Ng Kar Ning and Another v. Chan Chu Ming and Others
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1. This action was heard by myself on 3 rd October 2000. After the hearing, I granted judgment in favour of the Plaintiff against the 1 st Defendants in the sum of $102,230 together with interest and costs and dismissed the claim against the 2 nd Defendant. I also mentioned that I would give the reasons for my decision at a later date, and this I now do.
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DCCJ023997/99 DCCJ 23997/99
BETWEEN:
___________________ Coram: Deputy Judge Lok Date of hearing : 3rd & 4th October 2000 Date of handing down of Reasons for Decision: 22nd November 2000 -------------------------------------------- REASONS FOR DECISION -------------------------------------------- 1. This action was heard by myself on 3rd October 2000. After the hearing, I granted judgment in favour of the Plaintiff against the 1st Defendants in the sum of $102,230 together with interest and costs and dismissed the claim against the 2nd Defendant. I also mentioned that I would give the reasons for my decision at a later date, and this I now do. 2. The facts of the present case are not very much in dispute. By a tri-parte agreement made between the Plaintiff, the 1st and the 2nd Defendants on 3rd December 1997 (“the Agreement”), the 1st Defendants agreed to sell the property known as Flat C, 5th Floor, Gily Garden House , (“the Property”) to the 2nd Defendants at a price of $5,123,000. Clauses 4 and 5 of the Agreement read as follows:
If either the Vendor or the Purchaser fails to perform this agreement, the defaulting party, should pay our Company’s (the Plaintiff’s) fee and all stamp duty of HK$150,882.50 plus our commission. If in any case the Vendor and the Purchaser agree not to complete the sale and purchase, both the Vendor and the Purchaser shall compensate at once the Agent the commission aforesaid as liquidated damages. The Chinese version of the said clauses read as follows:
3. Pursuant to the terms of the Agreement, the 1st and the 2nd Defendants signed the formal sale and purchase agreement on 17th October 1997. After that, there was a dispute between them relating to the title of the Property, and consequentially the 2nd Defendants commenced an action in the Court of First Instance against the 1st Defendants claiming for the return of the deposit and damages for breach of the agreement. The case was heard by Yuen J. on 3rd November 1998. The learned judge ruled that the 1st Defendants had failed to answer the requisition relating to the title satisfactorily and had failed to comply with section 13 of the Conveyancing and Property Ordinance, Cap. 219, and the learned judge also ordered the 1st Defendants to return the deposit to the 2nd Defendants and to pay damages to be assessed for breach of the agreement. After the said judgment, both the 1st and the 2nd Defendants refused to pay any commission to the Plaintiff under the Agreement, and this resulted in the commencement of the present action. 4. The 1st Defendants apparently seek to deny liability on the following three grounds. Firstly, the 1st Defendants say that their liability to pay commission was conditional upon the successful completion of the sale of the Property. As such condition was not fulfilled in the present case, they are not liable to pay any commission to the Plaintiff. Secondly, the Plaintiff was in breach of its duty as double agent in the present case, and so its claim for commission is not justified. Thirdly, the 1st Defendants claim that the consideration for the agreement to pay commission was past, and so the Plaintiff is not entitled to rely on such agreement to sue for the commission. 5. In my judgment, none of the grounds of defence put forward by the 1st Defendant is a meritorious one. In relation to the first ground of defence, there is simply no basis to say that their liability to pay commission was conditional upon the successful completion of the sale of the Property. In law, an estate agent is entitled to his commission if he introduces the parties and assists them to make a legally binding sale and purchase agreement. What happens after the signing of such agreement would not be under his control, and the same should not affect the agent’s entitlement to his commission. Indeed, that was the arrangement agreed by the parties as stated in the Agreement. Subject to the provisions in clause 5, there is nothing in clause 4 of the Agreement which qualifies the Plaintiff’s entitlement to his commission upon the signing of the Agreement, and hence I do not accept that the Plaintiff’s entitlement is a conditional one. 6. In his final submission, Mr. Chan for the 1st Defendants, in my view rightly, did not pursue the second and the third grounds of defence. Indeed prior to the signing of the Agreement, the 1st Defendants knew full well that the Plaintiff was acting as a double agent for both the vendors and the purchasers and the amount of commission that the Plaintiff was entitled to receive from the 2nd Defendants, and yet they approved the same and proceeded to sign the Agreement. In such circumstances, there is no legal basis to support the 1st Defendants’ allegation that the Plaintiff was in breach of its duty as a double agent. Furthermore, the second-named 1st Defendants admitted that she agreed to pay commission to the Agreement prior to the signing of the Agreement. After that, the Plaintiff continued to provide service to the 1st Defendants in assisting them to conclude the deal for the sale of the Property with the 2nd Defendants. Hence it is not justified for the 1st Defendants to say that the consideration for the agreement to pay commission was past. 7. I now turn to the defence of the 2nd Defendants. Although Mr. Patrick Chong for the 2nd Defendants has put forward a number of arguments, I am of the view that the defence of the 2nd Defendants is indeed simple one. According to clause 5 of the Agreement, the 2nd Defendants were not the parties in default, and so the 1st Defendants, being the parties in default, should pay for all the commission liable under the Agreement. In reply to that, the 1st Defendants argue that there is difference in the meaning of the English and the Chinese versions of clause 5. Mr. Chan for the 1st Defendants submits that the word “悔約”means “willful default”. Although the 1st Defendants had failed to answer the requisition relating to the title of the Property satisfactorily, they were at all material times willing to complete the transaction. Hence the 1st Defendants were not in “willful default”, so they should not be liable to pay all the commission under the Agreement. 8. In my judgment, the meaning of the English and the Chinese versions of clause 5 is the same. The words “悔約“ means “default”, and there is simply no basis for the court to construe such words to mean “willful default” as alleged by the 1st Defendants. Further, it is clear to me that the liability of the parties to pay commission under clause 4 is subject to the provision in clause 5, and so in the case that the transaction is aborted by default on the part of either party, the liability of the non-defaulting party to pay commission would pass to the defaulting party. In the present case, Yuen J. had already ruled that the 1st Defendants were the parties in default, and so they should be liable to pay for all the commission claimed by the Plaintiff. 9. Based on the aforesaid analysis, I granted judgment in favour of the Plaintiff in the sum of $102,230, being the total amount of the commission payable under the Agreement, together with interest and costs against the 1st Defendants and dismissed the claim against the 2nd Defendants. As the Plaintiff was aware of the judgment of Yuen J. before the commencement of the present action, it was not justified for the Plaintiff to bring the claim against the 2nd Defendants, and hence I ordered the Plaintiff to pay for their costs. Further the present case does involve some legal argument including the construction of terms of the Agreement, and so I am of the view that the engagement of counsel is justified in the present case.
Mr. Raymond Lau instructed by Messrs. S. T. Poon & Wong for the Plaintiff Mr. Joseph Chan of Messrs. J. Chan & Lai for the 1st Defendants Mr. Patrick Chong instructed by Messrs. Koo & Partners for the 2nd Defendants |