Chan King Chang and Another v. 劉俊民 and Others

DCMP 3166/2018

[2023] HKDC 1854

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 3166 OF 2018

————————

————————

————————

————————

JUDGMENT

————————

Introduction

1.This is a dispute between siblings over a landed property, namely, 1/3^rd shares of Lot 776 in Demarcation District 225, Sai Kung, New Territories (“the land”) with the exclusive right to the Ground Floor of a house built thereon known as Ground Floor, No 53 Sheung Yeung, Sai Kung, New Territories (“the property”).

2.At the commencement of the trial, Mr Foster Yim, who appeared with Mr Billy Mok, counsel for the 4^th defendant, informed this court that the 4^th defendant would withdraw the defence of illegality.

Absence of the 2^nd defendant

3.At the trial, the 2^nd defendant was absent.

4.Notices of the pre-trial review and the trial were sent by court to all defendants including the 2^nd defendant. The 2^nd defendant did attend the pre-trial review on 20 June 2023.

5.I am satisfied that the 2^nd defendant did have notice of the trial and it was his decision not to attend the trial.

The 4^th defendant’s amendment application

6.One day before the commencement of the trial, the 4^th defendant took out a summons applying to amend the re-amended defence and counterclaim.

7.Mr Yim submitted that the amendment was only technical in nature and raised no new issue.

8.The 4^th defendant’s application is not only late, but also without any explanation as to its lateness. Furthermore, in the pre-trial review on 20 June 2023, Mr Yim also appeared for the 4^th defendant, the court was not informed of his intention to amend the defence.

9.By the proposed amendment, the 4^th defendant is alleging that the 1^st and 2^nd plaintiffs are holding the land on common intention constructive trust as opposed to an express trust. The amendment is in fact introducing a new issue.

10.Legal representatives are expected to tidy up all loose ends well before the commencement of the trial. Last minute application would not be viewed favourably by the court.

11.For the above reasons, I therefore dismissed the 4^th defendant’s application.

12.Miss Emma Wong, counsel for the plaintiffs, applied for costs of the summons, which was not opposed by Mr Yim.

13.I therefore awarded costs to the plaintiffs with certificate for counsel, to be taxed if not agreed.

14.For taxation purpose, half an hour was spent in dealing with the summons.

The plaintiffs’ case

15.The 1^st and 2^nd plaintiffs are husband and wife and the owners of the property.

16.Lau Koon Ping, the eldest brother of the 2^nd plaintiff and the father of the 1^st defendant, was originally named as the 4^th defendant. He passed away during the course of the present action. By the order of Master Maurice Lam dated 8 October 2021, the 1^st defendant was appointed to represent his estate. (For ease of reference, he shall be referred to as the 4^th defendant in this judgment.) The 1^st defendant is the father of the 2^nd defendant.

17.In the early 1970s, at the request of the father of the 2^nd plaintiff and the 4^th defendant, Lau Kiu (“the father”), the 1^st and 2^nd plaintiffs agreed and to acquire a piece of land in the name of the 4^th defendant from the government and to build a house thereon. Subsequently, a house was built on the land in 1976.

18.By a Deed of Gift dated 23 June 1976, the 4^th defendant transferred the legal title of the land together with the house thereon to the 1^st and 2^nd plaintiffs.

19.The 1^st and 2^nd plaintiffs granted a licence to the father, Lok Yau Mui (the mother of the 2^nd plaintiff, (“the mother”), Lau Koon Sung (“Koon Sung”), the younger brother of the 2^nd plaintiff and the 4^th defendant and his family, to live in the property whereas the 1^st and 2^nd floors of the house were used by the 1^st and 2^nd plaintiffs as their vacation home.

20.In July 1980, the 1^st and 2^nd plaintiffs sold the 1^st and 2^nd floors to the father and Lau Ping Kwong (“Ping Kwong”), the elder brother of the 2^nd plaintiff, for $245,000.

21.In about 1984, Koon Sung and his family moved out of the property. The father and the mother continued to live therein.

