HCA 1682/2017
HCA 2531/2017
(heard together)
[2024] HKCFI 2630
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 1682 OF 2017
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BETWEEN |
| | NG TUNG (伍銅) | Plaintiff |
| | and | |
| | GRAND WAYFAIR INVESTMENT COMPANY LTD. | Defendant |
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AND
ACTION NO 2531 OF 2017
_____________
BETWEEN |
| | NG TUNG (伍銅) | Plaintiff |
| | and | |
| | FULLAND INTERNATIONAL LIMITED | Defendant |
_____________
| Before: | Hon Mimmie Chan J in Chambers (Open to Public) |
| Date of Hearing: | 31 July 2024 |
| Date of Decision: | 7 October 2024 |
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D E C I S I O N
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Background
1. This is a rare and unhappy case, of a party seeking discharge from a settlement agreement made with his opponents in the course of trial, on the claim of his having acted under duress from his lawyers and of his having been deceived into accepting the terms of settlement.
2. Mr Ng is the plaintiff in two sets of proceedings, namely HCA 1682/2017 (“HCA 1682”) and HCA 2531/2017 (“HCA 2531”), in which he claims (in HCA 1682) to have acquired possessory title to portions of Lots 76 and 77 in DD 133 in the New Territories and (in HCA 2531) to portions of Lot 66 and Lot 95 in DD 133 (together “Claimed Portions”). Grand Wayfair Investment Company Limited (“GW”) is the registered owner of the relevant property named in HCA 1682, and Fulland International Limited (“FI”) is the registered owner of the relevant property named in HCA 2531. GW was also the registered owner of Lot 78 and had been named as defendant in an earlier action, HCA 558/2007 (“HCA 558”), which had been commenced by Mr Ng against GW. Mr Ng obtained the possessory title in Lot 78 in HCA 558, by a judgment of the Court dated 18 October 2013.
3. In HCA 1682 and HCA 2531, Mr Ng seeks declarations against GW and FI (“Defendants”) respectively that he has acquired good possessory title to the Claimed Portions of Lots 66, 95,76 and 77 and that the Defendants’ title in and to the said property has been extinguished by virtue of section 17 of the Limitation Ordinance. By Order of the Court made on 5 October 2023, the actions were directed to be heard together. The Defendants in both HCA 1682 and HCA 2531 were represented by the same Counsel and solicitors.
4. The trial of HCA 1682 and HCA 2531 commenced on 9 January 2024, having been set down for 9 days. In the afternoon of the second day of trial, the Court was informed that the parties had come to agreement in principle on terms for the disposal of the proceedings, and the hearing was adjourned, for the parties to work on a draft order.
5. On 11 January 2024, a Consent Summons was submitted to the Court by the legal representatives of the parties, and by consent, an order was made for all further proceedings to be stayed upon the terms set out in the Schedule to the Consent Summons (“Tomlin Order”). The Schedule was signed by Mr Ng and by each of the Defendants.
6. On 8 March 2024, the Defendants applied by their Summonses to enforce the settlement terms in the Schedule to the Tomlin Order (“Schedule”). In essence, the Schedule provides for Mr Ng to enter into a sale and purchase agreement to sell Lot 78 to GW at $4,045,120 within one month from the date of the Tomlin Order, to be completed within 6 months. Vacant possession of the Claimed Portions was to be delivered by Mr Ng to the Defendants within 14 days from the date of completion of the sale and purchase of Lot 78 (“Completion”), and the Defendants were to make an ex gratia payment to Mr Ng of a sum of $650,000 in respect of HCA 1682, and a sum of $2,053,520 in respect of HCA 2531. Upon delivery of vacant possession of the relevant Claimed Portions, Mr Ng was to provide a surrender agreement duly executed by Mr Ng as landlord and its tenant, to terminate a lease dated 7 January 2022 in respect of a part of the Claimed Portions.
