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					由此

A                                                                  A
                                               HCA 2723/2008
B                                                                  B
                   IN THE HIGH COURT OF THE
C          HONG KONG SPECIAL ADMINISTRATIVE REGION                 C

                   COURT OF FIRST INSTANCE
D                                                                  D
                     ACTION NO. 2723 OF 2008
E                          ____________                            E

     BETWEEN
F                                                                  F

                        PROBUS LIMITED                 Plaintiff
G                                                                  G

                                and
H                                                                  H
                                                  st
                   TREBLE & TRIPLE LIMITED       1 Defendant
I               MIDLAND REALTY INTERNATIONAL                       I
                                                  nd
                          LIMITED                2 Defendant
J                       (By Original Action)                       J


K    AND BETWEEN                                                   K


L                   TREBLE & TRIPLE LIMITED            Plaintiff   L


M
                                and                                M

                       PROBUS LIMITED            1st Defendant
N                                                                  N
                MIDLAND REALTY INTERNATIONAL
                          LIMITED                2nd Defendant
O                                                                  O
                        (By Counterclaim)
                          ____________
P                                                                  P

     AND
Q                                              HCA 167/2009        Q


R                  IN THE HIGH COURT OF THE                        R

           HONG KONG SPECIAL ADMINISTRATIVE REGION
S                                                                  S
                   COURT OF FIRST INSTANCE
T                    ACTION NO. 167 OF 2009                        T

                           ____________
U                                                                  U


V                                                                  V
由此

A
                                 -2-                                   A


B    BETWEEN                                                           B

               FORTUNE ASSET DEVELOPMENT LIMITED           Plaintiff
C                                                                      C

                                 and
D                                                                      D
                                                     st
                 DE MONSA INVESTMENTS LIMITED     1 Defendant
E              CENTALINE PROPERTY AGENCY LIMITED 2nd Defendant         E

                         (By Original Action)                          F
F

     AND BETWEEN
G                                                                      G
                 DE MONSA INVESTMENTS LIMITED              Plaintiff
H                                                                      H
                                 and
I                                                                      I
               FORTUNE ASSET DEVELOPMENT LIMITED 1st Defendant
J
               CENTALINE PROPERTY AGENCY LIMITED 2nd Defendant         J

                          (By Counterclaim)
K                                                                      K
                           ____________
L                                                                      L
     AND
                                                 HCA 1004/2009
M                                                                      M

                    IN THE HIGH COURT OF THE
N                                                                      N
           HONG KONG SPECIAL ADMINISTRATIVE REGION
O                   COURT OF FIRST INSTANCE                            O

                      ACTION NO. 1004 OF 2009
P                                                                      P
                            ____________
Q                                                                      Q
     BETWEEN

R            MULTI STAR INVESTMENT (GROUP) LIMITED         Plaintiff   R


S                                and                                   S


T
                 DE MONSA INVESTMENTS LIMITED             Defendant    T
                          ____________
U                          (Heard together)                            U


V                                                                      V
由此

A
                                         -3-                                        A


B                                                                                   B
     Before: Hon Reyes J in Court
C    Dates of Hearing: 1-3, 8 & 12 November 2010                                    C

     Date of Judgment: 17 November 2010                                             D
D


E                                 ______________                                    E

                                  JUDGMENT                                          F
F
                                  ______________
G                                                                                   G


H    I. INTRODUCTION                                                                H


I    1.          This trial involves 3 related actions.                             I


J                                                                                   J
     2.          The Plaintiff Vendors in each action (Probus, Fortune Asset,
K    and Multi Star) entered into agreements for the sale of real property to one   K

     or other of the Defendant Purchasers (Treble in the case of Probus,            L
L
     De Monsa in the cases of Fortune Asset and Multi Star). As a result of the
M                                                                                   M
     Purchasers defaulting on their obligations, the Vendors brought their
     actions claiming damage.                                                       N
N


O                                                                                   O
     3.          The Purchasers are property investment companies. At the

P
     relevant times, all decisions on the sale and purchase of properties by the    P
     Purchasers were taken by Lauw Senior. He was then over 80 years old.
Q                                                                                   Q
     The Purchasers had one other director, Lauw Senior’s son, sometimes

R
     known as Lauw Junior. But Lauw Junior carried on the family business in        R

     Indonesia and his involvement in the Purchasers’ day-to-day business was
S                                                                                   S
     minimal.

T                                                                                   T


U                                                                                   U


V                                                                                   V
由此

A
                                        -4-                                         A


B    4.           In each action, the Purchasers say in defence that, when Lauw     B

     Senior agreed on the Purchasers’ behalf to buy properties, Lauw Senior
C                                                                                   C
     was suffering from dementia and could not understand what he was doing.
D    The Purchasers say that Lauw Senior’s actual authority to act on their         D

     behalf ceased upon his becoming demented. The Purchasers contend that,
E                                                                                   E
     as a result, the sale and purchase agreements upon which the Vendors sue
F    were all void (or at least voidable by the Purchasers). Subject to questions   F

     as to Lauw Senior’s apparent authority or as to whether the Purchasers
G                                                                                   G
     ratified Lauw Senior’s acts, the Purchasers say that the Vendors’ actions
H    are not viable.                                                                H


I                                                                                   I
     5.           Probus and Fortune Asset have joined the estate agents
J    involved (Midland and Centaline respectively) as defendants. The claim is      J

     that, insofar as the Purchasers are held liable, the estate agents breached    K
K
     their duties to Probus and Fortune Asset by not informing them of
L    Lauw Senior’s dementia.                                                        L


M                                                                                   M
     6.           The Purchasers have in turned sued the estate agents, seeking
N                                                                                   N
     to be indemnified against whatever the Purchasers may have to pay to

O
     Probus or Fortune Asset.                                                       O


P                                                                                   P
     7.           Finally, Midland sues Treble for unpaid liquidated damages.

Q                                                                                   Q

     II. BACKGROUND
R                                                                                   R

     A. Probus Action
S                                                                                   S

     8.           By 4 Principal Agreements of 23 March 2007 Probus agreed
T                                                                                   T
     to buy Flats A and B and Car Parks A and B (the Bel-Air Properties) from
U    Cyberport. The Bel-Air Properties (then still under construction) formed       U


V                                                                                   V
由此

A
                                        -5-                                        A


B    part of the development known as Bel-Air on the Peak.            The total    B

     consideration for the Bel-Air Properties was $56,109,000.
C                                                                                  C


D    9.          On 18 October 2007 Probus entered into Provisional                D

     Agreements to sell the Bel-Air Properties to Treble in 2 lots (one
E                                                                                  E
     consisting of Flat A and Car Park A, the other of Flat B and Car Park B).
F    The Provisional Agreements stated that Probus was selling the Bel-Air         F

     Properties as confirmor. The Provisional Agreements stipulated that the
G                                                                                  G
     parties were not obliged specifically to perform the same.
H                                                                                  H

     10.         The evidence suggests (and I accept) that on 18 October 2007
I                                                                                  I
     Mr. Au Kin Cheong of Probus signed Estate Agent Agreements in relation
J    to the 2 lots of Bel-Air Properties being sold to Treble. The Estate Agent    J

     Agreements were signed on behalf of Midland by Mr. Frankie Lau and Ms.
K                                                                                  K
     April Tong respectively. On their face, the Estate Agent Agreements
L    appointed Midland as Probus’ agent (in the case of the 2nd lot of Bel-Air     L

     Properties, Probus’ exclusive agent) for the marketing of the Bel-Air         M
M
     Properties from 1 October 2007 to 31 December 2008.
N                                                                                  N


O
     11.         The total consideration under the Provisional Agreements was      O
     $122,017,800. Upon the signing of the Provisional Agreements, Treble
P                                                                                  P
     paid an initial deposit of 5% by way of cheques signed by Lauw Senior.

Q                                                                                  Q

     12.         On 8 November 2007 Treble’s solicitors (Lovells) sent to
R                                                                                  R
     Probus’ solicitors (JSM), Formal Agreements for the sale and purchase of

S    the Bel-Air Properties. Lovells’ covering letter noted that the Formal        S

     Agreement had been “duly signed by our client, the Purchaser and attested
T                                                                                  T
     for your client’s execution”. Treble also paid a further deposit of 10% for
U    the Bel-Air Properties.                                                       U


V                                                                                  V
由此

A
                                         -6-                                       A


B    13.          In July 2008 Lovells raised requisitions regarding the Bel-Air   B

     Properties. These were answered by JSM.
C                                                                                  C


D    14.          On 25 November 2008 JSM sent notices of completion to            D

     Lovells. These notices informed Treble that completion would take place
E                                                                                  E
     on or before 9 December 2008.
F                                                                                  F

     15.          Treble failed to complete on 9 December 2008. It gave no
G                                                                                  G
     reasons for its failure.
H                                                                                  H

     16.          Probus completed the purchase of Car Parks A and B from
I                                                                                  I
     Cyberport on 23 December 2009. But Probus did not proceed with the
J    purchase of Flats A and B. As a result, Probus forfeited its deposits under   J

     the Principal Agreements. Cyberport then re-sold Flats A and B (each
K                                                                                  K
     with carpark) for a total consideration of $46,000,000.
L                                                                                  L

     17.          Neither Mr. Au nor Ms. Verona Lai (Mr. Au’s wife) (the 2         M
M
     directors of Probus) have ever met Lauw Senior. The sale and purchase of
N                                                                                  N
     the Bel-Air Properties were effected through Mr. Frankie Lau. It was Mr.

