CHAN YIU v. LEE WAI LAN

DCCJ 6442/2020

[2025] HKDC 2160

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6442 OF 2020

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BETWEEN

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DECISION

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1.  This is the plaintiff’s application for leave to appeal against the Judgment of this court dated 6 June 2025 (“the Judgment”).

2.  This case concerns a dispute regarding the beneficial interest   of a property known as Office Unit C on 7^th Floor Shun Lee Commercial Building Nos. 338 & 340 Castle Peak Road, Kowloon (the “Property”). The background has been stated in the Judgment (paragraphs 2 to 7) and needed not be repeated here.

3.  In the Judgment, the court, inter alia, made a declaration that the defendant owns 50% of the beneficial interest of the Property.

4.  The plaintiff made the current application on 4 July 2025. The court has made directions for written submissions by the parties and that the matter be dealt with by way of paper disposal.

Legal Principles

5.  The legal principles for granting leave to appeal is trite: section 63A (2) of the District Court Ordinance, Cap. 336 stated:

“Leave to appeal shall not be granted unless the judge, the master or the Court of Appeal hearing the application for leave is satisfied that—

(a) the appeal has a reasonable prospect of success; or

(b) there is some other reason in the interests of justice why the appeal should be heard.”

6.  As for what constitutes “a reasonable prospect of success”, Hon Fok JA (as he then was) stated in the Court of Appeal judgment of KNM v HTF and others, HCMP 288/2011, under paragraph 9:

“The relevant test of whether an appeal has a reasonable prospect of success…therefore means an appeal with prospects that are more than “fanciful” but which do not need to be shown to be “probable”.”

7.  Paragraph 59/0/54 of the Hong Kong Civil procedure 2024 Vol 1 further elaborated as follows:

“There are many authorities for the proposition that an appeal will not be entertained from an order which it was within the discretion of the judge to make, unless it can be shown that he exercised his discretion under a mistake of law…or in disregard of principle…or under a misapprehension as to the facts…or that he took into account irrelevant matters…or failed to exercise his discretion…or the conclusion which the judge reached in the exercise of his discretion was “outside the generous ambit within which a reasonable disagreement is possible”.

8.  In short, it is well established that an appeal must show that the decision was based upon a mistake in the application of law or a mistake in finding of facts.

9.  For the latter, it is not enough to show that the judge merely exercise his discretion upon reasonable disagreements of certain arguments or evidence placed before him, but that his finding was totally outside the ambit of any possible reasonable disagreement.

10.  In this regard, Hon Fok JA (as he then was) has also put it succinctly in paragraph 23 of the judgment in the same KNM case:

“By way of preface, however, it is pertinent to note that the proposed grounds of appeal all seek to attack findings of fact made by the Judge after an evaluation of the evidence adduced before him. In the circumstances, unless the applicant can show that the Judge misunderstood the evidence, or failed to appreciate its effect, or overlooked some documentary evidence, or other indisputable evidence, which should have compelled him to a different conclusion, this court will not interfere with those findings of fact.”

11.  In other words, a proper ground of appeal on facts cannot be based on the mere observation that the judge did not agree with some arguments or evidence raised by the losing party in the original hearing: it must be shown that all the evidence presented before the Judge “should have compelled him to a different conclusion”. An appeal is not an opportunity for the losing party to rehash the same arguments in the vague hope that, someday somehow, another judge may come to a different conclusion.

Grounds for appeal

12.  The plaintiff has advanced 3 grounds of appeal in the Notice of Appeal which all challenge the finding of facts of the court.

Ground 1

13.  The plaintiff argued that the court “erred in finding that the plaintiff and the defendant separated only in 1993 as the defendant claimed”.

14.  This is a challenge on the finding of facts of the court. The plaintiff submitted that the defendant’s evidence was that after the quarrel around 1988, the couple ceased to communicate and the relationship has broken down etc. The plaintiff argued that the couple had “separated” by this time.

