MAK SANG KAY and Another v. MAK SANG KAY

1997, No.MP660

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. The Plaintiffs are the Purchasers and the Defendant is the Vendor of the suit property known as Shop B1 (formerly known as Shop E) on Ground Floor of Man Fatt Mansion at No.30 Belcher's Street, Western District, Hong Kong.

2. By a requisition letter dated 18 December 1996, the Purchasers' solicitors made two requisitions as follows :-

"1. Since the Deed of Covenant Memorial No.485014 only provided that 6/65^th shares of the land was allotted to Shops A and B on ground floor of the Building, please provide us with evidence to show how 1/65th share of the land was allocated to the above property, Woo Turhan & Another v Taiwan Fuji Trading (HK) Ltd (1995) 2 HKC 481 and Lee Tak Chun v East Weal International Ltd. & Another (1994) 1 HKC 722 refer.

2. Pursuant to the said Deed of Covenant, the Building only has 2 shops on ground floor. However, the Assignment Memorial No.524483 provides in the plan that the Building consists of 8 shops on ground floor. Please clarify the discrepancy and let us have evidence to show the discrepancy does not amount to an illegal structure or/and alteration."

By a letter dated 30 January 1997, the Vendor's solicitors replied as follows :-

" We refer to your letter dated 30^th January 1997 and wish to reply to you that (i) you may have no doubt noted that sixty five shares in total have been allocated to all the units of Man Fatt Mansion pursuant to control card and the Deed of Mutual Covenant of the said building; (ii) you may have no doubt also noted that six (6) shares have been allocated to Shops A, B, C, D, E and F on Ground Floor of the said building and each unit hold one share; (iii) you may have also no doubt noted that Shop E that is the shop now known as Shop B1 have never been make any partitioning therefore one (1) share of the said sixty five (65) shares has been allocated to the said Shop B1 (formerly known as Shop E), in view of the fact as abovementioned, we trust no doubt will be arisen for the allocation of shares to the said Shop B1.

Once again, the particulars of the division of the shops on Ground of which Shop B1 forms part has been certified by Ng Yook Man, an Architect, therefore we do not share with your view that the property in question do fall within the meaning 'illegal structure or alteration'."

3. The Deed of Mutual Covenant was dated 23 April 1965. In the recital it was stated that :-

" There is now constructed on the said premises a building consisting of 7 blocks of 8 storeys exclusive of the ground floor containing 2 shops on the ground floor 56 upper floor flats and 3 roof spaces (hereinafter called 'the said Building)'."

4. However in the Assignment Memorial No.524483 ("the Assignment") dated 8 March 1996 with a floor plan annexed, Shop B1 was described as formerly Shop E on the ground floor in the Agreement for Sale and Purchase Memorial No.405246. One equal undivided 65th share was allotted to Shop B1, i.e. the suit property. The floor plan signed by the Architect was however dated 23 February 1965, i.e. before the aforesaid Deed of Mutual Covenant and the plan already set out eight units of shops on the ground floor, i.e. A1 to A6, B1 and B2.

5. It is therefore not known why the Deed of Mutual Covenant described the ground floor as divided into Shops A and B with six shares allotted to them. The control card concerning the allotment of shares to the ground floor can be summarised as follows :-

It is therefore quite clear that shop B1 formerly known as Shop E has always remained with 1/65^th shares and the location of the same has not been changed. The only change to it is the annotation from E to B1.

6. Further the Vendor relied on two orders of the Building Authority registered in the Land Office and a Letter of Compliance, also registered in the Land Office, in which all of them described Shop B1 as formerly known as Shop E and other units of the ground floor were described as A1 to A6, B1 and B2.

7. The Vendor relied on s.13(4) of the Conveyancing and Property Ordinance which provided as follows :

"13. Proof of title recitals

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(4) A recital, statement, and description of any fact, matter or party contained in any document of title, mortgage, declaration or power of attorney relating to any land and dated or made not less than 15 years before the contract of sale of that land shall, for the purposes of any question as to proof of title concerning the parties to that contract and unless the contrary is proved, be sufficient evidence of the truth of that recital, statement and description."

