BANK OF CHINA (HONG KONG) LIMITED v. CHOI LAI LAR HCMP 3925/2002

S’s words:-

I was not a party or any legal representatives in the action. Mr. Ng for the Bank did quite a good job in the application hereinbelow mentioned. The legal principles regarding the rules of maintenance and champerty and also contingency fee agreement have been considered. The Bank was not required to pay for the costs when the Wife did have legal representatives due to the so-called contingency fee agreement between the Bank and her former solicitors.

However, if the Wife was not asked to act for herself shortly before the trial, I would have some hesitations as to whether the Bank could establish a prima facie case of any breach of the indemnity principle.

Thus, with very much reluctance, I have to agree with the learned Master for his comment that “I can appreciate the lenience of Mr. Sun, but such fee agreement is not allowed under our costs system.”

--- quote from judgment ---

Date of Decision : 7 November 2007

The paying party (“the Bank”) raised a preliminary issue in a taxation. It argued that the costs arrangement between the receiving party (“the Wife”) and her solicitor was:

(a) against the rule of maintenance and champerty,
(b) a contingency fee agreement, and/or
(c) in breach of the indemnity principle.

So, in summary, C&A would charge the Wife on time basis, subject to discretionary discount. Due to the financial position of the Wife, C&A agreed that she did not have to pay the interim bill right away. Further, it was to be reviewed later. No further bill was issued. The question would be further discussed after settlement or determination of the Wife’s case at trial.

Applying the above costs arrangement to the complaints made by Mr. Ng. I do not find it contrary to the rule of maintenance and champerty. However, it is contingent. Further, I am not satisfied that the indemnity principle has not been breached in the circumstances.

Maintenance and Champerty?

The law of maintenance and champerty has been recently and thoroughly considered by the Court of Final Appeal in Siegfried Adalbert Unruh v Hasn-Joerg Seeberger (unrep., FACV Nos. 9 and 10 of 2006, [2007] HKEC 268)). Four points were stated to highlight the current approach of this principle.

(a) An agreement to share the spoils of litigation encourages the perversion of justice. Gambling the outcome of the litigation endangers the integrity of judicial process. These traditional legal policies underlying maintenance and champerty continue to apply.
(b) However, one has to examine the totality of the facts to see if the ends of justice is or is not undermined.
(c) In so doing, modern public policies should be taken into account, including ensuring the poor to give fair access to justice.
(d) The law of maintenance and champerty should not be relied too readily to strike down arrangements attempting to achieve justice. Other public policies may be relied upon instead, like unconscionable contract and contingent fee agreement.

In my view, under the present costs arrangement, C&A was not funding the Wife’s litigation. Mr. Sun was not trying to share in the spoils of litigation to the exploitation of the vulnerable Wife. Indeed, he did all he possibly could in the circumstances for the Wife. Only when he could not taken up the personal risk of liability to pay counsel fees, he then quitted. There is no risk to the integrity of the court’s process. Quite to the contrary, Mr. Sun tried to help to Wife to obtain justice.

Contingent fee agreement?

Contingency fee agreement is not allowed under our system. Wallersteiner v Moir (No. 2) [1975] QB 372, 402 was referred to by the said case of Siegfried Adalbert Unruh at paragraph 104.

“ Under a contingency fee agreement the remuneration payable by the client to his lawyer in the event of his success must be higher than it would be if the lawyer were entitled to be remunerated, win or lose: the contingency fee must contain an element of compensation for the risk of having done the work for nothing. It would, it seems to me, be unfair to the opponent of a contingency fee litigant if he were at risk of being ordered to pay higher costs to his opponent in the event of the latter’s success in the action than would be the case if there were no contingency fee agreement. On the other hand, if the contingency fee litigant were to lose the action, his opponent’s right to recover costs against him should not in fairness be affected by the fact that the former party has a contingency fee agreement. Consequently under our system of what are sometimes called indemnity costs a contingency fee litigant would in the event of success have to bear a heavier burden of fees, irrecoverable from his opponent, than he would otherwise do, while remaining exposed to the risk of being ordered to pay his opponent’s taxed costs in the event of his failure. The arguments in favour of a contingency fee system are accordingly a good deal less cogent here than they are in the United States of America.”

I can appreciate the lenience of Mr. Sun, but such fee agreement is not allowed under our costs system.

Indemnity Principle?

Indemnity principle in the context of taxation requires that the receiving party cannot recover a sum in excess of his liability to his own solicitors. Then, what exactly is the liability of the Wife towards C&A? A definite answer is unavailable because it is “variable” depending on the trial result. Will the answer of “the amount of costs I recover from the other side will be the costs charged by me” help Mr. Sun? I do not think so because such arrangement has been held by Mr. Registrar Chan under Holiday Resorts (Management) Co. Ltd v Chan Yuk Yan & another, judgment dated 2 May 2001, as “so vague and uncertain” that the liability of the client towards his client was not known. I agree with such observation.

顧明 v. 南方大廈業主立案法團HCSA11/2007

S’s words:-

We have so many cases relating to water leakage, whether regarding outer walls or ceilings.

We do not know how many cases were ruled with the same wrong concept of an adjudicator in Small Claims Tribunal, of which now The Honourable Mr. Justice Jam clarified that how a plaintiff could establish his claim against the Incorporated Owners for damages in outer walls.

