Wu Wing Kuen v. Leung Kwai Lin Cindy

HCMP000646/1999

1999, No.M.P.646

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

Coram : The Hon. Mr. Recorder Tang S.C. in Court

Date of hearing : 22 June 1999

Date of handing down judgment : 9 July 1999

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JUDGMENT

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1. By an Agreement dated 18th December 1998, the Plaintiff agreed to purchase Flat E on the 6th floor of Han Palace Building, Nos.441 - 447 King's Road, Hong Kong ("the Property") from the Defendant.

2. The price was $1,138,000 and a deposit of $113,000 was paid.

3. The sale was not completed because of a dispute over title.

4. The dispute arose out of the inability on the part of the Defendant Vendor, to produce the Power of Attorney pursuant to which an Assignment dated 28th June 1991 ("the 1991 Assignment") was executed.

5. Miss Diana Cheung, who appeared on behalf of the Defendant, has argued that the 1991 Assignment was not an intermediate root of title, although she accepts that it was part of the chain of title. I do not believe it matters.

6. It is obvious that, subject to the Government Lease, the root of title starts with the Assignment dated 2nd August 1960, and the property devolved to the Defendant through the 1991 Assignment.

7. The Vendor acquired the Property from Restart Design Limited by an Assignment dated 1st April 1998. Restart Design Limited in turn derived its title from the 1991 Assignment from Chan Sin Fong. Chan Sin Fong acquired her title from Trade Win Development Limited by an Assignment dated 10th February 1990 who acquired its title from Root Power Co. Ltd. Root Power Co. Ltd. in turn acquired the Property from Wong Suk Yee who acquired her title by an Assignment dated 2nd August 1960.

8. It is obvious that the 1991 Assignment is an essential link in the chain of title. It seems to me that it makes no difference whether it is described as a link in the chain of title or an intermediate root of title.

9. It follows that it is critical to the devolution of good title that the 1991 Assignment should have been validly executed.

10. Section 13(1)(c) of the Conveyancing and Property Ordinance Cap.219 provides:

"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"

11. Now, the Vendor was unable to produce either the original Power of Attorney, or a certified copy under s.13(2)(b) CPO.

12. That being the case, the Purchaser argues that he is entitled to refuse to complete. He claims, inter alia, for return of his deposit.

s.13 CPO has been the subject of a number of decisions at first instance. Before I come to deal with them, I wish to consider how the matter might be approached as a matter of principle.

13. In a conveyancing transaction, the vendor has to show as well as to give good title. s.13(1) and (2) are concerned with the showing of good title. The obligation to produce original documents arises at the giving of good title on completion.

14. In Ng Chek-bok v Kiu Wai-ming 1992 1 HKLR5 at 14, Clough J.A. in delivering the judgment of the Court of Appeal distinguished

"between the date when the vendor was required to show a good title (by production of copies of all the documents relating to his good title) and the date (the completion date) by which he was required to make a good title (by proving it as a matter of evidence)"

15. However, when Clough J.A. spoke of showing a good title by production of copies of all the documents relating to title, I think he was referring to the Hong Kong conveyancing practice, whereby instead of an abstract of title, the vendor's solicitors would simply provide copies of documents relating to his title.

16. At common law on an open contract, the vendor must bear the expense of obtaining title deeds required by the purchaser to be handed over on completion, although such title deeds are not in the vendor's possession, and are not referred to in the abstract. See Re Duthy & Jesson's Contract [1898] 1 Ch.419.

17. In Yiu Ping Fong and another v Lam Lai Hing [1999] 1 HKLRD793, Yuen J. said, that although the vendor had satisfied s.13(2) CAPO by the production of a certified copy of an assignment, at the showing of title stage,

"Section 13(2) does not, in my judgment, exonerate the vendor from producing at completion the originals of such title deeds and documents, at least those that relate exclusively to the property being sold" p.798

Yuen J. cited Williams on Title (4th edition) at 547 in support.

Yuen J. then went on to say that at p.799

"The loss of the original documents must be proved, and in England, there is case law that a statutory declaration to this effect would usually suffice (see Emmet on Title, #5.091). I do not see why it should be different in Hong Kong, and indeed this practice has been recognised in all the authorities quoted to me"

18. In Halkett v Dudley [1907] 1 Ch.590 a case concerning the purchase of real property in England under an open contract, Parker J. said at p.604

"I take the common law principle to be 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, or that it is of record in a foreign country the laws of which do not admit of its production, he is at liberty to give secondary evidence of its contents"

19. Thus, it is clear that at common law, title could be proved by secondary evidence. Also on completion if the original is lost or destroyed, then provided that is sufficiently proved, non production would be excused.

