerk, which he had left behind. Mr Shea (or Sfieh), the litigation clerk, attempted to corroborate Mr Chung's explanation by his alleged telephone enquiry made to Mr Chan regarding the faxed over New S/P Agreement. It is a little intriguing as to why Mr Shea did not first seek information from his client, Mr Chung. If Mr Chung was in fact aware of the New S/P Agreement at the time when it was prepared on 11th March, it would be curious that this difference was not raised on11th March. In the light of the circumstances as given by Mr Yeung, I have little doubt that while Mr Yeung was agreeable to pay in full by 13th April, lifting a further sum of $68,490 from this balance of purchase price for earlier payment on 14th March, if demanded, would not have posed any difficulty to him. 6. The defendants' stance is that the Provisional S/P Agreement was cancelled and that in any case it contained clauses too uncertain to be enforced. Hence no rectification is sought. 7. My Yeung told the Court what occurred on 12th March, the next day : on that evening, the Yeungs were increasingly anxious as the property price rose further and very steeply. Mrs Yeung obtained the telephone number of Mr Chung from the telephone company and managed to communicate with him. Both the Yeungs spoke to Mr Chung. Mr Chung spoke repeatedly of the misgivings he said he had with the terms such as "Bau Gung" and "prior to (Yap For)", but Mr Chung assured the Yeungs that "he had the sincerity to sell". Mr Chung continued to express deep distrust for the estate agent and the lawyers involved. Thereupon, Mr Yeung proposed that he should go to Mr Chung's solicitors the next day. An appointment was thereupon made for 3:30 p.m. on 13th March. In the same telephone conversation on the evening of 12th March, Mr Chung allegedly reminded Mr Yeung to bring along a cashier order for $56,100. Then later in the same telephone conversation, Mr Chung said that he would prefer cash. The whole of this conversation is denied by Mr Chung who claimed that there was no such call. Through Mr Shea, the litigation clerk of Messrs W.K. To & Co., the Defence sought to explain how the Yeungs, without any appointment, paid a surprise visit to Mr Chung in his office at 3:30 p.m. Mr Shea put the date as 12th March. 8. On 13th March, so Mr Yeung testified, the Yeungs kept their appointment by attending at the office of Messrs W.K. To & Co. at 3:30 p.m. Mr Yeung told the Court that Mr Chung had not then arrived and they were received by Mr Shea and that Mr Shea was critical of the contents of the New S/P Agreement as being ambiguous, including the terms "Bau Gung" and "prior to (Yap For)". Mr Shea was emphatic that these terms were confusing but he made it clear to the Yeungs that "although the Agreement was unclear yet the transaction should not be left uncompleted merely because of such a thing". According to Mr Yeung, Mr Shea was also critical of the absence of the provision of "subject to contract" in the New S/P Agreement, which, Mr Shea said, would render the New S/P Agreement void. Moreover, Mr Shea drew attention to the fact that the New S/P Agreement had not been signed by Mr Chung and therefore it was not enforceable. Mr Shea concluded that in fact Mr Chung had already informed Messrs W.K. To & Co. at 1 p.m. the previous day, the 12th, that he had decided not to sell and that Mr Shea was instructed to convey to the Yeungs the decision of Mr Chung's. Mr Yeung told the Court that they were startled by this new development, particularly when they had been just told on the evening the previous day that Mr Chung had the sincerity to sell. Mr Yeung then sought advice from Mr Shea who suggested that Mr Yeung should accept a refund of $20,000 plus a compensation of another $20,000, if offered by Mr Chung. My Yeung recalled Mr Shea's comment that one of the likely reasons for Mr Chung not selling the suit premises was because of the "steep hike of property prices" and that he would have similarly reacted in a rising market and faced possible litigation said to be "a 50/50 chance of battle". As for the solicitors'.firm, Mr Shea further added a veiled threat that whilst a meagre fee of some $2,000 would be chargeable for the sale transaction, "it would be quite a different matter" if the dispute had to be resolved in "a legal battle". This subtle intimidation and his alleged comment were denied by Mr Shea. At this point of time, Mr Chung and his grand-uncle arrived. Mr Chung reiterated that the contents of the Agreement were obscure. Then