Cheung Sai Lon v. Cheung Sai Ha and Another

HCA 2218/2019

[2020] HKCFI 2551

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2218 OF 2019

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BETWEEN

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Before:  Hon Coleman J in Chambers (Open to Public)

Date of Submissions:  21 September 2020

Date of Judgment:  5 October 2020

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J U D G M E N T

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A. Introduction

1.By summons dated 6 August 2020 (“Summons”), the plaintiff seeks judgment in default in relation to various claims for declaratory relief and liquidated sums as set out in the Statement of Claim dated 20 January 2020.  The application is made pursuant to RHC Order 19 rule 7.  The relevant default is that neither of the defendants has filed an Acknowledgement of Service giving notice of intention to defend, nor any Defence.

2.On 3 September 2020, I gave directions for this application to be dealt with by way of paper disposal, in accordance with a timetable for exchange and filing of written submissions which I set.  Mr Earl Deng, Counsel for the plaintiff, has filed submissions dated 21 September 2020.  Neither of the defendants has filed any submission within the time permitted, nor sought any extension of time to do so, though in light of the nature of this application that is perhaps not surprising.

3.The plaintiff has twin sisters.  One sister is the 1^st defendant (“D1”), and both sisters together are the 2^nd defendant (“D2”) as the executrices of the estate of their father Cheung Hung Kwong, deceased (“Father”).

4.The claim pleaded in the SOC can be grouped into three distinct parts:

(1)  Ownership of the landed property known as No. 72 Tai Shui Hang, Shatin, New Territories on Lot No. 935 in Demarcation District No. 196 (“House 72”);

(2)  The liquidated sum of $3,521,100, comprised of

(a)  $2,300,000 of alleged unauthorized withdrawals (“Unauthorized Withdrawals”) by the Father in favour of D1 from the joint account Hang Seng Bank No. 259-3-076181 held in the names of the plaintiff and the Father (“Joint Rental Account”) and

(b)  $1,221,100 of alleged missing rental income (“Missing Rental Income”) not paid into the Joint Rental Account from leasing House 71 and House 72;

(3)  Proceeds (“FF Proceeds”) from the sale of Shops 54 and 55 at 1/F, Fu Fai Gardens, Shatin, New Territories (“FF Shops”) in the amount of $2,257,105 representing the sum of money the plaintiff paid to the Father to acquire jointly the FF Shops, which the Father allegedly sold without authorization and which proceeds were applied to acquire the shop at G/F, 93 Tai Shui Hang, Shatin, New Territories (“TSH Shop”) in the joint names of the Father and D1 as joint tenants.

5.The matter has previously come to court on the inter partes application for injunctive relief.  I gave an injunction restraining D1 from disposing of the property and funds the subject matter of the action, and made ancillary orders for D1 to file and serve an affirmation in relation to the whereabouts of some of those funds.  D1 is in breach of that requirement, and the subsequent unless order that if she did not provide the discovery she should pay $600,000 into court.

B.  Background Facts

6.Mr Deng relies upon the following general background matters, which are pleaded, as being relevant to all three areas of the claim.  Unless the context otherwise makes clear, references in brackets to paragraph numbers are to the material numbered paragraphs of the SOC.

7.In around 1992, the plaintiff and the Father sold their father-and-son Chinese takeaway business in the UK (which they had been operating since around 1987), so as to return with the entire family to Hong Kong.  This was because the plaintiff’s mother had a terminal illness, and the Father retired to care for the mother (§§3-4).

8.At the time of his return to Hong Kong, the plaintiff had approximately $4.5 million from the proceeds of sale of the business, his personal savings, a cash gift from his grandfather after selling land, and profits made from currency speculation (§5).

9.In 1993, the plaintiff and the Father jointly purchased the FF Shops.  Shop 54 and Shop 55 were purchased by assignments in June and July 1993, for the consideration of $2,500,000 and $1,970,000 respectively.  The plaintiff contributed a sum of at least $2,351,694, based on a series of transactions between 27 May 1993 and 1 July 1993, the details of which are particularized in the SOC by reference to dates, amounts, and currency (§§9-11).

