LAM MAN FUNG MAMIE v. ACTIVE BENEFIT LTD.

HCA 11556/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 11556 OF 1997

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________________

J U D G M E N T

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Introduction

1. A housing project known as "Monterey Villas" ("嘉輝花園") was developed by the Defendant in around 1997 in Peng Chau Island, one of the resort areas in Hong Kong. The Plaintiff and her family saw a newspaper advertisement about it and became interested. On Monday, 19 May, 1997, they went to Peng Chau to have a look.

2. They finally chose a unit known in English as "Monterey Villas, 12 Po Peng Street, Peng Chau, Peng Chau Lot No. 661, Flat A09, 4th Floor and Roof Top" ("the suit property" and the roof top is "the Roof Top"). This English description has been used in the documents executed by the parties before the commencement of these proceedings as well as used by them in documents used in these proceedings. The Chinese description of the suit property is "坪洲寳坪街12號嘉輝花園4樓Ａ09室連天台". The significance of the Chinese description will be discussed under the heading "Other Matters" below.

3. A "Memorandum of Sale" dated 24 May, 1997 was signed by the Plaintiff and the Defendant. Later, a formal Sale and Purchase Agreement dated 28 May, 1997 was also signed by them ("the Agreement"). Since the project was one covered by what is commonly called the "Consent Scheme" of the Law Society of Hong Kong, the terms of this document followed the provisions of the standard sale and purchase agreement of the "Consent Scheme".

4. Completion took place on 1 August, 1997. After possession of the suit property was handed over to the Plaintiff, she found that the Roof Top was unfenced and could not be built upon. She also found a "trap door" blocking the opening leading to the Roof Top. She considered it difficult (or impossible) to open this "trap door", making it difficult to access the Roof Top.

5. The reason why the Roof Top was unfenced or built upon was that Clause (8)(f) of the Special Conditions of the Conditions of Sale of the land on which the suit property is located prohibits any "part of any building or structure erected or to be erected on the lot [from exceeding] 15 meters above the mean site formation level": see, for example, para. 4(a) of the Amended Defence. The building of which the suit property forms part was approved to be, and was in fact, built with the Roof Top at the maximum permitted level: para. 4(c) of the Amended Defence.

6. By reason of the facts above, the Plaintiff took the view that the Defendant breached the terms of the Agreement and commenced this action in October, 1997 asking for damages. On the other hand, the Defendant considered that it had not breached any terms of the Agreement.

The Issues

7. The Plaintiff's case is based purely on the allegation that the Defendant has breached either the express terms or the implied terms of the Agreement. Although there was a reference suggesting misrepresentation in the Plaintiff's witness statement, Plaintiff's counsel accepted that no reliance would be placed on such reference.

8. The express terms of the Agreement relied upon by the Plaintiff were:-

(a) Clauses 28(1) and 28(2);

(b) Clauses 2 and 6 and Schedule 3.

9. The implied terms of the Agreement relied upon by the Plaintiff were:-

(a)	"as a matter of law ... the Roof Top was sold for the use and to the use and could be used occupied and enjoyed exclusively by the Plaintiff": para. 14 of the Amended Statement of Claim;
(b)	" ... by reason of business efficacy ... the saleable area sold for the use and to the use and could be used occupied and enjoyed exclusively by the Plaintiff": para. 15 of the Amended Statement of Claim;
(c)	"by charging the extra HK$182,800 (being HK$1,763,700 - HK$1,580,900) for the saleable roof top areas [sic] of 296 square feet, ... the roof top area was usable, occupiable and enjoyable to and for the exclusive benefit of the Plaintiff": para. 16 of the Amended Statement of Claim.

10. The Defendant denies it breached any of these terms, or indeed any term, of the Agreement.

11. Further, the Defendant contends that the Plaintiff was at liberty to view and inspect the building where the suit property is located, or to raise any reasonable requisitions. By reason of these matters, the Defendant was entitled to rely on the principle of caveat emptor: para. 4(d) of the Amended Defence.

