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Whether or not the principal and interest form is retained, we think that the present requirement that a mortgage must be in the form scheduled to the 1894 Act or as near thereto as circumstances permit is unduly restrictive. In practice this requirement has been interpreted very strictly not only in Hong Kong but also by registrars in other British flag ports and, if a complex credit structure is involved, much time must often be spent by a mortgagee's solicitors in ensuring that the mortgage will be acceptable to the registrar. Particular problem areas under the current system include
the insistence of the registrar that the printed mortgage form be used, although its A3 format may give insufficient space to recite the details of the credit to be secured whilst on the other hand being unsuitable for use in conjunction with modern word processing equipment;
the fact that the prescribed wording of the operative part of the mortgage extends the security to principal and interest but not to costs of enforcement;
the insistence of the registrar that the prescribed wording be followed exactly, even though it is arguably incorrect from a grammatical point of view and is punctuated in accordance with nineteenth- century rather than modern practice.
It
At the least, the opportunity should be taken in the new legislation to modernise the mortgage wording and to provide that the use of the printed form should be optional only. might however be useful to consider a more radical departure from the current law. For example, the scheduled mortgage wording could perhaps be dropped altogether in favour of a statutory list of matters which should be contained in the mortgage, leaving the actual drafting to the solicitors involved in each case. On balance, we think that such an approach might have disadvantages outweighing its merits : for example, mortgages would inevitably become longer as time progressed and the absence of a prescribed form would necessitate the involvement of solicitors where otherwise the parties might be content to dispense with their services. Nonetheless, we feel that the more radical approach should at least be considered in view of the difficulty of devising a statutory worded mortgage suitable for the many different forms which a shipping credit may take.
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Mortgage Priorities
There are two problem areas relating to the priority of mortgages under the present law which could perhaps te tackled in the legislation for the new shipping register.
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