Hau Hon Shek v. Chung Fu Cheung
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HCA 1731/2011 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO 1731 OF 2011 _______________
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________________ JUDGMENT 1.The plaintiff claims against the defendant for trespass of a piece of land with a village house erected thereon. THE PLAINTIFF’S CLAIM 2.It is the plaintiff’s case that he is an indigenous villager of the New Territories and that by an assignment dated 26 September 2002 he became the registered owner of section F of Lot No 894 in Demarcation District 94, Sheung Shui, New Territories (“Lot 894F”). 3.The plaintiff applied for and obtained Building Licence No 68/2002 dated 23 October 2006 issued by the District Land Office North, New Territories (“DLO”) to erect on Lot 894F one village‑type house within 36 months (“the Building Licence”). 4.The Building Licence is subject to a number of terms one of which is a non‑alienation clause the effect of which is that the plaintiff cannot assign, part with possession or dispose of the village house to be erected on Lot 894F directly or indirectly or even agree to do so. 5.Pursuant to the Building Licence the plaintiff caused to be erected on Lot 894F a village‑type house (“the House”). 6.It is the plaintiff’s case that the defendant, without the consent or authority of the plaintiff, trespassed upon, entered and occupied the whole of the House thereby depriving the use and enjoyment by the plaintiff of Lot 894F and the House. THE DEFENCE 7.In a nutshell, the defence is that the defendant lawfully took possession of Lot 894F and the House in about March or April 2010 based upon an oral agreement for sale and purchase of Lot 894F and the House entered into between the defendant and one Tse Chung Shang (“CS Tse”), being the agent of the plaintiff, in October 2007 (“the Oral SP Agreement”) for the purchase price of $1,672,000 with completion to take place after the Certificate of Compliance having been issued and the premium for the removal of the non‑alienation clause in the Building Licence having been paid to government of HKSAR by the defendant. 8.It is the defence case that at some time before October 2007, the plaintiff had authorized CS Tse to engage a builder, Lucky Shing Ltd (“Lucky Shing”) to build a village‑type house on Lot 894F. 9.At or about the time of the Oral SP Agreement, the defendant paid to CS Tse, as part purchase price, the sum of $772,000 by way of setting off a debt owed by CS Tse to the defendant. 10.On or about 15 October 2007, the defendant paid the balance of the purchase price in the sum of $900,000 to CS Tse. 11.Thereupon, CS Tse, with the authority of the plaintiff, gave to the defendant the following documents relating to Lot 894F:
12.The above documents were kept by the defendant initially, and then handed over to the defendant’s solicitors, Messrs Leung Kin & Co in January 2010 for the defendant’s solicitors to prepare the documents for the assignment. 13.CS Tse died in May 2008, and Tse Tze Wah (“Madam Tse”), being the widow of CS Tse, took over from CS Tse acting as the agent of the plaintiff in this matter. 14.On 3 November 2009, the plaintiff gave and executed a Power of Attorney in favour of Madam Tse nominating and appointing Madam Tse to be his lawful attorney and to act in all matters relating to Lot 894F and the House including all dealings with the DLO and/or its consent to remove the non‑alienation clause in the Building Licence, the payment of the premium thereof and the subsequent sale or disposition of Lot 894Fand the House. 15.On 29 January 2010, the plaintiff attended the office of Messrs Leung Kin & Co and there executed a Power of Attorney in favour of the defendant appointing the defendant to act as the plaintiff’s attorney in all matters relating to Lot 894F and the House. 16.In March or April 2010 the construction of the House was completed. The keys of the House were then given to the defendant by either Madam Tse or Lucky Shing. 17.The plaintiff also authorized Madam Tse to deliver to the defendant the original of the following documents which she did on 8 June 2010:
18.The above documents were then passed over by the defendant to Messrs Leung Kin & Co to prepare the documents for the assignment. 19.After being given the keys to the House, the defendant took possession thereof and made improvements and alterations to the House. 20.The defendant also entered into two tenancy agreements leasing out the 2nd floor as from 1 November 2010 for $5,000 per month and also the ground and 1st floor as from 1 February 2011 at $8,000 per month. Each tenancy agreement was for a term of two years. 21.On the strength of matters raised in his defence, the defendant counterclaims for:
PLAINTIFF’S RESPONSE TO DEFENDANT’S DEFENCE 22.In response to the pleaded defence of the defendant, the plaintiff responded in his reply as follows: 23.CS Tse was a village elder. In 1997 CS Tse embarked upon a project to develop Lot 894 which was to be divided into 10 sections and for nine village‑type houses to be built thereon (Lot 894 was to be purchased from the Tsangs). 24.In 2002 the plaintiff was introduced to CS Tse who was seeking to recruit indigenous villagers for the development. 25.In August 2002 CS Tse made an oral agreement with the plaintiff for mutual co‑operation (“the Co‑operation Agreement”) upon the following terms:
26.Pursuant to the Co‑operation Agreement, CS Tse procured the assignment of Lot 894F from the Tsangs as vendor to the plaintiff as purchaser. 27.The plaintiff understood that all the deeds and documents relating to Lot 894F were kept by CS Tse’s solicitors pending implementation of the Co‑operation Agreement. 28.In early 2008, after construction of the House had started, CS Tse told the plaintiff that Lucky Shing who was constructing the House was his associate and at CS Tse’s request, the plaintiff consented to Lucky Shing taking over the place of CS Tse and releasing CS Tse from the Co‑operation Agreement. 29.In mid 2008 CS Tse died. 30.In November 2009, the plaintiff was approached by Madam Tse who said she will take over the project from CS Tse. The plaintiff believed Madam Tse. Madam Tse told the plaintiff he had to sign fresh documents with the DLO to deal with Lot 894F and that the defendant would contact him. 31.As a result, the plaintiff went to the office of the defendant’s solicitors and signed some documents there. He was then told by the clerk of the solicitors office that the documents he signed were to give consent to Madam Tse. No copies were given to the plaintiff. 32.Thereafter the House was built on Lot 894F by Lucky Shing and the Certificate of Compliance was issued by the DLO to the plaintiff but which was not known to the plaintiff at the time. 33.In the summer of 2010, Lucky Shing instructed solicitors to arrange for the plaintiff to sign a power of attorney in favour of Lucky Shing. It was only then that the plaintiff was told by Cheung Che Shing of Lucky Shing that Madam Tse and the defendant had no interest in Lot 894F. 34.On 17 September 2010 the defendant accosted the plaintiff and was asked by the defendant if the plaintiff had been asked by Cheung Che Shing to give a power of attorney to Lucky Shing. The defendant then demanded the plaintiff to attend the solicitor’s office of the defendant under threat. Fearing for his own safety, the plaintiff complied and at the defendant’s solicitor’s office signed certain documents still under threat of the defendant. 35.After discussing the matter with Cheung Che Shing in early January 2011, the plaintiff then reported the matter to the police and gave a statement to the police on 8 April 2011. 36.After the House was completed, the plaintiff did not take possession of the House and Lot 894F but the keys were retained by the Lucky Shing pending the removal of the non‑alienation clause. 37.The plaintiff did not deliver any title deeds of Lot 894F to either Madam Tse or the defendant. 38.The plaintiff also seek to rely on the following matters:
