Luk Wing Kwan v. The Personal Representative of the Estate of Poon Siu Mei, Deceased and Another
Read the full judgment text of DCCJ 5666/2019 on BabelCite. This District Court judgment was delivered on 3 December 2021.
1. This case concerns the beneficial interests in a property known as 2 nd Floor including Roof, No 18 Pak She Street, Cheung Chau (“Property”) among family members.
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DCCJ 5666/2019 [2021] HKDC 1399 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO 5666 OF 2019 --------------------------------
AND BETWEEN
-------------------------------- Before: Deputy District Judge Queenie Ng in Court Dates of Hearing: 1, 2, 3, 4 and 9 December 2020 Date of Judgment: 3 December 2021 ----------------------------- JUDGMENT ----------------------------- INTRODUCTION 1.This case concerns the beneficial interests in a property known as 2nd Floor including Roof, No 18 Pak She Street, Cheung Chau (“Property”) among family members. 2.The Property was purchased in January 1987 and was registered in the name of Madam Poon Siu Mei (“Mother”) and the plaintiff. 3.The Mother had four sons and one daughter, namely (in the order of seniority), Mr Luk Wing Cheung (“Wing Cheung”), the 1st defendant Mr Luk Wing Lam (“Wing Lam”/“1st defendant”), Ms Luk Lai Yee (“Lai Yee”), the plaintiff and Mr Luk Wing Tai (“Wing Tai”). The 2nd defendant and Ms Luk Ka Man (“Ka Man”) are the son and daughter of Wing Cheung, hence the grandson and granddaughter of the Mother. 4.By an assignment dated 18 February 1997 (“1997 Assignment”), the Property was transferred from the joint names of the plaintiff and the Mother to the Mother’s sole name. 5.By an assignment dated 12 April 2016 (“2016 Assignment”), the Mother transferred the Property to the 2nd defendant, her grandson, who has since then become the sole registered owner of the Property. 6.The Mother passed away on 25 June 2016 at the age of 90. 7.By a writ of summons issued on 6 October 2016 and the statement of claim filed on 19 November 2016, the plaintiff claims against the 2nd defendant for, inter alia, a declaration that the 2nd defendant is holding one-third share (or alternatively such share as found by the court) in the Property on trust for the plaintiff. The plaintiff also claims against the 1st defendant in his capacity as the personal representative of the estate of the Mother for equitable compensation at a sum equivalent to his 1/3 share or alternatively such share as found by the court. 8.The 1st defendant indicated in the acknowledgement of service filed on 13 June 2017 that he did not intend to contest the proceedings. He did not appear at the trial. 9.The 2nd defendant denies the plaintiff having any beneficial interest in the Property. 10.This trial is between the plaintiff (the uncle) and the 2nd defendant (the nephew). The plaintiff’s case 11.It is the plaintiff’s pleaded case is that:-
12.The plaintiff therefore claims against the 1st and 2nd defendants for, inter alia, a declaration that the 2nd defendant or alternatively the 1st defendant is holding 1/3 share or alternatively such share proportionate to the plaintiff’s contribution in the Property on trust for the plaintiff, an order that the sale of the Property by the Mother to the 2nd defendant be set aside, equitable compensation at a sum equivalent to the plaintiff’s 1/3 share and an account of all sums and profits received by the 2nd defendant arising from the Property. 13.Mr Wong, counsel for the plaintiff, in his opening submissions, clarified that the plaintiff’s claim for equitable compensation is against the 1st defendant only, ie against the estate of the Mother. The 2nd defendant’s case 14.The 2nd defendant contends that:-
Issues 15.In view of the parties’ respective contentions, the major issues for determination are as follows:-
16.At the commencement of trial, Mr Wong, counsel for the plaintiff, accepted that constructive trust is the real issue and that it is only if this court decides to reject both parties’ evidence on intention that resulting trust, based on the amount of plaintiff’s contribution towards the purchase of the Property, may be of relevance. 17.The focus is therefore on the elements that the plaintiff has to prove in order to establish a constructive trust to the extent of 1/3 of the interest in the Property in his favour. Legal propositions 18.There is no dispute that a party claiming that beneficial ownership differs from legal ownership bears the burden of proving it : Mo Ying v Brillex Development Ltd [2015] 2 HKLR 985. 19.Ribeiro PJ explained common intention constructive trust in Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1:-
