LAU SIU WING v. WONG HONG AND OTHERS

HCA 10779 /1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 10779 OF 1998

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J U D G M E N T

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Introduction

1. This action is related to the purchase of a residential unit in Hang Tau Village, Sheung Shui, New Territories ("the suit property").

2. The plaintiff was the purchaser. According to the Re-Amended Statement of Claim, the 3rd defendant ("Fung") was the registered owner of the suit property. Further, the 1st Defendant ("Wong") signed a provisional agreement dated 3 July 1997 with the plaintiff as the beneficial owner and developer of the suit property ("the provisional agreement"). The plaintiff avers that the sale and purchaser should include the suit property and a garden of about 300 square feet ("the garden").

3. The 2nd defendant was the estate agent who procured the signing of the provisional agreement by Wong and the plaintiff ("the agent").

4. The plaintiff claims that Wong/Fung breached the provisional agreement and that the agent breached its duties as his agent.

Leave to The Agent to Re-Amend

5. On the first day of trial, the agent applied for leave to re-amend his Amended Defence. I granted leave to the agent to re-amend his pleading indicating that reasons for doing so would be given later.

6. The most substantial proposed re-amendments were set out in:-

(a) para. 1A(b) of the draft. This in effect avers that the provisional agreement provided for the sale of the suit property together with the right to use the garden. The original plea was in essence that the provisional agreement provided for the sale of the suit property together with the garden;

(b) para. 1A(d) thereof. The original plea was about an implied term regarding the time before which Wong has to show good title to, and convey, the suit property together with the garden. The proposed change to this part of the pleading was the same as that in (a) above, namely, the sale was related to the suit property only (together with the right to use the garden);

(c) para. 1B thereof which is related to a previous sale and purchase of a residential unit nearby. The agent also introduced that unit to the plaintiff. The agent relies on the previous sale for the purpose of rebutting the plaintiff's claim that he was acting in the mistaken belief that the garden was included as part of the suit property.

7. The plaintiff objected to the application principally on the following grounds:-

(1) the proposed para. 1A(b) amounted to a withdrawal of an admission that the sale under the provisional agreement was related to both the suit property and the garden. Such an application should normally be supported by evidence to explain why leave to withdraw the admission should be given;

(2) the proposed para. 1A(d) has not specified how the term came to be implied;

(3) the application for leave was only made at the time of trial.

8. Even if the proposed para. 1A(b) and (d) should amount to a withdrawal of an "admission", and even if the normal practice is that evidence should be filed to support the application to withdraw, the so-called "admission" only concerned the way in which the terms in a written contract were to be construed. It was thus only related to a point of law. I infer that the application to re-amend this part of the pleadings resulted from a change of the legal advisers' view as to the proper meaning of those terms, and not any change in the agent's factual case. Indeed, no such evidence was adduced or relied upon by the agent. The plaintiff has properly not argued that the original plea constitutes a bar or estoppel which should prevent the agent from raising the new issue. It has not been argued that allowing the "admission" to be withdrawn would be unjust or unfair to the plaintiff: Hong Kong Civil Procedure 2001, para. 27/3/9. In these circumstances, I do not find the plaintiff's argument in sub-para. (1) above to have substance.

9. As regards the plaintiff's argument in sub-para. (2) above, the plea of an implied term already appeared in the Amended Defence. Further, because no new or additional evidence will be adduced by the agent regarding the plea at para. 1A(d) of the draft, this plea will most likely stand or fall with that set out in para. 1A(b) of the draft re-amendment. Since I already decided to grant leave to the agent to rely on para. 1A(b) of the draft, no prejudice will likely be caused to the plaintiff by allowing the agent to put forward this plea of an implied term.

10. As regards the lateness of the application for leave, the plaintiff has not argued (and there is nothing to suggest) that the application would cause the plaintiff irreparable prejudice which cannot be compensated for by costs. At one stage, plaintiff's counsel indicated that the plaintiff might ask for an adjournment if leave to re-amend was granted to the agent. However, no such application was in fact made.

