Chow Kwun Chung (in His Personal Capacity, and As the Sole Executor of the Estate of Leung King, Deceased) v. Leung Yi Sze and Another

DCCJ 2577/2018

[2023] HKDC 1390

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2577 OF 2018

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BETWEEN

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DECISION

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1.By my judgment handed down on 28 April 2023, I gave reliefs in favour of P, namely vacant possession of the Flat and mense profit from the date of the Writ until delivery of vacant possession (the “Judgment”).

2.By Summons filed on 29 May 2023, D1 sought leave to appeal against the Judgment relying on the grounds stated in his draft Notice of Appeal annexed thereto.

3.By a further Summons filed on 26 June 2023, D1 sought leave to amend the aforesaid draft Notice of Appeal by adding a further ground of appeal.

4.P has no objection to the amendment, subject to getting costs thereof, and made submissions in opposition on the basis of the amended draft Notice of Appeal. As such, I shall deal with the grounds as put forth in the amended draft Notice of Appeal (the “Draft ANoA”) and grouped in the same way they have been in D1’s submissions.

Applicable Principles

5.P in his submissions outlined the applicable principles, in gist:-

5.1 Leave shall only be granted if there is “reasonable prospect of success” or that there is “some other reason in the interests of justice why the appeal should be heard” (s 63A(2) DCO);

5.2 “Reasonable prospect of success” means that the prospect must be reasonable, ie more than fanciful, but not having to be probable (Standard Chartered Bank (Hong Kong) Ltd v Lok Shek Hung [2023] HKCA 776);

5.3 Primary findings of fact may only be overturned if it is plainly wrong (HKCP 2023 Vol 1 n 59/0/53).

6.D1 has no quarrel with them.

Draft ANoA §§1-2 – Adverse Possession

7.This ground evolves around the question of intention, specifically the conclusion related to the “objective limb” thereof.

8.At the outset there seems to be a query as to whether D1 relies on the complaint of the “objective limb” not being fully argued as a ground of appeal, however D1 later clarified that it was not.

9.As such, I shall only deal with the complaint that relevant matters were missed and irrelevant matters were included in coming to the conclusion.

10.While I have nothing but agreement with the principles described in the authorities cited in D1’s submissions, I am equally certain that those principles do not equate factual possession with objective intention to possess for if so then the latter would not have survived as a separate element.

11.What belies my analysis in §27 of the Judgment is the peculiar circumstance in this case that D1 and the Deceased, respectively the self-proclaimed dispossessor and the real owner, used to live together in the Flat.

12.Given what I found as the Deceased’s intention, ie she had intended to bequeath D1 with ownership upon her demise (§18 of the Judgment), the Deceased would not have perceived any objective indication that D1 was regarding himself as the real owner and a fortiori the world at large.

13.Logically therefore, something would have to change on the part of D1 in his use of the Flat (from the way it was co-used by both of them) to objectively indicate an intention to possession as the real owner in this case. This is something that arises from the circumstances of this particular case, not a matter of general application.

14.As such, I have not imposed an additional requirement of change of use and do not see that I have erred in terms of law.

15.As to the challenge to the factual considerations that formed the basis of my conclusion, D1’s focal argument that when the lock was changed in early 2004 P was left without any means of access to the Flat and he knew it, misses a critical fact: as explained in §27.5 of the Judgment, the change of lock was done without D1 even knowing at the time, and, on D1’s own evidence, even afterwards D1’s brother did not tell D1 why the lock was changed. I fail to see how this incident could be said to represent D1’s objective intention.

16.Hence, I do not think I have erred in my factual analysis either.

17.I therefore refuse to give leave under this ground.

Draft ANoA §§3-8 – Proprietary Estoppel

18.D1 has described this ground as an “appeal on procedure”, ie the court is duty bound to make a ruling on this plea in any event, and that D1 never accepted that it would add nothing to the constructive trust claim.

19.As a matter of record, P’s summary of what transpired through the trial on this plea accords with my recollection. In short, as recorded in §2 of the Judgment, I was given to understand that parties agreed on 3 issues, namely the Trust Claim, the AP Claim and the issue of illegality.

20.No ink was spilled on this plea in D1’s written closing submissions, and as P pointed out, at footnote 2 of P’s written closing submissions it was recorded that D1’s counsel confirmed that proprietary estoppel adds nothing to the constructive trust claim. I heard nothing during the oral closing submissions to the contrary.

21.This plea having been pleaded is one thing, but what argument to run and abandon are matters for the counsel and the party is bound by the same: Chong Ching Yuen v HKSAR (2004) 7 HKCFAR 126 at 143 quoting with approval the judgment of Gleeson CJ in R v Birks (1990) 48 A Crim R 385:-

“As a general rule, a party is bound by the conduct of his or her counsel, and counsel have a wide discretion as to the manner in which proceedings are conducted. Decisions as to ... what lines of argument to pursue and what points to abandon, are all matters within the discretion of counsel and frequently involve difficult problems of judgment. ...”

22.The above principle has been applied in Progetto Jewellery Co Ltd v Lau Chiu Ying & Anr [2022] 2 HKLRD 845 at §26-27.

23.I am unable to accept that this ground has a reasonable prospect of success and thus I shall refuse to give leave for this ground.

