FAITHWAY ENTERPRISE LTD v. LEE WAN

FAITHWAY ENTERPRISE LTD v. LEE WAN

The Court of Appeal held the vendor's answers to the purchaser's requisition were neither sufficient nor satisfactory because Hong Kong law is unsettled as to whether a subsequent purchaser who takes with constructive notice is subject to any limitation period; given the arguable risk that beneficiaries could pursue claims, it would be improper to force completion. Consequently the appeal was allowed, the lower judgment set aside, declarations granted and the deposit ordered returned to the purchaser with costs.

Citation
FAITHWAY ENTERPRISE LTD v. LEE WAN
Parties
Plaintiff / Purchaser / Appellant: Faithway Enterprise Limited; Defendant / Vendor / Respondent: Defendant (vendor); Former Registered Owner / Trustee (declarant of Trust): Chan Koon Ying (Madam Chan); Original Assignor (1984): Pong Chung Toi; Transferee (purchased 1985 Assignment): Kwok Chun Ping; Beneficiary / Minor (claimant Potential): Ng Yuk Chan (Michael); Beneficiary / Minor (claimant Potential): Ng Yuk Chiu (Stephen)
Court
Court of Appeal
Jurisdiction
Hong Kong
Judgment Date
8 May 2007
Case Number
CACV419/2006
Procedural Posture
Civil Appeal (vendor and Purchaser Summons Under Section 12 Conveyancing and Property Ordinance) / Appeal From Judgment of Deputy High Court Judge Muttrie Dated 21 November 2006 (hcmp No.1021 of 2006) Court of Appeal Determination
Outcome
Appeal allowed; judgment below set aside
Legal Topics
Constructive Trust, Limitation Periods, Requisition on Title, Vendor's Right to Forfeit Deposit, Declaration of Trust, Power of Sale
Source Language
EN
Conveyancing and Property Trusts and Fiduciary Law Limitation Law Equity Land Law Constructive Trust Limitation Periods Requisition on Title +3 more

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Parties

Faithway Enterprise Limited

Plaintiff / Purchaser / Appellant

Defendant (vendor)

Defendant / Vendor / Respondent

Chan Koon Ying (Madam Chan)

Former Registered Owner / Trustee (declarant of Trust)

Pong Chung Toi

Original Assignor (1984)

Kwok Chun Ping

Transferee (purchased 1985 Assignment)

Ng Yuk Chan (Michael)

Beneficiary / Minor (claimant Potential)

Ng Yuk Chiu (Stephen)

Beneficiary / Minor (claimant Potential)

Procedural Posture

Civil Appeal (vendor and Purchaser Summons Under Section 12 Conveyancing and Property Ordinance) / Appeal From Judgment of Deputy High Court Judge Muttrie Dated 21 November 2006 (hcmp No.1021 of 2006) Court of Appeal Determination

Legal Issues

  1. 1 Whether the vendor's answers to purchaser's requisition on title were sufficient and satisfactory
  2. 2 Whether beneficiaries (minors) retain an untime‑barred claim in respect of the trust property
  3. 3 Whether a subsequent purchaser with constructive notice is a constructive trustee for the purpose of s20(1)(b) Limitation Ordinance

Ratio Decidendi

The Court of Appeal held the vendor's answers to the purchaser's requisition were neither sufficient nor satisfactory because Hong Kong law is unsettled as to whether a subsequent purchaser who takes with constructive notice is subject to any limitation period; given the arguable risk that beneficiaries could pursue claims, it would be improper to force completion. Consequently the appeal was allowed, the lower judgment set aside, declarations granted and the deposit ordered returned to the purchaser with costs.

Court Disposition

Appeal allowed; judgment below set aside

Orders

  • Appeal allowed and judgment of Deputy High Court Judge Muttrie dated 21 November 2006 set aside
  • Declarations granted in favour of plaintiff that the requisition on title had not been satisfactorily or sufficiently answered and that good title had not been shown