Issues Raised by the Pleadings

11. The plaintiff alleges that Wong was not in a position to sell the suit property or the garden to the plaintiff because Wong was not the owner. Further, the vendor (be it Wong or Fung) failed to convey good title to the suit property because:-

(a) the requisitions on title were not answered;

(b) the vendor has no title to convey the garden.

12. The plaintiff alleges that the agent, through his staff (Mr. Tony Wong and Ms. Anna Lam (respectively "Tony Wong" and "Anna Lam")), breached his duty by misrepresenting that the garden would be sold together with the suit property. The plaintiff at one stage thought that Anna Lam was called Anna Wong but nothing material turns on this.

(a) Wong/Fung

13. Wong/Fung's defence can be summarised as follows:-

(a) Wong signed the provisional agreement as Fung's agent under a power of attorney;

(b) it was expressly provided by the provisional agreement that the suit property was (merely) "Ground Floor of a building erected on Section A of Lot No. 396 in Demarcation District No. 94" with a licence to use the garden. It was never the parties' intention that the sale of the suit property would include the garden;

(c) in relation to the requisitions raised by the plaintiff, Fung says that they have been satisfactorily answered;

(d) the plaintiff has affirmed the transaction and/or waived his right to rescind the provisional agreement;

(e) the plaintiff has partly performed the provisional agreement by entering into possession of the suit property and was thereby estopped from rescinding the provisional agreement.

(b) The Agent

14. The summary of the agent's defence (set out in the Amended Defence) is:-

(a) the plaintiff was a speculator and/or investor of incomplete village house and was well aware of the procedure, operation and risk of the purchase of such house;

(b) the area of the lot (in which the suit property and the garden were located) was about 2,002 square feet. The area of the lot other than the site area of the building (about 700 square feet) was about 1,302 square feet. Hence, the area of the lot was more than sufficient to provide for the garden;

(c) the plaintiff sought to terminate the provisional agreement in view of the sharp fall of the market price of small village houses since the economic downturn in October 1997.

15. The Re-Amended Defence raises the additional defence set out under the heading "Leave to the Agent to Re-Amend".

Issues Raised at Trial

16. The issues which need to be determined by the end of the trial have been set out in the respective written final submissions of the parties. They will be dealt with under the headings and sub-headings below. As can be seen from the discussions below, some of the issues raised at trial go beyond those raised in the pleadings. On the other hand, some of the pleaded points are no longer relied upon at the end of trial.

17. The credibility of witnesses is important to the determination of many of the issues. To avoid any doubt, although the witnesses' credibility is dealt with from time to time under separate headings or sub-headings below, I have borne in mind the need to consider credibility from an overall point of view. I also bear in mind the need to consider the totality of the evidence adduced at trial when considering this matter.

Should Wong/Fung be Liable?

18. This will be dealt with under the sub-headings set out below. For the reasons given below, I conclude that pursuant to the provisional agreement, Wong/Fung should give good title both as regards the suit property and the garden. The defence does not contend that Wong/Fung could give title to the garden. They are therefore in breach of the provisional agreement.

(a) Was Wong Able to Sell?

19. Although it has not expressly been abandoned, the complaint that Wong was not the owner of the suit property or the garden no longer appears in the plaintiff's written final submission, nor was the point referred to by plaintiff's counsel in court.

20. In any event, insofar as this matter is still relied upon by the plaintiff, I find that it has no substance. Wong's obligation under the provisional agreement was to convey the suit property (whether together with the garden will be dealt with below) at the time of completion. The circumstances of this case, such as Wong and Fung were all along represented by the same firm of solicitors and that the draft formal agreement named Fung as the vendor, show that it is highly probable that Wong would have been able to procure Fung to convey the suit property (the position regarding the garden will be dealt with below) by that time.

