YAACOV OZER v. KWAN SIU MAN JOSHUA

1994, No. A1248

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. By Writ of Summons filed 7.2.94 the Plaintiff sought specific performance of an oral agreement made on or about 15.11.91 whereby Defendant as vendor, agreed to sell a property known as 2F, K. Y. Mansion, No. 4A Shui Fai Terrace together with a Car Parking space No. 4 on the ground floor of the property, to the Plaintiff.

2. The agreement was stated to be part of an agreement between Defendant and Plaintiff for settlement of a Lands Tribunal application by which Plaintiff was seeking a new Tenancy, an application opposed by Defendant who sought to resume the flat for his own use.

3. The oral agreement was said by Plaintiff to be evidenced in writing by a letter from Defendant's solicitors setting out the terms of the agreement. Although an Agreement for Sale and Purchase was thereafter executed by Plaintiff on 15.1.92 and a deposit paid the agreement was never signed by Defendant. Eventually on 18.2.92 the Defendant gave written notice to the Plaintiff that he was repudiating the agreement and returned the deposit the Plaintiff had paid.

4. The Plaintiff sought specific performance of the agreement and further, or in the alternative, damages for breach of the agreement in lieu of, or in addition, to specific performance.

5. The Plaintiff claimed the difference between the current market value of the flat and the agreed purchase price of the property together with interest as being appropriate damages.

6. By the time of this trial the valuers employed by Plaintiff and Defendant were able to agree the open market value of the property with vacant possession as being:

7. No agreement was reached in respect of a value for the car park as a separate item.

8. The questions that fall to be considered are in essence simple ones.

(1) Was there an oral agreement between the parties made on 15 or 16 November 1991?

(2) Does the letter of 18.11.91 satisfy the requirements of Section 3(1) of the Conveyancing and Property Ordinance?

(3) Was the Defendant entitled to repudiate any contract that existed as he purported to do by the letter of 18.2.92?

(4) Was Plaintiff as Defendant claims guilty of laches in pursuing his claim?

9. The first matter to be considered is the effect of the agreement of 15 or 16 November 1991 - was it an agreement that was final and so regarded by the parties subject to its being followed by the necessary memorandum in writing.

10. To decide this it was necessary to look at the whole course of dealings between Plaintiff and Defendant before, at, and after, the date of the agreement of 15 or 16 November 1991. It was necessary to assess their credibility in the light of their evidence and the various documents and correspondence available to the Court.

BACKGROUND

11. Plaintiff and Defendant had a comparatively troubled relationship as landlord and tenant as the history of the tenancy shows.

12. Plaintiff began living in the flat as tenant - the initial tenancy of 2 years running from 1.12.83 to 30.11.85. A further agreement was negotiated through Defendant's father - that tenancy ran from 1.4.86 to 31.3.89. The landlord - tenant relationship was not particularly amicable and further tenancies were achieved through the Lands Tribunal.

13. The third tenancy period was 2 years from 1.4.89 to 31.3.91. On 19 December 1989 Defendant took action in the High Court for non-payment of 2 months rent. The Plaintiff, who at best can be considered a "difficult" tenant, chose to defend the action and eventually filed a Defence on 15.2.90.

14. Plaintiff was represented and succeeded in stringing out proceedings throughout 1990. Eventually, on 9.2.91 Plaintiff conceded the failure to pay rent and asked that interim payments made according to a Master's order be treated as rental payments. He confirmed he would continue his application for relief against forfeiture. On 5.3.91 the trial was fixed on the Running List.

15. Defendant obtained judgment on 6.8.91; Plaintiff was granted relief against forfeiture and ordered to pay the costs of the action.

16. In evidence in this action Plaintiff said that the rental payments were missed inadvertently. That is difficult to accept as true in the light of his ongoing dispute with his landlord. It is more likely to have been withheld deliberately because of his contention that the landlord was failing to maintain the property adequately. Further, Plaintiff's "inadvertence" does not explain why Defendant had resort to a Writ of Fi. Fa. on 21.12.89. That was the result of Plaintiff having refused by a telex of 16.11.89 to sign a new Tenancy agreement or pay the increased rental ordered by the Lands Tribunal.

17. It was disingenuous of Plaintiff's counsel in this action to refer to the High Court action as having been "settled" by the parties given Plaintiff's combative stance throughout. As might have been expected Plaintiff refused to pay Defendant's solicitors costs and applied for a taxation.