In this particular case, the subject outer wall do form a part of the common area and if the water leakage related to the poor condition of the outer walls, even though without a re-trial, a different conclusion from another adjudicator in Small Claims Tribunal could be expected after the actual re-trial to be taken place.

Unfortunately, what in my mind again is, why should we recommend the owners to form an Incorporated Owners for their own buildings?

--- quote from judgment ---

宣判日期 ： 2007年8月28日

上訴人顧明先生是小額錢債審裁處案件中的申索人。他是南方大廈7 字樓A 座的業主，因大廈外牆滲水影響他的居所，所以對南方大廈業主立案法團提起訴訟。他訴稱外牆滲水使他家中的牆壁受到損毀，以致須花41,000 元來維修；此外，他又申索9,000 元以補償他精神上的損失。換言之，他合共申索 50,000 元，然而，他的申索被小額錢債審裁處的審裁官撤銷，申索人因而提出上訴。

本席認為，審裁官的判決在法律觀點上犯了錯誤。審裁官在判決理由書第14 段中指出，申索人在法律上有舉證責任，須向法庭提出有關證據，根據相對可能性的衡量的準則，證明被告人疏忽造成外牆滲水，導致他的樓宇單位內的房間的窗邊牆身滲水，因而蒙受損失。審裁官接着談到上述兩封信，指出信中只是說「可能和懷疑外牆滲水」。在本案中，雙方就外牆滲水的原因有爭議，被告人指滲水的問題是因為申索人加建了一只窗而導致，申索人則辯稱外牆本身損毀，從外面也可以看到，而食環署的信亦指出外牆的防水層可能損毀。

審裁官在判案理由書第18 段中又指出，即使外牆的防水層損毀，申索人在法律上仍須舉證證明防水層損毀的原因，被告人怎樣疏忽，以及防水層損毀為何與他或前業主曾更改鋁窗一事無關。最後，審裁官基於申索人的樓宇單位內只是出現天花板滲水的情況，以及申索人沒有提出相關的證據，裁定申索人未能根據相對可能性的衡量的準則，證明防水層損毀和外牆滲水是因被告人疏忽所致。他最後在第20 段中重申：「基於以上理由，本席裁定申索人未能履行他的責任，根據相對可能性的衡量的準則，證明外牆滲水的真正原因是由於被告人疏忽。」因此，審裁官撤銷顧先生的申索。

本席認為，根據香港法例，申索人毋須證明滲水的問題是因業主立案法團疏忽而導致。首先，南方大廈的公契是於1964 年簽署的，這份公契屬於較舊的一種，並沒直接提到大廈外牆誰屬的問題，只是說明每一個樓宇單位都由單位的業主全權擁有，以及業主有責任保持單位內的良好狀況。《建築物管理條例》(香港法例第 344 章)第 2 條清楚說明公用部分(common part)是甚麼：「A. 建築物的全部，但不包括在土地註冊處註冊的文書所指明或者指定專供某一業主使用、佔用或享用的部分；及B. 附表1指明的部份，但上述文書如此指明或指定的部分除外。」附表1 清楚指明外牆屬公用部分的一部分。

接着下來要處理的問題是：立案法團對公用部分須負那些責任？答案於第18 條已清楚說明：

「 第18 條 法團的職責及權力
(1) 法團須——
(a) 使公用部分和法團財產維持良好、合用的狀況，並保持清潔。」

故此根據法例，法團有責任使公用部分(包括外牆)維持良好合用的狀況，並保持清潔。因此，顧先生只需證明外牆滲水，而他亦已通知法團有關的情況，便已完成舉證責任，因為外牆滲水已證明法團沒有使該部分維持良好合用的狀況。但審裁官裁斷申索人須證明因法團疏忽而導致滲水的情況，已犯了法律上的錯誤。當然，顧先生在舉證時，只須證明外牆損毀而導致他的睡房出現滲水情況，因為這是他的申索所指明的部分。被告人的代表李先生提到一些其他事情，如滲水情況是因窗戶打開而導致，但涉及的是樓宇單位內的其他部分，與本申索部份無關。

基於審裁官所犯的法律觀點上的錯誤，本席裁定申索人的上訴得直，案件須發還小額錢債審裁處重審，由另一位審裁官就以下的爭議點作出裁斷：顧先生的單位內的滲水問題是否由於大廈外牆損毀而導致？如果結論是滲水確由外牆損毀所導致而法團又已知悉上述情況的話，則法團便有責任進行維修，以維持大廈良好、合用的狀況。

WONG MAN TAT v. CHAN YUEN MAN AND OTHERS DCCJ2853/2005

S’s words:-
It is rare that we can find case authorities that leave to appeal was granted by District Court.

The following case is one of them of which the Judge agreed that part of his findings came from inference and the Court of Appeal is entitled to draw a different inference.

However, it does not imply that every losing party could suggest the Judge form his conclusion by way of inference; otherwise, the Judge would be a rubber stamp in leave to appeal applications..

I believe this case will be an interesting case in the Court of Appeal in the future. In other daily life, we have received too much enquires in relation to water seepage allegations.

--- quote from judgment ---

Date of Handing Down Decision : 27th September 2007

DCCJ 2853/2005 was a claim by the owner of Flat 1802 (“1802”) of Block C, Westlands Gardens, No. 4 Westlands Road, Quarry Bay, Hong Kong (“the Building”) and against the ownersof Flat 1801 (“1801”) of the Building, due to water seepage from the Defendant’s master bathroom into the Plaintiff’s master bathroom.

