Tang Man Sit v Capacious Investments Ltd (1995)
Whether a party injured by a breach of trust is entitled to claim both an account of profits and damages for being kept out of property which has been let in breach of an agreement to assign.
Defendants' appeal and plaintiffs's cross-appeal from the Hong Kong Court of Appeal's decision allowing in part the defendant's appeal against a High Court award of damages for breach of contract. The deceased had agreed to assign 16 houses to the plaintiff in 1982. No assignment was executed and in 1985 the deceased let some and progressively let all the houses. In 1991 the plaintiff sued claiming (1) specific performance of the agreement to assign the premises free of encumbrances, (2) a declaration that the plaintiffs were from 20/3/92 the equitable owners of the houses, (3) an account of profits and (4) damages for breach of trust. Summary judgment was obtained in those terms. An account was taken and in 1993 the defendants paid HK$1,807,774 in respect of the account of profits. The plaintiff then claimed damages under: Heads: (A) for loss of use and occupation comprising loss of market rental from January 1985 to January 1993 which, after deducting the HK$ 1,807, 774 and HK$189,984 paid in respect of current rental payments left a net amount of HK$7m; (B) HK$14m as damages in respect of the loss caused by the dimunition in value of the property due to (i) the wrongful use and occupation and (ii) the property having been wrongfully encumbered by the leases. The houses had been assigned to the defendants by the plaintiff but not with vacant possession. In the High Court damages were assessed at HK$16,937,197. The amount under Head (A) was assessed at HK$7,934,955 and under Head (B) at HK$ 11m deducting the amount of HK$1,997,758 already received by the plaintiff. On the defendants' appeal to the Hong Kong Court of Appeal, that court held that as the plaintiffs had already received HK$1,997.758 on account of profits made from letting the plaintiff could not thereafter claim damages for having been kept out of possession. The plaintiffs had made their elevation between two inconsistent remedies, but their election regarding Head (A) did not preclude it from pursuing its claim under Head B. Accordingly the court reduced the damages award to HK$11m. The defendants now appealed and the plaintiffs cross- appealed.
The Court of Appeal was in error in concluding that the plaintiff elected to take the remedy of an account of profits rather than damages. There was no error in the award of the High Court as there was no inconsistency between the awards of damages under Heads (A) and (B). Appeal dismissed and cross- appeal allowed.