MURRAY ALASTAIR ELLIOT v. HEALTHY LIVING PRODUCTS INTERNATIONAL LTD AND OTHERS

cacv 40/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 40 of 2006

(on appeal from HCA NO. 3202 of 2003)

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J U D G M E N T

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Hon Rogers VP:

1.  This is an appeal from a decision of Deputy Judge Gill which was given on 23 January.  This matter is somewhat urgent because the trial of this action is due to commence next Wednesday, on 1 March, and for that reason, this court is giving its reasons orally and not preparing written reasons.

2.  The matter involves the sale and purchase of a house and, quite simply, the plaintiff signed a sale and purchase agreement with the 1^st defendant.  The signatories for the 1^st defendant were a Madam Chan who is a director, and the 3^rd defendant who is her son and also a director.  The action has had a chequered history.  The provisional sale and purchase agreement was signed on 14 June 2003 and there was a formal sale and purchase agreement which was signed on 26 June by Madam Chan alone.  The first thing that happened, however, in the course of the transaction was that, on 21 July 2003, the solicitors who were acting for the vendor wrote to the purchaser, drawing the purchaser’s attention to various illegal structures and so forth in the building, thereby, it is suggested, trying to put the purchaser off the purchase.  That clearly did not succeed.

3.  Soon after that, on 1 August 2003, the vendor’s solicitors changed.  They wrote very soon after that, on 6 August, disclosing for the first time that the 2^nd defendant had a beneficial interest in the property.  That beneficial interest was alleged to arise from payment of part of the purchase price for the property.  Meanwhile, the completion date of 25 August was fast approaching, but that went and the conveyance never took place. 

4.  The plaintiff then issued the writ and this action and the plaintiff sought summary judgment.  One of the things that the plaintiff drew the court’s attention to in the course of the summary judgment was that the 2^nd defendant had not been incorporated at the time when the payment of part of the purchase price of the property by the 1^st defendant was said to have occurred. 

5.  There was then another change in the 1^st defendant’s stance.  They then said, “Well, it wasn’t the 2^nd defendant, it was another company with a very similar name, Nu Life International Limited”.  The plaintiff then pointed out, in paragraph 5 of the reply, that:

“(a) by virtue of section 6 of the Conveyancing and Property Ordinance, Cap. 219, the transmission to the 2^nd Defendant of any beneficial interest as Nu Life International Limited might have had in the property (which is denied) could only have been effected by an instrument in writing;

(b) no such instrument in writing has been registered with the Land Registry;

(c) in the premises, by virtue of section 3 of the Land Registration Ordinance, Cap. 128, such equitable interest in the property as the 2^nd Defendant may have acquired from Nu Life International Limited is not enforceable against the Plaintiff.”

6.  So the matter rested there with the plaintiff, as it were, fending off the various reasons as to why the completion should not take place.  In the meantime, the matter was progressing to trial.  Not only had evidence been filed on the summary judgment application, but witness statements had been filed.  There was a first pre-trial review which took place on 13 January 2006.  The second pre-trial review had been fixed for 23 January 2006.  After business hours, or certainly at the end of business hours on the Saturday before then, the 1^st and 3^rd defendants served a summons seeking to amend the defences and file fresh evidence.  The substance of the amended defences are that there was duress and undue influence by the agent who had been employed both by the plaintiff and the 1^st defendant.  It was suggested that Madam Chan, whose signature was of course on the first provisional sale and purchase agreement and on the formal sale and purchase agreement, was of unsound mind and in no fit state to give her consent at the time.

7.  When the matter came before the judge on 23 January, these applications were contested.  I have to say that the judge dealt with them extremely well in the short space of time that he had available.  He only had half an hour allotted for the pre-trial review, but the matter extended for another half hour after that while he listened to the application.  But at the end of the application, he said this:

“Mr Wong, I am against you in your application.  This is very, very late.  It’s quite substantial.  It’s a defence which was well-known, were it to be bona fide, well before - a few weeks before trial.  No evidence has been adduced whatsoever as to why it has come in at this stage.  It is prejudicial.  The case is unlikely to be able to proceed on the due date with available time if the application were granted, and I exercise my discretion to decline the application, at least as to the application to amend the pleadings and, presumably, consequentially - well, certainly consequentially - the late filing of the medical reports and, as I understand it, the proposed witness statement of Madam Bebing.”

8.  Of course, the judge was there exercising his discretion.  One of the matters which he clearly bore in mind was the fact that the trial of this action, which was, in any event, due to take place nearly three years after the original sale and purchase agreement which should have been completed within a month, had been signed.  He was, of course, dealing with it expeditiously and he was giving his reasons orally.  They cannot be expected to be entirely complete but, clearly, one of the things which the judge had in mind were the submissions which had been made by Mr Yin, who was counsel for the plaintiff, that the whole of this case has been one series of defences put up and, as each one is knocked down by the plaintiff, so another defence emerges.

9.  Mr Wong, who has appeared on behalf of the 1^st and 3^rd defendants this morning, says that it is open to this court to exercise its discretion afresh because the judge took into account the fact that there was no explanation for the delay.  He says that now an affidavit has been filed by the 3^rd defendant which explains the delay in making the application.  However, having been taken through the various documents, including the affidavits which were filed in the Order 14 proceedings and one of the witness statements, the more that I was taken through them, the more I saw that there was no justification for any delay.  There is little justification that I can see for raising these matters now.  The evidence, at best, amounts to some high-pressure salesmanship on the part of the estate agent but no more.  The evidence shows, quite clearly, as far as I can see, that Madam Chan was in control of her faculties at the time.  She may have wanted to rid herself of a “salesman with a foot in the door”, and the 3^rd defendant may have been annoyed about the price obtained for the house and that consternation was expressed, no doubt, at the time when he actually signed the provisional sale and purchase agreement.  But this unfortunately does not, to my mind, amount to duress, nor does it begin to establish that Madam Chan was of unsound mind.

10.  In those circumstances, first of all, I do not consider that there are grounds for this court to interfere with the exercise of discretion by the trial judge.  He has a trial coming up and he is well able to take that decision having seen the history of the action before him.  But even if it were open to this court to interfere with the exercise of his discretion, I consider that I would have exercised my discretion in exactly the same way.  In my view, this appeal falls to be dismissed and this trial should commence next Wednesday, on 1 March.

Hon Le Pichon JA:

11.  I agree.