Sun Hung Kai Credit Ltd (新鴻基信貸有限公司) v Lam Lai Wah Lindy (林麗華) [2026] 2 HKLRD 1273; [2026] HKCFI 2686 (6 May 2026) (Vincent Chen)

Vincent Chen represented the plaintiff in Sun Hung Kai Credit Ltd v Lam Lai Wah Lindy [2026] 2 HKLRD 1273; [2026] HKCFI 2686.

 P was a licensed money lender. In July 2020, P lent money to D’s husband, H, the registered owner of the former matrimonial home (the Property), secured by a second mortgage over it. In August 2021, P commenced legal proceedings against H due to his breach of the loan agreement, seeking monetary judgment and vacant possession of the Property. In November 2021, P took out a summons seeking final judgment against H. D was aware of these proceedings but decided, after receiving legal advice, not to join in or contest them. In December 2021, D commenced divorce proceedings against H and in April 2022, registered a notice of application for ancillary relief (Form A) against the Property with the Land Registry. Despite regaining vacant possession pursuant to a final judgment, P was unable to sell the Property in auctions as the registered Form A deterred prospective buyers. Hence, P took out the present application to vacate the registration of the Form A under s.19 of the Land Registration Ordinance (Cap.128), which provides that a court may vacate a lis pendens where it “is satisfied that the litigation is not prosecuted bona fide, or for other good cause shown”. D resisted the application, arguing that: (i) she had 50% beneficial interest in the Property, of which P had constructive knowledge; and (ii) she had claims for ancillary relief against H that related to the Property.

 Held, vacating the Form A, that:

• (1) D was aware of P’s claims for vacant possession of the Property and chose to take no action. D was estopped/precluded from asserting beneficial ownership over the Property due to her previous conduct and/or unjustifiable inaction. The doctrine of “estoppel by standing by” or “estoppel by silence, inaction or acquiescence” applied where a reasonable man would expect the person against whom the estoppel was raised to bring the true facts to the attention of the other party, such as where: (i) a person with a title or right to property perceived an innocent and ignorant third party of conducting himself with reference to the property in a manner inconsistent with the person’s title/right; (ii) where an owner became aware that someone was attempting to dispose of his property, his silence may be a representation that he had no title; or (iii) when a purchase was publicly transacted and a third person (knowing that he had a right in the property) did not give the purchaser notice of his rights. In the present case, P must have suffered detrimental reliance, and its position had changed (Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985, *1275 Si Tou Choi Kam v Wealth Credit Ltd [2018] 4 HKC 247 applied). (See paras.29-33.)
• (2) D was similarly estopped from relying on her claim for ancillary relief to dispute P’s interest due to her inaction. More fundamentally, the Family Court’s dispositive power under the Matrimonial Proceedings and Property Ordinance (Cap.192) could not be invoked to dispose of matrimonial properties insofar as they were subject to pre-existing encumbrances: D’s ancillary relief claims did not give her any proprietary interest that ranked before P’s mortgage over the Property (WYM v LYM [2024] HKCA 499 applied). (See paras.34-39.)
• (3) The registration of the Form A made it practically impossible for P to sell the Property. D’s concern that the Property be sold at a reasonable market price was not a justifiable reason to insist that her Form A remain registered and impede a sale. Indeed, D may have a claim over the surplus of sale proceeds (if any). In the circumstances, D’s conduct had been unreasonable and abusive (Bank of China (Hong Kong) Ltd v Fine China Capital Investment Ltd [2026] HKCFI 1199 applied). (See paras.43-47.)

[The above is excerpted from the headnote to the report in HKLRD.]