Yee Chun Hung v. Chan Sin Yu

DCMP 5506/2025

[2026] HKDC 1120

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 5506 OF 2025

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REASONS FOR DECISION

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1.Before me was an application commenced by Originating Summons under the Partition Ordinance Cap 352 for the sale of Flat F, 12^th Floor of Tower 5, Tai Po Centre (Phase 2), No 10 On Pong Road, Tai Po, New Territories (respectively “this OS” and “the Property”).

2.At the conclusion of the hearing and in the particular circumstance of this case, I made the following order staying this OS and dismissing it if and when an order for sale of the Property is granted in HCMP 324/2026, thus:

“This OS be stayed pending the judgment in the mortgagee action, namely HCMP 324/2026, with the following terms:

(a) If and when the court in HCMP 324/2026 make an order for sale of the Property, and 14 days after such an order in HCMP 324/2026 has been sealed, this OS be automatically dismissed without further order, in which event there will be no order as to the costs of this action and there be an order that the Plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations;

(b) In the unlikely event that the court in HCMP 324/2026 refuses or does not make such an order for sale, P do report that fact or judgment to this court by letter (copied to the Defendant) within 7 days; and the stay hereby ordered be lifted and the parties would then be at liberty to restore this OS for a directions hearing; and

(c) In the meantime, there be liberty to apply.”

3.In view of the fact that there would be an imminent hearing in HCMP 324/2026 on 10 July 2026 and the parties have confirmed to me at this hearing certain positions which in good order should be recorded, I said written reasons would be provided shortly. This I now do.

4.The Plaintiff (“P”) and the Defendant (“D”) had been in a romantic relationship for about 12 years since about 2012 when they were both studying at university. At the time of the purchase of the Property, they were both employees of HSBC.

5.By a sale and purchase agreement dated 31 January 2020 followed by an Assignment dated 5 March 2020, they purchased the Property at the price of HK$5,000,000 and became joint owners thereof. The purchase was financed, among others, by 2 mortgage loans totalling HK$4,240,000 respectively provided to P and D by HSBC under its Local Staff Housing Loan Scheme (“the Scheme”) under which P and D enjoyed a favourably low interest rate. The loan amounts respectively taken up by them were not equal in sum in that the loan amount borrowed by D was slightly greater than that borrowed by P, and their respective monthly repayments were accordingly and proportionally different in amount as well.

6.Since purchase, they resided in the Property.

7.Their relationship turned sour and they broke up on 9 February 2024. On the same day, P moved out of the Property leaving D occupying the same solely to date.

8.On 6 May 2025, P resigned and left the employment of HSBC and was no longer entitled to the benefit of the Scheme.

9.Since then, HSBC has been chasing P to re-arrange his mortgage loan so that he would be charged interest thereon at market rate or risk termination of the mortgage and enforcement action. Unsurprisingly, P was not keen as he wanted to have a clean break with D and to discharge himself of the mortgage. D on her part was keenly interested to continue to live in the Property by buying out P’s interest in the Property. HSBC’s stance had been accommodating by allowing time and by engaging in dialogue principally with D to enable P and D to come to an arrangement hopefully to sort out the issues concerning the Property’s ownership and the mortgage loans amicably.

10.Also unsurprisingly, P and D were unable to agree or cooperate. At the hearing, I was given to understand by the parties[1], and they did not dispute[2], that the principal sticky point impeding an amicable solution was that P insisted on a price to be paid by D of at least HK$ 2 million to buy out his half share in the Property, when D maintained that the market price of the Property had fallen to about HK$3.6 million or lower.

11.On 6 October 2025, P took out this OS. P has all along been legally represented and D has been acting in person.

12.In about January 2026, HSBC issued a letter before action. On 2 March 2026, HSBC commenced HCMP 324/2026 under O 88 against P and D to enforce the mortgage to seek payment of all sums due thereunder, and in default of payment, repossession (“HCMP 324”). I was informed by the parties that both have paid punctually their respective monthly repayments, and therefore apparently, the default of the mortgage lied in the failure to re-arrange P’s mortgage loan as aforesaid.

