CHAN HOI FAI RAYMOND v. CHAN KWAI KEUNG

HCMP 1517/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1517 OF 2007

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J U D G M E N T

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NTRODUCTION

1.  The Plaintiff agreed to buy and the Defendant to sell Flat 12B Valiant Court. 

2.  The Defendant was unable to produce the originals of title deeds relating to the property being sold.  The Defendant instead only produced certified copies of such title deeds.

3.  The Defendant also produced a Statutory Declaration by a Ms Vivien Yip explaining that the originals of the title deeds had been lost.  Ms Yip was the person from whom the Defendant had bought the property.

4.  The Plaintiff contends that Ms Yip was not the appropriate person to make the Statutory Declaration.  In any event, the Plaintiff says that the Statutory Declaration does not sufficiently explain the non-production of original title deeds relating to the property. 

5.  The Plaintiff asserts that the Defendant has therefore failed to show or prove good title in the property.  The Plaintiff accordingly claims the return of his deposit of $121,800.

6.  The Defendant counters that good title has been shown and proven.  The Defendant claims to have been entitled to treat the agreement with the Plaintiff as rescinded and the Plaintiff’s deposit as forfeited.

II. BACKGROUND

7.  Ms. Yip’s Statutory Declaration is dated 5 September 2002.  It reads:-

“	1.	I am the registered owner of the property known as Flat B, 12th Floor, Valiant Court, No.33 Cross Street, Hong Kong (‘the said Property’).
	2.	I purchased the said Property in June 2001 at the office of Messrs K B Chau & Co. and on completion, I was given a set of title deeds on or about the 8 November 2001 as per Acknowledgment Receipt attached hereto marked ‘A’ (‘the said title deeds’).
	3.	I duly kept the said title deeds with me until about 20 December 2001 when I authorised my mother to deal with the said Property and deposited the said title deeds, keys and related documents with Messrs T S Tong & Co., who were solicitors for me and my mother in relation to some family business.
	4.	I then left Hong Kong for Canada until my recent return when I asked my present solicitors, Messrs K B Chau & Co. to write to Messrs T S Tong & Co. for the return of the said title deeds.
	5.	By a letter dated 26 August 2002, Messrs T S Tong replied that they did not have the said title deeds.
	6.	I have also conducted a search of the said Property and could not find the said title deeds and verily believe that the same has been lost and could not be found.
	7.	I confirm that I have not deposited the said title deeds with any one for the purpose of sale, lien, charge or otherwise.”

8.  The letter from Messrs T S Tong & Co. mentioned in the Statutory Declaration is dated 26 August 2002 and addressed to Messrs K B Chau & Co.  The letter states:-

“	We thank you for letter of the 7 August 2002 and further to the telephone conversation between your Miss Tam and our Mr C K Mong and your Miss Tam and our Mr K Y Chan on the 9 August 2002, we confirm that we do not have the title deeds in question in our possession.
	Perhaps you could let us have a copy of our receipt or other document for our further investigation.”

9.  An early draft of Ms Yip’s Statutory Declaration stated that Ms Yip had “neither deposited the title deeds to Messrs T S Tong & Co. and/or my mother at that time”.  The draft continued: “I [Ms Yip] messed up two dealings with Messrs T S Tong in respect of the property.”  Ms Yip never executed such draft.

10.  Ms Yip’s mother passed away in 2004.

III. DISCUSSION

A. Was Ms Yip an appropriate person?

11.  In Yiu Ping Fong and another v Lam Lai Hing Lana [1998] 4 HKC 476, Yuen J stated (at 484F):-

“	The purpose of the statutory declaration accompanying a missing title deed is to explain the circumstances in which the deed was lost and to show how the person who ought to have custody of it could not find it despite proper endeavours.”

12.  Ms Winnie Lau (the Plaintiff’s counsel) argues that Ms Yip was not an appropriate person to make the Statutory Declaration because Ms Yip could not have been “the person who ought to have custody” of the missing title deeds.  Ms Lau points out that, on Ms Yip’s version of events as stated in the Statutory Declaration, upon leaving for Canada, she would have entrusted the title deeds either to Messrs T S Tong or her mother.  It follows (Ms Lau reasons) that the person having custody of the title deeds just before they went missing would either have been Ms Yip’s mother or Messrs T S Tong, not Ms Yip.