22.The father passed away in May 1993. At the request of the mother, the 1^st and 2^nd plaintiffs allowed the 2^nd defendant to live with the mother in the property.

23.In about 2010, the mother moved to an elderly home.

24.In about 2011, the 1^st and 2^nd plaintiffs granted a licence to the 1^st defendant to live with the 2^nd defendant in the property.

25.In about April 2014, it was agreed between the 2^nd plaintiff and the 1^st defendant that the 2^nd plaintiff would extend the licence granted to the 1^st and 2^nd defendants in relation to the property for 2 years at a licence fee of $1,000 per month.

26.No licence fee was paid by the 1^st defendant.

27.The 2^nd defendant and his female friend have failed to move out and remained in occupation of the property.

The defence of the 1^st, 2^nd and 4^th defendants and the counterclaim of the 4^th defendant

28.In about 1973, the father applied to the District Office, Sai Kung, for land to build a small house.

29.The application was approved in about mid 1974 whereby the 4^th defendant was permitted to acquire a piece of land (Lot 769 in Demarcation District 225, Sai Kung, hereinafter referred to as “Lot 769”). At about the same time, the 4^th defendant’s younger brother, Ping Kwong, was permitted to acquire a piece of adjoining land.

30.The 4^th defendant did pay $1,500 to $1,800 for the purchase of Lot 769 and later a premium of $50 for the purpose of deferring the completion of the small house to not later than 24 July 1976.

31.Lot 769 was subsequently surrendered to the Government in exchange for the land on or about 14 November 1975.

32.As the 4^th defendant did not have the money to build the house, he invited the 1^st plaintiff to pay for the construction costs of the house on the land which belonged to him. The 1^st plaintiff agreed to the proposal on condition that he would have the 1^st and 2^nd floors of the house upon completion, which was agreed to by the 4^th defendant.

33.Upon the request of the 1^st plaintiff and his promise that he would transfer the land back to the 4^th defendant when both the father and the mother passed away, the 4^th defendant executed a Deed of Gift on 23 June 1976 transferring the land to the 1^st and 2^nd plaintiffs. The 4^th defendant also handed over the title deeds to the 1^st plaintiff.

34.The 4^th defendant granted a licence to the father, the mother and the 1^st defendant to live in the property whereas the 1^st and 2^nd floors were used by the 1^st and 2^nd plaintiffs as their vacation home.

35.The 2^nd defendant had been living and is still living in the property under a licence granted by the 4^th defendant.

36.The father passed away in May 1993. The 4^th defendant continued to permit the mother, the 1^st and 2^nd defendants to live in the property.

37.The 1^st defendant says that he was asked by the 2^nd plaintiff to sign on a piece of paper in about April 2014 because he wanted to continue to live in the property. He did not read the contents thereof, nor were they explained to him before he signed. He was not asked to pay any licence fee or rent.

38.The 4^th defendant counterclaims for a declaration that the 4^th defendant is the sole beneficial owner of the property; that the Deed of Gift was null and void and be set aside; and that the 1^st and 2^nd plaintiffs hold the property on express trust or alternatively on resulting trust for the 4^th defendant.

The issues

39.Hotly in dispute between the parties is the existence of 2 agreements, which will be dealt with in turn.

Whether there was an agreement between the 1^st plaintiff and the 4^th defendant that upon completion of the house that was built on the land, the 1^st plaintiff would have the 1^st and 2^nd floors whereas the 4^th defendant would have the ground floor thereof?

40.The 1^st and 2^nd plaintiffs said one day in early 1970s, the father mentioned to them that the ancestral house was too congested and he wanted to move out.

41.Thereafter, the father asked for money from them. They later came to know that the father was using the money to apply to the Government for land.

42.In July 1973, Lot 769 was granted to the 4^th defendant at a premium of $1,750, which was paid for from the money the 1^st and 2^nd plaintiffs gave to the father.

43.The father told the 1^st and 2^nd plaintiffs that the 4^th defendant did not have the financial capability to defray the relating expenses. Therefore, if they shouldered the construction costs, the house so built would become theirs.