(b) Did the Sale Include the Garden?

21. In order to understand the parties' respective arguments (and therefore the issues) relating to this aspect, the background facts need to be set out first; this will be followed by other matters under the sub-headings below.

The Previous Sale

22. The provisional agreement for the previous sale was dated 11 March 1997 and was a Chinese pro forma document of the agent. It was signed by the plaintiff's wife and related to a development project called "Bo Shu Garden" (寶樹花園). The following part is relevant to this aspect:-

"物業認購協議協約

該物業: 新界上水坑頭村 DD 94 約 Lot471/B4 地段之 一樓連地下花園 連約 280 平方呎土地使用權 ... ".

The translation of the above (provided by the parties) is:-

"AGREEMENT FOR CONTRACT OF PURCHASING PROPERTY

The Property: Hang Tau Village, Sheung Shui, New Territories DD 94 Demarcation District Lot 471/B4 Lot of which First Floor together with the Ground Floor garden together with about 280 square feet the entitlement of usage of the land ... ".

The underlined parts were originally blank spaces for details/particulars to be filled in. The characters which now appear at those spaces were filled in by hand by the agent's staff.

23. The previous sale is said to be relevant to 2 matters:-

(1) it is one of the surrounding circumstances which need to be taken in account when construing the terms of the provisional agreement: ICS Ltd. v. West Bromwich Building Society [1998] 1 WLR 896, 912-913;

(2) whether the plaintiff was under a mistaken belief that the garden formed part of the property to be conveyed under the provisional agreement.

The Provisional Agreement

24. The provisional agreement is also a Chinese pro forma document of the agent. It was related to the sale of a unit in a development project called "Golf View Garden" (嘉芙花園). The part relevant to this aspect is:-

"物業認購協議協約

該物業: 新界上水坑頭村 DD 94 約 Lot 396A 地段之 一樓, 地下連花園約300呎 連約 --- 平方呎土地使用權 ... ".

The certified translation of the above is:-

"AGREEMENT FOR CONTRACT OF PURCHASING PROPERTY

The Property: Hang Tau Village, Sheung Shui, New Territories DD 94 Demarcation District Lot 396A Lot of which Ground Floor, First Floor together with the garden about 300 ft together with about --- square feet the entitlement of usage of the land ... ".

Similarly, the underlined parts were originally blank spaces for details/particulars to be filled in. The characters which now appear at those spaces were filled in by hand by the agent's staff.

Testimony Regarding the Signing of the 2 Agreements

25. The parties' testimony regarding the signing of the agreement for the previous sale is essentially undisputed. The witnesses' testimony about the signing of the provisional agreement, however, puts forth different versions of fact (summarised below). The plaintiff's witnesses regarding this were himself and Ms. Fung Sze Wai, his wife ("the plaintiff's wife" or "his wife" as appropriate). The agent's witness regarding this was Lam So Mui (that is, Anna Lam). The agent also testified.

26. The background relevant to the previous sale and the sale involving the suit property can be summarised as follows. According to the agent himself, he was not present when the plaintiff signed the 2 respective provisional agreements in question. He was the one who obtained the business from Wong for becoming the agent for selling some of the units in Hang Tau Village. He understood from Wong that purchasers of the units would only be given a right to use the gardens but no title would be conveyed. The agent's Chinese pro forma agreements reflected that understanding, namely, they expressly referred to the right to use the land by stating:-

"...連約 ______ 平方尺土地使用權 ... " (in English, "together with about ______ square feet the entitlement of usage of the land ... ").

Further, it is the agent's case that Tony Wong has left his employment with the agent and cannot be located.

27. In relation to both transactions, Wong and his brother (Wong Tai Raymond) ("Raymond Wong") both testified that the agent's staff who they contacted in relation to the sale of the units in Hang Tau Village was mainly Tony Wong. They said that Tony Wong was well aware that the garden should not be included in the conveyance (in the sense that no title was to be conveyed). The last statement was confirmed by the agent's testimony.

