Execution of deed on behalf of mainland company: presumption of due execution

In Liu Xiaodong v Chase Eagle Development Limited ([2013] 1 HKLRD 933, CFI) a mainland company (C) gave W a power of attorney to sign a deed on its behalf. The attestation clause read:

‘SEALED with the Transferor and SIGNED and DELIVERED by [W] the person(s) duly authorised by the governing body of the Transferor.’

W alone signed on behalf of C. There was an opinion from a mainland lawyer. This was to the effect that the person giving the opinion was a mainland lawyer applying mainland law and that the execution was valid. The court held that this would ordinarily be sufficient proof that the document had been properly executed ([36] – [45]).

This was not the end of the matter, however. The transaction was of such a size as to fall outside the scope of the authority conferred by C on W. This defect was fatal and could not be cured by the production of the opinion of the mainland lawyer.

Nor could it be cured by section 23 of the Conveyancing and Property Ordinance. The mere fact that the attestation clause included the ‘magic phrase’ duly authorised by the governing body’ was not enough to bring the execution within section 23.

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