The Plaintiff applied to this Court for an injunction restraining the Defendants from repeating or continuing the nuisance of water seepage from the shower stall and floor drain of the master bathroom in 1801 to 1802; an order that the Defendants to rectify the same; and damages for: (1) diminution in value of the premises to be assessed; (2) discomfort and inconvenience and disturbance; (3) surveyor fee of HK$20,000.00 and; (4) plumber charges of HK$15,000.00.

The Defendants counterclaimed against the Plaintiff for: (1) discomfort and inconvenience and disturbance to be assessed; (2) surveyor fee of HK$10,000.00; and (3) plumber charges of HK$8,500.00.

After trial, I granted the Plaintiff’s application for injunction, ordered the Defendants to rectify the water seepage, ordered the Defendants to pay the Plaintiff plumber charges of HK$15,000.00 and ordered the Plaintiff’s claim for diminution in value of the premises to be assessed on a day to be fixed. The counterclaim was dismissed with costs of both the claim and counterclaim to the Plaintiff, to be taxed if not agreed.’

The Defendants now seek leave to appeal my decision and a stay of execution pending appeal.

The applicable test is set out in Smith v Cosworth Casting Processes Limited [1997] 1 WLR 1538. Lord Woolf, MR stated the relevant principles as follows:

“ i) The court will only refuse leave if satisfied that applicant has no realistic prospect of succeeding on the appeal. The test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why however this court has decided to adopt the former phase is because the use of the word “realistic” makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.
ii) The court can grant the application even if it is not satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success. For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying.”

Part of the grounds of appeal deals with my finding of fact that water seeping from the tiles in the 1801 shower area was the source of water seeping into 1802. This finding was made by a process of inference, drawn when I found the 1801 shower area wall-tiles seeped water under the floor tiles, that it was more likely than not the shower area also seeped water under the wall-tiles onto the partition wall. When there was no evidence of any other source of water seepage, the water seepage under the shower area wall-tiles was more likely than not, the source of water seepage in the 1801 side of the partition wall.

The proper approach, when an appeal is against a Court’s finding of primary facts is set out in Ting Kwok Keung v Tam Dick Yuen & Ors [2002] 3 HKLRD at para. 32 to 46. Bokhary PJ’s judgment in Ting Kwok Keung can be summarized as follows :

(1) Appeals against findings of primary facts are approached very differently from appeals against findings of fact made by a process of inference;
(2) Where findings of facts are made by a process of inference, no question of credibility arises;
(3) An appellate court is universally reluctant to reject a finding of specific fact, particularly where the finding could be found on the credibility or bearing of a witness;
(4) On the other hand, an appellate court is customarily willing to form an independent opinion about the proper inference of fact, subject only to the weight which should be given to the opinion of the court below;
(5) Where the judgment turns on an issue of facts, the Court of Appeal must have regard to the nature of that issue of fact and to the advantage enjoyed by a trial judge who received evidence on such issue first-hand;
(6) The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received evidence first-hand, it is nevertheless satisfied that the trial judge’s conclusion on the facts is plainly wrong.

My finding of fact was based on a process of inference and the Court of Appeal is entitled to form its own opinion about the proper inference. Leave should therefore be granted.

RE EDMUND JAMES LAWSON QC HCMP1722/2007

S’s words:-
Overseas Counsels to be approved to act for defendants in criminal cases are rare. The following case is an example. However, it tells us the truth that Hong Kong do not have much specialist criminal leading counsel who are family with the Takeovers Code or company takeovers in general.

--- quote from judgment ---

Date of Judgment : 24 September 2007

The Applicant seeks admission to appear for a defendant (whom I shall refer to simply as “L”) in a trial in the District Court commencing on 7 January 2008. The trial is fixed for 40 days although the Applicant’s solicitors (also the solicitors for L) are of the view that this may well prove to be conservative.

Although I have not been provided with much by way of material, it is reasonably clear that the issues likely to arise in the trial are factually, and perhaps legally also, difficult and complex. Regulatory issues will arise (the Stock Exchange of Hong Kong and the Securities and Futures Commission were said to have been defrauded) in the context, as far as L is concerned, of professional legal advisors. The amount of documentation is said to be voluminous. I am prepared to assume in the Applicant’s favour that the case is one of unusual difficulty and complexity, despite the submissions of Mr Robert Pang (for the Hong Kong Bar Association) that the only issue is really whether L was dishonest. Mr Ronny Tong SC (for the Applicant) points out that there are more legal issues than just dishonesty, such as that of non-economic loss.

The trial will take place in the District Court but this is neither here nor there.

However, one matter regarding the application initially caused me some concern. No evidence was provided over the aspect of the availability or non-availability of local leading counsel. Serious and genuine efforts to instruct local counsel have to be demonstrated or where it is said there are none, an explanation must be provided to the court justifying this : - see Re Flesch QC & Another [1999] 1 HKLRD 506 and Re Kosmin QC & Another [1999] 1 HKLRD 641. All this is to provide a complete picture to assist the court to make an informed decision, giving it some idea as to the size of available and suitable counsel, and the calibre of this pool : see Re McGregor QC [2003] 3 HKLRD 585, at pages 590-591, paragraphs 11(2)-11(3); Re Pannick QC, unreported, HCMP 1414/2006, 21 July 2006 at paragraph 9. The relevance of this is to enable the court to determine whether the counsel who seeks admission would be able to add a significant dimension to the case.

