WU HSIN YU v. CHAN CHI KWONG AND ANOTHER

DCCJ 352/2018

[2020] HKDC 235

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVL ACTION NO 352 OF 2018

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J U D G M E N T

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Introduction

1.  Wu Hsin Yu (“Wu”), the plaintiff, was the former purchaser of a property situated at and known as Flat B on 28^th Floor, One Island Place, Island Place, No 51 Tanner Road, Hong Kong (“Property”).  Chan Chi Kwong (“Chan”), the 1^st defendant and Yuen Yin Hung Ena (“Yuen”), the 2^nd defendant are husband and wife.  They were formerly the registered owners of the Property as joint tenants.

2.  By a provisional agreement for sale and purchase made on 1 January 2018, Wu agreed to purchase, and Chan and Yuen agreed to sell, the Property at a price of HK$13,580,000 (“Agreement”).  An initial deposit in the sum of HK$650,000 was paid by Wu on the signing of the Agreement.  Under the terms of the Agreement, a further deposit in the sum of HK$708,000 was to be paid on or before 12 January 2018.  Completion, and hence payment of the balance of the purchase price, was originally agreed to take place on 28 February 2018.

3.  It is the case of Wu that before the signing of the Agreement on 1 January 2018, which was the second visit of the Property by him and his family, repeated enquiry was made as to whether any death occurred within the Property or in other units on the same floor as the Property.  In essence, the reply on each occasion was in the negative.

4.  The sale and purchase of the Property was reported in at least two local newspapers on the following day.  On the face of these reports, a suicide appeared to have taken place in one of the units on the same floor of the Property.  There were further newspaper reports discovered by Wu thereafter, and I shall come to them later in this judgment.

5.  Hence, Wu claims that Chan and Yuen, or the estate agents on their behalf, made false misrepresentations about the Property being free from any incident of death.  By letter through solicitors sent on 3 January 2018, Wu purportedly rescinded the Agreement and demanded for a return of the initial deposit from Chan and Yuen.

6.  Chan and Yuen deny the claim of misrepresentation.  As Wu did not proceed with the payment of the further deposit on or before 12 January 2018, by letter dated 16 January 2018 they asserted that there was a repudiatory breach of the Agreement on the part of Wu.  Chan and Yuen purportedly accepted the repudiation and forfeited the initial deposit.

7.  These proceedings were brought by Wu against Chan and Yuen.  As pleaded, Wu further claims interests on the initial deposit at the rate of prime + 1% from 3 January 2018 till judgment or alternatively under s 49 of the District Court Ordinance, Cap 336.

Relevant Legal Principles

8.  There is no dispute on the legal principles of misrepresentation.  Ms Angie Yan, counsel for Wu, refers me to two recent decisions of Bright Gold Ltd v Mega Well Development Ltd [2019] HKCFI 54 and Joytex Development Ltd v Super Homes Ltd [2018] HKCFI 2286.  I find the relevant principles have been very helpfully and succinctly summarised in the unreported decision of China Alarm Holdings Acquisition LLC & Anor v In Alexander Yim Leung & Others, HCA 503 of 2012, where starting at paragraph 74 Deputy High Court Judge Keith began to state:-

“74. For a claim of misrepresentation to be successful, the representation being relied upon has to have been a statement of fact or capable of being expressed as…a statement of fact. That is to be distinguished from a statement of opinion or a statement of intention or a recommendation. Moreover, the statement of fact has to have been a statement about the present state of affairs or about something which happened in the past…”

9.  At paragraph 76, the learned Deputy High Court Judge continued:-

“76. Three particular legal principles are relevant when it comes to deciding whether the representations were false…First, it is for the plaintiffs to prove that the representations were false. It is not for Mr Ing to prove that there were true: see Melbourne Banking Corp Ltd v Broughham (1882) 7 App Cas 307 at pp 314-315. Secondly, when considering whether a representation which is capable of having different meanings was false, you take as its meaning the way it would have been understood by a reasonable person in the position to whom it was made: see Krakowski v Eurolynx Properties Ltd (1995) 130 ALR 1 at p 11. Thirdly, a representation will not be false simply because it is not entirely correct. As Christopher Clarke J (as he then was) said in Raiffeisen Zentralbank Osterreich AG v Bank of Scotland PLC [2011] 1 Lloyd’s Rep 123 at 149:

‘It is not necessary for what was said to be entirely correct, provided it is substantially correct, and the difference between what is represented and what is actually correct would not have been likely to induce a reasonable person in the position of the claimant to enter into the contract.’

