HANG SENG FINANCE LTD v. THE OFFICIAL ADMINISTRATOR APPOINTED TO REPRESENT THE ESTATE OF MA PUI KING AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. Madame Ma Pui King (the deceased), who died on 10 August 1989, owned a property known as the sixth floor at 7 Sands Street (the property). She made a will under which the second defendant, the deceased's daughter, is the sole beneficiary. On 4 July 1988, she executed a general power of attorney in favour of the second defendant. Under this power, she appointed the second defendant to be her attorney in accordance with section 7 of the Powers of Attorney Ordinance (Cap. 31). Under this section, the second defendant had authority to do on behalf of the deceased anything that the deceased could lawfully do by an attorney. The deceased signed the power by making a mark because, it was said in the power, she was incapable of writing her name because she was ill.

2. On 3 October 1988, solicitors wrote on behalf of the deceased to the plaintiff applying for a mortgage loan of $250,000. On 7 October 1988, the plaintiff wrote to "Mdm. Ma Pui King" offering a loan of $250,000 subject to some conditions, including the provision of security by way of a first charge over the property. On this letter of offer, there is provision for the "borrower's acceptance". This acceptance was signed by the second defendant, without qualification. Simultaneously, the plaintiff wrote to the solicitors instructing them to prepare a first charge by the borrower, described as "Ma Pui King", in its favour.

3. On 20 October 1988, Mr Kevin Kwong, the senior partner of this firm of solicitors visited the deceased in hospital. There, the deceased executed a statutory declaration in which, amongst other things, she confirmed that she had executed the power of attorney in favour of the second defendant.

4. On 21 October 1988, the second defendant executed the mortgage. The mortgage recited that it was "signed sealed and delivered by the borrower by her lawful attorney Kwan Pui Man".

5. On 22 October 1988, Miss Lau, a conveyancing clerk employed by the solicitors, handed to the second defendant a cheque in the sum of $244,896, being the loan of $250,000 less the legal costs. The second defendant signed her name on a copy of the cheque as a receipt. Miss Lau told me that she expressly told the second defendant that she was given the cheque as attorney for the deceased.

6. Due payments were made under the mortgage until February 1991. From then they ceased. After writing to the administrator or executor of the deceased's estate, the plaintiff commenced this action.

7. The second defendant did not acknowledge service, and has taken no part in the proceedings.

8. The plaintiff's claim is based on the mortgage granted by the deceased in consideration for the loan. It is also based on the loan agreement constituted by the offer to the deceased accepted by the signature of the second defendant.

9. Various issues arise from the pleadings, but Mr Lo abandoned all but two. He based his case on the arguments that it had not been shown by the plaintiff that the acceptance signature on the loan agreement dated 7 October 1988 was that of the second defendant, and that, in any event, it had not been established by the plaintiff that the second defendant signed as attorney for the deceased.

10. These arguments do not, of course, help the first defendant at all. Whatever the position may be regarding the written agreement of loan, there is no doubt that the second defendant was authorised to, and did, execute the mortgage in favour of the plaintiff on behalf of the deceased. The terms of this mortgage constitute a cause of action against the first defendant independent of that contained in the written loan agreement. However one may construe the loan agreement, the deceased, through her lawful attorney, accepted that the loan had been advanced to her and assumed the obligation to repay it.

11. But even if I were to ignore the mortgage entirely, and assume that the plaintiff's cause of action were based only on the loan agreement, the first defendant's arguments cannot prevail.

12. The loan facility letter of 7 October 1988 purports to be signed by the second defendant. The letter is addressed to the deceased. On 7 October 1988, the second defendant was the deceased attorney. Consequent upon this letter, the second defendant undeniably signed the mortgage. In this context, it is quite unreal to suggest that there is any basis at all for suggesting that it might be that the second defendant's signature on the loan letter is forged. The probabilities are overwhelmingly against this.

13. The argument that the second defendant did not sign the loan letter on behalf of the deceased is equally untenable. It is true that the second defendant's signature is unqualified, but the second defendant signed the letter purporting to accept an offer made to her principal. Construing the document as a whole, there can be no other conclusion but that the second defendant was accepting the offer on behalf of the deceased. It is not possible to interpret the document as saying that she was doing anything else. One cannot, from the face of the letter, construe it as saying that she was accepting the offer on her own behalf because it was not possible for her to do that; the offer was not made to her.

14. Accordingly, I find that the first defendant is liable to the plaintiff as claimed. It is not challenged that the amount presently due under the mortgage, including interest is $376,404.39. There will be judgment for the plaintiff against the first defendant in this amount, together with interest from 12 March 1997 at the judgment rate.

15. The plaintiff also claims possession of the premises. Mr Lo does not dispute that, in the event that I find against the first defendant, the plaintiff is entitled to this. There will be an order that the first defendant deliver possession of the premises to the plaintiff on or before 1 May 1997.

16. The plaintiff also claims reimbursement from the first defendant of all legal fees and expenses following the default. I make an order accordingly.

17. As against the second defendant, the plaintiff claims an order for possession. I grant an order that the second defendant deliver up possession on or before 1 May 1997.

18. No argument was addressed to me on other remedies sought by the plaintiff. I am not sure that it is entitled to other remedies. If the plaintiff thinks that it should have other relief, I grant leave to bring the matter up for this purpose.

19. As against both defendants, I make an order nisi that they pay the plaintiff's costs.