20. Now the question is whether secondary evidence is permissible at the showing of title stage. This will involve a construction of s.13(1) and (2). What I have to decide is whether "unless the contrary intention is expressed" ... secondary evidence (apart from those provided for in s.13(2)) is admissible.

21. In other words, whether even if there is sufficient secondary evidence (say in the form of a sufficient statutory declaration) of an assignment which is a link in the chain of title, but in the absence of provisions to the contrary, the vendor must be regarded as having failed to show a good title, such that the purchaser may rescind.

22. Now, if this is the legal position, the effect on the marketability of the property may be substantial. It is common knowledge that in Hong Kong, it is not uncommon for properties to be contracted to be sold by a provisional agreement. Such provisional agreements are often not drafted by solicitors. A solicitor who has the task to advise a client on a purchase will be bound to advise the client to consider carefully the effect which the necessity for a contrary intention may have on the value of his property. He must advise his client that he must not enter into a provisional agreement unless he were to add such a provision. Realistically, it will mean that no provisional agreement can be entered into. A conveyancer might say, so much the better. But a conveyancer is not concerned with the dynamics of the property market in Hong Kong. All things being equal, a purchaser will prefer to buy a property which does not come with this special requirement. Properties are often treated like commodities in Hong Kong. A flat in Taikoo Shing with such a handicap is likely to be worth less than one without.

23. Thus, one must not think that the requirement of contrary expression is a matter of no consequence. A solicitor will be failing in his duty not to advise the client clearly of its consequence. Such advice may abort a transaction.

24. That being the case, one must accept that any interpretation of s.13(1) and (2) which makes it impossible (in the absence of a contrary expressed intention) to show title by secondary evidence may have serious consequence.

25. Is there any compelling reason why secondary evidence should not be admissible at the showing of title stage? Yiu Ping Fong and another v Lam Lai Hing [1999] 1 HKLRD793 is authority that on completion, secondary evidence such as a statutory declaration is admissible. Is there any reason why at the showing of title stage, the requirement should be more stringent?

26. Personally I can see no reason. If that is indeed required, it must be because the language of s.13(1) and (2) require no less. Now s.13(1) can be compared with s.45(1), The Law of Property Act 1925. Section 45(1) provides, where relevant:

"(I) A purchaser of any property shall not -

require the production, ... of any deed, ... or made before the time prescribed by law, or stipulated, for the commencement of the title, ... ;

Provided that this subsection shall not deprive a purchaser of the right to require the production, or an abstract or copy of -

(i) any power of attorney under which any abstracted document is executed; or

(ii) any document 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 the property is disposed of by an abstracted document; or ..."

27. In England, secondary evidence is permissible notwithstanding s.45(1) LPA. Did the legislature intend otherwise in Hong Kong by s.13(1)?

The Vendor's Obligation at Common Law

28. At common law, a vendor under an open contract has the duty to show he has the right to convey the land he has contracted to sell. However, since long-held possession is prima facie evidence of good title, the practice has grown up amongst conveyancers whereby proof of title for not less than 60 years before the contract was held to be proof of a good title if nothing appeared to the contrary.

29. Originally, the rule merely placed an upper limit on the amount of evidence which the purchaser could require but he was not debarred from objecting to the title if he can produce evidence on a transaction more than 60 years old which shows that the title was bad. However, the Courts have since laid down the requirement that in order to constitute a defect in the Vendor's title, there must be a real danger that a third party can successfully challenge his possession. Thus in cases where the defect is very old and the third party is likely to be barred by limitation and laches, the purchaser would not be allowed to rely on an illusory risk as the basis for objecting to the Vendor's title.

30. In addition, upon a sale of leasehold land, the practice was to require production of the lease even if it was more than 60 years old, but after the date of the lease the title during the 60 years next before the date of the contract was all that could be required (see Frend v Buckley (1870) LR5 QB213).

31. Over the years, the period over which the Vendor has to prove his title has been progressively reduced by statute to fifteen years.

