WU KOON TAI and Another v. WU YAU LOI

IN THE COURT OF APPEAL

1995, No. 70
(Civil)

- HEADNOTE -

'Sale' of New Territories house by person in whom no property rights vested at time of sale - Whether Ch'ing law and customs, as applied by s13 New Territories Ordinance, can over-ride provisions of s17 New Territories Ordinance - Instrument not signed by 'party to be charged' - Observations on s3(1) Conveyancing and Property Ordinance.

IN THE COURT OF APPEAL

1995, No. 70
(Civil)

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J U D G M E N T

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Litton, V.-P.:

1. This appeal concerns a house known as No. 86 Tai Lam Chung Village, Tuen Mun erected on Lot No. 112B in DD 385 in the New Territories. The defendant Wu Yau Loi is the registered owner of the property, pursuant to a Memorial dated 28 June 1963 registered in the Land Officer under section 17 of the New Territories Ordinance. The defendant derives his title to the property as successor to his father Wu Shang who became the registered owner pursuant to a Memorial registered in the Land Office dated 12 December 1951. Wu Shang's grandfather was Wu Cheong Yu who was the original Crown lessee under the Block Crown Lease.

2. Section 17 of the New Territories Ordinance provides as follows:

"17. Registration of successors to deceased

landholder where no probate granted

In the event of the death of any person in whose name any land is registered otherwise than as a manager, if no grant of probate or administration of the estate of the deceased is made by the High Court within 3 months after such death, the Land Officer, on ascertaining the name of the person who is entitled to such land in succession to the deceased person ... and on being satisfied that any estate duty which may be due has been paid, shall register the name of the successor, and upon such registration being effected the said land shall vest in the successor for all the estate and interest of the deceased person therein, or for such estate and interest as shall be entered on the register by the Land Officer against the entry of the name of the successor. On the registration of a successor, the fees fixed by regulations shall be paid to the Land Officer by the successor, but no probate fees shall be payable, anything in the Probate and Administration Ordinance (Cap. 10) to the contrary notwithstanding. The registered successor shall be liable for the debts of the deceased in the same manner and to the same extent as if a grant of probate or administration had been made to him:

Provided that if a grant of probate or administration of the estate of the deceased is made by the High Court within the period above specified, the grantee therein named shall be registered as the successor and the fees referred to in this section shall not be payable."

3. The original Crown lessee and registered owner of the property, Wu Cheong Yu, died in September 1921, leaving Wu Hung Chi as his only surviving son. However, Wu Hung Chi never succeeded to the property upon his father's death because no grant of probate or administration of the estate of Wu Cheong Yu was ever made, and Wu Hung Chi was never registered as a successor in respect of the property pursuant to s17 of the New Territories Ordinance.

4. The plaintiffs' case, however, as pleaded in para 4 of their statement of claim is this:

"4. By a Conveyance on Sale in Chinese dated the 8th day of the 9th month of the 23rd year of Republic of China (i.e. 1934) made between Wu Hung Chi as vendor and beneficial owner of the Land of one part and Wu King Yip as purchaser of the other part ("the Conveyance on Sale"), Wu Hung Chi sold and assigned the Land to Wu King Yip for the consideration of $200.00."

5. The plaintiffs go on to plead that they, being the only sons of Wu King Yip, the purported purchaser who died in December 1991, are "entitled to succeed to his interest in the Land as his successors and as tenants in common in equal shares".

6. In their action instituted by a writ in the District Court the plaintiffs claimed relief by way of declarations against the defendant: declarations which, in some respects, are in a curious form. They are as follows:

"And the Plaintiffs claim against the Defendant for:-

(a) a declaration that:-

(i) Wu Hung Chi, as the sole person entitled to succeed to the landed properties of Wu Cheong U in the New Territories at all material times, had validly assigned his beneficial interest in the Land to Wu King Yip under and by virtue of the Conveyance on Sale (pleaded in paragraph 4 hereof);

(ii) the Plaintiffs as the only persons entitled to succeed to landed properties of Wu King Yip in the New Territories, are the beneficial owners of the Land as tenants in common in equal shares; and

(iii) the Defendant as successor to Wu Shang, who in turn succeeded to Wu Cheong U, holds the legal title of the Land in trust for the Plaintiffs as tenants in common in equal shares;

(b) an order for the vesting of the Land in the Plaintiffs as tenants in common in equal shares for the unexpired residue of the Term;

(c) such further or other reliefs as this Honourable Court may think fit; and

(d) costs of this action."

7. The statement of claim was subsequently amended, and the plaintiffs put their claim upon an alternative basis, relying upon an averment which they added by way of amendment, pleading "adverse possession".

8. The District Judge His Honour Judge Wesley Wong disposed of the action purely upon the basis of the plaintiffs' claim as originally pleaded. He made no findings in relation to the alternative case of "adverse possession". He gave judgment for the plaintiffs by upholding the "validity of the Chinese Conveyance on Sale", finding that "Wu Hung Chi and his successors held the land in trust for Wu King Yip and his successors".

9. It would be convenient to deal with this appeal first by considering whether the judge's conclusion can be upheld in law, before I move on to the question of "adverse possession".

