Lam Lin also known as Lam Wun Yun and Another v. Lam Lok Yiu and Another

HCA 1895/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1895 OF 2009

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BETWEEN

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Before: Hon Suffiad J in Court

Dates of Hearing: 9, 10, 13-15 June and 5 July 2011

Date of Judgment: 13 February 2012

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J U D G M E N T

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1.This is a claim by the plaintiffs in relation to three pieces of land in Tai Po, New Territories.

2.The three pieces of land, the subject matter of this claim are as follows:

(a) Lot No 528 in Demarcation District No 16 together with the messuages erections and buildings thereon, Tai Po, New Territories (“the 1^st Property”);

(b) Lot No 471 in Demarcation District No 16, Tai Po, New Territories (“the 2^nd Property”); and

(c) the Remaining Portion of Lot No 258 in Demarcation District No 16, Tai Po, New Territories (“the 3^rd Property”)

(collectively referred to as “the Properties”).

3.The 1^st Property, during the course of the evidence given at trial, has also been referred to by some of the witnesses as No 66 Hang Hau, being its usual address, since, of the Properties, it is the only one with a structure erected on it.

BACKGROUND

4.The 1^st plaintiff is the father of the 2^nd plaintiff, and the 2^nd plaintiff is the father of the 1^st defendant.  It follows that the 1^st plaintiff is the grandfather of the 1^st defendant.

5.There is no dispute that prior to 1995, the 1^st plaintiff was the legal and beneficial owner of the Properties as well as at least another six pieces of land in Tai Po, all of which were inherited by the 1^st plaintiff from his father, one Lam Yue Choi.

6.In so far as the Properties are concerned, search records from the Land Registry show that the Properties were transferred by the 1^st plaintiff in September and November 1995 to the 1^st defendant as follows:

(a) the 1^st Property, by a Deed of Gift dated 15 November 1995;

(b) the 2^nd Property, by an Assignment dated 2 September 1995 with the consideration stated to be $200,000; and

(c) the 3^rd Property, by an Assignment also dated 2 September 1995 with the consideration stated to be $150,000.

7.In 2009, the 1^st defendant purported to sell the 1^st Property and the 2^nd Property to the 2^nd defendant for $800,000 and $200,000 respectively.

8.Upon the plaintiffs coming to know of the purported sale of the 1^st Property and the 2^nd Property by the 1^st defendant to the 2^nd defendant, the Writ herein was issued by the plaintiffs.

9.In a nutshell, the plaintiffs seek to set aside the Deed of Gift dated 15 November 1995 in relation to the 1^st Property as well as both the Assignments dated 2 September 1995 in relation to the 2^nd Property and the 3^rd Property, and delivery up of same for cancellation.

10.The plaintiffs also seek a declaration that the Properties are held upon trust by the 1^st defendant or 2^nd defendant for the 1^st plaintiff or the plaintiffs.

11.The plaintiffs further seek consequential reliefs that the 1^st and/or 2^nd defendant do transfer to the 1^st plaintiff or the plaintiffs the entire interests of the Properties, and an account of the profits made by the 1^st defendant from the sale of the 1^st Property and the 2^nd Property and an order for payment of same upon the taking of such account.

THE PLAINTIFFS’ CASE

(a) As against the 1^st defendant

12.It is the plaintiffs’ case that at all material times, the 1^st plaintiff’s intention was for the 1^st defendant to hold the Properties on trust for the benefit of the family members of the 1^st plaintiff (“the Lam Family”).

13.Some time in July 1995, the 1^st plaintiff had expressly told the 1^st defendant to look after the Properties for the Lam Family and that the 1^st defendant had agreed and promised that he would do so.

14.Then in September 1995, the 1^st defendant invited the 1^st plaintiff to attend the office of a solicitor, Messrs Leung Kin & Co where the 1^st plaintiff was asked to sign on certain documents in English and was told by a representative of the solicitor’s firm that these documents were to appoint the 1^st defendant as a trustee of the Properties for the benefit of the Lam Family which would make it more convenient for the 1^st defendant to look after the Properties.

15.It was the intention of the 1^st plaintiff that the 1^st defendant should hold the Properties on trust for the benefit of the Lam Family and not to be disposed of without the consent of all members of the Lam Family.

16.In reliance on the representation made to him by the representative of the solicitor’s firm, the 1^st plaintiff therefore believed that by signing the documents, the 1^st plaintiff was appointing the 1^st defendant as a trustee of the Properties to be held for the benefit of the Lam Family and not to be disposed of without the consent of all members of the Lam Family.

17.It is therefore the plaintiffs’ case that the 1^st plaintiff had never intended to sign the Deed of Gift and/or the Assignments or to transfer the Properties to the 1^st defendant by same and denied having signed same.

18.It is also the plaintiff’s case in the alternative, that if the 1^st plaintiff did sign the Deed of Gift and the Assignments, they were documents signed by the 1^st plaintiff:

(a) without the benefit of proper legal advice and without the 1^st plaintiff’s understanding or knowledge of the true contents of such documents;

(b) which were fundamentally different in nature to what was contemplated by the 1^st plaintiff, and were executed by the 1^st plaintiff under a mistake induced by the representative of the solicitor’s firm on behalf of the 1^st defendant as to the contents or effect of those documents; and

(c) which were obtained by the representations made by the representative of the solicitor’s firm on behalf of the 1^st defendant which representations were false and made fraudulently.

19.On that basis, the plaintiffs seek to set aside the Deed of Gift and the Assignments and their effect in transferring the Properties to the 1^st defendant.

20.It is also the plaintiff’s case that the members of the Lam Family including the plaintiffs (save and except the 1^st defendant) had not approved or authorized the sale of the 1^st Property and the 2^nd Property by the 1^st defendant and that the 1^st defendant holds the 3^rd Property and the proceeds of sale of the 1^st Property and the 2^nd Property on trust for the 1^st plaintiff or the plaintiffs.

21.In the further alternative, it is also the case of the plaintiffs that the 1^st defendant held the Properties on constructive trust for the 1^st plaintiff or the plaintiffs on the basis that there was a common intention of the plaintiffs and the 1^st defendant that the 1^st defendant would hold the Properties for the benefit of the Lam Family not to be disposed of without the consent of all members of the Lam Family.

22.Relying on such common intention, it is also the plaintiffs’ case that the 1^st plaintiff had acted to his detriment by signing the Deed of Gift and Assignments under the induced mistaken belief that the documents he was signing were to appoint the 1^st defendant as a trustee of the Properties for the benefit of the Lam Family.

23.Relying on such common intention, the 2^nd plaintiff has also acted to his detriment by spending some $120,000 to carry out works for the improvement of the 1^st Property in the belief that he (the 2^nd plaintiff) had a beneficial interest in the Properties.

24.It is also pleaded by the plaintiffs that in purportedly selling the 1^st Property and the 2^nd Property, the 1^st defendant was in breach of trust and holds the proceeds of sale of the 1^st Property and those of the 2^nd Property, together with the 3^rd Property on trust for the 1^st plaintiff or the plaintiffs and which are recoverable from the 1^st defendant.

(b) As against the 2^nd defendant

25.The plaintiffs case against the 2^nd defendant is that the 2^nd defendant, through its estate agent, one Lee Yim Mui (“Ms Lee”), and its director, one Lau Sit Fai (“Mr Lau”), well knew that the 1^st Property and the 2^nd Property were held on trust by the 1^st defendant for the benefit of the Lam Family and were not to be disposed of without the consent of all members of the Lam Family.

26.It is alleged by the plaintiffs that Ms Lee and Mr Lau were close family friends of the 2^nd plaintiff, and the 2^nd plaintiff’s girlfriend, one Kwok Ng Yin (“Ms Kwok”) and both of them knew that the 2^nd plaintiff and Ms Kwok resided at the 1^st Property and also knew through discussions over the years of acquaintance with the 2^nd plaintiff and Ms Kwok of the family arrangement regarding the Properties as ancestral properties of the Lam Family.

27.It was also pleaded by the plaintiffs that in April 2009, Ms Lee, acting as the estate agent of the 2^nd defendant, had enquired from Ms Kwok as to whether the 1^st Property and the 2^nd Property could be sold to the 2^nd defendant and that Ms Kwok had expressly told Ms Lee that they were regarded as ancestral properties and there was no consent from the Lam Family for the sale of them.

28.It is therefore the plaintiffs’ case that the 2^nd defendant knew that the sale of the 1^st Property and the 2^nd Property by the 1^st defendant was a breach of trust on the part of the 1^st defendant and/or that the 2^nd defendant had shut its eyes to the obvious and had failed to make the necessary inquiries which an honest and reasonable person would have made.

29.The plaintiffs therefore say that 2^nd defendant dishonestly assisted in the breach of trust by the 1^st defendant and that the 2^nd defendant had dishonestly received the 1^st Property and the 2^nd Property for its own benefit and with the knowledge that they were misapplied trust properties.

30.In the circumstances, it is pleaded by the plaintiffs that the retention of the 1^st Property and the 2^nd Property by the 2^nd defendant is unconscionable and the 2^nd defendant is accountable to the 1^st plaintiff or the plaintiffs as a constructive trustee of the 1^st Property and the 2^nd Property.

THE 1^ST DEFENDANT’S CASE

31.The case of the 1^st defendant was that there was never any intention on the part of the 1^st plaintiff to create any trust whereby the 1^st defendant was asked to hold the Properties on trust for the benefit of the Lam Family and which would not be sold without the consent of all the members of the Lam Family.  Quite the contrary, some time in 1995, the 1^st plaintiff had expressed his desire and intention to distribute the lands which the 1^st plaintiff had inherited from his father to the male descendants of the Lam Family.

32.It is therefore the 1^st defendant’s case that the transfer of the Properties to him by the 1^st plaintiff in 1995 was part and parcel of that arrangement by the 1^st plaintiff to distribute various pieces of lands to the male descendants of the Lam Family.

33.In this respect, the 1^st defendant relies on the following:

(a) The land search record showed that Lot No 315 in Demarcation District No 16 (hereinafter referred to as “Lot 315”) was transferred by the 1^st plaintiff to the 2^nd plaintiff. The assignment in respect of that piece of land was in fact dated 1 September 1995 (but the year wrongly stated in the land search record to be 1993) and was also prepared by the same firm of solicitors, Messrs Leung Kin & Co with the consideration therein stated to be $200,000.

(b) The land search record showed that Lot No 311 in Demarcation District No 16 (hereinafter referred to as “Lot 311”) was transferred by the 1^st plaintiff to another son of the 1^st plaintiff, one Lam Wong Sing by an assignment dated 18 August 1995 for a consideration of $250,000.00. The land search record also showed that same piece of land was later transferred by Lam Wong Sing to his son, Lam Alan Ying Chuk by an assignment dated 11 January 1996. There is also evidence to show that Lam Alan Ying Chuk had entered into an agreement for sale and purchase dated 19 May 2003 for the same piece of land with third parties at a consideration of $1,600,000.

(c) That Section A of Lot No 258 in Demarcation District No 16 had also been transferred by the 1^st plaintiff to yet another of the 1^st plaintiff’s sons, one Lam Tin Fuk. That transfer, I am told by both parties, took place some time in 2008.

(d) Lot No 306 in Demarcation District No 16 was retained by the 1^st plaintiff himself and not transferred to any male descendants of his.

