YEUNG TAK MONG AND ANOTHER v. OR WING KEUNG

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.7281 OF 1998

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Assessment of Damages

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1. This assessment of damages arises out of judgment on liability entered against the defendant on 20^th November 1998, pursuant to a consent summons dated 16th October 1998. The notice of appointment of assessment of damages was filed by the plaintiffs on 20^th January 1999. In accordance with directions given on 23^rd November, 1998, the parties filed lists of documents and expert reports.

2. The notice of appointment was served on the defendant's former solicitors on 20^th January 1998. A notice to act in person was filed on 16th April, 1999. The defendant did not appear at the assessment. I had before me the plaintiffs' bundle of documents and bundle of court documents.

3. The plaintiffs' claim is as set out in the re-amended statement of claim filed on 23^rd July 1998. The parties entered into a provisional agreement for sale and purchase of land on 16th October 1997. The purchase price of the property was $5,130,000. The initial deposit and the further deposit, totaling $513,000, were paid in accordance with the terms of the agreement. The balance of the purchase price was to be paid on or before 5 p.m. on 16th March 1998. On that date, the defendant did not complete the purchase or pay any part of the balance of the purchase price in the sum of $4,617,000. It is the plaintiffs' case that, in failing to complete, the defendant repudiated the agreement and the plaintiff became entitled to treat the defendant's failure to complete as a repudiation of the agreement and by the issue of the Writ the plaintiffs accepted the repudiation.

4. There is no dispute that the purchase price of $5,130,000 was agreed between the parties.

5. Clause 22 of the agreement for sale and purchase dated 29^th October 1997 provides that "Should the purchaser fail to observe or comply with any of the terms and conditions herein contained (including without limitation any failure to pay the price or any part thereof in the manner, on the dates and within the time herein stipulated ... ... the Vendor may ... ... determine this agreement ... ... Upon determination of this agreement the vendor may resell the property ... by private contract ... Without prejudice to the vendor's right to recover the actual loss which may flow from the purchaser's breach of this agreement, on such resale any deficiency in price shall be made good and all reasonable expenses attending such resale or an attempted resale shall be borne by the purchaser provided that such resale is completed within six months from the date of termination of this agreement and such deficiency and expenses shall be recoverable by the vendor as and for liquidated damages. This clause shall not preclude or be deemed to preclude the vendor from taking other steps or remedies to enforce the vendor's right hereunder or otherwise or prevent the vendor from recovering, in addition to liquidated damages, damages representing interest paid or lost by him by reason of the purchaser's failure."

6. In mitigation of loss, the plaintiffs offered the property for sale through various estate agencies. On 30^th June 1998, through Centaline Property Agency Limited, the plaintiffs entered into an agreement for sale and purchase at the price of $2,980,000, with settlement taking place on 11th August 1998. The plaintiffs informed the defendant's solicitor of the proposed sale by letter dated 23^rd June 1998, but there was no response.

7. Pursuant to clause (b) of the judgment dated 20^th November, 1998, the plaintiffs are by declaration entitled to retain the deposit of $513,000 paid by the defendant for their own use and benefit.

8. It is the plaintiff's case that they have suffered the following damages as a result of the defendant's failure to complete -

9. The defendant challenged the reasonableness of the price for which the property was sold. He filed a supplementary valuation report dated 16th December 1998 which states that the open market value to be $3,900,000 at 7^th May 1998 and $3,170,000 at 14th July 1998 - at page 141 of the bundle. The planitiffs filed a surveyors' valuation dated 30^th December 1998, which states that the property's open market value to be $2,850,000 at 30^th June 1998 - at page 110 of the bundle of court documents. To complete the picture, the defendant also produced a valuation report which gives an open market value of $3,940,000 at 16th March, 1998 and the plaintiffs produced a valuation of $3,700,000 as at 4^th April, 1998.

10. Clearly, in 1998 the property market was less than robust and the valuations demonstrate considerable volatility in the market. Having considered the valuations. I am satisfied that the resale at $2,980,000 at 30^th June 1998 was reasonable in the circumstances and is supported by the plaintiffs' surveyor's valuation as at that date. I accept the plaintiffs' figures as to the other damages suffered. I assess the damages suffered by the plaintiffs, as claimed, in the sum of $1,759,264.06.

11. I order that the defendant do pay to the plaintiff interest on the damages at judgment rate from the date of judgment until payment.

12. I further order that the defendant do pay the costs of this assessment to the plaintiff, to be taxed if not agreed.