De Monsa Investments Ltd v. Whole Win Management Fund Ltd

HCMP2603/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2603 OF 2008

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Before : Hon Yam J in Court

Date of Hearing : 6 July 2010

Date of Handing Down Judgment : 20 October 2010

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JUDGMENT

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BACKGROUND

1.For the consideration of $138,000,000, the plaintiff agreed to purchase the Property at Rooms 1, 2, 3, 4 and 5 on the Penthouse, 37^th Floor of the Bank of America Tower, No. 12 Harcourt Road Hong Kong from the defendant.  This agreement is in writing embodied in “the Preliminary Sale and Purchase Agreement” dated 11 January 2008 in the standard form of Centaline Property Agency Limited and witnessed by an agent thereof.

2.There was no formal Sale and Purchase Agreement signed, although the preliminary agreement had envisaged that to be done.  But no issue has arisen on such failure.

3.The completion date was agreed to be on 17 June 2008 at 2:30 p.m.  The defendant itself was a purchaser from the head vendor under another sale and purchase agreement with the same date of completion with the head vendor.  Thus the defendant intended to complete the sale of the Property to the plaintiff as a confirmor. 

4.Thereafter the vendor’s solicitors Messrs Lo, Wong & Tsui (“LWT”) sent all the title deeds and documents in respect of the Property to the purchaser’s solicitors Messrs Woo, Kwan, Lee & Lo (“WKLL”) for their approval.  There were 97 items of them as set out in the list attached thereto.

5.This is what has been described as the Hong Kong style of completion whereby the purchaser’s solicitors would be holding all the original documents comprising the title deeds and documents and they would not release the same to the purchaser until and unless the sale had been completed.  This would also enable the purchaser’s solicitors to inspect each and every original document given to them.  

6.From or about 29 February 2008 onwards, WKLL raised a number of requisitions with LWT until 16 June 2008, i.e. one day before the completion date. 

7.No completion was made between the plaintiff and the defendant on 17 June 2008 or at all.  However the defendant completed his agreement with the head vendor on the same day as agreed. 

8.On the next day, i.e. 18 June 2008, WKLL wrote to LWT and alleged that by the completion time of 2:30 p.m. on 17 June 2008, the vendor/defendant had still “failed and/or refused to :

(1)     answer [their] requisitions satisfactorily; and/or

(2)     give true or show good title to the Property; and/or

(3)     provide the original documents requested under [their] letter dated 16 June 2008.”

[paragraphing supplied]

They therefore claimed the return of the deposit in the sum of $13.8 million.  

9.On the same day, LWT replied and disagreed with WKLL that they had failed in the aforesaid three respects as alleged by WKLL.  They further contended that the purchaser had failed to tender the balance of the purchase price to complete the purchase before the deadline at 2:30 p.m. 17 June 2008.  Accordingly, LWT considered that the purchaser was in breach of the agreement and the vendor would therefore be entitled to hold the deposit and to apply the same towards compensation of its damage. 

10.On 24 December 2008, the purchaser/plaintiff commenced these proceedings for, inter alia, the return of the said deposit of $13.8 million and the costs of investigation of the title of the Property incurred by the plaintiff in the total sum of $86,910. 

11.In the meantime, the defendant had sold the Property for the price of $88.8 million by a sale and purchase agreement on 26 May 2009 to another purchaser and such sale was completed on 15 October 2009.  In these proceedings, the defendant therefore counterclaimed for damages from the plaintiff.

12.By consent, the parties herein agreed that this court should only decide the issue of liability first.

THE REQUISITIONS

13.Counsel for the plaintiff, Mr Jat Sew Tong SC who appeared together with Mr Paul Lam, categorised all the requisitions into 2 categories.  They comprised a number of title documents, the originals of which were missing.  These 2 categories are :

(1)     those in respect of which not even certified copies of the originals could be produced;

(2)     those in respect of which certified copies of the originals could be produced but not the originals. 

