TIN SHUI WAI DEVELOPMENT LTD v. TANG KWAI SHING AND ANOTHER

bjbj 0+3 DCCJ 644/2004 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 644 OF 2004 ____________ BETWEEN TIN SHUI WAI DEVELOPMENT LIMITED Plaintiff and TANG KWAI SHING 1st Defendant CHOW SUI CHEE 2nd Defendant ____________ Coram: H.H. Judge Chow Hearing date : 12th February 2008 Date of handing down Decision : 1st April 2008 DECISION This is an application by the Plaintiff to strike out the Defence and Counterclaim of the Defendants, pursuant to Order 18, r. 19 of the Rules of the District Court, and to enter final and interlocutory judgment against the Defendants. The Plaintiff is the owner of the development known as Blocks 1 to 8 Maywood Court of Kingswood Villas, situate at Tin Shui Wai Town Lot No. 6, New Territories ( the Development ). Under an agreement for sale and purchase ( the Agreement ) made on 3rd April 1997 between the Plaintiff and the Defendant, the Plaintiff as the vendor agreed to sell and the Defendant as the purchaser agreed to buy the property known as Flat F on 32nd floor of Block 3 of the Development ( the Property ) at the price of $2,995,000.00. Under Clause 3(1) and Schedule 4 of the Agreement, the purchase price is payable by the Defendant as follows:- the amount of $2,995,000.00 (10%) has been paid as deposit on signing the agreement preliminary to the Agreement; a further amount of $2,995,000.00 should be paid within 14 days of the date of the Agreement; a further amount of $2,995,000.00 should be paid on or before 1st November 1997; and a sum of $2,096,500.00, being balance of the Purchase Price, shall be paid within 14 days of the date of notification to the Defendants that the Plaintiff is in a position validly to assign the Property to the Defendant. The Defendants paid a total of $898,500.00 to the Plaintiff as deposit and part payments. By virtue of Clause 5(2) of the Agreement, the sale and purchase of the Property shall be completed within 14 days of the date of notification by the Plaintiff to the Defendants that the Plaintiff is in a position validly to assign the Property to the Defendants. On 17th June 1998, a Consent to Assign in respect of the Property was issued by The Lands Department. Pursuant to Clause 5(2) of the Agreement, the Plaintiff notified the Defendants by a letter dated 30th June 1998 from Messrs. Woo, Kwan, Lee & Lo, the solicitors then acting for the Plaintiff, that it was in a position to validly assign the Property to the Defendants. The Defendants were required to pay the balance of the purchase price and other monies payable under the Agreement and to complete the purchase of the Property within 14 days of the date of the said letter. The Defendant failed to complete the purchase within 14 days of the date of the said letter. By a letter dated 25th July 1998 from its solicitors Messrs. Woo, Kwan, Lee & Lo, the Plaintiff issued a notice to the Defendants, calling upon them to make the necessary payment and to complete the purchase within 21 days. The Defendants failed to make good the default and to complete the purchase within the period as required. Accordingly the Plaintiff exercised its right to determine the Agreement under Clause 16(1) of the Agreement and issued a notice of determination to the Defendant by a letter dated 12th September 1998 from Messrs. Hobson & Ma whereby the Agreement was determined and the Plaintiff claimed its rights under Clauses 16(2) and 16(3) of the Agreement. The Defendants pleaded the following defence to resist the Plaintiff s claim:- the Plaintiff was in breach of an implied term of the Agreement; they bailed to rescind the Agreement because of misrepresentation made by the Plaintiff, and there was delay in completing the Development; they were under no obligation to complete. The breach of an Implied Term The Defendants plead that it is an implied term of the Agreement ( the Implied Term ), in order to enable him to exercise the rights of rescission given to thim by Clause 4 of the Agreement meaningfully pursuant to the purpose of the Consent Scheme, that the Plaintiff was obliged to answer his questions or requisitions concerning whether the Development had in fact been completed in accordance with Clause 4 (1) (c) on or before 31st December 1997. Clause 4 (1) (c) of the Agreement provides that the Plaintiff shall complete the Development in all respects in compliance with the conditions of the government grant and the building plans on or before the 31st day of December 1997 subject to such extensions of time as may be granted by the Authorized Person in accordance with sub-clause (5) (a). Under paragraph 3 (20) of the Defence the Defendants plead that: (a) The Plaintiff failed to complete the Development in accordance with clause 4(1)(c) on or before 31st December 1997. Particulars In about January 1999, the Defendants were provided with a copy of a Bond given by the Bank of East Asia, Limited dated 4th June 1998 ( the Bond ) and an Undertaking given by the Plaintiff to the Government on the same day ( the Undertaking ), which documents suggested that works in connection with the Development had not been completed even on 4th June 1998, which was more than five months after 31st December 1997. Such information or evidence shows that the Plaintiff failed to have completed the Development in accordance with clause 4(1)(c) on or before 31st December 1997. (b) Further or in the alternative, the Plaintiff could only deliver possession of the Property to the Defendants in mid July 1998. Particulars By a letter dated 3rd July 1998, the Plaintiff purported