HCMP 887/2018
[2020] HKCFI 2517
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 887 OF 2018
________________________
IN THE MATTER OF the Property known as ALL THAT one equal undivided 4th part or share of and in ALL THAT piece or parcel of ground registered in the Land Registry as Shek O inland Lot No. 77 (Unit B (formerly known as Flat B) on the Ground Floor and parts (now known as Portions) on the Lower Ground Floor of No. 24 Shek O Headland (Unit B on Ground Floor & Portions on the Lower Ground Floor, No. 24 Shek O Headland, Hong Kong)
and
IN THE MATTER of a Charging Order Absolute made against the Property under the High Court of the Hong Kong Special Administrative Region Court of First Instance Action No. HCA 1079 of 2015 dated 15th January 2018 and registered in the Land Registry by Memorial No. 18012500260010
and
IN THE MATTER of Order 31, Order 50 Rule 9A(1) and Order 88 of the Rules of the High Court
________________________
BETWEEN
ASPAROUH IANEV DIMITROV as administrator of the estate of KALOIAN IANEV DIMITROV (deceased)
Plaintiff
and
DOMINIC TAK MING LAU also known as LAU TAK MING
1st Defendant
ZHAO MENGWEI
2nd Defendant
________________________
Before: Deputy High Court Judge William Wong SC in Court
Date of Hearing: 21 September 2020
Date of Decision: 28 September 2020
________________________
J U D G M E N T
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INTRODUCTION
1. There are two applications before this Court. First is the Plaintiff’s Originating Summons dated 13 June 2018 (the “Originating Summons”). In the Originating Summons, the Plaintiff, qua judgment creditor, seeks, inter alia , the following relief:
“1. A Declaration that the Charging Order Nisi dated 20th November 2017 in favour of the Plaintiff registered in the Land Registry on 23rd November 2017 under Memorial No. 17112302450011 and the Charging Order Absolute dated 15th January 2018 registered in the Land Registry dated 25th January 2018 under Memorial No. 18012500260010 (together as the Charging Order”) mad against the property more particularly described in the Schedule herein (the “Property”), do retain priority over the Assignment executed by the 1st and 2nd Defendants dated 3rd January 2018 (Memorial No.18011901700011) pursuant to sections 3, 4, and 5A of the Land Registration Ordinance (Cap.128).
2. The Property being the property subject to the Charging Order be sold in the manner as may be directed by the Court at current market value or with a reserved price by private treaty or public auction at the discretion of the Plaintiff, provided that the sale shall take place within 6 months from the date of the Order to be made herein.”
2. Secondly, on 11 March 2019, the 2nd Defendant, ex-wife of the 1st Defendant, took out an inter-partes summons (the “Summons”) seeking the following relief:
“1. The registration of the charging order nisi by memorial No.17112302450011 and charging order absolute by memorial No.18012500260010 against the Property at the Land Registry be vacated;
2.The said charging order nisi and the charging order absolute be discharged or set aside;
3.the said sum of HK$4,551,741.86 together with accrued interest thereon, obtained by the plaintiff’s solicitors, Messrs. Boase Cohen & Collins, from Public Bank (Hong Kong) Ltd, be paid or transferred into court, as to 50% thereof on my (2nd Defendant’s) account under the Action herein and as to the balance of 50% thereof to the 1st Defendant’s account under HCA 1079 of 2015, on the ground that the 1st Defendant no longer has interest in this Action;
4.The plaintiff’s Originating Summons therein be dismissed and the costs of this Action be to the 2nd Defendant to be taxed, if not agreed.”
3. The 2nd Defendant has not pursued paragraph 3 of the Summons at the hearing.
MATERIAL FACTS
4. On 25 October 2017, the Plaintiff obtained judgment against the 1st Defendant whereby Deputy High Court Judge To ordered the 1st Defendant to pay the Plaintiff a sum of US$24,180,000 or the Hong Kong dollar equivalent at the time of payment together with interest (“the Judgment”).
5. On 20 November 2017, the Plaintiff obtained a charging order nisi in respect of the Property (“Charging Order Nisi ”), which was then duly registered at the Land Registry on 23 November 2017 and served on the 1st Defendant’s solicitors on 8 December 2017. The 1st Defendant is and was at all material times the sole registered owner of the Property.
