Sun Hung Kai Credit Ltd v. Lam Lai Wah Lindy

HCMP 472/2025

[2026] HKCFI 2686

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 472 OF 2025

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JUDGMENT

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A. Introduction

1.By originating summons dated 27 March 2025, the Plaintiff seeks to vacate the registration of the Defendant’s notice of application for ancillary relief under FCMC 917/2022 (the “Form A”) in the Land Registry against Flat 15, 3^rd Floor, Block B, Lung Yan Court (the “Property”). 

B.     Material Background

B1.    The Parties and the Property

2.The Plaintiff is a licensed money lender. 

3.Mr Mak Chi Ming (“Mr Mak”) is the registered owner of the Property.  

4.The Defendant was the wife of Mr Mak. 

5.The Property is the former matrimonial home of Mr Mak and the Defendant.

B2.    The Loan Agreement and the Second Mortgage

6.On 15 July 2020, the Plaintiff lent a sum of HK$800,000 to Mr Mak pursuant to a loan agreement (the “Loan Agreement”). 

7.The indebtedness under the Loan Agreement was secured by a second mortgage (the “Second Mortgage”) over the Property^[1], which Mr Mak executed in favour of the Plaintiff on 15 July 2020. 

B3.    DCCJ 4174/2021

8.In breach of the terms of the Loan Agreement, Mr Mak failed to repay the indebtedness owed to the Plaintiff. 

9.Thus, on 31 August 2021, the Plaintiff commenced DCCJ 4174/2021 against Mr Mak seeking, inter alios, monetary judgment and vacant possession of the Property. 

10.On 2 November 2021, the Plaintiff took out a summons^[2] seeking to enter final judgment against Mr Mak. 

11.The Defendant admitted that:-

(1)     As early as 9 November 2021, she was aware of the Plaintiff’s application for final judgment against Mr Mak under the aforesaid summons taken out on 2 November 2021. 

(2)     She had a quarrel with Mr Mak, and Mr Mak indicated his intention to divorce. 

(3)     On 23 November 2021, she became aware of the notice to occupants dated 2 November 2021, which was issued by the Plaintiff’s former solicitors and posted at the entrance door of the Property.  In this notice, it was stated that (i) an action (ie DCCJ 4174/2021) was commenced against Mr Mak seeking vacant possession of the Property; and (ii) if any occupant of the Property intends to oppose the action, he/she can apply to the court to be joined as a defendant.

(4)     Since 9 November 2021, she had sought legal advice.  She wanted to join DCCJ 4174/2021 as a party.  However, her legal team was pessimistic about the prospect of contesting the Plaintiff’s claims. 

(5)     Thus, she did not contest DCCJ 4174/2021 eventually.

12.In the circumstances:-

(1)     The Plaintiff’s claims in DCCJ 4174/2021 were neither opposed by the Defendant nor Mr Mak. 

(2)     On 6 January 2022, Master Isabella Chu of the District Court entered final judgment against Mr Mak.  He was ordered to, inter alios, (i) pay the Plaintiff a sum of HK$879,921.96 together with interest and (ii) deliver vacant possession of the Property to the Plaintiff within 28 days. 

B4.    Subsequent Events

13.Whilst the Defendant did not contest the Plaintiff’s claims in DCCJ 4174/2021, having sought further legal advice on 28 December 2021, the Defendant commenced divorce proceedings against Mr Mak under FCMC 917/2022. 

14.On 29 April 2022, the Defendant registered the Form A under FCMC 917/2022 with the Land Registry. 

15.Meanwhile, pursuant to the final judgment in DCCJ 4174/2021, the Plaintiff sought vacant possession of Property via the bailiff’s assistance. 

16.The Defendant refused to render cooperation. 

17.However, on 13 June 2022, the Plaintiff, with the assistance of the bailiff, managed to recover vacant possession of the Property. 

18.On 20 June 2022, upon the Defendant’s request, the Plaintiff allowed her to return to the Property to retrieve her personal belongings. 