12. The Defendant pleaded that it only priced the Roof Top at HK$50 per square foot and as such its market price was only HK$13,450.

Findings of Fact

13. By reason of the nature of the issues, the factual dispute between the parties is narrow in scope. Factual evidence was adduced by the parties in relation to the following issues:-

(a)	the surrounding circumstances relevant to the construction of the terms of the Agreement;
(b)	whether those terms have been breached by the Defendant.

14. Witnesses who testified during the trial were:-

(a)	the Plaintiff;
(b)	Mr Yu Wai Cheung, the Assistance Technical Officer of Chissay (Property Management) Limited, the manager of "Monterey Villas" ("Yu");
(c)	Mr Chan Yuk Sing, the Senior Property Manager of K. Wah Real Estates Company Limited, the sales agent of the Defendant ("Chan").

In addition, the parties called the following expert witnesses:-

(a)	for the Plaintiff, Mr Hung Man Kit, Martin, a building surveyor of Chesterton Petty Limited;
(b)	for the Plaintiff, Mr Ng Siu Lam Alex, a surveyor of Chesterton Petty Limited ("Ng");
(c)	for the Defendant, Mr Daniel Mak, a surveyor of Allied Surveyors Limited ("Mak").

The expert evidence will be discussed under the heading "Quantum". Only the credibility and reliability of the factual witnesses will be dealt with under this heading.

15. The parties' witnesses differed as to whether a 3-dimensional model of the whole project (including the building in which the suit property is located) was displayed in a conspicuous place inside the sales office at the site when the Plaintiff went there in May, 1997. The Plaintiff testified that it was not whereas Chan testified to the contrary. I find that both witnesses might have been telling the truth and the model was displayed at the site at that time but the Plaintiff failed to notice it. I also accept the Plaintiff's testimony that she did not notice the state of the roof top of the buildings at "Monterey Villas" when she went there in May, 1997.

16. The weight of the "trap door" originally installed at the entrance to the Roof Top (this was replaced by an electrically operated hatch door in about October, 1997 by the Defendant) was disputed. The Plaintiff claimed that it was so heavy she found it impossible to open it on her own. The defence witness Yu testified he did not find it difficult to do so. Yu said that "trap door" weighed about 10 pounds and this was not challenged by the Plaintiff's evidence. I accept Yu's testimony over this point. I also find that the "trap door" could have been opened by reasonable force, for example, by a male of ordinary built, or by a female with the help of someone. I find that such would not constitute undue hindrance to the Plaintiff's access to the Roof Top.

17. It was undisputed that the "trap door" was unlocked at any time before it was replaced with the electrically operated hatch door in about October, 1997.

18. I find that in its present state, the Roof Top is dangerous for ordinary daily use, for example, going there for relaxation, viewing the surrounding areas or social chats. In addition to not being fenced, there were quite a number of lightwells on the Roof Top (which were in effect also unfenced). The defence witness, Chan, answered in cross-examination that whether the Roof Top was dangerous depended on its use. While this was not an express admission of such danger, it was an evasive answer to the matter put to him by the Plaintiff. I infer from such failure to answer that he also accepted there would be danger if the Roof Top is used for the above said purposes.

19. I consider I can take judicial notice that it is common for the ordinary Hong Kong people to use the roof top for a number of domestic purposes, for example, growing plants, drying clothes, having social chats or barbecue parties. These activities fall within the normal range of "habitation" activities on roof tops of buildings in Hong Kong.

20. I accept the Plaintiff's testimony (in cross-examination) to the effect that she could not inspect the Roof Top when she went to the site in May, 1997 because the building was still under construction then (or at least that was the message she got from the staff at the site). The mere fact an occupation permit was issued on 7 April, 1997 does not necessarily mean that this part of her testimony is untruthful or unreliable.

21. I find that the Plaintiff had not been able to prove that the Defendant had allocated $182,800 of the total price for the suit property to the Roof Top. I accept Chan's testimony (which was supported by the contemporaneous documents) over this point, namely, the Defendant only charged the Plaintiff for the construction costs of the Roof Top.

