SZETO CHAK MEI v. CHAN LAM SHAN AND OTHERS

HCMP 836/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 836 OF 2012

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D E C I S I O N

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1. I am not satisfied that the plaintiff’s case is so clear on the facts that the defendants must be regarded as being in unlawful occupation of the Property.

2. On the evidence filed at this stage, I am satisfied that the factual assertions made by the 1^st defendant (“Nancy”) are believable, and that  these raise triable issues of fact and law, as to whether proprietary estoppel can be raised by Nancy to resist the claim for possession now made by the plaintiff.  All that is required of Nancy at this stage is to plead or set out credible facts upon which a plea of estoppel can be supported, and in my view, she has done so.

3. The plaintiff (“Jackie”) does not dispute that Nancy had been paying management fees in respect of the Property since 1992, and the rates in respect of the Property since 2002.

4. There is only dispute as to the reason for Nancy’s payment of the management fees and rates.  Jackie claims that this is for her occupation of the Property since about 1981, rent free.  Nancy claims that this was as a result of the representation made by the owner, her father in law, that the Property was to be given to her husband (“Richard”) and herself for use and occupation as their matrimonial home, which representation was made before Nancy married Richard in September 1980 and before their first child, Man Yee, was born in January 1981.  Nancy claims that in the early 1990s, her father in law had proposed to transfer the ownership of the Property to Richard and herself, but as they believed that the Property would be theirs anyway, she had informed Jackie that there was no urgency for the formality, and it was agreed (allegedly) that the transfer could wait until Man Yee was 18.

5. The father in law died in 1998 before any transfer was effected.  Nancy claims that when Richard petitioned for a divorce in 2000, he had assured her that he would not contest her interests in the Property (which had been used as the matrimonial home and had been occupied by Nancy and her children after the marriage at all material times).  It is Nancy’s case that on the understanding that the Property would be transferred to her in due course, she agreed to terms of ancillary relief in the divorce proceedings, whereby Richard was only to pay her a lump sum of $9,000, and monthly maintenance of $800 for herself, and each of her children.  Nancy claims that she also started paying for the rates of the Property since 2002, at Jackie’s request.

6. On the evidence adduced at this stage, it appears that there are factual disputes as to whether : (1) representations had been made, first by the father-in-law, then by the mother-in-law by conduct and by Jackie on behalf of the estate of the father-in-law after his death, that the Property would be the matrimonial home for occupation by herself, Richard and their children after their marriage, such that she and Richard would have interests in the Property; and (2) whether Nancy had been induced by such representations to act to her detriment.  Her case on the fact of representation and on reliance can be said at this stage to be supported by the fact that she had paid for the management fees for the Property since 1992, and that she had been asked by Jackie to pay for the rates since 2002.  On the evidence, it appears that Jackie did more than merely standing by and encouraging Nancy to pay the rates, she had actually requested Nancy to pay them.  Nancy’s  acceptance of the nominal monthly maintenance of $800 for herself and for each of the children can also be said to be evidence of her having altered her position and suffered detriment as a result of her reliance on the representation that she would have rights and interests in the Property as the matrimonial home.  At the time of her divorce, she could have sought provision for accommodation for her children and for herself, having regard to the fact that she and the children had been occupying the Property for about 20 years by the time of the divorce.

7. In my view, there are legal issues as to whether the acts and conduct amount to an unequivocal representation of the character alleged by Nancy, such that the defendants can rely on proprietary estoppel to resist the claim for possession now made by Jackie on behalf of her father’s estate.  There are issues as to whether it would be unconscionable to allow Jackie, as the representative of her father’s estate, to repudiate the representations made by the father before his death, and the representations by the mother-in-law and by Jackie after his death, that Nancy could occupy the Property as the matrimonial home, and as such have interests in the Property as the matrimonial home.

8. It is not appropriate to order summarily that an order for possession should be made against the defendants.  The issues of fact and law raised cannot properly be investigated without proper pleadings and following a trial. I will accordingly allow the appeal against the master’s decision, and order that the action should continue as if begun by writ, and give directions for the filing and service of proper pleadings.

9. The costs of the appeal and the hearing below are to be paid by the plaintiff to the defendants.