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Su Wei v Ng Ying Ying

Judgment Cited authorities 3 Cited in Precedent Map Related
Vincent
Judgment Date25 May 2016
Year2016
Judgement NumberHCA211/2013
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA211/2013 SU WEI v. NG YING YING

HCA 211/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 211 OF 2013

_______________

BETWEEN
SU WEI Plaintiff
and
NG YING YING Defendant

_______________

Before: Hon To J in Court
Date of Hearing: 19, 20 and 22 April 2016
Date of Judgment: 25 May 2016

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J U D G M E N T

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Introduction

1. This is a trial to determine the relief to which the Plaintiff is entitled in respect of the Defendant’s breach of a provisional agreement for sale and purchase of her property (the “Property”). The Defendant unreservedly admits liability for breach of contract. The parties’ dispute is on the appropriate relief and the basis on which damages are to be assessed.

2. The Plaintiff’s primary position is that he is entitled to specific performance and damages represented by the rental expenses he paid from March 2013 to March 2017. His fallback position is that if specific performance is not ordered, he is entitled to damages in lieu assessed as the difference between the purchase price and the value of the property as at the date of trial plus rental expenses between March 2013 and March 2017.

3. The Defendant’s position is that the Plaintiff is not entitled to specific performance because he has failed to show he was ready, willing and able to perform his obligations under the contract and because of the hardship which specific performance would have on the Defendant. The appropriate measure of damages is the difference between the value of the property at the contractual time for completion and the contract price.

The background

4. The Plaintiff is an investment analyst from the mainland who came to take up employment in Hong Kong under a work permit in March 2012. With the help of a property agent, Ms Rosa Ng (“Ng”) of the Siu Sai Wan branch of Centaline Property Agency Limited (“Centaline”), he took up rented accommodation in Island Resort in Siu Sai Wan. He instructed Ng to look for residential property for acquisition in Island Resort.

5. The Defendant is an Australian resident and owner of the Property which was leased out to a tenant. She was desirous to sell the Property but had not formally instructed Centaline as her property agent. At all material times, she was in Australia. However, Ng became aware of her Property having been placed on the market and successfully came into contact with the Defendant to offer their services.

6. On 10 October 2012, through Ng’s arrangement, the Plaintiff viewed the Property. Through the negotiation of Ng’s branch manager Mr Dick Lee (“Lee”) by long distance telephone calls and emails, the Plaintiff and the Defendant entered into the provisional agreement for sale and purchase of the Property for $7,120,000 with completion to take place on 28 December 2012 and initial deposit of $400,000 to be paid upon signing the provisional agreement and a further deposit of $312,000 to be paid on 6 November 2012. Clause 17 of the provisional agreement provided that the parties must proceed to buy and sell the Property (the “ ‘must buy must sell’ provision”). A cheque for the initial deposit of $400,000 made payable to Messrs Gary Mak, Dennis Wong & Chang (“MWC”) was given by the Plaintiff to Centaline as deposit. The cheque was delivered to MWC for stake-holding pending completion.

7. On 19 October 2012, the Defendant wrote an email to Lee stating that she was not feeling well and decided to keep the Property for herself and wished the Plaintiff could find a better property, effectively backing out from the provisional agreement.

8. On 29 October 2012, MWC informed the Plaintiff’s solicitors that they never had instruction to act for the Defendant.

9. On 5 November 2012, the Plaintiff’s solicitors wrote to the Defendant in an attempt to ascertain her new solicitors for the purpose of proceeding with the transaction. The Defendant did not respond.

10. On 23 November 2012, by then the time for receiving the further deposit had lapsed, the Plaintiff’s solicitors wrote to the Defendant again to offer a new schedule for the Defendant to receive payment in a further attempt to proceed with the transaction. They reminded the Defendant that the provisional agreement was to be specifically performed. Again, the Defendant did not respond.

11. On 1 February 2013, the Plaintiff commenced the present action. The defence pleaded is lack of mental capacity to enter into the provisional agreement, misrepresentation by Lee as the Plaintiff’s agent and great hardship if specific performance is ordered against her.

