CHAN QUN YUK v. KWAN SIU MUI

DCCJ 1916/2006

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1916 OF 2006

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JUDGEMENT

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1.  This is a claim for mesne profits for the alleged wrongful occupation of a piece of real property.

The background and the issues of the case

2.  The Plaintiff is the sole administrator of the estate of one Mr. Chan Chung Mo (“the Deceased”) who passed away on 26 November 1996.  Letters of Administration in respect of the Deceased’s estate were granted by the High Court to the Plaintiff, who is the Deceased’s adopted son, on 16 December 2004.

3.  At all material times, the Deceased was the registered owner of the property known as Flat B, 11^th Floor, Sing Kong Building, 233-243 Lockhart Road, Hong Kong (“the Property”).  Prior to his death, the Deceased carried on the business of an acupressure masseur at the Property, and the Defendant was one of his apprentices.

4.  It is the Plaintiff’s case that after the death of the Deceased, the Defendant refused to return the Property to the Deceased’s estate.  As the Defendant continued to be in alleged wrongful occupation of the Property, the Plaintiff commenced the present action against the Defendant to claim for an order for the delivery up of vacant possession of the Property and mesne profits for the wrongful occupation of the same.

5.  The Defendant’s case can best be summarised in the following paragraphs in the Amended Defence and Counterclaim:

“5(d)   The Defendant took care of the Deceased and his wife during their life time.  Apart from practicing acupressure massage, the Defendant also went to the market, did the cooking, cleaning of the Property and massage the Deceased for one and a half hour from 8:30 p.m. to 10:00 p.m. everyday.  When the Deceased and his wife got sick, the Defendant would stay at the Property overnight to take care of them.

(e)  From 1978 onwards, both the Deceased and his wife have been hospitalized for many occasions.  In 1994, when the Deceased’s wife was very ill, the Defendant took care of her including staying overnight at the hospital.  During the last days of the Deceased’s wife’s life, the Defendant attended her at the hospital.

(f)   After the Deceased’s wife’s death, in gratitude to the Defendant’s care to both the Deceased and his wife, the Deceased verbally represented to the Defendant that she could take possession and have the exclusive right to use of the Property to practice acupressure massage until she retires.  By virtue of his representation, the Deceased has created an expectation and/or belief that the Defendant had and/or would have an interest in the Property.

(g)  On the basis of such expectation and/or belief, the Defendant had acted to her detriment by:-

(i)  Taking care of the Deceased until the day he died;

(ii)  Settling all the utilities expenses, management fees, rates and other expenses of the Property before the Deceased died;

(iii)  Settling all the utilities, management fees, rates and other expenses of the Property after the Deceased died.

(h)  In the circumstances, the Defendant had obtained a life interest in the Property either during the Deceased’s life time and/or right after the Deceased’s death.  The Defendant is therefore entitled to occupy, use and/or take exclusive possession of the Property after the Deceased’s death.”

6.  According to Mr. Ho, counsel for the Defendant, his client is seeking to rely on the doctrine of proprietary estoppel or common intention constructive trust to establish an equitable interest to occupy the Property until the retirement of the Defendant.  Further, after the death of the Deceased on 26 November 1996, the Defendant had settled various expenses in respect of the Property in the total sum of $141,130.80, including management fees, rates, water charges, contribution for the maintenance of the common parts of the building and the maintenance and repair costs relating to the Property.  The Defendant therefore counterclaims against the Plaintiff for a declaration that the Defendant was entitled to occupy the Property until she retired and the repayment of the expenses that she had incurred throughout the years.

7.  By way of the amendments of the pleadings introduced by the parties in the course of the trial, there are also limitation issues as to:

(a)  whether the Plaintiff is entitled to claim for mesne profits for the alleged wrongful occupation of the Property in respect of the period earlier than 19 April 2000, which was 6 years before the commencement of the claim?; and

(b)  whether the Defendant is entitled to counterclaim for the expenses incurred by her outside the limitation period?

