CHOI HUNG INVESTMENT CO. LTD. v. CHINCO INVESTMENT LTD.

1994 MP No. 2783

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. This is a vendor and purchaser summons.

2. By a provisional agreement between the Plaintiff and the Defendant which was entered into on or about the 8th August it was agreed that the Plaintiff would purchase the front portion of Ground floor 15 and 15A Ka Shin Street, Kowloon. The conveyance was to be completed on or before the 10th September 1994.

3. The provisional agreement was superseded by a formal written agreement dated the 18th August 1994. That agreement provided that the Defendant should at its own expense prove good title by the 10th September. Any requisition or objection on title was required to be delivered to the Defendant's solicitors within 7 working days after receipt of the title deeds by the Purchaser's solicitors.

4. On the 13th August, that is 5 days before the formal written agreement, the Plaintiff's solicitors received a bundle of what were said to be the relevant title deeds and documents. Requisitions were first raised on the 20th August and there then followed a series of correspondence. The upshot was that the Plaintiff says that the Defendant did not answer a large number the requisitions satisfactorily. Those of which they complain are listed in the Summons. The Defendant however affirms that it has answered all those requisitions which are required to be answered.

5. The title which the Defendant relies upon having made out is as follows. There was a Crown Lease on the 25th January 1973 from the Crown to the Colonial Treasurer Incorporated. A certified copy of that together with agreements dated the 17th January and 1st March was provided. The Occupation permit was issued as far back as 1959 and nothing turns on that. There was then a Deed of Mutual Covenant dated the 18th August 1973. That was entered into by Sadie Margaret McLeod and the Colonial Treasurer Incorporated. That relates back to the granting of the lease in January of the same year and provides for the payment of the share of rent and expenses.

6. By indenture dated the 22nd October 1973 the Colonial Treasurer Incorporated assigned to Yeung Sun of 98 Creffield Road London W.3 the suit premises for the residue of the term which it enjoyed under the Crown lease. A certified copy of the Memorial was provided, but that did not contain Yeung Sun's signature. The copy of the assignment which was provided was a copy of that at the Land Office. That copy did not bear Yeung Sun's signature either.

7. In 1991 there was an assignment from "Francis Hsin Yeung also known as Francis Yeung and formerly known as Yeung Sun." The same address as before, 98 Creffield Road London W.3 was given. The assignment was made in favour of Yeung Hung Man Charles. In May 1994 there was then a subsequent assignment in favour of the Defendant.

8. Yeung Hung Man Charles has made 2 statutory declarations. The first dated the 2nd May 1994 and the second dated the 30th August. The first is more general, it states that despite having made searches the maker is unable to locate the various title documents which he had and are now not locatable. The second commences by referring to the suit premises and goes into specifics as to 4 documents. I need only refer to 2 of those documents here. The first is what is identified as original assignment Memorial No 1043 181, the other is an original declaration of Francis Hsin Yeung dated the 27th July 1973.

9. In respect of the first I consider it right, having regard to the contents of the whole of this second Declaration, to treat that as referring to the assignment by indenture dated the 22nd October 1973 from the Colonial Treasurer Incorporated to Yeung Sun of 98 Creffield Road London W.3 which I have referred to above. There is one digit which is incorrect namely the correct number should be 1043184, but in the context I consider this is clearly a mistake.

10. In respect of the second, the original declaration was obviously found soon thereafter as by letter dated 7th September a certified copy was provided.

11. In my view therefore it is established that there was an indenture. It had been signed by Yeung Sun; that Yeung Sun lived at 98 Creffield Road London W.3. However it is clear that the absence of a valid execution of an assignment by the assignee does not affect title to the property. It might affect the enforceability of the covenants as against Yeung Sun but not his title (see Lee Kim Ha v Yip Moo-chiu and Another [1990] HKDCLR 29)

12. Although the Summons prays declarations in respect of a number of requisitions, the case was argued on behalf of the Plaintiff by relying on the 3 points.

13. In the first place it was said that the original of assignment 1043184 was not available for inspection. As a result it is said, by the Plaintiff, that it has been unable to inspect the signature of Yeung Sun and compare that with the signature on the assignment to Yeung Hung Man Charles dated the 12th December 1991.

14. The second point relied upon by the Plaintiff is that the Assignment by indenture dated the 22nd October 1973 from the Colonial Treasurer Incorporated was to Yeung Sun. However it transpired that on the 27th July 1973 a statutory declaration was made by Francis Hsin Yeung. The Declarant stated that he lived at 98 Creffield Road London W.3 and previously at the premises in question and he was previously called Yeung Sun but thereafter he would not use that name. The difficulty which the Plaintiff puts forward is that the October assignment did use that name and yet it was some 3 months after the declaration of change of name.

