Lam Kwok Hing (As Administrator of the Estate of Lam Ping Sang, Deceased) v. Lau Ha also known as Lau Ha Lily and Others

HCA 2196/2020

[2025] HKCFI 1354

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2196 OF 2020

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J U D G M E N T

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A.  Introduction

1.This action illustrates the confusion that may arise when an unincorporated association entrusts some nominees or representatives to hold a property for the benefit of its members.

B.  Material Background

B1.  The Parties and the Property

The Property

2.The subject matter in dispute is Flat B, 1/F & Roof, Mei Lun House, 46 & 48 Tai Wai Road, Shatin, the New Territories (the “Property”).

The Defendants

3.Sha Tin Rural Committee (沙田鄉事委員會) (hereinafter “STRC”) is an unincorporated association. It was formed as early as 1945 and is now recognized under the Heung Yee Kuk Ordinance (Cap. 1097). It promotes and represents the interests of indigenous villagers in Shatin.

4.Sha Tin Welfare Association (沙田福德會) (hereinafter “STWA”) is also an unincorporated association. STWA gathered contributions from its members (who were indigenous villagers in Shatin) and paid wreath fees and/or funeral expenses whenever a member passed away. Whilst the date of formation is unknown, STWA had been in existence as of June 1950. It is not in dispute that STWA has been managed and/or operated by STRC, and it has been regarded as a branch or department of STRC.

5.Mr Mok Kam Kwai (hereinafter “Mr Mok”) is the chairman of STRC. He is being sued as the 3^rd and 4^th Defendants in his own capacity and in the capacity as a representative of all other members of STRC and STWA.

6.It is the Defendants’ case that the Registered Owners (defined below) acquired the Property on behalf of STWA’s members, and a trust has arisen in favour of STWA’s members (or alternatively STRC’s members). As such, STRC (which was entrusted by STWA’s members to operate STWA and to manage the Property) was entitled to lease out the Property and receive the rental income arising therefrom.

7.It is not in dispute that STRC had leased the Property to the 1^st Defendant and her company, ie Beautiful Beauty Centre Ltd (the “Beautiful Beauty”)[1] under a series of tenancy agreements. They operated a beauty salon in the Property from 2010 to August 2024.

The Registered Owners

8.The Property was acquired on 9 June 1972 under the names of (i) Mr Yeung Shing (“Mr Yeung”); (ii) Mr Wai Hon Leung (“Mr Wai Senior”); (iii) Mr Yau Lam Fong (“Mr Yau”); and (iv) Mr Lam Ping Sang (“Mr Lam Senior”) (hereinafter collectively the “Registered Owners”). They held the Property under a joint tenancy.

9.The Registered Owners were the village representatives of various villages in Shatin:-

Registered Owners	Villages
Mr Yeung	Hin Tin Village
Mr Wai Senior	Tai Wai Village
Mr Yau	Tung Lo Wan Village
Mr Lam Senior	Pai Tau Village

10.Around the time when the Property was acquired, the Registered Owners also held key positions in STRC and STWA:-

STRC:

Registered Owners	Positions	Period
Mr Wai Senior	Vice Chairman	1972 to 1974
	Chairman	1976 to 1985
Mr Lam Senior	First Vice Chairman	1972-1976

STWA:

Registered Owner	Positions	Period
Mr Yau	Vice Chairman	1972

11.The Registered Owners passed away on various dates from 1975 to 2012:-

Registered Owners	Dates of Death
Mr Yeung	14 October 1975
Mr Yau	2 January 1985
Mr Wai Senior	22 November 2005
Mr Lam Senior	30 January 2012

The Plaintiff

12.Since Mr Lam Senior was the last surviving Registered Owner, the registered title of the Property has been vested in his estate by operation of law.

13.The Plaintiff is one of Mr Lam Senior’s sons. He is the administrator of the estate of Mr Lam Senior.

14.It is the Plaintiff’s case that Mr Lam Senior had become the sole and absolute beneficial owner of the Property after Mr Wai Senior passed away in November 2005.

15.Apart from relying on the registered title vested in Mr Lam Senior’s estate, the Plaintiff also suggested that the Registered Owners authorized STRC to manage and let out the Property. Since the alleged authorization was revoked, the Plaintiff contended that Mr Lam’s estate was entitled to recover possession of the Property. The Plaintiff also contended that the 1^st Defendant was liable to pay mesne profits in respect of her use and occupation of the Property.

B2.  The Circumstances in which the Property was Acquired

16.The Plaintiff asserted that the Registered Owners funded the acquisition of the Property. However, they did not wish to manage the Property themselves. Thus, they authorized STRC to manage and let out the Property and to apply for rental proceeds thereof for the purpose of taking care of the funeral matters of indigenous villagers in Shatin.

17.The Defendants refuted the Plaintiff’s assertions.

18.According to Mr Mok, he was told by Mr Ng Chan Lam (吳燦林), ie the chairman of STRC in 1972, that STWA had accumulated cash in the region exceeding HK$100,000 as of 1970. In the circumstances, it was decided that STWA should purchase the Property for the consideration of HK$86,000, and the motive was to generate sustainable rental income to support STWA’s operation

19.Mr Ng passed away a long time ago. However, what he allegedly said to Mr Mok was consistent with the contents of a letter dated 12 December 1986 (the “Letter dated 12 December 1986”) written by Mr Lau Hon Kit (劉漢傑), who was the chairman of STRC at the time.

20.The Letter dated 12 December 1986 was addressed to the Rating and Valuation Department. In this Letter, Mr Lau informed the Rating and Valuation Department that:-

(1)  STWA was subordinated to STRC.

(2)  STWA owned the Property.

(3)  The funds for acquiring the Property came from the contributions made by STWA’s members.

(4)  STWA was a charitable organization that gathered funds for paying wreath fees and funeral expenses to its members when they passed away.

(5)  The motive of purchasing the Property was to generate rental income, such that STWA would be able to pay the wreath fees and defray the funeral expenses of its members.

21.In the premises, it is the Defendants’ case that the Registered Owners did not make financial contribution towards the purchase price of the Property, and they were merely entrusted to hold the Property for the benefit of the members of STWA and/or STRC. Further, the Defendants also contend that the Plaintiff (who derived title from Mr Lam Senior) is estopped from asserting ownership over the Property.

B3.  Use and Management of the Property

22.There is no suggestion that the Registered Owners had exclusively used or enjoyed the Property. It is not in dispute that the Property was all along used, managed and controlled by STRC and/or STWA.

Rental Income arising from the Property

23.According to the pleaded case of the Defendants:-

(1)  Prior to 1985, STRC was granted a license to use the Property for the benefit of its members and/or the indigenous villagers in Shatin.

(2)  From 1985 onwards, STRC and/or STWA have leased out the Property to various tenants, including the 1^st Defendant and Beautiful Beauty.

24.The Defendants’ case is evidenced by a series of tenancy agreements in respect of the Property. It can be seen that:-

(1)  In the tenancy agreement dated 1 February 1985, the landlord of the Property was STRC.

(2)  In the tenancy agreements covering the period from 1 February 1991 to 29 October 2001, the landlord of the Property was STRC/STWA (沙田鄉事委員會福德會).

(3)  From 30 October 2001 onwards, the landlord of the Property has been STRC.

25.In the circumstances, STRC and/or STWA received and/or pocketed all the rental income arising from the Property throughout the years.

26.According to the pleaded case of the Defendants:-

(1)  From around 1990 to around 2000, the rental income arising from the Property was deposited into a bank account under STWA’s name.

(2)  From around 2000 onwards, the rental income arising from the Property has been deposited into a bank account under STRC’s name.

27.The pleaded case of the Defendants is neither refuted nor seriously challenged. There is not a shred of evidence showing that STRC, STWA and/or its representatives have ever accounted for the rental income to the Registered Owners.

28.In this connection, the internal records of STRC throughout the years further show that the rental arising from the Property was regarded as income belonging to STWA and/or STRC all along.

The Expenses relating to the Property and use of the Rental Income

29.Having received and/or pocketed all the rental income arising from the Property, STRC and/or STWA defrayed all the expenses relating to the Property, including property tax, Government rents and rates as well as the expenses incurred in repairing and maintaining the Property.

