Late re-registration of charging orders does not affect priority vis-a-vis charging orders antecedent to the re-registration

The Land Registration Ordinance requires charging orders to be registered. Section 17 of the same ordinance requires them to be re-registered every 5 years. Where there are two charging orders, A and B, with A initially having priority over B, the later re-registration (or failure to re-register within the stated time period) does not give B priority over A (even during the period before B needs to re-register). Failure to re-register only affects A’s priority vis-a-vis interests that arise after A’s failure to re-register on time.

In Incorporated Owners of Century Centre v Bank of China (Hong Kong) Ltd ([2011] HKEC 864) Bank of China obtained and registered charging orders nisi and absolute in respect of certain property in 2001. HSBC obtained and registered  charging orders nisi and absolute in respect of the same property in 2002. Section 17 of the same ordinance requires them to be re-registered every 5 years. Each bank made its first re-registration within 5 years and Bank of China made its second re-registration in 2010 (a few weeks late). HSBC argued that it had priority (even if re-registration occurred within time) because the effect of re-registration was that the re-registered charging order was postponed to any existing registered charging orders. This argument failed. The re-registered charging order retained whatever priority it had previously enjoyed as against interests (including other charging orders). Were it not so, the priority of one interest over another would vary depending upon when the question of priority had to be addressed. Thus, on HSBC’s argument, it would enjoy priority from 2010 (the date of Bank of China’s registration) until the time came for it to re-register (when Bank of China would resume priority). Authority and principle were against HSBC’s submission. Bank of China had priority.


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