Re Chan Pak Ho v. Standard Chartered Asia Ltd

HCMP000745/1987

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HEADNOTE

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Conveyancing - Vendor and Purchaser Summons - S. 12 of Conveyancing and Property Ordinance, Cap. 219 - Description of parcels - Assignment by company in liquidation - Extent to which liquidators should join in the assignment - Power of Attorney - Whether Attorney empowered to execute deeds - Re-delivery of a deed - Missing Power of Attorney - S. 13 of Conveyancing and Property Ordinance

The Court accepted the present vendor's argument that the words "X, the Attorney of the Vendor" amounted to a "............. statement and description of any fact, matter or party contained in any document of title, mortgage, declaration or power of attorney relating to any land and dated or made not less than 15 years before the contract of sale of that land" within the meaning of S. 13(4) of the Conveyancing and Property Ordinance, Cap. 219, and further accepted that such statement or description was sufficient evidence of their truth for the purposes of any question as to proof of title. However, the Court was not prepared to assume that the Attorney was acting within the scope of his authority when he executed the assignment in 1967, with the result that the present vendor failed to show a good title.

IN TIE HIGH COURT OF JUSTICE

MISCELLANEOUS PROCEEDINGS

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BETWEEN

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BETWEEN

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Coram: Hon. Rhind, J. in Chambers

Dates of hearing: 21st-22nd & 25th May, 1987

Date of delivery of judgment: 22nd June, 1987

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JUDGMENT

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1. In exercise of its powers as a mortgagee, Standard Chartered Asia Ltd. ("Standard Chartered") is selling off flats and carparking spaces in the building known as No. 3, Stubbs Road (formerly known as No. 2, Shiu Fai Terrace). On the 3rd April 1987, Standard Chartered entered into a written sale and purchase agreement with Mr Chan Pak Ho ("Mr Chan") to sell him apartment "8A".on the 8th Floor together with two carparking spaces at the price of HK$2,550,000. 10% of the purchase price was paid as deposit. On the same day, Shiu Luen Hong Limited ("Shin Luen") entered into a written sale and purchase agreement with Standard Chartered to buy apartment 10B on the 10th Floor and a carparking space for HK$2,394,750.  Again, the deposit was 10%.

2. The form of the sale and purchase agreement was identical in both cases. Messrs Deacons acted as solicitors for the vendor in both cases, whilst Messrs K.K. & Winston Chu acted for both purchasers. The purchasers solicitors have raised four requisitions on title which have not been answered to their satisfaction by the vendor's solicitors. For the purpose of determining whether the vendor has shown a satisfactory title, the purchasers have each taken out a vendor and purchaser summons under Section 12 of the Conveyancing Ordinance Cap. 219. By consent, those two vendor and purchaser summonses are being heard together since the title to the two properties is identical.

3. Completion of both contracts was originally set for the 1st May 1987 but has now been postponed until 7 days after judgment or 7 days after the determination of any appeal, whichever is later.

4. I will now deal with each of the requisitions in turn.

I.    THE PARCELS

5. The description of the land from Mr Chan's contract will be chosen to illustrate the point in issue. Exactly the same considerations apply in relation to the contract under which Shiu Luen bought. The following is how the property was described :-

"(a) Description and address :

The exclusive right and privilege to hold use occupy and enjoy All That Apartment "8A" on the 8th Floor and All Those Car Parking Spaces Nos. "24 & 25" on Carport No. 2 of the messuages, erections and buildings on all that piece or parcel of ground situate at No. 3 Stubbs Road (formerly known as No. 2 Shiu Fai Terrace) ("the Building") Hong Kong shown and coloured Pink on the 8th Floor Plan and Carport No. 2 Plan annexed hereto respectively (''the Apartment and Car Parking Spaces").

(b) Lot number, section and undivided shares :

All Those 12 equal undivided 282nd parts or shares of and in All That piece or parcel of ground situate at No. 3 Stubbs Road (formerly. known as No. 2 Shiu Fai Terrace) Hong Kong and registered in the Land Office as the Remaining Portion of Section A of Inland Lot No. 2302 And Extension Thereto ("the Land") and of and in the Building."

