Lai Chik Chor v. Ng Suet Ying

HCA 67/2024

[2026] HKCFI 5209

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 67 OF 2024

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JUDGMENT

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A. Introduction

1.There are two matters before me.  The first is the Plaintiff’s appeal against the order of Master Lam dated 3 December 2025 dismissing the Plaintiff’s summons dated 2 July 2025 to strike out the Defence and Counterclaim dated 6 May 2025 (“DCC”) under RHC Order 18, rule 19(1). The second is the Defendant’s summons for leave to amend the DCC. This application was taken out after the Master’s order was made. The amendment summons was heard together with the Plaintiff’s appeal.

2.This appeal is a hearing de novo. I have evaluated the submissions made against the draft Amended Defence and Counterclaim (“ADCC”). I take the view that it is more expedient to deal with the striking out application on the facts pleaded in the proposed amended pleading (Kwong Yi Ling v Lau Kwun Leung [2021] HKCFI 2303 at §§9-10 per Linda Chan J). I should record Mr Tsui’s submission on behalf of the Defendant that the proposed amendments were not necessitated by any need to salvage the pleadings, but to provide more particulars and another line of defence.

B.      The Factual Background

3.The Plaintiff’s father is the late Lai Sing (黎昇) (“Father”). Father died in May 2013 and left a will made in 1999. Father had four sons in his first marriage with Madam Yan. The Plaintiff (“George”) is his second son, and Mr Lai Chik Wang (“Danny”) and Mr Lai Chik Yeung (“Johnny”) are the third and fourth sons (collectively, “Three Brothers”). The Defendant is Johnny’s second and current wife. They were married in around 2011. Mr Lai Tai Yuen (“Adrian”) is Johnny’s son born from his previous marriage.

4.Father had a second marriage with Madam Wong. From this marriage, Father had three sons including Mr Lai Chik Sze (“Chik Sze”).  Chik Sze was married to Lai King, and gave birth to Tai Chun.

5.The Defendant is the registered shareholder of the entire issued share capital in Major Crown Limited (“MCL”) and Talent Crown Enterprise Limited (“TCL”). She is also the registered shareholder of 40% of the issued share capital in Golden Treasure (HK) Trading Limited (“GTL”). These companies hold a real property in Hong Kong on Canton Road, in Tsuen Wan and on Kin Wah Street respectively. The Defendant’s shareholding in them will be referred to as “Share One”, “Share Two” and “Shares Three”, and collectively as “Subject Shares”.

6.Father started dealing in Hong Kong real estate from around 1960. His initial purchases were in his own name and from 1987 he started to use various limited companies to hold properties. He later established a Chinese traditional medicine business as a supplementary occupation.

7.On 26 April 1999, Father made a will (“1999 Will”) dealing with estate, including his interests in five companies[1] and one parcel of land.  The 1999 Will was not admitted to probate after Father died in 2013. The reason for this is common ground. Father had already given effect to the 1999 Will through distributions during his lifetime. The documentary evidence records transfers of the shareholding in the various companies in accordance with the proportions stated in the 1999 Will.  There is no dispute that by 2001 the division of Father’s key assets to family members was already complete.  Of course, this was well before he died in 2013. 

8.As to the three companies:

(1)     MCL was incorporated on 27 July 2006. On 8 September 2006, the Defendant, as registered holder of the single issued share, executed a Declaration of Trust in favour of the Plaintiff as beneficiary (the “DOT”) and signed an undated instrument of transfer of that share to the Plaintiff. MCL acquired No. 509 Canton Road (the “Canton Road Property”) on 28 December 2006.

(2)     TCL was incorporated on 3 March 2017 and acquired a property in Tsuen Wan on 5 May 2017. There is no declaration of trust.  The Defendant was made the sole director and shareholder.

(3)     GTL was incorporated on 2 January 2020 and acquired a property on Kin Wah Street Property on 28 July 2021.  The Defendant holds 4,000 of the 10,000 issued shares. There is no declaration of trust.

C.      The Pleaded Cases

9.By his Statement of Claim, the Plaintiff alleges that the Defendant holds each of the Subject Shares as his trustee, that she owes him the duties of a nominee and fiduciary, and that she acted in breach of those duties by covertly offering the Canton Road Property for sale through estate agents in about January 2024. He seeks declarations of trust, consequential orders for transfer and account, and equitable compensation.