39.The plaintiff denies the existence of the Oral SP Agreement alleged by the defendant to have been made with CS Tse as the agent of the plaintiff for the sale and purchase of Lot 894F and the House. 40.The plaintiff says that at no time did the defendant have any right or interest to Lot 894F or the House. 41.The plaintiff also relies on the fact that if there was the Oral SP Agreement as alleged by the defendant, such was not evidenced in writing signed by the plaintiff or anyone authorized to do so and there was no and cannot be any part performance as that would be in breach of the non‑alienation clause in the Building Licence and unenforceable. 42.The plaintiff further says that he had made a declaration dated 26 September 2002 pursuant to his application for the grant of a building licence and was thereby obliged to strictly abide and comply with the terms of the Building Licence including the alienation clause, and that the plaintiff could not and did not appoint Tse as his agent to sell Lot 894F and/or the House. 43.It was shortly before the writ herein was issued that the plaintiff came to know through Cheung Che Shing of Lucky Shing that the defendant or persons claiming to be authorized by the defendant had unlawfully entered the House by changing the locks to the main door thereof and had carried out interior works therein. Soon after a complaint was made to the police of such unlawful entry and wrongful occupation. THE ISSUES 44.The central and primary issue which needs to be determined in this trial is whether or not the Oral SP Agreement existed as a valid and enforceable agreement between the plaintiff and the defendant. 45.In determining that central issue, the following subsidiary issues need to be resolved:
THE EVIDENCE 46.The plaintiff himself gave evidence and called as his witnesses, Cheung Che Shing of Lucky Shing and Ng Wai Chun of Jinda. 47.On the part of the defendant, the defendant himself gave evidence and called as his witness Madam Tse. A. Evidence of the plaintiff 48.The evidence of the plaintiff can be summarized as follows. 49.He is 31 years and was born and raised in Sheung Shui in the New Territories. He was educated in Chinese and knows some simple English. His village is Ho Sheung Heung and he is an indigenous villager. 50.He knew CS Tse to be a village head of Hang Tau village, also in Sheung Shui and knew him to be a land developer. 51.In 1997 CS Tse undertook a project to develop Lot No 894 in Demarcation District 94 which was owned by Tsang Foo Wing and Tsang Hin Kwong (collectively “the Tsangs”) by dividing Lot 894 into 10 sections and to construct nine village houses on 9 of the 10 sections. 52.In 2002 CS Tse sought to recruit indigenous villagers to take part in the project. CS Tse was introduced to him and in August 2002 he entered into the Co‑operation Agreement with CS Tse on the following terms:
53.CS Tse then arranged for the assignment of Lot 894F to the plaintiff for the stated purchase price of $350,000.00 carried out by a firm of solicitors, the senior clerk of whom was one Chun Po Lam (“Mr Chun”) and who the plaintiff came to know. When completed, the assignment was dated 26 September 2002 from when on the plaintiff became the registered owner of Lot 894F. The plaintiff was told by Mr Chun that the title deeds for Lot 894F would be kept by the solicitors while the Building Licence and three certificates of exemptions (being the 1st Set of Title Deeds) to be issued by the DLO would be kept by CS Tse to facilitate the construction of the village house on Lot 894F 54.The plaintiff then applied for and successfully obtained the Building Licence from the DLO with the terms and conditions stated thereon. 55.In early 2008, he was informed by CS Tse that Lucky Shing was an associate of CS Tse and that CS Tse had agreed with Lucky Shing for Lucky Shing to take over from CS Tse the construction of the house on Lot 894F, but that CS Tse would continue to supervise the construction. He then orally agreed and gave his consent to Lucky Shing taking over the Co‑operation Agreement from CS Tse and releasing CS Tse therefrom (“the Substitution Agreement”). 56.As a result and at the request of solicitors acting for Lucky Shing, he executed a general Power of Attorney dated 14 May 2008 in favour of Lucky Shing to facilitate the execution and completion of construction of the house on Lot 894F. 57.Some time in 2009, he was approached by Madam Tse who introduced herself as Tse Tze Wah, the widow of CS Tse and told him that CS Tse had passed away in mid‑2008. She also said she was the successor to his interests in land and property and would take over and handle all his projects in place of CS Tse. 58.He was then asked by Madam Tse to attend a firm of solicitors in Sheung Shui with the word “Au” in its firm name, the full name of which he has forgotten and there he signed certain documents which Madam Tse said was needed for her to retrieve documents relating to the construction of the house on Lot 894F. The documents he signed were in English and not explained to him. He was under the impression that Madam Tse was associated with Lucky Shing and did not question her as to her capacity. 59.Later, Madam Tse called him saying he had to sign further documents relating to Lot 894F to enable her to obtain a certificate of completion and permission from the DLO to deal with the units of the building thereon. Madam Tse also told him that one Chung Fu Cheung (being the defendant herein) was in charge of the matter and would contact him to sign those documents at a solicitors office called Leung Kin & Co. 60.In January 2010, by prior arrangement with the defendant, he attended Leung Kin & Co in Fanling and signed a number of documents prepared by them. He was only told that those documents had to do with Lot 894F and the construction of the house thereon. He was told that the documents he signed would be retained by the solicitors. He was under the impression that the defendant was also related to Lucky Shing. 61.Some time between March and April 2010 the defendant again called him by phone asking him to sign more documents relating to Lot 894F. Again he attended Leung Kin & Co in Fanling where he signed a number of documents in English. The documents he signed were kept by the solicitors and no copies given to him. 62.In the summer of 2010 Mr Chun called him. As a result he attended the office of Lucky Shing’s solicitors on 3 August 2010 and there was introduced to Cheung Che Shing, a director and shareholder of Lucky Shing, who told him that all the construction costs and expenses relating to the house on Lot 894F was paid for by Lucky Shing. Cheung Che Shing also said that CS Tse had told him of the plaintiff’s agreement to the Substitution Agreement, but a recent search of the Land Registry records had showed that he had signed a power of attorney in favour of Madam Tse who had no connection with Lucky Shing. 