THE INCORPORATED TRUSTEES OF THE SISTERS OF THE IMMACULATE HEART OF MARY v 曹琳 AND ANOTHER

HCMP 2233/2020

[2024] HKCFI 2363

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2233 OF 2020

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J U D G M E N T

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A.  Introduction

1.  This is the trial of the disputes between the parties over the rights on the part of the defendants (“D1”, “D2”, and collectively “Ds”) to occupy House 410 (to be defined below) erected on No. 410 of Victoria Road.

2.  Mr Jevons Chan appeared for the plaintiff (“P”). Mr Nelson Miu appeared for D1. The generic D2 did not appear, and were not represented.

B.  The trial bundles

3.  In respect of the trial bundles, I record the following matters:

(a)  Authenticity of all documents therein is not in dispute;

(b)  Sister Chio Mui Kew Maryse (also called Carmel Chio, “Sister Chio”) was originally a witness P intended to call. For that purpose, she had given 1 witness statement. She has unfortunately passed away. Whilst her witness statement should not have been included in the trial bundles, it has been. I allow it to continue to be in order to make sense of other evidence which has made reference to part of its contents;

(c)  Without Sister Chio, Sister Poon Sau King Agatha (潘秀琼, also called Poon Nga Wai潘雅恵, “Sister Poon”) has become P’s only witness. In the course of her evidence, after cross-examination but before completion of her re-examination, Mr Miu applied to put in 4 additional photographs. Mr Chan originally objected to the application. I granted Mr Chan leave to take instructions from Sister Poon in relation to those photographs. Having done so, Mr Chan withdrew the objections. Those 4 photographs have been inserted to the trial bundles as pages [B/108-1 to B/108-4]; and

(d)  Pages 372.1 to 372.13 of trial bundles have been removed.

C.  Background facts

4.  Parties have filed a statement of agreed facts. Parties have also filed a chronology, though parties are not able to agree on the relevance and witnesses’ state of knowledge in respect of some of the entries.

5.  I have considered those documents. I have also considered the evidence before this Court, and the degree of challenge which counsel raised by way of cross-examination. The following background facts are either agreed, or otherwise not disputed. I also find them to be relevant.

6.  The Sisters of the Immaculate Heart of Mary is a missionary association. It was first established in the Mainland. A branch was established in Hong Kong in the 1950s.

7.  In 1983, P was incorporated under the Registered Trustees Incorporation Ordinance, Cap 306[1]. Its purpose has been to carry out missionary work under the direction of the Bishop of the Roman Catholic Church in Hong Kong through educational, medical, religious, social and charitable work.

8.  P has since 1989 been operating a residential care home for elderly at No. 404. It is called Chee Sing Kok Social Centre of the Humanity Love (慈星閣仁愛服務中心, “CSK Elderly Home”)[2].

9.  In August 2005, there was a temporary evacuation of CSK Elderly Home due to a landslide. In April 2007, upon completion of the slope stabilization works, it moved back to No. 404[3].

10.  How CSK Elderly Home first came to occupy No. 404 was not explored during the trial. Its occupation since 30 November 2007 was. By a written tenancy agreement of that date[4] (reference no. GPA H798, the “Tenancy Agreement”), the Government of the Hong Kong Special Administrative Region as landlord leased to P as tenant all those pieces or parcels of ground off Victoria Road known as Nos. 404, 410 and 411, Section 4, Mount Davis, Hong Kong together with such buildings or structure as specified in the Second Schedule thereof (the “2^nd Schedule”). I will refer to the 3 numbered lots of land individually as “No. 404”, No. 410 and “No. 411”, and collectively as the “3 Nos. of Land”. There were existing buildings and structures on the 3 Nos. of Land (the “Buildings and Structures”, which I will describe further below). The Buildings and Structures together with the 3 Nos. of Land are collectively referred to as the Premises.

11.  I set out below the relevant contents of the Tenancy Agreement:

(a)  In respect of and according to the First Schedule thereof (the “1^st Schedule”):

(i)  The 1^st Schedule sets out, with reference to a plan[5] (“Plan”), particulars of the Premises;

(ii)  The term of the Tenancy Agreement was for one year certain commencing on 2 April 2007 and thereafter quarterly until such time as the tenancy is determined[6];

(iii)  The rent is HK$1 per annum (if demanded);

(iv)  The purpose for which the Premises may be used is “For the operation of a residential care home for the elderly only.”[7]

(b)  The 2^nd Schedule sets out, with reference to the Plan, the Buildings and Structures;

(c)  According to Clauses (2) of the Tenancy Agreement, P has agreed with the Landlord inter alia:

“(b) Not to use or permit or suffer the use of the Premises or any part thereof for any purpose other than such purposes as are specified in the First Schedule hereto.

(c) Not to erect or allow to remain on the Premises any building or structure (other than those specified in the said Second Schedule) without the prior written consent of the Landlord first had and obtained.

(d) Not to alter, vary or demolish any building or structure specified in the said Second Schedule without the prior written consent of the Landlord.

(e)	(i) To make such arrangements for the supply of electricity, telephone, gas, mains water and other utility services to the Premises as the Tenant shall require and to pay all charges in connection therewith …
	(ii) To pay all charges in respect of all electricity, telephone, gas, water, sewage charges and any other utilities supplied to the Premises.

(f) (i) To be responsible at the Tenant’s own expense for the full upkeep maintenance and repair, including structural and external repair and future full refurbishment of all parts of the Premises including the maintenance, repair and replacement of all buildings, structures, fixtures, fittings, plant, apparatus and facilities installed or erected therein or thereon other than the slope structures …

…

(h) Not to assign, mortgage, charge, demise, underlet, share or part with the possession of or otherwise dispose of the Premises or any part thereof or any structures thereon or any interest therein or enter into any agreement so to do PROVIDED THAT the Tenant may permit the elderly to reside at the residential care home as permitted in the First Schedule hereto in accordance with the provisions of this Agreement.[8]”

(d)  The Third Schedule of the Tenancy Agreement (the “3^rd Schedule”) sets out the Special Conditions agreed between the parties, which include:

(i)  Special Condition 1, which provides that after the first year of the tenancy:

“… the tenancy may continue on a quarterly basis and may be terminated by either party giving to the other at least three calendar months’ prior notice in writing to that effect to expire at any time.”

(ii)  Special Condition 2, that:

“Notwithstanding anything herein contained, the Tenant shall only use the two buildings at the rear of [No. 411] for storage purpose ancillary to the permitted user as specified in the [1^st Schedule].”

12.  I set out, with reference to the Plan and various photographs produced, further details about the Premises:

(a)  In respect of the 3 Nos. of Land:

(i)  They are all on a slope off Victoria Road, and are about 100 steps above street level;

(ii)  No. 410 and No. 411 physically adjoin and form one patch of land (the “410/411 Patch”). The 410/411 Patch can be accessed via steps from Victoria Road. At the top of the steps is a gate which can be locked;

(iii)  No. 404 does not physically adjoin the 410/411 Patch, and is a short distance (about 100m) away. It can be accessed via a different flight of steps from Victoria Road. At the top of the steps is also a gate that can be locked;

(iv)  The 410/411 Patch is linked to No. 404 by a footpath (the “Footpath”). At each end of the Footpath is a metal gate (the “404 Gate” and the “410/411 Gate”) which can be padlocked from inside[9];

(b)  In respect of the Buildings and Structures:

(i)  On No. 410, there has been one building (House 410 mentioned above). House 410 is the subject matter of the present disputes;

(ii)  On No. 411, there has been another building, and at its rear, 2 additional structures (respectively “House 411” and the “411 Structures”[10]);

(iii)  House 411 is higher up the slope compared with House 410;

(iv)  On No. 404, there has been one building (the “404 Building”).

13.  The 404 Building has been used for the operation of CSK Elderly Home.

14.  Since November 2008, P has been running another elderly home at Pak Tin. It is called Pak Tin Elderly Home (“Pak Tin Elderly Home”).

15.  Sister Poon was the Mother Superior of P between 2008 and 2012, and again between 2018 and 2023. Mother Superior is elected amongst the Sisters of P.

16.  Sister Chio was between 2012 and 2018 the Mother Superior. She was also at time material to the present action the Sister in Charge of CSK Elderly Home. She passed away in July 2023.

17.  D1 is an elderly. She was born in 1937. She is also called Rose. She was on 21 December 2010[11] admitted as an elderly to reside in CSK Elderly Home. Her son is 任煒雄 (“Yam”).

