Wong Kwok Lai-ying v. Teh Hong Kong Rubber Manufactory Ltd

HCA000733/1976

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. COURT OF 1976

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Coram: Cons, J.

Date of Judgment: 2nd February, 1977.

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JUDGMENT

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1. The Hong Kong Rubber Manufactory Ltd., the defendant to this action, has been established for a long time. It was incorporated in 1935 and most of the original directors still, I think, hold seats upon the Board. They are naturally now elderly men. The exception is Chan Yick-ming. He was elected to fill the vacancy left by the death of his father in 1961. I get the impression that until the dispute which is now before this court, the Board had been a very harmonious body. One senses the strong bonds of affection and respect that had grown up from many years of working together, although there has not been much working together in the industrial field for some time now. The company closed its factory in Kwun Tong over ten years ago. I do not know if it continued in any other line of business, probably not. But it kept in being and derived income over the years by renting out the factory premises. However, in March 1973 the Board decided that the time had at last come for the company to sell the factory and go into liquidation. This decision was approved by the shareholders at a general meeting the following month. A sub-committee of three directors was formed to deal with the sale. It comprised the Chairman of the Board, one Haking Wong, Chan Yick-ming and the plaintiff's husband, one Wong Shut-chi. Nothing came of the sub-committee's actions. It was not, as everybody knows, a good time to dispose of real estate. As time passed conditions changed and the idea of selling the factory was revived in July 1975. The same sub-committee was appointed at a meeting on the 21st. They were specifically directed that the sale should be by way of sealed tenders entrusted to a bank. For some reason that escapes me now that arrangement was not carried out. However, the willingness of the company to sell became known around and offers were made direct to the company. They came in three letters from solicitors, although there were in fact only two purchasers interested. One letter merely raised an offer already made. The highest offer was contained in a letter dated 24th September and was 12 million.

2. These offers came to be considered at a meeting of the Board held on the afternoon of Friday, 26th September 1975. Eight directors were present. These included the Chairman, Haking Wong, the plaintiff's husband Wong Shut-chi, Chan Yick-ming and one Li Pik-shing, a director who had other commitments and seldom attended Board meetings. The plaintiff was also present at the meeting. She was not a director but was there as another prospective purchaser of the factory. There is some dispute as to exactly how she came to be invited to that meeting, but this much is clear, she was there at the invitation of the Board and the Chairman at least was hoping, if it turned out to be possible, that she would be the actual purchaser of the factory. This was part of the "family" approach. Thus the meeting had a dual character. On the one hand it was a meeting of the directors to decide to whom they would sell and at what price. On the other hand it was a meeting between the Board and a prospective purchaser to discuss and perhaps make an actual sale.

3. Basically what happened at the meeting was this. Haking Wong made known the contents of the offers that had been received from the solicitors. He himself did not think very much of those offers and expressed his opinion to that effect. He mentioned $15 million as being a suitable price. The plaintiff made no answer. He reduced the figure by one, then perhaps two million dollars. He added that if necessary he could personally lend the plaintiff $6 million towards the purchase price. Still she did not answer. It seems that she looks upon silence as a useful bargaining tactic. Eventually she made an offer of $12.05 million, or, as she put it, $50,000 more than the highest offer from outside. Added to this in her favour was the factor that she did not require vacant possession. She intended to keep the factory as an investment.

4. This part of the meeting did not take place quite as simply as I have just outlined. Two other incidents occurred. The first was the raising of a query whether the plaintiff, being the wife of a current director, was competent to purchase the property at all. I would think that this doubt was introduced by Mr. Chan Yick-ming. At any rate it was he who performed the task of telephoning the company's solicitor, Mr. Peter C. Wong, for advice. It would seem that the advice was favourable. Then secondly Chan Yick-ming knew of yet another party who was interested in purchasing. Again, he had to make telephone calls and eventually came back with an offer of $12.3 million. Both the plaintiff and the plaintiff's husband deny that this figure was mentioned but I am satisfied that it was. All of the other directors refer to it in their evidence and, apart from this, the evidence of the broker to whom Chan Yick-ming telephoned is that he was authorised to and did make an offer of that amount. The broker was severely cross-examined and criticised by counsel for the plaintiff for not running his business on lines similar to those adopted by established estate agencies in London. I think, with respect to counsel, that the criticism was ill-founded. A great many land transactions in this Colony are still arranged in the first instance by word of mouth through men whose only office is a tea-house and whose only qualifications are their friends or contacts. I am satisfied that this gentleman told me the truth and that he did in fact on that afternoon pass on an offer of $12.3 million. I find it then impossible to believe that Chan Yick-ming did not mention this amount when he turned back to the assembled company.