32. See the helpful discussion in Farrand, Contract and Conveyance, 4th edition, pp.95 - 96.

Evidence on which title may be proved

33. Although the best and the usual evidence of title is production of the title deeds, it has never been the law that deeds are the only evidence on which the purchaser is bound to accept (see Williams on Vendor and Purchaser, 3rd edition, at p.121). Thus in Frend v Buckley, the purchaser was said to be entitled to proof of the contents of the lease (and not necessarily sight of the indenture granting the lease) per Kelly, C.B. at p.217.

34. The possibility that satisfactory evidence of title might be proved by secondary means was expressly recognised in the case of Bryant v Busk (1827) 4 Russ 1 and Moulton v Edmonds (1859) 1 De GF&J246, although in Re the Halifax Commercial Banking Co. Ltd. and Wood (1898) 79 LT536 Chitty L.J. added the qualification that such evidence ought to be clear and cogent.

35. The principles derived from the cases may be summarised as follows:

(1) Before secondary evidence can be relied on, the Vendor must prove the loss or destruction of the deeds concerned

(2) The Vendor must be able to make out the material terms of the lost or destroyed deed

(3) The Vendor must prove that the deed was duly executed and stamped, although the Vendor may be able to rely on the presumption of its due execution.

Section 13 of the Conveyancing and Property Ordinance Cap.219

36. The crucial issue in this case concerns the interpretation of s.13 CPO which reads:

"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 Crown lease relating to the land sold and -

(a) proof of title to that land -

(i) ...

(ii) ... extending not less than 15 years before the contract of sale of that land commencing with an assignment ... (emphasis added)"

37. In my view, s.13 of the CAPO must be read against the pre-existing position at common law. The use of the word "only" in s.13 of the CAPO belies the clear intention of the legislature, that is, to put an upper limit on the amount of conveyancing evidence on title which a purchaser is entitled to demand from the vendor. In other words, what is set out in s.13 is the maximum which a purchaser is entitled to demand from the Vendor, "unless the contrary intention is expressed", but in no way prescribes against the Vendor proving his title by other means in accordance with established conveyancing practice (including, where appropriate, satisfactory secondary evidence of the Crown Lease).

38. Section 13 is concerned with the proof of title. According to Phipson on Evidence, 14th edition,

"... originally, at common law, no secondary evidence was allowed; if the deed was lost, or in the possession of the adversary, the plaintiff failed. Afterwards, in cases of loss, equity relieved; then exceptions were allowed by common law also, marshalled, however, at first, strictly by degree, i.e. a counterpart, then a copy, then an abstract of recital, then parol evidence, the next best thing being let in only if the class above it were unavailable. Finally, the present rule of 'no degrees in secondary evidence' became established" 7 - 17

What is now left of the best evidence rule is that

"if an original document was available in one's hands it must be produced" 7 - 15

39. In my opinion, it is important not to confuse s.13(1) with e.g. a contractual right or the right at common law to the original title deeds. s.13(1) is concerned with the showing of title. The latter are concerned with the giving of title.

40. Nor is s.13(2) inconsistent with the admission of other secondary evidence. s.13(2) enables the vendor to produce a certified or attested copy at the showing of title stage even though the original might be available. In other words, it cuts down the best evidence rule.

41. Thus, if the matter were free from authorities, I will decide that secondary evidence (apart from those provided for under s.13(2)) is admissible at the showing of title stage.

42. In my opinion, Re The Halifax Commercial Banking Co. Ltd. and Wood (1898) 79 LT536 is a decision in support of this view.

43. Lindley M.R. said in his judgment (at p.539)

"The purchaser was willing to complete, but the vendors could not produce the deeds, they having been unfortunately lost by their solicitors after the contract had been signed. There is no condition providing for the non-production of lost deeds. But the mere fact of their loss does not release the purchaser from the performance of his contract. He can be compelled to complete if he is furnished in proper time with satisfactory secondary evidence of the lost documents. This was decided in Bryant v Burk (4 Russ.1) and Moulton v Edmunds (1 De G.F.&J.246)"

Chitty L.J. agreed with Lindley M.R. and added (p.539)

