YYT v. CCM AND OTHERS

FCMC 4498 / 2016

[2023] HKFC 110

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NO. 4498 OF 2016

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DECISION
(Leave to Appeal)

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1.  On 31 October 2022, I handed down a judgment (“Judgment”) after a 9-day trial on the determination of beneficial ownership of 7 Properties and R5’s Shares as preliminary issue.

2.  Rs sought leave to appeal against the following part of the orders made in the Judgment and costs:

(1)  H was the beneficial owner of Lotus Villas and House 63 before the sale, and their sale proceeds;

(2)  H is the beneficial owner of House 29;

(3)  R5 is holding R5’s Shares on trust for H[1].

3.  For ease of reference, the definitions used in the Judgment are adopted in this Decision. Lotus Villas, House 63 and House 29 are collectively referred to as the “3 Properties”.

4.  The background facts are set out in §§4 to 39 of the Judgment.

Legal Principles

5.  Section 63A of the District Court Ordinance (Cap. 336) stipulates that leave to appeal should not be granted unless there is a reasonable prospect of success, or there is some other reason in the interests of justice that leave should be given. A reasonable prospect of success involves the notion of the prospect of success must be more than fanciful, without having to be probable: SMSE v KL [2009] 4 HKLRD 125; KNM v HTF, HCMP 288/2011, 7 September 2011 §§8 – 9. Even if the Court takes the view that there is a reasonable prospect of success, the Court retains a discretion as to whether to grant leave: Ho Yuen Ki Winnie v Ho Hung Sun Stanley, HCA 391/2006.

6.  Where an appeal is against the findings of fact or is involved the exercise of discretion, there is a higher threshold. The appellant must show that the decision was plainly wrong, or that the judge made some error of law, or has taken into account irrelevant matters or omitted to have regard to relevant matters, or that the discretion was not exercised at all. The appellant must identify palpable errors in the judgment. The assertion that the finding of the judge is against the weight of the evidence or that the judge should have reached another conclusion because of the points advanced in the submissions are not errors coming within that category: See TAC v VDC nee VDM, HCMP 2198/2012, 5 December 2012; China Gold Finance Limited v CIL Holdings Limited, CACV 11/2015, 11 November 2015; NLC v YMF [2022] HKCA 1310, §16.

7.  The Court of Appeal has reiterated in China Gold Finance Limited v CIL Holdings Limited, CACV 11/2015, 11 November 2015:

“11. It is well settled that in respect of findings of fact, this court can only intervene when we are satisfied that the findings by the primary judge is plainly wrong: Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 is often cited and applied in this court.

……

14. …. In our judicial system, the appellate process is not designed to give a litigant (or his counsel) a platform for regurgitating his closing submissions on the evidence and factual aspects of the case again with the hope that the appellate judges may come to a different view to that of the primary judge. ……

15. In an appeal, the court of appeal should focus on the question whether the primary judge has fallen in palpable errors which could give rise to grounds for intervention by the appellate court. As explained in the cases, it is not germane that judges in this court may reach a different conclusion from that of the judge. There are many areas, particularly those in relation to findings of fact, where judges can reasonably reach different conclusions from each other. That would not be a ground for intervention.

16. Thus, in an appeal, it is not helpful if counsel and litigant (acted in person) only repeat submissions already advanced and considered by the primary judge at the trial. The starting point should be the judgment of the primary judge and the identification of palpable errors (which must be errors of such nature which warrants intervention from this court) in the judgment. The mere assertion that the finding of the judge is against the weight of the evidence or that the judge should have reached another conclusion because of points advanced in the closing submissions below are not errors coming within that category.

……

23. See also the well know statement of Lord Hoffmann in Piglowska v Piglowski [1999] 1 WLR 1360 at 1372 on the findings of fact by a judge as inherently incomplete statement of the impression upon him or her and the judgment of Bokhary PJ in Ting Kwok Keung v Tam Dick Yuen, supra.

24. In To Pui Kui v Ng Kwok Piu, supra, after referring to McGraddie v McGraddie, supra, this court also explained at paragraphs 12 to 16 why institutionally it is not appropriate for our Court of Appeal to take over the role of the trial judge as the primary assessor of the evidence.”

