Si Tou Choi Kam v. Wealth Credit Ltd

DCMP 537/2016

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 537 OF 2016

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Before: Deputy District Judge J. Chow in Chambers (Open to Public)

Date of Hearing: 17 July 2017

Date of Decision: 17 July 2017

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DECISION

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INTRODUCTION

1.The plaintiff seeks leave to appeal against my decision handed down on 17 January 2017 (“the Decision”), in that I have dismissed the plaintiff’s application to vacate the charging orders registered in the Land Registry by the defendant in both DCCJ 252 of 2009 and DCCJ 3761 of 2009.

2.I do not intend to repeat the dramatis personae and the facts of this case, I shall adopt the abbreviations used in the Decision herein.

LEGAL PRINCIPLES FOR LEAVE TO APPEAL

3.Leave to appeal shall not be granted unless the court is satisfied the appeal has a reasonable prospect of success or there is some other reason in the interest of justice why the appeal should be heard. (See section 63A(2) of the District Court Ordinance, Cap 336)

4.Reasonable prospect of success connotes the prospect of succeeding must be reasonable and more than fanciful, without having to be probable.  An applicant is required to show more than just an arguable case, but he does not have to demonstrate the appeal will probably succeed. Even if the court takes the view that there is a reasonable prospect of success, it still remains adiscretion as to whether to grant leave, though the fact that there is, ex hypothesi, a reasonable prospect of success would heavily influence the court in exercising its discretion. (See commentary of Hong Kong Civil Procedure 2017, §59/2A/4)

THE PLAINTIFF’S APPLICATION

5.The plaintiff’s main ground of appeal is premised on, as submitted by Mr. d’Almada Remedios, counsel for the plaintiff, that the charging orders should be vacated for reason Edmund Cheung has no beneficial interest of the Property since purchase, the charging orders were incapable of attaching on the Property. The Court should have found the existence of Edmund Cheung’s beneficial interest over the Property before considering the issue of priority.

6.The other grounds of the plaintiff’s appeal are that the plaintiff’s sole beneficial interest in the Property is an unwritten equity and is therefore not registerable under section 3 of the Land Registration Ordinance, Cap 128. The Court was erred to focus on the issue of registration. Furthermore, the plaintiff has held to entitle the sole equitable right in the Property since the date of purchase. Such equitable rights bind all persons other than a bona fide purchaser of a legal estate for value without notice of the equitable right.  Charging orders on an interest on land do not confer any proprietary rights; the holder of the charging order are not “bona fide purchaser for value”.

DISCUSSION

7.Be it the plaintiff’s application to vacate the charging orders on the strength of the declaration of the plaintiff’s beneficial interest of Edmund Cheung’s share of the Property seemed to be straightforward, the question of whether charging orders can be vacated from the Land Registry by way of a subsequent declaration which carries retrospective effect is unsettled.

8.This is not a case where the charging order were imposed erroneously on the Property, at time when the loans were advanced by the defendant to Edmund Cheung, but rather, nothing appeared from the land search or other documents that Edmund Cheung was not one of the beneficial owner of the Property at the material time. The defendant was not made known in any manner that Edmund Cheung has no beneficial interest of the Property which was contrary to what has appeared on the land search.

9.The authorities cited by Mr. d’Almada Remedios concerns the legal principles of “validity first and priority second” (See both Financial and Investment Services for Asia Ltd v. Baik Wha International Trading Co. Ltd, [1985] HKLR 103; and Yau Siu Yeung v. Wing Sum Lo [1988] HKC 693).  The authorities are to be distinguished because in the present application, validity came after the registration of the charging orders.

10.As to other grounds of appeal, the plaintiff submitted, being a person holding the sole equitable right of the Property binds all person other than a bona fide purchaser. The holder of the charging order is not a “bona fide purchaser”. The charging order is incapable to bind the plaintiff. I can add no more than that, this ground is a non-point and has no relevance in this application.

11.I am satisfied the plaintiff’s ground of appeal, whether charging orders should be vacated by way of a subsequent decision of the Court has a real prospect of success. I accept and agree, the other grounds of appeal bear reason in the interest of justice that the appeal should be heard.

CONCLUSION

12.I allow the plaintiff’s application for leave to appeal against the Decision. The costs for the plaintiff’s inter parte summons filed on 14^th February 2017, including this hearing, be in the cause of the appeal, with certificate for counsel.

Mr Jose d’Almada Remedios, instructed by KH Yuen & David Cheung, for the plaintiff

The defendant acts in person