Wing Tung Yick Investment Co Ltd and Others v. Attorney General

1995 MP No. 2557

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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Before: The Hon. Mr. Justice Keith in Court

Dates of Hearing: 7^th and 8^th December 1995

Date of Delivery of Judgment: 8^th December 1995

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JUDGMENT

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INTRODUCTION

1. This case concerns three lots of agricultural land in Tai Lam Chung. They are Lots 299A, 300 and 302 in Demarcation District No. 384, Tuen Mun. On 5^th January 1994, the land was resumed by the Crown under section 3 of the Crown Lands Resumption Ordinance (Cap. 124) (“the CLRO”). The Crown requires the land for the transfer of raw water. On the resumption of the land, the Crown became liable to pay statutory compensation under the CLRO. Part of the statutory compensation has already been paid. The issue which this case has been brought to resolve is to whom the balance of that compensation is payable. The Plaintiffs all contend that it is payable to the 1^st Plaintiff.

THE RELEVANT STATUTORY PROVISIONS

2. Compensation under the CLRO is payable to “the former owner” of land which has been resumed, and to “any person having an estate or interest in the land immediately before reversion”: section 6(1)(a) of the CLRO. The words ”owner” and “former owner” are defined in section 2 of the CLRO. The combined effect of those definitions is that the fomer owner of land which has been resumed is “the person who was … registered or entitled to be registered in the Land Registry in respect of [that] land … immediately before the land reverted to the Crown”.

THE 1^ST PLAINTIFF’S CLAIM

3. The Plaintiffs’ claim that the 1^st Plaintiff, Wing Tung Yick Investment Co. Ltd. (“the Company”), is entitled to the statutory compensation under the CLRO is based on the Company’s acquisition of the land prior to its resumption. The Company’s purchase of the land is said to have been effected by two instruments:

(i) Two formal sale and purchase agreements were executed on 25^th October 1993. By those agreements, the persons who purported to be the owners of the land agreed to sell the land to the Company.

(ii) Two assignments were executed on 3^rd January 1994. By those assignments, the persons who purported to be the owners assigned their interest in the land to the Company. The assignments originally bore the date of 8^th January 1994 on them. That date had been inserted on the assignments by the Plaintiffs’ solicitors. However, the Plaintiffs’ assertion that the assignments were in fact executed on 3^rd January 1994 is not disputed.

Although the Plaintiffs’ solicitors had sought to register the sale and purchase agreements in Land Registry, they had not been registered by 5^th January 1994. Since they had not been registered by then, the Company is only entitled to compensation under the CLRO, by virtue of being the former owner of the land, if the Company had been entitled, prior to 5^th January 1994, to be registered in the Land Registry in respect of the land.

4. It is common ground that anyone who has a beneficial interest in land is entitled to have that interest registered in the Land Registry. It is also common ground that the sale and purchase agreements had the effect of passing a beneficial interest in the land to the Company provided that the vendors had a good and valid title to pass. Accordingly, whether the Company is entitled to the statutory compensation turns on whether, by the time that the sale and purchase agreements were entered, the vendors had acquired a good and valid title to the land.

THE OWNERSHIP OF THE LAND

5. Prior to 1992, the land had been registered in the Land Registry in the names of various people who held the land as tenants in common in equal shares. They were: (i) Wu Loi, (ii) Wu Oi, (iii) Wu Ting, (iv) Wu Yan and (v) Wu Kwong-fat Patrick and Wu Kwong-sang (who were tenants in common in equal shares as between themselves). There is no dispute that Wu Yan, Wu Kwong-fat Patrick and Wu Kwong-sang had a good and valid title to their shares in the land. Accordingly, the execution by them of the two sale and purchase agreements passed a beneficial interest in their shares in the land to the Company. Since their shares in the land amounted to two-fifths of the land, the Company has been paid two-fifths of the statutory compensation due. The dispute relates to the remaining three-fifths of the land.

6. By 1992, Wu Loi, Wu Oi and Wu Ting had all died. Between them, they had had seven sons. Six of them are the 2^nd to 7^th Plaintiffs. The seventh was Wu Ying, who himself died after the land had been resumed by the Crown. In the belief that the shares of Wu Loi, Wu Oi and Wu Ting in the land had been vested in their seven sons as their successors-in-title, the seven sons executed the two sale and purchase agreements. It is not disputed that the seven sons were their fathers’ successors-in-title. What is disputed is whether the land had become vested in the seven sons. If it had, the Company is entitled to the remaining compensation.

THE VESTING OF THE LAND IN THE SEVEN SONS

7. No grant of probate or administration of the estates of Wu Loi, Wu Oi and Wu Ting was made by the High Court within three months of their respective deaths. That triggered the application of section 17 of the New Territories Ordinance (Cap. 97) (“the NTO”). Prior to 1^st March 1993, section 17 provided:

“… the Land Officer, on ascertaining the name of the person who is entitled to such land in succession to the deceased person (hereinafter called the successor), and on being satisfied that any estate duty which may be due has been paid, shall register the name of the successor, and upon such registration being effected the said land shall vest in the successor for all the estate and interest of the deceased person therein, or for such estate and interest as shall be entered on the register by the Land Officer against the entry of the name of the successor …”

Since then, the Secretary for Home Affairs has been substituted for the references to the Land Officer.