to notify the Defendants the Plaintiff was in a position to validly assign the Property to the Defendants and require the Defendants to pay the balance of the purchase price and other monies and to complete the purchase of the Property within 14 days thereafter. Failure to answer requisition Under paragraph 3 (21) of the Defence, the Defendants aver that:- (21) By a letter from the Defendants former solicitors, Messrs. Wong & Partners to the Third Party in its capacity as the Plaintiff s Solicitors dated 20th July 1998, the Defendants raised the following requisition relating to the Plaintiff s compliance with clause 4(1)(c) ( the Requisition ) in these terms: We note that the Occupation Permit in respect of the Development was issued on 22nd December 1997 but the Consent to Assign was not issued until 17th June 1998. Had Clause 4(1)(c) been fully complied with by your client, the application for the said Consent to Assign should have been made on or before 14th January 1998. That means it has taken more than almost half a year for the Government to approve your client s application. The extraordinary length of approving time raise reasonable doubt that whether your client had complied with clauses 4(1)(c) and 4(6). Therefore, please provide us documentary evidence that the application for Consent to Assign was made before 14th January 1998 and the Consent to Assign had not been withhold/refused since such date on the ground that the Development had not been completed in all respects in compliance with the conditions of the Government Grant and the building plans before 31st December 1997. By a letter dated 29th July 1998, the Plaintiff relied on clause 4(7) of the Agreement and contended that the Defendants were not entitled to any documentary evidence as requested. By a letter dated 7th August 1998, the Defendants former solicitors indicated that they did not accept that the Plaintiff had satisfactorily answered the Requisition. The Defendants plead that in breach of the Implied Term, the Plaintiff failed to answer the Defendants questions or requisitions concerning whether the Development had been completed in accordance with clause 4(1)(c) by 31st December 1997 sufficiently or at all. The Defendants aver that the Implied Term purports to empower him to exercise the rights of rescission given to him by clause 4 of the Agreement. However, in my judgment there is nothing pleaded in the defence to show how the Implied Term came to be constituted. It is a bare assertion. Further, even if there is such an Implied Term, the Defendants have failed to show what made the Plaintiff come under a duty to enable them to exercise the rights of rescission given to them by clause 4 of the Agreement by answering his requisitions concerning the completion of the Development. Therefore the Defendant s defence in these aspects cannot stand. Misrepresentation The Defendants plead that, in or about early January 1998, the Defendants enquired the Plaintiff s staff about when the property would be delivered to the Defendants for their use; the staff represented to the Defendants to the effect that the possession of the property would be delivered to them on schedule and asked them to wait for further notice. Acting on the faith and truth of the said representation, the Defendants did not exercise their rights under clause 4(4)(a) of the Agreement to rescind the Agreement. They have since discovered and the fact is that the Plaintiff failed to complete the Development in accordance with clause 4 (1)(c) on or before 31st December, 1997. The Defendants have not shown what the misrepresentation is. The Plaintiff did not deliver possession of the Property to them before 31st December, 1997. That cannot be a misrepresentation. That is a fact within their knowledge. The Defendants have failed to identify the misrepresentation. So this defence cannot stand. Delay in completing the Development The Defendants have not pleaded any provision in the Agreement relating to the effect of failing to complete the Development on or before 31 December 1997. I cannot see how the delay can constitute a ground for refusing to complete the purchase. The Defendants plead that the substantial delay is not contemplated and that during the period of delay, the property market had suffered a severe overturn; it was unfair and inequitable for the Plaintiff to insist upon the Defendants to complete the purchase of the Property or to pay the balance of the price. This is not a ground not to complete the purchase of the Property. This is not a term of the Agreement. The Plaintiff is entitled to exercise its rights given by the Agreement. In my judgment, the Defendants were under a contractual obligation to complete the purchase of the property, but they failed to discharge that duty. The Defendants have not demonstrated that they have a reasonable defence. The grounds for the Counterclaim is just a repetition of the defence. I therefore order that the defence and counterclaim be struck out, and I enter judgment for the Plaintiff for damages to be assessed. Costs I make an order nisi, to be made absolute in 14 days time, that the Defendants do pay costs of the action to the Plaintiff, to be taxed, if not agreed. (S. Chow) District Judge The Plaintiff : represented by Mr. T. Lee of M/S. Hobson & Ma, Solicitors. The Defendant: absent, unrepresented. - PAGE A B C D E F G H I 1udk 1udk (#p# >*6D :i#z *\mT zo/< xC&1 ({m8 =J+> P0} bM-]" W~7gb W~7g xC&1 ({m8 =J+> bM-] n*\U & 6" Normal.dot setup Microsoft Word 9.0 X=? Title Microsoft Word Document MSWordDoc Word.Document.8