Chinachem Agencies Ltd v. Kung Yan Sum
Read the full judgment text of HCA 2022/2019 on BabelCite. This High Court CFI judgment was delivered on 5 August 2024.
1. The circumstances of the demise of the late Madam Nina Wang, the “Matriach” of the Chinachem Group of companies in Hong Kong (“ Chinachem Group ”), and the estate she left upon her death, are well-known in the local community. The dust settled with the conclusion of the litigation relating to her estate, but there are still residual and minor claims made by and against Madam Wang’s siblings in respect of the accommodation which had been provided to them by Madam Wang and the Chinachem Group a
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HCA 2022/2019 [2024] HKCFI 2010 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 2022 OF 2019 _____________ BETWEEN
_____________ AND ACTION NO 2024 OF 2019 _____________ BETWEEN
_____________ AND ACTION NO 2025 OF 2019 _____________ BETWEEN
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_______________ J U D G M E N T _______________ Background 1.The circumstances of the demise of the late Madam Nina Wang, the “Matriach” of the Chinachem Group of companies in Hong Kong (“Chinachem Group”), and the estate she left upon her death, are well-known in the local community. The dust settled with the conclusion of the litigation relating to her estate, but there are still residual and minor claims made by and against Madam Wang’s siblings in respect of the accommodation which had been provided to them by Madam Wang and the Chinachem Group at her instructions prior to her death. This action relates to the claims made by the Plaintiff, which is a member of the Chinachem Group, for recovery of various units in No 40 Vista Mount Davis, Nos 52-54 Mount Davis Road (“Premises”) of which the Plaintiff is the tenant, and which were provided by the Plaintiff to the siblings as rent-free staff quarters, allegedly under a licence which is revocable by the Plaintiff at will, or alternatively upon reasonable notice. 2.The defendants in these proceedings are Kung Yan Sum 龔仁心(“Doctor Kung”), Madam Kung Yan Sum 龔因心 (“Miss Kung”), Madam Liu Yuan Chun 劉元春 (Doctor Kung’s wife) (“Mrs Kung”), and Miss Gong Zhongxin 龔中心 (“Miss Gong”). Doctor Kung, Miss Kung and Miss Gong are the younger brother and 2 sisters of Madam Wang. For ease of reference, they together with Mrs Kung are referred to as “Siblings”. 3.Much of the factual background is undisputed. 4.The Plaintiff’s case is that the Siblings were all employed by the Plaintiff which is a member of the Chinachem Group. Doctor Kung and Mrs Kung signed employment contracts with the Plaintiff in November 1980. Miss Kung and Miss Gong also signed contracts of employment with the Plaintiff, respectively in August 1990 and April 2008 (the latter was after Madam Wang’s death on 3 April 2007). 5.On the Plaintiff’s case, during the course of the Siblings’ employment, accommodation had been provided to them from time to time by the Plaintiff and/or the companies within the Chinachem Group, on a rent-free basis, as staff quarters. Doctor Kung and his wife had been provided accommodation at Flat E, Ground Floor, University Heights, 42-44 Kotewall Road (“University Heights”) after their arrival in Hong Kong from Shanghai in June 1980. Miss Kung came to Hong Kong in 1990, commenced employment with the Plaintiff in August 1990, and also moved to Flat A1, 1st Floor at University Heights provided by the Plaintiff in 2006. Miss Gong moved to Hong Kong from the USA in 2007, and also took up residence at Flat A3, 8th Floor, University Heights. After Madam Wang’s demise, Doctor Kung and his wife moved to another unit provided by the Plaintiff at Flat D2, 7th Floor, Block D, University Heights. 6.University Heights underwent redevelopment in August 2012, and the Siblings were all relocated to their respective Premises at Vista Mount Davis. The Siblings’ occupation of the Premises is evidenced by the Plaintiff’s returns to the Inland Revenue Department in respect of its employment of the Siblings, referring to their emoluments as well as their occupation of the Premises provided by the Plaintiff as employer. There were also licence agreements in writing which were signed by/for Doctor Kung and Miss Kung in respect of their occupation of the accommodation provided to them during the different periods of time. These written licence agreements all expressly provide that the licence may be determined forthwith by notice. 7.On the Plaintiff’s pleaded case, each of the Siblings’ occupation of the Premises was by virtue of a licence from the Plaintiff, which is revocable at will or alternatively, upon reasonable notice by the Plaintiff (“Licence”). 