63.As a result of what he was told by Cheung Che Shing, he came to know that Madam Tse and the defendant had no connection with Lucky Shing. 64.As requested by Cheung Che Shing of Lucky Shing, he then executed two documents prepared by Lucky Shing’s solicitors to firstly, revoke all previous authorizations given by him and secondly, to grant a full Power of Attorney to Lucky Shing to enable Lucky Shing to deal with and fulfill the remaining conditions under the Co‑operation Agreement and the Substitution Agreement including the removal of the alienation clause in the Building Licence. 65.In mid‑August 2010 the defendant repeatedly called him but he did not take the calls from the defendant. 66.On 17 September 2010 the defendant accosted him in Sheung Shui and demanded to know if he had signed a power of attorney to Cheung Che Shing. The defendant then demanded him to go with him to the defendant’s solicitors’ office threatening violence to him and his family. For fear of his own safety and that of his family, he acceded to the defendant’s demands and was taken to Leung Kin & Co at Yuen Long where he was told to sign some documents prepared by those solicitors relating to Lot 894F but the contents of which were not told to him. 67.Due to his fear of the threats made, he did not initially report the matter to the police. 68.On 30 September 2010 he caused a land search record of Lot 894F to be made which showed to his surprise a provisional agreement for sale and purchase in favour of one Chan Tak Wo for $3.35 million, but he did not know of any Chan Tak Wo. 69.He then contacted Cheung Che Shing towards the end of 2010 and in early January 2011 made a complaint to the police at Lok Ma Chau Police station. On 8 April 2011 he gave a statement to the police of his complaint. 70.He then instructed solicitors (KH Yuen & David Cheung) to object to the registration of the provisional sale and purchase agreement and was advised that that provisional sale and purchase agreement was registered by Leung Kin & Co on behalf of the defendant. 71.His solicitors wrote to both the Land Registrar and Leung Kin & Co as to the objection to the provisional agreement for sale and purchase. 72.Initially Leung Kin & Co replied saying the defendant had a power of attorney to sell or deal with Lot 894F, but later withdrew the registration of the provisional agreement. 73.He had never authorized the defendant to sell Lot 894F. 74.Before he spoke to Cheung Che Shing in August 2010, he was under the misapprehension that Madam Tse was connected to Lucky Shing. Only after being told by Cheung Che Shing that he realized Madam Tse was not the authorized agent of CS Tse nor had she power to represent him. 75.Later he made a General Power of Attorney dated 25 March 2011 in favour of Lucky Shing to give effect to the Substitution Agreement and had subsequently revoked all previous powers of attorney prior to 25 March 2011. 76.He had never had any dealing with the defendant directly or indirectly in respect of Lot 894F nor any monetary dealing with the defendant. 77.Up to the time of completion of construction of the house on Lot 894F he had not taken possession of the House but had allowed Lucky Shing to retain the keys to it pending application to remove the non‑alienation clause in the Building Licence. 78.At no time did he permit the defendant to take possession or occupy the House on Lot 894F or to make any interior decorations thereto. 79.In September 2011 persons claiming to be the tenants of the defendant but without his consent had wrongfully and unlawfully trespassed onto Lot 894F and had occupied the house thereon. This came to the notice of Cheung Che Shing when he went to the house on Lot 894F. He then reported to the police at Sheung Shui, but to no avail. 80.Surveyors were appointed by him and a survey report made of Lot 894F. 81.As for the defence raised by the defendant, the plaintiff states that:
B. Evidence of Cheung Che Shing 82.The evidence of Cheung Che Shing can be summarized as follows. 83.He is a developer and investor in land and property in the New Territories and has carried on such business since the 1970’s. 84.He is the main shareholder and director of Lucky Shing. 85.He came to know CS Tse since about 1993 and who was a village elder of Hang Tau village in Sheung Shui. 86.Since 2005, he had business with CS Tse building and selling village houses in the New Territories. 87.In 1997 CS Tse embarked on a project to develop Lot 894, dividing it into 10 sections and recruiting indigenous villagers to take part in the development by building village houses on the divided sections. The plaintiff was so recruited for one of the sections of Lot 894. 88.CS Tse made the Co‑operation Agreement with the plaintiff in respect of Lot 894F, the terms of which are as stated by the plaintiff in the plaintiff’s evidence. 89.CS Tse paid the purchase price and caused Lot 894F to be assigned to and registered in the plaintiff’s name. 90.The plaintiff, being an indigenous villager, then applied for the Building Licence from the DLO. 91.When it was issued the Building Licence and three Certificates of Exemptions re Lot 894F were kept by CS Tse. 92.The Building Licence contained a non‑alienation clause. 93.In mid‑2007 CS Tse discussed with him the project relating to Lot 894F. They came to an agreement as evidence in a Chinese document dated 21 September 2007 between CS Tse and Lucky Shing to co‑operate in the project for Lot 894F. It was also agreed between CS Tse and Lucky Shing that their agreement would be subject to the Co‑operation Agreement between CS Tse and the plaintiff. The share of profit would be 25% to the plaintiff, 25% to CS Tse and 50% to Lucky Shing. 94.In November 2007, Jinda Engineering Co Ltd (“Jinda”) was engaged by Lucky Shing as the building contractor though its director Ng Wai Chun to carry out the construction works pursuant to the Building Licence and to apply to the DLO for all the necessary permissions thereof. 95.Jinda then submitted its application for the building works to the DLO. 96.In December 2007, during the construction of the house on Lot 894F, CS Tse and Lucky Shing reached a further agreement whereby CS Tse would transfer all his interest in the project on Lot 894F including his share of the profit of 25% to Lucky Shing in consideration of Lucky Shing taking over all of CS Tse’s obligation re Lot 894F including the payment of all the construction expenses and costs of the house being built on Lot 894F. As a result the Substitution Agreement was reached and the plaintiff consent thereto was also obtained by CS Tse. 97.Thereafter Jinda continued to be engaged for construction of the House on Lot 894F. 98.He knew that CS Tse, before his death, co‑habited with Madam Tse whom he has met and who was introduced and known to all as the wife of CS Tse. 99.In the latter part of 2008, he was told by Ng Wai Chun of CS Tse’s passing. He then called CS Tse’s home and was told by Madam Tse of his death. 100.In mid March 2010, Jinda completed construction of the House. Jinda then applied for the Certificate of Compliance. Some three months later Ng Wai Chun of Jinda informed him that enquiries with the DLO revealed that the Certificate of Compliance had already been issued to the plaintiff and would have been sent to the home address of CS Tse. 101.When he enquired with Madam Tse, she gave no definite answer to his enquiries about the Certificate of Compliance and was unwilling to assist him. 102.In July 2010, the solicitors for Lucky Shing learned from the DLO that the Certificate of Compliance had been issued dated 7 June 2010 to the plaintiff. 