O
     Frankie Lau who persuaded Lauw Senior to buy the Bel-Air Properties and       O
     Ms. April Tong who persuaded Ms. Lai to agree to selling the same.
P                                                                                  P


Q
     B. Fortune Asset Action                                                       Q

     18.          By a Preliminary Agreement dated 4 November 2007 Fortune         R
R
     Asset agreed to sell and De Monsa to buy the 20th to 23rd floors of Silver
S                                                                                  S
     Fortune Plaza in Central. The total consideration was $163,568,400 and
     completion was to take place on 15 May 2008.                                  T
T


U                                                                                  U


V                                                                                  V
由此

A
                                         -7-                                        A


B    19.         On 3 December 2007 De Monsa sub-sold the 20th to                   B

     23rd floors at $186,432,800, thereby earning a profit of nearly $23,000,000.
C                                                                                   C


D    20.         On 7 December 2007, by another Preliminary Agreement,              D

     De Monsa agreed to buy the 11th, 12th, 13th and 15th floors (there being
E                                                                                   E
     no 14th floor) of Silver Fortune Plaza from Fortune Asset. The total
F    consideration was $211,056,000 with completion to take place on 30 June        F

     2008.
G                                                                                   G


H    21.         Both Preliminary Agreements were signed by Lauw Senior.            H

     The sales of the floors at Silver Fortune Plaza to De Monsa were effected
I                                                                                   I
     through Ms. Emily Wong and Ms. Fiona Cheung of Centaline. No one
J    from Fortune Asset’s personnel ever met Lauw Senior during the relevant        J

     period.
K                                                                                   K


L                                                                                   L
     22.         In relation to the purchase of the 11th to 15th floors, a Formal
     Agreement was signed on 2 July 2008 following much negotiation                 M
M
     between the parties. The Formal Agreement stipulated a completion date
N                                                                                   N
     of 31 December 2008 at the latest. Pursuant to the Preliminary and Formal

O
     Agreements, as at 30 July 2008 De Monsa had provided deposits and part         O
     payments totalling $42,211,200.
P                                                                                   P


Q
     23.         Shortly before completion, K C Ho & Fong (De Monsa’s               Q

     solicitors) unsuccessfully asked for an extension of time.
R                                                                                   R


S    24.         On 31 December 2008 De Monsa failed to complete. Fortune           S

     Asset accepted De Monsa’s repudation by letter dated 2 January 2009.
T                                                                                   T


U                                                                                   U


V                                                                                   V
由此

A
                                         -8-                                     A


B    C. Multi Star Action                                                        B


C    25.         On 6 December 2007 Multi Star agreed by a Head Agreement        C

     to buy an Office at the Lippo Centre from Winfull at $33,480,000.
D                                                                                D
     Multi Star paid a deposit of $4,017,600. Completion was to take place on
E    5 pm on 21 July 2008.                                                       E


F                                                                                F
     26.         On 8 January 2008 Multi Star sub-sold the Office by entering
G    into a Provisional Agreement with De Monsa. The consideration was           G

     $38,329,200. De Monsa paid a deposit of $4,599,504. Completion was to
H                                                                                H
     take place by 3 pm on 21 July 2008.
I                                                                                I

     27.         The Provisional Agreement declared that Midland was “the
J                                                                                J
     Agent for both the Vendor and the Purchaser”. The sub-sale of the Office
K    to De Monsa was effected through Ms. Zoe Hui and Ms. Kanee Fung of          K

     Midland.                                                                    L
L


M                                                                                M
     28.         De Monsa failed to complete on 21 July 2008. Multi Star
     terminated the Provisional agreement on 23 July 2008.          It treated   N
N
     De Monsa’s deposit as forfeited in consequence.
O                                                                                O


P
     29.         Multi Star in turn failed to complete under its Head            P
     Agreement with Winfull. Multi Star’s deposit was forfeited to Winfull.
Q                                                                                Q
     Winfull later re-sold the Office to Hatton for $20,217,600.

R                                                                                R

     D. Lauw Senior
S                                                                                S

     30.         Although Lauw Senior was jointly interviewed by the parties’
T                                                                                T
     psychiatric experts (Prof. Felice Lieh Mak for the 3 Vendors, Midland and
U                                                                                U


V                                                                                V
由此

A
                                        -9-                                        A


B    Centaline; Dr. Jenny Tsang for the 2 Purchasers), he did not give evidence    B

     before me.
C                                                                                  C


D    31.          Oral evidence as to Lauw Senior’s state of mind at the time of   D

     the relevant agreements was instead given by Lauw Junior, Mr. Law Wai
E                                                                                  E
     and Ms. Liza Ho.       Mr. Law is the General Manager of Treble and
F    De Monsa. Ms. Ho is a clerk at a De Monsa subsidiary. In this sub-            F

     section, I shall record (without necessarily accepting) the gist of the
G                                                                                  G
     evidence given by Lauw Junior, Mr. Law and Ms. Ho on the state of
H    Lauw Senior’s mental health in 2007 and 2008.                                 H


I                                                                                  I
     32.          Lauw Senior (now 85) suffered a serious fall at home in
J    March or April 2007.                                                          J


K                                                                                  K
     33.          According to Mr. Law, following that accident Lauw Senior
L    “became another man”. Lauw Senior’s memory is said by Mr. Law to              L

     have deteriorated rapidly so that Lauw Senior was often “at a loss and        M
M
     disoriented”.   Lauw Senior apparently “could not remember his own
                                                                                   N
N    decisions” and would give Mr. Law “incoherent, illogical instructions

O
     which were the exact opposite to his antecedent instructions”.                O


P                                                                                  P
     34.          Mr. Law alleges that, since the accident, Lauw Senior

Q
     “appeared to have lost his mind”. This was seemingly manifest in the way      Q

     that “[h]is investment style changed completely”. Lauw Senior became
R                                                                                  R
     “impulsive, irrational and would agree to buy almost any property that was

S    suggested to him”. This was especially true (according to Mr. Law) in         S

     relation to estate agents who had gained his trust and confidence such as
T                                                                                  T
     Mr. Frankie Lau, Ms. Emily Wong and Ms. Fiona Cheung.
U                                                                                  U


V                                                                                  V
由此

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                                        - 10 -                                   A


B    35.          Mr. Law says that the news that Lauw Senior was an easy        B

     target for estate agents “spread like wildfire in estate agency circles”.
C                                                                                C
     Numerous agents descended upon Lau Senior’s office with the result that
D    between March 2007 and September 2008 Lauw Senior through Treble            D

     and other companies had acquired “about 140 properties involving
E                                                                                E
     consideration in excess of HK$6.5 billion”.
F                                                                                F

     36.          Mr. Law adds that Lauw Senior would forget about purchases
G                                                                                G
     which he had agreed just a few hours before and would ask about contracts
H    which he had signed as if he did not know about their contents.             H

     Sometimes Lauw Senior “did not recognize us” and at other times he
I                                                                                I
     “spoke to us in Indonesian”.
J                                                                                J

     37.          In July 2007 Lauw Senior was finally persuaded to see a
K                                                                                K
     doctor.   He was found to be suffering from left chronic subdural
L                                                                                L
     haematoma.

M                                                                                M
     38.          On 31 July 2007 Lauw Senior underwent brain surgery.
N                                                                                N


O
     39.          Lauw Senior returned to work in August 2007.                   O


P                                                                                P
     40.          But Mr. Law says that Lauw Senior did not get better. His

Q
     mental aberrations continued. By way of example, Mr. Law refers to “an      Q

     unknown lady” showing up at Lauw Senior’s office in 2009. The lady
R                                                                                R
     claimed to have been offered a job by Lauw Senior, but the latter denied

S    having offered any job. Lauw Senior instead apparently asked someone at     S

     the office to pay the lady $20,000 to go away.
T                                                                                T


U                                                                                U


V                                                                                V
由此

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                                        - 11 -                                       A


B    41.           Mr. Law claims that Lauw Senior complained in 2010 that           B

     someone had “stolen steel from our warehouse”. When Mr. Law pointed
C                                                                                    C
     out that Lauw Senior had no warehouse in Hong Kong (as opposed to
D    Indonesia), the old man lost his temper and accused everyone in the office      D

     (including Mr. Law) of being “brain dead”.
E                                                                                    E


F    42.           Ms. Ho stated that “on one occasion” Lauw Senior seems to         F

     have mistaken his chauffeur for a taxi driver and offered a fare to the
G                                                                                    G
     chauffeur.
H                                                                                    H

     43.           Ms. Ho recalled that Ms. Emily Wong, Ms. Fiona Cheung and
I                                                                                    I
     Ms. Zoe Hui told her on 2 separate occasions that Lauw Senior was
J    forgetful. The estate agents apparently said this because (according to         J

     Ms. Ho) on one day Lauw Senior said “OK” to something and then forgot
K                                                                                    K
     about it later.
L                                                                                    L

     44.           Based in Indonesia, Lauw Junior was not much involved in          M
M
     the day-to-day affairs of the Purchasers. He occasionally visited his father
N                                                                                    N
     in Hong Kong, but only for a day or so.          For this reason, I regard

O
     Lauw Junior’s evidence as to his father’s mental condition as of minimal        O
     probative value.
P                                                                                    P


Q
     45.           Lauw Junior said that, although he knew his father’s memory       Q

     was bad following his fall and surgery, he did not appreciate the severity of
R                                                                                    R
     the problem until April 2009. At that time, he was “shocked to learn from

S    Mr. Law Wai that my father did not recover from his operations in 2007          S

     and that he has been suffering from severe dementia”.
T                                                                                    T


U                                                                                    U


V                                                                                    V
由此

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                                         - 12 -                                        A


B    46.          Despite himself being a director of Treble, De Monsa and             B

     some other companies run by Lauw Senior, it was not until April 2009 that
C                                                                                      C
     Lauw Junior initiated steps to remove his father from the board of those
D    companies. He took that action because of his father’s dementia.                  D


E                                                                                      E
     47.          Before April 2009 Lauw Junior did not interfere in the
F    companies’ management for two reasons despite believing that his father           F

     was behaving erratically. First, his father’s Hong Kong businesses were
G                                                                                      G
     his father’s own and, apart from signing formal documents from time to
H    time as a director, Lauw Junior was not involved with the same. Second,           H

     Lauw Junior felt that he had to show the deference which a son owes to a
I                                                                                      I
     father in traditional Chinese thinking.
J                                                                                      J


K    III. DISCUSSION                                                                   K


L    48.          Counsel have provided the Court with a consolidated list of          L

     the specific issues to be determined by this trial. In this section, I propose
M                                                                                      M
     to answer those questions.
N                                                                                      N

     A.    Fundamental Issues
O                                                                                      O
     A1. Whether Lau Senior was suffering from dementia when he signed the
P        sale and purchase agreements which are the subject matter of the              P
         3 actions?
Q                                                                                      Q
     49.          This was the key question which the psychiatric experts were
R    asked to answer.                                                                  R


S                                                                                      S
     50.          At common law, there is “no fixed standard of mental
T    capacity” required to enter into a contract. Instead, “[w]hat is required in      T

     relation to each particular matter or piece of business transacted, is that the
U                                                                                      U


