Kwan Kwai Lin and Another v. Yeung on Ki

CACV 140/2022, [2025] HKCA 203

On Appeal From [2022] HKCFI 174

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 140 OF 2022

(ON APPEAL FROM HCA NO 3013 OF 2015)

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J U D G M E N T

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Hon Chow JA (giving the Judgment of the Court):

INTRODUCTION

1.This is the Plaintiffs’ appeal against the judgment of Wilson Chan J dated 14 January 2022 rejecting their claim in respect of a property known as Flat A, 6/F, Campbell House, 9 Kik Yeung Road, New Territories (“the Property”) held and registered in the name of the Defendant.

BACKGROUND FACTS

2.The 1^st Plaintiff (“Kwan”) and Yeung Ho Wai, deceased (“the Deceased”) were husband and wife. The Deceased passed away on 4 June 2013. Kwan is the administrator of the estate of the Deceased, and is suing in his personal capacity (as the 1^st Plaintiff) as well as in his representative capacity (as the 2^nd Plaintiff) in this action.

3.The Defendant was the lawful and natural sister of the Deceased.

4.On 8 August 2003, the Defendant entered into a written agreement (“the SPA”) for the purchase of the Property at the price of HK$600,000, of which HK$10,000 was paid as deposit and in part payment of the purchase price and the balance of HK$590,000 was to be paid on completion.

5.On 10 October 2003:

(1)  completion of the SPA took place, and the Property was assigned to the Defendant in her sole name; and

(2)  a mortgage (“the Mortgage”) of the Property was executed by the Defendant in favour of Bank of China (Hong Kong) Limited (“BOC”) acting in its own right and as agent for and on behalf of The Hong Kong Housing Authority (“HKHA”) to secure loans in the sums of HK$265,000 from HKHA and HK$305,000 from BOC (“the HKHA Loan” and “the BOC Loan” respectively, and “the Loans” collectively). It is not in dispute that the Loans, in the total sum of HK$570,000, were utilized to pay part of the balance of the purchase price of the Property.

6.The BOC Loan was also secured by a joint and several guarantee (“the Guarantee”) dated 8 October 2003 executed by Kwan and the Deceased to the extent of HK$305,000 together with interest thereon and other costs and charges.

7.It is the Plaintiffs’ case that prior to the making of the SPA, there was an express oral agreement (“the Alleged Agreement”) between Kwan and the Deceased on the one part and the Defendant on the other part that:

“(a) The Property would be purchased under the sole name of the Defendant. Despite that, the 1^st Plaintiff and the Deceased would be jointly entitled to the 100% beneficial interest in the Property.

(b) The Defendant would obtain loans (‘the Loans’) to finance the purchase of the Property, including a mortgage loan from a bank, and a loan from The Hong Kong Housing Authority (‘HA’) as the Defendant was eligible for obtaining a loan under the Home Assistance Loan Scheme implemented by HA.

(c) To secure the Loans, the 1^st Plaintiff and the Deceased would be the guarantors for the repayment of Loans.

(d) The 1^st Plaintiff and the Deceased would be solely responsible for making monetary contribution to the purchase of the Property including making the upfront payment and repayment of the Loans (and the Government rents, management fees and utilities bills, etc.), and the Defendant was not required to make any monetary contribution.”[1]

8.According to the Plaintiffs:

(1)  the SPA, the Loans, the Mortgage, the Guarantee and the related assignment were entered into, obtained and executed pursuant to the Alleged Agreement;

(2)  acting in reliance on and pursuant to the Alleged Agreement, Kwan and the Deceased duly made the upfront payment of HK$30,000 for the purchase of the Property, and made repayment of the Loans under an arrangement whereby the Deceased would on each and every calendar month transfer to the Defendant’s account a sum required for making the monthly mortgage repayment and the Defendant would use such sum to make repayment accordingly; and

(3)  Kwan and the Deceased were at all material times responsible for paying the Government rents, management fees and utilities bills in respect of the Property.

9.The Alleged Agreement is denied by the Defendant, who claims that prior to the execution of the SPA, it was the common agreement and/or understanding and/or intention between the Deceased and the Defendant (“the Alleged Common Understanding and/or Intention”) that:

“(a) The Property would be purchased in the sole name of the Defendant and the Defendant would be the sole legal and beneficial owner of the Property;

(b) The Defendant would be solely responsible for obtaining mortgage loan(s) to finance the purchase of the Property;

(c) The Deceased would be the guarantor for the repayment of the mortgage loan to be taken out by the Defendant;

(d) The Defendant would pay the down payment of HK$80,000 upfront and from her own resources for the purchase of the Property;

(e) The monthly mortgage repayments would be made by the Deceased;

