Mok Mei Ling Rekei v. Lau Muk Fat

HCMP 944/2018

[2019] HKCFI 1647

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 944 OF 2018

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Before: Madam Recorder Linda Chan SC in Chambers

Date of Hearing: 16 May 2019

Date of Decision: 28 June 2019

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D E C I S I O N

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1.By Originating Summons issued on 25 June 2018 the plaintiff, Mok Mei Ling Rekei, applies for relief to vacate the registration of three documents lodged by the defendant, Lau Muk Fat, with the Land Registry against the nine lots of land currently registered in her name.

2.The nine lots of land are Section A of Lot No 85, Lot No 273,Lot No 274, Lot No 275, Lot No 276, Lot No 277, Lot No 278, Lot No 279and Lot No 280, all in Demarcation District No 258 (collectively “9 Lots”).  

3.The three documents lodged with the Land Registry for registration against the 9 Lots are:

(1)  a Memorandum of Notice dated 16 May 2013 (“2013 Memorandum”) submitted on 23 May 2013, which has been withheld by the Land Registrar from registration;

(2)  a sealed copy of Amended Writ of Summons in HCA 1879/2011 dated 23 March 2012 (“2011 Writ”) submitted on 24 October 2016, which has been withheld by the Land Registrar from registration; and

(3)  a sealed copy of the Writ of Summons in HCA 1006/2017 dated 26 April 2017 (“2017 Writ”) submitted on 28 April 2017, which has been registered in the Land Registry against the 9 Lots.

Background fact

4.The following fact relevant to the application is not in dispute.  

5.The defendant is the manager of Lau Shau Wo Tso(劉壽和祖) (“Tso”) which, until 31 August 1995, owned various plots of land in Demarcation District 258 including the 9 Lots.

6.The plaintiff is the wife of Wong Kwok Wa (黃國華) (“Wong”).

7.By a joint venture agreement dated 15 December 1994 made between Tso (with the defendant as manager) and Wong as developer (“Development Agreement”), as varied by a supplemental agreement dated 31 August 1995, the parties agreed, inter alia, to jointly develop various plots of land into small village houses on the following terms:

(1)  Tso would transfer various plots of land to Wong (clause 3);

(2)  Wong would identify indigenous villagers who could apply for building lots from the Government to build small village houses by surrendering Tso’s land for new grants of building lots;

(3)  The building lots would then be conveyed to the indigenous villagers (clause 5);

(4)  Wong would build small village houses on the building lots (clauses 8 – 10);

(5)  The completed houses built on the lots would be split between Wong and Tso in the ratio of 60:40 (clause 17(a)); and

(6)  For every 5 completed houses built on the lots, Wong would first select his lot, followed by Tso, such that 3 lots would be selected by Wong and 2 lots by Tso (clause 17(b) as varied) (“Selection Mechanism”).

8.Pursuant to the Development Agreement:

(1)  On 31 August 1995, Tso conveyed various lots of land to Wong at no consideration;

(2)  Wong caused some of Tso’s lots to be surrendered to the Government, and obtained various re-granted/‌sub-divided building lots;

(3)  Wong then caused the building lots to be assigned to various indigenous villagers as registered owners, again at no consideration; and

(4)  Wong procured 17 small village houses to be constructed on 17 building lots (“17 Houses/Lots”).

9.Of these 17 Houses/Lots:

(1)  6 houses/lots were allocated and conveyed to Tso on 7 June 2011 (“6 Houses/Lots”) and, since then, have been owned by Tso;

(2)  9 houses are built on the 9 Lots (“9 Houses/Lots”); and

(3)  2 houses are built on the 2 lots in Section B and Section C of Lot No 85, in DD 258 (“2 Houses/Lots”).   