This morning, Mr Tong has informed me that there was a certain embarrassment for the Applicant’s solicitors to state on affidavit why certain Hong Kong leading counsel were unsuitable or unavailable. These reasons include the important fact that there are a very few specialist criminal leading counsel in Hong Kong who have a working and familiar knowledge of the Takeovers Code or company takeovers in general.

I am of the view that the available pool of local counsel for a case such as the present is necessarily small. There have been to date very few, if any, criminal cases in Hong Kong involving legal advisors in Hong Kong in the context of company takeovers. This is a rare type of case even in a jurisdiction such as the United Kingdom. It is not apparent that there are many Hong Kong leading counsel who would have extensive experience of this area of the law, although a few no doubt would be more than competent. The Applicant is an experienced practitioner in this field and he will no doubt add a significant dimension to the case.

In these circumstances, in my judgment, the Applicant should be approved, admitted and enrolled to practise as a barrister of the High Court of Hong Kong for the purpose of conducting DCCC 980/2006 in the District Court for and on behalf of L rendering advices in conferences in Hong Kong and appearing at the trial of L.

TANG KA HUNG ROBERT & TANG MEI SZE v. TANG TIM CHUE alias TANG TIM CHU HCAP 7/2006

S’s words:-
The following case only concerns about the issue of costs for an aided person, whether he should be personally responsible to pay for such costs with legal aid certificate be granted in his favour.

It is the existing practice that unless the Court otherwise directs, a plaintiff cannot recover his costs from either the Director of Legal Aid or a defendant the costs so long as the defendant is legally aided.

The governing provisions are Sections 16(C) and 17(3) of the Legal Aid Ordinance and those two sections have been referred to in the judgment.

If the Defendant in this case insisted to defend the application of the Plaintiffs for striking out despite legal advice of his legal representatives, it may be an appropriate case for the Court to make an order as requested.

Such applications should not be used as oppressions to the aided persons.

However, a defendant should be properly advised of the risk whether he would be personally responsible to pay for the costs, whether his own costs of the costs of the other side.

--- quote from judgment ---

Date of written Reasons for Decision: 27 September 2007

The plaintiffs are the executors named in the last will dated 27 September 1991 made by their late father, Mr Tang Sum On. Mr Tang died on 7 November 2005 in Hong Kong.

The defendant is the son of Mr Tang and the half brother of the plaintiffs. On 18 November 2005 and 26 January 2006, the defendant entered a Caveat and an Appearance to Warning in HCCA002730/2005 to oppose to the will to be admitted to probate.

In March 2006, the plaintiffs commenced this probate action to have the Caveat withdrawn and for probate to be granted to them.

The defendant was privately represented until legal aid was granted to him. The Legal Aid Certificate was issued on 29 August 2006 and counsel was later assigned by the Director of Legal Aid.

By summons filed on 28 February 2007, the plaintiffs apply to strike out the Defence and Counterclaim on the basis that none of the matters raised in it affects the validity of the will or the plaintiffs’ entitlement to probate and also on the basis that they are devoid of merits.

Shortly before the hearing, the defendant’s solicitors indicated to the plaintiffs’ solicitors and the court that the striking out application would not be opposed. The arguments at the hearing were directed at the question of costs. Apart from asking that the costs of the caveat proceedings and this probate action be paid by the defendant, the plaintiffs further applied for an order under section 17(3) of the Legal Aid Ordinance, cap.91 (“LAO”) that the costs incurred by the plaintiffs after the grant of Legal Aid Certificate be paid by the defendant personally. The application was opposed by the defendant. After hearing arguments, I refused to make an order under section 17(3) of LAO and gave oral reasons for the decision.

On the question of entitlement to costs, there is no reason to depart from the normal rule of costs follow event so that the costs of the caveat proceedings and this probate action should be to the plaintiff against the defendant to be taxed if not agreed.

The plaintiff’s application for an order under section 17(3) of the LAO will impact on the defendant's personal liability for costs incurred after the Legal Aid Certificate was issued. This is because in the normal course, the plaintiffs' ability to recover costs or to enforce the costs order that I had made will be subject to section 16C of the LAO.

The effects of section 16(C) insofar as they are relevant to this action are that: (1) The defendant will be personally liable for the plaintiff’s costs in the Caveat proceedings and this probate action incurred prior to the grant of the Legal Aid Certificate: section 16C(2); and (2) The Director of Legal Aid will be responsible for the plaintiff’s costs occasioned by the Counterclaim: section 16C(1)(b)(ia). It follows that under section 16C, the plaintiffs cannot recover from either the Director or the defendant the costs of their claim in this probate action incurred after the issue of the Legal Aid Certificate.

Section 17(3) provides:
“Where it appears to a court or judge that an aided person has acted improperly in bringing or defending any legal proceedings or in the conduct of them, the court or judge may order the aided person to pay the costs of the Director and of the counsel or solicitor who acted for him or the costs of the other party, or the costs of the Director and such counsel and solicitor and such party.”

