1949-06-10 — Page 5

THE HONGKONG “TELEGRAPH,

OCCUPATION HOUSE SALE APPEAL DISMISSED

Judgment Against H. K. Woo

The appeal brought by Hangkam Kwingtong Woo, solicitor, against the decision of the Chief Justice, Sir Leslie Gibson, in awarding judgment to the respondent (plaintiff in the original action) for specific performance of an agreement for the sale of No. 48 Ken- nedy Road, together with an order that Woo execute a proper con- veyance of the property, was dismissed by the Full Court of Appeal this morning, when written judgment was delivered by Mr Justice Williams, with whom sat Mr Justice Scholes,

•

The grounds of the appeal were that the Trial Judge was wrong in law and in his application of the principles of equity to the facts.

the from encumbrances, Mr Sheldon, I and

1

-20)

It is therefore necessary to con- sider the purposes of the dinance.

I short ütle is lo (Occupation Debtor and Creditor Period) Ordinance. The important sections are, 3, 4 and 5: they fix the basis for payment of debts 11:0 contracted before and during occupation period, They are opera- Jim tive betwas! a debtor and creditor or as in the present case.

and the. between a mortagagor mortgegee. We come then to sec tion 1. By section 11(2), where the legal nction set out in section TORS 11(1) exists, the mortgagra call on the mortgagor to reinstalo the mortgage or replace it. If the mortgage by section 111) attached itself to the property, whhi in the object of staling in section (2) that a crediter max cal on debtor to replace the security as an alternativa to reinstating #7 Only in one case may any credi tor call on any other person but the debtar to reinstate or replace the security-namely, where a third security. furnished the (2) Where the rights of a crediker party has in respect of a recurity have been which is not applicable, here, of this scellon not to have been ex deened by virtue of subsection (1) tinguished or diminiifted.

Mr Eldon Potter, KC,

on the qiher hand, contends thei the mortgagoes have only a personal lion. Les d'Almada, KC, Mr Brook A. Bernacchi, all

covenant grains! the appellant which ho can discharge by payment or by instructed by Mr Woo, appear-

witha equivalent ed on behalf of the appellant. replacement

securities. The respondent, Liu Lan-fong, Section 11 of the Debler & Credt

Ah-lan, widow of tor Ordinance reads: "einstatement alias Liu Koo Shui-ting, allas Koo Wan- of securities 11. (1) 18 any case

where a

debt purporting to have Com-

"been decharged in whole or in part sing, of the Shul Iling

Nos. 187-105 Den Vocux by Dayment in occupation currency Road Central, was represented by virtue of the provisions of this by Mr II. G. Sheldon, KC, Mr Ordinance deemed to be wholly or partly undischarged at the com. John McNeill and Mr D. A. I..mencement of the Ordinance and Wright, all instructed by Messra where the payment of such debt before such purported discharge as Hastings and Co.

furtsold was secured by any mort- In the

action before the

gage charge len runtantes indem- Chief Justice, Liu Lan-fong, as ally or other form of security the administratrix of the estate of rights of the creditor in relation to acts tortgage charge en guarantee her late

Koo Shul- Indemnity or other form of security husband, Ung, was granted specific per- mail be deemed not to have been formance of an agreement dated extinguished or diminished by such August 18, 1943, and made lie-purported discharge. tween Koo and the appellant, H. K. Woo, for the sale by By Woo of No. 40 Kennedy Road.

Giving judgment, his Lordship in) o creditor may give notice in writing of not less ien one salil: This is an appeal from a decision

of the learned Chief month calling upon the debtor and any third patly who furnished the Justice in which he ordered rarity in reiskiate ar replace much of an wecurity and to execute all docu- specifle performance

10, ments and do all acts necessary for ngreement

notts that purpose; and in delaull 1943, made between the respoli compliance therewith the Supreme dent's Inte husband, Koo Shlu Court may, on application by the Tink allay Koo Wan Sing, and creditor an an originating mummons. the appellant, Ifangkam Kwing- make such order as to Ue Court tong Woo, for the sute of pro-hall seem $1 to reinstate the necurity or replace it with other perty known as No. 48, on equivalent security and to execuic all documents and do all acts nedy Road, Hongkong.

The facts are not in dispute necessary for that purpose. 140 out in and are fully set judgment.

