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Ego Finance Ltd v Cham Kin Man

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date25 June 2018
Neutral Citation[2018] HKDC 741
Judgement NumberDCMP3389/2017
Citation[2018] 3 HKLRD 341
Year2018
Subject MatterMiscellaneous Proceedings
CourtDistrict Court (Hong Kong)
DCMP3389/2017 EGO FINANCE LTD v. CHAM KIN MAN

DCMP 3389/2017

[2018] HKDC 741

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3389 OF 2017

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IN THE MATTER of the property referred to known as ALL THOSE 48 equal undivided 279026th parts or shares of and in ALL THOSE pieces or parcels of ground registered in the Land Registry as SHA TIN TOWN LOT NO. 506 (FLAT 09 ON 20/F of CYPRESS HOUSE (BLOCK 3) (INCLUDING THE PLANTERS/PLANTER BOXES APPERTAINING THERETO), KWONG YUEN ESTATE, NO. 68 SIU LEK YUEN ROAD, SHATIN, NEW TERRITORIES)(“the Property)
and
IN THE MATTER of (i) a Charging Order Absolute Imposing Charge on Beneficial Interest in Land dated 15 October 2014 under District Court Civil Acton No. 4506 of 2011 and registered in the Land Registry by Memorial No. 14103100900013; and (ii) a Charging Order Absolute Imposing Charge on Beneficial Interest in Land dated 26 June 2013 under District Court Civil Action No. 3 of 2013 and registered in the Land Registry by Memorial No. 13071500210015
and
IN THE MATTER of Order 50 rule 9A and Order 88 of the Rules of District Court, Cap. 336 of the Laws of Hong Kong

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BETWEEN
EGO FINANCE LIMITED Plaintiff
and
CHAM KIN MAN Defendant

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Before: Master Liza Tung in Chambers (Open to Public)
Date of Hearing: 31 May 2018
Date of Decision: 25 June 2018

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DECISION

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Introduction

1. This is an application of the plaintiff by way of an Originating Summons dated 6 December 2017 to seek, inter alia, an Order for Sale of the defendant’s property known as all those 48 equal undivided 279026th parts or shares of and in all those pieces or parcels of ground registered in the Land Registry as Sha Tin Town Lot No 506 (Flat 09 on 20/F of Cypress House (Block 3) (including the planters/planter boxes appertaining thereto), Kwong Yuen Estate, No 68 Siu Lek Yuen Road, Shatin, New Territories) (“the Property”) to enforce two Charging Orders Absolute:-

(a) A Charging Order Absolute dated 26 June 2013 pursuant to a judgment dated 23 April 2013 in DCCJ 3/2013; and

(b) A Charging Order Absolute dated 15 October 2014 pursuant to a judgment dated 25 March 2014 in DCCJ 4506/2011

(collectively “the Charging Orders”).

2. At the time of the making of the Charging Orders, the defendant and his mother Madam Mui Sui Sim (“Madam Mui”) were the joint tenants of the Property. Each of the Charging Orders provides that “the interest of the defendant Cham Kin Man in the asset specified in the schedule hereto stand charged with the payment of” the judgment debt together with interest and costs, etc. The respective schedules to the Charging Orders specify the whole Property without mentioning the defendant’s interest as a joint tenant.

3. According to the land search records as at 31 May 2018:-

(a) apart from the Charging Orders, the following encumbrances are registered against the defendant’s interest in the Property:-

(i) Charging Order Nisi dated 8 November 2012 and Charging Order Absolute dated 14 December 2012 in DCCJ 3417/2012 in favour of Citibank (Hong Kong) Ltd;

(ii) Charging Order Nisi dated 19 November 2012 and Charging Order Absolute dated 20 December 2012 in DCCJ 3001/2012 in favour of Rise Honest International Ltd;

(iii) A Chinese Order dated 16 April 2013 in DCCJ 3001/2012 in favour of Rise Honest International Ltd;

(iv) Charging Order Nisi dated 2 December 2014 and Charging Order Absolute dated 2 January 2015 in DCCJ 3001/2012 in favour of Rise Honest International Ltd; and

(b) the following encumbrances are registered against the interest of both the defendant and Madam Mui:-

(i) Memorandum of Charge dated 23 July 2013 by Chevalier Property Management Ltd for outstanding management fees;

(ii) Charging Order Nisi dated 2 March 2016 and Charging Order Absolute dated 13 June 2016 in DCMP 713/2016 in favour of Secretary for Justice for arrears of rates and government rent.

4. Madam Mui passed away on 5 April 2017 and her Death Certificate dated 23 November 2017 was registered on 27 November 2017.

5. Relying on the Valuation Report dated 2 January 2018 prepared by Citiland Surveyors Ltd, the plaintiff contends that there should be sufficient net equity in the Property to settle the debts due under the Charging Orders (which is in excess of $430,000.00 in total) after deduction of estimated costs and expenses for the sale and moneys due to prior encumbrancers.

6. By the defendant’s “Defence” filed on 22 January 2018 and his affidavit filed on 26 March 2018, he explains his difficulties in the past years, his futile efforts in trying to resolve his financial problems, and expresses his grave concern that the Property may be sold for less than its true market value by the plaintiff; he does not dispute his liabilities owed to the plaintiff under the Charging Orders. His Legal Aid application filed in February 2018 was refused in April 2018.

7. The plaintiff is seeking an order for sale for the Property as a whole. The issues before the court are:-

(a) Whether the joint tenancy between the defendant and Madam Mui was severed by virtue of the Charging Orders (or previous charging orders) against the defendant’s interest alone; and

(b) If not, whether the Charging Orders now cover the defendant’s interest in the whole of the Property subject to prior encumbrances.

The First Issue: whether the joint tenancy between the defendant and Madam Mui was severed by various charging orders against the defendant’s interest alone

8. S 52AB(3) of the District Court Ordinance, Cap 336 of the Laws of Hong Kong, provides that a charge imposed by a charging order has the same effect and is enforceable in the same courts and in the same manner as an equitable charge created by the judgment debtor by writing under his hand.

9. Counsel for the plaintiff refers me to the recent case of Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 where Lam V-P observed that there were conflicting local authorities in respect of the question whether the making of a charging order would have the effect of equitable severance, but decided to leave the issue open for debate on another occasion since the Court of Appeal ruled that a third party had successfully established her beneficial interest in the property concerned. The two conflicting local authorities on this issue are: Ho Wai Kwan v Chan Hon Kuen [2015] 1 HKLRD 901 and Malahon Credit Co Ltd v Siu Chun Wah Alice[1988] 1 HKLR 196.

10. In Ho Wai Kwan, a charging order was made against the interest of one of the joint tenants C who later managed to discharge the same before passing away 3 years later. The surviving joint tenant W sold the property as the sole owner, and after a couple of sale transactions, issue was raised by subsequent purchasers as to whether W had good title in the whole property to assign to his successors in title.

11. After conducting detailed analysis of extensive authorities in different jurisdictions and due consideration of commentaries and text books on well-established legal principles governing joint tenancies, DHCJ Simon Leung made the following observations and findings in the Court of First Instance:-

(a) A joint tenancy is characterized by the unities of possession, interest, title and time; a joint tenancy would sever if any one of the unities ceases to exist.

(b) Under s 8(1) of the Conveyancing and...

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