Tang Lui Leo v. Wong Elaine

HCA 1433/2012

[2020] HKCFI 3087

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1433 OF 2012

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Before: Deputy High Court Judge Burns SC in Court

Date of Hearing: 12,14-16 October; 2,6 November 2020

Date of Decision:  22 December 2020

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JUDGMENT

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INTRODUCTION AND BACKGROUND

1.This action, which was commenced by Writ issued on 13 August 2012, concerns a dispute over the beneficial ownership of Flat D, 53rd Floor, Tower 7, Banyan Garden, 863 Lai Chi Kok Road, Kowloon (“the Property”).

2.By an assignment dated 30 September 2010, the Property was conveyed into the sole name of the Plaintiff (“P”). The Purchase price for the Property, as well as the stamp duty and legal costs associated with the transfer of the Property to P were paid by P’s grandmother. The Property was intended as a gift to P.

3.P has resided in the Property from 30 September 2010 to date except for a period from about mid February to early March 2012.

4.By an assignment dated 30 May 2011, P assigned the Property to the Defendant (“D”), with whom he had begun a close intimate relationship in late December 2010 (“the Assignment”). It is not disputed that, despite the fact that the consideration for the assignment was stated in the Deed of Assignment as being HK$3,980,000, there was in fact no sale and no payment was made by D.

5.D paid the legal costs and disbursements of the solicitors she appointed to act for her in respect of the Assignment (inclusive of stamp duty), amounting to HK$95,600. However, on 15 December 2011, the Inland Revenue Department notified D by letter that the Commissioner for Rating and Valuation was of the view that, as at 30 May 2011, the value of the Property was HK$5,350,000, with a chargeable stamp duty of HK$160,500. As D failed to make payment of the shortfall, amounting to HK$70,950, P paid this sum.

6.In June 2011, D moved into the Property to live with P and terminated the tenancy of the flat she previously occupied.

7.At all material times when P and D were co-habiting in the Property, the utilities, rates and management expenses were discharged by P.

8.The relationship between P and D turned sour and came to an end in or about February 2012 when D moved out of the Property.

P’S PLEADED CASE

9.P’s case, as pleaded in the Statement of Claim filed on 3 October 2012, was that, by reason of the fact that no consideration was paid for the Assignment, the Property has at all times been held on constructive and/or resulting trust for P. However, by amendment to the Statement of Claim, made on 10 December 2012, the following pleas were added:

“In or around April/May 2011, the Defendant informed the Plaintiff that she would be publishing a portrait album later and as a result she would be attracting media attention. She was concerned that the media would report her as impoverished and dependent on men, in particular when she was only recently released from jail in Mainland China for drug-related offences. The Defendant requested the Plaintiff to transfer legal title to the Property to her, so as to avoid adverse media report by appearing to be self-dependent.

The Plaintiff acceded to the Defendant’s said request, on the common understanding between the parties that:-

(1) The Defendant would transfer the legal title to the Property back to the Plaintiff in a certain period after the publication of the portrait album, when the Defendant would attract less media attention, or after the parties broke up;

(2) The Plaintiff would continue to live in the Property after the transfer of the legal title;

(3) The Defendant would not sell and would not be entitled to sell the Property during the period when she held legal title to the Property; and

(4) The title deeds of the Property would be kept by the Plaintiff.

In the premises, it has always been the common intention of the Plaintiff and the Defendant that the Plaintiff would retain his entire beneficial interest in the Property, despite the Plaintiff’s transfer of legal title to the Property to the Defendant.......

In the circumstances, further and/or in the alternative to the common intention as pleaded .....above, the Plaintiff avers that it has always been the un-rebutted presumed intention of the Plaintiff and the Defendant that the Plaintiff would retain his entire beneficial interest in the Property.”

10.P’s prayer for relief, as set out in the Amended Statement of Claim is for:

“ (1) A declaration that the Plaintiff is the sole beneficial owner of the Property;

(2) Alternatively, a declaration that the Plaintiff is a beneficial owner in such share as this Honourable Court deems fair;

(3) A declaration that the Defendant holds her legal title in the Property on trust for the Plaintiff absolutely;

(4) Alternatively, a declaration that the Defendant holds such share of the Property as this Honourable Court deems fair on trust for the Plaintiff absolutely;

(5) An order that the Defendant do forthwith assign or vest her legal title in such share of the Property to or in the Plaintiff as this Honourable Court deems fair, and an order directing the Defendant to execute all necessary instruments for that purpose;

(6) An injunction restraining the Defendant whether by herself, her servants or agents or otherwise howsoever from disposing of selling, assigning, transferring,charging or otherwise dealing with the Property;

(7) Interest

(8) Costs, and

(9) Further or other relief.”

D’S PLEADED CASE

11.It is D’s pleaded case that, in or about May 2011, P proposed that P and D should marry in 12 months time, a proposal which D alleged she accepted and that, shortly thereafter, she moved in to the Property which, subsequently, she and P co-habited, effectively, so D alleges, as man and wife.

12.D further alleges that, on or about 18 October 2011, she conceived a child with P and that P proposed to marry D immediately, notwithstanding which the proposed marriage was not approved by P’s family and that, as a result, P terminated the alleged engagement.

13.D denies that the Property was assigned to her in the circumstances which P alleges. It is her case that D gifted the Property to her in contemplation of marriage. In so far as necessary she relies on the presumption of advancement.

14.It is also D’s case that P is estopped from claiming any title, estate or interest in the Property on the basis that (a) in reliance on P’s promise to gift the Property to her, she allegedly accepted P’s proposal of marriage and agreed to co-habit with P in the Property as man and wife and (b) D allegedly acted to her detriment in paying the legal costs and stamp duty in respect of the assignment to her of the Property.

15.By counterclaim, D alleges that in August 2012 P wrongfully entered and has since occupied the Property and prevented D from entering using or enjoying it, on the basis of which D claims damages or mesne profits.

P’S REPLY AND DEFENCE TO COUNTERCLAIM

16.In P’s Reply, P admits that he and D did co-habit the Property but denies they did so as husband and wife.

17.P alleges that, in respect of the assignment by him of the Property to D, he and D shared a common understanding that:

17.1    D would transfer the legal title to the Property back to P (a) after the publication of D’s portrait album at such time when D attracted less media attention or (b) after the parties broke up;

17.2   P would continue to live in the Property;

17.3   D would not sell and would not be entitled to sell the Property during the time she held legal title thereto, and

17.4   the title deeds to the Property would be kept by P.

