BANK OF CHINA (HONG KONG) LTD v. FINE CHINA CAPITAL INVESTMENT LTD

HCMP 2581/2025

[2026] HKCFI 1199

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2581 OF 2025

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BETWEEN

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REASONS FOR DECISION

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1.  This is an application by way of Originating Summons issued by the Plaintiff on 30 December 2025 to vacate the registration of the sealed copy of the Writ of Summons dated 27 July 2023 (“Writ”) in HCA 1173/2023 (“Action”) as a lis pendens in the Land Registry under memorial number 23072802260016 against the property known as 11^th Floor and Car Parking Spaces Nos P24, P25, P27 and P28 on 3^rd Floor, Rykadan Capital Tower, No 135 Hoi Bun Road, Kowloon (“Property”) pursuant to section 19 of the Land Registration Ordinance (Cap 128) (“Ordinance”).

2.  I am satisfied that the Plaintiff has duly served the Court papers on the Defendant at its registered office. The Defendant has not filed any Acknowledgment of Service or appeared at the hearing. I therefore proceeded in its absence.

3.  By an Assignment dated 23 May 2017, Perpetual Wealth (Hong Kong) Limited (“Mortgagor”) became the sole owner of the Property.

4.  By a Mortgage dated 23 May 2017 and a Second Legal Charge dated 18 September 2017 between the Plaintiff as mortgagee and the Mortgagor, the Plaintiff granted the Mortgagor an all moneys mortgage loan (“Mortgage Loan”) with the Property as security.

5.  On 27 July 2023, the Defendant through Messrs C&Y Lawyers (“C&Y”) issued the Writ in the Action. On 28 July 2023, the Writ was registered in the Land Registry as a lis pendens against the Property. The Defendant was the plaintiff in the Action, and the Mortgagor was one of the defendants. Under the Writ, the Defendant sought, inter alia, a declaration that the Mortgagor held the Property as trustee on trust for the benefit of the Defendant, and an order for the delivery up or transfer of the Property to the Defendant.

6.  The Mortgagor and other obligors of the Mortgage Loan defaulted in repayment. The Plaintiff commenced a mortgagee action under HCMP 680/2024 on 23 April 2024 and claimed against the Mortgagor and other obligors for, inter alia, the outstanding Mortgage Loan and for possession of the Property. Judgment was obtained by the Plaintiff against the Mortgagor and other obligors on 30 May 2025 (later amended on 10 July 2025). Under the Judgment, the Mortgagor was ordered, inter alia, to deliver vacant possession of the Property to the Plaintiff.

7.  On 7 August 2025, the Plaintiff issued a Writ of Possession and Fieri Facias against the Property. On 9 October 2025, the Plaintiff obtained vacant possession of the Property.

8.  Based on the latest land search records of the Property, no subsequent Judgment or Court Order was registered against the Property as of today.

9.  On 14 November 2025, the Plaintiff through its solicitors enquired with C&Y about the status of the Action and requested the Defendant to vacate the registration of the Writ in the Land Registry against the Property. A chaser letter was issued on 25 November 2025. There was no reply from the Defendant or C&Y.

10.  On 21 January 2026, the Plaintiff’s solicitors notified C&Y that the Plaintiff had commenced the present proceedings with the hearing of the Originating Summons fixed on 12 February 2026, enquired whether C&Y had instructions to accept service and attend the hearing on behalf of the Defendant, and provided a sealed copy of the Originating Summons. C&Y replied on 27 January 2026 that they had no instructions to represent the Defendant or accept service on its behalf, and they returned the sealed copy of the Originating Summons to the Plaintiff’s solicitors.

11.  Under section 19 of the Ordinance, the Court may make an Order for the vacating of the registration of a lis pendens in the Land Registry without the consent of the party who registered it: (1) if the Court is satisfied that the litigation is not prosecuted bona fide; or (2) for other good cause shown.

12.  The registration of a lis pendens secures a right of priority to the registering party and has the effect of a judgment so registered against the land. It is a most valuable right. Correspondingly the owner’s land is encumbered. In effect the owner would be unable to sell or mortgage the property. In an application by the owner to vacate a lis pendens on the grounds of dilatoriness in the prosecution of the action, the interests of both the registering party and the owner must be considered: Tahir v Cheung Wai Bun Charles [1980] HKC 370 at 375C-D.

13.  Whilst delay in the prosecution of an action is not, in itself, equivalent to lack of bona fides, a long delay which is unexplained can sometimes provide a foundation for an inference of bad faith: Tahir at 375I-376A; Ho Yau-kong v Ho Cheng Kwai-ying [1991] HKLR 649 at 651I. The Court must guard against allowing the registering party to “sit back with self-satisfaction as if to say what is the hurry after all I have a security on what I am after”: Tahir at 375D-E. Such conduct plainly abuses the system of registration of a lis pendens in the Land Registry.

14.  In the present case, the Action was commenced on 27 July 2023. There is no evidence of any progress in the Action since then. Such delay of 3 years would provide a foundation for an inference of bad faith on the part of the Defendant in prosecuting the Action.

15.  In addition, I am also satisfied that the registration of the Writ should be vacated “for other good cause shown”.

16.  What constitutes good cause depends on all the circumstances of the case, primarily the respective positions and consequences of the registered lis pendens being removed or otherwise. The Court has to consider factors for and against vacation, balancing the protection afforded by the registration, and the harm which might be caused if the registration was maintained. The Court adopts a balance of justice approach and looks for a course which will carry the lower risk of injustice: Hundred Gain International Holding Ltd v Cheng Mei Holdings Ltd [2023] 5 HKLRD 528 at [71]-[73].

17.  The Plaintiff is in the process of marketing the Property for sale to recoup the Mortgage Loan. The registration of the Writ would have a profound impact on the Plaintiff’s ability to give good title of the Property to the potential purchasers. This outweighs any prejudice to the Defendant which has not diligently prosecuted the Action or defended the present proceedings.

18.  For the above reasons, at the conclusion of the hearing on 12 February 2026, I made an Order in terms of paragraphs 1 and 2 of the Originating Summons, ordering the vacation of the registration of the Writ in the Land Registry, and awarding costs of the action to the Plaintiff summarily assessed at HK$100,000.