The Personal Representative of Yip Chiu Fu, Deceased v. Ip Chiu Fat and Another

HCA 1113/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1113 OF 2012

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J U D G M E N T
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1.Yip Chiu Fu, deceased was the 2nd son of Yip Lai Yung, deceased. Yip Chiu Fu and his descendants are called the 2nd fong of Yip Lai Yung’s family. Yip Chiu Fu’s son was Yip Fong, deceased. This action is brought by Madam Wong Fung Ling (“Fung Ling”), the wife of Yip Fong as the personal representative of the estate of Yip Chiu Fu.

2.The defendants are Yip Lai Yung’s great grandsons being descended from his 3rd son Yip Luk, deceased.  Yip Luk and his descendants are called the 3rd fong of the family. 

3.The defendants are the registered owners of section A of Shek O Inland Lot No. 3 (“the Lot”).  The building on the Lot used to have two-storeys only (“the original building”).  The ground floor (“the G/F”) is and has been occupied by the 2nd fong for decades.  The 2nd fong calls it the ancestral house (祖屋).  The first floor (“the 1/F”) is and has been occupied by the 3rd fong for decades.

4.There was a large scale renovation of the original building in the early 1980s.  Additional structures had been built on and adjacent to it in later years after the renovation.  It now has 4-storeys.  The area covered by it and the adjacent structures is also larger than before.

5.Yip Lai Yung’s eldest son was Yip Yiu Kwai, deceased. His son was Yip Chuen.  He and his descendants are called the 1st fong of the family. The 1st fong has been living in a building on Shek O Lot 1462 (“Lot 1462”) for decades.

6.Yip Lai Yung had one more son Yip Yiu Fuk.  He died during the Japanese Occupation of Hong Kong during the Second World War without leaving any issue.

THE DISPUTE

7.Fung Ling is seeking in this action a declaration that the defendants are holding a half-share of the Lot plus the exclusive right to the use, possession and enjoyment of the G/F on trust and for the benefit of the estate of Yip Chiu Fu.  She is also seeking a vesting order for a half-share of the Lot with the exclusive right to the use, possession and enjoyment of the G/F to the estate of Yip Chiu Fu.

8.The defendants deny the claim.  They plead in their defence that the Government Lease of Shek O Inland Lot No. 3 (“Lot 3”) was granted to Yip Luk and one Yau Cheung on 26 June 1922.  Thereafter, Yip Luk and Yau Cheung agreed to divide (informally) this lot into 2 halves.  Each of them then built a 2-storey building on his respective half.  Yip Luk was the sole beneficial owner of his half of Lot 3 and the building thereon.

9.Yip Luk passed away on 13 February 1953.  Letters of administration of his estate were granted to his son Yip Tak on 10 July 1979. By an assignment dated 3 February 1982, Yip Tak as the administrator of Yip Luk’s estate assigned the estate’s interest in Lot 3 to himself.  By a deed poll of the same date, Yip Tak and the other half-owner Yau Choy divided Lot 3 into the Lot and the Remaining Portion.  By a deed of division of the same date and made between the same parties, Yip Tak was given the Lot and Yau Choy the Remaining Portion.

10.By an assignment dated 27 November 1989, Yip Tak assigned all the interests in the Lot to his sons, the defendants.

11.Regarding the occupation of the G/F by the 2nd fong, the defendants plead that this was and is by reason of personal licences granted by Yip Luk, Yip Tak and the defendants to members of the 2nd fong from time to time.

FAMILY TREE

12.The plaintiff has produced a family tree setting out the three fongs which descended from Yip Lai Yung.  The family tree shows many but not all of the members of the family.  Those who have been referred to in the evidence are included in it.

13.The defendants raised only one dispute on this family tree, namely that Mr Yip Yiu Fuk, deceased, was not the 4th son of Yip Lai Yung. They say that he was the 3rd son and Yip Luk the 4th son.  There is no dispute that Yip Yiu Fuk remained single and died without leaving any issue.  The ranking of Yip Yiu Fuk has no bearing on this dispute and I will not refer to this difference again.  A copy of the family tree is annexed hereto as Schedule 1.

UNDISPUTED FACTS

14.The following are the undisputed facts:

(a) Lot 3 had been registered in the name of Yip Luk and Yau Cheung since its acquisition in 1922 and the Lot had been registered in the names of the members of the 3rd fong from time to time since it was carved out from Lot 3;

(b) The G/F has been occupied by the 2nd fong and the 1/F, the roost on the G/F and the staircase leading to the 1/F have been occupied by the 3rd fong respectively at least since sometime during the Japanese Occupation of Hong Kong in the War World II[1] without any interference of one another;

(c) The 2nd fong all along occupied the G/F free of rent or any charge but shared half of the rates and government rent of the Lot with the 3rd fong;

(d) The building on Lot 1462 was inherited from Yip Lai Yung by the 1st fong exclusively.  The 2nd or 3rd fong has not received any interest or share in it;

(e) There was a major renovation to the original building on the Lot in the early 1980s in which the 2nd fong shared half of the costs with the 3rd fong for works to replace a wooden staircase with a cement one, the wooden ceiling of the G/F (i.e. the floor of the 1/F) with a cement one, and to install columns and beams on the G/F to support the new cement ceiling; and

(f) In or about 1990 to 1991, there was a family meeting (“the Family Meeting”) in which the question of the ownership of the Lot was raised by the 2nd fong with Yip Tak of the 3rd fong.

THE WITNESSES

PW1 Ip Choi Lin

15.The plaintiff’s story starts with the evidence of Madam Yip Choi Lin (“Choi Lin”).  She was the younger daughter of Yip Chiu Fu of the 2nd fong.  She was born on 15 November 1928 and is now 86 years old.  She only had education up to primary three.  Her literacy is limited.  She has a slight hearing problem and a slight speech defect.  These appear to be geriatric problems.  There were a few occasions when her answers were not intelligible owning to her speech defeat.  It was necessary to ask her to repeat those answers.  Her evidence in her witness statement as supplemented by her oral evidence is as follows.

16.For as long as her memory goes, all the 1st, 2nd and 3rd fongs were living in the 2-storey building on the Lot.  She had been living on the 1/F since her birth.

17.Before the Japanese Occupation, there were three rooms on the 1/F.  One room was for Madam Chan Yung, the wife of Yip Yiu Kwai, deceased of the 1st fong.  Yip Chuen, the son of Yip Yiu Kwai and Chan Yung, was married. He and his wife occupied another room there.  The 3rd room was occupied by Yip Chiu Fu and his wife Ng Cheung Tai (“Cheung Tai”) of the 2nd Fong.  In addition, there was a large wooden bed in the sitting room on the 1/F.  Choi Lin, her elder sister and Yip Chuen’s daughter, who was 15 days older than her, all slept on this bed. Yip Chuen had a son.  He probably slept with his grandma Chan Yung.  There was a room on the G/F that was occupied by Yip Luk and his wife of the 3rd fong.

18.There was a kitchen on the G/F where food was cooked for the whole family.  There was also a large sitting room on the G/F and the family enjoyed the meals there.

19.There was on the G/F also a roost adjacent to the staircase leading to the 1/F.  The chickens raised and the eggs hatched there were for the whole family to enjoy.

20.Yip Yiu Fuk, another son of Yip Lai Yung, was not married.  He was not living in the 1/F or G/F but lived on his own in the house on Lot 1462.  That lot was registered in the name of Yip Lai Yung.  That lot was to the east of and less than 100 metres away from the Lot.

21.Chan Yung was then the head of the family.  She was the materfamilias (當家).  She controlled and managed everything in the family in particular finance.  Everyone had to hand over his/her income to Chan Yung to disburse for the family needs, including the daily meals.  Even when Choi Lin needed money to buy snacks, she would not ask her mother for it, but had to ask Chan Yung.  She agreed in cross-examination that she did not know who paid how much income to Chan Yung.

22.The defendants deny that there was any materfamilias or head of family.  They also deny that the three fongs had lived together as a big family.  They insisted that the three fongs had lived separately since the 1920s when the original building on the Lot was constructed.  But they agree that Yip Luk had, to the displeasure of his wife, handed over most of his income to Chan Yung for her to spend for the benefit of the 1st and 2nd fongs who were allegedly in dire financial circumstances (A216, para 27).

23.Choi Lin also recounted the early history of the family as relayed to her by Chan Yung.  Yip Yiu Kwai, Chan Yung’s husband, was a fisherman.  When their son Yip Chuen was just three days old, Yip Yiu Kwai’s boat capsized and he was drowned.  From then on Chan Yung shouldered the duty to raise her new born son, Yip Chuen and her three young brothers-in-law Yip Chiu Fu, Yip Luk and Yip Yiu Fuk.  She had to take care of everything for them.  She later also arranged the marriages for Yip Chiu Fu and Yip Luk.

24.Fung Ling (PW3) also said in evidence that her marriage to Yip Fong, the son of Yip Chiu Fu, was arranged by Chan Yung.

25.Before the Japanese Occupation of Hong Kong, which commenced on 25 December 1941, Yip Chiu Fu, Yip Luk and Yip Chuen all worked as seamen.  They all worked on a ship called Empress of Japan (日本皇后號).  The ship visited Hong Kong once a month or two.  The three seamen would come home for a day or two.

26.Whenever the ship was about to visit Hong Kong, Yip Yiu Fuk, who did not work as a seaman but as a fisherman, would go to the school and asked for leave for Choi Lin and the son and daughter of Yip Chuen.  Yip Yiu Fuk would take them to the ship which would be berthed somewhere in Central.  The children would meet the three seamen on the ship.  They would play and enjoy the food and drink there.  When they returned to Shek O, the three seamen would bring back many bags of chicken wings and bread for the relish of the family.  They would hire a vehicle to take everyone and the bags of food back to Shek O.  Life appeared to be relaxed and joyous.

27.Then there came one morning when Choi Lin was about to go to school, she heard that the Japanese army had invaded Hong Kong.  She could not go to school.  The 1st and 2nd fongs were hiding on the 1/F.  Her mother wanted her to put on some old and unattractive clothing for fear that good looking girls would be snatched away by the Japanese army.  She was then just 13 years old.

28.After the Japanese army had occupied Hong Kong, everybody lost his job.  The three seamen of the family could not go to sea.  Suddenly, the income for the family dried up.

29.One day, Chan Yung gathered everybody together. She said:

“There is the war and everybody has lost the job. We might as well have it divided.”

The family was then divided per the fongs and each fong became an independent household.

30.In the division, Chan Yung gave each household a small basket of rice.  Regarding accommodation, the 1st fong got the house standing on Lot 1462.  The 2nd fong got the G/F.  The 3rd fong got the 1/F.  The roost on the G/F and the staircase leading from the G/F to the 1/F were also given to the 3rd fong.

31.In addition, the 1st fong also got a round table and the 2nd fong a wooden salon bed (貴妃床).  Choi Lin could not remember what the 3rd fong had also got from the distribution.

32.Yip Yiu Fuk who used to live in the building on Lot 1462 had probably died during the war and before the family division because Choi Lin remembered that he had disappeared soon after the war had started.

33.Regarding access to the staircase leading to the 1/F, it used to be inside the G/F.  After the division of family, that access was blocked.  A new access leading from outside the building to the staircase was constructed. As a result, one could go from the outside of the house through the staircase directly to the 1/F without going into the G/F.  There was also no more direct access from the G/F to the 1/F.

34.Yip Luk also converted the roost on the G/F into a kitchen and bathroom for the 3rd fong.  With the new access to the staircase, the 3rd fong could also go from the 1/F to the kitchen and bathroom without passing through the G/F.

35.Before the family division, the three fongs had their meals together.  This was particularly so at festivals.  There were many people sitting round a big round table.  The rice pot used was of 1.5 feet in diameter and the food cooking pot was of 3 feet long.

36.After the family division, the three fongs did not have meals together anymore.  This was so even at festivals.  The ancestral altar remained in the G/F of the 2nd fong.  The 1st and 3rd fongs only came to the G/F to worship the ancestral altar.

37.After the family division, no one was required to hand over any income to Chan Yung as each household had to be responsible for its own finance.  Cheung Tai, the wife of Yip Chiu Fu had also assumed the responsibility of looking after the livelihood of her children.  She ran a business of letting out tents, mats and beach chairs to beachgoers.  Choi Lin assisted her in the business. Chan Yung also ran a similar business on her own account.

38.Life during the war was difficult.  Choi Lin’s father Yip Chiu Fu was unemployed.  He later died of an illness.  The 2nd fong did not have enough food.  In the end, Choi Lin and one of her elder brothers were entrusted to other families.  Choi Lin in her oral evidence regarded it as her abduction, but what Fung Ling heard from others of the family was that she and her brother were entrusted or given away to others so that they could have a chance of survival from starvation.

