Multi-more Industries Ltd v. Tung Hoo Fai and Another

CACV000045/1991

Headnote

The vendor's documents of title included a "General Power of Attorney" in pursuance of which the attorney had executed an assignment to a predecessor in title. The Power was in the form of the Schedule to the Powers of Attorney Ordinance (Cap. 31), save that in part it ran: "to be my Attorney to deal with my said properties in accordance with Section 7 of the Powers of Attorney Ordinance". The limiting words "to deal with my said properties" do not appear in the Schedule.

The Court held: (1) (Sir Derek Cons V-P dubitante) that in consequence of the insertion of those words, the Power was not to "a like effect" as a power in the form of the Schedule and failed to take effect under section 7 of Cap. 31; (2) it was effective under Common Law as a power conferred by deed.

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Coram: Hon. Sir Derek Cons, V-P, Clough & Nazareth, JJ.A.

Dates of Hearing: 29 - 31 October 1991

Date of Handing Down: 29 November 1991

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JUDGMENT

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Nazareth, J.A.:

1. The appellant appeals against the decision of Gall J. in a vendor and purchaser summons taken out by the respondents who were the purchasers, the appellant being the vendor. The parties entered into an agreement for the sale and purchase of certain premises in Kowloon on 3rd November 1990. It contained a clause in the usual form requiring the vendor at its own expense to snow good title and to furnish the purchasers with copies of any deeds or documents necessary to prove such title. The purchasers' solicitors were duly provided with the deeds and documents and having examined them wrote to the vendor's solicitors in the following terms:

"upon perusal the relevant title deeds and documents in respect thereof, we observe that in an Assignment Memorial No: 1908181 (copy attached), one of vendor therein, namely Lau Yao Cnen executed the said Assignment by her Attorney Wu King Hee under a Power of Attorney dated 4th June 1980 (copy attached)

The said Power of Attorney die not expressly give the attorney the power to sell the property and to give valid receipt of any money the Attorney received. Although the Power of Attorney was said to be made in accordance with Section 7 of the Powers of Attorney Ordinance, it did not strictly conform with the statutory form annexed to the said Ordinance and therefore cannot be construed as validly executed thereunder.

In this regard, we should be grateful if you could let us have evidence to show that the said Attorney did have the relevant powers granted to him and that the said Assignment was properly executed."

The vendor's solicitors in reply contended that:

"Though the Power of Attorney concerned is not in the specified form as set out in the Schedule of Cap. 31, the same is in a form to the like effect as provided by section 7 of Cap. 31. Being so, the attorney had the power to sell and to give valid receipt."

2. It is not necessary to adumbrate the ensuing correspondence witch ended with the summons taken out by the vendor's solicitors, each side maintaining its, foregoing view. The summons sought declarations:

3. As I have indicated Gall J. found for the respondents and made the declarations sought.

4. In its Notice of Appeal, the appellant specified three grounds. The first is that the learned judge was wrong in holding that the Power of Attorney was not a power of attorney under section 7 of the Powers of Attorney Ordinance and that the words as appearing thereon had effect of making it a power of attorney under section 7. The Power of Attorney was in the following terms:

"THIS GENERAL POWER OF ATTORNEY is made this 4th day of June One thousand nine hundred and eighty BY LAU YAO CHEN of Block A 8th Floor May Moon House, 97 and 97A Waterloo Road of Kowloon in the Colony of Hong Kong, Married Woman.

WHEREAS:-

(1)         I am the registered co-owner of ALL THAT one equal undivided 42nd part or share of and in ALL THOSE pieces or parcels of ground registered in the Land Office as THE REMAINING PORTION OF SECTION D OF KOWLOON INLAND LOT NO. 2145 and THE REMAINING PORTION OF SECTION E OF KOWLOON INLAND LOT NO. 2145 and of and in the messuages erections and buildings thereon now known as MAY MOON HOUSE TOGETHER with the sole and exclusive right and privilege to hold use occupy and enjoy ALL THAT BLOCK A on the EIGHT FLOOR of the said building (hereinafter called "my said properties").

(2)        I am desirous of appointing an attorney to deal with my said properties.

