Pang Kit Ping, The Administratrix of the Estate of Chan Yuk Ho, Deceased and Another v. Chan Chin Bong Dominic

HCA 564/2022

[2025] HKCFI 974

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 564 OF 2022

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D E C I S I O N

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Introduction

1.By Inter Parte Summons dated 28 January 2025 (“the Summons”), the Plaintiffs (“Ps”) apply for default judgment against the Defendant (“D”) in default of defence pursuant to O.19, r.7 of the Rules of the High Court (“RHC”).

Background Facts

2.On 13 May 2022, Ps commenced the present action by issuing a Writ of Summons against D[1]. In the Statement of Claim (“SOC”), essentially it is pleaded that:

(1)     The 1^st Plaintiff and the 2^nd Plaintiff are the natural father and mother of D respectively;

(2)     In about February 1995, Ps intended to purchase a unit in Mei Foo Sun Chuen for their residential use;

(3)     As evidenced by a Deed of Trust dated 21 March 1995, in or about February 1995, Ps and D orally reached a common intention (“the Common Intention”) that:

(a)     Ps would provide the whole purchase price, stamp duty, legal fee and utilities management deposit for the property to be purchased;

(b)     To avoid creditors from enforcing debts incurred by the trading and manufacturing business of Ps, the property to be purchased would be registered in D’s sole name;

(c)     D would hold the property to be purchased and any rents and profits and the sale proceeds in case the property is sold on trust for Ps as joint tenants and D agreed to assign the Property at the request of Ps at such time or in such manner as Ps shall direct and will execute and do all such deeds acts and things as may be necessary to perfect the interest of Ps;

(4)     In accordance with the Common Intention, D signed the agreement for sale and purchase of Flat A, 10^th Floor, No.29 Broadway, Mei Foo Sun Chuen, Kowloon (“the Property”) on or about 23 February 1995;

(5)     By the Assignment dated 21 March 1995, the Property was conveyed into the sole name of D in reliance on the Common Intention;

(6)     The Common Intention was reduced into writing under the Deed of Trust dated 21 March 1995;

(7)     In reliance upon the Common Intention, Ps paid or caused to be paid the total purchase price of the Property, the stamp duty and legal fee for the acquisition of the Property and the utilities management deposit;

(8)     Despite repeated requests and demands, D has refused and still failed to assign the Property to Ps; and

(9)     Accordingly, Ps are entitled to claim against D inter alia for a declaration that the Property is held by D on trust for Ps as joint tenants and an order that D shall execute and deliver an assignment and conveyance of the Property.

Service of process and non-appearance of D

3.I am satisfied from the affirmations of service filed on behalf of Ps that the Writ of Summons endorsed with the SOC was served on D by advertisement in the newspapers on 6 November 2023 pursuant to the order for substituted service granted by Master D To dated 21 September 2023.  The Summons was also served on D on 28 January 2025 pursuant to the Order of Master D To dated 20 May 2024.

4.D has not filed or served any Acknowledgement of Service or defence.

5.Furthermore, given that I am satisfied the Summons was properly servedon D, I am of the view that it is expedient to proceed with the hearing of the Summons under O.32, r.5 of RHC notwithstanding the absence of D at today’s hearing.

6.Mr Yuen, counsel, appeared on behalf of Ps at today’s hearing.

Applicable principles

7.The applicable principles for default judgment under O.19, r.7 of RHC are well-settled.  The power to grant judgment under O.19, r.7 is discretionary.  The court is required to scrutinize whether the matters pleaded in the Statement of Claim entitle the plaintiff to the judgment sought.  The court’s decision is made on the basis of pleaded facts, rather than on evidence.  This is because where no defence is filed, the court will assume that the Statement of Claim has been impliedly admitted.  See Hong Kong Civil Procedure 2025, Vol.1, §§19/7/1, 19/7/11 and 19/7/14. 

8.Moreover, the principle that a declaration will not be granted when giving judgment in default of defence is a rule of practice and not of law, and will give way to the paramount duty of the court to do fullest justice to the plaintiff to which he is entitled.  Indeed, where declaratory relief is the only and substantial relief sought by the plaintiff, it may be necessary to make a declaration to do justice to the plaintiff.  However, the declaratory reliefs to be granted should not be in terms wider than what the plaintiffs are entitled to and what is necessary to do justice to them: see ibid, §§19/7/14 and 19/7/20. 

9.As for the principles concerning common intention constructive trusts, these were succinctly summarized by Coleman J in Lam Ka Kui v Choi Yuen Ling [2020] HKCFI 2647 at §§8-12:

“8. Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary: see, for example, Luo Xing Juan Angela v Estate of Hui Shui See Willy, deceased [2009] 12 HKCFAR 1 at §38.

9. Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (1) the common intention, (2) the claimant’s detrimental reliance on their common intention, and (3) the unconscionability of the property owner departing from it.

10. The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership. The focus is on the intention of the parties at the time of acquisition of the asset. Contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.

11. Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties’ conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

12.In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 at §§2.3-2.4, Cheung JA identified two situations where a common intention constructive trust may arise.  The first 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.  The finding of such an agreement or arrangement can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.  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 mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust.”

Analysis

10.Having carefully considered the SOC and the submissions of Mr Yuen, I am satisfied that based on the pleaded facts, the Property is held on trust by D for Ps as joint tenants.

11.D is taken to have impliedly admitted the matters pleaded in the SOC in default of filing any defence.

12.I am satisfied that, in all the circumstances, it is appropriate to exercise my discretion to grant default judgment against D.  Furthermore, I am satisfied that as the declaratory relief is the only and substantial relief sought, there is a genuine need to grant the declaration sought to do fullest justice to Ps.

13.Although, as Mr Yuen informed me at today’s hearing, it appears that there is registered in the Land Register a charging order absolute in favour of DBS Bank (Hong Kong) Limited (“DBS”), given that notice of this hearing has been given to DBS by letter dated 21 February 2025 and DBS has not appeared or made any response to Ps’ application today, I do not consider that this should affect my discretion to grant default judgment and declaratory relief.

Disposition and Orders

14.Accordingly, I shall grant the order sought as amended by me.

Mr Yuen Siu Kei, instructed by W.K. To & Co., for the 1^st and 2^nd Plaintiffs

The Defendant was not represented and did not appear