WING SMART CONSTRUCTION LTD v. HUNG JU PING

HCA 597/2019

[2019] HKCFI 2865

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 597 OF 2019

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J U D G M E N T

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1.  This is an application for judgment in default of notice of intention to defend and in default of the filing of a defence. The claim arises out of an agreement in writing of 31 January 2007 whereby the plaintiff agreed to procure the owner of the land at Section A of Lot 247 in Demarcation District No 106, New Territories, upon completion of a village house to be constructed thereon, to transfer and assign the Ground Floor with Garden and the First Floor to the defendant for the sum of $3.56 million.

2.  According to the statement of claim indorsed on the writ, the area of the Garden was estimated at the time of the agreement to be 2000 ft², but could be of a different size upon completion and, if so, the price would be adjusted on the basis of $300 per ft².  By 27 September 2012, the house had been completed and additional premium for alienation had also been paid.  The Garden had a net area of 1356.6 ft², resulting in the reduction of the price in the sum of $386,040. 

3.  The defendant had paid the plaintiff deposits in the sum of $712,000 but, despite several notices issued by the plaintiff requiring completion, had failed to complete the purchase or pay any part of the balance of the price by the extended deadline of 11 January 2019.  Accordingly, the plaintiff by its statement of claim seeks a declaration that the agreement had been repudiated by the defendant and has been terminated by the plaintiff’s acceptance of the repudiation, and that the plaintiff is entitled to forfeit the deposits of $712,000.

4.  There is an affirmation of service of the writ indorsed with the statement of claim on the defendant by insertion through the letterbox for her usual or last known address.  The present summons has also been served by ordinary post to that address and has not been returned undelivered.  The defendant has neither filed a notice of intention to defend or a defence, nor appeared today to oppose the application.  In a subsequent affirmation dated 18 November 2019 which the plaintiff undertook at the hearing to file, further information was provided in relation to the attempts to bring these proceedings to the notice of the defendant.

5.  It seems to me that the plaintiff is entitled to judgment on its statement of claim based solely on the matters pleaded.  There is a question as to whether declaratory relief should be granted in the present case without a trial of the action inter partes.  However, that the court does not usually do so is only a general rule of practice, not a rule of law.  In the present case, there is no allegation of fraud or wrongdoing of a similar kind, and the dispute is simply a contractual one based on the agreement between only the plaintiff and the defendant.  The matters covered by the declarations sought, namely, the termination of the agreement and forfeiture of the deposit, prima facie affect the rights of no one other than the defendant or persons claiming through her.  Conversely, in the absence of the declaration, given that the plaintiff has no claim for damages, specific performance or injunctive relief, its position under the agreement would remain in doubt, and it would not be clear that it was no longer under any obligation to perform the agreement further.  In the circumstances it seems to me justified to grant the declarations sought in order to do justice to the plaintiff: see Patten v Burke Publishing Co Ltd [1991] 1 WLR 541.

6.  There will therefore be declarations that: (1) the written agreement dated 31 January 2007 and made between the plaintiff and the defendant was terminated by repudiation by the defendant and acceptance thereof by the plaintiff upon service of the writ of summons in these proceedings; and (2) the plaintiff is entitled to forfeit the deposits in the total sum of $712,000 paid by the defendant to the plaintiff pursuant to the written agreement.  There will be no order as to costs as the plaintiff stated it would not seek any order for costs.