FUNG YEUNG HING AND ANOTHER v. SOLAR TOWN DEVELOPMENT LTD.

HCMP6059/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.6059 OF 1998

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J U D G M E N T

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1. This Vendor and Purchaser Summons relates to a Sales and Purchase Agreement dated 19th June 1998 and entered into by Fung Yeung Hing and Fung Yun Ho ("the Purchasers") and Solar Town Development Limited ("the Vendor") for the Sale and Purchase of all those 13 equal undivided 1,168th part or share of and in the remaining portion of Inland Lot No.587 and of and in Seymour Place, No.60 Robinson Road, Hong Kong, together with the sole and exclusive right to hold use occupy and enjoy Flat A on the 6/F of Seymour Place ("the Property"). The purchase price was $7,180,000 and a deposit and part payment of $718,000 had been paid. Completion was to take place by 5:00 p.m on 29th September 1998, time being of the essence.

2. The issue in this case is not whether the Vendor had a good title but whether Requisitions No.9 and 10 in the Purchasers' Solicitors' letter dated 16th July 1998 have been sufficiently answered by the Vendor.

3. It is trite law, and Mr Paul Lam, Counsel for the Vendor, accepts that the Vendor had a duty to answer requisitions satisfactorily and that if it had failed to do so, it did not matter that the Vendor had a good title to the Property as a matter of fact.

4. By an Assignment dated 8th July 1994, registered by Memorial No.6094223, the Property was assigned by the developer, Wyfold Company Limited to Madam Ieong Siu Fong ("Madam Ieong") Clause 5 of which provides that :-

"5. The Purchaser hereby expressly and irrevocably authorises the Vendor to do all acts deeds matters and things and to execute sign seal and as his act and deed deliver such deed or deeds and to sign such documents or instruments as may be necessary for or incidental to the exercise of the Vendor's rights under or referred to in paragraph 1(B)(b)(ii) of the said Second Schedule and further agrees to procure that every assignment of the Property by the Purchaser or his nominee or his sub-purchaser shall contain the like authority. This authority is deemed to have been granted jointly and severally by the Purchaser, if the Purchaser consists of more than one person."

The 2nd Schedule provides that :-

"1. The Property :-

.......

(B) Exceptions and reservations :-

......

(b) Excepting and reserving unto the Vendor its successors and assigns other than the Purchaser :-

.......

(ii) Such rights and privileges of the Vendor or its successors in title and assigns other than the Purchaser as are specified and contained in the Deed of Mutual Covenant and Management Agreement."

5. By an Agreement for Sale and Purchase dated 5th June 1997, registered by Memorial No.7154080, made between Madam Ieong and the Vendor in this action, Madam Ieong agreed to sell and the Vendor in this action agreed to purchase the Property. Macau Identity Card No. [Macau ID No.] was given in Part I of the 1st Schedule as the identification number of Madam Ieong although her Macau Identity Card number was not referred to on the signature page when Madam Ieong signed before one Esther S.Y. Wong, Solicitor, Hong Kong.

6. The Assignment to the Vendor in this action is dated 30th September 1997 and registered by Memorial No.7307610, Clause 5 of which reads as follows :-

"5. The Purchaser hereby expressly and irrevocably authorises the Vendor to do all acts deeds matters and things and to execute sign seal and as his act and deed or deeds and to sign such documents or instruments as may be necessary for or incidental to the exercise of the Vendor's rights under or referred to in Paragraph 1(B)(b)(ii) of the Second Schedule as mentioned in the Assignment Memorial No.6094223 ('the said Assignment') and further agrees to procure that every assignment of the Property by the Purchaser or his nominee or his sub-purchaser shall contain the like authority. This authority is deemed to have been granted jointly and severally by the Purchaser, if the Purchaser consists of more than one person."

