Wu Wing Kuen v. Leung Kwai Lin Cindy

CACV000240/1999

CACV 240/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 240 OF 1999

(ON APPEAL FROM HCMP 646/1999)

CACV 273/1999

CIVIL APPEAL NO. 273 OF 1999

(ON APPEAL FROM HCMP 5179/1998)

----------------------

Coram : Godfrey and Keith, JJ.A and Ribeiro, J.

Date of Hearing : 26 October and 1, 2 November 1999

Date of Judgment : 23 November 1999

----------------------

J U D G M E N T

----------------------

Godfrey, J.A. :

Introduction

1. These are conjoined appeals from Mr. Robert Tang, S.C. (sitting as a Recorder of the Court of First Instance of the High Court), who gave the judgments under appeal, in the two cases which he had to decide, on 9 July 1999. In one case, to which I shall refer as "the first case", he had to decide whether the inability of a vendor to produce to his purchasers the original of an agreement (for the grant of a Crown Lease) dated 5 October 1889, entitled the purchasers to call off their contract. In the other case, to which I shall refer as "the second case", he had to decide whether the inability of a vendor to produce to her purchaser the original (or a properly attested or certified copy) of a power of attorney, pursuant to which an assignment dated 28 June 1991 (on which the vendor's title depended) had been executed, similarly entitled the purchaser to call off his contract. The Recorder, accepting that the secondary evidence produced by the vendor in each case was sufficient evidence, in the first case of the contents and due execution of the agreement and in the second case of the contents and due execution of the power of attorney, resolved both cases against the purchasers, who now appeal to this court. Their appeals raise questions of considerable importance to conveyancers, and I wish, at the outset of this judgment, to express my gratitude to counsel for the wide-ranging arguments which they presented to us.

The first case

2. In this case, the agreement of 5 October 1889 was the root of the vendor's title. The Recorder said of it :

"The Agreement cannot be found. Neither the District Lands Office nor the Land Registry has any record of the Agreement ... [but] if secondary evidence is admissible, there is sufficient secondary evidence of the Agreement. Its contents can be found in Praya Reclamation Ordinance of 1889 ... Moreover the Agreements relating to other sections of the Praya Reclamation ...are still available ... The Parties to the Agreement can be found in the Assignment ... dated 1 October 1972."

3. We have to decide whether the purchaser was bound to accept this secondary evidence as proof of the agreement, as the Recorder held, or whether the inability of the vendor to produce the original agreement entitled the purchaser to throw up the contract. (Since, for reasons which will appear, I am of the opinion that the purchaser was bound to accept the secondary evidence offered as proof of the agreement, I need not deal with other arguments which were advanced to us on the footing that the purchaser was not so bound.)

The second case

4. In this case, the assignment of 28 June 1999 was, as the Recorder held :

"... an essential link in the chain of title ... It follows that it is critical to the devolution of good title that the 1991 Assignment should have been validly executed ... There is no real dispute that here, there is sufficient secondary evidence [of the contents and execution of the power of attorney]."

5. We have to decide whether the purchaser was bound to accept that secondary evidence as "proof of the power of attorney", as the Recorder held, or whether the inability of the vendor to produce the original power of attorney, or a properly attested or certified copy of it, entitled the purchaser to throw up the contract. (However, although the Recorder thought "there was no real dispute" about the sufficiency of the secondary evidence, we permitted the purchaser to argue in this court that, even if the purchaser was bound to accept sufficient secondary evidence of the power of attorney, the secondary evidence tendered by the vendor was not in fact sufficient to prove either its contents or its due execution, and I shall have to deal with this argument later in this judgment.)

Section 13 of the Conveyancing and Property Ordinance (Cap. 219)

6. Much of the argument before us focused on this section. It will be convenient now to set out its provisions in full; but I would first remark that we have to construe the section in the context of the practice of conveyancers with which it is concerned. We should not give the words used by the legislature the meaning they might have "to a non-lawyer who was unacquainted with their history" : see the speech of Lord Hoffmann in Southwark LBC v. Mills [1999] 3 W.L.R. 939 at p. 945B.

