THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD v. YAN KING TAI ALBERT AND ANOTHER

THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD v. YAN KING TAI ALBERT AND ANOTHER

Interests on instalments in arrear were disallowed because none of the executed charges contained a clause authorising interest on arrears; however where the charge referred to the facility letter and the facility letter expressly provided for higher interest on sums due but unpaid, the mortgagee was entitled to charge that higher rate from the day after writ filing (applied to the two HSBC cases). In the Hang Seng case there was no clause permitting rate variation on default and therefore no higher default interest was allowed.

Citation
THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD v. YAN KING TAI ALBERT AND ANOTHER
Parties
Plaintiff (hcmp 1318/2006): THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED; 1st Defendant (hcmp 1318/2006): LEE DARWIN MAN KIT; 2nd Defendant (hcmp 1318/2006): CHAN KA MAN; Plaintiff (hcmp 1589/2006): THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED; 1st Defendant (hcmp 1589/2006): YAN KING TAI ALBERT; 2nd Defendant (hcmp 1589/2006): HO PEI YING; Plaintiff (hcmp 2179/2006): HANG SENG BANK LIMITED; 1st Defendant (hcmp 2179/2006): LAM CHING HAM; 2nd Defendant (hcmp 2179/2006): TSOI MEI NOG
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
31 July 2007
Case Number
HCMP1589/2006
Procedural Posture
Miscellaneous Proceedings Under Order 88 (mortgage Actions) / Judgment (31 July 2007)
Outcome
Judgment entered; monetary orders varied as specified for each proceeding; order nisi that there be no order as to costs in respect of the claim for overdue interest subject to Order 42 rule 4B(6).
Legal Topics
Mortgage, Overdue Interest, Interpretation of Charge, Facility Letter, Home Starter Loan
Source Language
EN
Property Law Banking Contract Law Civil Procedure Mortgage Law Mortgage Overdue Interest Interpretation of Charge +2 more

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Parties

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

Plaintiff (hcmp 1318/2006)

LEE DARWIN MAN KIT

1st Defendant (hcmp 1318/2006)

CHAN KA MAN

2nd Defendant (hcmp 1318/2006)

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

Plaintiff (hcmp 1589/2006)

YAN KING TAI ALBERT

1st Defendant (hcmp 1589/2006)

HO PEI YING

2nd Defendant (hcmp 1589/2006)

HANG SENG BANK LIMITED

Plaintiff (hcmp 2179/2006)

LAM CHING HAM

1st Defendant (hcmp 2179/2006)

TSOI MEI NOG

2nd Defendant (hcmp 2179/2006)

Procedural Posture

Miscellaneous Proceedings Under Order 88 (mortgage Actions) / Judgment (31 July 2007)

Legal Issues

  1. 1 Whether the mortgagee may charge interest on instalments in arrear under the charge
  2. 2 Whether the mortgagee may charge a higher rate of interest on the outstanding principal after default pursuant to the facility letter
  3. 3 Whether the terms of the facility letter are incorporated into or superseded by the charge

Ratio Decidendi

Interests on instalments in arrear were disallowed because none of the executed charges contained a clause authorising interest on arrears; however where the charge referred to the facility letter and the facility letter expressly provided for higher interest on sums due but unpaid, the mortgagee was entitled to charge that higher rate from the day after writ filing (applied to the two HSBC cases). In the Hang Seng case there was no clause permitting rate variation on default and therefore no higher default interest was allowed.

Court Disposition

Judgment entered; monetary orders varied as specified for each proceeding; order nisi that there be no order as to costs in respect of the claim for overdue interest subject to Order 42 rule 4B(6).

Orders

  • HCMP 1318/2006: Judgment for sum of 1432452.5 HKD; interest at 5.5% p.a. from 1 July 2006 to 4 July 2006 amounting to 835.35 HKD; further interest on 1432452.5 HKD at 12.25% p.a. from 5 July 2006 to date of judgment; further interest from date of judgment to full payment at judgment rate.
  • HCMP 1589/2006: Judgment for sum of 1184680.95 HKD; interest at 6.5% p.a. from 16 July 2006 to 7 August 2006 amounting to 4665.11 HKD; further interest on 1184680.95 HKD at 12.25% p.a. from 8 August 2006 to date of judgment; further interest from date of judgment to full payment at judgment rate.