KWAN KANG POR GORDON v. WONG KA MUN

HCA13543/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 13543 OF 1998

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JUDGMENT ON ASSESSMENT OF DAMAGES

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Background

1. By a written agreement made between the Plaintiff and the Defendant dated 3rd November 1997, the Plaintiff agreed to sell and the Defendant agreed to purchase Flat F, 17th Floor, Block 17 of City One Shatin, New Territories, Hong Kong ("the property") at the price of HK$3,500,000. An initial deposit in the sum of $100,000 was paid prior to, and a further deposit in the sum of $250,000 was paid upon the signing of, the said agreement by the Defendant to the Plaintiff

Clause 3 of the said agreement stipulated that the purchase shall be completed on or before 10th February 1998 ("the completion date"). The Plaintiff's then solicitors wrote to the Defendant's solicitors by letters dated 4th and 10th February respectively, reminding the Defendant of the completion date. No response was received from the Defendant or her solicitors..

The Defendant failed to complete the purchase on 10th February. The Plaintiff, through his then solicitors by another letter dated 10th February 1998, accepted the Defendant's repudiation of the said agreement and exercise his right to forfeit the deposits and to rescind the sale. The Plaintiff put the property in the open market for sale but was unable to sell it at or about $3,500,000 due to the collapse of the property market.

2. By an agreement dated 4th March 1998 made between the Plaintiff as the vendor and Pun Shu Man Potato and Law Yuen Fun Muriel as the purchasers, the Plaintiff agreed to sell the property at the price of $2,760,000. The property was duly assigned to the purchasers on 9th April 1998.

3. By a Writ of Summons issued on 12th August 1998 and an Amended Statement of Claim dated 11th November 1998, the Plaintiff claims against the Defendant, inter alia, damages to be assessed. By an Order dated 19th January 1999 made by Master Jones, the case was set down for hearing of the assessment of damages.

Assessment

4. The normal measure of damages is the contract price less the market price at the contractual time fixed for completion. As stated by Parke B. in Laird v Pim (1841) 7 M & W. 474 at 478: " The measure of damages ........ is the injury sustained by the Plaintiff by reason of the Defendants not having performed their contract. The question is , how much worse is the Plaintiff by the diminution in the value of the land, or the loss of purchase-money, in consequence of the non-performance of the contract? (seeMcgregor on Damages, 14th ed. Para. 745). The first relevant price is the contractual price and the second one is the market price at the contractual time fixed for conveyance (i.e. the completion date). According to the learned writers of Mcgregor, "the price at which the seller has resold is strictly not to be taken in preference to the market price, but it has been taken in most cases .......... This would seem to be on the ground that the resale price affords good evidence of the market price, and there is no suggestion in these cases awarding the difference between the contract price and the resale price that the latter differed at all from the market price."

5. Further, the damages "are not confined to the actual bargain between the sum realised and the contract price, there may be incidental expenses which have necessarily flowed from the breach of contract" - per Pollock M.R. in York Glass Co. v Jubb (1926), 134 L.T. 36, 40 (C.A.). The Plaintiff is therefore entitled to consequential losses.

6. The Plaintiff gave evidence before me confirming that he managed to resell the property at $2,760,000. As the Plaintiff had already signed a sale and purchase agreement to buy another flat in City One ("the new flat"), with the completion day on 14th February 1998, the Plaintiff had to apply for a bridging loan from Wing Hang Bank in the sum of $1,890,000 to facilitate the completion of the new flat on 14th February due to the failure on the part of the Defendant to complete the sale on 10th February. The Plaintiff re-paid $1,983,951 to the said bank on 14th February. In other words, the Plaintiff had to pay $93,951 as interest. Further, as a result of the Defendant's breach, the Plaintiff incurred further legal costs in the sum of $8,350 in respect of the re-sale of the flat.

7. Apart from the fact that the Plaintiff's evidence is unchallenged, it is also well supported by documents. I accept the Plaintiff's version and find that the Plaintiff is entitled to claim damages against the Defendant assessed at $492,301, the breakdown of which are as follows:-

1	Loss of bargain
	Contract price	$3,500,000
	Less: re-sale price	$2,760,000
	Less: deposits paid	$350,000
			$390,000
2.	Legal costs of resale		$8,350
3.	Interest for bridging loan		$93,951
		Total:	$492,301

8. The Plaintiff is also entitled to interest at the judgment rate from date of Writ until full payment with costs, to be taxed if not agreed.