PAU KWOK MUI (鮑幗梅) alias KWOK MUI CHART alias KWOK MUI PAU CHART, the sole executrix of the estate of CHART TAK SHING (翟德成) alias TAK SHING CHART alias TAK SHING CHAK, deceased v. CHART WING HUEN MICHAEL

HCA 762/2018

[2020] HKCFI 733

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 762 OF 2018

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BETWEEN

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J U D G M E N T

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Introduction

1.  This is an appeal by the defendant against summary judgment granted to the plaintiff by Master KW Wong on 25 February 2019 (“O14 Judgment”).

2.  The plaintiff and the defendant are mother and son. The present action is commenced by the mother (“Mother”) as sole executrix of the estate of her late husband (“Father”). Mother and Father have two children, a daughter called Grace (“Grace”) and a son Michael, who is the defendant herein (“Michael”). In this action, Mother essentially claims vacant possession of a property, which forms part of Father’s estate and bequeathed to Mother, plus mesne profits from Michael.

Brief background

3.  The property concerned is a flat situated at 3 floor, Green Lane Court 132, Blue Pool Road, Happy Valley, Hong Kong (“Property”).

4.  It was not really disputed that the family had been living in the Property from about 1967 or 1968, and that Father was at that time a civil servant working at the Education Department. According to Michael, Father was able to reside in the Property through the Civil Servants’ Co-operative Building Society Scheme and under this scheme, Father needed to contribute sums of money before becoming a member of a co-operative society (formed by civil servants) in respect of the residential estate known as Green Lane Court (“Co-Operative Society”). The Co-Operative Society was later dissolved in 1999 and the title of the Property was then assigned to Father on 30 December 1999 by the Financial Secretary Incorporated at a consideration of “HK$1.00 (PT)”[1]. As seen in the Assignment, the assignment of title concerned the Property and a car parking space[2] (“Car Parking Space”).

5.  In 1987, Father retired and emigrated to Canada with Mother, leaving Grace and Michael living in the Property, although Father and Mother would return to Hong Kong from time to time, and would stay in the Property.

6.  On 23 June 1990, Father made a will in Canada, appointing Mother as executrix and bequeathing his residuary estate into 3 equal shares to respectively Mother, Grace and Michael (“1990 Will”).

7.  In about 1992, Grace joined Father and Mother in Canada before she emigrated to the United States in about 1996, but Michael had continued to reside in the Property.

8.  On 11 October 2006, Father made another will in Canada revoking the 1990 Will and appointing Mother as executrix and bequeathing the Property to Mother solely and the residue equally between Grace and Michael (“2006 Will”). As the specific bequest to Mother was only of the Property, and there was no mention of the Car Parking Space, the Car Parking Space would appear to fall into Father’s residuary estate to be divided between Grace and Michael.

9.  According to Mother, D had moved out of the Property since about 2009 and no longer resided there but nonetheless failed to remove his belongings from the Property[3]. On the other hand, D denied that he had moved out from the Property since about 2009 or at any time[4]. I will come back to this issue later in this judgment.

10.  Father passed away on 13 November 2013 domiciled in British Columbia in Canada, leaving the 2006 Will as his last will.

11.  In around March 2014, Mother decided to move back to Hong Kong for good. She did not reside in the Property, although according to Michael, she was invited to do so by him, but she declined as there was no lift in the building, and Mother had since lived in a rented flat in Happy Valley (“Happy Valley Flat”) which was arranged and paid for by Michael, until end of 2015 when according to Michael, all of a sudden Mother decided to move out of the Happy Valley Flat[5].

12.  In the meantime, Mother was granted probate of Father’s estate on 27 August 2014[6] (“Grant”). In the “Schedule of Assets and Liabilities” attached to the Grant, Mother had made no mention of the Car-Parking Space, whether under paragraph 8 or paragraph 12 thereof[7].

13.  It was Michael’s case that after Father passed away, his occupation of the Property remained uninterrupted until 2017 when the relationship between him and Mother turned sour.

14.  On 5 March 2018, Mother issued a writ under HCA 492/2018, in her personal capacity against Michael, claiming the return of a total sum of HK$2,838,949 from Michael, and alleging that Michael held the said sum on trust for her[8] (“HCA 492 Action”).

15.  Mother’s pleaded case in the HCA 492 Action was that she held two bank accounts, namely a HSBC Account and a Citibank Call Deposit Account. According to Mother, on 17 April 2014, Michael convinced her to transfer a sum of AUD 55,760.07 (equivalent to HKD 410,394) held in the Citibank Deposit Account to him who agreed to deposit the amount for her elsewhere for a higher interest rate. Further, according to Mother, for administrative convenience purpose, in about May 2013, she had nominated Grace as a signatory to her HSBC Account, and later in about April 2014, Michael had convinced her and she had further nominated Michael as an additional signatory for the same administrative convenience purpose. It is Mother’s allegation that Michael had withdrawn 6 sums between 30 May 2014 and 25 June 2014 totalling HK$2,428,555 (“6 Withdrawals”), without her knowledge or consent, from her HSBC Account. Mother then claims for the return of the total of HKD 2,838,949.

16.  Michael’s defence in the HCA 492 Action is that the sum of AUD 55,760.07 was a gift from Mother for 3 reasons, including the reimbursement of some of the rental payments and ancillary expenses for Mother’s accommodation at the Happy Valley Flat. Further, according to Michael, of the 6 Withdrawals, the first 2 were on instructions of Mother for making various purchases of miscellaneous daily use for Mother and the remaining 4 of the 6 Withdrawals were authorised by Mother as gifts to him.

17.  After Mother issued the HCA 492 Action, she then commenced the present action on 4 April 2018 to seek, amongst other things, vacant possession of the Property and mesne profits and her case is simply that Michael had been residing in the Property as a bare licensee pursuant to a licence being granted by Father, which was automatically revoked upon Father’s death. There was no mention by Mother of the Car Parking Space and in her 2^nd affirmation, she had said there was no need to include the Car Parking Space in her statement of claim, as it was not used by Michael or any one. 