39.After some twists and turns, Choi Lin was taken to the mainland.  When she was in Guangzhou, she got acquainted with her husband. She then gave birth to a son.  After the war ended in 1945, she re-established contact with her family by letter.  There was no postal service to Shek O.  She addressed her letters to a shop in Shaukeiwan for delivery to her mother at the Lot.  She later visited her mother at the G/F.  She stayed there for a few days and returned to her husband in Guangzhou.

40.After the liberation of the mainland in 1949, her husband’s family moved to Mongkok in Hong Kong.  She instead returned to the G/F and lived with her mother.  She helped her mother with her mother’s work.  She also accepted Chan Yung’s suggestion and did not get marry again.  A few years later, she went to her husband’s home which was then in Sheung Shui to visit her son. She then gave birth to her 2nd son.  She later returned to the G/F with her 2nd son.  A few years later, her sister-in-law bought her a small house in Shek O. She then moved from the G/F to her own house and lived there till now.  When she was 30 years old, she got a job as the janitor of the school in Shek O.  She worked there until retirement at 60.

41.The defendants alleged that both her father and grandfather were opium smokers.  She agreed that her grandfather, Yip Lai Yung was an opium smoker, but denied that her father Yip Chiu Fu was also on opium.

42.She could recall things that existed or happened a long time ago.  She recalled that the place in the mainland where she was taken to during the Japanese Occupation was called Tai Mong (大網).  She also recalled the name of the shop next door to the Lot back in her childhood.  She also recalled the name of the restaurant in Wanchai where her brother Yip Yung Yau had worked when he and his wife were living in Wanchai.

PW3 Wong Fung Ling

43.Fung Ling married Yip Fong, the 2nd son of Yip Chiu Fu in 1957.  Yip Fong was then over 30 years old and Fung Ling was less than 20. That was long after the division of family.  She had not met Yip Chiu Fu who died during the Japanese Occupation.  All her evidence about facts and matters that existed or happened prior to her marriage was based on what she had been told by the seniors in the family in particular her mother-in-law Cheung Tai who was the most senior person in the 2nd fong.  Cheung Tai was well respected by everyone in the 2nd fong.

44.When Fung Ling married Yip Fong, the 2nd fong was already living on the G/F.  From what she was told by Cheung Tai and other members of the family, she learnt that there was a common understanding of the three fongs that the building on Lot 1462 belonged to the 1st fong, the G/F belonged to the 2nd fong and the 1/F (including the roost on the G/F) belonged to the 3rd fong. Each fong lived in its respective accommodation independently.

45.Cheung Tai had told her many times on how the two-storey original building was constructed on the Lot.  Initially, the Yip family as a whole was living in the building on Lot 1462.  Later on when the family became more populous, that building was not large enough for the family.  Chan Yung, the materfamilias then decided to construct a building on the Lot.  Chan Yung being the materfamilias, made decisions on all important matters of the family.

46.For the purpose of the construction, Chan Yung and Cheung Tai had to dig up and carry some earth from a nearby hill to the Lot.  They used a bamboo to carry on the shoulder carried the earth and rocks in baskets back to the Lot.  The work was tough and they had to endure superficial lacerations on their shoulders.  Fung Ling added in oral evidence that Chan Yung and Cheung Tai at that time had the additional task of working in the vegetable fields apart from this building job.  Yip Luk’s wife contributed by cooking the meals.

47.Cheung Tai had also told Fung Ling that it was Chan Yung’s decision that the Lot should be registered in Yip Luk’s name.  It was because Yip Luk was more knowledgeable than his brothers.  His brothers were fishermen whilst he had been a seaman and had also worked in the city.  Hence, matters involving documents would be dealt with by him.  That was in about 1922 and years before the birth of Choi Lin.  Choi Lin said in evidence that Yip Chuen, Yip Chiu Fu and Yip Luk were working as seamen and not fishermen.

48.Fung Ling had also heard about the family division as testified by Choi Lin.  She also said in oral evidence that she had been told about it by both Cheung Tai and Chan Yung.

49.Later the 2nd fong had become very populous.  By the 1960s, the G/F was not large enough for the 2nd fong.  The household of Yip Yung Yau, the eldest son of Yip Chiu Fu then moved to a small house situated on the side of the building on Lot 1462.  This small house is called the grass house (草屋).  The grass house had not been divided in the family division and belonged to all three fongs.  Hence, Fung Ling learnt that Yip Yung Yau had to pay some money to the 1st and 3rd fongs every month for his occupation of the grass house.

50.In 1981, Yip Pak Keung (PW1), the son of Yip Yung Yau conducted a land search on Lot 1462 for reasons related to the grass house. He at the same time also conducted a land search on the Lot.  He discovered that the ownership of the Lot had changed from Yip Luk to his son Yip Tak of the 3rd fong.  He relayed this matter to his cousin Ms Yip Yuk Kwan (“Yuk Kwan”) (PW5), the daughter of Fung Ling in 1983.  Yuk Kwan in turn told her mother Fung Ling about it.  At that time, Cheung Tai was still alive.  Fung Ling and some other members of the 2nd fong told Cheung Tai about this matter and sought her decision on what to do.  They wished Cheung Tai would take the matter up with Yip Tak and to include someone of the 2nd fong as one of the owners of the Lot because the 2nd fong owned the G/F.  However, Cheung Tai did not consider it necessary to do so.  She said she did not believe that Yip Tak would be so unconscionable as to disallow them from living in the G/F.  She said everybody would continue to live there for generations to come.  As a result of Cheung Tai’s decision, they just left the matter at that.

51.Another significant matter that happened in the early 1980s was the renovation of the G/F and 1/F.  Fung Ling’s son Yip Pak Cheong (PW4) and daughter Yuk Kwan (PW5) said that it took place in about 1983 to 1984.

52.The two-storey building on the Lot had become old. There were many places that had been damaged.  In particular was the wooden ceiling of the G/F (floor of the 1/F).  Fung Ling added in oral evidence that the wooden staircase leading to the 1/F was also infested with white ants.  Yip Tak suggested to her to undertake a large scale renovation.

53.After some discussions, it was decided that the wooden ceiling of the G/F and the staircase leading to the 1/F would be replaced by concrete ones.  The pitched roof of the 1/F would also be replaced by a concrete roof.  Concrete columns and beams would be added to the G/F for structural purposes.  The details of the works were mainly discussed between Fung Ling and Madam Ip Pak Ling (“Pak Ling”) (DW3), Yip Tak’s daughter, Yip Tak’s daughter.  Pak Ling also engaged a contractor to carry out the works.  The contractor priced the works item by item.  Apart from works solely for the 1/F, the 2nd fong shared half of the costs for all the other works including those for making the new concrete staircase.

54.At that time, Pak Ling did say that the 2nd fong need not pay for the repair to the staircase, but Fung Ling told her that “[t]hough we do not use the staircase, everybody has a share in the house, (therefore) all things should be paid together.”  The 3rd fong then accepted from the 2nd fong half of the costs for replacing the staircase.

55.The total costs of renovation exceeded HK$100,000. The 2nd fong paid half of it.  Fung Ling’s money came from contributions of her children.  She made payment by instalments directly to the contractor.  She also added that if the 2nd fong were only a licensee of the G/F, she would not have spent such huge sum to assist the 3rd fong in the renovation.

56.The 2nd fong had also been paying half of the rates and government rent levied on the Lot.  The payments were almost invariably paid by Fung Ling to Yip Tak.  However, the 3rd fong had refused to accept such payment from about June 2012 when the defendants issued HCA 1107/2012 against Fung Ling.

57.Cheung Tai passed away in 1989.  In about 1990 to 1991 Fung Ling met a person who came to inspect the building on the Lot.  She learnt from him that ownership of the Lot had vested unto the 1st defendant.  She was surprised as the 2nd fong had not been apprised of it.  She thought that the 2nd fong owned the G/F beneficially and had a say on the change of the registered owner of the Lot.  She later learnt from land search records that the Lot had in fact been vested unto the two defendants.

58.Fung Ling relayed the matter to her husband Yip Fong and brother-in-law Yip Yung Yau.  They then arranged the Family Meeting with Yip Tak in the evening of the following Sunday to deal with it.

59.There were many persons who attended the Family Meeting. There were Yip Chuen, his son Yip Wai Kwong and Yip Wai Kwong’s wife.  They were of the 1st fong.  There were also Yip Tak and his wife of the 3rd fong.  From the 2nd fong, there were Fung Ling and her husband Yip Fong, their two daughters (who had both passed away) and their son Yip Pak Cheong (PW4), Yip Fong’s brother Yip Yung Yau and the son of Yip Yung Yau, Yip Pak Keung (PW1).  She added in oral evidence that Yip Chuen’s wife was also present.

60.Fung Ling said that initially the 1st fong was not invited to the meeting as the purpose was for Yip Yung Yau and Yip Fong of the 2nd fong to sort the matter out with Yip Tak of the 3rd fong.  Furthermore, the 1st fong had already taken the house on Lot 1462 in the family division and was not involved in the dispute over the Lot.

61.In the Family Meeting, Yip Yung Yau and Yip Fong questioned Yip Tak on why he had transferred ownership of the Lot to his sons without any concern about the 2nd fong.  Yip Tak replied “It is only right for the father to pass it to the son and the son to his son.  There was no reason to give it to outsiders”.  Yip Fong upon hearing this got very angry.  He dashed into the kitchen as if he was trying to grab a chopper.  Everybody held him down and pacified him. In Fung Ling’s experience, it was very rare for Yip Fong to have become so angry.

62.Fung Ling, for fear of further confrontation, went immediately to invite Yip Chuen of the 1st fong to preside over the situation. Fung Ling had no clear recollection of what the 1st fong had said save that Yip Chuen had said that Yip Luk had paid HK$1,000 to build the house on the Lot.  This made Yip Yung Yau and Yip Fong most dissatisfied.  At the end of the meeting and upon the insistence of Yip Yung Yau and Yip Fong, Yip Tak eventually compromised with them.  He told them “You can add your name, but for your three brothers, I would only add one”.  Yip Yung Yau then replied “Good! Alright.  The name of anyone of us will do”.  The family meeting then concluded.

63.On the next day, Yip Tak, upon being enquired by Fung Ling, told her:

“Yip Pak Fat did not agree to add name. He and his wife further told me: ‘[y]ou can be at ease, generation after generation will continue to live (here), (there would be) nothing, and it is not being sold, whoever’s name does not matter.’”

64.Fung Ling then relayed this to Yip Yung Yau and Yip Fong.  Yip Yung Yau suggested publicizing with posters the conduct of the 3rd fong in Shek O, but Fung Ling and Yip Fong decided not to do so as they did not want to expose the dispute of the family to outsiders.  Furthermore, Yip Tak had repeatedly guaranteed the 2nd fong’s right in the G/F, the issue of change of name was eventually not pursued.  Fung Ling further said in cross-examination that they were villagers and honest people.  They thought that a person’s words were good enough.  They trusted Yip Tak.  Since then, the defendants had also done nothing to evict them for twenty years until their receipt of their solicitors’ letter in March 2012.

65.In about 1980 to 1985, Fung Ling rebuilt an unauthorized structure adjacent to the building on the Lot (“the unauthorized 1/F”).  That structure used to belong to her mother-in-law Cheung Tai.  Fung Ling denied the defendants’ allegation that the 2nd fong had sought the permission of the 3rd fong to rebuild this structure.  She further said that the 3rd fong had also constructed an additional unauthorized structure on a space adjacent to the Lot.  Regarding the construction of these additional structures, neither fong had interfered with the other.

66.In between 2002 to 2011, the 2nd fong built a further storey (“the unauthorized 2/F”) on top of the unauthorized 1/F.  Fung Ling again denied that they had sought the consent of the 3rd fong for building the unauthorized 2/F.  She also denied of having sought any consent from the 3rd fong when she let out the unauthorized 1/F and 2/F.

67.There appears to be some argument on whether the unauthorized 1/F and 2/F of the 2nd fong are within or outside the Lot.  The 2nd fong says that they are outside the Lot whilst the 3rd fong takes a contrary view. In any case, the 3rd fong agrees that the 2nd fong had never been given consent or permission to construct the unauthorized structures.  It tolerated the actions of the 2nd fong solely because they are relatives.

68.The final matter that Fung Ling relied on to show that the 2nd fong had interest in the G/F is by reference to the building on Lot 1462.  Lot 1462 belonged to Yip Lai Yung.  He died intestate.  Lot 1462 should thus devolve equally to the three fongs.  It is for this reason that Yip Yung Yau’s household had to pay money to the 1st and 3rd fongs for its occupation of the grass house on Lot 1462.

69.However, Lot 1462 with the exception of the grass house had been succeeded to by the 1st fong alone in 1953.  Neither the 2nd or 3rd fong has any interest in this lot save the grass house.  That is because Lot 1462 with the building thereon save the grass house had been given to the 1st fong in the family division.

PW1 Yip Pak Keung

70.He is the nephew of Fung Ling.  His father was Yip Yung Yau, deceased.  He lived in Shek O in his childhood.  Initially he lived in the G/F.  Later, he followed his parents and moved to the grass house on Lot 1462. He said in cross-examination that he was in primary 5 or 6 when his household made the move.  He all along thought that the G/F belonged to the 2nd fong.  The other fongs had never made any attempt to interfere with the 2nd fong’s exclusive use of the G/F.  He also did not know that the Lot was registered in the name of the 3rd fong.