10.In the period 1995 to 1997, the plaintiff paid a total of $2,544,780 from his personal bank accounts to acquire the land and fund the construction of two houses under the Government Small House Policy for indigenous villages.  The houses as constructed became House 71 and House 72 (together “Houses”).  House 71 was put in the plaintiff’s name and House 72 was put in the name of the Father.  But, they reached a common understanding that all rental income was to be deposited into a joint account in the plaintiff’s and the Father’s names, and that the rental income belonged to the plaintiff, except that the Father was entitled to take the equivalent of two rental units’ worth of rental income forces and the mother’s maintenance only (§§13-14).

11.The plaintiff suffered a depressive illness, although undiagnosed for some period, with various consequent physical ailments between 2008 and 2015.  As a result, the plaintiff left management of the Houses to the Father, who would regularly until end 2017 assure the plaintiff that everything was taken care of and everything would be left to him (§17).

12.The Father passed away on 8 March 2018 (§19).  The twin sisters obtained a grant of probate on a testamentary document dated 18 February 2008, said to be the Father’s last will and testament (“Will”), which simply provided that all of his property (including House 72) would be bequeathed to the twin daughters (§21).  When the plaintiff began to investigate the Father’s conduct and transactions, he discovered in May 2018 that the Father had sold the FF Shops and acquired the TSH Shop shortly thereafter, and also found a series of unauthorized withdrawals and missing rental income inferred from the various tenancy agreements (§§21-22).

13.From the above, it can be seen that the plaintiff essentially relies upon a common intention constructive trust (“CICT”) as the foundation for his claim, or alternatively a resulting trust, and the ability to trace.

14.Also relevant to the various claims are the pleaded facts relating to D1’s knowledge of the financial affairs between the plaintiff and the Father; that the TSH Shop was purchased free of mortgage specifically for the purpose of helping D1 start a business; that the Father had ceased working since 1992 and had no other source of income; that D1 was at all material times unemployed since 2003/2004 and did not have her own source of funds to contribute; the same solicitors assisting with the conveyancing also prepared and drew up the Will; the FF Shops appear to have been sold at an undervalue (§28).

C.  Applicable Principles

C.1  Common Intention Constructive Trusts

15.Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership.  The trustee holds the legal title on trust for the beneficiary: see, for example, Luo Xing Juan Angela v Estate of Hui Shui See Willy, deceased [2009] 12 HKCFAR 1 at §38.

16.Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters.  The trust is constituted by the three elements of (1) the common intention, (2) the claimant’s detrimental reliance on their common intention, and (3) the unconscionability of the property owner departing from it.

17.The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership.

18.Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties’ conduct.  As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

C.2  Constructive Trust in relation to Joint Bank Account

19.Where a sum of money belonging to one person is paid into a joint bank account, there is a presumption that the owner of that money does not make a gift of it to the account holder and accordingly the money is held on a resulting trust for the provider.  The presumption will be rebutted if the circumstances give rise to a presumption of advancement, or by evidence that the owner intended to transfer the beneficial interest to the account holders jointly, or as the case may be to the other account holder solely.  Further, it is for the trustee to give an account of his dealings and to establish that all withdrawals and payments were made with the consent of the other party: see, for example, Northall v Northall [2010] EWHC 1448 (Ch) at §8.

20.In Hong Kong it has been held that the general principle is that beneficial entitlement of funds in a joint account is to be determined by the common intention of the account holders: see Nanyang Commercial Bank Ltd v Personal Representative of Vannee Nativitat [2013] 2 HKLRD 749 at §29.  As was their pointed out, the parties’ intention overrides the survivorship clause, which is just a contractual arrangement between the bank and the joint account holders as to how to deal with the money in the joint account.  In drawing inferences of common intention, greater weight is to be given to the source of the funds in the joint account and the presumption of resulting trust in favour of the joint account holder who provided the funds than to the survivorship clause.

C.3  Dishonest Assistance/Knowing Receipt

21.It is established that there are four requirements that need to be proved to show a case of dishonest assistance. They are: (1) breach of trust or fiduciary duty by someone other than the defendant; (2) the defendant’s assistance; (3) dishonesty; and (4) resulting loss: see, for example, Hui Cheung Fai v Daiwa Development Limited (unreported, HCA 1734/2009, 8 April 2014, DHCJ Eugene Fung SC) at §130, quoting Grupo Torras SA v Al-Sabah [1999] CLC 1469 at 1664A-B.