6. The problem arises solely in relation to the words "And Extension Thereto".

7. It is common ground that the vendor does not have title to any part of the extension to Inland Lot No. 2302. The purchasers have not in any way been misled by the reference to "And Extension Thereto". There is no suggestion of any doubt in the mind of the purchasers as to the physical layout of the ground comprising No. 3 Stubbs Road. On the east side, that piece of land is bounded by Stubbs Road itself, and, on the west side, by No. 2 Stubbs Road. Or. the west side of the site comprising No. 2 Stubbs Road lies the strip of land entitled to the description "And Extension Thereto".

8. As the purchasers are not claiming to have bought the land known as "And Extension Thereto', which is not even contiguous to No. 3 Stubbs Road, they merely ask now, if I understand their counsel correctly, that the reference to "And Extension Thereto" should be deleted from the title for the sake of eliminating all possible ambiguity.

9. The vendor, in the contract, has merely followed the description for No. 3 Stubbs Road given by its predecessors in title in the documents registered in the Land Office. It is difficult to see how the purchasers have any cause for complaint against the vendor on account of the way in which it has described the land in the contract. The vendor's description is literally correct. This is a piece or parcel of ground situate at No. 3 Stubbs Road and it is registered in the Land Office as "the Remaining Portion of Section A of Inland Lot No. 2302 And Extension Thereto".

10. It is only by probing into the history of this title that one begins to see how this faintly ludicrous situation has arisen of including a reference to "And Extension Thereto", when it is abundantly clear that the extension now has nothing whatsoever to do with No. 3 Stubbs Road.

11. What are now known as No. 2 and No. 3 Stubbs Road were at one time to the common ownership of Kan Ip Shi Pik Han ("Madam Kan") as one piece of land. That piece of land was known as "Section A of Inland Lot No. 2302 and Section A of Extension to Inland Lot No. 2302". She acquired that land by an assignment dated the 14th November 1940 (Memorial No. 167280), which, incidentally, forms the root of title (together with the Crown Lease) for the present contracts of sale and purchase.

12. On the 1st April 1952, Madam Kan sold off No. 2 Stubbs Road (which was described as - "Subsection 1 of Section A of Inland Lot No. 2302 and Section A of Extension To Inland Lot No. 2302) to Leung Wai Fong and Chan Wai Chun. Memorial No. 210302 relates to that. Thus, Madam Kan was then left merely with the Remaining Portion of Section A of Inland Lot No. 2302, but she no longer had anything to do with Section A of Extension to Inland Lot No. 2302. Nonetheless, when the time came to make an assignment of that Remaining Portion of Section A of Inland Lot No. 2302 - by Madam Kan's mortgagee, the Bangkok Bank Limited ("the Bangkok Bank") - the land was described as "Remaining Portion of Section A of Inland Lot No. 2302 and Extension". That is how it has been described ever since.  The Land Office appears to approve of this method of description, but, in my view, describing the land in this way introduces an unnecessary element of ambiguity.

13. So as to avoid any misunderstandings for the future about whether the "Extension" might form part of the parcels of No. 3 Stubbs Road, I would suggest that the words" And Extension Thereto" should be omitted from future assignments, and should not feature in the Land Office Registers. I express that conclusion somewhat tentatively since my attention has been drawn to the existence of several other titles sharing the characteristic of the present title, namely, a reference to "And Extension Thereto" when the parcels have nothing to do with that extension any longer.

14. I was taken on an historical expedition to the time when Mr Kan Hung Chu purchased the whole of Inland Lot No. 2302 under Conditions of Sale on 4th October 1920. It was demonstrated to me how he obtained extensions to that Lot on the northwest and southwest sides during the 1920's.Inland Lot No. 2302 became carved up into several sections including Section A with which the present case is concerned. Some of those other Sections e.g. B, are not contiguous to any of the extensions, but the parcels of Section B, for example, nonetheless include a reference to "And Extension Thereto".   Because there might be implications for owners of other Sections in Inland Lot No. 2302 - and I have not heard their view point - I would not regard it as appropriate for me to make a formal declaration that the words "And Extension Thereto" should be excluded from the title to the land forming the subject matter of the current application. Neither would I regard it as appropriate formally to order rectification of the title. Nonetheless, I do hope that the Land Office will see its way to registering the assignments of the present purchasers without any reference to "And Extension Thereto".

