A A

B B
DCMP 1233/2018

C
[2020] HKDC 891 C

D D
IN THE DISTRICT COURT OF THE

E HONG KONG SPECIAL ADMINISTRATIVE REGION E

MISCELLANEOUS PROCEEDINGS NO 1233 OF 2018

F F

G ------------------------- G

H
IN THE MATTER OF Flat D on 2nd H
Floor of Block 1, Manor Centre, No
213 Un Chau Street, Kowloon, Hong
I I
Kong (“the Property”)
and
J J
IN THE MATTER OF Section 6(1)
K and/or (3) of the Partition Ordinance, K
Cap 352
L L
-------------------------

M BETWEEN M

PINS CREDIT MANAGEMENT CO., LIMITED Plaintiff

N N
and
O TSE TAI YIM 1st Defendant O

CHEUNG FUNG LING 2nd Defendant

P P
-------------------------
Q Q

Before: Her Honour Judge Phoebe Man in Chambers (Open to Public)

R R
Date of Hearing: 28 September 2020
S Date of Decision: 15 October 2020 S

T T

U U

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A A

B B
---------------------

C
DECISION C
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D D

E Background E

F F
1. The plaintiff is a money lender. Under a loan agreement
G dated 9 November 2016, the plaintiff lent HK$750,000 to the 1 st G

defendant and another borrower, Li Koi Hop Philip (“Li”) (the “Loan
H H
Agreement”). On 6 March 2018, the plaintiff obtained judgment in
I default of notice of intention to defend under DCCJ 5395/2017 against I

both the 1st defendant and Li for the sum of HK$889,956.16 together with
J J
interest. The sum remains outstanding and due.
K K

2. The 1st defendant had charged her interest in Flat D on the

L L
2nd Floor of Block 1, Manor Centre, No 213 Un Chau Street, Kowloon,
M Hong Kong (the “Property”) in favour of the plaintiff pursuant to a M

tripartite legal charge dated 6 February 2015 (the “Legal Charge”), as

N N
security for the general credit facilities made available by the plaintiff to
O the 1st defendant and Li. O

P P
3. The plaintiff applied by originating summons dated 4 May
Q 2018 (the “Originating Summons”) for an order for sale under section 6 Q

of the Partition Ordinance (Cap 352) (the “Ordinance”).

R R

S 4. The 1st defendant is the mother of the 2nd defendant. The 1st S

and 2nd defendants held the Property as tenants-in-common in equal

T T
shares.
U U

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A A

B B

C
5. Despite having filed a notice of intention to defend dated 18 C
nd
May 2018, the 2 defendant did not appear at the substantive hearing of
D D
the Originating Summons. The 1st defendant was also absent. The 1st and

E 2nd defendants also did not file any evidence to contest the Originating E

Summons.
F F

G 6. At the substantive hearing on 20 December 2019, I was G

satisfied that the 1st defendant and the 2nd defendant had been duly served
H H
and had notice of the hearing. The hearing thus proceeded in their
I absence. On 16 January 2020, judgment (the “Judgment”) was handed I

down and I held that it was fair and just to make an order for sale of the
J J
Property under the Partition Ordinance. I made the following orders (the
K “Order”):- K

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(1) The 1st and 2nd defendants do deliver up vacant
M possession of the Property to the plaintiff within 28 M

days after service of this Order;

N N

O (2) Upon the 1st defendant paying to the plaintiff the sum O

of HK$889,956.16 together with interest on the sum

P P
of HK$750,000.00 at the rate of 26.40% per annum
Q from 24 November 2017 until payment and the costs Q

of the action HK$10,500.00, being the outstanding

R R
Judgment Debt in DCCJ 5395/2017 under the
S Judgment dated 6 March 2018 and costs of these S

proceedings, the plaintiff do redeliver possession of

T T
st nd
the Property to the 1 and 2 defendants, and release
U U

V V
A A

B B
the 1st defendant from the security constituted by the

C
Mortgage; C

D D
(3) In the event the 1st defendant failed to make payments

E adjudged in paragraph (2) above together with costs E

for these proceedings, the 1st and 2nd defendants do

F F
deliver vacant possession and title deeds and
G documents of the Property to the plaintiff. The G

