Lo Man Yau v. Chiu Sung Fai and Another
Read the full judgment text of DCCJ 2516/2013 on BabelCite. This District Court judgment was delivered on 18 November 2019.
1. By a Judgment handed down on 14 August 2019 (“the Judgment”), I dismissed the plaintiff’s claim for possession of the property situated at Flat B7 and B8 on 3 rd Floor, Tung Lee Building, Nos 1C, 1D, 1E, 1F, 1G, 1H, 1J and 1K Water Street, Nos 1-15 On Ling Lane, Hong Kong (“the Property”) and mesne profits and granted a declaration that the 1 st defendant is the beneficial owner of the Property to the extent of 30.77% under a resulting trust.
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DCCJ 2516/2013 [2019] HKDC 1489 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 2516 OF 2013 ________________________ BETWEEN
________________________ Before: Deputy District Judge Lawrence K F Ng in Chambers Date of Hearing: 28 October 2019 Date of Decision: 18 November 2019 ________________________ D E C I S I O N ________________________ A. INTRODUCTION 1.By a Judgment handed down on 14 August 2019 (“the Judgment”), I dismissed the plaintiff’s claim for possession of the property situated at Flat B7 and B8 on 3rd Floor, Tung Lee Building, Nos 1C, 1D, 1E, 1F, 1G, 1H, 1J and 1K Water Street, Nos 1-15 On Ling Lane, Hong Kong (“the Property”) and mesne profits and granted a declaration that the 1st defendant is the beneficial owner of the Property to the extent of 30.77% under a resulting trust. 2.The Judgment was my determination on the issue directed by the Court of Appeal in paragraph 25 of its judgment dated 9 July 2018 (the “CA Judgement”). The issue is: whether the claim of trust as pleaded by the 1st defendant arose, being in mind that, as found by this court, the 1st defendant did make contributions of HK$558,534 towards the purchase of the Property. 3.In this connection, in paragraph 22 of the CA Judgment, the Court of Appeal stated that under the legal principles on resulting trust for a corporate context (which are set out in paragraph 12 of the CA Judgment), as a starting point, the rebuttable inference is that both the legal and beneficial interest in the Property is vested in South Sea and the burden is on the 1st defendant to rebut the inference. The Court of Appeal further stated that all the circumstances of the case ought to be assessed to determine whether the 1st defendant had rebutted the inference by showing that the parties intended at the time of purchase to vest the beneficial interest of the Property in the 1st defendant personally (or the beneficial interest in the Property corresponding to the 1st defendant’s contributions, see paragraph 24 of the CA Judgment). In particular, in respect of the 1st defendant’s contributions, the court should approach them against his pleaded case in paragraphs 3 and 5 of the defence and counterclaim and any evidence relevant to the parties’ intention at the time of purchase of the Property. 4.In finding that the 1st defendant is the beneficial owner of the Property to the extent of 30.77% under a resulting trust, this court in effect found that the 1st defendant had rebutted the inference that both the legal and beneficial interest in the Property was vested in South Sea and the 1st defendant had shown that the parties intended at the time of purchase to vest the beneficial interest of the Property in the 1st defendant personally corresponding to his contributions. 5.By a Summons filed on 9 September 2019, the plaintiff applied for leave to appeal to the Court of Appeal against the Judgment. 6.Unless otherwise stated, in this Decision, I shall adopt the abbreviations used in the Judgment. B. LEAVE TO APPEAL: APPLICABLE LEGAL PRINCIPLES 7.It is trite that leave to appeal shall not be granted unless the court is satisfied that (a) the appeal has a reasonable prospect of success; or (b) there is some other reason in the interests of justice why the appeal should be heard: section 63A(2) of the District Court Ordinance (Cap 336). 8.It is common ground that a reasonable prospect of success involves the notion that the prospects of succeeding must be reasonable and therefore more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125, at para.17 per Le Pichon JA. C. APPLYING THE LAW TO THE FACTS OF THIS CASE 9.The parties agreed that an appeal against a finding that the 1st defendant has rebutted the inference that both the legal and beneficial interest in the Property is vested in South Sea is an appeal against a finding of fact. 10.In relation to appeals against findings of fact, I bear in mind the well-established principle that the question for the Court of Appeal was whether, even though it did not have the advantages enjoyed by the trial judge who received the evidence first hand, it was nevertheless satisfied that his conclusion on the facts was plainly wrong: Ting Kwok Keung v Tam Dick Yuen & Others (2002) 5 HKCFAR 336. 