CACV 286/2000
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 286 OF 2000
(ON APPEAL FROM HCA NO. 9231 OF 1997)
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| BETWEEN | | |
| WHALE VIEW INVESTMENT LIMITED | Plaintiff |
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| AND | |
| | |
| (1) KENSLAND REALTY LIMITED | Defendants |
| (2) TAM PUN & YIPP (a firm) | |
| (3) THE BANK OF EAST ASIA LIMITED | |
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Coram: Keith JA, Stock JA and Le Pichon JA in Court
Dates of Hearing: 4 and 5 January 2001
Date of Judgment: 23 January 2001
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J U D G M E N T
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Keith JA (giving the judgment of the Court):
Introduction
1. This is yet another case in which the purchaser of property did not complete the purchase by the deadline stipulated in the sale and purchase agreement. The precise facts are unusually important in this case, and we propose to set them out in some detail. The primary facts were not in dispute. All dates in this judgment refer to 1997 unless otherwise stated, and unless the context otherwise requires, we shall refer to the Plaintiff, the 1st Defendant, the 2nd Defendant and the 3rd Defendant as "the purchaser", "the vendor", "the purchaser's solicitors" and "the bank" respectively.
The primary facts
2.The vendor's purchase of the shop. In May 1997, the vendor decided to buy a shop in Argyle Street, Mongkok for $53m. from Delight Holdings Ltd. ("Delight"). The formal sale and purchase agreement provided for the purchase to be completed by 5.00 p.m. on 2 September (a Tuesday).
3.The vendor's sale of the shop. The market was rising when the vendor decided to buy the shop, and later in May 1997, it agreed to sell the shop for $55m. to the purchaser. If everything went well, the vendor would make a quick profit of $2m. A provisional agreement for the sale of the shop by the vendor to the purchaser dated 30 May was replaced by a formal sale and purchase agreement dated 20 June ("the agreement"). It provided for the purchase to be completed by 1.00 p.m. on 2 September at the office of the vendor's solicitors. Thus, the deadline for the completion of the purchaser's purchase of the shop from the vendor was four hours before the deadline for the completion of the vendor's own purchase of the shop. Deposits totalling $8.25m. had been paid by the date on which the agreement was signed, and accordingly the balance of the purchase price payable by the purchaser to the vendor on completion was $46.75m.
4.The raising of the finance. The purchaser needed to raise funds in order to finance its purchase of the shop. It applied to the bank for a loan. On 29 August, the bank approved a loan of $33m. to the purchaser, to be secured by a first legal charge over the shop, together with (a) a guarantee from Lau Hok Tung (a shareholder in, and one of the two directors of, the purchaser) and his wife (the other director of the purchaser) and (b) undertakings given by Mr Lau and another company in which he had an interest. The bank notified the purchaser's solicitors of its approval of this loan by a fax transmitted to the purchaser's solicitors at 9.14 a.m. on 30 August (a Saturday). The purchaser's solicitors were instructed by the bank to prepare the necessary documents. These documents were prepared by the purchaser's solicitors, and Mr Lau and his wife went to the purchaser's solicitors' office in the late afternoon of 1 September (a Monday) to execute the documents there. Copies of the documents were faxed to the bank that evening, and the originals were delivered to the bank the following morning, i.e. the date of completion (2 September). The bank's receipt chop recorded them as having been received by the bank at 9.37 a.m.
5.The problems with the mortgage documents and the covering letters. Unfortunately, there were three problems with the mortgage documents which the purchaser's solicitors had sent to the bank:
(i) The purchaser's solicitors had provided the bank with certified copies of the two undertakings. The bank wanted originals. Its original instructions to the purchaser's solicitors had not stated that it wanted originals, but since the evidence was that different banks had different requirements, it could be said that the purchaser's solicitors should have checked with the bank what its practice was.
(ii) The heading of the guarantee named the wrong bank.
