WONG KWONG LUNG v. WONG MING YAU

HCA 1111/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1111 OF 2011

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BETWEEN

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HCMP 1810/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1810 OF 2011

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BETWEEN

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   (Heard Together)

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J U D G M E N T

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Introduction

1. Madam Ho See Fung, deceased (“the Deceased”), who passed away in Hong Kong on 27 February 2011, was married to Wong Chun Kai (“the Father”) in the Mainland China.  They had five children, namely:

(i) Wong Ming Yau (“Ming Yau”), eldest son, born in 1953;

(ii) Wong Shun Wah (“Shun Wah”), eldest daughter, born in 1958;

(iii) Wong Tat Yau (“Tat Yau”), second son, born in 1970;

(iv) Wong Wai Wa (“Wai Wa”), second daughter, born on 29 December 1974; and

(v) Wong Kwong Lung (“Kwong Lung”), third son, born on 1 March 1976. 

The first three children were born in the Mainland China, whereas the last two children were born in Hong Kong.

2. The Deceased and Ming Yau were the registered joint owners of the property known as Shop 7C on the Ground Floor of Fat Tseung Building, Nos 290 and 292 Castle Peak Road and Nos 7C, 7D and 7E Fat Tseung Street, Kowloon (“Shop 7C”) pursuant to an assignment dated 12 March 1990.

3. Apparently, Shop 7C has since 3 March 2011 been, and is currently being, occupied by Shun Wah (with the consent of Wai Wa) for the purpose of carrying on the business of a retail store selling domestic appliances under the trade name of “Ching Ping Domestic Goods”. There is in evidence before me a tenancy agreement dated 25 December 2010 (“the Tenancy Agreement”), under which Shop 7C was leased by the Deceased to Wai Wa for a term of 20 years from 1 January 2011 to 31 December 2030 at the monthly rent of HK$1,000.

4. In these proceedings, Kwong Lung, acting as the representative of the estate of the Deceased, claims that the Deceased was the sole beneficial owner of Shop 7C and that Ming Yau held his interest in Shop 7C upon a resulting trust for the Deceased prior to her death, and seeks an order that Ming Yau shall convey and transfer all his title, interests and rights in Shop 7C to him for the benefit of the estate of the Deceased.

5. On the other hand, Ming Yau contends that he was, and is, the sole beneficial owner of Shop 7C and seeks a declaration to that effect.  Ming Yau also seeks an order to set aside the Tenancy Agreement on the ground (inter alia) that neither the Deceased nor Wai Wa had any intention to create legal relations under the Tenancy Agreement, and a further order against Wai Wa for vacant possession of Shop 7C and damages for trespass.

6. In the course of these proceedings, many allegations have been raised on the side of Kwong Lung and Wai Wa against Ming Yau, and those allegations have been denied by Ming Yau.  In view of the relationship of the parties and the nature of these proceedings, it seems to me that no useful purpose will be served by resolving all those allegations unless they are essential for a proper adjudication of the claims raised herein.  Thus, I propose to make findings only on those disputed issues which, in my view, are necessary for determining the claims raised in the two actions.

Background facts

7. In or about 1958, shortly after the birth of Shun Wah, the Father left the Mainland China and went to live and work in Hong Kong and then Malaysia.

8. Later, the Father returned to Hong Kong and started to operate a fixed pitch hawker stall (“the Hawker Stall”) at Fat Tseung Street, Cheung Sha Wan, Kowloon, selling domestic appliances.

9. In 1973, Ming Yau got married in the Mainland China.

10. In 1974, the Deceased came to Hong Kong with Shun Wah and Tat Yau to join her husband.  Ming Yau could not then come to Hong Kong because he was already over 18 at that time.  After their arrival in Hong Kong, the Deceased and Shun Wah both assisted the Father in carrying on his business of the Hawker Stall.  There were periods in the 1970s and 1980s when Shun Wah worked in garment factories in Hong Kong.  However, she would still go to the Hawker Stall to assist her parents before or after work and on holidays.  When Tat Yau grew older, he also assisted his parents in the business of the Hawker Stall before or after school hours and on school holidays.  In due course, Wai Wa and Kwong Lung also followed this practice of Tat Yau.

11. It appears that in about 1978 to 1979, the size of the Hawker Stall was reduced by half, and the Father started to spend less time at the Hawker Stall, leaving it more to the Deceased to look after the business of the Hawker Stall.

