CO-HOUSE LTD. v. SIU MUN YEE

---------------------------

--------------------------

----------------------

J U D G M E N T

----------------------

This is a dispute between vendor and purchaser.

1. It comes before the Court on what is described as an "inter partes summons" dated 31st January 1992. This is a form of summons suitable for use in proceedings commenced by writ, originating summons, originating notice of motion, or petition (these are the four ways in which proceedings in this Court may be instituted). An ordinary summons such as this is not itself a form of originating process. The present proceedings are, therefore, not properly constituted. But the plaintiff, by its counsel, has indicated that it is prepared to undertake to issue an originating summons for the same relief as is expressed to be claimed by the "inter partes summons" and the defendant has no objection to that course. On that undertaking, therefore, I shall treat the originating summons as before me today and proceed to deal with the merits of the case.

2. The dispute between the parties arises out of a sale and purchase agreement dated 19th November 1991. Under that agreement, the defendant SIU Mun-yee is the vendor and the plaintiff, Co-horse Limited, is the purchaser. The property the subject of the agreement is Flat E, 39th floor, Block 9, Riviera Gardens, Tsuen Wan, New Territories. The purchase price is HK$2,400,000.

3. SIU Mun-yee derives her title under an assignment dated 14th June 1989 and made between (1) Tsuen Wan Properties Limited (described as "the vendor"); (2) CHAN Sau-cheung (described as "the confirmor"); and (3) SIU Mun-yee (described as "the purchaser"). CHAN Sau-cheung, the confirmor, did not execute the assignment personally; she executed it by an attorney. The attorney, described in the assignment as "her lawful attorney", was said to be SIU Mun-yee. The practice of appointing the purchaser as attorney for the confirmor is not uncommon in Hong Kong. But in the present case the plaintiff, the purchaser under the agreement of 19th November 1991, has raised a question upon the Power of Attorney under which SIU Mun-yee claims to have been appointed as the lawful attorney of CHAN Sau-cheung.

4. The Power of Attorney is dated 22nd November 1988 and is expressed to be made by CHAN Sau-cheung, described in the Power of Attorney as "the Principal". It is expressed to be supplemental to an agreement for sub-sale and purchase dated 8th November 1988 made between CHAN Sau-cheung and SIU Mun-yee, whereby CHAN Sau-cheung agreed to sell to SIU Mun-yee the property in question. It recites that CHAN Sau-cheung had contracted with the developer for the purchase of the property but that no assignment in respect thereof had yet been effected; it recites that in the agreement of 8th November 1988, CHAN Sau-cheung had agreed that on completion of the sale and purchase of the property and on payment by SIU Mun-yee of the balance of the purchase price, CHAN Sau-cheung would execute as confirmor and would procure the developer to execute, together with all other necessary parties, a proper assignment of the property to SIU Mun-yee; and, finally, it recites that to secure the performance of the obligation of CHAN Sau-cheung owed to SIU Mun-yee, CHAN Sau-cheung was desirous of authorizing and appointing SIU Mun-yee (thereinafter called "the attorney") as the attorney to act for CHAN Sau-cheung and on her behalf in all the matters thereinafter appearing.

5. So far, so good. But the operative words read as follows:-

"The Principal in consideration of the said Agreement hereby IRREVOCABLY JOINTLY AND SEVERALLY APPOINTS the said Chan Sau Cheung the Attorney in the name of the Principal  ...."

6. This is an obvious nonsense. CHAN Sau-cheung was herself "the Principal". It cannot have been the intention of CHAN Sau-cheung to appoint herself as her own attorney in her own name to act on her own behalf. Such an appointment would serve no purpose and indeed would be of no effect. It is perfectly clear that something has gone wrong. Either the words "the said Chan Sau-cheung" have been inserted in error and ought to have been omitted altogether; or the name "Chan Sau-cheung" was inserted in error for the name "SIU Mun-yee". It does not matter which. As a matter of construction, it is as plain as a pikestaff that the Power of Attorney was intended to operate and does operate to appoint SIU Mun-yee the attorney in the name of CHAN Sau-cheung and on her behalf to execute the assignment of the property.

7. The principle applicable in cases of this sort is set out in clear terms in Key v. Key [1853] 4 DeG M & G 73, at pp. 84, 85, per Knight-Bruce, L.J. :-

"In common with all men, I must acknowledge that there are many cases upon the construction of documents in which the spirit is strong enough to overcome the letter; cases in which it is impossible for a reasonable being, upon a careful perusal of an instrument, not to be satisfied from its contents that a literal, a strict, or an ordinary interpretation given to particular passages, would disappoint and defeat the intention with which the instrument, read as a whole, persuades and convinces him that it was framed. A man so convinced is authorized and bound to construe the writing accordingly."

8. Nevertheless, the plaintiff, the purchaser under the agreement of 19th November 1991, took objection to the title on the ground of this alleged defect in the Power of Attorney. The defendant, the vendor under the agreement, insisted that the Power of Attorney was effective to appoint her the attorney of CHAN Sau-cheung but, through her solicitors, expressed a willingness to allay the purchaser's concern by procuring an amendment to the Power of Attorney or by procuring CHAN Sau-cheung to rectify it. However, the solicitor's attempts in this connection came to nothing.

9. It is in these circumstances that the purchaser took out the "inter partes summons" to which I have referred.

10. As will have appeared, I am of the opinion that there is nothing in the purchaser's objection to the title. The Power of Attorney took effect as it was intended to do and the requisition raised by the purchaser has been sufficiently answered by the vendor. I shall declare accordingly, and I shall order that the costs of the defendant of this application are to be taxed (if not agreed) and paid by the plaintiff to the defendant.