8.The Plaintiff claims that the contracts of employment between the Plaintiff and the Siblings expressly provide that their employment may be terminated by 3 months’ prior notice or payment in lieu. The Siblings’ employment was terminated by the Plaintiff’s notices served on the Siblings on 2 August 2019 (“Notices”) which termination became effective on 3 August 2019 by the Plaintiff’s payment in lieu of 3 months’ notice. By the Notices, the Plaintiff informed the Siblings that if they do not sign a Separation Agreement with the Plaintiff by 6 August 2019, they should vacate the Premises within 3 months. There is no dispute, that none of the Siblings signed the Separation Agreement. 9.On the Plaintiff’s pleaded case, the Licence of each of the Siblings was revoked and/or expired, and came to an end on 2 August 2019, or on 2 November 2019 upon the expiry of the reasonable notice period of 3 months. 10.As the Siblings failed to deliver up vacant possession of the Premises, the Plaintiff claims against them for possession of the Premises, mesne profits in respect of their occupation at the market rent of $61,020 per month or alternatively at a rate to be assessed, and damages. 11.In their Defence, the Siblings do not take issue with the employment agreements or their terms for termination. The Siblings rely simply on estoppel by convention and claim that the Plaintiff is estopped from evicting them from the Premises, without providing them with alternative accommodation of comparable standard or quality. They claim that their right to reside in the Premises did not arise by virtue of their employment relationship with the Plaintiff, nor from the Licence alleged by the Plaintiff, but by virtue of their relationship with Madam Wang and their family agreement or understanding. 12.In gist, the Siblings claim that Madam Wang, as the eldest daughter of the Kung family, had assumed the role of taking care of her mother and her younger siblings over the decades. She had supported the Kung family financially, by remitting money to the Siblings in the Mainland since the 1950s, and later by providing residences for them when they came to settle in Hong Kong. Doctor Kung and Mrs Kung claim that they had been persuaded by Madam Wang to move from Shanghai to Hong Kong and to settle in Hong Kong permanently in around June 1980. At that time, Doctor Kung was not qualified to practise medicine in Hong Kong, and he and his wife only had limited financial means. On their pleaded case, the Siblings claim that Madam Wang had given assurances to each of them that should they come to Hong Kong and settle here, she would provide them with accommodation in Hong Kong, and would arrange for companies and entities within her control in the Chinachem Group to make such provision for the Siblings, for so long until and unless the Siblings decide to decline or terminate such provision. 13.The Siblings claim that it was pursuant to such agreement and consensus or common understanding between Madam Wang and each of the Siblings that they moved to Hong Kong, and Madam Wang had arranged for accommodation to be provided to each of the Siblings for their residence at different points in time, including the accommodation at University Heights. The Siblings claim that even after Madam Wang’s death on 3 April 2007, the Siblings had continued to reside at University Heights, until the redevelopment of such property by the Chinachem Group in 2012, when the Siblings were provided with accommodation at the Premises by the Plaintiff. 14.On the Siblings’ pleaded case (at paragraph 17 of the Siblings’ respective Defence):
15.Other matters pleaded from paragraphs 21 to 39 of the respective Defence and Counterclaim of the Siblings, relating to (inter alia) the administration of the estate of Madam Wang by Pricewaterhouse Coopers, and the allegedly wrongful removal of Doctor Kung and Mrs Kung from the directorship of the Chinachem Charitable Foundation Ltd, have been struck out by the Court as irrelevant and scandalous/frivolous, and shall not be dealt with in this Judgment. 16.The issues in dispute for determination by the Court at trial are simply the basis of the Siblings’ entitlement to stay in the Premises, whether the Plaintiff is entitled to terminate the relevant Licences by service of the Notices, and whether the Plaintiff is estopped from evicting the Siblings, as they allege. The Siblings bear the burden of proving the existence of the estoppel by convention they assert in the Defence and Counterclaim. Applicable legal principles 17.The essential elements of an estoppel by convention, which is the defence raised by the Siblings, are summarized at paragraph 79 of the judgment of Lord Collins of Mapesbury NPJ in First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd (2012) 15 HKCFAR 569, where he referred to Unruh v Seegerger (2007) 10 HKCFAR 31, and observed as follows:
18.Counsel for the Plaintiff also relies on the important statement of principles set out at para 52 of the judgment of the Court in Tinkler v Commissioners for Her Majesty’s Revenue and Customs [2021] UKSC 39:
19.The Siblings’ case rests on what Madam Wang had allegedly told them by way of assurances as to how they would be provided for should they come to Hong Kong. Madam Wang of course died in April 2007, long before the commencement of these proceedings, and there can be no evidence from her to either refute, or admit the Siblings’ assertions. In this regard, the courts have emphasized that where one party is asserting a benefit allegedly given to him or her by a person who has died (and who would not be able to give the deceased’s version of events on what had taken place), the court must exercise special caution, and approach the claims made with some suspicion, particularly when the only or principal witness in support of the claim is the donee (see Yung Shu Wu v Vivienne Sung Wu & Ors (2011) 14 HKCFAR 39). In such a case, the alleged donee assumes “a very heavy burden of proof” (para 74 of the judgment of Lord Walker of Gestingthorpe NPJ in Yung Shu Wu) to satisfy the court that the deceased had made a clear gift. Counsel for the Plaintiff pointed out that such principle extends beyond claims of outright gifts from a deceased, to apply to claims of benefits or life interests said to have been conferred by the deceased generally (Chen Tek Yee v Chan Moon Shing, unreported, CACV 136/2015, 29 February 2016). The shared or common assumption 20.It has to be borne in mind that the defence of estoppel by convention is asserted against the Plaintiff, and not Madam Wang or her estate. The Siblings’ pleaded case (in paragraph 17(2) of the respective Defence) is that the Plaintiff’s provision of the Premises was on the basis of the “adopted and shared” common assumption that the Siblings were at all material times entitled to be provided with premises for residence and for so long unless and until the Siblings decide to decline or terminate the same (“Common Assumption”). 21.As pleaded in paragraph 11 of the Defence, the Common Assumption was adopted by the Plaintiff and the Siblings, as a result of or arising from the agreement and consensus, or alternatively, the common understanding of the Kung family that Madam Wang would, whether by herself personally, through other entities within her control or to be procured by her in the Chinachem Group or otherwise, “provide the Siblings with residence in Hong Kong should they move from the Mainland (or the USA in Miss Gong’s case) or otherwise settle and reside in Hong Kong, for so long until and unless the Siblings decide or decline or terminate their residence” (“Promises”). According to the Further and Better Particulars of the Defence and Counterclaim, the Common Assumption arose as a result of the Promises made by Madam Wang to the Kung family and the Siblings since around 1955 and in 1978, and upon or before each of the Siblings’ agreement to come to Hong Kong to settle, in 1978, 1980, 1990 and 2007. 22.However, the Siblings’ evidence evolved from their pleaded case and, as submitted in their Closing, their evidence is that Madam Wang’s undertaking or promises were (as made to her mother) that when her Siblings arrive in Hong Kong, she would “make appropriate arrangements for their livelihood (妥善安排他們所有人的生活)” (“General Assurance”). As Counsel for the Plaintiff pointed out, this is a more general statement or assurance, when compared with the Promises. It is also more uncertain and vague in terms and meaning. 23.An essential aspect of the Siblings’ evidence at trial is that the Promises and the Common Assumption were private and personal, being an internal family arrangement of the Kungs (家庭安排). 24.Having set out the Siblings’ pleading and essential evidence on the Common Assumption, I will consider each of the relevant elements of an estoppel by conclusion as summarised in Unruh v Seeberger (2007) 10 HKCFAR 31. Whether alleged Common Assumption was shared, communicated and acted upon 25.As explained by Ribeiro PJ in Unruh v Seeberger, for an estoppel by convention to apply, it has to be shown that the parties had assumed or shared a common assumption, that the assumption was communicated between the parties and acted upon, and there must be some mutually manifest conduct by both parties. 26.Even if it can be shown that Madam Wang had indeed made the alleged Promises, that she would make appropriate arrangements for the Siblings should they settle in Hong Kong, and it is very probable that she may have done so, I accept the submissions made for the Plaintiff, that the Siblings have not established how the Promises had been communicated to the Plaintiff, and had come to be adopted or assumed by the Plaintiff, to become an assumption shared between the Plaintiff on the one part, and the Siblings on the other part. The Siblings only claimed that the Promises were known to Mr William Tam (“WT”), who was the General Manager of the Leasing Department of the Chinachem Group, and to the Leasing Department generally. This was denied by WT, but mere knowledge on the Plaintiff’s part of any Promises made by Madam Wang is not sufficient. 