The Chinese document

10. In support of his case the plaintiff Wu Koon Tai produced at the trial a Chinese document (exhibit P5) which, he said, had been handed to him by his father Wu King Yip in 1973 because his father's health was not good. Wu Koon Tai said in examination-in-chief:

"My father told me that the land was purchased from Wu Yau Loi's ancestors. He was afraid that Wu Yau Loi would not assign the house to us, so he gave me this document so I would have deed in hand I can have some proof."

11. Exhibit P5, as translated into English reads as follows:

"Conveyancing on Sale of Tiled House

Maker of instrument for absolute sale of tiled house Hung Chi having in previous years succeeded to one tiled house left behind by (his) deceased grandfather, being the house on the left of (the place) dubbed Pun Uk with 11 troughs (of tiles on the roof). The fence wall opposite the door sets the boundary. Now being short of money for use, (he) himself was willing to sell (the house) to people. (He) called upon his brothers. None was prepared to take, Through the introduction of middleman, King Yip was first in agreeing to purchase. This day (the parties) arrived at the house for a site inspection. After negotiation in person among the middleman three parties, it was determined that the current market price was Dollars Two Hundred only. This day the price and conveyance were delivered to each other clearly without any shortfall. Nor was there anything in the nature of a prior mortgage and subsequent sale . Since completion of the sale, this house will be up to King Yip to repair and live in. People such as uncles and nephews of Hung Chi cannot say otherwise or cause trouble and repudiate, trespass, resist etc. Just like severed rattan, one stroke of the pen (is) forever and can never be recalled. This is the will of both parties. There is no compulsion or coersion. For fear that words of mouth bear no evidence, (this) instrument of absolute sale of tiled house is made as proof. (sd.) illegible/mark

Middleman : (sd.) Ah Hong (Fair)

Witness: (sd.) Ah Kau

Writer: (sd.) Chun Tak (sd.) illegible/mark

(Understand)"

12. In relation to this document, I make two preliminary observations:

(i) Although the document, (written in Chinese characters with a brush on rice paper), bears the signatures of a "middleman", a witness and the writer, it was not signed by either the purported vendor Wu Hung Chi or the purported purchaser Wu King Yip.

(ii) At the time of the transaction - September 1934 - the title to the property did not vest in Wu Hung Chi, the purported vendor. The property remained part of the unadministered estate of Wu Cheong Yu who had died 13 years before. Wu Hung Chi was entitled to apply for letters of administration for his father's estate, or alternatively to apply under s17 of the New Territories Ordinance to be registered as a successor. He did none of these things. The fact that he was a villager, living in a remote village, ignorant of the law, is not relevant. The law is no respecter of persons.

The judge's approach

13. The District Judge, in giving judgment for the plaintiffs, accepted the opinion of Professor Chang Wejan, an expert in Ch'ing Law, to the effect that exhibit P5 was a "valid and proper conveyance in accordance Ch'ing Law". And since s13 of the New Territories Ordinance empowered the court to recognise and enforce Chinese customs or customary rights affecting land in the New Territories, the judge gave legal effect to exhibit P5. He accordingly made the declarations as sought by the plaintiffs.

14. The District Judge, however, never sought to reconcile Professor Chang's expert opinion with the statutory scheme under the New Territories Ordinance for the registration of instruments affecting land in the New Territories. He simply brushed aside the effect of "non-registration" of exhibit P5 in the Land Office by saying that, in 1934, it required a whole day's journey from Tai Lam Chung Village to reach the nearest Land Office in Tai Po and that it was not uncommon for villagers to conduct land transactions without attending the District Office. He concluded thus:

"The effect of not registering the conveyance [exhibit P5] meant that Wu Hung Chi and his successors held the land in trust for Wu King Yip and his successors."

15. I have difficulty in understanding the judge's approach, on two grounds. (1) Professor Chang gave no evidence to the effect that, by Chinese customary law, a trust resulted from exhibit P5 in consequence of non-registration. To the contrary, his opinion was this: "where a seller of a house or a piece of farm land fails to transfer the house or land to the buyer, the seller will be inflicted forty blows of the light bamboo if the property is between one and five mu and ten more blows for every additional five mu but no more than one hundred blows of the heavy bamboo...". So, if a trust arose as the judge held, it must have arisen by the application of English law as applied in Hong Kong. And if title to the house is to be determined by applying English law, then the first resort must be to the provisions of the New Territories Ordinance.

(2) Since it is common ground that the legal estate never vested in Wu Hung Chi, it is difficult to see how Wu Hung Chi could have "held the land in trust for Wu King Yip and his successors". And if the transaction gave rise to no trust on Wu Hung Chi's part, it is difficult to see how a trust came to be imposed on his successors.

Section 17 Ordinance

16. Section 17 of the New Territories Ordinance only comes into play where no grant of probate or administration of the estate of the deceased land owner is made within three months after death. And, of course, even after the expiration of three months, there could have been a grant of letters of administration. If an administrator had been appointed, the distribution of the estate of the deceased Wu Cheong Yu would clearly have been in accordance with Chinese law and custom: but the vesting of property belonging to the estate would equally clearly have been in accordance with the provisions of the Probate and Administration Ordinance. No submissions to the contrary have, as I understand it, been advanced by Mr Mok, counsel for the respondent in this appeal.

17. If the analysis be correct so far, how then can it be argued that the registration of Wu Shang as successor to the original Crown lessee in 1951 and of the defendant as successor to Wu Shang in 1963, pursuant to s17 of the Ordinance, can somehow be over-reached by invoking Chinese law and custom?