12. In or about 1981, Ming Yau came to Hong Kong to join his parents and siblings.  At that time, the Father, the Deceased and their children all lived together in a unit on 3/F, 4 Fat Tseung Street, Cheung Sha Wan, Kowloon (“the Family Home”).  When Ming Yau first arrived in Hong Kong, he was unable to speak Cantonese and did not have any job.  The Father arranged for him to study in an evening school, but he dropped out soon afterwards because he could not catch up with the studies.  He then started to assist his parents in the business of the Hawker Stall.  In addition to working at the Hawker Stall, between 1982 and 1987, Ming Yau also hawked from a cart selling goods obtained from the Hawker Stall.

13. It is Ming Yau’s case that starting from about 1983, his father handed over the business of the Hawker Stall to him, and the Deceased assisted him in carrying on his business.  On the other hand, it is the case of Kwong Lung and Wai Wa that it was the Deceased who was carrying on the business of the Hawker Stall and she was assisted by Ming Yau and other children.  I shall come back to this matter later in this judgment.

14. In about 1987, the Father found a job in a restaurant and from then on he no longer worked at the Hawker Stall.

15. According to Shun Wah, round about that time, the Hong Kong Government decided to relocate the fixed‑pitch hawker stalls operating at Fat Tseung Street.  The Deceased happened to learn that Shop 7C was available for leasing and she decided to lease Shop 7C so that the business of the Hawker Stall could be moved to the shop.  On the other hand, according to Ming Yau, it was he who decided to lease Shop 7C.

16. As a matter of fact, a tenancy agreement in respect of Shop 7C dated 1 February 1988 for a term of three years commencing on 1 March 1988 was entered into by Wise Future Company Limited as landlord and Ming Yau as tenant.  The monthly rent was HK$8,500.  Also, as confirmed by the Inland Revenue Department by a letter dated 14 October 2011, between 1 February 1988 and 4 February 1992, Ming Yau was the registered proprietor of a business in the name of “Ching Ping Domestic Goods”.  I pause to observe that there is a dispute as to whether Ming Yau was the true proprietor of the business, and whether he entered into the tenancy agreement as requested or directed by the Deceased.

17. About two years later, on 15 January 1990, the Deceased and Ming Yau as purchasers entered into a formal agreement for the sale and purchase of Shop 7C (“the Formal Agreement”) at the price of HK$1,480,000, of which a deposit of HK$100,000 had been paid prior to the signing of the Formal Agreement and the balance of HK$1,380,000 was to be paid upon completion.  In Schedule 2 to the Formal Agreement, under the heading “The Purchaser”, the Deceased and Ming Yau were described as “Joint Tenants”.  Prior to the execution of the Formal Agreement, one Lau Pui Ting, a clerk to So & Karbhari, had apparently interpreted the contents thereof to the Deceased and Ming Yau.

18. On 12 March 1990, the Deceased and Ming Yau took an assignment (“the Assignment”) of Shop 7C.  In the Assignment, it was expressly stated that Shop 7C was assigned to the Deceased and Ming Yau as “Joint Tenants”.  As in the case of the Formal Agreement, it appears that prior to the execution of the Assignment, Lau Pui Ting had interpreted the contents thereof to the Deceased and Ming Yau.

19. On the same date, ie 12 March 1990, the Deceased and Ming Yau executed a Mortgage of Shop 7C in favour of The China State Bank Limited (“the Bank”) as security for banking facilities to the extent of HK$600,000 granted by the Bank to finance the purchase of Shop 7C.

20. Pausing here for a moment, it is Kwong Lung and Wai Wa’s case that the down payment for the purchase of Shop 7C and all subsequent mortgage instalment payments were paid by, or out of monies belonging to, the Deceased.  They also say that they had been told by the Deceased that Ming Yau’s name appeared in the Formal Agreement and Assignment as one of the purchasers as a result of a false representation made by Ming Yau to the Deceased that the Bank required a guarantor of the indebtedness owing to the Bank and Ming Yau was required to sign as the guarantor. It was only in or about 1994, when the Deceased instructed the Bank to prepare a discharge of the Mortgage, that she discovered the misrepresentation of Ming Yau.  Thereafter, notwithstanding the Deceased’s demands, Ming Yau failed or refused to convey the legal title of Shop 7C back to her.