103.In August 2010 he again asked Madam Tse if she had received the Certificate of Compliance who told him that the defendant had repeatedly harassed her saying that CS Tse had borrowed and owed the defendant much money before his death and she had to settle these debts as the widow and successor of CS Tse and in order to appease the defendant, she had given to him all the property documents relating to Lot 894F which she had received from the post as security for settling the debts owed by CS Tse to the defendant. Madam Tse then suggested for him to contact the defendant to discuss the matter, giving him the defendant’s phone number. 104.He then called Mr Chun of the solicitors to contact the plaintiff for a meeting on 3 August 2010 in the solicitors’ office. On that occasion he met the plaintiff for the first time. He told the plaintiff he was the director of Lucky Shing who had paid for all the construction costs and expenses for the House. He also told the plaintiff that the defendant had no interest in Lucky Shing or in Lot 894F. 105.The plaintiff said he had all along mistakenly believed that Madam Tse and the defendant were connected with Lucky Shing and had given various authorizations to them under that mistaken belief. 106.He then asked the plaintiff to formally revoke all previous authorizations given by the plaintiff and to make a fresh power of attorney in favour of Lucky Shing so that Lucky Shing could deal with and manage Lot 894F and the House. The plaintiff agreed and signed those documents before leaving the solicitors’ office. 107.In late August 2010 he called the defendant with the phone number given to him by Madam Tse to asked about the Certificate of Compliance. The defendant gave no positive reply but asked to meet with him outside Kentucky Fried Chicken (“KFC”) in Sheung Shui. 108.They met in early September outside KFC when the defendant told him the defendant belonged to Wo Shing Wo, a well known triad society and that his “brothers” had interest in Lot 894F. He replied that he had no business or dealings with these people. The defendant said there were a few triad bosses involved and that Cheung Che Shing would not want to have trouble with them. He replied that if any threats were made, he would report to the police and then left. 109.After that meeting, he contacted Mr Chun (who had moved to another solicitor firm) fearing that the plaintiff may also be threatened. He asked Mr Chun to prepare another declaration for the plaintiff to confirm the plaintiff had revoked all previous authorizations. The plaintiff agreed to and made such a declaration dated 11 October 2010. 110.Meetings were held in December 2010 at the Rural Committee office in Sheung Shui between him and one Hau Chi Keung and Cheng Kam Kwong being part of the defendant’s group in an attempt to resolve the dispute, but nothing came of these meetings. 111.Because of the deadlock, he decided to call the defendant again, but was advised to make a tape recording in any further conversation with the defendant. This he did with a tape recorder. 112.Recordings were made in respect of conversations he had with the defendant on 8 January, 10 January, 13 January and 25 January 2011. 113.From extracts of the recordings it can be seen that:
114.Subsequently, he came to know that the defendant had made a report to the Sheung Shui Police Station alleging that he had made threats to the defendant and had claimed to be a member of the 14K triad society. Police from the Sheung Shui Police Station then interviewed him and took a statement from him in respect of the defendant’s complaints against him. He also handed to the police a set of the tape recordings of the conversations he had with the defendant. 115.He denied having mentioned the “14K” nor made any threats or demands of the defendant. C. Evidence of Ng Wai Chun 116.He is the sole director and shareholder of Jinda and carries on the business of a building contractor of small village houses for over 30 years. 117.In 1998 he came to know CS Tse as the village representative of Hang Tau village and a land developer, and who has lived at 565 Hang Tau village for many years. 118.Jinda was established in 2003 and since that time, CS Tse had engaged Jinda to build village houses. Due to his business association with CS Tse, he has been using the 2nd floor of 565 Hang Tau village as the office of Jinda. 119.In 2005, he was introduced by CS Tse to Cheung Che Shing, also a land developer and a business associate of CS Tse, and a director and shareholder of Lucky Shing. 120.Between 2005 and 2007, he was instructed by CS Tse to build village houses on Lots 894F, 894G and 894I of DD 94 and to apply for the Certificates of Compliance upon completion of the houses. 121.In respect of Lot 894F which was registered in the plaintiff’s name, CS Tse had already applied for and obtained the Building Licence as well as three certificates in respect of the building works from the DLO. He was given copies of those documents by CS Tse. 122.In October 2007, Cheung Che Shing of Lucky Shing appointed Jinda to build the House on Lot 894F as per the Building Licence. Lucky Shing was responsible for all of the construction costs of the House including site formation, drainage and sanitation works. CS Tse also confirmed to him that CS Tse had no longer any interest in the development of the House but had assigned all his interest therein to Cheung Che Shing with the consent of the plaintiff. 123.Jinda undertook the construction of the House. 124.He knew Madam Tse as the co‑habitee of CS Tse and who had been introduced to him by CS Tse as his wife. 125.In mid‑May 2008, when the House was only partly built, CS Tse passed away. He told Cheung Che Shing of CS Tse’s passing shortly after CS Tse’s death. 126.The House was completed by mid‑March 2010. Jinda submitted the Certificate of Completion to the DLO dated 16 March 2010 and requested the DLO for inspection and the issuance of a Certificate of Compliance. 127.Some three months later, enquiries with the DLO showed that the Certificate of Compliance had been issued to the plaintiff and had been sent by post to the address given by the plaintiff which was the residential address of CS Tse. He informed Cheung Che Shing of same. 128.The total construction costs came to $950,000 and was paid to Jinda by Cheung Che Shing on behalf of Lucky Shing. 129.Thereafter he handed over a set of keys to the House to Cheung Che Shing. The defendant was never involved with the construction of the House. However in cross examination he said he could not find any written record as to whom he had handed the keys to. D. Evidence of the defendant 130.The defendant’s evidence can be summarized as follows: 131.He came to Hong Kong from Mainland China in 1980 and now lives at 563 Hang Tau village in Sheung Shui. 132.He came to know CS Tse in about 2000 who lived with Madam Tse next door to him. He knew CS Tse to be a builder of village houses in the New Territories. 