TEAM EIGHT GROUP LTD v. LO YUK YEE

HCA 1933/2019

[2021] HKCFI 1010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1933 OF 2019

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BETWEEN

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J U D G M E N T

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Introduction

1.  There is before this court the Plaintiff’s application by summons dated 11 May 2020 (“Summons”) for summary judgment against the Defendant in terms of the minutes annexed to it (“Minutes”).

2.  In the Minutes, the Plaintiff seeks a declaration inter alia that

(1) the Defendant has repudiated the Provisional Agreement for Sale and Purchase dated 18 July 2019 (“Provisional Agreement”) made among the Defendant as Vendor, the Plaintiff as Purchaser and Midland Realty (Comm) Limited as agent (“Agent”),

(2) the Plaintiff has lawfully accepted the Defendant’s repudiation and is entitled to the return of the deposit in the total sum of HK$20 million (“Deposit”) which was held by Messrs Fan Wong & Tso as stakeholder, and

(3) the Plaintiff is not liable to pay any service fee or damages to the Agent under the Provisional Agreement.

3.  The Plaintiff also seeks an order for the return of the Deposit, damages in the sum of HK$502,000 or to be assessed and the dismissal of the Defendant’s Counterclaim.^[1]

4.  For reasons unexplained, the Minutes contain reliefs which go further than the prayer for relief in the Statement of Claim attached to the Writ of Summons. The prayer essentially seeks:

(1) A declaration that the Defendant has repudiated the Provisional Agreement and the Plaintiff is entitled to accept and has accepted the same.

(2) Further or alternatively, a declaration that the Defendant has renounced the Provisional Agreement.

(3) A declaration that the Plaintiff is entitled to the return of the Deposit.

(4) Damages.

(5) Interest.

(6) A declaration that the Plaintiff is not liable to pay any service fee or damages to the Agent.

5.  Since under RHC O 14 r 1 and O 86 r 1, a plaintiff can only seek summary judgment on a claim included in the Writ, for the present purpose, this court will concentrate on the Plaintiff’s claims in the prayer for relief.

Background

6.  The Plaintiff was and is a company incorporated in the BVI and registered in Hong Kong under Part 16 of the Companies Ordinance, Cap 622 (“CO”) as a non-Hong Kong company.

7.  The Defendant was at the material time the sole legal and beneficial owner of the entire issued share capital of New Legend International Limited (“Company”). The Company was at the material time the registered owner of the property known as Office No 2203 on 22^nd Floor of Tower 1, Admiralty Centre, No 18 Harcourt Road, Hong Kong (“Property”). The Property was the Company’s only asset.

8.  Under Recital D and Clause 1 of the Provisional Agreement, the Defendant agreed to sell and assign and the Plaintiff agreed to purchase and take up an assignment of the entire issued share capital of the Company (“Sale Share”) and the right to all debts owed by the Company to the Defendant and her associates (“Sale Debt”).

9.  The Provisional Agreement contained inter alia the following material terms.

“2. The aggregate purchase price for the Sale Share and the Sale Debt shall be HK$200,000,000 (hereinafter called ‘the Purchase Price’) which shall be paid by the Purchaser to the Vendor in the manner as follows:

(a) an initial deposit in the sum of HK$10,000,000 (hereinafter called ‘the Initial Deposit’) shall be paid upon signing this Agreement;

(b) a further deposit in the sum of HK$10,000,000 (hereinafter called ‘the Further Deposit’) shall be paid on or before 5^TH AUGUST 2019; and

(c) the balance of the Purchase Price in the sum of HK$180,000,000 (hereinafter called ‘the Balance’) shall be paid before 2:00 p.m. on completion of the sale and purchase of the Sale Share and the assignment of the Sale Debt (hereinafter called ‘Completion’), which shall take place on or before 8^TH NOVEMBER 2019 (or such later date as the Vendor and the Purchaser may agree in writing) (hereinafter called ‘the Completion Date’).

