Luk Chi Kin v. Celebrity Credit Ltd and Another

HCMP 1309/2017

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1309 OF 2017

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REASONS FOR JUDGMENT

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Introduction

1.This is the application by the plaintiff for an order to vacate the registration in the Land Registry of the sealed copy Writ of Summons[1] (“the Writ”) taken out by the defendants against his wife Eileen Yuk.  The Writ, which is listed as a deed “pending registration”, appears on the land search records of three different properties (“the properties”) all of which are jointly owned by the couple.

2.The application is made pursuant to section 19 of the Land Registration Ordinance, Cap 128 (“the Ordinance”).  The basis the application is that the Writ (in its original form), which was just a monetary claim against Eileen Luk for the principal and interest of a loan owed by her to the defendants, is not an instrument which “affects” land and thus not registrable. 

3.Having hearing submissions from both sides, I gave judgment for the plaintiff and granted him costs by way of summary assessment, saying that reasons for the judgment would be given in due course.  This, I now do.

Applicable legal principles

4.The relevant law, which is well-established, is succinctly and admirably summarized in the judgment of Deputy High Court Judge Kwok SC in Luen Ford Industrial Co Ltd v Woo Ming Han Juliana[2], which I gratefully adopt and will not repeat here.  Very shortly stated, before a claimant registers an action as a lis pendens, it is his duty to ensure that it is an action in which a claim to land or some interest in land is asserted: that there is a claim of right or a claim to charge some specific property.  In other words that the landed property mentioned in the memorial is “in litigation”: see the decision of the Full Court in Thian’s Plastics Industrial Co Ltd and others (No 2) v Tin’s Chemical Industrial Co Ltd and another[3]. It is only where an instrument may create some interest legal or equitable in the parcel of ground that the instrument can be the subject of registration under the Ordinance: see the judgment of the Privy Council in Anstalt Nybro v Hong Kong Resort Co Ltd.[4]  Both Thian’s Plastics and Anstalt Nybro haverecently been applied by the Court of Appeal in John’s Win Holdings Limited v City Target Limited and another[5], which is also a case about vacating a lis pendens listed as “pending registration” under section 19 of the Ordinance. 

The issues

5.Applying the applicable law to the present case, it can hardly be disputed that the Writ (in its original form), which is just about a monetary claim against a joint-tenant without reference to any interests in real property, is not registrable under the Ordinance, whether as “lis pendens” or otherwise.  That conclusion is reinforced by the fact that the defendants subsequently filed an Amended Writ adding the plaintiff as a defendant to the High Court Action and also adding remedies seeking delivery of vacant possession and an order for sale of the properties on the strength of a legal charge (“the Legal Charge”) signed by Eileen Luk as the borrower in favour of the defendants.

6.It is of note that when the defendants registered the Amended Writ with the Land Registry on 14 August 2017 against each of the properties, they did not at the same time withdraw the Writ from registration.  Therefore, both the Writ and the Amended Writ are listed on the land search records.  It should also be noted that the plaintiff’s application is only about the registration of the Writ[6].  The Amended Writ, which is registered under a different memorial number, is not the subject matter of the present application.

7.Therefore, the only live issues before the court are:

(i) whether the plaintiff’s application has been rendered “academic” because of the letter from the solicitors acting for the defendants to the Land Registry, dated 26 August 2017, asking for the withdrawal of the Writ from registration; and

(ii) whether the hearing scheduled for 1 September 2017 for the plaintiff’s application has thus become unnecessary. 

8.Mr Hariman, counsel for the defendants, argues that the plaintiff’s application should not be granted, as it would serve no useful purpose. Counsel draws my attention to Shum Chin Kit v the Estate of Lok Lai Sheung, deceased,[7] citing Chan Kam Kee v Chan Kam Man,[8] which supports the proposition that the court’s function is to resolve genuine disputes and would exercise its discretion against the grant of the declaration when the order sought was academic or involved a hypothetical question.

