LOK KIT SHUM AND OTHERS v. IP YUI SUN AND ANOTHER

LOK KIT SHUM AND OTHERS v. IP YUI SUN AND ANOTHER

On the evidence the court found on the balance of probabilities that by 26 April a legally binding and sufficiently certain contract existed: the signed memorandum, payment of a substantial deposit and subsequent partial performance (handover, dismissal/severance payments and defendants' commencement of business) established intent to be bound and created contractual obligations; uncertainty as to subsidiary matters did not defeat formation; both defendants were jointly and severally liable for breach and the appropriate damages were awarded to restore the plaintiffs to their pre-contract position less the deposit.

Citation
LOK KIT SHUM AND OTHERS v. IP YUI SUN AND ANOTHER
Parties
1st Plaintiff: Lok Kit Shum; 2nd Plaintiff: Lo Lai Wah; 3rd Plaintiff: Cheung Tin Lok; 1st Defendant: Ip Yui Sun; 2nd Defendant: Leung Chor
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
30 November 2001
Case Number
DCCJ9259/2001
Procedural Posture
Breach of Contract — Sale/transfer of Business / Judgment (district Court)
Outcome
Judgment for Plaintiffs against Defendants, jointly and severally
Legal Topics
Formation of Contract, Intention to Create Legal Relations, Partial Performance, Sale of Business, Deposit Forfeiture/refund, Specific Performance (abandoned), Damages Assessment, Joint and Several Liability, Costs and Interest
Source Language
EN
Contract Commercial Law Property Civil Procedure Evidence Formation of Contract Intention to Create Legal Relations Partial Performance +6 more

Case Brief

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Parties

Lok Kit Shum

1st Plaintiff

Lo Lai Wah

2nd Plaintiff

Cheung Tin Lok

3rd Plaintiff

Ip Yui Sun

1st Defendant

Leung Chor

2nd Defendant

Procedural Posture

Breach of Contract — Sale/transfer of Business / Judgment (district Court)

Legal Issues

  1. 1 Whether a legally binding contract was concluded prior to execution of formal documents
  2. 2 Whether the memorandum/provisional agreement and payment of deposit created binding obligations
  3. 3 Whether the defendants or either defendant treated the cashier order as a loan rather than a deposit for purchase

Ratio Decidendi

On the evidence the court found on the balance of probabilities that by 26 April a legally binding and sufficiently certain contract existed: the signed memorandum, payment of a substantial deposit and subsequent partial performance (handover, dismissal/severance payments and defendants' commencement of business) established intent to be bound and created contractual obligations; uncertainty as to subsidiary matters did not defeat formation; both defendants were jointly and severally liable for breach and the appropriate damages were awarded to restore the plaintiffs to their pre-contract position less the deposit.

Court Disposition

Judgment for Plaintiffs against Defendants, jointly and severally

Orders

  • Judgment for damages in the net sum of HKD 93,630.41 and payment of HKD 35,000 (unpaid purchase price of accessories), totalling HKD 128,630.41
  • Interest on the total judgment sum at 5% per annum from date of Writ to date of judgment and thereafter at judgment rate until full payment