10.The DCC admits that the Defendant is a trustee of the Subject Shares. It denies that the Plaintiff is the sole beneficiary, on the basis of a construct of the Defendant’s own coinage, the “Joint Pool”, originally defined as “[t]he shares in the limited companies and the properties identified in the Appendix annexed hereto and the income and proceeds of sale arising thereof”. This was an unusual pleading. The Appendix contains 81 entries, embracing some 41 landed properties (most long since sold) and a large number of companies (several long since deregistered). It is pleaded that after Father’s death, the Plaintiff, Danny and Johnny continued to manage the Joint Pool for the benefit of the beneficiaries in the 1999 Will. The Defendant sought a declaration, by counterclaim, that the Subject Shares are held for the beneficiaries of the Joint Pool, including the Plaintiff, Danny and Johnny, and not with the Plaintiff as the sole beneficiary.  

11.The draft ADCC changes the case in a number of respects.

(1)     First, the trust is now pleaded as a resulting trust in favour of Father’s estate (§§23A, 26A, 27B, 38A), and the Joint Pool is redefined as the shares in the companies listed in §§7 and 27A together with the funds retained by those companies.

(2)     Secondly, the Defendant pleads that Chik Sze’s Family gave up any claim to the Joint Pool and to Father’s estate under an agreement made around July 2007, and the declaratory relief sought in the counterclaim is recast to exclude them.

(3)     Thirdly, the Defendant pleads at §27a of the draft ADCC a common intention formed among the Three Brothers after Father’s death that they would continue to use the Joint Pool in property investment and share the profits so that each might retire at 55 (the “Alleged Common Intention”).  It is said that Danny and Johnny relied on it to their detriment and that it would be “unconscionable, unjust and/or inequitable” for the Plaintiff to renege on it.

12.By way of counterclaim in the draft ADCC, the Defendant seeks a declaration that she holds the Subject Shares for the beneficiaries on Father’s estate except for Chik Sze’s family.  It appears that the first declaration is based on the Defendant’s case on resulting trust. The alternative[2] declaration sought is that the Defendant holds the Subject Shares on trust for the Plaintiff, Danny, Johnny and Adrian.  The second declaration is based on a case relying on the Alleged Common Intention.

D.      The Applicable Principles

13.The power to strike out is to be exercised only in plain and obvious cases. Where the case is plainly apt for striking out, it should not decline to do so merely because the issues are difficult or complicated.  Where the application to strike out is on the basis that there is no reasonable cause of action, the facts pleaded in the claim must be assumed to be true.  Further, on any other basis for striking out, disputed facts are to be taken in favour of the party sought to be struck out (Convoy Global Holdings Ltd v Kwok Hiu Kwan [2022] 1 HKC 551 at §28 per Kwan VP).

14.A pleading can be struck out if it is plain and obvious that the case pleaded has no factual basis, or has no solid basis capable of proof and is a ‘myth with no substantial foundation’, or presents a ‘tissue of improbabilities’ which ought to be sent to proof. The court is not bound to accept an allegation as true and proceed on a fictional basis if it is something which can clearly be shown to be incontrovertibly false (Chu Yue Ben v Lai Shiu Woon [2021] HKCA 1929 at §35(1) per Kwan VP, citing Lam Kit Sing v Chungshan Commercial Association Hong Kong (HCA 2011/2014, 29 June 2016) at §18 per G Lam J (as he then was).

15.Even if a strike out application, the court does not blithely accept the affidavit evidence of the resisting party. If, having regard to the contemporaneous documents, inherent probabilities, and other compelling evidence, the affidavit evidence is incredible, the court would not be slow to exercise its power to strike out the claim. The court would approach the matter from a commercial and common sense point of view and not lose sight of the overall picture presented to the court (Convoy Global Holdings Ltd v Cho Kwai Chee Roy [2018] HKCFI 2111 at §7 per Harris J).  

16.In my analysis below, I have borne in mind the high standard applicable on a strike out application and that the role of the court is not to resolve genuinely disputed questions of fact at an interlocutory stage.

