Yeung Kong v. Wong Pak Chaw
Read the full judgment text of HCMP 1305/1998 on BabelCite. This High Court CFI judgment was delivered on 12 November 1998.
1. The Plaintiff took out an Originating Summons in which the following orders are sought :
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HCMP001305/1998 HCMP 1305/98 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE MISCELLANEOUS PROCEEDINGS NO.1305 OF 1998 -------------
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------------- Coram : Hon Nguyen, J. in Chambers Dates of Hearing : 16 and 17 July 1998 Date of Handing Down Judgment : 12 November 1998 -------------------------- J U D G M E N T -------------------------- 1. The Plaintiff took out an Originating Summons in which the following orders are sought :
Background 2. By an Agreement for Sale and Purchase dated 29th October 1997, the Plaintiff as Vendor agreed to sell, and the Defendant as Purchaser agreed to purchase the Property situated in Yuen Long and registered in the Yuen Long New Territories Land Registry as the Remaining Portion of Subsection 1 of Section K of Lot No.3719 and Subsection 1 of Section L of Lot No.3719, all in Demarcation District No.104 at the consideration of HK$12,693,338. The sale and purchase was due to complete within three months from 29th October 1997. 3. By a letter dated 31st October 1997 from Ko & Chow ("K&C") on behalf of the Defendant, a total of 14 requisitions were raised. In subsequent correspondence, K&C acknowledged that some of the 14 requisitions had been sufficiently answered. In a letter dated 19th January 1998, the Defendant claimed that Requisition Nos.3 to 9 of the 14 requisitions had not been sufficiently answered. Requisition No.3 to 9 are the subject matters of the present proceedings. By another letter dated 3rd November 1997, K&C raised an additional requisition. It was not expressly alleged in the letter dated 19th January 1998 that the additional requisition had not been sufficiently answered. This additional requisition is also the subject matter of the present proceedings. 4. After the date due for completion, on behalf of the Plaintiff, Messrs Charles Yeung, Clement Lam & Co. ("CYCL") by a letter dated 26th February 1998 answered again the requisitions alleged to have been outstanding. By a letter from K&C dated 4th March 1998, K&C maintained its view that the Plaintiff had failed to answer all the requisitions satisfactorily, but indicated that the Defendant was prepared to argue his case on the basis of the Plaintiff's answers contained in the said letter dated 26th February 1998. On 26th March 1998, the present Originating Summons was taken out. Nature of the requisitions alleged to be outstanding 5. In respect of the requisitions alleged to be outstanding, it is submitted by the Plaintiff that :
The requisitions Requisition No.3 6. This was how this requisition was worded in K&C's letter of 31st October 1997 :
In the letter of 19th January 1998, this was stated :
In CYCL's reply dated 26th February 1998, it was stated that the three words were merely different transliteration of the same Chinese word. The Memorials in question (1) Memorial 18023 : (2) Memorial No.37051 : (3) Memorial No.37573 I am satisfied :
I am therefore satisfied that despite the three different ways of spelling the name of the company concerned, they are one and the same company. 18023 was when Wing Hing Company purchased the land, and Memorial 37573 is when the same company sold the land to another party. The lease, the subject matter of 37051, was surrendered on 1st November 1921 and it was stated in the Memorial 50437 that the lessor was Wang Hing Company (T) Yeung Chuk Cho of Yuen Long. The land surrendered was exactly the same as that which was leased on 7th September 1917, i.e. D.D.104, Lots 3719, 3722 and 3723. In Kan Wing Yau and Another v. Hong Kong Housing Society [1988] 2 HKLR 187, it was held by the Court of Appeal that "the obligation on the vendor to prove good title meant that the title proved must be one which can at all times, and in all circumstances, be forced upon an unwilling purchaser in an action for specific performance. The court would not force a doubtful title on a purchaser. A doubtful title was one which would expose the purchaser to risk or hazard. The court must be satisfied beyond reasonable doubt that the purchaser will not be at risk of a successful assertion against him of the incumbrance. It was only if the blot on the title were purely theoretical and not a practical blot that it could be ignored." I am satisfied that this requisition was not justified. Requisition No,4 7. In K&C's letter dated 31st October 1997, this requisition was worded as follows :