5. There is some doubt as to whether that telephone conversation took place before or after the plaintiff had made her offer of $12.05 million. To my mind it does not really matter. Whichever order the figures came in, once both were out the meeting was at an impasse. On the one hand there was an offer of $12.3 million. To accept that would obviously be in the better interest of the company, an interest which the Board had a duty to observe. On the other hand the plaintiff was the wife of one of their own number. It was Li Pik-shing, the director who seldom came, who thought he saw the way out. He proposed that the company should sell to the plaintiff, but at the figure of $12.3 million. He did not use the phrase "twelve point three million" as such, or even "twelve million three hundred thousand". He used the words "one two three". These words had at that stage been adopted by the Board as a convenient abbreviation. It is not now possible to know the exact words that Li Pik-shing used for the rest of his proposition. More than one form has been suggested but the exact words are not material. I have no doubt that their import was as I have just said that the company should sell to the plaintiff at the price of $12.3 million. This is what all the other directors understood. They agreed. The resolution was carried and duly entered in the minute book. The meeting broke up. The plaintiff, as one would expect, said nothing. But the directors shook her hand and congratulated her. They all thought that she had bought the factory. So did the plaintiff, but not at the price of $12.3 million. She had been deaf to that figure throughout, despite the number of times it had been mentioned both in the discussion and in the dictation and subsequent reading out of the minute. She had concentrated on the undoubted fact that at no time had she herself spoken any figure above 12.05 million and she left the meeting confident that that was the price at which she had purchased. She did not discover her mistake until later the same evening when she discussed the events of the afternoon with her husband after dinner. Her explanation was that when Li Pik-shing made his proposal she had understood it not as a proposal to sell to her at one two three, i.e. $12.3 million, but as a proposal that on the count of three all the directors would in unison chant their agreement to sell to her, that is at her price of $12.05 million.

6. I have puzzled long as to how the plaintiff could have been unaware of the figure of 12.3 million. I can accept Mr. Neill's comments that she was inattentive. It was frequently obvious when she was giving evidence that she tended to follow her own lines of thought to the exclusion of what was being said to her. I can understand that she would not pay much attention to the dictation of the minute and the subsequent reading back. That was a matter which concerned the directors. But I would have expected her to pay attention to Chan Yick-ming. What he was doing was very much a matter to her interest.

7. I have also puzzled long as to how a woman as intelligent as herself could have construed the action of Li Pik-shing as something of a kind that is more appropriate to a children's party than a board meeting disposing of property worth several millions of dollars. But it is partly the sheer incredibility of that construction which leads me to think her belief was genuine. She would not have deliberately invented an explanation which puts her in such a ridiculous light. The other reason is the speed with which she made known her complaint. She was on the telephone that very evening to Li Pik-shing and to another director, one Lee Sau-fai, who was what may be described informally as the company's secretary.

8. What then is the legal position? The Board thinks it has sold to the plaintiff at $12.3 million. The plaintiff thinks she has bought at $12.05 million. Mr. Godfrey, for the plaintiff, submits that there is a valid contract binding on both parties. He urges that the court looks not to the minds of the parties, but to what the impartial observer would assume from their external conduct, the view that would be taken by the intelligent fly on the office wall, sometimes called the "objective test". In the 9th Edition of Cheshire and Fifoot's Law of Contract at p.20 the learned author analyses the continental theories that have influenced the growth of our law of contract, and then at p.22 returns to the common law with a quotation from the year book of 1478:

Later on the same page the author gives his own opinion:

He returns to the subject in the Chapter on Mistake at p.225. Mr. Godfrey adds two quotations from more recent authorities. The first is from Smith v. Hughes⁽¹⁾, a case well known to students as "new oats for old", where at p.607 Blackburn, J., says

The second is from McCutcheon v. David Macbrayne Ltd.⁽²⁾. Where Lord Reid quotes from Gloag on Contract:

With respect to Mr. Godfrey I do not think the remarks in the two further cases of In re Hoyle⁽³⁾ and Chu Kim-Leung v. Wong Suk-yee⁽⁴⁾ are of any assistance. They were directed to the writing necessary to evidence a contract and not to the formation of the contract as such.