15.  Firstly, it is difficult to see how this ground, as framed by the plaintiff, can be a challenge of finding of facts as the plaintiff did not define precisely what constituted “separated”.

16.  Indeed, despite the defendant claiming that the relationship has broken down etc., she also said that the plaintiff and her son continued to interact as a family and engaged in family activities until the defendant and her son actually moved out of the Property in 1993.

17.  The courts accepted this but it is unclear which part of this finding that the plaintiff is challenging.

18.  If the plaintiff sought to define “separated” as the date they quarreled, stopped communication and stopped having the “relationship of a couple” etc., the fact that these matters happened in 1988 is irrelevant regarding Common Intention Constructive Trust. For this to be established, the court needed to be satisfied that there was the requisite agreement, arrangement, understanding or conduct etc. in 1988 on how the Property was to be held beneficially (see paragraph 23 below).

19.  The plaintiff sought to argue (again) as to weight of the photographs and claim that these are not direct evidence that the defendant and the son were still residing at the Property after 1988, so the plaintiff may be defining “separated” as the date the defendant moved out of the Property.

20.  If so, I still do not think that the mere conduct of the defendant moving out must infer some form of common intention on how the Property was to be held beneficially.

21.  Indeed, under the circumstances, I would think that the significance of the exact date of the defendant moving out might only be relevant to the plaintiff’s alleged payments to the defendant. The plaintiff claimed that he could no longer contact the defendant or the son after they moved out and thus sought to explain the (rather elaborate) circumstances of the 3 payments.

22.  Of course, on analysis, the court found that the plaintiff did not make such payments at all.

23.  As discussed in the Judgment (paragraph 16(e)), the legal principles concerning the arise of a Common Intention Constructive Trust are:

a.  At any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The finding of such can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.

b.  Where there is no evidence to support a finding of an agreement or arrangement of the beneficial ownership, the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust.

24.  Thus, the relationship between the couple is not direct evidence that there was an agreement, arrangement or understanding reached between the parties or that there were conducts which infer such a common intention.

25.  The Property was held by the plaintiff and the defendant as joint tenants thus the burden is on the party (i.e. the plaintiff) to show that the beneficial ownership is different from the legal ownership (paragraph 16(c) of the Judgment).

26.  To discharge this burden, the plaintiff pleaded a positive case that there was an agreement (oral and then written) in May 1988 for the defendant to transfer her 50% interest of the Property to the plaintiff for a total sum of HK$220,000, and that the plaintiff had actually paid the defendant such a sum (paragraph 8 and 10 of the Judgment).

27.  The court had heard all the evidence and, on analysis, found that there was “no reliable evidence to support” such agreement supporting a common intention in May 1988 and therefore examined the conduct of the parties (e.g. whether there were actual payments of such sums) to see “if this can infer or imply a common intention” (paragraphs 20-31 of the Judgment).

28.  However, after a detailed analysis on the evidence of such payments as well as other conducts of the parties (paragraphs 30-169 of the Judgment), the court found the plaintiff did not made any such claimed payments under the alleged agreement and the couple only “separated” in 1993 (or more precisely, the defendant and the son only moved out of the Property in 1993 and not in 1988 as the plaintiff claimed).

29.  There is no need not go into all the disputes, suffice to say that these are all evidence and arguments submitted at the trial. The plaintiff sought to argue (again) on what weight the court should give on various evidence. These arguments fall short of showing “that the Judge misunderstood the evidence, or failed to appreciate its effect, or overlooked some documentary evidence, or other indisputable evidence, which should have compelled him to a different conclusion…”

30.  This is clearly not enough to overcome the high threshold of a challenge in findings of facts and so ground 1 must have no reasonable prospect of success.

Grounds 2 and 3

31.  These two grounds can be considered together as one argument follows other: “on the evidence, there was no common intention to share the Property between 1988 and 1993” (Ground 2) and (therefore) the court “erred in finding that the defendant would have 50% beneficial interests in the Property” (Ground 3).

