TSANG BING KWAN ANDES v. KOREA MARVEL CO. LTD.

1997, No.MP25

______________

H E A D N O T E

______________

Registered owner of property - a Korean company entered into Provisional Sale and Purchase Agreement to sell property to plaintiff - change of name of company subsequent to acquisition of property disclosed in title deeds - requisition relating to change of name

Legal opinion from Korean attorney to the effect that change of name valid - legal opinion conclusory - no certification of fact of change of name - whether good conveyancing evidence

Document in Korean from Seoul District Court Companies Registry made available to purchaser's solicitors at 5.31 p.m. on date fixed for completion - translation not provided - vendor requiring completion that day - whether vendor had discharged obligation to show good title

1997, No.MP25

IN THE HIGH COURT OF HONG KONG

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

______________

______________

______________

^{______________________}

J U D G M E N T

^{______________________}

1. This is a vendor and purchaser summons taken out by the Purchaser on 3 January 1997. The relief sought is a declaration that requisitions raised had not been sufficiently answered, that good title had not been shown and that the initial and further deposit paid totalling $390,800 should be repaid together with interest.

2. The property which is the subject matter of these proceedings is New Kowloon Inland Lot No.6030 (Workshops Nos.B22 and B23 on the 5th Floor of Block B of Proficient Industrial Centre at No.6 Wang Kwun Road, Kowloon, Hong Kong ("the Property"). The registered owner of the Property is Korea Marvel Company Limited ("the Defendant"), a Korean company.

3. On 14 October 1996, a Provisional Agreement was entered into by the Purchaser and by the Defendant acting through its Hong Kong branch. Completion was scheduled for 14 November 1996. On or about 25 October, title deeds were produced. Amongst those deeds was a Confirmation dated 12 October 1996 stating that Korea Marvel Co. Ltd. had changed its name to Hansol Electronics Inc as of 31 October 1995. It is to be noted that the Confirmation was executed almost a year after the change of name and that notwithstanding the change of name, the Provisional Agreement was entered into by the Vendor under its old name. A requisition was raised, inter alia, relating to this change of name. The only issue before this court relates to that requisition. The power of attorney is no longer a live issue.

4. It should be mentioned that completion was extended by the parties to 23 December 1996. In response to the requisition regarding the change of name, the Vendor furnished a legal opinion from Sung Geun Kim of Shin & Kim, Attorneys at Law in Korea. That Legal Opinion is dated 9 December 1996 and I quote the relevant parts :

"... I have examined the Articles of Incorporation, the Regulations of the Board of Directors and such other internal Regulations and documents of the Company, and considered such questions of laws, as I have deemed necessary for the purpose of rendering the opinion hereinafter set forth.

Having examined the above documents and having regard to the relevant laws of the Republic of Korea, I am of the opinion that :

1. Under the laws of the Republic of Korea, Korea Marvel Company Limited has legally and validly changed its name to Hansol Electronics Inc as of 31st October 1995 and thereafter, all the assets and liabilities of Korea Marvel Company Limited will be held and borne under the name of Hansol Electronics Inc."

5. The first question which arises is whether this Legal Opinion sufficiently answers the requisition. The Purchaser submitted that it does not. The Property is registered under the name of Korea Marvel Company Limited and the change of name is a question of fact. In Hong Kong there would be a certificate of incorporation on change of name which would be registered at the Land Registry and that would supply the missing link when the proposed assignment which would be executed by the Vendor under its new name is lodged for registration.

6. The Legal Opinion supplied is conclusory. It did not purport to certify as a fact that there had been a change of name. Whilst a legal opinion can, in appropriate circumstances, constitute secondary evidence and even good conveyancing evidence if the Vendor is able to satisfy the Purchaser that the primary evidence of fact is not available and offers a good and valid reason for its unavailability. In the present case, the Legal Opinion merely states the author's own opinion. It did not set out the relevant law of Korea or the relevant documents and can really offer little comfort to any purchaser asked to rely on it.

7. In fact, it emerged on the day of completion that primary evidence is available. At 5:31 p.m. on 23 December, certain documents in the Korean language were faxed to the Purchaser's solicitors. These are stated to be documents from the Seoul District Court Companies Registry. There is a covering letter stating that the English appearing on one of the pages had been added by the Vendor's solicitors. On the relevant page written in English are the following phrases :

"Seoul District Court Companies Registry
Korea Marvel Company Limited
Hansol Electronics Inc
Old address
New address"

The document itself contained nothing in English. Unless one could read Korean, one is not able to say whether the English translation that had been written in is accurate and whether it is a correct phonetic transliteration of the words constituting the Company's name appearing in Korean. Be that as it may, the Vendor insisted that completion take place that day, that is to say, it was invoking the midnight rule.

8. The fact that there is a document which constitutes primary evidence of fact is fatal to the submission that the Legal Opinion is a sufficient answer to the requisition.

9. The next issue is whether by supplying the documents in Korean allegedly evidencing the change of name, the Vendor had sufficiently discharged its duties. The Court of Appeal decisions in Kok Chong Ho v. Double Value Developments Limited [1993] 2 HKLR 423 and Active Keen Industries Limited v. Fok Chi Keong [1994] 1 HKLR 396 contain clear statements of the Vendor's duty. The Vendor does not only have to make good title at completion but is also under an obligation to show good title by properly answering the requisitions raised by the Purchaser at a reasonable time before completion is due to take place.

10. In the present case, by supplying documents in a foreign language after the close of business on 23 December, the date for completion, the Defendant had clearly not discharged its obligations. One wonders why when the Legal Opinion was provided, those documents from the Companies Registry were not exhibited. If it had been, the probability is that this dispute would not have arisen.

11. In the circumstances, I will grant the relief sought in paragraphs 1 to 3 (inclusive) of the Originating Summons, with interest at 8% from the date of the Summons until judgment. Costs are to follow the event and the Plaintiff is entitled to costs.