YU WING CHEONG alias YU JOSEPH WING CHEONG, Executor substituted named in the Will of YAU SIN WAH alias YAU KAM LAN (“Deceased”) AND ANOTHER v. YU WING YIN

CACV 270/2019

[2022] HKCA 101

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 270 OF 2019

(ON APPEAL FROM HCMP 2089 OF 2017)

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J U D G M E N T

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Hon Au JA (giving the judgment of the court):

A.  Introduction

1.  On 22 May 2019, Deputy High Court Judge Le Pichon (“the Judge”) granted the Plaintiffs’ application for summary judgment.  The Defendant was ordered to deliver vacant possession of the property at 1^st Floor, No 24 Green Lane, The Sanitarian Apartments, Nos 20 ‑ 30 Green Lane, Hong Kong (“the Property”) to the Plaintiffs, and the Property is to be sold with vacant possession at market price within three months thereafter (“the Decision”).

2.  The Defendant appeals against the Decision by way of a Notice of Appeal (“the NOA”) dated 19 June 2019. Stay of execution of the Decision pending the determination of the appeal was ordered by consent on 9 September 2019.

3.  On 9 March 2020, the Defendant made an application for leave to adduce new evidence on appeal which was rejected by this Court (Lam VP and Barma JA) by its judgment on 6 August 2020 ([2020] HKCA 629) (“the New Evidence Judgment”).

4.  At the end of the hearing of the appeal on 13 April 2021, we reserved our judgment to be handed down.  This is what we do now.

Background

5.  The factual background of this case has been set out in detail at [2] ‑ [11] of the Decision and need not be repeated here.  For the present purpose, we will highlight the following.

6.  The Plaintiffs, the Defendant and Anne Yu are children to Yau Sin Wah alias Yau Kam Lan (“the Mother”) and Yu Hing Wan (“the Father”).  The Mother made a will dated 14 September 1968.  In that will, the Mother named the Father as the executor of her estate but, in the event that the Father predeceased her, the Plaintiffs would substitute as executors.  The Mother in the will bequeathed all her real and personal estate to her four children in equal shares.

7.  The Father predeceased the Mother in 1970, and the Mother passed away on 30 September 2000.  As a result, the Plaintiffs became the executors of the Mother’s estate.  On 5 September 2002, the 2^nd Plaintiff obtained the grant of probate.  To this day, the only unrealized asset in the estate is the Property.  Relevantly, the Defendant has been living in the Property as his home for over 60 years.

8.  The Property was built some 66 years ago.  The original registered owner of the Property was Sanitarian Co-Operative Building Society, Limited (“the Society”).  By way of an assignment dated 1 April 1998, the Property was assigned to the Mother by the Society in liquidation subject to the restrictions on alienation contained in the Government lease and a subsequent modification letter (“the 1998 Assignment”).  On 26 September 2002, the 2^nd Plaintiff registered the grant over the Property in the Land Registry and became the registered owner in the capacity of an executor.

9.  In September 2016, due to the siblings’ old age (all in their 70s then), the condition of the Property and the overburdened maintenance fees[1], the Plaintiffs and Anne Yu reached an agreement to sell the Property and distribute the net proceeds equally among the four siblings.  The estimated market price of the Property was around HK$32 million, subject to making a premium payment to lift the restrictions on alienation under the Government lease.  On 19 September 2016, the Plaintiff wrote to the Lands Department to enquire about the amount of land premium payable[2]. In the meantime, the Plaintiffs also gave notice to the Defendant about the intended sale of Property and asked for vacant possession.  Despite repeated demands, the Defendant has refused to deliver vacant possession of the Property.

10.  On 17 August 2017, the Plaintiffs obtained a Beddoe order to commence the present action and filed the originating summons on 28 September 2017.  On 29 December 2017, Master Lai ordered the proceedings to proceed as if they were begun by writ.

11.  On 13 November 2018, the Plaintiffs issued the present application for summary judgment against the Defendant for vacant possession and for an order that the Property be sold with vacant possession at market price within three months after obtaining vacant possession, such sale to be conducted by the 2^nd Plaintiff.

12.  The Defendant opposed the Plaintiffs’ application, contending that there were triable issues as to:

(1)  Whether the Defendant had an equitable interest in the Property as a tenant in common, such that the Property cannot be sold without his consent.