11.The plaintiff advanced 6 grounds of appeal as set out in paragraphs 2(a) to (d), 3 and 4 of the Draft Grounds of Appeal. Proposed grounds 1 to 4 (paragraphs 2(a) to (d)) are grouped under the sub-heading “the Judge took into consideration irrelevant or inadmissible matters and considerations or gave undue weight to them”. Proposed grounds 5 and 6 (paragraphs 3 and 4) are not so grouped but are separate grounds. 12.It ought to be mentioned at the outset that most if not all of the proposed grounds have been canvassed in the plaintiff’s skeleton submissions lodged for the re-trial and at the hearing on 14 August 2019 and have been dealt with by this court in the Judgment. 13.Proposed grounds 1 and 2 (paragraphs 2(a) and 2(b)) can be dealt with together. They state:-
14.With respect, proposed grounds 1 and 2 are not reasonably arguable. 15.First, it is clear that that the focus of paragraph 13 of the Judgment is on the nature of the sum of HK$558,534 paid by the 1st defendant towards the purchase of the Property. As noted in paragraph 13(1) of the Judgment, the only explanation the plaintiff could offer for the sum of HK$558,534 was that it was a loan from the 1st defendant to South Sea, which explanation this court has rejected. If, as this court has found, the sum of HK$558,534 was not a loan by the 1st defendant to South Sea, then by parity of reasoning with the considerations mentioned in Re Fortune King Trading Limited, HCCW 432/2012 (unrep, 19 May 2017) (see paragraph 13(2), Judgment), this is consistent with an intention on the part of the 1st defendant to acquire a beneficial interest in the Property corresponding to his contributions, because otherwise there would be no reason why he would have paid the sum of HK$558,534 towards the purchase of the Property. 16.Secondly, consistent with his evidence that the sum of HK$558,534 was not a loan from him to South Sea, at the meeting on 12 October 2009, the 1st defendant stressed that because the Property was to be acquired by him, and South Sea was used solely to hold the Property so acquired by him, he made contributions to the purchase of the Property (see paragraph 14(1), Judgment). Thus, the fact that the sum of HK$558,534 was not a loan from the 1st defendant to South Sea is intricately linked to 1st defendant’s intention to acquire a beneficial interest in the Property. 17.Thirdly, under these circumstances, I cannot see how it can be said that this court was wrong to give weight to the fact of the 1st defendant’s contribution to the purchase of the Property. It is trite that weight is a matter for the judge. 18.Fourthly, in respect of proposed ground 2 (paragraph 2(b)), the statement therein that “D1’s interest in South Sea is reflected by his 50% shareholding of the company” is a tautology. The statement therein that “D1’s contribution was more than adequately reflected by D1’s shareholding in South Sea” is beside the point. The issue is not whether the 1st defendant’s contribution was adequately reflected by his shareholding in South Sea, but is rather whether the parties intended at the time of purchase of the Property that the 1st defendant had a beneficial interest in the Property corresponding to his contributions. 19.Proposed grounds 3 and 4 (paragraphs 2(c) and 2(d)) can be dealt with together. They state:-
20.I do not think that proposed grounds 3 and 4 have any reasonable prospect of success. 21.Proposed ground 3 refers to paragraphs 14(4) and (5) of the Judgment. However, paragraphs 14(4) and (5) should not be considered in isolation, but should rather be considered in conjunction with paragraphs 14(1) to (3) of the Judgment in which this court found:-
22.It is clear that it was the 1st defendant and Sung Leung’s evidence at the meetings on 25 September 2009 and 12 October 2009 that the 1st defendant purchased the Property for the purpose of providing a residence for the 1st defendant, Sung Leung and their family. Thus, contrary to the plaintiff’s submission, the fact that the Property was intended to be used as a residence for the 1st defendant’s family is part and parcel of the 1st defendant’s intention to acquire a beneficial interest in the Property corresponding to his contribution. In other words, as this court found in paragraph 14(4) of the Judgment, “… the 1st defendant’s intention to purchase the Property as a residence for himself, Sung Leung and their family is inseparable from and consistent with his intention to acquire a beneficial interest in the Property corresponding to his contributions”. 23.As to proposed ground 4, I do not agree that the conversations between members of the family at the meetings on 12 October 2009 and 25 September 2009 are inadmissible or should not be given any weight. The meetings were held long before this Action was commenced in 2013. Furthermore, apart from the 1st defendant and Sung Leung, Shuk Har and Daniel Ng also mentioned about the parties’ intention at the time the Property was purchased: see paragraphs 14(2) and 14(3) of the Judgment (summarized in paragraph 21 above). As this court found in paragraphs 16 and 17 of the Judgment:-
