CHAN KA CHUN v. SIN HIN TUNG HIDY FORMERLY KNOWN AS SIN WAI HANG AND ANOTHER

DCMP 190/2024

[2026] HKDC 709

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 190 OF 2024

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JUDGMENT

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A.  INTRODUCTION

1.  This is the Plaintiff’s application (“the Application”) for vacant possession and an order for sale of a property known as Flat 10, 30^th Floor of Block A, Yan Shing Court, No.15 Wah Ming Road, Fanling, New Territories (“Property”) pursuant to Order 50 rule 9A and Order 88 rule 5A of the Rules of the District Court (Cap 336H) and Section 6 of the Partition Ordinance (Cap 352) (“PO”). The Plaintiff makes this application on the strength of an Amended Charging Order Absolute granted against the 1^st Defendant in FCMP 188/2013 (“the COA”, “the Family Court Action”).

2.  The 1^st Defendant and the 2^nd Defendant are and were at all material times the registered joint tenants of the Property.

3.  The Plaintiff’s case is that the 1^st Defendant is a beneficial owner of the Property, such that the Plaintiff should be allowed to sell the Property and apply the 1^st Defendant’s share of the proceeds to settle the COA.

4.  The 1^st Defendant did not participate in the proceedings. She is also absent from the hearing.

5.  The 2^nd Defendant resists the Application. The 2^nd Defendant claims she is the sole beneficial owner of the Property by reason of common intention constructive trust or resulting trust. While the 1^st Defendant is one of the registered owners of the Property, she is only holding the Property on trust for the 2^nd Defendant. On that basis, the 2^nd Defendant contends that the COA is invalid, or the 2^nd Defendant’s beneficial interest ranks in priority of the COA.

B.  BACKGROUND

6.  The following background facts are not seriously disputed.

7.  The 1^st Defendant and the 2^nd Defendant are sisters. Ms. Leung Siu Ying (梁少英) (“Ms. Leung”) is the Defendants’ mother.

8.  The Property is a residential flat with a gross floor area of around 401 square feet.

9.  On 28 January 2008, the 1^st and 2^nd Defendants entered into provisional sale and purchase agreement to acquire the Property at a consideration of HK$1,050,000.

10.  On 27 March 2008:

(1)  The 1^st and 2^nd Defendants obtained a mortgage from the Hongkong and Shanghai Banking Corporation (“HSBC”) to finance the purchase of the Property (“the Mortgage”, “the Mortgage Deed”);

(2)  The Property was assigned to the 1^st and 2^nd Defendants by an Assignment as joint tenants.

11.  The Plaintiff and the 1^st Defendant were parties in the Family Court Action. On 22 April 2016, an allocatur for the sum of HK$514,320 was issued in respect of the Plaintiff’s costs in the Family Court Action (“the Allocatur”, “the Judgment Debt”).

12.  On 26 July 2016, a Charging Order Nisi based on the Judgment Debt was granted over the Property and registered against it. The Charging Order Nisi was subsequently made absolute by the COA, which was granted on 29 August 2016, amended on 3 October 2016, and registered against the Property.

13.  On 11 January 2024, the Plaintiff issued the Application.

14.  The Mortgage has yet to be discharged. By letter dated 29 December 2023, HSBC indicates that it will not oppose the Application provided that its interest in the Mortgage is not affected.

C.  PARTIES’ RESPECTIVE CASES

C1.  Plaintiff’s case

15.  The Plaintiff contends that the 1^st Defendant is not only a registered owner but also a beneficial owner of the Property.