10.Dispute arose between the defendant and Wong regarding the performance of the Development Agreement.  The defendant alleges that Wong acted in breach of the Development Agreement in that:

(1)  there has been delay in developing and conveying the 6 Houses/Lots to Tso;

(2)  small village houses have not been built on another12 buildinglots originated from Tso [1] and held by 12 indigenous villagers (“Other Villagers”).  Some other lots conveyed by Tso to Wong could not be converted into building lots.  These 12 lots and “unconverted” lots, which are different from the 17 Houses/Lots, are collectively referred to as “Undeveloped Lots”;

(3)  Wong had made misrepresentations to the defendant, which led to the defendant accepting the 6 Houses/Lots instead of insisting on the Selection Mechanism; and

(4)  The defendant contends that the 9 Houses/Lots and the 2 Houses/Lots constitute the so-called “11 Unallocated Houses/Lots”, and Wong has failed to select his share pursuant to the Selection Mechanism.

11.On 3 November 2011, the defendant commenced HCA 1879/2011 against Wong and the Other Villagers.  On 23 March 2012, the defendant filed an amended writ (ie the 2011 Writ) together with an amended statement of claim (“2011 ASOC”).  In the 2011 ASOC, the defendant claims against Wong for breach of the Development Agreement and seeks the following relief:

(1)  damages for loss of the use of the 6 Houses/Lots as a result of Wong’s delay in completing their construction and the expenses incurred in rectifying the defects in such Houses (prayers (1) – (2));

(2)  damages for misrepresentation in respect of the allocation of the 6 Houses/Lots (prayer (3));

(3)  specific performance of the Development Agreement by Wong to procure the transfer of the Undeveloped Lots to Tso (prayer (4));

(4)  an order that Wong do assign the Undeveloped Lots to Tso, and damages for breach of trust (prayer (5));

(5)  specific performance of the Development Agreement requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots, and to assign and transfer 40% interest in the 2 remaining houses/lots to the defendant (prayer (6)); and

(6)  a declaration that the defendant is entitled to ²⁄₁₁ shares of the 11 Unallocated Houses/Lots and “an order that there be a charge” in favour of the defendant in respect of such ²⁄₁₁ shares (prayer (7)).

12.In the 2011 ASOC, the defendant also claims that the Other Villagers hold the Undeveloped Lots on trust for Tso.  No claim hasbeen made against the 11 indigenous villagers who held the 11 Unallocated Houses/Lots.

13.On 24 May 2013, the 2013 Memorandum was signed by the defendant and the same was lodged by the defendant’s former solicitors for registration against, inter alia, the 9 Lots.  On 6 June 2013, the Land Registrar stopped the registration.

14.On 22 June 2015, Hong Lee & Co (“HLC”) became the solicitors for the defendant.  On 24 October 2016, HLC lodged the 2011 Writ for registration against, inter alia, the 9 Lots.  On 16 January 2017, the Land Registrar stopped the registration.

15.By a sale and purchase agreement dated 21 April 2017 (“SPA”), the 9 Lots were “sold” by the 9 indigenous villagers to the plaintiff for HK$117,000,000.  It is common ground that the 9 indigenous villagers never acquired any interest in the 9 Lots, nor did the plaintiff pay the consideration stated in the SPA to the 9 indigenous villagers.

16.Prior to completion of the SPA, on 26 April 2017, the defendant issued the 2017 Writ together with the statement of claim (“2017 SOC”), and the same was registered against the 9 Lots on 28 April 2017.  In the 2017 Writ, the defendant named the 11 indigenous villagers who held the 11 Unallocated Houses/Lots as the 2^nd to 12^th defendants.

17.In the 2017 SOC:

(1)  the defendant repeats the same allegations made in 2011 ASOC including the allegation that Wong has not selected 9 houses/lots out of the 11 Unallocated Houses/Lots (at §52(a));

(2)  the defendant alleges, for the first time, that (i) the 11 indigenous villagers held the 11 Unallocated Houses/Lots “as nominee and/or agent” of Wong for the purpose of the Development Agreement (at §60(a)); and (ii) Wong had and still has full control and possession of all of the 11 Unallocated Houses/Lots (at §60(b)).