14.Counsel for the defendant, Mr Godfrey Lam SC, appearing together with Miss Liza Cruden, however grouped the relevant requisitions into 3 categories as follows :

“(1) No copy was produced of the Pump Pit Tenancy Agreement dated 24.8.1979. [referred to in WKLL letter dated 29.2.08 B1/16][1]

(2) No certified copy made directly from the original was produced for each of :

(a)   an agreement relative to the operation and maintenance of Joint Pumphouse supplying Hutchison House and Gammon House dated 9.7.1975 [B1/8; 117-122]

(b)   the Pipeline Wayleave Agreement dated 24.8.1979 [B1/8; 124-132]

(c)   the Pipeline Wayleave Agreement dated 27.7.1988 [B1/11; 134-146]

(d)   the Pump Pit Tenancy Agreement dated 27.7.1988 [B1/11, 148-159]

(3) Only a certified copy and no original was produced for each of :

(a)   Assignment Memorial No.2799428 [B1/35]

(b)   Legal Charge Memorial No.4460364 [B1/13]

(c)   Legal Charge Memorial No.4460370 [B1/13]

(d)   20 documents referred to in requisition no.26 in WKLL’s letter dated 8.4.2008 [B1/2/47]

(e)   28 documents referred to in requisition no.25 in WKLL’s letter dated 16.6.2008 [B1/2/76]”

15.I prefer the classification of Mr Lam for reasons which will be apparent hereinbelow. I shall deal with them in the same order.

(1)     No copy was produced of the Pump Pit Tenancy Agreement dated 24.8.1979

16.These Pump Pit Tenancy Agreements 1979 and 1988 could be best understood by grouping them into 2 groups as follows :

(1)(a)   the Pump Pit Tenancy Agreement 1979; and

(b)   the Pipeline Wayleave Agreement dated the same date as 24.8.1979;

(2)(a)   the Pump Pit Tenancy Agreement; and

(b)   the Pipeline Wayleave Agreement dated the same date as 27.7.1988. 

Thus the Pump Pit Agreement and the Pipeline Agreement are in two sets in 1979 and 1988 respectively. It is the defendant’s submission that the 1988 agreements had overtaken the 1979 agreements.  Thus the loss of the Pump Pit Tenancy Agreement of 1979 would have no effect on the good title of the defendant vendor since this agreement, in their submissions, beyond reasonable doubt had ceased or otherwise have no effect whatsoever and any purchaser subsequent to the 1988 agreement cannot have any imaginable liability under the 1979 Pump Pit Agreement.  

17.In order to understand this submission, one would have to understand the substance of these two sets of agreement.  The best way I think is to refer to the map annexed to each of the three available agreements at B1/7/131, B1/8/145 and B1/9/158.  Obviously only three maps are now available but the combined effect of these three maps would be sufficient to demonstrate the vendor’s contentions.  One can refer to the two 1988 agreements and infer therefrom the intentions and effects of the two 1979 agreements.  

18.Both Hutchison House and Gammon House, as the latter was called in 1979, wanted to connect seawater supply at the position marked X on the 1979 Pipeline Agreement [see B1/7/131].  At position X the connection allowed by the Government was to obtain the source of the seawater supply which was originally part of the pipeline of seawater supplying Murray Road multi-storey carpark on the southern side of the aforesaid 2 Houses.  Position X is at the south‑western corner of Hutchison House at the junction between Lambeth Walk and Murray Road.  Pipelines were then installed underground through Government land to a pump pit situated at about 2/3 from the south-western corner of Hutchison House and running in front of it along Government land in the pavement on the southern side of Hutchison House. 

19.There was a “pump” situated at the position as labelled, both in the 1979 and 1988 Pump Pit Tenancy Agreements at B1/9/158 and B1/7/145.  When one compares the 2 Agreements, the pump depicted therein has the same diagrammatic representation with the pipeline leading from the main at position X towards the pump.  Thereafter there was a branching out into 2 pipes, one into Hutchison House and the other one continued in a straight line in the same direction into Gammon House in 1979.  This same building had been renamed as the Bank of America Tower in 1988.  Since the connection to the main, the pipelines, and the pump pit would be in Government land, the occupiers of these two buildings would have to pay Government rental for these installations for the supply of seawater for cooling their air-conditioning systems. 