(f) In consideration of the monthly mortgage repayments to be made by the Deceased as pleaded at subparagraph (e) above, the Defendant agreed to take care of the mother and father of the Defendant and the Deceased (‘Parents’), and the Defendant agreed to allow the Deceased’s family (which included the Deceased, the 1^st Plaintiff and the Deceased’s daughter (‘Daughter’)) (‘the Deceased’s Family’) to reside with the Defendant in the Property under a bare licence revocable upon reasonable notice (‘Oral Licence’);

(g) Pursuant to paragraph [(f)] above, since in or around July 2003, the Defendant had duly taken care of the Parents. However, the father of the Defendant and the Deceased passed away in or around March 2015 and the Defendant had still duly taken care of the Defendant’s and the Deceased’s mother up till the present”[2].

10.In other words, each side is putting forward a version of an express oral agreement, understanding or arrangement in support of a claim for the sole beneficial ownership of, or a beneficial interest in, the Property.

11.After completion of the purchase of the Property, the Deceased’s family and the Defendant all resided in the Property until around October 2007 when the Defendant moved out of the Property to cohabitate with her then boy-friend.

12.As mentioned above, the Deceased passed away on 4 June 2013. According to the Plaintiffs, the Defendant voluntarily agreed to and did repay the Loans after the death of the Deceased. Disputes later arose between Kwan and the Defendant concerning the ownership of the Property.

(1)  According to Kwan, in or about the end of 2014, he asked the Defendant to transfer the Property to him. The Defendant originally said she would do so, but subsequently failed to follow up with the matter. On 26 March 2015, Kwan obtained letters of administration of the estate of the Deceased. He later found out that the Defendant had, without his knowledge, mortgaged the Property as security for a loan of HK$2,310,000 from BOC in 2015 (“the 2015 Mortgage”).

(2)  On the other hand, the Defendant says that in or about early December 2015, she revoked the Oral Licence and asked Kwan and his daughter to move out of the Property, but they failed or refused to do so despite repeated demands.

13.On 18 December 2015, the Plaintiffs commenced the present action against the Defendant claiming to be beneficially entitled to the Property. At the trial, the Plaintiff’s claim was advanced on 3 alternative, but non-mutually exclusive, bases:

(1)  an express common intention constructive trust based on the Alleged Agreement;

(2)  an inferred common intention constructive trust based on monetary contribution to the purchase price of the Property; and/or

(3)  a resulting trust arising from monetary contribution to the purchase price of the Property[3].

There was also a claim by the Plaintiffs against the Defendant for breach of trust for causing and/or procuring the creation of the 2015 Mortgage.

14.The Defendant denied the Plaintiffs’ claim for the Property, and counterclaimed against the Plaintiff for vacant possession of the Property and mesne profits on the ground of their (alleged) wrongful occupation of the Property despite the revocation of the Oral Licence.

15.There were some other issues raised by the parties on the pleadings, including (i) the question of the legality of the Alleged Agreement (raised by the Defendant); and (ii) an allegation of unauthorized withdrawal or misappropriation by the Defendant of NZD16,885.07 and RMB22,492.04 belonging to the Deceased’s estate on 23 June 2015 (raised by the Plaintiffs). These issues were either not pursued at the trial, or were settled during the trial[4], and do not require further consideration here.

THE JUDGMENT

16.At the trial of the action before the Judge, Kwan and two witnesses, Cheung Ying Ming (“Cheung”) and Ho Ching Ming (“Ho”) (the Deceased’s colleagues and friends) gave evidence on behalf of the Plaintiffs, while the Defendant and Fong Po Ling (“Fong”) (the Deceased’s domestic helper) gave evidence on behalf of the defence.

17.By his written judgment (“the Judgment”) dated 14 January 2022, the Judge rejected the Plaintiffs’ claim in respect of the Property and held that the Defendant was legally and beneficially entitled to the Property.

18.In the Judgment, the Judge started off by giving an outline of the parties’ respective cases (Section B, §§3 to 32). Next, he identified the following issues that he had to determine (Section C, §33):

(1)  whether the Plaintiffs could prove that they had any beneficial ownership of the Property;

(2)  whether there was any breach of trust by the Defendant by taking out the 2015 Mortgage; and

(3)  whether the Defendant was entitled to vacant possession of the Property and mesne profits from the Plaintiffs, and, if so, the quantum.

19.After setting out the applicable legal principles (Section D, §§35-45), in respect of which there is no complaint by the Plaintiffs, the Judge made the following material findings:

(1)  There were major inconsistencies between Kwan’s oral evidence, his pleaded case and the evidence in his witness statements on the material issues in dispute (Section E2, §§48-54).

(2)  The inherent probabilities of the case strongly favoured the Defendant (Section E3, §§55-72).