18. Obviously, when the Land Officer ascertains the name of the person entitled to succeed to the property, he must have regard to Chinese law and custom; but once registration by memorial is effected the property vests by the operation of statute law in the successor "for all the estate and interests of the deceased person therein". As far as the 1951 registration in Wu Shang's name is concerned, the "deceased person" can only be Wu Cheong Yu and he, Wu Cheong Yu, had never sold the property to anyone prior to his death in September 1921. So the entire estate and interest in the property passed to his estate, and became vested in Wu Shang. And when the defendant was registered as the successor in June 1963, the "deceased person" to whose interest he in turn succeeded was Wu Shang in whom all the estate and interest had vested since he, too, had made no disposition in relation to the property during his life-time.

19. It is difficult to see how, in these circumstances, the purported sale of the property by Wu Hung Chi to Wu King Yip in September 1934, as evidenced by exhibit P5, could be effective in law to defeat the defendant's property rights.

20. The matter can be tested in this way. Assume (as is probably the case) Wu Hung Chi was entitled to apply for letters of administration to Wu Cheong Yu's estate. In this regard the law cannot be clearer and is stated thus in Vol. 17 Halsbury (4th Ed.) para 733:

"Source of administrator's title.

The administrator derives his title entirely from the grant of letters of administration, and the deceased's property does not vest in him until the grant, so he cannot make a lease or other disposition before the grant."

21. And looking at Wu Hung Chi's position as the Crown lessee's only son and therefore the main beneficiary to his residuary estate, what "interest" did he have in the property in 1934? As Lord Halsbury said in Lord Sudeley v. Attorney-General [1897] AC 11 at 15, it is all very well to speak of "interest" in a general way; the interest in issue must be specifically identified. In Lord Sudeley an estate had not been fully administered, and the question was whether a legatee was entitled to specific assets (mortgages on real property located in New Zealand) forming part of the estate. The answer was No. At p15 Lord Halsbury said:

"It [the residue] is uncertain until the residuary estate has been ascertained of what it will consist. It may consist of many things - it may consist of only a sum of money - and until that has been ascertained the actual right capable of instant assertion does not exist ... the legatee had no right to go and say 'I will have this or that part of the assets'".

22. Applying the law as stated above, the short point to this appeal is simply this: no property interest vested in Wu Hung Chi when he purported to sell the property in 1934; in law, he was incapable of transferring an interest, legal or equitable, to Wu King Yip.

23. It is of interest to note that when the defendant applied to the District Officer to be registered as successor to the estate of Wu Shang, the witness to his signature was Wu King Yip; and when the written notice was posted up at Tai Lam Chung Village, giving notice of the defendant's application and inviting objections to the succession, the notice, dated 21 December 1962, was signed by Wu King Yip as the village representative. Wu King Yip must have realised that the effect in law was that, upon the memorial being registered, all the estate and interest of Wu Shang in relation to the property vested in the defendant. There is no suggestion that he had, at that time, required the defendant to make some form of written acknowledgement of his (Wu King Yip's) interest before he performed his acts in support of the defendant's claim to be registered as the successor.

24. The conclusion, as I see it, is therefore as follows:

(i) The title to the property vested, in 1934, in Wu Cheong Yu's unadministered estate.

(ii) Wu Hung Chi had no title to the property and could not, by the purported sale in September 1934, have transferred any title or interest in the property to Wu King Yip.

(iii) When Wu Shang was registered as the successor to Wu Cheong Yu deceased in 1921, all the estate and interest of Wu Cheong Yu in respect of the property passed to Wu Shang.

(iv) The same interest became vested in the defendant in 1963 upon the defendant being registered as the successor to Wu Shang deceased.

(v) Exhibit P5 was ineffective to transfer any title or interest to Wu King Yip and the plaintiffs, as his sons, acquired no interest upon his death in December 1991.

Section 3 Conveyancing and Property Ordinance

25. I reach the conclusion as summarised above without regard to the provisions of s3 of the Conveyancing and Property Ordinance which states:

"3. Land contracts to be in writing

(1)... no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person lawfully authorized by him for that purpose.

(2) This section applies to contracts or other dispositions whenever made and does not affect the law relating to part performance or sales by the court."

26. The fact is that exhibit P5 was never signed by Wu Hung Chi, the person purporting to make the disposition in favour of Wu King Yip.

27. Section 3(1) is in clear term. "No action shall be brought" means just that. The plaintiffs cannot maintain their action, in reliance upon exhibit P5, unless the provisions of ss(2) come into play; that is, the law relating to part performance.

28. The judge based his conclusion on the legal validity of Ex P5 in terms of Chinese law and custom and wholly disregarded the provisions of s3 of the Conveyancing and Property Ordinance. He did not, therefore, advert to the law relating to part performance. He made no findings in that regard.

29. The question of part performance is, of course, a question of fact: it relates to acts in connection with the property concerned. If such acts are sufficiently proved, it saves the contract between the owner and the purchaser from formal invalidity. The judge brushed the question aside upon the basis that, in Professor Chang's opinion, a sale of landed property can be effective in Ch'ing law without the signature of the seller.

30. This approach seems to me to be extremely doubtful. I cannot see how it can be suggested, in relation to a disposition of an interest in land, the provisions of s3(1) of the Conveyancing and Property Ordinance can be overridden by the application of Ch'ing law.

