Szeto Chak Mei (The Sole Administratrix of the Unadministered Properties of the Late Szeto Chiu, Deceased) v. Chan Lam Shanand Others

HCMP 836/2012

MISCELLANEOUS PROCEEDINGS NO 836 OF 2012

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J U D G M E N T
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Introduction

1.The plaintiff brings this action as the sole administratrix of the unadministered properties of the late Szeto Chiu, her father (“the deceased”).

2.This case concerns a dispute between the plaintiff and her former sister‑in‑law, the 1^st defendant, over Flat B, 16^th Floor, 120 Broadway, Mei Foo Sun Chuen, Kowloon (“the Flat”). The Flat is part of the unadministered properties of the deceased.

3.The plaintiff claims delivery of vacant possession of the Flat and damages to be assessed.  By counterclaim, the 1^st defendant claims that she is entitled to the vesting of the Flat in her absolutely, relying on proprietary estoppel.  Counsel agreed that the 1^st defendant’s case would be presented first given that this matter would turn primarily on the evidence regarding the counterclaim.

4.The 2^nd and 3^rd defendants are the 1^st defendant’s daughter and son respectively and the 4^th defendant is the 3^rd defendant’s wife.  They live with the 1^st defendant in the Flat.

5.Mr Anson Wong SC, leading Mr Jeffrey Li, appeared for the plaintiff and Mr Paul H M Leung appeared for the defendants.

Background

6.The following is not in dispute.

7.On 2 September 1980, the 1^st defendant married the plaintiff’s brother, Richard Szeto.  Prior to the marriage, Richard Szeto lived with his parents (ie the deceased and his wife, Mdm Lui Wai Lam (“Mdm Lui”)) in their home in Prince Edward Road (“the Prince Edward Property”).  After the marriage, both Richard Szeto and the 1^st defendant lived with his parents at the Prince Edward Property.  In January 1981, the 1^st defendant’s first daughter was born.  (The first daughter is not a party to these proceedings.)

8.A Land Register search shows that, on 14 November 1980, the deceased became the registered owner of the Flat.  In 1982, Richard Szeto, the 1^st defendant and their first and second daughters (the latter is the 2^nd defendant) moved into the Flat.  The 1^st defendant has lived in the Flat ever since with the 2^nd and 3^rd defendants.

9.During the first several years of their occupation of the Flat, Richard Szeto and the 1^st defendant did not pay any rent, management fees or rates.  During these years, the deceased paid the management fees and rates. From 1992, Richard Szeto and/or the 1^st defendant paid management fees and from 2002 the 1^st defendant paid rates, together with management fees. 

10.On 17 April 1998, the deceased died intestate.

11.In 1999, the Flat was renovated, the cost of which was paid for by the plaintiff.

12.In early 2000, Richard Szeto petitioned for a divorce from the 1^st defendant. Prior to the divorce, Richard Szeto had moved out of the Flat.  The Decree Nisi Absolute is dated 21 September 2001.

13.On 17 October 2000, Letters of Administration of the deceased’s estate were granted to Mdm Lui.

14.On 6 May 2010, Mdm Lui died, leaving part of the deceased’s estate, including the Flat, unadministered.

15.By letter, dated 1 September 2010, addressed to “The Occupant”, the plaintiff’s solicitors, acting for the “sole executrix of the late [Mdm Lui]”, demanded vacant possession of the Flat asserting that occupation of the Flat “is without the express authorization of our client and/or our client’s predecessor and is therefore unlawful”.  Thereafter followed further letters of demand. The last letter of demand is dated 16 January 2012, essentially in the same terms as the first letter, dated 1 September 2010.  None of these letters received a reply.

16.On 21 June 2011, probate of the Mdm Lui’s will was granted with the plaintiff as the sole executrix.

17.On 7 November 2011, Letters of Administration de boni non of the unadministered estate were granted to the plaintiff.  The Land Register search shows that, on 7 November 2011, the Flat was registered in the plaintiff’s name as administratrix of the unadministered estate of the deceased.

18.On 5 May 2012, the plaintiff’s solicitors served an originating summons on the defendants, which had been filed on 30 April 2012.  On 23 April 2013, the court ordered the action to continue as if begun by writ.

19.No formal transfer of the Flat to either Richard Szeto or the 1^st defendant was ever made.

20.From the time she was a primary school student until May 2012, the first daughter lived with the deceased and Mdm Lui (until their deaths), and the plaintiff in the Prince Edward Property.  The plaintiff paid for the first daughter’s education in the United States.  The plaintiff had always lived with her parents until their deaths (save for a short period of study in the United States) and, thereafter, she remained in the Prince Edward Property.

The plaintiff’s case

21.The plaintiff’s case is that the defendants occupy the Flat under licence and, by several letters, including the one dated 16 January 2012, the plaintiff notified the defendants that their licence to occupy the Flat had been revoked and demanded that the defendants vacate the Flat.  The plaintiff alleges that the letters were ignored and the defendants have failed to deliver vacant possession of the Flat.  Hence, the plaintiff seeks an order for vacant possession with damages to be assessed.

The defendant’s case

22.The 1^st defendant claims ownership or entitlement to occupy the Flat, relying on the doctrine of proprietary estoppel.  At the end of the trial the 1^st defendant’s Mr Leung submitted that judgment should be entered for the 1^st defendant, giving her no less than a 50% share of the Flat as tenant in common.

23.The 1^st defendant contends that there had been representations made by the deceased, by words and conduct, and, after his passing, by the estate (through Mdm Lui), to the effect that the 1^st defendant would have property interests in the Flat and could live there indefinitely and such representations have been relied upon by the 1^st defendant to her detriment.  The 1^st defendant says it would be unconscionable to allow the estate to repudiate those representations.

24.The representations relied on are the following:

(1) During a meeting attended by the deceased, Mdm Lui, the 1^st defendant’s parents, Richard Szeto and the 1^st defendant in the summer of 1980, the deceased said that he would take good care of Richard Szeto and the 1^st defendant, saying that they would not have to worry about looking for a place of residence after their wedding because the Flat would be their matrimonial and family home.

(2) A few weeks after the wedding, at a family gathering in or about late September 1980, Mdm Lui spoke for and in the presence of the deceased, to Richard Szeto and the 1^st defendant stating that it was the deceased’s intention to pass the Flat to the newlyweds provided that they should be filially obedient to the deceased and Mdm Lui and dutiful to the family.  (This representation appears in para 22 of the Defence and was described by Mr Leung as the “crux” of the 1^st defendant’s case.)

(3) In about 1982, the deceased gave possession of the Flat to Richard Szeto and the 1^st defendant for them to move into and reside.

(4) One day in early 1990, the plaintiff telephoned the 1^st defendant and told her that the deceased had asked her to make necessary arrangements for the formal transfer of ownership of the Flat to Richard Szeto and the 1^st defendant.

(5) After the death of the deceased, Mdm Lui became administratrix of the estate.  She continued to allow the 1^st defendant and her family to live in the Flat indefinitely, notwithstanding the dissolution of the 1^st defendant’s marriage to Richard Szeto.

