UNION EAGLE LIMITED v. GOLDEN ACHIEVEMENT LIMITED

IN THE COURT OF APPEAL

1995, No. 119

(Civil)

- Headnote-

Agreement for sale and purchase of flat - Completion at vendor's solicitors' office before 5pm on completion date when balance of purchase money to be paid and vendor to execute assignment in favour of purchaser - Time of essence - Completion varied by solicitor's undertakings - Purchaser's solicitor's clerk arrived at vendor's solicitors' office 10 minutes late.

Held (Court of Appeal):

(1) Arrangement agreed for completion by solicitors' undertaking did not have the effect of extending time for purchaser to tender balance of the purchase price from 5pm to midnight

(2) (By a majority): The vendor did not waive the time limit of 5pm and was entitled to reject the tender of the money at 5.10pm, rescind the agreement and forfeit the deposit.

(3) (By a majority): There were no grounds for the application of any equitable principle giving relief to the purchaser against forfeiture.

IN THE COURT OF APPEAL

1995, No. 119

(Civil)

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J U D G M E N T

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Litton, V-P:

Introduction

1. This is an appeal from a judgment of Peter Cheung J dated 27 April 1995 whereby he gave judgment for the vendor in a dispute concerning the sale and purchase of a flat on Hong Kong Island. The appellant is the purchaser. The respondent is the vendor.

2. The sale and purchase agreement is dated 1 August 1991 and relates to Flat A, 30/F Block 5 and carparking space No. 23 on level CP5 of Pacific View, 38 Tai Tam Road. The purchase price was $4.2 million, whereof $420,000 was paid by way of deposit and $3.78m remained outstanding to be paid on or before 30 September 1991 the date of completion.

3. Clauses 3 and 4 of the agreement, crucial to this case, provide:

"3. Completion shall take place at the office of Messrs Robert C.K. Tsui & Co., Solicitors on or before the date set out in Part III of the Second Schedule hereto (hereinafter referred to as 'the Completion Date') and before 5.00 p.m. on that day if it is a weekday or before 12:00 noon on that day if it is a Saturday when the residue of the purchase money shall be fully paid and the Vendor and all other necessary parties (if any) will execute a proper assignment or assurance in favour of the Purchaser or his nominee or nominees, sub-purchaser or sub-purchasers of the Property hereby agreed to be sold and purchased to the Purchaser free from all incumbrances.

4. Time shall in every respect be of the essence of this Agreement."

4. Pausing here, if nothing else were said, there can be no doubt that the parties intended that the payment of the balance of the purchase price and the execution of the conveyance by all necessary parties should be simultaneous events and that it should take place before 5pm on 30 September 1991. This conclusion is arrived at not by the application of any principles of "general law" but simply by looking at the parties' agreement.

Completion by undertakings

5. In fact, as often happens, the purchaser through its solicitors did not insist upon the delivery of the executed conveyance simultaneously with the payment of the balance of the purchase price by the purchaser. In a letter dated 20 September 1991 the purchaser's solicitors Messrs F. Zimmern & Co. (F Zimmern), in forwarding to the vendor's solicitors a draft assignment for their approval said:

"...In order to enable you to approve the said Assignment, we send you herewith copy Assignment Memorial No. 4765927 for your ease of reference. Kindly return to us the said Assignment duly approved for our further action at your earliest convenience.

Furthermore, please advise as to which party our cheque for the balance of purchase price should be drawn and (if the case so required) as to how we should split our cheques. We propose to complete by way of solicitor's undertaking. To that end, we send you herewith our draft undertaking letter and should be obliged if you could confirm the same at least 3 working days prior to completion.

Please also note that it is a condition that we will require you not to release the balance of purchase price to your client until vacant possession of the said premises has been delivered by your client to our client."