20.On such analysis it is inconceivable that the 1979 pump pit would be different from the 1988 pump pit.  The purpose and position of the pump pit and the pipes coming from the main towards the pump and branching out into the two buildings are the same.  To my mind, it is beyond reasonable doubt that the 1979 Pump Pit Agreement had already been overtaken by the 1988 Pump Pit Agreement for the aforesaid reason and the following additional reasons hereinbelow :

(1)     The vendor further relied on section 13(1) of the Conveyancing and Property Ordinance, Cap. 219 which provides (this section is cited in full for other issues arising in this case) :

“(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 Government lease relating to the land sold and—(Amended 29 of 1998 s. 105)

(a) proof of title to that land—

(i) where the grant of the Government lease was less than 15 years before the contract of sale of that land, extending for the period since that grant; or (Amended 29 of 1998 s. 105)

(ii) in any other case, extending not less than 15 years before the contract of sale of that land commencing with an assignment, a mortgage by assignment or a legal charge, each dealing with the whole estate and interest in that land; (Replaced 31 of 1988 s. 6)

(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 where that document was executed less than 15 years before the contract of sale of that land. (Amended 31 of 1988 s. 6)

(2) Where this section requires the production of any document, it shall be sufficient to produce a copy—

(a) attested, before 1 November 1984, by 2 solicitors’ clerks; or

(b) certified by a public officer or a solicitor,

to be a true copy. (Amended 31 of 1988 s. 6)

(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.”

(2)     First, the Government lease in 1979 must be more than 15 years before the agreement.  The vendor is only obliged to prove title up to the intermediate root of title of less than 15 years before the contract of sale.  The effect of section 13(1) has been decided to have the intention to facilitate conveyancing (see Wu Wing Kuen v Leung Kwai Lin [1999] 3 HKLRD 738 at p. 745F(CA)), and any interest, power or obligation created by the agreement must have ceased or expired.  Therefore the purchaser was not entitled to refuse to complete the purchase for this reason.  Further from all the evidence in this case, it has been shown beyond reasonable doubt that the 1979 agreement must have ceased or expired by the vendor.  Furthermore the 1979 Pump Pit Tenancy Agreement was summarised in the recital in the 1979 Pipeline Agreement.  This recital is similar to the 1988 Pipeline Agreement.  The inference that the 1988 Agreements had replaced the 1979 Agreements is obvious.

(3)     The DMC dated 5 June 1981 also mentioned the two 1979 agreements in that, in clause 28(a), it was provided that the manager/managing agent of the building has the duties of, inter alia, representing all the owners of the building and to deal with the Government or any utility or other competent authorities in all matters concerning the due management of the building including the negotiations for and deciding of any or all the agreements mentioned in the Second Schedule thereto for the cancellation of such agreements.  Schedule 2 of the DMC (B2/23/742) referred to the two 1979 agreements and any replacements thereof. 

          Thus it is plain and obvious that the missing 1979 Pump Pit Agreement was a tenancy in respect of the same subject matter as the 1988 Pump Pit Tenancy Agreement.  The 1979 Pump Pit Agreement was therefore clearly replaced by the 1988 agreement, in the same way as the 1979 Pipeline Agreement was replaced by the 1988 version.  

(4)     The 1988 Pump Pit Agreement was for $1,000 per annum whereas the 1988 Pipeline Agreement was for $217,600 per annum.  The 1979 Pipeline Agreement was at the rental of $102,000.  We do have a copy of the 1979 Pump Pit Agreement now; therefore we do not know the annual rental therein.  However, it cannot be more than $1,000 per annum.  I therefore accept the vendor’s submission that the Government plainly would not have entered into the 1988 pair of agreements if there were any outstanding default in respect of the 1979 agreements.  

(5)     When LWT enquired from the Lands Department for a copy of the 1979 Pump Pit Agreement, the Lands Department said they do not even have a copy of this 1979 agreement.  Therefore, again, I accept the vendor’s submission that it would be fanciful to suggest that there was any risk of any outstanding obligation under the 1979 agreement that can be enforced against any purchaser of the property or other owners of the building.  After all if this agreement has any significance at all, “how could the Lands Department fail to have a copy?” and “how could they enforce the agreement when they do not even have a copy of the agreement and thus have no evidence of the exact terms therein?”, asked rhetorically by the vendor. 

(6)     The owners of the building have already secured the benefits of the use of the pump pit by the 1988 agreement, they could not now realistically be subject to any burden under the 1979 agreement that could be enforced against them.  Further the vendor submitted that whether any relevant interest, power or obligation created by the 1979 Pump Pit Agreement had ceased or expired is the type of question that has to be approached “from the stand-point of a willing purchaser and a willing vendor, both possessed of reasonably robust commonsense, both intending to see the transaction through to completion in terms of their own bargain” : Mexon Holdings Ltd v Silver Bay International Ltd (2000) 3 HKCFAR 109 at 117E, per Litton PJ.  His Lordship also predicated this passage by saying :

“A good title does not mean a perfect title, free from every possible blemish. …”

Thus, it is more particularly so, given that the purchaser is itself an existing owner of a unit of the same Building at office no. 10, 7/F.

