ALLY TOWN INVESTMENT LIMITED v. WENG SENG HENG LAND INVESTMENT COMPANY LIMITED

1995, No. MP 2053

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. Both the applicant and the respondent have taken out originating summonses under section 12(1) of the Conveyancing and Property Ordinance (Cap. 219), but they both concern essentially the same questions arising out of an agreement of sale entered into by the parties on 26 July 1995.

2. On 19 January 1915, the property concerned was mortgaged to a company. In terms of this mortgage, the mortgagor covenanted to repay a sum of money on 11 January 1917, and to pay interest "in the meantime" in equal monthly payments. It was further covenanted that if the money remained unpaid "after the said [11 January 1917] it shall not be competent for the Mortgagor at any time thereafter to pay off or for the Mortgagee to call in the said sum . . . until the party so paying off or calling in the said sum . . . shall have given to the party respectively receiving or paying the said sum . . . at least one calendar month's previous notice in writing . . .". On 12 July 1927, the benefit of this mortgage was assigned to a Mr Barlow and a Mr Grayburn. On 19 December 1927, Mr Grayburn alone assigned the benefit of the mortgage to himself and a Mr Hynes. On the face of it, Mr Barlow retained his interest in the mortgage.

3. The purchaser wants to know what the vendor is going to do about this apparent interest of Mr Barlow's. Essentially, the vendor says - "Nothing, because Mr Barlow's interest, if any, has been extinguished by the operation of section 19 of the Limitation Ordinance (Cap. 347)".

4. Section 19(1) of the Limitation Ordinance (Cap. 347) says -

"No action shall be brought to recover any principal sum of money secured by a mortgage or other charge on property, or to recover proceeds of the sale of the land, after the expiration of 12 years from the date when the right to receive the money accrued".

5. In the case of interest, an action is barred after 6 years "from the date on which the interest became due".

6. The risk of Mr Barlow, or any successor in title, now emerging, nearly 70 years after the assignment to him, to claim an interest in the mortgage is remote in the extreme. The only reasonable assumption to make is that his interest was discharged many years ago.

7. When did Mr Barlow have a right to receive the money accrued to him under the mortgage? In terms of the mortgage, the right to receive that money accrued on 11 January 1917. If he did not receive the money then, he had a right to enforce a call on the money shortly afterwards. He had the right to enforce that call at any time from a month or so after 11 January 1917. The requirement of the month's notice was to render the call enforceable, but does not mean that he did not have the right to receive the money before this.

8. It follows that any action by Mr Barlow to recover money under the mortgage was time-barred long ago, and he has long since ceased to have any interest in the property sold.

9. Another problem raised by the purchaser is that certain notices of final awards under the Demolished Buildings (Redevelopment of Sites) Ordinance (Cap 337) are registered against the property. These awards were dated 1 March 1968, and were payable within 3 weeks. Again it is inconceivable that the people in whose favour these awards were made have been sitting around for over 27 years waiting for someone to pay them. It is an inescapable conclusion that the awards were settled a long time ago. The registered awards constitute a form of charge against the property, and they too are time-barred. The awards may be enforced as a judgment of the Supreme Court. On this basis also they are unenforceable.

10. A further requisition relates to the allegation that the signatures of one Li Kui Ling on an assent dated 12 May 1938 and an assignment dated 28 June 1939 differ. They certainly do differ; the earlier document is signed in the English style and the later with Chinese characters, but there is no doubt in my mind that they are both signed by the same person, and are perfectly regular. The address and description of the signatories are the same. In the document signed in English, the Chinese characters appearing after the name LI Kui Ling in the body of the document are the same as those used to sign the later document, although not in the same order. The person who signed the later document in Chinese characters as Li Kui Ling was first identified to the solicitor who witnessed the signature. There is no reason on earth to think other than that the signatories to these "ancient" documents produced from the proper custody were who they said they were, and, if they were who they said they were, they were the same person.

11. On 12 May 1938, Li Kui Ling executed the assent as sole executor of the will of Li Sham, and assented to the property "vesting in myself . . . as part of the estate of the said Li Sham . . . for all the estate vested in the said Li Sham at the time of his death.". On 28 June 1939, he executed the assignment of the property as executor and for the purposes of the administration of the estate. It is said in the requisition that, after the assent, he held the property as beneficial owner, but assigned only as executor. This is not the way that I construe the assent. It seems to me as clear as daylight that Li Kui Ling assented to the vesting of the property in himself as executor; he says the vesting is "as part of the estate". This assent was an act to assist in the administration of the estate; it demonstrated no intention whatsoever of vesting the property in Li Kui Ling beneficially, and did not achieve this. It follows that, when he assigned the property as executor, nothing was left vested in himself beneficially.

12. There is another requisition relating signatures concerning assignments dated 9 March 1923 and 17 August 1931. This was, of course, as with the documents referred to earlier, in the days before there were identity cards by which people could be readily identified. These documents were purportedly executed by Madam Lam Pui Hing. It is said that the signatures, which are in Chinese characters, are different. If they are, the differences are insignificant, and no more than one would expect with signatures written on separate occasions in different circumstances. Again, these documents have been produced from the proper custody, and there is no basis for any suspicion that they were executed by anyone other than the person who appears to have executed them.

13. Accordingly, I grant declarations that -

a) the respondent has shown good title to the property;

b) Arthur Howard Barlow, and his successors in title, have no interest in the property;

c) the charges arising by virtue of final awards are no longer subsisting;

d) the person who executed assignment memorial 162071 is the same person who executed assignment memorial 157648;

e) Li Kui Ling has not now, and never had, any beneficial interest in the property;

f) the person who executed assignment memorial 126723 is the same person who executed assignment memorial 83368.

14. I leave it to the parties to agree and submit the details of the order in a form appropriate for conveyancing purposes.

15. As agreed by the parties, there will be no order as to costs.