Ho Kwong Yuen v. Yau Yan Man
Read the full judgment text of DCCJ 4849/2019 on BabelCite. This District Court judgment was delivered on 23 May 2025 before His Honour Judge Harold Leong.
Civil law – property dispute – beneficial interest – common intention constructive trust – Power of Attorney – forgery – burden of proof – District Court – Divorced spouses dispute ownership of matrimonial home. Plaintiff claims 50% share. Defendant claims 100% based on funding and PoA. Court finds Plaintiff habitual gambler and PoA authentic. Plaintiff's claim dismissed. Defendant declared sole beneficial owner. Plaintiff to execute assignment and surrender deeds. Costs awarded to Defendant.
Legal issues: Authenticity of Power of Attorney · Beneficial Interest in Property
Outcome: Plaintiff's claim dismissed; Defendant declared sole beneficial owner.
Cites 5 cases
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DCCJ 4849/2019 [2025] HKDC 777 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 4849 OF 2019 ____________________
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___________________ JUDGMENT ___________________ 1.This action concerns a dispute in the beneficial interest of a property known as Flat G, 6th Floor, Block 2, Sunshine Grove, No. 6 Tak Yi Street, Shatin, New Territories (“the Property”). Undisputed background 2.The plaintiff and the defendant were married in the PRC in 1992 and they have a son called Ho Chun Lung (“the Son”) in 1995. 3.In 1997, the plaintiff and the defendant signed an agreement for sale and purchase with the Hong Kong Housing Society as the vendor to purchase the Property as their matrimonial home. 4.By way of an assignment dated 3 May 1999, the plaintiff and the defendant became the registered owner of the Property as joint tenants. 5.The purchase price was HK$2,488,000 of which:
6.The plaintiff and the defendant were both borrowers under the 1st and 2nd Legal Charges. 7.On 11 July 2007, the defendant filed a divorce petition and the marriage was dissolved by a divorce decree granted by the Family Court dated 30 October 2007 (FCMC 8305/2007). 8.The plaintiff moved out of the Property around June 2008. It is not disputed that the defendant paid for the mortgage instalments of the Property after the divorce. 9.The 2nd Legal Charge was discharged on 24 April 2013 and the 1st Legal Charge was discharged on 11 November 2013. 10.Since then, the title deeds of the Property has been in the possession of the plaintiff. 11.On 18 November 2013, the plaintiff executed a Notice of Severance and so the plaintiff and the defendant became tenants-in-common. The said Notice was registered in the Land Registry on 25 November 2013. 12.In November 2018, the plaintiff requested to sell his half share of the Property in open market but the defendant refused. The plaintiff therefore commence the current proceedings. The plaintiff’s case 13.The plaintiff claimed that he has paid 1/3 of the Deposits, stamp duty, legal costs and other miscellaneous expenses. The remaining 2/3 were paid by the defendant (paragraph 4 of the plaintiff’s witness statement, Trial Bundle B, p.54). 14.He also claimed that the defendant has been a housewife from 1992 until their divorce and had no income. He was a restaurant manager and had paid all the mortgage instalments until the divorce on 30 October 2007 (according to paragraph 5 of the Statement of Claim, Trial Bundle A, p. 6), or until the time he moved out of the Property in June 2008 (according to paragraph 7 of the plaintiff’s witness statement, Trial Bundle B, p. 54-55). 15.After this time, the defendant continued to pay the mortgage instalments of the 1st and 2nd Legal Charge “out of the monthly maintenance” he paid her and the son. (Paragraph 7 of the plaintiff’s witness statement, Trial Bundle B, p.58). 16.The plaintiff has executed a Notice of Severance on 18 November 2013 and served the same on the defendant, who raised no objection. Thus, it was the “unequivocal intention” of the plaintiff and the defendant that the Property was held in their names as tenants-in-common in equal shares (paragraphs 10 and 11 of the plaintiff’s witness statement, Trial Bundle B, p.58). 17.On 24 April 2013 and 11 November 2013, he “procured” the Release of the 2nd Legal Charge and the Discharge of the 1st Legal Charge respectively (paragraph 12 of the plaintiff’s witness statement, Trial Bundle B, p.58). Presumably, this was how he explained that he obtained the title deeds of the Property (“the Deeds”) despite having moved out and not personally paying the mortgage installments at the time. 18.The plaintiff therefore seeks a declaration that he has half share in the Property and to possession thereof, and an order for sale for the proceeds of sale be shared equally with the defendant. The defendant’s case 19.The defendant claimed that she had at all material times worked and carried on business which generated sufficient income to support the family. She also had been lending money to the plaintiff to pay off his gambling debts incurred in gambling on horses (paragraph 4 of the Answer to Request for Further and Better Particulars of the Amended Defence and Counterclaim, Trial Bundle A, p.40). 