"The two authorities cited of Bryant v Burk (ubi sup.) and Moulton v Edmunds (ubi sup.) show that the court of equity will force a purchaser where the deeds are supposed to have been lost to take the title upon secondary evidence as to the contents of the deeds, and their having been duly executed and duly stamped. But in my opinion the secondary evidence produced ought to be clear and cogent. Without casting any reflection upon those two authorities, it is quite certain that to some extent the purchaser by this doctrine is put in a worse position than he otherwise would be if he had the deeds - either the deeds delivered to him, or a proper covenant, or acknowledgment under the Conveyancing Act equivalent to a covenant, for production. He is in a worse position, because on a sale he would have to make special conditions; and if he proposed to mortgage he would get no mortgagee who would take his title. Therefore, I must say, without in the least disputing the authority of those two cases, that the evidence ought to be clear and cogent, so that the purchaser may maintain his title against all those who may attack him when he is in possession, and so that he may pass on the title in the ordinary way in the market to a purchaser or to a mortgagee"

44. The passage from Chitty L.J.'s judgment is important, because according to him, if there were cogent and clear secondary evidence, the purchaser could

"maintain his title ... and so that he may pass on the title in the ordinary way in the market to a purchaser or to a mortgagee"

45. In "the ordinary way" means that he would not have "to make special conditions", in other words, no need for any special provision.

46. Williams L.J. concurred, with reluctance, with the view of the majority that although sufficient secondary evidence would have sufficed, the vendor had failed to adduce sufficient secondary evidence.

47. It is to be noted that in the course of Counsel's submission, Chitty L.J. asked Counsel for the vendor

"Chitty L.J. - Do you say that you can give secondary evidence of a deed where the contract of sale provides that you shall produce the deed itself?

Counsel answered - No; but the contract here is not to produce a particular deed"

48. It does not appear from the report that any of their Lordships agreed with Counsel's answer.

49. Now Re Halifax is cited in Emmet on Title no less than 5 times. However, only 2 references are relevant for the present purpose.

"5.091 Missing documents - Where the vendor is unable to produce documents because they have been destroyed or lost, he is permitted instead to produce secondary evidence of the contents of the documents (Re Halifax Commercial Banking Co. and Wood (1898) 79 LT536; Halkett v Dudley [1907] 1 Ch.590). Here, however, the due execution of the missing documents has to be proved, not presumed (Bryant v Busk (1827) 4 Russ 1). Again, the loss of the documents must be proved (Re Duthy and Jesson [1898] 1 Ch.419), although a statutory declaration as to this will usually suffice (Hart v Hart (1841) 1 Hare 1). Due stamping of such missing documents will be presumed (ibid)"

"21.017 Lost or destroyed deeds - The fact that the title deeds to property should have been lost will not release the purchaser from the performance of his contract, and he can be compelled to complete if the loss be proved, and he is furnished in proper time with satisfactory secondary evidence as to the contents of the lost documents and (for example, by statutory declaration) as to their having been duly executed (Re Halifax Commercial Banking Co. Ltd. and Wood (1898) 79 LT536)

50. I have been unable to find in Emmet any reference to the exchange between Counsel and Chitty L.J.

51. Re Halifax is also cited in Williams on Title. No reference was made to the exchange between Chitty L.J. and Counsel. Nor any suggestion that Counsel's answer represented the law.

52. In my opinion, Re Halifax is no authority that if a contract requires the production of an original document, but the original is lost, no secondary evidence is admissible.

The Case Law on Section 13 CAPO

53. I have considered the following cases:

(1) Chan Kam Sing v Lam Ping Ping Grace [1990] 1 HKC373 (8/3/90) Deputy Judge Findlay Q.C.

(2) Yeung Dallah Rudin v Copiluck Limited 1992 2 HKC575 (24/11/92) Woo J.

(3) Gold Check Investments Limited v Star Investment Limited (M.P.592/92, unreported) (8/4/92) Godfrey J.

(4) Gatewood Limited v Silver Noble Investment Limited [1992] 2 HKC473 (25/9/92) Barnett J.

(5) Wong Wai Ming v Tang Tat Chi [1993] 1 HKC341 (15/2/93) Patrick Chan J.

(6) Tong Yuen King v Chan Chong Emma M.P.2949/95 (31/10/95) Yam J.

(7) BMC International Limited v Star Win Co. Ltd. [1996] 2 HKC302 (16/1/96) Rogers J.

(8) Yiu Ping Fong and another v Lam Lai Hing [1999] 1 HKLRD793 (23/9/98) Yuen J.

(9) Lee Lai Sheung Karita and Wai In Fun Perseus v Wei Fei Trading Co. Ltd. M.P.1315/98 (8/3/99) Yuen J.

(10) Cheng Shu Keung v So Wing King [1998] 1 HKC495 (28/11/97) Le Pichon J.