31. However, it is unnecessary in this judgment to go further into the issue because, in any case, the question simply does not arise. Wu Hung Chi, having no title vested in him, could not have disposed of the property, by sale or otherwise. The law in relation to part performance is therefore wholly irrelevant.

Adverse possession

32. By an amendment to the statement of claim, the plaintiffs pleaded as follows:

"If, which is not admitted, Wu Hung Chi did not have any title to deal with the Land or the Conveyance on Sale was otherwise invalid or ineffective so that Wu King Yip did not have any title to the Land when he entered into possession of the Land on the 8th day of the 9th month of the year 1934, the Plaintiffs aver that they and their predecessor in title, Wu King Yip, have been in adverse possession of the Land for a continuous period of over 50 years. By reason aforesaid, the Defendant and his predecessor in title, Wu Shang, have and had by virtue of Section 7(2) of the Limitation Ordinance, Cap. 347, become statute-barred from recovery of the Land and the title, if any, of Wu Shang and the Defendant have become extinguished by virtue of Section 17 of the Limitation Ordinance, Cap. 347."

33. The judge decided the case on one issue only, namely, the "validity of the Chinese conveyance of sale" and never adverted in his judgment to the question of adverse possession. The judge made no findings of fact specifically referable to the question of adverse possession. As stated in Vol. 28 Halsbury (4th ed.) para 768, what constitutes adverse possession is a question of fact and degree. Where a trial judge has made no findings in that regard, this court is in no position to determine the issue unless the facts appearing upon the record are so clear, one way or the other, as to enable this court in effect to perform the original fact finding function which the trial judge in this case had failed to perform.

34. One fact seems undisputed. Wu King Yip took possession of the property in 1934. He lived there for a while. In 1953 the house was empty and locked up and a villager name Tai Sun (who testified as PW5 at the trial) rented the house from Wu King Yip and lived there for 10 years from 1953. Five of his children were born there.

35. The evidence is extremely shadowy as regards the occupancy of the house after Tai Sun moved out. The plaintiff Wu Koon Lun said in-chief:

"The house was let by my father from time to time. There was a time when house was not occupied. We repair it when vacant."

36. At this point the judge intervened and the record says:

"Court: I don't think there is dispute your client is in continuous occupation.

Chik [counsel for the defendant]: No dispute."

37. As can be seen, the judge's intervention was not helpful. The witness had just stated before the intervention that there was a time when the house was not occupied. The judge's statement that there was "continuous occupation" is in flat contradiction to the witness's testimony.

38. In his evidence-in-chief the plaintiff Wu Koon Tai gave some rather shadowy testimony concerning what had occurred when Wu Shang became registered as the successor in 1951. He was then only five years old. He claimed that the following took place:

"My father did ask Wu Shang to assign the property to him. Wu Shang did promise but asked my father to pay $500."

39. It would be remarkable if a five-year-old boy could have absorbed and retained such a piece of information as to enable him to testify accurately before the judge in October 1994, over 40 years later.

40. The defendant also gave evidence. He was born in 1936 and was therefore 26 years old when his father Wu Shang died in 1962. The judge, in his judgment, recited the defendant's testimony to this effect:

" Before he [Wu Shang] died he told Defendant he owed Wu King Yip $2,000 odd and Wu King Yip collected rent from the hut as deduction of the loan. His father owed Wu King Yip money because his father was an opium addict and Wu King Yip sold opium in the village.

He asked Wu King Yip for a further loan of $2,000 for his father's funeral expenses. He let Wu King Yip collect the rent from the hut as he was indebted to Wu King Yip and the rent could be treated as interest or deduction of the loan. He would repay Wu King Yip when he had the money which he did in 1981 when he rented out some land for storage of container. He paid Wu King Yip $5,000. Wu King Yip then told Defendant that the Defendant's position had improved and asked Defendant to let him continue to collect rent from the hut as ex gratia tea money. According to Defendant the rent was then $100 odd, because Wu King Yip had helped him before so he agreed to that arrangement.

Wu King Yip died in 1991 he went to collect rent from the tenant but the tenant told him he had been paying rent to Wu King Yip. So he was not able to get rent from the tenant. The tenant moved out in May 1992. The key was returned to him and he locked up the hut.

According to the Defendant his father was an opium addict. At the time of his father's death he was in very bad financial state. On top of that he suffered from epilepsy and could hardly work. He agreed that $2,000 was a lot of money at that time. Building a house in the village at that time would cost about $4-5,000."

41. The judge, after setting out the passages of the evidence as stated above said he preferred the evidence of the plaintiffs: but, in many respects, the evidence of the plaintiffs did not contradict the defendant's testimony: for instance, what passed between him and Wu King Yip at the time of his father's death. By the time of the trial, Wu King Yip was dead. The judge said he found difficulty in accepting the defendant's evidence that, at the time of his father's death, he (the defendant) was in financial difficulty and had borrowed $2,000 from Wu King Yip; he also rejected the defendant's evidence that he had locked up the hut after the tenant had left. The judge did not say what other aspects of the defendant's evidence was rejected.

42. He then concluded by saying:

"I find on balance that the hut had been occupied by the Plaintiffs and their father Wu King Yip since 1934 ...." (emphasis added).

This finding is clearly untenable. It is contradicted by the evidence such as it was.