The Vendor and the Purchaser agree that the *Initial Deposit* and *the Further Deposit* shall be held by the Vendor’s solicitors as stakeholders until *Completion*.

3. The Vendor and the Purchaser shall negotiate in good faith and use all their respective reasonable endeavours to enter into a formal agreement for sale and purchase (hereinafter called ‘the Formal Agreement’) on or before 5^TH AUGUST 2019 which shall incorporate the terms, warranties and representations customary to transactions similar to the one contemplated herein based on the principal terms set out herein. In the event that the Vendor and the Purchaser shall fail to reach agreement on the terms of the Formal Agreement on or before the aforesaid date, this Agreement shall remain valid and of full force and effect and the parties hereto shall continue to fulfil their respective obligations hereunder.

4. Completion shall be subject to and conditional on:

(a) the Purchaser having completed his due diligence review on the business, financial, legal and other aspects of the Company and satisfied with the results thereof; and

(b) the Vendor having procured the Company to give and prove a good title to the Property in accordance with Sections 13A and 13 of the Conveyancing and Property Ordinance (Cap. 219 of the Laws of Hong Kong).

If any of the foregoing conditions is not fulfilled (or waived by the Purchaser) on or before the Completion Date, the Purchaser shall be entitled to cancel the transaction under this Agreement whereupon the Initial Deposit and the Further Deposit shall be returned by the Vendor or the Vendor’s solicitors to the Purchaser forthwith.

5. To facilitate the carrying out the due diligence review by the Purchaser, the Vendor hereby undertakes to deliver to the Purchaser or the Purchaser’s solicitors all documents relating to the Company within 14 days from the date of this Agreement. The Purchaser shall carry out the due diligence review and confirm in writing to the Vendor or the Vendor’s solicitors whether he is satisfied with the results of such due diligence review within 14 days after the date of delivery of all documents by the Vendor. If it is discovered during the due diligence review that there is any irregularity, the Vendor or the Vendor’s solicitors shall rectify the same as soon as possible …

…

16. If in any case, either the Vendor or the Purchaser fails to complete the sale and purchase in the manner herein contained, the defaulting party shall compensate at once the Agent HK$0.75% OF THE PURCHASE PRICE as liquidated damages.

…

18. This Agreement supersedes all prior negotiations, representations and agreements of the parties herein.

…

24. Remarks:  RIDER ATTACHED.”

…

Rider

(2) Within 30 days after the signing of Provisional Agreement For Sale and Purchase, The Vendor shall provide the following documents to facilitate the Due Diligence Investigation by The Purchaser.

a) Latest 3 years audited financial statements;”

10.  It is not in dispute that

(1) The Plaintiff had paid the Deposit which was held by the Defendant’s solicitors as stakeholder.

(2) Pursuant to the Order of Master Lai dated 22 May 2020, the Deposit was paid into Court pending the determination of the Action or further Order.

(3) The parties had not signed the Formal Agreement as prescribed under Clause 3 of the Provisional Agreement. In which case, the Provisional Agreement remains valid and of full force and effect.

11.  What is apparently in dispute is whether the Defendant had provided the Plaintiff with the Company’s audited financial statements in compliance with Rider (2)(a) of the Provisional Agreement.

12.  According to the contemporaneous correspondence, what happened was as follows:

(1) By letter dated 19 July 2019 from the Plaintiff’s solicitors Messrs Law & Co (“L&C”) to the Defendant’s solicitors Messrs Fan Wong & Tso (“FWT”), L&C asked for all the documents referred to in inter alia Clause 5 and Rider (2) of the Provisional Agreement.

(2) By letter dated 31 July 2019, FWT sent to L&C due diligence documents pursuant to Clause 5 of the Provisional Agreement. There was a schedule of documents attached to the letter. Rider (2)(a) documents, or indeed any accounts of the Company, were not among those sent to L&C.

