Ken Kee Securities Co v. Wong Ying Cheong

HCA001657/1973

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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Coram: Mr. Registrar Shum in Chambers.

Date of Judgment: 12th June, 1976.

Mr. Au of Messrs. H.H. Lau & Co. for Plaintiffs.

Mr. Jenkis of Messrs. Gunston & Chow for Defendant.

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DECISION

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1. These are two inter-parte summonses before me. One applies for leave to take further proceedings to enforce the charging order made absolute on 24/9/75 and the other applies for an order for sale to enforce the charging order on land under Order 31 rule 1 and 2 of the Rules of the Supreme Court.

2. Regarding the summons of 25/5/76 applying for leave to take further proceedings, since the charging order was made absolute for a period of more than 6 months, I have no hesitation in granting the leave applied for.

3. Regarding the inter-parte summons of 10/5/76 made under Order 31 rule 1 and 2, throughout the hearings I had received no assistance from either side. Mr. Au for the Plaintiffs realised that it was a novel and difficult point but he did not assist me by pointing out any reasons or any authorities to support his contention. Mr. Au's submission amounted to a "negative pregnant". He virtually told me that there was nothing on the face of Order 31 rule 1 and 2 to prevent him from making such an application, therefore, his application was made under the correct procedure. Mr. Jenkins cited 2 authorities to demonstrate that the court had no power to order a sale of shares subject to charging order. Mr. Jenkins submitted that this principle equally applied to a charging order relating to land. But, Mr. Jenkins did not tell me why this principle was equally applicable to a charging order on land.

4. Order 31 rule 1 is to replace the revoked Order 51 rule 1, which was taken from the Chancery Procedure Act, 1852, s. 55. Before this rule came into force it was held that the section 55 was only intended to apply to administration suits and did not apply to the case of an ordinary foreclosure action (see London and County Banking Co. v. Dover (1879) 11 Ch. D. 204). The rule only gives the court power to direct a sale where it is necessary or expedient for the purposes of the action, and it was not intended to enable the court to sell land where otherwise it had no power to do so. (Re Robinson (1886) 31 Ch. D. 247; Re Staines (1886) 33 Ch. D. 172). In Order 31 rule 1 the words "for the purposes of the cause or matter" are inserted in view of the decision in Re Robinson (1886) 31 Ch. D. 247, a fortiori, this Order 31 rule 1 is intended to give the court power to direct a sale of land where it is necessary or expedient for the purposes of the action only.

5. Under Section 11A(3) of the Supreme Court Ordinance, Cap. 4, a charging order on land shall have the like effect and shall be enforceable in the same manner as an equitable charge created by the debtor by writing under his hand. It follows that the procedure to enforce a charging order on land is the same as that to enforce an equitable charge. The procedure is by originating summons under the revoked Order 55 rule 5A now replaced by Order 88 rule 1 (see Halsbury's Laws of England, 3rd Edition, Volume 16, para. 155 at page 101).

6. To deal with the "negative pregnant" raised or relied upon by Mr. Au, solicitor for the Plaintiffs, the inter-parte summons of 10/5/76 was a step taken in the action in which the judgment was obtained. Under Order 50 of the Rules of the Supreme Court in Hong Kong we do not have similar provision as Order 50 rule 9 in England so as to enable the court to enforce a charging order on land. The inter-parte summons of 10/5/76 was taken out under Order 31 rule 1 and it must fail on the following grounds:-

7. For the above rationale I dismiss the inter-parte summons of 10/5/76 accordingly.

8. Since the inter-parte summons of 25/5/76 had taken less than 2 minutes, I do not make any order as to costs.

9. Regarding summons of 10/5/76 order the Plaintiffs to pay to the Defendant costs to be taxed, if not agreed.

10. Dated this the 12th day of June, 1976.

Representation:

Mr. Au of Messrs. H.H. Lau & Co. for Plaintiffs.

Mr. Jenkis of Messrs. Gunston & Chow for Defendant.