WONG KING KWONG v. FUNG LAI MING

1993, M.P. NO.237

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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REASONS FOR JUDGMENT

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1. At the conclusion of the hearing, the application was allowed. Reasons were promised, which I now give.

2. The plaintiff agreed to buy and the defendant agreed to sell Flat D on the 5th Floor of 6 Nassau Street, Mei Foo Sun Chuen. To all intents and purposes, the defendant was in possession of a deposit totalling $188,000. The plaintiff served on the defendant requisitions coupled with his corresponding objections to title. The defendant had allegedly failed to remove the reasonable doubt raised in that she was unable or refused to answer or comply with all these requisitions.

3. The defendant's stance was diagonally opposite. The defendant accused the plaintiff of failure to complete the transaction on completion date and forfeited the $188,000 deposit.

4. On the other hand, the plaintiff claimed to have accepted as wrongful repudiation, the defendant's alleged refusal or inability to satisfy in full his requisitions and objections to title.

5. These proceeding were, therefore, for a declaration to the effect that the defendant did make default as alleged, return of the deposit plus interest and reimbursement of the plaintiff's costs of investigating the title, together with costs of and incidental to the intended purchase. Needless to say the plaintiff also claimed costs of these proceedings.

6. The law is clear. Unless due execution can be presumed under s.23 of the Conveyancing and Property Ordinance, a purchaser is entitled "to demand reasonable proof of execution," Kan Wing Yau and Another v. Hong Kong Housing Society. [1988] 2 HKLR 187 at 1991, per Clough J.A. In the same passage, Clough J.A. accepted counsel's submission that dissimilarity in signature was itself a reasonable ground for suspicion so as to entitle the purchaser to demand reasonable proof of execution. In Lam Kin I v. Tsui Ming Yee, MP No.361 of 1989 (unreported, the judgment of which was delivered on 24th February 1989) Godfrey J. provided the profession with an aid to apply the "reasonable proof" of Clough J.A. It is, Godfrey J. explained, "what we sometimes call proper convenyancing evidence". Naturally, circumstantial evidence is, by itself, unacceptable.

7. Before completion, the plaintiff as purchaser despatched, inter alia, the following requisitions. The requisitions in question were:

"In Assignment Memorial No.3075785, Sung Choi Lin as vendor therein executed the assignment before the solicitor in Ireland. Kindly supply us the notarial certificate. We note that the speciment signature and the United Kingdom passport number of the vendor appearing on the attestation clause therein is different from that on Assignment Memorial No.2536174, please clarify."

8. The plaintiff also asked for production of documents, two of which are set out below:

"3. Undertaking Memorial No.1098060;"

"4. Agreement for Sale and Purchase Memorial No.1573293."

9. To sum up, of the requests made by the plaintiff through his solicitors, the outstanding matters were: (1) production of a notarial certificate for the signature of the Irish attesting solicitor, (2) clarification of the dissimilarities of the signatures and passport numbers of Sung Choi Lin in two transactions, and (3) sight of the two said Memorials.

10. The defendant had responded in these terms: (1) the notarial certificate was unnecessary for showing a good title, (2) the relevant signatures were "substantially the same" with the signatory having been "identified by the same Untied Kingdom Passport No.887374"; "the letter 'B' following the passport number in" another assignment would "not affect the number of the passport", and (3) the plaintiff's solicitors were invited to let them have their "land search in order to enable (them) to locate the two (requested documents for perusal) in items 3 and 4."

11. It is to be noted that for two other requested documents, the defendant's solicitors categorically placed on record their resistance that the defendant was "not obliged to produce items 1 and 2" for perusal.

12. Thus, the complaint was that some objections to title were not removed. These outstanding matters, including the absence of the notarial certificate in the circumstances of this case (whether or not it be strictly necessary) were sufficient to raise a reasonable doubt to displace the presumption of due execution of documents of title produced from proper custody.

13. Prior to the scheduled date for completion, Mr Wong of the defendant's solicitors spoke for about 5 minutes with one Mr Kwong, an assistant solicitor of Messrs Ng & Shum, the plaintiff's solicitors. The solicitor in charge of the transaction in Messrs Ng & Shum was not available. The conversation was in terms of a general enquiry on the requisitions. In the brief discussion, the two documents, the Undertaking Memorial and the Agreement for Sale and Purchase Memorial, were not specifically identified. It was claimed that in that conversation, Mr Kwong had been invited "to confirm all their outstanding objections (in any) to the defendant's title to the property in writing" and that thereupon Mr Wong "was told that the only requisition that (the plaintiff's solicitors were) not satisfied (was the plaintiff's solicitors') requisition Number 4 as stated in (the plaintiff's solicitors' follow-up) letter dated 22nd December 1992".