18.  In any event, as I have pointed out earlier, the bequest to Mother did not in fact include the Car Parking Space.

19.  On 4 July 2018, Michael filed his defence and counterclaim (“D&C”), and it was his defence therein, amongst other things, that there was common understanding between his parents (namely Father and Mother) and his sister Grace that the Property would be given or transferred to him in due course, and counterclaims for a declaration that Mother was/is holding the Property on trust for him.

20.  On 23 October 2018, Mother issue a summons for summary judgment (“O14 Summons”).

21.  In Michael’s affirmation filed on 11 January 2019 in opposition to Mother’s O14 Summons, he exhibited a draft amended defence and counterclaim (“AD&C”) which had not been filed. It is his pleaded case in the draft AD&C that there was a common intention between his parents and him that the Property would be given or transferred to him solely in due course. There is also a new cause of action of adverse possession, in that it is Michael’s case that he has been in exclusive possession of the Property since 1990 with the intention to exclude the Property from the whole world including Mother and Father and that Michael for a possessory title to the Property. It thus appears from the draft AD&C that Michael’s counterclaim was then based on (1) a common intention constructive trust and (2) on adverse possession. 

22.  According to Mother, Michael was directed by Master J Wong on 28 September 2018 to file and serve his AD&C by 6 November 2018, but Michael had failed to do so and therefore it is submitted on behalf of Mother that Michael should not be allowed to amend his pleadings through backdoor by exhibiting an unsigned draft AD&C to his affirmation.

23.  As said earlier, on 25 February 2019, Master KW Wong granted the O14 Judgment to Mother and ordered, amongst other things, Michael to deliver up vacant possession of the Property and to pay mesne profits of HK$3,675,603 and that those mesne profits should continue to accrue at a rate of HK$61,000 per month from 26 February 2019 until the delivery of vacant possession[9].

24.  Michael issued a notice of appeal against the O14 Judgment on 11 March 2019. Thereafter, vacant possession of the Property was delivered by Michael to Mother in March 2019. The appeal was fixed for hearing before this Court on 18 December 2019. On 14 October 2019, Michael issued a summons to adduce further evidence by way of his 3^rd affirmation (“Further Evidence Summons”). 

25.  In the meantime, Mother sought to enforce the monetary part of the O14 Judgment by taking out various garnishee proceedings, which then prompted Michael to seek a stay of the monetary judgment. His application was heard by Mr Recorder Manzoni SC on 21 October 2019. Mr Recorder did not order any stay, notwithstanding that he was prepared to accept that there were reasonable prospects of Michael’s appeal being successful and therefore arguable but he was not prepared to go further to say that it would inevitably succeed[10].

26.  Notwithstanding Michael failed in obtaining a stay of execution, he has not complied with the monetary part of the O14 Judgment.

The Further Evidence Summons

Legal Principles

27.  As summarised in the Hong Kong Civil Procedure 2020, Vol 1, §58/1/3:-

“Admission of new evidence – After the CJR O.58, r.1(5) of the RHC provides that no further evidence, other than evidence as to matters which have occurred after the date on which the judgment, order or decisions was given or made, may be received on the hearing of an appeal under RHC O.58, expect on special grounds.”

28.  Mr Adrian Lai submitted that “special grounds” bears the same meaning as that in O 59, r 10(2), and that it requires the conditions laid down in Ladd v Marshall [1954] 1 W L R 1489 to be satisfied, which are:-

(1) that the evidence could not have been obtained with reasonable diligence for use at the hearing below;

(2) the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; 

(3) the evidence must be such as is presumably to be believed.

29.  Mr Lai further referred to Fortis Insurance Company (Asia) Limited v Lam Hay Wah Inneo (unrep, CACV 86/2010, 28.10.2010), in which the Court of Appeal, citing Langdale v Danby [1982] 1 W L R 1123 (at 1133B to F), accepted that the proper approach to be adopted in the context of an appeal from O 14 proceedings is as follows:

“In the situation arising on an appeal to the Court of Appeal from a summary judgment, the application of these conditions and perhaps the conditions themselves will require some modification. It may well be that the standard of diligence required of a defendant preparing his case in opposing to a summons for summary judgment, especially if under pressure of time, will not be so high as that required in preparing for trial. The second and third conditions will no doubt be satisfied if the further evidence tendered is sufficient, according to the ordinary principles applied on applications for summary judgment, to raise a triable issue. But I can see no injustice at all in requiring a defendant to use such diligence as is reasonable in the circumstances to put before the judge on the hearing of the summons, albeit in summary form, all the evidence he relies on in defence, whereas it would be a great injustice to the plaintiff to allow the defendant to introduce for the first time on appeal evidence which was readily available at the hearing of the summons but was not produced.”

Special Grounds

30.  Michael now seeks to adduce in his 3^rd affirmation the following :

(i) Various utilities bills of the Property since 27 March 1996 address to Michael (except the telephone bills);

(ii) Demands for management fees, government rent and rates of the Property and their payment record as settled by Michael;

(iii) Quotations and receipts for the cost of repair and renovation relating to the Property incurred by Michael;

(iv) Letter from the Government Secretariat, stating the Property was subject to a restriction against alienation (“Non Alienation Restriction”;

(v) Notice and minutes of the Co-Operative Society and the Incorporated Owners of the Property showing Michael’s attendance;

(vi) An appointment of beneficial successor dated 11 September 1968 (“Letter of Appointment”) and a written note signed by Father dated 9 August 1992 (“Note”).

(collectively the “Documents”)

31.  It was Michael’s evidence that the Documents could not have been obtained with reasonable diligence for use at the hearing before Master KW Wong, and this was because:

(i) In contemplation of the renovation of the Property before Michael’s wedding, the Documents, other with other items were moved to different storages from time to time,

(ii) In the absence of expectation that his own mother would sue him, Michael did not keep a record specifying which of the Documents were stored in which storage, and that he had encountered tremendous difficulty in retrieving all the Documents. 

(iii) The O14 Summons was issued on 23 October 2018 and the hearing before Master KW Wong took place on 25 February 2019, and that it took Michael until July 2019 to finally discover and organise the Documents.