Mr Chung produced some documents which he claimed to be similar to the Provisional S/P Agreement and observed that he had been previously misled. Thereupon the Yeungs confronted Mr Chung as to what his game was. Mr Chung left for making a call, presumably to his wife. After that, Mr Chung returned to the Yeungs and declared that he had decided not to sell. The Yeungs were terribly disappointed and remonstrated with Mr Chung. At that juncture, Mr Shea intervened with the remark that since he had made up his mind not to sell, he had better not "talk too much". The Yeungs threatened to sue, Mr Chung retorted that he was litigating on a matter involving around $2m. and that he was unperturbed having to be engaged in "another legal battle". 9. The Yeungs went directly to their solicitors and were advised by Mr Wong of their solicitors to bring in a deposit of $88,000 the next day. Messrs Anthony Hann & Co. was accordingly paid $88,000 by Mrs Yeung's cheque. 10. At the material time, Mr Yeung was earning $12,100 a month and his wife over $16,000 a month. A mortgage of about 90% of the value of the suit premises was contemplated. 11. The defendants' case as given by Mr Chung is that on 11th March 1991, the parties orally agreed to cancel the Provisional S/P Agreement. In fact, Mr Chung claimed that he was misled as to the additional 10% of the acquisition price which should be payable also on 14th March together with the balance of the price difference of $56,100 (i.e. $76,100 less $20,000 paid as deposit). He had in fact complained to Mr Chan of The Rich Company on 7th March as to the vague terms of the Provisional S/P Agreement, that is "prior to (Yap For)" and "Bau Gung". According to Mr Chan, on 10th March in his office Mr Chung also voiced his disappointment on the absence of reference to 10% in the Provisional S/P Agreement and threatened not to sell. As to the allegedly omitted 10% of the acquisition price, $100,390, Mr Chung explained that the figure "$10" was first written in the space of Clause (2). It was supposed to be a figure for $100,390, being 10% of the acquisition price, which Mr Chung had himself paid. When Mr Chan of The Rich Company was in the course of putting down the alleged 10% being $100,390, so Mr Chung claimed, he was stopped by his colleague Miss Chan on completing just "$10". Mr Chung explained: Miss Chan pointed out to Mr Chan that the amount $1,003,900 shown under Clause (3) in "Manner of Payment" had already included this 10% and that it would be superfluous to insert this 10% again in Clause (2). Thereupon, so Mr Chung maintained, Mr Chan deleted "$10" and proceeded to write in $76,100 beneath. Upon realising that was also a mistake, "$76,100" was deleted and substituted by "$56,100" to take into account the $20,000 paid as a deposit. 12. According to Mr Chan of The Rich Company, he first put in "$76,100" being the price difference between the acquisition price of the Chungs and the selling price to Mr Yeung. He discovered that that was a mistake as $20,000 would be paid immediately as a deposit. Then he had it deleted and intended to put in $56,100, but he made a further mistake by writing down "$10" which he again deleted before he put in the correct sum of "$56,100". 13. The allegation of the agreed payment of 10% of the acquisition price at the time when the balance of the price difference of $56,100 was payable on 14th March is incredible. First of all, the Agreement was in the Chinese language which Mr Chung fully understood. He could well read for himself that on 14th March, only the balance of the price difference in the sum of $56,100 would be payable. It is difficult to accept that if the 10% of the acquisition price had been agreed to be payable also on the 14th March, he would have allowed only $56,100 to remain in Clause (2) under "Manner of Payment". If Mr Chung is correct, the sum in this Clause (2) should have been $156,490 (i.e. $56,100 plus the 10% $100,390). Mr Chung would surely still remember that he had paid $100,390. The figure of $56,100 should have appeared to him as a much smaller sum than $100,390. Moreover, Mr Chung was not wholly without experience in property transactions. It is also difficult to accept that the total sum payable of $156,490 had to be written down in two separate sums of $100,390 and $56,100. Moreover, if $156,490 together with the deposit of $20;000 had been agreed to be paid by 14th March, then the balance of the purchase price in Clause (3) under "Manner of Payment" in the Provisional S/P Agreement should have been less than $1,003,900. It should have been $903,510 only. Mr Chung is also looking after a building for his grand-uncle in the New Territories for a handsome monthly wage. He would have noticed the extra sum of over $100,000 in the final payment. ($1,003,900 - $903,510 = $100,390). I totally reject the allegation of an agreement to pay another 10% of the Chungs' acquisition price by 14th March. 