Proof of Title to Properties in Hong Kong

1. Duty to “Give” Good Title:

• Parties may choose expressly to agree that ‘the vendor shall give good title to the property’ or other alternatives mutually agreed.
• If Vendor agreed to give good title, his duty is to ensure that, by the completion date (or other date agreed upon) the nature of his title is neither defective nor defeasible.
• Section 13 CPO (cap.219): Vendor's duty to show title in no way limits the Vendor's obligation to give good title to the property.

2. Duty to 'Show' a good title:

• It is implied that it is Vendor's obligation to show a good title to the property.
• Manner of showing title: normally condition 9 of the 'Conditions that may be Incorporated by Reference' in Part A of the Second Schedule to the CPO: 'the vendor shall, in accordance with s13 of CPO, prove his title to the property at the vendor's own expense and shall at the like expense make and furnish to the Purchaser such copies of any deeds or document of title.'
• If no express provision as o the manner, s13(1) CPO stipulates the required manner.

3. What does the duty to show title include?

• duty to comply with s13 CPO in respect of the production of title document; and
• duty to answer requisition properly raised by the purchaser is not expressly required by s13 CPO, [duty to answer requisition properly raised by the purchaser is not expressly required by s13 CPO, but is a duty that will be implied by courts. (Active Keen Industries Ltd v Fok Chi Keong, per Litton JA) (CA)
  Case facts: Occupation Permit provided for 7 flats on each of the upper floors. Deed of Mutual Covenant and Plan attached to the assignment provided for 9 flats. Discrepancy arises. Held: Vendor may have a good title, the Purchaser had been justified in rescinding the Agreement on the ground that the requisition had not been adequately answered. This is a case of Vendor gets good title, yet to show a good title.]

4. Extent of Vendor's Duty to Show Title

• The extent depends upon the terms of the Sale and Purchase Agreement.
• In the absence of any express provision, the extent of the duty is determined by section 13(1) of CPO.
  [s13(1) CPO provides: Unless the contrary intention is expressed, a purchaser of land shall be entitled to require from the vendor, as proof of title to that land, only production of the Government lease relating to the land sold and:(a) proof of title to that land-
  (i) where the grant of the Government lease was less than 15 years before the contract of sale of that land, extending for the period since that grant; or
  
  (ii) in any other case, extending not less than 15 years before the contract of sale of that land commencing with an assignment, a mortgage by assignment or a legal charge, each dealing with the whole estate and interest in that land; (Replaced 31 of 1988 s. 6)
  
  (b) production of any document referred to in the assignment, mortgage or charge mentioned in paragraph (a) creating or disposing of an interest, power or obligation, which is not shown to have ceased or expired and subject to which any part of that land is disposed of; and
  (c) production of any power of attorney under which any document produced is executed where that document was executed less than 15 years before the contract of sale of that land.
• In other words, the vendor has a statutory duty to prove or show a title extending back at least 15 years from the date of the present contract of sale.
• Cheung J in Dawson Properties Ltd v Hong Kong Niroku Ltd: s13 CPO did not require the vendor to prove his title between the Government lease and the intermediate root of title. But, Cheung J went on to point out that, notwithstanding the provisions of s13(1), the purchaser was always entitled to show aliunde - ie from another source - that the pre-intermediate root of title was defective and to raise requisitions thereon: see Re Cox and Neve's Contract, Lo Shea Chung & Anor v Lo Hung Biu.
• The statutory provisions of the CPO for a period of at least 15 years that this statutory period can either be reduced or increased by the terms of the agreement for sale or the production of certain title documents is dispensed with. [E.g. the parties would be free to agree that the Government Lease need not be produced (Gold Check Investment Ltd v Star Investment Ltd (1992))]
• As such, to establish the extent of the vendor's duty, both statutory and contractual provisions must be read together.