15. Although counsel for the purchasers has succeeded in highlighting the absurdity of including a reference to "And Extension Thereto", this is a far cry from showing that there is any defect in the vendor's title on this score. The words "And Extension Thereto" are vestigial, and do not stand in the way of the vendor making title to the land which it agreed to sell to the purchasers.

16. On the view I take, the vendor's solicitors have answered this requisition adequately.

II.    ASSIGNMENT BY A COMPANY IN LIQUIDATION

17. One of the essential links in the chain of title was created on 29th April 1983 when Belper Company Limited (in voluntary liquidation) ( "Belper") assigned No. 3 Stubbs Road to Dashbright Company Limited ("Dashbright"). Belper (one of the vendor's predecessors in title) appointed Mr John McNie and Mr Michael Middleton to be liquidators as the result of a special resolution passed at an extraordinary general meeting of Belper on 31st December 1982 to the effect that the company should be wound-up voluntarily.

18. Through their requisitions, the solicitors for the purchasers seek to fault the assignment from Belper to Dashbright.

19. An exercise before me was carried out by comapring the assignment made by Belper with the model "Assignment of leasehold by a company in voluntary liquidation" to be found at p. 1616 of Volume 19 of the Encyclopedia of Forms and Precedents.

20. Accoridng to the model form, the liquidators should actually join in the assignment as parties, but that never happened with the Belper assignment. On the view I take, it was unnecessary to join the liquidators in as parties. The appointment of liquidators did nothing to divest Belper of its property.

21. Support for the view that it is unnecessary for liquidators to be joined in as parties to assignments is to be found in an article in the Law Society's Gazette for May 1970 at p. 329. A similar view is expressed in Halsbury's Laws of England Vol. 42 para. 28, although the learned author does go on to observe that the liquidator invariably joins in the conveyance to show his concurrence in the sale and to covenant against incumbrances.

22. While I do not doubt that it is better conveyancing practice to join liquidators in as parties to an assignment, I am, nonetheless, of the view that failure to take that step will not by itself impede the whole legal and beneficial estate from passing by the assignment

23. A second way in which the Belper assignment is said to be wanting, according to the purchasers' counsel, is that in the model conveyance already referred to from the Encyclopedia of Forms and Precedents, there is a reference to "the company .......... acting by the liquidators hereby assigns ..........", whereas there is no equivalent in the Belper assignment. I do not regard the omission of the words "acting by the liquidators" from the Belper assignment as significant. All that matters is that the liquidators of Belper did in fact concur in the assignment. The fact that the liquidators, Mr McNie and Mr Middleton, signed the assignment when the common seal of Belper was affixed to the assignment shows beyond all doubt that those two liquidators concurred in that sale.

24. That conveniently leads into the purchasers' third ground of complaint about the Belper assignment when compared with the model from the Encyclopedia of Forms and Precedents. The model indicates that not only should the liquidators sign when affixing the seal of the company, but they should also sign end seal the conveyance in their capacity as liquidators. Whether the liquidators should sign (apart from when affixing the seal) is directly linked to the question whether the liquidators needed to be parties to the conveyance. As I have already expressed the view that it was unnecessary for the liquidators to be parties, it would be inconsistent for me now to hold that they should sign.

25. With regard to the liquidators signing for the purpose of affixing the company seal, I do not regard it as essential that the liquidators need to be actually present when the seal is affixed. The model conveyancing form suggests otherwise when it notes "Seal of company in presence of liquidators". On the view I take, the liquidators stand in the shoes of the directors when it comes to affixing the company seal, so that if the liquidators follow the requirements of the company's articles about how the directors should affix the seal, the liquidators cannot be faulted.

26. Article 71 of Belper has the following to say about the seal:-

"The Directors shall provide for the safe custody of the Seal, and every document required to be sealed with the Seal of the Company shall be deemed to be properly executed if sealed with the Seal of the Company and signed by the Managing Director or any two Directors of the Company".