NOW THIS DEED WITNESSETH that I hereby appoint the other co-owner of my said properties WU KING HEE Gentleman to be my Attorney to deal with my said properties in accordance with Section 7 of the Powers of Attorney Ordinance.

IN WITNESS whereof I have hereunto set my hand and seal the day and year first above written."

5. Section 7 of the Powers of Attorney Ordinance provides that:

"7(1)     Subject to subsection (2), a general power of attorney in the form set out in the Schedule, or in a form to the like effect out expressed to be made under this Ordinance, shall operate to confer

authority to do on behalf of the donor anything which he can lawfully do by an attorney.

(2)    This section does hot apply to functions which the donor has as a trustee or personal representative."

6. The form prescribed in the Schedule is as follows:

"

SCHEDULE

POWERS OF ATTORNEY ORDINANCE

(Chapter 31)

FORM OF GENERAL POWER OF ATTORNEY FOR PURPOSES

OF SECTION 7

THIS GENERAL POWER OF ATTORNEY is made this day of 19 by AB of (address)

I appoint CD of (address) [or CD of (address) and EF of (address) jointly or jointly and severally] to be my attorney(s) in accordance with section 7 of the Powers of Attorney Ordinance.

IN WITNESS whereof I have hereunto set my hand and seal."

7. It is common ground that this appeal turns on the fairly narrow point of whether the Power of Attorney conferred upon the donee Wu King He the necessary powers to sell the property, to give valid receipt for any money he received and to execute the assignment.

8. In presenting the first ground of appeal, Mr. Brook Bernacchi, Q.C. for the appellant submits that all references made in the Power of Attorney to any properties, are meaningless because it is apparent from the Power of Attorney that the donor had only one property. That, in my view, is not an inference that can be drawn on the evidence available. Gall J. rightly rejected it.

9. Mr. Bernacchi also submits that at common law "general" when applied to powers of attorney includes a general power of attorney with respect to a particular property (movable or immovable) or a particular trade. He relies upon Smith v. M'Guire (1858) 3 H&N 554 and Brady v. Todd (1861) 8 CBNS 592, which make reference to agents with broad authority within a particular trade as general agents. Mr. Bernacchi also suggests that where general powers are conferred albeit for particular purposes, the power is not uncommonly referred to as a general power of attorney. Mr. Li for the respondents accepts that a general power of attorney may relate to a particular property.

10. Pursuing the first ground Mr. Bernacchi submits that to construe section 7 so strictly as to exclude the general powers if they are limited to particular subjects or circumstances would cause confusion and so severely reduce the use of section 7 as to render it useless, i.e. confusion if, for example, general agents exercise authority also given to other general agents possibly in another country. There is no evidence to support those contentions and I do not accept them, notwithstanding that greater use and indeed benefit might be derived form section 7 if it had the meaning Mr. Bernacchi contends for. Moreover, if the intention of section 7 is to do away with long and complicated documents that are commonly considered necessary for special powers, as Mr. Bernacchi claims, the question would still remain of why that intention might not relate only to powers that are wholly unlimited to the extent provided in section 7 and the Schedule, as indeed appears to be the effect of section 7.

11. Gall J. observed that a power of attorney drafted in terms identical to those of the Schedule achieves the effect of conferring on the donee the authority of the donor to do all things that can lawfully be done by the donor (sic), whereas the Power of Attorney confers such power over one property and by that limitation prohibits the donee from acting in respect of any other property of the donor, adding that whilst the power to act is undiminished the subject over which it can be exercised is heavily curtailed. Therefore, he concluded, the Power of Attorney is not to the like effect of that in the Schedule, adopting the same test as Saied J. in Mak Hung Sing Friday v. Yuen Kit Ching (M.P. No. 1733 of 1990, unreported) notwithstanding the opposite conclusion reached by the latter. In that case Saied J. in." construing the words "to the like effect'' adopted, as the proper test that used by Lord Evershed in the context of their appearance in the Restrictive Trade Practices Act 1956 in Re Black Bolt and Nut Association of Great Britain's Agreement (No. 2) [1962] 1 All ER 139 at 145 where he said:

"But I return to my consideration of the simple formula in section 20(3)(b), 'any other agreement ... to the like effect.' I call it a simple formula, and, as a matter of the English language, so it is, though it has, in all conscience, led to very careful and elaborate argument here. But when one speaks of a written instrument and then of some other instrument 'to the like effect', I should have thought that, as a matter of ordinary English, what was meant was that, according to the natural construction of the words used in the second agreement, it was one which was intended to operate in substantially the same way as the first. I do not suggest that that should be taken as an exnaustive statement of what this phrase means, but I do say that, in the ordinary case, the duty of the court is to look at the new agreement in order to see what, according to the language used, its terms, if made effective, will do or achieve, and then ask the question: Are those things done or achieved the same as those which the old agreement, if operative, would have done or achieved?"

Mr. Li submits that such test formulated in relation to the effect of agreements is not appropriate in relation to powers of attorney as documents of title. I do not agree, with respect the test seems to me not only to be appropriate, but the right and proper test in the circumstances.

12. Saied J. having set out the foregoing passage, then, in the context of the same question as that being addressed here and a power of attorney similar in material respects said:

"The natural construction of the words used in this instrument, which it is conceded bears some resemblance to the prescribed statutory form, in my judgment plainly is that the donor, in specifying one of his assets, meant that the authority he conferred on his attorney in its widest scope and ambit as stated in section 7 was to apply in connection with just one of his assets which, for the sake of convenience and certainty, he specified in the instrument."

I think the same could be said in the present case. But he went to say:

"Thus, while the form followed the prescribed statutory form, it incorporated the sole asset for which toe attorney was appointed and in so doing the effect of the general power as such was maintained and not altered or diminished and I am of the considered opinion and so find that the answer to the question posed by Lord Evershed M.R is an emphatic yes."

Mr. Bernacchi who supports and relies upon the latter conclusion, submits that Gall J. was wrong in reaching his different decision. I am unable to agree. Applying Lord Evershed's test, the effect of a general power of attorney in the form set out is that expressly and unambiguously provided in section 7(1) i.e. "to confer ... on the donee of the power ... authority to do on behalf of the donor anything which he can lawfully do by an attorney". But as Gall J. pointed out, the authority conferred by the Power of  Attorney, assuming it to be effective, would be authority to do on behalf of the donor anything he, the donor, could lawfully do by an attorney, but only with reference to dealing with the property. Clearly could be done or achieved under the Power of Attorney is not the same as what could be achieved under a power in the form of the Schedule.

13. However Mr. Bernacchi submits that the words "in a form to the like effect" relate to "a general power of attorney" and not to "in a form set out in the Schedule". That seems to me to be an unnatural reading of section 7(1), tantamount to reading it in the following way: "A general power of attorney in the form set out in the Schedule or in a form to the like effect of a general power of attorney but expressed to be made under this Ordinance ...". It that were intended it could have easily been expressed in terms both clearer and simpler, for example, "A general power of attorney in the form set out in the Schedule, or expressed to be made under this ordinance ... ". Construed in the way contended for by Mr. Bernaccni, the words "in the like form" are rendered tautologous or a nullity. Moreover the difficulty of the unrestricted authority conferred by the latter part of the subsection yet remains.

14. On its plain meaning, section 7 provides for two types of general powers of attorney i.e. first a power of attorney in the form set out in the Schedule, and second, a power of attorney in some other form to the like effect out expressed to be made under the Ordinance. Both are plainly and equivocally given the same effect; they operate to confer on the donee authority to do on behalf of the donor anything which he can lawfully do by an attorney. Such authority is obviously wider than what is conferred by the. Power of Attorney or any "general power of attorney" limited to a particular property or subject matter. However desirable or beneficial it may by thought that the latter should be within section 7, there is no ambiguity, obscurity or equally open alternative construction that would pave the way for that interpretation. Again, it may be observed that had that been the intended effect it would have been quite simple to express it and to provide for both qualified application and appropriate limited effect. As the provision stands the only effect provided is the exhaustive grant or power.

15. It is not without significance that notwithstanding the approximately two decades that the English and Hong Kong provisions have been in force, no authority for the interpretation contended for, and no approved precedent for the Power of Attorney can be found; that on the contrary the practice, on such evidence as has been provided to the Court, seems that the scheduled form is used only for unqualified, unlimited powers or attorney.

