RE TANG HOI CHUN

DCMP 4512/2023

[2024] HKDC 143

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 4512 OF 2023

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REASONS FOR DECISION

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1.  On 26 September 2023 Tang Hoi Chun (“Tang”), being the registered owner of property registered in the Land Registry as Flat C on 10/F of Block 11, Grand Del Sol, 100 Fung Cheung Road, Yuen Long, New Territories (being 107/278657^th parts or shares of and in Yuen Long Town Lot No. 495) (“the Property”), applied by ex parte originating summons (“OS”) to vacate the registration of the following charging orders that had been both granted and registered in early 2002 over the Property:

(1)  a Charging Order: Notice to Show Cause dated 12 July 2002 (“Charging Order Nisi”) registered in the Land Registry as Memorial No. YL1013715; and

(2)  a Charging Order Absolute dated 2 August 2002 (“Charging Order Absolute”) registered in the Land Registry under Memorial No. YL1016620;

(the Charging Order Nisi and Charging Order Absolute are collectively “the Charging Orders”).

2.  I now give my reasons for why, after hearing from Ms Wong, counsel for Tang, I eventually:

(1)  granted leave as sought by Tang to amend the OS to correct a minor typographical error in the name of the Property and (given the use of the ex parte form of originating summons) to describe Tang within the OS as the “applicant” instead of as the “plaintiff”; and

(2)  granted the relief sought in the OS as amended (“Amended OS”) by ordering that the registrations of the Charging Orders be vacated, and made no order as to costs.

BACKGROUND

3.  From the evidence filed on behalf of Tang, the Property was previously owned by one Mr Ng Yau Shelk (“Shelk”) and Mr Yau Tik Sunny (“Sunny”). By an agreement for sale and purchase dated 18 June 2002, both of them sold the Property to Tang for the total consideration of HK$1,700,000 (“the 2002 Agreement”), which was registered in the Land Registry by Memorial No. YL1013101 on 9 July 2002.

4.  Sunny was the defendant, and American Express Bank Limited (“AE Bank”) was the plaintiff, in DCCJ 3410/2002 (“the 2002 Proceedings”). AE Bank obtained the Charging Order Nisi against Sunny’s half-share in the Property on 12 July 2002, which was subsequent to the date of the 2002 Agreement. On 16 July 2002, the Charging Order Nisi was registered in the Land Registry as Memorial No. YL1013715.

5.  The Charging Order Nisi was made absolute on 2 August 2002. On 16 August 2002 the Charging Order Absolute was registered in the Land Registry as Memorial No. YL1016620.

6.  The sale of the Property pursuant to the 2002 Agreement was completed by an assignment dated 18 July 2002 (“Assignment”) which was registered in the Land Registry on 10 August 2002 as Memorial No. YL1016168.

7.  The Charging Orders have not been re-registered.

8.  On 26 July 2023, Tang’s solicitors wrote to AE Bank’s solicitors from the 2002 Proceedings, requesting that they enter into a consent summons to vacate the Charging Orders.

9.  Tang then entered into an agreement dated 4 August 2023 for sale and purchase of the Property (“the 2023 Agreement”), which was registered in the Land Registry on 22 August 2023 as Memorial No.23082202260054. It was Tang’s case before me that Clause 34 of the 2023 Agreement required it to vacate the Charging Orders before completion[1], which date was 22 November 2023.

10.  According to the evidence filed on Tang’s behalf, no substantive reply was received from AE Bank’s solicitors before the OS and supporting affirmation (both dated 21 September 2023) were filed on 26 September 2023.

11.  The relief sought by Tang (at the time described within the OS as the plaintiff) was that the registrations of each of the Charging Orders be vacated, and that there be no order as to costs.

12.  On 17 October 2023, Master Jo Siu granted leave to Tang to list the matter before a Judge or Master in Chambers for a call-over hearing with 30-minutes reserved, and directed that Notice of Hearing be given to all relevant parties including the parties pertinent to the Charging Order Nisi.

13.  By a letter dated 30 October 2023, the applicant’s solicitors sought to fix a date for the hearing. On 2 November 2023 the call-over hearing date was fixed for 15 November 2023.

14.  On 3 November 2023 Tang’s solicitors sent to both AE Bank and Sunny by post (and it is said also by fax, although the correspondence to Sunny that was placed before the court prima facie indicates that it was only sent by post) the Notice of Appointment to Hear the OS, as well as a summons to amend the OS in terms as mentioned above and an affirmation filed in support thereof.

15.  In response, AE Bank’s solicitors sent the Registrar and Tang’s solicitors a letter dated 9 November 2023 acknowledging they had been so served, and stating that AE Bank “has no objection to and will not make any submissions in respect of” Tang’s applications, and asked for their attendance to be excused from the hearing.

16.  On 10 November 2023 skeleton submissions were filed by Ms Wong, counsel for Tang, seeking substantive relief at the hearing on 15 November 2023.

