YIP CHOR LEUNG AND ANOTHER v. SHEK KIN SANG

HCMP 70/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 70 OF 2000

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J U D G M E N T

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1. These proceedings arise out of a provisional agreement for sale and purchase entered into on 12 April 1997, between the plaintiffs as purchasers and one Shum Tin Choi as attorney for the defendant as vendor, for the sale of the 1st and 2nd floors and roof of a Spanish style building at Lot No. 534 in DD 209 I Tai Po, New Territories with completion upon 14 days notice being given by the defendant to the plaintiffs. Between October 1998 and March 1999 a number of requisitions were raised by the plaintiffs' then solicitors, most of which were satisfactorily answered by the defendant's solicitors, and on 30 March 1999 the latter gave 14 days notice to complete the purchase. Meanwhile the plaintiffs changed their solicitors and a number of further requisitions were raised. The time for completion appears to have been waived as considerable further correspondence ensued, eventually resolving the requisitions raised into three which remained outstanding and, in the view of the plaintiffs, unanswered. Final notice was given to the plaintiffs to complete by 9 October 1999, and upon them failing to do so, the defendant held the plaintiffs to have repudiated the agreement and forfeited their deposit. These proceedings were commenced by the plaintiffs on 6 January 2000 seeking inter alia a declaration that the three outstanding requisitions had not been sufficiently or satisfactorily answered by the defendant.

2. The three requisitions may be summarised as follows:

(1) Production of documentary proof of the succession to the land referred to in the Memorial No. 204160 dated June 1981;

(2) Documentary evidence of vehicular access to the land; and

(3) Production of approval or consent for part of the land to be used as a car park.

3. The third requisition has now been abandoned by the plaintiff having conceded by their counsel that there was no obligation to convey a car park included in the agreement for sale, although they still maintain that they had permission to use the space as a car park, which they say is relevant to the second requisition. I will deal with the others in order.

Memorial No. 204160

4. It is contended by the defendant that the memorial itself is a title document and that the plaintiffs are not entitled to require production of a will proving succession, which in any event does not exist. He relies on section 17 of the New Territories Ordinance, since repealed, which provided 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."

5. The memorial clearly provides for the succession to the land by one Ho Kam-wah upon the death of Ho Koon-shing, and Mr Lau for the defendant relies on the decision of the Judicial Committee of the Privy Council in Wu Koon Tai & Anor v. Wu Yau Loi [1996]3 HKC 559, affirming the decision of the Court of Appeal, which held that section 17 provided for land to vest in a successor without a grant of probate or letters of administration by registration, and that once the successor had satisfied the Land Officer of his right to succeed, registration by memorial vested the estate and interests of the deceased person in him, and the memorial is per se a title document.

6. Mr Chong for the plaintiffs says that the memorial is not necessarily registration of a successor under section 17 but may be a memorial of a will and certified under section 19, and he relies on the wording on it which refers to it being certified as a "correct Memorial according to Section 19 of the New Territories Ordinance...". Section 19 reads as follows:

"19. For the purposes of this Ordinance, where a memorial of any deed, will or other instrument is certified by the Land Registrar as correct, it shall not be necessary for such memorial to be verified in accordance with the provisions of section 7 of the Land Registration Ordinance (Cap 128)."

7. The reference to section 7 of the Land Registration Ordinance must be an error here and should surely refer to Regulation 7 of the regulations under that ordinance, as section 7 was repealed in 1980, whereas Regulation 7 relates to verification of memorials. Be that as it may, this clearly provides for the memorial itself to be certified to avoid the necessity of verification under that regulation, but it assumes that the memorial will be in respect of a deed, will or other instrument, and does not appear to include a memorial of registration under section 17. This, in my view, is yet another error in drafting, as there is no similar provision in respect of memorials under that section. However, even if that certification purports to be under section 19, and raises an presumption of a will or other instrument, that presumption can be easily rebutted by examination of the rest of the memorial itself.

