Fong Ka Lok v. Emwcsl Finance Ltd

HCMP 2676/2024

[2025] HKCFI 2635

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2676 OF 2024

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J U D G M E N T

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Introduction

1.In this application by way of an Originating Summons dated 10 December 2024 (“the Originating Summons”), the Plaintiff seeks, inter alia, the following reliefs: -

(a)  A declaration that the Plaintiff has fully settled all monies owed to the Defendant under a legal charge (with Memorial No. 21011501480019) dated 23 December 2020 (“the Legal Charge”) in respect of the property known as Flat A on 3^rd Floor (with flat roofs adjacent thereto), Residence 228, No. 230 Fuk Wing Street, Kowloon (“the Property”); and

(b)  The Legal Charge, which is pending registration in the Land Registry, be vacated.

2.The Defendant failed to file any Acknowledgement of Service or any evidence to oppose the Plaintiff’s Originating Summons which was heard on 18 February 2025 by this Court with Judgment reserved to be handed down. This is the Court’s Judgment.

The factual background[1]

3.The Plaintiff is and was at all material times the sole registered owner of the Property. The Defendant was at all material times a limited company carrying on business as a money lender.

4.On 23 December 2020, the Plaintiff as a borrower entered into the Legal Charge with the Defendant as the lender, charging the Property as security for the repayment of all monies owed to the Defendant. On 14 January 2021, the Legal Charge was lodged for registration at the Land Registry; but for reasons unknown to the Plaintiff, it was not registered and was listed under the heading of “Deeds Pending Registration” with the remark of “Registration Withheld”.

5.In any event, by 17 March 2021, the Plaintiff had fully settled all monies owed to the Defendant pursuant to the Legal Charge. On 18 March 2021, the Defendant issued a receipt to the Plaintiff (“the Receipt”) stating that the Defendant had received the repayment of principal and interests in the total sum of HK$459,066 from the Plaintiff and that the Plaintiff had fully repaid all the monies owed to the Defendant. Notwithstanding the issuance of the Receipt, the Defendant has, to date, failed to remove the Legal Charge from the Land Registry, which is still being held pending registration.

6.The Plaintiff has taken various attempts to locate the Defendant, including to contact the Defendant’s former solicitors and its company secretary, but to no avail. The Plaintiff has discovered that the Money Lender’s Licence of the Defendant already expired on 15 January 2024. According to the Defendant’s Annual Return dated 2 February 2024, its registered address was at Room 05, 11/F., Prosper Commercial Building, 9 Yin Chong Street, Mongkok, Kowloon, Hong Kong (“the Registered Address”). The Plaintiff found out that that the Defendant had ceased all operations and its office at the Registered Address had turned into a party room. There was no longer any staff at the office acting for the Defendant to handle any enquiries.

7.By two letters dated 25 September 2024 and 3 October 2024 respectively, the Plaintiff through his solicitors wrote to the Land Registry seeking a solution to cancel the purported registration of the Legal Charge. Eventually, the Land Registry wrote back to the Plaintiff’s solicitors, indicating that the Land Registrar has no power to cancel the registration unless the request is made by the lodging party or with that party’s consent, or the Land Registrar is ordered by the Court to do so.

8.In these circumstances, the Plaintiff seeks an Order from this Court that the Legal Charge be vacated.

Discussions

9.The Plaintiff’s Originating Summons (with the prescribed form of Acknowledgement of Service) and the Plaintiff’s first affirmation in support[2] were served on the Defendant and left at the Registered Address on 11 December 2024.[3] Section 827 of the Companies Ordinance (Cap. 622) provides: “A document may be served on a company by leaving it at, or sending it by post to, the company’s registered office.” There is no need to establish the company had actual notice of the writ (or the originating summons) where service is effected under section 827.[4]

10.The Notice of Appointment to hear the Originating Summons dated 3 January 2025 was posted to the Defendant at the Registered Address on 3 January 2025.[5] The Plaintiff’s second affirmation in support of the Originating Summons[6] was also posted to the Registered Address on 7 January 2025.[7]

11.On 12 February 2025, the Plaintiff’s Skeleton Submissions and the bundle for the hearing of the Originating Summons scheduled for 18 February 2025 were also served on the Defendant by being left at the Registered Address.[8]

12.I am satisfied on the evidence that there was proper service on the Defendant of the Originating Summons, the supporting affirmations and the Notice of Appointment to hear the Originating Summons. Despite such service of the court documents, the Defendant has failed to file any Acknowledgement of Service or any evidence to oppose the Originating Summons. The Plaintiff thus invites this Court to summarily dispose of the Plaintiff’s application under Order 28 rule 4(1) of the Rules of the High Court (Cap. 4A). Although the matter is uncontested, the burden remains on the Plaintiff to satisfy the Court that he is entitled to summary judgment on the reliefs sought in the Originating Summons.