28. In relation to the previous sale, it is common ground that Tony Wong prepared the provisional sale and purchase agreement before it was signed by the plaintiff's wife and the vendor respectively. The subsequent conveyance was uneventful. The related formal agreement and assignment were duly executed by the plaintiff and the vendor.

29. In relation to the suit property, according to the witness statements of the plaintiff and his wife, the plaintiff was interested in buying a unit in a village house in mid-1997. The couple went to view some units in Hang Tau Village, Sheung Shui and was brought by Anna Lam to view the suit property. Anna Lam told them the suit property included the garden. The plaintiff was attracted by the garden and told Anna Lam about this. Anna Lam then told the plaintiff she would confirm with the owner to ensure that the suit property would be sold together with the garden. After viewing the suit property, the couple and Anna Lam went to the agent's office. The couple was attended to by Tony Wong. Tony Wong told them he would telephone Wong and ask whether the garden could be sold together with the suit property. After a telephone call, Tony Wong told them there was no problem. The plaintiff's wife was cautious and asked Tony Wong to specify the sale of the garden clearly in the provisional agreement.

30. According to the witness statement of Anna Lam, she was on duty at the relevant time. She agrees that the plaintiff viewed the suit property but she denies that there was any warranty, representation or undertaking being given by her or by anyone else in her presence. During the trial, Anna Lam testified to the effect that:-

(a) neither the plaintiff nor his wife requested the garden to be included as the property to be sold under the provisional agreement;

(b) she had told them the garden could not be so included;

(c) if the garden had in fact been so included, the provisional agreement would have expressly stated that, either next to the characters "花園" (meaning "the garden") or at the "Remarks" clause near the end of the provisional agreement;

(d) in relation to (c) above, there are indications in the provisional agreement that the plaintiff and his wife were careful in the choice of words for things like payment of premium, the number of air-conditioners or the time for paying commission to the agent.

31. Both the testimony of the agent's witnesses (including the agent himself) and the previous sale show that Tony Wong was fully aware of Wong's instruction that no title to the garden would be conveyed to the purchasers. That must have been the reason why Tony Wong wrote:-

"together with about 280 square feet the entitlement of usage of the land"

in the provisional agreement for the previous sale. However, in relation to the suit property and the garden, Tony Wong put down in the blank space:-

" Ground Floor, First Floor together with the garden about 300 ft ".

32. The reference to "First Floor" may well have been a mistake. But the inclusion of the garden in the description of the property to be sold (coupled with the crossing out of the space for inserting the area for the right to use land) is inconsistent with the agent's case that no undertaking, warranty or representation has been made to the plaintiff. Instead, it supports the plaintiff's case. In particular, I do not find Anna Lam's testimony at para. 30(b) above to be credible because the assertion has not been made in her witness statement. The defence testimony did not explain why the provisional agreement was prepared by Tony Wong in a way different from the previous sale.

33. By reason of the above matters, I accept the plaintiff's evidence regarding this point and reject the defence evidence insofar as it conflicts with the plaintiff's said evidence.

Post-Provisional Agreement Correspondence between Solicitors

34. In law, words and acts of contracting parties subsequent to the contract are not admissible for the purpose of construing the meaning of the terms of the contract: Chitty on Contracts (1999) 28th Ed., para. 12-124. They are however relevant to the credibility of the witnesses' testimony.

35. The related correspondence in question lasted from about 26 November 1997 to about 16 January 1998. The more important ones can be summarized as follows.

36. A draft formal sale and purchase agreement ("the draft S & P agreement") was enclosed with a letter dated 26 November 1997 from Wong/Fung's solicitors. The second schedule of the draft S & P agreement sets out the description of the property to be conveyed:-

"ALL THAT the estate right title benefit and interest of and in ALL THAT one equal undivided 3rd parts or shares of and in ALL THAT ... SECTION A OF LOT NO.396 IN DEMARCATION DISTRICT NO. 94 ... TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy ALL THAT GROUND FLOOR (together with Court-Yard appertaining thereto) of the Building".

