QIN TIAN v. 譚震

DCCJ3712/2014

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3712 OF 2014

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JUDGMENT

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Introduction

1.  This trial concerns a dispute over the identity of the vendor under an agreement made on 23 April 2014 (“the Agreement”) for the sale of a residential property known as Flat LD, 18^th Floor, Tower 6, The Capitol of LOHAS Park, Tseung Kwan O (“the Property”).  The plaintiff was the purchaser and the defendant the vendor.

2.  The plaintiff claims that the defendant had failed to answer a requisition concerning his identity prior to completion, namely whether the defendant was indeed the same person who previously acquired the Property under an assignment dated 29 July 2009 (“the 2009 Assignment”).  This failure, says the plaintiff, amounted to a repudiatory breach by the defendant, which the plaintiff subsequently accepted.

3.  On the other hand, the defendant contends that he had duly answered that requisition and that the purchaser’s refusal to complete was a repudiation of the Agreement.

Factual background

4.  The Property is part of a residential development known as LOHAS Park situated in Tseung Kwan O.  By the 2009 Assignment, an individual named 譚震 (“Mr Tam”) acquired the Property from the developer at a purchase price of about $4.5 million.  The execution clause stated that Mr Tam had been “identified by the production of his People’s Republic of China Identity Card No 440125196312241738 previously holder of People’s Republic of China Identity Card No 440125631224173” and that he had signed the assignment in the presence of Mr Lo Kai Shun, clerk to Yung, Yu, Yuen & Co (“Mr Lo”).

5.  Throughout the trial, the above two PRC identity cards were referred to as “ID Card A” and “the Old ID Card” respectively.

6.  The Agreement, the subject-matter of the dispute, was made between the defendant as vendor and the plaintiff as purchaser almost five years later, in April 2014.  The consideration was just over $5.2 million.  The defendant was identified in the First Schedule to the Agreement by his Chinese name “譚震” and described as holding a PRC identity card numbered 44162119631225323X.  It will at once be noted that, while the Chinese name of “譚震” was the same as that of the purchaser in the 2009 Assignment, this identity card number was different from that of either ID Card A or the Old ID Card, both of which appeared in that assignment as part of the description of Mr Tam, the previous purchaser.  The latest identity card was referred to as “ID Card B” at trial.

7.  The above discrepancy or mismatch in the identity cards formed the subject-matter of one of the requisitions raised by Chan, Wong & Yip, the solicitors then acting for the plaintiff (“CWY”).  At the heart of the query was whether the defendant was indeed Mr Tam.  If not, the defendant would not be able to give title of the Property to the plaintiff.  Thus the identity of the defendant was in issue.

The requisition

8.  Completion date was scheduled to be on or before 23 May 2014.  Under the Agreement, the defendant was under a duty, which is standard in this type of transaction, to prove good title pursuant to section 13 of the Conveyancing and Property Ordinance, Cap 219 (“the CPO”), and to give good title pursuant to section 13A of the CPO – see clauses 10(1) and (2).

9.  CWY raised the requisition on the defendant’s identity by a letter dated 15 May 2014.  (Other requisitions were raised in the same letter but those have since been duly answered.)

10.  By letter dated 20 May 2014, the defendant’s solicitors, Au, Thong & Tsang (“ATT”), replied as follows:-

“We now send you herewith copies of two PRC Identity Cards and certificate issued by the relevant authority, the contents of which are self-explanatory. Our client is prepared to provide a Statutory Declaration as to his identity to remove the alleged doubt.”

11.  Enclosed with that reply were:-

(a) a photocopy of the front and back of ID Card A, which stated the name of the holder to be “譚震” and his date of birth to be 24 December 1963.  The issuing authority was stated to be the Public Security Bureau of Zengcheng City and the effective date of the card was “5 July 2011 long-term” (translation);

(b) a photocopy of the front and back of ID Card B, which also stated the name of the holder to be “譚震” but his date of birth was 25 December 1963.  The issuing authority was stated to be the Public Security Bureau of Shenzheng City, Futian Branch and the effective date of the card was from 22 February 2005 to 22 February 2025; and

(c) a photocopy of a document entitled “Certificate” (translation) dated 13 September 2013, stamped with a chop containing the words “Public Security Bureau of Zengcheng City” (translation).  The content was to the effect that the holder of ID Card A was the same person as the holder of ID Card B and that the identity registration in Zengcheng City in the form of ID Card A was cancelled with effect from 7 February 2013.  This document was referred to as “Certificate No 1” at the trial.

12.  It is immediately obvious that the enclosures disclosed yet another discrepancy or mismatch, namely, the two different dates of birth as shown in ID Card A and ID Card B.  The two dates are one day apart.

13.  Not surprisingly, immediately on the following day, CWY wrote back raising a number of queries on ATT’s answer.  The main ones were, first, Certificate No 1 was just a plain copy with no letterhead and no signature; secondly, the body of the certificate referred to an “I” (“本人”) but the name and ranking of the individual was not disclosed anywhere in the certificate; thirdly, the discrepancy in the two different dates of birth raised a reasonable doubt that the holders of the two identity cards were two different persons; fourthly, there was no explanation as to why ID Card A was cancelled; and, fifthly, the certificate was not duly authenticated.

14.  CWY concluded as follows:-

“... neither you nor we, as Hong Kong qualified lawyers, are qualified or in a position to examine and/or clarify the genuineness and validity of the Certificate.

In view of the above, we opine that the Certificate is not proper conveyancing evidence to prove that the person holding the 1^st ID [ie, ID Card A] and the person holding the 2^nd ID [ie, ID Card B] is one and the same person, that is to say, the registered and beneficial owner of the Property.

We would further say that a Statutory Declaration as to identity to be prepared by your client without valid supporting documentary evidence would not satisfactorily deal with the above issue.”

15.  In response, on 22 May 2014, ATT sent to CWY a copy of a notarial certificate (stating that original was to follow) purportedly issued by an attesting officer of the Shenzhen Notarial Office dated 21 May 2014.  The content was to the effect that, first, the plain copy of Certificate No 1 was a true copy of the original and that the chop stamped on that certificate was a genuine chop of the Public Security Bureau of Zengcheng City.  This document was referred to as “Notarial Certificate No 1” at trial.

16.  CWY took the view that this reply did not fully address their queries and responded on the same day by stating the inadequacy of Notarial Certificate No 1 and reiterating that proper documentary evidence was required to certify the identity of the holders of ID Card A and ID Card B and explain the existence of the two identity cards and the two different dates of birth.