"13. Proof of title and recitals

(1) Unless the contrary intention is expressed, a purchaser of land shall be entitled to require from the vendor, as proof of title to that land, only production of the Government lease relating to the land sold and-

(a) proof of title to that land-

(i) where the grant of the Government lease was less than 15 years before the contract of sale of that land, extending for the period since that grant; or

(ii) in any other case, extending not less than 15 years before the contract of sale of that land commencing with an assignment, a mortgage by assignment or a legal charge, each dealing with the whole estate and interest in that land;

(b) production of any document referred to in the assignment, mortgage or charge mentioned in paragraph (a) creating or disposing of an interest, power or obligation, which is not shown to have ceased or expired and subject to which any part of that land is disposed of; and

(c) production of any power of attorney under which any document produced is executed where that document was executed less than 15 years before the contract of sale of that land.

(2) Where this section requires the production of any document, it shall be sufficient to produce a copy-

(a) attested, before 1 November 1984, by 2 solicitors' clerks; or

(b) certified by a public officer or a solicitor,

to be a true copy.

(3) Subject to subsection (1), where any document produced as proof of title to any land contains a recital of any document dated or made before the date from which a vendor is required to prove title, the purchaser of that land shall assume, unless the contrary is proved, that-

(a) the recital is correct;

(b) the recital gives all the material contents of the document recited; and

(c) the document recited was duly executed and perfected.

(4) A recital, statement, and description of any fact, matter or party contained in any document of title, mortgage, declaration or power of attorney relating to any land and dated or made not less than 15 years before the contract of sale of that land shall, for the purposes of any question as to proof of title concerning the parties to that contract and unless the contrary is proved, be sufficient evidence of the truth of that recital, statement and description.

(4A) Where any document is or has been produced by a vendor as proof of title to any land and that document purports to have been executed, not less than 15 years before the contract of sale of that land, under a power of attorney, it shall for the purposes of any question as to the title to that land be conclusively presumed-

(a) as between the parties to that contract; and

(b) in favour of the purchaser under that contract as against any other person,

that the power of attorney-

(i) was validly executed;

(ii) was in force at the time of the execution of that document; and

(iii) validly authorized the execution of that document.

(5) This section affects only the rights and obligations of the parties to a contract for the sale of land entered into after the commencement of this section."

7. For my part, I have no doubt that this section was not intended to make, nor did it make, any change in the law as to the quality of the evidence which a purchaser of land is entitled to require from the vendor as proof of title to that land.

8. Before section 13 was enacted, the law was that :

"... when a party proves that he is not in a position to adduce primary evidence, for example, that the document in question is lost or cannot be found. ... he is at liberty to give secondary evidence of its contents."

(see Halkett v. Earl of Dudley [1907] 1 Ch. 590 per Parker J. at p.604, cited by the Recorder).

9. Unless his contract with the vendor provides that the purchaser shall be entitled to primary evidence of the document (i.e., the production of the original), a provision I have never seen, or even heard of, in 40 years' conveyancing experience, the purchaser must, when primary evidence is not available, accept sufficient secondary evidence in its stead, though such evidence will be sufficient only if it is "clear and cogent" (as Chitty L.J. remarked in In re The Halifax Commercial Banking Co. Ltd. and Wood (1898) 79 LT 536, at p.539, also cited by the Recorder). What is required, in the case of a document of title which is lost or cannot be found, is (clear and cogent) secondary evidence of the contents of the instrument and of its having been duly executed : see Bryant v. Busk (1827) 4 Russ 1.

10. That, in my judgment, is still the law, as well after as before the enactment of s.13. Section 13(1) was intended simply to facilitate conveyancing by reducing the length of time for which the vendor has to prove his title. He must start with the Crown (now Government) Lease from which he derives his title. It if is lost, or cannot be found, he must produce clear and cogent secondary evidence of its contents and due execution (the same applies to an agreement for a Crown Lease which is to be treated as a Crown Lease : see section 14 of the Ordinance). But, having done that, he need not show a chain of title from the date of the Crown Lease; it is sufficient for him to show a chain of title from a good intermediate root of title to the leasehold interest created by the Crown Lease. And that root of title (being an assignment, a mortgage by assignment or a legal charge) will be a good root of title if it is over 15 years old. In the case of any subsequent instrument, forming a link in the chain of title, executed (1) less than 15 years before the date of the contract; and (2) by an attorney acting under a power of attorney, it will be sufficient proof of the contents and due execution of the power of attorney to produce a copy attested or certified as mentioned in section 13(2). This enabling provision does not, in my judgment, exclude other clear and cogent evidence of the contents and due execution of the power of attorney from consideration in a case in which neither the original, nor such an attested or certified copy, is available.