18. By this stage the third tenancy period was approaching expiry. Defendant on 27.9.90 had served notice on Plaintiff advising that he sought to terminate the tenancy on 31.3.91 because he wished to live there with his family. Plaintiff filed notice that he would seek a new tenancy. A hearing date was fixed for 21.11.91.

19. On 21.3.91 Plaintiff, through his solicitor, wrote to Defendant offering to buy the flat. No reply was made to this letter - Defendant said he did not receive it. Plaintiff began to make verbal approaches to Defendant but as Defendant was not in Hong Kong very often the negotiations were rather slow. Defendant had given a price of 5 million which Plaintiff attempted to negotiate downwards.

20. Plaintiff's offers to purchase therefore fell on receptive ears for 2 reasons:

1) the existing difficulties of the relationship;

2) Defendant's desire to move to Guildford Road.

THE AGREEMENT

21. Around 15th or 16th November 1991 Plaintiff met Defendant casually and reopened negotiations on a sale price for the flat. Eventually Defendant agreed to sell at a price of $4.25 million. There was discussion about the Lands Tribunal hearing, now only days away. Plaintiff also said in evidence that a further negotiation was carried out in respect of the costs of the High Court action - a compromise being reached at $70,000-00. Defendant could not recall this agreement.

22. I accept that discussion took place about the Lands Tribunal hearing fixed for 21.11.91 and I consider it highly probable that there was some discussion about the amount of the outstanding legal fees for the High Court action. I did not regard Plaintiff as a wholly reliable witness on this point; given the correspondence that later ensued it appears more likely that there was an agreement to compromise the matter, but that no sum was fixed.

23. Both parties gave evidence about this meeting and although they differ in certain aspects it is clear that:

1. Both Plaintiff and Defendant settled on the fact of sale and the price and discussed no other details or terms of the conveyance.

2. Defendant said that his lawyers would send an agreement to Plaintiff - both parties were very clear as to their belief that it was for the lawyers to deal with all other formalities and that they expected them to do so.

3. Plaintiff and Defendant intended that all matters outstanding were to be settled - the sale and purchase of the flat; the question of the High Court costs and the Lands Tribunal application.

24. Defendant instructed his solicitors to prepare the ASP. He did not give, apparently, any instructions about the deposit or settlement date or mode of payment. Defendant said in Court he wanted settlement to be made as soon as possible because he intended to buy another property in Guildford Road. He did not intimate this to Plaintiff and did not tell his solicitor what the date should be to enable him to achieve this aim. He agreed he was happy with the one month period in the agreement.

25. Plaintiff agrees that a settlement date was not discussed; he did not propose one and said he was prepared to leave it to the solicitors to do "what was usual".

26. On 18.11.91 Defendant's solicitors sent a letter to Plaintiff's solicitors setting out a number of terms and enclosing a suitably engrossed ASP containing, as each agreed, the details they expected solicitors to include. Plaintiff's case is that he signed and initialled this agreement after considering and agreeing the terms. He says that soon after he was required to sign another agreement in identical terms at the request of Defendant's solicitors. He recalled paying two cheques to his solicitor, one for the deposit which was $425,000-00 and the other for $70,000-00 being the agreed amount for the High Court costs. The correspondence shows that the agreement was not returned by Plaintiff until 5.12.96. No explanation was given for the delay.

27. The parties agreed on the 15 or 16 November that there was no point in the Lands Tribunal proceedings continuing and Plaintiff was told by his lawyer to attend in person to vacate the hearing of 21.11.91. On the day of the hearing Plaintiff was ill and could not attend. His solicitor was unable to attend but suggested that the Plaintiff send his wife and said a representative from the firm, presumably a clerk, would attend with her.

28. Plaintiff claims he telephoned Defendant on the morning of the hearing to say he was ill and was assured by Defendant that he was not attending either. Defendant in evidence denied this conversation. Both Defendant and his solicitor did attend the hearing. Plaintiff's wife asked for an adjournment but that was refused. She was reluctant and nervous about going and did not say anything further, despite being asked by the Lands Tribunal Officer if she wanted to say anything.