(iii) The bank had wanted to be provided with the resolution of the Board of Directors of the purchaser authorising the obtaining of the loan and the grant of the security. The purchaser's solicitors had failed to send it to the bank.
There was one other problem. The bank's instructions to the purchaser's solicitors had been that the loan of $33m. was to be paid by cheque. However, the purchaser's solicitors in their covering letter to the bank had stated that the $33m. was to be credited to their bank account.
6. These problems were noticed by the bank's staff that morning, and by 10.40 a.m. the purchaser's solicitors had been notified of them. The purchaser's solicitors proceeded to put the problems right. Accordingly, between 11.33 and 11.39 a.m., they faxed to the bank a copy of a new covering letter asking for cheques for the $33m., together with copies, inter alia, of (a) a new first page of the guarantee naming the bank as the beneficiary of the guarantee, and (b) a suitable resolution of the Board of Directors of the purchaser. The originals of these documents, together with the originals of the two undertakings, were delivered to the bank, and the bank's receipt chop recorded them as having been received by the bank at 11.57 a.m.
7. It was here that the fickle hand of fate intervened again. There was nothing wrong with the contents of the new covering letter, but there were errors in its heading. The name of the mortgagor, the description of the mortgaged property and the bank's reference number were all wrong. These errors were pointed out to the purchaser's solicitors at about 12.10 p.m., and they were corrected by a fax sent to the bank by the purchaser's solicitors at about 12.20 p.m. That was when the problems with the mortgage documents and the covering letters were finally resolved, but by then the deadline for the completion of the purchaser's purchase of the shop was only 40 minutes away.
8.The breakdown of the cheques. The purchaser's solicitors had always been aware of their need to know the breakdown of the cheques for the balance of the purchase price of $46.75m. and in whose favour they were to be drawn. They asked the vendor's solicitors for that information by fax on 29 August and again by telephone on 1 September. The unchallenged evidence was that this information was not provided, so the purchaser's solicitors requested that information yet again by fax - this time at 10.04 a.m. on 2 September. Again, this information was not provided, and eventually the purchaser's solicitors telephoned the vendor's solicitors. This was between 10.45 and 10.50 a.m. The purchaser's solicitors were informed that the information would be faxed to them. However, it was not until 11.13 a.m. that the vendor's solicitors sent the information to the purchaser's solicitors. A total of nine cheques for different amounts drawn in favour of different payees were required.
9. Seven of these cheques were cheques which Delight had required the vendor to pay. The vendor's solicitors simply added two more of their own. However, when the purchaser's solicitors checked the figures, they found a discrepancy. They telephoned the vendor's solicitors, and it was not until 11.48 a.m. that they got the correct information.
10.The cheques from the bank. The two largest cheques which the vendor's solicitors required were for $31,824,696.12 (to be drawn in favour of the China and South Sea Bank Ltd.) and $8m. (to be drawn in favour of the Standard Chartered Bank). Since the bank loan came to $33m., the purchaser's solicitors decided that the cheque for $31,824,696.12 in favour of the China and South Sea Bank Ltd. and a cheque for $1,175,303.88 (being the balance of the loan) in favour of the Standard Chartered Bank should be drawn by the bank. Those were the instructions given to the bank in the new covering letter. Those two cheques, in the form of cashier's orders, were handed to the purchaser's solicitors' messenger by the bank at 12.48 p.m. All the other cheques were to be drawn on the purchaser's solicitors' account since they had been put in funds by the purchaser.
11.The delay in completion. Realising that they may not be able to meet the deadline, the purchaser's solicitors telephoned the vendor's solicitors at least twice in the 20 minutes or so before 1.00 p.m. to ask for a short extension of time. Their unchallenged evidence was that the solicitor to whom they spoke first (who had been handling the transaction) said that he would have to speak to the partner concerned and take the vendor's instructions. When he did not telephone back, the purchaser's solicitors telephoned again. This time they asked to speak to the partner. They were told that he had gone out. They then asked to speak to the first solicitor, but they were told that he had gone out for lunch.