(3)  The relevant WhatsApp messages passing between Kwan and the Defendant supported the Defendant’s case that she was the true owner of the Property (Section E4, §§74-75).

(4)  The Defendant was a credible and reliable witness (Section E5, §§79-80).

(5)  Kwan was an incredible and unreliable witness (Section E6, §§81-82).

(6)  Fong’s evidence, which the Judge apparently accepted, generally corroborated the Defendant’s version of the events (Section E7, §§83-84).

(7)  Little weight would be placed on the evidence of Cheung and Ho because their evidence was purely hearsay based on alleged casual conversations with the Deceased many years ago (Section E8, §85).

20.The Judge expressed his conclusions at §§87 to 89 of the Judgment, as follows:

“[87] The plaintiffs bear the burden of proving that the beneficial interest in the Property lies with the plaintiffs despite the defendant being its legal owner. In light of the above, I find that the plaintiffs have failed to prove that there is any common intention constructive trust between Kwan and the Deceased on the one hand, and the defendant on the other.

[88] To the contrary, I hold that the defendant’s version of facts is to be believed, and I thus find that there is no resulting trust either.

[89] Accordingly, I find that there is no defence to the defendant’s counterclaims.”

21.The Judge made the following orders at §90 of the Judgment:

(1)  the Plaintiffs’ claims against the Defendant be dismissed;

(2)  the Plaintiffs do deliver vacant possession of the Property to the Defendant within 28 days; and

(3)  the Plaintiff do pay mesne profits for occupation of the Property at the rate of HK$8,000 per month from 4 January 2016 to 31 December 2020, and thereafter at the rate of HK$9,000 per month from 1 January 2021 until delivery up of vacant possession of the Property.

THE APPEAL

22.A total of 8 substantive grounds of appeal are raised in the Plaintiffs’ Amended Supplementary Notice of Appeal:

(1)  Ground 1 complains that the Judge failed to consider the Plaintiffs’ (or the 2^nd Plaintiff’s) case on inferred common intention constructive trust.

(2)  Ground 2 complaints that the Judge erred in holding that the inherent probabilities of the case were strongly in favour of the Defendant without having proper regard to the fundamental and material inherent improbabilities of her case and evidence.

(3)  Ground 3 contends that the Judge misdirected himself on various aspects of material evidence.

(4)  Ground 4 contends that the Judge misdirected himself on various aspects of the contemporaneous WhatsApp messages between the Defendant and Kwan/the daughter.

(5)  Ground 5 contends that the Judge erred in deciding the case on burden of proof and/or relying too much on the burden of proof.

(6)  Ground 6 contends that the Judge was wrong to reject the evidence of Cheung and Ho.

(7)  Ground 7 complains that the Judge failed to properly consider the Plaintiffs’ case on resulting trust.

(8)  Ground 8 raises the complaint of judicial copying.

23.§9 of the Amended Supplementary Notice of Appeal sets out the conclusions which the Plaintiffs contend the Judge should have arrived at, namely:

(1)  the Defendant’s case and evidence be rejected;

(2)  the Plaintiffs’ case and evidence were inherently more probable and they were entitled to 100% beneficial interest in the Property by way of inferred common intention constructive trust; and

(3)  alternatively, even if the Plaintiffs’ case on common intention constructive trust could not be established, the Deceased’s estate was beneficially entitled to the Property by way of resulting trust.

24.There is no respondent’s notice filed by or on behalf of the Defendant.

GROUND 8: JUDICIAL COPYING

25.We shall first deal with Ground 8 concerning judicial copying, because it has an impact on the approach that should be adopted when considering the remaining grounds of appeal.

26.The applicable principles concerning judicial copying are well-settled. The relevant authorities were carefully reviewed, and principles set out, in the judgment of Yuen JA in Wong To Yick Wood Lock Ointment Ltd v Singapore Medicine Co [2023] 3 HKLRD 311, at §§14.1 to 26. Her Ladyship’s analysis was adopted and applied by Kwan VP in her judgment in Lo Kai Shui v HSBC International Trustee Limited and Others [2023] HKCA 983, at §§12-16. The fundamental point is that a judge must bring an independent mind to his judicial function and be seen to do so. When considering the issue of judicial copying, the Court of Appeal would look at the importance and quality of the judge’s own reasoning rather than the percentage of the copying.

27.In the present case, the Plaintiffs complain that substantial and material parts of the Judgment were copied from the Defendant’s Opening Submissions dated 27 September 2021 or Closing Submissions dated 19 October 2021. In particular, §§33 to 45 of the Judgment were virtually copied from §§27 to 39 of the Defendant’s Opening Submissions, and §§46 to 87 of the Judgment from §§2 to 48 of the Defendant’s Closing Submissions. In support of this ground of appeal, Mr Ma has prepared a table comparing the relevant paragraphs of the Defendant’s Opening or Closing Submissions with the corresponding paragraphs of the Judgment, highlighting the extent of the reproduction of the Defendant’s Opening or Closing Submissions in the Judgment.