17.  On the following day, 23 May 2014, which was the scheduled completion date, ATT replied to CWY.  ATT were of the view that sufficient evidence had been provided to answer the requisition on the defendant’s identity.  They highlighted that the signature of Mr Tam in the 2009 Assignment and that of the defendant in the Agreement were identical and repeated that the defendant was willing to provide a statutory declaration to prove his identity.  Further, they considered that the issues as to why there were two dates of birth and why ID Card A was cancelled to be irrelevant to the issue of identity.

18.  Completion did not take place as scheduled on 23 May 2014.

19.  On 27 May 2014, ATT wrote to CWY attaching two further notarial certificates both dated 26 May 2014 (referred to as “Notarial Certificate No 2” and “Notarial Certificate No 3” respectively at trial).  They were both of a similar format to Notarial Certificate No 1 and issued by the same attesting officer.

20.  Under the cover of Notarial Certificate No 2 was a document dated 20 February 2013, referred to as “Certificate No 2” at trial, which content was to the effect that the holder of ID Card B had made an application to cancel his identity registration with the Zengcheng City authority due to his double registration. Under the cover of Notarial Certificate No 3 was a document dated 7 February 2013, referred to as “Certificate No 3” at trial, which content was to the effect that ID Card A had been cancelled with effect from 7 February 2013.

21.  In that covering letter, ATT stated that the requisition had been duly answered and that completion should take place on 30 May 2014.

22.  Some further letters were exchanged between the solicitors concerning the plaintiff’s right to receive the originals of the notarial certificates. 

23.  Then, on 29 May 2014, ATT sought to deal with the requisition via a different route.  They wrote to CWY as follows:-

“We have just received from Messrs. Yung, Yu, Yuen & Co., the former Solicitors acting for our client in his purchase of the Property, a copy of our client’s [Old ID Card] kept in their file. Copy of the said letter with the enclosure is enclosed for your reference.

We also enclose a certified true copy of the said People’s Republic of China Identity Card obtained from our client.

Please take notice that both copies of the said Identity Card are the same.

We also enclose a carbon copy of the preliminary Agreement for Sale and Purchase dated 29 February 2008 for his purchase from the developer provided by our client.

In the premises, we trust that there is no longer any doubt as to the identity of our client.”

24.  The covering letter from Yung, Yu, Yuen & Co was dated 28 May 2014 and addressed to ATT.  The letter simply enclosed for reference a copy of the Old ID Card, without any further explanation or elaboration.  The copy of the Old ID Card showed that the holder was “譚震” with a date of birth of 24 December 1963 and the validity of the card was from 31 March 1992 for 20 years.

25.  Three more letters were exchanged between the two firms of solicitors on 30 May 2014.  The most notable development here was that upon making their own enquiries, CWY had been informed by the Shenzhen Notarial Office that they had never issued Notarial Certificates No 1 to 3.  CWY reiterated their view that the requisition had not been satisfactorily answered.

26.  In reply to that, on 9 June 2014, ATT wrote back saying that the defendant had no knowledge about the allegedly forged notarial certificates, which had been handled by an agent in Shenzhen.  In the same letter, a further certificate dated 4 June 2014 stamped with the chop containing the words “Public Security Bureau of Zengcheng City” (translation) was enclosed.  The content was to the effect that the holder of ID Card A had had his identity registration with Zengcheng City cancelled with effect from 7 February 2013 due to double registration and that the individual was now holder of ID Card B.  This was referred to at the trial as “Certificate No 4”.  It can be seen that the content is effectively the same as the combined content of Certificates No 1 to 3.

27.  ATT then followed up by letter dated 16 June 2014 enclosing a notarial certificate dated 11 June 2014 certifying Certificate No 4 to be a true copy of the original and that the chop it bore was a genuine chop of the issuing authority (“Notarial Certificate No 4”).  ATT further proposed that completion should take place on 20 June 2014.

28.  CWY’s reply came two days later as follows:-

“Regarding your proposal to complete the subject sale and purchase transaction on 20^th June 2014, we regret to say that your client’s (i) failure and/or refusal to provide proper conveyancing evidence in clarifying his identity and proving his title to the Property by the stipulated completion date (which was first scheduled to take place on 23^rd May, 2014 and was subsequently at your specific request extended to 30^th May, 2014); and (ii) production of false instruments to prove his identity have already constituted repudiatory breaches of the terms and conditions of [the Agreement] and thus our client is not obliged to grant any further extension of time of completion to yours.”

29.  The letter went on to state the plaintiff’s right to claim, amongst other things, the return of deposit and damages.  However, “without prejudice to [the] aforesaid position and any of [the plaintiff’s] aforesaid rights and entitlements”, CWY put forward a proposal of “amicable settlement arrangements” which provided for an additional sum to be payable by the defendant and completion to take place in late June 2014.

30.  The proposal was rejected by ATT who, in their letter dated 18 June 2014, maintained that “good title, including the identity of the Vendor herein, had been proved before 30 May 2014”.

31.  No further correspondence was exchanged until on 22 July 2014 when Fung, Wong, Ng & Lam (“FWNL”) wrote to ATT saying that their firm now acted for the plaintiff, in place of CWY.

32.  Letters were then exchanged between FWNL and ATT, with the former raising the same queries on the identity of the defendant.  However, nothing positive came out of it.  As mentioned at the outset of this judgment, eventually, each party claims that the other side had repudiated the Agreement.

33.  At this juncture, it is perhaps worth highlighting the following matters:-

(a) Throughout the correspondence, ATT had never queried or challenged the reasonableness of the requisition raised on the defendant’s identity.  In fact, during his opening submissions, Mr Joshua Choy, counsel for the defendant, confirmed that the requisition had been a reasonable one.

(b) Neither CWY nor FWNL queried at any time the validity date of ID Card A.  The photocopy of ID Card A produced by ATT in their first answer (see §11(a) above) showed that it was only valid from July 2011 whereas the assignment of the Property from the developer to Mr Tam, which referred to ID Card A, took place in 2009, ie, even before ID Card A became valid. 

(c) In answering the requisition, ATT all along took the view that the discrepancy between the two different dates of birth was of no significance to the identity issue.  As such, during the requisition stage, not only was CWY denied an explanation as to why there were two dates, they were also never told which (if indeed one of them) was the correct date.  As it turns out, neither of the two dates is the true date of birth of the defendant.