Relevant Surrounding Circumstances

22. No contract is made in a vacuum. Contracts need therefore to be construed in the light of its surrounding circumstances at the time: see, for example, the observations of Lord Hoffmann in I.C.S. v. West Bromwich B.S. [1998] 1 W.L.R. 896, at pp. 912H to 913F.

23. Plaintiff's counsel submitted the relevant surrounding circumstances were:-

(a)	the Defendant published a press release in the newspapers on about 19 May, 1997 stating inter alia that the units with roof top would be sold at an average $3,213 per square foot: para. 7(a) of the Plaintiff's closing submissions;
(b)	the Defendant issued a price list for the 1st floor to 4th floor with roof top: para. 7(b) of the Plaintiff's closing submissions;
(c)	the suit property was sold to the Plaintiff as part of the third batch of units of "Monterey Villas": the Plaintiff's oral closing submissions;
(d)	it is common in Hong Kong that roof tops of buildings are fenced: the Plaintiff's oral closing submissions;
(e)	Peng Chau Island is one of the commonly known holiday resort areas in Hong Kong: the Plaintiff's oral closing submissions.

I find that only para. (d) and (e) were relevant surrounding circumstances.

24. On the other hand, defence counsel argued it is relevant that a model of the proposed development at "Monterey Villas" was displayed conspicuously at the sales office when the Plaintiff went there. Since I have found as a fact that the Plaintiff did not notice the model, this argument needs not be considered further. In any event, even if the Plaintiff had noticed the model, I do not consider this a relevant factor in construing the meaning of the express or implied terms of the Agreement, just as I do not consider the Defendant's news release or price list to be relevant surrounding circumstances.

The Plaintiff's Case Based on Clause 28

25. Clauses 28(1) and 28(2) of the Agreement provided that:-

"[The Defendant] shall at its own costs and as soon as reasonably practicable after receipt of a written notice served by [the Plaintiff] within 6 month of the date of completion of the sale and purchase ... remedy any defects to [the suit property] ... caused otherwise than by the act or neglect of [the Defendant] ... ";

"[The Defendant] undertakes with [the Plaintiff] to use his best endeavours to enforce all defects and maintenance obligations under all contracts relating to the construction of the Development in so far as such defects relate to or affect [the suit property] ... ".

26. The Plaintiff's case based on Clause 28 of the Agreement (relating to defects of the suit property and remedying them) is set out in para. 9 and 10 of the Plaintiff's closing submissions. In essence, the Plaintiff argues that the lack of fencing of the Roof Top makes it dangerous and this constitutes "defect" within the meaning of Clause 28.

27. I do not agree. I consider that "defect" in Clause 28 is related to defects in workmanship or materials. In other words, the kind of defects similar to the implied term referred to in Chitty on Contracts (1999) 28th Ed., para. 13-015, namely, the construction work will be done in a good and workmanlike manner, and good and proper materials will be supplied. I do not consider Clause 28 to cover the kind of "defect" contended for by the Plaintiff which was related to design rather than workmanship or material.

The Plaintiff's Case Based on Clauses 2 and 6 and Schedule 3

28. Clause 2 of the Agreement stated that:-

"[The Defendant] shall sell and [the Plaintiff] shall purchase [the suit property] ... ".

The suit property has been defined in Clause 1(1)(m) as meaning the property described in Schedule 3 of the Agreement. Schedule 3, Part I of the Agreement reads:-

"ALL THOSE 102 equal undivided 20,052nd parts or shares of and in the land ... TOGETHER with the exclusive right and privilege to hold use occupy and enjoy ALL THOSE FLAT A09 on the FOURTH FLOOR and ROOF TOP PORTION A09 ... ".

Schedule 3, Part II of the Agreement described the saleable area of the unit as 33.187 square metres while that of the Roof Top as 27.569 square metres.

29. Clause 6 of the Agreement also provided that the Plaintiff shall upon completion be entitled to the vacant possession of the suit property.