28.Ms Law has, rightly, not seriously disputed the fact that there have been very substantial reproductions of Defendant’s Opening or Closing Submissions in the Judgment. She submits, however, that the mere fact of judicial copying does not lead inexorably to the conclusion that the presumption of judicial integrity and impartiality has been displaced, or that there has been an injustice which requires the appeal to be allowed, and says the presumption of judicial integrity and impartiality carries considerable weight, and cogent evidence is required for its rebuttal. She relies on the following matters to contend that the Plaintiffs have failed to pass the threshold to make good this ground of appeal:

(1)  A judge will often derive great assistance from counsel’s written submissions, and there is nothing inherently wrong in his making extensive use of them, with proper acknowledgement. In the present case, the Judge gave attribution for submissions (in some instances) and made clear that his reasoning was in agreement with the Defendant’s arguments.

(2)  There is no substance in the Plaintiffs’ allegations of plagiarism insofar as they relate to matters set out by the Judge under the sub-headings “Issues at Trial” and “Relevant Legal Principles”. Such matters do not relate to the essential reasoning of the Judge.

(3)  Whilst justice must be seen to be done, in deciding whether that is so, it is necessary to go beyond first impressions. Regard is to be had to the totality of the circumstances. Ms Law points to the exchanges between counsel and the Judge in submissions, which showed that the Judge had read and digested the case materials, grappled with the parties’ respective cases and engaged with the evidence, and the Judge was clearly prepared to listen to and consider both parties’ cases. The Judge also pointed out inconsistencies and improbabilities in Kwan’s evidence during the trial. Ms Law also says that there were changes made and comments added in the Judgment which demonstrate that the Judge read with attention the passages which he was adopting and engaged critically with the submissions.

Ms Law submits that once regard is had to the totality of the circumstances, the Judge’s adoption of parts of the Defendant’s submissions does not lead a reasonable person to form the view that the Judge did not put his mind to the evidence and issues in dispute, or did not render an impartial and independent decision.

29.We agree with Ms Law that the Judge’s reproduction of those sections in the Defendant’s Opening Submissions in the Judgment under the headings “Issues at Trial” (Section C) and “Relevant Legal Principles” (Section D) has little significance, since those matters are not controversial. Of greater concern are those parts in the Judgment concerning the Judge’s discussion of the issues in the case. They constitute the entirety of his reasoning leading to his findings and conclusions in the Judgment. Moreover, as will be seen below, one of the critical findings made by the Judge concerned the credibility of the Defendant. The Judge found that the Defendant was a credible and reliable witness. In so finding, the Judge placed emphasis on various matters which he considered highlighted the credibility or reliability of the Defendant’s evidence (§80 of the Judgment). That part of the Judgment was, however, a virtual reproduction of §40 of the Defendant’s Closing Submissions. Crucially, the Judge did not deal with other matters raised by the Plaintiffs which they contended indicated the inherent improbabilities of the Defendant’s case.

30.We have carefully considered the various matters referred to and relied upon by Ms Law which she says show that the Judge did put his mind to the evidence and issues in dispute and render an impartial and independent decision. We accept that they demonstrate that the Judge had read the papers, showed a keen interest in the evidence given by the witnesses, had a clear grasp of the issues, and engaged with counsel on pertinent matters during the course of the trial. Nevertheless, as pointed out by Yuen JA in Wong To Yick, at §§26, “… a judge’s ‘core work-product’ is the judgment. For that, he must bring his own mind to bear on the issues and demonstrate it by expressing, in his own language (however succinctly), how a finding of fact or a conclusion in law is reached. That task cannot possibly be substituted by a judge’s expressions of interest in or engagement with the issues during the hearing.”

31.In all the circumstances, we are satisfied that Ground 8 is made out. Following the approach in Wong To Yick and Lo Kai Shui, we shall consider afresh the issues in the case and determine for ourselves the answers to those issues (if the nature of the issues and the available evidence properly permit us to do so), without the benefit of the Judge’s input.

THE PLAINTIFFS’ CLAIM BASED ON EXPRESS COMMON INTENTION CONSTRUCTIVE TRUST IS UNSUSTAINABLE EVEN ON THE PLAINTIFFS’ OWN EVIDENCE

32.The two situations in which a common intention constructive trust (“express common intention constructive trust” and “inferred common intention constructive trust” respectively) may arise are not in dispute. In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, at §§2.3 and 2.4, Cheung JA summarized the position as follows:

“[2.3] The first situation where common intention constructive trust may arise is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially.