12. The purchaser's solicitors arrived at the office of the vendor's solicitors with the cheques drawn on their account shortly after 1.00 p.m. In view of what they had been told over the telephone, they were surprised to see both the solicitor who had been handling the transaction and the partner there. At 1.06 p.m., the purchaser's solicitors' messenger arrived direct from the bank with the bank's two cashier's orders. However, the vendor's solicitors refused to accept them since the deadline for completion had passed.
The proceedings
13. The purchaser issued the proceedings on the following day. It contended that the vendor had not been entitled to treat its failure to meet the deadline by 6 minutes as a repudiatory breach of its agreement with the vendor. It sought specific performance of the agreement. However, when the market fell a few months later, it no longer sought specific performance of the agreement, and by the date of the trial it sought (a) the return of the deposits which the vendor had forfeited and (b) damages representing the difference between the price which it had agreed to buy the shop for and the sum for which it could have sold the shop in the few weeks after completion should have taken place. However, in case the vendor would be held to be entitled to rely on the purchaser's failure to comply with the deadline, the purchaser blamed its solicitors and the bank for what had occurred. The purchaser therefore claimed damages for their negligence as well.
14. For its part, the vendor counterclaimed against the purchaser for various forms of relief - in particular, a declaration that it was entitled to forfeit the deposits paid by the purchaser (up to the contractual limit of 10% of the purchase price) and a claim for damages being the difference between the price which it had agreed to sell the shop to the purchaser for and the value of the shop when the purchaser abandoned its claim for specific performance of the agreement and the lis pendens which had been registered against the shop had been removed.
The judgment at first instance
15. The action was tried by Deputy Judge Gill in the Court of First Instance. He considered first the purchaser's claim against the vendor. He held that there had been an implied term of their agreement that the vendor's requirements as to the breakdown of the cheques had to be given within a reasonable time of the deadline for completion. In this context, a reasonable time was the time "it would take for a reasonably competent conveyancer to check the figures and then comply with the request and complete, without unusual pressure, before the deadline". He concluded that, although there was little time to spare, the cheques and cashier's orders could have been drawn and signed in time, and that "the time available was sufficient for the experienced conveyancer to comply without risk of being too late for completion". He therefore dismissed the purchaser's claim against the vendor, and gave judgment for the vendor on its counterclaim. However, he limited the vendor's damages to the amount of the deposits (up to the contractual limit of 10% of the purchase price).
16. The judge then turned to the purchaser's alternative claims against its solicitors and the bank. The judge concluded that the reason why the deadline had not been met was not so much because of the lateness of the information relating to the breakdown of the cheques, but rather because of the mistakes made by the purchaser's solicitors in dealing with the bank. That was what had caused the two cashier's orders not to be issued until 12.48 p.m., and it was that which had resulted in the purchaser's solicitors failing to complete in time. The judge was unable to find any negligence on the part of the bank, but he found that the purchaser's solicitors had been negligent in respect of the mistakes which they had made in their preparation of the documents for the bank. He therefore dismissed the purchaser's claim against the bank, but he gave the purchaser judgment against its solicitors. However, he limited the purchaser's damages to the deposits which it had forfeited to the vendor.
17. The judge made no findings on the purchaser's allegation that the vendor's solicitors (presumably on the instructions of the vendor) had manipulated the purchaser into failing to meet the deadline for completion - by deliberately (a) delaying its response to the purchaser's solicitors' request for the breakdown of the cheques and cashier's orders and (b) being unavailable to respond to the purchaser's solicitors' requests for a short extension of the deadline. In a rising market, the vendor may have wanted to get out of its agreement with the purchaser, so as to be able to sell the shop to another buyer at a higher price. The purchaser pointed to the fact that the latest that Delight's solicitors had notified the vendor's solicitors of the breakdown of the seven cheques required by them was 9.36 a.m. on 2 September (i.e. more than 1 1/2 hours before the vendor's solicitors notified the purchaser's solicitors of the breakdown of the nine cheques which they required). Even then, that evidence was hearsay, and it looked as if Delight's solicitors had notified the vendor's solicitors of their requirements on the previous day. The purchaser also pointed to the vendor's surprising ability to raise the whole of the purchase price of $53m. during the afternoon of 2 September so as to be in a position to complete its purchase of the shop from Delight by 5.00 p.m.