29. Defendant pursued his application for resumption of the premises but made no mention at all of the agreement to sell the property. His application to resume was successful and a stay of three months was granted for Plaintiff's benefit. Neither Defendant nor his solicitor notified Plaintiff of the result of the hearing - no order was served. Plaintiff's wife was unable to tell her husband what had happened and he did not make any further enquiries no doubt because the sale was proceeding. Only at the expiration of 3 months when a Notice to Quit was placed on Plaintiff's door did the Lands Tribunal order come to Plaintiff's attention. The Notice was posted only 7 days before the end of the grace period. At that stage Plaintiff sought a review of the Lands Tribunal order - which, when it was eventually heard, was reversed. If, at the hearing on 21.11.91 the Lands Tribunal Officer had been advised by Plaintiff, or Defendant, of the sale, it is likely the proceedings would have been adjourned or withdrawn.

30. Defendant's behaviour at the Lands Tribunal hearing at 21.11.91 is inexplicable given the instructions he had given his solicitors about the sale. Although he says he proceeded with the Lands Tribunal hearing because he had not by that date received confirmation that the agreement had been signed, he nonetheless made no approach to Plaintiff (accepting for the moment that Plaintiff had not phoned him earlier); did not speak to Plaintiff's wife or the solicitor's representative with her; did not mention to the Lands Tribunal Officer that he had a few days before agreed to sell the flat that he was now endeavouring to resume for his own use and did not, as he might have done, ask for the hearing to be postponed to a later date. Nor despite his professed anxiety to avoid costs did he attend the hearing in person.

31. Defendant chose not to tell the Lands Tribunal that at the same time as he was seeking permission from the Tribunal to resume the flat for use by his immediate family he was in the course of selling the property.

32. He could not explain satisfactorily when giving evidence why he had acted in that manner. He did say that as he had not had any signed agreement back he did not know what the position was and therefore went ahead with his application. He failed to explain why he made no enquiries of anyone about the matter and his behaviour gives rise to very serious doubts about his honesty. These doubts are reinforced by the failure to serve any order on the Plaintiff until the 3 month stay period had all but expired.

33. In cross-examination he admitted that he believed at the time that the sale was proceeding - all he had to do to remove any doubt was to ask Plaintiff's wife at the hearing, refer to Plaintiff's solicitors or ask the Lands Tribunal to adjourn the matter.

34. The Plaintiff's solicitors apparently not knowing of the Lands Tribunal order, replied to the letter of 18.11.91 on the 5.12.91 setting out their client's acceptance of the terms offered earlier.

35. A series of letters then ensued and the form of the agreement was altered in certain minor respects. - A second vendor was added when Defendant's solicitors realised that the car park was owned by Defendant's father's company rather than Defendant himself - and other adjustments were made as realisation dawned that Defendant would need Lands Tribunal consent to sell the property.

36. During this period Plaintiff's solicitors discovered that the Car Park Space No. 4 referred to in the agreement was not in Defendant's name and could not be transferred as agreed. Alternative car park spaces were offered to Plaintiff.

37. Plaintiff clearly made a fuss over this matter - demanding the No. 4 car park space as set out in the agreement. In evidence in court he said he was not concerned with the acquisition of one as against another car park space, but solely concerned to find out from his solicitor whether the signed agreement could be so altered. This is not supported by the correspondence or Defendant's evidence.

38. Defendant said he made an attempt to buy back the No. 4 car park space so he could transfer it to Plaintiff but the owner refused to sell it or swap it for another.

39. Plaintiff then received a letter from Defendant's solicitors referring to his "insistence" on Car Park No. 4 as being evidence of his refusal to accept the contract. The letter referred to Plaintiff being in breach of the agreement and purported to repudiate the contract.

CORRESPONDENCE RELATING TO AGREEMENT AND PURPORTED REPUDIATION

40. An examination of the correspondence between the parties is useful in that it reveals the parties' acceptance of and attitudes to the agreement.

41. On 19.12.91 a proforma letter enclosed an ASP for engrossing, requested the deposit and the title deeds once available. Significantly the completion date at Clause 4 was expressed in terms suggested earlier by Plaintiff's solicitors. There was no insistence on the original date of 21.12.91, indicating that the solicitors accepted the change as necessary and, more important, there is no indication that Defendant required earlier settlement.

