Full Gold Development Ltd v. Wong Tsing
Read the full judgment text of DCMP 3389/2022 on BabelCite. This District Court judgment was delivered on 31 March 2023.
1. There are four applications scheduled to be heard together before this court. By Originating Summonses all dated 6 September 2022, the plaintiff(s) in each application seeks an order for sale of the respective land lots pursuant to s 6 of the Partition Ordinance (Cap 352).
Cited by 3 cases · Cites 11 cases
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DCMP 3389/2022, DCMP 3390/2022, DCMP 3391/2022 [2023] HKDC 423 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO 3389 OF 2022 --------------------------------
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-------------------------------- IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO 3390 OF 2022 --------------------------------
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-------------------------------- IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO 3391 OF 2022 --------------------------------
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-------------------------------- IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO 3392 OF 2022 --------------------------------
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----------------------- DECISION ----------------------- Introduction 1.There are four applications scheduled to be heard together before this court. By Originating Summonses all dated 6 September 2022, the plaintiff(s) in each application seeks an order for sale of the respective land lots pursuant to s 6 of the Partition Ordinance (Cap 352). 2.The applications concern four different land lots situated in Peng Chau, a rural island accessible only by ferry in Hong Kong. The land lots concerned are Section B (consists of two separate portions) of Peng Chau Lot No. 184 (DCMP 3389/2022), Section A of Peng Chau Lot No. 339 (DCMP 3390/2022), Peng Chau Lot No. 183 (DCMP 3391/2022), and Section B of Peng Chau Lot No. 182 (DCMP 3392/2022), respectively (collectively referred to as “the land lots”). 3.The land lots are private land situated adjacent to one another and more particularly described in the Lot Index Plan. They are located in the middle of the Peng Chau town center and surrounded by clusters of typical one to three storey village houses in the vicinity. Coupled with other Government lands in the immediate surrounding, they were used as forming parts of the school premises of a public school (Peng Chau Chi Yan Public School), which has ceased operation and been abandoned since 2005. Whilst there remains an abandoned one-storey school building being erected on Lot 182 SB, the other lots are much smaller in size and have basically become vacant lands. 4.The plaintiff(s) in the respective actions (collectively referred to as “the plaintiffs”) are 2/3 registered owner (as a tenant in common) of each of the respective land lots. The defendant is the co-owner (holding 1/3 interest as a tenant in common) of all of the land lots concerned. History of the land lots 5.By a Conveyance of Sale dated 3 September 1953, the defendant Wong Tsing, together with Lam Shu Chun and Yu Yuet Hing, purchased the said land lots from one Cheng Luen Chau, who inherited the land from his father Cheng Sui Cheung. Each of the purchasers became 1/3 registered owners of the land lots since then. 1/3 interest of Lam Shu Chun 6.Lam Shu Chun, being the 1/3 registered owner of the said land lots and having made his Will on 19 June 1977, died on 1 August 1977 due to serious illness. Probate (Letters of Administration with the Will annexed) was granted to his wife Cheung So Lan as executor by Probate Jurisdiction of the High Court (the then Supreme Court) on 10 October 1979. 7.The said Cheung So Lan died intestate on 9 May 2013, leaving part of the estate of Lam Shu Chun unadministered. 8.On 14 December 2016, Letters of Administration with Will annexed de bonis non of the estate of Lam Shu Chun so left unadministered were granted by the High Court to the Administrator Lam Wai Keung. 9.By a Deed of Family Arrangement dated 5 June 2018, all the persons beneficially entitled to the distribution of the estate of Lam Shu Chun have agreed that Lam Wai Keung should be absolutely entitled to the properties of the estate as sole owner. 10.By an Assent dated the same date, the unadministered estate of Lam Shu Chun was vested in Lam Wai Keung as beneficiary. 11.By an Assignment dated 21 December 2018, the plaintiff Full Gold Development Limited (“Full Gold”) purchased the 1/3 interest of Lot 184 SB (DCMP 3389/2022) and Lot 182 SB (DCMP 3392/2022) from the said Lam Wai Keung. 12.By an Assignment dated 28 June 2019, the plaintiff (in DCMP 3390/2022) and 1st plaintiff (in DCMP 3391/2022) Wong Hon Kuen Ken purchased the 1/3 interest of Lot 339 SA (DCMP 3390/2022) and Lot No. 183 (DCMP 3391/2022) from the said Lam Wai Keung. 13.Through purchasing from the said Lam Wai Keung, the plaintiffs have become the 1/3 registered owner of each of the respective land lots since December 2018 and June 2019. 1/3 interest of Yu Yuet Hing 14.Yu Yuet Hing, being another 1/3 registered owners of the said land lots, died intestate on 18 April 1988. 15.On 11 October 1988, Letters of Administration of the estate of Yu Yuet Hing were granted to Yan Ngar Ching, who died on 8 August 2000, leaving part of the estate of Yu Yuet Hing unadministered. 