27.As highlighted for the Plaintiff, even on the Siblings’ pleaded case, WT only knew of the fact that the Siblings were members of Madam Wang’s family, and that Madam Wang had provided or procured the provision of rent-free accommodation to the Siblings before her death. There is no evidence that WT, the Plaintiff or anyone else within the Chinachem Group had knowledge of the Promises allegedly made by Madam Wang, that accommodation would be provided to the Siblings “for so long as and until the Siblings decide to decline or terminate the residence”. 28.Pertinently, the Siblings claimed in their testimony in Court that the Common Assumption was a private family arrangement, and that it was not necessary for the Siblings or Madam Wang to inform WT, or the Plaintiff, or the Chinachem Group, of their own family arrangement, such that it would not be surprising if WT or the Plaintiff did not have knowledge of the Common Assumption. This does not support the Siblings’ case so far as the existence of the shared assumption, or the communication of such assumption, was concerned. The Siblings do not claim to have evidence of any communication of the Common Assumption between either WT or the Plaintiff and the Siblings. 29.The evidence relied upon by the Plaintiff shows that there was no manifestation by the parties, whether by conduct or by words, that they were proceeding on the basis of the alleged Common Assumption shared, and not any other basis. The Plaintiff highlighted the fact that the Siblings had acknowledged in contemporaneous documents that the Premises had been provided by the Plaintiff to them as staff quarters, due to their being directors or employees of companies within the Chinachem Group. These include the Declaration of Emoluments, Pensions and Compensation filed by Doctor Kung and Mrs Kung, the Employer’s Return of Remuneration and Pensions filed by the Plaintiff in respect of each of the Siblings, and the licence agreements which were signed by Doctor Kung and Miss Kung during the period from September 1997 to September 2007. These licence agreements all expressly provide as follows:
30.There is also a report on the retirement plan of the Chinachem Group, tabled at the meeting of the Executive Committee of the Chinachem Group held on 3 April 2019, attended by Doctor Kung and Mrs Kung, which set out a list of employees who were provided with staff quarters, and these included Doctor Kung, Miss Kung and Miss Gong. 31.All these documents reflect and contain the Siblings’ acknowledgment that the Premises had been provided to them as employees of the Chinachem Group for accommodation as staff quarters, and as licensees of the Plaintiff. The Siblings accept that they never raised query with the Plaintiff or any other company within the Chinachem Group as to the contents of the documents. Nor had they ever clarified with the Plaintiff that they had the right and entitlement to reside at the Premises, or any of the quarters, pursuant to the Promises or the Common Assumption, and not just as staff members occupying staff quarters. 32.On the evidence, the only contemporaneous documents are more consistent with the Plaintiff providing accommodation to the Siblings as employees, pursuant to a licence agreement, rather than reflecting any conduct of the Plaintiff which constitutes a manifestation of the Common Assumption alleged. 33.According to WT who was Head of Leasing of the Chinachem Group until his retirement in December 2020, he had been in charge of sale and leasing matters of the portfolio of properties held by companies within the Chinachem Group including the Plaintiff. From his 44 years of working experience within the Chinachem Group, WT testified that according to his knowledge, certain employees of the Chinachem Group, which included himself, were provided with staff quarters, and such quarters were provided by the Chinachem Group rent-free. According to WT’s evidence, the staff quarters were granted to employees of the Chinachem Group whilst they remained in employment of the Chinachem Group, and were provided at the discretion of the Group. It is WT’s evidence that Madam Wang was the person who decided on who would be offered staff quarters, and that she would advise WT (through one Mr Ng of the Chinachem Group) which property would be offered to the relevant employee. WT would then implement Madam Wang’s decision and make the necessary arrangements with his team, and with the management office of the building where the property was situated. 34.In considering what the parties’ conduct in this case could manifest, I have taken into account the fact that there is in fact no evidence that the alleged Common Assumption had in any way been communicated between the Siblings and the Plaintiff, or from the Siblings to the Plaintiff. As WT explained, he was responsible for implementing Madam Wang’s decision on the employees to be provided with staff quarters, and so it was necessary for him to be informed of the Common Assumption, if there ever was one. It was for WT to make the practical arrangements for any premises within the Chinachem Group to be made available for the Siblings, and according to WT, he had never been told by anyone of the Common Assumption. 