NG LUK MUI AND ANOTHER v. SHIU TSUN WAI, VINCENT AND ANOTHER

DCCJ2533/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2533 OF 2008

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D E C I S I O N

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1.  The 2nd defendant applied for leave to appeal against my judgment of 4 October 2010, ordering the 2nd defendant to execute a transfer of the suit property to the 1st plaintiff. The 2nd defendant’s ground of appeal is that I have erred in finding the 2nd defendant was not a bona fide purchaser of good value.

2.  The 2nd defendant’s counsel, Mr Chan, submitted that I was wrong in my finding there was a resulting trust to the 1st plaintiff because the suit property was purchased in the name of a company, Silver Fortune Company Limited.  Therefore, if there was a resulting trust, the beneficial owner should be the company.

3.  I do not agree with Mr Chan.  It has been clearly set out in my judgment, paragraphs 38 to 47, the reasons for my finding was the purchase money for the purchase came from the 1st plaintiff, not the company.

4.  It is not disputed that the purchase money came from the 1st plaintiff, the company therefore was not the beneficial owner of the interest in the property.  In any event, the company no longer existed.

5.  Mr Chan’s further ground of appeal is that the transfer to the 1st defendant’s name in 1998 of the suit property was a gift with strings attached which I have failed to consider. 

6.  Again, I cannot agree with Mr Chan’s submission.  I have set out in the judgment my findings in paragraph 40 the argument of the transfer in 1998 as a gift for advancement by persons in loco parentis on Madam Lam’s claim of gift.  I shall not repeat them here.

7.  As to whether the consideration Madam Lam paid was adequate consideration, even if the 2nd defendant, i.e., Madam Lam’s declared knowledge of the suit property’s value of $900,000, according to her affidavit of means was in 2008, there is clear evidence that at the time of the transfer by the company to Vincent (the 1st defendant) in 1998 the consideration stated in the assignment was $600,000.  This was set out in paragraph 39 of my judgment, and I found in paragraph 39 Vincent was not in the financial position to pay the consideration of $600,000 in 1998.

8.  The plaintiffs also lodged an application for leave to appeal out of time against my giving judgment to the 2nd defendant on her counterclaim for the payment of the renovation charges she expended on the suit property.

9.  I find this ground of appeal rather surprising.  The evidence from the plaintiff at trial was the 1st and 2nd plaintiffs would like to renovate the suit property so that the 1st defendant’s son could install a computer with suitable wiring, etc., eventually the plaintiffs decided the whole property should be renovated and they obtained a quotation for the work to be done.  It was only because the 1st defendant told them the 2nd defendant had found a more reasonably priced contractor, they had allowed the 2nd defendant to go ahead with her contractor to take up the renovation work.

10.  Based on the aforesaid evidence, I cannot see how the plaintiffs can logically claim the 1st plaintiff should not compensate the 2nd defendant for having paid for the work which they had agreed to take up initially.

11.  On the legal issue of unjust enrichment raised by Mr Vaughan, the 2nd defendant may have thought she was renovating her own property that she had legal ownership of, but in the plaintiffs’ minds, at the time, the 2nd defendant was assisting them in renovating the suit property where, according to their evidence, they would be residing after the renovation, a property they claimed they have been residing since 1992.

12.  It is not the case that they were dispossessed of it in their minds as in the case of Blue Haven with the coffee plantation land.  On the 1st plaintiff’s own case, he knew the 2nd defendant was renovating the property for her sole benefit as its legal owner.

13.  On the pleading of the counterclaim, I found the 2nd defendant had pleaded all the ingredients required in the defence and the counterclaim, specifying the renovation expenses, and she had specifically counterclaimed for the recovery should she fail to retain the ownership after trial, of damages for the renovation charges.

14.  For reasons set out above, I do not find any merits in either the 2nd defendant’s or the plaintiffs’ appeal.  I do not consider either the plaintiffs or the 2nd defendant have any reasonable prospects of success in the appeal, therefore, leave is refused, since both the plaintiffs and the 2nd defendant have lodged an application for leave to appeal, I think the best costs order should be no order as to costs.

(Appeal on Costs application)

15.  On the appeal on costs, my costs order in paragraph 56 was that the 1st defendant shall pay the costs of the plaintiffs, and the 2nd defendant’s costs on her counterclaim to be borne by both the plaintiffs and the 1st defendant.

16.  Should the parties wish to apportion the costs, the parties should take it up themselves, I am not going to apportion the 2nd defendant’s costs in particular because her whole defence in the main was to resist the plaintiffs’ claim against her, however, she did succeed in part of her counterclaim claiming the renovation costs and expenses against the 1st defendant.  In any event, it is too late to have it apportioned now, because the parties did not come back in 14 days, the order has been made absolute, I do not think it should be changed.  In any event, the costs order I made was in accordance with the result of my judgment.