Ho Fuk Hing and Others v. Ho Mau Hing

DCMP 2203/2005

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 2203 OF 2005

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BETWEEN:

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Coram:  Deputy District Judge K. Lo in Court

Date of Hearing:  20^th December 2005

Date of Handing Down of Judgment: 30^th December 2005

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Judgment

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Introduction

1.In this action the Plaintiffs claimed brought by originating Summons the following reliefs:-

“1.	A Declaration that the Mortgage dated 27th March 1905 noted on the Schedule of Crown Lessees, D.D. 216, in respect of the Land is incapable of subsistence or is unenforceable by operation of the Limitation Ordinance;
2.	A Declaration that all those pieces or parcels of ground situate lying and being at Sai Kung and registered in the Land Registry as Lot Nos. 157, 163 & 165 in D.D. 216 be absolutely discharged from any estate interest right or title of the Defendant as Mortgagee thereof;
3.	All consequential orders and directions; and
4.	An order that the costs of and occasioned by this application be provided for.”

Background

2.Background of this case was concisely spelt out in the affirmation of the 2^nd named Plaintiff, Ho Yiu Ting dated 25^th July 2005. 

3.The 2^nd named Plaintiff said he was the son of Ho Yung Sang, deceased and had been residing at Lot No. 650 in D.D. 216 since his birth on 15^th September 1939.

4.He said upon the death of his paternal grandfather Ho Tai Loi, his interests which included inter alia, Lot Nos. 157, 163 and 165 in D.D. 216 (hereinafter called ‘the Land’) was passed to his uncle Ho Fung Ban and his late father Ho Yung Sang as Tenants in Common by equal shares by succession.  After the death of the said Ho Fung Ban and the said Ho Yung Sang, their respective half shares in the Land were passed to his cousin Ho Fuk Hing, i.e. the 1^st named Plaintiff, and himself by way of succession in 1959.

5.The 2^nd named Plaintiff exhibited true copy of the Succession Memorial Nos. 94689 dated 30^th December 1935 showing the succession from Ho Tai Loi to Ho Fung Ban and Ho Yung Sang and the true copy of Succession Memorial Nos. 69854 and 69855 dated 15^th December 1959 showing succession from Ho Fung Ban to the 1^st named Plaintiff and from Ho Yung Sang to him respectively.  

6.It was said that the 1^st named Plaintiff and the 2^nd named Plaintiff still retained interests in Lot No. 163 in D.D. 216 and the Land Registry record dated 24^th June 2005 in respect of the same was exhibited.

7.The 2^nd named Plaintiff continued to say that in June 1997, the 1^st named Plaintiff and himself sold their interests in Section A of Lot No. 165 in D.D. 216 to Wong Wing Cheong, i.e. the 4^th named Plaintiff, and they retained interests in the Remaining Portion of Lot No. 165 in D.D. 216. 

8.Ho Fuk Hing and himself also sold their interests in Section A of Lot No. 156, Section A of Lot No. 157 and Section A of Lot No. 158 all in D.D. 216 (hereinafter called “the Surrendered Land”) for exchange with the Government for regrant of Lot No. 855 in D.D. 216 to his son Ho Chi Shing. 

9.In March 1992, the 1^st named Plaintiff sold his half share of Section B of Lot No. 157 in D.D. 216 to the 2^nd named Plaintiff.  The 1^st named Plaintiff and himself retained the interests in the Remaining Portion of Lot No. 157 in D.D. 216. 

10.In or about 1999, son of the 2^nd named Plaintiff negotiated with the Government for the regrant of Lot No. 855 in D.D. 216 in exchange for the Surrendered Land.  On 23^rd November 2001, New Grant No. 9682 of Lot No. 855 in D.D. 216 was granted to him.

11.It was only when dealing with the said exchange that it was discovered that there was a mortgage noted on the Schedule of Government Lessees attached to the Block Government Lease dated 27^th March 1905 of D.D. 216. 

12.It was marked in the remarks column of the Schedule of Government Crown Lessees, D.D. 216 in Lot No. 157 “mortgaged with Lots 163 and 165 to Ho Mau Hing $28.00 in KS23: mortgagee in possession”. 

13.Similarly against Lot No. 163 and Lot No. 165, there was the remark “See Lot No. 157” against these 2 lots. 

14.No documents creating the said mortgage was found or registered.

15.The 2^nd named Plaintiff said to his knowledge, the said Ho Mau Hing, the Defendant herein, did not exist and he had never been in possession of the Land.

16.The 2^nd named Plaintiff had also enquired the 1^st named Plaintiff, born on 4^th May 1939 and was told that the Defendant was never in possession of the Land.

17.The 2^nd named Plaintiff said he had made enquiries with his friends, relatives, family members, fellow village elders of his village in O Tau Village, Sai Kung as to the existence or whereabouts of the Defendant but no one seemed to know such a person nor was there people claiming to be relatives of the Defendant. 

