EXPERT WINNER LTD. v. REGAL TACT LTD.

HCA3318/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3318 OF 1998

________________________

________________________

________________________________________

JUDGMENT ON ASSESSMENT OF DAMAGES

________________________________________

Background

1. By an agreement made between the Plaintiff and the Defendant dated 27th October 1997, the Plaintiff agreed to sell and the Defendant agreed to purchase Flat B, 6th floor of Cameron House, No. 40 Magazine Gap Road Hong Kong together with Car Parking Spaces Nos. 21 and 22 at the Ground level ("the property") at the price of HK$46,500,000. A deposit in the sum of $4,650,000 was paid by the Defendant to the Plaintiff.

Clause 6 of the said agreement stipulated that the purchase shall be completed on or before 27th February 1998 ("the completion date"). On 26th February 1998, solicitors acting for the Defendant in the said sale and purchase informed the Plaintiff's solicitors that they had no further instructions to act for the Defendant. The Plaintiff's solicitors wrote to the Defendant by a letter dated 26th February, reminding the Defendant of the completion date. No response was received from the Defendant.

The Defendant having failed to complete the purchase on 27th February, the Plaintiff took out a Writ of Summons dated 4th March 1998, seeking various relief against the Defendant; such relief include, inter alia, damages to be assessed. . The Defendant failed to file any defence to the action and judgment was entered for the Plaintiff against the Defendant by an order made by Master Cannon on 22nd May 1998 with damages to be assessed.

Assessment

2. Ms. Chan on behalf of the Plaintiff relied on the valuation report prepared by Chung Sen Surveyors Limited. She confined the damages to the "loss of bargain" and interest thereon and confirmed that there were no other consequential damages.

3. The normal measure of damages is the contract price less the market price at the contractual time fixed for completion (see Mcgregor on Damages, 14th ed. Para. 745). The immediate and direct loss suffered by the Plaintiff as a result of the Defendant's breach is the difference between the contract price under the agreement and the market value of the property at the contractual date of completion. The contract price was HK$46,500,000. The market value of the property as at 27th February 1998, according to the evaluation of Chung Sen Surveyors Limited, was HK$28,000,000.

4. In the absence of any evidence to the contrary, I accept the said valuation and find that the market value of the property at the contractual date of completion was indeed HK$28,000,000. The difference between the contract price and the said market value is HK$18,500,000 ($46,500,000 - $28,000,000). Since the Plaintiff has already forfeited the deposit of $4,650,000, the loss of bargain suffered by the Plaintiff is therefore HK$13,850,000 ($18,500,000 - $4,650,000).

The Plaintiff is entitled to claim damages from the Defendant assessed at HK$13,850,000, together with interest thereon at judgment rate from the date of Writ to date of full payment. The costs of the assessment be to the Plaintiff, to be taxed if not agreed.