(emphasis in bold added)

8.  The Court of Final Appeal in Ting Kwok Keung v Tam Dick Yuen & others (2002) 5 HKCFAR 336 adopted what Lord Hoffmann repeated in Piglowska v Piglowska [1999] 1 WLR 1360 at 1372D-F:-

“The need for appellate caution in reversing the trial judge's evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance ... of which time and language do not permit exact expression, but which may play an important part in the judge's overall evaluation.”

9.  I consider the intended grounds of appeal advanced by Rs in the Draft Notice of Appeal (“DNOA”) according to the above principles.

Intended Grounds 1 and 4

10.  Rs argued that W’s pleaded case on resulting trust over the 3 Properties disclosed no reasonable cause of action. Relying on TL v ML and Leung Wing Yi Asther, Rs stressed that the family court shall approach the dispute between a spouse and third party on the beneficial ownership of a property in the same way as the civil court, and contended that, therefore this Court has to dismiss W’s claim on resulting trust for failure to disclose a reasonable cause of action in her pleadings, the Court is not entitled to consider Rs’ pleaded case and evidence for the determination of the beneficial owner of the 3 Properties in this trial on preliminary issue: Intended Ground 1 of DNOA.

11.  With respect to the family court’s approach for the dispute on beneficial ownership of a property involving third party’s interest, the Court of Appeal in LLC v LMWA [2019] 2 HKLRD 529 has confirmed that a trial of preliminary issues (as is the present trial) is a part of the ancillary relief dispute in the matrimonial proceedings. The parties only raised the preliminary issue on beneficial ownership because of the dispute on the ancillary relief in the matrimonial proceedings. The underlying matrimonial dispute and the application for ancillary relief is the origin and the substratum for the litigation on ownership. The issue on ownership between a spouse and a third party, insofar as it is necessary to determine the same, have to be decided by reference to the general law of property, and in many cases formal pleadings should be required in order to identify the issues for such determination. In essence the claim remains a claim by the wife against the husband, which is ultimately a claim for discretionary relief. Careful preparation for the trial is necessary, but this does not require or permit the import of the entire civil procedural rules:

“18. We start by making some general observations on the resolution of dispute of beneficial ownership which may involve third party interest in the context of ancillary relief applications. In TL v ML [2006] 1 FLR 1263, Deputy High Court Judge Mostyn QC highlighted the difference between determining a dispute of ownership between a spouse and a third party and the discretionary exercise of determining ancillary relief between spouses. Procedurally, he opined as follows at [36] and [37]:

“ [36] In my opinion, it is essential in every instance where a dispute arises about the ownership of property in ancillary relief proceedings between a spouse and a third party, that the following things should ordinarily happen:

(i) The third party should be joined to the proceedings at the earliest opportunity;

(ii) Directions should be given for the issue to be fully pleaded by points of claim and points of defence;

(iii) Separate witness statements should be directed in relation to the dispute; and

(iv) The dispute should be directed to be heard separately as a preliminary issue, before the financial dispute resolution (FDR).

[37] In this way, the parties will know at an early stage whether or not the property in question falls within the dispositive powers of the court and a meaningful FDR can take place. It also means that the expensive attendance of the third party for the entire duration of the trial can be avoided. It is a great pity that none of these steps took place in this case. Had they happened, I believe that a great deal of the costs would have been saved.”

19. Those observations were taken on board in subsequent cases. In A v A [2007] 2 FLR 467, Munby J said at [23] and [24],

“ [23] The deputy judge recorded, at para [35] [in TL v ML], the complaint of counsel in that case that the issues had never been ‘properly defined, pleaded or particularised’ and went on to suggest, at para [36], how such issues should in future be handled by way of appropriate case management. I am sympathetic to the approach being suggested by the deputy judge, though I would not wish to be quite so prescriptive as he appears to be. Vigorous judicial case management in such cases is vital, but the appropriate directions to be given in any particular case must reflect the case managing judge's appraisal of how, given the forensic realities of the particular case, the issues can best be resolved in the most just, effective and expeditious manner.

