Chu Po Chuen v. Kwong Yip Co Ltd and Another

DCMP 1062/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1062 OF 2015

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REASONS FOR DECISION

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1.By the Originating Summons, the plaintiff claims the following reliefs:-

(i) A declaration that there is an error in the plan annexed to the assignment of Flat H on 6th Floor, Sheung Fook Building, Nos 92-98 Fuk Wing Street and Nos 143F-143H Kweilin Street, Kowloon, Hong Kong (the “Property”) dated 2^nd November 1971 (the “1971 Plan”) executed by the first defendant as vendor and Madam Lee Shun Yung as purchaser and registered in the Land Registry by Memorial No UB850145 (the “1971 Assignment”), namely, that the flat coloured Pink and marked “H” on the said plan is in fact Flat “G”, whereas the adjacent flat marked “G” on the said plan is in fact Flat “H”; and

(ii) An order pursuant to the covenants for title contained in the 1971 Assignment (the “Covenants”) directing D1 and D2 to execute a confirmatory assignment to rectify the error aforesaid or, in the event that D1 and/or D2 cannot after reasonable inquiry be found, an order pursuant to Section 38A of the District Court Ordinance[1] directing such person(s) as the court may nominate to execute the said confirmatory assignment.

2.The plaintiff is the current registered owner of the Property.

3.The first defendant (D1) was the developer of the building of which the Property forms part. 

4.The second defendant (D2) was the Administratrix of the estate of Madam Lee Shun Yung.  In 2011, D2 in her capacity as the Administratrix assigned the Property to the plaintiff.

Relief (i) Declaration of Error

5.In the plaintiff’s affirmation in support of the application, he described in detail what the error in the 1971 Plan was and how it was discovered.  In short, such error was discovered when he attempted to sell the Property and requisitions were raised by solicitors acting for the purchaser.

6.I am satisfied that on the evidence the court should be in a position to make the declaration sought in relief (i).

Relief (ii) The Covenants for title

7.The Covenants can be found on p 4 of the 1971 Assignment.  The Covenants pertinent to this application are:-

(i) “… the Vendor now hath good right and full power to assign the said hereby assigned premises in manner aforesaid free from incumbrances …”; and

(ii) “… the Vendor and all persons lawfully or equitably claiming under or in trust for the Vendor shall and will during the residue of the said terms of 75 years, 75 years, 75 years and 75 years at the request cost and charges of the Purchaser do all acts and execute and sign all deeds and writing reasonably required for perfecting this Assignment…”

8.The term “Purchaser” used in the 1971 Assignment is defined right at the beginning of the deed, which includes the then purchaser’s (Madam Lee Shun Yung’s) “assigns” where not inapplicable.  As an ‘assign’ of Madam Lee, the plaintiff enjoys the benefit of the Covenants.

9.Further, section 39 of the Conveyancing and Property Ordinance (Cap 219) provides that: “A covenant relating to any land of the covenantee shall be deemed, unless the contrary intention is expressed, to be made with the covenantee and his successors in title ...”  There is no contrary intention expressed in the 1971 Assignment.  Hence the plaintiff enjoys the benefit of the Covenants.

D1 and D2 cannot now be found

10.D1 has been wound up decades ago and D2 has emigrated and could not be found after reasonable inquiry.

11.Applying section 38A(2) to the present case, the court may order the confirmatory assignment or deed of rectification to be executed by such person as the court may nominate for that purpose. The suitable person for the court to nominate is the Registrar of the District Court.

12.In Goldsteady Investment Ltd v Fatima Estates Ltd [2000] 1 HKC 819, the defendant company was the plaintiff’s predecessor in title whose attorney executed the assignment on the defendant’s behalf.  The power of attorney was however defectively executed by the defendant company.  At the time of the hearing the defendant company was no longer at its registered office and could not be found.  Woo J made an order pursuant to s.25A of the High Court Ordinance appointing the Registrar of the High Court to execute a confirmatory assignment.

13.In Li Kwan Chuen v Vector Development Ltd [2009] 3 HKLRD 511, the defendant vendor was a BVI company who had mistakenly applied a wrong common seal when it executed the assignment in favour of the plaintiff purchaser.  At the time of the hearing, the BVI company had been struck off from the register of companies (although it had not been dissolved).  The plaintiff could not locate the BVI company and Sakhrani J, following Goldsteady, held that it was appropriate to make an order appointing the Registrar of the High Court to execute a confirmatory assignment in favour of the plaintiff.

14.The issue here is that D1 had already been wound up.  Could it be made a party in this application?

15.D1 was wound up in 1980 by its members’ voluntary liquidation.  From the company search result, the company seems to have been dissolved on 17 December 1980.

16.The court’s power under section 38A(2) to nominate a third party to execute a confirmatory assignment can be exercised if the person directed to execute it under a judgment “cannot, after reasonable inquiry, be found”. 

17.Mr. Yao for the plaintiff submits that a company that has been wound up is a company that ‘cannot be found after reasonable inquiry’.

18.Support for this view can be found in sub-para (c) of para [389], p.165, Part VI of Hong Kong Conveyancing Law and Practice, 2015, by Prof Sihombing and Prof Wilkinson, where the learned authors stated:-

“(c) Execution of documents by the Registrar of the High Court or District Court or the Registrar of Companies

Situations might arise where the company is unable to execute a confirmatory (remedial) assignment where, for example, it has been wound up. In this case the assignment might be executed either by the Registrar of the High Court or the Companies Registrar.

(i) Execution of documents by the Registrar of the High Court or District Court

In a case where the party who is required to execute the confirmatory (remedial) assignment is no longer in existence or cannot be found, the court may, under section 25A of the High Court Ordinance, order the Registrar of the High Court to execute the relevant deed.  Similarly a judge of the District Court may order the Registrar of the District Court to execute the relevant document under section 38A of the District Court Ordinance.”

19.Hence, the fact that D1 was wound up and dissolved, and hence no longer in existence, is no bar to relief (ii) sought under section 38A.

20.I grant the relief accordingly.

Mr Eric Yao, instructed by Peter W K Lo & Co, for the plaintiff

The 1^st and 2^nd defendants were not represented and did not appear