Kwong Yuen Seung Ivy and Others v. Kwong Kam Hung

DCCJ714/2015

[2019] HKDC 9

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 714 OF 2015

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Before: Deputy District Judge K C Chan in Court

Date of Hearing: 3 – 5, 10 & 11 September 2018

Date of Judgment: 7 January 2019

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JUDGMENT

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1.The 3 plaintiffs are siblings and the youngest 3 of 7 natural children of the defendant father (“Father”), who is now 86 years old.

2.The plaintiffs now compete with the Father over the entitlement to the beneficial ownership of the Property (defined below) not to evict the Father, but out of concern that the Father may be persuaded to alienate his interest in the Property in favour of a third party.  It is the plaintiffs’ stance that it has been and still is their wish and promise that their parents (mother unfortunately died in June 2000) may reside in the Property as long as they live.  It is regrettable that this, which seems to me is essentially a domestic disagreement, has now rolled into an elaborate action with an estimated trial length of ten days.

3.Apart from the 3 plaintiffs, the other 4 siblings also give evidence for the plaintiffs.  The Father gives evidence on his own behalf.

The parties’ respective cases in gist

4.It is common ground that the Property was acquired after discussions on various occasions and an actual common intention reached prior to the making of their first application for the purchase of a Home Ownership Scheme (“HOS”) flat in December 1993, which was unsuccessful.  The following year, they made another application which was successful leading to the purchase of the Property.

5.The plaintiffs’ case is that the actual common intention reached was that the Property would be purchased as a residence for their parents for as long as they live but it would belong to the plaintiffs beneficially.

6.The Father’s case is that the actual common intention reached was that the Property would be purchased by the plaintiffs as a gift to him and his wife.

7.Both parties run a fallback case based on resulting trust; and on that they dispute over their respective shares of entitlement.

8.The Father also pleads by way of defence the doctrines of proprietary and promissory estoppel and argues that thereby the plaintiffs are estopped from claiming the beneficial ownership in the Property.

Family circumstances in 1993 by way of background

9.Particularly apposite I think is the observation made by the Court of Appeal in Primecredit v Yeung Chun Pang Barry[1] that in a case like this the court need to pay more regard to circumstantial matters.  With that in mind, I set out in some detail the following matters which, unless indicated otherwise, are either common ground or not seriously disputed.

10.The story of this family is not unlike many in Hong Kong at the time. The parents worked hard to sustain the family.  The Father worked as a lorry driver, while mother the late Madam Yang Kang (“Mother”) worked as a domestic helper.  They raised a family of 7 children.  They are:-

(1)  Chi Wai (“Chi Wai”), male, born in 1954;

(2)  Yuen Ching (“Stella”), female, born in 1956;

(3)  Chi Wing (“Alfred”), male, born in 1958;

(4)  Yuen Yee (“Rita”), female, born in 1960;

(5)  Yuen Seung Ivy (“Ivy”), the 1^st plaintiff, female, born in 1962;

(6)  Chi Shing Jason (“Jason”), the 2^nd plaintiff, male, born in 1965; and

(7)  Chi Tat Bosco (“Bosco”), the 3^rd plaintiff, male, born in 1966.

11.Evidently, all the children were conscious of the difficulties of the family and were diligent and very mindful to contribute. 

12.The oldest daughter Stella quitted day school after completing Form 1 in 1970 and switched to night school so that she could help take care of the younger siblings while both parents went out to work.  That notwithstanding, she went on to complete Form 5 in 1975.

13.From 1974 to 1981, the 5 older children, namely, Chi Wai, Stella, Alfred, Rita and Ivy respectively finished school and began working.  Alfred went on to complete further studies in 1979 and worked as a quantity surveyor. Chi Wai resumed studies in Australia between 1983 to 1985 and later worked as an urban planner.

14.Since the time the children began working, they consistently contributed a substantial part of their earnings to the family.  In mid 1980s, Mother no longer worked and stayed home as a housewife.

15.Jason began studying in New Zealand since early 1985.  He completed a Master’s degree there in early 1993 and also worked there from mid 1993 until June 1994 when he returned to Hong Kong.  He worked in Hong Kong since then until August 1999 when he emigrated to Australia.

16.Bosco studied in university in Australia from 1989 to 1993.  He returned to Hong Kong in December 1993 and began working.  He studied for a Master’s degree in Hong Kong between 1996 to 1998.  He left Hong Kong since mid 2005 to work at various senior posts in the banking sector in Singapore and then various cities in China.

