Leung Kwok Huen v. Leung Kwok Yue Richard

HCA 427/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 427 OF 2010

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BACKGROUND

1.This is a dispute between two brothers, the elder brother Leung Kwok Huen, the plaintiff, and the younger brother Leung Kwok Yue Richard, the defendant.

2.The plaintiff and the defendant are two of the four siblings in the Leung family.  The plaintiff is the elder brother followed by Leung Kwok Hing, the defendant and Leung Kwok Ching.

3.The subject matter of the action is the Property situated at the second floor of unit C of No 93‑95 Waterloo Road (the “Property”).

ASSIGNMENT OF THE PROPERTY SINCE 1971

4.According to the land search records, the Property was registered in the name of mother, Chan Kin Mai, in 1972.  The consideration was $185,000.  There are some disputes as to who contributed to the purchase money but nothing in this case turns on that save possibly the issue of credibility.

5.In late 1973, the Property was then registered in the name of Wong Yuk Ming (“Wong”), the then boyfriend and now husband of Leung Kwok Ching.  The consideration was $300,000.  Again, there is some dispute about the circumstances surrounding the transfer.  According to the plaintiff, the transfer was not made with any consideration but in fact was done by mother at the request of Wong.  The plaintiff contended that Wong “borrowed” the flat so as to use it as a security for loans to be made to Wong.  The plaintiff said that since the Property was purchased for the mother, he had not pursued the return of the flat until 1980 when he overheard mother asking for the return of the flat but was refused by Wong.  In those circumstances, the plaintiff said, he paid Wong $650,000 in order to have the flat reassigned to his name.  The defendant said he heard from the sister that it was not so.  Save for the issue of credibility, circumstances surrounding this transfer in 1973 are irrelevant to the issues here.

6.There is no need to decide on who contributed to the purchase in 1971 or indeed how and why the transfer took place in 1973 for the Property to be under the name of Wong.  It is also unnecessary to find out the circumstances that resulted in the reassignment of the Property to the name of the plaintiff in 1980.  The dispute between the parties relate to what happened in 1981 and 1982.

7.The Property was then subject to a mortgage in favour of Barclays Band International Limited to secure banking facilities in 1974 for a consideration of $300,000.  In 1977, a mortgage in favour of Dah Sing Bank Limited was secured for general banking facilities in the amount of $800,000.  The Property was subject to a further charge in favour of Dah Sing Bank Limited of $130,000 in 1978.

8.In 1980, the Property was for the first time registered in the name of the plaintiff.  The consideration was $622,500. There is no dispute that the plaintiff made or arranged the relevant payments for the purchase.  The plaintiff nonetheless complained that it was unfair as he had to make payments to get it back from Wong when he refused to transfer back to mother, a bare assertion on which I make no finding.  As with the earlier assignments, this assertion of the plaintiff is irrelevant.  A mortgage to secure an immediate advance and general banking facilities in favour of Kwangtung Provincial Bank was registered in 1980 for a sum of $850,000.

9.The dispute relates to the next transfer, registered as 19 January 1982, to the defendant for a consideration of $800,000.  A mortgage for the sum of $650,000 was taken out from BA Finance (Hong Kong) Limited on the date of the assignment and it was released in 1988, when the defendant left his employment with Wang Laboratory Corporation (“WLC”).  In 1990 and 1993, the Property was subject to other mortgages to secure general banking facilities.

PLAINTIFF’S CASE

10.The plaintiff’s pleaded case and the elaboration by counsel at the closing submissions may be summarised as follows:

(a) By reason of an Agreement reached in 1981, the defendant holds the Property on a common intention constructive trust for the plaintiff and/or for the occupation by the plaintiff and the family members:

(i) The plaintiff and the defendant agreed that the Property was assigned to the defendant under a common intention constructive trust whereby a scheme was put in place where the defendant would lend HK$800,000 to the plaintiff and subject to the two terms set out in sub‑paragraphs (iii)(A) and (iii)(B) below.

(ii) The reason for making such an arrangement was to avoid risks arising from the asphalt business of the plaintiff.

(iii) The common intention was that:

(A) The money paid by the defendant would cover repayment of the then mortgage.