133.In 2002 he co‑operated with CS Tse in developing two small houses in Hang Tau village on Lot Nos 935C and 936C. He was bankrupt at that time and had to borrow money from a friend, a Ms Lee, to finance the project. Hung Fai Construction (“Hung Fai”) was engaged to build the two houses. He had paid Hung Fai a sum of $772,000 for the construction costs of the two houses, but after completion of the two houses, CS Tse had sold off the two houses without accounting to him his share of the construction costs of $772,000 and the profits from the sale. 134.CS Tse was therefore owing him a debt of $772,000. 135.In October 2007 he entered into the Oral SP Agreement with CS Tse acting as the agent of the plaintiff to sell to him the House on Lot 894F for $1,672,000. Completion would take place after the Certificate of Compliance had been issued and the premium for removing the non‑alienation clause had been paid to the government of the HKSAR. 136.Before October 2007, the plaintiff authorized CS Tse to deliver to him the Building Licence and three certificates of exemption being the 1st Set of Title Deeds to the House. These documents were delivered to him by CS Tse upon his payment of $900,000 as being the balance of the purchase price for the House. He retained the 1st Set of Title Deeds in his safe custody. 137.CS Tse passed away in May 2008 and Madam Tse took over CS Tse’s role as agent of the plaintiff and had since been responsible for carrying out the Oral SP Agreement on the plaintiff’s behalf. 138.On 3 November 2009 the plaintiff executed a power of attorney in favour of Madam Tse appointing her to act in matters relating to the House and Lot 894F. 139.In January 2010 he delivered the 1st Set of Title Deeds to his solicitors, Leung Kin &Co for them to prepare the assignment of the House and Lot 894F to him. 140.On 29 January 2010, the plaintiff attended the office of Leung Kin &Co and there executed a power of attorney in his favour nominating and appointing him to act in all matters in relation to Lot 894F as fully and effectually as the plaintiff himself could do in relation to Lot 894F. 141.Some time before 8 June 2010, the plaintiff had authorized Madam Tse to deliver to him the originals of the Certificate of Compliance and a letter from the DLO dated 8 June 2010, being the 2nd Set of Title Deeds. He then kept them in his safe custody, delivering them in June 2010 to Leung Kin & Co for them to prepare the assignment of the House and Lot 894F to him. 142.In reliance on and in part performance of the Oral SP Agreement, he did the following acts:
143.He also gave evidence that the two powers of attorney signed by the plaintiff and dated 3 November 2009 given in favour of Madam Tse and the second dated 29 January 2010 in favour of himself contradict the plaintiff’s evidence that the plaintiff was asked to sign documents “to retrieve the documents relating to (the House)”. 144.He denies having made any threats to the plaintiff as alleged by the plaintiff. 145.On or about 13 August 2010 Chan Tak Wo had signed a provisional sale and purchase agreement with him by which Chan Tak Wo had agreed to purchase the House at $3.35 million. 146.On or about 24 September 2010 solicitors of Chan Tak Wo informed his solicitors that the sale could not be proceeded as someone had registered a writ against Lot 894F. 147.In early January 2011 someone claiming to be Cheung Che Shing phoned him and asked to meet in Sheung Shui to discuss Lot 894F. Cheung Che Shing claimed to be a member of 14K. When they met, Cheung Che Shing demanded from him the title deeds of Lot 894F saying that he (Cheung Che Shing) had co‑operated with CS Tse to build the House. He then asked Cheung Che Shing for repayment of $1.5 million before he could give the title deeds of Lot 894F to Cheung Che Shing. 148.On 25 January 2011, Cheung Che Shing appeared outside his home and demanded him to cancel the sale and purchase transaction threatening otherwise to make him disappear. He then made a complaint to the police. 149.It was some two months later that the plaintiff made a complaint to the police about him. 150.By letter dated 20 August 2011, his solicitors wrote to the plaintiff’s solicitors to put on record that in 2007 the plaintiff, through his agent CS Tse had agreed to sell Lot 894F and the House (to be constructed thereon) to him for $1,672,000. The plaintiff never replied to that letter. 151.On 13 October 2011, the plaintiff issued the writ herein against him. 152.He then requested Leung Kin & Co to return the originals of the title deeds relating to Lot 894F to him which Leung Kin & Co did. He confirms that he has possession of those original documents. 153.In his supplemental witness statement which he also adopted as evidence, the defendant corrected a mistake made in his earlier witness statement when he referred to the Demarcation District of the two houses the defendant co‑operated with CS Tse to build in 2002 on Lot 935C and Lot 936C as being DD 94 when in fact it should have been DD 100 and explained how that mistake came about. E. Evidence of Madam Tse 154.The evidence of Madam Tse can be summarized as follows: 155.At all material times she had lived with CS Tse in Hang Tau village co‑habiting with him there as husband and wife for over 30 years. Since 2003, they lived at 565 Hang Tau village. 156.Before CS Tse passed away in May 2008, he carried on the business of a builder of small houses in Hang Tau village. 157.In October or November 2007, the Oral SP Agreement was reached between CS Tse and the defendant by which CS Tse sold to the defendant Lot 894F and the House (to be built thereon) for $1,672,000. She was present when the Oral SP Agreement was made between them. 158.In her witness statement (which she adopted as her evidence in chief) she stated that CS Tse had the full authority of the plaintiff to sell Lot 894F and the House to be built thereon. However, under cross examination, she said that Lot 894F belonged to CS Tse and he did not need the authority of the plaintiff to sell same. 159.Moreover, in her witness statement she had stated that it was agreed that completion would take place after the Certificate of Compliance for the House has been issued and the premium for alienation of the House has been paid to the HKSAR, but in cross examination said that those were not the terms of the Oral SP Agreement, the only term being the payment of the purchase price. 160.After the defendant had paid the purchase price to CS Tse, the defendant was given the original of the Building Licence and three certificates of exemptions, being the 1st Set of Title Deeds, which was witnessed by her. 161.CS Tse passed away suddenly in May 2008. She then took over his role and had since been responsible for carrying out the Oral SP Agreement on the plaintiff’s behalf. 162.On 3 November 2009 the plaintiff executed a power of attorney in her favour nominating and appointing her to be the plaintiff’s lawful attorney to act in all matters relating to the House and Lot 894F. It is not true as alleged by the plaintiff that he signed documents to enable her to “retrieve documents relating to (the House)”. That power of attorney was to enable her to carry out the Oral SP Agreement. 