13.  I am not persuaded by Ms Lau’s submission.  In my view, Ms Yip was an appropriate person to make the Statutory Declaration.

14.  Some practical guidance on the question of an appropriate person may be obtained from the facts of Yiu Ping Fong. 

15.  There a Vendor purchased premises from Chiu.  At the time of the Vendor’s purchase from Chiu, Chiu provided a declaration notarised in Taiwan that the original of a 1986 Deed of Assignment had been lost. 

16.  Upon the Vendor later agreeing to sell the premises to a Purchaser, the Vendor produced Chiu’s Taiwanese declaration to explain non-production of the 1986 Assignment.  In the event that the Taiwanese declaration was not valid because it did not comply with Hong Kong law, the Vendor offered to make her own declaration in the requisite form to the effect that she did not have the 1986 Assignment.

17.  The Taiwanese declaration stated that Chiu had bought the property from her mother Lin in 1990.  Having received the title deeds, Chiu deposited the same at her brother’s office.  According to the declaration, when Chiu got back the title deeds in 1994, she only found a copy (as opposed to the original) of the 1986 Assignment.

18.  Yuen J held that Chiu’s declaration was not valid because it was made in Taiwan and not in Hong Kong as required by Hong Kong law.  Of the Vendor’s offer to make a statutory declaration in proper form, Yuen J then said (at 484F-G):-

“

The vendor here can only say that she personally never had the original 1986 assignment.  She cannot of her own knowledge explain the circumstances of the loss because she was not the person who had custody of it.  That was Chiu, and as I have held, there was no valid statutory declaration made by Chiu.”

19.  The situation in Yiu Ping Fong was similar to that here.  In the latter, Chiu deposited an original deed with her brother.  The brother could not later produce the original.  Here, Ms Yip says that she deposited the relevant deeds with her solicitors.  For whatever reason, the solicitors say that they do not now have the deeds.

20.  In Yiu Ping Fong the Court thought that the appropriate person to make a declaration was Chiu, despite the fact that the original 1986 Assignment would presumably have physically been with the brother just before it went missing.

21.  By analogy, the appropriate person to make a declaration here must then be Ms Yip. 

22.  This can hardly be a surprising result.  As owner of the property prior to its sale to the Defendant, Ms Yip would be a person whom one might expect “ought to have custody” of relevant title deeds. 

23.  It is true that, on Ms Yip’s own account, she left the title deeds with Messrs T S Tong.  If so, Messrs T S Tong would then have had physical possession of the deeds.  Even then, such physical possession would have been on behalf of Ms Yip.  Ms Yip would still have had “custody” of the deeds just before they went missing from the hands of Messrs T S Tong as her agents.

B. Is the Statutory Declaration sufficient explanation?

24.  Ms Lau submits that the Statutory Declaration raises more questions than it answers and is thus inadequate.

25.  Examples of pertinent questions which Ms Lau says are not addressed by the Statutory Declaration are as follows:-

(1)	Why is that Messrs T S Tong say that they do not have the title deeds if Ms Yip had deposited the same with Messrs T S Tong?
(2)	By their letter, are Messrs T S Tong accepting or not that they ever received the title deeds from Ms Yip?
(3)	What steps did Messrs T S Tong take to locate any title deeds deposited with them by Ms Yip?
(4)	Having received Messrs T S Tong’s letter, how did Ms Yip deal with the request there for a receipt acknowledging delivery of the title deeds to Messrs T S Tong?
(5)	Given that upon leaving for Canada Ms Yip authorised her mother to deal with the property, did Ms Yip ever investigate whether her mother had done anything with the title deeds?
(6)	In any event, what inquiries did Ms Yip make of her mother in relation to the location of the title deeds?

26.  Some practical guidance on what constitutes a sufficient declaration may be obtained from Ip Fung Yee v The Norwegian Missionary Society [1998] 1 HKLRD 94.

27.  The relevant part of the statutory declaration in Ip Fung Yee (set out at 99E-G of the report) stated:-

“	(3)	It is now discovered all the relevant title deeds and documents relating to the above premises are missing.
	(4)	The [Defendant] Society has made exhaustive searches for the said title deeds and documents.
	(5)	Notwithstanding such exhaustive searches made by the Society the said title deeds and documents cannot be found and I verily believe that the same have been lost in circumstances unknown to the Society and cannot be found.
	(6)	The Society has not sold mortgaged or otherwise dealt with the said premises.”

