BRIGHT GOLD LTD v. MEGA WELL DEVELOPMENT LTD

HCA 2194/2011

[2023] HKCFI 594

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2194 OF 2011

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BETWEEN

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JUDGMENT

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Introduction

1.  This is the re-trial of the Counterclaim in the Action on the issues of liability.

2.  The underlying subject matter is the sale and purchase of a residential property in Shatin ie Duplex B on the 32/F and 33/F of Block 1 (“Duplex B”) of a new development known as “Hill Paramount (名家匯)” (“Development”), together with balcony, utility platform, roof staircase, flat roof and roof thereof and 3 car parking spaces on Level 1 (collectively “Property”). The purchase price was HK$69.8 million.

3.  The Plaintiff was the purchaser under:

(a) a Provisional Agreement for Sale and Purchase dated 16 August 2011 (“PSPA”),

(b) a Formal Agreement for Sale and Purchase dated 22 August 2011 (“SPA”), and

(c) an Assignment dated 2 December 2011 (“Assignment”).

4.  The Defendant was the estate agent involved in the transaction.

5.  Two other entities were involved in the original trial but not this re-trial viz Bright Gold Limited (“Bright Gold”), a subsidiary of the Henderson Group, which was the developer and vendor of the Property and Messrs Woo Kwan Lee & Lo (“WKLL”), the Plaintiff’s solicitors in the transaction.

6.  The Plaintiff’s claim against the Defendant is for certain oral representations made through its staff Ms Stella Wong (“Stella Wong”) to Ms Cheng Shui Chu Katherine (“Madam Cheng”), the sole director and shareholder of the Plaintiff, during the viewings of the Property and in the office of WKLL. The representations made by Stella Wong (“Representations”) were to the effect that the private roof which formed part of the Property (“Private Roof”) extended from a glass door (“Glass Door”) to 2 pillars (“2 Pillars”) some distance away on the roof of Block 1 (“Block 1 Roof”). For ease of reference, this is what the Plaintiff describes as the yellow area (“Yellow Area”). Since the Yellow Area is in fact much larger than the actual Private Roof, the Plaintiff claims it had been misled by the Defendant. The Yellow Area can be seen on the Roof Plan at Annex 1 of the Statement of Claim dated 5 January 2021. This plan was prepared for the purpose of this litigation.

7.  In the Statement of Claim dated 5 January 2021, the Plaintiff has pleaded a case that the Representations were made negligently and/or recklessly. in Madam Cheng’s 1st witness statement (“Cheng 1”) at para 52, she says she believes Stella Wong knew full well the Representations were incorrect in order to earn commission ie a case of deliberate and fraudulent misrepresentation. This was confirmed by Madam Cheng to this court in the morning of Day 3. As Mr Yan SC points out in his Closing, the Plaintiff’s case has been shifting since the beginning of this Action between fraudulent misrepresentation, in the Plaintiff’s original Defence and Counterclaim dated 17 April 2012, and negligent and/or reckless misrepresentation, in the Plaintiff’s Statement of Claim dated 5 January 2021, and then back to fraudulent misrepresentation in Madam Cheng’s testimony for this re-trial.

8.  Since the Plaintiff is accusing Stella Wong of fraud, while the standard of proof is still the civil standard, the evidential burden on it has to be commensurate with the seriousness of the allegation so that more compelling and stronger evidence is required to prove its case.

9.  It is not in dispute that the Yellow Area was part of the common area of the Development and not part of the Property. According to the Defendant, the Yellow Area exceeded 45 sq m.

10.  The actual Private Roof included 2 relatively small areas on the Block 1 Roof. For ease of reference, the correct plan identifying the Private Roof is coloured pink (“Rectified Plan”) in Annex 2 of the Statement of Claim.

11.  Physically, the Private Roof was situated on two different levels. First, on the 33/F of the Property, there was an internal staircase which led onto the Block 1 Roof. At the top of the stairwell (“Stairwell”), there was the Glass Door and by opening that outwards, one could enter the Block 1 Roof. Only a narrow strip of the roof area just outside the Stairwell of about 0.5m x 4.7m was part of the Property. Second, the area where the outdoor units of air-conditioners and boilers serving the Property were situated and was only accessible by way of a cat ladder (“B Upper Roof”). According to the Sales Brochure for the Development (“Sales Brochure”), the Property had an “Extra Roof Area” of 199 sq ft (saleable area) which is the total area adding up the narrow strip and the B Upper Roof.

12.  Apart from Duplex B, there were 2 other duplexes in Block 1 – Duplex A, which were on the same floors as the Property ie 32/F and 33/F (“Duplex A”) and Duplex C, which were one floor level lower than Duplex B ie 31/F and 32/F (“Duplex C”).

13.  Duplex A came with a rather larger roof (“A Roof”), located immediately above the 33/F area of Duplex A, as well as a part of the upper roof of Block 1. Duplex C included an area on the Block 1 Roof almost of a square shape (“C Roof”), which was located right above the covered area of Duplex C and importantly was only accessible from Duplex C. It appears from the Sales Brochure that the outdoor air-conditioner units for Duplex C were located there.

14.  Prior to the signing of the PSPA on 16 August 2011, there were two viewings at the Development by the Plaintiff on 14 and 15 August 2011 respectively (“1st Viewing” and “2nd Viewing”). At the time of these viewings, Duplex B was furnished and was used by the developer as a show flat. As for the Private Roof, there was no physical marking on the Block 1 Roof to demarcate the area which was exclusively allocated to the Property.

15.  The PSPA was signed in a temporary sales office (“Sales Office”) on 25/F of Block 1 which was converted from one of the units in the Development. The PSPA was in a printed form prepared by Henderson Real Estate Agency Ltd (“Henderson Agency”) who acted as agent for Bright Gold.

16.  The signing of the SPA by Madam Cheng on behalf of the Plaintiff was at the WKLL Office on 19 August 2011 (“WKLL Meeting”). The draft of the SPA was provided by Bright Gold’s solicitors, Messrs Fairbairn Catley Lo & Kong (“Fairbairn”) with a roof plan annexed to it (“SPA Roof Plan”) which can be found in Annex 3 of the Statement of Claim. The SPA Roof Plan contained a square area in the middle of it ie the C Roof which was wrongly coloured pink as constituting part of the Private Roof. This error does not relate to the Plaintiff’s claim for misrepresentation against the Defendant.

17.  After the signing of the SPA by Madam Cheng on behalf of the Plaintiff, there was another viewing at the Development on 20 August 2011 (“3rd Viewing”).

18.  Completion of the sale and purchase took place on 2 December 2011.

19.  On 3 December 2011, the Plaintiff took possession of the Property when it was informed by the management staff that much, if not all, of the Yellow Area was common area.

20.  On 22 December 2021, Bright Gold commenced this Action against the Plaintiff for rectification of the SPA Roof Plan so that the C Roof would be excluded from the Property. The Plaintiff counterclaimed against inter alia the Defendant for misrepresentation.

21.  On 9 January 2019, the learned trial Judge handed down his Judgment in which he entered judgment in favour of the Plaintiff against Bright Gold and Centaline and found inter alia that Centaline had made the Representations. The Plaintiff was held to be entitled to rescind the PSPA and the SPA. Its claim against WKLL was dismissed.

