CHAN CHING KIT KATHERINE v. LAM SIK SHI

HCMP 2239/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2239 OF 2000

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J U D G M E N T

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1. This is an application by the plaintiff by way of an originating summons to enforce a charging order absolute, which was obtained on 12 October 1998 in respect of the 1st defendant's half share in a property known as Ground Floor, 4 Sharp Street East, Causeway Bay, Hong Kong ("the Property"). The Property is held by the 1st and 2nd defendants as tenants in common in equal shares. The plaintiff seeks an order for sale, not of the 1st defendant's half share in the Property, but of the entire Property.

2. Under section 20A(1) of the High Court Ordinance, Cap. 4, charging orders may be made on the beneficial interest of a joint tenant or a tenant in common in a property. Such charging orders are enforceable by an order of sale under Order 50 rule 9A and Order 88 rule 5A of the Rules of the High Court. However, a sale of the charged beneficial interest of a co-owner is often not practicable and is rarely ordered by the court (See Hong Kong Civil Procedure 2002, Vol. 1, para. 88/5A/3). It was contended by Miss Jennifer Tsui on behalf of the plaintiff that she could seek an order for sale of the entire Property under the Partition Ordinance, Cap. 352. Miss Annie Lai and Mr. Tommy Lo, who appeared for the 1st and 2nd defendants, submitted that the plaintiff, whose right is merely that of an equitable chargee by virtue of the charging order, has no locus to seek an order for sale of the Property under Cap. 352. There is no decided authority directly on this point.

3. Before I deal with the eligibility of the plaintiff to seek relief under Cap. 352, I set out the background matters leading to the application, which are not in dispute.

Background matters

4. The 1st defendant and the plaintiff were husband and wife. They were divorced pursuant to a decree absolute pronounced on 6 February 1996. The 2nd defendant is the half brother of the 1st defendant. The Property was registered in the names of the defendants as tenants in common by an assignment dated 20 August 1969. The defendants' father, who passed away in 1983, had provided the purchase money and put the Property in the joint names of his sons.

5. The plaintiff applied for ancillary relief against the 1st defendant in the matrimonial proceedings and an order was made on 8 December 1997 ("the 1st Order") in which the 1st defendant was to make a lump sum payment of HK$12 million to the plaintiff within three months of that order. The 1st defendant did not make payment and he lodged an appeal against the 1st Order. On 20 April 1998, he reached a compromise with the plaintiff and this was embodied in an order of the court made by consent on that date ("the 2nd Order").

6. By the 2nd Order, the 1st defendant gave an undertaking he would take no further steps to appeal or apply to vary or stay the execution of the 1st Order, the plaintiff gave a cross undertaking to vacate the registration of her notice of application for ancillary relief against various properties to facilitate the 1st defendant raising money for payment of the lump sum. It was ordered that the 1st defendant was to pay the plaintiff HK$10 million by three instalments: HK$3 million on the date of the 2nd Order, receipt of which was acknowledged; HK$2.5 million on or before 15 May 1998 or upon receipt of the sum raised by the sale of the 1st defendant's property in Australia, whichever was the earlier; and the balance being HK$4.5 million on or before 31 December 1998. It was further ordered that if the 1st defendant should default in payment of any of the instalments or part thereof on the due dates as aforesaid, or the payment of taxed costs of and incidental to the matrimonial proceedings within 28 days after taxation or as agreed by the parties, the lump sum of HK$12 million as ordered in the 1st Order or the unpaid balance together with interest should become immediately due and owing and the plaintiff should be entitled to enforce the full payment of the same forthwith.

7. The 1st defendant failed to make payment of the second instalment on the due date. On 15 July 1998, the plaintiff obtained a charging order nisi over the 1st defendant's half share in the Property, as well as two other properties wholly owned by the 1st defendant, to secure a sum of HK$9 million being the unpaid balance due under the 1st Order, as the plaintiff was entitled to do upon default in payment of any instalment under the 2nd Order. The charging order was made absolute on 12 October 1998 and it is this charging order that the plaintiff is seeking to enforce in these fresh proceedings.