163.In March or April 2010 the House was completed and pursuant to the Oral SP Agreement the keys of the House were given to the defendant who took possession of same since that time. 164.In about June 2010 with the plaintiff’s authorization, she delivered to the defendant the original of the Certificate of Compliance and a letter from the DLO dated 8 June 2010, being the 2nd Set of Title Deeds. DETERMINATION A. Introduction 165.In this trial, there is no dispute that the plaintiff was and became the registered owner of Lot 894F since 26 September 2002 and therefore has the legal title to Lot 894F since that time. 166.In his final submission, counsel for the defendant takes issue with the credibility of the plaintiff and Cheung Che Shing on the basis that there being nothing in writing, the plaintiff and Cheung Che Shing was able to give the same kind of detail relating to the terms of what was agreed between the plaintiff and CS Tse in relation to the Co‑operation Agreement between them. 167.Whatever the exact terms of the Co‑operation Agreement may have been between them, there can be no dispute that the Co‑operation Agreement existed since the plaintiff was made the registered owner of Lot 894F and the House was actually built on Lot 894F. 168.Nor can counsel’s challenge on the credibility of the plaintiff and Cheung Che Shing in so far as that relates to recounting the oral terms agreed in the Co‑operation Agreement, alter or affect the position of the plaintiff being the registered owner of Lot 894F. 169.Basically, the Co‑operation Agreement, stripped to its bare essentials, was for the plaintiff to lend his name, being an indigenous villager, to enable CS Tse to build the House on Lot 894F, and thereafter to give to the plaintiff 25% of the net proceeds after the sale of the House. It is only the defence case which challenges the position of the plaintiff being the registered owner of Lot 894F in that the defendant seeks by its case to establish that the defendant has bought Lot 894F from the plaintiff by the Oral SP Agreement made with CS Tse as the agent of the plaintiff, and the defendant has also taken possession of Lot 894F and the House pursuant to the Oral SP Agreement. 170.On that introductory note, I can only reiterate the words of counsel for the plaintiff who says that the burden is squarely upon the defendant to establish his rights, interests and entitlement based on the Oral SP Agreement and that the plaintiff has nothing to prove. 171.It is only in refuting the defendant’s case mounted on the Oral SP Agreement, that the plaintiff has put forward the Co‑operation Agreement and the Substitution Agreement and that both he and Cheung Che Shing has given evidence relating thereto. 172.The divergence, and therefore the dispute, only comes about when on the one hand the defendant says that CS Tse sold the House to the defendant under the Oral SP Agreement for $1,672,000 and on the other hand, the plaintiff and Cheung Che Shing says that there was the Substitution Agreement whereby Cheung Che Shing took over all the rights, obligations and interest of CS Tse with the consent of the plaintiff in the development and construction of the House on Lot 894F. B. Did the Substitution Agreement exist? 173.There is no question but that the House was built on Lot 894, the completion of the House being some time in about March or April 2010. The first question to determine is who paid for the construction of the House. 174.From the evidence, it is clear that the plaintiff did not pay for the construction of the House since he was only a pawn lending his name to the project. 175.The defendant does not say that he had paid for the construction of the House. His evidence was that Lucky Shing was engaged to build the House. 176.There is no evidence from Madam Tse that she or CS Tse had paid for the construction of the House. 177.The evidence showed that construction of the House started in or about October 2007. CS Tse died on 8 May 2008 and it was not until November 2009 that Madam Tse came into the picture when she approached the plaintiff to ask him to execute a power of attorney in her favour. The construction of the House was completed in mid‑March 2010. 178.Since construction of the House began in or around October 2007, it would be strange to say the least that if CS Tse was still involved with the building of the House at the time of his death, nobody would have approached Madam Tse to seek for either instructions or for the payment of the construction cost of the House from the time of CS Tse’s death until its completion in March 2010. But no such evidence came from her. 179.The only evidence relating to the payment of the construction costs of the House came from Cheung Che Shing who said that Lucky Shing, having taken over the project from CS Tse pursuant to the Substitution Agreement, had paid for all the construction costs of the House. 180.In this, his evidence was confirmed by that of Ng Wai Chun of Jinda, the contractor engaged to build the House. 181.It was also acknowledged by the plaintiff that by reason of the Substitution Agreement, Lucky Shing would be responsible to bear all the construction expenses for the House, as indeed was the position. 182.I have no difficulty in accepting the evidence from Cheung Che Shing and Ng Wai Chun that it was Cheung Che Shing and/or Lucky Shing who had paid for the construction of the House. 183.Once that premise is reached, it must be asked why then would Lucky Shing and/or Cheung Che Shing pay for the construction of the House? 184.The only possible answer to that question must be the existence of the Substitution Agreement by which Lucky Shing took over all of the obligations from CS Tse under the Co‑operation Agreement. 185.I therefore accept the evidence of the plaintiff and Cheng Che Shing and make the finding that there was the Substitution Agreement agreed between them and CS Tse which was agreed by them either at the end of 2007 or early 2008. That slight difference in time I would ascribe it to faulty memory due to the fact that the Substitution Agreement was not in writing. C. Did the Oral SP Agreement exist? 186.I turn now to consider whether or not the Oral SP Agreement existed. 187.It must be noted at the outset that the Oral SP Agreement alleged and relied on by the defendant in this case is an agreement made on behalf of the plaintiff by CS Tse. It is the defendant’s case and his evidence that all the dealings, discussions and negotiations in reaching the Oral SP Agreement were made between him and CS Tse and he had no direct dealings with the plaintiff in coming to the Oral SP Agreement. 188.If the Oral SP Agreement was made by the defendant and CS Tse (but who was not acting as or authorized to act as the agent of the plaintiff), then that agreement cannot be binding on the plaintiff and the defendant is out of court in so far as this case is concerned. 189.Therefore in coming to a decision as to whether the Oral SP Agreement existed for the purpose of deciding this case as between the plaintiff and the defendant, it is only necessary and sufficient for me to make a finding as to whether the Oral SP Agreement existed as alleged by the defendant, namely, that CS Tse was acting or authorized to act as the agent of the plaintiff. 190.It is not necessary for me to make specific findings as to whether CS Tse was acting in some other capacity, not being the agent of the plaintiff. The reason for that is that if an oral agreement was entered into between the defendant and CS Tse in his personal capacity, then the defendant may have a cause of action against the estate of CS Tse and it cannot be right for me to pre‑empt that scenario in this judgment by making a finding which has no direct relevance to the determination of this case. 191.With that caveat, I will now turn to deciding whether the Oral SP Agreement existed on the basis that CS Tse was acting for or authorized to act for the plaintiff to sell the House. 