9. Mr. Neill for the company puts it another way. He suggests that price is a fundamental provision in a contract for sale and that if the parties are not "ad idem" on the price then in law no contract is formed. He referred me to three authorities. The first is Felthouse v. Bindley⁽⁵⁾, a case also well known to students, for the proposition that acceptance of an offer is not to be inferred from silence. There a nephew sold a horse to an uncle. The nephew thought the price was 30 guineas. The uncle thought the price was £30. When the misunderstanding was discovered the uncle wrote to the nephew offering to split the difference. But at the date material to that action the offer had been neither accepted nor rejected. The case turned principally upon that offer and the silence that followed. But referring to the early history Willes, J., at p.875, says:

10. The second authority was Parkes v. Parkes⁽⁶⁾. This is a more recent case in the matrimonial field. Husband and wife had been long parted. When the new divorce laws came into effect the husband petitioned on the ground that they had lived apart for at least five years, etc. The wife was minded to oppose on the ground that it would result in grave financial or other hardship to her. But she withdrew her opposition when satisfactory provision for her had been agreed between solicitors. The petition went through smoothly, but shortly after the decree nisi was granted it was found that the land attached to the house which the husband had agreed as part of the provision to transfer to the wife had been secretly disposed of by him and also that there was misunderstanding as to whether the monthly amount to be paid was to be "less" or "free of" tax. At p.872 Denning, L.J., said:

11. The third authority is Woodhouse A.C. Israel Cocoa Ltd. S.A. v. Nigerian Produce Marketing Co. Ltd.⁽⁷⁾. This case arose from a series of contracts to purchase cocoa. Payment was to be made in Nigerian pounds in Lagos. This caused some inconvenience to the buyers, who therefore wrote to the sellers asking permission to pay in pounds sterling. The sellers wrote back agreeing. The change was not very important at the time. Nigerian pounds and pounds sterling were of equal value. Then in 1967 the pound sterling was devalued by some 15%. The matter thus became very important. The buyers contended that they had only to pay the same number of devalued pounds sterling as before, the sellers that there should be enough when exchanged to cover the contract value. The dispute was protracted. It went first to arbitrators, who were unable to agree. Then to an umpire, who in his turn was asked to state a case for the decision of a Judge of the High Court. That decision was appealed and in the end the matter was taken on to the House of Lords. Many points were there dealt with but Mr. Neill relies only on the passage in the judgment of Lord Cross at p.767:

12. Which then is the correct approach? I must confess I have not found this an easy question to answer. It has been too easy to become lost in academic wanderings. But ultimately I have concluded that as a general rule the approach of Mr. Godfrey is to be preferred. It is a realistic approach suited to the practical field in which courts of law operate. The failure of parties to be mentally "ad idem" will provide some exceptions to the general rule, as for example where there is a "mistake" as to the identity of the subject matter: Scriven v. Hindley⁽⁸⁾. But I see no reason to extend the exception to individual terms in a contract that is otherwise unexceptionable, not even if the term is , like the price, an important one.

13. I do not think this approach is inconsistent with the authorities quoted by Mr. Neill. In Parkes v. Parkes⁽⁶⁾ the wife's solicitor agreed to the formal transfer of the matrimonial home, that is the matrimonial home as it used to be. But in point of fact it was no longer so. The husband had already disposed of part of it. The parties were not talking about the same subject matter. It was within the exception. An alternative approach in the particular circumstances was that the husband had misled the wife's solicitors so that it was inequitable to allow him to rely upon the subsequent agreement. Phillimore, L.J., appeared to be influenced by the latter principle, Denning, L.J., probably by the former. Both were influenced by the fact that, whether inadvertently or otherwise, the husband's full financial position had not been disclosed or taken into consideration and it must be remembered that in matters such as these the courts nowadays have a protective jurisdiction. Woodhouse A.C. Israel Cocoa Ltd. S.A. v. Nigerian Produce Marketing Co. Ltd.⁽⁷⁾ was decided in this respect purely upon the proper construction to be put upon two written documents. Once that was established the parties were bound by that construction. The remarks of Lord Cross were made in the context of a construction of one of the documents that was not generally accepted by the House.

