Conveyancing and Property Law: The Four P's

1. Introduction

Ms. Alice Chan received a letter last week from Mr. Billy To, who expressed his intention to sue Ms. Chan for breach of contract by failing to assign her flat to him as agreed. Enclosed with the letter was a copy of a receipt allegedly signed by Ms. Chan with the correct HKID numbers and the address of her flat on it. Ms. Chan can recall having a conversation with Mr. To regarding the sale of her flat. But after suffering from a stroke last August, Ms. Chan’s memory was impaired and could not remember signing the receipt. However, a deposit of HK$500,000 was found in her bank account in last June, matching the amount of deposit money acknowledged on the receipt. The receipt is the only evidence produced by Mr. To up to now. Based on these facts, this paper will advise Ms. Alice Chan on her legal position.

2. Required Formality for Contracts for the Sale of Land

In the present case, Ms. Alice Chan is being sued for breach of contract. Under section 3 (1) of the Conveyancing and Property Ordinance, Chapter 219, Laws of Hong Kong states that “Subject to S. 6 (2), no action shall be brought upon any contract for the sale or other disposition of land unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person lawfully authorized by him for the purpose.” It is concluded that the section applies to the contract in the present case.

The ordinance requires that any contract for the sale and disposition of land must be in writing for it to be enforceable. A written agreement or written memorandum or note will be sufficient, “provided that it contains all the essential terms of the parties’ agreement: the parties, the price, the property, and any particularly agreed terms (the so-called ‘Four-P’s’)”.

Furthermore, section 3 of the Interpretation and General Clauses Ordinance (Cap 1) suggests that the definition of ‘writing’ would “include writing, printing, lithography, photography, typewriting and any other mode of representing words in a visible form.” And under the same section, ‘sign’ is defined to include, “in the case of a person unable to write, the affixing or making of a seal, mark, thumbprint or chop.”

Based on the two definitions from the ordinance, the tentative conclusion is that the receipt is ‘written’ and ‘signed’ by Ms. Alice Chan and fulfills the present section’s requirement for a memorandum.

However, “a receipt, even though containing a plan of the property and signed at the foot as well as over the stamp, is only a memorandum of an oral agreement and not a written agreement.” Therefore, even though the content of the receipt indicates Alice Chan’s acceptance of Billy To’s deposit money and also her intention