192.It is the defendant’s evidence that the Oral SP Agreement was made in or about October 2007. 193.I shall first deal with the authority of CS Tse to act as the agent of the plaintiff in October 2007 when the Oral SP Agreement was said to have been made. 194.At the commencement of this trial, the defendant’s case had all along been put on the footing that the defendant believed CS Tse had authority to sell the House and Lot 894F on behalf of the plaintiff due to the fact that the 1st Set of Title Deeds were delivered by CS Tse to the defendant upon payment of the purchase price by the defendant. The implication therefore was that it was the plaintiff who had authorized CS Tse to hand over the 1st Set of Title Deeds to the defendant. 195.That was also the basis of CS Tse’s authority to act as the agent of the plaintiff as stated by the defendant in his 7th affirmation herein dated 19 February 2014. 196.On that basis, the defendant’s case was put squarely on the footing of ostensible authority. 197.This position of the defendant changed drastically when the defendant was cross examined. Under cross examination the defendant stated for the first time that at the time the Oral SP Agreement was entered, he had been shown and given a written power of attorney executed by the plaintiff in favour of CS Tse. This was never the pleaded case of the defendant. 198.Not surprisingly therefore, no such document had ever been put into evidence or produced as evidence at this trial. 199.In the absence of any such power of attorney being produced in evidence, and the fact that such evidence from the defendant only came from his answer in cross examination, but was never part of the defendant’s case prior to cross examination, I do not accept that evidence from the defendant. 200.The evidence from Madam Tse as to the CS Tse’s authority to act as the agent of the plaintiff is also inconsistent with the defendant’s evidence thereto and will be dealt with later in this judgment when I come to deal with Madam Tse’s evidence. 201.As for the case of the defendant based on ostensible authority ie CS Tse giving to the defendant the 1st Set of Title Deeds, the evidence in the case show that the documents making up the 1st Set of Title Deeds were sent by the DLO to the residential address of CS Tse due to the fact that that was the address given to the DLO when applications were made by CS Tse for those documents from the DLO pursuant to the Co‑operation Agreement. 202.Not surprisingly therefore, CS Tse had such documents with him. Even if CS Tse had given the 1st Set of Title Deeds to the defendant in the manner as alleged by the defendant, that act alone cannot constitute a holding out by the plaintiff or show ostensible authority on the part of CS Tse as being the agent authorized by the plaintiff to sell the House since he can be in possession of those documents for a number of different reasons, not necessarily as the agent of the plaintiff only. In this case the evidence showed that CS Tse was in possession of them only because CS Tse’s address was given to the DLO. 203.I accept the evidence of the plaintiff that it was agreed in the Co‑operation Agreement between him and CS Tse that it was only after the Certificate of Compliance was issued by the DLO and the non‑alienation clause had been removed upon payment of the premium to the government, that the plaintiff would be required to execute a power of attorney to empower CS Tse (Lucky Shing after the Substitution Agreement) to sell the House. 204.For the above reasons, I find that CS Tse had no actual authority to enter into any sale and purchase agreement to sell the House on behalf of the plaintiff in October 2007. 205.I further find that the mere possession of the 1st set of Title Deed by CS Tse in or about October 2007 at the time of the Oral SP Agreement was not sufficient to indicate apparent authority on the part of CS Tse to act as the agent of the plaintiff in the sale of the House. 206.Quite apart from the question of CS Tse’s authority to act as agent of the plaintiff, there are other aspects of the defendant’s evidence in respect of the Oral SP Agreement which I need also to deal with as to whether it can amount to a contract between the defendant and the plaintiff. 207.The evidence of the existence of the Oral SP Agreement comes only from the defendant and Madam Tse. 208.It is therefore crucial to determining this issue, to assess not only the credibility but also the reliability of their evidence. 209.The defendant was described by his own counsel as unsophisticated and uneducated. While admittedly he is both that as described by his own counsel, his unreliability goes much further than being just unsophisticated and uneducated. He is also prone to exaggerate, even when he is not attempting to tell an untruth. An example of the kind of exaggeration is his saying in cross examination that he had been having dinner with CS Tse on a regular basis for ‘10 odd years’ from the time he came to know CS Tse in around 2000 when it is common ground that CS Tse died in May 2008. 210.The defendant was also shown up in his cross examination to be a pathetic liar in so far as his Statement of Affairs dated 4 March 2003 affirmed by him in his bankruptcy is concerned. Many of the details given him in his Statement of Affairs such as his address, occupation, his source of income are at direct variance with the same details given by him in this trial. There is also no mention by him in his Statement of Affairs of his business dealings with CS Tse in developing the two houses in Lot 935C and Lot 936C, a matter which he has given evidence on in this trial which relates to the debt of $772,000 said to be owed to him by CS Tse, the setting off of which formed part of the payment of the purchase price in the Oral SP Agreement. 211.When asked for his explanation as to why those details in his Statement of Affairs were at variance with his evidence given in this trial, the defendant attempted to say he knew virtually nothing about his bankruptcy and that it was not he who petitioned for it. The defendant also said that the Statement of Affairs were not filled in by him. On some occasions in cross examination he said that the Statement of Affairs were filled in by social workers, and on another occasion during cross examination said it was filled in at the bank. He also denied that the Statement of Affairs was made out at the office of the Official Receiver despite a clear and express statement to that effect stated on the Statement of Affairs. He simply refused to admit that the details stated on the Statement of Affairs were information provided by him to the Official Receiver. 212.In the light of what is stated on the Statement of Affairs, those answers given by the defendant is just wholly unbelievable and it shows him up to be a person who can lie through his teeth even when confronted with evidence which cannot be disputed. 213.Moreover, the answers given by the defendant during his cross examination were riddled with inconsistencies and self‑contradictions. One blatant example of this was when the defendant was asked about the meeting in September 2010 in the office of Leung Kin & Co where the plaintiff was asked to sign certain documents there. Initially the defendant said that the plaintiff had signed a power of attorney there, then in the next minute said the plaintiff had signed a sale and purchase agreement in favour of Chan Tak Wo and finally ended by saying that the plaintiff did not sign anything at all because Chan Tak Wo had called off the transaction. 