LAM MEE KING v. WONG KUO SUN JOHN

DCCJ 2408/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2408 OF 2009

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JUDGMENT

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Background

1.  The late Dr Gene Don Wong (“Dr Gene Wong”) was the registered owner of the property situate at and known as Section A of Lot No. 223 in Demarcation District No. 112, Yuen Long, New Territories, Hong Kong (“the Property”).

2.  When the plaintiff, Mdm Lam Mee King, commenced the present action on 20 May 2009, Dr Gene Wong was a mentally incapacitated person incapable of managing and administering his property and affairs as well as these proceedings.  His nephew, Dr Wong Kuo Sun John (“Dr John Wong”) was then acting as his guardian ad litem.  Dr Gene Wong passed away in Canada on 15 October 2010.  By the Order dated 14 December 2010 of Master B Mak, Dr John Wong was appointed to represent the estate of Dr Gene Wong in these proceedings.

3.  The plaintiff’s case is that by a Chinese agreement dated 23 March 2009 (the “Agreement”) made between the plaintiff as purchaser and Dr Gene Wong as vendor, Dr Gene Wong agreed to sell and the plaintiff agreed to purchase the Property at the price of $128,000.00, but Dr Gene Wong failed and refused to complete the sale and purchase of the Property on the scheduled completion date, ie 9 April, 2009. Thus, the plaintiff issued the present proceedings against Dr Gene Wong to claim for an order for specific performance of the Agreement, all necessary and consequential accounts, directions and inquiries as well as damages to be assessed for breach of the Agreement in addition to and/or in lieu of specific performance.

4.  The Agreement was drafted and handwritten in Chinese by a solicitor, Mr Jim Yiu Ming, Jerry (“Mr Jim”) of Messrs Raymond Chan, Kenneth Yuen & Co (“RCKY”).  For easy reference, the parties have agreed that I can refer to the following English translation of the Agreement even though it was not certified:-

“ Provisional Sale and Purchase Agreement

This agreement is made on 23 March 2009, the parties hereto are:-

(A) Gene Don Wong (Canadian passport number XXXXXXXX), (his) address is Flat 7B, Block AB, 7/F, Rodrigues Court, 350 Victoria Road, Pokfulam, Hong Kong (the "Vendor");

(B) Lam Mee King (HK ID number XXXXXXX(X)), (her) address is 402H Kam Sheung Road, New Territories (the "Purchaser").

The Vendor and the Purchaser hereby agree the following:-

1. The Vendor agrees to sell and the Purchaser agrees to buy section A of Lot No. 223 in Demarcation District No. 112 (the “Property”), the purchase price is one hundred and twenty eight thousand Hong Kong dollars (HK$128,000.00). The Purchaser shall upon signing this agreement first pay HK$12,800.00 as deposit and part of the purchase price, the balance (HK$115,200.00) shall be paid to the Vendor on or before the date of completion.

2. The completion date of the sale and purchase of the Property under this Agreement shall be no later than 5 pm exact on 9 April 2009 (the completion date shall be bank working days and from Monday to Friday).

3. The purchaser acknowledges (her) knowledge that since 10 odd (to) 20 years ago, the Vendor has permitted (his) neighbour Mr. Fung Ching Sin (now operating “Choi Lee Farm”) to occupy a major part of the said Lot to facilitate assisting the Vendor to manage the said Lot (as the Vendor usually resides in Canada and seldom return to Hong Kong to manage the said Lot), and the said Mr. Fung Ching Sin has never verbally or by conducts indicated that he would refuse to vacate from the said Lot. However, the Purchaser does not require the Vendor to be responsible to deliver to the Purchaser the vacant land of the said Lot (that is in a state of vacant possession) upon completion. In future, the Purchaser shall recover the vacant land by herself.

4. The Purchaser is responsible for the legal costs, registration fees and stamp duty of this sale and purchase.

5. If the Purchaser fails to pay the purchase price of the Property in accordance with this agreement, the Vendor shall be entitled to terminate this agreement, forfeit the deposit and to resell the Property to others.