[2.4] The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust…”

33.In respect of express common intention constructive trust, as pointed out by Lord Bridge of Harwich in Lloyds Bank Plc v Rosset [1991] 1 AC 107 (at 132), “[t]he finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.”

34.In the present case, the Plaintiffs rely on both express common intention constructive trust and inferred common intention constructive trust (as well as resulting trust) in support of their claim for the Property, or a beneficial interest in the Property. Insofar as express common intention constructive trust is concerned, the Plaintiffs’ case is based on the Alleged Agreement. However, the Plaintiffs face serious and insurmountable evidential difficulties in establishing such an agreement.

35.Although it is alleged at §3 of the Re-Amended Statement of Claim that the Alleged Agreement was an express agreement made between Kwan and the Deceased on the one part and the Defendant on the other part, and it was stated by Kwan at §10 of his 1^st witness statement dated 16 November 2016 that the Alleged Agreement was reached after a tripartite discussion (三方討論), Kwan’s evidence at the trial was that he was not present and did not personally take part in the discussion between the Deceased and the Defendant concerning the purchase of the Property, he did not know about the details of the conversation between the Deceased and the Defendant, and he himself had no direct discussion with the Defendant about the purchase of the Property. Kwan accepted that his knowledge of the Alleged Agreement was based entirely on what the Deceased had allegedly told him.

36.Further, although it is alleged at §4(d) of the Re-Amended Statement of Claim that Kwan and the Deceased duly made the down payment of HK$30,000 for the purchase of the Property, and this allegation is repeated by Kwan at §11(c) of his 1^st witness statement (本人與楊女士支付大約HK$30,000作為購買該物業的首期，並支付相關的交易費用 (如律師費及印花稅等)), in his oral evidence, Kwan said that he did not in fact know what the amount of the down payment was, whether the cheque for the down payment was drawn by the Deceased or the Defendant, what the amount of the cheque was, where the money for the cheque came from, and how the down payment was made. Kwan’s evidence concerning his contribution to the down payment was also highly unsatisfactory. In the course of his cross-examination, he said for the first time that he had withdrawn a sum of about HK$6,000 to HK$7,000 from his bank account and paid HK$5,000 to the Deceased which was used for making the down payment, notwithstanding the fact that earlier in his evidence, upon clarification by the Judge, he accepted that he himself had not paid anything in relation to the purchase of the Property (即係從你個人嘅戶口一毫子都未曾出過) from beginning to end (由始至終). The alleged payment of HK$5,000 was also never mentioned in the Plaintiffs’ pleadings or in Kwan’s 3 witness statements.

37.Neither of the 2 witnesses called by the Plaintiffs could give any direct evidence on the Alleged Agreement. Cheung said that the Deceased had told her that the Property was the Deceased and Kwan’s property, and it was purchased in the name of the Defendant because they were not qualified to obtain Government financing to purchase the Property while the Defendant was eligible to obtain such financing. Ho also gave evidence that the Deceased had told her the same reason why the Property was purchased in the name of the Defendant, and that she (the Deceased) wished to give the Property to her daughter after she had grown up. It is clear that Cheung and Ho had no personal knowledge of the Alleged Agreement. There is also no evidence that they were ever told by the Deceased about the details of the Alleged Agreement, such as when it was made, what the terms of the Alleged Agreement were, or whether the Alleged Agreement had been carried out in accordance with its terms.

38.On this state of the Plaintiffs’ evidence, it is obvious that the Plaintiffs cannot prove the existence of the Alleged Agreement. It follows that the Plaintiffs’ claim based on express common intention constructive trust is bound to fail. That this is so is recognised by the Plaintiffs themselves, as shown by the fact that at §9 of the Amended Supplementary Notice of Appeal, they contend that had the Judge given proper regard to the inherent probabilities in light of the surrounding circumstances at the time of the acquisition of the Property, he ought to have found, inter alia, that the Plaintiffs have 100% interest in the Property by way of “the second situation of inferred common intention constructive trust” or, alternatively, the Deceased’s estate has a beneficial interest in the Property by way of “resulting trust”. The Plaintiffs’ claim based on the Alleged Agreement has tellingly been omitted. At the hearing of the appeal, Mr Ma also frankly accepted that the Plaintiff’s claim based on express common intention constructive trust was “weak”.