32.  Mr Chan Hei Ching however pointed out on behalf of the Mother that in fact the pre-action correspondence started as early as in October – November 2017 when Mother had unequivocally demanded possession of the Property and Michael had instructed solicitors and had benefit of legal advice on this matter in October 2017. The O14 Summons was not made at the same time or soon after the commencement of the action on 4 April 2018, and on 4 July 2018, Michael already filed his D&C. The O14 Summons was taken out in October 2018, about a year after the pre-action correspondence and 6 months after commencement of this action. In short, Mr Chan submitted that as Michael was legally represented throughout, he should be aware that he must adduce all evidence he relied on before the substantive hearing on 25 February 2019.

33.  Michael’s wedding was in December 2016 and according to Michael’s evidence, the renovation was contemplated to be prior to his wedding and this would mean on his evidence, his items should have been moved to storage sometime in 2016. Michael had produced in his 3^rd affirmation filed in support of the Further Evidence Summons copies of “Service Termination Notices” and copies of “Storage Contracts” of Hongkong Storage in support of his case. However, insofar this Court can gather, the two “Service Termination Notifications” on which Michael was named as the “Customer” were dated 30 December 2017 on which Michael had signed on 29 January 2018 indicating his receipt of the items stored and acknowledging that the items were withdrawn and were in good condition[11]. As for the “Storage Contracts” they were for the period 7 June 2018 to 31 December 2018 and the “Customer” thereon was Michael’s wife, and they were in any event unsigned. The “Service Termination Notifications”  indicated the termination of the storage on 31 December 2018[12].

34.  Taking the “Service Termination Notifications” and the “Service Contracts” at the highest, the stored items were in storage for two years, ie 2017 and 2018, and there was no sufficient evidence that the items had continued to be held in storage after 31 December 2018.

35.  According to Michael’s evidence that upon knowing of the O 14 Summons in October 2018, he had immediately attended every storage possible to search for supporting documents, and thus on his own evidence he was able to access the storage venue. Although Michael had referred to 28 boxes of documents, there was no sufficient evidence as to the size of each of those boxes. He had also stated that it took him and his legal representatives substantial time to organize the documents and to filter out the irrelevant documents.

36.  There was no sufficient evidence as to when exactly the 28 boxes of documents were withdrawn from storage. Between the issue of the O14 Summons and the hearing before Master Wong on 25 February 2019, there was a gap of almost 4 months. There was no sufficient evidence as to what efforts had been made by Michael or his legal representatives to organize the documents or to find the Documents. Having considered Michael’s evidence, I am not satisfied that the Documents could not have been obtained with reasonable diligence for use at the hearing before the Master.

37.  The Non Alienation Restriction is clearly stated in Clause 2 of the Assignment. As for the other of the Documents, as seen later in this judgment, I do not find that they will have an important influence on the result of this appeal. I am therefore not prepared to grant an order as sought in the Further Evidence Summons.

38.  In any event, as parties have agreed, I will consider the Documents on de bene esse basis.

Legal principles on the appeal

39.  It is trite that an appeal from the Master’s decision is by way of a re-hearing.

40.  The present appeal is against a summary judgment. As set out in Hong Kong Civil Procedure 2020, Vol 1 at 14/4/3-4 and 8-9, and as summarised by Mr Lai:

(a) The burden is on the defendant to show that there are triable issues;

(b) The defendant must satisfy the court that he has a real or bona fide defence;

(c) The test is whether the defendant’s assertion is believable;

(d) In applying (3) above, the court is to consider the defendant’s allegations in the light of the evidence before it;

(e) There should not be a mini-trial on affidavits. Unless it is obvious that the defence put forward by the defendant is “frivolous and practically moonshine”, O 14 ought not to be applied.

41.  Mr Lai also referred this Court to Ju Yan Di Embroidery Genesisy v Yan Wai Han [2015] 1 HKLRD 822, 827, where Cheung JA said as follows:-

“However, this does not mean that once the plaintiff invokes the application and irrespective of the strength of his case, the defendant bears all the burden of showing that there are triable issues in the case. This is because the starting point in a summary judgment application is that it should only be invoked when there is no defence to the claim. This means that the plaintiff must in the first place demonstrate that the defendant has indeed no defence. … This requirement must be kept in proper perspective when assessment is made of the strength of the application, otherwise there is a danger that the attention will be focused solely on what the defendant has said without consideration at the same time of the basic premise of the plaintiff’s claim or its inherent strength and weakness.”

42.  As observed by Godfrey JA in Man Earn Ltd v Wing Ting Fong [1996] 1 HKC 225 at 227I-228E:

“Since the policy which underlies the summary procedure is to prevent the defendant from delaying the plaintiff from obtaining judgment in a case in which he defendant has clearly no defence to the plaintiff’s claim, the procedure should be invoked only where this condition is satisfied …

Unless it is obvious that the defence put forward by the defendant is ‘frivolous and practically moonshine, O 14 ought not to be applied’: see Codd v Delap (1905) 92 LT 510 per Lord Lindley at 511.”

43.  Further, Mr Lai had referred the Court to what was said by District Judge Marlene Ng, as she then was in 何應虹 v Hang Fung Electric Wire Factory Ltd DCCJ 3595/2005, unrep, 24.03.2009 at §47, that for the purpose of a summary judgment application, a defendant is not bound by his pleadings in showing cause :-

“I agree that for the purpose of the summary judgment application, the Defendant is not bound by the Defence and Counterclaim. Order 14 rule 4(1) of the RDC provides that a defendant may show cause “by affidavit or otherwise to the satisfaction of the Court”, so if the affirmation in opposition raises triable issues or arguable defences, it is always open to the defendant to apply for amendment of the defence in due course.”

44.  With the above principles in mind, I turn to the present case.

Michael’s defences

45.  It is submitted on behalf of Michael by Mr Lai that his defences can be separated into two limbs, namely quantum and liability. Although Mr Lai has dealt with quantum first, I think it is more logical the other way round.

