LIU JUN v. CHINA WELL PROPERTIES LTD

LIU JUN v. CHINA WELL PROPERTIES LTD

The agreement is not binding on the defendant because the director who signed did not have authority (no board resolution and another director opposed), the Turquand rule could not be relied upon where not pleaded and the mere signature/chop was insufficient; accordingly defendant not liable to plaintiff for HK$500,000 and third party's claim for HK$310,000 fails (clause 12 ambiguous and agent misconduct prevented treating defendant as defaulting).

Citation
LIU JUN v. CHINA WELL PROPERTIES LTD
Parties
Purchaser: Plaintiff; Vendor (company): Defendant; Third Party / Estate Agent: Centaline Property Agency Ltd
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
23 October 2015
Case Number
DCCJ2759/2011
Procedural Posture
Civil Contract / Property / Agency / Trial Judgment
Outcome
Plaintiff's claim dismissed; declaration that the agreement is null and void; third party's claim dismissed; costs ordered nisi against plaintiff and third party in favour of defendant
Legal Topics
Indoor Management Rule (turquand Rule), Apparent Authority, Directors' Authority and Board Resolutions, Estate Agent Duties and Conflict of Interest, Liquidated Damages Clause Interpretation, Validity of Corporate Rubber Chop
Source Language
EN
Contract Law Agency Law Company Law Property Law Civil Procedure Indoor Management Rule (turquand Rule) Apparent Authority Directors' Authority and Board Resolutions +3 more

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Parties

Plaintiff

Purchaser

Defendant

Vendor (company)

Centaline Property Agency Ltd

Third Party / Estate Agent

Procedural Posture

Civil Contract / Property / Agency / Trial Judgment

Legal Issues

  1. 1 Whether the agreement is binding on the defendant
  2. 2 Whether the defendant was in breach of the agreement
  3. 3 Whether the defendant is liable to compensate the plaintiff HK$500,000 pursuant to clause 9

Ratio Decidendi

The agreement is not binding on the defendant because the director who signed did not have authority (no board resolution and another director opposed), the Turquand rule could not be relied upon where not pleaded and the mere signature/chop was insufficient; accordingly defendant not liable to plaintiff for HK$500,000 and third party's claim for HK$310,000 fails (clause 12 ambiguous and agent misconduct prevented treating defendant as defaulting).

Court Disposition

Plaintiff's claim dismissed; declaration that the agreement is null and void; third party's claim dismissed; costs ordered nisi against plaintiff and third party in favour of defendant

Orders

  • Plaintiff's claim against the defendant is dismissed
  • Declaration that the preliminary agreement is null and void