The authorities

11. There is no authority in this court which falsifies any of this; but there is a plethora of relevant decisions at first instance which have unsettled it. The Recorder listed and carefully reviewed no less than twelve such decisions. Of some of them, he thought it "possible to say that they were consistent with secondary evidence being admissible notwithstanding s.13(1). The others are against." Those against are :

(1) Chan Kam Sing v. Lam Ping Ping Grace [1990] 1 HKC 373;

(2) Gatewood Limited v. Silver Noble Investment Ltd [1992] 2 HKC 473;

(3) Wong Wai Ming v. Tang Tat Chi [1993] 1 HKC 341;

(4) Tong Yuen King v. Chang Chong Emma, 31.10.95, unreported;

(5) Lo Miu Ling Cindy v. Tam Hung Ping [1998] 4 HKC 238; and

(6) Liu Tak Kin and Anor. v. Chan Yiu Kai and Anor [1998] 4 HKC 362.

12. I agree with the Recorder that these six cases, insofar as they decided that secondary evidence of a document of title was, because of section 13(1), not admissible, were all wrongly decided and, in my judgment, we should now overrule them. They all proceed on the unspoken assumption that s.13(1) was calculated to make life harder for vendors, not easier. The opposite is the case.

The quality of the evidence

13. So far as the first case is concerned, it was accepted on behalf of the purchasers that if secondary evidence tendered by the vendor of the agreement of 5 October 1889 was not excluded from consideration by virtue of section 13(1), the quality of the secondary evidence available here was sufficient to satisfy the vendor's obligations as to proof of his title.

14. So far as the second case is concerned, the purchaser does now contend that the secondary evidence of the contents and due execution of the power of attorney pursuant to which the assignment of 28 June 1991 was executed was not sufficient evidence of those matters. It is the case that no copy of the power of attorney, attested or certified so as to satisfy s.13(2), was offered to the purchaser. But, as I have already indicated, I do not think this is fatal to the vendor's case. It remains to consider the sufficiency of such other evidence as was offered. This consisted of two statutory declarations, one made by Chiu Sai Fong Margaret, the solicitor attesting the execution of the assignment of 28 June 1991, and the other made by Law Siu Shing Peter, a director of the purchaser under the assignment of 28 June 1991.

15. The solicitor declared as follows :-

"1. I was the attesting solicitor for the Assignment of the Property prepared by the now dissolved law firm of Messrs. Chan, Tse, Tang & Co. A copy of the Assignment is now produced and shown to me as Annexure hereto.

2. I confirm that prior to execution of the Assignment on 28th June 1991 by Madam Wong Ching ('the Donee') as the lawful attorney of Madam Chan Sin Fong ('the Vendor') named in the Assignment, I had perused a duly executed General Power of Attorney which was given under Section 7 of the Power of Attorney Ordinance, Cap. 31 by the Vendor in favour of the Donee and which was dated within a period of one year prior to the date of the Assignment.

3. I verily believe and was satisfied that the Donee had power to enter into and execute the Assignment of the Property as the lawful attorney of the Vendor pursuant to the said Power of Attorney with full binding force and effect."

16. The director declared as follows :

"1. I was appointed as a director of the Bestart Design Limited ('the company') on 22nd May, 1997.

2. The company is the registered owner of Flat E on the 6th floor, Han Palace Building, Nos. 441-447 King's Road, North Point, Hong Kong ('the premises').

3. When I was engaged as a manager of the company on 1st December, 1991, the relevant title deeds and documents in respect of the said premises all contained in a brown paper envelope were handed to me for safe custody by Chan Chui Ping, a former director of the company. Seeing that the brown paper envelope was old and torn, I removed the said title deeds from it and after having checked them with a List of Documents attached therewith to be correct, I secured the said title deeds as well as the said List together with a piece of rubber band. The said title deeds and documents had since been kept inside the drawer of my writing desk located at Flat A on the 20th floor, Han Palace Building, Nos. 441-447 King's Road, North Point, Hong Kong (hereinafter called 'my old residence').

4. On the 1st March, 1997, I moved all my personal belongings as well as my furniture including the said writing desk from my old residence to No. 83 Blue Pool Road, 3rd floor, Happy Valley, Hong Kong through the services of a removal company (hereinafter called 'my present residence').