Defences against liability

46.  Michael essentially has 3 defences against liability:

(i) At common law, absence any allegation of violence, it is doubtful whether the Court should exercise its jurisdiction to accede to a parent’s legal action evicting his/her child, even though the child is an adult (“Against Eviction Defence”)

(ii) on the facts of the present case a proprietary estoppel arises in favour of Michael such that Mother ought not be allowed to evict him from the Property (“Proprietary Estoppel Defence”);

(iii) Alternatively, Michael has a proprietary interest in the Property as a result of his detrimental reliance on the promise of Father and Mother, and Michael has a right to stay in the Property (“Constructive Trust Defence”).

Defence against quantum

47.  Mr Lai submitted that Michael has the following defences against quantum:

(i) Michael had a licence to stay at least until 20 November 2017 (if not 12 December 2017, a further extension granted by Mother which Mother now argues it was granted under undue influence/misrepresentation when she first issued the “notice to quit” on 19 October 2017 (“Licence Defence”);

(ii) As a further or alternative defence, Mother has acquiesced Michael’s using the Property and hence is estopped from claiming mesne profits against Michael (“Acquiescence Defence”);

(iii) The quantum of the mesne profits calculated was erroneous and grossly overstated (“Quantum Defence”).

Defences against liability

Against Eviction Defence

48.  This is not a defence specifically pleaded by D.

49.  Mr Lai had argued on behalf of D that the Court is especially slow to exclude even an adult child from his parents’ home, referring to paragraph 18-012 of Snell’s Equity (33^rd ed 2015).  

50.  Mr Lai had further referred this Court to Waterhouse v Waterhouse (1905) 94LT 133. This case concerned an uncontested application for judgment by a father claiming an injunction to restrain his son, aged 35, from entering his father’s house. Buckley J refused to grant an injunction and in the course of his judgment had said[13] :

“An injunction to restrain a trespass is not a matter of course. … But an injunction is a formidable weapon, to be used only when justified by such a state of facts as upon precedents and principles well established in this Court justify its application. Under circumstances, an injunction to restrain a defendant—even though the defendant be the plaintiff's son—from entering on premises would be right. But the facts alleged in this case are far from justifying an order that a son shall not enter his father’s house. The duty of a father towards his son does not come to an end when, by reason of the latter having attained his majority or having reached a riper age, he may be properly called upon to provide for himself. Even when a child is an infant the parents’ duty to provide maintenance and education is of imperfect obligation, and whether in a Court of law or of equity its direct enforcement may be difficult or impossible. But the duty arising from the relation of parent and child, whether directly enforceable or not, is a duty of which the parent can in no circumstances divest himself. The duty is not limited to providing maintenance during infancy or any other time. It is a duty so to conduct himself in all respects towards his child as is right in him, he being his father. For many purposes this Court deals with questions as between parent and child in manner different from that which would be applied between strangers in blood. The Court as between father and son regards not merely obligations which are legally enforceable, but obligations which arise from the relations between the parties—obligations which are not legal, but may be called moral. There may be cases in which a son by misconduct may have rendered it very difficult for his father to determine how properly to discharge his parental duty. But the duty remains. The son also has his duties, and the father is not only entitled, but ought to use every legitimate means to ensure that his son shall perform them. No misconduct of the son, however, can abrogate the duty of the father. There might be a case in which the father might be entitled (say for the proper discharge of his duty to others) to forbid his son even to enter his house. But except in very grave circumstances this Court would never make an order with the intent and result of severing the connection which ought to exist between parent and child. There are no facts alleged here upon which I should consider it right in this case, even if it could be right in any case, to make an order the result of which would be that, if the son came to see his father, the latter might apply to the Court to commit the son to prison for breach of an injunction. To use every legitimate means to induce or even to drive a man to conduct himself as a good son and a good citizen is, of course, right. But this is not a result which can be achieved by injunctions of this Court. The forces to be employed are those of education, example, influence, and guidance from childhood and throughout life. These are matters in respect of which a father always owes the duty of a father to his sons. Apart from other considerations, it would be strange if a Court of justice were to intervene with an order cutting the son off from his father. But for circumstances which I have referred to above I should have thought it quite unnecessary to point out that in making no order I am not affirming that the adult son is entitled to insist that his father shall provide him with lodging and food in his (the father’s) house, or to compel his father to maintain him either there or elsewhere.”

51.  In the above case, the 35 year old son had insisted on visiting his father’s house and staying there contrary to his father’s wishes. The father was willing to maintain his son elsewhere and the father applied an injunction, to restrain the son from entering or remaining in the father’s house. As seen in his judgment, Buckely J was of the view that it was inadvisable to put it in the power of a father to get his son committed to prison for coming to visit him and declined to grant the injunction.

52.  Firstly, the circumstances in the above case were quite different from the present case.

53.  Secondly, the father’s application in the Waterhouse case was not contested by the son and there was no question that the property concerned was the father’s property 

54.  Thirdly, Buckley J seemed to be referring to the moral duty of a father rather than a legal duty when he observed that the duty of a parent towards his/her child not coming to an end after the latter having attained majority, and in any event, what was said by Buckley J had to be seen in the context of the then society in 1905, ie some 115 years ago, and in the circumstances of that case. As the Judge himself had said, under circumstances an injunction to restrain a defendant even though the defendant be the plaintiff’s son from entering on premises would be right, but the facts in that case were far from justifying an order to restrain a son in entering his father’s house.

55.  I do not find the Waterhouse case will assist D.

56.  Mr Lai had also referred to Metropolitan Properties Co Ltd v Cronan (1982) 44 P & CP 1 in which the Waterhouse case was discussed in the context of an action for possession of a family home. However, what was said by the Court of Appeal in that case was:

“On the other hand, at least in the case of an adult child, he or she is correctly described as a licensee in the parents’ home and such a licence can be withdrawn. Although the court is especially slow to grant an injunction which will exclude even an adult child from that home, there is power to do so: see Waterhouse v Waterhouse … I cannot think, and at the least we were shown no authority to the contrary, that the legal nature of a child’s position in the parents’ home changes from one of status to that of licensee so soon as the child obtains his or her majority. As at present advised, I think that in law a licence to remain in the parents’ home can be withdrawn even in the case of a minor child, though of course that this would only occur in very special cases[14] ….”

