NG NIM CHUNG, deceased AND ANOTHER v. NG WING MAN TERRY

HCA 2221/2016

[2025] HKCFI 5314

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2221 OF 2016

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BETWEEN

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JUDGMENT

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A. Introduction

1.  This is a mother and son litigation. More precisely, it is litigation between a mother, Madam Leung Wai Ping (“Mother”), now 92 years old, and her son, the Defendant.

2.  The Mother and her late husband, Mr Ng Nim Chung (“Late Father”) had 5 children. The Defendant is their third child. Since 1967, the family lived in a public rental housing unit in Shatin Pass Estate (“PRH Unit”). Over time, the children moved away, including the Defendant.

3.  In 1997, the Late Father and the Mother moved to the subject property, namely Flat 13 on the 20^th Floor of Block D, Hiu Lai Court, No. 21 Hiu Kwong Street, Kowloon, Hong Kong (“Property”). The Property was purchased under the Home Ownership Scheme (“HOS”) and was registered in the names of the Late Father and the Defendant as joint tenants.

4.  The Late Father passed away in 2016. The Mother was appointed administratrix of his estate. The Mother, as administratrix and also in her personal capacity as well, commenced this action, asserting that the Late Father and/or she beneficially owned the Property, in which she has resided since 1997. On the other hand, the Defendant has never resided in the Property.

5.  The Defendant denies the Mother’s allegation. The Defendant claims that, after the Late Father died, all the legal and beneficial interest in the Property vested in him as the surviving joint tenant. His solicitors issued a letter to the occupiers of the Property on 1 September 2016 requiring them, which necessarily included the Mother, to quit and deliver up vacant possession of the Property on or before 31 October 2016.

6.  During the trial, however, the Defendant withdrew this position and gave an undertaking to the Court that he would allow the Mother to reside in the Property during her lifetime.

B. Brief Procedural History

7.  Procedurally, these proceedings have taken a number of twists and turns. Very briefly:

(1) The Writ in this action was issued more than 9 years ago, in 2016.

(2) On 5 May 2021, the Defendant was absent at the Pre-trial Review. Mr Justice Yeung proceeded with the hearing and provisionally struck out his counterclaim. No application for restoration was ever made. The counterclaim remains dismissed to date.

(3) On 16 August 2021 when the trial started, the Defendant was again absent. He wrote to the Court asking for an adjournment but did not apply formally. Deputy High Court Judge Leung (as he then was) refused and heard the case in his absence.

(4) On 27 August 2021, the learned judge handed down judgment in favour of the Plaintiff.

(5) On 8 March 2022, upon the Defendant’s application, Deputy High Court Judge Leung set aside the said Judgment and ordered a re-trial.

(6) With leave, the Plaintiffs appealed against the said setting aside order, but the appeal was dismissed by the Court of Appeal on 14 June 2024.

8.  This is the re-trial of the action. As mentioned above, as the Defendant’s counterclaim had been struck out and was not restored, the Court needs only dealing with the Plaintiffs’ claim.

C. The Plaintiffs’ Case

9.  The Plaintiffs’ factual case is as follows:

(1) In or about October 1996, the Late Father and the Mother were notified that Shatin Pass Estate was to be demolished and redeveloped. They would therefore need to move out of the PRH Unit.

(2) The Late Father and the Mother discussed this matter with their children during a family dinner. The Defendant and their fifth daughter, Ng Yuen Har (who passed away in 2003) were not present at that time, as they were very busy with work and seldom had dinner with their parents. The other children, namely, Ng Ki Man (the eldest son) (“Ki Man”), Ng Chui King (the second daughter) (“Chui King”) and Ng Chui Ching Hermia (the fourth daughter) (“Chui Ching”) were supportive of their parents buying a new HOS flat.

(3) The main reason the Late Father and family decided to buy a new HOS flat was that the replacement unit offered by the Housing Authority (“HA”) was rather small. At that time, the Mother was helping Ki Man look after his two children. They needed a larger flat.

(4) The Late Father and family’s original intention was for the Late Father to be the sole registered owner of the property, similar to the arrangement with the PRH Unit, of which he was the sole registered tenant.

(5) Regarding the purchase costs, the children promised financial support. After discussion, the consensus within the family was that the Late Father would be responsible for the initial down payment, renovation costs, and other related expenses, while subsequent mortgage payments and other property-related costs would be covered by the monthly pocket money or household allowance given to the Mother. In particular, Ki Man would be primarily responsible for the mortgage payments because, as already mentioned, the Mother was helping him care for his two children at that time.

(6) In or about April 1996, the Late Father applied to the HA to purchase a flat under the HOS.

(7) In June 1996, HA notified the Late Father that his application had been accepted. He later enquired about a mortgage with Po Sang Bank. The bank staff informed him that, as he was nearing retirement age, it would be easier if he applied jointly with one of his children. The Late Father discussed this with his other children during a dinner. As the Defendant was the only child remaining as an “authorized occupant” of the PRH Unit, Chui King suggested asking the Defendant for help by lending his name for the mortgage application.

(8) The Late Father subsequently called the Defendant to discuss the matter. The Defendant agreed to lend his name for the purchase and mortgage application. He clearly knew that he was not required to provide any financial support for the property.

(9) During another dinner, the Late Father told the family that the Defendant had agreed to lend his name for the flat purchase to make it easier to secure a mortgage. Everyone in the family understood that that the flat was not intended as a gift for the Defendant, nor was it intended to benefit him alone.

(10) The Late Father and the Mother never helped any of their 5 children purchase a property. The Mother had once lent HK$15,000 to Ki Man for a down payment on a flat, which he later repaid.

(11) On 21 February 1997, the Late Father purchased the Property. It was registered in the names of the Late Father and the Defendant as joint tenants. He took out a mortgage loan with Po Sang Bank to finance the purchase. For repayment purposes, he opened a joint account with the Defendant and instructed the Mother to go to the bank in person every month to deposit cash directly into the joint account for the mortgage repayments.

(12) Around 2000, the mortgage was transferred to Hang Seng Bank. Initial mortgage repayments were made every two weeks, later changing to monthly. The Late Father and the Defendant also opened a joint account at Hang Seng Bank for repayment of the mortgage loan. Similarly, the Late Father instructed the Mother to go to the bank in person every month to deposit cash directly into the account for the mortgage repayment. The mother still has the deposit records from that time in her possession.

(13) Apart from the mortgage repayments, all incidental expenses and charges relating to the Property – such as management fees, rates, government rents, broadband service fees, water, the electricity, and gas – were paid by the Late Father and the Mother. The Defendant has never paid or contributed towards any of these expenses.

(14) The mortgage repayments were funded primarily from the pocket money and household allowances provided to the Mother by her children (other than the Defendant), namely Ki Man, Chui King, Chui Ching, and two of her grandchildren, Ng See Nga (Ki Man’s eldest daughter) (“See Nga”) and Ng Ho Hin (Ki Man’s younger son) (“Ho Hin”), together with the Old Age Allowance (commonly known as “Fruit Money”) and the parents’ own savings. In particular, Ki Man contributed approximately HK$8,000 per month. Chui King and Chui Ching also gave the Mother pocket money or household allowance over the years, the amounts varying with circumstances and being higher when the Mother helped care for their children. From 2004 onwards, See Nga also contributed, and after commencing work, Ho Hin gave about HK$2,000 per month. The Mother became eligible for the “Fruit Money” in 1998, while the Late Father had already been receiving it since 1996, about HK$2,000 per month. Additionally, upon his retirement in 1997, the Late Father had savings of approximately HK$400,000, and the Mother had savings of about HK$60,000 accumulated over the years.

(15) As for the Defendant, over the years he only gave the Late Father and the Mother a total of about HK$16,000, in two separate instances. This was merely for food and daily expenses, not for the mortgage. He never provided any financial assistance towards the purchase of the Property, nor did he give pocket money to his parents. After his marriage, he had very little contact with them or with the wider family. He never lived at the Property and rarely visited, being seen only on a few occasions such as the Mother’s birthday dinner in 2013, Ng Yuen Har’s funeral, and when the Late Father was hospitalized around March-April 2016.

(16) The Defendant has not contributed a single dollar towards the Property. The Late Father never asked him to do so, because the common understanding within the family was that the Defendant was merely holding the Property on his father's behalf. He was a nominal joint owner. In reality he had no beneficial interest. The consensus and intention were always that the Property was to be a home for the Late Father and the Mother in their old age, not an investment and not for the Defendant’s benefit.

(17) Around 2009, at Chui King’s suggestion, the Late Father asked the Defendant to transfer his interest in the Property back to him. The request was made because the Defendant had never contributed financially towards the Property, had become increasingly distant from the family, and the Late Father was by then getting older. The Defendant agreed and signed a Forfeiture Form[1] to remove his name, but the HA ultimately rejected the application due to insufficient justification. Since the Defendant had voluntarily signed the Forfeiture Form, the Mother and the rest of the family did not question his stance, nor did they anticipate he would later resile from it. They therefore did not follow up further.

(18) The Late Father never intended to sell the Property, as he lived there, nor did he ever indicate that he would buy out the Defendant’s interest. It would not have been possible for him to do so, because he knew that the Defendant had no beneficial interest in the Property.

(19) Throughout his lifetime, the Late Father never suggested that he had received any financial support from the Defendant. On the contrary, he often complained to other family members that he had not seen the Defendant and his family for a long time, and that they did not even visit during Chinese New Year. Apart from the aforementioned HK$16,000, he never indicated that the Defendant had given him any money, nor did he ever give the Mother any money said to have come from the Defendant.

10.  Based on the above facts, the Plaintiffs claim that:

(1) The Defendant does not have any beneficial ownership, interest or title in the Property.

(2) The Property was owned beneficially by the Late Father solely pursuant to a common intention constructive trust and/or the Defendant is estopped from denying the Late Father’s sole title.

(3) Alternatively, the Property was beneficially owned by the Late Father and the Mother jointly, pursuant to a presumed resulting trust.

D. The Defendant’s Case

11.  The Defendant alleges that:

(1) He jointly purchased the Property with the Late Father; they co-owned it as joint tenants.

(2) He paid the down payment of HK$59,000 for the purchase of the Property by way of a bank draft.

(3) He contributed approximately half of the mortgage repayments, amounting to about HK$5,000 per month.

(4) Accordingly, upon the demise of the Late Father, he became, as the surviving joint tenant, the sole owner of the Property.

E. The Witnesses

12.  The Mother gave evidence. All members of the Late Father’s family, other than the Defendant, testified in support of the Mother’s case. They include Ki Man, his wife Madam Shet Yuk Lai (“Ki Man’s wife”), Chui King, Chui Ching, See Nga and Ho Hin.

13.  The Defendant was the sole witness for his own case. His wife and son did not give evidence.

F. The Legal Principles

14.  There is no disagreement on the applicable legal principles. In my view, the modern application of the common intention constructive trusts began with the UK House of Lords’ landmark judgment in Stack v Dowden [2007] 2 AC 432. The headnote captures the principles in a clear and succinct way:

“where a domestic property was conveyed into the joint names of cohabitants without any declaration of trust there was a prime facie case that both the legal and beneficial interests in the property were joint and equal; that the onus of proof lay upon any party seeking to establish that equity should not follow the law; that such a party had to prove that the parties had held a common intention that their beneficial interests be different from their legal interests, and in what way; that in order to discern the parties’ common intention the court should look at the parties’ whole course of conduct in relation to the property; that the law had moved on from the presumption of a resulting trust and many more factors other than the parties respective financial contributions might be relevant to divining their true intentions; and that when all relevant factors had been taken into account, cases in which the joint legal owners were to be taken to have intended that their beneficial interests should be different from their legal interests would be very unusual.”