5. On 15th December, 1997, when taking the said title deeds and document to the company's solicitors to enable them to act for the company in the sale and purchase of the said premises in compliance with an Order made by Master Kwan in Chambers dated 8th October, 1997, I found that the rubber band applied to the said title deeds and documents was broken rendering the said documents of title lying loosely insider the drawer of my writing desk. Upon checking them with the said List, I found that the Assignment Memorial No. 4365902 and the Power of Attorney executed by Chan Sin Fong in favour of Wong Ching were missing. I verily believe that the two said documents must have been lost in the course of the removal from my old residence to my present residence.

6. I confirm that I have never removed or deposited the two aforesaid documents elsewhere for safe keeping."

17. At the conclusion of the argument, I was disposed to think that this evidence did offer sufficient proof of the power of attorney to satisfy a purchaser, beyond reasonable doubt, both as to its contents and as to its due execution. I remain of that opinion so far as the contents of the power of attorney are concerned. But I have now had the opportunity of reading in draft the judgment prepared by Ribeiro, J. and for the reasons he gives, I am now compelled, with some reluctance, to the conclusion that the evidence tendered is not sufficient to prove due execution of the power of attorney. As a matter of law, the rule was that the execution of a deed had to be proved by an attesting witness; but as a matter of practice, conveyancers did not in fact insist on evidence of due execution of the documents of title, however recent, if produced from proper custody, i.e., the custody in which they may reasonably be expected to be found. In the absence of any ground for suspicion, it is presumed by conveyancers that every document of title was executed as appears on the face of the document : "... a seller is never required to ... prove the execution of deeds however modern, which appear to have been regularly executed" : see Sugden on Vendors and Purchasers, 14th edition (1862), at pp. 417, 418. Conveyancers act, in this respect, on the presumption that everything is rightly done, until the contrary be shown; a presumption which is, of course, greatly strengthened by the fact of the title-deeds being produced from proper custody. (In my judgment, s.23 of the Conveyancing and Property Ordinance to which Ribeiro, J. refers does no more, and no less, than clothe this presumption with legislative authority.) But all this is predicated, as it seems to me, on the assumption that the vendor can produce to the purchaser the deed the due execution of which the purchaser is being asked to accept. It has no application at all when the deed has been lost or destroyed. "Where the loss or destruction of a deed can be proved, secondary evidence may be given of its contents; but proof must also be given of its due execution" (emphasis added) : see Dart, Vendors and Purchasers, 6th edition (1888), Vol. I, p.353. I am unable to accept that the presumption of due execution can operate so as to avoid the requirement of such proof in a case in which the original deed cannot be produced to the purchaser.

Result

18. For the reasons I have given, I would dismiss the appeal in the first case and allow the appeal in the second case. I would add only this; that I share the Recorder's regret that the purchasers in the first case have lost their deposit through no fault of their own. We cannot order that their deposit be returned to them; for we have no power to make such an order. Section 49(2) of the Law of Property Act, 1925 gives the court such a power in England and Wales. I have previously urged the incorporation of such a power in local legislation, but my urgings have fallen on deaf ears. Once again, I commend it to the legislature here to confer such a power on the court. This would enable the court to do justice in cases like the present, in which the system operates unfairly against purchasers. The courts need to be able to stem the flood of cases in Hong Kong in which vendors are able to achieve windfall profits at their purchasers' expense. The sooner something is done about this disgrace, the better.

Keith, J.A. :

Introduction

19. I have had the advantage of reading the judgments of Godfrey J.A. and Ribeiro J. in draft. For the reasons which Godfrey J.A. gives, I agree that, in the absence of the expression of a contrary intention, secondary evidence may be given of the contents and the due execution of the documents required by section 13(1) of the Conveyancing and Property Ordinance (Cap. 219) ("the Ordinance") to be produced by the vendor for the purpose of proving its title, provided that the loss or destruction of the documents is also proved. In expressing my agreement with that view, I wish to pay tribute to the comprehensive and well-argued judgment of Mr. Recorder Tang S.C., with whose conclusion on the topic it follows I also agree.