[24] I do, however, entirely share the deputy judge's view that directions should normally be given for such issues to be properly pleaded by points of claim and points of defence. In the present case the muddle, confusion and ambiguities in the wife's case would have been more pitilessly exposed, and at a much earlier stage in the proceedings, had the presentation of her case been exposed to the intellectual discipline which is one of the advantages of any system of pleading. Moreover, if the wife had been required to plead her case everyone would have had a much clearer idea, and at a much earlier stage, as to exactly what she was or was not asserting and as to exactly what the husband and the interveners were or were not saying by way of defence. As it was, matters were wholly unclear even as late as the first day of the final hearing.”

20. In Hong Kong, similar endorsement of these procedural considerations can be found in the judgment of Stock NPJ in Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605. In that case, the concern was about the lack of pleadings to identify the issues in the trial on beneficial ownership, see [29] and the judgment of Kwan JA in the Court of Appeal, CACV 151 and 152 of 2013 at [30] and [31].

21. We agree that issues on ownership between a spouse and a third party, insofar as it is necessary to determine the same, have to be decided by reference to the general law of property and in many cases formal pleadings should be required in order to identify the issues for such determination. However, we have reservations on prescribing that a trial of preliminary issue as the only way forward once an issue on third party beneficial ownership is raised. We also have reservations on prescribing that a FDR must be postponed until after the trial of preliminary issue.

22. One must not lose sight that the dispute on ownership in these cases often arisen from matrimonial proceedings. But for the breakdown of marriage and the application for ancillary relief by one spouse in a divorce petition, there would not be any claim on the property. In other words, the parties only raise the issues on beneficial ownership for the court to determine because of the matrimonial proceedings.

23. The underlying matrimonial dispute and the application for ancillary relief, in our judgment, is the origin and the substratum for the litigation on ownership irrespective of the procedural routes adopted by the parties and the court to resolve the same. ……

……

26. Irrespective of the role of the third party in contesting the ownership issue, given the ancillary relief application is the substratum for such contest, the primary protagonists are often the spouses.

27. Having regard to the above analysis, the observations of Thorpe LJ in Goldstone v Goldstone [2011] 1 FLR 1926 on the underlying nature of the proceedings despite the joinder of a third party are apt even in respect of cases where the relief sought is only a proprietary order without any claim for setting aside some property transaction as in that case. At [39], the learned judge said:

“ Of course, the ultimate trial required the family division judge to apply the law of property and the law of sham just as his brother judge would do in the Chancery Division. Careful preparation for that trial was necessary. However, these impeccable directions do not require or permit the import of the CPR. In its essence the claim remains a claim by the wife against the husband. Ultimately it is a claim for discretionary relief. In this, as in many cases, there must be a preliminary issue trial to establish the extent of the assets over which the discretion is ultimately exercised. Here, as in many cases, the preliminary issue trial determines the claims and the rights of third parties. The preliminary issue trial is pendent on the originating application. It has no independent existence.” (our emphasis)

28. Thus, we firmly reject Mr Clough’s submission that the trial of preliminary issue is not part of the matrimonial proceedings.”

(emphasis in bold added)

12.  To support their arguments under Intended Ground 1, Rs referred this Court again to Wong Leung Wing (which was cited in the trial) where DHCJ MK Liu dismissed the claim against D2 on his own motion for the plaintiff’s failure to plead D2’s knowledge on the arrangement between D1 and the claimed beneficial owner: Judgment §97.

13.  Wong Leung Wing is not a matrimonial dispute on ancillary relief. I do not see this case is an authority in support of Rs’ argument that where a party’s pleadings do not disclose a reasonable cause of action but not struck out, the Court is barred from considering the evidence at the trial for the purpose of determining the issue in dispute.

14.  This Court was tasked with the identification of assets available for the distribution between H and W on their divorce. The Court is not bound by the pleaded case of the parties in discharging this task. The Court’s duty is to achieve a fair and equitable outcome in the resolution of the ancillary relief dispute. The purpose of the pleadings is to define the issues, so that the other side knows the case he is expected to meet. In the present case, Rs knew that the question to be determined is the beneficial ownership of the 3 Properties for the purpose of the ancillary relief claim, and that issues on resulting trust were raised. Rs have pleaded their positive case of gift in defence, adduced evidence and testified at the trial. In the circumstances, this Court is entitled to consider all the evidence to reach a finding on the issues, including findings that were not pleaded by the parties. Rs produced no authority to suggest otherwise.