6. On 15 January 2018, the Court rejected the 1st Defendant’s arguments to discharge the Charging Order Nisi and made the Charging Order Absolute.
7. On 25 January 2018, the Charging Order Absolute was registered at the Land Registry.
8. Subsequently, it transpired from land searches conducted by the Plaintiff after the hearing on 15 January 2018 that the Defendants entered into a “Deed of Settlement” dated 13 December 2017, and an Arbitration Award dated 28 December 2017, to assign the Property from the 1st Defendant to the 2nd Defendant.
9. On 3 January 2018, the 1st Defendant and the 2nd Defendant entered into an assignment to transfer the proprietary rights of the Property from the 1st Defendant to the 2nd Defendant (the “Assignment”).
10. On 19 January 2018, the Assignment was registered at the Land Registry.
11. Mr D’Souza for the Plaintiff submitted that both at the hearing of the Charging Order Nisi on 20 November 2017 before Master Hui and at the hearing of the Charging Order Absolute before Deputy High Court Judge To on 5 January 2018, the 1st Defendant who was legally represented but :
(1) did not raise any issue about not having beneficial interest in the Property, or that there may be others who may have any interest in the Property;
(2) did not inform the Court of the “Deed of Settlement”, the “Arbitration Award”, the Assignment, or his divorce with the 2nd Defendant;
(3) proceeded to argue against the Charging Order Absolute on the basis that he was the sole beneficial owner of the Property; and
(4) through his legal representatives specifically confirmed with the Court that there were no additional charges or encumbrances in place against the Property.
12. On 12 February 2018, as a result of the discovery of the Assignment, the Plaintiff’s solicitors gave notice to the 2nd Defendant of the Plaintiff’s intention to enforce the Charging Order Absolute against the Property. The notice provoked no response from the 2nd Defendant.
13. It was not until the Plaintiff took out the Originating Summons on 13 June 2018 for an order for sale that the 2nd Defendant filed the Summons and supporting affirmations to oppose the Plaintiff’s application.
14. It is to be noted that the 2nd Defendant’s case initially was that she owns at least 50% of the beneficial interest in the Property as a result of the marriage law in the People’s Republic of China, but subsequently and as clarified by Mr Lam acting for the 2nd Defendant, the 2nd Defendant now claims 100% of the Property on the basis that the 1st Defendant gifted the Property to her as a condition for her agreeing to marry the 1st Defendant in 1998.
15. Mr D’Souza for the Plaintiff also submitted that it is not the Defendants’ case that the Plaintiff would have any actual or constructive notice of any interest of the 2nd Defendant even if such interest exists.
ORDER FOR SALE
16. The usual manner of enforcement of a charging order is an order for sale, the applicable legal principles are governed by Order 88, rule 5A, Order 50, rule 9A and Order 31 of the Rules of the High Court, Cap.4A.
17. In Union Finance Ltd v Leung Wai Ling & Anor [2002] 2 HKC 821 at 823G-824B, Chung J. said:
“There is no doubt that the court has a discretion over whether to make a charging order absolute or to enforce a charging order by sale. However, this discretion must be exercised judicially. It has been said in a number of cases that a judgment creditor is prima facie entitled to enforce his judgment by a charging order unless the debtor establishes some good reason to the contrary: see, for example, First National Securities v Hegerty [1984] 3 WLR 768 (CA) citing Roberts Petroleum v Bernard Kenny [1982] 1 WLR 301, 307…it was held that when a judgment creditor applies for an order for sale of a property subject to a charging order, the competing equities of the parties will be carefully weighed. Indeed, if necessary, s 20B(4) of the High Court Ordinance empowers court to direct service of copies of the relevant documents to any interested person. Having said these, at the end, there must be a good reason to justify why the court should on the one hand grant an order in a party’s favour but on the other refuse to enforce that very order. ” (Emphasis added.)