22.Dishonesty is an objective standard.  The court applies the normally acceptable standards of honest conduct in determining whether the accessory is dishonest, and it is not necessary that the accessory considers that he is acting dishonestly.  But, the court does take into account the circumstances known to the accessory at the time he acted, his personal attributes such as his experience and intelligence, and the reason why he acted as he did.

23.The requisite state of mind for knowing receipt is whether there was trust property received in the circumstances where there was unconscionability on the part of the recipient of such trust property: see Thanakharn Kasokorn Thai Chamkat (Mahachon) v Akai Holdings Ltd (No 2) (2010) 13 HKCFAR 479 at §134.

C.4  Unjust Enrichment

24.The constituent elements for unjust enrichment were considered by the Court of Final Appeal in Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79 at §§66-68.

25.The Court approved a useful framework for approaching such claims as involving asking four questions: (1) was the defendant enriched? (2) was the enrichment at the plaintiff’s expense? (3) was the enrichment unjust? and (4) are any defences applicable?

C.5  Tracing of Proceeds

26.It is trite that where property is obtained by breach of fiduciary duty, equity imposes a constructive trust on the recipient so that the property is recoverable and traceable in equity.

27.In order to succeed in tracing his funds, the plaintiff must establish a clear link between his funds and the asset or money into which he seeks to trace.  The proprietary claim is not lost simply because the wrongdoer has mixed such funds with his own funds, and the onus is on the wrongdoer to establish that part of the mixed fund, and which part of the mixed fund, is his own property.

28.Tracing is the process of identifying a new asset as the substitute for the old.  But, it would not be accurate to speak of tracing one asset into another; rather the claimant traces the new asset because it was acquired in whole or in part with the original asset.  What is traced is not the physical asset itself, but the value inherent in it: see Foskett v Mc Keown [2001] 1 AC 102 at 127-128.

C.6  Default Judgment

29.As stated, the present application is made under Order 19 rule 7(1), because it in parts seeks declaratory relief.  The principles applicable on such applications are well-settled.

30.In such an application, the Court cannot receive any evidence, but must consider whether to give judgment according to the pleadings alone.  The statement of claim must show a proper case for the order the applicant seeks to obtain, and the Court shall give such judgment as the plaintiff appears entitled to on his statement of claim only, and only if the pleaded facts give rise to the relief sought.

31.However, the power to give such default judgment is discretionary.  In the exercise of that discretion, it is to be recognized that it is not the normal practice of the Court to make a declaration without trial.  This is not a legal or inflexible rule, but rather a rule of practice, which need not be followed when the plaintiff has a genuine need for declaratory relief and justice would not be done if such relief were denied.

32.Even on what might appear to be straightforward applications, the Court does not act as a ‘rubber-stamp’ merely because of the uncontested nature of the application.  In each case, it is necessary to consider whether the declaratory relief is properly made out on the pleading, and whether it is appropriate in the overall exercise of discretion for such relief to be granted without a trial.

33.In the exercise of the discretion, the Court will consider all relevant factors, including whether the plaintiff has established a strong and obvious case for proprietary relief on the face of its pleading, and where the claim is proprietary, whether there would be any prejudice to the plaintiff’s property and rights.  The importance of a claim to proprietary relief arises because of the distinction from a merely personal claim.  An order for payment, without more, would only put a plaintiff in the position of an unsecured judgment creditor.  But a declaration of a proprietary interest will secure that interest.

34.As to what constitutes a genuine need for relief in the context of an application for default judgment involving a claim upon CICT or resulting trust, Mr Deng has drawn my attention to two cases.

(1)  In Kan Kiu Chor v Fung Shu Fun (unreported, HCA 1902/2015, 6 April 2016, Recorder Cooney SC) a declaration on a CICT was granted on the basis that: (a) there was an acknowledgement of service; (b) the defendant did not contest the summons; (c) all the evidence in support of the plaintiff’s claim was in fact already before the Court and filed in previous affirmations; (d) large numbers of documents evidencing the plaintiff’s financing of the purchase of the property had been provided; and (e) there was a genuine need for declaratory relief and justice would not be done if relief was denied.