8.  In the earlier stage of the proceedings, the Plaintiff had applied for summary judgment against the Defendant.  One of the main issues in that application was whether the Defendant was entitled to rely on the alleged detriments pleaded in the then Defence and Counterclaim to establish the necessary grounds of defence.  In the judgment of Deputy Judge Chow handed down on 6 November 2006, the learned judge held that as the Defendant counterclaimed for the repayment of utilities and other expenses, the Defendant considered these payments as loans and not as contributions to the Property.  As such factor would negate the application of the doctrines of proprietary estoppel and common intention constructive trust, the Defendant could not rely on those detriments to oppose the Plaintiff’s claim.  However, since there was a triable issue as to whether the Defendant took care of the Deceased in reliance of the conversation in 1994, the learned judge granted the Defendant unconditional leave to defend the Plaintiff’s claim.

9.  In the witness statement filed by the Defendant in June 2008, the Defendant revealed for the first time that she had actually retired in mid-2006.  The Property had since been left vacant and she only visited the Property occasionally.  By a consent order dated 24 June 2008, the Defendant agreed to deliver vacant possession of the Property to the Plaintiff and the same was done on 5 July 2008.  On 30 June 2008, the Plaintiff also took out an application for summary judgment against the Defendant on liability to pay mesne profits for the use of the Property from mid-2006 until 5 July 2008 to be assessed.  In the hearing before HH Judge Leung on 16 September 2008, solicitor for the Defendant confirmed that: (i) the Defendant only claimed the right to occupy the Property until she retired rather than any life interest to use the Property as suggested in the then existing pleading; and (ii) the Defendant was not entitled to remain in possession of the Property after her retirement in mid-2006 and she was liable to pay mesne profits to the Plaintiff for the use of the Property after her retirement.  Based on such confirmations, the learned judge ordered the Defendant to pay mesne profits to the Plaintiff at the rate to be assessed and for the period from the date when the Defendant retired in mid-2006 as may be found by the trial judge until 5 July 2008.

10.  Having outlined the background and the issues of the case, I then turn to the evidence adduced by the parties at the trial.

Evidence at the trial

(i)      The witnesses for the Plaintiff’s case

11.  There are 5 witnesses for the Plaintiff’s case at the trial: the Plaintiff himself, Madam Sze Grace May Ling (“Madam Sze”) and Madam Ma Lee Lee (“Madam Ma”) who are the two sisters of the Plaintiff by blood, Madam Chan Mei Li (“Madam Chan”) who is the foster-daughter of the Deceased and Madam Chong Chi Yan Winnie (“Madam Chong”) who is Madam Chan’s daughter.

12.  One Madam Yu Sui Yee (“Madam Yu”) was the mother of the Plaintiff, Madam Sze and Madam Ma.  After giving birth to these three children, Madam Yu “married” the Deceased in 1954.  During their childhood, the children lived with the Deceased and they became the adopted son and daughters of the Deceased.  Subsequently, the Deceased and Madam Yu separated and Madam Yu emigrated to the United Kingdom with the children.  The Deceased later “married” one Madam Lam Yee Ping (“Madam Lam”).  At this stage, it is uncertain whether these marriages were legal or just customary marriages.

13.  Becoming an adopted son of the Deceased, the Plaintiff changed his name using the surname of the Deceased.  However for the purpose of emigrating to the United Kingdom, the Plaintiff had to use the original name stated in his birth certificate, and that was why the Plaintiff had to change his name back to the original one with the surname “Marr”.  The Plaintiff has stayed in the United Kingdom most of the time, but he would visit the Deceased every time when he was back in Hong Kong.

14.  After emigrating to the United Kingdom, Madam Sze and Madam Ma came back to Hong Kong from time to time.  Madam Ma actually moved back to Hong Kong in 1989.  The three children treated the Deceased as their father, and they, in particular Madam Ma, did pay regular visits to the Deceased and his wife (Madam Lam) prior to their death.  In support of their evidence in this regard, they also produce some photographs showing that the family had dined together in some restaurants prior to the death of the Deceased and his wife.  When the Deceased’s wife, Madam Lam, was seriously ill in 1994, Madam Sze, Madam Ma and Madam Chan took care of her in hospital.  According to the Plaintiff’s witnesses, the adopted and fostered children had always maintained a warm and cordial relationship with the Deceased and Madam Lam.