10.  As to whether a representation was falsely made, at paragraph 119:-

“119.  For a representation to have been made fraudulently, the plaintiff must prove two things. The first is that the person who made the representation must have intended the person to whom it was made to have acted on it: see Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at p 211 C-D. That requires no elaboration. Mr Ing does not deny that he intended Mr Wells to act upon the various representations made in the memorandum (subject to the various disclaimers in it) and the subscription agreements. His case is that he believed the representations to be true. That brings me on to the second thing which the plaintiff must prove, and that is that the person who made the representation did not honestly believe the representation to be true. That can be established in one of two ways – by showing that the defendant either knew that the representation was false or was reckless as to whether it was true or not.

120. Both knowledge and recklessness require little explanation. If you suspect that your representation might be false but deliberately refrain from attempting to find out whether it would be false or not, that amounts to knowing that it is false, just as much as knowing that it is false from your own knowledge of events. In other words, turning a blind eye to the possibility that it might be false amounts to not believe that it is true: see Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (No 2) (2010) 13 HKCFAR 479 at [53]. You are reckless as to whether it is true or not if you do not care whether what you are representing is true or not. In other words, your indifference to whether what you are representing is true or not also amounts to not believing that it is true. In either situation, there must be some moral reprehensibility on the part of the person making the representation. After all, the tort is deceit. That means that you have to have set out to mislead the person to whom the representation was made, not necessarily by deliberately telling a lie, but either by not acting on your suspicion that it might be untrue, or by your complete disregard for whether what you are saying is true or not.

121.  One other principle should be mentioned.  I said earlier that when a representation could have more than one meaning, you look at how it would have been understood by a reasonable person in the position of the person to whom it was made when considering whether the representation was false.  When considering whether it was made fraudulently, though, you look at how the person who made the representation intended it to be understood: see Krakowsky, op cit, at p 11.  It is the message he intended to convey which is crucial.  So where the person who made the representation honestly believed that it was true as he understood it to mean, the representation will not be fraudulent even if a reasonable person in the position of the person to whom it was made understood it in a way which made the representation false: Angus v Clifford [1891] 2 Ch 449 at p 472.”

11.  Finally, and on the question of inducement, the Deputy High Court Judge said at paragraph 134:-

“134.   To succeed in a claim for misrepresentation, the person to whom the representation was made must prove that it was the representation which induced him to act upon it – in this case to conclude the subscription agreements.  When considering whether a representation which is capable of having more than one meaning induced the person to whom it was made to act upon it, you look at how it was understood by that person: see Krakowski, op cit, p 11.  He does not have to prove that the representation was the sole reason why he acted upon it.  However, he has to prove that the representation did something more than merely encourage him to act upon it or to confirm that he was right to act upon it. The representation has to have played a “real an substantial part” in inducing him to act upon it.  In essence, the issue is one of causation.  The misrepresentation had to have been the effective cause of the person to whom the representation was made having acted upon it in the sense that but for the representation he would not have acted upon it – in this case, by not entering into the subscription agreements – at any rate not on the terms the plaintiffs did.  These principles are taken from the judgment in Raiffeissen, op cit, and I agree with it as a correct distillation of the authorities.

135.  The question which then arises is how you decide whether the person to whom the representation was made would not have entered the contract but for the representation.  Do you ask what he would have done if he had been told the truth?  Or do you ask what he would have done if no representation had been made at all?  The answer given in Raffeissen and other authorities is the latter.  But that does not necessarily mean that considering what the person to whom the representation was made would have done if he had been told the truth is completely irrelevant.  The question may be a hypothetical one, but provided that the answer is obvious and not speculative, it may help on what he would have done if the representation had not been made at all.