(2)     No certified copy made directly from the original was produced for :

(a)    The Agreement of the Joint Pump House

21.               The Agreement of Joint Pump House supplying Hutchison House and the then Gammon House dated 9.7.1975 became one of the requisitions because WKLL was not satisfied that the document produced to them could be sufficient to prove good title or otherwise a complete set of the title documents.  The problem is as follows :

(a)     At the back of this document provided, it was certified and attested by two clerks to Messrs Deacons and dated 7.7.81, as follows :

“We the undersigned, do hereby certify and attest that we have examined the foregoing document and the original and that the same is a true and complete copy thereof.”

This is known as an “attested copy”.

In the aforesaid section 13(2)(a), it was provided that an attested copy before 1 November 1984 (the “relevant date”), by 2 solicitors’ clerks shall be sufficient when this section requires a production of any document, meaning the original document. 

(b)     But of course, as in subsection (2)(b), thereafter the document must be certified by a public officer or a solicitor.  The document produced to WKLL is not the original attested copy but a certified copy by a solicitor of the attested copy. This is the certificate of one Eric K.P. Pun, a solicitor, who certified that he :

“… have this day examined the foregoing document with an attested copy of its original and hereby certify that the same is a true and complete copy of the said attested copy.”

That was dated 10.7.85.  In other words, the attested copy was before the relevant date of 1.11.84 whereas the certified copy of the attested copy was after the relevant date.

22.Mr Jat for the purchaser submitted that subsection (2) means where this section requires the production of any document, meaning “any original document”, a certified copy by a solicitor not of the original document but an attested copy would not be sufficient for the purpose of section 13(2)(b).  On the other hand as the original attested copy is not supplied, section 13(2)(a) is not satisfied either. Therefore there was no satisfaction of either paragraph (a) or (b) of section 13(2).

23.Mr Geoffrey Lam, on the other hand, pointed out that the original requisition of WKLL seems to have sought certified copies, and asked for a “properly certified copy of attested copy”.  This, as explained hereinbefore, LWT had already done so.

24.In my view, section 13(2) only requires the production of a copy attested or certified to be a true copy.  It does not require an attested or certified copy of the original.  If it was intended to be so, these words could have been easily provided in the statute.  Thus, a second, third or n^th copy, attested or certified according to section 13(2) would be the same as (i.e. a true and complete copy of) the original.

25.This view is also in line with the practical situation.  Some document, like a DMC, has only one and only one original and certain number of attested or certified copies.  When more is required, as in the situation of further division or subdivision of land, unit or flat, more attested or certified copies will have to be produced.  Since a sub-lessee or an owner of a unit or flat may not know where the original document is, he cannot cause a certified copy of the original to be done.  He can only produce an attested or certified copy out of his own attested or certified copy.

(b), (c) & (d) The aforesaid Pipeline Wayleave Agreements of 1979 and 1988 and the Pump Pit Tenancy Agreement of 1988

26.In respect of Agreement (b), 2 clerks of Messrs Deacons certified and attested that they have examined the attested copy with its original and that the same is a true and correct copy thereof, i.e. an attested copy.  That was 6.8.80, i.e. before the relevant date.

27.Two clerks of Messrs Deacons further certified and attested that they have examined the document on which they were attesting with its attested copy of the original and that the same is a true and correct copy thereof.  That was dated 7.7.81.  In other words, this is an attested copy of the first attested copy.

28.Still further, the same Eric Pun on the same date of 10.7.85 certified that he had examined the copy before him with an attested copy of its original and thereby certified that the same is a true and complete copy of the said attested copy.  When he said an attested copy of the original, it should mean the first attested copy of 6.8.80, otherwise he should say he had examined the document before him with an attested copy of another attested copy of its original.

29.In all of them they were further certified by a solicitor on 11.5.91.  Thereafter the copy now produced to WKLL was a certified copy on 9.10.98 of the first certified copy by a solicitor.  Thus there are 3 different issues in respect of these 4 agreements (a), (b), (c) and (d), namely :

(1)     In respect of Agreement (a), whether a certified copy of the attested copy is sufficient?  This has been dealt with in the previous section under (a).

(2)     In respect of Agreement (b), whether a certified copy of the attested copy (or even of the first attested copy) is sufficient?  The 2 attested copies were before the relevant date in 1984.

