Leung Siu Wan Iris, The Personal Representative of the Estate of Leung Yun Cheung, Deceased v. Tin Kwong Shin Tong Ltd

DCCJ 48/2018

[2021] HKDC 1482

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 48 OF 2018

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Before:  His Honour Judge KC Chan in Court

Dates of Hearing:  18-21, 27 October 2021

Date of Judgment:  25 November 2021

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JUDGMENT

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1.The plaintiff is the Administratrix of the Estate of Madam Leung Yun Cheung, deceased (“the Deceased”). She was the niece of the Deceased.

2.She now claims against the defendant for the possession, and mesne profits for the wrongful occupation, of the property known as House No 7 on 6^th Floor of Block A, Nos 179 & 181 Ma Tau Wai Road, Kowloon (“the MTW Property”), which has been occupied and used as a Buddha hall known as 天光佛堂 (“Tin Kwong Hall”) by the defendant’s predecessor, and then the defendant, totally for over 45 years.

3.The defendant all along has been acting in person.  It claims that the MTW Property belongs to the defendant.  In a nutshell, the defendant’s case is:-

3.1   that the MTW Property was purchased with the accumulated surplus of “oil and incense donation” (香油錢) received by Fat Kwong Hall (defined below) (“General Donations”) and donations received by the same specifically for the purchase of the MTW Property (“Specific Donations”);

3.2   alternatively, and even if the Deceased used all or some of her personal funds for the purchase, the common intention was that Tin Kwong Hall would beneficially own the MTW Property, the Deceased thus held the MTW Property on behalf of Tin Kwong Hall under a common intention constructive trust; and

3.3   as a fall-back, Tin Kwong Hall was entitled to such part of the beneficial ownership of the MTW Property, on resulting trust, proportional to the funds provided by the General Donations or the Specific Donations for the purchase.

4.On the other hand, the plaintiff’s case is that the Deceased was a person of means, she purchased the MTW Property with her own funds and had used it, or licensed it to be used, as a Buddha hall, which license was terminated by the plaintiff in 2017.

5.The plaintiff was represented by counsel Mr Clough and the defendant was represented by its director, Mr Lam Po Lung (“Mr Lam”).

6.In this case, as will be seen, there was hardly any evidence proffered directly relating to the source of fund for the purchase of the MTW Property.  Both parties alluded to and relied on a number of circumstantial matters and subsequent events.

7.I will first set out the background and circumstantial matters and the salient events subsequent to the purchase.

BACKGROUND AND CIRCUMSTANTIAL MATTERS, PURCHASE OF THE MTW PROPERTY AND SUBSEQUENT SALIENT EVENTS

8.Both parties did not seriously dispute matters which are within the other’s knowledge and not within that of hers or its.  The following background, circumstantial matters and events are either common ground, not seriously disputed, or found proved by me, unless stated otherwise.

9.The Deceased was born on 26 November 1926.  She had since early 1960s become very devoted to Buddhism, to learning, preaching and spreading it, and to setting up Buddha halls for those purposes.

10.In her life, the Deceased remained celibate.  Witnesses from both parties attested that in her lifetime, the Deceased had led a simple and frugal life, not showing interest in or pursuing materialistic wants.  The general tenor of the evidence of the defendant’s witnesses was that the Deceased was kind and compassionate.  No one suggested that the Deceased was other than a devout, sincere and honest Buddhist.

11.The defendant expressly accepted the plaintiff’s case that in 1969 the Deceased purchased with her own funds 3 adjoining properties on Chung On Street in Tsuen Wan (together “the TW Properties”), namely:-

11.1   5/F, Rear Portion, No 138 Chung On Street purchased on 9 July 1969;

11.2   Rear Portion, 5/F, No 140 Chung On Street purchased on 10 September 1969; and

11.3   Rear Portion, 5/F, No 142 Chung On Street also purchased on 10 September 1969.

12.The TW Properties had since their said purchases in 1969 been converted into a large single unit, and until 1997 when the Deceased emigrated to Australia, been used exclusively as a Buddha hall known as 法光佛堂 (“Fat Kwong Hall”).

13.On 29 October 1975, the MTW Property was purchased at the price of HK$125,000 and registered in the sole name of the Deceased.  As said, it has since then until now been used exclusively as Tin Kwong Hall.  It is also not disputed by the parties that the Deceased lived there since 1975.

14.The plaintiff made no admission to the following, which I find proved (unless otherwise specified) after having heard the defendant’s witnesses and considered the documentary evidence produced:-

14.1   Madam Chu Man Shin (朱文仙) (“Madam Chu”) was a “senior” in the group of affiliated Buddha halls of which, among many others, Fat Kwong Hall, Tin Kwong Hall, the earlier-established 仁光佛堂, which was situated in I-Feng Mansions in Tokwawan (“Yan Kwong Hall”), and the subsequently established 耀光佛堂 and 群光佛堂 were members.

14.2   Madam Chu was in charge (or was one of the few in charge) of the said group of Buddha halls. She was stationed in Yan Kwong Hall, which was the head hall (總堂).

14.3   The Deceased first attended the group’s Buddha hall in Shaukeiwan in 1960s.  The Deceased later learned from or was mentored by Madam Chu.