21. On the other hand, it is Ming Yau’s case that the Father had handed over the business of the Hawker Stall to him in about 1983, and he decided to lease and later purchase Shop 7C to continue carrying on that business.  He says that he decided to include the Deceased’s name as one of the owners of Shop 7C out of respect for his mother.  He says that the down payment of HK$880,000 and all legal and other expenses incidental to the purchase were paid by him alone, and he also paid the 1^st to 25^th mortgage instalment payments of HK$15,580.26 each to the Bank from 14 March 1990 to 14 March 1992.  In February 1992, he agreed with the Deceased that he should leave the Family Home (as to which see further below) and it was decided that the Deceased would take over and continue to carry on the business of “Ching Ping Domestic Goods” at Shop 7C.  Ming Yau further says that it was agreed between him and the Deceased that the latter would make all the remaining mortgage instalment payments on his behalf in exchange for the right to occupy Shop 7C to carry on her business for as long as she lived.

22. It is not in dispute that, as a matter of fact, the Deceased did make the remaining 23 mortgage instalment payments (from 14 April 1992 to 14 February 1994).

23. Returning to the narrative, in about 1991, Ming Yau’s wife and daughter came to join him in Hong Kong from the Mainland China.  According to Shun Wah, Wai Wa and Kwong Lung, ever since Ming Yau’s wife came to Hong Kong, the relationship between the Deceased and Ming Yau/his wife had not been harmonious and there were frequent quarrels within the family, and in about 1992 the Deceased expelled Ming Yau (and his wife and daughter) from the Family Home and told him that he was no longer required to work at Shop 7C.  They also say that Ming Yau unilaterally took HK$100,000 from “the shop’s bank account(s)” when he left and told the Deceased that the money represented his “family split‑up fee” (分家費).  There is also an allegation that Ming Yau set up a competing business in close proximity to Shop 7C.  Their evidence is that the Deceased never made up with Ming Yau after 1992.

24. Ming Yau accepts that his wife and the Deceased did not get along well, and says that in 1992, after discussion with the Deceased, it was decided that he (and his wife and daughter) should leave the Family Home.  He says that his relationship with the Deceased was still very good notwithstanding his departure from the Family Home, and he took the money (HK$50,000 by way of cash and HK$50,000 from two bank accounts) with the consent of the Deceased.

25. On 11 March 1992, the Deceased registered a sole proprietorship business in the name of “Ching Ping Domestic Goods”, and continued to carry on that business at Shop 7C until her death on 27 February 2011.

26. On 10 March 1994, the Bank executed a “Receipt on Discharge of a Charge” having received full repayment of the monies secured by the Mortgage over Shop 7C.

27. In or about the end of 2006, the Deceased was diagnosed to be suffering from liver cancer.  She recovered quite well after an operation carried out in 2007.  However, her health conditions deteriorated again in September 2010.

28. On 25 December 2010, the Deceased executed the Tenancy Agreement in respect of Shop 7C in favour of Wai Wa for a term of 20 years at the rent of HK$1,000 per month.  In that tenancy agreement, the Deceased set out the allegation regarding Ming Yau’s aforesaid false representation and stated her wish that Shop 7C should be equally shared by her children.  She further stated that she agreed to let Shop 7C to Wai Wa for the “symbolic” rent of HK$1,000 so that, in the event that Ming Yau ultimately failed to execute a re‑conveyance of Shop 7C thereby enabling it to be equally enjoyed by her children, Wai Wa could disclose the existence of the Tenancy Agreement and could occupy Shop 7C or let it out during the term of the Tenancy Agreement.  Finally, it was stated that should Ming Yau reach agreement with his siblings on how to divide up Shop 7C, the Tenancy Agreement would become void.

29. The execution of the Tenancy Agreement by the Deceased and Wai Wa apparently took place at Wai Wa’s home at Flat A, 16/F, Graces Court, 298 Un Chau Street, Shamshuipo, Kowloon, and was witnessed by one Lau Yiu Man.  The Tenancy Agreement was also stamped, as evidenced by a Stamp Certificate issued by the Inland Revenue Department dated 3 June 2011 (after the passing away of the Deceased on 27 February 2011).

30. On 3 March 2011, shortly after the death of the Deceased, Wai Wa registered a new sole proprietorship business at the address of Shop 7C in the name of “Ching Ping Domestic Goods”.

Who was carrying on the business of the Hawker Stall/Ching Ping Domestic Goods between 1983 and 1992?

