LI YUK YING v. WONG YUET KAM AND ANOTHER

HCA 1248/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1248 OF 2010

-----------------------

BETWEEN

-----------------------

----------------------

J U D G M E N T

----------------------

Introduction

1.  In this action, the plaintiff seeks a declaration that the 1^st defendant held the property at the 3^rd floor of 15 Sai Yuen Lane, Hong Kong (“the Property”) on trust for herself and the 3^rd defendant. As the property was sold by the 1^st defendant to Grace Sky Creation Ltd, the plaintiff also seeks damages and other remedies.

2.  The plaintiff and the 3^rd defendant were formerly married to each other in 1996.  The 1^st and 2^nd defendants were respectively the mother and father of the 3^rd defendant and the mother‑in‑law and father‑in‑law of the plaintiff.  After the marriage, the plaintiff and the 3^rd defendant lived in rented accommodation in Tokwawan.  The plaintiff gave birth to two daughters in 1996 and 1997.  In 2000, they moved to rented accommodation in Western District.

3.  On 16 July 2002, the 1^st and 2^nd defendants purchased the Property which was immediately above the floor where they were then living and had it registered in the sole name of the 1^st defendant.  Then the plaintiff and the 3^rd defendant renovated and moved into the Property.  Some months later, the 2^nd defendant gave the title deeds of the Property to the plaintiff.

4.  The plaintiff suffered two miscarriages in 2003 and 2007.  The relationship between the plaintiff and the 3^rd defendant deteriorated.  On 3 January 2009, the 3^rd defendant filed a petition for divorce and the marriage was dissolved on 9 June 2009.  But they continued to live in the Property.

5.  In August and November 2009, the 1^st defendant’s solicitors wrote to the plaintiff asserting that the 1^st defendant was the owner of the Property and demanded her and her daughters to vacate the Property and to pay market rent.

6.  In April 2010, the 1^st and 3^rd defendant and two other persons attended the Property to demand the plaintiff to surrender the title deeds of the Property.  An argument developed between the 3^rd defendant and the plaintiff. Believing that the plaintiff withheld the title deeds, the 3^rd defendant called for the police.   After mediation by the police officers, the parties agreed to treat the case as a reported case of loss of property.

7.  On 5 May 2010, the 1^st defendant entered into a provisional agreement to sell the Property to Grace Sky Creation Limited for redevelopment.  In that agreement, Grace Sky Creation Limited acknowledged notice of the plaintiff’s interests and rights in the Property.

8.  On 3 August 2010, the 3^rd defendant informed the plaintiff that the Property had been sold and demanded her and their daughters to move out of the Property.  On 16 August 2010, the plaintiff commenced the present action against all three defendants.  But the action was wholly discontinued against the 2^nd defendant on 20 September 2010.

The parties’ case

9.  The plaintiff’s claim is premised on proprietary estoppel and constructive trust.  In his closing submission, Mr Chow, counsel for the plaintiff, abandoned his argument on constructive trust.  The plaintiff’s case is that the 1^st and 2^nd defendants had repeatedly assured her that she would be given one‑half of the interest in the Property and that her as well as her daughters’ livelihood would be secured by the 1^st and 2^nd defendants; that she acted upon the assurance and suffered detriments, including contributing towards the renovation and furnishing of the Property, taking care of the 1^st and 2^nd defendants on full time basis beyond the normal scope of duties of a daughter‑in‑law, forgoing the pursuit of her employment opportunities, allowing herself to become pregnant, suffering two miscarriages, and giving up the opportunity of purchasing her own property.

10.  The 1^st and 3^rd defendants’ defence is basically one of denial.  In particular, the 1^st defendant alleged that the plaintiff and her daughters resided in the Property as bare licensees.

The applicable legal principles on proprietary estoppel

11.  Counsel for the parties have no dispute about the applicable legal principles on proprietary estoppel. The leading cases are Cobbe v Yeoman’s Row Management Ltd & Anor [2008] 1 WLR 1752 and Thorner v Major & Ors [2009] 1 WLR 776.  The principles are very well settled and can be found in any standard text book.  The judgment of Deputy High Court Judge Au‑Yeung, as she then was, in Chan Gordon v Lee Wai Hing [2011] 2 HKLRD 506 provided a convenient summary.  She said at paragraph 28:

“The essential elements of proprietary estoppel are well known.  The owner of land induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the owner’s property [“representation”].  In reliance upon this belief, the claimant acts to his detriment to the knowledge of the owner [“reliance”].  The owner then seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive [“detriment”].  See The Law of Real Property, 7^th ed, 2008 Megarry & Wade at pp 698‑699 and Thorner v  Major [2009] 1 WLR 776, per Lord Scott of Foscote.”

12.  Counsel are in dispute whether the act of the plaintiff in allowing herself to become pregnant can constitute detriment in the context of proprietary estoppel.  Mr Poon, counsel for the 1^st defendant, refers to Coombes v Smith [1986] 1 WLR 808 at 820C and argues that it cannot.  In that case, the plaintiff and defendant were both married to other partners when they became lovers.  The defendant told the plaintiff that he wished them to live together and discussed about having a child.  The defendant bought a house.  When the plaintiff became pregnant by the defendant, she left her own husband, gave up her job and moved into the house.   The defendant did not move in but visited her regularly, gave her an allowance for herself and the child and paid all bills and mortgage instalments.  After ten years, that relationship came to an end.  The plaintiff commenced affiliation proceedings against the defendant.  Her claim for the house based on proprietary estoppel was dismissed by Deputy High Court Judge Parker QC.  The learned judge rejected the plaintiff’s argument that her act of allowing herself to become pregnant constituted detriment in the context of the doctrine of proprietary estoppel.