14. As at and shortly before the Provisional S/P Agreement, the market was not very lively. The Chungs had been trying to dispose of this property for some time. They had been unsuccessful once with Madam Wong at the end of January 1991. Mr Chung was then also in need of cash for his house in the New Territories, which he had been waiting for some 12 years. Madam Wong had failed to meet her obligation to pay. There was every good reason for the Chungs not to insist on a heavy advanced payment involving an additional 10% of their own acquisition price. 15. According to Mr Shea and Mr Chung, there was no appointment for 3:30 in the afternoon. It is common ground that the parties did meet one afternoon and, according to Mr Shea and Mr Chung, the meeting took place on 12th March and not 13th March. Mr Shea explained that he had a call enquiring as to whether Mr Chung was in his office sometime in the afternoon, and he replied in the positive. Mr Chung and his grand-uncle were in to see Mr Shea on a completely different piece of litigation. Mr and Mrs Yeung, according to Mr Shea, appeared without an appointment. Mr Chung first spoke to Mr Yeung for a while, while he, Mr Shea was working in the office. 10/20 minutes later, he came back to Mr Yeung and Mr Chung and he spoke to Mr Yeung in the absence of Mr Chung who had then walked back to his grand-uncle. In the beginning, Mr Shea allegedly declined to give advice to Mr Yeung claiming that Mr Yeung should consult his own solicitors. Later, he propounded on what he understood to be ambiguities in the Provisional S/P Agreement for as long as 10 minutes. He said he also mentioned the alleged 10% of the acquisition price as a deposit and the New S/P Agreement not having been signed by Mr Chung. He made reference to the absence of a provision for "subject to contract", but his advice abruptly stopped there, and he resumed his previous reluctance to advise Mr Yeung on the meaning of "subject to contract". This all sounds very artificial. Probably, this was included to meet the comment Mr Yeung said he made on the absence of "subject to contract". Then, according to Mr Shea, Mr Chung came out to the reception area for a cup of water, and Mr Chung appeared to wish to speak to Mr Yeung. Mr Shea stopped him, telling him "not to say anything ... if you want to sell the flat to him again, you talk to him and I'll walk away, but if you don't want to sell the flat to him, you had better not take too much Mr Yeung's time". Thereupon, Mr Chung told Mr Yeung he would not sell the suit premises to him "again". It was not explained why Mr Chung had waited all this time until the last moment to tell Mr Yeung to his face that he would not resell the flat to him. 16. Mr Chung's sequence for this meeting was different. He and his grand-uncle had been in the office of Messrs W.K. To & Co. for 3 consecutive days. He denied the call on the evening before and disclaimed any prior arrangement to meet in his solicitors' office. He maintained that on seeing Mr Yeung he made no promise to resell the flat to him. His reasoning was difficult to fathom : on the one hand Mr Chung said that he was "in fact very happy to sell the unit to him" and "all along ... (he) was always willing to sell the property to him, but (he) had to make it clear the wording of the document such as the date of payment and method of payment.. (He) had never demanded a higher price". On the other hand, he seemed to have decided not to sell or resell to Mr Yeung because of Mr Yeung's "collaboration with Mr Chan and (Mr Yeung's using of) dishonest methods". Mr Chung himself said that Mr Yeung told him "chiefly the idea was not his ... the writing was done by Mr Chan". Mr Chung further claimed that Mr Yeung explained that he did not "write clearly ... that (he) would pay the price difference and the 10% deposit to (him) on 14th March" because Mr Yeung had no sufficient fund to pay as large a sum as "$170,000 something on the 14th March". Mr Yeung would not have known on 13th March if he could succeed in his bank application. Moreover, as it happened Mr Yeung was more than