GREAT BILLION ENTERPRISES LTD. v. CHAN LIN YING

HCA9158/1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.9158 OF 1998

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J U D G M E N T

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1. These proceedings arise out of the sale and purchase of a non-domestic property known as G/F, No.59 Tai Po Road, Kowloon ("the Property") between the plaintiff and the defendant.

Background

2. Much of the facts leading to the proceedings is not in dispute and is set out below.

3. By an assignment dated 17 September 1985, the defendant became the registered owner of the Property. The Property consists of a covered area forming part of the ground floor of the building standing on No.59 Tai Po Road ("the Shop") and also a courtyard ("the Yard").

4. Since 1992, the defendant has let the Property to a Mr Tse who operated a restaurant on it called Kei Hing Coffee and Cake Shop (奇興茶餐廳)。 At the material time, Mr Tse occupied the Property under a four years tenancy agreement dated 20 October 1997. Upon the expiration of the tenancy agreement, the defendant continued to let the property to Mr Tse and he is still operating the restaurant at the Property.

5. By a Provisional Sale and Purchase Agreement dated 1 November 1997 ("the Provisional Agreement"), the defendant agreed to sell and one Well Victory Enterprises Limited agreed to purchase the Property for $7,350,000 subject to the tenancy of Mr Tse.

6. By a letter of nomination dated 6 November 1997, Well Victory Enterprises Limited nominated the plaintiff to complete the purchase of the Property.

7. The plaintiff and the defendant signed the formal Sale and Purchase Agreement on 17 November 1997 ("the Agreement"). Pursuant to the terms of the Provisional Agreement, the plaintiff paid an initial deposit of $200,000 and a further deposit of $535,000, totalling $735,000, to the defendant.

8. The Agreement contains the following terms that are of relevance to these proceedings:

(1) Completion is to take place on or before 18 August 1998 : clause 3(a) and Part IV of the First Schedule.

(2) The defendant shall give and prove good title to the Property pursuant to section 13 of the Conveyancing and Property Ordinance : clause 6.

(3) Any requisition or objection in respect of title shall be delivered in writing to the defendant's solicitors within seven working days after receipt of title deeds and documents by the plaintiff's solicitors : clause 7(a).

(4) The Property is sold on an "as is" basis : clauses 13, 20(a).

9. On 15 April 1998, the plaintiff's then solicitors, Messrs Yaddy Cheung & Co. ("YCC") wrote to the defendant's then solicitors, Messrs Yeung & Chan, enclosing a surveyor's reported dated 2 April 1998 prepared by Mr Terence K.H. Kwan ("Mr T.Kwan") of Ong's Strategic Surveyors. Principally, the report of Mr T. Kwan states that :

(1) The Property had on it illegal unauthorized alterations and additions, namely,

(a) Removal of the load-bearing wall separating the Shop and the Yard.

(b) Erection of a water closet at the rear part of the Yard.

(c) The Yard was covered with timber boards supported by cross-hatched steel bars and the space above the timber boards was used for storage.

(2) The Yard constitutes approximately 30% of the whole area.

(3) The alterations and additions contravened the Building (Planning) Regulations and section 25 of the Buildings Ordinance.

10. Relying on the report, YCC contended in the latter that there was a blot on the title and the title became defeasible since the Building Authority could issue an order under sections 24(1) and 25 of the Buildings Ordinance. YCC further contended that there was a misrepresentation of the area of the Property through non-disclosure of the illegal extension. The plaintiff by the letter claimed to rescind the Agreement on the basis of defective title and non-disclosure of material information.

11. By a letter dated 18 April 1998, the defendant's present solicitors, Messrs Chan & Partners ("CP"), gave notice that it accepted the plaintiff's recission, which constituted a wrongful repudiation, and further forfeited the deposits paid by the defendant. CP further raised the point that it was premature for the plaintiff to conclude that any alleged defect in the title could not be rectified, given that completion was four months away. CP also complained that the plaintiff had not afforded the defendant an opportunity to answer the allegation as to defective title by properly raising requisition.

12. On 27 May 1998, the defendant registered in the Lands Office a memorandum of determination of the sale under the Agreement.

The action

13. On 5 June 1998, the plaintiff issued the writ herein. The plaintiff's claim, as appears from the Amended Statement of Claim, is twofold. Firstly, the plaintiff claims that the defendant is in breach of clauses 6 and 13 of the Agreement in that she could not possibly have given a good title of the Property to the plaintiff, and also the Property could not be conveyed on an "as is" basis because the defendant could not possibly have conveyed the floor area represented by the illegal alterations referred to in Mr T. Kwan's report. Secondly the plaintiff claims that the defendant had by conduct misrepresented the floor area of the Property. Both the claim for failure to convey the Property on an "as is" basis and the claim in misrepresentation are not pursued at the trial.