31. The evidence of Ming Yau is that starting from about 1983, his father handed over the business of the Hawker Stall to him, and the Deceased assisted him in his business.  Ming Yau accepts in cross examination that his father never expressly told him that the business was handed over to him.  He relies on two matters in support of his stance that the Father had handed over the business to him.  First, he says that in about 1983, there was a burglary occurring in the Family Home, and a quarrel between the Father and the Deceased broke out as a result of that burglary. The Father then locked the warehouse which stored the goods for the Hawker Stall and the family was unable to carry on business for a day or two.  It was only through the intervention of an uncle that Ming Yau obtained the key to the warehouse, and he says that he kept the key and from that point onwards carried on the business of the Hawker Stall.  Second, Ming Yau says that after he started to carry on the business of the Hawker Stall, he would accumulate the earnings derived from the business and hand them over to the Father in round sums of HK$30,000 to HK$50,000 for the Father to place the monies with a bank on fixed deposit.  After a couple of times, the Father told Ming Yau that it was not necessary to hand over the monies to him because Ming Yau could himself deposit the monies with a bank, and from that point onwards both the Deceased and Ming Yau became responsible for depositing the accumulated earnings derived from the business of the Hawker Stall with a bank or banks.  Neither incident, it seems to me, necessarily implied that the Father had handed over the business of the Hawker Stall to Ming Yau.

32. On the other hand, the evidence of Shun Wah and Wai Wa is that the Father, who started the business of the Hawker Stall, gradually left the operation or running of the business to the care of the Deceased in about 1978 to 1979 and he ceased to be involved in running the business of the Hawker Stall completely in about 1987 when he found a job in a restaurant.  Shun Wah and Wai Wa are quite clear that it was the Deceased who was running the business in 1987 and Ming Ying was merely assisting the Deceased in her business.  They also say that it was the Deceased who decided to lease Shop 7C in 1988 and who carried on the business of “Ching Ping Domestic Goods” at Shop 7C between 1988 and 1992.

33. I accept the evidence of Shun Wah and Wai Wa and reject the evidence of Ming Yau for the following reasons:

(1)  What seems to me to be significant is the fact, as accepted by Ming Yau himself, that most of the earnings derived from the Hawker Stall (between 1983 and 1988) and from Shop 7C (between 1988 and 1992) were paid to and kept by the Deceased.  I consider this to be the strongest indication that the Deceased was the person carrying on the business of the Hawker Stall (between 1983 and 1988) and the business of “Ching Ping Domestic Goods” at Shop 7C (between 1988 and 1992), and that the earnings derived therefrom belonged to the Deceased.

(2)  Also significant, it seems to me, is the fact that, according to Ming Yau, when he left the Family Home in 1992, he handed over the monies (net of the HK$50,000 referred to in paragraph 24 above) remaining in two bank accounts held in his name (one with The Chine State Bank Ltd and the other with Yien Yieh Commercial Bank Ltd) which he used to keep the earnings derived from the business of the Hawker Stall or “Ching Ping Domestic Goods” carried on at Shop 7C to the Deceased.  I regard this conduct of Ming Yau as a clear recognition by him that the earnings derived from the business of the Hawker Stall or “Ching Ping Domestic Goods” carried on at Shop 7C belonged to the Deceased.

(3)  I also take into account the fact that the business of the Hawker Stall and subsequently that of “Ching Ping Domestic Goods” carried on at Shop 7C had been the major, if not the sole, source of income for the whole family at all material times up to 1992 (and for some considerable period of time thereafter).  During the time when the Father was actively involved in the running the business, no doubt the family members would regard him as the owner or the head of the business.  On the other hand, the Deceased had been assisting the Father in running the business since she arrived in Hong Kong in 1974.  When the Father decided to withdraw from the business, it was, it seems to me, entirely reasonable and natural for him to hand over the business to the Deceased so that she could continue to run the business and use the earnings derived therefrom to pay for the expenses of the family.  In passing, I should mention that in the course of Ming Yau’s evidence, he says that the Father also had a source of rental income derived from letting a “frozen meat shop”, which was converted from a wooden hut, but Ming Yau did not know the amount of the rental income received by the Father, and in any event he says that this source of income ended in or about 1984.

(4)  Lastly, Ming Yau only came to Hong Kong in 1981 and had assisted the Father in the business of the Hawker Stall for about only two years by 1983.  I consider it less likely that the Father would hand over the business to Ming Yau at that time when he was relatively new to the business.

34. In conclusion, I find the following facts:

(1)  The business of the Hawker Stall belonged to the Father at the beginning.

(2)  In about 1978-1979, the Father started to gradually hand over the business of the Hawker Stall to the Deceased.

(3)  By 1987 at the latest, the Father had completely handed over the business of the Hawker Stall to the Deceased.

(4)  Shortly after Ming Yau came to Hong Kong in 1981, he started to assist the Father and/or the Deceased in running the business of the Hawker Stall.  Ming Yau continued to do so after the Father had completely handed over the business of the Hawker Stall to the Deceased in 1987.

