WU HAI YAN v. LI CHI LUNG

DCCJ 1021/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL JURISDICTION

ACTION NO. 1021 OF 2008

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J U D G M E N T

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Introduction

1.  This is an action for assessment of damages after judgment was entered for the Plaintiff on 1^st August 2008 in respect of the deposit paid to the Defendant in the sum of HK$31,900.00 with interest and further damages to be assessed and cost.  I have to determine whether the Plaintiff sustained further damages and (if so), the quantum of the damages.

NOTICE OF HEARING

2.  The Plaintiff’s solicitors made a mistake on the date of the hearing of the assessment of damages.  On 15^th June 2009, I fixed the said hearing on 22^nd September 2009 in Court 47 but it was drawn up as 21^st September 2009 in Court 47.  The Plaintiff’s solicitors discovered the said mistake on or about 18^th September and notified the Court accordingly.  Measure was taken to check if the Defendant appeared on 21^st September 2009 in Court 47.  Despite various calls for Defendant’s name on 21^st September 2009, there was no response.  The Plaintiff also prepared the 8^th affirmation of Ng Yui Hung filed on 22^nd September 2009 in respect of the service of the notice of hearing fixed on 22^nd September 2009 by inserting through the letter box of the Defendant’s usual and last known address and leave the letter at the said address on 21^st September 2009.    I am satisfied that the Defendant was given sufficient notice of the hearing.

PLAINTIFF’S CLAIM

3.  The Plaintiff claims against the Defendant for further damages in the sum of HK$136,870.00 and pleaded it as “the loss of value of the Property being the difference between the contracted price under the Agreement and the consideration of the subsequent mortgage sale HK$770,000-HK$638,000=HK$132,000.00”, in addition to the sum of HK$4,870.00, being the legal costs for the sale and purchase of the Property.

4.  The said claim arose out of the Defendant’s breach of the formal Sale and Purchase Agreement dated 4^th January 2007 in which it contains inter alia, the terms and conditions that:-

“If the Vendor shall for any reason (other than the default of the Purchaser) fail to complete the sale in accordance with the terms hereof, all deposits paid hereunder shall be returned to the Purchaser forthwith and it shall not be necessary for the Purchaser to tender an assignment to the Vendor for execution before taking proceedings to enforce specific performance of this Agreement and/or for damages (if any) over and above the said deposits as the Purchaser may sustain by reason of such failure by the Vendor.”

5.  Judgment has been given regarding the deposit as aforesaid.  The remaining question is the claim for further damages that the Plaintiff as the purchaser may sustain by reason of the Defendant’s failure to complete the transaction.

APPLICABLE LEGAL PRINCIPLES

6.  According to McGregor on Damages, 17^th edition, page 771, paragraph 22-005:-

“The normal measure of damages is the market value of the Property at the contractual time for completion less the contract price.  In cases where the failure to complete has been other than through a defect in title, this measure has been awarded from Engell v Fitch in the 1860s down to Diamond v Campbell-Jones in the 1960s and will continue to be awarded.  The same is now true for all cases, including those where it is a defect in title which has caused the failure to complete, the restrictive rule in Bain v Fothergill having been abolished in 1989.”

7.  The Plaintiff gave evidence and adopted her witness statement.  In gist, the present case is one of the Vendor’s failure to complete.  As a result, the normal measure of damages is the market value of the Property at the contractual time for completion less the contract price.

8.  It is beyond debate that the contract price in the present case is HK$638,000.00.  According to the said agreement, the completion date is fixed on or before 21^st September 2007.  On or about 7^th November 2007, the said property was sold by the Defendant’s mortgagee bank to one Li Shing Kim at the price of HK$770,000.00.

9.  For the purpose of this assessment, the Plaintiff adopted the figure of HK$770,000 in the pleading to calculate the amount of damages.  Mr. Liu King Tong, the Plaintiff’s expert on property valuation, confirmed and adopted his valuation report dated 6 July 2009.  He assessed the market value of the Property as at 18^th October 2007, 7^th November 2007 and 29^th November 2007 in the respective sums of HK$785,000.00, HK$808,000.00 and HK$818,000.00.

10. I clarified with him on his assessment of the market value of the Property as at 21^st September 2007 because it was the contractual date of completion between the parties herein.  He opined that by referring to the estimated value of the closest date to 21^st September 2007, i.e. 18^th October 2009, there should be 2% downward adjustment.  The said 2% was based on the 2 indices commonly used in real property market and cited at p.5 of his report.  In short, the estimated value of the Property as at 21^st September 2007 is HK$770,000.00.

11. I accepted his assessment with the support of the best comparables.  And the said figure is also supported by the price obtained from the sale by the Defendant’s mortgagee’s bank.

CONCLUSION AND ORDERS

12. As a result, the quantum of damages is assessed at HK$132,000.00, being HK$770,000 minus HK$638,000.  In addition to the wasted legal costs in the sum of HK$4,870.00, the total amount of damages awarded is HK$136,870.00.    The said sum shall carry interest at the judgment rate until full payment.

13. Cost of and occasioned by the assessment of damages assessed summarily in the sum of HK$43,318.00 is payable by the Defendant to the Plaintiff forthwith.