19.During the period from 5 July 2022 to 8 November 2022, the Plaintiff attempted to sell the Property through 3 auctions.  However, on each occasion, no bid was received. 

20.According to the auctioneer, the registration of the Form A with the Land Registry deterred interested buyers from placing bids. 

21.In the circumstances, the Plaintiff requested the Defendant to vacant the registration of the Form A. 

22.The Defendant refused. 

23.Curiously, it does not appear that the Defendant opposed the sale of the Property outright.  As stated in the solicitors’ letter dated 10 August 2022 issued on behalf of the Defendant:-

“We are given to understand that [the Plaintiff] will proceed to the auction (as scheduled today at 3pm) to [sell] the Property/Matrimonial home. If there is any interested purchaser, we trust your client will sell it at / within the reasonable market value.”

C.      Legal Principles

24.Section 19 of the Land Registration Ordinance (Cap 128) provides that:-

“The court or judge before whom any property sought to be bound is in litigation, may on the determination of the lis pendens, or during the pendency thereof, where the said court or judge is satisfied that the litigation is not prosecuted bona fide, or for other good cause shown, make an order for the vacating of the registration in the Land Registry of such lis pendens without the consent of the party who registered it, and may direct the party on whose behalf the registration was made to pay all the costs and expenses occasioned by the registration or the vacating thereof, including the costs of the application to vacate, or may make such other order as to such costs or any of them as to the said court or judge may seem just.” (emphasis added)

25.In Join Win Holdings Ltd v City Target Ltd & Anor (CACV 190/2015, 23 November 2015) at para 2.7, Cheung JA pointed out that:-

“The Court may order vacation of a lis pendens under section 19 of LRO if it is satisfied that ‘the litigation is not prosecuted bona fide, or for other good cause shown’. In deciding whether an instrument is wrongly registered, the Court has to consider whether the instrument is in respect of an interest which affected the property in question.”

26.In Ho Yau-kong v Ho Kwai-ying & Ors [1991] 1 HKLR 649 at 652G-H, Bokhary J (as Bokhary PJ then was) stated:-

“The formula “other good cause shown” in s.19 is unrestricted by any words of the statute.  It seems to me that the court may, and should, approach it by reference to what they normally do when dealing with interlocutory relief, subject to this.  The position of somebody with a lis penden which he or she can register is stronger than that of someone seeking or seeking to maintain such relief.  First of all, the registration may be made without reference to a court and without the burden of having first to make out a case.  Secondly, I think it is right to be even more reluctant to vacate a registration than to refuse or discharge an injunction which would have similar effect.  This is my approach here.”

D.      Deliberation

27.The Defendant raised 2 substantive grounds to oppose the Plaintiff’s application herein:-

(1)     First, she alleged that she has 50% beneficial interest in the Property, and the Plaintiff has constructive knowledge in respect thereof. 

(2)     Second, she relies on her claims for ancillary relief against Mr Mak in FCMC 917/2022.  She says that she intends to seek an order that the interest in 3 properties (including the subject Property) be transferred to her. 

28.For the following reasons, I am of the view that none of the grounds relied on by the Defendant is tenable. 

Alleged Beneficial Interest in the Property

29.Si Tou Choi Kam v Wealth Credit Ltd [2018] 4 HKC 247 is a pertinent decision.  In that case:-

(1)     A husband and a wife were registered owners of a property.  The husband was indebted to a judgment creditor, who obtained charging orders against the property.  The wife commenced an action by originating summons and sought a declaration that the husband’s interests in the property were held on trust for her sole benefit.  Although the judgment creditor was served with a notice, he did not participate in the proceedings.  Upon obtaining a declaration that she was the sole beneficial owner of the property, the wife sought to discharge the charging orders (see paras 2 to 4).  The question before the court was whether the declaration in question was binding on the judgment creditor. 