20.In the present case, the plaintiff must prove (1) there was a common intention between himself and the Mother that the plaintiff, Wing Tai and Wing Cheung were to be the beneficial owners of the Property in equal share after the Mother’s demise; (2) the plaintiff altered his position in detrimental reliance upon such common intention; and (3) it is unconscionable for the Mother to depart from the said common intention by transferring the Property to the 2nd defendant. 21.Common intention can be express or implied. It can be deduced or inferred objectively from the parties’ conduct : Stack v Dowden [2007] 2 AC 432 at [126] and [128]. 22.The parties’ intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the property concerned, based on evidence of express discussions. It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention : see Godfrey Lam J’s succinct summary of the legal principles in Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9 at [49]. 23.Even when reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant by reference to which their assertions about the agreement, arrangement or understanding must be gauged and tested : Liu Wai Keung at [50]. 24.The plaintiff’s case of Oral Agreement and/or Trust between himself and the Mother was not recorded in writing. The Mother passed away in 2016. Hence, there is no evidence from her to confirm or deny the same. In these circumstances, I have to assess carefully the veracity of the account of events of the plaintiff and his witness, Wing Tai, and the 2nd defendant and his witnesses, in particular, Wing Cheung, by reference to all relevant circumstances. 25.In assessing the witnesses’ evidence, I remind myself of the following principles:-
26.I now turn to the parties’ evidence and the assessment thereof by reference to the relevant incidents. The purchase of the property in 1987 27.The evidence of the plaintiff, Wing Tai and Wing Cheung is relevant under this head. The 2nd defendant was born in 1984. He frankly admitted that he has no personal knowledge of anything relating to the purchase of the Property back in 1987. 28.The plaintiff’s case is that there was the Oral Agreement between the Mother and himself that, by reason of his contribution to 1/3 of the monthly instalments of the 1987 Mortgage, the plaintiff would be given 1/3 interest in the Property after the Mother’s death. The common intention was, according to the plaintiff, to create a trust where the Mother had a life interest with the remainder to the plaintiff to the extent of 1/3. 29.It is common ground that the Mother was the person in charge of the whole family. She was a person of strong character. She controlled the financial matters and made decisions for the family. She was thrifty and careful in terms of money. Her husband (“Father”) and her children all listened to her and followed her instructions. The eldest son, Wing Cheung, described her as the queen of the family. The plaintiff said she was illiterate, money-minded and strict in child discipline. He would try his best to fulfill what the Mother required him to do. 30.The Mother ran a grocery store in Cheung Chau before retirement. The Father had been a lifeguard and then a fireman. He gave all his earnings to the Mother. The Mother was strict in children discipline. She required her children to give financial contribution to the family once they started working, which they all did. After the retirement of the Father and Mother, they relied on their own savings and their children’s contribution to live. The family had all along been living in rented property in Cheung Chau. When the children grown up, they moved out one by one. They went back to visit the Mother and the Father mainly during the festivals. The siblings were not particularly closed to each other though. They rarely met each other, except during the festivals. 31.The sons, except Wing Lam, gave a portion of their earnings to the Mother every month in order to fulfil their filial duty. 32.After her retirement, in 1987, the Mother decided to purchase the Property subject to mortgage. There is no dispute that it was the Mother’s decision to do so and the Property was purchased in the name of the plaintiff and the Mother. 33.It is common ground that the sons, except Wing Lam, were required to and did share the responsibility of monthly mortgage repayment in respect of the 1987 Mortgage. 