16.On 26 February 2021, Letters of Administration de bonis non of the estate of Yu Yuet Hing deceased so left unadministered were granted by the High Court to Yu Mee Lan being the Administratrix. 17.By an Assignment dated 31 May 2021, the plaintiff Full Gold purchased the said properties from the said Administratrix and has become 1/3 registered owner of Lot No. 184 SB (DCMP 3389/2022) and Lot No. 182 SB (DCMP 3392/2022). 18.By an Assignment dated the same date, the plaintiff Wong Hon Kuen Ken purchased the said properties from the said Administratrix and has become 1/3 registered owner of Lot No. 339 SA (DCMP 3390/2022). 19.By an Assignment dated the same date, the 2nd plaintiff Wong Kai Ho Justin purchased the said properties from the said Administratrix and has become 1/3 registered owner of Lot No. 183 (DCMP 3391/2022). 20.Through purchasing from the said Administratrix, the plaintiffs have acquired additional 1/3 interest and become the 2/3 registered owner of each of the respective land lots since May 2021. 1/3 interest of Wong Tsing 21.The defendant Wong Tsing has remained as the 1/3 registered owner of all of the land lots ever since 1953. The Plaintiffs’ case 22.According to the plaintiffs’ affirmation filed in the respective actions, the plaintiffs say that the land lots are third class agricultural land (Lot 184 SB and Lot 182 SB) and house land (Lot 339 SA and Lot 183) and they all fall within a zone designated for Government, Institution or Community use (G/IC) as per the approved Peng Chau Outline Zoning Plan in December 2013. 23.The Plaintiffs say that they have a plan to apply for permission from the Lands and/or the Planning Department for a change of use and further development with other lands nearby. 24.The plaintiffs say that they, however, do not have 100% of the ownership of the land lots and, without the consent of the defendant for development or change of use, their application will not be considered by the Government. 25.It is also the plaintiffs’ opinion that an order for partition of the land lots is impractical and would not be beneficial to all the registered owners. They say partitioning 1/3 equal shares from each of the land lots would hinder their development plan and would potentially and unnecessarily reduce the value of the development. 26.On 12 April 2022, the plaintiff had informed the defendant by way of a solicitors’ letter that the plaintiffs proposed to purchase the defendant’s 1/3 share of each of the land lots. But there was no reply from the defendant. 27.Shortly afterwards, the plaintiffs engaged a Chartered Surveyor (Merryshine Surveyors Limited) in May 2022 to prepare a valuation report for the current open market value of the land lots. The values of the land lots, based on the current approved use and nature of the land, were ascertained as follows:
28.In view of the valuation report, the plaintiffs had made another offer of 1/3 of the current market values by way of a solicitors’ letter to the defendant on 2 August 2022. Again, there was no reply. 29.The plaintiffs, in such circumstances, decided to take out the Originating Summonses to seek an order for sale against the defendant. They are, say the plaintiffs, prepared to offer to purchase in a private sale or to bid at an auction for the purchase of the land lots. 30.According to the Notices of Appointment to Hear Originating Summons, the plaintiffs ask for the following orders and directions:
31.The plaintiffs say that they have to seek an order for sale from the court so that the defendant’s interest is preserved while the plaintiffs’ plan for development will not be delayed. 32.At this juncture, I think that it seems there is some fundamental dissonance of the application itself as the reasons provided by the plaintiffs do not sound legitimate to me. I shall explain in the section of Order for sale below. Issues 33.Counsel for the plaintiffs, Ms Cheng, submits that there are two issues for the court to determine, namely:
Service 34.Ms Cheng submits that according to the various Affirmations of Service, the Originating Summonses and the supporting affirmations were served on the defendant on 13 September 2022 by way of posting up (though not required) and by inserting the same through the respective letter boxes situated at each of the land lots. It is submitted that the defendant was duly served under O 10 r 1(2) of the RDC. 35.O 10 r 1(2) & (3) provide as follows:
36.The plaintiffs rely on the fact that as revealed from the land search record, the defendant remains as 1/3 registered owner of the land lots throughout the years. It was said that the plaintiffs had made some enquiries in the local area but still could not locate the defendant. They said the address of the land lots is the only address of the defendant known to the plaintiffs and thus that was the last known address of the defendant. 37.Through counsel submission, the plaintiffs confirmed to the court that, as shown in the photos produced in the hearing bundles, there are indeed 4 letter boxes at the school gate, each being marked the lot number of the land lots concerned, and that the land lots were enclosed by the boundary wall of the school. It is submitted that the service was effected by inserting through those letter boxes. 