(11) Lo Miu Ling Cindy v Tam Hung Ping [1998] 4 HKC238 (18/6/98) Sakhrani J.

(12) Liu Tak Kin and another v Chan Yiu Kai and another [1998] 4 HKC362 (23/7/98) Deputy Judge Chung

54. I think it is possible to say that (2), (3), (7), (8), (9) and (10) are consistent with secondary evidence being admissible notwithstanding s.13(1). The others are against.

55. Chan Kam Sing v Lam Ping Ping Grace [1990] 1 HKC373 is a case where in place of a lost Block Crown Lease, the Vendor produced an uncertified photostatic copy from a copy which in turn was reproduced from a copy of the lease obtained by someone else from the District Land Registry before the original went astray. Deputy Judge Findlay Q.C. (as he then was) took the view that s.13 of the CPO had the effect of incorporating into every contract, unless the contrary intention was expressed, a strict requirement that the vendor produce the deeds and he said, at p.375C - D:

"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 (Halifax) case is authority for the view that the court may dispense with this requirement. At p.537 of the report of Halifax, Chitty L.J. asks counsel for the vendor in that case: 'Do you say that you can give secondary evidence of a deed where the contract of sale provides that you shall produce the deed itself?' Counsel replies: 'No, but the contract here is not to produce the particular deed'. Counsel was right. In that case, the contract required only that the vendor deliver an abstract of title to the property concerned"

56. The Learned Judge appears to have translated the words "the purchaser of land shall be entitled ... only production of the Crown lease" in s.13 of the CPO to "the defendant is entitled to require from the plaintiffs production of the Crown lease" (see p.374H - I). The proposition of the Learned Judge quoted above is not borne out by Re the Halifax Commerical Banking Co. Ltd. and Wood. It did not decide that the Vendor's obligation might have been different if the contract had provided for production of the deeds. Re Duthy & Jesson's Contract and Halkett v Earl of Dudley referred to above show that although at common law, the vendor has to deliver the original deeds on completion, secondary evidence is admissible if such deeds are lost.

57. In any event, no evidence tracing the copy document produced back to the original that was in the custody of the District Land Registry was offered; and in those circumstances Deputy Judge Findlay Q.C. was not satisfied that the document produced represented the true terms of the Crown Lease. It is clear that the finding can be explained on the basis of the lack of cogency of the evidence and the opinion of Deputy Judge Findlay Q.C. on s.13 CPO was strictly unnecessary for the decision.

58. Yeung Dallah Rudin v Copiluck limited 1992 2 H.K.C.575 is a direct authority in favour of the admission of secondary evidence notwithstanding s.13(1) CPO. However, the decision of Deputy Judge Findlay was not cited to the learned Judge. He followed Re Halifax.

59. Gold Check Investments Limited v Star Investment (M.P.592/92, unreported) concerns a contract which contained a clause requiring the vendor "to furnish to the purchaser such certified copies of any deeds or documents of title as may be necessary to prove title". The vendor was unable to supply the Crown Lease (which probably never existed) but offered instead a number of documents on Government files including the records of land auction concerning the property. When Godfrey J. observed that "s.13(1) of the CPO makes it clear that a purchaser of land is entitled to production of the Crown Lease relating to the land sold. That is a matter which goes to the root of the title", it is clear that he was only dealing with the question of whether the purchaser's requisition about the absence of the Crown Lease was raised out of time. The possibility of showing good title by secondary evidence of the Crown Lease was expressly recognised when the Learned Judge went on to remark that "if (the vendor) had offered the purchaser a statutory declaration explaining (if it could) why the original Crown Lease, or contract incorporating the Conditions of sale, was not available (offering the other documents to which I have referred in this judgment as sufficient conveyancing evidence of the sale to U.U. Pun) that would have been another matter. But merely to provide these copy documents without any such condition ... as if they were, in themselves sufficient conveyancing evidence of the Crown Lease or of the contract of its grant, was not, in my judgment, enough". Again, the decision was clearly based on the ground that the secondary evidence produced was not sufficiently clear and cogent. However, Chan Kam Sing had not been cited to the learned Judge. I regard this decision to be in favour of admission of secondary evidence.

