Consolidated Sales Ltd v. Turner C. Lynn t/a Wintergreen's Rattancraft (A Firm) and Another
Read the full judgment text of HCA 701/1969 on BabelCite. This High Court CFI judgment.
1. On 3rd October, 1969 the Plaintiff, Consolidated Sales Limited obtained judgment against the Defendant, who is described on the writ as "Turner C. Lynn (a male) trading as Wintergreen's Rattancraft (a firm)." The judgment, which was for damages for breach of contract and the return of a monetary deposit, was for the sum of $176,234.75 together with costs. The sum of $38,338.40 has been paid, but the balance of $137,896.75 remains outstanding and the costs have not been paid.
Cited by 2 cases
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HCA000701/1969 IN THE SUPREME COURT OF HONG KONG ORIGINAL JURISDICTION Action No. 701 of 1969 -----------------
Coram: Briggs J. in Chambers Date of Judgment: 10th April, 1970. ----------------- JUDGMENT ----------------- 1. On 3rd October, 1969 the Plaintiff, Consolidated Sales Limited obtained judgment against the Defendant, who is described on the writ as "Turner C. Lynn (a male) trading as Wintergreen's Rattancraft (a firm)." The judgment, which was for damages for breach of contract and the return of a monetary deposit, was for the sum of $176,234.75 together with costs. The sum of $38,338.40 has been paid, but the balance of $137,896.75 remains outstanding and the costs have not been paid. 2. On 27th December, 1969 it was ordered that the issue be tried whether one Mary L. Lynn alias Mary Loo was liable for the judgment debt as being a partner or as having held herself out as a partner of the Defendant firm. 3. And on 19th February, 1970 the Court held that Mary L. Lynn had held herself out as a partner in the Defendant firm and that she was therefore liable for the judgment debt. 4. Mary L. Lynn is the registered owner of a flat No. 53F Beacon Hill Road, Kowloon subject to a charge in favour of the Bnanghai Commercial Bank amounting to $40,000. 5. On 24th February, 1970 the Plaintiff was granted an order nisi under Order 50 rule 2 charging the flat with the balance of the judgment debt remaining unpaid. The 3rd of March, 1970 was specified for the further consideration of this matter but there were two adjournments and the parties finally came before me first on 18th March, 1970. 6. By that time namely, on 5th March, 1970 the claimant, Mak Yee Ying had filed a notice to oppose the order being made absolute and she applied to have the order nisi of 24th February discharged. 7. The Charging Order Nisi was registered in the Land Registry against the flat of Mary L. Lynn, No. 53F Beacon Hill Road on the day on which it was made, namely on 24th February, 1970. 8. But, before this, on 10th January, 1970 Mary L. Lynn had sold the flat to the claimant. It is admitted that this was a bona fide sale for valuable consideration. At that time the title to the property was clear save for the mortgage to the Shanghai Commercial Bank referred to above. No lis pendens was registered against the property in the Land Registry and in particular, the writ in this action (O.J. 701 of 1969), the application that an issue be tried to decide if Mary L. Lynn was a partner or not, the judgment of 19th February, 1970 in which the Court held that Mary L. Lynn had held herself out as a partner in the Defendant firm and was liable for payment of the judgment debt were not registered. The claimant paid $143,000 for the flat. The mortgage was discharged but the claimant mortgaged the property to the Dah Sing Bank. 9. Unfortunately, the assignment of the property to the claimant was not registered. It was not registered on 24th February, 1970. The claimant's solicitor admits that the assignment, reassignment and new mortgage were not registered in the Land Registry until 3rd March, 1970. Section 3(1) of the Land Registration Ordinance reads as follows:-
At first blush therefore it would appear that the charging order nisi registered on 24th February, 1970 takes precedence of the assignment registered on 30th March, 1970. And that this is so despite the admitted fact that the assignment in fact preceded the charging order. 10. We are not here concerned with section 3(2) of the Land Registration Ordinance which states that unregistered deeds etc. are void as against "any subsequent bona fide purchaser or mortgagee for valuable consideration". For it is admitted that the Plaintiff does not come within that term. 11. Counsel for the claimant makes three points.
