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Tse Kwong Lam v Wong Chit Sen [1983]


  • A tower block was financed by a $1.4m mortgage granted in favour of a mortgagee
  • The mortgagor fell into arrears
  • The mortgagee took possession and sold the tower block at auction
  • The only bid came from the mortgagee’s parent company, and was the same as the reserve price, set at $1.2m
  • The mortgagee pursued a personal claim against the mortgagor for the outstanding sum owed ($400,000 including interest)


  • Could the sale be set aside for the mortgagee being in breach of his duty to take reasonable care to obtain the best price of a property sold whilst in possession?


  • No injunction due to late claim, but breach of duty, so damages awarded


  • There is no reason why the mortgagee could not have sold to its parent company, but must be able to show that it took reasonable precautions to ensure that the best price was obtained – this test was not passed
  • A mortgagee is under no obligation to delay sale in order to obtain a better price
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