42. An engrossed agreement with amendments that are not now known was returned on 9.1.92. On 9.1.92 Defendant's solicitors returned to Plaintiff's solicitors the engrossed ASP for Plaintiff to execute. Whatever the amendments were, they were acceptable to the Defendant's solicitors. On 15.1.92 the agreement was returned signed by the purchaser together with the deposit. The letter refers to the agreement being attested in escrow and refers to the need to check with their client as to Clause 27, which refers to the payment of $70,000-00 for the High Court costs. It is difficult to see why the solicitor needed to be so cautious, particularly as agreement had been reached on that point by 19.12.91. Defendant suggested that this was the Plaintiff playing games, but as Plaintiff said in evidence that he had paid two cheques for deposit and costs to his solicitor at the same time that is unlikely, particularly as Plaintiff was anxious to settle the matter. Defendant's solicitors were unperturbed and sent a further ASP on 10.2.92. The amendments in this ASP were minor e.g. recognising that Defendant could not be the sole vendor as the car park space was owned by his father's company. Defendant gave evidence he had his father's permission to sell the car parks. By letter of 18.2.92 Defendant's solicitors refer to their letter of 10.2.92 and a subsequent telephone conversation and say "in view of your client's insistence our client shall not enter into the conditional ASP with your client."

43. This letter was received at Plaintiff's solicitors office on 19.2.92 but it is not clear whether it was actually read as their letter of 20.2.92 makes no reference to it, referring only to matters of procedure.

44. On 24.2.92 Defendant's solicitors referred to the falling through of the agreement and returned Plaintiff's cheque, confirming their purported repudiation of 18.2.92.

45. At this point Defendant attempted to enforce the Lands Tribunal order. On 27.2.92 Defendant's solicitor wrote "our client has never entered into a binding agreement for selling the above property to your client. There have been negotiations for entering into a conditional ASP but the terms therefore have not been finalised." Reference was made to Defendant requiring the property as his sister has changed her mind about returning to Hong Kong.

46. Correspondence ensued about a review of the Lands Tribunal order and rental payments. On 12.3.92 Plaintiff's solicitor tried to salvage the sale and set out the history of the sale, in particular, the car-park dispute. Plaintiff was willing to take Car Park 6 as nominated by Defendant. Defendant's repudiation was categorised as wrong in law and unjustified on fact.

47. More correspondence about rent followed - Plaintiff changed solicitors and on 21.3.92 a stay of execution was obtained on the possession order.

48. On 11.4.92 Plaintiff's solicitors made a further attempt to resurrect the ASP. On 29.4.92 Defendant's solicitors claimed their client had stopped "negotiating", not because of the failure to agree about the car park but because of Defendant's sister saying she had decided to return to Hong Kong and that Defendant needed the premises for himself. This was patently untrue in the light of the letter of 18.2.92 which made no mention of that need.

49. On 4.5.92 Defendant's solicitors tried to reconcile their reasons given in the letters of 29.4.92 and 18.2.92. "The letter of 27th February and our letter of 29th April actually elaborated on our letter of 12th February". This was a wholly untrue statement. The letter of 18.2.92 referred to a telephone conversation when the discussion was of Defendant's inability to convey the car park found not to be in his name.

50. Plaintiff made a further attempt on 13.5.92 to revive the sale, without success. By 19.8.92 however there appeared a faint hope that Defendant's solicitor would succeed in obtaining instructions to revive negotiations. A final refusal came on 21.8.92.

51. Does the letter of 18.11.91 satisfy the requirements of Section 3(1) of the Conveyancing and Property Ordinance Cap. 219?

52. Section 3(1) Conveyancing & Property Ordinance provides:

"...no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged, or by some other person lawfully authorized by him for that purpose."

53. Section 3(1) Conveyancing and Property Ordinance requires written signed evidence of an agreement of sale of land - it must contain all the terms of the concluded contract.

54. The memorandum relied on by Plaintiff is the letter of 18.11.91. Plaintiff claimed there were 2 terms of the sale - the price of the flat and the costs of the High Court action - in reality the question of costs can be viewed as a separate agreement. If so what was agreed were the parties; the premises and the price - with both parties accepting that the solicitor would prepare the agreement and all other terms.

55. Defendant contends that this letter is what he terms an "offering letter". It is difficult to construe the letter as such, given the very clear wording that recognises "our respective clients have reached a settlement in the following terms" and ends "please confirm the above terms".