8. On 24 November 1998, an order was made in the matrimonial proceedings by which the 1st defendant was ordered to pay to the plaintiff's solicitors forthwith HK$800,000.00, being the balance of the proceeds of sale of one of his properties in Australia, in further payment of the unpaid balance of the lump sum under the 1st Order. This was complied with by the 1st defendant by three payments made on 8 December 1998, 9 April 1999 and 24 April 1999 respectively.

9. Save for the payments made in the total sum of HK$3.8 million, the 1st defendant has failed to make any further payment towards the lump sum of HK$12 million as provided in the 1st Order. He owes the plaintiff the principal sum of HK$8.2 million. Interest on the unpaid balance, calculated at the prevailing judgment rates from 9 February 1998 up to 9 May 2002, the day of this hearing, amounted to HK$4,155,903.33. Thus the total amount due to the plaintiff is HK$12,355,903.33, excluding the plaintiff's costs in the matrimonial proceedings.

10. Apart from the charging order, there is no other incumbrance over the Property. The Property has been let to successive tenants as shop premises. The lease of the present tenant is for a term of two years from 1 March 2001, at a monthly rental of HK$93,000.00. According to a valuation report obtained by the plaintiff dated 14 November 2001, the open market value of the Property subject to tenancy at the date of the report was HK$11 million. On the basis of a forced sale subject to tenancy, the value would be HK$8.5 million. This valuation is not challenged by the defendants.

11. This originating summons was issued on 5 May 2000. On 21 August 2000, the 1st defendant issued a summons in the matrimonial proceedings seeking to vary or reduce the payment under the 1st and/or 2nd Orders, and to set aside the charging order absolute made on 12 October 1998, by reason of material changes in his financial circumstances. In short, the 1st defendant stated that the 1st Order was made on the basis of a finding that he owned assets, which were made up largely of landed properties, in the region of HK$25 million. This was based on a valuation of his assets before the Asian economic crisis. Due to the drastic drop in property prices in Hong Kong since then, he claimed that he is no longer able to raise money to pay the balance under the 1st Order. There was a hearing of that summons in the Family Court on 24 August 2001 and it was adjourned to a date to be fixed. To date, no steps have been taken to restore that summons for hearing.

12. I would first deal with the question of the plaintiff's eligibility to seek relief under Cap. 352.

The provisions of the Partition Ordinance

13. The Partition Ordinance was enacted in 1969. The long title of the Ordinance provided that it is "to amend the law relating to the partition and sale of property in land under co-ownership". I set out below the material provisions in full:

"2. Power to order partition or sale of property in land

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.

3. Institution of proceedings and parties thereto

(1) 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.

(2) In any proceedings under this Ordinance the Director [of Lands] shall be served with such documents relating to the proceedings as may be prescribed by the Partition Rules.

(3) Subject to subsection (2), proceedings under this Ordinance may be instituted against one or more of the persons interested without serving the other or others, and no defendant may object for want of parties.

(4) At the hearing of the proceedings the Court may direct such inquiries as to the nature of the property, the persons interested therein and such other matters as it thinks necessary or proper, and it may add any person as a party whose presence before the Court is considered desirable; and where a person is added as a party by the Court under this subsection, the person having the conduct of the proceedings shall serve notice of the addition on the Director.

(5) Subject to subsections (6) and (7), the Director and every other person interested in any manner shall be served with notice of the judgment or order of the Court, and the provisions of the Rules of the High Court (Cap. 4 sub. leg. O. 44 r. 3) dealing with service of notice of judgment shall thereupon apply.

(6) Where it appears to the Court that notice in accordance with subsection (5) cannot be served or cannot be served without expense disproportionate to the value of the property, the Court may, if it thinks fit, by order -

(a) dispense with such service on any person or class of persons mentioned in the order;

(b) direct notices to be published at such time and in such manner as it thinks fit, calling upon all persons claiming to be interested in the property and who have not been served, to establish their claims before the Court within a time specified in the notice,

and after expiration of the time specified, all persons claiming to be interested shall be bound by the proceedings as if they had been served in accordance with subsection (5).