20. In CACV 273/99, it had been common ground before the judge that there was sufficient secondary evidence of the missing document. It follows that I agree that the appeal in that case must be dismissed. In CACV 240/99, the judge did not address the sufficiency of the evidence of the missing document either. It had not been submitted to him by counsel for the Plaintiff (who was not Ms. Cissy Lam who represented the Plaintiff on the appeal) that the secondary evidence relied upon by the Defendant was insufficient. Moreover, the written submissions of Ms. Diana Cheung (who represented the Defendant before the judge as well as on the appeal) proceeded on the basis that the sufficiency of the evidence was not in dispute. Understandably, therefore, the judge said that there was no "real dispute" between the parties on the issue. However, on the hearing of the appeal, the sufficiency of the secondary evidence of the missing document in CACV 240/99 has been hotly contested, and it is that issue which this judgment primarily addresses.

21. The Defendant's title to the flat in question depended on the assignment of the property to Restart Design Ltd. ("Restart"), which was the Defendant's immediate predecessor-in-title. The flat had purportedly been assigned to Restart by Chan Siu Fong by an assignment dated 28th June 1991. However, that assignment had not been executed by Madam Chan. It had been executed by Wong Ching, who purported to be Madam Chan's lawful attorney. The missing document, which was an intermediate (though essential) link in the chain towards establishing the Defendant's title, was the instrument by which that power of attorney had purportedly been conferred.

The contents of the power of attorney

22. The secondary evidence relied upon to prove the contents of the missing power of attorney was primarily that of the solicitor, Ms. Margaret Chiu, who had witnessed the signing of the assignment. She had made a statutory declaration on 3rd March 1998 for the purpose of enabling the Defendant to prove her title to the flat. In the statutory declaration, Ms. Chiu declared that prior to the execution of the assignment on 28th June 1991, she "had perused a duly executed General Power of Attorney which was given under Section 7 of the Power of Attorney Ordinance, Cap. 31 by [Madam Chan] in favour of [Madam Wong] and which was dated within a period of one year prior to the date of the Assignment."

23. The circumstances in which that power of attorney had gone missing were explained in a statutory declaration from one of Restart's directors made on 12th March 1998. He declared that all the relevant title deeds, with a list of them, had been held together by an elastic band. That list contained a reference to the power of attorney executed by Madam Chan in favour of Madam Wong. When he came to retrieve the documents when Restart was about to assign the flat to the Defendant, he found that that elastic band had broken, the documents which the band had been holding together had scattered, and the power of attorney was missing. Although Ms. Cheung relied on this evidence for the purpose of establishing the contents of the power of attorney, I do not think that it does any such thing. The declarant did not declare that he had ever actually read the power of attorney. The effect of his declaration is simply that an instrument which purported to be the power of attorney had been included in the list of documents of title, and that that instrument had not been among the documents of title later on.

24. The Defendant has not proved to my satisfaction that the evidence of Ms. Chiu is the best evidence available of the contents of the power of attorney. There is no evidence that the Defendant's solicitors attempted to locate Madam Chan or Madam Wong (respectively the donor and donee of the power of attorney), or to find out which firm of solicitors drew up or attested the power of attorney. The taking of any of these steps might well have resulted in better evidence of the contents of the power of attorney (and its due execution for that matter) becoming available. In these circumstances, two questions arise in relation to the contents of the power of attorney:

(i) For secondary evidence to be capable of proving the contents of a missing document, must that evidence be the best available secondary evidence? Or can the contents of a missing document be proved by such evidence which, although not the best secondary evidence available, is regarded by the court as clear and cogent proof?

(ii) If all that is required is clear and cogent proof, is Ms. Chiu's evidence clear and cogent proof of the contents of the power of attorney purportedly executed in favour of Madam Wong?

25. The common law originally required the production of a document to prove its contents. If the document was lost, the action failed. In due course, exceptions were permitted, though these exceptions were permitted only by degree. In other words, the "best evidence rule" in relation to the contents of a missing document was converted to the "best secondary evidence rule", i.e. the best secondary evidence available of the contents of the document had to be produced. However, in time, even this requirement was abandoned. The best secondary evidence rule was replaced by the present rule that there are no degrees of secondary evidence when it comes to proving the contents of a missing document. As is stated in Phipson on Evidence, 14th. ed., para. 36-23:

"The general rule is that there are no degrees in secondary evidence; and that a party is at liberty (subject to comment if more satisfactory proof is withheld) to adduce any admissible description he may choose. The reason assigned is the inconvenience of requiring evidence to be strictly marshalled according to weight; and of compelling a party, before tendering inferior evidence, to account for the absence of all which is of superior value, but the very existence of which he may have no means of ascertaining."

