LAI FUNG KAM v. WONG TAI RAYMOND

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.16508 OF 1998

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JUDGMENT

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1. The Plaintiff Purchaser brings his case against the Defendant Vendor claiming that the Defendant has failed to discharge his duty to show or prove good title, and for various consequential relief including the rescission of the Sale and Purchase Agreement ("the Agreement") and the return of the deposit paid.

2. The Agreement in question was a Chinese proforma document of an estate agent dated 8 June 1997. Two matters are peculiar to this Agreement:

3. It appears from a letter dated 8 January 1998 of the Defendant's solicitors that the land premium was settled on 16 September 1997. The completion date under the Agreement appeared, therefore, to be 15 October 1997.

4. Requisitions on title were raised in various letters from the Plaintiff's solicitors, in particular one dated 19 November 1997, and various answers were given by the Defendant's solicitors (including answers given in a letter dated 11 March 1998). One of the issues in this action would be whether or not the requisitions were properly raised and/or they were satisfactorily answered.

5. The Statement of Claim was filed together with the writ on 28 September 1998, a Defence and Counterclaim was filed on 19 November 1998 and a Reply and Defence to Counterclaim was filed on 19 December 1998. The Plaintiff considered that there is no defence to the claim and took out an application for summary judgment pursuant to R.H.C. Order 86 on 4 March 1999. The ultimate issue which falls for my consideration is whether or not there is a triable issue that the Defendant had discharged his duty to show or prove good title to the suit property.

6. Due to the good sense of Counsel, the basis on which the Plaintiff advances his case in this application is much more narrow than the way it was advanced in the pleadings. Mr Chan for the Plaintiff limited the question to be decided in this application as follows:

7. Mr Chan argued that the extended time for completion was 28 February 1998, alternatively it was 11 March 1998. Mr Yuen for the Defendant objected to the Plaintiff's contention that the extended completion date was 28 February 1998, pointing out that this was not the Plaintiff's case set out in the Statement of Claim, especially at paragraphs 22 and 24 thereof.

8. I agree with Mr Yuen that the Statement of Claim appears to have contended that the completion date was extended to 11 March 1998, and the Defendant was alleged to have breached the Agreement only on that date. No reliance was placed on any breach having been committed by him on 28 February 1998.

9. Secondly, although a number of letters written by the Plaintiff's solicitors suggested that the extended completion date was 28 February 1998, at the last paragraph of their letter dated 6 March 1998 they wrote:

"In the circumstances ... we are instructed by our client [the Plaintiff] to inform that our client shall terminate the agreement to purchase the above property unless your client [the Defendant] is able to satisfactorily prove the title to the above property by or before 5 pm on 11 March 1998." (underline supplied).

It is arguable (and therefore triable) whether by writing this, the Plaintiff's solicitors had extended the completion date to at least 5 pm on 11 March 1998 instead of 28 February 1998.

10. As Mr Yuen pointed out further, this last quoted passage also raises a triable issue on the point advanced by Mr Chan at this hearing. This is because in that paragraph of the letter, the Plaintiff's solicitors did not appear to have set out the deadline for completion, but set out the deadline for the Defendant to prove title. Thus, it is arguable as to whether the Defendant was or was not in breach of the Agreement (as extended) by providing the answers to the requisitions only on 11 March 1998 and not earlier. It is also because of this that it is arguable whether the observations in Ng Chek Kok v. Kiu Wai Ming [1992] 1 HKLR 5, especially at pages 16-17, were factually distinguishable from the present case.

11. Mr Chan asked me to consider the quoted passage together with the first sentence of the second paragraph of the letter dated 6 March 1998. I find that the argument of Mr Yuen of whether the deadline (to prove or show good title) had been extended to at least 5 pm on 11 March 1998 remains arguable as stated above despite this sentence.

12. For completeness, I also agree with Mr Yuen that the following matters also raise triable issues:

13. For the above reasons, there shall be unconditional leave to the Defendant to defend the action and, as requested by Mr Yuen, I shall hear the parties as to whether the application should be dismissed.

[Submissions from Counsel]

14. The Defence and Counterclaim was filed and served well before the application and the issues raised therein already cover the ones raised today. I therefore agree with Mr Yuen that this is a case where the Plaintiff knew that the Defendant relied on contentions which would entitle him to unconditional leave to defence. The application falls within Order 86, rule 6 and ought, therefore, to be dismissed with costs to the Defendant, to be taxed if not agreed forthwith.