25.Of the representation set out in para 24(1) above, the 1^st defendant said in her witness statement:

“… Some elder brothers of [Richard Szeto] were successful in their academic studies. However, his academic result was not satisfactory, and thus he could only find a job of kitchen apprentice after graduation. My income as a saleslady was not high either. Thus, the greatest concern of my parents and I was whether [Richard Szeto] could financially take care of me and the new born baby after the marriage. At the meeting, [the deceased] praised [Richard Szeto] as a hardworking young man, and said that he would take care of [Richard Szeto] and me. He also made a promise to [Richard Szeto] and me that we did not need to worry about finding a place to live after the marriage, because he had coincidentally bought a residential property, i.e., the property in this action, and we could live peacefully at that property as our family home. That was the first time I had heard of [the deceased’s] plan to make that property as [Richard Szeto’s] and my home.”

26.Of the representation set out in para 24(2) above, the 1^st defendant said in her witness statement:

“At a family gathering shortly after the marriage, Madam Lui, in front of [the deceased], indicated to [Richard Szeto] and me that the plan of [the deceased] was to transfer the property to us in the future, provided that we should show filial obedience to them and take good care of the family. She also indicated that she did not want to live with her daughters‑in‑law under the same roof, in order to avoid conflict between mother‑in‑law and wife. Therefore, she supported [the deceased’s] decision to separately buy a property for us.”

27.Of the representation set out in para 24(4) above, the 1^st defendant said in her witness statement:

“In early 1990, I received a phone call from [the plaintiff]. During the conversation, she informed me that [the deceased] had entrusted her with the arrangement of the transfer of the ownership of the property to [Richard Szeto] and me. She asked me for our personal particulars to process the matter. We were not surprised by it, since we had all along believed that the property’s ownership would ultimately be transferred to us. We were not in a hurry to process the formal procedure of the transfer of ownership of the property. Since it was taboo for the elderlies to distribute their assets too early, I replied that it was not necessary to complete the transfer of ownership in a hurry and we could wait for some time until [the first daughter] attained the age of 18 to take care of the procedure. Another reason of [sic] saying this was that [Richard Szeto] had mentioned to me the covert struggle amongst his siblings. Hence, [Richard Szeto] and I had a mutual understanding that we believed it would be better not to complete the formal transfer of the ownership when [the deceased] was alive in order not to deepen the conflict amongst his siblings.”

28.Mr Leung submitted that, although the representation or assurance was contingent upon Richard Szeto and the 1^st defendant being filially obedient and dutiful to the family, the fact that in early 1990 the plaintiff telephoned the 1^st defendant and told her that the deceased had asked her to make necessary arrangements for the formal transfer of ownership of the Flat to Richard Szeto and the 1^st defendant indicates that the deceased considered that the conditions had been fulfilled or, as Mr Leung put it, the promise had crystallized at that point in time.

29.The detriment relied upon by the 1^st defendant is:

(1) On the understanding or belief that the Flat would be transferred to her in due course, the 1^st defendant agreed to terms of ancillary relief in her divorce proceedings, whereby Richard Szeto was to pay her a lump sum of $9,000 and monthly maintenance of $800 for herself and each of her children.  The 1^st defendant says that these were nominal sums wholly inadequate for any divorced wife or her children to live on if they did not have somewhere to live.

(2) The 1^st defendant has been paying management fees since 1992 and rates since 2002 in respect of the flat.

The alleged representations

30.It is the 1^st defendant’s burden to prove the representations. The plaintiff’s position regarding the representations is:

(1) The plaintiff does not admit that the representations or assurances set out in paras 24(1) and 24(2) were made.  In any event, the representations or assurances are far from clear and unequivocal and are incapable of conferring any right or entitlement on either Richard Szeto or the 1^st defendant after their divorce.

(2) The plaintiff denies the representation set out in para 24(4) above and says it is telling that despite the 1^st defendant’s allegation that the deceased wanted to complete the formality for the transfer of the flat to Richard Szeto and her, nothing happened.  The absence of such transfer is an objective, undisputed fact which militates strongly against the 1^st defendant’s case.

(3) As to the matters set out in paras 24(3) and 24(5) above, these are neutral.  The fact that an owner allows a person to reside in his property, without more, does not amount to any representation that she would have an interest in the property.  Such a mere fact, without more, is consistent with a bare licence.

Legal principles

31.The three main elements of the doctrine of proprietary estoppel are: (a) a representation or assurance made by the owner of the land to the claimant; (b) reliance on it by the claimant; and (c) detriment to the claimant in consequence of his (reasonable) reliance.  See: Snell’s Equity,33^rd ed, para 12‑033; Thorner v Major & ors, [2009] 1 WLR 776 per Lord Walker at para 29.

32.To establish a proprietary estoppel, the representation or assurance must be clear enough or, put another way, sufficiently clear and unequivocal.  In a case of the sort before me, what amounts to sufficient clarity is dependent on context.  See: Thorner v Major & ors, supra, at paras 15 and 56.

33.The three elements are not separate compartments.  As Robert Walker LJ said in Gillett v Holt [2001] Ch 210 at 225C:

“… it is important to note at the outset that the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments. Both sides are agreed on that, and in the course of the oral argument in this court it repeatedly became apparent that the quality of the relevant assurance may influence the issue of reliance, that reliance and detriment are often intertwined, and that whether there is a distinct need for a ‘mutual understanding’ may depend on how the other elements are formulated and understood. Moreover the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round.”

34.Mr Leung referred me to Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 per Ribeiro PJ at paras 60 and 61; Hong Kong Hua Qiao Co Ltd v Cham Ka Tai [2015] 4 HKC 167 per Kwan JA at paras 22, 26 and 27 for the proposition that it is the substance of the meaning of the representation or assurance that has to be clear and unequivocal.  In particular, Mr Leung referred to para 60 of Xing Juan v Estate of Hui Shui See, supra:

“The court will seek to ascertain the meaning in substance of the promise. It is the substance of its meaning that must be clear and unequivocal. A promisor may make his intentions perfectly plain but, not being a lawyer, may express himself in terms which are legally imprecise or inaccurate. A promisee may likewise clearly understand the substance of what is being said or represented without any knowledge of the legal rights or powers within which the representations or assurances are framed.”

35.Both Luo Xing Juan v Estate of Hui Shui See and Hong Kong Hua Qiao Co Ltd v Cham Ka Tai concerned promissory estoppel and the passage quoted above must be read in that context.  Nevertheless, at para 61, Ribeiro PJ referred to the Australian case of Green v Green (9189) 17 NSWLR 343, a case of proprietary estoppel, as setting out a helpful approach:

“Similar situations arise where cohabiting couples form a common intention regarding shared interests in property and a helpful approach to getting to the substance of their mutual intentions is suggested by Gleeson CJ in Green v Green. The man, who owned the property and had since died, had repeatedly told the woman with whom he cohabited … that she was to have ‘this house’ and made other statements to similar effect. He was found clearly to have promised (and to have been reasonably understood to have promised) her an interest in the property but he had obviously not addressed the precise beneficial interest that the woman was intended to take. Gleeson CJ stated that the proper approach in such a case:

‘… is to seek a result which will most closely give effect to the common intention of the parties bearing in mind, first, that they did not themselves specifically address the matter of the legal form which would be conducted to give effect to their intention, and secondly, that this is an area in which equity is at its most flexible. …’

The Court translated the clear intention that the woman should have a beneficial interest in the property into a finding that the couple intended that they should be beneficially entitled to the property as joint tenants, giving the woman the right of survivorship.  A similar approach is helpful when assessing the meaning of promises relied on in the promissory estoppel context.”