13.  The question whether there was representation or assurance, reliance and detriment in the context of the doctrine of proprietary estoppel are questions of fact.  The conclusion reached by the learned judge in Coombes v Smith is one which is restricted to its facts.  I do not think that decision is an authority for the proposition that allowing oneself to become pregnant can never constitute detriment in the context of the doctrine of proprietary estoppel.  That issue has to be determined on the facts of the particular case.  The authorities show that detriment is not a narrow or technical concept.  It need not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial (see Gillett v Holt [2001] Ch 210, per Robert Walker LJ at 232D).  Very often, the quality of the relevant representation may influence the issue of reliance, and reliance and detriment are often intertwined. The fundamental principle behind the doctrine of proprietary estoppel is that equity is concerned to prevent unconscionable conduct permeating all three elements of the doctrine.  The requirement of detriment must therefore be approached as part of a broad inquiry as to whether in all the circumstances it is unconscionable to allow a party to repudiate his representation upon which the other party have acted.  I shall adopt the above approach in determining whether the plaintiff suffered any detriment as result of her reliance on the representation of the 1^st and 2^nd defendants.

The issues

14.  The disputes in this case are all factual.  The issues are:

(1)   whether and what representation or assurance was made by the 1^st and 2^nd defendants to the plaintiff;

(2)   whether the plaintiff acted on the assurance; and

(3)   whether the plaintiff suffered any detriment as a result.

As the plaintiff has abandoned her claim based on constructive trust, it would not be necessary to consider what was the common intention of the plaintiff, the 1^st and 2^nd defendants when the Property was purchased and put under the name of the 1^st defendant.

The witnesses and their credibility

15.  The disputes in this case are all factual.  The outcome depends on my finding of credibility of the witnesses.  The plaintiff, the 1^st and 3^rd defendants gave evidence.  I bear in mind that the test of credibility is inherent probability.

16.  The plaintiff is a middle aged woman.  She appeared to be a more refined, clever and educated person than both the 1^st and 3^rd defendant.  Prior to her marriage, she had gainful employment with good prospect of promotion.  She assisted the 2^nd defendant in his employees’ compensation claim.  She was able to work on the computer and prepared the separation agreement.  While her attributes did not  give her any advantage over the 1^st and 3^rd defendants in my assessment of their credibility, I do find her more credible.  Her evidence accords with common sense, the life of the working class and the usual expectation of parents‑in‑law.  Apart from her denial in her witness statement that she had not been given the title deeds of the Property, her evidence is mostly consistent and inherently credible.  She gave evidence in a cogent manner and was not shaken in cross‑examination.  I accept most of her evidence.

17.  The 1^st defendant is an aged woman in her seventies.  She appeared to have reasonably good memory. Her evidence is mostly made up of bald assertions.  When she was asked for more details, she said she could not recall and shifted the burden of answering the question to another, for example, the 2^nd defendant who was not called.  Her evidence was inconsistent with her witness statement in a number of material respects.  Contrary to what she said in her witness statement, she denied in evidence that she wanted to help the 3^rd defendant to acquire a property.  She said in evidence that the 2^nd defendant also went to the solicitors’ office on the first occasion, whereas according to her witness statement only the plaintiff, the 3^rd defendant and herself went.  Even after allowing for the usual complexities associated with an aged witness, I do not think she was honest and telling the truth.  On the contrary, I think she was deliberately withholding the truth.  I do not accept her evidence.

18.  The 3^rd defendant is aged 51.  He is not a refined but rather impulsive person.  He was evasive under cross‑examination.  His cross‑examination of the plaintiff was often met by full and detailed answers and he ended up speechless.  He adopted the evidence of the 1^st defendant that the 2^nd defendant also attended the solicitors’ office    to toe‑in with her evidence.  His evidence is evasive and inherently incredible.  I do not accept his evidence.

19.  The 2^nd defendant had given a witness statement.  Contrary to an earlier indication by Mr Poon, he was not called to give evidence.  Mr Chow asks me to draw adverse inference against the defendants for failing to call a material witness.  Though the 2^nd defendant mainly adopted what was said by the 1^st defendant in her witness statement, he was not called to dispute the plaintiff’s evidence that he told her to attend the solicitors’ office.  He was not called to testify what the 1^st and 3^rd defendants alleged to have been said by him at the solicitors’ office.  He is the husband of the 1^st defendant.  He contributed substantially to the purchase price of the Property.  He should be indirectly interested in the outcome of this litigation.  It is most exceptional that he would forgo the opportunity to dispute the plaintiff’s evidence or that the 1^st defendant would allow him to do so.  No explanation was given for not calling him to testify.  In respect of the above evidence, I consider it appropriate to draw adverse inference against the 1^st and 3^rd defendants’ credibility for their failure to call the 2^nd defendant.

The factual background

20.  Prior to the marriage, the plaintiff was a garment worker in a fashion design company in Tokwawan.  Because of the nature of her work, she had to work regular overtime.  She was introduced to the 3^rd defendant through a match maker in 1995. At the time, the 3^rd defendant was a worker in a shark’s fin factory.  A few months later, he became unemployed.  He did not wish to look for new employment until after the marriage.  Thus the plaintiff married the 3^rd defendant in 1996 so that he could settle down and look for employment.  After the marriage, they moved to a rented room in Tokwawan to be near to the plaintiff’s place of work.  Subsequently, the 3^rd defendant took up employment as a casual worker.  The plaintiff gave birth to two daughters in 1996 and 1997.  Her parents helped to look after the daughters while the plaintiff and 3^rd defendant went to work.  The above factual background is not in dispute.

