Tsang Kwok Wai and Another v. Tsang Kam Wah and Another

HCA 2772/2001

[2025] HKCFI 4988

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2772 OF 2001

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D E C I S I O N

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A.  INTRODUCTION

1.The parties are the registered owners of the 3-storey building erected on DD 224 of Lot No. 430 in the District of Sai Kung, Hang Hau Village, New Territories, Hong Kong (“the Property”).

2.On 6 November 2003, DHCJ Gill made an order for sale of the Property pursuant to section 6 of the Partition Ordinance, Cap. 352, either by private treaty within 4 months from the date of the order, or failing that by way of public auction (“the 2003 Order”), at a reserve price of HK$4,800,000 or such amount as agreed among the parties. After payment out of certain monies, the net proceeds of sale were to be divided amongst the parties in accordance with their share in the Property.

3.The Defendants now ask for directions for sale of the Property at a higher reserve price.

B.  FACTUAL BACKGROUND

4.On 19 January 1989, by a New Grant No. 7502, the late Tsang Hing and the Defendants became the registered owners of the Land at DD 224 of Lot No. 430 in the District of Sai Kung, Hang Hau Village (“the Land”) as tenants in common, whereby each of them was entitled to a one-third share of the interest in the Land. Pursuant to the New Grant, a 3-storey semi-detached village house was erected on the Land.

5.Tsang Hing passed away on 9 February 1990 and his sons, the Plaintiffs, succeeded to his 1/3 share, with his surviving wife (“Madam Yung”) acting as trustee until the Plaintiffs were to attain the age of majority.

6.The Property is currently co-owned by the parties as follows:

Party	Share
1st Plaintiff	1/6
2nd Plaintiff	1/6
1st Defendant	1/3
2nd Defendant	1/3

7.According to the Defendants, the current occupation status of the Property is as follows:

Floor	Occupant
Ground Floor	Abandoned by former tenant, and hence left vacant
First Floor	1st and 2nd Plaintiffs
Second Floor	2nd Defendant

8.A dispute arose between the Plaintiffs, Madam Yung, and the Defendants in relation to the possession and occupation of the Building, and the rent received from leasing out the ground floor of the building.

9.In 2001, the Plaintiffs commenced these proceedings for reliefs under the Partition Ordinance. It ended up with the 2003 Order.

10.The parties appear to have been corresponding, latest in December 2021, over renovation of the Property before sale.

11.On 27 June 2025, the Defendants filed the present Summons for the Property to be sold, with some variations to the terms of the 2003 Order.

C.  SERVICE

12.The Summons was initially served (a) by post on 9-11 September 2025 on the solicitors on record for the Plaintiffs, ie Chan, Evans, Chung & To; and (b) by post to the last known addresses of the Plaintiffs abbreviated in the affirmations of service as the “Ming Tak Address” in Tseung Kwan O and the “Hang Hau Address”, ie the Property.

13.I do not regard service on the Plaintiffs’ solicitors to be valid when the action had been laid to rest for about 3 ½ years before the Summons was issued. The Plaintiffs’ solicitors were unable to contact the Plaintiffs and eventually came off the record on 11 September 2025.

14.Nor do I regard service at the last known addresses to be valid. The Plaintiffs were and are plainly not resident at the Property and the Summons could not have come to their notice. The service by post on 9 September 2025 to the 1^st Plaintiff at the Ming Tak Address was returned on 3 October 2025 marked “no such person”.

15.As directed by this Court on 16 September, 2025, the Defendants have attempted service on the Plaintiffs by the following modes:

(1)  By attempting personal service on the Plaintiffs at the 2 last known addresses.

(2)  By making enquiries with the village head of Hang Hau Village, a villager, Defendants’ cousins, nephew and extended family members as to the whereabouts of the Plaintiffs but to no avail.

(3)  By telephone calls to the Defendants’ last known numbers. On 17 September 2025, the call of the Defendants’ solicitor to the 2^nd Plaintiff was picked up by a person purporting to be the 2^nd Plaintiff, who hung up the phone upon learning that the call was about court proceedings. These were followed up by phone messages to the last known telephone numbers of the Defendants on 16 October 2025, but the Defendants have not replied.

(4)  Searches for the names “Tsang Kwok Wai” and “Tsang Kwok Fung” with the Probate Registry were done, but all search results related to persons who passed away on or before 30 November 2021. Those persons were unlikely to be the Plaintiffs, since the Plaintiffs were still mailing signed letters to the Defendants’ solicitors on 7 December 2021.

(5)  Advertisement of the Summons in a local newspaper.

16.I am satisfied that the Defendants have used their best endeavours to try and locate the Plaintiffs but to no avail. The Defendants have complied with my order dated 16 September 2025 as regards service. In the premises, I proceed to determine the Summons in the absence of the Defendants.

D.  ORDER

17.It is appropriate to have the Property sold and allow the parties to part their ways given that more than 20 years have elapsed since the dispute was first litigated.

18.There are 4 major differences in the proposed orders from the 2003 Order.

19.Firstly, the basis on which the Property is to be sold are different.