15. The third point is that the signature of Yeung Sun on Memorial No 199476 relating to the purchase on the 14th July 1959 of a lease in respect of the suit premises is so different from that appearing on the assignment to Yeung Hung Man Charles dated the 12th December 1991 that it shows that good title has not been proved.

16. Since these are the points which were raised at the hearing I propose to deal with these first before turning to look at the requisitions enumerated in the Summons.

17. In respect of the first point, as I have indicated above, the absence of a valid execution of an assignment by the assignee does not affect the title to the property. The original assignment is not available and its loss has been explained. The copy on file which has been registered is good and valid. In my view therefore this objection is not valid.

18. Turning to the second point raised, it is clear looking at the documentation in 1973 that what happened was that steps were being taken to grant new leases in respect of an existing building. It is in keeping with what would be expected that formal preparation of the documentation would extend over a period of some months. It is therefore quite consistent that if Yeung Sun, who was by then living at 98 Creffield Road London, changed his name at the end of July, the documentation relating to the grant of the new lease to him was only completed in October 1973 and was in his former name. The preparation of that documentation had no doubt started much earlier but it had gone through the steps of a Crown Lease, finalisation of the Deed of Mutual Covenant and finally the parcelling out of the various interests to the various owners. The statutory declaration of July 1973 refers to the declarant having formerly resided at the suit premises. The whole tenor of the documentation is consistent, there being a renewal of a Crown Lease and the person formerly known as Yeung Sun being assigned the new lease in his old name.

19. It is also pertinent to point out that the assignment to Yeung Hung Man Charles dated the 12th December 1991 was made by "Francis Hsin Yeung also known as Francis Yeung and formerly known as Yeung Sun". Again, of course, the document gives the residence of the person in question as 98 Creffield Road London W.3. Referring to the case of Chudai (H.K.) Development Co. Ltd. v. Portia International Ltd. [1992] 1 HKLR 350 it is clear that, as stated at page 355 of the report, the evidence that is required to put identity and therefore title beyond reasonable doubt is generally less where a name is used in one document and that name together with an alias is used in another document in the chain.

20. In my view if I ask myself the question "is there a reasonable doubt cast in respect of whether the person who took the assignment of the property in October 1973 was the same as the person who assigned the property in December 1991", I have to say that the answer is a resounding no.

21. The answer to the third line of complaint is very simply that the lease of which assignment was taken in 1959 does not form part of the chain of title. The fact that the signature is different from the later signatures said to be of the same person does not therefore affect the matter. I would however say that the difference in the signatures is not more than might be expected over a period as long as that which exists here. As I indicate below it appears that in any event this requisition and objection was made too late.

22. I turn then very briefly to the letters in which the specific points have been raised.

23. Points 1b and 1c of the letter of the 20th August and point 2b of the letter of the 8th September appear to me to have been covered by the first point which I have dealt with above.

24. Point 2a in the letter of the 20th August and point 1 in the letter of the 8th September appears to have been covered by the second point which I have dealt with above.

25. Point 4 of the letter of the 20th August appears to me to be a non- point. In any event it was not argued at the hearing.

26. Point 2c of the letter of the 8th September appears to me to be a bad point. In the first place the assignment in 1959 is irrelevant to the title sought to be relied upon now. Secondly even if it is not irrelevant, the point does not go to the root of title and requisition was made outside the period provided in the contract. The document was provided to the Plaintiff's solicitors on the 19th August and it appears to be accepted that it must have been received at least by the 22nd August. The requisition was not made until 8th September.

27. The points made in the letter of the 9th September were either repetitions of requisitions in the previous letters with which I have already dealt, or as point 6 were specifically abandoned and in the case of points 11 to the end seem to me to be mere extension of the previous argument.

28. In conclusion therefore, I do not consider that the Plaintiff is entitled to the relief sought in paragraphs 1, 3, 4, 5 and 7 of the summons. Without obtaining the reliefs in paragraphs 1 and 3 it seems to me to be futile to grant any declaration as sought in paragraph 2. In respect of one of the requisitions at least I have in any event held that the Plaintiff was too late in raising the requisition and objection. I therefore make an Order Nisi dismissing the summons with costs to the Defendant.

29. I should and that in tendering my apology to the parties for the length of time that it has taken me to hand down my decision which has been rather longer than I would have liked, I would say that a decision would have been given on the spot had the case not seriously overrun. The matter was set down for half a day but the Plaintiffs' counsel did not finish his opening address until nearly 12.15 p.m. As a result despite a substantial intrusion of the hearing into the lunch time period, the case was not concluded until more than half the afternoon had been taken up. This matter not only seriously disrupted the flow of work in the Court but inconvenienced the litigants in the afternoon list. Vendor and purchaser summonses are designed to be brought on and heard quickly. The Court cannot operate efficiently and provide the service which it wishes if the legal advisers' estimation of the length of a case is so inaccurate that effectively an opening speech is not concluded in the time allotted for a hearing.