WELL COINS DEVELOPMENT LTD. v. KING'S FORTUNE INTERNATIONAL INVESTMENT LTD.

HCMP 554/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 554 OF 2002

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J U D G M E N T

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1. This is a vendor and purchaser summons. It arises out of an agreement for sale and purchase dated 19 November 2001, between the plaintiff/vendor and the defendant/purchaser, of a property comprising parcels of land at Tuen Mun, New Territories, and registered in the Land Registry as Lot No. 2019 in DD 132 and the extension thereto, and subsection 20 of the remaining portion of Lot No 1724 in DD 132. The agreement included the usual clause as to title commencing with the Government Lease or Grant or Conditions affecting the property, and showing and giving good title, in accordance with section 13 of the Conveyancing and Property Ordinance, Cap. 219. The title deeds were delivered to the defendant's solicitors on the same day, completion to be on or before 10 December 2001, although this was later postponed.

2. By a letter dated 23 November 2001 the defendant's solicitors requested a certified copy of the Block Government Lease under which subsection 20 of the remaining portion of Lot No. 1724 in DD 132 is held. However, a search of the Land Register for the remaining portion of this lot showed that the "original grant, lease term, its date of commencement & rent cannot be traced in the Land Registry". Indeed, it is apparent from other documents that this, no doubt with many others, was lost or destroyed during the Japanese occupation during the war. A certified copy of the Block Crown Lease for DD 132 was supplied, but the pages of the schedule which might have included Lot 1724 were missing. The defendant's solicitors accordingly maintained that the plaintiff had failed to show good title. The plaintiff's solicitors subsequently supplied other documents as secondary evidence of the relevant lease, which may be listed as: (1) a deed of surrender, upon resumption, of another part of Lot 1724 dated 5 March 1982; (2) a number of minutes in a government file passing between various government officers in 1963 referring to the land; (3) and various Government Notices.

3. It was at one time considered that the wording of section 13 of the ordinance made it mandatory to produce the original of the Government Lease, the relevant section reading as follows:

(1) Unless the contrary intention is expressed, a purchaser of land shall be entitled to require from the vendor, as proof of title to that land, only production of the Government lease relating to the land sold and .....

However, it is clear from the judgment of Godfrey JA in Wu Wing Kuen & Others v. Leung Kwai Lin & Another Civil Appeal Nos 240 and 273 of 1999, affirmed by the Court of Final Appeal, although allowing the appeal on other grounds, that the section made no change in the law as to the quality of the evidence which a purchaser of land is entitled to require from the vendor as proof of title. He went on to make clear further that the purchaser must accept sufficient secondary evidence when primary evidence is not available, following the dictum of Parker J in Halkett v. Earl of Dudley [1907] 1 Ch 590.

4. There is no dispute here that the evidence shows that the original of the Crown Lease cannot now be found, so the only question for me is the quality of the secondary evidence submitted, which consists of the documents set out above.

5. The plaintiff's case as to the deed of surrender is simple. As this refers to Lot No. 1724, albeit another subsection of the remaining portion, there must have been a demise of the lot, for without it no surrender would have been necessary or could have been executed. This is certainly persuasive and goes some way to the proof the plaintiff requires to make, but by itself would be far from satisfactory.

6. Of far more probative value are the minutes in the government file of the Buildings and Lands Department in 1963 relating to Lot No. 1724 passing between the District Commissioner, New Territories, the Colonial Secretary, and the Registrar General. Although the correspondence concerns what remedial action is to be taken in respect of a deficiency found upon survey of the actual land area of the lot, it can be seen from these that the government accepted, through its very senior officers: (i) that the lot was sold by auction in 1915; (ii) that it is held subject to Government Notices in the Government Gazette No. 365 of 1906 as amended by G.N. No. 697 of 1909 and G.N. No. 278 of 1911, which provide for general conditions of sale of government land and the terms of the Crown Lease; (iii) that it was subsequently divided into 40 odd sections, of which the land in question here is undoubtedly one. This seems to me to be clear and cogent evidence that there was a demise of the land in question here and that the Crown Lease contained the terms as set out in G.N. No. 365 of 1906. It is true that there is no evidence of whether any of the special conditions listed in G.N. Nos 697 and 278 of 1909 and 1911 respectively were included. But as the government itself has no knowledge of this either, it can safely be assumed that none can now affect the land.

7. A purchaser is entitled to the best evidence of title available, which in the normal course of events would be the original of any document. Where that is not available, and there is, as here, good reason of that non-availability, then the secondary evidence becomes the best evidence, provided that the secondary evidence does provide proof that the document existed and of its contents. I am satisfied that the documentary evidence supplied by the purchaser here, even relying as it does partly on inference and opinion, is sufficiently clear and cogent evidence that a Crown Lease was granted in respect of this land, and of the contents of it.

8. I would add that, in any case such as this, one consideration is the danger to the purchaser of any defect appearing which may affect his title in the future. On the evidence here, the possibility of the government now or in the future denying the title to this land is so remote that it may be disregarded.

9. For these reasons I am satisfied that the plaintiff is entitled to the declaration it seeks that the title to the property is good and that the plaintiff has proved good title. I make no order as to costs at the request of counsel for both parties.