FUNG KWONG TAI TSO AND OTHERS v. KWOK YIU WING AND ANOTHER

1990, M.P. No.1494

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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JUDGMENT

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1. This is a vendor and purchaser summons. The plaintiff ("the vendor") is Fung Kwong Tai Tso and its managers are Fung Kam Cheung and Fung Kun Cheong. (I understand that, under the relevant legislation, the Tso has power to hold land and the managers have power to deal with the land.)  The defendants ("the purchasers") are Kwok Yiu Wing and Wan Juen Hing.

2. The vendor is the vendor under an agreement for sale and purchase dated 27th April 1989 and the purchasers are the purchasers under that agreement. The property the subject of the agreement is Lots 3929, 3985, 3986, 4007, 4131, 3656, 3685 and 3679, all in Demarcation District No.104, Lots 85, 104, 122 and 107 a11 in Demarcation District No.107 and Pok Wai House No.49, Yuen Long, New Territories, Hong Kong.

3. The purchasers have raised an objection to the vendor's title. The objection is based on the existence of a memorial registered in the District Office. The memorial refers to what is described as a "Prohibitory Order". This is said to be dated 6th February 1925 and to have been made "by order of court".

4. Counsel for the vendor was unable to explain to me what a "Prohibitory Order" is. He suggested that there were certain courts in operation in the New Territories in 1925 which had power in certain circumstances to make Prohibitory Orders (whatever they are). But however that may be counsel for the vendor submits that the existence of this Prohibitory Order cannot constitute any blot on the vendor's title. He bases that submission on the Judgments Act 1839, an Act of the United Kingdom Parliament. By the 4th section of the 1839 Act, it was enacted, among other things, that all orders in any court of equity and any orders in bankruptcy or lunacy which are not re-registered with the court every five years shall be null and void as to purchasers, mortgagees or creditors. (I need not, I think, set out the precise words of the 4th section, which is couched in antique language; I am satisfied its effect is as I have stated.)

5. Section 17 of the Land Registration Ordinance, Chapter 128, after referring to a number of Acts of Parliament including (by reference to Section 14 of the Ordinance) the Judgments Act 1839, provides that so much of it :

"as requires the re-registering of judgments and lites pendentes after every successive period of 5 years, beginning from the entry thereof respectively, shall extend to all judgments, lites pendentes and orders, registered in the Land Office, and by which it is intended to affect any estate."

6. Counsel for the vendor points out that the Prohibitory Order dated 6th February 1925 does not appear to have been re-registered. So, he says, it ought to be treated as null and void against the purchasers. But it is submitted by counsel for the purchasers that in all the circumstances there is a real possibility of litigation which might adversely affect the purchasers' interest as a result of this Prohibitory Order.

7. Although it is impossible for me, on the material which I have, to form any sensible view as to the nature and effect of the Prohibitory Order, and although I cannot therefore be certain that the provisions of the Judgments Act 1839 (as extended to Hong Kong by Section 17 of the Land Registration Ordinance) apply so as to render this Prohibitory Order void as against a purchaser, I am quite satisfied that the risk of any litigation based upon the Prohibitory Order is fanciful rather than real. It may be that the Prohibitory Order is a blot upon the title; but it is a theoretical rather than a real blot and there is, in my judgment, no real risk from it to the purchasers.

8. It is clear that the vendor must satisfy the court beyond a reasonable doubt that any blot on the title may safely be ignored; but in the present case, I am so satisfied. I shall, therefore, declare that the purchaser is not entitled to object to the title offered by the vendors by reason only of the Prohibitory Order dated 6th February 1925. I understand the vendor does not ask for costs so I shall make no order as to costs.