TREASURE SPOT FINANCE CO LTD v. WAN SHUI SHEK AND ANOTHER

TREASURE SPOT FINANCE CO LTD v. WAN SHUI SHEK AND ANOTHER

The court held that the Provisional Agreement was ineffective and void because it was entered into and registered after the registered building mortgage and in breach of both the building licence (which prohibited assignment without District Lands Officer consent) and the building mortgage (which prohibited disposition without the mortgagee's prior written consent); accordingly the registered mortgage prevails and the registration of the Provisional Agreement must be vacated.

Citation
TREASURE SPOT FINANCE CO LTD v. WAN SHUI SHEK AND ANOTHER
Parties
Plaintiff: Plaintiff; 1st Defendant: 1st Defendant; 2nd Defendant: 2nd Defendant
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
31 January 2008
Case Number
HCMP1219/2007
Procedural Posture
Miscellaneous Proceedings (land/registration) / Judgment (court of First Instance)
Outcome
Judgment for plaintiff: declarations granted that the Provisional Agreement is ineffective and that the plaintiff is not bound; registration to be vacated; costs against the 2nd defendant.
Legal Topics
Building Licence Restrictions, Provisional Agreement for Sale and Purchase, Priority of Registered Charges, Validity of Dispositions in Breach of Licence or Mortgage, Vacation of Registration
Source Language
ET
Property Land Law Mortgages Registration Equity Contract Building Licence Restrictions Provisional Agreement for Sale and Purchase +3 more

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Parties

Plaintiff

Plaintiff

1st Defendant

1st Defendant

2nd Defendant

2nd Defendant

Procedural Posture

Miscellaneous Proceedings (land/registration) / Judgment (court of First Instance)

Legal Issues

  1. 1 Whether the provisional agreement was effective despite breach of the building licence
  2. 2 Whether the provisional agreement was entered into in breach of the registered building mortgage and mortgagee consent requirement
  3. 3 Whether a subsequent unconsented agreement registered after a mortgage is binding on the mortgagee

Ratio Decidendi

The court held that the Provisional Agreement was ineffective and void because it was entered into and registered after the registered building mortgage and in breach of both the building licence (which prohibited assignment without District Lands Officer consent) and the building mortgage (which prohibited disposition without the mortgagee's prior written consent); accordingly the registered mortgage prevails and the registration of the Provisional Agreement must be vacated.

Court Disposition

Judgment for plaintiff: declarations granted that the Provisional Agreement is ineffective and that the plaintiff is not bound; registration to be vacated; costs against the 2nd defendant.

Orders

  • Declaration that the Provisional Agreement is ineffective, null and void.
  • Declaration that the plaintiff is not bound by the Provisional Agreement.