18.P alleges that if the consideration for the Assignment was the marriage which D claims was allegedly intended or proposed (which he expressly denies), such consideration has totally failed.

19.P avers that the presumption of advancement has no application given the nature and duration of the relationship between the parties and/or is rebutted by the evidence as to the parties’ intentions as regards the transfer of the Property to D.

20.P admits that, after being informed by D of her pregnancy, which he said was not until 25 December 2011, he was prepared to marry P, subject however to D having a medical check up in Hong Kong (which D declined to undergo) and confirmation that he was the father. Save as aforesaid D denied ever having proposed marriage to D.

21.P denies that his family had disapproved of any proposed marriage with D.

APPLICABLE LEGAL PRINCIPLES

Gratuitous transfer of property - Actual Intention

22.Where there is a dispute over the beneficial interest in the property which is the subject of a gratuitous transfer, the court’s task is to discern the intention behind the transfer.  The relevant state of mind is the transferor’s mind at the time of the transfer. In Lavelle v Lavelle & Ors [2004] 2 FCR 418 Lord Phillips MR, at §§13 & 14, gave guidance for identifying the intention of the transferor:

“[13] Where one person, A, transfers the legal title of a property that he owns or purchases to another, B, without receipt of any consideration, the effect will depend on his intention. If he intends to transfer the beneficial interest in the property to B, the transaction will take effect as a gift and A will lose all interest in the property. If he intends to retain the beneficial interest for himself, B will take the legal interest but will hold the property in trust for A.

[14]   Normally there will be evidence of the intention with which a transfer is made.  Where there is not, the law applies presumptions.  Where there is no close relationship between A and B, there will be a presumption that A does not intend to part with the beneficial interest in the property and B will take the legal title under a resulting trust for A.  Where, however, there is a close relationship between A and B, such as father and child, a presumption of advancement will apply.  The implication will be that A intended to give the beneficial interest in the property to B and the transaction will take effect accordingly.”

23.If there is evidence as to the actual intention of the transferor at the time of the transfer, the legal presumptions will not apply. In Yuen Yat Shan Fiona v Sit Hin Kau [2005] 4 HKC 170, at §20, Tang JA (as he then was) said:

“… when there is sufficient evidence on actual intention at the time of the transaction, there is no room for the operation of presumption of resulting trust, see Drake v Whipp [1996] 1 FLR 826.”

24.The burden of proof rests on the person who asserts that the equitable right of the property is inconsistent with the legal title.  In Lee Tso Fong v Kwok Wai Sun & Anor [2008] 4 HKC 36, Deputy Judge To (as he then was) succinctly summarized the rule as to the burden of proof (at §23):

“Prima facie, beneficial ownership goes hand in hand with legal ownership. If a plaintiff seeks to divorce the beneficial ownership from legal ownership and to claim the beneficial ownership in the property which he purchased and transferred to the name of another, he must bear the burden of proving his equitable right which is inconsistent with the undisputed legal title. He may discharge that burden by proving an express trust. Or, he may be assisted by the presumption of resulting trust by proving that he paid the purchase price of the property. But, like all presumptions, the presumption of resulting trust operates only in the absence of evidence to the contrary. Once this presumption is raised, the party seeking to challenge it bears the evidential, but not legal burden, of adducing evidence to displace the presumption of resulting trust. That party may adduce evidence of a contrary common intention of making a gift. If that evidence is insufficient to displace the presumption of resulting trust, the presumption prevails. But if that evidence is sufficient to displace the presumption of resulting trust, the party who has the legal burden will fail unless he can prove the resulting trust.”

25.In search for the intention of the transferor, the acts and declarations of the parties done and made before or at the time of the transfer or so immediately after it as to constitute a part of the transaction are admissible in evidence for or against the party who did that act or made that declaration.  Subsequent conduct and declaration may be admissible as evidence but subject to the weight to be attached by the court (see Law Pak Fun & Anor v Tai Lee Fat Int’l Ltd & Ors [2015] 6 HKC 82, at 92-93 §§37-41; Lavelle v Lavelle [2004] EWCA Civ 223 at §19; cf Shephard v Cartwright [1955] AC 431, at 445).

26.Subsequent statements made by the transferor with respect to his intention of the transfer should be approached with caution.  In Lavelle v Lavelle, Lord Phillips MR said (at §19):

“In these cases equity searches for the subjective intention of the transferor. It seems to me that it is not satisfactory to apply rigid rules of law to the evidence that is admissible to rebut the presumption of advancement. Plainly, self-serving statements or conduct of a transferor, who may long after the transaction be regretting earlier generosity, carry little or no weight.”

See also Suen Shu Tai v Tam Fung Tai, HCA 1466/2010, 15.8.2013, unrep, at §51, where Mr. Recorder H. Wong SC also sounded a note of caution against self-serving statement of the transferor.

Presumed intention

27.Presumptions of resulting trust and advancement are evidential tools for searching for the ‘presumed’ intention of the transferor, in the absence of evidence of actual intention of the transferor (see Watson v Smith [1998] 3 HKC 462, per Godfrey JA at 464G).

28.In the absence of evidence of actual intention, the presumption of resulting trust operates where there is a gratuitous transfer in favour of the transferor.  However, it can be rebutted by circumstances which are in evidence (see Dyer v Dyer (1788) 2 Cox Eq. Cas. 92, at pp. 93-93).

29.The presumption of advancement arises from the special relationship between the transferor and the transferee. 

30.In Snell’ Equity, 34th Edition, §25-008, it is stated as follows:

“The formal presumption of advancement does not apply to transactions between an unmarried couple who live together. But aside from the formal presumption, there is perhaps no compelling reason why an intention to make a gift should not be inferred if the parties are in a lifelong relationship similar to a formal marriage.”

31.On the other hand, in Cheung Pui Yuen v Worldcup Investment Inc (2009) 12 HKCFAR 31, at §§6-9, Litton NPJ said the weight of presumption of advancement varied with the circumstances of the case and the real question is whether the relationship between the transferor and the transferee made it more probable than not that a gift was intended:

“6. The presumption of advancement is nothing more than an evidential tool; its weight varies with the circumstances of the case. English case law over the past half-century indicates that the presumption, in a family context, now carries less weight than it did in earlier times. …

7. But, as Cons V-P observed in Re Mak Woon Shui [1992] 2 HKC 144, at p. 149, the social changes which influenced their Lordships in England do not have the same force in Hong Kong; the presumption of advancement in the local context is not so easily displaced.