7. The parties agreed by the Schedule to make joint application to the Court within 21 days from Completion for Mr Ng’s claims in HCA 1682 and HCA 2531 to be dismissed, and for the Defendants’ counterclaim to be withdrawn, and for Mr Ng to pay costs of $94,000 to each of the Defendants.
8. The ex gratia payments to be made to Mr Ng were apparently calculated on the basis of $80 per square foot, multiplied by the agreed size of each of the Claimed Portions and Lot 78.
9. It is not disputed that Mr Ng failed to comply with the terms of the Schedule. He refused to sign the sale and purchase agreement for Lot 78. According to Mr Ng’s evidence filed in these proceedings against enforcement of the terms of the Schedule, it is claimed that he had been intimidated and pressurized into accepting the settlement of the proceedings and had signed the Schedule under duress and undue influence. Mr Ng claims that the price reflected in the Schedule for the disposal of his interests in Lot 78 and the Claimed Portions was undervalued, and that he had been/would be deprived of the compensation that Government would pay for the Lots in question. Mr Ng accordingly claims that he suffers hardship under the terms of settlement reflected in the Schedule, and should not be bound thereby.
10. The evidence filed by Mr Ng in opposition to the Defendants’ Summonses for enforcement (“Summonses”) was prepared by lawyers which were different to those who had represented Mr Ng at the trial in January 2024. By the time of the hearing of the Summonses, Mr Ng was acting in person.
11. Having considered Mr Ng’s evidence, I regret that he has not established any case of either duress or undue influence which can vitiate his consent to the terms he had agreed with the Defendants, for the settlement of the claims he made in these proceedings.
12. It is pertinent that the claims made by Mr Ng are not directed at any duress, pressure or undue influence allegedly exerted on him by the Defendants, or anyone acting for the Defendants, but by Mr Ng’s own lawyers. Nor is there any assertion that the Defendants had any knowledge of any duress, pressure or undue influence which had allegedly been exerted by Mr Ng’s lawyers. Even if all the claims made by Mr Ng are to be accepted, there is no ground for him to assert that the Defendants should not be allowed to enforce the terms of agreement which are reflected in the Schedule and signed by Mr Ng and the Defendants.
The facts asserted by Mr Ng
13. According to Mr Ng, he suffers from a heart condition. The first matter sought to be relied upon by Mr Ng to oppose enforcement was the condition in which he was called to testify in the afternoon of the first day of trial.
14. Mr Ng claims that he was in court on 9 January 2024, and had been asked to wait in the conference room before giving evidence. In the afternoon, he was resting and sleeping in the conference room, when he was “suddenly” asked to give evidence. Mr Ng claims that when he was awakened, he suffered from chest pains and had to take medication for relief.
15. Mr Ng was cross-examined in the afternoon of 9 January 2024 as to whether his parents had immigrated to Canada in 1988, or in 1993, and on the evidence which he had given in the earlier proceedings of HCA 558. He claimed that when Counsel for the Defendants put to him in the course of cross-examination that he had been lying in his evidence, he was not able to respond because of his heart condition.
16. Mr Ng’s cross-examination resumed in the morning of the second day of trial, on 10 January 2024. He pointed out that during the morning break, he was not allowed to talk to other people before his testimony had been completed, but during the break, he saw his solicitor conversing with Counsel for the Defendants, “talking like friends”, and that they went into a conference room to continue their conversation. Mr Ng’s cross-examination resumed in the morning after the break, and he claimed that he was confused in the answers he gave.
