LEE KAM CHUEN v. ING. MIROSLAV KOZUCH

HCA 2212/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2212 OF 2012

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HCA 2213/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2213 OF 2012

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BETWEEN

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ASSESSMENT OF DAMAGES

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Background

1. Since the backgrounds of the 2 actions are extremely similar and the hearings for assessment of damages of the 2 actions are scheduled to be heard together, I consider it convenient to have 1 written judgmentfor both of them.  The 2 plaintiffs in the above 2 actions claim against the 2 defendants as a result of their repudiation of their respective sale and purchase contracts of the 2 properties respectively known as Unit 6, 6^th Floor and the Main Roof, No 31 Lok Yip Road, New Territories, Hong Kong (“the Unit 6 Property”) and Unit 7, 6^th Floor and the Main Roof, No 31 Lok Yip Road, New Territories, Hong Kong (“the Unit 7 Property”).

2. The 2 plaintiffs represented by the same law firm commenced the 2 actions against the 2 defendants on 22 November 2012.

3. On 28 February 2014, the 2 plaintiffs obtained an order against the 2 defendants for, inter alia, the respective sums of $144,000 and $210 with damages to be assessed.

The plaintiffs’ claims

4. The 2 plaintiffs were testified as witnesses in the hearing and adopted their respective witness statements filed on 26 May 2015.

5. In their witness statements, they stated that they signed as purchasers and the defendants as vendor the respective sale and purchase contracts of the Unit 6 Property and the Unit 7 Property in consideration of $1,440,000 each and that the deposit of $144,000 was paid for each.

6. The completion was postponed from 18 June 2012 to 20 November 2012 by agreement of the parties.  On 12 November 2012, the defendant through his solicitors informed the plaintiff that he would not proceed with the completion.

7. The plaintiff now claims the damages for loss of bargain suffered due to the defendant’s repudiation.  In other words, the amount of damages claimed is the market value of the Unit 6 Property and the Unit 7 Property as at 20 November 2012 ie the date of completion less the contract price of $1,440,000 and also less the deposit of $144,000 already awarded pursuant to the order dated 28 February 2014.

8. According to the valuation report and the supplementary report, the market value of the Unit 6 Property estimated by the surveyor is $4,000,000 as at 20 November 2012 and the market value of the Unit 7 Property estimated by the surveyor is $4,590,000 as at 20 November 2012.  Hence, the plaintiffs claim the respective sums of $2,416,000 (ie $4,000,000 - $1,440,000 - $144,000) in HCA 2212/2012 and $3,006,000 (ie $4,590,000 - $1,440,000 - $144,000) in HCA 2213/2012.

The issues

9. The main issues are:

(a)  What are the general principles in assessment of damages for loss of bargain regarding an aborted sale and purchase of a landed property;

(b)  What is the appropriate date of assessing such damages;

(c)  How much shall be awarded to the plaintiffs as damages.

10. In Johnson v Agnew[1], Lord Wilberforce said:

“The general principle for the assessment of damages is compensatory, ie that the innocent party is to be placed, so far as money can do so, in the same position as if the contract had been performed. Where the contract is one of sale, this principle normally leads to assessment of damages as at the date of breach….” (emphasis added)

11. Therefore, the date of assessment of damages shall be the date of breach in general. However, his Lordship further said:

“…But this is not an absolute rule: if to follow it would give rise to injustice, the court has power to fix such other date as may be appropriate in the circumstances.”

Discussion

12. The plaintiffs pleaded in para 11 of the Re-Amended Statement of Claim that they had accepted the defendants’ repudiation on 14 November 2012.  Nonetheless, Mr Cheung for the plaintiffs submitted that the court shall depart from the general principle of calculating the damages as at the date of breach and invited the court to adopt the completion date ie 20 November 2012 rather than the date of acceptance of repudiation ie 14 November 2012 as the date of assessment of damages since the market values of the Unit 6 Property and the Unit 7 Property were estimated by the surveyor as at 20 November 2012.

13. Mr Lok for the defendants made no submission on this issue. I consider that only when injustice on the innocent party may ensue, the court would depart from the normal rule of assessing the damages as at the date of breach.

14. However, the difference between 14 November 2012 and 20 November 2012 is just 6 days.  There is no evidence before me that the market values of the Unit 6 Property and the Unit 7 Property as at these 2 dates would have great different.  Hence, even though I fail to find any injustice on the plaintiffs, I accept Mr Cheung’s submission to adopt the completion date ie 20 November 2012 as the date of assessment of damages.

15. As to the mitigation of loss, Mr Lok for the defendants did not make any submission on this issue too.  Thus, it is not necessary for me to deal with the same.

Conclusion

16. I assess the damages suffered by the respective plaintiffs as follows:

(a)  in HCA 2212/2012, the sum of $2,416,000 (ie $4,000,000 - $1,440,000 - $144,000); and

(b)  in HCA 2213/2012, the sum of $3,006,000 (ie $4,590,000 - $1,440,000 - $144,000).

Interest and costs

17. The plaintiffs claim interest in the Re-Amended Statement of Claim.  Despite the fact that both Mr Cheung for the plaintiffs and Mr Lok for the defendants did not make any submission on this issue, I exercise my discretion to allow the aforesaid 2 sums to carry interest at the commercial rate from the date of Writ to the date hereof and thereafter at judgment rate until payment.

18. I also make an order nisi that the defendants do pay costs of assessment to the plaintiffs, to be taxed if not agreed.  Such order nisi shall be absolute unless any parties make application to vary within 14 days.