WONG MO YUEN AND ANOTHER v. CHOI CHIU MAN AND ANOTHER

HCMP 988/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 988 OF 2013

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J U D G M E N T
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A. Background

1.  These proceedings concern the property known as Lot No 583 in DD 115, Yuen Long, New Territories (“the Property”).  The plaintiffs are the co‑owners of the Property.  By a Block Crown Lease dated 24 January 1905 the Property was first granted to Wong Tseung Ip and Wong Hing Ip both of Wong Uk Tsuen as crown lessees (66‑68). The Property is said to have been mortgaged (together with Lot 584 in DD 115) to a Lam Fat Chuen for payment of $44 (“the mortgage”).  No other details are known about the mortgage.

2.  By an assignment dated 16 April 1966 the Property was assigned to the 1^st named plaintiff and Wong Kam Yuen as tenants‑in‑common.  A memorial of the assignment of the same date states that the Property was assigned by Wong Hing Yip of Wong Uk Tsuen to the 1^st named plaintiff and Wong Kam Yuen both also of Wong Uk Tsuen subject to the mortgage (74).  The memorial bore the Chinese signatures of the above‑named three persons.

3.  By a Grant of Probate in respect of the estate of Wong Kam Yuen, deceased, dated 17 April 2002 and registered in the Lands Registry, the 2^nd named plaintiff as executor became a co‑registered owner of the Property together the 1^st named plaintiff.

4.  By an Agreement for Sale and Purchase dated 23 November 2012 (“the SPA”) the plaintiffs agreed to sell the property to the defendants with completion stipulated to be on or before 9 May 2013.

5.  On 4 December 2012, the defendants’ solicitors raised inter alia three requisitions that led to an exchange of correspondence with the plaintiffs’ solicitors.  The plaintiff’s solicitors gave detailed explanations in respect of the requisitions raised with the relevant supporting case law.  Unfortunately this did not appear to satisfy the defendants’ solicitors.  Due to the differences in the stance taken by the respective solicitors, the plaintiffs issued a vendor‑purchaser originating summons pursuant to section 12(1) of the Conveyancing and Property Ordinance (Cap 219) (“CPO”) on 7 May 2013 (1‑38) together with a supporting affirmation of Tang Chak Lam Gilbert filed on the same day (50‑64) seeking various declarations arising from the differences arising in the correspondence in relation to the three requisitions raised by the defendants’ solicitors.  The background to the issues raised in this Vendor and Purchaser summons was clearly and succinctly set out in that affirmation.

6.  At the hearing before me, the plaintiffs were represented by Mr Johnny Ma of counsel whilst the defendants were present, but were unrepresented.  Mr Ma confirmed that the defendants had been provided with his skeleton submissions a week earlier.  It was arranged for the court interpreter to provide the defendants with interpretation of the submissions made by Mr Ma.

B. 1^st requisition — mortgage requisition

7.  This related to the defendants’ solicitors requiring evidence that the mortgage referred to in the Block Crown Lease of 24 January 1905 for $44 had been discharged or is incapable of subsistence or is otherwise unenforceable.  No further details of the mortgage apart from its value are known.

8.  The question is whether the existence of this mortgage in anyway prevents the plaintiffs from proving good title as required by clause 7 of the SPA.  It is trite law that a good title does not mean a perfect title.  As was authoritatively stated by Litton PJ (as he then was) in Mexon Holdings Ltd v Silver Bay International Ltd [2000] 1 HKLRD 935 (CFA) the question of proof of good title “must be approached from the standpoint of a willing purchaser and a willing vendor, both possessed of reasonably robust common sense, both intending to see the transaction through to completion in terms of their own bargain.” (at p 942)

9.  It is also well established that if it is beyond any reasonable doubt that the risk is for all practical purposes illusory, then the court can and would be prepared to ignore it and dismiss any objection to title founded on it: Kan Wing Yau v Hong Kong Housing Society,unreported HCMP 2436/1987, 1 December 1987, Godfrey J (as he then was).

10.  Mr Ma drew my attention to four cases identified in paragraph 14 of his skeleton submissions where the court had some information about the repayment terms of the ancient mortgage and where the court was satisfied that the ancient mortgages were incapable of subsistence or was otherwise unenforceable by reason of section 19 of the Limitation Ordinance (Cap 347) (“the LO”).  Mr Ma very fairly pointed out that the defendants solicitors had sought to distinguish these cases by arguing that there was no information available as to what or when the repayment terms of the mortgage were.

