SUM KAM WUN v. LEE SAI MUI and Others

1990 No.A7872

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. At the trial I held that the plaintiff had an equity in the property in question. I left open the issues of the extent of the equity and how it can be satisfied. This is the hearing of such a determination. I have heard further evidence from the plaintiff and the surveyor called on behalf of the defendants.

Having considered the evidence called at the previous hearing and today, I think the position is this.

2. The plaintiff married the 1^st defendant's daughter in 1956 and started to live in Ma Wan. He and his family were later allowed by the 1^st defendant to stay in House No.34 of Ma Wan Main Street. This was free of charge or rent.

3. At a later stage the plaintiff demolished the ruined and deserted hut at House No.28 and started to build a stone hut there. This was done, as I found, without the express approval of the 1^st defendant, but as I also found, with her knowledge. In fact after the stone hut was built, the plaintiff and his family moved in and made use of the place as a restaurant and residence. The restaurant was operated from the 1960s to 1986. The 1^st defendant worked for the plaintiff, helped him in his business, cooked for him, and did a lot of work for him. She also lent him money from time to time when he was in financial difficulty. Hence, the 1^st defendant would be taken as allowing him, the plaintiff, to build the stone hut, stay and operate his business there.

4. The plaintiff at the previous trial did not satisfy me as to how much he spent on the stone hut, although he mentioned $290,000. I found that it could not be as much as that. Today, having heard the plaintiff, I am still not satisfied. He is still not able to tell me precisely how much he spent on the stone hut and/or the land. He said he had done about 80% of the work working day and night for three to four years. He hired one or two workers paying them $20 per day. He brought building materials onto the site, he being a building contractor. Yet he was not able to tell me how much he had spent on the land and on the material in monetary terms.

5. The plaintiff told me further that the 1^st defendant did not promise him anything or how long he could stay there. Anyway, he said on the last occasion, that his wife deserted him in 1966, but he and his family were allowed to continue to live and work there, obviously with the 1st defendant's knowledge and permission and in fact active assistance.

6. Mr Warren Chan, Q.C. for the defendants submits that the plaintiff's equity was in the hut only, there being no promise of any kind to him. He argues that the plaintiff's equity had already been satisfied since he had been staying there rent free for over 30 years.

7. In my view, although the 1^st defendant did not expressly promise the plaintiff anything or how long he could stay there, it is clear that even after her daughter had left, the 1^st defendant had treated the plaintiff as part of her family. If the plaintiff did not do anything to the land, he would have been a mere licensee whose licence was terminable by reasonable notice. However, because of the plaintiff's improvement to the land in building the stone hut and improving it from time to time and, more importantly, the 1st defendant's own conduct towards the plaintiff throughout the years, I think it is arguable that this has created a reasonable expectation on the part of the plaintiff that he can stay there as long as he lives. Taking the most generous view of the matter, that, I think, was probably the intention of the 1^st defendant. Although there was no express promise, it is clear that the plaintiff was led to this belief by the 1st defendant's conduct and treatment of him for the last 30 years. I would therefore hold that the plaintiff's equity is that he can stay there for the rest of his life. I do not think the plaintiff's equity is satisfied by the rent free occupation for those years.

8. I accept the report of the surveyor that the stone hut now is in such a poor condition that the value it gives to the whole land is negative. I do not think I should give any value for this part of the equity. I would however accept the suggestion that as in Baker v. Baker [1993] 25 HLR 408 the plaintiff's equity can be satisfied by paying him a sum which is sufficient to pay for an equivalent accommodation for the rest of his life.

9. The proposal by the surveyor is based on a flat of 700 sq.ft. Although it may seem smaller than the stone hut, it would, in my view, be much better and safer for the plaintiff in the long run. The average rent for such a flat is, according to the surveyor, $7,000 per month. I am given to understand that the multiplier for a man of 78 years would be 8.07. I think this should be adopted to calculate the sum to be paid by the 1^st defendant to satisfy the plaintiff's equity. I would round off the sum to $680,000. The 1^st defendant is to pay this sum to the plaintiff.

10. Counsel also indicates to me that the 1^st defendant is willing to give six months for the plaintiff to move out. I think this is a very reasonable proposal. I shall hear Counsel on the orders to be made.