20.The defendant also claimed that she had paid for the Deposits, the stamp duty, lawyers’ fees, decoration and furniture, as well as all the mortgage instalments of the Property (paragraph 6 of the Amended Defence and Counterclaim, Trial Bundle A, p. 23). 21.She further elaborated such payments in her witness statement. She claimed that, soon after she paid the 1st Deposit for the Property, she loaned HK$238,000 to a friend of the plaintiff, a Madam Wong Lai Ming (“Madam Wong”) and agreed that the loan be repaid in 1 year in the sum of HK$250,000 (inclusive of interests). 22.She had given the loan receipt to the plaintiff but when Madam Wong repaid the loan (which was for the 2nd Deposit of the Property), the plaintiff lost all the money on horse racing. The defendant loaned the money for the 2nd Deposit from her brothers and sisters in the PRC. She and the plaintiff subsequently agreed that he would repay the “lost” loan in form of mortgage instalments for the Property. As such, although the repayments were paid from his bank account, the actual fund would be deemed as from the defendant (paragraphs 6-8 of the defendant’s witness statement, Trial Bundle B, p.120- 121). 23.Further, the plaintiff was addicted to gambling and lost more than his income, so he frequently loan money from the defendant (“sometimes HK$30,000, sometimes HK$50,000”). When the defendant asked for repayments, he said that he would similarly repay the defendant in form of paying the mortgage (paragraph 12 of the defendant’s witness statement, Trial Bundle B, p. 121). 24.There were also other arrangements but in short, the defendant’s case is that she had paid for all the Deposits and the 1st and 2nd Legal Charges in the following way:
25.The defendant further claimed that she had considered selling the Property in 2008 so she had a Power of Attorney prepared by a PRC lawyer so she could deal with the Property. She claimed that the plaintiff agreed and signed this document on 8 August 2008 (“the PoA”, Trial Bundle B, p. 126). Initially she claimed that this took place in “Tsui Hang Village” restaurant in Central (paragraph 17 of the defendant’s witness statement, Trial Bundle B, p.122) but she then claimed it was at “Cuisine Cuisine” restaurant at International Finance Centre in Central (paragraph 7 of the defendant’s supplementary witness statement, Trial Bundle B, p. 183). Legal principles 26.The legal principles on common intention constructive trust, resulting trust and proprietary estoppel are well settled and not disputed by the parties. 27.The starting point is that equity follows the law and the burden is on the party who claims otherwise (Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985). 28.The legal principles on Common Intention Constructive Trust and Resulting Trust can be summarised as follows:
29.The doctrine of proprietary estoppel can be described as having 3 main elements:
Considerations Common Intention Constructive Trust 30.First of all, it is very clear to this court that the plaintiff is not a credible witness. 31.The plaintiff is especially evasive regarding any questions regarding his gambling habits. He fervently denied that he was a habitual gambler. 32.He firstly claimed that although he worked in the office during the weekdays, he could not attend horseracing on Sundays because his boss often hold banquets in the weekends and he had to attend to him. 33.At first, the plaintiff said he had to order dishes for the boss but when it was pointed out that he only need to order before the banquet, he claimed that he needed to stay in the kitchen to taste the food to make sure it was not too salty or plain for his boss. But then he also claimed that his boss was a very nice person and would not complain about the food. 34.When it was asked whether he needed to stay inside the kitchen to check every dish, he then said he only needed to taste the shark’s fin. 35.For all that, the plaintiff then agreed that if his boss held banquets in the evening, he could still go horseracing because it was a day race on Sundays. 36.When asked how often he attended horseracing on Sundays, the plaintiff was particularly evasive and inconsistent. 