Chan Shee Yuen v. Chan Shu Fong
Read the full judgment text of HCA 93/2002 on BabelCite. This High Court CFI judgment was delivered on 28 April 2006.
1. This is an action in which the plaintiff in the original writ, the late Chan Shee Yuen claimed against his brother, Chan Shu Fong (the “Defendant”), inter alia, (1) damages for loss of use of a piece of land (the “Property”); (2) an order for an account of and enquiries into the Plaintiff’s share in the rents, profits or other income arising or derived from the Property since July 1998; (3) an order for the partition of the Property or alternatively, an order for sale; and (4) an order restra
Cited by 12 cases
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HCA 93/2002 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 93 OF 2002 ____________ BETWEEN
AND BETWEEN
____________ Before: Deputy High Court Judge To in Court Dates of Hearing: 27 - 30 March 2006 and 3 April 2006 Date of Judgment: 28 April 2006 _______________ J U D G M E N T _______________ Introduction 1.This is an action in which the plaintiff in the original writ, the late Chan Shee Yuen claimed against his brother, Chan Shu Fong (the “Defendant”), inter alia, (1) damages for loss of use of a piece of land (the “Property”); (2) an order for an account of and enquiries into the Plaintiff’s share in the rents, profits or other income arising or derived from the Property since July 1998; (3) an order for the partition of the Property or alternatively, an order for sale; and (4) an order restraining the Defendant from ousting the Plaintiff from the Property. The Defendant counterclaimed for a declaration that the Plaintiff held his share of the interest in the Property as trustee for the Defendant. 2.Chan Shee Yuen died shortly before the trial commenced. The action was ordered to continue with his son, Chan Sek Lam, as the executor of the estate against the Defendant. Background 3.Chan Shee Yuen and the Defendant were brothers. Their father, Mr Chan Choy, (the “Father”) was a native of Toishan in China who left for the United States in 1920s to work as a carpenter on board ocean- going vessels. The Father had a kit-fat wife; Chu Shi who died leaving two issues; Chan Shu Wing and Chan Shu Tak who migrated to the United States in 1948. The Father married Madam Tang Ngan Fung (the “Mother”). Out of that wedlock, were born Chan Shee Yuen, the Defendant, Chan Shu Chun, Chan Shu Nam and Chan Shu Yuk who predeceased the Father at the age of nineteen leaving no issues. 4.In the 1940s, the Father bought some properties in Toishan, including two houses in the countryside and several dozen acres of farmland. In about 1950, the Father retired to live in Toishan. He bought a house in town for HK$40,000. 5.In 1954, the Father fled from Toishan alone via Guanzhou. Presumably, as a result of the land reform and class struggle under the then Communist rule, the Father’s farmland and the countryside houses were confiscated and the Mother was put in prison for being a landlord. Under that setting, the Defendant came to Hong Kong in late 1954, followed by Chan Shee Yuen in 1955. 6.Upon arrival in Hong Kong, the Father lived with his clansmen in Sham Shui Po. Shortly after the Defendant’s arrival, they moved to 1Tuen Mun. Two years later, on 11 September 1956, the Father entered into a deed of agreement to purchase the Property. The conveyance on sale was completed with the Property registered in the Father’s name in the District Office. The purchase price for the Property was $3,000. In the following year, the Father built a stone house in the Property. Chan Shu Chun came to Hong Kong in 1957 and was followed by Chan Shu Nam and the Mother in 1958. Upon their arrival, they all lived in the Property until they had other arrangements later. 7.On 6 February 1960, the Father died intestate. The Defendant filed an application with the District Office for succession to the Property. On 8 December 1960, the application was approved by the District Officer (the “1960 Succession”) and the Defendant became the registered owner of the Property. By a deed of gift dated 13 October 1981 (the “1981 Deed of Gift”), the Defendant assigned three-fifths of the interest in the Property to each of his siblings, retaining two-fifths of the interest to himself. 8.Chan Shu Chun and Chan Shu Nam had moved out of the Property in 1980 and later migrated overseas. Chan Shee Yuen lived in the stone house in the Property until 1991 when he returned to China. Upon his return several months later, he was excluded from the Property by the Defendant. The Property was since solely occupied by the Defendant and his family. Since July 1998, part of the Property had been rented by the Defendant to a coach operator, Yeung Ming Hin, as a car park for about HK$7,000 a month. 9.Chan Shee Yuen commenced action in the Small Claims Tribunal under Claim No SCTC39787 of 2000 against the Defendant for a share in the rental income from the Property in 2000. Then he commenced the present action on 9 January 2002. Preliminary issue: the issue of joinder 10.When the trial commenced, Mr Siu, counsel for the Defendant, made an application to determine as a preliminary issue whether the other siblings should be joined as parties to the action. He submitted that if my answer to that question be in the affirmative, the Plaintiff’s action must be dismissed or adjourned for direction as to the further conduct of the proceedings. 11.Mr Siu’s argument was as follows. The Father died intestate leaving altogether six children, two by the former marriage to Chu Shi and four by the marriage to the Mother. Hence, he argued that all the surviving siblings, half-siblings and the issues of those deceased siblings and deceased half-siblings had an interest in the Property and should be joined as parties to these proceedings. He further argued that it was unjust and inequitable to dispose of the interest of the other siblings and half siblings who are not parties to this action and for the Court to make any orders which are binding on them. He relied on Order 15 rule 6(2)(b)(i) and section 3 of the Partition Ordinance (Cap 352). 12.In my view, Mr Siu’s argument was founded on false premises. This is not an action in respect of the estate of the Father. The Plaintiff’s action is not founded on his right under the intestacy of the Father, but on the 1981 Deed of Gift signed by the Defendant. The question of the siblings’ and half-siblings’ right under the intestacy of the Father is irrelevant. The Plaintiff is not disputing the legality of the Defendant’s 1960 Succession to the Property nor is the Defendant. The Plaintiff is not seeking to set aside or to challenge the validity of the 1981 Deed of Gift. Nor is the Defendant. It is indeed common ground that the 1960 Succession and the 1981 Deed of Gift are all valid. Thus, the legality of the Succession and the validity of the 1981 Deed of Gift are non-issues in these proceedings. None other than those who were parties to the 1981 Deed of Gift need be made a party to these proceedings. 