136.  In addition to having to prove that the representation induced him to act upon it, the person to whom the representation was made has to prove that he acted in the way the person who made the representation had intended him to act.  If the person to whom the representation was made acted in a way other than the person who made the representation intended him to act, the representation will be regarded as spent…

137. It goes without saying that if the person to whom the representation was made makes his own inquiries about whether the representation is true, he may be held to have relied on his inquiries in deciding to enter the contract rather than on the representation.  Having said that, there is no room for any doctrine akin to contributory negligence to come into play here.  It is therefore not relevant that the person to whom the representation was made negligently failed to make his own inquiries into whether the representation was true.  In that connection, it is for the person who made the representation to prove that the person to whom it was made knew what the true position was, and had not been deceived by it: see Chittagong on Contracts, op cit, para 7-036.  But apart from that, it is still for the person to whom the representation was made to prove all the elements of his claim, including that it was the representation which induced him to enter the contract.”

The Representations

12.  Prior to the signing of the Agreement, Wu and members of his family visited the Property on two occasions.  The first was in the afternoon of 30 December 2017 when they first met, and then were brought to the Property by, two estate agents of the Ricacorp Properties Limited (“Ricacorp”), Mr Lui Lun Hon (“Lui”) and Mr Calvin Yeung (“Yeung”).

13.  The second visit took place on 1 January 2018. Wu’s claim is primarily premised on the events of this day in support of his claim.

14.  Wu asserts that in the morning of 1 January 2018 his mother, Madam Wu (“Madam Wu”) telephoned Lui to ask about the Property on behalf of Wu. As pleaded in the statement of claim, Madam Wu specifically asked two questions during this telephone call in Cantonese: 「呢個單位係咪凶宅」and 「呢一層其他單位有無兇宅」.  In essence, Wu was concerned with whether any prior death had occurred in the Property or in other units on the same floor as the Property.

15.  Lui is said to have responded, 「無，無事發生過」 (“1^st Representation”).  Then Yeung allegedly also spoke on the phone, supporting the answer of Lui, by saying, 「如果係凶宅，銀行做唔到估價，凶宅做唔到，但係網上就做到這個估價。聯絡過業主，業主話無，如果你擔心等陣上到去再問業主睇下有無咁咪知有無囉」(“2^nd Representation”).

16.  Pausing here, neither Wu nor Chan and Yuen have called Lui or Yeung as a witness.  In their pleadings, Chan and Yuen do not admit the above telephone conversation.  They simply put Wu to strict proof of it.  At trial, Mr. Adrian Wong, counsel for Chan and Yuen, also did not suggest to any of the witnesses of Wu either that the telephone conversation had not happened or that the same had not happened in the way as described.

17.  In about half an hour after the above telephone call, Wu, his wife and child, Madam Wu and the aunt of Wu, Madam Choi (“Madam Choi”) met Lui and Yeung at the entrance of Block 3, One Island Place, that is to say the lobby of the building of the Property.  There, Wu asserts that Madam Wu asked Lui and Yeung again in Cantonese, 「有無兇宅」. The answer was, 「無，上到去再問業主」 (“3^rd Representation”).  Although this conversation was not admitted by Chan and Yuen, similarly the conversation is not seriously challenged by them.

18.  The second visit of the Property followed, during which Madam Wu and Madam Choi asked Chan and Yuen in the presence of Wu, his family, Lui and Yeung, 「呢個單位和同層單位有無兇宅」. Wu claims that Chan shook his head and answered, 「無無無…無咁嘅事」 and 「以我所知無」(“4^th Representation”).  The question asked and the answer provided are admitted by Chan and Yuen.

19.  After a brief look around at the Property, Wu, Madam Wu and Madam Choi were led into a bedroom where negotiations on price took place through Yeung with Chan and Yuen who remained at the sitting room.  At one point, Madam Wu asked another question of Yeung, 「呢個單位同同層係咪真係無事何」. Yeung is said to have stepped out of the bedroom to return in a short while with an answer, 「無事嘅，頭先都問過業主，業主都話無啦」(“5^th Representation”).  Chan and Yuen do not admit this conversation in the bedroom.