Property be sold pursuant to section 6 of the Partition

H H
Ordinance (Cap 352) at open market value not less
I than HK$4,500,000.00; I

J J
(4) Upon such sale, the 1st and 2nd defendants shall do all
K necessary acts for the transfer of their legal title and K

beneficial interest in the said Property to the

L L
purchaser;
M M

(5) The proceeds of sale of the Property shall be applied

N N
in the following manner and order of priority:-
O O

(a) in discharge of all rent, taxes, rates and other

P P
outgoings due and affecting the Property;
Q Q

(b) in payment for the discharge of all

R R
encumbrances having priority to the Legal
S Charge (including the costs and disbursements S

for handling such encumbrances);

T T

U U

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A A

B B
(c) in payment of all reasonable costs and expenses

C
of the sale (including conveyancing costs up to C
HK$20,000.00, estate agent commission up to
D D
1% of the sale price);

E E

(d) the remaining net balance be split into two

F F
halves:-
G G

1) as for the first half:-

H H

I (i) payment to the 2nd defendant who I

owns half of the Property with the

J J
1st defendant; if the 2nd defendant
K could not be located, such sum K

shall be paid into court for the

L L
credit of the 2nd defendant.
M M

2) as for the second half:-

N N

O (i) payment to discharge the Legal O

Charge (memorial number:

P P
15021100200458) in favour of the
Q plaintiff; Q

R R
(ii) in payment of all plaintiff’s costs
S of these proceedings, to be S

summarily assessed and the fee for

T T
the valuation report for the
U U

V V
A A

B B
Property in the sum of

C
HK$6,000.00; and C

D D
(iii) the balance, if any, after deduction

E of the costs and disbursements for E

handling the encumbrance

F F
affecting the Property; to the 1st
G defendant; if the 1st defendant G

could not be located, such sum

H H
shall be paid into court for the
I credit of the 1st defendant. I

J J
(6) There be liberty to apply, including for (but without
K limitation to) directions on the terms and manner of K

the sale of the Property.

L L

M Current application M

N N
7. Subsequent to the grant of the Order, the plaintiff tried to
O contact the 2nd defendant but to no avail. On 13 March 2020, the 2nd O

defendant took out a summons to set aside or to stay the execution of the
P P
Order.
Q Q

8. It was revealed for the first time under the 2 nd defendant’s

R R
st
supporting affirmation filed on 13 March 2020, that the 1 defendant had
S in fact passed away on 13 November 2019, prior to the date of the S

hearing. Neither the plaintiff nor the court had notice of this fact at the
T T
time of the hearing on 20 December 2019.
U U

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A A

B B

C
9. The plaintiff subsequently took out a summons dated 23 July C
2020 for an order that:-
D D

E (1) the 2nd defendant be appointed to represent the estate E

for the purpose of the present proceedings;

F F
alternatively, the present action be continued in the
G absence of a person representing the estate of the 1 st G

defendant.
H H

I (2) paragraph 3 of the Order be varied to cover I

circumstances where the title deeds are not available

J J
to the plaintiff, the Property be sold at open market
K value not less than HK$3,110,000. K

L L
Legal principles
M M

10. A tenant-in-common’s interest will pass onto his/her estate

N N
on their death1.
O O

11. Upon the death of the 1st defendant, who is intestate, section
P P
10 of the Probate and Administration Ordinance (Cap 10) (the “PAO”)
Q applies:- Q

R R
“Where any person dies, whether in Hong Kong or elsewhere,
leaving estate in Hong Kong in respect of which he dies intestate,
S S
such estate shall vest in the Official Administrator who may, if he

T T
1
§8.04, Butterworths Hong Kong Conveyancing and Property Law Handbook 
U U

V V
A A

B thinks fit, receive and take possession of the same until B

administration is granted in respect thereof.”