(2)     Whilst Cheung CJHC (as Cheung CJ then was) held that the declaration granted by the court under the originating summons proceedings was a judgment in personam, rather than a judgment in rem (see paras 19 to 21), His Lordship held that the judgment creditor was, by reason of his unjustifiable inaction, estopped from disputing the wife’s beneficial interests in the property (see paras 27 to 39).  In particular, His Lordship stated:-

“27. …In Nana Ofori Atta II v Nana Abu Bonsra II [1958] AC 95, 101 (PC), Lord Denning, giving the judgment of the Judicial Committee, pointed out:

“The general rule of law undoubtedly is that no person is to be adversely affected by a judgment in an action to which he was not a party, because of the injustice of deciding an issue against him in his absence. But this general rule admits of two exceptions: one is that a person who is in privity with the parties, a ‘privy’ as he is called, is bound equally with the parties, in which case he is estopped by res judicata: the other is that a person may have so acted as to preclude himself from challenging the judgment, in which case he is estopped by his conduct.” (emphasis added)

28. Elaborating on estoppel by conduct, his Lordship referred to a passage from the judgment of Lord Penzance in Wytcherley v Andrews (1871) LR 2 P & M 327, 328:

“There is a practice in this court, by which any person having an interest may make himself a party to the suit by intervening; and it was because of the existence of that practice that the judges of the Prerogative Court held, that if a person, knowing what was passing, was content to stand by and see his battle fought by somebody else in the same interest, he should be bound by the result, and not be allowed to re‑open the case. That principle is founded on justice and common sense, and is acted upon in courts of equity, where, if the persons interested are too numerous to be all made parties to the suit, one or two of the class are allowed to represent them; and if it appears to the court that everything has been done bona fide in the interests of the parties seeking to disturb the arrangement, it will not allow the matter to be re‑opened.” (emphasis added)

30.The aforesaid legal principles are sometimes referred to as the doctrine of “estoppel by standing by” or the doctrine of “estoppel by silence, inaction, or acquiescence”.  In Mo Ying v Brillex Development Ltd & Anor [2015] 2 HKLRD 985 at para 8.2, Cheung JA stated:-

“Ms Eu relies on proprietary estoppel by reason of the failure of the wife to speak up and she submits that the cases on this topic includes reference to acquiescence, waiver etc. Ms Eu has summarized the relevant principles in this area which I would gratefully adopt:

1) An estoppel by silence, inaction or acquiescence arises where ‘a reasonable man would expect the person against whom the estoppel is raised, acting honestly and responsibly, to bring the true facts to the attention of the other party known to him to be under a mistake as to their respective rights and obligations’ and this has been approved as the general principle underlying estoppel by acquiescence’: see Spencer Bower on the Law Relating to Estoppel by Representation (4th Ed) paragraph III.4.3, at page 48, citing Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890, 903F (per Lord Wilberforce). See also Lee Bing Cheung v Secretary for Justice (HCA 1092/2010, 21/2/2013) paragraphs 40-45 (DHCJ Marlene Ng).

2) A duty to speak, such as to found an estoppel on silence will arise in circumstances:

(1) ‘[w]here a person, having a title or right to property of any kind, perceives that another person is innocently, and ignorant, conducting himself with reference to the property in a manner inconsistent with such right or rights’: see Spencer Bower paragraph III.4.4(1);

(2) ‘[w]here an owner becomes aware that someone is attempting to dispose of his property’, and in such circumstances ‘he is bound to assert his rights and, if he fails to do so, he may be estopped against the disponee’. ‘His silence may be a representation either that he has no title or that the person dealing with the property has his authority’ see Handley on Estoppel by Conduct and Election paragraph 3-012; or

(3) ‘[w]hen anything in order to a purchase is publicly transacted, and a third person, knowing thereof, and of his own right to the lands intended to be purchased, does not give the purchaser notice of that right, he shall never afterwards be admitted to set up such rights to avoid the purchase; for it was an apparent fraud in him not to give notice of his title to the intended purchaser, and in such cases infancy…shall be no excuse.’: see Savage v Foster (1723) 9 Mod Rep 35, 37 (see also Spiro v Lintern [1973] 1 WLR 1002, 1010F-1011D).”