E.      The Declaration of Trust

17.I first deal with the case concerning Share One in MCL which holds the Canton Road property.  The Defendant holds MCL on express trust for the Plaintiff under a Declaration of Trust dated 8 September 2006 (“DOT”) executed by the Defendant as trustee.  As Ms Lok SC pointed out, the validity of the DOT is not challenged by the Defendant. Under the DOT, the Defendant unequivocally declared that she held Share One upon trust for the Plaintiff as his nominee.  Under Clause 2(i) of the DOT, the Defendant agreed to ‘transfer pay and deal with the said share or shares and all dividends and interest payable in respect of the same in such manner as the Beneficiary shall from time to time direct’.

18.Express trusts are created by the actual intention of the settlor that the person holding the legal interest in the property should take it subject to the beneficial entitlement of another (Snell’s Equity, 35^th ed., §25-001).  By contrast, a resulting trust is a creature of presumed intention. If the settlor has expressly, or by necessary implication, abandoned any beneficial interest in the trust property, there is no resulting trust (Westdeutsche Bank v Islington LBC [1996] AC 669, 708D per Lord Browne-Wilkinson).

19.The Defendant’s case is that Share One is held by her on resulting trust for Father’s estate.[3] Father provided the consideration for the acquisition of Share One from the Joint Pool and therefore it beneficially belonged to his estate.[4] Father directed the Defendant to execute the DOT on 8 September 2006 on the understanding that any right acquired by the Plaintiff was to be held as Father’s nominee and subject to Father’s instructions.[5]

20.In my view, the clear express terms of the DOT are inconsistent with the trust alleged by the Defendant.  Moreover, as pointed out by Ms Lok SC, on the Defendant’s own case it was Father who directed the Defendant execute the DOT. In other words, it was the very person who stood to benefit from the alleged resulting trust who directed the creation an express trust in the Plaintiff’s favour as beneficial owner. Taken together, in my view, these matters are the clearest indication of Father’s intention that the beneficial ownership of Share One should vest with the Plaintiff.

21.I take the view that the Defendant’s case is an impermissible collateral challenge to the contents of an express declaration of trust by raising a common intention constructive trust or resulting trust which was inconsistent with the express trust (Goodman v Gallant [1986] Fam 106; Pan Haifei v Tai Karen Kai Lun [2026] 3 HKLRD 718 at §§168-171 per DHCJ Andrew Li).

22.I am also of the view that the Defendant’s case that any right the Plaintiff acquired under the DOT was held as Father’s nominee and subject to Father’s control and direction does not salvage the case.  Taken at its highest, it creates a sub-trust through which the Defendant holds Share One on trust for the Plaintiff and then the Plaintiff holds his equitable interest for Father and then now his estate.  Critically, even on this version of the case, the Defendant is still a trustee holding Share One on behalf of the Plaintiff. Her case concedes the very thing that forms the foundation of the Plaintiff’s case, namely that the Plaintiff is the beneficiary under the DOT.

23.I am afraid to say that Mr Tsui did not really cross swords with Ms Lok SC (either in written or oral submissions) on her principal objections to explain why the defence in relation to Share One should not be struck out.  The lack of direct engagement with the arguments advanced by Ms Lok SC permeated throughout the other issues discussed in this judgment.

24.For the above reasons, I take the view that this is a plain and obvious case where the Defendant’s defence on Share One is unsustainable, without foundation and should be struck out.  The reasoning above based on the DOT applies to Share One because it was subject to an express declaration of trust but the discussion below on the alleged resulting trust applies to it as well.

F.      The Alleged Resulting Trust

25.I now proceed to consider the Defendant’s case on the alleged resulting trust in relation to the Subject Shares.  The reasoning below is applicable to the Defendant’s case with respect to all of the Subject Shares, including Share One.  It has unique significance to Share Two and Shares Three because they are not the subject matter of an express trust, unlike Share One. 

26.At the core of the Defendant’s case is the suggestion that the acquisition of the properties held by MCL, TCL and GTL were funded by the Joint Pool.  This is said to support her case that a resulting trust over the Subject Shares arose in favour of Father.  It is important, however, to look at the factual basis on which this resulting trust is said to arise. Crucially, the uncontradicted evidence before the court is that Father had already distributed his assets by 2001 during his lifetime.  This can be seen from the affidavit evidence from various family members cited by Ms Lok SC, and from the distributions made in accordance with the 1999 Will. 

