Chan Kang Hung Bovis v. Chan Kang Kong the Executor of the Estate of Chan Sun Chi, Deceased

DCCJ 5981/2019

[2023] HKDC 933

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 5981 OF 2019

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DECISION

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Introduction

1.This is a classic claim of common intention constructive trust, vis-à-vis a residential apartment known as “Flat E, 13^th Floor, Block 1, On Ning Garden, No. 10 Sheung Ning Road, Tseung Kwan O, Sai Kung, New Territories, Hong Kong” (“the Property”), arising out of an allegation of express agreement, said to have been reached orally in the office of a well-known law firm, on or about 23 July 1990, and never reduced into writing (“the Agreement”).

2.As is typical, the factual case of the Plaintiff (“P”) is actually one of express trust. By reason of the formality requirements set out in the Conveyancing and Property Ordinance (Cap 219), the legal result prayed for in the Statement of Claim (“SoC”) is a common intention constructive trust with the exact same terms, and this court is effectively being asked to give effect to the express trust “through the backdoor”. This is, of course, a very common, and perfectly legitimate, practice. There is nothing wrong with P inviting this court to do so. See, for example, Lewin on Trusts (20^th Edition), §10-074, or Clough v Killey and Ors (1996) 72 P & CR D22.

3.The relatively unusual features in this matter are (1) P’s claim is uncontested; and (2) instead of setting this whole matter down for a full-blown trial and having the Agreement ruled on in that trial with the benefit of live oral evidence from relevant witnesses, P chose to proceed by way of seeking declarations and other reliefs summarily, via an Order 19 default judgment application made on the basis that the Defendant (“D”), who was P’s only younger brother, had never filed any acknowledgment of service or Defence.

4.The default judgment application was heard by me on 9 May 2023, when P had the good fortune of being represented by Josephine Tjia, whose submissions, written and oral, proved to be of great assistance.

5.I informed P, via Ms Tjia, at the oral hearing on 9 May 2023, that I took the view that declarations vis-à-vis proprietary interests in land should never be granted “hastily”, and I needed time to scrutinize P’s case, so that I must reserve my decision on the matter, and hand down my written decision within 3 months.

6.This is my written decision.

7.In gist, I am persuaded this is one of those cases where I can, and indeed should, grant declarations vis-à-vis proprietary interests in land summarily.

8.I shall now proceed to explain how I reached that conclusion.

Background

9.Unless explicitly stated otherwise, the following background facts are extracted from the SoC.

10.The Property was registered in the joint names of P and Chan Sun Chi (陳新志) (“the Deceased”). P was the eldest son of the Deceased. The Deceased passed away on 17 November 2019.

11.During his lifetime, the Deceased had 5 children with his wife (“the Mother”). They were P, P’s younger sisters (“the Sisters”), and D. D was and remains the sole executor of the Deceased’s Estate pursuant to a will of the Deceased dated 8 December 2015.

12.In the 1980s, the Deceased, the Mother, the Sisters and D all lived in a public rental housing (“PRH”) unit in Sau Mau Ping Estate (秀茂坪邨) registered in the name of the Deceased (“the 1210 Unit”). P and his grandmother (“the Grandmother”) lived separately, in a different unit in the same building registered in the name of the Grandmother (“the 444 Unit”). By about 1990, the said family members came to the view that Sau Mau Ping Estate did not provide a good enough environment for them, and they agreed amongst themselves that they should surrender these two units to the Housing Authority in exchange for the entitlement to purchase flats under the Home Ownership Scheme (“HOS”). At all material times, as is well-known, it was a policy of the Housing Authority that it did not permit a Hong Kong resident to enjoy both benefits at the same time.

13.According to P, the Deceased had no money while the Mother had very little money. It fell upon P to shoulder the financial responsibility for the Property’s mortgage loan repayments – the Property being the HOS flat the said family members wished to purchase. Against this background, the Agreement between P and the Deceased had terms along the following lines:-

(1)  Whilst the Property should be purchased and registered in the names of P and the Deceased as joint tenants, the Deceased should only have a life interest in it. P should become its sole and absolute owner on the death of the Deceased.

(2)  On that basis the legal costs for buying the Property and all mortgage loan repayments should be paid by P, and P only.

14.Pursuant to, in part-performance of, or in detrimental reliance on the Agreement, and by an assignment dated 6 March 1991, the Property was assigned to P and the Deceased as joint tenants. By 2010, the mortgage loan had been repaid in full by P. Throughout all those years, the Deceased never made any financial contribution towards the Property. All was well until the relationship between P and the Deceased started to break down by reason of a number of incidents described in the SoC.

15.Being mindful of the fact that some of the people involved in those incidents set out in the SoC were never before me and had thus never been heard, I take the view that I should say no more about them here.

16.Cutting a long story short, by 15 August 2018, the relationship between P and the Deceased became so acrimonious the Deceased served P with a notice of severance dated 23 July 2018 (“the Notice”). The Notice purported to sever the joint tenancy vis-à-vis the Property so as to make P and the Deceased tenants-in-common, as opposed to joint tenants. I pause here to say that P had, via Ms Tjia, submitted to me that the Notice was, or should be, void, or otherwise liable to be set aside by me.

17.This sad story became even sadder when, most unfortunately, the Deceased passed away on 17 November 2019, without having resolved his dispute with P. The will of the Deceased was silent as to the ownership of the Property. In fact, the Property was never specifically mentioned. The Mother also passed away on 19 July 2021.

18.In an affirmation filed on 9 October 2020, P added he last saw D, his own younger brother, at the Deceased’s funeral. He never spoke to D during the funeral. In another affirmation filed on 9 March 2021, P said he had also bumped into D inside Tseung Kwan O Hospital, on 23 January 2021, when the Mother was in critical condition. Instead of attempting to have a conversation of some kind with D, P simply left.