21.  The further factual background set out below is largely based on the evidence of the plaintiff, which is not seriously disputed by the defendants or which I accept.  It only sets out the background leading to the issues in dispute and has no bearing on the issues which I have to determine.  The conclusion I reach in this case is not based on any of my finding on the factual background.  Even if I were not to accept the evidence of the plaintiff’s evidence relating to the background, my judgment in this case would still be the same.

22.  In 1998 the plaintiff was offered promotion to be the supervisor of her section on condition that she would work overtime and irregular hours.  She asked the 3^rd defendant to return home early after work to look after their daughters, but the 3^rd defendant refused.  Then upon the defendants’ behest, she quit her job to look after the daughters.  In 1999, the 3^rd defendant started his business as a decoration contractor.  The plaintiff contributed $50,000 from her saving as working capital for the business and gave her mobile phone to the 3^rd defendant to facilitate his work.  She also assisted in the business.  As the decoration works were mostly to be executed in Western District, the couple moved to a rented room in Western District in 2000.

The plaintiff’s case about the purchase of the Property

23.  Since 1999, the 1^st defendant had always wanted the plaintiff to move to the Western District so that she could look after the 1^st and 2^nd defendants. During a discussion with the 1^st and 2^nd defendant in their home, the 1^st and 2^nd defendants indicated that they had a few million dollars saving and wished to buy a property as a residence for the plaintiff and the 3^rd defendant so that they could live closer the plaintiff and her family.  The 1^st and 2^nd defendants took the initiative to engage a property agent to look for a property for the plaintiff and 3^rd defendant. Subsequently, the plaintiff and the 3^rd defendant identified a property in Ko Shing Street introduced by that estate agent.  However, the purchase did not materialise as the defendants were unable agree the purchase price with the vendor.  The alleged conversation is disputed by the defendants.  However, even on the 1^st and 3^rd defendants’ case, the conversation is consistent with 1^st and 2^nd defendants’ subsequent conduct in offering to finance the purchase of the Property by the 3^rd defendant.

24.  The plaintiff further alleged that in mid 1999, the 1^st and 2^nd defendants repeatedly urged her to have another child, hopefully a son, as the 3^rd defendant was, as the Chinese saying goes, the only male descendant of the family for nine generations (九代單傳).  The plaintiff declined because the 3^rd defendant was not making much money and could not financially afford to have one more child.  In fact, the plaintiff had been taking contraceptives to prevent pregnancy.  That alleged conversation is disputed by the 1^st and 3^rd defendants. Mr Poon argues that it is factually incorrect that the 3^rd defendant is the only male descendant of the family for nine generations because the 2^nd defendant had other male siblings.  I think Mr Poon is being semantic.  That expression is not to be taken literarily and is widely used nowadays to emphasise or describe in an exaggerating way the fact that a person is the only son of a family.  The evidence is consistent with the general tenor of the evidence and with the usual expectation of parents.

25.  Between 1996 and 2009, the 1^st and 2^nd defendant had repeatedly assured the plaintiff that upon their death, their money would be passed to her and not the 3^rd defendant because he was too indulged in gambling.  They also told her not to worry about her and her daughters’ livelihood as they would take care of the plaintiff’s financial needs.

26.  In mid 2002, many property owners in Sai Yuen Lane where the 1^st and 2^nd defendants lived received orders issued by the Building Authority requiring them to demolish illegal structures in their buildings.  The 2^nd defendant came to know that the owners of the Property which was immediately above the 1^st and 2^nd defendants’ wished to sell in order to avoid the trouble of having to comply with the order.

27.  According to the plaintiff, the 2^nd defendant told her and the 3^rd defendant to negotiate with those owners for the purchase of the Property.  The 3^rd defendant did as he was told and reached a verbal understanding with the owners to purchase the Property for $360,000.  He reported that to the 2^nd defendant. Then, the 2^nd defendant summonsed the plaintiff and the 3^rd defendant to his home for a meeting.  There, the 1^st and 2^nd defendants told the plaintiff that they had their own property, and if the plaintiff and the 3^rd defendant so wish, they would purchase the Property as a gift to them.  They also told the plaintiff that though the work attitude of the 3^rd defendant had improved, he was still indulged in gambling; hence the Property was mainly bought as a gift to the plaintiff and the two daughters to give them some protection.  The plaintiff understood that the Property would be held in her and the 3^rd defendant’s joint names so that she would only have a half share in the interest in the Property.

28.  On 8 July 2002, the 2^nd defendant telephoned her and told her to go to the solicitors’ office with the 1^st and 3^rd defendant on the following day to sign the sale and purchase agreement. On the following day, the three of them went to solicitors’ office as was instructed.  The 2^nd defendant did not go.  There, the 1^st defendant introduced the then owners of the Property, ie the vendors, to the plaintiff. The staff of the solicitors’ office asked the three of them to produce their identity cards for making photocopies.  He then explained the content of some documents to them and asked them to sign.  After signing, the plaintiff left to pick up her daughters from school.  The 1^st and 3^rd defendants stayed behind to complete the other formalities.  The plaintiff did not go to the solicitors’ office again. However, neither the signature of the plaintiff nor that of the 3^rd defendant appeared on the sale and purchase agreement or assignment of the Property.