36.As for the element of reliance, the test is not a “but for” one.  The promises relied upon do not have to be the sole inducement for the conduct; it is sufficient if they are an inducement.  Once it has been established that promises were made and that there has been conduct by the plaintiff of such a nature that inducement may be inferred, then the burden of proof shifts to the one claiming vacant possession to establish that the claimant did not rely on the promises.  See: Wayling v Jones (1993) 69 P&CR 170 at p 173; Hong Kong Hua Qiao Co Ltd v Cham Ka Tui, supra, at para 30 (Kwan JA):

“Mr. Kwong correctly pointed out that the ‘but for’ test propounded by Mr. Wong is wrong in law. If suffices so long as the Deceased’s promises were an inducement. It is not necessary to establish but for the promises, Madam Cham would not have acted in the way she did. The correct legal position is as stated by Balcombe LJ in Wayling v Jones (1993) 69 P&CR 170 at 173:

‘…

(2) The promises relied upon do not have to be the sole inducement for the conduct: it is sufficient if they are an inducement … .

(3) Once it has been established that promises were made, and that there has been conduct by the plaintiff of such a nature that inducement may be inferred then the burden of proof shifts to the defendants to establish that he did not rely on the promises … .’”

37.Turning to detriment, first, there must be a sufficient causal link between the representation or assurance relied upon and the detriment asserted.  See: Snell’s Equity, 33^rd ed, para 12‑042.

38.Second, since only detriment arising from reasonable reliance is relevant, detriment arising from reliance that could not reasonably be expected is to be disregarded.  See: The Law of Proprietary Estoppel, McFarlane, para 4.69.

39.Third, detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial.  The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it.  Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded, in other words, whether repudiation of an assurance is or is not unconscionable in all the circumstances.  See: Gillett v Holt [2001] Ch 210 at p 232D – F; Li Yuk Ying v Wong Yuet Kam [2013] 1 HKLRD 967 at para 13.

40.Fourth, if lost benefits or detriment are merely speculative, they should not constitute a relevant detriment, although the mere fact that it is a possibility, as opposed to a probability, that something would have happened may not prevent that possibility founding an estoppel.  See: The Law of Proprietary Estoppel, McFarlane, paras 4.194 and 4.199; Steria Ltd & ors v Hutchison & ors, [2007] ICR 445 at paras 126 and 127.

41.Fifth, to look at the question of detriment in the round, a court must consider countervailing benefits acquired by the claimant as a result of the course of conduct by which the claimant has satisfied the reliance element of his claim. Such benefits must be taken into account because the detriment element is established only when that conduct means that, if the promisor were free to act as he wishes, the claimant would then be worse off overall than if he had not acted as he did.  If the countervailing benefits are sufficiently substantial they may prevent the claimant establishing a proprietary estoppel claim.  See: The Law of Proprietary Estoppel, McFarlane, paras 4.113 – 4.115 and 4.121.

42.Unconscionability is a very important part of the doctrine such that, if the other elements appear to be present but the result does not shock the conscience of the court, the analysis needs to be looked at again.  See: Cobbe v Yeoman’s Row Management Ltd & anor, [2008] 1 WLR 1752 at para 92. The court, as a court of conscience, goes no further than is necessary to prevent unconscionable conduct.  See: Sledmore v Dalby (1996) 72 P&CR 196 at p 208.

43.For the plaintiff, Mr Wong SC submitted that, since the 1^st defendant in effect is alleging a gift or the promise of a gift to her by a person now deceased, the Court of Final Appeal has emphasized that the court has to approach such claims with suspicion and he refers to Yung Shu Wu v Vivienne Sung Wu (2011) 14 HKCFAR 39, para 73 (cited in Kwan So Ling v Woo Kee Yiu Harry, unrep, HCA 1311/2011, 30 April 2015 at para 34):

“… Vivienne is making a claim against the estate of a deceased person who cannot give evidence against her claim. The court has always approached such claims with some suspicion, especially (in the case of an alleged gift) where the only or principal witness in support of the claim is the donee. Corroboration is not essential in every case. But as Plowman J said in Thomas v Times Book Co Ltd [1966] 1 WLR 911, 916 (the curious case about ownership of the manuscript of Dylan Thomas’ Under Milk Wood):

‘ … Therefore, not only in this case is the onus of proof on the defendants [who were resisting a claim by the poet’s administratrix] but I am enjoined by authority to approach their story with suspicion having regard to the fact that the other actor in the story, the late Dylan Thomas, is dead and cannot therefore give his own version of what took place. … ’”

The issue

44.The issue, as put by Mr Leung in his opening submission, is whether Mdm Lui, in September 1980 and in the presence of the deceased, represented to the 1^st defendant that it was the deceased’s intention to transfer the Flat to Richard Szeto and the 1^st defendant provided that they should be filially obedient to them and dutiful to the family.

45.Mr Leung’s submission was that the 1^st defendant’s evidence cannot be said to be inherently implausible, given that the deceased was a very successful businessman with a large portfolio of investment properties, amounting to over 100 properties at the portfolio’s peak.  Mr Leung said that the evidence revealed that the deceased and Mdm Lui were generous parents, willing or even eager to make provision for their children, their children’s spouses and their grandchildren.  The deceased was a traditional man, who looked after his family and Mdm Lui followed in that tradition.

46.Mr Leung also submitted that it made sense that the deceased and Mdm Lui would want Richard Szeto and the 1^st defendant to be filially obedient and dutiful to the family.  It would make sense that the deceased would want to provide shelter for Richard Szeto (who was not academically strong and did not attend university) and his family so that they would have a stable environment in which to bring up his children.

47.Likewise, the plaintiff, who did not attend university, received the Prince Edward Property as a gift.

48.Mr Leung argued that the 1^st defendant’s evidence is corroborated by her father, who gave evidence that the deceased assured him that, if the 1^st defendant was obedient and filial, he could not guarantee other matters, but three meals and a place of residence should not be a problem.  On another occasion during a lunch at the Jockey Club, the deceased told the father that he had bought a flat in Mei Foo, originally as an investment, which would be reserved as Richard Szeto’s and the 1^st defendant’s residence.

49.Mr Leung also relied on the fact that the Flat had been the 1^st defendant’s home for 33 years despite the deceased’s death in 1998, the divorce in 2001 and the death of Mdm Lui in 2010.

