Chung Siu Kong and Others v. Kitty So & Tong Solicitors (A Firm)
|
CACV 157/2010 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 157 OF 2010 (ON APPEAL FROM HCA NO. 643 OF 2010) ________________________ BETWEEN
________________________ AND CACV 187/2010 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 187 OF 2010 (ON APPEAL FROM HCA NO. 496 OF 2010) BETWEEN ________________________
________________________ Before: Hon Rogers VP, Le Pichon and Cheung JJA in Court Date of Hearing: 22 December 2010 Date of Handing Down Judgment: 6 January 2011 ________________________ J U D G M E N T ________________________ Hon Rogers VP: 1.These were 2 appeals made in respect of orders made in 2 separate but related actions. The first order appealed from was an order of Stone J, made on 24 June 2010, whereby it was ordered that the plaintiffs should have 50% of their costs of the application for injunctive relief against the defendant. The defendant, a firm of solicitors, appealed against that order and sought an order that the plaintiffs should bear the costs of those proceedings. 2.The second order was made by Suffiad J on 27 May 2010 in a second action. By that order the plaintiffs were given leave to discontinue that action but the first, second, third, fourth and sixth plaintiffs were ordered to pay the defendant’s costs of defending the action and of the inter partes summons. The plaintiffs appealed against that order. 3.At the conclusion of the hearing of these appeals judgment was reserved which we now give. Background 4.The plaintiffs were 6 out of 8 persons appointed as Representatives of the overwhelming majority of owners of flats in Kai Tak Mansion under the terms of an agreement dated 27 March 2009 (“the Agreement”). The terms of the Agreement that are important for the purposes of this case are as follows:
5.Clause 10 provided that the defendant should prepare the tender conditions which had to be approved by the owners. Clause 15 provided as follows:
The background 6.Prior to the issue of the first writ there had been a first, albeit unsuccessful, tender exercise. It was therefore necessary to have a second tender exercise. The upset price of the tender was $1.5 billion. Prior to the closing date for the second tender, 31 March 2010, one tender had been submitted. That had been unopened. On 29 March 2010 the defendant’s solicitors received a letter from another firm of solicitors which was headed WITHOUT PREJUDICE AND SUBJECT TO CONTRACT. That letter stated:
7.The accompanying document indicated that the offer was in fact HK$1,500,000,000. Although in the course of this appeal, Mr Leong SC, who appeared on behalf of the plaintiffs, persisted in arguing that this was an offer, it clearly was not an offer. It was, at best, an invitation to treat. The first Order 8.In the first action the plaintiffs sought the delivery up of the unopened tender that had been submitted by the sole tenderer. The defendant firm considered that they were bound by their instructions and that the letter which had been received from the other firm of solicitors did not constitute an offer which fell within the terms of clause 15 of the Agreement. The defendant firm was unwilling to comply with that request by the Representatives on the basis that it did not conform with the Agreement which the owners had entered. The matter came before Stone J and, to be brief, the matter was concluded when the defendant firm’s instructions were withdrawn. The second Order 9.The second action was commenced on 6 May 2010 and by that action the plaintiffs sought the delivery up of all title deeds and documents of title relating to Kai Tak Mansion. Those title deeds, of course, belonged to the various owners of flats in Kai Tak Mansion and the relevant mortgagees, if there were any. These appeals 10.Despite the sustained arguments which were raised on behalf of the plaintiffs, I consider that the defendant firm had acted in a proper way and had performed their function as solicitors in a way which would be expected of a firm of solicitors acting properly in the interests of those for whom they were acting. The invitation to treat which had been received did not conform to an offer which would have permitted the Representatives to entertain that offer in preference to any tender offer. There was clearly a tender offer and the owners were entitled to know what that offer contained and were entitled to have it considered and not pre-empted by any invitation to treat such as that which had been received. In my view, the defendant firm had acted properly and should be entitled to their costs of the first action. They had relinquished the tender when their instructions were withdrawn. 11.Mr Leong attempted to rely on clause 4(a) of the Agreement and he argued that the Representatives were entitled to give instructions to the defendant firm. That is as may be. Nevertheless, the defendant firm was acting on behalf of all the signatories to the Agreement and was bound to protect their interests and to adhere, on their behalf, to the terms of the Agreement. The Representatives were not entitled to act outside the terms of the Agreement. 12.As regards the second action, the matter is even more clear. The Representatives were not entitled to the title deeds. If and when the second tender had proved to be abortive, clause 15 of the Agreement made clear that the title deeds had to be returned to the various owners or their mortgagees. On the face of the Agreement, the Representatives, in this respect the plaintiffs, were not entitled to them. The order by the judge below was clearly correct. 13.I would therefore allow the appeal in respect of the first order and order that the costs of the action including an order nisi that those in this court should be to the defendant firm. I would dismiss the appeal in respect of the second order with an order nisi of costs in favour of the defendant. Hon Le Pichon JA: 14.I agree with the judgment of Rogers VP. Hon Cheung JA: 15.I agree.
Mr Alan Leong SC and Mr Alfred C P Cheng, instructed by Messrs Anthony Siu & Co., for the 1st to 6th Plaintiffs/Appellants in CACV 157/2010 Mr Benjamin Chain, instructed by Messrs Kitty So & Tong, for the Defendant/Appellant in CACV 187/2010 |
Further hearings and rulings under CACV 187/2010