56. Both Plaintiff and Defendant confirmed in Court that they considered that on 15 or 16 November 1991 they had reached agreement on all they needed to agree on in respect of the sale. That is borne out by the statement of Charles Wong, Defendant's solicitor (dated 6.2.96) when he says he was instructed by Defendant that he had reached a settlement with Plaintiff on the sale of the property for $4.25 million and that "the completion would be as the then common practice."

57. Charles Wong prepared the letter on 18.11.91 incorporating terms 3, 4 and 5 of his own volition - terms 4 and 5 not being terms Plaintiff or Defendant as laymen would have known were needed.

58. Defendant did not dispute that a solicitors letter could constitute a Memorandum or that Lo Wong & Tsui was authorized to sign such Memorandum. What Defendant contended however was that because Clause 4 referred to the parties entering into an ASP in the form annexed within 7 days from the Court order approving the settlement, there was no admission that there was a contract because another agreement needed to be signed and that negatived the existence of a binding contract.

59. The agreement for sale and purchase was on the 15 or 16 the November. The letter of 18.12.91 evidenced that agreement and clearly referred to a completed agreement. Simple terms relating to settlement and the necessary Lands Tribunal procedures were included. The reply of 5.12.91 did not reject any of the terms. It added a reference to the High Court costs without giving a sum and suggested a slightly different settlement date as the solicitor realised the impossibility of obtaining the Lands Tribunal consent by the date earlier suggested. No doubt Defendant's solicitor himself appreciated the point by that date.

60. Clause 4 of the letter states the obvious - each party to bear its own legal costs and Plaintiff to be responsible for stamp duty and registration. Clause 6 recognised that Defendant needed Lands Tribunal consent to the sale but that recognition does not make the agreement a conditional one as Defendant suggested. Letters of the 9.12.91 and 12.12.91 relate to the question of the High Court costs and show that both parties were proceeding with the ASP and the parallel, but not dependent, compromise over the High Court costs.

61. I was satisfied on the evidence that the letter of 18.11.91 was sufficient Memorandum in terms of Section 3 of the Conveyancing and Property Ordinance.

CREDIBILITY

62. It was necessary having considered the correspondence and the agreements to consider what each of Plaintiff and Defendant had to say about events. The question of credibility, or otherwise was crucial.

63. Overall I was satisfied that Plaintiff was a truthful witness although on certain matters it appeared that his memory was faulty. Although he appeared very sure in his evidence that there had been detailed discussion about the High Court costs, I could not satisfied that he was correct when he said that the amount was agreed at the time of the initial agreement. I consider it more probable that there was some discussion about them; that there was agreement that they be taken into the calculation but that the sum of $70,000-00 was only settled at the time the letter of 9.12.91 was sent by Defendant's solicitors.

64. The letter of 18.11.91 does not mention the High Court costs at all - an odd omission if a sum had been agreed already, because it was Defendant's solicitor who was out of pocket, having effectively granted Defendant credit as a long-term client.

65. When Plaintiff replied to this letter mention was made of "a sum to be agreed between our respective clients" - but no sum was stipulated. I have no doubt that if agreement had been reached as to the amount on 15 or 16 November, Plaintiff would have so instructed his solicitor.

66. Only by letter of 9.12.91 was the sum of $70,000-00 suggested as the amount Defendant was prepared to accept.

67. I do not consider that the High Court costs had a direct hearing on the sale of the property, other than it being a matter that needed to be settled between the parties. Defendant would have been keen to have all matters relating to Plaintiff completed so as to avoid having to deal with him on a continuing basis.

68. It was argued for Defendant that the events of 15 or 16 November 1991 indicate an agreement in principle only, and that only when other terms were incorporated and a written document signed was it possible for Plaintiff and Defendant to bind themselves contractually.

69. I am satisfied that Plaintiff and Defendant did intend to bind themselves contractually; that each took the view that they had agreed on all important matters; that all other details were for their solicitors to sort out and they did not concern themselves with them.

70. Although parties might normally concern themselves with other terms this sale was not a usual one. Neither party had any particular date by which the sale needed to be settled. Defendant says he wanted it as soon as possible but did not mention this to Plaintiff, nor did he give any instructions to his solicitor as to a particular date.

71. Plaintiff expected settlement to be "at the usual time". He as sitting tenant was not concerned with a settlement date, as he might have been had he wished to move into the property.