8. In the present case, Le Pichon JA (at para. 105) says that because Madam Chin had not proved that she was either ‘wife’ or ‘concubine’ was ‘within the category of persons in whose favour a presumption of advancement would arise.’ In my respectful view this mis-states the position. The legal pigeon-hole into which a party is put is not determinative of the issue.

9. The reality in the present case is that since 1977, when Madam Lim Bee died, Madam Chin was the testator’s only ‘wife’.  By the time the Doran share was issued, they had lived together in the same household as man and wife for some forty years.  Le Pichon JA categorized the relationship between the testator and Madam Chin as a ‘de facto matrimonial relationship’.  Assuming this to be an accurate categorization, it does not conclude the matter.  The true question is whether such a relationship makes it more probable than not that a gift was intended: see observations to this effect in Calverley v Green (1984) 155 CLR 242 at pp. 250-251.  …”

32.In Moate v Moate [1948] 2 All ER 486, Jenkins J held that the presumption of advancement applied to the relationship of intending husband and wife and said at p. 487G-H:

“I can see no practical distinction for this purpose between a transfer by an intending husband to an intending wife and a transfer as between a husband and a wife. The reason for presuming advancement was stronger where the gift is made in contemplation of the marriage before it is actually solemnized than it is where the transaction is post-nuptial. It seems to me the presumption would be, in the former case, that the intending husband is making a gift to the lady in consideration of the marriage, a gift by way of wedding present which he intends to take effect in her favour beneficially provided the marriage is duly solemnized.’

33.S. 24 Law Amendment and Reform (Consolidation) Ordinance (Cap. 23)(“LARCO”) provides that in a property dispute between engaged couples, their position will be the same as husbands and wives. 

34.In Mossop v Mossop [1988] 2 All ER 202, Balcombe LJ construed s. 2(1) of the Law Reform (Miscellaneous Provisions) Act 1970 (equivalent to s. 24(1) LARCO) as having effect to apply any rule of law which was applicable to husbands and wives, including the presumption of advancement, to engaged couples (at 204h):

“Section 2(1) may be difficult to construe in certain respects and certainly its effect may be somewhat limited. Nevertheless, it seems to me that it has a perfectly sensible meaning. Any rule of law relating to the rights of husbands and wives in relation to property in which either or both has or have a beneficial interest would include amongst others the rule of law that, in the case of a property transfer to a wife by a husband, there is a presumption of advancement so that no resulting trust would arise.”

Sir Frederick Lawton, at 206d, also said:

“It seems to me, having regard to the terms of s2(1), that what Parliament intended was that after an engagement had terminated the formerly engaged couple should be in the same position as a husband and wife would have been in had they had a dispute about the ownership of property.”

Proprietary estoppel

35.There are 3 essential elements of proprietary estoppel: (a) a representation or assurance made by the representor to the representee; (b) reliance on it by the representee; and (c) detriment to the representee.  In Thorner v Major [2009] 1 WLR 776, at 786 §29, Lord Walker said:

“… most scholars agree that the doctrine is based on three main elements, although they express them in slightly different terms: a representation or assurance made to the claimant; reliance on it by the claimant; and detriment to the claimant in consequence of his (reasonable) reliance: …”

36.The essence of the doctrine of proprietary estoppel is the unconscionable conduct of the representor in inducing the representee to act on his assurance/representation and then withdrawing from his promise.  The Court shall undertake a broad inquiry as to unconscionability of the representor in considering whether a case of proprietary estoppel was made out.  Robert Walker LJ in Gillett v Holt [2001] Ch 210, at 225 said:

“… the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments. … the quality of the relevant assurances may influence the issue of reliance, that reliance and detriment are often intertwined, and that whether there is a distinct need for a “mutual understanding” may depend on how the other elements are formulated and understood.  Moreover the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine.  In the end the court must look at the matter in the round.”

37.The doctrine looks backwards and asks whether in the circumstances which had actually happened, it would be unconscionable for a promise not to be kept.  In Walton v Walton [1994] CA Transcript No. 479, at §21, Hoffmann LJ said (cited by Lord Walker in Thorner v Major at §57):

“… equitable estoppel … does not look forward into the future and guess what might happen. It looks backwards from the moment when the promise falls due to be performed and asks whether, in the circumstances which have actually happened, it would be unconscionable for the promise not to be kept.”

38.Change of position of the representee would operate as detriment.  The detriment should be substantial and whether it was substantial should be tested by the unconscionability of the representor.  The relevant time for assessment of detriment is the time when the representor goes back on his promise.  In Gillett v Holt, Robert Walker LJ said (at pp. 232-233):

“The overwhelming weight of authority shows that detriment is required. But the authorities also show that it is not a narrow or technical concept. The detriment need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial. The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances.

There are some helpful observations about the requirement for detriment in the judgment of Slade LJ in Jones v Watkins 26 November 1987. There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded – that is, again, the essential test of unconscionability.

As authority for the second of these observations Slade LJ referred to Spencer Bower & Turner on Estoppel by Representation, 3^rd ed (1977), p 110…:

‘One condition appears always to be indispensable. That other must have so acted or abstained from acting upon the footing of the state of affairs assumed that he would suffer a detriment if the opposite party were afterwards allowed to set up rights against him inconsistent with the assumption. In stating this essential condition, particularly where the estoppel flows from representation it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. Although substantially such a statement is correct and leads to no misunderstanding, it does not bring out clearly the basal purpose of the doctrine. That purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong, and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party the consequence would be to make his original act or failure to act a source of prejudice.’

This passage was not directed specifically to proprietary estoppel, but Slade LJ was right, in my respectful view, to treat it as applicable to proprietary estoppel as well as to other forms of estoppel.”

39.In order to establish the casual link between the representation/assurance and detriment, it is not necessary to show that “but for” the representation/assurance, the representee would not have acted in the way she did.  It is sufficient to show that the representation/assurance is an inducement which could be proved by inference.  In Hong Kong Hua Qiao Co Ltd v Cham Ka Tai [2015] 4 HKC 167, at 175 §30, Kwan JA said:

“Mr Kwong correctly pointed out that the ‘but for’ test propounded by Mr Wong is wrong in law. It suffices so long as the Deceased’s promises were an inducement. It is not necessary to establish but for the promises, Madam Cham would not have acted in the way she did. The correct legal position is as stated by Balcombe LJ in Wayling v Jones (1993) 69 P&CR 170 at 173:

‘(2) The promises relied upon do not have to be the sole inducement for the conduct: it is sufficient if they are an inducement – Amalgamated Property Co v Texas Bank [1982] QB 84 at 104-105.