5. Ultimate Root of Title - Government Lease / Conditions of Grant

• Ultimate Root of Title Document: Government Lease or Conditions of Sale, Grant, Exchange etc.
• If the Government Lease is less than 15 years old, it constitutes the sole root document.
• Unless otherwise expressly agreed, the vendor must always produce the Government Lease or a certified copy thereof. [Failure to produce the Government lease will constitute a repudiatory breach of the sale and purchase agreement entitling the purchaser to refuse to complete - Gold Check Investment Ltd v Star Investment Ltd (1992), unreported; BMC International Ltd v Star Win Co Ltd (1996)]
• Even if a new Government lease had been deemed to have been granted under the provisions of the New Territories (Renewable Government Leases) Ordinance (Cap 152), the purchaser was still entitled to a tangible and original Government Lease. (Barnett J, Gatewood Ltd v Silver Noble Investment Ltd)
• If the Vendor is unable to trace the original Government Lease / Conditions of Grant, the secondary evidence of all title documents (including the Government lease / Conditions of Grant and chain of title document) is acceptable by way of proof of title where that secondary evidence is sufficiently clear and cogent (Wu Wing Kuen v Leung Kwai Lin Cindy (CA) and Ip Foo Keung Michael & Anor v Chan Pak Kai (CA))
• Illegible Government Leases: a certified copy of a certified copy of Government Lease was illegible. One of these copies had been certified by an Assistant Registrar in the Land Registry. The learned judge in Wong Wai Ming v Tang Tat Chi (1993) held that the copy having been certified by an Assistant Registrar and there being no evidence that he had not properly discharged his duty of certification by satisfying himself that the copy he had certified had been a true copy of the original, the vendor's duty had been discharged. Secondary evidence was admissible as to the contents of the illegible certified copy and this was supplied by the production of the counterpart. However, if the parties expressly provide in the sale and purchase agreement that a legible copy must be produced by way of proof of title, secondary evidence will not suffice. (Mak You Hei Karl, Wong Kin Yee v Ho Chi Ming (1998))

6. Government Lease Includes any Letter of Modification and Deed of Surrender

• A vendor who has agreed to show good title must also produce the original or a certified copy of any deed of variation or letter of modification affecting the Government Lease. (per Deputy Judge Longley in Earning Code Ltd v Lau King Lin, Choi Lai Lai)
• Deed of surrender, if any, applicable to the Government lease needs to be produced. (per Jerome Chan J in Grand Money Lte v Tang Tak Shun)

7. Plans (Including Car Park Layout Plans) Referred to in the Government Lease / Conditions of Grant

• Where the Government lease/Conditions of Grant identify the property by reference to a plan, the vendor must produce that plan by way of showing title.
• Further, where the plan referred to identifies part of the property (or a right of way or land surrendered) as coloured (eg 'that part o the property coloured pink thereon'), the vendor must produce a plan that is either itself coloured or properly coloured coded. (per Tang J in Tai Wai Kin v Cheung Wan Wah)
• However, Deputy Judge Au took a somewhat more robust approach in Chan Wing Nga & Anor v Chung Chi Wai & Anor, where the vendor had only produced a certified copy of a sectioning plan annexed to a deed poll which was black and white without colour coding. HELD: the Purchaser's solicitor would have no difficulty identifying the lot being assigned despite the absence of colour coding since the section to be assigned had been clearly marked as the remaining portion of the lot and the proper acreage was clearly shown.
• A vendor must, by way of showing title, produce any car park layout plans referred to in the Government lease / Conditions of Grant. (Chen Paul & Anor v Lord Energy Ltd (CFA))

8. Intermediate Root of Title

• If the Government lease is more than 15 years old: the vendor must produce the intermediate root document, which is that document specified in section 13(1)(a)(ii) of CPO.
• The intermediate root document must either be an assignment, mortgage by assignment or a legal charge, each dealing with the whole estate and interest in land and must extend not less than 15 years before the present contract for sale of the land.
• A lease, equitable mortgage or assent does not deal with the whole interest in the land, they will not suffice as a good intermediate root unless expressly agreed to constitute such in the agreement.
• Many important documents falling within the pre-intermediate root period will be embracced within s13(1)(b) CPO. For example, if the relevant deed of mutual covenant, certificate of compliance, occupation permit, certificate of exemption or car-park layout plans are mentioned in the intermediate root document, they must be produced under this provision as they continue to affect the title to the property.

9. Chain of Title

• Not only must the root document or documents be produced, but, by way of proof of title, the chain of title must also be proved, extending, subject to any contrary agreement, from the ultimate root (where it constitutes the sole root) or intermediate root to the date of the present sale and purchase agreement.

Highlights of 'Good to Great' by Jim Collins

Chapter 1 & 2 Highlights:

1. To make the leap from good to great, there needs to be a Level 5 leader.

2. Level 5 leader = Professional Will + Personal Humility.

3.Two sides of Level 5 leadership:

• Professional Will:

• Create superb results, a clear catalyst in the transition from good to great.
• Demonstrates an unwavering resolve to do whatever must be done to produce the best long-term results, no matter how difficult.
• Sets the standard of building an enduring great company; will settle for nothing less.
• Looks in the mirror, not out the window, to apportion responsibility for poor results, never blaming other people, external factors, or bad luck.