15.  When the Deceased died in 1996, the Plaintiff, Madam Sze and Madam Ma attended the funeral of the Deceased as his children, and they paid for the expenses of the funeral.  During the funeral, Madam Ma asked the Defendant to return the Property to the estate of the Deceased, but the Defendant refused.  That conversation took place in the presence of the Plaintiff. 

16.  According to the Plaintiff’s witnesses, the Deceased did not tell them that he had granted the Defendant the right to use the Property for her business until she retired.  Further, the Deceased was a well-planned and careful person, and so they do not believe that the Deceased would have granted such right to the Defendant without proper documentation.   It was also inauspicious for a traditional Chinese like the Deceased to foretell about death, and so the granting of right alleged by the Defendant was something which was quite out of character of the Deceased.  After the death of the Deceased, the title deeds of the Property were found in the safety box of the Deceased.

17.  In my judgment, the evidence of the Plaintiff’s witnesses is not particularly helpful in determining the main issue of the present case, which relates to the contents of the conversation between the Deceased and the Defendant in 1994.  As they were not present in the conversation, they do not know what had actually happened at that particular time.  However, there are still some factual disputes between the parties, in particular those relating to the relationship between the Deceased and his adopted children before his death and whether Madam Ma had made a demand for the return of the Property during the Deceased’s funeral in 1996.  As I will further elaborate in the latter part of this judgment, I have some reservation about the reliability of the Defendant’s evidence.  Further, there are also photographs to support the evidence of the Plaintiff’s witnesses about the good relationship between the Deceased and his adopted children, and so I prefer to accept the evidence of the Plaintiff’s witnesses on the balance of probabilities.

(ii)     The witness for the Defendant’s case

18.  The Defendant is the only witness for her case.  She is now aged 77, and she formerly worked as a cashier in a restaurant.  In about 1977, the Defendant had constant headaches and sleeping problem and so she consulted the Deceased for treatment.  The Defendant then became interested in learning acupressure herself, and after persuading the Deceased for some time, she became an apprentice of the Deceased in 1978.  In return for the Deceased agreeing to take her up as one of his apprentices, the Defendant promised to take care of the Deceased for the rest of his life.  After completing her apprenticeship in 1979, the Defendant worked for the Deceased in his practice.  She provided acupressure massage services to the Deceased’s clients who paid the service fees directly to the Deceased.  After deducting the Defendant’s share for her contributions to the utilities expenses, management fees, rates and other expenses of the Property and her costs of the meals, the Deceased would pay the balance to the Defendant as remunerations.  She also cooked dinner for the Deceased and his wife, and she would give a massage to the Deceased after dinner almost everyday.

19.  According to the Defendant, she took care of the Deceased when he was hospitalised on two occasions in 1984 and 1992.  The Deceased’s wife was diagnosed with cancer in 1992, and the Defendant took care of her until she died in 1994.  According to the Defendant, the Deceased’s family members including the Plaintiff’s witnesses did not take much care of the Deceased and his wife in their final years.  The Deceased was also unhappy with the Plaintiff after the latter changed his name back to his original name in the birth certificate.

20.  After the death of the Deceased’s wife and on one evening in 1994, the Deceased had a conversation with the Defendant after dinner.  During the conversation, the Deceased showed his appreciation for the Defendant in taking care of his wife during her final days.  As he was old, he would like to give the Property to the Defendant upon his death.  The Defendant replied that as she had a flat herself, she did not want to accept such a gift from the Deceased.  The Deceased then told her that, upon his death, the Defendant could continue to use the Property for her business for as long as she liked.  After that, the Defendant could dispose the Property in her own discretion.  The Defendant replied by indicating that she would then donate the Property to a charity, and the Deceased agreed with such suggestion.  The Deceased also mentioned that he would later attend a solicitors’ firm to execute the necessary documents to transfer the Property to the Defendant.

21.  After such conversation but on the same evening, the Deceased asked the Defendant to go to the Property half an hour earlier on the working days to prepare breakfasts for the Deceased.

22.  After that evening, the Defendant had not discussed with the Deceased which charity should ultimately receive the Property.  The reason for this, according to the Defendant, was that the Deceased had not executed the necessary legal documents to transfer the Property to her.