18.  At the centre of parties’ disputes is a written agreement[12] (the “2011 Agreement”). Its interpretation and legal effects are in issue. It is dated 1 September 2011. It was signed by Sister Chio on P’s behalf (in her capacity as 會長), and D on her own behalf. I set out its full contents for ease of reference:

“                                     協議書

 

為維護及保養香港天主教聖母潔心會屬下之物業即
「域多利道410」（下簡稱：410）全幢樓房的維修改
建工程，曹琳（聖名：ROSE 下簡稱：ROSE）
愿以真誠愛天主之心，把自己退休金抽出部份承擔
維修改建工程費用。曹琳作出這一個決定

1.） 是維護聖母潔心會物業。

2.） 是為自己兒孫上班、上學往返之方便。特
提出以下條件，望聖母潔心會予以諒解：

• ROSE全家入住410時沒有物業權，免繳交差餉及管
理費。

• ROSE必須承擔責任保養好410物業，每年負責驗
修、保養確保該物業的完美、清潔和整齊。

• ROSE負責該物業的水丶電丶及電話等費用。

• ROSE若歸天鄉時，她的兒孫仍可在410居住，聖母
潔心會應以慈愛之心，讓他們繼續留下居住，直至他
們自願遷出410物業為止。[13]

以上條件望聖母潔心會同意，並簽署為盼。”

19.  It is part of the agreed facts that after the execution of the 2011 Agreement[14]:

(a)  D1 assisted in the renovation of the 404 Building and the intended installation of a lift at CSK Elderly Home;

(b)  She was on 28 January 2012 appointed honorary superintendent for the overall maintenance of the 404 Building (全面維修工程義務總監), which works included the proposed installation of a lift for CSK Elderly Home[15];

(c)  D1 contributed at least HK$180,000 towards the renovation of CSK Elderly Home, for which a receipt for “donation” was signed by Sister Chio on 3 April 2012[16]. D1 says, not agreed by P, that she actually contributed $210,000 for that purpose, that she initially requested reimbursement for that entire sum, but was ultimately persuaded by Sister Chio to regard HK$180,000 out of that sum as donation to P;

(d)  D1 entered into an agreement on 13 April 2012 to sell a property under her name in Peng Lai Court, Peng Chau (the “Peng Chau Property”, for $1,700,000, which sale was completed on 6 July 2012;

(e)  D1 obtained a quotation dated 22 May 2012 from Apex Building and Engineering Co Ltd (“Apex”) for the renovation of House 410 (the “Apex 22/5/2012 Quotation”);

(f)  She moved into House 410 with her children and her grandchildren in July 2012 upon completion of the renovation of House 410, and after the assignment of the Peng Chau Property[17];

(g)  D1 drafted various correspondence with divers government departments and the Hong Kong Jockey Club (“HKJC”) on matters relating to CSK Elderly Home, including its renovation, the installation of lift, the extension of tenancy etc (the “Contemporaneous Correspondence”);

(h)  D1 was authorized by Sister Chio in October 2016 to attend a Town Planning Board meeting on 1 March 2017 to discuss feedbacks on town planning proposals.

20.  From 5 February 2018 onwards, P has made various written demands to Dl, requesting Dl and her family to vacate House 410, and deliver vacant possession thereof. Dl has refused and contested P’s claim.

D.  Parties’ respective cases

21.  This action was first started by Originating Summons of 2 December 2020. P sought possession of House 410. The action has since been converted as if started by Writ.

22.  The current set of pleadings comprises:

(a)  P’s Amended Statement of Claim of 31 August 2021 (“ASOC”), and certain further and better particulars it provided on 17 September 2021;

(b)  D1’s Defence and Counterclaim filed on 5 October 2021 (“D&C”); and

(c)  P’s Amended Reply and Defence to Counterclaim of D1 filed on 16 October 2023 (“AR&DC”).

23.  P’s case:

(a)  P’s case is that Ds’ occupation of House 410 was upon permission granted by it, “on the condition that they were to vacate it upon [P’s] request”[18]. P says that Ds have refused to vacate the same despite repeated requests;

(b)  P seeks by way of relief (i) vacant possession of House 410, (ii) mesne profits from 1 January 2019, and (iii) an Order directing Ds to remove the lock on the gate to the access path to both House 410 and House 411 so that P can assess House 411;

(c)  I record that in his written closing, Mr Chan informs the Court, fairly and correctly I add, that P is no longer pursuing (ii) and (iii). In respect of (ii), no valuation evidence has been adduced. Mr Chan has further expressed doubt himself as to whether House 410 has any market value. In respect of (iii), Sister Poon had confused the 404 Gate with the 410/411 Gate, and there is no evidence that Ds had ever locked the 410/411 Gate.

24.  D1’s case:

(a)  D1’s case is that the parties have executed the 2011 Agreement. D1 says that upon she agreeing thereby to pay for the renovation of House 410, she and her family were permitted to occupy the same. D1 says that the permission extends to her children and grandchildren even after her demise, and that they would remain be so permitted until they choose to move out voluntarily. She relies on express agreement and proprietary estoppel, which she puts as follows (§40 of her D&C), that:

“… [D1] and her son and grandchildren had acquired a licence to stay at House 410 for their respective lives on condition that they keep the premises in proper maintenance and repair and pay for all the utilities expenses, by express agreement (pursuant to the 2011 Agreement) and/or proprietary estoppel.

PARTICULARS OF ESTOPPEL

(1) [P] had through Sister Chio represented [D1] that if she should incur expenses and renovate House 410, [D1] and her son and grandchildren would be allowed to stay at House 410 for as long as they wish, provided they keep the premises in good condition and pay for the utility;

(2) In reliance on such promise and not otherwise, [D1] had sold her [Peng Chau Property] and used the bulk of the proceeds of sale to renovate House 410, and also made various contributions (in cash and in kind, as set out in paragraphs 16 to 21 hereinabove) towards the renovation of [CSK Elderly Home].

(3) In the circumstances it would be unconscionable for [P] to renege on its promise made through Sister Chio, and demand [D1] (and her son and grandchildren) to vacate House 410.”

(b)  D1 thereby counterclaims for a Declaration that “she and her son and grandchildren are entitled to occupy and stay in House 410 for their respective lives, on condition that they keep the premises in good condition and repair and pay for all utility expenses.” (§1 of the Prayer);

(c)  In respect of the scope and effects of that Declaration, Mr Miu in the course of the trial, and upon this Court’s invitation for clarification, accepted and confirmed that D1 is not seeking any Declaration binding on the Government, and that whatever Declaration this Court may grant under the counterclaim, it is not going to be binding on the Government as the landlord, as the Government is not even before the Court;

(d)  In respect of the terms of that Declaration, I record that Mr Miu has in the course of the trial twice reformulated the same;

(i)  Mr Miu first did so in his written closing submissions. The re-formulated Declaration is in the following terms:

“A declaration that the 1^st Defendant and her son and grandchildren are entitled to occupy and stay in House 410 (the house that is currently erected on No. 410 Victoria Road), together with easement to Victoria Road, for their respective lives, on condition that they keep the premises in good condition and repair and pay for all utility expenses”;

(ii)  The second attempt to re-formulate its terms was made in the course of oral closing submissions. The re-re-formulated Declaration is in the following terms, that:

“P is not entitled to evict D1, her son and grandchildren from House 410 (the house that is currently erected on No. 410) provided that they continue to keep the premises in good condition and repair, and pay for all utilities and expenses in according with the terms of the 2011 Agreement.”

I will come back to D1’s counterclaim in the final part of this Judgment.

E.  The deposition-taking exercise

25.  Sister Chio and D1 were both in their eighties when the present action was commenced.

26.  Given the ages of Sister Chio and D1, and by consent, Deputy Judge Herbert Au-Yeung on 15 November 2022 ordered that their depositions be taken pre-trial before a Judge. That exercise was subsequently fixed to commence before this Court on 4 July 2023, with 4 days reserved.

27.  Due to ill health, Sister Chio did not attend the deposition taking exercise. She passed away soon afterwards in July 2023.

28.  D1 attended the deposition-taking exercise. She was cross-examined by Mr Chan. The relevant deposition (“D1/Deposition”) has been authenticated and filed.

29.  I record that during the Pre-trial Review on 2 February 2024:

(a)  Parties agreed and I directed that the D1/Deposition do stand as D1’s evidence and be used at trial without proof that D1 is dead or otherwise unable to attend trial; and

(b)  Parties confirmed that neither of them intended to rely on the witness statements of Sister Chio as hearsay.