The evidence

34.  Both the plaintiff and the defendant gave evidence at the trial.

35.  The plaintiff’s evidence is uncontroversial and does not, broadly speaking, have any bearing on whether the requisition was indeed satisfactorily answered or not.

36.  On the other hand, the defendant gave lengthy evidence at trial.  His oral evidence went significantly beyond what was covered in his witness statements, both in terms of the actual content and its details.  There were a few unexpected revelations emerging from his evidence, to which I shall return below.

37.  First and foremost, however, the key evidence from the defendant was (naturally) that he was in fact Mr Tam who purchased the Property from the developer under the 2009 Assignment and hence he was able to give good title to the plaintiff upon completion. 

38.  Apart from that, the defendant also attempted in his oral evidence to outline the regime governing the issuance of identity cards in the Mainland and the associated rules and regulations, largely based on the internet research he recently conducted in this area.  It is not necessary to deal with or comment on such part of his evidence which in effect amounted to expert evidence and to which I accordingly give no weight.  However, the following evidence which concerns the defendant himself is relevant factual evidence which I shall take into account.  And I must stress that a large part of such evidence was not mentioned at either the requisition stage or in the defendant’s witness statements.

39.  First, in his own words, he was born in “癸卯年馬月24日後半夜”.  A number of points emerge from that:-

(a) The term “後半夜” is to be contrasted with “前半夜”.  The terms simply mean “after midnight” and “before midnight” respectively.  He was born “after midnight” and according to the convention with which we are familiar, his date of birth should have been the 25^th, rather than the 24^th. However, in the Old ID Card and ID Card A, the 24^th was stated to be his birth date by the card issuing authority.  It was only when he obtained ID Card B in 2005 that the 25^th was put down as the date of birth.

(b) Further, the defendant said he was born on 24 or 25 December according to the lunar calendar, as opposed to the Gregorian calendar.  In cross-examination, the defendant admitted that he did not know his exact date of birth according to the Gregorian calendar but agreed that he should have been born some time in 1964, instead of 1963.

(c) In other words, his correct date of birth is neither 24 December 1963, as stated in the Old ID Card and ID Card A, or 25 December 1963, as stated in ID Card B. 

40.  Secondly, the defendant confirmed in his oral evidence that it was in April or May 2014 after CWY had raised the requisition on his identity cards and his dates of birth that he went to make enquiries with the government authority in the Mainland about the discrepancies.  The information was given to him unofficially and he was not able to obtain any documentary proof from the authority.  Prior to that, he had had no idea why his birth date would change upon the issuance of ID Card B. 

41.  Thirdly, as to why ID Card A, which was only valid in 2011, was seemingly used as an identification document in the 2009 Assignment, it transpired at trial that the defendant had in fact held two versions of ID Card A successively – ie, two physical cards bearing the same number.  When he signed the assignment in 2009, he held the first version of ID Card A which he subsequently lost.  He got a replacement in 2011, which is the second version and it was a copy of this latter version which was sent by ATT to CWY in ATT’s first reply to the requisition.  On the third day of trial, the defendant showed to the court the original of the second version of ID Card A.  He explained that the original had been kept by the government authority in the Mainland since its cancellation in 2013 but he, via his Mainland lawyers, somehow managed to secure its release from the authority for the purpose of producing it to this court.  (There was an obscure reference to the first version of ID Card A in the defendant’s supplemental witness statement but one cannot possibly work out the above details from that reference.)

42.  Fourthly, another (surprising) revelation during the trial was that apart from ID Card A, the defendant has also held two versions of ID Card B, ie, two physical cards sharing the same number.  They were both issued in 2005 (but on different dates) and the defendant was able to show to the court the originals of both versions.  He explained that he is a legal representative of a Mainland company and for business needs he needs to leave his identity card in the custody of the company staff to facilitate their dealings with banks.  Therefore, he applied for an extra ID Card B for that purpose.

43.  Therefore, in summary, according to the defendant’s own evidence, he has had five PRC identity cards issued to him throughout his life and they are, chronologically, as follows:-

(a) The Old ID Card – it was valid at the time of the 2009 Assignment but was no longer valid at the time the Agreement was entered into in 2014.

(b) Two versions of ID Card A – the first version was valid at the time of the 2009 Assignment and was indeed used as the identification document then.  It was later lost. The defendant obtained the second version in about 2011.  In other words, the second version was not the version used in 2009.  Due to double registration, the second version of ID Card A was cancelled in 2013.

(c) Two versions of ID Card B – both were issued in 2005 which means that they were both valid at the time of the 2009 Assignment.  They remain valid up to now.  One of the versions, ie, not the one kept by the defendant’s company, was used as the identification document in the Agreement in April 2014.

44.  According to the defendant’s account of the PRC identity card regime, this regime is very different from that governing the issuance of Hong Kong identity cards.  Most significantly, PRC identity cards carry an expiry date and upon renewal or replacement the numbers may change.  (Or they may not – it is not clear when they will and when they won’t.)  By contrast, Hong Kong identity cards are permanent in that the card itself does not have an expiry date and that a holder is effectively assigned a unique number which follows him throughout his life since it does not generally change upon renewal or replacement.  Equally importantly, it is not possible for a Hong Kong resident to hold more than one identity card at any one time.  On the other hand, the defendant’s evidence suggests that this is possible in the Mainland (that is to say, even leaving aside the scenario of double or multiple identity registrations). 

45.  I should pause here to make it clear that I will not be making any factual finding in this case as to how the PRC system of identity cards operates based on the defendant’s evidence.  It is simply not possible to do that on the evidence before me and it is also unnecessary for the purpose of determining the present dispute.  I am simply recording the above evidence as the background against which to assess whether the requisition was satisfactorily answered.

The plaintiff’s case

46.  In gist, the plaintiff’s case is that the requisition should have been fully answered by 30 May 2014, which was the extended date of completion.  The defendant failed to do so for the reasons set out in the extensive correspondence exchanged during the requisition stage.  The defendant being in breach of his duty to prove title, the plaintiff now claims damages under the following heads:-

(a) return of the deposit paid to the defendant in the sum of $521,000;

(b) stamp duty incurred by the plaintiff in the sum of $156,400; and

(c) loss of bargain, given that the Property had appreciated in value, in the sum of $340,000 (the amount was agreed between the parties at closing).

47.  On the issue of whether the defendant was indeed Mr Tam and therefore in a position to honour his duty to give title upon completion, Mr Francis K M Yip, counsel for the plaintiff, indicated that he had no submissions to make on this factual issue.