• Personal Humility:

• Demonstrates a compelling modesty, shunning public adulation; never boastful.
• Act with quiet, calm determination; relies principally on inspired standards, not inspiring charisma, to motivate.
• Channels ambition into the company, not the self; set up successors for even greater success in the next generation.
• Looks out the window, not in the mirror, to apportion credit for the success of the company - to other people, external factors, and good luck.

4. Every goo-to-great company had level 5 leadership during the pivotal transition years.

5. Level 5 leaders embody a paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves.

6. Level 5 leaders set up their successors for even greater success in the next generation.

7. Level 5 leaders display a compelling modesty, are self-effacing and understated.

8. Level 5 leaders are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decisions.

9. Level 5 leaders display a workmanlike diligence - more plow horse than show horse.

10. One of the most damaging trends in recent history is the tendency (especially by boards of directors) to select dazzling, celebrity leaders and to de-select potential Level 5 leaders.

11. I believe that potential Level 5 leaders exist all around us, if we just know what to look for, and that many people have the potential to evolve into Level 5.

12. Larger-than-life, celebrity leaders who ride in from the outside are negatively correlated with going from good to great. Ten of eleven good-to-great CEOs came from inside the company.

13. Level 5 leaders attribute much of their success to good luck, rather than personal greatness.


Chapter 3 Highlights:

1. Level 5 + Management Team (Good-to-Great Companies) = Level 5 Leader → First Who (Get the right people on the bus. Build a superior executive team.) → Then What (Once you have the right people in place, figure out the best path to greatness.)

2. We found no systematic pattern linking executive compensation to the process of going from good to great. The evidence simply does not support the idea that the specific structure of executive compensation acts as a key lever in taking a company from good to great. (It's who you pay, not how you pay them.)

3. The purpose of a compensation system should not be to get the right behaviours from the wrong people, but to get the right people on the bus in the first place, and to keep them there.

4. People are not your most important asset. The right people are.

5. Six of the eleven good-to-great companies recorded zero layoffs from ten years before the breakthrough date all the way through 1998, and four others reported only one or two layoffs.

6. Those who build great companies understand that the ultimate throttle on growth for any great company is not markets, or technology, or competition, or products. It is one thing above all others: the ability to get and keep enough of the right people.

7. The good-to-great companies showed the following bipolar pattern at the top management level: People either stayed on the bus for a long time or got off the bus in a hurry. In other words, the good-to-great companies did not churn more, they churned better.

8. It might take time to know for certain if someone is simply in the wrong seat or whether he needs to get off the bus altogether. Nonetheless, when the good-to-great leaders knew they had to make a people change, they would act.

9. There is an important corollary to this discipline: When you decide to sell off your problems, don't sell off your best people. This is one of those little secrets of change. If you create a place where the best people always have a seat on the bus, they're more likely to support changes in direction.

10. Indeed, one of the crucial elements in taking a company from good to great is somewhat paradoxical. You need executives, on the one hand, who argue and debate - sometimes violently - in pursuit of the best answers, yet, on the other hand, who unify fully behind a decision, regardless of parochial interests.

11. The good-to-great leaders began the transformation by first getting the right people on the bus (and the wrong people off the bus) and then figured out where to drive it.

12. The key point of this chapter is not just the idea of getting the right people on the team. The key point is that "who" questions come before "what" decisions - before vision, before strategy, before organization structure, before tactics. First who, then what - as a rigorous discipline, consistently applied.

13. The comparison companies frequently followed the "genius with a thousand helpers" model - a genius leader who sets a vision and then enlists a crew of highly capable "helpers" to make the vision happen. This model fails when the genius departs.

14. The good-to-great leaders were rigorous, not ruthless, in people decisions. They did not rely on layoffs and restructuring as a primary strategy for improving performance. The comparison companies used layoffs to a much greater extent.

15. We uncovered three practical disciplines for being rigorous in people decisions:

• When in doubt, don't hire - keep looking. (Corollary: A company should limit its growth based on its ability to attract enough of the right people.)
• When you know you need to make a people change, act. (Corollary: First be sure you don't simply have someone in the wrong seat.)
• Put your best people on your biggest opportunities, not your biggest problems. (Corollary: If you sell off your problems, don't sell off your best people.)

