Leung Chi Cheong (The Person Appointed To Represent the Estate of Leung Fai, Deceased) v. Liu Che Wun and Another

HCA 1128/2007

[2024] HKCFI 2181

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1128 OF 2007

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BETWEEN

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J U D G M E N T

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A. INTRODUCTION

1.The background of the case and the evidence adduced at the first trial have been set out in the Judgment of this court dated 20 August 2021, ie [2021] HKCFI 2435 (“Judgment”).  In the Judgment, this court granted the following order:

(1)  A declaration that the 1^st defendant has acquired a good possessory title to the Land by reason of her own adverse possession thereof since 1980.

(2)  A declaration that the plaintiff holds the possessory title to the Land (as declared in the 1992 Action)  on trust for the 1^st defendant and the estate of the Deceased as joint owners thereof as tenants in common in equal shares.

(3)  An account of all rental and/or other income received by the plaintiff and/or the estate in respect of the Land for half share for the period from early October 2009 until the time when the 1^st defendant could re-enter the Land, and payment of the same forthwith to the 1^st defendant.

(4)  The plaintiff’s claim against the 1^st defendant be dismissed.

2.On appeal by the plaintiff as the personal representative of the estate (“Estate”)  of his father, Leung Fai (the “Deceased”), the Court of Appeal allowed the appeal, set aside the orders made in the Judgment and ordered that the remaining outstanding issues of (a)  constructive trust and/or proprietary estoppel; and (b)  the 1^st defendant’s entitlement under the Inheritance (Provision for Family and Dependents)Ordinance, Cap 481 (“IPFDO”)  be remitted to this court for determination. 

3.The parties agree that the following issues are to be determined at the present hearing:

(1)  Whether the plaintiff holds the Land of the Deceased on constructive trust for the 1^st defendant.

(2)  What relief is to be granted to the 1^st defendant if the plaintiff holds the Land on constructive trust for the 1^st defendant.

(3)  Whether the plaintiff is estopped from denying that the 1^st defendant is entitled to beneficial interest in the Land.

(4)  What relief is to be granted to the 1^st defendant if the plaintiff is estopped from denying that the 1^st defendant is entitled to beneficial interest in the Land.

(5)  If it is found that the plaintiff does not hold the Land on trust for the 1^st defendant and that the Land is not subject to estoppel, whether the 1^st defendant is liable to pay damages and/or mesne profits for the 1^st defendant’s occupation of the Land and to account for profits to the plaintiff for the 1^st defendant’s business on the Land and the quantum thereof.

(6)  Whether leave should be granted to the 1^st defendant to apply for relief under the IPFDO out of time.

(7)  If it is found that leave should be granted for such application, whether any financial provision from the net estate of the Deceased ought to be granted to the 1^st defendant pursuant to the provisions of IPFDO.

(8)  If it is found that financial provision from the net estate of the Deceased ought to be granted to the 1^st defendant pursuant to the IPFDO, what should be the amount of such provision.

(9)  What is the amount of interest (if any)  to be payable upon any monetary judgment awarded against a party in this action.

B.  ESTABLISHED FACTS IN THE JUDGMENT WHICH SHOULD STAND

4.The following facts are either undisputed and/or found by this court in the Judgment.  Such findings of fact have not been disturbed by the Court of Appeal[1].

5.In general, this court found in the Judgment that the 1^st defendant’s case was consistent from start to finish; her evidence is corroborated by an independent witness; and ultimately, her evidence regarding her joint management of the business carried out on the Land was accepted in its totality[2].  On the other hand, the court rejected the plaintiff’s evidence in different sections on various issues in the Judgment for reasons stated therein.

B1.  Relationship between the Deceased and the 1^st defendant as true husband and wife (the “Couple”)

6.As noted in the Judgment, it is undisputed between the parties that[3]:

(1)  The 1^st defendant moved to live in the house on the Land in 1980 when she was young and thereafter for about 20 years she continuously and single-handedly took care of the Deceased’s living and health until his death in 2000.

(2)  The Couple gave birth to a daughter in 1981.

