Lee Kwok Leung (李國良), Lee Raymond Ka Fai (李家輝), Lee Anthony Ka Ming (李家明), Lee Kam Lun, Cheung Ryan Hok Lam (張學霖), Cheung Daniel Yue Chew (張譽超), Cheung Tung Shun Thomson (張同信), Cheung Tak Sing (張德昇), Cheung Siu Fung (張小鳳)
Mr Billy Poon, instructed by M.C.A. Lai Solicitors LLP
RE LEE KWOK LEUNG AND OTHERS
[2025] HKCFI 472
| Before: | Hon Cheng J in Chambers |
| Date of Hearing: | 22 January 2025 |
| Date of Judgment: | 22 January 2025 |
| Date of Reasons for Judgment: | 24 January 2025 |
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REASONS FOR JUDGMENT
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1. These proceedings relate to:
1.1 the property known as all pieces or parcels of land registered in the Land Registry as situate lying and being at Section A, Section B, Section C, Section D, Section E, Section F, Section G, Section H, Section I, Section J, Section K and the Remaining Portion of Lot No.827 all in Demarcation District No.26, Tai Po, New Territories, Hong Kong (“the Property”); and
1.2 a mortgage registered by Mortgage Memorial Instrument No. TP 105489 in the Land Registry dated 22nd April 1939 made between Mak Yiu Fu as mortgagee of the one part and Lo Kwai Shing and Lo Kwok Fong (transliterations) as mortgagors of the other part (“the Mortgage”);
1.3 a succession to property registered by Memorial Instrument No. TP 146647 in the Land Registry dated 28th February 1962, pursuant to which Mak Chik Wing and Mak Wing On succeeded to the rights of Mak Yiu Fu under the Mortgage (“the Succession”).
2. By an ex parte originating summons filed on 20th September 2023, the Applicants applied, inter alia, under s.12A Conveyancing and Property Ordinance (Cap.219) (“the CPO”) for:
2.1 an order that the Applicants be at liberty to pay into court a sum of $6,800 being the principal and interest due under the Mortgage; and
2.2 a declaration that the Property is free from the encumbrance constituted by the Mortgage and the Succession.
3. I made an order pursuant to s.12A CPO at the hearing on 22nd January 2025, and now set out my reasons for doing so.
4. Section 12A CPO provides that:
“(1) Where land is subject to any encumbrance, whether immediately realizable or payable or not, and the encumbrancer is out of the jurisdiction, cannot be found or is unknown, or if it is uncertain who the encumbrancer is, the court may, if it thinks fit, on the application of the party for the time being entitled to redeem the encumbrance, direct or allow payment into court of a sum of money sufficient to redeem the encumbrance and any interest thereon.
(2) Upon payment into court of the sum referred to in subsection (1), the court may, if it thinks fit, and either after or without any notice to the encumbrancer, as the court thinks fit, declare the land to be free from the encumbrance, and make any order for conveyance or vesting order as appropriate, and give directions for the retention and investment of the sum of money paid into court and for the payment or application of the income thereof, and for the payment of an amount certified by the court to be the reasonable costs of the applicant in making the application, such amount to be deducted from the sum of money paid into court.
(3) On application by the encumbrancer or any person entitled to the money or fund in court, the court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.
(4) In this section, court (法院) means the Court of First Instance unless the party to the application submits to the jurisdiction of the District Court.”
5. The jurisdiction under s.12A CPO was analysed in Re Cheung Chi Wang & Another [2002] 1 HKLRD 409 (DHCJ Lam, as Lam PJ then was) and Re Light Time Investments Ltd [2010] 4 HKC 64 (DHCJ L Chan, as he then was). From these decisions, and the provisions of s.12A CPO, I discern the following.
5.1 There are three stages to an application under s.12A CPO.
5.2 At the first stage, the applicant should establish the matters under s.12A(1), and obtain the direction or approval of the court to make a payment into court sufficient to redeem the encumbrance and any interest thereon, pursuant to s.12A(1). The matters to be established are that:
5.2.1 the applicant is the party for the time being entitled to redeem the encumbrance;
5.2.2 the land in question is subject to the encumbrance in question, or at least that there is a doubt as to whether the encumbrance exists;
5.2.3 the encumbrancer is out of the jurisdiction, cannot be found, is unknown, or that it is uncertain who the encumbrancer is. If it is being said that the encumbrancer cannot be found, or is unknown or uncertain, reasonable steps must have been taken to find out who the encumbrancer is and to locate him, and evidence of such steps must generally be placed before the court.
