The Ka Wah Bank Ltd v. Product Scouting International Ltd and Another
Read the full judgment text of CACV 33/1985 on BabelCite. This Court of Appeal judgment.
1. We dismissed this appeal with costs and stated that we would give our reasons later, which we now do.
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CACV000033/1985
BETWEEN:
Coram: Roberts, C.J., Silke & Kempster, JJ.A. Date of judgment: 2nd April, 1985. ----------------- JUDGMENT ---------------- Roberts, C.J. - 1. We dismissed this appeal with costs and stated that we would give our reasons later, which we now do. Background 2. The defendant company ("the company") entered into an agreement for banking facilities with the plaintiff bank ("the bank") on 8th April, 1981. 3. On 30th June, 1981, the company mortgaged to the bank premises owned by it ("the premises") to secure general banking facilities up to a limit of $2M. This mortgage was registered with the Registrar of Companies on 1st August, 1981 and in the Land Office on 9th October, 1981. 4. On 28th October, 1981, a further charge was created by the company on the same property for an additional $500,000, in favour of the bank. This charge was, by its terms, to secure the sum secured by the earlier mortgage as well, i.e. a total of $2.5M. The second charge was registered on 17th November, 1981 with the Registrar of Companies and on 18th December, 1981 in the Land Office. 5. The company having defaulted in repayments due under both instruments, the bank, on 23rd July, 1984, issued an Originating Summons under Order 88, claiming possession of the premises. 6. An order for possession was made by a Master against the company, which did not appear at the hearing, on 29th December, 1984. 7. On 1st February, 1985, the applicant sought to be joined as a party to the Originating Summons. This application was refused by a Master. The applicant's appeal against this refusal was heard before, and dismissed by, Jones, J. in Chambers on 12th February, 1985. The applicant appealed to us against the order of Jones, J. 8. It should be noted in passing that the applicant applied to another division of this court, on 6th March, 1985, for a stay pending the hearing of his appeal against the order of Jones, J. That application was refused. 9. However, on 27th March, the applicant succeeded in obtaining a stay pending the hearing of his appeal from another Master, although the applicant informed us that he had told the Master that a similar application had been refused by the Court of Appeal. We are satisfied that he cannot have done so, since the Master, if he had understood this to be the position, would not have made an order to stay in direct contradiction to that made three weeks' earlier by another division of this court. 10. We should mention, in passing, that, since it was an ex parte application by the applicant, the Master's attention was not drawn to 0.59 r.13(1), whereby an appeal is not to operate as a stay of execution, unless the court below or the Court of Appeal otherwise directs, thus the Master had no jurisdiction to grant a stay. Grounds of Appeal 11. The applicant based his claim to be joined as a party on the following grounds -
12. Therefore, the applicant argued, he was in possession of the premises in accordance with a tenancy which was still valid and subsisting; and that the order of possession was itself nugatory since it was based on the enforcement of an instrument which was unenforceable because it had not been registered within the proper time prescribed by section 80 of the Companies Ordinance. 13. With regard to the enforceability of the mortgage dated 30th June, 1981, the applicant argued that additional evidence, which he wished to put before us, would show that the mortgage was in fact executed by the bank at an earlier date, not later than 3rd June. If this were so, he continued, the mortgage was registered out of time and was therefore unenforceable against the company. 14. It is not necessary for us to come to any conclusion as to the validity of the applicant's arguments in relation to the first mortgage, since the $2M which was secured by that was subsumed into the charge of 28th October, 1981 which was for a total of $2.5M. 15. The applicant was unable to challenge the fact that this charge was registered in the Companies Register on 17th November, 1981, well within the period of five weeks prescribed by section 80 of the Companies Ordinance. In addition, that section only renders an unregistered charge void against the liquidator or a creditor of the company which has created the charge; and there was no evidence that the applicant is a creditor. 16. So far as the applicant's tenancy is concerned, this was never registered. By virtue of the provisions of section 3(2) of the Land Registration Ordinance, it is null and void as against a bona fide mortgagee for valuable consideration, which is the status of the plaintiff bank. Misconceived action 17. This application by Mr. Oosterveld is basically misconceived. 18. In other proceedings, he sought to appear in person on behalf of the company, an application which was rejected by a Master, by a Judge in Chambers and by another division of this Court. 19. Having so failed, the applicant sought to have himself joined as a party in order to resist the bank's originating summons for possession. 20. What he should have done, as sole director of the company, was to retain solicitor and counsel to represent the company in the originating summons and instructed, as director of the company, his legal advisers to appeal against the order for possession made by the Master. 21. This he never did and the time for appealing against the substantive order for possession of the premises in favour of the bank has long since expired. 22. We are satisfied that, on the evidence before him, the judge was correct in coming to the conclusion that if any tenancy did exist between the defendant and the applicant, it cannot, by reason of its non-registration, bind the bank, by virtue of section 3(2) of the Land Registration Ordinance, and that in consequence, the applicant had no arguable grounds which he could have deployed if joined. We think that he was right, in the exercise of his discretion, to refuse to join the applicant. 23. He might also have added, as another ground for refusing the application, that it was in effect a device for attempting to re-open the question of the validity of the order for possession made by a Master on 29th December, against which the company has entered no appeal. 24. We therefore dismissed the appeal with costs. Representation: Mr. D.W.J. Oosterveld, appellant/applicant - in person Mr. W. Waung (Woo, Kwan, Lee & Lo) for Respondent/plaintiff |