V                                                                                      V
由此

A
                                         - 13 -                                      A


B    party in question should have an understanding of the general nature of         B

     what he is doing”. See Chitty on Contracts (30th ed.), para. 8-069.
C                                                                                    C


D    51.         I regard A1 as requiring me to decide whether, when entering        D

     into any particular contract for the purchase of property, Lauw Senior
E                                                                                    E
     understood the nature of the obligation being incurred. A1 asks me to
F    determine whether, by reason of dementia, Lauw Senior was incapable of          F

     appreciating the nature of a contract. An answer to A1 hinges on a finding
G                                                                                    G
     by me that at any material time Lauw Senior was so incapacitated mentally
H    as to be unable to understand the contractual obligation that he was            H

     apparently undertaking.
I                                                                                    I


J    52.         I stress that my task is to decide whether Lauw Senior was          J

     suffering from dementia during the material period (that is, October 2007
K                                                                                    K
     to July 2008). This involves a retrospective evaluation. Even on a premise
L                                                                                    L
     that Lauw Senior has been suffering from dementia since (say) April 2009,
     I must determine with regard to the available evidence (including the           M
M
     opinions of Prof. Mak and Dr. Tsang) whether on the balance of
N                                                                                    N
     probability Lauw Senior was demented when he entered into contracts on

O
     18 October 2007, 7 December 2007 and 8 January 2008 such that he could          O
     not understand what he was doing.
P                                                                                    P


Q
     53.         In answering A1, I bear in mind the insight of Kekewich J in        Q

     Birkin v. Wing (1890) 63 LT (NS) 80 (at 82) to the follow effect: “[I]f it is
R                                                                                    R
     a mere question of selling a particular property for a particular sum of

S    money, or purchasing a particular property for a particular sum of money        S

     on certain conditions, the [mental] capacity required is not, at least
T                                                                                    T
     necessarily, so great as that required in a testamentary disposition of any
U                                                                                    U


V                                                                                    V
由此

A
                                        - 14 -                                     A


B    complication”.    Not much is required by way of mental capacity to           B

     understand the binding nature of a contract.
C                                                                                  C


D    54.           Within the context of those preliminary observations, I now     D

     consider the criteria for diagnosing dementia. On that there is no real
E                                                                                  E
     dispute among the experts.
F                                                                                  F

     55.           The applicable criteria for diagnosing dementia are those in
G                                                                                  G
     DSM-IV-TR (“Diagnostic and Statistical Manual of Mental Disorders
H    Fourth Edition Text Revision”).                                               H


I                                                                                  I
     56.           DSM-IV-TR states (at p.148): “The essential feature of a
J    dementia is the development of multiple cognitive deficits that include       J

     memory impairment and at least one of the following cognitive
K                                                                                  K
     disturbances: aphasia, apraxia, agnosia, or a disturbance in executive
L    functioning”.    “Aphasia” is the “deterioration of language function”.       L

     “Apraxia” means an “impaired ability to execute motor activities despite      M
M
     intact motor abilities, sensory function, and comprehension of the required
                                                                                   N
N    task”. “Agnosia” is the “failure to recognise or identify objects despite

O
     intact sensory function”. Executive functioning involves “the ability to      O
     think abstractly and to plan, initiate, sequence, monitor, and stop complex
P                                                                                  P
     behaviour”.

Q                                                                                  Q

     57.           The information required by the experts to determine whether
R                                                                                  R
     Lauw Senior suffered from dementia between October 2007 and July 2008

S    included Lauw Senior’s medical records (such as reports, brain scans and      S

     lab tests), psychiatric records, and hospitalisation records. The witness
T                                                                                  T
     statements and discovery in the present case (including accounts of press
U                                                                                  U


V                                                                                  V
由此

A
                                        - 15 -                                      A


B    interviews with Lauw Senior and summaries of Lauw Senior’s property            B

     transactions) were also made available for consideration by the experts.
C                                                                                   C


D    58.           As for clinical observation, the experts had the opportunity     D

     jointly to interview Lauw Senior in July 2010. They could then take stock
E                                                                                   E
     of his general appearance and behaviour, his mode, his speech, his
F    perception, his orientation and memory, his cognitive functions, his ability   F

     to concentrate and his insight.
G                                                                                   G


H    59.           A battery of psychometric and clinical tests can be performed    H

     to detect dementia. For example, as possible tests, Prof. Mak identified
I                                                                                   I
     Mini-Mental State Examination, Wechsler Adult Intelligence Scale
J    (revised Cantonese version), Wechsler Memory Scale Revised, Chinese            J

     Dementia Rating Scale, Rey Complex Figure Test, Rey 15 Figure Test,
K                                                                                   K
     Force Choice Symptom Validity Test and TOMM.
L                                                                                   L

     60.           But Lauw Senior has only ever been subjected to 3 types of       M
M
     such tests.
N                                                                                   N


O
     61.           Dr. Chiu Siu Ning (Lauw Senior’s treating psychiatrist)          O
     administered a Mini-Mental State Examination (Chinese version) (MMSE-
P                                                                                   P
     C) in April 2009. Lauw Senior scored 16/30 (indicating severe cognitive

Q
     impairment).                                                                   Q


R                                                                                   R
     62.           Dr. Tsang also administered the MMSE-C on Lauw Senior.

S    She obtained a result of 19/30, indicating the presence of cognitive           S

     impairment.
T                                                                                   T


U                                                                                   U


V                                                                                   V
由此

A
                                        - 16 -                                        A


B    63.          In April 2009, Dr. Chiu performed the Clock Drawing Test            B

     (CDT) on Lauw Senior. Lauw Senior scored 2, indicating a significant
C                                                                                     C
     degree of cognitive impairment.
D                                                                                     D

     64.          Lauw Senior scored 9 (moderately abnormal to severely
E                                                                                     E
     abnormal range) when he took the CDT as administered by Dr. Tsang.
F                                                                                     F

     65.          Ms.   Emma     Wong     (a     clinical   psychologist)   further
G                                                                                     G
     administered the MMSE on Lauw Senior in April 2009. She found a score
H    of 23/30. She commented: “He performed relatively poor on items tapping          H

     his orientation to time, place, attention and memory especially on verbal
I                                                                                     I
     recall.” She concluded that “[i]n view of [his] premorbid functioning, his
J    score was worthy for further evaluation of cognitive impairment for              J

     dementia”.
K                                                                                     K


L                                                                                     L
     66.          Ms. Wong also tried the Chinese Dementia Rating Scale
     (CDRS). Lauw Senior scored 95/114. That (according to Ms. Wong) was              M
M
     “significantly below the cut-off score for diagnosing dementia”.         This
                                                                                      N
N    suggested to Ms. Wong that Lauw Senior’s “overall cognitive functioning

O
     was within the demented range”.                                                  O


P                                                                                     P
     67.          Neither Prof. Mak nor Dr. Tsang asked for more psychometric

Q
     tests to be conducted on Lauw Senior. Both were satisfied that the totality      Q

     of materials before them was enough for them to take a view as to
R                                                                                     R
     Lauw Senior’s state of mind between October 2007 and July 2008.

S                                                                                     S

     68.          Dr. Tsang and Prof. Mak both ruled out the possibility that
T                                                                                     T
     Lauw Senior was suffering from Alzheimer’s disease at the material time.
U                                                                                     U


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由此

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                                       - 17 -                                      A


B    69.         But they took diametrically opposed views as to whether he        B

     had dementia over the same period.
C                                                                                  C


D    70.         Dr. Tsang was adamant that Lauw Senior was demented at the        D

     material time. Her diagnosis was one of vascular dementia due to multiple
E                                                                                  E
     etiologies (causes), especially head trauma (Lauw Senior’s fall) and
F    chronic subdural haematoma. In coming to her conclusion, Dr. Tsang says       F

     that she relied on the totality of available evidence, including witness
G                                                                                  G
     statements filed in each action and medical records relating to
H    Lauw Senior’s condition produced by various doctors and specialists both      H

     before and after April 2009.
I                                                                                  I


J    71.         Prof. Mak, on the other hand, concluded that Lauw Senior was      J

     not suffering from dementia during the relevant period. In her view,
K                                                                                  K
     Lauw Senior’s forgetfulness “may be due to benign senile forgetfulness”.
L    So Lauw Senior’s “lapses in memory ... are a nuisance but never a             L

     problem”. In other words, Lauw Senior being over 80, there is nothing         M
M
     surprising about his being forgetful. His memory may not be good, but
N                                                                                  N
     that does not mean he is demented.

O                                                                                  O
     72.         As for vascular dementia, Prof. Mak ruled this out.        She
P                                                                                  P
     acknowledged MRI findings of 24 March 2009 showed changes in

Q
     Lauw Senior’s brain indicative of small vessel infarct. But that (Prof. Mak   Q

     pointed out) could not by itself be construed as a basis for a diagnosis of
R                                                                                  R
     vascular dementia. This is because abnormal changes in the brain (such as

S    infarcts) may be possible without the subject showing symptoms of             S

     dementia and vice versa. There is no previous MRI with which to compare
T                                                                                  T
     the MRI findings of March 2009. There is thus no way to tell when the
U    suspected infarcts occurred. There are previous CT scans. Although CT         U


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由此

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                                       - 18 -                                      A


B    scans are not as sensitive as MRI, for what they are worth the previous CT    B

     scans show no infarcts.
C                                                                                  C


D    73.         The examination of Lauw Senior by Prof. Mak and Dr. Tsang         D

     was conducted in Mandarin, Cantonese, and (occasionally) Fukienese.
E                                                                                  E
     Lauw Senior had no difficulty in switching from one language to another.
F                                                                                  F

     74.         More pertinently, Prof. Mak recorded in her report a detailed
G                                                                                  G
     exchange with Lauw Senior on the process of buying and selling of real
H    estate. Prof. Mak thought that Mr. Lauw’s dexterity in language switching     H

     and his coherent responses to her open-ended questions about the buying
I                                                                                  I
     and selling of property demonstrated that he was not suffering from
J    dementia.   The exchange on property transactions definitively showed         J

     (Prof. Mak contended) that even at the time of the interview on 29 July
K                                                                                  K
     2010 Lau Senior understood the nature of a contract.
L                                                                                  L

     75.         In light of her exchanges with Lauw Senior, Prof. Mak             M
M
     expressed the view that no further psychometric tests were needed. From
N                                                                                  N
     her own observations of Lauw Senior, she felt able to conclude that he