(3)  After a period of co-habitation, the Couple got married in 1986.

(4)  Their long relationship as married Couple was known to the Deceased’s children and people around such as neighbours and business associates, for instance Mr Au Yeung (“DW2”).

(5)  The 1^st defendant helped operating the Deceased’s business of both fish rearing and car parking, which was again well known to others including DW2. 

(6)  The 1^st defendant made decisions concerning the said businesses when the Deceased was not around.

(7)  The Deceased showed love and care for the 1^st defendant expected of a husband in an ordinary marriage relationship which was demonstrated by the plaintiff’s testimony and evidence that:

(a)  The Deceased did not want to upset the 1^st defendant and therefore was absent from the plaintiff’s wedding ceremony.

(b)  In all the letters the Deceased wrote to Leung Chi Ming (“PW2”)  (evidence produced by the plaintiff), the Deceased did not utter any complaints or note any misconduct of the 1^st defendant or that the 1^st defendant only wanted money from the Deceased.

(8)  The relationship between the Deceased and the 1^st defendant was that of an ordinary married couple and the Land was their matrimonial home for decades.

7.The court further had no difficulty in finding against the plaintiff’s case that the Deceased had treated the 1^st defendant as a prostitute, which was held to be not true for, inter alia, the following reasons:

(1)  From the uncontradicted evidence of the 1^st defendant, when the 1^st defendant left home with the daughter for a few days, the Deceased went to the house of the 1^st defendant’s friend to beg the 1^st defendant to go back to the matrimonial house on the Land to live with him again and promised her that he would quit gambling and drugs.

(2)  The court accepted the 1^st defendant’s evidence that she would collect money earned from the fish breeding and car park businesses and such money was put in the drawer of the house on the Land for the Couple to use for family expenses (無分彼此)[4].

B2.  The family businesses

8.The court found as a fact that the 1^st defendant jointly managed the family businesses with the Deceased with no superior rights of either one over the other.  This was corroborated by DW2 as an independent witness.  DW2 noted that both the 1^st defendant and the Deceased discussed with him the amount of his fees for transporting their fish to the market and other matters of the fish-breeding business.  After the Land was used for the car park business, DW2 again would seek permission from either the 1^st defendant or the Deceased to park his cars on the Land. 

9.Further, as mentioned above, in the 1^st defendant’s oral evidence she said she would collect money earned from the fish breeding and car park businesses and such money was put in the drawer of the house on the Land for the Couple to use for family expenses (無分彼此)[5].  Her evidence was accepted by the court[6].  So the family businesses belong to the Couple on the evidence of the 1^st defendant.

10.The 1^st defendant also explained in her testimony that the reason why she noted in her Letter to the Deceased [C1/588] that she would not have any rental income from the Land in future was that at the time when the letter was written (ie around 1995), they had already received a writ in relation to the Land.

11.I pause here to note that the 1^st defendant’s saying in the letter that she would not have any rental income from the Land in future is not inconsistent with her case.  If she did move to Japan, as mentioned in the letter, as a practical reality she would not have access to the drawer in which profit from the Land (in the form of the car park business)  was kept.

B3.  The Deceased’s personality

12.The court found that the Deceased was not a man with a one-sided personality of a stubborn, self-centered, traditional Chinese village style and autocratic person, as suggested by the plaintiff. 

13.There were occasions where the Deceased demonstrated other aspects to his personality, that is, a caring, understanding and even tender husband and a father with a rational mind:

(1)  The Deceased letting the 1^st defendant supervise the 1992 Action;

(2)  The Deceased’s 4^th Letter to PW2, where he stated that he regretted his temper which caused separation with his children;

(3)  The Deceased did not attend the plaintiff’s wedding as he did not want to upset the 1^st defendant;

(4)  The Deceased expressed gratitude to PW2 about the money PW2 sent to the Deceased in his letters to PW2;

(5)  In the letter written by the 1^st defendant to the Deceased in 1995 [C1/588], the 1^st defendant addressed herself as “wife”, which shows that their relationship was very normal and that the Deceased cared about his daughter by providing $8,000 per month for her living in in the United States;

(6)  The plaintiff’s own case is that the Deceased agreed to remarry the 1^st defendant in 1997.

