Li Kin Wo Daniel and Another v. Wong Chun Ping Joey

DCCJ 5263/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5263 OF 2008

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BETWEEN

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Coram : Deputy District Judge Osmond Lam in Chambers

Dates of hearing  :  17^th July 2009

Date of handing down Decision  :  3^rd August, 2009

DECISION

1.The Plaintiffs by way of Order 86 rule 1 of the Rules of District Court applies for summary judgment by a Summons dated 9^th January 2009.

2.By a provisional agreement dated 10^th July 2008, the Plaintiffs agreed to buy and the Defendant agreed to sell Flat C, 22^nd Floor, Admiralty Heights, Belair Garden, 52 Tai Chung Kiu Road, Shatin, New Territories (“the Property”) at a consideration of HK$4.96 million.

3.The time being of the essence and time for completion was on 20^th October 2008.

4.A deposit of HK$150,000.00 was paid upon the signing of the Provisional agreement and a further deposit of HK$346,000.00 was paid on 29^th July 2008 upon signing of the Formal Sale and Purchase Agreement.

5.The title deeds of the Property were delivered by the Defendant’s former solicitors (Darin Leung & Partners) to the Plaintiffs’ solicitors (Tony Kan & Co. “TKC”) on 8^th August 2008.

6.On 15^th August 2008, TKC raised a requisition on behalf of the Plaintiffs. I am not told that such a requisition was not properly raised and in looking at the documents I am satisfied that it was properly raised.

7.Nothing much happened and on 8^th September 2008 TCK was informed that the Defendant had instructed the present Third Party Messrs Thomas Li & Yu (“TLY”) as her solicitors to act on her behalf instead.

8.TLY subsequently agreed in a letter dated 16^th October 2008 which was four days before completion date to provide a 2^nd supplemental DMC to be executed by the existing owners of flats A and C which would somewhat dealt with the requisition raised by the Plaintiffs’ solicitors.

9.On 16^th October 2008, TKC wrote to TLY recording a purported agreement reached between the solicitors for both parties :

“We refer to your letter dated 16^th October 2008 return you herewith your draft 2^nd Supplemental Deed of Mutual Covenant with slight amendments in red.

“As confirmed by your Mr. Nelson Chan, you have agreed to accept an undertaking upon completion to send us the said 2^nd Supplemental Deed of Mutual Covenant duly executed and attested together with the necessary fee and memorial box for its registration at the Land Registry within 7 working days from completion and to bear the stopped deed fee (if any) therefore.(Emphasis added)

“Subject to the aforesaid, we will return you a certified copy of the said 2^nd Supplemental Deed of Mutual Covenant after registration.”

10.From reading this letter, it seems all was well and parties were due for completion four days later subject to the said undertaking as agreed. On the following day (i.e. 17^th October 2008), one of the Plaintiffs Mr. Daniel Li sent TKC a cheque for the balance of the purchase price. I am told that 17^th October fell on a Friday and thus time of completion was on the following Monday.

11.On 20^th October 2008, this letter was written after the weekend and recording a telephone conversation that took place on 17^th October 2008. Things have turned for the worse. The letter as such:

“We refer to our letter of the 16^th instant and our subsequent telephone conversation made between your Mr. Nelson Chan and our Cherry Chan on 17^th October 2008.

“We are surprised to be informed by your Mr. Chan that you denied having agreed to give any undertaking to send us the duly executed 2^nd Supplemental Deed of Mutual Covenant as stated in our said letter or at all.

“In view of the aforesaid please let us have the 2^nd Supplemental Deed of Mutual Covenant duly executed for our perusal before completion, failing which your client will be treated as having failed to prove the title of the Property and such failure will constitute a breach of the Agreement for Sale and Purchase dated 29^th July 2008 (“the Agreement”) entitling our client to rescind the Agreement.”

12.It can be seen that the position of the Plaintiffs’ solicitors is clear. There was an undertaking given by the Defendant’s solicitor which in both parties’ mind cured any problems with the title and such an undertaking was given by TLY to send the 2^nd Supplemental Deed of Mutual Covenant within 7 days after completion. However, during the telephone conversation on 17^th October, the Plaintiffs’ solicitors withdrew that undertaking, thus the Plaintiffs’ solicitors insisted on proving title before completion.

