Super Mate Ltd. v. Tsun Ka Yam and Others

HCA 4213/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4213 OF 1999

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ASSESSMENT OF DAMAGES

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1. The plaintiff was the developer of a residential block known as Bellevue Place, situated at U Lam Terrace, Mid Levels, Hong Kong.

2. On 13 October 1997 the defendants entered into agreement (hereinafter called the 'Agreement') with the plaintiff to buy Flat D on the 9th floor of Bellevue Place (hereinafter called 'Flat 9-D') at the purchase price of HK$4,398,000 with the payment schedule agreed as follows:-

(a) a deposit of HK$439,800 to be paid upon the signing of the agreement;

(b) further sums of deposit, at HK$219,900 for each payment, to be paid on 2 Jan 1998, 1 April 1998, 2 July 1998, 2 October 1998; and

(c) the balance of HK$3,078,600 to be paid within 14 days of the purchaser being notified in writing by the vendor that the occupation permit relating to the premises has been issued.

3. The defendants duly paid the first sum of deposit of HK$439,800 upon the signing of the agreement on 13 October 1997. Since 2 January 1998 the defendants defaulted payment of the balance of outstanding payments despite repeated demands made by the plaintiff. On 14 August 1998 the plaintiff exercised its right under clause 19 of the Agreement and gave notice to the defendants to terminate the agreement on the same day.

4. On 27 November 1998, the plaintiff exercised its power of re-sale pursuant to clause 19 of the Agreement and sold the property to a 2nd buyer on 4 December 1998 for HK$2,423,000. Agency fees in the sum of HK$36,345 was incurred in effecting the re-sale. The surveyor Mr. Samuel Young testified that the market value of the said property in November 1998 was about HK$2,390,000.

5. The plaintiff took out the present writ of summons for recovery of damages on 12 March 1999 and obtained interlocutory judgment on liability on 22 June 1999 including forfeiture of the HK$439,800 deposit and damages to be assessed.

6. A bankruptcy order was made against the 2nd named defendant Yu Yuen Han on 12 August 1998. The claim against the 3rd named defendant Chan Yuen Yee Ada was settled between the plaintiff and the defendant with the payment of HK$900,000 made by the 3rd named defendant by 6 equal instalments of HK$150,000.

7. As a result of the defendants' breach, the plaintiff suffered the following loss of profits:-

(a) 3 outstanding instalment payments due and payable on 2 January 1998, 1 April 1998 and 2 July 1998 in the total sum of HK$659,700 (3 x HK$219,900 = HK$659,700) .

(b) Loss of bargain of HK$875,500 (purchase price of the property on 13 October 1997 at HK$4,398,000 - HK$439,800 deposit paid by the defendants - awards of HK$659,700 instalments outstanding - HK$ 2,423,000 re-sale price of the property on 4 Dec 1998).

(c) Agency fees in the sum of HK$36,345 to effect the re-sale.

8. Credit ought to be given for the payment of HK$900,000 made by the 3rd named defendant, with the first payment of HK$150,000 made on 1 September 1999.

9. Contractual interest in the sum of HK$29,379.23, at 2% above the prime rate specified by the Hongkong and Shanghai Bank was chargeable pursuant to clause 3(v) of the Agreement, for the 3 outstanding instalment payments totally HK$659,700 from the respective days of default until the determination of the Agreement on 14 August 1998.

10. Judgment is awarded to the plaintiff against the 1st named defendant in the sum of HK$671,545 (loss of bargain in the sum of HK$875,500 + HK$659,700 instalment payments due and payable + agency fees in effecting re-sale of the property in the sum of HK36,345 - payment of HK$900,000 made by the 3rd defendant) and contractual interest of HK$29,379.23 in respect of the outstanding instalment sum of HK$659,700 till 14 August 1998.

11. The plaintiff also asked for the award of commercial interest from 15 August 1998 to the date of judgment in respect of the plaintiff's loss. Ever since the decision of Komala Deccof [1984] HKLR 219 it was conventionally accepted that 1% above prime would be the commercial rate of interest to be awarded in contractual damages. However, in light of the present economic climate, mortgage loans can often be obtained at 2-3% below prime. I am of the opinion that the award of prime rate is more than equitable to cover the loss of profit situation.

12. From the Land Registry record the occupation permit of the building was not issued until 30 August 1999. In accordance with the payment schedule in the Agreement the earliest date that the plaintiff would be entitled to claim for the balance of the purchase price would be at the expiration of 14 days from the issuance of the occupation permit, i.e. on 15 September 1999. Commercial interest at the prime rate specified by the Hong Kong and Shanghai Banking Corporation on the said sum of HK$671,545 is awarded from 15 September 1999 until judgment.

14. Judgment interest on the said sum of HK$671,545 accrues from the date of judgment at judgment rate until payment.

15. I also award costs of this assessment hearing to the plaintiff against the 1st named defendant, to be taxed if not agreed. There is a slight intricacy in the argument about the award of commercial interest, I accede to the plaintiff's application for the granting of certificate for counsel for the present assessment hearing.