Re Lam Muk Choi

HCMP 1455/2025

[2025] HKCFI 6124

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1455 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 No. 1783 in Demarcation District No. 93 (“the Property”).

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 Property was originally acquired by Lam Kam Fu and Lam Mi Luk by way of Block Government Lease in 1905. They held the Property in equal shares. Upon Lam Kam Fu’s death, Lam Mi Luk succeeded to his share of the Property. On 20 January 1949, upon Lam Mi Luk’s death, LMC, his grandnephew and only surviving relative, became the administrator of his estate on 22 August 2024. He acquired ownership of the Property by an Assent dated 25 March 2025.

4.The Property has 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, Lot No. 1783 is subject to a mortgage in favour of Lam Kwang Tsun (“the Mortgagee”) for a consideration of HK$4.

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 redemptions 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 either 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 Property 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 Property, 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 Kwang Tsun, 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 or Lam Kwang Tsun, male and female. There were no records of death in respect of Lam Kwang Tsun as either a male or female person.

12.On the basis of the above information, I am satisfied that LMC has used reasonable steps to find Lam Kwang Tsun but he cannot be found. It is thus appropriate to make an order for payment in.

E. PAYMENT IN OF A REDEMPTION SUM

13.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).

14.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.

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

16.On this basis, the sum that should be paid into Count to discharge the Mortgage is: HK$4 + HK$4 x 10% x 120 years = HK$52.

F. CONCLUSION

17.I make an order on the following terms:

(1) Leave be granted to LMC to pay into Court a sum of HK$52, 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 Property be free from the Mortgage.

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