(3) Once it has been established that promises were made, and that there has been conduct by the plaintiff of such a nature that inducement may be inferred then the burden of proof shifts to the defendants to establish that he did not rely on the promises – Greasley v Cooke [1986] 1 WLR 1306; Grant v Edwards [1986] Ch 638 at 657.’”

40.The remedy for proprietary estoppel was to look for the minimum equity to do justice but it does not mean that the relief is insignificant.  The court has a wide discretion to give any relief which is necessary to prevent unconscionable conduct of the representor.  Where the equitable claim arises from a clear-cut promise, the natural response of the court is to compel the representor to fulfil the promise, provided that the relief is not disproportionate to the detriment.  In Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1, Ribeiro PJ said (at 26 §§67; 70-72):

“67. As previously noted, a promissory estoppel similarly gives rise to such a personal or ‘mere’ equity. The disparaging-sounding epithet ‘mere’ is used, as the passage from Lord Walker’s judgment shows, to indicate that no proprietary interest accrues to the claimant. It certainly does not mean that the relief which may be granted is insignificant.

…

70. As Lord Walker indicated, the court does not grant relief beyond the minimum necessary to do justice, although his Lordship had noted in an earlier decision that this ‘does not require the court to be constitutionally parsimonious’ although ‘it does implicitly recognize that the court must also do justice to the defendant’. Where the equity is raised by operation of the doctrine of promissory estoppel in relation to a clear-cut promise that can readily be given effect, ‘the court’s natural response is to fulfill the claimant’s expectations.’ But this is subject to the remedy not being disproportionate to the detriment which its purpose is to avoid. If realising the claimant’s expectations in full would result in such a disproportion, the court will seek to satisfy the equity in a more limited way, while not abandon its attempt to fulfil those expectations to an appropriate degree.

71. In formulating its decree, the court has a wide discretion to satisfy the equity raised in an effective way, applying the principles mentioned above. Practical considerations involving such matters as the administrative feasibility and cost of the measures ordered; their fiscal consequences; the need in some cases for a ‘clean break’ between antagonistic parties, and so forth, are properly taken into account.

72. While some differences have developed as between Australian and English jurisprudence in relation to the constituents of certain estoppels, with the Hong Kong courts presently inclining towards the English approach, there is no divergence among the jurisdictions regarding the court’s wide and flexible discretion to grant appropriate relief. …”

41.Luo Xing Juan was a case concerning the doctrine of promissory estoppel which no proprietary interest could have accrued to the plaintiff.  However, as Ribeiro PJ put it at §54, there was no real difference between the concepts of promissory estoppel and proprietary estoppel:

“The doctrine of estoppel continues to represent a developing area of the law and aspects of the applicable principles are subject to debate. Thus, there is discussion as to the extent to which promissory estoppel and proprietary estoppel overlap, with a body of opinion inclining towards the view that there is no real difference between them. In the present context, proprietary estoppel is inapplicable because the deceased, not being the owner of the Property, was not in a position to confer on Miss Luo a proprietary interest in it. However, as Maharaj v Chand establishes, this does not prevent recourse to promissory estoppel. The doctrines therefore differ at least to the extent. However, it is at the same time clear that many of the constituent elements of the two forms of estoppel are shared and where that is so, authorities on proprietary estoppel provide guidance in cases involving promissory estoppel.”

Trespass to land

42.A plaintiff is entitled to claim immediate possession of the land by the strength of her own title (see Clerk & Lindsell on Tort, 22^nd ed, para. 19-73).

43.Damages for trespass to land is assessed by reference to a hypothetical contract that the trespasser would have had to pay to do the acts complained of had he negotiated with the landowner for permission to do them (see Clerk & Lindsell on Tort, 21^st ed, para. 19-66).

44.Aggravated damages may be awarded if the defendant’s act complained of accompanied by aggravating features.  The award is to compensate the victim for her suffering in her feelings, dignity and pride, mental discomfort and distress arising from the wrongdoer’s act.  In Lau Oi Kiu v Man Chun Shing & Anor [2015] 4 HKC 73, Deputy High Court Judge Lam SC said (at §105):

“Aggravated damages are compensatory in nature; they are awarded to compensate the victim for his suffering in his feelings, dignity and pride, for his mental discomfort and distress arising from the circumstances in which the wrong was committed (Allan v Ng & Co (a firm) [2012] 2 HKC 266; [2012] 2 HKCLRD 160 at 185, §83, per Fok JA (as he then was); Wong Kwai Fun v Li Fung [1994] 1 HKC 549 at 581E, per Woo J (as he then was). Aggravated damages may be awarded for a trespass (Clerk, §19-71 at p 1381). In Horsford v Bird [2006] UKPC 3 at §14, the Privy Council held that:

‘… It is well established that trespass to land accompanied by high-handed, insulting or oppressive conduct may warrant an award of aggravated damages.  The award in such a case is to compensate the plaintiff for the distress and injury to his feelings caused by the conduct in question.’”

The evidence

45.The starting point in seeking to ascertain the parties’ intentions vis a vis the Assignment is late December 2010 when, P and D agree, they established their relationship of boyfriend and girlfriend and their intimate relationship began, from which point, until about June 2011, P was in the habit of spending several nights a week at the flat which D occupied as a tenant.

46.It was P’s evidence that at this time, D was employed as a model earning between HK$30,000 and HK$40,000 per month. According to her evidence she then had a portfolio of shareholdings valued at about HK$1 million and also a flat in Macau which was rented out (about which P says he knew nothing until seeing D’s 1st witness statement filed in these proceedings). Notwithstanding all of this, the rental deposit for D’s Hong Kong flat, as well as the monthly rent from December 2010 to March 2011, amounting to HK$16,000 per month, was paid by a person by the name of Timothy Choy who she described as her “god brother” (“D’s God Brother”).

47.As D at all material times knew, P came from a wealthy family.  His grandfather had been the chairman of a Hong Kong publicly listed company; D believed that he was supported financially by his family and apart from the Property which had been gifted to him by his grandmother (in December 2010), he owned a property in the United States. P was unemployed during the period of his relationship with D, albeit he dabbled in the sourcing of spare parts for motor vehicles.