(3) By letter dated 12 August 2019 from L&C to FWT, L&C asked for a number of documents for the purpose of performing the due diligence exercise contemplated under the Provisional Agreement. One of the categories of documents asked for were the Company’s audited financial statements covering a period no less than the latest 7 whole financial years.

(4) By letter dated 12 August 2019, FWT purportedly sent to L&C due diligence documents of the Company pursuant to Rider 2. Among the documents provided were the Company’s “Latest 3 years audited financial statements” (“1^st batch of financial statements”) for the years ended 31 March 2017, 31 March 2018 and 31 March 2019.

(5) In fact, the financial statements so provided were clearly unaudited - they all contained the following qualifying statement:

“New Legend International Limited is incorporated in British Virgin Islands, the laws of which do not require the company’s financial statements to be audited.  Accordingly, we have not audited or otherwise attempted to verify the accuracy of (sic) completeness of the accounts and accordingly express no opinion thereon.” (emphasis added) (“Qualifying Statement”)

(6) By letter dated 19 September 2019 from FWT to L&C, FWT alleged that all “documents relating to the Company, including the company records and accounting records, have been sent to your firm for due diligence review in accordance with the Provisional Agreement dated 18 July 2019 herein under our letters dated 31 July 2019 and 2 [sic] August 2019”. FWT then purported to put on record that the due diligence review of the Company was satisfied.

(7) By letter dated 24 September 2019, L&C responded to FWT’s said letter refuting their claim that the Defendant had already supplied all the due diligence documents L&C previously asked for and that the Plaintiff was satisfied with the due diligence review of the Company.

(8) By letter dated 25 September 2019 from FWT to L&C, FWT repeated their allegation that the Defendant was only required to provide the documents as mentioned in Rider (2) for the Plaintiff’s due diligence review and that those documents had been sent to L&C under their letter of 12 August 2019. They further claimed that as the time for due diligence review had expired, the Plaintiff shall be deemed to have accepted the Company’s documents for due diligence in accordance with Clause 5 of the Provisional Agreement.

(9) By letter dated 30 September 2019 from L&C to FWT, L&C pointed out that there were still a lot of missing due diligence documents from the Defendant including in particular the Company’s audited financial statements.

(10) By letter dated 2 October 2019 from FWT to L&C, FWT purportedly enclosed in Appendix 1 thereof the documents of the Company as requested by L&C, among them were “Report and Financial Statements Prepared by CPA of Hong Kong” for the years ended 31 March 2013 to 31 March 2019 (“2^nd batch of financial statements”). The 2^nd batch of financial statements were all unaudited financial statements as they all contained the Qualifying Statement.[2]

(11) By letter dated 9 October 2019 from L&C to FWT, L&C pointed out that the Defendant was in breach of Rider (2)(a) in that she had failed and/or refused to provide the latest 3 years’ audited financial statements of the Company. By that letter, the Plaintiff rescinded the Provisional Agreement and demanded for the return of the Deposit.

(12) By letter dated 14 October 2019 from FWT to L&C, FWT purportedly sent over another set of audited financial statements of the Company for the years ended 31 March 2017, 31 March 2018 and 31 March 2019 (“3rd batch of financial statements”) which were all signed by W.K. Wong & Co (CPA) on 11 October 2019 and in which the auditor claimed to have audited the Company’s financial statements for the years in question. FWT also accused the Plaintiff of having wrongfully rescinded the Provisional Agreement and purported to accept the Plaintiff’s repudiatory breach and terminate the Provisional Agreement on behalf of the Defendant.

Deliberation

13.  It is well-established that in an application for summary judgment, the burden is on the defendant to show a real or bona fide defence on the merits or that there are issues of fact or points of law which ought to be tried. In his executive summary, Mr Wong SC has succinctly set out five grounds for resisting summary judgment:

(1) Rider (2)(a) was arguably not a condition and the stipulated time for the performance thereof was arguably not of the essence (“Ground 1”).