O
     “had been consciously underperforming on the MMSE, CDRS and the               O
     Clock Drawing Test” previously administered to him.
P                                                                                  P


Q
     76.         I prefer Prof. Mak’s views over those of Dr. Tsang.               Q


R                                                                                  R
     77.         Despite Dr. Tsang saying that she based her opinion on the

S    entirety of evidence, it seems to me (as submitted by the Vendors’            S

     respective counsel) that she placed significant weight on the statements of
T                                                                                  T
     Mr. Law Wai and Ms. Liza Ho. Those statements struck me as far too
U                                                                                  U


V                                                                                  V
由此

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                                         - 19 -                                       A


B    vague and unreliable to constitute cogent evidence of Lauw Senior’s state        B

     of mind at the material times.
C                                                                                     C


D    78.            Ms. Ho’s evidence was peripheral. She described isolated,         D

     random incidents as signs of Lauw Senior’s forgetfulness and mental
E                                                                                     E
     confusion. But she could not specify when such incidents (including Lauw
F    Senior apparently treating his chauffeur as a taxi driver) took place.           F


G                                                                                     G
     79.            Nor is it possible to attach weight on Ms. Ho’s evidence
H    without any idea of the context in which alleged remarks were made.              H


I                                                                                     I
     80.            For example, Ms. Ho’s evidence as to what Ms. Emily Wong,
J    Ms. Fiona Cheung and Ms. Zoe Hui purportedly said about Lauw Senior’s            J

     forgetfulness is of no probative value. Rather than showing forgetfulness
K                                                                                     K
     on Lauw Senior’s part, the alleged remarks by the estate agents could,
L    depending on context, demonstrate canniness on Lauw Senior’s part. Thus,         L

     one day, he might have told the estate agents that he was interested in          M
M
     various properties in order to hear what they had to say in respect of the
N                                                                                     N
     same.       Whereas, on the next day, having decided not to buy those

O
     properties, he could have feigned not to recall his previous expression of       O
     interest.
P                                                                                     P


Q
     81.            Mr. Law’s evidence struck me as contradictory, speculative        Q

     and unreliable. Let me give examples.
R                                                                                     R


S    82.            On the one hand, Mr. Law confirmed that Lauw Senior made          S

     all final decisions relating to the sale and purchase of properties (including
T                                                                                     T
     whether De Monsa or some other company should bring an action in
U    connection with a given property transaction). On the other hand, Mr. Law        U


V                                                                                     V
由此

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                                        - 20 -                                     A


B    maintained that Lauw Senior could not understand simple property              B

     transactions. But the fact that Lauw Senior appears to have known how to
C                                                                                  C
     drive hard bargains, make occasional handsome profits, and deal with
D    solicitors and estate agents indicates to me that he was capable of           D

     understanding the nature of a contract at the material times.
E                                                                                  E


F    83.            Mr. Law made much of Lauw Senior’s alleged sudden              F

     transformation from long-term investor before his fall to short-term
G                                                                                  G
     speculator afterwards. Lauw Senior is said to have behaved irrationally in
H    buying up large amounts of real estate over a short period of time.           H

     However, I am unable to deduce mental incapacity from the mere fact that
I                                                                                  I
     Lauw Senior may have succumbed to the temptations of chasing a bubble
J    and turning a quick profit. He may have been foolish in accumulating          J

     many properties, but that hardly indicates that he was demented.              K
K


L                                                                                  L
     84.            In relation to the mysterious lady who showed up at
     Lauw Senior’s offices, Mr. Law asserted that Lauw Senior had failed to        M
M
     recognise her or remember that Lauw Senior had promised her a job. But,
N                                                                                  N
     in cross-examination, Mr. Law accepted that he did not know whether or

O
     not Lauw Senior had actually offered the woman a job. Presumably,             O
     Mr. Law would have had no idea either whether, even if Lauw Senior had
P                                                                                  P
     promised the lady a job in the past for whatever reason, Lauw Senior had

Q
     changed his mind and decided to extricate himself from a delicate situation   Q

     by denying all knowledge of the woman or a job offer. Without more
R                                                                                  R
     information, this incident of the unknown lady hardly qualifies as evidence

S    of anything.                                                                  S


T                                                                                  T
     85.            Mr. Law asserted that Lauw Senior would often suddenly
U    speak out in Indonesian for no apparent reason. But Mr. Law admitted that     U


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由此

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                                         - 21 -                                     A


B    he had no knowledge of Indonesian and was only acquainted with a few           B

     words of Fukienese. Thus, it is perfectly possible that Lauw Senior was
C                                                                                   C
     muttering to himself or even swearing at Mr. Law in Lauw Senior’s first
D    languages (Indonesian or Fukienese) in the manner that sane people             D

     sometimes do when angry or upset. Without knowing what it was that
E                                                                                   E
     Lauw Senior was actually saying in whatever language he was speaking,
F    I do not see how I (or anyone else) can come to a conclusion that              F

     Lauw Senior had gone off his mind at the relevant time.
G                                                                                   G


H    86.           I think that, like Prof. Mak, Dr. Tsang ought to have (but did   H

     not) approach the evidence of Mr. Law and Ms. Ho with a healthy
I                                                                                   I
     scepticism.
J                                                                                   J

     87.           More troubling is the fact that Dr. Tsang did not seem to
K                                                                                   K
     attach any weight to the evidence from the estate agents involved (for
L                                                                                   L
     example, Mr. Frankie Lau, Ms. Emily Wong and Ms. Fiona Cheung).

M                                                                                   M
     88.           The gist of the estate agents’ evidence was that there was
                                                                                    N
N    nothing remarkable about Lauw Senior’s state of mind after he returned to

O
     work following brain surgery. He may have been forgetful, but he had           O
     been forgetful long before his fall and surgery.          The fact is that
P                                                                                   P
     Lauw Senior bought properties in such bulk that, not surprisingly, he could

Q
     not always remember details such as the unit number or address of the          Q

     properties which he had just bought.
R                                                                                   R


S    89.           When this last point was put in cross-examination, Dr. Tsang     S

     brushed aside the estate agents’ evidence of their dealings with
T                                                                                   T
     Lauw Senior with the cryptic remark that such dealings were more or less
U    the same as Lauw Senior’s exchanges with Prof. Mak and Dr. Tsang on            U


V                                                                                   V
由此

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                                        - 22 -                                      A


B    28 July 2010. But, not having been present when the estate agents dealt        B

     with Lauw Senior, how could Dr. Tsang have known or even assumed this?
C                                                                                   C


D    90.         Dr. Tsang discounted the evidential value of the exchange on       D

     buying and selling property which Prof. Mak recorded. When asked why,
E                                                                                   E
     she gave a pedantic and artificial gloss to some of Lauw Senior’s responses
F    as recorded by Prof. Mak.                                                      F


G                                                                                   G
     91.         To my mind, Dr. Tsang took evidence far too literally and
H    narrowly, without considering the same as a whole and in context. For          H

     instance, she noted that, during the exchange on buying and selling
I                                                                                   I
     property, Lauw Senior repeatedly asked whether one or other of the
J    psychiatrists wished to buy property from him. Dr. Tsang stressed that this    J

     was symptomatic of mental impairment. But I fail to see why that should
K                                                                                   K
     be the case. Lauw Senior could simply have been enjoying a joke at the
L                                                                                   L
     expense of the 2 experts.

M                                                                                   M
     92.         It is true that, despite being told that the 2 experts were
N                                                                                   N
     doctors, Lauw Senior referred to them from time to time as lawyers. But

O
     no one disputes that, being well over 80, Lauw Senior suffers from the         O
     benign senility that typically affects elder persons. That is a far cry from
P                                                                                   P
     saying, contrary to the obvious thrust of the exchange on buying and

Q
     selling properties recorded by Prof. Mak, that Lauw Senior did not             Q

     understand the nature of a contract.
R                                                                                   R


S    93.         More worrying was the impression that I obtained from              S

     Dr. Tsang’s cross-examination that she was acting more as an advocate of
T                                                                                   T
     the Purchasers’ cause as opposed to an independent expert.
U                                                                                   U


V                                                                                   V
由此

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                                         - 23 -                                      A


B    94.         For example, she appeared to me too prone to dismiss any            B

     significant feat of memory demonstrated by Lauw Senior during the joint
C                                                                                    C
     interview as little more than “procedural memory”. In other words,
D    according to Dr. Tsang, Lauw Senior’s short-term memory was                     D

     significantly impaired, but his ability to recollect routines (such as buying
E                                                                                    E
     and selling property and switching readily in casual conversation among
F    Cantonese, Mandarin and Fukienese) which he had repeatedly performed            F

     during his long life was relatively more intact.
G                                                                                    G


H    95.         This seemed to me to be largely assertion on Dr. Tsang’s part,      H

     made when placed in a difficult spot by counsel in the course of cross-
I                                                                                    I
     examination. I do not accept that Lauw’s Senior’s continuing language
J    dexterity and his ability to describe in detail what happens in a sale and      J

     purchase contract and what happens if one does not go through with the          K
K
     transaction, are purely aspects of long-term “procedural memory”. There
L                                                                                    L
     may be procedures involved. But plainly there are other mental functions
     involved beyond recalling an oft-repeated routine. Such functions would         M
M
     include the employment of logical reasoning in order to provide
N                                                                                    N
     appropriate responses to questions on specific aspects of the buying and

O
     selling process.                                                                O


P                                                                                    P
     96.         I note that Dr. Tsang also too casually dismissed, as mere

Q
     “procedural memory,” Lauw Senior’s ability to discriminate between              Q

     2 schools of Buddhism in the course of talking with Prof. Mak.
R                                                                                    R


S    97.         Both doctors referred to Lauw Senior’s clinical records.            S


T                                                                                    T


U                                                                                    U


V                                                                                    V
由此

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                                         - 24 -                                        A


B    98.          Following his operation, contemporaneous records suggest             B

     that Lauw Senior’s mental condition gradually improved prior to his return
C                                                                                      C
     to work.
D                                                                                      D

