CREDIT WORLD LTD v. LAU SIU LAN

HCA 16277/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 16277 OF 1999

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ASSESSMENT OF DAMAGES

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1.  By an agreement dated 30 August 1997 made between the plaintiff as the developer vendor and the defendant as the purchaser (the Agreement), the defendant agreed to purchase the property at Flat D, 15^th Floor with roof, Block 8, Grand Palisade, Tai Po, registered in the Tai Po New Territories Land Registry as Tai Po Town Lot 137 (the property) for the price of HK$8,093,000.00.

2.  Pursuant to the agreement of sale and purchase of the property, the defendant had paid 30% of the purchase price totally $2,427,000.00 to the vendor.

3.  The defendant had failed to complete on the date of completion, which was 28 April 1998.  By a letter dated 30 July 1998, the plaintiff terminated the Agreement and forfeited the defendant’s deposit. Under clause 16(3) of the Agreement, the plaintiff may resell the property and claim any deficiency in price and all expenses attending such resale against the defendant.  The plaintiff had resold the property by a Resale Agreement dated 14 August 1998 for the price of $4,115,000.00.  The resale was completed on 16 September 1998.

4.  On 13 October 1999 the plaintiff filed a claim against the defendant for damages.  On 6 April 2000, the plaintiff obtained a summary judgment against the defendant for damages to be assessed.  The statement of claim was subsequently amended on 14 March 2008.

5.  The defendant had legal representation between 7 December 2004 and 29 October 2008.  By a Notice to Act, the defendant informed the court and the plaintiff that she decided to act in person.

6.  By an affirmation of Chong Ho Yin filed on 17 November 2008, it was proved that notice of this hearing had been served on the defendant on her last known address.  The defendant had notice of this hearing by virtue of Order 65 Rule 5 of the Rules of the High Court.

7.  Having been satisfied that the defendant had had due notice of this hearing and that all other relevant documents had been served on the defendant, I ordered the hearing to proceed in the absence of the defendant.

8.  Plaintiff’s counsel had applied for leave to file the following documents: (a) Mr. Chow Shing Evans’s 2^nd supplemental witness statement; (b) plaintiff’s supplemental list of documents and (c) plaintiff’s supplemental hearsay notice.  Having no objection from the defendant and seeing that these documents would not cause prejudice to the defendant, I gave leave for them to be filed.

9.  The plaintiff had called 2 witnesses: Mr. Chow Shing Evans, the factual witness and an expert Mr. G.J. Cattermoul, a surveyor, on the valuation of the property, a report of which had been filed [bundle-75-97].  In this report, Mr. Cattermoul valued the market price of the property as on 14 August 1998 to be $4,130,000.00.

10.  Mr. Chow confirmed the truthfulness of his witness statements.  Mr. Cattermoul confirmed that he compiled the valuation report of the property and that the contents of his report were, to his honest belief, true.

11.  I have no reason to doubt the witnesses.  I accept their evidence for this assessment of the damages.

12.  I note that the defendant had also filed a valuation report compiled by her own surveyor [bundle- 98-119].  In his report, the surveyor valued the market price of the property to be $6 million as on 14 August 1998.  However, plaintiff’s counsel challenged the defendant’s surveyor’s report on the bases that there is no proof of the facts on which the surveyor relied because there is no independent evidence of the comparable transactions other than a summary table; the choice of comparables is poor because too many adjustments are required and also the expert should have used comparable from the same development instead of other developments.  Since the defendant’s expert was not available for cross-examination, his expert report is not admitted as evidence.

13.  I asked plaintiff’s counsel to address me on the difference in the resale price of $4.115 million and the surveyor’s valuation of $4.13 million, a difference of $15,000.00.  Mr. Ah-weng submitted that the court should adopt the open market price instead of the surveyor’s valuation because the market was going down at the time and the surveyor’s valuation was only a valuation of the property at a certain point of time.  There is no evidence to show that the vendor had depressed the price to gain unmerited advantage.  In fact, the developer vendor had to use cash coupons to promote sale of its properties at the development, for which the plaintiff also claims for damages.  I accept counsel’s view and decide to adopt the actual resale price for the assessment of damages.

14.  I have made reference to the supplemental witness statement of Mr. Chow Shing Evans [bundle-63-70] and Annex 2 and Annex 3 of counsel’s opening submission.  At the request of the plaintiff, the matter was adjourned for the plaintiff’s solicitors to prepare the best lending rates of the bank.  On 26 November 2008, solicitors for the plaintiff had submitted a final revised table of the best lending rates throughout the period from 29 April 1998 to 18 November 2008 for the calculation of the contractual interest.

15.  The following is a summary of the damages assessed:

Difference in price between the agreement and resale
a. Price of the property under the agreement	$8,093,000.00
b. Deposit paid under the agreement	$2,427,900.00
c. Price of the property resold	$4,115,000.00
d. Difference after resale	$1,550,100.00
Legal administrative costs	$1,660.00
Management fees paid before resale	$9,361.00
Rates paid before resale	$3053.28
Government rents paid before resale	$2035.52
Incentives to promote resale	$68,000.00
Stamp duty for the resale	$91,605
Contractual interest on the difference in price after resale between 29 April 1998 to 18 November 2008 (the date of the assessment)	$1,632,193.13
Total	$3,358,007.93

16.  Damages are assessed at $3,358,007.03 with interest at the judgment rate from 18 November 2008 until payment.

17.  There will be an order nisi for the costs of this assessment of damages to be given to the plaintiff, to be taxed, if not agreed.  Unless the defendant applies to vary this costs order, it shall become absolute 14 days from the date of its pronouncement pursuant to Order 42 rule 5B(6).