LAM NING v. YAM SAM LEUNG AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. At the trial of this action on 28th November, 1991, I entered judgment in favour of the plaintiff and said I would give written reasons later, which I now do.

2. In this action, commenced by writ filed on 2nd May, 1989, the plaintiff seeks against the two defendants:-

3. I was told at the outset that the plaintiff and the 1st defendant had reached settlement. The 2nd defendant was absent, solicitors having ceased to act, but had filed a defence in May, 1989.

4. The plaintiff's evidence consisted of Mr Lam Shing Chau, son of the plaintiff, and documents adduced under a Hearsay Notice, to which no counter-notice had been given.

5. In his evidence, which I believed, Mr Lam confirmed the truth of the facts pleaded in the Statement of Claim. He identified the document dated 14th January, 1987, which describes itself as an "Agreement for Sale", but was signed only by the witness as "lawful representative" of his father, in which he expresses willingness to sell the Hollywood Road properties to the 1st defendant in the sum of $2,750,000. Mr Lam explained that the document was prepared by the 1st defendant, who he had asked to find a buyer for the properties. Mr Lam also identified another document in virtually the same terms, also signed by him and bearing the same date, in which the most significant difference is a purchase price of $3,000,000.

6. Mr Lam explained that it was never the intention that the 1st defendant should buy the properties, and that the two documents were only to be used by the 1st defendant to show to potential buyers. He explained that the difference in the purchase price, the higher figure being dependant upon the 1st defendant also being able to obtain a buyer for the owner of 149 Hollywood Road, there being a joint venture agreement between his father and that owner.

7. As a result of the efforts of the 1st defendant, he secured a purchaser, Sennington Limited with whom the plaintiff entered into a sales agreement, after the 1st defendant had told the witness that if the agreement was entered into they should both tear up their copies of the 14th January documents.

8. The sale to Sennington Limited fell through leading to an action for breach of contract by the plaintiff, which was in due course settled, with a Consent Judgment in favour of the plaintiff.

9. Mr Lam said that in March, 1988, the 1st defendant sent another draft agreement to the plaintiff, by which the plaintiff was to sell the Hollywood Road properties to the 1st defendant, but that the plaintiff declined to sign it.

10. Thereafter, by an agreement dated 25th June, 1988, the 1st defendant agreed to assign the benefit of the 14th January, 1987, "agreement" to the 2nd defendant. On or about 4th July, 1988, either the 1st or 2nd defendant caused the 14th January, 1987, "agreement" to be registered in the Land Office by memorial 3749738 against the titles of the Hollywood Road properties.

11. I am satisfied by the evidence of Mr Lam, as confirmed by the subsequent conduct of the 1st defendant, that there was never any intention that the 1st defendant should himself purchase the Hollywood Road properties, and that there never was a binding agreement to this effect. .I therefore ordered that judgment be entered in favour of the plaintiff.

12. At Mr Swaine's request, I make no order for costs against the 1st defendant, but order costs on the common fund basis against the 2nd defendant to be taxed if not agreed. I made such a costs order because I agree with Mr Swaine's submission that all costs of the hearing could have been saved if the 2nd defendant had done the right thing and submitted to judgment.