Pang Kam Chuen, The Sole Executor of the Estate of Pang Yeuk Chi, Deceased v. Pang Kam Bor
Read the full judgment text of CACV 334/2024 on BabelCite. This Court of Appeal judgment was delivered on 30 September 2025.
1. This is an appeal, pursuant to leave granted by this Court (in CAMP 46/2024), against the judgment of Mr Kenneth K Y Lam sitting as a Deputy District Judge (‘the Judge’), who dismissed the plaintiff’s claim against the defendant. Pang Yeuk Chi (‘the Father’) was the father of the defendant, who was one of four children from the Father’s first marriage. The Father died after the commencement of the present action. The action is now prosecuted by Pang Kam Chuen (‘Chuen’), the executor of the es
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CACV 334/2024, [2025] HKCA 895 On Appeal From [2023] HKDC 1346 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF APPEAL CIVIL APPEAL NO. 334 OF 2024 (ON CIVIL APPEAL FROM DCCJ NO. 348 OF 2021) ________________________
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_______________ JUDGMENT _______________ Hon Cheung JA (giving the judgment of the Court) : I. The appeal 1.This is an appeal, pursuant to leave granted by this Court (in CAMP 46/2024), against the judgment of Mr Kenneth K Y Lam sitting as a Deputy District Judge (‘the Judge’), who dismissed the plaintiff’s claim against the defendant. Pang Yeuk Chi (‘the Father’) was the father of the defendant, who was one of four children from the Father’s first marriage. The Father died after the commencement of the present action. The action is now prosecuted by Pang Kam Chuen (‘Chuen’), the executor of the estate of the Father. Chuen is one of the three children of the Father from his second marriage. The plaintiff’s claim is that a residential property at Kwai Fu Building, Kwai Chung, New Territories (‘the Kwai Fu Property’) registered in the sole name of the defendant is held by the defendant for the benefit of the Father by way of common intention constructive trust or alternatively resulting trust. 2.The defendant’s defence is that the Kwai Fu Property was a gift by the Father to him that the Father had promised on the defendant’s marriage in 1985. II. Background of the case 3.In the judgment below, in the section under Background Facts, the Judge only briefly mentioned that the Father was born in the Mainland in 1940. He came to Hong Kong in 1968. The Father was only able to bring the eldest son Pang Kam Kuen (‘Kuen’) of the family with him to Hong Kong. The defendant was left behind in the Mainland. The defendant came to join the Father in Hong Kong in 1979, when he was about 15. The Father started a furniture business in Hong Kong. The Judge then referred to the children of the Father’s two marriages. He then proceeded to refer to the assignment dated 8 December 1986 by which the defendant became the sole registered owner of the property and a legal charge also dated 8 December 1986, when the defendant was named the mortgagor and the Father was the named borrower; and the Bank of Communications (‘Bank’) was named the mortgagee by which the property was charged to the Bank for a sum of HK$120,000 plus interests. 1) The plaintiff’s case 4.The Judge did not summarise the background of the Father’s case. The Father after the commencement of the present action had given two witness statements. He died before the trial was heard. We will now deal with his witness statements. 5.According to the Father, he was born in the Mainland in 1940 and started a furniture business Kar Wah Furniture after he came to Hong Kong. Later, he met the second wife (‘the Widow’) whom he married in 1979. He was divorced from the first wife in 1976. 6.In 1977, the Father together with the Widow bought a property in Cheung Wing Mansion in Tai Loong Street. The property was a ground - floor shop with a cockloft (‘the Ground Floor Property’). The ground floor was used as the Father’s furniture business. The cockloft was used as the dwelling by the Father, his new family and Kuen who came to Hong Kong with him. In 1980, he bought another property in Cheung Wing Mansion for his furniture business (‘the First Floor Property’). In 1987, the Father and the Widow purchased a workshop in Tuen Mun (‘the workshop’). 7.According to the Father, the defendant came to Hong Kong in 1982 and worked at his furniture shop with a salary. (The defendant’s case was that he came in 1989. The Father accepted that he might have remembered incorrectly about the year of his arrival.) Later on, the defendant got married in 1985 and his wife came to Hong Kong from the Mainland in 1988. 8.In 1986, the Father had almost completed the repayment of the bank mortgage loans for the first two properties. He did not own any residential property at that time, and he had always wished to purchase a residential property as a family home to improve their living conditions, so he purchased the Kwai Fu Property. 9.The Father explained that as he and the Widow already had other properties mortgaged to the bank, they could not take out another mortgage loan. Even if the bank could have provided another mortgage loan to him or the Widow, the approved amount would have been minimal. He therefore thought of applying for a mortgage loan in the name of one of their children to purchase the Kwai Fu Property. At that time, the three children of his second marriage were under 18 years of age. Kuen who had previously worked in his furniture business had embezzled money from the furniture shop and he did not trust him. Compared to Kuen, the defendant seemed more honest. He was 22 years old and had a steady income from working at the furniture shop. The Father’s other children from the first marriage was Pang Siu Yue (‘Yue’) who got married and moved away shortly after arriving in Hong Kong. The other son Pang Kam Chu (‘Chu’) was still a secondary school student without employment. 10.He decided to apply for a mortgage loan from the Bank in the name of the defendant to purchase the Kwai Fu Property, with himself as the borrower. He told the defendant that he intended to purchase the Kwai Fu Property as a family residence, and that he would buy the property in the defendant’s name, with the defendant holding the title of the property on his behalf. All expenses related to the purchase would be covered by him; the defendant would only need to sign the deed. The defendant agreed to this arrangement and was delighted at the prospect of moving into a new home. 11.Throughout the entire property purchase process, the defendant followed his arrangements. He instructed the defendant to attend the solicitors’ firm on 8 December 1986 to sign the Deed of Assignment. On the same day, the Mortgage Deed was signed, with the defendant as the mortgagor and himself as the borrower. 