17.  Sunny also sent a fax dated 14 November 2023, a copy of which Tang’s lawyers produced to the Court at the hearing on 15 November 2023[2], in which Sunny stated that he had “no objection to the application and have no submissions regarding the discharge and vacation of the charging order”.

18.  It was in these circumstances that I heard from Ms Wong on 15 November 2023, and for reasons explained below also at the resumed hearing on 21 November 2023.

DISCUSSION: AMENDMENTS AND SUMMARY DISPOSAL

19.  At the hearing on 15 November 2023 I was satisfied that it was in the circumstances more appropriate for me to exercise my powers to allow the amendments to the OS, and to dispose of the Amended OS summarily. This was for the following reasons.

20.  Firstly, I considered that no party would be so disadvantaged or prejudiced in substance by my allowing the limited amendments sought, or by my proceeding to hear the Amended OS. After all, the parties pertinent to the Charging Orders had been served with all relevant documentation, and had indicated that they did not oppose the applications and the relief sought in the Amended OS.

21.  Secondly, as the OS was issued as an ex parte originating summons, Tang as the issuing party should hence have been described in the OS as the applicant, and not the plaintiff: see RDC O. 7 r. 2(1) to (2) and Form No. 11, Appendix A. Given the matters set out above and the underlying objectives of the CJR, I considered that this was an appropriate situation for me to waive any irregularity/non-compliance caused by use of the ex parte form of originating summons[3], and to grant an order so amending the description: see also e.g. the approach adopted in Sham Wan Keung & anor. v Leung Suet Fan, unreported, CACV 56/1994, 29 June 1994.

22.  Thirdly, given the aforesaid circumstances and the few points of law raised in the application, I considered the objectives of the CJR would be better served by the matter being substantively dealt with at the hearing insofar as was possible, and then also at the resumed hearing (which took place as I sought further assistance from Ms Wong on additional authorities canvassed at the initial hearing), as opposed to by my merely giving directions for a later and separate substantive hearing.

DISCUSSION: THE SUBSTANTIVE RELIEF

23.  The title of the action refers to ss. 19 and 20 LRO which provide, respectively, as follows:

“19. Power to the court to order vacation of lis pendens

The court or judge before whom any property sought to be bound is in litigation, may on the determination of the lis pendens, or during the pendency thereof, where the said court or judge is satisfied that the litigation is not prosecuted bona fide, or for other good cause shown, make an order for the vacating of the registration in the Land Registry of such lis pendens without the consent of the party who registered it, and may direct the party on whose behalf the registration was made to pay all the costs and expenses occasioned by the registration or the vacating thereof, including the costs of the application to vacate, or may make such other order as to such costs or any of them as to the said court or judge may seem just.”

“20. Mode of making application to the court

The application to vacate a lis pendens under section 19 may be in a summary way by petition or motion in court or by summons in chambers, and may be made by any person interested in the property against which the lis pendens has been registered, whether such person is a party to the lis pendens or not.”

24.  However, and for the following reasons, I made the substantive orders sought in terms of a draft order (as amended) handed up to me at the resumed hearing under the inherent jurisdiction of the Court and pursuant to the effect of s. 17 LRO. That section, which was also highlighted in the applicant’s evidence and discussed in Ms Wong’s skeletons and at the hearings, provides as follows:

“17. Expiry and re-registration”

The registration of a judgment, order or lis pendens shall cease to have effect at the end of 5 years from the date of registration, but the judgment, order or lis pendens may be re-registered from time to time and, if so re-registered, shall have effect for 5 years from the date of re-registration.”

25.  Firstly, the court has inherent jurisdiction to vacate registrations, or purported registrations, in the Land Registry upon “good cause” being shown: see paragraph 5 of Re Li Fat [2009] 5 HKLRD 259, a decision of Chu J. as she was then. As is clear from the decisions cited within such as Thian’s Plastics Industrial Co. Ltd. & ors. v Tin’s Chemical Industrial Co Ltd. & anor. (No. 2) [1971] HKLR 249 (CA), and also from Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594 at paragraph 16 which relates to “instruments” in general, this jurisdiction exists apart from any statutory provisions, such as s. 19 LRO. That section and s. 20 LRO relate only to vacation of lis pendens (which, as per s. 19 LRO, can be ordered if there is “good cause shown”), and not to “judgments” as otherwise defined in s. 2(2) LRO or indeed to any other instruments.

26.  Secondly, given the matters below, it was s. 17 LRO and the court’s inherent jurisdiction which were relevant to the substantive relief sought by Tang, the applicant, namely, orders vacating the registration of the Charging Orders.