(2)  Whether the Plaintiffs were estopped from demanding the Defendant to deliver vacant possession of the Property.

(3)  Whether the statutory power under section 54 of the Probate and Administration Ordinance (Cap 10) (“the PAO”) is exercisable by the 2^nd Plaintiff as the executor given:

(a)  The Defendant had equitable interest over the Property;

(b)  The court of equity ought to examine other circumstances, ie, the collective sale, prior to the making of an order for sale; and/or

(c)  The Plaintiffs are estopped from selling the Property which the Defendant was promised by the Father and Mother to reside as long as he wishes.

(4)  Whether there was an imminent collective sale for redevelopment of the Sanitarian Apartments, of which the Property is part, pursuant to the Land (Compulsory Sale for Redevelopment) Ordinance (Cap 545) and the Land (Compulsory Sale for Redevelopment) (Specification of Lower Percentage) Notice (Cap 545A).

The Decision

13.  The Judge found that none of the issues raised by the Defendant was triable and granted summary judgment to the Plaintiffs[3].

14.  First, in respect of the Defendant’s contention that he had acquired an equitable interest in the Property as tenant in common when the Property was granted to the Father under the Civil Servants’ Cooperative Building Society Scheme (“the Scheme”), the Judge found that this was the Defendant’s mere assertion unsupported by even “a shred of evidence”.  Further, and in any event, his case as to how he acquired an equitable interest in the Property was inconsistent, and the alternative basis for asserting an equitable interest in the Property as a residuary beneficiary under the mother’s will was untenable in law in the absence of an assent (see [19] ‑ [27] of the Decision).

15.  Secondly, the Judge rejected the Defendant’s submission that the 2^nd Plaintiff, as the executor of the Mother’s will, could not exercise the statutory power under section 54 of the PAO due to the restrictions on alienation, as those restrictions could be lifted upon payment of the requisite land premium and administrative costs.  She also found no legal basis for the Defendant’s contention that the executor must execute an assent of the Property to the beneficiaries upon the lifting of the restrictions on alienation, and was in breach of an alleged statutory provision requiring an assent to be made within two years of the Mother’s death (see [28] ‑ [32] of the Decision).

16.  Thirdly, the Judge held that the Defendant failed to show or establish a prima facie case of estoppel as he had given no particulars of the alleged promises made by the Father and the Mother that he could live in the Property as long as he wished, and adduced no evidence of the expenditure that he had allegedly incurred in reliance on those promises (see [33] ‑ [35] of the Decision).

17.  Fourthly, the Judge found that there was no evidence of an imminent collective sale for redevelopment of the Sanitarian Apartments, and that the prospects of a collective sale, which might or might not happen in the future, were strongly militated by the reasons in favour of ordering a sale as highlighted in [17] of the Decision (see [36] ‑ [39] of the Decision).

This appeal

18.  The Defendant’s grounds of appeal as set out in the NOA span across 31 paragraphs, and are repetitive of the matters that have been stated in his pleadings, affirmations, witness statement and skeleton arguments advanced in the court below.  For the present purpose, they can be grouped into the following four general grounds:

(1)  The Judge’s approach of determining the summary judgment application is wrong (see [1] ‑ [2] of the NOA).

(2)  The Judge erred in finding that there is no triable issue in respect of the Defendant’s contentions that he is an equitable tenant in common of the Property (see [3] ‑ [12] of the NOA).

(3)  The Judge erred in disregarding the fact that the Property is gaining in value and that there is an imminent collective sale for redevelopment (see [13] ‑ [23] of the NOA).

(4)  The Judge erred in rejecting the two estoppels raised by the Defendant (see [24] ‑ [30] of the NOA).

19.  At the same time, the Plaintiffs have also filed their Respondents’ Notice seeking to affirm the Decision on four other grounds additional to those relied on by the Judge.

20.  We will first consider the merits of the grounds of appeal as summarized above.  However, as pointed out by Kwan VP at the beginning of the hearing, given the scattergun approach of the Defendant’s grounds of appeal and submissions, we must reiterate that it is not the function of a judgment to deal with each and every point raised by a litigant in his evidence and submissions without regard to its significance in the overall exercise.  It is sufficient that adequate reasons are given to explain how the determination has been reached.  See also the similar observations made by Lam VP (as he then was) in LWH v NKWS [2018] HKCA 260 at [9].

