Chan Yau v. Chan Calvin and Another

CACV 202/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 202 OF 2014

(ON APPEAL FROM HCA NO. 666 OF 2007)

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REASONS FOR JUDGMENT
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Hon Cheung JA:

1.I agree with the Reasons for Judgment given by Yuen JA.

Hon Yuen JA:

2.This is the plaintiff’s appeal from the Judgment of G Lam J given on 5 September 2014. At the conclusion of the hearing, we dismissed the appeal with costs to the 1^st defendant (the 2^nd defendant had not appeared). My reasons appear below.

Factual background

3.The facts have been set out thoroughly in the learned judge’s 51-page Judgment. I will only summarize those facts necessary to understand these Reasons for Judgment.

4.The plaintiff, the 1^st defendant and the 2^nd defendant are all indigenous villagers (“IVs”) from Ha Wong Yi Au Village in Tai Po. IVs are entitled to benefit under the Government’s Small House Policy (“SHP”) which was approved by the Executive Council and implemented in late 1972.

The Small House Policy

5.1.The SHP was encapsulated in the Judgment as follows (para.2):

“The Small House Policy is a policy of the Government under which an adult male indigenous villager in the New Territories (being a descendant in the male line from a resident in 1898 of a recognised village) is entitled, once in his lifetime, to build a small house, up to 700 sq. ft in area and 3-storey high, in his village for himself on a piece of land owned by him or assigned to him by the Government at a concessionary rate”.

5.2.I would only add a slight refinement to that formulation. According to the Pamphlet issued by the Government: see the Explanatory Note at para. II(a), and as stated by the plaintiff’s witness MrChristopher Robinson: see his Witness Statement para. 65, the entitlement of an IV is the “permission to apply for a grant under the SHP, not the right to actually obtain a grant” (emphasis added).

5.3.The houses under the SHP are commonly referred to as “ting/ding” houses. It would be noted that the SHP only gives an IV the right to apply to build a house, it does not provide him with the land by way of gift on which to build it. He would therefore have to own land (whether through inheritance or assignment) on which to build the house.

6.To cut a long story short, in the present case there was a series of agreements involving the plaintiff, the 1^st defendant and the 2^nddefendant (the defendants being half-brothers) to utilize the 2^nddefendant’s benefit under the SHP.

Defendants’ original agreement

7.1.It would appear that back in 1992, the defendants had agreed between themselves to build one house on Section E of the Remaining Portion of Lot 660 (called “Lot 660E” in the Judgment) in Demarcation District 32.

7.2.The 1^st defendant was to provide the land (Lot 660E) to the 2^nd defendant by way of assignment, and the 2^nd defendant was to provide his benefit under the SHP to apply to build a house on it.

7.3.As recorded in the Judgment, “it is not in dispute that the 2^nddefendant in reality took the assignment as nominee, holding Lot660E thereafter on trust for the 1^st defendant ...”: see para. 8. However, for some time after the defendants’ agreement, Lot 660E remained undeveloped.

Plaintiff’s participation in three agreements

7.4.Subsequently the plaintiff came onto the scene. He was interested in developing Lot 660E. Between November and December 1997 the parties signed three agreements.

7.5.Under the three agreements, the house when built on Lot660E would be shared between the plaintiff and the 1^st defendant (the plaintiff would own the ground floor, the 1^st defendant the 1^st floor, and both of them would co-own the 2^nd floor). At no stage would the 2^nddefendant have any beneficial interest in the land or house. He would receive only a sum of money from the other parties.

D2’s statutory declaration

7.6.Pursuant to these agreements, on 14 December 1999 the 2^nddefendant made a statutory declaration (“the SD”) at the Tai Po Lands Office for the purpose of applying to build a house under the SHP.

7.7.The SD was made in Chinese. Clause (e) (as per the certified translation) read as follows:

“I am the sole owner of Lot No.660E in Demarcation District 32 on which I wish to erect a small house” (Emphasis added in italics).

The construction of the words “sole owner” will be discussed later in these Reasons for Judgment.

