CHAU FEI AND ANOTHER v. LI YEE WAH

1995 M.P. No. 1116

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 pursuant to Section 12 of the Conveyancing and Property Ordinance, Cap. 219. The Plaintiffs are the proposed purchasers of a flat in North Point and the Defendant the vendor.

2. The Plaintiffs seek declarations (in their originating summons expressed as orders) that two requisitions raised have not been satisfactorily answered; that a general power of attorney was defective, so that no title was passed to the Defendant; and that good title has not been shown by the Defendant.

3. The parties entered into a sale and purchase agreement dated 1st April 1995 which provided for completion on or before 27th April. Section 7(a) of the agreement provided :

"The Vendor shall give good title of the Property in accordance with Section 13 of the Conveyancing and Property Ordinance Cap. 219 and the Vendor shall at his own expenses to produce any certified, attested or other copies deeds and documents of title wills and matters of public records to prove and complete such title ("the title deeds") and the cost of verifying the title by inspection and examination including search fees shall be borne by the Purchaser."

4. By letter dated 19th April, the Plaintiffs' solicitors asked for a certified copy of a Deed of Mutual Grant relating to a right of way over the property for their perusal. The Defendant's solicitors replied on 22nd April that they would only undertake to send a certified copy upon receipt from the Land Registry. By letter dated 25th April, the Plaintiffs' solicitors insisted that a certified copy be sent to them before completion. On 26th April, the Defendant's solicitors sent the Plaintiffs' solicitors an uncertified copy of the Grant. Completion, which was due the following day, passed without the provision of a certified copy to the Plaintiffs' solicitors. Ultimately, on 31st May, the Defendant's solicitors produced a certified copy. Neither party having sought to rescind the agreement, Mr. Wong for the Plaintiffs accepts that that requisition has now been complied with.

5. For the Defendant, Mr. Lee argued that the Defendant was under no duty to provide a certified copy of the Grant because of the provisions of para. 7(a) of the agreement. He said that the words following the reference to Cap. 219 cut down the duty imposed upon the vendor who can discharge his duty by the production only of a plain copy of a document.

6. I reject that argument. I agree with Mr. Wong that the Defendant as vendor is bound by the provisions of section 13 of Cap. 219. The words upon which Mr. Lee relies do no more than prescribe that the Defendant must at his own expense produce the documents which are required by Cap. 219 and in the form therein prescribed. Accordingly, so far as it is any longer relevant, I find that that requisition was properly raised and has now been satisfactorily answered.

7. I reject Mr. Lee's subsidiary argument that there was an implied term in the agreement that reliance could be placed upon the usual practice in the legal field of undertaking to provide certified copies after they had been obtained from the Land Registry. First, such an argument was not raised in relation to the requisition until the Defendant, through his solicitor, filed an affirmation in response to the Plaintiffs' originating summons. Second, a term will only be implied into an agreement if it is necessary to give efficacy to the agreement. There was no such necessity in relation to the agreement between the parties. Third, para. 28 of the agreement provides that the agreement "sets out the full agreement between the Vendor and the Purchaser and supersedes all previous agreements whether in writing or oral or implied ...". In the face of such a provision, it is difficult to see how the Defendant can suggest that there was some implied term. In any event, the evidence of the Defendant's solicitor is wholly inadequate to establish any such legal practice.

8. The assignment to the Defendant was executed by the donee of a power of attorney (the instrument) which was in the following form :

"THIS GENERAL POWER OF ATTORNEY is made the 17th day of May

One thousand nine hundred and ninety-three by SZE SAU TUAN SANTOS of Flat C, 21st Floor, Everwin Building, Nos. 406-408 King's Road, Hong Kong (whose former Philippines Passport No. F870905 has been revoked and now holds her new Philippines Passport No. L789646).

I hereby appoint SANTOS JACOB S. ( ) of the same address as aforesaid (Holder of Hong Kong Identity Card No. XXXXXXX(X)) to be my Attorney in accordance with Section 7 of the Powers of Attorney Ordinance, Cap. 31 of The Laws of Hong Kong.

I further declares and confirms that the Power of Attorney herein shall be irrevocable notwithstanding the death bankruptcy or other incapacity on my part at any time hereafter."

9. Section 7 of the Powers of Attorney Ordinance, Cap. 31 (the Ordinance) reads :

"7. Effect of general power of attorney in specified form

(1) Subject to subsection (2), a general power of attorney in the form set out in the Schedule, or in a form to the like effect but expressed to be made under this Ordinance, shall operate to confer-

(a) on the donee of the power; or

(b) if there is more than one donee, on the donees acting jointly or acting jointly or severally, as the case may be,

authority to do on behalf of the donor anything which he can lawfully do by an attorney.

(2) ......

SCHEDULE POWERS OF ATTORNEY ORDINANCE (Chapter 31) FORM OF GENERAL POWER OF ATTORNEY FORPUR POSES OF SECTION 7

[s. 7]

THIS GENERAL POWER OF ATTORNEY is made this day of 19 by AB of (address)

I appoint CD of (address) [or CD of (address) and EF of (address) jointly or jointly and severally] to be my attorney(s) in accordance with section 7 of the Powers of Attorney Ordinance."

