WONG WAI MAN V. TANG TAT CHI

1992, No. MP4172

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H E A D N O T E

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Vendor and Purchaser Summons - s.13(1) of Conveyancing and Property Ordinance, Cap.219 - true copy of Crown Lease certified by Land Office not clearly legible - whether production of such copy complies with s.13(1) - whether permissible to rely on copy of counterpart of Crown Lease and Land Office's Owner Register Card to prove contents of Crown Lease.

1992, No. MP4172

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 issued under s.12 of the Conveyancing and Property Ordinance, Cap.219.

2. The Plaintiff is the vendor and the Defendant the purchaser under a sale and purchase agreement made on 29th October, 1992 ("the Agreement") for the sale of the property being all that one equal undivided 14th part or share of and in all that piece or parcel of ground of Section T of Inland Lot No.116 together with the premises thereon now known as Flat A, Fifth Floor and the roof thereon at No. 9, Old Bailey Street ("the Property"). Under clause 20(b) of this Agreement, the Plaintiff is obliged to give good title to the Property and prove his title thereto and to furnish such certified copies of any deed or document of title as may be necessary to prove such title.

3. Two requisitions were raised by the Defendant. For the purpose of the present action, the only outstanding requisition relates to the production of the Crown Lease of Inland Lot No.116. It says,

"The certified copy of Crown Lease of Inland Lot No.116 is illegible. Please furnish us with a fresh certified copy and also a certified copy of Indenture of Extension dated 12th September, 1957 for our perusal." (1957 should be 1857)

The property in question stands on Section T of Inland Lot No.116 which has been subdivided (or "carved up") into numerous sections and/or subsections on which various buildings have been erected. The original of the Crown Lease of the whole lot, i.e. Inland Lot No.116, is obviously not in the possession of the Plaintiff. It has never been. What she can produce to the Defendant is a certified copy of a certified copy of the Crown Lease of Inland Lot No.116. Quite unfortunately, this certified copy is almost entirely illegible. Hence, the Defendant requests for a fresh certified copy.

4. Under clause 1 of the Agreement, the Plaintiff agrees to sell to the Defendant all the estate right title and interest "in the land described in Part I of Schedule 2 hereto ("the Property") for the residue of the term of years created by the Crown Lease (or as the case may be) absolutely subject to such Conditions of Sale/Exchange/Grant/Regrant ("the Conditions") under which the Property is held from the Crown and subject to ... the performance and observance of the covenants terms conditions and stipulations reserved and contained in the Crown Lease or in the Conditions as the case may be." Part I of Schedule 2 of the Agreement does not refer to the Crown Lease or the term of years under which the Lease was granted. It is apparent from the land search (and the parties do not seem to dispute this record) that the Crown Lease for Inland Lot No.116 was granted for 75 years commencing on 22nd January, 1844 and subsequently extended to 999 years. There are other documents of title the recital of which refer to an "Indenture of Extension" of the Crown Lease "executed on 12th September, 1857". Hence, the second part of the requisition requests for a certified copy of this Indenture as well.

5. In purported answer to the Defendant's requisition, the Plaintiff is able to produce a certified true copy of the Crown Lease which was certified by an Assistant Registrar of the Land Office. The printed part of this document is not clear but can still be read while the written part of it is not very legible. (For the sake of clarity, this is the certified true copy of the Crown Lease to which I shall refer in the rest of this judgment.) The Plaintiff has further obtained from the Land Office a copy of what is alleged to be the counterpart of the Crown Lease. This document is clear but appears to be a blank form without showing the names of the parties or their execution. It does however have some writings thereon saying: "Inland Lot No.116". The Land Office is unable to confirm from the counterpart the names of the parties concerned and who executed the Crown Lease. However, it is able to confirm with reference to the Crown Lease Register Card which, it says, forms part of the Land Office records, as follows : -

"On the face of the said Crown Lease card, the Lease was executed on 31.7.1844 with the parties namely 'John Francis Davis on the part of the Crown' and 'Robert Stephenson on the (part of the) Lessee'. Moreover, there is a clause on the said Crown Lease card that '75 extended to 999 years by endorsement for 924 years dated 12.9.1857'."

6. I think I should also mention that both the certified copy of the Crown Lease produced by the Plaintiff and the copy of the counterpart show that a slip of paper with some handwritings thereon had been affixed to those documents. Parts of the writings are unclear but doing the best one can, some of them read: "shall during the continuance of the extended term of Nine Hundred and twenty four years hereby granted". As to the alleged Indenture of Extension, the solicitor who handled the previous transaction confirmed that he had never been in possession of any Indenture.

7. The Defendant is not satisfied with such answers. The issues before me are whether the Plaintiff has sufficiently answered the requisition and whether she has shown a good title to the Property.