Chronology of events

9.It would be convenient for me to set out the chronology of the relevant events as follows:

27 April 2017	The defendants filed the Writ against Eileen Luk.
4 May 2017	The defendants registered the Writ with the Land Registry.
12 May 2017	The defendants registered the Legal Charge with the Land Registry.
20 May 2017	Solicitors for the plaintiff wrote to solicitors for the defendants asking that the registration of the Writ be withdrawn.
6 June 2017	The plaintiff took out the Originating Summons for the application and filed a supporting affirmation.
9 August 2017	The defendants amended the Writ.
14 August 2017	The defendants registered the Amended Writ with the Land Registry with a different memorial number.
26 August 2017	Solicitors for the plaintiff wrote to solicitors for the defendants (with a fax stamp showing the time 11:09 am) seeking a consent order vacating the registration of the Writ.
	[The date of the letter from the solicitors for the defendants to the Land Registry seeking withdrawal of the Writ from Registration.][9]
29 August 2017	Tam Tsz Hin, director of the defendants, filed an affirmation saying that the defendants “shall shortly withdraw registration of [the Writ], in any event before the upcoming hearing on 1st September 2017.”
30 August 2017	The plaintiff filed his 2nd affirmation exhibiting land search records showing that, as at 11:13 am on 30 August 2017, the Writ still remained as a deed “pending registration” and had not been withdrawn.

10.Regarding Mr Hariman’s submission that the application has since become “academic”, I note first that the plaintiff is not seeking a declaration but an order vacating the registration of the Writ. 

11.Secondly, with respect, Mr Heung, solicitor acting for the plaintiff, is my view plainly right that the subsequent amendment of the Writ and the registration of the Amended Writ do not alter the fact that the Writ (in its original form) is not registrable and therefore is liable to be vacated. Whether or not the plaintiff is going to object to the registration of the Amended Writ is not relevant to the present application and is not a question before this court.  

12.Thirdly, I also reject the defence argument that the letter of the defendant’s solicitors to the Land Registry dated 26 August 2017 has the effect that Mr Hariman contends for.  This is because:

(i)   as a matter of evidence, the defendants’ letter to the Land Registry is not covered by any affirmation and Mr Hariman is not supposed to give evidence from the bar table.  Besides, the letter had not been copied to the plaintiff and there is nothing to show on its face to show whether and when the Land Registry had received the letter;

(ii)   when Tam Tsz Hin made his affirmation on 28 August 2017, he said nothing about the aforesaid letter which was dated just two days before.  Besides, he did not refer to any attempt as having already been made to withdraw the registration of the Writ. Instead, what he deposed was in the future tense, that is, the defendants “shall shortly withdraw registration of [the Writ]”.  That is inconsistent with the contents of the letter;

(iii)   at no point before the hearing had the defendants explained why they had not sought to withdraw the Writ from registration at the same time as they registered the Amended Writ;[10]

(iv)   the defendants had been invited to make a consent order.  Had they given their consent, the hearing could have been avoided.   However, the defendants chose not to reply to that invitation or the letter of the plaintiff’s solicitors at all and the plaintiff had not been informed about the letter of the defendant’s solicitors to the Land Registry; and

(v)   as a matter of fact, despite what was said in Tam’s affirmation, as at 11:13 am on 30 August 2017 the Writ still remained on the register as a document “pending registration” and had not been removed from the registers of the properties.  Even up to the time of the hearing, there was nothing to show that the situation had changed.

13.In the circumstances, I cannot see how the plaintiff can be criticized for insisting to proceed with his application.  In my judgment, although there appears to be a likelihood that the Writ would eventually be removed from the registers, one knows not when that would happen.  In the circumstances, the plaintiff is not bound to accept what the defendants had said at face value.  Therefore, so long as the Writ continues to be listed on the land search records, it is difficult to see how it can be said that the plaintiff’s application has been rendered “academic”.  Moreover, since there is nothing to show that the Writ had in fact been removed from the registers, the plaintiff is also entitled to have a hearing and an order from the court in order to safeguard and enforce his legal right.  

14.For the above reasons, I rule in favour of the plaintiff and grant him an order in terms of paragraph 1 of the Originating Summons.

15.As regards costs, despite the submissions of Mr Heung, having regards to the principles set out in Hong Kong Civil Procedure 2017, at §62/App/12, I do not consider that the defendant’s conduct is an affront to the court so as to call for indemnity costs.  I order that the defendants pay the plaintiff’s costs both in relation to the Originating Summons and the hearing on a party-and-party basis. 

16.Having regard to the Statement of Costs prepared by Mr Heung and after hearing from both sides, the plaintiff’s costs are summarily assessed at a global figure of $42,000. 

Mr Matthew Heung, of Leonard K L Heung & Co, for the Plaintiff

Mr Wayne Hariman, instructed by Day & Chan, for the 1^st and 2^nd Defendants