PUN TIN HEUNG v. TSANG TSE KIN and Others

1995, No. A7456

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

____________

JUDGMENT

____________

Background

1. This action concerns a property at 20A D'Aguilar St (the property). The property was assigned to Tseng Yu Hao on 10 June 1961. The purchase price was $41,000. Mr Tseng (the deceased) died on 23 September 1973. The plaintiff (Mdm Pun), who was the daughter-in-law of the deceased, says that she provided $40,000 of the purchase price and, therefore, has a beneficial interest in the property to that extent by virtue of a resulting or constructive trust. In the alternative, Mdm Pun alleges that the deceased is estopped from denying her beneficial interest. In the further alternative, Mdm Pun says that, for over 20 years, she has had undisturbed possession of the property "to the exclusion of the deceased, his successors in title and persons deriving title under or through him". Mdm Pun asks for declarations and an order that the property be transferred to her.

2. Mdm Pun was married to Tsang Chee Ching (the father), a son of the deceased. He died in 1996. They had five children (the Pun children). The first defendant (the uncle) is another son of the deceased. He is the executor of the deceased's will and estate. The other defendants (the Lim children)are the children of the father and another woman named Lim Pik Wah (Mdm Lim). Both the Pun children and the Lim children are the beneficiaries of the property under the will and codicil of the deceased. The will is dated 14 December 1961 and the codicil is dated 9 February 1968. There is also a declaration of trust by the deceased dated 6 March 1965. The declaration says that the deceased holds in trust 80% of the incomes from the property for his grandchildren.

Mdm Pun's Case

3. Mdm Pun is 76 years of age. She told me that she had lived in the property since 1961. From 1948, she lived with the deceased in Lockhart Rd. In 1950, she moved to a property in Peace Avenue, Kowloon, owned by the South China College. The deceased had a close association with the college. Mdm Pun stayed there until 1960. At that time, the Peace avenue property was to be redeveloped. The developer negotiated compensation. He offered $30,000. She rejected this, and they agreed on a figure of $40,000. Six other families received compensation. This sum was paid in cash. She signed a receipt. It was counted by Tsang Tze Cheith, a nephew. The deceased came to visit her. She gave him the money, and told him to buy a property with the money for her residence. He told her to find a property and inspect it. The deceased saw the advertisement for the property. She inspected it in the company of the nephew. This was the property concerned in this action. She was happy with this property and bought it. She did not sign any documents. She fully empowered the deceased to handle all the formalities for her. When the agent came to settle the matter, she had to do work in the kitchen so she asked the deceased to handle the matter for her. She moved back to Lockhart road for a short time, and moved into the property in 1961 after it had been decorated. The property comprised four rooms. She occupied one room and let out the three others. The title deeds of the property were handed to her by the deceased after the purchase. He told her to keep them in her safe custody. She could not recall when this was.

4. After the death of the deceased, there was a family meeting around 1973. She realised that the deceased had willed that the property be divided equally amongst his grandchildren. She raised an objection that the property belonged to her. No one raised an objection to this statement.

5. Mdm Pun was referred to a letter to the father in which she spoke of money being remitted to the father since the death of the deceased and said ". . . this house will sooner or later belong to all of you". She said that she wrote this because she did not base the remittances on the rental income, was threatened and frightened, and said this to buy time. She was referred to another letter dated 22 September in which she said that "After [the property] has been sold, and after all expenses has been deducted, you people will get half. There won't be a cent less.". Mdm Pun said that she wrote this because she had no alternative; she had to do it. She did not explain what she meant by this. This was in examination-in-chief. Then she recalled writing the letter. In cross-examination, Mdm Pun denied writing the letter, suggesting that someone might have forged her signature. Mdm Pun said that she had asserted her ownership of the property to the father, both orally and in writing. The writing in which she had asserted this had not been produced by the defendants. She wrote to the father on 1 October 1982, enclosing an account of income and expenditure relating to the property. She did this because he asked for it; she had no alternative. She did not say that the property belonged to her because she thought he would be violent towards her. In another letter dated 18 August, Mdm Pun explained to the father why there were difficulties remitting money from the income of the property. There is a statement of account relating to the income and expenditure of the property prepared by Tsang Ling Man, the plaintiff's third son, dated 31 July 1991 at the request of Mdm Pun. Mdm Pun did not give any adequate explanation for doing this that is consistent with her claim that she was the beneficial owner of the property.