29.  After a couple of months, the 3^rd defendant took the title deeds home and told the plaintiff that the title deeds would be kept in the home of 1^st and 2^nd defendants.  At that time, the couple had not yet moved into the Property.  The 3^rd defendant took some five to six months to renovate the Property as he had contracted other decoration works to execute.  The plaintiff had to ask her brother to assist in the renovation work.  Two or three months after they moved in, the 2^nd defendant gave her the title deeds.  In April 2010, the title deeds were found lost.

The 1^st and 3^rd defendants’ case about the purchase of the Property

30.  According to the 1^st and 3^rd defendants, upon learning that the owners of the Property wanted to sell, the 2^nd defendant decided to buy.  He told the 3^rd defendant in the presence of the 1^st defendant that he had decided to purchase the Property; but if the 3^rd defendant would contribute to the purchase price, the 3^rd defendant could live in the Property otherwise he would lease it out.  In order to assist the 3^rd defendant to purchase the Property, the 1^st defendant made a secret agreement with the 3^rd defendant.  She suggested to give $160,000 to the 3^rd defendant to purchase the Property and told him to represent to the 2^nd defendant that it was his money and to ask the 2^nd defendant to make up for the balance of $200,000.  The 3^rd defendant agreed and did what he was told. The 2^nd defendant agreed to contribute $200,000 towards the purchase of the Property.  The 3^rd defendant duly informed the plaintiff of this secret arrangement and told her not to disclose it to the 2^nd defendant.

31.  On 9 July 2002, the 1^st to 3^rd defendants and the plaintiff went to the solicitors’ office to give instructions for the sale and purchase of the Property.  At the request of the 3^rd defendant, the plaintiff went only for the purpose of accompanying the 1^st defendant.  The 1^st defendant gave two different accounts of what happened at the solicitors’ office.  In her witness statement, she said that when the solicitors’ staff asked for the identity cards of the purchasers of the Property, the 3^rd defendant told the plaintiff to give her identity card to the staff for making photocopy.  The 3^rd defendant also asked the staff whether they could change the names of the purchasers later.  The staff replied that they could do so before the execution of the assignment.  Then the plaintiff, 1^st and 3^rd defendant handed over their identity cards to the staff.  In her evidence in court, the 1^st defendant mentioned a conversation by the 2^nd defendant which was never disclosed in her witness statement.    She said that when the solicitors’ staff asked the purchasers to produce their identity cards, the 2^nd defendant asked the 3^rd defendant if he had contributed to the purchase price and said if he had he might produce his identity card for photocopying.  The 3^rd defendant did not reply, but simply produced his identity card.

32.  In evidence, the 3^rd defendant said that the 2^nd defendant also went to the solicitors’ office, but mentioned nothing about what, according to the 1^st defendant’s oral evidence, the 2^nd defendant had allegedly asked him.  He said that the solicitors’ staff asked how many of them would sign as purchasers. Then he asked what would be the procedure if the plaintiff, the 1^st defendant and he were to sign and what if they were not.  The staff replied that those who would sign on the next occasion had to produce their identity cards.  He asked whether he could change his mind not to sign on the next occasion.  The staff replied that it was alright.  Then, the 2^nd defendant asked the 3^rd defendant whether he and the plaintiff would wish to use their names as purchasers and if so to produce their identity cards.  Contrary to what was said in the 1^st defendant’s witness statement, he denied he had told that plaintiff to produce her identity card.

33.  Then, on 16 July 2002, the plaintiff, the 1^st and 3^rd defendant went to the solicitors’ office again to sign some documents for the purpose of completing the purchase of the Property.  The 2^nd defendant did    not go as he had to attend physiotherapy treatment.  According to the 3^rd defendant, on the way, he told the plaintiff that as he had not contributed to the purchase price, he would not sign as purchaser and the plaintiff also said that she would not sign for the same reason.  But according to the 1^st defendant, the plaintiff told her that she did not wish to sign as purchaser as she feared that might prejudice her mother’s right to stay in the public housing unit of which she was one of the registered tenants.  At the solicitors’ office, when the solicitors’ staff asked how many of them would sign as purchasers, the 3^rd defendant said that only  the 1^st defendant would sign.  Therefore, only the 1^st defendant signed as purchaser.  The plaintiff and the 3^rd defendant did not.

34.  The 3^rd defendant disputed that the renovation work took five to six months.  He said it was completed within two to three months.

Finding of fact

35.  There are many factual disputes in this case, most of which are irrelevant.  But there are two significant facts which are not in dispute.  These are that the plaintiff went with the 1^st and 3^rd defendants to the solicitors’ office to sign some documents in connection with the purchase of the Property and that the title deeds of the Properties were given to the plaintiff, though there were some disputes as to whether the 2^nd defendant went on 9 July 2002 and who handed over the title deeds to the plaintiff.  Working backwards from these incontrovertible facts, I find the plaintiff more credible and resolve the material factual disputes and most of the other factual disputes in favour of the plaintiff.

36.  First, I begin with the funding of the purchase of the Property.  There is no dispute that the 1^st and 2^nd defendants respectively contributed $160,000 and $200,000 towards the purchase of the Property and had it registered in the sole name of the 1^st defendant.  These facts negate the plaintiff’s case and support the 1^st and 3^rd defendants’.