B4.  Divorce

14.The court found that the Couple’s divorce between 1994 to 1997 was a sham to facilitate an adoption of the daughter by the 1^st defendant’s mother in the United States so that the daughter could emigrate to the United States, while the 1^st defendant continued to live on the Land during the period of the sham divorce from 1994 to 1997[7].

15.The court found that the 1^st defendant’s Letter to the Deceased [C1/588] supported this finding as the 1^st defendant signed off her letter with “老婆字” and that the 1^st defendant’s Letter was written in 1995, which was during the purported divorce.

16.The court further found that the 1^st defendant did not divorce the Deceased in 1994 when the Deceased’s financial situation was at its worst state and only re-marry him after his financial situation improved in 1997, as alleged by the plaintiff.  The court found that the 1^st defendant was not going after the Deceased’s money because the Deceased had never been wealthy all his life, had gambling and drug additions and yet the 1^st defendant stayed with the Deceased and took care of him throughout their long-lasting and loving relationship.

17.It is common ground that the plaintiff and PW2 were never present and hence they could not give any direct evidence to prove that the 1^st defendant stopped living with the Deceased between 1994 to 1997.  In any event, the 1^st defendant’s evidence regarding the divorce being a sham was clearly accepted by the court. 

B5.  The 1^st defendant’s Letter to the Deceased in 1995

18.In relation to the 1^st defendant’s Letter to the Deceased [C1/588], as mentioned above, the 1^st defendant explained the reason of her writing such Letter to the Deceased stating that she would not have any rental income from the Land in future.  Her evidence is that by the time the letter was written (ie around 1995), they had already received a writ in relation to the Land.  The 1^st defendant’s evidence regarding the joint management with the Deceased of the family businesses carried out on the Land and the sharing of the profits from the Land was accepted in the Judgment[8]. Further, there is no inconsistency with the 1^st defendant’s case: if the 1^st defendant was to leave to move to Japan, obviously she would have no access to the joint pool of income.

B6.  The 1992 Action

19.Although the 1^st defendant applied to be joined as a party to the 1992 Action at one point, ultimately, she withdrew from the Action as she did not want to complicate the 1992 Action and she was of the view that she and the Deceased 無分彼此.  The 1^st defendant’s evidence in this respect is summarised and referred to in paragraphs 9 and 10 of the Judgment. 

B7.  Will of the Deceased

20.The plaintiff points out at §46 his Supplemental Submissions that the Deceased made a Will in 1999 bequeathing his estate to his male offsprings, thus evidencing that the Deceased did not intend to disinherit his sons.  With respect, this misses the point.  If the 1^st defendant’s case is accepted, the Deceased held the Land on trust for the 1^st defendant or was estopped from denying her title.  Hence, if the court finds for the 1^st defendant on constructive trust and estoppel, the result is that the beneficial interest in the Land simply does not form part of the Estate of the Deceased.

C.  COMMON INTENTION CONSTRUCTIVE TRUST (ISSUES (1)  & (2))

C1.  Relevant legal principles regarding common intention constructive trust

21.In Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9, Godfrey Lam J (as he then was)  set out at §§46 and 47 the elements that a claimant has to prove in order to establish a common intention constructive trust:

(1)  there was a common intention between the relevant parties that a party was to be a beneficial owner of the land;

(2)  The party altered her position in detrimental reliance upon such common intention;

(3)  It is unconscionable for the other party to assert ownership in reliance on his legal title to the land;

(4)  In ascertaining whether there was a common intention, it is the objective intention of each party “which was reasonably understood by the other party to be manifested by that party’s words and conduct” that one must examine.

C2.  Application of the principles regarding common intention constructive trust

C2.1  Common intention between the Couple

22.The 1^st defendant submits that the issue of whether there is common intention between the 1^st defendant and the Deceased is a matter relating purely to the understanding of the Couple as husband and wife which is very much privy to themselves and not known to any third party. 

