CHAN CHEUNG HING v. CHAN TANG LAN AND OTHERS

1987 No.A4568

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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Introduction

1. The Plaintiff and the first defendant were, at one time, married to each other. The third defendant is their son. I will refer to the Plaintiff as the husband and the first defendant as the wife. This case is concerned with property rights in four premises which belong beneficially to the husband and wife in common, but were registered in the name of the wife alone. They are:

(a)    Ground floor shop and cockloft No.2 Fat Tseung Street, Kowloon ('Fat Tseung Street');

(b)    Flat F 2nd floor, 78 Un Chau Street, Kowloon ('Un Chau Street');

(c)    Flat C 3rd floor and flat roof, South Ocean Building, 286-300 Cheung Sha Wan Road, Kowloon ('Cheung Sha Wan Road');

(d)    Workshop C 8th floor, Wah Wing Industrial Building, 14-20 Wing Yip Street, Kwai Chung ('Wing Yip Street').

2. Fat Tseung Street comprises a ground floor shop with a frontage of about 14 feet, measuring about 800 square feet in area, with a cockloft of the same dimension (the cockloft is in effect a mezzanine floor) and a rear yard of about 290 square feet.

3. Un Chau Street is a domestic flat on the second floor of a multi-storied building in Sham Shui Po, measuring about 670 square feet with an enclosed balcony of about 140 square feet.

4. Cheung Sha Wan Road is a flat on the third floor of a multi-storied building, measuring about 370 square feet together with a flat roof of about 84 square feet.

5. Wing Yip street is a unit on the eight floor of a flatted factory building in Kwai Chung, measuring about 2,680 square feet.

6. On 16 December 1983, in proceedings taken out under the Married Persons Status Ordinance, Mr Justice Power after a hotly contested hearing lasting 6 days made an order in these terms:

That Wing Yip Street be sold and that the proceeds be divided equally between the husband and the wife, the sale to be left in abeyance with liberty to apply. The wife was ordered to pay the husband's costs.

7. Later, on 12 March 1984, Mr Justice Power, upon the conclusion of further proceedings between the husband and wife (taken out in the divorce jurisdiction of the High Court) made an order that the wife do transfer a half-interest to the husband in each of the following properties:

(a)    Fat Tseung Street

(b)    Un Chau Street and

(c)    Cheung Sha Wan Road

8. Further orders for costs were made against the wife.

9. I will refer to the three properties the subject of the order of 12 March 1984 as 'the three premises'.

10. The wife appealed against Mr Justice Power's order of 12 March 1984, but the prosecution of the appeal was much delayed. On 14 February 1986 (nearly two years after the order for transfer of a half-share in the three premises) Master Wooley dismissed the wife's application to set the appeal down for hearing, and on 7 April 1986 Mr Justice Rhind dismissed the wife's appeal against Master Wooley's order. Further orders for costs were made against the wife.

11. There were thereafter further proceedings and on 28 July 1986 Mr Justice Power made an order in the consolidated proceedings (High Court M.P. No.726 of 1979 and High Court D.J. No.35 of 1981) that one half of each of the three premises be transferred forthwith to the husband.

12. One would have expected that after such delay the implementation of Mr Justice Power's order of 28 July 1986 would have been immediate. Nothing of the kind. The wife could not have been in doubt as to her legal position, for she was during all that time under the advice of solicitors - Messrs Kwan and Kwan. She must have known that, under the order of 16 December 1983, she held an undivided half-share in Wing Yip Street in trust for her husband, and that pending the sale of Wing Yip Street she was accountable to the husband as to one half of the rents and profits from Wing Yip Street. The wife must also have known that, under the order of 12 March 1984, she held the legal estate in the three premises in trust for herself and the husband in equal shares and that, being a trustee, she was liable to account to the husband for half of the rents and profits of the three premises. She might not have liked the orders: presumably, that was why she incurred the expenses of an appeal. But so long as the orders of the Court stood, her legal liabilities were clear. She was a trustee of the premises as to half-share.