14.4   In about 1969, the Deceased was appointed or recognised by Madam Chu as a preacher (點傳師), who around the time initiated to Madam Chu to establish, and was later entrusted to establish, operate and be responsible for Fat Kwong Hall.

14.5   It is the defendant’s case that though the TW Properties were purchased with the Deceased’s funds, the Deceased had intimated to Madam Chu that she would give or gave the TW Properties to the Buddha hall.  This is disputed by the plaintiff.  I do not find it necessary to, and make no finding, on this dispute.  Suffice it to mention that in 1997 they had been sold by the Deceased despite the defendant’s evidence that there has always been a need to have a Buddha hall in Tsuen Wan.

14.6   Fat Kwong Hall was operated very successfully by the Deceased since its inception to the time of purchase of the MTW Property in 1975 (not that it was not successful afterwards).  According to the book of register (求道登記名冊)of Fat Kwong Hall, a total number of 1841 persons were converted in Fat Kwong Hall in that period.

14.7   On 11 November 1975, Tin Kwong Hall was established and it was operated and managed by the Deceased, assisted by another preacher mentored by her, namely Madam Hung Sui Ying (“Madam Hung”).

15.On 10 July 1978, the property known as 3/F, No 26 Tai Po Road, Kowloon (“the TPR Property”) was purchased and registered in the Deceased’s sole name.  It is not disputed that since its purchase until its sale in 1997, the TPR Property had been exclusively used as a Buddha hall known as 耀光佛堂 (“Yiu Kwong Hall”).

16.On 28 June 1989, the Deceased executed her last Will[1] (“the Will”).  The Will was professionally prepared by Messrs K C Yung & Co, a firm of solicitors.  In the Will, the Deceased appointed the plaintiff’s mother, her sister-in-law, Madam Tse Lan Kwai (“Madam Tse”) as the sole executrix and devised all the real properties therein listed, namely, the TW Properties, the MTW Property and the TPR Property, to Madam Tse and Madam Chu as joint tenants absolutely. According to the plaintiff’s witnesses, while the Deceased was a private person and generally did not talk much about her personal affairs and finances, she and Madam Tse were close, if not very close, and they were on very good talking terms.

17.The plaintiff and her siblings only learned about the existence of the Will after the Deceased has passed away in 2015.  Prior to this action, they did not know who Madam Chu was.

18.The plaintiff emigrated to Australia in about 1984 or 1985.  She was the first to do so among her family members.  Her elder sister Leung Lai Wan emigrated to Australia in 1991.  Then, Madam Tse and her husband, the brother of the Deceased, emigrated to Australia in 1993, followed by some of the other siblings.

19.In a trip to Australia to visit the plaintiff in 1991, the Deceased viewed various properties with the plaintiff, and with the assistance from the plaintiff, purchased two properties in Australia, namely (a) a property at Carlingford, Parramatta, New South Wales on 8 April 1991, and (b) a property at Eastwood, Municipality of Ryde, New South Wales on 23 April 1991.

20.The plaintiff said, and it is not disputed, that the Deceased paid for the said two properties in Australia upfront without the need of any loan.  The first-mentioned property, according to the plaintiff, was used as the Deceased’s residence.  The defendant disputes that and said that it was used as a Buddha hall to spread Buddhism in Australia.  Again, I do not find it necessary to, and make no finding, on this dispute.  The second-mentioned property was rented out to earn income.  I find, on balance of probabilities, that at the time the Deceased purchased the two said properties, she already had in mind emigrating to Australia.

21.On 14 February 1996, Madam Chu died quite abruptly.  According to the evidence of Mr Lam, which is not disputed, Madam Chu suffered certain injuries in a traffic accident about a month ago and was being hospitalized and was convalescing. Certain complications however developed quite unexpectedly and shortly after she passed away.  Soon, a senior from an affiliated Buddha hall in Taiwan flew over and stationed in Yan Kwong Hall, the head hall, to take charge of the management of the group of Buddha halls in Hong Kong. 

22.In December 1996, the Deceased was hospitalized for microcytic anaemia and episodes of supraventricular tachycardia and EEG abnormalities.

23.According to the evidence of Mr Lam, which I accept, the senior from Taiwan and therefore the head hall was notified by the Deceased in 1997 about her intention to sell the TW Properties and the TPR Property.  On 16 May 1997, the Deceased sold the TW Properties.  In about September 1997, the Deceased was granted an Australian resident visa.  On 9 October 1997, the Deceased sold the TPR Property.  The record showed that on 28 September 1997 to 7 October 1997 and 3 Nov 1997 to 3 April 1998, the Deceased was in Australia.  On 4 April 1998 to 15 August 1998, the Deceased was in Hong Kong.

24.While the Deceased was in Hong Kong in the last-mentioned period and on 30 June 1998, the defendant was incorporated as a company limited by guarantee to take over and continue the affairs of Tin Kwong Hall.  The Deceased was named as one of the members of the Executive Committee of the defendant.  The defendant has been recognized by the Inland Revenue Department as a charity. 

25.From 15 August 1998 onwards, the Deceased lived in Australia.

26.On 9 June 1999, the Deceased was diagnosed in Australia to have dementia[2].

27.On 29 July 2002, the defendant purchased the property known as 2/F, No 254 Sha Tsui Road, Tsuen Wan (“the STR Property”) and since has used it as a Buddha hall known as 群光佛堂 (“Kwan Kwong Hall”).