16.  The 1^st and 2^nd Defendants purchased the Property with the intention of being equal legal and beneficial owners, as shown by the following:

(1)  The 1^st and 2^nd Defendants were assigned the Property as joint tenants;

(2)  Under Section F of the Mortgage Deed, the 1^st and 2^nd Defendants jointly executed the Mortgage and charged the Property to HSBC as beneficial owners;

(3)  In Clause 37.1 of the “Mortgage Conditions” in the Mortgage Deed, it is provided that the Mortgage shall bind the 1^st and 2^nd Defendants jointly and severally;

(4)  The Property was listed as the 1^st Defendant’s residential address in documents submitted to the Transportation Department dated 7 September 2011 and 22 June 2016;

(5)  Insofar as the down payment for the Property is concerned, contrary to what the 2^nd Defendant claims, it was a gift by Ms. Leung to both the 1^st and 2^nd Defendants, not only to the 2^nd Defendant.

17.  The Plaintiff asks this Court to exercise its discretion to order a sale of the Property. The Plaintiff explains that he is not aware of any other valuable assets owned by the 1^st Defendant against which he could recover the debt under the COA.

18.  Based on a latest valuation report of the Property by Midland Surveyors dated 15 October 2025, the Plaintiff proposes to adopt HK$3,100,000 as the reserve price.

19.  The Plaintiff submits that it would be inappropriate to order a partition of the Property because:

(1)  The Property is a residential unit of only 401 square feet;

(2)  The questionable feasibility of partitioning the Property;

(3)  The potential that a partition would breach the building’s Deed of Mutual Covenant and relevant building regulations; and

(4)  The likelihood that a partition would devalue the Property.

C2.  Defendant’s case

20.  The 2^nd Defendant claims that she is the sole beneficial owner of the Property by reason of a common intention constructive trust or a resulting trust arising from the following.

21.  In the mid-1990s, the 1^st and 2^nd Defendants emigrated to the USA and they resided separately there.

22.  In about 2005, the 2^nd Defendant returned to Hong Kong. She lived in a rented flat in Yan Shing Court for about 2 years.

23.  Around early 2006, the 2^nd Defendant wanted to move out. Ms. Leung persuaded her to purchase a property for her own financial security and agreed to financially support her purchase. Subsequently, on 11 February 2006, Ms. Leung provided the 2^nd Defendant with a monetary gift of HK$168,707.20.

24.  The 2^nd Defendant was unable to find a suitable flat to purchase at the time and instead rented a flat in Yan Shing Court until early 2008.

25.  In early 2008, the 2^nd Defendant decided to resume her plan to buy a property. Ms. Leung supported the idea and offered to provide the 2^nd Defendant with a further monetary gift to assist with her purchase. Ms. Leung expressed her wish to stay in the property overnights occasionally.

26.  At this same time, the 2^nd Defendant learned that the 1^st Defendant had returned to Hong Kong. The 2^nd Defendant asked the 1^st Defendant if she wanted to live together and was told by the 1^st Defendant that she wished to continue living alone. The 2^nd Defendant would have bought a 3-bedroom flat had the 1^st Defendant wanted to live together. Given the 1^st Defendant’s response, the 2^nd Defendant decided to look for 2-bedroom flats instead.

27.  The 2^nd Defendant says that she offered to register the 1^st Defendant as a nominee co-owner of the Property out of sisterly bond and for convenience in case she needed the 1^st Defendant’s help in handling matters relating to the Property. It was the common intention between the 1^st and 2^nd Defendants and Ms. Leung that the 1^st Defendant would be a mere nominee with no equitable interest in the Property. She would not make any contribution to the Property (monetary or otherwise) and would not live in the Property (“the Common Understanding”).

28.  Pursuant to the Common Understanding, the 1^st and 2^nd Defendants executed the PSPA.

29.  Ms. Leung transferred additional sums of money to the 2^nd Defendant to aid her purchase of the Property, transferring HK$140,000 on 6 March 2008, HK$10,000 on 14 March 2008, and HK$20,000 on 17 March 2008. Including the HK$168,707.20 transferred on 11 February 2006, the total amount of money which Ms. Leung transferred to the 2^nd Defendant amounts to HK$338,707.20 (“the Gift”).