18. In Machanao Construction Corporation v Oceanball Investment Ltd , HCMP 2224/1999, unrep., 14 December 1999, Yuen J. (as she then was) at p.3 said:
“The relevant factors to be considered include in this case the fact that the amount outstanding under the judgment debt is more than the value of the Defendant’s interest in the trust, the fact that there is no known prior encumbrance over that interest, that there is no record of any payment made by the Defendant, that there is no evidence of any other claims against the Defendant, that the Defendant has chosen not to appear and the Plaintiff is not aware of any other means of the Defendant to repay the judgment debt.”
19. I am of the view that taking into account all the relevant considerations on the facts of the present case, an order for sale should be made in favour of the Plaintiff. First, it is argued that the 1st Defendant ceased to have any interest in the Property after the Assignment and therefore the Charging Order Absolute is invalid. I disagree.
20. As a matter of law, a charging order nisi , when it was made absolute, related back to the date of the order nisi . Thus, a charging order nisi , when made absolute, takes effect from the date of the order nisi , and is not therefore defeated by an administration decree made in the interval. (See Hong Kong Civil Procedure 2020, Vol.1 at 50/9A/17).
21. In Brereton v Edwards (1888) 21 Q.B.D. 488 at 497-498, Lindley LJ said:
“The next question is, whether the charging order has priority over the order for payment to the guardians, and I think it has. From what date does the charging order take effect? Haly v Barry shews that the effect of the two orders – the order nisi and the subsequent order absolute – was to charge the fund as from the date of the order nisi, and I can see no difference in principle for this purpose between a charging order made under the statutory power, and a similar order made under the general jurisdiction of the Court. The charging order, when it was made absolute, related back to the date of the order nisi. That order was in effect a charging order made ex parte .” (Emphasis added.)
22. In Melco Crown Gaming (Macau) Limited v Wong Yam Tak and Lam Yin Ling , HCA 238/2013, unrep., 29 January 2016, Deputy High Court Judge Yee at §§43, 44 and 47 said:
“43. In the first place, I accept the submission of Mr Chan that since the Charging Order nisi was made and registered prior to the Consent Order, if this court is minded to make it absolute, it would take effect from the date of its creation. It follows that the Consent Order made in the interval cannot defeat or undermine the Charging Order nisi : Brereton v Edwards (1888) 21 Q.B.D. 488.
44. Indeed, as Fox LJ said in Harman v Glencross [1986] Fam 81 (CA) at p.103G, if a charging order is made, any subsequent order for the transfer of property made in the matrimonial proceedings will be subject to it.
47. This latest submission of Mr Chan does not sit well with the legal principles he has highlighted to this court. I cannot agree with him. The Consent Order cannot have the immediate effect of transferring Mr Wong’s beneficial interest in the Property to Madam Lam. It is still subject to the Charging Order nisi if made absolutely eventually. Thus, my determination of the beneficial ownership of Mr Wong will shed light on the extent of the parties’ respective beneficial interest in the Property and hence how much should be charged by the Charging Order nisi .” (Emphasis added.)
23. Applying the above legal principles to the facts of the present case, I have no doubt that the Plaintiff’s Charging Order has priority over the Assignment.
24. In any event, Mr Lam for the 2nd Defendant submitted to this Court that the Assignment is irrelevant as the 2nd Defendant cannot rely on it to establish her beneficial interest in the Property from the date of the marriage between the 1st Defendant and the 2nd Defendant. The Assignment clearly states that the 1st Defendant, rather than the 2nd Defendant, has the full beneficial ownership of the Property prior to the Assignment.
THE 2nd DEFENDANT’S ALLEGED BENEFICIAL INTEREST IN THE PROPERTY
25. The 2nd Defendant’s original position was that she is entitled to 50% of the interest in the Property by virtue of her marriage and/or 100% of the interest as a result of the Assignment.
26. It was only in her latest affirmation that she advances a new factual case to assert that all along the 1st Defendant has promised to gift the Property to her.
27. In her affirmation dated 23 April 2019, she affirmed that:
“4. My position is that D1 is no longer the beneficial owner of the Property since our marriage in 1998. My further contention is that based on the facts affirmed herein, there are factual elements of proprietary estoppel and/or promissory estoppel which led me to be the sole and beneficial owner of and in the Property.
