BROADA LTD AND ANOTHER v. CHOW CHEUK YIN

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

-----------------

-----------------

JUDGMENT

-----------------

1. This is an application by originating summons by Broada Limited and Suen Loi On (the Plaintiffs) for a declaration that a mortgage dated 26 August 1957 made between Sun Tsz Wing, the Plaintiffs' predecessor-in-title and the Defendant, registered in Tsuen Wan, New Territories Land Registry in respect of land known as Lot No. 393 in Demarcation District No. 453 is no longer of effect and that the Defendant's right, title and interest under the mortgage is extinguished.

2. The principal amount advanced under the mortgage was $3,000 with interest thereon at $75.00 per calendar month. The capital sum was repayable on the 26 February 1958.

3. After the issuance of these proceedings, the Plaintiffs attempted to locate the Defendant at his address which is at 40 Boundary Street, but they found that there is no such address nowadays. Their enquiries as to the Defendant's whereabouts were unsuccessful and an order for substituted service of both the originating summons and the notice of hearing for today was obtained.

4. In 1976 Mr Sun made a declaration to the effect that he was desirous of building a house on the property, and for that reason had undertaken with the Hong Kong Government to obtain the necessary consent from the mortgagee (the Defendant) and his successors, and he also undertook to indemnify the Government against all proceedings. He further declared that he had not seen the Defendant for many years and was unable to locate the Defendant. The declaration was registered at the Land Registry on the 23 January 1976. It would follow that no payment of interest or principal or any part thereof had been made for many years before 1976 and certainly not since then.

5. On these facts the Defendant is clearly no longer able to maintain an action to recover the principal sum secured by the mortgage, nor maintain any foreclosure action nor any claim to interest by reason of section 19(1)(2) and (5) of the Limitation Ordinance, Cap. 347. As the cause of action accrued before 1 July 1991 the appropriate limitation period for the purposes of section 19 is 20 years. The Limitation (Amendment) Ordinance 1991 which reduced the period to 12 years only applies to causes of action that accrued after July 1991. Even on the basis of a 20-year limitation period clearly the Plaintiffs are entitled to a declaration that the mortgage is no longer subsisting or capable of taking effect.

6. As to the appropriate form of order in such cases, see the judgment of Godfrey J. as he then was, in FUNG Kam-cheung v. KWOK Yiu-wing 1990 MP No.1493. Cf. TANG Kun-nin, Tony v. TANG Chun-chak 1991 No.MP 761. Accordingly, I will make a declaration in the terms stated above.