Kwok Shui Fong v. Wong Kam and Another
Read the full judgment text of HCMP 145/1969 on BabelCite. This High Court CFI judgment was delivered on 12 August 1969.
1. This is an originating summons asking for an order to enable the plaintiff to sell Flat G on the 5th floor and Flat H of the 7th floor of the Yau Luen Apartments which stand on the remaining portion of New Kowloon Inland Lot 2882, in Tai Po Road, Kowloon.
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HCMP000145/1969 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION MISCELLANEOUS PROCEEDINGS NO. 145 OF 1969 -----------------
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----------------- Coram: Briggs, J. Date of Judgment: 12 August 1969 ----------------- JUDGMENT ----------------- 1. This is an originating summons asking for an order to enable the plaintiff to sell Flat G on the 5th floor and Flat H of the 7th floor of the Yau Luen Apartments which stand on the remaining portion of New Kowloon Inland Lot 2882, in Tai Po Road, Kowloon. 2. Tsang Seen To and Shen Tak Ching have applied to be joined as defendants and this has not been opposed. In this judgment I will refer to Tsang Seen To and Shen Tak Ching as the third and fourth defendants respectively. The first and second defendants have not put in an appearance to this summons. 3. For the purposes of this judgment I will presume that the charging order to which I shall refer later is valid. However I am not stating that it is valid in law. I say this because I understand there may be further proceedings in which its validity may be questioned. 4. The plaintiff agreed to purchase Flat C on the 9th floor, Yau Wing Apartment, Shanghai Street from the first and second defendants in September 1965. She paid $25,500 as the purchase price and entered into possession in November. The first and second defendants failed to execute any formal assignment of the property. So the plaintiff brought an action against them for recission of the contract and the return of the purchase price. The action, O.J. No.543 of 1968, was undefended and judgment was signed in favour of the plaintiff in November of 1968. The agreement for sale was ordered to be rescinded and the first and second defendants were ordered to pay the plaintiff $25,500 with $9,474.32 interest together with her taxed costs. 5. This judgment was not satisfied. The plaintiff searched the Land Register and discovered that Flats G & H in the Yau Luen Apartments were registered in the name of the first and second defendants. She therefore applied under Order 50 rule 1 for an order charging them with the amount of the judgment debt. Her application was successful and the order was made absolute on 18th January 1969. The plaintiff registered both the order nisi and the order absolute on the Land Register, the latter on February the first 1969. 6. The third defendant, Tsang Seen To, has filed an affidavit in which he states that he purchased Flat H on the 7th floor of Yau Luen Apartment in September 1962. He is in occupation of the flat with his family. The fourth defendant, Shen Tak Ching, says he purchased Flat G in the same block in August 1962. And he is in occupation of the flat with his family. In each case the vendors were the first and second defendants. 7. The third and fourth defendants have been taken completely by surprise by these proceedings. Each of them registered the agreement for sale and purchase of his flat. But not until after the registration of the charge by the plaintiff. The date of registration in each being the 27th June 1969, i.e. four months after the charge was registered. The third and fourth defendants both state that they have paid the purchase price for their flats in full and are in possession. They claim that the first and second defendants have only a bare legal estate in the flats in trust for themselves. And they oppose this application for the sale of the flats. 8. The plaintiff's case is simple. He relies on the provisions of the Land Registration Ordinance. This Ordinance provides for the registration of deeds, instruments and judgments affecting land. The word 'judgment' includes an order of the court and includes the charging order made in O.J. 543 of 1968, the order with which we are here concerned. 9. Section 3(1) of the Ordinance reads as follows:-
10. An glance at the relevant entries in the Land Register shows that in each case the charge of the plaintiff precedes the registration of the agreement for sale and purchase by the third and fourth defendants. The charge therefore has priority. 11. The plaintiff also sought to rely on the provisions of section 3(2) of the Ordinance which is concerned with the position of unregistered deeds, judgments etc. His argument is that by reason of Order 88 rule 2, he is in the position of a mortgagee for valuable consideration within the meaning of that term as used in section 3(2) of the Ordinance. This he said means he can ignore any unregistered deed or judgment concerning the land in question. This may or may not be so. In my view it is irrelevant. We are here concerned in each case with two instruments, which are both registered - the charge, and the agreement for purchase and sale. The correct section to apply is section 3(1) of the Ordinance. 12. The summons was opposed by the third and fourth defendants. It was pointed out that they had purchased their flats from the first and second defendants free of all encumbrances and they were bona fide purchasers for value as long ago as 1962. It was argued that the charging order can only relate to that interest in the land which the first and second defendants had at the time it was made absolute. At that time, it was agreed, the first and second defendants had no beneficial interest in the flats. The purchase price was fully paid up and all that remained to be done was the formal completion of the assignment. The first and second defendants were trustees for the third and fourth defendants at that time. 13. A further point was made that it was not necessary or expedient that an order for sale of the two flats should be made. The application for an order for sale is made under Order 31 and that order states:-
14. This rule does give a discretion to the court. But that discretion must be exercised judicially. It is my considered opinion that if an order for sale is made it will operate most unjustly on the third and fourth defendants. But I do not think I can exercise my discretion and refuse an order for sale on those grounds. The purpose of the order is to assist in the satisfaction of properly obtained judgments and orders of the court. And it is for that purpose that the plaintiff invokes the Order in this case. 15. Counsel for the third and fourth defendants urged everything possible in his clients favour. But if the correct state of affairs is that the first and second defendants were only trustees for the third and fourth defendants the Land Register should have been rectified. I do not see how I can do this in these proceedings. Nor have I been asked to do so. 16. For the third and fourth defendants it was urged that the amount of the charge was too much. That the first and second defendants would have been entitled to a set off for the use of the flat by the plaintiff if they had defended the action. This may be so but I can find no authority allowing me to vary an order imposing a charge on land. It is possible to vary an order imposing a charge on securities but that is specifically taken care of by O.50 r.7 which does not apply to land. 17. Presumably the third and fourth defendants have their remedies against the first and second defendants. There may even be an action for negligence against the solicitor who advised them at the time of the signing of the agreement for sale and purchase. With those matters I am not here concerned. In my view the plaintiff is entitled to the order sought. 18. I will now deal with the manner of carrying out the sale.
12th August 1969 19. The Charging Orders were discharged by consent of the parties. Costs to be taxed and paid by the 3rd and 4th Defendants.
Representation: Litton & Arculli (Deacons) for Applicants/Defendants. Mills-Owens (Woo & Woo) for Plaintiff. |
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