6. The summary of my Position is that:
(1) due to the various issues, including inter alia D1’s promise to give the Property to me upon my agreeing to marry him, proprietary estoppel and/or promissory estoppel, and also the result of the arbitration award of my divorce with D1 in 2017, etc., I became the real and beneficial owner of the Property since my marriage with D1 in 1998;
(2) if in the case my 1st contention above is ruled not in favour of me, and as an alternative, my 2nd contention is that, by virtue of my marriage with D1, I had acquired sufficient interest of and in, inter alia, the Property and that my interest of and in the Property has at least reached ½ of it, and further that
(3) my interest of and in the Property is in the form of unwritten equity and it is non-registrable and as such it overrides the registration of the Charging Order Nisi by Memorial No. 17112302450011 (on 23 Nov 2017) and the Charging Order Absolute by Memorial No.18012500260010 (on 25 Jan 2018).”
28. The 2nd Defendant’s primary case is that the 1st Defendant had promised to gift the Property to her if she agreed to marry her. In paragraph 37, she affirmed that:
“37. Then D1 told me that if I agreed to marry him, and also if I did not mind he already had a daughter and a son, then he would give the Property to me as a wedding gift, and the matrimonial home was already here in that it was not necessary for him to buy a new house as our matrimonial home.
…
52. After our marriage, we had a causal discussion as to whether to transfer the title of the Property into my name.
53. D1 told me that he was ready and willing to transfer the title of the Property to me whenever I wanted but, under HK laws, the transferee (i.e. me) would have to pay stamp duty and solicitors charges for the transaction and documentation.
54. I asked him how much it was and D1 told me that it would take several tens of thousands to do the documentations and to pay the stamp duty. As I did not want to bother him with this unnecessary funds, therefore the idea of transferring the title of the Property to me left abandoned.”
29. The parties have agreed not to adduce oral testimony in the present case. Hence, this Court will have to decide disputed facts by taking into account all the relevant factual circumstances of the case, including the inherent plausibility of a party’s narrative, the contemporaneous documents and the lack of contemporaneous documents to support one’s case.
30. Having taken into all the relevant factual evidence presented to this Court, I am of the view that the 2nd Defendant cannot discharge the burden to prove that she has any beneficial interest in the Property.
31. First and foremost, her factual case is directly contradicted by contemporaneous documents which she personally signed and acknowledged. In the Assignment dated 3 January 2018, it is, inter alia , stated that:
“WHEREAS
1. The property more particularly described in the Schedule hereto (“the Property”) was vested in the Assignor for the residue of the term of years created by the Government Lease referred to in the Schedule hereto (“the Government Lease”) and upon the terms and subject to and with the benefit of the covenants and conditions contained or referred to in an Assignment registered in the Land Registry by Memorial No. UB1533705 (“the Assignment”).
NOW THIS ASSGNMENT WITNESSTH THAT:-
1. IN PURSUANCE OF THE SAID VERDICT AND IN CONSIDERATION OF THE PREMISES the Assignor as Beneficial Owner hereby ASSIGNS AND RELEASES to the Assignee at nil monetary consideration ALL THAT the Property TO HOLD the same unto the Assignee for the residue of the term of years created by the Government Lease Subject to the payment of the due proportion of the yearly Government rent reserved by and the covenants conditions and provisos contained in the Government Lease And Subject to and with the benefit of a Deed of Mutual Covenant registered in the Land Registry by Memorial No. UB1395318 (“the Deed of Mutual Covenant”) so far as the same relates to or affects the Property.”) (Emphasis added.)
32. The Assignment was prepared by a firm of solicitors, namely, Messrs Ivan Tang & Co. If indeed the Property was gifted to the 2nd Defendant, there is no reason why this fact was not stated in the recital to the Assignment. Instead, the 1st Defendant was acknowledged as the beneficial owner of the Property.
33. It is, therefore, understandable, that Mr Lam for the 2nd Defendant submitted that the Assignment is irrelevant for the purpose of establishing the 2nd Defendant’s beneficial interest in the Property. The Assignment defeats the 2nd Defendant’s case.