44.The 1^st and 2^nd plaintiffs said they had all along been supporting the living and also repaying the gambling debts of the 4^th defendant. The 4^th defendant was owing them a lot of money already. Also, the father and the mother had had too much conflicts with the 4^th defendant in the same household. Out of filial piety and in order to provide a good living environment for the parents, they agreed to the proposal of the father. The father told them that the 4^th defendant had already agreed to the proposal.

45.Therefore, it was the consensus of the family that the 4^th defendant would apply to the Government for land to build a house, the costs of acquisition of the land and the construction of the house would be borne by the 1^st and 2^nd plaintiffs. The house so built would be owned by the 1^st and 2^nd plaintiffs. The ground floor of the house (ie the property) would be used as residence for the parents whereas the 1^st and 2^nd floors would be used as a meeting place for the siblings and their children during holidays.

46.Due to objection of the villagers, the house could not be built on Lot 769 within the requisite 24 months. The land was subsequently granted to the 4^th defendant in exchange for Lot 769.

47.The 1^st and 2^nd plaintiffs spent around $80,000 on construction costs.

48.After a letter of compliance was issued, the parents moved into the property. The 1^st and 2^nd floors were used by the 1^st and 2^nd plaintiffs as their vacation home.

49.The father arranged for the transfer of ownership of the house to the 1^st and 2^nd plaintiffs. He engaged Peter Mark & Co to do the legal formalities and instructed the 4^th defendant to sign a Deed of Gift on 23 June 1976 transferring the ownership to 1^st and 2^nd plaintiffs.

50.The title deeds of the house were all along kept by the 1^st and 2^nd plaintiffs.

51.On 9 July 1980, the 1^st and 2^nd plaintiffs sold the 1^st and 2^nd floors to the father and Ping Kwong at the price of $245,000. Thereafter, Ping Kwong and his family moved into the 1^st floor and lived there until 1986/1987.

52.The 2^nd plaintiff said that the property was used as the residence of her parents. Between 1977 and 1986, the 1^st and 2^nd plaintiffs allowed Koon Sung and his family to live in the property with the parents. After they emigrated to the United States in 1985, they had allowed Lau Ka Yee (the daughter of the 4^th defendant) to live in the property until 1988. Sometime after 1993, the 1^st defendant and his girlfriend moved into the property. After the passing of the father in 1993, the 2^nd plaintiff agreed to allow the 2^nd defendant to live in the property from time to time so that he could be looked after by the mother. Between 2006 and 2009, an Indonesian domestic helper was hired to look after the mother (after she suffered a stroke). The 2^nd defendant was living in one of the rooms in the property. After the mother moved into an elderly home in 2009/2010, the 1^st and 2^nd plaintiffs allowed the 1^st defendant to live in the mother’s room in the property.

53.As the 2^nd plaintiff was getting old, she planned to move back to Hong Kong. After the passing of the mother in July 2011, she had asked the defendants to return the property to her many times but to no avail. As the property was occupied by the 1^st and 2^nd defendants, she had to stay in the ancestral house with the 4^th defendant and his family whenever she came to Hong Kong.

54.In April 2014, the 2^nd plaintiff came back to Hong Kong by herself. Accompanied by a fellow villager, Lau Cho Hing (“Lau CH”), she discussed with the 1^st defendant about his moving out of the property. At that time, the property was occupied by the 1^st and 2^nd defendants and the girl friend of the 2^nd defendant. The 1^st defendant said he would require time to look for a place. As the 1^st and 2^nd defendants were her relatives, the 2^nd plaintiff agreed to give them 2 years’ time (ie from April 2014 to April 2016) on condition that the 1^st defendant would pay a licence fee of $1,000 per month. Lau CH wrote out an agreement to which the 1^st defendant agreed and signed. The 1^st defendant, however, did not pay any licence fee nor did he return the property to the 1^st and 2^nd plaintiffs.

