Or Pui Kwan v. Sino Bright (H.K.) Ltd

HCMP 757/2021

[2021] HKCFI 2311

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 757 OF 2021

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Before: Hon Anthony Chan J in Chambers

Date of Hearing: 6 August 2021

Date of Judgment: 6 August 2021

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JUDGMENT

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1.There is before the court an ex parte Originating Summons (“OS”) filed by the Applicants on 31 May 2021 for a vesting order in their favour in respect of a “Right of Way” (“ROW”) concerning a landed property known as Nos. 4, 4B, 6 and 6A, High Street, Hong Kong (“Property”).

Background

2.The background facts can be briefly stated.  The Property consists of one building.  It was built on 4 adjoining pieces of land (“Land”).  There are 6 floors in that building (G/F to 5/F), and on each floor there are 4 flats.  In total there are 24 flats, which are referred to hereinbelow as, eg, G/F of No 4.

3.It appears from the evidence that the Applicants (the 2^nd Applicant was described as a “related company” of the 1^st Applicant) are property developers. All but one of the units in the Property had been acquired by the 1^st Applicant between April 2017 and March 2021.  The remaining unit (3/F of No 6A) was acquired by the 2^nd Applicant in December 2017. 

4.The evidence filed by the Applicant is that the Property will be demolished and redeveloped.

5.The Property was originally owned by two gentlemen, Mr Wu and Mr Yim (“1^st Vendors”).  They started selling off the flats in the Property from August 1966 and the last unit was sold in March 1970. 

6.It was said in the affirmation of the 1^st Applicant (“Affirmation”) that after completion of the purchase of the units, he perused the very first assignments and discovered that there is a “defect” in that the ROW was not mentioned in the same.  It is not clear precisely when the discovery was made.  On one interpretation, the first discovery could have been made in 2017 after the first acquisition.

The ROW

7.The Block Plans annexed to the first assignments showed that the Land is of a rectangular shape (aerial view).  The Floor Plans showed that the Property is of a similar shape.  I assume that the front of the Property faces High Street.  This was confirmed at the hearing by Ms Lai, who appeared for the Applicants.  On the Block Plans, there was a narrow strip (coloured indigo) which ran along the left and all along the back of the Land/Property.  It was marked “RIGHT OF WAY”.

8.Save that it seemed to be suggested that the ROW is within the boundary of and formed part of the Land[1], there is no evidence such as photographs to demonstrate what the ROW is.  It may be inferred from the Block Plan that the ROW is passageway leading from the entrance to the Property at High Street to the back of the building, and access to the 4 flats on each floor can be gained along the way. This was also confirmed by Ms Lai at the hearing.

9.The first assignments did not in their bodies refer to the ROW.  However, they referred to the Vendors :

“hereby assign unto the Purchaser ALL THAT one equal undivided twenty fourth part or share of and in ALL THOSE portions of [the Land] … and of and in the messuages erections and buildings thereon now known as [the Property] TOGETHER with the exclusive right to the use occupation and enjoyment of ALL THAT the [flat being sold] … And all other rights privileges easements and appurtenances thereto belonging or appertaining or therewith at any time used held occupied or enjoyed And all the estate right title interest property claim and demand of the Vendors therein and thereto … EXCEPTING AND RECERVING unto the Vendors or their assigns and the owners and occupiers for the time being of the other equal undivided twenty third parts or shares of and in the said premises the exclusive right to the use occupation and enjoyment of the roof, flat-roofs and all other self-contained portions or flats of the said building save and except that portion to which the exclusive right to the use occupation and enjoyment is hereby assigned and the entrance staircase corridors and landings intended for use in common between the owners and occupiers …”.

[emphasis added]

10.A right of way within a multi-storey building is a quasi-easement: see Jumbo King Ltd v Faithful Properties Ltd, CFA, [1999] 4 HKC 707, at 727D-E.  It is quite possible that the references to easements and corridors were related to the ROW.   

11.The first disposal of the flats by the 1^st Vendors involved two units, 4/F of No 4 and 4/F of No 4B.  They were both assigned on 10 August 1966.  On that day, the parties also entered into a Deed of Mutual Covenant (“DMC”).  Clause 2 of the DMC provided that :

“Each of the parties hereto and his licensees shall in common with his co-owners of the whole of the said premises and their licensees have access to and be entitled to use the entrance hall staircase and landings the common passages … of and in the said building for all purposes connected with the proper use and enjoyment of the floor in the said building of which he is entitled to the exclusive use occupation and enjoyment and for the purposes of ingress to and egress from such floor.”