30.Whilst the tax paid to the Government was evidenced by the annual tax returns and the tax demand notes, STRC and STWA also kept monthly records showing that the rental income of the Property was used to defray, inter alios, (i) the expenses relating to the Property; and (ii) the wreath fees and/or funeral expenses of STWA’s members.

B4.  The Events in 2019

31.As mentioned, Mr Lam Senior, being the last surviving Registered Owner, passed away in January 2012. On 16 November 2012, the Plaintiff was granted letter of administration in respect of Mr Lam Senior’s estate. For reasons best known to the Plaintiff, the Property was not included in the schedule of assets and liabilities.

32.The Plaintiff did not assert ownership over the Property until December 2019.

33.The material events that happened in 2019 were as follows.

34.As evidenced by the minutes of STRC’s meeting on 18 January 2019, Mr Mok indicated it was not satisfactory that the title of the Property was vested in some village representatives (ie the Registered Owners) who passed away a long time ago, and it was necessary to sort out the matter.

35.Further meetings took place, one of which was the meeting of STRC on 17 May 2019 (the “May 2019 Meeting”). Mr Lam Kwok Yin (藍國賢) (hereinafter “Mr KY Lam”) was the Plaintiff’s elder brother and he served as the chairman of STRC from 1994 to 2003. During the May 2019 Meeting, Mr KY Lam indicated (i) he agreed that the title over the Property be transferred to STRC; and (ii) the parties should engage solicitors to sort out the matter.

36.The conversations during the May 2019 Meeting were recorded. When Mr KY Lam testified, he insinuated that he could be referring to another property during the May 2019 Meeting. In my view, this explanation was utterly unconvincing. When the transcript of the audio recording is read as a whole, there is no question Mr KY Lam referred to the Property in dispute and he agreed that the title thereof be transferred. In this connection, when the Plaintiff testified, he also fairly admitted that Mr KY Lam initially said to him that the Property did not belong to Mr Lam Senior.

37.In the circumstances, the solicitors representing STRC and the estate of Mr Lam Senior extensively liaised with each other in the second half of 2019, and the Plaintiff was invited to execute a vesting deed.

38.However, on 12 December 2019, the Plaintiff filed an additional schedule of assets and liabilities in respect of the estate of Mr Lam Senior. In this document, it was stated that the Property was an asset belonging to Mr Lam Senior.

39.On the same day, the Plaintiff’s former solicitors further issued a letter to STRC’s solicitors. There, it was alleged Mr Lam Senior had become the sole beneficial owner of the Property. In this letter, the Plaintiff further demanded STRC to (i) account for the rental income arising from the Property; and (ii) stop dealing with the affairs of the Property as the authorization in its favour was revoked.

C.  Pertinent Legal Principles

C1.  Assessment of Credibility

40.In Lee Fu Wing v Yan Paul Po Ting [2009] 5 HKLRD 513 at 524, DHCJ Au (as Au JA then was) set out the well-established approach to assessing credibility. In the course of assessing the credibility of a party’s case, the court shall consider the following matters:

(1)  whether the party’s case is inherently plausible or implausible;

(2)  whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;

(3)  where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests, this is relevant to the assessment of his overall credibility; and

(4)  the demeanour of the witnesses.

41.In the context of adjudicating a dispute in relation to an alleged oral agreement or understanding, in Joint and Several Trustees of Yeung Wing Sing v Yeung Wing Sing & Anor [2021] HKCFI 2018 at para 26, Recorder Yvonne Cheng SC (as Cheng J then was) pointed out that:

(1)  contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility;

(2)  in deciding whether to accept a witness’s account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events;

(3)  care should be taken in regard to the consistency of the witness’s evidence with undisputed or indisputable evidence, and the internal consistency of the witness's evidence;

(4)  care should be taken in drawing conclusions about truthfulness and reliability solely or mainly from the appearance of a witness or from the assessment of a witness’s character; and

(5)  witnesses’ credibility should be tested by reference to the objective facts proved independently of their testimony, and regard should be had to their motives and to the overall probabilities.

C2.  Common Intention Constructive Trust

42.The following legal principles on common intention constructive trust are well-established:-

(1)  The task of the court is to ascertain the parties’ intention, and this is to be done objectively: Mo Ying v. Brillex Development Ltd [2015] 2 HKLRD 985 at para 5.16 (per Cheung JA); Liu Wai Keung (supra) at para 47 (per G Lam J, as he then was); Leung Hang Lin & Anor v. Lam Mei Yung [2019] HKCFI 2819 at para 8(3) (per DHCJ Alexander Stock SC).

(2)  The court would adopt a holistic approach, and take into account the whole course of conduct of the parties. The court will also take into account that the domestic context is very different from the commercial context: Stack v. Dowden [2007] 2 AC 432 at paras 60 and 69 (per Baroness Hale); Mo Ying (supra) at para 5.13-5.14 (per Cheung JA); Primecredit Ltd v. Yeung Chun Pang Barry [2017] 4 HKLRD 327 at para 1.6 (per Lam VP, as he then was).

(3)  The starting point is that beneficial ownership follows legal ownership, and the onus is vested upon the party who seeks to show that the beneficial ownership is different from the legal or registered ownership: Stack v Dowden (supra) at para 56 (per Baroness Hale); Mo Ying (supra) at para 5.16 (per Cheung JA); Leung Hang Lin (supra) at para 8(1) (per DHCJ Alexander Stock SC).

(4)  The onus can be discharged by showing that: (i) there was a common intention that the beneficial ownership was to be different from the legal ownership; (ii) the plaintiff altered his or her position in detrimental reliance upon the common intention; and (iii) it is unconscionable for the property owner to assert ownership in reliance on the legal title: Luo Xing Juan v. Estate of Hui Shui See (2009) 12 HKCFAR 1 at para 38 (per Ribeiro PJ); Liu Wai Keung (supra) at para 46 (per G Lam J as he then was); Leung Hang Lin (supra) §8(2) (per DHCJ Alexander Stock SC).

(5)  The court may find the parties’ common intention based on the parties’ express discussion as to how the property is to be held: Leung Hang Lin (supra) at para 8(4) (per DHCJ Alexander Stock SC); Mo Ying (supra) at para 5.8 (per Cheung JA).

(6)  The court can also rely on the parties’ conduct to infer the common intention, and direct financial contributions will readily justify an inference that the parties’ common intention is such that the plaintiff is to have an interest in the property: Mo Ying (supra) at para 5.8 (per Cheung JA); Primecredit Ltd (supra) §2.4 (per Lam VP, as he then was); Leung Hang Lin (supra) at para 8(4) (per DHCJ Alexander Stock SC).

C4.  Proprietary Estoppel

43.In Cheung Lai Mui (the executrix of the estate of Cheung Ping Kau and the administratrix of the estate of Cheung Ping Fuk) v Cheung Wai Shing & Ors (2021) 24 HKCFAR 116 at paras 23-27, Ribeiro PJ and Gummow NPJ stated:-

“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 at 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 [2010] EWHC 3117 (Ch) at [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 [2002] EWCA Civ 159 at [50], Lady Arden (then Arden LJ) in Suggitt v Sugitt [2012] EWCA Civ 1140 at [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.”

44.The legal principles are succinctly summarized by DHCJ Sara Tong SC in Patrick Cowley and Wong Wing Sze Tiffany (joint and several trustees in bankruptcy of the property of Lau Yu) v Lau Sze & Ors [2024] HKCFI 1662 at paras 24-25[157] as follows:-

(1)  The doctrine of proprietary estoppel has generally 3 elements, namely (i) a representation or assurance made to the claimant; (ii) reliance by the claimant; and (iii) detriment to the claimant in consequence of such reliance.

(2)  The 3 elements are interrelated and underpinned by the notion of unconscionability. Even if the 3 elements are satisfied, the claim may still be refused if the Court takes the view that its conscience is not shocked.