(3)  For these reasons, the 11 indigenous villagers:

(i) are holding the legal titles of the entire 11 Unallocated Houses/Lots “on resulting and/or constructive trust” for the defendant and Wong (§61(a));

(ii) should assign and transfer 40% interest and benefit of the “2 Remaining Houses/Lots” [2] to the defendant (§61(b));

(iii) should assign and transfer 60% interest and benefit in the “2 Remaining Houses/Lots” to the defendant, and the “9/11 interest and benefit of and in 9 out of all the [11 Unallocated Houses/Lots] to [Wong]” (§61(c)); and

(iv) must not sell, dispose of or create any encumbrances on the 11 Unallocated Houses/Lots (§61(e), (f)).

18.The defendant further alleges in the 2017 SOC that pending completion of the aforesaid assignments and transfers, the defendant is entitled to:

(1)  “ 40% of the 2/11 shares on all the [11 Unallocated Houses/Lots]” (§61(d)(i));

(2)  “ a charge/lien over all the [11 Unallocated Houses/Lots] for his / the Tso’s proprietary interest of 40% of the 2/11 shares thereof” (§61(d)(ii)); and

(3)  “40% interest and benefit of and in the [2 Remaining Houses/Lots] free from encumbrances; and the [defendant] is entitled to select the same from the [11 Unallocated Houses/Lots]” (§61(g)).   

19.The declaratory and other relief claimed in the prayers of the 2017 SOC are based on the allegations set out in §§17 – 18 above.

20.By an assignment dated 6 July 2017, the 9 Lots were assigned by 9 indigenous villagers to the plaintiff (“Assignment”).

21.By letter dated 18 December 2017, the plaintiff through her former solicitors informed the defendant of the Assignment and demanded the defendant to (1) withdraw the registration of the 2013 Memorandum and the 2011 Writ, (2) vacate the registration of the 2017 Writ against the 9 Lots and (3) disclose all correspondence exchanged between the defendant’s solicitors with the Land Registry in relation to the registration of the 2013 Memorandum.

22.The defendant did not comply with the demand.  Thereafter, the plaintiff’s solicitors attempted, but was unable, to obtain the correspondence in relation to the registration of the three documents from the Land Registry. 

23.By letter dated 12 February 2018 (“Selection Letter”), Wong through his solicitors informed the defendant that:

(1)  in response to prayer (6) of the 2011 ASOC, he selected the 9 Houses/Lots as his own;

(2)  he agrees to share with the defendant the interest and benefit of the 2 Houses/Lots in the ratio of 60:40 either by transferring 40% of the ownership in respect of the 2 Houses/Lots to the defendant or putting them for sale and upon completion, sharing the net proceeds between him and the defendant as to 60:40; and

(3)  nothing therein “shall prejudice to Wong’s Amended Defence and Counterclaim filed herein [3] ”.    

24.The defendant did not respond to the Selection Letter.  On 25 June 2018, the plaintiff commenced the present proceedings.

25.The plaintiff filed three affirmations in support of her application, namely her affirmation filed on 2 August 2018, her 2^nd affirmation and Wong’s affirmation both filed on 4 October 2018. The defendant filed his affirmation in opposition on 30 August 2018.

26.At the callover hearing on 8 November 2018, Deputy High Court Judge To adjourned the hearing of the Originating Summons for argument with two days reserved, on the basis that cross-examination of the deponents will not be required.

27.I should add that the defendant has placed before the court a copy of a writ and statement of claim filed by the defendant on 7 May 2019 in HCA 802/2019 (“2019 Action”) in support of his argument that the plaintiff has no locus standi to commence these proceedings.  This is not permissible, as the 2019 Action does not form part of the evidence in these proceedings.

Discussion

28.Mr Alan K K Leong SC (leading Mr Alfred C P Cheng), counsel for the plaintiff, submits that the registration of the three documents should be vacated on the following grounds:

(1)  the 2013 Memorandum is not a registrable instrument under the Land Registration Ordinance (Cap 128) (“LRO”), as it does not affect any interest over the 9 Lots;

(2)  the 2011 Writ and 2017 Writ are not lis pendens within section 1A of the LRO because the Development Agreement, if performed, would only confer on Tso a proprietary interest over the 6 Houses/Lots, and 40% of the 2 Houses/Lots; and

(3)  in any event, as Wong has already selected the 9 Houses/Lots as his own, there is no basis for the defendant to maintain any claim over the 9 Lots.