71.However, the grass house was not regarded as solely owned by the 2nd fong, but owned by the three fongs together.  After his household had moved to the grass house, his mother had to pay some money every month to the 1st and 3rd fongs as the price for their occupation of the grass house.

72.In about 1981, he had some discussions with Yip Chuen of the 1st fong in relation to his plan to make a concrete roof for the grass house. Yip Chuen claimed the right to use the concrete roof to be built on the ground that the grass house was related to Lot 1462.  As a result of the discussions, Yip Pak Keung made a land search of Lot 1462.  He found that it was owned by his great grandfather Yip Lai Yung, but was succeeded to by the 1st fong to the exclusion of the 2nd and 3rd fongs.

73.In cross-examination, he said this discovery confirmed what his grandmother Cheung Tai had told him about the family division and that the 1st fong got the building on Lot 1462.  He said that Yip Chuen’s mother Chan Yung and his father Yip Yung Yau had also told him about the family division.  Before the division, everybody lived and ate together and Chan Yung managed all things on money.  This arrangement stopped upon the family division.

74.He said possibly because of what he learnt from the land records of Lot 1462, he also conducted a land search on the Lot.  He then discovered that it was registered only in the name of the 3rd fong and had been transferred from Yip Luk to Yip Tak.  Since Yip Tak was described in the records as the administrator, he thought that the transfer to Yip Tak was merely for the convenience of the 3rd fong to manage Lot, hence, he did not express any view on the matter.

75.In 1983, he had an occasion of meeting Yuk Kwan (PW5), the daughter of Fung Ling.  He told Yuk Kwan what he learnt about the registration of the Lot.  They then approached their grandmother Cheung Tai for clarification on why the Lot was only registered in the name of Yip Tak of the 3rd fong and without any name of the 2nd fong.  Cheung Tai’s initial reaction was that everybody belonged to the family and it did not matter as to who was the registered owner.  Yuk Kwan then explained that the Lot was in Yip Tak’s name to the exclusion of the 2nd fong. Cheung Tai then said:

“How come that (we) would have no share! I and elder sister-in-law (Chan Yung) built it together. Younger sister-in-law (wife of Yip Luk) did not take part to build. We had carried big rocks with bamboo on our shoulders to build it. How come that (we) would have no share!”.

76.Yuk Kwan then repeated that the Lot was in the name of Yip Tak to the exclusion of the 2nd fong, Cheung Tai said:

“Ah Tak would not be so. He is not that kind of person.”

77.Owing to Cheung Tai’s view, they being of the younger generation did not go any further but left the matter to Fung Ling to pursue.  He knew that Fung Ling had discussed the matter with Cheung Tai.

78.In about 1990 to 1991 when Fung Ling learnt that the ownership of the Lot had been transferred to the defendants, he, his father Yip Yung Yau and his uncle Yip Fong held the Family Meeting to reason with Yip Tak. He also referred to the same 12 persons as mentioned by Fung Ling who had attended the meeting.  He also missed out Yip Chuen’s wife.  His recollection of what happened in the meeting and what was said by Yip Tak was more or less the same as that of Fung Ling.

79.He also recalled that Yip Chuen was invited by Fung Ling to participate in the middle of the meeting.  However, when Yip Chuen was told that the ownership of the Lot had been transferred by the 3rd fong without the 2nd fong being informed, Yip Chuen admitted knowledge of the same.  Yip Yung Yau and Yip Fong then confronted Yip Chuen with the fact of family division and that the Lot had been given to the 2nd and 3rd fongs jointly.  Hence, the 2nd fong had the right to become one of the registered owners.  They further said that since the 3rd fong was arranging change of name, they should make use of the opportunity to include the 2nd fong as one of the registered owners.  They further asserted that the 1st fong had sided with the 3rd fong in keeping this matter secret.  Yip Chuen then replied that “When the house was built, Yip Luk had spent HK$1,000 on it.” Yip Yung Yau and Yip Fong then said that HK$1,000 was insufficient to build the house.

80.In cross-examination, Yip Pak Keung accepted that Yip Luk might have provided the HK$1,000.  His acceptance of this allegation is because of his trust of the 1st fong.  There is no other evidence in support of this allegation which was made solely by Yip Chuen and not even by the 3rd fong. He also recalled that throughout the meeting, nobody suggested that the 2nd fong had no share in the Lot or could not continue to live in the G/F.

81.Eventually and in the light of the insistence of Yip Yung Yau and Yip Fong, Yip Tak agreed to include a member of the 2nd fong as one of the owners.

82.After this meeting, Yip Pak Keung did not follow up this matter.  He was not aware of why the 2nd fong was not included as an owner of the Lot in the end.

83.He was also aware of the renovation of the building on the Lot in the early 1980s.  At that time, his father Yip Yung Yau had also offered to contribute a share for the 2nd fong.  However, Fung Ling declined on the ground that her household of the 2nd fong had used the G/F for years and should be responsible for the funding.

84.I would also mention that Yip Pak Keung had delivered a letter dated 30 April 2014 from his solicitors to Yip Wai Kwong of the 1st fong seeking answers from the 1st fong on questions relevant to dispute herein.  I would deal with the letter below.

PW5 Yip Yuk Kwan

85.Yuk Kwan is Fung Ling’s daughter.  She was born in 1960.  She had been living in the G/F since her birth.  She recalled that the 1st fong was always living on Lot 1462, the 2nd fong in the G/F and the 3rd fong in the 1/F.  No fong would intrude into the accommodation of the other fongs without permission from the occupying fong.  She all along thought that each fong owned its respective accommodation.  Since the ancestral altar was situated in the G/F, the 1st and 3rd fongs would come to the G/F for worshipping purpose.

86.She also recalled the large scale renovation of the G/F and 1/F in 1983 to 1984 for which the 2nd fong had to bear half of the costs. She also contributed HK$10,000 to the costs.

87.The 2nd fong had also undertaken other renovations and the 3rd fong was always given prior notice of the works so as to reduce the inconvenience to it.  But she never thought that the 2nd fong needed the consent of the 3rd fong to undertake these works.

88.In about the end of 1983 to 1984, her cousin Yip Pak Keung (PW1) told her that the Lot was registered in the sole name of Yip Tak. She and Yip Pak Keung then sought clarification from their grandma Cheung Tai. She gave the same account of evidence on the meeting with Cheung Tai as Yip Pak Keung did.  I have already referred to it above.

89.She did not take part in the Family Meeting.  Her sisters attended, but they have already passed away.

PW4 Yip Pak Cheong

90.He is the son of Fung Ling.  His evidence is similar to that of his sister Yuk Kwan.  He has the same belief as to ownership of the fongs over their respective accommodations.

91.Regarding the major renovation in the early 1980s, he said it was in about 1983 to 1984 and he had also contributed some HK$10,000 to his mother to pay for the works.

92.He also recalled the Family Meeting when his father Yip Fong and his uncle Yip Yung Yau had reasoned with another uncle Yip Tak of the 3rd fong over the ownership of the G/F.  He was at the meeting but did not have a clear recollection of it or who said what.

93.He did not mention about the family division in his witness statement and was cross-examined about it repeatedly.  He agreed that it was an important matter though he did not mention it in his witness statement. He explained in re-examination that his witness statement only contained matters that he recalled from his own experience, not hearsay matters.  He was also aware that Choi Lin would refer to the family division in her witness statement.

DW1 Ip Chiu Fat

94.Ip Chiu Fat is the key witness for the defence. He was born on 19 December 1946.  That was after the World War II and the family division as alleged by the plaintiff and her witnesses.

95.His father Yip Tak was born around the Tuen Ng Festival in the fifth moon of 1923.  Yip Tak is over 91 years old.  He is not called as a witness.

96.Ip Chiu Fat made a witness statement on 22 August 2013 and a second witness statement pursuant to leave of the court on 28 October 2014.

97.He explained in his first witness statement why Yip Tak was not called.  He said Yip Tak was very fragile because of his age and health. In particular he had mobility problems.  In consideration of his health, the defendants agreed not to call him as a witness but to use the information he gave on various matters in Ip Chiu Fat’s witness statement.

98.Ip Chiu Fat further said in his second witness statement that Yip Tak had a sound mind despite his age, senile health problems and that he was becoming absent-minded very recently.  Yip Tak also had no serious problem with his memory and could still tell the defendants the matters that had happened before their births.  However, the defendants did not want to bring Yip Tak unnecessary pressure and troubles as caused by this action.  Hence, they decided not to call him.

99.Ip Chiu Fat was questioned about Yip Tak’s ability to testify orally.  Ip Chiu Fat said in evidence-in-chief that Yip Tak had hearing problem and could not pick up one sentence out of 10.  But if you should speak loudly to him, he could communicate.  His mind was very clear.  Ip Chiu Fat further said in cross-examination that apart from hearing problem, Yip Tak also had mobility inconvenience.  Apart from these problems, Yip Tak should be normal.  Yip Tak also did not like to use hearing aid.  He also preferred walking to the wheelchair or walking stick.  He was afraid that if he did not exercise or walk, he might lose the ability to walk.

100.Furthermore, Ip Chiu Fat confirmed that it was the 3rd fong’s family meeting that had decided not to call Yip Tak as a witness.  Ip Chiu Fat himself did not know if Yip Tak would want to give evidence.  The 3rd fong made the decision despite knowing that Yip Tak knew more about the family history than the defendants and what Yip Tak knew was helpful to the court for adjudging this case.

101.I now deal with Ip Chiu Fat’s evidence in his two witness statements and oral evidence.

102.A crucial point in the defence case is that Yip Luk, the first member of the 3rd fong was a wealthy man whilst the other fongs were poor. Yip Luk supported the whole of Yip family.  Ip Chiu Fat grounded this point in para 13 of his first witness statement dated 22 August 2013 where he said:

“13. When my grandfather Mr Yip Luk (葉六) grew up, he worked as a sailor. He worked very hard and became rich enough to support financially the entire Yip family including his parents, his siblings and even his siblings’ families. Although Mr Yip Yiu Kwai and Mr Yip Chiu Fu were also sailors, they and their families were lazy but spent extravagantly. Their families, therefore, relied also on my grandfather’s earnings to support their living. Whenever my grandfather returned home after work, my grandfather gave money to Mr Yip Yiu Kwai’s wife to manage the Yip family. ”

He corrected himself in the second witness statement by saying that it was not Yip Yiu Kwai who had worked as a sailor, but his son Yip Chuen.

103.In para 21 of his supplemental witness statement dated 28 October 2014, he gave further clues on why Yip Luk was so rich.  He said:

“21. In respect of the 4 sons of Yip Lai Yung, as I have said in my first witness statement, my grandfather, Yip Luk, was rich enough to support the whole Yip family including the 1st fong and the 2nd fong. He even once worked on a ship called ‘日本皇后號’ (Empress of Japan). He should be earning lots of money during his career as a sailor because my father told me that, whenever Yip Luk came home after work, he always brought back many things for the Yip family. He brought back so many things that he always needed a lorry for transportation. Although other members of the Yip family might have worked as sailors, Yip Luk was the only person who brought back so many things after work.”

104.In oral evidence, he gave a further reason for Ip Luk’s wealth.  He said Ip Luk was the storekeeper of the ship.  He however could not tell what jobs Yip Chiu Fu and Yip Chuen were in.

105.Coming back to his witness statement on the earlier events.  He said the Yip family comprising the three fongs and Yip Yiu Fuk had become so populous that Lot 1462 became very crowded.  Yip Luk therefore used his own money to purchase Lot 3 jointly with Yau Cheung from the Government in 1922.  The purpose was to build a new house to accommodate not just the 3rd fong, but also the 2nd fong.

106.He denied that the 1st or 2nd fong had made any contribution to the acquisition of Lot 3 or the construction of the house thereon.  He said that Yip Luk had engaged professional construction builders to do the job and did not require anyone from the Yip family to assist.  Though the 2nd and 3rd fongs moved to the Lot, the 1st fong remained in Lot 1462 as Yip Yiu Kwai was the first born of the Yip family.

107.He further said that since the 2nd and 3rd fongs were relatives, Yip Luk continued to support the 2nd fong by allowing them to live in the Lot without payment (para 22 on p 171).  But he admitted that he had no knowledge that Yip Luk had allowed Yip Chiu Fu and his household to live in the G/F (despite he had said so in his witness statement).  He said in oral evidence that it was a matter of history which had to be correct that Yip Luk had allowed Yip Chiu Fu and his son Yip Fong to live in the G/F.  But he did not tell the court where he learnt this history.  There is no written history of the Yip family.

108.He further said that when Fung Ling married Yip Fong, she was likewise permitted to live in the G/F by the same licences granted by Yip Luk and Yip Tak.

