CHO TAK PO AND ANOTHER v. CHAN KWOK WAI AND ANOTHER

HCMP 774/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 774 OF 2012

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J U D G M E N T

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1.  This was the hearing of a Originating Summons by the plaintiffs (as potential purchasers) seeking a declaration that the defendants (as potential vendors) had failed to answer requisitions satisfactorily and/or failed to show a good title. They also sought the return of deposits and other associated relief.

2.  The relevant history of ownership of this property begins in 1997.  By a deed of assignment dated 10 November 1997, Lau Sze Wo and Wong Siu Ying, then or shortly afterwards husband and wife, both living at 115 Old Pan Chung Village, Tai Po, in the New Territories became joint tenants of the property in question.  In the first schedule of the assignment the tenants are identified by the English form of their names as well as the Chinese form.

3.  The two purchasers signed the document using the Chinese form of their names and they were identified by their respective Hong Kong Identity Card numbers.  That of Wong Siu Ying was G511808(4).  This is a material point of identification.  Both signatures were witnessed by the solicitor Mr Eli Ka Kui Tsui of the firm Eli Ka Kui Tsui & Co, whose clerk Mr Jackson F T Hung interpreted the document to the purchasers and signed to that effect.

4.  It is also of relevance to note that on that 1997 assignment, the solicitors acting for the vendors were Tai, Tang & Chong whose clerk Tsang Chor Yiu signed as witness to the vendor’s signatures and as having interpreted the document to the vendors.  The clerk’s signature was duly verified in writing by Mr Lee Kwok Lun, a solicitor in the same firm.

5.  The document was also signed by a director of Omar Investment Limited, the company which was the confirmor of the transaction.  That signature was witnessed by Mr Yaddy Cheung, the solicitor.

6.  I point out these features because Tai, Tang & Chong are also the solicitors for the potential purchasers in this dispute and Yaddy Cheung & Co. are also the solicitors for the potential vendors in this dispute.  Both firms of solicitors were intimately concerned as solicitors for parties in the 1997 transaction.

7.  The next document of relevance is the order of Her Honour Judge Chu in the District Court in the matrimonial proceedings following the collapse of the marriage of the husband and wife, the joint tenants of the property assigned to them as purchasers in 1997.

8.  The order is dated 16 July 2008.  It dealt with the matrimonial property.  Two items are important.  The ex-husband, Lau Sze Wo, was to assign his interest in the matrimonial home in California, USA – 31 Crosby Court, Pacheco, CA 94553, USA – to Wong Siu Ying.

9.  Secondly, his ex-wife Wong Siu Ying was to assign her interest in Shop 2, Shop S77, 2/F, Commercial Podium, Sincere House, 83 Argyle Street, Kowloon, being the property which the two of them had purchased as joint tenants in 1997, to her ex-husband Lau Sze Wo.  This is the property which is the subject of these proceedings.

10.  It is now necessary to move on to 2010/11 to the assignment by Wong Siu Ying to her ex-husband of the property in question to comply with the court order I have identified and whose relevant detail I have set out.  It is the assignment to vest title to the commercial property in Lau Sze Wo which has excited the concern of the solicitors for the potential purchasers and given rise to requisitions which have been repeated almost ‘ad nauseam’.

11.  The assignment by the ex-wife to the ex-husband is dated 1 September 2011 and was registered in the Land Registry on 22 September 2011 by Peter WK Lo & Co, solicitors for the assignee, the ex-husband Lau Sze Wo.

12.  The assignment at the start identifies the assignor and assignee in identical fashion to the 1997 assignment when they both took as assignees (joint tenants) i.e. English and Chinese names.  It recites the order of Her Honour Judge Chu.  The address of the assignor (ex-wife) is that identified in the court order as the former matrimonial home which is now hers, the ex-husband having assigned his interest in it as part of the property distribution contained in the order.

13.  It is signed in the name “Siu Ying Wong” as assignor, identified by production of Hong Kong Identity Card No G511808(4).  This transposition of the three names is one of the queries raised by the solicitors for the potential purchasers.  It is not recorded that it was witnessed, nor that it was interpreted.

14.  It is also signed by the ex-husband as assignee, using his Chinese name, as he had done on the 1997 assignment.  His signature is attested to by a Legal Executive to his solicitors, Peter W K Lo & Co, and there is a record of its contents having been interpreted to him by the same Legal Executive.