In K&C's letter of 19th January 1998 this requisition was worded as follows :
8. In CYCL's reply dated 26th February 1998, it was stated that :
Conclusion 9. This requisition relates to why the lease which was the subject of Memorial 37051 dated 7th September 1917 was on 1st November 1921 surrendered to the lessor Wang Hing Company when by that time the lessor had already sold the land to Chiu Ying Lun and Chiu Fu Lun. When the lessor sold the land on 7th January 1918 via Memorial 37573, the sale was subject to the lease. The new purchasers, Chiu Ying Lun and Chiu Fu Lun, on 28th October 1921, via Memorial 50416 in turn sold the land to another purchaser, but this agreement for sale was not subject to the lease. It was contended on behalf of the Defendant that once Wang Hing sold the Property on 7th January 1918, it ceased to be the landlord, and privity of estate after that sale would be between the tenant and the real owner. The Defendant asks the question :
The Defendant contends that the fear is not whether the three tenants can now make a claim. The Defendant's concern is why more than 31/2 years after the company sold the land, the land was surrendered to the company? Did the company, after the sale, acquire some interest in the land? 10. On behalf of the Plaintiff, it is submitted that the three lessees are not entitled to assert any claim for any interest in the Property :
I am satisfied that on the documents, there is nothing which casts any doubt on the Plaintiff's title. There are no documents to suggest that on the date of the surrender of the lease, namely 1st November 1921, Wang Hing Company was still the owner of the land or that it had acquired some interest in the land. I am satisfied that Wang Hing Company sold the Property subject to the lease to Chiu Ying Lun and Chiu Fu Lun on 7th January 1918. The new purchasers, on 28th October 1921 sold the Property, not subject to the lease, to Tong Yip Co., trustee Mok Oi Tong and Li Chak Hing. I find that this objection by the Defendant was unjustified and in any case was sufficiently answered by the Plaintiff. Requisition No.5 11. In K&C's letter of 31st October 1997, this requisition was worded as follows :
The Memorials 12. The re-assignment via Memorial 61936 is dated 9th January 1925. The re-assignor is stated to be "Leung Kap Kan of No.____ Connaught Road Central", and the re-assignee is stated to be "Tong Ip Co. Trustees Mak Oi Tong, Li Chak Hing, Chan Kwong Tsai, Tang King Shang, Mak Kwai Tak, all of No.41 Po Tak Street. The land affected are Lot Nos. 3719, 3720, 3721, 3722, 3723, 3973 and 3974 in D.D. 104. The consideration is $15,000. On 16th January 1924, a mortgage was registered via Memorial 58719. The mortgagor is stated to be Tong Ip Co., trustees Mak Oi Tong, Li Chak Hing, Chan Kwong Tsai, Tang King Shang and Mak Kwai Tak, all of No.41 Po Tak Street. The mortgagee is stated to be Leung Kai Pan of No.31 Connaught Road, Central. The premises affected is the same as the re-assignment. The consideration is the same, namely $15,000. 13. It is submitted on behalf of the Defendant that the mortgage as evidenced by Memorial 58719 could not have been properly discharged by the Re-assignment Memorial 61936 for the following reasons :
14. I am satisfied, having regard to the similarity in 1) the consideration; 2) the names of the re-assignee and the mortgagor; 3) the names of all of the trustees in both documents; and 4) the description of the land or premises affected in both documents, that 'Leung Kap Kan' is the same 'Leung Kai Pan' in the mortgage signed on 16th January 1924. I am satisfied that the re-assignment dated 9th January 1925 is a good and valid re-assignment of the mortgage dated 16th January 1924. 15. If the re-assignment was not a proper discharge of the mortgage, then in any case the right to claim under the mortgage is statute-barred by virtue of s.19(1) of the Limitation Ordinance, Cap.347 where the period of limitation is 12 years from the date when the right to receive the money accrued. 16. There was some discussion on what the phrase "the right to receive the money" meant. Mr Lee, for the Defendant, submits that if a mortgage had no time for repayment, as this mortgage did, then that is only repayable upon demand. He relies on Fisher and Lightwood on the Law of Mortgage, page 45, which says :
He also relies on Chitty on Contracts, 27th Edn., paragraph 36-210, which says :
He submits that there is no evidence of any demands having been made, so the right to sue may still be alive because the limitation period may not have begun to run. 17. Mr Yeung, for the Plaintiff, accepts that but submits that time starts to run from the accrual of the right to receive the money. He relies on Chitty on Contracts, 27th Edn., paragraph 28-024 which says :
