SHUM KONG AND ANOTHER v. CHUI TING LIN TERESA AND ANOTHER

SHUM KONG AND ANOTHER v. CHUI TING LIN TERESA AND ANOTHER

Viewing the enclosed property without disclosure that the garden and garage were subject to a separate short term tenancy amounted to misrepresentation by conduct by the vendors (and reinforced by agent’s statements); the purchasers relied on that representation and were induced to sign; the exclusion clause did not satisfy the statutory reasonableness test and was ineffective; the estate agent breached contractual and tortious duties by failing to make reasonable inquiries (including into the rectification agreement shown on the land search); remedy: rescission and repayment of deposit with interest and indemnity for stamp duty; vendors' claim dismissed.

Citation
SHUM KONG AND ANOTHER v. CHUI TING LIN TERESA AND ANOTHER
Parties
Plaintiff (original Action); 1st Defendant (counterclaim): Shum Kong; Plaintiff (original Action); 1st Defendant (counterclaim): Liu Wai King; Defendant (original Action); Plaintiff (counterclaim): Chui Ting Lin Teresa; Defendant (original Action); Plaintiff (counterclaim): Chui Fong Ching Rodney; 2nd Defendant (counterclaim): Centaline Property Agency Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 June 2001
Case Number
HCA16227/1999
Procedural Posture
Civil Sale of Land / Contract / Misrepresentation / Agency / Judgment (court of First Instance)
Outcome
Judgment for plaintiffs by counterclaim (the purchasers). Provisional agreement lawfully rescinded; vendors' original claim dismissed.
Legal Topics
Misrepresentation, Rescission, Deposit Forfeiture, Duty of Estate Agent, Exemption Clause Reasonableness, Mitigation of Loss, Indemnity, Notice and Registration
Source Language
EN
Contract Property Tort Agency Law Equity Misrepresentation Rescission Deposit Forfeiture +5 more

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Parties

Shum Kong

Plaintiff (original Action); 1st Defendant (counterclaim)

Liu Wai King

Plaintiff (original Action); 1st Defendant (counterclaim)

Chui Ting Lin Teresa

Defendant (original Action); Plaintiff (counterclaim)

Chui Fong Ching Rodney

Defendant (original Action); Plaintiff (counterclaim)

Centaline Property Agency Limited

2nd Defendant (counterclaim)

Procedural Posture

Civil Sale of Land / Contract / Misrepresentation / Agency / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the purchasers were induced by misrepresentation (including misrepresentation by conduct) to enter the provisional agreement
  2. 2 Whether the purchasers were entitled to rescind and recover the deposit
  3. 3 Whether the estate agent was liable in contract and/or tort for negligent misrepresentation and failure to make reasonable inquiries

Ratio Decidendi

Viewing the enclosed property without disclosure that the garden and garage were subject to a separate short term tenancy amounted to misrepresentation by conduct by the vendors (and reinforced by agent’s statements); the purchasers relied on that representation and were induced to sign; the exclusion clause did not satisfy the statutory reasonableness test and was ineffective; the estate agent breached contractual and tortious duties by failing to make reasonable inquiries (including into the rectification agreement shown on the land search); remedy: rescission and repayment of deposit with interest and indemnity for stamp duty; vendors' claim dismissed.

Court Disposition

Judgment for plaintiffs by counterclaim (the purchasers). Provisional agreement lawfully rescinded; vendors' original claim dismissed.

Orders

  • Declaration that the provisional sale and purchase agreement was lawfully rescinded by the purchasers
  • Payment by the defendants by counterclaim (vendors and agency) to the plaintiffs by counterclaim of HKD 350000 with interest from 6 September 1999 to date at the judgment rate