18.In the 2^nd affirmation dated 25^th July 2005, the 2^nd named Plaintiff added that he had made enquiries to the Rural Committee and the District Office, Sai Kung to see if anyone knew the Defendant or his friends or relatives but no one claimed to have knowledge.

19.The 2^nd named Plaintiff said he had not paid for principal or interest under the said mortgage nor did he receive any demand from the Defendant for payment of interest and/or principal under the said mortgage.

20.He said the Defendant had clogged the equity of redemption of the mortgage by way of foreclosure, the same should have been registered in the Land Registry but such foreclosure order had not been registered at the Land Office. 

21.He claimed that by virtue of Subsection 1 of Section 19 of the Limitation Ordinance, Cap. 347, Laws of Hong Kong, no action can be brought to recover any principal sum of money secured by a mortgage or other charge on the properties, after the expiration of 12 years from the date when the right to receive the money accrued. 

22.He said as the mortgage was created before 27^th March 1905 and no repayment date was stipulated, it follow that any interest, right or claim of the Defendant in respect of the Land was now time-barred and extinguished under the said Ordinance.  He asked for order in terms of the originating summons.

23.He also affirmed and said as he had tried his best to locate the Defendant and serve the present Originating Summons on the Defendant but to no avail, he had obtained substituted service order from Master Poon by advertising once in Sing Pao Daily News a notice settled by the Registrar, and the same was effected on 9^th September 2005. 

24.Neither the Defendant nor any person on his behalf had responded to the present action.

25.Upon application by the Plaintiffs by ex-parte application, Master Chan on 9^th December 2005 granted an order dispensing with service of the Notice of Appointment to hear Originating Summons dated 27^th September 2005 on the Defendants. 

The Action

26.The Block Government Lease dated 27^th March 1905 of D.D. 216 recorded the existence of a mortgage created on Lots No. 157, 163 and 165 in favour of a ‘Ho Mau Hing’, described as mortgagee in possession in its Schedule of Government Lessees. 

27.There is no record of the particulars of the mortgage and therefore the terms involved were not known. 

28.It could be reasonably inferred however that the mortgage must have existed prior to or on the 27^th March 1905, i.e. more than one century ago. 

29.Defendant did not appear in this action.

30.As the mortgage could not be located, one was unaware of the time when repayment was to be made and when it was due. 

31.Sections 19 (1) and (2) of the Limitation Ordinance records:-

“1.	No action shall be brought to recover any principal sum of money secured by a mortgage or other charge on property, or to recover proceeds of the sale of land, after the expiration of 12 years from the date when the right to receive the money accrued. (Amended 31 of 1991 s. 8)
2.	No foreclosure action in respect of mortgaged personal property shall be brought after the expiration of 12 years from the date on which the right to foreclose accrued: (Amended 31 of 1991 s. 8)
Provided that if, after that date the mortgagee was in possession of the mortgaged property, the right to foreclose on the property which was in his possession shall not, for the purposes of his subsection, be deemed to have accrued until the date on which his possession discontinued (Amended 31 of 1991 s. 8).”

32.This Court noted from the evidence of the 2^nd named Plaintiff, born on 15^th September 1939 that he did not pay any money under the said mortgage and he had never been approached by the Defendant, directly or indirectly for repayment of monies due under the said mortgage and he has never heard anyone, despite his enquiries as aforesaid, of the existence of the said Defendant and/or his friends or relatives.

33.The 2^nd named Plaintiff all along resided in Lot No. 650 D.D. 216 since his birth in 1939. 

34.His enquiries including enquiries with the 1^st named Plaintiff suggested that the Defendant was never in possession of the Land, at least since 4^th May 1939 when he was born.

35.Evidence before the Court indicated that since repeated succession of the Land since 1935, nothing was heard of other or from Defendant.

36.The notes in the Schedule of Government Lessees said that the mortgagee was in possession at the time when the mortgage was noted in the Schedule. 

37.It was clear from evidence of the 2^nd named Plaintiff which was unchallenged and accepted by the Court that at least since 15^th December 1959 when the Land was passed to the 1^st named Plaintiff and the 2^nd named Plaintiff by succession that the Defendant had not been in possession of the Land nor did he claim repayment of any monies under the said mortgage or did anything to exert his right as a mortgagee. 

38.It could be safely inferred that the Defendant had ceased to be to be in possession of the Land as from 15^th December 1959 and accordingly the Plaintiffs could invoke section 19 (1) and 19 (2) of the Limitation Ordinance.  

39.The same operated and therefore I make a declaration that the mortgage noted in the Schedule of Government Lessees against the Land in question is incapable of subsistence or is unenforceable by operation of 19 (1) and (2) of the Limitation Ordinance. 

40.This Court did not find it necessary to make declaration prayed by the Plaintiffs herein under paragraph 2 as the same was covered by the aforesaid declaration. 

41.As the Plaintiffs did not seek costs of the action, I made no order as to costs.  

Mr. W.L. Tam of Messrs. Wong, Poon, Chan, Law & Co. for the Plaintiff.

Respondent in person, absent.