(7) Subsection (6) shall not apply to service on the Director. (Italics added)

4. Partition of property in land

(1) In any proceedings instituted under this Ordinance the Court may, subject to subsection (2), make an order for the partition of property in land in any of the following ways -

(a) into parcels held by single owners in severalty;

(b) into parcels held by 2 or more owners as joint tenants;

(c) into parcels held by 2 or more owners as tenants in common,

and may partition the property in all those ways or in any combination of them and give all necessary or proper consequential directions.

(2) Where there is a building on any land, the Court shall not partition the property in that land so that part only of a building stands on any parcel into which the property in the land is partitioned unless that part of the building is self-contained and is not connected to the remainder of the building otherwise than by a party-wall or a mutual staircase, or both.

(3) No order for partition shall prejudice any person other than a party to the proceedings.

6. Sale of land

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

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

(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.

(2) The Court may exercise its powers under subsection (1), notwithstanding the dissent or disability of any person interested.

(3)	(a) Without prejudice to subsection (1), if any person interested in the property applies to the Court to make an order for the sale of the property instead of an order for partition, then, unless the other persons interested undertake to purchase the interest of the party applying for an order for sale, the Court may, if it thinks fit, make an order for the sale of the property.
	(b) If an undertaking is given by the other persons interested, the Court may order a valuation of the interest of the person applying for an order for sale in such manner as it thinks fit.

(4) On making an order under subsection (1) or subsection (3), the Court may direct a distribution of the proceeds of the sale and give all other necessary or proper consequential directions.

(5) On a sale under this section the Court may allow any of the persons interested in the property to bid at the sale, on such terms as the Court deems reasonable as to -

(a) non-payment of deposit; or

(b) setting off or accounting for the purchase money or any part thereof instead of paying the same; or

(c) as to any other matters. (Italics added)

7. Application of proceeds of sale

(1) The proceeds of a sale of property under an order under section 6 may, after deduction of the expenses thereof, be paid to trustees appointed by the Court.

(2) Trustees appointed under subsection (1) shall apply the proceeds of sale paid to them in the following order -

(a) in the discharge of any liability due to the Government in respect of the property; and then

(b) in the discharge of any incumbrance affecting the property directed to be sold; and then

(c) in payment of the residue to the persons interested."

14. On behalf of the plaintiff, Miss Tsui submitted that the words which I have italicised in section 3(1), "any person interested in such property may institute proceedings", are wide enough to include a person who has obtained a charging order over the interest of a co-owner in a property. As a matter of language, that would appear to be the case. Under section 20B(3) of the High Court Ordinance, Cap. 4, it is provided that "subject to the provisions of [Cap. 4], a charge imposed by a charging order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand." An equitable chargee is certainly a person interested in the property, but is it the legislative intent that he should be entitled to apply for partition or sale under Cap. 352?

15. On behalf of the defendants, Miss Lai and Mr Lo submitted that the relevant words in section 3(1) should not be construed without regard to the overall intention of the statute and in particular the historical context of the law of partition leading to the enactment of Cap. 352 and the enacting history of the Ordinance.

An informed interpretation

16. To interpret a statute, the duty of the court is to arrive at its legal meaning, which is not necessarily the same as its grammatical meaning. The approach Miss Tsui has asked me to adopt in arriving at the legal meaning is first to look at the wording to ascertain the literal meaning. She submitted that the literal meaning of the words "any person interested in such property" in section 3(1) of Cap. 352 should be clear and that these words are not grammatically capable of more than one meaning. She also pointed to section 2, which provides that the court may exercise certain powers as stipulated and that the expression "as joint tenants or as tenants in common" is used. It was argued that if the legislature had meant to confine those eligible to apply under Cap. 352 to joint tenants or tenants in common, the expression in section 2 could have been used in section 3(1). As this was not done, and instead it was provided in section 3(1) that "any person interested in such property" may institute proceedings under Cap. 352, there is no reason why these words should not be given their plain meaning or be read in the restricted sense as submitted by the defendants.

