CHU TAI HANG HENRY v. TIME CHEER DEVELOPMENT LTD.

1994 M.P. No. 351

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 by the purchaser under section 12 of the Conveyancing and Property Ordinance, Cap. 219. It relates to property in the New Territories under New Grant No. 4963 and New Grant No. 7995 registered in the Tai Po District Land Registry as Lot No. 1319 and Lot No. 1413 in Demarcation District No. 9.

2. The parties entered into an agreement to buy and sell the property at a price of $500,000. A deposit of $50,000 was paid with the balance of $450,000 to be paid on completion on or before 26th February 1994. The agreement further stipulates that good title to the property shall be shown by the defendant vendor to the plaintiff purchaser. Documents relating to the property were sent to solicitors for the plaintiff by solicitors for the defendant on 16th December 1993. After an exchange of correspondence over requisitions, the plaintiff issued this summons on 7th February 1994 asking for the full texts of the General and Special Conditions of New Grant No. 4963 and New Grant No. 7995 failing which a declaration that good title to the property has not been shown in accordance with the agreement, the return of the deposit and costs.

3. While conceding that the authorities were against him, Mr. Anthony Cheung for the defendant argued that the facts in the present case were sufficient to infer a contrary intention in the agreement to take the case out of s.13 of the Conveyancing and Property Ordinance, Cap. 219. He referred to the two memoranda of agreement and the statutory declarations of Ng Yuen Tak and Chow Mo Ching alias Kan Mo Ching. The memoranda of agreement stated that the leases were subject to the General and Special Conditions of Sale and the lessees were required to perform and abide by those conditions. Mr. Ng who resides at a building erected on Lot No. 1136 deposed to the fact that he has been residing at this address for over 61 years and throughout this period the lot has been used by him for residential purpose without interference or objection by the Government or any person or corporation. Madam Chow, the daughter and executrix of the estate of Kan Kam Ching, declared that on 6th October 1947 her father had made a statutory declaration in respect of the loss of certain title deeds and documents relating to the two lots in question. Solicitors for the defendant wrote to the Tai Po District Land Registry on 17th November 1993 and their reply dated 22nd November was this:

"I refer to your letter of 17th November 1993.

The New Grant No. 7995 kept in this Registry only has one page, I am not in a position to advise you of the lease term of the said New Grant as raised in your said letter.

This Registry only keeps New Grants starting from the year of 1947 (i.e. New Grant No. 7660). Presumably the old New Grants have been lost during the Japanese Occupation of Hong Kong in Second World War II. I regret that I am unable to provide you with a certified copy of the New Grant No. 4693.

Yours faithfully etc."

4. In Re Halifax Commercial Banking Company Limited and Wood (1899) The Law Times 536, it was stated that the mere fact that the title deeds to property sold have been lost or mislaid does not release the purchaser from the performance of his contract: but he can be compelled to complete if he is furnished in proper time with satisfactory secondary evidence as to the contents of the lost documents and as to their having been duly executed and properly stamped. The secondary evidence supplied by the vendors' solicitors were certain statutory declarations which referred to and verified the abstract was a full and correct copy. The declarations and abstract did not however prove the execution of the deeds. Later, the vendors offered an indemnity which was refused. Subsequent to that, the vendors offered some further statutory declarations by the conveying parties to the various deeds to the effect that they executed the same and exhibiting true copies. But the purchaser strenuously resisted completion in the absence of the deeds. It was held by the Court of Appeal that the purchaser had a right to say that, the vendors not having shown a good title within a reasonable time, he was not bound to wait longer and was entitled to be discharged from the contract and to have back his deposit; that there was nothing in the correspondence or in the conduct of the purchaser to deprive him of that right; and that the evidence adduced by the vendors before the purchaser issued his summons was not such as he could be compelled to treat as satisfactory.

5. The present situation is not dissimilar to Gatewood Limited and Silver Noble Investment Limited [1993] 1 HKLR 250. In that case the vendor also sought to rely, as counsel for the vendor did here, on the New Territories (Renewable Crown Leases) Ordinance and advanced arguments that the provisions of this Ordinance automatically renewed certain leases for a term of 24 years less 3 days from 1st July 1973 that every person entitled to such a renewal has been granted a new Crown lease. This new Crown lease which confers title and thus s.13 of the Conveyancing and Property Ordinance does not call for documents which, although once the root or source of title, have since expired or otherwise made inoperable. It was necessary only for the vendor to provide evidence of the existing Crown lease as a trigger. In rejecting this argument, Barnett, J. said at pp. 251 and 252:

"Mr. Chow asked me to consider the situation if Cap. 152 had not been enacted, a right of renewal under an existing Crown lease had been exercised and a new Crown lease actually granted and issued. He asked whether the vendor would be obliged to produce the existing Crown lease as well as the new Crown lease. The answer as Mr. Leong for the plaintiff agreed, must be no. There would be a Crown lease conferring title upon the vendor and containing in itself all the terms, covenant and conditions upon which the land was held.

Under s.13 of Cap. 219, a purchaser is entitled to production of the Crown lease. It is implicit that he is entitled to a sight of a tangible document. A new Crown lease granted by operation of Cap. 152 does not exist as a separate physical entity. There is no new Crown lease for a vendor to produce or a purchaser to see. Cap. 152 came into force in 1969 Cap. 219 in 1948. The legislature cannot be taken to have enacted the provisions of s.13 of the latter Ordinance in vain.

I am persuaded, therefore, that Mr. Leong is right when he contends that a purchaser is entitled to see the document which, subject to s.13 contains complete particulars of the terms upon which he will hold the land. That document is the existing Crown lease which effectively confers title to the land although by efflusion of time and operation of law superseded by a new Crown lease."

6. I respectfully agree with Bamett J. and for the same reasons I reject the arguments advanced before me by Mr. Cheung on behalf of the defendant. In my judgment, the matters relied upon by the defendant in the present case are not sufficient to indicate a contrary intention under s.13. The requisitions raised by the purchaser have not been sufficiently answered by-the vendor. Accordingly, there will be a declaration that good title to the property has not been shown. The deposit of $50,000 will be returned to the plaintiff together with interest at 9.5% per annum from the day it was paid to the defendant. I make an order nisi for costs in favour of the plaintiff.