XCHRX FAIRVIEW PARK PROPERTY MANAGEMENT LTD. v. TOP EXPRESS DEVELOPMENT LTD.

HCA397/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.397 OF 1998

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J U D G M E N T

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The appeal

1. The Plaintiff is the manager of Fairview Park in the New Territories. It brings this action against the Defendant who is an owner of a property in Fairview Park to enforce the terms of the Deed of Mutual Covenant ("DMC") and Estates Rules relating to Fairview Park. The Defendant had carried out alterations to its property in breach of the DMC and Estate Rules.

2. The writ was registered by the Plaintiff against the Defendant's property as a lis pendens. The Defendant applied to vacate the registration. The Master allowed the application. The Plaintiff now appeals.

Is the writ registrable as a lis pendens?

3. The issue falls on a narrow compass, namely, whether the writ is registrable as alis pendens within s.2(1) of the Land Registration Ordinance read in conjunction with s.14. Lis pendens means any action pending in a court that relates to land or any interest in land : s.1A.

4. The meaning of lis pendens had been extensively considered by Patrick Chan J. (as he then was) in Chow Chiu-tai and Chan Tak-ming [1994] 1 HKLR 274 and by Le Pichon J. in Re Ching Yue Chong (Deceased) [1997] CPR 237. It is not necessary for me to tread the same grounds that had been extensively covered by the learned judges. I respectfully adopt their approach. In my view, the test to be applied is this : Does the present action which obviously relates to land affects an interest in the land? The requirement as suggested in cases such as Yu Jing Jenn v. Wong Pe Wun & Ors [1986] HKC 624 that some propriety right must be asserted is not the only basis in which a writ can be registered as a lis pendens.

5. In the present case, the answer to the question I have formulated must be "yes". The Plaintiff is seeking an order in the nature of a mandatory injunction requiring the Defendant to remove the unauthorised structures and to reinstate the property to its original state. This obviously affects an interest in the land.

6. Furthermore, the Plaintiff's interest in the land, by reason of its position as the manager of Fairview Park, to enforce the DMC will no doubt be adversely affected against subsequent purchasers from the Defendant if the writ is not registered. In Whittingham v. Whittingham [1978] 2 WLR 936, Stamp L.J. stated that : "Some assistance in answering the question will no doubt be obtained by considering whether in the absence of registration a purchaser or mortgagee might obtain a title to the land as a bona fide purchaser without notice of, and so defeat, the plaintiff's claim..."

7. The Defendant argued that as the DMC which expressly provides for the observation of the Estate Rules is already registered against the Defendant's property, any subsequent purchaser must have notice of the DMC and bound by the provisions of the DMC.

8. This may be so, but what is more important is to put any subsequent purchaser on notice of the actual breach of the DMC. This is the very purpose for which the registration is intended. A purchaser who buys the property with notice of the Plaintiff's claim to enforce its right pursuant to the DMC would have great difficulties in resisting the Plaintiff's claim for mandatory injunction pursuant to the terms of the DMC. This point in fact is covered by Browne-Wilkinson J. in Greenhi Builders Limited v. Allen [1979] 1 WLR 156 :

"... In this case, a purchaser from the company would not take free of the easement which is claimed if the cautioners succeeded in establishing such an easement for the easement claimed is a legal easement and it would take effect under the Land Registration Act without registration as an overriding interest. But it is on this aspect of the matter that, in my judgment, the claim for a mandatory injunction in the pleadings in the action becomes material. If the company retained the land until judgment, there can be no reason why, if other considerations are satisfied, the court should not specifically order the company to restore the support which has been allegedly wrongly removed. If, on the other hand, the land has in the interim ceased to belong to the company and has come into the hands of third parties who have no notice of the claim and no notice of the claim to the easement, there may be very substantial difficulties in getting mandatory relief against the persons who are the owners at the date of judgment. It is, in my view, exactly for this type of purpose that the registration of pending land actions was introduced so as to ensure that anybody taking the land during the pendency of a land action should know that the action was going on and should be on notice as to the relief claimed in it. Having taken with notice of the relief being claimed, it would present very formidable difficulties in a purchaser to resist an order under which the cautioners' rights were enforced specifically by a mandatory injunction."

What the learned judge said in that judgment covers the present situation.

Conclusion

9. Accordingly the writ is properly registered as a lis pendens and the appeal is allowed.