DOUGLAS LTD. v. RESOURCES MAIN ENTERPRISES LTD

DOUGLAS LTD. v. RESOURCES MAIN ENTERPRISES LTD

The court found the 1st Defendant acted mala fide in raising a requisition that did not go to the root of title and delayed giving necessary split-cheque instructions thereby preventing performance; the sub-purchaser had offered and was ready to perform and was entitled to specific performance of the Head Agreement against the head vendor; accordingly the Head Agreement was ordered specifically performed and the sub-purchaser's claim succeeded.

Citation
DOUGLAS LTD. v. RESOURCES MAIN ENTERPRISES LTD
Parties
Plaintiff (sub Purchaser) in A10949/96: Ji Shan International Investment Ltd.; 1st Defendant (confirmor/purchaser Under Head Agreement; Vendor Under Sub Sale Agreement; Defendant in A13602/96): Resources Main Enterprises Ltd.; 2nd Defendant (head Vendor/owner; Plaintiff in A13602/96): Douglas Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 August 1997
Case Number
HCA13602/1996
Procedural Posture
Civil Contract/equity (specific Performance, Rescission, Forfeiture) / Judgment at Trial (court of First Instance)
Outcome
Claim of Ji Shan International Investment Ltd. in A10949/96 allowed; Head Agreement ordered specifically performed. Claim in A13602/96 dismissed except limited declaration about application of deposit.
Legal Topics
Specific Performance, Rescission, Forfeiture of Deposit, Privity of Estate, Requisition on Title, Tender and Completion, Waiver and Time of the Essence, Mala Fides
Source Language
EN
Contract Equity Property Civil Procedure Specific Performance Rescission Forfeiture of Deposit Privity of Estate +4 more

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Parties

Ji Shan International Investment Ltd.

Plaintiff (sub Purchaser) in A10949/96

Resources Main Enterprises Ltd.

1st Defendant (confirmor/purchaser Under Head Agreement; Vendor Under Sub Sale Agreement; Defendant in A13602/96)

Douglas Limited

2nd Defendant (head Vendor/owner; Plaintiff in A13602/96)

Procedural Posture

Civil Contract/equity (specific Performance, Rescission, Forfeiture) / Judgment at Trial (court of First Instance)

Legal Issues

  1. 1 Whether the 1st Defendant was entitled to rescind the sub-sale agreement and forfeit the sub-purchaser's deposit
  2. 2 Whether the sub-purchaser was entitled to specific performance against the head vendor and/or the confirmor
  3. 3 Whether the sub-purchaser could complete directly with the head vendor (privity of estate/assignment)

Ratio Decidendi

The court found the 1st Defendant acted mala fide in raising a requisition that did not go to the root of title and delayed giving necessary split-cheque instructions thereby preventing performance; the sub-purchaser had offered and was ready to perform and was entitled to specific performance of the Head Agreement against the head vendor; accordingly the Head Agreement was ordered specifically performed and the sub-purchaser's claim succeeded.

Court Disposition

Claim of Ji Shan International Investment Ltd. in A10949/96 allowed; Head Agreement ordered specifically performed. Claim in A13602/96 dismissed except limited declaration about application of deposit.

Orders

  • Head Agreement dated 1.3.1994 to be specifically performed: Douglas Limited to transfer the suit property to Ji Shan International Investment Ltd. within 14 days after payment by Ji Shan of the balance of the purchase price to Douglas Limited
  • 1st Defendant's solicitors to repay $180,000.00 to the Plaintiff (Ji Shan)