13.In the light of the parties’ pleadings Order 15 rule 6(1) does not avail him. That rule provides:
14.This is a litigation between the Plaintiff and the Defendant founded on the 1981 Deed of Gift and on the basis that the 1960 Succession and the 1981 Deed of Gift were valid. The half-siblings are not parties to the 1981 Deed of Gift. There is no issue or matter in dispute between the half-siblings and the parties in respect of the 1981 Deed of Gift which requires a determination or adjudication as to justify them to be joined as parties to this litigation under Order 15 rule 6(2)(b)(i). Even if the half-siblings might have an interest in the Property by reason of the intestacy so that as between them and the Plaintiff or the Defendant there might exist a question or issue arising out of or relating to or connected with any relief or remedy claimed in this action, in the light of the pleadings, it would not in my opinion be just and convenient to have the issues determined as between any of the half-siblings and either of the parties to the cause or matter. There is no need to join the two half-siblings or their issues in this action. The outcome of this litigation has no bearing on the half-siblings and their issues and will not bind them. If indeed they have an interest in the Property under the Father’s intestacy, they can bring an action against the Defendant in respect of the 1960 Succession or against the Defendant, the Plaintiff and their two siblings as co-owners of the Property under the 1981 Deed of Gift. They are not necessary parties to these proceedings. 15.As for the other two siblings, they gave evidence before me. Both of them clearly indicated their unwillingness to join as a party and had no objection that the Property be partitioned or be sold or if no order was made. They understood clearly that not being a party to the proceedings, they had no claim to any share in the rent or other profits arising out of the Property since July 1998. They have been explained and were fully appreciative of the principle of issue estoppel that if the Defendant should succeed, they might be estopped from disputing that they hold their one-fifth share of the Property on trust for the Defendant for remaining silent while knowingly watch the Defendant asserting a right over their share of the interest in the Property. Chan Shu Chun said he would wish to have a share in the proceeds of sale of the Property if an order for sale was made. Chan Shu Nam indicated that he would not care whether he received any share in the proceeds of sale. They are persons within rule 6(2)(b)(ii) who may be joined as parties. 16.However, the Court’s power to join any person either upon application by that person or by the parties to the proceedings or at the Court’s initiative, is a discretionary one. In exercising its power, the Court must bear in mind the wishes of those persons to be joined and more importantly whether it is necessary, just and convenient to have him joined. In view of the wishes and attitude of both Chan Shu Chun and Chan Shu Nam, I think it is not necessary to have them joined as parties. They had no objection to an order for partition or sale, save that in relation to Chan Shu Chun he expressed that if an order of sale was made he would wish to be given his due share of the proceeds of sale, an order which I would be duty bound to make if I were to make an order for sale. They indicated in unequivocal terms that they did not wish to be made parties to the proceedings. There is no need for them to be joined as parties to these proceedings and there is nothing to be gained by doing so. It would not be just and convenient to order a joinder as that would only result in delay and in unnecessary costs to the Plaintiff, the Defendant as well as the unwilling siblings themselves, which would achieve nothing. Order 15 rule 6(1) expressly preserves an action from being defeated by the misjoinder or non joinder of parties. In the circumstances, I do not think it is necessary, just and equitable that the siblings should be joined as parties to the proceedings under Order 15 rule 6. 17.Lastly, Mr Siu submitted that section 3(3) and section 3(4) of the Partition Ordinance (Cap 352) must be read together with the result that the existence of other interested party is not a matter which the Court should not be concerned. Section 3(1) to 3(4) provide as follows:
18.Of course, in construing an Ordinance, the Ordinance must be read as a whole. However, by no reading of the section and the Ordinance as a whole can it give rise to the suggestion that anyone interested in a property subject to an application for partition must be joined. Quite on the contrary, on a true construction, subsection (1) permits any person interested in the property to institute proceedings and subsection (3) expressly permits proceedings under the Ordinance to be instituted against one or more of the persons interested in the property without serving the other interested persons and that no defendant may object for want of parties. The power of the Court under subsection (4) to direct inquiries as to the nature of the property, the persons interested therein and other matters and to add any person as a party is phrased in discretionary and not mandatory term. Furthermore, this power is only exercisable subject to necessity. From these provisions, it is amply clear that the intent of the legislature is that any co-owner of a property, whether as a joint tenant or tenant in common may institute proceedings against another co-owner without joining any or all of the other co-owners. The Court’s discretion to join other co-owners as parties may only be exercised if it is necessary, proper or desirable. 19.In considering whether it is necessary, proper or desirable to join in any other co-owner, the Court must have regard to all the likely consequences of the trial. In an action under the Partition Ordinance, the Court may order partition under section 4 or sale under section 6 or may make no order. 20.Under section 4(1), the Court may make an order for the partition of property in land. The section does not prohibit the Court from making an order for partition if any person interested has not been made a party. The only prohibition is to be found in section 4(3), which provides that no order for partition shall prejudice any person other than a party to the proceedings. Thus if a co-owner has no objection or agrees to partition, an order for partition is not prejudicial, especially if the Court has taken into consideration his interest when giving necessary or proper consequential directions in giving effect to the order. Chan Shu Chun and Chan Shu Nam have no objection to an order for partition. So long as their interests are taken care of when giving consequential directions, an order for partition may nevertheless be made without making them parties to these proceedings. 21.Section 6 gives the Court very wide discretion in making an order for sale. If it appears to the Court that a partition of the property would not be beneficial to all the persons interested by reason of the nature of the property, the number of persons interested or presumptively interested, the absence or disability of some of the persons interested or any other circumstances, the Court may make an order for sale notwithstanding the dissent or disability of any person interested. The Property is a lot of about 13,200 square feet according to the Defendant. It would have to be partitioned into four parcels. Except for the parcel to be allocated to the Defendant, the size of the remaining three parcels would be approximately 2,640 square feet each. Even without the benefit of expert opinion, it is apparent that small plots of farmland of this size would practically be of little use or value. Besides, there will be problems in providing individual or common access to all the parcels. Partition is unlikely to be beneficial to all the persons interested. An order for sale is in all probability the likely order to be made, if at all. As an order for sale may be made notwithstanding the dissent of any person interested, it is not necessary for Chan Shu Chun and Chan Shu Nam to be made a party to these proceedings, especially as they have no objection to an order for sale. 22.In the circumstances, in view of the stance and attitude of Chan Shu Chun and Chan Shu Nam, whatever the outcome of this trial, it is not necessary, proper or desirable to have them joined as parties to this action. Joining them as parties would only occasion unnecessary delay for the parties and unnecessary costs for everyone. Accordingly, I make the preliminary ruling that the action may proceed without joining Chan Shu Chun and Chan Shu Nam as parties. I expressly refrain at this stage from making any finding whether it is just and equitable to dispose of their interest in the Property without making them a party to the proceedings. I reserved costs. 