29.On the other hand, Mr Kenneth C L Chan (appearing with Mr Billy N P Ma), counsel for the defendant, submits that the Originating Summons should be dismissed on the following grounds:

(1)  the plaintiff is not the registered owner of the 9 Lots and has no locus standi to commence these proceedings, as the SPA and the Assignment are “sham” and the defendant has commenced the 2019 Action to set aside the Assignment;

(2)  the 2013 Memorandum is a registrable instrument under the LRO;

(3)  the 2011 Writ is an action “in which claim to land or some interest in land is asserted / there is a claim of right or a claim to charge some specific property”;

(4)  the relief sought by the plaintiff requires the Court to determine the proceedings in the 2011 Writ and the 2017 Writ,which is not permissible; and

(5)  there are “significant factual and legal disputes” and the use of the Originating Summons procedure is inappropriate. 

30.Accordingly, the issues which require determination of the Court are:

(1)  whether the plaintiff has locus standi to bring the present proceedings;

(2)  whether the 2013 Memorandum is a registrable instrument;

(3)  whether the 2011 Writ is a lis pendens within section 1A of the LRO;

(4)  whether the 2017 Writ is a lis pendens within section 1A of the LRO;

(5)  whether it is appropriate for the Court to determine the issues raised in these proceedings summarily.

Applicable principles

31.Section 2(1) of the LRO provides as follows:

“ The Land Registry shall be a public office for the registration of deeds, conveyances, and other instruments in writing, and judgments; and all deeds, conveyances, and other instruments in writing, and all judgments, by which deeds, conveyances, and other instruments in writing, and judgments, any parcels of ground, tenements, or premises in Hong Kong may be affected, may be entered and registered in the said office in the prescribed manner.”                (underline added)

32.The term “instrument in writing” is not defined in the LRO.  In Anstalt Nybro v Hong Kong Resort Co Ltd [1980] HKLR 76 at 81, the Privy Council held that “it is only where the [instrument] may create some interest legal or equitable in the parcel of ground that the instrument can be the subject of registration under the [LRO]”.

33.As for “judgments”, section 14 provides that the provisions of the LRO relating to judgments shall extend to lites pendentes.  A “lis pendens” is defined in section 1A as “(a) any action or proceeding pendingin a court or tribunal that relates to land or any interest in or charge on land;and (b) a bankruptcy petition”.  However, not all lis pendens are registrable, and the test for registrability was stated by P Chan J (as he then was) in Chow Chiu Tai v Chan Tak Ming [1994] 1 HKLR 274 at 279(10–35) thus:

“ So an action or proceeding which falls within the definition of lis pendens is registrable in the same manner as a judgment. But not every judgment is registrable under the Ordinance; only those by which ‘any parcels of ground, tenements, or premises inHong Kong may be affected may be registered at the Land Office’(see s. 2). It follows that not every lis pendens falling within s. 1A is registrable; only those by which land may be affected are. In other words, not every action or proceeding pending in a court that relates to land or any interest in or charge on land is registrable unless it affects the land or any interest therein.

… A lis pendens, to be registrable, must be one which affects an interest in land so that if it is not registered or registered in time,the interest affected by it may lose priority to some other interest in the same land if the document relating to that other interest is registered. In other words, the question to be answered is: will the interest which is to be affected by the action or proceeding be adversely affected by or deferred to some other interest in the land if the action or proceeding is not registered or registered in time?”               (underline added)

34.Under section 19 of the LRO, the court has the power to order the registration of a lis pendens be vacated:

“ The court or judge before whom any property sought to be bound is in litigation, may on the determination of the lis pendens, or during the pendency thereof, where the said court or judge is satisfied that the litigation is not prosecuted bona fide, or for other good cause shown, make an order for the vacating of the registration in the Land Registry of such lis pendens without the consent of the party who registered it, and may direct the party on whose behalf the registration was made to pay all the costs and expenses occasioned by the registration or the vacating thereof, including the costs of the application to vacate, or may make suchother order as to such costs or any of them as to the said court or judge may seem just.”               (underline added)