10. In their letter dated 19th April, the Plaintiffs' solicitors contended that the instrument did not comply with section 7 of the Ordinance and was not valid. The Defendant's solicitors contended that the instrument was "in a form to the like effect" and that the paragraph which declared the power to be irrevocable did not affect the validity of the appointment of the attorney.

11. In Re Black Bolt and Nut Association of Great Britain's agreement (No. 2) [1962] 1 All ER 139, Lord Evershed said at p. 145 :

"But when one speaks of a written instrument and then of some other instrument 'to the like effect', I should have thought that as a matter of ordinary English, what was meant was that, according to the natural construction of the words used in the second agreement, it was one which was intended to operate in substantially the same way as the first."

12. That passage was cited by the Court of Appeal in Multi-More Industries Ltd. v. Tung Hoo Fai [1991] 2 HKC 261. There the Court of Appeal was dealing with a general power of attorney expressed to be in accordance with section 7 of the Ordinance, but which specified certain properties and appointed the attorney to deal with the properties. The Court held the power not to be within section 7 although found it to be valid at common law. At p. 267, Nazareth J.A. said :

"On its plain meaning, s 7 provides for two types of general powers of attorney, ie first, a power of attorney in the form set out in the Schedule and, second, a power of attorney in some other form to the like effect but expressed to be made under the Ordinance. Both are plainly and equivocally given the same effect; they operate to confer on the donee authority to do on behalf of the donor anything which he can lawfully do by an attorney. Such authority is obviously wider than what is conferred by the power of attorney or any 'general power of attorney' limited to a particular property or subject matter."

In that case, the authority conferred was cut down by the terms of the power of attorney conferring it. By parity of reasoning, Mr. Wong said that in the present case the instrument goes beyond what was intended by section 7 because the donor purported to make the authority irrevocable so that in effect the donee was appointed as the alter ego of the donor for the rest of the donor's life. An authority thus unlimited in terms of scope and duration is not within the contemplation of the Ordinance and does not fall within the rubric "in a form to the like effect".

13. Mr. Lee argued that the paragraph in the instrument purporting to make the authority irrevocable did not add to the operative power of the instrument, was unenforceable and redundant. The paragraph could therefore be severed, leaving a valid section 7 power of attorney.

14. Mr. Wong contended that severance is irrelevant. He said that, as Nazareth J.A. had pointed out, there can be only two types of section 7 power of attorney, that is in strict form or to like effect. He said there cannot be a further form from which the offending parts can be severed so as to save the instrument.

15. Mr. Wong conceded, however, that if the offending paragraph is entirely redundant, it could be argued that it should be treated as not in the instrument, so that the instrument would be "to like effect". I think Mr. Wong's argument there contains a fallacy because if the offending paragraph is treated as not there, the instrument would then be in the prescribed form. Either way, however, it would be a valid instrument.

16. According to Mr. Wong, however, the paragraph is not redundant. The instrument was by deed and was effective to make the authority irrevocable whereas a general power under section 7 would be revocable at will. There is therefore an extension of the effect of the power, thereby disabling it for the purpose of section 7.

17. I am persuaded by Mr. Wong. The instrument is plainly not in the form prescribed by section 7 nor, in my view, is it in a form to the like effect.

18. Mr. Lee then argued that the instrument is effective at common law. He pointed out that on 29th December 1994, the day upon which the assignment to the Defendant was executed by the attorney, the donor signed a confirmation letter that the power of attorney was still valid. That letter was witnessed by the solicitor who witnessed the signature of the attorney on the assignment. Mr. Lee said that, taking all material into account, the intention of the donor to confer authority on the donee to deal with her affairs is manifest.

19. I disagree. At common law, a power of attorney is required to be drawn with some particularity. If that was not the case, there would be no need for section 7 of the Ordinance. I am quite satisfied that this instrument is not valid at common law.

20. Mr. Lee further argued that the donor is now estopped from claiming any interest in relation to the premises and is bound by the power of attorney. Further, the Plaintiffs will be at no risk of any successful assertion against them by the donor. Consequently, the title is a good one.

21. In my judgment, neither of these arguments is valid. Mr. Lee relied upon Kan Wing Yau & Another v. Hong Kong Housing Society [1988] 2 HKLR 187. That case and cases such as MEPC Ltd. v. Christian-Edwards [1978] Ch. 281 concerned doubtful titles which would expose a purchaser to risk or hazard. Those cases have no application to a case such as the present one where, because the instrument was ineffective, no title has been passed to the Defendant, so that the Defendant has no title to confer on the Plaintiffs.

22. In the circumstances, I hold that one of the requisitions at least has not been properly answered; that the instrument was not valid; and that the Defendant has not shown good title. Accordingly, I grant declarations in terms of paras. 1, 2 and 3 of the originating summons.

23. I also make orders nisi that the Defendant return any deposit and payments made to him by the Plaintiffs, and that the Plaintiffs have their costs.