Quadro Properties International Co. Ltd. v. Fung Kai Fung
Read the full judgment text of HCA 8933/1992 on BabelCite. This High Court CFI judgment was delivered on 29 April 1994.
1. By an Agreement dated 29th October 1992 ("the Agreement"), the Plaintiff agreed to buy from the Defendant the property situated at Flat 3, 6th Floor, Block B, Kam Wah Garden, Tuen Mun, Hong Kong ("the property"). The completion date of the transaction was 7th December 1992 The time of the completion was between the hours of 9 a.m. to 5 p.m.
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HCA008933/1992 1992, No.A8933 ________________ H E A D N O T E ________________ SALE OF LAND - VENDOR'S OBLIGATION TO SHOW GOOD TITLE AND TO ROVE GOOD TITLE - MISSING TITLE DEEDS - PLAIN COPY TITLE DEEDS SUPPLIED TO PURCHASER ON COMPLETION - BEST EVIDENCE RULE-ALLEGED AGREEMENT TO COMPLETE THE SALE WITH PLAIN COPY TITLE DEEDS. 1992, No.A8933 IN THE SUPREME COURT OF HONG KONG HIGH COURT ___________
___________ Coram: Deputy Judge Cheung in Court Date of hearing: 13 April 1994 Date of delivery of judgment: 29 April 1994 ________________ J U D G M E N T ________________ Facts 1. By an Agreement dated 29th October 1992 ("the Agreement"), the Plaintiff agreed to buy from the Defendant the property situated at Flat 3, 6th Floor, Block B, Kam Wah Garden, Tuen Mun, Hong Kong ("the property"). The completion date of the transaction was 7th December 1992 The time of the completion was between the hours of 9 a.m. to 5 p.m. 2. Clause 10 of the Agreement provided that,
Clause 11 provided that:-
3. Clause 14 provided that time shall be of the essence of the Agreement. 4. The Agreement was signed pursuant to a provisional agreement dated 19th October 1992 entered into between the parties. 5. On 27th October 1992, the title deeds to the property were sent by Norman Yung & Co., the Defendant's solicitor to Mr Chow Huk Pui ("Mr Chow") of Vivien Chan & Co., the solicitor for the Plaintiff. After reviewing the title deeds, Mr Chow noted that the following title deeds were missing:
("the six title deeds") 6. By letter dated 30th October 1992, Mr Chow wrote to Norman Yung & Co., requesting the six title deeds. 7. On 2nd December 1992, Mr Chow found that the six title deeds were still not supplied to him. He sent a letter by fax and by post to Norman Yung & Co. on 2nd December 1992. This letter stated that it was the vendor's obligation to show a good title to the property and he was not in a position to approve the vendor's title if he did not have the title deeds. Nothing was heard or received from Norman Yung on that day or on the following day. 8. On the morning of 4th December 1992, Mr Chow received a telephone call from Mr Thomas Leung ("Mr Leung") of Norman Yung & Co. Mr Leung advised him that they were not yet able to produce the six title deeds for his perusal. Mr Chow at that time was concerned that the completion was to take place in 3 days' time but the six title deeds were still not produced for his perusal. 9. Mr Chow said that the Defendant was obliged under the Agreement to produce the original of the six title deeds and not mere copies and to prove his title by the time fixed for the completion. Failure to produce the six title deeds would mean failure to prove title, thus casting serious doubt on the Defendant's beneficial interest in the property. This would entitle the Plaintiff to, inter alia, rescind the purchase unless a satisfactory explanation is provided. 10. Mr Chow said that the mere production of the six title deeds would not be sufficient as proof of good title. The contents of such title documents must be thoroughly examined and, if any question or doubt should arise upon such examination, the Defendant must clarify and remove them satisfactorily in order to prove his good title. He was worried that Norman Yung & Co. would produce the six title deeds on or shortly before 7th December 1992 and the Defendant might argue that he had proved his title before the completion, leaving him (i.e. Mr Chow) with practically no time to examine the six title deeds carefully and raise requisitions on title prior to the completion. He was not the least worry if the vendor failed to produce the six title deeds before the completion as the Plaintiff would in such an event be entitled, inter alia, to rescind the purchase. 11. In view of his worry, he asked Mr Leung what would happen if the six title deeds were to be produced shortly before the completion leaving him with not sufficient time to examine them. He asked whether the Plaintiff would be allowed extra time to examine the Defendant's title deeds in such an event. It did not occur to him at that time that the six title deeds would not be produced to him prior to the completion in breach of the Agreement. His request for the six title deeds was first made on 30th October 1992 and ample time had been given to the Defendant. Mr Leung had not indicated the whereabouts of the six title deeds nor any difficulties in producing them before the completion. Mr Chow at that time expected that the six title deeds would be produced prior to the completion in accordance with the Agreement and thus his requests were made solely for the purchaser's protection in the event that the six title deeds should be delivered to him immediately before the completion. 