37.At first he admitted that he would go 2-3 times a month, then it was “once a week”. But then he tried to “walk back” on this by claiming that he would only go when the horse owners who were regular customers of Cuisine Cuisine (and also his good friends) invited him to go. 38.Then he added that the horse owners would only invite him when their horses were racing that Sunday so he had to attend to “give face” to them. These horse owners, the plaintiff claimed, knew him so well that they would invite him to attend the race to eat with them in the special horse owner’s area inside the Jockey Club. He insisted that, otherwise, he would never attend a horse race on his own. 39.But how would he would get to meet those horse owners when he was working in the office during the week (and only go to Cuisine Cuisine to attend to his boss’ banquets in the weekdays)? The plaintiff now claimed that the restaurant manager would call him if a horse owner was having a meal. 40.As such, according to the plaintiff, to be able to attend a horse race on Sunday:
41.This would clearly be a highly improbable scenario. 42.The question is, why would the plaintiff go to such ridiculous lengths to try to deny the accusation that he was a habitual gambler? Arguably, one could still regularly gamble but do so in a “responsible” way. But this is not the plaintiff’s case. 43.Indeed, given this consideration, it is reasonable for the court to infer that the plaintiff was a habitual gamble (at least at the relevant time). Further, the overt defensiveness attitude of the plaintiff raise some suspicion that he was not a “responsible” gambler, and that this suspicion supports the defendant’s case that he had been asking her to loan money (which he never repaid) to cover his gambling debts. Such conduct may support a change in common intention in beneficial ownership of the Property. 44.Of course, this is merely a suspicion and cannot be conclusive. 45.I find that the strongest evidence of such is the PoA (Trial Bundle C, p. 302), which stated (as I translate):
46.There are two signatures on the PoA purportedly by the plaintiff and the defendant, and it was dated 8 August 2008. 47.In her counterclaim, the defendant never prayed for a declaration for the effectiveness of the PoA. At her Opening Submission, Ms. Vivian Chan, counsel of the defendant, conceded that the PoA did not comply with the formality required under the Power of Attorney Ordinance (Cap. 31) but submitted that this should be an important contemporaneous document and compelling evidence reflecting the common intention. 48.Indeed, the parties’ common intention was clearly stated on plain reading of this document. In short, the plaintiff has authorised the defendant to sell, gift or deal with the Property on her own because she had paid for the entire mortgage repayment. 49.The plaintiff’s case is that “he had never signed the PoA at all” (paragraph 12 of the Statement of Claim). 50.In paragraph 16 of his witness statement (Trial Bundle B, p.59), he stated that:
51.The plaintiff repeated the same allegation in paragraphs 6 and 7 of his 1st Supplemental Witness Statement (Trial Bundle B, p.199):
52.The plaintiff further repeated the same allegation of a forged document in paragraph 5 of his 2nd Supplemental Witness Statement (Trial Bundle B, p. 209):
53.In fact, the plaintiff raised further evidence to support his claim that the PoA was forged. He alleged that the presence of a “trace mark of hand-writing which looks like my signature” upon his inspection of the original PoA “are reasonable proof that the PoA is forged” (paragraphs16 of the plaintiff’s Witness Statement and paragraph 7 of the plaintiff’s 1st Supplemental Witness Statement, Trial Bundle B, p. 59 and 199). 54.I would think that the court should be assisted by expert evidence from handwriting experts regarding such allegations of “trace marks” on documents. However, I note that the plaintiff has elected not to instruct one. 55.The plaintiff’s counsel, Mr. Timothy Lam (“Mr. Lam”), argued that the defendant bears the legal or persuasive burden of satisfying the court that the plaintiff has signed the PoA and that it is genuine / authentic (Choi Lisa Mei Yin v Yau Pak Kin [2019] HKCA 812). 56.Mr. Lam further quoted the case of Club Deluxe Ltd v Club Metropolitan Ltd [1995] 2 HKLR 69:
57.In this case, the defendant had, in paragraph 16 and 17 of her witness statement (Trial Bundle B, p.122) stated that she had found a lawyer in PRC to draft the PoA and, on 8 August 2008, attended Tsui Hang Village restaurant in Central (where the plaintiff was working) and that the plaintiff signed the PoA in the restaurant. 58.In the Answer to Request for Further and Better Particulars of the defendant’s Witness Statement, under Answer to Request 14 and 15 (Trial Bundle B, p.177), the defendant corrected that it was not at the Tsui Hang Village restaurant but at Cuisine Cuisine restaurant and that their son accompanied the defendant so both had witnessed the signing of the PoA. 59.I note that the defendant further clarified in paragraph 7 of her Supplemental Witness Statement (Trial Bundle B, p.183) that confirmed that she had initially mixed up the two restaurants because the plaintiff was in charge of different restaurants under the Henderson group and the signing of the PoA took place more than 10 years ago. Indeed, the plaintiff admitted in court that both Tsui Hang Village and Cuisine Cuisine restaurants belong to his company group of restaurants. 