HONDON DEVELOPMENT LTD AND ANOTHER v. POWERISE INVESTMENTS LTD AND OTHERS

HONDON DEVELOPMENT LTD AND ANOTHER v. POWERISE INVESTMENTS LTD AND OTHERS

Court found on credibility and documentary evidence that the vendor (through agent Lau/Centaline) made material false representations as to the shop's size and partitioning which induced plaintiffs; exemption clauses were not reasonable in the factual context and did not bar liability; rescission of the Provisional Agreement, Formal Agreement and Assignment was available and granted; the 2nd Defendant solicitors breached their retainer by failing to identify obvious plan discrepancies and seek instructions and are liable in damages reduced for 50% contributory negligence; third party contribution claim dismissed as agents acted within authority.

Citation
HONDON DEVELOPMENT LTD AND ANOTHER v. POWERISE INVESTMENTS LTD AND OTHERS
Parties
1st Plaintiff: Hondon Development Limited; 2nd Plaintiff: Vincent Step Limited; 1st Defendant: Powerise Investments Limited; 2nd Defendant: Chan Ping Yau and Chan Hing Kai (P Y Chan & Co / Chan & Partners); 1st Third Party: Centaline Property Agency Limited; 2nd Third Party: Lau Ka Chung (Vincey)
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
1 September 2003
Case Number
HCA1208/1998
Procedural Posture
Civil Sale of Property, Misrepresentation and Professional Negligence / Judgment (court of First Instance, Deputy High Court Judge)
Outcome
Judgment for Plaintiffs. Provisional Agreement, Formal Agreement and Assignment rescinded as against 1st Defendant; Plaintiffs awarded sums and interest; judgment against 2nd Defendant for negligent breach of retainer reduced for contributory negligence; Third Party Notice dismissed.
Legal Topics
Misrepresentation, Rescission, Exemption Clauses, Doctrine of Merger, Contributory Negligence, Agency Authority, Solicitor's Duty of Care, Damages, Specific Performance and Restitution
Source Language
EN
Contract Law Property Law Tort Professional Negligence Agency Law Conveyancing Law Misrepresentation Rescission +7 more

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Parties

Hondon Development Limited

1st Plaintiff

Vincent Step Limited

2nd Plaintiff

Powerise Investments Limited

1st Defendant

Chan Ping Yau and Chan Hing Kai (P Y Chan & Co / Chan & Partners)

2nd Defendant

Centaline Property Agency Limited

1st Third Party

Lau Ka Chung (Vincey)

2nd Third Party

Procedural Posture

Civil Sale of Property, Misrepresentation and Professional Negligence / Judgment (court of First Instance, Deputy High Court Judge)

Legal Issues

  1. 1 What representations were made and to whom
  2. 2 Whether Centaline/Lau were agents of the 1st Defendant
  3. 3 Whether Plaintiffs relied on misrepresentations

Ratio Decidendi

Court found on credibility and documentary evidence that the vendor (through agent Lau/Centaline) made material false representations as to the shop's size and partitioning which induced plaintiffs; exemption clauses were not reasonable in the factual context and did not bar liability; rescission of the Provisional Agreement, Formal Agreement and Assignment was available and granted; the 2nd Defendant solicitors breached their retainer by failing to identify obvious plan discrepancies and seek instructions and are liable in damages reduced for 50% contributory negligence; third party contribution claim dismissed as agents acted within authority.

Court Disposition

Judgment for Plaintiffs. Provisional Agreement, Formal Agreement and Assignment rescinded as against 1st Defendant; Plaintiffs awarded sums and interest; judgment against 2nd Defendant for negligent breach of retainer reduced for contributory negligence; Third Party Notice dismissed.

Orders

  • Rescind Provisional Agreement, Formal Agreement and Assignment
  • 1st Defendant to pay Plaintiffs purchase price HKD 14500000 and additional sums totaling HKD 525645 (agency commission HKD 100000, legal costs/disbursements HKD 26875, stamp duty HKD 398770) together totalling HKD 15025645 with interest at judgment rate from writ issue until payment