3 SING CREDIT LTD v. CHENG MAN YEE AND OTHERS

DCMP 842/2023

[2023] HKDC 936

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 842 OF 2023

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DECISION

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Introduction

1.  This is an application by the plaintiff (“P”), a licenced money lender under the Money Lenders Ordinance (Cap 163), for an order for sale of an apartment known as “2/F, including balcony & roof, of Block 6, Shui Fung Garden, Tuen Mun, New Territories” (“the Property”).

2.  P commenced this action based on a judgment debt in the sum of HK$901,712.44 plus interests and costs (“the Judgment Debt”) in P’s favour entered against the 1^st defendant (“D1”), who was a 1/3 registered owner of the Property. The remaining 2/3 interests were in the joint names of the 2^nd defendant (“D2”) and the 3^rd defendant (“D3”) as joint tenants. P was and remains a legal chargee of the Property vis-à-vis D1’s interests, by reason of a mortgage dated 31 July 2017 registered in the Land Registry by Memorial No 17080700380224 (“the Mortgage”), which I have read.

3.  The Property was valued at HK$5,500,000.00. None of D1, D2, or D3 (collectively, “Ds”) ever filed any acknowledgement of service or responded to this litigation in any other way or form.

4.  After an oral hearing on 15 May 2023, I indicated to P, via its solicitor Rebecca Yeung of Cheung & Choy Solicitors, that I would hand down my written decision in this matter within 3 months.

5.  This is my written decision.

6.  In gist, I am persuaded this is one of those cases where I can, and indeed should, grant an order for sale summarily.

P’s Submissions

7.  Ms Yeung, solicitor for P, drew my attention to what was said by HHJ Andrew Li in Law Chun Wai v Chu Suk Har [2016] 1 HKLRD 224 (§20 onwards) and submitted that P, as a legal chargee of the Property with a right to possession of the Property, was plainly a person entitled to bring an action under the Partition Ordinance (Cap 352) and ask for an order for sale, the physical partition of the Property being obviously impractical. Ms Yeung further drew my attention to what was said by Recorder Joseph Fok SC (as Fok PJ then was) in Wong Chun Kei v Poon Vai Chung [2007] 1 HKLRD 825 and submitted that a co-owner had a basic right to rid himself of the shackles of co-ownership so that the burden would be on an opposing co-owner to persuade this court an order for sale ought not be granted. On the basis that none of Ds had filed any evidence to oppose this application, submitted Ms Yeung, I should grant an order for sale as sought.

My View

8.  Having scrutinized all papers, I am persuaded I should, in this case, grant the reliefs sought by P summarily.

9.  Ms Yeung’s submissions on the law are correct. For example, what was said by HHJ Andrew Li in Law Chun Wai (above) have recently been applied by DHCJ Jenkin Suen SC in Ego Finance Limited v Poon Sau Han Joanna & Chan Yuk Kai Eddie [2023] HKCFI 868 (§21), whilst what was said by Recorder Joseph Fok SC (as Fok PJ then was) in Wong Chun Kei (above) have recently been applied by DDJ Kenneth KH Lee in Konew Capital International Ltd v Wong Lik Hoi [2022] HKDC 883 (§16). Such principles are trite. Applying them to the facts of this case, bearing in mind none of Ds filed any evidence to oppose the sale of the Property, I am fully satisfied this is an appropriate case to order a sale.

10.  The only comment I had on the proposed order lodged by Ms Yeung was that Ms Yeung did not explicitly put a ceiling on the amount of conveyancing costs deductible from the sale proceeds – a rather material omission which Ms Yeung had since helpfully and promptly rectified. The order which I make today, to be set out below, is substantially the same as the revised proposed order re-lodged by Ms Yeung shortly before the oral hearing on 15 May 2023.

Disposition

11.  By reason of the above, I hereby make the following order:-

(1)  Each of Ds shall deliver up vacant possession of the Property to P within 28 days after service of this order;

(2)  Upon D1 paying to P (a) the sum of HK$901,712.44 together with interest on the sum of HK$780,472.00 at the rate of 30.00% per annum from 9 May 2019 until payment; and (b) costs in the sum of HK$12,000.00 as adjudged on 6 August 2019 under District Court Action No 5994 of 2018, less the sum of HK$134.74 recovered by P previously under a Garnishee Order (“Balance of the Judgment Debt”), P do redeliver possession of the Property to Ds, and further release D1 from the security constituted by the Mortgage;

(3)  In the event of D1 failing to pay P the Balance of the Judgment Debt and the costs of these proceedings, each of Ds do deliver vacant possession, all title deeds, and all documents of the Property to P, and the Property be sold pursuant to Section 6 of the Partition Ordinance (Cap 352) at a price no less than HK$5,500,000.00;

(4)  The conduct of the sale of the Property be entrusted and committed to Cheung & Choy Solicitors, subject to this order and the directions of this court;

(5)  Each of Ds shall do all such acts and things including executing any document necessary to give effect to this order;

(6)  Should any of Ds neglect or refuse to execute document in respect of the Property within 7 days of service of this order on them, or should any of them cannot after reasonable inquiry be found, Mr Choy Man, a solicitor of Cheung & Choy Solicitors, be authorized to execute any and all such document(s) in place of Ds pursuant to Section 38A of the District Court Ordinance (Cap 336), and such execution shall for all intent and purposes be valid and effective as if the same was performed by Ds themselves;

(7)  P shall draw up, file and serve this order;

(8)  The proceeds of sale of the Property shall be applied in the following manner and order of priority:-

(a)  In discharge of all rates, Government rents, taxes, management fees and all other similar charge and outgoings due and affecting the Property;

(b)  In payment for the discharge of all encumbrances having priority to the Mortgage (including all of the costs and disbursements for discharging such encumbrances);

(c)  In payment of all reasonable costs and expenses of the sale, including commission of estate agent not exceeding 1% of the transaction price as well as the legal costs, charges and disbursements not exceeding HK$25,000.00 for such sale;

(d)  The remaining net balance to be split into 3 equal shares:-

1)  For the first 1/3 share:-

(i)  Payment to discharge the Mortgage in favour of P;

(ii)  Payment of P’s costs of this action, summarily assessed by this court at HK$95,505.00, and the fee for the valuation report for the Property in the sum of HK$10,000.00; and

(iii)  The balance, if any, after deduction of the costs and disbursements for handling the encumbrances ranking behind the Mortgage, or if there is no subsequent charge, to D1, and if D1 could not be located, to be paid into court for the credit of D1;

2)  For the second 1/3 share, to D2, and if D2 could not be located, to be paid into court for the credit of D2;

3)  For the third 1/3 share, to D3, and if D3 could not be located, to be paid into court for the credit of D3;

(9)  P’s costs of this action, assessed on the indemnity basis at HK$95,505.00, shall in any case be paid by each of Ds to P.

(10)  There be liberty to apply, including for clarification or alteration of any of the above, before any Judge of the District Court.

Final Remarks

12.  I do thank Ms Rebecca Yeung for her very able assistance.