Tang Kwok Cheung and Tang Chai Woh As Managers of Tang King Wo Tso v. City Wave Development Ltd

HCMP 2176/2021

[2022] HKCFI 1985

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2176 OF 2021

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BETWEEN

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Before:  Deputy High Court Judge Man SC in Chambers

Date of written submissions from the Plaintiff:  25 February & 11 March 2022

Date of Judgment:  30 June 2022

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J U D G M E N T

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I.  INTRODUCTION

1.This is my decision on an Originating Summons Tang King Wo Tso (“P”)  filed on 22 December 2021 (“OS”). It concerns an agreement dated 9 May 1998 (“Agreement”)  for the sale and purchase of a piece of land registered at the North New Territories Land Registry as Lot No. 119 in Demarcation District No. 38 (“Land”).

2.In the OS, P seeks:

(1)  An order that the Agreement be vacated from the Land Registry; and

(2)  An order (which I understand to be a declaration)  that the Agreement is no longer registrable under the Land Registration Ordinance (Cap. 128)  (“LRO”).

II.  BACKGROUND

3.P is a customary trust registered under s. 15 of the New Territories Ordinance (Cap. 97).

4.In 1998, City Wave Development Limited (“D”)  approached P’s managers – Tang Kwok Cheung and Tang Chai Woh – asking to buy the Land. D was then a limited company established in Hong Kong.

5.The parties entered into the Agreement. Under the Agreement, P would sell to D the Land for HK$910,404. The Agreement was registered on the Land Registry on 11 June 1998.

6.In around July 1998, P was told that D wanted to delay the Agreement’s completion. P decided to give D some time, as there was then no other potential buyer.

7.In around August 1999, P was told that D decided to rescind the Agreement. Consequently, the Agreement was never completed.

8.P’s then solicitors then told P that the parties would enter a cancellation agreement to cancel the Agreement registered at the Land Registry. This was never followed up on.

9.In around 2020, a new buyer approached P, asking to buy the Land. To prepare for that transaction, P’s new solicitors – Messrs. Y. C. Chow & Co. (“YCC”)  – conducted a land search on the Land. That land search led to the following discoveries:

(1)  the Agreement remains registered in the Land Registry; and

(2)  D was dissolved by striking off on 22 November 2002.

10.The evidence also shows that there was a strikingly similar situation regarding the neighbouring village:

(1)  Tang Tsung Fuk Tso entered an agreement dated 12 June 1998 to sell land in the vicinity of the Land to D. Similarly, that agreement was registered at the Land Registry. D decided to rescind the agreement, and the agreement was never completed. No cancellation agreement was ever signed;

(2)  In 2020, a new buyer approached that Tso’s managers to buy that Tso’s land;

(3)  The managers then realised the previous agreement with D was still registered at the Land Registry, and that D had been dissolved by striking off on 22 November 2002.

11.Tang Tsung Fuk Tso wanted inter alia an order that its agreement with D be vacated from the Land Registry. To that end:

(1)  It took out HCMP 1432/2020 to restore D to the Companies Register under s. 767(1)(b)  of the Companies Ordinance (Cap. 622). An order to that effect was granted on 18 November 2020;

(2)  It took out HCMP 354/2021 to seek the said order for vacation. On 7 September 2021, DHCJ Paul Lam SC granted an order that that agreement with D be vacated from the Land Registry, and declared that that agreement is no longer registrable under the LRO.

III.  PRELIMINARY ISSUE: NO ACKNOWLEDGEMENT OF SERVICE

12.A defendant must acknowledge service within 14 days of being served with an originating summons: see O. 12 r. 5 and O. 12 r. 9 Rules of the High Court (Cap. 4A)  (“RHC”); see also Hong Kong Civil Procedure 2022 §§12/5/1 and 12/9/1.

13.On 29 December 2021, one Ng Kim Man (“Ng”), a member of YCC, left at D’s registered office the OS, a copy of Tang Kwok Cheung’s Affirmation and its exhibits filed on 22 December 2021, and YCC’s cover letter dated 29 December 2021.

14.D has not filed an acknowledgement of service to date.

15.P submitted that according to O. 28 r. 6 RHC, I can nonetheless entertain this application if I am satisfied D has failed to acknowledge service of the OS. I agree: see Choy Pui Lam v Estate of Chan Yim Mei (HCMP 313/2015, 30.3.2017)  at §6 per DHCJ Paul Lam SC. I am also satisfied that D has failed to acknowledge service.

16.P also says that according to O. 28 r. 4 RHC, I can dispose of these proceedings summarily. In my judgment, since D has filed no evidence, I can indeed so dispose of these proceedings if P proves it is entitled to summary judgment: Choy Pui Lam at §7 per DHCJ Paul Lam SC: see also Hong Kong Civil Procedure at §28/4/2.

17.With that in mind, I turn to address whether P can prove it is entitled to summary judgment.

IV.  ENTITLEMENT TO SUMMARY JUDGMENT

18.As mentioned, P seeks:

(1)  An order that the Agreement be vacated from the Land Registry; and

(2)  A declaration that the Agreement is no longer registrable under the LRO.

19.Deputy Judge Cheung (as he then was)  has explained at §16 Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594 that this court has inherent jurisdiction to vacate the registration of any instrument in the Land Registry which does not affect land, and declare that that instrument is not registrable under the LRO.

20.Further, DHCJ Paul Lam SC has explained at §§11-16 Tang Kwok Chueng and Tang Fuk Wo as Managers of Tang Tsung Fuk Tso v City Wave Development Limited [2021] HKCFI 2695 that an agreement for the sale and purchase of land does not affect the land if there is no real possibility of the court ordering that it be specifically performed: see also SH Goo and A. Lee, Land Law in Hong Kong, 4^th edn., 2015, §7.86.

21.In this case, there is no real possibility of the court ordering that the Agreement be specifically performed, because D clearly will not and cannot seek specific performance:

(1)  D indicated that it wanted to rescind the Agreement as early as in 1999, and has never since indicated it wished to complete the Agreement.  I do not believe it can or will insist on completion now;

(2)  D was dissolved many years ago. It was only recently restored by the managers of Tang Tsung Fuk Tso so that they could apply for relief against it.

22.In the premises, I hold that the Agreement does not affect the Land. Accordingly, I find it appropriate to order that the Agreement’s registration at the Land Registry be vacated, and declare that the Agreement is no longer registrable under the LRO.

V.  CONCLUSION

23.For the above reasons, I make an order in terms of the OS, save that the phrase “An Order” in §(2)  be substituted with the phrase “A Declaration”.

24.I make no order as to costs.

Written submissions by Ms Angela Gwilt and Ms Vivian Lam, instructed by Y C Chow & Co, for the plaintiff

The defendant was not represented and did not appear