Archive for the ‘Lis pendens’ Category

Land Registration Ordinance: a lis pendens involves a claim to a proprietary interest

January 27, 2016

In Wide Power Corp Ltd v Manhattan Court (IO) ([2015] 4 HKLRD 480, CFI) the incorporated owners of a building sought an injunction requiring an owner to remove unauthorised building works carried out in breach of the DMC. They registered the claim as a lis pendens. The owner successfully argued that the counterclaim did not relate to land or any interest or charge on land and so did not fall within the definition of a lis pendens in section 1A of the Land Registration Ordinance. A lis pendens must involve a claim to a proprietary interest or right in real property (Louis Chan J. at [76]). Here, the claim was an in personam claim against the owner. If the owner were to sell the property, the new owner would not be affected by the proceedings against the former owner. He would, of course, be liable under the terms of the DMC but this would involve a fresh claim against the new owner.

Michael Lower

A lis pendens must affect land

December 23, 2015

In Luen Ford Industrial Co Ltd v Woo Ming Han Juliana ([2015] HKEC 2639, CFI) D alleged that her father had procured her late mother’s execution of a transfer of the mother’s shares in a company (‘the parent company’) through the exercise of undue influence.  Her primary claim was for a declaration that the transfer was null and void. A subsidiary of the parent company (‘the subsidiary’) owned an industrial unit (‘the property’). D also sought orders preventing the subsidiary from selling the property or, alternatively, from disposing of the proceeds of sale. D’s solicitor registered the writ as a lis pendens against the property.

Deputy Judge Kenneth Kwok SC  ordered the registration to be vacated pursuant to section 19 of the Land Registration Ordinance. He referred to Thian’s Plastics Industrial Company Limited v Tin’s Chemical Industrial Company Limited and Anstalt Nybro v HK Resort Company Limited. This litigation did not affect land. There was no action against the owner of the land (the subsidiary). The action concerned the father and the parent company and their future conduct. The claim for an injunction to restrain the sale of the land was an artifice designed to give the appearance that there was a claim affecting land:

‘The registration was a blatant tactical move to bring about a standstill in the sale of the Subject Property. What is objectionable is that Juliana Woo and her then solicitors did not seek judicial approval to achieve her objective. Instead, they simply abused the registration system.’ ([33])

The alternative claim restraining the disposal of the sale proceeds was adequate protection for D.

The judgment closes with this warning:

‘Registration of a lis pendens is a clog on the owner’s title. Those who act in concert to procure registration of a lis which does not affect land should beware of possible liability.’ ([36])

Costs were awarded against D on an indemnity basis.

Michael Lower

The court’s power to vacate a lis pendens

December 2, 2015

In Join Win Holdings Ltd v City Target Ltd ([2015] HKEC 2477, CA) the first instance judge dismissed P’s claim for a declaration that it had entered into an oral contract for the acquisition of D1’s property and for specific performance of that contract. There was no writing to satisfy section 3(1) of the Conveyancing and Property Ordinance and part performance had not been pleaded. The judge had also ordered that the lis pendens registered at the Land Registry be vacated. P appealed against this judgment and registered the notice of appeal as a lis pendens at the Land Registry. D1 successfully applied for the vacation of the notice of appeal from the Land Registry.

The Court of Appeal (Cheung JA giving the only full judgment) referred to the court’s power under section 19 of the Land Registration Ordinance to order the vacation of a lis pendens when it is satisfied that ‘the litigation is not prosecuted bona fide, or for other good cause shown.’ It also pointed to its inherent jurisdiction to order the vacation of a registration.

In deciding whether or not to vacate the registration, the court had to assess the merits of the appeal. This appeal was doomed to fail given the lack of any writing to satisfy section 3(1) ([2.11]). ‘The notice of appeal should never have been registered because putting the plaintiff’s case at its highest it is not one that can be said to affect the property.’ ([2.16]).

Michael Lower

 

Registration of lis pendens when the dispute concerns ownership of shares of company owning the relevant land

October 22, 2012

In Lau King Teng v Cheng Miu Har ([2008] 4 HKLRD 563, CFI) D claimed that M held the shares in three companies partly in  trust for D. The companies’ assets comprised interests in land. D issued a writ seeking injunctions to prevent any dealings in the properties. The writ was then registered as a lis pendens. The Court accepted that this was legitimate even though, strictly speaking, D was claiming an interest in the shares and not in the property.

Vacation of registered lis pendens

June 18, 2012

Yeung Tsz Ying v Shen Frieda Tong ([2012] HKEC 844) concerned an application for an order to vacate a registered lis pendens under section 19 of the Land Registration Ordinance on the grounds that it was not prosecuted bona fide or for other good cause. The court expressed the view that the section was concerned with the process or handling of the litigation rather than the reasons behind its institution (para. 18). It was a question of whether the plaintiff had been dilatory in prosecuting the action. This certainly could not be said of the plaintiff in these proceedings. The court went on, out of caution, to consider whether there was any bad faith involved in bringing the litigation and found that this was not self-evidently so and the matter would need to be explored at a trial of the action.

Registration of application for ancillary relief as a lis pendens

May 18, 2012

In Choi Sung Po v Lai Woon Lan ([2012] HKEC 563) C and L had divorced in 2010. After that C bought a flat in his own name and C and S bought a flat as joint tenants. L amended her application for ancillary relief (Form A) to include an application for a settlement of property order and a transfer of property order in respect of these two properties. This was registered at the Land Registry against the properties. C sought to have the registration vacated. The Court pointed out that since the Form A was prima facie registable, the burden was on C to show why the registration had been vacated. He had failed to discharge this burden.

Beneficiary seeking order for sale / account in an interlocutory application

November 9, 2011

In Lam Sik Shi v Lam Sik Ying ([2008] HKEC 1048) P was the beneficiary under a trust of his late father’s estate. D1, his half-brother, was the trustee. D2 was a company which had bought property forming part of the trust estate. P alleged that the sale was at an undervalue and he sought a declaration that the sale was void or voidable. He sought to have D2 account as constructive trustee. A lis pendens had been registered. In an interlocutory hearing, P sought an order for sale with the proceeds to be paid into court pending the final hearing or, alternatively, the appointment of a receiver. The court refused to make either order. P’s position was adequately protected by the registration of the lis pendens.

Michael Lower