 

6. In their reply dated 25 September 1991 the vendor's solicitors Messrs Robert C.K. Tsui & Co. (Robert C.K. Tsui) approved the draft letter of undertaking with an amendment. This related to the deletion of a clause requiring the vendor's solicitors to hold the cheques until written confirmation was received that vacant possession had been given to the purchaser. In their letter of 25 September Robert C.K. Tsui asked F. Zimmern to split the balance of the purchase money four ways, including a cheque for HK$2,445,335.80 in favour of a finance company to redeem the property.

7. I pause here to analyse what precisely the solicitors were doing on behalf of their respective clients at this point. The "undertaking letter" was to be signed by F. Zimmern (the purchaser's solicitors) and then delivered by them to Robert C.K. Tsui (the vendor's solicitors) with the four cheques totalling $3.78m on the day fixed for completion. In accepting the cheques, Robert C.K. Tsui, as the vendor's solicitors, would be deemed to have given their undertaking to the following effect: to send to F. Zimmern within 21 days, the assignment as approved and executed by the vendor, and the re-assignment executed by the vendor's mortgagee. There can be no doubt that this is what the parties intended. The undertaking letter ended as follows:

" As the undertaking follows strictly the draft form of undertaking already agreed in correspondence and the amount sent is exactly as per your letter your undertaking will be deemed given."

8. As part of the arrangement, the vendor's solicitors also gave the following undertaking: To forward to F. Zimmern forthwith the keys of the flat or the necessary written authority to collect the keys so that possession could be taken without delay.

The legal effect of the arrangement

9. The effect of the arrangement was plainly this: The vendor was relieved of its obligation to deliver to the purchaser the executed assignment on the day fixed for completion and in substitution the purchaser was to be protected by the undertakings of the vendor's solicitors in terms of the "undertaking letter" approved by them: Undertakings deemed to be given simultaneously with the delivery of the four cheques.

10. Ms Audrey Eu QC, counsel for the purchaser, submits that what F. Zimmern had proposed on 20 September 1991, in forwarding the draft undertaking letter to Robert C.K. Tsui for approval, was in effect to replace the whole of clause 3 of the agreement by the new arrangement: And since the draft started with the words "on behalf of our client, Union Eagle Ltd. and in order to complete the purchase of the above property on 30 September 1991 ("the Completion Date") ...", the time limit of 5 pm had been effectively removed and the parties had the whole of 30 September 1991 to discharge their obligations.

11. The judge rejected this argument. I wholly agree with him.

12. Plainly F. Zimmern never proposed in their letter of 20 September more than to change the mechanism for completion on the part of the vendor. Any suggestion that they were at the same time proposing an enlargement of the time for performance of the purchaser's own obligations by extending the time to tender payment to midnight on 30 September is in my judgment wholly untenable.

13. In terms of clause 3 of the agreement what F. Zimmern proposed in effect was that clause 3 should be varied as if the words "and the vendor and all other necessary parties (if any) will execute a proper assignment or assurance in favour of the purchaser etc" were deleted, and substituted by the vendor's solicitors' undertaking contained in F. Zimmern's letter as approved by them.

14. Time remained of the essence of the agreement - clause 4 - and completion was still to take place before 5pm on 30 September when the balance of the purchase money had to be paid.

How the parties themselves viewed the matter

15. Although I have reached this conclusion, as did the judge, upon a construction of the language used in the letters, the point can be tested by seeing how the respective solicitors viewed the matter at the relevant time. F. Zimmern, as I have already mentioned, never suggested that they were asking on behalf of their client an enlargement of the time fixed for completion and the vendor's solicitors certainly never understood it that way. As the judge found, Robert C.K. Tsui's clerk Miss Chow phoned her opposite number Miss Tin at F. Zimmern's office shortly before noon on 30 September and reminded her that the balance of the purchase money must be received before 5pm on that day, otherwise the vendor would exercise its right to forfeit the deposit and rescind the agreement.

16. In my judgment the time for tender of the balance of the purchase price fixed for 5pm was never varied by the parties.