(2) The Plaintiff has waived its right and/or is estopped from complaining about any breach of Rider (2)(a) (“Ground 2”).

(3) There was no renunciation of the Provisional Agreement as the Defendant had not evinced an intention not to perform the Provisional Agreement (“Ground 3”).

(4) The Defendant has not breached Rider (2)(a) as the Defendant was only required to provide financial statements issued as a result of work that is comparable to a Hong Kong audit (“Ground 4”).

(5) As the value of the Company has dropped significantly after the Provisional Agreement was entered into, the Plaintiff cannot now seek remedies on a reliance loss basis (“Ground 5”).

Ground 1

14.  Mr Wong SC submits that, properly construed, Rider (2)(a) was arguably not a condition and the stipulated time for the performance thereof was arguably not of the essence.

15.  With respect, this court does not agree.

16.  In Chitty on Contracts (33^rd ed) Vol 1 at para 13-040, the learned authors observed that:

“The conclusion to be drawn from these cases is that a term of a contract will be held to be a condition:

…

(iv) if the nature of the contract or the subject matter or the circumstances of the case lead to the conclusion that the parties must, by necessary implication, have intended that the innocent party would be discharged from further performance of his obligations in the event that the term was not fully and precisely complied with.”

17.  It seems to this court that judging from the nature of the contract, the subject matter of the transaction and the circumstances of the case, Rider (2)(a) is clearly a condition in the sense that it is an essential stipulation of the Provisional Agreement which one party promises will be fulfilled, failing which the innocent party will be discharged from it. The reasons are these.

18.  First, the transaction in question is for the sale and purchase of the entire issued share capital of the Company. Clause 4 of the Provisional Agreement expressly provides that completion should be conditional on the Plaintiff having completed the due diligence review on inter alia the business and financial aspects of the Company and is satisfied with the results. Clause 5 of the Provisional Agreement further provides that the Defendant shall deliver all documents relating to the Company to facilitate the carrying out of the due diligence review by the Plaintiff.

19.  Mr Wong SC argues that the provision of the documents identified under Rider (2)(a) was not a condition because it was only a means to an end ie to facilitate the due diligence exercise. But there is no explanation as to why that in itself should disqualify Rider (2)(a) as a condition. Ultimately, almost every clause in the Provisional Agreement can be seen as a means to an end ie completion of the sale and purchase. Taking Mr Wong SC’s argument to its logical conclusion, none of the terms in the Provisional Agreement can qualify as a condition save for the one concerning with completion. The fallacy of the argument is self-evident.

20.  In this court’s view, the provision of the Company’s audited accounts to the Plaintiff is an important part of the Defendant’s obligations under the Provisional Agreement. Anyone familiar with corporate transactions should know that audited financial statements are fundamental documents indicating the financial health (or ill-health) of a company. It is difficult to imagine anyone spending HK$200 million to buy a company without gauging its financial health. It is equally difficult to see how the due diligence review can be completed or how the Plaintiff can be satisfied with the results unless the audited financial statements of the Company are available for review.

21.  Second, the importance of Rider (2)(a) to the parties is highlighted by the fact that it was specifically inserted into the Provisional Agreement under Clause 24 ie “Remarks” as an additional term to the printed clauses in the Agent’s standard form agreement. The learned editors of Lewison, The Interpretation of Contracts (6^th ed) para 9.10 helpfully summarise the legal position as follows:

“For hundreds of years many types of commercial contract have been made on standard forms … The printed form is designed to cope with a number of different contracts being made in different circumstances, whereas the written or typed clauses are designed to cope only with the particular contract in the course of being made. In such circumstances the court will place greater weight on the written clauses, and if necessary allow them to prevail against the printed clauses…In Homburg Houtimport BV v Agrosin Ltd[3], Lord Bingham of Cornhill said:

‘It is common sense that greater weight should attach to terms which the particular contracting parties have chosen to include in the contract than to pre-printed terms probably devised to cover very many situations to which the particular contracting parties have never address their minds.’” (emphasis added)

22.  While Mr Li SC does not go so far as to suggest that Rider (2)(a) prevails over Clause 5, he submits and this court agrees that it is a separate and distinct term to be fulfilled by the Defendant in additional to Clause 5.