26. I turn, then, to the clarity and cogency of Ms. Chiu's evidence about the contents of the power of attorney. I accept, of course, that when Ms. Chiu made her statutory declaration in 1998, she would not have been able to recall the actual language of the power of attorney which she had seen in 1991. But she was in effect saying that as the attesting solicitor she would not have witnessed Madam Wong's signature on the assignment unless she had at the time been satisfied that Madam Wong had been duly empowered to sign the assignment on Madam Chan's behalf. So when she had perused the power of attorney in 1991 for that purpose, she would have been checking whether its language was such as to confer that power on Madam Wong. The fact that she witnessed Madam Wong's signature on the assignment with that in mind is, in my judgment, clear and cogent proof that the language of the power of attorney had been such as to amount to a valid authorisation by Madam Chan to Madam Wong to sign the assignment on her behalf.

The due execution of the power of attorney

27. According to Ms. Chiu, the power of attorney purported to have been executed by Madam Chan. There was no direct evidence, secondary or otherwise, that it had in fact been executed by Madam Chan. But what about circumstantial evidence? After all, if she had not executed it, the forging of her signature on it could only realistically have been to procure the assignment of the flat in 1991 without her knowledge or consent. If that is what happened, one would have expected Madam Chan to have come forward by now and say that she had known nothing about the sale of the flat. It is said that the fact that she has not done that, despite the lapse of so many years, is strong circumstantial evidence that she duly executed the power of attorney. I see the force of that argument, but I cannot go along with it in its entirety. The argument proceeds on the assumption that there would have come a time when Madam Chan would have discovered that she no longer was the owner of the flat. Although most owners of property have a sufficiently modest portfolio to know that a property has been sold, that may not have been the case with Madam Chan, and I simply cannot assume (without any evidence about Madam Chan, of which there was none) that she was indeed aware that her flat had been sold.

28. However, although the due execution of the power of attorney cannot be proved by direct or circumstantial evidence, whether of a primary or secondary nature, its due execution can nevertheless be "proved" by operation of a statutory presumption. Section 23 of the Ordinance provides:

"An instrument appearing to be duly executed shall be presumed, until the contrary is proved, to have been duly executed."

I accept that the instrument has to appear to the court to have been duly executed for the presumption in section 23 to arise. But in my view, an instrument can still appear to the court to have been duly executed within the meaning of section 23, even if the instrument is missing and cannot be produced to the court, provided that there is clear and cogent evidence that, while it was in existence and could be inspected, it appeared then to have been duly executed. True, its non-production to the court prevents the court from observing for itself whether the instrument appears to have been duly executed, but I do not see why the court should be prevented from reaching that conclusion if there is clear and cogent evidence, which the court is prepared to accept, that an examination of the instrument at a time prior to its loss showed that it appeared to have been duly executed. In particular, I do not regard the language of section 23 as making it necessary for the instrument to be produced on the occasion when it is sought to rely on the presumption. That would prevent section 23 from applying to missing documents altogether. I see no warrant for the language of section 23 to be given so restrictive a construction.

29. Unlike Ribeiro J., I do not regard this construction of section 23 as either dispensing with the need to prove due execution of an instrument, or as being in any way inconsistent with the common law rule that the secondary evidence required to prove due execution of an instrument must be clear and cogent. The evidence which must be clear and cogent (so as to trigger the presumption) is the evidence that the instrument appeared to have been duly executed. Putting it another way, I acknowledge that proof of the due execution of a missing document by the operation of the presumption in section 23 involves relying on both (a) secondary evidence that the document appeared to have been duly executed and (b) the presumption that in those circumstances it had been duly executed. But I have not discerned any reason at all for holding that such form of proof is less than what the common law requires.

30. Thus, where before an instrument has gone missing, it is seen by a solicitor who is checking whether it was purportedly executed by the person who was supposed to execute it, and that solicitor sees that it was indeed purportedly executed by the person who was supposed to execute it, the court (or whoever the due execution of the instrument has to be proved to) should conclude that the instrument appears to have been duly executed. That is what happened in this case. There is nothing to suggest that the instrument was not in fact duly executed, and in those circumstances the power of attorney in the present case should be presumed to have been duly executed by Madam Chan.