38.Initially, the court has some concerns about whether the plaintiffs’ service could bring to the notice of the defendant. The confusion stems from the plaintiffs’ counsel submission that on the one hand the defendant could not be located and on the other hand it was in the opinion of the plaintiffs’ solicitors that the service would come to the knowledge of the defendant within 7 days (r 1(3)). It is well established that opinion held by the plaintiffs must be a reasonably held one (Law Kwok Hung v Tse Ping Man [1994] 4 HKC 397 per Yuen J (as she then was). 39.I think I shall be grateful if I may borrow three case authorities here. 40.In Hung Lai Wan v Ngo Sam (unreported, HCA 3189/2016, 2 February 2017), the plaintiff applied for default judgment for a declaration of possessory title over the property. The plaintiff pleaded that she had exclusive possession of the property for many years, but she served the writ on the defendant by inserting it through the letter box of the property and claimed that the writ would come to the defendant’s knowledge within 7 days. The court (Deputy High Court Judge Anson Wong SC) rejected the argument and held that the presumption that the writ would come to the knowledge of the defendant was rebuttable and there were no reasonable grounds for the opinion that the writ would come to the defendant’s knowledge when the plaintiff was in exclusive possession of the property. It was held that the service was irregular. 41.However, our present case is not like Hung Lai Wan. In our case, the plaintiffs are not claiming exclusive possession of the land lots. The plaintiffs are co-owners with the defendant. There is no evidence to indicate that the defendant would have no access to the letter boxes there. In the absence of any evidence to the contrary, the plaintiffs here can reasonably rely on the presumption for deemed good service under Order 10 rule 1(2). 42.In Lau Ying Sau Sailing and Tang Suet Fan Sinly v Wan Kwan Cheung (unreported, DCCJ 1405/2010, 7 March 2012), Deputy District Judge Grace Chan (as she then was) summarized the current position of law in relation to “usual or last known address” under O 10 r 1(2) as follows:-
(See also AIA International Ltd v Cheng Chung Sing (unreported, DCCJ 804/2016, 18 May 2017) and Hou Tsun Tat v Wong Wai Chung (unreported, DCPI 96, 439 and 476/2015, 31 October 2017), in which HH Judge MK Liu both adopted the above summary of law). 43.Further, in Hou Tsun Tat v Wong Wai Chung (supra), the court held that as revealed from the land search that the defendant was the owner of the property, it followed naturally that the address of that property could be regarded as a usual or last known address of the defendant. At para 19, HH Judge MK Liu said:
44.Having considered the above authorities, I believe the answer to my question earlier is that the service can be deemed effective under Order 10 rule 1(2) while the defendant cannot be located. Other than the deemed service by sending by registered post and by inserting through the letter box, another example of good service can be the service by way of substituted service ordered by the court. There is no inconsistency with the fact that the whereabouts of the defendant remained unknown. 45.The essence is a location where the person may be reached or where contact or communication in written form, such as by letter, could be established (Lau Ying Sau Sailing (supra)). In this case, it is the address of the land lots and there were the letter boxes. 46.Where service has been properly effected under Order 10 rule 1(2), the burden is on the defendant to show that the proceedings were not brought to his notice (New York Life Insurance Worldwide Ltd v Chan Wai Man Anthony (unreported, DCCJ 3843/2008, 29 March 2011), per HH Judge Wilson Chan (as he then was)). 47.I am satisfied that the services were effective. Order for sale 48.The legal principles applicable to proceedings under the Partition Ordinance were succinctly summarised in Wong Chun Kei v Poon Vai Ching [2007] 1 HKLRD 825 by Recorder Fok SC (as he then was), at paras 18-19:
49.It is also pertinent to note that under s.2 of the Partition Ordinance, the court retains the discretion to make an order for partition, make an order for sale, or refuse to make any order:
50.Further, the plaintiffs, being a tenant in common of the respective land lots, may institute proceedings by way of an action for sale under s.3 of the Ordinance. 51.The plaintiffs have filed certificates confirming that no acknowledgment of service has been received from the defendant. The defendant did not appear in the hearing. The plaintiffs invite the court to proceed to hear and determine the matters in the defendant’s absence. 52.I am satisfied that the defendant has failed to acknowledge service of the Originating Summonses (RDC O 28 r 6). 53.It is clear that the court has power at the hearing of an originating summons under RDC O 28 r 4 to dispose of the action summarily where there are no triable issues, and that such application can be heard in chambers. It is also clear that although the matter is uncontested due to the defendant’s absence, the burden remains on the plaintiffs to satisfy the court that they are entitled to a summary judgment on the relief sought in the Originating Summonses (Choy Pui Lam v Estate of Chan Yim Mei (unreported, HCMP 313/2015, 30 March 2017)). 54.Under the Rules of the Partition Ordinance (s.3(2)), the documents relating to the current proceedings have been served on the Director of Lands, who expressed no particular comments on the applications. 55.Jurisdiction of the District Court to hear the matters under the Partition Ordinance is conferred by s.9 of the said Ordinance. 56.I am satisfied that all the procedures have been complied with, and I allow the hearing to proceed in the defendant’s absence. The plaintiffs’ submissions 57.Counsel for the plaintiffs submits that partition is not an option for the plaintiffs for the reasons that the land lots are too small and it would be impractical to partition 1/3 shares from each of the land lots. It would hinder their development plan and reduce the redevelopment value. 58.It is submitted that an order for sale is justified for the following reasons:
Analysis 59.I think it might be convenient first to point out here that, in general, parties entered into the co-ownership either due to succession or inheritance from a family member (as in the case Chung Chi Cheung cited by the plaintiffs), or some other relationship such as joint investment or cohabitation. A more unusual situation would be like Fan Kiu, who acquired her portion of land by adverse possession and became a co-owner with the defendants. In any given situation, they seldom anticipated that the co-ownership could be a shackle at the time when they became co-owners. 60.However, successors may have different plans and joint partners will have a change of heart. 61.Then it comes to the assistance of the Partition Ordinance if there is a genuine need. 62.In Fan Kiu, it was perfectly legitimate for the plaintiff to plan to demolish the house in which the plaintiff and her family were residing and construct a New Territories Exempted House. No hardship would be suffered by the defendants under such order for partition. As to “the public interest that to encourage the proper maintenance, improvement and development of land which might otherwise be left under-utilised for a long time,” I respectfully agree with the learned deputy judge that it is the rationale behind the doctrine of adverse possession, and if necessary, such public interest consideration can be extended, as suggested, to an application for an order for partition. 63.However, both Fan Kiu and Chung Chi Cheung cited by the plaintiffs’ counsel would not advance her arguments any further, for the simple reason that those cases were found on the basis that there was no other recourse and there was a genuine need for the order for partition. Suffice it to say that those cases are distinguishable on facts from our present case. Here, the plaintiffs only seek an order for sale. And the plaintiffs must persuade the court that the conditions set out in Wong Chun Kei have been satisfied. 64.In Hong Kong, the ownership of private land is protected by the Basic Law (Article 6):
65.There is no forced sale of land in Hong Kong due to a lack of utilisation. At most, the Government will only try to offer an incentive for exchange or by way of resumption of land. 66.Therefore, there is no mandatory development of land (other than the Government’s resumption) or anything like a penalty being imposed on the owner of any unutilised land or absentee owner (subject to any claim for adverse possession by others if the paper owner was being dispossessed). 67.It is true that there is the Land (Compulsory Sale for Redevelopment Ordinance) (Cap 545) for compulsory sale. However, it is a different legislative scheme as it takes into account not only the minimum threshold of shares of ownership but also the public safety concern due to the age and the state of repair of the existing development. It is not applicable to the plaintiffs’ case. 68.Accordingly, I find there is nothing to compel the defendant to apply for a change of use (from G/IC to Residential) for the land lots as the plaintiffs complained. 69.For the same reason, I do not find any legal basis for the plaintiffs to ask for a forced sale against the defendant’s co-owner interest if the defendant simply did not give his consent for the change of use or development. 70.Having considered the plaintiffs’ case as a whole, what I see from the plaintiffs’ proposal is nothing more than: (1) to discard the value of the existing school building on the land though it was abandoned by the school; (2) to turn the defendant’s 1/3 interest in the land into a sum of money (a liquidated sum) for the defendant without his consent; (3) the money to be collected by the defendant would be equivalent to the open market value based on the current G/IC use of the land; and (4) after all, there is no guarantee (as acknowledged by the plaintiffs) that the Government would approve the plaintiffs’ application for the change of use. 71.In my view, the plaintiffs’ plan is so conceited without paying any regard to the will or interest of the defendant. The plaintiffs probably strategically acquired a portion of the interest in the land. They probably think that the court would lend a hand in helping them to obtain the remaining portion. But the hard fact is not. Obtaining the defendant’s consent is vital. In any event, the Partition Ordinance should never be used as a stairway to complete an acquisition of ownership. 