109.He then referred to the death of Yip Luk on 13 February 1953.  He said Yip Tak had told him that nobody of the 2nd fong had asserted any interest in the Lot before Yip Luk’s death.

110.In 1974, Yip Tak applied for letters of administration of the estate of Yip Luk.  With the help of Yip Chuen of the 1st fong, Yip Tak was granted the letters of administration on 10 July 1979.  Ip Chiu Fat said that the 2nd fong was aware of it at the time, but no one raised the issue of the 2nd fong’s interest in the Lot.

111.I note that Yip Tak, in applying for the letters of administration, attempted to claim a 1/3 interest in Lot 1462.  I will deal with this matter below.

112.Ip Chiu Fat said that his father Yip Tak, after having obtained the letters of administration, continued to allow the 2nd fong to occupy the G/F for free as Yip Luk had done.

113.I have already referred to the several deeds of conveyance that Yip Tak had executed on 3 February 1982 resulting in the vesting of the Lot unto him.  Ip Chiu Fat said that the 2nd fong was fully aware of these conveyancing acts but did not raise any issue of interest in the Lot.

114.Regarding the major renovation in the early 1980s, Ip Chiu Fat said in his first witness statement:

“37. … The Building has never ‘underwent major renovation and reconstruction for the purpose of reinforcing its structure’ in the early 1980s. Except the matters stated below, actually only a broken wooden staircase inside the Building connecting the ground floor and the 1st floor was replaced. The 3rd Fong originally wanted to pay all the costs for such replacement but the 2nd Fong voluntarily offered to pay half of the costs despite the fact that they did not use the 1st floor. They did not give any reasons for them (sic) doing so. In particular, they did not state that they did so because they had, or should have right or interest, in the Land. At that time, we believed that they did so entirely out of goodwill in light of the fact that they had never been required to pay for their residence in the Building. My father eventually accepted their offer.”

115.Ip Chiu Fat then dealt with the unauthorized building works undertaken by the 2nd fong on or around the Lot.  In the early 1980s, the 2nd fong built the unauthorized 1/F on the uncovered part of the roof of the G/F at the rear of the building.  The 2nd fong also enclosed some open area at the rear for this new structure.  He said in his witness statement that the 2nd fong should have asked Yip Tak for consent to carry out these works but it did not.  Yip Tak was unhappy about these works, but chose to tolerate and did not confront the 2nd fong about them.  This was because the two fongs were relatives.  Yip Tak preferred to live with anything done by the 2nd fong so long as the building on Lot 3 was still used by members of the Yip family (para 40 on p 176).  However, when cross-examined, he said he did not know that Yip Tak preferred to live with anything done by the 2nd fong so long as the building was still used by the Yip family.

116.Then in about 2002 when the defendants were already registered owners of the Lot, the 2nd fong again undertook unauthorized works. They replaced some wire netting on the G/F with a door, built the unauthorized 2/F on top of the unauthorised 1/F and a new staircase linking up the two-storeys of unauthorized structures all without seeking any consent from the defendants.  The defendants were unhappy about these works, but they, like their father Yip Tak, chose to tolerate and did not confront the 2nd fong for the same reason.  They also preferred to live with anything done by the 2nd fong as long as the building was still used by the Yip family.

117.Then in about December 2011, the 2nd fong carried out another set of unauthorized works.  It partitioned the G/F, built a new entrance to it and built a new staircase linking up the G/F with the unauthorized 1/F all done without seeking any consent from the defendants.  The defendants again chose to tolerate and did not confront the 2nd fong for the same reason that they were relatives.  Ip Chiu Fat again said in his witness statement that the defendants prefer to live with anything done by the 2nd fong as long as the building on the Lot was used by the Yip family.

118.Apart from the unauthorized works, Ip Chiu Fat said that the 2nd fong had committed other daring acts.  He said in his witness statement that Fung Ling had in about 1991 requested him to give some interest in the Lot to her son Yip Pak Cheong (PW5), but did not give any reason why.  She was not making the request on the ground of any claim of ownership of the Lot.  He refused her request.  She quarrelled with him.  Their relationship then turned sour rapidly (paras 47 to 48 on p 178).

119.However, when cross-examined, Ip Chiu Fat said that he had not heard of this unwarranted request by Fung Ling.

120.Ip Chiu Fat also said in his witness statement that in early 2012 he was told by his son Ip Ka Lung (DW 2) that Yip Pak Cheong (PW5) had phoned Ip Ka Lung asking for consent to lease out certain part of the building on the Lot.  Ip Ka Lung told Yip Pak Cheong to contact Ip Chiu Fat, but nobody contacted Ip Chiu Fat on this matter.  Ip Chiu Fat later discovered that there was a foreigner living in the unauthorized 1/F and 2/F at the rear of the building.  This sparked off the defendant’s action in HCA 1107/2012 to evict Fung Ling which in turn led to Fung Ling’s institution of this action.

121.In his second witness statement, Ip Chiu Fat said that his great grandfather, Yip Lai Yung had never come to Hong Kong but lived in Nantou, Shenzhen throughout.  Since he was an opium smoker, he left nothing in his estate (para 12 on p 211).  However, when cross-examined, Ip Chiu Fat said that nobody had told him that Yip Lai Yung had lived in Nantou.

122.He also said in his witness statement that Lot 1462, which was registered in the name of Yip Lai Yung, was purchased with Yip Luk’s money (para 43 on p 220).  However, he again said in both cross-examination and re-examination that he had no knowledge on who bought Lot 1462 or who provided the money for its purchase.

123.He also said that Yip Yiu Kwai of the 1st fong passed away during the World War II.  Yip Tak had told him that there was never any family division and Chan Yung was not the materfamilias.  He also said that the three fongs had all along lived and cooked their meals separately.

124.Regarding the Family Meeting, the defendants did not give any evidence about it.  They through counsel advised the court at the beginning of the trial that they accepted that there was such a meeting, but it was only attended to by the plaintiff and her husband Yip Fong on the one hand and Yip Tak and his wife on the other and that Yip Tak had not made the alleged promise to include anyone of the 2nd fong as one of the owners of the Lot.  Furthermore, the 1st fong members only joined the meeting after the meeting was over.  Apart from these, neither counsel nor any defence witness advised the court on why the meeting was called or what was said by whom therein.

125.Since counsel cannot give evidence for his clients, I cannot accept the statements made by Mr Ngan save the defendants’ concession that there was indeed the Family Meeting.

126.Ip Chiu Fat also denied that the 3rd fong had made any representation or encouragement to the 2nd fong regarding the 2nd fong’s interest in the Lot or the building thereon.  He also said that given the history of the 2nd fong’s use and occupation of the G/F, his father and the defendants were content with the 2nd fong continuing with the occupation of the G/F for free.  It was out of politeness and respect for the 2nd fong’s living and privacy that they did not do anything to assert their ownership of the Lot against the 2nd fong.

DW2 Ip Ka Lung

127.Ip Ka Lung is the son of Ip Chiu Fat.  He was born in August 1971 and has been living on the 1/F.  He said in his witness statement that in early 2012, Yip Pak Cheong (PW5) phoned him and asked for his help to seek consent from the defendants for the plaintiff’s letting out of certain part of the Lot that the 2nd fong was occupying.  He told Yip Pak Cheong to contact the defendants directly.  He later relayed this conversation to the defendants.  However, in cross-examination, he only said that Yip Pak Cheong had merely told him of the intent to let out premises rather than seeking the defendants’ consent to do so.

DW3 Ip Pak Ling

128.Ip Pak Ling (“Pak Ling”) is the daughter of Yip Tak and younger sister of the defendants.  She was born in January 1952.  She lived in the 1/F until 1974 when she got married.  Her evidence is only on the renovation in the early 1980s.

129.She said in her two witness statements that nobody from the 3rd fong had ever suggested to the plaintiff to renovate or reconstruct the building on the Lot.  She agreed that the 2nd fong had paid half of the costs for replacing the termite infested roof of the G/F and the wooden staircase to the 1/F with concrete ones.  But she denied that Fung Ling had ever said that the 2nd fong owned any interest in the Lot or the building thereon.  There are some minor disputes as to who engaged the contractor or when the 3rd fong had constructed a 2/F on top of the building.  These are however matters that had occurred decades ago and are not of significance to the disputes herein.  I do not think it necessary to deal with them.

The letters of administration of Yip Luk’s estate

130.I would also mention that when Yip Tak applied for the letters of administration of the estate of his father Yip Luk, he claimed that Yip Luk had a 1/3 share of interest in Lot 1462 which was held in the estate of Yip Lai Yung.  This 1/3 interest is recorded in the schedule of properties annexed to the letters of administration of Yip Luk’s estate dated 10 July 1979.  The schedule of properties also contained a 1/2 interest in Lot 3 which, after the partition and division on 3 February 1982, became the Lot.

131.The letters of administration were registered at the Land Registry on 21 August 1979 by memorial no. 1746536.  The memorial was registered against both a 1/2 interest in the Lot and a 1/3 interest in Lot 1462.  The registration against Lot 1462 remained on the register until at least 28 February 1981 when a photocopy of the register was provided to Yip Pak Keung (A159).  But the reference to Lot 1462 in the memorial was struck through and the registration against this lot removed from the register on a later date as can be seen from the copy memorial (B378) and the computerized land search record now obtainable (B295-397).

132.The letters of administration and the memorial are evidence of Yip Tak’s one time claim to a 1/3 interest in Lot 1462 though the claim was withdrawn/abandoned on a date after 28 February 1981.  The withdrawal/abandonment of the claim may lend support to the plaintiff’s case that there was a family division which gave the house standing on Lot 1462 to the 1st fong alone and/or explain why Yip Chuen had spoken in favour of the 3rd fong in the Family Meeting.  The defendants have not provided any explanation on why Yip Tak had made and then abandoned this claim bearing in mind that the letters of administration were produced by the defendants. I have also mentioned this issue in the course of the opening of the trial.

Letters dated 30 April 2014 to the 1st fong

133.I have mentioned above that there is a letter dated 30 April 2014 from the plaintiff’s solicitors to Yip Wai Kwong, the son of Yip Chuen of the 1st fong.  It sought answers from Yip Wai Kwong on a few questions.  It asked Yip Wai Kwong whether the descendants of Yip Chiu Fu would be entitled to any benefit derived from Lot 1462 and, if not, why not.  It also asked whether the descendents of Yip Luk would be entitled to or had received any benefit from Lot 1462 and, if not, why not.

134.Ip Chiu Fat admitted that Yip Pai Fung, a great grandson of Yip Yiu Kwai of the 1st fong had gone with him to a conference with his solicitors. Yip Pai Fung also gave him a copy of this letter in the course of conference.  However, neither the 1st nor the 3rd fong had provided any answer to this letter.

ANALYSES OF THE EVIDENCE OF THE WITNESSES

PW2 Choi Lin

135.PW2, Choi Lin is 86 years old.  She has slight hearing and speech problems.  She was just 13 years old when the Japanese invaded Hong Kong on 25 December 1941.  She only received education up to primary three.  She witnessed the family division during the Japanese Occupation.  She was given to another family for survival as there was not enough food at home.  She was taken to the mainland and then returned to Hong Kong with her husband’s family shortly after 1949.  She returned to Shek O and lived with her mother Cheung Tai.  She worked as a janitor in the primary school in Shek O from 1958 for 30 years.

136.She was eager to tell the court the family history which she had learnt from her aunt Chan Yung and her mother Cheung Tai as well as all that she had witnessed.  She also volunteered to tell the court about the tragic death of Yip Yiu Kwai and the tough life of Chan Yung thereafter.  After Yip Yiu Kwai’s death, Chan had to single-handedly raise her newborn son and look after three young brothers-in-law.

137.Choi Lin told the court vividly about life before World War II, life during the Japanese Occupation and the family division.  Her eyes were moistened when she talked about life during the Japanese Occupation. Her answers to questions were to the point.  She bore the hallmark of a simple and truthful witness.  Owing to her age and slight geriatric problems.  If she should have lied, she would have been found out easily.

138.Mr Ngan, counsel for the defendants submitted that Choi Lin took Chan Yung as the materfamilias just because everybody gave his/her income to Chan Yung and Chan Yung took care of and managed the household affairs of the Yip family.  Counsel further submitted that Choi Lin’s reasoning was circular because she said everyone gave Chan Yung his/her income as Chan was the materfamilias. But she also said that Chan was the materfamilias because everybody gave his/her income to her.

139.I think what Choi Lin said actually demonstrated that she is a simple person.  What she said has to be understood in context.  She was not trying to explain or analyse why she would consider Chan Yung as the materfamilias, but was telling the court as a matter of fact that Chan Yung was the materfamilias of the Yip family before the family division.  If Choi Lin was telling the truth about Chan Yung’s tragic life, then the tough times that Chan had endured could explain why she was the materfamilias and respected by all her brothers-in-law.

