Read the full judgment text of HCA 000193/2002 on BabelCite. This High Court CFI judgment was delivered on 17 November 2004 before A Cheung J.
Property law – New Territories Small House Policy – indigenous villager – nominee/trustee arrangement – beneficial ownership of land and building – declaration of trust – resulting trust – presumption of advancement – illegality of scheme – false statutory declaration and misrepresentation to Government – whether illegality precludes declaration of beneficial ownership – Conveyancing and Property Ordinance (Cap. 219) s.17 – whether s.17 precludes presumption of resulting trust – assignment without consideration – express oral development agreement alleged but disbelieved – whether plaintiff paid $100,000 cash for land – claim for proceeds of sale of small house storeys – plaintiff's claim dismissed – costs order nisi. The plaintiff, an indigenous villager, claimed that the defendant or his development company Bright Wide sold him Lot 1139RP in DD90 Tai Po for $100,000 and orally agreed to develop a small house on it and to account for the sale proceeds. The defendant asserted the plaintiff was a mere trustee of the land holding it for Bright Wide in return for $250,000 paid for the use of his indigenous right. The court preferred the defendant's evidence, finding that no consideration was paid for the assignment, that the plaintiff was a bare trustee for Bright Wide, and that he contributed nothing recognised by law to the building. Whether illegality of the Small House Policy scheme prevented the developer from establishing beneficial ownership: held no. Following Best Sheen Development Ltd v Official Receiver and Tinsley v Milligan, a party to an illegal arrangement may rely on a pre-existing legal or equitable interest without relying on the illegality, and the express declaration of trust or resulting trust is enforceable. The illegal contract explained only the factual origin of the arrangement. Whether s.17 of the Conveyancing and Property Ordinance precludes the presumption of resulting trust where an assignment contains no expression of trust intent: held no. Section 17, based on s.63 of the Law of Property Act 1925, does not alter the common law, and following Ip Man Shan Henry v Ching Hing Construction Co. Ltd (No. 2), resulting, implied or constructive trusts may still apply where the document contains no express declaration of trust. Plaintiff's claim for $4.45 million sale proceeds dismissed; order nisi for costs in favour of the defendant.
Legal issues: Effect of illegality on claim to beneficial ownership under Small House Policy scheme · Effect of s.17 Conveyancing and Property Ordinance on presumption of resulting trust
Outcome: Plaintiff's claim dismissed; plaintiff failed to establish beneficial ownership of the land and building sold by the defendant.
Cited by 42 cases