(B) The defendant undertook to reassign the Property back to the plaintiff upon repayment of the money lent by the defendant to the plaintiff and the expenses incurred in the transfer.

(C) All the family members were to stay residing in the Property.

(b) A Further Agreement was reached in March 2000:

(i) Re‑assignment that ought to be made by March 2005: in March 2000, the plaintiff and the defendant agreed that on the condition that the defendant shall reassign the Property back to the plaintiff free from encumbrances within five years and with instruction that the defendant should repay all his indebtedness to the bank immediately with the money the plaintiff was to give to the defendant, the plaintiff repaid a total sum of US$200,000 and HK$1,550,000 to the defendant (the aggregate amount referred to as “the Sum”).  The defendant should therefore re‑assign the Property back to the plaintiff.

(ii) Alternatively, payment of the Sum was for purchase by the plaintiff in March 2000: the plaintiff said that the amount paid to the defendant was for an outright purchase of the Property as the value of the Property at the time was about HK$1.6 million.  Therefore the defendant was under an obligation to re‑assign the Property back to the plaintiff by March 2005.

(c) By reason of proprietary and/or promissory estoppel, the plaintiff is entitled to seek the reliefs sought.  (The defendant submits that the promissory estoppel has not been specifically pleaded.)  The facts relied upon are:

(i) the plaintiff acted in detriment by conveying the Property at a price below the market value in 1981/1982;

(ii) the plaintiff paid the Sum to redeem or purchase the Property;

(iii) the defendant failed to convey the Property to the plaintiff; and

(iv) the defendant seeks to take an unconscionable advantage of the plaintiff by denying that the plaintiff paid the Sum for the Property and then seeking to sell the Property and keep the proceeds when a developer approached owners of the building in which the Property situates with a view for re‑development.

(d) Reliefs sought: the plaintiff seeks an order for re‑assignment or assignment of the Property by the defendant to the plaintiff; a declaration that the defendant holds the Property on constructive trust for the plaintiff or occupation by the plaintiff and his family members; and damages for breach of the Agreement or Further Agreement.

11.The plaintiff’s plea in relation to the Agreement is set out in paragraph 9 of the Re‑Amended Statement of Claim.  The plaintiff submits that “to avoid the potentially huge financial risk arising from the asphalt trade and to retain the Property for use by family members, the Plaintiff accepted the Defendant’s suggestion [namely that the transfer of the Property to him at a consideration of HK$800,000 set out in paragraph 6 of the Re‑Amended Statement of Claim] and agreed to transfer the Property to the Defendant subject to the terms, inter alia, that the Plaintiff and all the family members were to stay residing in the Property and upon the Defendant’s undertaking to reassign the Property back to the Plaintiff upon repayment the money lent by the Defendant (“the Agreement”)”.

12.The position pleaded by the plaintiff in the Re‑Amended Statement of Claim in relation to the Agreement is that by early 1981, the plaintiff’s asphalt trading business faced huge financial risk and so the plaintiff asked his siblings to hold the Property for him “so as to avoid such a financial risk from endangering the Property and residence therein by his mother and his family members.”[1]

13.At that time, the Property was mortgaged to Kwangtung Provincial Bank for general banking facilities out of the plaintiff’s account which was overdrawn to the extent of HK$760,000.  This fact was originally pleaded but was deleted when the re‑amendments were made to the Statement of Claim.  The defendant still relies on that fact.

14.The plaintiff has made amendments to its claim.

(a) The defendant pointed out that the indisputable position of the law in relation to the need for memorandum in writing as set out in the Conveyancing and Property Ordinance would have defeated the plaintiff’s claim on the basis of its original plea.  However by the defendant’s request for evidence in writing supporting such agreement/trust, the plaintiff was then made aware of this defect and amended its claim and pleaded part performance based on the assignment to the defendant and the operation of a proprietary estoppel.

(b) The other change in the plaintiff’s pleaded case is the background to the need for the arrangement as asserted by the plaintiff.  Originally it was to deal with the financial difficulty of the plaintiff and to pay off some overdraft interests.  Then in the re‑amendment it was changed to a need to put the Property in the defendant’s name as the plaintiff was anticipating huge financial risk ahead in the asphalt business he embarked upon.  This purpose, the defendant said is illegal and the executory obligation to re‑assign should not therefore be granted.

