LI CHING CHOI v. TACT STRONG INDUSTRNAL LIMITED

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JUDGMENT

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1. This is an appeal from a judgment of toaster Jennings dated the 20th May 1988 whereby the defendant in the action and the Respondent here ("the defendant") was granted specific performance of an agreement dated the 21st day of February 1907 made between it and the plaintiff in the action, the appellant here ("the plaintiff"), for the sale and purchase of Unit on the 17th Floor of Block 35 of Heng Fa Chuen, a block of residential flats being developed by the Mass Transit Railway Corporation.

2. It is not in dispute that by an agreement dated the 12th November 1986 the plaintiff agreed to purchase the said property from the Mass Transit Railway Corporation for $458,640. In order to do so she obtained a loan for $410,000 from the Chase Manhattan Bank which was secured by an equitable mortgage as the property was still being constructed.

3. On the 21st February 1987 the plaintiff re-sold the said property to the defendant for $495,000, Messrs. Anthony Y.L. Au & Co. ("the solicitors”) acting for both vendor and purchaser. As is so often the case that has given rise to the present difficulties.

4. Pursuant to the Sub-Sale Agreement the Defendant paid a deposit of $49,500 to the solicitors which was to be held by them until they were satisfied as to the plaintiffs title. After that they clearly held it on her account. This deposit was paid on the same day as the Agreement, the 21st February 1987. Inquiries were then made from the solicitors acting for the Chase Manhattan Bank and the amount required to release the equitable mortgage was ascertained. On or about 28th February 1987 the solicitors were satisfied as to the plaintiff's title and the plaintiff was asked to come and collect the deposit, for which a cheque had already been made out and left on the file.

5. Completion of the Agreement was to take place, pursuant to Clause 3 thereof, on the 23rd March 1987 and there had been several affidavits filed as to events which took place immediately before and on that particular day. Mr. Wong Ho Ki, a clerk employed by the solicitors, who were originally the defendants in the action, deposed that the plaintiff was advised on the 28th February 1987 that the deposit was then held to her account. The plaintiff however said that she would collect that amount when she cane for the net balance of the purchase price. On the morning of the 23rd March, the day for completion, however he was informed by a Miss Tam, his secretary, that she had spoken to the plaintiff who said that she would not come that day but would come the following day the 24th. Accordingly he spoke to a director of the defendant company, a Mr. Kwan, and Mr. Kwan agreed that he would also come the following day bringing the necessary money to complete the transaction. However at about 5.30 p.m. on the 23rd March, just as Mr. Wong was leaving the office, the plaintiff arrived together with a Mr. Chow. She then demanded to be paid the deposit and the net balance of the purchase price. Mr. Wong said that he was surprised and reminded the plaintiff of her telephone conversation with Miss Tam. He said it was unreasonable for her to come after office hours but the plaintiff was persistent and he then rang Mr. Kwan. Mr. Kwan said he could not come immediately but he authorised him to use any moneys held by the solicitors on behalf of the defendants so as to settle the mater. In fact the defendant had more than enough money with the solicitors to cover the net balance of the purchase price and would be responsible for repaying the Chase Manhattan Bank the amount of the plaintiff's mortgage.

6. In his affidavit Mr. Wong explains that because the flat had not been completed and the Mass Transit Railway Corporation could not convey the property it was necessary that when the matter was settled between the plaintiff and the defendant the plaintiff should execute an irrevocable Power of attorney in favour of the purchaser or its nominee. She would be receiving her purchase price in full but would still be required to execute the final conveyance from the Mass Transit Railway Corporation. Eventually it was worked out, not without some difficulty, that the plaintiff was to receive the deposit of $49,500 together with a net balance, which included interest payable on the mortgage to the Chase Manhattan Bank up to the 25th March 1987, of $36,777.40. Mr. Wong said that a cheque was accordingly made out for that amount. A voucher was also prepared. Both the voucher and the cheque were initially made out for the amount of the deposit but that was corrected and eventually the two cheques, one for the balance and one for the deposit were tendered to the plaintiff as she was leaving the office having said she was not prepared to wait any longer. Mr. Leung said that she had during the period been grumbling about selling the property at too low a price and had been telling him that she had received several better offers. The position was then that on the 23rd March that the plaintiff left the solicitors office without receiving payment. She had however written out and handed over a form of instructions to the solicitors that they were to use "legal formalities to forward a letter of forfeiture to Tact Strong Industrial Limited due to absence of payment upon due date (March 23rd 1937) after office hours". The plaintiff relies on this as being an indication that clearly on that date, not having received payment, she was exercising her right to rescind the contract which was one containing a clause making time the essence of the contract and to forfeit the deposit.

7. Further affidavits have been sworn. One is by Mr. Leung Kam Sum who was an assistant solicitor with the solicitors. He said that he was present when the plaintiff wrote out the letter of instruction and said that he was surprised because at that stage efforts were being made to pay her the amount due to her under the contract. He said that he gathered her attitude her changed because she had had a telephone conversation with her husband and had then become very aggressive. Accordingly he signed the letter of authorisation indicating he said that he simply accepted the instructions. He said however that he had had the two cheques in his hand and followed the plaintiff to the lift hall asking her to accept them. She refused to do so without giving any reason and then left. He also refers to her repeated complaint that she had sold the property at too low a price and that in April her husband came to his office and said that he and his wife were now prepared to complete the sale to the defendant but at a price of $550,000.