27.The relevant primary evidence has been helpfully set out in Ms Lok SC’s Skeleton Argument which is not in dispute. It seems to me to be clear that the distribution of Father’s significant assets was complete in 2001 which was well before MCL, TCL and GTL were acquired.  Accordingly, I agree with Ms Lok SC that any suggestion that Father had substantial assets to fund the relevant acquisitions is inconsistent with the undisputed evidence.  There is no factual foundation for a resulting trust to arise in favour of Father which would require him to have funded the acquisitions. 

28.Relatedly, I agree with Ms Lok SC that the alleged existence of a “Joint Pool” is not a sustainable basis to claim that a resulting trust arose in favour of Father’s estate.  This is so even assuming that the acquisition of the Subject Shares came loosely from such a pool of assets. Even on the Defendant’s pleaded case, the “Joint Pool” does not comprise solely of Father’s assets nor is there a clear segregation of assets within it.  How this “Joint Pool” is tied to Father’s estate is unclear. Moreover, the definition the Joint Pool has been redefined as the shares in the companies listed in §§7 and 27A of the draft ADCC together with the funds retained by those companies. This definition does not inform the ownership of the funds within that pool of assets.  Overall, it seems to me that this is not only a convoluted pleading but it is fundamentally defective.

29.There is also considerable force in Ms Lok SC’s submission that the terms of the resulting trust with the beneficial owner being Father is starkly inconsistent with her own affirmation evidence.  Both the Defendant and Johnny have previously filed affirmation evidence confirming that the Subject Shares were held on trust for the Three Brothers, not Father’s estate.  In my view, this is not a minor detail or a matter which goes to credibility only.  It goes fundamentally to who is alleged to be the beneficial owner of the Subject Shares.  I do not agree with Mr Tsui’s submission that this is only an inconsistency between an affirmation and pleading which should be explored at trial. 

30.For these reasons, I consider that the defence based on the allegation that the Defendant held the Subject Shares on resulting trust for Father’s Estate to be unsustainable and contrary to the undisputed evidence.  

G.      The Alleged Common Intention

31.The Defendant then relies on the Alleged Common Intention to support a finding of trust in favour of Father’s Estate, and pleads at §39D of the draft ADCC that it is “unconscionable, unjust and/or inequitable” for the Plaintiff to renege on the Alleged Common Intention.  To recap, the allegation is that an understanding was formed among the Three Brothers after Father’s death that they would continue to use the Joint Pool in property investment and share the profits so that each might retire at 55. This definition appears at §27a of the Draft ADCC.

32.First, I take the view that this irreconcilable with the primary case. The primary case is that the whole pool, including everything acquired after 2013, was and remains held on resulting trust for Father’s estate. The alternative is that after Father’s death the Three Brothers agreed among themselves to use the pool to prosper the family business and share the profits, with a view to retiring at 55. Those cases cannot both be true. Assets held on a subsisting resulting trust for a deceased man’s estate are not available for three of his sons to agree to share among themselves, and an agreement to share profits is not an acknowledgment that the capital belongs to somebody else. A pleader may of course plead in the alternative. What a pleader may not do is advance two mutually inconsistent versions of primary facts which lie within her own knowledge.

33.Second, there is also a further fundamental problem with the Defendant’s case on the Alleged Common Intention.  The Defendant is simply not a party to the pleaded understanding which is said to have been an intention formed among the Three Brothers themselves. None of them are parties to this action.  The Defendant was not party to the Alleged Common Intention and pleads no reliance of her own.  I am unable to see how the Defendant is entitled to claim for relief based on an alleged common intention in such circumstances. What is pleaded at §39A of the draft ADCC is alleged acts of detrimental reliance on the part of Danny and Johnny, not herself.  If the Alleged Common Intention gave  rise to equities, it is unclear to me how the Defendant could avail herself to them.

34.Mr Tsui sought to respond to Ms Lok SC’s attack on the case based on the Alleged Common Intention by arguing that the question is, on the basis of the case as pleaded by the Defendant, whether the court would be prepared to allow the Plaintiff to have complete right over the Shares to the exclusion of Johnny and Danny who could be joined into the present action.[6]  This appears to be an implicit acceptance that Johnny and Danny would be proper parties. With respect, this ‘wait and see’ suggestion is not a satisfactory approach.  Either the basic elements of a common intention constructive trust have been made at the pleading stage, or they have not.  And the court cannot be expected to allow a case to proceed on the speculative notion that there might be a joinder application in the future: it must judge the case as it stands before the court.

