BRIGHT EMPIRE ENTERPRISES LTD v. HO KAP SIN AND ANOTHER

HCMP 1880/2021

[2022] HKCFI 2651

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1880 OF 2021

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DECISION

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1.  This is P’s application against D1 and D2 for a declaration that the Mortgage recorded/registered in the Schedule of Block Government Lease of Demarcation District No.220 dated 27th March 1905 (the “Mortgage”) in favour of HO KAP SIN (何甲先) (“D1”) and HO YEUNG FAT (何揚發) (the “Deceased”) for $10 (part) against, touching and concerning ALL THAT piece or parcel of ground registered in the Land Registry as Lot No. 302 in Demarcation District No. 220 (the “Lot”) is incapable of subsistence or taking effect or is otherwise unenforceable by reason of the limitation of action for over 12 years, pursuant to ss19(1) and (2) of the Limitation Ordinance, Cap 347.

Service of the process

2.  In respect of D1, pursuant to leave previously obtained, substituted service has been effected.  No issue arises from that.

3.  In respect of D2:

(a)  Land search records show that he passed away some time before March 1981, and that his landed properties have been inherited by two line of successors.  Probate search however does not reveal any grant of probate or letter of administration for his estate;

(b)  Despite efforts, D2’s successors could not be located;

(c)  On 21 January 2022, and by consent, an order was obtained under Order 15 rule 6A(4) for the Official Solicitor to be appointed to represent D2’s estate, but for the limited purpose of accepting service of the Originating Summons only;

(d) The Originating Summons has been validly served upon the Official Solicitor.

The hearing on 28 June 2022

4.  The hearing of the Originating Summons was first set down for 15-minute before this Court on 28 June 2022. 

5.  For the purpose of that hearing, Mr Wong, counsel for P, lodged his written submissions on 23 June 2022.  Amongst other matter, Mr Wong therein fairly draws to my attention, relevant to P claim against D2, the case of In re Amirteymour, decd [1979] 1 WLR 63 (CA).  That case is referred to in §15/6A/8 of the Hong Kong Civil Procedure 2022, that:

“Appointment of Official Solicitor — The court has power to appoint the Official Solicitor to represent the estate of a deceased person, under para.(4) and this power may be exercised in the first instance to the limited extent of requiring him to accept service of the writ or originating summons. Such a limited appointment of the Official Solicitor as the person to act as defendant to the action lapses as soon as he accepts service of the writ, after which he becomes functus officio, and therefore since there is no one capable of acknowledging service on behalf of the defendant, any judgment entered in default of acknowledgment of service in the action is a nullity and is not enforceable (Re Amirteymour (dec’d) [1979] 1 W.L.R. 63, CA).”

6.  At the hearing on 28 June 2022 (no one appeared for either of the two defendants), I raised with Mr Wong a number of issues, which included the lack of any evidence from the documents thus far produced on the date of the Mortgage (and in particular whether the date of 27 March 1905 is the date of the Block Government Lease or that of the Mortgage), why Re Amirteymour can be distinguished on the basis that the present application is one for declaratory relief (as Deputy Judge Seagroatt did in Chan Yu Shan v The Personal Representatives of the Estate of Cheung Ying Ha (deceased) & Anor (unrep., HCMP 2722/2016, 21 June 2017) which Mr Wong relied on), and why the statutory route pursuant to section 12A of the Conveyancing and Property Ordinance Cap 219 was not pursued.  In the end, I granted P liberty to file further evidence within 14 days, to be accompanied by Mr Wong’s further written submissions to address the various issued raised, with liberty to apply, with the view of the application being dealt with on the papers.

Clarification of the date

7.  On 12 July 2022, the 4^th Affirmation of Kwok Sau Kuen was filed.  A copy of the entire Block Government Lease has now been filed.  The date of 27 March 1905 is that of the Block Government Lease.  The date of the Mortgage is not known, but must be prior to 27 March 1905.

8.  On that same date, and further on 8 August 2022, Mr Wong filed two sets of further written submissions, contending that Re Amirteymour is distinguishable on the basis that the action therein was one in personam, while the present one is effectively in rem.

Re Amirteymour distinguished

9.  In Re Amirteymour, as summarized in the headnote, the Official Solicitor was appointed in accordance with section 2 of the Proceedings Against Estates Act 1970[1] and Rules of the Supreme Court Order 15, rule 6A for the sole purpose of accepting service of the writ in the plaintiffs’ action for the recovery of a debt against the estate of a deceased in respect of whom no other personal representatives had been appointed.  The writ having been indorsed with the claim and served on the Official Solicitor, the plaintiffs entered judgment in default of appearance under Order 13, rule 1.  The plaintiffs then obtained a garnishee order nisi attaching the credit balance of the deceased’s bank account.  The Queen’s Bench master, who doubted the validity of the judgment obtained in default, refused to make an order dispensing with service on the person in whom the assets were vested and discharged the order on the ground that it had not been served.  On appeal, the Court of Appeal held that the default judgment was a nullity.  The following are material:

(a)  Section 2 of the Proceedings Against Estates Act 1970 is in the following terms:

“Rules of court made under section 99 of the Supreme Court of Judicature (Consolidation) Act 1925 or section 102 of the County Courts Act 1959 may make provision — (a) for enabling proceedings to be commenced against the estate of a deceased person (whether by the appointment of a person to represent the estate or otherwise) where no grant of probate or administration has been made; (b) for enabling proceedings purporting to be commenced against a person who has died to be treated as having been commenced against his estate; and (c) for enabling any proceedings commenced or treated as commenced against the estate of a deceased person to be maintained (whether by substitution of parties, amendment or otherwise) against a person appointed to represent the estate or, if a grant of probate or administration is made, against the personal representatives.”