The defendant’s case

48.  The defendant’s case is that completion was further extended beyond 30 May 2014.  In his closing submissions, Mr Choy argued that given the parties were still in correspondence with regard to the requisition in June and July 2014, the parties, by their conduct, evinced an intention that completion was to take place “after a reasonable time”. 

49.  The significance of this alleged further extended completion date lies in Notarial Certificate No 4, which was only produced by ATT in June 2014.  On the plaintiff’s case, this certificate would not matter since it was produced late whereas, on the defendant’s case, it ought to be taken into account.  It will be remembered that the other three notarial certificates had been found to be forged earlier on and could not thus be relied upon by the defendant.

50.  In any event, the defendant contends that the requisition had been answered satisfactorily by 30 May 2014. But if it had not, it was answered later by the production of Notarial Certificate No 4.

51.  In this regard, the defendant prays in aid sections 22 and 23 of the CPO and argues that Certificates No 1 to 4 and Notarial Certificate No 4 are presumed to have been duly executed by the Mainland authorities, which have full legal capacity to do so.  As such, the burden is shifted to the plaintiff to show otherwise.  This the plaintiff has not done. So the defendant argues that these certificates provide a full answer to the requisition.

52.  On the issue of whether the defendant was indeed Mr Tam, Mr Choy invited the court to accept the defendant’s evidence as truthful and make a positive finding accordingly.

53.  On the above basis, the defendant counterclaims against the plaintiff for a declaration that the plaintiff was in breach of the Agreement and that the defendant was entitled to forfeit the deposit.

54.  However, if the court finds for the plaintiff, the defendant says that he is entitled to claim the return of the deposit and the loss of bargain only.  The claim for the reimbursement of the stamp duty expenses should be disallowed since it is inconsistent with the election to claim loss of bargain.

Issues in dispute

55.  Having set out the parties’ respective cases, the following issues fall to be decided:-

(a) Was completion extended to 30 May 2014 or to “a reasonable time” after 30 May 2014?

(b) Do sections 22 and 23 of the CPO apply to raise a presumption in favour of Certificates No 1 to 4 and Notarial Certificate No 4?

(c) By the extended completion date, had the defendant answered satisfactorily the requisition on his identity?

(d) Was the defendant indeed Mr Tam?

(e) If the plaintiff succeeds on liability, should he be allowed to claim the stamp duty expenses in addition to loss of bargain?

Legal principles on requisitions

56.  It is trite that a vendor has a duty to prove a good title before completion and he has to show beyond reasonable doubt that the purchaser will not be at risk of a successful assertion against him of an encumbrance affecting the property concerned.  This is a very high standard of proof and the vendor will have to put forward strong and compelling evidence.  The rationale is that the court will not force a doubtful title on a purchaser.  See MEPC Ltd v Christian-Edwards [1981] AC 205 at 220C-D; Kan Wing Yau v Hong Kong Housing Society [1987] 2 HKLR at 193H (Court of Appeal); and, more recently, Gigabillion Asia Pacific Ltd v Sino Dynamic International Ltd [2015] 2 HKLRD 100 at §18 (Court of Appeal). 

57.  That said, however, what is required to prove title in a given case must depend on the specific facts and circumstances and one must apply common sense.  This has been stressed time and again by the courts at all levels. 

58.  In Active Keen Industries Ltd v Fok Chi Keong [1994] 1 HKLR 396, Litton JA said (at 405, line 45):-

“The question: how is good title shown? is not capable of an answer in the abstract. It depends upon the matter at hand.”

59.  When a doubt is raised on the title but the facts and circumstances presented by the vendor “are so compelling that, beyond any reasonable doubt, the risk is, for all practical purposes, illusory, then the Court can and should be prepared to ignore it, and accordingly to dismiss any objection to title founded on it”.  The court can safely ignore any risk which is a “purely theoretical and not a practical blot” on the title: Kan Wing Yau v Hong Kong Housing Society HCMP 2436/1987, 1 December 1987, per Godfrey J at §9. The decision was reversed on appeal but the approach was confirmed by the Court of Appeal (at 194G).

60.  In Mexon Holdings Ltd v Silver Bay International Ltd (2000) 3 HKCFAR 109 at 117D-E, Litton PJ set out the following guidance:-

“A good title does not mean a perfect title, free from every possible blemish. Whenever a question like this arises, it must be approached from the stand-point of a willing purchaser and a willing vendor, both possessed of reasonably robust commonsense, both intending to see the transaction through to completion in terms of their own bargain.”

61.  Further, when dealing with a requisition, what Litton JA said in Active Keen are highly instructive and must be borne in mind:-

“If the matter was self-evident, the purchaser’s solicitor cannot insist upon a fuller reply. But the vendor’s solicitor must act with total candour, so that the purchaser can be reasonably certain that there are no facts and material relevant to the requisition known to the vendor which have not been disclosed.” (at 407, line 5) (emphasis added)

“The contractual duty to answer requisitions properly is not an onerous one. All that is required of the vendor is candour and commonsense. The purchaser is not an adversary. The parties have already arrived at an agreement and, normally, it is as much in the purchaser’s interest as it is in the vendor’s that completion should take place. A good title, or a good marketable title, does not mean a perfect title. If there are, or might be, blemishes upon it, these should be faced squarely. The vendor failed to do so in this case and in consequence failed in his contractual duty to deal with the requisition properly.” (at 413, line 30) (emphasis added)

Where identity was in issue

62.  Both Mr Yip and Mr Choy cited cases involving requisitions on the identity of either a predecessor-in-title or the current owner (ie, the vendor) of the property concerned.  In these cases, a doubt allegedly arose because of an apparent discrepancy or mismatch concerning the individual as appearing in different (and usually successive) title documents to which that individual was a party.  Some of these cases concern discrepant signatures purportedly signed by the same individual.  Other cases concern a scenario similar to the present one, namely where an individual was described by reference to different identification documents, eg, different passports, in different title documents.

63.  Naturally and obviously, each case has been decided on its own facts and there is no hard and fast rule as to how the issue of identity can be resolved save perhaps that common sense should always apply.  Nevertheless, we can derive some guidance from these cases on how the court should, in general, approach these situations.

64.  First, I think it is tolerably clear from the authorities that there is no presumption that a discrepancy or mismatch necessarily gives rise to a reasonable doubt on the identity of the individual concerned.  Whether it does so or not must depend on the circumstances of the case and the nature of the discrepancy. 