(c) Another change in the plaintiff’s case highlighted by the defendant is the reason leading to the involvement of the defendant.  The plaintiff originally pleaded that the plaintiff feared for his inability to repay the mortgage and so the defendant offered to lend the plaintiff HK$800,000 when the plaintiff owed HK$760,000 to Kwangtung Provincial Bank at the time.  Later it is pleaded that the defendant lost a bag of the plaintiff’s diamonds worth about HK$1 million in Korea, and the plaintiff asked for a gesture of compensation but the defendant mistook that the plaintiff was financially inconvenient at that time and so suggested the transfer of the Property at HK$800,000 subject to an obligation to re‑assign and so the defendant meant to lend the plaintiff HK$800,000.

DEFENDANT’S CASE

15.The defendant denies the plaintiff’s contentions and asserts that:

(a) The Assignment dated 19 January 1982 (executed in or around end of May 1981) was a genuine transaction of the Property for consideration.  The purchase price is a fair market price as supported by the Expert Report of Mr Chan Cheung Kit.

(b) The alleged Agreement to re‑transfer the Property is contrary to the Assignment and void for lack of memorandum in writing.

(c) The plaintiff did not pay any expenditure on the Property save for the cost to repair a leakage on the roof, which is a common area anyway.  There is no resulting trust.

(d) The family members have stayed in the Property as licensees.  The plaintiff stays at the Property from around 2009 under a license at will.

(e) The payments made to the defendant in March 2000 were not related to the Property but to a business made by The People’s Holdings Co Ltd for which the defendant was involved with the other siblings, with his elder sister Leung Kwok Hing as the leader in that business.  There was no redemption or purchase of the Property.

(f) There was therefore no Agreement nor Further Agreement made between the plaintiff and the defendant.  The Property was therefore not held on any trust on behalf of the plaintiff and the proprietary estoppel plea is therefore not established.

(g) The defendant submits that even if there were such Agreement, it would be an illegal agreement or an agreement with an immoral motive and the executory obligation to reassign would not be enforceable.  (The plaintiff contends that illegality is not pleaded and should not be considered.)

(h) The defendant is the legal and beneficial owner of the Property and seeks an order for the delivery up of vacant possession of the Property and the defendant to pay mesne profits on the Property.

THE ISSUES

16.On the basis of the pleaded case, the issues are:

(a) Is there an Agreement as alleged by the plaintiff?

(i) If yes, whether such Agreement is valid and enforceable in law?

(ii) If yes to (i), whether it would create a common intention constructive trust and/or proprietary estoppel (or promissory estoppel, which was not pleaded) against the defendant?

(b) What is the nature of the payment of the Sum?

17.Both parties agree that this case turns on two main findings of fact.

FINDINGS

18.Sections 3(1), 5(1)(b) and 6(1) of the Conveyancing and Property Ordinance provides that any alleged agreement or trust in oral form will fail in law in the absence of any declaration of trust and/or memorandum filed in the Land Registry to support the existence of such agreement/trust.

19.In Errington v Errington,[2] it is clearly stated that at common law a licence was always revocable at will but this rule has been altered owing to the interposition of equity.  The plaintiff contends that by reason of the Agreement, the plaintiff is entitled to remain at the Property.

20.In Errington v Errington, it is stated at 298:

“… At common law a licence was always revocable at will, notwithstanding a contract to the contrary: Wood v. Leadbitter.  The remedy for a breach of the contract was only in damages.  That was the view generally held until a few years ago: see, for instance, what was said in Booker v. Palmer and Thompson v. Park. The rule has, however, been altered owing to the Interposition of equity.

Law and equity have been fused for nearly 80 years, and since 1948 it has been clear that, as a result of the fusion, a licensor will not be permitted to eject a licensee in breach of a contract to allow him to remain: see Winter Garden Theatre, London v. Millenlum Productions Ld., per Lord Greene, and in the House of Lords per Lord Simon; nor in breach of a promise on which the licensee has acted, even though he gave no value for it: see Foster v. Robinson, where Sir Raymond Evershed M.R. said that as a result of the oral arrangement to let the man stay, he was entitled as licensee to occupy the premises without any payment of rent for the rest of his days.  This infusion of equity means that contractual licences now have a force and validity of their own and cannot be revoked in breach of the contract.  Neither the licensor nor anyone who claims through him can disregard the contract except a purchaser for value without notice.”