6. When asked why the property was in the name of the deceased, Mdm Pun said that she had confidence in him, she believed him, she let him do everything for her, and she did not know why. She told me that she expected the property to be assigned to her. She found out that it had not been so transferred when she saw the deeds with the deceased's name on them, and not hers. She said nothing to the deceased about this. She did not ask, even politely, why he had transferred the property into his own name and not into hers. She did not dare do this because she and her family were financially dependent on him. The deceased supported her and her family. The father failed to do so, and she had no other means of support. If she had asked the deceased why he had transferred the property into his own name, the deceased might have said - "Look after yourself", and she would be worse off. The deceased stopped paying money to her when she moved into the property. Then she lived on the rental income. She thought the deceased would transfer the property to her at some time. It never occurred to her that he would give the property to someone else.

7. Mdm Pun was referred to a letter in which one of her sons, Ling Chit, said to one of the Lim children, Ling Muk, that the deceased had given her a sum of money around 1965. Mdm Pun denied that she had been paid any money by the deceased; she suggested that the deceased had lied to her son. In a letter dated 2 September 1974, Ling Chit wrote to Ling Muk making a proposal, and saying that he would ask Mdm Pun to request the uncle "to hand over the original documents". Mdm Pun said this meant the original will, not the title deeds. In another letter dated 2 October 1974, Ling Chit wrote to Ling Muk implying that the title deeds had been handed to Mdm Pun by the uncle not long before. Mdm Pun said that Ling Chit must have misunderstood and misheard; she had said that the uncle had handed to her the will, not the deeds.

8. Mdm Pun said that she had no documents showing that she was living at the property between 1961 and 1973. She had discarded letters and other documents that might have shown her address.

9. She reported to deceased the rental income from the property.

10. She did not consult the deceased about the amount of compensation for vacating the Peace avenue property. She told him. He told her to handle herself and make the decision.

11. She did not send any money to her husband before the death of the deceased. She started in 1973; she had pity on them. The Lim family did not ask for money. She did not send the money because the deceased had willed that the income should be shared between all the grandchildren.

12. Mr Tseng Tze Cheih gave evidence on behalf of Mdm Pun. He is 76 years of age. He is a nephew of the deceased. He confessed to a poor memory for dates and numbers. He moved to Peace avenue where Mdm Pun was living. He did not take any part in the negotiations for compensation to Mdm Pun, although he says he acted as a go-between. He could not recall what was said by the developer and what he said to him. He remembers that the compensation was $40,000. The developer gave this money to Mdm Pun, who gave it to him to count. He counted it and gave it back to Mdm Pun. He knew about the property. He went to view it with Mdm Pun only once. He had a conversation with the deceased about the property. He told the witness that the property belonged to Mdm Pun. He said that from time to time. The deceased said that the compensation was used to purchase the property. He did not know when Mdm Pun moved into the property. His attention was drawn to a letter from which it is clear that Mr Tseng favoured Mdm Pun. He could not recall writing this letter.

13. He said he had never lived at the property or used it as a business address. When he was shown a business registration form dated 17 September 1978 and signed by him showing the property as his residential address and his place of business, he said he just used it to facilitate correspondence with the government. He said he remembered the figure of $40,000 because there was hard bargaining over a long time and because it was a round figure. It was clear he had no knowledge of any hard bargaining. Mdm Pun did not refresh his memory because he was always busy. He moved to Peace avenue a few months before its demolition. He demanded compensation but he was not eligible.

14. Mdm Pun called two witnesses to establish that she had been living in the property since about 1961. One was Mdm Kwok Yuek Oi who is 67 years of age. She told me that she had lived on the floor immediately below that of the property since 1958. She said that Mdm Pun came to live at the property 1 to 2 years after she took occupation. Later, she said that she did not remember when she moved in, but said that Mdm Pun occupied the property 1 to 2 years later. Mdm Pun did not begin to live there in 1973. The other witness was Mr Leung Kwok Sang who is 95 or 96 years old. He lived on the same floor as Mdm Pun. He said he had lived at this address for 40 to 50 years. He was unable to remember when he moved in. Mdm Pun had lived next door for 30 to 40 years. She moved in before he did. Under cross-examination, he agreed that Mdm Pun moved into the property in 1973.

15. The last witness called by Mdm Pun was Mr Tsang Ling Man, her third son. He said that his mother showed him the title deeds of the property and asked why they were not in her name. She said the money was hers. The deceased also told him that the property was purchased with Mdm Pun's money which was the compensation from Peace avenue. He was at the family meeting when his mother raised the point that the property was purchased with her money. It was "finally made known that the property belonged to her and let her handle it herself and not interfere with her any more". Money was remitted to the Lim family because in terms of the will income had to be given and remitted to them. He recognised that there was a duty to account for the rental income from the property.

