GREATLAND PROPERTY CONSULTANTS LTD v. CHARIS PATRIA LTD

DCCJ1444/2013 &
DCCJ 1446/2013
(Consolidated)

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1444 OF 2013

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IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1446 OF 2013

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DECISION

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Introduction

1. On 1 April 2015, judgment of this consolidated action was handed down (“the Judgment”) in which judgment was entered in favour of the plaintiff against both defendants and the counterclaims of both defendants were dismissed, with costs to the plaintiff.

2. On 13 April 2015, the defendants took out a summons for an order that the costs order nisi of the Judgment be varied that there be no order as to costs (“the costs summons”).

3. On 27 April 2015, the defendants took out another summons for leave to appeal against the Judgment (“the leave to appeal summons”).

4. The factual background of the case and the reasons for my decision were set out in detail in the Judgment so there is no need to repeat here. 

The costs summons

5. In essence, the main ground for the defendants to ask for no order as to costs is that there were pre-litigation and litigation misconducts on the part of the plaintiff. Therefore, the plaintiff should be deprived of its costs.

6. It is true that I found in the Judgment that Ms Lee was not a credible witness and she did misrepresent the identity of the purchaser at some stage.  However, I also found that the defendants already knew the identity of the purchaser at the time when the provisional sale and purchase agreements were signed.  When the defendants decided to proceed with the transactions, they chose to accept the service provided by the plaintiff.  Therefore, I see no reason why the defendants should not pay the commissions to the plaintiff.  It follows that the defendants should never have commenced these proceedings.  As the plaintiff ultimately succeeded in the claims, as the winner, I see no reason why the plaintiff should be deprived of its costs.

7. Base on the above reasons, the costs summons ought to be dismissed.

The leave to appeal summons

8. I now turn to the defendants’ application for leave to appeal against the Judgment.

9. The first ground is that as I found that the plaintiff committed a fraudulent misrepresentation, the plaintiff was not entitled to the commissions.  I agree that if the defendants decided to call off the transactions, the plaintiff should not be entitled to any commission.  However, as I found that the defendants found out the identity of the purchaser at the last minute, when the agreements were signed, the defendants were not affected by the misrepresentation at all. The defendants made a conscious decision to accept the service provided by the plaintiff and proceed with the transactions.  It follows that they should not be able to go back and say to the plaintiff that while they accepted the service they do not need to pay the commissions. 

10. In her submission, Ms Chong for the defendants submits that as a result of the plaintiff’s breach, the defendant had been discharged of their further contractual obligation.  I agree, to the extent that if the defendants chose to discharge.  However, the fact of the case was that the defendants elected to proceed.  Therefore, the defendants chose to accept the service of the plaintiff and they should pay the commissions.  I see no merit in this ground.

11. The second ground is that I have misplaced the burden of proving reliance on the defendants.  I agree that the wordings of paragraph 43 of the Judgment might lead to misunderstanding.  However, if reading with the preceding paragraphs, paragraph 43 plainly means that base on the evidence, I found as a matter of fact that the defendants did not rely on the misrepresentation.  It was the conclusion I drew after assessing the evidence.  I do not agree I have put the burden of proving reliance on the defendants.  I also see no merit in this ground.

12. Grounds 3 to 5 can be dealt with together.  In gist, the defendants complain that I made wrong finding of fact that Ms Chan knew the identity of the purchaser and that even if she knew, that does not mean the defendants had knowledge.

13. Concerning my finding of fact as to Ms Chan’s knowledge about the identity of the purchaser, I have set out my reasons for making such finding in the Judgment and there is no point to repeat here.  My short response is that I see nothing wrong for me to reach such conclusion base on the evidence of the witnesses. 

14. As to whether I erred in treating Miss Chan as the representee of the plaintiff’s misrepresentation and erred in imputing Miss Chan’s knowledge to that of the defendants for the purpose of reliance, my answer is base on the evidence, Miss Chan had been acting as the agent of the defendants all along.  Ms Lee had dealt with no one else from the defendants but Miss Chan.  Any information or instruction coming from Miss Chan was treated as information and instructions from the defendants.  By the same token, any information communicated to Miss Chan was deemed to be communicated to the defendants. 

15. At the trial, it has never been raised that Miss Chan was not the agent of the defendants.  Therefore, I see nothing wrong to treat Miss Chan as the representee of the plaintiff’s misrepresentation.  Also, as I found Miss Chan knew about the identity of the purchaser, there is nothing wrong to treat as if the defendants had the same knowledge.

16. In view of the above, I am of the view that none of the grounds of appeal put forward by the defendants has any real chance of success. Accordingly, I dismiss the plaintiff’s application for leave to appeal.

Conclusion

17. I make the following orders:

  (a)  the defendants’ summons dated 13 April 2015 be dismissed; and

  (b)  the defendants’ summons dated 27 April 2015 be dismissed.

18. Costs should follow the event.  I make an order nisi that the defendants do pay the plaintiff’s costs of these two summonses, to be taxed if not agreed, with certificate of counsel.  This cost order shall become absolute in the absence of any application to vary within 14 days of the date of this judgment.