12. Mr Leung replied that they would act reasonably in the event that the six title deeds were not produced until shortly before the completion and they would not insist to complete on 7th December 1992. Mr Leung further proposed that should Mr Chow require time to review the six title deeds, he, namely Mr Leung, would agree to postpone the completion to 2 days after the delivery of the six title deeds. 13. Mr Chow told Mr Leung that 2 days would be sufficient for his review of the six title deeds. He said that apart from the maters mentioned above neither he nor Mr Leung had suggested that the completion of the sale be postponed. He also urged Mr Leung to supply him as soon as possible with plain copies of the six title deeds as an interim measure so that he could peruse them in the meantime in order to save the perusal time and raise requisitions thereon, with verification of their authenticity upon the production of the six title deeds. Mr Leung agreed and said that they would let him have copies of the six title deeds as soon as they could. 14. During the telephone conversation, Mr Leung requested Mr Chow to dispense with the production of six title deeds and to proceed with the completion with Norman Yung's undertaking to let him have certified copies of the six title deeds after the completion. Mr Chow did not find Mr Leung's request acceptable and he refused his request. 15. By a letter dated 4th December 1992, Mr Chow wrote to Messrs Norman Yung & Co. The letter stated that:-
16. Mr Chow said that the draft assignment was sent to Norman Yung & Co. for the sole purpose of saving time. It was on the express understanding that there would be no prejudice to the Plaintiff's requisitions on title and the Defendant's obligation to prove good title. In view of his refusal to accept Mr Leung's suggestion to dispense with the production of the six title deeds and to proceed with the completion upon their undertaking to supply certified copies of the six title deeds after completion, he was not prepared to and did not send the draft form of completion undertaking for Messrs Norman Yung & Co.'s approval at that stage. Messrs Norman Yung & Co. did not object to that letter. 17. Nothing further was received or heard from Norman Yung & Co. until 7th December 1992. In the morning of 7th December 1992, Mr Chow received a phone call from Mr Leung who advised him that they were sending to him copies of the six title deeds and requested him to examine them upon receipt thereof. Mr Chow agreed. 18. At around 3 p.m. on 7th December 1992, Mr Chow had still not received any title deeds or correspondence from Norman Yung & Co. He was really uncomfortable with the situation and he sent a letter by fax and by post to Norman Yung & Co. The letter stated that:-
19. Mr Chow reported the situation to the Plaintiff and sought its further instructions. The Plaintiff instructed him to rescind the purchase if the Defendant failed to provide a good title on or before the scheduled completion date. 20. At about 4 p.m. on the same day, Mr Chow received from Norman Yung & Co. a letter dated 7th December 1992 together with plain copies of the six title deeds. The letter stated, inter alia, as follows:-
21. Mr Chow said that no further title deeds or documents were received prior to 5 p.m. on 7th December 1992 and in the circumstances, the Defendant had failed to prove his title before the scheduled completion date. 22. In accordance with the Plaintiff's instructions, he wrote to Norman Yung & Co. on 8th December 1992 advising them of the Plaintiff's election to rescind the purchase of the property. 23. Under cross-examination, Mr Chow said that when the documents arrived at around 4 p.m., he did not peruse all of them; he had taken instructions from his client, and his instruction was that if the vendor failed to show good title as provided in the Agreement, the purchaser would proceed to rescind the contract. He did not inform Norman Yung & Co. about this on 7th December 1992 because the Plaintiff did not have the right to make the election then and the time provided in the Agreement for the completion of the sale was 5 p.m. 24. On 4th December 1992, in the conversation with Mr Leung, Mr Chow said that they did not discuss about certified documents, they talked about title deeds or " " (kai). The agreement reached was that if the Defendant was not able to deliver the six title deeds in accordance with the provisions of the Agreement and if the time did not allow him to peruse those documents, Mr Leung would give him time to peruse the documents and Mr Leung would not insist on the day of completion. Mr Chow, however, did not agree to postpone the completion. 