23.  On the other hand, Mr Wong SC keeps emphasising that there is a “rectification” mechanism under Clause 5 which Rider (2)(a) must be read subject to and suggests that this is also a reason why Rider (2)(a) is arguably not a condition. No authority has been cited in support of this contention. With respect, this argument is a complete non sequitur. The “rectification” mechanism only imposes an obligation on the part of the Defendant to rectify if any irregularity is discovered. It does not explain why Rider(2)(a) should be read subject to Clause 5 when there is no provision to that effect; nor does it explain why the existence of a “rectification” mechanism means Rider(2)(a) should not be construed as a condition.   

24.  Third, whether a time limit is of the essence of a contractual provision is a question of interpretation of the provision in the context of the specific contract as a whole. In the present case, in substance though not in form, the transaction in question is for the sale and purchase of a landed property. It is well-established by high authorities that time was of the essence of a provisional sale and purchase agreement notwithstanding the absence of an express provision to that effect: Sun Lee Kyoung SIL v Jia Weili [2010] 2 HKC 117 at [21], [22] and [38] per Recorder P Fung SC:

“21. In my judgment, the law in Hong Kong is quite settled by now that, for transactions similar in nature to that in the present case and in the absence of special circumstances, the parties are usually taken to have proceeded on the basis that time is of the essence of the contract despite the fact that there is no express provision to that effect in the provisional agreement for sale and purchase in question. The law was stated by the Court of Appeal in the case of Wong Wai Chi Ann v Cheung Kwok Fung Wilson [1996] 3 HKC 287 in its judgment delivered by Godfrey JA at p 290 C – I …

22. In the case of Kwan Siu Man v Yaacov Ozer [1999] 1 HKC 150; [1999] 1 HKLRD 216, Litton PJ sitting in the Court of Final Appeal approved of the Wong Wai Chi Ann decision and said this at p 226 F – H: -

‘Further, as is common knowledge in Hong Kong, the property market is highly volatile. Whatever might have been the position in England in the last century – when the concept of an ‘open contract’ was first developed in a climate of a stable pound sterling and no inflation – in the Hong Kong of today, the date of completion is an essential term of any contract for the sale and purchase of land: To the extent that in the case of a provisional agreement in the common form in use here, time for completion would normally be treated as of the essence of the agreement, even though no express provision to that effect is in the agreement: see Wong Wai Chi v Cheung Kwok Fung [1996] 3 HKIC 287.’

…

38. On the basis of the authorities cited above, I find that time was of the essence of the Provisional Agreement in the present case despite the absence of any express provision to that effect. I base my finding on the nature of the transaction and the property, namely, the sale of a flat in a large development in the secondary market. I further base my finding on the surrounding circumstances, namely, the entering into a provisional agreement by the parties in the volatile property market in Hong Kong and the fact that completion was to take place within a relatively short time, i.e., about 9 weeks from the date of the Provisional Agreement.” (emphasis added)

25.  Mr Wong SC submits that these conveyancing cases cited by Mr Li SC are irrelevant for the present purpose. This court does not agree. In this court’s view, these conveyancing cases are applicable to the present case by analogy.