23.Following my ruling Mr Siu sought an adjournment to enable the Defendant to appeal to the Court of Appeal against the above ruling. Both the Court of Appeal and the Court of Final Appeal have confirmed that interlocutory appeals are to be strongly discouraged as such appeals are undesirable and disruptive. Mr Siu advanced no grounds to justify why these proceedings should be disrupted by an interlocutory appeal except that he disagreed with me as to the law. He could cite no authority showing that I have erred in principle such that it is appropriate for the Court of Appeal to intervene. In my opinion, this trial should be allowed to run its course. Should there be an appeal, the Court of Appeal should have the benefit of a proper finding of fact from the court below. I therefore dismissed the application with costs. The parties' case, burden of proof and the issues 24.The Plaintiff's pleaded case is that he received one-fifth share in the Property based on the 1981 Deed of Gift. His burden therefore is to prove the Deed, its due execution and its validity. On the pleadings, these matters are not in dispute. Hence, the Plaintiff has no burden to discharge. 25.The defence is that the Property was purchased by the Defendant with his own money, but as he was then not of full age and capacity the Father purchased and held the Property under a resulting trust for the Defendant. Thus, the Defendant acquired title to the Property by the 1960 Succession in his own right as the beneficial owner of the Property for having provided the funds for its purchase. He then assigned one fifth interest in the Property to each of his siblings under the 1981 Deed of Gift at their request for the purpose of enabling them to obtain resettlement or compensation in the event of a possible resumption of the Property by the Government and on their representation that they would not claim any legal interest to the Property. Hence, the Defendant’s case is that Chan Shee Yuen as well as the other siblings each held one-fifth of the interest in the Property on trust for him. He counterclaimed against the Plaintiff for a declaration to that effect. Thus the Defendant bore the burden of proving the two trusts, i.e. proving that he provided the purchase money for the Property in 1956 and the Plaintiff’s representation which resulted in his executing the 1981 Deed of Gift. In my view, these are the issues in this case. 26.However, Mr Siu took a different view. He vehemently repeated his views made in the preliminary issue. He argued that the Plaintiff’s claim is ill-founded. He reiterated that the Plaintiff relied on the 1981 Deed of Gift which in turn depended on the legality of the chain of title, including the 1960 Succession. Hence, he submitted that it was open to him to challenge the chain of title relying on the rule in nemo dat and that upon such a challenge it was incumbent upon the Plaintiff to prove that the assignment was good and the 1981 Deed of Gift was valid otherwise the Plaintiff could not derive any interest or title from it. 27.In setting out the Plaintiff’s pleaded case and the Defendant’s pleaded defence above, it is clear that the validity of the 1960 Succession and the 1981 Deed of Gift is common ground and not in dispute. In answer specifically to my question, Mr Siu unequivocally confirmed that the Defendant’s stance was that the 1960 Succession was lawful. That is understandable because the Defendant derived title to the Property by reason of the 1960 Succession. Mr Siu also had no dispute that the 1981 Deed of Gift was valid. The Defendant did not deny the authenticity of the deed or that he signed the deed. He did not plead non est factum, mistake, fraud, duress or any other vitiating factors. Thus, the validity of the 1960 Succession and the 1981 Deed of Gift is not in dispute and is not in issue. Mr Siu argued that he was nevertheless entitled to challenge the weakness of the Plaintiff’s case on the chain of title to the Property. I do not agree. Mr Siu had confirmed that these matters were neither pleaded nor disputed by the Defendant. If these matters are not pleaded, they are not in issue, let alone they are not disputed. It is not open to Mr Siu to challenge anything that is neither pleaded nor in issue. With respect to Mr Siu, his argument demonstrated a blatant confusion of thought and a wanton disregard to the pleadings and their purpose. 28.Next, Mr Siu submitted that the Plaintiff’s case is contrary to his pleading. His argued that in answer to the Defendant’s request for further and better particulars of the Plaintiff’s interest in the Property prior to and as at the date of the 1981 Deed of Gift, the Plaintiff answered that prior to that date, the Plaintiff was entitled to one quarter share in the beneficial interest in the Property when administration of the Father’s estate was or was deemed to have been completed and that as at the date of the 1981 Deed of Gift, he was entitled to one-fifth share as the registered owner of the Property. Hence Mr Siu argued that this answer formed part of the Plaintiff’s pleading and part of the Plaintiff’s case. He submitted that if the Plaintiff had derived interest in the Property in 1960 as a result of the Father’s intestacy, he was only entitled to one-sixth share in the Property and could not re-derive any interest in the Property at a different proportion by the 1981 Deed of Gift. 29.While I have no doubt that the above answer formed part of the Plaintiff’s pleading, it does not necessarily follow that by extracting that answer from the Plaintiff, the answer became part of the Plaintiff’s case. The Plaintiff’s case is that he was given one-fifth share in the interest in the Property under the 1981 Deed of Gift, the validity of which is not in dispute. The Plaintiff’s answer as to the interest he had prior to the date of the 1981 Deed of Gift is irrelevant. That answer never formed part of the Plaintiff’s case. It was ordered to be given by a master upon an application made by the Defendant which was contested by the Plaintiff. A pleading of an irrelevant fact extracted by the Defendant cannot form part of the Plaintiff’s case. On the pleading, it never was the Plaintiff’s case that he derived interest in the Property as a result of the Father’s intestacy. The Plaintiff’s claim is based on the 1981 Deed of Gift. Mr Siu fully appreciated that. It is impossible to understand why he should pursue that line of argument. It is for the Plaintiff to plead his case and to present his case as pleaded. It is not for the Defendant to hijack the Plaintiff’s conduct of the litigation and to run it the way the Defendant wanted it to be run and to lose it. Again with every respect to Mr Siu, it is impossible to launch that sort of argument. 30.In my view, the issues raised in this action are:
31.If the first and second issues are resolved against the Defendant, the Plaintiff bears the burden of proving that an order for partition or order for sale is appropriate and the measure of damages. The evidence of the parties 32.Chan Shee Yuen passed away before this trial commenced. He had prepared a witness statement for the purpose of this litigation in the solicitor’s office in the presence of his son, Chan Sek Lam. Chan Sek Lam tendered that statement as evidence and gave evidence that the statement had been explained and interpreted to Chan Shee Yuen who confirmed it was true and correct. Chan Sek Lam did not have first hand information about the matters averred to in Chan Shee Yuen’s witness statement, much of its contents was hearsay. The Plaintiff also called one of his siblings, Chan Shu Chun to give evidence. Part of his evidence is also hearsay. 33.According to Chan Shee Yuen’s witness statement, the Father moved to Tuen Mun and rented a piece of land to farm with. After two years, the Father bought the Property for HK$3,000 and then built a house on it with his own money. That was hearsay upon hearsay. That evidence was, however, supported by Chan Shu Chun who gave evidence in these proceedings. According to Chan Shu Chun, his Father told the family that he had deposited about US$16,000 in a safe deposit box with Hong Kong And Shanghai Bank when he passed by Hong Kong on his way from the United States to Toishan. Chan Shu Chun was then 15 to 16 years of age. Then to his knowledge, the Father took US$10,000 from the safe deposit box to buy a house in Toishan city for $40,000. At the time the rate of exchange was about one US Dollar to four Hong Kong Dollars. Both his Father and his mother told him that the Father had bought the Property for $3,000 and some shares in Luk Hoi Tung Company Limited with his own money he had in the safe deposit box. Again, that evidence was hearsay as Chan Shu Chun only came to Hong Kong in about 1957 and had no personal knowledge of those matters. But there was no dispute that the Father had bought the house in Toishan city for $40,000 and had bought some shares in Luk Hoi Tung Company Limited. That is the state of the Plaintiff’s evidence. 34.The Defendant was the sole witness in the defence case. His case is that the Father fled to Hong Kong and lived in Sham Shui Po with some friends. Then he joined the Father in 1954. He lived there for 20 days and came to know a clansman by the name of Lee Foon. Then Lee Foon suggested him to move to San Hing Tsuen in Tuen Mun and introduced him to a villager called Yeung Shing. Yeung Shing had a lot of farmland and let him have the use of a plot of about 8,000 square feet free of rent for growing vegetables and raising pigs and chickens. After about three months, he came to know the village representative Siu To Wing, who also let him use two other plots of land rent free for farming. He had his harvest of vegetables after 30 days. He made good profits from the harvest since there was no vegetable supply from China and the New Territories was then only source of vegetables for Hong Kong, In August 1954, he started raising chicken and pigs. He raised a hundred chickens which he sold after six months in February 1955 for $16 to $17 each. At the same time, he bought a pig for $300 from a villager who was migrating. The pig gave birth to 14 piglets which he raised and sold for $200 each after eight months. His neighbours gave him seeds to grow while suppliers sold him animal feed on credit which he repaid after selling his produce. Then a year later, he purchased the Property from To Yu Tin through the introduction of Fung Yuen. 35.According to the Defendant, on 11 September 1956, To Yu Tin signed an agreement for sale of the Property to the Father and received a deposit of $1,000 from the Defendant. The Father refused to sign that agreement because it was the Defendant who bought and provided the purchase money. The Father signed the conveyance on sale and completed the purchase on 29 September 1956 at the District Office. In 1957, the Defendant built the house with his own money. Then his other brothers, Chan Shu Chun and Chan Shu Nam and Mother came from China to join the family and lived in his house. Neither he nor the Father had told the siblings that he was the purchaser of the Property, but his Mother had told them that he was the real owner. In February 1960, the Father died. The Defendant applied to the District Lands Officer for succession to the Property on 21 October 1960. His application was approved on 8 December 1960. 36.There is no dispute that the Defendant moved out of the Property in 1962 to a flat which he bought in To Kwa Wan and that Chan Shu Chun and Chan Shu Nam also moved out of the Property to live in their own accommodation in 1980, leaving the Mother and the Plaintiff living in the Property for most of the time during the next thirty years.. 37.As for the circumstances leading to the execution of the 1981 Deed of Gift, the Plaintiff’s case according to Chan Shee Yuen is that the other siblings did not know that the Defendant had succeeded to the Father’s interest in the Property. They thought the Defendant had only succeeded to the Father’s licence in the house. Then in 1980, the Mother and the other three siblings requested the Defendant to transfer part of the interest of the Property to the other siblings. Eventually, the Defendant agreed to divide the Property into five shares, one for each of the four siblings and the Mother and to allocate one share to each of his siblings while he retained two shares. The 1981 Deed of Gift was to give effect to that agreement. 38.But, according to the Defendant, the Plaintiff told the Defendant that his family was poor and their living condition was not good. The Plaintiff told him that if the Property was resumed by the Government, the registered owners of the Property would be given government re-settlement or compensation. On behalf of himself and the other two siblings, the Plaintiff repeatedly urged and persuaded the Defendant to add his and Chan Shu Chun’s and Chan Shu Nam’s names as registered owners of the Property and expressly represented that they did not want to obtain any title in the Property and that they only wanted to be qualified for compensation or resettlement by the Government in case of resumption. The Defendant agreed. At the advice of the District Office, the Defendant executed the 1981 Deed of Gift in favour of the Plaintiff and the two siblings to give effect to that agreement. However, no resumption took place after several years. In 1991, the Plaintiff left for China. When the Plaintiff sought to return to the Property in 1992, the Defendant refused to allow the Plaintiff access to the Property as it was his own property, it was occupied by the Defendant and his family and there was no room for the Plaintiff. 39.According to the Defendant, Chan Shee Yuen and his son Chan Sek Lam asked for a loan from the Defendant and to provide accommodation for them. The Defendant refused and Chan Shee Yuen repeatedly disturbed the Defendant and his family. In his witness statement which formed his evidence in chief, the Defendant alleged that Chan Shee Yuen disturbed and threatened the Defendant again in January 2000 and the matter was reported to the police. However, he withdrew that allegation under cross-examination. Then through the mediation of Yeung Shing’s son, Yeung Ming Hin, the dispute was settled by the Defendant lending $3,000 and then $8,000 to Chan Shee Yuen. In February 2002, Chan Shee Yuen demanded money from him again. The Defendant refused. Chan Shee Yuen then instituted action in the Small Claims Tribunal and later took out the present action. Chan Sek Lam did not dispute the receipt of the two sums of $3,000 and $8,000 but denied to have any knowledge of the purpose for the payments. As Yeung Ming Hin was the person who mediated the dispute between Chan Shee Yuen and the Defendant, the payments might be related to Yeung Ming Hin’s lease of part of the Property for parking his coaches. But there is no need for me to speculate the reason for the payments. It is not relevant to the central issue in dispute. Credibility 40.The Plaintiff called two witnesses: Chan Sek Lam and Chan Shu Chun. Chan Sek Lam’s evidence was only of marginal importance. I find Chan Sek Lam evasive when he denied knowledge about the reason for the two payments of $3,000 and $8,000 received by Chan Shee Yuen. That reflected adversely on his credibility. However, in the light of the totality of the evidence, this has little impact on his credibility. I consider Chan Shu Chun an honest and credible witness. His evidence was inherently credible and his answers in cross-examination were spontaneous. I accept his evidence. 