43. Such findings of fact as the judge made were not, on the face of the judgment, made with reference to the issue of adverse possession. His finding of continuous occupancy is flawed and does not support unquestionably a case of adverse possession, such as would necessarily lead to the legal conclusion that the defendant's title has become extinguished by virtue of s17 of the Limitation Law Ordinance.

44. Perhaps because of the way the case was conducted in the court below, many relevant questions have been left unresolved. For instance, how did Wu King Yip come to sign the defendant's application to be registered as Wu Shang's successor in 1962? At that time the defendant was already 26 years old. Furthermore, when the defendant testified as to what had occurred between him and Wu King Yip when his father died: and, in particular, that the $2,000 for his father's funeral expenses was, in effect, to be deducted from the rent from the hut: what evidence is there to contradict the defendant's assertion? The judge seems to have relied upon a villager Wu Cho Mui's evidence, but Wu Cho Mui did not, in any way, contradict what the defendant said. There was no proper evaluation of these points: because the judge felt he was not called upon to determine the issue of adverse possession. For instance: Who held keys to the property? Was the house locked up when it was unoccupied? These questions, all relevant to the issue of adverse possession, were never ventilated.

Conclusion

45. For the reasons stated above, I would allow this appeal, discharge the judge's order and make an order that there be a re-trial before another District Judge, limited to the relief added by way of amendment to the prayer for relief in the statement of claim:

"(aa) a declaration that:-

(i) the Defendant's title, if any, in the Land has been extinguished by virtue of s17 of the Limitation Ordinance."

46. I would make an order nisi as to costs as follows:

(i) each party to pay its own costs in the court below

(ii) the defendant to have the costs of the appeal.

Liu, J.A.:

47. In 1905, Wu Cheong U became a Crown lessee of Lot 112 in Demarcation District 385, Tai Lam Chung, Tun Mun, New Territories for 75 years. Lot 112 was later sub-divided into Section A and Section B. I shall call Section B "Lot 112B".

48. In 1921, Wu Cheong U died and in 1951 his only grandson Wu Shang became the registered successor to Lot 112 pursuant to section 17 of the New Territories Ordinance. In 1963, the defendant was registered by the Land Officer as successor to this Lot 112 pursuant to the same section 17. Section 17 of the New Territories Ordinance is a section for registering the name of a person ascertained to be entitled to land in succession to a deceased person. The Land Officer only registers the names of successors and the effect of a section 17 registration is to vest "all the estate and interest of the deceased person" in the land in the registered successor. Section 17 reads:-

" In the event of the death of any person in whose name any land is registered otherwise than as a manager, if no grant of probate or administration of the estate of the deceased is made by the High Court within 3 months after such death, the Land Officer, on ascertaining the name of the person who is entitled to such land in succession to the deceased person (hereinafter called the successor), and on being satisfied that any estate duty which may be due has been paid, shall register the name of the successor, and upon such registration being effected the said land shall vest in the successor for all the estate and interest of the deceased person therein, or for such estate and interest as shall be entered on the register by the Land Officer against the entry of the name of the successor. On the registration of a successor, the fees fixed by regulations shall be paid to the Land Officer by the successor, but no probate fees shall be payable, anything in the Probate and Administration Ordinance (Cap. 10) to the contrary notwithstanding. The registered successor shall be liable for the debts of the deceased in the same manner and to the same extent as if a grant of probate or administration had been made to him:

Provided that if a grant of probate or administration of the estate of the deceased is made by the High Court within the period above specified, the grantee therein named shall be registered as the successor and the fees referred to in this section shall not be payable." (Emphasis supplied.)

49. Section 17 "expressly recognises the jurisdiction of the Probate Court, but provides an alternative procedure". Ho Cheng Shi v. Ho Sau Lam 15 HKLR 35 at p.39, per Gompertz, Acting CJ. Under section 17, the registered successor is to become "liable for the debts of the deceased" in the same way as his personal representative would be. Clearly a section 17 registration could not vest in the registered successor more estate and interest than those which the deceased person himself or his estate had at the time of the registration. Wu Cheong U died in 1921. Wu Shang was registered as a successor only in 1951. It is therefore necessary to ascertain what the estate of Wu Cheong U, deceased, had or was left with after 30 years in 1951. At the time of his death in 1921, Wu Cheong U left surviving him one son, Wu Hung Chi. There is no evidence of other or competing interests. It is not in dispute that according to Chinese customs in the New Territories, as the only surviving son upon the death of his late father Wu Hung Chi was beneficially entitled to the whole of Lot 112 in succession to Wu Cheong U, deceased. If Wu Hung Chi had divested himself of any beneficial interest in or of Lot 112 prior to the registration of Wu Shang as a successor in 1951, the registration could only vest in Wu Shang what remained of "the estate and interest" of Wu Cheong U, deceased, that is to say all what Wu Cheong U owned at the time of his death in 1921 less any beneficial interest so divested by Wu Hung Chi.

50. Put another way, as an alternative procedure to a grant of probate or administration, the section 17 registration of Wu Shang in 1951 as successor could clothe him with no higher authority than that of a personal representative. A personal representative would have held all the estate and interest of or in Lot 112 of Wu Cheong U, deceased, in trust for the sole beneficiary of and any rightful claimants to his estate and would have been liable for his debts. So analysed, Wu Shang would, therefore, hold Lot 112 at least in trust for the sole beneficiary, Wu Hung Chi and persons to whom he had sold all or part of his beneficial interest therein. Wu Hung Chi died in the 1940's. I pause here to note that the father of Wu Shang was Wu Hung Yan and that Wu Shang was registered in the capacity he claimed during the 1951 District Office's title revamping exercise to pave the way for possible Crown resumptions in the proposed construction of Tai Lam Chung Reservoir.