13. Following Mr Justice Power's order of 28 July 1986, there was protracted correspondence between the Legal Aid Department acting for the husband and Messrs Kwan and Kwan the solicitors for the wife. The correspondence dealt with the machinery for effecting the sale of Wing Yip Street and also dealt with the question of transfer of a half-interest in the three premises. Whilst there might have been difficulties regarding the details of the sale of Wing Yip Street (the order of 16 December 1983, unfortunately, providing no machinery for that purpose) nothing could have been simpler as regards the transfer of a half-interest in the three premises to the husband. But the months passed. The wife did not comply with the order of 28 July 1986. The conclusion is quite inevitable that the wife had formed the firm intention to do whatever she could to frustrate the execution of the orders of the Court, and to deprive her former husband of what the Court had, in those proceedings, adjudicated were the lawful entitlements of the husband. Eventually, a half-share in the three premises was transferred to the husband, but not by the wife, as the order of 28 July 1986 required. On 23 January 1987, pursuant to an order made under Order 45 Rule 8 of the RSC the Registrar of the Supreme Court executed the assignment of the half-shares in favour of the husband in the name of the wife.

14. In today's terms, the four premises, if offered for sale on the open market with vacant possession, are liable to fetch about $4 million. And yet, the husband is destitute. He has not received any benefit whatever from these properties and because the husband's costs in the previous and protracted proceedings have never been paid by the wife, as ordered by the court, the wife's share of the four premises is likely to be charged with heavy liability for costs.

15. With what I have just said by way of background and introduction, I move on now to examine the transactions which have given rise to the present proceedings.

The Tenancies

16. It will be recalled that in February 1986 Master Wooley had dismissed the wife's application to set the appeal down for hearing. The wife must have realised, by about that time, that the game was up as far as delays in court proceedings were concerned, and that the implementation of the order of 12 March 1984 could not be further postponed. What happened then was as follows: the wife, in collaboration with her son, the 3rd defendant, purported to grant tenancies of the four premises upon terms which, they must have known, were extremely disadvantageous to the husband, if such terms were to take effect. I will now go into the details of these tenancies.

17. These tenancies have the following common features:

(1)    Each was for three years, with an option to renew for another three years, at an increased rent of 20%.

(2)    Each was in standard form, in Chinese, the handwritten part of each being filled in by D3.

(3)    The purported rent was as follows:

Fat Tseung Street                              $3,000 per month

Un Chau Street                                  $1,000 per month

Cheung Sha Wan Road                      $1,000 per month

Wing Yip Street                                 $2,000 per month

(4)    The purported tenants and dates of the tenacies were as follows:

Premises                                          Tenant                                      Date

Fat Tseung Street                             D2                                           1 4 86

Un Chau Street                                 D3                                          15 4 86

Cheung Sha Wan Road                     D4                                          1 5 86

Wing Yip Street                                 D4                                         1 8 86

18. I will now go into the details concerning these premises.

Fat Tseung Street

19. These are valuable premises (a ground floor shop and cockloft, with a rear yard) located near a market in Sham Shui Po. The two expert witnesses called by the Plaintiff to give evidence as to value were both impressive witnesses: they were Miss Wong Sin-yee of Messrs A G Wilkinson, chartered surveyors, and Mr Ian Cullen of Messrs Ian Cullen & Associates, chartered surveyors. They made independent valuations, without prior consultation with each other. Miss Wong's report is dated 15 November 1988 and Mr Cullen's report is dated 8 July 1988. Property values in Sham Shui Po have been rising rapidly from 1986 and, given the fact that the two valuations were not made at the same time, differences in valuation become quite inevitable. Moreover, many factors go into the computation before an opinion as to value can be formed; I would not therefore have expected Miss Wong and Mr Cullen to have arrived at identical figures, assuming that the valuations had been done at the same time. There were a considerable number of comparable sales of shop premises in the Sham Shui Po area near the market. But, of course, some degree of fine tuning was necessary in order to adjust for differences in locality, the age of the building, the time of the transaction etc. Moreover, a shop with a wider street frontage tends to be more valuable than one with a narrower frontage. Further, the fact that the mezzanine floor of Fat Tseung Street is, in effect, a cockloft (with a very low ceiling height) tends to have a depreciating effect. Having taken into account all relevant factors, the opinions of Miss Wong and Mr Cullen as regards the present day capital value of Fat Tseung Street, with vacant possession, is as follows:

Miss Wong (Messrs A G Wilkinson)                                                              $2.3 million

Mr Cullen (Messrs Tan Cullen & Associates)                                                  $1.9 million

20. It would be reasonably safe to conclude that the value of Fat Tseung Street, with vacant possession, is approximately $2 million.