THE 2^ND PLAINTIFF’S CASE ON INFERRED COMMON INTENTION CONSTRUCTIVE TRUST AND/OR RESULTING TRUST CANNOT BE DISPOSED OF IN THIS APPEAL

39.The Plaintiffs’ case on inferred common intention constructive trust is primarily based on the fact that the Deceased had made direct monetary contributions towards the purchase price of the Property. According to a table submitted by the Plaintiffs to the Judge at the trial titled “Summary of Funds Transferred to D’s BOC account” (“the Table”), the Deceased had, during the period from 2003 to 2013, paid sums totalling HK$432,700 into the Defendant’s account and those sums were used to service the monthly mortgage repayments of the Loans. The Defendant does not dispute the fact that the Deceased did make monthly payments into her account for the purpose of meeting the monthly mortgage repayments, her case being that they were paid in pursuance of the Alleged Common Understanding and/or Intention. Pausing here, we note that the Defendant also says that the sums paid by the Deceased to her account did not match exactly the amounts required to service the monthly mortgage repayments (see §3(2B) of the Re-Amended Defence and Counterclaim). However, the differences are not substantial.

40.For the purpose of disposing of the present appeal, it is not necessary to determine the exact total sum that was paid by the Deceased to the Defendant, or how much of that sum went towards repayment of the Loans. Relative to the purchase price of the Property (HK$600,000) or the total amount of the Loans (HK$570,000), the monetary contributions made by the Deceased were, on any view of the matter, substantial. Such monetary contributions by the Deceased would potentially give rise to a claim for a beneficial interest in the Property based on inferred common intention constructive trust and/or resulting trust. The critical issue was why the Deceased made those payments.

41.The Judge made an express finding that the Defendant’s version of the facts was to be believed, and thus there was no resulting trust[5]. Such finding would also provide a sufficient basis to reject the Plaintiffs’ claim based on inferred common intention constructive trust. This finding is, however, challenged by the Plaintiffs, who argue that the Judge failed to address or consider, or sufficiently address or consider, various matters or aspects of the evidence raised by them at the trial which showed that the Defendant’s case was inherently improbable and/or supported the Plaintiffs’ case. Details of the matters relied upon by the Plaintiffs are set out under Grounds 1 to 4 and 6 to 7 of the Amended Supplementary Notice of Appeal. For the present purpose, it is not necessary for us to consider all the detailed points raised in Grounds 1 to 4 and 6 to 7. We shall, however, highlight some of the more significant matters relied upon by the Plaintiffs.

42.In respect of the inherent improbabilities of the Defendant’s case (raised under Ground 2), the Plaintiffs place particular emphasis on the following matters:

(1)  the substantial monetary contributions to the purchase price of the Property made by the Deceased, bearing in mind that the Deceased and Kwan had only limited financial means at the relevant time;

(2)  the nature of the Oral Licence, which the Defendant said was a bare licence revocable on reasonable notice, meaning that the Deceased and her family could be turned out of the Property at any time at the Defendant’s will; and

(3)  the acceptance of substantial obligations by the Deceased and Kwan under the Guarantee without any safeguard for their interests.

43.It seems to us that the above matters cannot be brushed aside as having no substance whatsoever, and ought to have been dealt with by the Judge in the Judgment. When asked by the Court, Ms Law was unable to refer to any part of the Judgment which substantively deal with them.

44.In respect of the WhatsApp messages between the Defendant and Kwan/the daughter (raised under Ground 4), Mr Ma, in his oral submissions, referred the Court specifically to those passing between the Defendant and Kwan on 11 November 2014, which he argued showed that the Defendant was not the beneficial owner of the Property. The relevant parts of the WhatsApp messages are set out below:

“D:	當年2006，家姐聽地產游說，要賣金寶，取錢，等樓價跌，再買
Kwan:	我唔會賣金寶架
	我要住
	再賣，我已經冇能力啦
D:	當時我反對，向她說，妳得一層樓住，不可冒險。
Kwan:	同埋，宜家最緊要係亞呈入大學
	咁宜家咁做，亞呈一定有笔錢留比佢讀書啦
D:	好彩金寶個名係我，家姐才聽我講，無賣咋
Kwan:	就算我第二日黐左線
	都係我要負既責任
	同其他人冇關係
	我唔會賣金寶架
	放心
…
D:	咁可以明年中，整金寶才底。”

45.The Judge dealt with the above WhatsApp messages at §76 of the Judgment:

“(1) This set of messages was adduced by the plaintiffs. There is clear cherry-picking by the plaintiffs - in that the audio message reply of the defendant was not adduced and the plaintiffs’ counsel claimed that his instructions was that the said message is ‘irrelevant’;

(2) The defendant explained in her cross-examination what she meant in those messages. In essence, she was worried that after she sold Kwan the Property, he could and would sell it at HK$3 million odd (prevailing market price) and use up the balance to repay his loans. All in all, I accept there is nothing in these messages which is inconsistent with the fact that the defendant is the beneficial owner of the Property.”

46.Neither of the two reasons given by the Judge seems to us to address the point that, on the face of the WhatsApp messages, the Defendant appeared to have implicitly recognised that the Property belonged to the Deceased, or the Deceased had at least an interest in the Property.