37.  Second, there is no dispute that the plaintiff, the 1^st and 3^rd defendants went to the solicitors’ office in connection with the sale and purchase of the Property.  The parties dispute about whether the 2^nd defendant also went on that occasion and whether the plaintiff attended the solicitors’ office on a subsequent occasion.  It is common ground that the 2^nd or 3^rd defendants negotiated the sale and purchase of the Property directly with the vendors.     The parties had not entered into any provisional sale and purchase agreement.  The sale and purchase agreement as well as the assignment were both dated 16 July 2002.  Usually, for a transaction of this kind, the purchaser has to attend the solicitors’ office at least twice before the title deeds would be given to him.  On the first occasion, the purchaser gives or confirms his instructions in writing to the solicitors about the sale and purchase of the property, the details and address of the property, his personal particulars, and pays a deposit on account and/or the purchase price. The solicitors would then prepare the assignment, perform land search in respect of the property, deposit the purchase money into the clients’ account for clearance and so on.  Then the purchaser would have to go there again on a second occasion to complete the purchase by signing the assignment and settling the accounts with the solicitors’ firm and with the vendor.  Then, the solicitors would arrange for stamping and registration of the assignment. After all these procedures have been completed, the purchaser would collect the assignment and other title documents from the solicitors’ office on the third occasion.

38.  Among the documents produced by the defendants are copies of the sale and purchase agreement and the assignment in respect of the Property, both were dated 16 July 2002.  They were signed by the vendors and the 1^st defendant only.  In the light of the usual conveyancing practice, I have no difficulties in accepting the 1^st and 3^rd defendants’ evidence that they attended the solicitors’ office twice on 9 and 16 July 2002.  The question is what happened on those two occasions.

39.  Third, in broad terms, what happened on the first occasion, ie on 9 July 2002 is not in dispute.  The 1^st and 3^rd defendants arranged to meet the vendors at the solicitors’ office to give instructions to their common solicitors.  The solicitors’ staff asked the purchasers of the Property to produce their identity cards for making photocopies.  The plaintiff, the 1^st and 3^rd defendants produced their identity cards and the plaintiff signed some documents.

40.  But in terms of details, the evidence of the 3^rd defendant is inconsistent with that of the 1^st defendant’s, even though he was in court while the 1^st defendant was giving evidence.  They both mentioned nothing in their witness statements about the 2^nd defendant’s attendance at the solicitors’ office and about his conversation.  In her evidence in court, the 1^st defendant said that the 2^nd defendant asked the 3^rd defendant if he had contributed to the purchase price and told him that he might produce his identity card if he had.  But the 3^rd defendant’s evidence is that the 2^nd defendant only told him to put down his and the plaintiff’s names if they wanted to be the purchasers.  Apart from being inconsistent with one another, there is no reason why they should have left out the 2^nd defendant’s conversation in their witness statements, whereas according to their evidence the 2^nd defendant displayed so much interest as to whether the 3^rd defendant had contributed to the purchase price or wished to be named as one of the purchasers.  I think the 1^st and 3^rd defendants were concocting their evidence while they were in the witness box.  Due to want of attention, the 3^rd defendant created the inconsistency.  I think the truth is that the 2^nd defendant did not attend the solicitors’ office on the first occasion.  The alleged conversation by the 2^nd defendant in whatever form never took place.

41.  Another inherent inconsistency of the 1^st and 3^rd defendants’ evidence is that they tried to play down the significance of the plaintiff’s attendance at the solicitors’ office.  While so doing, they exposed their own lies.  They said that the plaintiff was asked to accompany or to assist the 1^st defendant. But, on their own evidence, the plaintiff was asked to produce her identity card as a purchaser of the Property.  The plaintiff left to pick up her daughters as soon as she had signed her name.  There was little purpose for her to accompany the 1^st defendant.  Furthermore, there was nothing to suggest that the 1^st defendant was sick or in need of assistance.  Indeed, ten years later on, the 1^st defendant appeared in court.  She had no difficulties in movement and was not suffering any form of disability.  If there was anyone who needed assistance, it would have been the 2^nd defendant who had suffered a leg injury and was receiving physiotherapy treatment at the time, but this is not what the defendants say.  I do not think the defendants’ evidence credible.  There must be a reason why the plaintiff went.  That reason can be found in the assignment itself.  The plaintiff’s identity card number was typed in the execution clause to be signed by the assignees and crossed out by hand. That suggests that  it was the defendants’ initial instruction that the plaintiff was to be one of the named purchasers of the Property.  Hence, the plaintiff did not merely accompany the 1^st defendant to the solicitors’ office.  She was asked by the 2^nd defendant to go to the solicitors’ office to complete the purchase of the Property. The 2^nd defendant har given a witness statement.  Even while opening the defence case, Mr Poon indicated that the 2^nd defendant would be called to give evidence.  However, in the end, the 2^nd defendant was not called and no reason was given.  He was not called to testify that he was at the solicitors’ office on 9 July 2002 and that he made the conversation alleged by the 1^st and 2^nd defendants.  He was not called to dispute the plaintiff’s evidence that he instructed her to go to the solicitors’ office to sign the sale and purchase agreement.  For reasons as explained above and in paragraph 19, I am entitled to draw adverse inference against the 1^st and 3^rd defendants for their failure to call the 2^nd defendant.  I do not believe in their evidence. 