50.The only witness to the September 1980 meeting is the 1^st defendant. Mr Wong SC submitted that I should approach the 1^st defendant’s claim with caution and that the more reliable way to assess the credibility of the 1^st defendant’s evidence is to test it against (a) the undisputed background of the case; (b) admissions made by the 1^st defendant and her witnesses, and (c) the 1^st defendant’s conduct and then ask whether her assertions are inherently plausible or implausible in the circumstances.  Mr Wong submitted that the 1^st defendant’s evidence should be scrutinized and assessed against the following:

(1) the deceased’s character;

(2) the relationship between Richard Szeto and the 1^st defendant and the deceased and Mdm Lui;

(3) the 1^st defendant’s lack of knowledge of or control over the use of the Flat to raise loans by way of mortgages;

(4) the absence of any transfer or any request for transfer of the Flat throughout the years and the 1^st defendant’s explanation for this, which explanation Mr Wong SC says is contrived; and

(5) the 1^st defendant’s failure to raise her allegations about the deceased’s promise before the commencement of this action in May 2012. 

The deceased’s character

51.As set out in paras 45 and 46 above, Mr Leung’s submission was that the deceased’s character was such that he was a generous man who would make a gift of the Flat to Richard Szeto and the 1^st defendant.

52.Mr Wong SC submitted that, given the deceased’s personality, that of a self‑made businessman with high expectations of his children, it would be highly unlikely for the deceased to be fond of Richard Szeto, a man who had demonstrated a lack of passion and determination to establish a career, and all the more unlikely for him to spoil Richard Szeto with a promise of a share of his wealth.

53.There is no dispute that the deceased was a successful self‑made businessman with high expectations of his children.  There is no dispute that Richard Szeto’s six siblings have established their own successful careers as either professionals or in business.  As the 1^st defendant described it: “After graduating from universities, all of [Richard Szeto’s] brothers had good career development in different industries.”

54.As for Richard Szeto, the 1^st defendant said that his career was not as smooth as his siblings.  She described him as “only a cook earning a meagre income”.  She said that, after a few years of marriage, Richard Szeto quit his job as a cook and worked for the deceased but only for a short period.  The 1^st defendant said that Richard Szeto used to complain to her about the hard work and lack of any prospect of continuing to work for the deceased’s companies, although in cross‑examination she said that was because of a slight disagreement with an uncle who was at the company and that he felt he was being bullied by his uncle.  She said that Richard Szeto had worked in a toy manufacturing business owned by an uncle but, again, only for a short period of time.  There is also evidence that Richard Szeto had a restaurant but, according to the plaintiff, this operated for only three years.

55.I am not able to agree with Mr Wong SC.  The relationship between a father and his son may change and it may go from good to bad and bad to good.  I do not consider the mere fact of the deceased’s success and the fact of Richard Szeto’s relative lack of success supports Mr Wong’s submission.

56.Equally, I do not consider that the evidence supports the 1^st defendant’s case that the deceased’s character was such that he would make a gift of the Flat to Richard Szeto and the 1^st defendant.  Having said that, the deceased permitted Richard Szeto and his family to live in the Flat, which is consistent with the character of a generous, caring father.  I do not infer from the fact that the deceased had many properties and was generous that he would make a gift of the Flat to Richard Szeto and the 1^st defendant. Although Mdm Lui gave the Prince Edward Property to the plaintiff, this is irrelevant because it was not an act of the deceased.  There was no evidence that the deceased gave any property to his sons.  Generosity is consistent with the deceased wishing to provide shelter to Richard Szeto and his family by permitting them to live in the Flat but in an arrangement of bare licence.

The relationship between Richard Szeto and the 1^st defendant and the deceased and Mdm Lui

57.With regard to the relationship between Richard Szeto and the 1^st defendant, and the deceased and Mdm Lui, both parties submit that the nature of the relationship supports their case.  The parties’ respective positions are complete opposites.  The plaintiff says that the relationship was bad, rather than good.  Mr Leung, in his oral closing, described the relationship as “diamond”.

58.For the reasons set out below, I conclude that the relationship was neither as bad as Mr Wong SC submitted nor as good as Mr Leung submitted.

59.Mr Leung referred me to the 1^st defendant’s evidence about the kindness of the deceased and Mdm Lui and, in particular, he referred me to the first daughter’s evidence of the generosity of her grandparents, including the deceased’s concern to refurbish the Flat.

60.In Mr Leung’s submission, the evidence showed that Mdm Liu had plenty of love and affection for the 1^st defendant’s children.  The relationship between the deceased and the 1^st defendant’s father was good.  Mr Leung noted that even the plaintiff admitted that the 1^st defendant maintained a satisfactory relationship with Mdm Lui after the deceased’s death and after her divorce.

61.The 1^st defendant said that she believed that, of all the daughters‑in‑law, she had the best relationship with the deceased and Mdm Lui.  She said that, of the deceased’s sons and their families, Richard Szeto and she were the only ones to dine with the deceased every week.  They would bring their three children to visit the deceased and Mdm Lui every weekend.  The 1^st defendant said that she worked for the deceased for a period of time, during which he frequently praised her in the presence of Mdm Lui and other family members and friends.

62.As for filial obedience and duty, Mr Leung referred me to the 1^st defendant’s evidence that, when the deceased asked her to leave her job to take care of the family, she did as she was asked.  When she was asked to permit her first daughter to live with the deceased and Mdm Lui after Mdm Lui had a stroke, she obliged.  When the deceased needed someone to help him in one of his businesses, the 1^st defendant offered her help.

63.Mr Leung highlighted that the first daughter said in oral evidence that during a conversation she had with Mdm Lui in 2008 or 2009 she asked Mdm Lui if it was true that the Flat would be transferred to her and Mdm Lui responded: “Fine.  Will transfer.”

64.The 1^st defendant did not rely on this conversation between the first daughter and Mdm Lui as a representation supporting her case for proprietary estoppel.  Insofar as the 1^st defendant relies on this conversation as an indication of the strength of the relationship, I find it does not assist the 1^st defendant because Mdm Lui is alleged to have said that she will transfer the Flat to the first daughter, not the 1^st defendant, and the fact is that Mdm Lui never transferred the Flat to the first daughter.

65.Mr Wong SC submitted that the evidence shows that Richard Szeto and the 1^st defendant in fact had a poor relationship with the deceased and Mdm Lui, such that it would be highly unlikely that the deceased would promise to give the Flat to Richard Szeto and the 1^st defendant.

66.In her witness statement, the plaintiff said that the deceased and Mdm Lui disapproved of the marriage but saw no alternative, given that the 1^st defendant was pregnant.  She said that, on many occasions, the deceased expressed his disapproval of Richard Szeto’s actions.  The plaintiff said that Mdm Lui disapproved of the 1^st defendant’s lifestyle and considered her to be a “loose and lazy person with no regard to her household duties”.  Mdm Lui was troubled by the fact that the 1^st defendant had developed unhealthy habits, which the plaintiff explained at trial involved gambling.  The plaintiff’s evidence concerning the 1^st defendant’s lifestyle and habits, with which the 1^st defendant disagreed, was not corroborated by any other evidence.

67.The 1^st defendant admitted under cross‑examination that the deceased was a traditional Chinese in terms of his character.  She was pregnant when she married and Mr Wong SC submitted that the deceased probably saw this as an embarrassment, if not a disgrace, to the family which is supported by the 1^st defendant’s father’s evidence that there were only four tables of guests at the wedding.  The 1^st defendant, when cross‑examined, admitted that the deceased and Mdm Lui were not happy about the pregnancy.