21.The parties do not dispute that this is the position of the law.  Any licence at will is premised on the will of the title‑holder of the land and can be revoked subject to equity.  Yet such licence cannot, without more, affect the title or infringe on the right of the legal and beneficial owner to dispose of the Property as he sees fit.

22.The plaintiff was involved in a number of businesses at the relevant time of the subject assignment in 1981.  He was, on his own evidence, involved in the mushroom business albeit in a much smaller scale than when it started, the diamond business and the asphalt business.

23.The defendant on the other hand had returned to Hong Kong after his education in England which was supported financially in part by the plaintiff.  He was engaged as the regional head of WLC conducting businesses in the region and staying at times in Japan, at the time of the subject assignment.

24.Leung Kwok Ching, the youngest sister, married Wong and they do not reside in the Property after marriage.

25.The second sibling Leung Kwok Hing (deceased) was also in business and had some contacts in Mainland China and was able to close important deals including the business of acting as middle man for securing the acquisition of technology for the launching of communication satellite in China.

26.After the defendant left WLC in 1988, he had his own business but also assisted Leung Kwok Hing in the business in the People’s Holdings Company Limited.

27.After the Property was transferred to the defendant, the family continued to reside in the Property.  Whilst the plaintiff was mainly residing in Taiwan, there was a place for him at the family home.

28.There were also meetings amongst owners of the flats in the building containing the Property attended by the defendant.  Prior to the action, the Property was once leased out to a Ms Chen, a friend of the plaintiff.  There is no disagreement that the rent from Ms Chen was paid to the defendant.  The plaintiff never asked for the return of the rent.

29.Apart from the oral evidence of the plaintiff that he asked for the Property to be re‑assigned to him after 2000, which is denied by the defendant, there is no documentary evidence recording any such requests.

30.The claim arose when a developer sent a letter asking for the purchase of the Property for re‑development purposes.  Within a week of receipt of that letter, the plaintiff instructed solicitors and sent a demand letter on 30 March 2010 contending, inter alia:

“… [the defendant] actually holds the Property subject to the promise that when [the plaintiff] repays [the defendant] money [the defendant] settled to the bank on [the plaintiff’s] behalf in January 1982, you will reassign the Property back to [the plaintiff], and that pending such repayment, [the defendant] actually holds the Property or, in the event the Property is sold, one‑half of the proceeds, alternatively, the balance of such proceeds of sale thereof after deducting the sum our client owes you as aforesaid, on trust for our client.

It has recently come to [the plaintiff’s] notice that [the defendant] participated in negotiation for sale of the Property as if [the defendant] were the true beneficiary thereof and that [the plaintiff has] evinced an intention to pocket all or any part of the proceeds alone without regard to [the plaintiff’s] interest.”

31.There was apparently an attempt to mediate which was unsuccessful and the action was commenced on 21 March 2011.

(1)  The 1981/82 Agreement

32.Having considered the demeanor of the witnesses and assessing the evidence in the light of the surrounding circumstances, I reject the plaintiff’s case that there was an Agreement in the terms alleged.  The reasons are set out below:

(a) The Property was sold at $800,000.  According to the evidence of Mr Chan, the expert, the market value of the Property was $797,000. The plaintiff’s counsel contends that the evidence of Mr Chan should be rejected because he did not take into account the value of the subject Property.  Mr Chan said in re‑examination that there is no necessity to take that value into account.  There was no cross‑examination as to what the value might have been had that been taken into account.  There was also no reasoning proffered as to why the price of the Property should be taken into account in the valuation exercise that was done.  One would have thought that if the value of a property is to be assessed, the actual transaction price of that property could not logically be taken into account.  On the evidence before me, bearing in mind that the expert said it was not necessary to take that into account, the plaintiff’s challenge on the evidence of Mr Chan is unfounded and rejected.  In any event, even if that value was to be taken into account, there is no other evidence before me to suggest that the figure would have been different.  The evidence of the plaintiff that there was a request for him to sell the Property at $1.6 million is unbelievable.  In his witness statement, he also referred to offers in the order of $3‑4 million. I do not accept that such offers had been made in the absence of any evidence or circumstantial evidence to support that.  Whilst it may be that the plaintiff chose to sell the Property to the defendant, with a view to allowing the family to continue to reside in the Property, there is no evidence to suggest that it was sold at a price significantly below market value.

