CREATIVE OWL INVESTMENT CO LTD v. JIN KANG

DCCJ 3396/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 3396 OF 2011

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JUDGMENT

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1.  In this action the plaintiff claims against the defendant for the return of a deposit in the sum of $372,000 and damages arising out of the breach of the sale and purchase agreement in respect of the purchase of a property known as Flat G, 28^th Floor, Block 2, Coastal Skyline, 12 Tung Chung Waterfront Road, Tung Chung, Lantau Island (“the Property”).

2.  On 24.5.2011, the plaintiff as the purchaser entered into a preliminary sale and purchase agreement with the defendant as the vendor to buy the Property at $3.72 million.   On 7.6.2011 a sale and purchase agreement (“the SP Agreement”) was signed by both parties.  Completion of the sale was to take place on 6.7.2011.  But the transaction did not go through because the plaintiff opined that the defendant failed to prove and give a good title to the Property.

3.  The plaintiff paid a total deposit of $372,000, and the stamp duty of the agreement in the sum of $83,700.

4.  By an assignment dated 11.6.2009 (“the Last Assignment”), the defendant purchased the Property from the then owner of the Property.  In the execution clause of the Last Assignment the defendant’s signature appeared as “Jin Kang”.  However, in the SP Agreement, the defendant’s signature appeared as “JIN KANG”.

5.  On 11.6.2011, the plaintiff’s solicitors wrote to the defendant’s solicitors, pointing out the discrepancy in the defendant’s signatures, and invited the defendant to sign again on the SP Agreement with reference to his signature in the Last Assignment.  On 17.6.2011 the defendant’s solicitors wrote to the plaintiff’s solicitors, stating that the two signatures of the defendant looked “almost identical”.

6.  On 21.6.2011, the plaintiff’s solicitors wrote to the defendant’s solicitors, asking them to clarify the discrepancy in the signatures and to ensure that the defendant would adopt the signature in the Last Assignment by signing as “Jin Kang” in the subsequent assignment.

7.  In their letter dated 28.6.2011, the defendant’s solicitors enclosed a copy of Power of Attorney dated 3.6.2011 made by the defendant.  In this Power of Attorney the defendant appointed one Zhang Man, Christina as her attorney to execute deeds relating to the Property.  The defendant’s solicitors stated that the defendant would execute the subsequent assignment by the said attorney. There were two signatures appended to the Power of Attorney, namely, “JIN KANG” and “金康”.

8.  The plaintiff’s solicitors noted the following discrepancies of signatures and identification of the defendant in the Last Assignment, the SP Agreement and the Power of Attorney:-

Document	Date of document	Discrepancies of signature	Discrepancies of identification
The Last Assignment	11.6.2009	Jin kang	PRC Hongkong and Macau Entry Permit No W15161497
The SP Agreement	7.6.2011	JIN KANG	PRC Hongkong and Macau Entry Permit No W48660441 and PRC ID No 110108196811065721
Power of Attorney	3.6.2011	JIN KANG金康	HKID No W15161497, PRC Hongkong and Macau Entry Permit No W48660441 and PRC ID No 110108196811065721

9.  By way of a letter dated 29.6.2011, the plaintiff’s solicitors raised requisition on title and pointed out the above-said discrepancies, stating that the Power of Attorney was not acceptable and requested for a statutory declaration by the defendant to clarify and explain the said discrepancies in the identification documents.

10.  By way of a letter dated 4.7.2011 the defendant’s solicitors sent to the plaintiff’s solicitors a power of attorney dated 3.6.2011 (“the Revised Power of Attorney”).  According to the defendant’s solicitors, this power of attorney was just the original power of attorney dated 3.6.2011, but they had replaced page 5 of the power of attorney to provide details of the current and previous identification documents held by the defendant.  In this letter  the defendant’s solicitors stated:-

“Please note that we have invited our client to append her signature in the style as appeared on Assignment Memorial No. …………… thereon. Furthermore, we have replaced page 5 of the said Power Attorney to provide details of the current and previous identification documents held by our client.”