25. Mr Chow agreed that he had asked Mr Leung to supply him with copies of the documents because the usual practice was for the vendor's solicitors to assist the purchaser's solicitors by supplying them with copies of documents so that they may have time to read the documents. When asked whether it was unusual to complete the sale even if the original documents were not supplied, Mr Chow replied that it would depend on the nature of the documents. In the present case, the missing documents were important documents. They were assignments from the vendor's predecessors to the vendor. There was also a charge. The original documents should be with the vendor at all times. Mr Chow said that he insisted on the production of the original documents because the vendor's obligation was to produce the original title deeds and his inability to produce the title deeds cast serious doubt on the title. Mr Chow denied that he sent the draft assignment because he wished to complete the purchase on a later day, if not on 7th December 1992. 26. Mr Chow said that the Plaintiff had in fact agreed to purchase other properties in Kam Wah Building. Three of the properties were handled by Norman Yung & Co. They were Flat 2, 24th Floor, Block A ("the 24th floor flat"); Flat 3, 8th Floor, Block B ("the 8th floor flat") and the property. In respect of the 8th floor flat the sale was completed even though there were missing title deeds. The missing documents were Modification Letter Memorial No.490499 and Deed Poll Memorial No.550308 ("the two documents"). Mr Chow said that requisition was satisfactorily dealt with in that flat. Although he did not receive the certified copies of the two documents on the completion date, he was satisfied with the undertaking by the vendor's solicitors that they would supply the certified copies in due course. The two documents related to the whole of the development of the Kam Wah Building whereas the six title deeds related exclusively to the property. He explained that he was not worried about the two documents transaction because they should be in existence before the completion of the development of the building. The vendor would not have the original documents and they should be with the developer. The documents had been duly registered in the Land Registry and he had had an opportunity of examining the certified copies of the two documents in relation to the purchase of the 24th floor flat. The sale of the 8th floor flat was completed on 30th November 1992 with an undertaking by Norman Yung & Co. to supply certified copies of the two documents. 27. Mr Leung Chi Ming, Thomas ("Mr Leung") was a conveyancing clerk formerly in the employ of Norman Yung & Co. On 19th October 1992, Norman Yung & Co. received instructions from two of its clients, namely the Defendant and one Mr Chow Kui Kwong. Both of them would like to sell their properties to the Plaintiff. The completion date for the sale of the Defendant's property was 7th December 1992 while the completion date for Mr Chow Kui Kwong's property (i.e. the 8th floor flat) was 30th November 1992. Mr Leung handled the sale under the supervision of a solicitor. He has 6 years experience as a conveyancing clerk. Upon receipt of the instructions he requested the mortgagees to supply the title deeds in order to produce the same to the Vivien Chan & Co. 28. On 3rd November 1992 he received the title deeds of the 8th floor flat from the mortgagee's solicitors, Gallant Y.T. Ho & Co. and he sent them to Vivien Chan & Co. on 12th November 1992. 29. On 26th October 1992, he received the title deeds of the Defendant's property from Tsang, Chan & Wong, the mortgagee's solicitors, and he sent them to Vivien Chan & Co. on the following day. 30. On 26th November 1992, four days before the completion of the sale of the 8th floor flat, he received a letter from Vivien Chan & Co. dated 25th November 1992 enclosing the draft assignment of the 8th floor flat and the draft undertaking for their approval. Vivien Chan & Co. suggested to them that they should undertake to send the certified copies of two title deeds namely the Modification and the Deed Poll within seven days when they received the same from the Land Registry. 31. Mr Leung said that the suggestion "was in accordance with the solicitors practice that if some documents were not available on completion, solicitor may undertake to deliver them after completion. It was operated on the extent that the Vendor shall be relieved from producing the original or the certified true copy thereof. Such waiver of right was an acceptable practice and was not unusual in our daily conveyancing transaction". Mr Leung said that "he took it that the purchaser should not raise objection to the title on the missing documents and at the same time agreed not to exercise the right of rescission even though the certified true copy title deeds were produced after the completion date. This kind of arrangements sometimes would happen when the purchaser had made his own search at the Land Registry". 