34.Apart from those pieces of land referred to above and relied on by the 1^st defendant to say that it was a distribution by the 1^st plaintiff to male descendants of the Lam Family, there were also other pieces of land which the 1^st plaintiff had sold off to third parties before 1995 and which, therefore, has little significance in this dispute.  It is therefore not necessary to go into any detail of those other pieces of land already sold by the 1^st plaintiff before 1995.

35.The 1^st defendant also explained why he was distributed more properties than other members of the Lam Family by the 1^st plaintiff which is as follows.

36.In 1993 the 2^nd plaintiff told his wife, Leung Kit Chun (ie the mother of the 1^st defendant) that the 2^nd plaintiff wished to emigrate to the UK by investing in his brother’s fast food/takeaway business in the UK known by the name of Chop Chop I and discussed with her the means to fund such investment.  Upon Leung Kit Chun agreeing to such arrangements, the matrimonial home of the 2^nd plaintiff and Leung Kit Chun in Serenity Park was sold, Leung Kit Chun contributing her share of the proceeds of sale together with her own life savings of some $1.4 million upon the understanding that she would have an equal share in Chop Chop I.

37.After they had emigrated to the UK, the 2^nd plaintiff acquired Chop Chop I but that was put under the sole name of the 2^nd plaintiff and under his control.

38.In 1994, the relationship between the 2^nd plaintiff and Leung Kit Chun turned sour, they separated and as a result, the 1^st defendant and Leung Kit Chun returned to Hong Kong from the UK in about October 1994.  The 2^nd plaintiff refused to provide any form of support for Leung Kit Chun and the 1^st defendant after they returned to Hong Kong, having deprived her of her life savings.

39.When the 1^st plaintiff discussed with the 1^st defendant as to the distribution of properties in 1995, the 1^st defendant had indicated to the 1^st plaintiff of possible legal proceedings against the 2^nd plaintiff for the recovery of the life savings of Leung Kit Chun.  The 1^st plaintiff had recognized the fact that the 2^nd plaintiff had deprived Leung Kit Chun of her life savings, then separated from her leaving her with nothing.  The 1^st plaintiff had expressed dissatisfaction with the conduct of the 2^nd plaintiff and considered it appropriate to distribute the Properties to the 1^st defendant in order to provide for the 1^st defendant being his grandson as well as to compensate Leung Kit Chun for her loss of her life savings thus to ensure family harmony.

40.It is also the case of the 1^st defendant that during the attendance at the solicitor’s firm in September 1995, a clerk of the firm, one Chan Kam Wun had confirmed the instructions from the 1^st plaintiff and had duly explained the contents and legal effect of each document to the 1^st plaintiff before the 1^st plaintiff signed on them.

41.The 1^st plaintiff was also advised that if the Properties were all transferred by way of gift, the 1^st defendant may face difficulty if he wished to sell them to third parties.  It was therefore suggested that the 2^nd Property and the 3^rd Property be assigned by way of assignment with notional consideration figures and that the 1^st plaintiff to confirm that the matter had been settled and set off between the parties by way of private arrangement.  This was agreed to by the 1^st plaintiff and as a result, the notional figures of $200,000 and $150,000 were put in and which were effectively waived by the 1^st plaintiff upon the 1^st plaintiff signing the Acknowledgements in respect of the payments of such consideration.

42.The 1^st defendant does not admit that the 2^nd plaintiff had spent money on works done in relation to the 1^st Property and had acted to his detriment.  It is the case of the 1^st defendant that the 2^nd plaintiff was permitted to live in the 1^st Property as a gesture of good will by the 1^st defendant and nothing more since the 2^nd plaintiff was fully aware of the distribution by the 1^st plaintiff of the land amongst the male descendents of the Lam Family.

43.The 1^st defendant also pleads estoppels against the 1^st plaintiff taking action to set aside the Deed of Gift and the Assignments due to the fact that the 1^st plaintiff had filed and signed a Sale of Property Form dated 18 November 1996 with the Rating and Valuation Department whereby the 1^st plaintiff had acknowledged and stated therein that the 2^nd Property and the 3^rd Property had been sold respectively for money to rebuild and indigenous house and that the 1^st defendant could apply for permission to build a house.

44.This, coupled with the fact that the 1^st plaintiff had signed on the Acknowledgments dated 2 September 1995 by which payment of the notional consideration for the 2^nd Property and the 3^rd Property had been waived by the 1^st plaintiff, the 1^st defendant says that it is inequitable for the 1^st plaintiff to go back on such representations.

THE CASE OF THE 2^ND DEFENDANT

45.The case of the 2^nd defendant is that it was not privy to and had no knowledge of the dealings in respect of the Properties between the 1^st plaintiff, the 2^nd plaintiff and the 1^st defendant.

46.It is not disputed by the 2^nd defendant that Ms Lee was the estate agent acting for the 2^nd defendant in the purchase of the 1^st Property and the 2^nd Property from the 1^st defendant, and that Mr Lau was a director of the 2^nd defendant.

47.It is however the case of the 2^nd defendant that neither Ms Lee nor Mr Lau were family friends or close friends of the 2^nd plaintiff nor Ms Kwok.  The 2^nd defendant denies any knowledge of the 1^st Property and the 2^nd Property being held on trust by the 1^st defendant for the benefit of the Lam Family and were not to be disposed of without the consent of all members of the Lam Family.

48.Specifically, the 2^nd defendant says that Ms Lee did not know that the 2^nd plaintiff and Ms Kwok resided at the 1^st Property and had never visited them there socially.  The only visits Ms Lee made to the 1^st Property was once in late May 2009 (being a pre-sale inspection) and the two pre-completion inspections on 12 and 13 August 2009.

49.It was also pleaded by the 2^nd defendant that even if the 1^st and 2^nd plaintiffs had any interests in the 1^st Property and the 2^nd Property, the 2^nd defendant had no notice of same, whether actual, constructive or implied, and that the 2^nd defendant was a bona fide purchaser of same for value without notice.

THE EVIDENCE

50.The plaintiffs called as witnesses, Ms Kwok, the 1^st plaintiff (who, due to his infirmity, gave evidence via video link from the UK where he lives), and the 2^nd plaintiff in that order.

51.The 1^st defendant called as witnesses, Chan Kam Wun, the clerk of Messrs Leung Kin & Co, Solicitors, the 1^st defendant himself and Madam Leung Kit Chun in that order.

52.The 2^nd defendant called as witnesses, Mr Lau and Ms Lee.

THE EVIDENCE FROM MS KWOK

53.Dealing first with the evidence of Ms Kwok, she adopted as her evidence the contents of her witness statement.  In summary, her witness statement is to the effect that she understood the subject matter of this action to be the 1^st Property, the 2^nd Property and the 3^rd Property.

54.She confirmed that she is the girlfriend of the 2^nd plaintiff, and although she has a flat of her own in Flora Plaza in Fanling, the 2^nd plaintiff has given her the keys to the 1^st Property and that she has stayed in the 1^st Property with the 2^nd plaintiff frequently.  That being the case, she has placed her own clothes shoes and other personal belongings as well as her gardening clothes in the 1^st Property since she treated the 1^st Property as her other home.

55.When the 2^nd plaintiff went to the UK to visit his father, the 1^st plaintiff in June 2009, Ms Kwok would still go to and stay at the 1^st Property from time to time.  When she went to the 1^st Property on 13 August 2009 she found both the front and rear door to be locked, and the front gate also locked by a metal chain.  Two days before that when she visited the 1^st Property, things were still normal there.  She then reported to the police and called the 2^nd plaintiff by a long distance call.  She then also conducted a land search in respect of the1^st Property and found that the 1^st defendant had entered into a sale and purchase agreement with the 2^nd defendant.  She then called the 2^nd plaintiff and urged him to return to Hong Kong at once.  She also posted a notice outside the 1^st Property to the effect that the 1^st Property was not for sale.

56.As for the relationship between Ms Kwok and Ms Lee/ Mr Lau, Ms Kwok confirmed that they were close friends of herself and the 2^nd plaintiff.  Her first contact with Ms Lee was in 2003 in real Property business when she acted for Ms Lee as a Property agent.  Thereafter she has acted for Ms Lee in a number of other transactions.

57.Ms Kwok also adopted the contents of her affirmation filed in this matter in which she stated that  during chats with Ms Lee and Mr Lau over the years, they did talk about matters including family matters of the 2^nd plaintiff as well as matters concerning the 1^st Property, the 2^nd Property and the 3^rd Property and that she did tell Ms Lee that the Lam Family had regarded the 1^st Property, the 2^nd Property and the 3^rd Property as their ancestral properties and that these properties were intended to be held by the 1^st defendant as trustee for the benefit of the members of the Lam Family.

58.Ms Kwok denied that her relationship with Ms Lee was only limited to business relationship and said that her son even addressed Ms Lee as his sworn mother.

59.Under cross examination by counsel for the 1^st defendant, Ms Kwok said that she had purchased the Flora Plaza flat herself in 2000 and that she had started a romantic relationship with the 2^nd plaintiff since 2004.  She denied that the 2^nd plaintiff had moved into her flat at Flora Plaza after their relationship had started, but that at times the 2^nd plaintiff had come over to spend a night at her flat only.

60.Ms Kwok said that she had no problem with the 2^nd plaintiff giving as his address to the police in his statement given to the police the address of her flat at Flora Plaza.

61.Ms Kwok said that she had lived in both her own flat at Flora Plaza as well as at the 1^st Property which she treated as her other home.

62.Ms Kwok also confirmed that on 11 August 2009, she did not know who was the owner of the 1^st Property, the 2^nd Property and the 3^rd Property.

63.When cross examined by counsel for the 2^nd defendant, Ms Kwok said she had been an estate agent for some 10 years and runs the Chung Shun Property Agency in Tai Po.

64.She agreed that the address given by her in her witness statement and affirmation was 66 Hang Ha Po Village (which is the address of the 1^st Property).  Giving of that address was her own idea and there was no particular reason why she did not give the Flora Plaza address as her address.  She also agreed that after August 2009, she could not enter the 1^st Property. However, she denied that by giving that address in her witness statement and affirmation, she was trying to create the impression that she had always been living there.  Once again she confirmed that she had treated the 1^st Property as her home and that was the reason why she gave that address.

65.She disagreed with the suggestion that she had never lived with the 2^nd plaintiff at the 1^st Property and had never treated the 1^st Property as her home, and also disagreed with the suggestion that she did not leave any personal belongings in the 1^st Property.

66.Ms Kwok agreed that she had not left any valuable items, cash or jewellery at the 1^st Property, but said that a pair of piglet figurine made of wood and which was of great sentimental value to her (being her gift to the 2^nd plaintiff) was put on the dining table at the 1^st Property and had been thrown away by the 1^st defendant along with all the other personal Property left at the 1^st Property by herself and the 2^nd plaintiff.

67.Ms Kwok also said that in 2008 when the 1^st plaintiff returned to Hong Kong, she had bought a reclining bench for him to sleep in the living room of the 1^st Property because his condition did not allow him to climb up to the 2^nd floor. She also said that the 2^nd plaintiff had paid for the renovation of the 1^st Property and she had purchased the furniture.  In that sense they had renovated the 1^st Property into what it had become.