11.  He however drew my attention to six other cases in where the court was bereft of any information about the repayment terms but was nevertheless prepared to declare that the mortgage was incapable of subsistence or was otherwise unenforceable.

(a) Cheng Tin Loi & Anr v Li Yung Hing & Anr [1999] 3 HKC 699; Yuen J (as she then was) — involved a mortgage recorded in the Block Crown Lease dated 27 March 1905 which showed the defendants as being mortgagees in possession.  The evidence revealed that since 1980 there had been no demand for repayment, the property being in the possession of the registered owners and that up to 1980 the property was in the hands of the same family and that it had been mortgaged to a another party and subsequently redeemed, which was unlikely to have occurred if the property was in the possession of the previous mortgagees.

(b) Chan Chun Wai Victor as Manager of Chan Fuk Wan Tso v Chan Wing Fook & Ors as Managers of Chan Hun Pong Tso (unreported HCMP 2018/1998, 10 June 1999, Yuen J (as she then was)) — involved a mortgage disclosed in the Block Crown Lease.  There was no evidence relating to the mortgage or of any action to enforce it.  The evidence showed that the property has been in the possession of the plaintiff Tso for more than 50 years and in the possession of another ancestor for about 90 years with no evidence that the mortgagee Tso or anyone on its behalf taking any steps to enforce the mortgage.

(c) Li Tai, Administratrix of the estate of Chan Muk Hoi, decd v Chan Fuk Un Shop with Chan Kan Tai as Trustee (unreported HCMP 263/1998, 17 June 1999, Yuen J (as she then was)) — involved a mortgage disclosed in the Block Crown Lease dated 24 January 1905.  The evidence showed that the plaintiff’s late husband enjoyed the property for the past 27 years, that the mortgage was very old and that there had been a number of owners since the time of the Block Crown Lease.  There was no evidence of any enforcement action being taken by the mortgagee and certainly not in the last 27 years.  Inquiries made by the plaintiff of the neighbourhood yielded no results.

(d) Chan Ma Choi the personal representative of Chan Kun Shau decd & Anr v Chan Sheung Ki (unreported HCMP 789/1998, 12 October 1999, Sakhrani J) — involved a mortgage recorded in the Block Crown Lease dated 24 January 1905.  The evidence revealed that since the plaintiffs and their families succeeded to the properties no one has come forward to demand repayment.  Since 1945 the plaintiffs and their family have been cultivating on the properties without interference, disturbance, claim or demand.  Efforts to locate the defendant were in vain.

(e) Tang Kam Sui as manager of Tang Lai Tong Tso & Ors v Tang Shui Ki (unreported HCMP 5111/2000, 18 April 2001, Deputy Judge S Kwan (as she then was)) — involved a mortgage dated 10 July 1911 which stipulated that the mortgage was to secure the payment of $150 on three months’ notice of any date, yearly interest of $27 payable by instalment of $13.50 at each crop.  Inquiries about the mortgagee yielded no results.  It was not known if the mortgagee ever gave notice to make payment to the two Tsos, and certainly since 1950s when the plaintiff took over as manager no such notice was given nor was there any payment of any yearly interest.  The court found that given the antiquity of the mortgage the possibility of the mortgagee giving three months’ notice was extremely remote and the mortgagee’s right to recover the principal and interest or any other remedy had been time‑barred.

(f) Ho Fuk Hing & Ors v Ho Mau Hing (unreported DCMP 2203/2005, 30 December 2005, Deputy District Judge K Lo (as she then was)) — involved a mortgage recorded in the Block Crown Lease dated 27 March 1905 with the notation “mortgagee in possession”.  The evidence revealed that since his birth in 1939 the 2^nd plaintiff had never paid any money under the mortgage nor was any demand made to him for any repayment.  Further that his inquiries did not reveal the existence of the defendant or his friends or relatives.  Further that since 1959 when the 1^st and 2^nd plaintiffs succeeded to the property, the defendant had not been in possession nor had any claim for repayment been made.  The court felt it was safe to infer that that the defendant had ceased to be in possession of the land as at least from 1959.

12.  These were all cases that were rightly and properly brought to the attention of the defendants’ solicitors by a letter from the plaintiffs’ solicitors dated 25 February 2013 (101‑2) however to no avail as they persisted with their stance.