65.  Where there is an obvious difference between two signatures each purporting to be that of the same person, it normally gives rise to a reasonable doubt, see, eg, Lam Kin I v Tsui Ming Yee HCMP 361/1989, 24 February 1989.  On the other hand, unlike the “signature” cases, where the discrepancy lies in the different identification documents used in the description of the individual in different title deeds, it may or may not give rise to a reasonable doubt.

66.  Free Focus Ltd v Fels China Ltd [1989] 2 HKC 568 and Lee Yeung Chun v Ng Choi Chun [1990] 1 HKLR 468, relied on by the defendant, are examples where the predecessors in title were described with different passport numbers in the title deeds – Canadian passports in Free Focus and American passports in Lee Yeung Chun.  There were other relevant circumstances in each of these cases but the actual decisions suggest that the discrepancy between the passport numbers on its own did not raise any reasonable doubt on the identity of the predecessors in title in question – see, eg, Lee Yeung Chun at 469I-470A, per Godfrey J.

67.  There was no explicit explanation put forward in these two cases for the conclusion.  However, it seems self-evident that the conclusion was based on the recognition or knowledge that passport numbers do change upon renewal or replacement and where different passports were referred to in title documents which were executed years apart, the earlier passport must have been replaced by the later one because of the lapse of time.

68.  On this point, the following remark made by Cheung J in Lai May Hing v Lai Sai Fuk [1999] 2 HKC 464 at 467F is relevant (although the “passport” issue did not arise in that case):-

“If the two Assignments were signed at different times, naturally one would expect some difference in the style of the signatures and the passport numbers of the holder might have changed.” (emphasis added)

69.  Similarly, in Yiu Ping Fong v Lam Lai Hing[1999] 1 HKLRD 793, Yuen J did not consider the different Taiwanese passport numbers used to describe the same individual in two assignments executed in 1986 and 1990 to be material (see 800E-F).  In that case, the solicitor handling the 1990 assignment had endorsed on it that the passport used had only been issued in 1989.

70.  On the other hand, there is an expectation that where a Hong Kong identity card was used as a means to identify an individual in a title document, that card number would not change in subsequent title documents.  Again, it is premised on the general knowledge that Hong Kong identity card numbers follow the holders for life.  In Lai Wai v Lee Yuet Yung Pat [2012] 5 HKC 163, there were discrepancies in the Hong Kong identity card numbers purportedly of the same individuals between the title documents in 1961 and 1972.  Evidence was adduced in the form of letters from the Immigration Department to the effect that in the 1960’s there was a re-registration exercise across the population where the then existing identity cards were replaced by new cards of different numbers.  It was held that “the mere fact of the difference in identity card numbers in this case is not a cause for concern, the reason being that there is a legitimate and proper explanation for the numbers to be different” (original underline) (at §21).

71.  If the first question as to whether the discrepancy raises a reasonable doubt on the identity of the individual is answered in the affirmative, the burden is then on the vendor to produce “reasonable proof” on the identity.  And the vendor does so by adducing “proper conveyancing evidence”.  “Circumstantial evidence” is not sufficient: Lam Kin I at pp 2-3; Leung Yan Tim v Ho Tak Man HCMP 3752/1990, 6 December 1990 at pp 3-4, per Bokhary J; Win Mode Industries Ltd v Create Gain Ltd HCMP 2255/1992, 9 October 1992 at p 2, per Mayo J; Wu Chuk On v Long Chain Development Co Ltd HCMP 482/2007, 21 May 2007, per Chung J at §12.

72.  There is no definition spelt out in the authorities as to what will qualify as “proper conveyancing evidence” and what will be regarded as mere “circumstantial evidence”.  However, as noted above, in this branch of the law, each case is to be decided on its own facts.  In G B Industries Ltd v Yu Chung Kwok HCMP 1060/1994, 7 June 1994, Patrick Chan J remarked thus (at p 6):-

“The amount of “proper conveyancing evidence” required depends on the circumstances in each case.”

73.  Applying the general principles on requisitions, the term “proper conveyancing evidence” is perhaps best seen as a shorthand to denote such evidence which is strong and compelling enough in the circumstances of the case to remove or dispel the doubt reasonably raised on the identity of the relevant individual.  Anything less will be “circumstantial evidence”.

74.  In Lam Kin I, one of the “signature” cases, Godfrey J had the following analysis (at p 3):-

“But I am satisfied that what is necessary is what we sometimes called “proper conveyancing evidence”.  For example, a statutory declaration by a person, able to declare the truth of the facts stated, that the two signatures were one and the same person would suffice.  The best evidence would of course be a statutory declaration from John Tin On Wong himself to that effect.  But, failing him, anybody else who could speak to the truth of the facts would do.”

75.  Apart from statutory declarations, evidence in other forms may be acceptable.  See, eg, the letters from the Immigration Department in Lai Wai (§70 above).

76.  In G B Industries, there was a suggestion that a statutory declaration relied upon in that case by the vendor had been made by an interested party, namely, that that party had an interest in the transaction or the litigation.  In such a situation, it is “a matter of weight to be attached to a statutory declaration which is made by an interested party having regard to all the circumstances of the case” per Patrick Chan J (at p 7).

77.  In summary, in a case where a requisition is raised on the identity of a predecessor in title or the present owner of the property by reason of an apparent discrepancy in the title documents, the court should first determine whether the discrepancy in fact raises a reasonable doubt on the identity and if so the court should proceed to evaluate whether the answer and materials provided by the vendor amounts to “proper conveyancing evidence”. 

Sections 22 and 23 of the CPO

78.  Section 22 of the CPO provides as follows:-

“A party to any instrument shall be presumed, until the contrary is proved, to have full legal capacity to execute that instrument, to bind himself in terms of that instrument and to dispose of or hold any property or rights assigned under that instrument.”

79.  Section 23 of the CPO provides as follows:-

“An instrument appearing to be duly executed shall be presumed, until the contrary is proved, to have been duly executed.”

80.  In section 2, the term “instrument” as used in the above sections is defined to mean “any document having legal effect except a will”.

81.  At closing, Mr Choy submitted that sections 22 and 23 apply to Certificates No 1 to 3 and Notarial Certificate No 4 such that these documents are presumed to have been duly executed by the issuing authorities who are presumed to have had full legal capacity to issue them.  In the absence of any evidence to displace the presumption, they amount to “proper conveyancing evidence” to prove the identity of the vendor. 

