EGO FINANCE LTD v. CHOW CHUI LIN ALIN AND ANOTHER

DCMP 4626/2021

[2022] HKDC 1111

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 4626 OF 2021

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DECISION

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Introduction

1.  At the hearing on 29 September 2022, I granted an order in terms of the reliefs sought by the plaintiff. Here are my reasons.

Service

2.  The originating summons was served on the 1^st and 2^nd defendants by insertion into the letter box of their usual and last known address on 28 December 2022.

3.  The notice of appointment to hear originating summons was served on the 1^st and 2^nd defendants by ordinary post at their usual and last known address on 27 July 2022.

4.  I am satisfied that the 1^st and 2^nd defendants have had due notice of these proceedings and hearing and the 2^nd defendant has chosen not to take any action nor to appear.

Appearance of the 1^st defendant

5.  The 1^st defendant appeared at the hearing. She did not oppose the plaintiff’s application and agreed to deliver possession of the subject property within 35 days. She also agreed to pay the plaintiff’s costs in the sum of $44,277.

The plaintiff’s case

6.  The plaintiff is a licensed money lender.

7.  The 1^st and 2^nd defendants are the registered owners as joint tenants of Flat H, 5^th Floor, Tower 1 (Phase II), Summit Terrace, No 2 On Yuk Road, Tsuen Wan, New Territories, Hong Kong (“the property”)

8.  By a Second Mortgage dated 20 September 2019 (“the 2^nd Mortgage”), the 1^st defendant as borrower of one part and the plaintiff as the lender of the other part, the 1^st defendant charged her interest in the property to the plaintiff to secure the repayment of the general credit facilities to the extent of HK$500,000.

9.  By a loan agreement dated 20 September 2019, the plaintiff lent the sum of HK$180,000 to the 1^st defendant at the interest rate of 30% per annum.

10.  The 1^st defendant defaulted in payment since the 9^th instalment due on 20 June 2020. The outstanding principal as at 15 July 2022 is HK$180,000.

Money judgment

11.  The plaintiff’s case is not controverted and I accept it at its face value.

12.  I am satisfied that the plaintiff has in form and in substance complied with the requirements of a moneylender’s action under Order 83A. The plaintiff is entitled to recover the outstanding principal of $180,000 and interest.

Order for possession

13.  Clause 5.01 of the 2^nd Mortgage provides, inter alia, that if the Borrower makes default in the payment of the secured indebtedness, an event of default shall have occurred.

14.  Clause 6.01 of the 2^nd Mortgage provides that if an event of default has occurred, the Lender shall have the right, inter alia, to enter into and upon and take possession of the property and for that purpose to take any legal proceedings and thenceforth to hold possess and enjoy the property and to receive the rents and profits thereof without any lawful interruption or disturbance by the Borrower or any other person.

15.  I am satisfied that the requirements of Order 88 have been complied with.

16.  By reason of the default of the 1^st defendant, the plaintiff is entitled to an order for possession of the property.

Order of sale

17.  As the 1^st defendant had made default in payment, the plaintiff as mortgagee became a person holding an interest in the property under s 3 of the Partition Ordinance and may institute the present proceedings: see Maxcolm Finance Ltd v Cheng Chi Man and another [2019] HKCFI 2928 and Moneysq Ltd v Liu Kit Ling and another [2019] HKDC 860.

18.  The property is a residential flat in a multi-storey building with a saleable area of approximately 435 sq ft with only one entrance. I accept that it is impracticable to divide the property into two halves and construct a separate entrance. Moreover, neither the 1^st nor the 2^nd defendant has tendered any reason by affidavit as to why an order for sale under the Partition Ordinance should not be granted; why it is not impracticable to physically partition the property into two halves; why a sale of the property would not be beneficial to all the parties or that significant hardship would be caused to the 2^nd defendant.

19.  In any event, the 2^nd defendant shall be entitled to half of the proceeds of sale.

20.  Accordingly, I am satisfied that an order for sale ought to be made and I so order.

Reserved price

21.  The plaintiff has produced a valuation report which opined that the value for sale of the property under repossession as at 7 July 2022 is in the order of HK$5,700,000.

22.  I accept the said valuation and direct that the property shall be sold with a reserved price of HK$5,700,000.

Costs

23.  By agreement, I order the 1^st defendant to pay the plaintiff the costs of this action in the sum of HK$44,277.