SI TOU CHOI KAM v. WEALTH CREDIT LTD

CACV 167/2017

[2018] HKCA 399

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 167 OF 2017

(ON APPEAL FROM DCMP 537/2016)

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J U D G M E N T

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Hon Cheung CJHC (giving the judgment of the court):

1.  By our judgment dated 30 April 2018, we allowed the plaintiff’s appeal from the judgment of Deputy District Judge J Chow dated 17 January 2017, set aside the deputy judge’s order, made an order discharging the charging orders in question and vacating their registration in the Land Registry, and awarded the costs below and the costs of appeal to the plaintiff.

2.  From our judgment, the defendant now seeks leave to appeal to the Court of Final Appeal on the following grounds that are said to raise questions of great, general or public importance:

“1. Should the Order(s) derived or obtained by the potential fraud(s), collusion etc. by the Plaintiff and/or her husband Mr. Cheung Man Kwong, Edmond be set aside or re opened or re examined by the court without time bar in accordance with the public policy, the Rules of the High Court and the Rules of District Court, law(s), decided case(s), fairness, equity and/or justice and if such Order(s) is not set aside or re opened or re examined by the court, will grievous injustice be done if the final court does not intervene?

2. Is it correct that a matrimonial home purchased as a joint tenancy as shown on the legal documents and co owned and having lived by a married couple can be actually held on trust by either party on the first day of assignment and to what extent the trust, trustee, the ownership of the property or interest(s) of the married couples, the related party/parties and/or the outsider(s) without knowledge of such alleged trust or be misrepresented by the married couples of such issue(s) are relevant and applicable?

3. To what extent (I) the Order(s) in Personam and/or in Rem and/or (II) the priority between (a) the Order in Personam, (b) the laws (particularly the Order 15 rule 13A of the Rules of High Court or the Rules of District Court for binding the non parte, the section 52AA(l), (2), (3) and (4) of the District Court Ordinance) and/or (c) the estoppel(s) and (d) to which party/parties (e.g. the Plaintiff and/or the Defendant) such estoppel(s) to be applied or limited, are relevant and applicable?

4. Given the Order of Hon. Lok J to be in Personam and estoppel(s) not applicable to the Defendant, to what extent the laws and/or decided case(s) in relation to the charging order and/or vacating the charging order including (Section 52AA(l), (2), (3) and (4) of the District Court Ordinance (Cap 336)) are relevant and applicable?

5. To what extent, given the Order of Hon. Lok J that the Plaintiff relied on for the application of the DCMP 537 of 2016 by the Plaintiff, the party/parties (such as the Plaintiff, the Defendant and/or the Official Receiver of Hong Kong) to be responsible for and/or affected by the Order of Hon. J. Lok, are relevant and applicable?

6. To what extent the Land Registration Ordinance, particularly S2(1), S3(1) and S3(2) of the Land Registration Ordinance, the Land Registration System, the priority between the land registration, and the related laws and decided cases or principle(s) of such issue(s) are relevant and applicable?”

3.  We will not repeat the issues and arguments involved in the appeal, or our reasons for allowing the appeal.

4.  We note that the intended grounds of appeal are not signed by counsel.  We share the difficulty encountered by the plaintiff’s counsel in preparing his written submissions in opposition to this application for leave to appeal in comprehending some of the intended grounds of appeal.

5.  Ground 1 relates to “potential fraud(s), collusion etc”.  These are serious allegations that go well beyond the submissions made by counsel on behalf of the defendant at the hearing of the appeal regarding doubts about the plaintiff’s case that the husband has never contributed anything towards the purchase of the property or the repayment of the mortgage loans.  These serious allegations of fraud and collusion did not form part of the case of the defendant on appeal.  They are new arguments and do not arise from our judgment.  In any event, they raise fact‑sensitive matters, and no question of great, general or public importance is involved.