Assessment of the Plaintiff's Case

16. I do not accept Mdm Pun as a reliable witness to the truth. She undoubtedly lied to me in relation to some of the documents shown to her and in relation to why she made payments to the Lim family. I was also not impressed with the evidence of Mr Tseng Tze Cheih or Mr Tsang Ling Man. Clearly, they were not objective witnesses. I was not satisfied that they were telling me the whole truth. Mdm Kwok Yuek Oi and Mr Leung Kwok Sang were speaking of an event that happened a long time ago. I believe that, without some means of prompting the memory, no one could say with any accuracy when a neighbour moved in over 30 years ago. Accordingly, I find myself not able to accept the evidence adduced by Mdm Pun unless it is supported by the contemporaneous documents or the probabilities.

17. Mdm Pun is seeking to establish a case based on an event that happened well over 35 years ago. She did not commence this action until 26 July 1995. I have been given no adequate explanation for this extraordinary delay in commencing proceedings to assert what she now says are her rights. It is not suggested by Mdm Pun that she did not know her rights. On the contrary; she says that she told the family several times that the property was hers because it had been purchased with her money. She says that she did not "dare" assert her rights against the deceased, but, even if this is accepted, it does not explain why she did not seek to establish her case after the deceased's death. In 1973, soon after the death of the deceased, she says she told the family the property was hers, but, far from doing something about this, she acquiesced in the wishes of the deceased by accounting for, and paying, the income from the property to the Lim children for some years. Mdm Pun's assertion that she did not "dare" challenge the deceased's decision to transfer the property into his own name might be some explanation for not taking action during his lifetime, but this argument is a double-edged sword. Mdm Pun has to establish that she gave money to the deceased and this money can fairly be said to be referable to the acquisition of the property by the deceased. On Mdm Pun's own case, the deceased was the sole source of support for herself and her children. He had been supporting them for a long time, and she looked to him to provide that support in the future. There is no doubt from the evidence advanced on all sides that the deceased was an honourable and honest man. Assuming that Mdm Pun did pay money to him, his conduct in transferring the property to himself without discussing this with Mdm Pun and her conduct in accepting this without protest is consistent only with both of them regarding the payment as her contribution to a fund from which the deceased would continue his assumed obligation to support her and her children. Her conduct thereafter, including her conduct after the death of the deceased, is also consistent only with her recognition that the deceased acquired the property unencumbered with any trust in her favour. I do not accept Mdm Pun's improbable explanations for accounting to the Lim family and making payments to them only after the death of the deceased. This conduct is consistent only with the fact that she accepted that the deceased had every right to treat the property as his own, and that he had no obligation to treat any right to the property as being held in trust by him for her.

18. The probabilities are strongly against Mdm Pun's case. It is unlikely in the extreme that she would have delayed so long in taking action and would have taken the steps that she did to recognise the rights of the Lim family under the deceased's will and codicil if she had the right that she now seeks to assert in these proceedings.

19. It is also so that there is absolutely nothing in the contemporaneous documents that supports her case. The opposite is so. Time after time, she writes in a vein consistent only with the recognition of the deceased's right to deal with the property as his own, and inconsistent with her assertion that the property was hers beneficially. She does say that she did write asserting her right, but the defendants have suppressed these letters. I do not accept this. What we know she did write is inconsistent with her having written on other occasions maintaining a case that the property was hers.

20. These findings dispose of Mdm Pun's case based on resulting or constructive trust and estoppel. I am unable to find that, on a balance of probabilities, she had established the facts necessary to found these claims.

21. There remains the claim that, for over 20 years, she has had undisturbed possession of the property "to the exclusion of the deceased, his successors in title and persons deriving title under or through him", and has thus acquired a prescriptive title. Mr Ng mentioned this claim with a distinct lack of enthusiasm. Indeed, I had to remind him to mention it at all. That is not surprising because the claim only has to be stated in the way Mdm Pun alleges it to ensure its rejection.

22. The fact is that, up to the date of death of the deceased, Mdm Pun occupied the property under licence. After that death, she did not hold it "to the exclusion of the deceased, his successors in title and persons deriving title under or through him". The opposite is the case. Quite clearly, on her own evidence and on my findings, she occupied the property recognising the rights of the Lim family to it.

23. Accordingly, I find that Mdm Pun has not established her case on any ground.

The Result

24. It follows from what I have said that Mdm Pun's claim must be dismissed. I have heard no argument on costs, but there seems no obvious reason why costs should not follow the event. I make an order nisi that Mdm Pun pay the defendants' costs.

JK FINDLAY

Judge of the High Court
Court of First Instance