8. The seven sons applied to the Land Officer to be named as the successors of their fathers. In due course, approval was given for them to succeed to the estates and interests of their fathers, with effect from the dates of their fathers’ deaths. Those approvals were given in written notices to that effect

(a) on 26^th June 1992 in respect of Wu Ying, the 2^nd Plaintiff and the 3^rd Plaintiff,

(b) on 1^st July 1992 in respect of the 4^th, 5^th and 6^th Plaintiffs, and

(c) on 29^th November 1993 in respect of the 7^th Plaintiff.

However, since these approvals declared that the succession was to take effect from the dates of their fathers’ deaths,

(a) Wu Ying, the 2^nd Plaintiff and the 3^rd Plaintiff succeeded to the estate of their father, Wu Loi, on 6^th March 1998,

(b) The 4^th, 5^th and 6^th Plaintiff succeeded to the estate of their father, Wu Oi, on 19^th June 1989, and

(c) The 7^th Plaintiff succeeded to the estate of his father, Wu Ting, on 19^th August 1992.

9. On what basis is it said, therefore, that the land had not become vested in the seven sons by 25^th October 1993 when they purported to sell the land to the Company by the two sale and purchase agreements? The only basis on which that is alleged is that the written approvals had not been registered under the Land Registration Ordinance (Cap. 128) (“the LRO”). Section 2(1) of the LRO, so far as is material, provides:

“… all … instruments in writing …, by which any parcel of ground may be affected, may be entered … in the [Land Registry] in the prescribed manner.”

Section 3(2) of the LRO provides for the effect of non-registration:

“All such … instruments in writing … which are not registered shall, as against any subsequent bona fide purchaser … for valuable consideration of the same parcels of ground …, be absolutely null and void to all intents and purposes.”

Mr. Nicholas Bradley for the Attorney-General argues that the registration to which section 17 of the NTO relates is registration under section 2(1) of the LRO.

THE FORM OF REGISTRATION UNDER SECTION 17 OF THE NTO

10. Mr. Bradley’s argument is based in part upon certain assumptions made by the Court of Appeal in two recent cases:

(i) In Light Ocean Investments Ltd. v. Enway Development Ltd. [1994] 3 HKC 31, Nazareth V.-P. assumed at p. 36E that the registration of a manager to represent a clan, family or t’ong under section 15 of the NTO is registration at the Land Registry, i.e. under section 2(1) of the LRO.

(ii) In Wu Koon Tai v. Wu Yau Loi [1995] 2 HKC 732, Litton V-P assumed at p. 738I that the registration to which section 17 of the NTO related is registration by memorial, which could only refer to registration at the Land Registry under section 2(1) of the LRO.

I cannot accept this argument. The form of registration contemplated by sections 15 and 17 of the NTO was not argued in Light Ocean or Wu Koon Tai. The correctness of the assumptions made by Nazareth V-P and LittonV-P were never put to the test. Since the assumptions were made without argument, it would not be right for me to treat them as the informed view of the Court.

11. In my judgment, there are three reasons why the form of registration contemplated by section 17 of the NTO is not registration under the LRO:

(i) The Land Officer’s obligation under section 17 is to register “ the name of the successor”. The system of registration under the LRO relates to registration of documents. Names as opposed to documents are not registerable under the system of registration created by the LRO.

(ii) The effect of the registration by the Land Officer of “the name of the successor” is that the deceased’s interest in the land vests in the successor. Registration of instruments affecting land under the LRO does not have that effect. Registration under the LRO does not pass title. Since registration under section 17 has the effect of passing title, registration under the LRO is not the form of registration contemplated by section 17.

(iii) Where the registration contemplated by the NTO is registration under the LRO, the NTO makes that clear. Thus, section 15 of the NTO requires the re-entry by the Crown upon land held by a clan, family or t’ong to be effected by “the registration of a memorial thereof”. I have already referred to the fact that registration by memorial can only refer to registration under the LRO.

If the form of registration contemplated by section 17 of the NTO is not registration under the LRO, what form does the registration take? How does the Land Officer register the name of the successor? The answer is provided by looking at what the Land Officer actually does. When a right to succession is asserted, the Land Officer opens a file and assigns a number to it. In due course, he records, in a record kept for that purpose, the file number, the applicant’s name and address, the date when the application was first made and particulars of the deceased. Once he has determined, in accordance with Chinese law and custom, that the applicant is indeed the deceased’s successor-in-title, he notifies the applicant of that fact. In these circumstances, the registration of the name of the applicant as the successor is constituted by the record which records the details of the application and the written notice approving his succession. It may be that Land Officers have assumed in the past that registration is not complete until the written approvals have been registered under the LRO. That would enable any member of the public to ascertain in whom land vests by simply inspecting the Land Register. But for the reasons I have given, I do not believe that that is what section 17 of the NTO, properly construed, actually requires.

CONCLUSION

12. For these reasons, the names of the 2^nd to 7^th Plaintiffs and Wu Ying had been registered as the successors to the estates of their fathers, and their fathers’ interests in the land had vested in them. It follows that the sale and purchase agreements  passed a beneficial interest in the land to the 1^st Plaintiff on 25^th October 1993. The 1^st Plaintiff was therefore the former owner of the land when the land was resumed by the Crown on 5^th January 1994, and I declare that the Director of Lands is obliged to pay the remaining compensation under the CLRO with interest thereon to the 1^st Plaintiff. That is the only relief which I grant. Mr K.M. Chong for the Plaintiffs told me that if I granted that relief, the Plaintiffs would not seek any other relief.

Mr. K.M. Chong, instructed by Messrs. Ho & Chan, for the Plaintiffs

Mr. Nicholas Bradley, Senior Crown Counsel, for the Attorney-General