20.  Eventually, parties agreed at a price of HK$13,580,000.00 and proceeded with the signing of the Agreement.

21.  In his closing submissions, Mr Adrian Wong argues that on the evidence Chan and Yuen did not authorise Lui or Yeung to make any representation about prior deaths in the Property or in any units on the same floor as the Property.  He relies on the terms of the estate agency agreements signed by both parties, more importantly on one such agreement signed by Wu, who also confirmed the same under cross examination, that he had absolved Lui and Yeung from providing him with particulars of the Property.  Mr. Adrian Wong further points out the fact that it had not been put to Chan or Yuen at trial about instructions having been given to Lui or Yeung to make such a representation.  The submission is that Lui and Yeung had no actual or apparent authority to say what they did in this regard.

22.  That may be so with respect to the 1^st to 3^rd and the 5^th Representations, however, the primary case of Wu rests with the 4^th Representation.  What is claimed to have been said in the 4^th Representation, defined as the “Answer” in the Statement of Claim, is admitted by Chan.  It is by this “Answer” that Wu asserts to have placed reliance on when he decided to purchase the Property, which answer is now believed to be false.  I therefore find that the submissions by Mr Adrian Wong on authority have no relevance here.

23.  In the Statement of Claim, the events of the second visit were set out in the sequence described above.  However, in his witness statement Wu stated that the 5^th Representation took place before the 4^th Representation.  Under cross examination, Wu testified that the pleaded sequence was incorrect and maintained the version in his witness statement. I shall come to this further below.

Newspaper Reports

24.  On the day after the sale and purchase of the Property, 2 January 2018, Madam Wu saw a report, titled 「港運城兇宅同層戶售1,358萬 貼市價」, from the finance section of the Apple Daily website (“1^st Report”).  The 1st Report contained the following text:-

「樓市供不應求，凶宅及凶宅同層戶接連錄成交，個別成交價亦頗理想。

中原地產施長達表示，北角港運城剛錄得一宗兇宅同層戶易手，為1座高層B室，實用面積752方呎，3房間隔，坐享山景。業主以1,358萬元將單位易手，呎價18,059元，成交價極理想。成交單位同層有單位曾於2016年發生自殺命案，一般兇宅同層單位成交價低市價10%或以上，而是此成交單位則以市價成交。

施長達指，原業主1996年10月以619萬元買入單位，持貨21年，賬面獲利739萬元，升值119%。」

25.  Albeit the 1^st Report made no specific mention about this, however, and given the descriptions of time, price or other particulars of the preceding ownership, there is no real dispute that the 1^st Report was reporting about the Property. Chan and Yuen only take issue about the truthfulness of a suicide reportedly committed in 2016 on the same floor as the Property.

26.  On the same day a similar report titled 「港運城凶宅同層1358萬元市價沽」 was discovered by Chan from an internet website called Vinvest (“2^nd Report”).  The contents of the 2^nd Report read: -

「中原高級分行經理施長達透露，港運城1座高層B室，面積752平方呎，3房間隔，坐享山景。業主以1358萬元將單位易手，呎價18059元，成交極理想。消息指，成交單位同層有單位曾於2016年發生自殺命案，一般凶宅同層單位成交價低市價10%或以上，而是次成交但位則以市價成交。

原業主於1996年10月以619萬元買入單位，持貨21年，帳面獲利739萬元，單位升值119%。」

27.  In support of their claim, Wu produced 4 more newspaper reports which were found after the signing of the Agreement:-

(a)  on 3 January 2018, the Headline Daily newspaper reported, in so far as it was relevant, as follows:-

「北角港運城一個毗鄰「兇宅」的單位，沒有折讓以市價成交！有專家分析，新盤供應放緩，市民置業需求大，買家轉投二手市場，料二手樓升勢持續。

住宅供不應求，連不尋常單位也成搶手貨。中原地產港運城分行高級經理施長達透露，港運城一座一個高層三房單位，面積七百五十二平方呎，三房間隔，享海景，同層有單位曾發生自殺案，昨天仍以市價一千三百五十八萬元成交。他指，一般而言，凶宅同層單位成交價會低市價一成。」

(“3^rd Report”)