16. In their extensively researched submissions counsel touched upon many other matters. Given the importance attached to the construction of section 7 in the present context by the legal profession, I propose to mention briefly some of those matters.

17. Section 7 as its marginal reference to "1971 c. 27 s. 10" indicates, and likewise the Schedule, have been taken almost verbatim from section 10 of the Powers of Attorney Act 1971, the provisions relating to trustees and personal representatives apart, those being of no concern in the present context. I digress to observe that decisions of the English Courts by then made must have been within the contemplation of the Hong Kong, legislative authorities in enacting those provisions; later decisions could be of high persuasive or even binding authority. But the industry of counsel in this matter, and indeed of leading Chancery counsel in London, as will be seen, suggest that there is no authority on the point in issue .

18. The Powers of Attorney Act 1971 was enacted following a Report and Draft Bill prepared by the Law Commission [Law Commission Paper (No. 30) CMND 4473 (1970)]. Interesting though the genesis of section 7 and the Schedule, and the Commission's reasons given in paragrapns 39 and 40 may be, they do not in my view assist in construing those provisions in the present context, certainly they do not seem to me to lend any support to Mr. Bernacchi's submissions. On the contrary the explanatory note to clause 9 (which became section 10 says that the words "or in a form to the like effect" are "customary when statutory forms are provided and make it clear that verbal differences are not fatal (for example the form assumes that there will be not more than two attorneys whereas there may, be three or more)". Those words, therefore, at any rate so far as the intentions of the Commission were concerned, would relate not to "a general power of attorney" as contended by Mr. Bernacchi but "in the form set out in Schedule 1". However, the general approach of the courts is that material of this sort, in particular recommendation of Commissions, are not a permissible aid in the interpretation of statutory provisions (see Maxwell on the Interpretation of Statutes, 12th Ed. pp. 50-54); no authority to the contrary was cited to this Court.

19. Counsel have also referred to Hong Kong Law Society Circular No. 29/78 of 9th March 1978, which circulated an opinion obtained from leading Chancery counsel in London that a general power of attorney under section 7 of the Powers of Attorney Ordinance could not validly be qualified so as to apply to some property of the donor. The Circular advised members against use of the form in the Schedule to the Ordinance when the power was intended to apply to specific property only. Subsequently the Society circulated a further opinion to the effect that a power of attorney so qualified although not taken into effect under section 7, might be effective apart from the Ordinance, depending upon the circumstances, as an appointment by deed or alternatively might be saved by estoppel. While these Circulars and opinions may point to the practice commended and possibly adopted, and to the absence of authority, they cannot form the basis of any direct assistance in interpreting section 7 and the Schedule.

20. Mr. Bernacchi also relied upon the maxim omnia rite esse acta praesumuntur, the power of attorney being over ten years old. However, given the clear conclusion I have reached on the initial absence of statutory effect, there is in my judgment no room for a presumption of regularity.

21. Finally, Mr. Bernacni sought to rely upon section 19 of the Interpretation and General Clauses Ordinance which deems Ordinances to be remedial and enjoins such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit. In the absence of any evidence or identification of the object of the provision it is difficult to see how section 19 could avail the appellant. It would seem also that the common law principle from which it is derived and which applies in England as the rule in Heydon's case [see Haldane v. Haldane (1977) AC 673 at 689 E-F] has hot resulted in any such effect in England, at any rate none that has been drawn to the attention of this Court.

22. For the reasons I have given, in my opinion, the Power of Attorney qualified in the way it is, does not take effect under section 7 of the Powers of Attorney Ordinance.

23. I turn then to address the second ground of appeal, i.e., that further or alternatively, the learned judge failed to consider or alternatively to consider sufficiently that the power of attorney dated 4th June 1980 is valid at common law entitling Mr. Wu to sell the property. The question of validity at common law was hot addressed nor even mentioned by Gall J. who, having disposed of the subject matter of the first ground proceeded directly to the question of estoppel. Counsel disagreed as to whether the question was raised on behalf of the appellant. Mr. Bernacchi concedes that it was not taken in the direct way it has before this Court.