28.  Deputy Judge Whaley held that the above was a sufficient explanation of how the title deeds came to be missing.  He said (at 99G-J):-

“	The plaintiff’s solicitors complained that the Statutory Declaration should state, inter alia, what was done with the title deeds after completion in 1977 and by whom: when the documents were last seen and whether they were examined and found to be complete; when it was first learned that they were missing and what was done to locate them, or the circumstances in which they were destroyed.  Mr. Hung [counsel for the plaintiff] submitted that in addition the Declaration should specifically state whether the lawyers who had handled the documents had returned them to any staff or agent of the defendant, and if so, the identity of such persons, and also explain where the documents were supposed to be stored.
	The defendant’s solicitors responded that it was sufficient for the Statutory Declaration to confirm that the title deeds had been lost and that the vendor had not charged the property to anybody else, and that the further particulars required by the purchaser were not necessary.
	While the additional information which the plaintiff’s solicitors requested to be included in the statutory declaration could not fairly be described as unreasonable, in my view the Statutory Declaration did provide a reasonable explanation for the loss of the documents, since there is no reason to doubt from its contents that a diligent search for the documents had been made in good faith.”

29.  According to Ms Yip’s declaration, she delivered the deeds to Messrs T S Tong.  Unfortunately, for whatever reason, the solicitors say that they do not have the deeds.  Ms Yip adds that she has not charged the property in any way, whether legal or equitable. 

30.  I doubt that more needs to be said.  Of course it will always be possible to condescend to further and better particulars as Ms Lau suggests.  But, as Judge Whaley has pointed out in Ip Fung Yee, the test is not whether the further particulars sought are reasonable, but whether the particulars already given are an adequate explanation.  In my view, the details provided by the Statutory Declaration provide the necessary minimum information required and so are adequate.

31.  By way of comparison, the Statutory Declaration in fact gives fuller particulars on how the relevant deeds came to be missing than the declaration in Ip Fung Yee.  For instance, while Ms Yip talks of having made inquiries of Messrs T S Tong and having “also conducted a search of the said Property,” the Norwegian Society’s declaration merely deposes that “exhaustive searches” were made for the relevant documents. 

32.  Given the declaration in Ip Fung Yee was an adequate accounting for the disappearance of title deeds despite “proper endeavours” to locate them, all the more so must the Statutory Declaration here be sufficient.

33.  I would make 3 further observations.

34.  First, contrary to what the Plaintiff’s affidavit evidence suggests, Ms Yip nowhere says that she gave the deeds to her mother or that her mother came into possession of the deeds through her.  Accordingly, I do not think that the Statutory Declaration requires further details about the involvement of Ms Yip’s mother.

35.  Second, although both Ms Lau and Mr Dick Lee (the Defendant’s counsel) have sought to draw inferences from the text of the draft Statutory Declaration, I do not think that document advances matters.  It was drafted by solicitors, but it was never signed by Ms Yip.  It is fully possible that she regarded the draft as (say) not in keeping with her instructions.

36.  Third, in the course of submission Ms Lau cited Choi Kar Yin and another v Wong Siu Hung HCMP 1728 of 2006, 13 March 2007.

37.  There the Vendor made a similar offer to that made in Yiu Ping Fong.  That was to provide a declaration that the Vendor did not have certain title deeds.  But since (as in Yiu Ping Fong) the Vendor had no personal knowledge about how the deeds came to be lost in the first place, Deputy Judge To held that any such declaration would have no evidential value.  The vendor was not an appropriate person to make a declaration.

38.  Choi Kar Yin helps in the identification of an appropriate person to make a declaration.  But it does not assist much more on what in practical terms constitutes a sufficient statutory declaration by an appropriate person.

IV. CONCLUSION

39.  The question is whether the Defendant has sufficiently answered a requisition by the Plaintiff as to the appropriateness and sufficiency of the Statutory Declaration.

40.  Ms Yip was an appropriate person to make the Statutory Declaration.  Ms Yip’s declaration is an adequate explanation of how the title deeds to the property came to be missing.

41.  This Summons is determined in the Defendant’s favour.  The Plaintiff’s claim for a return of his forfeited deposit is dismissed.

42.  I shall hear counsel on costs and consequential orders.