C4.  Estoppel by Convention

45.In First Laser Ltd v Fujian Enterprises (Holdings) Co Ltd & Anor (2012) 15 HKCFAR 569 at para 79, Lord Collins NPJ, referring to Unruh v Seeberger (2007) 10 HKCFAR 31 at paras 133-138, 142 and 150 (per Ribeiro PJ), stated:-

“In Unruh v Seeberger (2007) 10 HKCFAR 31 Mr Justice Ribeiro PJ re-stated the essential elements of an estoppel by convention:

(1) the parties entered into some transaction or legal relationship on the basis of an assumption that was shared by or common to them both, and it was the element of commonality of the assumption that marked out estoppel by convention as a distinct form of estoppel [133];

(2) it must be shown that assumption was communicated between the parties and acted upon, and there must be some mutually manifest conduct by the parties [135];

(3) there was no necessity for the parties to believe that the assumed state of affairs was true, nor was there any necessity for the parties to have been mistaken [136];

(4) what is important is for them to act in the belief, manifested by words or conduct, that they are both proceeding with the transaction on the basis of the same shared assumption [137];

(5) the contents of the common assumption must be sufficiently certain to enable the court to give effect to it [138];

(6) estoppel by convention is concerned with a common assumption relied upon as a basis upon which the persons sharing such assumptions enter into a transaction or legal relationship [142]; and

(7) there must be an attempt by one party to depart from the common assumption which departure would be unjust because of the part taken by him in occasioning its adoption by the other party, and the other party would suffer detriment arising out of his having entered into the relevant transaction on the basis of the common assumption if the opposite party were afterwards allowed to set up rights inconsistent with the assumption [150].”

D.  Common Intention Constructive Trust

D1.  Overview

46.In their defence and counterclaim[2], the Defendants emphasized that the Property was held on trust for the members of STWA (or alternatively STRC). The question is: what kind of trust? In my view, the correct legal analysis is common intention constructive trust (the material facts of which were adequately pleaded[3]).

47.Having considered the inherent probabilities, the apparent logic of events, the contemporaneous documents, the parties’ objective conduct, the parties’ evidence as well as counsel’s submissions, I am of the view that the Defendants have an overwhelming case based on common intention constructive trust.

D2.  The Common Intention or Understanding

48.For the reasons elaborated in this sub-section:-

(1)  I accept the Defendants’ case that the Registered Owners were merely nominees or representatives who were entrusted by the members of STWA to acquire the Property on their behalf.

(2)  I reject the Plaintiff’s suggestion that the Registered Owners intended to retain beneficial ownership over the Property and that they made financial contributions towards the acquisition of the Property.

(3)  I find that the common intention or understanding amongst the Registered Owners, STRC and the members of STWA was such that the interests in the Property belonged to STWA’s general body of members collectively, and the Registered Owners were merely nominees or representatives who were entrusted to hold the title of the Property for the benefit of the members of STWA. The members of STWA have entrusted STRC to handle and manage the affairs of the Property. However, since they have a collective interest in the Property, they are entitled to remove STRC and take charge of the affairs of the Property if they take the view that this is the appropriate course to take.

49.First of all, although the Plaintiff did not carry the burden of proof, the Plaintiff’s assertions are completely hollow and speculative:-

(1)  Whilst the Plaintiff suggested that Mr Lam Senior was a charitable person, he was unable to adduce a shred of evidence to substantiate his assertions that (i) the Registered Owners paid the purchase price for acquiring the Property; (ii) the Registered Owners intended to retain the beneficial ownership over the Property; and (iii) the Registered Owners authorized STRC to manage the Property.

(2)  Had the Plaintiff genuinely believed that his assertions were true, he would not have left out the Property from the schedule of assets and liabilities in respect of Mr Lam Senior’s estate back in 2012. When the Plaintiff testified, he fairly conceded that he did not find out the existence of the Property until 2019.

(3)  Neither the Plaintiff nor Mr KY Lam said that Mr Lam Senior informed them that he treated the Property as his personal asset. In this connection, the Plaintiff even admitted that Mr Lam Senior added him as a co-owner of his ancestral house before he passed away. In stark contrast, Mr Lam Senior did not even bother to inform the Plaintiff about the existence of the Property.

(4)  Had Mr Lam Senior treated the Property as his personal asset, he would have informed his family members about the Property, and he would have added the Plaintiff (or other family members) as co-owner(s). This did not happen.

(5)  In my view, the Plaintiff’s assertions in these proceedings were merely an afterthought, and the same were wholly speculative.

50.Second, the Plaintiff’s case is also contradicted by the evidence from the children of other Registered Owners:-

(1)  Mr Wai Chi Shing (韋志成) is the son of Mr Wai Senior. When he testified at trial, he informed the court that Mr Wai Senior never mentioned his ownership of the Property, and thus he did not even know about the existence of the Property.

(2)  Likewise, Madame Yau Yuet Ming (邱月明), who is the daughter of Mr Yau, also informed the court that whilst Mr Yau arranged his family members to deal with the affairs of various properties, he never mentioned the Property. Madame Lau stressed that she had a close relationship with Mr Yau and they lived together. Nonetheless, Madame Yau knew nothing about the existence of Property until this action came into existence[4]. Bearing in mind that other Registered Owners were also senior members of STRC, Madame Yau had every reason to believe that his late father was not a real owner of the Property, but a nominee.

(3)  Mr Wai Chi Shing and Madame Yau have no interest in the outcome of these proceedings. It appears to me that they were honest and forthcoming witnesses, and their evidence makes perfect sense to me. I accept their evidence, which showed that the Registered Owners did not regard themselves as true owners of the Property. Had Mr Wai Senior and Mr Yau treated themselves as true owners of the Property, the existence of the Property could not have escaped the attention of their family members.

51.Third, whilst the Plaintiff’s case is completely hollow, the Letter dated 12 December 1986 is a piece of compelling contemporaneous evidence that supports and corroborates the Defendants’ case and assertions:-

(1)  The Letter dated 12 December 1986 came into existence more than three decades before the dispute that led to the present action emerged. I have no reason to doubt the authenticity of this document and the correctness of its contents.

(2)  As mentioned, in this Letter, the then chairman of STRC, ie Mr Lau Hon Kit (劉漢傑), unequivocally informed the Department of Rating and Valuation that the Property belonged to STWA.

(3)  Had the Registered Owners owned the Property, Mr Lau would have simply informed the Department of Rating and Valuation that this was the case. There was no reason why Mr Lau would have taken the trouble to write a lengthy letter and inform the Department of Rating and Valuation about (i) the fact that the funds for acquiring Property came from the contributions made by STWA’s members (ii) the fact that STWA owned the Property; and (iii) the details of the arrangement.

52.Fourth, the Defendants’ case is also corroborated by the annual tax returns in respect of the Property throughout the years, which are also compelling contemporaneous evidence:-

(1)  The annual tax returns unequivocally and persistently identified STWA as the owner of the Property.

(2)  Mr KY Lam, who was a son of Mr Lam Senior and the then chairman of STRC, was the person who signed the annual tax returns on behalf of STRC/STWA from 1995 to 2000. In these tax returns, it was unequivocally stated that the owner of the Property was STWA (沙田鄉事委員會福德會)[5], and Mr KY Lam declared that the information provided to the Inland Revenue Department was correct.

(3)  Mr KY Lam said that he had participated in the affairs of STRC since he was 21 years old. In my view, Mr KY Lam knew and accepted that the Property belonged to the members of STWA, not the Registered Owners. This was the reason why he repeatedly signed annual tax returns, which stated that the owner of the Property was STWA (沙田鄉事委員會福德會).

53.Fifth, it appears to me that the form of ownership is telling:-

(1)  The Registered Owners merely held positions together in STRC and/or STWA on a voluntary basis in the early 1970s. They were not close relatives. They did not even come from the same village.

(2)  Had the Registered Owners contributed to the purchase price of the Property and intended to retain ownership, they would not have held the Property under joint tenancy. There was no reason why the last surviving Registered Owner (who turned out to be Mr Lam Senior) should acquire the entirety of the interest in the Property to the exclusion of the estate of other Registered Owners.

(3)  In my view, the purpose of the arrangement was to ensure that the beneficiaries of the Registered Owners’ estates would not be in a position to intermeddle with the affairs of the Property. This was the reason why the parties did not hold the Property by way of tenancy in common.

(4)  The arrangement would have been workable on a continuous basis had the Registered Owners added younger members of STRC and/or STWA (who were trustworthy) to the joint tenancy. Unfortunately, the Registered Owners did not do so before their demise. This caused the confusion that gave rise to the present proceedings.