34.The plaintiff said prior to the purchase of the Property, there was an oral agreement between himself and the Mother that (a) the plaintiff, Wing Cheung and Wing Tai (“the 3 Sons”) would be responsible to pay the monthly installment of the 1987 Mortgage in equal shares, ie each paying 1/3 or HK$1,300; (b) the Mother would have the right to live in the Property during her lifetime; and (c) after the Mother’s death, the Property would belong to the 3 Sons in equal shares, ie each having 1/3 (the Oral Agreement/Trust). The Property was purchased at a consideration of HK$250,000. The Mother paid HK$50,000 for down payment and the remaining HK$200,000 was financed by the 1987 Mortgage, the repayment of which was shared by the 3 Sons. 35.The plaintiff said pursuant to the Oral Agreement, he paid HK$1,300 each month, being 1/3 of the monthly installments of the 1987 Mortgage, to his account for repayment of the 1987 Mortgage. To support his case, the plaintiff produced the deposit slips from April 1988 to January 1993 as evidence. He did not know the amount of contribution paid by Wing Cheung and Wing Tai. 36.The younger brother, Wing Tai, was called by the plaintiff to give evidence. Wing Tai said it was the Mother’s original intention for all 4 sons to share the responsibility of monthly mortgage repayment. But eventually Wing Lam pulled out leaving only the 3 Sons to share the responsibility. He remembered that Mother had promised him that the Property would belong to the 3 Sons upon her demise. 37.Wing Cheung, the 2nd defendant’s father, the eldest brother of the plaintiff and Wing Tai, gave evidence for the 2nd defendant. He said in the summer of 1986, Father informed him that Mother intended to purchase the Property. They required Wing Cheung and his brothers to give them more money to purchase the Property and to pay the monthly mortgage repayment. Father said Mother wanted to have a property of her own to live and to place their ancestral tablets. Neither the Mother nor the Father had told him that the Property would belong to the three sons upon the Mother’s demise. 38.According to Wing Cheung, Father told him that Mother agreed to purchase the Property at the consideration of HK$320,000. As to the downpayment of HK$120,000, Mother would pay HK$20,000 while Wing Cheung was asked to contribute HK$100,000. Wing Cheung borrowed the said HK$100,000 from his mother-in-law. The said sum was subsequently repaid by Wing Cheung and his wife. 39.Wing Cheung was told that the Property would be subject to a mortgage for 5 years and the Mother had to repay HK$3,900 every month. Wing Cheung was asked to contribute HK$2,000 more each month while the plaintiff and Wing Tai were asked to contribute HK$1,000 more respectively. Hence, since 1987, Wing Cheung started paying HK$6,000 (original HK$4,000 plus an additional sum of HK$2,000) to the Mother every month for 5 years. Thereafter, Wing Cheung’s contribution was reverted back to HK$4,000. Wing Cheung said he was not sure how the Mother use the HK$6,000. Wing Cheung knew that the Property was purchased in the name of the Mother and the plaintiff. 40.The existence of the Oral Agreement/Trust constitutes the backbone of his entire claim. It is important therefore to ascertain the intention of the Mother and the plaintiff when the Property was purchased in 1987. 41.In the closing submissions, Mr Wong, counsel for the plaintiff, submitted that the Oral Agreement was between the Mother and the plaintiff. He confirmed that it is not the plaintiff’s case that the Oral Agreement was made amongst the 3 Sons. The plaintiff admitted during cross-examination that he did not know whether the Mother had made the same arrangement with Wing Cheung and Wing Tai. Mr Wong said it would not affect the plaintiff’s claim even if, as a matter of fact, the Mother had not made the same arrangement was not made with Wing Cheung and/or Wing Tai. 42.The plaintiff’s case stands or falls on whether this court accepts his case of the existence of the Oral Agreement/Trust. 43.Having read the pleadings, the witness statements and heard the oral testimony of witnesses, in particular, the plaintiff himself and his witness, Wing Tai, I am not satisfied that the plaintiff has discharged his heavy burden of proving the existence of the Oral Agreement/Trust on the balance of probabilities. 44.First, there are a number of major inconsistencies among the plaintiff’s pleadings, witness statements and/or the oral evidence of the plaintiff and/or Wing Tai which cast doubt on the credibility of the plaintiff.