Additional evidence was called before this Court, mainly in a claim made by Ko respect of Ho-ning, formerly second mort- Bugco

property, some of the timo after judgment had been In view of the pronounced fact that he had previously declared in writing that he had the further claim under mortgage, his present statement contained in a letter of March 4, 1940, that he now desired to claim the sum of $39,034,02 because the previous money

under was accepted by him

no

of

J

the

da ze. Air Polter argues that the

Should the mortgagor not reln- state or replace the securly, the mortgagee may apply to the Court and the Court may order the mort gagor lo do so. If the mortgagor, laving got in the legal estate froin assigned it to n the mortgagee,

the occupation purchaser during

our opinion perind, then in dated August

inortgagor cannot now reinstate it, nor will die Court order him 18

the Ordinanco legislature Under deliberately afforded no protection to a bonn de purchaser. In our opinion thle is ons so, because the rights of the credlior under rec tion 11 (1) are limited under the provisions of section 11(2). There Cases where the the must be mony

accu- mortgagor has, during antius period, paid off the mort Hage and then "assigned to a pur- chaser in fact the property may have subsequently passed through many hands. There is no reason why the mortgagee should be put in the very privileged position vis-a- Abona do purchners for which Mr Potter contends. We hold

duress, carried little if any

weight with us,

The grounds of the appeal are (1) that the trial judge was wrong in law, and (2) that he was wrong in his application of the principle of equity to the facts.

Before considering the argu- ments in detall, we may sun marise them briefly. Mr Potter, for the appellant, contended that effect of the Debtor & tho

Creditor (Occupation Period) Ordinance, No. 24 of 1918, wan that the mortgages re-attached and in con- to the property sequence the agreement had been frustrated.

USE OF WORD

to

dinance a whole, the mortgages in this ease under the legal fiction contained in section 11(1) retains his rights to the legal estate s

FRIDAY, JUNE 10, 1949.

Lilienthal⠀⠀ Answers His Accuser

the

David Lilienthal (right) chairman of Atomic Energy Commission, answers questions fired at him by Sen. Bourke B. Hickenlooper (left) as three-week probe into management of United States atomic energy operations opened before

joint AP Picture. atomic commission in Washington,

More Clashes

Indonesia

A

In

JOGJAKARTA EVACUATED

Batavia, June 9.The Dutch authoritica of 40,000 today reported that the evacuation persons from Jogjakarta had been completed, while Dutch-Indonesian clashes throughout the area increased.

Dutch officials said the Republican forcce had stepped up the frequency of their forays against Dutch outposts and patrols near Jogjakarta and claimed that an increasing number of terrorist raids were being made upon the population by Communists.

Jogjakarta is being cleared in:

scheduled.

of the Indonesian republie, but with conditions which are such that members of the United Nations Commission here doubt that the city will be returned to only and that once the mortgagor had assigned to a bona fide partie Iepublicans by mid-June as chaser, the only remedy for the mortgagee la to call on Use mort gavor to provide equivalent pocuri 13. The word "deemed in operative here only between the mortgagor and mortgagee, and without pre- Judtee to the rights of bona fide purchaser. We therefore agree with the construction put on section 11 by the trial judge.

FRUSTRATION

For a week Indonesian troops have harassed evacuee convoys leaving the city,

A number

units of guerilla been "neutralised" have now according to the Dutch.

The Dutch authorities added, however, that guerlila activities Jod also increased

cmcial Surakarta. One "During action in this Netherlands troops found fighting groups relatively well-equipped with arms."

педт said: arca,

д

300 Karens Killed, Govt. Claims

Rangoon, June 9.-Three hun- dred Karen Insurgents are re- poried to have been killed when Government planes bombed and strafed the Delta district of Maubin, 40 miles south-west of Rangoon during a meeting of about 1.500 Karens, the Burmese

Army Radio claimed tonight.

The Karen President, Saw Ba U Gyl, was reported yesterday to be in

the Maubin district conferring with the Red Fing Communist leader Thakin See. He was not clear, however, whether he was at the bombed

He added that in Central Java the Dutch had carried out major clearing action, killing or capturing 80 "gangsters."

iso said that since the renewal of Indonesian-Dutch fighting in December, the Dutch had seized

and thousands of rifles, as well as tons of ammunition.

