Read the full judgment text of CACV 177/2019 on BabelCite. This Court of Appeal judgment was delivered on 4 December 2019 before Lam VP, Yuen JA and G Lam J.
Civil procedure – pleadings – whether legal consequences must be pleaded – whether a party may advance a new legal argument on appeal not raised at trial – resulting trust – common intention constructive trust – vendor and purchaser trust – Land Registration Ordinance – priority of unregistered instruments – bona fide purchaser for value without notice. The plaintiff claimed that the 1st and 2nd defendants, indigenous villagers who had orally agreed in July 2010 to sell adjoining Small House Policy lots in Ho Chung Village to her for $4,300,000 each, held the lots on trust for her. The parties signed written agreements on 2 November 2011 reducing the oral agreements into writing, but these were not registered or stamped. The plaintiff paid about $12,041,433 in purchase price, construction, and miscellaneous costs. When the 1st and 2nd defendants became indebted, they sold the properties to the 3rd and 4th defendants for $12 million each, whose provisional sale and purchase agreements were registered. The trial judge found no resulting trust but entered judgment for the plaintiff on unjust enrichment against the 1st and 2nd defendants and dismissed the claim against the 3rd and 4th defendants. On appeal, the plaintiff abandoned resulting trust and argued for the first time a common intention constructive trust and a vendor/purchaser trust. Held, dismissing the appeal: (1) Under the Civil Justice Reform the trial is the main event, and an appeal is not a second round of trial; a new argument on appeal may be barred not only where evidence was not exhaustively explored, but also where it could have affected the opponent's conduct of the case, counter-arguments, procedural steps, or cross-examination. The plaintiff had, through her counsel, disavowed reliance on her written sale and purchase agreement at trial and confined her case to resulting trust in the Agreed Statement of Issues, opening and closing submissions, and conduct of evidence. It was too late to reformulate. (2) Re Vandervell's Trusts (No.2) and Order 18 rule 7 do not entitle a party to plead only facts and then raise unpleaded legal consequences at trial or on appeal; legal practice has moved on and the underlying objectives of the Civil Justice Reform require that legal consequences be pleaded. (3) A common intention constructive trust requires a common intention regarding the sharing of beneficial ownership while legal title remains in one party; here the parties' common intention was at most to proceed with a sale and purchase, not to share beneficial ownership pending completion. (4) A vendor/purchaser trust is a provisional split of beneficial ownership dependent on specific performance being available; the plaintiff could not establish specific performance on the facts, and in any event her written agreement of 2 November 2011 was a registrable instrument which she failed to register, so that under s.4 of the Land Registration Ordinance the 3rd and 4th defendants' registered provisional agreements took priority regardless of notice. The plaintiff's remedies lay against the 1st and 2nd defendants, against whom the judge had already given judgment on unjust enrichment. Order: appeal dismissed with costs; order nisi for certificate for two counsel.
Legal issues: Whether plaintiff may advance new trust arguments (common intention constructive trust and vendor/purchaser trust) on appeal that were not pleaded or run at trial · Whether a common intention constructive trust arose on the facts · Whether a vendor/purchaser trust arose from the oral agreements
Outcome: Appeal dismissed with costs; the trial judge's judgment for the plaintiff on unjust enrichment against the 1st and 2nd defendants and dismissal of the claim against the 3rd and 4th defendants stands.
Cited by 17 cases · Cites 2 cases