23.The plaintiff and PW2 lived apart from the Couple for a long time before the Deceased passed away and were not present at all in the daily lives of the Couple for decades.  Clearly, they cannot and do not have direct knowledge on the subject matter of the mutual understanding and intentions of the Couple and thus cannot give useful evidence on the issue.

24.From the evidence already adduced at the first trial and pursuant to the factual findings of the court in the Judgment, this court has no difficulty in finding that the relationship of the Couple and the 1^st defendant’s evidence present a classic case of common intention constructive trust, where there was a common understanding between the Couple that the 1^st defendant would have an equal share in the beneficial interest in the Land.  In particular:

(1)  During the lives of the Couple, the Land was held on a constructive trust for the Couple as joint tenants, which passed to the 1^st defendant solely upon the death of the Deceased by the right of survivorship.

(2)  The Couple’s marriage was accepted by the Court to be a genuine marriage with love and affection (see Section B1 above).

(3)  Most significantly, in relation to the family businesses, which involved use of the Land and generated profits from the Land (see Section B2 above):

(a)  The court found that Couple shared the proceeds of the family businesses in a 無分彼此 manner. 

(b)  The court found that the 1^st defendant and the Deceased jointly managed the family businesses with no superior rights over the other.

(c)  The 1^st defendant’s oral testimony, which was accepted by the court, proves that the proceeds of the fishing and car park businesses were put in a drawer at home for the Couple’s use for living expenses in a 無分彼此 manner.

(d)  The 1^st defendant’s oral testimony is consistent with her case set out in her witness statements and those of DW2.

(4)  In my view, the sharing of profits from the Land by the Deceased and the 1^st defendant throughout the years is clearly consistent with and constitutes strong evidence of the common intentions between the parties that they were to be joint beneficial owners of the Land itself.

(5)  The Deceased’s personality of a caring, understanding and even tender husband who cared about the 1^st defendant’s feelings (see Section B3 above).

(6)  The divorce was not a genuine one, the 1^st defendant did not cease living on the Land between 1994 to 1997 (see Section B4 above).

(7)  Importantly, during an argument in or about 1995, the Deceased begged and/or requested the 1^st defendant to return to the Land and promised her that he will give her everything if she agrees to return “他更對我說如果我肯跟他回到該土地，「會將所有嘢比晒」我” (§6 of the first defendant’s supplemental witness statement ).  At that time the Deceased did not have any asset other than the Land.  This is clearly consistent with the 1^st defendant’s case.

(8)  In further support of the 1^st defendant’s case, the Deceased told the 1^st defendant on multiple locations at home and in hospital that she would be left with the Land and the business carried out on the Land solely when he died, so that the 1^st defendant could support herself and her daughter’s education at university[9].

(9)  The 1^st defendant and the Deceased attended the Legal Aid Department, and the solicitors acting for the Deceased in the 1992 Action together.  The 1^st defendant also took part in giving instructions and prepared documents for the 1992 Action prior to the Deceased’s death.

(10)  The legal fees for the 1992 Action were funded by the profit from their joint car Park business.

25.Along with the undisputed fact that the 1^st defendant had taken care of the Deceased since she moved onto the Land in 1980 until his death in 2000, the above evidence is more than sufficient to prove the intention and mutual understanding between the Couple regarding the 1^st defendant having a beneficial interest in the Land.

C2.2  The 1^st defendant’s detrimental reliance

26.It is clear from the overall evidence that the 1^st defendant relied on the promise and common intention to conduct herself throughout the relevant years:

(1)  The 1^st defendant took care of the Deceased singlehandedly since 1980 up to his death in 2000.

(2)  The 1^st defendant’s active role in and shared the burden of managing the Land and/or the businesses carried out on the Land.

(3)  The 1^st defendant’s refrainment to assert her entitlement to the Land in the 1992 Action, as she did not want to complicate the 1992 Action and also because she was of the view that she and the Deceased 無分彼此.

(4)  The 1^st defendant continued to care for and manage the Land and/or the car park business, including applying for licences for the businesses.