37. By a letter dated 19 December 1997, the plaintiff's solicitors returned the draft S & P agreement. The only addition to the above description was:-

"... (together with Court-Yard of about 300 sq. ft. appertaining thereto) ... " (italics supplied).

38. Nothing further was mentioned about the garden until the letter dated 23 December 1997 from the plaintiff's solicitors:-

"We are instructed by our clients to put on record that according to the Provisional Agreement dated 3rd July 1997, the property intended to be sold to our clients includes a Garden of about 300 sq. ft. However, there is no mention of the Garden in the [draft S& P agreement] ...

Our clients insist on to have [sic] the Garden, be it the right to use it, to be included and/or assigned and/or licenced to them upon completion ... ".

39. By a letter dated 31 December 1997, solicitors for Wong/Fung stated in short that it was originally intended that the right to use the respective portions of garden would be granted to all owners but that was not feasible because the building licence to one of the lots had not been complied with.

40. In a letter dated 16 January 1998, the plaintiff's solicitors said:-

"... As we have raised in our letter to you dated 23rd December 1997 that the captioned property is intended to be sold to our client with the inclusion of a garden ... ".

41. Wong/Fung argue that the above line of correspondence shows that the plaintiff was not concerned with whether the garden was included in the conveyance. I do not agree. It is common ground that the reference to "the Court-Yard" in the above letters was a reference to the garden (see especially the addition of the words "of about 300 sq. ft." by the plaintiff's solicitors to the "Court-Yard"). The description set out in the second schedule was expressed in a way commonly used by conveyancers in Hong Kong to convey title to the purchaser. It is not (and cannot be) disputed that the part of the second schedule regarding:-

"ALL THAT the estate right title benefit and interest of and in ... TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy ALL THAT GROUND FLOOR... of the Building"

was for the purpose of conveying title together with the sole and exclusive right of possession of the suit property to the plaintiff. Such being the case, when the second schedule also stated that:-

"... together with Court-Yard appertaining thereto ... ",

the title and sole and exclusive right of possession of the Court-Yard (meaning the garden) was also to be conveyed to the plaintiff. Alternatively, if such provision did not in fact intend to convey such title, on a fair reading of the second schedule it is at least capable of having such meaning.

42. In view of the above, I do not find the response of the plaintiff's solicitors in the subsequent correspondence to be inconsistent with the plaintiff's testimony or evidence that the parties intended that the garden was to be sold together with the suit property. Arguably at least, the second schedule in the draft S & P agreement supports the plaintiff's case.

43. Post-provisional agreement tape-recorded conversations between the plaintiff and Wong were relied upon by the defence. I consider that they were in the nature of without prejudice discussions. No admission was made therein by either party nor was there any matter which is sufficiently clear and unambiguous to advance either party's case in this action.

Was the Garden Included? Reasons & Conclusion

44. This is essentially a question of construction of the terms of the provisional agreement. Before going into the details of this issue, it is useful to remind ourselves of the relevant general principles. They were set out in the ICS Ltd. case at pp. 912-913 and read as follows:-

"The principles may be summarised as follows:

(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.

(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact", but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man.

(3) The law excludes from the admissible background the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life. The boundaries of this exception are in some respects unclear. But this is not the occasion on which to explore them.

(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749.

(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they plainly could not have had. Lord Diplock made this point more vigorously when he said in Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 at 201: if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense."

45. It is trite law that an objective test is to be adopted when the court ascertains the parties' intention by construing the true meaning of the contract terms: Chitty, para. 12-043.

46. As stated above, I accept the plaintiff's evidence regarding the circumstances under which the provisional agreement was signed. Taking into account (1) the way in which the property to be sold was described in the provisional agreement and (2) the circumstances surrounding its execution, I conclude that the parties intended the suit property was to be sold together with the garden and Wong/Fung have agreed to convey good title to both to the plaintiff. Further, the agent has (through Tony Wong and Anna Lam) represented that the garden was included in the sale.