23.  It is the Defendant’s clear understanding that the promise that the Deceased made in 1994 was a gift to her.  She does not understand the gift to be a bargain with her for taking care of the Deceased for the rest of his life or preparing breakfast for the Deceased everyday.  In any event, the Defendant had already promised to take care of the Deceased when he agreed to take her up as his apprentice in 1978.  Being a loyal apprentice, the Defendant would honour her commitment made to the Deceased back in 1978.

24.  The Defendant denies that the Plaintiff or any of his representatives had ever demanded her to return the Property until she received the demand letter from the Plaintiff’s solicitors dated 20 June 2005.

25.  Despite her age, the Defendant experiences no difficulty in giving evidence in the witness box.  She can provide a complete answer to nearly every question put to her.

26.  Yet, I do have some difficulty with her testimony.  According to her evidence at the trial, she had not retired in 2006 and she went back to the Property to practise as an acupressure masseur from time to time until 2008.  This is quite different from what she said in her witness statement, in which the Defendant stated that she had retired in 2006 and the Property had been left vacant ever since.  The Defendant’s testimony is also inconsistent with the concession that the Defendant’s solicitor had made in the hearing before HH Judge Leung on 16 September 2008.  During that hearing, the Defendant’s solicitor confirmed that the Defendant had retired in 2006.  The Defendant explains that such inconsistency was caused by a miscommunication between her then solicitor and herself, and she blames her solicitor for misunderstanding her instructions.  She insists that her testimony given at the trial is the truth.  However, I cannot accept that the Defendant’s solicitor could have made such a serious mistake in taking the instructions from his client.  In fact, the contents of the witness statement had been interpreted to the Defendant before she was asked to sign to confirm its contents.  Hence in my judgment, such inconsistency casts a serious doubt on the reliability of the Defendant’s evidence.

27.  There is also a side issue relating to the actual retirement date of the Defendant.  Based on my judgment below, it is not necessary for the court to make an express finding about the retirement date of the Defendant.  However if a contrary view is taken elsewhere about the liability of this case and the actual retirement date becomes a relevant issue, I would, in view of my reservation about the reliability of the Defendant’s evidence, just adopt the date of cessation of the Defendant’s business in the business registration record, i.e. 30 September 2005, as the actual retirement date of the Defendant.

28.  Further, the Defendant is not clear about the exact interest given to her under the alleged promise.  In her witness statement, she only claimed that the Deceased had agreed to let her to use the Property for her practice as an acupressure masseur until she retired.  But this is quite different from her testimony at the trial, in which she alleges that she could occupy the Property for as long as she liked, and after that she could donate the Property to a charity.  In other words, the Deceased’s estate had no residual interest in the Property.  Such ambiguity also appears in the pleadings.  In the original Defence and Counterclaim filed on 5 June 2006, the Defendant counterclaimed for the right to occupy the Property for her life time.  Whereas in the amendments introduced on 7 August 2009, the Defendant only asks for the right to use the Property until she retired.  It seems that the Defendant is unclear about the exact contents of the conversation in 1994, and this also undermines the creditability of the defence case.

29.  Based on such observations, insofar as there is any inconsistency in the testimonies between the witnesses of the respective parties, I prefer to accept the evidence of the Plaintiff’s witnesses on the balance of probabilities.

The equitable principles relied on by the Defendant

30.  Having dealt with the facts, I then turn to legal principles involved in this case.  As I see it, the main issue here is whether the Deceased had acquired any equitable interest in the Property by way of the conversation in 1994.

31.  The starting point is s. 5 of the Conveyancing and Property Ordinance, Cap. 219 which reads as follows:

“5.(1)  Subject to section 6 –

(a)  no equitable interest in land can be created or disposed of except by writing signed by the person creating or disposing of the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law;

(b)  a declaration of trust respecting land or any interest therein shall be manifested and proved in writing signed by the person who is able to declare such trust or by his will.

(2)   This section does not affect the creation or operation of resulting, implied or constructive trust.”

32.  As the Deceased had not executed any document in transferring any interest in the Property to the Defendant, the Defendant can only obtain an equitable interest to occupy the Property by way of  operation of law or resulting, implied or constructive trust.  As I have mentioned above, the Defendant is seeking to rely on the doctrines of proprietary estoppel and common intention constructive trust to establish such interest.  In other words, the Defendant is seeking the assistance of equity.