14. The plaintiff seeks a number of declaratory relief, the return of the deposits paid, reimbursement of the commission paid to Centaline Property Agency Limited and the costs of investigating the title. As to the last item, the plaintiff no longer pursues it at the trial for the reason that the documents evidencing payment to Mr T. Kwan had been lost. On the commission of the agent, the plaintiff's position at the trial is that the commission remains unpaid and the relief is maintained on the basis that there is a contractual obligation to pay.

15. In the Defence and Counterclaim, the defendant denies breach of the Agreement and misrepresentation. The defendant avers that the plaintiff's recission was wrongful and that the defendant's obligation was to give good title at completion and the plaintiff's wrongful repudiation had precluded her from doing so. The defendant further counterclaims for declaratory relief and damages represented by the commission paid to the agent, the conveyancing costs and deficiency in price on resale of the Property.

16. In the Reply and Defence to Counterclaim, the plaintiff avers, inter alia, that the defendant is bound to give and prove good title prior to completion. It does not appear from counsel's submissions at the trial that this position is maintained. Counsel has submitted on the basis that the defendant's obligation to prove good title arise at completion.

The issues

17. The core issue that falls for determination is whether the plaintiff was entitled to rescind the Agreement before the date of completion. This in turn calls for determination of the following sub-issues, namely,

(1) Whether there were unauthorized structures or alterations on the Property; and

(2) If so, whether as a result of the existence of the unauthorized structures or alterations, the defendant could not possibly have given a good title to the Property upon completion.

18. Depending on the determination of the core issue, issues will arise as to what is the relief to be granted to the successful party.

The evidence of facts

19. The plaintiff called two witnesses of facts. The first is Mr Thomas Mok ("Mr Mok"), a director of the plaintiff and also Well Victory Enterprises Limited. The other one is Mr Fok Shiu Yuen ("Mr Fok"), formerly an agent of Centaline Property Agency Limited and who handled the sale in question.

20. Mr Mok gave evidence that he had visited the Property twice before the Provisional Agreement was signed. On the first occasion he went by himself for the purpose of confirming the location of the Property. He went as a customer of the restaurant and during the visit he had gone to the toilet and taken a look at the Yard. On the second visit, he was accompanied by Mr Fok. The main purpose of the occasion was to verify that he had gone to the right location and also to ascertain whether the business of the restaurant was as good as the first visit. During this second visit, Mr Mok made a counter-offer on the price and handed to Mr Fok a cheque for the initial deposit, which was to be forwarded to the vendor should there be an agreement on the price. Mr Mok denied that the plaintiff's decision to rescind was related to the falling property market.

21. Mr Fok's evidence does not add significantly to the facts of the case, save that he confirmed that Well Victory Enterprises Limited had not paid the commission due under the Provisional Agreement. He was however not sure whether the defendant had paid $22,000 to Centaline Property Agency Limited in accordance with the Provisional Agreement.

22. The defendant also gave evidence. She stated that she had no knowledge of any unauthorized structures on the Property and she had never received any warning or enforcement notice from the Building Authority. Although she said in her witness statement that the female toilet was erected by the tenant, Mr Tse, her evidence in court is that there was already a toilet at the Yard when she purchased the Property, which was then used as a hair salon, and she did not know who caused it to be built. The defendant also testified that she had already paid $22,000 agency commission and that up to the date of her witness statement, i.e. October 1998, the highest offer she had received for the purchase of the Property was $4.3 million.

The expert evidence

23. The plaintiff had called two experts, being Mr T. Kwan, who is a surveyor, and Mr Daniel Tong ("Mr Tong"), an architect.

24. Mr T. Kwan testified that he went on a site inspection in about the end of March 1998. He did not at the time have access to either the building plan or the updated building plan of the Property and he relied on a floor plan, which, as subsequent events unfold, was outdated. He accepted that he had made a mistake in the April 1998 report when he said that there was an unauthorized removal of a load-bearing wall. The removal of the wall was authorized and the wall in question was not a load-bearing wall. Additionally, the Building Authority had given approval for part of the Yard to be covered.