82.  It will be recalled that these certificates contained statements and confirmations of fact.  As such, they were not legal documents which purport to create rights and obligations affecting or binding the parties to the documents or any third party.  Implicit in Mr Choy’s submission is that the term “instrument” as used in sections 22 and 23 is to be given a wide interpretation to include documents which effect is not the creation or alteration of rights and obligations but merely the certification of certain facts.  Mr Choy was not able to cite any authority in support of this interpretation.  Is that a correct interpretation of the term “instrument”?

83.  This is clearly a matter of statutory interpretation.  The task of the court is to ascertain the intention of the legislature as expressed in the legislation – the CPO in the present case.  The court adopts a purposive approach.  The statutory language must be understood in its context and having regard to its purpose.  The court should adopt an interpretation which is consistent with and gives effect to the legislative purpose and should avoid an interpretation which is inconsistent with and does not serve that purpose: Town Planning Board v Society for the Protection of the Harbour Ltd (2004) 7 HKCFAR 1 at §§28-29.

84.  In my view, the phrase “having legal effect” prima facie suggests that certain legal rights or obligations are being created (or, if they already exist, being amended, altered or otherwise affected) by means of the document in question, eg, a contract, a deed or a power of attorney.

85.  Here, the proper context can be gathered from the following:-

(a) The preamble of the CPO provides as follows:-

“To make provision relating to conveyancing and the law of property; to make provision concerning agreements and deeds relating to land and other agreements; to make provision for the acquisition and holding of land and other property; to provide for standard agreements and deeds relating to land; to imply certain covenants and other provisions in agreements and deeds relating to land; to revise and consolidate certain miscellaneous provisions relating to land and other matters; and for connected purposes”

(b) Sections 22 and 23 appear in Part III of the CPO which is entitled “Instruments”.  It seems sufficiently clear from the rest of the sections in that Part that provisions are made with regard to the interpretation and effect of documents which give rise to rights and obligations, such as assignments and deeds concerning land.

86.  When viewed against the above context, it does not seem to be part of the legislative intent to raise presumptions of legal capacity or due execution in respect of all types of documents, regardless of whether they purport to create or affect rights and obligations.

87.  Loosely speaking, a certificate of fact may have legal effect in the sense that it may be relied upon by its recipient for legal purposes and the issuing party may potentially be sued for any misrepresentation of fact.  However, I consider that such certificate is more properly described as having “legal consequence”, as opposed to having “legal effect”, both in letters and in spirit.

88.  I would therefore conclude that the term “instrument” covers documents which purport to create, amend, alter or otherwise affect rights and obligations and its meaning is not so wide as to cover any document having some kind of legal consequence.  Accordingly, I reject the defendant’s submission that sections 22 and 23 apply to the certificates produced by ATT at the requisition stage.

89.  If I am wrong on that, the statutory presumption will not in any event arise in respect of Certificates No 1 to 4 since they are mere copies and there is no presumption to the effect that these copies are to be deemed to be true copies of the original documents.

Analysis

90.  I have dealt with the second issue identified in §55(b) above and shall now turn to the other four issues in dispute.

When was completion date?

91.  It is clear, in my judgment, that the parties had extended the completion date to 30 May 2014 and not beyond. There is no merit in the defendant’s submission that the completion date was further extended to “a reasonable time” after that date.

92.  As set out in §25 above, on 30 May 2014, three letters were exchanged, with the last one from CWY reiterating their view that the identity requisition had not been satisfactorily dealt with.  The next two letters came from ATT on 9 and 16 June 2014, enclosing Notarial Certificate No 4. 

93.  However, CWY made the plaintiff’s position abundantly clear in their reply two days later, namely, first, the defendant failed to provide proper conveyancing evidence by 30 May 2014; secondly, he committed repudiatory breaches of the Agreement; thirdly, the plaintiff was entitled to damages; and fourthly, and importantly for present purposes, the plaintiff was willing to make alternative arrangement to complete the deal without prejudice to his rights and position – see §§28-29 above. Further correspondence from CWY and later from FWNL in the course of the following two months was entirely consistent with the plaintiff’s position. 

94.  In fact, when ATT rejected CWY’s proposal, they maintained that good title had been shown before 30 May 2014, which seems to suggest that they also took the view that that was the completion date.

95.  It is true that the solicitors were engaging in further discussion after 30 May 2014.  But that fact alone does not evince an intention on the part of the parties that the completion date was thus postponed.  One needs to look at the actual content of the letters and the only conclusion that can be reached here is that neither party intended that the completion date was to be further postponed.

Had the defendant answered the requisition satisfactorily?

96.  In my view, an important feature in this case is the “foreign” element associated with the defendant’s purported holding of multiple PRC identity cards.  The reference to two identity cards with different numbers, ie, ID Card A and ID Card B in the 2009 Assignment and the Agreement respectively, was a discrepancy which would reasonably and legitimately create an immediate doubt in the minds of a Hong Kong lawyer as to whether the cards indeed belonged to the same person.  This doubt largely arose from the common knowledge that Hong Kong identity card numbers, generally speaking, do not change – see §70 above.  While it does not mean that identity cards issued in other places must operate in the same way, there is at least some expectation that they may.

97.  I should add that this case differs from the “passport” cases, such as Free Focus and Lee Yeung Chun, in that there is in general a recognition that passport numbers do change upon renewal or replacement whereas there is simply no common knowledge amongst Hong Kong legal practitioners as to how identity cards are issued, replaced or renewed in the Mainland.  Accordingly those cases do not assist the defendant.  In fact, both ATT (implicitly) and Mr Choy (expressly) confirmed the reasonableness of the plaintiff’s requisition on the defendant’s identity.

98.  The next question is whether the defendant, through ATT, had produced reasonable proof to show that he was indeed the holder of both ID Card A and ID Card B on or before 30 May 2014. 

99.  I have set out in great detail the relevant correspondence between the solicitors and in my judgment the answer to the question is quite clearly a “No”.

100.  ATT’s first attempt was the production of the photocopies of ID Card A and ID Card B.  (The photocopy of ID Card A turns out to be the wrong copy since it was the second version which was issued after the Agreement.  I shall return to this point later.)  However, this showed another discrepancy, namely the different dates of birth, which was immediately spotted by CWY.  Notwithstanding that an explanation was demanded and that demand repeated on subsequent occasions, ATT had refused to confront the query head-on.  Instead they took the stance that the discrepancy on the dates of birth was irrelevant to the identity of the defendant. 