Section 17(3) of LAO is an exception to the general position governing an aided person's personal liability to costs, which is provided under section 16C. I do not believe that the spirit of section 17(3) is to expose an aided person to costs liability as a result of inapt advice given by his legal representatives. In this regard, I note in particular that section 17(3) not only deals with liability for costs of the aided person’s opponent, but also extends to liability for costs of the Director as well as costs of the aided person's own counsel and solicitors.

In the circumstances of this case, given what Mr Tang has informed the court, I do not feel that the discretion of the court should be exercised in making an order under section 17(3). Accordingly, I will not order the defendant to pay the plaintiff’s costs of the claim incurred after the issue of the Legal Aid Certificate.

YEE PUI PUI ANNA v. LAM MEI LIN & Another DCMP 1377/2007

S’s words:-

From the decisions of the Privy Council in Chong Kai Tai Ringo & Another v. Lee Gee Kee & Another [1977] HKLRD 461 and Edward Wong Finance Co. Ltd v. Johnson Stokes & Master (a firm) [1984] 1 A.C. 296, it has been decided that a party to a sale and purchase agreement of land is entitled to require formal completion unless there is agreement to the contrary. Such is still our law up to today.

Paragraph 12 of the Law Society's circular 91/82 issued on 28 December 1982 reads that "it will be assumed that completion will take place by way of undertaking unless the solicitors concerned notified the other side in good time that standard undertakings will not apply and that formal completion is required". The circulars of Law Society, as in many other occasions dealing with the same issue or others, are still not the law or any strict regulations requiring all legal practitioners to follow. In no doubt, such is expected.

Personally, it is difficult to blame the Defendant in this case. The Plaintiff from the very first beginning insisted for formal completion. We have no idea why the Plaintiff or her solicitors decided the same. In some situations, there may be unusual circumstances supporting a purchaser’s solicitors requiring the same. However, in many other occasions, purchasers’ solicitors are used to rely on formal completion as a tactics.

The judgment itself did not tell us know whether there was any other reason(s) the purchaser’s solicitors insisting for formal completion. If there was no such special circumstances, it would definitely be a bad example (but update) for the solicitors of the purchasers in future to insist on asking for formal completion. Split cheques may also be another weapon for the solicitors of the purchasers.

Besides, it is difficult (but not impossible certainly) to arrange the mortgagee to have the release/discharge be executed in escrow or invite their representatives to attend the office of the vendor’s solicitors. That is a practical issue one may have to consider.

Maybe we have to advise the estate property agencies to re-draft their respective provisional agreement for sale and purchase to include completion by way of undertaking and a vendor can require a purchaser to split the cheques for payment(s).

--- quote from judgment ---

Date of handing down Judgment : 20 September 2007

This is the Plaintiff’s application by Originating Summons for declarations that the Defendants were in breach of an agreement for the sale and purchase of a property by failing to complete on the contractual completion date, that the Plaintiff is entitled to terminate the agreement by reason of the wrongful breach on the part of the Defendants, and that the Plaintiff is entitled to a refund of the deposits paid by them under the agreement.

The parties were therefore unable to agree on the terms of the formal agreement for sale and purchase, and none was eventually signed.

On 19 April 2007, the Plaintiff's solicitors sent a draft assignment of the Property to the Defendants' solicitors for approval, and asked for the specific time for the formal completion of the sale and purchase on 20 April 2007. On the same day, in response to the letter of 19 April 2007 from the Plaintiff's solicitors, the Defendants' solicitors wrote to say that the draft assignment was approved without amendments, and asked for the draft of the "Undertaking Letter" from the Plaintiff’s solicitors for their approval, to comply with the Law Society's Circular No. 3/92. The Defendants' solicitors also reminded the Plaintiff that completion was scheduled to take place at or before 5 p.m. on 20 April 2007, and asked for payment of the sum of HK $1,287,000 by three split cheques (HK $942,275.81 in favour of the mortgagee, HK $340,729.19 in favour of the Defendants, and HK $4,000 in favour of the Defendants’ solicitors). This letter was faxed at 5:13pm on 19 April 2007.

On the evidence, it is not disputed that the Plaintiff attended the offices of the Defendants' solicitors with her legal representatives at 3:55 p.m. on 20 April 2007. They brought with them the approved assignment and a cashier order in the sum of HK $1,287,000 which was issued in favor of the Defendants, and asked for completion to take place. They were informed by the Defendants' solicitors that the Defendants were not in their office, and that the Defendants had never accepted formal completion to be held on that day. According to the evidence of the Defendants, the Plaintiff's solicitor, Mr. Tang, produced to Mr. Tsang, the legal executive of the Defendants' solicitors handling the transaction, a cashier order for payment of the balance of the purchase price. Having noted that the sum of HK $1,287,000 was not made payable in accordance with the split cheque instructions given by the Defendants' solicitors, Mr. Tsang informed Mr. Tang that there was "no basis for formal completion". The Plaintiffs and Mr. Tang then left.