30.  The Mortgage was taken out. As co-owners of the legal title, the 1^st Defendant and the 2^nd Defendant executed the Mortgage as mortgagors.

31.  Aided with the Gift and financed by the Mortgage, the 2^nd Defendant paid the consideration and the expenses relating to the acquisition of the Property in the manner stated in §17 of the Affirmation of the 2^nd Defendant dated 3 May 2024 (“D2 Affirmation”).

32.  Thereafter, the 2^nd Defendant engaged a contractor to renovate the Property at the costs of HK$23,500. She was the one who settled such costs.

33.  After renovating the Property, the 2^nd Defendant moved into the Property in or about April 2008. Since then, the 2^nd Defendant had been living in the Property alone with Ms. Leung staying overnight in the Property. Apart from a short stay for a few nights in around 2010, the 1^st Defendant has never lived in the Property or stored her belongings there.

34.  Since the purchase of the Property, the 2^nd Defendant has been the only person making all the repayments under the Mortgage, the mortgages, utility bills and maintenance relating to the Property. The 2^nd Defendant has also taken out a home insurance policy for the Property since 2008 and has been paying for the insurance premium since then.

35.  In about 2012 or 2013, the 1^st Defendant called Ms. Leung and proposed to be removed as a nominee for the Property. However, as the 2^nd Defendant and Ms. Leung rarely had contact with the 1^st Defendant, no follow up was made for this proposal.

36.  The 2^nd Defendant says that she does not have a close bond with the 1^st Defendant. Since the 1^st Defendant separated from the Plaintiff and moved out from his premises in about 2012, the 2^nd Defendant and the 1^st Defendant has not maintained close contact with each other.

37.  The 1^st Defendant continued to live apart from the 2^nd Defendant and Ms. Leung. They do not have any knowledge of where the 1^st Defendant lives or her general whereabouts.

38.  The 2^nd Defendant had no knowledge of the Family Court Action, the Charging Order Nisi or the COA until she received a demand letter dated 14 December 2023 from the Plaintiff’s solicitors.

D.  APPLICABLE LEGAL PRINCIPLES

D1.  Order for Sale  

39.  The enforcement of a charging order by sale of the charged property is governed by Order 88 rule 5A of the Rules of the District Court.

40.  When the Court exercises its discretion in deciding whether to make an order for sale, the Court will take into account a judgment creditor’s prima facie entitlement to enforce his judgment by a charging order. While the Court has to weigh carefully the competing equities of the parties, there must be a good reason to justify why the Court should on the one hand, grant an order in a party’s favour but on the other hand, refuse to enforce that very order: see SKK (HK) Co Ltd v Tsui Po Hing [2021] HKCFI 1676 at §16 per Linda Chan J, citing Union Finance Ltd v Leung Wai Ling & Anor [2000] 2 HKC 821 at 823G, 824A-B per Chung J.  

41.  In Wong Chun Kei Johnny & Ors v Poon Vai Ching & Ors [2007] 1 HKLRD 825, §§18-19, Recorder Joseph Fok SC sets out the principles which the Court will consider in deciding whether to grant an order for partition or an order for sale, and if so, which type of order to grant under Sections 2, 4 and 6 of the PO:

(1)  A co-owner has a basic right to rid himself of the shackles of co-ownership and if she has no other remedy, ask for an order for partition or sale;

(2)  When it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner) that such an order will not be beneficial to all the co-owners, or that it will result in very great hardship to one co-owner;

(3)  Whether an order for sale is beneficial to all the co-owners is not determined by the dissent of the opposing co-owners or the assertion by them that it is not beneficial. It has to be determined by the court objectively.

D2.  Charging Order

42.  Where a charging order is made against a property which the judgment debtor has no beneficial interest in, the charging order is invalid for want of jurisdiction and must be discharged. The registration of the charging order will also be vacated: see Si Tou Choi Kam v Wealth Credit Ltd [2018] 4 HKC 247 at §11 per Cheung CJHC (as he then was).