14. The most difficult of these three authorities is Felthouse v. Bindley⁽⁵⁾. The facts of that sale at first glance appear to be on all fours with the present situation. Although the issues were different. There they were bedevilled by the subsequent intrusion of the auctioneer who by inadvertence sold the horse to a third party. If this had not occurred the judgment might perhaps been different (see the judgment of Keating, J.). But the true distinction is, I think, that the court there did not go back to the facts of the original sale. It started its survey of the legal position only from the offer of the uncle to split the difference. The court did not stop to see what the intelligent horse-fly would have made of the words and conduct of the two men at that time of the first "sale". It concluded without question that there was no agreement. This may, of course, have been the true situation. The two men may never ostensibly have come together on the price. But that is not the present situation. The intelligent fly in Haking Building on 26th September 1975 would have said without hesitation that the plaintiff had accepted the price of $12.3 million. Silence alone may not amount to agreement. But in the circumstances of that afternoon agreement is the only conclusion that can be drawn from the conduct of the plaintiff.

15. Once the fact of agreement is established it is common ground that the agreement contained a condition which required the payment of a deposit of 20% of the purchase price before 10th October following. That deposit was not paid. The first question that then arises is whether that condition is a condition precedent, that is whether it retrospectively prevents the factual sale from taking legal effect or whether it merely gives a right to rescind, leaving the contract effective unless and until the right is exercised. The evidence of Mr. Peter C. Wong, a solicitor whose practice consists mostly of conveyancing, suggests that the former construction is the one generally adopted within the Colony. There is judicial support for the same view in England: Myton Ltd. v. Schwab-Morris⁽⁹⁾. In that case Goulding J. said at p.336B:

16. I would respectfully adopt those comments as a correct statement of the law in Hong Kong. I appreciate that there is an immediate distinction from the circumstances with which I am now concerned. The learned judge spoke of the position where the deposit is required "on the signing of the contract", whereas the Board in the present case were prepared to give the plaintiff fourteen days. But I do not think this affects the general principle. It might be otherwise if the time allowed were a very long period. This might indicate that the parties did not intend the deposit to be "an earnest of the purchaser's ability and intention to complete" but more simply an instalment of the purchase price. Or there may be other circumstances particular to an individual case which would take it out of the general rule. I see nothing of that nature in the present case.

17. My conclusion that the requirement to pay the deposit before 10th October was a condition precedent and not one that merely gave a right to rescind is perhaps little more than academic. The second question is more important, that is are there any circumstances which would have the effect of extending the period allowed to the plaintiff and which would preclude the company from relying upon the 10th October as the relevant date. The plaintiff contends that there are several. In order to understand them it is necessary to give at least an outline of what is said to have occurred after that meeting of the Board of the 26th September.

18. As I have already said, the plaintiff discovered her mistake on the evening of the same day. She immediately telephoned Li Pik-shing. Her husband also spoke on the line. Their evidence was in effect that Li Pik-shing sympathized with the plaintiff's mistake, did not think it a serious matter and could be put right to a certain extent by leaving the transaction as it currently stood but allowing a 1% discount when the balance of the purchase money came to be paid. That would have been six months later. The plaintiff says she agreed to this. Li Pik-shing agrees that there was a telephone conversation in which the plaintiff claimed to have misunderstood, but he denies anything further. He says that he replied there was no possibility of misunderstanding and that was as far as the conversation went. There was no mention of 1% or any discount of the price. After that conversation the plaintiff and her husband telephoned Lee Sau-fai. According to their evidence the conversation was on lines similar to that held with Li Pik-shing. Lee Sau-fai also agrees the fact of the call and the complaint of misunderstanding. But again he will go no further and in particular says that there was no mention of a reduction of the purchase price at that stage. According to whom one believes there were or were not similar calls that evening or the next day to one Au Wai-suen, another director of the company, and to Haking Wong.

19. One week later, on the 4th October, the plaintiff says that she telephoned Haking Wong to the effect that she wished to pay the deposit; he said this would be all right and that he would arrange with Lee Sau-fai to prepare the necessary plans and deeds; that she telephoned Lee Sau-fai accordingly the next day and he agreed. Both these telephone calls were denied by those said to have received them, but it is common ground that on the 6th October Lee Sau-fai met the plaintiff's husband at the company's office and that on that day the plaintiff received from her husband certain plans and lists of tenants. Also that day Lee Sau-fai wrote out a letter to Mr. Peter C. Wong instructing him to act for the company in the matter of the sale. The letter was not signed and what happened to it after it had been written is a matter of some dispute and mystery. But it is common ground now that it was not given to Mr. Peter C. Wong. He did not see it until the present litigation was well underway.

