Cheng Keung Yut Yung and Another v. Mok Ting Fong

Read the full judgment text of HCA 516/1967 on BabelCite. This High Court CFI judgment was delivered on 24 June 1968.

1. In this action the plaintiffs pleaded that they, the defendant, and one Chang Kor Yip were tenants in common in certain shares of a number of pieces of land; that a partition had been agreed upon whereby certain of the various pieces of land were allotted exclusively to the plaintiffs and the defendant respectively; that mutual powers of attorney were executed in order to carry the said partition into effect; and that the defendant had wrongfully revoked the powers of attorney given by him. A

Case No.HCA 516/1967
Court
High Court CFI
Date24 Jun 1968
Judge
Case Document
100%Judiciary

HCA000516/1967

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

ACTION NO.516 OF 1967

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Between
Cheng Keung Yut Yung and Chiang Yok Hi Plaintiffs

AND

Mok Ting Fong Defendant

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Coram: Mills-Owens J. in Chambers.

Date of Judgment: 24 June 1968

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JUDGMENT

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1. In this action the plaintiffs pleaded that they, the defendant, and one Chang Kor Yip were tenants in common in certain shares of a number of pieces of land; that a partition had been agreed upon whereby certain of the various pieces of land were allotted exclusively to the plaintiffs and the defendant respectively; that mutual powers of attorney were executed in order to carry the said partition into effect; and that the defendant had wrongfully revoked the powers of attorney given by him. Accordingly the plaintiffs claimed a declaration that a valid partition had been effected, alternatively for partition, with ancillary relief. It also appears that following upon the agreement for partition the plaintiffs and the defendant respectively caused buildings to be erected upon the respective portions allotted to them, each dealing with their and his portions as if they and he were the respective owners thereof; and it was claimed that the plaintiffs had assigned certain undivided parts or shares in the lands allotted to them and in respect of which building covenants imposed by the Crown had been fulfilled. The defence, putting it very briefly, was firstly that the parties had agreed to form a syndicate for developing the various pieces of land and that the powers of attorney were given for that purpose; that there was no agreement or intention to partition; secondly, that no dealing in the lands was permissible until the District Commissioner was satisfied that the conditions upon which the pieces of land were held had been fulfilled; alternatively, that the agreement to partition (if any) had been repudiated; thirdly, that the powers of attorney were not given for valuable consideration and had been validly revoked; fourthly, that the plaintiffs had failed to perform the agreement for joint development of the lands. There was also a counterclaim for expenditure incurred and damages sustained by the defendant owing to alleged failure by the plaintiffs to implement the development of certain portions of the land.

2. Upon the case coming on for trial (before another judge) the Court was informed that a settlement had been arrived at and the case was adjourned to enable the Terms of Settlement to be finally drawn up. The case then came before me, on the adjourned date namely the 9th November 1967 when Terms of Settlement, dated the same day and signed by both counsel, were handed in. I have no doubt that in accordance with my usual practice I enquired whether a judgment was required and that I was answered in the affirmative. Mr. Arculli, for the defendant, however, according to my recollection, asked that the judgment be not drawn up until after the defendant had complied with clause 6 of the Terms of Settlement. This was agreed to by Mr. Bernacchi, for the plaintiffs. My note reads as follows:-

"Bernacchi Q.C. : Now settled - hand in Terms of Settlement signed by counsel on both sides.
Court: Should not plot 3841 be mentioned?
Bernacchi: Yes. (Terms of Settlement duly amended and initialled).
Judgment in terms of paragraphs (i) to (v) inclusive of clause 9 of the Terms of Settlement; the judgment not to be drawn up or entered until the parties or their solicitors shall have informed the Registrar that clause 6 has been complied with."

3. Referring to the Terms of Settlement, clause 9 reads as follows -

"9. The orders that the Plaintiffs and the Defendant will ask the Court to make out, subject to Clause 6 above, are as follows:-

(i) That the said Lots as mentioned in the recitals as the said Lots to be partitioned in the manner as described in Clause 2 above;
(ii) That the registrations of the purported revocation of the Powers of Attorney in respect to the said Lots and of the lis pendens in this action shall be vacated.
(iii) That each party pays their own costs up to date;
(iv) That the said claim and counterclaim be forth-with stayed except for the purpose of enforcing this agreement for settlement;
(v) That there shall be general liberty to apply in respect of any matter arising from the working out of the settlement."