7.8.Clause (h) further stated:

“The above information is true, correct and complete to the best of my knowledge. I understand that if I make false or incomplete declarations, I may render myself disqualified for Small House Grant or liable to prosecution by the Hong Kong Government”.

7.9.There was no statement in the SD signed by the 2^nddefendant that he had not entered into a private arrangement for “selling his rights under the SHP”. This is despite the fact that such a statement was included in standard form SDs provided at district lands offices at the relevant time.

The fourth agreement

8.1.Shortly afterwards however, the plaintiff and the 1^stdefendant made a fourth agreement to divide Lot 660E itself into two portions.

8.2.1.8 The 2^nd defendant, as directed by the 1^st defendant, then executed a deed poll to partition Lot 660E into two portions called “Lot660E 1” and “Lot 660E RP” respectively.

8.2.2.Lot 660E RP is not relevant to these proceedings.

8.2.3.As far as Lot 660E 1 was concerned however, in 2005 the 2^nd defendant surrendered and exchanged it for a larger lot (by merging it with adjoining land for which a premium was paid). This newly created, larger lot was called Lot 745. A house was subsequently built on it.

The action

9.1.In the meantime however, the parties fell out, and the plaintiff was excluded from Lot 745. He issued this action in 2007, claiming damages for breach of contract, alternatively restitution of the money he provided. At trial Mr Chan confirmed that the plaintiff was not asserting a proprietary claim or a trust in the money he paid: see para.102 of the Judgment.

9.2.The 2^nd defendant filed a counterclaim which was later dismissed by order of the judge (save that he vacated the plaintiff’s lispendens). There is no appeal from this order.

9.3.It would appear however that there was also a falling out between the defendants themselves. On the first day of trial, the 1^stdefendant issued proceedings against the 2^nd defendant for a declaration that the latter holds Lot 745 on trust for him. There was no application for that case to be heard at the same time as this action, and given the timing, it would have been unlikely for the judge to have acceded to such an application even if it had been made. Be that as it may, these Reasons for Judgment are not intended to affect whatever dispute there might be between the defendants and are restricted to the issues in the Judgment under appeal.

10.Coming back to the trial of this action, the crux of the factual dispute was formulated by the judge as follows: see para. 23

“ ... whether (as the plaintiff contends) it was agreed that the 1^st to 3^rd agreements were to continue with respect to Lot 660E 1 instead of Lot 660E, so that the house to be erected thereon would remain a joint development between the plaintiff and the 1^st defendant on the terms previously agreed, or (as the 1^st defendant contends) it was agreed that the 1^st to 3^rd agreements came to an end and the 1^st defendant would be solely entitled to the small village house to be built on Lot 660E 1”.

11.1However apart from the factual dispute, the 1^st defendant relied in his defence on the three agreements being “illegal and thus unenforceable”, because the agreements required the 2^nd defendant “to make misrepresentations to the Government that the 2^nd Defendant was the sole owner of Lot 660E”: see para. 2, Amended Defence.

11.2.The 2^nd defendant’s defence was along similar, but not identical, lines.

The Judgment

12.As far as the factual dispute was concerned, the judge found for the plaintiff. His reasons are set out in the Judgment and they are not the subject of any arguments on appeal.

13.As for the illegality defence, the judge discussed this thoroughly in paras.59-92 and 95-98 of the Judgment.

- The SD was false

14.1.In gist the judge held, after considering a number of authorities, that “the critical part of the declaration made by the 2^nddefendant is the statement that he was ‘the sole owner’ of the land in question”: see para. 72. It was common ground that the 2^nd defendant was never, whether solely or in part, a beneficial owner of the land, but the plaintiff argued that the words ‘the sole owner’ should be construed to mean simply the sole registered owner.

14.2.The judge held that “the purpose of construing the declaration is to determine whether it constituted a false declaration and the practice of deceit on the Government”: see para. 74.

