Win Wave Industrial Ltd v. Gosbon Industries Ltd and Others

DCCJ 209/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO.  209 OF 2007

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BETWEEN

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Coram: His Hon Judge Leung in chambers (open to public)

Date of hearing: 12 June 2009

Date of decision: 17 June 2009

DECISION

1.In this case, Win Wave (the Plaintiff) claimed against Gosbon (the 1^st Defendant) for misrepresentation leading to their provisional agreement for the sale and purchase of a property in Melody Garden, Tuen Mun.

2.Centaline (the 2^nd Defendant), Chung (the 3^rd Defendant) and Lai (the 4^th Defendant) were the estate agents instrumental to the conclusion of the provisional agreement. Win Wave claimed against them for breach of duties.

3.On 27 April 2009, I handed down the judgment in this case.  I found that the mispresentation on part of Gosbon was proved.  I also found that the breach of duties on the part of the estate agents was proved.  All Defendants are therefore liable.

4.I made the following order:

(1)  Declaration that Win Wave was entitled to rescind, and has validly rescinded, the provisional agreement and is entitled to the return of the initial deposit of HK$500,000;

(2)  Judgment against the 4 Defendants for damages in the sum of HK$505,060; and interest at the judgment rate from the date of writ until payment;

(3)  As between Gosbon of one part and Centaline, Chung and Lai of the other part, liability be apportioned at the ratio of 85% and 15%;

(4)  Win wave shall have costs of this action against all 4 Defendants, including any costs reserved;

(5)  All costs shall be taxed, if not agreed.  For the avoidance of doubt, I certify the engagement of counsel;

(6)  Costs order is nisi and will become absolute in the absence of any appointment within 14 days to argue costs.

5.Centaline, Chung and Lai took out a summons applying for leave to appeal.  Gosbon followed but its summons was admittedly out of time.  Counsel representing the Defendants at the trial appeared in this hearing.

6.The court has to consider if the intended appeal has a reasonable prospect of success: Smith v Cosworth Casting Processes Ltd [1997] WLR 1538; Ma Bik Yung v Ko Chuen, HCMP 4303/1999.  This is effectively similar to what the new section 63A(2) of the Rules of the District Court provides.

7.Counsel confirmed that the Defendants do not challenge against this court’s findings.  The intended appeal concerns the order made.

8.Between Win Wave and Gosbon, Mr Wong for Gosbon essentially argued that there ought not to have been an order effectively for both the return of the initial deposit and damages.  Miss Leung argued this point but in a different way.

9.I am satisfied that there is a reasonable prospect of success in the contention that the order, as it now stands, is problematic; and that (1) as against Gosbon, Win Wave should have the return of the initial deposit or alternatively damages in the same amount (as I ordered) together with the out-of-pocket conveyancing expenses; and (2) as against the estate agents, Win Wave should have judgment for damages in the amount of the initial deposit plus the conveyancing expenses.

10.Mr Li for Win Wave fairly took issue that Gosbon’s application was out of time.  Mr Wong admitted that Gosbon’s summons was slightly less than 2 weeks out of time.  There is no affidavit to explain the delay.  But in his written submission, Mr Wong attributed the delay to his being alerted by the late corrigendum of this court whereby the declaration of Win Wave’s right to the return of the initial deposit was added.

11.Mr Wong submitted that an important consideration before leave to appeal out of time should be granted is still the merits of the intended appeal.  He submitted that Gosbon’s intended appeal is sufficiently meritorious.  In view of what I said above, I would allow Gosbon to proceed with its intended appeal out of time.

12.As between Gosbon and the estate agents, Miss Leung for the estate agents essentially argued that the agents should be entitled to a full indemnity by Gosbon against their liability towards Win Wave.  Mr Wong disagreed.

13.Contrary to Mr Wong’s suggestion, the issue of apportionment or contribution/indemnity was clearly argued at the trial.  In view of my findings and my observation of the respective responsibility of each of the Defendants (in particular, the first part of paragraph 114 of the judgment), I am satisfied that there is a more than reasonable prospect of success in the contention that the estate agents should be fully indemnified by Gosbon, perhaps except for the estate agents’ own costs in defending Win Wave’s claim against them for breach of duties.

14.Gosbon asked for stay of execution.  There is no dispute that Win Wave should be compensated by the amount of the initial deposit plus the conveyancing expenses.  Among the Defendants, the intended appeal goes to the question of contribution/indemnity only. In the circumstances, I would grant stay of execution of paragraph (2) of the order above against Gosbon to the extent of HK$500,000.

15.I grant leave to appeal and stay of execution in the above terms.  Costs of these applications be in the cause of the respective Defendants’ appeals.

Mr Paul LI of Messrs K M Lai & Li for the Plaintiff

Mr Peter K C WONG instructed by Messrs Chan Wong & Lam for the 1^st Defendant

Miss Shannon LEUNG instructed by Messrs Cheung & Choy for the 2^nd, the 3^rd and the 4^th Defendants