(b) where any person neglects or refuses to comply with an order under paragraph (s) at this sub- directing him to execute section. any such documents or to do any much-act the Court may on such terms and conditions if any as may be Just anminate any person exerute such documents and to do such nets and any documents o holl executed or act ko dinne operate for all purposes as if it had that, on the reading of the Or preparation for lis role as capital been executed or done by the per- son originally directed to execute ar do the same.

between linzelt and the mortgagor (e) the creditor may give notice 10 any company the in writing stock stare bands or debenture of which were subject to any charge of a to such creditar by way security as aforesaid and upon the receipt of such notice such com- record Dany shall not permit or any transfer of such security until the debtor or any third party who has furnished the security has re- instated or replaced such security or in default thereof the Supreme Court has made an order under paragraph fal of six sub-pection." section part of The Important

We come next to deal with the 111) so far as this case is con cerned in where the payment of

question nf frustration. The such debt before much purported discharge as aforesaid was secured agreement in 1043 was for the sale by any mortgage....the rights of the of No, 4. Kennedy iload free from 11 **** nol a to such mort- | encumbrances:

complete agree creditor in relation

not to severable but n page....shall be deemed have heen extinguished or diminial ment. Mr Potter argued that as the mortgage by section 11(1) of ed by ruch purported discharge."

the Deblar & Creditor Ordinance now attached to the property freed in 1943, the property could not be It is considered that the legisin old free-from- encumbrances - and, tract was impossible in the man- are used the word 'deemed therefore, performance of the con- exuse the section deals with debla

ner contemplated in 1942 It was

meeting. time of repayment

In the Pyapon district, south which at the

In on this construction of section 13411 800 mortars, 450 machine-guns been discharged

of Maubin, 40 rebels were killed that he mainly argued the question Mr D'Almada submitted that had in fact

of frustration. In reply to a ques-** the whole or in part, In respect of the

and several wounded in a dawn- the

he, nub- specifie performance, of

meaning at the word 'deemed,

tion pul by the Court

In East Java, it was reported to-duak battle in which there learned agreement ought not to be or-Reading C. J., wald in The King V.

Government casualty, dered because of the equitable The Westminster Assessment Committed that, even it thro

had only a remedy on the of hardship, the appel-mittee (1917)1 K. B. 12 at 30 judge was correct that the mort that guerillas were threatening was one doctrine of

clashes with referring to the word 'deemed in

personal covenant, the doctrine of sugar production and were en- the Radio sald #aged in more lant being now required by the section 65 of the Valuation (Metro

frustration would still apply.

Communists. In the Buitenzorg provisions of the Debtor and polls) Act. 1000, that the intention

south of Batavia, Indo Creditor Ordinance to phy

ais in treat as a fact something

Applying the definition of frustra zone, flon given by Viscount Simon in nesian patrelling was. reported. sum to discharge which has not been established as

& Invest- considerable

A fact-even something which can though 'the mortgages,

they be shown not to be a fact, in The Cricklewood Property

County Council of ment Trust Ltd. v. Leighton'a In-United Press.

231 discharged to the satisfacqueen The were

ZZA, can I be antd that

D.-Twp June tion of both mortgagees in Sep-| Norfolk 60 L. J..Q. B. 370 Cave J.vestment Trust Ltd., 1915 A. C.

wald: tember, 1943,

ส 20 Ordinance "When you talk of a thing be effect of the passing of the Deb

the chance of setting off against) Frankfurt,

children, A girl of for A Creditar

RK to be regarded this extra expense the profits hej German

of could, but for the agreement, have eight and boy of 14, were Mr Sheldon contended for the ing deemed to be something, you

killed both as striking at the rost that the effect of the do not mean to say that it in lat fundamental

their sleep here last respondent

the Light when tho contemplated able market of today. If i had ro

make-shift Debtor and Creditor Ordinance which it is deemed to be. It is

yond What WAS

happened that the value of parties

when they rn- was to give the mortgagees only her an admission that it is not the agreement and as entirely be made by selling in the more favou

the ceiling of their bomb-damaged The properly had dropped below the enforce that notwithstanding it is not that by the

for

Agreement. a personal covenant

price paid, the vendor would er bedroom collapsed.-Reuter. tered into

tainly suffer no hardship if he was fast able against the appellant: that particular ing

ly beyond what either vendor or now asked to complete. In there had never been any decl-the purposes of the Act, it is to passing of the Ordinance was clear- sion of a Court that an agree- In ex parie Walten 30 L. J. Ch. purchaser contemplated. Its effect is that the mortgagor is now liable to ment for a lense could be frus-002 James L.3. said

when A statute enacts that pay additional sums to the mort trated.

fact that it striker at the root of the the correct principles of equity have been done, which, in had been rightly applied by the end truth, was not done, the Court agreement. The foundation of the trial judge in coming to his de- 15 entitled and bound to ascertain contract was that the vendor would and between sign the lease to the purchaser for what purposes cision.

what persons. the statutory fiction free from encumbrances and

agreed purchaser would pay the EFFECT OF ORDINANCE is to be resorted to."

