CHIONG STANLEY v. LAM YIP HING AND ANOTHER

HCMP 1370/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

MISCELLANEOUS PROCEEDINGS NO. 1370 OF 2009

(ON AN INTENDED APPEAL FROM DCCJ NO. 4463 OF 2008)

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REASONS FOR JUDGMENT

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Hon Tang VP (giving the reasons for judgment of the Court):

1.  The plaintiff’s claim arose out of his aborted attempt to purchase Apartment E, 18/F, Kimberley 26, No. 26 Kimberley Road, Kowloon (“the Property”).  Completion did not take place because the plaintiff was not satisfied with the defendants’ answers to his requisition on title. 

2.  The matter went before District Judge Chow for hearing as a result of competing summonses by the parties for summary judgment on the claim and counterclaim respectively.  Stated briefly, the plaintiff’s claim was for the return of the deposit of $360,000 and damages to be assessed and the defendants’ counterclaimed that the deposit had been rightly forfeited.

3.  On 29 May 2009, the learned judge gave judgment in favour of the defendants on their counterclaim and dismissed the plaintiff’s claim.  On 7 July 2009, the learned judge refused leave to appeal.  On 31 July 2009, Rogers VP refused leave to appeal, stating:

“… There appears to be no merit in this appeal whatever.”

4.  The plaintiff on 7 August 2009 applied for reconsideration of Rogers VP’s determination at an oral hearing inter partes pursuant to O. 59 r. 2A(7).  The oral hearing took place on 29 September 2009, at the end of which we dismissed the application for leave to appeal with costs.

5.  On 5 September 2008, Messrs. Chan, Wong & Lam (“CWL”) acting for the plaintiff raised requisitions on title.  The only relevant requisition for the present purpose relates to the assignment Memorial No. 05030701410054 (“the assignment”).  That was an assignment of the Property by Bushell Limited (“Bushell”) to Dragon Fair Industries Ltd which stated that it was:

“SEALED with the Common Seal of (Bushell) and SIGNED by Tam Kraven Kin Man and Tan Lim Heng, directors,

who is/are duly authorised by the Board of Directors of the Vendor and whose signature(s) is/are verified by:

HENRY M.H. KU

Solicitor, Hong Kong SAR”

6.  It is not clear why but CWL were provided with a copy of the minutes of a meeting of the Board of Directors of Bushell held on 14 October 2004 (“the minutes”) from which it appeared that Bushell was the developer of Kimberley 26, that they intended to sell the units in Kimberley 26 and that regarding such sale, it was resolved that:

“(B) Sale of Kimberley 26 

IT WAS RESOLVED that any one ‘A’ Director and any one ‘B’ Director of the Company be authorized to sign under hand or execute under the common seal of the Company for and on behalf of the Company all the relevant agreements, supplemental agreements, confirmatory agreements, cancellation agreements, deeds of undertaking, assignments, confirmatory assignments, deed of mutual covenant and management agreement, sub-deed(s) of mutual covenant, management agreements and / or other deeds and documents in relation to the sale of Kimberley 26.”

7.  The minutes began by naming the persons who were present at the meeting in the following manner:

“Mr. Lau Shu Yan, Julius (‘A’ Director)

Mr. Tse Kim Lun (‘A’ Director)

Mr. Tan Lim Heng (‘B’ Director)

Mr. Tsang Cho Tai (‘B’ Director)”

8.  The requisition raised by CWL on 5 September 2008 is in the following terms:

“Assignment Memorial No.05030701410054

We note that the above Assignment was executed by Tam Kraven Kin Man and Tan Lim Heng on behalf of the Vendor. We also note that by a Board Resolution dated the 14th October 2004 the said Tam Kraven Kin Man was not an authorized person in execution of any document. Please let us have the documentary evidence to prove due execution of the Assignment.

We enclose the extract pages of the said Assignment and Board Resolution in question for your easy reference.”

9.  Yaddy Cheung & Co., then solicitors for the defendants, replied by letter dated 20 September 2008:

“1.    Assignment Memorial No.05030701410054

The Assignment Memorial No.05030701410054 has been duly executed by the two directors, Section 20 of the Conveyancing and Property shall apply. We are of the view that due execution of the said Assignment by the Vendor, Bushell Limited was presumed under Section 23 of the Conveyancing and Property Ordinance.”

10.  Put simply, the submission of Mr Jason Wong, appearing for the plaintiff, is that having regard to the minutes, the plaintiff could not rely on section 23 of the Conveyancing and Property Ordinance, Cap. 219, which provides:

“An instrument appearing to be duly executed shall be presumed, until the contrary is proved, to have been duly executed.”

11.  Mr Wong submitted that for the assignment to be valid its execution required not just the signatures of two members of Bushell’s Board of Directors, but by one “A” Director and a “B” Director.  He submitted that since there was no evidence that Mr Tam was an “A” Director, the fact that Mr Tam was in fact an “A” Director was insufficient since he was not shown to be such during requisitions. 

12.  However, the minutes did not say that there were only two “A” Directors and that they were Mr Tam and Mr Tse.  Nor that only the “A” Directors and “B” Directors named therein were authorised to execute an assignment on behalf of Bushell.

13.  The question is whether section 23 has application.  The assignment appeared to have been duly executed.  In fact it stated expressly that Mr Tam and Mr Tan had been duly authorised by the Board of Directors to do so.  The Minutes do not prove the contrary.  This is a clear case for the application of section 23.  Nor can we fault Yaddy Cheung & Co.’s reply to the plaintiff’s requisition.

14.  For these reasons, we have refused leave to appeal with costs.