15.  I echo the following view of HHJ I Wong in FWY v TYCY [2022] HKFC 67:

“140. As pointed out by the Court of Appeal, but for the breakdown of marriage and the application for ancillary relief, there would not be any claim on the properties on the part of the mother. The underlying matrimonial dispute and the application for ancillary relief is the origin and the substratum for the litigation on ownership irrespective of the procedural routes adopted by the parties and the court to resolve the same; see: LLC v LMWA & LELP [2019] 2 HKLRD 529 at [8], [22] & [23]. In the present case, the court is tasked to identify the matrimonial assets for the purpose of division between the husband and the wife. In doing so, in my view, the court is entitled to come to findings on ownership that were not pleaded by the parties.”

16.  §§84 and 85 of the Judgment must of course be read in the context of the above approach, and could not have the meaning of preventing the Court from making findings not pleaded by the parties.

17.  Further, in Yip Lai Ngor, cited by Rs at the trial (Judgment §§95-96) and in this application, Au-yeung J had considered and relied on the evidence at cross examination to support her decision to dismiss the plaintiff’s case on constructive trust although she found that the plaintiff had not pleaded the defendant’s knowledge of the agreement or common understanding with respect to the beneficial ownership of the property, and this lack of plea “contained its own seed of destruction”: Yip Lai Ngor §§26 to 28, 39 to 41.

18.  Rs were not able to adduce any legal authority to support their arguments that this Court was barred, by the defective pleadings of a party, from considering the pleaded case of the other party and evaluating the evidence adduced before it to determine the beneficial ownership of a property for the purpose of identifying the assets available for distribution on divorce.

19.  There is no reasonable prospect of success in Intended Ground 1, and thus Intended Ground 4 does not stand.

20.  For the avoidance of doubt, I shall mention that the legal and factual matrix underlying the common intention constructive trust claim in House D44 and the 3 Workshops are different from the resulting trust claim against the 3 Properties. House D44 and the 3 Workshops are held in the name of R6 (a limited company). The intention of the legal owner, being a limited company, is a crucial element. The absence of a plea and evidence on R6’s intention on the acquisition of House D44 and the 3 Workshops are fatal to the claim on common intention constructive trust. Therefore, this Court found that W did not make out her claim for beneficial interest in House D44 and the 3 Workshops which are held to be owned by R6.

21.  Since Rs had made extensive submissions on whether W’s pleadings disclosed a reasonable cause of action on resulting trust, I address Rs’ argument on this point below although this is, in my view, academic.

22.  Rs’ argument hinges on their allegation that on W’s pleaded case, the money used to acquire the 3 Properties were from the “family business run by the Companies” or “from the Companies”, and by relying on the legal principle set out in Lo Man Yau, Rs said that such money are the assets of the Companies: DNOA §1(1), §1(2)(a). However, on reading her pleadings and without considering the evidence, I do not think this is a correct description of W’s pleaded case.

23.  W pleaded in §7 of the Amended Points of Claim that in about 1983, H and W started their own diamond and/or jewellery business and formed Old KTC, a partnership, with their funds.

24.  In §12, it was pleaded that H and W decided to continue and expand their diamond and/or jewellery business (which was defined as “family business”) by setting up R6.

25.  Old KTC had once been closed down after R6 was established: §9 of Amended Points of Claim.

26.  W admitted that W and H decided to shift the family business operated under Old KTC to R6: Re-Amended Points of Reply §8(1).

27.  W also admitted that W and H decided to shift the family business operated under R6 to DGIL in order to avoid the risk of the family business of R6 on its landed properties: Re-Amended Points of Reply §9(1). DGIL was incorporated in October 1996: Judgment §19(1).

28.  The other companies including MCHL, WCL and DGJML were incorporated to take up different areas of the business: Judgment §19(2)-(3).

29.  In about 1998, Old KTC, the partnership, was reopened and recommenced business. In 2000, the name of Old KTC was changed to New KTC: §9 of Amended Points of Claim.

30.  In §32 of Amended Points of Claim, W changed the definition of “family business” to the business of exporting jewellery to overseas customers, without specifying the vehicle used for this “family business”.

31.  In §§48-68 of the Amended Points of Claim, W pleaded that H unilaterally utilised the funds of “family business” to acquire the 3 Properties respectively in 1999, 2010 and 2012, by virtue of resulting trust, the 3 Properties were/are held on trust for H and W. As noted above, by this time, Old KTC had recommenced business.