27. Nothing is said there about directors having to be present when the seal was affixed. What the assignment from Belper to Dashbright shows in relation to execution is that after the words "Sealed with the common seal of the vendor and signed by John McNie and M. Middleton", there appear the signatures "J. McNie" and "M. Middleton". With liquidators substituting for directors, that mode of execution fully conformed with Belper's articles.

28. A further indication that the liquidators concurred in the sale is that they were the ones to acknowledge receipt of the purchase money. Strictly speaking, it should have been Belper itself, rather than the liquidators, which acknowledged receipt of the purchase price, since the land being sold was vested in Belper. However, I regard that point as the merest technicality, and do not see how Belper (or anyone else, for that matter) could complain at the money being received by Belper's liquidators when that company was in liquidation.

29. It is clear that there was a departure from good conveyancing practice when the liquidators failed to give Dashbright the usual liquidators' covenant about not having encumbranced the property. The absence of such covenant does not amount to a defect of title, in my opinion.

30. Although perhaps less than ideal from a meticulously careful conveyancer's viewpoint, the assignment from Belper to Dashbright nonetheless manages to do the trick by well and truly assigning both the legal and beneficial interest in 3 Stubbs Road to Dashbright free from encumbrances.

31. I am, accordingly, satisfied that the vendor's solicitors have adequately answered the purchasers' requisitions about the Belper assignment.

III.    THE POWER OF ATTORNEY FROM BANQUE INDOSUEZ

32. Belper, which, as already mentioned was one of the vendor's predecessors in title, became the registered owner of the Remaining Portion of Section A of Inland Lot No. 2302 on 20th December 1975 (Memorial No. 1227822 refers).  Belper assigned all that land by way of mortgage to Banque Indosuez on the 17th October 1979. That assignment by way of mortgage was registered under Memorial No. 2330415. After Belper had paid off the mortgage, Banque Indosuez purported to reassign the land to Belper.

33. That purported reassignment was made by a deed dated the 5th June 1982, signed, sealed and delivered by a Mr Thomas Houang and a Mr Lennon T.K. Lun ("the Attorneys") in purported exercise of a Power of Attorney conferred on them by Banque Indosuez. (A purported reexecution of the reassignment was performed in the same way by Mr Thomas Houang and Mr Lennon T.K. Lun on the 18th October 1982 but nothing turns on that.)

34. The purchasers' solicitors, through their requisitions, dispute that the Power of Attorney pursuant to which Mr Houang and Mr Lun purported to act, ever conferred authority on them to execute (or re-execute) the reassignment.

35. There is no dispute on the part of the purchasers that the Attorneys were authorised to receive the repayment of the mortgage monies on behalf of Banque Indosuez; the dispute relates to whether the Power of Attorney authorised the Attorneys to reassign the legal title back to Belper. The vendor's counsel did not dispute the proposition that an attorney cannot execute a deed unless he is appointed attorney by a deed and the Power of Attorney itself authorises him to execute a deed.

36. The Power of Attorney is in a form which presents obstacles for anyone seeking to investigate the present title. Banque Indosuez has its head-office in Paris. The Power of Attorney was issued there in French. Unfortunately, only some parts of the French have been translated into English for the purpose of trying to make good the present title.

37. A copy of the Power of Attorney in French is to be found exhibited as "HL-3". The first two pages of the French have not been translated. Nor has the final page (p.13). The only parts translated appear at pages 8 to 12 of the exhibit. The translated parts show the powers which the Attorneys enjoy.

38. As I have already indicated, the purchasers concede that the Attorneys were empowered to receive the repayment of the mortgage monies. It is urged upon me on behalf of the vendor that one particular power conferred on the Attorneys authorised them to make a reassignment under seal. I set out the text of the English translation of that power -

"To take and detain any sureties or guarantees by way of attachments, garnishments, oppositions, collateral security, mortgage registrations, or any equivalent measures, to give replevin for all attachments or oppositions, for all and any registrations of mortgage guarantees, surety bonds, privileges, liens and, or preferential rights, collateral, sequesters of property, distresses and execution by sale of debtor's chattels or other equivalent guarantees, to consent to any transfers of anteriority, the whole of this with or without verification of payment, to agree to all and any subrogations."