45.The above inconsistencies undermine the plaintiff’s case. The substantial difference on the evidence from the plaintiff and Wing Tai as to how the Mother communicated her proposed terms of the Oral Agreement to the 3 Sons (including the plaintiff) casts doubt on the veracity of the plaintiff’s case on Oral Agreement/Trust. 46.Overall, I do not find the plaintiff and Wing Tai’s evidence to be reliable. 47.Second, even if I am to ignore Wing Tai’s evidence regarding the alleged family meeting and the plaintiff’s own inconsistent version set out above, I still find it difficult to accept the plaintiff’s case that the Mother would enter into the Oral Agreement/Trust with the plaintiff. 48.It is the evidence of both the plaintiff and Wing Tai that they were under the filial duty to make financial contributions to the Mother, whether it was for repayment of mortgage or not. The plaintiff then sought to explain why the Oral Agreement was necessary. He said he believed that the Mother would like to give the 3 Sons comfort or incentive to pay off the mortgage because the Mother was afraid that the plaintiff or the 3 Sons would pull out, like Wing Lam. 49.The plaintiff’s assertion has to be cautiously scrutinized as being self-serving. This court has to be particularly careful given that the Mother has passed away and cannot give her own version of what took place. 50.It is common ground that Wing Lam had refused to contribute. There is however no evidence that any of the remaining 3 Sons had ever expressed or indicated their unwillingness or reluctance to assist in paying off the 1987 Mortgage. As a matter of fact, the 3 Sons had all along been filial and obedient and they had been paying part of their earnings to the Mother on a regular basis since they started working. I do not see any particular need for the Mother to have to propose the Oral Agreement or any terms thereof, to the plaintiff or the 3 Sons, in order to secure his or their monthly contributions. 51.The fact that the plaintiff deposited HK$1,300 into his bank account, as opposed to paying it to the Mother in cash, is neither here nor there. The fact that the Property was purchased in the joint name of the Mother and the plaintiff is no indicative of the Oral Agreement either because as the plaintiff acknowledged, the Mother alone could not obtain any mortgage loan and the Mother did not want to trouble Wing Cheung and Wing Tai since they were civil servants. 52.On the existence of the Oral Agreement/Trust, I prefer the evidence of Wing Cheung to the plaintiff and Wing Tai. Wing Cheung said he had not heard of the Oral Agreement/Trust and the Mother did not make any similar proposal to him. He believed that based on the Mother’s character, she would not make any such proposal. I find on balance of probabilities that the contributions from plaintiff or the 3 Sons were made out of filial duty. The contributions were gift to the Mother. They were not made pursuant to the alleged Oral Agreement/Trust. 53.The plaintiff placed heavy emphasis on the 1997 Assignment and the Will as proof of Mother’s intention to make the Oral Agreement/Trust. By the 1997 Assignment, the Property was transferred from the joint names of the Mother and the plaintiff to the Mother’s sole name. 10 days after the 1997 Assignment on 28 February 1997, the Mother executed the Mother’s Will bequeathing the Property to the plaintiff, Wing Cheung and Wing Tai in equal share. 54.The plaintiff’s pleaded case is that prior to the execution of the 1997 Assignment, the Mother reassured the plaintiff that the 3 Sons would have the right to sell the Property after her death and divide the proceeds of sale in equal shares. Pursuant to the Oral Agreement/Trust, in order to protect the interest of the 3 Sons, the Mother made the Will bequeathing the Property to the 3 Sons “living at my death for their own use and benefit absolutely in equal shares”. It was further provided in the Will that, if any of the 3 Sons predeceased her or failed to survive her for more than 30 days, the child or children of that son would take his/her/their father’s share by substitution in equal shares per stripes. It is noted that the Will only concerned the Property. There was no provision in the Will to deal with the residual estate of the Mother. 