(5)  In 1988, the business of the Hawker Stall was relocated to Shop 7C.

(6)  Between 1988 and 1992, the Deceased ran the business of “Ching Ping Domestic Goods” at Shop 7C, and Ming Yau continued to assist the Deceased in running that business.

35. In reaching these conclusions, I have not overlooked the fact that:

(i)   Ming Yau entered into a tenancy agreement with Wise Future Company Limited dated 1 February 1988 for a lease of Shop 7C for a term of three years commencing on 1 March 1988; and

(ii)  he was the registered proprietor of the business of “Ching Ping Domestic Goods” with the Inland Revenue Department during the period from 1 February 1988 and 4 February 1992. 

However, I consider it likely to be the case, as mentioned by various witnesses called by Kwong Lung and Wai Wa, that Ming Yau entered into the tenancy agreement and registered the business of “Ching Ping Domestic Goods” upon the request, and on behalf, of the Deceased because the Deceased did not have any formal education and she entrusted those tasks to his son.

Who paid the purchase price of Shop 7C?

36. The available documentary records adduced as evidence at the trial show that:

(1)  Prior to the purchase of Shop 7C, the Deceased had savings in different bank accounts held in her name.

(2)  On 7 February 1990, a fixed deposit in the name of the Deceased with Yien Yieh Commercial Bank Limited matured and the whole amount of HK$944,396.60 (inclusive of principal and interest) became available.

(3)  On 7 February 1990, there was a deposit (apparently by way of transfer, as denoted by the abbreviation of “TRS” in the relevant “A/C History Transaction Listing”) of the same amount, ie HK$944,396.60, into the bank account of Ming Yau with what was then known as The China State Bank, Ltd, ie the Bank, now known as Bank of China (Hong Kong) Limited (“Ming Yau’s CSB Account”).  Prior to that deposit, Ming Yau’s CSB Account had a credit balance of HK$89,720 only. After the deposit, Ming Yau’s CSB Account had a credit balance of HK$1,034,116.60.

(4)  It is not in dispute that the deposit of HK$944,396.60 into Ming Yau’s CSB Account came from the Deceased.

(5)  On 7 February 1990, there was a withdrawal of HK$1,000,000 from Ming Yau’s CSB Account, and on 14 February 2014, there was a deposit of HK$1,001,404.11 into Ming Yau’s CSB Account. I infer that the amount of HK$1,000,000 was placed on fixed deposit for a week, and the interest accrued on that fixed deposit for the week was HK$1,404.11.

(6)  On 14 February 1990, there was a withdrawal of HK$780,000 from Ming Yau’s CSB Account which was used for the purchase of a cashier order in the amount of HK$780,000 made payable to So & Karbhari, the firm of solicitors acting for the Deceased and Ming Yau in the purchase of Shop 7C.

(7)  The purchase price of Shop 7C was HK$1,480,000.  A deposit of HK$100,000 had been paid prior to the signing of the Formal Agreement, and a mortgage loan of HK$600,000 was obtained from the Bank, leaving a balance of HK$780,000.  It is apparent that the cashier order of HK$780,000 was used to pay the balance of the purchase price of Shop 7C.

(8)  It can be seen from the bill issued by So & Karbhari to the Deceased and Ming Yau dated 2 February 1990 that apart from the balance of the purchase price (HK$780,000), a further sum of HK$51,095 was required for payment of stamp duty, legal costs and other miscellaneous expenses in connection with the purchase of Shop 7C.

(9)  It can further be seen from the bank record of Ming Yau’s CSB Account that on 14 February 1990, there was a cash withdrawal of HK$51,000.  Although Ming Yau cannot recall the purpose of this cash withdrawal, he accepts that it was likely, and I infer that it was the fact, that this sum of HK$51,000 was used to partially settle the balance payable under So & Karbhari’s said bill.

37. The available banking and other documents and records do not show who paid the deposit of HK$100,000 for the purchase of Shop 7C.

38. On the balance of probabilities, I find that the down payment (including the deposit of HK$100,000 and the part of the purchase price in the sum of HK$780,000) and other expenses incurred in the purchase of Shop 7C were paid by the Deceased.  The evidence of the witnesses called by Kwong Lung and Wai Wa, which I accept, is that the source of the Deceased’s funds included her savings accumulated from the earnings of the business of the Hawker Stall and of “Ching Ping Domestic Goods” carried on at Shop 7C, monies which Shun Wah gave to the Deceased from time to time out of Shun Wah’s wages, “lai‑see” monies of Tat Yau, Wai Wa and Kwong Lung originally kept by Shun Wah for them, as well as a loan of around HK$300,000 provided by a friend called “葱婆” (ie Madam Lee So Yin). I reject Ming Yau’s evidence that he provided any part of the down payment or other expenses incurred in the purchase of Shop 7C.