F.  Witnesses

30.  D1 has 2 witnesses:

(a)  D1 has filed 2 witness statements (“D1/WS1” and “D1/WS2’). As recorded above, she attended the deposition-taking exercise, and was not called again during the trial; and

(b)  Yam has given one witness statement (“Yam/WS”), and gave oral evidence during the trial.

31.  P only called Sister Poon. She has given 2 witness statements (“Poon/WS1” and “Poon/WS2”). She was cross-examined during the trial.

G.  Agreed issues

32.  Parties have agreed upon a list of issues:

(a)  Whether the 2011 Agreement was the agreement that Sister Chio admitted she had signed in September 2011;

(b)  Whether the renovation work at CSK Elderly Home:

(i)  were done at the request of P (through Sister Chio) or by the D1 of her own suggestion and volition;

(ii)  had costed only HK$180,000 (for which a receipt was given) or HK$210,000, and what was the actual amount of money contributed by D1;

(iii)  whether Sister Chio knew that D1 had applied to HKJC for funding of the installation of the lift and that she had assumed the title of Honorary Supervisor of Maintenance Works for CSK Elderly Home;

(iv)  whether Sister Chio knew about the failure of the application for funding to HKJC and the reasons for such failure;

(v)  whether D1 had told Sister Chio that she needed the receipt for HK$180,000 so that she could claim for tax deduction;

(vi)  whether D1 knew, through her communications with HKJC and the relevant Government authorities or other non-government organizations about the nature of the tenancy granted by the Government to P, and the conditions or restraints imposed in the relevant Tenancy Agreement;

(c)  Whether D1 had sold her Peng Chau Property in order to provide financial assistance to her son for his divorce with his ex­wife or in order to finance the renovation work at House 410;

(d)  If D1 had sold her Peng Chau Property in order to finance the renovation work at House 410, whether this had been done in reliance of a promise from Sister Chio that she and her children and grandchildren could stay at House 410 for their respective lives;

(e)  Issues of Law:

(i)  Whether on a proper construction of the 2011 Agreement, D1 is entitled to the reliefs prayed for in her Counterclaim;

(ii)  Whether the 2011 Agreement conveyed an irrevocable life-licence. If not, under what conditions could the licence be revoked by P;

(iii)  Further or alternatively, whether P is estopped from denying the D1’s (and that of her children and grandchildren) rights to stay at House 410 for their respective lives.

33.  I record that in his written opening, Mr Chan says that given the death of Sister Chio, Issues (a), (b)(iii), (b)(iv), (b)(v) and (c) have become “no longer relevant or material”. In the course of his oral opening, Mr Chan upon this Court’s invitation for assistance, confirmed that upon the death of Sister Chio:

(a)  In respect of Issue (a), P is no longer putting forward any case that the 2011 Agreement was not the agreement which Sister Chio admitted that she had signed in September 2011;

(b)  In respect of Issues (b)(iii) and (b)(iv), P is no longer putting forward any case that Sister Chio did not have knowledge of those matters;

(c)  In respect of Issue (c), P is no longer putting forward any case that D1 had told Sister Chio she sold the Peng Chau Property to provide financial assistance to her son and his divorce.

34.  Mr Miu in his written opening also says that even in respect of the remaining factual issues, some of them (namely (b)(i) and (b)(ii)) may not affect the outcome of the case one way or the other.

35.  In the end, neither counsel structures their closing submissions in accordance with the above issues. I will not hence specifically deal with them issue by issue, though in the end, all the relevant ones would have been answered in the round.

H.  Reliability of witness, and findings on the core facts

36.  Save perhaps on P’s background and history, I do not find Sister Poon’s evidence to be reliable. Sister Chio was the Sister in Charge of CSK Elderly Home. Sister Poon took care rather of the Pak Tin Elderly Home. Their operations were separate. Sister Poon quite clearly was not familiar with the operation and affairs of CSK Elderly Home. She even confused the 404 Gate with the 410/411 Gate. She had no direct contemporaneous knowledge of the material events at CSK Elderly Home. It was not her who dealt with D1. She relies on what Sister Chio might happen to have told her. But quite a number of matters which Sister Poon says and believes did not take place in fact did take place according to the Contemporaneous Correspondence.

37.  The following matters are of particular significance, and bear adversely upon the reliability of Sister Poon’s evidence:

(a)  First and foremost, I reiterate that the authenticity of all the documents in the trial bundle, including the 2011 Agreement, and the Contemporaneous Correspondence, is not in dispute;

(b)  Most of the Contemporaneous Correspondence was disclosed by D1 via her supplemental list of documents filed on 29 August 2022. Sister Poon had never seen any of them prior to disclosure, and had not heard from Sister Chio about them[19];

(c)  Even Sister Chio’s own memory in relation to the Contemporaneous Correspondence had been hazy. As described by Sister Poon[20]:

“在本人收到該些書信文件之後，曾經向趙修女試圖了解2011年至2017年時慈星閣發生的事情；從2011至2017年這段期間趙修女是聖母潔心會的會長。結果我發現趙修女似乎對有關的信件印象很模糊，甚至全無印象，思緒和對答也稍有紊亂的跡象。”

(d)  In respect of the 2011 Agreement:

(i)  Sister Poon says that she had prior to the present action never seen the same, and that based on what Sister Chio’s recollection, Sister Chio had only signed on a 4” x 6” handwritten agreement[21];

(ii)  But execution of the 2011 Agreement by Sister Chio on P’s behalf is now one of the agreed facts;

(e)  At Poon/WS1 §19, Sister Poon says that “據我所知，我們(包括趙修女)從來都沒有要求過曹姊妹花費在修葺410處所上，也從未答應過曹姊妹如果花錢修葺410她會得到任何物業方面的權利和承諾。”. That is not consistent with the 2011 Agreement. While the exact scope of the agreement is subject to dispute, there can be no dispute that it contains some promises in respect of House 410;

(f)  In respect of D1’s appointment as the “全面維修工程義務總監”, Sister Poon says that “我得悉趙修女從未委任過曹姊妹做什麼全面維修工程總監”[22]. But D1’s appointment as such is now part of the agreed facts, which is in any event supported by the Contemporaneous Correspondence;

(g)  In respect of P’s application for installation of a lift, Sister Poon says that “關於升降機一事，我是有聽聞過曹姊妹向香港賽馬會申請捐助興建升降機連接域多利道與慈星閣的。但我們聖母潔心會實際上沒有要求過加裝自動電梯或升降機，也沒有向任何機構申請撥款、資助。”. But it is now part of the agreed facts that the intended renovation works included the proposed installation of such a lift, and that the existence of those applications are supported by contemporaneous documents (amongst the Contemporaneous Correspondence) signed by Sister Chio[23] or otherwise addressed to or copied to P;

(h)  As mentioned above, Sister Poon even confused the 404 Gate with the 410/411 Gate, did not correct her evidence until pages 108-1 to 108-4 were produced, and maintained that D1 had locked the 410/411 Gate[24], when she (Sister Poon) had in fact never approached that gate to check for fear of, she said in evidence, dogs inside No. 410.

38.  I have considered the evidence of D1 and Yam. Their evidence reveals the following core facts and sequence of events:

(a)  D1 was born in 1937 in the Mainland, and retired in Hong Kong in the 90s;

(b)  Both D1 and Yam are devout Catholic;

(c)  After retirement, D1, her husband and their son and daughter lived at an apartment at Kornhill Gardens (“Kornhill Property”). In about 1995, Yam was planning to get married. For the couple’s new residence, D1 and her husband applied to and successfully purchased the Peng Chau Property via the Home Ownership Scheme. The purchase price was HK$811,300. Yam moved there with his wife. Yam subsequently had 3 children (born in 1999, 2000 and 2002) who all lived there. Her daughter at some stage moved out of the Kornhill Property to live with her husband at Yuen Long. Her husband became ill. In 2006, the Kornhill Property was sold to finance his medical expenses. They then moved in and lived with their daughter at Yuen Long. D1’s husband died in 2006. For a while D1 continued to live at Yuen Long with her daughter and son-in-law. Considering that she was getting old, and not wanting to affect their daily life, D1 decided to move out to live alone;

(d)  Against that background, D1 moved into CSK Elderly Home on 20 December 2010. Her intention was to live there for the rest of her life;