12. At common law there was no right to levy execution against a man's land. This position was relaxed by various statutes among which may be mentioned the Statute of Westminister II, the Statute of Frauds and various Judgments Acts passed between the years 1838-1864. These enactments extended the writ of elegit to all the debtor's lands. 13. Such statutes as were in force in 1843 were in force in Hong Kong. However, the application of English Law Ordinance has altered that position. That Ordinance contains a Schedule which sets out those Acts of Parliament, which are in force in Hong Kong. None of the enactments to which I have referred above are mentioned in that Schedule. And in consequence they are not in force in Hong Kong. 14. The English Order 50 of the Rules of the Supreme Court was made by virtue of the power contained in Section 15 of the Administration of Justice Act, 1956. That section of that Act is not in force in Hong Kong. Order 50 of the Rules of the Supreme Court of Hong Kong reproduces the English Order 50. And the argument is that since the rule making power in the Administration of Justice Act, 1956 is not in force there is nothing to sustain the Order. 15. This overlooks the provision of Section 38(1) (j) of the Supreme Court Ordinance which reads thus.
16. The provision of paragraph (u) of the same section is also not without relevance. 17. The words of the Hong Kong Order are obviously taken from the English Order made under the 1956 Act but I do not think that that matters. There is ample power for the making of such an Order in the paragraph I have quoted above. And Order 50 is only one method of enforcing a judgment. In my view what I have called the historical argument must fail. 18. The second point made by the claimant is that the writ in the action O.J. 701 of 1969, the decision that the issue as to partnership, the determination of that issue were not registered and therefore they are void as against the claimant, who is a bona fide purchaser for value. It is, of course, only because the court held that Mary L. Lynn had held herself out as a partner in the Defendant firm that she is liable for the judgment debt. 19. I do not think it can be seriously argued that the writ in O.J. 701 of 1969 should have been registered as a lis pendens. Nor that the judgment in that case should have been registered as a judgment. Because in that case the defendant was a firm, Mary L. Lynn only came into the picture when an application was made to proceed against her. 20. There are two points here: (1) should the application to proceed against Mary L. Lynn have been registered as a lis pendens; and (2) should the judgment or decision that Mary L. Lynn had held herself out as a partner have been registered. 21. I will say at once that I do not think that either should have been registered. Mr. Cheung argued that the expression "judgment" in the Land Registration Ordinance included all judgments whether they affected land or not. He pointed out that by Section 13 of the Judgments Act 1938 any judgment which had been "entered up against any person in any of Her Majesty's Superior Courts at Westminister" operated as a charge upon the lands of the judgment debtor. After the passing of the Land Registration Ordinance in 1844 it is very doubtful if the Act of 1938 applied in Hong Kong. It certainly does not apply now. And it is the law in 1970 with which I am here concerned, that is to say I am not concerned with the English Judgment Acts which do not apply in Hong Kong owing to the application of English Law Ordinance except insofar as they are material for the interpretation of sections 14-18. The Land Registration Ordinance is concerned and only concerned with the registration of instruments and lites pendentes affecting land. This is abundantly clear from the wording of section 2 of the Ordinance. This provides for the registration inter alia of judgments by which any land, tenements or premises may be affected. Section 14 of the Ordinance applies the provisions relating to judgments to lites pendentes. And again it is quite clear that a lis pendens which does not affect land is not to be registered. 22. The application to try the issue whether Mary L. Lynn was a partner or had held herself out as a partner was a lis pendens but it was not one affecting land and as such was not registrable. The decision of that issue was a judgment but again not a registrable judgment as it was not a judgment affecting land. 23. If a man sues another in negligence in a running down action. That is not a lis pendens which is registrable. Nor will a judgment in a Plaintiff's favour in such an action create a registrable judgment under the Ordinance. Neither the lis pendens nor the judgment affects land. There is nothing to register. If the Defendant does not satisfy such judgment it is open to the Plaintiff to apply for the imposition of a charging order or any land owned by the Defendant for the purpose of enforcing it. And if an order is granted such an order is registrable. 