34. Secondly, in a deed of settlement entered into between the 1st Defendant and the 2nd Defendant on 13 December 2017 (“the Deed of Settlement”), about 3 weeks after the Charging Order Nisi dated 20 November 2017, it is stated, inter alia , that:
“2. LTM [1st Defendant] warrants to ZMW [2nd Defendant] that he is the registered and beneficial owner of the matrimonial home as he used his own money to purchase it before the said marriage and that such matrimonial home has not been pledged, mortgaged or charged to any bank, financial institution or person and that its rights or interests remain vested in LTM solely as beneficial owner .”
35. In my view, this completely negates the 2nd Defendant’s gift argument. If indeed, there was a gift from the 1st Defendant to the 2nd Defendant at the time of their marriage and beneficial interest had already passed, there is no reason why the same was not mentioned in the Deed of Settlement.
36. The 2nd Defendant’s case that she was ignorant of the law is not a credible explanation. This happened about 3 weeks after the Charging Order Nisi . The Deed of Settlement was prepared with the assistance of lawyers. There is no credible reason why the 2nd Defendant would not have relayed her beneficial interest in the Property to her lawyers. Mr D’Souza for the Plaintiff also reminded this Court that this gift argument only surfaced in the 2nd Defendant’s latest affirmation which does not sit well with her two previous affirmations under which she claimed 50% beneficial interest of the Property by virtue of her marriage with the 1st Defendant under PRC law.
37. Thirdly, as can be seen from the land research records, the Property was subject to a number of mortgages and assignment of rentals. It is clear that mortgages were arranged with banks without informing the relevant banks of the 2nd Defendant’s beneficial interest in the Property. The 2nd Defendant said that her consent was required and she did give her consent to the 1st Defendant to enter into those transactions. However, there is no contemporaneous document to show that any bank or financial institution had ever been informed about the 2nd Defendant’s beneficial interest in the Property.
38. This Court also notes that a total of four encumbrances were released on 11 December 2017, just two days before the Deed of Settlement. The issue of the beneficial interest in the Property should be a prime consideration in the minds of the Defendants at the relevant time. If the 2nd Defendant has any beneficial interest in the Property, there is no reason why the same is not recorded in the Deed of Settlement.
39. Further, the assignment of rentals to Pacific Finance (Hong Kong) Limited was registered on 12 August 2004 and only released on 11 December 2018. Mr D’Souza for the Plaintiff submitted that this shows that the Property was not all along used as matrimonial home for the Defendants but for rental purposes. I agree.
40. This Court also notes that in the Petition for Divorce dated 11 June 2013, it is, inter alia, stated that:
“The Petitioner [2nd Defendant] and the Respondent [1st Defendant] have cohabited together at 10th Floor, 107 Hennessy Road, Wanchai, Hong Kong.”
41. Mr Lam for the 2nd Defendant referred this Court to Form 4 in the said divorce proceedings and submitted that the 2nd Defendant did ask for a settlement or transfer of property. Mr Lam, thus, submitted that the 2nd Defendant did assert a proprietary right over the Property. I disagree. Mr D’Souza for the Plaintiff is right that the word “property” referred to all sorts of properties, chattels and no specific reference was made to the Property.
42. For all the reasons stated above, this Court rejects the 2nd Defendant’s gift argument.
43. In relation to the 2nd Defendant’s alternative case that she acquired beneficial interest in the Property by reason of proprietary estoppel and/or promissory estoppel, in paragraph 62 of her affirmation dated 23 April 2019, she affirmed that:
“62. As I became the sole and real beneficial owner of the Property after our marriage, I had incurred at least HKD2 million to do the renovation works and repairs so far. These sums were paid by me alone. I did not ask D1 to reimburse me as he had already given it to me as a wedding gift.”
44. However, there is no documentary evidence to prove that she did contribute about HK$2 million to the renovation and repairs of the Property. The only receipt produced by the 2nd Defendant cannot be linked to the Property. I agree with Mr D’Souza’s submission that the 2nd Defendant’s explanation that the lack of supporting evidence was a result of her not having a habit of keeping receipts is incredible. It is simply untenable that no records can be produced for the payments the 2nd Defendant made in respect of the Property over the past 20 years, which on the 2nd Defendant’s own account would include at least renovation expenses that totaled HK$2 million as well as regular household expenses. In the circumstances, I also reject the 2nd Defendant’s proprietary estoppel and/or promissory estoppel argument.