Formal completion or completion by undertakings

On the authority of the decisions of the Privy Council in Chong Kai Tai Ringo & Another v. Lee Gee Kee & Another [1977] HKLRD 461 and Edward Wong Finance Co. Ltd v. Johnson Stokes & Master ( a firm) [1984] 1 A.C. 296, it is clear that a party to a sale and purchase agreement of land is entitled to require formal completion unless there is agreement to the contrary. Paragraph 12 of the Law Society's circular 91/82 issued on 28 December 1982 reads that "it will be assumed that completion will take place by way of undertaking unless the solicitors concerned notified the other side in good time that standard undertakings will not apply and that formal completion is required". Notwithstanding that, the Privy Council decisions have well established that save for cases where the contract provides expressly to the contrary, a purchaser is entitled to refuse to pay the purchase price due on completion except against delivery to him of the duly executed assignment and, where the vendor has mortgaged the property, also the duly executed release or discharge of the mortgage. The obligations of the purchaser to pay and the vendor to complete by giving an executed assignment are to be carried out simultaneously unless there was an express or implied term to the contrary.

Chong Kai Tai's case makes it clear that "the question is not whether the circumstances require the implication of a term that payment and completion were to be simultaneous, but whether the circumstances require the implication of a term that there would be a departure from the normal rule that they would be simultaneous" (Chong Kai Tai v. Lee Gee Kee [1997] HKLRD 461, 467G-H). Since it is the Plaintiff's right to require formal completion, whether formal completion is necessary or reasonable is not relevant.

It is clear from the decision of Recorder Edward Chan, S.C. in Cheng Jui Lung Kris v. Perfect Best Ltd. HCA 1347 of 1998 that the rights of a purchaser under the contract to formal completion cannot be varied by the Law Society circular which requires three working days’ notice to be given "as a matter of professional courtesy" before formal completion. In the light of the clear authorities binding this court, I am not persuaded that a term has to be implied in the Agreement that reasonable notification for formal completion has to be given before the Plaintiff can insist on her right to formal completion. In any event, the Plaintiff's solicitors had indicated on 20 March 2007 that the Plaintiff wished to have formal completion. On that basis, the Plaintiff had given reasonable and adequate notice.

Whether proper tender of payment

The decision of the Court of Final Appeal in Kensland Realty Ltd. v. Whale View Investment Ltd. (FACV No. 10 of 2001) deals with, inter alia, a term being implied into an agreement for the sale and purchase of land, where the land is subject to an existing mortgage, for split payment, and the time to be implied for giving split payment instructions. However, that decision relates to completion of such an agreement by way of undertaking, and is not directly applicable to the facts of the present case.

Counsel for the Defendants relied on the decision of the Court of Final Appeal in Ma So So v. Chin Yuk Lun [2004] 3 HKLRD 294, and the observation made by Ribeiro PJ that the vendors in the case "were contractually entitled" to require the balance of the purchase monies to be split. However, the parties in the case of Ma So So had signed a formal sale and purchase agreement, with the standard provision to which I referred in paragraph 27 above which confers on the vendor the right to require the purchaser to split the payment of the purchase price or any part thereof in accordance with the split cheque instructions given by the vendor. There is no such formal agreement signed in the present case to give the "contractual entitlement " to the Defendants. Nor does the Agreement confer such a right on the Defendants. In the absence of any agreement to make "split payment" of the purchase price, the Plaintiff is not in breach by virtue of her failure to comply with the request of the Defendants' solicitors to make payment by split cheques.

I am satisfied, on the evidence, that the conduct of the Defendants and their solicitors on 20 April 2007 had made it plain that the Defendants were not prepared to complete the sale and purchase at the scheduled time, notwithstanding the Plaintiff's ability and readiness to proceed, and that the Plaintiff is entitled to treat the Defendants' conduct as a repudiation of the Agreement.

FUNFAIR COMPANY LIMITED v. WONG LUI WING trading as t/a KWONG WING METAL CO CACV441/2006

S’s words:-
Many tenants always ask why they cannot terminate the tenancy as they wish. Tenancy Agreement in fact cannot be terminated unilaterally. If for example the tenant is in breach by way of terminating the tenancy without consent of the landlord, unless the landlord acts wholly unreasonable, it is still free for the landlord to accept the repudiation or not to accept the repudiation but to claim for rental.
However, the definition of “wholly unreasonable” of the act of a landlord has not been decided in the Court of Appeal.

--- quote from the judgment ---

判案書日期： 2007年7月10日

在判案書之第11段，周法官表述以下觀點：

「…租約是可以單方面終止的，至於其理由是充份與否是另一問題。被告人單方面的行為，致使租約在2004年12月已被終止，因此被告人只欠2004年12月的租金$165,000。」

這觀點是錯誤的。除非合約明文許可，否則任何合約均不能作單方面終止。

租約是合約的一種，雖然正如Lord Simon of Glaisdale在National Carriers Ltd v Panalpina (Northern) Ltd [1981] AC 675 at 703所說：悔約原則（doctrine of repudiation）亦適用於租約。但未經接納的違約行為是沒有效的。見1 Chitty on Contracts, (28th Ed), paras. 25-012.

但違反不同性質的合約會引致不同後果。一般來說，違約一方只需賠償另一方的損失；但若有關土地權益的合約，例如買賣協議或租約，雙方都可要求執行強制履行令（Specific Performance）。業主亦有權向租客追討租金。見White and Carter (Councils) Ltd v McGregor [1962] AC 413.

