LAM CHUN MING AND OTHERS v. LAM PO FAI

DCCJ 112/2015

[2018] HKDC 1447

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 112 OF 2015

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JUDGMENT

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Background

1.  This case concerns a dispute over the interests of a property known as Flat 10 on 24^th Floor, Oak House (Block 7) (with planters/planter boxes appertaining thereto), Kwong Yuen Estate, No. 68 Siu Lek Yuen Road, Shatin, New Territories, Hong Kong (the “Property”).

2.  For ease of reference, the 1^st plaintiff be referred as “P1”, the 2^nd plaintiff as “P2”, so on and so forth.  Since P2 passed away on 5 February 2016 after the commencement of this action in January 2015 and Mr Kwong representing P1, P3 to P5 confirmed no instruction to act for the estate of P2 at the pre-trial review on 7 June 2018, P1, P3 to P5 (excluding the estate of P2) shall be referred as “Ps” collectively hereinbelow.

3.  P1 (Lam Chun Ming林振明) and P2 (Kitkamolwat Usanee郭淑賢, deceased) are respectively the father and mother of P3 (Lam Po Chun林保俊), P4 (Lam Po Sang林保生), P5 (Lam Po Chiu林保超), D1 (Lam Po Fai林保輝) and Lam Po Chau林保洲 (“the 7 family members”).  The Property had been occupied and used by the 7 family members since June 1992, initially as a rented public housing unit from the Housing Authority.  P2 was the registered tenant at that time.

4.  On 1 March 2002, D1 purchased the Property from the Housing Authority at the consideration of HK$269,200 and at all material times, is the legal and registered owner of the Property.

5.  D2 (Central Southwood Limited) is the judgment creditor of D1.  On 28 November 2013, at D1 and Lam Po Chau’s request, D2 provided a guarantee in respect of the indebtedness of D1 under a principal loan agreement for a loan of RMB558,060 (the “Loan”) made to D1 (the “Principal Loan Agreement”). Pursuant to the terms of the Principal Loan Agreement and a deed of indemnity dated 28 November 2013, D1 undertook to indemnify D2 for any loss arising from his default in making full and punctual repayment of the Loan.

6.  In breach of the Principal Loan Agreement, D1 and Lam Po Chau failed to repay the Loan.  As a result, D2 had to repay the sum of RMB704,465.03 on their behalf to the lender.

7.  On 29 January 2014, D2 commenced an action against D1 and Lam Po Chau in the District Court under DCCJ Action No 399/2014.

8.  On 21 March 2014, D2 obtained judgment against D1 and Lam Po Chau. D1 and Lam Po Chau were adjudged to pay D2 (a) the sum of RMB 704,465.03; (b) interest on the sum of RMB 558,060 and (c) fixed costs of HK$6,500.

9.  On 8 April 2014, D2 obtained a charging order nisi in respect of the Property.  On 16 May 2014, D2 obtained a charging order absolute in respect of the Property.

10.  On 30 September 2014, D2 issued an originating summons in the District Court under DCMP 2671/2014 (the “DCMP Action”), in which D2 sought inter alia an order for sale of the Property.

11.  On 18 November 2014, P4 and Lam Po Chau sought leave to join as defendants in the DCMP Action and to discharge the said charging orders.  Lam Po Chau subsequently did not proceed since he had been adjudged bankrupt.

12.  On 9 January 2015, P2 and Ps issued the writ of summons (with Statement of Claim endorsed) in the present action originally against D1 seeking a declaration that D1 only has 1/7 interest of and in the Property and that the whole whereof was and is held beneficially by the 7 family members as tenants in common in equal shares based on the trust held by D1.

13.  On 5 June 2015, D1 filed an acknowledgement of service indicating that he did not contest the proceedings. 

14.  On 9 September 2015, D2 filed its defence. Shortly after 21 September 2015, D2 filed an Answer to Request for Further and Better Particulars of the Defence.

15.  On 25 September 2015, P2 and Ps filed their Reply to D2’s defence.

16.  On 22 October 2015, P2 and Ps filed the amended writ of summons with leave, in which Central Southwood Limited was formally joined as the 2^nd defendant (the Statement of Claim attached thereto was exactly the same as the previous version).

17.  At present, the hearing of the DCMP Action has been adjourned sine dine with liberty to restore. Most probably, this is pending determination of the issue of the beneficial interest of the Property in the present action.