(b) The term of the Agreement is vague and not reasonable.  The suggestion that the defendant would have to reassign the Property once the plaintiff repaid the $800,000 which was said to have been lent to him is unbelievable.  There is no specific time that was mentioned as to when the plaintiff would have to repay so as to secure the return of the Property within five years of the repayment.  If the amount of $800,000 were indeed a loan, there would not have been any necessity to transfer the Property to the defendant.

(c) If the Property was assigned to the defendant when the loan of $800,000 were made, with a view to avoid the Property from being placed at risk when the plaintiff embarked onto the asphalt business, there is no reason why once that risk has been avoided, the plaintiff did not ask for the re‑assignment.  Indeed, the land search record shows that after 1988, when the BA Finance mortgage has been repaid, there were two further mortgages securing general banking facilities.  The defendant went into businesses after he left WLC in 1988 and therefore would be facing risks as well.  If the arrangement in 1981 were to assign to the defendant thereby avoiding the risks arising from the plaintiff’s business, so that family members could continue to reside in the Property, the plaintiff would have taken steps to ask the defendant to re‑assign the Property back to him when the defendant himself embarked on businesses and thereby exposed to risks, and also when the defendant applied for the two mortgages.  This did not happen.

(d) As to the term regarding family members to continue to reside, I accept that that was agreed upon whereby the family members were allowed to stay as licensee until the Property is disposed of by the defendant.  The defendant did not have to reside in the Property at the time nor now.  He has indeed allowed family members, including the plaintiff to continue to reside in the Property.

(e) The mortgage was taken out with BA Finance.  The defendant explained that it was difficult to secure mortgage at the time and he was able to obtain a mortgage from BA Finance, one of the bankers of WLC with which he was a regional head.  This mortgage was repaid in 1988 when the defendant left WLC.  The defendant’s evidence in this regard is believable and probable.

(f) When Ms Chen, the plaintiff’s friend stayed in the premises, the rent was paid to the defendant.  This lasted for a period of five years.  The plaintiff never challenged that.  This is consistent with the defendant being the legal as well as beneficial owner of the Property.

(g) The overall evidence of the plaintiff regarding this alleged Agreement is vague and unconvincing.  Insofar as credibility is concerned, the plaintiff’s demeanour and answers given in what might be called peripheral matters cast doubt on his evidence.  The changes in the plaintiff’s case starting from the demand letter sent on 30 March 2010 all the way to the Re‑Amended Statement of Claim manifests uncertainty and weakness in the plaintiff’s case as well.

(h) The plaintiff’s conduct after the assignment is also inconsistent with his assertion of the existence of such Agreement.  For over 10 years, there was no attempt to discuss the re‑assignment.

(i) The fact that the assignment was signed in May 1981 and was only registered as being dated 19 January 1982 is neither here nor there.  The documentary evidence shows that BA Finance starts to issue debit notes for mortgage payment in or around June 1981.

(j) Last but importantly, there was not a single piece of documentary evidence to record such alleged Agreement.

33.The plaintiff’s contentions in relation to the Agreement in 1981 is therefore dismissed, save that, as noted above, I do accept that there was an understanding that the defendant would allow the plaintiff and the other family members to stay at the Property without payment of any rent.  I so conclude in the light of the close relationship of the family members throughout the years and the support afforded to each other financially in times of difficulties, the evidence of the plaintiff, and the fact that this understanding was indeed implemented.  For this reason, I reject the defendant’s claim for mesne profits for the period when plaintiff was staying there.

34.I find that the assignment dated 19 January 1982 was a transfer of the Property form the plaintiff to the defendant at a consideration of $800,000.  I find also that the defendant had agreed to grant a licence at will to family members to stay and reside at the Property as had been the case since 1971.

35.The licence at will is therefore subject to allowing the plaintiff and other family members to stay at the Property.  The proprietary estoppel succeeds therefore only to the extent that the plaintiff is allowed to stay at the Property.  This licence will be terminated upon the defendant disposing of the Property as he is entitled to in law.