13.  In the present case I have evidence in the form of the 1^st statutory declaration by the Wong Mo Yuen, one of the plaintiffs, to the effect that since the assignment in 1966, Wong Tseung Ip had long since passed away leaving no other relatives save for Wong Hing Ip, his younger brother.  Further that since the 1966 assignment, no one has ever challenged their title to the property.

14.  There is also further evidence by way of the 2^nd statutory declaration of Wong Mo Yuen wherein he states that since his birth on 3 February 1920 he has been living in Wong Uk Tsuen.  I am given to understand that the defendants have been living at the Property as tenants for more than 12 years.  The evidence also shows that the Wong clan lived at Wong Uk Tsuen and that it was a relatively small community that lived there.

15.  My attention was drawn to the case of Alpha Star Enterprises Ltd v The Personal representatives of Tang Mei Shin [2002] 4 HKC 218 which has been heavily relied upon by the defendants’ solicitors.  In that case, the plaintiff was seeking declaration pursuant to section 19 of the LO that the mortgage recorded in the Government Block Lease dated 24 January 1905 was incapable of subsistence or was otherwise unenforceable.  The Land Registry entry stated recorded “as stated in the Block Government Lease thee Lot is subject to mortgage in favour of Tang Mei Shin for $28.”

16.  I note that that case was not a vendor‑purchaser summons, but rather an application by the then registered owner against the mortgagee’s personal representative (although it was not known if any had been appointed).  Chung J stated that there were at least three ways in which a mortgage document may provide for payment to be made, namely, (i) prescribe the time when it was to be repaid; (ii) make it repayable on demand; and (iii) no express time be stipulated for it to be repaid, in which event it may be argued that it was repayable after the lapse of a reasonable time.  Chung J declined to grant the declaration on the basis that the plaintiff failed to discharge its burden of proving which of the three modes of discharging the mortgage applied in that case.

17.  I note that Chung J was not there concerned whether good title could be shown, which is the issue before me.  The absence of any information about the details of repayment under the mortgage do not alter the fact that whichever mode of repayment to redeem the mortgage may have been set out in the mortgage document, I am satisfied that on the evidence before me, the mortgagee’s right to recover the money would have become time‑barred by now.

18.  I am satisfied that the mortgage created more than a century ago has by now been discharged.  Common sense dictates that the repayment date would in all probability have been within the lifetime of the mortgagee.  Alternatively I am satisfied that given the antiquity of the mortgage and the lengthy inaction on the mortgagee’s part that the mortgage is no longer in subsistence. In my view if the matter is “approached from the standpoint of a willing purchaser and a willing vendor, both possessed of reasonably robust common sense, both intending to see the transaction though to completion in terms of their bargain.”[1]

19.  In my view the supposed defect raised by the defendants’ solicitors is “so theoretical that the chances of it ever being treated as a defect in the vendor’s title are so remote that they can be discounted for all practical purposes.”[2]

20.  In order to put the matter beyond any reasonable doubt, I am further satisfied that it is unenforceable by reason of section 19 of the LO.  I am therefore satisfied that the 1^st requisition has been satisfactorily and sufficiently answered by the plaintiff.

C. 2^nd requisition: evidence of identity discrepancy

21.  As noted in paragraph 1, the property was first assigned to the two Wongs of Wong Uk Tsuen.  In the assignment memorial in 1966, the name of the assignor appears as Wong Hing Yip of Wong Uk Tsuen.  I was told and also have noted that the Chinese characters of Wong Hing Ip as appears in the Block Crown Lease (68) and in the memorial assignment (74) are identical.

22.  The defendant’s solicitors demanded for documentary proof that the two names refer to the one and same person.  The legal principles applicable to resolving questions of discrepancies in identity and/or signatures are well established and are as follows: (i) evidence is admissible to identify the party involved; (ii) potential title defects arising from such discrepancies can be remedied by “proper conveyancing evidence”; and (iii) what amounts to “proper conveyancing evidence” depends on the circumstances, see Wu Chuk On & anr v Long Chain Development Co Ltd,HCMP 482/2007, 21 May 2007, Chung J at paragraph 12.