35.On the entirety of the evidence, I am not satisfied that the alleged Common Assumption had been communicated between the Plaintiff and the Siblings, such that the Plaintiff’s conduct can be said to have manifested the Common Assumption. Substance and certainty of the common assumption 36.As Counsel for the Plaintiff highlighted, an essential element of estoppel by convention is that there must be certainty of the contents of the assumption alleged (para 116 of the judgement in First Laser Ltd). Without sufficient certainty of the contents, it would not be possible for the Court to give effect to and enforce the assumption. 37.Upon scrutinizing the witness statements and testimony of the Siblings, it cannot be said that there is clear evidence on the substance or content of the Promises relied upon, leading to the Common Assumption alleged by the Siblings. As indicated above, the pleaded Promises and Common Assumption had, by the time of the filing of the witness statements, evolved into the General Assurance given by Madam Wang, that she would make “appropriate arrangements” for the Siblings’ “livelihood” in Hong Kong, including the provision of accommodation for them. On behalf of the Plaintiff, Counsel pointed out that this was much too vague and uncertain to be enforceable, and such uncertainty rendered it unlikely that the Siblings, Madam Wang before her death, the Plaintiff or any other entity within the Chinachem Group would or could have intended the Promises, or the General Assurance, or the Common Assumption based on them, to be legally binding, or to constitute any legal obligation assumed by the Plaintiff which is enforceable at law. 38.On Miss Gong’s evidence, the General Assurance was wider and extended to making arrangements for the livelihood of the Siblings and their mother, for the rest of their lives. 39.The content of the Common Assumption, as pleaded in the Defence, is that the Siblings were entitled to be provided with premises for their residence for so long as and unless and until the Siblings decide to decline or terminate the same (paragraph 17(2) of the Defence), and that in the event that the Plaintiff is not able to provide the Premises (specifically) to the Siblings, the Plaintiff shall provide them with “alternative premises of standard or quality comparable” in replacement (paragraph 17(7) of the Defence). 40.On behalf of the Plaintiff, Counsel highlighted the fact that none of the Siblings mentioned in their witness statements what the standard or quality of the Premises was, and what standard or quality would be comparable thereto, to afford any certainty to the Common Assumption alleged. In cross-examination, Doctor Kung and Miss Gong confirmed that Madam Wang had never made any assurances to them as to either the size, quality or standard of the accommodation which would be provided to them. Consistent with their evidence, as well as with the evidence of WT, it would appear that these matters were decided entirely at Madam Wang’s sole discretion. 41.Doctor Kung agreed with the evidence of WT of the Plaintiff, that as a matter of fact, the accommodation which had been provided by the Chinachem Group to the Siblings over the years (first at Beverley Heights at Cloud View Road, then at University Heights at Kotewall Road, and finally at Vista Mount Davis in Mount Davis/Pokfulam), had ranged significantly in size, standard and quality. 42.The evidence from Doctor Kung, the other Siblings and WT all demonstrate that the general provision for the Siblings was dictated by Madam Wang at her own will and sole discretion. Neither the Siblings nor the companies within the Chinachem Group had ever questioned Madam Wang’s decisions on these matters, as to whether and what accommodation should be provided to the Siblings, and what standards and quality they should conform to, as they had left all these matters entirely to Madam Wang during her life. As Doctor Kung claimed, these matters would not be communicated by either Madam Wang or the Siblings to the Plaintiff, or to any other entity within the Chinachem Group, and it is unlikely that the Plaintiff would know what terms or detailed particulars Madam Wang had in mind with regard to the provision to be made by her for the Siblings. In the absence of any clear knowledge on the Plaintiff’s part of the terms and contents of the alleged Common Assumption, it is not credible, and there is no factual or reliable basis for the Plaintiff to have assumed the legal obligation or responsibility to the Siblings in any clear and identified (or identifiable) terms. 43.In support of his arguments on the lack of necessary contractual intention to create enforceable obligations, Counsel for the Plaintiff draws support from Spencer Bower: Reliance-Based Estoppel (5th edition, 2017). Having referred to the necessary ingredient of the assumption of responsibility for an estoppel by convention, the learned editors continued at para 8.25:
44.As the judgment in Blue v Ashley [2017] EWHC 1928 demonstrates and explains, the intention to create a legally binding contract, and certainty and completeness of the terms agreed, are both essential requirements of a contract. The intention must be to create legal rights and obligations, from which legal consequences may flow, and it is not sufficient for the parties to have intended to create and accept moral obligations only. Vagueness and uncertainty in what was expressed may show that the terms expressed were not in fact intended to be legally binding at all. The court cannot enforce or uphold a contract if it is legally or practically impossible to give any sensible content to the agreement (Scammell v Dicker [2005] EWHC Civ 405, para 30). 45.Having considered all the evidence in this case, my conclusion is that as there had been no discussion or agreement at all as to what the Siblings had wanted from Madam Wang and what Madam Wang had promised to procure for the Siblings, as to the location, size, standard and quality of the accommodation the Siblings would require in Hong Kong, any assurance or undertaking given by Madam Wang that she would provide for or take care of the Siblings in terms of their livelihood and accommodation in Hong Kong was NOT intended to create legal relations, or any rights or obligations which could be enforced in a court of law. The Siblings had total trust in Madam Wang and her sisterly concern for them, and had relied completely on her for taking care of and looking after them in Hong Kong. However, I consider that precisely because of their close and trusted relationship, there was no understanding between Madam Wang and the Siblings, at the time the former gave the assurances, that there should be any legal results flowing from Madam Wang’s Promises. Nor do I consider that any of the Siblings had expected anything from Madam Wang other than her moral duty to abide by her Promises, to take care of and to make “adequate provision” for them in Hong Kong, should they leave their original home and settle here. No reasonable observer would have considered in the context that it would have been open to the Siblings to take legal action against their sister (moral judgment aside), for damages or for declaratory relief, if she should renege from her Promises. 46.In any event, the terms of the Common Assumption are vague and insufficiently certain for the Court to enforce same against the Plaintiff. There is no specification or particularization of the size, standard or quality of the accommodation provided to the Siblings before the Plaintiff’s alleged adoption of the Common Assumption: at Beverley Heights, University Heights or at Vista Mount Davis. The Plaintiff could not adopt as legally binding something which they do not even know of. The term or duration of the Common Assumption is likewise vague and uncertain, as the Plaintiff is allegedly to provide for the Siblings’ accommodation indefinitely, for as long as and unless and until the Siblings decide to decline or terminate the same, and according to Miss Gong, for the rest of their lives. It is improbable that the Plaintiff would be prepared or had intended to adopt and assume such an onerous obligation. 47.In the context of certainty in terms, Ribeiro PJ explained in Urruh v Seeberger that the clarity required will seldom fall below what is unequivocal for the relevant purpose. In Tung Woon Hing Candice v Cathay Pacific Airways [2022] HKCFI 826, the Court explained that the common assumption alleged must be unambiguous, and that the evidence “must point to only one conclusion that there must be a common assumption as alleged”. 48.In this case, the Siblings have claimed that they had dual capacity – in the sense that they were family members of Madam Wang, to whom the Promises had been made, and at the same time, they were employees and staff members of the Plaintiff/Chinachem Group. They argued that the Plaintiff’s conduct, and the documents relied upon by the Plaintiff as manifesting or pointing to the provision of accommodation to them as employees, may also manifest the Common Assumption between the Plaintiff and the Siblings, with regard to the former’s provision of accommodation to the Siblings as members of the Kung family and as a matter of entitlement. 49.In my judgment, bearing in mind the requirement for clarity as explained at paragraph 47 above, the Plaintiff’s conduct of providing accommodation to the Siblings falls short of being unambiguous, and does not point only to the conclusion that there must have been a Common Assumption, as the Siblings allege. In my judgment, the conduct of the parties is equally referable to or demonstrative of the Premises being provided as staff quarters to the Siblings, as employees of the Chinachem Group. There is no evidence to contradict the fact that other staff members like WT had also been provided with rent-free staff quarters for their accommodation. 