He also relies on Hornsey Local Board v. Monarch Investment Building Society [1889] XXIV QBD 1 to submit that a right to receive money is not the same as a right to enforce payment. He submits that the right to receive the money accrued as soon as the mortgage was signed and under the Limitation Ordinance, that right expired 12 years from the date of the mortgage. 18. In my judgment, time began to run from the date that the loan was made and therefore, the lender's right to recover under this mortgage is statute-barred and is no longer enforceable. Requisition No.6 19. In K&C's letter of 31st October 1997, this requisition was worded as follows :
In K&C's letter of 19th January 1998, this requisition is worded as follows :
In CYCL's letter of 26th February 1998, the reply was :
The answer then sets out some memorials and it carries on :
From the papers, there appears to be a total of 16 memorials where the name of Tong Yip Co. has had different variations as follows :
Mr Lee who appears for the Defendant has accepted that 'Tong' denotes the same entity as 'Tung' and 'Ip' has the same Chinese word as 'Yip', and 'Rung' is the same Chinese word as 'Tung'. He submits that the difficulty is with 'Co.' and 'Tong'. He said that the suggestion was made by the Plaintiff that at one stage the name was changed from 'Co.' to 'Tong' as 'Co.' was crossed out and changed to 'Tong' in three memorials. He said that the Defendant's question is why the rest of the memorials still had 'Co.' in the name of one of the parties, and these documents are memorials which start from 18th January 1923 and end with the memorial dated 16th January 1924. The change from 'Co.' to 'Tong' was last made on 12th December 1921, but as from the next memorial, 18th January 1923, the word 'Co.' is again used. The last time it was used was 16th January 1924. Then on the same day, in another memorial, the name 'Tong' is again used. In a memorial dated 16th January 1924, 'Co.' is crossed out and 'Tong' is written above it. In a memorial dated 9th January 1925, 'Co.' is used and thereafter in all the memorials which follow, it is 'Tong' which is used. Mr Lee submitted that it seemed that the name was changed back and forth. He did not accept that they refer to the same company. He accepted that 'Tong' meant a place for ancestral worship, but asked the question how can a company be an organization for ancestral worship because prima facie a company is one which is run for business. He said that even if the preceding names 'Tong Ip' are the same, it did matter whether it was 'Tong' or 'Co.' which followed. He said an agreement for sale, Memorial 50416 dated 28th October 1921, was the only Memorial which only had two trustees' names in it as opposed to all the other memorials where all five trustees' names plus their address (133 Bonham Strand) were mentioned. He said that the memorials which were signed from the date the property was first purchased to the date when it was subsequently sold by Tong Yip Tong may indicate that someone else, other than Tong Yip Tong, was the owner. He said that the Defendant was not saying that the mortgagors may turn up now and make a claim, they were simply saying that because in some instances 'Co.' was the mortgagor, it might have had some interest in the land because otherwise how could it be the mortgagor. He submitted the fact that a solicitor acted in a particular transaction meant that 'Co.' was put in intentionally and that solicitor was satisfied that 'Co.' had an interest in the land and therefore could be the mortgagor. He submitted there was a reasonable doubt whether the company had any interest in the land. 20. After carefully analysing all the memorials in question, it is clear that on 28th October 1921, Tong Yip Co. signed an agreement for sale and purchase of the Property. On 12th December 1921, Tong Yip Co. purchased the Property. After the purchase, the name of the entity was changed from Tong Yip Co. to Tong Yip Tong. On 2nd July1929, the Property was sold to another person by Tung Yip Tong. In my judgment, therefore, on 12th December 1921 the entity acquired the title to the Property and on 2nd July 1929, the same entity conveyed good title to the Purchaser. All the memorials in between the purchase and the sale mentioned related to mortgages, second mortgages and redemptions. I am satisfied that 'Tong' or 'Tung' Ip Co. was the same entity as 'Tong' or 'Tung' Ip Tong. I therefore find that the Defendant's requisition was unjustified and in any case was sufficiently answered by the Plaintiff. Requisition No.7 21. In K&C's letter of 31st October 1997, this was worded as follows :
