HUI KWOK HAU v. HUI MIMIE MEI MUI

HCMP 1603/2022

[2023] HKCFI 1654

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1603 OF 2022

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J U D G M E N T

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A. INTRODUCTION

1.  Before me is a vendor and purchaser summons dated 17^th October 2022 (“the Summons”)  issued under s.12 of the Conveyancing and Property Ordinance, Cap.219 by the Plaintiff, the vendor of all those pieces or parcels of ground registered in the Land Registry as Lot Nos. 29, 30, 43, 112, 252, 263, 291, 520, 728, 730, 731, 749, 750, 751, 752, 753, 754, 755, 756, 757, 758, 798, 807, 813, 820 and 1035, all in Demarcation District No.360 (“DD 360”), Tsuen Wan, New Territories, Hong Kong (“the Properties”).

2.  The Plaintiff seeks a declaration that the requisition numbered 3 in the letter dated 26^th July 2022 from the Defendant’s solicitors Messrs So, Lung and Associates (“SLA”)  in respect of the title of the Properties has been sufficiently answered by the Plaintiff, and that good title to the Properties has been shown.

3.  The Defendant takes a neutral stance in this application.

B.  THE BACKGROUND

4.  There is no dispute as to the facts.

5.  The Plaintiff is the registered owner of the Properties.

6.  By an agreement dated 18^th July 2022, the Plaintiff agreed to sell and the Defendant agreed to purchase the Properties.

7.  By a letter dated 26^th July 2022, SLA raised a number of requisitions in relation to the title of the Properties.  Under the first requisition, SLA asked for copies of:

7.1  Mortgage Memorial No. TW29626 (dated 30th January 1929);

7.2  Mortgage Memorial No. TW29670 (dated 5^th February 1929); and

7.3  Mortgage Memorial No. TW29822 (dated 21^st March 1929).

8.  The three mortgages (collectively “the Mortgages”)  had been registered against various lots within DD 360, including but not limited to the Properties.

The Requisition

9.  Under the third requisition, which is the subject of the vendor and purchaser summons (“the Requisition”), SLA noted from the land search records of the Land Register of the Properties that the Mortgages, which were in favour of a Wong Kit Wan (“Mr Wong”)  as mortgagee, had not been released or discharged by any deeds of release and remained as encumbrances against the Property.  SLA further noted from the remarks in the Land Register that a vesting order had been granted against the estate of Tsang Ting Tseung by Mr Wong in action Nos.101 and 102/31, and speculated that Mr Wong had acquired the title of the Properties from Tsang Ting Tseung as a result of foreclosure action based on the Mortgages. SLA asked for clarification as to whether the Mortgages had been properly foreclosed by the vesting order in action Nos.101/31 and 102/31, and for documentary evidence of the contents of the vesting order.

10.  In fact, according to the Land Register for the Properties, there were three vesting orders (“the Vesting Orders”)  obtained by Mr Wong in action Nos.101/31, 102/31, 103/31 (“the Actions”), against the estate of the first owners of the Properties,[1] as follows.  (The parties have proceeded on the basis that the Requisition relates to all three of the Vesting Orders.)

Action in which Vesting Order made	Date of registration of Vesting Order	The lots within DD 360 covered by the Vesting Order	Person against whose estate the Vesting Order was made	Corresponding Mortgage
No.101/31	4th August 1931	728, 730, 731, 749, 750, 751, 752, 753, 754, 755, 756, 757, 758, 798, 807, 813, 820, 1035	Tsang Fai Yuk	Memorial No.TW29670, dated and registered on 5th February 1929
No.102/31	4th August 1931	29, 30, 43, 112, 252, 263, 291	Tsang Ting Tseung	Memorial No. TW29822, dated and registered on 21st March 1929
No.103/31	4th August 1931	520	Tsang Tai Yuk	Memorial No. TW29626, dated and registered on 30th January 1929 [2]

Other facts relating to the Properties

11.  According to the grant of probate dated 19^th December 1955 in respect of Mr Wong’s estate, Mr Wong died on 31^st October 1952.  Probate was granted to his widow Wong Pik Ngo (“Madam Wong”).  The schedule of property disclosed on Mr Wong’s death, as annexed to the grant of probate, identified all of the Properties as part of Mr Wong’s “Land & Buildings in New Territories”.

12.  The grant of probate was registered in the Land Register against each of the Properties.

13.  The Properties and other lots within DD 360 were the subject of a conveyance on sale dated 8^th May 1956 by Madam Wong (as Executrix to Mr Wong)  to the Plaintiff and Hui Siu Wing.

14.  Hui Siu Wing assigned his interest to Ho Pui Fun by an assignment of 20th December 1963.

15.  There was then a deed of partition dated 8^th July 1972 pursuant to which (inter alia)  Ho Pui Fun assigned her interest in the Properties to the Plaintiff.

16.  The affirmation evidence from the Plaintiff’s son, who has been acting on behalf of the Plaintiff in the sale of the Properties and in these proceedings pursuant to a power of attorney, is that the Plaintiff has told him that he occupied the Properties since about 1956.

The answer to the Requisition

17.  In a letter of 11th October 2022 to SLA, the solicitors for the Plaintiff, Messrs Or & Partners (“OP”), provided copies of the Memorials in respect of the Mortgages.  They responded to the Requisition by saying that:

17.1  they had made an enquiry to the Land Registry on 8^th June 2022 regarding the Vesting Orders, but had been told that the requested documents were not available.  Copies of the exchange of correspondence were provided;

17.2  they had also made an enquiry to the District Lands Office[3] on 8^th June 2022, but had not received any response, despite chasers of 28^th June, 30th September and 3^rd October 2022.  Copies of the exchange of correspondence were provided;

17.3  given the fact that the Vesting Orders had been registered close to a century ago in August 1931, they considered that there was no real risk to the Plaintiff’s good title to the Properties and that they would not affect the root of the title or the legal and beneficial interest of the Plaintiff as owner.