18.  Only P1, P3, P4 and Lam Po Chau filed their respective witness statements or affirmations but not P2 and P5. No explanation is given by Mr Kwong for Ps as to why P2 and P5 were unable to file their respective witness statements/affirmations given that P2 only passed away on 5 February 2016 about a year after the commencement of this action in January 2015.  P5 also failed to testify at the trial and no explanation is given.  

Issue In Dispute

19.  P2’s and Ps’ pleaded case is that at the time of the purchase of the Property in 2002, D1 was invited and nominated by his 6 family members to become the sole owner on paper because “only D1 qualified to be the purchaser[1]”.  As such, P2 and Ps claim that D1 was and is a trustee over the Property for the 7 family members.

20.  D2’s pleaded case is that D1 is not a mere sole owner on paper as alleged, but has always been the sole legal and beneficial owner of the Property since the purchase.  In particular, D2 relies on a declaration made by D1 dated 28 November 2013 in which he expressly declared that he was the only legal and beneficial owner of the Property.

21.  In the circumstances, the main issue in dispute is the purported beneficial ownership of the Property as alleged by P2 and Ps..

Applicable Legal Principles

22.  In a dispute over the beneficial ownership of land, the starting point is that the beneficial ownership is the same as the legal title.  The onus is on the person seeking to show that the beneficial ownership is different from the legal ownership[2].  As such, P2 and Ps bear the burden of proof of demonstrating to the court that the beneficial ownership of the Property is different from the legal ownership.

23.  The Statement of Claim and Reply filed by P2 and Ps do not specifically plead the nature of the trust alleged by them. It was only in para. 1(a) of Ps’ Opening Submission that Ps clarified the nature of the trust, i.e. the claim that there is a common intention constructive trust affecting the Property.  Ps do not base their case on resulting trust.  However, the position of P2 is unknown as her estate was unrepresented.

24.  The Court of Final Appeal in para. 28 of the judgment of Luo Xing Juan v Estate of Hui Shui See [2009] 12 HKCFAR 1 approved Lloyds Bank Plc v. Rosset [1991] 1 AC 107 at pg. 132 that:

“The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel”. (emphasis added)

25.  Apart from the proof of the claimant’s detrimental reliance, a constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his own beneficial interest in the property and deny the beneficial interest of another.  In para. 37 of the judgment of Luo Xing Juan’s case, Ribeiro PJ citing Paragon Finance Plc v DB Thakerar & Co [1999] 1 All ER 400 at pg. 409 per Millett LJ further said in para. 38:

“… it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters. The trust is constituted by the claimant’s detrimental reliance on their common intention and the unconscionability of the property owner departing therefrom.” (emphasis added)

26.  To constitute a common intention constructive trust, it is also essential for there to be a common intention on the part of the owner(s) and the claimant(s) regarding their shared beneficial interest in the property: Luo Xing Juan’s caseat para. 39 per Ribeiro PJ.

27.  In the recent Court of Appeal case of Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, Cheung JA identified two situations where a common intention constructive trust may arise and said:

“2.3 The first situation where common intention constructive trust may arise is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially.

2.4 The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. See the judgment of Lord Bridge of Harwich in Lloyds Bank Plc v Rosset [1991] 1 AC 107, 132.

…

18. … “The finding of an agreement or arrangement to share in this sense can only … be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.” (Lloyds Bank Plc v Rosset [1991] 1 AC 107, 132F-G, per Lord Bridge of Harwich)”

28.  The owners' common intention regarding the ownership of their property may change after the acquisition of the property: Re Liu Yi Fang at para. 17 per Anthony Chan J, applying Jones v Kernott [2012] 1 AC 776 at para. 14 per Lord Walker.  This would happen where one party had financed or constructed an extension or major improvement to the property, so that what they had now was different from what they had first acquired (Stack v Dowden [2007] 2 AC 432 at para. 70 per Baroness Hale of Richmond).

29.  In considering whether a common intention constructive trust exists, the court focuses solely on the intention of the parties at the time of acquisition of the asset.  As Viscount Dilhorne observed in Gissing v Gissing [1971] AC 886 at pg. 900 E-F, the court cannot counteract the absence of any common intention at the time of acquisition by conclusions as to what the parties would have done if they had thought about the matter.  If such a common intention is absent, the law does not permit the courts to ascribe to the parties an intention they never had and to hold that property is subject to a trust on the ground that that would be fair in all the circumstances.