12.The Father paid all expenses related to the purchase of the property, including the deposit, down payment, estate agent’s commission, stamp duty, and solicitor’s fees. The Father also paid for all the mortgage repayments. The defendant did not contribute any funds whatsoever. The Father produced documents evidencing his payments. 13.After acquiring the property, the entire family, including the defendant (and later his wife) moved in. In the late 1980s, the defendant purchased a wooden hut in Shek Lei, Kwai Chung, and moved there with his wife. The Father was unaware of the exact new address of the defendant, as the defendant did not inform him. The defendant and his wife did not return to the Kwai Fu Property. 14.The Father also paid for the other expenses for the Kwai Fu Property, including electricity fees, water charges, management fees, rates, and telephone bills. He produced the receipts of the payment of the electricity bills, water bills, management fee invoices, and Government Rates. After the Father commenced the present action, the defendant abruptly transferred the Government Rates account to his name in April 2021, redirecting the demand notes to his Tsing Yi residence and commenced to pay for the rates. 15.All the costs of furnishings, refurbishment, maintenance expenses of the Kwai Fu Property, and other building works costs borne by the owners of the Kwai Fu Building were paid by the Father and he produced the documents evidencing the payment. 16.The Father said that after he paid up all the mortgage installments for the Kwai Fu Property in 1991, he had intended to transfer it back into his name. However, the defendant had not contacted him since he moved out and he did not have the defendant’s address or telephone number. Coupled with the busy operations of the furniture shop, he had put to one side the matter of transferring the title. 17.Sometime after the year 2000, seeing that the furniture business was not as prosperous as before, the Father ceased operating it and instead leased the Ground Floor Property, the First Floor Property and the workshop to others. 18.It was not until 2013-2014, when the Father realized he was getting old and his health began to deteriorate, that he felt it was necessary to deal with the defendant regarding the ownership of the Kwai Fu Property. He asked a relative to approach the defendant to ask him to transfer the Kwai Fu Property back to him. However, the defendant refused to communicate with him and avoided any discussion regarding the property transfer. 19.Consequently, he sought legal assistance and, through his solicitors, Norman M K Yeung & Co., wrote to the defendant on 4 November 2014 demanding him to transfer the title of the Kwai Fu Property to him. On 10 November 2014, the defendant replied through his then solicitors, Carol Lam & Co., claiming that all the money paid for the purchase of the Kwai Fu Property and all the costs and expenses incurred in relation to the Kwai Fu Property belonged to him. He further claimed that he was the sole legal and beneficial owner of the Kwai Fu Property. 20.The Father then obtained from the Bank records showing his mortgage payments from 1986 to the end of 1991, as well as copies of cheques issued from his current deposit account. 21.The Father’s health deteriorated, requiring frequent hospital visits. Compounded by social unrest and the COVID - 19 pandemic, the transfer of the Kwai Fu Property remained unresolved. By 2020, the defendant had still not addressed the title transfer matter. Left with no alternative, as soon as the pandemic situation had eased, he instructed his present solicitors, K W Wong & Co, to commence the action below against the defendant in late 2020. The solicitors served a pre-action letter to the defendant on 23 December 2020. The defendant’s then solicitors, Carol Lam & Co., replied on 11 January 2021 stating that all the funds for purchasing the Kwai Fu Property and all associated expenses belonged to the defendant. It was only in the defendant’s defence dated 11 March 2021 that he alleged for the first time that the Father had gifted the Kwai Fu Property to him to show appreciation for his contributions to the furniture business. The Father stated that this assertion was untrue. He never told him or anyone that he had gifted the Kwai Fu Property to him. The defendant merely worked at the furniture shop for five to six years, responsible for delivering goods by driving the company vehicle, and was paid a salary at the time. He owed the defendant nothing. 22.The Father refuted the defendant’s allegation that the profit from the furniture shop was due to the defendant’s effort. The Father stated that many people had worked for him including his wife. He refuted the defendant’s allegation that he had not paid the defendant any salary. He said he had paid the defendant and the other staff by cash. He also denied that when he met the family of the defendant’s future wife in the Mainland he had promised that he would buy a flat for the defendant and his wife to live. He accepted that when the Kwai Fu Property was bought he had not uttered the specific term ‘trust’. It was his lawyer who advised him that the arrangement was related to trust. He had seven children and it was preposterous that he should gift the Kwai Fu Property only to the defendant. 23.The Father died on 9 November 2022. During his lifetime, he made a will on 19 July 2017. It specifically mentioned the Kwai Fu Property is registered in the defendant’s name but the purchase money and other expenses were all paid by him without any contribution by the defendant. He would pursue the defendant to return the property but if he was unable to successfully pursue it, he would authorise Chuen to pursue for its return. 2) The defendant’s case 24.The defendant gave three witness statements. Again, the Judge did not summarise his evidence. The defendant confirmed that he came to Hong Kong in 1979. He worked at the Father’s furniture shop. At that time, his elder brother, Kuen, and his stepmother’s (i.e. the Widow’s) elder brother (Brother Wah) also worked at the Father’s furniture shop. The defendant stated that he worked at the furniture shop for many years without receiving a salary. Although Kuen and Brother Wah both received money salaries and other casual or permanent workers also received salaries, he only received tips from customers when he delivered goods to them. He learned the furniture trade while working at the furniture shop, gradually taking on more responsibilities, especially after Kuen and Brother Wah ceased working full-time at the furniture shop. In around 1981, Kuen developed his own business elsewhere. The defendant stated that he became the mainstay of the furniture shop, handling everything from measuring, drawing plans, manufacturing furniture, delivering goods, installing them at customers’ places, handling sales and so on, running the furniture shop together with his father. The furniture shop business was exceptionally good, as numerous housing estates were being occupied or refurbished, resulting in a heavy workload. He worked extremely hard for the furniture shop. Even without a salary, he treated it as his own business and put in the same effort. At that time, the business for renovation was also very buoyant. His friends who knew that he was not receiving a salary at the furniture shop kept persuading him to join them to do renovation work to earn money. But as he was shouldering major responsibilities at the furniture shop, he said he could not just walk away without any consideration. 