47.In respect of the evidence of Cheung and Ho (raised under Ground 6), the Judge dealt with their evidence at §85 of the Judgment:

“I placed little weight on the evidence of [Cheung] and [Ho]. In short, their evidence is purely hearsay from alleged casual conversations with the Deceased many years ago. As such, little weight if any should be accorded to that evidence.”

48.The Plaintiffs argue that the Judge ought to accord weight to the evidence of Cheung and Ho, which supported the Plaintiffs’ case that they or the Deceased alone were/was the true beneficial owner(s) of the Property, because the 2 witnesses were independent witnesses and there was no suggestion that they had any personal interest or had any motive to exaggerate or fabricate evidence for the Plaintiffs. There is, we consider, some force in this argument, and the Judge ought to have explored the evidence of Cheung and Ho in greater depth.

49.For the purpose of the present appeal, the question is not whether the Judge was entitled to accept the Defendant’s evidence notwithstanding the above matters, but whether, without the benefit of the Judge’s input in the case, we can safely reach our own conclusion that the Defendant’s evidence should be accepted.

50.The approach adopted by the Court in Wong To Yick is applicable in the present case. In that case, the plaintiff (being the successful party at trial) accepted that “the nature of the case is a civil matter with the critical issues almost entirely being factual disputes”, and the Court took the view that the credibility of a particular witness (Mrs Law) was important to the determination of the factual disputes. The Court held that a retrial was unavoidable, because –

“Mrs Law’s credibility cannot be assessed by this court by reading selected extracts of the transcript. As Lewison LJ put it in FAGE UK Ltd v Chobani UK Ltd [6], such an exercise would be like ‘island-hopping in a sea of evidence’. The findings against Mrs Law were primary findings of fact, not findings made only by a process of inference. Such findings should properly be made by a trial judge assessing her evidence independently, not an appellate court…” (§33)

51.In the present case, the credibility of the Defendant is of critical importance to the determination of the issues of common intention constructive trust and resulting trust. The assessment of her credibility is a matter that should be undertaken by a trial judge. We do not consider that it is possible for this Court to determine the credibility of the Defendant simply on the basis of the written materials before the Court (including the transcript of the evidence at the trial). A retrial is, in our view, unavoidable.

52.This having been said, we consider it to be clear that Kwan, in his personal capacity as the 1^st Plaintiff, has no valid claim for the Property based on inferred common intention constructive trust or resulting trust. On his own evidence, he did not make any direct monetary contribution to the purchase price of the Property, whether in respect of the down payment or subsequent monthly mortgage instalments. Save in respect of the few occasions mentioned below, Kwan’s evidence was that all monetary contributions were made by the Deceased. As earlier mentioned, Kwan gave evidence that he had paid HK$5,000 to the Deceased and the same was used as part of the down payment (see §36 above). However, such evidence is extremely tenuous. It is also clear that he had no knowledge of how the alleged sum of HK$5,000 was actually used by the Deceased. The same comments apply to Kwan’s evidence that there were a few occasions when the Deceased told him that she had insufficient money to pay the monthly mortgage instalments and Kwan gave her HK$3,000 to HK$4,000. In our view, Kwan’s evidence is plainly insufficient to make out a case of inferred common intention constructive trust or resulting trust in respect of the Property in his favour.

53.Mr Ma relies on the fact that (i) Kwan was one of the guarantors for the Loans, and (ii) Kwan and the Deceased were not financially independent of each other (meaning, presumably, that he and the Deceased pooled together their separate incomes for household purposes) in support of Kwan’s claim for an interest in the Property. We do not see that these matters can advance Kwan’s personal claim. In respect of (i), the mere fact that Kwan acted as one of the guarantors for the Loans does not show that he made any monetary contribution to the purchase price of the Property. On the evidence, BOC never called upon Kwan and the Deceased to repay any outstanding part of the Loans under the Guarantee. In respect of (ii), there is no evidence that there was any agreement between the Deceased and the Defendant (or between the Deceased and Kwan) that Kwan should be regarded as having contributed to the purchase price of the Property through the Deceased by reason of the fact his income was pooled together with that of the Deceased for household purposes. Although, at least in the domestic context, the court’s consideration, when assessing the common intention of the parties, is not confined to pure direct monetary contributions to the purchase price (see Primecredit, §1.6), Kwan’s conduct relied upon by Mr Ma was readily explicable by his relationship with the Deceased, and is plainly not sufficient to justify an inference of a common intention that he should have a beneficial interest in the Property. In our view, the Judge’s dismissal of Kwan’s claim for an interest in the Property, either by way of common intention constructive trust or resulting trust, was correct.