30.  Furthermore, in looking at the issue of intention, the court has observed that as a matter of common experience, contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event, especially in the case of “self-serving statements or conduct of the transferor, who may long after the transaction be regretting earlier generosity”.  That rationale is not restricted to evidence in rebuttal of presumptions but embraces any evidence from which an inference of the transferor's intention may properly be drawn: Leung Wing Yi Asther v Kwok Yu Wah [2015] 18 HKCFAR 605 at para. 56 per Stock NPJ.

31.  In the present case, the first and fundamental question is a question of fact, namely whether there an express discussion amongst the 7 family members, prior to the acquisition of the Property, that there was an agreement, arrangement or understanding reached whereby the Property is to be shared beneficially. 

32.  Upon the court’s finding as a fact of such an agreement in favour of P2 and Ps, they still have to prove the following:

(i)   they have acted to their detriment or significantly altered their positions in reliance on the said agreement in order to give rise to a constructive trust; and

(ii)   it would be unconscionable for D1 to assert his own beneficial interest in the Property and deny the beneficial interest of P2 and Ps.

Ps’ evidence

33.  P1 filed his witness statement on 9 November 2017 enclosing his affirmation filed on 24 July 2015, which was adopted by him at the trial.  Basically, his evidence is that there was a promotion scheme (租者置其屋計劃) by the Housing Authority in relation to the sale of the Property in 2002 and that there was a discussion amongst the 7 family members regarding the intended purchase of the Property in 2002 at a family meeting (“Family Meeting”).

34.  D1 is the youngest son of P1 and P2 who was about 20 years old in 2002.

35.  Lam Po Chau testified that it was him who invited P2 to return to the Property to join the Family Meeting for discussion. 

36.  The 7 family members met inside the Property prior to their signing on the application form to purchase the Property from the Housing Authority which was dated 31 December 2001[3] (“Application Form”).

37.  At the Family Meeting, they were given to understand from Lam Po Chau that because of P1’s old age and the poor credit rating of P4, P5 and Lam Po Chau, the bank would not grant the mortgage loan if either of P1, P4, P5 or Lam Po Chau made the application for a mortgage loan individually. P1 testified at the trial that P2 mentioned in the Family Meeting that she did not want to be named as one of the purchasers due to the fact that she was about to be divorced from P1[4].

38.  P4 testified at the trial that P2 further said in the Family Meeting that she intended to apply for social security allowance (綜援) which had an assets limitation (資產限額). Hence, she could not apply for the mortgage of the Property since it would conflict with her application for social security allowance.

39.  P3 stated that as he planned to marry at that time, he intended to purchase a private property and did not want to be named as one of the purchasers.

40.  After they had considered the individual circumstances of each of the 7 family members, D1 was nominated to be the purchaser.  In the Application Form, D1 was described therein as the purchaser (購買人) whilst the remaining 6 family members were all described as licensed occupants (認可住客) and all signed thereon.

41.  Lam Po Chau, who handled the paper work, testified that the choice of mortgagee banks was limited to 2 and the Nanyang Commercial Bank Ltd. would only accept one mortgagor. Eventually, the Nanyang Commercial Bank Ltd was chosen by them as the mortgagee bank financing the sum of $266,000 to be repaid by 300 monthly instalments whilst the purchase price of the Property was $269,2000.

42.  Subsequent to the acquisition of the Property, the 6 family members except P2 continued to occupy and were free to reside therein without rent.  They would share the household outgoings and mortgage repayments in whatever amount they liked.  Some of them even absent themselves from the Property for certain periods or years without paying any sum.

Whether adverse inference arising from P2’s and P5’s failure to testify or put forward any evidence shall be drawn

43.  It is well settled that a court may draw an adverse inference against a party who has failed, without explanation, to call as a witness a person whom he might reasonably be expected to call: British Railways Board v Herrington [1972] AC 877 at pg. 930G-H per Lord Diplock; Chan Sze Yuen v Tin Wo Engineering Company Limited & Ors (unreported, CACV 71/2011, 25 July 2012) at para. 21 per Chu JA; Ip Man Shan Henry & Anor v Ching Hing Construction Co. Ltd & Ors (No. 2) [2003] 1 HKC 256 at pg. 307B-E (para. 155) per DHCJ Lam (as he then was).

