CHU WING YIP v. LEUNG SIU YUK

1996, No. 118
(Civil)

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H E A D N O T E

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Even if a probate were a document of title - which it probably is not - the schedule of property annexed to it is certainly not part of the probate. Such schedule, therefore, is not itself a document of title or any part of one. It is true than when one talks about an annexure to a document one is usually talking about something which has become part of that document. But these schedules of property are prepared by the Estate Duty Office purely for its own purposes. They are not issued by the Probate Registry, and are wholly distinct from and form no operative part of any probate itself qua probate.

IN THE COURT OF APPEAL

1996, No. 118
(Civil)

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J U D G M E N T

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Bokhary, J.A.:

1. This appeal concerns an agreement for the sale and purchase of property comprising a flat and its roof ("the Property").

2. When the time for completion came, there was a dispute over title.

3. The purchaser repudiated the agreement, asking the vendor to give him back his deposit. But she forfeited his deposit instead, saying that his repudiation was wrongful.

4. On August 3 last year, he took out a vendor and purchaser summons. By that summons he sought : various declarations; the return of his deposit; damages comprising the costs of investigating title, stamp duty and agents' fees; interest; and costs.

5. The declarations which he sought were : (i) that his "requisition in respect of the title to [the Property] had not been sufficiently answered"; (ii) that "a good title to the Property [had] not been shown"; and (iii) that "he [had] rightfully repudiated".

6. The summons was heard by Mrs Justice Le Pichon on May 1 this year.

7. By the judgment which she handed down on the 7th of that month, the judge : declared that the purchaser had rightfully repudiated; ordered the return to him of his deposit; and awarded him damages as claimed, interest and costs.

8. The vendor now appeals to this Court. She asks us to : set aside the judge's order; dismiss the purchaser's claim; and award her costs.

9. Shortly stated, the facts of the case are as follows.

10. The Property belonged to the vendor's husband. He died on April 13, 1994. By his will : he left her his residuary estate which included the Property; and appointed her his sole executrix.

11. That was followed by these events, all in the following year, 1995.

12. The vendor obtained a grant of probate on April 7. Due to a mere clerical oversight in the Estate Duty Office, the schedule of property annexed to the probate referred to the flat without any mention of the roof.

13. On May 2, the probate was lodged with the Land Registry. And on May 17, the vendor, as sole executrix, executed an assent vesting the property, including the roof of course, in herself.

14. Next, we have a letter written by the purchaser's solicitors to the vendor's solicitors on May 26. That was after the sale and purchase had been negotiated but before the agreement for it had been executed. By that letter : the purchaser's solicitors drew attention to the fact that the schedule made no mention of the roof; and asked that the probate be "amended" to include the roof and "re-registered".

15. That letter came, as I have said, before the execution of the agreement for sale and purchase. Such agreement was executed on May 31, and called for completion by 5:00 pm on July 24.

16. Following such execution, the purchaser's solicitors, by a letter dated June 21 to the vendor's solicitors, again asked that the probate be amended to include the roof and re-registered. This time, they asked by way of requisition. Their letter also requisitioned the amendment and re-registration of the assent.

17. On June 26, the vendor's solicitors wrote in response. As to the probate, they said : "We undertake to send you the Amended Probate No.1946 of 1995 upon the same has been received by us from the Land Registry." Then they dealt with the assent, denying that it required amendment.

18. The response which that letter drew was the purchaser's solicitors' letter of June 28. It insisted that the assent had to be amended and said why. But it was wholly silent as to the probate.

19. On July 17, the vendor's solicitors collected the probate from the Land Registry. And on the same day, they wrote to the Estate Duty Office seeking an amendment of the schedule to include the roof.

20. Within three days the Estate Duty Office made such amendment : by simply writing in the words "including the Roof thereof". And on July 20, the vendor's solicitors wrote to the purchaser's solicitors enclosing a copy of the amended schedule.

21. One cannot, however, go straight to that letter. That is because the question of the probate became snarled up with the question of the assent.

22. So first one must look at the vendor's solicitors' letter of July 19. It reads :

"We refer to your letter dated 28th June 1995 and the telephone conversation between your Miss Seto and our Mr. Li yesterday.