68.When she had found the 1^st Property to have been sealed off and chained in August 2009, she had initially made a report to the police, but the police did not entertain her complaint since she was not the owner of the 1^st Property.  It was due to this that she then called the 2^nd plaintiff in the UK by long distance call.

69.As for her relationship with Ms Lee and Mr Lau, Ms Kwok said that both Ms Lee and Mr Lau had visited them (herself and the 2^nd plaintiff) at the 1^st Property as well as at Flora Plaza.  She agreed that she had more business dealings with Ms Lee than with Mr Lau, but that she had known Mr Lau even before he worked for those three days in her estate agency.  She said that Mr Lau knew of her relationship with the 2^nd plaintiff.

70.She disagreed with the suggestion that Mr Lau had no further contact with her after working in her estate agency for those three days and also disagreed that Mr Lau had never visited her and the 2^nd plaintiff at the 1^st Property and was not a close family friend of hers.

71.She also said under cross examination that before the 1^st Property was sold, Ms Lee had called her by phone and told her that the ex-wife of the 2^nd plaintiff was offering to sell the 1^st Property.  In reply, Ms Kwok told Ms Lee that the 1^st Property belonged to her ‘father in law’ and was not for sale.

72.In re-examination, Ms Kwok clarified that when she said that in August 2009 after she could not get access into the 1^st Property, she had still gone back there to take care of the flowers, by that she meant that the flowers were planted on a piece of government land at the back of the house on the 1^st Property which used to be a piece of waste land.  But because the flowers were planted there, she had gone there to take care of the flowers.

EVIDENCE FROM THE 1^ST PLAINTIFF

73.The 1^st plaintiff gave his evidence via video link from the UK.  At the time he gave his evidence, the 1^st plaintiff was a frail old man not in very healthy condition, having had a fall earlier in the year.

74.The 1^st plaintiff adopted as his evidence his witness statement and also made reference to the affirmation sworn by him in these proceedings on 9 October 2009.

75.However, during cross examination, it emerged that apart from being able to recognize his own signature on the conveyancing documents put in evidence, he was wholly unhelpful in answering any of the questions put to him in cross examination giving most of the time the answers “I don’t know” and “I don’t remember anything”.

76.Effectively therefore, there could not have been any sensible cross examination of the 1^st plaintiff on what was stated by him in his witness statement which he adopted as his evidence.  Moreover, the adoption of his witness statement as his evidence in chief was only at the behest of the plaintiffs’ counsel.

77.Even in re-examination most of his answers were “I don’t remember” and “I don’t know”.  However, when the name of ‘Lam Lok Yiu’ (ie the 1^st defendant) was mentioned by counsel for the plaintiffs during re-examination, that the 1^st plaintiff came forth with the answer saying “my intention was for him to deal with them (the Properties) and not for him to sell them”.

EVIDENCE FROM THE 2^ND PLAINTIFF

78.The 2^nd plaintiff adopted the contents of his witness statement as his evidence in chief which can be summarized as follows.

79.The Properties were inherited by his father (the 1^st plaintiff) from his grandfather.  In 2009 he found out that the 1^st defendant had entered into sale and purchase agreements with the 2^nd defendant purporting to sell the 1^st Property and the 2^nd Property to the 2^nd defendant.  A land search was then conducted and it was found that a Deed of Gift in respect of the 1^st Property and two assignments in respect of the 2^nd Property and the 3^rd Property were registered in the Land Registry by which the 1^st plaintiff had transferred the Properties to the 1^st defendant.

80.It is however the plaintiffs’ case that it was never the 1^st plaintiff’s intention to gift or sell the Properties to the 1^st defendant, but that the 1^st plaintiff had intended for the 1^st defendant to hold the Properties on trust for the benefit of the whole family (the Lam Family) and not to be disposed of without the consent of all of them.

81.As for the 2^nd defendant, the plaintiffs’ case is that at the material time, the 2^nd defendant, through its estate agent, Ms Lee and its director Mr Lau, both being family friends of himself (the 2^nd plaintiff) knew of the arrangements in respect of the 1^st Property and the 2^nd Property but nevertheless purchased them with that knowledge and thereby assisting in the wrong of the 1^st defendant.

82.The 2^nd plaintiff then referred to the four affirmations filed by him herein and says that paragraphs 12 to 14 of his 1^st Affirmation are not an accurate summary of the true facts (as already noted in his 3^rd Affirmation) and adopt the contents of his affirmations save and except paragraphs 12 to 14 of his 1^st Affirmation.

83.The 2^nd plaintiff then went on to deal with and explain the allegations made by the defendants.

84.As for the allegation by the 1^st defendant that the Properties were given to the 1^st defendant by the 1^st plaintiff as being part of the distribution of assets to the male descendants of the 1^st plaintiff, the 2^nd plaintiff denied such allegation to be true.  He further explained that Lot 315 and Lot 311 in DD 16 were transferred to himself and Lam Wong Sing for the purpose that small house (or Ding house) might be built of them under the small house policy.

85.As for Section A of Lot No 258 in DD 16, this land was part of Lot No 258 of DD 16.  Originally, the 1^st plaintiff had intended that this Section A of Lot No 258 should also have been taken care of by the 1^st defendant, but in the Lunar New Year of 2008, there was a family gathering in Hong Kong and at that gathering there was a family dispute concerning the 1^st defendant (who had failed to attend the gathering), and because the 2^nd defendant had tried to defend the 1^st defendant, this made the 1^st plaintiff angry and the 1^st plaintiff decided to entrust Section A of Lot No 258 of DD 16 to Lam Tin Fook instead of the 1^st defendant.

86.The 2^nd plaintiff also said in evidence that the 1^st Property had always been regarded as an ancestral house of the Lam Family and whenever the 1^st plaintiff and the siblings of the 2^nd plaintiff returned to Hong Kong from time to time from the UK, they would live at the ancestral house.

87.As for his own stay at the 1^st Property, the 2^nd plaintiff regarded himself as having possession of the 1^st Property after all his brothers had emigrated to the UK leaving him as the only son (of the 1^st plaintiff) in Hong Kong.  The 2^nd plaintiff says that apart from the time he was in UK, all along he had lived with his family members in the 1^st Property until his divorce in 2002.  After his divorce he had continued staying at the 1^st Property alone until August 2009.  He denied the allegation of the 1^st defendant that he (the 2^nd plaintiff) was permitted to stay at the 1^st Property by his son the 1^st defendant “as a gesture of his goodwill”.

88.The 2^nd plaintiff was living at the 1^st Property immediately before he left Hong Kong in June 2009 to visit the 1^st plaintiff in the UK and that during late May he said that neither Mr Lau nor any other potential buyer had come to view or inspect the 1^st Property as alleged by Mr Lau.

89.It is also the evidence of the 2^nd plaintiff that Ms Kwok had treated the 1^st Property as her other home and had placed personal belongings including clothes and shoes there.  The 2^nd plaintiff also had his personal belongings there which included his collection of books concerning the Lam village.  Therefore anyone visiting the 1^st Property and seeing its condition and situation with all the personal belongings must have known that somebody was living there.

90.As for his relationship with his ex-wife Leung Kit Chun, the 2^nd plaintiff’s evidence was that the allegations made by the 1^st defendant is not true.

91.He explained that the so-called matrimonial home at Serenity Park, although purchased in the joint names of himself and Leung Kit Chun, however, he was the main party providing the funds for the down payment and the mortgage repayments since he was the major source of income for the family and that Leung Kit Chun only did casual work after their marriage.  He denied that there were equal contributions to the so-called matrimonial home.

92.In any event, the Serenity Park property was purchased for the purpose of investment and the family had never lived there as a matrimonial home.  It was agreed between the 2^nd plaintiff and Leung Kit Chun that the Serenity Park Property be sold off in 1993 because by then the price of that Property had doubled what it had been bought for in 1992 giving a profit of some $780,000.

93.It was also agreed between them that part of that profit would be used to fund their emigration to the UK and partly to invest in the business known as Chop Chop I, being a takeaway food business started by the 2^nd plaintiff’s brother Lam Tin Fuk in the UK.

94.The 2^nd plaintiff left for the UK in early 1994 and had invested £60,000 in Chop Chop I.  Leung Kit Chun and the 1^st defendant joined him in the UK in September 1994.

95.The 2^nd plaintiff denied that Leung Kit Chun had entrusted $1.4 million of her money to him or had invested same in Chop Chop I.  He also denied that there was any agreement between them as to an equal share in the business of Chop Chop I.  That matter was not dealt with as a business arrangement but only as a family arrangement in the context of starting a new life in the UK, the only concern of all being the good of the family especially for the son, ie the 1^st defendant.

96.Unfortunately the business of Chop Chop I did not turn out to be profitable and it was eventually sold off in 1995 at a loss, namely, for £33,000.  At around that time about July or August 1995, Leung Kit Chun and the 1^st defendant returned to Hong Kong because they could not adapt to the life in the UK.  The £33,000 from the sale of Chop Chop I was given to Leung Kit Chun to take back to Hong Kong with the 1^st defendant.

97.Later, the 2^nd plaintiff also returned to Hong Kong in 1996.

98.In 2002 he and Leung Kit Chun divorced due to the breaking down of the relationship between them.  There was no financial support to for Leung Kit Chun after their divorce due to the fact that Leung Kit Chun did not ask for any and that he knew that Leung Kit Chun had substantial assets which enabled her to maintain her living.  He knew that she had at least a property in Tai Po.

99.He did not tell his father, the 1^st plaintiff, of his divorce with Leung Kit Chun until 2008 when the 1^st plaintiff came to Hong Kong.

100.As for the knowledge of the 2^nd defendant, the 2^nd plaintiff’s evidence was that through Ms Kwok he had known Ms Lee for over six years and Ms Lee was regarded as a family friend by them.  Ms Lee had visited the 1^st Property and during their chat he had told Ms Lee about his family affairs and that the Lam Family regarded the Properties as their ancestral properties which were intended to be held by the 1^st defendant as trustee for the benefit of the Lam Family.

101.As for Mr Lau, in 2004, he had been employed by Ms Kwok at the Chung Shun Property Agency as an estate agent, but that employment lasted only for three days.  During that time, the 2^nd plaintiff had come to know Mr Lau and have maintained contact ever since.  During chats with Mr Lau, the 2^nd plaintiff had also told Mr Lau about his family affairs including the fact that the Properties were ancestral properties of the Lam Family and were intended to be held by the 1^st defendant as trustee for the benefit of the Lam Family.

102.Thus both Ms Lee and Mr Lau knew of the trust in relation to the Properties and the fact that no consent had been given (by all the members of the Lam Family) for their purported purchase by the 2^nd defendant.

103.In cross examination the 2^nd plaintiff explained that Lot 315 was given to him by his father, the 1^st plaintiff, in order for a village house (Ding house) to be built on it.  The scheme for building the village house was that due to the fact that they (the Lam Family) did not have the money to build a village house, an arrangement was made to co-operate with developers for the developer to build the village house.  For that reason, he had to be given Lot 315 and made a full owner of that land since only then could he exercise his Ding rights to build the village house on the land.  After the village house of three storeys were built by the developer, the developer would retain two storeys and the Lam Family would be able to keep one storey for themselves.  In order to facilitate the developer to develop the land in this way, they had to accede to the procedure of the developer or else the permission from the government would not be given.  Thus the transfer of Lot 315 into the names of Chung Chin Lin and Hui Yuk Lan Boilse as joint tenants in 2003 as shown in the Land Registry were not names which the 2^nd plaintiff knew of but which was part of the procedure carried out by the developer.  So too was the execution by the 2^nd plaintiff of a Power of Attorney in favour of one Lee Choi Fung part of that procedure by the developer.

