SUN KAN BIU NINA AND OTHERS v. FOOK GEE TRADING CO. Ltd.

IN THE COURT OF APPEAL

1993, No. 141
(Civil)

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J U D G M E N T

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Litton, J.A.:

1. This appeal turns on a very narrow point. The appellants are developers and the respondents are purchasers of flats in Hiu Kwong Court and Hiu Ming Court, Kowloon. By his order of 30 June 1993, Godfrey J. ordered the developers to execute further instruments so as to perfect the purchasers' titles to their respective flats.

2. The problem quite simply was this. When the developers executed the assignments, the purchasers having fully discharged their obligations to pay, the deeds were signed by one director only. At that time the Articles of Association required two directors to sign. The result seems to be that because of this defect in execution no legal estate vested in the purchasers: that at any rate was the view taken by some bank mortgagees and sub-purchasers. The purchasers took out an originating summons seeking orders from the court to rectify their titles.

3. Godfrey J. concluded that under the covenant for further assurance of title the developers were obliged to execute instruments to perfect the purchasers' titles, subject to the purchasers undertaking to defray the costs involved. This seems to follow from the contractual provisions in the deed of assignment. It says:

"And that the Vendor and all persons lawfully or equitably claiming under or in trust for the Vendor shall at all times hereafter at the request and cost of the Purchaser do all acts and execute and sign all deeds and writings reasonably required for perfecting this Assignment."

4. The implied covenant set out in Part II of the First Schedule to the Conveyancing and Property Ordinance, Cap. 219 is to the same effect. The position seems to me to be obvious and accords with common sense. But the developers now appeal. They say this: the purchasers had not made any tender of costs before the originating summons was issued; therefore they had no cause of action; the judge lacked jurisdiction to make the order he did.

5. In my view the point is wholly without merit. The obligation falling on the vendor is not in terms conditioned upon a prior offer to pay costs by the purchasers. The covenant simply imposes an obligation on the purchasers to pay if the vendors were requested to "sign deeds in writing" for perfecting the assignment. The request was made. The obligation matured and the judge gave effect to the contractual arrangements by requiring the purchasers to pay the costs involved.

6. In my judgment this appeal should be dismissed and I would so order.

Bokhary, J.A.:

7. I agree and have nothing useful to add.

Mortimer, J.A.:

8. I am also of the same opinion and I would dismiss this appeal.

Litton, J.A.:

9. As to the costs, the order we make is that the appellants should pay all the costs including the costs arising from the Respondents' Notice and that the costs should be paid upon a common fund basis.