SO MAN KUEN AND ANOTHER v. WONG MAN HON FREDERICK AND ANOTHER

SO MAN KUEN AND ANOTHER v. WONG MAN HON FREDERICK AND ANOTHER

The court held that the Plaintiffs validly rescinded the PSPA under clause 4 for breach of the Defendants' representation about legal proceedings; clause 16(b) was not the operative provision for that situation and, in any event, would be unenforceable as a penalty; clause 17(b) governs non-completion due to default...

Source-derived case information.

Citation
[2020] HKCFI 2757
Parties
1st Plaintiff: So Man Kuen; 2nd Plaintiff: Cheng Hsiao Shue; 1st Defendant: Wong Man Hon Frederick; 2nd Defendant: Ng Miu Fan
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
6 November 2020
Case Number
HCMP1875/2019
Procedural Posture
Originating Summons (miscellaneous Proceedings No.1875 of 2019) / Judgment (trial of Originating Summons)
Outcome
Judgment for Plaintiffs: declaration of valid rescission; return of Deposit with interest; damages HK$50,000; indemnity for estate agent's commission insofar as payable and paid by Plaintiffs; costs awarded to Plaintiffs on 75% basis; other claims dismissed or no order.
Legal Topics
Rescission, Breach of Warranty/representation, Liquidated Damages Vs Penalty, Indemnity for Third Party Claims, Estate Agent Commission, Costs Allocation, Interest on Deposit
Source Language
en
Contract Law Property Law Civil Procedure Rescission Breach of Warranty/representation Liquidated Damages Vs Penalty Indemnity for Third Party Claims Estate Agent Commission +2 more

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Parties

So Man Kuen

1st Plaintiff

Cheng Hsiao Shue

2nd Plaintiff

Wong Man Hon Frederick

1st Defendant

Ng Miu Fan

2nd Defendant

Procedural Posture

Originating Summons (miscellaneous Proceedings No.1875 of 2019) / Judgment (trial of Originating Summons)

Legal Issues

  1. 1 Whether the Plaintiffs validly rescinded the PSPA for breach of the Defendants' representation concerning legal proceedings against the Company
  2. 2 Whether clause 16(b) (liquidated damages equal to deposits) is engaged and enforceable or is a penalty
  3. 3 Whether Plaintiffs are entitled to indemnity from Defendants for estate agent's commission under clause 17(b)

Ratio Decidendi

The court held that the Plaintiffs validly rescinded the PSPA under clause 4 for breach of the Defendants' representation about legal proceedings; clause 16(b) was not the operative provision for that situation and, in any event, would be unenforceable as a penalty; clause 17(b) governs non-completion due to default and an indemnity in favour of the Plaintiffs for estate agent commission was ordered insofar as the commission becomes payable and has been paid by the Plaintiffs; Plaintiffs awarded return of Deposit with interest, HK$50,000 damages for wasted costs, and costs on 75% basis against Defendants.

Court Disposition

Judgment for Plaintiffs: declaration of valid rescission; return of Deposit with interest; damages HK$50,000; indemnity for estate agent's commission insofar as payable and paid by Plaintiffs; costs awarded to Plaintiffs on 75% basis; other claims dismissed or no order.

Orders

  • Leave granted to Plaintiffs to file and serve 3rd Affirmation of Cheng Hsiao Shue dated 14 October 2020 with costs of the Summons to be paid by the Plaintiffs to the Defendants, to be taxed if not agreed
  • Judgment entered against the Defendants on the first and second paragraphs of the Originating Summons (declaration of valid rescission and return of the Deposit)