IN THE SUPREME COURT OF HONG KONG
CIVIL APPEAL NO. 33 OF 1971
(On appeal from Original Jurisdiction Action No.518 of 1970)
Coram: Full Court (Blair-Kerr, S.P.J., Huggins and Leonard, JJ.)
1. I agree with the judgment of the learned President insofar as the first and second grounds of appeal are concerned. As to the thirdground of appeal had I decided that condition 2 of the contract did cover the situation in which the appellant found himself I shouldhave been reluctant to hold that he was obliged, in mitigation of the damages he suffered by reason of the respondent’s default,to refuse to pay his sub-purchaser. My reluctance would stem not from acceptance of the argument that he was justified in payingdamages to maintain good business relations but because of the difficulty in construing condition 2.
2. I should not have considered it equitable to hold the appellant liable to rely, in a dispute with his sub-purchaser, on a clausepresenting such difficulties of construction. Knowledge that he might be required to rely on the condition would have placed himon the horns of a dilemma. He could have refused to pay his sub-purchaser in which case he might have been held liable to pay himboth damages and costs. When he sought to recover those damages and costs from the appellant he might have been asked why he incurredthose costs in fruitlessly defending the action by his sub-purchaser. I do not consider that an innocent party should be obligedto make such a choice.
3. However, this particular aspect of the third ground of appeal was not the subject of argument and since the appellant is successfulon the second ground of appeal it is not necessary to pronounce on that third ground.
Martin Lee (Johnson, Stokes & Master) for Appellant.
Charles Ching (Mak & Co.) for Respondent.