(3)     In respect of Agreements (c) and (d), whether a certified copy of a certified copy is sufficient?

30.In the past, some practitioner used to consider the aforesaid section 13 of the CPO only, without considering the common law position of proving the existence and content of a lost or unavailable original with secondary evidence. I shall consider the common law position before and after my decision in respect of section 13.

The common law position and its interaction with section 13

31.The common law position of proving good title, when the vendor is unable to produce original documents of title, had been misunderstood by practitioners.  They sometimes only concentrate on section 13 of the CPO and overlook the common law position which allows secondary evidence of a document to be adduced where a party could not adduce primary evidence of a document.  Some knew of this position but thought that the common law had been abrogated by section 13(1) of the CPO.  There were cases where parties’ counsel only argued on the effect of section 13 without referring to the pre-section 13 common law position.  A number of CFI cases were argued by counsel of both parties as if section 13 had totally overtaken the common law position.

32.However it has been held by the Court of Appeal that section 13 did not change the law as to the quality of the evidence which a purchaser of the land was entitled to require from the vendor as proof of title to the land.[2] Unless there is an express provision in the contract to the contrary, where primary evidence is not available, a purchaser must accept sufficient secondary evidence.  The secondary evidence must provide clear and cogent proof of :

(1)             the contents of the missing document;

(2)             its due execution; and

(3)             the fact of its loss or destruction.[3]

33.In the judgment, Godfrey JA (as he then was) said at p.746 :

“… [Recorder Tang] thought it ‘possible to say that they were consistent with secondary evidence being admissible notwithstanding s.13(1). The others are against.’ …

[Six CFI cases were cited.]

I agree with the Recorder that these six cases, insofar as they decided that secondary evidence of a document of title was, because of s.13(1), not admissible, were all wrongly decided and, in my judgment, we should now overrule them.  They all proceed on the unspoken assumption that s.13(1) was calculated to make life harder for vendor, not easier.  The opposite is the case.”

34.Accordingly the requisitions of the purchaser herein should be considered in accordance with both the common law and the statutory (i.e. section 13) position as decided by the Court of Appeal in 1999.  I shall consider Requisition (3) here first before I conclude on both Requisitions (2) and (3) as they are conceptually related together.

(3)     Only certified copies but no originals were produced

35.In respect of the third category of requisitions, the plaintiff complained that only a certified copy but no original was produced for each of the document in (a) to (e) :

(a)     in respect of (a) concerning Assignment Memorial No. 2799428, a certified copy of the same was provided to the plaintiff’s solicitors;

(b)     in respect of document (b), legal charge Memorial No. 4460364; and

(c)      legal charge Memorial No. 4460370;

they were already 15 years old and had been discharged by Release Memorial No. 7600635, the original of them did not have to be produced.  However the plaintiff’s solicitors maintained their request for the original.  The defendant’s solicitors explained that they had only be supplied by the Head Vendor with certified copies of the legal charges and they no longer affected the property and were therefore outside the ambit of section 13 of the CPO.

DOCUMENTS PRE-DATED THE INTERMEDIATE ROOT OF TITLE

36.The plaintiff submitted that the vendor is required, upon completion, to deliver all the title deeds that exclusively relate to the Property including pre-intermediate root documents.  They relied on the case of Yiu Ping Fong v Lam Lai Hing [1999] HKLRD 793 per Yuen J (as she then was).  They also relied on a specific decision in Loyal Hope Ltd v Leung Pui Ming, HCA136/2007, 20 March 2008 (per Master M. Yuen, unreported).

37.However as submitted by the defendant, Yiu Ping Fong did not decide that a vendor is required to deliver all title deeds, including pre-intermediate root documents, upon completion.  Otherwise it would make a mockery of section 13 of CPO.  In Yiu Ping Fong Yuen J decided that the obligation to produce and deliver upon completion the original of a previous assignment executed in 1986, in respect of the sale and purchase agreement between the parties entered into probably in 1998, was less than 15 years period. Thus, it is very clear that the document is not preceding the intermediate root of title.  There is no suggestion in the decision of Yuen J that the pre-intermediate root document is required.