104.According to the 2^nd plaintiff, there was a plan to develop the lands held by the 1^st plaintiff. Since the 1^st plaintiff had three sons, altogether there were totally four Ding rights.  The plan involved building four Ding houses on three pieces of land.  Lam Wong Sing would claim the Ding rights in respect of Lot 311.  The 2^nd plaintiff himself would claim the Ding rights in respect of Lot 315.  The developer would build for them four Ding houses each of three storeys, totalling 12 storeys.  For each Ding house so built, the developer would get two storeys to meet the costs of the development and one storey would go back to the Lam Family.  In this way, when the four Ding houses were built, with 12 storeys, the Lam Family would get back four storeys.

105.Two Ding houses had already been built on Lot 311 and Lot 315.  Two further Ding houses were to be built on Lot 258 using the Ding rights of the 1^st plaintiff and the 1^st defendant.

106.However, due to this dispute in this present action, the developer has stopped building the Ding houses for the Lam Family.

107.He further explained that Lot 315 came within that scheme and that the name of the purchaser and the consideration stated in the assignments in respect of that Lots had nothing to do with him, although he was the seller stated in the assignment, but all that was done by the developer to facilitate the development of the land.

108.The same applied to Lot 311 which was conveyed by the 1^st defendant to Lam Wong Sing, but when Lam Wong Sing passed away, the person holding the Power of Attorney then conveyed that land to Lam Alan Ying Chuk since the Ding rights is only valid when the person holding the right is alive.

109.The 2^nd plaintiff denied having sold Lot 315 and explained that if he had sold off Lot 315, he would not be able to preserve the ancestral land and there would be no land to build the Ding house despite having the Ding rights.  He further explained that the assignment in respect of Lot 315 was signed by the 1^st defendant at the solicitor’s office in Hong Kong and then that assignment was sent to the UK for him to sign.

110.The 2^nd plaintiff further said that in September 1995 the 1^st plaintiff and the elder brother of the 2^nd plaintiff came back to Hong Kong to implement the scheme of developing Ding houses on the lands, but that he had to stay in the UK.  When they returned to the UK from Hong Kong, they told him of the scheme and he agreed to it and that was how he came to know how the documents were signed.  He was only told by the 1^st plaintiff that the properties of the Lam Family had been handed to the 1^st defendant to take care as the person in charge since the 1^st defendant was the only male descendant of the Lam Family in Hong Kong.  However, the 1^st plaintiff did not specifically point out the Properties, but only made clear that all the properties of the Lam Family were not for sale.

111.The 2^nd plaintiff agreed that no maintenance had been provided for his ex-wife Leung Kit Chun in their divorce, but denied that that was due to the fact that the 1^st plaintiff had already provided for Leung Kit Chun by giving the Properties to the 1^st defendant.  He further explained that there was no maintenance for Leung Kit Chun because Leung Kit Chun had forgoed any maintenance since he was out of a job when they divorced.  He had stopped paying her any money when he was fired from his job in early 2002 and two months later, she brought divorce proceedings against him.  They were divorced in 2003.

112.When cross-examined by counsel for the 2^nd defendant, the 2^nd plaintiff agreed that he only came to know Mr Lau through Ms Kwok, but that Ms Kwok had known of Mr Lau even before she had employed him to work in her estate agency office.

113.The 2^nd plaintiff also agreed that Mr Lau had never visited him and Ms Kwok at the 1^st Property.

114.In re-examination, the 2^nd plaintiff said that when the 1^st plaintiff returned to the UK in 1995 from Hong Kong and told him that the 1^st defendant would take care of things in Hong Kong, the 1^st plaintiff did not specify any Lot numbers of the lands, but that he (the 2^nd plaintiff) had assumed on his own that the 1^st defendant would also take care of Lot 311 and Lot 315.

EVIDENCE FROM CHAN KAM WUN

115.Once again as with other witnesses, Chan Kam Wun adopted the contents of his witness statement as his evidence-in-chief.

116.In summary, his evidence was that he has been working as a conveyancing clerk since 1988 and has over the years acquired knowledge and experience in coveyancing matters and transactions from a legal point of view working as a conveyancing clerk in a solicitor’s firm.

117.In August 1995, he was contacted by Leung Kit Chun who told him that the grandfather of the 1^st defendant, namely, the 1^st plaintiff, wanted to distribute three of his properties to the 1^st defendant and some other properties to his other male descendants.  When asked what form the conveyances were intended to take, Leung Kit Chun also told him that the 1^st defendant had in mind to sell the properties to developers.  Accordingly, he prepared two assignments pending confirmation of instructions from the 1^st plaintiff.

118.On 2 September 1995, the 1^st plaintiff, the 1^st defendant and Leung Kit Chun attended the offices of Messrs Leung Kin & Co.  After verifying the identities of the 1^st plaintiff and the 1^st defendant, Chan Kam Wun then took instructions from the 1^st plaintiff concerning his disposition of the Properties.

119.The 1^st plaintiff gave him instructions that the 1^st plaintiff wished to dispose of the 1^st Property, the 2^nd Property and the 3^rd Property to the 1^st defendant absolutely.  The 1^st plaintiff also gave instructions that the 1^st Property should be transferred by way of a gift.  He then explained to the 1^st plaintiff that by using a Deed of Gift, within the first three years of the Deed of Gift, it would be difficult to sell and also impossible to get a mortgage.

120.The 1^st plaintiff then gave him instructions that the 2^nd Property and the 3^rd Property be dealt with by way of an assignment.

121.Thereafter the question of payment was discussed and the 1^st plaintiff confirmed that the consideration for the assignments of the 2^nd Property and the 3^rd Property had been settled and set off between the 1^st plaintiff and the 1^st defendant, but gave instructions to him to put down a notional consideration of $200,000 and $150,000 respectively in those two assignments.

122.It was under those circumstances that the assignments for the 2^nd Property and the 3^rd Property was prepared by him and he fully explained and interpreted the contents of both assignments to the 1^st plaintiff and the 1^st defendant and both of them acknowledged their understanding of same.  Both of them signed the two assignments in his presence and he witnessed both assignments and signed on the witness clause and interpretation clause of both.

123.Since no money changed hands at the offices of Leung Kin & Co upon the signing of the two assignments of the 2^nd Property and the 3^rd Property, he prepared two acknowledgments to confirm the earlier instructions of the 1^st plaintiff that payment had been settled between the 1^st plaintiff and the 1^st defendant between themselves.  The acknowledgments were then fully interpreted to both the 1^st plaintiff and the 1^st defendant. Both the 1^st plaintiff and the 1^st defendant signified their understanding and then signed on the two acknowledgments.

124.The 1^st defendant had to leave early, but the 1^st plaintiff indicated that he (ie the 1^st plaintiff) should also sign the Deed of Gift in respect of the 1^st Property first since he would return to England soon.  The Deed of Gift was then interpreted and explained to the 1^st plaintiff who signed after signifying his understanding of the contents.

125.It was not until 15 November 2009 that the 1^st defendant attended the office of the solicitor’s firm again.  Chan Kam Wun then interpreted and explained the Deed of Gift to the 1^st defendant who then signed on it.  Chan Kam Wun then signed on the witness clause.  Accordingly, the Deed of Gift was dated 15 November 2009.

126.In cross-examination, Chan Kam Wun said that the initial instructions to him had come from Leung Kit Chun who said she was referred to their solicitors firm by a clansman, Lam Hang Seng who was a developer of Ding houses.

127.He agreed that from the initial instructions given by Leung Kit Chun, he would have obtained all the requisite information including the Lot numbers of the lands for him to prepare the documentation.  Those documentation were all prepared before the 1^st plaintiff attended their offices on 2 September 1995.

128.In her initial instructions, Leung Kit Chun had said that the Properties were to be assigned to the 1^st plaintiff’s grandson and from that he had got the impression that the Properties were gifts to the 1^st defendant by the 1^st plaintiff.

129.When asked whether Leung Kit Chun had told him that the 1^st defendant intended to sell the Properties to developers, Chan Kam Wun said that he cannot remember the detail of what was said, but that he had marked that down in the initial instructions given to him and therefore he was able to recall that was what Leung had told him.

130.He also explained that in 1995 a deed of gift may give rise to problems due to the fact that estate duty may be attracted within three years from the deed of gift, therefore banks would not grant mortgage where a deed of gift was used.  That problem can be avoided if on the face of the transfer, it appears to be a sale and purchase transaction.

131.He disagreed with counsel for the plaintiffs that where the intention was to make a gift, and by carrying it out in the form of an assignment was misleading.  He explained that the initial instructions from Leung Kit Chun was that a transfer of names for the Properties were required.  After explaining to her the difference in respect of an assignment and a deed of gift, she gave instructions that one was to be carried out by way of a deed of gift and the other two by assignments.

EVIDENCE FROM THE 1^ST DEFENDANT

132.The 1^st defendant also adopted both his witness statements as his evidence-in-chief.  The relevant part of his witness statements give the following account.

133.The 1^st plaintiff has three sons, Lam Wong Sing, the 2^nd plaintiff and Lam Tin Fuk, as well as two daughters, Lam Yuk Yang and Lam Yuk Tai.

134.The 1^st plaintiff, being the only son of his father, Lam Yue Choi, inherited from Lam Yue Choi a number of properties other than the Properties.

135.He produced the Rent Roll which showed that in September 1959, the 1^st plaintiff owned a number of pieces of land including the Properties.

136.The land search records also show that three of those pieces of land had been sold off to third parties (being Lot No 1111 and Lot No 1284 both in DD 7, and Lot No 474 in DD 16).

137.The land search records also showed that Lot No 306 in DD 16 was initially retained by the 1^st plaintiff himself, then transferred to Lam Tin Fuk by a Deed of Gift dated 30 October 2009.  Section A of Lot 258 in DD 16 was also transferred to Lam Tin Fuk by the 1^st plaintiff by Deed of Gift dated 15 June 2008.

138.It is common ground that Lot 311 was shown from the land search records to have been assigned to Lam Wong Sing in 1995 and then later transferred to his son Lam Alan Ying Chuk.

139.It is also common ground that Lot 315 was shown from the land search records to have been transferred to the 2^nd plaintiff in 1995.

140.The 1^st defendant stated that in 1991, his mother and the 2^nd plaintiff jointly contributed to purchase their matrimonial home in Serenity Park and had lived there until they emigrated to England in 1993.

141.The 2^nd plaintiff had told his mother that the only way of emigrating to England was by way of investment.  As a result, the matrimonial home was sold.  Moreover, his mother had also contributed her life savings which she gave to the 2^nd plaintiff. Totally her share of the sale proceeds from the sale of the matrimonial home and her life savings came to some $1.4 million.