47. Having so concluded, it is unnecessary to consider the subtle point raised by the plaintiff as to whether Wong/Fung were in a position to give a legally binding licence regarding the garden which will bind the licensor's successors-in-title.

(c) The Plaintiff's Mistaken Belief

48. By reason of the conclusion above, there is strictly no need to deal with this point. I shall do so for completeness.

49. The plaintiff also relies on the doctrine of mistake if the court should find that the provisional agreement did not provide for the garden to be sold together with the suit property. When questioned by the court, plaintiff's counsel clarifies that he relies on the unilateral mistake on the plaintiff's part as to the terms of the provisional agreement. He also confirms that no reliance would be placed on the doctrine of non est factum.

50. This point only arises if and when the court has accepted the defence case regarding the circumstances under which the provisional agreement came to be signed by the parties. In other words, the finding would have to be that the parties did not intend the garden to be included in the sale, that the plaintiff did not specifically request it to be included and there was no misrepresentation by the agent.

51. A unilateral mistake as to the terms of a contract can only be set up if the mistake is known to the other party: see Chitty, para. 5-034 to 5-044, especially at para. 5-034. If I should find in favour of the defence (as stated above), there would have been no evidential basis to support this part of the plaintiff's case.

(d) Requisition on Title

52. At the end of the trial, the plaintiff only relies on 1 requisition on title. As I already found in the plaintiff's favour, this point is only discussed for the sake of completeness. The requisition arose as follows. In a Succession to Property (Memorial No. 98258), one Li Sz Fung and one "Li Fuk Chuen" succeeded to the suit property. In a Succession to Property (Memorial No. 160150) Li Sz Fung succeeded 1/2 share of and in the suit property from a "Li Fuk Tsun".

53. In a letter dated 3 December 1997, the plaintiff's solicitors asked Wong/Fung's solicitors whether the 2 names belonged to the same person.

54. Solicitors for Wong/Fung replied on 23 December 1997:-

"We are of the view that the names of 'LI FUK TUEN' and 'LI FUK CHUEN' both refer to the same person despite the different translation of the Chinese word '傳'".

The reference to "TUEN" was probably an error because the name in Memorial No. 160150 was "TSUN".

55. On 30 December 1997, the plaintiff's solicitors asked for documentary proof that the 2 names were one and the same person.

56. In their letter of 3 January 1998, Wong/Fung's solicitors relied on the fact that both documents were issued by the District Land Officer who must have been satisfied that the 2 names referred to the same person. The solicitors also relied on the Limitation Ordinance and stated that any claims would have been barred because it accrued for more than 20 years.

57. The plaintiff's solicitors did not desist. From 16 January 1998 onwards, the parties' solicitors also disagreed on whether Memorial No. 160150 constituted the intermediate root of title.

58. Finally, on 20 February 1998, solicitors for Wong/Fung wrote:-

"Without prejudice to our replies in our previous correspondence ... , we have sent our letter to District Office, Tai Po for their comment and confirmation (if any) in respect of the clerical error ... ".

59. On 23 February 1998, before the reply from the District Office, Tai Po was received, the plaintiff terminated the provisional agreement.

60. On 13 March 1998, Wong/Fung's solicitors enclosed a certified copy of the letter dated 4 March 1998 from North District Office. The enclosed letter reads:-

"Please be informed that the name LI Fuk-tsun appeared in Memorial No. 160150 and the name LI Fuk-chun appeared in Memorial No. 98258 refer to one and the same person".

The reference to "Fuk-chun" should have been "Fuk-chuen".