24. The first question that arises is the meaning "deal" in the words "to deal with my said properties". In the context of section 7 of the Ordinance, Gall J. equated the words "deal with any properties (sic) in accordance with section 7" in the power of attorney with the words "to be my attorney in accordance with section 7" in the Schedule to the Ordinance with all the Powers they import under section 7, but in relation only to the subject of the power. Mr. Bernacchi submits that, if "deal" was wide enough for the purposes of section 7, as the learned judge held, then it must be wide enough for the purpose of the common law. He submits that "deal" and "deal in accordance with section 7" authorise sale and all that is necessary to convey the property.

25. Mr. Li accepts that "deal" includes "sell"; there is ample authority for that (e.g. Stroud's Judicial Dictionary 4th Ed. p. 691; Halsbury's Laws 4th Ed. Vol. I para. 432; Shorter Oxford Dictionary). He rightly does not contend that because the Power of Attorney invoiced the Powers of Attorney Ordinance it cannot be effective as a deed under the common law. But he does submit that in the latter context it must give specific power for every act required e.g. not merely to sell but also to receive the purchase money and to sign, seal, deliver and give receipts. And he contends that it must be construed in the light of the circumstances and the strict way applicable to powers of attorney.

26. It seems to me that the short and simple answer to the foregoing contentions lies in the terms of the Power of Attorney. It is not simply a specific power to deal in the property, but to deal "in accordance with section 7". Those words clearly import the widest powers that donor could confer upon the donee in relation to the dealing in, including sale of the property i.e. to do on behalf of the donor anything which he can lawfully do by an attorney. That, in my view, must clearly include the power to receive the purchaser's money, give a receipt and sign and seal the deeds of assignment.

27. There is nothing in the circumstances that in any way suggests any restriction of such wide power; on the contrary the circumstances are no less consistent with those wide powers being conferred. It is therefore not necessary to enter into nice questions of whether "deal" includes the acts additional to sale that have been mentioned. Nor is it necessary to consider whether the additional powers mentioned are included as being incidental to the power to sell. Moreover the power "to deal in accordance with section 7" is not a specific power followed be general words which might thereby limit the scope of the latter. Gall J., in my view, was right in construing the words in the wide way he did.

28. I conclude therefore that the power of attorney did give the attorney the power to sell the property, to receive the purchase money, to give valid receipts and to sign, seal and deliver the deeds of assignment. I emphasise, however, that I have reached that conclusion upon the particular facts of this case, and would not wish to be taken as endorsing the formula "deal in accordance with section 7" for general use.

29. Having reached the firm conclusion that the Power of Attorney is effective under common law, it is not necessary to address the appellant's third ground of estoppel.

30. In my judgment, therefore, the Defendant has shown good title and the declaration made by the learned Judge to and dependent upon the contrary cannot stance. I would accordingly allow the appeal and set aside the order made by the learned Judge except insofar as relating to the costs and disbursements incurred by the Plaintiffs in the investigation of title and the costs of and incidental to the Plaintiffs' application. Since the appeal in my view succeeds upon a point taken for the Defendant so late in the proceedings, it seems to me right that the Defendant should not have its costs of the appeal. I would accordingly make an order nisi that there be no order as to costs of the appeal.

Sir Derek Cons, V-P:

31. As it is accepted that the words "general power of attorney" are apt and commonly used to describe an unlimited authority over limited subject matter, I would for my part have been inclined so to construe those words in section 7 of the Powers of Attorney Ordinance, thereby permitting direct use of the section to achieve that end. But as my brothers take a different view, I am content to rest my decision on the basis they accept.

32. I too would therefore allow the appeal and make the orders proposed by my Lord Nazareth, J.A.

Clough, J.A.:

33. I agree that the appeal should be allowed for the reasons given by my Lord Nazareth. I would also make the orders he has proposed.

Representation:

Mr. B. Bernacchi, Q.C. & Mr. Henry Lo instructed by Messrs. Kwong & Lam for Appellant

Mr. C.Y. Li instructed by Messrs. Yung, Yu, Yuen & Co. for Respondents