5.3 At the second stage, after the payment into court has been made, the court will consider the exercise of its discretion under s.12A(2), including whether or not to give notice to the encumbrancer. The court may at this stage grant a declaration that the land is free from the encumbrance, and make other directions under s.12A(2). See [10] to [11].
5.4 If the encumbrancer or any other person entitled to the money paid into court applies to the court for payment out, there will be a third stage, at which the matters under s.12A(3) will be considered. See [13].
5.5 The first and second stages cannot be telescoped. There is no jurisdiction to declare a conditional release of the encumbrance before payment into court has been made.
5.6 The second stage may or may not require a hearing; the hearing can be dispensed with if this can be done without any risk of injustice to the encumbrancers or their descendants, for example by making appropriate advertisement of the proceedings.
6. In the present case, having considered the evidence placed before the court in the Affirmation of Cheung Siu Fung, I was satisfied that the requirements of s.12A(1) CPO have been met.
6.1 The Applicants are the registered owners of the Property as follows:
6.1.1 the 1st Applicant: Section A of the Property;
6.1.2 the 2nd Applicant: Section B of the Property;
6.1.3 the 3rd Applicant: Section C of the Property;
6.1.4 the 4th Applicant: Section D of the Property;
6.1.5 the 5th Applicant: Section E of the Property;
6.1.6 the 6th Applicant: Section F of the Property;
6.1.7 the 7th Applicant: Sections G, J and Remaining Portion of the Property;
6.1.8 the 8th Applicant: Sections H and I of the Property;
6.1.9 the 9th Applicant: Section K of the Property.
6.2 The Applicants are entitled to redeem the Mortgage.
6.3 The Property is still subject to the Mortgage, which has never been discharged.
6.4 The encumbrancers cannot be found, are unknown, or it is uncertain who the encumbrances are, in that whilst Mak Tak Fat, to whom letters of administration in respect of the estate of Mak Chik Wing (deceased) were granted, has executed a Deed of Release dated 15th November 2018 discharging (for his part) the Mortgage, Mak Wing On cannot be found.
6.4.1 A death search was carried out for Mak Wing On, but no record was found. Further inquiries with the Fung Yuen Village, where Mak Wing On was said to come from, were made. A letter was received from one Mak Ka Fai in response, stating that Mak Wing On had passed away, that he had no son, and that Mak Ka Fai’s father was the “successor son”. The Applicants’ solicitors asked Mak Ka Fai for further information, but none was received. They obtained a copy of a death certificate from the Births and Deaths Registry (despite the fruitless search carried out earlier) showing that a Mak Wing On from Fung Yuen Tsuen had died in March 1979.
6.4.2 A probate search was conducted. Letters of administration of one Mak Wing On were granted to one Mak Mei Yung on 6th November 2000, but on making further inquiries of Mak Mei Yung, it turns out that the estate which she is administering is that of a different Mak Wing On. Letters of administration of another Mak Wing On Albert were granted to one Mak Kai Kim on 21st March 2001, but the name is not identical to, and the date of death does not tally with, that of the Mak Wing On from Fung Yuen Tsuen who died in March 1979.
6.4.3 In the circumstances, I accepted that reasonable steps have been taken to locate Mak Wing On, but that he cannot be found.
7. The Applicants revised the amount of the payment into court proposed to be made pursuant to s.12A(1) CPO. Adopting a notional annual interest rate of 20% (as has been done in a number of other similar cases), the principal of $400 and interest for 79 years from 1946 amounts to $6,720. The Applicants undertook to pay $6,800 into court.
8. I therefore ordered as follows.
8.1 Leave be given to the Applicants to pay $6,800 into court to redeem the Mortgage and any interest thereon.
8.2 Within 28 days after the payment into court, the Applicants should advertise in a widely circulated local Chinese newspaper a notice:
8.2.1 making known this order,
8.2.2 making known the fact that payment into court has been made pursuant to this order, and
8.2.3 stating that any person interested in the Mortgage and/or the payment into court may apply within 28 days to be joined as a respondent to these proceedings.
8.3 The Applicants may, after the lapse of no less than 35 days from the publication of the advertisement, make a paper application to the court pursuant to s.12A(2) CPO for a declaration that the Property is free from the encumbrance constituted by the Mortgage.
9. I made no order as to costs.
| (Yvonne Cheng) | |
| Judge of the Court of First Instance High Court |
Mr Billy Poon, instructed by M.C.A. Lai Solicitors LLP, for the 1st to 9th Applicants