57.  It can be seen clearly in the above quoted passage in the Metropolitan Properties case that an adult child resides in his/her parents’ home as a licensee and such a licence can be withdrawn. Again I do not find the above case will assist Michael.

58.  In the present case, Michael has throughout denied that his occupation of the Property was or is pursuant to any licence. His defence (whether in the D&C or the draft AD&C) was not based on any alleged continuing duty of a parent towards an adult child, or that Mother should not be allowed to evict him. His case throughout has been one that he is the sole beneficial owner of the Property. 

59.  As said earlier, according to Mother, Michael had moved out of the Property in 2009, and that he had rented a service apartment at the Harbour Plaza Hotel at a monthly rent of HK$20,000 for about 4 years and thereafter, he lived with his then girlfriend (presently his wife) in a flat at Le Cachet on Sing Woo Road in Happy Valley.

60.  Michael denied that he had moved out of the Property in 2009 or at all. He had however said in his 1^st affidavit that he moved out of the Property in 2009 temporarily.

61.  According to Michael, in about 2014, he and his wife (then fiancée) had lunch with Mother in a restaurant in Causeway Bay and when they discussed with Mother about their plans after their future marriage, Mother had told him in the presence of his wife that the Property belonged to him and that Grace would have nothing. It was further Michael’s evidence that after his marriage in 2016 (ie in December 2016) he and his wife lived in a property of his wife’s relative, and that the original arrangement was temporary as they had planned to decorate the Property before they moved in as their home and Michael’s evidence was that all along he had continued to be in possession of the Property^[15].

62.  Michael never said in his affirmation as to whether, and if so, when, he had moved back into the Property at any time prior to the O14 Judgment. All he had said was that he continued to be in possession, and that he had kept his belongings and Father’s belongings there. Although Michael gave the address of the Property as his address in his 1^st affirmation of 11 January 2019 filed in opposition to the O14 Summons, on copies of  those “Service Termination Notifications” from Hong Kong Storage from 30 December 2017 to 29 December 2018[16], his address was stated to be at 12A, Moulin Court, 65, Blue Pool Road. In his 3^rd affirmation, he gave his address to be at Tai Koo Shing. Further, according to Mother, upon checking by Grace, the water or electricity bills showed little usage in the Property since 2009 till now. 

63.  All in all, there was in fact no sufficient evidence that Michael had moved back into the Property and/or residing in the Property prior to the O 14 Judgment. 

64.  Having considered all the above, I am of the view that the Against Eviction Defence is unarguable.

The Proprietary Estoppel Defence

65.  The essential elements for establishing proprietary estoppel are representation, reliance and detriment. For representation, it is the owner of land who induces, encourages or allows the claimant to believe that he has or will enjoy some right or benefit over the owner’s property. The representation must then be relied upon by the claimant who acts to his detriment to the knowledge of the owner. The detriment would arise when the owner seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive: Chan Gorgon v Lee Wai Hing [2011] 2 HKLRD 506, at paragraph 28.

66.  It is Michael’s case that as a result of his detrimental reliance on the promise made by Father and Mother, he has proprietary interest in the Property and thus he should not have been barred from enjoying the Property.

67.  His case is said to be premised on the following facts:

(a) On several occasions prior to P Father’s and Mother’s emigration, Father told Michael that he could continue to stay in the Property and the Property would eventually belong to Michael. In return, Michael promised his parents he would take care of the expenses relating to the Property[17].

(b) In 2006, when Michael visited Father in Canada, Father again expressly told Michael that the Property would eventually belong to him[18].

(c) In reliance of the Father’s representations/assurances, Michael paid for the management fees, rates and government rent, repair cost of the common parts of the Property, and renovation cost of the Property[19], by which Michael suffered detriment.

(d) After the Father’s death, Mother reassured Michael in 2014 that the Property belongs to him[20]. Michael even shouldered all the rent of the flat occupied by Mother when she returned back to Hong Kong from Canada in 2014[21].

(e) In addition, Mother knew that under the 2006 Will[22], Father had bequeathed the Property to her. Yet, she made the assurance that the Property belongs to Michael, even when she has already become the executrix of the Property.

68.  Mr Lai referred to the following;

(1) Mother was present when Father made the representations/ assurances[23].

(2) After Mother moved back to Hong Kong in 2014, she could well have paid for the upkeeping of the Property herself, knowing she is the beneficiary of the Property under the 2006 Will. Instead, she made the assurance to Michael that the Property belonged to him and had continued to let Michael pay for it.

(3) After Mother became the executrix of the Property, no action was taken to vest the legal title to herself by way of an assent: s 66(3), Probate and Administration Ordinance (Cap 10).

69.  It is then submitted by Mr Lai on behalf of Michael that not only the cost and expenses paid by Michael constitutes detriment, one can also infer that Father and Mother had intended to let Michael have the Property, and that it is unconscionable for Mother (as Father’s executrix) to now go back on the promises Father had made and to evict Michael from the Property.

The Constructive Trust Defence

70.  In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, Lam VP had made the following observations at paragraph 1.6 :

“Since Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2012] 1 AC 776. As far as Hong Kong is concerned, the modern approach to constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context, see Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985. In a domestic context, particularly in relation to a matrimonial home, the court is not constrained in that exercise by pure direct monetary contributions to the purchase price: see Stack v Dowden [2007] AC 432 at paragraph 69 per Baroness Hale. In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters.”

71.  As has been said in paragraph 69 of Stack v Dowden, given “context is everything”, each case will turn on its own facts.

72.  Mr Lai submitted that the factual matrix relevant to this defence is similar to that of the Proprietary Estoppel Defence, namely that (1) Father on several occasions, both prior and after his emigration to Canada, promised to let Michael have the Property; (2) in reliance of Father’s representations/assurances, Michael suffered detriment by paying all the ancillary expenses and the upkeeping expenses of the Property; and (3) Michael even paid for Mother’s rental expenses for her alternative accommodation upon Mother’s return to Hong Kong in 2014.