17. According to Mr Ng, his Counsel sought an adjournment of the hearing in the afternoon of 10 January 2024, so that a discussion could be held with him. Mr Ng was informed by his Counsel that his chance of succeeding in these proceedings was “zero”, and that if he should fail in the proceedings, he would have to pay more than $2 million as costs to the Defendants. Mr Ng’s Counsel informed him that the Defendants were willing to negotiate, and asked if he was willing to settle. According to Mr Ng, his Counsel and solicitor (“Victor”) then “threatened” him and said that he would have to bear criminal responsibility for perjury in court if the Defendants should take action against him, and further, that the Defendants’ lawyers had told Mr Ng’s lawyers that the Defendants would use the discrepancies in Mr Ng’s evidence to overturn the Court’s judgment in HCA 558, to regain the possession and ownership of Lot 78. Mr Ng claims that he was frightened and unduly influenced as a result, laboring under the belief that not only would he fail in his claims in these proceedings, but he would be liable for perjury and would lose his interests in Lot 78 as well.
18. According to Mr Ng, he had first indicated to his Counsel that he would only consider settlement with the Defendants if the price was right, and had pointed out that the price offered by the Government for land resumption was $1,425 per square foot. Mr Ng indicated a figure of $800 per square foot as the price he would consider. However, Victor told him, after consulting a friend, that the price for government resumption was in the region of $200 to $900 per square foot. Mr Ng claims that his Counsel then approached the Defendants, and later returned with the reply that the Defendants’ offer was $80 per square foot. According to Mr Ng, he refused this offer.
19. Mr Ng’s evidence is that his Counsel then asked him to return to the conference room, and in the presence of his daughter, Victor, and 2 other individuals, his Counsel tried to persuade him to accept the Defendants’ offer, but he refused. Mr Ng’s Counsel then asked Mr Ng’s daughter to talk to him alone. According to Mr Ng, his daughter was very frightened, and she asked him to accept the Defendants’ offer, for fear that he would have to go to jail. Mr Ng claims that his chest pain was aggravated and he agreed to the settlement in a state of fright. According to Mr Ng, his lawyers were all very happy when he expressed his agreement to settle, which he found disturbing.
20. Mr Ng did not resume his testimony on 10 January 2024.
21. According to Mr Ng, he did not discuss the case with anyone again that day, but he reflected on it all night.
22. In the morning of 11 January 2024, Mr Ng texted his Counsel to say that apart from Lot 78, the rest of the lots could be sold. He then received a message from his solicitor, asking him and his wife to attend at the solicitor’s office at noon. Mr Ng’s daughter was there at the meeting. According to Mr Ng, his whole family was very frightened, and they asked him to accept the Defendants’ offer. Mr Ng claims that “under the pressure of many people”, and out of the trust he had reposed in Victor, he had no alternative but to sign and accept the documents which Victor prepared.
23. Mr Ng explained that in the conference room of his solicitors, his daughter and he had reviewed the settlement agreements which had been prepared by the Defendants’ lawyers. The gist of the settlement agreements were translated to him. At a later stage, Mr Ng’s daughter also explained the Tomlin Order to him in Chinese, and Mr Ng then realized then that he had to deliver vacant possession of the Claimed Portions to the Defendants. He claimed that he refused to sign the sale and purchase agreement because he had explained to Victor that the lots in question should be delivered “as is”, but vacant possession was required.
24. Mr Ng further explained that under his agreement with his tenant, any compensation received from the Government as a result of land resumption, as compensation for young crops, cottages and facilities built on the lots, would be shared equally between the tenant and himself. He claims that the government compensation for young crops, cottages and facilities is valued at approximately $6,952,169, but the aggregate settlement sum under the Schedule is not even enough to offset the loss of government compensation for young crops and facilities, and if the lots were under land resumption in 2027, the benefits would go to the new owner.
25. In his affirmation, Mr Ng further claims that at the time of the signing of the Schedule, he had not anticipated the fact of Government resumption of the Lots, including Lot 78, in 2027, nor of the difficulties to be encountered in complying with the Schedule. He pointed out that at the time of the Tomlin Order, Victor had informed him that he had deliberately avoided mention of Government compensation for young crops, facilities and cottages.
