WONG YIN AND ANOTHER v. LAU KING YIN

HCMP2748/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.2748 OF 2005

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REASONS  FOR  JUDGMENT

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1. This case concerns a requisition on title.  The plaintiffs are the vendor, and the defendant the purchaser of a Property under an agreement for sale and purchase (“the Agreement”) dated 18 October 2005.

2. The plaintiffs applied by way of Originating Summons for :

(1) A declaration that the following requisitions raised by the defendant’s solicitors in a letter dated 23 November 2005 have been sufficiently and satisfactorily answered by the plaintiff, namely :

(a) (not proceeded with at the hearing); and

(b) Power of Attorney dated 7 June 1995 and Agreement for Sale and Purchase dated 15 December 1995 had no mention of the exterior walls (of the Property);

(2) A declaration that good title to the Property has been shown by the plaintiffs.

3. I gave judgment in favour of the plaintiffs.  I now give reasons.

4. In brief, the Property consists of 1/369 share of certain lots in Kowloon and the building thereon, know as Yuen Fat Building, 1 Nelson Street, together with the right to hold, use and occupy Flat E on the 17^th floor, “together with the exterior walls thereof”.  The Property was so described in the Land Register, the Fourth Schedule of the Assignment dated 27 January 1996 by which it was conveyed by the previous registered owner, Tam So Ming (“Tam”), to the plaintiffs, and the Agreement.

5. Tam did not execute the Assignment himself.  It was executed on his behalf by his attorney, Suen Shun Kwong, in favour of whom Tam had executed a Power of Attorney dated 7 June 1995 (“the POA”).

6. In the recital of the POA, Tam stated that he was the registered owner of the Property, but in the description of the Property which followed, the words “together with the exterior walls thereof” were omitted.  They were also omitted from the sale and purchase agreement executed between the plaintiffs as purchasers and Tam as vendor, which was also executed on Tam’s behalf by his attorney.

7. The defendant’s solicitors wrote in their letter dated 23 November 2005 to the plaintiffs’ solicitors in these terms :

“Power of Attorney dated 7^th June 1995, Agreement for Sale and Purchase Memeorial No. UB6487221 and Assignment Memorial No. UB6547975

We note that the Vendor in the above Assignment assigned the above property to your client.  However, there was no mention of ‘the exterior wall’ in the above Power of Attorney and Agreement for Sale and Purchase.  Please clarify.”

8. The plaintiffs’ solicitors replied on 26 November relying on sections 15 and 16 of the Conveyancing and Property Ordinance, Cap.219 and saying that, in effect, there had been a clerical error which the court would treat as rectified.  Further correspondence followed but the parties could not agree, and so the plaintiffs took out the Originating Summons for a decision by the court on this point, and on another requisition which was not pursued at the hearing.  It was agreed that the parties would bear their own costs.

9. The plaintiffs’ case is that there was no reservation of use of the exterior walls in the POA, and so it empowered the attorney to convey the whole estate in the ownership of the donor.  The omission in the description was a minor mistake.  As to the sale and purchase agreement, this would merge in the conveyance in the plaintiffs’ favour.

10. The defendant’s case is that the POA only empowered the attorney to sell the premises according to the description contained therein, i.e. not including the exterior walls.  Further merger of the contract in the conveyance does not apply because the contract and the assignment were both executed by the attorney; that would only apply if the donor of the POA had executed them.  Therefore the plaintiffs have not shown a good title to the property stated in the Agreement as it included the exterior walls.

11. Ms Fung for the defendant refers to Lai Wing Ho & Anor v. Chan Siu Fong, HCMP2835/1994, Godfrey J.  She argues that even if no separate legal title attached to the exterior walls, it was an equitable right agreed to be sold to the defendant.  In that case the predecessor vendor, who owned two shares in a building with the right to exclusive occupation of the top floor and roof had purported to assign the right to occupy the roof.  The court held that, in effect, the predecessor vendor could not create a new legal estate; at best he could grant a licence to another to use the roof.  She says that the analogy can be drawn that the predecessor vendor could grant a licence to another to use the exterior walls, and the plaintiff now has no right to sell them.

12. With respect, this does not assist.  What Godfrey J said at paragraph 21 of his judgment, after an explanation of the effects of tenancy in common, was this :

“The result is that while a tenant in common can assign his interest in the premises, i.e. his shares which he holds in co-ownership, he cannot create, or convey, or assign any right to exclusive possession of part only of the premises, being a right capable of subsisting as a legal estate in land and binding on his co-owners as well as himself.”

13. His Lordship added that the nearest the tenant in common could get to assigning part of the premises to which he had exclusive use (in that case, the roof) was to grant a licence of it.

14. There was no question here of attempting to assign a right to exclusive possession of part only of the premises, being a right capable of subsisting as a legal estate in land and binding on the co-owner as well as the vendor, which Godfrey J held to be impossible.  Nor is there any suggestion that Tam ever granted a licence to anyone to occupy the exterior walls.  If he did, it would be personal to Tam and the licensee and it would not be enforceable by the licensee against the plaintiffs.

15. The only deficiency in the POA lies in the omission, in the recital, of the words “together with the exterior walls thereof.”  There was no exclusion, only an omission.

16. Clauses 12 and 13 of the POA provide the attorney with the specific power to sell the premises and give a good receipt for any purchase price.  Clause 27 empowers the attorney to execute the assignment of the Property on the donor’s behalf.  Most importantly, the POA concludes in these terms :

“AND I hereby ratify and confirm and agree to ratify and confirm whatsoever my Attorney shall lawfully do or cause to be done in the premises by virtue of these presents.”

17. As I see it, Tam had a good title to the Property which included the exterior walls thereof.  He authorised Suen as his attorney to sell and convey the Property for him.  He did not exclude from that authority any part of the Property.  Even if he had purported to do so, that would not have created a separate legal estate in the exterior walls.  Suen conveyed the Property to the plaintiffs on Tam’s behalf; and Tam, in the POA itself, automatically ratified that.  There was no need, as has been suggested, for a separate document of ratification.  The fact that there was a similar omission from the sale and purchase agreement is also irrelevant because the contract would merge in the conveyance.  It follows that the plaintiffs have a good title to the Property and have shown a good title to it to the defendant.

18. For these reasons, I gave judgment in the plaintiffs’ favour.