25.The defendant stated that the Father suffered financial loss in furniture trading in about 1983. The Father was so devastated that he intended to take his own life. He was unable to bear to see the Father suffer and doubled his efforts in managing the furniture business to earn money to cover the loss. The Father valued him greatly for his dedication and loyalty to both the business and the family. Their relationship was extremely close and harmonious at the time. He also maintained a harmonious relationship with the children of the Father’s second marriage. The defendant stated that knowing that he was about to marry in 1985 but did not have any savings, the Father said to him more than once that: ‘I intend to buy a flat for your wedding.’ After he got married, the Father did buy him the Kwai Fu Property in 1986. The property was owned by him in his name, without the Father’s name in it. Then, he moved into the Kwai Fu Property with the Father, the Widow and the younger siblings. After his wife came to Hong Kong, she also resided there. 26.Although the Kwai Fu Property was a gift from the Father, the defendant said that because of Chinese moral values and filial piety, he never considered evicting the Father, the Widow and their children. He said that even though they fell out at the time, they remained his family who had cared for him for years, and his three younger siblings were still young. He was able-bodied and capable of leaving the furniture shop to strive in the renovation trade. Therefore, he ultimately decided that he and his wife would leave, allowing the Father, the Widow, their children and his own younger sibling Chu (who was also residing with them at the time) to remain in the Kwai Fu Property. 27.He then bought a wooden hut with the help of his younger sister and her husband. 28.After leaving the furniture shop, the defendant engaged in renovation and maintenance projects to support his own family. He was earning nearly ten thousand dollars a month. He continued working on projects, while his wife was working in a garment factory. 29.They were beginning to save a little and were not yet able to purchase a flat. Furthermore, because he owned the Kwai Fu Property, they were ineligible to apply for public housing. Had both he and the Father understood and agreed that the Kwai Fu Property was merely a ‘trust’, he would never have consented to continue holding it for the Father and give up the public housing application. At that time, no one ever mentioned about the term ‘trust’ or using his name to facilitate mortgage loan. The Father explicitly stated that the Kwai Fu Property was his gift to him. Even after his daughter was born, he never considered taking back the Kwai Fu Property because he and his wife were capable of earning their own income. On the contrary, the Father was getting old and it would be more difficult for him to run the furniture shop without his assistance. He also had to support three young children. The furniture shop’s business declined after he left. It was no longer viable and it closed down within a few years. 30.In 1991, the defendant and his wife purchased a flat in Greenfield Garden, Tsing Yi on a mortgage and lived with their daughter. Since then, their financial situation remained sound, they neither needed nor intended to take back the Kwai Fu Property. Out of filial duty, it was entirely reasonable and appropriate for him to let the Father and his family continue residing in it until the Father passed away. He had never thought of collecting any rent from the Father, for they are family after all. He could earn his own living and had no need to covet such a trifling sum. Since the Father and his family resided rent-free in the Kwai Fu Property, it stood to reason that they should bear the costs of management fees, rates, water and electricity bills etc. 31.The defendant confirmed that moving out of the Kwai Fu Property marked the beginning of a strained relationship between him and the Father. They almost never met, except on three occasions: when the Father requested him to handle the relocation of his grandfather’s grave in 2013; during the illness and subsequent passing of his own mother in 2018; and in his daughter’s wedding in 2018. Nonetheless, his wife would visit the Father from time to time, particularly during major festivals. On such occasions, he handed a little money to his wife to pass on to the Father as a token of filial piety. 32.The defendant stated the Father had asked him to arrange workers to handle the demolition of unauthorised structures in the Kwai Fu Property as demanded by the Government in Kwai Fu Building. He declined to bear the expenses as he had not collected rent from the Father for his occupation of the Kwai Fu Property. 33.The defendant stated it was not until 4 November 2014 that he suddenly received a letter from the Father’s lawyer that stated that he held the Kwai Fu Property on trust and demanded that he should transfer the ownership to the Father. It was the first time that he heard of ‘trust’ or the saying of using his name to purchase the property for convenience sake, and it was also the first time that the Father requested him to transfer the ownership. He found it utterly preposterous. He engaged a lawyer to reply on 10 November 2014, stating that he wholly disagreed with the Father’s version. He explained that his reply mentioned that the funds used by the Father to purchase the Kwai Fu Property belonged to him (‘All money paid for the purchase of the Property…belonged to [Pang Kam Bor]’). This is because, not to mention that it was clearly purchased by the Father as his wedding gift and reward for his efforts, while the Father’s letter of 4 November 2014 stated that the purchase price was paid by the Father and the property should belong to the Father, he had devoted himself whole - heartedly to the furniture business to make it profitable without receiving wages or dividends, he was thus of the view that most of the profits made by the Father from the furniture business were with his assistance. What the Father called ‘his money’ was, in fact, the reward of his years of work in the shop. He found the Father’s view utterly preposterous. Hence, he instructed his lawyer to state what was said in the written reply. After sending that letter, he received no further letter from the Father’s lawyer, nor any request made by the Father privately for the transfer of ownership. 