CHEER SKY LTD v. CHAN YUET SHEUNG

CHEER SKY LTD v. CHAN YUET SHEUNG

On construction of the provisional agreement against the factual matrix (parties knew of the unauthorised Structures) the contract was for the Property including the Structures with the purchaser assuming the risk of any defect arising from them; Cheer Sky knew of and effectively accepted that risk (waiver), so the vendor had discharged her obligation to show and give title to the property she contracted to sell; Cheer Sky repudiated by attempting to force a substantial price reduction and is not entitled to specific performance or damages; the provisional agreement was rescinded and related declarations/orders follow.

Citation
[2019] HKCFI 606
Parties
Plaintiff / Purchaser: Cheer Sky; Defendant / Vendor and Counterclaimant: Unnamed Defendant (vendor); Third Party / Purchaser Principal: Luk Yu Wa; Estate Agent Proprietor / Defendant by Counterclaim: Luk Ngan Ngor; Estate Agent (agent for Vendor): Wayson Properties Co
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
7 March 2019
Case Number
HCA939/2014
Procedural Posture
Civil Specific Performance and Counterclaim (property) / Trial Judgment (deputy High Court Judge)
Outcome
Plaintiff's claim for specific performance dismissed; Defendant's counterclaims for declarations partly successful (rescission/declaration) and partly dismissed (conspiracy, equitable compensation claims); costs orders made as specified.
Legal Topics
Specific Performance, Defect in Title, Unauthorised Building Works, Waiver, Estoppel by Convention, Fiduciary Breach, Conspiracy, Knowing Assistance, Agency Duties, Costs Orders
Source Language
EN
Contract Property Equity Agency Law Fiduciary Duties Civil Procedure Specific Performance Defect in Title +8 more

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Parties

Cheer Sky

Plaintiff / Purchaser

Unnamed Defendant (vendor)

Defendant / Vendor and Counterclaimant

Luk Yu Wa

Third Party / Purchaser Principal

Luk Ngan Ngor

Estate Agent Proprietor / Defendant by Counterclaim

Wayson Properties Co

Estate Agent (agent for Vendor)

Procedural Posture

Civil Specific Performance and Counterclaim (property) / Trial Judgment (deputy High Court Judge)

Legal Issues

  1. 1 Whether purchaser (Cheer Sky) proved vendor failed to show and give good title because of unauthorised structures
  2. 2 Proper construction of the provisional agreement as to whether the Structures formed part of the subject matter
  3. 3 Whether purchaser waived objections or was estopped from objecting to the Structures

Ratio Decidendi

On construction of the provisional agreement against the factual matrix (parties knew of the unauthorised Structures) the contract was for the Property including the Structures with the purchaser assuming the risk of any defect arising from them; Cheer Sky knew of and effectively accepted that risk (waiver), so the vendor had discharged her obligation to show and give title to the property she contracted to sell; Cheer Sky repudiated by attempting to force a substantial price reduction and is not entitled to specific performance or damages; the provisional agreement was rescinded and related declarations/orders follow.

Court Disposition

Plaintiff's claim for specific performance dismissed; Defendant's counterclaims for declarations partly successful (rescission/declaration) and partly dismissed (conspiracy, equitable compensation claims); costs orders made as specified.

Orders

  • Cheer Sky's claim for specific performance against the Defendant dismissed
  • The Defendant's counterclaim for damages for conspiracy against Cheer Sky and Luk Ngan Ngor dismissed