The messenger was late

17. The judge found as a fact that the purchaser failed to discharge its obligation. F. Zimmern's messenger arrived late at Robert C.K. Tsui's office by 10 minutes. At 5.11pm, as the judge found, the purchaser's solicitors were told that the agreement was rescinded.

Legal consequences

18. Those being the established facts, was the vendor entitled to forfeit the deposit and rescind the agreement?

19. Clause 12 of the agreement provides:

"12. If the Purchaser shall fail to comply with any of the terms and conditions of this Agreement the deposit money and any part payment of purchase price so paid shall be absolutely forfeited as and for liquidated damages (and not a penalty) to the Vendor and who may (without being obliged to tender an Assignment to the Purchaser) rescind this Agreement and either retain the Property the subject of this Agreement or any part or parts thereof or resell the same, either as a whole or in lots, and either by public auction or by private contract, or partly by the one and partly by the other, and subject to such conditions and stipulations as to title or otherwise as the Vendor may think fit. Any deficiency arising from such resale and all expenses attending the same or any attempted resale shall be made good and paid by the Purchaser as and for liquidated damages, and any increase in price realized by any such resale shall belong to the Vendor. This Clause shall not preclude or be deemed to preclude the Vendor from taking other steps or remedies to enforce the Vendor's rights under this Agreement or otherwise. On the exercise of the Vendor's right or rescission under this Agreement the Vendor shall have the right, if this Agreement shall have been registered in the Land Office, to register at the Land Office a Memorandum signed by the Vendor alone to rescind the sale of the Property and to vacate the registration of this Agreement. This clause shall not prevent the Vendor recovering, in addition to liquidated damages, damages representing interest paid or lost by him by reason of the Purchaser's failure."

20. What room is there for the purchaser to argue that the vendor was not entitled to exercise its rights under clause 12?

21. Ms Eu in her submissions for the purchaser emphasized these facts: When the messenger arrived at 5.10pm the vendor had not then formally accepted the purchaser's repudiation, despite a phone call made by Miss Chow to Miss Tin at 1 minute past 5 saying that the messenger had not yet arrived and the vendor reserved the right to forfeit the deposit. Miss Chow was told on the telephone that the messenger was on his way.

22. For my part I cannot see how these facts can help the purchaser. The reservation of the vendor's rights by Miss Chow on the telephone cannot prejudice the vendor's legal position. When the messenger did arrive at 5.10pm, the purchaser was clearly in breach of contract. One minute later, at 5.11pm Miss Chow for the vendor told Miss Tin in effect that the vendor accepted the repudiation. This was clearly in exercise of the vendor's strict contractual rights. Any suggestion that, by the earlier phone call - at 5.01pm - the vendor had waived the 5pm deadline is totally unarguable.

Relief against forfeiture

23. Ms Eu has a fall-back position. She argues that the consequence of allowing the vendor to rescind the agreement is, in effect, the forfeiture of the purchaser's equitable interest in the property pursuant to the agreement. This consequence is, she says, totally disproportionate to the purchaser's "fault": the fact that the messenger bringing the purchase money was 10 minutes late. In these circumstances the court can, Ms Eu argues, do justice between the parties by granting equitable relief against forfeiture and ordering specific performance of the agreement, compensating the vendor by an award of interest on the balance of the purchase price.

24. In considering the court's equitable jurisdiction to grant relief against forfeiture, what needs emphasizing at the outset is this: There is no suggestion here that the vendor has acted in any way to mislead the purchaser or has said anything to cause the purchaser to believe that the strict legal rights under the contract would not be enforced. No suggestion of trickiness or sharp practice has ever been made.

25. All that can be said in the purchaser's favour is that the messenger was only 10 minutes late; that the vendor had not altered its position in the meantime and could have accepted the tender of the purchase money after 5.10pm if it had chosen to do so.