101.  I find this stance difficult to understand.  One does not expect a natural person to have two dates of birth.  It was therefore a totally legitimate and reasonable question to ask.  Given that there already existed a doubt on the defendant’s identity because of the discrepancy in the identity card numbers, the further discrepancy in the dates of birth as recorded in those identity cards did warrant an explanation or clarification.  In my view, a date of birth serves as an “identifier” of a person.  It is after all one of the few items which are recorded in an identity card to identify the holder. 

102.  What the defendant and his solicitors chose to do instead was to dismiss the query as irrelevant.  I find their unwillingness to respond to a totally legitimate question unsatisfactory.

103.  Instead, the defendant’s solicitors placed heavy reliance on Certificates No 1 to 3 and their corresponding notarial certificates.  The latter certificates were later found by CWY to be forged (to which there was no denial).  This naturally raised alarm bells in the minds of the plaintiff’s solicitors as to the veracity of the content of the former certificates.  In any event, I consider that the queries raised initially by CWY on those certificates, as set out in §13 above, had been properly raised and had remained unanswered (save perhaps for the fourth query as ATT did try to point out the issue of double registration). 

104.  More fundamentally, I share the sentiment expressed by CWY when they said that they, as Hong Kong lawyers, were not in a position to determine the validity of these certificates purportedly issued by Mainland government authorities, even assuming that they were true copies of the originals – see §14 above.  How can a Hong Kong lawyer possibly tell with conviction and confidence that the certificates were validly and properly issued by the Public Security Bureau of Zengcheng City and that the content was reliable?  As such, these certificates cannot possibly be considered as “proper conveyancing evidence”.

105.  The plaintiff’s position is that in such a case, the Law Society Circular 13-832 (PA) entitled “Attestation of Documents” dated 4 November 2013 should be adhered to.  Applying the guideline given under that circular, Mr Yip submitted that any notarised documents from the Mainland should be authenticated by the Ministry of Foreign Affairs.  I consider that in the particular circumstances of this case where there had been so many question marks raised over the whole matter, if the defendant insisted on explaining the discrepancies between ID Card A and ID Card B, including the two dates of birth, by relying on certificates issued by Mainland authorities, such certificates (which content should fully address CWY’s queries) should be properly authenticated in such a way which is endorsed by the Law Society.

106.  The defendant’s subsequent reliance on the correspondence with Yung, Yu, Yuen & Co (see §§23-24 above) did not adequately address the requisition either.  Mr Yip submitted that if the defendant had produced a statutory declaration from Mr Lo confirming that the defendant was indeed Mr Tam, the plaintiff would have accepted it to be “proper conveyancing evidence” given that Mr Lo, a Hong Kong legal clerk, had met Mr Tam in person and witnessed his signature in 2009, Mr Lo would have been in a position to verify that the defendant and Mr Tam were one and the same person, not only by facial recognition but also by the defendant’s production of the Old ID Card and ID Card A. 

107.  But what ATT managed to do was to produce a mere covering letter from Yung, Yu, Yuen & Co, a copy of the Old ID Card, but not a copy of ID Card A, and a carbon copy of the provisional agreement signed in 2008.  That was clearly inadequate.  ID Card A was the main identification document referred to in the 2009 Assignment and there seemed to be no reason why Yung, Yu, Yuen & Co could not at the same time produce a copy of that to ATT.  Worse still, ATT did not appear to have followed up on this glaring omission. 

108.  As it turns out, as revealed by the defendant in his oral evidence, ATT in fact sent a copy of the wrong ID Card A to CWY, without informing the latter that that copy was in fact a copy of the replacement card of the original ID Card A.  There is no evidence before me whether ATT in fact knew about the replacement but sent out the wrong copy nonetheless.  In any event, where the defendant sought to rely on the Yuen, Yu, Yuen & Co correspondence as answer or further answer to the requisition, that was not good enough.

109.  On the whole, by 30 May 2014, I find that the materials and information provided by ATT were not adequate to address the plaintiff’s doubt on the defendant’s identity.   The following issues remained outstanding at that stage:-

(a) The complete lack of attempt to explain the existence of the two different dates of birth;

(b) The forged Notarial Certificates No 1 to 3;

(c) Certificates No 1 to 3 being plain copies and their validity being in doubt; and

(d) The inconclusive correspondence from Yung, Yu, Yuen & Co.

110.  Mr Choy urged the court to have regard to three matters – first, the facial appearance of the holders of ID Card A and ID Card B looks the same or at least very similar; second, the defendant’s signature in the Agreement is identical to that of Mr Tam in the 2009 Assignment; and, third, the defendant had in his possession a carbon copy of the previous preliminary agreement.  I accept that these are matters which are in the defendant’s favour and which the court should take into account.  But at the same time they need to be viewed against the outstanding issues as highlighted above, which seem to me to weigh heavily against the defendant.

111.  Mr Choy argued that the plaintiff ought to have accepted a statutory declaration made by the defendant confirming his identity, as proposed by ATT earlier on in the chain of correspondence.  Not surprisingly, he relied on Lam Kin I which he said is authority for the proposition that a statutory declaration from the defendant himself would provide the best evidence of his identity – see §74 above.  The position of the plaintiff was made clear by CWY in their letter dated 21 May 2014 when they said that such a statutory declaration without any valid supporting documentary evidence would not be good enough – see §14 above. 

112.  I agree with CWY.  As I have sought to explain above, what constitutes “proper conveyancing evidence” must depend on the facts of each case.  Lam Kin I does not lay down an absolute rule that a statutory declaration from the relevant individual would resolve all doubts on identity.  Here, on the documents produced by the defendant, one discrepancy followed another.  The doubt over the defendant’s identity was a real one such that a declaration made by the defendant himself in the absence of any documentary proof would seem to be rather self-serving. And I have to say that in such a case not much weight could be given to that proposed declaration.

113.  Lastly, given the revelations made by the defendant at trial as to his actual birth date, the explanation as to why he had two dates of birth recorded in his identity cards and the loss of the original ID Card A, it can fairly be said that the defendant had not acted with total candour when answering the requisition in 2014.  Applying common sense, such information was clearly relevant to establishing his identity.  For no good reason, the defendant chose not to make the proper disclosure.  Active Keen has made it clear that this is not the right way to deal with a requisition.