GROUND 5: BURDEN OF PROOF

54.Under Ground 5, the Plaintiffs complain that the Judge erred in deciding the case on burden of proof, or relying too much on the burden of proof in rejecting the Plaintiffs’ case without properly considering the Plaintiffs’ substantive submissions on the evidence and issues in the case.

55.This ground of appeal can be disposed of shortly. It is based on a misunderstanding or misreading of the Judgment. Although the Judge did allude to the question of burden of proof at §47 of the Judgment, he found against the Plaintiffs not simply on the basis that they had failed to discharge the burden of proof in respect of their claim for the Property. The Judge found against the Plaintiffs’ claim essentially because he considered (i) Kwan’s evidence was incredible and unreliable and little weight should be given to the evidence of Cheung and Ho, and (ii) the Defendant was a credible and reliable witness. The question of burden of proof was not relevant to those findings. In short, Ground 5 is rejected.

CONCLUSION AND DISPOSITION

56.The 1^st Plaintiff’s appeal is dismissed and the 2^nd Plaintiff’s appeal is allowed. The judgment dated 14 January 2022 is set aside save that the 1^st Plaintiff’s claims against the Defendant are dismissed. The 2^nd Plaintiff’s claims against the Defendant (limited to the issues of inferred common intention constructive trust and/or resulting trust and the issue of breach of trust for causing and/or procuring the 2015 Mortgage), and the Defendant’s counterclaim against the Plaintiffs shall be remitted to the Court of First Instance for a retrial (before another judge).

57.In passing, we should mention that although the defence of illegality of the Alleged Agreement was not pursued by the Defendant at the trial before the Judge, Ms Law said that her client would reserve the right to rely on this ground of defence in light of the recent development of the law. We express no view on the merits of this defence, or whether the Defendant should be permitted to revive this ground of defence at the retrial, and shall leave these matters to be determined by the trial judge.

58.In relation to the issue of costs, the 2^nd Plaintiff has succeeded in the appeal, but the 1^st Plaintiff has failed in the appeal. We order that the Plaintiffs shall have 70% of the costs of the appeal, to be taxed if not agreed. The Plaintiffs’ own costs are to be taxed in accordance with the Legal Aid Regulations. The costs of the trial before the Judge shall be in the cause of the re-trial. The above costs order is an order nisi, which shall become absolute unless an application is made to vary the same within 14 days from the date of this judgment.

59.We cannot end this judgment without saying a few words about the Amended Supplementary Notice of Appeal. It is a prolix document consisting of 22 pages of substantive content together with the Table (of 3 pages), and includes citations of authorities, quotations of evidence from witness statements and documents, and references to the oral evidence of the witnesses. It is, effectively, a set of skeleton submissions disguised as a notice of appeal, but without being subject to the limit on the length of skeleton arguments set by §63 of Practice Direction 4.1 (“PD 4.1”). It is contrary to §20 of PD 4.1, which states that “[a] notice of appeal should be a concise document setting out clearly and succinctly the reasons why the Court should interfere with the judgment of the court below”, and defeats the purpose of a proper notice of appeal, which is “to identify and summarise the points, not to argue them fully on paper (if the Court should require such an argument, it will give directions for the lodgement of full written submissions). A skeleton argument should therefore be as succinct as possible” (see §60 of PD 4.1). It pays no regard to the guidance given by the Court of Appeal in Yap Sui Kong v Yip Fong Tim [2018] 4 HKLRD 791 (“A cardinal rule to be borne in mind is that those responsible for drafting a notice of appeal should not prepare the document as if it were to be read as a set of submissions”, at §21), and in China Gold Finance Limited v CIL Holdings Ltd and Others, CACV 11/2015 (27 November 2015) (“We implore counsel (or whoever drafts a notice of appeal) to exercise discipline, proper care and professional judgment in the preparation of a notice of appeal. It should be a concise document setting out clearly and succinctly why the Court of Appeal should intervene with the judgment of the judge … It is an abuse to canvass submissions at length in a notice of appeal. Such a practice proliferates unhelpful arguments and escalates the costs of the process. It also causes wastage in judicial resources which should be more fruitfully utilised for other purposes”, at §27).

60.It is, unfortunately, the experience of this Court that the practice of legal practitioners submitting prolix and unfocused “notices of appeal” has been on the rise notwithstanding PD 4.1 and the repeated guidance on this matter given by the Court. We take this opportunity to make it clear that in future cases of serious breach of §§20 and 60 of PD 4.1, the Court will consider making an adverse costs order against the party in breach, including an adverse costs order against his legal representatives personally, regardless of the outcome of the appeal.

Mr Billy N P Ma, instructed by Kwok Hei Law Office, assigned by Director of Legal Aid, for the 1^st and 2^nd Plaintiffs (Appellants)

Ms Deanna Law, instructed by Alex To & Co Solicitors, for the Defendant (Respondent)