60. In Gatewood Limited v Silver Noble Investment Limited [1991] 2 HKC473, the vendor did not dispute that it must produce the Crown Lease if required by the purchaser to do so; and the arguments turned on the effects of the New Territories (Renewable Crown Leases) Ordinance instead. In those circumstances, the assumption of Barnett J. that s.13 CPO entitled a purchaser to production of the Crown Lease in the form of a tangible document must not be given undue weight.

61. The issue in Wong Wai Ming v Tang Tat Chi [1993] 1 H.K.C.341 was the use of secondary evidence as proof of the contents of a certified copy of the Crown Lease which was illegible. In his judgment, Patrick Chan J. expressed the view that the cases of Gatewood Limited v Silver Noble Investment Limited, Gold Check Investments Limited v Star Investment Limited and Chan Kam Sing v Lam Ping Ping Grace are authorities that notwithstanding the position at common law, s.13 CAPO imposes upon the vendor a statutory obligation to produce the Crown Lease unless otherwise varied by agreement.

62. At 345F, the learned Judge, said

"While secondary evidence may be adduced to discharge the obligation to show good title if certain documents are lost, it cannot do 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"

63. Tong Yuen King v chan Chuen Chong Emma (1995, No.M.P.2949, 31/10/95) is an unreported decision of Yam J. where the learned Judge followed the decisions of Dep. Judge Findlay and Patrick Chan J. This is a direct decision that under s.13(1) no secondary evidence is admissible.

64. The decision of Rogers J. in BMC International Limited v Star Win Co. Ltd. left the position open. Whilst accepting the purchaser's argument that s.13 CAPO entitled it "to require from the vendor as proof of title to the land production of the Crown lease relating to the land sold", the Learned Judge appears to have recognised the possibility of proof of the Crown Lease by secondary means when he said "neither in my view can the vendor rely on the production of a statutory declaration ... as referred to Godfrey ... . In the first place, the statutory declaration which has been tendered seems to me to prove nothing save hearsay, at best, speculation as to conveyancing practice. In the second place, the conditions have not been produced".

65. Yiu Ping Fong and another v Lam Lai Hing [1999] 1 HKLRD793 where Yuen J. examined s.13 carefully and underlined the important difference between the Vendor's title to prove his title (which is covered by s.13(1) and (2), and the purchaser's right hence the Vendor's obligation) on completion to have possession of the original title deeds. I have already dealt with this decision earlier and will return to it later in my judgment. I think this authority can be regarded as being consistent with the admissibility of secondary evidence under s.13(1).

66. Lee Lai Sheung Karita and Wai In Fun Perseus v Wei Fei Trading Co. Ltd. M.P.1315/98, 8/3/99) an unreported decision of Yuen J. There, the vendor as unable to produce the Crown Lease. Nor was there any record of it at the Land Registry or the Lands Department. Yuen J. said

"The vendor's obligation under s.13 Conveyancing and Property ordinance is to produce the Government Lease. By that is meant that the vendor is obliged to produce a tangible document". Wong Wai Ming v Tang Tat Chi [1999] 1 H.K.C.341)

67. However, later in her judgment, Yuen J. made the further point that the vendor was unable to prove the terms of the conditions of sale and thus the vendor was in a worse position than the vendor in Gold Check, thus I believe it is possible to regard this decision not as a direct decision against the admission of secondary evidence under s.13.

68. Cheng Shu Keung v So Wing King 1998 1 HKC495 at 497, Le Pichon J. held that it was unnecessary for her to decide whether the Chan Kam Sing and Wong Wai Ming cases were wrongly decided. Moreover, she regarded Dep. Judge Findlay as having drawn a distinction between a root of title document and other title deeds. 497D.

69. Lo Miu Ling Cindy v Tam Hung Ping [1998] 4 H.K.C.238 (Sakhrani J, 18/6/98). The learned Judge following Chan Kam Sing and Wong Wai Ming held that s.13 provided that unless the contrary intention was expressed, the vendor's obligation was to produce as proof of title the original Crown Lease relating to the land sold or as permitted by subsection (2) a certified copy. And that s.13(2) requires a true copy of the original document.

70. Liu Tak Kin and another v Chan Yiu Kai and another [1998] 4 H.K.C.362, Dep. Judge Chung (as he then was), followed Yeung Dallah Rudin v Copiluck. It seems that Chan Kam Sing v Lam Ping Ping Grace had not been cited to the learned Judge.