(b)  similarly, on the same day, the Sing Tao Daily website in U.S.A. reported that, as far as it was relevant:-

「市場亦出現凶宅同層以市價成交的情況，中原高級分行經理施長達表示，北角港運城新錄成交，單位為一座高層戶，面積七百五十二呎，三房間隔，以一千三百五十八萬元成交，呎價一萬八千零五十九元，價格屬市價水平。據悉，該盤同層有單位於一六年發生自殺命案。」

(“4^th Report”)

(c)  on 28 May 2016, titled “阿仔返屋企 驚見老竇上吊亡”, the Apple Daily news reported:-

「北角丹拿道港運城1座，下午2時許，30歲姓劉男子赫見60歲父親於洗手間以一條領帶上吊，遂將他解下並報警求助。救護員接報到場，證實男子當場死亡。警員無於現場檢獲遺書，經初步調查，相信事件無可疑，死因有待進一步驗屍確定。

據了解，死者患病。」

(“5^th Report”)

(d)  on the same day, 28 May 2016, in an article titled 「30歲仔廁所上吊自殺 老父返家發現救唔切」 the oriental daily newspaper website reported the following:-

「北角港運城一座一名姓劉 （60歲）男子，下午2時許，返回住所時赫見30歲兒子於廁所內以領帶上吊，劉即時將兒子解救下來，並報警求助。救護員接報到場，惜證實其子當場不治。警方在現場未檢獲遺書，將驗屍確定死者死因。據了解，死者有身體病記錄，不排除有人因病厭世。」

(“6^th Report”)

28.  It is apparent that the source of information for the 1^st to 4^th Reports was a Mr Sze from Centraline Property Agency Limited.  By letter dated 26 April 2019, Wu applied to issue 6 writs of subpoena against a number of persons including Mr Sze to attend trial as factual witnesses.  That application was refused on the same day but the Order was specifically made without prejudice to Wu to renew his application by way of an inter partes summons returnable on the first day of trial with supporting affirmations.  However, such an application was not made before me.

29.  There is no dispute that all of these newspaper reports comprise of hearsay, or even multiple hearsay, evidence.  No hearsay notice is filed in relation to them.  Ms Angie Yan nonetheless asks for these reports to be admitted under s 47 of the Evidence Ordinance, Cap 8, and for the Court to give weight to the hearsay evidence to show falsity of the representations described above.  Ms Angie Yan then refers to the factors set out in s 49(2) of the Evidence Ordinance, and further submits that, in summary: -

(a)  the defendants allowed the 1^st to 5^th Reports to be included in the agreed trial bundle without raising objection on earlier occasions such as at the pre-trial review hearing;

(b)  the decision not to renew the subpoena applications was made to prevent an adjournment of the trial and was not to be taken as avoiding the calling of or a fear to call Mr Sze to testify at trial;

(c)  the 5^th and 6^th Reports were contemporaneous reports of a suicide which took place in 2016;

(d)  the 1^st to 4^th Reports were also published within a short time after the sale and purchase of the Property and therefore contemporaneous reports of it having been sold close to market price despite of a death on the same floor in 2016;

(e)  while Ms Angie Yan accepts that the 5^th and 6^th Reports involved multiple hearsays, she argues that there is no information on the face of the 1^st to 4^th Reports that they are also based on multiple hearsay;

(f)   the respective journalists who reported the 5^th and 6^th Reports had no motive to conceal or misrepresent the incident in 2016;

(g)  there was also no reason for Mr Sze to conceal or misrepresent what he had stated which led to the 1^st to 4^th Reports, neither was there any evidence to show that he had made those statements for a particular purpose;

(h)  on an overall reading of the newspaper reports, the 4^th and 5^th Reports are consistent with the 1^st to 4^th Reports.

30.  Mr Adrian Wong does not appear to take serious issue as to the admissibility of the newspaper reports.  He argues, however, that no weight can be attached to these reports and relies on a number of decisions in support including Jademan (Holdings) Ltd v Francis Leung Pak-to & ors [1989] 2 HKLR 151, 王鐵英 訴 方展禹及另一方 [2006] 3 HKLRD 547, and Civic Limited v 余綺妙 & ors, unrep., HCA 225/2011, 12 July 2013.