12. The above factual background is not in dispute. While the defence of lack of mental capacity and misrepresentation is now abandoned, the Defendant relies on the same pleaded facts as the background circumstances to support her case of great hardship. In essence, she alleges that Lee pressurised her and misrepresented to her which caused her to enter into the provisional agreement. It would therefore be necessary to critically examine the circumstances under which and the span of time during which the provisional agreement was negotiated and entered into.

The Plaintiff’s case

13. Ng became aware that the Property had been placed on the market and contacted the Defendant, who was then in Sydney, to arrange for an inspection by the Plaintiff. The Defendant agreed and through her son made the Property available for viewing by the Plaintiff. The Plaintiff viewed the Property on the night of 10 October 2012. After viewing for 15 minutes, the Plaintiff indicated he wanted to purchase the Property and offered $7,000,000. At about 9 pm, Ng reported the matter to Lee. Then Lee took over the negotiation.

14. Lee telephoned the Defendant and informed her of the offer. It is not disputed that Lee also sent her a copy of a provisional agreement offering to buy the Property at the price of $7,000,000, though a copy of that agreement was not produced by the parties. As Sydney time is two hours ahead of Hong Kong time, it would be sometime after 11 pm. The Defendant rejected the offer and insisted that the price could not be less than $7,100,000. Then, they discussed, among other things, the time for executing the formal agreement as the Defendant was resident outside Hong Kong. It was Centaline’s usual practice to arrange for execution of the formal agreement within 14 days of execution of the provisional agreement. The Defendant told Lee that she would not be able to come to Hong Kong before early December 2012. Lee suggested to add the ‘must buy must sell’ provision so that the transaction could still proceed to completion on the strength of the provisional agreement if she would not be able to come to Hong Kong to sign the formal agreement. He explained to her that with that provision in the provisional agreement, the parties had to proceed to completion and neither party could retract from the contract with the usual result of forfeiture of deposit on the purchaser’s default or returning the deposit and paying compensation of like amount on the vendor’s default. They also discussed about who would be engaged as the Defendant’s solicitors. Lee suggested MWC which was on the list of Centaline’s approved list of solicitors and with whom the Defendant had previous dealings. Lee informed Ng of his negotiation with the Defendant. That was a late call, but there could be no complaint because no agreement for sale and purchase was entered into that night.

15. On the next day, ie 11 October 2012, the Plaintiff went to the office of Centaline where Ng related the Defendant’s position to him. The Plaintiff agreed to the ‘must buy must sell’ provision and increased his offer to $7,120,000. He signed a provisional agreement, serial number HILP 340, with an offer of $7,120,000 and payment of deposit in the sum of $20,000 forthwith and another sum of $200,000 on 15 October 2012 (the “340 Contract”).

16. At 12:39, Lee sent the Defendant by email a copy of the 340 Contract, a copy of the Plaintiff’s cheque for deposit and the name card of Alan Yip a conveyancing clerk of MWC. He then called the Defendant and told her about the Plaintiff’s offer. That would be around 2:39 pm Sydney time. The Defendant requested for information about recent similar transactions. Her demand for comparables indicated that she was alert.

17. At 15:38, Lee sent the Defendant a record showing the sale price and bank valuation in respect of 34 similar properties transactions. These dates and times are supported by copies of the emails produced in court. That was 5:38 pm Sydney time and was by no means late in the night. No provisional agreement was entered into on 11 October 2012. It cannot be said that any pressure had been exerted on the Defendant to enter into the provisional agreement as no agreement was reached on that night.

18. At 11:45 on the next day, ie 12 October 2012, Lee sent the Defendant another copy of 340 Contract. It is not clear why Lee sent a copy of the 340 Contract again. Lee could not recall. There was some discussion that day between Lee and the Defendant. The Defendant told Lee that she considered the first initial deposit of $20,000 too low and wished to have it increased to $400,000. Lee related that message to Ng who then informed the Plaintiff. The Plaintiff agreed to increase the initial deposit. He gave Lee a cheque in the amount of $400,000 after work and signed a second provisional agreement, serial number HILP 339, offering to purchase the Property with an increased initial deposit of $400,000 (the “339 Contract”). The serial number of that later contract preceded the 340 Contract, nothing significant turned out on that.

19. At 18:55, Lee sent a copy of the 339 Contract together with a copy of the...

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