41.The Defendant gave evidence. But he did not impress me as an honest and credible witness. He was evasive when giving evidence about the 1960 Succession. He departed from his witness statement in respect of the representation made by his siblings that they had no wish to claim legal title in respect of the Property. He was confused in his evidence when he accounted for the purchase money for the Property. He was also changing his evidence about the shares in Luk Hoi Tung Company Limited. He impressed me as an unreliable and exaggerating witness. It appeared to me that he was making up his evidence while he was in the witness box. These apart, his evidence is inherently incredible. I do not accept his evidence. Who provided the purchase money for the Property 42.I now turn to the crucial issue of whether the Defendant provided the purchase money for the Property. The Defendant had the burden of proof. Before analysing the Defendant’s evidence, it should be recalled that the setting was that the Father was a retiree from the United States having worked to the end of his carrier as a carpenter. He had saved some money which bought him some properties and farmland in Toishan and some shares in Luk Hoi Tung Company Limited. He fled to Hong Kong from Communist rule in 1954 when he was 73 years old. The Defendant arrived Hong Kong to join the Father later that year. He was then seventeen years old. 43.In a nutshell, the Defendant’s case is that after he moved to Tuen Mun with his Father, he came to know Yeung Shing and Siu To Wing who gave him, a total stranger of seventeen, land to farm with. He was given seeds to grow vegetables by his neighbours and credit by suppliers to buy animal feed for his poultry and pigs. He was able to start a very profitable farming business with absolutely no capital and which earned him $3,000 to pay for the Property. He gave no credit to his Father, saying that the Father had no money, was suffering from rheumatism and was too old and feeble even to assist him in his farming. He said that not only he supported his aged parents, he provided food and shelter for the entire family, including the education of his two younger siblings. But when the Defendant’s evidence is analysed against the background at the material time, it is plainly incredible. 44.In contrast, the Father had undoubtedly been a rich retiree with substantial saving, at least at some stage. There was no evidence how much, if any, the Father had brought with him when he fled from Toishan. However, there was no dispute that the Father later bought some shares in Luk Hoi Tung Company Limited. The Defendant tried to play down the significance of those shares by saying that the shares had been given to him by his Father and that there were only a few shares. He said his Father gave him the shares because of his contribution to the family. The Father took him to the company office and transferred the shares to him. However, when asked about the dividend he last received, he said the company refused to pay him dividend because he could not produce the necessary probate documents. This is utterly inconsistent with his earlier evidence which show that he had something to hide and was making up his evidence as he went along. He then explained that when the Father took him to the company to transfer the shares to him, the staff of the company advised that there was no need transfer the shares and he could collect the dividend by showing the passbook to the company. Again, this is incredible. On the other hand, Chan Shu Chun’s evidence is that the Father wrote from Hong Kong back home and informed the family that he had bought shares in Luk Hoi Tung Company Limited and received dividends. Chan Shu Chun said that the Defendant gave him dividends in sums of $2,000 to $4,000 two or three times in about 1987 and 1988. The Defendant denied and said he only gave some petty cash of a hundred dollars or so to his brothers for the new year and did not give them dividends from the shares as the shares were his. I find the Defendant was not telling the truth about the shares. I accept Chan Shu Chun’s evidence about the dividends and about what the Father had told the family in his letter from Hong Kong. Though there is no evidence about the number of shares the Father bought, the quantity of shares was not insubstantial in view of the dividend in 1987 and 1988. The irresistible inference must be that the Father had either brought some money with him when he fled Toishan or he had left some US Dollars in his safe deposit box in Hong Kong And Shanghai Bank when he returned to Toishan en route Hong Kong as he had told his children. Whatever was the truth, the Father was not as unresourceful as the Defendant would have me to believe. 45.The Defendant’s story about his profit from farming is too good to be true. He said he made $3,000 in two years to buy the Property. That was a huge sum of money in 1957. According to the unchallenged evidence of Chan Shee Yuen, he earned $15 per month as a farmer in 1957 and $20 to $40 per month as a factory worker in 1960s. Thus the $3,000 which the Defendant allegedly made in two years was as much as 200 month’s wages for a farm worker. While luck and entrepreneurial success may go hand in hand, it is just too incredible that two strangers, Fung Yuen and Siu To Wing who only came to know the Defendant shortly would have given this young stranger of seventeen years of age three plots of land to farm with free of rent, instead of employing him to farm the land just like the Plaintiff was being employed to farm and raise pigs for another villager. It is also incredible that three suppliers could have supplied the Plaintiff, again a total stranger, animal feed on credit without any security to the extent of $2,000 to $3,000 in those days, which was enough to buy the Property or enough to pay 200 workers for one month. 46.The Defendant was confused in his evidence when accounting how he paid the purchase price for the Property. Initially, his evidence was that he borrowed $3,000 to purchase the Property from a Mr Tang and two other suppliers who sold him animal feed. Then he changed his evidence and said he meant that he purchased animal feed on credit. He was asked questions in Punti dialect which he was very fluent with. The questions asked were straightforward and clear. The two matters were unrelated and he could not have mixed them up. I think the confusion was not due to his inability to understand the questions asked of him or to his difficulties in expressing himself but because he was making up his evidence. 