Mr Potter submitted that the ob- purchase price. The latter has ful- It is first necessary to consider jeet of section 11(1) was to profiled his portion of the agreement effect of the Debtor & tect the creditor (the mortgagee), there is nothing to prevent

at on the broad ground that to decrea Creditor Ordinance on the rela-the vendor and the purchaser be- vendar now failing his part of based his defence. In equity solely

ing left to their rights at comman

the agreement. Lord Goddard

ense specific performance would, work tions between

construction put

has hardship on the appellant. At the and the appellant.

on section 11 by

when considering frustratiort

respondent's late husband Both

marigages жего

pre- is contained in the following pa also emphasised that frustration trial, allegations of fraud on the part to raised in the pleadings were aban- occupation mortgages and were sago on pars 3 of his judgment:

"Once the legal estate had (un- applies only where the foundation of the

of the contract to destroyed been that performance is no longer posdoned by, the appellant. Allegations and sible. Obviously in this case per- of duress or undue inuence (e.. property assigned to the purformance is now possible and we that the purchaser was influenti the time of the agreement, but the do not think section 11 corsider the Judgment of the trial with the Japanese) were made at without repayment having been would have oparated to divest the cuore correct that there was no the trial but there was no evidenco demanded. The 1st mortgagee, legal estate. No doubt the mort frustration.

Roger would have remained Table

the

what it is to be deemed to be, and

nevertheless,

be deemed to be that thing."

at

the price of the properly

han

soared, and this being so the ven

amount

Minor clashes were reported in the Mandalay area, where Government forces are mopping up rebel pockets-Reuter.

He also submitted that something should be deemed Farsex that so fundamental had bargain in itself de bargain, A SIDE GLANCES

10

the mortgagees law or equity. The trial judge P. 243 m the Cricklewood

completely discharged by pay-der the then existing law) ment In Military Yen at about got in from the mortgagees

th

to unfairness or hardship and there

is no doctrine of equity to deprive

a purchaser of a good bargain in 19 has been fairly made."

HARDSHIP

the Mr D'Almada for the appellant

In fost, 'exccuted a reassignment an his personal covenants to-com- We come Anally to the question of the mortgage. An assignment with section 3, but a regards of whether the Court should, or the of the property was executed in the legal estates of the mortgagees der specine performance of

1043 agreement, The tetul judge has favour of the purchaser in section 11(1) merely provides thist

panese, the mortgages shall be deemed not set out very lucidly his decision Japanese, to English, Chinese and

to have been extinguished, ie, it And his grounds for it at pazes was never creates a legal Action, and the cop- # and 10 of the judgment. but the transaction carried to completion by regis-sequences of this legal fiction are relevant portion reads: tration either with the Japanese set out in section 11(1). There is

nothing in section 11(3) to suggest There remain the questions or inter after the occupation. that where, under the law existing unfairness and

Under the agreement for sale before the Ordinance, a mortgages which arise when an equllable re

undertook to the appellant

to give in fost the legal estate in favour medy is sought, Now there is no

The

..

whatever to support them and the learned Judge expremedia surprise that these allegations were not with- drawn. Bebire ua, Mr D'Almada did not contend that there was anything conduct of the whatsoever in the

purchaser to marit censure.

Mr D'Almada cited a number of eases on the doctrine of harishio with respect to decree of speèifle

of performance but none are, in our

hardship-matters opinion, of great relevance in ann

nection with the present case. We applicable. The discretion of the must condder the general principles

of a purchaser, the purchaser must evidence that, the purchase price a title, free, from encumbrances provide security, the vendor could of the property axed by the agree Court' to grant specifo 'performance mortgage oncament was unfair and the mortgages were paldant revive the

tion

is not exercised if the contract is

not equal and cair, The unfairness,

for as a rule, must be determined at the

Creator Ordinary Yen dro / Mr. Polier contended that section Japanese official rate by the data traet unfair (paragrapha 414 & 410

ments made in

or inadequate. off to the satistaction of both purchaser had required the legal) The black markel' exchange

estate and all he could do, or be yan was falling in the latter part mortgagees. By