15.  Attached to the assignment is an Acknowledgment, which is a Notarial Certificate.  This, it is agreed, is registered with the assignment. It is clearly a standard printed form for the State of California.  It is completed by a Notary Public in the county of Alameda, Kathy Lozano, with her seal alongside her signature.  Her commission as Notary Public expires in January 2013.

16.  It recites the date 4 October 2010 which is some eleven months before the actual dating of the assignment.  Although some query was raised regarding the dates, in relation to each other, I see nothing problematic in this.  Frequently people are asked to sign documents by their lawyer, or others, with specific instructions to leave the date blank whilst other formalities are completed.  This document was prepared in Hong Kong and sent to the assignor in the United States of America and then had to be returned to Hong Kong.

17.  The fact that the assignor’s signature was in English only excited concern.  But the document itself identified both English and Chinese names.  A query was raised over the transposing of the names.  This event was 13 years after the assignment in which she signed using only her Chinese name and over time, western influence has been, as a matter of common knowledge and in general practice, to cause people to put the family name last instead of first.

18.  The Acknowledgment follows the order in which the assignor wrote her name on the document.  I find that quite in order.  But there is an even more extensive challenge to the reliability, value, and potential meaning of the Notarial document of Kathy Lozano.  She signs the following (inter alia):

“…Before me…personally appeared Siu Ying Wong who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same under authorised capacity and that by her signature on the document the person…..executed the instrument”

(My underlining)

19.  The complaint is made that the Notary does not identify in the Acknowledgment the nature of the ‘satisfactory evidence’ which proved identity.  The inference of this complaint is that the Notary failed to carry out her professional duty.  It overlooked that on the Acknowledgment she had to “certify under Penalty of Perjury… that the foregoing is true and correct.”  The Hong Kong Identity Card number was printed alongside the signature of Siu Ying Wong.  It is highly probable that that was produced to the Notary or certainly some other documents which satisfactorily proved identity to the Notary.  I consider it pedantic and wholly dismissive of the contents of the certificate and the status of the Notary to complain on the ground advanced.

20.  The solicitors for the assignee clearly accepted that all was in order.  Lau Sze Wo duly sold the shop to Chan Kwok Wai and Ng Lai Chu in December 2011 for a consideration of $1.52m HKD.  That assignment was registered on the 29 December and the title was regarded as good.  It was signed by the then vendor Lau Sze Wo in his Chinese name, both the English form and Chinese forms of his name being set out in the preamble to the assignment.  These are consistent with and identical to his names and signatures in the earlier assignments.

21.  Against this background the plaintiffs’ solicitors sent some requisitions as to title to the defendants’ solicitors starting with the letter of 31 January 2012.  The material requisitions essentially related to the assignment between ex-wife and ex-husband and the Notarial Acknowledgement.  In my judgment that requisition was answered fully and satisfactorily by the letter of 13 February 2012 from Yaddy Cheung & Co.

22.  The plaintiffs’ solicitors were not satisfied with this and wrote again on 21 February 2012.  In essence it merely repeated the requisition first made in respect of the difference between the form of the signature in 1997 and 2010.  Once again it was answered by Yaddy Cheung & Co. referring additionally to the Hong Kong Identity Card Number which was the same in both assignments albeit 13 years apart.

23.  Once again the plaintiffs’ solicitors were not satisfied and by letter on 23 February 2012 they asked Yaddy Cheung & Co. to obtain a Statutory declaration from the assignor of the 2011 assignment, the ex‑wife.  This was unreasonable.  Sensibly, in my view, Yaddy Cheung & Co. replied that it was an unnecessary requirement. The practicalities of compliance with such a request, even if thought necessary, could well be difficult, time consuming and dependent on the former wife, who had complied with a court order, being willing to go to the necessary trouble, probably at her own expense. 

24.  The plaintiffs’ solicitors were now going round in circles, repeating the requisition and receiving back the same response. Yaddy Cheung & Co. also sent a copy of a letter from the solicitors acting from the ex‑husband, the assignor of the property to Yaddy Cheung & Co’s. clients, who had dealt with an earlier query about title by sending a copy of the Court order and the text of a telephone conversation they had had with the former assignor, the ex-wife, in which she confirmed that she had assigned her interest in the property to her ex-husband.  For some reason which I do not understand the plaintiffs have sought to put a doubtful construction on the material sentence in that letter which is untenable.

