WONG CHI PAN v. LAU YU CHAU AND OTHERS

HCMP 3000/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 3000 OF 2014

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D E C I S I O N

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1.  I have before me a summons issued on 2 February 2015 to strike out a vendor and purchaser summons issued on 17 November 2014. I will grant that application. In order to understand my reasons for doing so, it is helpful to start by setting out a chronology of the events leading to this application.

2.  On 7 June 2014, the parties signed a provisional sale and purchase agreement in respect of a flat.  The agreement contained a completion date of 8 October 2014.  On 23 June 2014, title deeds were delivered.  On 27 June 2014, requisitions were raised in respect of the assignment by which the vendors acquired title to the property.  Those, in the view of the purchaser, were not satisfactorily answered.  On 29 September 2014, HCA 1925 of 2014 was issued by the purchaser, the plaintiff in the vendor and purchaser summons. 

3.  On 8 October 2014, the date on which completion was to occur, the purchaser’s solicitors wrote stating that the requisitions had not been answered properly and, as a consequence, completion did not take place as agreed.

4.  On 30 October 2014, the Statement of Claim was amended.  The prayer for relief in the Amended Statement of Claim is as follows:

“15. A declaration that the Defendants have not answered the Plaintiff’s requisition satisfactorily. As a result of matters set out above, the Plaintiff has suffered loss and damage. The Plaintiff claims specific performance and damage in addition to specific performance or abatement of purchase price due to the defects in title or damage in lieu of specific performance. However, as the Property has defect in title, no bank in Hong Kong will be willing to advance money to the Plaintiff to finance his purchase, and therefore if the abatement of the purchase price as prayed is not substantial enough, the Plaintiff may within 14 days after the order for specific performance has been issued, apply to court for an order for rescission of the Agreement and return of deposit and compensation or damages in lieu of specific performance;

16. Damages for misrepresentation, for Defendants’ breach of duty to disclose defect in title, or for breach of the terms of the Agreement;

17. Alternatively a declaration that the Agreement has been terminated by the Defendants’ breach, and repayment of the deposit with interest at such rate as the court should think fit, and damages;

18. Further and in the alternative, if the Court rules that the Defendants have satisfactorily answered the Plaintiff’s requisition, an order that the sale and purchase of the Property should be completed with 21 days of the Order, time being the essence of the Order.

18. 19. Interest under section 48 and 49 of the High Court Ordinance, Cap 4, Laws of Hong Kong SAR; and

19. 20. Costs of this action.”

5.  As I have already mentioned, the vendor and purchaser summons was issued on 17 November 2014.  However, a notice of appointment to hear the originating summons was not issued until 5 January 2015 because, I was told, an affirmation in support of the summons had not been filed when it was issued. 

6.  On 13 January 2015, the defendants’, the vendors, solicitors wrote to the purchaser’s solicitors informing them that, in their view, the miscellaneous proceedings commenced by the vendor and purchaser summons were redundant in view of the issue of the High Court action.  The reason why they were of this view can be seen from the relief sought in the summons which was as follows:

“1. A declaration that the Defendants, through, their former solicitors, Messrs. K. B. Chau & Company, have not satisfactorily and sufficiently answered the requisition and objection of the Plaintiff in respect of the title to the Property comprised in the Agreement and numbered 3 in the letter dated 27th June 2014 from the Plaintiff’s solicitors, Messrs. Lau, Wong & Chan, to the Defendants’ former solicitors, Messrs. K. B. Chau & Company; or

2. A declaration that the good title to the Property has not, in any event even with the Affirmation of Tam Ping Wah, solicitor, made on 7th October 2014, been shown by the Defendants in accordance with the Agreement; or

3. Further or alternatively, a declaration that it was unreasonable for the Defendants to answer the Plaintiff’s requisition just one day before completion, and that as a result time is no longer the essence of the Agreement, and therefore even the Court should find the Defendants’ answer were satisfactory, the completion date should be postponed to 21 days after the date of the Order, time being the essence; and

Costs.”

7.  As can be seen, the relief sought in the vendor and purchaser summons covers issues and seeks relief which appear in the High Court action.  The reason, apparently, for issuing the vendor and purchaser summons was because the purchaser’s legal advisors thought it would result in a quick summary determination of the principal issue in the High Court action, namely whether or not the vendors had answered the purchaser’s contentious requisition satisfactorily.    

8.  It seems to me that having decided to issue the High Court action, the correct course was, if it was thought advantageous to the progress of the High Court action, to have the question of the adequacy of the answer to the requisition decided at an early stage, and to issue an application for determination of a preliminary issue pursuant to order 33 rule 3.  I can see no particular reason for thinking that as a matter of timing that procedure would have been any slower than the procedure that has, in fact, been adopted as the current chronology of events which culminate in the hearing before me today on 27 May illustrate. 

9.  Issuing a second set of proceedings was, in my view, not only unnecessary but an abuse of process because it caused an unnecessary multiplication of actions which the defendant has to face. 

10.  It has been argued before me by Mr Tsui who appears on behalf of the purchaser, that as both the strike-out application and the vendor and purchaser summons had been listed before me today, even if this were to be my view it was expedient to deal with the vendor and purchaser summons in any event.

11.  I can see, certainly viewed from the point of view of the purchaser, the reasons why it might be thought that this was a sensible course.  However, it is not one that I am inclined to adopt in the present case.  It is perhaps unfortunate that at the callover hearing, which took place on 2 February, an order was made for the two applications to be heard together.  This perhaps occurred because it had not been appreciated by the court at that time that the strike-out application raised a simple issue which did not go to the substantive questions raised by the vendor and purchaser summons. 

12.  That be as it may, it seems to me fairly clear that it was inappropriate to issue a vendor and purchaser summons having commenced and advanced the High Court action, and it would be inconsistent with my decision that the vendor and purchaser summons should be struck out to then proceed to hear the substantive argument on the originating summons.

13.  I will, therefore, order that the vendor and purchaser summons is struck out and the costs of the strike-out application and vendor and purchaser summons be paid by the plaintiff (purchaser) to the defendants unless Mr Tsui wishes to argue that an alternative costs order should be made.