27.In the plaintiff’s Supplemental Submissions, the plaintiff makes the point that the 1^st defendant did not rely on the Deceased’s statements/conduct about the Land and that she returned to the Land only because of the promises of the Deceased to quit gambling and taking drugs.  I agree that the point made by the plaintiff is artificial and should be rejected.  The Deceased’s promise to give everything to the 1^st defendant including the Land (see paragraph 24(7)  above)  must be an added assurance to the 1^st defendant so as to persuade the 1^st defendant to return to the Deceased. 

28.The plaintiff further alleges in §§56 to 60 of the plaintiff’s Supplemental Submissions that the 1^st defendant ought not to be granted any equitable relief because the 1^st defendant comes to court with unclean hands (ie Issue (2)).  

29.I do not agree.  The position is explained by Lam VP (as he then was)  in Cheung Lai Mui v Cheung Wai Shing [2020] HKCA 148 in the course of discussing the difference between a claim based on a common intention constructive trust and proprietary estoppel:

“1.4 The difference between a claim based on a common intention constructive trust and proprietary estoppel was highlighted by Lord Walker in Stack v Dowden [2007] 2 WLR 831 at [37],

‘I have to say that I am now rather less enthusiastic about the notion that proprietary estoppel and ‘common [intention]’ constructive trusts can or should be completely assimilated. Proprietary estoppel typically consists of asserting an equitable claim against the conscience of the ‘true’ owner. The claim is a ‘mere equity’. It is to be satisfied by the minimum award necessary to do justice (Crabb v Arun District Council [1976] Ch 179, 198), which may sometimes lead to no more than a monetary award. A ‘common intention’ constructive trust, by contrast, is identifying the true beneficial owner or owners, and the size of their beneficial interests.’

‘1.5 In order to acquire beneficial ownership in a property, the claimant of a common intention constructive trust must establish all the elements before the trust is constituted. …” (Emphasis supplied)

30.Thus, once the 1^st defendant has been identified to be the true beneficial owner of the Land and the size of her beneficial interest ascertained, the court should simply give effect to the finding of such beneficial ownership.

31.Accordingly, I grant a declaration that the plaintiff (and/or the Deceased’s Estate)  has held the Land on constructive trust for the benefit of the 1^st defendant as sole beneficial owner thereof.

 D.  PROPRIETARY ESTOPPEL (ISSUES (3)  & (4))

32.Further or alternatively, the 1^st defendant submits that the plaintiff is estopped from denying that she has acquired beneficial interest in the Land and could stay and live on it.

D1.  Relevant legal principles regarding proprietary estoppel

33.The elements required to prove proprietary estoppel are:

(1)  A representation or assurance made to the claimant;

(2)  Reliance on it by the claimant;

(3)  Detriment to the claimant in consequence of his/her reliance.

(See §107 of Fung Oi Ha v Fung Pui On, HCA 17/2012 (unrep, 6/06/2016))

34.One would immediately see that the requirements of common intention constructive trust and proprietary estoppel are similar.  In fact, the requirement of proprietary estoppel is less stringent because it does not require a promise/representation concerning beneficial interest in the land, but can be established regarding different kinds of interests, for instance to stay on and use the land for life. 

D2.  Application of the principles regarding proprietary estoppel

35.The factual findings and/or evidence referred to in paragraphs 23 to 25 above also support the finding that the Deceased did make representations and/or assurances to the 1^st defendant in relation to her interest in the Land.

36.The evidence set out in paragraph 26 above supports detrimental reliance on the part of the 1^st defendant. 

37.In the premises, the elements of proprietary estoppel are satisfied.

38.Accordingly, I grant a declaration that the plaintiff (and/or the Deceased’s Estate)  is estopped from denying that the 1^st defendant is entitled to beneficial interest in the Land as the sole beneficial owner thereof. 