14.3.In this exercise the judge considered the following issues: see para. 74

(1) whether it had been shown that the person making the representation (ie the 2^nd defendant) intended it to be, or knew that it would be, understood in its untrue sense; and

(2) how the representee (ie the Government) took the representation, because there would be no fraud if it took the representation in a sense in which it is true.

14.4.1.In relation to issue (1), the 2^nd defendant did not give evidence at trial. The judge held that having regard to all the circumstances, it was likely that the 2^nd defendant was “not concerned” about the meaning of the SD. He was only interested in the money he was going to receive from the agreements, and his purpose in making the SD was to obtain the necessary approval from the Government for the development to proceed. Accordingly the judge held that the “the 2^nddefendant intended the declaration to have the meaning relevant to the Government’s consideration of the application”: see para. 77.

14.4.2.Put another way, whatever type of ownership the Government required an applicant to declare for approval to be granted, that was what the 2^nd defendant intended to declare. As the judge held at that period of time the Government would only approve the application if the applicant was the sole legal and beneficial owner, the 2^nd defendant’s intention when signing the SD was to make a declaration to that effect, even though he had no beneficial interest at all in the land.

14.5.1. In relation to issue (2), the judge considered the statement confirmed in the evidence-in-chief of Mr Robinson, the plaintiff’s witness. Mr Robinson was, prior to his retirement from the Government in 2001, Assistant Director of Lands (Legal) in the Legal Advisory and Conveyancing Office of the Lands Office.

14.5.2.The judge summarized and discussed the relevant parts of Mr Robinson’s statement at paras. 82-86 of the Judgment and I will not repeat them here.

14.5.3.According to Mr Robinson, the Government required an SD only to ensure that it could enforce the terms of the building licence, and for that reason the phrase ‘sole owner’ meant only the registered owner. The judge held that Mr Robinson’s statement to that effect was based on a process of reasoning and deduction rather than on any actual knowledge: see para. 85.

14.5.4.However what was more significant was the Government’s changes in policy from time to time as disclosed by Mr Robinson.

14.5.5.For present purposes, the most crucial evidence concerned the Government’s policy at the time the agreements and SD in the present case were made, ie between November 1997 and December 1999. The judge’s discussion on this issue is as follows, see para. 86:

“Secondly, as Mr Robinson himself testified, a policy change occurred in around October 1997. The Government became concerned about speculation and wanted to ensure that the indigenous villager applicant remained the legal and beneficial owner of the land at least up to the time of his declaration. It seems to me that, on this basis, what Mr Robinson stated to be Government’s understanding of the meaning of the phrase ‘sole owner’ prior to 1997 has no application on the facts of this case. Here the 1^st agreement was entered into in November 1997, the 3^rd agreement which involved the 2^nd defendant as the indigenous villager was entered into in December 1997, and the statutory declaration was made by the 2^nd defendant in December 1999. Rather, the relevant officials in the Government would be looking at the 2^nd defendant’s application and statutory declaration with the then current policy in mind, which placed importance on the indigenous villager being the beneficial owner. I think it is more likely than not that the Government understood the 2^nd defendant’s declaration to mean that he was the unqualified sole owner of the land in question, ie both the legal and beneficial sole owner”. (Emphasis added).

14.5.6.In other words, at the material times, the Government would approve applications only if the applicant was the sole legal and beneficial owner.

14.5.7.The judge found this conclusion was fortified by Special Condition 6 of the Conditions of Exchange for Lot 745 which stipulated:

“(a) ... the Grantee ... shall not assign ... or otherwise dispose of the lot or any part thereof or any interest therein or enter into any agreement so to do, whether directly or indirectly ... unless:

(i) a period of five years has elapsed from the date of a letter issued by the District Lands Officer confirming that these Conditions have been complied with to his satisfaction; or

(ii) the Grantee has paid to the Government the additional premium in accordance with sub-clause (d)(ii) of this Special Condition”.

(Emphasis added).

14.5.8.The judge affirmed the conclusion in Best Sheen Development Ltd v Official Receiver [2001] 1 HKLRD 866 that these restrictions “would have no meaning or effect if the licensee needed only to be the legal owner of the land, and beneficial ownership could be divested and freely transferred to anyone at any time”: see para. 88.