142.That money was used by the 2^nd plaintiff to invest in the food business of Lam Tin Fuk in the UK called Chop Chop I.  However, that business was put in the sole name of the 2^nd plaintiff and not, as originally agreed with Leung Kit Chun by the 2^nd plaintiff, in their joint names.  Leung Kit Chun was therefore deprived of all her contributions and her life savings by the 2^nd plaintiff.

143.When the business Chop Chop I failed, the 2^nd plaintiff and Leung Kit Chun separated in about 1994.  Due to the break-up of the family, he and his mother returned to Hong Kong from the UK in October 1994.

144.In 1995, the 1^st plaintiff came to Hong Kong escorted by Lam Wong Sing.  The 1^st plaintiff was already in his eighties by then.  The 1^st plaintiff then arranged to distribute the various pieces of lands belonging to him to the male descendants of the Lam Family.  The 2^nd plaintiff was given Lot 315, Lam Wong Sing (later his son  Lam Alan Ying Chuk) got Lot 311.  Section A of Lot 258 in DD 16 went to Lam Tin Fuk.  The 1^st plaintiff himself retained Lot 306 in DD 16 which he wished to keep as an ancestral home, and the 1^st defendant was given the Properties since he reached 18 years of age in August 1995.  In that way, every male of the Lam Family got a piece of the ancestral legacies.

145.The 1^st defendant further explained why he was given the Properties being three pieces of land which was more than the other male descendants.  The reason for that was due to the fact that the 1^st plaintiff realized and sympathized with Leung Kit Chun having been cheated of her share of the matrimonial home and her life savings by the 2^nd plaintiff.

146.Therefore when the 1^st plaintiff was in Hong Kong in 1995, the 1^st defendant and Leung Kit Chun had approached the 1^st plaintiff and the 1^st defendant had indicated to the 1^st plaintiff of possible legal proceedings being commenced in England against the 2^nd plaintiff to recover the monies he had cheated from Leung Kit Chun.  The 1^st plaintiff, being worried as to such possible legal actions against the 2^nd plaintiff, agreed to give two more pieces of land to the 1^st defendant to compensate the loss of Leung Kit Chun of the $1.4 million.

147.That was also the reason why Leung Kit Chun did not make any claim for financial provisions during the divorce proceedings with the 2^nd plaintiff when they divorced in 2004.

148.The intention of the 1^st plaintiff was for the 1^st defendant and his mother to rebuild the house already standing in the 1^st Property and for them to live there thus that was given to him by a Deed of Gift.  However, the 1^st defendant informed the 1^st plaintiff that he had no money to rebuild on the 1^st Property thus the 1^st plaintiff was agreeable to them to sell off the 2^nd Property and the 3^rd Property in order to raise sufficient money to rebuild the 1^st Property. In so agreeing, the 1^st plaintiff signed a “Sale of Property Form” dated 18 November 1996 to the Rating and Valuation Department.

149.The 1^st defendant also confirmed and supported the evidence of Chan Kam Wun that the conveyancing documents in respect of the Properties were explained and interpreted to the 1^st plaintiff by Chan Kam Wun when they attended the solicitor’s office before the 1^st plaintiff signed on those conveyancing documents.

150.At the solicitor’s office the 1^st plaintiff also confirmed his waiving of the considerations stated in the two assignments in respect of the 2^nd Property and the 3^rd Property by signing the acknowledgment prepared by the solicitors.  One of the reasons for his waiving the considerations was the agreement of Leung Kit Chun to forego all claims against the 2^nd plaintiff in respect of her $1.4 million.

151.The 1^st defendant also gave evidence that initially he had wanted to sell the 2^nd Property and the 3^rd Property, but the market was no good due to the SARS outbreak in 2003.  In about May 2009 he heard from a local estate agent that a company (now known to be the 2^nd defendant) was interested in the 2^nd Property and the 3^rd Property for development.

152.By that time he had also decided to sell the 1^st Property as well.  Therefore an inspection of the 1^st Property and the 2^nd Property was arranged with the representatives of the 2^nd defendant in May 2009.  The 1^st defendant was present at both inspections and confirmed that the 1^st Property was vacant at the time of the inspection with nobody living there.  The 2^nd Property was a piece of barren land with no building thereon.

153.When cross-examined by counsel for the 2^nd defendant, the 1^st defendant said that he did not know either Ms Lee or Mr Lau personally before the sale, but after the sale and after this action started, he came to know their names from the documents in the case.  He also said that the Properties were put on the market and that he had engaged estate agents for that purpose.

154.The inspection of the Properties took place in May 2009 by prospective purchasers.  Nobody was living in the 1^st Property, there were no clothes hanging around and it was not being occupied, but that some sundry items had to be moved away later.

155.When cross-examined by the plaintiffs’ counsel, the 1^st defendant agreed that the distribution arrangement of the 1^st plaintiff to his male descendants were to the 1^st plaintiff’s sons as well as his grandsons.  However, he was unable to explain why  Lam Alan Ying Chuk was not given any land in his own right, but only obtained Lot 311 of DD 16 after Lam Wong Sing passed away.

156.He also did not know why Lam Tin Fuk was not given any piece of land by the 1^st plaintiff in 1995.

157.He disagreed with counsel’s suggestion that there was no distribution scheme as suggested by him.

158.When referred to paragraph 19 of his first witness statement and paragraph 22 of his affirmation and asked if  Lot 306 in DD 16 was the ancestral home, he said he may have made a mistake in his witness statement (and affirmation) since Lot 306 was only a piece of land with no building on it.

159.He said that the 1^st Property had a building on it but disagreed that the 1^st Property constituted the ancestral home of the Lam Family.  He did not know that the 1^st plaintiff had stayed at the 1^st Property when the 1^st plaintiff came back to Hong Kong in 2008.  He disagreed with the suggestion that he was asked to come along to see his grandfather in 2008 but did not do so, saying that he did not even know that his grandfather had come back in 2008.

160.He also said that he came to know that his grandfather was sympathetic to his mother and gave him two more pieces of land to compensate his mother’s loss was as a result of what his grandfather had told him in a conversation where he alone was present with his grandfather but that his mother was not present.  He also said that it was at this conversation between him and his grandfather alone that he told his grandfather that he had no money to build to rebuild the 1^st Property.

161.He further said that there was no occasion when he, his mother and his grandfather met to discuss the Properties.

162.When questioned on the form signed by the 1^st plaintiff alleged to be to the Rating and Valuation Department, the 1^st defendant agreed that the heading on that form showed that the form was from the Inland Revenue Department and not the Rating and Valuation Department.  The 1^st defendant also agreed that he did not witness the 1^st plaintiff sign on that form nor did he see the 1^st plaintiff return that form to the department concerned.

163.He agreed that he did not pay the 1^st plaintiff the stated amount of consideration for the 2^nd Property and the 3^rd Property.

164.He also said that while he was in the UK with his parents there, he was studying and his parents did not discuss with him the financial status of the family nor the details of what had been agreed between them concerning the business operations in respect of Chop Chop I.  Therefore he had no idea of his mother’s life savings or her contribution of same to the 2^nd plaintiff.

165.It was only in 1995 that he was told and came to know of what happened between his parents and the cause of his mother returning to Hong Kong with him.  After returning to Hong Kong with his mother, both of them lived at the 1^st Property until his parents’ divorce in 2002.  His mother also worked at the Baptist Church after returning to Hong Kong.  After the divorce, he and his mother moved out of the 1^st Property and went to live at Tai Wo Centre.

166.He disagreed with counsel’s suggestion that the relationship between his parents broke down not because the 2^nd plaintiff had cheated his mother of her life savings.  He also said that although the relationship between his parents had broken down before he and his mother returned to Hong Kong from the UK, when the 2^nd plaintiff later returned to Hong Kong from the UK, the 2^nd plaintiff had also lived with them at the 1^st Property.

167.The 1^st defendant also said in cross-examination that the arrangements to attend the solicitor’s office was made by his mother although he did not know of the details and the instructions which was given by his mother.  He only attended to sign the conveyancing documents.

168.He can recall that at the solicitor’s office when he attended, he had raised questions concerning the different amounts of the considerations in the two assignments (since he understood that his grandfather was giving the Properties to him) and wanted to know what consequences the stated considerations in the assignments would entail.  The legal representative of the solicitor’s firm then produced the Acknowledgments for them to sign and explained to them that the purpose of that meant that the price stated in the assignments had been settled between him and his grandfather.  However, he cannot be sure if the Acknowledgments had been prepared already by the solicitors or whether they were prepared as a result of his raising this question on the considerations.

169.He cannot remember if his mother or his grandfather raised any questions at the solicitor’s office

170.When asked about the dates on the Acknowledgments which is 18 August 1995, he said he had no idea why the two Acknowledgments was so dated and said that if he had been told of that date on the documents he would have questioned it.

171.He further agreed that as was stated in paragraph 37 of his affirmation, he had allowed the 2^nd plaintiff to use a room in the 1^st Property to store his belongings and as pleaded in paragraph 13(3) of his Defence, he had allowed the 2^nd plaintiff to live in the 1^st Property.  He also knew that the 2^nd plaintiff had a key to the 1^st Property.  However, he did not inform the 2^nd plaintiff of the sale of the 1^st Property and did not ask the 2^nd plaintiff to remove his belongings when the 1^st Property was sold.

172.In re-examination he said that Lam Tin Fuk was given Section A of Lot 258 in DD 16 by the 1^st plaintiff in 2008.  When asked whether he knew why it was given to Lam Tin Fuk in 2008, he could only answer saying that that land was only conveyed to Lam Tin Fuk then.

173.As to the conversation he had with the1st plaintiff in respect of being given the Properties, he said that the reason given by the 1^st plaintiff for giving to the 1^st defendant the Properties was because the 2^nd plaintiff had cheated Leung Kit Chun of her money.  That conversation took place after the 1^st plaintiff returned to Hong Kong in 1995.

174.He also said that at the solicitor’s office he had signed two of the three conveyancing documents first and then had to leave early.  It was some time later that he attended the solicitor’s office to sign the third conveyancing documents in respect of the Properties.

175.After his parents’ divorce in 2002, he and his mother moved out of the 1^st Property but he did not know if the 2^nd plaintiff continued to live there.  When he said he allowed the 2^nd plaintiff to live in the 1^st Property as a gesture of goodwill, he had no specific time frame in mind.

THE EVIDENCE FROM LEUNG KIT CHUN

176.Leung Kit Chun adopeted her witness statement as her evidence in chief, the contents of which can be summarized as follows.

177.She had married the 2^nd plaintiff in September 1974 and divorced him in June 2002.  After their marriage, they had lived in the 1^st Property for a while, and then had lived in various rented accommodations in the Tai Po area.

178.She had always wanted to have her own home.  In 1991, she and the 2^nd plaintiff jointly purchased their own matrimonial home in Serenity Park in Tai Po.  The down payment and subsequent mortgage payments were all contributed equally between the two of them.  At that time, she was working and earning a decent salary, thus she was able to save up some money to fulfill her dream of getting her own home.  When in the witness box, she elaborated on their equal contribution by saying that they had opened a joint named account with the Hang Seng Bank through which the mortgage repayments were made and that both herself and the 2^nd plaintiff contributed equally by depositing money into that joint account to make the mortgage repayment.  That joint account no longer exists now but she cannot remember when it was closed.