These principles have since been followed and applied in Hong Kong, see Luo Xing Juan Angela v The Estate of Hui Shui See, Willy, deceased and Ors (2009) 12 HKCFAR 1, Mo Ying v Brillex Development Ltd [2014] 3 HKLRD 224; [2015] 2 HKLRD 985 (CA), Lo Kau Kun v Cheung Yuk Yun [2015] HKCU 415, Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, Leung Hang Lin v Lam Mei Yung[2019] HKCFI 2819, Kwok Mei Ha May v Chiu Yung[2020] HKCFI 2405, Lam Ka Kui v Choi Yuen Ling[2020] HKCFI 2647.

15.  Whilst it is unusual for the legal and beneficial interests in a purchased property to diverge, the Court should nonetheless note a fundamental distinction from Stack v Dowden: that case concerned disputes between cohabitants whose relationship has broken down, whereas this case is a family dispute in which the protagonists – the Late Father, the Mother, Ki Man, the Defendant, Chui King, Chui Ching, and even the third generation witnesses – See Nga and Ho Hin, are all related by blood.

16.  In the present case, the Mother, whose case is supported by all her other children, must prove on the balance of probabilities that the Defendant held his legal interest in the Property as a joint tenant on behalf of the Late Father, and that at the time of purchase it was the common intention of the Late Father and the Defendant, shared by the family, that the Late Father was the sole beneficial owner and the Defendant was only “lending” his name as a legal owner with no beneficial interest, for the purpose of facilitating mortgage finance from a bank for the purchase.

17.  Apart from the question of financial contributions, it is paramount that the Court considers all the circumstances surrounding the purchase – the context in which it was made – in order to discern the parties’ true intention. In this connection, the following passages by Baroness Hale of Richmond (as she then was) in Stack v Dowden are particularly instructive:

“69. In law, “context is everything” and the domestic context is very different from the commercial world. Each case will turn on its own facts. Many more factors than financial contributions may be relevant to divining the parties’ true intentions. These include: any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names; the reasons why (if it be the case) the survivor was authorised to give a receipt for the capital moneys; the purpose for which the home was acquired; the nature of the parties’ relationship; whether they had children for whom they both had responsibility to provide a home; how the purchase was financed, both initially and subsequently; how the parties arranged their finances, whether separately or together or a bit of both; how they discharged the outgoings on the property and their other household expenses. When a couple are joint owners of the home and jointly liable for the mortgage, the inferences to be drawn from who pays for what may be very different from the inferences to be drawn when only one is owner of the home. The arithmetical calculation of how much was paid by each is also likely to be less important. It will be easier to draw the inference that they intended that each should contribute as much to the household as they reasonably could and that they would share the eventual benefit or burden equally. The parties’ individual characters and personalities may also be a factor in deciding where their true intentions lay. In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection. At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.

70. This is not, of course, an exhaustive list. There may also be reason to conclude that, whatever the parties’ intentions at the outset, these have now changed. An example might be where one party has financed (or constructed himself) an extension or substantial improvement to the property, so that what they have now is significantly different from what they had then.”

18.  These observations emphasize that the inquiry extends beyond financial inputs to a holistic assessment of the family’s circumstances at the time of purchase.

G. Discussion of Evidence and Findings

G(1) The Defendant

19.  I shall begin with the Defendant’s evidence, because it is wholly incredible.

20.  His case cannot be accepted in any material respect:

(1) As to the Late Father’s intention in purchasing the Property:

(a) The Defendant’s pleaded case[2] is that the Late Father represented to him that he intended to pass all his shares and interests in the Property to the Defendant upon his death, and that he did not wish to bequeath any asset to any other children, especially to Ki Man. In his witness statement[3], the Defendant asserted that the Late Father had told him that the Late Father helped Ki Man to purchase a flat at Tseung Kwan O, that he would assist the Defendant in purchasing a flat in joint names, and that the Defendant could choose a flat from the HOS in the region of HK$1 million. He further deposed[4]: seeing the Late Father was so kind to him, he offered to contribute jointly to the purchase price and related expenses.

(b) However, during cross-examination, when he was asked why the Late Father would assist him in purchasing the Property at HK$1,180,000 but only assisted Ki Man in acquiring a property at around HK$330,000, the Defendant changed his case. He claimed that while Ki Man owned the entirety of his property, he himself was only entitled to half of the Property, which would amount to about HK$500,000 to HK$600,000. This claim contradicted his pleaded case that the Late Father’s intention was to enable him to become the owner of the entire Property upon the Late Father’s death. More fundamentally, it cast grave doubt on what the Late Father had really told him.

(c) Then came another remarkable volte-face. When the Defendant was put with his written opening submissions in Chinese for the trial on 16 August 2021 (as mentioned in paragraph 7(3) above) (“D’s Previous Opening”) ^[5], he accepted that it was the Late Father who raised the request for the Defendant to assist in the mortgage repayments. This assertion was diametrically opposite to what he stated in his witness statement, namely, that it was he who offered to contribute to the purchase price of the Property.

(d) When it was pointed out to him that, in his witness statement, it was the Late Father who intended to assist him to purchase the Property, yet he then said it was the Late Father who needed his financial assistance, the Defendant explained that this was because they picked a property at the purchase price of HK$1.18 million, which was around HK$200,000 more. When pressed whether it was because of the additional HK$200,000 that the Late Father asked him to assist in the mortgage repayment, the Defendant said the Late Father’s intention had always been that the Defendant should jointly repay the mortgage because the Late Father was near retirement.

(e) In my view, what the Defendant said here was illogical and again inconsistent with his own evidence, because, according to the Defendant’s own case, the choice of purchasing the Property at HK$1.18 million was made by him, not the Late Father, when they attended the HA’s office for flat selection on 1 July 1996[6]. Moreover, their discussion on purchasing a property jointly took place in around April 1996[7], which was well before they submitted the application form to the HA[8], let alone the selection of the Property. Therefore, at the initial discussion in early April 1996, it was impossible for the Late Father to request the Defendant’s financial assistance on the basis that they had picked the Property priced HK$200,000 more. Further, the Defendant’s answer that it was the Late Father and he who selected the Property is wholly inconsistent with his witness statement, that it was he alone who made the selection.

(f) Further, when the Plaintiff’s counsel put to the Defendant that his account of the Late Father requesting his financial assistance was contradictory to what was stated in his Defence and witness statement, he only disagreed. When I asked whether he had anything to add beyond expressing disagreement. He said no.

(g) Given the obvious inconsistency and given the Defendant’s silence even when offered the opportunity to explain, the only conclusion the Court can draw is that the Defendant’s evidence cannot stand.

(2) The other important aspect concerns the down payment for the purchase. The Defendant’s pleaded case is that he paid the down payment alone, relying on an official receipt issued by the HA on 1 July 1996[9]. This reliance was entirely misplaced. The copy of the HA’s official receipt produced by the Mother shows that both the Late Father and the Defendant were recorded as the payers of the down payment. This inaccuracy was conceded by the Defendant in his witness statement[10]. However, during cross-examination he nevertheless insisted that he alone had paid the down payment, despite there being no evidence in support.

(3) As to the Defendant’s case on mortgage repayment, there are multiple and serious problems which render his account entirely fanciful.

(a) Firstly, all evidence of the Defendant’s alleged mortgage repayments comes solely from his own mouth. There is no supporting documentary proof. No witness, not even his wife, has come forward to corroborate any repayments.

(b) Secondly, the Defendant repeatedly changed his case, advancing different versions at different stages:

(i) Defence[11]: He pleaded that the monthly sum of HK$5,000 he contributed was towards “the mortgage repayments and other outgoings”. However, he did not explain what “other outgoings” comprised.

(ii) Answer to Amended Request for Further and Better Particulars of the Defence[12]: He stated instead that the monthly sum of HK$5,000 was towards “half of the mortgage payments”. He did not mention other outgoings here. He alleged that his total contributions exceeded HK$1,050,000[13].

(iii) Witness statement[14]: He asserted that he sometimes gave the Late Father more than HK$5,000 “as a gesture” or “tea money”, and that despite the mortgage being changed to Hang Seng Finance Ltd for a lower interest rate, his monthly contribution of HK$5,000 towards the Property remained unchanged.

(iv) Cross-examination: When asked why he would still pay HK$5,000 for his half share of the mortgage when the monthly mortgage instalment had fallen to less than HK$7,000, he said that the remainder was at the Late Father’s free disposal. This necessarily means that part of the HK$5,000 was not a contribution to the purchase of the Property, yet the Defendant could not quantify how much. He had no record of his contributions. He admitted that his alleged total contribution of more than HK$1,050,000 was calculated retrospectively by multiplying the number of months since commencement of the mortgage in March 1997, namely 210 months by HK$5,000, with no evidence, documentary or otherwise, in support.

(c) Thirdly, his answers during cross-examination are, in my judgment, wholly inexplicable. When the Defendant was asked why there was no bank withdrawal record of his alleged monthly contribution of HK$5,000, he said it was because his wife was a tour guide and had a lot of cash, so there was a lot of cash at home and he used that cash for the monthly payment to the Late Father. When asked whether he had a scheduled date every month to meet the Late Father to pay the monthly sum, the Defendant said there was no fixed date, notwithstanding that there was a repayment deadline each month. When asked whether there was any occasion on which he deposited his contribution into the Late Father’s bank account or the joint account opened for mortgage repayment, he said no. When asked why the payments had to be made in cash and in person, he was unable to offer any explanation.

(d) In light of the above, I have grave doubt as to whether the Defendant has made any contribution to the mortgage repayments for the Property at all. In the absence of documentary proof or corroboration, his inconsistent and inherently unreliable assertions carry no weight, and his pleaded case of having borne half the mortgage repayments cannot be sustained.

(4) As to the circumstances surrounding the Forfeiture Form signed by the Defendant, his evidence is in disarray:

(a) There is no dispute that the Forfeiture Form was signed by the Defendant and dated 12 August 2009. It is the Mother’s case that it evidenced the Defendant’s intention to forgo his legal title in the Property and transfer it to the Late Father without consideration, which is in line with the original common intention that the Defendant never had any beneficial interest in the Property. The Defendant, in his pleaded case[15], accepted that he signed the Forfeiture Form, but, notwithstanding that it expressly stated that he forgent his title in the Property, he says it was a sale of his legal and beneficial interest in the Property to the Late Father.

(b) This is contradictory to paragraph 28 of his witness statement. In that paragraph, the Defendant stated that between 2006 and 2008, as he was considering sending his son to England for education, he discussed with the Late Father about the sale of the Property but the Late Father rejected his idea as the Late Father was of the view that the market price was not attractive. The plain reading of this statement is that the Defendant suggested that the Property be sold on the open market so that he could obtain funds for his son’s education in England. The Late Father refused because he considered the market price unattractive.

(c) However, the Defendant changed his account yet again during cross-examination, when it was put to him that if the Property was sold on the open market, the Late Father and the Mother needed to use the money to buy a new place to live, since the Property was their residence, the Defendant answered that what the Late Father intended was to purchase the Defendant’s share in the Property. When it was put to him that his answer was inconsistent with paragraph 28 of his witness statement, he answered that what was stated in paragraph 28 was wrong. It was further put to him that the Late Father simply did not have such a discussion with him. He conceded that there was no such discussion.