43.  A beneficial interest arising from a common intention constructive trust or resulting trust is an interest arising from operation of law. Such interests are not registrable, as there are no instruments to register, and priority will be determined by common law. Such interests will also be good against the holders of charging orders as they are not bona fide purchasers of the legal estate for value with notice because charging orders have the like effect as equitable charges which do not involve transfers of legal or equitable ownership to the judgment creditor: see Si Tou Choi Kam v Wealth Credit Ltd (supra) at §17.

44.  Due to the potential consequences of charging orders, it is in the interests of justice that the applicant give notice to all interested parties, including co-owners such as joint tenants, when applying for a charging order: see Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 at §1.9 per Cheung JA (as he then was).

D3.  Common intention constructive trust

45.  Equity follows the law. Joint legal ownership is presumed to be joint beneficial ownership. The burden is on the person seeking to show that the parties intended their beneficial interests to be different from their legal interests, and in what way. The burden may be discharged by proof, on a balance of probabilities: (a) the parties had a different common intention at the time of purchase on how the property is to be held beneficially; (b) the party who claims a different beneficial ownership has altered his position in detrimental reliance on the common intention; and (c) it is unconscionable for the property owner to depart from the common intention and assert ownership in reliance on the legal title: see e.g. Yes Capital Limited v Yeung Se Wang Stephen (a bankrupt) & Anor [2025] HKCFI 3891 at §§12-13 per Jonathan Chang SC.

46.  Common intention of the parties may be established by proof of an agreement, arrangement or understanding between them on how the property is to be held beneficially. Where there is no evidence to support such an agreement or arrangement, the Court may rely on the conduct of the parties (e.g. direct contributions to the purchase price, or other forms of non-monetary contributions to the matrimonial home) as the basis from which to infer the common intention. In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the Court has to pay more regard to circumstantial matters: see Yes Capital Limited (supra) at §14.

47.  In ascertaining the objective intentions of the parties, the Court will take a holistic approach in the light of their whole course of conduct. The relevant intention of each party is the intention that was reasonably understood by the other party to be manifested by that party’s words and conduct, notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate with the other party: see Yes Capital Limited (supra) at §14.

48.  In considering the common intention of the parties, the Court can take into account events which occurred prior to the establishment of the alleged trust as well as subsequent conduct: see Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605 at §55 per Stock NPJ.

49.  As a matter of law, incurring liability under a mortgage on the part of a person for the purpose of the acquisition of the Property could be viewed as a financial contribution: see Chan Pak Hung v Keung Lai Nor Winnie [2022] HKCFI 11264 at §100 per Au-Yeung J.

50.  Where a person is added to a contract to enable the obtaining of a loan, this fact, by itself, is not a basis for holding that there was no intention for that person to be a beneficial owner. On the contrary, the fact that the property could not be bought without the person incurring liability, or potential liability, would be some ground for inferring that het person was to be beneficially interested: see Cheng Kam Nga v Lee Ho Yin [2021] HKCFI 1352 at §51 per Au-Yeung J.

D4.  Resulting Trust

51.  If it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust. In other words, resulting trust operates in the absence of evidence of intention of the parties. In such circumstances, the beneficial ownership of a party who provided the purchase price of a property acquired in another’s name, the issue of financial contribution is a weighty consideration: see Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 (supra) at §§1.3, 2.15.

52.  Where a party pays wholly or in part for the purchase of property that is vested in joint names, there is a presumption that the payor did not intend to make a gift. The property is presumed to be held on a resulting trust for the person who provided the purchase money, proportionate to this contribution: see Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669.

53.  The recent approach has been to strive to determine the real intentions of the parties. It may only resort to the formal presumptions where the direct evidence of those intentions is absent and a default rule is needed: see Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd (2015) 18 HKCFAR 382 at §46.