Ground 1: The Judge’s approach

21.  Under this ground, the Defendant in substance contends that the Judge committed an error of law in granting the Plaintiffs summary judgment, as she determined the application by wrongly putting the burden of proof on the Defendant.  He argues that the burden of proof in a summary judgment application is on the Plaintiffs to prove their case beyond doubt and also to prove that the Defendant has no defence.

22.  Whilst the Defendant acknowledges that he needs to show triable issues, he argues that the Judge erred in finding that his defences are not triable on the basis that she felt uncertain or that she would like to have more evidence.  He also says it is unreasonable to expect a Defendant to provide substantial amount of evidence at a summary hearing where the burden of proof is not on the Defendant, and the Defendant is only expected to demonstrate triable defences.

23.  The Defendant’s above contentions are wholly unmeritorious.

24.  It is trite that in Order 14 proceedings, if the plaintiff’s application is properly constituted, he is prima facie entitled to judgment, and the burden then shifts to the defendant to satisfy the court as to why judgment should not be given against him by showing a triable or arguable defence: see Hong Kong Civil Procedure 2022 (Vol 1) at 14/4/1.

25.  As set out in the Decision, in deciding whether she should accede to the summary judgment application, the Judge first explained that she was satisfied that the Plaintiffs had shown a prima facie case as to the Mother’s title to the Property and the Plaintiffs’ entitlement as executors to administer her estate by seeking to sell the Property under the PAO.  See [13] - [17] of the Decision.  It is only after having found that the Plaintiffs were prima facie entitled to judgment, that the Judge then went on to consider if the Defendant had shown triable issues by discussing each of the defences raised by him under the section “Whether the Defendant has shown triable issues” in the Decision (see [19] ‑ [39] of the Decision).  The Judge eventually concluded that the Defendant had failed to show that there was any triable defence to the Plaintiffs’ claims (see [19] ‑ [40] of the Decision).  Her references to uncertainties in the Defendant’s case were part of her assessment as to whether the Defendant had shown any triable issues.  In the premises, the Judge did not wrongly reverse the burden of proof on the Defendant as contended.

26.  For these reasons, the Judge’s approach in determining the summary judgment application is clearly consistent with the well‑established legal principles and cannot be faulted.  Ground 1 must fail.

Ground 2: Equitable tenants in common

27.  In support of this ground, the Defendant contends that there are two bases upon which to show that he and his siblings are equitable tenants in common of the Property such that neither could evict the other without consent.

28.  The first is based on his assertion that the original grant of the Property was made to the Father “and his family”, such that the Father, the Mother and the four siblings were equitable tenants in common from the outset.  This is so, says the Defendant, as the Property was granted to the Father “for the living and enjoyment of himself and his family”. The Defendant further argues that, as a consequence of having been an alleged equitable tenant in common together with the Father and the Mother from the outset, when the Mother took an assignment of the Property in 1998, she continued to hold it on trust for herself and the siblings (see [20] of the Defendant’s Skeleton Arguments).

29.  This basis is plainly unarguable as the Defendant has failed to advance any triable evidential basis or arguable legal principle to support the contentions.  As rightly held by the Judge at [20] of the Decision, other than the Defendant’s bare assertion, there is no evidence before the court as to the terms of the Scheme and the alleged terms of the original grant to support the allegations that the Property was granted to the Father “for the living and enjoyment of himself and his family”.  More importantly, the Defendant has also singularly failed to advance any arguable basis in law as to how this would in any event create or impose a trust on the Society to hold it on trust for the Father, the Mother and all the siblings when it was the title owner of the Property in the first place, before assigning the same to the Mother by way of the 1998 Assignment.  Quite to the contrary, his case is contradicted by the contemporaneous evidence adduced by the Plaintiffs showing how title to the Property devolved on the Mother and then to the 2^nd Plaintiff as her executor (see [13] ‑ [15] of the Decision).

30.  The Judge is therefore correct in rejecting this argument at [19] - [20] of the Decision.

31.  Second, the Defendant also submits that he is an equitable tenant in common of the Property with his other siblings by virtue of their being the beneficiaries of the estate under the Mother’s will.