(d) The Defendant contradicted himself again in relation to paragraphs 30 and 31 of his witness statement. In paragraph 30, the Defendant stated that subsequently in 2009, when he decided to transfer his son to another school in the United Kingdom, he raised the idea of selling the Property again, and the Late Father offered to purchase his legal and beneficial interest in the Property by paying back the down payment and mortgage sums he had allegedly contributed over the years, and it was the Late Father who suggested applying for the HA’s approval first. In paragraph 31, the Defendant stated that he signed the Forfeiture Form when it was blank, that it was the Late Father who filled in the Forfeiture Form, and that he only learnt later that the reason given for his forfeiture of title to the Property was because he was getting married.

(e) However, he again gave no answer when cross-examined that his statement – that he did not know that his marriage was used as the reason for the application until later, was contradictory to what he stated in his earlier affirmation in support of his application to set aside the previous judgment[16], in which he stated that their joint application was based on marriage, though he had married before making the application. In that affirmation, he even mentioned that the Late Father and he appreciated that marriage was not one of the reasons acceptable to the Housing Department, and they were just trying to apply. He admitted that what was stated in the affirmation was not accurate, that it was the Late Father who decided how to fill in the Forfeiture Form, and subsequently told him that the Late Father used his marriage as the reason for the application.

(f) In other words, as is clear to me, the Defendant just signed the form as requested by the Late Father to forgo his legal title in the Property.

(g) I should mention three more points. First, the main thrust of the Defendant’s counsel’s cross-examination of the Mother’s witnesses and submissions was that the Late Father, as well as his other family members, did not have the financial means to purchase the whole of the Property or to pay the monthly mortgage instalments. It is inexplicable why the Defendant suggested during cross-examination that the Late Father had sufficient funds to purchase the Defendant’s interest in the Property. When he was pressed during cross-examination, the Defendant’s answer was incredible: that the Late Father would discuss with his family members. Such a suggestion was made for the first time – not in his pleadings or witness statements. If it were true, it would only lend more support to the Mother’s case that the Late Father, with the support of his other family members, had the ability to pay the down payment and mortgage instalments for the Property.

(h) Second, fundamentally, the Forfeiture Form simply could not be used to effect the Defendant’s alleged sale of any half interest in the Property to the Late Father. Clauses 1(A) and 7(A) of the 申請須知 (Application Guide) expressly stipulate that the Forfeiture Form cannot be used for any sale of title or interest, or transfer involving monetary consideration.

(i) Thirdly, the HA did not approve the application. When cross-examined further why he did not follow up with the alleged agreed sale of his interest to the Late Father, despite his financial need remaining, he could not offer any answer.

(j) In conclusion, the Defendant’s case is clearly a subsequent fabrication.

21.  In the premises, the Defendant’s case has entirely collapsed. His evidence is riddled with contradictions, unsupported by any documentary proof, and wholly incapable of belief.

G(2) The Mother & Her Witnesses

22.  I accept the Plaintiffs’ counsel’s submission that, in contrast to the manifestly contradictory account of events given by the Defendant, the Plaintiffs’ witnesses, especially the Mother herself, are honest and forthcoming. They came across consistently and impressed the Court as a family of hardworking individuals who live frugally and within their limited means, without the Defendant’s assistance or contribution.

23.  Therefore, I therefore make the same findings as urged by counsel and accept the credibility of the Plaintiffs’ witnesses.

24.  The Mother, despite her advanced age, gave direct and truthful answers. She was candid in acknowledging where her recollection of family discussions was uncertain, yet she remained clear and consistent in recalling what the Defendant did and did not contribute. Her evidence was straightforward and reliable.

25.  The siblings, Ki Man, Chui King and Chui Ching gave honest and direct answers. In particular, Ki Man was forthcoming as to their feelings towards the Defendant: in Ki Man’s words, “we might not be close but we were not enemies.” This frankness reinforced the Court’s impression that he was not seeking to exaggerate or embellish his evidence. Ki Man’s wife likewise answered questions directly, even at times showing frustration with the nature of questions put to her. As for the grandchildren, Ho Hin and See Nga, their testimony was either hardly challenged or not challenged at all, and I accept it as truthful.

G(3) The Contemporaneous Documents

26.  I accept the Plaintiffs’ submissions as to the contemporaneous documents. In my judgment, the contemporaneous documents produced by the Plaintiffs are overwhelmingly supportive of the Plaintiffs’ case and are inherently credible.

27.  In relation to the payment of the purchase price and the ongoing expenses of the Property, the documentary record is compelling. The deposit slips and remittance advices for the mortgages, carefully kept and produced by the Mother, show that the relevant withdrawal account was in her name. These records correspond with the entries in the passbook of the joint bank account of the Late Father and the Defendant for mortgage repayment, which in turn demonstrate that deposits were made exclusively by the Mother. The documentary trail is consistent and complete.

28.  The same is true of the bills and receipts for the maintenance and outgoings of the Property. The Court has seen copies of demands and receipts for Rates and Government Rent, utility bills for broadband, water, electricity and gas, as well as receipts from the management company and related banking records. These documents, kept by the Late Father and/or the Mother, show that the household expenses were borne by them, not by the Defendant.

29.  Two further documents are of particular significance to the common understanding of the parties. First, the transaction advice dated 29 May 1997 records a payment of HK$100,393 by the Late Father to the Defendant, made shortly after the Property was purchased[17]. Secondly, the Forfeiture Form shows the Defendant’s willingness to forgo his legal title in favour of the Late Father, and to do so without consideration. Both documents are wholly consistent with the Plaintiffs’ case that the Defendant never had any beneficial interest in the Property.

30.  By contrast, the Defendant’s assertion that he made monthly payments of HK$5,000 to the Deceased remains unsupported by any documentary evidence.

G(4) Findings

31.  For the reasons explained above, I hold that the Plaintiffs have satisfactorily discharged their burden. I accept the Plaintiffs’ case in full and reject the Defendant’s case in its entirety.

32.  Factually, having considered all the evidence and the circumstances of the matter, I find that:

(1) At the time of the purchase of the Property, there was a common understanding between the Late Father and the Defendant, and indeed among the Late Father’s whole family, including the Mother and all his other children, that

(a) The Late Father would purchase the Property and would be its sole beneficial owner.

(b) To facilitate the obtaining of mortgage finance from bank, the Defendant would “lend” his name as a joint tenant on the legal title. He would make no contribution towards the purchase price or related expenses. He would have no beneficial interest in the Property.

(2) Pursuant to that common understanding, the purchase price (including the down payment and mortgage repayments) and all related expenses (such as rates, government rents and management fees) were met from the common pool of funds of the Late Father and/or the Mother.

33.  Given the existence of the common understanding described above, the detrimental reliance of the Late Father in paying the purchase price and expenses in relation to the Property and the obvious unconscionability of permitting the Defendant to resile from that common understanding, I hold that a common intention constructive trust was established in favour of the Late Father.

34.  Having regard to the context and all the circumstances, and in light of my finding that a common intention constructive trust exists, I do not consider it necessary to deal with the Plaintiffs’ alternative claims for resulting trust and money had and received.

H. Conclusion

35.  For the above reasons, I make the following order:

(1) Judgment be entered in favour of the Late Father’s estate, the 2^nd Plaintiff.

(2) A declaration that the Late Father was at all material times, and that his estate now is, solely entitled to the beneficial ownership, title and interest in the Property, that the Defendant was not, and is not, so entitled; and that the full beneficial ownership, title and interest in the Property now forms part of the estate of the Late Father.

(3) A declaration that the Defendant at all material times held his legal title and interest in the Property on trust for the Late Father, and that he now holds the same on trust for the estate of the Late Father.

(4) An order that the Defendant shall take all necessary steps to transfer his legal title and interest in the Property to the Mother, as the administratrix of the estate of the Late Father, the 2^nd Plaintiff, subject to the terms and regulations governing the HOS. For this purpose the parties shall have liberty to apply.

36.  As to costs, I make an order nisi that the Defendant shall pay the Plaintiffs’ costs of the action, including any costs reserved, to be taxed if not agreed, and this order shall become absolute if no application for variation is made within 14 days from the date of this judgment.

37.  I further order that the Plaintiffs’ own costs shall be taxed in accordance with the legal aid regulations.

Mr Kerby Lau and Ms Regina Yip (on pro bono basis), instructed by Hampton, Winter & Glynn, for the 1^st Plaintiff

Mr Kerby Lau and Ms Regina Yip (on pro bono basis), instructed by Hampton, Winter & Glynn, assigned by Director of Legal Aid, for the 2^nd Plaintiff

Ms Sezen Chong, instructed by Jackson Ho & Co., for the Defendant

HCA 2221/2016

[2022] HKCFI 2670

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2221 OF 2016

________________________

________________________

________________________

DECISION

________________________

1.  The 1^st plaintiff and the 2^nd plaintiff are respectively the late father and the mother of the defendant. The 2^nd plaintiff claims on behalf of her late husband’s estate and herself. Before the trial of this case commenced in 2021, the defendant from abroad wrote to seek adjournment of the trial of this action without a formal application, which this court refused after hearing the plaintiffs on the first day of the trial. The plaintiffs therefore proceeded with the trial in the absence of the defendant. This court found that the claim was proved, and entered judgment against the defendant. The defendant subsequently formally applied and this court set aside the judgment on terms. The plaintiffs now seek to appeal against the decision to set aside the Judgment.

Background

2.  The reasons for allowing the plaintiffs to proceed with the trial on 16 August 2021 were given in court, which was also reduced into writing (“the 16/8/2021 Decision”).

3.  The written judgment after the trial in the absence of the defendant was handed down on 27 August 2021 (“the Judgment”).

4.  The defendant then caused his summons to be filed on 2 September 2021 for setting aside the Judgment, fixing however a hearing for 3 minutes.  At the scheduled hearing on 28 October 2021, this court adjourned the summons and gave direction for its disposal on paper only.

5.  Considering the written submissions of the parties, this court handed down on 8 March 2022 the decision setting aside the Judgment on terms (“the 8/3/2022 Decision”).

6.  By summons dated 22 March 2022, which was filed on 12 April 2022 (after the then general adjournment period), the plaintiffs seek leave to appeal against the 8/3/2022 Decision.  After consulting the parties, this court adjourned the summons for disposal on paper only.

7.  For the present purpose, this court will not repeat what has been set out in the various decisions mentioned above, save where appropriate, references would be made to the specific parts of them.  The same definitions and abbreviations are adopted as before.

Circumstances surrounding the various decisions

8.  For reason that will be explained in due course, this court considers that it is necessary to highlight the circumstances surrounding in particular the 16/8/2021 Decision and the 8/3/2022 Decision.

9.  For the purpose of the defendant back in August 2021, a formal application for adjournment supported by evidence on oath would have been expected.  There was none.  This court nevertheless considered the defendant’s request in the absence of evidence verified on oath.  Apart from the observations made about the circumstances appearing at the time, this court noted areas in respect of which the defendant failed to satisfy this court by evidence, let alone that verified on oath.  Put in such position at that point of time, this court found that it was only just to conclude, as mentioned in §21 of the 16/8/2021 Decision, that the defendant failed to discharge his burden to satisfy the court that he had taken all the necessary steps to enable his attendance at the trial.  The plaintiff was therefore allowed to proceed with the trial pursuant to O35, r1(2).  Effectively this court refused to adjourn the trial.

10.  The trial then proceeded in the defendant’s absence.  The 2^nd plaintiff and her witnesses gave evidence as per their statements.  Accepting such evidence as inherently credible and not contradicted, this court found on the balance of probabilities that the plaintiffs have proved their case (see §§61; 65 of the Judgment).  Judgment was therefore entered against the defendant.