This instrument is signed by Leung Angela On Kei as the lawful attorney of Madam Ieong. The Power of Attorney relied on is one dated "13th day of February One Thousand Nine Hundred And Ninety Six SEVEN" where "Six" was amended to "SEVEN". Below the date were the words :-

"SIGNED SEALED and DELIVERED by the said IEONG SIU FONG (who having been previously identified by production of her Macau Identity Card No. [Macau ID No.]) in the presence of :-"

below which was an illegible signature followed by the typed written words "Notary Public", below which were the handwritten words "Solicitor of the Supreme Court of QLD". To the right of the handwritten words was the impression of an oval shaped chop bearing the words "Commissioner for Declarations, Department of Justice, Queensland, Reg. No". A number [the No. on PA] was written down as the registration number. The identity of the person before whom the person executing this document is said to have produced her Macau identity card number is not known. This person is said to be :

(a) a Notary Public;

(b) a Solicitor of the Supreme Court of QLD; and

(c) a Commissioner for Declaration of the Department of Justice, Queensland with [the No. on PA] as his/her registration number.

7. Requisitions were raised by letter dated 16th July 1998. Requisitions No.9 and 10 read as follows :-

"9. Assignment Memorial No.7307610

Please have clauses 4 and 5 of the above Assignment duly rectified as per the copy extract enclosed herewith, whereafter the same shall be returned to us together with the Memorial thereof, your cheque for the prescribed re-registration fee therefor, and a letter of explanation to be submitted to the Land Registrar upon the re-registration of the said document at the Land Registry.

10. Power of Attorney Memorial No.7307609 etc.

a. Execution of the above Power of Attorney was purportedly attested by an unnamed person with the words 'Solicitor of the Supreme Court of QLD' being appended beneath his or her signature. Please adduce proper conveyancing evidence to prove and confirm :

i. the identity of the attesting witness;

ii. the country in which the said Power was executed;

iii. where the said Power was executed in a Commonwealth country, that it was attested by a Notary Public practising in that country; and

iv. where the said Power was executed in a non-Commonwealth country, that it was attested by either a British Consular Official or a Notary Public practising in that country whose signature must in turn be authenticated by an Authentication Officer set out in the Hague Convention 1961.

b. If the said Power of Attorney was executed before a Notary Public, please have the same duly sealed with his or her notarial seal since the affixing of the same, if any, is a mandatory part of the notarial act. In the meantime, the said Power is returned herewith for your further handling.

c. The signature purportedly subscribed by Ieong Siu Fong to each of the said Power of Attorney and the Agreement for Sale and Purchaser Memorial No.7154080 (re-registered by Memorial No.7307608) differs from that subscribed by her to the earlier Assignment Memorial No.6094223. Given such discrepancy and the absence of anything in the said Agreement which may suggest that the signatory had been properly identified, please adduce proper conveyancing evidence to prove that the said documents were all executed by one and the same person, namely the said Ieong Siu Fong, as the then registered owner of the above property.

d. The date of the said Power of Attorney has been altered. Please adduce proper conveyancing evidence to prove that (i) such alteration was duly made by the donor before execution of the said Power (ii) the persons initialling the same were respectively the donor and the said attesting witness and (iii) the date which the said Power purports to bear after the alteration, i.e. 13th February 1997 in contradistinction to 13th February 1996 as originally stated, is the date at which the said Power was executed and came into operation."

8. The reply of the Solicitors for the Vendor, a different firm of Solicitors from the Solicitors for the Vendor on record in this action, in the letter dated 10th August, 1998 was that :-

"9. The discrepancies, if any, would not affect the validity of the Assignment Memorial No.7307610, nor passage of title. As such, no rectification is necessary. We return you herewith the said Assignment Memorial No.7307610 for your further handling.

10.(a)(b) There is no legal requirement that to prove due execution, the signature of a party in a conveyancing document must be attested (Champion (sic) Industrial Limited v Hight Projects Industrial Limited [1992] MP No.3631/92). As such, we opine that no further proof of due execution of the Power of Attorney Memorial No7307609 is required.

(c) We do not think it is necessary to clarify the identity of Ieong Siu Fong by reason of the following :-

(i) there is no substantial difference between the respective signatures of Ieong in the documents concerned;

(ii) Ieong was properly identified by production of her Macau Identity Card No. [Macau ID No.] at the time of her signing/executing the documents concerned.

(iii) The respective signatures of Ieong were duly attested by solicitors in the documents.

(d) It is crystal clear that the amendments made against the date of the Power of Attorney (at age 7) were duly initialled by Ieong and the Notary Public. As such, no further conveyancing evidence is required. We return to you the said Power of Attorney Memorial No.7307609 for your further handling."