31.In my view, the present case is similar to the scenario in Si Tou Choi Kam.  Like the judgment creditor in that case, the Defendant (who asserted beneficial interest over the Property) had knowledge of the Plaintiff’s claims for vacant possession of the Property in DCCJ 4174/2021 based on the terms of the Second Mortgage, and she was duly notified of the Plaintiff’s claims by virtue of the notice to occupants dated 2 November 2021.  Nonetheless, whilst the Defendant had sought legal advice, she chose not to contest the Plaintiff’s claims at all and not to assert interest against the Plaintiff.  As a result, the Plaintiff obtained a final judgment for vacant possession of the Property, and it was further induced to incur time and costs in seeking to (i) recover vacant possession of the Property and (ii) sell the Property by auction on 3 occasions.  In my view, the Plaintiff must have suffered detrimental reliance, and its position had changed. 

32.For completeness, it should also be pointed out that the fact that the Defendant retrieved her personal belongings from the Property is diametrically contradictory to her current stance that she enjoys a beneficial interest in the Property that ranks higher than the Plaintiff’s interest under the Second Mortgage. 

33.In the premises, I cannot see how the Defendant could be in a position to assert beneficial ownership over the Property against the Plaintiff.  Applying the legal principles propounded by Cheung CJHC (as he then was) in Si Tou Choi Kam and the legal principles propounded by Cheung JA in Mo Ying, the Defendant must be estopped or precluded from doing so by reason of her previous conduct and/or unjustifiable inaction. There is no room for her to blow hot and cold. 

Claim for Ancillary Relief

34.It appears to me that the same analysis applies to the Defendant’s claim for ancillary relief under FCMC 917/2022. 

35.On the Defendant’s admissions, as early as 9 November 2021, upon discovering the existence of DCCJ 4174/2021, she had a quarrel with Mr Mak, and Mr Mak unequivocally indicated his intention to divorce.  Further, before the Plaintiff obtained judgment for vacant possession of the Property, on 28 December 2021, the Defendant sought further legal advice, and divorce proceedings were then commenced. 

36.For reasons best known to herself, the Defendant did not oppose the Plaintiff’s claim for vacant possession of the Property in DCCJ 4174/2021 on the ground that she intended to seek ancillary relief against Mr Mak.  As a result, the Plaintiff incurred time and costs in enforcing the final judgment in DCCJ 4174/2021 by seeking to (i) recover vacant possession of the Property and (ii) sell the Property by auction on 3 occasions.  The Plaintiff must have suffered detrimental reliance and changed its position. 

37.Applying the legal principles above, I am of the view that the Defendant must be estopped from relying on her claim for ancillary relief to dispute the Plaintiff’s interest. 

38.In any event, more fundamentally, Mr Vincent Chen (for the Plaintiff), pointed out that the family court’s dispositive power under the Matrimonial Proceedings and Property Ordinance (Cap 192) cannot be invoked to dispose of matrimonial properties insofar as they are subject to pre-existing encumbrances (such as mortgages).  In this connection, Mr Chen pertinently referred to WYM v LYM [2024] HKCA 499 at para 26.  There, Chu VP pointed out:-

“Between the petitioner and the respondent, it might well be right that the petitioner may have a claim against the respondent by way of ancillary relief under the MPPO, notwithstanding her failure to establish trust or estoppel over the Property. However, the dispositive powers of the court under the MPPO only extend to matrimonial assets belonging to the petitioner and/or the respondent. The mortgage in favour of GFL is an incumbrance on the Property. The encumbered part of the Property does not form part of the respondent’s asset. Further, as mentioned above, the Judge had found against the petitioner on her proprietary claim over the Property, and she did not have any proprietary interest in the Property whether by way of trust or estoppel. Hence, as Mr Cheung for GFL pointed out, what will be available for distribution under the matrimonial regime is confined to the unencumbered value of the Property. It follows that the petitioner’s entitlement to claim ancillary reliefs under the matrimonial regime cannot give rise to a proprietary interest in the Property that ranks before GFL’s interest under the mortgage.” (emphasis added)

39.In the premises, there is no question that the Defendant’s claim for ancillary relief against Mr Mak under the matrimonial regime is incapable of giving rise to any proprietary interest in the Property that ranks before the Plaintiff’s interest under the Second Mortgage.  In other words, the Defendant cannot rely on her claims for ancillary relief against Mr Mak to defeat the Plaintiff’s interest under the Second Mortgage, which is a prior encumbrance. 