capable of putting up $170,000 odd on 14th March. Furthermore, the parties were then at the office of a firm of solicitors Mr Chung trusted and Mr Yeung was or must have been, in my analysis, responsive to all demands. So much was said about the "additional" 1% commission in the New S/P Agreement, but any such matter could also have been satisfactorily resolved by Messrs W.K. To & Co. Mr Chung claimed that he left Mr Yeung with Mr Shea who subsequently "came to fetch him" for the following statement to be made to Mr Yeung: "If you decide to resell it to him, say so, but if you don't want to sell it to him, tell him so. It is no good for him to continue to hang on here". Thereupon he told Mr Yeung that he "was not reselling it to him". 17. Mr Shea disagreed as to the date of the meeting, the manner in which the parties came to meet, the sequence and contents of his conversation with Mr Yeung. His version is different from even that of Mr Chung's. It was unlikely that the Yeungs, a working couple, would have found it convenient to leave their offices without a pre-arranged meeting time either on a Tuesday (12th March) or a Wednesday (13th March). It is equally improbable that a man claiming to be Mr Yeung made just one telephone call at about 3 p.m. for pinning down the whereabouts of Mr Chung. The version of Mr Shea's as to what transpired at this afternoon meeting is quite unreal, with Mr Chung and himself speaking in turn to Mr Yeung, culminating in the final declaration of Mr Chung that he would not sell the suit premises to Mr Yeung "again". 18. The defence is primarily one of cancellation by mutual consent of the Provisional S/P Agreement. The improbability of a cancellation has been highlighted. Cancellation is alleged to be on 11th March. Some explanations were sought to be given as to why refund of the $20,000 deposit had to be postponed. The case of the defendants is that Messrs W.K. To & Co. were briefed on cancellation a day prior to the parties meeting in their offices, but the refund cheque was belatedly marked for 14th March, the date when the balance of the price difference was to be paid under the Provisional S/P Agreement which had allegedly been cancelled much earlier. 19. I do not propose to dwell on the other details given by Mr Chung. The defendants' case on the alleged 10% of their acquisition cost 'being payable on 14th March together with the balance of the price difference, the alleged cancellation of the Provisional S/P Agreement on 11th March and the "chance" meeting thereafter between the Yeungs and Mr Chung is not one to which any credence could be given. 20. Mr Chan of The Rich Company described the events as such that in a steeply rising property market the Chungs were trying their level best to attack the Provisional S/P Agreement and destroy the bargain made. Mr Chan told the Court that Mr Chung had complained by telephone of uncertainties and eventually came to his office soon after the property market had rocketed "making a fuss" over the alleged omitted 10% and threatening not to sell. Quite uncommitted then obviously, Mr Chung agreed to and did come to the office of The Rich Company on 11th March for airing his complaints. He had never stated categorically until the last meeting that he was not selling to Mr Yeung. The alleged cancellation of the Provisional S/P Agreement can only be described as fanciful. He was making noises about vague terms like "prior to (Yap For)" and "Bau Gung". For the reasons I shall later give, the parties clearly understood that the transaction was to be finalised when the Chungs were ready and able to assign the flat and give possession of it to Mr Yeung. Mr Chung read Chinese, and he was aware the additional 10% of the acquisition price was not on the document. He was not a new comer to property sales. His excuse for not selling or reselling is puzzling. 21. Mr Chan told the Court that it was an oversight not to have similarly deleted the requirement to pay 1% commission by the vendor in the New S/P Agreement. According to Mr Chan, Mr Shea of Messrs W.K. To & Company had contacted him and told him that there was no problem with the New S/P Agreement. Mr Shea's version is different. He claimed that he merely communicated with Mr Chan to confirm the source of the faxed New S/P Agreement. As I have said, we know not why there should be any need to clarify with Mr Chan. Mr Shea's evidence on the last meeting leaves much to be desired. 