17. Mr Lo submitted that the proper approach in interpreting a statute is a two-stage process. Firstly, it must be decided, on an informed basis, whether or not there is a real doubt about the legal meaning of the statute. If there is, the interpreter moves on to the second stage of resolving the doubt by applying the "interpretative criteria", namely, the rules, principles, presumptions and canons which govern statutory interpretation (see Bennion on Statutory Interpretation, 3rd ed., p. 454; Halsbury's Laws of England, 4th ed. Reissue, Vol. 44(1), para. 1374). Similarly, in applying the plain meaning rule, the court must be satisfied that the enactment under inquiry is grammatically capable of one meaning only, and, on an informed interpretation of that enactment, the interpretative criteria raise no real doubt as to whether that grammatical meaning is the one intended by the legislature, for the legal meaning of the enactment to be taken to correspond to that grammatical meaning (see Bennion, op. cit., p. 425-6; Halsbury, op. cit., para. 1391).

18. By the informed interpretation rule at common law, it is to be inferred that the legislature, when settling the wording of the enactment, intended it to be given a fully informed, rather than a purely literal interpretation. Accordingly, the court does not decide whether or not any real doubt exists as to the meaning of an enactment until it has "first discerned and considered, in the light of the guides to legislative intention, the context of the enactment, including all such matters as may illumine the text and make clear the meaning intended by the legislator in the factual situation of the instant case" (see Bennion, op. cit., p. 449). Among other things, the informed interpretation rule requires that when construing an enactment as it applies to the facts of the instant case, attention should be paid to any relevant aspects of the state of the law before the statute was passed (the pre-enacting history), the history of the enacting of the statute (the enacting history) and the events subsequent to the passing of the statute (the post-enacting history) (see Bennion, op. cit., p. 458; Halsbury, op. cit., para. 1414).

19. In my judgment, in interpreting the relevant words in section 3(1) of Cap. 352, the informed interpretation rule should be followed. I do not agree with Miss Tsui that the relevant words are so clear and unambiguous in that they admit of only one meaning so that the court would need go no further but merely to adopt the grammatical meaning as the legal meaning. I am inclined to agree with Mr Lo that the expression "interested in" in section 3(1) is a broad term, which, in its application to the factual situation in the present case, is vague and necessarily ambiguous as the term "interest" has both an ordinary meaning and a technical meaning in real property law. In this situation, to determine which meaning the term was intended to have in section 3(1), the informed interpretation rule should be used and it would be of assistance to seek guidance from the pre-enacting history and the enacting history.

The pre-enacting history

20. As stated by Trainor J in Pun Jong Sau v. Poon Wing Kong [1977-1979] HKC 210 at 219H to I,

"... the key to the interpretation of the [Partition] Ordinance is to be found in the preamble. It did not repeal the law then existing, and when s. 2 commences 'Subject to this Ordinance' it means that the existing law is to be interpreted in conjunction with the Ordinance, but where there is a difference the law previously existing is amended to the extent set out in the legislation, e.g. partition is no longer the only and compellable remedy."

21. The issue before Trainor J was whether the plaintiffs, who were co-owners of the property, were entitled to an order for sale, subject to the discretion of the court, or whether an order for sale could only be made as an alternative to partition when partition was physically feasible or practicable. To resolve this question, Trainor J looked at the development of the right of co-owners to partition from the early law to later legislation to ascertain the philosophy behind the development in the law. He resolved the question in favour of the plaintiffs.

22. A comprehensive account of the history of the law of partition was given by Trainor J in Pun Jong Sau, which I gratefully adopt as follows.

23. Originally, partition was a matter of common law and only available to coparceners. Coparcenary arose where two or more persons took hereditaments by the same title by descent. Coparcenars constituted but one heir to their ancestor, they had a joint seisin, and equal rights in the land as regards each other (See Halsbury's Laws of England, 4th ed. Reissue, Vol. 39(2), para. 224).