25. Leaving aside the two errors he made in the report, Mr T. Kwan maintained that there were other unauthorized alterations on the Property, consisting of the female toilet and the cross-hatched steel bars with timber boards and concrete on them. In addition, part of the Yard was used as a kitchen, which gave a misleading impression of the size of the Shop and had inflated the value of the Property.

26. In my judgment, Mr T. Kwan's evidence is, to say the least, unreliable. Although he said he had spent 45 minutes at the Property, his evidence does not suggest that he had made a thorough or proper inspection. Given his years of experience as a surveyor, it is surprising that he would not have doubted the correctness of the floor plan he had, having regard to the differences between the actual physical layout of the Shop and the Yard and the layout depicted on the floor plan. His explanation that because Mr Mok of the plaintiff required his report urgently, he had rendered his opinions without calling for or waiting for the building plans. This is hardly satisfactory. There is no reason offered as to why he could not have reserved his opinions or qualified his conclusions when he gave the report. The assertion of the existence of unauthorized structures in the context of a conveyancing transaction is not a trivial matter. As an experienced surveyor, Mr T. Kwan must have appreciated the significance of the opinions that he was proffering. The cavalier approach adopted, among other things, must bring into doubt the inherent reliability of Mr T. Kwan as an expert witness.

27. That aside, Mr T. Kwan's evidence that part of the Yard had been used as a kitchen, thereby enlarging the area of the Shop and resulted in a misrepresentation of the area of the Shop and the value of the Property is hard to understand. First of all, when he said that part of the Yard was used as a kitchen, it was based on his observation that there were washing of vegetables and chopping of meat in the Yard. But the occurrence of such activities did not justify the conclusion that the Yard or part of it was used as a kitchen. Secondly and more importantly, short of any form of partition into a kitchen, such activities cannot have misled any purchasers or anyone into thinking that the part of the Yard at which the activities were carried out forms an extension of the Shop. After all, both the Shop and the Yard are integral parts of the Property and the subject matter of the sale. The suggestion that these activities at the Yard give rise to misrepresentation of the area of the Shop, hence the value of the Property is unsustainable.

28. There is in addition a curious feature in his April 1998 report. The originals of the two photographs attached as Appendix D to the report as well as the negatives thereof had been lost. What are before the court are therefore the photocopies of the photographs. One of these that appears on the top part of Appendix D, depicts part of the Yard. According to Mr T. Kwan, he took it from a position near to the female toilet. His evidence on this point is rejected by both the plaintiff's other expert, Mr Tong, who said it must be taken either on the first floor or outside the Yard, and the defendant's expert, who, referring to the gate shown at the right bottom of the photograph, pointed out that it was taken at the rear door leading to the scavenger lane. Judging from the caption of the photograph, it was to show the cross-hatched steel bars, referred to as the "illegal structure above G/F covered yard". Mr T. Kwan accepts that the top part of this photograph shows the upper floors of the building at which the Shop is situated. The photograph is in contradiction to the observation and finding in his report that the Yard "was fully covered with cross-hatched steel bars underneath". This is particularly so when he stated in oral evidence that the steel bars together occupied a width of approximately three to four feet.

29. In short, I do not consider Mr T. Kwan a reliable expert on whose evidence I can act. I reject his evidence insofar as it is inconsistent with the other expert witnesses.

30. Mr Tong is an authorized person ("AP") registered under the Buildings Ordinance. He had between 1989 and 1995 worked as a building surveyor for the Buildings Department. He was engaged by the plaintiff after the commencement of these proceedings. His report dated 30 October 1998 was filed and served pursuant to the Order of Yeung J (as he then was) made on 31 January 2000.

31. Mr Tong testified that he made a site inspection, posing as a customer, on 30 October 1998. The visit lasted for about 10 minutes. Only visual inspection was carried out, but no measurement was taken. By reference to the approved building plans, he noted a number of irregularities, namely :

(i) the Shop fronts had extended beyond the building boundary into the pavement for about 300 mm;

(ii) the signboard of the restaurant had projected into the pavement for about 600 mm;

(iii) the passage leading from the Shop to the open part of the Yard was covered with a concrete slab;

(iv) cross-hatched steel bars covered by wooden boards were found in another part of the Yard; and

(v) the construction of the female toilet at the Yard.

32. Mr Tong was of the view that the concrete slab, the cross-hatched bars and the female toilet are building works for which prior approval of the Building Authority is required. Since there is no record of approved plans or consent with the Building Authority, these structures constitute unauthorized structures and because of the potential threat to public safety, there is a risk of enforcement action being taken by the Building Authority.

