C & W Watch Co Ltd v. Chu Kwok Tai
Read the full judgment text of HCMP 920/2005 on BabelCite. This High Court CFI judgment was delivered on 10 October 2005.
1. CW Watch agreed to buy and Chu Kwok Tai to sell a unit in the Kwun Tong Industrial Centre.
Cited by 5 cases · Cites 2 cases
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HCMP 920/2005 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO. 920 OF 2005 ____________
____________ BETWEEN
____________ Before: Hon Reyes J in Court Date of Hearing: 10 October 2005 Date of Judgment: 10 October 2005 ______________ J U D G M E N T ______________ I. Introduction 1.CW Watch agreed to buy and Chu Kwok Tai to sell a unit in the Kwun Tong Industrial Centre. 2.By a requisition, CW Watch's solicitors (CYC) asked Chu's solicitors (CDK) to provide originals of 8 documents. CDK refused, saying that the requisition was unwarranted and Chu was not obliged to produce the documents. 3.Chu not having furnished the documents by completion date, CW Watch alleged that Chu was not in a position to give good title. CW Watch consequently treated the sale agreement as rescinded. CW Watch now demands the return of its $107,000 deposit. 4.Chu denies any breach of the agreement. He contends that, by refusing to complete, CW Watch repudiated the sale agreement. Chu thus says that he can keep the deposit. He claims additional sums as damages. 5.I have to decide the following issues:-
II. Background 6.The Agreement for the sale and purchase of the unit was dated 24 March 2005. It provided as follows:-
7.Completion was to take place on 25 April 2005. 8.On 11 April 2005 CYC wrote to CDK that "in order to give a good title" Chu was obliged to produce the following documents:-
9.A long correspondence ensued between CYC and CDK on the request, with CDK denying an obligation to produce the documents. In particular, CDK argued that, since all 8 documents pre-dated the intermediate root of title, they did not have to be produced. CDK relied on Conveyancing and Property Ordinance (Cap.219) (CPO) s.13(1) and Agreement cl.6(a) in support of its view. 10.In fact, none of the 8 documents have ever been in Chu's possession. When Chu bought the unit from his predecessor in title, he did not ask to see any of the documents which CYC were requesting. At no time did Chu offer a statutory declaration in relation to the documents. III. Discussion A. CW Watch's entitlement to the 8 documents 11.CPO s.13 provides as follows:-
12.All parties accept that, if the 15 year period in CPO s.13 applies, the intermediate root of title would commence from an Assignment dated 14 December 1984. 13.Chu reasons from this that, by CPO s.13, except for the Government Lease, CW Watch cannot compel him to produce originals of documents preceding the 1984 Assignment. The 8 documents being all pre-intermediate root documents, Chu argues that he has no legal obligation to produce the same in order to show good title. 14.But CPO s.13 cannot be read in a vacuum. The obligation under s.13(1) is qualified by its opening words: "[u]nless the contrary intention is expressed". 15.Agreement cl.6(a) expressly provides that good title be shown from a document other than an intermediate root of title. 16.Clause 6(a) specifies:-
17.Clause 6(a) manifests a contrary intention requiring that title be shown "commencing from the Government Lease," not from an intermediate root of title document. 18.As a result, CPO s.13(1) does not mandate a shortcut of proving title by an intermediate root document. 19.It follows that CW Watch was entitled to request original copies of the 8 documents. The documents clearly concern title to the unit being sold. Although they are prior to the intermediate root document, they do not precede the Government Lease which is stipulated to be the document from which good title is to be shown. 20.Chu attempted neither to provide original or certified copies of the 8 documents, nor explain by statutory declaration why the 8 documents could not be produced. Therefore, as at the date of completion, Chu was unfortunately in breach of his obligation to show good title. 21.Mr. Lee (appearing for CW Watch) has cited Yiu Ping Fong v. Lam Lai Hing Lana [1998] 4 HKC 476 (Yuen J) and Guang Zhou Real Estate Development (HK) Co. Ltd. v. Summit Elegance [2000] 2 HKLRD 855 (Deputy Judge Chu) in support of his case. 22.In Yiu Yuen J differentiated between an obligation "to give good title" and one "to show good title". She believed that a vendor typically had to do both in an ordinary sale of land. She held that CPO s.13(1) applied only to the latter obligation, but not to the former. She thought that on completion a vendor was still obliged, absent clear agreement to the contrary, to provide originals of title deeds and documents relating exclusively to the property sold. 23.In Guang Zhou Real Estate Judge Chu interpreted Yiu as holding that the obligation to "give" (as opposed to "show") good title extended to production of documents pre-dating even an intermediate root of title. 24.I confess to doubts about the correctness of Yiu and Guang Zhou Real Estate on the point raised by Mr. Lee. In particular, I am unsure whether there is a distinction between "giving" and "showing" good title. The supposed distinction would emasculate CPO s.13 of practical effect. But, given my conclusion based simply on the construction of Agreement cl.6(a), it is unnecessary and undesirable for me to explore the question further here. B. CW Watch's entitlement to treat the agreement as rescinded 25.From my conclusion that Chu breached the sale agreement, it follows that CW Watch was entitled to treat the agreement as repudiated by Chu and at an end. C. Chu's entitlement to the deposit and further damages 26.It also follows from my conclusion that Chu cannot retain the $107,000 deposit. Nor would Chu be entitled to additional damages. 27.Chu has claimed a number of heads of actual damage. As far as I can see, the total damages claimed amount to less than the deposit. 28.A deposit represents liquidated damages. The Agreement arguably does not preclude Chu from seeking further damages, over and above the deposit, to the extent that Chu has suffered greater loss than $107,000. But since total actual damages allegedly suffered by Chu are seemingly less than $107,000, then even if I had been in Chu's favour on liability, I would still have refused to award an amount over the deposit. IV. Conclusion 29.CW Watch is entitled to the return of its deposit. Chu's counterclaim for damages is dismissed. 30.I will hear the parties on costs and consequential orders.
Mr Lee Yee Hung, instructed by Messrs Cheng, Yeung & Co., for the Plaintiff Miss Jennifer Ng, instructed by Messrs C D Kan & Co., for the Defendant | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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