28.In 2003, the Deceased’s family thought it better for the Deceased to return from Australia to Hong Kong to live and be taken care of in an appropriate facility.  Since 16 August 2003, the Deceased lived in and received care from TWGHs Women’s Welfare Club Western District Residential Care Home for Elderly.  The plaintiff’s evidence was that by that time, the Deceased had already loss her “mental capability”.

29.On 6 January 2008, Madam Tse passed away.

30.On 26 June 2015, the Deceased passed away.

31.Found among the Deceased’s belongings were a copy of the Will and a Chinese draft license agreement written in the Deceased’s handwriting (“the Draft License”).  The Draft License was dated year 1998.  It recited that the MTW Property was the Deceased’s.  It said that the Deceased agreed to license the MTW Property from 1999 to 2000 (with month and date left blank) without rent to Madam Hung, Madam Li Wai King (“Madam Li”) and Madam Chow Yuen Ping to operate Tin Kwong Hall.  It was not signed or dated.

32.On 28 November 2016, Letters of Administration of the Deceased’s Estate with the Will annexed was issued to the plaintiff.

33.By a number of letters issued by the former solicitors of the plaintiff to the defendant and the defendant’s directors since 14 July 2017, the plaintiff sought to obtain possession of the MTW Property.  By letter dated 12 September 2017, the defendant asserted beneficial ownership over the MTW Property.

34.On 4 January 2018, the plaintiff commenced this action.

LEGAL PRINCIPLES

35.The applicable legal principles are well settled.  There is no dispute by the parties over them. 

36.On common intention constructive trust, Deputy High Court Judge A Stock SC has neatly summarized the principles in the case of Leung Hang Lin and Li Kwai Fuk v Lam Mei Yung [2019] HKCFI 2819 at §§7 and 8, and I quote:-

“7. The principles applicable to common intention constructive trusts are set out in various Hong Kong authorities, notably: Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 per Ribeiro PJ at §§35-38; Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9; Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985; Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327.

8. In summary:

(1) The starting point is that equity follows the law. There is a presumption that the beneficial interest follows the legal interest. Where the property is registered in a defendant’s name, the plaintiff bears the burden of showing, on the balance of probabilities, that the defendant held the property on trust for him or her such that the beneficial ownership differs to the legal ownership. See: Liu Wai Keung §44; Mo Ying §5.16; Primecredit §17.

(2) The burden may be discharged by showing that: (i) there was a common intention held by the plaintiff and the property owner at the time of the purchase (or exceptionally, thereafter) that the beneficial ownership was to be different to the legal ownership; (ii) the plaintiff altered his or her position in detrimental reliance upon the common intention; and (iii) it is unconscionable for the property owner to assert ownership in reliance on the legal title. The constructive trust is constituted by the plaintiff’s detrimental reliance on the common intention and the unconscionability of the legal owner departing therefrom. See: Luo Xing Juan §38; Liu Wai Keung §46.

(3) The approach to ascertaining common intention is objective. One looks to the intention of each party which was reasonably understood by the other party to be manifested by the first party’s words and conduct. See: Liu Wai Keung §47; Mo Ying §5.16.

(4) The doctrine is sometimes described as having two limbs. First, where at any time prior to the acquisition (or exceptionally, at a later date), there is an agreement, arrangement or understanding reached between the parties as to how the property is to be held beneficially, based on evidence of express discussions. Second, where there is no evidence to support such a finding but the court relies on the parties’ conduct as a basis from which to infer a common intention. There is some authority that under the second limb, direct contributions to the purchase price by a party who is not a legal owner will readily justify the inference. See: Mo Ying §5.8; Primecredit §§2.3 and 2.4.

(5) However, the modern approach is to assess the parties’ common intention by a holistic approach having regard to the context and the particular facts.  The court is not constrained to consider only pure direct monetary contributions to the purchase price.  In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters.  See: Mo Ying §§5.14 and 5.15; Primecredit §1.6.”

37.On resulting trust, the principle has been stated thus:-

“Where A makes a voluntary payment to B … there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of A’s intention to make an outright transfer…” per Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 708A-C.

38.Mr Clough also particularly reminded this court and this court has borne very much in mind:-

38.1   of the warnings given in many cases as to the frailty of human memory.  He referred the court to the recent judgment of Coleman J in Yu Man Fung Alice v Chiau Sing Chi Stephen [2020] HKCFI 2923 in which the learned judge had reviewed the topic and reinstated in compressed form various judicial and academic observations at §§53-56; and

38.2   that where a claim is made against the estate of a deceased person who cannot give evidence against the claim, the court has always approached such claims with some suspicion, especially where the only or principal witness in support of the claim is the donee (Yung Shu Wu v Vivienne Sung Wu (2011) 14 HKCFAR 39 at §73)

39.In evaluating the subsequent conducts, words and declarations as evidence of the intention at the time of the transaction, the case of Shephard v Cartwright and the following observations of Stock NPJ in Leung Wing Yi Asther v Kwok Yu Wah(2015) 18 HKCFAR 605 at §§55-56 are particularly pertinent:-