(e)  After D1 had moved in CSK Elderly Home, his son and grandchildren visited her from time to time. Sister Chio became acquainted with them. That was early 2011. Upon knowing that Yam and his children had to commune every day for work and school from Peng Chau, Sister Chio introduced House 410 and House 411 to them. She said that if they were interested, they could move it and live there, but they would have to bear the renovation costs for the 2 houses;

(f)  One Sunday morning, D1 together with her son and grandchildren went to inspect Houses 410 and 411. They found the 2 houses to be dilapidated. Yam realised that his wife (since divorced) once attended school at a kindergarten P used to run at the very house at No. 410. At §3 of the ASOC, P pleads that it had indeed used the Premises as a kindergarten on a tenancy granted by the Government since the 1950’s;

(g)  As House 411 was higher up the slope, and as House 410 would be sufficient for their family, D1 and Yam were minded to choose House 410;

(h)  D1 discussed further with Sister Chio. Sister Chio said that if they renovated both Houses 410 and 411, she and her son and grandchildren could live in House 410, and P could use the other house as a dormitory;

(i)  D1 and Yam realised that the costs for renovating both houses would be very substantial. They would not be able to renovate House 410 unless they sold the Peng Chau Property. And even if they were to, they would still not have sufficient funds to renovate both;

(j)  D1 would like to go ahead. Yam expressed concern that once they sold the Peng Chau Property, if they could not move in House 410, they would fall between two stools (“兩頭唔到岸” in his words). He suggested that D1 should get a written agreement from Sister Chio;

(k)  D1 discussed the matter further with Sister Chio. She decided to tell Sister Chio that they only had the ability to renovate House 410. Yam reminded D1 that she should have a written agreement with Sister Chio;

(l)  At §39 of D1/WS1, she says:

“其後我告知趙修女我只願意／有能力翻新410號物業，而不能翻新411號物業，我向趙修女表示我們的資金只足夠維修410號物業，410號物業的面積亦足夠我們居住有餘。我亦向趙修女要求讓我的家人亦可一直居住在410號物業翻新後的建築物直至選擇離開為止，並且需要將此協議以文字紀錄。趙修女同意我的要求，我們便開始詳細討論書面協議內的條款。當時趙修女向我說，她沒有堅持要求我亦維修411號物業的原因是她亦知道我及我的家人的經濟狀況非常有限。”

(m)  Sister Chio asked D1 to prepare the written agreement. D1 proceeded to do so. She and Sister Chio subsequently signed the 2011 Agreement. It is dated 1 September 2011;

(n)  Prior to the execution of the 2011 Agreement, Sister Chio had told D1 that P all along had wished to renovate the 404 Building. She said that for that purpose, it would be necessary to contact contractors and various government departments. A lot of paperwork would be involved. Knowing D1’s education level and ability to handle paper work, Sister Chio issued an appointment certificate dated 28 January 2012 appointing D1 as the “全面維修工程義務總監”;

(o)  In the meantime, and after execution of the 2011 Agreement, D1 made arrangements to sell the Peng Chau Property. According to the land search records of the Peng Chau Property, the sale and purchase agreement is dated 13 April 2012, and the assignment dated 6 July 2012. The consideration was HK$1,700,000;

(p)  In June and July 2012, D1 engaged Apex to renovate House 410. In July 2012, prior to the completion of the renovation works, D1, her son and his children had to stay in a hotel on a short-term basis;

(q)  D1 says that she spent about HK$1.2 million towards the renovation of House 410. Not all were charged by Apex[25]. In respect of those charged by Apex, there are the following documents before the Court:

(i)  the Apex 22/5/2012 Quotation for renovating House 410[26]. The price quoted therein was HK$153,300, with additional purchases on D1’s behalf at RMB65,580 (the later stated to have been paid by D1);

(ii)  an invoice of 26 November 2012[27] (the “Apex Invoice”):

(1)  The invoiced amount therein is HK$658,841, for (ignoring the credit for HK$2,200):

(a)  HK$442,000 under the original quotation of 24 April 2012;

(b)  HK$153,330 under the Apex 22/5/2012 Quotation, which is stated to be for additional works; and

(c)  HK$57,350 and HK$8,391 for further additional works;

(2)  That invoice also records that 2 sums of HK$100,000 and HK$400,000 were paid respectively on 30 April and 10 July 2012;

(r)  In July 2012 upon completion of the renovation works, D1, her son and his 3 children moved into House 410;

(s)  D1 had been assisting P in the renovation works (proposed and actual) of the 404 Building. She did so upon Sister Chio’s request. As explained by D1, she drafted the majority of those correspondence for Sister Chio’s approval and signature. The majority of the replies would also have been provided to her (D1), and were discussed with Sister Chio. In the process, D1 kept copies. From those copies, the Contemporaneous Correspondence is produced. They are between P and Government Property Agency (“GPA”), Planning Department, Social Welfare Department, the Caritas Hong Kong, the Hong Kong Jockey Club Charities Trust, a Legislative Councillor, Lands Department, Li Ka Shing Foundation Limited, and the Central & Western District Office. The dates span between April 2011 and April 2017;

(t)  D1 also says that for the renovation of CSK Elderly Home, she had incurred $210,000. She initially requested reimbursement for that entire sum, but was ultimately persuaded by Sister Chio to regard HK$180,000 out of that sum as donation to P. The receipt (dated 3 April 2012) has been produced[28].

39.  I have considered the above evidence. I have considered all other matters in the round, including the contents of the 2011 Agreement and those other specific matters which I will discuss further below. In my view, the evidence of D1 and Yam is inherently credible, supported by contemporaneous documents and conduct, and does not suffer from any material inconsistency, whether internal or external. Their evidence on the contemporaneous events, in particular the discussions and dealings they had had with Sister Chio, is not materially countered by the evidence of Sister Poon who, as I have observed above, has no direct knowledge of those matters. I find D1 and Yam to be honest and reliable factual witnesses. I accept their evidence and place weight on the same. I specifically accept their evidence which I have outlined above. I prefer their evidence to that of Sister Poon where they differ.

I.  2 limbs of D1’s case

40.  As recorded above, the only relief which P is still seeking is vacant possession of House 410.

41.  I have stated the nature of P’s claim above. P accepts that D1 and her family entered possession with a licence. P says that it is a however a bare licence, on the condition that they were to vacate upon request.

42.  D1 does not dispute possession. Nor does she denies refusal on her part despite demands to deliver possession. She says that she is entitled not to deliver possession. I have also stated her case above. She says that P was not entitled to evict them in the way P did. D1 relies on “express agreement (pursuant to the 2011 Agreement) and/or proprietary estoppel.”

43.  A question has arisen in the course of the trial as to whether those 2 limbs of D1’s case will stand or fall together[29].

44.  Mr Miu has wavered a couple of times as to whether they do.

45.  For the following reasons, I do not believe they do:

(a)  The issue turns upon the nature of contractual licences, their revocability, and the consequences of wrongful revocation. In that regard, I have considered chapter 33 of Megarry and Wade, The Law of Real Property 10^th Edn., which Mr Chan has cited to me. I have also considered the observations made by Lam J (as Lam PJ then was) observed in §121 of Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (HCA 15824/1999, 11 October 2007) that:

“The interest of the Koon (or at that stage, the unincorporated association) under the Footpath Agreement is clearly more than that of a bare licensee. It was at least a contractual licence supported by consideration on the part of the Koon in terms of the promise to construct the Footpath and the gates and to pay for the water and electricity charges. A contractual licence may in some instances give rise to an equitable interest by way of constructive trust or proprietary estoppel binding upon a successor in title other than a purchaser in good faith without notice, see E R Ives Investment Ltd v High [1967] 2 QB 379 contra. Ashburn Anstalt v Arnold [1989] Ch 1 and also Gray, Elements of Land Law, 4^th Edn., paras.12.222 to 12.234 and 12.363 to12.371.”

(b)  In that paragraph, Lam J was discussing those instances where a contractual licence may give rise to an equitable interest “binding upon a successor in title”. Between immediate parties, the position is explained by Megarry and Wade at §§33-007 and 008, that:

“REVOCABILITY OF LICENCES

At common law, a licence, unless coupled with an interest[30], was always revocable, for the licensee had no estate or interest in the land that would entitle him or her to remain there. However, this simple position has been modified in important respects.