     99.          To my mind, a telling point is that, despite Lauw Senior
E                                                                                      E
     having been seen on numerous occasions in 2007 and 2008 by Dr. Norman
F    Chan and Dr. Clarence Leung, none of them saw fit to refer Lauw Senior            F

     to a psychiatrist to be treated for mental illness. Had Lauw Senior’s
G                                                                                      G
     dementia been manifest during the relevant period, it is inconceivable that
H    Dr. Chan and Dr. Leung would have done nothing. This commonsense                  H

     consideration strongly supports the estate agents’ evidence and undermines
I                                                                                      I
     Dr. Tsang’s analysis.
J                                                                                      J

     100.         I am further fortified in my views as to Lauw Senior’s state of
K                                                                                      K
     mind during the relevant period by the fact that, as late as the latter half of
L                                                                                      L
     2008, Lauw Junior himself considered that his father was mentally alert
     enough to give evidence to the Singapore Court in connection with a claim         M
M
     by Over & Over Ltd.
N                                                                                      N


O
     101.         Over & Over is a Hong Kong company of which Lauw Senior              O
     and Lauw Junior are the only shareholders and directors. Both appeared
P                                                                                      P
     before the Singapore Court, a medical certificate having been obtained by

Q
     Over & Over from Dr. Clarence Leung in support of Lauw Senior’s ability           Q

     to give evidence.
R                                                                                      R


S    102.         In the end, Woo Bih Li J decided that he could “not give much        S

     weight to [Lauw Senior’s] testimony since there was evidence that he had
T                                                                                      T
     a failing memory and could not remember much of what had happened in
U    the past” (Over & Over Ltd. v. Bonvests Holding Ltd. [2008] SGHC 226              U


V                                                                                      V
由此

A
                                           - 25 -                                  A


B    (at para.7). But such finding does not detract from the point that, being     B

     aware of Lauw Senior’s “failing memory” (presumably equivalent to what
C                                                                                  C
     Prof. Mak has termed “benign senility”), Lauw Junior and Dr. Leung
D    apparently thought him fit enough to understand the nature of a Court         D

     proceeding and give useful evidence in connection with the same.
E                                                                                  E


F    103.          Dr. Tsang attempted to make something out of evidence that      F

     Lauw Senior missed some appointments with his doctors and is recorded
G                                                                                  G
     as being unable to use an insulin pen. But I am unable to deduce anything
H    from the fact that, for whatever reason, Lauw Senior failed to attend on      H

     several occasions or seemed “unable” (or unwilling?) to use an insulin pen
I                                                                                  I
     on himself.
J                                                                                  J

     104.          In short, I find no cogent evidence that Lauw Senior in the
K                                                                                  K
     material period could not understand the nature of a contract or was of
L                                                                                  L
     unsound mind due to dementia. I reject the evidence of Mr. Law Wai and
     Ms. Liza Ho as having probative value insofar as Lauw Senior’s state of       M
M
     mind during the relevant period is concerned. I accept the evidence, in
N                                                                                  N
     particular, of Mr. Frankie Lau, Ms. Emily Wong and Ms. Fiona Cheung as

O
     to the absence of any signs of dementia (as opposed to mere forgetfulness     O
     due to old age) in Lauw Senior during the material time.
P                                                                                  P


Q
     105.          As between the experts, I prefer Prof. Mak’s diagnosis on the   Q

     matter as the more balanced on the available evidence. I reject Dr. Tsang’s
R                                                                                  R
     opinion as partisan and unreliable.

S                                                                                  S

     106.          I would answer “no” to A1.
T                                                                                  T


U                                                                                  U


V                                                                                  V
由此

A
                                         - 26 -                                      A


B    A2. If yes, whether the Vendors were aware of Lauw Senior’s incapacity          B
         by imputation of knowledge of a third party.
C                                                                                    C
     107.         In light of my answer to A1, this question does not arise.
D                                                                                    D

     108.         But I should briefly state my conclusions on a sub-issue
E                                                                                    E
     thrown up by A2. That sub-issue is as to whether Midland can be said to
F    have been acting as Probus’ or Multi Star’s agent and Centaline as Fortune      F

     Asset’s agent in effecting sales of the relevant properties.
G                                                                                    G


H                                                                                    H
     109.         In my view, Midland was acting at all material times as
     Probus’ agent. I reach this conclusion on the basis of the Estate Agency        I
I
     Agreements which Probus signed appointing Midland as its agent for the
J                                                                                    J
     marketing of the Bel-Air Properties.

K                                                                                    K
     110.         In the case of Fortune Asset, its Re-Amended Statement of
                                                                                     L
L
     Claim pleads that Centaline was “engaged ... to act as its agent in and

M
     about the sale of its ... interests in [Silver Fortune Plaza].” Accordingly,    M

     I conclude that Centaline was acting at all material times as Fortune
N                                                                                    N
     Asset’s agent.

O                                                                                    O

     111.         As for Multi Star, Mr. Sha Man Chun admitted in evidence
P                                                                                    P
     that “Midland ... acted as agent ... for the Plaintiff in respect of the Head
Q    Agreement and for the Plaintiff ... in respect of the Sub-sale Agreement”.      Q


R                                                                                    R
     A3.    In any event:-
S    3.1 (For Probus action) Whether the alleged knowledge of Midland at the         S

         time of the Provisional Agreements has any relevance given that those
T        agreements were superseded by the formal SP Agreement which were            T
         signed by Lauw Senior on 8 November 2007 without any involvement
U        of Midland.                                                                 U


V                                                                                    V
由此

A
                                            - 27 -                                      A


B    3.2 (For Fortune Asset action) Whether the alleged knowledge of                    B
         Centaline at the time of the Provisional Agreement on 7 December
C
         2007 has any relevance given that it was superseded by the Formal              C
         Agreement which was signed by Lauw Senior on 2 July 2008 for
         De Monsa without any involvement of Centaline.                                 D
D

     112.         Given my answer to A1, this issue ceases to be material.
E                                                                                       E


F    113.         Between October 2007 and January 2008, there was no                   F

     evidence of dementia in Lauw Senior which would have led the estate
G                                                                                       G
     agents or anyone else to conclude that Lauw Senior did not understand
H                                                                                       H
     what he was doing. Accordingly, the estate agents had no knowledge
     (whether actual or constructive) of Lauw Senior’s supposed dementia.               I
I
     There is no knowledge to be imputed to the Purchasers as the estate
                                                                                        J
J    agents’ principals. No question of alleged knowledge being superseded

K
     therefore arises.                                                                  K


L                                                                                       L
     B.     Issue of Contract Law

M    B3. If the answer to A1 is “yes” but the answer to A2 is “no,” whether the         M
         Purchasers can nevertheless argue that the Vendors cannot rely on
N        the principle in Imperial Loan Co. Ltd. v. Stone [1892] 1 QB 599 by            N
         virtue of the fact that the Purchasers are companies and not natural
O
         persons.                                                                       O

     114.         The answer to A1 being “no,” this issue does not arise as             P
P
     drafted.
Q                                                                                       Q


     115.         The principle in Imperial Loan was summarised by Lopes LJ             R
R
     thus (at 602):-
S                                                                                       S

                  “A contract made by a person of unsound mind is not voidable at
                                                                                        T
T                 that person’s option if the other party to the contract believed at
                  the time he made the contract that the person with whom he was
U                 dealing was of sound mind. In order to avoid a fair contract on       U


V                                                                                       V
由此

A
                                           - 28 -                                        A


B                the ground of insanity, the mental incapacity of the one must be        B
                 known to the other of the contracting parties. A defendant who
                 seeks to avoid a contract on the ground of his insanity, must
C                plead and prove, not merely his incapacity, but also the                C
                 plaintiff’s knowledge of that fact, and unless he proves these two
                 things he cannot succeed.”                                              D
D


E                                                                                        E
     116.        The Vendors argued on the basis of Imperial Loan that, even
     if Lauw Senior was demented when he signed the subject contracts, the               F
F
     Purchasers were not entitled to avoid the contracts.                  The Vendors
                                                                                         G
G
     submitted that, at the material times, Lauw’s mental incapacity had not

H
     been manifest to the estate agents dealing with him on behalf of the                H
     Vendors. Accordingly, the Purchasers (the Vendors said) cannot show that
I                                                                                        I
     the estate agents or their principals knew of Lauw Senior’s mental

J
     incapacity. At the time of contracting, the estate agents and their Vendor          J

     principals honestly believed that Lauw Senior was of sound mind and
K                                                                                        K
     knew what he was doing.
L                                                                                        L

     117.        In response, Mr. Charles Sussex SC (representing the
M                                                                                        M
     Purchasers) contended that Imperial Loan was not applicable at all.
N                                                                                        N

     118.        This is because that case concerned an agent of unsound mind
O                                                                                        O
     acting for a principal who was a natural person. In the present case, the
P    principal Purchasers are companies.          Companies can only act through         P

     agents. Mr. Sussex submitted that, in consequence, a correct analysis
Q                                                                                        Q
     depends on the application of the law of agency.
R                                                                                        R

     119.        Bowstead & Reynolds on Agency (19th ed) (at p.660) states:-
S                                                                                        S
                 “The actual authority of an agent, whether conferred by deed or
                 not and whether expressed to be irrevocable or not, is determined       T
T
                 by the ... supervening mental incapacity of either the principal or
                 the agent...”
U                                                                                        U


V                                                                                        V
由此

A
                                              - 29 -                                       A


B    120.          De Monsa’s articles of association provide (in Art.39) that             B

     “[t]he office of a Director shall ipso facto be vacated : ... (b) [i]f he be
C                                                                                          C
     found lunatic or becomes of unsound mind”.
D                                                                                          D

     121.          Trebles’ articles of association adopt Art.72(e) of Table A
E                                                                                          E
     (1975 Ed.).     Art.72(e) provides that “[t]he office of director shall be
F    vacated, if the director ... is found lunatic or becomes of unsound mind”.            F


G                                                                                          G
     122.          In Re Bodega Company Ltd. [1904] 1 Ch 276 (at 283)
H    Farwell J considered what happened upon an act being done or an event                 H

     occurring as stipulated in articles such as those just mentioned above. In
I                                                                                          I
     such case:-
J                                                                                          J
                   “The [director’s] office is vacated automatically, and if his co-
                   directors wish him still to act, he has to be re-elected in the usual
K                  way; or the casual vacancy has to be filled up under the article to     K
                   that effect. The directors have nothing whatever to do with the
                   vacation of the office by an event over which they have no
L                                                                                          L
                   control, and with which they have nothing to do except to satisfy
                   themselves that the fact has happened, if the fact has been put in
M                  issue.”                                                                 M


