LEUNG KAI HONG AND ANOTHER v. SHEEHAN DANNY WILLIAM AND ANOTHER

LEUNG KAI HONG AND ANOTHER v. SHEEHAN DANNY WILLIAM AND ANOTHER

The court held that demolition of the canopy removed an item that was a material part of the bargain such that the plaintiffs did not offer substantial performance; the vendor had knowingly concealed a Buildings Department demolition notice and made false representations about the canopy's legality; Clause 14 (entire agreement) could not be given effect to defeat a claim in fraudulent misrepresentation and is not reasonable under the Misrepresentation Ordinance; accordingly defendants were entitled to repudiate and succeed on their counterclaim.

Citation
LEUNG KAI HONG AND ANOTHER v. SHEEHAN DANNY WILLIAM AND ANOTHER
Parties
Plaintiff (vendor): Leung Kai Hong; Plaintiff (vendor): Wong Pui Sze Carmen; Defendant (purchaser): Sheehan Danny William; Defendant (purchaser): Sung Lai Fai
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
12 June 2007
Case Number
HCMP1172/2006
Procedural Posture
Vendor and Purchaser Summons Under Conveyancing and Property Ordinance (s.12); Proprietary and Contractual Dispute / Judgment After Trial
Outcome
Plaintiffs' claim dismissed. Judgment for defendants on the Re-Amended Counterclaim in the terms awarded by the court; costs to defendants; interest awarded on monetary sums from 12 June 2006 at HSBC prime +1% to date of judgment and thereafter at judgment rate; costs orders nisi.
Legal Topics
Specific Performance, Repudiation, Substantial Performance, Liquidated Damages, Fraudulent and Negligent Misrepresentation, Unauthorised Structures, Entire Agreement Clause, Statutory Demolition/registration Notice
Source Language
EN
Property Law Contract Law Equity and Specific Performance Misrepresentation Building and Planning Law Specific Performance Repudiation Substantial Performance +5 more

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Parties

Leung Kai Hong

Plaintiff (vendor)

Wong Pui Sze Carmen

Plaintiff (vendor)

Sheehan Danny William

Defendant (purchaser)

Sung Lai Fai

Defendant (purchaser)

Procedural Posture

Vendor and Purchaser Summons Under Conveyancing and Property Ordinance (s.12); Proprietary and Contractual Dispute / Judgment After Trial

Legal Issues

  1. 1 Whether defendants were entitled to refuse completion because plaintiffs repudiated the Agreement by demolishing the canopy or whether plaintiffs had given substantial performance
  2. 2 Whether the Memorandum constituted a contractual warranty entitling defendants to rescind or refuse completion
  3. 3 Whether Ms Wong made a false representation (fraudulent or negligent) and whether defendants are entitled to damages and other relief

Ratio Decidendi

The court held that demolition of the canopy removed an item that was a material part of the bargain such that the plaintiffs did not offer substantial performance; the vendor had knowingly concealed a Buildings Department demolition notice and made false representations about the canopy's legality; Clause 14 (entire agreement) could not be given effect to defeat a claim in fraudulent misrepresentation and is not reasonable under the Misrepresentation Ordinance; accordingly defendants were entitled to repudiate and succeed on their counterclaim.

Court Disposition

Plaintiffs' claim dismissed. Judgment for defendants on the Re-Amended Counterclaim in the terms awarded by the court; costs to defendants; interest awarded on monetary sums from 12 June 2006 at HSBC prime +1% to date of judgment and thereafter at judgment rate; costs orders nisi.

Orders

  • Plaintiffs' claim dismissed with costs to defendants to be taxed if not agreed
  • Judgment for defendants in terms of paragraphs 1, 2, 3, 4, 5 and 8 of the prayer of the Re-Amended Counterclaim