YU MA KWAI v. VAMPIO LTD AND ANOTHER

DCCJ 4176/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4176 OF 2008

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D E C I S I O N

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1.  This is the defendants’ application to vacate the lis pendens registered on 26 September 2008 against the defendants’ land.  The defendants rely, inter alia, on the easement agreement entered into on 12 October 2008 between the parties in this case.  The easement agreement provides in particular: “現本人俞馬桂同意無條件立刻撤銷案件DCCJ4176/2008 對 Vampio Limited 及梁光明的訴訟，以及土地註冊memorial number 08092602700097的登記，並同意永不追究.”

2.  The plaintiff’s counsel submits that: (1) it was a condition precedent of the easement agreement that the right of way agreement be executed by Million Sea (China) Limited, Million Sea, in favour of Mr Chung and other parties nominated by him over section C and D of Lot 549.  Such condition precedent was not fulfilled; (2) defendants represented to Mr Chung that plaintiff was to agree to discontinue his claim herein in return for the execution of the right of way agreement.  The easement agreement was only executed first due to the urgent need of defendants to complete the sale of defendants’ land.  However, defendants will not rely on the easement agreement unless the formal agreements for discontinuance of this action and the right of way agreement were executed simultaneously.  Defendants now acted in breach of their representations and the easement agreement is liable to be rescinded. 

3.  The court has to make a ruling as to whether the plaintiff’s submissions on these two grounds can be sustained or not.  I have to refer to the affirmation of Mr Chung Kang-wah, the plaintiff’s attorney, to see if the plaintiff’s alleged two grounds can succeed or not.

4.  The following paragraphs cited from the affirmation of Mr Chung would reveal what happened on the day of 12 October 2008 relating to the negotiation and the subsequent alleged settlement: 

“29.  At around 1.30 pm on 12 October 2008, Mr Yu Yiu-hung brought along Ms Chan and Mr Wong Kam-wai to meet with Mr Chung Lin-hei in a Chinese restaurant called “新雅酒樓” for settlement negotiations.  After they reached preliminary consensus over the matters in dispute, I was called upon to go to the Chinese restaurant during which the proposed terms of settlement were related to me.

30.  At about 3 pm Mr Yu Yiu-hung, Ms Chan and Mr Wong’ son, Mr Chung Lin-hei, Mr Chung Kang-cheung and I arrived at my office in Hang Hau Village to have discussion on the drafting of the proposed settlement terms.  It was the consensus of everyone that:

(1)  The defendants are not required to pay any money and the plaintiff will withdraw his claim in this action as soon as possible;

(2)  Mr Wong’s company, Million Sea, will grant a permanent right of way over Lot 549 C & D in favour of me and other parties nominated by me;

(3)  We will not object to demolition by Mr Wong of the fences and landscape next to the house occupying Lot No.847 of Demarcation District No. 230 (“Lot 847”) for the purpose of vehicular access to transport building materials for the  construction of 3 other houses, provided the constructions works should only commence after the respective letter of consent is obtained.

31.  It was further agreed that the above agreement should be reduced into writing by Ms Chan.  However, prior to the drafting of the above agreement, Ms Chan took out a typewritten agreement prepared in advance for our perusal.  That was a draft agreement in the form of the alleged agreement later executed by us.  She further represented to us that because the sale and purchase of their property was to complete on or before 17 October 2008, the grant of right of way would not be agreed upon if we cannot withdraw the plaintiff’s claim in this action prior to this date.

32.  Ms Chan and Mr Wong’s son further said that owing to the extremely tight schedule for the completion of the sale, they hoped that we can sign the typewritten agreement presented to us under such urgent circumstances so that they can produce the same to the purchaser of their property who would then be prepared to proceed with completion of the purchase.  Ms Chan further represented to us that she would not use that written agreement (if signed) to strike out the writ issued by the plaintiff, since it is after all necessary to await the relevant documentation from the plaintiff’s solicitors before the plaintiff’s claim can be withdrawn.  On such basis, Ms Chan then proceeded to draft the other terms of the agreement on the spot.  In relation to the right of way over Lot 549 C & D, since numerous lots of lands and parties were involved, Ms Chan and Mr Wong’s son suggested that they simply refer to me and the parties represented by me, and they can then sign the relevant documents for grant of right of way later at our solicitors’ office.  At this time, Ms Chan and Mr Wong’s son once again reminded us that we must have all documents (including the documents for the withdrawal of the plaintiff’s claim in this action) prepared and executed before 17 October 2008, failing which everything including the grant of right of way would all be rescinded.  We therefore agreed to prepare the relevant documents as soon as possible, so that the sale of the other side’s property could be completed and whilst our side can acquire a grant of right of way over Lot 549 C & D.