The vendors have now come up with a fresh translation of that power, furnished by a French-speaking solicitor who acts for Banque Indosuez. Accord to her, "........ the French text confers upon the Attorney the power to lift all registration of mortgages with or without acknowledgement of payment".

39. A later passage in the English translation needs also to be considered for the purpose of determining whether the Attorneys have been clothed with power to execute a reassignment under seal. The passage I have in mind reads "For the above purposes, to pass and sign all and any legal instruments, to elect domicile in France, in the Overseas Territories and Abroad, and to nominate and appoint others for specific operations and for a limited period". (See Exh. 'HL-3' at page 11 ).

40. Although no point was taken about this on behalf of the purchasers, I tend to doubt whether one could even say from the English translation that this Power of Attorney was granted under seal. Perhaps the somewhat illegible mark at p. 13 of Exhibit "HL-3" is meant to be the seal of Banque Indosuez, but one cannot be sure. Even assuming that the Pourer of Attorney was itself under seal, nowhere do I find power to the Attornies to execute documents under seal spelt out with any precision.

41. Hong Kong, like England, construes Powers of Attorney strictly. On such translated material as has been presented to me, I am not prepared to hold that this Power of Attorney from Banque Indosuez authorised Mr Houang and Mr Lun to execute any deeds such as the reassignment to Belper.

42. In case the vendor failed in its contention that the Power of Attorney gave express authority to execute deeds, its counsel advanced an alternative argument that a re-delivery of the reassignment has now taken place, with the result that any previous lack of legal title by Belper after the reassignment has now bees cured. That supposed re-delivery is said to stem from a letter dated 27th March 1987 from Banque Indosuez to the vendor's solicitors, the operative part of which reads ".......... we hereby confirm that Mr Thomas Houang and Mr Lennon T.K. Lun were indeed the appointed attorneys of the Bank to execute the Reassignment Memorial No. 2330415 in respect of the captioned property". That letter was signed on behalf of Banque Indosuez.

43. Commenting on the attempt by Banque Indosuez to effect a re-delivery of the reassignment by its letter dated the 27th March 1987, the purchaser's solicitors wrote to the vendor's solicitors on the and April 1987 as follows:-

"We note the copy letter dated 27th March 1987 from Banque Indosuez but regret to say that the same cannot cure the defect in the Power of Attorney, namely, that no power was given to the attorneys to execute the Reassignment on behalf of the bank. Our perusal of the Powers of Attorney reveals that powers were given to the attorney, inter alia, to give receipt for discharge of debts owing to the bank but conferred no power to execute reassignments which is a totally separate act from that of giveng a receipt for discharge. As you well know the authority to an attorney to execute a deed must origionate from a deed and the letter from Banque Indosuez is insufficient to ratify the execution of the reassignment by the attorneys on behalf of the Bank."

44. I consider that extract from the purchasers' solicitors letter correctly states the reasons why the letter dated 27th March 1987 from Banque Indosuez was inadequate for the purpose of bringing about a re-delivery of the reassignment.

45. That there can, in appropriate circumstances, be a re-delivery of a deed which had previously been executed beyond the scope of a Power of Attorney, is made clear by In re Seymour Fielding v. Seymour⁽¹⁾. However, in my view, what Banque Indosuez attempted to do by its letter dated 27th March 1987 was insufficient to constitute a re-delivery of a deed. What the Banque Indosuez attempted to do was analagous to the situation described by Joyce J. at p. 480 and 481 of In re Seymour:-

"In my opinion, if Mrs. Seymour, the testatrix, had either written a letter or signed a document saying in so many words, "Know all men by these presents that I recognize the contents of that deed", and there had been no seal to the letter, that would not have sufficed to make this instrument her deed. Nor would it suffice to prove express parol authority from the testatrix to Mr. Stanley Leighton to execute this instrument as the attorney of the lady."

46. Another avenue-estoppel-is suggested by In re Seymour as a way of avoiding the consequences flowing from the Attornies not having been endowed with power to execute a reassignment.