“55. …. In the context of a question whether evidence of conduct subsequent to the registration of shares in the names of children was admissible to rebut the presumption of advancement, it was held in Shephard v Cartwright^[3] that whereas acts and declarations of the parties before or at the time of the transaction or so immediately after it as to render it a part of that transaction are admissible “either for or against the party who did the act or made the declaration...  subsequent declarations are admissible as evidence only against the party who made them, not in his favour.”^[4]  The modern approach is less rigid in relation to evidence of subsequent conduct:

“… it does not follow that subsequent conduct is necessarily irrelevant. Where the existence of an equitable interest depends upon a rebuttable presumption or inference of the transferor’s intention, evidence may be given of the subsequent conduct in order to rebut the presumption or inference which would otherwise be drawn.”^[5]

56. As a matter of common experience, contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event, especially in the case of “ self serving statements or conduct of the transferor, who may long after the transaction be regretting earlier generosity.”^[6]  That rationale is not restricted to evidence in rebuttal of presumptions but embraces any evidence from which an inference of the transferor’s intention may properly be drawn.”

THE PARTIES’ WITNESSES

40.The defendant called 9 witnesses, namely:-

(a)   Mr Lam;

(b)   his wife Madam Chung Yim Kwan (“Madam Chung”);

(c)   Madam Li;

(d)   Madam Pang Yim Ling (“Madam Pang”) who is the daughter of Madam Hung;

(e)   Madam Tse Kwan (“Madam Tse”);

(f)   Madam Wong Shui Lin (“Madam Wong”);

(g)   Mr Kwok Chiu (“Mr Kwok”);

(h)   Madam Tam Wai Fong (“Madam Tam”); and

(i)   Madam Lee Koon Tai (“Madam Lee”).

41.All of the defendant’s witnesses are faithful followers in the group of Buddha halls.  All except Mr Lam, Madam Chung and Madam Li attended Fat Kwong Hall since before 1975.  Mr Lam and his wife Madam Chung attended Yan Kwong Hall and learned from Madam Chu while Madam Li attended Tin Kwong Hall since 1981.  Madam Li, Madam Lee and Mr Kwok were members of the Executive Committee of the defendant after it was incorporated in 1998.

42.I find all the defendant’s witnesses generally honest and have tried their best to tell the truth.

43.All except Mr Lam and Madam Chung spoke generally about what they heard the Deceased taught regarding spreading the faith and on matters relating to donations.  Some of the defendant’s witnesses also spoke about the voluntary work they had done in help preparing the vegetarian meals mentioned below. 

44.Mr Lam was appointed a preacher in 2002 in Yan Kwong Hall.  He spoke about some general management matters of the group of Buddha halls.  He was asked by the Executive Committee of the defendant in 2018 to be in charge of matters relating to this action.  His wife Madam Chung spoke particularly about a conversation between the Deceased and Madam Chung in 1974 or 1975.  Madam Pang spoke about certain matters she learned from her mother Madam Hung, particularly a Specific Donation made by Madam Hung in 1975 in the sum of HK$40,000.

45.On the plaintiff’s side, the plaintiff herself, her 3 sisters, namely Madam Leung Lai Wan, Madam Leung Sau Wan, and Madam Leung Yin Wan and Mr Sin Cheuk Wang (“Mr Sin”), their uncle and cousin of the Deceased, gave evidence.

46.Essentially, their evidence was mainly on general background of the Deceased and her family and their recollection of her which, while providing background, are not really probative to the issues in dispute.  The plaintiff and her sisters all agreed that the Deceased was a private person who seldom spoke about her personal matters, including her finances.  They were unable to give any evidence regarding any conversation or interaction they had with the Deceased which shed light on the issues to be resolved.  They fairly accepted, when asked, that the various thinking they offered in their witness statements to say that the MTW Property was purchased with the Deceased’s own funds was their own deductions or inferences.  The long witness statement of Mr Sin gave an overview account of various relatives and their lives since their childhood, which is completely irrelevant. 

47.That having been said, I also find all the plaintiff’s witnesses honest and have tried to tell the truth.

48.I will discuss the relevant bits of the evidence of the parties’ witnesses in the sections below when I discuss the issues.

SOURCE OF THE FUND FOR THE PURCHASE OF THE MTW PROPERTY

The plaintiff’s position and evidence

49.In her witness statement, the plaintiff portrayed the Deceased as an experienced investor in real properties and had been doing so with success since early years, with the properties allegedly so invested for gain since mid 1960s consisted of the properties used as Buddha halls which were mentioned above.  This portraiture of the Deceased investing in the Buddha hall properties for profits provoked responses from the defendant’s witnesses who had known the Deceased for years as a devout and frugal Buddhist not given to materialistic pursuits.  Apart from the properties used as Buddha halls, the properties the Deceased having dealt with essentially were the two properties given to her by her father in 1952.  The related transactions are listed in the next paragraph.  With such a picture in view and looking at all the circumstances, I find the plaintiff’s such portraiture an exaggeration and a mis-characterization.