51. In 1951, either holding what was then left in the estate of Wu Cheong U, deceased, or as its trustee in like capacity of a personal representative for the decease's sole beneficiary and persons claiming under him, in the former the interest so disposed of by Wu Hung Chi would not vest in Wu Shang under section 17 of the New Territories Ordinance and in the latter scenario the estate and interest vested in Wu Shang would be subject to all equities, including the rightful claims of persons claiming under or through Wu Hung Chi.

52. The question before us is: what interest, if any, in Lot 112 had Wu Hung Chi disposed of before 1951? That a beneficiary in an estate may sell his interest before grant is elementary. Wu Hung Chi was therefore entitled to and could sell all or part of his beneficial interest in Lot 112. He was merely unable to pass a good legal title. Some 13 years after the death of Wu Cheong U, in 1934 Wu Hung Chi purported to convey to Wu King Yip Section B of Lot 112 (Lot 112B) by a document intitled "Conveyancing on Sale of Tiled House" for $200 in the following terms:-

"Conveyancing on Sale of Tiled House

Maker of instrument for absolute sale of tiled house Hung Chi having in previous years succeeded to one tiled house left behind by (his) deceased grandfather, being the house on the left of (the place) dubbed Pun Uk with 11 troughs (of tiles on the roof). The fence wall opposite the door sets the boundary. Now being short of money for use, (he) himself was willing to sell (the house) to people. (He) called upon his brothers. None was prepared to take. Through the introduction of middleman, King Yip was first in agreeing to purchase. This day (the parties) arrived at the house for a site inspection. After negotiation in person among the middleman three parties, it was determined that the current market price was Dollars Two Hundred Only. This day the price and conveyance were delivered to each other clearly without any shortfall. Nor was there anything in the nature of a prior mortgage and subsequent sale. Since completion of the sale, this house will be up to King Yip to repair and live in. People such as uncles and nephews of Hung Chi cannot say otherwise or cause trouble and repudiate, trespass, resist etc. Just like severed rattan, one stroke of the pen (is) forever and can never be recalled. This is the will of both parties. There is no compulsion or coercion. For fear that words of mouth bear no evidence, (this) instrument of absolute sale of tiled house is made as proof. (sd.) illegible/mark"

53. Wu Hung Chi as the vendor in the purported conveyancing document to Wu King Yip did not himself sign it. Having acquired Lot 112B, Wu King Yip occupied it between 1934 to 1952 and thereafter he or his sons, the plaintiffs, let it to various tenants. At the moment, the hut on the lot is being occupied by the Filipino maid of the second-named plaintiff.

54. Four issues arise from the said question for our consideration, namely (1) whether there was a sale even if the said purported conveyancing document, "Conveyancing on Sale", is not legally enforceable; (2) if so, whether there was part performance referable to the purported conveyancing document, "Conveyancing on Sale", or the sale of Lot 112B, (3) in the alternative, if Wu Hung Chi failed to sell any interest to Wu King Yip in 1934 by the said purported conveyancing document or at all, whether the plaintiffs by themselves and through their late father Wu King Yip had acquired a good possessory title to Lot 112B and (4) whether in law section 13 of the New Territories Ordinance which applies Chinese custom or customary right affecting land in the New Territories has overridden section 3 of the Conveyancing and Properties Ordinance. I put the pure legal issue last because it does not seem to have been exhaustively argued.

55. Issue (1), whether there was a sale of Lot 112B: the purported conveyancing document, "Conveyancing on Sale", was not signed by the person to be charged i.e. Wu Hung Chi. I do not wish to be unduly deflected by the law applicable at different times, be it section 3 of the Conveyancing and Properties Ordinance or section 40 of the Statute of Frauds, 1677. Suffice to say that in Hong Kong no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought is signed by the party to be charged. As I have said, I shall deal separately with section 13 of the New Territories Ordinance last. But even though one of the statutory formalities imposed for a legally enforceable document affecting land was not fulfilled, the "Conveyancing on Sale" as a contract affecting interests in land is not void but only unenforceable. Was there in 1934 a concluded, though not enforceable, agreement for the sale of Lot 112B? The said "Conveyancing on Sale" was a document admitted with consent at the trial. It was further produced as an ancient document from proper custody. The affirmation of Wu Cho Mui and the first-named plaintiff's witness statement were also admitted. For the affirmation of Wu Cho Mui and the statement of the first-named plaintiff, a respective Hearsay Notice had been served. The hearsay evidence from Wu Cho Mui's said affirmation is that in his presence at the age of 14, Wu Hung Chi told his father about the sale of Lot 112B to Wu King Yip. The first-named plaintiff in his statement as well as in his viva voce evidence referred to a conversation with his late father Wu King Yip to the effect that the lot was purchased from the defendant's ancestors. The judge preferred the plaintiffs' evidence to that of the defendant's and found, by necessary implication in holding (though erroneously) the "Conveyancing on Sale" was enforceable, that there was a sale in 1934. It was a sale of Wu Hung Chi's beneficial interest although no legal title was effectively passed. That 1934 sale was well established before the judge.