32.  In §75 of Amended Points of Claim, W pleaded an alternative case where it was found that the acquisition money was sourced from H.

33.  Bearing in mind that Old KTC (and subsequently renamed as New KTC) had recommenced business at the time when the 3 Properties were acquired and the definition of “family business” in §32 of the Amended Points of Claim was not confined to the business operated under the Companies, reading W’s pleadings as a whole and without considering the evidence, the “family business” at the time of acquisition of the 3 Properties was not confined to the business operated by the Companies.

34.  Rs referred to §25(1) of Re-Amended Points of Claim and §§8(6), 8(8), 9(6), 9(8), 10(6), 10(8), 11(5) and 11(7) of the Re-Amended Points of Reply. In these paragraphs, W had pleaded “family business” under different companies. These show that the “family business” was not conducted or operated by one company only, neither can it be concluded that the family business was conducted exclusively by the Companies.

35.  In §§17, 19 and 21 of the Re-Amended Points of Reply, W had pleaded that the 3 Properties were “acquired with and financed by the monies and funds generated and yielded from the family business jointly and beneficially owned by [W] and [H] through the companies concerned during the subsistence of their marriage. In the premises, the net sale proceeds of [Lotus Villas and House 63], and House 29 form part and parcel of the family/matrimonial assets of [W] and [H].” These 3 paragraphs were pleaded with reference to the Matrimonial Pot Issue. To construe these paragraphs in the context of the pleaded fact as a whole, the words “companies concerned” would be liberally construed and was not restricted to mean the Companies only.

36.  To reach a finding on the beneficial ownership of the 3 Properties, I have duly considered and rejected Rs’ arguments, including those set out in §107 of Rs’ Opening Submission and §§27 to 29 of Rs’ Reply Submission.

37.  If I am wrong on this point, by the reasons set out in §§11 to 18 above, this Court was not prevented by the defective pleadings of W from reaching the findings in §137(2) and (3) of the Judgment after consideration of all evidence holistically (including the evidence adduced by Rs). The conclusion in §19 above stands.

Intended Grounds 2(1) and 3(1)

38.  It bears repeating the following legal principles set out in the Judgment:

“77(1) The starting position is that equity follows the law, that is, the legal owner of a property also has the beneficial interest in the property.

(2) The party who asserts that the beneficial interest of the property does not lie with the legal owner bears the burden of proving it. …

……

(9) In assessing the intention of the parties, the Court is to assess all relevant evidence holistically. Context is crucial. …

(10) As a matter of common experience, contemporaneous conduct was inherently more likely to be a reliable indicator of intention than words and conduct after the event, especially in the case of self-serving statements and conducts, but it did not follow that subsequent conduct was necessarily inadmissible or irrelevant: Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605 [54] to [56].

(11) Resulting trust operates in the absence of evidence of intention of the parties. If the Court makes a finding on the intention of the parties with respect to the beneficial ownership, it would not be necessary to resort to presumptions, including the presumption of resulting trust: Primecredit [2.15]; Leung Wing Yi Asther [53]

(12) In a non-corporate context, there is a rebuttable presumption that the person who provide the funds for the purchase of a property has a beneficial interest in the property by virtue of a resulting trust.”

39.  All parties contended that the beneficial ownership of the 3 Properties are different from the legal ownership. W contended that H and W are the beneficial owners in equal shares. Rs contended that the beneficial ownership of the 3 Properties are different from the legal title of joint tenancy in that, instead of holding the properties with unity of possession as joint tenants, H gifted each of R2 to R4 a specific percentage of the beneficial ownership of the 3 Properties respectively.

40.  It is thus obvious that the Court could not simply stay at the starting position that equity follows the law without considering the evidence on intention. The assertion that this Court has ignored or overlooked this starting position is erroneous. The Court had proceeded to consider the evidence on intention of the relevant parties with respect to the beneficial ownership, and the circumstances surrounding the acquisition.

41.  In this connection, the intention of the legal owners (ie. H and R2 in the case of Lotus Villas and House 63; H, R2 to R4 in the case of House 29), and the fund provider are relevant. As it was found that the acquisition money was H’s money, it was not necessary to consider the intention of the other alleged fund providers, for example, the entities which carried out the “family business”.