N                                                                                          N
     123.          Mr. Sussex’ general argument was that, pursuant to agency

O
     law and the Purchasers’ articles of association, Lauw Senior must be                  O

     treated as automatically ceasing to be director insofar as Lauw Senior is
P                                                                                          P
     held to have been of unsound mind during a relevant time. Lauw Senior’s
Q    actual authority to act on behalf of the Purchasers would have terminated             Q

     in consequence of his directorships being automatically vacated.
R                                                                                          R


S    124.          In entering into contracts with the Vendors or their estate             S

     agents after termination of his directorships, Lauw Senior (Mr. Sussex
T                                                                                          T
     continued) would have been acting outside the scope of his actual authority.
U    Subject to the Vendors being able to show apparent authority for                      U


V                                                                                          V
由此

A
                                        - 30 -                                     A


B    Lauw Senior to act as he did or some act of ratification by a person having   B

     actual authority to ratify, the contracts (Mr. Sussex concluded) must be
C                                                                                  C
     void (not just voidable) given Lauw Senior’s lack of authority.
D                                                                                  D

     125.        Although I have found Lauw Senior to have been of sound
E                                                                                  E
     mind when he entered into the material contracts, the applicability or
F    otherwise of Imperial Loan is not thereby rendered wholly moot.               F


G                                                                                  G
     126.        Plainly, because Lauw Senior was of sound mind when he
H    signed the contracts, there is no issue as to whether the estate agents       H

     dealing with him knew that he was of unsound mind. But there is one
I                                                                                  I
     aspect of Mr. Sussex agency argument which still needs to be considered.
J                                                                                  J

     127.        That aspect is this: Mr. Sussex stressed that, before
K                                                                                  K
     Lauw Senior’s brain operation on 31 July 2007, a consent form authorising
L                                                                                  L
     the operation had to be signed.        The doctors did not believe that
     Lauw Senior had the mental capacity to appreciate the risks involved in the   M
M
     operation and so he could not meaningfully sign the consent form. The
                                                                                   N
N    form had to be signed by someone else on Lauw Senior’s behalf.

O                                                                                  O
     128.        Mr. Sussex submitted that, given agency law and the
                                                                                   P
P
     application of the Purchasers’ articles, Lauw Senior must have ceased to be

Q
     a director of the Purchasers when he was believed to be mentally incapable    Q

     of consenting to his own operation.
R                                                                                  R


S    129.        Mr. Sussex observed that Lauw Senior was never formally re-       S

     instated as a director by any board or company resolution. As a result,
T                                                                                  T
     according to Mr. Sussex, whatever Lauw Senior’s mental state after his
U    operation, Lauw Senior still lacked actual authority to enter into the        U


V                                                                                  V
由此

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                                         - 31 -                                       A


B    relevant contracts from October 2007 onwards. Subject to evidence of             B

     apparent authority or ratification, the latter contracts (Mr. Sussex reasoned)
C                                                                                     C
     would be void.
D                                                                                     D

     130.          There is no dispute that a consent form was signed in the
E                                                                                     E
     manner which I have described. Thus, despite Lauw Senior possessing (as
F    I have found) sufficient mental capacity in the material period (October         F

     2007 to January 2008) to understand a contract, there remains an issue as
G                                                                                     G
     to the validity of Mr. Sussex’ agency argument. That argument is more
H    properly the subject of Issue C4 and so I shall deal with it below in answer     H

     to C4.
I                                                                                     I


J    C.       Issue of Agency Law                                                     J


K    C4. Whatever the answers to the foregoing questions:-                            K

     4.1 Whether Lauw Senior’s loss of mental capacity terminated, as a               L
L
         matter of law, his actual authority to enter into the agreements in
         question on behalf of the Purchasers?
M                                                                                     M
     4.2 If yes, whether Lauw Senior nevertheless continued to have actual
N        authority to enter into the agreements in question on behalf of the          N
         Purchasers?
O                                                                                     O
     4.3 Even if Lauw Senior did not have such actual authority, whether
         Lauw senior nevertheless had apparent authority to enter into the
P        agreements in question on behalf of the Purchasers?                          P


Q
     4.4 If Lauw Senior had such apparent authority:-                                 Q

            (1) Whether the Purchasers had in fact terminated Lauw Senior’s
R                                                                                     R
                apparent authority to enter into the agreements in question on
                their behalf?
S                                                                                     S
            (2) If so, whether the Purchasers ever notified the Vendors of the
T
                termination of Lauw Senior’s apparent authority?                      T


U                                                                                     U


V                                                                                     V
由此

A
                                         - 32 -                                      A


B    131.          Despite the principle Bowstead & Reynolds cited above, no         B

     case appears to have specifically considered the effect on an agency of an
C                                                                                    C
     agent becoming of unsound mind. As far as agents are concerned, the
D    principle stated in Bowstead & Reynolds only represents the editors’            D

     opinion on the likely legal consequence of an agent’s supervening mental
E                                                                                    E
     incapacity.
F                                                                                    F

     132.          In contrast, many cases deal with the supervening insanity of a
G                                                                                    G
     principal (for example, Drew v. Nunn (1879) 4 QBD 661, Yonge v.
H    Toynbee [1910] 1 KB 215, Gibbons v. Wright (1954) 91 CLR 423). Those            H

     cases hold that an agent’s mandate automatically terminates upon a
I                                                                                    I
     principal becoming of unsound mind.
J                                                                                    J

     133.          The Vendor’s counsel argued that I should not treat the
K                                                                                    K
     supervening mental incapacity of an agent as having the same result. The
L                                                                                    L
     situation of an agent becoming unsound in mind was not (counsel
     suggested) analogous to that where a principal loses mental capacity.           M
M


N                                                                                    N
     134.          Where a principal becomes of unsound mind, the principal can

O
     no longer appreciate the attributes of any transaction concluded by the         O
     agent on the principal’s behalf.        In those circumstances (counsel’s
P                                                                                    P
     argument proceeded), it is natural to treat the relationship of agency as

Q
     having been terminated by the principal’s insanity and any transactions         Q

     concluded by the agent as void in consequence of the principal’s lack of
R                                                                                    R
     understanding.     Indeed, in the absence of the appointment of some

S    guardian for the insane principal, it is unclear who can terminate the          S

     agency if it is not terminated automatically by operation of law.
T                                                                                    T


U                                                                                    U


V                                                                                    V
由此

A
                                         - 33 -                                      A


B    135.        But (counsel contended) where an agent becomes insane, the          B

     principal will still be of sound mind and able to appreciate the nature of a
C                                                                                    C
     transaction purportedly concluded by the agent on the principal’s behalf.
D    There is no reason to treat the agency as automatically avoided.                D


E                                                                                    E
     136.        As a matter of policy, where an agent becomes of unsound
F    mind, it would be fairer to place the burden of formally terminating the        F

     agency on the principal. Unless the principal officially terminates the
G                                                                                    G
     agency, the law should deem the same to continue (despite the agent’s
H    incapacity) so that innocent third parties dealing with the agent are not       H

     unfairly prejudiced by their contracts or transactions being treated as void.
I                                                                                    I


J    137.        This does not necessarily mean (counsel stressed) that the          J

     principal will be bound by any and every contract concluded by an insane
K                                                                                    K
     agent.   For example, where a third party deals with a lunatic agent
L                                                                                    L
     knowing the same to be insane, then Imperial Loan will apply.             The
     principal may in such situation treat the transaction concluded by the          M
M
     lunatic agent as voidable by the principal (as opposed to automatically
N                                                                                    N
     void). This possibility will prevent a third party from unscrupulously

O
     taking advantage of an obvious mental incapacity on the part of the agent.      O
     The third party would not, under Imperial Loan, be able to exploit an
P                                                                                    P
     innocent principal by entering into unfair contracts through an agent

Q
     known to be of unsound mind.                                                    Q


R                                                                                    R
     138.        In Akai Holdings Ltd. v. Kasikornbank FACV No. 16 of 2009,

S    8 November 2010 (at para.52), Lord Neuberger NPJ observed that “[i]n a          S

     commercial context, absent dishonesty or irrationality, a person should be
T                                                                                    T
     entitled to rely on what he is told”. This should be the case even if “this
U                                                                                    U


V                                                                                    V
由此

A
                                        - 34 -                                       A


B    may occasionally produce harsh results” since “it enables people engaged        B

     in business to know where they stand”.
C                                                                                    C


D    139.        Applying the spirit of Lord Neuberger’s dictum to the effect at     D

     law of an agent’s supervening mental incapacity, I prefer the submissions
E                                                                                    E
     of Vendors’ counsel over those of Mr. Sussex.
F                                                                                    F

     140.        In a commercial context, where a third party deals with an
G                                                                                    G
     agent in good faith, without any inkling that the agent has gone insane, the
H    third party should be able to treat the transaction as binding on the           H

     principal. The burden should be on the principal as the person for whose
I                                                                                    I
     benefit the agent was appointed formally to terminate the agency.          It
J    should prima facie be for the principal then, if the latter wishes to protect   J

     one’s self against the supervening mental illness of an agent, to monitor
K                                                                                    K
     the agent’s continuing mental capacity to act on the principal’s behalf.
L                                                                                    L

     141.        The principal should not be entitled to avoid an inconvenient       M
M
     contract by simply relying on the fact that an agent has gone insane. That
N                                                                                    N
     would place an intolerable and unfair burden on third parties dealing with

O
     the principal’s agent to monitor the agent’s mental capacity. Third parties     O
     should be able to rely instead on what an agent does and states, where the
P                                                                                    P
     latter’s acts and statements are within the actual authority conferred upon

Q
     the agent at the time of appointment.                                           Q


R                                                                                    R
     142.        Consequently, I do not think that Bowstead & Reynolds

S    reflects what should be the position in relation to the supervening mental      S

     incapacity of an agent.
T                                                                                    T


U                                                                                    U


V                                                                                    V
由此

A
                                       - 35 -                                    A


B    143.         I do not think that the Purchasers’ articles take the matter   B

     further.
C                                                                                C


D    144.         The suggestion is that, regardless of the common law on an     D

     agent’s unsoundness of mind, the articles provide for the automatic
E                                                                                E
     termination of Lauw Senior’s directorship and his mandate to act on the
F    Purchasers’ behalf.                                                         F