30. The above provisions of the Agreement were categorised by conveyancers as "covenants for title". At common law, they are incorporated in conveyancing documents to indicate that:-

(a)	the title expressly provided for is conveyed to the purchaser;
(b)	where appropriate (for example, where the vendor sells as "beneficial owner"), other covenants for title will be implied: Emmet on Title 19th Ed., para. 16.004 and 16.005 and 16.007 to 16.011. The main implied covenants are:-

	(1)	the vendor has, with the concurrence of any other person conveying by his direction, full power to convey the subject-matter expressed to be conveyed subject as it is expressed to be conveyed: Emmet, para. 16.008;
	(2)	the purchaser shall have quiet enjoyment and possession without any lawful interruption: Emmet, para. 16.009;
	(3)	the property is free from all adverse estates, incumbrances, claims and demands other than those subject to which the conveyance is expressly made: Emmet, para. 16.010;
	(4)	the vendor will at the request and costs of the purchaser execute and do all assurances and things for further assuring the subject-matter of the conveyance: Emmet, para. 16.011.

31. It is common in Hong Kong for a piece of land to be developed into multi-storey building(s). When the individual units of the building(s) are sold to individual purchasers, it is common for the developer to divide the holding in the land into nominal parts or shares. An appropriate number of these parts or shares will be allocated to each unit to be sold and these parts or shares will be assigned to the purchaser(s). As against the outside world (and the developer vendor), each purchaser will be a co-owner of that piece land holding a number of equal undivided parts or shares in that land.

32. The relationship among the co-owners themselves is commonly regulated by:-

(a)	the individual conveyancing documents executed by the developer with the respective purchasers;
(b)	in addition to (a) above, a deed of mutual covenants executed by all the purchasers and a clause in the assignment documents stating that they were subject (among other things) to that deed of mutual covenants;
(c)	(apart from the deed of mutual covenants) statutory provisions, especially those in the Building Management Ordinance, Cap. 24.

33. In view of the above matters, I consider that Clauses 2 and 6 and Schedule 3 of the Agreement to be only "covenants for title" when these provisions stated that the Plaintiff has the exclusive right "to hold use occupy and enjoy ALL THOSE A09 on the FOURTH FLOOR and ROOF TOP PORTION A09 ... ". They were only intended to regulate the relationship between the Plaintiff and the other co-owners of the same piece of land.

34. I therefore do not accept the arguments of the Plaintiff's counsel that the Defendant had breached these terms because:-

(a)	the Roof Top was not capable of reasonable usage and enjoyment: para. 8 of the Plaintiff's closing submissions;
(b)	the Roof Top should not be dangerous: para. 8(a) of the Plaintiff's closing submissions;
(c)	the Roof Top has no fences to demarcate the Plaintiff's portion, and was not physically partitioned to prevent access by others: para. 8(b) of the Plaintiff's closing submissions;
(d)	the "trap door" of the Roof Top was too heavy: para. 8(c) of the Plaintiff's closing submissions;
(e)	the "trap door" of the Roof Top was unlocked at any time: para. 8(d) of the Plaintiff's closing submissions.

35. This is because:-

(a)	the clauses relied upon were not intended to relate to "reasonable" usage and enjoyment. First, as stated above, the clauses were "covenants for title" and not provisions relating to the quality (or usage) of the property conveyed. Those matters are regulated (if at all) by other contractual provisions (whether express or implied);
(b)	secondly, such (or similar) kind of clauses is commonly found in conveyancing documents in Hong Kong. Such contention would render the meaning of similar clauses uncertain because conveyancers could not have intended that the clauses should carry different meanings for different premises. For example, the "reasonableness" of the usage and enjoyment of a roof top can be quite different from that of a bedroom, a toilet or a kitchen in a domestic unit, and may be even more different from that of a factory unit, a warehouse unit or an office building;
(c)	thirdly, such contention would be quite different from the law relating to when terms are to be implied in a sale of land: see, for example, the discussion on this area in Chitty, para. 13-015 (and 37-072).

