Ip Fung Ying v. Cheng Chi Chung
Read the full judgment text of DCMP 805/2010 on BabelCite. This District Court judgment before Deputy District Judge Clement Lee.
Civil law – Partition Ordinance – order for sale – tenants in common – Consent Orders – hardship – discretion – ex-spouses – sentimental attachment – sale proceeds. The Plaintiff and Defendant are ex-spouses and tenants in common of a residential unit in Heng Fa Chuen. Divorce was finalized in 2006 with Consent Orders agreeing to 50:50 share and sale proceeds split. Plaintiff moved out in 2009 and applied for sale in 2010. Defendant opposed citing sentimental attachment and alleged oral promise not to sell. The Court considered whether Plaintiff promised not to sell Property forever, whether partition is practical, and whether Court should exercise discretion to order sale. The Court held that Plaintiff did not promise not to sell as it was not recorded in Consent Orders which contemplated sale. The Court held that partition is impractical as the Property is one undivided equal share. The Court held that sale would be beneficial and would not result in great hardship to the Defendant. The Court granted order for sale pursuant to section 6 of Partition Ordinance, Cap.352. Defendant to pay costs of HK$165,000. Defendant to vacate property by 15 November 2011. Sale proceeds split equally after mortgage and costs.
Legal issues: Promise not to sell · Impracticability of partition · Discretion to order sale
Outcome: Order for sale granted
Cites 2 cases
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DCMP 805/2010 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MISCELLANEOUS PROCEEDINGS NO.805 OF 2010 ---------------------
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--------------------------- Before : Deputy District Judge Clement Lee in Court Dates of Hearing : 27th and 28th June 2011 Date of handing down Judgment : 4th July 2011 ------------------------ J U D G M E N T ------------------------ Background 1.This is the Plaintiff’s application for an order for sale of the property under section 6 of the Partition Ordinance, Cap. 352 (“the Ordinance”). The Plaintiff and the Defendant are tenants in common in equal shares in respect of property known as UNIT 3 on the 12th FLOOR of Block 3, Heng Fa Chuen, Hong Kong. It holds 648 of equal undivided out of 4,685,000th shares of the whole development (“the Property”). The parties agreed that the present value of the Property worth over 5 million and the outstanding unpaid mortgage loan is about HK$740,000. The Plaintiff and the Defendant are ex-wife and ex-husband by relationship. They got married in 1996 and the year after the Plaintiff delivered a baby daughter to the family. They acquired the Property in 2000 by way of tenants in common in equal shares. In 2006, they had matrimonial dispute that developed into a lawsuit in the Family Court. Divorce was inevitable but fortunately they managed to come into terms in respect of ancillary relief and maintenance. The Family Court approved the consent orders on 27th October 2006 (“the Consent Orders”). Divorce decree absolute was finally made on 27th December 2006. 2.It is the Consent Orders relating to the Property that forms the crux of the dispute. The relevant parts of the Consent Orders can be found in part IV and are set out hereunder as follows:-
3.After the Consent Orders were made in October 2006, the Plaintiff and the child on one part and the Defendant continued to reside in the Property until September 2009. It is unnecessary for me to find whether the Defendant did exhibit violent behavior to hurt himself or others in the Property. Suffice for me to say that their relationship during that period was far from harmonious or cordial and the Plaintiff decided to and did move out with the child out of the Property in September 2009. The Plaintiff lodged this Originating Summons on 16th March 2010 by asking for an order for sale. 4.The Defendant maintains his opposition to the application on the grounds that he has a sentimental attachment to the Property and that the sale would cause to him great hardship. He once mentioned that I should vary the Consent Orders from 50:50 to 64:36. It is common ground that another judge conducted the pre-trial hearings did ask the Defendant to consider taking out application in the Family Court if he wishes to vary the ratio. Despite reminders and ample opportunities, the Defendant failed to take out any application in the Family Court. For the reasons given hereunder, I see no factual or legal basis to overturn the Consent Orders nor I find any material change of circumstances that I should vary the order. 5.Nonetheless, with the benefit of reading parties’ affirmations, on 6th April 2011, the said judge conducting the pre trial hearing gave leave to the parties to cross examine each other at trial and the extent of cross examination shall be within the following ambit:-