68.The 1^st defendant claimed that Mdm Lui had indicated to her that she did not want to live under the same roof with her daughters‑in‑law, in order to avoid conflict. However, there is evidence from the plaintiff that four of Mdm Lui’s sons and their wives lived with the deceased and Mdm Lui at the Prince Edward Property.  The residencies of three of the sons, together with their wives, were concurrent and for as long as seven years.  Mr Wong’s point is that, the fact that the deceased and Mdm Lui were happy to live with their other daughters‑in‑law for a long period of time, and at the same time, but asked Richard Szeto and the 1^st defendant to live in the Flat, shows that the relationship was not good.

69.Mr Wong SC submitted further that when the 1^st defendant was asked in cross‑examination about whether the sons and their wives lived with the deceased and Mdm Lui she said she did not know at all, such that, if there was any truth in the assertion that Richard Szeto and she visited every weekend, she would know whether the sons and their wives lived with the deceased and Mdm Lui.

70.I do not understand the 1^st defendant’s evidence as revealing that she did not know at all whether the sons and their wives lived with the deceased and Mdm Lui.  At the end of the first day of trial, during cross‑examination of the 1^st defendant there was the following exchange:

“Q. I am instructed that Michael, the third son, and his wife also lived for some time after their marriage at the Prince Edward residence. Do you agree?

A. Well let me think. I am pondering about the timing. Are you talking about the time that I had already moved out to and lived in Mei Foo, no longer residing at Prince Edward Road West?

Q. Timing is unimportant because my point is that Mdm Lui had no problem with living with her daughters‑in‑law. Michael and his wife lived at the Prince Edward Road residence. Do you agree?

A. I agree. But I have something to supplement on my answer. Just now you mentioned for a period of time, are you saying that Michael and Ann after their marriage only resided at Prince Edward Road West for several months only? Are you saying that?

Q. I did not say the length, I said for some time.

A. Yes, for a period of time. I agree.

Q. You agree that Michael and his wife did live at Prince Edward residence for some time after their marriage. You agree?

A. Yes, but I want to supplement. They did not reside there for all their lives, presumably they took time to seek out their own matrimonial home. That would take time.

Q. Now am I also right to say that Henry, the fourth son, also lived at the Prince Edward Road residence with his wife after their marriage for some time.

A. I agree.  Also supplement.  The same applies as to Michael and his wife.  Henry and his wife lived there for just a while and after they had sorted out their own matrimonial home, they moved out.”

71.The cross‑examination continued the next day:

“Q. Yesterday we talked about the Prince Edward residence. I suggest to you that Michael and his wife lived at that residence for some time.

A. Yes.

Q. I suggest to you that Michael and his wife lived there between 84 to 91. Do you agree?

A. I don’t know about this. I do not know that they lived there for so long because by that time I have already moved out and lived in Mei Foo.

Q. So, your answer is you do not disagree. You don’t know.

A. That’s right.

Q. Now, as far as Henry, the fourth son, and his wife, they also lived at the Prince Edward Road residence between 1983 and 1991.

A. Again I don’t really know for the same explanation as my last answer about Michael.

Q. Now, Steven, the sixth son, and his wife also lived at the Prince Edward Road residence between 88 and 90. Do you agree?

A. I don’t really know.

Q. And for the seventh son, Raymond, he also lived at the residence with his wife between 1990 and 1997.

A. Again, I don’t really know.

Q. Again, you do not disagree but your answer is, you do not really know.

A. Right.

Q. It is your evidence in your witness statement that every weekend you would bring your kids to visit their grandparents at the Prince Edward Road residence.

A. Right.

Q. You would surely know whether Michael, Henry, Steven, Raymond and their wives lived at the residence.

A. Some people resided at Prince Edward residence but I have to supplement my answer. At that time, the seventh uncle, that is Raymond, and his wife Tammy they lived at Prince Edward Road residence. Every time we went to the Prince Edward residence, we would meet with Henry and his family but they returned from outside. So, if you ask me if their family also resided there for this I really don’t know. As for Michael and his family, I know that, for a period of time, they either rented or bought a premises but they seem to be living at Hill. Henry, they lived at Dragon Boat Island or somewhere else. …

Q. … In your evidence you said you visited the Prince Edward residence every weekend with your three kids.

A. Correct.

Q. If that is the case you would surely know whether Michael, Steven, Henry, Raymond and their wives lived at the residence but, when I put to you these questions, it seems that you do know anything about it. Why?

A. Now the situation is like this, when our family went back to the Prince Edward Road residence, normally we did not see all the people gathered together, sometimes we would meet up with Henry and his family, as for the others we did not see. As for the clothings, they were not very household clothings.

Q. Miss Chan would you talk with them, your brothers‑in‑law, sisters‑in‑law about where they lived? Yes?

A. Yes, otherwise how would I be able to tell where they resided. Sometimes they would volunteer to tell me.

Q. If that is true you would be able to answer my question but you said you don’t know.

A. Because the way you put your questions, I find it quite surprise, quite strange.”

72.My understanding of the 1^st defendant’s evidence is that she knew the sons and their wives lived at the Prince Edward Property but she did not know for how long.  That is certainly her response to the first several questions. But when subsequent questions contained two propositions: (a) that a son and his wife lived at the Prince Edward Property; and (b) between certain specified years, her answers became that she did not know, which is not surprising given that she was being asked about timeframes which occurred around 25 years ago.  Indeed, her first long answer is quite accurate; she is there saying that when Raymond and his wife lived at the Prince Edward Property they would meet Henry and his family but they “came from outside”. Raymond and his wife lived at Prince Edward from 1990 to 1997, whereas Henry and his wife lived there from 1983 to 1991, ie for most of the time Raymond and his wife lived at the Prince Edward Property, Henry and his wife did not.

73.Mr Wong SC also submitted that the fact that other daughters‑in‑law lived at the Prince Edward Property indicates that Mdm Lui would not have said that she did not want to live with her daughters‑in‑law, contrary to the 1^st defendant’s evidence.  I do not reach such a conclusion for two reasons.  First, the 1^st defendant says that the conversation took place shortly after the wedding, which took place in September 1980, whereas Henry and his wife moved into the Prince Edward Property in 1983; Mdm Lui may have changed her mind.  Second, the fact that Mdm Lui subsequently lived with daughters‑in‑law does not mean that she did not say what the 1^st defendant reports; Mdm Lui may have had her own reasons for claiming in 1980 that she did not want to live with her daughters‑in‑law.

74.Mr Wong’s final submission about the relationship is that the fact that the 1^st defendant had a poor relationship is borne out by her evidence that the deceased and Mdm Lui communicated with her through the plaintiff.  Mr Wong SC referred to two instances.  First, the request by the deceased and Mdm Lui for the 1^st defendant’s daughter to move in with them.  Second, the request made by the deceased for the transfer of the Flat to Richard Szeto and the 1^st defendant set out in para 24(4) above.  In cross‑examination the 1^st defendant agreed that on numerous matters the communication was with the plaintiff and she said that it was because the deceased was very busy.  I do not infer from the fact that numerous communications were with the plaintiff that the relationship was bad.