54.Sixth, there is not a shred of evidence showing that the Registered Owners regarded themselves as the real owners of the Property. As pointed out, there is no evidence showing that they enjoyed the rental income over the Property; nor is there any evidence showing that they had ever requested STRC and/or STWA to account for the rental income arising from the Property and/or to provide information in relation thereto.

55.Seventh, in contrast, there is overwhelming evidence showing that the members of STWA were regarded as the real owners of the Property, and this was why STRC (which managed and operated STWA’s affairs) solely and exclusively handled the matters relating to the Property. In this regard, the Defendants’ case is supported by objective and incontrovertible evidence:-

(1)  The Property has been rented out for rental income. In all the tenancy agreements, STRC (which managed and operated STWA) and STWA were named as the landlord(s) of the Property, and in certain years the chop of STWA was affixed to the tenancy agreements. This supports the Defendants’ contention that the members of STWA were treated as the true owners of the Property. In contrast, the names of the Registered Owners could not be seen anywhere in the tenancy agreements, and they were not identified as the principals at all. This supports the conclusion that the tenancy agreements had nothing to do with the Registered Owners.

(2)  In the tax demand notes issued by the Inland Revenue Department, it was stated that the owner of the Property was STRC. This showed that even the Government regarded STRC (which managed and operated STWA) as the de facto owner of the Property, and this was why the Government liaised with STRC, as opposed to the Registered Owners (who merely held a bare title).

(3)  Further, as evidenced by the internal records (or running accounts) of STRC throughout the years, the rental arising from the Property was treated as income belonging to STRC and/or STWA (which was managed and operated by STRC). There is not a shred of evidence showing that STRC and/or STWA were liable to (i) account for the rental income to the Registered Owners; and/or (ii) provide information to them. There is simply no evidence showing that the Registered Owners had anything to do with the rental income.

56.Eighth, Mr Tasman Tam (for the Plaintiff) pointed out that prior to 1985, STRC was licensed to use and occupy the Property and the same was not rented out to outsiders. I cannot see how this fact might avail the Plaintiff’s case at all:-

(1)  The Defendants did not plead that the Registered Owners were the persons who granted the license to STRC. There is not a shred of evidence showing that the Registered Owners were the ones who granted the license. Indeed, there is no evidence showing that the Registered Owners had ever exercised control over the Property at all.

(2)  In any event, it was Mr Mok’s evidence that prior to 1985, Mr Lau Hon Kit (劉漢傑) rented the Property from STRC or STWA at the monthly rental of HK$2,000, and he allowed the Property to be used by indigenous villagers in Shatin as a clubhouse for recreational purposes (such as playing Mahjong and snooker). Whilst Mr Mok personally attended the Property for recreational purposes, he also witnessed Mr Lau paying the monthly rental.

(3)  In my view, Mr Mok was a candid witness. Whilst he endeavoured to provide information to the court, he was willing to make concessions. I accept his evidence[6].

57.Ninth, Mr Tam pointed out that certain important individuals, such as Mr Ng Chan Lam (吳燦林) who was the STRC’s chairman in 1972, were not added as joint owners of the Property. In my view, this is inconclusive. There could be various personal reasons why an individual did not wish to accept appointment as trustee or nominee. I do not accept Mr Tam’s submissions that the common intention constructive trust in question did not exist simply because certain individuals did not wish to act as trustees or nominees.

58.Tenth, Mr Tam also questioned why the Registered Owners were chosen to hold the legal title of the Property. The Registered Owners passed away a long time ago and thus could not testify in court. However, the answer to Mr Tam’s query was obvious. The Registered Owners held senior positions in STRC and STWA, and they were involved in the affairs of STRC and/or STWA. This was the reason why they were chosen as the representatives or nominees. In my view, this could not be a sheer coincidence, and it was apparent that the Registered Owners were not some random individuals who were chosen out of the blue.

59.Eleventh, Mr Tsaman Tam pointed out that under STWA’s constitution, the funds of STWA might only be used for acquiring a landed property if the members approved the proposal at a members’ meeting. In this connection:-

(1)  Due to the lapse of time, it is not certain as to whether the proposal for acquiring the Property was in fact approved at a members’ meeting. The Plaintiff (who took issue) was not in a position to make plea as to the true position.

(2)  In any event, it is incontrovertible that the members of STWA have been enjoying the rental income arising from the Property, which has been used to support the operation of STWA. The reality was such that the members of STWA contentedly treated the Property as an asset that belonged to themselves and/or STWA, and STWA enjoyed the benefit.

(3)  Unsurprisingly, there is not a shred of evidence showing that any member of STWA had ever complained that the Property should not be acquired or should not have been acquired.

(4)  I cannot see how the Plaintiff may rely on STWA’s internal regulation to nullify the existence of the common intention. The members of STWA and the Registered Owners might have disregarded, waived or overlooked STWA’s internal regulations. It was not the case that the common intention in question did not exist.

(5)  In my view, the court should focus on the parties’ objective conduct. Based on the whole course of the parties’ objective conduct, there is no question that the common intention asserted by the Defendants existed, and the members of STWA were in fact treated as the real owners of the Property.

60.Twelfth, Mr Tam pointed out that the title deeds of the Property were lost. In my view, this point is neither here nor there. Whilst there is no evidence showing that the Registered Owners had ever possessed the title deeds of the Property, there is nothing unusual about the fact that STRC (which managed the affairs of the Property and the affairs of STWA) lost the title deeds due to the passage of time. In this connection, it is not in dispute that throughout the decades, the management of STRC changed hands numerous times.

61.Thirteenth, Mr Tam criticized Mr Mok for saying that the Property was held by way of wills (以平安紙形式代持) at the meeting on 3 June 2019. I cannot see how this criticism sheds light on the substantive issues in dispute. In any event, what Mr Mok meant was that under the arrangement of the joint tenancy, the title of the Property would be passed to the survivors. In this sense, the effect of the arrangement was akin to the effect of a will. Although Mr Mok’s statement at the meeting on 3 June 2019 was inaccurate, I am not of the view that it was, in substance, materially contradictory to the Defendants’ case.

62.Fourteenth, Mr Tam queried whether STWA was capable of purchasing the Property. In my view, the query was speculative. As evidenced by the Lists of Members (defined below), STWA had more than 2280 members as of 1971[7]. Furthermore, Mr Wong Cheung Tung (王祥棟), who grew up in one of the rural villages in Shatin and whose grandmother was a member of STWA, informed the court that many affluent and influential people in Sha Tin made substantial donations in favour of STWA from time to time. Despite his old age, Mr Wong was able to provide the details of the relevant events and explain the bases of his personal knowledge. I am of the view that Mr Wong was a truthful witness, and I accept his evidence. I am of the view that the version of events set out in the Letter dated 12 December 1986 (which was consistent with Mr Wong’s evidence) was correct.

63.Fifteenth, Mr Tam submitted that STRC and/or STWA did not take steps to recover the Property throughout the years, and thus their members did not regard themselves as the true owners of the Property. This argument has no merits at all. STRC and/or STWA had been using the Property and/or enjoying the rental income thereof throughout the years. The preexisting arrangement was workable until December 2019 when the Plaintiff unilaterally asserted absolute ownership over the Property. In fact, the Plaintiff was the one who commenced the present action. Initially, he did not even join the members of STRC and/or STWA as parties to these proceedings.

64.Sixteenth, lastly, Mr Tam submitted that the parties could not have intended that the members of STWA should have an interest in the Property. Otherwise, the members could have unilaterally claimed his or her share by seeking an order of partition or sale. I disagree with Mr Tam’s submissions, which are based on incorrect assumptions:-

(1)  As pointed out in paragraph 48(3) above, I am of the view the common intention was such that the general body of members had an interest in the Property collectively. Although a member of STWA (whose position is akin to a co-tenant under a joint tenancy) has a say in regard to the affairs of the Property, he does not have a divisible individual interest. A member only has a say if and only if he remains a member of STWA. If the majority of members of STWA were discontented with STRC’s management of the Property, it would be open to them to remove STRC and take charge of the affairs of the Property themselves. However, as soon as a member passes away, he is no longer a member of STWA. It follows that he ceases to enjoy the collective interest at all and he no longer has any say in regard to the affairs of the Property.