32.  This is also plainly unarguable in law and therefore raises no triable issue.

33.  It is again well established that a beneficiary under a will does not have any legal or equitable interest in the assets of the estate before the administration of the estate is completed.  This has been stated succinctly in Chan Chun Wah v Chan Chun Wai Patrick & Anor [1987] 2 HKC 397[4] by Godfrey J (as he then was) at p.398F-I as follows:

“Not until there has been an assent can it be said with certainty whether or not a particular asset will be needed for the payment of debts or other liabilities; and until these have been discharged, it cannot be said what assets there will be in the residuary estate. Accordingly, the general rule is that no beneficiary can assert that he has any legal or equitable interest in any of the assets which are still unadministered; for the whole right of property in them is vested in the personal representatives. The beneficiary has merely a right to require the deceased’s estate to be duly administered. Apart from specific gifts, the rights of beneficiaries are accordingly protected, not by conferring equitable interests upon them, but by the control exercised by the court, whether under a will or an intestacy, to secure the due administration of the assets in the interests of the beneficiaries and of other persons concerned. (For these propositions, see Snell’s Principles of Equity (28^th Ed, 1982), at pp 337, 338.)” (Emphasis added)

See also: the current edition of Snell’s Equity (34^th ed) at 2-012 and Williams, Mortimer & Sunnucks on Executors, Administrators and Probate (2018 edition) at 76-03 (referred to by the Judge at [26] of the Decision).

34.  Given that the administration of the Mother’s estate has not been completed, there is simply no question that the Defendant and the other siblings are equitable tenants in common of the Property.

35.  For the above reasons, as the Defendant has failed to establish even a prima facie case that he has an equitable interest in the Property, we also agree with the Judge that the Defendant’s reliance upon the passage in Halsbury’s Law of Hong Kong at 230.819 and the dictum in Bull v Bull [1955] 1 QB 234 does not assist him.

36.  The Judge is thus also plainly correct in rejecting the Defendant’s contentions on his alleged equitable interest in the Property as raising a triable defence at [21] ‑ [27] of the Decision.

37.  We also dismiss Ground 2.

Ground 3: Imminent collective sale

38.  There was simply no evidence before the Judge to demonstrate that a collective sale was imminent, let alone that the Property was exponentially gaining in value as alleged by the Defendant.  The Judge therefore rightly held that these were bare assertions without any evidential support.  As the burden is on the Defendant to demonstrate triable issues, the Defendant’s repeated contentions made in the appeal that the Judge had wrongly required him to show sufficient evidence to support this[5] is also without merit.

39.  Indeed, the Judge’s view that the Defendant had no proper evidence to support his case of an imminent collective sale of Sanitarian Apartments is further supported by the New Evidence Judgment.  By way of that judgment, this Court rejected his application to adduce new evidence in support of this ground on the basis that it failed to meet the test in Ladd v Marshall [1954] 1 WLR 1489. In this respect, it is also pertinent to note that Lam VP (as he then was) further observed at [22] and [24] that in any event, the new evidence at best only showed that the collective sale “effort” was still at a relatively early stage and thus did not even support a prima facie case of an imminent sale as alleged by the Defendant:

“22. There is nothing to suggest that there has been substantial progress in regard to the collective sale efforts since the hearing before the Judge. Based on what is set out in the Defendant’s affidavit of 9 March 2020 [i.e. the evidence which the Defendant sought leave to adduce on appeal], the collective sale effort is still at a relatively early stage. There are outstanding objections from some owners and proceedings may have to be brought in the Lands Tribunal. There is also no suggestion that there is any offer from any interested purchaser which is acceptable to many owners.

…

24.       … even if the affidavit of 9 March 2020 were admissible and the contents were believed, we are not satisfied that it would have an important influence on the outcome.  Even if such evidence on the progress of the collective sale were adduced, it does not show that a collective sale was imminent for reasons set out at [22] above.  There is still great uncertainty as to the fate of such collective sale and it may not materialize in the foreseeable future.  (Emphasis added)”

40.  Under this ground, the Defendant further contends that the Plaintiffs are acting mala fide in seeking to sell the Property, and relies on Jones v Challenger [1961] 1 QB 176, In re Buchanan-Wollaston’s Conveyance [1939] Ch 738 and Re Hyde’s Conveyance (1952) 102 LJ 58 to argue that the Court therefore should not enforce a trust for sale in such circumstances.  In support, the Defendant has listed out various matters in [28] ‑ [36] of his written submissions saying that they show mala fides on the part of the Plaintiffs in seeking to sell the Property which is in breach of trust.

