CHAN SIU YUK v. TSOI HUNG WAN

DCMP 178/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS No. 178 OF 2013

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JUDGMENT

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Introduction and preliminary matters

1. This is an application of Madam Chan by an originating summons dated 17 January 2013 (“OS”) for an order for sale of a flat in co-ownership (“the Flat”) pursuant to section 6 of the Partition Ordinance, Cap. 352 (“the Ordinance”).

2. Before dealing with the substantive application, I note that Madam Tsoi was sued in her personal name apparently as shown in the title of the OS. My preliminary research shows that executors can be sued in their personal names but their capacity should be stated in the pleadings.

3. There is no mention about the capacity of Madam Tsoi in the OS. Thus, I made enquiries with Mr Chen appearing for Madam Chan at the outset of the hearing and he agreed to apply to amend the OS so as to state clearly the fact that Madam Tsoi was being sued as executrix of the estate of Pang Wood Min Ricky, deceased (“the Deceased”). Madam Tsoi had no objection to his application and accordingly I granted the application.

4. Madam Tsoi opposed the intended sale of the Flat. Both she and Madam Chan filed their affirmations in these proceedings. I have also invited them to clarify certain matters in the witness box. The background facts are largely not in dispute.

5. Madam Chan got married with the Deceased on 3 April 1978 and their only son was born in March 1979. On or about 5 July 1982 the Deceased and Madam Chan acquired the Flat in joint names as joint tenants from the Hong Kong Housing Authority.  

6. The Flat was the matrimonial home of Madam Chan and the Deceased until 1986 and thereafter, they resided in Holland. In 1988, the Deceased alone returned to Hong Kong leaving his family behind in Holland.

7. The marriage of the Deceased and Madam Chan was dissolved by a Divorce Order issued by a court in Amsterdam, Holland dated 7 June 1993.

8. From a land search conducted in 2009, Madam Chan came to realize that the Deceased without prior notice and knowledge of Madam Chan caused to be registered a Notice of Severance dated 17 October 2009 (“the Notice”) against the Flat with the Lands Registry. The Deceased passed away on 16 December 2009.

9. It transpired that the Deceased made a will in the Chinese language dated 14 October 2009 (“the Will”).  Under the Will, Madam Tsoi was appointed to be the executrix and sole beneficiary of the estate of the Deceased. Probate was granted on or about 17 January 2012.

10. Madam Tsoi used to reside in the Mainland. She married the Deceased in Hong Kong in 1998 and their only son is now 15 years old (“the Son”). She started residing in Hong Kong on the strength of an one-way permit in 2005 and she now resides at the Flat with the Son, who receives Comprehensive Social Security Assistance in the sum of around HK$1,000 per month.

11. As at the date of the OS, the market price of the Flat was around HK$2.2 million. It is common ground that in case of a sale of the Flat, the Housing Authority is entitled to a premium of about HK$850,000.

Governing legal principles

12. Section 2 of the Ordinance provides:

“Subject to this Ordinance, where any property in land is held by 2 or more persons, 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) …;

(b) make an order under section 6 for a sale of the property;

(c) …”

13. Section 6 of the Ordinance provides:

(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.”

14. The legal principles relating to the exercise of judicial discretion under section 6 of the Ordinance were expounded in the following cases: Wong Chun Kei Johnny and Ors. v Poon Vai Ching and Ors [2007] 1 HKLRD 825, Liu Chung Hang and Ors. v Liu Chung Leung Alfred, unreported, HCMP1255/2007, 19.12.2007, Re Inland Lot No 476, unreported, HCMP 1273/2009, 12.3.2010, Chan William Lai Yee and Ors. v Chan Yau Yuen Fun Therese, unreported, HCMP 1203/2011, 8.3.2012.

15. I do not intend to set out all the relevant dicta of the above authorities here. Suffice it to say that the starting point is that an unwilling co-owner should be entitled to terminate an unwanted co-ownership and where it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner) that such an order will not be beneficial to all the co-owners, or that it will result in very great hardship to one co-owner. Whether a sale is beneficial to all the co-owners is to be determined by the court objectively.

16. With these principles in mind, I turn to the application of Madam Chan for an order for sale of the Flat.

Analysis

17. The Flat was purchased under the Home Ownership Scheme. There is no suggestion that it can be partitioned and neither parties advocates this course. In my view, partition is not an option open to the parties.