140.Choi Lin’s evidence also shows that Chan not only took care of everything in the family, but also arranged marriages for two of her brothers-in-law.  This duty or privilege was usually reserved to the parents in the olden days.  The fact that Chan had taken this task upon herself meant that she was acting in loco parentis.  If her brothers-in-law should remain in the family after their marriages instead of setting up separate households, then she could have naturally become their materfamilias.

141.Counsel further said that Choi Lin was then only 13 years old.  Therefore counsel submitted that it was dangerous for me to rely on her limited observation of what Chan Yung and everybody in the family did.  He further submitted that it was dangerous for me to rely on her use of the word (當家) materfamilias to conclude that Chan Yung was actually the materfamilias having the authority and power to divide the family assets.

142.I disagree with the submissions.  Choi Lin did not make her observation in a limited time when she was 13.  She observed everything in the family from her birth.  Furthermore, Chan Yung did not require much authority to divide the family.  There was not much to divide save the three accommodation areas, a few pieces of furniture and a little bit of rice.  It was not the division of a big and wealth family that owned lots of properties and businesses.  In fact, the Yip family at the time of the alleged division had no income coming in.  There was imminent financial problem.  Each of the three fongs had a different number of mouths to feed.  If the family should be divided, Chan Yung’s burden as the materfamilias of a big family would be reduced to that of just the 1st fong.

143.Counsel also referred to my remark in the course of the trial that Chan Yung had also assumed duties that a proper materfamilias (當家) would not do.  Counsel then submitted that Chan Yung was no more than being the wife of the eldest son of Yip Lai Yung who was entrusted with the responsibility to manage the household affairs as all males had gone to the sea.  I would firstly explain that my remark was in response to Choi Lin’s evidence that Chan Yung appeared to be doing more than what a materfamilias would do.  I would also say that if Chan Yung was not the materfamilias and the three fongs were leading separate lives as contended by the defendants, then I can see no reason why Yip Chiu Fu and Yip Luk should have handed over their incomes to Chan Yung but not to their respective wives.

144.Counsel further submitted that Chan Yung’s duty to manage the household affairs did not give rise to her authority to distribute Yip Luk’s assets.  This submission however is misconceived as it is made on the basis of the defendants’ case that the Lot was owned by Yip Luk beneficially and not held by him on trust for the three fongs and Yip Yiu Fuk as contended by the plaintiff. If the Lot was beneficially owned by the whole family and Chan Yung the materfamilias, then she would have been able to preside over the division of the properties in the family division.

Fung Ling (PW3)

145.Regarding the evidence of Fung Ling, Mr Ngan submitted that I should accept the evidence of Pak Ling (DW3).  Since Pak Ling’s evidence conflicted with Fung Ling’s evidence, I should therefore reject Fung Ling’s evidence as a whole.

146.There are indeed a few matters that the evidence of Fung Ling did not tally with that of Pak Ling.  The plaintiff admitted that Fung Ling had made a mistake in saying that the pitched roof of the original building was replaced by a flat concrete roof in the renovation in the early 1980s when in fact it was replaced in the defendants’ renovation in the 1990s.

147.Regarding the supervision of the works, Fung Ling said she at that time had a full time job in the Leymun Barracks in Shaukeiwan and her day-off was on Thursday.  It was Pak Ling who returned to Shek O to supervise the works everyday although at other times she only returned to visit her father Yip Tak on holidays.  I am inclined to accept Fung Ling’s evidence as there had to be someone to supervise the works.  Fung Ling had to go to work and was not available to take up the task.  Nobody suggested that Yip Yak was there to supervise the works and direct the contractor on what to do.  As between Fung Ling and Pak Ling, it was Pak Ling who could be available.  Despite her household chores and the need to attend to her children, she had more flexibility to make herself available to supervise the works.

148.I also consider that it was the 3rd fong that had initiated the renovation in the 1980s as the flooring of the 1/F had problems and the staircase of access to the 1/F was infested by white ants.  Though the collapse of the flooring of the 1/F might pose as great a problem for the 3rd fong as for the 2nd fong, the collapse of the staircase could cut the 3rd fong’s access to the 1/F.  Hence, the 3rd fong would have a stronger desire to undertake the renovation.

149.Regarding the engagement of contractor, I think either Fung Ling or Pak Ling could have done it as they should both be familiar with the people in Shek O, which was then and still is a small village.  Since I find that it was more likely for the 3rd fong to have initiated the renovation, it was also more likely for the 3rd fong to have engaged the contractor.

150.Nevertheless, these matters of when the pitched roof was replaced, whether Pak Ling had engaged the contractor and supervised the works everyday are not of core significance.  These things had also happened decades ago and the memories of witnesses on them must have faded.  I do not think that the conflicts of evidence between Fung Ling and Pak Ling are matters that can provide much assistance to me in considering who is truthful.  The same would apply to matters like whether the flooring of the G/F had been repaired in the early 1980s or the 1990s.

151.The more important parts of Fung Ling’s evidence are what she had heard about the labour provided by Chan Yung and Cheung Tai in constructing the original building, the family division, her payment of the 2nd fong’s half share of the costs for the renovation in the early 1980s and the Family Meeting.  These are discrete issues that go to show the existence of a unified family under the care of the loco parentis of Chan Yung.  The existence of the unified Yip family could mean that the Lot and Lot 1462 were owned by the whole family and their division by the three households in the family division.

The other witnesses of the plaintiff

152.Regarding the evidence of Yip Pak Keung, Yip Pak Cheong and Yuk Kwan, Mr Ngan submitted that their evidence was on peripheral matters. He further submitted that their claim for the G/F was based on the story of family division told by Cheung Tai, but Cheung Tai’s basis for the family division was unclear.

153.I do not think that their evidence was peripheral or that the basis for the family division was unclear.  Yip Pak Keung and Yuk Kwan gave evidence on what they had been told by Cheung Tai regarding the construction of original two-storey building.  Yip Pak Keung also gave evidence on the Family Meeting which was attended to by the three fongs.

154.Mr Ngan also attacked Yip Pak Cheong as not being an honest witness because he did not mention the family division in his witness statement but insisted that Cheung Tai had told him about it.  Mr Ngan said that Yip Pak Cheong could not give a satisfactory explanation for not including the family division in his witness statement.  However, Yip Pak Cheong did explain in re-examination that he only put in his witness statement matters that he had firsthand knowledge.  On that basis, I do not think Yip Pak Cheong can be criticised for not mentioning the family division in his witness statement.

155.Mr Ngan also said that the plaintiff’s witnesses had discussed amongst themselves the history of the Yip family, the family division in 1942 and the conversation with Cheung Tai in 1983 for more than once before seeing their lawyers.  He submitted that their evidence could not corroborate and had contaminated one another.  I think if the disputes between the parties are on the details of the matters, then this submission would carry more weight.  However, the disputes are on the existence of these discrete events.  Hence, the honest but mistaken creation by the witnesses of non-existent events because of mutual reinforcement and cross-contamination from discussions is much less likely.

156.Mr Ngan also criticised the appearance of the same wordings and expressions in different witness statements.  I think this is the result of the use of copying software.  If the common practice of one witness adopting part(s) of the witness statement of another without repeating the content should have been adopted, this phenomenon of the same expressions appearing in more than one witness statement would not appear.  I do not think this phenomenon can produce a significant effect on the reliability of the witnesses.

Ip Chiu Fat (DW1)

157.Turning to the defence side, the person who is in the best position to give evidence in support of the defence case is Yip Tak.  The 1st defendant said Yip Tak had a sound mind and no serious problem with his memory. He could tell the defendants the matters that had happened before their births. Yip Tak could also communicate despite his hearing problem.  Nevertheless, the 1st defendant said in cross-examination that the 3rd fong had decided in a family meeting not to call Yip Tak despite his not knowing if Yip Tak would want to give evidence. The inference to be drawn from this is that the evidence that Yip Tak’s sound mind and good memory could offer is not going to assist the defendants.  This inference casts doubt on the veracity of the evidence of the 1st defendant who relies heavily on what Yip Tak had told him.

158.In summarising the evidence of the 1st defendant, I have also referred to how his evidence on Yip Luk’s wealth and the poverty of Yip Luk’s brothers had unfolded.  If the cause for Yip Luk’s wealth was his job as the storekeeper of the ship whilst his brother Yip Chiu Fu’s poverty was occasioned by opium, I wonder why these matters did not come out in the 1st defendant’s first witness statement.

159.Furthermore, the 1st defendant also alleged in para 43 of his second witness statement that Yip Luk had also pay for the purchase of Lot 1462 which was registered in the name of his father Yip Lai Yung.  But this important fact again only came out in the second witness statement.  I would also note that when the 1st defendant was cross-examined on this, he disclaimed knowledge of the same.

160.Indeed there are five significant matters in his two witness statements that he disclaimed knowledge in oral evidence.  I wonder who was the author of the witness statements or those parts of the statements that the 1st defendant had disclaimed knowledge.  For a few of these matters, Mr Ngan in re-examination took him to the particular paragraph and told him that the particular matter was in that part of his witness statement.  He then affirmed it as his evidence. I do not think such evidence has any worth.

161.Mr Ngan also submitted that the 1st defendant’s hearing was not good and he might have misunderstood the questions.  I dismiss this submission in strong terms.  It was because of the slight disadvantage in hearing that the 1st defendant might be suffering from that I paid particular attention to ensure his comprehension and understanding of the questions put to him.  I have no doubt whatsoever that the questions about those five matters were put to the 1st defendant clearly and the 1st defendant had a clear understanding of them before answering them.

162.The 1st defendant’s portrait of Yip Luk appears too good to be true.  He said Yip Luk had worked hard and become wealthy.  Yip Luk was generous to his brothers too.  His brothers and their families happened to be lazy spendthrifts who had to survive on his philanthropy.  He not only fed everybody, but also bought lands to build accommodations for them.  The 1st defendant said in para 43 of his second witness statement that Yip Luk solely provided the funds for the acquisition of Lot 1462 (though he disowned this statement in cross-examination).

163.Though the defendants deny that Chan Yung was the materfamilias, the 1st defendant agreed in his witness statement and oral evidence that Yip Luk did not keep his money to himself or his wife, but gave most of them to his elder sister-in-law, Chan Yung for her use in the management of the whole of the Yip family.  He did so despite complaints from his wife (paras 27 to 30 of the 1st defendant’s second witness statement).

164.The defence story is built not just on the alleged virtue of Yip Luk, but also on the failings of his brothers and their families.

165.Furthermore, in the defence case, Yip Luk was not the only person of tremendous virtue in the 3rd fong.  The defendants’ father, Yip Tak is also a virtuous person.  The 1st defendant said that Yip Tak also gave the 2nd fong a free licence to occupy the G/F.  Though Yip Tak was unhappy about the 2nd fong’s construction of unauthorised works in the Lot in the 1980s (para 38 of the 1st defendant’s first witness statement), he tolerated them because the 2nd fong people were his relatives.

166.The defendants were likewise virtuous persons. They continued the free licence.  They were also tolerant to the 2nd fong’s further undertakings of unauthorised works in 2002 and 2011 (paras 50 to 53 of the 1st defendant’s first witness statement).

167.It is also the defendants’ case that the 2nd fong had occupied the G/F as a bare licensee and free of charge since the early 1920s. By June 2012 when the defendants started HCA 1107/2012 to evict Fung Ling, this free licence had allegedly continued for nearly nine decades.  It started with Yip Luk when his brothers and their families were allegedly poor and lazy spendthrifts who had to rely on him for their food and lodging.

168.In contrast with the alleged philanthropy and generosity of the 3rd fong, the 1st and 2nd fongs as pictured by the defendants had many failings. The 1st and 2nd fongs were said to be poor and lazy spendthrifts.  The earliest head of the 2nd fong, Yip Chiu Fu was also alleged to be an opium addict.  However, that alleged scenario of the 2nd fong members being poor and lazy spendthrifts could not have continued into the 1980s when Fung Ling’s children had grown up and had joined the employment world.  There is no suggestion that these youngsters of the 2nd fong are also poor and lazy spendthrifts who have to rely on the generosity of Yip Tak and the defendants to provide them with the G/F as their accommodation. Nevertheless, the alleged free licence continued.

169.The 1st defendant had said in oral evidence that the market rental value of the G/F exceeded HK$10,000 pm.  If the 2nd fong indeed had no proprietary interest in the G/F, one wonders why the 3rd fong did not ask the 2nd fong or Fung Ling for a reasonable rental or for recovery of the G/F.  The 2nd fong had also not offered any rental or consideration in return for the benefit of the 3rd fong for about nine decades.  They only paid half of the rates and government rent levied on the Lot and the building thereon.  On the defendants’ case, the 2nd fong had enjoyed a lot of benefit at the expense of the 3rd fong.

170.Despite all the benefits it enjoyed, the defendants said that the 2nd fong had wrongfully put up unauthorised structures and did so repeatedly and without informing or obtaining consent from Yip Tak or the defendants.  Furthermore, Fung Ling was also daring enough to have asked the 1st defendant in about 1991 for some interest in the Lot to be given to her son without giving any reason or any claim of entitlement.