17.It is reasonably clear that the parents (either from earnings of the Father, their savings, or from contributions made by the older 5 children) and the two older sons (Chi Wai and Alfred) financially supported Jason and Bosco studying overseas; while Jason and Bosco also worked part-time to help support themselves.  It is both Jason’s and Bosco’s evidence, and not disputed, that when they worked part-time during studies, they also occasionally mailed small amounts of money home to their parents.  This is of course more a showing that they were responsible and supportive as they at the same time received substantial financial support from the family.

18.The family circumstances at the time when the family began to discuss making an application to purchase a HOS flat sometime in 1993 were:-

(a)  The 4 older children were all married and have moved out of the Public Housing Unit (defined below); that notwithstanding, they continued to consistently make monthly financial contributions to the Father and Mother; with the 2 sons contributed more (about HK$5,000 monthly each).

(b)  The 2 older sons, Chi Wai and Alfred, were working as professionals, namely and respectively quantity surveyor and urban planner.

(c)  Ivy had a steady job and was living with the Father and Mother and contributing (about HK$3,000 monthly), though she was no longer listed as a family member living in the Public Housing Unit so as to avert the effect of the “well-off tenants policy”.

(d)  Jason and Bosco were abroad, in New Zealand and Australia respectively; with Jason just finished his Master’s degree program and Bosco either just finished or was finishing his degree program.

(e)  It would be fair to say that since mid 1980s, Father and Mother had been decently well provided for by their children.

19.The relationship between the parents and the children and among the children themselves were generally good and cordial with the family meeting, by various combinations of its members, regularly for meals and such during festivals and holidays.

The Property, its acquisition, devolution of title to the Father and salient events leading to the commencement of this action

20.Since 1968, the family had lived in a public housing unit at Room 1039, Wah Lok House, Wah Fu Estate, Aberdeen (“the Public Housing Unit”), of which the Father was the sole registered tenant while the other family members were registered occupants.

21.It is common ground that Wah Lok House was one of the earliest completed buildings of Wah Fu Estate and that since the 1980s, various significant repairs and structural reinforcements had to be made to it.

22.By 1993, there were discussions as to whether to apply for a HOS flat and an application was actually made in December 1993.  The parties however dispute the circumstances, the contents of the discussions and the actual common intentions reached thereby, which are the core factual disputes of the parties.

23.As said, that first application was unsuccessful.  Around the time the first application was made, Bosco returned to Hong Kong from Australia and lived with Father, Mother and Ivy.

24.The family then made a second application around April 1994.

25.In early April 1994 (however, it is not know whether it was before or after the second application was made), the Father had a serious accident in which he fell down from his lorry.  His head was injured necessitating an emergency head operation, from which he rested several months and recovered.  The Father wanted to resume his work as a lorry driver, but after some insistence from family members, he sold his lorry in July 1994.  Then after, he only worked occasional as a driver, driving lorries rented from others.

26.In June 1994, Jason returned to Hong Kong from New Zealand and lived with Father, Mother, Ivy, and Bosco.

27.The formal sale and purchase agreement of Flat B, 13^th Floor, Block 4, Cheerful Garden, No 23 Siu Sai Wan Road, Hong Kong (“the Property”) was then signed on 31 December 1994.  It was sold at the concessionary consideration of HK$1,261,000.  Its full market value was stated to be HK$2,597,600.  A deposit of HK$63,050 was paid on that occasion.

28.The assignment was executed on 15 August 1995.  In both the sale and purchase agreement and the assignment, the Father and the 2^nd plaintiff (Jason) were named as the purchasers holding the Property as joint tenants.

29.So far as monetary contributions are concerned, it is common ground that the balance of the purchase price of HK$1,197,859 was financed by a mortgage loan which was repaid exclusively by the plaintiffs.  The parties however dispute over the payments of the said deposit, the stamp duty, the legal costs and the renovation costs.

30.On 31 March 1998, for the reasons to be discussed below, Father and Jason executed an assignment assigning the Property to Father and Mother as joint tenants.

31.On 7 June 2000, unfortunately Mother passed away and the Father became the sole legal owner by right of survivorship.

32.In 2004 or 2005, there was an incident[2] in which the 3^rd plaintiff (Bosco) called the police to enlist their help to remove from the Property a female aged about 30 who was there accompanying the Father.

