Union Finance Ltd v. Tang Man Kam Cami

Case No.HCMP 2088/1998

Court

High Court CFI

Date03 Dec 1998

Judge—

Case Document

100%Judiciary

HCMP002088/1998

HCMP 2088/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANCEOUS PROCEEDINGS NO.2088 OF 1998

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IN THE MATTER of Flat J, 13^th Floor, Block 11, Yuet Wu Villa, No.2 Wu Sau Street, Tuen Mun, New Territories, Hong Kong (45/202883^rd parts or shares of and in Tuen Mun Town Lot No.360).

and

IN THE MATTER of a Charging Order on land dated 26^th August 1997 and made absolute on 11^th September 1997 in High Court Action No. 5279 of 1997.

and

IN THE MATTER of Section 21D(1) of the High Court Ordinance, Cap.4, Laws of Hong Kong and Order 31 rule 1, Order 50 rule 9A and Order 88 rule 5A of the Rules of High Court.

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BETWEEN
	UNION FINANCE LIMITED	Plaintiff
	AND
	TANG MAN KAM CAMI	Defendant

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Coram: Stock J. in Chambers

Date of hearing: 3 December 1998

Date of judgment: 3 December 1998

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JUDGMENT

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1. This is an appeal against the decision of a master in September 1998 by which the master dismissed an application by the plaintiff for an order for sale of a flat in Tuen Mun of which the defendant is or was the registered owner.

2. In June 1997, the plaintiff entered judgment against the defendant in the sum of $449,544.89 and it was ordered that there should be interest on parts of that sum at the rate of 2% per month until 24^th June 1997 and thereafter at the judgment rate until payment and costs. The judgment was not satisfied and on 26^th August 1997, the plaintiff obtained a charging order against the defendant's interest in the property. That order nisi was made absolute on 11^th September 1997.

3. The Originating Summons was issued on 12^th May 1998 and asked for an order for sale of the property out of the proceeds of which payment of the judgment debt was sought.

4. The Originating Summons was supported by an affirmation of Mr Ng Wai Keung, a sub-manager of the plaintiff company. He recited the fact of the judgment debt; that it was not satisfied; that the defendant was the registered owner; that the property could be sold only to the Housing Authority; and that the purchase price offered by the Authority was $950,000. There was exhibited to the affirmation a list of a significant number of other incumbrances registered against the property, including a legal charge in favour of Hang Seng Finance Limited registered in September 1994. There was also exhibited to the affirmation a letter to Hang Seng Finance Limited which asked whether they objected to the proposed sale and what the outstanding balance to them was. Hang Seng Finance Limited however refused to disclose the outstanding balance saying that they owed a duty of secrecy to the borrower.

5. It has recently been ascertained that the property has in fact been sold, I believe at the behest of Hang Seng Finance Limited, so that an order for sale is not now required. However, the appeal is pursued because the plaintiff wishes to have the benefit of its costs of the hearing and application before the master, covered as it were, by the proceeds of sale.

6. I have before me no reasons given for the master's decision, and I am told that a request to that end has been declined. However, Mr Hung of the plaintiff's solicitors who has presented this appeal tells me, although he emphasizes he was not present at the hearing, that there was apparently some question-mark over the sale price and he says that it may be that the master was unwilling to make an order for sale because he could not be sure that there would be left any equity to the plaintiff after all the prior incumbrances were satisfied.

7. Although the affirmation before the master had made express reference to the prior encumbrance in favour of Hang Seng Finance Limited, and the correspondence exhibited to that affirmation demonstrated that the plaintiff was unable to ascertain how much of the outstanding debt due to Hang Seng Finance Limited was still due, no information was given to the master in that affirmation as to the amounts due to other incumbrancers. I am told that that is because by the time the Originating Summons was issued, in respect of some of the incumbrances, there had been answers similar to that offered by Hang Seng Finance Limited, and in relation to others, answers only came late. Nonetheless, those answers and those facts were not before the master.

8. Order 88, rule 5A of the Rules of the High Court provides as follows:

"5A(1) This rule applies to a mortgage action to enforce a charging order by sale of the property charged.

	(2)	The affidavit in support of the originating summons must-
	(a)	identify the charging sought to be enforced and the subject-matter of the charge;
	(b)	specify the amount in respect of which the charge was imposed and the balance outstanding at the date of the affidavit;
	(c)	verify, so far as is known, the debtor's title to the property charged;
	(d)	identify any other incumbrances on the property charged stating, so far as is known, the names and addresses of the incumbrancers and the amounts owing to them;
	(e)	set out the plaintiff's proposals as to the manner of sale of the property charged together with estimates of the gross price which would be obtained on a sale in that manner and of the costs of such sale;
	(f)	where the property charged consists of land in respect of which the plaintiff claims delivery of possession, give particulars of every person who to the best of the plaintiff's knowledge is in possession of the property charged or any part of it."

9. Now although this is a re-hearing, since all I am concerned about in practical terms is not whether there should now be an order for sale but whether an order for costs ought to have been made by the master, it seems to me that what I need to address is whether the master was justified in dismissing the application. I think he was because Order 88 rule 5A(d) was not complied with, in that there was a large number of incumbrances and none of the amounts owing was dealt with or specified. It is said that that is a matter which did not lie at the door of the plaintiff because some of the answers had, by that stage, not yet come in as it were. That, with respect, is no answer. It seems to me that the scheme of the order is such that the plaintiff should have waited until all answers were received, or should have dealt expressly with the responses from other incumbrancers in the affirmation.

10. The tale in its full extent was not told to the master at all. It seems to me, in the circumstances, that neither then nor today was an order for sale justified. It is said that, instead of dismissing the application, the master could have and should have ordered directions to be given for further inquiries. But one of the purposes of Order 88, as it is explained in the notes to that Order in the Supreme Court Practice 1999 is-

"to ensure that if possible the courts will be in possession of sufficient evidence at the first appointment under the originating summons to make an immediate order for sale without the need for further accounts or inquiries as to the defendant's interest in the property subject to the charging order as to incumbrances or as to the amount of the sum due."

And it seems to me that Order 88 is not to enable the applicant to apply too early in the hope that its tackle might be in order by the time the application comes to be heard before the master, and if it is not in order, then to seek a postponement.

11. In my judgment, the master was justified in dismissing the application and making the order as to costs as he did. Accordingly, this appeal is dismissed. The respondent does not appear and the plaintiff must bear its own costs of this appeal.

	(F. Stock)
	Judge of the Court of First Instance
	High Court

Representation:

Mr David Hung of M/s Edward C.T. Wong & Co., for the Plaintiff

Defendant Mr Tang Man Kam Cami, absent