44.  Although P2 passed away on 5 February 2016 about a year after the commencement of this action in January 2015, no explanation is given by Mr Kwong for Ps as to why P2 was unable to file her witness statement before her death.  Although there is no evidence if P2 has a will or not, no explanation is given as to why P3 to P5 who are the sons of P2 do not apply for a grant of her estate from the Probate Registry.  Indeed, pursuant to Order 15 r6A(4) RDC, Ps are entitled to apply for an order to represent P2’s estate in the present case even without such a grant.  No explanation is given by Ps too.  In my view, P2’s claim against both D1 and D2 cannot be carried on without an order made under Order 15 r6A(4) RDC[5]. In any event, Mr Kwong accepted that the estate of P2 is regarded as unrepresented in this action.

45.  For P5, he failed not only to file his witness statement but also to testify at the trial without any explanation.   I cannot see any good reason for the court not to draw an adverse inference against both P2 and P5.

46.  In respect of the issue of whether an adverse inference can be drawn against other co-parties namely P1, P3 and P4, Mr Lui for D2 referred me to the following authorities:

(i)   Li Sau Keung v Maxcredit Engineering Ltd [2004] 1 HKC 434 at paras. 28-29 per Le Pichon JA. In that case, the judge held that an adverse inference should be drawn against both of the defendants by virtue of the second defendant’s failure to call its employee as a witness to give evidence;and

(ii)   Chan Sze Yuen v Tin Wo Engineering Co Ltd & Ors (unreported, CACV 71/2011, 25 July 2012), in which the Court of Appeal (at para. 21) upheld the trial judge’s drawing of an adverse inference against all the respondents for the 2^nd respondent’s failure to call their ex-employees as witnesses.

47.  In the present case, I accept that the court is entitled to draw an adverse inference against P1, P3 and P4 by virtue of P2’s failure to file her witness statement coupled with P5’s failure to testify and file his witness statement, since:

(i)   P2 and Ps are of the same camp. A single set of pleadings was filed on all of their behalf, and each of the witness statements and affirmations were filed in support of one pleaded case;

(ii)   P2’s and Ps’ pleaded case expressly referred to P2 and P5 being two of the purported beneficial owners. As such, P5 is a witness which each of P1, P3 and P4 “might reasonably be expected to call” in support of his own case; and

(iii)   Bearing in mind of the burden of proof on P2 and Ps, D2 is deprived of the opportunity to look at P2’s and P5’s respective witness statements and to cross examine P5 at the trial.

Whether there was an agreement, arrangement or understanding reached amongst the 7 family members prior to the acquisition of the Property whereby the Property is to be shared beneficially

48.  Having carefully considered the evidence put forward by P1, P3, P4 and Lam Po Chau regarding the purported trust arrangement, I am of the view that their evidence is unreliable, self-contradictory, and contradicted by Ps’ own pleaded case for the following reasons.

49.  In respect of the date of the Family Meeting, P1 originally claimed to be 31 December 2002.  However, when P1 was confronted with the contemporaneous documentary evidence (i.e. the Application Form), he then changed his testimony and claimed that the Family Meeting was in fact held on 31 December 2001. 

50.  Subsequently, in re-examination, P1 changed his evidence again and claimed that the Family Meeting was held 1 or 2 days before the Application Form was signed on 31 December 2001.

51.  In their examination-in-chief, P3, P4 and Lam Po Chau all changed the date of the Family Meeting to 2 days before 31 December 2001 since all of them had adopted P1’s affirmation filed on 24 July 2015 as their evidence in their respective witness statements.

52.  In respect of whether there were several discussions or one discussion regarding the intended arrangement for purchase of the Property:

(i)   P1 originally claimed in para. 8 of his affirmation filed on 24 July 2015 that there were various discussions between P1, P3, P4, P5, Lam Po Chau and D1 regarding the intended purchase of the Property when they met daily (“我們朝晚見面，我與他們有商量”); and

(ii)   However, in cross-examination, P1 changed his testimony and claimed that there was only one discussion in the Family Meeting held on 31 December 2002 (which he subsequently changed to 31 December 2001 or 2 days before).