The appeal
18. Only the purchaser's solicitors are appealing against the judge's findings on liability. Thus, there is no appeal by the purchaser against the dismissal of the purchaser's claim against the vendor. However, the purchaser's solicitors are appealing not only against the judgment given against them in favour of the purchaser, but also against the dismissal of the purchaser's claim against the vendor. Mr Benjamin Chain for the vendor did not contend that the purchaser's solicitors were not entitled to appeal against the dismissal of the purchaser's claim against the vendor, although he naturally sought to support the judge's dismissal of the purchaser's claim against the vendor. However, both the vendor and the purchaser are appealing against the limits placed by the judge on the awards of damages.
The liability of the vendor
19. The purchaser's claim against the vendor depends on whether the vendor had been in repudiatory breach of the agreement. The critical clause in the agreement is clause 37, which provided:
"It is hereby agreed that in respect of the payment of the balance of the purchase price required to be made by the Purchaser hereunder, the Purchaser shall deliver to the Vendor's Solicitors on the date on which such payment is required to be made hereunder cashier order(s) issued by and/or Solicitors' cheque(s) drawn on a licensed bank in Hong Kong in favour of such person(s) as the Vendor or the Vendor's Solicitors may direct for the relevant amount and the obligation of the Purchaser to make payment hereunder shall not be deemed discharged unless payment is made in the manner hereinbefore provided."
Three comments should be made on that clause:
(i) Cashier's orders or cheques had to be drawn "in favour of such person(s) as the Vendor or the Vendor's Solicitors may direct for the relevant amount". Thus, the vendor was contractually entitled to direct how the balance of the purchase price was to be paid, i.e. what the breakdown of the cashier's orders or cheques should be.
(ii) If the vendor did not exercise that right, the purchaser's obligation was simply to tender to the vendor the balance of the purchase price by the deadline for completion.
(iii) Once the vendor had exercised that right, the purchaser had no choice in the matter. The words "the obligation of the Purchaser to make payment hereunder shall not be deemed discharged until payment is made in the manner hereinbefore provided" meant that the purchaser's obligation to pay the balance of the purchase price could only be discharged by tendering cheques or cashier's orders in such amounts and drawn in favour of such payees as the vendor had directed. Thus, the balance of the purchase price had to be paid in accordance with the vendor's directions.
20. It goes without saying that, if the vendor exercised its right to direct how the balance of the purchase price was to be paid, the vendor had to give the purchaser sufficient time to comply with that direction. Otherwise, it could give the direction a few minutes before the deadline for completion, and thereby force the purchaser into repudiatory breach of the agreement. That distinguishes this agreement from the agreement between the vendor and Delight of 13 June for the vendor's purchase of the shop: under that agreement, Delight had to give the purchaser "at least one days prior notice in writing" as to how the balance of the purchase price was to be paid. Since no such time limit was included in clause 37, there had to be some mechanism which prevented the vendor from manipulating the purchaser into a position where it would inevitably be in breach of the agreement. What divides the purchaser and the vendor is how that was to be prevented from happening.
21. The purchaser's solicitors say that a suitable term should be implied into the agreement. The vendor's approach is radically different. It proceeds on the basis that it was up to the vendor to decide whether to direct how the purchase price was to be paid. If such a direction was given by the vendor too late for the purchaser to comply with it by the deadline, the vendor should be regarded as not having exercised its right to direct how the balance of the purchase price was to be paid. Thus, the direction should be treated as not having been given, and the purchaser's obligation was simply to tender the balance of the purchase price by the deadline. Since the purchaser did not do that, it was the purchaser who was in repudiatory breach of the agreement.