34.The defendant claimed that the Father had other girlfriends. In December 2020, the defendant was told by his wife that apart from the Widow (her three children had already moved out), another woman from the Mainland and her family (children not born to the Father) were residing there. The defendant said he could not accept it and found it resentful. He all along only permitted the Father and his family to reside in the Kwai Fu Property, but not outsiders to reside there. He could take the property back at any time. 35.On 23 December 2020, he suddenly received a lawyer’s letter mentioning the trust matter again. The defendant said that the Father’s claim that he used the defendant’s name to purchase the Kwai Fu Property to facilitate the mortgage and the defendant was merely held it on trust for him with the defendant’s knowledge and consent was an entire fabrication. He first heard of the claim about ‘to facilitate the mortgage’ in 2014. It does not stand to reason because the banks would never lend any money to him, particularly when he had no income or savings in 1986. On the contrary, the Father was the owner of the furniture shop and business and he had at least two properties. The Bank’s loan/mortgage documents also clearly stated that the Father was the borrower instead of taking out a loan in his name. 36.The defendant stated he remembered the Father paid the other staff of the furniture shop by cheques. When the Father was in the Mainland to meet the family of his future wife to propose marriage on his behalf (the defendant was not present), he had promised her family that he would buy a flat for the defendant and his future wife to live when they got married. The defendant had also viewed properties that the Father had viewed before they decided to purchase the Kwai Fu Property. He claimed that he changed the rates account to his name in April 2021 because he feared the Father would claim adverse possession of the property by reason of having paid the rates. III. The judgment below 1) Structure of the judgment 37.As mentioned, the Judge first gave a very brief outline of the background of the case. He then dealt with the evidence of the witnesses, the Father’s witness statements, the respective case of the Father and the defendant and then other matters. 2) The witnesses 38.The eight witnesses that gave evidence at the trial are :
39.The Judge then made findings on these witnesses without first providing a summary of their evidence. We will provide a brief summary of the gist of each of the witnesses’ evidence before we summarise the Judge’s findings on them. (1) The Widow 40.The Widow dealt with her marriage, the business of the Father and their accommodation. She stated the Father told her he wanted to find a residential building for the family’s accommodation and he found the Kwai Fu Property. The Father told her that he intended to use the defendant’s name to apply for the mortgage loan and she went along with the idea. She dealt with the relationship with the defendant and his wife. She learned later that the defendant’s wife blamed her for asking her to work in the furniture shop that led to her miscarriage. Despite the Father (through a relative) requested the defendant to transfer the property to him, the defendant refused. The defendant seldom met the Father after he moved out. The Father paid for the purchase of the property and its subsequent expenses. 41.In her supplemental witness statement, the Widow said at end of 1986, she went with the Father to the Bank to inquire about the mortgage. The bank staff said that since she and the Father already had mortgaged their other properties, the terms for the new mortgage would not be favourable. Since she had no salary, she could not apply for a mortgage in her name. It was more advantageous for the defendant to apply for the mortgage for the reasons stated by the Father. 42.The Judge found the Widow’s evidence ‘generally unreliable, or at least generally unhelpful’ for the following reasons :
(2) Chuen 43.Chuen said in 1986 when he was 12, the Father told him the whole family would move to the Kwai Fu Property. The Father handled all the matters of the property including payment for its maintenance and his parents treated the property as their home. In his supplemental witness statement, he stated he was at the furniture shop almost every day and he saw his parents paying the staff including the defendant their salary by cash. When the Father purchased the property, he had told the family that the property was theirs. He produced the will of the Father. 44.The Judge found Chuen’s evidence ‘unreliable or at least unhelpful’ because :
(3) The defendant 45.In respect of the defendant’s evidence, the Judge found the defendant’s evidence more reliable because
(4) Lam 46.Lam said the defendant was very busy with the furniture business and it was the Father who went to her home in the Mainland to propose marriage on behalf of the defendant. The Father told her family that he trusted the defendant very much and he was very helpful. The Father told her to be at ease, he would buy a property for the defendant in Hong Kong. She said the Widow was wary of her, fearing she would learn the furniture trade and take away the shop. The Widow still criticized her after her miscarriage. She never heard that the Kwai Fu Property was purchased by way of trust or the reason why the defendant’s name was used. When they moved out, they could not apply for public housing because the Kwai Fu Property was in the defendant’s name. She said the property was a gift to them by the Father as a reward for the defendant operating and making a profit for the furniture business and for their marriage. 47.The Judge found Lam’s evidence ‘even more reliable’ because
(5) Tsang 48.Tsang used to work at the furniture shop. He said that the defendant told him he did not receive a salary for working at the furniture shop and only received tips when he delivered furniture. 49.The Judge found the evidence of the employee reliable because he was a simple and honest person who gave his evidence in a straightforward manner. He was truly independent, as he had no financial interest in the outcome of this action, and he was not related to any of the people featured in this litigation, save and except as an old friend of the defendant. Everything said by him was logical. (6) Chu 50.Chu said the defendant worked at the Father’s shop without pay while the other staff received money. The Father never told him that the Kwai Fu Property was purchased by way of trust in the defendant’s name. He had not heard that there were problems in applying for mortgage. According to her understanding, the property was a reward from the Father to the defendant for his work at the furniture shop and a gift for his marriage. It was also a compensation to the defendant for the Father leaving his family behind in the Mainland and for their suffering there. 51.The Judge found Chu’s evidence reliable.