G                                                                                G
     145.         But what is the event said to trigger the application of the
H    articles?   It is Lauw Senior’s lack of capacity to consent to a brain      H

     operation. The purpose of that operation was to relieve the pressure on
I                                                                                I
     Lauw’s brain due to chronic subdural haematoma.        If successful, the
J    operation would mean that Lauw Senior would regain his previous mental      J

     capacity and understanding.    On my findings, that is what happened.
K                                                                                K
     Between the time when he returned to work following his operation and at
L                                                                                L
     least until January 2008, Lauw Senior on the evidence seemed back to
     normal as far as mental functioning was concerned. Any “unsoundness of      M
M
     mind” on Lauw Senior’s part due to the haematoma was only temporary.
N                                                                                N


O
     146.         The references in the Purchaser’s articles to a director       O
     becoming of unsound mind cannot be referring to mere temporary mental
P                                                                                P
     dysfunction due to conditions which may be relieved or removed. It would

Q
     not be conducive to the day-to-day operation of companies if directors      Q

     were deemed to have vacated their office every time that they suffered
R                                                                                R
     from some temporary, readily remediable, mental incapacity (including

S    momentary unconsciousness).                                                 S


T                                                                                T
     147.         The articles must only apply to a director becoming of
U    unsound mind in some permanent way. The articles would only apply           U


V                                                                                V
由此

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                                         - 36 -                                     A


B    where a permanent mental incapacity has occurred or been found. Such           B

     was not the situation when Lauw Senior was admitted to hospital. His
C                                                                                   C
     problem was cured and he resumed business as usual within a few months.
D    I am in those circumstances unable to hold that the articles resulted in       D

     Lauw Senior being deemed to have vacated his directorships.
E                                                                                   E


F    148.          Let me now assume that I am wrong in my conclusions as to        F

     the common law on an agent becoming of unsound mind and as to the true
G                                                                                   G
     construction of the Purchaser’s articles. Even then, the Purchasers would
H    still be in difficulty.                                                        H


I                                                                                   I
     149.          This is because Lauw Junior, the Purchasers’ only other
J    director, despite realising that there was something wrong about               J

     Lauw Senior’s mental capacity following Lauw Senior’s fall and operation,
K                                                                                   K
     allowed Lauw Senior to continue entering into property transactions on
L                                                                                   L
     behalf of the Purchasers.      In so permitting Lauw Senior to act, the
     Purchasers’ boards (acting through Lauw Junior) held Lauw Senior out to        M
M
     the world as having the authority to buy and sell property. This holding
N                                                                                   N
     out meant that Lauw Senior had both actual and apparent authority to

O
     transact business on behalf of the Purchasers.                                 O


P                                                                                   P
     150.          Actual authority arises because “the [Purchasers’] board[s] by

Q
     their conduct over many months had acquiesced in [Lauw Senior] acting as       Q

     their chief executive and committing [the purchasers] to contracts without
R                                                                                   R
     the necessity of sanction from the board”.         See Hely-Hutchison v.

S    Brayhead Ltd [1967] 1 QB 549 (at 584F).                                        S


T                                                                                   T
     151.          Apparent authority arises because the boards (acting through
U    Lauw Junior) “held out the alleged agent [Lauw Senior] as having the           U


V                                                                                   V
由此

A
                                           - 37 -                                          A


B    authority to bind the principal”. See Akai Holdings (at para.75). Note also           B

     the following dictum of Newnes JA in Auxil Pty Ltd. v. Terranova (2009)
C                                                                                          C
     260 ALR 164 (para. 176) (cited in Akai Holdings at para.45):-
                                                                                           D
D                “A representation creating an apparent authority of an agent may
                 be made in a number of ways but the most common form of
E                representation by a principal is by conduct, that is, by permitting       E
                 the agent to act in the management or conduct of the principal’s
                 business. By permitting the agent to act in the management or
F                conduct of the business, the principal thereby represents to              F
                 anyone dealing with the agent that he or she has authority to do
                 those acts on behalf of the company which an agent authorised to          G
G
                 do acts of the kind which he or she is in fact permitted to do
                 normally does in the ordinary course of such business.”
H                                                                                          H


I    152.        The representations of Lauw Senior’s authority were made,                 I

     among other persons, to the estate agents who dealt with Lauw Senior on
J                                                                                          J
     behalf of the Vendors. On that basis, the representations may be deemed
K    to have been made to the Vendors as the estate agents’ principals. But                K

     I think that the representations by the Purchasers’ boards can also be
L                                                                                          L
     regarded as being made directly to the world at large, including the
M    Vendors.                                                                              M


N                                                                                          N
     153.        Once a representation of apparent authority is established,
O    reliance on that representation will normally be presumed.                 See Akai   O

     Holdings (at para.75).
P                                                                                          P


Q    154.        There is no evidence that the representations of Lauw Senior’s            Q

     authority were terminated until April 2009 at the earliest when
R                                                                                          R
     Lauw Senior was persuaded to step down as director.
S                                                                                          S

     155.        In answer to C4, I therefore conclude that Lauw Senior had
T                                                                                          T
     actual and apparent authority to enter into the relevant contracts with the
U    Vendors.                                                                              U


V                                                                                          V
由此

A
                                         - 38 -                                      A


B    D.     Issue of Affirmation                                                     B


     D5. Whether the Purchasers, in any event, affirmed the subject                  C
C
         transactions so that the Purchasers cannot disavow the sale and
         purchase agreements in question?
D                                                                                    D

     156.         In light of my findings, D5 does not arise.
E                                                                                    E


F    157.         The Vendors argued that, even if Lauw Senior had been of           F

     unsound mind at the material time, his solicitors put forward Formal
G                                                                                    G
     Agreements for approval and signature by the Vendors. Such conduct by
H    the solicitors meant (the Vendors suggested) that the Purchasers had            H

     affirmed the transactions originally entered into by Lauw Senior.
I                                                                                    I


J    158.         The difficulty with the Vendors’ argument is that, on the          J

     evidence, the solicitors acted in accordance upon instructions from
K                                                                                    K
     Mr. Law who in turn was acting on instructions from Lauw Senior. An
L    agent acting outside the scope of actual authority cannot by that agent’s       L

     own representations clothe the unauthorised acts with apparent authority.       M
M
     See Akai Holdings (at paras. 63-71).
N                                                                                    N


O
     159.         Thus, if he had ceased to be a director or agent due to unsound    O
     mind, Lauw Senior could not validate any unauthorised acts by instructing
                                                                                     P
P
     third parties to behave as if his acts were valid. The solicitors’ conduct in

Q
     tendering the Formal Agreements to the Vendors for execution could not          Q

     then amount to affirmation of Lauw Senior’s acts by the Purchasers.
R                                                                                    R


S                                                                                    S


T                                                                                    T


U                                                                                    U


V                                                                                    V
由此

A
                                        - 39 -                                     A


B    E.      Issue of Relief                                                       B


     E6. What is the measure of damages for which the Purchasers are liable        C
C
         to the Vendors?
D                                                                                  D
     160.          Probus claims the differences between (1) the purchase prices

E    for the 2 lots of Bel-Air Properties under the agreements with Treble and     E

     (2) the agreed market values of the 2 lots at the time of breach
F                                                                                  F
     (9 December 2008). That differences amount to $7,778,773 and
G    $7,609,867 respectively.                                                      G


H                                                                                  H
     161.          Probus further claims $57,168.40 as wasted or additional
I    expenses incurred by reason of Treble’s breach.                               I


J                                                                                  J
     162.          Probus is prepared to give credit for the amounts of
K    $4,963,860 and $4,922,460 paid by Treble by way of deposit and part-          K

     payment.
L                                                                                  L


M    163.          Probus’ damages accordingly come to $5,559,488.40. In my        M

     view, the latter amount correctly represents the measure of Probus’ loss.
N                                                                                  N
     Interest at 1% over HK$ prime should run on that amount from date of
O    breach (9 December 2008) until judgment and thereafter at the judgment        O

     rate.
P                                                                                  P


Q    164.          Probus also seeks a declaration that Treble is liable to        Q

     indemnify it against damages which may be payable to Cyberport under
R                                                                                  R
     the Principal Agreements for the Bel-Air Properties. Since Cyberport has
S                                                                                  S
     not actually brought an action against Probus for compensation, I will stay
     Probus’ claim for an indemnity sine die with liberty to restore for           T
T
     directions in the event that Cyberport should commence an action in the
U                                                                                  U
     future.

V                                                                                  V
由此

A
                                        - 40 -                                       A


B    165.         Fortune Asset claims a net total of $34,345,453.                   B


C                                                                                    C
     166.         That total includes the difference in price between (1) the sale
D    price of the 11th to 15th floors of Silver Fortune Plaza and (2) the agreed     D

     market value of the same on the date of breach (31 December 2007). The
E                                                                                    E
     total also includes fees and other costs wasted as a result of De Monsa’
F    breach. The total, however, gives credit for De Monsa’s deposits and part       F

     payments.
G                                                                                    G


H    167.         In my view, Fortune Asset is entitled to the net total amount.     H

     Interest will run on the same from 31 December 2007 until judgment at 1%
I                                                                                    I
     over HK$ prime and thereafter at the judgment rate until payment.
J                                                                                    J

     168.         Multi Star claims $4,267,296, representing the difference
K                                                                                    K
     between the purchase price under the Provisional Agreement with
L                                                                                    L
     De Monsa and the purchase price under the Head Agreement with Winfull.
     The claim gives credit for the difference between the deposits paid by          M
M
     Multi Star to Winfull on the one hand and by De Monsa to Multi Star on
N                                                                                    N
     the other.