33.By November 2011, the mortgage loan was completely repaid and the legal charge discharged.  There is now a dispute relating to the keeping of the title deeds.

34.On 7 November 2013 and with a view to obtaining a replacement set of title deeds to the Property, the Father made a statutory declaration declaring, among others, that the set of original title deeds to the Property was lost and that he intended to sell the Property.

35.Around 10 December 2014, the Father requested Hong Kong Housing Authority to make an assessment of the premium payable in the event of a sale of the Property.

36.Fearing that the Father might sell the Property, a memorandum dated 10 February 2015 (“the Memorandum”) in which the Father acknowledged that the plaintiffs were the true beneficial owners was prepared.

37.On 17 February 2015, the plaintiffs issued the Writ in this action.  The Writ was not served to the Father.

38.On 20 February 2015, the 1^st plaintiff met with the Father during which meeting the Memorandum[3] was signed by the Father.  The Memorandum is pleaded and relied on now by the plaintiffs[4].  The Father now disputes the admissibility and weight of the Memorandum.

39.On 24 February 2015, the Writ herein was amended.  Again, the Amended Writ was not served.

40.On 26 February 2015, the Amended Writ was registered in the Land Registry against the Property.

41.Somehow, the Father found out that a Writ was issued against him and registered against the Property.  He did not take the news well.  He applied for and was granted Legal Aid on 28 July 2015 and filed an Acknowledgment of Service and Notice of Intention to Defend on 7 September 2015 even though he was not served.  Thus, this action was set in motion.

The legal principles on common intention constructive trust

The relevant legal principles are not in dispute.

42.To begin with, since the Property is now registered in the sole name of the Father, the plaintiffs bear the burden of proving, on balance of probabilities, that the Father in fact holds the Property on trust for the plaintiffs absolutely.

43.The principles applicable to a case where both parties allege there was actual common intention as to who would own the beneficial interest have been summarized by Godfrey Lam J in Liu Wai Keung v Liu Wai Man[5]:-

(a)  Where both parties allege there was express discussion and actual intention as to where the beneficial interest in the property should lie, there is little scope for the operation of resulting trust (Re Superyield Holdings Ltd[6]); except where the court should decide to reject both parties’ evidence on intention;

(b)  The elements that the plaintiff has to prove to establish a constructive trust in his favour are (a) there was a common intention between him and the defendant that the plaintiff was to be the beneficial owner of the property despite that it was acquired in the defendant’s name, (b) the plaintiff altered his position in detrimental reliance upon such common intention, and (c) it is unconscionable for the defendant to assert ownership in reliance of his legal title to the property;

(c)  In ascertaining whether there was a common intention, it is the objective intention of each party “which was reasonably understood by the other party to be manifested by that party’s words and conduct” that one must examine (Gissing v Gissing[7] and Jones v Kernott[8]).

(d)  Such intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the property concerned based on evidence of express discussions.  It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention (Lloyds Bank Plc v Rosset[9]).

(e)  Even where reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested.

44.I also find the following observations by Lam VP in Primecredit v Yeung Chun Pang Barry[10] particularly apposite:-

(a)  “…, in either case [under the resulting trust analysis or the constructive trust analysis], the court should have regard to inherent probabilities in light of the surrounding circumstances at the time the property was acquired”[11];

(b)  “Since Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2012] 1 AC 776, as far as Hong Kong is concerned, the modern approach to constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context”[12]; and

(c)  “In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters”[13].

Approaches to the evidence advocated by the Father

45.Mr Chan, counsel for Father, cites extensively from a number of cases[14] to remind the court the cautions that, in gist:-

(a)  In family disputes, strong feelings are aroused which often lead the parties, honestly but mistakenly, to re-interpret the past in self-exculpatory or vengeful terms; and

(b)  Human memory is unreliable in that his or her own thought and beliefs can cause dramatic changes in recollection, which is also subject to biases as witnesses often have a stake in a particular version of events; and that recollections though honestly held may be unreliable.

46.These are of course trite and I have been bearing them very much in mind during the course of trial and in my discussions below.  I must also bear in mind that these cautions apply equally to the witnesses of and evidence proffered by both the plaintiffs as well as the Father.

47.Mr Chan also cites passages in Plunkett v Bull[15] and Thwaites v Ryan[16]to stress the need of caution in scrutinizing a claim where the claim is made against the estate of a deceased or is based on allegations against a deceased who is in no position to deny or respond.  This is a trite tenet.  Mr Chan sounds this caution against the plaintiffs’ claim in that, he submits, their claim here is also adverse to the interest of the Mother, the other donee of the alleged gift (according to the defence case) who is now deceased.