73.  Mr Lai further submitted that a common intention existed as  Father was a man of traditional values and believed that males ought to have higher priority over females in many matters including property inheritance[24], and the Property was considered as the “ancestral home” of the family[25] and Father had no intention to sell the Property even upon his decision to emigrate to Canada for life[26]. Grace emigrated to the United Stated in or about 1996 with a family of her own[27]. Not only Michael is the only son of the family, he is also the only child residing in Hong Kong.

74.  Further, it was submitted on behalf of Michael that at all material time it was the common intention of the Father and Michael that Michael would have a proprietary interest in the Property, and in reliance of that common intention, Michael has suffered detrimental reliance, and that due to the fact-sensitive nature of a proprietary estoppel and a constructive trust claim, the serious factual dispute between Mother and Michael can only be resolved at trial.

Discussion on the Proprietary Estoppel Defence and the Constructive Trust Defence

75.  Mr Chan submitted that the present arguments on behalf of Michael before this Court were different from those before the Master, and that at the time, Michael’s defences on liability were only constructive trust and adverse possession, based on a copy of the draft AD&C exhibited in Michael’s 1^st affirmation. 

76.  Insofar as the adverse possession plea in the draft AD&C is concerned, Mr Lai made no submissions on behalf of Michael in this respect and it appears that Michael had abandoned this pleaded defence in the draft D&C. In any event, for reasons set out in Mr Chan’s submissions[28], I accept that D’s defence/counterclaim based on adverse possession is doomed to fail.

77.  In the draft AD&C, what was pleaded was the Constructive Trust Defence, and as pointed out by Mr Chan, the Proprietary Estoppel Defence was not properly pleaded.

78.  However, as seen from Mr Lai’s submissions, whether the Constructive Trust Defence or the Proprietary Estoppel Defence, they are premised on the same set of facts or similar factual matrix, and as mentioned earlier, and as seen in the 何應虹 case, Michael is not bound by his defences in the D&C.

79.  I shall thus proceed to consider not only the pleadings but also Michael’s evidence in his 1^st affirmation in deciding whether Michal has raised triable issues in relation to the Constructive Trust Defence or Proprietary Estoppel Defence.

80.  As mentioned earlier, firstly, initially in the D&C, it was only pleaded by Michael that there was a “common understanding amongst Father, Mother and Grace the entire interest of the Property would be given or transferred to D in due course”[29] (“Common Understanding”). Then in the draft AD&C, Michael purported to amend this to “common intention amongst Father, Mother and D that the entire interest of the Property be given or transferred to D solely in due course”[30] (“Common Intention”). 

81.  However, it has not been clearly pleaded by Michael in either version of his defence as to when that Common Understanding or Common Intention was formed, except that in paragraph 4 of the D&C and the AD&C, there were references that (1) Mother and Father decided to emigrate to Canada “in about 1987”, (2) Grace emigrated to join their parents in Canada “in about 1992”, and (3) Grace emigrated to the United States “in about 1996”, and in paragraph 5, Michael referred to “over the course of the years since about 1987”.

82.  Further, Michael’s case is only that the entire interest of the Property be given or transferred to him solely in due course, with no timeframe pleaded. On Michael’s own evidence, the Property is subject to the Non Alienation Restriction unless a premium payment equivalent to two thirds of the existing use value or market value of the Property has been paid to the Hong Kong Government and that no such premium has been paid[31].

83.  In any event, there have been no particulars pleaded as to how or under what circumstances the Common Understanding/Common Intention was allegedly formed, although Michael went on to aver that when he offered to Mother to allow or permit her to reside with him in the Property upon her return to settle in Hong Kong in 2014, Mother declined this offer and she reiterated the previous acknowledgment by her and Father that the entire interest of the Property should be vested with Michael in due course[32] (“Acknowledgment”).

84.  It was only in his 1^st affirmation that Michael said that on several occasions prior to their emigration, Father told him he could continue to stay in the Property and the Property would eventually belong to him. Michael said he was 25 years old then, and that it was under those circumstances that Father on more than one occasion in front of at least Mother promised to let him have the Property on condition that he would continue to keep it as an ancestral house and be responsible for the upkeep of maintenance and other expenses related to the Property.

85.  It was also Michael’s evidence that after his parents’ emigration, he had visited them once or sometimes more than once every year, and that in 2006, when he visited Father, Father said to him in the presence of Mother that the Property would belong to him. It was not clear as to which month in 2006 Michael visited his parents, but I note that it was in October 2006 that Father made the 2006 Will. There was no explanation offered by Michael, either that (i) if the 2006 Will was made before his visit, as to why Father did not tell him about it, or (ii) if the 2006 Will was made after his visit, as to why Father would make a will clearly contradicting what Michael said Father had told him.

86.  It is also Michael’s pleaded case that  as a result of the Common Understanding, over the course of years since about 1987, he had spent considerable sums of money for the improvement in repairs and maintenance work to the Property[33].

87.  Michael’s evidence in his 1^st affirmation was that he shouldered all the management fees, rates and government rent and several times for repair costs for whole building’s renovation of HK$60,000 to HK$180,000 each time and also renovation of the interior of the Property for an amount exceeding HK$200,000 and general maintenance of the Property. 

88.  On the other hand, Mother had also produced copies of management fees, demands for rates and government rent, and cheques issued by Grace, which appeared to show that such expenses, at least from 2017 onwards were paid by Grace. 

89.  This then led to Michael’s 3^rd affirmation filed in support of his New Evidence Summons, in which he produced bundles of utilities bills, including gas and electricity bills from 1996-2015 and 2018, water bills from 1996-2015, telecom bills from 2000-2009, management fees from 2000-2015, demands for rates and government rents from 1996-2013 and 2017. He also produced contributions towards the cooperative Building Society re a “Maintenance Fund” from 1994-2011, and also various invoices and quotations for renovation works, with some receipts for the years 1996, 2002, and 2006.