33.  In equity, there is a distinction between completely and incompletely constituted trusts.  As the Deceased had not assigned any interest in the Property to the Defendant in writing or executed a written declaration of trust, the oral promise given in the conversation in 1994 could, at most, amount to an incompletely constituted trust.  For such kind of trust, beneficiaries who have given value can enforce it, for equity looks on that as done which has been agreed to be done.  An imperfect conveyance for value will therefore be treated as a contract to convey, and the court will see that it is perfected.  But volunteers cannot enforce an incompletely constituted trust, for there is no equity to perfect an imperfect voluntary trust.  That is why we have the maxim: equity will not perfect an imperfect gift (see: Snell’s Equity, 31 ed., paras. 20-31 to 20-38).

34.  There are nevertheless exceptional circumstances where an imperfect gift may be complete in equity.  Amongst these exceptions, one is application of the doctrine of proprietary estoppel (see: Snell’s Equity, paras. 10-15 and 22-13) and the other one is the creation of a common intention constructive trust (see: Snell’s Equity, paras. 22-37 to 22-44), which are the two grounds of defence relied on by the Defendant.

(i)  Proprietary estoppel

35.  I first deal with the defence of proprietary estoppel.  A statement of the elements of such doctrine can be found in para. 10-16 of Snell’s Equity:

“‘If A, under an expectation created or encouraged by B that A shall have a certain interest in land thereafter, on the faith of such expectation and with the knowledge of B and without objection from him, acts to his detriment in connection with such land, a Court of Equity will compel B to give effect to such expectation.’  This remains the most important and authoritative modern statement of the doctrine although it must now be qualified by the proposition that the relief granted by the court must be proportionate to the detriment suffered and that the court is not always required to satisfy his or her expectation by awarding the promised or expected interest in land.”

36.  The issue in the present case is whether the Defendant had acted to her detriment in connection with the Property on the faith of the promise given by the Deceased in 1994.  Relating to the requirement of detriment, the authorities show that it is not a narrow or technical concept.  The detriment needs not consist of the expenditure of money or other quantifiable financial detriment, so long as it is something substantial.  The requirement must be approached as part of a broad inquiry as to whether repudiation of an assurance is or is not unconscionable in all the circumstances.  There must also be a casual link between the assurance and the detriment which is to be judged at the moment when the estopped party seeks to go back on the assurance (see: Snell’s Equity, at para. 10-19).

37.  In the earlier decision by Deputy Judge Chow mentioned in paragraph 8 above, the learned judge has already ruled that the Defendant cannot rely on certain alleged detriments to establish the defence of proprietary estoppel.  In paragraph 5(g) of the then Defence and Counterclaim (which has not been revised in the subsequent amended pleading), the Defendant pleaded that, in reliance on the Deceased’s promise made in 1994, she acted to her detriment by: (i) taking care of the Deceased until he died; and (ii) paying for the utilities and other expenses relating to the Property both before and after the death of the Deceased.  But the problem is that the Defendant counterclaims against the Plaintiff for the repayment of the utilities and other expenses.  In the earlier application for summary judgment, Deputy Judge Chow ruled that the Defendant cannot rely on the payment of utilities and other expenses as a detriment.  In making such decision, the learned judge quoted the following passage in Snell’s Equity at para. 22-43:

“ …… Further, the payment must have been intended as a contribution and not, e.g. as a loan which has been applied towards the purchase price.”

38.  By making a demand for the repayment of these expenses and not pleading her case on counterclaim in the alternative, the Defendant must have intended these payments as loans and not as contributions to the Property.  Hence, the learned judge held that the Defendant cannot rely on these alleged detriments in establishing the defence of proprietary estoppel.  Obviously, the judgment of Deputy Judge Chow is binding on this court by reason of the doctrine of res judicata.  Even if the decision is not binding, there is no reason for me to disagree with the reasoning of the learned judge.