- The parties knew of the falsehood

15.The judge further found that the plaintiff and the 1^stdefendant knew that the 2^nd defendant would be making the false declaration to the Government that he was the sole owner of the land, even though he was a mere nominee: see paras. 90-92.

- Not just “jumping the gun”

16.1.The judge further rejected the plaintiff’s submission that he was just “jumping the gun”, the term used by this court (Chan CJHC, Liu JA and Wong J) in Li Pui Wan v Wong Mei Yin [1997] 1 HKLRD 1141 to describe the situation where an IV prematurely disposes of a ting house before Government consent was obtained.

16.2.The judge noted that in the present case, as in Best Sheen,

“the land in question was never the 2^nd defendant’s to deal with. It was assigned to him as nominee, for no consideration, for the sole purpose of making an application in his name for permission to build a house pursuant to the SHP. The 2^nd defendant was to have no interest in the land or the house to be built on it”: see para. 97.

- Certificate of compliance did not affect the situation

17.1.The judge also held that the fact that the Government issued a certificate of compliance in 2010 did not affect his analysis. It was not disputed that the agreements had been terminated in 2006/7 and all that the plaintiff was claiming was damages against the defendants personally.

17.2.Further, the correspondence or steps taken leading to the certificate of compliance were not in evidence, so it was not known on what factual basis the certificate was issued: see para. 98.

- The restitution claim

18.1.The judge dealt with the restitution claim in paras.100-104. He referred to the principle that “a defendant who receives benefits under an illegal contract can plead the illegality of the contract as a defence to a claim in unjust enrichment, provided that the parties were in pari delicto, ie provided that they were equally to blame for engaging in the transaction”: see para. 103.

18.2.The judge held that the plaintiff participated in the development scheme with knowledge of the circumstances giving rise to the illegality. After considering the extent of the plaintiff’s participation, the judge held that he was at least equally to blame: para. 104.

18.3.Accordingly, the judge dismissed the plaintiff’s claim. As mentioned earlier, he also dismissed the 2^nd defendant’s counterclaim, save that he ordered the lis pendens registered by the plaintiff against Lot 745 should be vacated.

19.On 3 December 2014, after considering written submissions, the judge ordered that each party should bear his own costs.

Appeal

20.The plaintiff appealed. I shall deal with his grounds of appeal in the order in which they were addressed in the written submissions of his counsel Mr Kenneth CL Chan (who appeared with MrBilly NP Ma).

Discussion

- Implication from the certificate of compliance?

21.1.First, Mr Chan said the judge had “failed to give the proper legal and factual implications” to the Government’s issue of the certificate of compliance.

21.2.Mr Chan referred to a letter dated 25 November 2008 from the District Lands Office (“DLO”) Taipo to the 2^nd defendant, in which the DLO referred to its receipt of a complaint that Lot 745 was subject to legal proceedings. The DLO said it was “now seeking legal advice to determine whether the abovementioned case contravened the provisions in item 6 of the Special Conditions” (set out in para. 14.5.7 above).

21.3.In a subsequent letter to the 2^nd defendant dated 16December 2008, the DLO asked to be notified “about the latest development of the High Court Action in HCA No.666 of 2007, such as the trial dates and the judgment (if any) for our consideration in dealing with the captioned application [for a certificate of compliance]”.

21.4.Mr Chan submitted that since these letters indicated that the Government was aware of this action, the issue of the certificate of compliance showed “the Government’s tolerance” and that the “alleged complaint(s) of illegality was not serious so as to cause the Government to have taken any enforcement action”.

22.1.In my view, it should first be noted that the certificate of compliance was issued in 2010 – before the Judgment was delivered.

22.2.Second, as far as the DLO was concerned, apparently the 2^nddefendant has been claiming that the land is his both legally and beneficially (presumably that was what caused the 1^st defendant to issue an action against him).