6. The Purchaser shall first pay the aforesaid deposit to Messrs. Raymond Chan, Kenneth Yuen & Co., solicitors, to be stakeheld (for the Vendor), and to be released to the Vendor after the solicitors have read the title deed of the Property and accepted the title of the Property.

_________________ ________________________

(Signature) (Signature)

(the Vendor) Gene Don Wong the Purchaser (LAM Mee

(Canadian passport number King)

XXXXXXXX) ”                                               

5.  The Property is divided into two portions: a large northern portion (the “Northern Portion”) and a small southern portion (the “Southern Portion”), which are separated from each other by Kam Sheung Road.  There is no dispute that one Mr Fung Ching alias Fung Ching Sin (“Mr Fung”) has occupied and run a farm called “Choi Lee Farm” at the Northern Portion for many years. 

6.  According to the evidence of Mr Fung, who was called by the defence as a witness, Dr Gene Wong was his neighbour and they had known each other for 30 to 40 years.  As Dr Gene Wong had immigrated to Canada and was living there on long term basis, he asked Mr Fung to look after the Property for him.  Thus, since about 1972, Mr Fung has been running Choi Lee Farm at the Northern Portion.  Dr Gene Wong was aware of that matter and indicated to him that there was no need for him to pay any rent.  He was only required to look after the Property so that it would not be occupied illegally by other people.  However, Mr Fung has never made use of the Southern Portion as he was not clear about the boundary of the Property and the Southern Portion was not suitable for farming. 

7.  On the other hand, one Myland Property Agency Limited (“Myland”) has at all material times occupied the Southern Portion together with the adjacent lots (section D of Lot 225 and Lot 222).  Myland is a company owned by the plaintiff’s husband, Mr Chu Chi Tat (“Mr CT Chu”), and their son, Mr Chu Kit Wing, Gary (“Mr Gary Chu”). In fact, Mr CT Chu and Mr Gary Chu were involved in the discussion and negotiation for the sale and purchase of the Property, not the plaintiff.  They just named the plaintiff as purchaser when the deal was finalised, as they did not want the Property to have any connection with Myland. 

8.  According to Dr John Wong’s evidence, in around November 2008, Dr Gene Wong received a notice from the Hong Kong Planning Department dated 4 November 2008 which raised the government’s concern about some unauthorized development on the Southern Portion.  Alarmed by the notice and feeling an urgent need to get rid of the risk of being associated with what he might consider a less than perfect mark on his character, Dr Gene Wong insisted that he should return to Hong Kong to handle the matter.

9.  As Dr Gene Wong had been suffering from dementia, his family members were against the idea of letting him travel all the way to Hong Kong to deal with the matter.  However, Dr Gene Wong was adamant that the matter should be dealt with as soon as possible.  Knowing that Dr John Wong would be in Hong Kong in late November 2008, Dr Gene Wong’s family turned to him for help.  Dr John Wong agreed to help to take care of the matter when he was in Hong Kong.

10.  Thereafter, Dr John Wong attended the matter and called the Planning Department on or around 9 January 2009.  He was advised by a Mr Sunny Ho of the Planning Department that he should engage a surveyor to conduct a survey and instruct a firm of solicitors for legal advice.  He then caused one of his relatives, Mr Helicon Ma (“Mr Ma”), a surveyor, to conduct a survey and prepare a survey plan for the purpose of dealing with the illegal occupation and unauthorized development in the Southern Portion.  As instructed, Mr Ma did prepare a survey plan dated 8 January 2009.

11.  Dr John Wong also instructed a firm of solicitors to liaise with the Planning Department and to write to the trespassers.  In late February 2009, the solicitors reported to Dr John Wong that the Planning Department had agreed not to impose any fine and that Myland’s signboard, though not removed, had been covered.  Dr Gene Wong and his family were informed of the situation but they were undecided as to what they should do.  Thus, Dr John Wong instructed the solicitors to withhold further action.