Under the 2003 Order	Defendants’ proposal
(§2) The Property be sold as a whole block with 2/F (and rooftop) and 1/F on a vacant possession basis and the G/F on existing tenancy basis, if any	The Property be sold as a whole block with the G/F on an “as is” basis without the need for vacant possession; 1/F and 2/F be sold on a vacant possession basis

Given that the tenant had departed and the Defendants are not aware of the condition of G/F, I accept the Defendants’ proposal.

20.Secondly, the manner of sale is different. The Defendants propose an extension of time to effect the sale, that the Defendants’ solicitors (“YSLP”) have carriage of the sale with a reserve price of HK8,900,000, based on an updated valuation report. An auctioneer has been identified. The fee of the auction shall be fixed at 1% of the final sale price (in addition to disbursements that may be charged by the auctioneer), instead of leaving the parties to agree on the auctioneer and his fee among themselves. This will have the effect of varying §§3, 3a, 4 and 5 under the 2003 Order.

21.I am satisfied that the value of the Property has increased over the years. HK$8,900,000 is an updated forced sale value after considering comparables. I am satisfied that the terms of auction proposed by the Defendants are reasonable.

22.Thirdly, handling of purchase price is different. It is proposed that the purchase price of the Property shall be paid by the purchaser to YSLP in the first instance. YSLP shall, upon receipt of the purchase price in full, apply the proceeds of sale in the following order and priority:

(a)  In the discharge of any outstanding government rent, taxes, rates and/or other outgoings due and outstanding affecting the Property;

(b)  In payment of (i) the auction fee, (ii) conveyancing legal costs (limited to a maximum amount of HK$25,000) and disbursements, and (iii) all other reasonable expenses payable or incurred in connection with the sale;

(c)  In discharge of (i) the Certificate of Charge in favour of the Director of Legal Aid dated 13 March 2014 registered over the Property by memorial no. 14031300670015 against the 1^st Plaintiff’s interest over the Property, and (ii) the Certificate of Charge in favour of the Director of Legal Aid dated 16 April 2014 registered over the Property by memorial no. 14042200560016 against the 1^st Plaintiff’s interest over the Property (collectively, “DLA First Charges”) out of the purchase monies to be paid by the purchaser to YSLP in respect of the purchase; and

(d)  Subject to the discharge of the DLA First Charges which shall be paid out of the 1^st and 2^nd Plaintiffs’ respective share of the net proceeds only, the net proceeds be distributed in accordance with paragraph 9 of the DHCJ Gill Order.

23.As the Plaintiffs’ solicitors have come off the record, it is appropriate for YSLP to be in charge of the sale. The proposals in the preceding paragraph sets out in detail the priority in application of the proceeds of sale as contemplated by §9 of the 2003 Order. They also provide for application of the Plaintiffs’ share of the net proceeds in discharge of the DLA First Charge. They are reasonable and I grant the same. This means a change to the opening words of §9 of the 2003 Order.

24.Fourthly, with regard to execution of conveyancing documents, it is proposed that the 1^st and 2^nd Plaintiffs and the 1^st and 2^nd Defendants shall, within 14 days of the posting of any written request by YSLP, sign and execute such agreement(s), conveyance(s), assignment(s), and all other necessary document(s) (if any, including but not limited to the application for the discharge of the DLA First Charges) to effect the sale of the Property. This is a reasonable requirement to ensure that the sale and purchase is completed expeditiously.

25.For the purpose of serving the written request, I direct that it be done by posting to the Ming Tak Address and by telephone messages to the 1^st and 2^nd Plaintiffs, respectively, at their last known telephone numbers.

26.It is not necessary to serve by post to the Property where the Plaintiffs would not be found.

27.The Defendants ask for an order pursuant to section 25A of the High Court Ordinance, Cap 4, such that in the event that the 1^st and 2^nd Plaintiffs fail to act in accordance with paragraph 24 above, upon filing of an affirmation verifying the non-compliance, Mr Lau Yue Sum, partner of YSLP, be authorized to sign and execute necessary document(s) on behalf of the Plaintiffs to convey the Property to the purchaser or purchasers.

28.I decline to give this order until a proper application is made under s.25A of the High Court Ordinance after there is non-compliance with the order: Pang Man Ming v Pang Wan Li Yan [2020] 4 HKLRD 864, §§16-19.

29.There shall be liberty to apply for further directions, if necessary, as to the manner of the sale of the Property and generally.

30.For the reasons given, I grant an order in terms of the draft order as amended in accordance with paragraphs 19-25 and 29 above.

31.Both parties are responsible for the delay in effecting a sale. The Plaintiffs need to bear responsibility for not being responsive since 2021. However, the obtaining of this order, with an upward revision of reserve price benefits both parties. The costs of the updated valuation report and part of the costs of the Summons should be shared. I therefore make an order nisi that 80% of the costs of and incidental to this Summons, including all hearings, be paid by the Plaintiffs to the Defendants, summarily assessed at $80,000.

The 1^st and 2^nd Plaintiffs were not represented and did not appear

Mr Lau Yue Sum, of Y.S. Lau & Partners, for the 1^st and 2^nd Defendants