8. Both Counsel have very helpfully assisted the Court in their thorough submissions which lasted almost one and a half days (instead of half an hour as asked for in the summons). I hope I am not doing them any injustice by giving only a summary of their main arguments.

9. Counsel for the Defendant submitted that the Plaintiff had failed to comply with s.13(1) of Cap.219 which provided that the purchaser is entitled to the production of the Crown Lease or a certified true copy thereof. Neither the certified true copy produced by the Plaintiff nor the counterpart was satisfactory. Counsel cited Gatewood Ltd v. Silver Noble Investment Ltd. HCA No.A3638 of 1992, unreported in which Barnett J. held that s.13(1) required the production of a tangible document. Moreover, the Indenture of Extension which was referred to in some of the documents of title was not produced and yet there was no evidence of the efforts made to find this separate document. Counsel further submitted that the Crown Lease Register Card was not and could not be a substitute for the Crown Lease or a certified true copy thereof. Reliance was placed on Lai Chung Yue v. Chan Sing, HCMP No.2206 of 1987, unreported and Gold Check Investments Ltd v. Star Investment Ltd, HCMP No.592 of 1992, unreported, both judgments of Godfrey J. It was also argued that if there was no compliance of s.13(1), the Plaintiff was not entitled to adduce secondary evidence of the contents and execution of the lost documents, since the prerequisite that there must be evidence of loss had not been fulfilled. Even if secondary evidence was permitted, there was no sufficient evidence to confirm that the contents of the blank counterpart were identical to the illegible certified true copy of the Crown Lease. Counsel also said that if the Court declared good title, the Defendant would face a real risk of the title being challenged by subsequent purchasers.

10. Counsel for the Plaintiff submitted that the certified true copy of the Crown Lease met the requirement of s.13(1) of Cap.219 but that since it was illegible, secondary evidence was adduced to prove its contents. She relied on Re Halifax Commercial Banking Co Ltd and Wood, (1898) 79 LT 536. Once s.13(1) had been complied with, counsel argued, the next question was whether the vendor had shown good title. All the evidence, taken as a whole, was quite sufficient to show good title. It was submitted that the vendor had proved beyond reasonable doubt that there would be no risk of any subsequent challenge on the title. She cited M.E.P.C. Ltd v. Christian Edwards, [1979] 3 WLR 713 and Kan Wing Yau and another v. Hong Kong Housing Society, [1988] 2 HKLR 187 in support.

11. The first question I have to decide is whether the Plaintiff has complied with s.13(1) of Cap.219. That subsection requires the vendor to produce, inter alia, the Crown Lease relating to the land sold unless the parties agree otherwise. By virtue of subsection (2), a certified true copy is also acceptable. My understanding of the position is as follows. First, what is required by the subsection is, as Barnett J. quite rightly held in Gatewood Ltd v. Silver Noble Investment Ltd, supra, a tangible document. Second, that provision requires production of the Crown Lease or a certified true copy thereof, and not any other substitute, unless the contrary intention is expressed by the parties in the sale and purchase agreement. Thus, in Gold Check Investments Ltd v. Star Investment Ltd. supra, Godfrey J. refused to accept in lieu of the Crown Lease (or a certified true copy thereof) a copy of the memorial filed with the Land Office for the purpose of registration, even though it was plain in that case that the land in question was sold by auction to the original lessee. Third, notwithstanding the position at Common Law, s.13(1) imposes upon the vendor a statutory obligation to require production of the Crown Lease unless varied by agreement. This obligation on the part of the vendor is related to and indeed part of his obligation to prove title. But the two obligations must not be confused. This point was made by Deputy Judge Findlay in Chan Kam Sing and another v. Lam Ping Ping HCMP No.3276 of 1989, unreported. In that case, the vendor could not supply a certified copy of the Crown Lease because the original had been mislaid by the Land Office. An uncertified copy of a document purporting to be the Crown Lease was not accepted. The learned judge, distinguishing the Halifax case, held that the Court could not dispense with the requirement under s.13(1). I would respectfully agree. While secondary evidence may be adduced to discharge the obligation to show good title if certain documents are lost, it cannot do away with the obligation to produce the documents if the statute so stipulates. The principle in the Halifax case therefore has no application when it comes to compliance with the statutory requirement. If the Crown Lease or a certified true copy thereof is not produced, no amount of secondary evidence can suffice for the purpose of complying with s.13(1).

12. In the present case, there is only one Crown Lease for the whole lot, Inland lot No.116. It was executed 150 years ago. As a result of the subdivisions of this lot, it is obviously impracticable, if not impossible, to produce the Crown Lease in the sale of flats in buildings erected on these sub-lots. Hence, it is almost inevitable that in most of these sales, only certified true copies of the Crown Lease can be produced.