12.  To the surprise of Dr John Wong, Dr Gene Wong called him on 20 March 2009 and said that he was in Hong Kong.  Without telling Dr John Wong, Dr Gene Wong went to the Property on 22 March 2009 and met Mr CT Chu and Mr Gary Chu during the visit.

13.  According to the plaintiff’s case, Dr Gene Wong and Mr Gary Chu communicated with each other over the phone on 22 March 2009 regarding the selling of the Property.  They both agreed on the selling price of $50,000.00 and to meet the next day to finalise the sale and purchase. 

14.  On 23 March 2009, Dr Gene Wong and Dr John Wong attended a lunch meeting with Mr CT Chu and Mr Gary Chu in Tsimshatsui.  During the lunch, there were further discussion and negotiation about the sale and purchase.  Dr Gene Wong clarified that the selling price of $50,000.00 was for the Southern Portion only.  In response, Mr Gary Chu stated that they would not purchase the Southern Portion alone.  Dr Gene Wong replied that for the entire Property, the selling price should be more than $50,000.00.  Mr CT Chu then offered $100,000.00 to purchase the entire Property and Dr Gene Wong counter-offered $128,000.00 as 1, 2 and 8 were his lucky numbers.  The parties agreed on the price of $128,000.00 and therefore made the deal.

15.  After lunch, all of them attended RCKY’s office in Yuen Long where the Agreement was prepared and signed.  At the office of RCKY, Dr Gene Wong specifically instructed Mr Jim that he would not be required to deliver vacant possession of the Property, and hence Mr Jim drafted and included clause 3 in the Agreement.

16.  The defendant, on the other hand, contends that all along Dr Gene Wong intended to sell the Southern Portion only.  Mr Gary Chu proposed $50,000.00 on 22 March 2009 as the purchase price for the portion then unlawfully occupied by Myland.  It was increased to $100,000.00 on 23 March 2009 during lunch.  Then, Dr Gene Wong offered to sell at $128,000.00, as 1, 2 and 8 were his lucky numbers.  The defendant also contends that $128,000.00 was a gross undervalue for selling the Property as a whole. 

17.  At the office of RCKY, Mr Jim failed to protect the interest of Dr Gene Wong in the transaction.  He did not read or explain the Agreement to Dr Gene Wong at all. Dr Gene Wong did not have knowledge that he was selling the Property as a whole under the Agreement until Dr John Wong took the Agreement to another lawyer a couple of days later.

18.  According to the defendant, Mr CT Chu and Mr Gary Chu represented to Dr Gene Wong that the subject matter of the sale and purchase was the portion then unlawfully occupied by them.  Dr Gene Wong signed the Agreement in reliance on such representation and with the belief that he was selling the Southern Portion for $128,000.00.  The defendant also argues that the Agreement is void because Dr Gene Wong had never intended to sell the whole of the Property.  It has been clarified at the trial that the defendant is not relying on Dr Gene Wong’s own unilateral mistake or intention as defence, but contends that they are linked to the plaintiff’s misrepresentation.  Thus, the defence is still based on misrepresentation.

19.  Before the Defence and Counterclaim were amended, the defendant also relied on the ground that Dr Gene Wong was a patient suffering from dementia and incapable of making any valid agreement for the sale of the Property to argue that the Agreement is void, but this defence was dropped after the amendment.

20.  The defendant counterclaims against the plaintiff for the following reliefs:-

“(1) A declaration that Agreement is void or has been voided and ceased to have effect;

(2) An injunction to restrain the Plaintiff, whether by herself or through her agent or howsoever, from registering or causing the Agreement to be registered with the Lands Registry (or the District Office of the Lands Registry, as the case may be);

(3) In the event that the Plaintiff has submitted the Agreement for registration, an injunction be made to compel the Plaintiff to withdraw the submission;

(4) In the event that the Agreement has already been registered, an order that the registration of the Agreement be vacated;

(5) Damages for misrepresentation to be assessed;

(6) Interest on damages pursuant to the District Court Ordinance;

(7) Costs on indemnity basis;

(8) Further or other relief.”

