HOWIN INDUSTRIAL LTD (In Liquidation) v. LEE KOON LIN AND OTHERS

HCMP 1659/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1659 OF 2011

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J U D G M E N T

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1. The plaintiff purchased the remaining portion of Lot No 83 in Demarcation District 7 on 7 October 1994.

2. It also purchased Lot No 82 in Demarcation District 7 on 7 March 1995.

3. On 5 October 1995, it divided the lots into various sections.

4. Five of the sections were assigned to the five defendants with each defendant being made the registered owner of one section.

5. The defendants are indigenous villagers of the New Territories.  They are allowed to build a 3-storey small house covering no more than 700 sq feet of agriculture land without the need to pay any premium to the Government. 

6. The plaintiff says that the purpose of the five assignments were for exploiting such entitlements of the defendants.  Hence, no consideration had been paid by the defendants for the lots assigned to them despite the fact that the assignments did say that considerations had been paid by them to the plaintiff.  The defendants have also executed declarations of trust confirming that they hold their respective lots as trustees for the plaintiff.

7. The small houses were not built because the plaintiff did not have the necessary funds.  The plaintiff was wound up on 13 June 2001.

8. Parts of the lots have been resumed by the Government.  The plaintiff claims to be entitled to the compensation for resumption. 

9. The proceedings have been served on the five defendants.  The 1st defendant does not contest the proceedings right from the start.  The other four defendants have not responded.  None of the defendants has appeared at the hearing.

10. The plaintiff relies on the case of Best Sheen Development Ltd v Official Receiver and Trustee [2001] 3 HKC 79.  I agree that the plaintiff is entitled to the declarations sought.

11. I declare that the plaintiff is the beneficial owner of the five sections of the land registered in the name of the 5 defendants as stated in paras 1 to 5 of the relief in the originating summons.

12. I also declare that the plaintiff is entitled to receive the resumption compensation payable by the Government as a result of the resumption of parts of these two lots as particularised in para 6 of the relief in the originating summons. 

13. I further order the defendants to pay the plaintiff any compensation for resumption of parts of the two lots which have been paid by the Government to them in their positions as the registered owners of the parts resumed.

14. Regarding the question of costs, I order that there be no order as to costs between the plaintiff and the 1st defendant.  I further order that each of the 2nd, 3rd, 4th and 5th defendants do bear 20% of the plaintiff’s costs in prosecuting these proceedings to be taxed.