47. No doubt, estoppel would operate admirably to prevent Banque Indosuez from disputing that Belper and those claiming through it had acquired the legal estate when the mortgage was paid off, but, as estoppel does not operate against the world at large, there would still remain the problem of any outstanding equities.

48. As the purported reassignment took place only five years ago, I do not feel it would be proper lightly to disregard the possibility of outstanding equities. I do not think that the facts and circumstances of the present case are so compelling that the Court should invoke the principle of MEPC Limited v. Christian-Edwards⁽²⁾ to the effect that the court should declare a good title because the purchasers would not be at risk of a successful assertion of equities against them. I would not want to do anything which might foster the attitude that Hong Kong is "A town where anything goes", when it comes to conveyancing. I do not think the court should bend over backwards to excuse major defects in title such as failure to convey a legal estate.

49. As I see the position, the legal estate is still vested in Banque Indosuez, but the vendor is entitled to the beneficial ownership. Provided that the vendor can get Banque Indosuez to join in a conveyance confirming that Banque Indosuez intended the legal estate to pass to Belper on reassignment, then the vendor will be able to make a good title.

50. The problem seems to be one of conveyance rather than title. For the distinction between matters of title and matters of conveyance, see Contract and Conveyance (4th edition) by J T. Farrand at p. 92.

51. On such material as there is before me, there is nothing to suggest that the vendor is likely to encounter any difficulties in getting Banque Indosuez to join in a conveyance by way of confirmation. According to Williams on Title (4th Edition) at page 565, "A good title is made when the vendor shows that he alone or with the concurrence of some person or persons whose concurrence he can require, can convey to the purchaser the whole legal estate and equitable interest in the land sold". On the view I take, the vendor could require the concurrence of Banque Indosuez in conveying to the purchasers the whole legal estate in the land in issue. Cases such as Camberwell and South London B. S. v. Hollway  ⁽³⁾, Avarne v. Brown ⁽⁴⁾ and Kitchen v. Palmer ⁽⁵⁾ cited to me by counsel for the vendor are merely illustrations of the principle that, provided a vendor can join in all the parties necessary to make a good title to the legal estate, the purchaser has no cause of complaint.

52. I am satisfied that the purchasers' solicitors have been vindicated in their requisition challenging whether the Power of Attorney from Banque Indosuez was good for the purpose of reassigning the legal estate to Belper.

53. What then is the effect of that successful challenge? At this point it becomes necessary to look at the terms and conditions contained in the sale and purchase agreements of 3rd April 1987.  In particular, I think that Clauses 10.02 and 10.03 are relevant. I set them out :

"10.02       If the Purchaser shall make and insist on any objection or requisition raised within the applicable period stipulated above, either as to title conveyance or any matter appearing on the title deeds or particulars or conditions or otherwise which the Vendor shall be unable or (on the ground of difficulty to remove or comply with) or if the title of the Vendor shall be defective, the Vendor shall notwithstanding any intervening negotiation or litigation be at liberty to annul the sale by serving a written notice of not less than 7 days to the Purchaser in which case unless the objection or requisition shall have been in the meantime withdrawn by the Purchaser or the same shall have been removed or complied with by the Vendor, the sale shill at the expiration of the notice be annulled in which case the Purchaser shall forthwith be entitled to the return of the deposit and all other monies which form part of the purchase price paid by him hereunder prior to the date of such annulment but without interest costs or compensation.

10.03       The Vendor shall show a good title to the Property and he shall at his own expense make and furnish to the Purchaser such photostatic copies of any deeds or documents of title wills and matters of public record that are in his possession as may be necessary to complete such title. The costs of verifying the title by inspection and examination incluiding search fees shall be borne by the Purchaser who shall also if he requires certified or attested copies of any documents in the Vendor's possession relating to other property retained by the Vendor as well as to the Property pay the cost of such certified or attested copies."

It is necessary also to consider Clause 16.01 which is as follows:-

"16.01       Save as herein varied or excluded there are inccrporated into this Agreement as if they were herein written the conditions respectively on the part of the Vendor and the Purchaser set out in Part A, of the Second Schedule to the Conveyancing and Property Ordinance (Cap. 219, Laws of Hong Kong)."