In K&C's letter of 19th January 1998, this was the query :
22. In CYCL's letter of 26th February 1998, their reply to the requisition was that as to any seeming discrepancy between the name of the then owner, they repeated what was said by them earlier on, namely, that Tong Ip Co. and Tong Ip Tong were the same entity. They made the point that in the Redemption Memorial No.72689 dated 24th February 1929, the phrase following the five names "as managers of Tung Ip Tong" was omitted and that this was the result of a clerical mistake which should not affect the true and clear intention of the parties. In the alternative, CYCL made the point that if because of the clerical mistake, the mortgage registered by Memorial 64072 dated 27th January 1926 had not been duly discharged, they submitted that the mortgage, because of the long lapse of time and the expiry of the relevant limitation period, was no longer subsisting or capable of taking effect and therefore the requisition constituted no valid objection to the title of their client. 23. Mr Yeung, for the Plaintiff, in his oral submission submitted that the five managers would be estopped from raising any claim because they subsequently sold the Property on behalf of the Tong as managers when on 2nd July 1929, they sold the Property as managers of the Tong. Mr Yeung submitted that the natural inference was that at the time of the redemption, the sum which was loaned was due and accrued so that time under the Limitation Ordinance would have begun to run. 24. Mr Lee submitted that the very fact that the mortgage had been redeemed by the five persons in their personal capacity suggests that they, in their personal capacity, had acquired an interest in the Property. He relied on Fisher and Lightwood's Law of Mortgage, 10th Edn., page 554 which reads :
Mr Lee also submits that in the mortgage, as evidenced by the mortgage memorial, there was no due date for repayment of the mortgage. Instead there was a provision for recurring payment of interest. He therefore submitted that the mortgage had not been time-barred. 25. After the redemption on 24th April 1929, the Property was on 2nd July 1929 sold to another purchaser. The memorial mentioned the five persons and mentioned them as managers of Tung Yip Tong. The sale was effected and was not subject to any incumbrances. In my judgment, the omission in the redemption memorial to mention the five persons as acting as managers of the Tong as opposed to acting in their personal capacities was a clerical mistake and the redemption was a proper redemption of the mortgage signed on 27th January 1926. I also find that the five managers, if they had made any claims adverse to the Property, would have been estopped from making such a claim. I also find that even if the mortgage had not been properly redeemed, it would have been statute-barred because of the long lapse of time which elapsed from the mortgage in January 1926. 26. I find, as I found in relation to Requisition No.5, that the date when the right to receive the money accrued was the date of the mortgage, and, therefore, the limitation period would have expired 12 years from that date. Even if the date when the right to receive the money secured by the mortgage accrued after the date of the mortgage because of some provisions in the mortgage, I find that by the time these requisitions were raised in 1997 and 1998, the period of 12 years under the Limitation Ordinance had long expired. I therefore find that this requisition was unjustified and in any case was sufficiently answered by the Plaintiff. Requisitions No. 8 and 9 27. In K&C's letter of 31st October 1997, this was worded as follows :
In K&C's letter of 19th January 1998, the following was said :
28. In CYCL's letter of 26th February 1998, the following answer was made :
The Memorials 29. Lot Nos.3719, 3720, 3721, 3722, 3723, 3973 and 3974 in D.D.104 were sold via an instrument dated 2nd July 1929 by Mok Oi Tong, Li Chak Hing, Chan Kwong Tsai, Tang King Shang and Mok Kwai Tak as managers of Tung Yip Tong and the purchaser was Li Ching Kut. This sale was registered via Memorial No.72730. The second memorial shows that on 6th February 1934, Lot Nos.3719, 3720, 3721, 3722, 3723, 3973 and 3974 in D.D.104 were leased by Li Hok Ling alias Li Pun Sim as the lessor to Hing Wo Company as the lessee with Yim Kam Wo as manager. The lease was for a term of 40 years from 1st January 1934 and was registered by Memorial 89190. On 22nd February 1937, the same lots were surrendered via Memorial 99199. In the Memorial, it was stated that the instrument was a surrender of lease dated 6th January 1934. The lessee was stated to be Hing Wo Company and Yim Kam Wo. The lessor was stated to be Li Hok Ling alias Li Pun Sim. 30. The Defendant submitted that there was no explanation from the Plaintiff as to why the lessor was otherwise than the owner of the Property. It was submitted that these memorials, being ancient documents, were evidence of acts of ownership and thus evidence of title to the Property. As such, it was submitted there was doubt over whether Li Hok Ling alias Li Pun Sim had had any interest in the Property. 31. Mr Lee relied upon Halsbury's Laws of England, Vol.17, para.135 which says :