114.  In the present case, there was some evidence from the defendant confirming his identity as Mr Tam – eg, the identical signatures and the similar facial appearance etc.  However, at the same time, the questions raised by the plaintiff over the gaps in the defendant’s answers were reasonable, fair and legitimate.  The defendant chose not to put forward any explanation or objective evidential proof in reply when he was indeed in a position to do so.  All things considered, I am of the clear view that the doubt raised on his identity was not one that could safely be ignored by the plaintiff as a mere theoretical blot on the title.  The defendant had failed to disclose all relevant facts known to him at that time.  As such, I find that the plaintiff’s requisition had not been fully and satisfactorily answered by the defendant by 30 May 2014.

115.  By way of footnote, I would add that if I am wrong on the completion date such that the completion was indeed extended beyond 30 May 2014 and Notarial Certificate No 4 should be taken into account, I would come to the same conclusion that the answer was not satisfactory.  The objection set out in §§13-14 above relating to the validity of the content equally applies to that notarial certificate.

Was the defendant indeed Mr Tam?

116.  Strictly speaking, it is not necessary to decide this issue.  Based on the above conclusion, the defendant was in repudiatory breach of the Agreement and the plaintiff was entitled to, and did, terminate it by accepting the repudiation.  However, I would set out my conclusion on this issue, given that the defendant had given extensive evidence in this regard.

117.  As noted above, I am not in a position to, and therefore do not, make any factual finding as to how the regime of identity cards works in the Mainland.  Further, I have to say that the notion of a PRC resident being capable of holding multiple identity cards at any one time sounds alien to me and there is nothing to substantiate whether such holding was indeed lawful or in compliance with the applicable rules and regulations in the Mainland. 

118.  That said, however, the defendant’s evidence as regards how he came to hold these multiple identity cards and why he had two dates of birth recorded in those cards is not inherently improbable.  At trial, he was able to produce to the court the originals of all these identity cards, save for the first version of ID Card A which he had lost.  The originals appeared to be authentic.  In any event, there was by and large no serious challenge mounted against such evidence by the plaintiff.  Accordingly, I find that, on a balance of probabilities, the defendant was indeed Mr Tam.

119.  It means that this is a case, similar to Active Keen, where the defendant was in fact in a position to give a good title of the Property to the plaintiff but owing to the inadequate and unsatisfactory answer to the plaintiff’s requisition, he had failed to prove such title prior to completion. 

Quantum of damages

120.  There is no dispute that should the court find against the defendant, he should return the deposit of $521,000 to the plaintiff.  In addition, the defendant accepts that the plaintiff may claim loss of bargain, the quantum of which has been agreed at $340,000.  The only issue is whether the plaintiff is also entitled to seek reimbursement of the stamp duty he had paid in the sum of $156,400 in addition to his claim of loss of bargain.

121.  At the beginning of the trial, Mr Choy sought to argue that such claim should not be allowed as the plaintiff should have applied for a refund from the Collector of Stamp Revenue pursuant to section 29C(5A) and (5B) of the Stamp Duty Ordinance, Cap 117.  The argument was later withdrawn.   However, My Choy submitted that as a matter of contractual principle and on the authorities, if the plaintiff elected to sue for loss of bargain, he could not at the same time seek reimbursement of the stamp duty expense since he would have had to incur that expense in order to earn the lost bargain in any event.  Hence it would be either one or the other, but not both.  He relied on the Court of Appeal decision in Kwok Chung Hon v Lo On Wa [1997] HKLRD 980 at 984G-H; Re Daniel [1917] 2 Ch 405 at 412 and McGregor on Damages (19^th ed) at §4-024. I accept his submission which I think accurately states the position of the general law.  The authorities are clear and the conclusion is sound as a matter of logic.

122.  However, in the present case, one also needs to consider whether the following express clauses in the Agreement affects or alters in any way the general law position:-

“If the Vendor shall fail to complete the sale in accordance with the terms and conditions of this Agreement, the deposit and all other money paid by the Purchaser to the Vendor shall be returned forthwith to the Purchaser who shall also be entitled to recover from the Vendor such damages (including but not limited to the stamp duty paid by the Purchaser) (if any) as the Purchaser may sustain by reason of such failure on the part of the Vendor …” (clause 14) (emphasis added)

“Notwithstanding Sub-Clause (1) hereof, it is hereby agreed between the parties hereto that if any party to this Agreement shall fail to complete the sale and purchase of the Property in accordance with the terms and conditions of this Agreement, the stamp duty payable on this Agreement and the Provisional Agreement (if any) shall be borne by the defaulting party absolutely.” (clause 19(2))

“Should any of the parties hereto fail to complete the sale and purchase of the Property according to the terms and conditions of this Agreement (“the defaulting party”), such party shall bear and pay the stamp duty payable on this Agreement under the Stamp Duty Ordinance 1992 and the estate agent’s commission paid and the defaulting party shall fully indemnify the other party in respect of all the stamp duty payable on this Agreement under the said Ordinance and the said estate agent’s commission paid.” (clause 34)

123.  Mr Choy submitted that these clauses did not provide that the stamp duty paid would be recoverable in addition to a claim for loss of bargain and that it was up to the plaintiff to elect whether to claim under these clauses but if he did so elect, his right to claim for loss of bargain would be lost or the amount accordingly reduced.  I agree.

124.  As a matter of construction, any expenditure incurred on stamp duty is to be regarded as part of general damages payable upon a breach of the Agreement – see, in particular, the words in clause 14 as italicised above.  As such, the general compensatory principle applies to any such claim.  In my view, if the intention of the parties was to allow both the expenditure claim and the loss of bargain claim, which would be a departure from the general law position, much clearer language to that effect would be required.  In the absence of such language, there is nothing in the Agreement which would entitle the plaintiff to claim stamp duty in addition to the loss of bargain.

125.  I believe that the above clauses are fairly standard provisions that can be found in conveyancing contracts.  I would add that there are many varied scenarios under which damages may be claimed (eg, the Property might have depreciated by the time of breach) and how these clauses would operate in these other scenarios would depend on the facts of each case, including the nature of the breach and the basis of the claim.  In the present case, that the plaintiff did have an option to elect does not necessarily mean that other purchasers may have the same option under these clauses in other scenarios.

Orders

126.  For the reasons set out above, I order that the defendant do forthwith return to the plaintiff the deposit in the sum of $521,000 and pay to the plaintiff the sum of $340,000. Interest is payable on the amounts due at prime rate from the date of completion, ie, 30 May 2014, until judgment.  The defendant’s counterclaim is dismissed.

127.  I also make an order nisi that the defendant do pay the plaintiff’s costs of the action and the counterclaim, to be taxed if not agreed, with certificate for counsel.