20. On the 7th or 8th October the plaintiff says she again telephoned Haking Wong to say that she wished to pay the deposit; this time he said the matter would have to be delayed until the directors had decided how to apportion the bonus that would become payable to them as a result of the sale and that anyhow she was one of the group and need not worry about the due time. The plaintiff's husband says there was a meeting between himself and Haking Wong and Chan Yick-ming on the 8th at which the distribution of the bonus was discussed and when Chan Yick-ming demanded a bigger share than the others. The fact of that particular meeting, amongst others, is accepted by Haking Wong and Chan Yick-ming, but any question of delaying the deposit by reason of the bonus or any question of Chan Yick-ming having demanded or being given a bigger share than the others is vigorously denied.

21. The Board met again on the 17th October. The plaintiff was again present. According to the plaintiff and her husband it was a peaceful meeting at the end of which every one present agreed to a 1% reduction in the purchase price of the factory, that the amount of the deposit should be reduced accordingly, and that the time for its payment should be extended to the 25th October. There is a document which on the face of it appears to be a minute of that meeting. It records the three matters that I have just mentioned and also that the plaintiff's husband left the meeting at the request of the Chairman while the company's transaction with his wife was being discussed. That document however is unsigned and has not been copied into the minute book as is the usual practice of the company. The other directors who were present say the reason for this is that the meeting never came to any agreement. They described the atmosphere of the meeting in different ways, some more forcefully than the others. But none accepted it as peaceful. It is, I think, a fair inference from their evidence that by that time there had grown a distinct rift between the plaintiff and her husband on one side and Chan Yick-ming and Au Wai-suen on the other, that Haking Wong as Chairman attempted to bull-doze through what he thought was a sensible compromise and to this end dictated a minute that he hoped would be acceptable. But he failed against the determined opposition of Chan Yick-ming and Au Wai-suen. It is common ground that as soon as the meeting broke up the plaintiff and her husband called on Mr. Peter C. Wong, taking with them a photostat copy of the "draft minute".

22. I turn back now to the circumstances, which, it is said, prevent the company from relying upon the plaintiff's failure to pay the deposit in time. Three of them are pleaded. The first is that at or near the conclusion of the Board meeting of 26th September the plaintiff produced two cheques amounting to $1.5 million which she tendered as a deposit but that this was rejected by the directors, Haking Wong saying something to the effect that it was not necessary to pay the deposit so quickly as the plaintiff was "one of them". Haking Wong distinctly remembers that this incident did not take place. I do not recall if it was put to any other members of the Board except the plaintiff's husband. Yet I think it probable that something of that kind did occur. Two cheque stubs corresponding to the amount mentioned by the plaintiff were shown to me even though they are a little curious in form. However I do not think that at the time either party placed any weight upon the incident. Whatever was actually said by Haking Wong was not seriously meant nor seriously taken as a waiver of the need to pay the proper amount of the deposit through the proper office and within the proper time.

23. The second set of circumstances pleaded is that in the telephone conversations of the 4th and 5th October between the plaintiff and the plaintiff's husband on the one hand and Haking Wong, Li Pik-shing and Lee Sau-fai on the other, it was represented that the plaintiff would not be required to pay the deposit until after she had been supplied with lists of tenants, details of vacant premises and other information regarding the factory. The directors concerned denied the representation. However the truth of this particular matter is not material for it is accepted by the plaintiff that in any event she came into possession of these documents before the due date.

24. The third set of circumstances is the telephone call which the plaintiff said she made on the 7th or 8th October to Haking Wong and which I have already mentioned. The pleading incidentally does not include the delay said to have been caused by the need to settle first the distribution of the bonus. Haking Wong at one stage said that the directors did not even have this question in mind at that time. Mr. Godfrey in his final submission sought to rely upon the existence of a written opinion from counsel to refute that statement. Mr. Neill objected that the opinion was not part of the evidence before the court and I upheld his objection. I ruled that the existence of the opinion should be ignored. I was asked to make a note of my ruling and do so here in passing for in this jurisdiction counsel's submissions are not recorded by the shorthand writers and there would be otherwise no official record of that interchange. Apart from this however there is clear evidence that discussion of the bonus did take place. It was a matter that was in the minds of the directors, or at least in those of the three that formed the sub-committee. But no reason has been suggested as to why this should in any way have delayed the sale or the need to pay the deposit in time or why either of these should be affected by a demand by Chan Yick-ming, which I doubt, for a larger share. I do not accept the evidence of the plaintiff or the plaintiff's husband in respect of that particular telephone call.