22. As for demeanour in court, there was a sharp contrast between Mr Yeung and Mr Chan on one hand and Mr Shea and Mr Chung on the other. I have a poor impression of Mr Shea, but I take into account the manner in which he responded might have been brought about by caution of a litigation clerk. However, as wintesses, the contrast is just much too distinct to be ignored. 23. Mr Chan also disclosed that on 12th March when he telephoned Mr Chung, Mr Chung told him that he did not want to sell the suit premises and in the evening on the same day, he duly conveyed Mr Chung's message to Mr Yeung. If Mr Chan's recollection of the date is correct, there would have been little likelihood for Mr Chung, as Mr Yeung claimed, to have dwelt on his sincerity to sell on the 12th. And Mr Yeung could not have been surprised on 13th March when he was finally told by Mr Chung that he would not sell the suit premises to him. Counsel for the plaintiff suggested that Mr Chan was probably inaccurate on the date and that Mr Chan must have communicated with Mr Chung after the afternoon meeting on 13th March, and liaised with Mr Yeung on that evening that day. This aspect is not, however, central to the issues I have to decide. 24. Counsel's endeavour to explain the date seems quite acceptable. But essentially, I was greatly impressed by Mr Yeung and Mr Chan, and looked at it in that light counsel's surmise is certainly probable. Mr Yeung struck me as a good witness. I have absolutely no hesitation in preferring his evidence on events and dates. Mr Chan appeared to be a witness who tried to give as fair an account as he could to the Court. Both Mr Chung and Mr Shea were shifty in their demeanour. It is difficult to describe precisely their performance in the witness stand. Also demeanour could be deceptive, but the contrast with that of Mr Yeung and Mr Chan is too sharp for me to disregard it. In my assessment and evaluation, being more closely connected with these events, Mr Yeung is decidedly more accurate and reliable in details. I accept his evidence. Subject to counsel's offered explanation reconciling the date of the 12th March which I find probable, I also accept Mr Chan's evidence. As for Mr Chung and Mr Shea, they were together or separately giving very strained versions. There was no real need for Mr Chan and Mr Yeung to involve Mr Shea. I prefer the evidence of and on behalf of plaintiff without any reservation. 25. I find that there was no agreement to pay an additional 10% of the acquisition cost on 14th March. I further find that the Provisional S/P Agreement was not cancelled as alleged or at all. The Chungs were definitely present, being well aware of the preparation of the New S/P Agreement on 11th March. 26. If I were permitted to construe the Provisional S/P Agreement in its Chinese language, it would appear to me to be almost ridiculous to suggest that there was any real obscurity. I have seen these printed forms since 1959. But I am to confine myself to the undisputed version of the translation. The Official Languages Ordinance, Cap.5 has not been said to have any application here. Clause (3) of "Manner of Payment" of the Provisional S/P Agreement reads :
The "Remarks" column in the Provisional S/P Agreement reads:
27. The Chinese characters in Clause (3) for "occupation (possession)" are "Yap For". The Chinese characters for "completion" in the "Remarks" column are "Sau.Lau". The Chinese characters for "the purchaser will be responsible for the mortgage instalments" are "Bau Gung". I give the Chinese characters solely for identifying the terms in question. 28. The purchase price was $1,080,000 and the Chung's own acquisition price was $1,003,900. The price difference gained on the re-sale was $76,100. The flat was mortgaged for 90% of its acquisition price. The agreed stages were clearly for a deposit of $20,000 to be then paid with $56,100 payable later on 14th March 1991 and the balance of the purchase price in the sum of $1,003,900 payable "prior to occupation (possession)". In the meantime from 15th March 1991, the purchaser was to meet the mortgage instalments. On completion, the mortgage principal in the mortgage instaments paid up-to-date would be refunded by the vendor to the purchaser. If the Chungs, as vendors under the Provisional S/P Agreement, had been entitled to receive the whole of the purchase price of $1.08m eariler, there would have been no further need for the Chungs' property mortgage to be maintained. The Chungs would have had enough money to and should redeem their mortgage for the property to pass on to Mr Yeung free from