Issues

21.  The parties agree that the main issues in this case are as follows:-

(1) Whether Mr CT Chu and/or Mr Gary Chu had made representation to Dr Gene Wong that the subject property of the sale and purchase was only the Southern Portion as alleged by the defendant.

(2) If the answer to Issue (1) is affirmative, whether Dr Gene Wong had acted in reliance on the representation in signing the Agreement.

(3) Whether Dr Gene Wong was, upon signing the Agreement, under the belief that he was selling only the Southern Portion, or intended to sell only the Southern Portion. 

(4) If the answer to Issues (1) and (2) and/or (3) are affirmative, whether the Agreement is void ab initio or voidable, for mistake or misrepresentation.

Discussion

22.  Having considered all the evidence and the submissions made by the parties carefully, it is clear to me that Mr CT Chu or Mr Gary Chu had never made any representation to Dr Gene Wong that the sale and purchase was only in relation to the portion unlawfully occupied by them, ie the Southern Portion, and not the Property as a whole.  The defence cannot even pinpoint to any particular word or words spoken by Mr CT Chu or Mr Gary Chu or any conduct done by them to say what exactly amounted to such representation.  It is totally insufficient for the defence to say that the discussions at the lunch meeting and at the office of RCKY gave a general impression to Dr Gene Wong that only the Southern Portion was being sold.

23.  For reasons mentioned below, I accept the plaintiff’s evidence that at the lunch meeting the parties agreed to raise the purchase price because it was not just for the Southern Portion, and that upon signing the Agreement on 23 March 2009, Dr Gene Wong agreed and intended to sell the Property as a whole, but subsequently after speaking with his wife in the morning on 24 March 2009, Dr Gene Wong changed his mind and sought to cancel the transaction, and that there was no mistake or misrepresentation as alleged by the defendant or at all. 

24.  First of all, the subject property was set out expressly in the Agreement as “Section A of Lot No. 223 in Demarcation District No. 112” and it was written in English.  There was no reason why Dr Gene Wong could not understand it.  According to Dr John Wong's evidence, Dr Gene Wong should have knowledge that the Property has two portions, namely the Northern Portion and the Southern Portion.  In fact, before the lunch meeting on 23 March 2009, Dr John Wong showed Dr Gene Wong the survey plan prepared by Mr Ma which clearly labelled the Northern Portion as “LOT 223 S.A”, and the Southern Portion “LOT 223 S.A (Portion)”.  However, the Agreement does not contain any word, such as “portion”, “part” or “division”, to indicate the parties' intention that only portion of the Property was sold.  If it was indeed Dr Gene Wong’s intention to sell just portion of the Property, there is no reason why Dr Gene Wong did not raise any objection or query concerning the description of the subject property in the Agreement.

25.  On the other hand, Dr John Wong was also there and he should be able to notice the description of the subject property in the Agreement as well.  He was asked by Dr Gene Wong’s family to take up the matter as Dr Gene Wong had dementia.  There was no reason why he would not read the Agreement to protect Dr Gene Wong’s interest.  In fact when Dr John Wong prepared the tenancy agreement concerning the Northern Portion for Mr Fung to sign, he was able to describe the Northern Portion as “LOT No 223S.A (Part)”.  It shows that he should know that the description of the Property in the Agreement was incorrect.

26.  More importantly, the Agreement contained an express provision specifically relating to the Northern Portion, ie clause 3 of the Agreement, which provides that no vacant possession of the Northern Portion would be given upon completion of the sale and purchase of the Property.  There was absolutely no reason for the parties to put down clause 3 in the Agreement, if they intended to sell the Southern Portion only.  Dr John Wong in his evidence was unable to provide any reason why clause 3 was there.  It is just unbelievable that neither Dr Gene Wong nor Dr John Wong had ever read the Agreement, or that they had no knowledge of clause 3 in the Agreement, before Dr Gene Wong signed on the Agreement.   