E.  ANALYSIS

E1.  What was the 1^st and 2^nd Defendants’ intention as to ownership of the Property?

54.  For the reasons explained below, I find that the 2^nd Defendant has failed to prove that the Common Understanding exists. Rather, I find that the 1^st and 2^nd Defendants intend to be both legal and beneficial owners of the Property.

55.  First, the 1^st Defendant entered into the PSPA as one of the purchasers. Subsequently, the Property was assigned to the 1^st Defendant and the 2^nd Defendant as legal joint tenants by the Assignment. “Equity follows the law”, the starting point is that the 1^st and 2^nd Defendants intended to be both legal and beneficial joint tenants of the Property.

56.  I do not accept the 2^nd Defendant’s explanation that adding the 1^st Defendant as a joint tenant of the Property was solely out of sisterhood and the plan to ask the 1^st Defendant to help if there are matters which need to be handled in relation to the Property when the 2^nd Defendant has emergencies or she is on business trips. The explanation does not sit well with the 2^nd Defendant’s contention that she does not have a close bond with the 1^st Defendant, see §§12, 27 D2 Affirmation. If the 2^nd Defendant does not have a close bond with the 1^st Defendant, it is difficult to see why she could rely on the 1^st Defendant to act as her nominee to handle matters relating to the Property.

57.  Further, while Ms. Leung claims that the idea of including the 1^st Defendant as a nominee holder of the Property came from her, this was not recorded in D2 Affirmation.

58.  Second and notably, the 1^st Defendant executed the Mortgage with the 2^nd Defendant jointly to finance the purchase of the Property. Under Section F of the Mortgage Deed, the 1^st Defendant charge “as a beneficial owner [her] full interest in the Property to [HSBC] by way of a first fixed legal charge…”. Under Clause 37 of the “Mortgage Conditions” in the Mortgage Deed, it is clearly provided that the 1^st Defendant has assumed joint and several liability with the 2^nd Defendant for the mortgage loan:

“37. Joint and several liability

Clause 37.1 If there is more than one of you, the Mortgage shall bind all of you jointly and each of you. [HSBC] shall be entitled to discharge or come to an arrangement with any one of you on any terms as we may agree without affecting our rights and remedies against the others.

Clause 37.2 If there is more than one of you, the Mortgage will bind each of you separately even if it is unenforceable against all or any of you.” (Emphasis added)

59.  As the 2^nd Defendant accepted during cross-examination, at the time when the Property was purchased, she did not have much savings. Hence, if she were to apply for the Mortgage on her own, the chance of getting it would be lower compared with making the application together with the 1^st Defendant. Hence, by agreeing to apply for the Mortgage together with the 2^nd Defendant and assumed joint and several liability for the Mortgage loan, the 1^st Defendant has made financial contribution to the purchase of the Property: see Chan Pak Hung v Keung Lai Nor Winnie (supra) at §100; Cheng Kam Nga v Lee Ho Yin (supra) at §51.

60.  Third, I do not accept the 2^nd Defendant’s case that the 1^st Defendant has not lived in the Property save for staying for a few nights in 2010. As shown in the application form submitted by the 1^st Defendant to the Transport Department on 27 September 2011, the 1^st Defendant represented the address of the Property as her residential address. In the Certificate of Particulars of Vehicle dated 22 June 2016, the address of the Property was stated to be the address of the 1^st Defendant. It is not credible for the 2^nd Defendant and Ms. Leung to claim that the 1^st Defendant has never lived in the Property save for a few nights in 2010.