(b)  In respect of the effects of that section, Lord Diplock at page 65H to 66A explained that:

“It is to be noted that a distinction is drawn between commencing an action and maintaining it after it has been commenced. Paragraph (a) authorises the making of rules permitting an action to be commenced either as an action in personam against a person appointed by the court to represent the deceased's estate or against the estate eo nomine as if it were an action in rem against property belonging to the deceased at the time of his death; but paragraph (c) makes it clear that, once commenced by issue of the writ or originating summons, motion or petition the action can only continue to be carried on as an action in personam against some person or persons authorised in law to represent the deceased’s estate who may either have been appointed by virtue of the section to do so in the particular action or may be executors or administrators of the deceased appointed in the ordinary course of administration of his estate.”

(c)  As no one was representing the estate at the time when judgment was entered in default of appearance, the judgement was a nullity.  Lord Diplock held and observed at page 66 G to 67B that:

“We agree with the master that the judgment of February 15, 1978, was a nullity. It has already been pointed out that proceedings against the estate of a deceased person that are authorised by section 2 of the Proceedings Against Estates Act 1970 and Ord. 15, r. 6A take the form of actions in personam. They are neither actions in rem, which are peculiar to the Admiralty jurisdiction of the court, nor are they actions against an abstraction — a form of proceeding unknown to English law. As in all actions in personam there must be in existence some person, natural or artificial and recognised by law, as a defendant against whom steps in the action can be taken. If and so long as there is no such person the action, though it may not abate, cannot be continued, as, for example, where a sole defendant to a subsisting action dies and no executor or administrator has yet been appointed against whom an order to continue the proceedings can be obtained under Ord. 15, r. 7 .

In the instant case on February 15, 1978, there was no person in existence against whom the step of entering judgment in the action could be taken. The limited appointment of the Official Solicitor as the person to act as defendant to the action had lapsed as soon as he accepted service of the writ. No one else had been appointed to take his place. So we would dismiss this appeal upon the ground that the judgment which was purportedly entered against the personal representatives of the deceased was a nullity.”

10.  I have considered Re Amirteymour.  I do not believe that Lord Diplock intended to hold therein that proceedings against the estate of a deceased person that are authorised by section 2 of the Proceedings Against Estates Act 1970 and Order 15, rule 6A of Rules of the Supreme Court can only take the form of actions in personam.  In my view, Lord Diplock’s observations may be understood on the facts of Re Amirteymour, that the claim therein was one in personam.

11.  On the nature of P’s claim and the relief it is seeking in the present action, Mr Wong has brought to my attention and seeks to rely on by analogy the following two cases:

(a)  虛雲和尚紀念堂有限公司 v 甘百利投資有限公司 & Anor [2018] HKCFI 718, wherein Deputy Judge Patrick Fung SC observed at §28 that a judgment for possessory title under section 7(2) of the Limitation Ordinance is “almost be equivalent to a judgment in rem regarding property rights”; and

(b)  Lo Kwong Hung v The Registrar of Companies [2018] 1 HKLRD 173, wherein G Lam J (as he then was) at §22 observed, in relation to the nature of the relief which a claimant seeking relief by virtue of the doctrine of adverse possession, that the claimant:

“... might be entitled to declaratory relief (i) of a negative nature, that the Company could no longer bring any action against them for recovery of the Land, and (ii) of a positive nature, in respect of their right in the Land, but that would be a remedy in rem as against the world.”

12.  As Ds are not represented and I have not received any adversarial submissions, I shall not reach any conclusion unless they are absolutely necessary for the disposition of the present application.  But on the strength of the above two case, noting the nature of P’s claim herein and the relief it is seeking, and noting also that this is not an application on default of appearance but one on merits, I am prepared to accept that on the facts of this case, Re Amirteymour does not apply, and this court may proceed to consider the merits of the application.

Consideration of the application

13.  I have considered the 4 affirmations of Mr Kwok Sau Kuen filed in support.  The Mortgage is an ancient one.  Further, the evidence suggests that during the whole time when P’s predecessor in title was in possession (between December 1998 and March 2021 when the Lot was sold), no one made any claim or demand concerning the Mortgage, and that P’s predecessor in title had been in possession free from disturbance, interference, claim and demand from Ds or other persons.

14.  The facts of this case is similar to those in the number of cases cited in Wong Mo Yuen and Wong Shek Yau v Choi Chiu Man and Yan Hau Hung (unrep., HCMP 988/2013, 20 March 2015, at §11), where declarations similar to the one P is seeking were granted.

15.  In all the circumstances, I grant the declaration sought, in terms of the draft order at [A/5/31-32] of the bundle, and make no order as to costs.