38.Further in Donpower Trading Ltd v Apexcom Ltd [2010] 1 HKLRD 914 C.A., Cheung JA said (in paragraph 30) :

“ It is not necessary for me to discuss whether the decision [in Yiu Ping Fong] on section 13(2) was correct or not. Irrespective of any contrary view taken on the effect of the decision, I am of the firm view that the ambit of the decision did not go as far as the one suggested by the defendant in the present case, namely, the plaintiff was required to supply both pre-intermediate root of title documents and those preceding them.”

39.Cheung JA also accepted that the new section 13A had the effect of relieving the vendor from producing pre-intermediate root of title documents or proving such title, but he stated that this effect was “already provided for by section 13(1)” (see paragraph 34 thereof).

40.Mr Lam for the defendant has submitted that Cheung JA’s view on section 13 CPO and Yiu Ping Fong was strictly speaking obiter because the Court of Appeal decided that the purchaser did not waive a requisition regarding a post-intermediate root document which the vendor failed to answer adequately and that would have been sufficient to dispose of the appeal (paragraph 27).  However I do not consider that that part of the decision is obiter since the court has clearly decided that but for the lack of a waiver, the vendor would have succeeded on the pre-intermediate root document point.  Even if this part of the decision is obiter, I agree with Mr Lam that the view on section 13 remained the considered opinion of Cheung JA on a point which had been fully argued before the court.

41.Further the 2 decisions Yiu Ping Fong and Guangzhou Real Estate Development (HK) Co. Ltd v Summit Elegance Ltd [2002] HKLRD 855, at least insofar as they are interpreted to apply to pre-intermediate root documents, have previously been doubted at first instance by the following cases :

(1)     in C&W Watch Co. Ltd v Chu Kowk Tai (HCMP920/2005, 10 October 2005), per Reyes J at paragraph 24.  Reyes J noted that such an interpretation, insofar as they drew a distinction between “showing” and “giving” good title, would “… emasculate CPO s.13 of practical effect”;

(2)    in Donpower Trading Ltd, Saunders J agreed with Reyes J’s conclusion that the interpretation of Yiu Ping Fong is a process which would emasculate section 13 of practical effect.[4]

The draft statutory declaration

42.The vendor produced a statutory declaration in view of the possible obligation to produce the original of the lost document.

43.The purchaser however objected to the draft statutory declaration as follows :

(1)     The purchaser submitted that a draft statutory declaration is insufficient.  The vendor did not even undertake that a statutory declaration in the form of the draft would be made.  The vendor’s solicitors merely stated that the head vendor had undertaken to deliver a statutory declaration in such form upon or after completion.

(2)     The intended deponent of the statutory declaration had not even be named.  There was no way to tell whether that person would be an appropriate person to make the declaration.

(3)     The draft declaration only purported to state that the then owner of the Property never had the document in its possession.  It did not attempt to explain in what circumstances they were lost.

44.In respect of the first two points I agree with the purchaser.  Although the obligation of showing the good title was at the time of the completion, it would make a mockery of the period of requisition if before the very point of time of completion, the purchaser would not be sure whether the contents of the declaration and the deponent thereof would have satisfied the rule that the vendor had cogent evidence given by a person who is competent to give such evidence, to prove the circumstances of the loss of the document in question. Thus the standing of the deponent and what he would depose to in the statutory declaration are both important consideration for the purchaser to consider before the exact time of completion.

45.Whether the purchaser could rely on the case of Dynasty Target Development Ltd v Aibo Investment (China) Ltd DCCJ462/2005 per Deputy District Judge E. Yip at paragraph 24 that a draft statutory declaration was insufficient, is beside the point.  It has been submitted by the vendor in that case, that the vendor was asking the purchaser to settle the terms of the statutory declaration, which Judge Yip held that the purchaser had no duty to do so (see paragraph 25).

46.In that case, the vendor prepared a draft statutory declaration to explain the loss of certain original title deeds.  The vendor requested the purchaser to “approve” the draft before it would sign it.  Judge Yip held that the purchaser was not compellable to approve the draft and the vendor remained responsible for explaining the loss.  As this case does not involve a request by the vendor to the purchaser to approve the draft declaration, I consider that this case has little relevance.

47.Secondly it is true to say that there is a distinction between showing a good title before completion and giving a good title at the time of the completion.  However whether the content of the statutory declaration is enough is relevant to the question of showing a good title.  Thus there should not be any objection to statutory declaration which was only in draft form, but the purchaser is entitled to object to the contents of the statutory declaration which they considered to be insufficient to explain the circumstances of the loss of the documents.