1. Revocation restricted by contract.

(a) Revocability a matter of construction. Except in those cases which are governed by statute, whether or not a contractual licence is revocable is a question of construction of the contract …

(b) Remedies for improper revocation. In Wood v Leadbitter a ticket holder was wrongfully removed from Doncaster racecourse, but failed in an action for assault, even though he would have succeeded in an action for breach of contract. The defect of the common law remedy in contract is that the claimant can merely recover the price of the ticket and cannot insist on his or her right to remain on the land. However, if the contract is specifically enforceable in equity, e.g. by an injunction against wrongful interference with the licence, the licensee has then a specific equitable entitlement to remain on the land because an injunction will be granted to restrain a threatened revocation of the licence and also to prevent a wrongful revocation from being enforced. Specific performance may also be granted before the licensee has entered on the land, as it was where a local authority, after a change of political control, repudiated an agreement for the hire of a hall for a two-day conference of the National Front. Equity may thus protect the licensee in his or her relations with the licensor, at least before and during the period of the licence. Even if the licensee cannot seek an equitable remedy until afterwards, the fact that it was due to him or her at the time of the wrongful revocation may entitle him or her to sue for assault if ejected.”

(c)  In the present case, on D1’s case, a unique piece of land being involved, and she having pursuant to the 2011 Agreement incurred costs on the House 410, the 2011 Agreement in my view can be enforced in equity by specific performance, and that an injunction can be granted to restrain threatened wrongful eviction. The fact that no injunction has been sought in the present case does not affect the nature of the agreement involved;

(d)  However, as I will explain, whether the 2 limbs in fact stand or fall together in the end matters not, as for the reasons to be explained, I find that both limbs are established, and that under either limb, the relief this Court is going to (to refuse to) grant is going to be the same.

J.  The 2011 Agreement

J.1.  The applicable law

46.  On interpretation of contracts, I have been cited a large number of authorities, which include Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912-913, Rainy Sky SA v Kookmin Bank [2001] 1 WLR 2900 at [14]-[30], Arnold v Britton [2015] A.C. 1619 at [14]-[22], Wood v Capita Insurance Services Ltd [2017] A.C. 1173 at [8]-[15] and §13, Ng Chun Kong v First Star Development Ltd [2007] 3 HKLRD 281 at §28, Jumbo King Ltd v Faithful Properties Ltd (1999) 2 HKCFAR 279 at 296D-I, Eminent Investments (Asia Pacific) Ltd v DIO Corp (2020) 23 HKCFAR 487, and on the contra proferentem rule, Tam Wing Chuen v Bank of Credit and Commerce Hong Kong Limited [1996] 2 HKLR 161 at 168A-B. I remind myself of the objective nature of the exercise, the types of facts that can be within the factual matrix to be considered, that in particular one can only take into account facts or circumstances which were known or reasonably available to both parties, but cannot take into account the previous negotiations of the parties and their declarations of subjective intent. I remind myself of the textual and contextual approaches, but also the emphasis that interpretation is a unitary exercise. Save one specific one, I otherwise do not repeat those authorities, but will refer to them as appropriate in the discussions below.

47.  The area which I would specially discuss concerns the 5^th point which Lord Neuberger emphasised in Arnold v Britton at §21, that:

“The fifth point concerns the facts known to the parties. When interpreting a contractual provision, one can only take into account facts or circumstances which existed at the time that the contract was made, and which were known or reasonably available to both parties. Given that a contract is a bilateral, or synallagmatic, arrangement involving both parties, it cannot be right, when interpreting a contractual provision, to take into account a fact or circumstance known only to one of the parties.”

48.  In the context of the present case, the issue relates to the contents of the Tenancy Agreement, and in particular whether the Quarterly Auto-renewable Term and the User Restriction can be considered as part of the factual matrix. On the evidence, D1 was only provided by the GPA with a copy of the Tenancy Agreement under cover of its letter dated 13 March 2012. Even the fact (relied upon by Mr Chan) which led P to seeking a copy did not occur until 9 January 2012[31]. All those events occurred after the execution of the 2011 Agreement.

49.  Mr Chan submits that the contents of the Tenancy Agreement should nonetheless be admissible as part of the factual matrix in the construction of the 2011 Agreement. He relies on the words “reasonable available” in the above observations of Lord Neuberger.

50.  I will come back this point in more details when I deal with the element of reliance in the context of proprietary estoppel. As will be explained, I am of the view that on the facts of the case, it is not unreasonable for D1 and Yam not to have sought a copy of the Tenancy Agreement prior to the execution of the 2011 Agreement. But be that as it may, the Tenancy Agreement remained from an objective perspective “reasonably available”. Whilst I do not have any benefit of specific authority on the meaning of that term, given the overall objective nature of the interpretation exercise, I accept Mr Chan’s submissions that the terms of the Tenancy Agreement form part of the factual matrix for the interpretation of the 2011 Agreement.

J.2.  Parties’ submissions

51.  Mr Chan agrees with Mr Miu that the interpretation of the 2011 Agreement should lie at the contextualism end of the textualism / contextualism spectrum. He put emphasis on the contents of the Tenancy Agreement, and in particular the Quarterly Auto-renewable Term, the User Restriction, and the Non-alienation Restriction. He submits that to be in line with those terms, the 4^th Bullet should be interpreted as P retaining the discretionary power to decide whether D1’s son and grandchildren can stay[32] (the “Alleged Discretion”). He submits further that the 1^st Bullet confers upon D1 no irrevocable life licence. To introduce one would be to rewrite the terms. He asks rhetorically as to why the 4^th Bullet had not been clearly drafted to grant D1, her son and grandchildren irrevocable life licences. He also relies on the contra proferentem rule.

52.  Mr Miu submits that the terms of the Tenancy Agreement should not form part of the factual matrix. I have given my reasons as to why I do not accept that submissions. He continues to submit that D1 and Yam know that P had been in occupation of the Premises for a long time. They were devout Catholics. He refers to the full terms of the 2011 Agreement. He places emphasis on the word “條件”. He submits that D1 was going to finance the renovation of House 410 with funds from her “退休金”. She also promised to keep the property well maintained, and to pay for all utility expenses. In return P promised to let them occupy House 410 without having to pay for rates or management charges, and to let her son and grandchildren remain in House 410 until they choose to leave. P’s case of P having the Alleged Discretion would defeat any useful purpose which the 2011 Agreement would serve.

J.3.  Discussion

53.  I have set out the terms of the 2011 Agreement above.

54.  The facts leading to the execution of the 2011 Agreement are significant. I have set them out in §38(b), (e), (f), (g), (h), (k), (l) and (m). I exclude any matters which are not shown to be known to both parties at that time. Importantly, the 2011 Agreement was entered into against the background of Sister Chio having offered D1 and her family to live in House 410 upon D1 undertaking the renovation costs. Both parties knew that D1’s means were limited. The objective intention of the parties in executing the 2011 Agreement clearly was to deal with and set out D1 and her family’s entitlement to occupy House 410 before D1 committing to incurring any costs. D1 is a devout Catholic. Whilst seeking to secure her and her family rights and to obtain written records of the same, she is expected to have remained respectful towards P and Sister Chio.

55.  The text of the 2011 Agreement has to be construed in the above context. It is called a 協議書. Whilst stating that D1’s willingness to bear the renovation costs for House 410 is due to her love for God and desire to maintain P’s property, that is also stated to be for the convenience of her son and grandchildren. Conditions are then set out. The 1^st Bullet starts with the clear words “ROSE全家入住410”. Absence of “物業權” is acknowledged, but that they would not be required to pay for rates and management charges. They undertake those duties set out in the 2^nd and 3^rd Bullets. Then the starting words of the 4^th Bullet state that “ROSE若歸天鄉時，她的兒孫仍可在410居住”. Those are clear words. The word “仍” should be noted, denoting a continuation of residence from the time before D1’s death. Then it is stated that “聖母潔心會應以慈受之心，讓他們繼續留下居住，直至他們自願遷出410物業為止。”. “直至他們自願遷出” objectively and necessarily mean that they can choose to live there during their lifetimes. Textually, those words denote a promise on P’s part that is worded in a respectful way, but do not objectively give P the Alleged Discretion. The very last sentence of the 2011 Agreement (以上條件望聖母潔心會同意，並簽署為盼) is also textually inconsistent with any creation of the Alleged Discretion. The 1^st to 4^th Bullets above are expressly stated (in fact repeated) to be conditions for P to agree. It makes little sense objectively if P were in fact asked to agree to the Alleged Discretion in its favour which would have substantially curtailed the entitlement of Yam and his children after D1’s death.