50.It is not improbable that Madam Wang decided to provide for her Siblings in Hong Kong, by treating them as employees of the Chinachem Group and conferring on them the benefits of employees, including the special right to enjoy staff quarters. After her death, the Chinachem Group continued to provide the Siblings with staff quarters, on the basis that they were employees of the Chinachem Group, but not necessarily because of any Common Assumption which the Plaintiff alleged knew of and had adopted. 51.In conclusion, I am not satisfied that the Common Assumption had been mutually manifested by the conduct of the parties in this case. Further, the contents of the Common Assumption alleged are far from being certain and unambiguous to be given effect. Any Detrimental Reliance on the Common Assurance 52.For the Siblings’ claims to succeed, they must show their reliance on the Common Assumption. 53.In their Defence, they claim that they had relied and acted upon the Common Assumption by residing at the Premises provided by the Plaintiff to them, settling the utilities and outgoings in respect of the Premises, and by not acquiring any premises in Hong Kong for residence throughout the years, and claim that by doing so, they had acted to their detriment by missing out on the opportunity to make purchases in Hong Kong when the local property market was in the downturn, and when they were younger or more capable of obtaining mortgages or seeking refinancing from banks or other financial institutes, on more favorable repayment terms. 54.On the evidence of Miss Kung, she came to Hong Kong in 1990, out of her love and concern for Madam Wang. She accepted that she had come to Hong Kong not because of any covenant or promise given by Madam Wang, but because Madam Wang was then going through a difficult period in her life, after her husband had been kidnapped/had disappeared. She accepted that it would have been “strange”, if she had demanded for Madam Wang’s Promises, before coming to Hong Kong. Counsel for the Plaintiff put to her that during her sister’s difficult moments, she would have come to Hong Kong to be with her sister even if there had not been any assurance that accommodation would be given to her, and Miss Kung agreed. 55.Miss Gong only arrived in Hong Kong in 2007, during the final phase of Madam Wang’s illness, and before she died in April 2007. She conceded that she would have come to Hong Kong to be with her sister, even if there had not been any Promises or Common Assumption. Miss Gong only claimed that at the same time, she had herself understood that Madam Wang had given her repeated assurances that she would make arrangements for her, and that she believed that her sister would not cast her aside if she came to Hong Kong as asked. 56.As for Doctor Kung and Mrs Kung, I accept the Plaintiff’s submissions, that there had been no detrimental reliance on their part. Doctor Kung conceded in the course of cross-examination that the appointment of himself and his wife as directors of companies within the Chinachem Group, within 2 months of their arrival in Hong Kong, was an elevation in their social status as compared to when they were on the Mainland. He had also benefited from the arrangements Madam Wang had made for him and his wife upon their arrival in Hong Kong. These included support for Doctor Kung to qualify as a medical doctor in Hong Kong and to set up a clinic for his private medical practice in Hong Kong, as well as education support for Doctor Kung’s sons. It cannot readily be seen that Doctor Kung and Mrs Kung only came to settle in Hong Kong because of Madam Wang’s Promises, or the Common Assumption. If they, or any of the Siblings, had come to Hong Kong in reliance on their own independent view of Madam Wang’s ability and willingness to support them and to provide for them in Hong Kong, this cannot amount to any Common Assumption shared by Madam Wang or any entity within the Chinachem Group. 57.On the evidence, I am not persuaded that any of the Siblings had acted to their detriment by relying on the Promise or the alleged Common Assumption. To the extent that they allege that they had somehow abstained from purchasing any property in Hong Kong because of their reliance on the Promises and/or the Common Assumption, this has not been established on the evidence. 58.Doctor Kung on his part admitted that he did purchase a property at Valiant Court, where he established his clinic. This was at a bargain of $492,000, with the assistance of Madam Wang. Mrs Kung also purchased at least one property in Hong Kong, which she claimed was for investment rather than for residential purposes. This hardly makes any difference in the context of her claim that she had suffered a detriment as a result of the Common Assumption, essentially on the basis that she had somehow lost the opportunity to purchase property in the downturn of the market. She can still rent out the property now to provide for herself. 