Conditions No. 7, 8 and 9 in Part A of the Second Schedule to Cap. 219 cover the same ground as conditions 10.02 and 10.03 in the sale and purchase agreements. I am satisfied that by expressly including conditions 10.02 and 10.03 in their agreements the parties have impliedly excluded conditions 7, 8 and 9 set out in Part A of the Second Schedule to Cap. 219.

54. Unfortunately, some words have obviously been left out of Condition 10.02. As that clause is in common form, I do not feel I would be straying beyond my province if I were to take the liberty of supplying the missing words. The missing words are "delay or expense or on any other resaonable ground unwilling".  Those words should be inserted between "difficulty" and "to''.

55. There is nothing on the material before me which indicates that the vendor is unable or on the grounds of difficulty, delay or expense or on any other reasonable ground, unwilling to remove or comply with the purchasers' request that Banque Indosuez should make a confirmatory assignment so that the legal estate is no longer outstanding.

IV.    THE POWER OF ATTORNEY FROM BANGKOK BANK

56. Bangkok Bank is one of the vendor's predecessors in title. Pursuant to powers it enjoyed under a mortgage, Bangkok Bank by an assignment dated 3rd August 1967, purported to assign the Remaining Portion of Section A of Inland Lot No. 2302 and Extension to Man Tung Company Limited ("Man Tung Company").  That assignment finishes off "IN WITNESS whereof Sanguan Tejasakulsin the Attorney of the Vendor hath hereunto set his hand and seal .............". Then there follows "SIGN, SEALED AND DELIVERED by the Vendor by its attorney Sanguan Tejasakulsin in the presence of". There is then the seal and what I presume to be the signature of Sanguan Tejasakulsin, and a solicitor witnessed that signature.

57. Unfortunately, the Power of Attorney under which Sanguan Tejasakulsin purported go execute the assignment is missing. Unsurprisingly, the purchasers' solicitors contend in their requisitions that the vendor's title is incomplete without the Power of Attorney.

58. The vendor's solicitors have sought to shore up the title in various ways. Firstly, the vendor's solicitors have obtained a letter dated 13th March 1987 from the Bangkok Bank, confirming that, at the time of the execution of the assignment, Sanguan Tejasakulsin was their lawful attorney and had authority go execute assignments on behalf of the bank. Counsel for the vendor seeks to argue that the effect of that letter, coupled with the fact that Bangkok Bank had handed over the title deeds go Man Tung Company at the time of the assignment on 3rd August 1967, was sufficient go amount to a re-delivery of the deed according go the principles described in In re Seymour ⁽¹⁾. I rejected that argument of the vendor for the same reasons that I rejected the same argument when it was advanced in relation go the occasion when Banque Indosuez purported to assign through an attorney.

59. Estoppel was again prayed in aid. This time, I felt somewhat more sympathetic to resorting to estoppel to paper over defects in the title than I did in relation go the Banque Indosuez mortgage. Whereas in the instance of the Banque Indosuez mortgage only five years have elapsed, the Bangkok Bank assignment occurred almost twenty years ago, so that the possibility of outstanding equities having priority over the legal estate must be somewhat remote. The situation is on the borderline for the purposes of the principle in M. E. P. C. Limited v. Christian-Edwards.⁽²⁾ Should the Court take the view that the facts and circumstances are so compelling that the purchasers are not really at risk of the successful assertion of equities against them? After much hesitation, I have decided that reliance on estoppel would not be a satisfactory answer to the purchasers' requisition. Having already decided that Banque Indosuez should be required to join in with a confirmatory conveyance which will ensure that the legal estate gets passed on to the best of its ability, I consider it would be somewhat sloppy to require anything less from the Bangkok Bank. There is nothing to suggest that the vendor will have any difficulty in requiring the concurrence of the Bangkok Bank to joining in a confirmatory assignment.