50.The documents produced show, and I find:-

50.1   In July 1952, by deeds of gift, the Deceased’s father assigned to the Deceased the property known as Remaining Portion of Inland Lot No 1204 (No 8A Chung’s Lane) and the property known as one equal undivided moiety or half of and in Remaining Portion of Shaukeiwan Inland Lot No 139 (Nos 114 and 116 Main Street, Shaukeiwan);

50.2   In March 1958, by Conditions of Exchange, the Deceased together with one Mr Tang exchanged Shaukeiwan Inland Lot No 139 to Shaukeiwan Inland Lot No 641 (No 16 Mong Lung Street), which was then developed, and the Deceased by a Deed of Partition dated 28 December 1960 became the sole owner of the Remaining Portion of Shaukeiwan Inland Lot No 641 and the buildings erected thereon;

50.3   In January 1961, the Deceased sold 2^nd to 5^th floors of the building erected on the Remaining Portion of Shaukeiwan Inland Lot No 641 (No 16 Mong Lung Street) at the total price of HK$82,500, while the Deceased retained Ground Floor and First Floor of No 16 Mong Lung Street to generate rental income;

50.4   In January 1978, Remaining Portion of Inland Lot No 1204 was resumed by the government and the Deceased received a compensation of HK$114,385.87;

50.5   In October 1988, the Deceased sold Ground Floor and First Floor of No16 Mong Lung Street at the price of HK$2,750,000.

51.As the above showed that the Deceased had been in receipt of substantial amounts of money, and considering that the Deceased was a frugal person and there was no suggestion that she had any other substantial liability to meet or had other substantial expenditures, I accept the plaintiff’s case that in 1975, the Deceased would have sufficient means to purchase the MTW Property with her own funds.

52.There were however no bank statements or any other documents or other evidence proffered to show that the Deceased indeed paid for the purchase of the MTW Property with her own funds.

53.Therefore, the gist of the plaintiff’s case was really that the defendant has failed to discharge its burden of proving that the beneficial title should not follow the legal title.

Did Fat Kwong Hall accumulated a surplus of General Donations in 1975?  Was the surplus actually used for the purchase of the MTW Property?  The management and finance of Fat Kwong Hall

54.Based on the evidence of those of the defendant’s witnesses that had attended Fat Kwong Hall since before 1975, which I accept, I find:-

54.1   In Fat Kwong Hall from 1969 to 1975, the Deceased had often preached passionately about expanding the reach of Buddhism to more people and establishing more Buddha halls.  Many among the witnesses were thus motivated to give donations.  While the Deceased often taught about expanding, she had not hosted extra lessons with a view to encourage donations (as one of the witnesses suggested), or asked for specific pledges of donations to be made to purchase a property, not to mention specifically the MTW Property, to be used as a Buddha hall.

54.2   General Donations were usually given after the followers and those attended were served vegetarian meals in Fat Kwong Hall.  Fat Kwong Hall served such meals during festive days in the year, about 10 such days every year.  In its heydays, Fat Kwong Hall served such vegetarian meals in one such day to hundreds of people as the TW Properties and the Roofs could accommodate up to 10 tables, and the Hall would serve several rounds in such a day, with the Deceased helped by many volunteers, including some of the defendant’s witnesses.  Usually those, but not necessarily all, who had taken the meal would make a donation.  Most of the defendant’s witnesses themselves donated HK$20 to 30 on each occasion.  The defendant’s witnesses said that the costs of the vegetable for each such day at the time only amounted to hundreds of dollars.  Some of the defendant’s witnesses said that sometimes meals were also made available to those attending lessons.

54.3   Thus and roughly estimated, I accept the defendant’s general case that prior to 1975 Fat Kwong Hall would be able to have, and had, surplus in General Donations after deducting expenses.

54.4   On available evidence, however, I am unable to come to any finding on the amount of General Donations Fat Kwong Hall would be able to, or had, accumulated between 1969 to 1975.

55.The defendant was unable to produce any evidence, documentary or otherwise, relating to the financial position of Fat Kwong Hall in 1969 to 1975, and indeed for any period at all.

56.The defendant also was not able to proffer any evidence shedding light on where the purchase money of the MTW Property indeed came from.

57.The following general evidence was given by Mr Lam, who first attended Yan Kwong Hall in 1979 when he was 15 years old and was appointed a preacher in 2002:-

57.1   To his knowledge, which he learned much later than 1975, that the preachers responsible for a Buddha hall in the group was to report the finance of the Buddha hall to “the senior” Madam Chu.  The preachers usually just wrote down very simple accounts of the hall on a book to report to Madam Chu.

57.2   The Buddha halls would usually be required to pay over the surplus of the donations to the head hall for its management, some halls would borrow money from the head hall to purchase the premises to be used by the hall, while others, whom Madam Chu trusted, would be “financially independent” in that it would be allowed to keep and spend the surplus for expanding the reach of Buddhism.

58.Mr Lam also gave evidence that he learned much later than 1975 from Madam Chu that Fat Kwong Hall was “financially independent”.  It was not his evidence that such information was learned from a specific discussion with Madam Chu in the context of how the purchase of the MTW Property was financed in 1975, nor was it said by Mr Lam that Madam Chu said Fat Kwong Hall was “financial independent” in years as early as 1969 to 1975, nor had it been asked of Madam Chu whether Fat Kwong Hall invariably without exception kept all the surplus donations without paying over any surplus to the head hall.  In all, I do not find this piece of evidence sufficiently clear and reliable to come to a finding that Fat Kwong Hall indeed had kept all its accumulated surplus donations from 1969 to 1975.