32. In view of the above, he was satisfied with the purchaser's suggestion. The draft undertaking was duly approved, the sale and purchase of the 8th floor flat was completed as scheduled. Certified copies of the missing title deeds were sent to Vivien Chan & Co. after the completion of the sale. 33. In respect of the Defendant's property, Mr Leung said that he received the letter of 30th October 1992 from Vivien Chan & Co. on or about 1st November 1992. He then realised that seven documents (apart from the six title deeds, the letter also asked for the certified copy of Modification Letter Memorial No.490499) were missing from the bundle of documents which he had received from the mortgagee's solicitors. He had no idea as to why they were missing because the whole bundle of title deeds were passed from the mortgagee's solicitors to Norman Yung & Co. and then from Norman Yung & Co. to Vivien Chan & Co. He did not know whose fault it was. He did not check the deeds. Instead of going back to the mortgagee's solicitors for the missing title deeds, the usual way to remedy the situation was to apply to the Land Registry for a set of certified copies of the missing deeds. He understood that it would take about two to three weeks for the certified copies to be issued. For the purpose of proving title, certified copies were as good as original deeds. He therefore telephoned the search agency Vastkin Limited to obtain certified copies of the missing deeds. 34. On 4th December 1992, he saw the letter from Vivien Chan & Co. of 2nd December 1992 reminding him of the missing documents. He discovered then that the certified true copies of the title deeds had not been sent to him by Vastkin Limited. He immediately telephoned Vastkin Limited but was told that his order for the certified true copy deeds was mislaid. He realised that the completion date was due in three days and he had no time to wait for another set of certified copy deeds to be issued. A practical solution was to obtain a set of plain copy deeds from the Land Registry which could be done in two to three days time and to undertake to produce the certified copies to the purchaser's solicitors after the completion. 35. He immediately telephoned Mr Chow as he remembered on the completion of the 8th floor flat one week ago, Vivien Chan & Co. had suggested that the certified true copy deeds were to be sent to them after the day of completion. Mr Leung informed Mr Chow all about this and asked whether he would agree with his suggestion. Mr Leung asked Mr Chow whether he would proceed to complete on the scheduled date or whether he would need a postponement. Mr Chow said that he agreed with Mr Leung's arrangement provided that Norman Yung & Co. send a set of the plain copy deeds to him as soon as they could so that he would have time to peruse the documents. Mr Chow added that two days was sufficient and if there was no problem with the title, they could complete within two days of the delivery of the copy deeds. Mr Chow further said he would let Mr Leung have the draft assignment for approval and Mr Leung should give him instructions on the cheques. 36. In the afternoon later on the same day, Mr Leung received a fax letter from Mr Chow confirming the conversation. He noticed from the letter that Vivien Chan & Co. was not asking for postponement of the completion date nor threatening rescission of the Agreement because of the Defendant's inability to provide the original or certified true copies of the deeds. He took it that Vivien Chan & Co. was satisfied with the arrangement. He telephoned his client and asked him to come on the day of the completion to execute the documents. 37. In the morning of 7th December 1992, Mr Leung received the copy title deeds from Vastkin Limited. He immediately delivered the same by hand to Vivien Chan & Co. 38. Mr Leung also telephoned Mr Chow informing him that the copy deeds were forthcoming. Mr Chow answered him that he needed time to examine the title deeds to see whether the title was good before they could sign the documents. 39. At about 3:06 p.m. he received a letter from Vivien Chan & Co. saying that they still had not received the title documents. He immediately telephoned Mr Chow and was told that the documents had arrived and he was in the process of perusing the documents. An hour later he still had not heard anything from Vivien Chan & Co. He concluded that they might assume the completion had to be postponed to the following day. Mr Leung told his client to go home and return the next day. 40. On 8th December 1992, to his surprise, Mr Leung received a faxed letter from Vivien Chan & Co. informing him that the Plaintiff had given instructions to rescind the Agreement on the ground that the certified true copy deeds were not sent to them and alternatively the vendor had failed to prove title. The letter of 8th December 1992 from Vivien Chan & Co. stated, inter alia, that:-