E.  IPFDO CLAIM (ISSUES (6), (7)  & (8))

39.As it is common ground that the Estate of the Deceased only consists of the squatter’s possessory title in the Land, if the 1^st defendant succeeds in the causes of action based on constructive trust or proprietary estoppel, she would have been adequately provided for under the IPFDO from the net assets of the Estate.  Hence this claim under the IPFDO is truly an alternative claim.  The claim will be successful only if the court finds against the 1^st defendant on both constructive trust and estoppel.  Based on my findings on issues (1)  and (3), it is strictly not necessary to deal with the 1^st defendant’s claim under the IPFDO.  For the sake of completeness, I shall briefly deal with the 1^st defendant’s claim under the IPFDO in case I’m wrong.

40.The 1^st defendant claims reasonable financial provision from the Estate under the IPFDO, on the basis that the 1^st defendant is entitled to reasonable financial provision by reason of the 1^st defendant’s dependency on the Deceased before his death.

E1.  Legal principles regarding financial provisions under the IPFDO

41.The court has the power to make various orders upon the court being “satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant” (Section 4 of the IPFDO).

42.Section 6 of the IPFDO provides that:

“An application for an order under section 4 shall not, except with the permission of the court, be made after the end of the period of 6 months from the date on which representation with respect to the estate of the deceased is first taken out.” (Emphasis added)

E2.  Leave to claim under the IPFDO out of time

43.The grant of Letters of Administration in respect of the Estate was on 14 April 2010.  The deadline to make a claim under the IPFDO is 14 October 2010. 

44.The 1^st defendant notified the plaintiff of her intention to apply for relief under the IPFDO on 4 October 2012.  Accordingly, there was a delay of around 2 years. The 1^st defendant’s claim under the IPFDO was made out of time. Leave would have to be obtained for the 1^st defendant to claim financial provisions under the IPFDO.

45.In LZX v WYL [2012] 5 HKLRD 29 at §30, the court sets out the relevant factors to be considered in deciding whether leave should be granted.  The court noted the following non-exhaustive guidelines:

(1)  The discretion is unfettered.  The discretion is to be exercised in accordance with what is just and proper.

(2)  The onus lies on the applicant (the 1^st defendant in this case)  to establish sufficient grounds for taking the case out of the general rule and depriving those who are protected by it of its benefits.  The applicant must make out a substantial case for it being just and proper for the court to exercise its statutory discretion to extend the time.

(3)  How promptly and in what circumstances the applicant has sought the permission of the court after the time limit has expired.  The whole circumstances should be looked at, and not least the reasons for the delay, and also the promptitude with which, by letter before action or otherwise, the claimant gave warning to the defendants of the proposed application.

(4)  Whether or not negotiations have been commenced with the time limit; for if they have, and time has run out while they are proceeding, this is likely to encourage the court to extend the time.

(5)  Whether or not the estate has been distributed before a claim under the IPFDO has been made or notified.

(6)  Whether a refusal to extend the time would leave the claimant without redress against anybody.

46.In addition to the above guidelines, the court in LZX v WYL held at §31, “the applicant would also need to demonstrate that he had an arguable case, a case fit to go to trial, and that in approaching that matter, the court’s approach would be rather the same as when considering whether a defendant ought to have leave to defend in proceedings for summary judgment”.

47.I agree that, had it been necessary, leave should be granted to the 1^st defendant to make the application out of time for the following reasons:

(1)  Although the 1^st defendant had knowledge of the Will back in 2001, she had not received any legal advice on her rights under the IPFDO.

(2)  After the death of the Deceased, the 1^st defendant had little communication with the plaintiff.  She was unaware of the grant of the Letters of Administration and was first advised on her entitlement under the IPFDO in August 2012 when she sought assistance from the Legal Aid Department (§45 of the 1^st defendant’s witness statement). 

(3)  Upon the grant of the Legal Aid Certificate on 4 October 2012, she immediately and without delay notified the plaintiff through her solicitors of her intention to apply for relief under the IPFDO.

(4)  The 1^st defendant as an unsophisticated person acted as promptly as she could have done in the circumstances.

(5)  There is no prejudice to the plaintiff by reason of the delay in making the application.  There is no question of loss of evidence.  The parties are in exactly the same position as in the case of no delay and that the application was made in October 2010.

