Re Lam Muk Choi

HCMP 1454/2025

[2025] HKCFI 4801

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1454 OF 2025

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J U D G M E N T

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A. INTRODUCTION

1.The Applicant, Mr. Lam Muk Choi (“LMC”), is the registered owner under the Block Government Lease for Lot Nos. 2254, 2255, and 2950 in Demarcation District No. 93 (“the Properties”).

2.This is his ex-parte application under Section 12A of the Conveyancing and Property Ordinance Cap. 219 (“CPO”) for an order discharging a stale mortgage on the Properties (“the Mortgage”) upon payment in of a sum.

B. FACTUAL BACKGROUND

3.The Properties were originally owned by Lam San Mui. Upon Lam San Mui’s death on 15 February 1940, LMC, his grandnephew and only surviving relative, became the administrator of his estate on 22 August 2024. He acquired ownership of the Properties by an Assent dated 25 March 2025.

4.The Properties have been used by LMC and his family members to the exclusion of others and free from any disturbance, interference, claims, or demands from the Mortgagee.

5.According to the Schedule of Government Lessees annexed to the Block Government Lease relating to Demarcation District No.93, the Properties are subject to a mortgage in favour of Lam Ping Tat (“the Mortgagee”) for a consideration of HK$25.

C. LEGAL PRINCIPLES

6.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.”

7.A three-stage test for such redemption was set out by HH Judge MK Liu in Fung Chi Hon [2018] HKDC 1080, §9, citing the leading authority of Re Cheung Chi Wang & Another [2002] 1 HKLRD 409, DHCJ Lam (as he then was):

(1) The first stage of an application under s 12A is to obtain the direction or approval of the court regarding payment into court under s 12A. Before an applicant can ask the court to exercise its discretion under s 12A, he has to establish that the encumbrancer could not be found, or is unknown. The applicant must take reasonable steps to find the encumbrancer and place the evidence of his efforts before the court.

(2) After money is paid into court, the second stage is for the court to consider whether to exercise its discretion under s 12A to declare the land free from an encumbrance. The court has discretion as to whether notice should be given to the encumbrancer. In practice, such notice often has to be given by advertisement in a newspaper.

(3) The matter would come back to the court at the third stage, when the encumbrancer, or any person entitled to the money, applies to the court for payment under s 12A(3).

D. FIRST STAGE

8.LMC, the title owner, is entitled to redeem the Mortgage. He has taken a number of steps to locate the Mortgagee, his relatives and/or descendants. LMC has made enquiries with his own family members, who confirmed that:

(1) They have not heard of the Mortgagee and do not know of his existence or whereabouts;

(2) They have never received any information from anyone about the Mortgagee;

(3) To the best of their knowledge and understanding, they have not at any time been deprived of possession of the Properties by the Mortgagee;

(4) They have never been told anything about the Mortgage; and

(5) The Mortgagee has never demanded repayment of the principal sum or interest or any part of the Mortgage.

9.Furthermore, according to the villagers of Ma Tso Lung, a village situated nearby the Properties, they have no information relating to the Mortgagee, his relatives and/or descendants, and do not know of his existence or whereabouts.

10.LMC’s solicitors conducted a search at the Probate Registry for grant of letters of administration or probate issued in respect of Lam Ping Tat, but no such records were found.

11.LMC’s solicitors also conducted a search at the Births and Deaths General Registry Office to see if there were any records relating to the death of Lam Ping Tat, male and female. There was a death record for Lam Ping Tat, male, who passed away on 16 October 2022 at the age of 71 years. As he was born in 1951, he could not be the mortgagee who granted the Mortgage in 1905.

12.On the basis of the above information, I am satisfied that LMC has used reasonable steps to find Lam Ping Tat but he cannot be found.

13.This Court noticed that the Block Government Lease shows the Mortgage to be for $25.00 “c.m.” to Lam Ping Tat “c.c.m.”. Leung Kin & Co, solicitors for the Applicant, suggests (without any legal authority) that “c.m.” stands for “charge by memorandum” whereas “c.c.m.” stands for “equitable charge by memorandum”. Leung Kin & Co made enquiries concerning this mortgage endorsement with the Land Registry and Lands Department by letters dated 27 and 28 October 2025, respectively. By a letter dated 13 November 2025, the District Lands Office confirmed that it did not have records of those mortgage endorsements and was not in a position to comment on the matter.

14.I am satisfied that the Applicant has taken reasonable steps to ascertain the meaning of the 2 terms but to no avail. Further, the Land Registry’s own record made remarks stating that “AS STATED IN THE BLOCK GOVT. LEASE THE LOT IS SUBJECT TO MORTGAGE IN FAVOUR OF LAM PING TAT AND THE CONSIDERATION IS PART OF $25” without any reference to “c.m.” or “c.c.m.”. It is unlikely that the Mortgage contained any onerous terms that need to be addressed.

15.It is thus appropriate to make an order for payment in.

E. PAYMENT IN OF A REDEMPTION SUM

16.In determining the amount to be paid into court, the court may take into account an additional amount on account of the contingency of further costs, expenses and interests: Fung Chi Hon, §9(5).

17.LMC originally proposed that the redemption sums be calculated on the basis of the current interest rate applicable to judgment debts. However, the mortgage interest rate has fluctuated significantly over the past 50 years and had at times reached close to 20%, in the 1980s to 1990s, before stabilizing at a single digit rate since about 1999. The judgment rate is thus not the best reflection of the mortgage interest rate.

18.Upon suggestion of the Court, LMC agreed that the redemption sums should be increased to 10% per annum.

19.On this basis, the sum that should be paid into Count to discharge the Mortgage is: HK$25 + HK$25 x 10% x 120 years = HK$325.

F. CONCLUSION

20.I make an order on the following terms:

(1) Leave be granted to LMC to pay into Court a sum of HK$325, being a sum sufficient to redeem the Mortgage and any interest thereon.

(2) Within 7 days after the payment into Court is made, LMC 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 Mortgage and/or the payment aforesaid may apply within 14 days to be joined as a defendant to these proceedings.

(3) The Applicant may after the lapse of no less than 21 days from the publication of the advertisement make a paper application pursuant to section 12A(2) of the Conveyancing and Property Ordinance (Cap. 219) for a declaration that the Properties be free from the Mortgage.

Ms M Leung, of Leung Kin & Co., for the Applicant