31.  I have no hesitation to reject these newspaper reports as having any evidential value.  Not only were the 5^th and 6^th Reports contradictory with one another about who committed the suicide, they failed to report where of One Island Place did it take place.  This is in contrast with the 1^st to 4^th Reports in which a suicide was described by Mr Sze to have occurred on the same floor as the Property in 1996.  How Mr Sze derived this knowledge is not known and is not corroborated by the 5^th and 6^th Reports.  While I am not prepared to go as far as to find, as suggested by Mr Adrian Wong, that Mr Sze had an ulterior motive to sabotage the sale and purchase of the Property by misstating the facts, clearly the newspaper reports cannot be taken purely on their face values.

32.  The claim of Wu turns primarily on the evidential value of these newspaper reports.  It must follow from my findings above that the representations made by Chan and Yuen, or on their behalves, were hence capable of being true.  There are, however, other aspects of this trial that I wish to deal with.

Wu, Madam Wu and Madam Choi

33.  Wu, Madam Wu and Madam Choi gave evidence at trial.  Not surprisingly, Wu and Madam Wu placed emphasis on the importance of an absence of death either in the Property or on the same floor as the Property when Wu decided to make the purchase in question.  Wu said that this was a family tradition and were he told that there was one such death he would not have made the purchase or even paid a site visit.  From his point of view, albeit Lui and Yeung were estate agents of both the vendors and purchaser, he considered that the information given by them about the Property were given on behalf of Chan and Yuen. Madam Wu also said that whether any prior death occurred at the Property or on the same floor of the Property was a primary concern in the purchase.  She agreed to the suggestion by Mr Adrian Wong that it was not enough for the estate agents to confirm the absence of death in the Property but to seek also a face to face confirmation from Chan and Yuen.  

34.  That being admittedly the stance taken by Wu and his family when they considered purchasing the Property, the sequence of the representations said to have made to them becomes, in my view, significant. As I have described above, and originally, the pleaded case, which Wu confirmed to be so pleaded under cross examination, was that during the second visit to the Property on 1 January 2018, the 4^th Representation happened before the 5^th Representation.  The reverse was described in his witness statement, which Wu maintained to be the correct version at trial, namely that Yeung said the 5^th Representation first and then Chan said the 4^th Representation. Madam Choi and Madam Wu both agreed with the new version of events at trial.

35.  According to Wu, Madam Choi and Madam Wu, more was said to have taken place during their visit to the Property on 1 January 2018.  After a look around of the Property, Wu, Madam Choi and Madam Wu were led into a small room.  Negotiation on the purchase price then took place through Lui and Yeung who conveyed the different offers by walking between the small room and the living room where Chan and Yuen remained.  The first offer was made by Madam Wu to purchase the Property in the sum of HK$13,500,000.00.  Yeung was said to have left the small room but returned in a short moment bringing a message from Chan and Yuen who rejected the offer and maintained a sale price of HK$13,600,000.00. After having given further thought, Wu and his family increased their offer to HK$13,560,000.00.  At the same time, Madam Wu asked Yeung whether there was “really no problem” with the Property or other units on the same floor.  When Yeung came back to the small room for a second time, he told Wu and his family that Chan and Yuen insisted on the sale price of HK$13,600,000.00. In answer to the question posed by Madam Wu, the 5^th Representation was made.

36.  To move things forward, Yeung then suggested to reduce his agency commission and to make an offer to purchase the Property at HK$13,580,000.00. Yeung further suggested Wu and his family, if they were still having concerns, to ask Chan and Yuen face to face at the living room about prior deaths in the Property or other units on the same floor.  Pausing here, I take note that these suggestions of Yeung were never pleaded in the statement of claim but were only mentioned in the witness statements of Wu, Madam Choi and Madam Wu.  At the end Wu made an offer through Yeung to purchase the Property at HK$13,580,000.00 which was accepted by Chan and Yuen.

