Chin So Hang v. Lee Chee Kin
Read the full judgment text of DCCJ 3371/2003 on BabelCite. This District Court judgment.
1. This is a claim by the Plaintiff against the Defendant for the return of the deposit of $186,800 for the purchase of a ground floor unit and also the agency fees to the estate agent, $18,680.
Cited by 1 case
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DCCJ 3371/2003 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 3371 OF 2003 ____________ BETWEEN
____________ Coram: Deputy District Judge M. Chow Date of Hearing: 26th ,27th ,28th ,29th June & 11th July 2006 Date of Handing Down Judgment: 29th August 2006 _________________ JUDGMENT _________________
1.This is a claim by the Plaintiff against the Defendant for the return of the deposit of $186,800 for the purchase of a ground floor unit and also the agency fees to the estate agent, $18,680. 2.The Defendant counterclaimed for the forfeiture of the deposit as the Plaintiff was in breach of the Agreement. 3.The property located at Section D of Lot 196 in Demarcation District 21 of a small village house, Phase III of Chui Yee Villa. 4.On 3rd May, 2004, the property was resold to a third party in a sum of $1,860,000. Background 5.The Plaintiff lived in Yuen Long. She and her family planned to move from Yuen Long to Tai Po in order to accommodate her son to study in Tai Po. 6.On 15th May, 2002, the Plaintiff instructed an estate agent, Miss Cheng, to show her and her husband some properties in Tai Po. When they came across a show flat of Phase II of the Chui Yee Villa, they wanted to buy one of the units. For fung shui reason, they also wanted to change the main entrance to south facing, but the developer told them that could not be done. 7.The agent, Miss Cheng, then invited them to consider Phase III which was adjacent to Phase II and took them to view Phase III which was totally undeveloped. The land was still covered with wild grass, weeds and groves. 8.However, Miss Cheng told her that she could decide the direction of the entrance of her unit if she bought a property in Phase III. Miss Cheng took the Plaintiff and her husband back to her shop. They were shown a computer generated image and also the brochure of Phase III. The Plaintiff decided to purchase the ground unit of Lot 196D, House C in a sum of $1.868 million. The Sales and Purchase Agreement 15th May, 2002 The Oral Agreement and/or Collateral Warranty 9.It was the evidence of the Plaintiff that she had been told by Miss Cheng and Mr. Lui that building works in Phase III would commence in June 2002 and be completed in January 2003. 10.In reliance of this representation, Miss Chin entered into agreement with Mr. Lui on 15th May, 2002 in the shop of Miss Cheng. Pursuant to the Sales and Purchase Agreement , the Plaintiff had paid two deposits:-
11.The Plaintiff also paid the estate agent, Miss Cheng, an agent fee of $18,680. 12.The Defendant disputed that there was such an oral agreement or collateral warranty. Mr. Lui said that to build a village house was a “very complicated and long-waiting process.” It all depended on a number of documents issued by the District Land Office. Mr. Lui said that he had explained the process to the Plaintiff who in turn said that she could “wait”. The Plaintiff denied that she could wait. The additional term (August or early September, 2002) 13.The Plaintiff had visited the site several times and found no building works being carried out. She then entered an additional term with Mr. Lui sometime in August or early September, 2002. The additional term in clause 12:-
14.The Plaintiff did not pay the 3rd deposit because she argued that the Mr. Lui failed to commence work on the Lot on or before 10th October, 2002 and she demanded the return of the $186,800 deposits. 15.Mr. Lui said otherwise that in fact building works had been commenced on the Lot before the 10th October, 2002. Since the Plaintiff refused to pay the 3rd deposit, Mr. Lui on 15th November 2002 instructed his solicitor to inform the Plaintiff that the deposit of $186,800 had been forfeited. The Issue 16.The Defence said that Clause 12 was not a “badly drafted clause” as in the case of Investors Compensation Ltd. v West Bromwich Building Society (1998) 1 WLR 896. Therefore, evidence of negociations (the alleged oral agreement and/or collateral warranty) or parties intention should not be received as per Prenn v Simmonds (1971) 1 WLR 1381. 17.In Prenn’s case, Lord Wilberforce said that, at p.1385, “evidence of negotiations, or of the parties’ intention,……. ought not to be received, and evidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the “genesis” and objectively the “aim” of the transaction.” 18.The Plaintiff ‘s counsel in her final submission stated that this case mainly turns on the construction of the additional term added to the Chinese Sales and Purchase Agreement by mutual agreement. I agreed. 