26. Consequently, it is Mr Ng’s case that the settlement reflected in the Schedule was unconscionable, which he had signed at a time when he was physically unwell and had been pressurized and unduly influenced to decide on the terms of settlement. He claims that he had been misled as to the settlement sum. He highlighted the money he had spent as legal fees, and the fact that the price for the Claimed Portions was undervalued, when compared with the land resumption compensation rate of $1,267 per square foot announced by the Lands Department. He claims that if he had not agreed to the Schedule and the Tomlin Order, he would have been entitled to approximately $7 million compensation from the Government in respect of the young crops, cottages and facilities on the relevant Lots.
Applicable legal principles
27. On behalf of the Defendants, Mr Chan of Counsel highlighted the observations on undue influence as made by Recorder Ma (as he then was) in Bank of China (Hong Kong) Ltd v Wong King Sing & ors [2002] 1 HKLRD 358, at para 34 of the judgment:
“I should preface the discussion of this defence with the observation that, as with all aspects of the law, one has to apply a large degree of common sense to the matter. The proliferation of cases in this area, particularly in recent times, creates a tendency to have principles mechanically set out as almost formulas to be applied. While this is convenient and provides a logical basis for the application of, at times, not uncomplicated principles, it is to be borne in mind that the defence of undue influence is ultimately a simple concept. It has all to do with informed consent. Once a court forms the view that consent was freely given with full knowledge of the consequences of entering into the relevant transaction, that is the end of the matter, however improvident the transaction may objectively appear. The rationale for the defence of undue influence is to prevent the victimization of the complainant. It is therefore to protect people from being forced, tricked or misled in any way by others into entering into a disadvantageous transaction: see Allcard v Skinner (1887) LR 36 Ch D 145 at pp 182-183; National Westminster Bank Plc v Morgan [1985] AC 686 at p 705. As Lord Nicholls of Birkenhead said in Royal Bank of Scotland Plc v Eltridge (No 2) [2001] 3 WLR 1021 at p 1029 para 8, the unacceptable conduct lies in ‘a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage.” (Emphasis added)
28. In Dao Heng Bank Ltd v Ho Yin Yuk & anor [2003] 1 HKLRD 28, the Court adopted for undue influence the classification used in Barclays Bank Plc v O’Brien [1994] 1 AC 180, being: actual undue influence, presumed undue influence of a relationship recognized by law (such as a solicitor and client relationship), and presumed undue influence of a relationship of trust and confidence.
29. Dao Heng Bank Ltd v Ho Yin Yuk concerned a transaction to which a third-party other than the wrongdoer and the victim was involved, and at paragraph 70 of the judgment, the Court considered the circumstances in which such a third party might to be affected if there was undue influence established between the wrongdoer and the victim. Extracting the principles from the authorities, the Court explained (at para 70(1):
“If the bank had actual knowledge of the undue influence exercised by the wrongdoer on the victim in relation to the transaction in question, then ordinary principles of equity would dictate that the bank is affected by the wrongdoing: see Royal Bank of Scotland v Eldridge (No 2) 3 WLR 1021 at p 1036E-G (para 40). Likewise, the bank’s imputed knowledge will suffice to affect the bank in accordance with ordinary principles of equity. Therefore, knowledge of the bank’s solicitors acquired from the very transaction in question would be imputed to the bank and regarded as the bank’s own knowledge: see Snell’s Equity (13th ed) para 4-27. Similarly, knowledge of the bank’s agent will do. And if the wrongdoer can be regarded as the bank’s agent in the transaction, the bank will be affected: see Barclays Bank Plc v O’Brien [1994] 1 AC 180 at p 195E-G.” (Emphases added)
30. The Court dealt with constructive notice at paragraph 70(4) of the judgment in Dao Heng Bank, explaining that constructive notice of undue influence was sufficient to affect the third party bank, and that the bank should be fixed with constructive notice of all that a reasonably prudent bank would have discovered, and if those discoveries (if made) would have been sufficient to inform the bank that there was undue influence present in the transaction. Reference was made to the judgment of Lord Browne-Wilkinson in Barclays Bank Plc v O’Brien, where he stated that there would be exceptional cases where a creditor/third party has knowledge of facts which render the presence of undue influence “not only possible but probable”.