24.As this court also found in paragraph 15 of the Judgment, the 1st defendant’s case that at the time of purchase of the Property the parties intended that he would acquire a beneficial interest in the Property corresponding to his contributions is also supported by his evidence at trial, which this court also accepted. The relevant evidence is then set out in paragraphs 15(1) to (4) of the Judgment and is not repeated here, suffices to point out that the gist of the 1st defendant’s evidence is that at the time of purchase of the Property he already knew that he had a beneficial interest in the Property by reason of his contributions. 25.Proposed grounds 5 and 6 state:-
26.I do not think that proposed grounds 5 and 6 have any reasonable prospect of success. 27.Firstly, for the reasons stated in paragraph 19 of the Judgment, I do not agree that the 1st defendant admits under cross-examination that his intention at the time of purchase of the Property was to have interest in the Property through his shareholding in South Sea. On the contrary, as this court found in paragraph 15(1) of the Judgment, in cross-examination, the 1st defendant was asked whether at the time of purchase of the Property he already knew that he had a beneficial interest in the Property by reason of his contributions, and he answered in the affirmative and specifically said this was he who actually purchased the Property. 28.Secondly, as also noted in paragraph 15(1) of the Judgment, it was not put to the 1st defendant that he did not know or intend to acquire a beneficial interest in the Property corresponding to his contributions or that it was not the parties’ intention at the time of purchase of the Property that the 1st defendant would acquire a beneficial interest in the Property corresponding to his contributions. 29.Thirdly, as also noted in paragraph 19(3) of the Judgment, if it is the plaintiff’s case that the 1st defendant did not have any beneficial interest in the Property corresponding to his contributions or that it was not the parties’ intention that the 1st defendant would acquire a beneficial interest in the Property corresponding to his contributions, the plaintiff should have specifically put the questions to the 1st defendant. This court failed to see how the plaintiff could then make the submission in paragraphs 23 and 24 of the plaintiff’s skeleton submission lodged for the re-trial when he had failed to specifically put the relevant questions to the 1st defendant in cross-examination. 30.Further, I am of the view that there is no other reason in the interests of justice that the appeal should be heard. This ground was not even mentioned in the plaintiff’s skeleton submissions lodged in support of the plaintiff’s application for leave to appeal. It was only at the hearing on 25 October 2019 that this point was raised for the first time. At the hearing, Mr Cheung (for the plaintiff) accepted the principles stated by the Court of Appeal in paragraph 12 of the CA Judgment. His contention was that this court erred in failing to apply those principles. For the reasons stated above, I do not think that the plaintiff’s contention has any reasonable prospect of success. D. CONCLUSION 31.To conclude, none of the grounds raised by the plaintiff has any reasonable prospect of success. There is also no other reason in the interests of justice that the appeal should be heard. The plaintiff’s summons is dismissed with a costs order nisi that the 1st defendant’s costs are to be paid by the plaintiff to be taxed if not agreed with certificate of counsel and that the 1st defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations. 32.It remains for me to thank counsel for their assistance.
Mr Victor C F Cheung, instructed by Simon C W Yung & Co, for the plaintiff Ms Jennifer Tsui, instructed by Cheung & Choy, assigned by the Director of Legal Aid, for the 1st defendant The 2nd defendant was not represented and did not appear |
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