19.Construction of the addition term must be construted in the light of factual matrix. Lord Hoffman in Investors Compensation Ltd v West Bromwich Building Society at 912-3 said that factual matrix comprises “all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. Bearing in mind that there was a history of events from 15th May, 2002 to 10th October, 2002. Documents for Commencement of Building Works 20.The Defendant in this case is an indigenous villager in the New Territories with the right to build a village house (which is commonly called small house) on the Lot in question. Before he started to build the village house, he had to apply to the District Land Office for a building licence to build the small house on Lot 196. 21.The Defendant also had to submit application to the District Land Office for Certificates of Exemption. These Certificates of Exemption include the building works, site formation works and drainage works. 22.The Defendant instructed Lui Wing Fat by way of Power of Attorney dated 1st February 2002 to act on his behalf in all matters relating to the development and building of the Lot. 23.In July, 2002 the building licence was granted to the Defendant. 24..In July, 2002 the “Commencing-works Documents 開工紙” were also issued to the Defendant by the District Land Office. 25.When the parties entered into the Agreement on 15th May, 2002, there was discussion about the time of commencement of works between Mr. Lui and the Plaintiff. Paragraph 19 and 20 of Mr. Lui’s witness statement :-
26.Clearly, the deciding factor for commencement of building works on the site was the “Commencing-works Documents 開工紙” issued by the District Land Office. Inspection of the site by the Plaintiff Mid-June, 2002 27.In around mid-June, the Plaintiff and her husband visited the site with a view to find out the progress of the building works. No sign of works had been commenced on the site except that wild vegetations had been removed. 28.The Plaintiff called the agent Miss Cheng who also confirmed in her evidence that the Plaintiff did call her about the progress of the works on the site. The purpose of the call showed the Plaintiff was anxious to know what happened to the site and when would Mr. Lui started to build House C. 29.Miss Cheng also confirmed that the Plaintiff had told her the property was for self-use. 30.It is obvious from the facts before me that Mr. Lui must have passed the “Commencing-works Documents 開工紙” to Miss Cheng who then faxed to the Plaintiff on 28th July, 2002. 31.The reason of providing a copy of the “Commencing-works Documents開工紙” to the Plaintiff was to inform her that all the necessary documents for commencement of building works on the site was now ready. In other words, Mr. Lui could proceed to start construction of small houses on the Lot if he wished. 32.Having received the copy of the “Commencing-works Documents開工紙”, the Plaintiff had all the reasons to believe that commencement of works on House C would not be far way. August, 2002 33.In August, 2002, the Plaintiff visited the site again and found that the site remained very much the same as in June’s visit. The Plaintiff called the agent Miss Cheng who told her to contact Mrs. Lui directly. 34.Mrs. Lui told the Plaintiff that “works on the Lot had been commenced in August”, the “Plaintiff then challenged my wife (Mrs. Lui) by saying how long she still had to wait for the completion of the Property.” (Paragraph 32 of Mr. Lui’s witness statement.) 35.In other words, the Plaintiff wanted to see substantial works being done on the site. Mere clearance of wild vegetations was not enough. 36.The Plaintiff and Mrs. Lui subsequently agreed that building works on the Lot would commence before 10th October, 2002 and the party agreed that this term of agreement would put down into writing on the original Chinese Sales and Purchase Agreement. October, 2002 37.On 10th October, 2002, the Plaintiff and her husband visited the Lot again and found no sign of building works on the site. Works on site in August, 2002 38.Mr. Li Fu Wing was the main contractor of the Development of the Chui Yee Villa. At about the beginning of August, 2002, Mr. Lui asked him to commence works on the Lot. He rented an excavator for 10 days to remove all the wild vegetations and trees from the site. 39.The clearing of the wild grass, groves and trees was for the preparation of the surveyor to conduct survey on the site. 40.At about the beginning of September, 2002, the surveyor came onto the site to conduct surveys for delineating locations of the 18 small houses on the site and marked the respective boundaries and house corners. 41.On 6th October, 2002, Mr. Li signed a construction contract with Mr. Lui to build the 18 small houses on the Lot. Works on site in October, 2002 42.Mr. Li’s evidence in Court was that :-
43.There was no evidence what was done on the site on 10th October, 2002. 44.The Plaintiff’s solicitor took some photos on the site on 12th October, 2002, there were no workers, no equipment and no sign of progressing works could be seen on the site. The Meeting at the agent’s shop on 10th October, 2002 45.The Plaintiff said that since the site was very much the same as in August, 2002, she called the agent Miss Cheng to arrange a meeting with Mr. Lui to discuss the refund of the deposit to her. 46.Mr. Lui ‘s evidence was that he expected to collect the 3rd payment in accordance with the agreement.