The legal principles 6.The Plaintiff invokes section 6 of the Ordinance which provides:
7.Section 2 of the Ordinance is also relevant which provides :
Issues 8.The first issue for determination is whether the Plaintiff promised to the Defendant not to sell the Property forever before the Consent Orders were made as alleged by the Defendant. The second issue is the practicability of partitioning the Property. The third issue is whether the Court should exercise the discretion to make an order for sale. Did the Plaintiff make the promise? 9.The Defendant’s main ground of opposition is that in or about August 2006, before the Consent Orders were made, he agreed to have equal share of the property on the basis of 50:50 in the event of sale because the Plaintiff promised not to sell the Property. He said that he made more contribution to the Property in the ratio of 64:36. He said unfortunately, the Plaintiff’s promise or the oral agreement was not reflected in the Consent Orders. 10.In the course of the trial, he raised that the Consent Orders were made involuntary but he did not intend to overturn the Consent Orders. It must be noted that there was frequent change of front on the part of the Defendant and his position was obscure. Regarding the allegation of involuntariness, he failed to elaborate or give particulars and it remains the bare assertion of voluntariness. Nevertheless, he clarified that nobody exerted violence or threats on him. His testimonial expansion in Court seems to me contrary to what he deposed in his 1st affirmation, paragraph 7.2. He expressed and recalled his mentality in agreeing to the Consent Orders that was rational and exhibits no sign of involuntariness. He said the words to the effect: “I do believe, both parties are responsible… if this was (the fate), (I) must look to the future, (I) hope there will not be any new conflict, to reach an agreement as soon as possible, to put an end in peace, who is at fault? It does not matter.” 11.It seems to me that his main contention is that the Plaintiff did make the promise of not to sell the Property forever. 12.I reject the allegation of involuntariness nor I accept his allegation of the Plaintiff’s promise not to sell the Property forever for the following reasons. 13.Firstly, the Defendant is well educated and has worked for different multinational companies for the past two decades. He was brought up in England from matriculation until he graduated from Loughborough University with a degree in electronic engineering. He said that before he agreed to the Consent Orders, the parties spent almost 2 months on the only issue remaining at the time, that is whether to sell the Property. In my views, had he considered such a promise was so important and the Property was of such a sentimental value to him, there was no reason why he did not ask for such a promise be recorded. Further, not only such a promise of not to sell forever was not recorded, clause (iv) of the Consent Orders reflects that the Parties contemplated that one day the Property would be sold: “should the Matrimonial Home be sold at any circumstances, after deduction of the outstanding mortgage loan, estate agent fees, legal fees and other incidental expenses; the parties shall share the net proceeds of sale in equal shares.” 14.When the Defendant was confronted with this clause, he shifted to say that any sale was subject to his consent. He would give the consent for example, if the Plaintiff gets married again or he needs money to fulfil the obligation to pay the maintenance. It seems to me that he attempted to make use of the new allegation (subject to consent) to create the impression that his untrue and belated allegation of promise appears to be reasonable and rational. 15.Thirdly, this kind of belated allegations of not to sell forever or subject to one’s consent, are not only against common sense or logic, they are against objective evidence and contemporaneous documents. 16.In essence, I have no hesitation in rejecting the Defendant’s allegation of promise. Impracticality of a partition 17.It is beyond debate that the subject matter of the Property is one undivided equal share of the land together with the sole and exclusive right and privilege to hold use occupy and enjoy the residential unit, it is not practical to contemplate a partition of the Property: Liu Chung Hang and others v Liu Chung Leung Alfred HCMP 1255/2007 dated 19th December 2007 by Recorder B Yu SC; Lam Sik Shi v Lam Sik Ying CACV 79/2010 by Hon. Le Pichon JA dated 25th May 2010. Further, it seems to me that a partition of the Property would not be beneficial to all the owners. Order for sale results in great hardship? 18.Next question is whether I should exercise the discretion to order or not to order the sale of the Property. In the first instance of the said case of Lam Sik Shi heard before Hon. Bharwaney J, the learned Judge summarized the legal principles governing the exercise of discretion as follows:
19.In that case, the defendant was the half brother of the plaintiff. He opposed to the sale on the ground that he has sentimental attachment to the property, and on the ground that a sale would not be beneficial to all the owners of the property as the property enjoys good rental income. Applying the legal principles into the factual matrix of that case, Hon. Bharwaney J made orders for sale. He held that:-
20.The defendant in that case subsequently brought the proceedings further and asked for stay of execution pending appeal. The application was dismissed by Hon Le Pichon JA. 21.In the present case, the Defendant maintains his sentimental attachment to the Property. He treats the Property as his son. The Property gives him power to spread love and help others. He said that the Property is unique and special to him. However, the photographs depict that the Property was in a mess and there was a great area in the wall next to his sleeping pillow grown with mould from dampness, which was black in colour with about 1.5 square foot in size. Had he treated the Property as special, he did not maintain it in a comfortable way. Further, if one really wishes to help others, it depends on sincerity and his heart, not depending on the Property. With such sincerity and zealous attitude, one can help others no matter where he is. Most important of all, after the sale, the Defendant might pocket more than $2 million. He could purchase a decent apartment in the country with about 700 square foot, which is sizeable enough to accommodate his audio equipment or CDs, to start a new leaf, to focus more on work, to refine his grudges, if any, and fuel up his engine again to lead to a decent life. After all, he could not deny that the Property brought to him too many unenviable memories. 22.In short, I am of the views that the sale would be beneficial to both Parties and it would not result in great hardship to the Defendant. 23.Next question is the way how the sale be conducted. This could have been complicated when such issues as whether the sale shall be conducted by way of private treaty or public auction, the reserve price, the amount payable to the estate agent or conveyancing solicitors, bearing in mind the Defendant is acting in person. I do give effect the underlying objectives under O.1A, r.1 of the Rules of the District Court and the Parties helpfully assisted the Court to further the underlying objectives under O.1A, r.3. With these concerted efforts, the parties managed to agree to a schedule resolving all the above issues including the cost of this trial in the event that the Court should make an order for sale and that the Defendant should pay the costs of this trial. This not only saves the judicial resources, it saves the Parties’ time and legal costs. 24.In a nutshell, my orders are as follows:-
Mr. Paul H.M. Leung, instructed by Messrs Chaine, Chow & Barbara Hung, for the Plaintiff The Defendant (Mr. Cheng Chi Chung): appearing in person Note: Any party wishes to have the Chinese translation of the written judgment must apply in writing on or before 18th July 2011. 注意: 如訴訟任何一方欲索取本書面判詞之中文譯本，須於2011年7月18日或以前以書面形式申請。
APPENDIX I 1. 該物業，即杏花村三座十二樓三室，於本命令發出後立即在市場以私人條約及不低於HK$5,500,000交吉交易出售，如該物業未能於本命令發出兩個月內在市場以私人條約及不低於HK$5,500,000交吉交易出售，則該物業立即以公開競投方式交吉出售，拍賣底價HK$5,000,000。 2. 美聯及中原(簡稱“地產經紀”) 被委任為該物業的地產經紀處理私人條約的買賣，其收費必須受限於賣價的1%。皓宏拍賣及估值顧問有限公司(簡稱“拍賣行”) 被委任為該物業的拍賣人，其收費必須受限於拍賣實價的0.5%。 3. 本案的訟費(包括所有保留待决的訟費及大律師費用)，由被告人支付原告人，總數經簡易評定(並取得被告人同意)為HK$165,000。 4. 被告人必須於2011年11月15日前遷出該物業，並把該物業的空置管有權交出予地產經紀或拍賣人，並把所有個人物品搬離該物業，所有餘下物品一概視為棄置的物品去處理。 5. 被告人必須清繳一切該物業的有關差餉、地稅、管理費、水電費及一切該物業的支出。 6. 一切有關出售該物業的費用，由雙方共同承擔，而扣除一切有關出售該物業的支出及償還該物業的按揭債款後，樓價尾數將分為兩等份，其中一份交予原告人，另一份則先扣除支付原告人以上的HK$165,000訟費及判令日起計利息後才交予被告人。 7. 該物業的交易日期不得早於2011年11月17日。 8. 被告人必須提供一切協助以讓準買家或買家檢視該物業。 9. 香國樑律師行(簡稱“律師行”) 被委任為負責處理買賣該物業的事宜並準備有關的合同和契約文件的律師行，其收費必須不多於HK$12,000，另加墊支費用。 10. 若然任何一方或雙方於處理買賣的律師行要求簽立一切有關出售該物業的合同和契約文件3天後依然未能親身到律師行簽立文件，則由區域法院司法常務官代為簽立。 11. 雙方可就著執行這命令的事宜向法庭隨時申請進一步的指令。 |
Cases cited in this judgment