55.The 2^nd plaintiff said she treated the 4^th defendant very nicely. Prior to his marriage, she used to give him presents from time to time. The 4^th defendant was a habitual gambler and was always chased after for debts. His gambling debts were all settled by her. After he was separated from his first wife, the 2^nd plaintiff bought a Volkswagen small lorry registration AB8445 for him to run a car for hire business.

56.The 1^st and 2^nd plaintiffs categorically denied that the house was built pursuant an agreement between the 1^st plaintiff and the 4^th defendant that the 4^th defendant provided the land and the 1^st plaintiff provided the construction costs.

57.The case of the 4^th defendant was narrated by the 1^st defendant.

58.The 1^st defendant said that the premium of Lot 769 around $1,500 to $1,800 was paid by the 4^th defendant out of his own fund. Further, the $50 required to be paid to the Government for extending of time to complete the house was also paid by the 4^th defendant. The Agreement and Conditions of Exchange (for the land) dated 14 November 1975 was executed by the 4^th defendant.

59.The 1^st defendant said that after the execution of the Condition of Exchange, the 4^th defendant told the 1^st plaintiff that he did not have the money to build the house on the land. He invited the 1^st plaintiff to co-operate with him whereby he would provide the land and the 1^st plaintiff would bear the construction costs of the house.

60.The 1^st plaintiff proposed that upon completion of the house, he would have the 1^st and 2^nd floors whereas the 4^th defendant would have the ground floor thereof. The 4^th defendant agreed to the 1^st plaintiff’s proposal which was however not reduced into writing.

61.After the house was completed in about June 1976, the 1^st plaintiff complained to the 4^th defendant that he had nothing in hand and requested the 4^th defendant to transfer the legal title of the land to him. He promised that he would transfer the land back to the 4^th defendant upon the passing of both the father and the mother.

62.The 4^th defendant trusted the words of the 1^st plaintiff and handed over the title deeds and the certificate of completion of the house to the 1^st plaintiff to arrange for the legal formalities. A Deed of Gift dated 23 June 1976 was executed by the 4^th defendant in favour of the 1^st and 2^nd plaintiffs.

63.The 1^st defendant said the 4^th defendant granted a licence to the father, the mother and himself to live in the property. In one year, he also granted a licence to Koon Sung and his family to live in one of the rooms in the property. The 1^st and 2^nd floors were used by the 1^st and 2^nd plaintiffs as their vacation home.

64.In 1985, the 2^nd defendant was born. Since then, he has been living in the property under a licence granted by the 4^th defendant.

65.After the death of the father, the mother, the 1^st and 2^nd defendants continued to live in the property with the permission of the 4^th defendant.

66.When the mother moved to an elderly home in about 2010, the 1^st and 2^nd defendants were permitted by the 4^th defendant to continue living in the property.

67.The 1^st defendant said that one night in April 2014, the 2^nd plaintiff alone visited the property and told him that the property is under her name and she was in possession of the title deeds. The 2^nd plaintiff told him to sign on a paper if he still wanted to stay in it, the contents of which were not explained to him. He was not asked to pay any fee or rent, nor was he told that he would only be allowed to stay in the property for 2 years. The 1^st defendant said because he wanted to stay in the property, he signed on the paper without paying attention to the contents. Afterwards, he did not consult the 4^th defendant about the incident.

68.To my mind, landed property is an important asset to most people. No reasonable person would give away his landed property easily.

69.Viewed in this light, if the 4^th defendant was entitled to retain the ownership of the property pursuant to the agreement between him and the 1^st plaintiff, his act of transferring all the interest in the land and the whole house to the 1^st and 2^nd plaintiffs shortly after its completion is at odds with common sense. This is particularly so when, as it seems, the property was his only landed property.

70.In my view, the 4^th defendant, being a mature person at the material time, must have executed the Deed of Gift for a reason.

71.The 1^st defendant said that he did it at the request of the 1^st plaintiff who wanted to have something in hand. If that is the case, the 4^th defendant could simply transfer the title of the 1^st and 2^nd floors to the 1^st plaintiff in pursuance of agreement between them. He was not obliged to do anything over and above the agreement, particularly it was done to his disadvantage.