(6)  The Estate has no assets other than the Land.  Hence, there is no question of the assets of the Estate having been sold or distributed.  The Land remains intact for the carrying out of an order of maintenance under the IPFDO.

(7)  It is just and proper that the application be decided on its merits.

(8)  In particular, I give weight to the consideration that a refusal to extend the time would leave the 1^st defendant without redress against anybody.

E3.  Entitlement under the IPFDO

48.If the court grants leave for the 1^st defendant’s application, the following matters would be considered in determining the application (Section 5(1)  of the IPFDO):

(1)  the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(2)  the financial resources and financial needs which any other applicant for an order under section 4 has or is likely to have in the foreseeable future;

(3)  the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(4)  any obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased;

(5)  the size and nature of the net estate of the deceased;

(6)  any physical or mental disability of any applicant for an order under section 4 or any beneficiary of the estate of the deceased;

(7)  any other matter, including conduct of the applicant or any other person, which the court may consider relevant.

49.In addition, the court would consider the factors set out in section 5(2)  of the IPFDO:

(1)  the age of the applicant and the duration of the marriage;

(2)  the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.

50.The 1^st defendant has locus standi under section 3 of the IPFDO.  The Deceased died domiciled in Hong Kong and is survived by the 1^st defendant as his spouse (section 3(1)(i)  of the IPFDO).

51.As the Will made no financial provision for the 1^st defendant, it is evident that the Deceased’s Will does not make any reasonable financial provision for the 1^st defendant.

52.In cases of an application by the spouse of the deceased, the court would also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce (section 5(2)  of the IPFDO).

53.On the premise that it was the Deceased who had the squatter’s title and the 1^st defendant had no share in it, the 1^st defendant was dependent upon the Deceased financially prior to his death.  The 1^st defendant took care of the Deceased’s businesses for decades and made substantial contributions to the family.  The 1^st defendant lived on the Land as her matrimonial residence.  The 1^st defendant was wholly dependent on the Deceased for a living.  The financial provision to the 1^st defendant before the Deceased’s death was substantial.

54.As mentioned above, the application will only be necessary when the causes of action based on constructive trust and estoppel both fail. In which case, the 1^st defendant would not be able to stay or live on the Land as she did before the Deceased died.  The 1^st defendant thus lost all her dependency after the death of the Deceased.

55.The 1^st defendant at the time of trial earns a monthly income of $9,000 and pays monthly rent at HK$3,000, with miscellaneous expenses of $3,000 per month.  She spends around $2,000 per month to purchase tonic food.  As at the date of her witness statement dated 21 August 2013, she only had savings of $3,000.  She has no other assets.  The above matters are not challenged by the plaintiff.

56.In these circumstances, the 1^st defendant is clearly entitled to financial provisions under the IPFDO. 

E4.  The amount of financial provision

57.Based on the figures on the basis of agricultural land provided by the plaintiff’s expert [B1/156], the average mesne profits of the Land is $3,111.11 per month ($87,111.16/28 months). 

58.The 1^st defendant’s dependency in terms of mesne profits for her residence on the Land prior to the death of the Deceased would thus be $3,111.11 per month.  As to dependency on living expenses, prior to the death of the Deceased, the family income was around $20,000 per month which was shared equally by the Deceased and the 1^st defendant.  The 1^st defendant’s dependency would be $10,000.

59.The total monthly dependency of the 1^st defendant for living on the Land and living expenses would therefore be $13,111.11 per month. 

60.I agree the reasonable financial provision to the 1^st defendant should be sufficient for her living for at least 10 years after the death of the Deceased.

61.Accordingly, the amount of reasonable financial provision should be $1,573,333.20 (ie $13,111.11 x 12 months x 10 years).

62.This amount would have to be set off against the plaintiff’s claim of mesne profits against the 1^st defendant for trespass on the Land (on the basis that the 1^st defendant’s claim to have a right to stay in the Land fails), which is in the amount of $635,053.66 [B1/156].

63.The balance to be received by the 1^st defendant under the IPFDO would therefore be $1,573,333.20 – $635,053.66 = $938,279.54.