36. Plaintiff's counsel correctly did not raise any point regarding the daily operation of the electrically operated hatch door installed in about October, 1997. The day-to-day operation of this hatch door has nothing to do with the Defendant and no valid complaint could have been made against it.

The Plaintiff's Case Based on Implied Term(s)

37. Para. 13-015 (and 37-072) of Chitty stated:-

"It is well established that prima facie upon a contract for sale of a piece of land with a house on it, there is no warranty as to the habitability of the house. The same rule would apply in the case of an uncompleted house, which is the subject-matter of a sale, where the structure stands at the time of the sale. But where the vendor sells a piece of land and covenants to build or complete a house on it, there is, at common law, an implied term ... that the house will be reasonably fit for human habitation when built or completed" (underline supplied).

38. I find that the Agreement was a one where the Defendant "sells a piece of land and covenants to build or complete a [building, or buildings] on it" because it was provided in the Agreement inter alia that:-

(a)	the Defendant was obliged under the Government Grant to erect and complete upon the land the "Development": Recital (1);
(b)	"Development" meant the whole of the development then being constructed or to be constructed on the land and intended to be known as "MONTEREY VILLAS (嘉輝花園)": Clause 1(1)(g);
(c)	the Defendant was inter alia to continue the construction of the Development with all due expedition and to complete it in compliance with the conditions of the Government Grant and building plans: Clause 4(1).

39. For the above reasons, I conclude that a term should be implied in the Agreement that the suit property (including the Roof Top) should be reasonably fit for habitation.

40. In my view, the phrase "reasonably fit for habitation" connotes not a type, but a range, of activities. For example, when such a term is implied in relation to a bedroom, the bedroom should be reasonably fit for the range of human habitation activities in connection with a bedroom. The same applies to the respective range of human activities for a kitchen, a balcony or a roof top, although the range of activities for each would be different.

41. In considering this issue, I accept Mr Lam's submission (for the Plaintiff) that it is relevant to take into account that the Roof Top is located on a building which is situated inside a housing development on one of the resort areas in Hong Kong.

42. The Plaintiff testified that she intended to hold barbecue parties on the Roof Top with her acquaintances. I accept this to fall within the range of activities of "habitation" reasonably connected to the Roof Top. I also consider activities like having a cup of tea, having a social chat, enjoying the view nearby and the like on the Roof Top to be activities falling within the same category. As I found earlier, it would be dangerous to have such activities on the Roof Top in its present state. Mr Li for the Defendant in his closing submissions said that the Plaintiff could still, for example, place air-conditioning units or a TV antennae there. Even if Mr Li's argument be correct, the Roof Top is still not reasonably fit for habitation in that it does not allow the Plaintiff to put it to the use referred to above. I therefore find that the Defendant had breached this implied term.

43. The Plaintiff's plea setting out her case based on the implied terms of the Agreement can be found in para. 14 to 16 of the Amended Statement of Claim (quoted in one of the earlier paragraphs under the heading "The Issues"). In essence, the Plaintiff pleaded that the Roof Top was sold "for the use and to the use and could be used occupied and enjoyed exclusively by (or to the exclusive benefit of) the Plaintiff". This phrase closely resembles the phrase "exclusive right and privilege to hold use occupy and enjoy" the suit property used in para. 6, 8 and 13 of the Amended Statement of Claim relating to the alleged breach of express terms of the Agreement.

44. Mr Li objected to the Plaintiff relying on Chitty, para. 13-015 (and 37-072) on the ground that the point was not pleaded in the Amended Statement of Claim. Although there is a close resemblance between these phrases (set out in the earlier paragraph), I consider that the pleader did not intend that the phrase used in para. 14 to 16 of the Amended Statement of Claim (relating to implied terms) to have the same meaning as the similar phrase used in para. 6, 8 and 13 of the Amended Statement of Claim (relating to express terms). Otherwise it would be otiose to plead the implied terms either in addition to or in the alternative to the express terms. I consider that para. 14 to 16 of the Amended Statement of Claim was a plea (although not using the exact words used in Chitty) of an implied term of reasonable fitness for habitation. This conclusion is further confirmed by para. 11 to 13 of the Plaintiff's closing submissions and Mr Lam's oral closing submissions.