(2)  In Lung Ka Kuen v Chu Chun Yuk (unreported, HCA 2832/2015, 18 October 2016, DHCJ Marlene Ng) the Kan case was distinguished on the basis that: (a) there was no acknowledgement of service; (b) the claim concerned interest in land that would affect other parties’ rights, and where in the particular case the first defendant was bankrupt and the second defendant was the official receiver, representing the interests of third-party creditors, and who expressed reservations as to the claim; (c) while the court is to look only at the pleadings, there was evidence already before the Court in the Kan case which indicated the strength of the case; and (d) the declaration sought went beyond the scope in any event, including future events.

35.Mr Deng submits that the present case is closer to the circumstances of the Kan case.

D.  House 72

36.As before, references in brackets to paragraph numbers are to the material numbered paragraphs of the SOC.

37.The SOC pleads that in 1995 the plaintiff and the Father came to a common understanding relating to the construction and use of two Small Houses (“SH Common Intention”).  Under the SH Common Intention, the plaintiff would pay for the acquisition of land and construction of the Houses on the land; each house would be subdivided into three individual flats, which if they can be rented out would generate income for both the plaintiff and the Father; the rental income was to be deposited into a joint account in the name of both the plaintiff and the Father; the Father would supervise the construction of the Houses as he was retired; and all rental income from both Houses deposited into the joint account belonged to the plaintiff, but the Father would be entitled to withdraw up to 2 rental units’ worth of rental income for the Father and mother’s maintenance (§13).

38.A total of $2,544,780 was paid by the plaintiff out of his personal account to acquire the lands and to fund construction of the two Houses, each with identical layout and finish.  The detail of the payments, and the various costs are pleaded (§§14-15).

39.I think it can be noted that the pleading in the SOC does not say in terms – at least not at §§13-15 – that it was part of the SH Common Intention that the plaintiff was to be the beneficial owner of House 72.  But, I accept that the pleading as a whole – including at §§31-32 – makes that point clear.  Despite that, and pursuant to the Will, the plaintiff has now been deprived of both legal and beneficial interest to House 72.

40.Mr Deng submits that that was a breach of the SH Common Intention and/or the presumption of resulting trust.  As to the former, Mr Deng submits the following facts give rise to the claim of CICT:

(1)  First, the common intention that the plaintiff would be the beneficial owner of House 72 is clear on the pleaded case that the plaintiff paid the entire amount needed to buy the land and construct houses, and that the rental income was to be deposited into a joint account, from which the Father was entitled to withdraw only a fixed sum.

(2)  Secondly, there was detrimental reliance, as the plaintiff relied on the common intention and paid from his own personal accounts the entire sum of $2,544,780 to buy the land and construct the houses.

(3)  Thirdly, it is unconscionable for the Father to depart from that intention.  The Father did not contribute at all to the buying of land and construction, and the monies were never intended to be a gift, nor is there any presumption of advancement from son to father as a matter of law.

41.As to the alternative claim of resulting trust, Mr Deng submits there is the trite presumption that the parties intended for there to be a trust resulting from financial contributions, where there is no evidence of a contrary intention of the transferor at the time of the transfer.  In this case, the only relevant evidence which might rebut the presumption would be that the plaintiff intended to gift House 72 to the Father.  But that does not arise on the pleaded facts.

42.Mr Deng further submits that this is a strong and obvious case, not least because of the specific detail and particulars of the basis upon which the plaintiff made the financial contributions to acquire the land and construct the two Houses.  Those details plead the bank account numbers from which transfers were made by the plaintiff to the Father, and the amount and date of each transfer.  Those details are pleaded to have been extracted from existing and retrieved documentary records, including as to the individual elements for construction of the Houses.  Hence, the pleading identifies particular funds used for particular purposes, giving rise to the resulting trust or supporting the existence of the SH Common Intention, and the detrimental reliance on it.

43.As to the genuine need for relief, Mr Deng submits that:

(1)  Although there is no acknowledgement of service from either defendant, the various affirmations of service identify that both sisters live in House 72, next door to where the plaintiff lives at House 71.

(2)  There is an outstanding disclosure order, and unless order, against D1.

(3)  The relevant evidence has been filed in support of the interlocutory injunction application, and so is before the court.  Even if looking only at the pleading, the plaintiff has specifically pleaded that the particulars of payments were retrieved from documentary records that have been retrieved.