13.Under Order 28 rule 6, where the Defendant has failed to acknowledge service of the originating summons, it is open to the Court to hear the application. In the circumstances of this case, the Court finds it just and expedient to do so.

14.On the face of the two supporting affirmations, the Plaintiff is, prima facie, entitled to summary judgment. It is then up to the Defendant to show that it does have a defence or defences to the claim.[9] None has been shown in the present case.

15.In particular, the Defendant already issued the Receipt on 18 March 2021, expressly stating that the Plaintiff had fully settled all the loan monies. In that event, under Clause 4 of the Legal Charge, the Defendant “shall… execute a receipt or otherwise discharge the security hereby constituted.” Whilst the Legal Charge has not been formally registered, it remains listed under the heading of “Deeds Pending Registration” with the remark of “Registration Withheld”.

16.In Shineland Corporation Limited v Gladford Limited, HCMP 1972/2017 (unreported and dated 30 November 2017), Recorder Stewart Wong SC (as he then was) observed at §11:-

“... Such a record still has the effect of informing potential buyers, or the actual purchaser in this case, that someone was trying or had tried to register a notice against the Properties, and had the effect of putting them off ... The effect of a deed pending registration is practically the same as that of a registered deed.”

17.In Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594, Deputy Judge A. Cheung (as he then was) held at §16:-

“The so-called instrument of transfer has not been lodged for registration as a lis pendens. It was lodged for registration as an instrument affecting land. In those circumstances, the statutory provisions in section 19 of the Land Registration Ordinance (Cap. 128) relating to the Court's jurisdiction to vacate a lis pendens do not apply. However, as is demonstrated by the many authorities very helpfully cited to me by Mr Tracy this morning (including Heywood v. BDC Properties Ltd [1964] 2 All ER 702 and Thian's Plastics Industrial Co. Ltd v. Tin's Chemical Industrial Co. Ltd [1970] HKLR 498, [1971] HKLR 249), this Court does have the inherent jurisdiction to vacate the registration or purported registration of any instrument in the Land Registry which does not affect or no longer affects land. For the same reason, I am fully satisfied that this Court does have the jurisdiction, in an appropriate case, to grant a declaration in relation to the ‘registrability’, as it were, of any document which has been lodged for registration with the Land Registry even though it was not lodged for registration as a lis pendens.”

18.In that case, the Court went on to make a declaration that the instrument of transfer in question was “not registrable” when it was found to be not affecting or no longer affecting land.

19.As submitted by Ms Wong, Counsel for the Plaintiff, the Legal Charge in the present case is an instrument that no longer affects the Property given that all liabilities owed to the Defendant have already been discharged by the Plaintiff as evidenced by the Receipt issued by the Defendant. As aforementioned, under Clause 4 of the Legal Charge, the Defendant is indeed obliged to “discharge the security”. In those circumstances, the Court is satisfied that the Legal Charge no longer affects the Property after the date of the Receipt and that the Court should make the declaration and grant such reliefs as sought by the Plaintiff.

Judgment

20.For the above reasons, I find in favour of the Plaintiff and give the following reliefs:

(a)  I make a declaration that the Plaintiff has fully settled all monies owed to the Defendant under a legal charge (with Memorial No. 21011501480019) dated 23 December 2020 (“the Legal Charge”) in respect of the property known as Flat A on 3^rd Floor (with flat roofs adjacent thereto), Residence 228, No. 230 Fuk Wing Street, Kowloon; and

(b)  I make an order that the Legal Charge (which is pending registration in the Land Registry) be forthwith removed from the register of the Property at the Land Registry, including any reference to its registration as pending and/or being withheld.[10]

21.As Ms Wong indicated at the hearing, the Plaintiff no longer seeks costs for this matter. I therefore make no order as to costs.

Ms Colette Wong, instructed by O Tse & Co., for the Plaintiff

The Defendant, acting in person and absent