75.My assessment of both the plaintiff’s oral evidence and the 1^st defendant’s oral evidence on this topic was that they were both exaggerating to support their respective cases.

76.Having considered the evidence and each counsel’s submissions and analysis of the evidence carefully, I conclude that the relationship was neither as bad as Mr Wong SC submitted nor as good as Mr Leung submitted.  On the one hand, the deceased allowed the 1^st defendant to live in the Flat rent‑free until he died.  He employed Richard Szeto in two of his companies.  He employed the 1^st defendant.  These matters indicate that the relationship was not as bad as Mr Wong SC submitted.  On the other hand, I do not think that the 1^st defendant was the most favoured daughter‑in‑law as she claimed; the deceased and Mdm Lui allowed other daughters‑in‑law to live with them for years.  It seems to me that Richard Szeto and the 1^st defendant and the deceased and Mdm Lui were on good terms.  I do not consider the evidence supports either case.

The 1^st defendant’s lack of knowledge and control of mortgages

77.There is no dispute that four mortgages were created over the Flat on 25 October 1989, 14 December 1991, 22 March 1993 and 16 December 1996 respectively.  The relevant instruments show that the borrowers were either Windspeed Enterprises Limited, one of the deceased’s companies (for the first mortgage), or the deceased (for the other three mortgages).

78.The 1^st defendant said the following about the mortgages in her witness statement:

“31. In late 1980s or early 1990s, [Richard Szeto] planned to open a restaurant in Xixiang, Shenzhen and thus needed capital for investment. After discussing with me and [the deceased], [the deceased] as the registered owner of Mei Foo property executed a mortgage for a loan for [Richard Szeto]. Although [the deceased] had sufficient savings to lend money to [Richard Szeto], he decided to mortgage the property for a loan instead. That was because he treated the property as ours and the loan was to raise capital for [Richard Szeto] and therefore it would be reasonable for the mortgage loan be taken out against the property. [Richard Szeto] did not explain to me how the repayment would be made but I believed he and [the deceased] had a consensus on the repayment arrangement.

…

33. In early to mid 1990s, [Richard Szeto] had another plan to open a superstore or supermarket. I had heard him mention the name of Chiu Kwan Superstore, but I did not know the details. The loan secured by the mortgage of the property had been paid up by then. Hence, [Richard Szeto] asked [the deceased] to mortgage the property for a loan again to help him raise fund [sic]. I also believe that he had a consensus with [the deceased] on the repayment arrangement.

34.  On the two occasions of applying for mortgage, [the deceased] and [Richard Szeto] had consulted me.  [Richard Szeto] did the mortgage process after I had expressed no objection.”

79.According to the 1^st defendant, a mortgage was required in order to obtain capital for a planned restaurant.  During cross‑examination, the 1^st defendant accepted that the restaurant project commenced in 1988.  The closest mortgage in time to 1988 is the first mortgage, the Windspeed mortgage (25 October 1989).  Windspeed is a company which manufactured boards and fins for windsurfing.  When she was shown the Windspeed mortgage, the 1^st defendant said that it was obtained in order to buy land in Dongguan for Windspeed and that it was not related to Richard Szeto.  If that was correct, none of the other mortgages would have been for the planned restaurant because they were taken out later, in 1991, 1993 and 1996 respectively.  Later, in cross‑examination, the 1^st defendant changed her evidence, saying that she was mistaken and that the deceased bought the land in Dongguan using his own money and that he required Windspeed to repay by instalments.  When challenged that she had changed her evidence, the 1^st defendant agreed that she knew nothing about the Windspeed mortgage.

80.The plaintiff’s evidence was that an uncle financed the restaurant.  When this was put to the 1^st defendant she simply said that she did not know.

81.Further, although the 1^st defendant disagreed with the suggestion that the deceased arranged the mortgages over the Flat without consulting Richard Szeto or her, she accepted that it was the deceased who made the decisions on these matters.

82.The 1^st defendant could not point to a specific mortgage which related to either the restaurant or the superstore and I do not accept her evidence set out in para 76 above.  The mortgagors were the deceased or one of his companies and I consider the deceased’s use of the Flat to raise funds is consistent with the 1^st defendant treating the Flat to be his property.

Absence of transfer or a request to transfer the flat and the telephone call made by the plaintiff in 1990 and the 1^st defendant’s failure to raise allegations prior to commencement of proceedings

83.No step was ever taken to implement the alleged promise to transfer the Flat.  The closest the 1^st defendant’s evidence gets is the alleged telephone conversation she had with the plaintiff in 1990 (the moment the promise “crystallized” as Mr Leung put it), which is set out in para 24(4) above and elaborated on as set out in para 27 above but she declined the transfer offer.

84.Mr Leung submits that 1990 was a most appropriate time for the deceased to decide to transfer the Flat to Richard Szeto and the 1^st defendant. He had had an opportunity to see whether the 1^st defendant was filial and obedient, Richard Szeto had his restaurant in Shenzhen and the deceased would wish to make the transfer whilst he was still healthy.  (There is no evidence that the deceased had considered any of these matters.)

85.However, I find that the reasons given by the 1^st defendant for declining a transfer of the property in 1990 to be incredible.  When asked in cross‑examination why she was concerned that it was “taboo” for the elderly to transfer assets too early, she replied that it was her ex‑husband’s concern, to which she consented.  The 1^st defendant put the primary responsibility for the concern onto Richard Szeto, who was not a witness, but, even so, for it to be “taboo” for the elderly to transfer assets too early does not make sense, given it was the deceased who suggested the transfer.  This concern must be seen also in the context of the 1^st defendant’s evidence that she agreed the deceased was a successful businessman.  There is no evidence that the 1^st defendant knew how many properties the deceased had but for a successful businessman to offer to transfer a Flat, which he had already promised to the 1^st defendant, can hardly be said to be a transfer of assets too early.

86.With regard to waiting until the first daughter had turned 18 and then transferring the Flat, during cross‑examination the 1^st defendant said that Richard Szeto’s and her intention was to transfer the Flat into their names and add the first daughter.  When it was put to her that the Flat could be transferred to them and then the first daughter added later and, so, there was no need to wait until the first daughter had turned 18, she was evasive; at first saying that the question put to her was too complicated and then, after the question was repeated she elaborated, saying (for the first time) that, since the first daughter had suffered so much whilst living in the Prince Edward Property, she wanted the Flat to vest in the first daughter’s name. This elaboration was no answer to the question.  Moreover, the first daughter did not say that she suffered when she was living at the Prince Edward Property but she did say that the deceased and Mdm Lui were very fond of her.

87.Apart from evading the question, the 1^st defendant appeared to break down and cry after she had spoken of the first daughter’s suffering.  I observed the 1^st defendant very closely at this point and her demeanour was such that this was not a genuine emotion. Nevertheless, I ordered a short break in order to allow things to settle down.

88.Yet further, in her written witness statement the 1^st defendant says that the telephone conversation took place in early 1990 and that “later” the plaintiff mentioned that the deceased and Mdm Lui would like the first daughter to move into the Prince Edward Property.  This sequence directly contradicts her evidence that she wanted the Flat to vest in the first daughter’s name because her first daughter had suffered whilst living at the Prince Edward Property because it presupposes that the first daughter had moved to the Prince Edward Property before the telephone conversation took place.  When the contradiction was put to her in cross‑examination she was evasive, suggesting that sequence was not important and even suggesting that there was no inconsistency.