48.It is common ground that in early 2011 D herself and/or the company she worked for was planning the publication of a photo album for D. According to D, she personally arranged for photographs to be taken of her at a cost of HK$300,000, half of which, she says, she paid and the other half, she says, was paid by D’s God Brother. It was P’s evidence that D told him of the plan to publish a photo album in January 2011 (albeit that in the Amended Statement of Claim this was said to have occurred in April or May 2011) and that she needed to spend time in looking for sponsors.

49.According to D’s evidence, from about the end of January 2011 until early February 2011, she was detained in the Mainland on drugs charges and her relationship with P grew stronger as a result of P’s response to D’s request for help which was made by text message on 4 February 2011. According to that message, D had been placed on remand for 30 days. it is P’s case that D was not released until April 2011.

50.It is also common ground that, in about March 2011, D asked P to pay the rent of her flat which had previously been paid by D’s God Brother. In her oral evidence D made it plain that she considered that this was the responsibility of a boy friend and that her own income should be reserved for buying clothes and other personal items. P says that initially he agreed to pay D’s rent and did pay the rent for the months of April, May and June 2011. P however told D that he could not afford to pay D’s rent indefinitely and, so it was, that P suggested that D should move in with him at the Property.

51.It was at this point (April 2011), no more than 4 months after P and D had struck up a relationship of boyfriend and girlfriend that, according to P, D told him that, if she was to live with him in the Property, P should first transfer the Property to her. This was the way P put it in his 1st witness statement which stood as his evidence in chief in this trial:

“Shortly after my offer, in or around late April 2011, [D] suggested that if she were to live with me, I should transfer the title to the Property to her. She told me that her photo album would be published soon, and she would be attracting media attention. She did not want to be viewed as an ‘easy’ or debauched girl, who just dated a man in return for financial support, if the paparazzi found out that she was living with me in my Property, in particular when she was only recently released from jail in Zhuhai. She said if she appeared to hold the Property, she would not be judged by the media. In response, I told her that My grandmother bought the Property for me, and she expected me to keep the Property and raise my family there and settle down, and I have promised My grandmother that I would not sell the Property for any purposes.

[D] reassured me that she was not asking me to sell the Property for money, but only to temporarily transfer the Property to her.  The Defendant reassured me that she was not asking me to give the Property to her as a gift.  She said that if we were not longer together as a couple, or when the media has become less interested in her after the publication of her photo album, she would return the Property to me.”

52.In a supplemental witness statement P added the following explanation:

“At the time, the Defendant was still troubled by her experience while in custody of the Mainland Authorities, and was in constant fear of people not holding her in high regard or being unable to command any respect from the public, especially if it became common knowledge that she was involved in a dangerous drugs case. The Defendant explained that once her photo album is published, the local paparazzi would look into her background and publish any gossip that they could find. The Defendant was worried that she would be depicted as a drug addict and a ‘gold-digger’. The Defendant was of the view that having title in property would give her a positive image, that she was successful in her own right, and not just an attractive woman who would rely on men for money.

I was unable to provide the Defendant with the same sort of assistance that Michael did for Phoebe.  So when the Defendant asked for the legal title of the Flat to boost her image, I felt pressured to agree and did so reluctantly.  Because the transfer of the flat was basically a ‘loan’ to the Defendant, I refused to pay for any of the expenses associated with the transfer.  As such, the Defendant paid the stamp duty and all legal costs, as it was her responsibility.  If the flat were actually a gift to the Defendant, borne out of my love for her and in contemplation of marriage as alleged, then I would have paid the associated costs – especially if I am as rich as alleged by the Defendant in her first witness statement.”

53.In cross examination, P acknowledged that, at first, he did not understand how or on what basis D thought that the transfer of the Property to D would or could ease the concerns which she said she had but that eventually he agreed to the proposal on terms that the Property would be returned to him after the publication of the Photo Album and after the concerns which D said she had had diminished.

54.D’s account of the circumstances in which P agreed to assign the Property to her is markedly different. She denied that the assignment was in any way connected with her plans as regards the photo album and in that respect, rejected the notion that the assignment to her of the Property would have assisted her vis a vis the media. D’s evidence was that in or about early May 2011, P made a proposal of marriage to her and that “...in order to prove his sincerity to marry me and to make me feel more secured, he initiated the proposal to gift [the Property] to me.” According to D, she accepted this offer both of marriage and the alleged gift of the Property and it was agreed that, because of D’s pre-occupation with her photo album, the marriage would be postponed for one year.

55.P denies that he proposed marriage either in May 2011 or at any other time but stated in evidence that, on a date which he was unable to recall, D asked him if he would marry him. According to P’s evidence, P responded by saying that, as D had only recently been released from Jail in Zhuhai, and he and D had only just started dating, he and D should get to know each other better before discussing marriage.  On any basis, P denies that the Assignment was made in contemplation of marriage.

56.It is common ground that P left the formalities with regard to the assignment of the Property to D, the common understanding being that the costs involved would be borne by D.  On this basis, D instructed a firm of solicitors to act for her in respect of the transaction and, in turn, that firm arranged for another firm of solicitors to act for P.  According to D, although she told the firm acting for her that the proposed transfer of the Property to her was intended as a gift, she was advised that it should be structured as a sale and purchase, with the stated consideration being the same as that stated in the assignment of the Property to P.  For the purposes of this transaction, P delivered the title deeds to the Property to D’s solicitors.  It was D’s evidence that, following the completion of the Assignment of the Property to her, she was given the title deeds which she still retains.

57.Remarkably, notwithstanding the fact that P and D communicated frequently via WhatsApp on their respective mobile telephones and almost 700 pages of transcripted (mostly one line) messages commencing on 26 January 2011 and ending in April 2013 appear in the hearing bundles for this trial, such references as there are therein, bearing on either the question as to the ownership of the Property or marriage, are sparse.  In particular, prior to the execution of the Assignment on 30 May 2011, there are no references at all in the WhatsApp exchanges either to the Property or to any marriage proposal.  Such references as there were to these matters in the remainder of 2011 are as follows:

57.1   On 12 June 2011, following mutual expressions of love for each other, the following exchange took place:

D:   “We must earn money for our future”

P: “I will”

57.2   There then followed exchanges in which D complained of the lack of funds and in which it was proposed that P should sell his property in the United States.

57.3   The first references to the Property and marriage in the transcripted messages is on 20 June 2011, at about the time that D was preparing to move into the Property, as follows:

D:   “Can we break up? and I give u back your house......I know u want Yr House bk”;

P:   “But not this way; its not about the house ok”.......