61. The plaintiff relies on Chudai (HK) Development Co. Ltd. v. Portia International Ltd. [1992] 1 HKLR 350. The discrepancies in that case were (a) the name "Madam Lam Chun" in one document and "Madam Lam Chun alias Lam Yin-chor" in another, and (b) the name "Yip Yee" in one document and "Yip Yee alias Chan Yip-sang" in another. The court held that:-

"Mr Mok for the purchaser submits that a bare assertion by an interested party is never sufficient to repair a break in the chain of title" (p. 354 at line 30);

"... it is not a case by any manner means of a bare assertion by an interested party. The husband is not an interested party. The effect of his statutory declaration appears from the answer to the fifth requisition [the husband confirmed the two names to refer to his wife] ... " (p. 354 at lines 35 to 40);

"... the administrator says in his statutory declaration that his mother, whose maiden name was Yip Yee, was commonly known as Chan Yip-sam... That is sufficient evidence of identity in the present circumstances ...

Where a name is used in one document in the chain of title, and that name together with an alias is used in another document in that chain, the evidence required to put identity, and accordingly title, beyond reasonable doubt is generally less than the evidence which would be required to do that if unrecognizably different names had been used" (p. 355 at lines 1 to 8).

62. The last observation (above) of the court in the Chudai (HK) Development case applies equally to this action although the facts herein are dissimilar.

63. The factors in favour of Wong/Fung are:-

(a) the discrepancy here only related to one word out of three;

(b) although the spelling was different, the 2 words were phonetically similar;

(c) it is a well known fact that in Hong Kong the same Chinese character may be given a slightly different spelling in English;

(d) there was a confirmation from the authority responsible for registering the 2 instruments.

on the other hand,

(1) it is possible that the 2 names in fact refer to 2 different persons;

(2) there is no basis for concluding that the confirming authority has actual knowledge that the 2 names refer to one and the same person. No reason has been given by the confirming authority as to how the confirmation could be given.

64. This is a borderline case but, bearing in mind the high standard of proof a vendor needs to surmount when proving his title, I cannot be satisfied that there is no reasonable doubt arising from the differently spelt words.

65. Hence, even if the letter from North District Office had been sent to the plaintiff before 23 February 1998, the requisition would still have not been sufficiently answered.

(e) Was There Conduct Amounting to Affirmation/Estoppel?

66. In the Re-Amended Defence and Counterclaim, Wong/Fung rely on the following matters regarding this point:-

(1) the plaintiff has made alterations to the garden;

(2) on 21 December 1997, the plaintiff represented to Raymond Wong that the plaintiff would be going to the plaintiff's solicitors to complete the transaction within 2 days and asked for (and obtained) the keys to the suit property;

(3) the plaintiff has had the use, occupation and enjoyment of the suit property since 21 December 1997 and has carried out substantial renovation there;

(4) in his capacity as the owner, the plaintiff has rented out the suit property from 21 December 1997 to June 1998. The tenancy agreement was signed on 30 November 1997.

67. I agree with the plaintiff's argument that conduct occurring before the discovery of the lack of title over the garden by the plaintiff cannot properly be considered as acts of affirmation, waiver or estoppel: a person can only affirm or waive (or be estopped) if he acts in a certain way after he became aware of the true state of affairs.

68. In relation to the plaintiff's conduct since, or was concurrent with, the time of the correspondence passing between the parties' respective solicitors, I do not see how a person's conduct can be said to amount to affirmation or waiver (or estoppel) when at the same time his legal advisers were insisting on his rights resulting in disputes over matters which included Wong/Fung's ability to give title as regards the garden.

69. For the above reasons, I do not find there is sufficiently clear and unambiguous evidence to show that the plaintiff's conduct amounted to any waiver or affirmation of the provisional agreement.

70. The same reasons and conclusion also apply to the plaintiff's alleged part performance of the provisional agreement and/or estoppel.

Should The Agent be Liable?

71. For the reasons given above under the heading "Should Wong/Fung be Liable?", I conclude that the agent has breached its duty by misrepresenting to the plaintiff that Wong/Fung were in a position to give good title as regards the garden. The agent is accordingly liable.