59.As for Miss Gong, she and her husband own landed property in the USA which is currently being rented out. On her evidence, she had come to Hong Kong just before Madam Wang’s death, in 2007. On her evidence, she had wanted to come to Hong Kong to tend to and be with her sister in her last moments, and it is more likely than not that Miss Gong would have come to Hong Kong as she did in 2007, irrespective of whether or not Madam Wang had made any Promises to her. 60.As Counsel correctly pointed out, the claims that the Siblings had relied upon the Common Assumption and acted to their detriment by not purchasing any landed properties remain bare assertions on their part. They have produced no evidence as to their earnings, how their income and earnings had been spent, and how they had refrained from making expenditure as they suggest. 61.As for the Siblings’ claim, that they had paid for utilities and other outgoings in respect of the Premises and the accommodation which had been provided to them, this cannot amount to any detriment suffered, as the expenditure would have been made by them in any event as part of their own household and regular expenses (see Yuen Kam Lok Eddy v Yuen Lai Fun Cindy & Anor [2021] HKDC 1632, at paras 28-31). 62.My finding therefore is that there was no detrimental reliance on the Common Assumption, even if this could be established. Justice/Injustice of the case 63.Finally, the further element which must be established for constituting an estoppel by convention is that a departure from the common assumption would be unjust (paragraph 150 of the judgment in Unruh v Seeberger). 64.On the facts and evidence in this case, I have found that there was no Common Assumption, but even if there were, I cannot see that it would be unjust for the Plaintiff to depart from any Common Assumption which can be established. The Siblings have taken the benefit of the Premises being characterized by the Plaintiff as “housing provided in kind” by the Plaintiff to the Siblings as employees of the Chinachem Group. It was on the basis of such a characterization, that a one-off lump sum was calculated and paid to Doctor Kung, Miss Kung and Miss Gong, in the respective sums of $652,562.70, $1,675,485.60 and $657,517.20. As they were treated as employees of the Chinachem Group who had been provided with staff quarters, a one-off lump sum contribution had been made to the respective MPF accounts of Doctor Kung, Miss Kung and Miss Gong, as duly recorded in the documents of the Chinachem Group. 65.For Mrs Kung, her case has throughout been that she occupied the Premises as a member of Doctor Kung’s household, and there is nothing which shows that the Promises/Common Assumption applied against her personally. 66.Doctor Kung and the other Kung siblings do not dispute that they had received the lump sum payments, which were made to them as employees of the Plaintiff, when (on their case) the Premises had been provided to them for accommodation solely because of the alleged Common Assumption, and had nothing to do with their being staff members of the Plaintiff to be entitled to housing. As the Plaintiff contended, the Siblings had taken advantage of the Plaintiff at the latter’s expense, by accepting the lump sums. 67.In these circumstances, I agree that it would not be unfair to hold that the Plaintiff should be allowed to depart from the alleged Common Assumption, even if there was one. Conclusion on estoppel 68.Since none of the essential ingredients of estoppel by convention has been established, I reject the Siblings’ claim that there was any Common Assumption as they allege. Counterclaim 69.The Counterclaim made on the basis of the estoppel by convention is dismissed, since I have found against the Siblings on this key issue. Orders made 70.As the Siblings’ Defence is not made out, orders will be made in terms of the relief sought by the Plaintiff, as set out at paragraphs 126(1) to (5) of the Closing Submissions for the Plaintiff. I am satisfied that the Siblings occupied the Premises under the Plaintiff’s Licence, which was revocable upon termination of the employment of the Siblings, and was duly terminated by the Plaintiff’s notice of 3 months. The Siblings are liable to deliver up vacant possession of the Premises, and to pay mesne profits in respect of their occupation of the Premises from 3 November 2019. There is no dispute as to the expert’s valuation of the market rent for the Premises for the period in question. 71.The Counterclaim is dismissed, and the costs of the action and of the Counterclaim are to be paid by the Siblings to the Plaintiff, with certificate for Counsel, to be taxed if not agreed.
Mr Jeffrey Chau and Ms Alice Lau, instructed by Mayer Brown, for the plaintiff in HCA 2022/2019, HCA 2024/2019 and HCA 2025/2019 The defendant (Kung Yan Sum 龔因心) in HCA 2022/2019 appeared in person The 1st defendant (Kung Yan Sum 龔仁心) in HCA 2024/2019 appeared in person The 2nd defendant (Liu Yuan Chun 劉元春) in HCA 2024/2019 appeared in person The defendant (Gong Zhongxin 龔中心) in HCA 2025/2019 appeared in person | ||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
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