26.  Like Recorder P Fung SC, this court is bound by the authorities referred to by the learned Recorder. This court has also taken into account (i) the nature of the transaction which was the sale and purchase of a company with only 1 asset ie a highly valuable commercial property, (ii) the volatility of the property market in Hong Kong generally, and (iii) the relatively short timeframe between the date of the Provisional Agreement and the Completion date during which the Defendant not only had to prove and the Plaintiff had to be satisfied with the Company’s title to the Property in the usual manner but further, the Defendant had to facilitate and the Plaintiff had to conduct a due diligence review on various aspects of the Company and be satisfied with the results.

27.  As this court concludes earlier, the provision of the Company’s audited accounts is an important means to facilitate the due diligence review and hence the completion of the sale and purchase. While cases like Sun Lee Kyoung SIL v Jia Weili, Wong Wai Chi Ann v Cheung Kwok Fung Wilson and Kwan Siu Man v Yaacov Ozer were concerned with the time for payment of initial deposit, signing of formal agreement and completion, this court cannot see any special circumstances which suggest that, in the present case, time is not of the essence of the Provisional Agreement, or more precisely, time is not of the essence of the Defendant’s obligation under Rider (2)(a) of the Provisional Agreement.

28.  For the above reasons, Ground 1 is rejected.

Ground 2

29.  The gist of Mr Wong SC’s argument on waiver/ estoppel is that in breach of Clause 5, the Plaintiff has failed to (i) raise complaints and/or to inform the Defendant of the irregularities concerning the 1^st batch of financial statements sent to it on 12 August 2019 and/or (ii) confirm in writing whether it was satisfied with the due diligence review since 26 August 2019 ie 14 days after delivery of the due diligence documents. If the Plaintiff had complied with Clause 5 and complained to the Defendant, the Defendant could have rectified the problem with the 1^st batch of financial statements.  The Plaintiff’s silence had deprived the Defendant of the opportunity to rectify the irregularity. In the absence of any timely complaint about the 1^st batch of financial statements, the Defendant was led to believe that the Plaintiff was able to conduct its due diligence review on the basis of the documents provided and that there were no irregularities with regard to them. The same argument applies if the Plaintiff had confirmed whether it was satisfied with the due diligence review.

30.  In this court’s view, the argument is wholly disingenuous.

31.  First, as a matter of construction of Clause 5, the Plaintiff’s only duty is to “carry out the due diligence review and confirm in writing to the Vendor or the Vendor’s solicitors whether he is satisfied with the results of such due diligence review within 14 days after the date of delivery of all documents by the Vendor.” Since the Defendant had failed to deliver all due diligence documents, in particular, the 3 years of audited accounts, to the Plaintiff, its duty to confirm to the Defendant or her solicitors its (dis)satisfaction with the results of the due diligence review did not arise.

32.  The next part of Clause 5 only imposes a positive duty on the Defendant to rectify any irregularity if it is discovered that such exists. There is no express duty on the part of the Plaintiff as such to discover and disclose any irregularity to the Defendant. Apart from a bare assertion in his skeleton submissions, no reason has been given and no authority has been cited as to how or why such a duty should be implied.

33.  In any event, even if the Plaintiff were obliged to discover and disclose the problem with the 1st batch of financial statements to the Defendant, no time limit was imposed as to when it should have done so. On the undisputed facts of the case, L&C had complained to FWT twice, on 24 and 30 September 2019. FWT’s response to the complaint on 24 September 2019 was to insist that the Rider (2)(a) documents had already been sent to L&C on 12 August 2019. Their response to the complaint on 30 September 2019 was to send inter alia the 2nd batch of financial statements to L&C.

34.  In these circumstances, there is no basis for the Defendant to accuse the Plaintiff of being late in raising the complaint about her own failure to provide Rider (2)(a) documents to the Plaintiff. There is equally no basis for the Defendant to allege that she had been deprived of the opportunity to rectify the problem with the Rider (2)(a) documents - she had been given 2 opportunities to do so but still failed to rectify the same.