6.  As for ground 2, although framed as a general question, it is clearly a fact‑sensitive matter, turning on the facts of each case.  So far as the facts of the present case are concerned, the beneficial interest of the husband (if any) in the property was not a matter before us.  It was a matter before Lok J.  For the reasons we gave in our judgment, the decision of Lok J could not be reopened and accordingly we did not go into that question.  It is, therefore, not a question arising from our judgment.  Nor is it a question of great, general or public importance.

7.  As for ground 3, we have explained in our judgment how and why the various legal provisions and principles are relevant to the issues raised in the appeal, and we have applied them accordingly.  Ground 3 does not even identify where, it is said, this court has gone wrong in understanding or applying these legal provisions or principles.  In any event, so far as we can make out from the written submissions, any error that we may be said to have made would go only to the application of established legal principles to the facts.  Ground 3 does not raise any question of great, general or public importance.

8.  As for ground 4, we have already explained in our judgment why, given Lok J’s declaration that the husband is a mere trustee and therefore has no beneficial interest in the property, no charging order can be made under section 52AA of the District Court Ordinance (Cap 336).  We have also explained why by the operation of estoppel by conduct, Lok J’s declaration is binding on the defendant. Ground 4 simply does not raise any meaningful question of law that is reasonably arguable.

9.  As for ground 5, in so far as we can comprehend it, we repeat what we have said in relation to grounds 3 and 4.

10.  As for ground 6 concerning the Land Registration Ordinance (Cap 128), we have fully explained the relevance of the provisions of the Land Registration Ordinance to the issues concerned in paragraphs 12 to 18 of our judgment.  We will not repeat ourselves.

11.  With respect, the defendant’s reliance on Li Sze Fat v Cheng Ka Leung Tommy, HCA 14280/1998, Yuen J (13 April 2000) and Chu Yam Om v Li Tam Toi Hing [1946-1972] HKC 55, both new cases not referred to by counsel at the hearing of the appeal, is misplaced.  Relevantly, both cases decided, on the facts, that a prior, unwritten resulting trust was replaced by a subsequent written declaration of trust between the same parties. As the written declaration of trust was not registered in the Land Registry, section 3(2) of the Land Registration Ordinance rendered it absolutely null and void as against all subsequent bona fide purchasers for valuable consideration of the property concerned.  The priority thus acquired by the subsequent purchaser over the unregistered written declaration of trust, it was held in each case, was not affected by the earlier unwritten resulting trust, because the unwritten resulting trust was replaced and extinguished by the written declaration of trust upon its execution.

12.  The facts in the present appeal are entirely different.  First, there was no declaration of trust executed by the husband and wife to substitute the prior resulting trust between them.  Rather, what we have is a declaration by the court that the husband has been holding the property on resulting trust for the wife since the time of purchase. Secondly, unlike the two cases, the charging orders here came into being well before the court declaration.  As against the pre‑existing unwritten resulting trust, priority was determined by rules of priority in equity rather than section 3 of the Land Registration Ordinance.  The priority enjoyed by the prior resulting trust over the charging orders under those rules could not be lost by the subsequent court declaration, made years after the charging orders, confirming the existence of the resulting trust.  And of course, the court declaration was duly registered in the Land Registry.  These facts are far removed from those in the two cases now relied on.

13.  Moreover, given the court declaration and given that it is binding on the defendant, the husband has never had any beneficial interest in the property, and for the reasons explained, no charging orders can be made under the District Court Ordinance in those circumstances. As was also explained in the judgment, for that reason alone, the charging orders ought to be discharged and their registration in the Land Registry vacated.  The question of ranking priority under the Land Registration Ordinance between the charging orders and the court declaration would therefore become academic.

14.  In any event, the above does not give rise to any question of great, general or public importance meriting the grant of leave to appeal to the Court of Final Appeal.

15.  Nor do we see any reasons for giving leave on the “or otherwise” limb.

16.  For these reasons, the application for leave to appeal is dismissed with costs to the plaintiff, which we summarily assess at $60,000.