60.Further, the Son, in paragraph 5 of his witness statement (Trial Bundle B, p.192), also confirmed that he had accompanied the defendant to the restaurant where the plaintiff was working (i.e. Cuisine Cuisine) and that he saw the plaintiff signing on the document etc. 61.As a minor observation, if the event of the signing of the PoA was a complete lie by the defendant, one might logically question why she would bother to “correct” the location? 62.In any case, I agree with Ms. Chan’s submission that whilst the defendant in this case has the persuasive burden of proving the authenticity of the PoA, such burden has been discharged by evidence from the defendant and the son. They had both claimed to have witnessed the plaintiff signing the document (Phipson on Evidence (20th ed.) at paragraph 41-09 on p.1547). The circumstances and evidence of this case is therefore different and distinguishable from the case of Club Deluxe Ltd. 63.Further, I find the evidence from the Son in court convincing. 64.Under cross-examination, the Son was able to describe the restaurant in some details (like the bridge into the restaurant and the floor to ceiling glass room etc.). He was also able to explain why he had to accompany the defendant to the restaurant: she was from the PRC and only knew her way from home to his school. The Son knew the way to Cuisine Cuisine restaurant because the plaintiff had arranged a colleague called “Ah Hoi” to bring him to Cuisine Cuisine restaurant for lunch before. 65.As for the date of signature of the PoA, he admitted that he could not remember the exact date (which was provided by the solicitors) but he remembered that this was the summer of the Beijing Olympics because the defendant had promised to bring him to see the games but did not in the end. He was very disappointed and so had a deep impression of that period of time. 66.It is clear that the son was able to provide very straightforward and convincing answers for matters he could remember under cross-examination. When questioned further, he was able to fill in many details in support of his answers. He was also very open and honest when it came to matters that he did not know or remember. As such, I find him, on the whole, a credible witness. 67.Therefore, the material fact of the Club Deluxe Ltd case is different from the current case. In that case, the judge placed “virtually no reliance on the testimony” of certain witnesses and “the only proper conclusion is that the legal burden on the plaintiff to establish that D3 had signed Ex C244 had not been discharged”. 68.In this case, given that the burden of proving the authenticity of the PoA has been discharged, the burden of proof of the alleged forgery now falls on the shoulder of the plaintiff:
69.The plaintiff confirmed under cross-examination that he has not seen the PoA before the current action and only first saw the document when it was disclosed in the letter dated 12 November 2018 from the defendant’s solicitors. Yet, the plaintiff has never reported the matter to the police. 70.More importantly, the plaintiff had opted not to adduce handwriting expert evidence (despite having indicated to court earlier that he might do). When questioned in court, he claimed that this was for saving costs. 71.This was clearly a non-sensible answer: the authenticity of the PoA is a pivotal dispute in this case which concerned the interest of the Property. The plaintiff agreed that the Property should be worth around HK$8 million. Thus, the costs of instructing an expert would have been proportionally insignificant. 72.As for the alleged “trace mark”, I note that the plaintiff did not appear to know what that referred to when giving evidence in court. He first suggested that the signatures were not signed with the same pen. When it was put to him why this would be relevant given that the signatures would have been signed by two different persons, he then suggested that his alleged signature “did not appear very natural or smooth” (“唔係好自然” “冇咁順眼”). 73.It was only much later in the trial (during the cross-examination of the defendant) that Mr. Lam suggested that the “trace mark” actually referred to an indentation on the original PoA document which apparently looked like the plaintiff’s own signature. 74.Arguably, this is evidence given by Mr. Lam from the bench: the plaintiff did not make such an allegation when giving evidence in court. 