42.  However, one difficulty with the plaintiff’s evidence is that while she said she signed the sale and purchase agreement, her signature is nowhere to be found in the sale and purchase agreement or the assignment.  As a layperson who does not understand English and had no experience buying and selling property, she may not know the difference between a sale and purchase agreement, an assignment and a letter of instruction relating to the sale and purchase of a property.  They are all documents relating to the purchase of a property.  On the basis of her evidence, the plaintiff was happily expecting to be made a joint owner of the Property to be gifted to her, it is understandable that she did not really understand what was explained to her except that it was something which had to do with the purchase of the Property.  What the plaintiff signed might have been a letter of instruction and not the sale and purchase agreement or the assignment.  As there is no dispute that at the solicitors’ office she was asked to produce her identity card as purchaser and her identity card number appeared on the assignment, I think the absence of any signed document by the plaintiff does no damage to her credibility.

43.  I accept the plaintiff’s evidence as to what happened on 9 July 2002 and reject the 1^st and 3^rd defendants’.  I find that the plaintiff was told by the 2^nd defendant to go to the solicitors’ office to sign a sale and purchase agreement in respect of the Property on 9 July 2002.  The 2^nd defendant did not attend the solicitors office on that occasion.  I find that it was the defendants’ initial instruction that the plaintiff, the 1^st and 3^rd defendants would be the purchasers of the Property.

44.  Fourth, there is no dispute that the sale and purchase agreement as well as the assignment were signed solely by the 1^st defendant as purchaser who was also registered as the sole owner of the Property.  The 1^st and 3^rd defendants’ evidence is that the plaintiff and the 3^rd defendant decided not to sign as purchasers of the Property.  The plaintiff denied that she attended the solicitors’ office on 16 July 2002.  She said that she was not even aware of such an occasion and denied that she declined to be one of the owners of the Property.  I have found that the 1^st and 3^rd defendants tried to play down the purpose of the plaintiff’s attendance at the solicitors’ office on 9 July 2002 and concocted a piece of conversation by the 2^nd defendant to the effect that the 3^rd defendant might not sign the sale and purchase agreement as a purchaser if he had not contributed to the purchase price.  This finding has an adverse impact on the credibility of their evidence about what happened in the solicitors’ office on 16 July 2002, in particular that the plaintiff and the 3^rd defendant decided not to use their names as purchasers of the Property.  I do not accept the evidence of the 1^st and 3^rd defendants.  On the contrary, I accept the plaintiff’s evidence and from which I draw the inference that the 1^st and 3^rd defendants deliberately kept her out of the completion of the purchase of the Property.  Probably, the 1^st and/or 2^nd defendants had second thoughts about the arrangement or regretted their generosity.

45.  Fifth, the title deeds were handed over to the plaintiff some months after completion.  A minor dispute is how soon after the second visit to the solicitors’ office were the title deeds handed over and who handed them to the plaintiff.  According to the 1^st defendant, she was given the title deeds of the Property by a staff of the solicitors’ office on 4 September 2002. In view of her old age and her trust in the plaintiff, she gave them to her for safe custody.  According to the plaintiff, some months after the visit to the solicitors’ office, the 3^rd defendant told her that he had obtained the title deeds which were being kept temporarily in the home of the 1^st and 2^nd defendants.  The obvious reason was that it was insecure to keep the title deeds in the Property which was under renovation or in their rented room.  It was only after another few months until the renovation of the Property was completed that the 2^nd defendant gave her the title deeds.

46.  In fact, it matters not when the title deeds were given to the plaintiff and who gave them to her.  The undisputed evidence is that the title deeds were given to the plaintiff.  What is important is what was the intention which accompanied the handing over of the title deeds.  On this issue, I think the evidence of the 1^st defendant incredible.  She obviously realised the importance of the title deeds as a document of title to the Property.  That was why she was concerned to have them kept in safe custody.  However, she was quite unable to explain why her old age and health presented no problem for the safe custody of the title deeds of the property in which she and the 2^nd defendant were residing.     The reason she gave for handing over the title deeds of the Property to the plaintiff could not stand up to reason.  I do not accept her evidence.  On the other hand, the handing over of the title deeds to the plaintiff flows naturally from the promise of the Property by the 1^st and 2^nd defendants, the 2^nd defendant’s instruction to the plaintiff to attend the solicitors’ office and the initial instruction that the plaintiff was to sign the sale and purchase agreement and assignment as one of the purchasers of the Property.

47.  Stepping back to look at the evidence as a whole, this is probably a case of an old traditional Chinese couple with only one son and craving for a grandson.  They therefore arranged for their son’s marriage with the plaintiff.  However, the plaintiff only gave birth to two daughters.  They wanted their son and his family to live close to them so that they could see their granddaughters more often and more conveniently.  They urged the plaintiff to have another child but the plaintiff declined on financial grounds.  Therefore, they offered to provide for the plaintiff’s family needs and a property if she would have another child.  In furtherance of their promise, they found a property in Ko Shing Street for the plaintiff and the 3^rd defendant, but were unable to agree the purchase price with the vendor.  Eventually, about two years later, an attractive opportunity arose when the owners of the Property immediately above the 1^st and 2^nd defendants’ home wanted to dispose of their Property. The price was agreed.  The 2^nd defendant instructed the plaintiff to attend the solicitors’ office on 9 July 2002 for the purpose of signing the sale and purchase agreement.  If there was no promise of a gift of the Property to the plaintiff and 3^rd defendant, one may rhetorically ask why did the 2^nd defendant instruct the plaintiff go to the solicitors’ office to sign the sale and purchase agreement, and why were the title deeds of the Property handed over to the plaintiff after completion?  If there was no prior instruction by the 1^st and/or 2^nd defendants that the plaintiff would be one of the purchasers of the Property, why did the 3^rd defendant ask the plaintiff to produce her identity card in connection with the procedures at the solicitors’ office, why did she sign some documents there, and why her identity card number appeared on the execution clause of the assignment.  The only answer to these questions is that the 1^st and 2^nd defendants had promised to make a gift of the Property to the plaintiff.