incumbrances. The clear purport of the transaction was to allow the Chungs the price difference before they were ready and able to assign and to give possession. In the meantime, the mortgage instalments on 90% of the acquisition price were to be the responsibility of Mr Yeung, the purchaser. Obviously, if Mr Yeung was to reduce any mortgage principal, the same should be refunded to him when the transaction was finalised, i.e. on "completion". The Chungs had themselves paid 10% in their own acquisition and would bear the loss of the use of that 10% in the meantime. When the time finally arrived when the Chungs as vendors were ready and able to assign and give possession of the suit premises, Mr Yeung, as purchaser, would not be allowed to enter into occupation or take . possession before he paid the balance of the purchase price in the sum of $1,003,900. To me, that is what was said in Clause (3) under "Manner of Payment" in the Provisional S/P Agreement. He could have no occupation before he paid the balance of the purchase price. At that time, on "completion", the Chungs' own acquisition mortgage on 90% of the acquisition price would have to be redeemed for the assignment and on the Chungs getting the whole of the purchase price, they should refund to Mr Yeung as purchaser whatever mortgage principal in the mortgage instalments already paid by Mr Yeung under the "Remarks" column. Mr Yeung was, in effect, to bear the mortgage interest on "completion" i.e. when the Chungs were ready and able to assign and give possession. That clearly is what was provided in the "Remarks" column. That is, in my view, the meaning of "completion". If Mr Yeung was obliged to pay the balance of the purchase price in the sum of $1,003,900 at any time before "completion", there would be a possibility that Mr Yeung would have to pay the whole of the purchase price of $1.08m plus 90% of the acquisition price long before "completion". That cannot be the true purport and effect of Clause (3) in conjunction with the "Remarks" column in the Provisional S/P Agreement. Clause (3) refers specifically to "occupation". As a matter of fact, it. is "occupation (possession)", physical occupancy and legal possession. The court is no breaker of a bargain if ever that could reasonably be spelt out from a signed document. In my judgment, that is the way in which Clause (3) and the "Remarks" column in the Provisional S/P Agreement should be construed. This construction is consistent with both the literal meaning and the meaning in the context of the whole Provisional S/P Agreement. 29. If Clause (3) were to be read as if it contained no reference to completion and if the word "completion" in the "Remarks" column were not to be regarded as referrable to completion but a time frame without a specific date for the refund of paid mortgage principal in the mortgage instalments, the Court would imply that completion was to be had within reasonable time in the circumstances of this case, i.e. when the vendor were able and ready to assign and to give possession. In 'this assumption, the same result would be achieved. 30. Further, as Mr Yau submitted, if the Provisional S/P Agreement contained any obscure provisions referrable to the time for completion in its Clause (3) and/or the "Remarks" column, then ambiguity would seem to lie in these provisions being capable of conveying the meanings of (a) completion of the structure, (b) completion of the building, (c) formal completion upon the issuance of an Occupation Permit, (d) completion when the Authority permits the property to be transacted, and (e) completion when the vendors are ready and able to assign and give possession. In which case, Mr Yau must be correct that it would be open to this Court to have regard to extrinsic evidence by which the Court would inevitably be driven to the conclusion that for the purposes of the Provisional S/P Agreement, completion means and must mean when the Chungs, as vendors, were able and ready to assign and to give possession of the suit premises in accordance with the terms of the Provisional S/P Agreement. 31. After all, the word "completion" usually connotes the meaning of "the complete conveyance of the estates and the final settlement of the business". See Killner v. France [1946] 2 AER 83. 