36.As to the plea of illegality, or lack thereof, there is no need to make any finding.  The assignment was a genuine arms length transaction assigning the Property to the defendant, there is no need to consider whether such arrangements were illegal or whether the doctrine of locus poenitentiae applies in the context of a constructive trust as opposed to a resulting trust.

(2)  Payment of the Sum in 2000 — the Further Agreement

37.There are two sums involved in the payment.  There is no proper explanation given by the plaintiff as to why part of it was paid out in US dollars.

38.Neither of the parties’ explanation regarding the nature of the Sum is entirely satisfactory.  The finding of the nature of the payment will therefore have to be one that is more probable and consistent with the other documentary evidence and surrounding circumstances.  The credibility of the two witnesses is also relevant but more so the plausibility of the circumstances of the payment.  I have in mind also the incidence of the burden of proof.

39.The reasons for rejecting the claim of the plaintiff that it was for re‑assignment or to purchase are set out below:

(a) There is no evidence to show how the sum of an equivalent of $3.1 million was made up.  According to the plaintiff it was to repay the $800,000 and the interest incurred.  The interest incurred in the mortgage would be up to 1988 but there is no evidence to show that the plaintiff knew what interest was incurred nor what the interest amount was.

(b) In the solicitors’ letter dated 30 March 2010, there is no mention that the repayments had been made.  In fact the letter said, “[the defendant] actually holds the Property subject to the promise that when [the plaintiff] repays [the defendant] money [the defendant] settled to the bank on [the plaintiff’s] behalf in January 1982.” (my emphasis)  Furthermore, the demand letter was asking for a 50% share as opposed to what the plaintiff is asserting now.  The repayment, if it actually took place, would have been an important factor and would no doubt have been informed to the solicitor at the time when the demand letter was issued.

(c) The lack of action for the transfer back after the alleged repayment is telling.  Even when the assignment took place in 1981, and even on the plaintiff’s case that that was a trust, some documentary evidence evidencing the alleged constructive trust would have been put in place by the execution of the assignment.  When this repayment was done, there was no documentary evidence whatsoever to record that the loan together with interest for the mortgage had been repaid.

(d)  The defendant’s contention was that the money was a result of certain business that he was involved with Leung Kwok Hing in the People’s Holdings Company Limited affairs.  There is evidence that the defendant was involved in the project as he has signed agreements in the capacity as authorized representative of People’s Holdings Company Limited.[3]

(e) As to the exact amount that was paid to the People’s Holdings Company Limited, the documentary evidence is unsatisfactory. Given the time gap from around early 2000 to now, the defendant was only able to secure from a Ms Zhou two documents showing moneys were paid out to the People’s Holdings Company Limited for the services they rendered.  One of such payment was actually made out to Top Way Trading Ltd (“Top Way”), a company of the plaintiff.  The defendant explained that sometimes Leung Kwok Hing would make payments via Top Way so as to enhance the cash flow position of Top Way.  This is arguably supported by the documentary evidence whereby a sum of US$1 million was paid into Top Way’s account[4] and immediately thereafter sums of US$200,000 were paid out[5].

(f) The payments of HK$1.55 million and the US$200,000 were also unusual in the sense that the exact same amount was also paid out to other persons on the same day.  This payment out in equal amount to other people including the defendant is more consistent with the defendant’s case that payments received by the People’s Holdings Company Limited would be shared by the defendant under the direction of Leung Kwok Hing.

(g) The defendant’s contention that the payment of the US$1 million to Top Way for services was for another project is fanciful especially when he could not explain what that project was but relied on his inability to discuss the matter on the basis that the transaction was a state secret.  I find that his evidence in this respect was unconvincing when confronted with the payment record and the bank statements surrounding payment of this amount of money.  The suggestion that it was a state secret is unbelievable because apparently Ms Zhou had no difficulty in providing the defendant with information of the payment to Top Way.