48.With respect, I do not think that tenet is engaged in the present case. It is the defence case that the Father is now the sole beneficial owner by right of survivorship and therefore the alleged gift was, according to the defence case, made to Father and Mother as joint owners.  Being joint owners, they are treated as one; and Father now is defending this action.  Moreover, the actual common intention to be established by the plaintiffs must of necessity include Father as the other person sharing that intention.

49.That said, the court, as a matter of common sense, will always examine with circumspection material allegations of conversations made or events happened between a witness and another who is now deceased and therefore cannot be called as a witness to rebut such allegations.

Assessing the witnesses

50.As mentioned, all 7 children of the family (“the 7 children”) give evidence in support of the plaintiffs’ case.  I have listened to them attentively and observed them closely.  I express my assessment of them here together not because I have not considered each of them individually; rather, having carefully considered each of them, I come to the same opinion about each of them.  I am positively impressed by them as fair and honest witnesses.  They answer questions calmly, directly and in a straight forward manner, and try to give answers to the best of their recollections.  Their evidence are not shaken in cross-examination or do they exhibit any “strong feelings” against the Father or over this dispute; rather, it seems to me that they remain affectionate towards their Father and have expressed that here and there in their evidence.  I also find that they have not tried to over-reach to attempt to make the plaintiffs’ case better.  In all, I find them honest and reliable witnesses.

51.Unfortunately, the Father has been suffering from quite a marked downturn in his health since the beginning of this year, so I am informed by Mr Chan.  It is evident that he is in some physical difficulties while giving evidence.  However, it is also evident that he is very eager to give evidence to reiterate with conviction his position that he owns the Property.  In view of the Father’s old age and physical challenge, Mr Wong, counsel for the plaintiffs, very fairly and considerately has not pursued his questions over many details which he probably otherwise would have.  However, in his oral testimony, the Father gives a number of answers to questions essentially admitting to the truth of the contents of the Memorandum in which he acknowledged that the plaintiffs owned the Property beneficially.  Mr Chan urges that those answers in the circumstances should not be accorded such weight as to make them dispositive of this action and that the court should consider the Father’s case based on his evidence given in his witness statement.  In the particular circumstances of this case I am prepared to consider Father’s evidence in his witness statement first and leave those answers aside for the time being and only consider them as and when necessary.

Discussion – The plaintiffs’ version or the Father’s version of common intention

52.Father’s evidence in his witness statement relating to how he agreed to purchase the HOS flat and the reaching of his version of the common intention is as follows.  When the subject of purchasing a HOS flat was first raised by the plaintiffs in 1993, he and Mother were reluctant to move and they had repeated tell the plaintiffs that.  He and Mother did not think that the condition of Wah Lok House was so deteriorated or that the living condition there bad.  Also, since he was planning to retire soon and Mother was not working, they could not afford buying a HOS flat, while the rent for the Public Housing Unit was really cheap.  But the plaintiffs promised and guaranteed to them that they only need to pay the deposit and all the expenses related to the purchase of the HOS flat, the plaintiffs would pay all the monthly mortgage payments as their monthly payments of the living expenses for Father and Mother, and that out of their filial love the Property would be a gift to them.  After many discussions among “family members”[17] and in reliance of the plaintiffs’ said promises particularly that the HOS flat would be a gift to them, Father and Mother finally agreed, and particularly Father as the registered tenant agreed to relinquish the Public Housing Unit.

53.Regarding these discussions among “family members”, the Father in his witness statement does not specify with which family members he had those said discussions, while paragraph 19 of his Amended Defence, in which he pleads his version of common intention and how it was reached, avers that the discussions were held amongst the parents and the plaintiffs.  His case therefore was that apparently the older 4 children had not taken part in the discussions.

54.In contrast, the evidence of all 7 children, except Jason’s (whose evidence I will return to), is that they do not recall who first proposed the purchase of a HOS flat.  Their evidence is that the family during their gatherings in 1993 had often talked about the purchase of a HOS flat so as to improve the living environment of the parents’.  None of the 7 children recalled that Father or Mother was reluctant, though they recalled their parents were concerned whether they could afford it financially.  Rather, they recall that Mother was quite desirous of moving out of the Public Housing Unit.