(4)  It would be an unnecessary use of Court time, and a waste of expenses, to order a trial.

(5)  The relief sought is proprietary relief, and there is no suggestion that any third-party interests apart from the Estate would be affected.  Nor is there any indication from the Estate (whose executors’ – D2’s – non-appearance is in breach of their fiduciary duties) that there are any creditors or persons other than the parties to these proceedings who would be affected by the proprietary relief sought.

(6)  The plaintiff is a victim of a long-term fraud by his sisters, who took advantage of his illness to strip him essentially of his property and life savings.

(7)  Each day without relief, the plaintiff is unable to recover his property, and unable to recover rental income or derive fruits from his property rights.  He is, therefore, severely prejudiced.

44.I accept that, on the pleaded case in the SOC, the plaintiff might be entitled to the relief sought by the Summons in relation to House 72.  The case seems to me to be strong, and I accept that there is a genuine need for relief, and that justice would not be done if the relief were denied to the plaintiff.  I also agree that, absent any attempt to contest the proceedings and where significant (if not all) relevant evidence has been filed, there is no benefit or purpose in requiring the claim relating to House 72 to go through the interlocutory process to a trial.

E.  The Unauthorized Withdrawals and Missing Rental Income

45.The pleaded case in the SOC is that the plaintiff is the legal and beneficial owner of House 71 and the beneficial owner of House 72 (§31).  It is also pleaded that, as a result, the plaintiff is entitled to all rental income generated from the Houses, subject to the Father’s entitlement to draw up to 2 rental units’ worth of rental income (or around $30,000 per month by 2018), defined as the “Authorized Amount” (§33(2)).

46.The Joint Rental Account from which the alleged Unauthorized Withdrawals were made, in the total of $2,300,000 from four separate occasions, are pleaded in specific detail (§36).  The Unauthorized Withdrawals were wrongful and in breach of the Father’s fiduciary duties owed to the plaintiff (§34) because they were made on top of and in addition to the Authorized Amount withdrawals, and there was no valid or reasonable explanation to withdraw the sums in such amounts and such frequency to benefit D1, who provided no consideration for those sums (§37).  Particulars of D1’s knowing receipt are pleaded (§38).  Particulars of the Missing Rental Income are set out, the calculations being made and cross-checked by comparison with tenancy agreements and the monies missing from the Rental Joint Account (§41). Particulars of D1’s knowing receipt of those sums, and her involvement in collecting rent but failing to deposit it into the Rental Joint Account are provided (§43).

47.Mr Deng submits that those pleaded facts support the causes of action relied upon to substantiate the plaintiff’s claims regarding the Unauthorized Withdrawals and the Missing Rental Income, being breach of trust against the Father, giving rise to a constructive trust for which D2 as the Estate is liable, knowing receipt by D1, and the unjust enrichment of D1.

48.I accept there is a strong case on the pleaded facts that, as the beneficial owner of both House 71 and House 72, the rental income generated from the tenancy agreements for those Houses also belonged to the plaintiff (except for the withdrawal of the Authorized Amount).  I am also satisfied that the pleaded facts establish the claim to dishonest assistance and knowing receipt, as well as unjust enrichment.  The specific details of the Unauthorised Withdrawals and knowing receipt have been pleaded (§§36, 38), as have the specific details of the basis on calculation of the Missing Rental Income and knowing receipt (§§41, 43, 45).

49.The two relevant sums pleaded in the SOC have been combined in the Summons, whereby the plaintiff seeks a liquidated sum totalling $3,521,100.  Relying on Tian Yao (Xiamen) Property Development Co Ltd v Right Margin Ltd [2016] 2 HKLRD 175 at §17, Mr Deng submits that the plaintiff’s claim for the sum is to a liquidated sum, even though it is reached through a series of arithmetical calculations from various sources.  So, he says it amounts to a liquidated claim for the purpose of Order 19 rule 2.

