Re Instinct Investment Ltd and To Wai Nam for A Declaration Under Section 12a of the Conveyancing and Property Ordinance, Cap. 219

HCMP 1242/2025

[2025] HKCFI 4760

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1242 OF 2025

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D E C I S I O N

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1.By an ex parte originating summons dated 25 July 2025, the Applicants apply under section 12A of the Conveyancing and Property Ordinance (Cap 219) (“CPO”) for an order that the Property be free from the encumbrance constituted by the Mortgage upon the Applicants’ payment into court of such sum of money as the court deems fit.

2.It is well-established that there are three stages to an application under section 12A of the CPO. This hearing is only concerned with the first stage of the section 12A application.

3.At the first stage, the applicant should establish the matters under section 12A(1), and obtain the direction or approval of the court to make a payment into court sufficient to redeem the encumbrance and any interest thereon. See Re Cheung Chi Wang [2002] 1 HKLRD 409 at [10].

4.Section 12A(1) of the CPO provides that “[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”.

5.Having considered the evidence before the court, I am satisfied that the Applicants have established the various matters under section 12A(1) of the CPO.

(1)  The Property is subject to the Mortgage, which is an encumbrance in relation to land and has not been discharged.

(2)  The Mortgage is made in favour of a person known as Ho Tai Lung (“the Mortgagee”). Attempts have been made on behalf of the Applicants to find the Mortgagee, including (a) conducting a search at the Birth and Deaths Registry to ascertain whether the Mortgagee is still alive, but no relevant record was found, (b) conducting a search at the Probate Registry to ascertain whether any probate or letters of administration had been granted in relation to the Mortgagee, but no such grant was found, (c) writing to the District Lands Office, Tai Po, the Land Registry and Sai Kung North Rural Committee requesting information about the Mortgagee, but none of them had any information, and (d) making inquiries into the Mortgagee through the villagers of the village where the Property is situated, but no relevant information was obtained. I accept that the Applicants have taken reasonable steps to locate the Mortgagee but that he cannot be found.

(3)  The Applicants are the registered owners of the Property and are entitled to redeem the Mortgage.

6.In relation to the sum of money sufficient to redeem the encumbrance and any interest thereon, the Applicants point out that the principal of the Mortgage is stated to be HK$35 and no interest rate is stated in the extract from the Block Government Lease. I agree that it is appropriate for the Applicants to adopt a notional annual interest rate of 20%: Man Chi Kan v Man Tsak Lun [2003] 2 HKLRD 489 at [10]. This means that the total interest for 120 years (from 1905) on HK$35 would amount to HK$840. Accordingly, the total sum required to redeem the Mortgage would be HK$875.

7.In the circumstances, I make the following directions:

(1)  Leave be given to the Applicants to pay HK$875 into court to redeem the Mortgage and any interest thereon.

(2)  Within 7 days after the payment into court is made, the Applicants should advertise in a widely circulated local Chinese newspaper a notice (a) making known this order and the fact that payment into court has been made pursuant to this order, and (b) stating that any person interested in the Mortgage and/or the payment into court may apply within 28 days to be joined as a respondent to these proceedings.

(3)  The Applicants may, after the lapse of no less than 35 days from the publication of the advertisement, make a paper application to the court pursuant to section 12A(2) of the CPO for a declaration that the Property is free from the encumbrance constituted by the Mortgage.

8.I make no order as to costs.

Mr Raymond Hung, of Dickman L.T. Chan & Co., for the Applicants