SUPER MATE LTD. v. SIU LAI MING STELLA

HCA 2642/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2642 OF 2000

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ASSESSMENT OF DAMAGES

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1. The plaintiff was the developer of a residential block known as Bellevue Place situated at U Lam Terrace, Mid Levels, Hong Kong. Bellevue Place is a single block of 27 stories with 4 units on each floor.

2. In November 1997 the plaintiff put the project up for sale. A number of buyers, including the defendant, signed up agreements to acquire the units in the development. Each of the buyers was required to pay an initial deposit of 10% of the purchase price upon signing of the agreement to purchase. Further payments, each amounting to 5% of the purchase price, were required to be made on 2 January 1998, 1 April 1998, 1 July 1998 and 1 October 1998 respectively. The balance of the purchase price of the unit was to be paid within 14 days upon notification of the issuance of the occupation permit.

3. With the decline of the property market towards the end of 1997, some of the buyers approached the plaintiff to negotiate for the reduction of the purchase price. In response to the requests, the plaintiff wrote to the purchasers on 26 March 1998 indicating that the plaintiff would postpone the payment due days on 1 April, 1 July and 1 October to 1 May, 1 August and 1 November 1998 respectively.

4. More than 20 buyers defaulted payment.

5. The defendant was the purchaser of Flat 22-C. Her agreement was signed on 13 October 1997 for a purchase price of HK$5,038,000. She paid the initial deposit of HK503,800 and a further deposit of HK$1,007,600.

6. Occupation permit was issued on 30 August 1999. On 28 September 1999 the plaintiff notified the defendant of the issuance of the occupation permit and requested the defendant to complete the purchase within 14 days. As the defendant failed to make payment or take delivery of the property, on 5 January 2000 the plaintiff exercised its contractual right to terminate the agreement. On 13 March 2000 the plaintiff initiated the present proceeding to recover from the defendant damages in respect of the defendant's breach. In default of notice of intention to defend, interlocutory judgment was entered in favour of the plaintiff on 13 April 2000 for damages and costs to be assessed.

7. The property was re-sold on 15 January 2001 for a consideration of HK$2,390,000.

8. According to the valuation report prepared by FPD Savills (Hong Kong) Limited the open market value of Flat 22-C on 5 January 2000 was HK$2,770,000. Hence the loss of bargain suffered by the plaintiff was HK$2,268,000 (HK$ 5,038,000 - HK$2,770,000). Costs of the surveyor for the preparation of the surveyor report would be a head of costs incurred towards the assessment of damages. Giving credit for the payments made by the plaintiff; the damages in respect of the plaintiff's loss of bargain are HK$756,600 (HK$5,038,000 - HK$2,770,000 - HK$503,800 - HK$1,007,600).

9. Judgment is awarded to the plaintiff in the sum of HK$756,600.

10. Basing on the decision of Komala Deccof [1984] HKLR 219 the plaintiff also sought the award of commercial interest. In light of the present economic climate and the verbal evidence of the surveyor that the current mortgage loan rate was usually granted 2.5% to 2.6% below prime lending rate, I am of the opinion that the award of 2% below prime lending rate would be a reasonable award of interest to cover the loss of profit of the plaintiff.

11. Commercial interest is awarded on the judgment sum at 2% below prime lending rate from the date of the writ until judgment. Judgment interest accrues from the date of judgment at judgment rate until payment.

12. I also award costs of this assessment hearing to the plaintiff against the defendant, to be taxed if not agreed, with certificate for counsel.