40.It appears that if the proceeds arising from the sale of the Property are sufficient to repay the secured indebtedness owed by Mr Mak, the Defendant may, under the matrimonial regime, claim a share of the surplus (which ought to be returned to Mr Mak).  However, this is not a claim that affects the interest in the Property. 

Sum Up

41.In the premises, I am unable to discern any practical reason why the Defendant would insist that her Form A be registered against the Property. 

42.Having said that (i) the Defendant must be estopped from asserting beneficial ownership over the Property against the Plaintiff and (ii) the Defendant’s claim for ancillary relief cannot give rise to any proprietary interest that ranks before the Plaintiff’s interest under the Second Mortgage, the reality is that the Plaintiff is expected to sell the Property.  This was what the Plaintiff had endeavoured to achieve.  There is every reason why the Plaintiff would wish to, as soon as possible, recover the indebtedness under the Loan Agreement, which was secured against the Property by virtue of the Second Mortgage. 

43.I accept the Plaintiff’s suggestion that due to the registration of the Form A, interested buyers are deterred from making bids, and, as such, it has been practically impossible to sell the Property.  There is no question that the Plaintiff is now in an unenviable position. 

44.In this connection, in Bank of China (Hong Kong) Limited v Fine China Investment Limited [2026] HKCFI 1199 at para 12, DHCJ Jonathan Chang SC observed that:-

“The registration of a lis pendens secures a right of priority to the registering party and has the effect of a judgment so registered against the land. It is a most valuable right. Correspondingly the owner’s land is encumbered. In effect the owner would be unable to sell or mortgage the property. In an application by the owner to vacate a lis pendens on the grounds of dilatoriness in the prosecution of the action, the interests of both the registering party and the owner must be considered: Tahir v Cheung Wai Bun Charles [1980] HKC 370 at 375C-D.” (emphasis added)

45.I do not see any sensible reason why the Plaintiff should be obstructed from selling the Property.  The earlier the Property is sold, the better for everyone.  Indeed, the sale of the Property is in the interest of the Defendant.  As mentioned, under the matrimonial regime, the Defendant may have a claim for the surplus of the sale proceeds (if any). 

46.For completeness, it should be reiterated (see paragraph 23 above) that as evidenced by the letter dated 10 August 2022 from her solicitors, the Defendant did not even object to the sale of the Property outright.  It appears that the Defendant’s concern was that the Property should be sold at a reasonable market price.  However, this is not a reason for insisting that the Form A be registered. 

47.In the circumstances, it appears to me that:-

(1)     the Defendant’s stance of insisting that her Form A be registered is puzzling; and

(2)     the Defendant’s conduct has been unreasonable and abusive. 

E.     Disposition

48.For all the above reasons, I allow the Plaintiff’s application and make an order in terms of paragraph 1 of its originating summons dated 27 March 2025. 

49.Costs should follow the event. 

50.I order the Defendant to pay the Plaintiff’s costs in these proceedings, to be summarily assessed by this court.  The Plaintiff shall lodge and serve its statement of costs within 7 days, and the Defendant shall lodge and serve her statement in opposition within 7 days thereafter.  

51.I thank Mr Vincent Chen, Ms Evelyn Cheng, and Ms Kano Lam for their helpful assistance. 

Mr Vincent Chen, inst'd by M/s. Arthur Hong LLP for the Plaintiff

Ms Evelyn LC Cheng and Ms Kano Lam, inst’d by M/s. Munros for the Defendant