47.During the meeting, the Plaintiff refused to pay the 3rd installment. There was a debate between the parties whether there was any building works commenced in the site. Mr. Lui said that the Plaintiff would made payment only on condition that he had built the 18 small houses by the end of January, 2003. 48.Mr. Lui ‘s evidence further said that he told the Plaintiff to made the 3rd payment to him and he would pull all the resources to build House C and be completed by the end of January, 2003. 49.At this point of time, it was clear that the Plaintiff wanted to see the completion of the house by the end of January, 2003. 50.The Plaintiff denied that the meeting was held because of the collection of the 3rd payment by Mr. Lui. She called the meeting with Mr. Lui was to confront him why there was no commencement of works on the site. Her intention was to ask Mr. Lui to refund her the deposit. 51.The meeting developed to such a stage that Miss Cheng called police to assist as the Plaintiff allegedly brought two men to “blackmail” Mr. Lui (as pleaded in the Defence p 21 para.7). 52.Both Miss Cheng and Mr. Lui said that they only felt being intimidated. The police never pressed charges against any person in this matter. Findings:- 53.I tended to believe that the meeting was not for collection of the 3rd payment. Rather, by calling her husband and two men to the scene was to create pressure on Mr. Lui and to demonstrate the Plaintiff ‘s determination to get back her deposit. It was all because the Plaintiff had lost her confidence in Mr. Lui to finish the building works of House C by the end of January, 2003. 54.From all the activities of the Plaintiff who regularly visited the site and her initiative to contact Miss Cheng to find out the situation, I do not believe Mr. Lui and Miss Cheng’s evidence that the Plaintiff had told them before entering into the agreement that she would wait despite the fact that they had told her there was no certainty of when the building work would commence in the site. 55.The Plaintiff had said it very clearly in her evidence that the meaning of building work “動工” was to build a house “起樓”. A house is an object that can be seen standing on the Lot. 56.She had seen the site being cleared, no more vegetation on the Lot. In July, 2002, she had been provided with a fax copy of the Certificate of Exemption for Building Works and Drainage Works which means Mr. Lui could commence work on the site. It would be a reasonable expectation on her part to see the progress of the building works being carried out on the site. 57.What Mr. Li (the contractor) had done on the site was preparation work for building the 18 small houses on the Lot. The dates for the preparation works were just 3 days before the deadline, i.e. the 10th October, 2002. Those works were totally redundant in nature because they had been done in August, 2002. 58.Between August, 2002 and October, 2002, there was no other works been carried out. It would be absurb to expect the Plaintiff to see on 10th October, 2002 what she had been seen in August 2002. She was entitled to expect obvious steady progress of the erection of House C on the Lot. 59.The additional term was a result of the Plaintiff’s frustration at the lack of progress on the site between June 2002 and August 2002 especially in light of the fact that Certificates of Exemption were issued in July 2002. In addition, Mr. Lui told the Plaintiff at the time of signing the Sales and Purchase Agreement that if the commencing works documents were issued in June, he could commence work in June 2002. 60.Mr. Lui’s works on the site between 7th to 9th October, 2002 was to return the status of the site to August, 2002. Physically, there was no material difference. 61.For the above reasons, I enter judgment for the Plaintiff, the Defendant was in breach of the additional term. The Defendant’s counterclaim be dismissed. Costs application for preliminary issue argument 62.Before the commencement of the trial (on the 26th June, 2006), the Plaintiff’s Counsel Miss Lam made submission on the admissibility of the Chinese Sales and Purchase Agreement which had not been stamped. According to S.15 of the Stamp Duty Ordinance, Cap 117, the Chinese Sales and Purchase Agreement should not be admitted as evidence because it had been stamped by the Stamp Duty Office. 