22.  This re-trial was conducted pursuant to the Order of the Court of Appeal. In their reasons for Judgment dated 17 July 2020 (“CA Judgment”), the Court of Appeal held inter alia that the assessment by the learned trial Judge of the material evidence concerning the alleged misrepresentation by the Defendant and the alleged reliance thereon by the Plaintiff was tainted by misapprehension as to the significance of such evidence in the overall context of the dispute sufficient to set aside his findings on the alleged misrepresentation and reliance: Bright Gold Ltd v. Mega Well Development Ltd [2020] 4 HKLRD 26 at [44] and [45]:

“V. The Oral Misrepresentation and Reliance Issue

44. Mr Yan SC (appearing with Ms Leung for Centaline) submitted that in his assessment of the evidence pertaining to Oral Misrepresentation, the Judge erred in failing to apprehend the significance of several parts of the evidence. For present purposes, it is sufficient to concentrate on two aspects of evidence which are of great significance to the Oral Misrepresentation and Reliance Issue:

(a) The evidence on the Sales Brochure;

(b) The evidence regarding the WKLL Meeting.

45. Whilst this is an appeal against factual findings by the Judge on the Oral Misrepresentation and the reliance by Mega Well on the Oral Misrepresentation, we are persuaded by Mr Yan that the Judge’s assessment of the material evidence was tainted by misapprehension as to the significance of such evidence in the overall context of the dispute.”

The parties’ cases

Plaintiff’s case

23.  Stella Wong had acted as the estate agent for Madam Cheng in a number of prior purchases since around 2004. By reason of these prior purchases, Madam Cheng has developed rapport, trust and reliance upon Stella Wong for property dealings and Stella Wong has gained a sufficient understanding of Madam Cheng’s preference and/or requirement.

24.  At all material times, Madam Cheng’s personal preference and business needs of a spacious private outdoor area for eg BBQ parties was clearly made known to Stella Wong. With full knowledge of such preference, Stella Wong arranged a number of viewings and a meeting at WKLL Office ie the WKLL Meeting which led to the purchase of the Property.

25.  Regarding the 1^st Viewing on 14 August 2011, Madam Cheng had an appointment with Stella Wong to view some properties in the New Territories. Madam Cheng was accompanied by her husband Mr Tam Kwok Wa, Ivor (“Tam”) and the company secretary Ms Miranda Cheung (“Miranda”). Stella Wong was accompanied by her colleague Ms Wendy Shum (“Wendy”). Madam Cheng did not find the properties shown to her suitable. As an impromptu response, Stella Wong suggested that Madam Cheng should view a new development and they subsequently went to view the Property.

26.  After viewing the internal area of Duplex B, Madam Cheng, Stella Wong and those accompanying them then went up to the Block 1 Roof via an internal staircase. The roof area right outside the Stairwell was decorated with a round lawn area at which a table, chairs and potted plants were placed. When viewing the roof area, Madam Cheng asked Stella Wong about the area of the roof that formed part of the Property.

27.  First, Stella Wong told Madam Cheng that the Private Roof extended from the Glass Door to the 2 Pillars at a distance away ie the Yellow Area. Stella Wong also said to Madam Cheng that (i) the Private Roof would be sufficient outdoor space for her to hold BBQ parties for her business associates’ and her family’s entertainment, and (ii) when holding BBQ parties, they could move the table, chairs and plants to the two sides of the roof and leave the middle area for BBQ. Second, there were conversations Between Stella Wong and Madam Cheng about delineating the Private Roof with large potted plants as well as emergency fire escape concerns.

28.  On this occasion, Stella Wong had never shown Madam Cheng the 2 areas shaded pink on the Block 1 Roof Plan in her iPad. Madam Cheng also denies having proceeded to the Sales Office after viewing the Property or that Stella Wong has given her a copy of the Sales Brochure.

29.  After the viewing, Madam Cheng and Tam were driven home by Stella Wong. From inside Stella Wong’s car, Madam Cheng obtained a copy of the large size marketing brochure “Hill Paramount (名家滙) A Masterpiece for the Mastermind” (“Marketing Brochure”). After Madam Cheng and Tam had gone home and studied the Marketing Brochure, they noted that the Property was not mentioned in it - rather the floor plans and description of Duplex C and Duplex A of Block 1 were shown at pages 54 and 55. Indeed, the only brochure Madam Cheng has ever obtained prior to signing the PSAP was the Marketing Brochure.

30.  Regarding the 2nd Viewing on 15 August 2011, Madam Cheng went along with Tam. They met Stella Wong and were taken to what appeared to be a living room inside the Sales Office while waiting for Madam Cheng’s brother and his family. After the arrival of Madam Cheng’s brother and his family, Stella Wong showed them 3 special units including the Property. The party, together with Henderson’s staff, later went to the Block 1 Roof.

31.  While on the Block 1 Roof, in response to enquiry from Madam Cheng’s brother, Stella Wong repeated what she had said the previous day ie the Private Roof of the Property extended from the Glass Door to the 2 Pillars. On this occasion, only Stella Wong and Wendy from the Defendant were present. Their supervisor Philip Ng (“Philip”), who was the Senior District Sales Director of the Kowloon Tong Beacon Hill branch, was not. Indeed, Philip was never present during any of the viewings.

32.  For the purpose of comparison, Madam Cheng, Stella Wong and those accompanied them proceeded to view 2 other units. First, they went down to 31/F to view Duplex C of Block 1. They then went over to Block 2 and viewed Duplex B on 32/F and 33/F which could be said to be a mirror unit of the Property but was unfurnished.

33.  Relying on Stella Wong’s Representations during the 2 viewings, Madam Cheng was satisfied with the Property and considered its Private Roof was sufficiently spacious for her purpose. On 16 August 2011, the Plaintiff and Bright Gold entered into the PSPA.

34.  On 19 August 2011, the WKLL Meeting was held in the WKLL Office for the purpose of explaining the terms of the SPA to Madam Cheng and her signing of it in advance. At this meeting, Madam Cheng was accompanied by Tam, Miranda and Stella Wong. They met Ms Lau Lai Sze (“Joey Lau”), the handling partner, in a conference room. Initially, Joey Lau requested Stella Wong to leave but she declined.

35.  During the meeting, after having referred to Schedule 3 of the SPA which set out the saleable area of various parts of the Property, Joey Lau told Madam Cheng that the part coloured pink on the SPA Roof Plan “belonged to” the Property and she should check it carefully. On the other hand, Stella Wong said to Madam Cheng that the Private Roof was so big, it was well sufficient for her use. Joey Lau then said it should not be exaggerated and only the parts coloured pink were part of the Property. At that time, Madam Cheng was confused about the SPA Roof Plan. She did not know how to interpret the floor plans shown to her. However, Stella Wong picked up the document containing the floor plans in front of Madam Cheng, took a look, said there was no error and she could sign on it.

36.  Regarding the 3rd Viewing of the Property on 20 August 2011, Madam Cheng went with Tam, Miranda, her family members as well as a friend Mr Roberto Passador (“Passador”). Only Stella Wong and Wendy of the Defendant were present.

37.  When Madam Cheng, Stella Wong and those accompanied them were viewing the Block 1 Roof, Passador asked Stella Wong to identify the Private Roof which belonged to the Property. In response, Stella Wong repeated the same representations as previously made by her on 14 and 15 August 2011. Stella Wong pointed out the 2 Pillars to Passador while making the representations. Passador also asked Stella Wong whether there would be iron gates for partitioning the Private Roof. Stella Wong replied that the Property was very new and the installation of the partition would be completed soon.

38.  It is the Plaintiff’s case that in reliance on the Representations, it entered into the PSPA and the SPA and completed the purchase.

39.  On 3 December 2011, the Plaintiff obtained the keys and took possession of the Property when it discovered that the Yellow Area was not the Private Roof of and did not “belong to” the Property.