13.TLY did reply on the same day 20^th October 2008 and the full letter needs to be set out as there is now a dispute as to the meaning of this letter in reply. The letter says thus :

“We refer to your letter of even date.

“In the first place, we have to qualify our Mr. Chan’s denial referred to in your said letter. It was the mutual understanding of the parties at the material time that completion shall take place as scheduled i.e. on or before 20^th October 2008. As the draft 2^nd Supplemental DMC had yet to be approved and executed by the owner of Flat A, it would be unreasonable for our Mr. Chan undertaking at that stage to provide you with the duly executed document for registration within 7 days after the said completion date.

“Kindly be informed that the solicitors acting for the owner of Flat A has verbally confirmed their approval of the draft and the same shall accordingly be executed by the parties at an earliest possible date prior to the postponed completion. In thecircumstances, we are prepared to give an undertaking to let you have the duly executed 2^nd Supplemental DMC together with the necessary Memorial and registration fee within 7 days after the date of actual completion.(Emphasis added)

“Needless to say, since the 2^nd Supplemental DMC forms part of the title documents of both Flats A and C, your undertaking to provide us with a certified copy of the document duly registered for our onward transmission to the owner of Flat A is also required.

“ We shall certainly keep you informed of the further development of the matter.”

14.Completion did not take place and on 21^st October 2008. TKC wrote to put on record that the failure to provide the said title document by 5pm on 20^th October 2008 was a failure to give, show and prove title and it accepted the wrongful repudiation by the Defendant. At the same time, TKC also demanded the repayment of the deposits on behalf of the Plaintiffs.

15.On 22^nd October 2008, TLY wrote in reply saying this :

“Despite that our Mr. Chan’s said undertaking was qualified in our reply of 20^th October 2008, it was clear that the parties have consented to postpone the completion date which was scheduled to take place on Monday 20^th October 2008.(Emphasis added)

In view of the facts aforesaid, we are surprised to learn, after a lapse of more than a day as from the said date of completion, that your client decides to rescind the Agreement of 29^th July 2008. We consider that your client is estopped from denying the subsistence of the present Agreement. Your client’s request for refund of the deposits paid thereunder cannot be acceded to.”

16.On the following day, 23^rd October 2008, TKC wrote and denied the alleged agreement to postpone the completion date and asked again for the return of the deposit paid on or before 30^th October 2008. Failing which legal proceedings would be commenced against the Defendant. The rest is history.

17.The issues, as I see them, before this court are simple enough.

18.Whether there was in fact an agreement to postpone the completion date as scheduled pending the 2^nd Supplemental Deed of Mutual Covenant. If not, then the Defendant must have been in breach by failing to provide all the title documents by the completion date. If on the face of the documents that was clear enough and can be decided by this court and there is no other issues to be tried, judgment should be given to the Plaintiffs.

19.Both Defendant and the Third Party appear before me and they have proposed a number of issues that the case ought to proceed to trial. They are as follows :

(a) whether there was an agreement to postpone the completion date and whether there was an agreement that a 2^nd Supplemental DMC was to be provided to the Plaintiffs after the completion date (i.e. within 7 days from completion), which is incidentally the same as that of the Plaintiffs’ suggested issue;

(b) on behalf of the Third Party it was submitted that a revised undertaking was in fact given by their letter dated 20^th October 2008 and thereby forcing the purchaser to complete notwithstanding a postponed completion date; and

(c) in fact in the written submissions of the Third Party, it listed out a large number of issues that the case ought to be tried, for instance, one of which was whether the Plaintiffs by approving the draft 2^nd Supplemental DMC and indicating their willingness to accept an undertaking they were bound by their conduct to complete.

20.With respect to Mr. Tang for the Third Party who has done a very comprehensive written submissions, in this case one has to be more realistic in looking at the situation on the whole and especially not from the angle of events and conduct subsequent to the time of completion. For instance, while conduct can be interpreted as acceptance, in this case, approving a draft DMC was far from such interpretation. In any event, each case is different on their own facts but for cases of this type, one should not be looking at different trees and lost sight of the forest.

