Ho Kwok Wing v. Chan Mei Mui
Read the full judgment text of HCA 2178/2014 on BabelCite. This High Court CFI judgment was delivered on 25 May 2018.
1. The plaintiff commenced this action in October 2014 claiming in essence that he is one of the co-owners of a residential unit at Rose Street, Yau Yat Tsuen (together with a car parking space) (“ the suit property ”). The defendant denies the claim, and counterclaims that she was the sole beneficial owner thereof instead.
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HCA 2178/2014 [2018] HKCFI 1135 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE HIGH COURT ACTION NO 2178 OF 2014 ____________
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_______________ J U D G M E N T _______________ Introduction 1.The plaintiff commenced this action in October 2014 claiming in essence that he is one of the co-owners of a residential unit at Rose Street, Yau Yat Tsuen (together with a car parking space) (“the suit property”). The defendant denies the claim, and counterclaims that she was the sole beneficial owner thereof instead. 2.The suit property was registered in the names of the parties as joint tenants in 2005. The defendant registered a notice of severance of joint tenancy dated 13 March 2010 with the Lands Registry (“the severance notice”). 3.The defendant is the mother and the plaintiff is one of her 4 sons. Related properties 4.The properties which may feature in the background leading to this action (see the background below) were:
(As stated above the severance notice was registered in March 2010) Background 5.The background summarized below is largely undisputed. 6.After their marriage with the defendant, the plaintiff’s father set up a cloth trading business in 1978 (“the trading business”). The married couple jointly held all the shares of the trading business. 7.The plaintiff’s father passed away in 1997 leaving behind relatively huge debts. Probably as part repayment of the said debts, the 1st family home was transferred by the defendant to one of the creditors. 8.Both the plaintiff and some of his brothers worked at the trading business (the plaintiff started to do so when he was 16 years old and he left and started his own business in January 2010). 9.Although the Elite Villa flat was registered in the plaintiff’s name, it was acquired by the defendant for investment purposes (see also para 25(a) and 25(c) below). 10.The plaintiff was gambling heavily in about 2006 (probably even earlier) and incurred quite some debts as a result. He made use of the suit property to obtain a mortgage loan from the bank in 2009 without the defendant’s prior knowledge. The defendant became quite upset upon learning of this and this led to a deterioration in their relationship. 11.The plaintiff used to live in the suit property (with the defendant and other siblings) but he moved out in 2010. The defendant and two of the plaintiff’s brothers are still living there. The plaintiff’s case 12.The principal relief sought by the plaintiff is that he be declared one of the tenants-in-common of the suit property. Related (or ancillary) relief includes an order for the sale of the suit property and the distribution of the net sale proceeds. 13.The claim set out in the statement of claim can be summarized as follows:
The defendant’s case 14.In gist, the defendant’s claim (that she is the sole beneficial owner and the plaintiff has only been holding his interest on trust for her) is based on:
She counterclaims that she be declared the sole beneficial owner of the suit property (and related relief). The claim based on the severance notice 15.In relation to the severance notice, the defendant complains that the plaintiff is attempting to run an unpleaded case at trial. 16.Para 9, statement of claim reads:
17.The relevant parts of para 4, amended reply state:
18.The defendant says that, the above being the plaintiff’s pleaded case, it is not open for him to put forth at trial a case alleging that the severance notice:
Witnesses’ testimony and findings of fact 19.The following witnesses testified at trial:
Apart from the plaintiff, all the witnesses were called by, and testified for, the defendant. 20.The approach adopted by the courts for assessing credibility has been set out in some of my earlier decisions. See, for example, the decisions in Chiu Chi Tong v Lau Chong Sai & Another, HCA 765/2002 (para 28); Yu Ming Investment Ltd v Peng Ru Chuan, Richard, HCA 814/2002 (para 13); 林傳龍對謝巧玩 HCA 1443/2011 (19 December 2014) (para 15) and Star Glory Investment Ltd v Kai Tuo (HK) Technology Co Ltd and Others, HCA 3523/2002 (13 August 2005) (para 12). See also what appears to be a similar approach in Esquire (Electronics) Ltd v Hong Kong and Shanghai Banking Corporation Ltd [2007] 3 HKLRD 439, para 135. The above will be adopted in this action. 21.In short, I find the defence witnesses to be truthful and reliable, but do not consider the plaintiff’s testimony to be credible or reliable. 