61.  Fourth, the 2^nd Defendant claims that in about 2012 or 2013, the 1^st Defendant rang up Ms. Leung to indicate her wish to be removed as a legal owner of the Property. I do not accept the 2^nd Defendant’s evidence in this regard. The above episode is not alluded to at all in Ms. Leung’s affirmation and it was not hinted anywhere in the documents (e.g. any subsequent correspondence between the 1^st Defendant, the 2^nd Defendant and the Ms. Leung). Further, according to the 2^nd Defendant, she and Ms. Leung have less contact with the 1^st Defendant since 2012. This means that the 1^st Defendant would no longer be in a good position to help the 2^nd Defendant to handle matters relating to the Property. If the 1^st Defendant had indeed proposed to be removed as a nominee holder of the Property, there is no reason why the 2^nd Defendant did not follow up with the removal of the 1^st Defendant’s name from the Property as soon as possible.

62.  Fifth, the 1^st Defendant’s absence from these proceedings and the lack of evidence from her are also significant factors in my consideration. The 1^st Defendant is a party to these proceedings. The core dispute in these proceedings concern the 1^st Defendant’s beneficial interest (if any) in the Property. However, the 1^st Defendant fails to participate in the proceedings and fails to file any evidence to support the 2^nd Defendant’s case: see ANZ Commodity Trading Pty Ltd v Excellence Raise Overseas Ltd [2025] HKCA 701 at §121 per Kwan VP, citing Efobi v Royal Mail Group Ltd [2021] 1 WLR 3863 at §41.

63.  From the matters highlighted above, the Plaintiff has put forward at least a prima facie case that the 1^st Defendant is a beneficial joint tenant of the Property. The 2^nd Defendant should be well aware that the 1^st Defendant’s evidence is of crucial importance to the present case.

64.  1^st Defendant is the sister of the 2^nd Defendant. While the 2^nd Defendant claims that since 2012, she has not been in regular contact with the 1^st Defendant, it is not the 2^nd Defendant’s case that she has completely lost contact with her. During cross-examination, the 2^nd Defendant belatedly said that in 2012, there was a serious dispute between the 1^st Defendant and Ms. Leung as Ms. Leung brought the child of the Plaintiff and the 1^st Defendant to see the Plaintiff without the 1^st Defendant’s consent. Thereafter, the 1^st Defendant relationship with the 2^nd Defendant and Ms. Leung has broken down. The 2^nd Defendant further claimed during oral evidence that she tried to contract the 1^st Defendant a few times during the preparation of the proceedings but in vain. I do not accept the 2^nd Defendant’s above evidence. In D2 Affirmation, the 2^nd Defendant did not mention anything about the incident leading to the serious breakdown of relationship in 2012, but only said in §27 of D2 Affirmation that “Since the 1^st Defendant separated with the Plaintiff and moved out of his premises in or about 2012, we have not maintained regular contact with each other”. Further, the 2^nd Defendant did not mention that she had tried to contact the 1^st Defendant to ask her to give evidence in these proceedings in her affirmation.

65.  Considering the above, I take the view that the 2^nd Defendant has not provided a plausible explanation as to why the 1^st Defendant does not give evidence in these proceeding. It is appropriate for me to draw an adverse inference that had the 1^st Defendant given evidence in these proceedings, it would contradict the 2^nd Defendant’s case that she is the only beneficial owner of the Property.

66.  Sixth, as to the alleged Gifts by Ms. Leung to the 2^nd Defendant for her purchase of the Property, the HK$168,707.20 was transferred by Ms. Leung back in February 2006, around 2 years before the 1^st and 2^nd Defendants entered into the PSPA. Next to the transfer entry of the HK$168,707.20 in the account passbook of the joint bank account of Ms. Leung and Mr. Sin Chun Sing (A/C No: 563-2-000906) (“Ms. Leung’s Passbook”), Ms. Leung only marked “轉雅戶口”, I have doubt whether the payment was intended for the 2^nd Defendant’s purchase of property. As for the other payments of HK$140,000, HK$10,000 and HK$20,000, the entries in the Passbook were more clearly stated to be “轉雅買樓”. However, even assuming these payments were made by Ms. Leung solely to subsidise the 2^nd Defendant in her acquisition of the Property, it does not alter the fact that the 1^st Defendant has also contributed to the purchase of the Property by applying for and obtaining the Mortgage loan together with the 2^nd Defendant.