25. I am not sure if the plaintiff's difficulty in making personal contact with Mr. Peter C. Wong, the company's solicitor, is put forward as another reason for not paying in time. Mr. Wong must have been a busy man and there could be something in this from a practical point of view if personal contact were a prerequisite of payment. But in any event the plaintiff did in fact manage to get in touch with Mr. Wong before the due date had been reached.

26. Then it is argued that a stipulation for the payment of a deposit is a stipulation as to time and therefore in equity not of the essence of the contract. The short answer suggested to this argument is that the sale of leaseholds is an exception to the general rule: Hudson v. Temple⁽¹⁰⁾. In addition it seems to me that the very nature of the transaction which has led me to follow the English decision that payment of the deposit was to be a condition precedent to the effectiveness of the contract also indicates that the parties intended that the time of its payment should likewise be essential.

27. Finally, in this respect I turn to the case of Hughes v. The Metropolitan Railway Co.⁽¹¹⁾. That case, as is now well known, decided that a period of time should cease to run so long as the parties are, by agreement, negotiating over the matter to which the period of time relates. I do not think that the plaintiff in the present case wishes to argue expressly on these lines. But it is an approach which at times has caused me some concern and I think I should express my opinion thereon. First it may be convenient to clear up some matters of fact. There is, I have already illustrated, considerable disagreement in the evidence as to the various telephone calls made or not made on the evening of 26th September and as to what was said or happened in the days that followed. I have already dealt with particular incidents. As to the rest I may say, for reasons that I will give later, that I reject the evidence of the plaintiff and the plaintiff's husband except in so far as it is accepted by the witnesses for the other side or supported by other evidence. In particular I am satisfied that the plaintiff did not indicate to any one a willingness to pay the price of $12.3 million until the 22nd October, nor do I think she even had that willingness until after the failure of the 17th October meeting and the confirmation of that failure by Mr. Peter C. Wong immediately afterwards. I accept that some time before the 10th October the plaintiff's husband suggested a new price, that is a reduction of 1%, and that he mentioned that suggestion to Lee Sau-fai. The suggestion must have become known to Haking Wong either before or at the commencement of the meeting of the 17th October. I have some doubt however whether this could properly be called "opening negotiations with the company". But, even if it can be, there are two differences from the earlier case:

1. The present contract is a contract between equal parties. This must have been equally so in the earlier case at the time when the original lease was granted by the original landlord to the original tenant. But that was almost ninety years before. At the material time the parties and the position had both changed. The landlord then stood to gain everything yet lose nothing.

2. The landlord in the earlier case clearly accepted the tenant's invitation to negotiate, that is he did something active to cause the tenant to delay. In the present case the company has done nothing active in this way. Nor has any individual director. The plaintiff delayed paying the deposit not because she was misled by the company or by any director but because she was hoping to get a better price. In these circumstances it does not seem to me that equity demands the interference of this court.

28. If I am wrong in my conclusion that the payment of a deposit was a condition precedent, the contract made on the 26th September would remain effective until the company took some step to rescind it. I am satisfied that it took such a step on the 22nd October. I choose this date by reference to the evidence of Mr. Peter C. Wong and the admitted consultation with counsel on the 20th. On the 22nd the plaintiff tendered two cheques to Mr. Peter C. Wong, one was for the deposit according to the original price of $12.3 million. The other was in the amount required if that price had been reduced by 1%. Mr. Wong refused them both. He was at that time acting for the company under the verbal instructions of Chan Yick-ming. His action was a clear indication that the company no longer intended to be bound by the contract and would in any event have effectively brought the contract to an end.