11.  On 4.7.2011, by way of a letter to the defendant’s solicitors the plaintiff’s solicitors reiterated their request for a statutory declaration from the defendant to clarify the discrepancy in the identification documents, and sought clarification from the defendant’s solicitors on the date the signature “Jin Kang” was appended to the Revised Power of Attorney.  They also pointed out that the power of attorney had to be properly re-executed.

12.  There is no evidence to show when, how and by whom the signature “Jin Kang” was appended on the Revised Power of Attorney.  In the Order 14 application the defence counsel conceded that the additional signature of “Jin Kang” had not appended on the date which the Revised Power of Attorney was dated, namely, 3.6.2011.  It was appended sometime between 3 June and 4 July 2011. 

13.  By way of a letter dated 5.7.2011 the plaintiff’s solicitors asked the defendant’s solicitors to provide a fresh power of attorney properly executed by the defendant or a confirmation that the defendant would execute the assignment in person on the completion date.  The defendant’s solicitors failed to do all these things as requested.

14.  On 7.7.2011, the plaintiff’s solicitors wrote to the defendant’s solicitors, stating that the defendant failed to provide satisfactory answers to the requisitions raised before the completion date, and was in breach of the SP Agreement.  The plaintiff therefore rescinded the SP Agreement, and demanded the defendant to return the deposit, and reserved his rights to claim damages and other charges from the defendant.

15.  The plaintiff testified in the trial, but the defendant did not.  .

16.  In this case the issue is: did the defendant satisfactorily answered the plaintiff’s requisitions?  The defendant concedes that the plaintiff’s requisitions (on the defendant’s identity, her signature discrepancies and the power of attorney) have not been sufficiently answered by 5.7.2011.  However, the defendant submits that upon the plaintiff’s receipt of the copies of identification documents of the defendant, all muddy waters have been clear.  Such copies of identification of documents of the defendant amount to clear, cogent and compelling evidence, sufficient to remove any reasonable doubt on the defendant’s identity.

17.  In my judgment, by providing to the plaintiff’s solicitors the said copy identifications the defendant simply did not answer the discrepancies raised by the plaintiff’s solicitors.  The issue is not on identity.  The issue is whether the defendant answered the requisitions raised by the plaintiff’s solicitors satisfactorily.  After the production of the Revised Power of Attorney on 4.7.2011, the defendant’s solicitors did not provide any information to the plaintiff in respect of the circumstances in which the Revised Power of Attorney was executed.  No direct answer was given in response to the questions of when the further signature was appended, whether the Revised Power of Attorney was properly executed, and whether the further signature was properly attested.  The defendant therefore did not provide information reasonably required for the plaintiff to consider and decide whether the Revised Power of Attorney could be accepted as a valid document of title.  She therefore failed to answer the requisitions satisfactorily.

18.  By reason of the matters above-said I enter judgment in favour of the plaintiff.  I impose the following order:-

(1)  the defendant do return to the plaintiff within 14 days from today the deposits in the sum of $372,000 with interest thereon, at judgment rate, commencing from 1.9.2011 until satisfaction;

(2)  the defendant do pay to the plaintiff damages including the legal costs and disbursements in the sum of $21,165 paid by the plaintiff to his solicitors in respect of the subject conveyancing transaction, with interest thereon, at judgment rate, commencing from 1.9.2011 until satisfaction;

(3)  the defendant do indemnify the plaintiff the estate agent’s commission, at the sum of $66,960, should the amount be required to be paid by the plaintiff;

(4)  there be a declaration that the plaintiff do have a purchaser’s lien over the Property in respect of the said sum of $372,000, as well as the sum of $21,165.

Costs

19.  I make an order nisi, to be made absolute in 14 days’ time, that the defendant do pay the plaintiff the costs of these proceedings (including the costs of the Order 14 proceedings), to be taxed, if not agreed, with certificate for counsel.