23.  In the two statutory declarations (116 and 94‑97) made by Wong Mo Yuen, one of the plaintiffs, he states as follows:

(i) that Wong Tseung Ip and Wong Hing Ip were his clan’s elder brothers;

(ii) that the former had died long ago leaving no other next of kin, siblings or wife save for his younger brother, Wong Hing Ip, and that no one had come to challenge their title since the property was assigned to them in 1966;

(iii) that he has been living at Wong Uk Tsuen since he was born in 1920, and that he came to know all the inhabitants living there as it was a small community.  That Wong Hing Ip’s (Yip) natural elder brother Wong Tseung Ip lived in Wong Uk Tsuen and they both carried out farming on the property until the elder brother died of starvation during the Japanese occupation and was buried in the hillside of Wong Uk Tsuen by the younger brother Wong Hing Ip (Yip);

(iv) that he knew Wong Hing Ip (Yip) personally, that there was only one such person living at Wong Uk Tsuen and that Wong Hing Ip had been farming the land until he assigned the property to him and Wong Kam Yuen in 1966; and

(v) that Wong Hing Ip and Wong Hing Yip refer to the one and same person, as there was only one person with that name who lived in Wong Uk Tsuen.   

24.  I am satisfied that the aforesaid matters are proper conveyancing evidence in the circumstances of this case to sufficiently satisfactorily answer the 2^nd Requisition. I do not see any conflict in the fact that Wong Mo Yuen, who made the statutory declaration, is also one of the vendors.  I am satisfied that what he asserts in the two declarations are matters based on his personal knowledge and not reliant on any hearsay evidence.

25.  I am satisfied that they are matters which the court can reliably and confidently rely upon to satisfy itself that the 2^nd Requisition does not raise any matter that casts any uncertainty as to ability of the plaintiffs to show good title to the Property.

D. 3^rd requisition: joint tenanacy/ death issue

26.  This relates to the defendants’ solicitors requiring proof that the ½ share of Wong Tseung Ip had been assigned to Wong Hing Ip (Yip) so that the latter was the sole owner of the Property when he assigned it in 1966.

27.  Mr Ma on behalf of the plaintiffs argued that prior to the 1925 Law of Property Act in the UK there was an ancient presumption that where the legal title was vested in two or more persons they were joint tenants and not tenants in common.  Accordingly prior to 1926 in the light of the presumption, a conveyance to two or more persons created a joint tenancy of the legal estate unless either (i) one of the unities were absent; or (ii) words of severance were employed.  In the UK since 1925 joint tenancy has been the only form of co‑ownership of a legal estate.[3]

28.  Mr Ma argues that in Hong Kong the ancient presumption applied until the enactment of section 9(1) of the CPO, which stipulates as follows:

“Where a tenancy in the same estate or interest in land vest in 2 or more persons under an instrument or a will, it shall be presumed, unless the contrary intention is expressed in that instrument or will, that the tenancy vests in those persons as tenants in common.”

29.  Mr Ma drew the court’s attention to the fact that in the present case the four unities were present:

(a) as regards the unity of possession, prima facie co‑owners have the right of possession in common to every part of the land: Jumbo King Ltd v Faithful Properties Ltd & Ors 9 (1999) 2 HKCFAR 279, per Litton PJ at 290.

(b) as regards the other three unities, it is clear that the original Crown lessees Wong Tseung Ip and Wong Hing Ip (Yip) derived their title interest from the same Block Crown Lease (unity of title), acquiring that interest at the same time (unity of time) and they held their interest together under the Block Crown Lease (unity of interest).

30.  Mr Ma contends that given the above, if the defendants wish to contend otherwise, then onus is on them to prove otherwise.  He submits that the arguments raised by the defendants’ solicitors that equity favours tenancy in common and that equity prevails over the law (106) is misconceived and wrong.  In this regard I note what Baroness Hale of Richmond stated in her speech in Stock v Dowden (2007) 2 WLR 831 (HL) as follows: “… it should be assumed that equity follows the law and that the beneficial interests reflect the legal interests in the property” and that the “onus is on upon the person seeking to show that the beneficial ownership is different from the legal ownership” and “[t]he burden will therefore be on the person seeking to show that the parties did intend their beneficial interest to be different from their legal interests, and in what way” (paragraphs 54, 56 and 68).