22.3.Third and more importantly, the certificate of compliance expressly stated as follows:

“This certification is given without prejudice to all or any rights of the Government whether under the said Conditions or otherwise in respect of any breach or failure to observe any of the said Conditions which may exist on the date hereof or which may hereafter occur”. (Emphasis added).

22.4.It is clear from the “without prejudice” reservation of rights that the Government has not waived any rights by the issue of the certificate of compliance.

23.In his oral submissions Mr Chan said only that the reservation of rights was a general clause, or standard form. There was no evidence of that, but even if that were the case, that is no justification for saying it can be ignored.

24.1.Mr Chan also referred to the discussion in Li Pui Wan of the issue of a certificate of compliance in that case. However it is not known whether there was a similar “without prejudice” reservation of rights in the certificate of compliance in that case.

24.2.Moreover the effect of the issue of the certificate of compliance must be considered in light of the facts of that case.

- First, the land was granted to the IV by the Government under a new grant and there was no finding that he was never the legal and beneficial owner of the land.

- Further, the court in its judgment (see: p.90F-J) specifically referred to the parties’ agreement that before completion, application must be made to the government for assignment and the premium would be paid by the purchaser. The certificate of compliance was issued along with a demand for premium for the assignment. It is not surprising therefore that the court held in those circumstances that “obviously, the position of the government was to approve the application and allow the sale and purchase and assignment as long as the applicant was willing to pay a premium” (see: p.90J - 91A).

24.3.Those facts are very different from the facts of our case (where the certificate of compliance did not contain a demand for a premium for assignment), and it seems to me that Mr Chan can derive no assistance from Li Pui Wan for his submission on the certificate of compliance.

- Just “jumping the gun”?

25.Mr Chan’s next submission was that the judge erred in not appreciating that the present case was a “jumping the gun” situation as in Li Pui Wan, because under the terms of the grant in respect of Lot 660E, the 2^nd defendant could have disposed of the house after completion upon payment of additional premium.

26.1.That argument ignores the fact that the 2^nd defendant was never the beneficial owner of Lot 660E, and applying an objective and purposive construction, the words “sole owner” in the SD for the application mean “sole legal and beneficial owner”.

26.2.As discussed earlier, this was also the Government’s intended construction at the material times. This is supported by MrRobinson’s witness statement at para. 66, where he said that during the material times (ie when the agreements and the 2^nd defendant’s SD were made),

“by delaying the statutory declaration until his interview, an IV would, according to Government, have to remain the legal and beneficial owner at least until his declaration, thereby making it more difficult for a developer to speculate, as by the time of the interview, the Building Licence would normally have been drafted, containing all the usual clauses, including the restrictions against alienation”. (Emphasis added).

26.3.The judge was well aware of the “jumping the gun” argument and dealt with it in paras. 96-97. He referred first to the following passage from Best Sheen which distinguished Li Pui Wan as follows:

“The present case is different. It is not a case of merely premature disposition of an interest in property which did belong to an indigenous villager and who was thus entitled to concessionary terms to build a house on the property. The Land in the present case was never Lai’s to own, and the Plaintiff as the true owner would not have been entitled to the concessionary terms in the Building Licence, which were clearly rights of some value”.

26.4.As mentioned earlier, the judge then said:

“the land in question was never the 2^nd defendant’s to deal with. It was assigned to him as nominee, for no consideration, for the sole purpose of making an application in his name for permission to build a house pursuant to the SHP. The 2^nd defendant was to have no interest in the land or the house to be built on it”: see para. 97.

26.5.In my view the judge was right to hold that this was not a “jumping the gun” situation. Put another way, the 2^nd defendant was not a sole legal and beneficial owner of land (the only person who could properly apply for the benefit under the SHP at that time) who had only entered into a contract prematurely to sell the house upon its completion.

- Proportionality test?

27.Mr Chan then submitted that the judge erred in not applying the “proportionality test” set out in ParkingEye Ltd v Somerfield Stores Ltd [2013] 2 WLR 939, one in a series of considerations listed in Ryder Industries Ltd v Timely Electronics Co Ltd HCA2358/2007, 11/7/2013, unrep at para.35 which list was affirmed by this court (Lam VP, BarmaJA and Poon J) on appeal: see CACV164/2013, 22/9/2014, unrep at para.21.