21. In 1978 Fat Tseung Street had been let by the wife to tenants for four years (expiring 15 February 1982) at a monthly rental of $4,500. This tenancy (dated 17 January 1978) was registered in the Land Office. On 19 January 1982 a further tenancy for three years was entered into between the wife as lessor and the same lessees for a further three years at a monthly rental of $11,000 commencing on 15 February 1982. This tenancy was likewise registered. The name of one of the two joint tenants is Chor Yee.

22. The evidence regarding the actual occupiers of Fat Tseung Street is obscure. The wife elected to give no evidence in these proceedings. There is some evidence to the effect that there is a sub-tenant occupying part of the Fat Tseung Street premises; his name is Leung Kam Hoi and an attempt was made to secure his attendance in court as a witness by subpoena. Leung Kam Hoi did, in fact, attend court in response to the subpoena and a Legal Aid officer was able to obtain a statement from him outside court. However, for reasons which have never been explained, Leung Kam Hoi left the precincts of the court before he was called as a witness and attempts to secure his attendance by proceedings taken out under Order 52 were unsuccessful. In these circumstances, I permitted the written statement made by the Legal Aid officer to be put in evidence and, from this, it appears that Leung Kam Hoi is the sub-tenant of Chor Yee, paying a monthly rent of $9,100 for part of the premises. I assume that Leung Kam Hoi is a sub-tenant of only a part of Fat Tseung Street because, in a rent receipt dated 15 October 1988, signed by Chor Yee which was also put in evidence (exhibit P10) the rent of $9,100 a month was said to relate to the ground floor and rear cockloft of Fat Tseung Street.

23. One thing seems reasonably clear: at all times from early 1978 and, in all probabilities, continuing up to today, the principal tenant of Fat Tseung Street has been Chor Yee (or, perhaps more accurately Chor Yee and a co-tenant named Kwan Bing Hang). In accounts purportedly rendered by the wife to the husband regarding Fat Tseung Street the wife admitted that the rental income which she had derived from Fat Tseung Street was $6,000 per month. I do not, for a moment, believe that the monthly rental income was only $6,000. According to the tenancy which she executed with her own hand, and dated 19 January 1982, the monthly rental was $11,000. But whether it be only $6,000, as upon her own admission, or $11,000 (as the concrete documentary evidence indicates) the tenancy for three years in favour of the second defendant, at a monthly rent of $3,000, commencing from 1 April 1986, with an option to renew for a further three years at an increased rental of 20%, is so grossly disadvantageous to the owners of the property that I am inclined to hold, without examination of the surrounding circumstances, that the purported tenancy is a sham.

24. But the surrounding circumstances reek of fraud. The tenancy agreement is made out in a standard form in the Chinese language: a form easily purchased in the streets. The handwritten parts of the form were filled in by the son, the third defendant. There is no signature of the tenant; there is only a Chinese chop with the name 'Yuen Fung Kiu' and a purported Identity Card number. The third defendant who gave evidence in these proceedings said that this letting of Fat Tseung Street was obtained by his mother, the first defendant, through brokers. I was, at one time, inclined to doubt whether such a person known as Yuen Fung Kiu ever existed, but as an acknowledgement of service has been lodged on behalf of the second defendant of that name, I assume that there is such a person. However, what is clear is that there was no arms-length transaction between the wife (D1) and D2, as D3 in his testimony would have me believe. The defence filed on behalf of D2 is a bare denial of the allegations of the plaintiff. It is clear from all the evidence that a rental of $3,000 per month in respect of the shop and cockloft at Fat Tseung Street is an extremely favourable deal for the tenant. If D2 had entered into the transaction innocently, without notice of the wife's attempt to overreach the husband's interests, one would have expected D2 to have come forward to defend her position. After all, according to the tenancy, she has a right of renewal for three years from April 1989 at an extremely favourable rent. And yet, D2 has not appeared in Court to defend the claims against her.

