Requisitions concerning the identity of the seller

Chan Hei Leung Thomson v Kuo Yu Chien ([2012] HKEC 1255, DC) was a vendor and purchaser summons. The question was whether two of the buyer’s requisitions had been answered satisfactorily.

The first requisition concerned the identity of the seller. In the 2007 assignment to him he was identified by reference to his Taiwanese passport number. His 2012 agreement to sell the property identified him by reference to his Hong Kong ID number. There was also a suggestion of some differences between his signature on the two documents. The buyers sought a statutory declaration to confirm that the 2007 buyer and the 2012 seller was one and the same. This was not necessary in the circumstances. The same firm of solicitors (and the same person within the firm) had acted in both transactions and they were willing to confirm that the 2012 seller was the same as the 2007 buyer. This was sufficient; there was no real risk of a third party coming forward claiming to be the true owner ([8]):

‘In my view, approaching the matter from the stand-point of a willing purchaser and a willing vendor, both possessed of reasonably robust common sense and both intending to complete the transaction … the plaintiffs ought to have been satisfied that the defendant has satisfactorily answered any concern that they may have in respect of the defendant in the two instruments.’ ([14])

The second requisition asked for certain pre-intermediate root of title documents. The buyers argued that the sellers had not identified the document that was to be regarded as the intermediate root. The court held that the sellers had no duty to teach the buyer’s solicitors how to identify an intermediate root of title ([18]).

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Showing and giving good title

(Partially reversed by the Court of Final Appeal) A seller’s obligation to give good title requires him to produce all the original title deeds relating exclusively to the property which should be in his possession or power or clear and cogent proof of the contents of the document, the fact of its execution and of its loss or destruction. When showing (rather than giving) title the seller can produce certified copies of certified copies.

In De Monsa Investments Ltd  v Whole Win Management Fund Ltd ([2011] 4 HKLRD 478, CA) V had entered into an agreement to sell office space in Central to P. In showing title, it was unable to produce a 1979  pump pit tenancy agreement relating to the property but was able to produce a 1988 agreement that, it argued, had clearly superceded the 1979 agreement. The Court of Appeal held that P could not refuse to complete because of this: the question of whether or not it affected the ability to show a good title was to be judged from the standpoint of a willing vendor and a willing purchaser who  each wanted to complete the agreement that had been made.

Second, P refused to complete because it had only been given certified copies made from previous certified copies of certain title documents. Again, the Court of Appeal held that this did not entitle P to refuse to complete. This practice was legitimised by section 13(2) of the Conveyancing and Property Ordinance.

V’s inability to produce the originals of certain title deeds affecting the property did, however, mean that it was not able to give good title. They might have been used to create an equitable charge and the absence of the documents or of satisfactory proof that they were lost or missing would put P on notice of such a charge:

‘[A] vendor is required to supply all the original title deeds which relate exclusively to the property to be sold which should be in his possession or power. Otherwise, the vendor must provide clear and cogent proof of: the contents of the missing document; its due execution; and the fact of its loss or destruction.’ (at para. 47 per Tang V-P)