8. The effect of this s.13(4) is that "a recital, statement and description of any fact, matter or party" contained in the Assignment is sufficient evidence of the truth of that recital statement and description unless the contrary is proved.

9. The Assignment contains the following recital statement or description :-

"(i) that one equal undivided sixty-fifth part or share of and in All That portion hereinafter more particularly described of the said piece or parcel of ground was then [8/3/1996] vested in the Vendor;

(ii) that the said one equal undivided sixty-fifth part or share was described as that one equal undivided sixty-fifth part or share together with the full and exclusive right to the use occupation and enjoyment of Shop B1 on the Ground Floor;

(iii) that the said Shop B1 was pictorially described in the annexed floor plan as one of the 8 shops on the ground floor of Man Fatt Mansion;

(iv) that the said Shop B1 was formerly described as Shop E on the Ground Floor;

(v) that the Vendor was Man Fatt Land Investment Company Limited. (The Plaintiff should also know full well, from the DMC that Man Fatt Land Investment Company Limited was the developer of Man Fatt Mansion.)"

10. The issue is whether the Plaintiffs had proven the contrary that s.13(4) would not operate and such that other evidence of allocation of 1/65^th shares to Shop B1 is required. The only evidence to the contrary is that the Deed of Mutual Covenant stated that there were two shops on the ground floor, Shop A and Shop B, with a total of six shares allocated.

11. However the following points should be noted :-

(i) The Deed of Mutual Covenant was dated 23 April 1965 and that is prior to the Assignment on 8 March 1966.

(ii) There is no restriction in the Deed of Mutual Covenant restricting the developer's freedom to physically sub-divide Shops A and B into more shops.

(iii) There is no restriction in the Deed of Mutual Covenant restricting the developers freedom to sub-allocate shares to smaller units of shops on the ground floor after physical sub-division so long as the total number of shares for the ground floor shops remains at 6/65.

(iv) The available evidence from the control card is that the ground floor was at one stage divided into six shops. Then later, two of the six shops were further sub-divided into four shops making a final total of eight shops. The control card does not support an hypothesis that the ground floor was ever divided into two shops only.

(v) The plan annexed to the Assignment, which was subsequent to the Deed of Mutual Covenant but which formed a description which has to be presumed correct by virtue of s.13(4), evidences that as at 8 March 1966 the ground floor had already been divided into eight shops.

(vi) Further evidence showing that the ground floor was sub-divided into eight shops and that Shop B1 was allocated with 1/65 shares are discernable from the ownership list in the aforesaid two orders issued by the Building Authority and the Letter of Compliance.

12. Thus I accept the Defendant's submission that while the Deed of Mutual Covenant did cast doubt on the correctness of the statements of fact or description in the Assignment, it was however insufficient, in the light of other available evidence, to prove that the statements of fact in the said Assignment was incorrect. Thus the first requisition has already been satisfactorily answered.

13. In respect of the second requisition, it again arose as a result of the discrepancy between the Deed of Mutual Covenant and the plan annexed to the said Assignment in respect of the number of shops on the ground floor. The plan annexed to the said Assignment was dated 23 February 1965 by which time the ground floor had already been divided into eight shop units. The control card also shows that the ground floor has never been divided into Shop A and Shop B only. From the outset the ground floor was divided into six shops which was later divided into eight shops. In other words, there are sufficient pieces of evidence to prove that the description in the Deed of Mutual Covenant instead is wrong.

14. Further the two orders of the Building Authority both dated 31 December 1992 and the Letter of Compliance also described the ground floor unit as eight shops from Nos. A to A6, B1 and B2. It is therefore fanciful to suggest that the Building Authority would require the reinstatement of the ground floor if the division into eight shops involved illegal structures. Such a possibility is non-existent at all.

Conclusion

15. Accordingly the Plaintiffs' application for the declaration that no good title has been shown or the failure of the Vendor to answer the two requisitions and that the Defendant is in breach of the agreement to show a good title is hereby dismissed with costs to the Defendant.