59.Madam Chung, Mr Lam’s wife, gave evidence about a conversation between Madam Chu and the Deceased, that she heard in 1974 or 1975, to the effect that the Deceased reported there was surplus in Fat Kwong Hall and the Deceased would like to buy another property to establish another Buddha hall.  I however note that according to Madam Chung, she heard it when she was only 10 years old and the conversation also took place over 45 years ago.  While I accept that Madam Chung herself honestly believed she remembered the conversation accurately, however, bearing in mind the frailty of human memory, I entertain much doubt whether she was able to recollect the conversation with any reliable degree of accuracy.  I also note that there was no context given as to the conversation. As it was recounted as a one-off conversation, it seems to me that it is highly probable that the conversation was only part of all the discussions Madam Chu and the Deceased had over the subject.  Therefore, it was not clear whether the contents of the conversation represented the final agreement or conclusion.  Indeed, the fact that a 10 year old was included in the conversation, as Madam Chung said she was, suggests to me more likely than not that the conversation was more casual in nature.  Again, in all, I do not find this piece of evidence a reliable one on which to make a finding as to the source of the fund used to purchase the MTW Property.

60.Madam Li said that she had enquired of the Deceased about whether Tin Kwong Hall need to pay rent for the MTW Property and therefore whether Tin Kwong Hall could make ends meet, and she was told by the Deceased that the hall had purchased the MTW Property. Later on when questioned as to the exact words spoken by the Deceased, she answered that she remembered the Deceased said: “You need not worry, it [the property] is “ours”” (the Chinese words were: “你唔使擔心, 係大眾嘅”).  While Madam Li might understand those words to mean that the Buddha hall had purchased the MTW Property, I do not find the meaning as such.  Rather, I find that those words were general words vague in meaning, it could mean that the place was for us, or for us to use.  Those words clearly mentioned nothing about who purchased the MTW Property, not to say with whose funds it was purchased.  I do not find such an utterance a reliable piece of evidence showing that the Deceased admitted that the MTW Property was purchased with funds belonging to the Buddha hall.

61.I also take note of another matter recounted by Mr Lam.  He said that the premises occupied by Yan Kwong Hall was purchased in 1967 and registered in the names of Madam Chu and another “senior”.  In 1976, Yan Kwong Hall was incorporated into a company limited by guarantee and the premises were then registered or assigned into the name of the incorporated entity.  The incident informs me that by 1976 (which was one year after the purchase of the MTW Property) Madam Chu was already mindful of incorporating the Buddha halls to hold the properties belonging to the halls.  Thus, if the MTW Property was purchased with funds from Fat Kwong Hall, it seems to me highly probable that in the period from 1976 to 1996 Madam Chu would also have caused Tin Kwong Hall to be incorporated and the MTW Property to be held under its name, as she did in the situation of Yan Kwong Hall.

62.In the premises, there is clearly insufficient evidence to prove, and I hold that the defendant has failed to prove on balance of probabilities, that the purchase of the MTW Property was funded by the accumulated surplus General Donations of Fat Kwong Hall.

Were there donations received by the Deceased/Fat Kwong Hall for the specific purpose of purchasing the MTW Property?  If there were, were they actually used for the purchase of the MTW Property?  Resulting trust?  Presumption of resulting trust rebutted?

63.All the defendant’s witnesses said that to a certain degree they gave their General Donations having in mind that the surplus donations would be used for the general purpose of spreading Buddhism.  Clearly such donations were not made for the specific purpose of purchasing the MTW Property and could not be regarded as such.  Mr Kwok remembered that around 1975 he gave HK$200 to HK$300 on one occasion specifically for the purpose of spreading Buddhism but without reference to purchasing the MTW Property.  Likewise, I do not think this donation can be regarded as a Specific Donation.

64.Madam Pang gave evidence in her witness statement and orally that she recalled that her mother Madam Hung told her that she had donated HK$40,000 in 1975 specifically for the purchase of MTW Property.  Madam Pang distinctly recalled that Madam Hung told her so on 2 occasions.  The first was in 1997 when the Deceased sold the TW Properties.  On that occasion, Madam Pang asked Madam Hung whether the MTW Property would also be sold, she recalled that her mother was particularly concerned and said that it would not as she had given HK$40,000 for its purchase, and Madam Hung further said that the Deceased had promised she would take care of it when she returned to Hong Kong (the words used were “返來先攪”).  The second occasion was around July 2002 when Madam Hung donated HK$400,000 specifically for the purchase of the STR Property to be used as Kwan Kwong Hall.  On that occasion, Madam Hung said words to the effect that this time she would give 10 times as much as the last occasion, which was in 1975 when she gave HK$40,000 for the purchase of the MTW Property.

65.Madam Pang also gave evidence that:-

65.1   Her parents used to own and operate a Chinese café (茶餐廳) in Tsuen Wan for a long time until about 1981, which was one to two years after her father passed away.  Since then, Madam Hung had left the café to her nephew to operate.

65.2   Madam Hung told her that she had made good profits from a property sale in 1973.

65.3   Madam Hung attended Fat Kwong Hall and was converted to Buddhism in 1970.  Since then she was zealous over it and learned from the Deceased.  She was so zealous that sometimes her husband would complain that she was not attending to the café and instead went to Fat Kwong Hall to help.  She became a preacher in 1975.

65.4   After Tin Kwong Hall was established, Madam Hung assisted the Deceased in running Tin Kwong Hall, especially when the Deceased went to Fat Kwong Hall to teach or attend to its affairs.