11.  The defendant resumed his legal representation for the purpose of his application to set aside the Judgment.  Submissions were lodged on his behalf by counsel.  This court expressly noted (in §6 of the 8/3/2022 Decision)  that he did not seek to challenge the 16/8/2021 Decision in allowing the plaintiffs to proceed with the trial.  Nor did the plaintiffs take issue, though the significance of that is now reflected in the submission on their behalf now for leave to appeal against the 8/3/2022 Decision, as explained below.

12.  Back to the defendant’s application to set aside the Judgment.  In support of his application, the defendant filed affirmations in support.  They served to verify on oath the matters already advanced in support of his request for adjournment of the trial back in 2021.  They also served to exhibit documentary proof of some of those matters, which this court found to be lacking then.  As noted by this court (§15 of the 8/3/2022 Decision), the defendant effectively sought to better his explanation and evidential support.  That said, also noted (§11 of the 8/3/2022 Decision)  was that those parts of his affirmations that purported to respond to this court’s observations and findings by reference to evidence never disclosed in this action before were illegitimate and therefore disregarded.

13.  There was, and still is, no dispute as to the applicable principles and the factors to be taken into consideration in determining whether or not to accede to an application to set aside the Judgment pursuant to O35, r2: see Chiu Tin Yau Lesley v Dickson Ng, HCA 105/2004 (19 March 2021).  For reasons set out in the 8/3/2022 Decision, this court acceded to the defendant’s application.

Leave to appeal necessary?

14.  In their summons, the plaintiffs raise the issue of whether or not leave to appeal against the 8/3/2022 Decision is necessary. They seek leave insofar as leave is necessary.  This depends on whether the 8/3/2022 Decision constituted an interlocutory decision.

15.  The starting point of section 14AA(1)  of the High Court Ordinance, Cap 4, coupled with O59, r21(1)(a)  of the RHC, is referred to.  The issue is addressed by the defendant but not really by the plaintiffs in counsel’s submissions.  The fact was that neither side has ever taken issue as to the court procedure adopted in the defendant’s application or the determination by this court of that to set aside the Judgment.  On this basis, neither side has ever pointed out to this court that the application was not or should not have been proceeded with as an interlocutory application, albeit after judgment.  This court will likewise proceed on the same basis, and hence the need for leave to appeal against such decision.

Grounds of appeal

16.  As mentioned, the relevant factors referred to in the 8/3/2022 Decision (§7)  are not in dispute.  The plaintiffs see error in how this court took those factors into consideration in the circumstances of the present case.  As it was the exercise of this court’s discretion in arriving at the 8/3/2022 Decision, the plaintiffs acknowledge the stringent test for the appellate court to intervene, namely that this would happen only where this court has failed to take into account relevant factors or has taken into account irrelevant factors or that this court was plainly wrong in arriving at the conclusion that no reasonable tribunal would have arrived.

17.  This court has considered both sides’ written submissions.  For reasons explained below, it would not be necessary to deal with the grounds of appeal one by one.  This court sees a key consideration which may suffice to cause the appellate court to take a different view of the matter from that of this court, and the plaintiffs’ criticisms about how an individual factor was considered by this court would be instances of the implication of this key consideration.  This explains why this court found it necessary to set out the circumstances surrounding the various decisions of this court above.

18.  This is not a case where the defendant simply did not show up at the trial, and the court allowed the plaintiffs to proceed in his absence.  Albeit without a formal application, the significance of which as mentioned cannot be understated, this court considered the representation of the defendant and heard the plaintiffs before arriving at the 16/8/2021 Decision on the first day of the trial.  That was a ruling on the issues of adjournment and an order under O35, r1 between the parties.

19.  For the purpose of his application to set aside the Judgment, the defendant effectively sought to better his explanation and evidence in support, now verified on oath, for, amongst other things, his absence from the trial.  In substance, the defendant managed to do so partly, whilst some aspects of his personal circumstances and his approach in the entire matter remained unsatisfactory.  This court’s observations were set out in the discussion section of the 8/3/2022 Decision.

20.  Where the defendant never sought to challenge the 16/8/2021 Decision, the defendant’s explanation and evidence adduced for the purpose of the application to set aside the Judgment should serve to alter the adverse observations and conclusion of this court to the defendant only insofar as they went to establish material change in circumstances in his favour.

21.  On this basis, this court can understand the plaintiffs’ argument that this court ought not to have considered altering its adverse observations and conclusion already made against the defendant unless the defendant managed to discharge his heavy burden not only because of the test in Chiu Tin Yau but also in the specific circumstances surrounding the defendant’s application.  This also reflects, as mentioned above, the significance of the 16/8/2021 Decision being left intact and against the defendant whilst the defendant sought to set aside the Judgment.

22.  The above could be fundamental.  For that, this court sees the reasonable prospect of the plaintiffs in convincing the appellate court to take a view that the discretion in the defendant’s application to set aside the Judgment should be exercised differently from how this court approached that at the time.

23.  Incidental to the above is the question of whether or not the Judgment was at all impeachable pursuant to O35, r2 whilst the 16/8/2021 Decision, whereby adjournment was effectively refused, is not challenged.  This may be said to be an issue of principle which in the interest of justice should also be placed before the appellate court for consideration.

Order

24.  Leave to appeal is granted.  The plaintiffs do file and serve the notice of appeal as per the draft attached to their summons within 7 days.  Costs of the present application be in the cause of the appeal.

Written submissions by Mr Kerby Lau, instructed by Hampton, Winter and Glynn, for the 1^st plaintiff and 2^nd plaintiff in her personal capacity

Written submissions by Mr Kerby Lau, instructed by Hampton, Winter and Glynn, assigned by Director of Legal Aid, for the 2^nd plaintiff in her capacity as the administratrix of the estate of the 1^st plaintiff

Written submissions by Mr Tony Ko and Ms Michelle Lin, instructed by Jackson Ho & Co, for the defendant

HCA 2221/2016

[2022] HKCFI 673

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2221 OF 2016

________________________

________________________

DECISION

________________________

1.  The defendant foretold his absence and sought to adjourn the trial of this action. Refusing his request, this court allowed the plaintiffs to proceed and to prove their case in his absence. Judgment was eventually entered against the defendant. The defendant now applies to set aside the judgment. As directed, the parties have lodged and served written submissions for disposal of the application on paper only.

Background

2.  Essentially the defendant said that he was in the UK and unable to return to Hong Kong in time to attend the trial scheduled to commence on 16 August 2021.  After hearing the plaintiffs on the first day of the trial, this court refused the defendant’s request for adjournment.  The plaintiffs were allowed to formally prove their case.  The background of the defendant’s request and the reasons for this court’s decision were recorded in writing dated the same date (“the Decision”).

3.  On 27 August 2021, this court handed down the written judgment in this case tried in the defendant’s absence (“the Judgment”).  This court found that the plaintiffs have proved their case and entered judgment in their favour against the defendant.

4.  By summons filed on 2 September 2021, the defendant applies to set aside the Judgment.  Since then, the defendant has filed 3 affirmations purportedly in support of his application.

5.  The defendant used to be legally represented until sometime in March 2019.  He appeared in person in the hearing of the present application on 28 October 2021.  Since he somehow managed to fix the hearing for merely 3 minutes, this court gave directions for the parties to lodge and serve written submissions for the application to be disposed of on paper only. The defendant then resumed his legal representation, and had his written submission lodged by counsel.

The principles

6.  O35, r2 of the Rules of the High Court, Cap 4A provides for the statutory basis on which a party may seek to set aside a judgment entered after trial in his absence.  In the present case, apparently no issue is taken that there is no application for leave to appeal against the Decision at the same time.

7.  As to how the court will exercise the discretion under O35, r2, the principles, which are not disputed, were summarized in Chiu Tin Yau Lesley v Dickson Ng, HCA 105/2004 (19 March 2021) at §§38-39.  The following factors were described as general indications that the court is expected to take into consideration:

(1)  Where a party with notice of proceedings has disregarded the opportunity of appearing and participating in the trial, he will normally be bound by the decision.

(2)  Where judgment has been given after a trial, it is the explanation for the absence of the absent party that is most important. Unless the absence was not deliberate but was due to accident or mistake, the court will be unlikely to allow a rehearing.

(3)  Where the setting aside of the judgment would entail a complete retrial on matters of fact which have already been investigated by the court, the application will not be granted unless there are very strong reasons for doing so.

(4)  The court will not consider setting aside judgment regularly obtained unless the party applying enjoys real prospect of success.

(5)  Delay in applying to set aside is relevant, particularly if during the period of delay the successful party has acted on the judgment, or third parties have acquired rights by reference to it.

(6)  In considering justice between parties, the conduct of the person applying to set aside the judgment has to be considered: where he has failed to comply with orders of the court, the court will be less ready to exercise its discretion in his favour.

(7)  A material consideration is whether the successful party would be prejudiced by the judgment being set aside, especially if he cannot be protected against the financial consequences.

(8)  There is a public interest in there being an end to litigation and in not having the time of the court occupied by 2 trials, particularly if neither is short.

Discussion

8.  Various decided cases are referred to by counsel.  Nevertheless, each case should be decided on its own circumstances, which very much dictated how the relevant factors mentioned above came to be considered.  Having fully considered the written submissions of the parties, this court has the following observations in the circumstances of the present case.

9.  Unlike the case of default judgment, which is entered on the basis of the pleaded claim without reference to evidence, the present case is one of judgment after the plaintiffs have proceeded to prove their case at trial.  As mentioned in the Judgment, the evidence of the plaintiffs was accepted as inherently credible and, more importantly, un-contradicted in the absence of the defendant.  That formed the factual basis for the application of the relevant law in support of the plaintiffs’ claim.  Hence the conclusion that the plaintiffs have proved their case.

10.  As much of the dispute between the parties was factual, one would not conclude, on the basis of the contentions and materials before the court, that the defence would have had no real prospect of success in any event, had the defendant attended the trial and subject the plaintiffs’ evidence and witnesses to challenge in court.  General indication (4) above will have to be considered in such light in the circumstances.

11.  That said, by his affirmations filed in support of the present application, the defendant, amongst other things, seeks to respond to this court’s observations and findings on the facts almost paragraph by paragraph of the Judgment.  For that purpose, the defendant even seeks to adduce evidence never disclosed in this action before.

12.  This is illegitimate.  Save in exceptional circumstances, the state of the evidence adduced by the parties, subject to cross examination of witnesses, should be crystallised at the time when the trial commenced.  The defendant may not take advantage of the Judgment as a rehearsal of the consideration of the evidence by the court, and then tailor the supply of further evidence with a view to bettering his case.  In other words, even if the Judgment is set aside and this case is to be retried, the defendant would only expect such further evidence to be disregarded unless the court is somehow called upon to properly consider if leave should be granted for adducing them for the purpose of the re-trial.

13.  In the circumstances, the predominant consideration is the reason for the defendant’s absence.  This is in line with the observation of the court in Chiu Tin Yau Lesley (above) at §40.  Peculiar in the present case is that, as mentioned, the defendant’s absence was not unannounced before the trial but he has actually sought but failed to obtain an adjournment of the trial.

14.  The defendant’s reasons for his absence from the trial were considered by this court.  Only that this court then decided not to adjourn the trial after hearing the plaintiffs.  General Indications (1) and (2) above will have to be considered in such light for the purpose of the present application.

15.  This court will not repeat the discussion explained in the Decision.  It suffices to say that this court had reservation whether the defendant adequately explained with supportive evidence of certain aspects of the circumstances that he relied on to account for his inability to appear and attend the trial.  As mentioned, there is no application for leave to appeal against the Decision.  Instead of seeking to overturning the Decision, the defendant effectively seeks to better his explanation and evidential support for the purpose of the present application.