8. There have been exhibited to the affidavits, and in particular that of Mr. Wong Ho Ki, various documents together with ensuing correspondence between the parties and them solicitors. These documents include the cheque for the deposit which was dated the 23rd February 1987 and the cheque for the balance of $36,777.48 dated the 23rd March 1987 originally written out for $49,500 by mistake but corrected. This it seems to me is strong evidence indeed that the amount due to the plaintiff, being the deposit plus the balance of the purchase price, was in fact tendered to her in a form of two cheques on the 23rd March 1987 the day for completion. The only other possibility is that these are deliberately false documents which have been subsequently prepared for the purposes of this litigation. Not surprisingly no such allegation has been made.

9. The plaintiff has also sworn an affidavit. She does not specifically deny the defendant's version of the events which took place in the solicitors' office on the 23rd March 1987. She said that she relies on the various letters which have been exchanged between the parties and their solicitors to support her contention that the defendant was in breach of the agreement. These letters did not descend to particulars as to the events of the 23rd March but simply say that defence were in default and refer to the note of instruction which was acknowledged by Mr. Leung. However, the plaintiff having again changed solicitors, there is a letter from her then solicitors, Messrs. John Ku, Tam & Ho, dated the 15th May 1987 which said that as there were different allegations as to the events of the 23rd March they considered the crucial point was whether or not the defendants had paid to the solicitors the full balance of the purchase price i.e. $445,500. It transpires that in fact this amount had not been paid by the defendants on that day although clearly they had sufficient funds in hand to pay the plaintiff the balance owing to her on the basis that they would then settle the amount owing to the Chase Manhattan Bank. It also transpires, and has been argued before me, that in fact even when payment was made by the defendants to the solicitors it was only for $445,000 i.e. $500 short. It seems to me clearly the case now for the plaintiff is that whether or not the deposit and the balance due to her, allowing for repayment of the mortgage, was tendered to her on the 23rd March did not matter but if the solicitors had not received the full amount of the purchase price from the defendants on that day they were in default of the terms of the agreement and the contract was at an end.

10. I do not consider that under the circumstances and facts of hit case that is connect. Here there was one firm of solicitors acting for both vendor and purchaser. They had made inquiries as to the amount required to settle the vendor's mortgage and quite clearly were authorised by her to do so. On completion they would settle front funds to be provided by the purchaser and that money would never at any time be held by them on account of the vendor. I am satisfied that the plaintiff was entitled as at 23rd March to receive the deposit and also to receive the balance of the purchase price her solicitors having calculated the amount required to settle the mortgage. Clearly funds were to be provided by the defendant to enable the solicitors to repay the mortgage. Even if it is not clear on whose behalf that would be done I do not consider that even if the solicitors did not have sufficient funds on the 23rd March from the defendants to enable them to do so that affects the plaintiff's rights. While under the strict terms of the agreement she was entitled to be paid the balance of the purchase price on the 23rd March this was subject to her also being able to provide a clear title by repaying the mortgage. This is set out in Clause 18 of the Agreement for Sale and Purchase. This was to be done by her solicitors with moneys provided by the defendants. I am satisfied that she was tendered what she was entitled to and purely by reason of the act that she wished to evade the terms of the agreement she refused to accept those funds. Any direct denial that the deposit and balance due was tendered to her on the 23rd March or that on the previous day she had waived her rights to receive the funds on that day are conspicuous by their absence from her affidavit. There is also no denial of the assertion by Mr. Wong that the amount due to her was calculated in her presence on the 23rd and she agreed to accept that amount on the basis that the solicitors would arrange with the defendants to pay the amount due to the Chase Manhattan Bank the following day thus giving the defendant a proper title as she was bound to do.

11. There is a further ground of appeal which is that there is no provision under Order 86 for summary judgment on a counterclaim. This point was taken somewhat reluctantly before the Master and here.

12. It is clear that order 14 is not applicable to a claim for specific performance of an agreement for the sale and purchase of land. Order 86 is the only one upon which the defendants could rely. Mr. Ramanathan, for the plaintiff, relies on a statement in Halsbury's Laws of England, Volume 37 paragraph 420 relating to summary judgment under Order 86. It simply says in footnote (8) that the order is "not available on a counterclaim". No authority is given for that statement. It seems to me that read in conjuncture with order 15 there is no reason why a defendant should not seek summary judgment under order 86, and I have not been referred to any authority to the contrary apart from the note in Halsbury. I do not consider that I am bound by that in any way and I am satisfied that the master had power to grant specific performance of the defendants' counterclaim pursuant to order 86.

13. It has been strenuously argued for the plaintiff that if there are any matters of dispute as to fact which required to be decided the claim should go to trial. I have been referred to the authorities conveniently set out at p.141-143 of the Annual Practice. If the plaintiff might be able to set up a bona fide defence she would be entitled to do so and not be shut out at this stage. Having considered the evidence in the affidavits filed I am satisfied such is not the case.

14. This appeal is dismissed and the order of the Master is confirmed.