72. Further, neither party was concerned with the provision or amount of deposit. The Plaintiff's offer was not reliant on his obtaining funds and Defendant did not stipulate a sum to be paid, no doubt expecting the full amount to be available on settlement. According to Defendant, his solicitor knew he wanted to buy elsewhere so was expected to take that into account when drawing up the ASP. That he appears to have done.

73. Defendant maintained that the approval of the Lands Tribunal was a condition precedent for the sale of the premises and that as it was not obtained the contract failed. That was not so - the parties had came to an agreement for the sale and purchase which was not conditional on anything.

74. Although Clause 1 of the letter of 18.11.97 referred to a stay of proceedings on the Lands Tribunal application, that matter was parallel to the sale and purchase and would not, in the ordinary course of events, be proceeded with by either party.

75. That Plaintiff acted along these lines is shown by the Notice to Act in Person prepared for him by his solicitor and filed in Court on 21.11.91. If Plaintiff had not been ill he would have appeared at the hearing on 21.11.91 and advised the Lands Tribunal of his arranging to purchase the property.

76. He was unable to attend, his wife could not assist the Court; and Defendant, for reasons which raise doubts as to his integrity, neither mentioned the sale to the Lands Tribunal nor, according to the statement of Henson Lam, the solicitor who appeared before the Lands Tribunal, did he mention it to him. Mr. Lam had no knowledge of the sale which was dealt with by another solicitor in the firm.

77. Defendant suggested the obtaining of the stay was a vital element of the agreement. A consent order before or on the morning of the hearing would have been the simplest way to deal with the matter but for reasons which remain unknown that was not done. However no adverse reference was ever made to this omission by Defendant's solicitors although, presumably, Defendant informed them he had succeeded in his application. None of the ensuing correspondence drew the order to the attention of Plaintiff's solicitors; certainly it was never suggested that Plaintiff's not obtaining the consent order was untoward, or a reason for not proceeding with the sale.

78. The Defendant was not an impressive witness. He was surprisingly vague about all sorts of matters that he as a businessman might be expected to know or be aware of. For a man as anxious to buy another property as he claimed he was, he took no action to expedite his own purchase or the settlement of the sale. He did not explain satisfactorily why he failed to apprise the Lands Tribunal of the sale of the flat. His reason was that he wanted to live in the flat himself as his sister was returning from abroad. This was clearly not a consideration when he sold the flat. I found it suspicious that the sister's need for accommodation vanished, only to reappear at the expiry of the grace period of 3 months granted by the Lands Tribunal. In relation to that period neither Defendant nor his solicitor saw fit to advise the tenant of the order until the period had almost ended. Thus Plaintiff, who had been living in the flat for 8 years, was given 1 week's notice to leave.

79. The question of the alleged repudiation needs to be considered. Defendant claimed that Plaintiff was intransigent in demanding a particular car park that it was not in Defendant's power to sell. No doubt the Plaintiff proved difficult on this matter. In evidence Plaintiff said his only concern was as to whether the agreement could be altered but the correspondence does not bear that out. Two other car parks were offered as alternatives but were refused by Plaintiff. It was only when the Defendant's solicitors sent the letter alleging a repudiation that Plaintiff changed his attitude and said he would be happy with either car park.

80. One's sympathy may lie with the Defendant, faced as he was with Plaintiff being unreasonable. Yet that sympathy should not disguise the fact that the error about the car park was not of Plaintiff's making. Once that error was discovered the solicitors had perforce to sort it out. Any resulting delay cannot be laid at Plaintiff's door - nor can one deduce from his demand for car park No. 4 any indication that he did not want to go ahead with the sale.

81. It may well have been that the Defendant by this time was regretting having sold the flat to Plaintiff, particularly as Plaintiff was being stubborn about the car park. Given the history of the relationship Defendant might have considered the car park incident a means of extricating himself from the sale. Settlement had been delayed sufficiently for Defendant to have had second thoughts - thoughts which must have revolved around the fact that house prices in the Peak area were rising faster than those in the area of the suit property and that trading up might not be easy. If the sale to Plaintiff fell through Defendant was in a position to resume the property and sell at the end of 2 years by which time his chances, of affording a Peak property may have improved.

FINDINGS

82. I found that the agreement of 15 or 16 November 1991 was an agreement intended by the parties to be binding and further I was satisfied that Section 3(1) of the Conveyance and Property Ordinance had been satisfied in that the letter of 18.12.91 was the memorandum in writing required by that section.