48.  The only weakness in the above proposition is that the plaintiff is unable to produce any document which she alleged she signed in the solicitors’ office and that, to the contrary, the sale and purchase agreement and assignment were signed solely by the 1^st defendant.  She also made no attempt to summons the solicitors’ staff or to seek discovery against the solicitors. Despite these weaknesses, it is common ground that she was asked to produce her identity card for making photocopy and her identity card number appeared on the assignment.  I have no doubt that she is telling the truth.  I accept her evidence.

49.  There could be many reasons why in the end the plaintiff did not sign the assignment.  On her own evidence, which I accept, there was a second visit to the solicitors’ office, which she was not aware of or informed.  The only reasonable inference is that there was a change of mind on the part of the 1^st and/or 2^nd defendants who might be regretting their generosity at the moment when they were about to perfect their gift.  The 1^st and 3^rd defendant deliberately excluded the plaintiff from the second visit to the solicitors’ office and then gave her the title deeds to encourage her to indulge in the belief that she had been made one of the owners of the Property.  For such an old building, conceivably the title deeds consisted of a huge bundle of documents, all type written in English.  It is understandable that the plaintiff would not have taken the trouble to read them and would not have discovered that her signature did not appear on any of the documents among the bundle.  Again, I accept the plaintiff’s evidence that the title deeds were given to her by the 2^nd defendant six to eight months after the purchase of the Property.  The 2^nd defendant may or may not know of the change of mind of the 1^st defendant and may or may not be part of the design to exclude the plaintiff from the second visit to the solicitors’ office. That is immaterial.  I find there was a change of mind on the part of the 1^st and/or 2^nd defendant.  I need not speculate the reason or the motive for the change.  Suffice it is to say, all the circumstances point to the existence of a promise of a gift of the Property to the plaintiff and the 3^rd defendant jointly and that the evidence of the plaintiff is more credible.  I accept her evidence and reject that of the 1^st and 3^rd defendants’.

The assurance

50.  On the above finding of fact, I find that at least since the birth of the second daughter in 1997, there were domestic discussions between the plaintiff, the 1^st and 2^nd defendants about the plaintiff giving up her job to look after her daughters; moving to the Western District; inheriting the 1^st and 2^nd defendants’ estate, bearing another child and to be given half share of a property to be bought for her and the 3^rd defendant’s use.  Understandably, these discussions were loose and no more than indications of future intentions.  I would not accept such discussions as assurance until when actual steps were taken in negotiating the purchase of a property.  There was one negotiation in 1999 about purchase of a property in Ko Shing Street, but that fell through.  The matter then was left to rest for three to four years until 2002.

51.  The discussion was revived in 2002 when the former owners of the Property proposed to sell.  It is not entirely clear what was discussed in 2002.  According to the plaintiff, the 1^st and 2^nd defendant said that they had property of their own and if the plaintiff so desired, the Property could be purchased as a gift for her and the 3^rd defendant. There was no mention of what the plaintiff must do to earn the gift.  But this discussion must be related back to the earlier discussions.  Accordingly, I find there was a representation or assurance by the 1^st and 2^nd defendant that they would make a gift of a half share of the Property to be purchased to the plaintiff if she would bear another child, hopefully a son, and that they would provide for her and her family’s financial needs.  By that time, the plaintiff had already quit her job in 1998 to look after her daughters on her own volition and had moved to Western District to facilitate the 3^rd defendant’s work in 2000.  These two elements could not form part of the representation.

Reliance

52.  The plaintiff pleaded that in reliance of the repeated promises, the plaintiff quit her job, committed to take care of the 1^st and 2^nd defendants and tried to give birth to another child, though her pregnancies in 2003 and 2007 ended in abortions.  She also pleaded that she forwent pursuing the purchasing of her own property and/or securing her future wealth, and paid for the fittings, furniture, outgoings of and improvements to the Property.

53.  On her evidence, the plaintiff was offered a promotion which required her working irregular hours. She sought the 3^rd defendant’s cooperation by returning home earlier to look after the daughters, but the 3^rd defendant refused.  So she forwent her promotion.  Then, the 1^st to 3^rd defendants expressed their wish that she would quit her job to look after the daughters.  Specifically in mid 1998, the 1^st and 3^rd defendants asked the plaintiff to quit her job to look after the daughters.  Then upon that consideration, the plaintiff quit her job.  But on her own evidence, that had nothing to do with reliance of any promise of a gift of a property.

54.  For similar reason, she cannot argue that she forwent pursuing the purchase of her own property and/or securing her future wealth because she quit her job to look after the daughters.  The constraint was imposed on her by reason of her family financial position and the 3^rd defendant’s refusal to cooperate.