16.  Certain circumstances, despite his explanation, remain reflective, in an adverse way, of the defendant’s prudence once he was said to be prevented from boarding the scheduled flight to Hong Kong.

17.  First, one should note that he has had by then the experience of absence from the pre-trial review which led to the provisional striking out of his counterclaim.  Nevertheless, he has somehow waited for 3 weeks before informing the plaintiffs and this court of his situation.  As a result, the window for any alternative arrangement, such as securing his appearance via the videoconferencing facilities (“VCF”) of the court, became narrow.

18.  Second, whilst the defendant admitted to the court that he was incapable of utilizing the VCF for the purpose of appearing in the pre-trial review hearing, he apparently decided not to resume his legal representation which would have put him in a relatively better position to present his situation to the court and to explore alternatives such as VCF. Clearly it was not that he would not do so in any event.  He briefed counsel for the purpose of the present application.

19.  Harsh as this may seem, the duty to meet a milestone date in legal proceedings as important as the trial would have called for the taking of no less than all practicable steps as soon as possible.  The defendant could have been more vigilant in his circumstances.

20.  Rather in line with his approach mentioned above, the defendant’s explanation and materials in support of his inability to attend the trial produced at different stages, including those produced only now, resembles what is commonly known as a “toothpaste squeezing” manner.  That would not be conducive to gaining the court’s understanding of his situation at the first opportunity.

21.  This court needs no reminder of the balance between the desirability of finality instead of re-opening of legal proceedings and the justice of affording all parties the fair opportunity to advance their case in court.  This court has considered the further explanation and evidence in support of such explanation for the defendant’s absence.  While criticism of the defendant from the plaintiffs must be expected, this court does not consider that the defendant’s further explanation and evidence are all liable to be rejected for being allegedly inconsistent and self-contradictory.

22.  The trial that took place involved the plaintiffs’ witnesses confirming and adopting their statements under oath without cross examination.  The trial finished within the morning session of the first day.  The concern about repetition of the trial process, if the Judgment is set aside, under general indication (8) above will have to be considered in such light in the present case.

23.  This court does not lose sight of the prejudice to the plaintiffs if the trial is re-opened on the other side of the balancing scale either.  At the end, and with much reluctance, this court finally decides to grant such second chance to the defendant.  This of course will be subject to conditions, and specific directions in connection with the re-trial.

24.  Wasted costs could be adequately compensated. The defendant could only have expected to pay the plaintiffs’ costs of the first day of the trial even if his application for adjournment had then been granted.  There is no reason for him to expect any less than such costs liability even when his present application is granted.  It is not that the plaintiffs were wrong, particularly when there is no application for leave to appeal against the Decision.  This was and is at all times the defendant’s request for indulgence of the court.  Therefore, the defendant must bear the plaintiffs’ costs of the trial wasted and those of and occasioned by the present application.

25.  Further, it is only fair that the Judgment will be set aside only upon the defendant’s payment of the plaintiffs’ costs mentioned above.  The defendant’s argument that costs of the present application should be in the cause is rejected.

26.  A major concern of the plaintiffs apparently is the prejudice in the form of the uncertainty of the ability of the Widow in her current physical condition to testify again in court.  Different from the stage when the evidence, oral and documentary, was yet to be verified and adopted in the trial, the oral evidence of the Widow in terms of her statement was as a matter of fact confirmed and adopted on oath in court.  Insofar as necessary, appropriate direction could be sought and given for the purpose of adducing such evidence already given under oath in court similar to that by way of an affirmation or deposition.

Conclusion and order

27.  I am prepared to allow the application and, subject to what are said below, set aside the Judgment.

28.  First, the costs consequence of the Judgment being set aside shall be borne and paid by the defendant in any event.  They include (i) the plaintiff’s costs of and occasioned by the defendant’s application for adjournment already ordered on 16 August 2021; (ii) costs of the first day of the trial on 16 August 2021 wasted as well as (iii) the plaintiffs’ costs of and occasioned by the defendant’s present application to set aside the Judgment.  Such costs shall be taxed forthwith, if not agreed, with the plaintiffs’ own costs to be taxed in accordance with legal aid regulations.

29.  Second, in the circumstances of the present case, it is appropriate to exercise discretion to impose a condition of payment by the defendant of an appropriate sum into court on account of the abovementioned costs of the plaintiff pending taxation.  For that purpose, the plaintiffs’ statement of costs and the defendant’s comment have been considered. The Judgment will therefore be set aside on condition that the defendant pays into court a sum of HK$400,000 on account of the plaintiff’s costs pending taxation and payable by the defendant as mentioned above.

30.  Due to the general adjournment of court proceedings announced by the Judiciary on 4 March 2022 with effect until 11 April 2022 and the incidental general closure of the court registry, the above condition of payment into court shall be satisfied within 5 working days after the re-opening of the court registry for conducting such business.  It shall be the duty of the defendant and those acting for him to pay close attention to the relevant announcement of the Judiciary.

31.  Third, upon the setting aside of the Judgment as aforesaid, the parties do proceed to fix the date for the re-trial of the present case with 8 days reserved in consultation with counsel’s diaries.  There shall be a pre-trial review for 30 minutes before the trial judge not less than 42 days prior to the trial.  Further:

(1)  the re-trial of the present case shall be held other than before this court;

(2)  the affirmations and exhibits thereto as well as the documents lodged by the defendant in support of the present application shall be kept in sealed envelope and withheld from the trial judge;

(3)  unless the trial judge directs otherwise, the trial bundles for the re-trial should follow those used before this court in the previous trial;

(4)  insofar as this becomes relevant upon the plaintiff’s application, if any, the Widow’s evidence in trial on 16 August 2021 may serve as her evidence taken under oath; and

(5)  the parties shall jointly write to the trial judge not less than 14 days prior to the pre-trial review, proposing other directions necessary for the trial.

32.  Last, in default of satisfying the condition mentioned above, this order to set aside shall lapse without further order of the court, and the Judgment shall stand and the above directions will not take effect.

HCA 2221/2016

[2021] HKCFI 2534

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2221 OF 2016

________________________

________________________

____________________

JUDGMENT

____________________

1.  This is the dispute in respect of the beneficial interest in the family home of Ng Nim Chung, deceased (“the Deceased”) and his widow (“the Widow”), which is situated at Flat 13, 20/F, Block D, Hiu Lai Court, No. 21 Hiu Kwong Street, Hong Kong (“the Property”). The Property was and still is registered in the names of the Deceased and the defendant, younger son of the Deceased, as joint tenants. The defendant has sought to evict the Widow from the Property after the death of the Deceased. The Widow, now in her personal capacity and as administratrix of the Deceased’s estate, claims that the defendant held and holds the Property on trust for the Deceased and now his estate, or alternatively the Deceased’s estate together with her, beneficially.

2.  Prior to the trial, the defendant informed the plaintiffs and this court of his inability to attend the trial, and there was the issue of his request for an adjournment of the trial made by letter.  The plaintiffs opposed.  After hearing the plaintiffs and considering the defendant’s written representation, I ruled against the defendant on his request for reasons that I explained in court, which are now reproduced separately in writing and handed down together with this judgment.

Background

3.  Much of the background is undisputed or, in view of the evidence, indisputable.

4.  The Deceased and Widow were married in Hong Kong in or about 1956.  The Deceased was a factory technician until his retirement in 1997. The Widow was a housewife since the 1980s.  They have 5 children, 4 of which are surviving[1]:

(1)  Ng Ki Man (“Ki Man”), son, who is married to Madam Shet Yuk Lei (“Madam Shet”);

(2)  Madam Ng Chui King (“Chui King”), daughter;

(3)  the defendant, who is married to Madam Chung Kuei Shen; and

(4)  Madam Ng Chui Ching Hermia (“Hermia”), daughter.

5.  Ki Man and Madam Shet have 4 children, including Ng See Nga (“See Nga”) (daughter), Ng Ho Hin (“Ho Hin”) (son) and Ng See Ngo (“See Ngo”) (daughter), who are therefore the grandchildren of the Deceased and the Widow.

6.  For some three decades up to early 1997, the Deceased and Widow had resided in a rented public housing unit, namely, Room 1726, 17^th Floor, Block 1, Shatin Pass Estate, Kowloon, Hong Kong (the “Public Housing Unit”).  The Deceased was the registered tenant, and the family members (ie, the Deceased, the Widow and their children) were authorized occupants, of the unit.  Gradually, the children moved out of the Public Housing Unit in the 1980s and removed their names as authorised occupants.  The only exception was the defendant, who remained as an authorised occupant notwithstanding his having moved out in the 1980s.

7.  In about 1996, it became known that the housing estate would be demolished and redeveloped.  At the time, the Deceased and Widow were residing at the unit together with their grandchildren See Ngo and Ho Hin.  Instead of accepting relocation to another rented unit, the Deceased decided to purchase and own a better property under the Home Ownership Scheme (“HOS”).

8.  By an assignment dated 21 February 1997, he and the defendant became the registered joint tenants of the Property.  Save for the down payment, the balance of the purchase price for the Property in the sum of HK$1,121,000 was financed by way of mortgage loan granted by Po Sang Bank (“1^st Mortgage”).  The Deceased and the defendant were the mortgagors.  A joint bank account was opened with Po Sang Bank (“1^st Joint Account") for the purpose of repaying the mortgage instalments.

9.  About the same time, in April 1997, the defendant and his wife, Madam Chung, also purchased their own property situated at Flat E, 1/F, Block 7, Discovery Park, the assignment of which was dated March 1998.

10.  Just months after the completion of the acquisition of the Property, on or about 29 May 1997, the Deceased paid to the defendant a sum of HK$100,393 (“the May 1997 Payment”).

11.  The Deceased and the Widow have since made the following financial arrangement regarding the Property.

12.  The Widow would personally deposit cash into the 1^st Joint Account as the Deceased instructed for the repayments of the 1^st Mortgage.  She was also responsible for arranging payments for the maintenance and other expenses in relation to the Property such as the management fees, rates and government rent, broadband network service, water, power as well as gas.

13.  In about February 2000, a second mortgage was taken out in respect of the Property with Hang Seng Finance Limited (“2^nd Mortgage”) to redeem and to replace the 1^st Mortgage for reason of better terms.  A new joint bank account was opened in the names of the Deceased and the defendant with Hang Seng Bank (the “2^nd Joint Account”) for the purpose of repaying the mortgage instalments under the 2^nd Mortgage. The Deceased and the Widow continued their financial arrangement concerning the Property as before.

14.  In August 2009, the defendant signed an application form to the Housing Authority, namely “業權轉讓申請書” (“the Transfer Application”) which stated that the defendant would forgo his interest in the Property to the Deceased.  A copy of his identity card and marriage certificate were attached to the application form.

15.  In early 2016, the 2^nd Mortgage was fully repaid and discharged.

16.  On 3 April 2016, the Deceased passed away intestate in Hong Kong.

17.  Since the acquisition of the Property in 1997, the Deceased and Widow had resided at the Property together with their grandchildren, children of Ki Man and Madam Shet.  The defendant never resided at the Property.

18.  The disagreement between the parties apparently surfaced after the death of the Deceased.  The writ herein was issued towards the end of August 2016 in the name of the Deceased, ie the 1^st plaintiff, but not served.