14. Mr Kwong was not in charge of this conveyancing matter, but he obligingly responded to the enquiry made by Mr Wong. Mr Kwong's attention was not drawn to the two documents requested for perusal. Mr Kwong has since denied waiving the plaintiff's right to perusal of the two requested documents. He states, on affirmation, that he merely dealt with the plaintiff's solicitors' "dissatisfaction regarding the comments made over the telephone." Factual dispute cannot be resolved on affidavits. This court is not impressed by the ventilation of a waiver issue on such inconclusive circumstances. The defendant did not apply for cross-examination on affirmations. Suffice it for me to say that waiver was not established.

15. The request was one for production of the two documents for perusal. The defendant, through her solicitors, took no exception to the request but instead sought further material for identifying the source of these documents.

16. Mr Cheung directed my attention to Clause 14 of the Agreement for Subsale and Purchase dated 22nd December 1992 as well as its Clause 6. Clause 6 incorporated Part A in the Second Schedule to the Conveyancing and Property Ordinance, Cap.219. Mr Cheung, counsel for the plaintiff, further referred me to Clauses 8 and 9 of that Second Schedule. He succeeded in demonstrating that the two requested documents were necessary for showing a good title.

17. But the crux of the matter is, even if Mr Cheung was less than correct in his contention, that the plaintiff purchaser merely sought perusal of these two documents. The defendant vendor was willing to oblige. It was fairly conceded by Miss Wong that the defendant herself and her solicitors had been unaware of the relevance or otherwise of these two documents until they were finally procured after the institution of these proceedings. The plaintiff's right to demand perusal of the documents arose from their prima facie association with title, their absence and the defendant's then inability to demonstrate their irrelevancy. They had to be satisfactorily accounted for. The defendant failed in this respect before completion and was in default of at least her assumed duty in the course of investigation of title.

18. The Law Society's Circular with the heading "Conveyancing Practice - attestation of conveyancing documents executed abroad for use in Hong Kong" advises, as a good conveyancing practice, a notarial certificate for a non-commonwealth solicitor attesting execution of a conveyancing document overseas. The Circular, in particular, states that execution of such a document "should be attested by a notary public". That it is a recognised good conveyancing practice for Hong Kong cannot be doubted. It was conceded, on all hands, in these proceedings that the advice of the Law Society in the Circular was not mandatory.

19. As for the discrepancy in the passport number, this Court is unable to accept that a United Kingdom Passport No.887374B is the same as a United Kingdom Passport No.887374.

20. Lastly I turn to the dissimilarities in the signatures. In 1984, the signature was "MRS CHOI LIN SUNG". Two years later in 1986, two signatures appeared on the assignment, namely, "SUNG CHOI LIN" and "CHOI LNV SUNG". The word "LNV" could possibly be "LIN" with the letter "I" drawn from "N" and the remaining portion of what is left of the original "N" linked to the original "V" to read "N". In arrangement, visual appearance and numbers of words, the differences are considerable. Suspision was understandably aroused.

21. I need not refer to the cases cited for my benefit, which were determined on their own facts. What is clear from these decisions is that dissimilarities were resolved only after satisfactory enquiries, often fortified by further reasonable proof of identity from either the attesting witness or other persons involved.

22. I have set out the initial resistance of the solicitors for the defendant, who also relied on presumed due execution. On her behalf, in these proceedings five additional factors were advanced by Miss Wong on the signatures:

(1) The same 3 Chinese characters were used in the formal part of the executed documents, though two years apart;

(2) Sung Choi Lin was identified in both documents as a married woman;

(3) Sung Choi Lin was described in both documents as residing in what would appear to be the same city, ignoring the discrepancy between "North Island" and "North Ireland";

(4) Execution of both documents would seem to be before the same solicitor; and

(5) The passport numbers, ignoring the letter B, as recorded in both contained the same 6 numerals.

23. It was submitted that it would have been highly unlikely for the signatories on both occasions not to be the same Chinese lady, residing in the same Irish city and attending before the same solicitor. It would have been, so Miss Wong contended, too much of a coincidence. I am not persuaded that a reasonable inference could be so drawn. I have also pointed out that without more circumstantial evidence is not proper conveyancing evidence. Moreover, these five additional factors were not advanced for consideration by the plaintiff's solicitors at the time. As the plaintiff's requisitions stood, his legal advisers needed only to consider the then explanations which did not bear close examination.

24. In the circumstances, the defendant wrongfully terminated the said Agreement for Subsale and Purchase and forfeited the deposit. I order:

(1) A declaration that the requisitions and objection of the plaintiff in respect of the title to the property have not been sufficiently answered or complied with by the defendant in accordance with Clause 9 and 11 of the said Agreement for Subsale and Purchase;

(2) The defendant do return to the plaintiff $188,000 being the amount of the deposit payment, together with interest thereon at the rate of 5% per annum from the date of completion, i.e. 28th December 1992 to to-day;

(3) The defendant do pay the plaintiff's costs of investigating the title of the property and the costs of and incidental to the intended purchase of the property, such costs to be taxed if not agreed;

(4) Costs of these proceedings be costs against the defendant in favour of the plaintiff.