Kong Yik Hang v. Polypak Ltd

Case No.HCA 1884/1973

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCA001884/1973

1973, No. 1884

IN THE SUPREME COURT OF HONG KONG

ORIGINAL JURISDICTION

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BETWEEN
	KONG YIK HANG	Plaintiff
	and
	POLYPAK LIMITED	Defendant

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Coram: Mr. Registrar Jones in Chambers.

Date of Judgment: 8th March, 1974

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DECISION

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1. The defendant by this summons applies under section 19 of the Land Registration Ordinance and in the alternative under the inherent jurisdiction of the court to vacate the registration in the Land Office by the plaintiff of the Agreement for Sale and Purchase entered into between the parties on the 31st March 1973 and the proceedings in this action instituted on the 5th July 1973.

2. By the agreement of the 31st March 1973 the defendant agreed to sell to the plaintiff the Remaining Portion of New Kowloon Inland Lot No. 4391 known as Kai Tak Factory Building Stage II for the sum of $1,583,550.00. The plaintiff paid a deposit of $150,000.00 and completion was fixed for the 15th May 1973 time being of the essence of the contract. Completion did not take place as agreed and it is common ground that repudiation of the agreement has been accepted by both parties.

3. An affidavit filed in support of the application by the defendant's solicitor states that in January 1974 terms were agreed for the sale of the property, but that the prospective purchaser had since declined to proceed because of the registrations entered against the property.

4. Section 19 of the Land Registration Ordinance relates to the vacation of a lis pendens and provides as follows:-

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 Office 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.'

5. The crux of the application to vacate under section 19 is to establish whether 'any property sought to be bound is in litigation'.

6. In considering this application Mr. Bernacchi referred me to a number of authorities including Thian's Plastics Industrial Co. Ltd. v. Tin's Chemical Industrial Co. Ltd. ⁽¹⁾ where Blair-Kerr, J. held:

Before a plaintiff registers an action as a lis pendens, it is his bounden duty to ensure-

	(a)	that it is an action in which a claim to land or some interest in land is asserted;
	(b)	that there is a claim of right or a claim to charge some specific property.

When the propriety of a lis pendens registration is called in question, the court should -

	(a)	scrutinize the circumstances in which the registration came to be made, and
	(b)	satisfy itself that the plaintiff is not attempting to obtain by a back-door method what he may not be entitled to - e.g. a preservation order or an interim injunction restraining dealings with the property.

This decision was upheld by the Full Court ⁽²⁾ where Huggins, J. said 'The important point to notice is that the land must be affected by the lis itself'.

7. In a more recent case Calgary Land Co. v. Dobinson⁽³⁾ Megarry J. said 'Thus if A commences proceedings claiming that the land is his, or that he has some interest in it, those proceedings may be registered as a "pending land action." But if A asserts no proprietary rights in the land, there is no "pending land action," even though the action in some way will or may affect the land.'

8. It is, therefore, necessary to examine carefully the plaintiff's claim which inter alia is for rescission of the agreement, the return of the deposit and for a lien on the defendant's property for this sum. The plaintiff does not claim a proprietary interest in the land nor does he assert any interest to the property. His claim is for a lien on the defendant's property for the deposit paid which can be enforced not by the registration of a lis pendens, but by an application for an order for sale of the property, i.e. a judicial sale following the ratio decidendi in Taylor v. Taylor⁽⁴⁾. In these circumstances I am satisfied that the land itself is not in litigation in order to come within the definition of section 19 of the Land Registration Ordinance. Although the lis pendens cannot be vacated under that section it is clear upon the authorities cited to me by Mr. Bernacchi that the registration can be vacated under the inherent jurisdiction of the court if it considers such registration to be improper. See Heywood v. B.D.C. Properties Ltd. (No.2) ⁽⁵⁾

9. I am of the opinion that the registration of this action by the plaintiff as a lis pendens was improper and under the inherent jurisdiction of the court I order that its registration be vacated forthwith. The agreement for sale and purchase no longer exists with the result that its continued registration is unnecessary. Accordingly again under the inherent jurisdiction of the court there will be an order for the registration of the agreement to be vacated forthwith.

10. The costs of and incidental to the registration of the agreement and the action and to the vacation thereof will be paid by the plaintiff. There will be a certificate for counsel.

11. Dated this the 8th day of March, 1974.

	(B.L. Jones)
	Assistant Registrar

Representation:

(1) 1970 H.K.L.R. at P. 499

(2) 1971 H.K.L.R. at P.256

(3) 1974 2 W.L.R. at P.146

(4) 1968 1 W.L.R. at P.378

(5) 1964 1 W.L.R. at P. 971