D:   “But after we break up u lost a house U don’t care?”

P:   “I already told you I really trust you”

D:   “But I want to break up with u....... one think, just tell me. Do you want Yr house back after we break up?”

P:   You really hate me?”

D:   “One thing just tell me.  Do you want Yr house back after we break up?”

P:   “I don’t want to break up with you”. “Do you want me to move out?”

D:   “No I move out”. “Move back to Macau”. Tell me”. “One thing just tell me : Do you want Yr house back after we break up?”

P:   “I really don’t want to break up with you”

D:   “One thing just tell me.  Do you want Yr house back after we break up?”

P:   “No la”. “I just find a place to move out la”

D:   “Why u really care wor?”. “No I move back to Macau”

P:   “I’ll just tell my grandma I gave you the house because I really love you and planning to marry you” . “But now, I’ll just find a place to move out la”

D:   “So ?  We don’t have money to get marry”

P:   “You said you will give me time and support me”

D:   “Yes but u still the same”

P:   “I told you after we move your things, I will go to China”. “Think of something to do”

D:   “OK I sleep la”

D:   “88”

P:   “Can you trust me” .”Please don’t leave me”

D:   “No this is the last chance”

P:   “Are you at home?”

D:   “Yes”

P:   “Can I come over to see you”

D:   “88”. “No”

P:   “You really hate me?”

D:   “No but 心傷”

D:   “88 la”

P:   “I go to office to talk to my grandma la”

D:   “What”

P:   “I’ll just tell her I gave you the house and I need to find another place to live” “Since this is your house now”. “I think you don’t love and anymore”. “Can I come to your house now?”. “Baby, please don’t do this to me”

D:   “So”. “I off la”

P:   “Please don’t leave me”

D:   “I think u care the house Tim”

57.4   In his evidence, P sought to explain the exchanges which took place between D and himself on 20 June 2011 as follows:

“At the time of the conversation, the Defendant and I had an argument. I was very much in love with the Defendant and she had threatened to break up with me. The Defendant brought up the flat numerous times in this conversation, saying that she wanted to break up with me, that I had wanted my flat back and if we did break up, I would lose the flat. The Defendant asked me numerous times whether I wanted my flat back upon breaking up, to which I answered that I did not want to break up with her, although I was very worried that I would indeed lose my flat if she refused to return it upon breaking up with me. In order to pacify her, I told her that I would move out of the flat and explain to my Grandmother that I had given the flat to her. These words were only uttered in order to save our relationship, to appease her, nothing more. Although I did say such thing, I certainly did not intend to gift the flat to the Defendant at the time of transfer. Furthermore, as mentioned in paragraph 49 and 50 of my first witness statement, the Defendant had already once became furious with me for constantly asking her for the title deeds back. Her threat of throwing the title deeds away was still in my mind during this conversation, so I only said what I did to avoid escalating the situation.”

57.5   The next reference to marriage was on 12 July 2011 when D said “....I really want to marry u....I really care how u treat to me.”

57.6   the following exchanges took place on 16 July 2011:

P:   “.....I have gave you everything I have and share everything with you....”

D:   “I will move another house. Now so comfortable”

P:   “I thought you said you really want to marry me but how come you treat me like this?”

D:   “I said many time that I want to move out. But you don’t care”

P:   “Because I don’t want you to move out....you don’t like this house, right?

D:   “No, I like”

57.7   There are no other messages in the hearing bundles bearing on either the Property or the alleged proposal of marriage for the remainder of 2011.

58.I should record the fact here that each party stated that, during at least part of the relevant period, each was using at least one other mobile telephone, and each suggested that some messages passing between them thereon have either been deleted or not transcribed. In this connection:

58.1   P made reference to the use by him of a Sony Ericsson mobile phone. However, screen shots of a number of messages on this device have been included in the hearing bundles;

58.2   D said she was in the habit of changing or switching mobile telephones without further elaboration.

59.I take the view that if either party had believed that messages other than those in the hearing bundles were relevant and assisted their respective cases, they would have been produced (and not deleted) and I proceed on the basis that all relevant text messages between the 2 parties touching on the issues in this action are before the court.

60.After the transfer of the Property to D and D started to co-habit with P in the Property, P continued to pay all outgoings.  D’s contribution was the purchase by her of some new furniture at a cost of approximately HK$22,500 and RMB 13,350; the payment of some of the household expenses and the preparation of meals. 

61.D’s photo album was published in July 2011 but nevertheless, P did not thereafter ask her to return the Property to him. This was notwithstanding the deterioration of the relationship between P and D (which had always been volatile and unstable) which began almost as soon as D moved into the Property and progressively became worse and, on P’s case, the doubts he was then starting to have about the relationship between him and D.  According to P’s evidence he did ask her about the whereabouts of the title deeds to the Property, to which she replied that they were with the solicitors she had instructed in respect of the Assignment.  Notwithstanding the fact that, according to P, D refused to contact those solicitors about the title deeds, P still did not raise the subject of the return of the Property to him.

62.On Christmas Eve, 2011 D called P from Macau, asking him to visit her there the next day, which he did.  It was only then, on Christmas Day 2011 that D told P that she was pregnant. According to the report of an ultrasound examination she was over 9 weeks pregnant at this time.  On P’s case it was then that P indicated that he would marry D if she agreed to a check up in Hong Kong and if it was established that she was indeed pregnant with his child.  There then ensued extensive and confusing exchanges of WhatsApp messages which are at times difficult to interpret and which serve only to obfuscate whatever the true position, intentions and feelings the parties might have had.  This is at least in part because it is apparent that, as both P and D acknowledged in their oral evidence, they were both less than straightforward and on occasions sought to deceive each other.  The following points emerge:

62.1   On the one hand, D appears to have been ambivalent about whether or not to give birth to the baby (expressing concern on occasion that this would harm her career) and made inconsistent statements on this question; stating on a number of occasions an intention to have an abortion and, at the same time questioning the future of her relationship with P, threatening on several occasions to break up with him and announcing on other occasions (e.g. on 6 & 8 February 2012) that their relationship was over and that there was no future for them;

62.2   It is apparent that generally P went out of his way to try and mollify P and appease her, usually ineffectually, constantly proclaiming his love for D and continually saying that he would “handle it”, albeit it is by no means clear what exactly he meant by this.  This was consistent with what appears to be P’s general philosophy of avoiding any discussion of difficult issues; attempting to avoid argument or a row with P at any cost a row or committing himself to any course of action;

62.3   Although the question of marriage was discussed, it is by no means clear from the transcripts of the WhatsApp messages at this time, whether D was in fact committed to the idea of marrying P.  This seems to have been tied to the apparent need to obtain both parents’ approval to a marriage between P and D and a guarantee of financial support from P’s family. In an exchange of messages on 5 January 2012, D stated as follows:

D:   “My family and me not agree to Merry (sic) u yet; you didn’t ask me to merry (sic) u yet.”......