Defendant’s Case

40.  The Defendant’s case is simple.

41.  Primarily, Stella Wong had not made the Representations as alleged and there could be no reliance by the Plaintiff - it had all along been apprised of the true and correct position ie the Yellow Area was not part of the Property. Even if Stella Wong had made the Representations during the 1st and 2nd Viewings, the Plaintiff had been apprised of the true and correct position by Joey Lau at the WKLL Meeting on 19 August 2011.

42.  Alternatively, even if the Representations had been made, the Plaintiff had imputed and/or constructive knowledge of the falsity of the Representations because at the material time, WKLL and in particular Joey Lau were authorized by the Plaintiff to receive on its behalf all relevant information relating to the Property. Hence, WKLL and Joey Lau were under a duty to read and would have read the approved building plans of the Development and the deed of mutual covenant and did read the SPA thereby acquiring knowledge that the Private Roof of the Property did not include the Yellow Area. Neither Madam Cheng nor any servant or agent of the Plaintiff had ever told the Defendant of her alleged intention to purchase the Property with the Yellow Area, and it was entitled to believe that the Plaintiff/Madam Cheng had received notice of the true and correct position so as to correct the Representations.

43.  It is fair to say that, judging from Mr Yan SC’s Closing, he does not really press upon the Defendant’s alternative case. In these circumstances, this court will only concentrate on the Defendant’s primary case.

Deliberation

The issue and the witnesses

44.  The parties are in agreement that the central question is largely a factual one ie whether the Property was purchased by the Plaintiff in reliance on the Representations by the Defendant through its agent Stella Wong.

45.  The Representations are pleaded at:

(a) para 21 of the Statement of Claim as “the Yellow Roof Area formed part and parcel of the area of the roof of Duplex B and the exclusive right to possess belonged to the owner of Duplex B” and

(b) para 22 of the Statement of Claim as “由於該單位的玻璃門（位於天台一層）起到對面的兩條方柱（包括戶外擺設）都是屬於該單位的私人天台範圍，私人天台的位置正是在該單位33樓上面的一部份。該天台範圍足夠[Madam Cheng] 在日後舉行barbecue party，與家人及朋友相聚，及款待客戶。”.

46.  That was a reference to the Representations allegedly made at the 1st Viewing.

47.  At para 24 of the Statement of Claim, in relation to the 2nd Viewing, the gist of the Representations is pleaded as “天台的位置是由單位的玻璃門起到對面的兩條柱位。”

48.  The Representations, if made, are admittedly false. Indeed, it is the Defendant’s position that if Stella Wong had made the Representations and the Plaintiff had reasonably relied upon them, then it would have been in breach of a duty owed to the Plaintiff.

49.  At the re-trial, the Plaintiff called 4 witnesses:

(a) Madam Cheng.

(b) Tam.

(c) Miranda.

(d) Passador.

50.  The Defendant called its 3 staff as witnesses:

(a) Stella Wong.

(b) Wendy.

(c) Philip.

51.  The Defendant also relied on the witness statements of 4 witnesses previously filed in this Action and called the first 3 of them:

(a) Joey Lau.

(b) Ho Mei Wai Wen (“Ho”), secretary of Joey Lau.

(c) Mr Lai Tak Cheung (“Lai”), of Henderson Agency.

(d) Ms Leung Po Chi Cherry (“Leung”), of Henderson Agency[1].

52.  There is no doubt that the 2 main protagonists are Madam Cheng and Stella Wong while the role of the other witnesses is mainly corroborative.

53.  Mr Yan SC submits that Cheng and Tam are not credible witnesses, their testimony contains many inherent inconsistencies and is illogical and/or inherently improbable. Miranda is not an independent witness - at the time of the hearing, she was still under the employ of Madam Cheng and was obviously put forward by her employer to support the Plaintiff’s version of events. This is readily apparent from the almost identical language used in her witness statement when compared to those of Madam Cheng and Tam. Passador is also not an independent witness - he was Madam Cheng’s long time good friend and business partner. His testimony about the 3rd Viewing is also different from the Plaintiff’s original pleaded case at the first trial.

54.  On the other hand, Mr Choy SC has devoted an entire Section D1. of his Closing in challenging Stella Wong as an evasive and incredible witness and inviting this court to reject her testimony as well as the corresponding parts of Wendy’s and Philip’s evidence. As for Joey Lau, Ho and Lai, he invites this court to focus on the inconsistencies between their evidence and the evidence of the Defendant’s own staff, and in case of any such inconsistency, reject their evidence. There is no attack on the truthfulness of Joey Lau, Ho and Lai as such.

55.  The central question of this re-trial is largely a factual one and the witnesses have given competing versions of what happened and what was said at the material events. This court has carefully considered the testimony of all witnesses and assessed it against inter alia the contemporaneous documentary evidence and the known and undisputed circumstances of this case. This court has in particular considered the inherent probabilities or otherwise of the witnesses’ testimony and assessed their credibility accordingly. Further, since this is a re-trial, any unexplained/unjustified departure by any party of the case it previously ran at the original trial will be carefully scrutinized.

The 1st and 2nd Viewings - 14 & 15 August 2011

56.  The undisputed or indisputable facts are as follows.

(a) Between 2004 and 2007, Madam Cheng had purchased 3 increasingly larger and more expensive properties, all in Kowloon Tong, through Stella Wong’s introduction.

(b) The property Madam Cheng purchased in 2004 was in Chermain Heights in Kowloon Tong with a private roof at the price of HK$4,018,000.

(c) The property Madam Cheng purchased in 2006 was in Mount Beacon which was a first-hand property and did not include any outdoor area. It was a 1,500 sq ft unit and priced at HK$18.84 million.

(d) The property Madam Cheng purchased in 2007 was in Kowloon Tong Garden of around 2,000 sq ft with a 1,000 sq ft garden and courtyard. Madam Cheng paid HK$30.8 million for it.

(e) It was Madam Cheng who took the initiative to contact Stella Wong in around mid-2011 when she wanted to move away from her then residence in Kowloon Tong Garden and to purchase another home.

(f) On 13 August 2011, Stella Wong took Madam Cheng, Tam and Miranda to view 2 properties in Tsim Sha Tsui and Kowloon City. On that occasion, Madam Cheng told Stella Wong that if she did manage to buy a new property with her assistance, she would engage the Defendant to help her to sell her Kowloon Tong Garden property.

(g) Madam Cheng was a regular client of Stella Wong and was known to Stella Wong to be interested and experienced in the luxurious property market. Madam Cheng was a successful businesswoman. Miranda, who has known Madam Cheng for over 20 years, describes her as an astute businesswoman who has enjoyed great success in business.

(h) Stella Wong was an experienced estate agent. She started working as an estate agent in 1997 and joined the Defendant in 2002. By 2011, Stella Wong would have had 13 to 14 years of experience in the field.

(i) The Development was a new development and, as such, information about the units for sale, including the Property, would have been and was provided by its developer in inter alia the very detailed Sales Brochure. The Henderson group was a reputable developer in Hong Kong and there is no challenge to the accuracy of the Sales Brochure and its ready availability to potential buyers.

(j) Copies of the Sales Brochure were readily, freely and easily available from the Sales Office at the Development. The Sales Office was located at a unit in Block 1 of the Development.

(k) Stella Wong was well aware that, for any new development, it was more or less common knowledge that there would be a sales office on site and that information about the units for sale, in particular, something similar to the Sales Brochure, would be easily and readily available.

57.  Regarding the 1st Viewing, the Plaintiff’s detailed case has already been summarized above. Mr Choy SC also emphasizes 2 points: (i) the visit to the Property was an impromptu response after several other viewings of properties which Madam Cheng found unsuitable; (ii) the area right outside the Stairwell was decorated with a circular artificial lawn, plants in pots and garden furniture - there was no marking to delineate the Private Roof.

