CHENG SHU KEUNG AND ANOTHER v. SO WING KING

HCMP003281/1997

1997, No. MP3281

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS

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IN THE MATTER of a Provisional Agreement for the Sale and Purchase dated the 7th day of May 1997 in respect of ALL THAT Flat D on2/F & The Roof Thereof Section E of Lot. No.1169 in DD453 Tsuen Wan, New Territories (“the Property”)
and
IN THE MATTER of an application under Section 12 of the Conveyancing and Property Ordinance, Cap.219

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BETWEEN
CHENG SHU KEUNG and KWAN LAI SUM Plaintiffs
AND
SO WING KING Defendant

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Coram : The Hon Mrs Justice Le Pichon in Court

Date of Hearing : 28 November 1997

Date of Judgment : 28 November 1997

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J U D G M E N T

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1. This is a Vendor and Purchaser Summons taken out by the Vendors in relation to a property known as Flat D on the 2nd floor and roofof Section E of Lot No.1169 in DD453, Tsuen Wan, New Territories (“the Property”). The Sale and Purchase Agreement provided thatthe Vendors shall show and give a good title to the Property in accordance with section 13 of the Conveyancing and Property Ordinance, Cap. 219. The Property is held under a Crown Lease commencing 1 July 1898 for a term of 75 years renewable for a further term of 24 years lessthree days.

2. The short point that arises in the present application is whether secondary evidence is acceptable where the Crown lease which isa root of title document is missing, and if so, whether the Vendors have adduced sufficiently clear and cogent secondary evidenceof the missing deed. It is common ground that where section 13(1) applies, the Vendor is under an obligation to produce the Crown lease or a certified copy of it, that being the root of title : seeGold Check Investments Ltd. v. Star Investment Ltd., 1992 (unreported) MP No.592 and BMC International Ltd. v. Star Win Co. Ltd. [1996] 2 HKC 302.

3. The Vendors in the present case are not in a position to produce either the Crown lease or a certified copy of it for the simplereason that it has been mislaid and none of the District Land Offices appears to have retained a copy. Counsel for the Vendors submittedthat where there is a missing title deed, secondary evidence of such a deed may be adduced. He relies on the decision of the EnglishCourt of Appeal in Re The Halifax Commercial Banking Co. Ltd. v. Wood (1898) 79 LT 536.

4. There are two decisions of the Hong Kong Court that are against him. The first is Chan Kam Sing v. Lam Ping Ping Grace [1990] 1 HKC 373. In that case, secondary evidence of the Crown lease was produced and counsel for the vendor argued that that was sufficient accordingto the principle in respect of missing documents laid down in the Halifax case. Deputy Judge Findlay QC (as he then was) held atp.375 as follows :

” Where, however, the contract or, a fortiori, the law itself entitles the purchaser to require that the vendor produce the deeds,I do not think the case is authority for the view that the court may dispense with this requirement. At p537 of the report of Halifax,Chitty LJ asks counsel for the vendor in that case: ‘Do you say that you can give secondary evidence of a deed where the contractof sale provides that you shall produce the deed itself?’ Counsel replies: ‘No, but the contract here is not to produce the particulardeed.’ Counsel was right. In that case, the contract required only that the vendor deliver an abstract of title to the property concerned.”

The learned judge drew a distinction between a root of title document and other title deeds, and in the former case he held that thecourt may not dispense with the requirement that the deed be produced and that the principle in Halifax was not applicable.

5. Chan Kam Sing was considered by P. Chan J (as he then was) in Wong Wai Ming v. Tang Tat Chi [1993] 1 HKC 341. In that case, the purchaser requested, inter alia, a certified true copy of the Crown lease. In purported answer to the purchaser’srequisitions, the plaintiff produced a certified true copy of the Crown lease as well as what was alleged to be the counterpart ofthe Crown lease. Both documents were unclear in part. On the question whether secondary evidence of a document of title was acceptable,the learned judge, after referring to the Chan Kam Sing case, agreed, distinguishing Halifax, that the court could not dispense with the requirement under section 13(1). He went on to say :

“… While secondary evidence may be adduced to discharge the obligation to show good title if certain documents are lost, it cannotdo away with the obligation to produce the documents if the statute so stipulates. The principle in the Halifax case therefore has no application when it comes to compliance with the statutory requirement. If the Crown Lease or a certified truecopy thereof is not produced, no amount of secondary evidence can suffice for the purpose of complying with s 13(1).”

6. Counsel for the Vendors submitted that the Halifax principle was not fully appreciated by the learned judges in both the Chan Kam Sing case and the Wong Wai Ming case. The distinction sought to be drawn between a root of title document and documents of title in the chain of title is not warranted.It was submitted that it was not the intention of the Legislature when Cap.219 was passed to alter the common law.

7. In the present case, it is unnecessary for me to decide whether or not counsel is correct in his criticism of the Chan Kam Sing and the Wong Wai Ming cases for he is unable to produce clear and cogent secondary evidence of the contents of the Crown lease.

8. The only secondary evidence there is relates to the description of the Property. There is a reference to New Grant No.2250, whichis the Crown lease in the present case, in a Building Licence dated 16 January 1976 to which a plan was attached. There is a letterof compliance relating to the Building Licence. But there is simply no evidence of the Conditions of Grant in the Building Licence,the recital of which was to the following effect :

“This licence is granted subject to the covenant’s conditions and provisos contained in the New Grant under which the Lot is held.”

There is nothing to indicate what the terms of Grant are.

9. In Chan Kam Sing, the learned judge held that the purchaser is entitled to know the terms of the Crown lease in order to see whether all the covenantshad been complied with in deciding the ultimate question whether a good title has been shown. The importance of knowing the conditionsof grant is, I think, obvious. There is simply no secondary evidence of those conditions. So, even if counsel for the Vendors wereright and secondary evidence were acceptable, such secondary evidence as there is in the present case falls far short of what isrequired.

10. I have little doubt that the Vendors have a marketable title. The mislaying of the deed is a matter that could have been addressedby an appropriate special condition in the agreement for sale and purchase. As appears from the judgment of Godfrey J (as he thenwas) in Gold Check Investments Ltd. v. Star Investment Ltd. (supra) and of Barnett J in Gatewood Ltd. v. Silver Noble Investment Ltd. [1993] 1 HKLR 248, that is the correct way of addressing the problem.

11. For the reasons above, I will make an order in terms of paragraphs 3 and 4 of the Re-amended Originating Summons herein.

(Doreen Le Pichon)

Judge of the Court of First Instance
High Court

Representation:

Mr Brian Wong, inst’d by M/s David F.K. Yeung & Partners, for Plaintiffs

Mr Kong Kok Lung, inst’d by M/s Raymond T.L. Tse & Co., for Defendant