The scope of the court's equitable jurisdiction

26. The scope of the court's equitable jurisdiction in such cases was stated by the Privy Council (per Viscount Haldane) in Steedman v. Drinkle [1916] AC 275 at 279 as follows:

"Courts of Equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even though literal terms of stipulations as to time have not been observed. But they never exercise this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply by providing that time is to be of the essence of their bargain. If, indeed, the parties having originally so provided, have expressly or by implication waived the provision made, the jurisdiction will again attach."

27. This last sentence in Viscount Haldane's judgment is important. A clause making time of the essence, like any other clause in a contract, can of course be waived by the parties, or be varied by agreement, express or implied.

28. Likewise a party can, by the application of the High Trees principle (Central London Property v. High Trees House [1947] 1 KB 130, decided long after Steedman v. Drinkle) be estopped in equity on account of his acts or representations, relied on by the other party, from insisting upon his strict contractual rights. There are then the well-established instances where equity gives relief to a party against forfeiture of his interest: fraud, mistake, accident and surprise have been mentioned in the course of argument. None of these, it is common ground, apply in the present case. Counsel, Ms Audrey Eu QC, would argue for a much broader equitable principle: she suggests that, outside of these well-established categories of cases, there is a broad innominate equitable power: where it would be "unconscionable" or "unconscientious", in all the circumstances, for a party to take advantage of the situation and enforce a forfeiture, the court could grant equitable relief. She refers to the Australian case of Legione v. Hateley (1983) 152 CLR 406 and Stern v. McArthur (1988) 165 CLR 489 and the decisions of this court in Lee Kenny v. Wong Kwok Yan [1994] 2 HKC 309 and China Pride Investment Ltd. v. Silverpole Ltd. [1994] 2 HKC 341. I have derived little assistance from these authorities. The facts were very different.

29. In my judgment the present case affords no occasion for an examination of any broader principle of equity, since the facts of this case lie at the extremity of the spectrum. I note that in Lee Kenny v. Wong Kwok Yan the conduct of the vendor's solicitors had materially contributed to the purchaser's failure to execute the formal sale and purchase agreement and to pay the balance of the deposit on time; and in China Pride Investment v. Silverpole the court had found that the vendor had failed to discharge its own obligation to make completion mutually possible on the day fixed for completion: the purchaser's failure to perform was in that case likewise attributable to the vendor's default. These seem to me to be classic instances where courts have, for a long time, granted relief against forfeiture. I do not understand this court in those two cases to have broken new ground. I note, for instance, the reference in China Pride Investment v. Silverpole at p356 to the earlier case of Ng Chek-lok v. Kiu Wai-ming [1992] 1 HKLR 5 where, at p17 Clough JA referred to "sharp practice" and "trickiness" on the part of the vendor as justifying equitable relief.

30. Nothing of the kind is present in this case.

31. What simply happened was that the purchaser was in default. The vendor considered its position then exercised its contractual rights. Time remained of the essence of the contract. Relief against forfeiture plainly cannot be granted in these circumstances.

32. In considering the exercise of the court's equitable jurisdiction, it may be helpful to recall what Harman LJ said in Campbell Discount Co. Ltd. v. Bridge [1961] 1 QB 431 at 459:

"Equitable principles are, I think, perhaps rather too often bandied about in common law courts as though the Chancellor still had only the length of his own foot to measure when coming to a conclusion. Since the time of Lord Eldon the system of equity for good or evil has been a very precise one, and equitable jurisdiction is exercised only on well-known principles. There are some who would have it otherwise, but as at present advised I am of opinion that, at any rate in the instant case, there is no equitable principle that can be called in aid."

Forfeiture of the deposit

33. The deposit amounting to 10% of the purchase price was forfeited by the vendor.

34. The judge rightly referred to this as a conventional sum, the forfeiture of which has long been held by the court to be justified in the event of breach on the part of the purchaser.

35. I see no grounds for differing from the judge.

Conclusion

36. I would dismiss this appeal with costs.

Godfrey, J.A. :

Introduction

37. I regret that I am unable to agree.

38. There are five issues which, as I see it, fall to be determined on this appeal, and I shall deal with them in turn. As to four of them the differences between us are, I fear, fundamental; but I am happy to record that, as to the first issue, I am in total agreement with my Lord, the Vice-President.

