City Target Ltd v. Wong Chor Cheung

DCMP 1806/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1806 OF 2015

--------------------------------

--------------------------------

--------------------------------

-------------------------------------

REASONS FOR DECISION

-------------------------------------

Introduction

1.This is an application by the applicant under Sections 19 and 20 of the Land Registration Ordinance, Cap 128 (“the LRO”).  The applicant seeks an order that the registration of the writ of summons in DCCJ 1806 of 2015 (“DCCJ 1806/2015”) be vacated.  This application was made on 10 July 2015 but the respondent has never responded.

2.At the hearing on 23 September 2015, I granted the order in favour of the applicant in terms of para 1 of the notice of originating summons dated 10 July 2015, namely, the registration of the sealed copy of the writ of summons in DCCJ 1806/2015 dated 25^th April 2015 in the Land Registry under memorial no.15042900990025 against the property situated at commercial unit on 8^th floor, “726 Nathan Road”, no.726 Nathan Road, Kowloon, Hong Kong (The remaining portion of Kowloon Inland lot. 2132 and the remaining portion of section A of Kowloon Inland lot no. 2132) be vacated.

3.I said I would give my reasons for decision in due course.  Here are the reasons.

Background

4.Wong Chor Cheung (“Wong”) is the plaintiff in DCCJ 1806/2015 and the defendant in that case is one Tin Shi Enterprise Development Limited (“Tin Shi”).

5.On 17 January 2013, the defendant and the applicant entered into a sale and purchase contract whereby the applicant agreed to sell 8/F, 726 Nathan Road, No 726 Nathan Road (“the Property”) for HK$66,000,000.

6.The defendant did not proceed with the purchase and alleged that the applicant had been in breach of the sale and purchase contract. The defendant then issued the writ of summons in HCA 180/2015 and registered the same in the Land Registry against the Property, inter alia, seeking specific performance and damages against the applicant.

7.On 14 April 2015, the defendant amended its statement of claim and abandoned the relief for specific performance.  On 21 April 2015, the Court of First Instance ordered that the registration be vacated.

8.In DCCJ 1806/2015 which was commenced by Wong on 25 April 2015, Wong alleged that he had purchased 2% in the aforesaid sale and purchase contract for HK$200,000.  He registered the writ therein in the Land Registry against the Property.

9.As at the date of the hearing, Wong had not filed or served the statement of claim.

Legal principles Involved

10.I accept the submissions of the applicant, very succinctly put forward by its counsel Mr Gary Lam, that if the registered instrument is not a lis pendens and does not affect the land, the court should vacate the registration: See Tele Step Ltd v Pong Man Tat [2011] 1 HKLRD 645 at §16 per DHCJ (as she then was) Queeny Au-Yeung; §1A of the LRO.

11.If necessary, the court should also consider whether there is any good cause to vacate the registration of the instrument. In Ho Yau Kong v Ho Cheng Kwai Ying & ors [1991] 1 HKLR 649 at 652G – H, Bokhary J (as he then was) held that the court should consider those matters as in an interlocutory application for injunction, ie whether there exists a serious issue to be tried and balance of convenience.  Where the instrument is a lis pendens, this is a stronger reason to maintain the registration.

Discussion

12.In the present case, Wong alleges that he had purchased 2% interest in the aforesaid sale and purchase contract for HK$200,000.  Even assuming that this allegation is true for the moment, I agree with Mr Lam that the registration of his writ of summons should be vacated forthwith for the following reasons:-

(1) Tin Shi has ceased claiming proprietary interest in the Property, and only claims monetary damages.  In other words, the rights and interest in sale and purchase contract between Tin Shi and the applicant have become the right to seek monetary damages.  Thus, on Wong’s allegation that he had purchased the 2% in the sale and purchase contact for HK$200,000, the 2% is limited to 2% in the monetary damages only and does not involve any land interest.

(2) In any event, since Tin Shi has abandoned the claim for the Property, Wong cannot obtain any land interest in the Property, and cannot claim lien thereon.  It is trite that the court does not order something impossible: See E Johnson & Co (Barbados) Ltd v NSR Ltd [1997] AC 400 at 411; Udall v Capri Lighting Ltd (in liq) [1998] QB 907 at 915.

(3) Further still, in any event, Wong would have 2% interest only.  I agree with Mr Lam that equity should consider whether this is sufficient for an order of specific performance.  This is because at the end of the day, even if Wong had 2% interest in the Property, the applicant could still seek an order for sale under section 6 of the Partition Ordinance, Cap 352 and buy back the 2% interest therein.  In other words, Wong’s loss is ultimately a monetary loss only.

(4) When balancing the convenience, I agree that the court should take into account that sale of the Property should not be obstructed due to the 2% interest.

Conclusion

13.In the circumstances, I ordered the registration of the writ of summons in DCCJ 1806/2015 be vacated and that Wong should pay the applicant the costs of the present application, with certificate for counsel.

14.I have summarily assessed the costs in this case at $84,000 at the end of the hearing and such costs to be paid by Wong forthwith.

Mr Gary Lam, instructed by DLA Piper Hong Kong, for the applicant

Respondent was not represented and did not appear