56.  I include as part of the factual matrix the contents of the Tenancy Agreement. They are not inconsistent with the above. Whilst the term of the Tenancy Agreement became quarterly after the first year, it was automatically renewable unless terminated with 3 months’ prior notice. Albeit not initially under the Tenancy Agreement, P had in fact been in occupation of the Premises for decades. P had been operating a kindergarten, and then an elderly home there. Objectively, the existence of the Quarterly Auto-renewable Term does not negate any intention on P’s part to grant Yam and his children a licence to occupy for life, or support an intention on the part of the parties to create the Alleged Discretion. In so far as the User Restriction and Non-alienation Restriction are concerned, objectively, if the parties had intended to strictly adhere to them, parties could not have intended to agree upon the Alleged Discretion neither, as the Tenancy Agreement conferred upon P none, and P did not have any discretion to breach the User Restriction and Non-alienation Restriction. In this regard, I agree with Mr Miu’s submission, relying on the explanations by Lord Hoffmann NPJ in Jumbo King[33], that “the overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean.”

57.  I come back to what D1’s evidence at §39 of D1/WS1. I accept her evidence. Mr Chan contends in this regard that:

“since it was D1’s own evidence that such ‘promise’ has already been incorporated in the 2011 Agreement, it would be more prudent for this Honourable Court to consider the 2011 Agreement to evaluate what had been agreed/promised, instead of relying on D1’s recollection of what had been agreed/promised orally immediately before the signing of the same. After all, D1’s recollection as to the wordings of such a promise will not be as reliable as the wordings as reflected in the 2011 Agreement.”

I do not accept that contention. I find that D1 is a reliable witness. Her evidence at §39 of D1/WS1 is in my view consistent with the objective meaning of the 2011 Agreement both textually and contextually.

58.  In my view, the wording of the 2011 Agreement is objectively clear. The contra proferentem rule has no application, and in any event does not materially affect the above considerations.

J.4.  Conclusion

59.  For the reasons set out above, I find that objectively construed, the 2011 Agreement constitutes a contractual licence granted by P allowing D1 and her son and grandchildren, upon performance of the conditions therein (namely keeping the premises in good condition and repair and pay for all utility expenses), to occupy and stay in House 410 for as long as they may wish, necessarily meaning for their respective lives. I reject P’s contention and construction in relation to the existence of the Alleged Discretion.

60.  I add however that the contractual licence is purely agreed between P and D1. I reiterate Mr Miu’s acceptance that even on D1’s case, the licence is not binding on the Government. My conclusion should be understood on this basis.

K.  Proprietary estoppel

K.1.  The applicable law

61.  In respect of proprietary estoppel, Ribeiro PJ and Gummow NPJ explained in Cheung Lai Mui v Cheung Wai Shing (2021) 24 HKCFAR 116 at §§23 to 27 as follows:

“23. Put shortly, the requirements of equity to recognise and give relief based on proprietary estoppel are: (a) a representation or assurance made to the claimant; (b) reliance thereon by the claimant; and (c) detriment to the claimant in the consequence of that reliance.

24. More specifically, in Gillett v Holt [2001] Ch 210, 225, 232, Robert Walker LJ (as Lord Walker then was) emphasised that (i) ‘the doctrine of proprietary estoppel cannot be treated as subdivided into three or four watertight compartments’, (ii) ‘the quality of the relevant assurances may influence the issue of reliance’, (iii) ‘reliance and detriment are often intertwined’, (iv) ‘the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all elements of the [proprietary estoppel] doctrine’ and (v) detriment is ‘not a narrow or technical concept’; it need not consist of expenditure of money or other quantifiable financial detriment and may consist of manual labour. His Lordship added ‘In the end the Court must look at the matter in the round’; there is ‘a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances.’

25. With respect to (v) in Clarke v Meadus [2013] WTLR 199 (Ch), [86], Warren J emphasised that ‘where promises are made over a period of years, it is necessary to stand back and look at the claim in the round.’

26. With respect to (iii), and to later statements by Robert Walker LJ in Jennings v Rice [2003] 1 P & CR 8, [50], Lady Arden (then Arden LJ) in Suggitt v Sugitt [2012] WTLR 1607, [44], observed that there need not be ‘a relationship of proportionality between the level of detriment and the relief awarded’; the question on an appeal is whether the relief granted was ‘out of all proportion to the detriment which the claimant has suffered?’

27. It may be confusing to use the term ‘cause of action’ in this context. Rather there are two steps involved. First, once the elements of the proprietary estoppel are established an equity arises; secondly the court then must decide the most appropriate form of relief, and may have regard to the circumstances as they then exist.”

62.  I record that relevant to proprietary estoppel, Mr Chan has also cited to me a number of other authorities which emphasise specific aspects of the doctrine. Those authorities include the following:

(a)  Li Yuk Ying v Wong Yuet Kam [2013] 1 HKLRD 967 and Thorner v Major [2009] 1 WLR 776, which relate to the elements of the doctrine and what need to be proved;

(b)  Gillett v Holt [2001] Ch 210, which relate to the time when unconscionability is to be accessed. Mr Chan has specifically flagged for my consideration the following observations by Robert Walker LJ at §232E to F, that:

“There are some helpful observations about the requirement for detriment in the judgment of Slade LJ in Jones v Watkins 26 November 1987. There must be sufficient causal link between the assurance relied on and the detriment asserted. The issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. Whether the detriment is sufficiently substantial is to be tested by whether it would be unjust or inequitable to allow the assurance to be disregarded — that is, again, the essential test of unconscionability.”

(c)  Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 on the discretion which the courts have in granting relief. I however note and agree with Mr Miu’s submissions that Luo Xing Juan is one on promissory estoppel, which factor will have to be borne in mind if any principles in that case is to be applied here.

K.2.  Whether representation and assurance by P to D1

63.  I accept D1’s evidence. I accept in particular her evidence at §39 of D1/WS1. I repeat my discussions above, and in particular those in relation to the construction of the 2011 Agreement.

64.  In this regard, I accept also D1’s evidence given upon cross-examination to similar effects. I note in particular her following answers which I specifically accept:

“A： 因為自己一個人，想佢老人家一齊住，過得開心啲，咁就搬過去住。2010年12月20號搬入去住唔到幾耐呢，阿仔呀唔放心，經常過嚟探下我，帶住孫仔一齊過嚟探。趙修女就同我講，佢叫我裝修410，講咗好多次，我冇理會到，因為呢個地方我唔了解咩嘢嘅歷史背景，我就唔夠膽應承佢。後屘佢就講呀，佢話呢個都屬於慈星閣，你裝修好，410你住，你畀411裝修好我來住，趙修女咁講。我想諗諗下，邊度有咁好㗎，裝修--產業係邊個㗎？我就唔係幾清楚嘞。後屘趙修女話都係慈星閣㗎，你裝修好了就當我哋嘅職員，個義工，咁就住喺410，唔要緊㗎，你仔同孫呀咪坐船返嚟香港呢面讀書。

Q： 停一停，我冇問你呢個部分。

A： 我都講畀你聽，呢個事--我知，我要講清楚呢個問題。趙修女叫我搬到410講咗好多好多次。最後你講咗約個仔、孫嚟410、411嚟睇嗰陣時，佢哋同意，但係我就話如果你哋同意，之前我就同趙修女講過，我話「一定要白紙黑字寫一個協議書，你同意嘞，簽咗名，我先夠膽賣坪洲啲樓嚟裝修410」，我咁講過。因為我冇白紙黑字，係呀，我冇辦法。

Q： 你停一停，即係停一停先，係，你停一停呀，頭先我都畀你有機會再講呀，我睇下係咪真係我問你嘅嘢。

A： 係。

Q： 不過請阿曹女士，你都理解喇，即係我哋法庭時間好寶貴，即係大家都--而且都花好多錢喺呢個階段，所以如果你證供裏面有提到嗰啲呢，所以我就唔會--未必會每段同你問問嘅，即係我想一啲集中聚焦嘅，咁所以想你答番我問題。

A： 不過我點解要講咁多話呢？要咁囉嗦啲事情，我要澄清，唔係話好想住410，我本身開始唔係好想住嘅。”

65.  I find that Sister Chio had made clear and unequivocal representations and assurances to D1 that upon House 410 being kept in good condition and repair and all utility expenses paid for, she and her son and grandchildren could occupy and stay in House 410 for as long as they may wish, necessarily meaning for their respective lives.

66.  Sister Chio was at the material time the Sister in Charge of CSK Elderly Home. I find that she made the representation and assurance on P’s behalf.

