Lo Hung Biu v. Lo Shea Chung and Another

HCMP003537/1996

1996 M.P. No. 3537

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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Coram: Deputy Judge W. Wong in Court

Date of Hearing: 11 November 1996

Date of Handing Down of Judgment: 22 November 1996

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J U D G M E N T

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1. By a provisional Agreement for Sale and Purchase dated 6th September 1996, the Defendant agreed to sell to the Plaintiff the property known as Lot No. 281 in Demarcation District No. 106 for $2.88 million.

2. The Plaintiff had paid to the Defendant a total sum of $288,000 by way of deposit.

3. The Plaintiff's solicitors received from Messrs. Boris Lui & Co. the relevant title deeds and documents. After perusal of those documents, the Plaintiff's solicitors raised the following requisitions :

(1) By a Power of Attorney M/N 145119, Sham Shun Tsing appointed Sham Kwan Yiu as his lawful attorney to deal with the said property and other properties. There is no provision in the said Power of Attorney authorising Sham Kwan Yiu to assign the property by way of gift. However in Assignment M/N 145221, Sham Kwan Yiu assigned the said property to Sham Sun Wing and Sham Cheong Shun with Ng Yuk Ying as trustee by way of gift.

(2) In Assignment M/N 163823, Sham Sun Wing and Sham Cheong Shun with Ng Yuk Ying as trustee assigned the property to Sham Cheong Shun. Sham Sun Wing and Sham Cheong Shun did not sign their names on the said Assignment to signify their consent to the said arrangement.

4. On 23rd September 1996, Boris Lui & Co. replied saying,

"The root of title of the property is Conveyancing on Sale Memorial No. 170626. Any deeds or documents before this is irrelevant. Therefore, we are not obliged to entertain your requisitions."

5. After a series of exchange of news, Boris Lui & Co. alleged they had answered the requisitions and would not entertain further exchanges. The Plaintiff therefore started the present proceedings and asked for the following relieves :

1. A declaration that the requisition numbered (a) and (b) contained in Messrs. Leung Kin & Co.'s letter of 16th September 1996 (a true copy whereof is annexed hereto) arising out of the Power of Attorney Memorial No. 145119 and the Assignments Memorial Nos. 145221 and 163823 in respect of the title to the said Property comprised in the said Provisional Agreement has not been sufficiently answered by the Defendant;

2. A declaration that good title to the said Property has not been shown in accordance with the Conveyancing and Property Ordinance (Cap. 219) and that the Plaintiff is entitled to annul the said Provisional Agreement;

3. That the Defendant may be ordered to pay to the Plaintiff the sum of HK$288,000.00 being the amount of the deposits paid by the Plaintiff under the said Provisional Agreement together with interest at such rate and for such period as this Honourable Court shall think just;

4. Costs be to the Plaintiff; and

5. Such further or other order be made in the premises as to this Honourable Court shall deem fit.

6. The Provisional Sales and Purchase Agreement was in the printed form commonly used by most of the estate agencies. It did not limit the root of title to that required by the Conveyancing and Property Ordinance.

7. The Power of Attorney of Sham Kwan Yiu only gave the power to the donee to sell, buy or exchange those properties, estates and -- buildings or any or more of them, to fix prices and conditions, to deliver or have delivered the same according to law, customs or regulations, to do and perform registrations and sign the registers. It did not empower the donee to dispose of the property by way of gift. So the title is defective.

8. Further, in Memorial No. 163823, the trustee conveyed Lot Nos. 281 and 282 in Demarcation District No. 106 to one of the beneficiaries without the consent of the other beneficiaries.

9. As those two matters go to the root of title and the purchaser is entitled to raise requisitions. The Defendant has not sufficiently answered those two requisitions.

10. As the donee of the Power of Attorney had no power to dispose of the property by way of gift nor had the subsequent conveyance been with the consent of the other beneficiary, a good title to the said property has not been shown.

11. In the premises there be an order in terms of paras. 1 and 2 of the Originating Summons, the Defendant be ordered to return the deposit in the sum of $288,000 to the Plaintiff.

12. By consent, there be no order as to costs.

(Wesley WONG)

Deputy Judge of the High Court

Representation:

Mr. Kenneth LEE of Messrs. Leung Kin & Co. for the Plaintiff.

Mr. Philip WONG of Messrs. Boris Lui & Co. for the Defendant.