Draft ANoA §10(a) – the Constructive Trust Claim with factual challenges

24.The factual challenge to §18 of the Judgment, as formulated in D1’s submissions, is apparently that I failed to take into account the following matters:-

24.1 The caring godmother and godson relationship between the Deceased and D1;

24.2 The Deceased would not have ever thought of D1 evicting her even after purchasing the Flat;

24.3 The conversation/utterance that as long as D1 would pay the mortgage instalments, the Flat would be his;

24.4 D1 and his brother were named in the WK Ma Solicitors’ note of 5 August 2002.

25.As to 24.1, this particular fact was firmly in my mind, and in fact I made reference to it at §12.3 of the Judgment. This also informed my conclusion, at §16 of the Judgment, that the Deceased had said to D1 those things listed at §7 of the Judgment.

26.As to 24.2, it is not understood why this would influence the conclusion either way. The competing scenarios are that D1 acquired outright ownership as at acquisition and D1 acquiring ownership after the Deceased’s demise, neither would be contradicted by D1 having no intention to evict the Deceased.

27.As for 24.3, this seems to be a part of the conversation/utterance that was expressly referred to in §7 of the Judgment and found to have been made in §16 of the Judgment. The difference is that I found the conversation/utterance to include not just payment of mortgage instalments, but also a bequeath only upon the Deceased’s demise. Taking away this element renders what was uttered substantially different, in other words, it would in fact be wrong to carve out this particular part from the context and consider it separately.

28.In any event, if the complaint goes to weight to be attached to this carved-out fact, then I am not persuaded that I gave it so little weight that my conclusion would be materially undermined or one no reasonable judge could have reached (Wong Myra Repizo v Ling Fung Coach and School Service Co Ltd (unreported, CACV 64/2015, 7.12.2015) at §§23-24).

29.As for 24.4, it is not understood why this would push the conclusion towards outright ownership of D1. The facts were simply that the Deceased was in a close relationship under the daily care of D1 and that the 2002 Will was to be made to bequeath the Flat to D1, so D1 and even his brother taking up liaison task, accompanying the Deceased to meet the solicitors etc would not contradict the conclusion that D1 was only to become the “real” owner upon the Deceased’s demise.

30.I see no reasonable prospect of success under this ground and will not grant leave.

Draft ANoA §10(b) – the Constructive Trust Claim without factual challenges

31.The core of this ground lies in the argument that intentions on the part of D1 and the Deceased need not be the “same” but only sufficiently “common”, and for the latter, the intention of D1 being that he was to become owner in 2002 (when the Flat was acquired under the name of the Deceased), this would “cover” an intention that he would become the owner in 2005 (when the Deceased passed away).

32.This argument is rather peculiar and novel. For my part and for the present purposes, I can only say that on my understanding the law requires a true “common” intention, ie both parties had to have the intention that D1 shall become owner at a specific point in time or upon an event, and that specific point in time or event must be “common” or the “same”.

33.It is for D1 to bring this novel proposition, which is against my understanding of the applicable principles, to the Court of Appeal (if so advised). Applying those principles that are trite, I am unable to see a reasonable prospect of success.

Draft ANoA §11 – the Resulting Trust Claim

34.Unfortunately again, the argument now advanced under this ground and pertaining to this issue was entirely missing from D1’s closing submissions.

35.Be that as it may, the rationale behind my analysis at §§21-22 of the Judgment was that:-

35.1 Just as explained in Underhill & Hayton at §26.09: “when property is bought by A and B in the name of A, and there is no evidence that B intended a gift, and no express written declaration of trust, and no presumption of advancement between the parties, it is presumed that B does not intend A to take the whole property beneficially for himself. Failure to rebut this presumption by A leads to the imposition of a resulting trust in B’s favour, to the extent of his contributions.” (emphasis added);

35.2 In the present case, of course the presumption of D1 not intending the Deceased to take the whole beneficial interest in the Flat stood, hence the consequence should be that D1 should take beneficial interest to the extent of his contributions;

35.3 D1’s pleaded claim under this head, ie according to his Counterclaim prayer, was for the entire beneficial interest in the Flat and there was no alternative prayed;

35.4 The evidence was such that I found D1 did not contribute to the entire extent of the purchase of the Flat;

35.5 It was in the above context I came to the analysis that D1’s pleaded claim was not made out and hence dismissed the same.

36.Speaking of D1’s argument now, which relies on what I found to have been said by the Deceased to D1 (§7 of the Judgment) and seeks to turn back and rely on there being an agreement between D1 and the Deceased that D1 was to be responsible for 100% of the mortgage payment, and in turn crystallisng a 100% beneficial interest for D1 upon acquisition of the Flat. This is to ignore the following:-

(a) This would be importing, through a backdoor, a “morphed” intention on the part of the Deceased as found, excising the part regarding bequeath upon demise, to make it “common” with the intention of D1;

(b) As such, it also amounts to a backdoor attempt at another form of common intention constructive trust.

37.I therefore cannot accept this argument and thus do not find a reasonable prospect of success in this ground.

Conclusion

38.For the above reasons I am unable to grant leave to appeal on any of the grounds proposed in the Draft ANoA.

39.I do not see why costs should not follow the event and therefore order that D1 shall pay to P:-

39.1 Costs of and incidental to the Summons filed on 26 June 2023 in any event, to be taxed if not agreed;

39.2 Costs of the Summons filed on 29 May 2023, with certificate for counsel, to be taxed if not agreed.

40.D1’s costs are to be taxed in accordance with Legal Aid Regulations.

Mr Vincent Lung, instructed by O Tse & Co, for the plaintiff

Mr Jerome Liu, instructed by Wong & Tang, assigned by the Director of Legal Aid, for the 1^st defendant