FINDINGS ON THE EVIDENCE

Findings on the Choi Lin’s evidence

171.Having analysed the evidence of the witnesses on both sides, I find that Choi Lin is a sincere and honest witness.  Her evidence on Chan Yung being the materfamilias and the family division during the war is reasonable and convincing.  Indeed, I find that she at her present age and health condition is unable to concoct such an elaborate story.  The fact that Chan Yung had at one time controlled the finance of the Yip family is also not in conflict with the defendants’ case.

172.I accept Choi Lin’s evidence that the three fongs were living and having meals together as a big family.  Everybody handed over his income to Chan Yung who was the materfamilias.  I also accept Choi Lin’s evidence of family division during the hard times of the war.  Her description of the alteration to the staircase as a result of the division of accommodation has a ring of truth too.  The family division also explains why the 2nd fong has been able to live in the G/F for decades without the need to pay any rent or licence fee.

Findings on the Fung Ling’s evidence

173.I also find Fung Ling a truthful witness.  The fact that Chan Yung and Cheung Tai had contributed manual labour to the construction of the original house on the Lot and that there was the family division during the war were matters talked about in the open at least in the 2nd fong.  Fung Ling’s offering and paying half of the costs to the 3rd fong for the major refurbishment of the building in the 1980s is in line with her belief that the 2nd fong owned the G/F of the two-storey building.  The 3rd fong’s acceptance of this sum is likewise reflective of its belief that the 2nd fong owned the G/F.

174.I do not believe the evidence of the defendants’ sister Pak Ling who said that Fung Ling offered to pay half of the substantial costs without saying why.  Even if Fung Ling was offering the payment out of gratitude for a rent free licence as the defendants would put it, she would have said so. But Pak Ling said Fung Ling just volunteered the money.  Such evidence is unreasonable and I reject it.

175.There was then the Family Meeting in about 1990 and 1991.  It is the plaintiff’s case that there were some 12 to 13 persons attending this meeting and Yip Tak at the end of it promised to include a member of the 2nd fong as one of the owners of the Lot.  The defendants admitted that there was such a meeting.  But adduced no evidence about it.  They did not dispute the plaintiff’s case as to what happened at the meeting save their denial that Yip Tak had made the alleged promise.

176.I find that there was this meeting in which the 2nd fong queried Yip Tak on why he had transferred the Lot to his sons without showing concern for the 2nd fong.  I also accept the evidence of Fung Ling and Yip Pak Keung that Yip Tak at the end of the meeting agreed to include a member of the 2nd fong as one of the owners of the Lot.  This was reflective of the 2nd fong’s ownership of the G/F which resulted from the family division.

Findings on the hearsay evidence of Yip Chuen

177.Regarding Yip Chuen’s allegation that Yip Luk had paid HK$1,000 for constructing the original building, I have grave doubt about it despite Yip Pak Keung’s inclination to accept it for his sole reason of trust of the 1st fong.  If Yip Luk had indeed made the contribution, it should have been known to the whole family and in particular, to the 3rd fong.  The 3rd fong would have relied on it in the defence of this action.  But it seems that it was only known to Yip Chuen of the 1st fong.

178.I also doubt the impartiality of Yip Chuen.  His interest in Lot 1462 had been subject to Yip Tak’s claim by the letters of administration of Yip Luk’s estate.  Such claim was withdrawn/abandoned at certain time after 28 February 1981.  The defendants have not explained the withdrawal/abandonment by Yip Tak of such claim.

179.In any case, the mere fact that this allegation was only mentioned by Yip Chuen of the 1st fong and nobody else is enough for me to doubt its truthfulness.  I would place no weight on it.

Findings on the devolution of Lot 1462

180.Another fact in support of the plaintiff’s case of a family division is the devolution of Lot 1462 unto the 1st fong only.  This Lot was owned by Yip Lai Yung.  The 1st defendant said in para 43 of his second witness statement that Yip Luk had solely provided the funds for its purchase.  But he disowned this statement in cross-examination and re-examination.  Hence, there is nothing to qualify Yip Lai Yung’s ownership of this lot.  However, this lot did not devolve unto his three sons, but was purportedly sold by Yip Chuen, his grandson of the 1st fong and administrator of his estate to Yip Chuen’s sons on 27 October 1975.

181.Yip Tak obviously did not accept this sale as an act of Yip Chuen in the administration of Yip Lai Yung’s estate.  Otherwise, he would not have claimed 1/3 interest of the Lot by registering the letters of administration of Yip Tak’s estate against this lot on 21 August 1979 which registration remained until sometime after 28 February 1981.

182.If Yip Chuen did sell this lot to his sons in the usual course of administering Yip Lai Yung’s estate, the 1st fong could also have said so in answer to the letter from the plaintiff’s solicitors to Yip Wai Kwong and dated 30 April 2014.  But there was no answer.

183.Putting the matter in the context of the history of the Yip family, Lot 1462 should have been allocated to the 1st fong by Chan Yung upon the family division.  That is the obvious reason for the 2nd fong not to make a claim for a 1/3 interest in this lot and for Yip Tak’s withdrawal/abandonment of his claim for the same.

Findings on the defendants’ evidence

184.I doubt the veracity of all that the 1st defendant had allegedly been told by Yip Tak as Yip Tak was available but deliberately not called by the 3rd fong.

185.The 1st defendant has also disowned knowledge of five significant matters in his witness statements which casts further doubt in my mind on the veracity of his evidence.

186.The evidence on the defence case of the wealth of Yip Luk and impecuniosities of his brothers also unfolded in a less than satisfactory way.  The belated revelation of the bases of these allegations in the 1st defendant’s second witness statement and oral evidence without explanation further weakens his credibility.

187.Furthermore, the mere fact that Yip Luk was the storekeeper on a ship like The Empress of Japan could not explain how he could have amassed so much fortune for the support of the Yip family as a whole and to purchase jointly with Yip Chuen Lot 3.  It is also the defence case that Yip Luk had engaged the service of an outside builder to construct the two-storey original building without any contribution of labour or other resources from any member of the Yip family. His position as a storekeeper surely could not explain the amount of wealth that would have been required for the discharge of all these tasks.  Moreover, if the two-storey original building was built by an outside contractor solely with Yip Luk’s money, it would have been known to the whole family and Yip Chuen would have said so in the Family Meeting.

188.Apart from the problem of Yip Luk’s unexplained source of alleged wealth, there is also the believability of his alleged philanthropy existing alongside of the alleged failings of his brothers and their families.  The defence case is built not just on Yip Luk’s alleged virtue but also on the alleged failings of his brothers and their families.  That is quite an incredible story.  In the light of all the problems in the defence case and in the evidence of the 1st defendant that I have mentioned above, I do not believe in this story.

189.I also do not accept that Yip Tak and the defendants would have repeatedly tolerated the 2nd fong’s unauthorised works if the 2nd fong is merely a bare licensee.

190.I also find it hard to believe that if the 2nd fong merely had a bare licence to occupy the G/F, the 3rd fong would not have ask the 2nd fong for payment for the occupation at least since the 1980s when Fung Ling’s children had grown up.  The defence case that the 2nd fong had enjoyed a free bare licence to occupy the G/F for about nine decades is incredible and hard to believe.

Acceptance and rejection of evidence

191.By reason of the foregoing analyses and findings, I believe in the evidence given by all the witnesses of the plaintiff.  I reject the evidence of all the defence witnesses insofar as they are in conflict with the evidence of the plaintiff’s witnesses.

Findings on the ownership of the Lot and Lot 1462

192.I find on a balance of probability that before Yip Luk and Yau Cheung had together purchased Lot 3, the Yip family was living in the building on Lot 1462.  At that time, all three households and Yip Yiu Fuk lived and shared their meals together as one family.

193.Chan Yung was then the materfamilias.  All income earners like Yip Chiu Fu, Yip Luk, Yip Yiu Fuk and Yip Chuen gave their income to her for her to disburse for the benefit of the whole family.

194.Lot 3 was purchased in the joint names of Yip Luk and Yau Cheung.  Yip Luk made the purchase as a representative of the Yip family. He was chosen as the representative because he was a more knowledgeable person than his fishermen brothers.  His share of the purchase price came from the family fund which was contributed to by the income earners and kept and managed by Chan Yung. When the family became more populous, Chan Yung decided to construct a building on the part of Lot 3 that was allocated to Yip Luk with the use of the family fund.

195.Both Chan Yung and Cheung Tai had contributed to the construction of the 2-storey building by transporting earth and rocks from the nearby hillside to the site.

196.After the 2-storey original building was constructed, the Yip family moved from the old building on Lot 1462 to the newly built building leaving Yip Yiu Fuk in the old building.

197.After the death of Yip Lai Yung on 30 August 1922, the buildings on Lot 1462 and the Lot were owned by the Yip family as a whole. After the death of Yip Yiu Fuk during the World War II, they became beneficially owned by the three fongs together.

198.Before the World War II, Yip Chiu Fu, Yip Luk and Yip Chuen were working as seamen on the ship The Empress of Japan.  But they all lost their jobs when the Japanese invaded Hong Kong.

199.Since there was no income for the Yip family, Chan Yung then decided on a family division.  In the division, the 1st fong was allocated the building on Lot 1462, the 2nd fong the G/F and the 3rd fong the 1/F and the roost on the G/F.  Each fong was also distributed some rice and some simple furniture.

Expert evidence on family division?

200.Mr Ngan took the point in final submissions that there was no expert evidence on the family division.  He said that the plaintiff was required to adduce expert evidence on the nature of a materfamilias〔當家〕, the power, right and privilege enjoyed by her under Chinese custom, the nature and effect of family division〔分家〕under Chinese custom, whether Chan Yung was the materfamilias and, if so, whether there was an effective family division in about 1942, whether Chan Yung had the power to deal with the beneficial interest in Yip Luk’s own real property; namely the Lot and whether Yip Chiu Fu was given one half of the beneficial interest in the Lot.  Since the plaintiff has not adduced any expert evidence on these matters, there is no evidence to show that Yip Chiu Fu was entitled to a share in the Lot merely because of the alleged family division.

201.I do not think the issues raised by Mr Ngan are really difficult or technical ones that I need the assistance of expert evidence before I can determine them.  Whether Chan Yung was the materfamilias is a matter of fact. The evidence proving her status is clear and unequivocal.  She was treated as such by everyone in the family.  All income earners handed their incomes to her.  She in control of everything important in the family including the family fund for disbursement for all the needs of the family.  She also arranged marriages for the young ones of the family.

202.I have also said above that there was not much to divide in the family division.  There were the three accommodation areas, a few pieces of furniture and a little bit of rice.  It was not the division of a big and wealth family that owned lots of properties and businesses.  The division was brought about by difficulties prevailing in war time.  It was a simple exercise of dividing the little assets in the family so that the three fongs could go their own ways to fight for survival.  The division was not meant to be a temporary measure. The removal of the 1st fong to the building on Lot 1462 and the modification to the staircase to the 1/F by the 3rd fong show that the division was not meant to be reversible.  After the division, the three households also had their meals individually.  The practice of the income earners handing over their income to Chan Yung also stopped.  Mr Ngan’s submission is also flawed as he assumed the Lot was beneficially owned by Yip Luk when I have held above that it was not.  I see no merit in this submission and I dismiss it.

Findings on the knowledge of Yip Tak and the defendants on the 2^nd fong’s interest in the G/F

203.The family division during the Japanese Occupation was not a secret.  It was directly brought about by the difficulties caused by the Japanese Occupation.  Before that, the whole family lived together as one unit under one materfamilias.  The war which led to the division changed the mode of living of the whole family.  The family division was talked about openly and known throughout the 2nd fong.  There is every reason to believe that the Japanese Occupation and the family division it brought about would have been talked about in the 1st and 3rd fongs as well.

204.Yip Luk passed away on 13 February 1953.  Yip Tak became the administrator of his estate on 10 July 1979.  He also assigned Yip Luk’s interest in Lot 3 unto himself on 3 February 1982.  He and the other owner of Lot 3 Yau Choy divided Lot 3 into the Lot and the Remaining Portion of Lot 3 and assigned the Lot unto himself on the same date.  I find that when he did all these transactions, he had full knowledge of the 2nd fong’s beneficial interest in the G/F which resulted from the family division. I find that all these transactions were subject to the 2nd fong’s beneficial interest.  The fact that he never asked for or was given any rent by the 2nd fong in respect of the G/F is indicative of his knowledge.  His non-interference with the 2nd fong’s unauthorized works is also confirmation of his knowledge.  His promise made at the end of the Family Meeting to include a member of the 2nd fong as an owner of the Lot is further confirmation of his knowledge. Yip Tak thus held the Lot as trustee for the 2nd fong in respect of its interest in the G/F.

205.There was a major renovation in the early 1980s. Fung Ling on behalf of the 2nd fong paid ½ of the costs.  I find that she did so because the 2nd fong beneficially owned the G/F and the 3rd fong beneficially owned the 1/F and the roost on the G/F.  I also find that this reason for the payment by the 2nd fong was known to the 3rd fong.