27.  I accept Mr Jim’s evidence that the Agreement had been read by him to the parties, including Dr Gene Wong and Dr John Wong, before Dr Gene Wong signed on the same.  At the office of RCKY, Mr Jim also took instructions in respect of the occupation of the Northern Portion, and hence was able to set out in clause 3 of the Agreement the particulars of Mr Fung’s occupation of the Northern Portion.  In fact, Dr John Wong admitted in his evidence that Mr Jim had asked Dr Gene Wong about Mr Fung, and he helped Dr Gene Wong out in providing information about Mr Fung to Mr Jim, such as his name being Fung Ching Sin and the fact that he had been occupying the Northern Portion for many years. 

28.  It is also clear from the evidence that the date of completion was so fixed on 9 April 2009 because Dr John Wong, who was going to be Dr Gene Wong's attorney in completing the sale and purchase of the Property, wanted to settle everything before he left Hong Kong for Canada in mid-April 2009.  It shows that Mr Jim must have explained the Agreement to Dr Gene Wong and Dr John Wong in order to obtain the date of completion from them.  Thus, I do not accept the defendant’s allegation that Mr Jim did not explain the contents of the Agreement to them.

29.  Dr John Wong’s excuse for not reading the Agreement himself at the office of RCKY was that he barely read very simple Chinese.  This again cannot be true as can be seen from his background and the evidence.  He was born in Macau and had lived in Macau and Mainland China until he was about 15 years old (in the year of 1952).  He studied in Pui Ching School and was able to write letters to his father in Chinese.  Since 1978, he had often worked in Mainland China and had to read Chinese.  During the trial, Dr John Wong was referred to clause 3 of the Agreement in Chinese and he was able to confirm the contents therein without any difficulty.  He also demonstrated his ability to read the tenancy agreement prepared for Mr Fung in Chinese.  Moreover, Dr John Wong admits in his evidence that after he left the office and returned to his place on the same day, ie 23 March 2009, he took out the Agreement and read it once himself. 

30.  It is just unbelievable that Dr John Wong, being able to read Chinese and was there to help Dr Gene Wong, would have permitted Dr Gene Wong to sign the Agreement in the alleged circumstances that Mr Jim had never explained to them the contents therein and merely instructed Dr Gene Wong to sign on the same.

31.  I do not accept Dr John Wong’s explanation that he had no authority to interfere with Dr Gene Wong's signing of the Agreement and hence he did not bother Dr Gene Wong when he signed the Agreement.  As Dr John Wong testified himself, he was not a mere nephew of Dr Gene Wong, but he was grateful for what Dr Gene Wong had done for him, such as providing work for him when he was a student, and he would like to take care of Dr Gene Wong.  Also, as admitted in his evidence, Dr John Wong arrived at YMCA early in the morning of 23 March 2009 to meet Dr Gene Wong, just in case that Dr Gene Wong would choose not to wait for him and try to get the things done on his own.  It is apparent that Dr John Wong was there to look after the interest of Dr Gene Wong.  Dr John Wong's allegation of indifference at the office of RCKY can hardly reconcile with his other evidence.

32.  In any event, no matter whether Dr John Wong or Dr Gene Wong had been explained or had read the Agreement or not, it is clear to me that Dr Gene Wong was indeed minded to sell the entire Property, instead of the Southern Portion only.  First of all, according to Dr John Wong's evidence, during the lunch meeting on 23 March 2009, the parties had discussion about the Northern Portion as well as the fact that there might be adverse possession by Mr Fung.  If Dr Gene Wong had no intention to sell the Northern Portion, it is inconceivable that the Northern Portion would be discussed by the parties and clause 3 would appear in the Agreement.

33.  Moreover, according to Dr John Wong's evidence, neither he nor Dr Gene Wong had knowledge that the Agreement was referring to the entire Property until he took the Agreement to another lawyer for advice.  However, upon speaking with his wife in the morning of 24 March 2009, Dr Gene Wong became very agitated and said words like: “唔賣喇！唔賣喇！連佢霸個D都唔賣俾佢喇”, which means that he would not sell anything including the part that was trespassed.  His wife did not object to the selling of the unlawfully occupied part of the Property.  Had Dr Gene Wong all along been intending to sell only the Southern Portion, it is implausible for Dr Gene Wong to become so agitated and said the above words refusing to sell anything.  He was then supposedly thinking that he was selling only the Southern Portion under the Agreement.  Why should he be agitated by his wife if that was indeed the case?  The only reasonable explanation for Dr Gene Wong’s reaction is that he at that particular time knew full well that he was selling the entire Property under the Agreement, and as his wife objected to the sale of the entire Property, he became very agitated and refused to sell anything.