55.Particularly, Bosco recalls a conversation he had with Mother during one of the term breaks in 1993 when he returned to Hong Kong which he took to heart.  He remembered Mother complained to him that the Public Housing Unit was noisy with the drillings, the repairs and constructions going on all the time and said that many of her neighbours had moved out to flats with better living environment, and that she wanted to apply for a HOS flat.  Jason recalls similar conversations with Mother.  I accept such evidence from Bosco and Jason and find that not only was Mother not reluctant to purchase a HOS flat so as to move out from the Public Housing Unit, but in fact she wanted to.

56.Importantly, all 7 children recall, with varying degree of certainty, that since the early stage of the talks about purchasing the HOS flat, a clear arrangement and consensus have been reached in the family, which had all along been that the plaintiffs would finance the purchase of the HOS flat and own it but the parents would be living in it for as long as they would live.  Also importantly, they do not recall having any discussion about making the HOS flat a gift to the parents.  The effect of their evidence therefore is that there were a lot of talks about it but there was no real diversion of views or options on the matter that required resolution.

57.Jason says in evidence that he distinctly recalls one long distance telephone call he made from New Zealand to Hong Kong around that time talking to Mother in which she again talked about wanting to move to a HOS flat.  In that conversation, he proposed to Mother that the 3 of them - Ivy, himself and Bosco - would finance the purchase and own the HOS flat so that Mother and Father could move to live there; and after finished talking to Mother, he then talked to Father and repeated to him his said proposal and he recalls that Father agreed.  He then subsequently discussed with and obtained the agreement of Ivy and Bosco over phone.  Jason also recalls that at the time he often called the two of them as he was quite close to them.  Since then, his proposal became the family consensus.  One of the salient background, which is common ground, is that at the time all the 4 older children had either purchased their own property or had been allotted public housing, while the 3 of them hadn’t yet.  His said evidence remains unshaken in cross-examination.  I also take note that it is undisputed that Jason was all along very involved in the purchase of the Property in that he was actively involved in the selection of the HOS flat, he was named as a co-purchaser with Father and a co-borrower in the legal charge, and the monthly mortgage repayments (prior to August 1997) were paid to the bank through his bank account.  I accept his such evidence and also accept that, despite the passage of time, he distinctly remembers the conversation and that his such evidence is reliable since understandably it was quite a bold proposal and huge commitment for him who has just finished studying and began working to promise his parents to finance the purchase of a real property so as to secure them a better living environment for the rest of their lives and in the endeavor to act as the prime mover to liaise with and seek agreement from Ivy and Bosco. 

58.From the family circumstances detailed above and having seen and heard the evidence of the Father and the 7 children, I have no doubt in my mind that at the relevant time this was a tight family with strong traditional Chinese values, filial love for the parents and good relationship amongst the siblings, and in which the older siblings have been taking the lead in shouldering family responsibilities and making financial contributions each according to his or her ability.

59.With those being the family circumstances and dynamics, I find the Father’s version that the matter had not been discussed with the 4 older children, especially the 2 older sons, Chi Wai and Alfred, quite surprising and improbable, bearing in mind (a) that the arrangements according to the Father would have significant implication on the finances of the parents (as would be discussed in due course), and (b) that it is common ground that about 2 years have lapsed from the time of the discussion to moving in the Property in August 1995 and it is quite inconceivable that something as significant as the parents moving out from a place they have lived in for about 27 years to a HOS flat, and the financial arrangements associated with it, had not been brought up to be discussed in family gatherings with the 4 older children.

60.Moreover, the Father’s version also means that the youngest 3 children (ie the plaintiffs), one of whom were still studying, and another just began working, were insisting on making a gift of a real property to their parents, and in doing so without discussing with, or involving, or eliciting contributions from, the older siblings, especially Chi Wai and Alfred who had already had established careers and incomes and who had always been contributing very substantially to the parents.  I find such scenario very improbable under the then circumstances and dynamics of this family.

61.In this regard, both Chi Wai and Alfred gave clear evidence, which I accept, that had the HOS flat been intended as a gift to the parents out of filial love, they would have been consulted and they would definitely contribute to it as they were the older sons.  Therefore, if there had been discussions with Chi Wai and Alfred in which the matter of the plaintiffs insisted to make a gift of the HOS flat to the parents was mentioned to them, I find that the older sons would have, as they say, contributed to it.

62.I turn next to consider the financial implications of the respective versions of common intentions.