41. Mr Leung reported the matter to his solicitor and he also explained to the Defendant what had happened in the past two months and asked whether he would agree to return the deposit to the Plaintiff. The Defendant said that he was not happy at all with the decision of the Plaintiff. He believed that it was only an excuse for the Plaintiff to pull themselves out of the property slump. He said he would not return the deposit. 42. Mr Leung had not heard anything further from Vivien Chan & Co. that afternoon. He was instructed by the Defendant to write to the Plaintiff warning it of the forfeiture of the deposit and pressed for completion. The letter of 8th December 1992 (page 24 of the agreed bundle) stated that:-
43. There was another letter dated 8th December 1992 from Norman Yung & Co. to Vivien Chan & Co. (page 20 of the agreed bundle) which stated that:-
44. On 9th December 1992, Mr Leung received a further letter from Vivien Chan & Co. which stated that:-
45. Mr Leung explained the matter to the Defendant. Again the Defendant refused to return the deposit. Mr Leung passed the papers to his solicitor and the matter was taken over by his solicitor. 46. By a letter dated 10th December 1992, Norman Yung & Co. wrote to Vivien Chan & Co. as follows:-
47. Under cross-examination, Mr Leung said that he had made a note of the conversation with Mr Chow on 4th December 1992 in the conveyancing file but the note might have been lost. In this conversation with Mr Chow, he told Mr Chow that the six title deeds could not be given to him for his perusal and he would make photocopies at the Land Registry and supply him with the copies. After this conversation, he received the letter of 4th December 1992 from Mr Chow. He called Mr Chow again because the letter stated that Norman Yung & Co. would give the title deeds to Vivien Chan & Co. Mr Leung asked Mr Chow if the transaction would be completed there was no problem with the documents. Mr Chow replied that the sale would be completed in two days of the receipt of the title deeds subject to any problem with the title deeds. After this coversation he did not write to the Plaintiff's solicitors confirming this agreement. He said there were two reasons for not writing. Firstly, there was another property in Kam Wah Building handled by Mr Chow and Mr Chow had agreed to complete the transaction without looking at the relevant documents. The second reason was that "there are several days between 4th and 7th. The original completion date should be 7th. According to the oral agreement, the completion should be two days from the receiving of the title deeds. If we can deliver the copies to Mr Chow on 6th, then the date of completion would be on 8th and that would bear some effect on my client." 48. Mr Leung agreed that on 4th December 1992, he had not reported to the Defendant of the possible extension of the completion date. He agreed that he had no authority to vary the completion date without reference to his client. 49. He agreed that in the letters of 7th December 1992 and 8th December 1992 (page 20 of the bundle) from Norman Yung & Co. to Vivien Chan & Co. no reference was made to the oral agreement of 4th December 1992. These two letter were drafted by him. The letter of 8th December 1992 (page 24 of the bundle) from Norman Yung & Co. to Vivien Chan & Co. was prepared by his supervising solicitor based on the information supplied by him. He agreed that this letter also did not refer to the oral agreement of 4th December 1992. When asked about the absence of reference to copy documents or certified true copies in that letter, Mr Leung said that there was an understanding that Mr Chow would peruse the photocopies. If he required the certified copies it would take three weeks for the same to be obtained from the Land Registry, so he told Mr Chow that he would let him have the photocopies. Mr Chow did not object to this or insist on the production of certified copies. 50. When asked whether it was his belief that plain copies were sufficient for proof of title, his replied was that "this is a daily conveyancing practice". When asked if it was his belief that the purchaser was obliged to accept plain copies because of the conveyancing practice, Mr Leung's reply was; "But it is a copy title deed from the Land Registry. Title deed would show who is the owner. They got the register of those. Title and title deeds are two different things. It doesn't mean that if I had the title deeds in my hand, I would be the land owner." 51. He maintained that a vendor could discharge the obligation of proving title by producing the plain copies of the documents if they came from the Land Office. 