179.In 1993, the 2^nd plaintiff wanted to emigrate to the UK to join his other family members there.  Initially she was not keen on that idea since she had no command of the English language, and was worried whether the 2^nd plaintiff would be able to make a living in the UK.

180.Later the 2^nd plaintiff was able to persuade her to emigrate by saying that he could purchase the food business set up by Lam Tin Fuk called Chop Chop I and which was running profitably under Lam Tin Fuk, but that being his brother, Lam Tin Fuk was prepared to sell that business to him.  She was attracted by the idea of having their own Chinese food business which should not require her to have a great command of English.  Moreover, the 2^nd plaintiff was also able to persuade her that an English education would be of great benefit to their son.

181.Accordingly, the matrimonial home at Serenity Park was sold to raise funds to purchase Chop Chop I.  Her share of the proceeds from the sale of the matrimonial home and her own savings totalling some $1.4 million was handed over to the 2^nd plaintiff to meet the expenses of their emigration to the UK and to purchase Chop Chop I.

182.After emigrating to the UK, she found that despite all the assurances given by the 2^nd plaintiff, she was not made a shareholder of Chop Chop I which remained in the 2^nd plaintiff’s sole name.  Moreover, she had to work some 10 hours each day in the food business and the 2^nd plaintiff refused to purchase a replacement matrimonial home for the family in the UK.

183.After a while, she was so disillusioned and convinced that the 2^nd plaintiff had betrayed her and had taken all her life savings for his own personal benefit, this led to repeated arguments between them and finally she decided to leave the UK and returned to Hong Kong with the 1^st defendant in October 1994.

184.Thereafter, the 2^nd plaintiff lost their entire investment including her $1.4 million and the 2^nd plaintiff also returned to Hong Kong at the end of 1996.  When the 2^nd plaintiff returned to Hong Kong at the end of 1996, he returned to Leung Kit Chun (living together with her and the 1^st defendant at the 1^st Property) because the 2^nd plaintiff knew that the 1^st plaintiff had distributed the Properties to the 1^st defendant.

185.She later discovered that the 2^nd plaintiff had extramarital affairs with another woman and therefore petitioned for divorce with him in 2002.

186.Before the divorce proceedings were started, the 2^nd plaintiff had said to her that he would only consent to divorce if she did not apply for financial provisions remarking at the same time “you and your son (the 1^st defendant) had already shared my father’s (the 1^st plaintiff) pie, I do not need to pay you both a single dollar.”

187.It was because the 1^st plaintiff had already compensated her loss of her of entire life savings to the 2^nd plaintiff by distributing the Properties to the 1^st defendant in under the family arrangement of 1995 that she did not seek any financial provisions from the 2^nd plaintiff in her divorce even though she knew that the 2^nd plaintiff had been given one piece of land by the 1^st plaintiff under that same family arrangement of 1995, namely, Lot 315 in DD 16.

188.She had been married to the 2^nd plaintiff some 30 years but had never heard mention in the Lam Family of any family trust created by the 1^st plaintiff. Even when she was living in the UK and had day to day contact with the sons and daughters of the 1^st plaintiff as well as weekly family gatherings and meetings with the 1^st plaintiff, she had never heard of any so-called family trust.

189.When the 1^st plaintiff returned to Hong Kong accompanied by Lam Wong Sing in August 1995, she together with the 1^st defendant had met them at a tea house in Tai Po.  At that meeting, the 1^st plaintiff sympathized with her having lost her life savings of some $1.4 million to the 2^nd plaintiff and told her that the 1^st plaintiff felt ashamed and embarrassed and would like to make it up to her.  It was then that the 1^st plaintiff said he would like to distribute the properties he owned to all his male descendants, and because she had been cheated by the 2^nd plaintiff of her life savings, the 1^st plaintiff decided to distribute two more properties to the 1^st defendant.  She was grateful to the 1^st plaintiff and accepted his offer.

190.She then contacted Cham Kam Wun of Messrs Leung Kin & Co, a firm of solicitors having been referred to him by one Lam Hang Seng, a developer of small houses in Tai Po.  She gave instructions to Chan Kam Wun to prepare the necessary title documents for transferring the Properties to the 1^st defendant and an appointment was made for them and the 1^st plaintiff to attend the solicitor’s office on 2 September 1995.

191.She confirmed what was stated by Chan Kam Wun in his witness statement as being factually true as to what had taken place.

192.Under cross examination by counsel for the plaintiffs she said before emigrating to the UK, she had full time work but also did part time work as a domestic helper.  In so far as her full time work was concerned, she had worked as a clerical worker in several companies.  One of those was the Ka Shing Estate Agency company where she could earn as much as a few $10,000 as salary.  In other companies, she earned less, around $10,000 or so.  She had worked in Ka Shing Estate Agency company for a few years and was able to accumulate her own savings.  That was her last job before emigrating to the UK.

193.The 2^nd plaintiff worked as a civil servant and had paid her cash for the household expenses which included his share of the mortgage repayment for the matrimonial home but she also contributed.

194.The purchase price for the matrimonial home came to $700,000 odd and 10% of which had to be paid as down payment.  They purchased the matrimonial home in 1991.  By this time she had been working in Ka Shing Estate Agency company for about five years.

195.As for their emigration to the UK, she was not happy to leave Hong Kong, but happy to learn that the 2^nd plaintiff would have a business of his own.  Finally she decided to emigrate for the good of the family the most important factor being that the son would have a better education. She knew some English and knew it would be difficult to adapt, but eventually decided to emigrate despite the difficulty.

196.She conceded that she was paid for working at the food business in the UK and to that extent what was stated in paragraph 16 of her witness statement was incorrect.

197.As for engaging Messrs Leung Kin & Co, she said she was referred to Chan Kam Wun by one Lam Hang Seng who was an estate agent.

198.When she spoke to Chan Kam Wun, she did not know the difference between a Deed of Gift and an Assignment, but told Chan Kam Wun that one piece of land was a gift from the grandfather (ie the 1^st plaintiff) to her son while the other two pieces of land should be for free sale meaning that after the transfer of those two pieces of land to her son, the 1^st defendant, the two pieces of land should be able to be sold off at any time.

199.It was her evidence that the other two pieces of land were compensation to her by the 1^st plaintiff.  She corrected an earlier answer (in which she said she did not know the purpose for which the three pieces of land were given to the 1^st defendant) as being a mistake in her memory.

200.She also agreed with counsel in cross-examination that at the solicitor’s office it was said that it would make it more convenient for the 1^st defendant to look after the Properties.  However, in re-examination she clarified that answer of hers by saying that when she agreed with counsel, she had agreed that Chan Kam Wun had written out things concerning the Properties gifted to the 1^st defendant. She also said in re-examination that she did not remember if Chan Kam Wun had explained to the 1^st plaintiff that it would be more convenient for the 1^st defendant to look after the Properties.

201.In re-examination she also said that she did not remember if Chan Kam Wun had explained to her the difference between a Deed of Gift and an Assignment.

THE EVIDENCE FROM MR LAU

202.Mr Lau also adopted both his witness statements as his evidence in chief which can be summarized as follows.

203.He is an engineer by profession and also an amateur Property investor.

204.He is the sole owner and sole director of the 2^nd defendant, a shelf company used by him for purchasing Property.

205.In May 2009, he was told by Ms Lee, his estate agent that the 1^st Property, the 2^nd Property and the 3^rd Property were for sale.

206.In late May 2009, he and Ms Lee went to see the 1^st Property and the 2^nd Property together with one Dan Li, the estate agent of the seller and the seller, whom he now knows to be the 1^st defendant.

207.There were also other prospective buyer viewing the 1^st Property which was fully decorated but with no one inside.  He did not see anyone living there but there were some sundry items inside.

208.After viewing the 1^st Property and the 2^nd Property he told Ms Lee negotiate with the seller as he decided to buy them for totally $1 million. When his counter offer was accepted by the seller, two provisional sale and purchase agreements were signed on 9 June 2009 in respect of the 1^st Property and the 2^nd Property.

209.Thereafter, the formal sale and purchase agreements for both properties were signed at the office of Messrs Leung Kin &Co, solicitors on 14 July 2009.

210.Two days before the signing of the formal sale and purchase agreements, he and Ms Lau had again visited the 1^st Property and the 2^nd Property.

211.The door of the 1^st Property was opened by Dan Li for them to inspect.  Once again they found nobody in the 1^st Property but there were still some sundry items which they requested the seller to remove before completion took place since vacant possession had to be delivered.

212.On 13 August, Ms Lee told him that the sundry items had been removed.

213.Mr Lau said that he had no knowledge of the allegations of the plaintiffs that the 1^st defendant was only a trustee holding the properties for the Lam family since the land search carried out showed the 1^st defendant to be the registered owner.  No trust was revealed from the land search records.

214.During the inspections of the 1^st Property, nobody was seen to be living there and the 1^st defendant had free access to the 1^st Property.

215.Mr Lau denied the allegation that he knew through Ms Lee of the family matters of the 1^st defendant or of the Lam Family.

216.While Mr Lau agreed to having worked for three days at the estate agency of Ms Kwok at the end of 2004, he was unable to say whether during those three days he had seen the 2^nd plaintiff or not since he did not know the 2^nd plaintiff and he did not know of the relationship between the 2^nd plaintiff and Ms Kwok and had no idea that he was the boyfriend of Ms Kwok.

217.After working for Ms Kwok for those three days, he had never associated with the 2^nd defendant or Ms Kwok, except having met her on business occasions.

218.Mr Lau said he was not a close friend or family friend of Ms Kwok and had only met her on business occasions.  Ms Kwok had never told him anything about the matters concerning the Lam Family, nor of any trust arrangements of the properties of the Lam Family.

219.When in the witness box, Mr Lau supplemented to what was contained in his witness statement.  He said he intended to purchase the 1^st Property and 2^nd Property for investment.  The 1^st Property was intended to be rented out.  As for the 2^nd Property he had intended to build a 3-storey building on it and then resell it with the building.

220.He had already entered into a tenancy agreement with a tenant in respect of the 1^st Property under which he should have delivered possession to the tenant by 1 September 2009.  However due to this dispute and an injunction having been obtained, he had to cancel the tenancy agreement with the tenant and to pay compensation to the tenant for the cancellation.

221.During the three days that he worked in the Chung Shan Property Agency of Ms Kwok, he was not told who the boss or lady boss was.

222.When cross-examined by counsel for the 1^st defendant, Mr Lau said that before the purchase of the 1^st Property and the 2^nd Property, he did not know the 1^st defendant.

223.Cross-examined by counsel for the plaintiffs, Mr Lau said that during the three days when he worked in Chung Shan Estate Agency, he only knew Ms Kwok to be the boss.  She had instructed him to answer phone calls in the office when she was out of the office and to go outside to distribute leaflets when she was in the office.  No one else was in the office and he did not take any clients to view any premises.

224.He was introduced by a friend to join Chung Shan Estate Agency.  Before joining, he had not met Ms Kwok although he had heard of her name.

225.He did not know the 2^nd plaintiff to be the male boss of Chung Shan Estate Agency.

226.He had a number of Property dealings with Ms Lee as she was his estate agent and had helped him to secure other properties for investment.

227.He had obtained his own estate agent licence not more than six months before he joined Chung Shan Estate Agency.

THE EVIDENCE FROM MS LEE

228.Ms Lee also adopted her witness statement as her evidence.  The contents of that witness statement can be summarized as follows.