39. It is the evidence of Ming Yau that part of the purchase price of Shop 7C paid by him was funded by a loan of HK$300,000 which he obtained from Madam Lee So Yin.  However, Madam Lee So Yin, called by Kwong Lung and Wai Wa to give evidence at the trial, is adamant that she provided the loan to the Deceased and not to Ming Yau.  According to Madam Lee So Yin, she withdrew cash of HK$230,000 from a bank account and handed the same, together with cash of HK$70,000 which she had, to the Deceased, and the Deceased repaid the loan of HK$300,000 (together with a small amount by way of interest) to Madam Lee So Yin one to two years later.  There is in evidence before the court an “A/C History Transaction Listing” of Madam Lee So Yin’s bank account with Kincheng Banking Corporation showing a withdrawal of HK$230,000 on 10 May 1988.  It would appear from that document that the withdrawal was not by way of “cash”, but was by way of “transfer” (TRS).

40. Having regard to the date of the withdrawal (namely, 10 May 1988), which was about 20 months before the date of the Formal Agreement and 22 months before the date of the Assignment, I have reservation as to whether the withdrawal of the HK$230,000 from the bank account of Madam Lee So Yin was connected with her loan to the Deceased.  I do accept, however, Madam Lee So Yin’s evidence that she made a loan of HK$300,000 to the Deceased which the Deceased used to finance her purchase of Shop 7C, and I reject Ming Yau’s evidence that he borrowed HK$300,000 from Madam Lee So Yin to fund his purchase of Shop 7C.  I consider it highly unlikely that Madam Lee So Yin would be mistaken as to the identity of the borrower.  Further, there is no apparent reason as to why Madam Lee So Yin would not be telling the truth on this issue, and none has been suggested in her cross examination or in the final submissions of Mr Wong, counsel for Ming Yau.

41. In so far as the 48 monthly mortgage instalment payments are concerned, the banking documents and records and other evidence before me show that:

(1)  The 1^st to 25^th payments each of HK$15,580.26 made between 14 March 1990 and 14 March 1992 were paid out of monies in Ming Yau’s CSB Account.  However, Ming Yau accepts in his evidence that the 24^th and 25^th payments were in fact funded by the Deceased.  Ming Yau further accepts in his evidence that Ming Yau’s CSB Account, which was opened on 25 November 1989, was one of the bank accounts that he used to keep the earnings derived from the business of “Ching Ping Domestic Goods” carried on at Shop 7C.  In view of my earlier findings at paragraph 34 above, I consider that the monies in Ming Yau’s CSB Account in fact belonged to the Deceased.

(2)  The remaining 23 payments (each of HK$15,580.26 save that the last instalment payment was in the sum of HK$4,275.64 only) made between 14 April 1992 and 14 February 1994 were paid out of monies in the Deceased’s bank account with the Bank.

(3)  It follows from the above that the 48 mortgage instalment payments were all paid out of monies belonging to the Deceased.

42. In all, I find as a fact that the purchase consideration of Shop 7C was solely provided by the Deceased, and not by Ming Yau as alleged by him.

Beneficial ownership of Shop 7C

43. Miss Yue, counsel for Kwong Lung and Wai Wa, does not dispute that the presumption of advancement applies to a transaction from the mother to child.  In Canada, it has been held that the presumption of advancement does not apply to an adult child (see Pecore v Pecore [2007] 1 SCR 795).  However, in Nanyang Commercial Bank Ltd v Personal Representative of Vannee Nativivat [2013] 2 HKLRD 749, Anthony To J held that, in view of the different social-economic conditions in Canada, the presumption of advancement should continue to apply as between a parent and an adult child in Hong Kong.  I shall proceed on the basis of this view of the law.

44. Nevertheless, the fact that one is dealing with an adult child is a factor which one can take into account in deciding whether the presumption of advancement has been rebutted on the facts of the case. More importantly, it is well established that “the presumption of advancement is only a presumption which is applied when there are no facts upon which the court can operate which would determine one way or the other where the particular property was intended to be owned”, and “the presumption is relevant only when there is no evidence of actual intention, or when the evidence available as to actual intention is evenly balanced” (see Cho Kam Sindy v Cheung Yuet Ying Rose, CACV 178/2008, paragraph 7 per Rogers VP and paragraph 11 per Stone J).

