KAN CHUNG SUN v. CHAN WAH CHUN

1995 No. M.P. 2212

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. This is a Vendor and Purchaser Summons taken out under Section 12 of the Conveyancing and Property Ordinance, Cap. 219 by the Plaintiff Vendor for a declaration that a good title to the property in question had been shown.

2. Kan Fook Fu, the deceased was the registered owner of the premises in question, namely Unit A on the Ground Floor of the building erected on the Remaining Portion of Lot No. 142 in Lantau Island Demarcation District No. 302 (the said premises).

3. By an agreement in writing dated 7th April 1995, the Plaintiff as the administrator of the estate of the deceased, agreed to sell the said premises to the Defendant Purchaser, Chan Wah Chun (the Purchaser) for the sum of $500,000. Completion was originally scheduled to take place on or before 30th June 1995 which was subsequently postponed to 30th September 1995.

4. After the title deeds and other documents relating to the said premises were delivered to the Purchaser's solicitors, the Purchaser's solicitors raised a number of requisitions.

5. For the purpose of the present proceeding, the only relevant matters related to a Vesting Order dated 19th February 1937 and a mortgage memorial dated 3rd October 1932.

6. The mortgage memorial in question was executed by Chan Fat and Chan Ng Shi, the co-trustee of Chan Sai Kau who was the predecessor of the deceased in favour of Wai Sai, the Manager of Hop Shing Tong for the consideration of $600 repayable on 3rd October 1934.

7. In the said mortgage memorial against the particulars of encumbrances, it was entered "Notice No. 195/32". Perhaps it was not difficult to understand, attempts to obtain a copy of the said Notice No. 195/32 had been unsuccessful and it was not able to ascertain the nature of such notice at all.

8. It was the Purchaser's position that as the Notice No. 195/32 was entered in the said mortgage memorial as an encumbrances, the Vendor was obliged to clear such encumbrances in order to show a good title.

9. It was not in dispute that Notice No. 195/32 was mentioned only in the said mortgage memorial and not any other land registration documents. If it was intended to be an encumbrances against the said premises, it would have been registered in the land registration documents to be valid. After all, the mortgage memorial was only a contractual document governing the interests of the parties to the contract.

10. I tend to agree with the observation of the Purchaser's solicitors that in all probability, Notice No. 195/32 was a notice under Section 27 of the NT Regulation Ordinance to empower the Manager of the Hop Shing Tong to deal with such interest in the said premises as the Tong had been vested by virtue of the mortgage in question.

11. In any event, the mortgage in question had been discharged in February 1937 as registered in the land registration documents. Whatever interest or obligation associating with such mortgage must also be extinguished with the discharge.

12. In my view, the Notice No. 195/32 should be completely ignored for all intent and purposes.

13. Mr. Lee on behalf of the Purchaser argued that the Vesting Order by which the deceased became the registered owner of the said premises did not fall within the definition of assignment under the Conveyancing and Property Ordinance and it could not form the intermediate root of title for the said premises. The suggestion was that in the absence of a copy of the Vesting Order itself, one could not be sure that the Vesting Order in fact dealt with the whole estate and interest in the said premises.

14. Assignment under the Conveyancing and Property Ordinance was defined as ...... (f) every other assurance or conveyance of land by any instrument. Section 20 of the New Territories Ordinance provided that "the Land Officer shall have power to decide in a summary way all questions and disputes in connection with, or in anywise arising out of, or regarding any land ......" and Section 23 clearly provided that "every judgment or order of the Land Officer and every entry thereof in the land register shall be conclusive for all purpose.."

15. The deceased had been registered as the owner of the said premises by way of a Vesting Order in 1937. In my view, such registration in the land register clearly constituted an assignment in favour of the deceased and formed the intermediate root of title for the said premises.

16. I am also of the view that the suggestion that despite the registration of the deceased as the legal owner of the said premises in the land register by way of the Vesting Order, somehow, the Vesting Order might not deal with the entire estate and interest and that someone with beneficial interest over the said premises might be hiding and appear to claim interest over the said premises far-fetched.

17. I cannot ignore that the Vesting Order in question was made in 1937 in favour of the deceased who died in 1953. If there was anyone who claimed to have any interest over the said premises, one would have expected him to wonder, from time to time, what was happening to the property in which he claimed to have such an interest. If he had taken the most basic steps to safe guard his alleged interest, he would have found out that the "trustee" died in 1953 and he would have taken steps to assert his "interest". If he had done so, we would have heard about it if he had not secured his "interest" in the said premises.

18. In my view, there was no conceivable probability for anyone to make any successful claim to be beneficially interested or otherwise in the said premises against the deceased.

19. In any event, a lapse of almost 60 years when the deceased had been registered as the owner of the said premises free from any alleged encumbrances clearly afford a reasonable presumption that he had the whole estate and interest in the said premises.

20. On the fact of the case, the suggestion that the Plaintiff did not have a good title to the said premises was illusory.

21. I therefore made an order in terms of prayer No. 1 of the Summons. In accordance with the indications of the parties, I made no order as to costs on the applications.