32.   The plaintiff also argued that “there was no dispute that” “in 1988, only 50% of the purchase price of the Property has been paid off” and that “the plaintiff made all the mortgage payments since 1988 until the mortgage was discharged in 1993”. By such calculation, “by 1988, the defendant would only acquire 25% of the beneficial interest in the Property.”

33.  This is the “resulting trust” argument.

34.  However, the burden is again on the plaintiff to show a resulting trust “by virtue of the plaintiff’s contribution or in some other way towards the property’s acquisition” and thus “equity holds the legal owner to be a trustee of that property for the plaintiff in an appropriate share, giving effect to the parties presumed intention”.

35.  Firstly, I note that the plaintiff never pleaded that “the defendant would only acquire 25% of the beneficial interest in the Property” under a resulting trust. Instead, the plaintiff pleaded that “…the defendant was holding 50% legal interest…under resulting trust by reasons of the matters pleaded” (paragraph 12 of the Amended Statement of Claim).

36.  More importantly, I would not agree that “there was no dispute that the plaintiff made all the mortgage payment since 1988 until the mortgage was discharged in 1993”. The evidence only went so far that the payment of mortgage was from the plaintiff’s bank account.

37.  The defendant’s case was that their assets and funds were mixed and that the “draft” agreement (by the wordings “雙方經濟核算(包括一切資金及青山道338號7/F C 座物業在內”) supported this. Further, as the agreement was not entered into (as the court finds) so their assets and funds were never split even after the defendant’s departure from the Property in 1993 (paragraphs 22-24 of the defendant’s 2^nd witness statement).

38.  The plaintiff again raised arguments regarding the weight that the court should place on evidence which favoured his case (e.g. no joint name savings account, the method of the defendant’s contributions etc.).

39.  In short, the plaintiff repeated the presumption that if a couple “broke up” and “no longer sharing their lives”, this must mean that “there was no common intention to share the Property” and that “they had no mixed finance” afterwards. The defendant’s case was that the arrangement went on because there was no agreement on how to split the assets, and there was no agreement on the custody of the son nor the plaintiff’s contributions to the son’s maintenance etc. (paragraphs 28-30 of the Judgment).

40.  These are evidence and arguments that the court has already heard and considered.

41.  The court has found the defendant’s evidence to be “coherent and logical on the whole” (paragraph 172 of the Judgment). By contrast, the court at various occasions found the plaintiff’s evidence and explanations to be “ludicrous”, “full of inconsistencies”, “illogical” and that “the plaintiff is clearly not a credible witness”.

42.  Importantly, the plaintiff did not challenge the findings of the court that there has never any agreement on 12 April 1988 between the plaintiff and the defendant (paragraph 31 of the Judgment) and the plaintiff never paid the HK$220,000 as he alleged (paragraphs 120, 141, 158 of the Judgment). 

43.  As such, the plaintiff and the defendant did not split their assets and finance and there was no convincing evidence that there had been any change to such ongoing financial arrangement. Thus, the court found that “the couple were living together with mixed finance until at least 1993” so there was no basis for holding the defendant “to be a trustee of that property for the plaintiff in an appropriate share, giving effect to the parties presumed intention” under a resulting trust.

44.  As such, grounds 2 and 3 must have no reasonable prospect of success.

Conclusion

45.  I would therefore dismiss the plaintiff’s application for leave to appeal. I also see no reason to grant any stay of execution of Judgment pending the appeal.

46.  I would award costs of this application be to the defendant. The defendant shall, within 28 days of this Decision, lodge and serve a summary bill of costs. The plaintiff shall within 28 days thereafter lodge and serve a summary list of objections and the court will assess costs summarily by way of paper disposal. The Defendant’s own costs be taxed in accordance with the Legal Aid Regulations.