53.  In respect of who made payment of the mortgage instalments, there are significant discrepancies between P2’s and Ps’ pleaded case and the respective evidence of P1, P3, P4 and Lam Po Chau, I am of the view that their evidence is in a state of complete chaos:

(i)   P1 claimed in para. 10 of his affirmation filed on 24 July 2015 that all of the monthly mortgage repayments were paid by P2 and P3;

(ii)   However, in para. 6 of the Statement of Claim, P2 and Ps pleaded that D1 also contributed to the repayment;

(iii)   In para. 2(g) of the Reply, P2 and Ps pleaded that the mortgage instalments were “contributed by the parties in this action”.  No elaboration is given as to who “the parties” are, eg whether Lam Po Chau who is not a party herein has also made the contributions;

(iv)   Since P2 had already moved out the Property before the Family Meeting intending to divorce with P1 and to apply for social security allowance (綜援) at that time, there is no reason or it is inherently improbable for P2 to make any mortgage repayments;

(v)   In para. 4 of P4’s affirmation in the DCMP Action, P4 stated that the mortgage instalments were paid via “substantially my own (ie P4) money though occasionally my siblings would also contribute what they could afford”;

(vi)   In para. 6 of Lam Po Chau’s affirmation in the DCMP Action, Lam Po Chau stated that the mortgage instalments were paid were “contributed substantially by my elder brother Lam Po Sang (ie P4) and the other family members”;

(vii)   In para. 5 of P3’s witness statement, para. 5 of P4’s witness statement and para. 4 of Lam Po Chau’s witness statement, they respectively claimed that the mortgage instalments were paid by P3, P4 and Lam Po Chau. There was no mention of payment by P2, P5 or D1;

(viii)   In para. 3 of Lam Po Chau’s Supplemental witness statement, he claimed that the mortgage instalments were paid by P3 and P4.  There was no mention of payment by P2, P5, Lam Po Chau or D1;

(ix)   During cross-examination, P1 originally confirmed that the monthly instalments were only paid by P2 and P3. He also confirmed that D1 did not pay at all (“完全冇俾”).  However, when confronted with the pleaded case in para. 6 of the Statement of Claim, he then changed his evidence that D1 had paid from time to time (“間中有俾”).  He also claimed that it was the eldest son (i.e. P3) who made the most substantial contributions (which contradicts P4’s and Lam Po Chau’s evidence). Finally, he agreed that all of them had a different version of events; and

(x)   During cross-examination, P4 originally confirmed that the monthly instalments were only paid by P2 and P3 (“只係佢哋兩個”).  Subsequently, he changed his evidence and claimed that P1, P4 and D1 had also contributed.  He emphasized that he made the most substantial contributions (which contradicts P1’s evidence).

54.  In respect of who made payment of the utilities bills, I consider that there are again significant discrepancies and contradictions between P2’s and Ps’ pleaded case and the respective evidence of the parties:

(i)   P1 claimed in para. 10 of his affirmation that D1 would make payment of the utilities bills from time to time;

(ii)   However, in para. 7 of the Statement of Claim, P2 and Ps pleaded that “all outgoings paid overwhelmingly by P1, P3 and P4 to the exclusion of D1”.  When confronted, P1 admitted that this statement was false.  P3 admitted that this statement was wrong but failed to provide an explanation;

(iii)   Similarly, in para. 3 of P4’s affirmation in the DCMP Action, P4 stated that the utilities bills were all paid by P1, P3 and P4 “to the exclusion of D1”.  When confronted, P4 claimed that he had remembered incorrectly; and

(iv)   On the other hand, Lam Po Chau claimed in cross-examination that P2 had also made payments of the utilities bills.  In this regard, based on the reason as said in para. 53(iv) above, I consider that it is inherently improbable for P2 to pay any utilities bills.

55.  I am also of the view that save for the bare assertions by Ps regarding their purported intention in respect of the ownership of the Property, Ps have failed to put forward any contemporaneous documentary evidence in support of their case.  In particular, Ps have not put forward any of the following documents which they reasonably ought to have in their possession:

(i)   Bank deposit slips or statements (evidencing the purported payment of the mortgage instalments); such as, bank transfer records from P4 to Lam Po Chau’s bank account or D1’s bank account etc; and

(ii)   Payment slips (evidencing payment of utilities bills). For instance, the CLP bills are issued to P2 but no evidence to show that it was her to settle it.

