OCTOPUS CAPITAL INVESTMENT LTD v. KRISHOM HOLDING LTD

HCA 775/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 775 OF 2015

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DECISION

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1.  This is the plaintiff’s urgent application by summons for the vacation of the registration or attempted registration of a writ (“the Writ”) in HCA 671 of 2015 (“the Action”) by the defendant at the Land Registry against a property owned by the plaintiff (“the Property”).

2.  The Property has been sold by the plaintiff to a third party purchaser with extended completion date falling on this Friday, 17 April 2015.  The completion cannot take place because of the presence of the Writ at the Land Registry, and that is why the plaintiff makes this urgent application to the court.

3.  The Writ in the Action is about a dispute between the plaintiff and the defendant in relation to the decoration work done by the defendant back in 2011.  There is a dispute between the parties about the work, and hence the defendant commenced the Action to claim for the outstanding decoration fee. 

4.  It is clear that the dispute between the parties is a contractual one and it does not touch upon the land or any interest in the land.  It is also clear that the Writ, involving a dispute arising out of a personal right under a contract, is not registrable under sections 2(1) and 14 of the Land Registration Ordinance (Cap 128), and as a result the court should declare that the act of registration or attempted registration of the Writ is wrongful. 

5.  There is an issue about the proper wording of the order.  As the Writ is now placed under the section of “Deeds Pending Registration” (due to the fact that the Land Registry has doubt about the registration of the Writ), there is an issue as to what proper order should be made by the court. 

6.  In this regard, I am grateful for the submissions of Mr Li, SC, counsel for the plaintiff, referring me to the decision of Master J Wong in  Crowning Success Ltd v Brightland Corp Ltd [2008] 4 HKC 305.  There was an issue in that particular case as to whether the court has the jurisdiction to vacate the registration of a deed which is placed under the section of “Deeds Pending Registration” in the Land Registry. 

7.  The learned Master took the view that the word “registration” in the Land Registration Ordinance includes both instruments having been registered and “pending registration” with the Land Registry, and so the court has the jurisdiction to vacate the registration of a deed which is placed under the section of “Deeds Pending Registration”.

8.  I have the privilege of reading the judgment of Master J Wong and I agree with the reasoning of the learned Master. Hence, I make an order in terms of para 1 of the summons.

9.  In any event, I take the view that the Writ is clearly not registrable in the present case, and so the conduct in attempting to register the Writ is wrongful.  The court certainly has jurisdiction to make a declaration to that effect.

10.  I am of the view that such declaration is necessary so as to enable the plaintiff to complete the transaction with the intended purchaser, and so I make an order in terms of para 2 of the summons as amended. 

11.  I then come to the issue of costs.  The plaintiff asks for the costs to be paid on an indemnity basis.

12.  The dispute between parties became apparent in 2011.  However, the defendant waited for a number of years before taking action.  The timing of the commencement of the Writ tallied with the plaintiff’s attempted sale of the Property to another purchaser.

13.  It is clear that under the provisions of the Land Registration Ordinance, the Writ is not registrable, and yet the defendant tries to register the document with a view to put pressure on the plaintiff in selling the Property to a third party.

14.  The conduct of the defendant is totally unreasonable and high-handed with a view to put maximum pressure on the plaintiff.  The conduct of the defendant is unacceptable, and this is an appropriate case for the court to make an order of costs against it on indemnity basis.  I therefore so order.

15.  Mr Li also submits that it is appropriate for the court to ask the solicitors acting for the defendant in the Action to show cause as to why they proceeded to register the Writ despite the clear provisions of the Land Registration Ordinance.

16.  I agree that it is an appropriate course to take, and so I order a further hearing for the solicitors acting for the defendant in the Action to show cause as to why they should not indemnify the defendant in respect of the payment of the costs. 

17.  The last thing is that, despite I order the costs to be paid on an indemnity basis, I take the view that it is not appropriate to instruct two counsel to appear for the plaintiff in this case.  I therefore do not grant certificate for two counsel for this application.