HAU KWOK PING AND OTHERS v. MAN KONG LUN

HCMP 1581/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1581 OF 2000

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J U D G M E N T

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1. This is an action by Originating Summons for a declaration that the mortgage in question is no longer subsisting or is incapable of taking effect, under section 19 of the Limitation Ordinance, Cap. 347.

2. The property in question was registered in the North New Territories Land Registry as Lot No. 1300 in Demarcation District No. 92 ("the Lot"). The mortgage in question was made not later than 27 March 1905, which was the date of the Block Crown Lease.

3. The history of the matter may be given as follows.

4. By a memorial entitled "succession to property" dated 6 October 1952, the 1st Plaintiff succeeded to one-half of the Lot and held the other half on trust for the 2nd Plaintiff. By another memorial entitled "removal of trustee" dated 15 June 1976, the 1st Plaintiff was removed as the trustee by the 2nd Plaintiff regarding the 2nd Plaintiff's half share in the Lot, the 2nd Plaintiff having attained majority.

5. A deed poll dated 18 December 1997 was made between the 1st and 2nd Plaintiffs by which the Lot was carved out into several portions, namely, sections A, B, C, D, E, F & Remaining Portion, as more particularly shown in the plan annexed to the deed poll.

6. On the same date, four assignments were made between the 1st and 2nd Plaintiffs as vendor and the 1st, 3rd, 4th and 5th Plaintiffs as purchasers whereby sections D, A, B and C respectively were sold and assigned to these purchasers for valuable consideration. Sections E, F and the Remaining Portion continued to be held by 1st and 2nd Plaintiffs as tenants in common in equal shares.

7. As stated earlier, the mortgage in question was mentioned in the Block Crown Lease dated 27 March 1905. It was stated that the mortgagee was Mr Hau Tin Tseung, being the Plaintiffs' predecessor in title. The Defendant was the mortgagee. The Lot was mortgaged to the Defendant to secure a loan of HK$32.00. No other information is known about the mortgage.

8. The 1st and 2nd Plaintiffs, who had become registered owners of the Lot as early as October 1952, had never received any demand for payment in respect of the loan secured by the mortgage from the Defendant. Nor did the Plaintiffs ever acknowledge liability to repay the loan under the mortgage.

9. From the evidence before me, the mortgage must have been made not later than March 1905. These proceedings were brought in March 2000. The relevant period of limitation is 12 years. The latest period by which the mortgagee could have enforced the loan or the mortgage would be not later than 1988. I find on the balance of probabilities that the mortgagee's right to receive payment of the principal sum and interest, if any, must have long since expired. Likewise, the mortgagee's right to bring any action for foreclosure must also have long since expired.

10. The Plaintiff's solicitors had caused enquiries to be made of the Defendant at the Births and Deaths Registry, the District Lands Office and the Lands Department. Despite such enquiries, they could not locate the Defendant. The Plaintiff's solicitors obtained an order for substituted service of the Originating Summons on 25 May 2000 by advertisement in two newspapers. The notice of the hearing today was likewise advertised in newspapers. Nothing was heard from the Defendant.

11. In the circumstances, I think it would be appropriate to make a declaration that the mortgage in question is no longer subsisting or is incapable of subsistence or is unenforceable by the operation of sections 7(2) and 19 of the Limitation Ordinance.