206.For the same reason, Fung Ling had paid Yip Tak ½ of the rates and government rent levied on the building on the Lot until about June 2012 when the defendants issued HCA 1107/2012 against Fung Ling.  I also find that Yip Tak was aware of the reason for the payments.

207.Yip Tak on 27 November 1989 assigned the Lot to the defendants.  The defendants should also be aware that the 2nd fong was living at the G/F since the family division and without paying any rent to Yip Tak.  They should know the reason for the non-payment namely that the G/F was and is owned by the 2nd fong beneficially as they had also not asked for or given any rent.

208.If Fung Ling was residing in the G/F as a licensee, when the defendants were assigned the Lot by Yip Luk, they would have told Fung Ling that they were the new owners and discussed with her on the terms of continuation or otherwise of the licence.  But there was no discussion at all. The Family Meeting was then held as a result of Fung Ling’s discovery of the assignment.  The lack of communication of the assignment to the 2nd fong points to the defendants’ knowledge of the 2nd fong’s beneficial interest in the G/F. They did not make this known to the 2nd fong for fear that the 2nd fong would ask to be included as the registered owners.

209.Fung Ling became aware of the assignment in 1990 to 1991.  The Family Meeting was then held.  I have also accepted the plaintiff’s evidence on the Family Meeting.  I find that at the end of the meeting, Yip Tak agreed to include someone of the 2nd fong as an owner of the Lot.

210.However, Fung Ling’s evidence is that on the day, Yip Tak said that the 1st defendant had refused to include a 2nd fong member as an owner.  Yip Tak further repeated the words of the 1st defendant and his wife: ‘[y]ou can be at ease, generation after generation will continue to live (here), (there would be) nothing, and it is not being sold, whoever’s name does not matter’.  I have accepted Fung Ling’s evidence.

211.If the 2nd fong was not known to the 1st defendant as the beneficially owner of the G/F, I can perceive of no reason why the 1st defendant and his wife would have been so generous as to allow the 2nd fong to live there for generations to come.  Their stance that the identity of the registered owner would not be material to 2nd fong’s residing in the G/F also indicated their knowledge that the defendants were merely holding the G/F interest on trust for the 2nd fong.  There is also no reason to suppose that the 2nd defendant did not have the same knowledge.  Hence, I find that the defendants hold the Lot as trustee for the 2nd fong in respect of their beneficial interest in the G/F.

212.I also find that there was never any licence given by Yip Luk, Yip Tak or the defendants to Yip Chiu Fu or any one of the 2nd fong to live in the G/F.  There is no evidence of any such licence.

LEGAL POSITION

213.The plaintiff’s case is that when Lot 3 was purchased by Yip Luk jointly with Yau Cheung, there was a common intention constructive trust over that part of Lot 3 owned by Yip Luk (which became the Lot).  This trust was varied upon the family division during the World War II.  The defendants deny this claim.  They assert that the 2nd fong was a bare licence of the G/F since the completion of the 2-storey original building in the 1920s.  The plaintiff has the burden of proof.

Common intention constructive trust

214.Underhill and Hayton’s Law of Trusts and Trustees (18^th ed) discusses common intention constructive trust in para 30.9 as follows:

“Common intention constructive trusts

30.9  A constructive trust may be imposed on property, such as a house in M’s name that is occupied by M and W as a shared family home, to give effect to M and W’s express or inferred (but not imputed) common intention (whether at the time of the purchase or subsequently) that W should have a beneficial interest therein, so leading W to act to her detriment in reliance on that intention, so making it unconscionable to allow M to deny W any interest by pleading the lack of the necessary written formalities for a valid declaration of trust or contract.”

215.Lewin on Trust (19^th ed) has a more detailed discussion in paras 9-062, 9-068, 9-069 and 9-075:

“The common intention constructive trust

The general principle

9-062  Where property is occupied in the domestic context, as a home for more than one party, the presumption of resulting trust has over the past decades gradually given way to changing social and economic conditions.  The search is now to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.  A constructive trust arises in connection with the acquisition by one party of a legal title to property whenever that party has so conducted himself that it would be inequitable to allow him to deny to another party a beneficial interest in the property acquired.  This will be so where (i) there was a common intention that both parties should have a beneficial interest either at the date of acquisition or at a later date, and (ii) the claimant has acted to his detriment in the belief that by so acting he was acquiring a beneficial interest.  Some element of bargain, promise or tacit common intention must be shown in order to establish such a trust. The trust comes into existence at the time of the conduct relied on, not when the court declares its existence, a point very material in the bankruptcy of one of the beneficiaries.  These principles apply equally whether the property is held or registered in the name of one or more parties, and take into account the presumption that the beneficial ownership of property will follow the legal ownership, and that the onus is on the party alleging that the beneficial ownership is different to show why.”

…

Common intention not to be imputed

9-068  In Jones v Kernott, a property had been acquired in joint names by a cohabiting couple.  It was not in dispute that, up until the time of their separation, they owned as beneficial joint tenants. There was no express agreement between them to vary those shares after separation, …, according to the majority in the Supreme Court, …, the existence of a common intention that beneficial ownership is to be shared, as distinct from the separate question of the quantification of the shares of the parties once such a common intention is established, cannot be imputed to the parties on the basis of what they would have intended had they addressed the issue of beneficial ownership. ...

The detriment

9-069  The claimant must prove that he has acted to his detriment in the reasonable belief that by so acting he was acquiring a beneficial interest.  This means that the claimant must have done something which he could not reasonably be expected to have done unless he was to have an interest in the property.  There must be some link between the common intention and the acts relied upon as detriment.  There is no difficulty in establishing such a link where the detriment consists of contributions to the deposit, expenses of purchase or mortgage instalments.  ...  The detriment need not necessarily consist of expenditure of money or some other quantifiable financial detriment, and it suffices that the claimant has changed his position in some substantial way in reliance on the common intention so that repudiation of the common intention by the defendant would be unconscionable.  But conduct of a kind that neither establishes a common intention nor amounts to reliance on it can be taken into account in qualifying the shares of the parties.

…

Quantifying the shares where no express agreement

9-075  Where the requisite common intention and detriment is proved, but no agreement as to the beneficial shares of each party can be found or inferred, the court will give effect to the common intention by determining the share the court considers fair having regard to the whole course of dealing between them in relation to the property.  The search is for what the parties, as reasonable people, would have thought at the relevant time, and thus for what they in fact intended.  The court may not abandon that search in favour of the result which itself considers fair.  In other words, the fairness must be assessed by reference to the parties’ dealings in relation to the property and not otherwise.  Even if the common intention is established by evidence of contributions to the purchase price, in determining what proportions the parties must be assumed to have intended for the beneficial ownership, a survey of the whole course of dealing between them relevant to the ownership and occupation of the property and their sharing of its burdens and advantages must be undertaken.  That scrutiny is thus not confined to direct financial contributions.  Only if no inference can be drawn as to what was intended does the court fall back on the maxim that ‘equality is equity’.  The factors to be considered include direct and indirect contributions to the purchase and to mortgage payments, even by way of loan to the legal owner, buying out a former tenant in common, and the supervision of a building project.”

216.Snell’s Equity (33^rd ed) also discusses this trust in paras 24-041, 24-046, 24-051, 24-053 and 24-057:

“24-041 (a) Summary. A constructive trust may arise when land is purchased as a joint home but where the registered legal title does not reflect the beneficial shares which the proprietors intended for themselves. The common case is of cohabiting partners who buy a house to live in as their home. The legal estate may be registered in the name of only one of them, and the name of the other does not appear on the registered title. Alternatively, both may be registered as joint proprietors but they do not intend to hold for each other as joint beneficial proprietors. In each case, a constructive trust may arise which binds the legal estate and gives effect to the parties’ common intentions as to their beneficial shares in the property. Those intentions are usually inferred from the entire course of dealings between the parties, and go beyond financial contributions to the purchaser or maintenance of the property. In sole proprietorship cases, the trust arises because it would be inequitable for the registered proprietor to hold the legal estate as sole beneficial owner given the contributions made by his partner in reliance on their shared understanding. In cases of joint proprietorship, it would be inequitable for one of the joint registered proprietors to take a larger share than he and his partner intended when each contributed to the property and their relationship.

…

24-043 …

(4) Relationship with resulting trust. In the past, the rules for ascertaining the parties’ intentions in this kind of constructive trust overlapped with the presumptions of intention that give rise to resulting trusts. Nowadays, however, where the parties buy the property as a joint home, the principles of resulting trust are unlikely to be relevant to defining the extent of the parties’ beneficial shares in the property. The assumptions as to human motivation in making gifts or providing for the maintenance of dependants which were relevant to the imputation of intentions under a resulting trust are no longer appropriate to the ascertainment of interests in a family home. A wider range of evidence is relevant to proving the parties’ share under a common intention constructive trust than was relevant to proving a resulting trust. Resulting trust principles may now only be relevant where the parties buy property for commercial purposes or as an investment, rather than as a shared home.

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24-048 …

(b) Express and inferred agreements. The claimant alleging the constructive trust or the different beneficial share in the property must prove that there was an agreement, arrangement or understanding about their respective beneficial shares in the property. The agreement may be based on evidence of express discussions between them or it may be inferred from their conduct. The relevant intention should generally be found when the property was first acquired, though later conduct may be relevant to proving what was previously intended. The parties may also intend that their beneficial shares should be “ambulatory” in the sense that they would vary over time. In that case, the parties’ conduct after the property was acquired would be directly relevant to ascertaining the existence and extent of each party’s beneficial share.

...

24-053 (2) Inferred agreement. Failing these express discussions, the agreement must be inferred. The primary search is to ascertain what the parties actually intended to agree, as deduced objectively from their words and conduct. They are therefore taken to intend what the other party would reasonably understand them to mean, rather than what might have been subjectively in each party’s mind. So one party’s actual intentions about the ownership of the property, which he did nothing to disclose to the other party, are not relevant to inferring their shared understanding. Likewise, if the proprietor of the legal estate does not know about the claimant’s conduct, it cannot support the inference of an agreement between them. The court cannot impose a solution on them which is different from what the evidence shows they actually intended. It follows that an agreement as to shared beneficial ownership cannot be inferred when the party who holds the legal interest in the property explicitly says that the other is not to have a beneficial share in it.

The relevant evidence is not confined to direct financial contributions made by the claimant to acquiring the property or to paying mortgage instalments. It may include: any advice or discussions at the time of acquisition that may shed light on the parties’ intentions; the reason why the property was registered in joint names or in the name of a sole proprietor; the purpose why the home was acquired; the nature of the parties’ relationship and whether they had any children; how the purchase was financed, initially and subsequently; how any mortgage liability and household expenses were met; and the extent to which they ran their finances jointly, separately, or in a coordinated way. …

Only where it is impossible to ascertain by direct evidence or inference what the parties’ actual intentions were as their shares in the property does the court resort to imputing an intention to them. The parties are imputed with an intention to take shares in the property which, as reasonable and just people, they would regard as fair had they thought about it at the time.

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24-057    Simple proof of the oral or inferred agreement between the parties or an unwritten declaration of trust would not be enough to entitle the claimant to an enforceable interest in the property under a trust.  Such an arrangement could only take effect as an express trust. It would be unenforceable since it would not be evidenced by writing signed by the party declaring the trust.  Accordingly, proof that the claimant has acted to his detriment in reliance upon the agreement that he would take an interest in the property is essential to explaining the constructive trust.  In these circumstances it would be fraudulent for the proprietor of the legal estate to rely on the formality requirements to deny the enforceability of the beneficial interest and claim the entire beneficial rights to the property for himself.  The constructive trust arises to prevent this result.  Where the agreed is inferred, then the parties’ conduct is both the evidence from which the agreement is inferred and the detriment which gives rise to the constructive trust.”

The 2^nd fong’s interests in the properties

217.On the basis of my findings above, Lot 1462 was originally owned by Yip Lai Yung.  He died intestate on 30 August 1922.  He had four sons. The eldest son Yip Yiu Kwai should have pre-deceased him.  Yip Yiu Kwai’s son was Yip Chuen.  Yip Lai Yung’s surviving sons and grandson were the beneficiaries of his estate comprising at least Lot 1462.

218.Lot 3 was jointly purchased by Yip Luk (representing the Yip family) and Yau Cheung on 26 June 1922.  The purchase price for Yip Luk’s share of Lot 3 came from the family fund kept by Chan Yung.  The fund was beneficially owned by the whole family.

219.There must have been an informal partition of Lot 3 between Yip Luk and Yau Cheung.  Yip Luk’s portion from the partition later became the Lot.  On the plaintiff’s evidence which I have accepted, Chan Yung procured the construction of a 2-storey building on Yip Luk’s portion of Lot 3.  She must have used the family fund for this purpose.  The building was used in conjunction with the building on Lot 1462 as accommodation for the Yip family including Yip Yiu Fuk who was single.

