Tin Shui Wai Development Ltd v. Kam Hung Wan Winnie

DCCJ 662/2004

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 662 OF 2004

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BETWEEN

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Coram: H.H. Judge Chow    

Hearing date : 12^th February 2008

Date of handing down Decision : 9^th April 2008

DECISION

1.This is an application by the Plaintiff to strike out the Defence and Counterclaim of the Defendant, pursuant to Order 18, r. 19 of the Rules of the District Court, and to enter final and interlocutory judgment against the Defendant. 

2.The Plaintiff is the owner of the development known as Blocks 1 to 8 Maywood Court of Kingswood Villas, situate at Tin Shui Wai Town Lot No. 6, New Territories (“the Development”).  Under an agreement for sale and purchase (“the Agreement”) made on 21^st May, 1997 between the Plaintiff and the Defendant, the Plaintiff as the vendor agreed to sell and the Defendant as the purchaser agreed to buy the property known as Flat F on 4^th floor of Block 7 of the Development (“the Property”) at the price of $2,976,000.00.

3.Under Clause 3(1) and Schedule 4 of the Agreement, the purchase price is payable by the Defendant as follows:-

(1)   the amount of $297,600.00 (10%) has been paid as deposit on signing the agreement preliminary to the Agreement;

(2)   a further amount of $297,600.00 should be paid within 14 days of the date of the Agreement;

(3)   a further amount of $297,600.00 should be paid on or before 1^st November 1997; and

(4)   a sum of $2,083,200.00, being balance of the Purchase Price, shall be paid within 14 days of the date of notification to the Defendant that the Plaintiff is in a position validly to assign the Property to the Defendant.

The Defendant paid a total of $892,800.00 to the Plaintiff as deposit and part payments.

4.By virtue of Clause 5(2) of the Agreement, the sale and purchase of the Property shall be completed within 14 days of the date of notification by the Plaintiff to the Defendant that the Plaintiff is in a position validly to assign the Property to the Defendant.

5.On 17^th June 1998, a Consent to Assign in respect of the Property was issued by The Lands Department.  Pursuant to Clause 5(2) of the Agreement, the Plaintiff notified the Defendant by a letter dated 30^th June 1998 from Messrs. Baker & McKenzie, the solicitors then acting for the Plaintiff, that it was in a position to validly assign the Property to the Defendant.  The Defendant was required to pay the balance of the purchase price and other monies payable under the Agreement and to complete the purchase of the Property within 14 days of the date of the said letter.  The Defendant failed to complete the purchase within the period required.

6.By a letter dated 9^th October, 1998 from its solicitors Messrs. Baker & McKenzie, the Plaintiff issued a notice to the Defendant, calling upon her to make the necessary payment and to complete the purchase within 21 days.  The Defendant failed to make good the default and to complete the purchase within the period as required.  Accordingly the Plaintiff exercised its right to determine the Agreement under Clause 16(1) of the Agreement and issued a notice of determination to the Defendant by a letter dated 3^rd November, 1998 from Messrs. Baker & McKenzie whereby the Agreement was determined and the Plaintiff claimed its rights under Clauses 16(2) and 16(3) of the Agreement.

7.The Defendant pleads that by reason of  (a) the Plaintiff’s breach of the implied term of the Agreement as set out in paragraph 3 (17) of the Defence; (b) its failure to answer her requisition as to when possession of the Property would be delivered to her sufficiently or at all; and / or (c) its failure to complete the Development in accordance with clause 4(1)(c) on or before 31^st December, 1997, the Plaintiff was not ready or able to complete the sale and purchase of the Property and was not entitled to serve any notice under clause 5(2) or 16(1) of the Agreement.

The breach of an Implied Term

8.No implied term was set out in paragraph 3 (17) of the Defence as alleged.  Under paragraph 3 (17) of the Defence the Defendant pleads that: -

“The Defendant has since discovered and the fact is that:

(a)          The Plaintiff failed to complete the Development in accordance with clause 4(1)(c) on or before 31^st December 1997.

Particulars

In about April, 2000, the Defendant was provided with a copy of a Bond given by the Bank of East Asia, Limited dated 4^th June 1998 (“the Bond”) and an Undertaking given by the Plaintiff to the Government on the same day (“the Undertaking”), which documents suggested that works in connection with the Development had not been completed even on 4^th June 1998, which was more than five months after 31^st December 1997.  Such information or evidence shows that the Plaintiff failed to have completed the Development in accordance with clause 4(1)(c) on or before 31^st December 1997.

Further particulars of the specific matters which had not been so completed are within the knowledge of the Plaintiff and shall be supplied after discovery and interrogatories on such matters have been concluded.

(b)          Further or in the alternative, the Plaintiff could only deliver possession of the Property to the Defendant in mid July 1998.

Particulars

By a letter dated 30^th June 1998, the Plaintiff purported to notify the Defendant the Plaintiff was in a position to validly assign the Property to the Defendant and require the Defendant to pay the balance of the purchase price and other monies and to complete the purchase of the Property within 14 days thereafter.”

There is nothing pleaded in the Defence to show how the implied term, if any, came to be constituted.  It is a bare assertion.  Therefore the Defendant’s defence in this aspect cannot stand. 

9.The Defendant pleads that the Plaintiff failed to answer the Defendant’s requisition as to when possession of the Property would be delivered to her sufficiently or at all.   But she has not pleaded any fact relating to her requisition as to when possession of the Property would be delivered to her.  She has not shown the legal basis upon which the Plaintiff is obliged to answer the Defendant’s requisition as to when possession of the Property would be delivered to her.

Delay in completing the Development

10.Clause 4(4)(a) of the Agreement provides that if the Vendor fails to complete the Development by the date specified in sub-clause (1)(c) as extended by any extensions of time granted by the Authorized Person under sub-clause (5)(a), the Purchaser shall be at liberty to rescind the Agreement.  Clause 4(4)(b) provides that if the Purchaser does not rescind the Agreement she shall be deemed to have elected to wait for completion of the Development.  The Defendant did not rescind the Agreement at all.  Therefore I cannot see how the delay can constitute a ground for refusing to complete the purchase.   So the Plaintiff is entitled to serve the notice on her for completion of the sale and purchase of the Property.

11.The Defendant pleads that the substantial delay is not contemplated and that during the period of delay, the property market had suffered a severe downturn; it was unfair and inequitable for the Plaintiff to insist upon the Defendant to complete the purchase of the Property or to pay the balance of the price.  This is not a term of the Agreement.  So it is not a ground not to complete the purchase of the Property.  The Plaintiff is entitled to exercise its rights given by the Agreement.  In my judgment, the Defendant was under a contractual obligation to complete the purchase of the Property, but she failed to discharge that duty.

12.The Defendant has not demonstrated that she has a reasonable defence.  The grounds for the Counterclaim is just a repetition of the defence.  I therefore order that the defence and counterclaim be struck out, and I enter judgment for the Plaintiff, with damages to be assessed.

Costs

13.I make an order nisi, to be made absolute in 14 days’ time, that the Defendant do pay costs of the action to the Plaintiff, to be taxed, if not agreed.

The Plaintiff :      represented by Mr. T. Lee of M/S. Hobson & Ma, Solicitors.

The Defendant:   absent, unrepresented.