Kwong Muk Hing, One of the Executors Named in the Will of Luk Heung Deceased v. Cheng Pui Nin William and Another

HCMP 202/2018

[2019] HKCFI 1726

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 202 OF 2018

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DECISION

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1.This is an application for an order of the court that the respondents do execute a confirmatory assignment of the subject property in favour of the applicant for the purpose of rectifying errors in the assignment executed by the parties to the assignment back in 2008. The reason is that errors exist in the 2008 assignment and rectification is necessary in accordance with the terms prescribed by the Housing Authority for a valid assignment.

Background

2.As a matter of background, briefly, the sale and purchase of the subject property (“the Property”) was completed by way of an assignment dated 28 July 2008 (“the 2008 assignment”) between the vendor, the respondents, and the purchaser, Madam Luk Heung (“Madam Luk”). Madam Luk passed away in August 2014.  The party applying today is one of the executors of the will of Madam Luk.  The applicant, together with his wife, were the two executors named in the will of Madam Luk as well as the beneficiaries under the will.  The asset specifically bequeathed to them under the will is the Property.

3.As a result, the applicant has sought to have the Housing Authority consent to the transfer of the Property from Madam Luk’s name to them but unsuccessfully. The basis for the refusal of the Housing Authority is that the 2008 assignment of the Property to Madam Luk actually deviated from the prescribed form without the prior approval of the Authority.  As such, the 2008 assignment was considered to be non-compliant with the authorised terms, and was strictly speaking void under the Housing Ordinance, Cap 283.

4.Correspondence between the applicant, through solicitors, and the Housing Authority ensued, yet the matter was not resolved. The applicant, through solicitors, also tried to contact the solicitors acting for the vendors, the respondents, in the conveyance in 2008, but the attempts by both the then solicitors for the respondents as well as the applicant’s solicitors to locate and to obtain a reply from the respondents have been unsuccessful.

5.Hence the present proceedings.

6.The proceedings were first served on the respondents by insertion of the court documents into the letterbox of the last known address of the respondents in February 2018.  Leave was further obtained from the Master of the High Court for service to be effected by prepaid ordinary post as well as advertisement in a local Chinese newspaper, which were deemed to be good service on the respondents.  The necessary search into the Registrar of Births and Deaths early last year revealed no record concerning either of the two respondents.  As confirmed by the affirmation of service in May 2019, all the documents have been served in accordance with the leave of the Court just mentioned and the respondents are absent today. 

7.Considering all the circumstances, I see no reason why the applicant should not be allowed to proceed, though in the absence of the respondents.

Discussion

8.The applicant accepts that the 2008 assignment indeed deviated from the prescribed form under the Housing Ordinance of a valid assignment.  Such deviation includes deviation from paragraphs 3 and 7 of the prescribed form. The actual provisions in the 2008 assignment, in particular paragraphs 4, 5 and 9 of that, are also not part of the prescribed form.  Therefore, a case is made out suggesting actual non-compliance with the prescribed form as well as the Ordinance.   Prima facie, the 2008 assignment is a void one.

9.Considering the sale and purchase agreement leading to the 2008 assignment, there should be no doubt that the parties to the conveyance at that time contemplated that the completion of the conveyance would have to accord to the terms as prescribed by the Housing Ordinance.

10.It is expressly provided (section 35(1)) in the Conveyancing and Property Ordinance, Cap 219 and specifically implied to an assignment a covenant, as set out in paragraph 5 of part II of the First Schedule to the Ordinance, that the vendor of the conveyance should do, execute, or do all such lawful acts, assurance and things as the purchaser may reasonably require for further or more perfectly assuring the property to the vendor.

11.Section 25A of the High Court Ordinance provides that:

“Where the Court of First Instance has given or made a judgment or order directing a person to execute any conveyance, contract or other document, or to endorse any negotiable instrument, then if that person neglects or refuses to comply with the judgment or order or cannot, after reasonable inquiry, be found, the Court of First Instance may on such terms and conditions, if any, as may be just, order that the conveyance, contract or other document shall be executed, or that the negotiable instrument shall be endorsed, by such person as the Court may nominate for that purpose.”

12.Counsel for the Applicant cited to me cases, including Lau Yun Lin v Registrar of Companies, HCMP 1111/2017 (15 May 2018), Lam Kiu Shing v Yau Fuk [2016] 3 HKLRD 242 as well as Li Kwan Chuen v Vector Development Limited [2009] 3 HKLRD 511 as instances of application of the provisions.

13.All matters considered, I see that this is an appropriate case where the Court should accede to the application.  The reservation, as I expressed during exchange with counsel, is that for a confirmatory assignment to be executed in the event that the respondents fail to do so, it would be inappropriate for the Court to appoint the applicant’s solicitors to execute instead.  I would however accept the request by counsel that it may be appropriate to appoint the Registrar of the High Court to execute the confirmatory assignment in the event that the respondents fail to do so.

Order

14.The order I give is:

(1)   There is a declaration that there are substantial discrepancies between the Assignment (Memorial No. 08082501700091) in relation to the Property and the authorised terms of assignment under the Home Ownership Scheme Secondary Market Scheme as required under paragraph 4(c) of the Schedule to the Housing Ordinance, Cap 283.

(2)   Subject to consent to the rectification by the Housing Authority, the respondents do execute a confirmatory assignment of the Property in favour of the executors of the estate of Madam Luk to rectify the aforesaid discrepancies.

(3)   In the event the respondents fail to execute the said confirmatory assignment and/or cannot after reasonable inquiry be found, an order pursuant to section 25A of the High Court Ordinance directing and appointing the Registrar of the High Court to execute the said confirmatory assignment for and on behalf of the respondents, and for such purpose the draft confirmatory assignment must be lodged for the Registrar’s approval.

(4)   The costs of and for execution of the confirmatory assignment shall be borne by the applicant.

(5)   There is no order as to costs of the originating summons.

Mr Victor K H Chiu, instructed by Yip & Partners for the applicant

The respondent was not represented and did not appear