C C

12. In the case of the death of one of several defendants, if the

D D
defendants are jointly and severally liable and where the cause of action
E survives, the action may, on the death of a defendant, be continued E

against the survivors, or against the representative of the deceased and the
F F
2
survivors .
G G

13. Order 15 rule 7(2), (3) of the Rules of the High Court
H H
provides:-
I I

“(2) Where at any stage of the proceedings in any cause or

J matter the interest or liability of any party is assigned or J
transmitted to or devolves upon some other person, the Court may,
K if it thinks necessary in order to ensure that all matters in dispute K
in the cause or matter may be effectually and completely
determined and adjudicated upon, order that other person to be
L made a party to the cause or matter and the proceedings to be L
carried on as if he had been substituted for the first mentioned
party.
M M

…
N N
(3) An order may be made under this rule for a person to be
made a party to a cause or matter notwithstanding that he is
O O
already a party to it … on the same side but in a different capacity;
but ---
P P
…

Q (b) if he is already a party on the same side but in Q

another capacity, the order may contain a direction that he
R
shall cease to be a party in that other capacity.” R

S Analysis S

T T

2
§15/7/9, Hong Kong Civil Procedure 2020
U U

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A A

B B
14. It cannot be denied that upon the death of the 1st defendant,

C
her interest had changed. Upon the death of the 1 st defendant, who is C
intestate, her estate shall vest in the Official Administrator according to
D D
section 10 of the PAO.

E E

15. Thus, at the time when the Judgment was handed down, the
F F
1st defendant no longer had title to the Property. A reconstitution of the
G action is thus necessary upon the passing of the 1st defendant. This is G

accepted by Ms Yeung, appearing for the plaintiff.

H H

I 16. An order under Order 15 rule 7 essentially provides the I

procedure for reconstituting an action, where this is necessary and

J J
possible, in the event of certain changes affecting a party or the interest or
K liability of a party3. K

L L
17. Upon the passing of the 1st defendant, a reconstitution of the
M action is necessary. It must then follow that no further action ought to M

have been taken until the action was reconstituted. Accordingly, the
N N
Judgment and Order granted by the court without realizing the 1 st
O defendant had already passed away should not have been entered and O

granted and the Judgment was irregular.

P P

Q 18. I am thus of the view that the Judgment and Order ought to Q

be set aside for irregularity.

R R

S Form of order under Order 15 rule 7 S

T T

3
§15/7/1, Hong Kong Civil Procedure 2020
U U

V V
A A

B B
19. As the Property was held by the 1st defendant and the 2nd

C
defendant as tenants-in-common, the 1st defendant’s interest in the C
Property would pass onto her estate upon her death. In those
D D
circumstances the court should grant a carry-on order appointing

E someone to represent the 1st defendant’s estate. E

F F
20. As the plaintiff would require an order that binds both
G tenants-in-common, (the 1st defendant’s estate and the 2nd defendant) I do G

not think it is appropriate to ask the 2 nd defendant to cease being a party

H H
under Order 15 rule 7 (3)(b) of the Rules of the High Court.
I I

21. The 2nd defendant informed the court that no grant of probate
J J
has been made. “Where no grant of probate or administration has been
K made, the order should be for the appointment of a person to represent K

the estate of the deceased for the purpose of the proceedings and that the
L L
proceedings be carried on against the person so appointed.4”
M M

22. Thus, in the present case an order to carry on the

N N
proceedings should appoint a person to represent the estate of the 1 st
O defendant. O

P P
23. The plaintiff has asked that the 2nd defendant be appointed.
Q The 2nd defendant also indicated that she has no objection to being Q

appointed. The 1st defendant died intestate. Although there might be

R R
nd
potential conflict of interest between the estate and the 2 defendant, this
S conflict is academic as the 1st defendant has no other issue and the 2nd S

defendant is the sole beneficiary to the 1st defendant’s estate.

T T

4
§15/6A/6, Hong Kong Civil Procedure 2020
U U

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A A

B B

C
Conclusion C

D D
24. I will allow the Judgment and Order to be set aside. A carry

E on order would be granted to appoint the 2nd defendant to represent the E

estate of the 1st defendant.