9. The Vendor relied on (a) Madam Ieong being "properly identified" by the witness to the Power of Attorney, (b) Madam Ieong's signature being "duly attested" by the "solicitor", and (c) the amendment of the date being "duly initialled" by the "Notary Public". In the circumstances, it lies ill in the mouth of the vendor to contend that there was no need to prove attestation of the Power of Attorney or that the identity of the witness was irrelevant.

10. The Solicitors for the Purchasers wrote on 18th August 1998 stating that :-

"9. Assignment Memorial No.7307610

Clause 5 of the above Assignment purports to confer on Ieong Siu Fong power and authority to do all acts and things, and to execute deeds and documents, for the purposes therein set out where it is clear that the party to be so authorized should be the developer, Wyfold Company Limited, and not the said Ieong Siu Fong. Failure on the part of your client to rectify the said Assignment as requested could have rendered acts done and documents executed by the developer in purported exercise of such power of doubtful validity, thereby exposing the covenantor and her successors in title to possible claim by the developer for, inter alia, a breach of the convenant in the Assignment Memorial No.6094223 that every assignment of the property should contain the requisite authority in its favour. While repeating herein our requisition, we return herewith the said Assignment enabling you to comply with this outstanding requisition.

10. Power of Attorney Memorial No.7307609 etc.

a. The purpose of attesting the execution of a deed is such that its due execution can be proved if need be. Given the suspicious circumstances attending the execution of the above Power of Attorney and, in particular, the differing signatures purportedly subscribed by Ieong Siu Fong, our client is entitled to know the identity of the attesting witness, the country or place in which the said Power was executed where on the face of the document the donor was then residing in Hong Kong, and whether or not execution was attested in the manner set out in the Law Society Circular No.253/90 which, according to the subsequent Circular No.165/93, should be followed as a matter of good conveyancing practice despite the decision in Champhon Industrial Limited v. Hight Projects Industrial Limited (1992). As long as there is non-disclosure of such material facts by you, our requisition remains unanswered and is therefore repeated herein.

b. In the event that the attesting witness was a notary public as confirmed in sub-paragraph 10(d) of your letter under reply, then as a matter of practice the said Power needs to be duly sealed with his or her notarial seal as a mandatory part of the notarial act. Should he or she not attest the said Power as a notary public, the description of such attesting witness as a notary public by the words 'Notary Public' appearing below his or her signature is inappropriate and may be seen as a calculated attempt to mislead others into believing that execution was attested by a notary public. The said Power is therefore returned herewith for your further handling.

c. It is beyond dispute that there is a material difference between Ieong Siu Fong's signature to the Assignment Memorial No.6094223 and that purportedly subscribed by her to the said Power. This, coupled with the fact that the donor was identified and the said Power attested by an unnamed person whose identity you have so far refused to disclose despite what was stated in the Law Society Practice Direction No.1C/87 and in particular paragraph 4 thereof, gives our clients a reasonable cause for suspicion. Insofar as you have failed to adduce proper conveyancing evidence on such matters as were set out in sub-paragraph a above, your views that 'Ieong was properly identified ...' and that 'The respective signatures of Ieong were duly attested by solicitors' can hardly be substantiated on the given facts.

Your view that it is not 'necessary to clarify the identity of Ieong Siu Fong' is largely premised on your presupposition that execution of the said Power was duly attested. Regrettably, when confronted with our requisitions on the attestation of the said Power, you chose inconsistently to evade the issue by arguing that there was no legal requirement for such attestation. Insofar as you have failed to show that the said Power was duly attested as alleged, the thrust of your argument is but a sweeping assertion devoid of legal and factual bases.

d. Since the date of the said Power is material to its validity at the time when the Assignment Memorial No.7307610 was purportedly executed, please adduce proper evidence to prove that 'the amendments made against the [said date] ... were duly initialled by Ieong and the Notary Public' as alleged. Insofar as our requisition on the matters set out in sub-paragraphs 10d(i) and 10d(iii) of our letter dated 16th July 1998 remains unanswered, the same is repeated herein."

11. The Solicitors for the Vendor replied on 21st August 1998 stating that :-

"9. We are sticking with our position.

10. (a),(b),(c) & (d) We are sticking with our position."

12. By letter dated 25th August 1998, the Solicitors for the Purchasers said that unless the requisitions were satisfactorily answered, they would advise their clients to have the matter resolved by vendor and purchaser summons.