58.  On the other hand, Stella Wong’s and Wendy’s testimony in their witness statements (“Stella Wong 1”, “Stella Wong 2”, “Wendy 1” and “Wendy 2” respectively) is that since the visit on 14 August 2011 was impromptu, neither of them had the Sales Brochure immediately in hand. When they went to the Block 1 Roof, Stella Wong showed Madam Cheng the Block 1 Roof Plan in her iPad in order to explain where the Private Roof was - the only parts which were sold together with the Property were the 2 areas shaded pink and marked “Roof B” and “A/C B” on it. It is obvious from the plan that the area shaded pink and marked “Roof B” (discounting the Stairwell and internal staircase) is only a narrow rectangular strip and clearly not the Yellow Area. Stella Wong told Madam Cheng that she was unsure about the width of the strip or how to access the area marked “A/C B” and she had to enquire with the developer. They then proceeded to the Sales Office where Stella Wong obtained 2 copies of the Sales Brochure, made some enquiries with the staff, gave a copy of the Sales Brochure to Madam Cheng and recounted to her what she had been told by the staff.

59.  As for the 2nd Viewing, the Plaintiff’s detailed case has also been summarized above.

60.  Regarding the Defendant, Stella Wong’s testimony is that on 15 August 2011, Philip, Wendy and her arrived at the Development together and waited for Madam Cheng at the lobby. Madam Cheng, Tam and her relatives also attended this viewing but they did not arrive at the same time. When Madam Cheng and Tam arrived, she said her brother and family would arrive later. Philip, Wendy and Stella Wong then took Madam Cheng and Tam to wait in one of the meeting rooms of the Sales Office on 25/F. In that room, copies of the Sales Brochure were placed on a round table. Since Stella Wong had already given a copy to Madam Cheng the day before, she did not pass another copy to her. Shortly afterwards, Madam Cheng’s brother and family arrived.

61.  The party went to inspect the Property and the Block 1 Roof. Madam Cheng said she considered the Private Roof area was too small and she would not be able to have BBQ there. Madam Cheng indicated she wanted to place a barbeque stove, a table and chairs in the area outside the Private Roof. Stella Wong told Madam Cheng she could not do so as the area outside the Private Roof was common area. Madam Cheng then asked Philip, Stella Wong’s superior, if she could have BBQ in the common area. Philip replied that if she did so discretely, no one would know but she needed to clean up the area afterwards so that the neighbors would not complain.

62.  Afterwards, Madam Cheng still considered the Private Roof too small. Wendy therefore suggested to inspect Duplex A on 32^nd and 33^rd Floor of Block 2 (“Duplex A Block 2”) and Duplex C on 31^st and 32^nd Floor of Block 2 (“Duplex C Block 2”). Stella Wong suggested Madam Cheng to consider buying one of them. This was because while the internal area of the 2 duplexes was smaller and without renovation, they had a larger roof area than the Property. Subsequently, Stella Wong, Wendy and Philip accompanied Madam Cheng and her party to inspect the 2 duplexes. Madam Cheng was still not satisfied with the 2 duplexes and asked Stella Wong about the price of the Property. The party then went to the Sales Office. Philip asked the staff for the price of the Property and was told it would be HK$75 million. Madam Cheng said she would consider it and left.

63.  It is not in dispute that on 15 August 2011, Stella Wong had taken Madam Cheng and Tam to a unit in the Development which was (whether or not Madam Cheng realized it at the time) in fact the Sales Office to wait for Madam Cheng’s brother and his family. While there are a number of disputes between the parties as to what happened, the more material ones are: whether Philip was present at the 2nd Viewing, whether Madam Cheng had asked him whether she could have BBQ on the roof and what was his reply, whether Madam Cheng’s brother had asked Stella Wong which part of the Block 1 Roof “belonged to” the Property and whether she had repeated the Representations in response.

64.  In his Closing, Mr Choy SC submits that Stella Wong’s evidence about the 1st Viewing is inherently implausible and contrary to the practice of an experienced estate agent. He highlights the following “absurd” features of her evidence:

(a) Stella Wong admitted that prior to the tour to the roof at the 1st Viewing, she did tell Madam Cheng that the Property would include some roof area.

(b) When viewing the Block 1 Roof, Madam Cheng asked Stella Wong about the location and size of the roof which “belonged to” the Property. At this point in time, an experienced estate agent like Stella Wong must have realised that the client was enquiring about a real private roof for actual use and enjoyment.

(c) Stella Wong’s evidence was that she already noted from the roof plan in her iPad which indicated the narrow strip outside the Stairwell. If this part of her evidence were true:

(i) As an experienced estate agent, she must have realised that the narrow strip would offer no actual use and enjoyment to a client like Madam Cheng.

(ii) A reasonable estate agent in her situation must have pointed out this truth about the narrow strip. Yet, Stella Wong did not respond by simply telling Madam Cheng that this Property had no private roof for Madam Cheng’s actual use and enjoyment (“個物業可以話無私人天台俾你用”or“個天台唔係你嘅”) or words to similar effect.

(d) Instead, according to her evidence, Stella Wong went to obtain an answer from the Sales Office staff that the width of the strip was up to the front of the artificial lawn (“該長方形部份的闊度是到草地前位置”) which was vague and without any precise measurement. It is also unbelievable for Madam Cheng to have asked this question while she was actually standing around the narrow strip and saw that with her own eyes.

(e) During cross-examination, Stella Wong was very cautious and alarmed with this line of questioning.

(f) Assuming arguendo that what Stella Wong alleged were true, she was effectively trying to convince this court that a client checking out the private roof that she was interested in would, upon having already seen the strip outside the Glass Door, still have urged the estate agent to give the size and other information of that effectively unusable area.

65.  With respect, this court does not see how the description of Stella Wong’s evidence as “absurd” is justified.

66.  Even if Madam Cheng wanted a large roof for her exclusive use and Stella Wong realized it, the reality was that the Private Roof of the Property was only a narrow strip. This court is not entirely certain what an experienced and reasonable estate agent would have done or responded in the circumstances, but showing a client the floor plan provided by the developer in her iPad was not off the mark. If a client asked the estate agent to make some enquiries, this court cannot see why the estate agent would refuse to do so. As for the description that Stella Wong was very cautious and alarmed with this line of questioning, in this court’s experience as a trial Judge, it is not unusual for a witness to be cautious, especially when she is being accused of fraud. Importantly, from its observation, this court finds Stella Wong a straightforward witness who gave her testimony calmly and her answers to questions put to her were mostly direct. While she was in the witness box, this court did not detect any signs of embellishment of her testimony. Her credibility has withstood the vigor of Mr Choy SC’s cross examination.

67.  In relation to the 2nd Viewing, Mr Choy SC’s focus of challenge was whether Philip was present and if not he could not have said to Madam Cheng she could have BBQ parties on the roof but “靜靜雞”. What Philip actually said in his first witness statement was “悄悄地進行” and in his supplement statement was “靜靜雞”. In both statements, Philip also said Madam Cheng should clean up the place properly to avoid complaints from neighbours. Whether Philip was present on this occasion will be examined later but if he was present, it does not strike this court that his response was out of line with what an estate agent more experienced than Stella Wong and eager to sell the Property without lying might have said.

68.  This court has taken on board Mr Choy SC’s submissions on the credibility of Stella Wong and the other staff of the Defendant. This court is also mindful of Mr Choy SC’s general submissions that (i) Madam Cheng was not a sophisticated or highly educated person and it was reasonable for her to rely on the Defendant specifically Stella Wong to deal with property transactions and (ii) Madam Cheng’s intention to purchase the Yellow Area. However, for the reasons set out below, this court is satisfied that the testimony of Stella Wong, corroborated by Wendy and Philip, as to what happened on the 1st and 2nd Viewings is truthful and accepts it in preference to the account of Madam Cheng, corroborated by Tam and Miranda.