67.  Seventh, as for the renovation costs, while the 2^nd Defendant and Ms. Leung claimed in their respective affirmations that they were borne by the 2^nd Defendant, this was inconsistent with the entry dated 26 April 2008 in Ms. Leung’s Passbook, which showed that HK$300,000 was transferred by Ms. Leung to the 2^nd Defendant to settle the renovation costs (“過雅戶找裝費”). I find that the renovation costs were in fact paid by Ms. Leung, not the 2^nd Defendant.

68.  Lastly, I have not lost sight of the entries in the 2^nd Defendant’s passbook of her bank account (A/C No: 491-6-026307), which the 2^nd Defendant relies on to show her payment of the mortgage installments and utility bills (Exhibit “SWN-13”). However, the 2^nd Defendant has not identified clearly the entries which she claims to represent the above payments in D2 Affirmation. There were also deposits into the 2^nd Defendant’s above bank account from time to time. Even assuming the 2^nd Defendant was the one who settled all of the above payments, taking into account the other matters which I have discussed above, including the 1^st Defendant’s signing of the PSPA, being named as one of the legal joint tenants of the Property, applying for and obtaining the Mortgage with the 2^nd Defendant, the adverse inference to be drawn against the Defendants for failing to call the 1^st Defendant to give evidence, taking a holistic approach, I find that the 2^nd Defendant have failed to prove the Common Understanding. I find that it was the 1^st and 2^nd Defendants’ intention to acquire and hold the Property as legal and beneficial joint tenants.  

69.  As I have found that the evidence shows that the 1^st and 2^nd Defendants’ intention was to hold the Property as legal and beneficial joint tenants, I do not need to resort to the presumption of resulting trust to deal with the present case.

E2.  Whether order for sale appropriate

70.  Having found that the 1^st and 2^nd Defendants are both legal and beneficial owners of the Property, I will proceed to consider whether an order under the PO should be granted.

71.  I agree with the Plaintiff’s submissions in this regard and will exercise my discretion to grant an order for sale of the Property.

72.  First, apart from raising the argument based on the Common Understanding (which I have rejected), the 2^nd Defendant does not seriously pursue other grounds to oppose an order for sale. In particular, the 2^nd Defendant has not put forward any evidence to suggest that an order for sale would cause undue hardship to her.

73.  Second, the Property is a residential property in a multistorey building of only around 401 square feet in size. It would be impracticable for the Property to be split into 2 flats of 200 odd square feet each with 2 entrances.

74.  Third, the 1^st Defendant has failed to pay the debt under the COA. Apart from her interest in the Property, there is no known assets of valuable value which can be used to settle the COA.  

75.  The 2^nd Defendant complains that she was not notified when the CON and COA were applied and she was only notified of the charging orders at a late stage by the Plaintiff’s solicitors’ letter dated 23 December 2023. However, the 2^nd Defendant cannot point to any prejudice caused to her as a result of the late notification of the charging orders. The 2^nd Defendant has been given ample opportunity to put forward her case of sole beneficial ownership of the Property in these proceedings. I do not consider any alleged late notification of the charging orders had caused unfairness to the 2^nd Defendant.

76.  I will grant an order for sale of the Property and make directions as to the conduct of the sale and the application of the sale proceeds below.

F.  DISPOSITION

77.  I grant an Order in the terms set out in Annex 1 hereto.

78.  Costs should follow the event. I order that costs be paid by the Defendants to the Plaintiff with Certificate for Counsel for the hearing. Taking a broad-brush approach, I assess the costs summarily to be HK$180,000, to be paid by the Defendants to the Plaintiff forthwith.