55.  As for taking care of the 1^st and 2^nd defendants, there is no dispute that they were able to look after themselves and required little  care and attention.  They cooked their own meals and attended to their household matters.  The plaintiff did not have meals with the 1^st and 2^nddefendants together.  Except for a period in 2002 while the 2^nd defendant was suffering injury arising out of work that the plaintiff attended to him in hospital, brought him food and assisted in his employees’ compensation claim, the plaintiff did not offer much care and attention to the 2^nd defendant.  Most fatal to the plaintiff’s claim is that even on her own evidence, taking care of the 1^st and 2^nd defendant was not part of what she must do to earn the assurance.  The plaintiff could not be fairly said to have taken care of the 1^st and 2^nd defendants in reliance of the assurance.

56.  The plaintiff said that she paid for the fittings, furniture, outgoings of and improvements to the Property.  The outgoings were regular expenses of running her own household. The furniture and fittings were gifts from her family members.  She contributed part of the renovation expenses.  All these, I assume were insubstantial having regard to the value of the Property.  In any event, those furniture, fitting and renovations were hers to enjoy as a home.

57.  As for the plaintiff’s pregnancy as a result of reliance on the assurance, I shall deal with that issue under detriment as the issues of reliance and detriment are intertwined.

Detriment

58.  While the plaintiff’s evidence does not go that far as to say that her giving birth to a son was a condition for the gift of the Property, it is clear in that context that the 1^st and 2^nd defendants repeatedly expressed their wish that the plaintiff should attempt to give birth to a son.  The plaintiff refused on financial reasons.  The 1^st and 2^nd defendants offered the gift of a property and to provide for her and her family’s needs.  The plaintiff argued that by relying on the assurance, she suffered detriment by allowing herself to be pregnant in 2003 and again in 2007, although on both occasions the pregnancy terminated with an abortion.

59.  It is argued by Mr Poon based on Coombes v Smith that allowing oneself to become pregnant cannot be a detriment.  I have held that Coombes v Smith is a decision on its facts and does not support the proposition advanced by Mr Poon. The requirement of detriment must be approached as part of a broad inquiry as to whether in all the circumstances it is unconscionable to allow a party to repudiate his representation which the other party have acted upon.

60.  The proprietary estoppel claim in Coombes v Smith is one made by one party to a cohabitation against the other.  Though not so mentioned by Deputy High Court Judge Parker QC, the underlying reason for his decision must have been that it was difficult to argue for detriment in the case of parties to a cohabitation who were both desirous to have a child of their own.  On the fact, Coombes v Smith is distinguishable from the present case.

61.  In the present case, the claim is made by a party to a marriage against a non‑party who gave the assurance.  Putting it in another way, the assurance was made by a non‑party to a party to a marriage.  The 1^st and 2^nd defendants who were non‑parties to the marriage were desirous that the plaintiff should have a son, but the plaintiff did not so desire.  A wife owes no obligation to her husband to give birth to children, let alone any such obligation to her in-laws.  Since giving birth to her second daughter in 1997, she took contraceptives and prevented herself from getting pregnant until after she was led to the belief that she was given the gift of the Property in July 2002.  Then, she allowed herself to become pregnant in 2003 and again in 2007.  The defendants admitted knowledge of the 2003 pregnancy but denied knowledge of the 2007 pregnancy.  Both pregnancies were supported by medical evidence and were incontrovertible.  Though the pregnancies terminated with an abortion, the plaintiff did perform what was expected of her to earn the gift of the Property.  In my view, the two pregnancies were substantial detriments.  The 1^st defendant asked the plaintiff to attempt to have a son.  She knew at least of the 2003 pregnancy.  Yet, she stood by and watched without informing the plaintiff of her intention to repudiate her assurance.  The plaintiff allowed herself to become pregnant a second time.  In the circumstances, though short of giving birth to a son, the stage has passed when it would be unconscionable to allow the 1^st and 2^nd defendants to repudiate their assurance upon which the plaintiff acted.  Accordingly, I find that the plaintiff did suffer detriment by relying on the assurance of the 1^st and 2^nd defendants.

62.  While it may be argued that the plaintiff also relied on the 1^st and 2^nd defendants’ assurance by providing them care and attention, whatever care and attention she provided to them was just part of what a daughter‑in‑law of ordinary decency would offer to her parents‑in‑law. It cannot be said to be a substantial detriment.  Similarly, the renovation expenses and furnishing she contributed were for her enjoyment of the Property.  They cannot be said to substantial detriment.  But the pregnancies were sufficient detriments as to invoke the operation of the principle of proprietary estoppel.

Conclusion

63.  Having reached the above conclusion, insofar as the plaintiff is concerned, it must necessarily follow that the 1^st and 2^nd defendants should be held to their promise of a half share of the Property to the plaintiff.  The 1^st and/or 2^nd defendant led the plaintiff to the belief that she was given a half share in the Property.  The plaintiff acted in reliance of the assurance and suffered detriment.  But in breach of their promise, the Property was not so conveyed to the plaintiff and the 1^st defendant became the sole registered owner of the Property which she sold to Grace Sky Creation Limited for $3,150,000.  Accordingly, I enter judgment for the plaintiff against the 1^st defendant. I grant the plaintiff:

(1)   a declaration that the 1^st defendant held half of the interest in the Property on trust for the plaintiff;

(2)   an order that the 1^st defendant shall hand over to the plaintiff half of the proceeds of sale of the Property net of agency fee of $8,900 in the amount of $1,570,550 with interest at judgment rate from the 16 August 2010; and

(3)   an order nisi that the 1^st defendant shall pay the plaintiff’s costs of this action and that the plaintiff’s own costs shall be taxed in accordance with Legal Aid Regulations.