By reason of boc- 9 (2) (11) of the Debtor and bed by the Court to do, would of 103 but there is no evidenostims the contract was made, That

to replace the imortgage

with as to re extent that the black a contingency turns out adversely to market tato had diverged from the one party does not render the con- the pay equivalent security

of 3 Hailsham p. 260). As a general, machinery which of the screement. There is certain- 11 (2) Wa

the agreed rule hardship, to operate as a ground –

of defence, must be moch, as existed subject to a re-valuation, the creditor could use if he consider-ly no evidence that

prien was so grossly inadequate na

at the time of the contract, and not 500 result of which is to make the ed it of assistance but that it was lo be evidence of traud,

such as unnecessary for the 1st mortgages

has arisen – mibaoquently ajipellant now liable to pay con- to do so, an by nection 11th, the fallstam Vol 1 page 371 pora

#raph 425 and the cases there from a change of etrcumstances, siderable sums to each mort-legal estate again vested in film.

(paragrach 420 of 31, alishan kelted. Alt that has happened t

1.300). We can find no reason to gagee before there is vald dis-

that it will now be much more

differ from both the reasoning and expensive for the vendor to CATT out the agreement than he conclusion of the trial judge is tha

charge of the, mortgage debts.

* We come then to the interpretation otectian 11 of the Debtor & Cradl

LEGAL FICTION

exercise of his discretion to decres 10 specifte performance,

Are the consequences of the legal expected, but we' 1" have pointed -tor: Ordinance.. Me-Poller contenda fellon wok out in section 11(1) as out, the, vandar., would, havą“ -that, the effect of sections" 11′′ (1), 5′′

Mr. Polter conatnds or in section meat this extra expense whether The result is therefore, that the posarlas men® ren Lach to the 11 (3) as was found by the learned the agreement is specifically per ampsel • diamined with costs and

chem therefore noi frem. „Judra?.

EDITDNC or: not.. He is merely loan the judgment in the Court below

Pakistan

Premier ROXY

To Visit Moscow

Landon, Jano D. Oficial British - sources today sald they saw ́"nothing sinister" in the projected visit to Moscow by the Pakistani Prime Minister, Mr Liaquat All Khan.

The omcials said there were no algns of Paklatan leaning to- ward the Soviet bloc, although, they added, there might have been such fendency soon after the partition of India.

A change in Pakistani polley came between six and 12 months ago, when Pakistan began to get assistance from Britain, and Bri- tish ·businessmen flocked to Karachi, according to the off- clats.

Commonwealth Relations quarters mid the projected visit would be quite in accordance with Commonwealth principles and that any Commonwealth Premier was at liberty to visit the Soviet Unlon, which is still a friendly power.

кал.

The omelato "sold, however, that Mr All Khan might lake the opportunity during hle visit to seek Soviet co-operation in easing the existing tension be- tween Palcision and Afghanle-

British

press reports some significance in the timing of Mr All Khan's visit to Mos- cow and speculated that It would be arranged to colneide with the Indian Prime Minis- ter's visit to Washington. Om- clal quarters discounted these elaj reports.

It was pointed out that Russla and Pakistan had ogreed to exchange diplomatic relations ก year ago, but the fulfilment of this had been retarded by Rus- sian demands for the establish- ment of a Consulate at Pesha- war, which is the centre of a disturbed tribal area.-United Press,

Officers Attacked

(Continued from Page: 1) The striking workers threw picket lines around the build- ing today after 200 of thera stormed

through offices last night, disarmed the German guards and roamed from room to room ripping down the plc- tures of Stalin and Lenin. Although the building is in the American sector, it is consider- ed extraterritórial Soviet pro- perly.-United Press.

BOMBER CRASHES

Bossier City, La., June 9.----A four-engined B-45 jet bomber trom Bordsdale field crashed and exploded today. Two nir force men wero reported have been killed and one sert- ously injured,United Press.

to

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AGREES

· (Continued from Fago 13:

Austrlad Buhrters

did not

Mr Vahinaky vetoed, that and next few days would regain her insisted that Austrin could not freedom and see the withdrawal be discussed until after all of the occupation troops. German. Iteme, on die agendo were completo

The talks between Me Vyshin share Me Bevin's opunum. on sky and the Austrian Foreign the possibility of carly agree” Minister, Mr Kari Gruber, onmement on the Austrian treaty, shortly after the British Foreign to a few days??" asked one Mex Ernest Hevin, Austrian when informed of se Secrétary

***He is car addressing the British Labour Bevin' statemenan a

optimistio/!m United Partyreonference at Blackpool, tainly

he "hoped" "Ausicle In the Prespliza katere same

sald

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