35.  Second, while the Defendant asserts that she has been misled by the Plaintiff’s failure to complain about the Rider (2)(a) documents timeously, it is difficult to see how that can be established on the evidence. The 1st and 2nd batches of financial statements were the Company’s documents to which the Defendant and her solicitors no doubt had access. They were on their face clearly and unmistakably “unaudited” financial statements. The Defendant’s obligation under Rider (2)(a) was also clear and unmistakable - it was to deliver “audited” financial statements. The Defendant’s assertion that she was led to believe that the Plaintiff was able to conduct its due diligence review on the basis of the “unaudited” financial statements is simply unbelievable.

36.  For the above reasons, Ground 2 is rejected.

Ground 3

37.  In rejecting Grounds 1 and 2, this court has concluded that Rider (2)(a) is a condition and that time for its performance is of the essence. On the evidence, there was undoubtedly a breach by the Defendant for failing to provide the Company’s “Latest 3 years audited financial statements” on or before 17 August 2019. This breach of a condition of the Provisional Agreement entitled the Plaintiff to treat itself as discharged from further performance of the Provisional Agreement[4] . By the letter dated 9 October 2019 from L&C to FWT, the Plaintiff had elected to do so.

38.  In these circumstances, the Plaintiff’s claim for a declaration that the Defendant has renounced the Provisional Agreement is academic; so is Ground 3. Whether or not the Defendant has, by word or conduct, evinced an intention not to perform the Provisional Agreement ie whether she has renounced the Provisional Agreement[5], the Provisional Agreement had indeed been terminated by reason of her actual breach of Rider (2)(a). It is thus unnecessary to dwell on the parties’ lengthy submissions on renunciation.

Ground 4

39.  Ground 4 is wholly unmeritorious. What it boils down to is the Defendant’s bare assertion that the 1st batch of financial statements provided to the Plaintiff on 12 August 2019, albeit expressly stated to be “unaudited”, were in fact prepared at a level comparable to “audited” financial statements prepared in accordance with Hong Kong standard. Since Rider (2)(a) makes no mention of the standard upon which the financial statements are to be audited or what must be contained in such audited financial statements, all that the Defendant was required to do is to provide financial statements which were “in substance” prepared at a level comparable to a formal audit.

40.  This argument ignores the simple fact that Rider (2)(a) expressly requires the provision of audited financial statements whereas what had been provided to the Plaintiff were all unaudited financial statements. How unaudited accounts can be equated with audited accounts is beyond comprehension. The argument simply seeks to put words into Rider (2)(a) which were not there.

41.  Ground 4 is also rejected.

Ground 5

42.  As this court sees it, this Ground only goes towards the Plaintiff’s claim for damages. In the prayer for relief, the Plaintiff is claiming unquantified damages without specifying the basis of the claim. It is true that in the 1st affirmation of Kwok Wai Ming at para 16, the Plaintiff has indicated that it is claiming HK$502,000 on a “wasted expenditure” basis, the sum representing the legal costs billed by L&C in connection with the Provisional Agreement. But as stated at the beginning of this Judgment, this court will only focus on what the Plaintiff claims in the prayer for relief. As far as damages are concerned, the claim is for unquantified damages ie damages to be assessed. In these circumstances, Ground 5 is irrelevant to the present application for summary judgment.

Disposition and costs order nisi

43.  In the premises, the Plaintiff is entitled to summary judgment in the following terms and this court shall so order[6]:

(1) A declaration that the Defendant has repudiated the Provisional Agreement and the Plaintiff is entitled to accept and has accepted the same.

(2) A declaration that the Plaintiff is entitled to the return of the Deposit.

(3) An Order for payment out of Court of the Deposit.

(4) The Defendant do pay interest on the Deposit at the rate of prime plus 1% from the date of the Writ to the date hereof.

(5) Damages to be assessed.

44.  There shall be an order nisi that costs of the Action including costs of and occasioned by the Summons be to the Plaintiff, to be taxed if not agreed, and paid by the Defendant forthwith. Certificate for 2 counsel.