22. We cannot go along with that argument. We have some difficulty in treating what purported to be an unqualified exercise by the vendor of its right to direct how the balance of the purchase price was to be paid as if that right had never been exercised at all. But apart from that, if the vendor's argument is correct, the purchaser is placed in an impossible position. It will not know whether it is obliged simply to tender the balance of the purchase price by the deadline, or to attempt to comply with the direction and try to pay the balance of the purchase price in accordance with it. If it simply tenders the balance of the purchase price by the deadline, it may be met with an argument that the direction had not been given too late and that its obligation had been to pay the balance of the purchase price in accordance with the direction. If it tries to comply with the direction but fails to meet the deadline, it may be met (as happened to the purchaser in this case) by a refusal to accept late payment. The vendor's argument, in other words, requires the purchaser to make a difficult judgment as to whether the direction will subsequently be held to have been given in time or too late. In our view, the only practical solution to the problem which would be created by a late exercise by the vendor of its right under clause 37 of the agreement to direct how the balance of the purchase price is to be paid is to imply a suitable term into the agreement. That was the approach of the judge and we agree with him.
23. There was some argument before us as to the basis on which a suitable term should be implied - whether to give effect to what the parties would unhesitatingly have agreed if the omission to provide expressly for the latest time when the vendor could have directed how the balance of the purchase price was to be paid had been pointed out to them, or whether to make the agreement work since without a suitable term being implied the agreement would not work, or whether on some other basis (such as the category of case referred to by Lord Wilberforce in Liverpool City Council v. Irwin [1977] AC 239 at p. 254A-B). We do not think that it is possible to state categorically what the parties would have agreed if the omission to provide expressly for the latest time when the vendor could have directed how the balance of the purchase price was to be paid had been pointed out to them. But on both the other bases on which a term can be implied, we see no difference in the sort of term which it would be appropriate to imply. Such a term would be that
(i) in the event of the vendor exercising its right under clause 37 of the agreement to direct how the balance of the purchase price was to be paid, the vendor would give that direction in sufficient time for the purchaser to be able to comply with it, without undue pressure, by the deadline for completion, and
(ii) in the event of such a direction being given too late for the purchaser to be able to comply with it, without undue pressure, by the deadline for completion, the vendor would grant the purchaser such an extension of time as the purchaser reasonably required to comply with the direction.
That is not quite the implied term pleaded by the purchaser in its Amended Statement of Claim or found by the judge, but it is the implied term which we regard as appropriate.
24. What would amount to a sufficient time for the purchaser to be able to comply with a direction under clause 37, and what would amount to the time for which a purchaser would reasonably require an extension in order to be able to comply with such a direction, are questions which should not be answered with the advantage of hindsight. Since the rationale of implying a term is to give effect to the presumed intention of the parties at the time their agreement was made, the questions should be answered from the standpoint of the parties when their agreement was entered into. That was common ground between Mr Chain and Mr Nigel Aiken SC for the purchaser's solicitors. The error into which the judge fell - in answering the question whether reasonable time had been given - was looking at the question in the light of the problems which had actually occurred rather than in the light of what the parties on 20 June could reasonably have anticipated would occur.