32. Miss Au Yeung for the defendants, relied heavily on Johnson v. Humphrey (1946] 1 AER 460 where there was an oral agreement to sell a house on an express promise that the vendor would not be required to deliver vacant possession until other suitable arrangement for herself had been made. A document was signed by the vendor on payment of a small deposit. Thus, the vendor orally agreed to give vacant possession only when she was ready. No time limit was set as to when she should be so ready. It was held that this material term was not incorporated in the document which was ruled by Roxburgh J. (as he then was) to be an insufficient memorandum in writing for enforcement. In fact, no provision in the document signed by the vendor was specifically referrable to "completion". On the assumption that his holding of an insufficient memorandum was erroneous, Roxburgh J. proceeded to consider, contrary to his holding and as if all the material terms had been embodied in the document, whether "completion" was dealt with. The only remote reference to "completion" was in the phrase "... the balance to be paid immediately on possession". On the understanding that "completion" generally meant assignment and the final settlement of the business, it was assumed by all that payment of the balance of the purchase price was referrable to, for the purposes of the attempted exercise in Johnson v. Humphrey, "completion". Hence, the phrase under consideration there was read as "... completion (the balance) to be given (paid) immediately upon possession" or "... completion on possession". 33. In this action, the phrase "payment of the balance of the purcahse price" does not stand alone. The provision in the "Remarks" column of the Provisional S/P Agreement offers an additional aid to its interpretation. Johnson v. Humphrey is further distinguishable by the fact that time for possession in "... completion on possession" was not specified. Roxburgh J. was not "prepared to hold that in a contract of this sort, where completion (was) made referrable to possession and nothing (was) said as to when possession (was) to be given, the Court (would) imply any term whatever as to when possession should be given." Johnson v. Humphrey (supra) p.463, Letter F. For the purposes of the exercise undertaken by Roxburgh, J., "completion" was referrable to "possession" alone as opposed to the many possible events to which the word "completion" in the "Remarks" column of the Provisional S/P Agreement in this case could refer. The term "occupation (possession)" in Clause (3) of the Provisional S/P Agreement is also arguably referrable to more events than one. There is no room here for attempting the same exercise in Johnson v. Humphrey. 34. The oral evidence in this case, if admissible for construction, would also support the same conclusion. 35. "Prior to (Yap For)" i.e. "prior to occupation (possession)" in Clause (3) was allegedly given to understand to Mr Chung as 14th March 1991. He claimed that that meaning was derived from Mr Chan. Mr Chung must have been quite confused because he used the Chinese characters "Yap For" also for the word "completion" in the "Remarks" column. Later, he changed "completion" to the Chinese characters "Sau Lau". He then claimed that "completion", i.e. "Sau Lau" in the "Remarks" column was explained to him as assigning the property and delivering possession for occupation after the issuance of the Occupation Permit. 36. At another time, Mr Chung testified that his understanding was that "after the Occupation Permit, the rest of these 90% balance would be paid to me in one go and then after the Occupation Permit, I would have to refund to the purchaser the principal part of the instalments paid during those months". He seemed to equate the words "Yap For", i.e. "occupation (possession)" in Clause (3) of the Provisional S/P Agreement with taking actual possession for occupation. But he hastened to repeat his assertion that Mr Chan allegedly advised him that "Yap For", i.e. "occupation (possession)" meant 14th March 1991. That is evidently an attempt to reiterate his allegation whenever possible without paying any regard to his overall evidence. 37. Mr Chung "had no doubt as to the contents of the Agreement by itself". He understood the issuance of the occupation Permit as a "must" before the assignment of the property to Mr Yeung could be executed or a "must" for possession of the suit premises to be taken delivery of i.e. "Sau Lau". To him "Yap For" i.e. "occupation (possession)" meant entering into occupation. He heard Mr Chan explaining to Mr Yeung that the 90% "was to be discharged by him by paying the monthly mortgage instalments until the Occupation Permit was issued". He clearly understood that occupation was tied to cessation of the mortgage instalments. He was aware that the goal was the final settlement, the assignment and the delivery of possession for occupation. 