31. In reaching this conclusion, I have not overlooked what is said in Emmett on Title, 19th. ed., para. 5.091, namely that "the due execution of the missing documents has to be proved, not presumed". However, the case cited in support of that proposition - Bryant v. Rusk (1827) 4 Russ. 1 - in my opinion does no such thing. It did no more than confirm that the due execution of a missing document has to be proved. I do not read any passage in the judgment of the Master of the Rolls to the effect that proof by presumption is insufficient. Indeed, although the presumption in section 23 of the Ordinance is the statutory enactment of the Latin maxim omnia praesumuntur rite esse acta, no such presumption was relied upon in that case.

32. Nor have I overlooked what was said in Goldenfix Properties Ltd. v. Cheer Hope Investments Ltd. [1993] 1 HKC 360. At p.364C-D, Godfrey J. (as he then was) said:

"... where a vendor is bound to provide proof of due execution (i.e. a case where, as I hold, there is no presumption which is of assistance), the purchaser is entitled either to the best evidence, or to such an explanation why the best evidence is not available as, in effect, to make the secondary evidence tendered the best available evidence."

However, section 23 of the Ordinance was not referred to by Godfrey J.A. in his judgment and it may be that he thought there was no presumption which could have been of assistance because section 23 had not been cited to him. In any event, to the extent that the Goldenfix case represents an attempt to resurrect the "best secondary evidence rule" in cases in which the proof of the due execution of an instrument is required, I would respectfully not go along with it, on the footing, as I have said, that it does not lie well with the well-established principle that there are no degrees of secondary evidence.

Doubts as to the Defendant's title

33. My conclusion that there was clear and cogent evidence of both the contents and the due execution of the power of attorney makes it necessary for me to address a particular argument deployed by Ms. Lam which Godfrey J.A. and Ribeiro J. did not have to consider. The argument went like this. The judge himself recognised that, on the issue of the admissibility of secondary evidence, there were "conflicting authorities on the subject", and that whatever he decided uncertainty would still remain. Since the uncertainty in the law meant that there was a doubt over the Defendant's title, the Plaintiff should not have been required to accept it.

34. This argument is fallacious. It is important to remember that the question is whether the Defendant had proved her title to the flat. I would have declared that the Defendant had proved her title to the flat. The conveyancing evidence provided by the Defendant's solicitors to the Plaintiff's solicitors was sufficient proof of the Defendant's title. I can well understand why, having regard to the state of the authorities at the time, the Plaintiff's solicitors would have had understandable doubts as to whether the conveyancing evidence was sufficient proof of the Defendant's title, but since those doubts have proved in my opinion to be unfounded, it cannot be said that the Defendant's title was not sufficiently proved.

Conclusion

35. For these reasons, but with considerable diffidence in the light of the different conclusions reached by Godfrey J.A. and Ribeiro J., I would have dismissed the appeal in CACV 240/99.

Ribeiro J:-

36. I fully agree with the construction of section 13 of the Conveyancing and Property Ordinance adopted by Godfrey JA. In particular, I agree that where a document of title, including a document in one of the classes mentioned in section 13 itself, has been lost or destroyed, the common law rule which allows resort to secondary evidence of that document has not been abrogated by the section.

37. However, in my judgment, in the second case, the secondary evidence tendered in relation to the missing power of attorney is insufficient in that it does not include evidence of the due execution of such power of attorney.

For the common law rule to be successfully invoked, the secondary evidence relied upon must prove the contents of the missing document, its due execution and the fact of its loss or destruction. The evidence of these matters must be clear and cogent: Re The Halifax Commercial Banking Company Limited and Wood (1898) 79 LT 536.

38. In the present case, it was allegedly pursuant to the missing power of attorney that a deed of assignment dated 28 June 1991, which forms a link in the vendor's chain of title, was executed. Godfrey JA has set out in full the secondary evidence of that missing document produced by the vendor. This consisted of two statutory declarations, one by a director of the vendor company and one by a solicitor who had attested execution of the said deed of assignment by the donee of the power.