25. Given all the circumstances of the case, I have no hesitation whatever in holding, which I do, that the purported tenancy agreement in relation to Fat Tseung Street is a sham. It is a device concocted by D1 and D3, in a most clumsy fashion, to defeat the husband's beneficial interest in the property. D2 lent her name to the transaction and became a party to the fraudulent scheme. There was put in evidence by the first defendant a valuation report for Fat Tseung Street made by a Mr Laurence Pang Ho-chuen dated 9 September 1987 who expressed the view that the open market rental value of Fat Tseung Street, as at 1 April 1986, was the sum of $8,000 per month. This was a bare expression of opinion, not backed up by any comparable transactions, and the report is presented in such a way as to render it impossible for the court to test the basis of that opinion. Mr Pang was not called as a witness in these proceedings. In these circumstances, I place little reliance upon Mr Pang's report except to say that it goes to reinforce, once again, the view that the purported rental of $3,000 per month paid by the second defendant is way below the market rent.

26. Nothing in the evidence remotely supports the proposition that the Fat Tseung Street premises were ever let to D2.

Un Chau Street

27. There were many comparable transactions of domestic flats in Sham Shui Po which enabled the valuers to reach a very close approximation of the present day value of Un Chau Street. Miss Wong estimated the present day value of Un Chau Street, with vacant possession, at $620,000; Mr Cullen at $590,000. In my judgment, $600,000 would be about right.

28. By the purported tenancy of 15 April 1986 the Un Chau Street flat was purportedly let to the third defendant at $1,000 per month. If genuine, this would have been a gross under-value: as D3 virtually admitted in the witness box when he said that he did not lease the entire flat from his mother Dl: he only rented a cubicle at $1,000 per month. And yet, the tenancy agreement purports to be a grant of possession to the whole flat for three years, with an option to renew for a further three years. Miss Wong and Mr Cullen, in their respective reports, arrived at the figure of $3,800 as the monthly market rental for the flat in April 1986. I have no doubt that they are correct in their valuation. The valuation of Mr Laurence Pang Ho-chuen, put in by Dl, put the market value of the flat as at 15 April 1986 at $3,100. Again, there are no comparables to justify this valuation, nor any assessment of the capital value of the flat against which the figure of $3,7.00 per month can be assessed. I reject Mr Pang's valuation in favour of the valuations of Miss Wong and Mr Cullen.

29. It can be seen that even at Mr Laurence Pang's valuation, the figure of $1,000 per month appearing in the Un Chau Street tenancy is derisory. I have no hesitation in holding that the tenancy is a sham and represents a clumsy attempt by D1 and D3 to overreach the beneficial interest of the husband in the flat.

Cheung Sha Wan Road

30. Valuation of the Cheung Sha Wan flat was made difficult by the fact that the use of the flat has been in breach of the terms of the occupation permit. The flat (370 square feet together with an 84 square foot flat roof) is on the third floor of a 12-storey composite building. There are eight domestic units on the third floor, but the flat in question appears to have been used at all material times unlawfully for commercial purposes. For this reason, there is a considerable variance between the capital value put on the flat by Miss Wong and by Mr Cullen. Miss Wong gives the present capital value, with vacant possession, at $440,000, Mr Cullen at $300,000. I am inclined to adopt the lower of these figures.

31. As regards the rental value of Cheung Sha Wan Road on 1 August 1986 (the date of the purported tenancy in favour of D4) Miss Wong puts it at $2,900 and Mr Cullen at $2,500.

Whichever figure is taken, it is plain that the purported tenancy in favour of D4 at a figure of $1,000 per month is way below the market value.

32. Similar to D2, D4 never appeared before the Court in these proceedings. Her defence is a bare denial. D3, in the witness box, also claims that his mother D1 had secured this tenancy through brokers. I have no doubt whatever that this was not an arms-length commercial transaction. A Legal Aid officer who visited the Cheung Sha Wan premises in 1987 found that it was being used as the premises of Yin Tak Silverware Company. A subpoena addressed to a Mr Lui, proprietor of Yin Tak Silverware Company, failed to secure the attendance of Mr Lui as a witness in these proceedings. In these circumstances, I permitted counsel to adduce heresay evidence to the effect that Mr Lui looked to D1 as his landlady. There is no suggestion whatsoever that D4 had any interest in these premises.