220.I am of the view that Chan Yung, Yip Luk and the other members of the family had a common intention inferred from the use of the family fund for the purchase of Yip Luk’s share of Lot 3 and for the construction of a building thereon that the beneficial interest in this portion of Lot 3 and the building thereon had vested in the whole family with Yip Luk holding the legal title as trustee.  The detriment suffered by each fong and Yip Yiu Fuk for acquiring this beneficial interest was the use of part of the family fund which was jointly owned by the whole family for the acquisition of the land and construction of the building.

221.There did not appear to be any demarcation or quantification of share of interest of this property at that time for any fong or member of the family.  It was used as the accommodation of the three fongs whilst Yip Yiu Fuk was living in the building on Lot 1462 by himself.

222.Yip Yiu Fuk passed away during the World War II leaving no issue.  Lot 1462 and the building thereon thus became beneficially owned by the three fongs with each fong entitled to 1/3 of its interest.  The beneficial interests of Yip Yiu Fuk in Yip Luk’s portion of Lot 3 and the building thereon were also extinguished in favour of the three fongs when he passed away.  There was still no quantification of each fong’s share of interests in this property.

223.There was then the family division as presided over by Chan Yung and concurred to by all three fongs.  Both buildings owned by the family were divided and allocated to the three fongs.  The 1st fong was allocated the building on Lot 1462, the 2nd fong the G/F and the 3rd fong the 1/F, the roost on the G/F and the staircase leading to the 1/F.  I find that there was a common intention of Chan Yung and the three fongs that each fong would be given all the beneficial interests of the accommodation allocated to it as the division was intended to be a permanent one.

224.The detriment suffered by each fong in return for the allocation was the abandonment and extinguishment of all the beneficial interests in the accommodation allocated to the other fongs.  The detriment was in return for the allocation of exclusive interests in the accommodation allocated to the fong.  The two were interconnected.

225.The grass house on Lot 1462 was not allocated to anyone in the family division and was still owned by the whole family.  That explains the need for Yip Yung Yau’s household of the 2nd fong to make payments to the 1st and 3rd fongs for its occupation of the grass house at a later stage.  This scenario created by the family division remains until today.

The defendants’ are not bona fide purchasers without notice

226.On my findings above, when the defendants were purportedly assigned the Lot on 27 November 1989 by Yip Tak at the alleged price of HK$200,000, they were aware of the 2nd fong’s beneficial interests in the G/F.  They were not bona fide purchaser for value and without notice of the 2nd fong’s interests.

Claims of resulting trust and proprietary estoppel

227.The plaintiff, in addition to relying on common intention constructive trust, also relies on resulting trust and proprietary estoppel.  Mr Poon, counsel for the plaintiff, did not rely on resulting trust anymore in his final submissions.

228.Regarding proprietary estoppel, Mr Poon submitted that even if the 2nd fong should have no proprietary interest in the Lot, it would have acquired some equitable interest therein by reason of its being encouraged by the 3rd fong’s acquiescence to participate in the major refurbishment of the original building in the early 1980s.

229.However, in the light of the disproportionality between the amount the 2nd fong had contributed to the refurbishment and the value of the G/F, I would consider that it fair to order the defendants to pay the plaintiff a sum representing the remaining current value of the extent of the refurbishment as procured by the 2nd fong’s contribution back in the early 1980s to extinguish the plaintiff’s interest acquired by proprietary estoppel (see paras 12-046 to 12-050 of Snell (33^rd ed)).

230.In the light of my finding in favour of the plaintiff on the existence of the common intention constructive trust, I do not think it necessary for me to consider further the relief that may be available to the plaintiff on the proprietary estoppel.

The defence of limitation

231.The defendants oppose the plaintiff’s claim by pleading sections 7, 8, 10 and/or 20 of the Limitation Ordinance, Cap 347 or alternatively laches and/or acquiescence.  They further say that the plaintiff is estopped from maintaining such claim.

232.There is no indication of the nature of the estoppel and Mr Ngan did not address it in his final submissions.  I would therefore say no more about this.

233.Though the defendants have pleaded sections 7, 8, 10 and 20 of the Limitation Ordinance, Mr Ngan in his final submissions only relied on section 20(1) and (2).

234.Before addressing the terms of the section, I would consider what is the breach of trust that has allegedly been barred by section 20 of the Ordinance.  The 2nd fong’s beneficial interests in the G/F resulted from the family division during the World War II.  Yip Luk was the trustee.  He passed away on 13 February 1953.  I have already decided above that the common intention constructive trust continued and Yip Tak continued with the role of trustee.

235.Yip Tak could have put an end to the trust by assigning half of the interests in the Lot with the exclusive right to use and occupy the G/F (except the roost and the staircase) to the 2nd fong.  But I do not think that his failure to do so can be taken as a breach of trust.  The reason being that the trust just continued as before and the 2nd fong’s right to enjoy the G/F was not curtailed or in any way disturbed or prejudiced.  When Yip Tak assigned the Lot to the defendants in November 1989, the trust again continued as before without any breach.

236.The breach that the defendants are relying on is their refusal to include a member of the 2nd fong as one of the owners of the Lot. That happened immediately after the Family Meeting.  However, the refusal should not be considered in isolation.  It was made in conjunction with an assurance that the trust would continue as before for generations to come and the 2nd fong’s enjoyment of the beneficial interests of the G/F would not be prejudiced.  The assurance was accepted by the 2nd fong though not without some reluctance.  If there was a wrongful refusal by the trustees to manage the trust properly which amounted to a breach, the breach was resolved amicably.  The trust just continued as before to the satisfaction of everyone.  The 2nd fong continued to reside in the G/F as before for another 20 years or so until the defendants’ institution of HCA 1107/2012 in June 2012 against Fung Ling.  I therefore do not see any actionable breach of trust by the defendants in or about 1991.

237.In case I am wrong in making this finding, I would also consider whether section 20(1) of the Limitation Ordinance would have prevented the limitation period to run in favour of the defendants.

238.Lord Hoffman, NPJ has in Peconic Industrial Development Ltd v Lau Kwok Fai (2009) 12 HKCFAR 139 discussed the construction of section 20(1).  The learned Judge said in paras 17 to 19 and 23:

“17. …, I think that the position is now clear and can be stated fairly shortly. The question turns upon the construction of s.20 of the Limitation Ordinance, Cap. 347:

‘(1) No period of limitation prescribed by this Ordinance shall apply to an action by a beneficiary under a trust, being an action―

(a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or a privy; or

(b) to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use.’

18. The terms ‘trust’ and ‘trustee’ are defined to extend to constructive trusts: s.2(1) and s.2 of the Trustee Ordinance, Cap. 29. It is accepted that, within this extended definition, a director of a company is a trustee in relation to its assets. …

19. The language of s.20, like most of the Ordinance, is taken word for word from the UK Limitation Act 1939. It was obviously intended to have the same meaning. … For the purposes of limitation, however, there are two kinds of constructive trustees. The distinction between them has been explained by judges on numerous occasions, from Sir William Grant in Beckford v. Wade(1805) 17 Ves Jun 87, 95-96 to Mr Richard Sheldon QC (sitting as a deputy High Court judge) in Cattley v. Pollard[2007] Ch 353, 360-376. First, there are persons who, without any express trust, have assumed fiduciary obligations in relation to the trust property; for example as purchaser on behalf of another, trustee de son tort, company director or agent holding the property for a trustee. I shall call them fiduciaries. They are treated in the same way as express trustees and no limitation period applies to their fraudulent breaches of trust. Then there are strangers to the trust who have not assumed any prior fiduciary liability but make themselves liable by dishonest acts of interference. I shall call them non-fiduciaries. They are also called constructive trustees but this, as Ungoed-Thomas J said in Selangor United Rubber Estates Ltd v. Cradock (No. 3)[1968] 1 WLR 1555, 1582 is a fiction: ‘nothing more than a formula for equitable relief’. They are not constructive trustees within the meaning of the law of limitation.

…

23. In my opinion, therefore, non-fiduciaries do not come within the definition of trustees in s.19 of the 1939 Act or s.20 of the Ordinance.  …”

239.I am of the view that the defendants have assumed fiduciary obligations in relation to the G/F by becoming the owners of the Lot with notice of the 2nd fong’s beneficial interests therein.  They are fiduciaries of the 2nd fong.  They hold the legal title to the Lot which is the trust property. For this reason, section 20(1)(b) of the Limitation Ordinance prevents the running of the limitation period in their favour.

Acquiescence

240.Mr Ngan in his final submissions restricted the defence of acquiescence to the plaintiff’s claims under the family division agreement and proprietary estoppel.  He submitted that the plaintiff had acquiesced in the defendants’ breach of trust.  The breach was their refusal to include a member of the 2nd fong as one of the owners of the Lot.  He further submitted that since that breach had occurred, the plaintiff had failed to do anything to affirm or defend its right under the family division agreement.  Such failure had induced the defendants to believe that the plaintiff had assented to the breach being committed.  He also said that the plaintiff’s inaction for over 20 years since 1991 had induced the defendants into acquiring the entire beneficial interests of the Lot.

241.There are problems in this submission.  Yip Tak assigned the Lot to the defendants on 27 November 1989.  The defence case is that the assignment conveyed both the legal and beneficial interests of the Lot to the defendants. There is no allegation by the defendants of any separate transfer of beneficial interests in the Lot to them after the assignment.  Hence, the allegation that the plaintiff’s inaction since 1991 had induced the defendants into acquiring the entire beneficial interests of the Lot has no factual basis and is misconceived.  This is the first problem.

242.The second problem of this submission is its misapprehension of the meaning of acquiescence.  The defendants’ refusal was intimated and completed at its intimation in 1990 to 1991.  It was not a continuing act.  But acquiescence only occurs when the breach in question is in progress, it cannot occur after the breach has been completed.  This has been explained clearly by the English Court of Appeal in De Bussche v Alt (1878) 8 Ch D 286 at 314:

“… If a person having a right, and seeing another person about to commit, or in the course of committing an act infringing upon that right, stands by in such a manner as really to induce the person committing the act, and who might otherwise have abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the act. This, as Lord Cottenham said in the case already cited, is the proper sense of the term ‘acquiescence’, and in that sense may be defined as quiescence under such circumstances as that assent may be reasonably inferred from it, and is no more than an instance of the law of estoppel by words or conduct. But when once the act is completed without any knowledge or assent upon the part of the person whose right is infringed, the matter is to be determined on very different legal considerations. A right of action has then vested in him which, at all events as a general rule, cannot be divested without accord and satisfaction, or release under seal. Mere submission to the injury for any time short of the period limited by statute for the enforcement of the right of action cannot take away such right, although under the name of laches it may afford a ground for refusing relief under some particular circumstances; and it is clear that even an express promise by the person injured that he would not take any legal proceedings to redress the injury done to him could not by itself constitute a bar to such proceedings, for the promise would be without consideration, and therefore not binding.”

243.If the defendants are contending that the plaintiff has acquiesced in the defendants’ breach in intimating the refusal in 1990 to 1991, this contention is flawed in that there could be no acquiescence of the act after its completion.  However, if the defendants are contending that the plaintiff has acquiesced in the defendants’ breach which occurred after the refusal in 1991, then it is not known what breach is being referred to.

Laches

244.Regarding laches, the defendants contended that there was an unduly long delay on the part of the plaintiff since 1991 to take action against the defendants when the plaintiff already had full knowledge of all relevant circumstances including the defendants’ denial of the plaintiff’s beneficial interests in the G/F.  They submitted that it was unjust to give the plaintiff the remedy sought in this action.

245.However, as I have found above that the 1st defendant’s refusal was intimated in conjunction with an assurance that the trust would continue as before for generations to come which assurance was accepted by the 2nd fong. The trust thus continued as before for another 20 years or so until June 2012. The 2nd fong had not done anything since the defendants’ refusal that could be taken as its waiver of any right that it now enjoys.  There is also nothing unreasonable to require the defendants to convey to the plaintiff half of the interests in the Lot with the exclusive right to occupy and enjoy the G/F now.  The defendants’ current position is the same as it was in 1991.  They have suffered no detriment by reason of the plaintiff’s delay since 1991.  The plea of laches therefore fails as well.

JUDGMENT

246.In the premises, I declare that the defendants are holding a half share of the Lot with the exclusive right to use, possess and enjoy the G/F on trust and for the benefit of the plaintiff save an except the roost on the G/F which is now a kitchen and bathroom and the staircase adjacent thereto with dimensions as shown on page A91.

247.I further order and direct the defendants to vest unto the plaintiff the rights and title to the half share of the Lot and the exclusive right to use, possess and enjoy the G/F save and except the said roost and staircase.

248.I also make a costs order nisi that the defendants do pay the plaintiff the costs of this action to be taxed.

Mr Kevin Poon, instructed by Yung, Yu, Yuen & Co, for the plaintiff

Mr Francis Ngan, instructed by Pang, Kung & Co, for the 1st and 2nd defendants

Schedule 1

葉氏家族圖