38. Mr Chan of The Rich Company took occupation as occupation for the purpose of residing. At another time, he referred to "occupation" as referred to notification by the developers of the readiness of the Sceneway Garden for occupation. He also understood it as meaning the time when the flat was to be "received from the developers". Mr Chan also made references to completion of the transaction and assignment of the flat. Mr Chan further observed that at the time of the signing of the Provisional S/P Agreement, it was understood by all that although balance of the Purchase Price was expected to be paid in February or March, 1992, the developers were not in a position to give the exact date for occupation. According to Mr Chan what was talked about before the signing of the Provisional S/P Agreement was that occupation of the flat meant "the time the developers gave information to the property owners, through their solicitors, that the property was ready for occupation". 39. Mr Yeung claimed that all understood that "the property was received from the developers" and that "at the time of receiving the property the vendors (would) repay the purchaser the principal paid out. By this remark, (he) (understood) it to mean that this transaction had to be completed before the property was assigned". 40. It is not always possible to rationalise all their answers, but the emphasis and understanding from all was "ready for occupation", "developers ... to give ... date of possession", "received from the developers", "assignment" "transaction ....completed". In my view, their evidence, understood broadly, supports the construction I have found favour with. 41. I attach no significance to Mr Chung's peripheral allegations of Miss Chan's intervention on 3rd March for the alleged intended setting out of the 10% acquisition price in the Provisional S/P Agreement and her deletion of "Yap For" therein on 11th March. 42. Mr Yeung was willing, able and ready to perform his part of the bargain throughout. He was even prepared to replace the existing provisions of the Provisional S/P Agreement by those in the New S/P Agreement, the terms of which would provide payment of the balance of 10% of the purchase price (not, be it noted, 10% of the acquisition price) on 14th March and the balance of the purchase price on 13th April. Judging from the Yeungs' eagerness to acquire the suit premises and the rising market and Mr Yeung's financial capability on account of joint income, family support and a bank mortgage, Mr Yeung would probably have accommodated all Mr Chung's demands. The sending over of $88,000 and not just $56,100 was pursuant to a request made of Mr Yeung by his own solicitors for paying this $88,000 into their firm, a request so made in what must have been an unsettled situation at that time. In any case, the offer of $88,000 must include the $56,100 which Mr Yeung was obliged to pay under Clause (2) of the Provisional S/P Agreement. In any case, the Chungs wrongfully repudiated the contract and that would absolve Mr Yeung from going through the ritual under the Provisional S/P Agreement. See Linkbrain Ltd. v. Fujian Finance Company Limited [1990] 2 HKLR 333. 43. The correspondence from Mr Yeung's solicitors cannot be said to be wholly inconsistent with the subsistence of the Provisional S/P Agreement having regard to the time frame in which these letters were written. Even if some errors had been committed, they would not have the effect of annulling an enforceable agreement. 44. On the force of.Hasham v. Zenab [1960] A.C. 316, pp.329-330 and page 2136 Seton's Forms of Judgment and Order, 7th Edn. precedent section 1.1, specific performance, including the declaration of rights, in terms of that precedent be decreed against both defendants. Counsel are invited to jointly present a draft order for my approval. 45. No special damages relevant to the plaintiff's claim have been pleaded nor pursued in these proceedings. Legal costs and expenses are matter for taxation. Consequently, the counterclaim is dismissed. Subject to what counsel have to say, costs of the action and the counterclaim be both costs against the defendants in favour of the plaintiff. I so grant judgment.
Representation: Mr Albert Yau, instructed by Anthony Hann & Co, for plaintiff Ms Queeny Au-Yueng, instructed by Messrs. W.K.To & Co, for 1st and 2nd defendants |