(7) Yue 52.Yue never heard the Kwai Fu Property is registered in the defendant’s name by way of trust for the Father and it is not the defendant’s property. She had not heard of any problem in borrowing by mortgage. Her husband’s family was well ‑ off and the Father should use her name to buy the property. Everyone knew the Father did not pay a salary to the defendant and when the defendant married, he had to borrow a suit from her husband. When the defendant moved out, he borrowed from her husband $10,000 to buy the wooden hut. 53.The Judge found Yue’s evidence reliable. Her evidence was unshaken in cross‑examination. She gave direct answers that accorded with common sense. She gave direct answers when she did not know something like whether Kuen received his salary. (8) Hau 54.Hau said the defendant did not have money when he got married because he did not have any salary for working at the furniture shop, he had to borrow Hau’s wedding suit in order to take wedding photos. He knew the Father bought the Kwai Fu Property for the defendant. He lent $10,000 to the defendant for him to buy the wooden hut. He never heard from Yue or anyone from the Father’s family that the Kwai Fu Property bought in the name of the defendant is by way of a trust, or that the Father had problem with mortgage or that the Father asked the defendant to transfer back the property to him. 55.The Judge found Hau’s evidence reliable, he was not shaken in cross‑examination. The substance of his evidence was corroborative of the defendant’s evidence. He had not, as suggested by the plaintiff, to have ‘lied or was otherwise an unreliable witness’. 3) The Father’s witness statements 56.By the time of the trial, the Father had passed away. The Judge, after referring to the death of the Father, held :
57.A hearsay notice was issued in respect of the two witness statements of the Father that was made after the commencement of the action. The Judge decided to place no weight on these statements. The Judge held :
4) The Judge’s findings (1) The plaintiff’s case improbable 58.The Judge held that the plaintiff’s case is improbable. He held that there was no agreement as alleged by the Father. He held that the Father intended to gift the Kwai Fu Property to the defendant absolutely and he did. The Father’s allegation of common intention constructive trust ‘was nothing more than an afterthought, and was untrue’. The Judge gave five reasons for his view :
(2) The defendant’s case more likely to be true 59.The Judge held that on balance of probabilities, the defendant’s case was true for three reasons :
(3) Other matters 60.The Judge held that the above should be sufficient to dispose of the claim. He then considered other matters for completeness :
IV. Grounds of appeal 61.The underlining theme of the plaintiff’s appeal is that the findings of the Judge are plainly wrong. He advanced five grounds of appeal which can be summarised as follows :
V. Our view 1) Judgment not sustainable 62.We will say at the forefront that the judgment is not sustainable. In so doing, we are conscious that the judgment is based on finding of facts by the Judge who had the benefit of observing the witnesses and hearing the evidence unfold before him. The ‘plainly wrong’ requirement for overturning findings of fact by a trial judge as stated by Ting Kwong Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 is an extremely high threshold. We are fully aware of the well – established principles in appeal against factual findings urged upon by Mr Shum and Mr Cheung for the defendant, namely, that if the appellate court is not satisfied that the findings are plainly wrong then it should defer to the trial judge’s conclusion, even if there is some doubt as to its correctness, and the burden is on the appellant to demonstrate that the factual conclusion reached by the trial judge is not one that is reasonably open to him on the evidence, despite the advantages he enjoys. The fact that the appellate court ‘may have reached a different conclusion is not a ground for intervention’. The weight of evidence is a matter for the trial judge. See: Benmax v Austin Motor Co Ltd [1955] AC 370, p375 per Lord Reid; Ting Kwong Keung v Tam Dick Yuen (2002) 5 HKCFAR 336, [33] – [37] & [41] – [42] per Bokhary PJ; ZJW v SY [2017] HKFLR 612, [25] – [35] & [44] per Poon JA; Salleh Abu Baker v Anway Ltd [2023] HKCA 187, [27] – [28] per G Lam JA; Yeung Cheung Chun v Wing Shing Caisson & Foundation Ltd (unrep., CACV 39/2015, 25 April 2016), [35] per Kwan JA; and Yu Man Fung Alice v Chiau Sing Chi Stephen [2021] HKCA 1456, [33] per Kwan VP. 63.In our view, this is one of the rare cases that the plainly wrong threshold is satisfied. The Judge’s findings on the primary facts or inferences drawn on the primary facts are vitiated because of his approach in the assessment of evidence, he had ignored relevant matters that are material to the issue in dispute and he had taken irrelevant matters into account. 2) The need to give reasons and adequate reasons 64.We have already referred to some of the unusual features of the judgment below such as the Judge did not summarise the evidence of the Father, the defendant and the other witnesses when the case is centred on the factual contention of the parties and the trial lasted for a lengthy period of six days. We have to resort to the materials placed at the trial in order to properly comprehend and understand the judgment. This leads to the question whether the Judge had discharged his responsibility properly by giving a proper assessment of the parties’ case. Whilst the Judge provided a 33‑page judgment after the trial, when it comes to his decision on the plaintiff’s application for leave to appeal (‘the Leave Decision’), in which it was argued, amongst other things, that the Judge had erred on his approach and had not properly considered many undisputed material facts, the Judge provided a 85‑page decision addressing the points raised by the plaintiff. By so doing, it raises once again the question whether the Judge had properly considered the evidence in the first instance and whether he had given proper reasons for rejecting the Father’s claim. It is appropriate to remind ourselves what Li CJ said in Oriental Daily Publisher Ltd v Commissioner for Television and Entertainment Licensing Authority [1998] 2 HKLRD 857 at page 867 about a Judge’s duty to give reasons in making determination :
65.More recently, the English case of Hannah Louise Rawson v TUI U.K. Ltd [2025] EWHC 2093 (KB), [27] – [28] also addressed the issue on the need to give adequate reasons :
3) Individual grounds 1) No weight on the Father’s witness statements 66.We will start with the Judge’s decision on the Father’s witness statements (Ground 6). The Judge placed no weight on them. Mr Shum submitted that the matter of weight is for the Judge and he referred to Ho Kwok Wing v Chan Mei Mui [2020] 3 HKLRD 548 where this Court held :
67.Whilst it is accepted that because of the Father’s death, the defendant would not be able to cross – examine him and the weight of evidence is usually a matter for a trial judge, in the present case the Judge’s decision means that in effect he has excluded from his consideration the background materials that are relevant to the issue of common intention constructive trust, including those that are not really contentious. The concept has two aspects: the first is based on the express agreement, arrangement, or understanding reached by the parties and the second is based on the conducts of the parties (including the highly relevant factor of financial contribution by the party who is not the legal owner) upon which an inference may be drawn. As this Court held in Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 :