33. Mr Tong further gave an outline of the procedure involved in obtain prior approval of the Building Authority to alteration or additional work and concluded that the procedure would require at least five months to accomplish. As for the female toilet, Mr Tong commented that the Building Authority was unlikely to grant approval for its construction unless another toilet for disabled person is constructed at the Shop premises. The conversion of either of the existing two toilets into a toilet for disabled person is not possible because the passageways leading to them are too narrow to enable wheelchairs to pass through.

34. The defendant called only one expert, Mr Alexander Laurel Kwan ("Mr A. Kwan"), who is an architect and authorized person registered under the Buildings Ordinance. He has since 1997 been involved in applications for restaurant licences, averaging 20 to 30 such applications per year.

35. Mr A. Kwan made an inspection on 17 October 1998 and made another visit two days before he gave evidence in court. According to him, the condition of the Yard was more or less the same despite the lapse of some four years.

36. Mr A. Kwan confirmed there were cross-hatched steel bars with timber boards resting on top, but they were not as extensive as the plaintiff's experts had said. He was further of the opinion that the bars were erected at the first floor level and were outside the realm of the property. Additionally, he took the view that these were light-weight attachments and he did not detect imminent risk of collapse.

37. As to the female toilet, Mr A. Kwan accepted that the construction of a toilet does not fall within the categories of "exempted work" under section 41 of the Buildings Ordinance so that prior approval from the Building Authority was required. By resorting to the latest approved building plan, Mr A. Kwan found out, however, that the erection of a structure at where the female toilet now stands had previously been approved. The structure was marked with an abbreviation "P.H.", which he was unable to find out what it stood for. With the construction of a structure having previously been authorized, Mr A Kwan was of the opinion that the construction of the female toilet only amounted to an alteration of the content of the approved structure. Such alteration, in his experience, must have been consented to by the Building Authority during the process of obtaining the restaurant licence. As part of the licensing process, the Building Authority would carry out inspections of the Property. Similarly, he considered the projection of the Shop fronts and the signboard beyond the building boundary and the non-provision of disabled toilet facilities would either have been approved or would have been exempted during the licensing application. In his opinion, during the continuance of the restaurant licence, the Building Authority would not take enforcement action in respect of these irregularities. He, however, pointed out that upon the expiration of the restaurant licence, the alterations that constitute contraventions of the Buildings Ordinance would have to be reinstated to the conditions under the approved building plans.

38. On the approval procedure outlined by Mr Tong, Mr A. Kwan commented that the Practice Notes for Authorized Persons had prescribed a fast track procedure for approval applications relating to simple alterations. The procedure only takes up 30 days and is applicable to applications for construction of a toilet. Taking into account the time required for the construction work, being 7-10 days, the construction of an approved toilet could be accomplished within two months.

39. Mr A. Kwan further stated that during the site visits he made, he did not find any part of the Yard being used as the kitchen. Only washing activity was being conducted there by means of water hose connected to the kitchen on the Shop.

40. He also disagreed with Mr Tong's finding in his report that more than 50% of the open area of the Yard was fully enclosed with the remaining portion of the open Yard being covered by steel bars construction. He pointed out that Mr Tong's finding was contrary to what was shown in the photograph attached to Mr T. Kwan's report.

41. As accepted by Mr Mui, Mr A. Kwan is a frank and fair witness. His candour and fairness is best demonstrated by his evidence that the erection of a toilet cannot be exempted building work and also that any alteration contravening the Buildings Ordinance has to be reinstated upon the expiration of the restaurant licence. Mr A. Kwan has also demonstrated professionalism and thoroughness with regard to the inspections he made to the site and to the issues on which he was asked to express an opinion. I have no hesitation in accepting his expertise as an expert and his expert evidence.

42. With regard to Mr Tong, I am also of the view that he is on the whole an honest witness and was giving his evidence and opinion to the best of his ability. But as Mr A. Kwan observed, it does not appear that Mr Tong is experienced in restaurant licence applications. He had therefore not had regard to this aspect when he gave his opinions. On the question of whether the open part of the Yard was enclosed, as he said, or had only a cover, as Mr A. Kwan said, I prefer the evidence of Mr Kwan. The photograph in Mr T. Kwan's report does not support Mr Tong's finding. I also find Mr A. Kwan's evidence that the steel bars were not as thick as described by Mr Tong and were only light-weight attachments to be more convincing. After all, Mr T. Kwan also took the view that the bars by themselves were unlikely to cause a loading problem on the structure of the building. According to him, there would only be an impact on the loading when things were placed on the timber boards supported by the bars.