75.Further, such allegations should be within the realm of handwriting expert evidence. The court is not in a position to examine the document to make any expert opinion or judgment. 76.Indeed, even if the court accepts the evidence that there is such an indentation, it might be assumed that someone have written something on a sheet of paper stacked above the PoA. However, whether this assumption was correct and whether the indentation “looked like” the signature of the plaintiff should also be matters for handwriting experts to address. The court should not speculate on how this would be “reasonable proof that the PoA is forged” without expert evidence. 77.Nevertheless, the court noted that when Mr. Lam showed this indentation to the defendant, she was able to explain that the plaintiff had signed two copies of the PoA, i.e. in duplicate so each party has a copy. As such, the indentation could have been caused by the plaintiff signing the copy above this one when the two copies were stacked together. 78.Mr. Lam suggested that this was new evidence because the defendant had never mentioned before that the plaintiff had signed two copies of PoA. The defendant explained that she was never shown what the plaintiff meant by “trace mark”, and when it was shown to her in court, she could immediately think of the explanation. 79.I think that the defendant’s explanation seemed to made sense. Further, it seemed unlikely that the defendant could “invent” an explanation in an instant if this was not what happened. It might be more likely that this was what actually happened and the defendant’s memory was prompted by Mr. Lam showing her the indentation. However, this was only my passing observation and would not affect my decision since, as I mentioned above, this should have been a matter for expert evidence. 80.As such, the court finds that the plaintiff only gave a mere conjecture of inference of forgery of the PoA: his evidence in court was only that his signature “did not appear very natural or smooth”. He did not adduce any expert evidence to support whether his signature indeed looked not smooth or natural (compared to his usual signature) and, more importantly, whether a signature displaying such characteristics might be reasonable proof that the signature was forged. 81.As such, there was clearly no reasonable foundation for such an inference to be drawn against such a serious allegation. 82.There is a final nail in the coffin of the plaintiff’s case. 83.Under cross-examination, the plaintiff admitted that, after the discharge of the two Legal Charges (in late 2013), he, being the first named mortgagee, was notified by the bank. He went to the bank on his own without informing the defendant to obtain possession of the Deeds of the Property. 84.When asked why he did that, the plaintiff explained that this was after the divorce and the defendant had the PoA, so he had to get the Deeds to “protect himself” and have it kept by his solicitors. 85.When asked for clarification, the plaintiff confirmed repeatedly that it was because the defendant had done the PoA in 2008, so in 2013, he took possession of the Deeds to give to his solicitors for protection. This was because he believed that the PoA would allow the defendant to sell the Property on her own. He knew that if he kept the Deed (with his solicitors), the defendant could not sell the Property. 86.Even at re-examination, when asked why he obtained possession of the Deeds in 2013, the plaintiff again said that “it was because of the 2008 PoA” and that he placed the Deeds with his solicitors to protect himself. 87.As such, there was no question that the plaintiff was in any way confused by the questions. 88.This admission was entirely inconsistent with the plaintiff’s earlier evidence that he first saw the PoA after the current action has commenced (when it was disclosed by the defendant’s solicitors in November 2018). 89.Instead, the plaintiff has admitted that he was aware of the PoA all along. Clearly, he also understood its “purported” intended effect. That was why when the opportunity came in 2013 that he could obtain possession of the Deeds from the bank, he did so without informing the defendant (despite having known and agreed, as stated in the PoA, that the defendant had paid for the mortgage entirely on her own). 90.The plaintiff had believed that, by taking the possession of the Deeds, the defendant would not be able to deal with the Property on her own according to the PoA. He has clearly changed his mind and was doing that to frustrate any attempt by the defendant to sell the Property. Of course, the fact that the PoA was actually legally ineffective did not occur to him (nor the defendant) at the time. This was probably only raised by his solicitors in the current action. 