CACV 148/2023, [2024] HKCA 799

On appeal from [2023] HKCFI 949

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 148 OF 2023

(ON APPEAL FROM HCA NO. 1674 OF 2019)

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BETWEEN

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REASONS FOR JUDGMENT

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Hon Chu VP (giving the Reasons for Judgment of the Court):

Introduction

1. This is the defendant’s appeal against the judgment of A Chan J (“the Judge”)  given on 18 April 2023 [1] .  By the judgment, the Judge awarded damages for breach of contract to the 1 ^st and 2 ^nd plaintiffs and the 3 ^rd plaintiff in the respective sum of HK$4,368,000 and HK$2,910,000, together with interest, and dismissed the defendant’s counterclaim.  He further ordered the defendant to pay the plaintiffs the costs of the action and the counterclaim.

2. At the hearing, after hearing submissions, we ordered that the appeal be dismissed with costs to the plaintiffs to be summarily assessed.  We now give our reasons for the decision and the assessment of the plaintiffs’ costs.

The facts

3. The defendant is the registered owner of a plot of land in Shatin, New Territories known as Lot 510 in Demarcation District 176 (“the Land”).

4. In November 2011, the 1 ^st and 2 ^nd plaintiffs and the defendant executed a Chinese agreement dated 18 November 2011 entitled “發展合約” (“Development Agreement”)  for the construction of a three-storey New Territories Exempted House (“the House”)  on the Land.

5. The material terms of the Development Agreement included: (1)  the 1 ^st and 2 ^nd plaintiffs shall pay the defendant a sum of HK$850,000, of which HK$600,000 was to be paid upon the signing of the agreement; (2)  the 1 ^st and 2 ^nd plainiffs shall be responsible for the construction of the House and the related work and also the associated costs and expenses; and (3)  upon completion of the House, the 1 ^st and 2 ^nd plaintiffs shall be entitled to the ownership of the ground floor and the second floor inclusive of the roof.

6. On 14 November 2011, the 1 ^st and 2 ^nd plaintiffs paid HK$600,000 to the defendant’s solicitors, Rene Hout & Co (“RHC”).  RHC issued to the 1 ^st and 2 ^nd plaintiffs a receipt (“the Receipt”)  dated 14 November 2011 on which the HK$6