214.There were numerous instances of inconsistent answers given by the defendant in cross examination and it would be impossible to list out all those instances in which it happened. 215.As for the evidence of Madam Tse, while she cannot be put in the same category as the defendant when it came to telling untruth, she is also shown up to be an unreliable witness by saying things which are not true when it suits her. 216.One blatant example of that is that in her evidence she said she was present together with CS Tse and the defendant when the Oral SP Agreement was made. When asked in cross examination how was the authorization given by the plaintiff to CS Tse in entering into the Oral SP Agreement with the defendant, her answer was that CS Tse did not need the authority of the plaintiff to enter into the Oral SP Agreement because the House belonged to CS Tse. 217.This answer of hers is firstly diametrically different from what is stated in her witness statement (which she adopted as her evidence in chief) and secondly it is totally contradicted by her own action that when she took over the project of Lot 894F from CS Tse after his death, she did obtain a power of attorney from the plaintiff dated 9 November 2009 in order for her to continue dealing with matters related to Lot 894F. 218.Moreover, this answer of hers goes to the very root of the matter and suggests quite clearly that she knew that CS Tse did not have the authority of the plaintiff if he did enter into the any oral agreement with the defendant for the sale of the House in or about October 2007. 219.Under cross examination, Madam Tse also gave another crucial and significant piece of evidence which wholly differed from what was stated in her witness statement, namely, that there was no term contained in the Oral SP Agreement that completion would only take place after the Certificate of Compliance had been issued and after the non‑alienation clause removed from the Building Licence. 220.This evidence given by her in cross examination contradicted the evidence of the defendant and was no doubt given by her in an attempt to justify the taking of possession by the defendant of the House in March or April 2010, at a time when the premium to the government had not been paid and the non‑alienation clause had not been removed. 221.On the other hand, the defendant when cross‑examined as to the term relating to completion in the Oral SP Agreement, agreed that there was such a term, but sought to say that completion merely meant the transfer of names. In that sense he attempted to justify his taking of possession of the House, the internal alteration to the House, his renting out of the various floors of the House, and even his attempt at selling the House, all of that despite the non‑removal of the non‑alienation clause in the Building Licence. 222.Given this piece of evidence from the defendant, even if there was the Oral SP Agreement, this evidence would show that there was clearly the intention to flout the non‑alienation clause such as would make the Oral SP Agreement illegal and unenforceable since that would be evidence showing that the parties to the Oral SP Agreement intended to perform it in an unlawful manner at the very outset. 223.Another piece of evidence which I need to refer to is the defendant’s evidence that he was owed a debt of $772,000 by CS Tse which debt was set off as being part of the purchase price to be paid by the defendant under the Oral SP Agreement. 224.There is nothing in the evidence to show that this debt had anything to do with the plaintiff. 225.When asked in cross examination about this debt, the defendant was unable to say that CS Tse had to pay this debt to anyone else after it was set off. 226.This therefore is a further indication that if there was any oral agreement made between the defendant and CS Tse for the sale to the defendant of the House with the setting off of the debt as being part of the purchase price to be paid by the defendant, then it was an agreement made between the defendant and CS Tse in the personal capacity of CS Tse, and not as the agent of the plaintiff. 227.Given all the reasons stated above, I find that the Oral SP Agreement in so far as it was alleged that CS Tse was acting as the agent of the plaintiff did not exist. 228.It is not necessary for me in deciding this case and I do not go as far as to find that there was no oral agreement between the defendant and CS Tse made in the personal capacity of CS Tse with the defendant for the sale of the House. That is a finding which would not be relevant to the decision I have to make in this case, but is a finding which may be left to another court in another case should the defendant see fit to bring future proceedings against the estate of CS Tse. 229.From my finding above that the Oral SP Agreement did not exist I make the following futher findings:
DECISION ON LIABILITY 230.Given the findings made above, there will be judgment for the plaintiff as claimed by the plaintiff and dismissal of the defendant’s counterclaim herein. 231.I have come to this decision based on the findings of fact made above. In coming to those findings of fact, I have not relied on any of the extracts of the recorded conversations between the defendant and Cheung Che Shing put into evidence by the plaintiff. The reason for my not relying on those extracts of the recorded conversations is firstly, because those were extracts of conversations there is always the possibility of taking the words out of context and secondly, when those recordings were made by Cheung Che Shing, he, knowing of the recording would have chosen his words carefully, but not so the defendant. In that sense, there was no level playing field. Lastly, it was not necessary for me to have to resort to any of the extracts of recorded conversation in deciding this case. The only findings which I would make in respect of the recorded conversations put into evidence is that I do not believe any of the explanations sought to be given by the defendant in his cross examination on those extracts. MESNE PROFITS 232.Mesne profits in relation to the ground and 1st floors of the House is calculated on the rental charged by the defendant to his former tenant (at $8,000 per month) form 15 June 2010 until the date of recovery of possession thereof by the plaintiff through the bailiff under HCA 2098/2013 on 18 September 2014, being 51 months and totaling $408,000. 233.Mesne profits in relation to the 2nd floor of the House is calculated on the rental charged by the defendant to his former tenant (at $5,000 per month) from 15 June 2010 until date of recovery of possession thereof by the plaintiff through the bailiff under HCA 2097/2013 on 25 August 2014, being 50 months and totaling $250,000. 234.The total amount of mesne profits therefore comes to $658,000. ORDER 235.There will be judgment to the plaintiff for:
236.The counterclaim herein is dismissed in its entirety. COST 237.There will be a cost order nisi that the defendant pays to the plaintiff:
Mr Jose d’Almanda Remedios, instructed by John Ip & Co, for the plaintiff Mr Albert KH Cheung, instructed by KC Ho & Fong, for the defendant |
Further hearings and rulings under HCA 1731/2011