63.According to the Father’s version, the plaintiffs proposed and he and Mother agreed that he and Mother would pay the deposit and the expenses relating to the purchase while the plaintiffs would pay the monthly mortgage payment as their monthly contributions of the parents’ living expenses.  I note that this arrangement of paying the monthly mortgage payments as the plaintiffs’ monthly contributions of the parents’ living expenses was said 3 times in the Father’s witness statement[18].

64.Regarding these payments, the Father insists that he, and not the plaintiffs, had paid for the deposit of about HK$64,000, legal costs and stamp duty totaling HK$50,000 and renovation costs totaling HK$226,000[19]. These 3 payments total to HK$340,000.  Putting these against the context of the salient events, these payments would have been made within about a year after he had had the serious accident in April 1994 during which time he had sold the lorry as a move towards retirement.

65.However, one of the reasons Father said he was reluctant to purchase a HOS flat was because he was about to retire and Mother was not working and therefore he was concerned he could not afford it.  Moreover, in disputing the plaintiffs’ case that part of the deposit in the sum of HK$40,000 was contributed by the Father as a gift to them, the Father said in his witness statement[20] that the sum was not a gift as he was already 62 years old and was about to retire and he did not have much savings and has no capability to make the gift (我當時已經62歲，準備退休，我自己的積蓄也不算多，根本沒有能力送贈港幤40,000元).  These are quite inconsistent with the making of the said payments totaling HK$340,000.

66.Now, the Father’s version would mean that the parents would be spending HK$340,000 from their savings while would be losing the use of the monthly contributions of Ivy, Jason and Bosco (their contributions totals to about HK$10,000, which would be used to pay the monthly mortgage payments of about HK$10,500 a month) while getting the beneficial ownership of the Property. Since the Property was intended to be used as a residence for the parents for the rest of their lives, its beneficial interest would not produce any stream of income for them for the coming years.  Therefore, according to Father’s version, in receiving the beneficial interest in the Property “as a gift”, they would be spending immediately a very substantial amount of their savings while would be losing a significant stream of income for about 10 years.

67.In contrast, under the plaintiffs’ version, while the parents would not have the beneficial interest, they would keep the HK$340,000 savings and would continue to receive monthly contributions from Ivy, Jason and Bosco.

68.It is a matter of common sense that for aged retirees like the parents, their savings and having a steady stream of income are matters of immediate and paramount importance affecting their livelihood; while the beneficial interest of the Property is not, so long that they might live in it.

69.In this connection, I do not accept Mr Chan’s submission that it is inherently improbable for the parents to relinquish a secure housing arrangement and agree to rely on the plaintiffs’ promise to let them live in the Property, which he submits was a precarious status.  As I set out above, the family circumstances in 1993 was such that the parents since 1974 had been consistently receiving for 19 years monthly contributions from their children as they each became gainfully employed.  The children’s such track record had clearly shown that there was very good reason for the parents to believe that their children would continue to provide for them and that the promise of the plaintiffs to let them live in the Property would be kept.

70.I therefore take the view that in the circumstances at the time of the purchase of Property, there was little real benefit to be obtained by the parents from getting the beneficial ownership, while the said negative financial implications would be very and especially real to Father and Mother. In other words, it seems to me that the arrangement under the Father’s version make little financial sense to the parents.  I find it inherently improbable that the plaintiffs, out of their filial love for their parents and intending for their betterment, would propose and insist on them the Father’s version thereby requiring the parents to spend a very significant part of their savings.  I find it equally inherently improbable that Father and Mother would agree to such an arrangement.

71.Further, the arrangement under the Father’s version would means that financially the parents would have to depend on the monthly contributions by the older 4 children after the purchase of the Property (and whatever savings they might have left, if any, after the payment of the said HK$340,000).  If that had been the case, I find it very improbable that the parents did not see fit to alert the older 4 children and talk to them about it, and get some understanding from them.

72.Regarding the making of their monthly contributions to their parents after the purchase of the Property, all 3 plaintiffs give evidence that they had continued, without stopping at all, to do so after the purchase of the Property.  These are not at all challenged in their cross-examination and I so find.  Such continual payment of monthly contributions to the parents by the plaintiffs contradicts the Father’s version.