45. I should also mention that this Court finds it hard to believe the 1st Defendant’s evidence at all. He instructed lawyers to appear in Court both at the hearing for the Charging Order Nisi and the Charging Order Absolute. He never informed the Court that he had gifted the Property to the 2nd Defendant and hence he no longer has any beneficial interest in the Property. On the contrary, he specifically, through his lawyers, submitted to the Court that he is the sole beneficial owner of the Property. Hence, it is incredible for the 1st Defendant to further affirm at paragraph 4 of his 3rd Affirmation that:
“One extra point that I want to address the Court is that, as a layman, until reading D2’s 3rd affirmation recently, no one (including my former solicitors) had ever told me or advised me about the legal implications of inter alia promissory estoppel or proprietary estoppel or unwritten equities in Hong Kong, and therefore I had not given any thought to the factual issue that I had given the Property to my wife (now my former wife) upon her agreeing to marry me back in 1998 and her subsequent conduct, in line with the fact that she had become its sole owner since 1998, and her incurring and spending at least HK$2 millions in renovating and repairing the Property and to keep it in a modernized and habitable conditions.”
46. I have no difficulties in finding the above evidence of the 1st Defendant totally incredible. It does not make any common and commercial sense.
47. Insofar as the 2nd Defendant’s claim for 50% interest in the Property by reason of her marriage with the 1st Defendant under the PRC law is concerned, first, there is no evidence that the Property is their matrimonial home. As set out above, in the Petition for Divorce dated 11 June 2013, both Defendants confirmed that they cohabited together at 10th Floor, 107 Hennessy Road, Wanchai, Hong Kong. The Property has also been used for rental purposes from time to time.
48. Secondly, the Deed of Settlement, the Arbitration Award and the Assignment were all created after the Charging Order Nisi was registered on the Property. Mr D’Souza for the Plaintiff submitted that logic dictates that what the 2nd Defendant might have been originally entitled under PRC law would now be irrelevant. I agree.
49. Thirdly, notwithstanding the reliance on PRC marriage laws, the Defendants have not adduced any PRC law expert to demonstrate how the 2nd Defendant would be entitled to the Property that had already been charged to a creditor.
50. This Court also notes that the very same provision the 2nd Defendant relies on to establish her 50% interest in the 1st Defendant’s properties, namely, Article 41 of the Marriage Law of the People’s Republic of China, also provides that at the time of the divorce, the debts incurred by the husband and the wife during their marriage would be paid off by their properties jointly owned.
51. Finally, both Mr Chan for the 1st Defendant and Mr Lam for the 2nd Defendant submitted that the Plaintiff should have drawn to the attention of the Court the registration of the Assignment, the Deed of Settlement and the Arbitration Award at the hearing of the application for Charging Order Absolute. The failure to do so would mean that the Charging Order Absolute should be set aside. I disagree.
52. Whether the Charging Order Absolute should be set aside is a matter of discretion. The discretion has to be exercised judicially and after taking into account all the relevant circumstances in order to do what is just and right.
53. First, the 1st Defendant cannot complain that the Plaintiff has not drawn to the attention of the Court the documents that he created after the Charging Order Nisi which might affect his own beneficial interest in the Property. In fact, he, through his lawyers, positively represented to the Court that he is the sole beneficial owner of the Property at the hearing of the application for Charging Order Absolute. It is not attractive for the 1st Defendant to complain that the Plaintiff should have drawn to the attention of the Court matters he has personal knowledge because he himself cannot be trusted and the Plaintiff could find out what he had done by the press of a button. The 1st Defendant’s conduct is deplorable.
54. I am of the view that the 1st Defendant has abused the process of the Court. He created the Deed of Settlement, the Arbitration Award and the Assignment which touch and concern his own beneficial interest in the Property without informing the Plaintiff who has already obtained the Charging Order Nisi . He then misled the Court at the hearing of the Charging Order Absolute. He then turned around to support an application to set aside the Charging Order Absolute on the basis that the Plaintiff should not have trusted him (as his opponent) and should, by the press of a button, find out all what he had done and inform the Court at the hearing of the Charging Order Absolute. This kind of conduct is unacceptable.