K.3.  Whether reliance reasonable

67.  Mr Chan relies on Thorner v Major, and in particular §§5, 15, 26, and 77-78, for the proposition that “reliance is not sufficient, it has to be reasonable reliance.”[34]

68.  The facts in Thorner v Major are material for that preposition to be properly understood:

(a)  In that case, the claimant (David) was a farmer who, for nearly 30 years, did substantial work without pay on the farm of his father’s cousin (Peter). Peter left no will before his death. David claimed that by reason of the assurance and reliance, Peter’s estate was estopped from denying that he had acquired the beneficial interest in the farm;

(b)  As observed by Lord Hoffmann[35],

“A distinctive feature of this case … was that the representation was never made expressly but was ‘a matter of implication and inference from indirect statements and conduct’. It consisted of such matters as handing over to David in 1990 an insurance policy bonus notice with the words ‘that's for my death duties’ and other oblique remarks on subsequent occasions which indicated that Peter intended David to inherit the farm. As Lloyd LJ observed, at para 67, such conduct and language might have been consistent with a current intention rather than a definite assurance. But the judge found as a fact that these words and acts were reasonably understood by David as an assurance that he would inherit the farm and that Peter intended them to be so understood.”

(c)  It was upon that distinctive feature that:

(i)  Lord Hoffmann observed, at §5, that

“At that point, it seems to me, the Court of Appeal departed from their previously objective examination of the meaning which Peter’s words and acts would reasonably have conveyed and required proof of his subjective understanding of the effect which those words would have upon David. In my opinion it did not matter whether Peter knew of any specific alternatives which David might be contemplating. It was enough that the meaning he conveyed would reasonably have been understood as intended to be taken seriously as an assurance which could be relied upon. If David did then rely upon it to his detriment, the necessary element of the estoppel is in my opinion established. It is not necessary that Peter should have known or foreseen the particular act of reliance.”

(ii)  Lord Scott, having identified the 3 main elements requisite for a claim based on proprietary estoppel, observed at §15 that:

“These elements would, I think, always be necessary but might, in a particular case, not be sufficient. Thus, for example, the representation or assurance would need to have been sufficiently clear and unequivocal; the reliance by the claimant would need to have been reasonable in all the circumstances; and the detriment would need to have been sufficiently substantial to justify the intervention of equity. On the factual findings made by the judge each of the three elements had been present in the period 1990 until Peter’s death in 2005.”

(iii)  Lord Rodger observed at §26 that:

“Even though clear and unequivocal statements played little or no part in communications between the two men, they were well able to understand one another. So, however clear and unequivocal his intention to assure David that he was to have the farm after his death, Peter was always likely to have expressed it in oblique language. Against that background, respectfully adopting Lord Walker’s formulation, I would hold that it is sufficient if what Peter said was ‘clear enough’. To whom? Perhaps not to an outsider. What matters, however, is that what Peter said should have been clear enough for David, whom he was addressing and who had years of experience in interpreting what he said and did, to form a reasonable view that Peter was giving him an assurance that he was to inherit the farm and that he could rely on it.”

(iv)  Lord Neuberger observed at §77 and 78 that:

“77 In my judgment, those findings clearly indicate that the deputy judge was of the opinion, contrary to the view expressed by the Court of Appeal, that the statements he found to have been made by Peter were reasonably understood by David to indicate that Peter was committing himself to leaving the farm to David, and were reasonably relied on by David as having that effect. Such a reading is strongly supported by the deputy judge’s observations, at para 125, that, if it was necessary to make such a finding, he would have regarded Peter’s statement in 1990 as ‘tantamount to an assurance to David’, and that he did ‘not accept’ that it was ‘ambiguous’.

78. … It may be that there could be exceptional cases where, even though a person reasonably relied on a statement, it might be wrong to conclude that the statement-maker was estopped, because he could not reasonably have expected the person so to rely. However, such cases would be rare, and, in the light of the facts found by the deputy judge, it has not been, and could not be, suggested that this was such a case.”

69.  In the present case, the representation and assurance which Sister Chio made to D1 are in my view clear and equivocal, both objectively and as between them. The distinctive feature in Thorner v Major does not appear here. As observed by Walker LJ in Gillett v Holt, “the quality of the relevant assurances may influence the issue of reliance.”

70.  On the element of reliance, D1, as summarised by Mr Miu, relies on her spending “$1.2 million (or at least HK$658,841 + RMB 65,580) on renovating [House] 410”.[36]

71.  The sequence of events which D1 and Yam gave is coherent and inherently credible. Sister Chio made the offer, representations and assurances to D1. D1 wanted to go ahead. But her means were limited. They need to sell the Peng Chau Property to refinance the renovation of House 410. At that time, the Kornhill Property had been sold to finance her husband’s medical expenses. Yam was living at the Peng Chau Property with his 3 children. Selling the Peng Chau Property was clearly a big decision for them. They would have nowhere to live after the sale. Yam was worried that they might fall between the stools. He reminded D1 to get something in writing. Further discussions ensued. The 2011 Agreement was then executed. D1 then proceeded with the sale. She then obtained quotations for the renovation. They had to rent short-term hotel accommodation after the sale and before House 410 was ready. D1’s reliance upon the representations and assurances made by Sister Chio is on the fact clear, whether from an objective or subjective perspective.

72.  Mr Chan relies heavily on the time line as to when he submits D1 became aware of the “temporary & short-term nature of the Tenancy Agreement, the restrictions imposed therein, the history and relocation plan that the Government intended [CSK Elderly Home] to fulfill”[37]. He refers to the letter of 9 January 2012 from GPA to Apex[38]. A request to GPA for a copy of the Tenancy Agreement was then made, and a copy was provided on 13 March 2012. He submits that D1 must therefore have known between January and March 2012 and the tenancy arrangement between the Government and P regarding to CSK Elderly Home was temporary in nature. He refers to the Apex 22/5/2012 Quotation and the Apex Invoice. He points out that according to the Apex Invoice, D1 only paid the sums of HK$100,000 and HK$400,000 on 30 April and 10 July 2012. He submits that D1 had the option of not paying. He submits that any reliance was therefore unreasonable.

73.  In so far as D1 is concerned, Mr Miu relies on her evidence given during cross-examination, that:

“A: 呢個租約畀我嘅全部英文，我同趙修女講「我唔明，我畀你。」”

……

“Q: 好，總之--所以你嘅講法就係話實際上租約租期係幾耐就唔知，係唔係？即係英文收到都唔知道，係唔係？

A: 係。

Q: 但係你會不會話知道佢係即係算係一個季度續租--即係未必知道係唔係季度，但係意思係一個短期續租嘅呢樣嘢，會唔會有呢個概念？

A: 當時我就感覺香港政府比較體諒老人家，關心老人家就唔收慈星閣安老院嘅404呢個租約，即係唔收番，即係繼續，好似好同情老人家，就畀佢住落去，我知道就係咁樣嘅情形，我自己身置當時嘅睇法就係咁樣。”

Mr Miu accepted that a letter dated 31 July 2012 was sent by Social Welfare Department to Sister Chio[39]. It was passed on to D1. That letter is in Chinese. Therein, the landslide, the temporary evacuation of CSK Elderly Home, the slope-stabilization works, the setting up of the Pak Tin Elderly Home, and the Department’s stance that P should move the residents from CSK Elderly Home to Pak Tin Elderly Home were recited. Mr Miu submits that by that stage however, all costs towards the renovation of the House 410 had been incurred.

74.  In so far as Yam is concerned, he said during cross-examination that he only became aware of the quarterly term of the Tenancy Agreement in about 2015 or 2016, and he was shocked about that.

75.  I accept the evidence of D1 and Yam cited and discussed above. On the evidence, it was only about end of July 2012 when D1 became aware of the tenancy arrangement between the Government and P, and Yam much later.

76.  D1’s incurring of the renovation costs should also and in any event be considered in the following context:

(a)  D1 and Yam are both devout Catholics. They trusted Sister Chio. It is reasonable for them to rely on the representations given by Sister Chio, irrespective of the strict terms of the Quarterly Auto-renewable Term, the User Restriction, and the Non-alienation Restriction. It is not unreasonable for D1 and Yam not to have sought a copy of the Tenancy Agreement prior to the execution of the 2011 Agreement;

(b)  In particular, P had been in occupation of the Premises for decades even before the Tenancy Agreement. Yam’s ex-wife had attended kindergarten P used to operate there. It is reasonable for them to proceed on the basis that P’s occupation of the Premises would continue, irrespective of the strict terms of the Tenancy Agreement.