73.For all the reasons stated above, I prefer and find for the plaintiffs’ account of events and their version of actual common intention reached, and do not accept the Father’s.  I find as a fact that at the time contemporaneous with the purchase of the Property, Father, Mother and the 3 plaintiffs have reached and maintained the actual common intention that (a) the purchase of the Property would be financed by the 3 plaintiffs save the contribution of HK$40,000 by the Father, (b) regardless of contribution, the beneficial interest of the Property would belong to the 3 plaintiffs in equal shares and (c) the Father and Mother may reside in the Property as long as they live.

74.For completeness, I will set out my findings in relation to the parties’ disputes over the payment of the deposit of about HK$64,000, the legal costs and stamp duty totaling about HK$50,000 and the renovation costs, which the plaintiffs say was in the sum of about HK$100,000 while the Father says was in the sum of HK$226,000.  I find that save the sum of HK$40,000 which was contributed by the Father under the plaintiffs’ version of common intention towards the payment of the deposit, the remainder of the deposit and the legal costs and stamp duty were paid by the plaintiffs.  I so find because (a) I reject the Father’s version but accept the plaintiffs’ version of common intention, (b) the passbook pages of the Father’s savings account produced by him covering the relevant period do not show that such payments were made as he alleged, and (c) I prefer the plaintiffs’ evidence over the Father’s.  I also find that the renovation costs were about HK$100,000 and were paid by contributions from the 7 children for the same 3 reasons stated above and for the additional reason that, according to the Permit for Renovation dated 1 September 1995[21], the items of renovation were limited and not very substantial and on balance of probabilities would not cost HK$226,000 but would cost around HK$100,000.

The assignment dated 31 March 1998

75.Mr Chan in his closing submissions seeks to rely on the assignment dated 31 March 1998 whereby the Father and Jason as joint tenants of the Property assigned the same to Father and Mother as joint tenants “by way of gift”.  As I understand it, his argument was that the gift to the parents was completed in 2 stages with the said assignment “perfecting the gift”.

76.Firstly, the Father does not challenge Jason’s evidence, which I accept, that the said assignment was executed because in 1997 Jason was planning to get married and was minded to take advantage of a favourable mortgage scheme offered by his employer bank.  But he could not be able to do that if he already “owned” a property.  Therefore, he could no longer be one of the registered owners of the Property.  There was thus no intention whatsoever on the part of Jason or the plaintiffs to divest their equitable interest.

77.Secondly, Mr Chan’s such submission is premised on the alleged fact that there was a gift of the Property to Father and Mother in the first place.  As I concluded above, I do not accept there was such a gift but hold that it was the parties’ common intention that the beneficial interest of the Property would belong to the plaintiffs.  Therefore on analysis, when the Property was first registered in the names of the Father and Jason as joint tenants, they were holding the Property as constructive trustees for the plaintiffs.  When they executed the 1998 assignment, they were also executing it as constructive trustees, and whereby the assignees, namely Father and Mother (and Mother was also a party to the common intention), became the new constructive trustees.  I therefore, and with respect, do not accept Mr Chan’s said submission.

The Memorandum

78.The Father disputes the admissibility and weight of the Memorandum.

79.As set out above, I reach my above findings without the need to resort to the Memorandum.  For completeness however, I will briefly state my finding of facts and views.

80.The Father’s case pleaded in Amended Defence[22] and deposed in his witness statement[23] against its admissibility and weight is one akin to non es factrum.  In gist, he said he was urged by Ivy to sign the Memorandum in a busy MTR station, he did not know its contents because he had not read it which in turn was because he did not bring with him his reading glasses, he signed as he was urged by Ivy to do so and he trusted her.

81.However, in cross examination, the Father agreed that Ivy in fact had explained the contents of the Memorandum to him, that he had read through the Memorandum himself, that he understood the meaning of its contents acknowledging that the plaintiffs were the true beneficial owners of the Property and that he signed it because he agreed with the said contents.  I should add that Mr Wong has been entirely fair in the way he put those questions to the Father - in short sentences, slowly and very audibly and allowing time for the Father to consider before giving his answers.  Based on the Father’s such answers, I find the Father knew about its contents and signed it willingly to indicate his agreement.  I find the Memorandum admissible and, had it been necessary, I would hold that it lends support to the plaintiffs’ version of common intention.

No resulting trust

82.As discussed above, since I find as a fact in favour of the plaintiffs’ version of common intention, as a matter of principle, no resulting trust would arise.  It is therefore not necessary to further consider the parties’ respective fallback positions based on resulting trust.

