NATIONAL GIANT LTD v. GREAT WISE DEVELOPMENT LTD

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JUDGMENT

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Sir Derek Cons, V.P., delivered the judgment of the Court:

1. By an agreement dated 27th April, 1989 the Defendant Vendor agreed to sell and the Plaintiff Purchaser agreed to buy property commonly known as 26/8 Gilman's Bazaar. A deposit of $1.5 million was paid. Completion was to be on the 10th July, time being of the essence, with the Vendor being required, by Clause 9 of the Agreement, to "show a good title to the said premises at its own expenses".

2. What was in fact shown were copy documents commencing with an assignment, dated the 21st May, 1965, to one Chan Yock Sheung, accompanied by a trust deed of even date by which Chan Yock Sheung declared that he held the property in trust for one Chan Ting Leung who had put up the purchase monies. In the latter document the signature of CHAN Yock Sheung appears as "Y.S. Chan". A memorial, similarly signed, was lodged in the Land Office on the 2nd July.

3. The second document of title was an assignment to the Vendor's predecessor in title. It is dated the 13th May, 1977 and signed by both Chan Yock Sheung and Chan Ting Leung. A memorial, similarly signed, was lodged in the Land Office on the 22nd July. In both documents the signature of Chan Yock Sheung does not appear as it did on the 1965 document, i.e. as "Y.S. Chan", but as "Chan Yock Sheung" in full.

4. By a letter, which appears to predate the agreement by two days, solicitors for the Purchaser queried the difference between the two sets of signatures, observing that "there was no identity document for showing the identity of the same referring to one and the same person" and drawing the attention of the Purchaser's solicitors to Ma Chun Man v. Yung Yu Yuen & Co. [1979] H.K.L.R. 26 as the relevant authority. Further correspondence between the solicitors failed to resolve their anxieties and by summons dated the 10th July the Purchaser sought from the court below:-

5. Barnett, J. grated both declarations and made the order requested. The Vendor now appeals.

6. It is submitted by Mr. Bernacchi, who appears as he did below, for the Vendor that the documents themselves should not excite suspicion. He relies upon the evidence of Dr. A.J. Nutten, an expert in handwriting, that the sets of signatures were in his opinion made by one and the same person; upon the presumption contained in Section 23 of the Conveyancing and Property Ordinance, Cap. 219, that "an instrument appearing to be duly executed shall be presumed, until the contrary is proved, to have been duly executed"; and upon the Common Law presumption that "Omnia Praesumuntur Rite Et Solemniter (sometimes put Solenniter) Esse Acta". He also draws our attention to what is apparently the pencilled suggestion of a solicitor on the original assignment of the words "Chan Yock Sheung" to indicate where and how it should be signed. Mr. Bernacchi also mentions the similarity of the names and addresses in the two sets of documents, the recital of the earlier in the latter, and the fact that both of the latter were apparently signed at the same time in the presence of a Britisn Proconsul in Boston, Massachusetts.

7. The submission was put in much the same way to the judge below. He rejected it, finding that "the signatures reasonably give rise to suspicion which a prospective purchaser or his solicitors can and should seek to have allayed" and which in the circumstances had not been allayed. We take the same view. The matters on which Mr. Bernacchi relies may well be, in the words of Godfrey, J., in Lam Kin I v. Tsui Ming Yee, M.P. 361/89, 24th February, 1989, "a pointer to the conclusion that the two signatures are in fact that of the same person". But, as the same judge later remarked, "that is not enough". The doubt remains. The Common Law presumption is thus rebutted, and Section 33 of the Conveyancing and Property Ordinance does not apply.

8. It is submitted then that even so,even if it has to be accepted for the sake of argument that the legal estate remains outstanding in Chan Yock Sheung, that is only a theoretical and not a practical blot on the title; Chan Yock Sheung is a bare trustee whose only duty is to convey the legal estate according to the order of the beneficiary Chan Ting Leung, who was party to the 1977 assignment. Reliance is placed upon the words of Lord Russel of Killowen, with whose speech the rest of the House agreed, in M.E.P.C. Ltd. v. Christian-Edwards and others 1981 A.C. 205 at 220:

9. We accept that in the present circumstances there is no possibility that Chan Yock Sheung could successfully mount an action to recover the property in his own right. He would, in the words of the judge below, be laughed out of court. But that, with respect, does not take the matter further. For we are concerned here, not with a possible blot on the title, but with whether the Vendor has shown good title at all. For that it is appropriate to go to the words of Jessel, M.R., in Camberwell and South London Building Society v. Holloway (1879) 13 Ch.D. 754 at 763:

10. The rule to which he was referring, to be found as well in 42 Halsbury's Laws of England, 4th Edition, para. 143 and William on Title, 4th Edition, p. 565, no longer applies in England and Wales by reason of Sections 10 and 42 of the Law of Property Act 1925. But we accept it to be still good law here. The answer to the second question in the Purchaser's summons ought therefore to have been in the affirmative rather than the negative.

11. That still leaves the third issue in the summons, the question of the deposit, which we are told is the only issue in reality between the parties. Clause 8 of the Agreement provides:

12. Then Clause 9, after requiring the Vendor to show a good title at its own expense, provides that it shall

13. To complete the title it was necessary for the Vendor to provide the Purchaser with a satisfactory copy of an assignment from Chan Yock Sheung to the Vendor's predecessor in title, or to itself. At no time before that fixed for completion did it do so, or even offer to do so. At all times the Vendor's solicitors maintained their stand that the Vendor was already possessed of sufficient title. The judge was therefore correct to order repayment.

14. For these reasons we allow the appeal, but only to the limited extent we have expressed in regard to the second paragraph of the summons.