The First Issue

39. The purchaser claims that it had until midnight on 30 September 1991 to perform its obligation to come up with the purchase money; the vendor says that the purchaser was obliged to come up with the money by 5.00 p.m. on that day.

40. The judge decided this issue in favour of the vendor. I agree with the judge and on this issue with my Lord, the Vice-President; for the following reasons.

41. Under the agreement of 1 August 1991, the parties stipulated for a "formal" completion, obliging the purchaser to come up with the money by 5.00 p.m. on 30 September 1991 in exchange for an assignment of the property. The arrangement subsequently made between the parties' solicitors for a "Hong Kong style" completion modified this, in respect of the vendor's obligation to provide an assignment of the property in exchange for the money, by substituting a series of undertakings by the vendor's solicitors in place of that obligation. These arrangements were not expressed in terms which modified the purchaser's obligation to come up with the money, certainly not in terms which extended by seven hours the time originally agreed by which the purchaser had to do so. I can discern from the facts no warrant whatever for implying any such modification. The original agreement stands modified, as it seems to me, only so far as the new arrangements expressly provided. So far from it being a necessary implication that the parties intended, by agreeing on a "Hong Kong style" completion, a relaxation by seven hours of the purchaser's obligation to come up with the money by 5.00 p.m. on 30 September 1991, I think that, on the contrary, the parties would have been astounded if the officious bystander had suggested that the new arrangements should so provide. In the absence of any express, or implied, variation of the terms of the purchaser's obligation to come up with the money by 5.00 p.m. on 30 September 1991, it remained the purchaser's obligation so to do.

The Second Issue

42. Once the first issue is decided in favour of the vendor, it follows that, in failing to come up with the money by 5.00 p.m. on 30 September 1991, the purchaser was in breach of the agreement of 1 August 1991. Since the parties had expressly agreed that time was in every respect to be of the essence of their agreement, it also follows that this failure on the part of the purchaser was a breach of such a nature, if not remedied in time, as would entitle the vendor, at law, to call off the contract. However, the vendor did not do so until after the purchaser, although late, had tendered performance.

43. In these circumstances, the purchaser claims that the vendor was not entitled to call off the contract as it purported to do.

44. The vendor says that it was so entitled. The vendor says that it does not matter whether, between 5.00 p.m. and 5.11 p.m., when the vendor purported to accept the late tender as "repudiation" by the purchaser, the agreement was still afoot. During those 11 minutes, says the vendor, nothing occurred which had the effect of depriving the vendor of its right to accept the "repudiation" of the agreement by the purchaser.

45. Upon this issue, I am in favour of the purchaser.

46. A breach which justifies the injured party to a contract in calling it off does not automatically determine the contract: see Howard v. Pickford Tool Co. [1951] 1 KB 417, where Asquith L.J. said this (at p.421):

"An unaccepted repudiation is a thing writ in water and has no value to anybody: it confers no legal rights of any sort or kind."

47. Where time is of the essence, a contract will be discharged by delay if (a) one party fails to perform his obligation under it within the time allowed and (b) at a time while that party is still in default, the other party accepts the breach as putting an end to the contract. Both elements are essential.

48. Where the injured party treats the contract as continuing, the contract remains in existence for the benefit of both parties. The wrongdoer is entitled to complete the contract by performance, notwithstanding his original breach. In our case, the vendor did not purport to accept the purchaser's "repudiation" of the contract until 5.11 p.m., after the purchaser had tendered the purchase money to the vendor. In the meantime, the vendor had kept the contract alive. I would have been of this opinion even if the vendor, having learned of the purchaser's "repudiation" at 5.01 p.m., had done nothing except wait until 5.11 p.m.; but, in fact, the vendor expressly reserved its rights, a course of conduct consistent only with the continuance of the contract, not with its determination.