72.On the other hand, the 1^st and 2^nd plaintiffs have provided a plausible reason for the 4^th defendant to do so, that because he had made no contribution to the acquisition of the land and the construction of the house. And that he was owing the 2^nd plaintiff money due to the settlement of his gambling debts by the 2^nd plaintiff. It was the father’s decision that the whole house should belong to the 1^st and 2^nd plaintiffs.

73.Mr Yim and Mr Mok placed heavy emphasis on the village’s traditional value of “preferring male over female” so that it is highly unlikely the father would exploit the “ding” right of his eldest son (ie the 4^th defendant) and left nothing to his eldest son by directing the whole house be transferred to the 1^st and 2^nd plaintiffs.

74.Whilst the father might be a traditional village people, it does not follow that he would make his decision regardless of the actual circumstances.

75.It must be noted that at the material time, the father was faced with the situation of an overcrowding living environment and lack of financial resources of building a new and additional house. As the 1^st and 2^nd plaintiffs were better off, they were the only source of financial support. The father must offer sufficient incentive in order to gain their support or else the living environment of the family would not improve. That being so, it is not surprising and in fact reasonable for the father to make the decision as testified by the 2^nd plaintiff.

76.The 2^nd plaintiff has given a detailed account of the various people who have lived in the property over the years. It seems to me that she was in overall control of the property and whoever living in the property must have her prior consent. On the other hand, the 1^st defendant did not provide details of the people who had lived in the property. I prefer the 2^nd plaintiff’s evidence as more credible.

77.By reasons of the aforesaid and on balance of probabilities, I accept the 1^st and 2^nd plaintiffs’ evidence and reject the 1^st defendant’s evidence.

78.I find that there was no such agreement between the 1^st plaintiff and the 4^th defendant. By the Deed of Gift dated 23 June 1976, the 1^st and 2^nd plaintiffs became the owners of the whole house (including the property) built on the land.

Whether there was an agreement between the 1^st plaintiff and the 4^th defendant that the land would be transferred back to the 4^th defendant upon the passing of the father and the mother?

79.Given my findings above, this question can be dealt with briefly.

80.By reason of the fact as I find that the 1^st and 2^nd plaintiffs became the owners of the whole house, there is no question of the 1^st plaintiff transferring the land back to the 4^th defendant.

81.As a matter of logic, the alleged agreement of the 4^th defendant is in conflict with his allegation that he was only entitled to own the property.

82.After the mother passed away in 2011, no action had been taken by the 4^th defendant to enforce the alleged agreement. In my view, the inaction of the 4^th defendant is a clear demonstration that there was no such agreement.

83.Furthermore, when the 1^st defendant was asked by the 2^nd plaintiff to sign on a paper in April 2014, he did so without raising any protest. It seems that in his mind, the property belonged to the 2^nd plaintiff and the 4^th defendant had no entitlement to it. That also explains why he did not raise the matter with the 4^th defendant afterwards.

84.Accordingly, my answer to this question is in the negative.

The defence and counterclaim

85.By reason of my findings on the 2 questions, the defence of the 1^st, 2^nd and 4^th defendants and counterclaim of the 4^th defendant must be dismissed.

Reliefs

86.By reason of my findings, the 1^st and 2^nd plaintiffs are entitled to possession of the property against the 1^st, 2^nd and 3^rd defendants and I give judgment in favour of the 1^st and 2^nd plaintiffs accordingly.

87.The 1^st and 2^nd plaintiffs also claim the sum of $24,000 being the licence fee for the period from April 2014 to April 2016 at the rate of $1,000 per month. However, in the undated Chinese note signed by the 2^nd plaintiff and the 1^st defendant, it only stated that the property was rented by the 2^nd plaintiff to the 1^st defendant for 2 years from April 2014 to April 2016 for the sum of HK$1,000. The 2^nd plaintiff must be bound by the clear words of the agreement.

