PUN KAN TAI v. WONG YUE SHUN

DCCJ 13222/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13222 OF 2001

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Ruling

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There are before me two summonses. The plaintiff applies for judgment under Order 19 Rule 7 of the Rules of the District Court. The defendant applies for leave to file and serve a defence, and for further directions.

2. The plaintiff sues as the administrator of the estate of Wong Yun Sheung, his late wife, ("the deceased") pursuant to Letters of Administration granted on 7 May 1999. The defendant is the father of the deceased. Originally the defendant was the tenant of Flat 8, 3/f, On Chiu House (Block 6) (including the planter/planter box, appertaining thereto, if any), Cheung On Estate, No. 1 Tam Kon Shan Road, Tsing Yi ("the suit property"). It was a public housing flat. The plaintiff and his wife and children lived there, in family with the defendant and his wife. In about 1998 the Housing Authority introduced a scheme for selling public housing flats to the tenants thereof, and under this policy the flat was sold to the defendant and the deceased in their joint names, some time in 1998. The deceased herself died on 9 December 1998.

3. The plaintiff claims that there was an oral trustee agreement made in about 1998 between the deceased and the defendant, whereby the defendant was appointed as a trustee jointly with the defendant as co-owners of the suit property to hold on trust the deceased's shares and interests in the property for and on behalf of the deceased. I think this must be intended to mean that the defendant holds his own shares and interests as trustee for the deceased. In other words, the flat was bought for the deceased, but in the joint names of herself and her father. In any event he now seeks a declaration that such a trust exists between the deceased and the defendant and for an order that, subject to the consent of the Housing Authority, the defendant shall transfer all his interests and shares in the property to the estate of the deceased.

4. The plaintiff has filed an affirmation to the effect that he put up the down payment and paid off the monthly mortgage repayments of the suit property on behalf of and for the benefit of the deceased who was a housewife and who had no income of her own. He has produced various bank statements in support. The defendant denies that any oral trustee agreement existed though he does not dispute that the plaintiff paid the monthly repayments. There is some dispute about the origin of $60,000.00 of the down payment ($96,300.00 in total) which the defendant says represents a figure which the deceased owed to her younger sister. However what the defendant is actually saying about this is rather unclear. The plaintiff says that in fact this money was repaid to the younger sister and not used as part of the down payment.

5. The defendant argues that under Order 19 Rule 7 the court cannot receive evidence but must give judgment according to the pleadings alone; see Paragraph 19/7/11 of the Hong Kong Civil Procedure, 2001. Further, the court has a discretion not to enter judgment, and to extend time for the defendant to file a defence; see Paragraph 19/7/13; and it is not the practice of the court to make a declaration of right in default of defence; Paragraph 19/7/14.

6. The defendant further argues that the plaintiff has only pleaded an oral trust agreement. By section 5(1)(b) o the Conveyancing and Property Ordinance, Cap. 219, "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." The plaintiff is therefore not entitled to a judgment on the pleadings. He might be entitled to sue in his own name on the basis of a resulting or constructive trust but none is pleaded.

7. The plaintiff on the other hand argues that the court may enforce the performance of a gratuitous promise through the principle of equitable or promissory estoppel and that doctrine should be applied here. He argues that the defendant is estopped from alleging that the plaintiff has no interest in the property. I do not quite understand this. The plaintiff claims no interest, in his own right, in these proceedings. As Administrator he obviously has a interest because the deceased is one of the registered owners; or so I understand, though I have not seen any conveyance or any land search.

8. As to the evidence, the plaintiff argues that the defendant has not shown a triable issue as required by Murjani v Bank of India [1990] 1 HKLR 586, a decision on Order 14 proceedings.

9. The Writ was issued on 23 August 2001. The defendant filed a notice of intention to defend. No defence was filed but on 1 February 2002 the plaintiff applied for a pre-trial review. Why no application was made earlier for judgment in default of defence is not clear. In any event when the matter came before the Master the defendant was in person. The Master gave the defendant leave to file an affirmation with a draft defence attached. The defendant then obtained legal aid and his solicitors filed a Notice to Act and the summons applying for leave to file the defence. The affirmation was also filed. The draft defence denies the existence of an oral trust agreement and further relies on the provisions of section 5 of the Conveyancing and Property Ordinance.

10. The defendant was not represented in the early stages of this action. The plaintiff could at a much earlier stage have made this application but did not. He went ahead with a view to getting the matter set down for trial. Once the matter did come before the Master, the defendant obtained representation and put forward a defence. These circumstances themselves suggest that he should be allowed to defend, without any consideration of the affirmation evidence.

11. Now that such evidence is before the court, it is all rather unsatisfactory. It is true that the defendant's case on the money which he alleges was lent by the sister is unclear. Apart from that, he does not deny that the rest of the money came from the plaintiff. However the plaintiff's case seems rather to be that he put up the money himself in circumstances which would normally give rise to a constructive or resulting trust in his own favour and not that of his wife or her estate. It is often difficult even after trial to decide the real facts in this kind of family situation.

12. It seems to me that this is in any event the kind of case where the discretion of the court must be exercised in favour of the defendant, and he be allowed to defend.

13. The plaintiff's summons is therefore dismissed with costs to the defendant in any event. There will be an order in terms of the defendant's summons. Since the judgment is to be handed down, the costs orders will be nisi.