Posts Tagged ‘Repudiation’

Recovering pre-payment of purchase price where the agreement was never completed

September 11, 2021

In Hui Tze Ha v Ho Yuet Lin ([2021] HKCFI 1901) D and P entered into a written agreement on 18 September 1992 under which D agreed to sell property in Kowloon to P for HK$1.2 million. P paid a ‘deposit’ of HK$1 million. The agreement was never completed. Time for completion was of the essence.

P died in 2001. In March 2016, P’s estate brought proceedings to recover the deposit of HK$1million. In October 2016, D counterclaimed that she was entitled to forfeit the deposit and a declaration that the agreement was terminated by virtue of P’s repudiatory breach in failing to take the steps necessary to complete.

Deputy Judge MK Liu said that when neither party took the necessary steps to complete on the contractual completion date, the effect was that each party then had a reasonable time to complete (Camberra Investment Ltd v Chan Wai Tak, Chong Kai Tai Ringo v Lee Gee Kee).

Deputy Judge ML Liu held that D elected to treat the agreement as at an end when she brought her counterclaim for a declaration to this effect in October 2016 (drawing on the principles set out in Chao Keh Lung v Don Xia).

The payment of HK$1 million out of a total agreed consideration could not be treated as a deposit (Polyset Ltd v Panhandat Ltd). It was a payment in advance ([33]).

P’s estate’s unjust enrichment claim arose when the contract was terminated in October 2016 ([37]).

D was ordered to repay the HK$1 million ([46]).

Michael Lower