13. The Solicitors for the Vendor wrote on 27th August 1998 that :-

"9. Assignment dated 30/9/1997 Memorial No.7307610

Obviously, the omission of the words 'said' immediately before 'the Deed of Mutual Covenant and Management Agreement' as referred to in Clauses 4(a) and (b) is clearly a typing error, which is not significant. Further, the discrepancy (if any) of the covenant stated in Clause 5 highlighted by you would not vitiate our client's title, nor affect the validity of the document. Nevertheless, we would ensure that such express covenant to be incorporated in the subsequent Assignment made in favour of your client.

10. Power of Attorney dated 13/2/1997 Memorial No.7307609

(a) To remove the doubt (if any) upon the identity of Ieong Siu Fong, we enclose a certified copy of her Macau Identity Card No. [Macau ID No.] for your record. Further, we rely on the case of Champion (sic) Industrial Ltd which clearly stated that there was no legal requirement that the signature of a party in a conveyancing document must be duly attested, even though, as you said, it is a good practice to do so.

(b) By reason of the aforesaid, the missing of the notarial seal would not in any way vitiate our client's title.

(c) Please refer to (a) above.

(d) The date of the said Power of Attorney is NOT an essential part of it. Even if the instrument is undated, it is still valid and takes effect from the date of delivery As Godfrey J in the case of Xiamen International Finance Co. Ltd. v Tsui Tai Yan [1987] HKLR977 clearly expressed his view that an incorrect date on a deed of assignment should be disregarded. As such, no rectification is necessary."

14. The response of the Solicitors for the Purchasers by letter dated 31st August 1998 was that :-

"9. Assignment Memorial No.7307610

No purchaser shall be forced to buy a lawsuit on account of a breach of covenant by his predecessor in title. Whether your client's title would be thereby vitiated is an entirely separate issue. Insofar as our requisition has not been properly answered, the same is repeated herein.

10. Power of Attorney Memorial No.7307609 etc.

a. Given the suspicious circumstances attending the execution and attestation (if any) of the above Power of Attorney, the ultimate question is whether the same was executed by the then owner, Ieong Siu Fong, who was described in the earlier Assignment Memorial No.6094223 as being holder of Macau Identity Card No. [Macau ID No.]. The mere production of a certified copy of such Identity Card will in no way assist in resolving the doubt about the authenticity of the signature subscribed to the said Power. Insofar as you have failed and/or refused to disclose such material facts as were set out in sub-paragraph 10a of our letter dated 18th August 1998, our requisition remains unanswered and is repeated herein.

With respect to your reliance on the decision in the Champhon case, we have nothing further to add to what was stated in our said letter except that the case is clearly distinguishable on the ground that it, in the absence of any cause for suspicion, involves nothing more than an objection by the purchaser's solicitors that execution of the power of attorney in question should have been attested by a notary public.

b. Your view that 'the missing of the notarial seal would not in any way vitiate [your] client's title' comprises two distinct propositions, namely (i) that 'the notarial seal' of the attesting witness should have been affixed to the above Power but it has gone missing, and (ii) that this would not vitiate your client's title. The first proposition presupposes that execution of the said Power was attested by a notary public as confirmed by you in sub-paragraph 10(d) of your letter dated 10th August 1998. However, when faced with our requisition on the identity and capacity of the unnamed witness, you simply evaded the issue by insisting that 'there was no legal requirement that the signature of a party in a conveyancing document must be duly attested'. Instead of answering our requisition with full candour, you have by your equivocal reply added doubt to a profound suspicion as to whether the said Power was in fact attested by any witness and executed by the then owner, Ieong Siu Fong. Our requisition remains unanswered and is therefore repeated herein.

c. We can hardly see how the mere production of a certified copy of the Macau Identity Card No. [Macau ID No.] of Ieong Siu Fong will help resolve the discrepancy between the signatures purportedly subscribed by her to the above Power of Attorney and the Assignment Memorial No.6094223. Our requisition remains outstanding and is therefore repeated herein.

d. If you place no reliance on the date which the above Power of Attorney purports to bear, please adduce proper conveyancing evidence to prove the date on which the said Power came into operation, failing which our requisition must be duly complied with."

