Effectiveness of evidence to show that an assignment was intended to have some other effect

Where a deed plainly asserts that there has been an outright assignment to third parties, external evidence to contradict the fact that an assignment has taken place is inadmissible. In these circumstances, the assignor’s interest under a resulting trust would, in any event, be postponed to the interest of a third party who derived title from the assignee without notice of the trust. Following registration of the assignment the assignor is  estopped as against such a third party from denying the truth of the registered details.

In Tsang Chuen v Li Po Kwai ([1932] AC 715, PC) Li Po Kwai (the respondent) assigned leasehold property to two assignees. One of these was his son and the other was himself (under an alias). On the face of the deed, this was clearly a sale by the respondent to two other people with the full consideration having been paid. The assignment was registered at the Land Registry. The memorial gave full details of the parties, property and price. Again, there was nothing to indicate that this was anything other than a sale with the purchasers having paid the full purchase price. The son mortgaged his half share in the property to Tsang Chuen (the appellant). The respondent claimed that the property was not subject to the mortgage. He had not intended the assignment to be a sale at all but merely a ‘marking out’ of the property as being intended (in principle) to be left to his son after the respondent’s death.

The respondent failed. First, his claim was an outright contradiction of the plain terms of the deed. External evidence to this effect could not be admitted. Second, if the respondent claimed under a resulting trust his interest would fail since the mortgagee had no notice and since the respondent had made it possible to deceive the appellant. Third, the registration of the details of the assignment at the Land Registry estopped the respondent from denying the truth of the registered details.

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2 Responses to “Effectiveness of evidence to show that an assignment was intended to have some other effect”

  1. McValen Kaminiel Says:

    May you please send me the brief case of Tsang Chuen v Li Po Kwai, including the facts, issues and the decision? This is for my law assignment. Thanks alot.

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