37.  After a deal had been struck, Wu, Madam Choi and Madam Wu met Chan and Yuen at the living room. In the presence of Yeung and Lui, Madam Choi was described to have asked anxiously one more time whether there was any prior death in the Property or any unit on the same floor as the Property.  Looking at Chan and Yuen, Yeung then asked them whether there was such a case (有無啲咁嘅事呀，陳生，陳太?). Chan replied with the 4^th Representation.  In so doing, Wu, Madam Choi and Madam Wu unanimously remembered Chan shaking his head while saying no repeatedly.  Wu further asserts that Chan’s voice became gradually softer in his answer such that towards the end when he uttered the words “to my knowledge no” (以我所知無) they were hardly audible.

38.  The point to be made from the above comes down to this.  By the 5^th Representation, which was said to have come before the 4^th Representation, Chan and Yuen were said to have through Yeung made a factual misrepresentation as to the state of the Property or other units on the same floor as the Property.  By the 4^th Representation that followed, Chan hence made a further misrepresentation of the same fact.  Had it been the reverse, that is to say the 4^th Representation came before the 5^th Representation, the 5^th Representation could be interpreted merely as a remark made by Yeung by virtue of the 4^th Representation without separately having confirmed with Chan or Yuen for a second time.

39.  I find the evidence of Wu, Madam Choi and Madam Wu to be unbelievable.  To begin with, they were, so they say, in search for, and placed great emphasis on, a property free from prior death in it or in the units on the same floor as it.  On 1 January 2018, Madam Wu started with asking Lui by telephone about this at about 11:00 a.m.  Then half an hour later when the family met at the entrance of One Island Place before the scheduled second visit to the Property, Madam Wu posed a similar question one more time to Lui and Yeung.  Their reply was to ask Chan and Yuen “when you get up to the Property”.

40.  The visit on 1 January 2018 was already a second visit of the Property.  If the absence of death was a determining factor as described, one expects at least Madam Wu to follow up with this important concern directly with Chan and Yuen at first opportunity before anything else when the family arrived at the Property.  Instead of doing so, they spent time looking around and further proceeded with the negotiation of price.  It was only after a deal was struck then Wu and his family, according to their latest version of events, brought up the question of prior death again.  The actions of Wu and his family during the second visit were simply in contradiction with the tradition they professed to have held and with the repeated questions said to have asked of Lui and Yeung immediately before the visit.

41.  I find accordingly that at the time when Wu signed the preliminary sale and purchase agreement for the Property on 1 January 2018, the question about whether there was prior death did not in fact form a real substantial part in inducing him or his family members to make the purchase.

42.  This is not to say that the question of death, whether occurred within the Property or in another unit on the same floor as the Property, had not operated in the minds of Wu or his family at the time.  However, I have no hesitation in finding that Wu, Madam Choi and Madam Wu have grossly exaggerated their evidence such that the representations of Chan, Lui and Yeung about the absence of death was not a core deciding factor for the purchase of the Property.

43.  Mr Adrian Wong also refers to a telephone conversation when Wu, believing then that a person had formerly fallen from height on the same floor of the Property, confronted Lui about the same on 2 January 2018.  The allegation is said to have changed to one of suicide accident in the statement of claim, and then further refined to death by hanging by virtue of the 5^th and 6^th Reports.  Under cross examination at trial, Mr Adrian Wong suggested to Wu that the change in the cause of death was remarkable in order to make good his case about a prior death having taken place inside a unit rather than on the podium of the building.  Wu denied the suggestion and in re-examination explained, for the first time, that a friend of a friend had access to the internal server of an estate agency firm which recorded a death by hanging at Flat E on the same floor as the Property.

44.  Notwithstanding the lateness of his explanation, no other particular was given by Wu about the new information.  For example, he did not explain when it was obtained and from whom.  It is not known which estate agency firm had the new information and in what format the same was given to him or the friend.  It is not known when did the death at Flat 28E purportedly occur. I find this explanation of Wu entirely incredible, let alone its relevance to supporting his claim in this case.

Chan and Yuen

45.  Ms Angie Yan asks this Court to infer from a number of circumstantial evidence that Chan and Yuen had knowledge of the suicide at the time when the Property was sold to Wu.  Her main attack, as I understand it, is founded on two bases.