As requested, we now send you herewith the Assent Memorial No.6301528 duly amended together with its Memorial duly completed and our cheque for the sum of HK$530.00 being registration fee payable to Hong Kong Government for your re-registration. Further, we undertake to send you the probate Memorial No.6277471 duly amended as stated in your said letter dated 26th May 1995 upon the same has been received by us from Probate Registry. A copy letter dated 17th July 1995 addressed by us to Estate Duty Office is enclosed herewith for your reference.

We trust that we have answered all your requisitions."

23. Then came the letter of July 20 which I mentioned a moment ago. It reads :

"We refer to our letter to you dated 19th June 1995 and the telephone conversation between your Miss Seto and our Mr. Li this afternoon.

As requested, we now send you herewith a copy of Schedule of Property in respect of estate of Chick Sum Man also known as Man Chick Sun deceased duly amended by Estate Duty Office for your perusal and we are informed by Estate Duty Office that the original probate Memorial No.6277471 with the said Schedule annexed is lodged in the Probate Registry for approval. We repeat that we undertake to send you the original probate duly amended upon the same has been received by us from Probate Registry."

24. On July 21, the purchaser's solicitors replied to the vendor's solicitors' letter of July 19, saying this :

" We refer to your letter dated 19th July 1995.

As the probate No.1946 of 1995 is required to be amended by including the Roof of the captioned premises in the Schedule of Property annexed to the said probate, unless it could be shown that the probate has been so amended and the High Court in its probate Jurisdiction has endorsed such amendment on the said probate before the date of completion, your client does not have the right to dispose of the roof of the said premises yet.

One thing leads to another. Since the roof was not included in the probate yet, the Assent dated 17th May 1995, which purports to vest the captioned premises including the said roof in your client herself, is ineffective as far as the Roof is concerned because the said Assent was made before such amendment. To remedy the situation, a new confirmatory Assent has to be made.

We are instructed that, unless and until the above issues are solved before the date of completion, our client is not obliged to complete his purchase."

As can be seen, the insistence there was upon a confirmatory assent.

25. The vendor's solicitors did not agree that a confirmatory assent was necessary. By their letter of July 21, they said :

"We refer to your letter of today's date.

Our client is the sole executrix and also the sole beneficiary of the estate of Chick Sum Man also known as Man Chick Sum deceased ("the estate"). Thus, no matter by virtue of the will or the probate being the executrix of the estate or by virtue of Assent as the beneficial owner, she is entitled to sell the above Property.

We are of the view that the description of the roof in the schedule of probate Memorial No.6277471 is an error in omission and such omission has been duly amended by Estate Duty Office therefore all encumbrances in respect of the estate are cleared. The original of the said probate is being lodged with the Probate Registry for endorsement, which is only a matter of procedure. Hence, we undertake to produce the endorsed probate to you once we receive the probate back from the Registry.

We do not consider there is defect in title and do not share with your view that your client is entitled to rescind the contract."

26. Responding, the purchaser's solicitors said this in their letter of July 22 :

" Your letter dated 21st July 1995 refers.

As admitted by you, the amendment to the Schedule of the Property, albeit already endorsed by the Estate Duty Office, is still required to be approved by the Probate Registry. Therefore, as long as the Probate Registry approval is not obtained, your client's title to the Property has not been confirmed yet.

Furthermore, it is not for you and us to consider whether the omission is a pure matter of procedure. In fact, we think the addition of assets in the Schedule of Property is a material omission.

Even if the omission is a matter of procedure, the procedure should be completed before your client is in position to assent the property in herself.

Therefore, we insist that the probate should be duly approved and amended by The Probate Registry and your client shall execute a fresh confirmatory Assent to vest the property in herself again."

As can be seen, that letter begins with insistence upon the Probate Registry's "approval" of the amended schedule; and it ends with insistence upon a confirmatory assent.

27. On July 24, the day fixed for completion, there were three letters from the vendor's solicitors to the purchaser's solicitors and four letters from the purchaser's solicitors to the vendor's solicitors.

28. Setting out all of those letters is unnecessary. It suffices to note : the basis on which the purchaser asked for his deposit back; and the basis on which the vendor forfeited the same.

29. As to the former, the purchaser's solicitors asked for the return of their client's deposit on the ground that the vendor had failed to "prove" a good title to the Property, and by virtue of clause 12 of the agreement for sale and purchase.

30. As to the latter, the vendor's solicitors said that their client forfeited the purchaser's deposit because he had "failed to complete the purchase at the time stipulated".

31. It is unnecessary to read out clause 12 of the agreement for sale and purchase because it adds nothing to the debate.