68.The Judge recorded in [28] of his judgment that Mr Leong who relied both on the express agreement between the Father and the defendant and also the parties’ other conduct which ‘remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested’ (emphasis of the Judge). But, by his decision not to place weight on the Father’s evidence, the Judge had left out and ignored facts that include the acquisition was the first time that the Father acquired a residential property for the family to live; they previously lived for many years in the cockloft above the shop in the Ground Floor Property; and the two other properties subsequently acquired were all business properties. The Father’s witness statements also provided evidence of his payment for the purchase of the Kwai Fu Property and his payment for its maintenance and outgoings after its acquisition. Financial contribution by the Father is one of the crucial factors in considering whether the trust has been established. These matters are not disputable. The Father had seven children from his two marriages. Those from his second marriage were still quite young when the Kwai Fu Property was purchased. It is highly relevant to consider this background in assessing whether it is inherently probable that the Father would gift the Kwai Fu Property, which was to be and has remained as the family home, to the defendant out of his many children. 69.This background has also to be considered in the light of the defendant’s evidence that, unlike all other employees in the furniture shop and his elder brother, he was the only one that the Father chose not to pay any wages. Is it inherently probable that an authoritative patriarch with such a bias would suddenly turn around and gift the new property to the defendant as contrast with the scenario of the Father merely asking the defendant to stand as the mortgagor to facilitate the borrowing when the Father was already responsible for the mortgages of two other properties? Would the Father with such a character continue to pay for the mortgage installments so as to ‘perfect’ the gift to the defendant after the disagreements that led the defendant and his wife to leave the Kwai Fu Property? These questions only need to be asked to see how improbable the defendant’s case is. By placing no weight at all on the witness statements, the Judge had excluded from his consideration material facts relevant for his determination. 70.Amongst the reasons given by the Judge that no weight is to be placed on the Father’s witness statements is that they are not contemporaneous records. Of course, these statements only came into existence in preparation for the trial after the commencement of the action. But the witness statements set out the Father’s account of events leading to the purchase and the subsequent events and his demands for the transfer of the property back to him. He produced the contemporaneous documents relating to the purchase and maintenance of the property and the written demands and the defendant’s responses. The demand was first made in 2014 and then in 2020. The demand letters and the defendant’s written replies are clearly contemporaneous in nature and not something that came into existence after the action had commenced. The Judge by placing no weight on the Father’s witness statements had clearly erred by ignoring relevant consideration. The same can also be said about the Judge placing no weight on the Father’s statement in his will about the Kwai Fu Property. The statement must be considered in the light of the Father’s 2014 demand and the defendant’s response. By the nature of the document, one would not expect the Father to go into details about the acquisition of the property in the will. The Judge had resorted to some rather tenuous and trivial reasons for placing no weight on the Father’s evidence. 2) Material undisputed factors ignored by the Judge 71.Mr Leong has set out in Ground 2 of the Notice of Appeal 15 undisputed facts that he submitted would point any reasonable tribunal to the conclusion that the plaintiff’s case is inherently probable and the defendant’s case is inherently improbable. The plaintiff argued that the Judge had ignored these facts :
72.Mr Shum’s response is that the plaintiff is re – running his case at trial that was rejected by the Judge. The 15 items were either immaterial or of peripheral importance; or disputed by the defendant expressly or by contradictory evidence; or they are, in fact, consistent with the defendant’s case. The purpose of an appeal is not to allow a second attempt to re-run submissions on all the evidence with the hope that the appellate court may come to a different view: Skyline Credit Ltd v Leung Hing Chung [2022] 4 HKLRD 561, [39] per Chu JA. It is also improper to pick on isolated pieces of evidence in favour of the plaintiff’s case without regard to the general and other evidence which the Judge preferred in reaching his conclusions: SNE Engineering Co Ltd v Hsin Chong Construction Co Ltd [2015] 4 HKLRD 517, [121]. He referred to the Leave Decision and adopted what the Judge’s view on the dismissal of these 15 items. Items 2, 3 and 4 were said to be immaterial. Items 5, 8, 9 and 10 were said to be irrelevant. Items 1, 6 and 7 were said to be disputed. Items 11 and 12 were said to be in support of the defendant’s case. The Judge had considered the response of the defendant to the Father’s demand letter. 73.Mr Shum submitted that : a) Item (13) of the defendant’s ineligibility for applying for public housing as he owned the property is mooted, as the defendant testified that he never actually applied. The Judge correctly reasoned that when the property was purchased in 1986, the defendant could not predict his future means and thus the defendant had to make a decision as to whether or not to give up his public housing entitlement in exchange for the property (in the defendant’s case) or in exchange for nothing (in the plaintiff’s case). The Judge rightly reasoned that the plaintiff’s case is inherently unlikely; b) Item (14) about the defendant never evicted the Father from the property could not, in any way, prove that the Father was the beneficial owner; and c) Item (15) about the defendant never asked for written records of the constructive trust agreement is again based on a false premise, as the defendant’s case is all along that no such agreement ever existed. 74.We disagree with Mr Shum. We have already referred to some of these matters in relation to the Father’s case earlier. The Judge addressed Ground 2 in [14] – [115] in the Leave Decision. He held that the list is partially false, and partially irrelevant, or at least immaterial. It will serve no useful purpose for us to go into the reasons he provided in the Leave Decision. The fact that the Judge had to go to such length to address and attempt to dismantle these points is an indication that they were not properly considered by him in the first place notwithstanding he said in the judgment that he had taken all relevant matters into account. A judge may give a decision at the conclusion of the hearing, indicate the broad grounds that he had relied upon and later provide the full reasons for his decision. However, it is most unusual and entirely unsatisfactory for a judge to elaborate to such length in a leave to appeal decision of matters that should have been taken into account and properly dealt with in the first place in the judgment. It gives a legitimate complaint that the Judge had not properly focused his attention and exercised his mind when he found against the plaintiff. Amongst these 15 matters, we need only address some of them that have a direct material bearing on the correctness of the Judge’s findings. i) Reaction of the defendant to the pre-action demand letters 75.The first is in relation to the response of the defendant when he received the demands from the Father’s solicitors to transfer the title of the Kwai Fu Property to the Father. The pleaded defence to the Father’s claim is that the property is a gift to the defendant upon his marriage. This is, in any view, a straightforward answer to the Father’s claim. It does not require any complicated reasoning or argument to refute the demand. Yet, in two separate responses within a six – year period, the defendant did not give this clear and simple answer. Instead, in his first response on 11 November 2014 he stated that the money used for the purchase of the property belonged to him. This answer was made in response to the plaintiff’s demand on 4 November 2014 that specifically stated that the property was purchased with monies contributed by the Father and the mortgage money from the Bank; the Father had also paid for the expenses and costs of the acquisition and also all the mortgage repayments as well as the outgoings and expenditure and repair work of the property. The same answer was given by the defendant in his response on 11 January 2021 to the Father’s second demand on 23 December 2020. The defence of a marital gift and a reward to him for working unpaid at the furniture shop only appeared in the Defence dated 11 March 2021. 