47.If the Property was purchased by the Defendant in the Father’s name because the Defendant was underage, it is surprising that the Defendant did not request the Father to transfer the Property back to him soon after he came of age two years later. There was no reason why the Father would have refused as he must realize he was approaching the last of his days then. It is also incredible that neither the Father nor the Defendant had prepared a memorandum or note of some sort as evidence of this fact in view of the old age of the Father. It is also surprising that the Father would not have informed the other siblings that it was the Defendant’s house that they were living. There was no reason for the Father or the Defendant to be secretive about the Defendant having paid the purchase price for the Property if that was the truth. The Defendant said his Mother had always told the siblings that he was the true owner. But this evidence was contradicted by Chan Shu Chun whose evidence was that it was through the Mother’s intervention that the Defendant agreed to assign one-fifth share of the Property to each of the siblings. I consider Chan Shu Chun’s evidence closer to the truth than the Defendant’s. 48.Furthermore, according to the unchallenged evidence of Chan Shee Yuen, the Defendant and his family moved out of the Property in 1962 after having bought a flat in To Kwa Wan. For the thirty years between then and 1992, the Property was occupied by the Mother and other siblings who moved in and out of the Property at will as if it were their parents’ home. If indeed the Defendant was the true owner of the Property, it is inconceivable that he would have left, if not abandoned, the Property for thirty years without first asserting his ownership. There was no dispute that he never claimed to his siblings that he was the owner of the Property because he had provided the purchase money for the Property. According to Chan Shu Chun, whose evidence I have no reason to doubt, the Defendant only claimed to the siblings that he succeeded to the licence of the Property, which the siblings understood to refer to the licence in respect of the house on the Property. The Defendant’s conduct was inconsistent with his being the owner of the Property. 49.The Defendant was evasive when cross-examined about his application for succession in 1960. In the application, it was represented that the Defendant was the only son of the Father and that the Property was not subject to any trust or other third party interest. The application was signed by the Defendant. Yet, he denied having supplied the information which was filled in the application form but was unable to explain how it was those information came to be filled in the form. The information could not have been supplied by the staff of the District Office. The irresistible inference must be that the Defendant misrepresented to the District Officer that he was the only son of the Father when he applied for succession to the Father’s Property. The Defendant might have lied in order to simplify his application to reclaim legal title to his Property. However, if as what he said his Mother had always told his siblings that he had provided the purchase money for the Property, there was no reason to be secretive about it. He could have formally applied for succession on the ground that the Property was held by the Father on trust for him and quoting support from the Mother and the siblings who at that stage could not have denied his title if what he said was true. 50.Having considered the totality of the evidence, I do not consider the Defendant credible. I reject his evidence. He has failed to discharge the burden of proving that he provided the funds for the purchase of the Property. That would be sufficient for me to find for the Plaintiff. But on the evidence, I am quite prepared to go further to find that it was more likely than not that the Property was purchased by the Father with his own money. There was no dispute that the Father was a retiree who had some saving. Accepting Chan Shu Chun’s evidence, it was common knowledge in the family that the Father had kept some money in a safe deposit box with Hong Kong And Shanghai Bank and had bought some shares in Luk Hoi Tung Company Limited after he fled to Hong Kong from Toishan, the Father must have either taken with him some money when he fled from Toishan or had kept some money in his safe deposit box with Hong Kong And Shanghai Bank in Hong Kong. Having rejected the Defendant’s evidence, I find it was more likely than not that the Father moved to Tuen Mun and rented a piece of land to farm with. It was more likely than not that having acquainted with the indigenous villagers, the Father purchased the Property with the money he had either brought with him from Toishan or kept in the safe deposit box in Hong Kong And Shanghai Bank. The Defendant took advantage of the opportunity while Chan Shu Chun and Chan Shu Nam had migrated and the Mother had been moved to an old age home to exclude the Plaintiff from the Property when he returned to China. The Defendant’s account was fabricated and wholly unrealistic. Whether the Plaintiff held the interest in the Property as trustee for the Defendant 51.I have outlined this part of the parties’ case in paragraphs 36 and 37 above. According to his witness statement which the Defendant adopted as his evidence in chief, the Defendant said that the Plaintiff, Chan Shu Chun and Chan Shu Nam repeatedly requested him to add their names as registered owners of the Property in order to enable them to obtain compensation or resettlement from the Government in the event of resumption of the Property by the Government and represented to him that they did not wish to acquire any beneficial interest in the Property. The Defendant’s case is contrary to incontrovertible evidence that at the material time, Chan Shu Chun and Chan Shu Nam were already in receipt of Government housing and were not entitled to any compensation or resettlement in the event of a resumption. Chan Shu Chun had bought a unit in Lady Grantham Estate in Tai Kok Tsui in early 1980 while Chan Shu Nam was accommodated in public housing in February 1980. The Defendant tried to salvage his case by departing from his witness statement while under cross-examination and said that the request and representation were made by the Plaintiff on behalf of himself and the other two siblings and that Chan Shu Chun and Chan Shu Nam had not made the request or representation. 52.I think the damage to the Defendant’s credibility caused by the allegation in his witness statement is beyond repair. His witness statement was prepared by his solicitor, who presumably must have taken clear and detailed instruction from the Defendant before reducing his allegation in writing. The witness statement was written in clear and unequivocal language. It had been interpreted to the Defendant before he signed his name. His allegations about his other siblings making the requests and representation were repeated allegations. His solicitor could not have mistaken his instruction. His departure from his witness statement could not have been due to failure in memory while in the witness box or while giving his statement to his solicitor, but was due to deliberate exaggeration on his part. It is plainly obvious that when he came to realise that there was incontrovertible evidence that Chan Shu Chun and Chan Shu Nam could not have made the representation he alleged, he changed his evidence under cross-examination in order to salvage his accusation against the Plaintiff. I think the Defendant was exaggerating. I do not find him credible and reject his evidence. The Defendant was unable to discharge his burden of proving the representation and the trust. I am left with what is on the face a validly executed deed of gift by which one-fifth share of the interest of the Property was assigned to the Plaintiff, Chan Shu Chun and Chan Shu Nam. My finding in respect of this issue also supports my finding in respect of the first issue. The remedies 53.The Defendant has failed to prove that he provided the purchase money for the Property and indeed I am satisfied that it was more likely than not that the Property was purchased by the Father with his own money. The Defendant’s second defence that the Plaintiff held bare title in the Property in trust for the Defendant also failed. In the circumstances, the Plaintiff is entitled to remedy. The Plaintiff seeks an order for sale, an order for an account and damages. 54.At the hearing, Mr Wong, counsel for the Plaintiff, abandoned the claim for partition and elected to seek an order for sale. He relied on section 4 and 6(1) of the Partition Ordinance (Cap 352). Section 4 provides as follows:
55.Mr Wong submitted that by reason of section 4(2), the Court shall not order partition because there was a building on the Property which by reason of its size could not be partitioned into self contained units. I think that is a misinterpretation of the section. I think that section only prohibits a Court from partitioning a property which has the effect of dividing a building on the property so that parts of the building stand on different parcels so partitioned, unless the parts are self contained and is not connected to the remainder of the building otherwise than by a party-wall or mutual staircase or both. The section does not prevent a Court from dividing the property into parcels if it could be done without dividing the building on the property into parts. The size of the parcels may have to be adjusted to compensate for the loss of the value of the building to the parcels without the building. Such partitioning may be difficult in view of the size and shape of the property and the need to provide separate or common access. These are matters which expert opinion may be required. But the presence of a building alone does not prevent a Court from ordering partition, if it could be done consistently with section 4(2). 56.No expert evidence has been adduced to show how the partitioning could be effected if the Court is to make an order for partition. Mr Siu submitted that in the absence of expert opinion it was not open to the Court to consider partition. He also submitted that it was not open to the Court to adjourn the hearing for expert opinion on the partitioning as the Plaintiff’s application for separate trial on liability and damages had been refused by a master. I think the master’s refusal does not prevent the Court from adjourning the case for expert opinion on how the partition could be carried out, if an order for partition is appropriate. The question for the Court at this stage of the proceedings is whether such an order should be made. 57.Section 6(1) of the Partition Ordinance provides:
Where a remedy should be ordered, the Court should first consider partition unless it would not be beneficial to all the persons interested by reason of one or more of the circumstances stated in sub-section (1). The Court has to take into account the four circumstances and strike a balance which is beneficial to all the persons interested in the Property as a whole. 58.The Property is a plot of agricultural land in the shape of a letter ‘L’ of a total area of 13,200 square feet. There is a house of 400 square feet with an adjoining kitchen build on one arm of the letter ‘L’. If a partition has to be made, the Property has to be divided into four parcels with three parcels representing one-fifth share in the interest of the Property and one parcel representing two-fifth shares. The presence of the house, the number of the parcels which the Property has to be divided, the need to provide separate or common access create problems in partitioning. These factors obviously may affect the usefulness and value of the parcels as partitioned. 59.There are four persons interested. The Plaintiff is desirous of an order for sale. He has been excluded from the Property which is now being used exclusively by the Defendant as residence for his family. The house is only about 400 square feet. It would be unrealistic to make an injunction order restraining the Defendant from refusing the Plaintiff access and use of the Property so that both parties may use the Property without having it partitioned. Such an order would be impossible of enforcement. For the Plaintiff, the only remedy other than partition is an order for sale. An order for sale is obviously beneficial to him. 60.The Defendant has expressed no view save that the Property is his absolutely. He could have considered the possible options if he was unsuccessful in his defence, but he did not. He could, for example, have considered a partition into two parcels, one for himself and one for the other three siblings, or one parcel for the Plaintiff and one parcel for himself and the other two siblings. These options are not beneficial to the other two siblings. 61.The other two siblings have no objection whether the Property was to be partitioned or sold. They have migrated out of Hong Kong and have no use of the Property. If partitioned, the parcel they would be entitled to would be a small plot of farmland, which could be of little use for whatever purpose or as rental property in the present circumstances. To have the Property partitioned into four parcels would in all probability only result in their parcels lying vacant and unattended and eventually adversely possessed by a squatter. To them, an order for sale so that they may pocket the proceeds of sale for their own use is obviously to their benefit. 62.In view of the nature of the Property, its shape, its size and its limited use as farmland, I think even without the assistance of expert opinion I can come to the conclusion that a partition would not be beneficial to all the persons interested as a whole. In the event, having regard to all the circumstances, I consider an order for sale of the Property appropriate. Mr Wong has proposed some directions. But I consider them inadequate to protect the interest of the Defendant and the other two interested siblings. Accordingly, I shall make an order for sale of the Property and shall adjourn to a date to be fixed for consequential directions with notice of the hearing to be served on Chan Shu Chun and Chan Shu Nam. 63.The Plaintiff claimed for an order for an account of and enquiries into the Plaintiff’s share in the rents, profits or other income arising or derived from the Property since July 1998. However, it appears that this remedy was not pursued further by Mr Wong in his closing submission. The evidence is confusing. The Defendant admitted that he had rented part of the Property to Yeung Ming Hin as a parking ground for his coaches and received $7,000 per month between July 1998 and October 2000 but thereafter the tenancy ceased upon cessation of the business of Yeung Ming Hin. The Defendant also claimed that the monthly payment of $7,000 included his services as a watchman and cleaner for the coaches. I have doubts in the truthfulness of the Defendant’s assertion as he has been shown to be an exaggerating witness. On the other hand, the Plaintiff had instituted action in the Small Claims Tribunal under Claim No SCTC 39787 of 2000. An adjudicator gave directions on 12 January 2001 for the parties to produce documents within 21 days. However, the action went dormant for unknown reasons. As the Small Claims Tribunal had been seized of the matter, I decline to make an order for an account and enquiry. 