H.      The Counterclaim & Declarations Sought

35.In my view, the problems with the draft ADCC do not stop here. They spiral across the relief sought. The counterclaim seeks two declarations. The first is that the Defendant holds the Subject Shares for the beneficiaries of Father’s estate other than Chik Sze’s Family, and not with the Plaintiff as sole beneficiary (“Declaration 1”). The second is that she holds them for the Three Brothers and Adrian (“Declaration 2”).  Each is premised on a case which I have held to be unsustainable, and each therefore falls with it. But each is also independently objectionable.

36.The requirements for declaratory relief are settled. The applicant must (i) show a real interest in the subject matter of the declaration (ii) a real interest in obtaining a declaration against the adverse party; and (iii) that the adverse party is a proper contradictor (Convoy Global Holdings Ltd v Kwok Hiu Kwan at §29 per Kwan VP). A proper contradictor is a person with a true legal interest in opposing the declaration who therefore needs to be bound by the result. The rationale is to ensure both that the Court has the relevant material and, more importantly, that there is a proper person to be bound (Raafat Imam v Life (China) Co Ltd [2018] 4 HKLRD 152 at §§66-67).  Moreover, a declaration serving no practical purpose will not be granted and is liable to be struck out (Equis (Hong Kong) Ltd v George Allen Cowan [2021] HKCFI 768 at §§39, 51).

37.It is plain to me that Declaration 1 does not satisfy these requirements. The Defendant is a trustee. She is not a beneficiary of Father’s estate and asserts no interest of her own. Accordingly, she has no real interest in obtaining a declaration as to who the beneficiaries of that estate are.  There is no grant of representation and no personal representative before the court, and before administration is complete those interested under a will or an intestacy have no proprietary interest in any particular asset but merely an inchoate right coupled with the right to compel due administration (Williams, Mortimer & Sunnucks, Executors, Administrators and Probate (22nd ed) §§30-07, 72-03). A declaration in favour of a class described as “the beneficiaries of the estate of Father” would therefore be of no utility.

38.The exclusion of Chik Sze’s Family compounds the difficulty.  The Defendant asks the Court to declare that three named individuals who are admittedly among the objects of the 1999 Will are not entitled, on the basis of an unparticularised agreement of about July 2007 to which she was not a party.  Chik Sze’s Family are not parties to this action and would not be bound by any declaration made in it.  Stripped of its language, it is an attempt to disinherit three absent individuals without having heard them. The proper contradictor requirement exists precisely to prevent that, and to seek such relief is an abuse of the process.

39.Declaration 2 fails for the parallel reason that it would determine the beneficial entitlements of Danny, Johnny and Adrian in their absence, at the suit of a trustee who has no interest of her own in the answer and against a party who is not a proper contradictor of their claims. It is not an answer to say that there might be a future joinder of parties to salvage the claim.

40.There is a final matter which I mention because it is relevant to abuse. Across the DCC and the draft ADCC the Defendant has advanced three different sets of beneficiaries. The beneficiaries of the Joint Pool including the Three Brothers; the beneficiaries of Father’s estate excluding Chik Sze’s Family; and the Three Brothers and Adrian. The only constants are that the Plaintiff is never the sole beneficiary and that Johnny, the Defendant’s husband, is always among the beneficiaries.  Viewing the matter in the round, I agree with Ms Lok SC’s submission that it appears that the Defendant is unsure who the beneficiaries of the Subject Shares actually are on her own pleaded case. 

I.      Disposition and costs

41.For those reasons I make the following order:

(1)     The Plaintiff’s appeal against the order of Master Lam dated 3 December 2025 is allowed and that order is set aside.

(2)     The Defence and Counterclaim dated 6 May 2025 is struck out in its entirety pursuant to O.18, r.19(1).

(3)     The Defendant’s summons dated 27 February 2026 for leave to amend the Defence and Counterclaim is dismissed.

42.I make a costs order nisi that the Defendant pays the Plaintiff the costs of this appeal, the Plaintiff’s summons of 2 July 2025, and the Defendant’s summons dated 27 February 2026, to be taxed if not agreed, with certificate for two counsel.

Ms Frances Lok SC leading Ms Regina Yip, instructed by Messrs Yick & Chan, for the Plaintiff

Mr Raymond WN Tsui, instructed by Messrs Au, Thong & Tsang, for the Defendant