WINLAND FINANCE LTD v. GAIN HERO FINANCE LTD

WINLAND FINANCE LTD v. GAIN HERO FINANCE LTD

The Winland Agreement did not create an interest in land registrable under the LRO; at best it created an equitable assignment of future sale proceeds and the deposit of title deeds did not effect an immediate equitable mortgage inconsistent with the written terms; a Charging Order Absolute imposed a charge on the debtor's beneficial interest in the Property and therefore has priority over Winland's unregistrable equitable interest in future sale proceeds; accordingly Gain Hero's originating summons succeeds and Winland's counterclaim is dismissed.

Citation
[2019] HKCFI 771
Parties
Plaintiff (hcmp 1980/2017); Defendant (hcmp 2671/2017): Gain Hero Finance Limited; Defendant (hcmp 1980/2017); Plaintiff (hcmp 2671/2017): Winland Finance Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
21 March 2019
Case Number
HCMP2671/2017
Procedural Posture
Originating Summons (consolidated) / Decision at First Instance (court of First Instance)
Outcome
Grant Gain Hero judgment in terms of Originating Summons HCMP 1980/2017; dismiss Originating Summons HCMP 2671/2017 (Winland)
Legal Topics
Charging Order, Equitable Mortgage, Assignment of Sale Proceeds, Registration Under Land Registration Ordinance, Non Alienation Covenants, Priority of Claims, Public Policy (clean Hands)
Source Language
EN
Property Law Equity Land Registration Enforcement/execution Contract Law Charging Order Equitable Mortgage Assignment of Sale Proceeds +4 more

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Parties

Gain Hero Finance Limited

Plaintiff (hcmp 1980/2017); Defendant (hcmp 2671/2017)

Winland Finance Limited

Defendant (hcmp 1980/2017); Plaintiff (hcmp 2671/2017)

Procedural Posture

Originating Summons (consolidated) / Decision at First Instance (court of First Instance)

Legal Issues

  1. 1 Whether Winland Agreement intended to create an interest in land registrable under the Land Registration Ordinance
  2. 2 Whether delivery of title deeds created an equitable mortgage
  3. 3 Whether Non-Alienation Covenants annul any security created by Winland

Ratio Decidendi

The Winland Agreement did not create an interest in land registrable under the LRO; at best it created an equitable assignment of future sale proceeds and the deposit of title deeds did not effect an immediate equitable mortgage inconsistent with the written terms; a Charging Order Absolute imposed a charge on the debtor's beneficial interest in the Property and therefore has priority over Winland's unregistrable equitable interest in future sale proceeds; accordingly Gain Hero's originating summons succeeds and Winland's counterclaim is dismissed.

Court Disposition

Grant Gain Hero judgment in terms of Originating Summons HCMP 1980/2017; dismiss Originating Summons HCMP 2671/2017 (Winland)

Orders

  • Grant Gain Hero judgment in terms of the Originating Summons in HCMP 1980/2017
  • Dismiss Originating Summons in HCMP 2671/2017