50.I disagree.  In that paragraph of the Right Margin case, Barma JA referred specifically to the notes in the White Book at §6/2/4 which identify that a liquidated demand is in the nature of the debt, i.e. a specific sum of money due and payable under or by virtue of a contract.  Its amount must either be already ascertained, or capable of being ascertained as a mere matter of arithmetic.  I do not think the claimed sum totalling $3,521,100 is a claim for a liquidated demand within Order 19 rule 2.  Clearly, it is not a claim in the nature of a debt in the form of a specific sum of money due and payable under or by virtue of a contract.  The amount claimed is not calculable by reference to arithmetic applied pursuant to any contract.  Further, a debt or liquidated demand does not extend, for the purposes of the rule, to unliquidated damages, whether in tort or in contract, even if the amount of such damages been named at a definite figure.

51.Indeed, I note that the pleaded consequences of the various breaches alleged in the SOC include that the plaintiff is entitled to: (a) an account of each of the Unauthorised Withdrawals and the Missing Rental Income; (b) restitution of each of the sums of $2,300,000 and $1,221,100; or (c) damages in lieu of restitution in the total sum of $3,521,100 (§46).  Further, in the prayer (g) to the SOC, the plaintiff asked for an order against each of the defendants for inspection and delivery up of their banking statements, records and documents, and all necessary accounts and enquiry for all profits, income and other interest derived from and/or received by them in relation to the Unauthorized Withdrawals and the Missing Rental Income, to enable the plaintiff to trace them and/or their traceable fruits (if any).  Prayers (h) and (i) seek damages for breach of fiduciary duties and/or for monies had received, and an order for payment out of all sums found due on the taking of the enquiry or account.  Those are not pleadings making a liquidated demand.

52.The Summons simply seeks an order that D1 and D2 pay the plaintiff the sum of $3,521,100, on the basis that it is a liquidated demand.  In the circumstances that I do not think it is a claim for a liquidated demand, I decline to give default judgment in relation to that sum. No alternative form of judgment in default has been sought by the Summons, and though it might be thought that an account could be ordered, that is only one of various alternate forms of relief sought and that might be ordered if appropriate.  Which remedy is apt seems to me a matter for trial.

F.  The FF Proceeds

53.As to the FF Shops, the pleaded facts giving rise to the resulting trust include that the common understanding between the plaintiff and the Father would be that, though the property would be held in the Father’s name, they would each contribute 50% of the purchase price and own the property in equal shares.  Therefore, the Father was to hold 50% on trust for the plaintiff, and the plaintiff’s share of rental income was to be applied to the Father and mother’s maintenance (§§7-8).

54.The detail of the assignments by which the two Shops were purchased are pleaded (§§9-10), as are the particulars of the contributions by a series of transfers from the plaintiff’s personal account to the Father totalling $2,341,694, made in reliance on the agreement (§11).  It is specifically pleaded that the plaintiff’s contributions were not intended as a gift to the Father (§23).

55.The plaintiff pleads that in late 2009 or early 2010 (and without the plaintiff’s knowledge, consent or authorization) the Father sold the FF Shops for $3,800,000 – a commercially inexplicable paper loss of $670,000 (when the shops were almost immediately sub-sold at the total of $4,370,000) (§24).  The proceeds were then applied in acquisition of the TSH Shop, purchased for $4,780,000 without a mortgage, with the Father and D1 as joint tenants, and which D1 thereafter used for operating a restaurant business and/or leasing to unknown third parties (§25).

56.On that basis, the plaintiff pleads a claim to 51.65% (alternatively 50%) beneficial ownership of the FF Shops, the breach of the Father’s duties as trustee, the sale at an undervalue, and the use of the proceeds to purchase the TSH Shop (§§26-27).  Particulars are given as to D1’s dishonest assistance and knowing receipt (§§28-29).

57.I accept those pleaded facts establish a claim in CICT or in resulting trust.  The common agreement is pleaded, and in any event there is no presumption of gift, so that ordinarily it would be presumed that the parties intended to own the property beneficially in equal shares.  I also accept the facts establish the claim in dishonest assistance, as well as that D1 was unjustly enriched at the expense of the plaintiff who lost all of what should have been his share of the FF Proceeds.

58.Mr Deng submits that tracing of the proceeds is appropriate, and that where the Father sold the FF Shops without authorisation, he became a constructive trustee not over 50% of $3,800,000 (because that was an undervalue) but over the entire original sum paid by the plaintiff of $2,351,694.  But, I do not think that figure can be correct, even on the basis of the immediate sub-sales at an account totalling less than double that figure.  Whilst there may be some argument about valuation, and alleged undervaluation, I do not think it would be right proceed on the basis of the originally injected sum.

