RE CHAN LEI QIWEN, in her capacity as the administratrix of the estate of Chan Kwai Sing, deceased, for a declaration under Section 12A of the Conveyancing and Property Ordinance, Cap.219

HCMP 1061/2024

[2024] HKCFI 2079

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1061 OF 2024

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HCMP 1062/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1062 OF 2024

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JUDGMENT

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THE APPLICATION

1.  By an Ex Parte Originating Summons filed on 21 June 2024 in HCMP 1061/2024, the applicant, in her capacity as the administratrix of the estate of Chan Kwai Sing, Deceased (“the Deceased”), applied for, inter alia, an order pursuant to section 12A of the Conveyancing and Property Ordinance (Cap 219, Laws of Hong Kong) (“the CPO”) that the properties known as Lot Nos.144, 147, 150, 158 and 162 in Demarcation District No.276, Sai Kung, New Territories, Hong Kong  (“the 1061 Lands”), upon payment into Court of a sum of money, be free from a mortgage (“the 1061 Mortgage”) in favour of 陳其坑 (“the 1061 Mortgagee”).

2.  By another Ex Parte Originating Summons filed on the same day in HCMP 1062/2024, the applicant applied, also in her capacity as the administratrix of the estate of the Deceased, for a similar order in respect of the properties known as Lot Nos. 148, 151, 153, 157, 160, 163, 911, 913, 1003 and 1004 in Demarcation District No.276, Sai Kung, New Territories, Hong Kong (“the 1062 Lands”).  The relevant mortgage (“the 1062 Mortgage”) in respect of the 1062 Lands was made in favour of 陳仁亨 (“the 1062 Mortgagee”).

THE LAW

3.  Section 12A of the 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.”

4.  Guidance on the procedure to be adopted in relation to an application made under section 12A of the CPO has been given by Deputy High Court Judge Lam (as Lam PJ then was) in Re Cheung Chi Wang & Another [2002] 1 HKLRD 409. There are three stages in this application:

(1)  The first stage is for the party for the time being entitled to redeem the encumbrance to obtain a direction or approval of the court regarding payment into court provided it is shown that the encumbrancer is out of the jurisdiction, cannot be found or is unknown, or if it is uncertain who the encumbrancer is.

(2)  In the second stage, on the basis that payment into Court is made pursuant to the Court’s approval, the Court will consider the exercise of its discretion and declare the land to be free from the encumbrance.  At this stage, the Court has the discretion to decide whether notice should be given to the encumbrancer.

(3)  The matter would come to its third stage when the encumbrancer or any person entitled to the money paid into Court applies to the Court for payment.

DISCUSSION

5.  Having considered the affirmations filed in support of these applications, I am satisfied that:

(1)  The applicant is the registered owner of the 1061 Lands and the 1062 Lands in her capacity as administratrix of the estate of Chan Kwai Sing, Deceased;

(2)  The 1061 Lands and the 1062 Lands are still subject to the 1061 Mortgage and the 1062 Mortgage respectively (collectively, “the Mortgages”);

(3)  The applicant is entitled to redeem the Mortgages.

6.  I am also satisfied that reasonable steps have been undertaken to locate the 1061 Mortgagee and the 1062 Mortgagee (collectively, “the Mortgagees”) but in vain.  Since the Mortgagees cannot be found, section 12A(1) of the CPO is engaged.

7.  In respect of the payment to be paid into Court, the applicant proposed that the sum be fixed at $600 in each case.  Having regard to the amount owed (including interest) under the Mortgages and the notional annual interest rate of 20%, I agree that the proposed sums must be more than enough to discharge the Mortgages.

ORDER

8.  By reasons of the aforesaid, I make the following orders:

(1)  Leave be granted to the applicant to pay into Court a sum of $600 being a sum sufficient to redeem the 1061 Mortgage and any interest thereon, upon the applicant’s filing into Court the Amended Ex Parte Originating Summons in HCMP 1061/2024.

(2)  Leave be granted to the applicant to pay into Court a sum of $600 being a sum sufficient to redeem the 1062 Mortgage and any interest thereon, upon the applicant’s filing into Court the Amended Ex Parte Originating Summons in HCMP 1062/2024.

(3)  Within 14 days after the payments into Court are made, the applicant do advertise in a widely circulated local Chinese newspaper two notices making known this Order and the fact of payments having been made into Court pursuant to this Order and stating that any person interested in the Mortgages and/or the payments aforesaid may apply within 14 days to be joined as a defendant to the relevant proceedings herein.

(4)  The applicant may after the lapse of no less than 21 days from the publication of the advertisement make a paper application pursuant to section 12A(2) of the CPO for a declaration that the relevant Lands be free from the 1061 Mortgage and/or the 1062 Mortgage, as the case may be; and

(5)  There be no order as to costs.