PT SG2 HW

Question 1

Mr. Kim will have legal estate in the property by virtue of the Conditions of Sale. No
Certificate of Compliance is required, because the Conditions of Sale is entered into in 1955
(i.e. before 1970), and upon compliance of all Conditions, the Conditions of Sale is
automatically converted into a legal estate (CPO s14(2)).

Case law: XXX v Mao Chui Kwan (CFA case, confirming that no CC has to be provided for
these earlier Conditions)

Conditions of Grant is only an agreement for Govt Lease, the grant of the govt lease will be
conditioned on the compliance of all conditions

CPO s14(2) [deal with pre-1970 Conditions] -(3): to help you with proving the compliance
After 1970, the Govt has the practice of issuing CC (CPO s14(1): Issue of CC + registration
of CC in Land Registry = conditions converted into Govt Lease)

Interest within the agreement of lease -> not a legal estate under the definition in CPO s2
 that’s why it is equitable

Question 2

We can ask for the power of attorney of Tang Yin Foon (in relation to the assignment
executed by New Energy) and Lai Shui Ha (in relation to the assignment executed by Win
Concept), and their capacity to attest the assignment on behalf of the company.

Check whether the execution by common seal is proper

- Old CO: common seal must be used – signed by 2 directors, 1 dr 1 comp sec, 1 dr + 1
authorized person (this is from Table A)
Table A
- but the company may modify its articles to determine how a common seal is to be executed
- Articles of Associations (old regime applies – requirement of sealing and execution,
because the execution needs to comply with AoA)
 CPO s23 presumption of due execution? does not appear to be duly executed in this case –
no AoA provided
(Kan Yui Man Allen)

S23A(3):
“This section [i.e. s23A] applies only to deeds produced as proof of title to any land pursuant
to contracts for the sale of such land entered into on or after the commencement* of section 9
of the Law Amendment and Reform (Miscellaneous Provisions) Ordinance 2003 (14 of
2003).”

S20(1):
//In favour of a person dealing with a corporation aggregate in good faith, his successors in
title and persons deriving title under or through him or them, a deed shall be deemed to have
been duly executed by the corporation if the deed purports to bear the seal of the corporation
affixed in the presence of and attested by its secretary or other permanent officer of the
corporation and a member of the corporation’s board of directors or other governing body or
by 2 members of that board or body. (Amended 31 of 1988 s. 11)//

- we only have one person signing

- s23

CPO s20(1): three modes of execution: but now there is Only 1 signature, then x apply

S23 x apply, not deemed to be duly executed (coz we don’t have the Company’s articles to
see how the common seal is required to be executed)

S23A(2): conclusive presumption 1988-2003.5.9 (so out of range stipulated in ss(3), x apply)
- and in any event, CPO s23A(2): only for deed not less than 15 years before the (present)
contract of sale
New CO = 2014

Assignment are passing legal interest, and legal interests can only be passed by deed (CPO
s4)

Exam question: think about whether you are using the new CO regime or the old CO regime

In the old regime: for execution of deed, must be by common seal

Presumptions relevant:
- s20-s23, s23A
 but none of them can apply here
 so we need to raise requisitions

In exam, you can mention both s23A(1) and (2) apply – if they do apply
 although s23A(1) is redundant, coz the period is also covered by s23A(2)

BUT: In this case, you should mention both do not apply

Lee Ying Ching: AoA provided by the Vendor: the requirement was the common seal needs
to be affixed in the presence of the chairman of the board or by any 2 directors jointly
- the signatory clause was signed by a director only
- so we are not satisfied with the execution: you are not sure the director signed is the
chairman
 evidence is required to prove that he is the chairman
(However, if in that case, it is signed by 2 directors, then ok, appears to be duly executed)

We can also ask for the board resolutions of Win Concept and New Energy to show that the
board of these two companies have duly approved to enter into these two property
transactions.
- and perhaps, the articles may specify that the person to attesting the assignment has to be
authorized by the board  this also requires the board resolution
e.g.
The requirement is 2 directors, or in the manner the directors shall from time to time by
resolution determine
- In the document: “director signed as authorized by the board”  then just trust it
 no need to raise requisition, no need to ask for board resolution

First, look at the Company’s articles

-

Under the New CO, the company may choose to execute the deed under hand; or common
seal
 but many companies will still choose the old way to use a seal
(then you need to ensure you are complying with the sealing requirements in Articles)

Li Ying Ching case – have a look at it if you have time

- Treadeast case distinguished

For the second assignment (regarding New Energy Investment), the absence of the execution
of the assignment by the purchaser does not affect passing of the legal estate, does not affect
title to the property (only the Vendor needs to execute the assignment properly)
(Choi Hung Investment case)
- Absence of Purchaser’s signing & execution: It may affect the enforceability of the
covenants, but not the passing of the title
 So: you don’t have to raise requisition for anything

But when New Energy becomes the new Vendor for the next assignment, then you need to
look at whether the assignment is duly executed (e.g. common seal? Affixed in accordance
with the Articles?)