27.  I agree that prohibitory orders and charging orders are, as Ms Wong submitted, both clearly in the nature of modes of enforcement or execution of judgments: see e.g. Hung Heung Keng v Challenge Way Investment Ltd. [2007] 1 HKC 615 and Re Li Fat, supra. Not only that, but as Chung J. held at paragraphs 15 to 19 of Wong Chung Keung & anor. v Cheung Yik Tung [2018] HKCFI 2722, charging orders (citing Ocean Rich Investment Co. Ltd. v Leung Yiu Biu and Chan Po Lin, unreported, HCMP 1903/1998, 6 May 1999, W. Yeung J. (as he was then)) and prohibitory orders (citing Hung Heung Keng, supra,) are both “registered orders” which are hence similarly affected and “caught by” s. 17 LRO. Indeed and in doing so, his Lordship cited and referred without adverse comment to the portions of the judgment in Hung Heung Kung, supra, holding that a prohibitory order is an order that is “perhaps akin” to a charging order.

28.  Chung J.’s views and approach might be thought to be unsurprising given that “The [LRO] applies to charging orders as it applies to other orders or writs issued or made to enforce judgments” (s. 20B(2) High Court Ordinance (CAP. 4) and s. 52AB District Court Ordinance (CAP. 336)). It seems to me that charging orders are also “judgments” as defined in s. 2(2) LRO, as that definition “includes judgments and orders of the Court of First Instance, the District Court, and the Lands Tribunal” (emphasis added).

29.  I note also that while the judgment in Lau Wai Wing v Yip Tak Ming (葉德明), Executor of the Estate of Cheung So Lin, deceased) & anor., unreported, HCMP 1862/2012, 7 May 2014, Wilson Chan DHCJ. (as he was then) does not set out the exact nature of the orders sought, in granting relief his Lordship only cited s. 17 LRO in a context apparently similar to the present case, namely where (as discussed below) the charging order had not been re-registered and the land was hence free from its encumbrance.

30.  Conversely, there was no authority before me to clearly establish that ss. 19 and 20 LRO were or are relevant in relation to the vacation of the registration of charging orders. This is perhaps unsurprising, given that:

(1)  Those sections relate to lis pendens, which are the only instrument which the LRO expressly provides may be vacated: see the authorities in paragraph 25 above and Sihombing & Wilkinson: Hong Kong Conveyancing 1 – Law and Practice XII at §§[153], [402]; and

(2)  On a plain reading of the LRO, its drafters, and hence the legislature, seem to have considered charging orders as being distinct from lis pendens. See in particular ss. 1A, 5A LRO the latter of which provides:

“5A. Priority of registered charging orders and lites pendentes

Notwithstanding section 3 or section 5 a charging order or lis pendens which is duly registered shall have priority from the commencement of the day following the date of its registration.” (emphasis added)

A fortiori on a reading where charging orders are “orders” and “judgments” under the LRO, as regards which see Wong Chung Keung, supra, and ss. 2, 14, 17 and 18 LRO.

31.  Given the above, the approach and principles that are relevant in applications to vacate prohibitory orders should also apply in relation to applications to vacate charging orders. In deciding whether to vacate the Charging Orders, regard should hence be had to the effect of s. 17 LRO and the court’s inherent jurisdiction, rather than to ss. 19 and 20 LRO: see Re Li Fat, supra, and Lo Wang Sang (盧宏生) v Chan Kap [2021] HKCFI 623 (a decision of G. Lam J. as he was then).

32.  Thirdly, there was for the following reasons “good cause” to order that the registration of the Charging Orders be vacated:

(1)  Here, the failure to re-register the Charging Orders meant that they had long since ceased to have effect and encumber the Property, particularly in relation to the 2023 S&P Agreement: see Ocean Rich Investment, supra, as also subsequently cited and applied by Wilson Chan DHCJ. in Lau Wai Wing, supra, at paragraph 4, and by Chung J.[4] in Wong Chung Keung, supra.

(2)  Given the position of the parties pertinent to the Charging Orders (especially AE Bank), there was no conceivable issue or interest relating to re-registration that arises or that could conceivably arise. I agree with Ms Wong’s submission that the decision in Incorporated Owners of Century Centre v Bank of China (Hong Kong) Ltd. & anor. [2011] 4 HKC 439 is not relevant to the present situation.

(3)  The present circumstances are hence very similar to those in Li Fat, supra, and Lo Wang Sang, supra, in which the vacation of prohibitory orders was ordered. I see no reason to approach this case any differently.

(4)  A fortiori when, as submitted by Ms Wong, any enforcement or execution proceedings on the Charging Orders are time-barred: see Re Li Man Hoo (A Debtor) [2013] 4 HKLRD 247 (CA) particularly at paragraphs 9 to 13, 30, to 33 (as also cited and applied in paragraph 5 of Lau Wai Wing, supra).

33.  Since the above were and are sufficient for me to grant the orders sought by the applicant in the Amended OS, it was and is with no disrespect to Ms Wong’s skill and industry that I have refrained from deciding whether the relief in the Amended OS should be granted pursuant to her submissions (as based on s. 52AB District Court Ordinance and RDC O. 50 r. 7) that the Charging Orders could and should be discharged as they did not bind the Property, and as to the potential consequences thereof.

34.  Given the stances taken by Tang, AE Bank, and Sunny, I shall make no order as to costs of these proceedings.

35.  Finally, I thank Ms Wong for her assistance.