72.In Wong Chun Kei, Recorder Fok SC expressly stated that a co-owner has a basic right to rid himself of the shackles of co-ownership and, if he has no other remedy, ask for an order for partition or sale. I would like to emphasize the qualifying phase “if he has no other remedy,” which was specifically added by the learned Recorder in approving the legal principles. 73.That is, the court would consider whether the co-owners have any other remedy before granting an order for partition or sale. In fact, it runs naturally that the court would first examine whether it is legitimate in the circumstance for one or some of the co-owners in seeking remedy, ie whether there is any genuine need for remedy between the co-owners. Under the Partition Ordinance (as opposed to the counterpart in the UK), the court retains the discretion not to grant any order for sale if it does not see fit (s.6(3)(a)) and has jurisdiction to refuse to make any order (s.2). 74.Indeed, having a “basic right” does not mean it is “as of right.” The co-owners can have the basic right to free themselves from co-ownership and they can resolve to a partition or a sale by consent or by any other arrangements. But if they need to come to the court to invoke the Partition Ordinance, they have to satisfy the court that “there is no other remedy.” They cannot expect to have an order for partition or sale “as of right” since the court is given the power to refuse to make an order (Wong Chun Kei, at paras 15-16). 75.In the case authorities cited by the plaintiffs, there were situations where it would be impracticable to ask the plaintiff to sell his portion of interest at a discount to a third party. Unless there is an order for partition, the plaintiff will not be able to exercise his basic right to free himself from the shackles of co-ownership. They had no other recourse. However, it is of note that the requirement for an order for sale is different. Only if there is no other remedy, coupled with the fact that the order for partition is impracticable and the order for sale would be beneficial to all the co-owners, and will not result in very great hardship to one co-owner, then the court would make an order for sale. 76.In our present case, that route (the selling of their interest in the open market) had been shown possible when the plaintiffs purchased their shares not long ago. If the plaintiffs were able to enter into the transactions with a discount two or three years ago, they would be able to sell them at a discount in turn. If they had entered into the transactions at a premium, then that was a commercial decision and the risk that they were willing to take at the time. They cannot complain that there is no other remedy but ask for an order for sale from the court. The plaintiffs can reverse (or more exactly, rectify) their investment decision by liquidating their positions in the open market. They are not in a situation in which they are forced to remain unwilling co-owners of the land lots. They are not locked into the co-ownership. 77.Further, it is the fact that the plaintiffs’ entering into the co-ownership was self-induced. They knew the land lots were in a G/IC zone. They knew the defendant was 1/3 owner enjoying the land for community use (previously used for serving as a public school). The defendant has not caused any harm or disturbance, and he is but an innocent party. On the other hand, the plaintiffs have shown no suffering or any prejudice, other than their outright development plan. 78.I am unable to accept the plaintiffs’ submission that the land lots had been left vacant and wasted for years before the plaintiffs became the co-owners. In my judgment, the brief co-owner status of the plaintiffs is a significant factor to take into account. I do not think that the plaintiffs should be in a position to comment on the uses of the land lots prior becoming co-owners in December 2018. Although there is information that the school has ceased operation since 2005, there is no evidence before the court that the plaintiffs have any knowledge of the uses of the land lots for the period between 2005 and 2018. There are several photos provided to the court, which apparently showed that the school is, at least, still maintained in good condition. The school might have been or could be used for other community activities. I find that there was no legitimate ground for any remedy. Certainly, this court would not allow the plaintiffs to turn the defendant’s interest in land unjustifiably into a sum of money by way of sale in the defendant’s absence. 79.In summary, this court does not find that there is no other remedy available to the plaintiffs to free themselves from the co-ownership. 80.Secondly, I do not find that an order for sale would be beneficial to all co-owner parties. There are two reasons:
81.Balancing the interest of the defendant against the plaintiffs, I decline to order a sale of the land lots and refuse to make any order under the Partition Ordinance. Disposition 82.For the above reasons, the Originating Summonses must be dismissed. I dismiss the plaintiffs’ applications, in all actions with no order as to costs.
DCMP 3389/2022, DCMP 3390/2022, DCMP 3391/2022 & DCMP 3392/2022 Ms Evelyn Cheng, instructed by CLY Lawyers, for the plaintiff(s) DCMP 3389/2022, DCMP 3390/2022, DCMP 3391/2022 & DCMP 3392/2022 The defendant was not represented and did not appear | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Other judgments that cite this case
Further hearings and rulings under DCMP 3389/2022