16. Good-to-great management teams consist of people who debate vigorously in search of the best answers, yet who unify behind decisions, regardless of parochial interests.

17. Whether someone is the "right person" has more to do with character traits and innate capabilities than with specific knowledge, background, or skills.


Chapter 4 Highlights:

1. There is nothing wrong with pursuing a vision for greatness. After all, the good-to-great companies also set out to create greatness. But, unlike the comparison companies, the good-to-great companies continually refined the path to greatness with the brutal facts of reality.

2. Indeed, for those of you with a strong, charismatic personality, it is worthwhile to consider the idea that charisma can be as much a liability as an asset. Your strength of personality can sow the seeds of problems, when people filter the brutal facts from you. You can overcome the liabilities of having charisma, but it does require conscious attention.

3. Yes, leadership is about vision. But leadership is equally about creating a climate where the truth is heard and the brutal facts confronted. There's a huge difference between the opportunity to "have your say" and the opportunity to be heard. The good-to-great leaders understood this distinction, creating a culture wherein people had a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

4. Leading from good to great does not mean coming up with the answers and then motivating everyone to follow your messianic vision. It means having the humility to grasp the fact that you do not yet understand enough to have the answers and then to ask the questions that will lead to the best possible insights.

5. Like Nucor, all the good-to great companies had a penchant for intense dialogue. Phrases like "loud debate," "heated discussions," and "healthy conflict" peppered the articles and interview transcripts from all the companies. They didn't use discussion as a sham process to let people "have their say" so that they could "buy in" to a predetermined decision. The process was more like a heated scientific debate, with people engaged in a search for the best answers.

6. When you conduct autopsies without blame, you go a long way toward creating a climate where the truth is heard. If you have the right people on the bus, you should almost never need to assign blame but need only to search for understanding and learning.

7. Indeed, we found no evidence that the good-to-great companies had more or better information than the comparison companies. None. Both sets of companies had virtually identical access to good information. They key, then, lies not in better information, but in turning information into information that cannot be ignored.

8. A powerful device short pay by Bruce Woolpert at Graniterock. Short pay gives the customer full discretionary power to decide whether and how much to pay on an invoice based upon his own subjective evaluation of how satisfied he feels with a product or service. Short pay is not a refund policy. The customer does not need to return the product, nor does he need to call Graniterock for permission. He simply circles the offending item on the invoice, deducts it from the total, and sends a check for the balance. REASONS for short pay: "You can get a lot of information from customer surveys, but there are always ways of explaining away the data. With short pay, you absolutely have to pay attention to the data, You often don't know that a customer is upset until you lose that customer entirely. Short pay acts as an early warning system that forces us to adjust quickly, long before we would lose that customer." said Bruce Woolpert.

9. Scott Paper's and Kimberly-Clark's differing reactions to P & G bring us to a vital point. In confronting the brutal facts, the good-to-great companies left themselves stronger and more resilient, not weaker and more dispirited. There is a sense of exhilaration that comes in facing head-on the hard truths and saying, "We will never give up. We will never capitulate. It might take a long time, but we will find a way to prevail."

10. The Stockdale Paradox: (a key psychology for leading from good to great)
Retain faith that you will prevail in the end, regardless of the difficulties. AND AT THE SAME TIME Confront the most brutal facts of your current reality, whatever they might be.

11. All good-to-great companies began the process of finding a path to greatness by confronting the brutal facts of their current reality.

12. When you start with an honest and diligent effort to determine the truth of your situation, the right decisions often become self-evident. It is impossible to make good decisions without infusing the entire process with an honest confrontation of the brutal facts.

13. A primary task in taking a company from good to great is to create a culture wherein people have a tremendous opportunity to be heard and, ultimately, for the truth to be heard.

14. Creating a climate where the truth is heard involves four basic practices:
a. Lead with questions, not answers.
b. Engage in dialogue and debate, not coercion.
c. Conduct autopsies, without blame.
d. Build red flag mechanisms that turn information into information that cannot be ignored.

15. The good-to-great companies faced just as much adversity as the comparison companies, but responded to that adversity differently. They hit the realities of their situation head-on. As a result, they emerged from adversity even stronger.

16. Spending time and energy trying to "motivate" people is a waste of effort. The real question is not, "How do we motivate our people?" If you have the right people, they will be self-motivated. They key is to not de-motivate them. One of the primary ways to de-motivate people is to ignore the brutal facts of reality.