8. First, the memorial refers under "Nature and object of instrument" to "succession to property". There is no mention of any will or other instrument which, as a matter of common sense, there certainly would be if one had existed and this was evidence of its registration. Second, under "Date of Instrument" it gives 12 June 1981. Although the date at the foot of the document is not clearly legible, there is on the back a receipt for the $30 fee which is clearly also dated 12 June 1981. The obvious conclusion to this is that the instrument referred to is the memorial itself, which, under section 17, is evidence of the vesting of the property in the successor following the Land Officer being satisfied of his right to succeed. I am accordingly satisfied that it is such a document, that there is no will, and that the defendant was entitled to refuse to supply one and rely of the memorial as a document of title.

9. Before I leave this I should mention one other complaint of the plaintiffs, namely that the defendant's solicitors did not mention section 17 when declining to supply any other document evidencing succession. It is not for them to answer matters of law. They have been requested for documentary evidence to which they have properly replied that it does not exist. That it is not necessary under the law is not a matter that they need to spell out to the plaintiffs' solicitors, who are assumed to know the law.

Access

10. It is the plaintiffs' case that there is an implied term of the provisional sale and purchase agreement that the defendant would provide vehicular access to the property, and accordingly should provide evidence of such access. They say that, although they accept that there was no agreement to convey a car parking space with the property, it was implied in the agreement that there would be a place for car parking and accordingly it should be further implied that access for vehicles would be supplied.

11. The agreement is clearly for the sale of the 1st and 2nd floors and the roof of the property only; there is no car park space included in what is to be conveyed. The only reference to vehicles is in clause 8 of the provisional agreement which reads as follows:

"There is a parcel of remaining land of about 150 sq. ft. in the lot which is covered by a Grant and which may be used for parking of vehicles."

12. Mr Chong says that this is sufficient to give rise to an implication that access will be provided, and referred me to a number of decisions where the courts have implied terms into contracts either to give business efficacy to them, or to put in what must have been intended by the parties, often using the test of the officious bystander. However, I am not satisfied that a provision which at most gives permission to use a piece of land for parking is enough to imply such a term. There is no obligation in either the provisional agreement nor the draft conveyance to provide a car park or access to one, and the DMC merely delineates that area of the remaining land of which each owner has the right to use, occupy and enjoy exclusively, without specifying to what use it may be put. The piece of land upon which this property stands is locked in by lots owned by others. This itself is not unusual in the New Territories, nor, I suspect, for owners to have to park some way from their residence. When it was being built there was access provided across neighbouring land, and no doubt the plaintiffs assumed that access would be available, and probably the same way. This assumption was in no way the fault of the defendant, and certainly does not help the plaintiffs now in their attempt to imply such a term in the agreement.

13. The courts will imply terms, but only where such terms are necessary or obvious. It may seem unreasonable for an agreement not to imply vehicular access, but it is not a ground for such implication that a term would merely be reasonable where there is otherwise no necessity for it to give business efficacy to the contract. Here too I am bound to agree with the defendant that the requisition as to access has also been adequately answered.

14. That is not completely an end to the matter as, in spite of their contention that he was under no obligation, the defendant had in fact arranged ex gratia for a grant of right of way from the owner of neighbouring land as he was eager to complete the sale. The plaintiffs have two further complaints about this. The first is that there are obstructions on the path of the right of way, and that it is actually inaccessible to vehicles. The second is that the grant was signed by the manager of the Tso which owned the land, and they have not been given evidence of his authority to do so.

15. In respect of the first, I have as evidence of their contention only a surveyor's report. That shows a plan with the proposed access road with a minimum width of 8 feet. The report also refers to other features which will be affected by the access road, namely two walls. It says nowhere that access is not possible by vehicle, nor that the walls referred to prevent access. In any event, having provided a right of way, there is certainly no obligation on the defendant to pave it, remove temporary obstacles, or maintain it. By providing it he has done more than he was obliged to, and the plaintiffs might only have a complaint if they had evidence that the state of it was such that it was in effect no right of way at all. There is no such evidence here.

16. As to the authority of the manager of the Tso, there is no evidence that he was not properly appointed under section 15 of the New Territories Ordinance, and his authority is a matter of law. Again I consider that the defendant need not answer such a requisition. In any event, in view of my finding above that there was no implied term in respect of access, neither of these complaints have any merit.

17. The plaintiffs' originating summons will accordingly be dismissed, with an order nisi that they pay the defendant's costs to be taxed.

18. I understand that these proceedings have been registered as a lis

pendens against the property, and in order to avoid the requirement of a further application, I also order that the registration be removed.