29. The original allegation that the selling price was reduced at the 17th October meeting was not pressed strongly when the time came. The plaintiff would have been content to accept judgment at the price of $12.3 million. However I have found the evidence in relation to that meeting useful in assessing the credibility of the witnesses, a matter on which this case turns to a large extent. The two versions of that meeting I have already set out. I have no hesitation in preferring the version given by the witnesses called for the company. The version of the plaintiff and her husband is not consistent with undisputed facts. I refer to the length of the meeting. It took two hours at least. This would not have been necessary if all present had agreed smoothly. The immediate rush to the solicitors indicates there was some dispute. The fact that the minute remained unentered and unsigned indicates again a lack of agreement. And, finally, there would have been no need for the plaintiff to take two cheques to the solicitor on the 22nd. There is nothing in her evidence or the evidence of her husband to explain why she did so. It is not consistent with their evidence that the lesser price had been agreed. Now there are in this case, as in most, matters of the kind that are easily but unwittingly distorted in a person's mind by reason of subsequent events or by his or her emotional desires. But certain aspects of that meeting do not fall within this category. I may mention, for example, the general atmosphere of the meeting, the presence or otherwise of the plaintiff's husband throughout, and the reason why the minute remained unentered and unsigned. These could not be honestly but differently recollected. I can only conclude that in these matters the plaintiff and the plaintiff's husband have deliberately attempted to mislead me. This is something that I have taken into account, together with the general impression that I formed of each witness and the other arguments put before me when considering whom to believe in the other matters of fact that it was necessary for me to decide.

30. On the facts as I find them the contract ceased to be effective either on the 10th or 22nd October according to which is the correct view of the nature of the deposit. In that case it is not necessary for me to consider the purely legal question of whether there was a note or memorandum sufficient to satisfy what used to be the Statute of Frauds. However out of courtesy to the argument put forward by counsel I would say that my initial reaction is that the minute of 26th September would have been sufficient. Tiverton Estates Ltd. v. Wearwell Ltd.⁽¹²⁾ is the authority that the memorandum must contain, inter alia, an acknowledgment of the fact of agreement. The minute is not completely unambiguous in this respect, but I think the use of the word "sell" rather than "offer" in the phrase "it was unanimously resolved to sell .......... to (the plaintiff)" would have tipped the balance. Then it is said, on the authority of Nesham v. Selby⁽¹³⁾ and Allsopp v. Orchard ⁽¹⁴⁾ that the memorandum is bad because it introduces terms not yet agreed by the parties, that is that each should bear its own solicitor's charges and that the plaintiff should be responsible for the stamp duty. With every respect to learned counsel a quick reading of these cases does not persuade me that they do establish that proposition. They appear more concerned with the fact or otherwise of agreement than the note or memorandum thereof. Apart from this however the terms mentioned are terms that would be implied from normal conveyancing practice and therefore need not be included in the note.

31. Then there is the question of part performance. It is agreed that the plaintiff sold certain shares starting from the end of November up to the early part of March 1976 and that the sale was at a loss in the sense that the market was generally advancing at that time. The plaintiff says the sales were to enable her to raise the purchase price, although I have some doubt as to the truth of this explanation. There is the fact that on the 22nd October the plaintiff tendered the cheque for the deposit. And on the 9th April 1976, what would have been the due date for completion, the plaintiff's solicitor tendered a cashier's order in the sum of $12.3 million. It is submitted on the authority of Steadman v. Steadman⁽¹⁵⁾ that these are acts of sufficient part performance. I am not sure that this case goes as far as the plaintiff would hope, but as the point is quite unnecessary for my decision I prefer to express no further opinion.

32. It only remains to say that the plaintiff pleaded her case in two further alternatives. The first is that the agreement of the 26th September was voidable at her option and that in the telephone conversation of that evening she waived her right in that respect. The second is that the conduct of the Board on the 26th amounted only to an offer to sell and that in the same telephone conversation she accepted that offer. Neither alternative is supported by the facts as I find them.

33. For these reasons judgment is entered for the defendant with costs.

Representation:

G.M. Godfrey, Q.C., and A. Dicks (Hastings & Co.) for the plaintiff.

F.P. Neill, Q.C. and S.V. Gittins, Q.C., and R. Wong (Johnson, Stokes & Master) for the defendant.

(1) 1871 L.R. Vol.VI Q.B. 597

(2) [1964] 1 W.L.R. 125 at 128

(3) [1893] 1 Ch. 84

(4) [1973] H.K.L.R. 102

(5) [1862] 11 C.B.(N.S.) 869 or 142 E.R. 1037

(6) [1971] 3 All E.R. 870

(7) [1972] A.C. 741

(8) [1913] 3 K.B. 564

(9) [1974] 1 W.L.R. 331

(10) [1860] 29 Beavan 536 at 543

(11) [1877] 2 A.C. 439

(12) [1975] 1Ch. 146

(13) [1872] 7 L.R. Ch. App. 406

(14) [1923] 1 Ch. 323

(15) [1974] 3 W.L.R. 56