(2)  In the premises, it is incorrect for Mr Tam to assume that an individual owner has a divisible individual interest. This is not the common intention or understanding.

(3)  In any event, the scenario suggested by Mr Tam is a remote theoretical possibility. I do not believe that the parties had thought about this theoretical possibility at all, and there is no evidence showing that the parties had considered the same.

(4)  More fundamentally, even in the scenario suggested by Mr Tam, the court will take into account (i) the wish of other co-owners; (ii) the common intention or understanding amongst the parties; (iii) the use of the Property; and (iv) the question of whether the use of the Property benefits the general body of members.

(5)  Thus, it is incorrect for Mr Tam to assume that a member of STWA is entitled to seek an order of partition or sale. There is no such entitlement, and this is just a remote theoretical possibility.

D3.  Detrimental Reliance

65.Relying on First National Trustco (UK) Ltd v Page [2019] EWHC 1187 at paras 246 to 250 (per Deputy High Court Judge Joanna Smith QC) and Tracey Ann De Bruyne v John Adrian De Bruyne & Ors [2010] EWCA Civ 519 at para 51), Mr Nicholas Oh (for the Defendants) submitted that where a common intention constructive trust falls outside of the domestic context, it is unnecessary to show detrimental reliance.

66.In First National Trustco (UK) Ltd (supra) at paras 247 to 250, Deputy High Court Judge Joanna Smith QC stated:-

“247. However, I accept the Claimants’ submissions that cases involving co-habiting partners are not the only cases of constructive trust, which is not a closed category: “English law provides no clear and all-embracing definition of a constructive trust. Its boundaries have been left perhaps deliberately vague so as not to restrict the court in technicalities in deciding what the justice of a particular case might demand” (Carl Zeiss Stiftung v Herbert Smith & Co (No2) [1969] 2 Ch 276 (per Edmund Davies LJ at 300G)

248. The Court of Appeal has recently considered the approach to be taken to cases falling outside the “co-habiting” cases in Tracey Ann De Bruyne v John Adrian De Bruyne & Ors [2010] EWCA Civ 519. The Court of Appeal identified the circumstances in which a common intention constructive trust will arise at [49]…

249. The Court of Appeal then went on to make clear the distinction between the principles designed to resolve issues of beneficial ownership between adult co-habitees and other cases in which equity will hold the transferee of property to the terms upon which it was acquired by imposing a constructive trust to that effect. Contrary to the Defendants’ submissions (which asserted a requirement for detrimental reliance that, I agree, is an essential feature in cases involving co-habitees- see Lewison LJ in Curran v Collins [2015] EWCA Civ 404 at [77]), the Court of Appeal said that these other cases “do not depend on some form of detrimental reliance in order to re-balance the equities between the competing claimants for the property. They concentrate instead on the circumstances in which the transferee came to acquire the property in order to provide the justification for the imposition of a trust…” (De Bruyne at [51]).

250. Unconscionability, however, remains important: “It is not necessary in such cases to show that the property was acquired by actual fraud…The concept of fraud in equity is much wider and can extend to unconscionable or inequitable conduct in the form of a denial or refusal to carry out the agreement to hold the property for the benefit of the third party which was the only basis upon which the property was transferred….(De Bruyne at [51])…” (emphasis added)

67.In my view, usually there would be detrimental reliance in the non-domestic context. In a typical scenario, the parties would not have entered into the transaction in question at all but for the common intention or consensus in question. In other words, the fact that a party entered into the transaction in question or agreed that the property be registered in the name of the other party could ipso facto constitute detrimental reliance. Against this background, the English courts appeared to take the view that it would not be necessary for the claimant to show that it suffered “additional” detriment as a result of relying on the common intention or consensus.

68.In any event, on the facts of the present case, I have no difficulty in finding that there was detrimental reliance on the part of the members of STWA.

69.First of all, but for the aforesaid common intention or understanding, STRC (which was entrusted by the members of STWA to manage the affairs of STWA) and/or STWA would not have agreed that the Registered Owners be entrusted to hold the registered title of the Property. STRC and/or STWA would have located alternative candidates and the present dispute (which was ascribed to the stance taken by the Plaintiff) would not have arisen.

70.On this point, it is pertinent to refer to R v Moore [2021] 4 WLR 121 at para 81, Andrews LJ held that:-

“The issue at the heart of this appeal can be identified as follows: if A gives B money for the express purpose of using it only to purchase an identified property as an investment, A and B agree that A will have an interest in the property pro rata to his financial contribution, and money is then used to buy the property, does A have a beneficial interest in the property? The answer is yes. It would be surprising if it were otherwise. A has acted to his detriment in consenting to the use of his money to fund the purchase, in reliance on the express promise of an interest in the property.” (emphasis added)

71.Andrews LJ’s dictum is applicable to the present case. In my view, STWA had suffered detriment by consenting to the arrangement that the Property (which was purchased with its funds) be registered under the Registered Owners’ names when it was clearly understood that they were merely nominees or representatives of STWA’s members.

72.Second, throughout the years, STRC conducted the affairs of STWA on the basis that the Property would generate steady income. Had the Property been regarded as an asset that did not belong to the members of STWA, STRC would have conducted the affairs of STWA in a different manner. The financial planning would have been entirely different, and this would have affected the interests and positions of STWA’s members.

73.Third, throughout the years, the members participated in the affairs of STWA on the basis that the Property would generate steady income for the benefit of all members. Had the Property been regarded as an asset that did not belong to the members of STWA, the members would have come to a different view as to how the affairs of STWA should be managed and some of them might not have continuously participated in the affairs of STWA by making contributions.

74.Fourth, as mentioned, there is ample documentary evidence showing that STRC (which was entrusted by the members of STWA to manage and operate STWA) singlehandedly defrayed all the expenses relating to the Property, such as property tax, Government rents and rates as well as expenses incurred in repairing the Property. But for the common intention or understanding, the executive members and staff of STRC (who were authorized to manage and operate STWA) would not have devoted time and effort to manage and deal with the affairs of the Property throughout the years.

75.In the premises, the positions of the members of STWA had changed. STRC (which was entrusted to manage and operate STWA) and the members of STWA had acted in detrimental reliance on the common intention or understanding.

D4.  Unconscionability

76.Since Mr Lam Senior was privy to the aforesaid common intention or understanding, it would be unconscionable for the Plaintiff to cause the estate of Mr Lam Senior to renege from the common intention or understanding.

77.I cannot see how the Plaintiff could honestly and conscionably treat his late father’s estate as the sole beneficial owner of the Property when the same has been absolutely used, enjoyed and managed by STRC and/or STWA for decades.

78.In the premises, the requirement of unconscionability is also satisfied.

79.For all the above reasons, I find that the Property has been held on a common intention constructive trust in favour of the members of STWA, and the Registered Owners (as well as the Plaintiff who derives title from Mr Lam Senior) were merely constructive trustees.

D5.  Issue relating to Membership

80.The Defendants have produced two lists dated 1971 (the “Lists of Members”)[8] that set out the members of STWA. These documents set out the following personal information of the members: (i) their names; (ii) their ages as of 1971; (iii) their gender; (iv) their membership numbers; and (v) the numbers of their Hong Kong Identity Cards.

81.In light of the overwhelming evidence set out hereinabove, I find that the members of STWA were privy to the common intention or understanding set out in Section D2 above, and they were contented that the affairs of STWA be managed and conducted by STRC on the basis that the Property belonged to STWA and/or its members.

82.As the Lists of Members set out the ages of the members as of 1971, I am of the view that the Lists of Members show STWA’s membership as of 1971[9]. There has been no further list of members that came into existence after 1971. In this connection, when Mr Mok testified, he was unable to identify any documentary evidence showing that some new members joined STWA after 1971.

83.However, Mr Tasman Tam (who had diligently examined the Lists of Members) pointed out the Lists of Members show that a male member named “廖文連” inherited the membership of his late mother (namely “謝成娣”) who passed away in February 1972, and he was a new member who joined STWA after 1971[10].

84.Based on the available evidence, it appears that Mr Liu (廖文連) was the only member who joined STWA after 1972.