52. Mr Leung said that there were two ways of dealing with missing title deeds. The first was to write to the mortgagee's lawyer to ask for the deeds. However, this would take time because "theoretically, the set of title deeds and documents would be given to the bank when nothing is missing, so the legal representative who is responsible for redeeming the mortgage would not be responsible to check to see if there is any documents missing. So it would be a waste of time to write to him." The alternative was to get copies from the Land Registry first and to obtain certified copies later. His practice was to go to the Land Office and not to the mortgagee's solicitor. Up to the present moment, he was not aware whether the original documents were still in existence. He agreed that the documents might not be missing and they might have been with the mortgagee's solicitor. 53. Mr Leung was asked about paragraph 3(i) of the Defence and Counterclaim which stated that:-
He said the word "Deeds" in that paragraph meant plain copies because the original would not be coming from the Land Office and there would not be enough time to obtain the certified copies. 54. He denied that there was no agreement between him and Mr Chow. He said he had informed Mr Huen, his solicitor about the agreement but he did not know why the agreement was not referred to in the correspondence; it was the solicitor who signed the correspondence. Vendor's obligation 55. Clause 10 of the Agreement provided that such of the documents of title as relate exclusively to the property shall be delivered to the purchaser. Clause 11 also provided that the vendor shall give good title to the property. 56. The obligation of a vendor in sale of land is two-fold. Firstly, he must show a good title to the property. This he could do by the production of all the relevant documents relating to his good title. Secondly, he is required to make or prove a good title by proving it as a matter of evidence (see for example Ng Chek Kok v. Kiu Wai Ming [1992]1 HKLR 5). 57. In Selkirk v. Romar Investments Limited [1963]1 WLR 1415, the Privy Council held that a purchaser's solicitor should seek to obtain for his client the best evidence that could be obtained in confirmation of the title offered. 58. In Goldenfix Properties Limited v. Cheer Hope Investments Limited, MP No.2940 of 1992, Godfrey, J. (as he then was) held that:-
59. When a deed or other documents of title has been lost or destroyed, secondary evidence of its contents and execution may be given upon proof of loss or destruction, and, if that evidence is clear and cogent, a purchaser cannot object to a title depending on the lost document (Para.158, Volume 42, Halsbury's Laws of England, 4th Ed.). Was the vendor's obligation discharged? 60. The Defendant argued that he had shown and proved a good title to the property by tendering the plain copies of the six title deeds. Mr Leung suggested that according to the conveyancing practice that constituted proof of good title since the documents were obtained from the Land Registry. This is plainly wrong. Where the court is satisfied that a title document existed and that all reasonable efforts had been made by all relevant persons who had or might have possession of it, the court can allow secondary evidence to be produced. In the present case, Mr Leung did not even make any enquiries with the mortgagee's solicitors as to the six title deeds. The original of the six title deeds may or may not exist. However, no attempt had been made to ascertain their whereabouts. There is no evidence showing that they had been lost or destroyed so that secondary evidence in the form of plain copies may be used. In the absence of the original title deeds and in the absence of an explanation why the originals were not available, the obligation of the Defendant was clearly not discharged by the production of the plain copies of the six title deeds to the Plaintiff. Did the Plaintiff's solicitor agree to complete the transaction? 61. The Defendant claimed that on 4th December 1992, Mr Chow agreed that the sale would be completed within two days from the receipt of the copy documents with an undertaking by Norman Yung & Co. to provide certified true copies of the title deeds after the completion of the sale. The Defendant further relied on the oral agreement reached on 7th December 1992 when Mr Chow agreed that if there was no problem with the copy deeds, the Plaintiff would complete the purchase of the property. 