49. For these reasons I am, as I have said, in favour of the purchaser on the second issue.

The Third Issue

50. If I am right in the view I have expressed (which is not, apparently, shared by my Lord, Litton, V.P.) that the second issue falls to be determined in favour of the purchaser, then this appeal has to be allowed without further ado. It will have been the vendor who, by calling the contract off at 5.11 p.m., repudiated the contract, not the purchaser, and the purchaser would plainly be entitled to a decree of specific performance. But, if I am wrong, and the vendor was still entitled to treat, at 5.11 p.m., the failure of the purchaser to come up with the money by 5.00 p.m., as a repudiatory breach, notwithstanding the purchaser's tender of the money at 5.10 p.m., then the third issue arises, as follows.

51. The purchaser says that, although, at law, the vendor has effectively forfeited the purchaser's equitable interest in the property (and its deposit), the purchaser is nevertheless entitled to ask the court, in the exercise of its equitable jurisdiction, to relieve the purchaser from the forfeiture and to grant a decree of specific performance in its favour.

52. The vendor, relying on the Privy Council case of Steedman v. Drinkle [1916] 1 AC 275, disputes this. In particular the vendor relies on the following passage in the opinion of their Lordships delivered by Viscount Haldane, at p.279, already quoted by my Lord, the Vice-President, but worth, I think, repeating:

"Courts of equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even though literal terms of stipulations as to time have not been observed. But they never exercise this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply by providing that time is to be of the essence of their bargain." [emphasis added]

53. The first sentence of this dictum breaks no "new ground"; indeed it merely reflects the basic principle on which Equity has proceeded from its inception. It is however clear that the second sentence of this dictum goes too far. There are many cases in which courts of equity have made a decree of specific performance, even where time has been made of the essence, at the instance of a purchaser who has proved to the satisfaction of the court that the conduct of the vendor has been unconscionable. It is sufficient to refer to the local case of Lee Kenny and another v. Wong Kwok Yan [1994] 2 HKC 309, in which this court held that it was unconscionable, in all the circumstances of that case, for the vendors to insist on termination of the contract and forfeiture of the purchaser's deposit notwithstanding the time was of the essence of the contract. If however the dictum inSteedman v. Drinkle (supra) is read by construing "never" as "hardly ever", as I think it ought to be, there is no inconsistency between that case and the local case.

54. I would frame the principle thus: the question, in any particular case, is whether, in purporting to terminate the contract, and forfeiting the purchaser's equitable interest in the land and the purchaser's deposit, the vendor, by insisting on his strict legal rights, has acted unconscionably. An alternative formulation in Spry's Equitable Remedies 4th ed. (1990) at pp.208, 209 reads as follows :

"The governing principle is that time ceases to be of the essence in equity if circumstances arise that render it unjust that it should be so regarded."

55. The author, happily still alive, is a distinguished master of modern Equity.

The Fourth Issue

56. If I am right so far, and there are circumstances in which the court will, in the exercise of its equitable jurisdiction, relieve the purchaser from forfeiture of his equitable interest in the land, and of his deposit, and grant specific performance in his favour, the question becomes : In what sort of circumstances will the court so exercise this jurisdiction?

57. There is no doubt that relief against forfeiture will readily be given, and specific performance granted, where the vendor has effectively caused or contributed to the purchaser's breach of contract, and where the vendor seeks to take unconscientious advantage of benefits that would fortuitously accrue on forfeiture of the purchaser's interest: see, for a modern example, Legione v. Hateley (1983) 152 CLR 406. But our case is not one in which the vendor in any way caused, or contributed, to the purchaser's failure to come up with the money by 5.00 p.m. on 30 September 1991. In this respect, the vendor here is entirely innocent. In the case last cited, Mason and Deane JJ were of the view that unconscionable conduct by the vendor was crucial to the grant of relief : see at p.449. On the other hand, Gibbs CJ and Murphy J expressed the view that relief might be granted simply because forfeiture would result in the exaction of a harsh and excessive penalty for a comparatively trivial breach : see p.429. This difference of opinion was canvassed in Stern v. McArthur (1988) 165 CLR 489. There, the majority, Deane, Dawson and Gaudron JJ, affirmed that it was not necessary that there be unconscionable conduct of an exceptional kind before equity would relieve against the forfeiture. Mason CJ, on the other hand, in a dissenting judgment, held that to extend relief against forfeiture to instances in which no exceptional circumstances were established would be to eviscerate "unconscionability" of its meaning.