83. I found that Plaintiff had every intention of proceeding with the sale and that he had partly performed the contract by payment of the deposit which had been accepted by Defendant's solicitor. The Plaintiff's solicitors may have been unnecessarily prudent in stating that the ASP should be held in escrow while they checked with their client as to the sum for High Court costs, but as the payment of costs in that sum had already been agreed by letter of 12.12.91, I do not consider this can be taken as an indication that Plaintiff was unwilling to perform the contract. The payment of the deposit was an act of the Plaintiff referable to the contract sued on and referable to the premises the subject of the sale.

84. The Defendant was not entitled to repudiate the contract as he purported to do by letter of 18.2.92. His alleged grounds for so doing were opportunistic and had no genuine connection with the Plaintiff's "insistence" about the car park, as claimed. I found that Defendant for reasons connected with his perception of the rise in value of the suit property, wished to back out of the sale and to re-sell on more favourable terms, safe in the knowledge he had obtained an order for Possession.

LACHES

85. Defendant alleges that Plaintiff was guilty of unreasonable delay and relies on the doctrine of laches. In particular Defendant says Plaintiff slept on his rights for 12 to 14 months between the date of the purported repudiation and the issue of the writ.

86. Although Plaintiff did not deny the delay he pointed to the tactics adopted by his solicitors as being reasonable. They chose to deal first with the reversal of the Lands Tribunal Order obtained by Defendant on 21.11.91 and only thereafter concentrated on the issue of the Writ.

87. On 10.11.92 the review of the Lands Tribunal Order of 21.11.91 was heard, the order was rescinded, and Plaintiff was granted a new tenancy.

88. On 18.2.92 a letter prior to action for breach of contract was sent to Defendant's solicitors. The Writ was issued on 7.2.94 - 14 months later. Plaintiff gave evidence that he was pushing his solicitors to proceed with the action but the solicitor then assigned to Plaintiff did nothing further. Eventually another solicitor handled over the file and took proceedings.

89. At trial Plaintiff produced documents (Bundle E) which established that he was pressing his solicitors to act throughout the period.

90. Defendant alleges he has been exposed to doubt and uncertainty in respect of the suit property, and points out that the property has increased in value since the end of 1991.

91. I note that Defendant has been in receipt of rental, as fixed by the Lands Tribunal throughout the period. That the value of the property has increased cannot be regarded as prejudicing his position.

92. Although there was some delay in Plaintiff's initiating action he cannot be regarded as having waived his rights to a remedy. The Defendant has not pointed to any material change in his position which results from the delay. I do not consider Plaintiff barred by his laches from pursuing his claim for specific performance.

DAMAGES

93. Having found a binding agreement existed between Plaintiff and Defendant which was wrongfully repudiated by Defendant, the question of whether specific performance or damages is more appropriate arises.

94. As was pointed out by counsel for both parties specific performance, even if ordered, can only be partial as the car park space is not in Defendant's power to transfer. Adjustment of the total value would be needed to take account of the price of the car park space which is lost and for which no valuation has been agreed by the respective valuers.

95. The remedy is discretionary and the Court may order specific performance of what is still possible.

96. In this case specific performance is appropriate and the Defendant should be ordered to perform such of his obligations under the agreement as he can. There have been no special considerations shown that would militate against such order e.g. no problem of homelessness accrues to Defendant who has not lived in the premises since 1983 and, his representations to the Lands Tribunal notwithstanding, had no genuine intention of residing there in 1991 at the time he entered the agreement.

97. No other arguments have been advanced for Defendant to show that the grant of such relief would be unjust or highly unreasonable.

98. Accordingly I order that Defendant conveys the flat property being 2nd Floor, K. Y. Mansion, 4A Shiu Fai Terrace, Stubbs Road, Hong Kong to the Plaintiff within one month from the date of this order.

99. I also order that Defendant compensate the Plaintiff for the value of Car Park 8 - such compensation to be agreed between the parties on the basis of a valuation assessed as at 27.5.97, or, in default of such agreement, the value of such car park as at 27.5.97 to be assessed by a Master and the sum so assessed to be paid to Plaintiff.

100. There shall be an order nisi for costs in favour of the Plaintiff, to be taxed if not agreed, such order to become an order of the court within 14 days from the date of judgment if it is not disputed.

101. There shall be certificate for two counsel.