88.Accordingly, I only give judgment in favour of the 2^nd plaintiff against the 1^st defendant for the sum of $1,000 together with interest thereon at 1% above the best lending rate of HSBC from 1 May 2016 to the date of the judgment and thereafter at judgment rate until payment.

89.In relation to the claim of damages for trespass of the property after the expiration of the licence, ie from May 2016 until vacation possession is delivered to the 1^st and 2^nd plaintiffs, the parties have agreed at the sum of $9,000 per month. The 1^st and 2^nd plaintiffs are entitled to the same and I give judgment against the 1^st and 2^nd defendants accordingly.

90.In relation to the 4^th defendant, the 1^st and 2^nd plaintiffs claim for (a) a declaration that they were and still are the sole legal and beneficial owners of the land; and (b) damages for procurement of a breach of the 2014 licence.

91.In respect of the first claim, the 1^st and 2^nd plaintiffs had sold the 1^st and 2^nd floors to the father and Ping Kwong in 1980. They are no longer the sole legal and beneficial owners of the land. As such, they are not entitled to the declaration.

92.In respect of the second claim, Miss Wong submitted that it is the 2^nd plaintiff’s evidence that in April 2018, she met the 4^th defendant and demanded the 1^st and 2^nd defendants to move out of the property. Since then, the 4^th defendant and the 1^st defendant had threatened the 2^nd plaintiff to do harm to her unless she allowed the 1^st and 2^nd defendants to live in the property. Her evidence was supported by Ping Kwong. Therefore, it shows that the 4^th defendant had knowledge about the 1^st defendant’s contractual obligation under the licence agreement between the 1^st defendant and the 2^nd plaintiff. The 4^th defendant aimed at causing injury to the plaintiffs by encouraging the 1^st defendant not to deliver vacant possession of the property back to the plaintiffs and assisting the 1^st defendant by lodging a wrongful claim against the plaintiffs for beneficial ownership of the property. Therefore, the 4^th defendant is jointly and severally liable with the 1^st and 2^nd defendants for the plaintiffs’ loss of use of the property.

93.With respect, the submission of Miss Wong is too far-fetched.

94.It must be remembered that the licence expired in April 2014. The 1^st defendant had failed to return the property to the 2^nd plaintiff after the expiration of the licence. Nor did he pay the licence fee under the licence. There is no evidence to suggest that the breach of the licence by the 1^st defendant has anything to do with the 4^th defendant. According to the 1^st defendant, he did not even consult the 4^th defendant after he had signed the licence.

95.The behaviour of the 4^th defendant in 2018 might have been triggered by many reasons. For example, it might be that the 4^th defendant was unhappy that his son and grandson were demanded by his younger sister to move out of the property. Or that he was upset by the fact that his son and grandson would be facing the difficulty of looking for a place to live. In any event, such behaviour of the 4^th defendant cannot be evidence that he had knowledge of the contractual obligation of the 1^st defendant and had encouraged the 1^st defendant not to deliver possession of the property to the plaintiffs in 2016.

96.Therefore, I do not accept that the second claim is made out.

97.Accordingly, I dismiss the 1^st and 2^nd plaintiffs’ claim against the 4^th defendant.

Costs

98.I make a costs orders nisi that:

(a)  The 1^st and 2^nd defendants shall pay the 1^st and 2^nd plaintiffs the costs of this action (including all costs reserved) with certificate for counsel, to be taxed if not agreed; and

(b)  There be no order as to costs between the 1^st and 2^nd plaintiffs and the 4^th defendant.

99.In the absence of any application for variation by summons within 14 days from the date of this judgment, the costs orders nisi shall become absolute.

Ms Emma Wong, instructed by Jimmie K. S. Wong & Partners, for the 1^st and 2^nd Plaintiffs

Mr Foster Yim leading Mr Billy Mok, instructed by K. B. Chau & Co, for the 4^th Defendant

The 1^st Defendant appeared in person

The 2^nd and 3^rd Defendants were not represented and did not appear