64.I now turn to the Plaintiff’s claim for damages. In paragraph 12A of the Amended Defence and Counterclaim, the Defendant denied ever evicting the Plaintiff from the Property and denied that the Plaintiff suffered loss and damage. According to Chan Shee Yuen’s witness statement, he left the Property when he returned to China in 1991, but upon his return several months later he was excluded from the Property. Chan Sek Nam said that he found the locks had been changed and that he and his father were denied access to the house. Even in his own evidence, the Defendant admitted that he denied the Plaintiff entry to the house as he considered the house his own property and that it was occupied by his family. I am satisfied that the Plaintiff had been excluded from the Property since 1991. 65.The Plaintiff claimed for loss and damage suffered since 31 December 1999 when he returned from China and was denied the use of the Property. He had to reside in hotels or in the home of Chan Shu Chun until he eventually rented a room in Sham Shui Po at the monthly rent of $1,000. The Defendant pleaded that the Plaintiff’s loss and damage were time-barred by virtue of the Limitation Ordinance. Mr Siu argued that as the Plaintiff’s cause of action accrued in 1991 the Plaintiff’s claim was time-barred in 1998. He submitted that the Limitation Ordinance did not work on the date on which the writ is issued and did not allow any relief within six years preceding the issue of the writ. With respect, that is manifestly wrong. It is trite law that where a continuing tort has been committed against a person, a fresh cause of action accrues on each renewed tortious act. If a continuing tort has been committed against a person for over six years, that person has lost his right of action for loss and damage which were suffered more than six years prior to the issue of the writ, but he can still recover those loss and damage which he suffered within six years of the issue of the writ. In the case of land, trespass is a continuing tort and a fresh cause of action accrues on each renewed act of trespass. Thus, an owner of land who has been dispossessed by a squatter or a tenant in adverse possession for more than twelve years may not bring an action to recover his land. However, until his title is so extinguished, not only that he can bring an action to recover his land, he can also sue for loss and damage suffered at any time within six years of the date of issue of the writ. The Plaintiff’s claim is for loss and damage suffered since 1 January 2000. His writ was issued on 9 January 2002. His claim is well within six years of the date of issue of the writ and is not time barred by the Limitation Ordinance. 66.Chan Sek Lam’s evidence was that since 2001 he lived with Chan Shee Yuen in a room in Sham Shui Po at the monthly rent of $1,000. Chan Shee Yuen paid rent to the landlady until he died in April 2005 and hence he could not produce those rent receipts. He said that since the SARS epidemic in 2003, the rent was reduced by $300 to compensate for Chan Sek Lam performing cleaning duties for the flat. Mr Siu criticised the Plaintiff’s failure to produce documentary evidence in support of the rent paid despite request made as early as 2003. I do not think it can be doubted that the Plaintiff had incurred expenses for accommodation since 31 December 1999 when Chan Sek Lam came to Hong Kong for permanent residence. Mr Siu also criticised the amount claimed excessive as what the Plaintiff lost was the use of a room in a village in Tuen Mun and not a room in the urban area in Shum Shui Po where the rent, understandably, is higher. The Plaintiff has a duty to mitigate his loss. I would assess his loss at a flat rate of $500 per month since 1 January 2000. Accordingly, I assess the Plaintiff’s damages from 1 January 2000 to 30 April 2005 to be $32,000 (i.e. $500 per month x 64 months). Costs 67.I have reserved the costs of the hearing of the preliminary issue. When the preliminary issue was raised, Mr Wong rightly raised no objection. Shortly after Mr Siu began his submission on the preliminary issue, it was immediately apparent that the argument was novel and difficult to follow. Mr Wong asked for an adjournment for parties to exchange skeleton argument and authorities. Mr Siu asked for costs of the adjournment. I reserved those costs. After determination of the preliminary issue, Mr Siu repeated his application for costs of the adjournment and despite the Defendant was unsuccessful he argued that there should be no order as to costs of the hearing of the preliminary issue against the Defendant. 68.The Defendant’s solicitor had never indicated to the Plaintiff that the Defendant would seek determination of a preliminary issue on the first day of trial and the nature of that issue. Mr Siu’s argument was so novel which I do not think would have been taken by any reasonable counsel nor could have been anticipated by his opponent. As Mr Siu suggested that my ruling on the preliminary issue might result in dismissal of the Plaintiff’s action, there was all the more reason for the Defendant to be cautious. In the circumstances, it was reasonable for Mr Wong to request that he be supplied with skeleton argument and list of authority. Had the matter proceeded straight to trial instead, Mr Wong could have had some clue of the issue and the nature of Defendant’s argument by the close of the defence case and could promptly respond in his final submission. The adjournment would not have been unnecessary. The Plaintiff’s position was different when the preliminary issue was argued at the beginning and in the way Mr Siu argued it. I therefore think the costs of the adjournment should also follow the event. Having considered all the arguments raised at the preliminary issue and having heard all the evidence at the conclusion of this trial, I consider there was no reason to depart from the usual rule that costs should follow the event. Accordingly, I make an order that the Plaintiff shall have the costs of the hearing of the preliminary issue, including the cost of the adjournment when the issue was first raised. 69.The Defendant applied for an adjournment pending appeal to the Court of Appeal. I have dismissed that application with costs to the Plaintiff. 70.In an uncontested action for partition or sale of property under the Partition Ordinance, it is usual to make no order as to costs or for costs to be paid out of the proceeds of sales. In the present case, the Defendant contested the action. He raised no reasonable defence. In the circumstances, the Plaintiff is entitled to have his costs against the Defendant. I therefore make an order that the Plaintiff shall have all costs of the action which have not been otherwise provided for. All costs are to be taxed, if not agreed. As the Plaintiff is legally aided, the Plaintiff’s costs shall be taxed in accordance with the Legal Aid Regulations. Conclusion 71.Accordingly, I grant an order for sale of the Property and award the Plaintiff damages in the sum of $32,000. I shall invite the parties to seek directions in connection with the sale of the Property. Having granted the order for sale, it is unnecessary and inappropriate to grant the declaration and injunction sought by the Plaintiff. The Defendant’s counterclaim is dismissed. The Defendant shall pay the Plaintiff’s costs of this action.
Mr Kenneth Y. F. Wong, instructed by Messrs Wong, Hui & Co. assigned by Director of Legal Aid, for the Plaintiff Mr Stanley CK Siu, instructed by Messrs Christopher Li & Co., for the Defendant Appeal dismissed: see CACV194/2006 dated 13 October 2006 |
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