39. The director's statutory declaration deals with the circumstances of the loss of the power of attorney. He says nothing about its execution. The solicitor's statutory declaration states that prior to execution of the assignment, she perused "a duly executed General Power of Attorney which was given under section 7 of the Power of Attorney Ordinance , Cap. 31, by the Vendor in favour of the Donee and which was dated within a period of one year prior to the date of the Assignment." It then goes on to state a belief that the Donee had power to execute the assignment pursuant to that power of attorney.

40. It follows that the secondary evidence relied on comprises evidence (i) that the solicitor in question witnessed the existence, at the time of the execution of the assignment, of an instrument which purported to be a duly executed power of attorney; (ii) that she noted that it was a general power in a statutory form; and (iii) that such document has been lost. However, no evidence was provided that the power of attorney in question had been duly executed by the donor of the power. It is therefore prima facie the case that the secondary evidence is deficient since an essential element, namely, proof of due execution, is lacking.

41. At the hearing, it was argued that section 23 of the Conveyancing and Property Ordinance supplied the want. Section 23 provides as follows:-

"An instrument appearing to be duly executed shall be presumed, until the contrary is proved, to have been duly executed."

42. It was argued that this rebuttable presumption of due execution was applicable since the solicitor has provided a statutory declaration saying that she had seen the document and that it appeared to her to be duly executed. It follows, so the argument runs, that section 23 comes into play and, unless and until the contrary is proved, that the purchaser must take the power of attorney to have been duly executed with no further proof of that fact being required.

43. I am unable to accept that argument. In my view, the section 23 presumption is not applicable where the instrument in question has been lost or destroyed and cannot be produced. This conclusion appears to me necessary because of the language of section 23 itself. The presumption only arises where there is "an instrument appearing to be duly executed". This presupposes the ability to produce the relevant instrument and to show that it appears to have been duly executed on any occasion when it is sought to rely on the presumption. Where no instrument purporting to be validly executed can be produced, the fundamental requirement for the presumption to operate is lacking. Merely producing a statutory declaration by a solicitor stating that she had perused a power of attorney which appeared to her to have been validly executed does not trigger the presumption on the language of section 23.

44. In my view, the abovementioned construction is consistent with the logic of the rules on secondary evidence and missing documents. It must in principle be questionable whether a rebuttable presumption can be allowed to take the place of evidence where one is concerned with adducing sufficient secondary evidence to make good the absence of a material instrument. As I have stated, the common law rule is that clear and cogent secondary evidence of, inter alia, due execution is required. A presumption, such as that contained in section 23, is a mechanism whereby evidence of the thing presumed (i.e., due execution) is dispensed with upon proof of certain other matters (i.e., production of the instrument appearing to be duly executed). Reliance on such a substitionary device to dispense with proof of due execution appears inherently inconsistent with the requirements of the common law rule. A construction of section 23 which excludes that section's operation where the relevant instrument cannot be produced avoids any inconsistency with the common law rule.

45. As I have concluded that section 23 does not come to the rescue, it is my view that the secondary evidence relied upon in relation to the missing power of attorney remains deficient regarding proof of due execution. On that ground alone, I would allow the appeal in Civil Appeal No 240 of 1999. I respectfully concur in Godfrey JA's conclusion that the appeal in Civil Appeal No 273 of 1998 must be dismissed.

Godfrey, J.A. :

46. The appeal in the first case is accordingly dismissed and the appeal in the second case is (by a majority) allowed.

47. As to costs, we will order, pursuant to Order 42 rule 5B(6) of the Rules of the High Court (1) that the costs in this court of the vendor in the first case be taxed (if not agreed) and paid by the purchasers to the vendor; (2) that the costs in this court of the purchaser in the second case be taxed (if not agreed) and paid by the vendor to the purchaser. (We will not disturb the order for costs made by the Recorder in the second case, since the purchaser has succeeded in this court on a point not argued below.)

Representation:

Miss Cissy K.S. Lam (M/s. Lam & Lau) for the Plaintiff in CACV240/1999

Miss Diana Cheung (M/s. Chong So & Co.) for the Defendant in CACV240/1999

Mr. Albert Yau (M/s. Y.S. Lau & Partners) for the Plaintiffs in CACV 273/1999

Mr. Horace Y.L. Wong (M/s. S.Y. Chu & Co.) for the Defendant in CACV 273/1999

Remarks:
On appeal by the Defendant (CACV240/1999) to the Court of Final Appeal: Appeal allowed and the Recorder's orders be restored. Please refer to FACV000014/2000.