By a provisional agreement for sale and purchase, the purchaser agreed to buy from the vendor the ground floor of Block C, Nos. 301, 301A-C, Prince Edward Road West, Kowloon for $18 million.An initial deposit of $500,000 was paid pursuant to Clause 2(a). By clause 2(c) a further deposit of $3.1 million was to be paid “upon signing of the Formal Agreement for Sale and Purchase on or before 13 January 2010”. Clause 7, as translated from the Chinese version[1], provides as follows: Should the vendor after receiving the deposit (deposits) paid fail to complete the sale in the manner contained in the agreement, the vendor “apart from refunding the total amount of the deposit paid, (shall) compensate the purchaser by a payment of an equivalent amount”. On 12 January 2010, the vendor’s solicitors sent to the purchaser’s solicitors a re-engrossed formal agreement in duplicate and asked that it be duly signed by the purchaser and attested, and returned together with the purchaser’s solicitors’ cheque for $3.1 million on or before 5:00 pm on 13 January 2010. On 13 January 2010, the purchaser’s solicitors forwarded the formal agreement duly signed and attested, together with a cheque for $3.1 million drawn in favour of the vendor’s solicitors “as stakeholder being further deposit and part payment of purchase money…” The cheque for $3.1 million was tendered on condition that the vendor would sign the formal agreement and its solicitors would return it to the purchaser’s solicitors within 3 working days. The cheque for $3.1 million in the vendor’s solicitors’ hands was cashed on 14 January 2010. However, no formal agreement bearing the attested signature of the vendor was returned. On 10 February 2010, the vendor’s solicitors sought to rely on clause 7 of the provisional agreement to escape further performance by enclosing (1) a refund cheque for $3.1 million and (2) a cheque for 1 million. The purchaser brought proceedings seeking an order for specific performance. The crucial question is whether the further deposit of $3.1 million was paid to and accepted by the vendor. If it was, then the vendor could only escape from performance if it paid the amount of the further deposit (and the initial deposit) in compensation in terms of clause 7. The Court of First Instance made an order for specific performance as it found that the further deposit was paid to and accepted by the vendor. The Court of Appeal discharged the Court of First Instance’s order for specific performance as it found that the further deposit had not been paid. The Court of Final Appeal restored the Court of First Instance’s order for specific performance. It held that (a) the cheque for $3.1 million was tendered conditionally to the vendor’s solicitors upon the understanding that they would not cash it unless they were able to return the signed agreement to the purchaser’s solicitors within 3 working days and (b) the further deposit was paid to and received by the vendor through its agents the solicitors at the point when the cheque was cleared and credited to the solicitors’ account. Hence, to simply refund the deposit was not enough. [1] The parties had agreed that in case of ambiguity the Chinese version should prevail.