24. By Act 31 Henry VIII c.1, 1539, the right to partition was extended to joint tenants and tenants in common in freehold estates of inheritance. By Act 32 Henry VIII c. 32, 1540, the right was further extended to joint tenants and tenants in common for term of life or years, but the Act provided that partition would not be ordered if it was prejudicial to persons who were not parties to the proceedings. By these Acts, a statutory right was conferred on those eligible to apply to insist upon a partition, and the court had no discretion to refuse such relief.

25. Prior to 1969, the two Partition Acts of Henry VIII had applied to Hong Kong by the Application of English Law Ordinance. Thus, the position in Hong Kong before Cap. 352 was enacted was the same as in England before the enactment of the Partition Act 1868. Before 1969, the persons who would be entitled to apply for partition in Hong Kong were joint tenants or tenants in common or a legal mortgagee of a tenant in common who can sue for possession and foreclosure of the mortgaged property. For the last mentioned category of eligible applicant, see for example Success Road Finance Ltd. v. Mak Kon Sang & Anr., Civ. App. No. 68 of 1999, 1 April 1999, per Godfrey J A.

The enacting history

26. Cap. 352 was enacted to give effect to paragraph 5 of the Fifth Report of the Hong Kong Law Reform Committee, see the Explanatory Memorandum to the Partition Bill 1969. The Ordinance was modelled substantially on the 1868 Act and the Partition Act 1876. With the enactment of this legislation, the Schedule to the Application of English Law Ordinance was amended by repealing the 1539 and 1540 Acts. The 1868 Act had liberalised the law by giving the court power to order a sale of the property in lieu of partition, if the court should consider it more beneficial to the parties. Thus, an applicant in a suit for partition could no longer insist on the statutory right of a partition, however inconvenient this might be. It was recommended by the Law Reform Committee that the courts in Hong Kong should have similar wide discretionary powers to order a sale in lieu of partition. There was one notable difference between the Partition Acts of 1868 and 1876 and the local legislation, as it was recommended by the Law Reform Committee that since co-tenancies in Hong Kong are comparatively more numerous and in many cases more complex, the courts should not be obliged to grant either a partition or an order for sale, as was the position under the Partition Acts, but should have the discretion to refuse to grant either a partition or an order for sale in lieu.

27. The recommendation of the Law Reform Committee was to enact legislation in three aspects. The legislation was to confer upon the courts -

"(a) a discretion, in proceedings for partition, to grant either a partition or a sale in lieu (whether requested or not) or to refuse both;

(b) a wide discretion as to the joinder of parties in any such proceedings; and

(c) powers, similar to those in section 49 of the Trustee Ordinance, Chaper 29, to make vesting orders consequential upon judgments for a partition or a sale in lieu."

28. It was stated in the Explanatory Memorandum to the bill that clause 3(1) of the bill (this became section 3(1) of the Ordinance), which deals with the institution of proceedings under the Ordinance, is based on section 7 of the Partition Act 1876. Clauses 3(3) to (5) of the bill (they became sections 3(3) to (5) of the Ordinance), which deals with joinder of parties, are based on section 9 of the Partition Act 1868. Clause 6 (this became section 6 of the Ordinance), which makes detailed provision for the sale of land, is based on sections 3, 5 and 6 of the 1868 Act.

29. Section 7 of the 1876 Act, on which section 3(1) of the Ordinance is based, was in these terms:

"For the purposes of the Partition Act, 1868, and of this act, an action for partition shall include an action for sale and distribution of the proceeds, and in an action for partition, it shall be sufficient to claim a sale and distribution of the proceeds, and it shall not be necessary to claim a partition."