62. After considering all the evidence in this case, I do not accept that there were such agreements between the parties. I accept Mr Chow's evidence that he had not agreed to dispense with the production of the original of the six title deeds and to complete the sale with the undertaking of Norman Yung & Co. to supply certified copies of the title deeds after the completion. I accept his evidence that he had asked Mr Leung to supply him with plain copies of the title deeds so that he could peruse them in order to save time and to raise requisitions. The authenticity of the six title deeds would be verified upon the production of the original documents. The reference to copy title deeds in the letter of 4th December 1992 supports rather than contradicts his evidence. I accept his explanation that there was a difference between this transaction and the transaction in respect of the 8th floor flat in which he had agreed to complete the sale with an undertaking by Norman Yung & Co. to supply him with certified copies of two missing title deeds after the completion. He had seen those documents previously in another transaction and those two documents related to the development of the whole building whereas the six title deeds related exclusively to the property. His evidence was not shaken in cross-examination. 63. The burden of proving the existence of the agreements lies with the Defendant. Mr Leung agreed that without the authority of the vendor, he could not extend the completion date of the transaction. Quite surprisingly, he did not report to the Defendant of the agreement he reached with Mr Chow on 4th December 1992. On 7th December 1992, subsequent to the telephone conversation in which Mr Chow told him that he was reading the documents, Mr Leung heard nothing further from Vivien Chan & Co. and he concluded that Vivien Chan & Co. might assume the completion was to be postponed to the next day. If the agreement reached was that the completion was to be 2 days after the receipt of the copies, there was no reason to assume that the completion was to be carried out on the following day and not 2 days after the delivery of the documents. In this connection it is noted that while paragraph 3(ii) of the Amended Defence & Counterclaim pleaded that on 7th December 1992 Mr Chow informed Mr Leung if there was no problem on the deeds, the Plaintiff would complete the sale, in the letter of 8th December 1992, Norman Yung & Co. wrote that,
Was there an agreement to complete the sale or did Mr Chow merely said he would advise his client to complete the sale? Mr Leung had never clarified this and in his witness statement which the parties agreed was to be used as evidence in chief, he did not refer to the agreement reached on 7th December 1992. 64. The agreements relied upon by the Defendant had never been raised in the correspondence between the parties. The letters from Norman Yung & Co. dated 7th, 8th and 10th December 1992 did not refer to the agreements. Mr Leung's explanation why he did not confirm by letter the agreement of 4th December 1992 was in fact not an explanation at all. He said that he had related the events truthfully to the handling solicitor but he could not give any explanation why the agreements were not referred to in the correspondence. If there was indeed an agreement that the parties would complete the transaction by the use of the plain copies with an undertaking by the Defendant to supply certified copies later, this would provide a complete answer to the Plaintiff's election to rescind the Agreement. One would have thought that any solicitor properly appraised of the facts would immediately raise this matter when the Plaintiff decided not to complete the sale. The handling solicitor was not called to give evidence. I am not satisfied that the Defendant has discharged this burden. Relief 65. In the circumstances, I am satisfied that the Plaintiff is entitled to the relief it seeks in its claim. I am satisfied that it is entitled to:-
66. Mr Warren Chan, Q.C., counsel for the Plaintiff, relying on Komala Deccof & Co. S.A. and Others v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) [1984] HKLR219 asked for interest to be awarded at 1% over the prevailing prime rates from 8th December 1992 which was the day of demand of the return of the money. In commercial cases, the interest is intended to reflect the rate at which the plaintiff would have had to borrow money to supply in place of that which was withheld. 67. The principle should apply in the present case. There shall be interest on $80,000, $18,000 and $14,700 from 8th December 1992 at 1% over the prevailing prime rates until judgment and thereafter at judgment rate until payment. In respect of the sum of $11,580 which was the cost of the investigation of the title, it is not clear when this sum was being paid. In the circumstances, I would award interest at judgment rate on this sum from judgment until payment. 68. The Plaintiff is entitled to the cost nisi of this action. 69. While originally the Defendant relied on a Counterclaim, this was abandoned at the hearing. The Counterclaim is therefore dismissed. 70. There shall be judgment for the Plaintiff accordingly.
Representation: Mr Warren Chan, Q.C. and Mr Au Yeung Kwan, inst'd by Vivien Chan & Co., for the Plaintiff. Mr Paul Tong, inst'd by M/s Norman Yung & Co., for the Defendant. |