48.Further it cannot be the case, as submitted by the vendor, that the statutory declaration made by a person duly authorised by Nescon Ltd, the head vendor, would be sufficient for the aforesaid purpose.  The question is not whether he is duly authorised by the head vendor; the question is who is he, and therefore whether he is in a position to make the statutory declaration according to his personal knowledge.  Without revealing the identity of the deponent, the purchaser could not consider whether the statutory declaration would serve the purpose.

49.Accordingly the identity of the deponent and the contents of the statutory declaration, though in draft form should be given to the purchaser for him to consider whether the statutory declaration would be enough.  It cannot be the case that the purchaser will only obtain the executed statutory declaration at the time of completion without knowing beforehand, either the identity of the deponent and the contents of the statutory declaration.

50.However I have decided that those pre-intermediate root documents were not necessary to prove a good title for the purpose of completion.  Therefore the inadequacy of the draft statutory declaration is not fatal to the defendant vendor’s case.

CONCLUSION ON REQUISITIONS (2) AND (3)

51.Counsel for the vendor had produced a table setting out all the documents referred to in requisition no. 26 of WKLL’s letter of 8 April 2008.  Those documents which post-date the intermediate root are highlighted in yellow. Those documents did not relate exclusively to the Property and some others were expired documents, like the past tenancies, which no longer affected the Property.  They therefore did not have to be produced (see New Jade Enterprises Ltd v Jing Ying She Ltd HCA13764/1997, 22 September 2000, at pp.29-31, per Deputy Judge Gill).

52.The only significant post-intermediate root documents are the aforesaid Legal Charges dated 30.5.1990 and a Deed of Release dated 12.10.1998.  But the original of these documents are not of the same nature as assignments, which could be deposited to create an equitable mortgage (like the missing assignment in Yiu Ping Fong).  In any event, an equitable mortgage over land could not be created in Hong Kong by depositing a title document like an assignment unless the same is evidenced in writing signed by the mortgagor in accordance with section 5 of CPO (Cap. 128), as pointed out in OR’s 1^st affidavit, paragraph 7.

53.An attested or certified copy of a document is enough pursuant to section 13(2) of the CPO.  This copy needs not be an attested or certified copy of the original document as long as it can be traced back up to the chop attesting or certifying that the first attested or certified copy is a true and complete copy of the original.

CONCLUSION

54.(1)     For all pre-intermediate root title, section 13 and section 13A have the effect of relieving to a vendor from producing them in order to prove good title.

(2)     Some documents, for example, the Pump Pit Tenancy Agreement dated 9 July 1975 is a pre-15-period document or the vendor has proved beyond reasonable doubt that this agreement had ceased to have any effects on the Property.

(3)     Although no attested or certified copy was made directly from the original, nonetheless the vendor succeeded in producing either a certified copy of a certified copy or a certified copy of an attested copy.  A certified or properly attested copy of a certified/properly attested copy would have satisfied section 13(1) and (2) of the CPO since, no matter how many times a copy is certified or properly attested, the document in hand is an exact replica (i.e. a true and complete copy) of the original.

55.Although certain original documents might be required to be produced by the vendor, a certified copy thereof is good enough to prove title and they included the following :

(i)     Assignment Memorial No. 2799428;

(ii)    Legal Charge Memorial No. 4460364;

(iii)    Legal Charge Memorial No. 4460370;

(iv)    20 documents referred to in requisition no. 26 in WKLL’s letter dated 8 April 2008; and

(v)     28 documents referred to in requisition no. 25 in WKLL’s letter dated 16 June 2008.

56.Accordingly, the plaintiff has failed in these proceedings as the defendant has proven good title to the vendor.

57.The defendant counterclaims for damages and it has been agreed that the hearing before me should only be concerned with the liability of the parties.

58.Accordingly,

(1)     The plaintiff’s action is dismissed with an order nisi for costs to the defendant, with certificates for two counsel, to be taxed if not agreed.

(2)     The defendant’s counterclaim for damages shall be assessed on a date to be fixed in consultation with counsel’s diaries.

Mr Jat Sew Tong SC and Mr Paul Lam, instructed by Messrs Woo, Kwan, Lee & Lo, for the Plaintiff

Mr Godfrey Lam SC and Ms Liza Cruden, instructed by Messrs Lo, Wong & Tsui, for the Defendant

Plaintiff's appeal allowed by Court of Appeal. Please refer to CACV251/2010 dated 23 August 2011