Siu Fung Knitting Factory Co. Ltd. v. Trump Well International Ltd.

CACV 64/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 64 OF 1999

(ON APPEAL FROM HCMP NO. 2408 OF 1998)

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J U D G M E N T

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Rogers, J.A. :

1. This is an appeal from a judgment of Keith J. given on 7th January this year as a result of which he made the following declarations that

1. the Defendant failed to answer the requisition raised by the Plaintiff's solicitors, Messrs. Day & Chan, in a letter dated 11th February 1998 seeking proof that Release Memorial No. 976908 had discharged and released the Mortgage Memorial No. 967893 on or before 17:00 hrs. on 12th May 1998 in accordance with the Formal Agreement of Sale and Purchase dated 6th December 1997;

2. the Defendant failed to give or show good title to Flat H, 15th Floor, Block 11, Royal Ascot, 1 Tsun King Road, Sha Tin on or before 17:00 hrs. on 12th May 1998 in accordance with the Formal Agreement of Sale and Purchase dated 6th December 1997;

3. the Plaintiff was entitled to annul the sale and purchase of the said property; and

4. the Plaintiff is, pending the return of the total deposit in the sum of HK$1,957,500.00 by the Defendant, entitled to a lien on the said property to the extent of such deposit;

and the Judge further ordered that that sum should be returned by the Defendant to the Plaintiff and that the Defendant should pay the Plaintiff its costs.

2. The facts relating to this case were set out in the judgment below and I do not propose to repeat them. In my view, the Judge below came to the correct conclusion for the correct reasons.

3. Before us the primary argument was that the Equitable Mortgage and the Legal Mortgage were one and the same encumbrance. They were clearly not. They were registered separately.

4. It was then argued that the obligations under the Equitable Mortgage would include an obligation on the part of the mortgagor to repay all subsequent amounts which may have been borrowed. This argument although it is true to a limited extent does, of course, fail for the simple reason that a lender may lend more money subsequently and have further documents executed in its favour and is entitled to have registered any subsequent document in respect of a later loan. One point emerged during the course of argument was that the Deed of Release was executed on 17th June 1997 but the Legal Charge with which the Plaintiff was concerned and about which it raised the requisition, was only registered a month later on 22nd July 1997.

5. In my view, the Plaintiff was entitled to require this charge which had been registered against the property to be removed and to be satisfied that it was no longer in existence. The Defendant failed to do that. In my view this appeal should be dismissed.

Mayo, J.A. :

6. I agree.

Mortimer, V-P :

7. I also agree.