Another case: Lau Kwok Cheong – due execution by the grantee

(invalid execution of the grantee (of the land from the Govt) does not affect title)
Question 3

This clause does not oblige the parties to execute a formal S&P agreement. (Man Sun
Finance: it depends on the intention of the parties entering into the contract; reading both the
Chinese and English version: both suggests that the parties do not have obligation to enter
into formal S&P)

Chinese version: implies this obligation to pay (Clause 18: the Chinese version will prevail)
However, there is an obligation to pay a further deposit of HK$270,000 on 7 October 2024 in
the absence of a formal S&P agreement. (See Sze To Keung (CA), the clause is almost
exactly the same as the one in this case, in Sze To Keung, there is also a clause that “Chinese
version will prevail”: the vocal point is the purchaser has the obligation to pay on the
specified date, not about entering in formal S&P or not, so the purchaser has obligation to
pay)

- if the Purchaser has the obligation to pay further deposit, but fails to pay = repudiatory
breach of the contract  Vendor can rescind from the contract

Luxebond case (LG8): a good summary of the principles in earlier decisions

 on whether the obligation to pay further deposit is linked to the obligation to enter into
formal S&P

*** VERY EXAMINABLE

- It is not always the Sze To Keung case, if the S&P in exam says the English Version
prevails, then Sze To Keung case does not apply

Question 4

(A): should not agree on this clause.

 The vendor cannot insert a clause to exclude the purchaser’s right to raise requisition in
the formal S&P (DH Shuttlecock)
- De Monsa (CFA): the Seller must give good title under s13A (regardless of any express
duty in the assignment or not)

- cannot insert a clause that is inconsistent with the Vendor’s implied duty to give good title
(regardless of any express duty in the assignment or not)

- illegal structures may affect good title (Jumbo Gold: see also real risk test), and the Clause
to be inserted in this case has the effect of taking away the Purchaser’s right to raise
requisition on whether there are illegal structures (contrary to Building Ordinance)

Chu Wing Ning case: cannot insists on inserting a term that is not in PS&P, unless the
Purchaser agrees (otherwise, this is a repudiatory breach)

- the court allows the parties to negotiate the terms, it is only when the negotiation fails, and a
party is still unreasonable in persisting to include the term  then there will be a breach
- repudiation is not to be lightly inferred
(has to be “that extent of unreasonableness”, needs strong inference of that kind of
persistence by evidence)

So in total, 2 points:
(1) cannot insert a clause to exclude the purchaser’s right to raise requisition in the formal
S&P (DH Shuttlecock). This is inconsistent with the implied duty to give good title (De
Monsa, CFA)
(2) cannot insert a clause that is not in PS&P (Chu Wing Ning), unless the parties agree.
 Unreasonable insistence on including such a clause may possibly become a repudiatory
breach (though the court should not lightly make this inference)

(B): should not agree on this clause

 The Receipt Memorial in 1993 (i.e. the Discharge of Mortgage) cannot be the intermediate
root because it is not an “assignment, mortgage or legal charge” under CPO s13(1)(a)(ii). The
correct intermediate root should be the Mortgage in 1987.
(although it is possible to contract out the application of CPO s13, it is not good to do so)

- the Vendor has the duty to prove good title

- if Mr Kim accepts that a younger document to be the intermediate, then if Mr. Kim needs to
sell the Property to another purchaser  then Mr. Kim cannot produce the earlier document.

Notes:
- Occupation Permit needs to be provided – case law stuff? (Lui Kwok Wai)
- requisitions should be raised by xxxx (case law stuff?)

CPO s13A:
(a) Original of Government Lease also needs to be provided if it relates exclusively to the
land
 i.e. if you only buy a unit of a multi-storey building, and the govt lease relates to the whole
building / lot = no need to provide original
(b) original of documents under s13(1)(a) and (c) (relates exclusively to the land), no s13(b)
 so just the documents from the intermediate root & PoA

For documents that you don’t have to provide the originals

If the original is missing (De Monsa, Kingdom Miles)

 is it really affecting the title? Yes (though in a lot of NT land, the originals are missing)