Archive for the ‘Title’ Category

Showing and giving good title

October 19, 2011

(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pit tenancy agreement relating to the property but was able to produce a 1988 agreement that, it argued, had clearly superceded the 1979 agreement.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)

Approach to raising and answering requisitions

May 6, 2011

When deciding whether or not a requisition has been satisfactorily answered, robust common sense is to be applied and there is an assumption of a willing seller and buyer.

In So Mariko v Tse Chun Chung John ([2011] HKEC 541, CA) Mr Ho died intestate and letters of administration were granted to his widow (Madam Ho). In 2001 Madam Ho assigned a flat forming part of the estate to herself and another (the 2001 assignment). Three persons joined as confirmors. There was a recital to the effect that the confirmors were the only people with an interest in Mr Ho’s estate. The flat was assigned twice more and came to be owned by the seller. The buyer’s solicitors raised a requisition seeking proof that there were no other people, other than the confirmors in the 2001 assignment, with an interest in Mr Ho’s estate. Madam Ho’s affirmation (which would have been the best proof) could not be obtained. Instead the seller proferred a statutory declaration made by the solicitor who prepared the 2001 assignment. The question was whether the requisition had been answered properly.

The Court of Appeal held that it had. The perspective is one of robust common sense and there is an assumption of a willing buyer and a willing seller. This was not a case of a necessary document of title but of corroboration of a statement in a recital in the 2001 assignment. There was no need for the best possible proof. In the circumstances, could the court be sure beyond reasonable doubt that that there was no risk of a beneficiary other than the confirmors coming forward to make a claim? The Court of Appeal held that this question could be answered affirmatively.