31. Finally, on the question of economic duress, Counsel for the Defendants highlighted the fact that the key elements of the doctrine are the existence of pressure, and the illegitimacy of the pressure. Counsel relies on the judgment of G Lam J (as His Lordship then was) in Zebra Industries (Orogenesis Nova) Ltd v Wah Tong Paper Products Group Ltd HCMP 436/2013, 31 August 2015, where reference was made to the guidance given in DSDN Subsea Ltd v Petroleum Geo-services ASA [2000] BLR 530:
“… In determining whether there has been illegitimate pressure, the court takes into account a range of factors. These include whether there has been an actual or threatened breach of contract; whether the person allegedly exerting the pressure has acted in good or bad faith; whether the victim had any realistic practical alternative but to submit to the pressure; whether the victim protested at the time; and whether he affirmed and sought to rely on the contract. These are all relevant factors. Illegitimate pressure must be distinguished from the rough and tumble of the pressures of normal commercial bargaining.”
32. Reference may also be made to the principles of undue duress as explained by the Court in Esquire (Electronics) Limited v The Hong Kong and Shanghai Banking Corporation Limited [2007] 3 HKLRD 439:
“The key to proving economic duress is proof of the illegitimacy of the suggested pressure. Much commercial activity necessarily involves pressure, often considerable and sometimes overwhelming, exercised by parties who find themselves in powerful bargaining positions. But that of itself is not illegitimate. It was suggested by McHugh JA, as he then was, in Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40, 46 that:
‘Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, would not necessarily constitute economic duress.’
155. The reference there to ‘unconscionable conduct’ itself needs explanation. It has been explained in the Australian courts by reference to a special disadvantage suffered by the weaker party of which the stronger party takes advantage and is discussed in Australia & New Zealand Banking Group v Karam and Others (2005) 64 NSWLR 149 at paragraphs [46] and [66]. In Commercial Bank of Australia Ltd v Amadio [1982-1983] 151 CLR 447, 462 Mason J, as he then was, explained the significance of the adjective ‘special’ in the phrase ‘special disadvantage’:
‘I qualify the word ‘disadvantage’ by the adjective ‘special’ in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasise that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.’
(Emphasis added)”
33. Economic duress in the context of a settlement agreement was in fact considered by the Court in Zebra Industries, and G Lam J made the following observation, at paragraph 86 of the judgment:
“…. It seems to me, however, that two matters have to be borne in mind when examining a plea of economic duress raised to impugn a settlement agreement. First, a settlement agreement, or a compromise, is by definition an agreement reached between parties who are in dispute. They are opponents rather than collaborators, engaged in adversarial positions. Typically they are, or are about to be, involved in litigation or arbitration. Each side usually threatens to pursue its professed rights in court or in arbitration, in the absence of settlement, in the hope that the other side will succumb to its demands. Their negotiations may sometimes involve bringing ruthless pressure to bear on each other. The risk of the adjudicator agreeing with the other side, the time and cost of the exercise, and the sheer uncertainty inherent in the process are often reason enough to lead parties to settle. Illegitimate pressure in the context of economic duress, if so broadly defined as to encompass the ordinary burdens of litigation, may unravel many a genuine compromise based on perfectly acceptable commercial considerations. Secondly, and in the same vein, the courts have an interest in upholding agreements to compromise disputes. As Butler-Sloss LJ said in Colchester Borough Council v Smith [1992] Ch 421, 435:
‘Where parties to a dispute reach a compromise which brings that dispute to an end and avoids the need for litigation or further litigation, such a compromise is a valuable part of the resolution of disputes within the machinery of the administration of justice. The compromise has to be genuine, entered into freely by all parties to it without concealment of essential information or undue advantage taken by one party of another party, and preferably with the assistance of lawyers. Consequently, an agreement to compromise an action or a dispute which may lead to litigation is binding and is enforceable against the party seeking subsequently to repudiate it. As Roskill LJ said in Binder v Alachouzos [1972] 2 QB 151, 160, “Any other course would cause very great difficulty in the administration of justice.”’ ” (Emphases added)
34. As for the application to enforce the Schedule of the Tomlin Order, the principles are clear. The Schedule constitutes a separate and binding contract of settlement between the parties. To oppose an application for enforcement, the burden is on the respondent to show an arguable objection, and the standard of proof is to show a triable issue, or an arguable point (The IO of Hoi To Court v Chinluck Properties Limited HCA 6171/1997, 24 August 2006). If the respondent fails to raise any arguable objection, the relief to enforce the terms set out in the Schedule may be granted directly (The IO of Tai Wai Glamour Garden v WYP Hong Kong Limited[2023] HKLdT 21).