41.  However, these contentions are premised fundamentally on the Defendant first establishing a case that there is an imminent collective sale of the Sanitarian Apartments.  Since he has not established any triable issue in this respect as explained above, the cases and the matters so relied upon do not assist the Defendant to show that the Plaintiffs’ intended sale of the Property is driven by mala fides.  Quite to the contrary, as pointed out by the Judge, the facts (among others) that (a) the Property requires significant cost for its maintenance and up‑keeping given its age, (b) the 2^nd Plaintiff has to obtain loans to do so, (c) the estate is unable to derive income from the Property given the alienation restrictions under the Government lease, (d) the beneficiaries are all in their 70s, and (e) it is desirable to wind up the Mother’s estate which has been in administration for more than 17 years, strongly justify the Plaintiffs’ decision to sell the Property for the proper administration of the Mother’s estate.  See [6], [17] and [39] above.

42.  The Defendant has therefore also failed to demonstrate any triable issues in respect of this ground.

Ground 4: Estoppel

43.  Lastly, the Defendant argues that the Plaintiffs are estopped from selling the Property because (a) they failed to make an assent of the Property to the beneficiaries within two years of obtaining probate, and/or (b) the Father and the Mother had promised the Defendant that he could reside in the Property for as long as he wished, and he has relied on their promise to his detriment.

44.  Under the first basis, the Defendant submits that the 2^nd Plaintiff as executor had to make an assent of the Property to the beneficiaries within two years of the Mother’s death pursuant to an alleged “statutory provision”.  In failing to do so, the Plaintiffs are now estopped from selling the Property.  However, the Defendant has not cited before the Judge or this Court the alleged “statutory provision” or any legal authority or basis to support his contention.  He has plainly failed to show any triable issue under this proposition.

45.  As for the second estoppel, the Defendant has not given any particulars of the promises allegedly made by the Father and the Mother, or adduced any evidence of the expenditures that he has allegedly incurred in reliance upon those promises.  In the circumstances, the Judge is again plainly right to hold that he has failed to show or establish a prima facie case of estoppel.

46.  In fact, the Defendant now confirms that he has not kept, and therefore cannot produce, any evidence of his alleged expenditures for the maintenance and up‑keep of the Property, but seeks to argue that it is a reasonable presumption that he and his family have contributed to the Property (see paragraph 28 of the NOA).

47.  In our view, there is simply no basis to make such a presumption, in particular as to whether these alleged usual and general expenditures incurred for the maintenance and up‑keep of the Property are related to the alleged promises and not attributable to the mere fact that the Defendant has been living in and having the use of the Property himself.  The Defendant therefore has failed to show that there is a triable issue or an arguable defence in respect of this ground.

48.  We also reject Ground 4.

Catch-all complaint

49.  Finally, given that the Defendant has not established any triable issues for all the above contentions advanced under the various grounds of appeal, his catch-all complaint that it is triable as to whether the 2^nd Plaintiff can lawfully and properly exercise his powers as executor under the PAO to sell the Property must also fall away.

Disposition and Costs

50.  For all these reasons, we will dismiss the appeal. In view of the outcome, it is unnecessary to consider the additional grounds raised in the Respondents’ Notice to affirm the Decision.

51.  On the question of costs, the Defendant has submitted that he would seek costs if he succeeds in the appeal, but would ask for no order as to costs if the appeal is dismissed.  He says that he has made reasonable efforts to argue his case efficiently without causing extra burden to anyone, and it is a meritorious attempt regardless of the eventual outcome.

52.  Ms Wong on the other hand submits that the Plaintiffs should be awarded costs if the appeal is dismissed.  She reiterates that there is no reason why costs should not follow the event as the appeal is clearly without merit and it is not reasonable for the Defendant to have brought the appeal.

53.  We agree that the Defendant’s grounds of appeal are plainly without merit.  We therefore can see no reason to depart from the usual costs follow the event principle.  We therefore further order that the Plaintiffs’ costs of the appeal be paid by the Defendant, to be taxed if not agreed.