25. Looked at in that light, there is, in our view, only one answer. The vendor would have known on 20 June that Delight might exercise its right under the agreement of 13 June to require the balance of the purchase price to be paid by different cheques drawn in favour of different payees. The vendor would (or should) have appreciated that it might want to pass that on to the purchaser, together with additional cheques of its own. Thus, the vendor would (or should) have appreciated that it might require the purchaser to pay the balance of the purchase price by a large number of cheques drawn in favour of different payees. Moreover, the vendor would (or should) have appreciated that the purchaser might need to raise funds in order to finance the purchase of its shop. Thus, the vendor would (or should) have appreciated that some or all of the cheques which it might require might have to be drawn on the account of a lending institution of one kind or another. Thus, the vendor would (or should) have appreciated that the time which the purchaser would need to be able to comply with the direction to pay the balance of the purchase price by a number of cheques drawn in favour of different payees would have to take into account
(a) the time which it would take for the purchaser's solicitors to check the vendor's figures (to satisfy themselves that the amounts of the various cheques added up to $46.75m.),
(b) the time which it would take for the purchaser's solicitors to notify the lending institution of the amounts of the cheques which it had to draw,
(c) the time which it would take for the lending institution to draw those cheques,
(d) the time which it would take for the lending institution to send those cheques to the office of the purchaser's solicitors, and
(e) the time which it would take for the purchaser's solicitors to take those cheques to the office of the vendor's solicitors,
bearing in mind that these steps would have to be taken in the midst of other work upon which the purchaser's solicitors and the lending institution would be engaged.
26. It is unnecessary for us to decide how much time would have been sufficient for a purchaser to be able to comply with the vendor's direction under clause 37 without being placed under undue pressure. We are inclined to think that half a working day would have been sufficient, so that since the deadline for completion was 1.00 p.m., the time by which the vendor's solicitors should have notified the purchaser's solicitors of their requirements under clause 37 was 9.00 a.m. But we reach no conclusion on this topic, because it is sufficient for us to state that 11.13 a.m. was too late for the vendor's solicitors to notify the purchaser's solicitors of their requirements under clause 37 - especially as time was lost with the discrepancy in the figures, with the result that it was not until 11.48 a.m. that the purchaser's solicitors were able to begin complying with the requirement.
27. We have not overlooked the fact that the lapse of time before the Bank drew the two cheques which it was required to draw was the consequence of mistakes on the part of the purchaser's solicitors in drawing up the mortgage documents and the new covering letter. It may be that if these mistakes had not occurred, the Bank would have drawn the two cheques earlier, and the deadline would have been met. But the fact that the deadline might have been met if the purchaser's solicitors had not made these mistakes does not affect the critical question whether they were given sufficient time to comply without undue pressure with the direction under clause 37 in the first place. Since they were not, the vendor was in breach of the implied term requiring it to give sufficient time for its direction under clause 37 to be complied with without the purchaser's solicitors being placed under undue pressure of time. And the vendor's solicitors' refusal to extend the deadline by 6 minutes so as to enable the purchaser's solicitors to comply with the direction under clause 37 was a breach of the implied term requiring the vendor to grant such an extension of time as the purchaser reasonably required to comply with the direction. It follows that it was the vendor which was in repudiatory breach of the agreement and not the purchaser.
28. However, it is still necessary to decide what actually caused the purchaser's purchase of the flat to be aborted. If it was not caused by any breach of contract on the part of the vendor, the purchaser's damages for the vendor's breach of contract will be nominal only. It may be that, if the purchaser's solicitors had not made any mistakes in the preparation of the documents for the Bank, they would have been able to meet the deadline for completion. Their mistakes may therefore have contributed to the deadline not being met. But the critical question is not so much what caused the deadline not to be met, but rather what caused the purchaser's purchase of the shop to be aborted, since it was from that that the purchaser's loss flowed. The answer is that it was the vendor's failure, in breach of the implied term which we have identified, to extend the deadline for completion by the 6 minutes which the purchaser's solicitors had reasonably required.
29. Mr Edward Chan SC for the purchaser and Mr Chain have agreed what the purchaser's remedy should be in the event of the court giving judgment in favour of the purchaser against the vendor. They have agreed that the vendor must repay to the purchaser the sum of $8.25m. being the deposits paid by the purchaser to the vendor. Moreover, for the purposes of this appeal, they have agreed that the market value of the shop on 2 August was $63m. Thus, they have agreed that the vendor must also pay to the purchaser damages to be assessed at $8m., being the difference between the price which the vendor agreed to sell the flat for and the agreed market value of the flat on the date when completion should have taken place.