Unauthorized structures or alterations

43. Given that it is the plaintiff's claim that the defendant was in breach of the Agreement in that the defendant could not possibly have conveyed a good title upon completion by reason of the existence of unauthorized structures or alterations, the burden is on the plaintiff to prove, on a balance of probabilities, that there were unauthorized structures or alterations on the Property.

44. It would appear from the evidence of the 2 experts, Mr Tong and Mr A Kwan, that there were indeed some alterations on the Property, namely, the female toilet at the Yard and the concrete slab covering the passage from the Shop to the open part of the Yard. Additionally, the Shop fronts and the signboard had also extended beyond the building boundaries. As to the cross-hatched steel bars with timber boards on top, Mr A Kwan's evidence, which I accept, is that they were on the first floor and outside the boundaries of the Property. That being the case, the steel bars did not form any part of the Property. Even if they were unauthorized structures, they were not unauthorized structures of the Property.

45. As accepted by Mr Mui in his final submissions, the strongest point in the plaintiff's case is the construction of the female toilet. Plainly, the protrusion of the Shop front and the signboard are minor contravention that cannot be considered as encumbrance to the title of the Property. With regard to the construction of the female toilet, it is common ground that it was an alteration that required prior approval from the Building Authority. The evidence of Mr Tong is that the requisite approval had not been obtained. Mr A Kwan did not dispute this. But his opinion is that the Building Authority in the course of the licensing application would have accepted the alteration. There was therefore no risk of the Building Authority taking enforcement action during the continuation of the restaurant licence.

The giving of good title

46. It is settled law that the existence of unauthorized structures or alterations or breaches of the Buildings Ordinance does not necessarily constitute an encumbrance to title. A title will only be defeasible if there is a real risk of the Building Authority taking enforcement action in respect of the structure or alteration or breach: Active Keen Industries Ltd v. Fok Chi Keong [1994] 1 HKLR 396, 407; Spark Rich (China) Ltd v Valrose Ltd (1999) CACV 249/1998.

47. In Spark Rich (China) Ltd v Valrose Ltd, Godfrey JA said:

"It is impossible to formulate any test as what is a real risk and what is a risk which is not real ... It is more helpful to state that if, in 'an unauthorised structure' case, the court concludes that, beyond reasonable doubt, the purchaser will not be at risk of any successful action against him by the Building Authority, it should declare in favour of a good title shown.

Now the burden of showing a good title falls on the shoulders of the vendor. He must, therefore, in an 'unauthorised structure' case, satisfy the purchaser (or failing him he court) that the risk of such alteration is one which a purchaser can safely be advised to disregard.

So the test may be usefully framed as follows: If the purchaser asks his solicitor 'Can I be sure that I can safely disregard the risk?', then, unless his solicitor (being a prudent and experienced solicitor) can properly advise him that he can, the purchaser cannot be obliged to accept the vendor's title, even if supplied with opinion evidence as to the effect that action by the Building Authority was unlikely."

48. In the present case, the evidence of Mr A Kwan suggests that during the continuance of the restaurant licence, there is no risk of the Building Authority taking enforcement action in respect of the female toilet and the other contravention of the Buildings Ordinance. According to the defendant's evidence, the alterations and contravention had existed since 1985 when she purchased the Property. In 1985 and 1994, while the Building Authority had inspected the whole building on which the Property stood and had issued repair orders, it had taken no enforcement action in respect of the female toilet and the other contravention. The evidence also does not show that the female toilet and the other alteration pose any imminent risk to the Property or the building or to public safety. Applying the test in Spark Rich (China) Ltd, I am of the view that the risk of the Building Authority taking enforcement action against the Property can be safely disregarded.

49. Mr Mui contends that the restaurant licence can be revoked at any time and there is no guarantee that it will not be revoked before completion. In my view, this is a highly speculative submission. The evidence does not reveal any feature that will give rise to the possibility of the licence being revoked. In the absence of such evidence, it is speculative to suggest that there is a real risk of enforcement action because the licensing authority retains a power to terminate the licence.

Right to rescind

50. Even assuming that there was a real risk of enforcement action, the plaintiff will still have to demonstrate that the defect in title could not be remedied or the risk could not be removed in time for completion. This is because the plaintiff had chosen to rescind the Agreement forthwith, without going through the process of raising requisitions, contrary to conveyancing practice, and without waiting for completion. As Stock JA pointed out in Gladson China Ltd v. Lam Alexander Chun June & Anor (2001) CACV 291/2000, it cannot be the case that a purchaser's right to rescind will arise by the mere existence of an unauthorized structure, regardless of the willingness and ability of the vendors to put the matter right: see also Ip Cho Sau v Leung Kai Cheong (2000) HCMP 1288/1998.