42.  H and R2, as the legal owners adduced the evidence on gift and their respective financial contribution to the acquisition. Accordingly, these evidence were considered in §§117 to 125 of the Judgment.

43.  The dispute concerning R5’s Shares is similar in that W contended that the beneficial ownership of R5’s Shares is different from its legal ownership. The Court could not stay at the starting position, and should evaluate the evidence, including the evidence on the intention of H and R5 as well as the circumstances under which R5 was given R5’s Shares.

44.  There was no reversal of burden as alleged in Intended Ground 2(1) and 3(1) of DNOA. The Court has not required Rs to prove the making of gift. What the Court had done was to evaluate all the relevant evidence holistically with respect to the acquisition of the 3 Properties and R5’s Shares.

45.  After consideration of the evidence, it was found that there was no reliable evidence on the intention of the parties with respect to the beneficial interest of the 3 Properties and R5’s Shares. This Court resorted to the presumptions, and concluded that the presumption of resulting trust should apply upon the findings that the acquisitions were funded by H.

46.  There is no reasonable prospect of success in Intended Grounds 2(1) and 3(1).

Intended Grounds 2(2) and 2(4)

47.  The argument in these intended grounds, with respect, is devoid of merits and logic. H contended that I have contradicted myself by finding that there is no documentary evidence while I have accepted that it is not common to have documentary evidence in domestic context.

48.  Existence (or the lack) of documentary evidence is a crucial consideration. The findings of lack of documentary evidence in §118, §123 and §126 of the Judgment are findings of fact, which were undisputed.

49.  The lack of documentary evidence is just one of the reasons for rejecting H’s assertion of gift, and similarly, one of the reasons for rejecting R2’s case on her financial contributions to the acquisition. This Court has set out in the Judgment the other evidence, which have been viewed holistically, before rejecting the aforesaid cases of H and R2.

50.  Intended Ground 2(4) of DNOA, which reads below, is not understood as it has not identified the error said to have made by this Court.

“(4) further, in rejecting R2’s case and evidence that she had contributed financially to the acquisition of Lotus Villas for want of documentary support (Judgment §§122-124), the learned judge erred in principle.”

Intended Ground 2(3)(a)

51.  It is Rs’ own pleaded case that the 3 Properties were/are held by the respective Rs as joint tenants but H gifted to the respective Rs the specific percentage of the properties concerned: Re-Amended Point of Defence §17(1), 18(1) and 19(1).

52.  In the Re-Amended Points of Defence (with Statement of Truth signed), it was specifically pleaded that H and R2 were legally and beneficially entitled to the net sale proceeds of Lotus Villas and House 63 in equal shares, H gifted to each of R2 to R4 25% legal and beneficial interest in House 29. Rs have specifically denied that R2 to R4 held the respective properties or their sale proceeds “as trustees for anyone else”: Re-Amended Point of Defence §17(2)-(3), 18(2)-(3) and 19(1)-(2).

53.  At trial, H sought leave (which was granted) to top up evidence in examination in chief that he gave R2 to R4 as a gift the specific percentage of beneficial interest in the 3 Properties respectively on which R2 to R4 had not made financial contribution to the acquisition. And Lotus Villas and House 63 were beneficially owned by him and R2 in equal shares, each of H, R2 to R4 beneficially owns 25% of House 29. Under cross-examination, H repeated similar evidence. There is no evidence nor reason to suggest that H was not fully aware of the differences between joint tenancy and tenants in common, otherwise there was no need for him to seek leave to top up this part of evidence.

54.  The swaying of H’s evidence was exemplified by Rs’ Opening Submissions which were inconsistent with H’s evidence and pleadings:

(1)  In §119.2 and §119.3 of Rs’ Opening Submission, Rs submitted that Lotus Villas and House 63 were beneficially owned by H and R2 as joint tenants, and House 29 is beneficially owned by H, R2 to R4 as joint tenants.

(2)  In §105 of Rs’ Opening Submission, Rs submitted that Rs accepted that each of H, R2 to R4 owns the specific percentage of the 3 Properties respectively for the purpose of quantification in the trial of preliminary issue only. Counsel for Rs did not provide any reason or basis for the alleged quantification and the appropriateness of such quantification.