34.  Moreover, it was not the first time that Dr Gene Wong had to submit to his wife's decision to revoke his previous promise in a transaction.  In mid-2007, after Dr Gene Wong had agreed to donate one million Canadian dollars to a charitable organization within a period of 5 to 10 years, his wife was unhappy with the donation and decided to talk to the organization to cancel the donation.  Their son, Mr Eugene Wong, confirms in his evidence that the cancellation of the donation was a decision of his mother, as she was not happy with his father's decision to donate without her consent, and that his father had to submit to his mother's decision to cancel the donation. 

35.  In the circumstances, I am not satisfied that the defendant has made out any case for the alleged misrepresentation or mistake.  It is my finding that Dr Gene Wong did intend to sell the Property as a whole, including both the Northern Portion and the Southern Portion, and that the Agreement represents the true agreement and understanding between the parties.

36.  I am also not satisfied that the Property was sold at an undervalue, as the plaintiff may not be able to obtain vacant possession of the Northern Portion or may need to spend a substantial sum of money so as to obtain vacant possession from Mr Fung. There was no tenancy agreement entered between Dr Gene Wong and Mr Fung at that time and it was not known whether Mr Fung would deliver vacant possession or whether he would claim adverse possession of the Northern Portion.  Thus, even though there is evidence that the open market value of the Property was at $547,241.00, it does not mean that the Property was sold at an undervalue when there would be no vacant possession delivered.  In fact, the open market value of the Southern Portion was only $12,000.00.  It is inconceivable for Mr CT Chu and Mr Gary Chu to agree to purchase only the Southern Part at the price of $128,000.00, bearing in mind that they are both estate agents.

37.  In his closing submission, Mr Kam Cheung, counsel for the defendant, submits that Dr Gene Wong was not a man of understanding.  Although the doctors were unable to agree on the degree of Dr Gene Wong's remaining mental capacity, there can be no dispute that he was very old and suffered from either dementia or some cognitive deficits.  He also submits that Mr Fung, the honourable gentleman who came to court to testify for the defendant, said that Dr Gene Wong looked completely disoriented when they met for the last time in March 2009.  I do not see how this submission can help the defendant’s case when the defence concerning dementia is dropped.  Mr Cheung seems to suggest that Dr Gene Wong was more vulnerable to misrepresentation and making mistake than a normal person, but the defendant must still prove that there was misrepresentation or mistake made in the first place, but as aforesaid, I do not find that there was any misrepresentation or mistake established in the present case.

38.  Moreover, Dr Gene Wong, though of old age, must have much experience in dealing with sale and purchase of landed properties.  He had been managing his business in Canada and the United States, consisting of a hotel of 88 rooms and various commercial and residential premises, until 2007.  In fact, Dr John Wong has tried very hard to show that Dr Gene Wong had made some accomplishment in his life, and it may well be true that Dr Gene Wong was very successful in his life and earned a lot of respect, but it just supports the fact that he would not be misled or make mistake so easily.  There is no medical evidence to say that his judgment was undermined by his dementia at the time of making the Agreement and in fact this line of defence is dropped.  However, no matter how successful or accomplished he was, it does not necessarily mean that he would not have to submit to his wife's subsequent objection and therefore have to seek to rescind the Agreement. The aforesaid incident of donation is a clear example of how his decision could be overturned by his wife’s decision.

39.  On the other hand, Mr Cheung submits that Mr CT Chu and Mr Gary Chu are the kind of persons who do not have the slightest respect for the law and other people's interests.  They trespass others’ properties and although they allege that they occupied Lot No 225D lawfully under a tenancy agreement, they are unable to produce the tenancy agreement.  Even though they are estate agents, they did not even register the alleged tenancy agreement in the Lands Registry.  They also built illegally on others' land, and despite the fact that they should have known that they had no right whatsoever to remain on other people's properties, they continued to do so.  They are also proud of their association with the "Gamble King of Yuen Long".

