CHEUNG KI TAI v. CHEUNG ANDREW MAN KIT (the Personal Representative of estate of CHEUNG KEE deceased, appointed pursuant to the Order of Master Kent Yee dated 11th September 2023)

HCA 1143/2023

[2024] HKCFI 1758

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1143 OF 2023

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JUDGMENT

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1.  This is an application by the Plaintiff’s summons filed on 15 March 2024 for default judgment pursuant to Order 19 Rule 7 of the Rules of the High Court.

2.  By the order of the Master dated 11 September 2023, Mr Cheung Andrew Man Kit (“Andrew’), the grandson of Mr Cheung Kee, deceased (“Father”), was appointed to represent the estate of Father for the purpose of this action.

3.  The Re-Re-Amended Writ of Summons and the Amended Statement of Claim have been duly served to Andrew, who did not file an Acknowledgment of Service or his Defence.  The present summons was also duly served on Andrew on 19 March 2024.  He did not appear today to contest.

4.  I am satisfied that there were such defaults entitling the Plaintiff to apply for default judgment and that I should proceed with the hearing in the absence of Andrew.

5.  It is trite that upon such an application for default judgment the court shall give judgment as the plaintiff appears entitled to on his statement of claim without admitting any evidence, though the court retains its discretionary power whether to give judgment.

The Plaintiff’s pleaded case

6.  The Plaintiff’s pleaded case in her Amended Statement of Claim, in gist, is as follows.

7.  She was the daughter of Father, who was an indigenous villager of Tai Shui Hang Village in Shatin.  Apart from the Plaintiff, Father also had 2 sons, namely Cheung Wing Nin and Cheung Ping Lin. Andrew is the son of Cheung Ping Lin.

8.  In or about 1996, Father and the Plaintiff came to an oral agreement (“the Agreement”), that (a) Father would exercise his right as an indigenous villager to build a New Territories Exempted House, (b) the Plaintiff would fund all the costs including the costs for obtaining the land, the building costs and other related expenses, (c) after the house was built, Father and mother would live on the 2^nd Floor, while the Ground and 1^st Floor would be rented out for income, which income would be paid into the joint bank account of Father, the Plaintiff and the Plaintiff’s husband Yau Kwun Kei (“Yau”), (d) the rental income would be used to pay for the maintenance and sundry expenses of the house and the remaining for Father and mother’s own living expenses and use, (e) after Father passed away, the Plaintiff would have the legal and beneficial ownership of the house subject to mother continue to live on 2^nd Floor and to receive the income in her life time, and (f) Father would execute a Will to devise the house to the Plaintiff.

9.  Relying on and pursuant to the Agreement:

(a)  In 1997, Father applied for and was granted a piece of land known as Lot 892 in D.D. 196 for building the house.

(b)  The Plaintiff paid for the purchase price of the said land at HK$252,390.

(c)  Father caused a house to be built on the said land (“the Property”).

(d)  The building costs of HK$1,347,610 was paid by the Plaintiff.

(e)  Father executed his Will on 23 January 1997 in which the Property would be devised to the Plaintiff.

(f)  The Property was completed in about May 1999.

(g)  Since its completion, Father and mother lived on the 2^nd Floor of the Property and the Ground and 1^st Floors were rented out and the rental income has been deposited in the said joint bank account.

10.  To avoid argument, Father organised a family meeting on 26 December 2013 wherein the Agreement was written down in a document (“the Written Confirmation”).  The Written Agreement was there signed by Father, the Plaintiff and Yau as parties and also signed by mother, and the 2 brothers of the Plaintiff as witnesses.

11.  On about 27 February 2014, Father executed a Will appointing the Plaintiff as his sole executor and devised the Property to the Plaintiff.

12.  On 1 August 2018, Father passed away at the age of 94.

13.  It was later discovered that Father had executed another Will dated 17 February 2017 (“2017 Will”) naming Andrew as his executor and sole beneficiary of the Property.

14.  By a settlement agreement dated 16 September 2020 entered into between the Plaintiff and Andrew, Andrew acknowledged the Written Confirmation and agreed not to claim any right or interest in respect of the Property.

Relevant principles of common intention constructive trust

15.  The principles regarding common intention constructive trust are well established.  They were set out in various cases, notably Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 per Ribeiro PJ at §§35-38; Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9; Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985 and Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327.

16.  The burden lies on the plaintiff to show on balance of probabilities that the defendant, though registered as the legal owner, in fact held the property on trust for the plaintiff such that the beneficial ownership differs to the legal ownership.

17.  ;The burden may be discharged by showing that: (a) there was a common intention held by the plaintiff and the property owner at the time of the purchase (or exceptionally, thereafter) that the beneficial ownership was to be different to the legal ownership, (b) the plaintiff altered his or her position in detrimental reliance upon the common intention, and (c) it is unconscionable for the property owner to assert ownership in reliance on the legal title.  The constructive trust is constituted by the plaintiff’s detrimental reliance on the common intention and the unconscionability of the legal owner departing therefrom.

18.  The approach to ascertaining the common intention, if any, is objective.

19.  The common intention may have been the result of an agreement, arrangement or understanding reached expressly at any time prior to the acquisition (or exceptionally, at a later date) as to how the property is to be held beneficially.

20.  In the absence of evidence of such express communications, the court may rely on the parties’ conduct as a basis from which to infer a common intention.  However, the Plaintiff’s present pleaded case is that of the existence of an express agreement, and thus is not concern with this scenario.

Entitled to judgment

21.  The Plaintiff’s pleaded averments, which are taken to have been admitted by Andrew, clearly support a case that (a) Father and the Plaintiff had reached a common intention by way of the Agreement, which was an express agreement, inter alia, that though the Property would be registered in the name of the Father, it would be beneficially owned by the Plaintiff subject to certain agreed use by Father and mother during their lifetimes, (b) the Plaintiff has altered her position in detrimental reliance upon the common intention by paying for the land and the building costs, and (c) it is clearly unconscionable for the estate of Father now to assert ownership in reliance on the legal title.

22.  Indeed, according to her pleaded case, this common intention by way of the Agreement had been carried out per its terms for over 20 years from 1997 to the time Father passed away.

23.  Moreover, Andrew by the said settlement agreement agreed that, despite being named as the sole devisee of the Property under the 2017 Will, he did not claim any interest in the Property.

24.  The Plaintiff is therefore entitled to judgment and the relief as claimed in the Amended Statement of Claim.  I note that while it is not made known as to whether mother is still living on the 2^nd Floor of the Property, the Plaintiff is not seeking any order of possession.

Disposal

25.  I give default judgment to the Plaintiff. I grant the declaration as sought in the draft order provided by Mr Wong (with some slight changes) declaring that the Property has been held by the estate of the Father on trust for the Plaintiff as its sole beneficial owner.  I also make the order under paragraph 3 of the draft order, as revised, appointing the named partner of the Plaintiff’s solicitors to execute on behalf of the estate of Father all the necessary documents and instruments to convey the Property to the Plaintiff as its sole owner.  There is no order as to costs, as sought in the Amended Statement of Claim.