最近英國上訴法庭在Reichman and Anor v Beveridge and Anor [2006] EWCA Civ 1659一案，經仔細考慮下認為除非業主是在完全無理（wholly unreasonable）的情況下強制執行租約，否則業主有權堅持租戶繳交租金。本庭認同此觀點。

CHEUNG MEI YIN v. POSTMASTER GENERAL HCAL 66/2007

S’s words:-
When we read from newspapers that a person intends to apply for judicial review in relation to the use of postage stamps bearing the Queen’s portrait. What was our first response? If I were the Applicant and those stamps are/were still in good condition, I would try to sell them in yahoo.com.hk or ebay ...

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Date of Judgment : 5 July 2007

"This is a hopelessly late application for leave to apply for judicial review.

Regulation 28 of the Post Office Regulations (Cap 98A) provides that the issue of postage stamps for use under the Post Office Ordinance (Cap 98) and the withdrawal of postage stamps from such use shall be under the control and management of the Postmaster General. In anticipation of the Mainland Government’s resumption of exercise of sovereignty over Hong Kong on 1 July 1997, the Postmaster General announced on 23 May 1996 that postage stamps bearing the Queen’s portrait or the Royal Cypher would no longer be valid for postage as from 1 July 1997. There was a press conference held on the same day and the announcement was widely reported in the local media. On 6 June 1997, the Government Gazette published a notification of the Postmaster General’s withdrawal of the affected postage stamps from use after 30 June 1997 (GN 2757). The notification stated that the postage stamps affected might be exchanged for current definitive stamps of an equivalent value at the Post Office from 3 to 31 July 1997, both days inclusive."

STANDARD CHARTERED BANK (HONG KONG) LIMITED v. LEUNG SHU KAN DCCJ 272/2007

S’s words:-
Many Guarantors still intend to deny they are responsible to pay as per the Guarantee documents they have signed. The defence of non est factum and misrepresentation are two usual alleged grounds. But when one really wants to use the same, please be aware of summary judgment application.

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Date of Handing Down Written Decision: 5th July 2007

This is the Plaintiff bank’s application for summary judgment against the Defendant for the sum of HK$267,127.55 plus interest.

By an unlimited guarantee (“the Guarantee”) dated 21 April 2006 and signed by the Defendant, Ng and Luo, they guaranteed the repayment of any outstanding sums owed by Company to the Plaintiff. As set out in clause 1 of the Guarantee, the Defendant, Ng and Luo agreed to enter into the Guarantee in consideration of the Plaintiff granting or continuing to grant banking facilities to the Company.

The defence of non est factum
A person relying on the defence of non est factum bears a heavy burden. The defence is also not available to a person who is careless in signing a document. Unless there is good evidence to explain why it was reasonable for him to do so, a person is regarded as careless in simply signing any document placed before him and without making any necessary inquiry as to its nature or effect, and even if he did so because of his trust placed on others. See: Saunders v Anglia Building Society [1971] AC 1004, 1036A to H per Lord Pearson, 1016B to F per Lord Reid, and Lord Wilberforce at 1025D to F and 1026C to 1027F; Wan Chow Ki v Wan Chow Kan (unrep., HCA 1490/2002, 16 January 2004, Lam J), paras 10-12.

The defence of misrepresentation
Quite to the contrary, there is in fact nothing commercially unusual that the Defendant, as a director and shareholder of the Company, was willing and prepared to provide a personal guarantee to secure the Plaintiff’s provision of banking facilities. In the circumstances, and without more, there is nothing to remotely suggest that the Plaintiff should somehow be put on inquiry as to the potential risk that the Defendant’s agreement to provide the Guarantee was a result of some equitable wrongs. See: Bank of Communications v Yenwin Investments Ltd (unrep., HCA6014/1999, Cheung J, 3 May 2000), para 8 per P Cheung J (as he then was).

Other allegations
Further, whether or not Ms Chung had shown the Defendant the terms and conditions of the Guarantee is also irrelevant. As a general principle, a bank does not have any general duty to explain the terms of a mortgage or guarantee to the mortgagee or guarantor. See: Kincheng Banking Corp v. Kao Yu Kuei [1986] HKC 212, 215G per Huggins VP. Nor does the bank has a general duty to disclosure so long as it does not misrepresent the position: Bank of Communications v. Wong King Sing & Ors [2002] 1 HKLR 358, paras. 25-28, pp. 364E-365G. Thus, the fact that the bank has failed to explain the terms of a suretyship contract to the surety does not per se provide a defence to set aside the contract.

MAK KIT CHING KITTY and FU MEE YUK SHIRLEY, administratrixes of the estate of FU KWOK KAI, DANIEL (Deceased) v. TSANG YIU WING and others CACV 377/200

S’s words:-
Another good example that the decision is against the Plainitiff (the Appellant) despite of the presence of the greatest sympathy of a High Court Judge.

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“This I find a very difficult case, not so much because of the legal matters involved but because it involves a tragic accident in which the father of a family was killed and I can only express my greatest sympathy for those he left behind. But nevertheless, I have to look at this case in the way it is presented.

... but, unfortunately, I regret that I cannot see that there is merit in this appeal or, to put it another way, that this appeal is likely to succeed or that it has a reasonable chance of success.

So I come to the conclusion, with some regret, I have to order security for costs. I am going to do it in a very much reduced amount to the amount requested.”

KAO LEE & YIP (a firm) v. LAU WING and TSUI WAI YU CACV 121/2006

S’s words:-

If the case authority of Yip Wan-chiu v Magnificent Industrial Ltd [1974] HKLR 183 is to be relied on, my personal view, a different (but rather unreasonable) decision may be given.

