Lawyer sues for HK$18m over Hunghom Peninsula contract

PUBLISHED : Wednesday, 06 October, 2010, 12:00am
UPDATED : Wednesday, 06 October, 2010, 12:00am

A lawyer is suing a consortium of Sun Hung Kai Properties and New World Development for HK$18 million for reneging on a contract.

The law firm says it was hired to handle conveyancing transactions at the once controversial Hunghom Peninsula estate.

Calvin Ng Chun-kong, proprietor of law firm Ko and Co, claimed in the High Court yesterday that First Star Development, a joint venture of Sun Hung Kai and New World Development, unlawfully terminated his services in March 2004 to handle conveyancing for up to 2,470 flats of the harbourfront estate.

In 1999, the site of Hunghom Peninsula was leased for HK$583 million to First Star to build seven blocks of Home Ownership Scheme flats under the Private Sector Participation Scheme. First Star had hired Ng's firm to give free legal advice to the developer, while it would make profit from handling conveyancing for flat buyers.

However, the government halted construction and sale of subsidised home ownership flats indefinitely in November 2002. First Star terminated its contract with Ng's firm in 2004.

Jat Sew-tong SC, representing Ng, told the court yesterday that the termination of services was a breach of the agreement which deprived Ng of the opportunity to earn legal fees arising from the conveyancing transactions. Ng is claiming more than HK$18 million for work lost, plus interest and other costs.

Benjamin Yu SC, for First Star Development, argued that the contract was automatically discharged because of a change of government policy introduced amid property market slump. Yu said the developer was not liable to pay damages because the contract was automatically discharged because of 'frustration' - a legal ground that meant the change of government policy was an unexpected event which made the contract impossible to be performed.

Before Jat opened his case yesterday, Yu applied to the court to make amendment to its defence ground to include events up to March 2004, rather than, as previously stated, November 2002 when the government froze the scheme to provide subsidised flats for sale.

Jat objected to the application, saying it was prejudicial to the plaintiff. Deputy High Court Judge Ian Carlson will rule today whether he will allow the amendment.