58. This is obviously difficult territory; but I reach the conclusion that there is no reason why the jurisdiction of equity should be trammelled into a channel whereby it relieves against one form of unconscionability but not another.

59. I would hold that, where the circumstances establish that it would be unjust, and inequitable, to allow the vendor to rely on the forfeiture and to resist specific performance, the court of equity will intervene at the suit of the purchaser to restrain him from doing so. There is, I believe, nothing novel about this, but even if there were I would not shrink from so holding. As Harman, J. (from whose judgment in Campbell Discount Co. Ltd. v. Bridge [1969] 1 QB 445 my Lord, the Vice-President, has quoted) once said : "Equity is not to be presumed to be of an age past child-bearing." Of course, the particular jurisdiction assumed by Equity to relieve against cases of fraud, mistake, accident and the like is very old and very well established; but it has its origin in the foundation on which Equity rests, that the common law offers insufficient protection against unconscionable conduct. Of course, it is not unconscionable for you to seek to hold the other party to your contract to his bargain simply because it has turned out better for you that it has for him (that is what is meant when it is said that "Equity mends no man's bargain"). But it is unconscionable for you to take an unfair advantage of him, because for example, of some slight or trivial beach of contract on his part, not going to the substance of the bargain. This latter sort of case is the exemplar for the intervention of Equity.

The Fifth Issue

60. If, then, it is permissible to look at the matter in the round, and not to concentrate simply on the question whether the vendor has caused or contributed to the breach by the purchaser, the issue arises whether, in the present case, the circumstances are such as to justify the intervention of equity. The purchaser says that they are. The vendor says that they are not.

61. The purchaser points out that the "Hong Kong style" completion gives the vendor 21 days to perform his obligations, while the purchaser is given no such indulgence; that the vendor did not purport to terminate the agreement until after the purchaser had tendered the money; that the tendered performance was only a few minutes late; that it was a breach trivial and slight in nature; that it was inadvertent; that the consequences of the breach, if the vendor is right, will be out of all proportion to the injury done to the vendor by the late tender of the money, in that the purchaser will lose its equitable interest in the property and its deposit of HK$420,000; that this is a windfall, an adventitious advantage to the vendor; and that the vendor has suffered no prejudice whatever by reason of the purchaser's few minutes' delay.

62. On this issue, too, I am in favour of the purchaser. How it can be considered just, or equitable, to allow the vendor to forfeit the purchaser's equitable interest in the property, and its deposit of $420,000, in all these circumstances, passes my comprehension. In my judgment, the case cries out for the intervention of equity, to restrain the vendor from acting in this way, and to compel performance of the contract.

Conclusion

63. This is an exceptional case. At least, I hope it is. If it is the common practice of vendors to seek to take advantage of a few minutes' delay by solicitors (or their messengers) to call off the bargains they have made with their purchasers, then it is past high time that for this court to step in to put a stop to it. I would, accordingly, allow this appeal, but I understand Ching J.A. to be of the same opinion as my Lord, the Vice-President. I must say with Russell J. in Broome v. Agar (1928) 138 LT 698 at p.703 :

"I need hardly add that I differ from the other members of this Court with regret, more particularly because on the present conflict between law and equity, equity does not prevail."

Ching, J.A. :

64. For the reasons given by the learned Vice-President I too would dismiss this appeal.

Litton, V-P:

65. This appeal is by a majority dismissed. The costs follow the event.