15. The Solicitors for the Vendor replied by letter dated 10th September 1998 stating that :-

"9. Assignment dated 30/9/1997 Memorial No.7307610

Entirely without prejudice to our view adopted in this matter, we enclose a copy letter dated 3rd September 1998 to Tai, Tang & Chong, whose reply (if any) will be forwarded to you in due course.

10. (a) to (d) Power of Attorney dated 13/2/1997 Memorial No.7307609

Entirely without prejudice to our view adopted previously, we enclose a copy letter dated 3rd September 1998 to Tang & So, whose reply (if any) will be forwarded to you in due course."

16. In fact, as at 10th September 1998, the Solicitors for the Vendor had already received the reply from Messrs. Tang & So dated 5th September 1998 advising that although Messrs. Tang & So had drafted the Power of Attorney, the execution and registration of that document was not handled by Messrs. Tang & So; and that Messrs. Tang & So were "therefore unable to give any reply to the queries raised".

17. In their letter dated 18th September 1998, the Solicitors for the Purchasers took the point about the reply from Messrs. Tang & So dated 5th September, 1998 :-

"9. Assignment Memorial No.7307610

Sending us a copy of the letter from Messrs. Tai Tang & Chong dated 14th September 1998 does not help resolve the issue raised in our letter of 31st August 1998. Our requisition is therefore repeated herein.

10. Power of Attorney Memorial No.7307609 etc.

In their letter to you dated 5th September 1998, Messrs. Tang & So confirmed that they were 'unable to give any reply to the queries raised' in your letter of 3rd September 1998. We are quite surprised that, instead of furnishing us with a copy of such reply, you wrote to us on 10th September 1998 on the basis that you were still awaiting a reply from Messrs. Tang & So. A good title must be shown by the vender within a reasonable time. Regrettably, it was not until 15th September 1998 that you wrote to Messrs. Tai Tang & Chong making further inquiries with a view to answering our requisitions. Insofar as the requisitions raised and/or repeated in our letter of 31st August 1998 remain outstanding, the same are repeated herein.

You have maintained throughout your replies that the above Power of Attorney was attested, and alterations thereto initialled, by a notary public. It now appears that you have all along been uncertain as to (i) the identity, let alone capacity, of the attesting witness, if any, and (ii) the date at which the said Power came into operation. In such circumstances, we cannot see how the vendor could have discharged its duty to answer our requisitions with candour particularly where, by your own admission in your letter to Messrs. Tai Tang & Chong dated 15th September 1998, the said Power has defects which need to be remedied. As a matter of law, our clients are entitled to disclosure of facts which are material to the matters at issue. Without even knowing the name of the purported notary public, we are not in a position to investigate the matter further."

18. The Solicitors for the Purchasers wrote again by letter dated 23rd September 1998 :-

" The Department of Justice Queensland confirmed that the Commissioner for Declarations with such registration number as was endorsed on page 7 of the Power of Attorney Memorial No.7307609 was Mrs. Janet Maree Cagney. We were subsequently advised by lawyers in Australia that, following enquiries made with Mrs. Cagney, they were quite satisfied that she was neither a notary public nor the signatory who had purportedly attested the execution of the said Power."

19. By a further letter dated 24th September 1998 the Solicitors for the Purchasers stated that :-

" Further to our letters of 18th and 23rd September 1998, we have now been advised by lawyers in Australia that they are confident from their check of the roll of Notaries Public in Queenland that the signatory is not a Notary Public.

Though appearing on the face of the Power of Attorney Memorial No.7307609 to be both a Notary Public and a Commissioner for Declarations with registration number [the No. on PA], the signatory turns out to be neither on the available evidence. In the circumstances, your failure and/or refusal to reveal his or her identity has left our clients in serious doubt as to (1) who such signatory is and (2) whether the signature subscribed by the donor and purportedly attested by the signatory is that of the then owner."

20. The Solicitors for the Purchasers wrote again by letter dated 25th September 1998 :-

" Further to our letters of 18th, 23rd and 24th September 1998, we have been advised by lawyers in Australia as follows :

1. The Department of Justice Queensland wrote to clarify that Mrs. Janet Maree Cagney was at the material time registered as a Justice of the Peace (Qualified) for the state of Queensland with registration number [the No. on PA];

2. Mrs. Cagney confirmed that she had never signed any dealings regarding Powers of Attorney and that she was quite certain that she did not witness the execution of the document in question; and

3. According to the Department of Justice Queensland, seal number [the No. on PA] has never been registered to the Commissioner for Declarations category."