32. So there it is. Completion was fixed for 5:00 pm on July 24. At 5:17 pm on that day, the purchaser asked the vendor to give him back his deposit. And one minute later, she forfeited it.

33. As to the vendor's duties, the judge said this :

" It is common ground that the Vendor has the twin duty of both (i) showing the title agreed to be given and (ii) giving or making good title. As to the first part of the obligation which is to show a good title, it was accepted that good title was shown at the latest when a copy of the amended Schedule from the Estate Duty Office was produced on 20 July 1995. As regards the second part of the obligation, namely to make a good title, counsel for the Vendor appeared to accept that all things being equal, the Purchaser was entitled to have a certified copy of the original amended Probate, being the root of title in this case."

34. The issues, the judge said, were :

"(i) whether the Vendor had fulfilled her contractual obligations in respect of making or giving title to the property; and if not, whether

(ii) the Purchaser was estopped from insisting on having a certified copy of the Amended Probate before completion."

35. It will be seen that the question of a confirmatory assent, much as it had featured in the earlier debate between the solicitors, was no longer insisted upon when the matter got to court.

36. As for the judge's views, they were : that the probate was a document of title; and that the schedule annexed to the probate was part thereof. On those views, the judge concluded that because the vendor had failed to put a certified copy of "the original amended Probate" into the purchaser's hands on the day fixed for completion, she had failed to make or give good title although there had been no failure to show good title. And she gave judgment as she did accordingly.

37. It will be noted that the purchaser had asked the judge to declare that good title had not been "shown" rather than, as the judge held, that good title had not been made or given. But that may go more to form than to substance.

38. For the vendor, Miss Yuen has taken essentially three points of substance. Of these, the first is that a probate is not a document of title in Hong Kong where the position is as it was in England before the coming into force of s.36 of the Administration of Estates Act, 1925. In this connection, Miss Yuen drew our attention to the decision of Clauson J in the case of In re Miller and Pickersgill's Contract [1931] 1 Ch 511. As to that case, it suffices to read the headnote of the report which is as follows :

" In view of s.36 of the Administration of Estates Act, 1925, which provides for the indorsement, after January 1, 1926, on the probate or letters of administration of notices of assents or conveyances of a legal estate by a personal representative, a purchaser of real estate can now require a vendor to include a probate or letters of administration in such statutory acknowledgment for production and delivery of copies of muniments of title as the vendor may be bound to give."

39. Reverting to the position in Hong Kong, Miss Yuen drew attention to the provisions of the Conveyancing and Property Ordinance, Cap.219. In particular, she drew attention to s.2 wherein assents are included in the expression "assignment" but probates are not.

40. As it seems to me, Miss Yuen is probably right on this point. But even if she were not, Miss Yuen has other points.

41. Her second point comes to this. Even if a probate were a document of title - which it probably is not - the schedule of property annexed to it is certainly not part of the probate. Such schedule, therefore, is not itself a document of title or any part of one. This argument is plainly right. It is true that when one talks about an annexure to a document one is usually talking about something which has become part of that document. But these schedules of property are prepared by the Estate Duty Office purely for its own purposes. They are not issued by the Probate Registry, and are wholly distinct from and form no operative part of any probate itself qua probate. All that happened when the amended schedule here was sent to the Probate Registry is that the registry applied a chop to the amended schedule saying that the amendment had been recorded on the copy deposited with it. There was no question of any amendment to the probate itself.

42. There is a third point on which Miss Yuen is entitled to succeed in any event; and it is this. Here, there was plainly contemplated completion by way of undertaking in the normal way. And there can be no suggestion that the undertaking offered by the vendor's solicitors, assuming it to have been necessary to begin with, was in any way inadequate as an undertaking. All that happened was that at a late stage, the other side set its face against any undertaking. That was contrary to the position as governed by normal conveyancing practice between solicitors. And was also at variance with the way in which the two sides gave each other to believe that they were to behave.

43. I would allow this appeal, set aside the judge's order and dismiss the purchaser's claim. Apart from thanking counsel for their assistance, it remains only to observe that the question of costs will of course have to be dealt with in a moment's time.

Mayo, J.A.:

44. I agree entirely with the judgment which has been delivered by My Lord, Bokhary, J.A., and there is nothing useful that I can add.

Nazareth, V.-P.:

45. I also agree.

46. [Costs here and below were awarded to the appellant vendor]