85.In my view, even if some members joined STWA after 1971 or 1972, they must be (i) privy to the aforesaid common intention or understanding; and (ii) contented that the affairs of STWA be conducted on the basis that the Property belonged to STWA and/or its members.

86.It is plain that the Property and the rental income arising therefrom have generated considerable benefit to STWA. As such, it would be most surprising if a new member would object to the existing arrangement. In my view, the new members must have willingly participated in the affairs of STWA on the basis that the Property belonged to STWA and/or its members. There is simply no evidence that any member of STWA had objected to the existing arrangement.

87.In the premises, I am satisfied that the common intention or understanding had existed continuously, and the new member(s) were privy thereto. For the same reasons set out in Sections D3 and D4 above, I am also satisfied there has been detrimental reliance on the part of the new member(s) and that it would be unconscionable for the Plaintiff (who derived title from Mr Lam Senior) to renege from the common intention or understanding. Accordingly, the new member(s) are also entitled to benefit from the common intention constructive trust.

D6.  Rule against Perpetuity?

88.Mr Tasman Tam (for the Plaintiff) contended that the common intention constructive trust falls foul of the rule against perpetuity.

89.I do not accept Mr Tam’s submissions.

90.Mr Tam’s submissions were based on an assumption that the Property might only be used for the specific purpose of generating rental income to defray the wreath fees and funeral expenses of STWA’s members. However, the evidence does not show that the parties confined themselves to this narrow purpose. This was not the common intention.

91.On the evidence before the court, I find that the Property was acquired for the general benefit of STWA (which was, in reality, part of STRC) with the long-term financial viability of the association in mind, and there was no common intention or understanding that the Property might only be utilized for defraying wreath fees and/or funeral expenses.

92.Throughout the years, the members of STWA fully entrusted STRC to manage STWA’s affairs and to decide how the Property should be utilized. It appeared that as of the 1990s, there were still a considerable amount of claims for wreath fees and/or funeral expenses. In the circumstances, STRC decided that rental income arising from the Property should only be used to support STWA’s operation. However, from the 2000s onwards, the amount of claims for wreath fees and/or funeral expenses had reduced significantly. For instance, in January 2004, whilst the Property generated a monthly rental income of HK$9,000, there were only claims for wreath fees and/or funeral expenses in the total amount of HK$1,500[11]. The surplus in that month was HK$7,500. Against this background, from the 2000s onwards, STRC has decided to utilize the rental income arising from the Property to support the operation of STRC (to which STWA was subordinate).

93.Since STWA is in reality a sub-branch of STRC, the aforesaid practice is understandable. If STRC fails to sustain its operation, there would be no one managing STWA, and there is a real risk that STWA would cease operation[12].

94.According to Mr Mok, the practice of utilizing the rental income of the Property to support STRC’s operation has been carried out openly and known to everyone who was involved in STRC. All along, there have been no complaints and/or objections from the members of STWA.

95.I accept Mr Mok’s evidence, which was not seriously challenged. Indeed, the practice in question was well documented.

96.In my view, the matter could not have escaped the attention of the indigenous community in Shatin[13]. Had the common intention or understanding been such that the Property might only be rented out for generating income to pay wreath fees and/or funeral expenses, some members of STWA would have raised complaints and/or objections. This never happened.

97.In the premises, Mr Tam’s assumption is incorrect. I find that the rules against perpetuity are not engaged on the facts of the present case.

98.Moreover, Mr Nicholas Oh (for the Defendants) referred me to Warburton’s Unincorporated Association (2^nd Ed, 1992) at p.45. As pointed out by the learned author:-

“Over the years there has been some confusion as to which of the rules against perpetuities applies to unincorporated associations. It is now clear from the cases that the courts are concerned with the rule against inalienability and not that against remoteness of vesting. It is important, therefore, to ensure that the members of the association are free to dispose of the whole of the property, both income and capital.” (emphasis added)

99.On the facts of the present case, I am of the view that the rule against inalienability (ie the relevant rule in the present context) would not be offended at all. This is another reason for rejecting Mr Tam’s contention.

100.It would be open to STRC (which was entrusted to manage the affairs of STWA as well as the affairs of the Property) to dispose of the Property as well as its rental income. Insofar as may be necessary, the members of STWA may even take charge of the affairs of the Property and make decisions as to how the Property (as well as the rental income) should be disposed of. There is no suggestion that STRC and/or the members of STWA are not in a position to decide how the assets belonging to STWA should be disposed of. In this connection, the constitution of STWA does not contain any provision that expressly prohibits its members from making decisions on disposing of the association’s assets. Even if such a provision exists, there is no reason why the members of STWA may not amend or alter the constitution.

101.However, Mr Tam emphasized that under the constitution of STWA, the funds of the association should be used for the purpose of paying wreath fees and funeral expenses when a member passes away. He submitted that this was an impermissible purpose.

102.For the reasons set out in paragraphs 99 to 100 above, I do not accept Mr Tam’s submissions.

103.Further, Mr Oh helpfully referred me to Warburton’s Unincorporated Association (2^nd Ed, 1992) at p.43. There, the learned author, referring to Re Recher’s Will Trusts [1972] Ch 526, 538, pointed out that:-

“The method of holding property employed by a particular association is a question of general law…The purpose or object for which the association is established is irrelevant.” (emphasis added)

104.In Re Bucks Costabulary Widows’ and Orphans’ Fund Friendly Society No 2 [1979] 1 WLR 936, 940, Walton J also stated:-

“I can see no reason for thinking that this analysis [of property holding] is any different whether the purpose of which the members of association are a social club, a sporting club, to establish a widows’ and orphans’ fund, to obtain a separate parliament for Cornwall or to further the advance of alchemy. It matters not. (emphasis added)

105.In Wilde D, (2022) The rule against perpetual trusts: part 2-property holding within non-charitable unincorporated associations. Trust Law International, 35(4) at p.3, the learned author also pointed out there has been a misunderstanding that if a non-charitable unincorporated association is itself a perpetual institution by its constitution, any donation to it is a perpetual trust, even if the association is entirely free to spend the capital. The learned author pointed out that:-

“This clearly confuses perpetuity of the association with the perpetuity in the donation: only the latter can be relevant…The better view is that if a donation leaves freedom to expend the capital, it does not violate the rule against perpetual trusts; no matter the association is perpetual by its constitution, and no matter how large the donation is…” (emphasis added)

106.In my view, what Mr Tam sought to do was to conflate the purpose for acquiring the Property with the purpose for which STWA was established. Whilst his contention flies in the face of the aforesaid authorities, it is also contradicted by my factual findings set out in paragraphs 90 to 97 and 99 to 100 above.

107.As pointed out, the Property was acquired for the general benefit of STWA, and it is open to STRC (which was entrusted to handle STWA’s affairs) and/or the STWA to (i) utilize the Property for purposes that it sees fit; (ii) expend the capital arising from the Property; and (iii) dispose of the Property. In the premises, the problem of inalienability does not arise at all.

108.Whilst Mr Tam also sought to rely on Re Sam Shui Natives Association [2010] 2 HKLRD 649 at paras 16 and 17, I am not of the view that this authority avails the Plaintiff at all.:-

(1)  The question of whether a property was acquired or gifted for a specific perpetual purpose is a factual matter to be decided on the facts of the case.

(2)  In Re Sam Shui Natives Association, an incorporated association (ie Dun Yee Tong) held the properties in question (ie properties A), but it merged with another incorporated association that was set up subsequently (ie Seung Kung Mo Kuk). Due to lapse of time, there was a gap in the evidence (see judgment, para 4), and the judgment did not reveal there was direct evidence that shed light on the circumstances in which properties in question were placed under Seung Kung Mo Kuk. Against this background, the Court of Appeal took into account the constitution of Seung Kung Mo Kuk in the course of ascertaining the purpose of placing the properties in question under the merged unincorporated association.

(3)  In my view, the present case is clearly distinguishable. For the reasons elaborated above, I find that the Property was acquired for the general benefit of STWA, and the Property was not confined to the narrow purpose of generating rental profit for paying wreath fees and funeral expenses.

