DCCJ 5363 / 2006
IN THE DISTRICT COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
CIVIL ACTION NO. 5363 OF 2006
||WONG MAN HONG
||CHAN SAU FAN
||POON KIN CHIU
||TSE WAI MING
Coram: His Honour Judge Thomas Au in Chambers (open to public)
Date of Hearing: 8 May 2008
Date of Delivery of Judgment: 8 May 2008
1. On 26 August 2006, the 1st and 2nd Plaintiffs as vendors signed a provisional sale and purchase agreement with the 1st and 2nd Defendants as purchasers for the purchase of a flat at Tin Shui Wai. The Defendants through the estate agent had provided the Plaintiffs a cheque of $80,000.00 as payment for the initial deposit. The Plaintiffs presented the cheque for payment on 28 August 2006. It was dishonoured.
2. This is the Plaintiffs’ application for summary judgment against Defendants for $80,000.00, on the basis that the Defendants were in breach of the agreement, and according to its term, the Plaintiffs are entitled to recover this sum.
3. The Defendants deny liability on various grounds, of which I would elaborate below.
4. The following background facts are undisputed.
5. In late August 2006, the Defendants through an estate agent named Mr Tse looked at the flat with a view of purchasing it.
6. The provisional agreement for purchasing the flat at $1,600,000.00 was signed by the Plaintiffs on 26 August 2006.
7. It was provided expressly under the provisional agreement that:
(1) The Defendants had to pay an initial deposit of $80,000.00 upon signing it.
(2) The Plaintiffs shall be entitled to forfeit the initial deposit if the Defendants failed to complete the purchase in accordance with the provisional agreement.
8. When the Plaintiffs signed the provisional agreement, Mr Tse gave them the 1st Defendant’s cheque dated 25 August 2006 of $80,000.00, for the purpose of paying the initial deposit under the provisional agreement.
9. The cheque’s drawee name was initially Messrs Ng, Tam, Ko & Chan as the intended solicitors for the Plaintiffs. However, it was later amended to Messrs Raymond Chan, Kenneth Yuen & Co, when the Plaintiffs through Mr Tse confirmed to the Defendants of the name of the Plaintiffs’ solicitors’. The 1st Defendant initialled the amendment on the cheque.
10. On 28 August 2006, the Plaintiffs’ solicitors presented the cheque for payment by depositing the same with the bank.
11. The cheque was bounced, and the Plaintiffs’ solicitors were so advised by the bank on 29 August 2006.
12. On 30 August 2006, the Plaintiffs’ solicitors wrote to the Defendants’ then solicitors stating that the Defendants were in breach of the provisional agreement as the cheque was dishonoured. It also asked the Defendants’ solicitors to confirm within 2 days whether they had instructions to accept service of court documents due to the Defendants’ breach.
13. At the same time, on the evening of 30 August 2006 and on 31 August 2006, the parties were negotiating amongst themselves concerning the matter. They also negotiated on entering into a new provisional sale and purchase agreement with a new purchase price.
14. Following these negotiations, a new provisional agreement was drafted for the purchase of the flat for $1,638,000.00, with a $70,000.00 initial deposit payment requirement. There was also a draft sale and purchase memorandum, which provided, inter alia, that (a) the Defendants would pay the Plaintiff’s portion of the estate agent’s commission, and (b) upon the signing of the new provisional agreement, and payment of the initial deposit, the previous provisional agreement would be cancelled, and the previous cheque would not be presented for payment. Mr Tse drafted all these documents.
15. The parties then met at Mr Tse’s office on the night of 31 August 2006. However, the new provisional agreement and the memorandum were not signed eventually.
16. On 1 September 2006, the Defendants’ present solicitors wrote to the Plaintiff’s solicitors stating that the parties had agreed to cancel the previous provisional agreement on the basis that the Plaintiffs had refused to accept the initial deposit of $80,000.00. It also asked the Plaintiffs to return the cheque within 3 days.
17. Then followed a series of exchange of letters between the parties’ respective solicitors until 6 September 2006. In the correspondence, the Plaintiffs repeatedly denied any agreement to cancel the original agreement and refusal to accept the deposit, and insisted on the Defendants’ breach of the agreement given the dishonour cheque. The Defendants on the other hand insisted on the Plaintiffs’ refusal to deposit the cheque again, and that they would vigorously defend any claim by the Plaintiffs.
18. In the meantime, on 2 September 2006, the Plaintiffs contracted to sell the flat to another purchaser at the price of $1,638,000.00.
19. On 27 October...