F.  THE PLAINTIFF’S CLAIM FOR ACCOUNT OF PROFITS AND INDEMNITY/REIMBURSEMENT (ISSUE (5))

F1.  Account of profits

64.In the plaintiff’s Supplemental Submissions, the plaintiff argues that in the event the court finds that the Land is not held on constructive trust for the 1^st defendant and if the Land is not subject to estoppel, the plaintiff claims an amount of $6,480,000 as account for profits of the 1^st defendant’s use and occupation of the Land after the Deceased’s death.

65.The 1^st defendant submits that this claim is unfounded in law.  The plaintiff is only entitled to mesne profits for wrongful use of the Land and not the profits earned from the business of car parking run by the 1^st defendant.

66.The 1^st defendant submits that as a matter of law the relief of “account of profits” is an equitable relief which is distinct from an award of damages on user basis.  The equitable relief of account of profits arises only when a claimant is compensated on the basis of an invasion of their proprietary rights of the business wrongfully stolen from the claimant, such as infringement of intellectual property or breach of fiduciary duties (§§20-036 to 20-045, Snell’s Equity 34^th Edn).

67.In the present case the plaintiff’s claim is for trespass by the 1^st defendant on the Land.  Therefore, the only remedy in law (nothing to do with equity)  is mesne profits for using the Land.  In the event that the court finds that the plaintiff is entitled to possession of the Land, the plaintiff’s claim of mesne profits (which arises from wrongful use of the Land at common law)  of $635,053.66 is the only monetary remedy available in law to the plaintiff; and is adequate compensation for loss of use of the Land by the plaintiff.  Equity simply has no role to play. 

68.I agree with the 1^st defendant’s argument.  In fact, the plaintiff’s approach has been firmly disapproved of in the English Court of Appeal’s decision in Severn Trent Water Ltd v Barnes [2004] EWCA Civ 570 at §41:

“Finally, it is to be noted that the judge appears to have taken the view that some additional award was necessary on the basis that ‘to reflect the fact that the defendants were liable, as trespassers x the claimant is entitled to damages for some barely appreciable percentage of the defendant’s profits’ (see the second italicised passage from the judgment quoted at paragraph 15 above). In this respect I consider that he misunderstood the authorities. It is of course the position that in cases of trespass of this kind there is no right to a share in, or account of, profits in any conventional sense. The only relevance of the defendant’s profits is that they are likely to be a helpful reference point for the court when seeking to fix upon a fair price for a notional licence. …” (Emphasis by underlining supplied)

69.In conclusion, I would have disallowed the plaintiff’s claim of account of profits.

F2.  Indemnity/Reimbursement

70.At §§73 and 74 of the plaintiff’s Supplemental Submissions, the plaintiff argues that the Estate has paid $217,631.58 to Birkenhead for trespass in the 1992 Action, and that the 1^st defendant should reimburse a proportionate part thereof to the plaintiff. 

71.As correctly submitted by the 1^st defendant, the Court of Appeal on appeal has already found that the 1^st defendant was not a squatter of the Land jointly with the Deceased and that she was a mere licensee.  That was decided in the context of the law on adverse possession.  And the Court of Appeal remitted the remaining issues to this court on the other causes of action.  In the premises, the foundation of the plaintiff’s claim for reimbursement on the basis of the 1^st defendant being a joint adverse possessor is gone.  The 1^st defendant is not liable to indemnify and/or reimburse the plaintiff for the Deceased’s trespass onto Birkenhead’s land. 

G.  COSTS

72.I order that the costs relating to the determination of the issues set out at paragraph 3 above (including all costs reserved, if any)  be paid by the plaintiff to the 1^st defendant, such costs are to be taxed if not agreed.  The plaintiff’s and the 1^st defendant’s own costs are to be taxed in accordance with the Legal Aid Regulations.

73.The above order as to costs is nisi and shall become absolute in the absence of any application within 21 days to vary the same.

74.Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.

Mr Tommy Lo, instructed by Messrs W K To & Co, for the plaintiff

Mr Erik Shum and Ms Christy Wong, instructed by Messrs Hobson & Ma, for the 1^st defendant