28.1.In the English case, Somerfield had supermarkets with attached car parks. It wished to restrict the time for which customers could leave their cars in the car parks. ParkingEye was a company providing an automated system for monitoring the movement of cars.

28.2.There was a contract between Somerfield and ParkingEye for the latter to supply the system for the supermarket car parks. One of the terms of the agreement was that Somerfield would charge customers who kept their cars in the car parks after the free time allowed by the supermarkets, but ParkingEye would be entitled to those fees. Therefore it was ParkingEye which chased up defaulting customers by sending a series of letters approved by Somerfield.

28.3.After the system operated for some time, there was a dispute between Somerfield and ParkingEye. The judge found that Somerfield was in repudiatory breach. Somerfield had alleged in defence that the contract was tainted by illegality, because the 3^rd letter in the series of letters sent by ParkingEye’s collection agents to customers contained falsehoods. Somerfield argued that ParkingEye could not enforce the contract as it (ParkingEye) had concluded it with the intention of performing it in an unlawful manner.

28.4.The judge held the contract between Somerfield and ParkingEye was not illegal. The judgment was upheld by the court of appeal.

28.5.Sir Robin Jacob emphasized that “the contract ... was not all-or-nothing, legal or illegal, as regards either its performance or its intended performance”: see para. 35. The contract was to be continuously performed over time, and its performance was never intended to be carried out in a wholly illegal manner. If the motorists paid the charges after the 1^st or 2^nd letters (as most did), they would never receive the 3^rd letter at all.

28.6.ParkingEye did not need to plead or rely on any illegality. Moreover, “illegal performance was not an object of the contract nor by any means necessary for its performance”: see para. 36.

28.7.As for Somerfield’s argument that ParkingEye had intended at the outset to send the 3^rd letter if the motorists failed to pay after the first two letters and thus there was an intention at the outset of the contract to use illegal means, Sir Robin said “such a conclusion would be unduly sanctimonious: it would lead to the disproportionate result that Somerfield’s wrongful repudiation of the contract left ParkingEye with no remedy for a lost income which would have been wholly lawful”: para.38. He held that “proportionality ... involves the assessment of how far refusal of the remedy furthers one or more of the specific policies underlying the defence of illegality”. Those policies were identified as “furthering the purpose of the rule which the illegal conduct has infringed; consistency; the claimant should not profit from his or her own wrong; deterrence; and maintaining the integrity of the legal system”: para. 39.

29.At trial Mr Chan founded his “proportionality” argument on “... P’s testimony that he did not know and did not thank [think] the 1^st to 3^rd Agreement would be ‘illegal’ or would involve any illegal act to be done (whether making false declaration by D2 to the Government, etc whatsoever)”: see Closing Submissions for the plaintiff para. 94.

30.1.The judge was clearly alive to this issue: see Transcript p.195H. He found the plaintiff knew about the requirement under the SHP for the IV applicant to declare to the Government that he was the sole owner of the land. He found the following facts:

“I am satisfied that this was known to the plaintiff and the 1^st defendant, both of whom appeared to me to be reasonably familiar with the procedures for small house development, despite their protestations to the contrary. In particular, the plaintiff had, at least since 1988, carried on the business of property development and real estate agency in the New Territories through a company called Sweet Home Properties, which operated several branches in Tai Po. He was an experienced person to whom his fellow villagers would turn for assistance when they wished to develop village houses” (para. 90);

“The parties all knew that although the application would be made in the name of the 2^nd defendant as the sole owner of the land in question, he was not in fact the sole owner but a mere nominee” (para. 91);

“It follows that the agreements in question would, to the knowledge of the parties, necessarily involve the 2^nd defendant making a false declaration to the Government without an honest belief in its truth” (para. 92).