4. Clause 6 reads as follows -

"6. As the Defendant has caused to have been done certain site formation and other works at Lot No.59 in Demarcation District No.175 by reason of two sets of plans for the same such plans having been approved by the District Office, Tai Po, it is further agreed that the portion of the work called for by the said plans should be completed by the same contractor subject to the following provisions:-

(a) The Plaintiffs will within ten days from the date hereof give to the Defendant or his solicitors their own estimate (i) of what they estimate the completed work is worth and (ii) of what they estimate the uncompleted works to be worth;
(b) The Defendant within seven days after the receipt of the Plaintiffs' aforesaid estimate shall be at liberty either to accept the Plaintiffs' estimates or either of them or to go into valuation;
(c) In the event of the Defendant not accepting the Plaintiffs' estimates or either of them it is agreed to appoint Messrs. Harriman Realty & Co. Ltd. forthwith as a valuer to value the completed or uncompleted works or both on the basis of a willing contractor doing work for a willing employer at the time the work was contracted to be done to a maximum of $144,000.00 for the completed works and to the maximum of $26,000.00 for uncompleted works. The decision of the valuer shall be final and binding on all parties;
(d) The costs of the valuation of Messrs. Harriman Realty & Co. Ltd. shall be as to 5/8 borne by the Plaintiffs and as to the remaining 3/8 by the Defendant;
(e) Within seven days of the Defendant accepting the Plaintiffs' estimates for uncompleted work or within seven days of the decision of the valuer for the uncompleted work, as the case may be, the Defendant shall cause the uncompleted works to be carried out and the same shall be finished within eight weeks thereafter. The Defendant shall cause an application to be made to the Police forthwith for permission to carry out any necessary blasting operations and the Plaintiffs agree to extend the period of eight weeks for such length of time as may be necessary only if the Defendant shows that the delay has been caused through no default or fault of the Defendant or his agents but by the inability of the Police to supervise such blasting operations and/or supply explosive materials for such purpose;
(f) The Plaintiffs shall within a like period of seven days pay into a joint account of Messrs. Edmund Cheung and Carlos Remedios the sum of $26,000.00 and this money shall be used to pay for the uncompleted works and be released direct to the contractor against architect's certificate or certificates;
(g) That the Plaintiffs will pay the balance to make up 5/8 of the cost of the works as agreed or valued, as the case may be, within ten days of the receipt from the architect of his certificate that all works have been completed in accordance with the said two sets of approved plans and of a letter being received from the District Officer and/or the Building Authority of the Public Works Department confirming that the works have been so completed: Provided further that if the Defendant shall fail to pay his share of the valuation costs provided for in Clause 6(d) herein the Plaintiffs shall be at liberty to deduct such share from the monies due by the Plaintiffs to the Defendant;
(h) It is agreed that the proportions of the costs of uncompleted work to be carried out whether agreed or valued shall be borne as to 5/8ths by the Plaintiffs and as to 3/8ths by the Defendant and that the said sum of $26,000.00 paid under sub-paragraph 6(f) above shall be taken into account and adjusted accordingly in computing the 5/8ths shares to be borne by the Plaintiffs;
(i) The payment of the monies due by the Plaintiffs as provided for in Clauses 6(f) and (g) is a condition precedent to the whole of this settlement and in the event of payment not being made for any reason whatsoever the settlement herein shall be null and void and none of the parties herein shall be bound thereby provided that the balance over the said $26,000.00 due to the Defendant shall be sent to the Defendant's solicitors within the time as aforesaid and shall only be released to the Defendant after the Defendant has executed all necessary deeds, documents and other instruments in writing as provided for in this settlement."

The contractor is, in fact, the defendant himself.

5. The plaintiffs have now issued a summons asking for "the Judgment given in this action on the 9th November 1967" to be perfected. The claim made therein to have the overall confirmatory assignment now executed is not pursued, at the present time.

6. It is on affidavit, filed by the plaintiffs and not denied by the defendant, that the plaintiffs gave their estimates of completed work at $100,000 and uncompleted work at $26,000 (which latter figure is the maximum contemplated by clause 6). In reply the defendant claimed a valuation in respect of the completed work. Pursuant to para. (f) of clause 6 the plaintiffs have made the deposit of $26,000. Despite this the defendant refuses to carry out the terms of clause 6(e), namely to proceed with the work. The plaintiffs' solicitors wrote making time of the essence, but the position remains that the defendant refuses to comply with clause 6(e). The plaintiffs are ready and willing to pay their share of the cost of the completed works under clause 6(g).