45. Even if those paragraphs of the Amended Statement of Claim did not cover the implied term referred to in Chitty, I would have given leave to the Plaintiff to re-amend her Statement of Claim to set out such a plea. This is because:-

(a)	the plea is only a point of law;
(b)	in any event, no irreparable prejudice would thereby be caused to the Defendant which could not have been compensated for by costs.

Mr Li objected to any leave being given to the Plaintiff because:-

(a)	the plea is useless;
(b)	any such application would be unduly late;
(c)	he was deprived of an opportunity to research into the meaning of "reasonably fit for habitation" and to adduce evidence regarding this.

46. By reason of the matters set out above, I do not agree with Mr Li's point (a) above. As regards his point (b), I do not find that the Defendant would suffer irreparable prejudice despite the lateness. As regards his point (c), I do not understand Mr Li to be asking for a short adjournment of, for example, half an hour or so. He was asking for a general adjournment to another date. I do not consider this to be necessary because "habitation" is an ordinary English word which in substance means "living" at that location. I also consider evidence to be unnecessary because the matter could be properly dealt with by counsels' submissions.

Other Matters

47. As stated above, apart from the English description of the suit property, there is also a Chinese description. This appears in the "Memorandum of Sale" in the box for "The Premises for Sale and Purchase" (in Chinese "買賣之樓宇"). No reliance has been placed by the Plaintiff on the Chinese description, whether in the pleadings or in the submissions. No arguments have therefore been advanced by the parties regarding this aspect. For the avoidance for doubt, when I considered this action, this aspect has not been taken into account.

48. I shall nevertheless, for completeness' sake, proceed to consider its significance. The Chinese description included a reference to "天台", which has been called "the Roof Top" in these proceedings. The word "台" was defined in The Pinyin Chinese-English Dictionary (商務印書館 "漢英詞典") as a "platform; stage; terrace". The Chinese words "天台" literally mean "sky terrace". The words "天台" are commonly used in Hong Kong to refer to the roof top of a building with fencing surrounding it. Conversely, a roof top without any fencing would in ordinary language (in Chinese) be called a "屋頂" or "樓頂".

49. Further, in the "Memorandum for Sale", there is another box for "Saleable Area" (in Chinese "實用面積"). The respect areas of the "Residential Unit" (or "住宇單位") and "Flat Roof/Roof Top" (or "平台 / 天台") were set out there.

50. It is quite arguable as to whether the Chinese description "天台" (with its commonly adopted meaning in Chinese) and the references in Chinese such as "實用面積" (meaning "Area for Use"), or "平台 / 天台" (meaning "Terrace / Roof Terrace") in the "Memorandum of Sale" are relevant to the construction of the provisions in the Agreement because of the observation of Lord Hoffman in the I.C.S. case. ([1998] 1 W.L.R. 896):-

"The meaning which a document ... would convey to a reasonable person is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even .... to conclude that the parties must, for whatever reason, have used the wrong words or syntax ...

The 'rule' that words should be given their 'natural and ordinary meaning' reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes ... On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had ... " (at p. 913C-F) (underline supplied).

51. If they are relevant, the reference in English to the "Roof Top" in the contractual documents should (at least arguably) be construed to mean "roof terrace" because the Chinese words "天台", rather than "屋頂" or "樓頂" (both meaning "roof top"), were used. Hence, according to the express terms of the Agreement (Clauses 2 and 6 and Schedule 3), the Defendant was obliged to convey to the Plaintiff the unit at Flat A09 and a roof terrace which was fenced. If the Defendant failed to do so, it would have been in breach of these terms.

52. As stated above, the Defendant argued that by reason of the Plaintiff's failure to inspect the suit property, or to raise any reasonable requisitions, the Defendant is entitled to rely on the doctrine of caveat emptor: para. 4(d) of the Amended Defence. In fact, according to Chitty, para. 13-015 (quoted earlier under the heading "The Plaintiff's Case Based on Implied Term(s)), this doctrine does not depend on whether the Plaintiff could have inspected the suit property or could have raised requisitions. It was not argued that at law the Plaintiff has a duty to inspect the suit property, or that there was an implied term in the Agreement that such a duty exits. Even if this had been raised, I would not have found that such argument would succeed. Waiver was not raised as an issue either.