40.  However, I do not accept that the aforesaid background of Mr CT Chu and Mr Gary Chu would necessarily mean that they are not credible witnesses.  Their case is supported by the clear contents of the Agreement as well as Mr Jim’s evidence.  I have no reason to doubt Mr Jim’s credibility at all.  As aforesaid, it cannot be true that Mr Jim would simply ask Dr Gene Wong to sign the Agreement without explaining the contents to him.  It is clear to me that the defendant’s witnesses are not credible in this regard rather than the plaintiff’s.

41.  Mr Cheung submits that the defendant’s evidence should be preferred to that of the plaintiff because of the following unique and highly suspicious features concerning the Agreement:-

(1) Mr CT Chu and Mr Gary Chu took all the trouble to go to Tsimshatsui to talk to Dr Gene Wong before they came to an agreement with him.

(2) After talking to Dr Gene Wong, they took Dr Gene Wong to the office of RCKY without waiting for a second.

(3) They did not bother to use their own standard sale and purchase agreement.

(4) There was no discussion of Mr Jim's fee with Dr Gene Wong.  Apparently, they had agreed to pay Mr Jim in advance. 

(5) Before meeting Mr Jim, they had obtained information about the Property and that of Mr Fung (Jim's evidence is that he obtained the index plan, the land search result and all the information about Mr Fung from them).

(6) Mr Jim took care of nothing but the interest of Mr CT Chu and Mr Gary Chu:-

(a) Mr Jim had an on-going business relationship with them;

(b) He was approached by them;

(c) He took instructions from them;

(d) He was paid by them;

(e) Acting against the Law Society’s Guide to Professional Conduct, Vol 1, para 9.04(1), he did not advise Dr Gene Wong that he can seek independent legal advice.

(7) They wanted early completion.

(8) Without instructions from Dr Gene Wong, Mr Jim chose to take away from Dr Gene Wong the option to cancel the Agreement by returning the deposit and paying a penalty. 

(9) Mr Jim chose not to identify the subject matter of the sale and purchase by reference to the lot index plan. 

(10) The Agreement did not allow any time for title investigation.

(11) According to Mr Jim, Mr CT Chu and Mr Gary Chu brought up the question of occupation of the Property by Mr Fung.

(12) Mr Jim said that clause 3 was there to protect Dr Gene Wong's interest.  That's absurd.  Had Mr Jim wanted to protect Dr Gene Wong's interest, all that he needed to do was to add a few words to the effect that the seller was not required to deliver vacant possession.  There was another encumbrance that marred Dr Gene Wong's title, ie the Planning Department's notice. Had Mr Jim wanted to protect Dr Gene Wong, he should have barred the buyer from raising requisitions in relation to the same.

(13) Clause 3 of the Agreement actually helped Mr CT Chu and Mr Gary Chu.  By relying on Dr Gene Wong's express consent to Mr Fung's occupation, they were able to argue that the occupation of the Property by Mr Fung was not adverse to Dr Gene Wong's interest.

(14) Apparently, no one bothered to tell Dr Gene Wong that the purchaser was indeed the wife of Mr CT Chu.  It is nonsense for Mr CT Chu to allege that he made his wife his nominee in order to avoid Mr Fung's potential adverse possession claim.

42.  However, I do not find anything unique or suspicious in the aforesaid matters.  Going to Tsimshatsui to have a lunch meeting and to discuss about the sale and purchase is just a normal thing for anyone who wanted to negotiate for a deal.  Having agreed on the deal, it is also normal for the parties to go to a solicitor to finalise the agreement.  Dr Gene Wong was in fact anxious to dispose of the Property because of the notice issued by the Planning Department, and thus it is not surprising for the parties to go to see a solicitor straight away.  I do not see why Mr CT Chu and Mr Gary Chu had to use Myland’s standard form of sale and purchase agreement as they were not acting as agents in the transaction and did not want Myland to be involved.  As Mr Jim had previous dealings with Mr CT Chu and Mr Gary Chu, it is not surprising that they would have known Mr Jim’s fees and hence did not ask for the amount of his fees.  Early completion was in fact to suit Dr John Wong because he wanted to complete the transaction before he left Hong Kong in mid-April 2009.