25.  The result was that the plaintiffs’ solicitors continued to reject the answers given, persisted in what was clearly an unreasonable position highlighted by their letter of 20 March 2012.  Nonetheless Yaddy Cheung & Co. continued to try and explain and underline the position set out by them from the outset.  One sentence in their reply, which was unwise, unnecessary and an assumption which is probably inaccurate  is:

“Ms Kathy Lagano … may have no knowledge about Hong Kong conveyancing practice, thus failed to appreciate using the Hong Kong Identity Card as identity evidence.”

26.  As I have found, I think it highly probable that she used the Hong Kong Identity Card for identification.  It was sensibly the first step for a Notary.  The ‘fall back’ would be a passport.

27.  In any event, the patience and persistence with which the requisitions were met and answered, shows that Mrs Chan’s contention on behalf of the plaintiffs that the defendants were reluctant to sell is baseless.

28.  By late March 2012, statemate had been reached and the defendants gave Notice to Complete.  However the plaintiffs’ solicitors sought and obtained an extension to the completion date until 18 April 2012, but then continued to insist that by failing to answer the requisition good title had not been made out.  On 18 April 2012 they wrote asking for the return of the deposits paid on the basis that the defendants had repudiated.  This litigation then ensued.

29.  Mrs Chan referred me to a number of cases which are concerned with the principles involved in the establishing of good title by the vendors.  Inevitably each case turns upon its own facts and the principles to be applied are now well-known.

30.  Applying the dictum of Wilberforce J (as he then was) in re‑Stirrup’s Contract 1961 1 WLR 449 (at page 454):

“A purchaser is entitled to be satisfied that his vendor is seized of the estate which he is purporting to sell … and that the vendor is in the position, without the possibility of dispute or litigation, to pass that … to the purchaser.”

Lord Russell of Killowen, in M.E.P.C. v Christian‑Edwards (H.L.) 1981 AC 205 (at page 220) said:

“ In my opinion if the facts and circumstances of a case are so compelling to the mind of the court that the court concludes beyond a reasonable doubt that the purchasers will not be at risk of a successful assertion against him of the incumbrance, the court should declare in favour of a good title shown.”

31.  The other cases to which I have been referred have proceeded on the basis of these principles and it is not necessary for me to review them here and distinguish them on their facts.  The circumstances of the case before me do not constitute ‘circumstantial evidence’ as referred to in Lam Ki I v Tsui Ming Yee 1989-91 CPR 561 (Godfrey J (as he then was)) at page 563.  They go far beyond that.

32.  It is necessary to stand back and look at the facts objectively and not be seduced by a lust for litigation.  To put this case in its proper context, the dispute raised by the plaintiffs is that it has not been shown that the title passed by Wong Siu Ying (or Siu Ying Wong) to her ex‑husband is a good one — or, in bare terms, that the person who signed herself Siu Ying Wong, on that assignment to him may not have been the Wong Siu Ying who, with her ex-husband, Lau Sze Wo, was one of the assignees of the property in the 1997 assignment; and that the person Wong Siu Ying who was a party to the court order of 16 July 2008 whereby she agreed and undertook and consented to “transfer and assign her entire estate, rights, title … in the property”, which is the subject matter of this action, may not have been the Siu Ying Wong who put her signature alongside the historic Hong Kong Identity Card number on the assignment.  In other words the plaintiffs as potential purchasers, might have been at risk of an action by Wong Siu Ying (or Siu Ying Wong) based upon an allegation that somebody pretended to be her in assigning to her ex-husband a property which she had over two years earlier consented to and agreed to assign and transfer to him, as part of a court order settling their matrimonial property between them.  Such a contention is quite unrealistic.

33.  In my view I have taken far longer to set out these matters, facts, circumstances and contents of documents than the dispute warrants.  But there has been convoluted thinking on the part of the plaintiffs, and/or their advisers, some of it irrational, which has precipitated these proceedings.

34.  For the reasons set out I dismiss the plaintiffs’ summons, with costs to the defendants, to be taxed if not agreed.