Li Kwan Chuen v. Vector Development Ltd

HCMP 142/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 142 OF 2009

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BETWEEN

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Before: Hon Sakhrani J in Chambers 

Date of Hearing: 16 April 2009

Date of Judgment: 16 April 2009

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J U D G M E N T

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1.This is an application for a declaration that the defendant was the constructive trustee of Flat C and Flat Roof, 4^th floor Level, Universal Building, Nos. 5-13 New Street, Hong Kong (“the property”) in favour of the plaintiff.  An order is also sought that the defendant should execute a confirmatory assignment in favour of the plaintiff.

2.The plaintiff is the last of several purchasers for consideration in a line all deriving title to the property from the assignments dated 10 October 2002.  In the assignments the defendant as vendor assigned the property to Koo Wai Ting Debbie.  The assignments were executed by affixing a common seal in the presence of its sole corporate director, Hilight Inc.  However, the common seal affixed on the assignments was not the common seal of the defendant but the common seal of Hilight Inc.  That being so, the assignments were not sealed with the common seal of the defendant at all.

3.The application made by the plaintiff is to seek the court’s assistance to cure the defect in the assignments executed. 

4.A similar question was considered by Woo J (as he then was) in Goldsteady Investment Limited v. Fatima Estates Limited (MP 2943 of 1995) in his judgment dated 27 November 1995. 

5.The plaintiff here also relies on section 35(1)(b) of the Conveyancing and Property Ordinance, Cap. 219 (“the Ordinance”) which implies in the assignment the covenant by the defendant as vendor as set out at paragraph 5 of Part II of the First Schedule to the Ordinance, namely :

“That all such lawful acts, assurances and things for further or more perfectly assuring the land and every part thereof to the purchaser and to those deriving title under the purchaser shall, from time to time and at all times at the request and cost of the purchaser or any person deriving title under him, be executed and done (subject to the manner in which the assignment is expressly to be made) as by the purchaser or any such person may be reasonably required.”

6.As there has been a mistake made in the use of the common seal, I am satisfied that the plaintiff should be entitled to relief. 

7.I grant a declaration that the defendant was a constructive trustee of the property in favour of the plaintiff. 

8.According to the implied covenant, the defendant should execute or do all such lawful acts, assurance and things as the plaintiff may reasonably require for further or more perfectly assuring the property to the plaintiff.  Thus, it is clear that a confirmatory assignment of the property should be made by the defendant.  However, as in Goldsteady Investment Limited the evidence in this case shows that there is difficulty in getting the defendant to execute the confirmatory assignment.  The defendant is a BVI company which has been struck off from the register of companies.  However, it has not been dissolved. 

9.The Originating Summons has been served at the registered address of the defendant in the British Virgin Islands.

10.On the evidence before me the plaintiff has exhausted all reasonable means to locate the defendant.  However, there has been no response from the defendant at all.

11.As was ordered in Goldsteady Investment Limited I also think it is appropriate in this case to make an order and I so order that the Registrar of the High Court be appointed by the court to execute such a confirmatory assignment to take effect as if the same were executed by the defendant.  The form and terms of the confirmatory assignment should be submitted by the plaintiff to the Registrar for her approval and execution.  I give leave to apply in case there is any difficulty in the assignment. 

12.The plaintiff must pay the costs of and occasioned by the execution of the confirmatory assignment and there shall be no order as to costs of this application.

Mr Jeffrey Chau, instructed by Messrs Hau, Lau, Li & Yeung, for the Plaintiff

Defendant, absent