[emphasis added]

12.Although there was no reference to the ROW in the DMC, it might well be covered by the reference to common passages. 

Vesting order

13.The Applicants ask of a vesting order pursuant to s 45(b)(iii) or, in the alternative, s 45(g) of the Trustee Ordinance, Cap 29 to vest all the legal and beneficial estate, interest and right of the ROW in the Applicants as co-owners of the Property. 

14.Section 45(b)(iii) and (g) of the Ordinance provide that :

“(b) where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person–

…

(iii) cannot be found, or, being a corporation, has been dissolved;

…

(g) where land or any interest therein is vested in a trustee whether by way of mortgage or otherwise, and it appears to the court to be expedient,

the Court may make an order (in this Ordinance called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct: ...”.

15.It is clear from these provisions that the underpinning of a vesting order is that the trustee had an interest in the land in question.  Here, it was said that the 1^st Vendors are in the position of trustees vis-à-vis the Applicants in relation to the ROW. 

16.The Applicants’ evidence is that the 1^st Vendors can no longer be found.  Mr Wu had passed away in January 2005.  A letter sent to his son was returned as he no longer lived at the address, and it is unclear who the personal representative of the deceased gentleman is.  The building at which Mr Yim used to reside did not exist anymore, and he cannot be traced.

17.Even assuming that the Applicants had met the requirement of establishing that the 1^st Vendors cannot be found, I am troubled as to why it is said that the 1^st Vendors had retained any interest in the ROW.  Indeed, I can find no real answer on this fundamental issue in the Applicants’ submissions. 

18.First and foremost, there was no exception or reservation created by the first assignments in favour of the 1^st Vendors in relation to the ROW.

19.Pursuant to s 16 of the Conveyancing and Property Ordinance, Cap 219 :

“Unless the contrary intention is expressed in the assignment, an assignment shall operate to assign, with the land, all rights, interests, privileges, easements or appurtenances in, over, belonging or appertaining to that land …”.

20.The wordings of the assignments were to the same effect: see para 9 above. 

21.Secondly, by the last of the first assignments in respect of 5/F of No 4B dated 2 March 1970, the 1^st Vendors had disposed of their remaining one equal undivided twenty-fourth part or share in the Property[2].  It is difficult to see why it can be said that they had any interest left in the ROW.

22.Thirdly, the wordings of the assignments and the DMC suggested that the ROW was a common area which provided an access and egress to be enjoyed by all the owners. 

23.Finally, the law provides that: “merely taking an assignment of undivided shares without more, would entitled each to the use and possession of the whole of the building by virtue of their co-ownership of the property as tenants in common”: see Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd (2008) 11 HKCFAR 403, [19]. 

24.In the premises, it appears that the application for vesting order is misconceived.

Risk of challenge to title

25.Ms Lai submitted that the Applicants may apply for a building mortgage and there is a risk, albeit not a serious one, that their title to the Property may be challenged.  The point is of little relevance to this vesting order application.  In any case, I see little merit in it. 

26.In addition to the analysis set out in paras 18 to 23 above, all of the flats had been resold since the first assignments (in some cases, many times) and mortgages had been obtained over the years.  For instance, G/F of No 4 had been resold 7 times (including the acquisition by the 1^st Applicant) and a number of mortgages over the property had been obtained.  The overwhelming inference is that the title to that property had been scrutinized by many conveyancing solicitors and none of them had taken any issue with its propriety.  That must include the Applicants’ own conveyancing solicitors. 

27.With respect, any risk of successful challenge to the Applicants’ title to the Property based on the ROW may be regarded as “fanciful”: see Goodtex Land Co Ltd v Lung Kwong Emporium Co Ltd [1993] 1 HKC 645, at 648 F, per Godfrey J (as he then was).

28.Further, the evidence is that the Property will be pulled down in favour of a new development.  Therefore, in due course, the existing assignments would become irrelevant. 

Ex parte application

29.One final word on appropriate procedure, notwithstanding the cases cited to the court by Ms Lai where vesting order was applied and obtained on ex parte application, I agree with dicta of Chung J in Fook Tai Investment Co Ltd v Secretary for Justice [2013] 4 HKLRD 102, [12], that the Department of Justice should normally be made a respondent to such application. 

Conclusion

30.For these reasons, the OS is dismissed. 

Ms Annie Lai, instructed by So, Lung & Associates, for the Applicants