WING WONG COMPANY LIMITED v. CHUI YUK MING

1983 No.10099

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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ASSESMENT OF DAMAGES

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    This action arose out of a sale and purchase agreement dated 4th February, 1980, whereby the Plaintiff agreed to sell to the Defendant the property known as Flat A, 17th Floor, Block B (known as Beverley Heights) Belair Gardens, Sha Tin ("the property").

    The evidence before me consisted of 2 witnesses, Mr. Godfrey Siu, assistant manager of the Plaintiff company; and Mr. Tam Wai-koon, manager of the sales department of the Chinachem Group, of which group the Plaintiff is a member company. Also before me, by way of a Hearsay Notice, were P.1 the Sale and Purchase Agreement of 4th February, 1980; P.2 a Valuation Report dated 6th August, 1982; and P.3 an Assignment dated 5th July, 1985 whereby the property was eventually sold to a new purchaser.

    By the terms of P.1, the purchase price of the property was $1,257,000.00 of which the Plaintiff paid a deposit of $62,850.00. Thereafter, a sum of $188,550.00 was to be paid by 10 equal monthly instalments, the first to be paid within 7 days of the date being notified of completion of Belair Gardens to the roof and thereafter on the 1st of each month. The balance of $1,005,600.00 was to be paid within 7 days of the date being notified of the issue of an occupation permit of the relevant part of Belair Gardens.

    The Defendant failed to pay any of the 10 monthly instalments.

    On 27th March, 1982, the Plaintiff's solicitors notifed the Defendant of the issue of the occupation permit and requested the Defendant to complete the purchase on or before 3rd April, 1982. The Defendant failed to complete the purchase and on 1st May, 1982, the Plaintiff's solicitors gave the Defendant notice of the rescission of the Agreement.

    On 5th July, 1985, by P.3, the property was sold to a new purchaser for the sum of $698,997.00. By the Valuation Report P.2, the property was valued at $818,000.00 at 6th August, 1982.

    This action was commenced on 5th August, 1983. Originally, the Defendant was represented and filed a Defence. Eventually, on 19th April this year, Judgment was given in the Plaintiff's favour for, inter alia, damages to be assessed and interest.

    Mr. Yu submitted that the appropriate figure to be assessed in respect of damages is produced by the following calculation -

1. Mr. Yu conceded that the normal date at which damages would be assessed is the date when the contract was broken, but submitted that this rule is. not hard and fast and that if applying it would result in injustice to the Plaintiff, the Court has power to adopt a later date which is reasonable and just. He submitted that in the present case, although the only available valuation close to the breach of contract was P.2, which gave a market value in excess of the eventual sale price, the loss to the Plaintiff was not properly established by that price, because the property could not be sold during the intervening period. On this issue, the only evidence was that of Mr. Tam, who told me that the Plaintiff from time to time issued a price list relating to Belair Gardens which constituted an invitation for sale and purchase at the prices listed. The lists were produced as P.4. He told me that the property was continually listed for sale from 1982 to its eventual sale, and that the listed price was $759,780.00 until 19th December, 1984, when a discount of 8% was offered.

2. I see no reason to doubt that the Plaintiff attempted to minimise its loss by selling the property and that the earliest sale it could achieve was that in July, 1985. I shall adopt the resale price in assessing the loss to the Plaintiff and award as damages the sum of $495,153.00.

3. With regard to interest, Mr. Yu submitted that interest should be awarded as follows:-

(1) At the rate of 1.4% per month on $188,550.00, i.e. the 10 unpaid instalments, from 3rd April to 30th April, 1982.

(2) At the rate of 1.4% per month on the assessed damages from 1st May, 1982, to Judgment.

4. The 1.4% per month rate, is claimed by the Plaintiff to be the contractual rate provided for by Sale Agreement. That rate is mentioned in Clause 19 as being payable "on such part or parts of the purchase price as shall be payable by monthly instalments''. It is also mentioned in the Third Schedule in relation to the balance of the purchase price where delay in completion occurs for certain reasons. However, in, my view: the rate of 1.4 per month was only provided for where completion eventually took place, and I do not consider that that rate was contracted for in the event of the sale falling through completely by rescission of the contract.

5. I award interest as follows:-

(1) At the fate of 1.4% per month on $188,550.00 from 3rd to 30th  April, 1982, being the sum of $2,463.70.

(2) At the rate of 1% over prime rate from time to time on the asessed damages from 1st May, 1982, to Judgment, and at judgment rate thereafter.

6. Costs of this assessment are awarded to the Plaintiff.