39.  However in my judgment, what is most fatal to the Defendant’s case is that there is no causal link between the Deceased’s alleged promise made in 1994 and the detriments claimed by the Defendant.  According to the Defendant’s pleaded case, she relied on the Deceased’s promise and acted to her detriment by taking care of the Deceased until he died and paying the expenses of the Property.  However, this is not the evidence of the Defendant at the trial.  According to her oral testimony, she had already made a solemn promise to the Deceased to take care of him for the rest of his life when the Deceased agreed to take her up as one of his apprentices in 1978.  Hence, she would have taken care of the Deceased for the rest of his life irrespective of the promise made in 1994.  Further, the Defendant understands that the promise was a gift to her and it was not a bargain for her to take care of the Deceased or to prepare breakfasts for him in the mornings.  In such circumstances, the Defendant had not acted to her detriment in reliance of the assurance, which is an essential requirement for the application of the doctrine of proprietary estoppel.

40.  In his final submission, Mr. Ho, counsel for the Defendant, tries to rely on the case of Jennings v Rice [2002] EWCA Civ 159 and argues that despite the imperfection of the gift in the present case, equity should intervene to grant a limited right to the Defendant to occupy the Property until her retirement.  This would be a remedy proportional to the expectation of the Defendant.

41.   I cannot accept such argument.  As I see it, Jennings v Rice is only authority for the following proposition stated in the headnote of that judgment:

“Once the elements of proprietary estoppel were established an equity arose.  The value of that equity would depend upon all the circumstances including the expectation and the detriment.  The task of the court was to do justice, and the most essential requirement was that there should be proportionality between the expectation and the detriment.” (emphasis added)

42.  I have to stress that equity would only arise if the elements of proprietary estoppel are established.  One of the elements of such doctrine is that there must be some causal link between the promise given and the detriments of the claimant, although the promise relied upon may not have to be the sole inducement for the claimant’s conduct.  Once the claimant can rely on the doctrine, the court can then take into account matters such as expectation and detriment of the claimant and apply the proportionality principle to determine how best to satisfy the claimant’s equity.

43.  In the present case, it is clear from the evidence that the Defendant, in taking care of the Deceased, was only discharging her duty as an apprentice of the Deceased.  This was her own understanding, and this was the case both before and after the Defendant made the promise in 1994.  In fact, the evidence shows that the work performed by the Defendant was more or less the same.  The Defendant might have to go to the Property half an hour earlier to prepare breakfasts, but since the Deceased’s wife had already passed away, the overall volume of work that she performed for the Deceased was more or less the same.  What is more important is that the Defendant confirms that the promise was a gift by the Deceased to her as a token of appreciation of what the Defendant had done in the past, and such gift had played no part in the work later performed by the Defendant as an apprentice of the Deceased.  In other words, there was no inducement at all.

44.  Further, Mr. Ho relies on the case of Wayling v Jones (1995) 69 P & CR 170 and submits that the proper question to be asked in respect of the issue of reliance should not be: “would you have done the extra work if the Deceased never made the promise to you?”  Instead, Mr. Ho says that the proper question to be asked should be: “what would you have done if the Deceased, having made his promise, told you that he did not propose to implement them?”  As this question has not been put to the Defendant, the Plaintiff fails to discharge the burden of proof that there was no reliance.

45.  As I see it, there is one clear distinction between the facts in Wayling v Jones and those in our present case.  In Wayling v Jones, the plaintiff cohabitee remained with and worked for the deceased for 16 years in return for living expenses and pocket money only.  The deceased promised to leave a hotel property to the plaintiff by will.  However, prior to the death of the deceased, the specific hotel property named in the will was sold and replaced by a different property.  The issue in that case was whether the plaintiff could rely on proprietary estoppel to claim the replacement property under the will.  During the examination in chief of the plaintiff, the following question was asked: “what would you have done if the deceased had told you that he was no longer prepared to implement his promise?”  The plaintiff replied that he would have left the deceased.  It was because of this particular answer that the English Court of Appeal held that there was reliance.

46.   In my judgment, the merits of the Plaintiff’s case here should not depend on whether one particular question has been asked at the trial.  In fact, the Defendant has indicated, in no uncertain term, that she regarded the promise as a gift for what she had done for the Deceased and his wife in the past, and she would have continued to take care of the Deceased, including preparing breakfasts and performing other related works, even if the Deceased had not made the promise in the conversation in 1994.  The Defendant emphasises that she was a loyal apprentice and she would honour her commitment made as an apprentice of the Deceased back in 1978.

