WING WONG COMPANY LIMITED v. WU WAI KUEN ALBERT

1984, No, 2466

IN THE HIGH COURT OF JUSTICE

HONG KONG

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JUDGMENT

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1. The facts are not altogether complex I have had able assistance from both counsel, and the submissions advanced on the part of the defendant by Mr. Chan has evoked much academic and practical interest. In the result, the process of arriving at my decision has been thoroughly debated. In the end, I find myself pleasantly in a position to be able to deliver judgment extempore without having to further trouble Mr. Chang, counsel for the plaintiff. I shall in due course, reduce my oral judgment into writing with full reasons, and I propose only to give the main reasons in support, of the decision I have reached.

2. There are two similar cases before me today, Actions 2466/1984 and 2542/1984. The plaintiff is the same in each case. The defendants are different. The facts and the law involved are virtually identical. Mr. Chang, counsel for the plaintiff has chosen to proceed on the documents and particulars in the latter action, and I have been told, whatever decision that I have arrived at would be equally applicable to the former action.

3. There are three summonses, one for a declaration and consequential relief under Order 86, rule 1 and another summons for striking out the Defence and Counterclaim and for judgment to be entered consequently under Order 18, rule 19. They are both dated the 20th May, 1985, issued on the part of the plaintiff. There is a further summons filed on behalf of the defendant dated the 12th June 1985, under Order 20, rule 5 of the Rules of Supreme Court for certain proposed amendments.

4. I have had nothing but full cooperation of counsel. I have been told that the defendant's summons to amend can be regarded as redundant for the purposes of today's exercise. Naturally, I shall rely on counsel to propose an order to be made in respect to the defendant's summons.

5. As for the plaintiff's summonses, the facts can be briefly summarised as follows:

6. On the 19th May 1976, there was a Crown grant to certain grantees. I use the word "Crown grant" in a liberal sense. Nothing really turns on it. Special sondition (1) of the Crown grant required the grantees to apply for consent, inter alia, to sell or to assign the premises involved or any part thereof. Consent was granted to the grantees on the 4th December 1979. On the same day, the grantees entered into an Agreement for Sale and Purchase with the plaintiff. Certain conditions were imposed in the consent so given. I have been informed by counsel that none of these imposed conditions is a matter that requires my consideration.

7. Armed with the Agreement for Sale and Purchase from the grantees, the plaintiff entered into a Sale and Purchase Agreement of a portion of the premises involved with the defendant on. 2nd February 1980. On the 4th December 1980, the grantees sought consent to execute assignments for their premises comprising the property agreed to be sold to the. defendant by the plaintiff. On 22nd January 1982, consent to execute such assignments was granted.

8. After all was said and done, on 21st June 1982, Government duly certified full performance or observance of the positive obligations in the Crown grant without prejudice to the Crown's rights flowing from any breach or non-performance of the terms and conditions therein contained.

9. The plaintiff had not been wholly paid in accordance with the terms of the Agreement for Sale and Purchase entered into on the 2nd February 1980. Steps were accordingly taken, in the purported exercise of the plaintiff's right as vendor, to rescind the agreement. Suffice it for me to say, the agreement is claimed to have been duly rescinded.

10. I turn then to the submissions advanced on behalf of the defendant. It is not that I show less respect to the equally interesting contentions raised on behalf of the plaintiff by Mr. Chang, but the disposal of the Mr. Chan's submissions would, without more, bring these proceedings to a close.

11. On behalf of the defendant, it was submitted that the plaintiff had a duty as Vendor, under the Agreement for Sale and Purchase, to show a good title as opposed to also subsequently to verify it, at the time when notice to complete was served. As the plaintiff's purported exercise of its vendor's right to rescind was dependent upon the validity of such notice to complete, the crux of the matter, so maintained counsel for the defendant, falls to be decided in the plaintiff's ability to show as opposed to to verify, a good title at the material time. Thus, it was contended on behalf of the defendant that the plaintiff could not have served a valid notice to complete and could not therefore have lawfully rescinded as it had a defeasible title by reason of matters pleaded in paragraph 20(b) of the Defence which reads as follows :

"In contravention of Special Conditions 1(a) -............

 

Condition 1(a) in turn reads as follows :

 

"(1)(a) Subject to (b) hereof, the purchaser shall not except with the prior consent of the Secretary of the New Territories and in conformity with any conditions imposed by him (including the payment of such fee as may be required by him)

 

 

unless and until he shall have in all respects, observed and completed with these general and special conditions to the satisfaction of the Secretary and then only subject to the provisions of the Special Conditions No. (2) and (4) hereof. "

12. Mr. Chan, counsel for the defendant urged the Court to include the plaintiff as a successor in title of the grantees' within the meaning of "purchaser" in Special Condition (1). Counsel referred me to General Condition 13 and Special Condition (4)(c) and (e). It is to be observed that whilst "purchaser" was specifically made to include under General Condition 13, for General and Special Conditions, where the context so admits or requires, "his executors, administrators and assigns and in the case of a Corporation, its successors and assigns", the word "purchaser" in Special Condition (4)(c), as defined in paragraph (e), was to exclude the purchaser's assigns other than an assignee of the Lot as a whole. The inevitable conclusion is, in my view, that the word "purchaser" in different provisions of the Crown grant may carry or connote a different meaning. In Special Condition 4(c), a separate meaning was ascribed to it by paragraph (e).