(4)  More fundamentally, in Re Sam Shui Natives Association, the Court of Appeal did not consider whether the proposition propounded in Re Recher’s Will Trusts at 538, Warburton’s Unincorporated Association (2^nd Ed, 1992) at p.43 and Re Bucks Costabulary Widows’ and Orphans’ Fund Friendly Society No 2 (supra) at 940 was wrong or not. Due to the unique factual circumstances of that case, the question did not arise at all. Thus, there was no discussion of the relevant legal principles.

(5)  In the premises, Re Sam Shui Natives Association simply does not support Mr Tam’s proposition that the purpose or motive for acquiring the disputed property can be conflated with the purpose for which unincorporated association was established.

109.Mr Tam also referred me to Neville Estates Ltd v Madden [1962] 1 CH 832 at 849; Cheung Man Yu v Lau Yuen Ching & Ors [2007] 4 HKC 314 at paras 55 to 57; Re Macaulay’s Estate [1943] Ch 435; and Re Lipinski’s Will Trusts [1977] 1 All ER 33. However, I cannot see how these authorities would avail the Plaintiff’s contention. Whilst each case will have to be decided on its own facts, Mr Tam accepted the court should adopt “a broad and holistic approach”.

110.Based on the available evidence, I am simply unable to find any understanding or agreement to the effect that STWA’s members are prohibited from disposing of the Property and/or expending the sale proceeds or the rental income thereof. There is simply no evidence showing that such understanding or agreement exists. Even if the Property is sold or disposed of, STWA can continue to carry on its operation. The present case is clearly distinguishable from those cases that involved a scenario where the subject property was acquired for religious purposes. In that scenario, if the subject property were disposed of, the place for members to carry out religious ceremony or activities would be lost. As such, it is understandable as to why the court might be reluctant to find that the members of the association were at liberty to dispose of the subject property. This is not the scenario in the present case.

111.In any event, I cannot see how Mr Tam’s submissions on the rule against perpetuity would avail the Plaintiff.

112.For the reasons elaborated above, I find that the Registered Owners (including Mr Lam Senior) did not pay the purchase price for acquiring the Property, and it was well understood that they were merely nominees or representatives of STWA’s members. As such, even if the common intention constructive trust fails on the ground that it violates the rules against perpetuity and/or the rule against inalienability, it does not follow that the court should treat Mr Lam Senior and/or his estate as the real owner of the Property.

113.I am of the view that even if a common intention constructive trust cannot arise due to the rules against perpetuity and/or the rule against inalienability, for the reasons set out in Sections E and F below, the Plaintiff and/or the estate of Mr Lam Senior are anyhow caught by doctrine of estoppel by convention and/or the doctrine of proprietary estoppel. They must be estopped from asserting title against the members of STWA, who had acted on the common intention/understanding thereby changing their positions and suffering detriments.

D7.  Sum Up

114.For all the above reasons, I reject the Plaintiff’s contentions, and I find that the Property has been held under a common intention constructive trust in favour of STWA and/or its members.

115.In light of my findings and conclusion, I am of the view that the appropriate course to take is to (i) make a declaration that the Property has been held on a constructive trust and that the estate of Mr Lam Senior is not the beneficial owner of the Property; and (ii) compel the Plaintiff to transfer the title of the Property to STWA’s representative, namely Mr Mok: see Section K1 below.

E.  Estoppel by Convention

116.In light of the analysis and findings set out in Section D above, I further find that Mr Lam Senior’s estate and/or Plaintiff (who derived title from Mr Lam Senior) are estopped from asserting ownership of the Property against STWA or its members under the doctrine of estoppel by convention.

117.For the reasons set out in Section D2 above, I am satisfied there was a common intention (or convention) that the members of STWA were the true or real owners of the Property and that the Registered Owners were merely nominees or representatives who were entrusted to hold the registered title. In light of the unequivocal objective conduct on the part of the parties, I am also satisfied that such a common intention (or convention) was well understood by the parties and manifested by their objective conduct. I reject Mr Tam’s submissions that the common intention (or convention) were not known or agreeable to the Registered Owners. This was implausible.

118.For the reasons set out in Section D3 above, I am satisfied that the members of STWA as well as STRC (which was entrusted to manage and operate STWA) had suffered detrimental reliance as a result of acting on the said common intention (or convention) and their positions had changed.

119.For the reasons set out in Section D4 above, I am also satisfied that it would be unconscionable for the Plaintiff to cause Mr Lam Senior’s estate to renege from the said common intention (or convention).

120.In the premises, the Defendants’ contention based on estoppel by convention is made out, and I am prepared to grant a declaration that the Plaintiff (who derives title from Mr Lam Senior) is estopped from asserting ownership over the Property: see Section K1 below.

121.However, Mr Tam submitted that it would be unfair to grant reliefs under the estoppel as the original contributors (who were entitled to a beneficial interest in the Property under a resulting trust[14]) would not be in a position to cause the Plaintiff to take action against STWA and/or its members.

122.I have no hesitation in rejecting this contention:-

(1)  First of all, there is not a shred of evidence showing that the original contributors (or donors) were prepared to assert ownership over the Property. On the available evidence, it is apparent that these contributors (or donors) contentedly treated the Property as an asset belonging to STWA.

(2)  Second, more fundamentally, even if an original contributor (or donor) were keen to assert ownership over the Property, he could commence an action against the members of STWA and/or STRC directly. He did not need to act through the Plaintiff at all. The fact that the Plaintiff is subject to an estoppel viz-a-viz the members of STWA is neither here nor there.

(3)  In the premises, the original contributors (or donors) would not suffer any injustice or prejudice as alleged.

123.Further, Mr Tam submitted that it would be unfair to grant reliefs under the estoppel as the Plaintiff, being the registered owner, would remain liable to enforcement authorities.

124.I reject Mr Tam’s submissions:-

(1)  If Mr Tam were correct, no estoppel can ever arise against a registered owner. This cannot be right.

(2)  The reality is that since STWA’s members have a collective equitable right under the estoppel, STRC (who managed the affairs of STWA) had every reason to comply with the regulations of the Government. This explains why there is no evidence showing that the Registered Owners and/or the Plaintiff had complained that STWA and/or STRC breached Government regulations and/or the Government lease.

(3)  Further, Mr Tam’s suggestion is nothing more than a remote theoretical possibility. It is hard to understand why the Government would wish to take enforcement action against a bare title holder who has been estopped from asserting ownership.

F.  Proprietary Estoppel

125.For the same reasons set out in Section D above, I am also of the view that the elements of proprietary estoppel are satisfied. Even if a common intention constructive trust cannot arise, the members of STWA still enjoy a collective equitable right over the Property under the estoppel, and the Plaintiff and/or the estate of Mr Lam Senior must be estopped from asserting ownership and/or title.

126.It has been suggested that where the estoppel is concerned with a clear-cut promise or understanding that can readily be given effect, the court’s natural response is to fulfill the claimant’s expectation, unless the remedy is disproportionate or inappropriate: see Hong Kong Hua Qiao Co Ltd v Cham Ka Tai [2015] 4 HKC 167 at para 43 (per Kwan JA, as Kwan VP then was).

127.Bearing in mind (i) the parties’ common intention/ understanding that the Registered Owners were merely nominees; and (ii) the dealings in relation to the Property in the past five decades, I am of the view justice dictates that the Plaintiff (being the administrator of Mr Lam Senior’s estate) be compelled to transfer the tile of the Property in favour of the STWA’s representative (ie Mr Mok).

128.This remedy is not disproportionate in the circumstances of the present case. I would have granted such remedy under the doctrine of proprietary estoppel if a common intention constructive trust has not arisen.

G.  The Defendants’ Alternative Case based on the Contract Holding Theory

129.Relying on Warburton’s Unincorporated Association (2^nd Ed, 1992) at p.52 and Re Sam Shui Natives Associations (supra) at paras 16 to 17 (per Yuen JA), Mr Nicholas Oh (for the Defendants) further submitted that the parties’ relationship can be explained by the “contract holding theory”.

130.Mr Oh referred me to Nicholas Stewart QC, Natalie Campbell & Simon Baughen, The Law of Unincorporated Associations at para 3.04. There, the learned authors stated:-

“The ‘contract-holding’ theory operates whatever the nature of the association’s non-charitable purposes…Under the contract-holding theory the members will retain no proprietary interest in the subscriptions they pay to the association. Instead, as noted by Megarry J in Re Sick and Funeral Society of St John’s Sunday School, Golcar [1973] Ch 51 (Ch) 59-60, ‘they become the property, through the trustees of the club or association, of all the members for the time being, including themselves’”.

