THE QUEEN v. LEE SING WAI

Headnote

Criminal damage - Vendor caused damage to property between the time of contract and completion - whether Vendor criminally liable.

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 241 OF 1990

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JUDGMENT

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1. The appellant was convicted before a magistrate of two charges of criminal damage contrary to section 60(1) of the Crimes Ordinance, Cap. 200. He was sentenced to a total of 4 months imprisonment to be served consecutively to another sentence previously imposed upon him by another magistrate in respect of a separate offence. He appeals against both conviction and sentence.

2. The particulars of the two charges were that on 29 and 30 June, 1989 the appellant, without lawful excuse, damaged certain fittings and fixtures belonging to Yu Siu Chun at Flat 1, 18th floor, Wun Sha Tower, 33-45 Wun Sha Street, Causeway Bay intending to damage such properties or being reckless as to whether such properties would be damaged.

3. By an agreement in writing dated 3 December 1988 the appellant agreed to sell and Madam Yu and her husband agreed to buy the property at Wun Sha Tower at a price of $820,000. Completion was agreed to be on 18 January 1989 and a deposit of $90,000 was paid by the purchasers. By a further agreement, completion was deferred to 21 January 1989 but the appellant failed to complete on that date. On 17 February 1989 the purchasers obtained an order for specific performance compelling the appellant to complete. The appellant failed to comply with this order and on 21 April 1989 the purchasers were granted an order for possession. On 1 May 1989 a writ of possession was issued out of the High Court. Again the appellant ignored the orders and on 29 June 1989 the purchasers attended the premises with a representative of their solicitors and the court bailiff to execute the order for possession. It was then the defendant caused the damage in the first charge.

4. On the next day, i.e. 30 June 1989 the appellant returned to the premises to collect his belongings and on that occasion he caused further damage to the property by throwing petrol onto a wall and this formed the subject matter of the second charge.

5. The legal assignment of the property was completed on behalf of the appellant by the court on 8 July 1989.

6. These facts were not disputed at the trial and the appellant also admitted causing the damages that were alleged against him. His defence was that in law he was entitled to act in the way he did because on 29 and 30 June 1989 he was still the owner of the property or alternatively the fixtures and fittings were not included in the contract of sale and those items were in any event his property.

7. The learned magistrate rejected these arguments and convicted the appellant. He was of the opinion that the appellant became a constructive trustee by reason of the order for specific performance and the order for possession granted by the court and this satisfied section 60(1) of the Crimes Ordinance that the prorerty was at the time belonging to another, namely the purchasers.

8. Before me, Mr. Saw for the Crown did not seek to uphold the convictions and referred me to several decisions and a passage from the Law Commission Report No. 29 on Damage to Property.

9. The first case was Phillips v. Lamdin [1949] 2 K. B. 33. The facts were:

"The plaintiff, a naturopath, entered into a contract with the defendant for the purchase of leasehold premises which she required for professional and residential use. Completion date was fixed as March 28, 1947. In the event of failure to complete on the agreed date, the contract provided for the payment of interest by the purchaser on the outstanding purchase-money from the date fixed for completion to the date of actual completion. The contract also laid down a time limit of four days, which the plaintiff in fact exceeded, for the return by the purchaser to the vendor of the engrossed assignment after a draft thereof had been agreed by the vendor.

 

The plaintiff had issued a writ for specific performance on April 15, 1947, but the matter never came to trial as possession was granted on June 5, 1947. She now claimed damages including damages for loss of earnings and expenses caused by the vendor's failure to give her possession on March 28. She also claimed the reinstatement of an Adam door removed by the vendor at some time between the date of contract and completion."

10. It was held that the vendor's delay in completion of the contract was wilful and wrongful, and the plaintiff was entitled to recover the damages claimed calculated from the date when her own default ceased. It was further held that the defendant should be ordered to reinstate the door, without having an option to pay its value.

11. At page 41, Croom-Johnson J. had this to say:

 

"Now upon all this state of affairs I think the law is really quite simple. According to Clarke v. Ramuz, where a vendor remains in possession pending completion he owes a duty to take reasonable care to preserve the property. It is sometimes said that he is a trustee of the property but, if he is, it is not the same sort of case as the case of the other trustees. But there are certain duties imposed upon him by the law, 'one of which is to use reasonable care to preserve the property in a reasonable state of preservation, and, so far as may be, as it was when the contract was made', see per Lord Coleridge."

12. The next case was In re Hamilton--Snowball's Conveyance [1959] 1 Ch. 308. The facts were:

 

"On January 26, 1956, R. contracted to purchase certain premises already occupied by him, which had been requisitioned under the Compensation (Defence) Act, 1939, and on the same day R. contracted to sell the same premises to A. The contract between R. and A. contained no condition that the premises were sold subject to the requisitioning. On February 3, 1956, the premises were conveyed to R. and on February 6, 1956, they were derequisitioned, compensation thereby becoming payable on that date to the 'Owner' of the premises under the 1939 Act. The premises were conveyed by R. to A. on February 23, 1959."

13. On a summons taken out by A. to determine whether or not R. as the legal owner of the premises on February 6, 1956, should hold the compensation payable under the Act on a constructive trust for A., it was held:

 

"a vendor under a contract of sale is only a qualified trustee for the purchaser of the premises with vacant possession, together with any physical accretions thereto, and not of any right to compensation moneys payable to him udner Act of Parliament which did not, in the absence of express provision in the contract, form part of the subject-matter of the sale. Accordingly, R. was entitled to receive for his own benefit compensation payable to him as owner of the premises on February 6, 1959 under the Act."

14. The third case cited was Clarke v. Ramuz [1891] 2 Q.B. 456 which had already been discussed in Phillips v. Lamdin.

15. In paragraph 39 at page 15 of the Law Commission Report No. 29 on Damage to Property, it was stated:

 

"In our Working Paper we took the view that the right or interest which another should have in property to entitle him to the protection of the criminal law against its damage should be a proprietary right or interest (not being an equitable interest arising only from an agreement to transfer or grant an interest). We have given further consideration to whether the protection of the criminal law should not be extended to those who have equitable interests arising only from an agreement to transferor grant an interest. This may be of importance in cases where the property is a building or a chattel of a unique kind, which is destroyed or damaged by the owner after he has contracted to sell it, but the property has not yet passed to the purchaser.

 

Should cases of this kind occur (and we think that this would be extremely rare) we think that it would be unnecessary to make the vendor criminally liable for the damage, particularly as the purchaser has adequate civil remedies available to him."

16. In the light of the above, it is doubtful that a vendor of a house or flat can be criminally liable to damages done by him to the property between the time after the signing of the contract to sell and completion. He is certainly liable for damages in a civil action as the authorities have abundantly shown. There is no doubt that the behaviour of the appellant was utterly and blatantly disgraceful and mean but I am not convinced that he has committed any crime.

17. Accordingly, the appeal would be allowed and the convictions quashed and sentences set aside.