76.In our view, this defence has all the hallmarks of an afterthought. The original defence that the money for the purchase belonged to the defendant is fundamentally different in nature from the defence of a marital gift and a reward for his work in the furniture business. If the purchase money and other expenses were furnished by the defendant, then no issue of gift from the Father would arise. As often said by the Courts (as the Judge himself recognized) in assessing the issue of credibility, it is a more reliable guide to look at contemporaneous response particularly if recorded in documents rather than the oral testimony of a witness at the trial. Yet, the Judge simply chose to accept the explanation of the defendant that his earlier responses was because he was angry when he received the demands as the Father had treated the money for the purchase as his own without recognizing that the money was earned partly with his efforts. The Judge held that the defendant was focusing on a different matter. But even if the defendant was angry, that was still no explanation why he could not simply state his understanding that the Kwai Fu Property is a gift to him. This is more so when he repeated the same answer six years later (and two months before the assertion of gift in his Defence) when he had more time to reflect on the matter. The explanation is most improbable when both he and his wife had gone into details in their evidence about the Father telling them and assuring the wife’s family about making a marital gift. If the defendant had indeed worked unpaid for the Father for so many years, the business was profitable due to his efforts and he had accordingly believed the business and the purchase price that came out from the business was his, then one would expect him to continue to pursue this assertion rigorously as his defence to the Father’s claim. Yet, he changed tack and adopted a totally different defence. Mr Leong also pointed out that the defendant under cross – examination had given yet another reason for failing to mention the gift, namely he did not want to disclose embarrassing details to his solicitor regarding the miscarriage of his wife. As Mr Leong submitted, this does not make any sense because the property as a marital gift (or for his hard work at the furniture shop) has nothing to do with the miscarriage of his wife. The defendant might have tried to provide an explanation to his earlier responses to the Father’s demands but is the explanation credible at all? In our view, it is inherently incredible and the Judge had failed to properly assess the credibility of this explanation and his finding on this issue is fatally flawed. ii) Ignoring relevant matters and considering irrelevant matters 77.The stark fact is that, notwithstanding the defendant’s contention that the Kwai Fu Property was a marital gift to him, he had been physically absent from the property for 36 years. By the time the defendant and his wife left the Kwai Fu Property, the defendant had only lived there for two years and his wife had only lived there for five months. This is a long absence for someone who is said to be the true owner of the property, during which he had done nothing to assert his ownership. The defendant is not an incapable person who did not know how to assert his rights. The evidence shows that he started speculating in the property market as soon as he started his own furniture business within a year after he moved to the wooden hut. The defendant had, of course, explained why he did not return to the property and why he chose to move out and not to evict the Father from the property that was gifted to him. The Judge accepted the defendant’s evidence that it was out of his filial piety towards the Father. On the issue of the defendant working unpaid, the Judge went to such length as to say that he would do likewise for his own father. The Judge described this as normal and not extraordinary. Whilst a judge may take into account some common facts of life, the Judge had clearly gone beyond this permissible ambit and taken into account irrelevant consideration by relying on his subjective view. The Judge further held that it was normal for parents to want to help their children with purchases of residential properties, especially for marriage purposes. But this will not assist the defendant if his defence of gift is not credible in the first place. 78.In rejecting the plaintiff’s case, the Judge held that the Father’s evidence on the agreement is inherently unlikely because he took the view that the arrangement may amount to a criminal conspiracy to defraud the Bank. As Mr Leong submitted, the Judge had not considered that it had never crossed the minds of the Father and the defendant that the agreement might potentially be a criminal conspiracy. In any event, our case law is full of similar domestic cases like the present one with arrangements between family members acquiring property in the name of one member and the purchase price and mortgage installments paid by another member for reasons unique to their case. Committing a crime or not would be the last thing on their minds when they entered into such arrangements. The Judge had plainly taken irrelevant matters into account. 79.The Judge also held that the Father’s case is inherently improbable because the arrangement would deprive the defendant of applying for public housing. This is another example of the Judge taken irrelevant matters into account because according to the defendant, he only considered applying for public housing in 1988 when he moved to the wooden hut. In other words, at the time of the purchase in 1986, the idea of applying for public housing was not even on his mind. This being the case, how could the defendant’s ineligibility to apply for public housing be a relevant factor to prevent the arrangement from coming into existence? 80.There are other instances of the Judge taken into account irrelevant considerations. He held that the Father, notwithstanding being meticulous in keeping records, did not have any documentary evidence for the trust arrangement. He held that there are no declaration of trust and no handwritten letter. The Judge had ignored the fact that this is a domestic arrangement between members of a family and the Father’s explanation that he only learned that the arrangement was in the nature of a trust when he sought legal advice to take back the property. It is precisely because of the absence of express written documents about holding the property on trust that the principle of common intention constructive trust becomes relevant. (4) The Judge’s approach 81.Mr Leong argued that the Judge had adopted a wrong approach in assessing evidence, in that the Judge decided there was no common intention constructive trust based only on his opinion about who of the Father and the defendant was more credible and undertook no proper investigation of the likelihood, plausibility, probability and reasonableness of the defendant’s story. He ought to have embarked on a proper investigation of the inherent likelihood, plausibility, probability and reasonableness of the respective stories told by the Father and the defendant. (Ground 1) The credibility of witnesses, while being relevant to the Court’s finding of facts, cannot make an otherwise inherently improbable case probable. By allowing this to happen, the Judge palpably erred, reversing the logic undermines the integrity of the fact – finding process. 