60. An argument peculiar to the Bangkok Bank power of attorney was advanced by counsel for the vendor. She sought to rely on sub-section (4) of Section 13 of the Conveyancing and Property Ordinance, Cap. 219. I will set out the whole of Section 13:-

"13.(1) Unless the contrary intention is expressed, a purchaser of lard 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 extending at least 25 years before the contract of sale of that land commencing with -

(i) an assignment on sale;

(ii) a mortgage by assignment; or

(iii) a legal charge,

dealing with the whole estate and interest in that land;

(b) production of any document referred to in the assignment, mortgage or charge mentioned in paragraph (a) 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 that land is disposed of; and

(c) production of any power of attorney under which any document produced is executed.

(2)    Where this section requires the production of any document, it shall be sufficient to produce a copy certified by a public officer or a solicitor to be a true copy.

(3)    Subject to subsection (1), where any document produced as proof of title to any land contains a recital of any document dated or made before the date from which a vendor is required to prove title, the purchaser of that land shall assume, unless the contrary is proved, that -

(a) the recital is correct;

(b) the recital gives all the material contents of the document recited; and

(c) the document recited was duly executed and perfected.

(4) A recital, statement, and description of any fact, matter or party contained in any document of title, mortgage, declaration or power of attorney relating to any land and dated or made not less than 15 years before the contract of sale of that land shall, for the purposes of any question as to proof of title concerning the parties to that contract and unless the contrary is proved, be sufficient evidence of the truth of that recital, statement and description.

(5) This section affects only the rights and obligations of the parties to a contract for the sale of land entered into after the commencement of this section."

She contended that the words "Sanguan Tejasakulsin the Attorney of the Vendor" in the assignment dated the 3rd August 1967 amounted to a "........ statement and description of any fact, matter or party contained in any document of title, mortgage, declaration or power of attorney relating to any land and dated or made not less than 15 years before the contract of sale of that land" within the meaning of S.13(4). I agree with her on that. I am also prepared to agree with her that such statement and description are sufficient evidence of their truth for the purposes of any question as to proof of title. That said, however, I do not think what is proved advances the vendor's case at all. Although by virtue of Section 13(4) the Court is now apprised of the fact that Sanguan Tejasakulsin was the Attorney of the Bangkok Bank, l do not think the subsection permits the court to start speculating about the scope of that Attorney's powers and to assume that he was acting within the scope of his authority when he executed the assignment.

61. Powers of attorney are treated as immensely important documents by Section 13 of Cap. 219. By Section 13(1)(c) they are explicitly referred to as one of the documents a vendor must produce to prove title. When X is purporting to convey property on behalf of Y, it is obviously vital that X should prove clearly that he has power to do so. I regard it as unlikely that the legislature ever intended the general provisions in subsection (4) to erode the special requirement of subsection (1)(c) to the effect that powers of attorney must be produced. It is only after examining the content of a power of attorney that the court can say whether the attorney was acting within power; I do not think subsection (4) ever intended that the court could assume an attorney was acting within power.

CONCLUSION

62. From the foregoing, my conclusions can be summarised as follows : the Court considers there was no substance in the requisitions raised by the purchasers in relation to the parcels of the land and the assignment by the liquidators, but, on the other hand, the court takes the view that the requisitions on the two Powers of Attorney can only be met by Banque Indosuez and the Bangkok Bank being required to join in confirmatory assignments.   In so far as the requisitions on the two Powers of Attorney are concerned, the purchasers are entitled to a declaration, at least under paragraph 1 of the originating summons, in the following terms:-

"A declaration that the requisitions/objections contained in 2 letters from the Plaintiff's solicitors, Messrs. K.K. & Winston Chu to the Defendant's solicitors, Messrs Deacons, being:-Point 1 in the letter dated 14th March 1987 and Point 2 in the letter dated 17th March 1987 have not been sufficiently answered by the Defendant."

63. Counsel can address the Court on any other orders they deem appropriate in the light of the above findings.

(1) [1913] 1 Ch. 475

(2) [1981] A.C. 205

(3) [1879] 13 Ch. D 754

(4) [1844] 14 Sim. 303

(5) [1877] 46 L.J. Ch. 611

Representation:

Mr. A.R. Suffiad (inst'd by M/S K.K. & Winston Chu) for the Plaintiffs/Applicants

Miss Gladys Li (inst'd by M/S Deacons) for the Defendant