71. Now as will be obvious, there are conflicting authorities on the subject. I am aware of the importance of consistency. It is vital to the profession that the law on the subject should be consistent. They are otherwise in an impossible position. Whichever way I turn, it will only add to the uncertainty. The sooner the matter is settled by a higher court the better.

72. However, given the 2 lines of authorities on the subject, I believe I am bound to choose between them.

73. There is no real dispute that here, there is sufficient secondary evidence. The only issue is whether secondary evidence is admissible under s.13(1).

74. Now s.13(1) is silent as to the consequence of a failure to comply with s.13(1). Must the consequence be, that whatever the circumstances, the purchaser is entitled to rescind? If not, I can see no reason why the purchaser should be entitled to rescind if there is clear and cogent secondary evidence which should according to Chitty L.J. in Re Halifax, enable the purchaser to "pass on the title in the ordinary way in the market to a purchaser or to a mortgagee".

75. I bear in mind Homyip Investment v Chu Kang Ming Trade Development Co. Ltd. [1995] 2 HKC458 at 466 where the distinction between the breach of a condition and an intermediate/innominate term of a contract is explained. Here, the Agreement for Sale and Purchase provides, as is usual, that "such of the muniments of title as relate exclusively to the Property will be delivered to the Purchaser ..." Clause 7. This is also what the common law requires. Re Duthy and Jesson's Contract. However, Halkett v Dudley is authority that secondary evidence is admissible.

76. Returning to the exchange between Chitty L.J. and Counsel in Re Halifax, can it be said that when a contract expressly provides for what the law would imply at common law, secondary evidence would not be admissible? I think not.

77. Nor is it possible for me to conclude that Clause 7 in this case, unlike the "as is" clause in Homyip is necessarily a condition rather than an intermediate/innominate term.

78. I believe the better view is that s.13(1) does not render inpermissible the production of secondary evidence at the showing of title.

79. I return to the issue before me.

80. The Vendor is unable to produce the Power of Attorney pursuant to which the 1991 Assignment was executed. Under s.13(1)(c) the purchaser is entitled to require its production or a certified copy (s.13(2)). Is secondary evidence acceptable? Now, if the Vendor had the original 1991 Assignment at the showing of title stage so that s.13(1) was satisfied, but the original was lost prior to completion and a certified copy could not be provided, Yiu Ping Fong and another v Lam Lai Hing is authority that sufficient secondary evidence will suffice. That will be so even though at common law, the Vendor is obliged to provide the original 1991 Assignment.

81. But if that is so, is it fair to the purchaser? Because, if at the showing of title stage, the original or a certified copy is necessary, the purchaser will not in turn be able to comply with s.13(1). How does that stand with Chitty L.J.'s insistence that the secondary evidence should be clear and cogent "so that he may pass on the title in the ordinary way in the market to a purchaser or to a mortgagee". It seems to me illogical to conclude that secondary evidence is admissible on completion but not at the showing of title stage. Though on the facts of Yiu Ping Fong, it would not arise because the vendor was able to produce a certified copy. But it seems to me the logical effect of Chan Kam Sing v Lam Ping Ping Grace is that secondary evidence is not admissible (apart from under s.13(2)) at the showing as well as the giving of title stage. Were it otherwise, then the purchaser will not in turn be able to comply with s.13(1).

82. Bearing in mind the judgments of Woo J, Godfrey J., Yuen J. and Dep. Judge Chung, I am of the view that I am entitled to find that secondary evidence of the Power of Attorney is admissible.

83. I have come to this conclusion with regret. That is because the consequence is that the purchaser plaintiff will not be able to recover the deposit paid. On the existing state of the authorities, the Plaintiff's legal advisers had no choice but to advise the Plaintiff that acceptance of secondary evidence may affect the title. As it is, I have come to a contrary decision. I hope this judgment will explain to the Plaintiff how the law on the subject is uncertain. Unfortunately, it will provide little consolation to the Plaintiff that although the requisitions were rightly raised, he should have to bear the consequence of an adverse decision by me. I can only hope that the uncertainty will be cleared up by a higher court as soon as possible.

84. The Plaintiff's claim is dismissed. I regret to say that costs must follow the event. I made an Order Nisi accordingly.

Representation:

Chung Boey instructed by Messrs. Lam & Lau for Plff.

Diana Cheung instructed by Messrs. Chong, So & Co. for Deft.

Remarks:
On appeal by the Plaintiff to the Court of Appeal: By majority, appeal allowed. Please refer to judgment CACV000240/1999.