47.  The Defendant’s counsel has tried to salvage his client’s case during re-examination of the Defendant.  He tries to establish that part of the reason why the Deceased continued to take care of the Deceased was because the Deceased was kind to her by promising to give her the Property.  However, one has to look at the evidence of the Defendant as a whole.  The Defendant has repeatedly told that the court that she took care of the Deceased not because of the promise made in 1994.  According to her, the commitment she made back in 1978 was her only consideration.  Hence, even if the Deceased had told her that he would not implement the promise, which was exactly the question put forward in Wayling v Jones, I am quite sure that the Defendant would still have performed her duties as the apprentice of the Deceased.  Hence, based on the Defendant’s own evidence, there was no reliance at all.

48.  As the causal link between the promise and the detriment is missing in the present case, the Defendant cannot rely on the doctrine of proprietary estoppel.

(ii)     Common intention constructive trust

49.  I then turn to the doctrine of common intention constructive trust.  Such doctrine is usually applicable in the context when land is purchased for the use of two or more persons where only one of them is registered as the proprietor of the legal estate.  The common case is of a husband and wife or cohabiting partners who acquire a house for their joint use.

50.  According to Snell’s Equity at para. 22-39, interest may be acquired under a common intention constructive trust under the following circumstances:

“In the absence of an express trust, a claimant may nevertheless acquire an interest if she can establish ‘a common intention between her and the defendant, acted on by her, that she should have a beneficial interest in the property.’  Three related questions arise: first, whether there is an intention that each party is to have an interest in the property; secondly, whether the party not having the legal title has acted to his or her detriment; and thirdly, what is the size of the interest each party is to have?  In all these questions it is relevant, though not essential, that the claimant has made contributions to the purchase price.”

51.  The learned author then went on to discuss the difference between such doctrine and the doctrine of proprietary estoppel:

“The principles which apply are closely akin to those underlying the doctrine of proprietary estoppel.  In both the claimant must have acted to her detriment in reliance on the belief that he would obtain an interest.  In both equity acts on the conscience of the legal owner to prevent him from defeating the common intention.  The distinction between the claimant’s rights under an estoppel and under a constructive trust is now much diminished since both may operate as interests in land and be overreached.  The difference remains, however, that the remedy by which an estoppel is enforced is discretionary, while under a constructive trust the claimant is entitled to her agreed beneficial share.”

Hence, the elements of the two doctrines are more or less the same.  At least, the claimant seeking to rely on the existence of a common intention constructive trust must prove that she (mostly a female in those cases) has acted to her detriment in reliance upon the common intention that she is to take a beneficial interest in the property (see Snell’s Equity at para. 22-41).

52.  There are not many decided cases where the doctrine of common intention constructive trust has been applied in scenarios outside the context of husband and wife and co-habiting partners.  Even if the doctrine may be applicable in the present context, it is clear that the casual link between the assurance and the detriment is similarly missing in the present case.  Hence, the Defendant cannot rely on the doctrine of common intention constructive trust.

53.  In my judgment, there is no room for the intervention of equity in the present case.  It was clear to both the Deceased and the Defendant that the promise made in the conversation was just a gift.  There was no doubt in their minds that the Deceased need to execute the necessary legal documents to complete the transfer of the interest, and yet the Deceased had not done so in the present case.  The Defendant continued to take care of the daily living of the Deceased because she was honouring her commitment made to the Deceased back in 1978, and not because of the promise of the transfer of the gift in 1994.  Under such circumstances, equity should not intervene to complete the imperfect gift and the defence must therefore fail.

54.  In this regard, I do have some sympathy for the Defendant.  She might have done a lot for the Deceased and his wife throughout the years, and according to her, she deserves the gift by the Deceased.  But equity cannot simply intervene on such basis.  I am not here to make a personal judgment as to whether the rewards that she had received throughout the years, for example the skills that she learned from the Deceased as an acupressure masseur and the monetary rewards by performing massages for the Deceased’s clients, are proportional to the work that the Defendant had undertaken throughout the years as an apprentice of the Deceased.  This is not the task of the court.  In my judgment, it would simply be overstretching the doctrines of proprietary estoppel and common intention constructive trust if the Defendant is allowed to rely on these doctrines to oppose the Plaintiff’s claim.

