Read the full judgment text of CACV 000041/2005 on BabelCite. This Court of Appeal judgment was delivered on 28 October 2005 before Cheung JA, Tang JA, Lam J.
Civil appeal – resulting trust – property law – sub-sale agreement – plaintiff YUEN YAT SHAN FIONA (formerly known as YUEN CHUI KING) purchased uncompleted flat D, 36/F, Tower 9, Park Avenue, No.18 Hoi Ting Road, Kowloon from MTR Corporation Ltd under agreement dated 30 August 2000 for $4.452 million, partly financed by $1.2 million mortgage from American Express Bank – property market value dropped to between $3.9 million and $4.1 million by 2001 – plaintiff entered sub-sale agreement dated 7 June 2001 (following provisional agreement on or about 31 May 2001) with defendant SIT HIN KAU to sell property for $3.95 million – plaintiff acknowledged receipt of $2.67 million deposit and part payment in both provisional and sub-sale agreements – balance of purchase price to be paid by defendant to American Express Bank in discharge of mortgage – on same date, plaintiff gave irrevocable Power of Attorney to defendant effectively ceding all control over property – recital in Power of Attorney stated receipt of $2.67 million – defendant subsequently sold property for $3.9 million by agreement dated 16 June 2001 – common ground defendant did not pay $2.67 million to plaintiff – plaintiff's pleaded case was that defendant was required to redeem mortgage and pay HK$3,170,000 (deposit plus $500,000 interest) to plaintiff within one year of completion – plaintiff alleged agreement made partly orally in May 2001 between plaintiff and Ho Kar-lun Benson as agent for defendant – defendant's amended defence alleged set-off agreement whereby defendant's claim of $1.5 million against Ho's indebtedness was relinquished and defendant would lend further $1.17 million to Ho who would pay plaintiff instead – all expenses including legal expenses to be set off and deducted from purchase price – trial judge rejected plaintiff's evidence and accepted defendant's – no appeal from this finding – plaintiff raised resulting trust by late amendment at trial alleging defendant held property on resulting trust for plaintiff by operation of law and liable to account for HK$2,701,162.27 from net proceeds – whether resulting trust arose in plaintiff's favour – two categories of resulting trust per Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 – (A) voluntary payment to B or payment for purchase of property vested in B gives rise to presumption of resulting trust rebuttable by counter-presumption of advancement or direct evidence of intention to make outright transfer – Vandervell v IRC and In re Vandervell's Trusts (No. 2) – (B) transfer to B on express trusts not exhausting whole beneficial interest – Quistclose Investments – both types give effect to common intention – resulting trust gives effect to presumed intention, not imposed against trustee's intention – per Drake v Whipp [1966] 1 FLR 826, where sufficient evidence of actual intention at time of transaction exists, presumption of resulting trust has no room to operate – apparent inconsistency with Lewin On Trusts resolved – Lewin's observation that resulting trust may arise even where transferee unaware merely addresses transferee's liability not existence of trust – innocent receipt of property subject to existing equitable interest does not by itself make recipient a trustee absent requisite knowledge – In re Diplock and In re Montagu's Settlement Trusts – on facts, plaintiff intended to make outright transfer of all her interests to defendant – not presumed intention of either party that plaintiff should retain interest – trial judge's finding that plaintiff was looking to Ho for repayment meant no question of resulting trust could arise – appeal dismissed – order nisi that defendant have costs of appeal to be taxed if not agreed
Legal issues: Whether a resulting trust arose on transfer of property without payment by transferee
Outcome: Appeal dismissed
Cited by 2 cases · Cites 1 case