69.  First, it is inherently improbable that Stella Wong would have deliberately made the Representations in order to mislead Madam Cheng into purchasing the Property.

70.  Madam Cheng has been Stella Wong’s loyal and increasingly important client since 2004. Within a relatively short period of 4 years from 2004 to 2008, Madam Cheng had bought 3 properties in the luxurious neighborhood of Kowloon Tong ie Chermain Heights in Eastbourne Road, Mount Beacon in Cornwall Street and Kowloon Tong Garden in Cambridge Road, through the introduction of Stella Wong. When Madam Cheng wanted to buy a new home in 2011, she contacted Stella Wong. Madam Cheng was a successful and astute businesswoman, with experience in the luxurious property market. Stella Wong obviously knew that from her previous dealings with Madam Cheng.

71.  Stella Wong was an experienced estate agent and had survived in the sector for 13 to 14 years, having gone through the ups and downs of the property market in Hong Kong since 1997. She was well aware that for first-hand developments, it was well known that there would be sales offices on the site staffed by the developers and that information about the properties for sale, in particular in the form of sales brochures, would have been easily and readily available to potential buyers. If so, Stella Wong would know that any glaringly inaccurate information given to Madam Cheng about the Property would soon be found out to be untrue, whether from the staff at the Sales Office or from the Sale Brochure. And if she were found out, Stella Wong would lose not just the commission in relation to the Property, she would also lose her potential engagement to sell Madam Cheng's Kowloon Tong Garden property as well as her long-standing relationship with Madam Cheng.

72.  Second, according to Madam Cheng, Stella Wong’s motive in making the Representations was for the purpose of earning commission on the Property. This is also inherently improbable.

73.  At the material time, there were other properties in the Development which would meet Madam Cheng's preference for a large outdoor space. For instance, Duplex A Block 2 where the gross floor area of 4,300 sq ft is slightly less than that of the Property but it had a larger private roof of 338 sq ft compared with the narrow strip. Stella Wong explained in re-examination that she would have earned more or less the same amount of commission ie around HK$400,000 had Madam Cheng purchased it. Similarly, Duplex C Block 2 which had a smaller gross floor area but a large private flat roof area of over 1,000 sq ft was also available at the time. On Stella Wong’s undisputed testimony, if Madam Cheng had bought Duplex C Block 2, her commission would have been around HK$350,000 to HK$360,000. In other words, there was little incentive for Stella Wong to lie about the area of the Private Roof when she could have earned comparable commission by persuading Madam Cheng to buy other units in the Development.

74.  Third, it is accepted by Madam Cheng that on 15 August 2011, before going up to the Block 1 Roof, Stella Wong had taken her and Tam to a unit in the Development where she saw a model of the building in the living room and some table(s) and chair(s) as well as a photocopy machine in one of the rooms. There is no dispute that the unit was the Sales Office albeit she claims she did not know on that day.

75.  It seems to this court highly improbable that if Stella Wong had made the Representations at the 1st Viewing, she would have taken Madam Cheng to the Sales Office at the 2nd Viewing. As a matter of common sense, Stella Wong would have done her best to keep Madam Cheng away from it where she could and would have obtained accurate information about the Private Roof of the Property. This is really self-evident. Stella Wong knew there would be staff at the Sales Office who were there to answer questions from potential buyers. Stella Wong also knew copies of the Sales Brochure were readily and freely available there. So why would Stella Wong take Madam Cheng to the Sales Office and run the risk of Madam Cheng finding out about the Representations she made the day before were all lies?

76.  Further, Madam Cheng’s claim that she did not know the unit she was taken to was a Sales Office is also less than credible. For why else would there be a model of the building and a photocopy machine in the unit? If she was actually taken to the Sales Office, she would in all probability have seen copies of the Sales Brochure lying around. According to Lai, there were plenty of Sales Brochures as well as large and small Marketing Brochures at the Sales Office for interested buyers to take away for free. Yet in her witness statement, Madam Cheng said she did not pay attention to them.

77.  On the other hand, this court has considerable misgivings about Madam Cheng’s testimony, and in turn Tam’s and Miranda’s corroborative testimony.

78.  First, Madam Cheng’s oral testimony is that she had never asked Stella Wong about the size of the Yellow Area and Stella Wong had never told her about it. Madam Cheng’s explanation in Re-examination for this omission is that she had been onto the Block 1 Roof with Stella Wong who had pointed out to her the 2 Pillars from outside the Glass Door.

79.  In this court’s view, while Madam Cheng had been onto the Block 1 Roof with Stella Wong, that would only give her a rough idea of the size of the Private Roof but in itself would not inform her the actual area of the Yellow Area in terms of sq ft. If being able to hold private BBQ parties at an exclusive area on the Block 1 Roof was so important to Madam Cheng and if Stella Wong had indeed made the Representations, the size of the Yellow Area would be hugely relevant, not just in relation to the preference of Madam Cheng but also in relation to the price that she would consider acceptable. It is common sense and in any event accepted by Madam Cheng in court that the size of the Private Roof, as part of the Property, would affect the unit price of the Property and hence how much she would be willing to pay for it.

80.  Mr Yan SC submits that if Stella Wong had indeed made the Representations, it would not only have been logical, but indeed necessary, for Madam Cheng to have asked her about the actual size of the Yellow Area in terms of sq ft. The Plaintiff’s own pleaded case is that the difference in value between the Property with the Yellow Area and the Property without it is HK$3,050,000. This may not be a huge sum in light of the purchase price of the Property but, to an astute businesswoman like Madam Cheng, it is not a negligible sum either. Yet, Madam Cheng said she had not done so. It seems to this court that Madam Cheng’s omission is a cogent piece of evidence that Stella Wong had indeed given her details of the Property, including the Private Roof, both from the floor plans in her iPad and from the copy of the Sales Brochure given to Madam Cheng at the 1st Viewing. In other words, the reason for her omission to ask was because Madam Cheng already had the information she needed. This court agrees.

81.  Second, Madam Cheng is adamant that Stella Wong had never shown her the floor plans downloaded onto her iPad at the 1st Viewing. However, she also admitted in cross-examination at the first trial that during the 1st Viewing, Stella Wong had told her the gross floor area of the Property but that she could not remember whether it was 4,571 sq ft or 4,517 sq ft. During cross-examination at this trial, Madam Cheng confirmed that this was what had happened. According to the plans in Stella Wong’s iPad and the Sales Brochure, the correct figure is 4,571 sq ft. This is not a figure that one could normally remember by heart. As submitted by Mr Yan SC, since the 1st Viewing was impromptu, Stella Wong would not have prepared for it. Hence, the only probable reason that she was able to tell Madam Cheng the gross floor area of the Property in terms of square footage is that Stella Wong had her iPad with her and had looked at the plans downloaded for reference. If Stella Wong had her iPad with her and had referred to it, there is no reason why she did not show the plans to Madam Cheng. This has consistently been the Defendant’s case since the filing of its Defence to the Plaintiff’s Counterclaim back in June 2012.

82.  Third, it is the Plaintiff’s case that after the 1st Viewing, Madam Cheng and Tam obtained a copy of the Marketing Brochure inside Stella Wong’s car. When they were at home and looked at the Marketing Brochure, they noted that the Property was not mentioned in it - rather the floor plans and descriptions of Duplex A and Duplex C of Block 1 could be found at pages 54 and 55. Madam Cheng also said to Tam she really liked the Property and wanted to purchase it. In fact, Madam Cheng liked it so much that she suggested that her brother and his family should also live in it with her.