21. Mr Lam contended that in respect of Requisition 10, the situation reached what he called "the second stage" when the Solicitors for the Purchasers issued the three letters dated 23rd, 24th and 25th September 1998. Mr Lam accepted that Requisition No.10 was not satisfactorily answered during the second stage if there was a duty on the part of the Vendor to answer. Mr Lam then went on to contend that there was no duty because the Purchasers failed to discharge their duty to produce documentary evidence and because the Purchasers failed to volunteer an extension of time.

22. Mr Lam submitted that there was a genuine and sincere request to the Purchasers "to provide the written documents" in the letter dated 26th September 1998 and that a genuine and sincere request was repeated in the letter dated 29th September 1998 (which is the date of completion).

23. It is to the letter dated 26th September 1998 that I now turn. In that letter, instead of saying words to the effect "please supply us with the documents so that we may properly efficiently and effectively investigate Requisition No. 10", what the Solicitors for the Vendor stated was that :-

"10. Power of Attorney Memorial No.7307609

Making enquiries with solicitors firm which have dealt with the property is one thing. Answering your requisitions is another. It seems that you can read people's mind. The allegations in your letter of 18th September 1998 against professional brothers are too impolite.

Back to this requisitions.

First, we take the view that the signatures of Ieong Siu Fong on Assignment Memorial No.6094223 and Power of Attorney dated 13th February 1997 are strikingly similar.

Second, there is no legal requirement that the execution of a document be attested. Thus, the identity and capacity of the witness is totally immaterial.

Thus, your requisitions in this regard is, with respect, misconceived.

By your letters of the 23rd, 24th and 25th of September 1998, you finally made serious and dangerous allegations on the identity of the attesting witness. Without prejudice to our position stated above, please let us have the written documents from your source in Australia to substantiate your allegations.

In any event, we repeat that the identity and captaincy (sic) of an attesting witness will not affect the validity of a document."

24. This letter started off by drawing a distinction between "making enquiries with solicitors firms" and "answering ... requisitions". It maintained its position that the Requisition was "misconceived" and concluded by reiterating that the identity and capacity of an attesting witness would not affect the validity of documents. The only "request" for documents was made in the context of substantiating what were said to be "serious and dangerous allegations on the identity of the attesting witness". The allegations were not identified. How the allegations could be said to be "serious" or "dangerous" were not explained. How supplying such documents could help in answering the Requisition was not stated. In my judgment, the "request" for documents was neither genuine nor sincere. Thus there is no factual basis for Mr. Lam's submission.

25. The Solicitors for the Purchasers wrote on 28th August 1998 saying that :-

" Our clients certainly have no duty to produce documents to disprove what you have failed to establish. In any event, we fail to see how 'serious and dangerous allegations' could have been made in respect of a signatory whose identity you have persistently failed and/or refused to disclose."

26. The Vendor's Solicitors responded by letter dated 29th September 1998 on the date of completion :-

"10. Power of Attorney Memorial No.7307609 etc.

Let's explain why we say 'You can read people's mind'. You make the same error that you relied on our correspondence with other firms and then commented on our view on the validity/accuracy of certain documents.

As state above (in respect of our correspondence with Johnson Stokes and Master), that is none of your concern. If it's your concern (although a wrong concern), forget it.

The alleged discrepancies between the signatures of Ieong Siu Fong on Assignment Memorial No.6094223 and Power of Attorney dated 13th December 1997 are denied.

They are, we repeat once again, strikingly similar, similar and similar.

You may unfortunately have your own view that the signatures are different (although they are strikingly similar even to naked eyes). You then raised some allegations as to the identity/capacity of the attesting witness (when as a matter of law the attestation is plainly unnecessary).

The allegations are, if not serious and dangerous, at least fabulous (sic) without any accompanying written evidence.

The doucments (sic) in question are on the face of it accurate and proper. Our client's evidence is the documents themselves.

If your client so wish to disprove, rather than simply making fabulous (sic) allegations, please let us have your evidence as well."