18. It is clear that Madam Chan wishes to rid herself of the shackles of co-ownership of the Flat. She is now 63 years old and suffers from high blood pressure.  She is currently out of employment. She wishes the Flat to be sold and she would share the proceeds of sale with Madam Tsoi equally.

19. Madam Tsoi, being the sole beneficiary of the estate of the Deceased, does not want a sale of the Flat. She says that she had many happy times with the Deceased at the matrimonial home and so the Flat has sentimental value to her. However, she at the same time indicates that she would accept a sale if it could be sold at an attractive price.

20. Indeed ever since her arrival in Hong Kong in 2005, Madam Tsoi has stayed at the Flat without charge and Madam Chan has never asked her for any rent.

21. Madam Tsoi works as a cleaning worker in the same estate where the Flat is located with a monthly salary of HK$6,000. The Son also attends a secondary school in the same estate. Thus, the Flat is an ideal home for her family and she does not want to leave the Flat. She offers to buy out the share of Madam Chan. According to her estimate with the assistance of a District Councillor in the Tuen Mun district, Madam Chan’s share of the proceeds of the intended sale should be around HK$700,000 inclusive of legal costs. Therefore, she offers to purchase Madam Chan’s share at HK$700,000 claiming that her relatives would give her financial support in such a purchase.

22. At the hearing, I made enquiries with Mr Chan as to the reason why Madam Chan rejected Madam Tsoi’s offer. Mr Chan replied that the current market price of the Flat is around HK$2.6 million and so the estimate of Madam Tsoi is on the low side. Madam Tsoi is however unwilling to pay any higher purchase price for Madam Chan’s share in the Flat.

23. Of course, this court can neither impose upon a purchase price of the Flat on Madam Chan nor determine the market price of the Flat on this occasion.

24. I am not persuaded that a sale of the Flat would cause very great hardship to Madam Tsoi. As Madam Tsoi indicated, it all boils down to how much a sale could yield. Even according to her own estimate, with the half share of the proceeds and her very modest salary, Madam Tsoi should not have any difficulty in finding accommodation in the same district. I do not accept that she and the Son would become homeless after the intended sale.

25. Madam Tsoi finds life easy at the moment but this is down to the fact that Madam Chan allows her share of the Flat be used by Madam Tsoi free of charge. She may find her financial condition less favourable if she has to look for alternative accommodation but I am far from convinced that she would suffer very great hardship. Madam Chan is entitled, in my view, to a clean break after all these years.  

26. Madam Tsoi next relies on an undated letter written by Madam Chan (“the Letter”). In the Letter, Madam Chan indicated that she became one of the registered owners of the Flat not of her own volition and she did not wish to sell the Flat. She further contended that the Deceased was at liberty to dispose of the Flat in whatever way he liked and she did not want to have any share. Madam Tsoi says Madam Chan has thereby given up her share in the Flat.

27. Madam Chan clarified in her oral testimony that the Letter was sent to the Deceased in or about 1992 for the purpose of the divorce proceedings in Holland. As a matter of law, I fail to see how Madam Chan’s beneficial interest could thereby be transferred to the Deceased and/or extinguished by the Letter.

28. On the other hand, the Deceased also did not take this statement in the Letter seriously. Three days before he made the Will, he issued the Notice whereby he clearly acknowledged the beneficial interest of Madam Chan in the Flat. The Letter cannot assist Madam Tsoi at all.

Conclusion and Order

29. In the circumstances, I am satisfied that a sale of the Flat is the fairest option to the parties and will be beneficial to both of them. Absent any very great hardship shown, I opine that a sale of the Flat should be ordered and I so order.

30. I shall make an order in terms of the OS save that I shall delete the phrase “on a first come first serve basis” in paragraph 1(b) of the OS. Madam Tsoi should be given the first option to purchase the Flat. I shall leave this to Madam Chan’s solicitors to draw up the order for my approval.

31. In regard to costs, costs of Madam Chan should be borne by the estate of the Deceased, and not Madam Tsoi personally, to be taxed if not agreed. Madam Chan’s own costs should be taxed in accordance with the Legal Aid Regulations.

32. Since the OS and most documents are written in English, though the hearing was conducted in the Chinese language, this Judgment is written in English. Interpretation services will be provided to Madam Tsoi when this Judgment is handed to her. Madam Tsoi agrees to this course.