83.  Curiously, during cross-examination, Madam Cheng said she was not interested in finding out the relevant information about the Property equivalent to the information about Duplex A and Duplex C of Block 1 as contained in the Marketing Brochure. When Tam was asked about this during his cross-examination, he also said it had not occurred to him that they should look for the equivalent plans of the Property.

84.  When inquired by this court after her re-examination about her previous experience generally of viewing or buying first-hand properties eg the one she bought in Mount Beacon, Madam Cheng reiterated that she did not know there would be sales brochures, did not take notice of them or ask for copies. she even said she did not have a practice of finding out the details of the properties that she had viewed. She said she was very busy - whenever she wanted to buy a property, usually she would just go there and view it physically. It seems to this court quite amazing that it did not occur to either Madam Cheng or Tam that they should find out more about the Property before getting serious about buying it. Here, we are talking about a HK$70m duplex of over 4,000 sq ft, the most expensive residence Madam Cheng had bought up to that point, not a shoe box flat for a few million dollars.

85.  According to Lai, in his experience in promoting properties to potential buyers, if they were interested in a unit of the Development after inspection, they would obtain the Sales Brochures and/or Marketing Brochures at the Sales Office. According to him, the Plaintiff’s case that Madam Cheng had not obtained the Sales Brochure from the Sales Office or through the Defendant’s agents before signing the PSPA defies common sense. This court agrees.

86.  In the CA Judgment at [50], Lam VP (as he then was) observed that given the Plaintiff’s case on the importance placed by Madam Cheng on the Private Roof, it was likely that she and her family members would have checked the information contained in the Sales Brochure about the roof attached to the Property and questioned Stella Wong if she had indeed made the Representations. That is a cogent observation which this court would respectfully adopt.

87.  Fourth, Madam Cheng’s testimony about what happened at the 2nd Viewing is also problematic.

88.  To start with, during cross-examination, Madam Cheng was adamant Philip was not present at the 2nd Viewing.

89.  On the other hand, Philip’s testimony is that not only was he present right from the beginning, he is able to give details of inter alia his conversation with Madam Cheng while on the Block 1 Roof about her desire to hold BBQ parties and the subsequent enquiry about the price of the Property at the Sales Office. This was mentioned as early as Philip’s 1st witness statement dated 15 January 2016 (“Philip 1”) but was not contradicted by Madam Cheng in her supplemental witness statement dated 25 November 2021 (“Cheng 2”) where she specifically dealt with the 2nd Viewing.

90.  It is not in dispute that Philip was Stella Wong’s supervisor and that, prior to the present transaction, Madam Cheng had previously met Philip twice - when she told Stella Wong she wanted to buy a certain property, Philip would show up to negotiate the price for her with the vendor. It is also Madam Cheng’s testimony that on 16 August 2011, it was Philip who negotiated the price for her at the Sales Office. This is consistent with Philip’s and Stella Wong’s testimony that in the case of first hand properties, the usual practice of most developers was to engage in price negotiation only with estate agents who were district managers ie Philip’s grade or higher. Their testimony in this regard is corroborated by Lai in cross-examination who told this court he would only deal with fairly senior staff of estate agencies and not just any licenced agent.

91.  In Mr Choy SC’s brief cross-examination of Philip, he was fairly restrained and concentrated on what happened on 16 August 2011 rather than 15 August 2011. In Mr Choy SC’s Closing, his challenge to Philip’s testimony is that it does not make commercial sense for Philip, being a senior in the Defendant, to attend just another normal property viewing with Madam Cheng on 15 August 2011 when it would have been far more sensible and likely that he would leave the ground work to Stella Wong.

92.  Mr Yan SC, on the other hand, submits that it is inherently probable that Stella Wong would have asked Philip to attend the 2nd Viewing. The reason is that, in case Madam Cheng decided to purchase the Property immediately after the viewing, Philip could promptly start negotiating the price with the developer in the hope that a deal could be closed there and then. For a deal this big, and with a buyer so keen as to have a 2nd Viewing just a day after the 1st Viewing, this court can see why Stella Wong was anxious to close the deal sooner rather than later and for that purpose to ask Philip to go along. If Stella Wong did ask Philip to go along, it is difficult to see why Philip would decline if he was available.

93.  Further, given Madam Cheng’s failure to contradict Philip’s detailed evidence at to what happened on 15 August 2011 in Cheng 2, but only made a bare denial in cross-examination, this court is prepared to accept his evidence and find as a fact that Philip did attend the 2nd Viewing on 15 August 2011 and what he testifies as to what happened on that day.

94.  Next, Madam Cheng’s testimony is very different from the Plaintiff’s case as pleaded in the Plaintiff’s original Defence and Counterclaim dated 17 April 2012. Back in 2012, the Plaintiff’s case was that Madam Cheng’s brother asked which part of the roof belonged exclusively to Duplex B and “Madam Cheng, in the presence of everyone present, showed her brother the Roof Top Area Represented by Stella”. What was then pleaded was that Madam Cheng and her brother discussed her barbecue party plan in the presence of everyone and neither Stella Wong nor the others who were present corrected Madam Cheng. This glaring discrepancy was never explained.

95.  The above reasons are sufficient for this court to come to the conclusion that the testimony of Stella Wong, Wendy and Philip is truthful and should be accepted while that of Madam Cheng, Tam and Miranda should be rejected. But there is more. In the discussion of the subsequent events below, this court shall explain why various aspects of the Plaintiff’s case are also unsatisfactory which of course adversely impacts on the Plaintiff’s case overall.

96.  Taking a holistic approach to the evidence as a whole, this court finds as a fact that Stella Wong had not made the Representations at the 1st or 2nd Viewings as alleged. There is therefore no question of the Plaintiff relying on them in purchasing the Property. Given this court’s finding that Stella Wong had not made the Representations at the 1st or 2nd Viewings which were prior to the signing of the PSPA, it is wholly improbable that she would have made them subsequently.

97.  That is sufficient to dispose of this re-trial.

98.  For completeness, this court will deal briefly with some of the subsequent events.

Signing of the PSPA on 16 August 2011 and the 3rd Viewing on 20 August 2011

99.  While the parties differ on what happened on 16 August 2011 when the PSPA was signed at the Sales Office, there is no suggestion by Madam Cheng in Cheng 1 or Cheng 2 that the Representations were made on that day. It is also fair to say neither Mr Yan SC nor Mr Choy SC, advisedly in this court’s view, places any emphasis in their Closing on the event of 16 August 2011.

100.  As for the 3rd Viewing on 20 August 2011, the Plaintiff’s pleaded case is that Stella Wong negligently and/or recklessly reiterated the Representations to Madam Cheng’s mother, 2 sisters, a number of relatives and Passador. Save for Passador, none of the representees viz Madam Cheng’s mother, 2 sisters and relatives came forward to testify in support of the Plaintiff.

101.  It is true that Passador’s evidence at this re-trial, contradicted by Stella Wong’s, is that he had asked her about the location and size of the Private Roof and she had repeated the Representations. However, as Mr Yan SC points out, that was not how the Plaintiff had pleaded its case back in 2012 at para 8 of its original Defence and Counterclaim as follows:

“(v) A relative of Madam Cheng asked which part of the Roof Floor belonged exclusively to Duplex Flat 32/33B. In the presence of everyone present, Madam Cheng pointed out the Roof Top Area Represented by Stella.

(vi) Shortly thereafter, Mr. Passador asked Madam Cheng in English which part of the Roof Floor belonged exclusively to Duplex Flat 32/33B. In the presence of everyone present, Madam Cheng explained in English and pointed out the Roof Top Area Represented by Stella.