13. A certified true copy of a document must by definition and necessary implication be the same as the original. In most cases, where the original is clear, the certified true copy should also be clear and one would be able to read the certified true copy as clearly as the original. Where the original is not clear or where reproduction of the original into a copy is not very well done, difficulties may arise in trying to make out what it says on the certified true copy. But whether a document is a certified true copy of the original is one thing. Whether one can make out clearly what that document says is another. It is the duty of the certifying public officer or solicitor to ensure that the document which he certifies is a true copy of the original. He compares the copy with the original and if he is satisfied they are the same, he can certify as to that. In normal circumstances, he should be able to read both documents before he makes the certification. But that is not essential. It is not his duty to ensure that the true copy which he certifies is clearly legible, so long as he is satisfied that the copy is the same as the original. There may be many reasons why a certified true copy is not clear or even legible.

14. In the present case, the certified true copy of the Crown Lease is not very legible. On the face of it, it looks like a legal instrument and when one tries very hard to read it, one may be able to tell it is a Crown Lease. But all other details regarding the parties, the property and execution are not clearly legible. If one is shown this document, one may arguably entertain some doubt as to whether it is sufficient for the purpose of s.13(1). However, I note that it was certified in 1986 by an Assistant Registrar of the Land Office to be a true copy of the Crown Lease of Inland Lot No.116. This is important. The person who is in the best position to certify a copy of a document must be the one who issues that document. Here, it is a public officer and an agent of the Crown who granted the Lease, who makes the certification. And there is no evidence to show that he has not properly discharged his duty of certification by satisfying himself that the copy he certifies is a true copy of the Crown Lease in question. In these circumstances, I take the view that the Plaintiff has complied with s.13(1) by producing the copy certified by the Land Office to be a true copy of the Crown Lease of Inland Lot No.116.

15. The next question is: what are the contents of the Crown Lease? The Defendant as the purchaser is entitled to know the terms of the Crown Lease in order to see whether all the covenants have been complied with in deciding the ultimate question whether a good title has been shown. This is where, in my view, secondary evidence comes in if the contents are not clear. In this connection, I think the Plaintiff is entitled to adduce secondary evidence to show the contents of the Crown Lease.

16. The Plaintiff has produced a copy of the counterpart of the Crown Lease which she obtained from the Land Office. On it, it is clearly written that it relates to Inland Lot No.116. Although that document is a blank standard form showing the slip of paper which had been attached to it but without the names of the parties, the property or execution, all the terms of the Crown Lease are clearly contained therein. Furthermore, the Crown Lease Register Card kept by the Land Office shows the details which are required, namely the parties to the Crown Lease, the location of the property, the term of years of the Lease, the commencement date, the annual rent, and the date of execution of the Lease. On top of that, I have been shown some other documents of title the recitals of which refer to the Crown Lease and the above details. In view of the evidence adduced before me, I am satisfied that there is sufficient secondary evidence of the contents of the Crown Lease for the purpose of proving good title.

17. There is of course the reference to the Indenture of Extension. I do not think its absence is fatal to the Plaintiff's case. Although the recitals in some other documents of title refer to such an Indenture as a separate document, there are also other indications or evidence to the contrary. First, both the certified true copy of the Crown Lease and the copy of its counterpart show a slip of paper attached thereto referring to an extension of the lease by 924 years. This looks like an endorsement on the Lease itself. Second, the Register Card also refers to an extension by endorsement. It is thus not at all clear whether the Indenture of Extension exists. What is clear is that there was an extension of the lease to 999 years. And that is the important thing. The party who is alleged to have granted the extension is the Crown. In view of the confirmation by the Land Office, the Record it has kept and the certification by its officer of the true copy of the Crown Lease, I take the view that the Crown as a party to the Lease is estopped from challenging it. Furthermore, there have been numerous transactions which have relied on the validity of this Crown Lease including the extension of its term of years. I am quite satisfied that the term of years is 999 years.

18. Lastly, it was argued that if the Court declared that good title had been shown, the Defendant's title might still be subject to challenge by subsequent purchasers. This action is of course one between the Plaintiff and the Defendant only. But it is also an action which concerns the Property. There is always the possibility of third parties challenging the title again. Such a risk can never be removed. But the test is not whether there is any risk of a possible challenge but whether there is any risk of the challenge being successful. See M.E.P.C. LTD v. Christian Edwards, supra, and Kan Wing Yau and another v. Hong Kong Housing Society, supra. As the Court of Appeal in the latter case said, the Court must be satisfied beyond reasonable doubt that the purchaser will not be at risk of a successful challenge. In the light of the evidence before me, I am so satisfied.

19. I would therefore declare that the requisition raised by the Defendant has been sufficiently answered by the Plaintiff and that the Plaintiff has shown good title to the Property.

20. In view of the issues involved, I agree that this is a proper case to seek the determination of the Court. Hence, subject to what the parties may say, I do not propose to make any order for costs. I understand the parties have also reached some arrangement on the question of costs.