XCHRX AMBRIDGE INVESTMENTS LTD. v. LEXON INVESTMENT LTD. AND ANOTHER

HCA9743/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.9743 OF 2000

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J U D G M E N T

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1. This is an application by the 2nd defendant against the plaintiff for an interim injunction in the terms of its summons dated 6 November 2001. After hearing counsel, I would dismiss the application and, for present purposes, I would state my reasons briefly as follows.

Serious question to be tried

2. On the question of whether the 2nd defendant has raised a serious question to be tried, my analysis is this. It is not seriously disputed that after the court made the possession order in relation to the suit property against the 1st defendant on 4 October 2001, and the subsequent failure by the 1st defendant to pay all the arrears within four weeks pursuant to the order for relief against forfeiture, the 2nd defendant is now a trespasser vis-à-vis the plaintiff. What the interim injunction seeks to protect is the 2nd defendant's right to apply for relief against forfeiture. There are two ways to make such application. The first route is via section 21F of the High Court Ordinance. In this respect, I accept the submission of Mr Chain for the plaintiff that section 21F(3) had already been invoked by the court in making the possession order on 4 October 2001 against the 1st defendant; that time had already passed and that there was no application by the 1st or 2nd defendant for extension of time to comply with the condition. I do not agree with the submission of Mr Lam for the 2nd defendant that the 2nd defendant is entitled to invoke section 21F(3) when an order of possession against the 2nd defendant is obtained. On a proper interpretation of the relevant section, the 2nd defendant, in my view, is not entitled to invoke subsection (3) in order to apply for relief against forfeiture. If he wants to gain benefit from subsection (3), he should have done so when the learned recorder made the possession order with a proviso for relief against forfeiture.

3. The second route is via section 58(4) of the Conveyancing and Property Ordinance. This is a discretionary power conferred on the court on application to make a vesting order. For the purpose of this application, the 2nd defendant should present materials before the court to raise a serious question that, in the intended application, either in the pending summary judgment application or by way of another action, it would be entitled to relief under section 58(4). But there is either no or insufficient materials before me to overcome that hurdle. In particular, I note that there is a lack of evidence on the 2nd defendant's financial ability to meet any possible requirement of payment if relief were to be granted.

Balance of convenience

4. Even if I am wrong and there is a serious question to be tried, I think the balance of convenience is against the 2nd defendant.

5. On the materials before me, and, in particular, on the lack of evidence on the 2nd defendant's financial position, I have grave doubt why an injunction should be granted to protect the 2nd defendant who is a mere trespasser with a right to apply for relief against forfeiture. After all, what is the purpose of granting an injunction to enable the 2nd defendant to pursue his application for relief against forfeiture when, at the end of the day, it is more likely than not that it may not be able to meet any requirement imposed for relief?

6. This application must fail and I dismiss it accordingly with costs.