He also relied on the case of James Thomson Bristow and J.G. Livingstone v. Robert Cormican and C. Nelson (1878) 3 AC 641 where at page 653, Lord Cairns, LC, said :
Mr Lee submitted that the concern of the Defendant was not whether the lease was surrendered, but that the lease was an indication that the lessor might have ownership in the land. He said that the court had to look at all the requisitions and had to apply the "beyond a reasonable doubt" test to the risk of anyone coming to make a successful claim against the Purchaser. 32. On behalf of the Plaintiff, it was submitted that there was no legal principle to the effect that the lessor of a property must also be the registered owner thereof. It was submitted that the lessor might have been for example the attorney of the owner. 33. Mr Yeung relies on Woodfall on Landlord and Tenant, paragraph 11.269 which says :
Mr Yeung submitted that the lessor might not have title to grant the lease or there might have been some arrangement between the owner and the lessor. He submitted that there was no risk to the intended purchaser. He submitted that the lease had been surrendered so there could be no adverse claims from the lessor or the lessee. He said that the lessor might himself have been a lessee or a licensee, or he might have no interest at all. He said that in the last example, the lease would still be valid between the lessor and the lessee and if the lessee is evicted by the true owner because the lessor had no title, then the lessee could sue the lessor in damages. Conclusion 34. I am satisfied that the lease which was entered into on 6th February 1934 was duly surrendered by the lessee to the lessor on 22nd February 1937. I am satisfied that the sale to Li Ching Kut on 2nd July 1929 was a valid sale and that the lessee Hing Wo Company and the lessor Li Hok Ling can have no legitimate or valid grounds to make an adverse claim against the Property. I therefore find that the requisition is unjustified and in any case was duly and sufficiently answered by the Plaintiff. Additional requisition 35. In K&C's letter of 3rd November 1997, the requisition was worded as follows :
36. The Defendant in his submission repeated the submission relating to the six requisitions. The Defendant submits that whilst the Plaintiff contends that the two were the same entity, no explanation has been given by the Plaintiff as to why in the first memorial, two persons were named as trustees while in the second memorial, five were named as managers. The notations at the top of the two memorials which the Plaintiff relied upon were :
The Defendant contends that the notations at the top of the two memorials showing cross reference with each other may only be said to show that the transaction under Memorial 50623 was related to the one under Memorial 50416, but do not show that the purchaser referred to in the two Memorials was the same entity. Conclusion 37. I am satisfied that the words 'Yip' and 'Ip' are different transliteration of the same Chinese word. I am also satisfied, as I found above when dealing with the six requisitions, that the Tong Yip Co. was the same entity as Tong Ip Tong. This is fortified by the two cross reference notations in the two memorials and also by the fact that two of the trustees of Tong Yip Co. are mentioned by name and these two names are the same as two of the five names mentioned as managers of Tong Ip Tong. The address given of the two trustees in the first memorial and that of the five managers in the second memorial was the same in each case. I am therefore satisfied that this requisition was unjustified and in any case was sufficiently answered by the Plaintiff. Relief 38. In the circumstances, I grant to the Plaintiff the first two declarations sought by him in his Originating Summons. As agreed between the parties, there will be no order as to costs. I make no other order.
Representation: Mr Keith Yeung, inst'd by M/s Charles Yeung, Clement Lam & Co., for the Plaintiff Mr T.M. Lee, inst'd by M/s Ko & Chow, for the Defendant |