Annex 1

1.  The 1^st Defendant do pay the Plaintiff the following secured by a Charging Order: Notice to Show Cause dated 26^th July 2016 as amended on 3^rd October 2016 and the Charging Order Absolute dated 29^th August 2016 as amended on 3^rd October 2016 (collectively the “Charging Orders”):-

(a)  the sum of HK$915,970.67 being the outstanding principal and interest due and owing by the 1^st Defendant as at 14^th February 2024;

(b)  daily interest at the rate of HK$126.41 per day from 15^th February 2024 until payment; and

(c)  Costs of these proceedings as referred to in paragraph 9 below.

2.  Unless the 1^st Defendant do make payment of the sums as referred to in paragraph (1) above within 28 days after service of this Order, the 1^st and 2^nd Defendants do deliver to the Plaintiff vacant possession and title deeds and documents in their possession (if any) of the Property known as ALL THOSE 37/115,199^th parts or shares of and in THE REMAINING PORTION OF FANLING SHEUNG SHUI TOWN LOT NO. 39 (Flat 10 on 30^th Floor of Block A, Yan Shing Court, No.15 Wah Ming Road, Fanling, New Territories).

3.  Upon the 1^st Defendant paying to the Plaintiff the money hereby ordered to be paid and all other monies (if any) secured to the Plaintiff by the Charging Orders, the Plaintiff (subject and without prejudice to the due exercise of any power of sale for the time being vested in the Plaintiff) do redeliver to the 1^st Defendant possession and title deeds and documents of the Property and release to the 1^st Defendant the security constituted by the Charging Orders as the 1^st Defendant may agree or the Court may direct.

4.  Subject to delivery of vacant possession by the 2^nd Defendant as stated in paragraph (2) above, unless the 1^st Defendant do make payment of the sums as referred to in paragraph (1) above within 28 days after service of this Order, the Property be sold either by public auction or private treaty in open market at a price not less than HK$3,100,000.00.

5.  The conduct of the sale of the Property be committed to the Plaintiff’s Solicitors, Messrs. Edward Lau Phoebe Ng Solicitors LLP (“ELPN”).

6.  Upon such sale, the 1^st and 2^nd Defendants shall do all acts and things necessary for the transfer of the legal title and beneficial interest in the Property to the purchaser(s) and/or carrying such sale of the Property into effect.

7.  The proceeds of the sale of the Property shall be paid to ELPN and be applied upon completion in the following manner and order of priority:-

(a)  in discharge of all government rent, taxes, rates and other outgoings due and affecting the Property, if any;

(b)  in discharge of all encumbrances affecting the Property having priority to the Charging Orders, if any, including costs for discharge of such encumbrances;

(c)  in payment of all costs, charges and expenses properly incurred in connection with the sale of the Property;

(d)  in payment of the Plaintiff’s costs of these proceedings;

(e)  1/2 of the remaining proceeds relating to the 1^st Defendant’s interest/share in the Property be applied in the following manner and priority:-

(i)  in discharge of the Charging Orders;

(ii)  the balance, if any, be paid to the next incumbrancer, if any, ranking immediately after the Charging Orders; or if there is no such next incumbrancer, to the 1^st Defendant;

(iii)  if the 1^st Defendant cannot be located after reasonably enquiry, such balance, if any, after deduction of the costs and disbursements for handling the same, be lodged in court to stand credit to this action until further order of the court;

(f)  the other 1/2 of the remaining proceeds relating to the 2^nd Defendant’s interest/share in the Property be applied in the following manner and priority:-

(i)  in discharge of all incumbrances affecting such 2^nd Defendant’s interest in the Property;

(ii)  the balance, if any, be paid to the 2^nd Defendant; and

(iii)  if the 2^nd Defendant cannot be located after reasonably enquiry, such balance, if any, after deduction of the costs and disbursements for handling the same, be lodged in court to stand credit to this action until further order of the court.

8.  The costs of these proceedings be paid by the 1^st and 2^nd Defendants to the Plaintiff forthwith, summarily assessed at HK$180,000.

9.  There be liberty to apply.