XCHRX GOLDSTEADY INVESTMENT LIMITED v. FATIMA ESTATES LTD

1995 No. MP 2943

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

____________

________________

J U D G M E N T

________________

1. This is an application made by the plaintiff seeking the court's assistance in curing a defect in an assignment executed on 31 August 1989 by the defendant in respect of a property known as Apartment B on 5th Floor and Car Parking Space No. 3 on Ground Floor, Mirror Marina, No. 47 Conduit Road, Hong Kong ("the Property"). The plaintiff was the last of several purchasers for consideration in a line all deriving title to the Property from the assignment. The defect in the assignment arose from the fact that it was executed by an attorney for the defendant. The Power of Attorney dated 31 March 1988 whereby the attorney was appointed was not executed in accordance with the requirement of the Articles of Association of the defendant. Article 103 of the Articles is clear that any instrument to which the defendant's company seal is affixed must be signed by two directors. However, the Power of Attorney was executed with the company's seal but was signed by only one director.

2. The defendant is no longer at its registered office in Hong Kong, and despite various efforts used by the plaintiff through its solicitors, the defendant's three directors can no where be found.

3. The plaintiff relies on section 35(1)(b) of the Conveyancing and Property Ordinance, Cap. 219 which implies in the assignment the following covenant by the defendant as set out in paragraph 5 of Part II of the First Schedule to the Ordinance:

"That all such lawful acts, assurances and things for further or more perfectly assuring the land and every part thereof to the purchaser and to those deriving title under the purchaser shall, from time to time and at all times at the request and cost of the purchaser or any person deriving title under him, be executed and done (subject to the manner in which the assignment is expressly to be made) as by the purchaser or any such person may be reasonably required."

4. Indeed, the assignment incorporated the implied covenant by reference, but it did not specify any manner in which any document was to be executed or anything was to be done for perfectly assuring the Property to the purchaser or to the plaintiff who derived title under the purchaser.

5. In the circumstances, the plaintiff is clearly entitled to relief. I therefore make a declaration that the defendant was a constructive trustee of the Property in favour of the plaintiff. The form of relief, according to the implied covenant, is that the defendant should execute or do all such lawful acts, assurances and things as the plaintiff may reasonably require for further or more perfectly assuring the Property to the plaintiff. I agree with Miss Siron's submission that a confirmatory assignment of the Property to be executed by the defendant is a reasonable requirement by the plaintiff. However, the defendant and its directors are no where to be found within the jurisdiction. It seems to me therefore that what the court should do is to order, and I do so order, that the Registrar of the Supreme Court be appointed by the court to execute such a confirmatory assignment to take effect as if the same were executed by the defendant. The form and terms of the confirmatory assignment should be submitted by the plaintiff to the Registrar for his approval and execution. If there is any disagreement as to the form or terms of the confirmatory assignment, the plaintiff should return to this court. Therefore I also order that there be liberty to apply.

6. The costs of and for the execution of the confirmatory assignment must be borne by the plaintiff, as required by the implied covenant. By the same token, there be no order as to costs of this action.