O                                                                                    O
     169.         Multi Star argues that it is entitled to the lost profit because
P                                                                                    P
     the Provisional Agreement made it clear that Multi Star was selling to

Q
     De Monsa as confirmor.        Accordingly, Multi Star says that it was          Q

     reasonably foreseeable at the time of contracting that a breach by
R                                                                                    R
     De Monsa would lead to Multi Star in turn breaching its contract with

S    Winfull.                                                                        S


T                                                                                    T
     170.         The normal measure of damages is the difference between the
U    sale price of a property and the value of the property at the time of breach.   U


V                                                                                    V
由此

A
                                        - 41 -                                     A


B    The problem is that Multi Star has not presented any evidence of the price    B

     of the Lippo Centre Office at the time of De Monsa’s breach. The normal
C                                                                                  C
     measure of damages can be departed from in appropriate circumstances.
D    But the Court must be satisfied that any damages awarded would have           D

     been within the reasonable contemplation of the parties at the time of
E                                                                                  E
     contracting as the likely consequences of a breach.
F                                                                                  F

     171.        Here the evidence was that the market was “crazy” in late
G                                                                                  G
     2007 and early 2008. Multi Star and De Monsa were both in the business
H    of buying and selling property for a profit at the time. De Monsa would       H

     have contemplated that, in the volatile market conditions then prevailing,
I                                                                                  I
     the Lippo Centre Office was likely being purchased by Multi Star to earn a
J    quick profit on re-sale to De Monsa.                                          J


K                                                                                  K
     172.        In that case, a default on De Monsa’s part could foreseeably
L                                                                                  L
     trigger a corresponding default on the part of Multi Star under the Head
     Agreement on commercial grounds.        This is because a falling market      M
M
     would have meant that it would be difficult (if not impossible) for Multi
N                                                                                  N
     Star to re-sell at a quick profit. Ironically, for what it is worth, Lauw

O
     Senior is quoted by an article in Eastweek Magazine dated 13 May 2009 as      O
     himself characterising default as a rational and likely option in a falling
P                                                                                  P
     market. Lauw Senior reportedly said (in translation): “I’m a businessman

Q
     through and through. When I see a drop in price, how can I still buy? For     Q

     example, when I buy it is $20,000 and if now it’s $10,000, surely I’ll
R                                                                                  R
     default.”

S                                                                                  S

     173.        In those circumstances, it seems to me that Multi Star’s lost
T                                                                                  T
     profit is an appropriate measure of its damages. There will be judgment
U    for Multi Star in the amount of $4,267,296. Interest on that amount will      U


V                                                                                  V
由此

A
                                         - 42 -                                     A


B    run at 1% over HK$ prime until judgment and thereafter at the judgment         B

     rate.
C                                                                                   C


D    174.         Multi Star asks for an indemnity against future claims by         D

     Winfull. There will be a stay of that part of Multi Star’s claim sine die
E                                                                                   E
     with liberty to restore for directions in the event that Winfull should
F    commence an action in the future.                                              F


G                                                                                   G
     F.      Issue of Vendors’ Claims against Estate Agents
H                                                                                   H
     F7. In the event that:-

I    7.1 Probus in unsuccessful in its claim against Treble, whether Midland        I
         is liable for breach of its terms of retainer/duty of care to Probus and
J        (if yes) what is the measure of damages?                                   J

     7.2 Fortune Asset is unsuccessful in its claim against De Monsa, whether
K                                                                                   K
         Centaline is liable for breach of its terms of retainer/duty of care to
         De Monsa and (if yes) what is the measure of damages?
L                                                                                   L

     175.         The questions do not arise.
M                                                                                   M


N    G.      Issue of Midland’s Counterclaim against Treble                         N


     G8. Whether Treble is liable to pay Midland agreed damages in the sum          O
O
         of $661,848 and $656,328 respectively under cl. 10(a) of the
         Provisional Agreements dated 18 October 2007?
P                                                                                   P

     176.         I would answer “yes” to G8.
Q                                                                                   Q


R    177.         Treble argues that at the time when Probus signed the             R

     Provisional Agreements the relevant sums had not been filled in cl.10(a).
S                                                                                   S
     Following Probus’ signature, the Provisional Agreements were sent to
T    Treble with the sums filled in cl.10(a). That (Treble argues) constituted an   T

     offer to vary the contract contained in the Provisional Agreements in
U                                                                                   U


V                                                                                   V
由此

A
                                         - 43 -                                    A


B    Midland’s favour. That offer to vary (Treble asserts) was never accepted      B

     and so cannot be binding.
C                                                                                  C


D    178.         I am not persuaded by the argument.                              D


E                                                                                  E
     179.         Treble (acting through Lauw Senior) authorised Midland to
F    approach Probus with an offer to buy the 2 lots of Bel-Air Properties.        F

     Under that authority, the sums in cl.10(a) were to be filled in by Midland
G                                                                                  G
     depending on the prices finally agreed with Probus for the Bel-Air
H    Properties. This is because the sums in cl.10(a) were to be calculated as     H

     percentages of the final agreed prices for the Bel-Air Properties.
I                                                                                  I


J    180.         When the prices were finally agreed with Probus, Midland         J

     acting on its prospective authority from Treble filled in cl.10(a) with the
K                                                                                  K
     appropriate amounts based on the final agreed prices for the Bel-Air
L                                                                                  L
     Properties. After that, not surprisingly, Treble did not take up the point
     that Midland had wrongly filled in cl.10(a). Treble did not even plead the    M
M
     allegation. It was not until belatedly at trial that Treble asserted that
N                                                                                  N
     Midland had no right to fill in cl.10(a).

O                                                                                  O

     IV.    CONCLUSION
P                                                                                  P

     181.         There will be judgment for Probus against Treble in the
Q                                                                                  Q
     amount of $5,559,488.40. Interest will run on that amount at 1% over
R    HK$ prime should run from 9 December 2008 until judgment and                  R

     thereafter at the judgment rate.
S                                                                                  S


T                                                                                  T


U                                                                                  U


V                                                                                  V
由此

A
                                        - 44 -                                     A


B    182.         Probus’ claim for an indemnity is stayed sine die with liberty   B

     to restore for directions in the event that Cyberport commences an action
C                                                                                  C
     in the future.
D                                                                                  D

     183.         Probus’ claim against Midland is dismissed.
E                                                                                  E


F    184.         There will be judgment for Fortune Asset against De Monsa        F

     for $34,345,453. Interest will run on that amount from 31 December 2007
G                                                                                  G
     until judgment at 1% over HK$ prime and thereafter at the judgment rate
H    until payment.                                                                H


I                                                                                  I
     185.         Fortune Asset’s claim against Centaline is dismissed.
J                                                                                  J

     186.         There will be judgment for Multi Star against De Monsa in the
K                                                                                  K
     amount of $4,267,296.      Interest on that amount will run at 1% over
L                                                                                  L
     HK$ prime until judgment and thereafter at the judgment rate.

M                                                                                  M
     187.         Multi Star’s claim for an indemnity will be stayed sine die
N                                                                                  N
     with liberty to restore for directions in the event that Winfull commences
     an action in the future.                                                      O
O


P                                                                                  P
     188.         There will be judgment for Midland against Treble in the

Q
     amounts of $661,848 and $656,328. Interest will run on those amounts          Q

     from the date of Midland’s Counterclaim (2 February 2010) until judgment
R                                                                                  R
     at 1% over HK$ prime and thereafter at the judgment rate until payment.

S                                                                                  S

     189.         The claims of Treble against Probus and Midland, of De
T                                                                                  T
     Monsa against Fortune Asset and Centaline, and of De Monsa against

U    Multi Star respectively are dismissed.                                        U


V                                                                                  V
由此

A
                                         - 45 -                                     A


B    190.         There will be liberty to apply.                                   B


C                                                                                   C
     191.         There will be an Order Nisi as follows:-
D                                                                                   D
            (1)   Probus is to have its costs as against Treble.

E           (2)   As against Probus, Midland is to have its costs of defending      E

                  itself against Probus’ claims.
F                                                                                   F

            (3)   As against Treble, Midland is to have the costs of its
G                                                                                   G
                  Counterclaim and the costs of defending itself against Treble’s

H                 claims.                                                           H

            (4)   Probus may claim from Treble such costs as it pays to
I                                                                                   I
                  Midland under (2).
J                                                                                   J
            (5)   Fortune Asset is to have its costs as against De Monsa.
K           (6)   As against Fortune Asset, Centaline is to have its costs of       K

                  defending itself against Fortune Asset’s claims.                  L
L

            (7)   As against De Monsa, Centaline is to have its costs of
M                                                                                   M
                  defending itself against De Monsa’s claims.
N                                                                                   N
            (8)   Fortune Asset may claim from De Monsa such costs as it pays

O
                  to Centaline under (6).                                           O

            (9)   Multi Star is to have its costs as against De Monsa.
P                                                                                   P
            (10) All costs are to be taxed on a party and party basis.
Q                                                                                   Q
            (11) There will be certificate for 2 counsel.
R                                                                                   R


S                                                                                   S


T                                                                                   T
                                                        (A. T. Reyes)
                                             Judge of the Court of First Instance
U                                                        High Court                 U


V                                                                                   V
由此

A
                                       - 46 -                                      A


B                                                                                  B
     In HCA 2723/2008:
C
     Ms. Yvonne Cheng, instructed by Messrs Mayer Brown JSM, for the               C
        Plaintiff by Original Action and 1st Defendant by Counterclaim
     Mr. Charles Sussex, SC and Mr. Jean-Paul Wou, instructed by Messrs K.C.       D
D
        Ho & Fong, for the 1st Defendant by Original Action and the Plaintiff by
        Counterclaim
E                                                                                  E
     Mr. Anderson Chow, SC and Mr. Anson M.K. Wong, instructed by
        Messrs Iu, Lai & Li, for the 2nd Defendant
F                                                                                  F
     In HCA167/2009:
G    Ms. Lisa Wong, SC and Ms Grace Chow, instructed by Messrs F. Zimmern          G
        & Co., for the Plaintiff by Original Action and 1st Defendant by
H
        Counterclaim                                                               H
     Mr. Charles Sussex, SC and Mr. Jean-Paul Wou, instructed by Messrs B.C.
        Chow & Co., for the Plaintiff by Counterclaim and the 1st Defendant by
I                                                                                  I
        Original Action
     Ms Shannon Leung, instructed by Messrs Cheung & Choy, for the
J       2nd Defendant                                                              J


K    HCA 1004/2009:                                                                K
     Mr. Samuel K.Y. Chan, instructed by Messrs Baker & McKenzie, for the
L     Plaintiff                                                                    L
     Mr. Charles Sussex, SC and Mr. Jean-Paul Wou, instructed by Messrs B.C.
      Chow & Co., for the Defendant                                                M
M


N                                                                                  N


O                                                                                  O


P                                                                                  P


Q                                                                                  Q


R                                                                                  R


S                                                                                  S


T                                                                                  T


U                                                                                  U


V                                                                                  V

				
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