82.Mr Shum argued that this ground is based on a false interpretation of the judgment that the Judge decided the case on witnesses’ credibility when he should have based his analysis on the ‘inherent likelihood, plausibility, probability, and reasonableness’ of the parties’ cases. He argued that it is important to note that Ground 1 does not challenge the Judge’s finding that the plaintiff’s witnesses are neither credible nor reliable. 83.As shown earlier, the Judge first made findings on the credibility of the witnesses and then the inherent probabilities of the respective case of the parties. The assessment of evidence is a holistic exercise by considering all the circumstances of the case. It is not decided merely by the demeanour or how confident a witness may project in respect of his recollection of events. Whether his evidence is credible is also and often gauged by its inherent probabilities by reference to the background of the case and the available documentary evidence. As Cheung CJHC (now Cheung CJ) observed in Pang Ketian Sally v Tam Yuk Hung Annie (unrep., CACV 147/2013, 25 April 2014) :
See also Lam Rogerio Sou Fung v Tan Soon Gin George (HCA 2576/2005) at [39] per Chu J as she then was. 84.In our view, Mr Leong has made a legitimate point that the judgment does give the impression that the Judge had decided the case based on his view on the credibility of the witnesses. This can be seen when the Judge addressed the inherent probabilities of the Father’s case. He held that :
85.When the Judge accepted that the defendant’s case was true on inherent probabilities, he repeatedly held that he accepted the defendant’s sworn evidence as true. This is a circular reasoning that defeats the purpose of using inherent probabilities to gauge the trustworthiness of the oral evidence. However, what is more problematic is that the matters that the Judge relied upon in his finding on the respective inherent probabilities of the party’s case do not bear scrutiny. We have already addressed the four matters relied upon by the Judge in respect of the Father’s case, namely, the defendant would have lost his entitlement to apply for public housing, the arrangement may amount to a crime, the Judge’s acceptance that the defendant’s sworn evidence was true, and the Father’s lack of written records of the agreement. We have also addressed the matters relied on by the Judge in respect of the inherent probabilities of the defendant’s case, namely, it is normal for parents to help their children to purchase a home for their marriage, the defendant was a filial son, having worked unpaid for the Father for a lengthy period of time and the defendant was getting married, the defendant being a reliable witness and the totality of the evidence. 86.We will deal with the Judge’s findings on the other witnesses. In respect of Chuen and the Widow, the Judge’s finding that the Father might have lied to the Widow is without any evidential foundation. The Widow is the one closest to the Father. Bearing in mind that they had already acquired a property jointly and the Father had another properties registered in his name before the purchase of the Kwai Fu Property, the Judge ought to have asked whether the Widow had provided a credible answer to the reason why the Father suddenly changed their previous mode of purchase and instead acquired the property in the defendant’s name. If she was such a calculating person and was so cautious about safeguarding the furniture business as Lam portrayed her to be, would she have agreed to the Father giving the Kwai Fu Property to the defendant as a gift when her own children were so young? These are objective evidence that points to the inherent probabilities of the plaintiff’s case that the Judge had not properly assessed and instead had relied on some really insignificant reasons in rejecting her and Chuen’s evidence as being unreliable and untruthful. When the Judge criticised them as having no direct knowledge of the arrangement between the Father and the defendant, the same can be said of the defendant’s witnesses as well on this core issue. The evidence given by the defendant’s witnesses on matters such as whether the defendant received a salary during the time he worked for the Father, also could not be based on their personal knowledge. In any event, the issue of whether the defendant had worked unpaid could no longer be of any significance in the light of the way the defendant chose to run his defence as discussed earlier. VI. Other grounds of appeal 87.In respect of Grounds 3 and 4 that challenge the Judge’s finding on the inherent probabilities of the parties’ case, we have already addressed them and it is not necessary to repeat them. 88.In respect of Ground 5 which deals with the plaintiff and the Widow’s witness statements, again many of the matters relied on by the Judge in placing no weight on these statements are peripheral matters. The crux of the plaintiff’s case depends on the evidence of the Father that we accept as true by reference to inherent probabilities. VII. Browne v Dunn 89.In the Leave Decision, the Judge held that the plaintiff had failed to put his case to the defendant and his witnesses in accordance with the requirement in Browne v Dunn. The Judge did not rely on this in his judgment and it is unsatisfactory to only place reliance on it in his Leave Decision. In any event, the rationale of the rule is based on fairness and one should not apply it rigidly and its application depends on the circumstances. As Lord Hodge DPSC of the United Kingdom Supreme Court observed in Griffiths v TUI (UK) Ltd [2023] UKSC 48 :
90.In the present case, when the differences of the parties’ case are already identified in the pleadings and in the witness statements, to strictly require counsel to put to witnesses each and every matter that is not accepted would point to a formulistic approach without regard to the context of each case. VIII. Resulting trust 91.Although the plaintiff had also relied on resulting trust in the Court below, this aspect is not discussed in the judgment. In view of our conclusion on common intention constructive trust, it is not necessary to discuss it in this judgment. IX. Re-trial? 92.Mr Shum referred to Kwan Kwai Lin v Yeung On Ki [2025] 2 HKLRD 170 where Chow JA discussed the issue of re‑trial :
93.We have no difficulties in this case to decide for ourselves that judgment should be entered for the plaintiff for the reasons we have advanced. It is one of the rare cases that on the facts, no reasonable judge, properly directed, would have reached a different conclusion other than the defendant is holding the Kwai Fu Property for the Father by way of common intention constructive trust. X. Conclusion 94.Accordingly, the appeal is allowed, the order of the Judge made on 6 October 2023 is set aside, and judgment is entered for the plaintiff for a declaration that the defendant holds the Kwai Fu Property for the benefit of the estate of the Father by way of constructive trust. XI. Costs 95.The plaintiff is to have the costs of the appeal and below. This includes the costs of the application for leave to appeal both in this Court and below. We will grant a certificate for two counsel for the costs below. It is not necessary to grant a similar certificate for two counsel in this Court.
Mr Alan Leong SC, Mr Alwin Chan and Ms Lily Yeung, instructed by K W Wong & Co, for the Plaintiff Mr Erik Shum and Mr Tommy Cheung, instructed by Lo & Lo, for the Defendant | |||||||||||||||||||||
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