89.Her other reason, that because of “covert struggles” it would be better not to transfer the property whilst the deceased was still alive in order not to deepen the conflict between the siblings, is incredible because a transfer would only be more difficult after the deceased had died, particularly if there was conflict between the siblings.

90.Even after the first daughter had turned 18 (by which time the deceased had died), still the 1^st defendant did not arrange or request for a transfer of the Flat, which she could have done by approaching Mdm Lui. Her explanations for not doing so were that the family was busy arranging the deceased’s funeral and, so, she forgot about the matter and her son was having problems at primary school after the divorce (in 2000 through 2001) and, so, she devoted all her time to her son and ignored all other matters. 

91.I do not accept the explanations for not arranging or requesting a transfer of the Flat.  The deceased died in 1998.  The first daughter turned 18 in 1999.  At the time of trial, the 1^st defendant’s son was 30 years old (according to Mr Leung’s Closing Submissions) such that he must have left primary school around the time the deceased died or within a couple of years of death.  The plaintiff’s first demand for vacant possession was not made until September 2010 but she did not dispute the claim until after the plaintiff had commenced proceedings in May 2012, notwithstanding that the Flat is important to her and her family and she claimed she wanted the Flat in the first daughter’s name.  Incredibly, the evidence of both the 1^st defendant and the first daughter is that the 1^st defendant did not mention these demands to the first daughter until after the commencement of proceedings.  As to not responding to the plaintiff’s demands until proceedings were commenced, the 1^st defendant said only that she did not know how to respond.

92.Having decided that she wanted a transfer to occur upon her first daughter turning 18, the 1^st defendant did nothing about a transfer and did not make any claim to the Flat for over 13 years, by which time the first daughter’s 18^th birthday, the deceased’s funeral and the son’s primary school years had long since passed.  The 1^st defendant has not provided any plausible explanation why she did nothing for so long. 

93.During cross‑examination and for the first time the 1^st defendant said that the plaintiff had telephoned her second daughter (the 2^nd defendant) and told her that the deceased intended to transfer the Flat to Richard Szeto and her and that the second daughter should behave herself and enthusiastically pursue her studies.  She said that this telephone conversation took place not long after her conversation with the plaintiff.  She also said that she first knew about this telephone conversation many years ago.  She said that she forgot to include this in her witness statement.  The 2^nd defendant did not give evidence.  This should be an important piece of evidence and, yet, it comes to light only in cross‑examination and is attributed to a person who had not filed a witness statement.  I consider this evidence to be a recent invention and I disregard it.

94.The plaintiff denied that the telephone conversation ever took place.  Mr Leung submitted that I should not believe this, submitting that the plaintiff had an “axe to grind”.  Both the plaintiff and the first daughter gave evidence of an argument between them, which resulted in a falling out between them.  In her witness statement, the first daughter said that the argument took place “last year”, which places the argument in 2013.  The plaintiff said that the first daughter pounced on her and scratched her arm, pushing and screaming uncontrollably.  The plaintiff says she slapped the first daughter on the shoulder in response.  The first daughter says that the plaintiff slapped her in the face and told her that if she walked out, she (the plaintiff) would evict the 1^st defendant, which is what the plaintiff now wants to do.  Mr Leung says there is no purpose to be achieved by evicting the 1^st defendant; the estate has not been distributed, there is no evidence as to what the family wants to do with the Flat after eviction, there is no evidence of urgency or need.  Clearly, Mr Leung submits, the plaintiff wants revenge and to settle an “old score”.

95.I accept there has been a falling out between the plaintiff and the first daughter but I do not need to determine whose version of the argument is correct because the plaintiff’s first letter of demand was in 2010, ie before the argument in 2013.

96.Mr Leung submitted that the 1^st defendant is not a sophisticated person and the span of time involved is very likely to lead to recollection failures. The 1^st defendant may not be a sophisticated person but her demeanour in court indicated to me that she understood matters concerning ownership and transfer of the Flat and the import of these proceedings. Indeed, the deceased was confident enough in his abilities to employ the 1^st defendant in his office doing clerical work; the 1^st defendant said that the deceased was very grateful for her help and praised her.  As for the passage of time, such does not explain the lack of plausibility of the 1^st defendant’s evidence; her evidence was flawed and unbelievable for the reasons given above.

97.Mr Leung submitted that if the 1^st defendant was minded to fabricate a story about the offer of a transfer she would have said that it was the deceased who called her, that way there would be no direct challenge to her evidence.  If the 1^st defendant’s evidence is flawed and unbelievable of itself, it is not rescued by arguing that she could have made a better lie because the evidence has failed in itself and not because it could be challenged directly.  Even if she had said that it was the deceased who made the transfer offer, her reasons for declining the offer would have remained incredible.

98.For the reasons given above, I find that the alleged telephone conversation did not occur.

Conclusion on the issue

99.Authority tells us that the nature of the 1^st defendant’s claim is one which should be treated with suspicion.  The 1^st defendant’s failure to do anything regarding a transfer of the Flat until proceedings had commenced raises suspicion.  Clearly, the 1^st defendant’s case is that the Flat has been important to her and her family and, indeed, if there was any truth in her claim that she wanted the Flat in her first daughter’s name because of her first daughter’s suffering during her stay at the Prince Edward Property, one would expect that she would have found some time during the 13 years after the first daughter had turned 18 to attend to or request a transfer; that she did not do so indicates to me that there is no truth in her evidence.

100.Although it is very likely that the deceased made a representation which led to Richard Szeto and the 1^st defendant to live in the Flat, I find that neither the deceased nor anyone on his behalf made the representation alleged and set out in para 24(2) above that the deceased’s plan was to transfer the Flat to Richard Szeto and the 1^st defendant in the future provided that they showed filial obedience to the deceased and Mdm Lui and took good care of the family.

101.Moreover, even if the deceased made the representation in the terms alleged, he could not have foreseen the divorce and, judging from the context in which it was allegedly made, ie at the time of marriage, the representation would not have been made based on the assumption that Richard Szeto and the 1^st defendant might divorce but nevertheless the Flat would still be transferred to the 1^st defendant. It cannot be said that there was a clear representation that the Flat would pass to the 1^st defendant, even in the circumstances of a divorce.  The 1^st defendant, in her witness statement, said that in mid‑1990, at a time when the marriage was having problems, the deceased comforted her saying that she was a very responsible and dutiful daughter‑in‑law and he would support her and the children under any circumstances but there was no mention of a transfer of the Flat.

Other submissions

102.For completeness I shall deal with Mr Leung’s other submissions.

103.I do not agree that the fact that the 1^st defendant continued to live in the Flat after the death of the deceased in 1998, after her divorce in 2001 and after the death of Mdm Lui in 2010 is inconsistent with the plaintiff’s case that the 1^st defendant is a bare licensee because, Mr Leung submitted, the death of the licensor automatically terminates the revocable licence.  The inference I draw is that Mdm Lui simply did not exercise any right she had at that time, I do not infer that she considered that the Flat belonged to the 1^st defendant.  With regard to death of Mdm Lui in April 2010, the plaintiff waited only about four months before issuing her demand for vacant possession and thereby claiming the estate’s right.