53. No argument has been advanced regarding whether the Agreement had merged with the assignment of the suit property. I consider counsel was correct not to do so because the merger of a conveyancing agreement with the assignment is only relevant to the implied terms about title to land (see Emmet, para. 8.056). It is irrelevant to the issues in this action because the terms relied upon by the Plaintiff (relating to the construction or completion of the suit property) was not intended to merge with the assignment.

Conclusion on Liability

54. For the above reasons (except those set out under "Other Matters" which, as stated earlier, were not taken into account), I find in the Plaintiff's favour on liability.

Quantum

55. There is a difference between the opinion of the Plaintiff's valuation expert, Ng, and that of the Defendant's valuation expert, Mak. Ng opined that the difference in value between the suit property with a usable Roof Top and one without is to be measured by using (a) the comparative method and (b) the adjustment method (see p. 9 of Ng's report).

56. In relation to the comparative method, Ng included in his assessment comparables in 2 nearby housing developments, Sea Crest Villa and Tung Wan Villa. In relation to the adjustment method, Ng concluded that, as at 28 May, 1997 (the date of the Agreement):-

(a)	the open market value of the suit property without the exclusive use and occupation of the Roof Top was $1,630,000;
(b)	the open market value of the suit property with exclusive use and occupation of the Roof Top was $1,830,000.

Further, the open market value of the suit property without the exclusive use and occupation of the Roof Top as at 30 October, 1998 was $920,000.

57. On the other hand, Mak considered that the units of Sea Crest Villas and Tung Wan Villas could not properly be used as comparables since the 2 developments do not have the facilities (such as a shopping complex) offered by "Monterey Villas". He used the units within the same development as his comparables. However, in assessing the difference in the value of the suit property with and without the exclusive use and occupation of the Roof Top, Mak refrained from assigning an open market value to it. The reason he gave for refraining to do so was that there was a special condition prohibiting the Roof Top from being accessible (and therefore usable or occupiable).

58. I prefer the evidence of Ng to that of Mak. Merely because there was a special condition prohibiting the Roof Top from being accessible should not prevent the valuer from attempting to give an opinion on the value of the property. The approach of Mak renders his opinion over this aspect to be of no assistance to the Court. I also do not agree with his opinion that merely because there was a quality difference between the units of "Monterey Villas" and those of the 2 nearby developments, the latter should be completely ignored.

59. Ng has fairly accepted in his testimony that there was a margin of error in his valuation in the range of 5 to 10%. Taking into account Mak's criticism that the quality of the units of Sea Crest Villas and Tung Wan Villas is inferior to that of those in "Monterey Villas", I consider a 10% reduction should be made to the $200,000 difference in the value of the suit property, as assessed by Ng. The amount awarded is therefore $180,000. Interest on the Judgment sum is at judgment rate from the date of Writ to the date of Judgment.

60. The Defendant submitted that the proper date for assessing the Plaintiff's loss should be the date of breach, that is, 17 July, 1997: para. 9.2 of the Defendant's closing submissions. The Defendant further argued that the Plaintiff had failed to adduce any evidence on this point. While this may be true as a fact, I do not consider much weight should be attached to them. First, the time difference between 28 May, 1997 and 17 July, 1997 was relatively small. Secondly, the reports of both sides' experts have provided information on the market condition around that period. It can be inferred from the information provided that the difference in value (in other words, the amount of loss) remained about the same from about May, 1997 to about July, 1997.

Costs Order Nisi

61. The parties agreed that it is appropriate to include a costs order nisi in this Judgment pursuant to R.H.C. Ord. 42 r. 5B(6). I make a costs order nisi that the costs of this action are to be paid by the Defendant to the Plaintiff to be taxed if not agreed.