45. In trying to ascertain the “actual intention” of the Deceased, I consider that I am entitled to look at all the circumstances surrounding the purchase, including the personal and family circumstances of the Deceased.  Having given the matter my anxious consideration, I am of the view that the totality of the circumstances justifies a finding that the Deceased did not intend to confer any beneficial interest in Shop 7C on Ming Yau, and I give particular weight to the following matters:

(1)  Shop 7C represented, apparently, the single most significant asset of the Deceased’s family and was the fruit of many years of hard work by all members of the family.  All the five children had assisted the Father and the Deceased in running the business of the Hawker Stall and of “Ching Ping Domestic Goods” carried on at Shop 7C.  In those circumstances, I consider it unlikely that the Deceased intended, at the time of the purchase, to give to Ming Yau a half share of the property during her lifetime and the whole of the property upon her death.

(2)  The above view is reinforced by the fact that the Deceased paid part of the purchase consideration of Shop 7C using monies given to her by Shun Wah as well as “lai‑see” monies of Tat Yau, Wai Wa and Kwong Lung which Shun Wah originally kept for them.

(3)  At the time of purchase of Shop 7C in 1990, the business of “Ching Ping Domestic Goods” was, it would seem, the sole source of income for the whole family (the Father apparently having left the family, or at any rate was no longer making any financial contribution to support the family), and Wai Wa and Kwong Lung had not yet reached adulthood.  It is likely that the Deceased would regard the business as being of crucial importance for the whole family and would keep the shop under her control and ownership as far as possible at that time.  Mr Wong argues that even if the title of Shop 7C, or a half share thereof, was assigned to Ming Yau, this would not affect the continuation of the business by the Deceased to support the whole family.  I consider it rather artificial, however, to think that the Deceased would draw a distinction between the shop and the business.

(4)  Lastly, I reject Ming Yau’s evidence that at the time of his departure from the Family Home, he had reached an agreement or arrangement with the Deceased that the latter could continue to carry on business at Shop 7C for as long as she liked provided that she paid the remaining 23 mortgage instalment payments.  On the other hand, the fact that Ming Yau had “allowed” the Deceased to have the sole enjoyment and benefit of Shop 7C for nearly 20 years after 1992 is, in my view, an indication that he did not regard himself as having any beneficial interest in the property.

46. In all, I find that, notwithstanding the fact that Shop 7C was conveyed into the joint names of the Deceased and Ming Yau, it was the intention of the Deceased at the time of the purchase that she was toremain as the sole beneficial owner of the property.  I do not consider that it is necessary in this case to rely on the presumption of advancement to resolve the issue of beneficial ownership.  Had it been necessary, I would have held that the presumption of advancement had been rebutted on the facts of the present case.

47. In coming to this conclusion, I have not overlooked the fact that in 2000 and again in 2005, a solicitor, one Mr To, engaged by or on behalf of the Deceased appeared to have drafted a notice of severance in respect of the joint tenancy of Shop 7C.  However, both Shun Wah and Wai Wa have given evidence that the Deceased was in fact not willing to execute any notice of severance because she did not accept that Ming Yau was a joint owner, or joint beneficial owner, of the property, and it was the solicitor who proposed to have a draft notice of severance prepared so that the Deceased could execute it in case she should wish to do so in future.  In view of the fact that the court does not have evidence of the full advice given by the solicitor, I do not any attach any weight to the draft notice of severance prepared by the solicitor.

The abandonment of the case of misrepresentation against Ming Yau

48. It is the pleaded case of Kwong Lung and Wai Wa that Ming Yau’s name appeared as a joint tenant of Shop 7C in the Assignment as a result of some misrepresentation made by Ming Yau to the Deceased.  The case of misrepresentation against Ming Yau was, however, abandoned by Miss Yue in her final submissions on behalf of Kwong Lung and Wai Wa.  It thus becomes unnecessary for me to make any findings on the allegation of misrepresentation, or to say anything further about the evidence given by Lau Pui Ting, the solicitor’s clerk who attended to the execution of the Formal Agreement and the Assignment by the Deceased and Ming Yau.

