FORD WORLD DEVELOPMENT LTD v. YAU KAM HING AND OTHERS

DCMP 1979/2023

[2024] HKDC 1839

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1979 OF 2023

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BETWEEN

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JUDGMENT

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I. Introduction

1.  By Originating Summons dated 3 May 2023 (as amended on 18 August 2023) (“the OS”), the Plaintiff seeks, inter alia, the following orders:

(a) The land known as Lot No. 252 in Demarcation District No. 36 in Tai Po, New Territories, Hong Kong (the “Lot”) be sold, pursuant to Section 6 of the Partition Ordinance (Cap 352) (“PO”), in the manner set out in §§1(a) to (d) of the OS. The approximate location of the Lot is identified and coloured pink on the Plan annexed to the OS.

(b) Costs of the present proceedings be summarily assessed and paid out of the sales proceeds of the Lot.

2.  As the 2^nd and 4^th Defendants have passed away, the present proceedings are pursued against their respective estates. Pursuant to the Order of Master Vienne Luk dated 14 March 2024, the Official Solicitor was appointed to represent the 2^nd and 4^th Defendants for the limited purpose of accepting the service of the OS. The Official Solicitor notified the Plaintiff that it would not file any acknowledgement of service. Pursuant to the Order of Master Maurice Lam dated 23 May 2024, the Plaintiff was granted permission to proceed with the OS against the 2^nd and 4^th Defendants in their absence, and any order or judgment given in these proceedings shall bind the 2^nd and 4^th Defendants to the same extent as it would have been bound had personal representatives of the 2^nd and 4^th Defendants been a party to these proceedings.

3.  As for the 1^st and 3^rd Defendants, substituted service on them were effected pursuant to the Order of Master B Mak dated 7 July 2023 by (a) posting up the OS and the other Court documents on the main notice board of Cheung Shue Tan Village (樟樹灘) (“the Village”) and placing them on the wooden chair right next to the notice board (being the last known address of the 1^st and 3^rd Defendants) on 13 October 2023; and (b) placing an advertisement to give notice of these proceedings in Chinese in Sing Tao Daily on 18 October 2023.

4.  None of the Defendants have raised objection to the OS.

5.  At the first hearing of the OS on 2 August 2024 (“the Hearing”), the Plaintiff was represented by its Solicitors. The Defendants were absent. Upon being satisfied that all the Defendants have been given notice of the Hearing, this Court proceeded with the Hearing in the absence of the Defendants.

II. Ownership and condition of the Lot

6.  At all material times, the Plaintiff and the Defendants were co-owners of the Lot, holding the Lot as tenants-in-common in the following shares:

(a) Plaintiff: ¼ share, obtained pursuant to Assignment dated 10 March 2022 (M/N 22040101720029);

(b) 1^st Defendant: ¼ share (1/2 of ½ share), obtained pursuant to Succession to Property dated 26 November 1968 (M/N TP 162633);

(c) 2^nd Defendant: ⅙ share (1/3 of ½ share), obtained pursuant to Succession to Property dated 26 November 1968 (M/N TP 162632);

(d) 3^rd Defendant: ⅙ share (1/3 of ½ share), obtained pursuant to Succession to Property dated 26 November 1968 (M/N TP 162632); and

(e) 4^th Defendant: ⅙ share (1/3 of ½ share), obtained pursuant to Succession to Property dated 26 November 1968 (M/N TP 162632).

7.  The Lot is located on a steep slope. As shown in the aerial photos of the Lot, there was no structure erected on the Lot. The Lot appears to be abandoned and overgrown with wild vegetation. There was no footpath or vehicular access leading to the Lot.

8.  Under the Approved Tai Po Outline Zoning Plan No. S/TP/30, the Lot was zoned as “Residential (Group B) 12” “R(B) 12”, the maximum PR/GFA is 3.3. The Lot is primarily intended for medium-density residential developments.

III. Applicable Legal Principles

9.  Section 2 of the PO provides that:

“Subject to this Ordinance, where any property in land is held by 2 or more persons, whether as joint tenants or as tenants in common, the Court may –

(a) make an order under section 4 for a partition of the property;

(b) make an order under section 6 for a sale of the property; or

(c) refuse to make any order.”