35.Moreover, Mr Leong submits (and Mr Chan accepts) that the Court has inherent jurisdiction:

(1)  to grant a declaration on the registrability of any document lodged for registration at the Land Registry whether it is a lis pendens or not (Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594 at §16); and

(2)  to deal with the registrability of documents pending registration at the Land Registry, and order their removal or vacation if they are not registrable (Shineland Corporation Ltdv Gladford Ltd HCMP 1972/2017, 30 November 2017, at §44).  

36.Further, section 20 provides that an application to vacate a lis pendens under section 19 may be made in a summary way and may be made by “any person interested in the property against which the lis pendenshas been registered, whether such person is a party to the lis pendens or not”. This makes clear that a person having interest in the property in question can seek a summary determination of the registrability of the lis pendenswhich has been registered against that property, whether or not he is a party to the lis.

37.Although section 20 does not apply to an application concerning the registrability of an “instrument in writing” or a document pending registration, in my view, the Court may take into account the matters listed in section 20 when considering whether a person has locus to make the application and whether the procedure invoked is appropriate.      

38.I would add that this Court has enquired with counsel as to whether the Development Agreement would be tainted with “illegality”,given the indigenous villagers who applied to the Government for permission to build small village houses were not the beneficial owners ofthe land lots, but acted as conduit or bare trustees for Tso and the defendant (see: Lau Kwai Kiu v Bian Xintian [2012] 2 HKLRD 954 (CACV 263 and 281/2010, 30 March 2012); Chan Yau v Chan Calvin & anor CACV 202/2014, 6 August 2015).  In response, Mr Chan submits that the requirement for indigenous villager to make a statutory declaration to the effect that he is the beneficial owner of the land in question was only introduced in October 1997 and, therefore, has no application to the Development Agreement which was made in December 1994.  This is not disputed by Mr Leong.

39.I turn to consider the issues identified in §30 above.

Locus standi

40.In my view, Mr Chan’s submission that the plaintiff has no locus standi to commence these proceedings is misconceived.  The plaintiff is and has since 6 July 2017 been the registered owner of the 9 Lots and, as such, is a person interested in the 9 Lots against which (1) the 2013 Memorandum and 2011 Writ have been pending registration, and (2) the 2017 Writ has been registered.

41.As to Mr Chan’s submission that the SPA and Assignment are“sham” as they did not represent a genuine sale and purchase of the 9 Lots, but was part of an alleged scheme of “fraudulent transactions” to defraud the defendant, I do not think that the submission is well founded, in light of the defendant’s own case that the 9 indigenous villagers never acquired any interest in the 9 Lots and that Wong had the right to choose his share of 9 houses/lots out of the 11 Unallocated Houses/Lots.  Indeed, until the commencement of the 2019 Action, the defendant has never sought to set aside the SPA or the Assignment.  The mere fact that the defendant belatedly commenced the 2019 Action would not change the fact that the plaintiff is the registered owner of the 9 Lots, such that she has the locus to commence these proceedings.

2013 Memorandum

42.Mr Leong submits that the 2013 Memorandum is not an “instrument in writing” within the meaning of the LRO, as it did not confer any interest in the 9 Lots on Tso.  At best, it was a self-serving notice to inform the reader that Tso intended to claim against Wong and the 9 indigenous villagers holding the 9 Houses/Lots and the 2 indigenous villagers holding the 2 Houses/Lots for breach of contract.