19.  On 1 September 2016, the defendant through his then solicitors, Messrs T L Ip & Co, sent a written demand addressed to “the occupiers” of the Property alleging that they had been occupying the Property pursuant to his licence, and he now revoked their licence and demanded them to quit and to deliver up vacant possession of the Property to the defendant on or before 31 October 2016.  The Widow, See Nga and Ho Hin were residing at the Property at the time.

20.  The Widow in her capacity as the adminstratrix of the Deceased’s estate joined as the 2^nd plaintiff, after letters of administration were granted to her on 5 October 2016.  The writ was served afterwards.

The parties’ pleaded cases

21.  The plaintiffs’ case is that notwithstanding the registration of the Property in the joint names of the Deceased and the defendant, the Property was beneficially owned by the Deceased solely, pursuant to common intention constructive trust and/or estoppel.  Alternatively, the defendant has been holding the Property on resulting trust for the Deceased and the Widow on the basis that the purchase price for the Property was paid out of the pool of funds or assets of the Deceased and the Widow, and the Widow arranged for the mortgage instalment repayments throughout the years.

22.  The pleaded case of the defendant is that he and the Deceased acquired the Property as legal and beneficial joint tenants.  Upon the death of the Deceased, the defendant became entitled to the entirety of the beneficial interest by the right of survivorship.  Without disputing that it was the Deceased and the Widow who arranged for the repayment of the mortgages, the defendant contends that he has also contributed by way of cash payment to the Deceased, unknown to the family, a fixed monthly sum of $5,000.  The Widow, the defendant contends, is not entitled to continue to reside at the Property without his permission.  As mentioned, he has sought to evict her and her grandchildren from the Property after the death of the Deceased.

23.  Counsel for the plaintiffs summarises the following major dispute:

(1)  Whether there was the common understanding that (i) the Property would be owned beneficially by the Deceased solely; (ii) the Deceased and/or the Widow would be responsible for funding the acquisition of the Property; and (iii) whether the Deceased intended the Property to be gifted to the defendant to the exclusion of the Widow and the other family members;

(2)  Who in fact funded the acquisition and the other related expenses of the Property;

(3)  Whether the defendant has been holding the Property subject to a common intention constructive trust or estoppel; or alternatively, resulting trust;

(4)  If yes, whether the plaintiffs are entitled to any of the relief claimed.

Common intention constructive trust

24.  Leung Hang Lin v Lam Mei Yung[2019] HKCFI 2819 (at §§8-9) contains a helpful summary of the principles regarding common intention constructive trust.  The starting point is that equity follows the law, and there is a presumption that the beneficial interest follows the legal interest.  The plaintiff may show on the balance of probabilities that the real intention of the parties concerned differs from what the registration of the legal interest in the property apparently suggests.  That will be where:

(1)  there was a common intention of the parties concerned at the time of the purchase (or exceptionally, thereafter) that the beneficial ownership in fact differed from the legal ownership;

(2)  the plaintiff altered his or her position in detrimental reliance upon the common intention; and

(3)  it is unconscionable for the property owner to assert ownership in reliance on the legal title.

25.  Common intention is assessed objectively.  It could be express at any time prior to the acquisition (or exceptionally, at a later date) by way of an agreement, arrangement or understanding reached between the parties as to how the property is to be held beneficially.  It could also be inferred from the parties' conduct such as direct contribution towards the purchase price by a party who is not a legal owner.  A holistic approach is adopted having regard to the context and the particular facts of the case.

26.  Relevant circumstances include any discussion between the parties concerned at the time of the conveyancing, reasons why the property was acquired in joint names or sole name, the purpose for which the property was acquired, the nature of the parties’ relationship, how the purchase was financed initially and subsequently, how the parties arranged their finances, the outgoings on the property and other household expenses: see Mo Ying v Brillex Development Ltd [2014] 3 HKLRD 224 (at §39); [2015] 2 HKLRD 985 (CA); Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 (at §§2.3- 2.4).  Joining a person as a joint owner of real property to facilitate the obtaining of mortgage loan has been held to give rise to a common intention constructive trust (or resulting trust below): see Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9 (at §113); [2015] 1 HKLRD 490;HoKwok Wing (何國榮) v Chan Mei Mui (陳美梅)[2020] 3 HKLRD 548 (CA) (at §3.12; 8.6(4)); Lai Hon Tim v. Lai Tsz Nang Wilson HCA 744/2018 (12 November 2020) (at §§23-24; 55-59); Sze Ka Wai v. Choy Wai Ka HCA 1825/2018 (25 February 2021) (at §8(1); 19(1)).

27.  Detrimental reliance requires some connection between the plaintiff’s conduct and her belief that she has an interest in the property such that she would not reasonably have been expected to so conduct herself unless she possesses such belief: see Mo Ying (above) (at §42).  Again, actual financial contribution towards the acquisition and maintenance of the property is normally a strong indicator: see Lewin on Trusts (20^th ed) (at §10-69).

28.  There is no reason why the above principles should not apply to properties acquired under the HOS.

Estoppel

29.  The plaintiffs advance the contention as to estoppel on two bases.

30.  Estoppel by convention, as explained in First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd & Another (2012) 15 HKCFAR 569 (at §79), arises in the following manner:

(1)  The parties entered into a transaction or legal relationship on the basis of a common or shared assumption.

(2)  The assumption was communicated between the parties and manifested by actual words or conduct by the parties on such assumption.

(3)  There was no necessity for the parties to believe that the assumed state of affairs was true, nor was there any necessity for the parties to have been mistaken.

(4)  The contents of the common assumption must be sufficiently certain to enable the court to give effect to it.

(5)  It would be unjust for a party to depart from the assumption that the other party has acted upon and suffered detriment by having so acted.

31.  Proprietary estoppel, as explained in Cheung Lai Mui v Cheung Wai Shing[2021] HKCFA 19 at [23], arises where (i) a representation or assurance was made to the claimant; (ii) the claimant relied on that; and (iii) she acted to her detriment.  Proprietary estoppel may arise by acquiescence or silence where a reasonable man would expect the person against whom the estoppel is raised, acting honestly and responsibly, to bring the true facts to the attention of the other party known to him to be under a mistake as to their respective rights and obligations: see Mo Ying (above) (at §8.2).

Resulting trust

32.  A resulting trust arises where there was absence of intention on the part of the person providing the purchase price of the property to benefit the recipient or arises from the presumed intention of the parties: see Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 (at §§2.6-2.7; 2.15).

33.  Where a parent makes a contribution towards a property purchased in the name of a child, the counter-presumption of advancement to benefit the child is rebuttable by contrary evidence: see The Joint and Several Trustees of theProperty of Yip Yam Yu Alex v. Yip Yam Yu Alex and Another HCB 3926/2015 (11 January 2019) (at §§39; 45).

34.  It has been observed that in a domestic context, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust: see Primecredit Ltd (at §1.3). At the end, it is a matter of ascertaining the understanding and intention of the parties known to each other at the relevant time – whether it was to benefit the registered owner beneficially notwithstanding the absence of or unequal contribution towards the acquisition of the property from him or whether the property was acquired in joint names pursuant to advice and for practical purpose without intention of conferring the beneficial interest associated with the registered and joint legal ownership: see Marr v Collie [2017] UKPC 17.

35.  Worth noting is the defendant’s contention in this respect in his written opening submission.  He argues that registration of the Property in the names of the Deceased and him as joint tenants effectively trumps.  He argues that because of the operation of the right of survivorship, it matters not who and how financial contributions had been made towards the acquisition of the Property including the mortgage repayments[2].  He also argues that it would not even have been up to either joint tenant to deal with his interest in the Property by way of bequest under a will[3]. In view of the legal principles explained in the preceding paragraphs, such contentions of the defendant must be rejected as being wrong in law.

The evidence

36.  The plaintiffs acknowledge their burden of proving that the Property, albeit registered in the joint names of the Deceased and the defendant, has been being held on trust for the Deceased beneficially. That said, the general principle remains that he who asserts and avers in his case bears the evidential burden of establishing the assertions: see in the context similar to the present case Iranian Offshore Engineering and Construction Company v Delaram Zavarei [2020] EWHC 2497 (Comm). Insofar as the defendant’s assertions as to fact are concerned, they were not substantiated when he was absent from the trial.

37.  On the plaintiffs’ side, the following witnesses gave evidence:

(1)  the Widow;

(2)  Ki Man;

(3)  Madam Shet;

(4)  Chui King;

(5)  Hermia;

(6)  See Nga; and

(7)  Ho Hin.

38.  The principles regarding assessment of credibility were summarised in Hui Cheung Fai v Daiwa Development Ltd HCA 1734/2009 (8 April 2014) at §§77-83:

(1)  Contemporaneous documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility.

(2)  In deciding whether to accept a witness’ account, importance should be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events.

(3)  Regard should be had to the consistency of the witness’ evidence with the undisputed or indisputable evidence, and the internal consistency of the witness’ evidence.

(4)  Care should be taken in drawing conclusions about truthfulness and reliability solely or mainly from the appearance of a witness or from the assessment of a witness’ character.

(5)  Witnesses’ credibility should be tested by reference to the objective facts proved independently of their testimony, and regard should be had to their motives and to the overall probabilities.

See also Northampton Borough Council v Cardoza and others [2019] BCC 582 (at §§36-39).

39.  The above witnesses adopted the content of their witness statements[4] as their evidence under oath.  Their evidence, including the follows, was not contradicted as the defendant was absent from the trial.

40.  It could be seen that the majority of the family of three generations stand together in one voice against the defendant.  The primary case of the plaintiffs is that the Property, notwithstanding its acquisition in the joint names of the Deceased and the defendant, was never intended to benefit the defendant absolutely.  If that is established, the entire beneficial interest in the Property remained with the Deceased and now his estate.  In other words, the claim does not seek to exclude the defendant’s entitlement to the estate of the Deceased.  Except for the Widow, no member of the family expects to benefit from the Property under intestacy of the estate of the Deceased to an extent any larger than that of the defendant.  Yet the starting point is that the Property is, as it always has been, the home of the Widow.

41.  As to the understanding behind the acquisition of the Property, the plaintiffs’ witnesses gave evidence in respect of matters in their personal knowledge at different points of time.  They testified in respect of the family background, including the fact that the defendant became quite independent and moved out of the family home in the 1980s.  In about 1996, it became known to the family that the housing estate, where the Public Housing Unit was situated, was going to be demolished and redeveloped, and thus entailing the Deceased and the Widow to have to move out.  There came the discussion amongst the Deceased, the Widow, and children about the idea of purchasing a unit under the HOS, which would be better than a replacement rented public housing unit.  It was contemplated that the Deceased would be the owner, and responsible for the down-payment and mortgage repayments.  Some support from some of the children was also contemplated.

42.  The Deceased then made enquiries with Po Sang Bank, and was informed that considering his age and being close to retirement, it would be easier for the mortgage loan to be approved if the purchase was made in the name of a younger family member or such member jointly with the Deceased.

43.  The Housing Authority also confirmed by letter in 2017 that in relation to the ownership arrangement of the flats sold under the HOS back in 1997, the applicant under the scheme must become the owner of the property, but he or she had the option of doing so in his or her sole name or in the form of joint tenancy with one of the family members who had reached the majority age.

44.  Further family discussion was held.  Considering that the then 34-year-old working defendant was at the time the only other remaining authorized occupant of the Public Housing Unit apart from the Deceased and the Widow, the idea of asking the defendant to join as co-owner of the property to be purchased in order to facilitate the obtaining of the necessary mortgage loan came about.

45.  The Deceased had apparently talked to the defendant about the above, as the Widow, Ki Man, Madam Shet, and Hermia were subsequently told by the Deceased that the defendant had agreed to lend his name for such purpose.