90.  Mr Chan had referred the Court to what was held in Cheung Ping Sum v Wong Chi Hong [2019] HKCFI 2244, namely that:

“74. Detrimental reliance is an element common to both proprietary estoppel and common intention constructive trust. There must be sufficient connection between the promises relied on and the conduct which constitutes the detriment: Fung Oi Ha and Mo Ying v Brillex Development Ltd [2014] 3 HKLRD 224 (CFI). The party asserting a claim to a beneficial interest must show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement, arrangement or understanding in order to give rise to a constructive trust. There must be some connection between the plaintiff's conduct and his/her belief that he/she has an interest in the property. To constitute conduct amounting to an acting upon the common intention, it must be conduct on which the plaintiff could not reasonably have been expected to embark unless he/she was to have an interest in the property. …

75. The Son relies on his payment or contribution to the purchase price of the Property and his other financial contributions as detriments. As he has failed to prove those payments or contributions and other contributions, I am unable to find there was any detriment suffered by the Son. In any event, it has been held in many cases that monetary contributions to household and renovation expenses may not qualify as “detriment”, as “the mere payment of household expenses is not an expenditure that is referable to the acquisition of the property”: Mo Ying and Jong Lan Kiauw v Jong Yang Hwa & Another DCMP 2540/2008 13 (unreported).”

91.  Mr Chan submitted that applying Cheung Ping Sum, the alleged expenses even if they were made by Michael, which are not admitted by Mother, do not qualify as “detriment” in support of the alleged constructive trust/proprietary estoppel.

92.  I agree that the mere payment of household expenses and renovation expenses is not an expenditure or “detriment” that is referable to the acquisition of the Property. 

93.  As said earlier, Michael has also produced in his 3^rd affirmation in support of his Further Evidence Summons a copy of the Letter of Appointment and the Note[34]. In the Letter of Appointment, the “beneficial successor” appointed was, in the order of priority, Michael first and then Grace, and as both children were then under the age of 25, Mother was appointed as a “nominee”. In the Note, which appeared to be Father’s instructions to Michael in case of anything happening to Father, and stated, amongst other things, that the Property was to be transferred to Michael’s name. Mr Chan seemed to have raised doubts that the signature on the Note, and pointed out that the signature was obviously not the signature of Father. However, the signature of Father on the Note was in Chinese, whereas Father’s signatures on the two wills, the Assignment and the Letter of Appointment were in English. I do not view that this would necessarily mean that the Note was not written or signed by the Father.

94.  Mr Chan submitted that it was never Michael’s case that the Common Intention arose from Father’s “testamentary” intention to give the Property to him after Father’s death. This, I agree. As set out earlier, Michael’s case or evidence on the Common Intention is that the Property should have been transferred or vested in him in due course. It has never been Michael’s case that the Property is to be transferred or vested in him upon Father’s death.

95.  In the draft AD&C, Michael pleaded if it were found that there was common intention constructive trust of the Property held by Father in favour of him, Mother was estopped from asserting her title and interest if any to the Property by reason of the Acknowledgment. It was also further averred that Mother made the express Acknowledgment with intention that he should act on it which he did by (1) providing rental accommodation of the Happy Valley Flat for Mother and (2) Michael did not purchase a flat for his own residence at all material times even though he had the means to do it.

96.  There was no sufficient evidence produced in Michael’s affirmation to support what he said in (2) above. As for (1) above, in Michael’s Amended Defence in the HCA 492 Action, the Acknowledgment was not specifically pleaded and it was only averred that Mother declined to reside in the Property as there was no lift or elevator, and it was further Michael’s pleaded case therein that Mother had gifted him the AUD 55,760.07 as a gift for reasons including reimbursement of some of the rental payments and ancillary expenses incurred and to be incurred by Michael for Mother’s accommodation at the Happy Valley Flat, and further  4 of the 6 Withdrawals were authorised by Mother for Michael’s wedding expenses and for intended renovation of his future matrimonial home[35].

97.  As mentioned earlier, Michael had filed a 3^rd affirmation to support his Further Evidence Summons and to produce the Documents. Among the Documents, there were minutes of meetings of the Incorporated Owners of Green Lane Court and a letter of authorisation signed by Father for Michael to attend such meetings on his behalf. Further, there was also a letter of authorisation dated 20 April 2000 signed by Father and addressed to the solicitors who prepared the Assignment, authorising Michael to collect certified copies of the title deeds of the Property on Father’s behalf from the solicitors. Since Father and Mother were all along living in Canada, and there was no evidence that at the time of those meetings or in April 2000, Father and/or Mother was in Hong Kong, these documents would not assist Michael in establishing that there was the Common Intention.

98.  Mr Chan also submitted that Michael’s case had changed course and that there were several versions, namely:

(1) By letters issued by Mother’s solicitors on 19 and 26 October 2017[36], Michael was demanded to vacate the Property, and in his replies on 2 and 8 November 2017[37], Michael only sought time to pack his belongings and asked Mother to withhold legal action. In the said replies, Michael neither asserted any interest/right in the Property nor any promises/common intention on the part of Father or Mother;

(2) Then in Michael’s solicitors’ letters of 15 and 30 November 2017[38], Michael had said that Father had promised to let Michael have  life interest in the Property to reside, namely for Michael to live in the Property for life;

(3) Thereafter in the D&C, as mentioned before, the Common Understanding between Father, Mother and Grace was Michael’s then pleaded case;

(4) Finally, in the draft AD&C, Michael then pleaded the Common Intention between his parents and him, and the Adverse Possession Defence.

99.  Michael’s evidence in his 1^st affirmation also changed course, and as pointed out by Mr Chan, the significant changes include:

(1) The alleged Common Understanding between his parents and Grace changed to Common Intention between his parents and him;

(2) That all along he had the intent to exclude the Property from the whole world including Father and Mother;

(3) That the alleged promise by Father to let him reside in the Property for life is conditional upon Michael’s maintenance and payment of related expenses of the Property.

100.  Having considered all the above, I am not satisfied that the Constructive Trust Defence and/or the Proprietary Estoppel Defence is an arguable defence.