F F

G Costs G

H H
25. There is no dispute between the parties that costs of the
I plaintiff’s summons dated 23 July 2020 (except for the costs involved in I

paragraph 2 of the said summons) should be in the cause. In relation to

J J
paragraph 2 of the said summons, the issue of costs is reserved. I gave
K leave for the 2nd defendant to put in evidence to rebut the plaintiff’s K

allegation that they had tried to contact the 2nd defendant in relation to the
L L
title deeds but to no avail.
M M

26. As to the costs of the 2nd defendant’s summons dated 13

N N
March 2020, I am of the view that the fair costs order should be for the 1 st
O and 2nd defendant to pay half of the costs of and occasioned by the O

entering of the said judgment and of its setting aside, including the costs
P P
of this application for the following reasons:-
Q Q

(1) The plaintiff needs to pursue the action against both

R R
st nd
the 1 defendant and the 2 defendant. Ms Yeung
S accepts that the plaintiff bears the responsibility of S

ensuring that all parties were properly constituted. As

T T
such, the plaintiff was partly at fault for not having
U U

V V
A A

B B
ascertained that the parties were correctly constituted

C
when they proceeded with the application in C
December 2019. Ms Yeung tried to argue that they
D D
should not be responsible for the costs as the death

E certificate was not available, and they would not have E

been able to find out that the 1st defendant had passed
F F
away even if they had tried. However, a form 11,
G certificate of order authorizing cremation of the 1 st G

defendant’s body was issued on 14 November 2019 by

H H
the Coroner, after which the body of the 1 st defendant
I could be buried. There is no evidence to suggest that I

the plaintiff had carried out a search and no result was

J J
forthcoming. The fact is that the plaintiff had not in
K fact carried out any search with the Births and Deaths K

Registry. I reject that the plaintiff’s argument that

L L
they bear no responsibility for the costs involved to set
M aside the Judgment. M

N N
(2) The 2nd defendant is also at fault for not informing the
O plaintiff and the court promptly upon the death of the O

1st defendant. The excuse given was that the 2nd

P P
defendant was too devastated and pre-occupied with
Q the death of the 1st defendant at the time and failed to Q

inform the court or the 1st defendant promptly. The 2nd

R R
defendant accepts that she bears some responsibility
S for the costs involved in setting aside the Judgment. S

T T

U U

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A A

B B
(3) In the circumstances I find it fair that the plaintiff

C
should bear half of the costs involved in the setting C
st nd
aside of the Judgment, whereas the 1 and 2
D D
defendants together should be responsible for the

E other half of the relevant costs. E

F F
Order
G G

27. I will make an order as follows:-

H H

I In relation to the 2nd defendant’s summons dated 13 March I

2020:-
J J

K (1) The judgment dated 16 January 2020 and the orders K

therein be set aside;

L L

M (2) Costs of and occasioned by the entering of the said M

judgment and of its setting aside, including the costs

N N
of this application be borne by the plaintiff as to 50%
O and the other 50% to be borne by the 1st defendant and O

the 2nd defendant jointly and severally, to be taxed if

P P
not agreed.
Q Q

R R

S S

T T

U U

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A A

B B
In relation to the plaintiff’s summons dated 23 July 2020:-

C C
(1) Cheung Fung Ling be appointed to represent the estate
D D
of Tse Tai Yim, deceased for the purpose of carrying

E on these proceedings; E

F F
(2) the action be carried on between the plaintiff, Cheung
G Fung Ling representing the estate of Tse Tai Yim, G

deceased, and the 2nd defendant;

H H

I (3) Paragraph 2 of the summons is dismissed. The costs I

in relation to paragraph 2 of the summons be reserved;

J J

K (4) In relation to the issue of costs of paragraph 2 of the K

summons, the 2nd defendant do have leave to file and

L L
serve an affirmation to respond to paragraph 18 of the
M 4th affirmation of Lam To Man within 14 days hereof. M

The plaintiff do have leave to file and serve an

N N
affirmation in reply (if any) within 14 days thereafter;
O O

(5) Other than costs incurred in relation to paragraph 2 of

P P
the summons, costs of this application be in the cause.
Q Q

Other directions
R R

S 28. The plaintiff do have leave to list the application for S

substantive arguments with 2 hours reserved.

T T

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A A

B B

C C

D D
( Phoebe Man )
District Judge
E E

F Ms R Yeung, of Cheung & Choy, for the plaintiff F

G The 1st defendant is not represented and absent G

H
The 2nd defendant is not represented H

I I

J J

K K

L L

M M

N N

O O

P P

Q Q

R R

S S

T T

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