30. Section 9 of the 1868 Act provided, inter alia, as follows:

"Any person who, if this act had not been passed, might have maintained a suit for paritition may maintain such suit against any one or more of the parties interested, without serving the other or others (if any) of those parties; and it shall not be competent to any defendant in the suit to object for want of parties; ..." (Italics added)

31. Thus, it would appear from the report of the Law Reform Committee and the Explanatory Memorandum to the bill that it was not contemplated that the existing law was to be changed in that those eligible to apply for relief under the Ordinance should be widened. Section 7 of the 1876 Act was not a provision to broaden the category of persons eligible to seek relief. The provision for joinder of parties in section 9 of the 1868 Act did not have this effect either.

32. Trainor J in Pun Jong Sau was not concerned with the question of persons eligible to seek relief under the Ordinance but in construing the provisions with regard to the issue before him which I have set out earlier, he had this to say at 219I to 220A:

"... when s 3 was enacted and stated that persons interested in property as set out in s 2 might apply either for partition or sale it meant such persons as were eligible to apply under the law; any person who was theretofore eligible to invoke the assistance of the law pertaining to the termination of a co-ownership might apply for partition or sale, and the court in its discretion might make an order or refuse to make an order in exercise of the powers conferred by s 2."

33. This statement, although obiter, seems to me to have correctly summarised the position on an informed interpretation of the statute. In my judgment, on an informed basis, there is a real doubt whether the grammatical meaning of the relevant words in section 3(1) is the legal meaning intended by the legislature. I go on to the next step to resolve that doubt by applying various interpretative criteria.

Statute in pari materia

34. It was submitted by Miss Tsui that in construing section 3(1) in Cap. 352, it would be appropriate to have regard how a similar expression in section 30(1) of the Law of Property Act 1925 was construed in the case of Midland Bank plc v. Pike [1988] 2 All ER 434 as the two statutes could be said to be in pari materia.

35. Section 30(1) of the Law of Property Act 1925 (which was repealed and replaced by the Trusts of Land and Appointment of Trustees Act 1996, section 14) was concerned with land held on trust for sale. This section provided that if the trustees for sale refuse to sell or any requisite consent to the exercise of their powers cannot be obtained, "any person interested" may apply to court for a vesting order or other order giving effect to the proposed transaction or an order directing the trustees to give effect to the trust for sale. It was held in the Midland Bank case that as the bank had obtained a charging order and was an equitable chargee, the bank was a person interested in some proprietary right under the trust for sale, and that this proprietary interest is sufficient to make it a "person interested" for the purposes of section 30 of the Law of Property Act, following the earlier decision of Stevens v. Hutchinson [1953] Ch. 299. The Midland Bank case is cited in Halsbury's Laws of England, 4th ed. Reissue, Vol. 32, para. 819 as authority for the proposition that an equitable chargee of the share of a co-owner of land subject to statutory trust for sale may apply to court for an order of sale of the whole property.

36. The Partition Acts were repealed in England by the Law of Property Act 1925 when the partition of land held in co-ownership was abolished. By section 34 of the 1925 Act, land held by co-owners is subject to a statutory trust for sale and the interest of each co-owner in the land is automatically converted into an interest in the proceeds of sale in respect of that land. Unlike the position in Hong Kong, until the law was amended by the Charging Orders Act 1979, it was the position in England that the interest of a co-owner could not be charged by the imposition of a charging order under section 35(1) of the Administration of Justice Act 1956, because the interest of a beneficiary under a trust for sale of land did not constitute "land" or an "interest in land" for the purpose of the 1956 Act.

37. It does not seem to me that a proprietary interest in the proceeds of sale of land should be equated with an interest of a proprietary nature in land. I do not think section 30(1) of the 1925 Act could be regarded as in pari materia with section 3(1) of Cap. 352. It would not be appropriate to adopt the construction of section 30(1) of the 1925 Act in interpreting section 3(1) of Cap. 352.

