Feign Larry and Another v. Wan Yung Hing

HCMP 1632/2022

[2023] HKCFI 1791

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1632 OF 2022

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DECISION

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1.This is the Applicants’ ex parte application under s 12A of the Conveyancing and Property Ordinance Cap 219 for an order that the property known as the Remaining Portion of Lot No. 362 in D.D. 2, Mui Wo, Lantau Island (“362/RP”) be upon a payment in be “free from any mortgage interests and be vested in the Applicants absolutely”.

2.S 12A of the Conveyancing and Property Ordinance stipulates that:

“(1) Where land is subject to any encumbrance, whether immediately realizable or payable or not, and the encumbrancer is out of the jurisdiction, cannot be found or is unknown, or if it is uncertain who the encumbrancer is, the court may, if it thinks fit, on the application of the party for the time being entitled to redeem the encumbrance, direct or allow payment into court of a sum of money sufficient to redeem the encumbrance and any interest thereon.

(2) Upon payment into court of the sum referred to in subsection (1), the court may, if it thinks fit, and either after or without any notice to the encumbrancer, as the court thinks fit, declare the land to be free from the encumbrance, and make any order for conveyance or vesting order as appropriate, and give directions for the retention and investment of the sum of money paid into court and for the payment or application of the income thereof, and for the payment of an amount certified by the court to be the reasonable costs of the applicant in making the application, such amount to be deducted from the sum of money paid into court.

(3) On application by the encumbrancer or any person entitled to the money or fund in court, the court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.

(4) In this section, court (法院) means the Court of First Instance unless the party to the application submits to the jurisdiction of the District Court.”

3.As explained by Lam J (as Lam PJ then was) in Re Cheung Chi Wang & Another [2002] 1 HKLRD 409 and Man Chi Kan v Man Tsak Lun [2003] 2 HKLRD 489, and as summarised by this Court in Tang King Wo Tso v Tang Mau Wa [2020] HKCFI 1971, an application under s 12A comes in stages.  The first stage is for the party “for the time being entitled to redeem the encumbrance” to show that “the encumbrancer is out of the jurisdiction, cannot be found or is unknown, or if it is uncertain who the encumbrancer is”, and upon proof of that to seek direction or approval from the court to make a payment in.  The court has the discretion to decide and direct whether notice should be given to the encumbrancer; (2) If payment in is approved and made, and the notice if directed given, the court may declare the land to be free from the encumbrance; (3) The third stage may or may not come, which is the application by the encumbrancer (or any person entitled to the money in court) for payment out.

4.I have read the affirmation of Feign Larry.  I find that:

(a)  362/RP is subject to an encumbrance, namely the Succession to the Mortgage Interest of Section A of Lot 362 (“362/A”) and 362/RP of Wan Loi-fat by and in favour of Wan Yung-hing (the “Mortgagee”), as registered by Memorial No. IS88044 (the “Encumbrance”);

(b)  The Applicants are registered owners of 362/RP.  They are entitled to redeem the Encumbrance;

(c)  Despite extensive efforts, the Mortgagee or his heir could not be found;

(d)  The proposed payment in sum of HK$100 is reasonable.  The Encumbrance was discharged in respect of 362/A – see Memorial No. IS88045.  The consideration was only HK$1.  I note the evidence that 362/A is larger in size than 362/RP.

5.By reasons of the aforesaid, I make an order in terms of the order proposed by Ms Sezen Chong, counsel for the Applicants, as amended, to the following effects:

(a)  Leave be granted to the Applicants to pay into Court within 14 days a sum of $100, being a sum sufficient to redeem the Encumbrance and any interest thereon.

(b)  Within 7 days after the payment into Court is made, the Applicants do advertise in a widely circulated local Chinese newspaper a notice making known this Order and the fact of payment having been made into Court pursuant to this Order, and stating that any person interested in the Encumbrance and/or the payment aforesaid may apply within 28 days to be joined as a defendant to these proceedings;

(c)  The Applicants may after the lapse of no less than 35 days from the publication of the advertisement make a paper application to this Court pursuant to s 12A(2) of the Conveyancing and Property Ordinance for a declaration that the Properties be free from the Encumbrance;

(d)  The service of this Order be otherwise dispensed with;

(e)  There be no order as to costs.

6.I add at this stage that I have serious reservations as to whether it is appropriate for any declaration be made, in addition to the one discussed above, that the 362/RP “be vested in the Applicants absolutely”, as the Applicants are seeking in the Originating Summons.  But I will deal with the precise terms of the declaration when the application at the 2^nd stage is made, as envisaged above.

Ms Sezen Chong, instructed by ST Poon & Wong, for the Applicants

The Mortgagee was not represented and did not appear