22.A summary of the reasons why I so assessed the plaintiff’s testimony is as follows. First, the plaintiff admitted during cross-examination that he commenced this action because he felt there was foul play against his own business (which was commenced after he left the trading business (in 2010)) by someone from his family (he named KC Ho as the culprit). The business scope of both overlaps in many ways. He also testified he would not have commenced this action had that not happened. 23.Secondly, the defendant’s conduct both before and after the acquisition of the suit property was inconsistent with her having an intention, allegedly common with that of the plaintiff, to “share” the suit property with the plaintiff. 24.The defendant’s relevant pre-acquisition conduct included:
The defendant’s relevant post-acquisition conduct was that she looked around for a suitable accommodation for the plaintiff for more than once. 25.Thirdly, there are indications that the plaintiff has either “tailored” his story, or has contradicted his own statements:
26.Fourthly, the plaintiff’s father was known to have ruined himself through addictive gambling. This seems to have plagued the defendant’s mind, and made her felt fearful that the plaintiff might end up badly when she learnt of the plaintiff’s own gambling addiction (which began in early- or mid-2000s). 27.With this in mind, it is unlikely the defendant would “share” the suit property with him when the circumstances of its acquisition shows that it is more probable the defendant intended the suit property to be a “family home”. As has been stated in para 4(b) above, the Fa Po flat, which was registered in the defendant’s name only, was sold in 2005. The suit property was acquired in effect as a replacement. There is no serious attempt by the plaintiff to dispute that the Fa Po flat was intended by the defendant to be the “family home”. 28.Fifthly, there were objective circumstances to explain why the suit property was also registered in the plaintiff’s name:
29.Although it is not directly relevant, I also note that the shares of the trading business registered in the plaintiff’s name were (as he accepts) not paid for by, but were given to, him (these shares are no longer registered in his name). 30.The plaintiff’s criticism of the defendant’s credibility is mainly anchored around the severance notice:
I do not consider the above criticisms to justify an adverse assessment on the defendant’s credibility or reliability. 31.No criticism has been levied by the plaintiff against the testimony of the other defence witnesses. 32.Based on the above assessment of the witnesses’ testimony (and when considered together with the documentary evidence adduced at trial), the following findings of fact are made:
Is the disputed claim unpleaded ? 33.Because of the fact findings above, there is strictly no need to discuss this aspect. I shall do so for completeness. 34.I agree with the defence. The severance notice is on its face not a trust instrument. It is, as has been expressly pleaded by the plaintiff (quoted in para 16 and 17 above), a document the purport of which is to convert a joint tenancy into a tenancy in common. 35.In such circumstance, having decided to run a case based on trust (and perhaps also a breach of trust and/or breach of duties (fiduciary or otherwise)) (para 18(2) above), it is incumbent upon the plaintiff to plead the factual and/or other basis to ground such a case. At least in relation to allegations involving fiduciary duties and breach of trust, it is trite law that a claimant must provide the necessary particulars (such as, of the relationship giving rise to the duties: Hong Kong Civil Procedure 2018, Vol 1, para 18/12/12 and 18/12/45). 36.Similar considerations apply equally to the plaintiff’s case based on an alleged informal declaration of trust (para 18(3) above). 37.If, however, the plaintiff is not alleging anything further than the purport of the severance notice (para 34 above) (but merely to give effect to, and/or seek the specific performance of, the severance notice), the “new” case referred to in para 18 above is otiose and serves no useful purpose. 38.In relation to the allegation that the severance notice constituted a disposition of the defendant’s equitable interest in the plaintiff’s favour (para 18(1) above), the plaintiff has not stated (whether in the pleadings or otherwise) precisely what “interest” has been disposed of (by the defendant) in the plaintiff’s favour. 39.If it is contended by the plaintiff that the conversion of the joint tenancy into a tenancy in common is the “interest” being disposed of, in view of the age disparity between the plaintiff (born in 1976) and the defendant (born in 1943) (the plaintiff is about 33 years younger), it is rather more likely the plaintiff has in effect being deprived of the contingent “right” to become the sole owner of the suit property upon the defendant’s death (after the conversion). Thus, it is difficult to see, in the absence of a specific averment, how such a “disposition” can be said to be in his favour. 40.The decisions which have particularly been relied upon by the plaintiff in this connection with the “new” claims are:
But as the defendant correctly points out, these decisions are factually different and are therefore distinguishable from this action. 41.The Singla decision involved a co-owned real property (originally by joint tenancy (which, as is well known to legal practitioners, has (among other things) unity of interest)). The joint tenancy was severed by a severance notice which, not only converted it to a tenancy in common, but also transferred “… 49% of the beneficial interest from [the claimant] to [the respondent, (a bankrupt who was represented in that litigation by the trustee in bankruptcy)]” (para 23 thereof) (making the co-ownership an unequal tenancy in common (the claimant thereby holding 99% and the respondent holding1%)). 42.No such transfer has been stated in the severance notice, and none has been identified by the plaintiff. 43.The Taylor decision concerned whether a statutory form which contained the words:
should amount to an express declaration of trust of the land being conveyed (para 42 thereof). In short, at the end the court concluded there that they did, and that such a declaration constituted the requisite “signed writing” as stipulated by s 53(1)(b), Law of Property Act 1925 (similar to our s 5(1)(b), Conveyancing and Property Ordinance (Cap 219)) (para 44 to 52 thereof). 44.As the defendant correctly points out in this action, the Taylor decision was one where the court quite justifiably has already made factual findings that the parties therein had jointly held the property; the only dispute being whether there was a properly “signed writing” to ground a legally proper claim. The main issue in this action, on the other hand, is whether there was a co-ownership of the suit property (as has effectively been stated in para 32 (especially para 32(c) and 32(e)) above, the defendant’s case has prevailed in this regard). 45.Even in the Taylor decision, where the defendants appeared in person, the court has from time to time mentioned the need for proper pleadings (see, for example, para 3, 4, 35 and 51 thereof). 46.The Drakeford decision involved a dispute over the ownership of the credit balance in a joint-named bank account where one of the account holders passed away. The “implied trust” which the court found to exist was based on a statement made by the deceased to such effect. Similar to what has been stated in para 44 above, the dispute about this aspect has been resolved in the defendant’s favour. 47.Again, similar to what has been stated in para 37 above, if the “disposition” limb of the plaintiff’s case (para 18(1) above) is no different from his co-ownership case, then his “new” case is but a semantically different repeat of his “old” case (which has been rejected above). If, on the other hand, he is in fact putting forward a different case, the “new” case must be properly formulated by way of pleadings (which he has not). Conclusion 48.The plaintiff’s claim is dismissed. 49.Judgment is to be entered in the defendant’s favour as per the relief sought in the prayers for relief, re-amended counterclaim (para (1) to (5) thereof). Other matters 50.The parties’ written submissions also mentioned various other points. These have not been expressly set out or dealt with above. This is so only because of the need to balance between the length of the judgment and its easier comprehension. It does not mean those other points are thought to be irrelevant (or have been overlooked). To avoid doubt, those other points have also been considered. 51.Because I have decided against the plaintiff on liability, there is no need to consider whether an order for sale of the suit property should be made. Were it necessary to do so, I would have decided the issue in the defendant’s favour (for the reasons she put forth at trial). Costs order 52.The parties agree the usual rule that costs should follow the event should the court find in entirely in the defendant’s favour (which it has). There will accordingly be a costs order that the costs of this action (to avoid doubt, including the costs of the counterclaim) be paid by the plaintiff to the defendant to be taxed if not agreed. 53.The parties are at liberty to address the court on whether they are entitled to engage two counsel for trial within 14 days, if they fail to reach agreement regarding that matter within that period.
Mr Lee Siu Him, instructed by Dominic Y K Lai & Co, for the plaintiff Mr Horace Wong SC leading Mr Roger Phang, instructed by K B Chau & Co, for the defendant |
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