56. Issue (2), Part Performance: was there part performance of the 1934 agreement for sale for which there was (putting aside section 13 of the New Territories Ordinance for the time being) no legally enforceable contract in writing? Part performance will feed the valid but unenforceable 1934 agreement for sale so as to enable the court to make a vesting order sought for Lot 112B otherwise it would be fraudulent of the vendor Wu Hung Chi and those claiming under him to take advantage of a non-observance of the statutory formalities. In my view, there were sufficient acts pointing to the existence of or referable to the 1934 agreement for sale in this case. Instructions were given by the purchaser Wu King Yip for preparing the said "Conveyancing on Sale" coupled with the payment of $200 as purchase price; the plaintiff's late father, Wu King Yip, took possession of and occupied Lot 112B from 1934 to 1952; the Lot was let out by the plaintiffs' late father and themselves from 1952 onwards until the hut was resumed by the plaintiffs for the use of the second-named plaintiff's Filipino maid. Wu Cho Mui confirmed the moving in of the plaintiffs' late father in 1934. The evidence the judge accepted included that of rental receipts since 1934. Letting and rental collection were further corroborated by the evidence of Tai Sun, a tenant, and the plaintiffs themselves. Counsel for the defendant conceded before the judge that the plaintiffs and their late father enjoyed uninterrupted possession. According to the first-named plaintiff, the defendant agreed with him that the hut in question had been in the possession of the plaintiffs and their late father throughout all those years. By these acts, I hold there to be part performance and the plaintiffs as entitled to the vesting order sought. Pursuant to law, the Crown took upon itself to regrant a new Crown Lease in 1973, and as the matter now stands, the new grant is subject to all existing equities.

57. Issue (3), Adverse Possession: it is not strictly necessary to consider this issue. Suffice it to say that the plaintiffs have established exclusive possession for the full statutory period in support of their claim that the title of the defendant to Lot 112B has been extinguished under section 17 of the Limitation Ordinance.

58. Issue (4), whether section 13 of the New Territories Ordinance has superseded the statutory formalities as required of a legally enforceable contract for sale of land: again, it is quite unnecessary to deal with this last issue. Section 13 of the New Territories Ordinance provides that "in any proceedings in the High Court or the District Court in relation to land in the New Territories, the court shall have power to recognize and enforce any Chinese custom or customary right affecting such land". I have yet to hear any proposition made that statutory formalities, practice or procedure could be materially affected by Chinese custom or customary rights. To this general rule, there is perhaps one exception, if exception it is, in the priority to obtain a grant of administration by a ping chai, kim tiu or concubine. It is of interest to note that in the first Supreme Court Ordinance (Ordinance No. 15 of 1844), s.3 provided, inter alia, (a) in all matters touching the right or title to any real property in the said Colony, the law of England shall prevail: and no law derogating from the sovereign of the Queen of England is to be recognised; (b) subject to other provisions of the Ordinance, or to alteration by rules of Court under the Ordinance, the practice of the English Courts is to prevail. In Chinese custom, free testamentary disposition would be prohibited. A grant of probate or administration is also unknown to Chinese customary law. The right of primogeniture governs customary succession save for the gravest sins. With rare exceptions, no son could be disinherited. Yet the Hong Kong formalities for the making of a will must be complied with. Chinese customs have a role to play in succession, but a grant of administration of a deceased's estate would still have to be applied for under the Probate Rules. See In the Estate of Chak Chin Hang, Chan Shun Ho v. Chak Hok Ping, 20 HKLR1 at pp.12 &14. Indeed, section 17 of the New Territories Ordinance gives way to a grant of probate or administration under the Probate and Administration Ordinance and it has been said that section 17 provides merely "an alternative procedure". If section 13 cannot override the practice in Probate, how is it consistent to maintain that section 13 has superseded the need to comply with prescribed statutory formalities for a legally enforceable sale document affecting land? If an answer needed to be given, I would be inclined to the view that section 13 does not have the effect of dispensing with these statutory formalities.

59. The plaintiffs seem to be content, but not without some persuasion, with a vesting order but the plaintiffs' claims seem to call for a more comprehensive relief. I would therefore dismiss the appeal and set aside the entire order of the judge and substitute it by a vesting order. However, I would grant liberty to apply. None of the matters canvassed by counsel for the appellant is meritorious. The facts in this case are all one way in favour of the plaintiffs. I would make an order nisi for costs against the appellant.

Mayo, J.A.:

60. This appeal as indeed the hearing before His Honour Judge Wesley Wong has proceeded on the basis of testing a number of different alternatives to ascertain whether the plaintiffs are entitled to the relief they are seeking.

61. W. Wong DJ mainly on the basis of an expert opinion given by Professor Wejan Chang on Ching Dynasty laws and customs held that the Chinese Conveyance of Sale dated 8 September 1934 (the 1934 Conveyance) was a valid conveyance of the suit premises to the plaintiffs predecessors in title.

62. In reaching this conclusion he determined that section 13 of the New Territories Ordinance Cap 97 which provides:

"13. High Court or the District Court

may enforce Chinese customs

In any proceedings in the High Court or the District Court in relation to land in the New Territories, the court shall have power to recognize and enforce any Chinese custom or customary right affecting such land."

took precedence over section 3 of the Conveyancing and Property Ordinance Cap 219 which is as follows:

"3. Land contracts to be in writing

(1) Subject to section 6(2), no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person lawfully authorized by him for that purpose.

