FARICHO INVESTMENT LTD v. GOOD TIME FINANCE LTD

FARICHO INVESTMENT LTD v. GOOD TIME FINANCE LTD

The express provisions of the Legal Charge relied on by the mortgagee cannot override the mortgagor's equity of redemption; the mortgagee's entering into sale and purchase agreements after an 11-day default (corrected by payment), while failing to provide a proper breakdown of the redemption sum and acting clandestinely, constituted a fetter on the equity of redemption and entitled the mortgagor to the declaratory relief and injunctions sought.

Citation
FARICHO INVESTMENT LTD v. GOOD TIME FINANCE LTD
Parties
Plaintiff (original Action; 1st Defendant in Counterclaim): Faricho Investment Limited; Defendant (original Action; Counterclaim Plaintiff): Good Time Finance Limited; 2nd Defendant (counterclaim): YU PAK YUN; 3rd Defendant (counterclaim): IE PEK SIN PRENCETON
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 July 2006
Case Number
HCA2496/2005
Procedural Posture
Civil Mortgage (equity of Redemption); Declaratory Relief and Injunctions / Order 14 Interlocutory Proceedings (judgment on Declarations and Injunctions)
Outcome
Declarations granted in favour of the plaintiff; injunctions granted to restrain completion of the sale and purchase agreements; claim for damages adjourned for assessment; costs and consequential directions to be heard.
Legal Topics
Equity of Redemption, Mortgagee's Power of Sale, Declaratory Relief, Interim Injunction, Redemption Notice, Calculation of Redemption Sum
Source Language
EN
Property Law Equity Mortgage Law Civil Procedure Injunctions Equity of Redemption Mortgagee's Power of Sale Declaratory Relief +3 more

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Parties

Faricho Investment Limited

Plaintiff (original Action; 1st Defendant in Counterclaim)

Good Time Finance Limited

Defendant (original Action; Counterclaim Plaintiff)

YU PAK YUN

2nd Defendant (counterclaim)

IE PEK SIN PRENCETON

3rd Defendant (counterclaim)

Procedural Posture

Civil Mortgage (equity of Redemption); Declaratory Relief and Injunctions / Order 14 Interlocutory Proceedings (judgment on Declarations and Injunctions)

Legal Issues

  1. 1 Whether a mortgagee can validly enter into sale and purchase agreements after an 11-day default subsequently remedied by payment
  2. 2 Whether express terms in a legal charge can override the mortgagor's equity of redemption
  3. 3 Whether a demand by the mortgagee removes the six months' notice requirement and the importance of posting vs receipt of such demand

Ratio Decidendi

The express provisions of the Legal Charge relied on by the mortgagee cannot override the mortgagor's equity of redemption; the mortgagee's entering into sale and purchase agreements after an 11-day default (corrected by payment), while failing to provide a proper breakdown of the redemption sum and acting clandestinely, constituted a fetter on the equity of redemption and entitled the mortgagor to the declaratory relief and injunctions sought.

Court Disposition

Declarations granted in favour of the plaintiff; injunctions granted to restrain completion of the sale and purchase agreements; claim for damages adjourned for assessment; costs and consequential directions to be heard.

Orders

  • Declarations in the terms sought by the plaintiff are granted
  • Interim injunctions restraining completion of the two sale and purchase agreements are continued/granted