38. In the present case, it is important to bear in mind the characteristics of an equitable charge in land. This is a form of security whereby property is appropriated for the discharge of a debt or other obligation, "but which does not pass either an absolute or a special property in the subject of the security to the creditor, nor any right to possession. In the event of non-payment of the debt, the creditor's right of realisation is by judicial process" (see Fisher & Lightwood's Law of Mortgage, 11th ed., p. 25). An equitable chargee in land does not have a right to foreclosure (Tennant v. Trenchard (1869) 4 Ch. App. 537 at 542). Under the Partition Acts until they were repealed in 1925, it was not the law that an equitable chargee of a co-owner with no right to possession and foreclosure could apply for partition or sale.

Presumption against casual change in the law

39. On behalf of the defendants, it was submitted by Miss Lai and Mr Lo that I should apply the principle of legal policy that law should be altered deliberately rather than casually, and that the legislature should not be taken as intending to change either common law or statute law otherwise than by measured and considered provisions. Hence, where the legal meaning of an enactment is doubtful, it will be presumed, other things being equal, that it was intended to effect the least alteration of the existing law. In the case of common law, or Acts embodying common law, the principle is somewhat stronger than in other cases. It is also stronger the more fundamental the change is (see Bennion, op. cit., p. 626; Halsbury's Laws of England, 4th ed. Reissue, Vol. 44(1), para. 1436).

40. I accept the defendants' submission that this principle is apt to be applied here and that it would seem improbable that an important change broadening the class of persons eligible to apply for partition or sale should be introduced into the Ordinance in such a casual manner, particularly in view of the enacting history.

Use of Hansard

41. Both Mr Lo and Miss Tsui have referred me to the Hong Kong Hansard concerning the debate on the second reading of the Partition (Amendment) Bill 1978. One of the provisions introduced in that bill was to amend section 3(1) of the Ordinance. The purpose of this amendment, in the words of the Solicitor General, was to "make it clear that only a joint tenant, a tenant in common or a legal mortgagee of a tenant in common may institute proceedings under the Ordinance." At the resumption of the debate, a legislator reported to the Legislative Council that he was of the opinion that section 3(1) "is quite adequate for the purpose for which it is intended" and that after consultation, the Government had agreed not to amend section 3(1). The Solicitor General confirmed that section 3(1) would not be amended and stated that "if there should be a dispute it will be for the courts to determine who is a 'person interested' for the purposes of the section". In the end, section 3(1) was not amended.

42. It was submitted by Miss Tsui that the Hansard material would have removed any ambiguity and demonstrated clearly that "person interested" in section 3(1) is not confined to co-owners but that the legislature had envisaged a wider class of persons. I am unable to see how that could be the effect of the Mansard material. The use of Hansard as an aid to construction is subject to a number of requirements set out in Pepper v. Hart [1993] AC 593, the statement must be made by the promoter of the bill, it must disclose the mischief aimed at by the enactment or the legislative intent underlying its words, and above all it must be a clear and unequivocal statement in favour of the interpretation contended for.

43. It does not appear from what I have summarised in the debate that there was a clear and unequivocal statement of the legal meaning of section 3(1) in favour of the interpretation contended for by the plaintiff or that contended for by the defendants. It would not be right to use the Hansard material as an aid to interpretation in these circumstances.

Eligibility of the plaintiff to seek relief

44. For the reasons I have given, I am inclined to favour the interpretation of the defendants that the relevant words in section 3(1) should not be given a grammatical meaning. I rule in favour of the defendants that the legal meaning does not correspond to the grammatical meaning and that the words "person interested" do not include an equitable chargee of a co-owner without any right to possession or foreclosure. The plaintiff is not eligible to apply for an order for sale of the entire Property under the Ordinance.

Discretion of the court in granting relief

45. As I have ruled against the plaintiff on her locus standi to seek relief under the Ordinance, the question whether the court should exercise its discretion to order a sale under the Ordinance does not arise. However, as I have heard arguments on this, I would give my views briefly.

46. The 1st and 2nd defendants have each put forward a number of economic reasons why a sale of the Property should not be ordered, some of them are in common. Firstly, a forced sale would fetch a lower price of about HK$3 million less, according to the valuation reports of the plaintiff's surveyor. Secondly, to order a sale when the lease of the existing tenant has not yet expired would fetch a lower price as compared to a sale with vacant possession. Thirdly, the property market is depressed at the moment and this is not an opportune time to sell. It does not appear to me that any of these reasons are sufficient to outweigh the consideration that the plaintiff should not be deprived of the fruit of litigation in that she has obtained a charging order to enforce a judgment debt.