No proprietary or promissory estoppel

83.Proprietary and promissory estoppel were pleaded by way of defence and no counterclaim was made there from.

84.Mr Chan first argues that there is estoppel by acquiescence (relying on Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985) in that the plaintiffs had stood by knowing that the Father had acted to his detriment under the mistaken but honest belief that he and Mother were the true beneficial owners of the Property.  Such detriments include, among others, the relinquishment of the Public Housing Unit, payment of the deposit (or HK$40,000 thereof, as I have held above) and payment of the renovation costs (which I have held against above).

85.One of the essential elements giving rise to estoppel by acquiescence is that the person suffering the detriment did so under a mistaken but honest belief as to his entitlement to the legal right.  It logically and necessarily follows from my finding that it was a common intention between the parties (including the Father and Mother) that the beneficial interest would belong to the plaintiffs, that I find that Father and Mother were not labouring under any alleged mistaken but honest belief as to their entitlement.  I therefore hold that such defence fails.

86.Mr Chan further argues that there is promissory estoppel in that the plaintiffs, as promisors, by words or conduct, conveyed or was reasonably understood to convey a clear and unequivocal promise or assurance to the Father and Mother, as promisees, that the plaintiffs would not enforce or exercise some of their rights (relying on Luo Xing Juan v Estate of Hui Shui See (2009) HKCFAR 1).

87.There are no other discussions or events alleged by the Father in support save those discussed above which, according to the Father, gave rise to the Father’s version of common intention.

88.The unequivocal promise or assurance is one of the essential elements giving rise to promissory estoppel.  Again, it follows from my finding in favour of the plaintiffs’ version of common intention that I find against any such alleged unequivocal promise or assurance having been made by the plaintiffs.  I therefore, and with respect, also hold against this defence.

The plaintiffs’ summons dated 30 August 2018

89.By their summons dated 30 August 2018 to be heard on the first day of trial, the plaintiffs applied to adduce the Deed of Guarantee between Hong Kong Housing Authority and Wing Lung Bank Limited dated 11 May 1994 as evidence.  It was opposed by the Father.

90.The purpose for adducing it, said Mr Wong, was to counter what the Father pleaded in paragraph 19(7) of the Amended Defence that

“… The reasons offered by Chi Shing was that by using Chi Shing’s name as one of the purchasers, it would be easier to obtain the mortgage loan …”.

91.It is said that the deed would show that Wing Lung Bank had covenanted with the Housing Authority to provide mortgage to approved purchasers, and therefore Chi Shing (Jason)’s name was not necessary to make it easier to obtain the mortgage loan, and therefore the above allegation was not substantiated.

92.Having heard the application on the first day of trial, I dismissed it with costs to the Father whose own costs are to be taxed according to Legal Aid Regulations, for reasons to be given in this judgment.  My reasons were:-

(a)  Clause 11 of the deed actually reserved a right on the part of the bank to refuse mortgage finance to any approved purchaser.  Therefore the plaintiffs’ said point about the probative value of the deed was based on a false premise;

(b)  The deed would in any case be of little probative value in that the Father’s allegation was that such was saidby Jason, regardless of whether that was true or not; and

(c)  the application was inexcusably late.

Disposal

93.In the premises, I hold in favour of the plaintiffs’ claim herein.  I would

(a)  grant a declaration that the Father holds the Property on trust for the 3 plaintiffs in equal shares;

(b)  not grant the injunction sought in paragraph 2 of the prayer, as the writ herein was already registered against the Property as a lis pendis; and

(c)  make an order directing the Father to execute such assignment or documents as are necessary to convey the legal title to the Property to the plaintiffs.  Parties are to attempt to agree on the wording of this order and the directions necessary for carrying it out and submit a draft for approval.

94.Mr Wong informs the court that the plaintiffs would not enforce the costs order against the Father personally but requests a costs order be made any way.  Presently, I do not see any reason why costs should not follow the event.  I therefore make a costs order nisi, to be made absolute unless an application to vary is made by summons within 14 days, that the Father do pay the plaintiffs their costs of this action (including all costs reserved, if any) with certificate for counsel, and that the Father’s own costs be taxed in accordance with Legal Aid Regulations.

95.Lastly, I thank counsel for their assistance to the court.

Mr Simon Wong, instructed by Annie Leung & Company, for the plaintiffs

Mr Frederick Chan, instructed by Edmund Cheung & Co, assigned by the Director of Legal Aid, for the defendant