(2) This section applies to contracts or other dispositions whenever made and does not affect the law relating to part performance or sales by the court."

63. It is common ground between the parties that 1934 Conveyance was not signed or executed by Mr Wu Hung Chi who was the only son of Wu Cheong Yu the registered owner of the land who died on 7 September 1921.

64. Having regard to the clear wording of s3 I do not consider that it is even arguable that s13 overrides s3.

65. As the 1934 Conveyance did not comply with the requirements of s3 the plaintiffs are not able to base an action upon the Conveyance to enforce their alleged claim to the suit premises.

66. That brings us to the second alternative claim made by the plaintiffs.

67. This is a claim that the possession of the suit premises by Wu King Yip, the purchaser under the 1934 Conveyance pursuant to the sale constituted part performance of the contract of sale thus enabling the plaintiffs to take advantage of s3(2) of Cap 219.

68. One of the requirements of the doctrine of part performance in as much as it relates to land is that there should be an agreement between the owner of the land and the prospective purchaser.

69. Mr Chong for the appellant submitted that this requirement had not been complied with.

70. As stated earlier Mr Wu Cheong Yu died on 21 September 1921. Following his death no grant of representation was ever issued to any personal representative.

71. Nor for that matter was any registration of successors recorded in the District Office pursuant to s17 of Cap 97 until Wu Cheong Yu's grandson Wu Sang was registered as his successor on 5 November 1951. Wu Hung Chi was never registered as a successor to his father Wu Cheong Yu.

72. I do not think that Wu Hung Chi was able to deduce a good title to the suit premises without registration being effected in accordance with the provisions contained in s17.

73. The only way in which this dilemma can be overcome is if the plaintiffs are able to establish that s13 transcends all the other legislative provisions and reliance can be placed totally on Chinese laws and customs. There are passages in Professor Chang's opinion which would lead one to suppose that a large measure of informality attended transactions relating to land between inhabitants of the New Territories.

74. Mr Mok for the plaintiffs argued that it was possible to place reliance upon Ching Dynasty laws and customs. In support of this contention he placed reliance on several Privy Council cases where efforts had been made to reconcile native customs with statutory schemes which had introduced what amounted to an alien system of law. He placed particular reliance upon a passage from the speech of Lord Denning who delivered the judgment of their Lordships at p80 of Adeyinka Oyekan and others v. Musendiku Adele [1957] 1 WLR 876:

"In inquiring, however, what rights are recognized, there is one guiding principle. It is this: The courts will assume that the British Crown intends that the rights of property of the inhabitants are to be fully respected. Whilst, therefore, the British Crown as Sovereign, can make laws enabling it compulsorily to acquire land for public purposes, it will see that proper compensation is awarded to every one of the inhabitants who has by native law an interest in it: and the courts will declare the inhabitants entitled to compensation according to their interests, even though those interests are of a kind unknown to English law, see Amodu Tijani v. Secretary, Southern Nigeria, Sakariyawo Oshodi v. Moriamo Dakolo. Furthermore, if a dispute arises between the inhabitants as to the right to occupy a piece of land, it will be determined according to native law and custom, without importing English conceptions of property law, see Sunmonu v. Disu Raphael, Idewu Inasa v. Oshodi, except, of course, in those cases, now growing in number, where English conceptions of individual ownership have superseded previous conceptions."

75. It seems to me that the circumstances which were being considered by the Privy Council in that case much more closely resembled the type of situation which was considered by Mills Owens J in Tang Kai Chung v. Tang Chik Shang [1970] HKLR 276 than those under consideration in the instant case.

76. The New Territories Ordinance sets out a statutory scheme which to a considerable extent relaxes the vigours of the law. Section 13 has to be read in conjunction with the other provisions contained in the Ordinance including s17 and I can see no justification for coming to the conclusion that s13 should apply to the exclusion of s17.

77. In the context of the present case the registration of succession most closely resembles the issue of a grant of representation to the estate of a deceased person.

78. The failure of Wu Hung Chi to be registered as a successor is in my view similar to the failure of an executor or administrator to obtain a grant of representation to an estate. In such a situation the executor or administrator does not have a title to enter into a formal contract for the sale of land. I believe that Wu Hung Chi's failure to be registered under s17 leads to a similar situation in this case.

79. The consequence of this is that the first requirement for part performance of contract namely the existence of an agreement between the parties has not been met.

80. This then leads to a consideration of the third alternative which is that the plaintiffs by virtue of their possession of the suit premises since 1934 have obtained a possessory title to the property.

81. Mr Chong for the appellant submitted that if it was necessary to consider whether there has been adverse possession the fairest course to adopt would be to refer the case back to the District Court so that this issue could properly be canvassed. The reason he gave for this was that W. Wong DJ had not made an adjudication on this.

82. This is clearly not a satisfactory or efficient means of resolving the issues which remain outstanding between the parties.

83. I have given anxious consideration as to whether the issues were sufficiently canvassed before W. Wong DJ to enable us to make a determination on the subject of adverse possession.

84. With great reluctance I have come to the conclusion that it would not be possible to make the necessary findings of fact on the available material. The only way in which justice can be done in this case is to allow the appeal and refer this issue back to the District Court for an adjudication.

85. I would with respect agree the form of order proposed by my Lord Litton.

Litton, V.-P.:

86. The result is that the appeal is, by a majority, allowed and the order is as I have proposed in my judgment.