Demand for the return of the Property

55.  The Defendant also seeks to argue that since the Plaintiff had not made a valid demand for the return of the Property prior to the issuance of the demand letter dated 20 June 2005, the Plaintiff is not entitled to claim for any mesne profits in respect of the Defendant’s occupation of the Property prior to such date.

56.  To determine this particular issue, I have to make a factual finding as to whether Madam Ma had made a demand to the Defendant for the return of the Property during the Deceased’s funeral in 1996.  As I have mentioned above, I have certain reservation about the reliability of the Defendant’s evidence, and so I prefer to accept the evidence of the Plaintiff and Madam Ma that the latter had made such a demand during the funeral of the Deceased in 1996.  In fact, the Property is of some value to the estate of the Deceased, and so I find it extremely odd that the Plaintiff and the beneficiaries had not made any demand for the return of the Property prior to the issuance of the demand letter by the Plaintiff’s solicitors on 20 June 2005.  As the Defendant refused to return the Property to the Deceased’s estate, the Plaintiff had to take time to apply for Letters of Administration so as to give him the right to issue the present proceedings against the Defendant.

57.  In his final submission, Mr. Ho for the Defendant seeks to argue that the demand made in 1996 was not a valid demand.  As no letters of administration was granted to the Plaintiff in 1996, the Plaintiff and Madam Ma had no capacity to make the oral demand on behalf of the estate of the Deceased.  However, I doubt whether the Defendant is entitled to argue the point in the absence of such positive averment in the pleading.  In the Amended Defence and Counterclaim, the Defendant only disputes the making of an oral demand in 1996, but the pleading does not go so far as to the extent of saying that the demand, if made in 1996, was an invalid demand.  Without a positive averment, the Plaintiff simply has no opportunity to deal with this particular issue.

58.  In any event, there is no requirement in law for a demand to be made before a plaintiff can claim any damages for trespass.  After the death of the Deceased, the Defendant had no right to stay in the Property and so she should pay for damages for the period of her wrongful occupation.

Quantum of the claim and the issue of limitation

59.  By reason of the 6 years’ limitation period and the decision of Mr. Recorder Shieh SC in Yu Siu Cheuk v Realray Investments Limited, unreported, HCA 277/2007 (decision on 31 March 2009), the Plaintiff accepts that he is only entitled to claim for mesne profits in the period from 19 April 2000, which was 6 years prior to the commencement of the Writ, to 5 July 2008, which was the date of the delivery up of vacant possession of the Property.  The parties also do not dispute the valuation of rent during the relevant period as contained in the surveyors’ report prepared by Mr. Kenneth Cheung of Citiland Surveyors Limited dated 27 February 2009.  The quantum of the mesne profits can therefore be assessed as follows:

60.  In assessing the quantum of the claim, I am of the view that the Plaintiff should give credit to the Defendant for all the expenses that the Defendant had incurred in respect of the Property.  Obviously, it was the duty on the part of the Plaintiff as the owner of the Property to pay for the management fees, rates and the contribution for the maintenance of the common parts of the building.  In my judgment, the Plaintiff will be unjustifiably enriched if no such credit is given.

61.  The management fees and rates paid by the Defendant on behalf of the owner the Property amount to the sums of $48,560 and $30,825 respectively.  The Defendant agrees that she is not entitled to counterclaim against the Plaintiff for the water charges as the water was consumed by the Defendant herself.  In the bundle of documents for trial at page 266, there is a notification for payment of contribution for the maintenance of the common parts of the building.  I am prepared to give credit to the Defendant in the sum of $2,240 as the contribution made by her on behalf of the owner of the Property.  Apart from that, I am not sure about the details of the other decoration expenses paid by the Defendant and so no further credit will be given.  The quantum of the Plaintiff’s claim is therefore reduced to $640,800 ($722,425 - $48,560 - $30,825 - $2,240).

62.  Hence, I grant judgment in favour of the Plaintiff in the sum of $640,800 and dismiss the counterclaim.  I also make an order nisi that:

(i)      there be interest on the said judgment rate at the rate of 8% per annum, which is the existing judgment rate, from 19 April 2006, which was the date of the Writ, to the date hereof and thereafter at judgment rate; and

(ii)      the costs of the action be to the Plaintiff.

The order nisi shall be made absolute 14 days after the date of the handing down of this judgment.