66.I find that the fact that Madam Hung had donated HK$400,000 for the purchase of the STR Property proved by the receipt issued to Madam Pang dated 4 July 2002 acknowledging receipt of a donation of HK$500,000[7], of which as Madam Pang said, which I also accept, HK$400,000 was from Madam Hung and HK$100,000 from Madam Pang.  The fact that Madam Hung had been zealous and was appointed a preacher in 1975 and was heavily involved in converting followers in Tin Kwong Hall, I find, was proved by the books of register (求道登記名冊) of Fat Kwong Hall and Tin Kwong Hall[8], which recorded the names of the people converted either brought to the halls by Madam Hung, or vouched by her or recognized as converted by her in her capacity as preacher.

67.I have also carefully observed and listened to Madam Pang giving evidence.  She answered questions directly and spontaneously, and was not shaken in cross-examination. I was favourably impressed by her.  I find her a truthful and reliable witness.  I accept her evidence and find that in 1975 Madam Hung has given HK$40,000 by way of Specific Donation for the purchase of MTW Property.

68.Based on the testimony of all the defendant’s witnesses, which I accept, that invariably whether it be General or Specific Donations, the donations to Fat Kwong Hall would be handed over by the followers directly to the Deceased, I find that Madam Hung’s said Specific Donation of HK$40,000 was handed by her to the Deceased.  Bearing in mind the integrity of the Deceased vouched for by all the witnesses and the sincerity of her faith attested to by all the defendant’s witnesses who knew the Deceased, I have no hesitation to find, on balance of probabilities, that the Deceased would apply, and had applied, the HK$40,000 Specific Donation she received from Madam Hung to the purchase of the MTW Property.

69.Moreover, I find the following circumstance supports the fact that the Deceased did not own the entire beneficial interest in the MTW Property.  As mentioned, I accept that there was a great need for a Buddha hall in Tsuen Wan (also shown by the purchase of the STR Property to establish Kwan Kwong Hall in 2002), which need the Deceased must have known and been fully aware of.  That notwithstanding, the Deceased in 1997 went on to sell all the other properties registered in her name, including and none-the-less the TW Properties, but not the MTW Property.  Against the overall circumstances and particularly the above need, I find implausible the plaintiff’s suggestion that the reason for not selling the MTW Property (but selling all the others) was that the Deceased would let Tin Kwong Hall continue to use the MTW Property until it secured a replacement.  If “not selling until a replacement was found” were the reason, the Deceased would have kept not the least the TW Properties, if not also the MTW Property and the TPR Property until replacements were secured.  There was no suggestion that the Deceased was financially pressed to sell, or had any financial reason to sell, all but the MTW Property.  In the circumstance and particularly bearing in mind that the Deceased was a person of integrity, I find that the more likely and plausible reason was that the Deceased did not own the entire beneficial interest in the MTW Property and that was why she did not sell it in 1997 together with the other properties.

70.Certain reliance was placed by the plaintiff on the Draft License.  Not only was it a mere unsigned and undated draft, it was also clearly an utterance originated from the Deceased in favour of her interest.  As such, I will not attach weight to it.  In his closing submissions, Mr Clough, in my view rightly, did not seek to pursue this further.

71.I also find it right and accept Mr Clough’s submission that the court, without any other evidence, should not attempt to infer one way or the other from the terms of the bequest made in the Will.  It would be pure conjecture to say that the bequest of those properties to Madam Tse and Madam Chu jointly showed that the Deceased was admitting that Madam Chu (representing the Buddha halls?) was entitled to half interest in those properties, or to say that at the time the Deceased was minded to make a generous gift of half interest in the properties belonging to her to Madam Chu (personally or on behalf of the buddha halls?). The Will simply was not probative one way or the other.

72.By my above finding of and relating to the Specific Donation made by Madam Hung, it would be presumed, by way of resulting trust, that Tin Kwong Hall, and now the defendant, has been entitled to a proportionate share in the beneficial interest in the MTW Property, namely, 40,000/125,000 share, which would have been 32%.

73.From all the circumstances of the case above alluded to, it is in my view abundantly clear that not a single person or entity involved, whether the Deceased, Tin Kwong Hall, Madam Hung or Madam Chu would even suggest, not to say there is no evidence, that the Deceased would be gifted or transferred, or be benefitted personally from, the Specific Donation of Madam Hung given to Tin Kwong Hall. The case that the presumption of resulting trust would be rebutted is a non-starter, and Mr Clough has not seriously pursued it.  I hold that the presumption of resulting trust is not rebutted.

74.In the premises, I hold that the defendant has been the beneficial owner of 32% of the MTW Property.

COMMON INTENTION CONSTRUCTIVE TRUST NOT PROVED

75.The defendant’s case of a common intention constructing trust is clearly not proved.  I so hold for the following reasons.

76.None of the defendant’s witnesses, save Madam Chung, gave any evidence regarding any communication showing objectively a common intention was reached contemporaneously between the Deceased and, whether it be Madam Chu as the responsible person of the group of Buddha halls, or anyone else.  Regarding the evidence of Madam Chung, I have already hold in paragraph 59 above that her evidence in this regard was not of sufficient clarity or reliability.

77.Regarding the other limb of inferring such common intention from subsequent conducts or words (not counting, or with little weight given to, self-serving ones), there is hardly evidence of such conducts or words.  I have held in paragraph 60 above that the words spoken by the Deceased to Madam Li did not amount to such conduct or words.