43.  I also fail to see why it was suspicious for Mr CT Chu and Mr Gary Chu to obtain information of the Property and of Mr Fung beforehand as well as bringing up the question of Mr Fung’s occupation.  They were potential buyers of the Property including the Northern Portion.  Of course, they would want to find out the information and to know their position regarding Mr Fung’s interest.  In fact, Dr John Wong also provided information about Mr Fung to Mr Jim.  So why should Mr CT Chu and Mr Gary Chu be criticised for that?  Clause 3 of the Agreement is clearly for the interest of Dr Gene Wong because he would not need to deliver vacant possession of the Northern Portion.  I just do not see how it could be said to be helping Mr CT Chu and Mr Gary Chu.  They cannot use clause 3 of the Agreement to argue that Mr Fung does not have adverse possession against Dr Gene Wong, as it would not be binding on Mr Fung. 

44.  The criticisms against Mr Jim for failing to do the things mentioned above, such as acting against the Law Society’s Guide to Professional Conduct, not including the option for cancelling the Agreement, not allowing time for title investigation, not barring the purchaser from raising requisition on the Planning Department’s notice, and not informing Dr Gene Wong who the buyer was, are all unfounded.  The defendant has not pleaded any case of conspiracy among Mr CT Chu, Mr Gary Chu and Mr Jim, but all these allegations seem to suggest that Mr Jim was colluding with Mr CT Chu and Mr Gary Chu.  I do not accept that the defendant can rely on any of these allegations.  In any event, I do not find that Mr Jim has done anything wrong.  He was just following the instructions he received at that time to prepare the Agreement.  After all, as I find that Mr Jim had explained the contents of the Agreement to the parties and Dr Gene Wong was clearly aware of the selling of the Property as a whole, including the Northern Portion, whether Mr Jim had or had not complied with the professional requirements as alleged above is neither here nor there.

45.  In the circumstances, I do not agree that the defendant’s evidence is to be preferred to that of the plaintiff.  On the contrary, I find that the plaintiff’s evidence is more credible and reliable than the defendant’s.

Conclusion

46.  By reasons aforesaid, my answers to the issues mentioned above are as follows:-

(1) The discussion and negotiation between the parties regarding the Agreement were as mentioned by the plaintiff.  There was no representation made by Mr CT Chu or Mr Gary Chu that the subject property of the sale and purchase was only the Southern Portion.

(2) The circumstances under which the Agreement was prepared were as mentioned by the plaintiff, and Mr Jim had explained the contents of the Agreement to both Dr Gene Wong and Dr John Wong who were able to understand the Agreement.  Hence, Dr Gene Wong did not act on any representation that the subject property of the sale and purchase was only the Southern Portion.

(3) By the same token, Dr Gene Wong was not under the belief and did not intend that he was selling only the Southern Portion.

(4) Thus, the Agreement is not void ab initio or voidable for mistake or misrepresentation.

47.  The plaintiff is therefore entitled to judgment against the defendant as claimed and the defendant’s counterclaim must be dismissed.

48.  I grant the following orders accordingly:-

(1) The Agreement for the sale and purchase of the Property (including both the Northern Portion and the Southern Portion) be specifically performed.

(2) The plaintiff be at liberty to apply for any necessary and consequential accounts, directions and inquiries.

(3) The defendant do pay the plaintiff damages for breach of the Agreement in addition to and/or in lieu of specific performance to be assessed if not agreed.

(4) The defendant’s counterclaim be dismissed.

(5) Costs order nisi: The defendant do pay the plaintiff costs of the action, including costs of the counterclaim and any costs reserved, with certificate for counsel to be taxed if not agreed.