“I won’t gambling my future marry a person in a hurry...and gambling bb’s life. Right...and we are not clear out love.....and with no money also”

P:   “Are you saying you don’t really love me?”

D:   “Our family not allow also.”

62.4   In a further message on 17 January 2012, D stated: “And u never to propose about the marriage.”

62.5   whilst in the whatsApp messages P stated on a number of occasions that he was speaking to his family (in particular his mother) about D’s pregnancy and its consequences, he accepted in cross examination that, apart from informing his mother about the fact of D’s pregnancy, he had no other meaningful conversations with her.  P however strongly denied that his mother had disapproved of P marrying D as did P’s mother who also gave evidence at the trial.  The fact remains however that P apparently could not bring himself to making a firm decision and did not make an unconditional offer of marriage.  In a whatsApp message on 14 February he stated “I really want to marry you, its just I don’t have any money now”

61.6   This failure on the part of P plainly irked D, at one point exclaiming (On 6 February 2012): “You won’t take responsibility and marry me. Why do I need to become a single mother. My mother says you have ruined my entire life.”

61.7   on 7 February 2012, D told P that the baby had been aborted. As D acknowledged in her cross examination, this was not true at the time but later (on 24 February 2012) she did have an abortion and very soon afterwards the parties broke up, largely, it would seem as a result of D’s decision that they should do so, having failed to obtain any firm marriage commitment from P.

61.8   The Property was not mentioned again until 14 February 2012 when there was the following exchange of messages:

D:   “How about the house?”

P:   “Up to you”

D:   “How?”

P:   “you want to kick me out?”

D:   “I need to find a place to move”. “Or go _____ s house”. “Too many things”

P:   “U want to kick me out?”

D:   “No”. “But I need to find a place to sleep right?”

P:   “You can stay here”. “I sleep outside”

D:   “Huh?” .”Don’t kidding”

P:   “I don’t have any money to rent house”

D:   “I find a place to move”

P:   “I have no place to stay”

D:   “Me too”

P:   “Or when u come back I sleep in the sofa”. “Ok?”

D:   “We cannot together la”

P:   “Then what do you want?”

D:   “I will ask Money to move out”. “Too many things cannot move all to Macau ar” “Also I still have job on hk”

P:   “lc”

D:   “Why u still on line”

63.On or nearing the time of the break up between P and D in February 2012, D moved out of the Property but returned later in the month There was then a row and a scuffle between P and D as a result of which the police were called but no charges were made.  D then took the opportunity of P’s temporary absence from the Property to change the locks.  Thereafter P went on a trip to Beijing and D returned to Macau.  In or about early March 2012, after P’s return to Hong Kong from Beijing, he visited the Property and, according to his evidence, found the front door open and that D was absent.  D then changed the locks and has been living in the Property ever since.  According to D, she visited the Property in early August 2012 when she discovered that the the door lock had been changes and she could not therefore gain entry.  It is D’s case that she has been excluded from entering the Property ever since.

64.It was P’s evidence that, on various occasions since February 2012, he asked D to transfer the legal title to the Property to him and to return the title deeds. This is not however reflected in any of the WhatsApp messages. The following, somewhat cryptic, exchanges took place after the parties had fallen out with each other:

P:   “Did you pay 400000 for the house???”

D:   “When? Where? Already pay u la”

P:   “We will see”

D:   “OK”

P:   “You have plan all this from the beginning”

D:   “See u and ur company on news then”

P:   “Fine”

D:   “Not u only”

65.According to P, in the summer of 2012 he learnt of the fact that D had put the Property up for sale. This he said was “the last straw” which prompted him to institute the present proceedings by the writ which was issued on 13 August 2012. P was however unable to explain why, in the Statement of Claim filed on 10 December 2012, no mention was made of the case he later advanced by way of amendment to the effect that the transfer of the Property to D was to assist her in dealing with media intrusion in the context of the publication of D’s photo album.

FACTUAL FINDINGS

66.On the face of it, P’s explanation for his agreement to transfer the Property to D would appear to be inherently implausible:

66.1   in the first place, in the words of Ms. Emma Wong, D’s counsel, D was, at the time, a “pin up” model. As such it is unlikely that she would have needed or even that she thought she might need or benefit in terms of her career from an image of a financially independent woman.  On the contrary, on any objective basis, if she had wanted to dispel any image that she might have had or she thought she might attract as a woman living off men, a gift of a property from a seemingly rich boyfriend is unlikely to have been helpful;

66.2   it is also difficult to understand how P could have been persuaded that the transfer of the Property to D was capable of assisting D in her career;

66.3   even if D had thought that the temporary transfer of the Property to her, in effect on loan, until the publication of her photo album or until such time as media interest in her dissipated, it is difficult to appreciate how either party could have thought that this was a worthwhile exercise, bearing in mind the costs of the transfer to D (which D was to pay and did pay) and the costs which would be involved in the re-transfer of the Property back to P.

66.4   it is also difficult to understand why on P’s version of events he should have thought it appropriate to release the title deeds to the Property to D’s solicitors and why he was not more insistent than he was in getting them back.

67.P says he felt pressured to agree and reluctantly did agree to transfer the Property to D.  I accept that this is likely to have been so but, it does not explain why he did agree in circumstances where, on his case, the explanation given by D for the proposed transfer was implausible and illogical.

68.There is then the conversation on 20 June 2011, just 3 weeks after the execution of the Assignment and, in particular, (a) the fact that P declined D’s offer of giving the Property back to him (b) P’s offer to move out of the Property and (c) P’s statement that “I’ll just tell my grandma I gave you the house because I really love you and planning to marry you.” P sought to explain this by saying that he uttered the words he did on this occasion in order to save his relationship with D, in the face of D’s stated wish to break up, and to pacify or appease her.  None of this is easy to understand or evaluate.  I do however accept that, in this conversation, P was attempting to save the relationship, avoid a break up and to appease D, which is why he did not accept the offer of the return of the Property.  I also accept that, for the same reasons, in stating that he would move out of the Property, P was seeking to make D feel sorry for him.