46.  Concerning the acquisition and maintenance of the Property, the conduct of the family members then and thereafter tends to lend weight a common intention regarding how the Property came to be acquired in the joint names of the Deceased and the defendant.

47.  What drove the Deceased to consider purchasing a property under the HOS was the practical need of the family home to accommodate himself and the Widow because of the demolition of their housing estate.  The fact was that they have resided in the Property since its acquisition.  The defendant has never resided in the Property or even possessed the keys to the Property since its acquisition.  The suggestion that while the Deceased was alive and residing at the Property, the Widow (and their grandchildren) managed to reside at the Property as well because of the defendant’s licence lacks evidence of credible assertion of property right by the defendant over all these years.  The defendant sought to do so after the death of the Deceased.

48.  It was also the evidence that the Deceased and the defendant had kept their finances separate, and it was the Deceased and the Widow, as the Deceased instructed, who arranged the mortgage repayments.  The source of funds in the 1^st Joint Account came from the Deceased and the Widow, government grants and subsidies as well as the monthly contributions given to them by some children and grandchildren.

49.  The plaintiffs’ case is adequately evidenced by contemporaneous documents.  The Widow quite capably assembled and produced the remittance advices/deposit slips in relation to the repayments of the 1^st Mortgage and the 2^nd Mortgage.  The available entries in the passbook of the 2^nd Joint Account are found to be matching with the repayments of the 2^nd Mortgage[5].  Counsel for the plaintiffs summarised and tabulated in his submission the mortgage repayments made by the Deceased and the Widow and the corresponding deposit slips/remittance advices as well as bank passbook entries.  There was no evidence of operation of the 1^st and 2^nd Joint Accounts in connection with the Property by the defendant.

50.  The Widow was also able to produce contemporaneous documents in connection with her payment of the rates and government rent, the utilities such as water, electricity, and gas, the broadband service fees and the management fees of the Property.  There is no evidence of any contribution by the defendant.

51.  According to the plaintiffs’ witnesses, the defendant had also acknowledged during a family meeting on about 6 August 2016 that the mortgage repayments were paid by the Deceased.  According to Chui King, the defendant had also admitted the same in a telephone conversation with her after the death of the Deceased.

52.  As counsel for the plaintiffs points out, the defendant’s case that the Deceased purchased the Property with a view to benefiting him beneficially and eventually with the entirety of the interest in it requires much persuasion to be acceptable in the circumstances of this case. As the idea of purchasing a property under the HOS at the material time was brought about by the practical need to find a replacement home in view of the demolition of the housing estate where the Deceased’s family lived, it is quite inconceivable that the Deceased had the intention of benefiting the defendant with the entirety of the beneficial interest in the Property, one day when the Deceased died, without any regard to the well-being of the Widow.  That the defendant sought to evict the Widow from the Property after the Deceased’s death appears to be something that the Deceased would not have foreseen.

53.  The defendant asserted various matters along the theme that the Deceased held things against the Widow.  For the latter, the assertion was that the Widow had an affair with another man.  That was not substantiated.  Further, according to the evidence of the plaintiffs’ witnesses, the person that the defendant implicated in his assertion was in favour an identified neighbour, whose circumstances and interaction with the Deceased’s family was explained.  That neighbour was not even around anymore by then.  Importantly, the fact was that the Deceased and the Widow continued to live as husband and wife at the time of and since the acquisition of the Property and until the Deceased’s demise.

54.  There was no evidence of pattern of the Deceased making provision to assist any of the children in acquiring properties, except for a HK$15,000 loan to Ki Man by the Widow at one point.  According to the Widow, that loan has also been repaid.  Insofar as it is suggested that there was reason for the Deceased to favour the defendant as opposed to the other children, the evidence of the plaintiffs’ witnesses suggested quite the contrary.  The suggestion against Ki Man personally is contradicted by the evidence of the plaintiffs’ witnesses.  As mentioned, the fact was that the children of Ki Man have also resided with their grandparents at different points of time at the previous rented unit and since 1997 at the Property. None of those who resided with the Deceased has ever been impressed that the Deceased favoured the defendant or has learned that the Deceased intended to benefit the defendant with interest in the Property.

55.  The defendant’s case is that he had made financial contribution towards the maintenance of the Property in the form of a fixed monthly payment of HK$5,000 to the Deceased.  By further and better particulars of his pleading, he alleges that such payments lasted from March 1997 to the end of 2013.  The amount of such total contributions allegedly exceeded HK$1.05 million.  Such contribution was allegedly kept secret from the rest of the family.  Up to the trial, that remained bare assertion without contemporaneous documentary evidence in support.

56.  As counsel for the plaintiffs points out, the defendant seems to suggest a different case in his opening submission dated 9 August 2021.  In his opening submission, the defendant asserts that the reason for joining him in the purchase of the Property was that the Deceased expressly requested for his financial assistance in repaying the mortgages.  This differs from his pleaded case that the Deceased intended to pass the entire beneficial interest in the Property to him to the exclusion of other members of the family.  When it came to the alleged fixed monthly contribution to the Deceased, the defendant now asserts that this lasted for 19 years from 1997 to 2015, and the total contributions were HK$1 million.  This was not exactly in line with the further and better particulars of his pleaded case mentioned above.  The inconsistency in these aspects of the defendant’s case has unfavourable reflection on the integrity of the defence even as a matter of assertions.

57.  Further, just two months after the acquisition of the Property, the Deceased paid a sum of HK$100,393 to the defendant, ie the May 1997 Payment mentioned above.  According to Ki Man and Chui King, the Deceased wanted to be fair to the defendant for the latter’s assistance in the purchase of the Property.  The payment was the Deceased’s gesture as if the latter had contributed towards the purchase.  The amount approximately represented the down-payment and capital expenses that the Deceased had paid. The defendant does not deny receipt of such sum, but claims no recollection of its nature.  However, if there were ever any understanding that the defendant had to contribute and thereby acquiring his beneficial interest in the Property, there would have been no reason for the Deceased to (re)pay such sum to the defendant.  If the Deceased intended to make a gift to the defendant, there would have been no reason for the Deceased to give the defendant such sum on top of the joint beneficial interest in the Property.  It should also be noted that all those happened during the same period of months when the defendant himself and his wife also purchased their own property at the Discovery Park.

58.  The defendant was also expected to explain his signing of the Transfer Form later in August 2009, which on its face suggests the defendant’s surrender of his right and interest in the Property.  Counsel for the plaintiffs points out that as a statement contained in a contemporaneous document that goes contrary to the defendant’s self-interest, considerable weight ought to be given to it.  He is trying to draw analogy with what was said by the final court in Wong Tak Yue v Kung Kwok Wai David & Another (No 2) (1997-98) 1 HKCFAR 55 (at 69A-C).

59.  The defendant claims no knowledge about the content of the form on the ground that he signed it in blank.  The plaintiffs’ witnesses explained how such a form came to be prepared.  In particular, See Nga explained how she came to handle the matter and witnessed the defendant’s signature on the form indeed in blank.  Madam Shet explained how she came to fill in the form afterwards at the instruction of the Deceased.  The Deceased also signed the form.

60.  It was a prescribed and printed form in Chinese for the application for the transfer of beneficial interest in properties under the HOS.  It is trite that he who appended his signature on a document which he was capable of reading and understanding will be held to its terms irrespective of whether or not he cared to read it, unless the document is affected by vitiating factors recognised by law.  If it was not for the purpose of transferring interest in the Property in his favour or to any third party, it is inconceivable that the defendant would have agreed to meet with See Nga and to sign the form, albeit in blank, without knowing why.  Any suggestion of his signature having been obtained by improper design then could not be substantiated unless there was cogent evidence commensurate with the seriousness of such suggestion.  There was none.

61.  Inherently credible, and not contradicted, the evidence of the plaintiffs’ witnesses by their statements, including those specifically mentioned above, is accepted.  Taking a holistic view of the circumstances according to such evidence, I find on the balance of probabilities that the plaintiffs’ case of common intention is proved, and it is unconscionable for the defendant to deny that he has been holding the Property as a joint tenant on trust for the Deceased and now his estate.

62.  The alternative reliance on the principle of proprietary estoppel or estoppel by convention is not necessary when this court finds and accept the existence of the common intention between the parties concerned that gave rise to the equity that should be recognised in favour of the Deceased and now his estate.  It was more than mere belief on the part of the Deceased that he was the beneficial owner of the Property that caused him and the Widow to act the way they did.  That said, in any event, I find the defendant indeed knew and allowed the Deceased and the Widow to have so acted in line with the understanding that the Deceased was the sole beneficial owner of the Property irrespective of the registered joint legal ownership with the defendant.

63.  As mentioned, it has been observed that in a family context, the finding of a positive common intention regarding beneficial interest in the property suggests that there is no need to resort to resulting trust: see Primecredit Ltd (above) (at §1.3).  The present one is such kind of case.  Insofar as it is necessary to clear any doubt, any contention as to positive or presumed intention on the part of the Deceased in favouring the defendant with beneficial interest in the Property by getting him to jointly hold the Property must accordingly be rejected or rebutted as a matter of fact.

Other alternative cause of action

64.  A further alternative claim is for money had and received and/or unjust enrichment on the part of the defendant to the extent of the financial contributions paid by the Deceased and/or the Widow.  In view of the above finding, I see no need to embark on the analysis of this alternative cause of claim.

Conclusion and relief

65.  I find the plaintiffs have proved their case.

66.  I enter judgment in favour of the Deceased’s estate (ie the 2^nd plaintiff), and make the following declaration:

(1)  the Deceased was at all material times, and now his estate is, solely entitled to the beneficial ownership, title and interest in the Property, whereas the defendant was not and is not; and that the full beneficial ownership, title and interest in the Property now forms part of the estate of the Deceased;

(2)  the defendant at all material times held his legal title and interest in the Property on trust for the Deceased and now holds the same on trust for the estate of the Deceased.

67.  I order that the defendant do take all necessary steps for the transfer of his title or interest in the Property to the Widow as the administratrix of the estate of the Deceased (ie the 2^nd plaintiff) subject to the terms and regulations governing the HOS.

68.  As to the claim for the return or account and enquiries as to the traceable proceeds of the Property, counsel for the plaintiffs acknowledged during the trial that this is not substantiated in terms of allegation and evidence.  The alternative claim for equitable compensation was also dropped.

69.  As mentioned, the counterclaim was provisionally struck out by Hon K Yeung J during the pre-trial review hearing in May 2021. There has since been no indication of any intention of applying for its restoration within 3 months pursuant to O25, r1C(3).  For the avoidance of doubt, the counterclaim stands dismissed pursuant to O25, r1C(6)(a). Alternatively, following the proof of the plaintiffs’ case which at the same time displaces the defence, the counterclaim that is founded on the same case in defence must also be dismissed.

70.  Following the above event, I make a nisi order that the defendant shall pay the plaintiffs’ costs of this action, including any costs reserved, to be taxed, if not agreed.  The plaintiffs’ own costs shall be taxed in accordance with legal aid regulations.

Remark

71.  As counsel for the plaintiffs acknowledged, judgment and order obtained after trial in the absence of the defendant is subject to O35, r2 which allows the defendant to make an application within 7 days after trial to set aside the judgment and order.

HCA 2221/2016

[2021] HKCFI 2423

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2221 OF 2016

________________________

________________________

____________________

DECISION

____________________

1.  This is day one of the trial of this case, which is expected to last for 8 days. The plaintiffs, essentially the estate of Ng Nim Chung, deceased (“the Deceased”), commenced the present action to recover from the defendant, son of the Deceased, the property which was and is registered in the name of the Deceased and the defendant. The Deceased’s widow, mother of the defendant, is the administratrix of the estate. She is as of today 88 years old.