131.In Re Sam Shui Natives Association (supra) at para 16, Yuen JA, referring to Lewin on Trusts (18^th Ed) at para 4-51, stated:-

“One possible construction (the second in Lewin’s analysis) is that the property is acquired by the members subject to the contract between them, in which case it does not fail as an object trust nor will it fail in perpetuity (para 4-51):

…the gift may be construed as a gift to members of the association at the date of the gift, not as joint tenants, but subject to their contractual rights and liabilities towards one another as members of the association. In such a case a member cannot sever his share. It will accrue to the other members on his death or resignation, even though such members include persons who become members after the gift takes effect. This construction is compatible with an intention that the gift would enure the benefit of the association itself or its purpose, in view of the contract binding the members….If this…construction is the true construction of the gift, then, as it is to the individual members of the association, it will not fail as an object trust. Nor will it fail for perpetuity….”

132.For the reasons elaborated in section D above, I am inclined to the view that the preferable analysis is common intention constructive trust (or alternatively proprietary estoppel and estoppel by convention). In my view, the parties had plainly conducted the affairs of the Property on the basis that the same was beneficially owned by the members of STWA and that the Registered Owners were merely their trustees, nominees or representatives.

133.However, if my findings and analysis on common intention constructive trust (as well as proprietary estoppel and estoppel by convention) set out in Sections D, E and F above were wrong, based on the available evidence, I accept that the “contractual holding theory” is applicable and I would find it is possible to infer that the Registered Owners, STRC and the members of STWA had an agreement in respect of the Property along the following lines:-

(1)  The Registered Owners were authorized to acquire the Property on behalf of the members of STWA in the incapacity as their representatives and to hold the title of the Property on their behalf.

(2)  The Registered Owners could not treat the Property as their personal assets and should not use the Property for their personal benefit.

(3)  The STRC was authorized by the members of STWA to manage and handle the affairs of the Property on their behalf.

(4)  The members of STWA have a collective interest in the Property. So long as a person remains a member of STWA, he or she has a say in regard to the affairs of the Property, and STRC should take into account his or her views. If the majority of members of STWA are discontented with STRC’s management, it is open to them to take charge of the affairs in relation to the Property.

134.Accordingly, the Plaintiff (who is the administrator of Mr Lam Senior’s estate) is not in a position to bring the claims under the original action as these claims constitute flagrant violation of the contractual duties on the part of Mr Lam Senior.

H.  Conflicting Claims by Members of STRC

135.Mr Tam reminded me that the members of STRC have, via Mr Mok, brought a conflicting claim for the beneficial interest in the Property.

136.For the reasons set out in Section D above, I find that the Property has been held on a common intention constructive trust for the benefit of STWA’s members, not STRC’s members. Alternatively, for the reasons elaborated in Sections E and F above, STWA’s members (not STRC’s members) enjoy a collective equitable right under the doctrines of proprietary estoppel and/or estoppel by convention. Thus, the conflicting claim brought on behalf of STRC’s members (which I reject) is neither here nor there.

137.However, for completeness, it should be mentioned there appeared to be some confusion in Mr Mok’s evidence. At one stage, he asserted that the beneficial owner of the Property ought to be STRC. Meanwhile, he also asserted that the Property was acquired for the benefit of STWA’s members. When Mr Mok had the opportunity to explain his views, he effectively said although the Property was beneficially owned by STWA, STWA was in reality a sub-branch of STRC and STWA was managed and controlled by the STRC. This is exactly the Defendants’ case, which I accept.

I.  Adverse Possession

138.In their defence and counterclaim, the Defendants pleaded an alternative case based on adverse possession.

139.Given the findings and conclusion set out in Sections D and E above, it is unnecessary to decide the Defendants’ alternative case. However, for completeness, it should be pointed out that the Defendants’ alternative case based on adverse possession could not have succeeded.

140.In Cheung Lai Mui, the executrix of the estate of Cheung Ping Kau v Cheung Wai Shing & Ors [2020] 2 HKLR 15[15], the 3^rd defendant asserted equitable interest over a piece of land. Whilst he primarily relied on the causes of action based on common intention constructive trust and proprietary estoppel, he also relied on adverse possession as an alternative. The trial judge held that the 3^rd defendant succeeded in all these causes of action. In overturning the trial judge’s conclusion that adverse possession was established, at paragraph 6.64 of the judgment[16], Cheung JA pointed out that possession could not be adverse unless it was without the license or consent of the registered owner. Since the 3^rd defendant’s primary case of common intention constructive trust and/or proprietary estoppel was based on the registered owners’ gift and permission, the trial judge’s finding on adverse possession was factually inconsistent and thus should be overruled.

141.The present case is similar to the scenario in Cheung Lai Mui (supra).

142.In light of the objective conduct of the parties as discussed in Section D above, I am of the view that the Registered Owners, knowing that they were merely nominees or representatives with no interest at all, must have consented to the arrangement that the Property be used and/or leased out by STRC (which managed and operated STWA).

143.In the premises, the possession of the Property throughout the years could not be “adverse”. There is no room for me to make an inconsistent finding contrary to the Defendants’ primary case based on common intention constructive trust.

144.For this reason, the Defendants’ alternative case based on adverse possession must fail.

J.  Authenticity of the Defendants’ Documents

145.For completeness, it should be pointed out that the Plaintiff filed 4 notices to dispute the authenticity of 948 pages of documents adduced by the Defendants.

146.In my view, there is no basis for the Plaintiff to mount a challenge. Mr Tasman Tam (who treated some of the disputed documents as genuine during cross-examination) sensibly did not pursue the challenge seriously. Meanwhile, the Plaintiff’s legal representatives did not bother to inspect the original documents during the trial.

147.Indeed, there is no suggestion that someone concocted or manufactured the disputed documents for the purpose of this litigation; nor is there any suggestion that the disputed documents were tampered with.

148.Whilst I am unable to discern any matter that casts doubt on the authenticity of the Defendants’ documents, I fully accept Mr Mok’s evidence that the documents in question were located from STRC’s address and had been within the proper custody of STRC.

149.I find that all the documents adduced by the Defendants, including the Letter dated 12 December 1986, the annual tax returns lodged to the Inland Revenue Department, the tax demand notes issued by the Inland Revenue Department, the tenancy agreements, the meeting minutes, the audio recording in respect of the May 2019 Meeting, the Lists of Members, the membership booklets as well as the internal accounting records of STRC and STWA, were authentic and genuine.

K.  Disposition and Oder

K1.  The Substantive Reliefs

150.For the reasons elaborated in Sections D, E, F and G hereinabove, I dismiss the Plaintiff’s claims against the Defendants in the original action.

151.I make a declaration that:-

(1)  the interests of and in the Property have been held on constructive trust for the members of STWA, and the Plaintiff is a constructive trustee holding the title of the Property for the members of STWA;

(2)  the Plaintiff is estopped from asserting title, interest and ownership over the Property.

152.In their counterclaim, the Defendants pray for an order that the title of the Property be transferred to Mr Mok.

153.I accept that this is the appropriate course to take. Since STRC has been entrusted by STWA’s members to manage the affairs of the Company, STRC is entitled to take the view in light of the present dispute, it is desirable to entrust Mr Mok (who is the current chairman) to hold the title of the Property for the members of STWA.

154.I accordingly make an order compelling the Plaintiff to transfer the title of and interests in the Property in favour of Mr Mok within 28 days.

155.Out of caution, I will order that there be liberty to apply.

K2.  Costs

156.Costs should follow the event.

157.I make a costs order nisi that the Plaintiff do pay the 1^st, 3^rd and 4^th Defendants’ costs in this action (including all costs reserved) to be taxed if not agreed.

L.  Other Matters

158.Lastly, I express my gratitude to Mr Tasman Tam and Mr Nicholas Oh for their helpful assistance rendered to the court.

Mr Tasman Tam, instructed by Pauline Wong & Co., for the Plaintiff

Mr Nicholas Oh, instructed by Terry Yeung & Lai, for the 1^st, 3^rd and 4^th Defendants

The 2^nd Defendant was absent