However, an employee should be entitled to give notice or by “agreeing” (i.e. undertaking or promising) to pay wages in lieu of notice (under s.7).

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Date of Judgment : 4 July 2007

The facts:-

“The plaintiff is an established and well-known firm of solicitors in Hong Kong. The defendants are two young, recently qualified solicitors who were in the plaintiff’s employ as assistant solicitors. At the material time they had approximately one and two years’ post-qualification experience. ... In August 2005 the defendants purported to terminate their employment with the plaintiff. Contractually, they were required to give three months’ notice. They relied on sections 6 and 7 of Cap. 57, the Employment Ordinance to, in fact, terminate their employment in the following way. On 19 August 2005 they gave three months’ notice in writing but stated that they would only work for one month, until 19 September 2005, and pay to the plaintiff two months’ wages in lieu of the remaining two months’ notice. The plaintiff did not accept their notice of termination and refused to accept the cheques purporting to represent the two months’ wages”

Relating to D2

As [the Judge understood] the law the position now is that contrary to the obiter dictum of the majority in Yip Wan-chiu and in any event after the passing of s.8A, a contract of employment may be lawfully terminated by either party by giving notice (under s.6) or by “agreeing” (i.e. undertaking or promising) to pay wages in lieu of notice (under s.7). If the terminating party having agreed to pay wages in lieu fails to do so, the cause of action would be for breach of that agreement. But if a party terminates a contract of employment without either giving notice or agreeing to pay wages in lieu, that would be an unlawful termination and the innocent party’s cause of action would be for damages for wrongful termination, which is set by the legislature under s.8A at the notice period’s wages.

Relating to D1

However [the Judge did] not see any substance in the Plaintiff’s argument in any event. It is clear that s.6(2A) is for the protection of the employee only. First, what are the parties’ positions when an employee is enjoying statutory annual leave? The employee gets the benefit of being on leave and at the same time being paid his salary. The employer derives no benefit. He has to get someone else to do the holidaying employee’s work and he has to pay the holidaying employee during that period.

So analysed, [the Judge thought] it is clear that it was for the employee’s benefit that s.6(2A) was enacted, so it would not apply when it is the employee who gives notice, or if it does apply, the employee can waive the exclusion of the leave

黃得雄 v. 朱鳳球CACV 189/2007

S’s words:-
Many people always ask whether it is the duty of a landlord or a tenant to repair the premises. Another simple judgment of the Court of Appeal again reiterated the position of common law that unless there is an express agreement of the parties for imposing the landlord an obligation to repair, there is never any implied term on the landlord to repair. When a landlord instructs a solicitor to prepare a tenancy agreement on his behalf, the solicitor would usually prepare an agreement with covenants saying that the landlord is not responsible for such repair. However, when a landlord wants to save his pocket, he should better check carefully the Standard Tenancy(標準租約) he acquired from shops.

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判決書日期: 2007年6月29日

當一份租約沒有明文條款令到業主有責任修補處所時，根據普通法，一位業主是沒有任何隱含的責任須要負責修補處所的（Halsbury’s Laws of Hong Kong第17（1）冊，2007年再發行，《業主與租客》第235.289段)，而一位業主把地方租出時，亦沒有作出隱含的適用性的保證(warranty of fitness) （Halsbury’s Laws of Hong Kong如上, 第235.292段）。而且，一位業主不修補處所是不構成違反安寧享有的契約條款的 (covenant for quiet enjoyment)，亦不構成減損土地的批予 (derogation from grant) (Halsbury’s Laws of England, 4th Ed. Vol. 27(1) 2006 reissue, p.533, paragraph 514)。

RE INTELLIGENT GROUP ENTERPRISE LTD HCMP 700/2007

S's Words:-
It is not a different task to increase capital. However, when one wants to reduce the share capitil of a limited company, passing a special resolution alone is not sufficient. Would you have a second thought before you make such a proposal?

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Date of Judgment: 26 June 2007

IN THE MATTER of Section 59 of the Companies Ordinance (Cap. 32)

This is a petition presented by Intelligent Group Enterprise Limited (“the Company”) for confirmation of reduction of its share capital and the cancellation of its share premium account.

There is provision in the articles of association of the Company that it may by special resolution reduce its share capital or any share premium account in any manner and with, and subject to, any incident authorised, and consent required, by law.

In the notice to convene the extraordinary general meeting and the circular to shareholders accompanying the notice, the purposes of the proposed reduction and cancellation of the share premium account were adequately explained to the shareholders.

The directors considered it would be in the interest of the Company to bring in another investor. ... To achieve a reasonable capital structure so as to bring in an investor to salvage the Company, the directors proposed to reduce the share capital to eliminate the accumulated losses and to return redundant capital locked up in non-business assets. This would bring the accounts more nearly into line with the business assets and bring forward the time when the Company would be in a position to pay dividends.

There was no opposition to the petition.

The conditions for a reduction of capital are satisfied in this instance. The shareholders are treated equitably in the proposed reduction and the proposals have been properly explained to them in the circular. The reduction is for a discernible purpose and [the Judge was] satisfied that the interests of creditors are adequately safeguarded. [The Judge had] made an order in terms of the draft submitted as amended.