27. Instead of answering requisitions, this letter asserted that there were "serious", "dangerous", "fabulous" or nebulous allegations. In my judgment, this letter is unhelpful and there is neither a genuine nor sincere request for documents.

28. In any event, I fail to see how supplying the documents which the Vendor's Solicitors asked for could have helped the Vendor in any way to answer the Requisitions. Supplying the documents would be relevant to the question of who was not the witness when the Vendor should have told the Purchasers who was the witness. It would not have helped the Vendor to show that it had a good title unless and until the Vendor eventually found out that the attesting witness was actually one Mr Michael Lee Podmore who was a Solicitor of Queensland and a Commissioner for Declarations, with a Registration Number quite different from [the No. on PA] and that he put down [the No. on PA] as his registration number by recalling that number from memory. For these reasons, I reject Mr. Lam's submission that the Vendor had no duty to answer Requisition No.10 as the "requested" documents had not been supplied.

29. Mr Lam relied on the case of Lo Shea Chung & Anor v. Lo Hung Biu [1997] 2 HKC 723 at 740 C to assert that : "generally speaking a requisition should not be based on bare possibility, doubt or suspicion". What Nazareth V-P said at p. 740 C must be read in its context [on which see also Ching J.A. (as he then was) at p. 732 A - D, Cheung J. at p. 737 D - E and G - H, and Nazareth V-P at p. 739 B - E]. It was a case about a requisition in respect of a document which pre-dated the intermediate root of title and that decision dealt only with requisitions in that respect. It had nothing to do with this case with requisitions concerning documents within the intermediate root of title.

30. The case of Jasmin Enterprises Ltd v. Chan Yuk Hon [1998] 4 HKC 224 at p. 229 E - I was also relied on by Mr Lam. That was something which the learned judge said after he had already decided in favour of the purchaser.

31. In respect of Mr. Lam's reliance on the case of Wan Moon Ling Wandy v. Sino Gain Investment Ltd [1997] 2 HKC 592 at 595, I do not think it supported the proposition that the requisition should be made by reference to any discrepancies between any plans filed with the District Land Office and the actual condition of the property. The learned Judge was dealing with a contention which had been abandoned by Counsel. Even if it should support Mr. Lam's proposition, I do not see how it assists the Vendor's case in any way.

32. The case of Wong Kam Lan v. Well Win Investment Ltd [1996] 2 HKC 143 does not, in my judgment, support Mr. Lam's proposition that the Purchasers in the circumstances of this case had a duty to volunteer a reasonable extension of time. It decided nothing of the sort, all it decided was that the vendor in that case was in repudiation of contract. There is and can be no allegation that the situation as at the so-called second stage was anything at the making or the fault on the part of the Purchasers or their Solicitors.

33. For the reasons which I have endeavoured to give, even if there was no duty to answer Requisition No.10 at the "first stage", it had not been satisfactorily answered during the "second stage". I therefore make an order that :-

1. A declaration that the requisition numbered 10 contained in Messrs. Clayton Wong & Co.'s letter of 16th July 1998 in respect of the title to the Property have not been sufficiently answered by the Defendant.

2. A declaration that good title to the Property has not been shown by the Defendant in accordance with the Agreement and that the Plaintiffs are entitled to annul the Agreement.

3. A declaration that the Plaintiffs lawfully accepted the Defendant's wrongful repudiation of the Agreement and terminated the Agreement on 29th September 1998.

4. An order that the Defendant do return to the Plaintiffs the sum of HK$718,000.00 being the total amount of the deposits paid by the Plaintiffs to the Defendant under the Agreement.

5. An order that the Defendant do pay to the Plaintiffs :-

(a) the sum of HK$197,450.00 being the stamp duty on the Agreement paid by the Plaintiffs;

(b) damages in the sum of HK$135,666.57; and

(c) costs of this action, to be taxed if not agreed.

6. A declaration that the Plaintiffs are entitled to a lien on the Property for the said deposits, costs of investigation of title and costs of this action.

7. Interest on HK$718,000, HK$197,450 and HK$135,666.57 at judgment rate or rates from 29 September 1998 until date of judgment.

8. The counterclaim of the Vendor raised by paragraph 38(b) of the affirmation of Lee Kwok Wah filed on 27th January 1999 be dismissed.