69.P’s statement that “I’ll just tell my grandma I gave you the house because I really love you and planning to marry you.” is more problematic.  If P had in fact given D the Property simply because of his love for D and in contemplation of marriage (as P alleges to have been the case), it is difficult to understand why P would have made this statement which on the face of it would appear to have been entirely unnecessary and out of context.  If anything, the phraseology of the statement might suggest that proposed explanation to be given by P to his grandmother was intended to be false.  In all the circumstances, the conversation held on 20 June 2011.  On its own therefore this conversation is not in my view conclusive in resolving the central issue as to the parties’ intentions behind the Assignment.

70.The same can be said about the conversation on 16 July and in particular, P’s statement that “.....I have gave you everything I have and share everything with you....”. It is not clear to me whether or not this was an intended reference to the Property.  Even if it was it does not assist me in determining what if any conditions were attached to the agreement to transfer the Property to D.

71.I do not attach any significance to the fact that D purchased items of furniture for the Property or paid some of the household expenses.  The fact that P continued to pay all other outgoings in respect of the Property including all utilities is of rather greater significance but not conclusive on the question in issue.

72.However the fact that in the WhatsApp exchanges there is no request or demand for the re-assignment of the Property to P, particularly in the period after February 2012 when the parties broke up, is I think significant, as is the fact that P’s case, to the effect that the transfer of the Property to D was only intended to be temporary to assist D in her career, was not mentioned in the Statement of Claim that was filed on 3 October 2012 but was only introduced by amendment on 10 December 2012.  P was unable to satisfactorily explain this in his evidence.  Nor could he satisfactorily explain why in his WhatsApp message asking whether D had paid $4m for the Property (see paragraph 63 above), he did not instead refer to the agreement he now relies on.

73.In view of all of this circumstantial evidence, taken together, I am unable to accept P’s case that the transfer of the Property to D was only intended to be temporary to assist D in her career.

74.What then was the intention behind the Assignment? One thing is abundantly clear from the WhatsApp messages and that is that, particularly in the early period of the relationship between P and D, up to and including May and even June 2011, P was infatuated (indeed, besotted) with D.  During all times, D was demanding and materialistic.  She also had very high expectations of any boyfriend who she expected to provide for just about every need apart from her clothing and other personal shopping extravagances and became difficult and temperamental when she did not get what she wanted.  D demanded financial security and because of P’s infatuation with D he was prepared to surrender to such demands, particularly when they were accompanied by threats of ending the relationship.

75.In all the circumstances I am driven to the conclusion that on a balance of probabilities, P did intend to gift the Property to D.  I have little doubt that this was as a result of pressure from D and demands for “security”.  It is not necessary for me to reach any conclusion as to whether or not at this time he and D had agreed to marry or whether the Assignment was in contemplation of marriage.  My conclusion that it was an unqualified gift (a gift which was complete on the execution of the Assignment) is sufficient to determine this case.  There is no room for the application of the presumption of resulting trust.  Had the position been different however, and had I not felt able to discern the actual intention of the parties in respect of the transfer of the Property by P to D, (a) I would have applied that presumption rather than the presumption of advancement, which in my view would never have been appropriate, given the very short duration of the relationship between P and D and (b) I would have rejected D's estoppel argument by finding that in all the circumstances it would not have been unconscionable for P to have relied on the presumption of resulting trust.

76.I have to say that this conclusion which I am driven to reaching has not been without considerable hesitation and regret.  On the basis of the conclusion I have reached, P has clearly allowed his infatuation with D get the better of his judgment and, foolishly, in an effort to satisfy D’s demands, he has given away the Property when clearly he should not have done.  On the other hand D had obtained a windfall which in my judgment she has done little or nothing to deserve. Her conduct in this affair does nothing to reflect well on her.

CONCLUSION

77.I very much regret therefore that I must dismiss P’s claims in this action.

78.The natural corollary to the dismissal of P’s claims in this action is that I must, with equal regret, allow D’s counterclaim, as follows:

78.1   there will be a declaration that D is and has, since 30 May 2011 been the sole legal and beneficial owner of the Property;

78.2   I order that P do deliver up the Property to D. I hope that the parties will be able to agree a reasonable date for delivery up. In default of agreement I will give the parties liberty to apply.

79.D’s Counterclaim includes a claim for damages/mesne profits in respect of P’s occupation of the Property and alleged trespass from 1 August 2012.  It follows from the conclusion I have reached to the effect that from at least this date, P has occupied the Property without D’s consent and has prevented D from entering it that P has trespassed on the Property since this date and is liable to D for damages/mesne profits.  In this respect, D adduced the expert valuation evidence of the market rental for the Property in the form of expert reports (which stood as evidence in chief on behalf of D), according to which the market rental for the Property (inclusive of rates, government rent and management fee) was assessed at HK$15,700 per month as at 1 August 2012; HK$16,800 per month as at 1 August 2013; HK$17,400 per month as at 1 August 2014; HK$19,600 per month as at 1 August 2015; HK$18,600 per month as at 1 August 2016; HK$20,600 per month as at 1 August 2017; HK$21,900 per month as at 1 August 2018; HK$22,200 per month as at 1 August 2019 and HK$19,900 per month as at 1 August 2020 (and continuing). These values were not disputed by P.

80.P’s evidence was that at all material times he has paid all outgoings in respect of the Property.  I accept that this was so. I therefore accept that all rates, government rent and management fees have been paid by P.  On this basis it is necessary for these payments to be deducted from the monthly rental valuations provided by D’s expert before arriving at the appropriate quantum of damages/mesne profits.  I hope that the parties can agree the quantum of damages/mesne profits on this basis.  In default of agreement damages/mesne profits are to be assessed by the court, for which purpose I give the parties liberty to apply.

81.I order that interest on damages/mesne profits should accrue at 1% over HSBC Best Lending Rate from 1 August 2012 to the date of judgment and thereafter at judgment rate. The amount of pre-judgment interest is to be assessed in default of agreement between the parties.

82.I dismiss D’s claims for aggravated damages. In the light of my findings, such an award (or the granting of any other relief) would be wholly inappropriate, unwarranted and unjust.

83.I will make an order nisi that P should pay D’s costs of the action and of the counterclaim, to be taxed if not agreed.

Mr James H.M. McGowan, instructed by Francis Kong & Co, for the Plaintiff  

Ms Emma Wong, instructed by KM Lai & Li, for the Defendant