91.Given the plaintiff’s admission that he has been aware of the PoA all along (or at least before 2013 when he obtained the Deed), he must also know whether he signed it or not. If he ever thought that it was forged, this would have been such an alarming matter and he would have reported to the police immediately. This would have offered him instant protection against, as he believed, the defendant’s ability to sell the property on her own. 92.Thus, the plaintiff has no logical reason nor need to wait until 2013 to “protect himself” by obtaining possession of the Deeds. The logical inference must be that the plaintiff was well aware that the PoA was authentic, i.e. he actually signed it himself. This may also explain why he has elected not to instruct a handwriting expert. 93.As such, the plaintiff’s repeated allegations of forgery in the Statement of Claim and his three Witness Statements are clearly false accusations. This level of dishonesty is of concern to the court given that all four documents are supported by Statements of Truth signed by the plaintiff himself. 94.On the other hand, I note that much of the court’s time was spent examining the defendant’s purported business and source of income, and how she funded the deposits and mortgage repayments. 95.I am aware that the defendant’s evidence concerning such was also at times inconsistent. For example, she gave different versions of the event concerning her loan to Madam Wong, she gave a rather confusing account of the financial arrangements within the family, and she was not very clear about the exact amount of money she had loaned to the plaintiff over the years etc. 96.However, I understood that these events happened long ago and there might not be any formal financial arrangements or records within a domestic setting. 97.In any case, what emerged from the evidence is the general pattern of the plaintiff incurring gambling debts and obtaining loans from the defendant which remained substantially unrepaid in one way or another over the years, and thus resulting in the agreement between the parties regarding the Property as stated in the PoA. 98.Indeed, whatever ways the defendant had funded the payments for the Property were of relative minor significance given that there is strong evidence before the court of the common intention of the parties in form of the PoA. 99.In conclusion, I find that although the Property was initially bought in the joint names of the plaintiff and the defendant as the matrimonial home, this is an exceptional case where the presumption of the equity follows the law can be displaced by a change of common intention at a later date. The PoA, despite not being legally effective, is clear and compelling evidence that there is an expressed agreement reached between the parties on how the property is to be held beneficially. Further, by his conduct of obtaining and retaining possession of the Deeds to “protect himself”, the plaintiff has clearly all along been fully aware of and understood this common intention. 100.As for the other two elements for the finding of a common intention constructive trust, there can be no dispute: the Property did not form part of the divorce proceedings and the defendant had continued to pay for the mortgages on her own after the divorce. The defendant have therefore acted to her detriment on reliance of the common intention. It would be unconscionable for the plaintiff to assert ownership according to his legal title. Resulting trust 101.Since the court finds a common intention between the parties, there is no need to consider a resulting trust. In any case, the PoA can also serve as evidence for any resulting trust given that both parties agreed that the defendant contributed fully for the mortgage repayment to the Property up to the date of 8 August 2008. Of course, there is no dispute that the defendant funded the remaining repayments since then. Proprietary Estoppel 102.Again, there is no need to consider under this head of claim but the court will also note that the PoA will also serve as evidence that, on balance on probability, there must have been discussions and representations between the plaintiff and the defendant regarding the beneficial interest of the Property given that the parties did sign the document. 103.In reliance to such, as stated in paragraph 99 above, the defendant have acted to her detriment and it would be unconscionable for the plaintiff to assert ownership in reliance of his legal title. Order 104.The court will dismiss the plaintiff’s claim and grant the following:
105.The court will order the Plaintiff to pay the Defendant’s costs of this action, to be taxed if not agreed, with certificate for counsel granted.
Mr Timothy Lam, instructed by Messrs Zhong Lun Law Firm LLP, for the plaintiff Miss Vivian P Y Chan, instructed by Messrs C.Y. Tsang & Co., for the defendant |
Cases cited in this judgment