XCHRX LAU PING YEE v. GRACE LAND INVESTMENT CO. LTD. and Another

1997 No. A3956

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

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J U D G M E N T

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INTRODUCTION

1. The Plaintiff ("the purchaser") agreed to buy a flat in Nathan Road from the 1st Defendant ("the vendor"). He paid the vendor a deposit of $100,000.00. The sale did not go ahead. According to the purchaser, the vendor was unable to pass a good title. In due course, the purchaser issued a writ against the vendor and the 2nd Defendant, the property agent who introduced the vendor and the purchaser. In the writ, the vendor claimed, amongst other things, the repayment of the deposit, and damages for breach of the provisional agreement for the sale of the property and misrepresentation. In addition, the purchaser registered the writ against the flat in the Land Registry. The consequence is that, for the time being, the vendor is unable to resell the flat.

2. There are four summonses before me today. The first three relate to the Plaintiff's failure to serve the Statement of Claim. Both the vendor and the 2nd Defendant have issued summonses seeking the dismissal of the action on that ground. The Plaintiff, for his part, has issued a summons seeking an extension of time for the service of the Statement of Claim. The last summons relates to the registration of the writ in the Land Registry. The vendor has issued a summons seeking its vacation.

THE SERVICE OF THE STATEMENT OF CLAIM

3. This is not the first time that the Plaintiff has had to issue a summons for an extension of time to serve the Statement of Claim. It is the third time that he has had to do so. On two earlier occasions, he was granted extensions of 14 days. His explanation - given in an affirmation which is not in the proper form because it is undated and does not contain his address - has still a number of evidential gaps in it. The purchaser says that he was waiting for a preliminary report from his surveyors, which was itself delayed because plans had to be obtained from the Building and Lands Department, but he does not explain why the unavailability of the report prevented the Statement of Claim from being served. In addition, he had an accident three weeks after the plans became available, but he does not explain why the Statement of Claim could not have been served within those three weeks, nor does he explain why his injury was of such a nature that he was unable to give instructions to his lawyers.

4. On the other hand, I have not discerned any prejudice caused to the Defendants by the delay in serving the Statement of Claim. The vendor's inability to resell the flat was caused, not by the failure to serve the Statement of Claim, but by the registration of the writ. Moreover, when the purchaser's time for serving the Statement of Claim was extended for a second time, the master did not think it appropriate to make an "unless" order. On balance, I think that the purchaser should be given one last opportunity to serve the Statement of Claim. Accordingly, on the purchaser's summons filed on 4th July, I extend his time for serving the Statement of Claim by 7 days from today. I also order that unless he serves his Statement of Claim by 24th July, the action be dismissed with costs. As for the vendor's summons filed on 5th July and the 2nd Defendant's summons filed on 8th July, I make no order on those summonses.

THE VACATION OF THE REGISTRATION

5. In addition to his monetary claims against the Defendants, the purchaser claims a declaration that he is entitled to a lien over the flat for the deposit and the costs of the action. Mr. Stephen Finley for the purchaser argues that the purchaser is also entitled to a lien for interest on the deposit, for the costs of investigating title, and for the damages claimed. However, it is not claimed in the writ that the Plaintiff is entitled to a lien for these monetary claims. In those circumstances, Mr. Finley asked for leave to amend para. 4 of the indorsement on the writ, but I do not think that I should grant him leave in that informal manner. Mr. Finley also says that the draft Statement of Claim which he has prepared, and which is now ready for service, makes the proper claims, and that Ord. 18 r. 15(2) of the Rules of the High Court permits that to be done despite the terms of the writ. That may be so, but the fact is that the Statement of Claim has not yet been filed, and at the moment what it is proposed that the Statement of Claim will plead is not something which I can take into account.

6. Mr. Lee Tung Ming for the vendor accepts that the purchaser can have a lien over the deposit if the agreement was rescinded without any fault on the part of the purchaser, but not the costs of the action. Although the vendor claims that the rescission of the agreement was the purchaser's fault, I obviously cannot decide that on the material before me. In any event, it is unnecessary for me to do so, because the vendor is prepared to pay the sum of $100,000.00 into court, in order to secure the vacation of the registration. Accordingly, the only issue relates to the costs of the action. On that issue, Mr. Finley has not persuaded me that the lien can in law extend to the costs of the action.

7. In those circumstances, the order which I make on the vendor's summons filed on 7th June is that, on condition that the vendor pays the sum of $100,000.00 into court within 7 days to be held in an interest-bearing account pending the determination of the action or until further order in the meantime, the registration of the writ in the Land Registry be vacated as soon as notice of the payment into court is served on the purchaser's solicitors. I shall hear from the parties as to the costs of the various summonses.