Conclusion on Defences against Liability

101.  In light of all said, I have come to the view that Michael has not been able to discharge the burden on him to show that there are triable issues on his Defences against Liability.

Defences against Quantum

The License Defence

102.  As stated in paragraph 10.2.16 in Gary & Gary on Elements of Land Law (5^th ed 2009), it used to be said that, except in cases of beneficial entitlement or court order, the residential status of a child in the family home, both before and after his attainment of the age of majority, rested on nothing more than a revocable bare licence, and that whilst this analysis remains true of an adult child, the presence of the minor child is increasingly recognised today, not as a matter of implied licence, but rather as an incident of a certain protected status. 

103.  Further, as seen earlier in the passage quoted from the Metropolitan Properties case, it was stated that in the case of an adult child, he or she is a licensee in the parents’ home and such a licence can be withdrawn.

104.  I accept that it is not Michael’s case that he was a licensee, and that in trying to run his Defences against Liability as stated earlier, he has in fact unequivocally denied that his occupation “was or is pursuant to any licence”, and further in previously in trying to run an “adverse possession defence”, he seemed to be saying that he had been in possession since 1990 as of wrong. However, the fact that his Defences against Liability are all found unarguable by this Court does not result or mean he was not a licensee in the Property. Further, it is Mother’s case that he was a licensee until Father’s death, and thus, it is not open for Mother now to say there was never any licence. The question is whether the licence was terminated upon Father’s death as pleaded by the Mother.

105.  On the evidence, the Property was undisputedly the matrimonial home of Father and Mother, and even after they emigrated to Canada, they had returned to stay there regularly. Even though it was legally in Father’s name, on the evidence it was also the home of Mother. As stated in paragraph 10.2.15 of Gray & Gray on Elements of Land Law (5^th ed 2009), the Mother has a common law right of residence in the matrimonial home, and that his right flows from the fact of marriage itself. In any event upon Father’s death, the Property vested in the Mother. Irrespective of the legal title, the Property was Michael’s parents home and it is arguable that he was occupying the Property as a licensee of his parents, and that he had continued to occupy the Property as a licensee of Mother, after Father’s death. 

106.  Further, as pointed out by Mr Lai, Mother at all times knew Michael was occupying the Property, whether before and after Father’s death, and after Mother became the sole executrix, she did not complain about Michael’s continued usage of the Property after Father’s death. She had never demanded Michael to pay any rent for the continued usage of the Property nor demanded him to stop using the Property, at least not until the expiry of the last extension of time agreed by her, which would be either 19 November 2017 or 12 December 2017, the latter date was pursuant to an agreement signed by Mother on 19 November 2017 (“19.11.17 Agreement”) attached to Michael’s solicitors’ letter dated 20 November 2017[39].   Mother now claims that the 19.11.17 Agreement was signed by her under undue influence and/or misrepresentation.  

107.  Having considered all the evidence, I find that Michael’s Licence Defence, namely that he had a licence to remain in possession of the Property at least until 20 November 2017 if not 12 December 2017, is arguable, and that his assertion is believable.

The Acquiescence Defence

108.  This defence is based on the same factual matrix as the Licence Defence. It was submitted on behalf of Michael that the inaction on the part of Mother as set out earlier gives rise to a believable defence that Mother had acquiesced Michael’s conduct and that it is unjust for Mother to seek mesne profit against him as from the date of Father’s death, namely from 13 November 2013, as ordered in the O14 Judgment. 

109.  I am of the view that this defence also believable and arguable.

The Quantum Defence

110.  Mr Lai submitted that in making a claim for mesne profits, the owner may elect to seek either restitution of the benefit which the defendant has received or damages for the loss he has suffered, and that in cases where the property is not available for letting on the open market, a landowner may only seek restitution for the benefit received by the trespasser[40].

111.  Michael relies on the Non Alienation Restriction in Clause 2(a)(i) of the Assignment and that the Father was expressly restricted from letting or parting with possession of the Property. Dudley Surveyors who prepared the valuation report dated 21 September 2018 (“Valuation Report”) have pointed this out but were instructed by Mother to make the report on the assumption that the Property is free from the Non Alienation Restriction and that it can be leased freely in the open market. 

112.  It is thus submitted on behalf of Michael that as the Property cannot be freely let out, mesne profits would have to be assessed on a restitutionary basis, and that in assessing the quantum, it is essential to identify and consider what benefits the trespasser has received[41].

113.  Thus, Michael’s challenge under this defence is essentially in relation to the basis of the award.

114.  Mr Chan had referred to cases where the Court can award mesne profits even though the plaintiff may have been unable to let the premises concerned. However, in the cases cited, the premises concerned were not subject to any restriction on non-alienation, or in other words, any restrictive covenant as to title.

115.  Having considered parties’ respective submissions, I have also come to the view that this defence is arguable.

Conclusion 

116.  In the above circumstances, I am satisfied that Michael has raised triable issues in relation to his Defences against Quantum, in that he has real or bona fide defences and that his assertions are believable.

117.  As I have found Michael’s Defences against Liability unarguable, I dismiss Michael’s appeal against paragraphs (1) and (2) of the O14 Judgment. I am only prepared to allow Michael’s appeal on his Defences against Quantum, namely as regards paragraph (3) of the O14 Judgment which I shall set aside and order that the Mother’s claim for mesne profits should proceed to trial.

118.  As said earlier, I am not prepared to grant an order as sought in the Further Evidence Summons, which I dismiss.

119.  As for costs, I am of the view that Mother should be entitled to costs of the Further Evidence Summons and of this action in relation to her claim for vacant possession of the Property as set out in paragraph (1) of her prayers in the Amended Statement of Claim, including costs in respect of paragraphs (1) and (2) of the O14 Judgment and of the costs of this appeal in relation to those paragraphs, to be taxed if not agreed, with certificate for one Counsel. 

120.  In relation to costs in relation to Mother’s claim for mesne profits, this should be costs in the cause of such claim. 

121.  The costs orders are orders nisi, to be made final after 21 days.