Basic Requirements for the Making of a Contract 1 - Offer (Contract Law)

Focus:

An "offer" is the first basic requirement for the making of a contract.

One needs to be very clear about the differences of two things - an "offer" and an "invitation to treat".

Definition:

Offer: A statement is an offer if the person making it intends to be bound as soon as the recipient accepts the terms stated.

Invitation to treat: An invitation to treat is an indication of a willingness to

conduct business.

Case Authority:

Must-know cases of distinction from "invitation to treat":

Gibson v Manchester City Council (1979)

[The City Council adopted a policy of selling council houses to tenants. The respondent tenant applied on a printed form for details of the price and mortgage terms. The city treasurer wrote to the respondent that the Council ‘may be prepared to sell the house to you at the purchase price of GBP2,725 less 20% = GBP2,180’. The letter gave details of the mortgage likely to be made available and stated ‘If you would like to make a formal application to buy… please complete the enclosed application form and return it to me as soon as possible.’ The respondent completed the application form and returned it on 5 March. Before contracts were prepared and exchanged, political control of the Council changed and the Council decided to proceed only with those sales where contracts had already been exchanged. The respondent sought specific performance of the contract, claiming that the offer in the city treasurer’s letter had been accepted by him. 

HELD: there was no binding contract because no offer capable of acceptance had been made by the Council. The statements in the city treasurer’s letter that the Council ‘may be prepared to sell’ and inviting Mr Gibson ‘to make a formal application to buy’ were not an offer to sell, but merely an invitation to treat.

Storer v Manchester City Council (1974)

[The City Council decided to sell council houses to tenants and devised a simple form for quick agreements which dispensed with legal formalities. The plaintiff applied to buy his council house, and on 9 March 1971 the town clerk wrote to him ‘I understand you wish to purchase your council house and enclose the Agreement for Sale. If you will sign the Agreement and return it to me I will send you the Agreement signed on behalf of the [Council] in exchange.’ The enclosed ‘Agreement for Sale’ had been filled in with details which included the purchase price, the amount of the mortgage and the monthly repayments, although the date when the tenancy was to cease and the mortgage repayments begin had been left blank. On 29 March, the plaintiff signed and returned this Agreement for Sale, but before the town clerk had signed the Agreement on the Council’s behalf, the Council changed political control and discontinued such sales unless contracts had already been exchanged. The plaintiff sought specific performance alleging a binding contract. 

HELD: a binding contract had been concluded. The Council’s intention was to become contractually bound when the plaintiff had signed the Agreement and returned it.

Other examples of "invitation to treat":

1. Display of Goods in Shops

General Rule: Displays of Goods in shops are merely an invitation to treat.

Fisher v Bell (1961)

[A shopkeeper displayed a flick knife in his shop window with a ticket stating ‘Ejector knife – 4s’. he was charged with offering the knife for sale contrary to s.1 (1) of the Restriction of Offensive Weapons Act 1959. 

HELD: a display of goods in a shop window with a price ticket attached was merely an invitation to treat and not an offer for sale so that no offence had been committed]

Pharmaceutical Society of Great Britain v Boots Cash Chemists (Southern) Ltd (1953)

[Boots was charged with an offence under the Pharmacy and Poisons Act 1933, s. 18, which required that sales of poisons in Part I of the Poisons List take place under the supervision of a registered pharmacist. Boots operated a self-service system, and a pharmacist at the cash desk was authorized to prevent the removal of any drug from the premises. The factor determining whether an offence had been committed was the point at which the sale in this self-service shop took place. The Court of Appeal agreed with Lord Goddard CJ.

HELD: Boots had not committed the offence. The display of goods on a supermarket’s shelves was merely an invitation to customers to make offers to buy.]

to be continued...

Brief notes on my approach of doing things

This is the first blog ever on the useful notes for LLB of UOL. My approach is to discuss the very basic theories, common law case authorities (with case contents) and/or statutes (Acts of Parliment) for the topic included. My aim is to give you what you need to master the topic in individal subject. Nothing less.

Note:
a.  the year of the case authority is not a must to be quoted in exam. It may give a good impression to the examiners though.

b. the case contents are also for reference only. However, if the question is concerned with an issue which is 80% or more similar to a specific case, briefly discuss the facts will definitely be a smart thing to do!

Hope you guys having some good time here. Let me know what you view by leaving me a comment. Thanks!