21.From looking at all the documents, I come to the conclusion as to the following finding of facts. There is no dispute at the time that requisition was properly raised and parties agreed on a course to deal with that problem. A 2^nd Supplemental or as parties call it a Fresh Deed of Mutual Covenant was to be approved and signed by all parties concerned. The Plaintiffs approved it and the Defendant was waiting for the owners of Flat A and C’s approval and signatures. On 16^th October 2008 there was an undertaking from the Third Party on behalf of the Defendant to the Plaintiffs’ solicitors that the 2^nd Supplemental Deed of Mutual Covenant would be duly executed within 7 days after completion, i.e. after 27^th October 2008. This was acceptable to the Plaintiffs’ solicitors as the way to deal with this problem.

22.Then the Third Party changed their minds as to the undertaking, since it was quite apparent that the time frame of 7 days from completion could not be met at the time. The Third Party went back on their undertaking. The Plaintiffs’ position was clear, if there was no undertaking, then they required a duly executed 2^nd Supplemental DMC before completion, as they were properly entitled to. That was not provided on or before 20^th October 2008 and the Defendant must be in the breach of the said sale and purchase agreement.

23.In all the circumstances, I find that there was no agreement between the Plaintiffs and the Defendant to postpone completion orally or otherwise.

24.Indeed, from the letter of TLY dated 20^th October 2008, it is evident that TLY was saying they would not get the approval and execution by the owner of Flat A on time and that it would be unreasonable to provide the Plaintiffs with such an undertaking. It could only be duly executed at an earliest date prior to “the postponed completion”. It is important to read this sentence in these context : “In the circumstances, we are prepared to give an undertaking to let you have the duly executed 2^nd Supplemental DMC together with the necessary Memorial and registration fee within 7 days after the date of actual completion.” What TLY by this letter must be suggesting at the time was this : please give us more time and postpone the completion today and we could give you an undertaking that the requisite documents would be provided within 7 days after the date of actual completion. Otherwise, why would TLY use the words “after the date of actual completion”?

25.The Plaintiffs rejected this and I have no hesitation to come to the conclusion that there was no meeting of mind here and there was no agreement to postpone the completion scheduled on 20^th October 2008. If there was any revised undertaking or any undertaking, it was simply a proposal of giving such an undertaking, which was not accepted by TKC.

26.Even if I was wrong on the interpretation of this letter of 20^th October 2008 from TLY to TKC, this alleged agreement to postpone was not in writing and was never confirmed by TKC in any of the correspondences before me. It is trite law that any contracts for sale of land has to be in writing. Any oral variation is ineffective : see Wellfit Investment Ltd. v Poly Commence Ltd. (CACV 56 of 1996 unreported 14November 1996 per Godfrey JA). There was nothing in writing to confirm such a variation of the completion date and there was no undertaking in fact given by one party and accepted by another, I therefore come to the conclusion that there was never any agreement capable in law to vary the completion date.

27.To hold otherwise from the documents before me is clearly nonsensical, as the rhetorical question must be what then was the actual completion date if the parties did in fact have come to an agreement on a postponed date. There was none and to think otherwise would be purely devoid of reality.

28.There seems to be some contradictions between the Defendant’s case and her solicitors now the Third Party as to what had happened and their different interpretations of what had happened. However, I do not need to look at those factual dispute in deciding this application and no doubt this matter would be revisited if it were subject of litigation later.

29.As a result and for the reasons given above, I grant the application by the Plaintiffs for summary judgment and judgment is hereby entered against the Defendant with costs and certificate for counsel.

30.I have heard parties as to the matter of costs and I think the Bill of Costs submitted by the Plaintiffs’ solicitors is on the whole reasonable but I make a global figure of HK$100,000.00 as the Plaintiffs’ costs in this application (thus to be divided equally between counsel and solicitors) and I order that the costs be paid by both the Defendant and the Third Party. It must be right that when a party chose to be present in any proceedings and wanted to be heard in order to protect their position, there must be costs consequences when they lost. Thus, I ordered that the costs of HK$100,000.00 to be paid by both the Defendant and the Third Party in equal share, namely HK$50,000.00 each.

31.Needless to say, I thank all parties for their succinct and excellent submissions which crystallized all the issues to be adjudicated.

The Plaintiff : represented by Mr. Victor Dawes instructed by Messrs. Tony Kan & Co., Solicitors.

The Defendant : represented by Mr. Jonathan Tueinstructed by Messrs. Sit, Fung, Kwong & Shum, Solicitors.

The Third Party : represented by Mr. Simon Tang of Messrs. P. C. Woo & Co., Solicitors.