RE YEE TSIM CHOI AND ANOTHER

HCMP 2850/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2850 OF 2015

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D E C I S I O N

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1.  The plaintiff is one of the registered joint owners of the property known as Flat 4, 3/F, Block A, Tin Yau Court, No 1 Tin Shing Road, Tin Shui Wai, Yuen Long, New Territories (“the Property”), the other joint owner being her former husband (Mr Yee). The Property is subject to the Home Ownership Scheme of the Hong Kong Housing Authority.

2.  By a consent order dated 29 June 2012 made in FCMC 4606/2012, it was ordered that, upon granting of decree absolute, Mr Yee was to transfer all his legal and beneficial interests of and in the Property to the plaintiff to the intent that she should become the sole owner thereof absolutely.

3.  On 8 January 2013, the Hong Kong Housing Authority indicated to the plaintiff that it had no objection to the assignment of the half share of the Property held in the name of Mr Yee to the Plaintiff.

4.  On or about 13 August 2015, the plaintiff learned from her solicitors that the defendant had, on 13 May 2015, sought to register a “Loan Agreement” dated 7 May 2015 against the Property.  Under that Loan Agreement, the defendant granted to Mr Yee a personal loan of HK$700,000 at the interest rate of 2% per month.  Repayment of the principal amount of the loan was to be made after 1 year, with interest thereon payable on monthly basis.   An examination of the Loan Agreement shows that the loan in question is an unsecured personal loan. It is obvious that the Loan Agreement does not create any interest in land.  It is, apparently, for this reason that the Loan Agreement appears as a “deed pending registration” in the Land Registry in respect of the Property.

5.  By a letter dated 17 August 2015, the plaintiff, through her solicitors, wrote to the defendant requesting the latter to withdraw the registration of the Loan Agreement against the Property.  The plaintiff’s request was not acceded to. Hence, she commenced this action on 2 November 2015 seeking, inter alia:-

(1)  a declaration that the Loan Agreement is not registrable; and

(2)  an order that the Loan Agreement be vacated, de-registered or otherwise removed from the registers of the Property in the Land Registry, including any reference to it as a “deed pending registration” forthwith.

6.  This morning, each party appearing by counsel proposed certain directions for the filing of further evidence and asked that this matter be adjourned to another date for substantive argument.  I refused to give such directions because I can see no valid basis for the registration or attempted registration of the Loan Agreement against the Property in the Land Registry, and I consider it a waste of time and costs to adjourn this matter to another date.

7.  In his skeleton submissions dated 29 March 2016, Mr Foster Yim for the defendant argues that since (i) the Loan Agreement has not in fact been registered in the Land Registry against the Property and (ii) it is not properly registrable as an instrument affecting land, the declaration that the plaintiff seeks is “moot, if not built from sand” and therefore the plaintiff’s application must fail.  It is also said the court has no power to “vacate, deregister or otherwise remove from the registers of the Property if nothing has been registered in the Land Registry”.

8.  The defendant’s argument is plainly misconceived.  As Deputy Judge Cheung (as he then was) said in Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594:-

“10. … The mere fact that it[1] appears in the land search record as a document pending registration is, in my judgment, sufficient to introduce a doubt on the title of the administratrix.

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16. The so-called instrument of transfer has not been lodged for registration as a lis pendens. It was lodged for registration as an instrument affecting land. In those circumstances, the statutory provisions in section 19 of the Land Registration Ordinance (Cap. 128) relating to the Court’s jurisdiction to vacate a lis pendens do not apply. However, as is demonstrated by the many authorities very helpfully cited to me by Mr Tracy this morning (including Heywood v. BDC Properties Ltd [1964] 2 All ER 702 and Thian’s Plastics Industrial Co. Ltd v. Tin’s Chemical Industrial Co. Ltd [1970] HKLR 498, [1971] HKLR 249), this Court does have the inherent jurisdiction to vacate the registration or purported registration of any instrument in the Land Registry which does not affect or no longer affects land. For the same reason, I am fully satisfied that this Court does have the jurisdiction, in an appropriate case, to grant a declaration in relation to the ‘registrability’, as it were, of any document which has been lodged for registration with the Land Registry even though it was not lodged for registration as a lis pendens.

17.   For all the above reasons, I am with the Plaintiff.  I make a declaration that the so-called ‘instrument of transfer’ dated 2 November 1994 that was delivered to the Land Registry on 10 March 2001 for registration by Memorial No. 8332048 is not registrable under the Land Registration Ordinance against the property known as Flat U on 14^th floor (or Flat on 14^th floor of Block U), Man Wo Garden Mansion, No. 38 Yuet Wah Street, Kowloon.  I believe that such a declaration would serve the purpose of the Plaintiff.”

9.  The learned judge also awarded costs in favour of the plaintiff in that case against the defendant on an indemnity basis, on the ground that the defendant’s conduct amounted to a total abuse of the land registration procedure (see paragraph 18 of the judgment).

10.  Deputy Judge Cheung’s decision in Wong Kum Chi was followed by L Chan J in Dragon Fame Investment Limited v Guo Jianjun and Another, HCMP 1812/2012 (21 September 2012).

11.  In my view, the attempt to register the Loan Agreement in the Land Registry against the Property in the present case is totally unjustified.  I would grant a declaration that the Loan Agreement is not properly registrable under the Land Registration Ordinance against the Property, and I would make an order removing it from the Land Registry, including any reference to it as a “deed pending registration”.

12.  I shall hear the parties on the question of costs.