56.  When P2 and Ps commenced this action in 2015, they should be able to request the relevant banks to produce the banks records for at least 6 years ie back to 2009. But no or unacceptable reason is given by Ps.

57.  On the other hand, P2’s and Ps’ case is contradicted by numerous contemporaneous documentary evidence. These include, inter alia,

(i)   The declaration signed by D1 (paras. 4-5) regarding his sole legal and beneficial ownership of the Property; and

(ii)   The deed of indemnity (para. 2) where D1 warranted that he is the beneficial owner.

58.  In my view, there is no evidence whatsoever put forward by Ps that D1 signed the declaration and the deed of indemnity under duress or undue influence, or that D1 did not understand the terms thereof when he signed these documents.

59.  To sum up, I reject P2’s and Ps’ pleaded case that the 7 family members held the Property in one-seventh (1/7) equal shares of interests. Ps have failed to discharge the burden to establish a common intention of the 7 family members that the beneficial ownership differs from the legal ownership.  At the highest, Ps can only show that the Family Meeting was held on or about 2 days before 31 December 2001, in which the 7 family members agreed that D1 should be the purchaser to purchase the Property from the Housing Authority but nothing more. Even according to Ps’ evidence, there was no discussion as to how the Property would be shared beneficially.  The subsequent conducts of P2 and Ps concerning payments of the mortgage instalments and the utilities bills are insufficient to justify the inference necessary to the creation of a constructive trust.

60.  It is noteworthy that P2 and Ps do not contend or plead alternatively that the beneficial ownership of the Property is in any other form of division or share.  Needless to say, they are bound by their pleaded case.  Indeed, there is no evidence from Ps and Lam Po Chau that there was another or alternative common intention that the Property was owned in any other form of division, such as 1/6 or 1/5 equal shares etc.  In Yau Wah Yau v Commissioner of Inland Revenue[2006] 3 HKLRD 586, the judge found that both sides did not tell the court the whole truth about what had really happened and rejected both versions of the events. Accordingly, he dismissed the plaintiff’s claim on the basis that it had failed to discharge the burden of proving its claim.  Tang JA (as he then was) observed at para. 44 in Yau Wah Yau’s case:

“It is also abundantly clear that where the tribunal of fact is not able to come to a positive decision one way or the other, as is the case in this matter, it is open to it to say that the party which bears the onus of proof has failed to discharge that burden and must therefore be taken to have lost.”

61.  On this basis alone, it is sufficient to have the action be dismissed on the ground of P2’s and Ps’ failure to discharge their burden of proof.

Whether P2 and Ps have acted to their detriment or significantly altered their positions in reliance on the said agreement in order to give rise to a constructive trust

62.  In case I am wrong in the above and shall find as a fact that there was an agreement, arrangement or understanding reached by the 7 family members whereby the Property is to be shared beneficially in one-seventh (1/7) equal shares of interests, I find as a fact that at least P2 and P5 have not acted to their detriment or significantly altered their positions in reliance on the said agreement in order to give rise to a constructive trust.

63.  There is no or very little evidence to show that P2 and P5 have contributed to the mortgage instalments or the utilities expenses.  Further as discussed above, I am entitled to draw adverse inference against them.  As a result, P2’s and P5’s claims are bound to fail.  In that case, I doubt very much that the court should then decide the remaining 5 family members to hold the Property beneficially in one-seventh (1/7) or one-fifth (1/5) equal shares of interests especially when P2 and Ps never plead alternatively that the beneficial ownership of the Property is in any other form of division.

64.  It is unnecessary for me to deal with D2’s defence of the clean hand doctrine.

Conclusion

65.  In the circumstances, I shall dismiss the action against D2.  Regarding the action against D1, even though D1 filed an acknowledgement of service not contesting the proceedings, I refuse to grant the declarations as sought against D1 and hence, the action against D1 be dismissed too.  For the avoidance of doubt, even though the estate of P2 is unrepresented at the trial, her claims against D1 and D2 be dismissed.  

66.  As costs shall follow event, I make an order nisi that:

(i)   no order as to costs as between P2, Ps and D1;

(ii)   P2 and Ps shall pay costs with all costs reserved, if any, to D2 with certificate for counsel to be taxed if not agreed; and

(iii)   which becomes absolute unless any of the parties apply to vary by summons within 14 days. 

67.  Lastly, I thank both Counsel and solicitor for their assistance to me.