(vii) Neither Stella, nor the Other Staff of Centaline, nor the staffs of Henderson present corrected Madam Cheng by reference to the Sales Brochure, the DMC or the Approved Plans or information contained therein.” (emphasis added)

102.  This court has disbelieved Madam Cheng and found Stella Wong had not made the Representations at the 1st or 2nd Viewings. If so, there was clearly no reason why Stella Wong would suddenly see fit to make the Representations at the 3rd Viewing after the PSPA had already been signed. In addition, Passador testified that Stella Wong could only speak basic English and, for that reason as well as owing to the passage of time, his testimony as to the words used during the conversation he said he had with Stella Wong must be viewed with considerable caution. For these reasons, this court is not prepared to accept Passador’s evidence hence the Plaintiff’s case that the Representations had been repeated by Stella Wong at the 3rd Viewing.

WKLL meeting on 19 August 2011

103.  This is the next material event. What happened on this occasion not only assists this court in deciding whether the Representations had or had not been made previously, it is important also in relation to the issue of reliance ie whether the Plaintiff had relied upon the Representations in executing the SPA.

104.  The Plaintiff’s pleaded case is, on 19 August 2011, Stella Wong negligently and/or recklessly reiterated the Representations to Madam Cheng and in reliance on the Representations, she executed the SPA on its behalf.

105.  The first point to note is the Plaintiff’s pleaded case is not exactly supported by Madam Cheng’s own testimony. The relevant part of Cheng 1 is as follows:

“August 19, 2011 - The signing of the formal sale and purchase agreement

31. On August 19, 2011, Stella took Ivor, Miranda and me to the office of Woo Kwan Lee & Lo. It was Ms. Joey Lau who received us. Ms. Lau required Stella to leave at the beginning, but Stella ignored her. Ms. Lau then explained the agreement for us. But I wasn't sure whether she had gone through all clauses in it. She said that she was never on the site. When she said, ‘The pink areas highlighted is the flat roof that belongs to your unit. You need to look at this carefully’, I took a look at the floor plan.

32. The "schedule B" I present now is the copy of the floor plan attached to the agreement shown by Ms. Lau.

33. The flat roof was the pink area in the middle of schedule B as I saw it, which was the pink area of the bottom half of the roof plan. The area was square, and a "B" was on it. When I was looking at the floor plan, Stella said, ‘The flat roof is large enough for you’. Ms. Lau then said, ‘Don't exaggerate. Not all the areas are yours. Only the areas highlighted in pink belongs to your unit.’

34. I didn't notice that schedule B was made up by two plans, which were the upper half of the roof plan and the bottom half of the part plan of upper roof. Two areas were highlighted in pink on the roof plan, and one area was highlighted in pink on the part plan of upper roof. Yet Ms. Lau never explained these two plans or these three areas in pink to me. I only browsed the plans when she mentioned the flat roof.

35. It was after the plaintiff sued Mega Well that I knew that the pink areas on the upper half of the roof plan included the stairs to the flat roof in the unit on 33/F, the space where the stairs end, and the flat roof.

36. Stella mentioned that part of the flat roof was used to place air conditioning units and other things. During my two visits to the unit, Stella never talked about the location of that flat roof, let alone mentioning that I needed to go there by cat ladder. Although she never explained the issue to me, I had no problems with that since it was used to place air conditioning units.

37. I was a bit confused at that time. Stella (sitting diagonally opposite to me) took over the agreement in front of me suddenly and said after taking a look at it, ‘There were no mistakes. Just sign it’. The time it took for us to discuss the plans and the flat roof was about two to three minutes.” (emphasis added)

106.  In Mr Choy SC’s Closing at para 98, he submits the gist of Madam Cheng’s testimony is that when it came to the part of the plans annexed to the SPA ie the SPA Roof Plan, Madam Cheng was in doubt or confused when they were shown to her by Joey Lau. At this point, Stella Wong said the roof was big enough for her use. Upon hearing this from Stella Wong, Joey Lau told her not to exaggerate and reminded Madam Cheng that only those parts as coloured pink would “belong to” the Property. Later on, Stella Wong took away the SPA from Madam Cheng, looked at it and then told her that it was all right and asked her to sign.

107.  It can be seen from the above that what Stella Wong had allegedly said is not quite the same as the Representations that the Private Roof of the Property extended from the Glass Door to the 2 Pillars. The Block 1 Roof was of course big enough for Madam Cheng’s use and the representation that the roof was large enough for Madam Cheng’s use could mean in practice she would have the use of the Block 1 Roof even though most parts of it did not “belong to” the Property.

108.  The second point to note is that Joey Lau has filed a witness statement independently on behalf of WKLL back in 2016. Neither Mr Choy SC nor Mr Yan SC challenges the independence or the truthfulness of Joey Lau’s testimony. As the Court of Appeal found, Joey Lau’s testimony was corroborative of various aspects of Stella Wong’s evidence and contradicted parts of Madam Cheng’s: paras 69 to 72 of the CA Judgment.

109.  Stella Wong’s account of what happened on that occasion is materially different from Madam Cheng’s. The relevant part of Stella Wong 1 is as follows:

“19 August 2011 – Signing of formal agreement of sale and purchase

...

26. After arriving at WKLL Law Firm, a female staff of the firm arranged us to a meeting room. In the meeting room, the female staff, Madam Cheng, her husband, and her secretary sat on one side of the conference table while I sat on the other side. The female staff explained the contents of the formal agreement of sale and purchase to Madam Cheng, her husband, and her secretary. She also showed and explained the contents of the floor plans.

27. When the female staff explained the floor plan to Madam Cheng and her husband, Madam Cheng once discussed the floor plans with her husband. Madam Cheng then pointed at the air conditioning room area of the floor plans and asked me how to access there. I replied that she could access there by using the cat ladder. Madam Cheng then said that the rooftop was too small. I told Madam Cheng that there was a lot of space on the rooftop for her usage. The female staff immediately told Madam Cheng that she was only buying the pinkish area as shown on the floor plan. The other area did not belong to her. I then told Madam Cheng that although only the pinkish area of the rooftop belonged to the Property, no one would normally go up to the rooftop, therefore, she could in fact use the other area as well. The female staff repeated that Madam Cheng was only purchasing the pinkish area of the floor plan. The other parts did not belong to her.

28. I want to supplement here that, when I said at the law firm that no one would normally go up to the rooftop, it was because apart from the occupants of Property, Duplex Flat 32/33A, Block 1 and Duplex Flat 32/33B, Block 2 could use the internal staircase within the units to access the roof area, Block 1 and Block 2 also respectively have fire-escape stairs reaching up to the rooftop. However, when the fire-proof door of the fire-escape stairs was pushed open, the fire alarm connected to the fire-proof door would go off, therefore, basically no one would use the fire escape stairs to go up to the roof top.” (emphasis added)

110.  This court has carefully considered Joey Lau’s testimony and is satisfied that it is corroborative of material parts of Stella Wong’s evidence, in contradiction to Madam Cheng’s.

111.  First, Madam Cheng says Joey Lau had required Stella Wong to leave right at the beginning but Stella Wong ignored her. This was put to Joey Lau in cross-examination on Day 5 but she categorically denied. Indeed, at an earlier part of her cross-examination in the morning of Day 5, Joey Lau said, for first hand properties, she often saw estate agents accompanying their clients to her office when the sale and purchase agreements were explained to them. She also said she was not surprised that Stella Wong had accompanied Madam Cheng et al to WKLL.