No undue influence or duress asserted against the Defendants
35. As pointed out in the preceding paragraphs, Mr Ng’s claims of pressure, duress and undue influence are made not against the Defendants, but against his own lawyers. This Court has not heard evidence from Mr Ng’s former lawyers, and no findings are made in any way against them. What is pertinent is that Mr Ng has not even alleged that the Defendants have actual, imputed, or constructive knowledge of any undue influence or illegitimate pressure having been exerted against Mr Ng by his own lawyers, and on the facts, there is nothing to suggest to this Court that the Defendants knew, or could or should have known of any facts, which may put them on enquiry as to whether Mr Ng had given his true consent to the terms of settlement, when he signed the Schedule. In circumstances when parties are adversaries in litigation, each can only leave it to the other side to seek and obtain advice from its own lawyers, and each would be entitled to assume that the terms of any settlement had been explained to and are understood and consented to by the other side, without any cause for concern as to whether such consent had been improperly obtained.
36. Short of any actual, imputed or constructive knowledge of any undue influence, or illegitimate pressure or duress having been exerted on Mr Ng, there is no basis for this Court to find that the settlement terms set out in the Schedule should not bind either Mr Ng or the Defendants.
37. On the facts as asserted by Mr Ng, the terms of the Tomlin Order and the Schedule had been explained to him. He knew what the offer made by the Defendants comprised, in terms of his sale of his interests in Lot 78 and the Claimed Portions at the price of $80 per square foot, the final figure which had evolved from his own initial offer of $800 per square foot. According to the Defendants, the rounds of negotiations on the price had lasted for more than an hour, and it should be clear that notwithstanding any claim Mr Ng made as to his heart condition, he had had sufficient time to consider and respond to each offer and counter‑offer made, before the final price of $80 per square foot and costs of $188,000 were finally agreed.
38. It is Mr Ng’s own evidence that he had “not anticipated” or foreseen the difficulties involved in the eviction of the tenant, and his over 40 years of labour to set up and build on the lots. The question of the possible (but yet unclear) Government resumption, and the compensation which may be payable, are only matters of after-thought, as a result of Mr Ng’s reflection after the terms of settlement had been agreed and the Schedule signed, and it was only after the event that Mr Ng came to consider that the terms he had agreed with the Defendants were improvident and, commercially, a bad bargain. However, it is trite that so long as a party has given his free and informed consent to a bargain - as I am satisfied that Mr Ng has done in this case - that is the end of the matter (Bank of China (Hong Kong) v Wong King Sing [2002] 1 HKLRD 358). No matter how unwise the transaction may objectively appear after the event, it is not for the Court to rewrite the terms of the agreement for the parties, who must be bound by the result of their own choice.
39. As Counsel for the Defendants submitted, the evidence of Mr Ng’s daughter supports the fact that Mr Ng had considered, and finally agreed, to the settlement deal. She claims in her affirmation that “after consideration, (her) father agreed to a settlement deal of $80 per square foot”.