63.Miss Lam argued that the Chinese Sales and Purchase Agreement fell within the exceptions of S.29C (5A) of the Stamp Duty Ordinance and should be admissible for the purpose of this trial. After 45 minutes submission by Miss Lam, Mr. Li told this court that if the Plaintiff’s solicitor undertook to stamp the Chinese Sales and Purchase Agreement, this case could proceed. 64.The point of agreement by Mr. Li was purely academic. However, the Plaintiff’s solicitor refused to give such an undertaking. 65.At about 10:30 a.m., Mr. Li asked for an hour to digest Miss Lam’s “list of authorities” which were supplied to him at 9:30 a.m.. 66.At about 11:30 a.m., Miss Lam told this court in fact the Chinese Sales and Purchase Agreement had been taken to the Stamp Duty Office (that morning on 26th June, 2006) and a stamp of “adjudicated not chargeable with stamp duty” appeared on the document. 67.When asked by this Court why this was not done earlier, Miss Lam said that the Plaintiff’s solicitor received a list of authorities from the Defendant on Friday 23rd June 2006 and realized that there was no prospect to compromise between the parties as to the admissibility of the Chinese Sales and Purchase Agreement, the Plaintiff’s solicitor took a copy of the Sales and Purchase Agreement to the Stamp Duty Office on Saturday 24th June, 2002. However, the Stamp Duty Office requires an original copy of the Chinese Sales and Purchase Agreement. 68.Therefore, it was on Monday morning 26th June, 2002 that the Plaintiff’s solicitor send the original copy to the Stamp Duty Office which was located in the Revenue Tower. 69.At about 11:30 a.m., the Plaintiff’s solicitor got the result from the Stamp Duty Office and stamped on the original copy that “adjudicated not chargeable”. Mr. Li wished to find out whether it was “adjudicated” provisionally or it was a final decision by the Stamp Duty Office. 70.At about 12:30 a.m., Miss Lam found out that under S.13 (6) of the Stamp Duty Ordinance, Cap. 117,
71.Mr. Li accepted that Chinese Sales and Purchase Agreement should be admissible in evidence. 72.Miss Lam proceeded with her opening at 12:45 a.m.. 73.At the end of the trial, Miss Lam asked for wasted costs order while Mr. Li asked for indemnity costs order in respect of this preliminary issue agreement. Ruling 74.The Plaintiff has been informed by the Defence of the issue of S.15 of the Stamp Duty Ordinance, Cap. 117 one week before trial. On 21st June, 2006, the Defendant’s solicitor also wrote to the Plaintiff’s solicitor that they were of the “view that S.29C (5A) of the Stamp Duty Ordinance is not applicable to the subject Chinese Sales and Purchase Agreement”. The Plaintiff’s solicitor was fully aware that the objection and/or argument would take place on 26th June, 2006. 75.The Plaintiff could have avoided the unnecessary waste of time by sending the original copy of the Sales and Purchase Agreement to the Stamp Duty Office before the trial commenced on 26th June, 2006. 76.Miss Lam’s list of authorities and her skeleton argument only served to Mr. Li at 9:30 a.m. on 26th June, 2002. He was entitled to have time to read the authorities. 77.I therefore refuse the Plaintiff’s application for costs. 78.I also refused the Defendant’s application for indemnity costs order because Miss Lam did has her points of arguments whether the Chinese Sales and Purchase Agreements “without stamp” falls within the exception S.29A (5C) of the Stamp Duty Ordinance, Cap. 117. 79.The proper costs order is costs to the Defendant in respect of the time for the preliminary issue argument. ORDERS 80.The Plaintiff is entitled to the refund of the $186,800 deposit and the agency fee of $18,680 from the Defendant. That also put an end to both parties of all the obligations remain unperformed in the Chinese Sales and Purchase Agreement. 81.The Plaintiff is entitled to interests from 10th October 2002 at the rate of 5.5% and judgment rate from the date of judgment. Costs follow the event, I made an order nisi for costs to the Plaintiff. This order will be made absolute after 14 days from today.
Ms. Lam, Catrina D.W., instructed by M/s J. Chan, Yip, So & Partners, for the Plaintiff. Mr. Li, Albert K.C., instructed by M/s Tam & Partners, for the Defendant. |
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