24. O.J. 701 of 1969 was a claim for damages for breach of contract. And as such neither the writ as a lis pendens nor the judgment were registrable. The position would be the same even if Mary L. Lynn had been sued as one of the defendants. 25. In my view a lis pendens and a judgment is only registrable under the Ordinance when it is clear that land or tenements may be affected by the litigation and not by orders or proceedings subsequent thereto. 26. But is not all this academic? The lis pendens and judgment have not been registered. And the charging order nisi has. I have heard no authority for the proposition that a lis pendens, the judgment in that suit, and the charging order must all be registered before a judgment creditor can rely on the registration of the charging order. It is the charging order nisi with which we are here concerned. Similarly, a judgment creditor can rely upon the registration of a judgment although he has not previously registered the lis pendens. 27. I do not think therefore that there is anything in this second point. 28. I have come to the last of Mr. Cheung's points. This was his first point in addressing me. This is that a charging order may only be made absolute against land which is beneficially owned by the judgment debtor. 29. Order 50(1) it was argued, refers to land which is beneficially owned by the judgment debtor. When in proceedings under Order 50 it is shown that the land in question is not so beneficially owned then the Court should decline to make an order absolute; Order 50 rule 1(7) should be applied because such a situation is "sufficient cause" why an order absolute should not be made. 30. In the present case the property had been sold to the claimant before the registration of the charging order nisi. The argument is that therefore at that date there was no land belonging to Mary L. Lynn to charge: it was then the property of the claimant. 31. It is not suggested that the charging order nisi was wrongly applied for or made, but that now it is shown that the claimant bought the land before the registration of the order nisi, that is sufficient cause for the court to refuse to make the order absolute. 32. This is an attractive argument but it totally fails to take account of the Land Registration Ordinance. 33. The law in Hong Kong is very different from the law in England. The Ordinance clearly makes registration a determining factor of ownership. 34. Section 3 of the Ordinance states that instruments affecting land "shall have priority one over the other according to the priority of their respective dates of registration". This is slightly mitigated by section 5 which provides that if an instrument affecting land is registered within one month after its execution it takes priority according to the date of its execution and not according to the date of its registration. However, section 5 does not concern us here because the assignment to the claimant was registered more than 30 days after the date of the assignment. 35. And the purpose of the Ordinance is to make priority of registration according to the Ordinance the test of ownership. This was clearly recognized in Kwok Siu Lau v. Kan Yang Che 8 HKLR (1913) 52, a case which has frequently been followed. The present case is on all fours with the case of Kwok Shui Fong v. Wong Kam & another. (M.P. 145 of 1969). Various cases were drawn to my attention but they were cases decided in England under English law where the system of land registration is very different from what obtained in Hong Kong. De Sausmarez in Kwok Siu Lau's case had this to say:
Mr. Wimbush for the Plaintiff in an able argument showed that several of the cases quoted by counsel for the claimant would have been decided in exactly the opposite way had they been brought under the law of Hong Kong and not that of England. It is unnecessary to deal with those cases. In my view the position is clear. There are two instruments registered in respect of the land (1) the charging order nisi and (2) the assignment to the claimant. The provisions of section 5 of the Ordinance do not apply to the assignment. The section to apply is section 3(1) of the Ordinance. The instrument first registered takes in priority to that which was registered later: the claimant takes the property subject to the registered charging order nisi. 36. I see no reason why that order nisi should not be made absolute and I order accordingly.
Representation: Wimbush for Plaintiff. O. Cheung Q.C. & Arculli (F. Zimmern & Co.) for Claimant. |
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