2.  The defendant used to be legally represented until March 2019.  He still acts in person.

3.  When the case was before Hon K Yeung J for pre-trial review on 5 May 2021, the defendant was absent from the hearing.  His information to the court in late April 2021 indicated that he could not attend as he was in the UK.  By email on the day before that hearing, the defendant further indicated to the court that he was unable to appear via video-conferencing facilities of the court, in view of the time and the know-how required of him.  Not surprisingly, the court proceeded in his absence, and pursuant to O25, r1C(2), struck out his counterclaim on provisional basis. What remains is his defence.

4.  By letter dated 22 July 2021, which the court received by fax on 23 July 2021 (Hong Kong time), the defendant informed the court that he would be unable to return to Hong Kong to attend the trial as scheduled, and sought an adjournment of the trial.  His ground was that he was banned from boarding the flight booked from London via Amsterdam to Hong Kong on 29 June 2021.  Subsequently, the Hong Kong Government imposed a ban on all incoming flights from the UK with effect on 1 July 2021.  He enclosed copies of (i) airline ticket confirmation for the flight on 29 June 2021; (ii) hotel confirmation for booking for quarantine upon arrival at Hong Kong on 30 June 2021; and (iii) certificate of COVID-19 testing dated 27 June 2021.  The letter was copied to the plaintiffs’ solicitors.

5.  On 28 July 2021, this court issued direction requesting the plaintiffs to state their observation regarding the defendant’s letter.  This court made clear that in the meantime, unless otherwise directed, the trial arrangement was maintained as scheduled.

6.  By letter dated 28 July 2021, the plaintiffs’ solicitors explained to the court that the defendant’s above letter did not warrant their formal response as there was no formal application.  However, one wonders how a litigant in person would be in a position to file a formal application for an adjournment on the ground of his very absence from the jurisdiction, unless perhaps by instructing legal representatives to do so on his behalf.  Acutely aware of the fact that there was no formal application before the court, what this court expected, as stated in the direction, was the plaintiffs’ observation and making known their stance to the court and the defendant instead of remaining silent until the first day of the trial.

7.  The plaintiffs’ solicitors then stated their stance that adjournment would be opposed, and submission would be made in that regard at the commencement of the trial.  In view of the plaintiffs’ response, the defendant sent a further letter dated 30 July 2021 by fax.  He reiterated that he would have attended the trial, but for the frustration by the pandemic situation.

8.  On 30 July 2021, the plaintiffs’ counsel lodged and served his submissions.  Apart from the opening submission on the issues for trial, he made his submissions on the grounds for opposing an adjournment of the trial.

9.  Counsel reiterates the lack of formal application for an adjournment.  Reference was made to AXA China Region Insurance CoLtd v Leong Fong Cheng [2016] 6 HKC 220 per 232H-233A (§53).  What the appellate court stated in that case was no doubt the general principle. However, the physical inability of a litigant to file a formal application because of the pandemic, as mentioned above, was not contemplated at the time.

10.  In any event, it is submitted that adjournment of the trial should not be granted for the following reasons:

(1)  A trial date is a milestone date: O25, r1B(8) of the Rules of the High Court, Cap 4A.  Under O25, r1B(3), the court shall not vary a milestone date, unless there are exceptional circumstances justifying the variation.

(2)  The court will take into account factors including (i) nature of the proceedings; (ii) nature of difficulty preventing witness from attending and whether the applicant is responsible for creating that difficulty; (iii) efforts of the applicant to resolve the issue by exploring alternatives; (iv) whether the adjournment will resolve the problem; (v) risk of prejudice or other disadvantage to other parties if adjournment is granted; and (vi) wider implications on the administration of justice: see Velatel Global Communications Inc v Chinacomm Ltd HCA 1978/2011 (22 March 2016).

(3)  The defendant has not filed any affirmation to verify his explanation for his alleged inability to attend trial.  There is no explanation at all why he was allegedly banned from boarding the flight to Hong Kong on 29 June 2021.

(4)  Based on public information, there should be alternatives whereby the defendant could have attempted to make his way back to Hong Kong afterwards.  There is no explanation of whether and, if yes, what effort the defendant has made to arrange an indirect flight via a transit country where there was no restriction on flights to Hong Kong.  It was also pointed out for instance that the defendant could have booked a flight to a country in Group A2, B, C or D (e.g. Singapore, Thailand, Malaysia, the Netherlands)^[1] and stayed there for 21 days, and then book a flight for arrival at Hong Kong 3 weeks before trial.  The defendant could be out of quarantine after arrival in Hong Kong about a week before the trial.  There is no evidence that such alternative was practically impossible.

(5)  It is also suggested that the defendant could have applied to the Department of Justice for dispensation of the strict requirement of quarantine to enable him to give evidence in legal proceedings, which has apparently been allowed in other cases: see reference in Standard Chartered Bank (Hong Kong) Ltd v Lau Lai Wendy & Anor[2021] 1 HKLRD 712 at §10.

(6)  In any event, the defendant’s situation was self-induced.  Leave to set down the trial was granted since December 2019.  As mentioned, he experienced the provisional striking out of his counterclaim as a result of his absence from the pre-trial review hearing in May 2021.  Whilst he confirmed then to the court that he would return to Hong Kong to attend the trial, he has not acted promptly and conservatively with a view to enabling himself to do so in good time.

(7)  Whilst the defendant was allegedly prevented from boarding the flight on 29 June 2021, he has somehow waited for 3 weeks before writing to the court and the plaintiffs with no explanation for such delay or why that alleged episode happened to him on 29 June.

(8)  Reference is made to no attempt by the defendant to restore his counterclaim under O25 r1C(4) after its having been provisionally struck out.  Further, contrary to the direction of Hon Yeung J at the pre-trial review, the defendant has failed to respond to the plaintiffs’ request for agreement or comment on the trial bundles.  The failure, it was pointed out, was a factor taken into account by the court in refusing a last-minute adjournment: see Tsang Wing Kwai v Wong Wing Sze Tiffany[2019] HKCFI 2790 at §12.

11.  The defendant, so the plaintiffs submit, was the author of his own misfortune, while his request for adjournment is categorised as tactical manoeuvre.  Delay in making application for adjournment is sufficient reason for it to be dismissed: see Lau Lai Wendy(above) at §7.  The defendant is said to be dilatory and the genuineness of his intention to contest the case at trial was questioned.

12.  Seeing the above written submissions of counsel for the plaintiffs, the defendant sent in his written representation, which was received by fax near midnight by the court on 9 August 2021 (Hong Kong time).  For the first time, he explained that he was prevented from boarding the plane for Hong Kong on 29 June 2021 on the ground that he had been in contact with confirmed infected person(s).  He was allegedly required to undergo home quarantine for 14 days thereafter.  Taking into account the mandatory quarantine required upon arrival at a transit country and then Hong Kong, he would still have been unable to attend the trial.  He also pointed out the various uncertainties then in making the further arrangement for the necessary flight and hotel in the transit country and Hong Kong for the necessary quarantine.

13.  Each case is decided on its own facts.

14.  An important consideration is whether or not the defendant was dilatory or has demonstrated no genuine intention to defend the trial.  As mentioned, it was pointed out that notwithstanding the provisional striking out of his counterclaim for his absence from the pre-trial review hearing in May 2021, the defendant has not taken any step to seek to restore it.  It should be noted that the counterclaim essentially follows his case in defence to the claim.  Further, the defendant was also not responsive to the plaintiffs’ attempt to consult him in respect of the compilation of the trial bundle, contrary to the direction of the court at the pre-trial review hearing.

15.  Whilst the defendant put forward what appears to be documentary proof of his arrangement to fly back to Hong Kong on 29 June, he made no mention of how he came to be allegedly banned from getting on board the scheduled flight in his letter dated 22 or 30 July 2021.  He did not do so, until after the plaintiffs’ counsel pointed out the deficiency in his explanation and materials in support in his opening submission.

16.  Though he now sought to explain that he was allegedly banned from boarding the flight because of his contact with confirmed infected person(s), and that he was mandated to home quarantine in the UK as a result, he produced not a single trace of documentary evidence in that connection.  For a country like the UK, that is the least expected, if what the defendant claimed was the fact.

17.  Most importantly, the defendant has himself to blame for his situation.  Most of the points made by the plaintiffs above are valid.  The pandemic is no longer new.  Nor is its uncertain development. Resurgence of confirmed infection cases and the discovery of variants of the virus in different parts of the world, as well as their implication on international travel, are hardly news either.  The defendant made his conscious decision to depart and/or remaining out of Hong Kong, and thus exposing himself to such risk that may impact on his return to Hong Kong.  When it comes to such impact on his ability to meet the milestone dates of the court as a party to legal proceedings, which must be paramount and strictly necessary, the risk was entirely for him to take, quite regardless of whatever personal reason he might have for taking the risk in the first place.

18.  Worse still, the defendant has somehow waited for complete 3 weeks after his alleged failure to board the plane before writing to the court and the plaintiff.  No explanation for the delay was offered.  Nor was the reason for his alleged episode at the airport on 29 June until his submission dated 9 August.  In view of his further explanation dated 9 August, he probably took the view that it mattered not whether he should promptly inform the plaintiffs and the court, as he also probably concluded that it would be impossible for him to make it to the commencement of the trial in any event.  Counting on the adjournment he apparently was.

19.  If the practical impossibility of seeking to return to Hong Kong after the alleged episode at the airport on 29 June was indeed his conclusion, it would still have been for him to satisfy the court with that by evidence.  However, what he did was to comment on the submission of the plaintiffs’ counsel about the practical alternative of returning to Hong Kong via a third country.  He pointed out the uncertainties in the time and arrangement needed for such purpose.  As the burden was on him to justify the requested adjournment, he was expected to come up with concrete evidence of the steps actually taken to make it happen. Projecting the uncertainty in making the necessary arrangement, yet not actually attempted, and the uncertainty in the restriction and quarantine requirement of the third countries that might have to be involved is not sufficient.  As counsel for the plaintiffs submits, there is also in place a mechanism whereby application might be made to the Department of Justice with a view to special mandatory quarantine requirement upon arrival at Hong Kong.  There is no material to show that the defendant has sought to explore that or that he was for any reason not eligible to attempt that.

20.  I must also take into account the advanced age of the 2^nd plaintiff, mother of the defendant, who would be at the receiving end of the requested adjournment.  The concern about the impact of delaying the trial for a long period of time on her ability to give oral evidence lucidly is valid.  Further, the plaintiffs are legally aided, and counsel informed the court that he himself would not be available to stay in the case unless the adjourned trial would take place not earlier than the second half of next year. If an adjournment for a shorter period than that is ordered, and assuming that the court’s diary manages to accommodate, change of counsel would have been entailed.  This would not be desirable to the plaintiffs and when the public fund is engaged.

21.  The proper balancing in the administration of justice in these circumstance, in my view, tilts against the defendant, who took the risk that now materialized before him, and who has, but fails to discharge, the burden to satisfy the court that he has indeed taken all the necessary steps to enable his attendance at the trial.  In the circumstance, I come to conclude that an order pursuant to O35, r1(2) ought to be made to allow the plaintiffs to proceed in the defendant’s absence.

[Counsel submits on costs.]

22.  Costs occasioned by the defendant’s request for adjournment (including hearing time spent on this from 10am to 12:04pm today) be payable by the defendant in any event, to be taxed, if not agreed.