55.  Rs’ contention of gift and financial contribution by R2 were put to strict proof by W: Re-Amended Points of Reply §§16-21.

56.  It was clear to all parties (including the witnesses) that the contention of gift was not accepted and the truth of H and R2’s evidence was severely challenged. Everybody knew where they have stood. The opportunity to make explanation was open to Rs at the trial. Further, this is an evaluation of evidence which the Court is entitled to do although this was not pleaded. If Rs are raising the Browne v Dunn point, this point is not reasonably arguable. There is no procedural injustice against Rs. The Court has a duty to investigate issues which it considers relevant and is not bound to adopt a conclusion accepted by any party. It could not be said that issues not put to a witness in cross-examination should be taken as accepted: Leung Wing Yi Asther [43]; LWYA v KYW, CACV 151/2013, 4 December 2014 [89] – [91]; SSLT v SMFC [2019] HKFC 250 [20] – [23].

Intended Grounds 2(3)(b) to (e)

57.  These are essentially appeals against findings of facts.

58.  The matters raised in Intended Grounds 2(3)(b) to (e) were indisputably known to all parties and the Court; and have been considered. The argument that a different conclusion should be reached is not a ground for intervention by the appeal court. These intended grounds are an attempt to re-argue the case on points that had been canvassed and considered.

59.  There shall be certainty in the making of a valid gift. The right of survivorship in joint tenancy registered in the name of R2 to R4 who had not financially contributed to the acquisition of the properties may suggest the intention to gift. However, a gift to hold a property as joint tenants is vastly different from a gift of a specific percentage of beneficial interest in a property. H’s evidence on the gift of a specific percentage of interest in the property is inconsistent with a holding as joint tenants. I was not satisfied that on the evidence, a valid gift or an intention to give the specific percentage of interest in the 3 Properties were shown.

60.  The assertion that a party can sever the joint tenancy is neither here nor there. The fact remains that there was no severance nor evidence of any intended severance.

61.  The presumption of advancement was considered. Having rejected H’s evidence on gift, the presumption of advancement was rebutted.

62.  Rs have failed to show that the findings are plainly wrong or otherwise fall within the category that should be intervened by the appellant court.

Intended Grounds 3(2) to 3(5)

63.  Rs appeared to have overlooked H’s own evidence that the position of W and R5 are the same insofar as the shareholdings are concerned: Judgment §25. Comparison between the position of W and R5 as shareholders are apt to test the evidence of H.

64.  Rs appeared to have overlooked that all parties accepted that the shares held in the name of W (0.01% to 5% respectively) are beneficially owned by her. The beneficial ownership of the shares held by W was not an issue in dispute. It is incorrect for Rs to assert in Intended Ground 3(2)(b) that the Court has rejected Rs’ pleaded case and evidence of his gift to P the shareholding of the Companies. The assertion in Intended Ground 3(2)(c) is also incorrect.

65.  The findings on the beneficial ownership of R5’s Shares were reached not only because of the provision of personal guarantee by W, but after a holistic evaluation of all the evidence before the Court.

66.  Intended Grounds 3(2) to (5) are an attempt to reargue the matters which have been raised and considered at the trial and suggest that another conclusion should have been reached. This is not an error within the category of acceptable grounds for appeal against findings of fact.

Intended Grounds 5 and 6

67.  It is trite that the Court assesses the credibility of a witness by evaluating all the evidence before the Court as an overall process, by taking into account observation of the demeanour of the witnesses, the inherent probabilities, the documentary evidence or the lack of it: Ageas Insurance Company (Asia) Limited v Lam Hau Wah Inneo, CACV 65/2014, 9 January 2015.

68.  The Court did not reject Rs’ case only because of the findings on the lack of the credibility of the witnesses in general. There is no reasonable prospect of success in Intended Ground 5.

69.  Intended Ground 6 is a repetition and has no substance of its own.

Disposition

70.  There is no reasonable prospect of success in the intended appeal. Rs’ application for leave to appeal is dismissed.

71.  There is no reason to depart from the general rule of costs follow the event. On a nisi basis, I order that Rs do pay W the costs of this application summarily assessed to be $120,000. The above costs order will be made absolute if no variation application is made within 14 days.