30.2.These are the trial judge’s findings of fact against which there is no appeal. I see no other circumstances that would assist the plaintiff. I have dealt with the arguments based on the issue of the certificate of compliance in para. 22 above. Unlike the ParkingEye case, the agreements to build a house on Lot 660E by application under the SHP, on the pretext that it was the 2^nd defendant’s beneficially-owned land when it was not, were not capable of legal performance to any extent at all.

- Defendants’ burden of proof

31.Mr Chan next submitted that the defendants had failed to prove illegality because the 2^nd defendant did not give evidence at trial to say that he knew he was signing a false SD.

32.1.The judge dealt with this in paras.76-77 of his Judgment. He noted that the plaintiff and the 1^st defendant had claimed privilege against self-incrimination in the course of their testimony. Had the 2^nd defendant given testimony, he would have been entitled to do that as well. But the judge was entitled to look at all the surrounding circumstances from which to infer that the 2^nd defendant knew or was reckless as to the contents of the SD.

32.2.The judge found the 2^nd defendant’s intention when signing the SD was to make whatever declaration would lead to the Government’s approval of the application. The 2^nd defendant therefore signed the SD saying he was the “sole owner” (properly construed to mean the sole legal and beneficial owner) even though it was common ground that he had no beneficial interest at all in the land and he must have known that. Mr Chan has not referred us to any materials to show that the inference drawn was incorrect.

- Mr Robinson’s evidence

33.1.Finally Mr Chan submitted that the judge was wrong to have rejected Mr Robinson’s evidence. The Notice of Appeal did not particularize what were the pieces of that evidence material to this appeal that the plaintiff says the judge should have accepted. However in MrChan’s written submission he placed emphasis on the form of the declaration and what, according to Mr Robinson, the words “sole owner” meant.

33.2At para. 53 of Mr Robinson’s witness statement, he said “sole owner did not mean, insofar as the Government was concerned, the legal and beneficial owner. It meant the only person registered in the Land Registry as the owner of the land”. He then said at para. 89:

“In clause (e) of the declaration, the 2^nd defendant declared that he was the ‘sole owner’ of Lot 660E which is identical to clause (d)(i) of the official form of declaration in October 1997 suggests (sic) that what is intended is for the declarant to state that he is the sole registered owner of the lot on which he wishes to erect a Small House”.

34.1.The judge dealt with this at paras. 85-87 of the Judgment. The more important point, it seems to me, is that even on Mr Robinson’s own account, the Government had a change of policy in October 1997 and wanted to ensure that the IV applicant remained the legal and beneficial owner of the land at least up to the time of his declaration: see para.66 of his witness statement and para. 86 of the Judgment. According to Mr Robinson, this policy was in place until October 2001. Accordingly the agreements and the SD in the present case (made between November 1997 and December 1999) fell within the period of time when the Government’s intention was that the applicant must be the sole legal and beneficial owner of the land, and not just the sole registered owner. The judge’s rejection of Mr Robinson’s view of what “sole owner” meant in the SD in the present case is clearly right.

34.2.Indeed this is clear when one compares the pro forma declaration forms dated 06.06.2001 (D2/263) and 19.10.2001 (D2/265) provided by the DLO. In the former (at a time when the Government required the applicant to be the legal and beneficial owner), the applicant must declare that he is the “sole owner”. In the latter (after the Government’s change of policy in October 2001), the applicant only needed to declare that he is “the sole legal registered owner”.

35.Finally I would record that Mr Chan did not make any submissions at all, whether at trial or on appeal, on any part(s) of MrDavid Wong’s witness statement even though it was included as a separate ground of appeal.

Order

36.For the reasons above, I dismissed the appeal with an order that the appellant (the plaintiff) should pay the costs of the respondent (1^stdefendant).

Hon Macrae JA:

37.I agree with the Reasons for Judgment of Yuen JA.

Mr Kenneth C.L. Chan and MrBilly N.P.Ma, instructed by K.M. Lai & Li, for the plaintiff

Mr Tony Ko, instructed by Kent Tam & Co., for the 1^st defendant

The 2^nddefendant, acting in person, absent