43.On the other hand, Mr Chan argues that the 2013 Memorandum is a registrable instrument “as it is dealing with land”.  He relies on the following passage (in particular the words underlined) in Sihombing and Wilkinson, Hong Kong Conveyancing: Law and Practice (2019), Issue 13,Vol 3H, at §XIV[56]:

“ The Ordinance (see vol 2A, XIV [72]) does not provide for mandatory registration of written documents affecting land; however local practice has imbued registration with a mandatory status: Yeung Shu v Alfred Law & Co [1997] 2 HKC 153. This has resulted probably because section 4, in abrogating the doctrine of notice, has meant that registration is really the only means of protection for a prior equitable interest. Consequently, any document dealing with land is capable of supporting a memorialfor registration: see Regulation 6 and see Ngai Kin Lit v To Chai Fook [1997] 3 HKC 749 and see Financial and Investment Services for Asia Ltd v Baik Wha International Trading Co Ltd[1985] HKLR 103 (see vol 2A, XIV [59]). …” (underline added)

44.The above passage appears in the section discussing the nature of the LRO and explains the genesis of the local practice which gives registration with a mandatory status.  It has nothing to do with the separate question of the principle governing the registrability of an instrument in writing.

45.Mr Chan has not advanced any reason as to why this Court should not apply the principle set out in Anstalt Nybro (at 81) in determiningthe registrability of the 2013 Memorandum.  Applying that principle, it is clear that the 2013 Memorandum is not an instrument which “may create some interest legal or equitable” in the 9 Lots.  It follows that the 2013 Memorandum is not a registrable instrument under the LRO and its pending registration should be removed or vacated.

2011 Writ

46.Mr Leong submits that it is clear from the defendant’s pleaded case that his claim is a personal claim against Wong for breach of the Development Agreement, rather than a claim which affects an interest in land. This is reinforced by the fact that:

(1)  he has not joined the 9 indigenous villagers holding the 9 Lots as defendants in the 2011 Writ;

(2)  the primary relief claimed is for specific performance of the Development Agreement requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots; and

(3)  the defendant did not take any step to register the 2011 Writ against the 9 Lots until 24 October 2016, almost three years after it had been issued.

47.Mr Leong further submits that as Wong has through the Selection Letter exercised his right to select the 9 Houses/Lots as his own, it is no longer open to the defendant to contend that there are 11 Unallocated Houses/Lots or that he is entitled to ²⁄₁₁ of the so-called 11 Unallocated Houses/Lots.

48.In response, Mr Chan submits that there is no legal requirement that the registered owner holding the property must be joined as a party to the lis pendens. The argument does not assist the defendant. As explained in Chow Chiu Tai (at 279), the test for registrability is to ask whether if the lis pendens is not registered in time, the interest affected by it may lose priority to some other interest in the same land if the document relating to that other interest is registered.  Since the whole purpose of registration is to preserve priority of a person who claims to have interest in the land in question, if the registered owner of that land is not named as a defendant in the lis pendens, neither the registration nor any judgment to be given in the lis pendens will bind the registered owner.  This is inconsistent with the very purpose of registration of the lis pendens.  

49.Mr Chan submits that the defendant’s claim in the 2011 Writ for (1) specific performance (prayer (6)) and (2) a declaration that he is entitled to ²⁄₁₁ out of the 11 Unallocated Houses/Lots are clearly a “claim to land or some interest in land is asserted” (prayer (7)) and, therefore, registrable. I disagree.

50.To be registrable, the 2011 Writ must be a lis pendens which “affects an interest in land” (Chow Chiu Tai, p 279).  A claim for specific performance requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots is a personal claim against Wong.  It is not a claim which affects an interest in land.

51.As regards the claim for a declaration that the defendant is entitled to ²⁄₁₁ of the 11 Unallocated Houses/Lots, it is premised on Wong not having made his selection out of the 11 Unallocated Houses/Lots. Mr Chan accepts (rightly) that Wong has the right to choose the 9 Houses/Lots, but contends that he has not made the selection, given that (1) the SPA and the Assignment are “sham”; and (2) Wong has stated in the Letter of Selection that “[f]or the avoidance of doubt, nothing herein contained shall prejudice to Wong’s Amended Defence and Counterclaim filed [in the 2011 Writ].”  As I understand his argument, Mr Chan submitsthat in the Amended Defence and Counterclaim filed by Wong, he disputes the defendant’s claim on, inter alia, the grounds that the Development Agreement is unenforceable by reason of “illegality” and time bar, which is inconsistent with the plaintiff’s case that Wong has selected the 9 Houses/Lots pursuant to the Development Agreement.  Further, in stating that the Selection Letter shall not prejudice his Amended Defence and Counterclaim, Wong has not made his selection unequivocally.

