GIMEX DEVELOPMENT LTD. v. CUA WAI TAI AND ANOTHER

MP No. 194 of 1998

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 194 OF 1998

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J U D G M E N T

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1. This is an application by Originating Summons for the following relief:

(1) A declaration be granted that, on a proper construction of a Power of Attorney dated 20th March 1990 executed by the 2nd Defendant in favour of the 1st Defendant appointing him her attorney to deal with her interests in the property known as Flat C on the 15th Floor of Trillion Court, No. 1 Dragon Terrace, Causeway Bay, Hong Kong ("the Property"), the 1st Defendant was entitled/empowered to appoint or substitute another person to act as her attorney in the disposal of the Property;

(2) A declaration that the Deed of Substitution dated 20th March 1990 executed by the 1st Defendant appointing Choi Che Keung to act as attorney for the 2nd Defendant in place of himself was valid in constituting the said Choi Che Keung an attorney for the 2nd Defendant;

(3) A further declaration that the Assignment dated 28th December 1990 and registered in Land Registry by Memorial No. 4790666 in respect of the Property was validly executed by the said Choi Che Keung as attorney for both Defendants;

(4) Alternatively, a declaration that the Defendants have no further interest in the Property;

(5) Further or other relief; and

(6) Costs to be provided for.

2. The facts are briefly as follows:

3. Apparently on 26th February 1990, a Provisional Sale and Purchase Agreement had been entered into by the 1st Defendant (whom I shall refer to as "the husband") and the 2nd Defendant (whom I shall refer to as "the wife") for the purchase of the Property in Hong Kong.

4. On 20th March 1990, the wife gave a general Power of Attorney to the husband. On the same day, the husband gave a Power of Attorney appointing Choi his own attorney, and the husband also signed a "Deed of Substitution" appointing Choi an attorney to act for the wife "in substitution for [himself] and to do and execute for [the wife] all acts matters and things which may be necessary to complete the said purchase, to get in the Property, to dispose of her interest therein in any manner whether before or after completion of the sale and purchase".

5. On 23rd March 1990, Choi signed a Formal Sale and Purchase Agreement for the purchase of the Property as attorney for the husband and purportedly as attorney for the wife. And on the same day, he signed a Formal Sale and Purchase Agreement for the sale of the Property also as attorney for the husband and purportedly as attorney for the wife at the same price. In other words, both the purchase of the Property and the sale of the Property were at the same price of $1,740,000.00.

6. On 28th December 1990, there was an Assignment executed by Choi whereby the developer assigned the Property to the husband and wife as confirmors, and the husband and purportedly the wife as confirmors assigned the Property to the Plaintiff.

7. Doubts have now arisen as to whether Mr. Choi had been validly appointed an attorney for the wife, i.e. the question is whether the husband as attorney could himself delegate powers to Choi to act for the wife.

8. The principles of agency are quite clear - delegatus non potest delegare, a delegate (agent) cannot himself delegate discretions to act for another to someone else.

9. Mr. Choi's act in selling the Property to the Plaintiff was not a purely mechanical or ministerial act. Such would have been the case if he had only signed an Agreement where the terms had been agreed by the wife or by the husband, but what he did here was to purport to dispose of the wife's interest in the Property.

10. I have taken into account the points raised by Mr. Miu, namely that the relationship of husband and wife should be given some consideration, that the husband himself had trusted Mr. Choi with his own Power of Attorney, and that there is evidence that documents in these proceedings had been served on the husband and the wife in the Philippines, but both had refused to sign any acknowledgement of receipt (and there is some evidence that both had previously refused to sign a Confirmatory Deed).

11. I see nothing, however, whereby I can imply that the wife had authorised Mr. Choi to sell the Property on her behalf. I might have been more inclined to so hold if the husband had agreed the terms of the sale to the Plaintiff personally, but there is no evidence that he had agreed or even known of the terms.

12. Accordingly, I cannot see how I can (as sought in para. 1 of the Originating Summons) construe the Power of Attorney in the way sought, nor can I see my way to declaring that the Deed of Substitution was valid in constituting Mr. Choi attorney for the wife. Accordingly, I cannot see how I can grant the relief sought in the rest of the Originating Summons.

13. Mr. Miu had submitted that I could in the alternative grant a declaration that the Defendants have no further interest in the Property and he relies on the fact that the Defendants, in particular the wife, has not contested these proceedings.

14. I do not see how I can declare that the wife has no further interest in the Property when, as I have found, she has not validly disposed of her interest in the Property via the Deed of Substitution and the disposal or purported disposal of her interest by Mr. Choi. The fact that she has not contested these proceedings in Hong Kong may be explained by a number of matters, but I will need at least some evidence to show that she has chosen not to defend these proceedings because she has acknowledged that she has no further interest in the Property. The evidence, however, is that both had previously refused to sign Confirmatory Deeds and in the same way both had refused to sign any acknowledgements of receipt of the documents in these proceedings.

15. Accordingly, I do not feel that I am able to declare that the Defendants or rather, in particular, the wife, has no interest in the Property. That is not to say that in any subsequent sale and purchase, the vendor, that is the Plaintiff here, might not be able to persuade a purchaser that this is a purely theoretical blot on the title. That is not a matter for my consideration today; my consideration today is whether I can actually declare that the Defendants have no interest and I find myself unable to do so.

16. Accordingly, the Originating Summons is dismissed.