55.The plaintiff submitted that based on the witnesses’ description of the Mother’s character, it is impossible that the Mother would have executed the Will if the content did not truly and accurately reflect her intention. The plaintiff asked this court to give full weight to Will and that other evidence should be assessed in light of the content of the Will. 56.While the terms of the Will in relation to the disposal of the Property appear to be consistent with the terms of the Oral Agreement, it does not necessarily support the existence thereof back in 1987. 57.First, in terms of the timing of the Will, the plaintiff said it was executed shortly after the 1997 Assignment in order to protect the interest of the 3 Sons. The plaintiff therefore contended that the Mother made the Will to reflect the earlier Oral Agreement/Trust. In my view, the Will can only reflect the Mother’s intention at the time of the Will. While it may be argued as evidence of the Oral Agreement/Trust, it is also equally arguable that it was the Mother’s act of recognition of the 3 Sons contribution throughout the years. 58.Second, the plaintiff’s assertion both in the pleadings and in his witness statement that the Mother did refer to the Oral Agreement/Trust prior to the making of the Will and did reassure him of the plaintiff’s interest in the Property is again self-serving and has to be viewed with skepticism. During cross-examination, when the plaintiff was asked as to whether there was any discussion between the Mother and the plaintiff prior to the making of the Will, the plaintiff clearly answered no. Counsel for the 2nd defendant then specifically referred the plaintiff to paragraph 13 of his witness statement whereby it was said therein that prior to the making of the Will, the Mother had reassured the plaintiff of the Oral Agreement/Trust. The plaintiff replied saying that there was no need for the Mother and him to talk about that again because the Oral Agreement had previously been agreed. He confirmed that there was no discussion between himself and the Mother before the Will was made. This contradiction of the plaintiff’s own pleading and witness statement again cast doubt on the plaintiff’s veracity. 59.In the circumstances, I am not satisfied that the plaintiff has proved on balance of probabilities that the Will was made pursuant to the Oral Agreement/Trust. 60.Further, there are indeed circumstances in which the Mother regarded herself as the true and absolute owner of the Property while the plaintiff did not regard himself as the true owner or future owner thereof.
61.All in all, I am not satisfied that the plaintiff has discharged his burden of proving the existence of the Oral Agreement/Trust on the balance of probabilities. 62.Accordingly, I find that the Oral Agreement/Trust did not exist and therefore the plaintiff did not have any interest in the Property at all material times. 63.In the light of my finding above, there is no need to consider the second issue of the whether the 2nd defendant was a bona fide purchaser for value without notice of the plaintiff’s interest in the Property such that he can take free of the plaintiff’s interest. Conclusion 64.For the above reasons, I dismiss the plaintiff’s claim against both the 1st and 2nd defendants. Accordingly, I also order on a nisi basis that all costs of and occasioned by this action (including costs of the trial and all costs previously reserved) be paid by the plaintiff to the 2nd defendant to be taxed if not agreed, with certificate for one counsel. There be no order as to costs as between the plaintiff and the 1st defendant. The plaintiff’s own costs be taxed in accordance with the Legal Aid Regulations. 65.Finally, I thank both counsel for their assistance.
Mr Damian Wong, instructed by Hobson & Ma, assigned by the Director of Legal Aid, for the plaintiff The 1st defendant was not represented and did not appear Mr Tsui Man Yiu and Ms Teresa Leung, instructed by Y S Lau & Partners, for the 2nd defendant | |||||||||||||||||||||||||||||||||||
Cases cited in this judgment