7. No affidavit was filed by the defendant and there is no suggestion that he requires further time.

8. Counsel for the plaintiff, Mr. Bernacchi, referred to a number of authorities, in particular Green v. Rosen(1) at p.799. The latter case deals with various methods of settling an action and counsel submitted that the present case fell within one or more of the types of case where the mode of settlement adopted results in an enforceable judgment. He contended, further, that the direction that the judgment be not drawn up until compliance with clause 6 was in the nature of a stay of execution.

9. Mr. Bernacchi's contentions may be summarised as follows - (1) There was a judgment; (2) The Court had power to order the judgment to be drawn up and entered under the liberty to apply (see Fritz v. Hobson(2)) particularly since there had been a change of circumstances (see Cristel v. Cristel(3)); (3) It was a case of self-induced frustration, the defendant seeking to take advantage of his own wrong in departing from the settlement arrived at (see Joseph Constantine ..... v. Imperial Smelting .....(4); Mertens v. Home .....(5); and Lyle-Meller .... v. A. Lewis ....(6)); (4) There was nothing in equity to prevent the plaintiffs from now seeking to have the judgment perfected (see Emmanuel .... v. Briscoe ....(7)). Mr. Arculli contended, as to (1) above, there was no judgment and none was intended until clause 6 had been complied with; if there was a judgment it was a conditional judgment; as to (2) above, this was not a case of some matter arising from the working-out of the settlement; as to (3) above, the principle of self-induced frustration might possibly arise in a case where it was sought to enforce a settlement; it did not arise in the present case, or, at least, at the present stage; as to (4) above, estoppel is a defence; further, there was no detriment to the plaintiffs whose proper course was to restore the action for trial. He submitted further that it was not open to the Court to revoke the direction that judgment be not entered until clause 6 had been complied with, and he referred to Dashwood v. Dashwood(8), where Tomlin J. considered the nature of a Tomlin order. In reply Mr. Bernacchi asked how could the action proceed - there would be two judgments. He referred to the rule (noted at R.S.C. 42/3/6) that an order judgment is effective from the date it is made or given. In regard to estoppel he referred to Combe v. Combe(9).

10. The crux of the matter, as it appears to me, is whether there was an order for judgment, and, if so, whether it was a conditional order in the sense of being subject to a condition precedent that clause 6 be first complied with, in which case the question would arise whether I now have power to set aside that condition and allow judgment to be entered.

11. I am entirely satisfied that there was an order for judgment in the terms of clause 9, and that it was not for a conditional judgment in the sense that the judgment should not become binding until a condition precedent had been fulfilled namely compliance with clause 6. As is evident on the face of the Terms of Settlement compliance with clause 6 is itself a term of the settlement; and the clause envisages action thereunder by the plaintiffs as much as by the defendant. The direction that the judgment be not drawn up and entered until clause 6 was complied with was, as I would understand, purely part of the 'mechanics' of carrying the Terms of Settlement into effect - to enable the parties to proceed to carry out their settlement, so far as possible, amicably and not by force of legal compulsion. There was not any intention that it should be a condition precedent to judgment that clause 6 be complied with. It was in the nature of a stay upon the entry of the judgment so that, as far as possible, the settlement could be carried out amicably. In these circumstances, it appears to me, I am entitled to lift the stay and direct that judgment in the terms of the settlement be now entered. This, as I see it, will carry into effect the intention of the parties. I agree also with the contention for the plaintiffs that to do otherwise would be to allow the defendant to take advantage of his own wrong in seeking to resile from the settlement.

12. Ordered that judgment be now drawn up, entered and parfected in accordance with the terms of the settlement. Costs of and incidental to the summons to the plaintiff. Certificate for one Counsel. 24th June, 1968.

(R.H. Mills-Owens)
Puisne Judge.

Representation:

Bernacchi Q.C. and Henry Wong instructed by Edmund Cheung & Young for plaintiffs.

Ronald Arculli instructed by Philip Remedios & Co. for defendant.

(1) (1955) 2 All E.R. 797.

(2) (1880) 14 Ch. D. 542.

(3) (1951) 2 All E.R. 574.

(4) (1941) 2 All E.R. 165.

(5) (1921) 2 K.B. 526.

(6) (1956) 1 All E.R. 247.

(7) (1964) 3 All E.R. 556.

(8) (1927) W.N. 276; 71 Sol. Jo. 911.

(9) (1951) 1 All E.R. 767.