229.Towards the end of May 2009, there was an inspection of the 1^st Property and the 2^nd Property and for that purpose a Form 4 titled “Estate Agency Agreement for Purchase of Residential Properties in Hong Kong” dated 24 May 2009 was signed.

230.Present at the inspection of the 1^st Property was herself, Mr Lau, the owner of the 1^st Property (now known to be the 1^st defendant) and his agent, Dan Li.  During that inspection, she could see some sundry items in the building but did not see anyone living there.

231.Having negotiated the purchase price for the 1^st Property and the 2^nd Property on behalf of the 2^nd defendant, provisional agreements in respect of them were signed on 9 June 2009.

232.There was a second inspection of the properties on 12 August 2009 in which she, Mr Lau and Dan Li attended.  Dan Li opened the door of the 1^st Property for them.  There were still the sundry items present but Dan Li assured that the owner would clear up the place before completion.

233.On 13 August 2009, Dan Li phoned her to say that the items were being cleared from the 1^st Property and invited her to inspect it again.  On arrival she saw Dan Li, the 1^st defendant and the wife of the 1^st defendant.  She waited until the items had been cleared from the 1^st Property after which she inspected it again and was satisfied that vacant possession could be delivered.

234.Under cross-examination by counsel for the 1^st defendant she said that before she had learned from Dan Li that the 1^st Property and the 2^nd Property was put on the market for sale, she did not know the 1^st defendant.

235.When cross-examined by counsel for the plaintiffs she agreed to having introduced Mr Lau to work at Ms Kwok’s estate agency but disagreed that the reason for doing so was because Ms Kwok was a friend of hers.

236.She had known Ms Kwok for over 10 years but was not aware and had never heard any son of Ms Kwok address her as “sworn mother”.  She knew Ms Kwok to have a few sons.  One of them works in a restaurant next to the agency where she works and this is the only son of Ms Kwok that she has talked to when she went to that restaurant.  She was told by Ms Kwok that another son of Ms Kwok’s helps out in Ms Kwok’s estate agency.

237.She did not agree that Ms Kwok would chat to her about Ms Kwok’s family matters.

238.When questioned as to whether Ms Kwok had helped out in the restaurant business of Ms Lee, Ms Lee said that a lot of people had helped out in her restaurant business, and that Ms Kwok may have also, but if so it was only for a very little time.  She disagreed that the reason for Ms Kwok working at her restaurant was because Ms Kwok was a good friend of hers.

239.She said she did not know Ms Kwok as well as Ms Kwok alleged, and that their contacts were mainly in business relationships and dealings.

240.When asked whether there were further dealings with Ms Kwok after November 2004, Ms Lee said she remembered a property at Wah Yau Street which Ms Kwok had helped her to buy and which was then rented out to clients introduced by Ms Kwok.  Ms Kwok also helped her to collect the rent at a charge.

241.In this case she had assisted the 2^nd defendant to purchase the 1^st Property and the 2^nd Property. She knew from Dan Li that at the time the 3^rd Property was also put on the market by the seller but she had no contact with the 3^rd Property.

242.She agreed that during the inspection of the 1^st Property, there were furniture in the 1^st Property.  However, she disagreed that the condition of the 1^st Property was suitable for someone to be residing there due to the fact that there were a lot of sundry and miscellaneous items and there was an odour in the 1^st Property which indicated that people had not been living there for a long time.  There was also absence of any signs of anyone living there.

243.She also said that it was important for an estate agent to ascertain if anyone was residing in a Property and important to check if anyone was occupying a Property.  According to her if anyone was occupying the Property then she thought it would have been the 1^st defendant since he had the keys and access to the 1^st Property.  However, she did not ask if anyone else had the keys to the 1^st Property other than the 1^st defendant.

ASSESSMENT OF THE EVIDENCE

244.Ms Kwok struck me as a witness who is prone to exaggeration on a not insignificant scale.

245.Her allegation that Ms Lee and Mr Lau were family friends of hers and the 2^nd plaintiff and had regularly visited them both at her home in Flora Plaza and at the 1^st Property was not backed up by any evidence.

246.Indeed the evidence which came out showed that the association between Ms Kwok and Ms Lee were entirely business associations mainly related to Property dealings.  Her associations with Mr Lau was much less, and even then those associations were again all business related.

247.Ms Lee’s evidence that over the years she had told both Ms Lee and Mr Lau that the 1^st Property, the 2^nd Property and the 3^rd Property were ancestral properties of the Lam Family and were intended to be held by the 1^st defendant as trustee for the benefit of the Lam Family is not only strange, to say the least, that such family matters can be a subject of conversation amongst friends, but more so it is inherently improbable due to the fact that Ms Kwok had conceded in no uncertain terms during her cross examination that she did not even know who was the owner of the 1^st Property, the 2^nd Property and the 3^rd Property on 11 August 2009.

248.For this same reason, it makes her evidence that in a phone call some time in April 2009 she had told Ms Lee that the 1^st Property belonged to her father in law and was not for sale quite unbelievable.

249.Moreover, her evidence that a pair of wooden piglets figurine which held a lot of sentimental value for her as they were a gift by her to the 2^nd plaintiff  was lost when the 1^st defendant threw away all of the belongings from the 1^st Property without notifying them (Ms Kwok even cried when she came to this part of her evidence when cross-examined) has to be regarded with utmost suspicion since not one mention of the wooden piglets was made either by Ms Kwok in her witness statement, until her cross examination, or even by the 2^nd plaintiff whether in his witness statement, or even in the statement given to the police in which he had detailed all of the items which were lost by him from the 1^st Property when he made his report to the police in August 2009.

250.I am therefore unable to accept her evidence that she and the 2^nd plaintiff were close family friends with Ms Lee and Mr Lau and that they both knew that the Properties were held on trust by the 1^st defendant for the benefit of the Lam Family and could not be sold without the consent of the members of the Lam Family.

251.I also do not accept her evidence that she had regarded the 1^st Property as her other home and that she and the 2^nd plaintiff would reside there.  I do however accept that they might go to the 1^st Property from time to time or even occasionally spend a night there for convenience and that they may have left some personal belongings there.  However, that is a far cry from residing in the 1^st Property on a long term or regular basis.

252.I have little hesitation in coming to the view that the exaggeration by Ms Kwok of many areas in her evidence was an attempt to assist the 2^nd plaintiff to bolster up the plaintiffs’ case with the realization that a large part of the  plaintiffs’ case  suffer from a lack of evidence and is open to attack by the defendants.

253.Coming now to deal with the evidence of the 1^st plaintiff, as has already been stated above, the 1^st plaintiff, when he was in the witness box was unable to remember anything other than recognizing his own signatures on the various conveyancing documents.  This had therefore prevented any effective cross examination of the 1^st plaintiff by both defence counsel.

254.Given that cross examination was not possible in the circumstances, I feel that I am unable to give any weight to the matters stated by the 1^st plaintiff in his witness statement and his affirmation.  This is particularly so since the contents of both his witness statement and his affirmation is in stark contradiction to the evidence adduced by the 1^st defendant and his witnesses Chan Kam Wun and Leung Kit Chun.

255.Even that bit of the evidence given by the 1^st plaintiff in re‑examination to the effect that his intention was for the 1^st defendant to deal with the Properties and not to sell them, although appearing to support the case put forward by the plaintiffs, once again that one sentence gives rise to more questions than answers.  As for instance, whether such intention was made known to the 1^st defendant, how it was made known to the 1^st defendant or whether it was an intention kept by the 1^st plaintiff to himself only.

256.Once again that bit of the evidence from the 1^st plaintiff as to his intention coming only at re-examination stage, there could be no cross examination of the 1^st plaintiff on that bit of his evidence.

257.Accordingly, even though there was that evidence from the 1^st plaintiff relating to his intention in respect of the Properties, I am still unable to give any weight to that one statement made by him in re‑examination, nor does it change my view stated above that I could not give any weight to the contents of his witness statement and the contents of his affirmation.

258.Turning now to assess the evidence of the 2^nd plaintiff, I found him to be quite unreliable as a witness and who is prone to exaggeration.

259.In this regard, the first matter which I can refer to is his withdrawal of the contents of paragraphs 12 to 14 of his 1^st Affirmation in his witness statement which he says are inaccurate.  In those paragraphs, the 2^nd plaintiff gave the impression that he was present when the 1^st plaintiff signed the conveyancing documents in respect of the Properties transferred to the 1^st defendant when in truth the 2^nd plaintiff was not present.  Although to his credit, the 2^nd plaintiff has withdrawn those paragraphs of his 1^st Affirmation in his witness statement, those paragraphs should never have been put down by him in his 1^st Affirmation at all, and which is under oath.  The mere fact that the 2^nd plaintiff swore to the truth of those paragraphs in his 1^st Affirmation when it was made underlines his unreliability as a witness, albeit that they have now been withdrawn by him.  No explanation has been given as to how those paragraphs found its way into the 2^nd plaintiff’s 1^st Affirmation.

260.The 2^nd plaintiff also tried to paint the picture that his former wife, Leung Kit Chun only did some casual domestic work in Hong Kong before they emigrated to the UK in 1994.  That evidence undoubtedly was given by him to lay the groundwork for saying that Leung Kit Chun had no savings and had no contribution to their matrimonial home.

261.However, when Leung Kit Chun gave her evidence, it became quite clear that she had worked on a regular and permanent basis in various companies, one of which was with the Ka Shing Estate Agency where she was paid a few tens of thousands of dollars as her monthly salary.  She went on to say that she had worked in Ka Shing Estate Agency for a few years before emigrating to the UK.  This evidence of Leung Kit Chun was not disputed by counsel for the plaintiffs in cross examination either.

262.The fact that Leung Kit Chun was able to name Ka Shing Estate Agency as being one of the offices in which she had worked goes a long way to show that the evidence of the 2^nd plaintiff on this issue was again unreliable and given only with a view to advance his own case that Leung Kit Chun had no savings of her own.

263.The 2^nd plaintiff also gave evidence of the scheme to build four Ding houses on three pieces of the land originally belonging to the 1^st plaintiff whereby the Lam Family would rely on the developer to build the four houses (without having to pay the developer for the building of the four houses) and would be given back one storey from each of the four Ding houses with the other two storeys going to the developer.

264.Firstly, if such a scheme existed, it is inconceivable that the details of this scheme was not included in any of the 2^nd plaintiff’s witness statement but only emerged in cross-examination.

265.Secondly, the details as given by the 2^nd plaintiff do not hold water for the following reasons.  It was said by the 2^nd plaintiff that the four Ding houses to be built was based on the Ding rights of each of the 1^st plaintiff and his three sons and that the four houses were to be built on Lot 311, Lot 315 and Lot 258.  Lot 311 was transferred into the names of Lam Wong Sing (and later to Lam Alan Ying Chuk) and Lot 315 into the name of the 2^nd plaintiff. However, Lot 258 (which I understood to be a reference by the 2^nd plaintiff to the 3^rd Property) was transferred into the name of the 1^st defendant, but no explanation has been given as to how, if Lot 258 was transferred into the name of the 1^st defendant, the Ding rights of the 1^st plaintiff and his other son, Lam Tin Fuk could be utilized for the building of the remaining two Ding houses on Lot 258.