47. It was contended by the defendants that the plaintiff could have enforced the judgment debt by other means in that she has obtained charging orders against other properties of the 1st defendant, being two parking spaces in Comfort Terrace, and two shops in Aroma Court, Tin Hau Temple Road. The parking spaces are not encumbered and proceedings for an order of sale have been started. However, they are expected to fetch only about HK$360,000.00 in all. As for the two shops, they are subject to mortgage and the extent of the indebtedness is unknown. The plaintiff has also brought proceedings for an order of sale of the two shops, the expected reserved price of which is in the total sum of HK$3.9 million. Thus, even if the plaintiff could have successfully enforced the charging orders she has obtained in respect of these other properties of the 1st defendant, the proceeds she might be able to realise would not have been sufficient to cover the outstanding judgment debt in the region of HK$12 million.

48. It was also contended that the 1st defendant has applied to vary or reduce the payment under the 1st and/or 2nd Orders and to set aside the charging orders over his properties by reason of material changes in his financial circumstances, and that could be a factor to be taken into account here. That application has yet to be decided by the Family Court as the 1st defendant has not sought to restore his summons for hearing. The defendants have not addressed the question whether the court would have jurisdiction to vary or reduce a lump sum order, in view of section 11(2) of the Matrimonial Proceedings and Property Ordinance, Cap. 192. I do not think that application is a matter I ought to take into account.

49. Similarly, I do not think I can attach any weight or significance to the fact that the 2nd defendant has commenced an action against the 1st defendant and the plaintiff in November 2001 seeking damages on the allegation that they have intermeddled with the estate of the father of the defendants.

50. As for the 2nd defendant's alleged sentimental attachment to the Property, it is not a factor that I would take into account at all.

51. I would have exercised my discretion to order a sale of the Property if I had been of the view that the plaintiff is eligible to seek relief under Cap. 352.

Alternative relief

52. In the Notice of orders and directions sought filed by the plaintiff on 24 April 2002, the plaintiff seeks an alternative order in paragraph 9 that if no order for sale be made, a fit and proper person to be nominated by the plaintiff or the court may be appointed as a receiver to receive the 1st defendant's share in the rental income and/or profits of the Property receivable from the date of the order. Appointment of receiver by way of equitable execution is provided for in Order 51 of the Rules of the High Court.

53. The 1st defendant is opposed to this application. He contended that he needs his share of the rent to finance the education of his daughter abroad and to maintain his living expenses.

54. I am satisfied that it is "just or convenient" to appoint a receiver in this instance as there is impediment to ordinary execution. On the precise terms of the order to be made in this respect, I would direct the plaintiff's solicitors to submit a draft order to the other parties and to the court, with such changes as may be appropriate to Form No. 84 in Appendix A to the Rules of the High Court, and I give liberty to apply on the wording of the order appointing a receiver by way of equitable execution.

Orders

55. The orders I make on this application are as follows. I dismiss the plaintiff's application for an order for sale of the Property under the Partition Ordinance. I make an order appointing a receiver by way of equitable execution to receive the 1st defendant's share of the rents and profits in respect of the Property, the precise terms of which are to be finalised upon the draft to be submitted by the plaintiff.

56. As for costs, I make an order nisi that the plaintiff should pay 75% of the 2nd defendant's costs of this application, as the 2nd defendant has succeeded on the question of jurisdiction to grant relief, which was the most important issue to be determined and took up most of the time for the hearing, but not on the question of discretion which was argued and in respect of which evidence was filed. As between the plaintiff and the 1st defendant, I make an order nisi that the plaintiff should pay half of the costs of the 1st defendant, as the 1st defendant has not succeeded on the question of discretion to order a sale and on the appointment of a receiver.