51. According to Mr A Kwan, it was possible for the defendant to obtain the Building Approval's approval and to construct a toilet in the Yard in about 2 months by adopting the fast track procedure. It is true that Mr Tong had said that the Building Authority would require the provision of disabled toilet facilities before approving the construction of the toilet in the Yard, and that the existing toilets could not be converted into disabled toilets because the passageways leading to them are too narrow for wheelchairs to pass through. But that does not mean that it is not possible for a disabled toilet to be constructed somewhere inside the Shop premises and which can be assessed by wheelchair users.

52. Mr Mui argues that it is not possible that the defendant would remove the unauthorized alterations before completion since the defendant did not even know of their existence, that her expert report was only obtained two months after the completion date and that she had not offered to remove them. I do not agree. The fact of the matter is that the plaintiff had opted to put an end to the Agreement forthwith after Mr T Kwan rendered his report. The defendant was not afforded an opportunity to investigate the allegations of unauthorized structures or to consider or offer the adoption of remedial action. Upon the plaintiff's rescission, the defendant had to elect between accepting the rescission thereby bringing the Agreement to an end or affirming the Agreement and insisting on completion. The defendant, in exercise of the legal rights, elected to accept the rescission, thereby relieving herself from the further performance of the Agreement. That being the case, she was not obliged to seek expert advice to verify the veracity of Mr T Kwan's findings. Neither was it incumbent upon her to consider or offer remedial steps. Seen in this light, it is irrelevant that Mr A Kwan's report was only available after the completion date and/or that the defendant had not offered to remove the female toilet or other unauthorized alterations. In my view, it is speculative to say that the defendant would or could not have removed the female toilet or other unauthorized alterations had the plaintiff not chosen to rescind the Agreement but had, for instance, raised requisitions based upon Mr T Kwan's report. This is so even though the removal of the female toilet might have disturbed or affected the restaurant business.

53. In my judgment, on the facts of this case, it is not open to the plaintiff to conclude in April 1998 that the defendant could not possibly have given a good title to the Property upon completion by reason of the existence of the female toilet in the Yard and the other unauthorized alterations. The plaintiff has failed to prove that the defendant would be in breach of her contractual obligation to give a good title upon completion. The plaintiff's rescission communicated by YCC's letter dated 14 April 1998 is therefore wrongful and constitutes a wrongful repudiation of the Agreement.

The defendant's loss

54. It follows from the above conclusion that the plaintiff's claim falls to be dismissed and that the defendant should have judgment on her counterclaim for the declaratory relief sought. As to the counterclaim for damages, the defendant is entitled to be compensated for the $22,000 commission she paid to Centaline Property Agency Limited. The defendant also counterclaims for the conveyancing costs for the aborted sale and the resale. The defendant's evidence, which is not controverted, is that she had paid $30,000 to her solicitors for the aborted sale. The evidence, however, suggests that the defendant has not resold the Property so that there is no conveyancing costs for the resale. The award under this head is limited to $30,000.

55. On the defendant's claim for the deficiency in price on resale of the Property, no expert evidence has been adduced to show the market value of the Property. The defendant relied solely on the fact that the highest offer she had received was $4.3 million, which was considerably less than the price under the Agreement. I do not feel able to adopt this as an indication of the market value of the Property, having regard to the lack of particulars as to, for instance, the circumstances leading to the making of this offer or the attempts to offer the Property for sale on the market. I note too that a lis pendens had been registered against the Property as a result of this action. In the circumstances, no award can be made under this head.

Conclusion

56. For the reasons aforesaid, the plaintiff's claim is dismissed.

57. There will be judgment for the defendant on the counterclaim for:

(1) A declaration that the plaintiff has wrongfully rescinded the Agreement;

(2) A declaration that the defendant is entitled to forfeit the deposits paid by the plaintiff; and

(3) The sums of $22,000 and $30,000 by way of damages.

58. Additionally, it is ordered that the lis pendens currently registered against the Property be vacated.

59. There will also be an order nisi that the plaintiff pays the defendant the costs of the action to be taxed if not agreed. It is further ordered the amount of $400,000 paid into court by the plaintiff as security for costs be paid out to the defendant through her solicitors in discharge or partial satisfaction of the defendant's costs forthwith upon the costs order being made absolute.