40. Mr Chan further pointed out that on the facts, even if any form of duress or undue influence had been exerted on Mr Ng on 10 January 2024, as he alleged, he had had the opportunity to retract from the terms of settlement on at least 2 occasions, but he did not. It is pertinent that as Mr Ng acknowledged, the adjournment was sought and obtained in the afternoon of 10 January 2024. The price of $80 per square foot was offered in the same afternoon, and on Mr Ng’s evidence, he had initially turned it down. On his evidence, he informed his lawyers in the morning of 11 January 2024 that the Claimed Portions, apart from Lot 78, could be sold, and he had attended at his lawyers’ office in the afternoon of 11 January 2024, to review the settlement agreement prepared by the Defendants, before signing it in the same afternoon.
41. Hence, not only did Mr Ng have the time to reflect on the terms of settlement before signing the Schedule on 11 January 2024, but he had the opportunity, after the alleged duress and pressure exerted on him on 10 January 2024, to simply refuse to attend at the office of his lawyers the next day, on 11 January 2024, and he could have refused to sign the Schedule at all on 11 January 2024. If it was a case of his will having been succumbed by the pressure exerted by his lawyers outside the courtroom on 10 January 2024, or as a result of his heart condition, Mr Ng could still have refused to sign the Schedule after careful consideration of the matter in the evening of 10 January and in the morning of 11 January 2024, and when he could exercise his free and independent mind. He did not choose to do so, which only supports the Defendants’ case that the Schedule and the terms of settlement had been freely accepted by Mr Ng without intimidation, pressure, or threat.
Unconscionability?
42. The fact that Mr Ng may have made a bad bargain is not sufficient for the Court to exercise any discretion it may have to permit the rescission of the settlement agreement or to relieve him from the alleged hardship of a thoughtless decision. In addition to Bank of China (Hong Kong) Ltd v Wong King Sing, the Defendants also rely on Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514, where Lord Hoffman made the following observation:
“The principle that equity will restrain the enforcement of legal rights when it would be unconscionable to insist upon them has an attractive breadth. But the reasons why the courts have rejected such generalizations are founded not merely upon authority (see per Lord Radcliff in Campbell Discount Co Ltd v Bridge [1962] AC 600, 626) but also upon practical considerations of business. These are, in summary, that in many forms of transaction it is of great importance that if something happens for which the contract has made express provision, the parties should know with certainty that the terms of the contract will be enforced. The existence of an undefined discretion to refuse to enforce the contract on the ground that this would be ‘unconscionable’ is sufficient to create uncertainty. Even if it is most unlikely that a discretion to grant relief will be exercised, its mere existence enables litigation to be employed as a negotiating tactic. The realities of commercial life are that this may cause injustice which cannot be fully compensated by the ultimate decision in the case.”
43. I accept the Defendants’ submissions that as no vitiating factors can be proved which can justify the setting aside of the settlement agreement, the mere existence of any hardship on Mr Ng is not a matter to which the Court should give weight. The Court cannot rewrite or create a new contract for the parties, when it is clear that they have consented to an agreement which is clear in its terms. I also agree with Mr Chan, that the assertions of hardship are not substantiated by any concrete evidence, as the claim of the government compensation which may be paid, up to $6.9 million, is a matter of Mr Ng’s mere speculation and surmise. There is no evidence that the subject lots are to be resumed, and the valuation relied upon by Mr Ng is silent on the basis of the valuation, how the unit rates were derived, and no comparables have been referred to.
Disposition
44. Having considered the matter in the round, I accede to the Defendants’ application, and make orders in terms of the Summonses, save that the date for completion specified in paragraph 1(a)(ii) shall be 28 days from the date of the handing down of the Decision. Costs allowed include any costs reserved.
| | (Mimmie Chan)
Judge of the Court of First Instance
High Court |
The plaintiff (in both actions) appeared in person
Mr Kenneth CL Chan and Mr Ross MY Yuen,
instructed by Hastings & Co, for the defendant (in both actions)