52.I do not think that the argument is well founded for two reasons.

53.First, I accept the plaintiff’s contention that by causing the 9 indigenous villagers to enter into the SPA for the purpose of transferring the 9 Lots to the plaintiff, Wong has in effect made selected the9 Houses/Lots as his own.  Once Wong has exercised his right to select the 9 Houses/Lots as his own, the defendant can only maintain a claim for 40% share in the 2 Houses/Lots.  Indeed, this is what the defendant said Wong should do, as pleaded in §61(c) of the 2017 SOC (see §17(3)(iii) above).  

54.Second, in the evidence filed on behalf of the plaintiff partiesin these proceedings, there is no inconsistency between the plaintiff’s caseand Wong’s case on selection.  In §§41 – 44 of the plaintiff’s 1^st affirmation, she referred to prayer (6) of the 2011 Writ (where the defendant claims specific performance requiring Wong to select 9 houses/lots out of the 11 Unallocated Houses/Lots) and said that Wong had in effect made the selection by (1) causing the 9 indigenous villagers to enter into the Assignment and transfer the 9 Lots to the plaintiff; and (2) sent the Selection Letter to the defendant’s solicitors informing them of his selection of the 9 Houses/Lots, leaving the 2 Houses/Lots to be shared by Wong and the defendant as to 60:40.  In his affirmation filed in these proceedings (at §3) Wong confirmed that the contents of the plaintiff’s affirmations which relate to him are true and correct.  That being the position, Wong has confirmed on oath that he had selected the 9 Houses/Lots as his own.  

55.Given that the defendant has already received the 6 Houses/Lots, and Wong has also selected the 9 Houses/Lots as his own,the defendant can no longer claim to have any interest in the 9 Lots.  At most, the defendant can only claim his share in 40% of the 2 Houses/Lots,which has nothing to do with the 9 Houses/Lots.

56.For the above reasons, I hold that since the date of the SPA, the defendant has ceased to have any claim which affects an interest in the 9 Lots and, as such, the 2011 Writ has ceased to be registrable.

2017 Writ

57.As Mr Leong points out, the 2017 SOC is largely identical to the 2011 ASOC save that the defendant (1) joins the 11 indigenous villagers holding the 11 Unallocated Houses/Lots as the 2^nd to 12^th defendants, and (2) introduces, for the first time, a proprietary claim that the 11 indigenous villagers are holding the 11 Unallocated Houses/Lots “on resulting trust and/or constructive trust for the [defendant] and [Wong]” (at §§56 – 61).

58.The material facts pleaded in support of the trust claim are the same as what have been pleaded in the 2011 ASOC, namely that the 11 Unallocated Houses/Lots were conveyed by Tso to Wong who, in turn, conveyed them to the 11 indigenous villagers for the specific purpose of theDevelopment Agreement, and neither Wong nor the 11 indigenous villagers have paid any consideration for the lots.

59.Mr Leong submits that the defendant’s proprietary claim over the 9 Lots is not made bona fide for the following reasons:

(1)  the defendant’s proprietary claim pleaded in §§56 – 61 of the 2017 SOC “tracks almost word for word” of §39 of the 2011 ASOC, where the defendant asserts that the indigenous villagers are holding the Undeveloped Lots on resulting and/or constructive trust for Tso.  It is not understood how thedefendant could “transplant” his proprietary claim against the Undeveloped Lots, without modification, to his case against the 11 Unallocated Houses/Lots;

(2)  the defendant’s claim with respect to the 11 Unallocated Houses/Lots in the 2017 SOC is plainly inconsistent with his own case in the 2011 ASOC, presumably because in the 2011 ASOC, the defendant contends that Wong is entitled to and should select 9 houses/lots out of the 11 Unallocated Houses/Lots as his own, whereas in the 2017 SOC, the defendant asserts a proprietary claim over the entire 11 Unallocated Houses/Lots;