The validity and effect of the Tenancy Agreement

49. Kwong Lung, Wai Wa and Lau Yiu Man gave evidence on the execution of the Tenancy Agreement by the Deceased on 25 December 2010.  I accept the evidence of Wai Wa that the contents of the Tenancy Agreement were the result of discussion between the Deceased and Wai Wa, and that prior to the execution of the Tenancy Agreement, the Deceased had briefly explained the background and purpose of the Tenancy Agreement to Lau Yiu Man. There may be some discrepancies between the evidence of Kwong Lung, Wai Wa and Lau Yiu Man as to precisely what was said or done by the Deceased and the three of them prior to the execution of the Tenancy Agreement, in particular whether the Deceased read out the contents of the Tenancy Agreement.  Notwithstanding such discrepancies, I accept generally their evidence regarding the circumstances in which the Deceased came to execute the Tenancy Agreement, and I find that the Deceased voluntarily executed the Tenancy Agreement with knowledge and understanding of the contents of the same.  I do not accept Ming Yau’s contention that the Deceased and Wai Wa had no intention to create legal relations under the Tenancy Agreement, which would be contrary to the whole purpose of executing the Tenancy Agreement in the first place.

50. In view of my conclusion that the Deceased was the sole beneficial owner of Shop 7C, the Tenancy Agreement would, in my view, be valid to confer on Wai Wa the right to occupy Shop 7C in accordance with the provisions thereof.

51. On the other hand, if I am wrong in my conclusion on the issue of the beneficial ownership of Shop 7C such that the Deceased and Ming Yau should be regarded as joint tenants of that property both at law and in equity, I should state briefly my views regarding the effect of the Tenancy Agreement on the joint tenancy between the Deceased and Ming Yau.  Although the law is not yet fully settled, it would appear that:

(1)  A lease for a term of years granted by one or more (but not all) of the joint tenants to a third party would not be effective to bind the whole legal estate in respect of the jointly held property.

(2)  Nevertheless, the lease is valid as between the joint tenant who granted the lease and the lessee, and the other joint tenant is bound to respect such rights of tenancy as it creates.

(3)  Moreover, the lease has the effect of severing the joint tenancy between the joint tenants.  In view of section 8 of the Conveyancing and Property Ordinance, Cap 219, any such severance can only take effect in equity.  There is some uncertainty as to whether the severance would be just for the duration of the lease, or would extend beyond the term of the lease (see Wright v Gibbons (1949) 78 CLR 313 at 330, per Dixon J). In Megarry & Wade, The Law of Real Property, at paragraph 13‑040, it is stated that “[a]lthough the point is not free from doubt, both principle and judicial opinion suggest that a lease for years granted by one or more (but not all) of the joint tenants will effect a severance of the joint tenancy not just for the duration of the lease but thereafter”.

For the above propositions, see Megarry & Wade, The Law of Real Property, paragraphs 13‑006 and 13‑040; Tilling v Whiteman [1980] AC 1 at 24;  Frieze v Unger [1960] VR 230; Barry C Crown, Severance of Joint Tenancy of Land by Partial Alienation (2001) 117 LQR 477.

52. Accordingly, if I had come to the conclusion that the Deceased and Ming Yau held Shop 7C as joint tenants both at law and in equity, I would have found that:

(1)  Such joint tenancy was severed by the Tenancy Agreement entered into between the Deceased and Wai Wa on 25 December 2010.

(2)  Such severance was complete and final, and not effective just for the duration of the term of the Tenancy Agreement.

(3)  Wai Wa could not be regarded as a trespasser of Shop 7C, even vis‑à‑vis Ming Yau, during the term granted by the Tenancy Agreement.

Disposition

53. In respect of HCA 1111/2011, I find in favour of Kwong Lung.  I granted a declaration that the Deceased was the sole beneficial owner of Shop 7C and Ming Yau holds Shop 7C on trust for the benefit of the Deceased’s estate.  I also make an order that Ming Yau shall convey and transfer all his title, interests and rights of Shop 7C to Kwong Lung for the benefit of the estate of the Deceased.  Ming Yau’s counterclaim against Kwong Lung is dismissed.

54. In respect of HCMP 1810/2011, Ming Yau’s claim against Wai Wa is dismissed.  In relation to Wai Wa’s counterclaim, I make a declaration that the Tenancy Agreement is valid and Wai Wa is entitled to possess and use Shop 7C in accordance with the provisions of the Tenancy Agreement.

55. As for costs, I order Ming Yau to pay 90% of the costs of Kwong Lung and Wai Wa in HCA 1111/2011 and HCMP 1810/2011 respectively, such costs to be taxed if not agreed.  I have made a deduction of 10% of their costs in view of their late abandonment of the misrepresentation allegation against Ming Yau.

56. Lastly, I thank counsel for their assistance rendered to the court.