The liability of the purchaser's solicitors
30. There is nothing in principle which prevents the purchaser from retaining its judgment against its solicitors while at the same time obtaining judgment against the vendor. Its pleaded cause of action against its solicitors was negligence, i.e. in tort alone, although the purchaser's case could also have been pleaded on the basis of a breach by its solicitors of their contractual duty to take care arising from their retainer.
31. The judge found that, in making the mistakes which they did in their documentation for the Bank and in the new covering letter, the purchaser's solicitors "failed to exercise reasonable care and skill in the handling of their client's affairs, judged by the standard of what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession". Having looked carefully at the errors which the purchaser's solicitors made, we are not inclined to disagree with this view, though we add that in the overwhelming majority of cases, minor errors of the kind which the purchaser's solicitors made would not have any adverse impact on their client's affairs. However, where we disagree with the judge is with his conclusion that it was these errors which caused the purchaser's loss. Our reasons are precisely the same as those we gave for concluding that the purchaser's loss flowed from the vendor's breach of the implied term. Although the purchaser's solicitors' mistakes may have contributed to the deadline not being met, what caused the purchaser's loss was not those mistakes but the vendor's refusal to extend the deadline for completion. Since loss is an essential ingredient of the tort of negligence, the purchaser's cause of action against its solicitors had to fail.
Conclusion
32. For these reasons, the purchaser's solicitor's appeal against the dismissal of the purchaser's claim against the vendor is allowed, and the judge's orders dismissing the purchaser's claim against the vendor and entering judgment for the vendor on its counterclaim against the purchaser are set aside. For his orders, there will be substituted orders that (a) judgment be entered for the purchaser on its claim against the vendor in the sum of $16.25m., with interest on that sum (as agreed between Mr Chan and Mr Chain) at the rate of 10.5% from 3 August 1997 when the writ was issued until the date of this judgment and thereafter at the judgment rate, and (b) the vendor's counterclaim against the purchaser be dismissed. The purchaser's solicitors' appeal against the judge's order entering judgment for the purchaser on its claim against the purchaser's solicitors is allowed, the judge's order must be set aside, and for his order there will be substituted an order entering judgment for the purchaser's solicitors on the purchaser's claim against them.
33. At present, we see no reason why the purchaser's costs should not follow the event. Accordingly, the order nisi we make as to costs is that the vendor must pay to the purchaser its costs of the action and of the appeal to be taxed if not agreed. As to the purchaser's solicitors' costs, we do not think that the purchaser can be criticised for suing them, even though in the event the action against them failed. In the circumstances, we think that the just order is that there be an order of the kind made in Sanderson v. Blyth Theatre Co. [1903] 2 KB 533, namely that the vendor must pay to the purchaser's solicitors their costs of the action and of the appeal, and that is the order nisi which we make in connection with their costs.
(Brian Keith)
Justice of Appeal | (Frank Stock)
Justice of Appeal | (Doreen Le Pichon)
Justice of Appeal |
Representation:
Mr Edward Chan SC and Mr Wallace Cheung, instructed by Messrs. Bosco Tso & Partners, for the Plaintiff
Mr Benjamin Chain, instructed by Messrs Iu, Lai & Li, for the 1st Defendant.
Mr Nigel Aiken SC and Mr Russell Coleman, instructed by Messrs Deacons, for the 2nd Defendant.
Appeal by the 1st Defendant to the Court of Final Appeal. Appeal dismissed. Please refer to the Appeal Judgment FACV000010/2001.
Appeal by the 1st Defendant to the Court of Final Appeal. Appeal dismissed. Please refer to the Appeal Judgment FACV000010/2001