55. I have also tried to ascertain why the Defendants needed to go through the trouble of obtaining an arbitration award 15 days after the Deed of Settlement. The only answer I got was that it was done under legal advice. To me, this smacks a calculated scheme to defeat the legal effects of the Charging Order nisi obtained by the Plaintiff.
56. Insofar as the 2nd Defendant is concerned, at the very least, by the time of her registration of the Assignment on 19 January 2018, she should have noticed the registration of a Charging Order Nisi . She could have found out what happened. She could have contacted the Plaintiff and/or his solicitors. She did nothing.
57. I accept Mr D’Souza’s submission that the 2nd Defendant herself admitted that the litigation between the Plaintiff and the 1st Defendant has been the source of constant arguments between her and the 1st Defendant. The Assignment was seemingly prepared by a firm of solicitors and it is inconceivable that the Charging Order Nisi would have gone unnoticed at the Land Registry. If there exists a genuine dispute as to the validity of the Charging Order Nisi or the prejudicial effect of such order, the 2nd Defendant should have applied to oppose and set aside the Charging Order Nisi and the fact that no steps were taken until after the Plaintiff issued the Originating Summons suggest that this is simply a litigation strategy deployed by the Defendants to delay the enforcement of the Charging Order Absolute and the repayment of the judgment debts. I agree.
58. The Plaintiff knew about the Deed of Settlement, the Arbitration Award and the Assignment after the hearing of the application for the Charging Order Absolute. It is correct that he could have conducted a land research before the hearing and he did not. However, on the facts of the present case, this Court takes into consideration the 1st Defendant’s continuous representation that he is the sole beneficial owner of the Property and there is nothing to alert the Plaintiff that the 1st Defendant may have attempted to dissipate his beneficial interest in the Property after the Charging Order Nisi was made. In the circumstances, I do not find that the Plaintiff has any actual or constructive notice of the 2nd Defendant’s interest in the Property.
59. Mr D’Souza for the Plaintiff is also right that the burden rests on the 1st Defendant and the 2nd Defendant to show why the Charging Order Nisi should not be made absolute.
60. For all the reasons stated above, I do not find it just and equitable to exercise my discretion to set aside the Charging Order Absolute.
61. Instead, the Court’s judgment and orders including the Charging Order Absolute should be enforced according to the law. As there is no substance in any allegation of beneficial interest on the part of the 2nd Defendant over the Property, the right course for this Court to take is to make an order for sale. I can see no prejudice to be suffered by any party from the sale of the Property. The Plaintiff should not be deprived of the legal remedies which he is entitled from courts of this jurisdiction.
62. Finally, I should mention that there is no appeal against the Charging Order Absolute and the 1st Defendant has not taken steps to set down his appeal against the Judgment. I agree that given that there is no stay of execution of the Judgment, the Plaintiff is entitled to proceed with the enforcement of the Judgment.
DISPOSITION
63. For all the reasons stated above, I make an order:
(1) in terms of paragraphs 1 to 8 of the Originating Summons; and
(2) the Summons is dismissed.
64. Insofar as costs is concerned, I make a costs order nisi that
(1) The 1st Defendant is to pay all the cost of and occasioned by the Plaintiff in both the Originating Summons and the Summons to the Plaintiff to be taxed, if not agreed, on an indemnity basis.
(2) The 2nd Defendant is to pay all the cost of and occasioned by the Plaintiff in both the Originating Summons and the Summons to the Plaintiff to be taxed, if not agreed, on a party to party basis.
65. The above costs order nisi will become absolute unless an application were taken out to vary the same within 14-days from the date hereof.
66. Finally, it remains for this Court to thank Mr D’Souza for the Plaintiff, Mr. Chan for the 1st Defendant and Mr Lam for the 2nd Defendant for their helpful assistance to this Court.
(William Wong, SC)
Deputy High Court Judge
Mr Robin D’Souza, instructed by Boase, Cohen & Collins, for the Plaintiff
Mr Frederick H.F. Chan, instructed by King & Co., for the 1st Defendant
Mr Andy Lam, instructed by Ivan Tang & Co., for the 2nd Defendant