33.  I might as well mention that when it came to the agreement for the right of access in or around Lot 847, we made a specific request that the other side should ensure that the construction works would not affect the slope next to our house on the lot and that the surrounding landscape should be kept in good appearance. Such request was agreed to unequivocally by Ms Chan.

34.  After Ms Chan completed the drafting process, the following agreements were before the parties:

(1)  a draft typewritten agreement in the form of Exhibit CCY-6 to Ms Chan’s affirmation;

(2)  a draft agreement for the grant of right of way over Lot 549 C & D in the form of Exhibit CCY-7 to Ms Chan’s affirmation;

(3)  a draft agreement in respect of Lot No.847 in the form of Exhibit CCY-8 to Ms Chan’s affirmation.

35  In pursuance of the old agreement amongst the parties, the above agreements were signed for and on behalf of the respective parties in turn. After the aforesaid agreements were signed, Ms Chan put in the words “現金 HK1,000” in the alleged agreement.  We immediately told Ms Chan that we would not charge any money for the alleged agreement.  Ms Chan, however, simply ignored what we said and put up cash of HK$1,000 and placed it on our table.  At that time Mr Yu Yiu-hung said to me that there should be no problem, saying that since everyone had sit down and reached a settlement, nobody would have a second thought and he can assure that there would be no problem.”

Condition precedent

5.  It is clear that according to paragraph 30 of Chung’s affirmation that the withdrawal of the plaintiff’s claim is not connected with the granting of a permanent right of way.

In the context of a condition precedent

6.  Under paragraph 32, it is not a condition precedent of one, therefore there is no condition precedent attached to the easement agreement.  This is consistent with what is stated in the easement agreement, namely, “現本人俞馬桂同意無條件立刻撤銷案件DCCJ4176/2008”. Therefore, the submission in relation to condition precedent must fail.

Representation

7.  The alleged representation is not supported by what has been stated in Chung’s affirmation.  It is not supported by paragraph 30 and not by other paragraphs fully cited in this decision.  Under the second submission, the plaintiff’s counsel said that defendants would not rely on the easement agreement unless the formal documents for discontinuance of this action and the right of agreement were executed simultaneously.  It is not clear what exactly the phrase “defendants would not rely on” means. 

8.  Under paragraph 32 of Chung’s affirmation, he said that “Ms Chan further represented to us that she would not use the written agreement to strike out the writ issued by the plaintiff.”  I do not know whether this is the reliance referred to in the second submission.  If it is, certainly the defendants have not proceeded to use the written agreement, namely, the easement agreement, to apply to this court to strike out the writ.  If this is not the representation referred to in the plaintiff’s second submission, then there is no evidence in Chung’s affirmation to reflect what was referred to in this second submission, so there is no evidence to support this representation.

9.  In any event, there is simply no evidence from Chung’s affirmation to support the second submission; so this submission relating to representation must fail.  The only conclusion I can draw is that the easement agreement is a binding agreement.  This is the provisional view formed by me at this stage.  I am not making a final determination.  That would be something for the trial judge.  But there is nothing to show that this provisional view made by me is wrong, so the defendants have shown a good cause under section 19 of the Lands Registration Ordinance, Cap.128.  Therefore, I must set aside the lis pendens that is against the defendants’ land. 

10.  I make an order in terms of paragraph 1 of the summons taken out by the defendants.

Costs

11.  I make an order nisi for costs, to be made absolute in 14 days’ time, that the plaintiff to pay costs of this application to the defendants, to be taxed, if not agreed, with certificate for counsel.