MANY WISE INVESTMENTS LTD. V. TECH PROFIT DEVELOPMENT LTD.

1993, M.P. No. 2892

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. This is a vendor and purchaser summons whereby the plaintiff purchaser ("the purchaser") seeks, inter alia, a declaration that two requisitions in respect of the title to the property known as Nos. 175 and 177 Yu Chau Street ("the property"), the subject matter of a sale and purchase agreement dated 7th July 1993 made between the defendant vendor ("the vendor") and the purchaser, have not been sufficiently answered by the vendor.

2. Part of the vendor's title to the property was derived from several instruments, namely, an assignment dated 8th December 1948 registered by memorial number 187920 ("the 1948 Assignment"), a deed of gift dated 6th November 1982 registered by memorial number 2346165 ("the 1982 Deed") and an assignment dated 30th November 1991 registered by memorial number 5142148 ("the 1991 Assignment").

3. It appears from these documents that by virtue of the 1948 Assignment, Tam Lai Ying became the owner of No. 177 Yu Chau Street. By virtue of the 1982 Deed, she assigned by way of gift one-quarter portion of No. 177 Yu Chau Street, being the 1st Floor thereof, to her elder brother Tam Kam Ting and his wife. By virtue of the 1991 Assignment, Tam Kam Ting and his wife assigned the 1st Floor to the vendor.

4. The two requisitions are based on the following:--

(a) the signature of Tam Lai Ying in the 1948 Assignment appears different from the signature of the donor by the same name in the 1982 Deed which gives rise to a doubt as to whether the signatures were affixed by one and the same person; and

(b) while Tam Kam Ting executed the 1982 Deed by signing his name, he executed the 1991 Assignment by making a mark in the form of an X only, thereby giving rise to a doubt as to his mental capacity when executing the 1991 Assignment.

The first requisition

5. The signature of Tam Lai Ying consists of three Chinese characters. While Mr. Chow, on behalf of the purchaser, submits that the first character in the signature of Tam Lai Ying in the 1948 Assignment ("the 1948 signature") appears different from that in her signature in the 1982 Deed ("the 1982 signature"), he accepts that the last two characters in both of the signatures appear similar. In fact, the 1948 signature appears to have been made in Chinese ink with a Chinese brush, and the 1982 signature appears to have been effected with a ball-point pen. By reason of the different writing implements used in effecting the signatures, there must be some visual differences. The first character "Tam" in the Chinese language consists of two parts, and in fact, two simpler characters. Although the right-hand side character appears similar in both of the signatures, the left-hand side character was written in different form: the 1948 signature in a literal form and the 1982 signature in an abbreviated or simplified form. The requisition raised by the purchaser was based on this difference. I am of the view that the writing in different form of this left-hand side character of the first character in the two signatures does give rise to a doubt. However, I have to take into consideration that the two signatures were affixed 34 years apart, and the style of writing of the signatory might well have changed in such a long time. I have also examined the last two characters of the signatures, and they appear to me to be very similar, despite being written with two different kinds of writing implement. The juxtapositions of the characters in the two signatures are also similar. On the whole, taking into account all the circumstances, I come to a conclusion that the signatures are quite similar and the requisition therefore is unjustifiable.

6. It is to be noted from the land search records relating to No. 177 Yu Chau Street that Tam Lai Ying had, apart from executing the 1982 Deed, also assigned by way of gift one-quarter of No. 177 Yu Chau Street, being the 2nd Floor thereof, to four persons as joint owners by another deed of gift dated 6th November 1982 registered by memorial number 2346166. She had retained one-half interest in No. 177 Yu Chau Street, being the Ground Floor thereof, until 30th November 1991 when she assigned her interest to the vendor by an assignment dated that date and registered by memorial number 5142147. Before the last mentioned assignment, she also signed an agreement for sale and purchase dated 16th November 1991 registered by memorial number 5080772. At the commencement of the hearing, I raised the point for counsel's consideration that if any of her signatures in the 1982 and 1991 instruments bore resemblance to the 1948 signature, the doubt entertained by the purchaser would be safely removed.

7. The aforesaid instruments were produced by consent for my examination. The signatures of Tam Lai Ying in all the instruments executed in 1982 and 1991 were apparently effected with ball-point pens. The left-hand side character of the first character in her signature in the other 1982 deed of gift and the 1991 agreement for sale and purchase was written in the simplified form. However, the left-hand side character of the first character in her signature in the 1991 assignment whereby she sold her interest in the Ground Floor of No. 177 Yu Chau Street to the vendor was written in the literal form, similar to that in the 1948 signature. In the circumstances, even Mr. Chow concedes that the purchaser's requisition in this regard is sufficiently answered. I am of the opinion that any suspicion which anyone may entertain as to the identity of the signatories in the two questioned documents must be dissipated beyond all reasonable doubt.

The second requisition

8. While Tam Kam Ting executed the 1982 Deed by signing his name, he executed the 1991 Assignment by making a mark in the form of a cross only. The attestation clause against which the cross was made by Tam Kam Ting reads:

"SIGNED (by making his Mark he being incapable through physical ill health of writing his name) and (sic.) and DELIVERED by the above named TAM KAM TING (after the nature of the above-written deed had been fully explained to him and he appeared perfectly to understand the same) in the presence of:-"

9. The witness to the execution was one Wan Yuk Ching, described as "Trainee Solicitor Messrs. Johnson Stokes & Master Solicitors, Hong Kong". Mr. Chow submits that in view of the physical ill health from which apparently Tam Kam Ting was suffering when executing the 1991 Assignment, so much so that he was incapable of writing out his name, the question arises whether he was of sufficient mental capacity to be bound by the instrument. Wan Yuk Ching, the witness to the execution, was not or is not shown to be medically or in anyway qualified to make the statement in the attestation clause that Tam Kam Ting appeared perfectly to understand the nature of the instrument, and it follows that the doubt given rise by the mere mark of the cross as to the mental capacity of Tam Kam Ting is a real risk that the vendor's title may be challenged in the future.

10. Section 22 of the Conveyancing and Property Ordinance provides:

"A party to any instrument shall be presumed, until the contrary is proved, to have full legal capacity to execute that instrument, to bind himself in terms of that instrument and to dispose of or hold any property or rights assigned under that instrument."

11. It appears to me that the presumption as to capacity does arise in the present circumstances. The attestation clause merely refers to physical ill health as the reason for Tam Kam Ting not being capable of writing his name. I agree with Ms. Cruden's submission that the purchaser's requisition stems from a fundamental misconception of the distinction between physical and mental ill health. The suspicion on the part of the purchaser that Tam Kam Ting was mentally unsound has no logical or reasonable basis. Nothing contrary to the presumption has been indicated, let alone proved. In the circumstances, I also rule that the requisition in this regard has no merit.

Conclusion

12. In the circumstances, I hold that the two requisitions were not warranted and even if I am wrong as to that, they have been sufficiently answered by the vendor. I therefore made an order in terms of paragraph 7 of the amended originating summons. I also order that the purchaser pay the costs of this action to the vendor.