266.From the totality of his evidence, it is also quite clear that before August 2009, the 2^nd plaintiff had no knowledge as to the identity of the specific owners of the various pieces of land, except that he had been told by the 1^st plaintiff after the 1^st plaintiff returned to the UK in September 1995 that the 1^st defendant would take care of the lands in Hong Kong.

267.On this basis, the 2^nd plaintiff is no different from Ms Kwok, and without such knowledge, it cannot be possible that during casual conversation with Ms Lee and/or Mr Lau he was able to tell them that the Properties were held by the 1^st defendant on trust for the Lam Family and could not be sold without the consent of all the members of the Lam Family.

268.That evidence coming from the 2^nd plaintiff again underlines the kind of exaggeration by the 2^nd plaintiff throughout his evidence.

269.I also have grave reservations as to the evidence of the 2^nd plaintiff that the reason why Leung Kit Chun did not ask for financial provision from him during their divorce was due to the fact that he was out of a job at the time.  This as a reason cannot hold water since Lot 315 had by then been registered in the name of the 2^nd plaintiff, and if Leung Kit Chun had wanted to could just as easily have pointed to the fact that the 2^nd plaintiff was the registered owner of Lot 315 from the public records kept at the Land Registry to support her claim for financial provision.

270.Turning now to deal with the evidence of Chan Kam Wun.  He is an independent witness in the sense that he has no interest in this dispute and has nothing to gain from the outcome of this case.

271.While it is true that he could only remember by refreshing his memory from what had been noted down by him in his own notes relating to the instructions that he had been given, but that in many minor detail, he was unable to recall the exact occurrence when the parties attended the solicitor’s office on 2 September 1995, that is only to be expected since those matters occurred some 16 years ago.

272.He was, however, undented in cross-examination and I have no difficulty accepting his evidence as true.

273.As for the 1^st defendant, I accept his evidence that there was a distribution by the 1^st plaintiff of the various pieces of land originally held by the 1^st plaintiff in September 1995.  This evidence of his is supported by the documentary conveyancing documents.

274.Indeed the documentary evidence shows that Lot 311 was transferred to Lam Wong Sing and Lot 315 to the 2^nd plaintiff. It should also be noted that the assignments in respect of Lot 315 which was dated 1 September were also prepared and handled by the same firm of solicitors, namely, Messrs Leung Kin & Co.

275.In this respect, there is not the slightest suggestion that either the 1^st defendant or Leung Kit Chun had any part to play in giving instructions to the solicitors concerning the assignment of Lot 315 to the 2^nd plaintiff.  The instructions therefore could only have come from the 1^st plaintiff.

276.There is also not the least bit of evidence to show that Lot 311 and Lot 315 were, after their respect transfer to Lam Wong Sing and the 2^nd plaintiff, that they were held on trust by either Lam Wong Sing or the 2^nd plaintiff.  Lam Alan Ying Chuk, who became the registered owner of Lot 311 upon the death of Lam Wong Sing was not called to give evidence to say that he held Lot 311 as a trustee on behalf of the Lam Family or anyone else for that matter.

277.However, the most significant part of the evidence which is inconsistent with Lot 311 and Lot 315 being held on trust for the Lam Family is the fact that there is documentary evidence to show that Lot 311 was sold by Alan Lam Ying Chuk (as beneficial owner according to Schedule 1 Part 1 of the Sale and Purchase Agreement) to third parties (namely, Wong Chi Wai Alex and Fong Pui King as joint tenants) at a consideration of $1.6 million. The date of that Agreement for Sale and Purchase being 19 May 2003.

278.There is also documentary evidence in the form of Land Search record from the Land Registry to show that Lot 315 was sold off to third parties as follows:

(a) a one-third share to Chung Chin Lin and Hui Yuk Lan Boilse as joint tenants on 31 December 2003 at a consideration of $1.463 milion;

(b) another one-third share to Chan Kwan Chee and Chung Chau Yin as joint tenants on 31 December 2003 at a consideration of $1.21 million; and

(c) a further one-third share to Hui Ching Han on 14 July 2005 at a consideration of $1.698 million.

279.This evidence showing the entire disposal of Lot 315 to third parties is wholly inconsistent with the evidence from the 2^nd plaintiff that the scheme of arrangements to develop Lot 315 was such that at the end of the day, the Lam Family would be given one of the three storeys of the Ding house to be built on Lot 315.

280.I also take into account the fact that Section A of Lot 258 was later transferred to Lam Tin Fuk in 2008, the other son of the 1^st plaintiff.  Again there is no evidence that Lam Tin Fuk holds that piece of land as a trustee for the Lam Family either, and not in his own right absolutely.  The explanation given by the 2^nd plaintiff that it was due to a family dispute which arose in 2008, that the 1^st plaintiff decided to transfer this piece of land to Lam Tin Fuk cannot explain why, in those 13 years between 1995 and 2008, if it was the intention of the 1^st plaintiff to also have the 1^st defendant to take care of this piece of land, together with the other lands, nothing was done by the 1^st plaintiff to transfer this piece of land also into the name of the 1^st defendant.

281.Therefore all the evidence before me point in the direction that after 1995, all of the male descendants of the 1^st plaintiff have been given some land by the 1^st plaintiff.

282.I accept the evidence of Leung Kit Chun that she had made over her life savings of some $1.4 million to the 2^nd plaintiff at the time of their emigration to the UK and which had been used by the 2^nd plaintiff to purchase or invest in Chop Chop I.

283.It follows from that that I also accept the evidence from both Leung Kit Chun and from the 1^st defendant that a part of the Properties that were given to the 1^st defendant by the 1^st plaintiff was to compensate Leung Kit Chun of having lost out on her life savings as well as her share of the proceeds from the sale of the matrimonial home in Serenity Park which she had given to the 2^nd plaintiff to finance the purchase of Chop Chop I at the time of their emigration to the UK.

284.Admittedly, there were some minor discrepancies between the evidence from the 1^st defendant and the evidence given by Leung Kit Chun, when the 1^st defendant said that there was no meeting between himself, the 1^st plaintiff and Leung Kit Chun when the 1^st plaintiff was back in Hong Kong in 1995, but that in the evidence of Leung Kit Chun, all three of them had a meeting at a teahouse in Tai Po when there was this discussion of the distribution of the lands by the 1^st plaintiff.

285.I can only put that down to a faulty memory of the 1^st defendant since that occurrence took place well over 15 years ago.  In my view such a discrepancy does not affect the credibility of either the 1^st defendant or Leung Kit Chun since their evidence of what was discussed with the 1^st plaintiff are consistent.

286.As for the evidence from both Ms Lee and Mr Lau, I have no difficulty in accepting their evidence that they had no knowledge and had never been told about the Properties being ancestral properties of the Lam Family or that the 1^st defendant holds the Properties as a trustee for the benefit of the Lam Family and which could not be sold without the consent of all the members of the Lam Family.

FINDINGS OF FACT

287.I make the following findings of fact in this matter:

(a) Leung Kit Chun did have her own savings and did contribute to the matrimonial home of herself and the 2^nd plaintiff at Serenity Park.

(b) When they emigrated to the UK, Leung Kit Chun did make over some $1.4 million to the 2^nd plaintiff for the purpose of acquiring Chop Chop I.

(c) After Chop Chop I was acquired, it was put in the sole name of the 2^nd plaintiff instead of in their joint names as promised by the 2^nd plaintiff.

(d) Relationship between the 2^nd plaintiff and Leung Kit Chun deteriorated which resulted in Leung Kit Chun and the 1^st defendant returning to Hong Kong from the UK in October 1994.

(e) In or about July or August 1995, the 1^st plaintiff together with Lam Wong Sing visited Hong Kong and informed the 1^st defendant that he would distribute various pieces of land to the male descendants of the Lam Family.

(f) The 1^st plaintiff also indicated to both the 1^st defendant and Leung Kit Chun that the 1^st defendant would be given a greater share of the lands in order to compensate Leung Kit Chun for the loss of her $1.4 million which she had handed over to the 2^nd plaintiff; as a result, the 1^st defendant was given the Properties by the 1^st plaintiff.

(g) Instructions were initially given by Leung Kit Chun to Chan Kam Wun, a conveyancing clerk of Messrs Leung Kin & Co, solicitors, to prepare the necessary conveyancing documents in respect of the transfer of the Properties from the 1^st plaintiff to the 1^st defendant.

(h) The parties attended the office of Messrs Leung Kin & Co on or about 2 September 1995 to execute the conveyancing documents in respect of the Properties.

(i) All the conveyancing documents in respect of the Properties were fully interpreted and explained to the 1^st plaintiff by Chan Kam Wun before the 1^st plaintiff executed same and the 1^st plaintiff was fully aware of the nature of the conveyancing documents when he executed them.

(j) The transfer of the Properties to the 1^st defendant by the 1^st plaintiff was an absolute transfer to the 1^st defendant and the 1^st defendant did not hold the Properties on trust for the Lam Family or anyone else.

(k) Two other pieces of land, namely, Lot 311 and Lot 315 were also transferred by the 1^st plaintiff to Lam Wong Sing and the 2^nd plaintiff at about the same time in 1995 as being part of the distribution of lands by the 1^st plaintiff, and the documentation for Lot 315 was also handled by Messrs Leung Kin & Co.

(l) In or about 2008, another piece of land, being Section A of Lot 258 in DD 16 was also transferred by the 1^st plaintiff to his other son, Lam Tin Fuk, again as part of the distribution of the lands of the 1^st plaintiff.

(m) After their transfer, the Properties were held by the 1^st defendant as registered owner until he sold off the 1^st Property and the 2^nd Property to the 2^nd defendant in August 2009.

(n) At no time was the 2^nd defendant told (whether through its director Mr Lau or through its estate agent, Ms Lee) that the 1^st Property and/or the 2^nd Property were held on trust by the 1^st defendant for the benefit of the Lam Family and that the same cannot be sold without the consent of the members of the Lam Family.

DECISION

288.It is the plaintiffs’ claim that the Properties were held on trust by the 1^st defendant.

289.Section 5 of the Conveyancing and Property Ordinance (Cap 219) provides that an express trust in respect of land or any interest in land has to be in writing signed by the person who is able to declare such trust.

290.In the present case, there is nothing in writing declaring any trust in respect of the Properties.

291.It follows therefore that there could have been no express trust created over the Properties.

292.Section 5 of the Conveyancing and Property Ordinance, however, does not affect the creation or operation of resulting, implied or constructive trusts.

293.Upon the facts found above, there can be no question of any constructive trust arising in respect of the Properties.  Neither implied nor resulting trusts arise in this case since there is no claim by the plaintiffs based either on implied or resulting trusts.

294.Accordingly, and for the reasons given, I hold that the plaintiffs have failed to establish any part of their claim against either of the defendants and the plaintiffs’ claim is dismissed.

COSTS

295.There will be a costs order nisi that the plaintiffs do pay the 1^st and 2^nd defendants’ their costs of defending the claim brought by the plaintiffs, such costs to be taxed if not agreed.

Mr Michael Chai, instructed by Cham & Co, for the 1^st and 2^nd plaintiffs

Mr John Hui, instructed by A M Mui & Kwan, for the 1^st defendant

Ms Rita So, instructed by Louis K Y Pau & Co, for the 2^nd defendant