59.Mr Deng submits that the court is not being asked to make a declaration in relationship to ownership of property, but to trace the proceeds from the FF Shops into the TSH Shop, and to seek a liquidated sum of damages based on a fixed sum or equitable compensation.  As he puts it, all that the plaintiff is seeking, in order to ensure that justice can be done, is liquidated damages either (1) in the form of a fixed liquidated sum of $2,257,105 (calculated by reference to the plaintiff’s share and percentage value decrease by reference to the actual sale price of $4,370,000 and not the undervalue price), or (2) equitable compensation equivalent to 51.65% of the FF Proceeds.

60.I do not think the figures and calculations are straightforward as Mr Deng submits.  Further, for similar reasons as I have given in relation to other matters above, I do not think those are claims for liquidated demands.  No alternative form of relief for judgment in default has been sought by the Summons.  Again, therefore, I decline to give default judgment in that respect.

G.  Result

61.On the above analysis, I accept that these are appropriate circumstances in which to give the plaintiff liberty to enter judgment against D1 and D2 for his proprietary claims for relief relating to House 72 itself.  I, therefore, grant and make orders as follows:

(1)  A Declaration that Cheung Hung Kwong, deceased (“Deceased”) was and the 2^nd defendant has been holding on trust for the sole benefit of the plaintiff the landed property known as House No. 72 Tai Shui Hang, Shatin, New Territories on Lot No. 935 in Demarcation District No. 196 (“House 72”) and all the traceable fruits and proceeds thereof.

(2)  An Order that the Deceased and D2 be removed as trustee of House 72.

(3)  The entire legal and beneficial estate, title, rights, interests and shares of and in House 72 be vested in the plaintiff absolutely.

(4)  The 1^st defendant and the 2^nd defendant do deliver up to the plaintiff forthwith vacant possession of House 72.

(5)  The 1^st defendant and the 2^nd defendant do deliver to the plaintiff forthwith all title documents of House 72.

(6)  Stamp duty payable, if any, for and incidental to the Order made herein be borne and paid by the 1^st defendant and the 2^nd defendant.

(7)  The 1^st defendant and the 2^nd defendant do pay the plaintiff mesne profits to be assessed from 8 March 2018 until the date of delivery up vacant possession of House 72 to the plaintiff.

62.On the claims relating to the Unauthorised Withdrawals, the Missing Rental Income and the FF Proceeds, I direct the alternative relief sought in the Summons, namely that the action be listed for trial of those issues and the Plaintiff be at liberty to proceed to trial notwithstanding the default of the defendants in serving a defence.  I will also make the following additional directions, broadly as sought by the Summons to deal with that trial and the assessment of the mesne profits:

(1)  The parties shall within 14 days file and serve their List of Documents, with inspection 7 days thereafter.  Any party failing to serve a List of Documents shall be deemed to have elected not to add juice documentary evidence at trial or for the assessment.

(2)  The parties shall within 42 days lodge and serve their respective expert reports on land valuation for the assessment of (1) the current market value of the TSH Shop, and (2) the market rental of House 72 from 8 March 2018 up to the date of assessment.

(3)  The parties shall within 28 days of service of the expert report(s) file and serve their respective witness statements of fact.  Each witness statement shall be accompanied by a statement of truth and shall stand as evidence in chief unless the trial or assessment Judge otherwise directs.  Any party failing to serve such witness statement of fact shall be deemed to have elected not to adduce factual evidence in either oral or written form at trial or assessment.

(4)  Liberty to apply.

63.Where the plaintiff has obtained a substantial benefit on his proprietary claim to House 72, it seems to me that he is entitled to the costs of the Summons (notwithstanding that some other aspects have been dealt with by reference to a trial/assessment).  Therefore, I order the 1^st and 2^nd defendants to be jointly and severally liable for the plaintiff’s costs of the Summons.

64.For the avoidance of any doubt, I continue my previous interlocutory injunction orders until the trial/assessment or further order (save that the defendants are of course at liberty to act in compliance with the declarations and orders made above).

Mr Earl Deng, instructed by Liu, Chan & Lam, for the plaintiff

The 1^st and 2^nd defendants were not represented and did not appear