AU HON KWONG AND ANOTHER V. SURE WOOLLEN YARNS CO.LTD.

AU HON KWONG AND ANOTHER V. SURE WOOLLEN YARNS CO.LTD.

The mortgage was not validly executed because it bore the company seal but was signed by only one director contrary to Article 13 requiring more than half of four directors; statutory provisions and estoppel arguments did not cure that defect for the purpose of conferring a power of sale, so the purchaser's requisition was not satisfactorily answered and the title was impeachable or at real risk of being impeached.

Citation
AU HON KWONG AND ANOTHER V. SURE WOOLLEN YARNS CO.LTD.
Parties
Plaintiff (vendor): AU HON KWONG; Plaintiff (vendor): LEUNG KIT LING; Defendant (purchaser): SURE WOOLLEN YARNS COMPANY LIMITED
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 January 1993
Case Number
HCMP3979/1992
Procedural Posture
Vendor and Purchaser Summons (property Sale) / High Court Judgment (decision on Requisition)
Outcome
Declaration that the purchaser's requisition on the title has not been sufficiently answered and that the title is open to challenge
Legal Topics
Mortgage Execution, Authentication of Company Deeds, Company Articles, Title Requisition, Power of Sale, Estoppel, Conveyancing and Property Ordinance S.23, Conveyancing and Property Ordinance S.52
Source Language
EN
Property Law Conveyancing Company Law Contract Law Equity Mortgage Execution Authentication of Company Deeds Company Articles +5 more

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Parties

AU HON KWONG

Plaintiff (vendor)

LEUNG KIT LING

Plaintiff (vendor)

SURE WOOLLEN YARNS COMPANY LIMITED

Defendant (purchaser)

Procedural Posture

Vendor and Purchaser Summons (property Sale) / High Court Judgment (decision on Requisition)

Legal Issues

  1. 1 Whether a mortgage executed by a single director complied with Article 13 of the company's Articles of Association
  2. 2 Whether Conveyancing and Property Ordinance s.23 validates a defectively executed deed
  3. 3 Whether a document under hand and estoppel can cure the lack of a valid deed and confer a power of sale

Ratio Decidendi

The mortgage was not validly executed because it bore the company seal but was signed by only one director contrary to Article 13 requiring more than half of four directors; statutory provisions and estoppel arguments did not cure that defect for the purpose of conferring a power of sale, so the purchaser's requisition was not satisfactorily answered and the title was impeachable or at real risk of being impeached.

Court Disposition

Declaration that the purchaser's requisition on the title has not been sufficiently answered and that the title is open to challenge

Orders

  • Declaration that the purchaser's requisition has not been sufficiently answered
  • Costs of the purchaser of this application to be taxed (if not agreed) and paid by the vendors