GOING FINE LTD v. KA WO MOTORS LTD

M. P. No. 869 of 1990

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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JUDGMENT

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1. This is a vendor and purchaser summons.

2. By an Agreement made on 15th March 1990, the defendant vendor agreed to sell to the plaintiff purchaser the property described in the Agreement as follows:

"All those two equal undivided 39th parts or shares of and in all those pieces or parcels of ground situate at Shaukiwan Hong Kong and registered in the Land Office as the remaining portion of Inland Lot No. 3304 and the remaining portion of Inland Lot No. 3990 and of and in all the messuages erections and buildings thereon of which the Ground Floors are now known as Nos.3, 3A, 3B and 3C Lau Li Street and the Upper Floors are now known as No.3 Lau Li Street together with the right to the exclusive use and enjoyment of all those portions of the First Floor of the said No.3 Lau Li Street (which said portions are shown and coloured pink respectively on the plans annexed to two Assignments respectively registered in the Land Office by Memorial Nos. 803526 and 803525 ('the Assignments') and thereon respectively marked 'Flat A' and 'Flat B')."

The property was sold subject to the exceptions and reservations stipulated in the Assignments.

3. When one turns to the Assignments, one finds that the portions shown on the plan annexed and coloured pink include a sub-portions which are coloured pink and hatched blue; these represent the flat roof adjacent to each of the flats A and B. In the body of each Assignment, there is an exception and reservation to the co-owners for the time being of the premises, the remaining portion of Inland Lot No. 3304 and the remaining portion of Inland Lot No. 3990, the right to the exclusive use and enjoyment of all the portions, the flat roofs, the roofs and penthouse of the said building.

4. The question is whether the Assignments were or were not apt to include those portions of the flat roofs which were hatched blue on the land shown coloured pink on the plans to the Assignments. This is not an altogether easy point to resolve. If one treats the expression "the land shown coloured pink" on its own, it includes the land shown coloured pink and hatched blue. If, however, one looks at the land coloured pink, one notices that part of it is marked "Flat A" and part of it is marked "Flat Roof". This raises a doubt which cannot be resolved without doing some violence to some part of the language of each of the Assignments. However, it is not appropriate to resolve this question now. The purchaser has entered into a contract under which he has agreed to take what the vendor has offered. The vendor has offered an assignment of the portion shown coloured pink on the plan annexed to the Assignment, subject to the exceptions and reservations stipulated in the Assignment. The words "exceptions" and "reservations" are not altogether apt to except and reserve a use to exclusive enjoyment of part of the land coloured pink, but that is what they do.

5. I cannot declare in favour of the purchaser that the vendor is unable to make title in accordance with the contract. The vendor can do so. The problem is that, after he has done it, there still remains a doubt as to exactly what property was originally included in the Assignment. This can be resolved by agreement with the only persons interested in the question, that is to say, those who were interested in the remaining portions of the Lots and might seek to assert a right to the flat roofs notwithstanding that (as is the fact) access to them is obtainable only from the flats in question. If the persons interested agree, then the matter can be resolved by a confirmatory indenture which makes it clear that no claim is asserted, by those who might otherwise be entitled to make it, to any interest in the flat roof. If the matter cannot be dealt within that way, then it would be open to the purchaser to institute proceedings against the persons who might have an interest in the flat roofs for a declaration that the Assignments were in fact valid to convey, to the purchaser's predecessors in title, the flat roofs in question. If those proceedings succeed, that again would resolve the matter.

6. In the meantime, I do not think I can make any order in these proceedings. If the matter is not resolved along the lines I have suggested, the purchaser will have to include in any contract which may be needed when the purchaser comes to sell a special condition that the vendor (that is to say, the present purchaser) is selling all the estate and interest that he has in the flat roof and that there is a question whether the flat roof is or is not to be taken as having been included in the land coloured pink on the Assignments. The special condition should further add that the purchaser shall not be entitled to raise any requisition or objection in relation to that matter. It would then be open to a purchaser to decide whether, having considered the point, he wants to enter into the contract or not. If he decides that he does, then all is well. If he decides that he does not, then the present purchaser will have to try and find someone else who is prepared to contract on these terms.

7. For my part, having regard to the fact that no adverse claim has ever been asserted to the flat roof, I should have thought there is little that the present purchaser has to worry about. However, for the reasons I have endeavoured to state, I do not think I can make any order upon this originating summons.