19.There were other incidents where P and D met each other but did not speak. P described such incidents in subsequent affirmations which I have also read.

20.On 26 April 2023, P’s solicitors filed an affirmation of service duly confirming P’s compliance with the order of substituted service made by Master Timon Shum on 6 February 2023. Upon reading the same, I was satisfied I should deal with this matter in the absence of D.

P’s Submissions

21.In gist, Ms Tjia, Counsel for P, drew my attention to what was said by Coleman J in Cheung Sai Lon v Cheung Sai Ha & Another [2020] HKCFI 2551, and invited me to do something similar. There, His Lordship said, inter alia, the following (§16 & §44):-

“Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (1) the common intention, (2) the claimant’s detrimental reliance on their common intention, and (3) the unconscionability of the property owner departing from it… The case seems to me to be strong, and I accept that there is a genuine need for relief, and that justice would not be done if the relief were denied to the plaintiff. I also agree that, absent any attempt to contest the proceedings and where significant (if not all) relevant evidence has been filed, there is no benefit or purpose in requiring the claim relating to House 72 to go through the interlocutory process to a trial.” (Emphasis added)

22.As to the Notice, Ms Tjia drew my attention to what was said by Cheung JA in Ho Kwok Wing v Chan Mei Mui [2020] 3 HKLRD 548 [2020] HKCA 522 (§8.26) and said that in the absence of a beneficial joint tenancy, there was nothing there for the Deceased to sever, and the Notice must be “null and void”. Ms Tjia then drew my attention to what was said by DHCJ Andrew Cheung (as the Honourable Chief Justice then was) in Wong Kum Chi v Lee Tit Ying [2003] 1 HKLRD 594 (§16), to the effect that in addition to the well-known statutory jurisdiction to vacate lis pendis under Section 19 of the Land Registration Ordinance (Cap 128), our courts also have the inherent jurisdiction to make orders vacating the registration or purported registration of any other instrument in the Land Registry. In other words, Ms Tjia submitted that I had the power to vacate the Note and should exercise that power on the facts of this case.

My View

23.Having scrutinized all papers, I am persuaded I should, in this case, grant the reliefs sought by P summarily. Adopting what was said by Coleman J in Cheung Sai Lon (above), there is, in this case, no real benefit in requiring P to go through an expensive discovery exercise, the filing of witness statements, and a full-blown trial.

24.In my view, the questions I should ask myself are:-

(1)  Is P’s case, exactly as pleaded, strong, or shadowy?

(2)  Having read everything, do I have evidential queries to make, or should there be further investigations?

25.I have come to the firm view that P’s case, exactly as pleaded, is extremely strong, and plainly indicative of the Property being purchased subject to a common intention constructive trust since the very beginning, rendering the Notice “null and void” and liable to be vacated. I can think of no evidential queries which should be raised. And I can think of no truly necessary investigation. Accordingly, this case is, in my view, suitable for summary disposal.

26.There is, of course, the small matter of the actual reliefs which should be granted by me. I say at once a proprietary declaration is clearly necessary, as P will in most likelihood need it to prove good title in all of his subsequent dealings with the Property. In my view, I should also grant a vesting order under Section 45(g) of the Trustee Ordinance (Cap 29), for reasons similar to those given by DHCJ Jenkin Suen SC in Zhai Jin Cheng v Wang Lijun & Wang Yajuan [2023] HKCFI 1039 (§23 to §25). Vacation order under the Wong Kum Chi (above) jurisdiction would be beneficial to all persons dealing with the Property and should be made too.

27.In considering what reliefs should be granted to P, I have duly considered Section 48 of the District Court Ordinance (Cap 336) which, as is well-known, says the District Court has the same power as the Court of First Instance of the High Court. Its subjection (4) imposes on me a general duty to, so far as possible only of course, exercise my jurisdiction to secure a final and complete determination of all matters in dispute. I shall, in the order I make, seek to discharge that duty.

Disposition

28.By reason of the above, I hereby enter final judgment against D by making the following order:-

(1)  It is hereby declared that subject only to the Deceased’s life interest in the Property, which was extinguished on his death on 17 November 2019, the Property was and still is held on common intention constructive trust with P as its sole beneficial owner.

(2)  It is hereby declared that the Notice presently registered in the Land Registry by the Acting Land Registrar with Memorial Number 18081700630163 was and remains null and void and of no effect whatsoever and must be vacated forthwith.

(3)  All legal and beneficial titles interests rights and shares of and in the Property be and are vested in P absolutely by a vesting order hereby made by this court pursuant to Section 45(g) of the Trustee Ordinance (Cap 29).

(4)  D shall do such acts and things including executing any document necessary to give effect to this order.

(5)  Should D neglect, fail or refuse to execute document in respect of the Property within 7 days of publication of this order in the manner as directed below, or should D cannot after reasonable inquiry be found, Mr But Man Tai, a solicitor and consultant of Li & Partners, shall be nominated appointed and authorized to execute any and all such document(s) in place of D pursuant to Section 38A of the District Court Ordinance (Cap 336).

(6)  P shall draw up and file this order. This order must then be published by P once, in Sing Tao Daily (星島日報), after which it shall be deemed validly served on D.

(7)  Costs of this action, including all costs reserved if any, be paid by D to P forthwith, to be taxed with Certificate for Counsel if not agreed.

(8)  P’s own costs of this action shall be taxed in accordance with the Legal Aid Regulations.

(9)  There be liberty to apply.

Final Remarks

29.I do thank Ms Josephine Tjia for her very able assistance.

Ms Josephine Tjia, instructed by Li & Partners, assigned by the Director of Legal Aid, for the plaintiff

The defendant was not represented and did not appear