31.  As the defendants were unrepresented at the hearing, Mr Ma very fairly and properly dealt with the remaining argument that had been raised by their solicitors.  This was to the effect that there was a general presumption of tenancy in common in respect of conveyancing practice involving New Territories land relying on the case of Yau Kwai v Yau Kar Siu (HCMP 1363/2003; Tang J (as he then was)).  I am of the view that this reliance by the defendants’ solicitors on that case is misconceived and reflects a misreading and misunderstanding of the judgment of Tang J.

32.  Tang J specifically referred to the Privy Council decision of Wu Koon Tai & Anr v Wu Yau Lai (1996) 3 HKC 559 and the following passages from the judgment of Lord Browne‑Wilkinson:

“It is plain that after the Peking Convention, the whole system of land tenure in the New Territories was fundamentally altered. Leases from the Crown were substituted for old titles under the pre‑existing law. A system for deducing title too such titles was imposed, dependent on registration of deeds. To allow the old customary land law to cut across and to trump the new system would be to defeat its whole purpose.

In their Lordships’ view, the devolution of title to land in the New Territories, whether by inter vivos transaction or on death, is regulated by the registration system and the general law of Hong Kong.” (at p 566 at D and H)

33.  Tang J rejected the argument advanced on behalf of the plaintiffs in that case that there was no distinction between devolution of title and succession in the New Territories and that both were governed by Chinese customary law.  He found that such an argument was not only unsound but inconsistent with the Privy Council decision in Wu v Wu.  In his view, he had “no doubt that conveyancing practice in the New Territories have been conducted on the basis that persons in the position of the parties here hold their respective interests as tenants‑in‑common and that their devolution of interests and interests is governed by the general law.  Any decision to contrary would cause havoc.” (paragraph 28)

34.  A distinction of some importance is that in the Yau case there was single registered owner and the argument was that the property was family property and that therefore the 1^st and 2^nd defendants did not have any interest they could sell.  The plaintiffs were seeking a declaration that the sale by the 1^st and 2^nd defendants to the 3^rd defendant was null and void under Tsing Law.  Tang J held that the concept of family property was not part of the law of Hong Kong.

35.  On the other hand the Block Crown Lease in respect of the Property was registered jointly in the names of Wong Tseung Ip and Wong Hing Ip (Yip).  On the evidence I have been presented with I am satisfied that Wong Tseung Ip died long ago and that under the doctrine of survivorship or jus accrescendi, Wong Hing Ip (Yip) became the sole owner after the death of his brother.

36.  The final matter raised by the defendants’ solicitors was for a certified copy of the death certificate of Wong Tseung Ip as well as a Certificate of Exemption of Estate Duty (114).  In this regard I note that in his 2^nd statutory declaration Wong Mo Yuen states that he has not seen any death certificate of Wong Tseung Ip, which is not surprising if he died of starvation during the Japanese occupation.  In my view, the statutory declaration is appropriate and admissible secondary conveyancing evidence of proof of title for present purposes.  As was stated by Godfrey J in Lee Yeung Chun & Anr v Ng Choi Chun (1990) 1 HKLR 468:

“When a statutory declaration is made for conveyancing purposes, the object is that it should serve as evidence to assist a vendor of the property in verifying his title. If an issue arises between vendor and purchaser in relation to which the content of such a declaration is material, the court will receive the statutory declaration as admissible evidence to be considered in deciding the point is issue.” (at 470F)

37.  I am satisfied that the statutory declaration of Wong Mo Yuen suffices to establish that Wong Tseung Ip is dead despite the absence of any certified death certificate.

38.  In my view the absence of any Certificate of Exemption of Death Duty does not amount to any blot on the title of the plaintiffs in all the circumstances of this case.  Given that more than 46 years have elapsed since the assignment in 1966, the likelihood of any lawsuit being instituted by the Government for any alleged estate duty (assuming any was payable at all) is in my view illusory and very remote and can be safely ignored.

E. Conclusion

39.  I am therefore satisfied that the plaintiffs have adequately and sufficiently answered the Requisitions raised by the defendants’ solicitors, and that they have shown good title to the Property.  I am satisfied that the plaintiffs are entitled to the declarations as sought by the Originating Summons, and I make an order in terms thereto.  I also order that there be no order as to costs.

40.  Finally it leaves me to thank Mr Ma for his very thorough and helpful submissions.  He is to be particularly lauded for his fair and comprehensive submissions that raised arguments on behalf of the unrepresented defendants in order that the court was presented with a balanced and full picture of the issues.  This is consonant with the best traditions of the Bar and is both welcomed and appreciated.