13.On 30 March 2026, the valuation report of the single joint expert was filed herein. The expert opined that as on 27 March 2026, the market value of the Property was HK$3,690,000, while the value of the same by a forced sale under repossession would be HK$3,320,000.

14.On 11 May 2026, HCMP 324 was first heard before Master Elaine Liu. P and D did not appear at that hearing. It was then adjourned to 10 July 2026 pending service of a supplemental affirmation by HSBC updating the outstanding amount claimed.

15.P as the applying party has not informed the court in these proceedings about the commencement of HCMP 324.

16.On 1 June 2026, this OS was heard before me by way of a 2^nd directions hearing. It was then that D informed this Court orally about HCMP 324. Mr Lui, appearing for P, knew little about HCMP 324. The parties were unable to produce any court papers giving more reliable information to this Court about HCMP 324. P then asked this OS to be adjourned pending HCMP 324. D informed this Court that HSBC was prepared to reach or has reached an agreement with her. I thus adjourned this OS to this hearing and in the meantime gave leave to D to file a supplemental affirmation proffering the documents she received in HCMP 324 together with any evidence showing the stance of HSBC in HCMP 324 and concerning any agreement she claimed HSBC would reach or might have reached with her which would lead to an amicable disposal of HCMP 324.

17.At this hearing, D produced the letter of HSBC’s solicitors dated 17 June 2026[3]. In a nutshell, HSBC indicated that it would proceed with HCMP 324 to obtain a money judgment and possession of the Property unless the outstanding staff loans were settled and the mortgage redeemed, and that it would not comment on whether D alone without P could enter into a sale and purchase agreement of the Property.

18.Thus, contrary to D’s understanding, I find that HSBC has not come to any terms of compromise or settlement with D over HCMP 324 or any agreement with her not to continue with, or to stay, HCMP 324.

19.To be very sure and at the hearing, this Court further enquired with the parties who confirmed that they would not be able to agree to any arrangement whereby they would be in a position to repay the HSBC loans and to redeem the mortgage.

20.Thus, there was little prospect that HSBC would not proceed with HCMP 324 to judgment.

21.It was not disputed that HSBC has a right under the mortgage to enforce it by an order for sale of the Property to repay the loans, which right contractually binds P and D as the mortgagors and clearly takes precedence over the present application under the Partition Ordinance to end the co-ownership of the Property through a sale ordered by this Court.

22.In my judgment therefore, P’s claim for an order for sale under this OS should be stayed pending the judgment in HCMP 324, and be dismissed when an order for sale is made in HCMP 324; indeed, as I commented during the submissions on costs, unless P and D were prepared to redeem the mortgage (which they clearly did not), the claim in this OS for an order for sale could not have been meaningfully proceeded with once HSBC commenced HCMP 324.

23.However, if there were any other claims by P and D against each other over the Property, they should be and can still be resolved in this OS. Having discussed with the parties, both P and D confirmed that (a) they have no dispute that, despite the difference in amount of their respective mortgage loans and repayments, they each beneficially own 50% of the Property, and (b) they have no other monetary claims against each other, whether concerning the use of the Property by D alone after they have broken up or concerning any utility or other fees or charges paid by any one of them. Both parties thus confirmed that there were no other outstanding disputes relating to the Property.

24.Thus and for these reasons and matters, in my judgment, the order staying this OS with a provision for automatic dismissal when an order for sale is made in HCMP 324 and a liberty to restore when in the unlikely event that no such order is made in HCMP 324 is the right and appropriate order to be made. The parties did not dispute that at the hearing. I thus so ordered as set out in paragraph 2 above.

25.As both parties were keen to conclude all disputes to dispense with further hearings or need to lodge submissions, at the conclusion of the hearing after I announced my order, I heard submissions from both parties on costs. For reasons I have given orally then, I took the view that the just costs order, if and when this OS is automatically dismissed following my said order, would be no order as to costs; and I have so provided in my said order.

Mr Lui Lui, of KWC & Associates, assigned by the Director of Legal Aid, for the Plaintiff

The Defendant appeared in person