78.Mr Lam mentioned that as a preacher the Deceased preached and lived Buddha’s teaching that possessions are to be “everyone’s” or “in common” (大眾的). I have explained to Mr Lam at trial that practicing one’s religion regardless, the court would adjudicate on property ownership according to law and evidence.  There is simply no evidence before the court that the Deceased by any communication showed objectively that there was a common intention that she would hold the part of the MTW Property bought with her own funds in trust for the Buddha hall.  In any case, I think the Deceased has already shown herself very generous in letting the Buddha halls use all the above-mentioned properties for very substantial periods.  Mr Lam properly and fairly no longer pursued the above point in closing submissions. 

THE PLAINTIFF’S CLAIM FOR MESNE PROFITS

79.The plaintiff’s claim for mesne profits therefore falls to be decided in the context of one co-owner claiming the same against another.

80.Traditionally, it is well-settled that a co-owner who is not in occupation has no claim for rent against the occupying co-owner simply by virtue of the latter’s sole occupation of the co-owned property.  This is because unity of possession among the co-owners is central to a tenancy in common.[9]

81.Whether there is now a “modern approach” in equity to order occupation rent without confinement to ouster, partition or anything in analogy was examined by the Court of Final Appeal in Cheung Lai Mui (張麗梅), the executrix of the estate of Cheung Ping Kau and the administratrix of the estate of Cheung Ping Fuk v Cheung Wai Shing & Others[10].

82.In Cheung Lai Mui’s case, the CFA concluded thus:-

“104. We conclude that the authorities considered above do not establish any new, free-standing “modern approach” such as that urged by the respondents and favoured by the Court of Appeal. Claims by one co-owner against a co-owner in occupation for payment of occupation rent or for an account of rent can only arise in accordance with the principles laid down in the established authorities. Unity of possession precludes such claims otherwise than in cases of ouster (including “constructive exclusion” as in domestic violence cases); or where an operative agreement renders the co-owner in occupation an agent or bailiff so as to come under a duty to account to the other. Where partition or analogous proceedings have been instituted, apart from cases of ouster, equity may recognise a defensive equity in favour of one of the co-owners regarding expenditure appropriately incurred and may, in the process of equitable accounting, require the other, viewed as a seeker of equity required to do equity, to be debited with an occupation rent to set off the expenditure incurred, thus reciprocally balancing the parties’ interests in the distribution of the realised proceeds of the co-owned property.”

83.Therefore, in the context of the present case, for the plaintiff to successfully claim mesne profits, she would need to establish ouster.

84.It is the plaintiff’s case and evidence that the plaintiff has never taken any physical steps to try to occupy the MTW Property as a co-owner.  The only steps taken were a number of demands made in series of correspondence between the plaintiff’s former solicitors and the defendant exchanged between July 2017 to November 2017[11].  In these correspondences, all along the plaintiff claimed that she was the sole owner of the MTW Property and demanded the defendant to vacate it altogether.  Clearly, as a co-owner, the plaintiff was not entitled in law to force the defendant to vacate the MTW Property.  I therefore find that the defendant was entitled, as it did, to reject the plaintiff’s said demands.

85.On such evidence, I do not find that the plaintiff has established that she was ousted by the defendant such as to entitle her to claim mesne profits from the defendant, whether commencing from the dates contended (ie. either from 5 September 2017 or 14 November 2017) or at all.

86.I therefore dismiss the plaintiff’s claim for mesne profits.

DISPOSAL

87.In the premises, I dismiss the plaintiff’s claim for vacant possession, mesne profits, damages and other reliefs.  I hold in favour of the defendant’s counterclaim to the extent that I adjudge and make a declaration that the defendant has since 29 October 1975 been the true beneficial owner as to 32% interest of and in the property known as House No 7 on 6^th Floor of Block A, Nos 179 & 181 Ma Tau Wai Road, Kowloon which is registered in the sole name of the late Madam Leung Yun Cheung and that the late Madam Leung Yun Cheung and now her Estate has been and is holding the said 32% share on trust for the defendant.

88.The parties are directed to consider whether they would seek any relief consequential upon the adjudication in this judgment, including particularly whether the defendant would seek an order mandating the plaintiff to execute the necessary conveyance to assign to it the said 32% share, and what the terms of the order and any directions would be.  If any party should seek such further relief, she or it should apply by letter within 21 days, copied to the opposite party, stating clearly the precise terms of the order and directions sought and the succinct reasons for it.

89.Though I dismiss the plaintiff’s claim and hold in favour of the counterclaim, the real battle between the parties was for the beneficial ownership of the MTW Property and both parties vied for 100% ownership for which both have failed.  Considering this and all the circumstances, I take the provisional view that it is fair to make no order as to the costs of this action (including the counterclaim and all costs reserved, if any).  I so order on nisi basis which will become absolute upon the expiry of 21 days from today unless within that period any party applies by letter to vary.

90.If required, the defendant may make arrangement with my clerk for this judgment to be interpreted to Punti.

91.I thank counsel and Mr Lam for their assistance.

Mr Neal Clough, instructed by WMC Partners and Mr Henry Wong, of WMC Partners (morning on 21 October 2021), for the plaintiff

The defendant represented by its director Mr Lam Po Lung