72. In fact, the agent admitted in his testimony that it is the duty of an estate agent to properly inform his client the true nature of a property.

73. When considering the credibility of the plaintiff's witnesses, I have borne in mind the agent's allegations that:-

(a) the plaintiff was a speculator and/or investor and was well aware of the procedure, operation and risk of the purchase of incomplete village houses;

(b) the plaintiff's motive for terminating the provisional agreement was the sharp fall of the market price since October 1997.

For the avoidence of doubt, I accept the testimony of the plaintiff's witnesses and reject that of the agent's witnesses insofar as there are inconsistencies between the two.

74. I reject the agent's argument that he was only the agent of Wong/Fung and not the plaintiff's agent. The agent was entitled to be paid commission by the plaintiff under the terms of the provisional agreement. Cheng Kwok-fai v. Mok Yiu-wah, Peter and Another [1990] HKLJ 440, 445E-G (a case relied on by the agent) was concerned with different facts and issues and cannot assist the agent in this action.

75. The plaintiff in the Cheng Kwok-fai case was the purchaser. He sued the vendors but not the estate agent. The plaintiff claimed that the area of the flat (the subject-matter of the action) was misstated to be 950 square feet (in fact 855.69 square feet) in a sketch of the flat given to him by the estate agent. In those circumstances, the court held that the representation in the sketch was not made on the vendors' behalf.

76. In the present case, there is direct evidence that the agent was fully aware of the true extent of the vendor's title. The pro forma provisional agreement was drafted by the agent with that in mind. In such circumstances, there is ample support in law that it was part of the agent's duty (whether in contract or in tort) not to misrepresent the true extent of the vendor's title to the purchaser (the plaintiff in this action). Whether the area of the Lot was more than sufficient to provide for the garden (see para. 14(c) above) is irrelevant to the agent's liability.

Counterclaim of Wong/Fung

77. By reason of the matters aforesaid, this should be dismissed. If it were necessary to make an award, I agree with the plaintiff that because no evidence on loss has been adduced by Wong/Fung, they should only be entitled to nominal damages. I assess this to be $1,000.

Relief / Quantum of Loss

78. Quite a number of the relief sought in the prayer for relief are either declaration orders or orders in the nature of declarations. Plaintiff's counsel does not insist on obtaining these orders. In view of the monetary award made below, I do not consider it necessary to grant those orders.

79. By virtue of the conclusion reached in regard to liability, judgment will be entered against Wong/Fung in the sum of $440,000 being the amount of deposit paid under the provisional agreement. There will also be a lien for the said sum together with interest thereon against the suit property.

80. The plaintiff also claims damages for the breach of the provisional agreement. It is well known that the real property market has fallen since the date of the provisional agreement. No evidence has been adduced as to show what damages have been suffered. No award will therefore made.

81. In relation to the plaintiff's claim for expenses incurred in decorating the suit property ($135,600 and $16,500), I agree with the argument of counsel for Wong/Fung that the documents produced were only quotations. There is no evidence of payment having been made. For this reason, this claim is also not allowed.

82. The plaintiff also claims damages against the agent. The only damage which the plaintiff has proved is the payment of the deposit of $440,000. Judgment will also be entered against the agent for this sum. The agent should also return the commission of $22,000 to the plaintiff because the plaintiff would not have entered into the provisional agreement if the true facts had been disclosed.

83. Interest on the said awards should be at judgment rate from the date of writ to the date of judgment and thereafter also at judgment rate until payment.

Costs

84. There is no apparent reason to justify departing from the usual rule that costs should follow the event. There will accordingly be a costs order nisi pursuant to RHC Ord. 42 r. 5B(6) that the costs of this action (including the costs of Wong/Fung's counterclaim as between the plaintiff and Wong/Fung) be paid by the defendants to the plaintiff to be taxed if not agreed.