77.  In so far as Mr Chan seeking to argue that D1 voluntarily agreed to bear the renovation costs as donations, out of love of God and the desire to maintain P’s property, I reject the argument. That is inherently most improbable when the amount involved is taken into account, and the sale of the Peng Chau Property is considered at the same time.

78.  Mr Chan submits that Sister Poon gave evidence in court to the effect that Sister Chio reported to the Sisters that D1 told Sister Chio that she and her family intended to reside in House 410 for several years so that her grandchild / grandchildren may finish his / their study at the University of Hong Kong (HKU), and that that was P’s expectation. I do not accept the submissions. I do not find Sister Poon’s evidence in this regard to be reliable. I accept D1’s evidence on the representations and assurances that Sister Chio had given her.

79.  On the facts of the present case, and having considered the evidence in the round and in context, I am of the view that Sister Chio would reasonably have expected D1 to rely on the representations and assurances she had given, including those in the 2011 Agreement, and that it is reasonable for D1 to have relied on them. I find further that D1 had in fact relied on them. She otherwise would not have sold the Peng Chau Property.

K.4.  Detriment

80.  D1 has, in reliance upon the representations and assurances Sister Chio had given her, incurred costs and expenses in the renovation of House 410.

81.  Mr Chan has raised an issue as to how much those costs and expenses were.

82.  D1’s evidence is that she has incurred about HK$1.2 million towards the renovation of House 410. She says at §55 of D1/WS1 that:

“在大約2012年6月至7月期間，我聘請裝修公司創峰工程有限公司翻新410號物業，花了大約港幣$1,200,000元翻新費用。”

83.  Whilst she was during cross-examination referred to the Apex Invoice, she was not specifically challenged on the breakdown of that HK$1.2 million.

84.  During re-examination, D1 said:

“Q： 第55段[40]，你睇一睇。

A： 唔。大約2012年6月至7月期間，聘用裝修公司創峰工程有限公司翻新410物業，花了大約$120萬，係呀。

Q： 你嗰度話你使咗$120萬，係咪呀？

A： 唔，唔。

Q： 但係你呢個...

A： 收據。

Q： ...收據只係658,000鈫...

Judge：呢張係發票。

Q： 發票，係，發票，只係658,000鈫，咁你可唔可以解釋一下？

A： 解釋，有時佢哋師傅嚟食飯呢，我請佢哋食飯呢，係咪？咁有時買啲其他瑣碎嘅嘢呢，佢哋畀我買嘅馬桶我唔啱，我自己買咗呢，係咁樣。

Q： 咁即是話，咁你呢個$120萬嘅數係邊度嚟㗎？

A： $120萬嘅數呢，應該有啲垃圾要清走㗎，唔係創峰公司清走，但係佢都有搵人哋嗰個清嗰啲垃圾，嗰啲搭建嗰啲建築，車咗一日都有1,500鈫㗎，咁車咗三四次，我都有畀錢，但係你$120萬唔係話創峰公司自己攞咗，我裝410所有嘅費用大概就用咗$120萬，包埋好多方面嘅開支。

Q： 你係咪有一個--即係你話你嗰$120萬係你有條數計到出嚟，但係就冇單據？”

Mr Chan then objected on the basis that he had not cross-examined on the breakdown of the HK$1.2 million. Mr Miu then did not pursue the line of re-examination any further.

85.  On the evidence, in the absence of specific challenge, I accept D1’s evidence that she had spent altogether about HK$1.2 million towards the renovation of House 410. Some of them were not paid to Apex. In respect of the Apex 22/5/2012 Quotation and the Apex Invoice, whilst they record only actual payments by D1 in the total amount of HK$500,000 plus RMB65,580, I find it more likely than not that she had settled the whole invoiced amount.

86.  The incurring of such costs and expenses are detriment, and are detriment suffered as a result of D1’s reliance of the representations and assurances given to her by Sister Chio.

87.  Mr Chan reminds the Court that the issue of detriment must be judged at the moment when the person who has given the assurance seeks to go back on it. He submits that D1 and her family have by now lived in House 410 for 12 years.

88.  I do not accept that submission. I have set out and discussed above what representations and assurances I found Sister Chio had given to D1. P stood by when D1 incurred costs on the renovation of House 410. There is no evidence as to the value of D1 and her family’s occupation during the last 12 years. But by now, D1 had sold the Peng Chau Property, and had incurred the costs and expenses. She is still well and alive. P then seeks to evict her and her family, contrary to the representations and assurances, and contrary to the terms of the 2011 Agreement. P is in effect saying that D1 has enjoyed enough, though not to the full extent as assured, so that she should now leave, despite what she had been assured. P cannot be permitted to do that. It is particularly so when P seeks to re-possess House 410 for its own use, “so that it could be converted into a dormitory for [P’s] nuns…”[41]. Such conduct is in my view is clearly unconscionable.

K.5  Conclusion

89.  I recite again the limit of D1’s counterclaim. She does not seek any relief binding on the Government. I have also set out above how Mr Miu has reframed the relief which D1 is seeking.

90.  I do not intend to be technical here. Nor has submissions on the strict technical and legal position been made to this Court in so far as the Government is concerned. I will simply conclude, on the evidence before me, and for the reasons set out above, as between P and D1, elements of proprietary estoppel are factually established.

L.  P’s claim

91.  With the above findings, I come back to P’s claim.

92.  The most important plank of P’s claim for possession is that Ds were merely granted a licence to occupy House 410 “on the condition that they were to vacate it upon [P’s] request”.

93.  In my view, P has failed to establish it.

94.  On this basis alone, P’s claim fails.

95.  In my view, and for the reasons set out above, both limbs of D1’s defence as between P and Ds are in any event also successful.

96.  I dismiss P’s claim for possession of House 410.

97.  As I have recorded above, P no longer pursues its claim for mesne profit or any order for unlocking any gate.

98.  I dismiss P’s claim in its totality.

M.  D1’s Counterclaim

99.  I have set out above the terms of the Declaration which D1 prays for in her D&C, and the terms of the re-formulated and re-re-formulated versions subsequently put forward in the course of the trial.

100.  The granting of a Declaration is discretionary.

101.  The following factors weigh decisively against the grant of any version of the Declaration being sought:

(a)  The original Declaration sought fails to deal with any right of way. D1 has also failed to adduce any expert evidence on the land boundary between No. 410 and No. 411;

(b)  As Mr Miu has confirmed, any declaration which D1 is seeking is not intended to be binding on the Government, and is not sought to be in rem;

(c)  The original Declaration sought also fails to reflect (b) above;

(d)  The re-formulated version still fails to specify that it is not intended to be binding on the Government. It also fails to specify what the “easement” which it refers to is;

(e)  The re-re-formulated Declaration is in effect in personam against P;

(f)  Under the limb of D1’s case based on the 2011 Agreement, D1’s entitlement to remain in possession is contractual in nature;

(g)  Under the limb of D2’s case based on proprietary estoppel, in so far as the 2^nd stage of the exercise is concerned (as explained by Ribeiro PJ and Gummow NPJ explained in Cheung Lai Mui), in light of the in personam nature of the re-re-formulated Declaration sought, I am of the view that the most appropriate form of relief is simply to refuse P’s claim;

(h)  I have given full reasons for dismissing P’s claim. Those reasons remain valid even after D1’s death. Upon dismissal of P’s claim with those full reasons, I do not see any practical further utility in granting D1 the re-re-formulated in personam Declaration now being sought.

102.  For the above reasons, I refuse to grant D1 the re-re-formulated Declaration.

N.  Overall conclusion

103.  For the above reasons, I dismiss both P’s claim and D1’s counterclaim.

O.  Costs

104.  Even though I have in my discretion refused to grant D1 any Declaration, her factual case in support forms the basis for my dismissal of P’s claim.

105.  Having considered the facts and the reasons for dismissing both the claim and counterclaim, I make a costs order nisi, absolute within 14 days, that P shall pay to D1 80% of the costs of the entire action, claim and counterclaim included, to be taxed if not agreed. For avoidance of doubt, previous costs orders are not disturbed. D1’s own costs shall be taxed in accordance with the Legal Aid Regulations.

Mr Jevons Chan, instructed by Liu, Chan & Lam, for the Plaintiff

Mr Nelson Miu, instructed by Cedric & Co, assigned by Director of Legal Aid, for the 1^st Defendant

The 2^nd Defendant was not represented and did not appear