46.  Firstly, Ms Angie Yan draws my attention to three tenancy agreements of the Property entered by Chan and Yuen with a tenant called Lai Wai Hung between 26 July 2012 and 11 October 2017.  The first tenancy agreement was for a monthly rent of HK$24,000, the second for HK$25,000 and the third for HK$24,000.  Ms Angie Yan points out that the third tenancy agreement was dated the 16 July 2016, which came after the date of the suicide reported in the 5^th and 6^th Reports.  She argues therefore that Chan and Yuen must have agreed to a reduction in monthly rent when they were told by the tenant about the suicide as reported.

47.  I reject that argument.  Wu did not call the tenant Mr Lai as a witness in these proceedings.  There is also no evidence as to what the reasonable market rent for the Property would be at the time.  This is to let alone the fact that newspaper reports have no evidential value as I have already found above.  The submission by Ms Angie Yan will effectively be asking this Court to find a case on speculation.

48.  Chan and Yuen deny having learned about any suicide when the tenancy was renewed in July 2016.  In any event, a reduction of HK$1,000 is far from a significant amount.  I accept the explanation of Chan and Yuen that they agreed to lower the monthly rent because Mr Lai was a long term good tenant who had helped to upkeep the Property for them.

49.  The second basis is this.  After Wu had refused to complete the purchase of the Property, Chan and Yuen instructed a different estate agent on 11 March 2018 to offer to sell the Property at a price of HK$13,600,000.  A provisional sale and purchase agreement with a third party was eventually signed on 6 April 2018 at a price of HK$13,200,000.

50.  Under cross examination, Chan and Yuen agreed that the property market was on the rise when they resold the Property.  When asked by Ms Angie Yan why they did not insist on a sale price of HK$13,800,000, Chan explained that the new buyer was aware of a suicide on the same floor of the Property from one of the newspapers and asked for a 10% reduction in price.  Chan initially refused as he did not believe himself in the newspaper reports, but the new buyer replied that his belief did not matter because the Property would continue to be tainted by the reported suicide in a further subsequent sale.  At the end, Chan and Yuen agreed to the price of HK$13,200,000 which roughly represented a 5% discount.

51.  Ms Angie Yan also suggested to Chan that he could have waited for another buyer or until the news about the suicide became forgotten before reselling the Property.  Chan answered that he wanted to seize the market when it was still active.  He also gave evidence that he wished to use the sale proceeds for his retirement and for purchasing another property for his children.

52.  Given these circumstances, Ms Angie Yan submits that it is inexplicable for Chan and Yuen to be reselling the Property at such a low price and to what appeared to be the first buyer they could find after Wu.  She asks this Court to infer that Chan and Yuen knew about the reported suicide at the time of the 4^th Representation.  When the sale and purchase with Wu fell through, Chan and Yuen were keen to dispose of the Property at a discount.

53.  I find the submission of Ms Angie Yan to be far-fetched.  The fact is that the 1^st to 4^th Reports were published after the Agreement.  An attempt to sell the Property thereafter, and particularly after a prior sale and purchase had collapsed, was bound to cause new purchasers to become skeptical about the reported suicide.  The fact that Chan and Yuen agreed to resell the Property at a lower than market price is not proof that they had knowledge about a suicide when the 4^th Representation was made or when the Agreement was entered.  I also accept that Chan and Yuen had not come across the 5^th and 6^th Reports, or in any event any suicide news about the Property, at the time of the 4^th Representation.  Wu and his family members were anxious, at least according to them, about deaths in the Property or in other units on the same floor as the Property.  Bank valuations had been obtained by them when they were considering the purchase.  Neither the banks involved nor they were aware of a reported suicide on 1 August 2018.  The discovery of the newspaper reports on a suicide, even if true, after a deal was concluded can well have been a misfortunate event.  It does not necessarily follow from this alone that Chan and Yuen were attempting to mislead Wu at the time of the Agreement.

Conclusion

54.  I find that on balance of probabilities Wu has failed to prove his claim against Chan and Yuen.  His claims are thereby dismissed with costs of the action to Chan and Yuen, to be taxed if not agreed.