C.  THE APPLICABLE PRINCIPLES

18.  There is no dispute as to the applicable principles, which were summarised in Asia Rich Incorporation Limited v Chin Hung [2019] HKCFI 2187 at [19] to [21].  For present purposes, the following are relevant.

18.1  The test as to whether “good title” has been given or shown by the vendor or boils down to whether there is a real risk that a third party might assert some right over the property, thereby encumbering it or defeating the title altogether.  (See De Monsa Investments Ltd v Whole Win Management Fund Ltd (2013)  16 HKCFAR 419 at [109].)

18.2  A good title does not mean a perfect title, free from every possible blemish.  The question of whether good title has been shown by a vendor must be approached from the standpoint of a willing purchaser and a willing vendor, both possessed of reasonably robust common sense, both intending to see the transaction through to completion in terms of their own bargain.  (See Mexon Holdings Ltd v Silver Bay International Ltd (2000)  3 HKCFAR 109 at 117D-E.)

18.3  The court should best be guided by commercial reality as to whether there is any real risk of problems in title.  It is not to be troubled by the absence of an absolute risk-free assurance, nor unduly hampered by strict legal proof in matters requisitioned.  Conveyancing practice must be geared to uphold bargains.  (See Jumbo Gold Investment Ltd v Yuen Cheong Leung [1999] 3 HKLRD 825 at 833F-G (per Liu JA, dissenting; upheld on appeal to the Court of Final Appeal.))

18.4  What is required to prove title in a given case must depend on the specific facts and circumstances and one must apply common sense.

18.5  If the facts and circumstances of a case are so compelling to the mind of the court that the court concludes beyond reasonable doubt that the purchaser will not be at risk of a successful assertion against him of the incumbrance, the court should declare in favour of a good title shown.  (See MEPC Ltd v Christian-Edwards and others [1981] AC 205 at 220C.)

18.6  If the risk is, for all practical purposes, illusory, the court can and should be prepared to ignore it and accordingly dismiss any objection to title founded upon it.  (See Kan Wing Yau v Hong Kong Housing Society [1988] 2 HKLR 187 at 193E-F.)

D.  APPLICATION OF THE PRINCIPLES TO THE PRESENT CASE

19.  The question in the present case is whether good title to the Properties was given to Mr Wong as the mortgagee.  On the one hand, the Vesting Orders were made; on the other hand, there was no indication that the Mortgages had been released or discharged, and they remained as encumbrances against the Properties in the Land Register.  The Plaintiff submits that in all probability, the Mortgages were foreclosed, and the Vesting Orders vested title in the Properties in Wong.

20.  I note that there is some ambiguity in the remarks in the Land Register regarding the Vesting Orders.  Taking Lot No. 29 as an example: under “Property Particulars”, there is a remark “Vesting Order to the Estate of Tsang Ting Tsuen by Wong Kit Wan vide Action No.102/31”; however, under “Owner Particulars”, against Tsang Ting Tsuen’s name, there is a remark “Govt. Lease of Lot No.29 in DD 360 Vesting Order to Wong Kit Wan vide Action No.102/31 See Remark”.  One remark says that the vesting order is “to” the estate of Tsang Ting Tsuen, whilst the other says that the vesting order is “to” Wong Kit Wan.

21.  In all likelihood, the Vesting Orders vested the Properties in Mr Wong, given the events which have happened since the time of the Vesting Orders, all of which, when taken together, point to Mr Wong having acquired title to the Properties.  Otherwise, it makes little sense that the Properties were included in the schedule of property disclosed on Mr Wong’s death (in relation to which estate duty was paid), that the grant of probate could be registered in the Land Registry against each of the Properties, that Madam Wong could sell the Properties to a third party, that the Plaintiff as the current registered owner could have remained in occupation since the 1950s until now, and that throughout all of this, there was never any challenge to the title of Mr Wong or his successors in relation to any of the twenty-six Properties by any of the Tsangs or their representatives.

22.  In all likelihood, the Vesting Orders were made upon the exercise by Mr Wong of his right, as mortgagee, to foreclose the Mortgages, extinguishing the mortgagors’ rights to redeem the Mortgages.  The remarks indicate that the Vesting Orders were made in relation to the three Actions in 1931.  The registration of the Mortgages against each of the Properties in the “Incumbrances” section of the Land Register bears a remark referring to one of the three Actions, and in some cases a further remark that details are contained in the “Property” section of the Land Register, with the “Property” section referring to one of the Vesting Orders and one of the Actions.

23.  It does not seem to me that there is any real risk of a problem with the title to the Properties. The Vesting Orders were made almost one hundred years ago, and there is no evidence that challenge has been made to them at any time, or that there is any ground for such a challenge.  Given the lapse of time, there is also no real risk that the foreclosure could be reopened.  See Fisher and Lightwood’s Law of Mortgage, 15^th ed., at paragraph 32.71.

24.  I therefore conclude that any risk that the Mortgages were not properly foreclosed, or that the Vesting Orders did not vest title in the Properties to Mr Wong, is theoretical and can be ignored, and does not constitute a defect in the Plaintiff’s title to the Properties.

E.  DISPOSITION

25.  I grant a declaration in terms of paragraphs 1 and 2 of the Summons.  In accordance with parties’ agreement, I make no order as to costs.