(h)  I also accept the defendant counsel’s submissions that the defendant’s readiness to accept the inaccuracy in the written statement regarding certain documentary evidence actually goes to show his reliability.  The defendant was willing to accept gaps in the evidence which could not be explained.  Leung Kwok Hing had passed away and he had tried to find the payment records in a transaction that was ultimately cancelled.  The reference to the repayment agreement in the witness statement has been clarified in the box by the defendant without trying to make up events to fill the gaps.

(i) As to the assertion that this amount of money is actually paid out as an outright purchase of the Property, it is even more unbelievable.  If it was indeed the case, there is no reason why the plaintiff would not have asked the defendant to have executed an assignment for over 10 years. The explanation proffered by the plaintiff was that it was to allow the defendant to use the Property to secure loan, it is entirely inconsistent with his assertion that the idea was to keep the Property in names of family members who are not subjected to such risks as he was when conducting the asphalt business.

(j) In the premises, I reject the plaintiff’s assertion that the payment of the sum was for the re‑assignment to take place or for the outright purchase of the Property.

(k) On balance, I prefer the defendant’s evidence that the payment was made for the purposes of profit in the business involving the People’s Holdings Company Limited.

40.The plaintiff contends that the payment of the Sum is either for the purposes of re‑assignment on the basis of the Agreement or to purchase the Property subject to it being formally transferred within five years.  I reject both allegations.

41.In any event, the alleged agreement to purchase the Property is not enforceable as there is no declaration of trust and/or memorandum in writing filed in the Land Registry contrary to sections 3(1), 5(1)(b) and 6(1) of the Conveyancing and Property Ordinance.  Not only was the memorandum not in existence at the time of the payment it was not in existence at the time when this action is commenced.

CONCLUSION

42.In summary, I conclude that:

(a) The 1981/1982 Agreement is not established and the plea for a declaration of a common intention constructive trust fails.

(b) Whilst there is some suggestion for a resulting trust in the plaintiff’s closing, it is not supported by fact in the light of the admitted limited contribution to the Property made by the plaintiff.

(c) A proprietary estoppel is established to the extent that the plaintiff can continue to stay at the Property before its disposal by the defendant.

(d) All other claims and counterclaims are dismissed.

COSTS

43.This is an unfortunate action that seems to have been taken out by the plaintiff without a good opportunity to communicate with the defendant on the differences.  The plaintiff has been unsuccessful in its attempt to obtain the legal title of the Property.  On the other hand, the defendant has failed to resist the contention that the Property was transferred to him in 1982 subject to allowing the family members to stay in it.

44.Costs would normally follow the event, but in this case neither party can be described clearly as a winner.  In relation to the issue of the title to the Property, a relatively larger amount of time has been spent dealing with it.  A comparatively lesser amount of time was spent on dealing with the agreement to allow family members to stay at the Property.  I assess that about 70% and 30% of the time of the hearing was spent on the two issues respectively.

45.In the premises, my initial view is that the plaintiff should bear and pay 70% of the defendant's costs, to be taxed if not agreed.  The defendant shall bear and pay 30% of the plaintiff's costs, to be taxed if not agreed.

46.I therefore find and hold that:

(a) The defendant is the legal and beneficial owner of the Property;

(b) The defendant is estopped from evicting the plaintiff unless and until the Property is disposed of;

(c) There be an order nisi that:

(i). The plaintiff shall bear and pay 70% of the defendant's costs, to be taxed if not agreed.

(ii). The defendant shall bear and pay 30% of the plaintiff's costs, to be taxed if not agreed.

(d) If either party wishes to seek to vary the costs order nisi, the following procedures shall apply:

(i) Any application to vary the costs order nisi with full written submissions shall be made to this court within 14 days of the date of this judgment.

(ii) The responding party shall respond within 14 days of such application.

(iii) The applicant shall file its reply, if any, within seven days thereafter.

(iv) There shall be no extension of time for the filing of such submissions unless directed by this court.

(v) Any application to extend time must be made to this court at least two days before the expiry of the relevant time period.

(vi) No further submission is allowed unless otherwise directed by this court.

(vii) The application shall be disposed of by way of written submissions unless otherwise directed by this court.

Mr Kwok Kam Kwan and Mr Freddy Chu, instructed by Ivan Tang & Co, for the plaintiff

Mr Alexander Wong and Mr Leung Yiu Kwong, instructed by Lo, Wong & Tsui, for the defendant