MOUNT CITY LTD v. WONG YUN KUI AND ANOTHER

HCA 16269/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 16269 OF 1999

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ASSESSMENT OF DAMAGES

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1.  By an agreement dated 11 October 1997 made between the plaintiff as the developer vendor and the defendants as the purchasers (the Agreement), the defendants agreed to purchase the property at Flat D, 5^th Floor, Block 3, Scenic Garden, Yuen Long, registered in the Yuen Long New Territories Land Registry as Yuen Long Town Lot 486 (the property) for the price of HK$3,096,000.00.

2.  Pursuant to the agreement of sale and purchase of the property, the defendant had paid 30% of the purchase price totally $928,800.00 to the vendor.

3.  The defendant had failed to complete on the date of completion on 29 April 1998.  By a letter dated 27 August 1998, the plaintiff terminated the Agreement and forfeited the defendant’s deposit. Clause 16(3) of the Agreement provides that the plaintiff may resell the property and claim any deficiency in price and all expenses attending such resale against the defendant.  The plaintiff resold the property by a Resale Agreement dated 22 October 1998 for the price of $1,828,000.00.  The resale was completed on 16 November 1998.

4.  On 13 October 1999 the plaintiff filed a claim against the defendants for damages.  On 16 May 2000, the plaintiff obtained a summary judgment against the defendants for damages to be assessed.  The particulars of damages are set out in the Amended Statement of Claim.

5.  On the date of hearing, the defendants were absent. By an affirmation of Chong Ho Yin filed on 4 December 2008, it was proved that notice of this hearing had been served on the defendants on their last known address.  The defendants had notice of this hearing by virtue of Order 65 Rule 5 of the Rules of the High Court.

6.  Having been satisfied that the defendants had due notice of this hearing and that all other relevant documents had been served on the defendants, I ordered the hearing to proceed in their absence.

7.  Plaintiff’s counsel had applied for leave to file the following documents: (a) Mr. Chow Shing Evans’s 2^nd supplemental witness statement dated 2.12.2008; (b) plaintiff’s supplemental list of documents dated 2.12.2008 and (c) plaintiff’s supplemental hearsay notice dated 2.12.2008.  Having no objection from the defendants and seeing that these documents would not cause prejudice to them, I gave leave to file the documents.  They are admitted as evidence.

8.  The plaintiff had called 2 witnesses: Mr. Chow Shing Evans, the factual witness and an expert Mr. G.J. Cattermoul, a surveyor, on the valuation of the property, a report of which had been filed [bundle-55-62].  In this report, Mr. Cattermoul valued the market price of the property as on 22 October 1998 to be $1,650,000.00.

9.  Mr. Chow confirmed the truthfulness of his witness statements and supplemental witness statements.  Mr. Chow further said that in 1998, the property market was depressed and the vendor had to use attractions such as gift coupons and stamp duty to boost the sale of the property.  Mr. Cattermoul confirmed that he compiled the valuation report of the property and that the contents of his report were, to his honest belief, true.

10.  I have no reason to doubt the witnesses.  I accept their evidence for this assessment of the damages.

11.  I asked Mr. Ah-weng on what basis did the plaintiff ask for damages for the stamp duty as in the Agreement for sale and purchase of the property, the vendor is only entitled to claim expenses attending the resale of the property.  Mr. Ah-weng submitted that the plaintiff had agreed to pay the stamp duty for the property in order to attract sale of the property. It was reasonable for the plaintiff to do so in order to have a quick resale.  I agree the plaintiff is under a duty to mitigate its loss and this is reasonable for it to do so.  Under the Agreement, the plaintiff has a duty to resell the property within 6 months from the date of the termination of the Agreement.  There is evidence to show that the vendor indeed had paid the stamp duty for the property. I allow this item of damages.

12.  I have made reference to the amended statement of claim [bundle 22-33], the witness statement and supplemental witness statements of Mr. Chow Shing Evans [bundle-35-53(e)] and Annex 2 and Annex 3 of counsel’s opening submission.  

13.  The following is a summary of the damages assessed:

Difference in price between the agreement and resale
a.   Price of the property under the agreement	$3,096,000.00
b.   Deposit paid under the agreement	$928,800.00
c.   Price of the property resold	$1,828,000.00
d.   Difference after resale	$339,200.00
Conveyancing costs	$15,500.00
Management fees paid before resale	$7,426.00
Rates paid before resale	$1,269.17
Government rents paid before resale	$858.56
Stamp duty for the resale	$13,815.00
Contractual interest on the difference in price	$446,021.18
after resale between 29 April 1998 to 5 December 2008
(the date of the assessment)
Total	$824,089.91

14.  Damages are assessed at $824,089.91 with interest at the judgment rate from 5 December 2008 until payment.

15.  There will be an order nisi for the costs of this assessment of damages to be given to the plaintiff, to be taxed, if not agreed.  Unless the defendants apply to vary this costs order, it shall become absolute 14 days from the date of its pronouncement pursuant to Order 42 rule 5B(6).