''Tse Kwong Lam v Wong Chit Sen'',
[.] is a
land law case, concerning the rights and obligations of a mortgagee in the exercise of his power of sale under a
mortgage
A mortgage loan or simply mortgage (), in civil law jurisdicions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pu ...
.
Facts
Mr Wong () exercised his power of sale and put up Mr Tse’s () property for auction, a building with about 100 units in
Kowloon
Kowloon () is an urban area in Hong Kong comprising the Kowloon Peninsula and New Kowloon. With a population of 2,019,533 and a population density of in 2006, it is the most populous area in Hong Kong, compared with Hong Kong Island and t ...
, the Kwong Hing Building. It was only shortly advertised with limited details. The reserve price was fixed without the guidance of a qualified valuer at $1.2m. There was only one bid. It was Mrs Wong. She was acting on behalf of the company owned by Mr Wong and his family. They had apparently had a board meeting before resolving that they would bid up to a maximum of $1.2m.
The trial Judge found that $1.2m was not a proper price, but refused to set the sale aside because of the borrower’s delay in pursuing the counterclaim.
[''Wong Chit-Sen v Tse Kwong-Lam']
[1979] HKCFI 39
Supreme Court of Hong Kong
The Supreme Court of Hong Kong was the highest court in Hong Kong prior to the transfer of sovereignty of Hong Kong from the United Kingdom to the People's Republic of China in 1997 and heard cases of first instance and appeals from the Di ...
. He awarded damages instead. The Court of Appeal set aside the judge’s award.
[''Tse Kwong Lam v Wong Chit Sen']
[1980] HKCA 264
Court of Appeal of Hong Kong
The Court of Appeal of the High Court of Hong Kong is the second most senior court in the Hong Kong legal system. It deals with appeals on all civil and criminal cases from the Court of First Instance and the District Court. It is one of t ...
.
Judgment
The
Privy Council
A privy council is a body that advises the head of state of a state, typically, but not always, in the context of a monarchic government. The word "privy" means "private" or "secret"; thus, a privy council was originally a committee of the mon ...
restored the judge’s award, holding that although the sale could not be set aside, given that too long was taken, damages could be awarded. There was a clear conflict of interest here, importing a necessity to show that reasonable precautions had been taken to get the best price. The Board advised that although the respondent was free to sell to a company in which he was interested, he had failed to demonstrate he had taken reasonable care in the conduct of the sale. An auction was not necessarily the most appropriate mode of sale. Expert advice should have been sought for valuing and the sale mode. Lord Templeman said:
See also
*
English land law
English land law is the law of real property in England and Wales. Because of its heavy historical and social significance, land is usually seen as the most important part of English property law. Ownership of land has its roots in the feudal ...
*
English trusts law
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the ...
*
English property law
English property law refers to the law of acquisition, sharing and protection of valuable assets in England and Wales. While part of the United Kingdom, many elements of Scots property law are different. In England, property law encompasses four ...
*''
York Buildings Co v MacKenzie'' (1795) 3 Paton 378
References
{{reflist
Judicial Committee of the Privy Council cases on appeal from Hong Kong
1983 in Hong Kong
1983 in case law
Property case law
1983 in British law
Auction case law