104.Turning to the question as to whether the 1^st defendant’s father’s evidence corroborates that of the 1^st defendant.  The father’s evidence was that the deceased told him, prior to the marriage, during the meeting referred to in para 24(1) above, that, so long as the 1^st defendant was obedient and filial, three meals a day and a place of residence should not be a problem.  The father also said that, shortly after the first meeting, over lunch at the Jockey Club, the deceased told him that he had bought the Flat and it would be reserved for Richard Szeto and the 1^st defendant as their residence.  (This second meeting is not part of the 1^st defendant’s pleaded case, was not part of the issues listed in her counsel’s opening submissions and was not mentioned in her witness statement.)

105.However, neither conversation related by the father amounts to a representation that title to the Flat would be transferred or passed to the 1^st defendant, although each is consistent with a desire on the part of the deceased to provide shelter for Richard Szeto and his family but as a licensee.

106.Mr Leung submitted that the 1^st defendant’s payment of management fees and rates is consistent with a common intention that she would acquire title to the Flat.  In her witness statement, the 1^st defendant said that, in about 1992, one of her brothers‑in‑law said that, since Richard Szeto and she were living in the Flat, they should not rely on the deceased to pay the expenses and, so, she agreed to pay the management fees.  I consider the brother‑in‑law’s statement is not a statement acknowledging ownership, only occupation. 

107.In any event, in cross‑examination, the 1^st defendant’s evidence was different.  The 1^st defendant said that she often proposed to the deceased that, since the Flat was Richard Szeto’s and hers, they should pay the management fees and rates, to which the deceased agreed.

108.Mr Leung points to inconsistencies in the plaintiff’s case regarding the circumstances in which the 1^st defendant came to take over payment of the management fees and rates but, after assessing the whole of the evidence of both given at trial, I prefer the plaintiff’s evidence over that of the 1^st defendant.

109.Mr Leung submitted that the 1^st defendant accepted the nominal sums for maintenance upon her divorce because of the representations made by the deceased and Mdm Lui that she was to have title to the Flat.  Added to that, Mr Leung submitted, was Richard Szeto’s assurance that he would not fight for his share of the Flat.

110.During the divorce a lawyer represented the 1^st defendant and yet no formal arrangements were made to transfer the Flat to Richard Szeto and the 1^st defendant or to transfer Richard Szeto’s alleged interest in the Flat to the 1^st defendant.  In cross‑examination the 1^st defendant’s explanation for this omission was that she had not told her lawyer about the Flat and it did not occur to her to ask Mdm Lui to transfer the Flat.  She said she did not know her rights. 

111.Again, the Flat was important to the 1^st defendant and her family.  By the time of the divorce, the first daughter had already turned 18.  One would expect that the divorce was an appropriate opportunity for the 1^st defendant to formalize the alleged promise.  That she did not do so leads me to find that she was not promised the Flat by the deceased or anyone on his behalf and Richard Szeto did not promise her his alleged share.

112.As I have found that there was no representation or promise of a transfer of title of the Flat to the 1^st defendant, that finding disposes of her counterclaim but I shall say something briefly about reliance and detriment.

Detrimental Reliance

113.The 1^st defendant’s case is that, on the understanding or belief that the Flat would be transferred to her in due course, she agreed 1) to terms of ancillary relief in her divorce, which were for nominal sums only; and 2) to pay management fees and rates.

114.With regard to the ancillary relief, in her witness statement the 1^st defendant said that she accepted nominal sums “based on the consensus that [Richard Szeto’s] ownership in the [Flat] would be transferred to me”.  The detriment pleaded in her Defence (paras 33 to 35) is that the 1^st defendant could have sought provision for accommodation for herself and her children but, by accepting the nominal sums without seeking such provision, she altered her position and suffered detriment in reliance upon the representations made by the deceased and Mdm Lui and the plaintiff.

115.When asked in cross‑examination whether she made an affirmation of assets for the divorce she said that she did not know what had to be carried out and she did not know her rights.  When asked whether she said anything to Richard Szeto when he proposed to pay the $9,000 in instalments, she said that she did not know that she could ask for more and asked herself why it was so little.  If the 1^st defendant did not know what her rights were and did not know that she could ask for more, to the extent of asking herself why the sum was so little, then it must not have been her belief that she was foregoing accommodation on the basis that the Flat would be transferred to her.  Hence, there is no causal link between the alleged representations and her agreement to the terms of ancillary relief.

116.Moreover, the alleged detriment is speculative because there is no evidence that she could have negotiated a better settlement with Richard Szeto in lieu of foregoing the Flat.  Mr Leung submits that Richard Szeto would have been entitled to a distribution from the deceased’s estate under the Intestates’ Estates Ordinance and so he was not poverty stricken.  However, at the time of the divorce no distribution had been made and, so, this was only a contingency which could not reflect Richard Szeto’s available assets at the time.

117.With regard to payment of the management fees and rates, Mr Wong SC submitted that on the 1^st defendant’s own evidence there was no causal link between the alleged representation and payment because she agreed that it was only fair that a person who occupies a property rent‑free pays management fees and rates. This was not the extent of her evidence on the point.  Later, she said that she proposed to the deceased that, since the Flat was Richard Szeto’s and hers and they were living in it, the deceased should let them pay the management fees and rates.

118.Mr Wong SC also submitted that such payments did not amount to detriment sufficient to establish a case of proprietary estoppel in light of the substantial benefits the 1^st defendant and her family enjoyed, namely, 1) rent‑free accommodation for over 30 years; 2) subsidies by the deceased or the plaintiff of management fees for about 10 years and rates for about 20 years; and 3) free renovation.  However, looked at the context of the unconscionable action, what would have been unconscionable (had the representation been made as alleged), would be to evict the 1^st defendant from her family home of over 30 years and deny her the capital asset.

Disposition

119.For the reasons given above, the 1^st defendant has failed to establish proprietary estoppel and I dismiss her counterclaim.

120.In the Land Search, the plaintiff is registered as the administratrix of the Flat.  I hold that the 1^st defendant occupies the Flat as a licensee.  The plaintiff has given notice of termination of the licence and, in the circumstances, she is entitled to an order for delivery of vacant possession of the Flat.

121.As for damages to be assessed, no evidence was adduced regarding the nature or level of damages and so I am not able to assess any damages.  The plaintiff did not obtain an order for a split trial of liability and quantum.  Hence, the plaintiff should have presented her case on damages during the trial before me.  In the absence of an order for a split trial, this is not a matter to be dealt with at a later time.

122.As to costs, the plaintiff has been successful and I make an order nisi that the 1^st defendant is to pay the plaintiff’s costs, to be taxed if not agreed.

123.Finally, I thank counsel for their assistance.

Mr Anson Wong SC and Mr Jeffrey Y T Li, instructed by Christine M Koo & Ip, for the plaintiff

Mr Paul H M Leung, instructed by C L Chow & Macksion Chan, assigned by Director of Legal Aid, for the 1^st defendant