(3)  the 2017 Writ can only be a “desperate attempt to invent a proprietary claim against the [9 Lots]” so as to register it as a lis pendens against the 9 Lots; and

(4)  the 2017 Writ has never been served on Wong.  In this regard, the plaintiff has put forward objective evidence from the Postmaster General to confirm that the purported service of the 2017 Writ by registered post on 28 April 2017 had failed,and the defendant was notified on 20 May 2017 that the 2017 Writ was unclaimed. Thereafter, the defendant has not attempted to effect service of the 2017 Writ on Wong. The irresistible inference must be that the defendant has no intention to prosecute the 2017 Writ.

60.Mr Chan has not advanced any argument in answer to the first three points.

61.As to the point about service, Mr Chan submits that the 2017 Writ was served by registered post dated 28 April 2017 (through HLC) to Wong’s address stated in the 2011 Writ, and there was no single letter returned by the Post Office.  Wong did not apply to set aside or strike out the 2017 Writ.  I am unable to accept the submissions: 

(1)  The plaintiff has produced a letter issued by Postmaster General dated 24 September 2018, which confirmed that the delivery of the registered post sent by HLC was unsuccessful.

(2)  As the 2017 Writ has never been served on Wong, it is unnecessary for Wong to make any application to set aside or strike out the 2017 Writ.

62.Although Mr Chan submits that the defendant will seek directions for “consolidation” of the 2019 Action, the 2017 Writ and these proceedings, there is no evidence in support of such submission.  As a matter of fact, no such application has been made.

63.I note from the records maintained by the Land Registry that by the time the 2017 Writ was issued (26 April 2017), the defendant wouldhave known from a search at the Land Registry that the plaintiff had alreadyentered into the SPA dated 21 April 2017 in respect of the 9 Lots as the SPA was registered on 25 April 2017. If, upon seeing the SPA, the defendant had any doubt as to whether it constituted a selection of the 9 Lots by Wong, he could easily have written to Wong to seek his confirmation.  This has never been done.  Instead, the defendant chose to issue the 2017 Writ on the next day after the SPA had been registered, and caused it to be registered against the 9 Lots on 28 April 2017.  

64.In the circumstances, I agree with Mr Leong that the defendant has not prosecuted the 2017 Writ bona fide, and the court should order the registration of the 2017 Writ to be vacated.

65.Even if I were wrong in my conclusion that the 2017 Writ has not been prosecuted bona fide, for the reasons stated in §§50 – 54 above, by the time the 2017 Writ was issued, Wong had already selected the 9 Houses/Lots as his own, such that the defendant could only make a claim for 40% of the 2 Houses/Lots.

Summary determination

66.In light of my conclusions on the first four issues, it is obvious that I do not accept Mr Chan’s submissions that the Court should not determine the substantive issues raised in these proceedings summarily. Nothing more needs to be said.

Disposition

67.In §(9) of the Originating Summons, the plaintiff seeks damages on the basis of slander on title.  In his reply, Mr Leong submits, for the first time, that the Court may order an inquiry as to damages.  I do not think it is appropriate to make such an order, given that the plaintiff has not sought any direction for a split trial and there is no evidence on what damages the plaintiff has suffered.

68.In light of my conclusion that the 2013 Memorandum and 2011 Writ are not registrable instruments against the 9 Lots, I make an order in terms of §§(1), (2), (4) and (5) of the Originating Summons.

69.I order the defendant to vacate the registration of the 2017 Writ against the 9 Lots in terms of §(7) of the Originating Summons.

70.As for costs, I make an order nisi that the defendant do pay to the plaintiff the costs of and occasioned by the Originating Summons, to be taxed if not agreed, with certificate for two counsel.

Mr Alan Leong SC and Mr Alfred C P Cheng, instructed by K B Chau & Co., for the plaintiff

Mr Kenneth Chan and Mr Billy Ma, instructed by Hong Lee & Co., for the defendant