112.  Next and more importantly, at paragraph 32 of Joey Lau’s witness statement (“Lau 1”), she said:

“32. When I heard Stella Wong mentioning that there was a roof of several thousand square feet available for use by Madam Cheng, I interrupted their discussion. I explained to Madam Cheng that she would only have exclusive use and possession of those parts of the roof which are coloured pink on the Roof Plan and Part Plan of Upper Roof; …When I later heard Stella Wong telling Madam Cheng that she could “practically” use other parts of the roof because nobody would go up to the roof, I repeated to Madam Cheng that she was only buying the interest in those parts of the roof that are coloured pink and she would not have exclusive use of any other parts which are not so coloured.” (emphasis added)

113.  In re-examination, Joey Lau confirmed that when Stella Wong mentioned several thousand sq ft of the roof, she understood Stella Wong to mean Madam Cheng could use that area on the roof, not that Madam Cheng had bought it. This is crucially consistent with Stella Wong’s testimony.

114.  In light of the aforesaid, and for all the reasons already explained before as to why this court does not accept the testimony of the Plaintiff’s witnesses, this court finds that Stella Wong had not repeated the Representations to Madam Cheng on 19 August 2011.

115.  The third point to note is that whatever Madam Cheng herself might or might not at first have properly understood what Stella Wong was saying at the WKLL Meeting, Joey Lau has definitely reminded her that only those parts as coloured pink were parts of the Property. Save for 1 part, Joey Lau’s statement is entirely correct. It can be seen that the pink areas in the roof plan annexed to the SPA and reproduced in Cheng 1 clearly did not include the Yellow Area - rather, it depicted inter alia only a narrow strip just outside the Stairwell.

116.  As explained earlier, what the SPA Roof Plan got it wrong is that a square in the middle of it wrongly shaded pink and marked “B” was actually part of Duplex C of Block 1 and not the Property. This is immaterial for the present purpose since there is no suggestion that Stella Wong had made any misrepresentation to that effect and indeed, that square part had nothing to do with the Yellow Area. In this regard, Mr Choy SC, very fairly and properly, indicated to this court on Day 1 that the Plaintiff is not relying on that erroneous part of the SPA Roof Plan for its claim against the Defendant.

Timely complaint or not

117.  The last aspect of this case that this court shall touch upon is the timing of Madam Cheng’s complaint about the Representations. In Mr Choy SC’s Closing at section E7., he refers this court to inter alia Madam Cheng’s evidence as to what happened on 3 December 2011 upon taking possession of the Property in support of the Plaintiff’s case that it has made a timely complaint. The relevant part of her evidence can be found in Cheng 1 as follows:

“December 3, 2011 - Took possession of the property

50. Ivor, Stella, and I went to Hill Paramount to take possession of the property the next morning. When we got to the Management Office of Hill Paramount, two staff members of HLD and two to three staff members of the Management Office accompanied us to the unit and explained how electrical appliances, water, electricity, gas worked, how to operate the keypad door lock of the gate and other things. Then we went to the flat roof together. I told the employees of the Management Office that I planned to build a glass ceiling on the private flat roof, so that my guests didn't need to go indoors for shelter in barbecue parties when it was raining. Then I said that I planned to install a closed-circuit television monitoring system on the flat roof in case someone got into my home through the glass door of the flat roof. The employers of HLD and the Management Office said, ‘The flat roof is not yours’. We had been arguing over this for one to two hours. Stella didn't say anything when we were arguing. She only said to me in a low voice afterwards, ‘You can barbecue secretly. Don't let others know’. I was so angry that I yelled at her, ‘What are you talking about? My unit includes the flat roof’. We questioned Stella that why did something go wrong with the flat roof. And she didn't reply.

51. Ms. Cherry Leung, an employee of HLD, told us that the flat roof didn't belong to the Property and that we could read the Sales Brochure. I indicated that no one had ever offered us the sales brochure. The employees of HLD and the Management Office emphasized, ‘If there is a barbecue, we would drive the people away each time we see it’.

…

53. We asked Cherry to check that whether the flat roof belongs to the Property. I emphasized to the employees of HLD repeatedly that I only bought the Property because I could host barbecue parities [sic] on the flat roof and that if the flat roof was not part of the Property, I would never buy it. I demanded to cancel the deal and took back HKD69.8 million.”

118.  Madam Cheng’s account as to what happened on that day is contradicted by the testimony of Stella Wong as well as the hearsay statement of Leung. Their evidence is that Madam Cheng only enquired about the use of the Block 1 Roof outside the Glass Door for BBQ to which the staff of the management office said no and Leung also showed her the relevant part of the Sales Brochure about the Private Roof. In this court’s view, the gist of their evidence is clear - Madam Cheng was talking about use rather than ownership of the roof area.

119.  Mr Yan SC also refers this court to Tam’s email to Stella Wong dated 7 December 2011. What is instructive is the content of the complaint raised in it. The email reads:

“We are very disappointed with the service provide on buying Hill Paramount Duplex as we were misled with the followings:

1)The usage of the roof area is exclusive to residents of top floor duplex, other residents may only use when there is emergency.

2)Furniture is allowed to put on the roof if they do not cause any obstruction.

3)BBQ is allowed on the roof and is exclusive to residents of the top floor duplex.

The above conditions are the reasons that we bought block 1, 32 B top floor duplex of Hill Paramount. However, when we collect the keys on 3rd of December, the management company mentioned the conditions are not true...”

120.  It seems to this court the email is supportive of the Defendant’s case all along that Stella Wong had only mentioned about the use of the Block 1 Roof, rather than ownership. Indeed, condition 2 in the email that furniture “is allowed to put on the roof if they do not cause any obstruction” strongly suggests that Tam knew he was talking about common area rather than an exclusive Private Roof for the owner of the Property. In response, Mr Choy SC submits that “the contents or wordings of ‘use’ or the usage concept are actually inter-related to the right to possession and ownership to laymen.”

121.  With respect, this court cannot agree. Any lay property owner knows he can use the common area of a property development but no one in his right mind would think he owns any part of it. This transaction is not the first property transaction entered into by Madam Cheng. It is unbelievable that she could not tell the difference between use and ownership. If she could, so could Tam when he wrote the email. Further, the email was meant to be a complaint against Stella Wong about the inaccuracy of the Representations made by her. Yet, nowhere in this email can one see any reference to the Representations that the Private Roof of the Property extended from the Glass Door to the 2 Pillars.

122.  Looking at the evidence as a whole, this court is not prepared to accept Madam Cheng’s testimony that she had complained about the lack of ownership of the Yellow Area on 3 December 2011. More probable than not, this court finds that the gist of her dissatisfaction was about what the management staff told her on that day ie she could not use the Block 1 Roof for BBQ parties.

123.  Be that as it may, whether or not Madam Cheng had made a complaint about ownership of the roof area on 3 December 2021 cannot outweigh the numerous factors outlined earlier in this Judgment which lead to this court’s finding of fact that the Defendant, whether through Stella Wong or others, had not made the alleged Representations to Madam Cheng and that there was no reliance by the Plaintiff on the alleged Representations in purchasing the Property.

Disposition and costs order nisi

124.  The Plaintiff’s claim is hereby dismissed.

125.  There shall be an Order nisi that costs of the retrial of this Action, including all costs reserved, if any, be to the Defendant, to be taxed if not agreed and paid by the Plaintiff forthwith, Certificate for 2 counsel.

126.  Lastly, this court wishes to thank the legal team on both sides for their detailed and helpful assistance.

Mr Edwin Choy SC, Mr Tommy Cheung and Ms Michelle Chan, instructed by Li, Kwok & Law, for the Plaintiff (by Counterclaim)

Mr John M Y Yan SC and Ms Shannon Leung, instructed by Cheung & Choy, for the Defendant (by Counterclaim)