13. Special Condition (1)(a)(i) did not enlarge or restrict the meaning of the word "purchaser", except arguably by General Condition 13 but only insofar as "assigns". The meaning of "purchaser" is narrow in scope and ambit, and it is well settled in the conveyancing field. Counsel for the defendant conceded that the very word itself in Special Condition (1) of the Crown grant is not per se susceptible of a meaning which would bring in the plaintiff who was not then an "assign", as a successor in title to the grantees. Counsel invited me to consider whether the word "purchaser" was ambiguous in the context it was found and whether the particular surrounding circumstances could be a possible aid to interpretation. Counsel reminded me constantly that this is not a full-fledged trial.

14. The defendant need merely show some bona fide issue to go to trial. However, the word "purchaser" in Special Condition (1) cannot be ambiguous. It does not include the purchaser of the "purchaser" in the Crown grant except arguably after an assignment. It is also sufficiently clear that the surrounding circumstances counsel sought so very heavily to rely upon, even if permissible, cannot have the effect of ascribing any extended meaning to the word "purchaser" as it is commonly understood.

15. Further, counsel was seeking to rely on the legislative intention for the protection of the public in property development. In short, counsel submitted: that the true meaning of the word "purchaser" in Special Condition (1) was intended to and must include all successors in title to the grantees otherwise the obvious legislative intention could not have been achieved. For various reasons, even, assuming such legislative intention to be obvious and the word obscure, I find it difficult to agree with counsel's submissions, one of which is that the Crown was certainly capable of overseeing the activities relating to the plaintiff's property in this case by introducing appropriate conditions upon the giving of consent to the grantees to sell.

16. Mr. Chang, counsel for the plaintiff, would have the Court take the position of the plaintiff to a even more advantageous position. I need not consider those submissions in the circumstances. Suffice it to say that on the basis that the plaintiff had to show as opposed to, to verify a good title at the time of its rescission, the very fact that there was no explicit written consent to sell, given to the plaintiff for the purposes of entering into the Agreement for Sale and Purchase dated the 2nd February 1980 would not otherwise turn the plaintiff's good title to the premises in question into a defeasible title. In my view, "purchaser" in the Crown grant clearly does not include the plaintiff as a successor in title to the grantees. There was no obligation on the part of the plaintiff to perform and observe Special Condition (1) which was binding exclusively vis-a-vis the Crown and the grantees for our present purpose. The plaintiff was not required to obtain consent to sell.

17. On this conclusion, the plaintiff must succeed. Even if I were wrong in my interpretation of the clear word "purchaser" and Special Condition (1) had included the plaintiff, any breach by the plaintiff in failing to obtain such governmental consent would have been a matter of minimal significance in the circumstances, particularly when the grantees had subsequently been acknowledged to have fully complied with the positive obligations of the Crown grant though without prejudice to any previous breaches. The nature of this submitted breach committed by a personality in the person of the plaintiff, in circumstances which have not been shown to have drawn Government objection or otherwise caused the slightest repercussion, rendered any risk of a possible Crown re-entry extremely remote, unreal and hence minimal, so much so that the plaintiff could not, in my view, be said to have had, in effect, a defeasible title. As for Mr. Chan's alternative submissions, I would not be prepared therefore, to hold in his favour, that in all the circumstances as known, in reality the submitted breach for not having obtained consent to sell sometime in 1980 was a matter which would adversely affect the otherwise good title of the plaintiff.

18. In the circumstances, the alternative argument advanced for the defendant, if it need be considered' also fails. Subject to what counsel have to say, I propose to dismiss the defendant's application to amend with costs to the plaintiff. I would accede to the plaintiff's two summonses in terms of paragraphs 1, 2, 3, 4 and 6 in respect of the application under Order 86, rule 1 and in terms of paragraph 1 and 2 of the plaintiff's summons under Order 18, rule 19.

(After submissions on costs)

19. An application has been made for the Court to certify the plaintiff's two summonses fit for two counsel. Much has been debated on facts and principles, and there is clear justification for me so to order in terms as requested by Mr. Sujanani. As for the defendant's summons to amend, that is dismissed with costs to the plaintiff and no further certification, I am told, is necessary.

20. As far as the three identical, I am told, summonses in action 2466/84, it would follow that the same orders would be made. Mr. Chan, counsel also for the defendant in the other action has indicated that he has no further submissions to make. In the circumstances, I make similar orders in respect to those other three summonses in action 2466/84 with the same certificate for two counsel in respect to the plaintiff's two summonses.