10.  Section 3 of the PO provides that:

“Where any property in land is held in the manner referred to in section 2, any person interested in such property may institute proceedings in the Court under this Ordinance by way of an action for partition or sale…”

11.  Section 6 (1) of the PO provides that:

“In any proceedings under this Ordinance, where it appears to the Court that a partition of the property would not be beneficial to all persons interested by reason of –

(a) the nature of the land to which the proceedings related;

(b) the number of the persons interested or presumptively interested;

(c) the absence or disability of some of the persons interested; or

(d) any other circumstances,

the Court may make an order for the sale of the property.”

12.  The principles governing the Court’s exercise of discretion under Section 6 (1) of the PO have been stated in Wong Chun Kei v Poon Vai Ching [2007] 1 HKLRD 825 per Recorder Fok SC (as Fok PJ then was) at §§16-19, and cited in Chung Chi Cheung v Chung Kwan Wa [2017] 1 HKLRD 57 per DHCJ Le Pichon at §§9-11:

(a) A co-owner has a basic right to rid himself of the shackles of co-ownership and, if he has no other recourse, ask for an order for partition or sale.

(b) When it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner(s)) that such an order will not be beneficial to all the co-owners or that it will result in very great hardship to one owner.

(c) Whether an order for sale is beneficial to all the co-owners is not determined by the dissent of the opposing co-owners or the assertion by them that it is not beneficial. It has to be determined by the Court objectively.

13.  In Holly Property Company Limited v the Personal Representatives of the Estate of Leung Chiu Lau, Deceased (unreported, DCMP 369/2019, 3 July 2020), the plaintiff and the defendant (being the estate of a deceased) were co-owners of a property, holding as tenants in common. HHJ Harold Leong granted an order for sale of the property in the absence of the defendant. The learned Judge referred to the following steps in §18 of the judgment which he considered to be sufficient to safeguard the defendant’s interest:

(a) A reserve price was set up with reference to professional valuation evidence.

(b) A professional solicitor (who owed a duty to the Court) was appointed to execute the conveyancing and other necessary documents to effect a sale of the property.

(c) The sale proceeds belonged to the estate were ordered to be paid into Court.

IV. Discussion

14.  As one of the co-owners of the Lot, the Plaintiff is entitled to apply for an order for sale under the PO.

15.  For the reasons below, I am of the view that the Plaintiff is entitled to rid himself of the shackles of co-ownership and partition of the Lot is impracticable. Ordering the sale of the Lot would be beneficial to the interest of all the co-owners.

16.  First, with respect to the nature of the Lot:

(a) The size of the Lot is small. As the Lot is co-owned by 5 owners, if a partition order were to be granted, the Lot will be partitioned into 5 even smaller portions with the areas of each portion ranging from 7.5 square metres to 11.4 square meters.

(b) The Lot is currently in an abandoned status, covered with heavy vegetation. There is no vehicular access to the Lot. The 2 possible access paths to the Lot by foot are currently blocked by the heavy vegetation.

(c) While at present the land usage of the Lot is for agricultural activities, such activities are not viable due to the lack of any nearby irrigation ditch. As the size of each portion of the Lot after partition would be very small, it is not commercially viable to conduct agricultural activities on each partitioned portion even after the Lot were partitioned.

(d) Although the Lot falls within the zoning of “Residential (Group B) 12” “R(B) 12” with the maximum PR/GFA at 3.3, it is not feasible nor practicable to apply for sporadic development of the proposed partitioned portions of the Lot as the location of the Lot is remote and difficult to access, and that the size of the Lot is small.

17.  Second, the Defendants have not indicated any objection to the Plaintiff’s application for the order of sale. The Lot is not currently occupied, an order for sale would not cause prejudice to the financial interest or bring about any hardship to any party.

18.  Third, I am satisfied that the Defendants’ interest would be protected, given that a reserve price of HK$770,000 will be set for the sale with reference to the Valuation Report of Messrs. Memfus Wong Surveyors Limited dated 26 October 2022. As proposed by the Plaintiff in the OS, the sale of the Lot would be conducted by the Plaintiff’s solicitors and that the Defendants’ portions of the proceeds of sale would be paid into Court to the credit of the respective Defendants.

19.  In such circumstances, I am prepared to grant an order for sale of the Lot.

V. Disposition

20.  I will grant an order for sale of the Lot in terms of §1 of the OS.

21.  The Plaintiff’s costs of these proceedings is summarily assessed at HK$280,000, to be paid out from the proceeds of sale of the Lot as set out in §1(d)(vi) of the OS.

22.  There be liberty to apply including without limitation for directions on the terms and manner of the sale of the Lot.