33. I have no hesitation in holding that the purported tenancy in favour of D4 was a sham, concocted between D1 and D3 in order to overreach the interests of the husband, to which D4 was a party. If she were an innocent third party who had entered into a commercial tenancy agreement with D1 at $1,000 per month in respect of these premises, it would be extraordinary that she did not come forward to defend her interest. Even according to Mr Laurence Pang Ho-chuen, the open market rental value of these premises at 1 August 1986 would have been $2,600 per month. In my judgment D4 did not come forward to defend her interest because she had no interest to defend: she was used as a tool by D1, and she knew it.

Wing Yip Street

34. The open market value of this workshop on the 8th floor of Wah Wing Industrial Building, with vacant possession, as of today, was estimated as follows:

Miss Wong (A G Wilkinson)                                                           $1.4 million

Mr Cullen (Ian Cullen & Associates)                                                $1.13 million

35. I put the present day market value of Cheung Sha Wan Road at about $1.2 million.

36. As regards the open market rental value of Cheung Shan Wan Road as at 1 May 1986, Miss Wong puts it at $7,600 per month and Mr Cullen at $6,500 per month. It is plain therefore that a tenancy in favour of D4 at $2,000 per month is a gross undervalue.

37. There is, in fact, strong and direct evidence of an attempt to overreach as regards Wing Yip Street. An employee of a company called Omnichem Trading Company, a Miss Yip, was called to give evidence. Her evidence was to this effect. The company is presently the tenant of the Cheung Sha Wan Road premises; the current tenancy is for three years from 1 July 1987 at a rent of $7,000 per month; although the 'landlord' under that tenancy was purportedly Yim Chui Ling, D4, in fact Miss Yip who primarily dealt with the payment of rent had never come across Yim Chui Ling. However, she recognised D1 and D3 in court and said that it was D3 who generally went to collect the rent and that when the tenancy agreement (exhibit P6) was being prepared, it was D1 who negotiated with her. She (Miss Yip) thought that Dl was the 'landlady of the unit on the 8th floor'. The rent was paid by means of cheques and it was Dl and D3 who asked Miss Yip, in making out the cheques, not to cross out the 'bearer' on the cheque.

38. Mr Laurence Pang Ho-chuen put the open market rental value of Wing Yip Street as at 1 May 1986 at $4,500 per month. No comparable figures were produced to justify this valuation, nor was there any material put before the Court by which a comparison with the capital value could be made. I do not accept Mr Pang's valuation but, as can be seen, even on his figures, the purported rent of $2,000 per month in favour of D4 is a gross undervalue.

39. I have no hesitation in concluding that the purported tenancy of Wing Yip Street was concocted by Dl and D3 in order to overreach the interest of the husband, to which D4 was a knowing party.

40. As regards Wing Yip Street, this attempt to overreach was particularly serious. It will be recalled that as early as December 1983 there was an order for the sale of Wing Yip Street, the proceeds to be divided evenly between the husband and D1. Eventually, on 23 March 1987, the property was put up for auction. The problem was that, as at that time, the premises were apparently encumbered with the tenancy in favour of D4, with an option to renew from 1 May 1989 for three years at the rent of $2,400 per month. The highest price bid for the premises was $400,000, and the premises were accordingly withdrawn from the market unsold. It can be seen that the purported tenancy in favour of D4 has had a severely depreciating effect on the value of the Wing Yip Street premises.

Assignments of Half-Interest

41. The wife, instead of obeying the order of 28 July 1986 (requiring her forthwith to transfer a half-share in the three premises to the husband) executed assignments of half shares as follows:

42. Premises                                      Assignee                                      Date

Fat Tseung Street                              3rd defendant                              1 October 1986

Un Chau Street                                 4th defendant                               1 October 1986

Cheung Sha Wan Road                     3rd defendant                              3 November 1986

43. The solicitor who prepared all three assignments and acted for both assignor and assignee was Mr L H Kwan, whose offices were in the same building as the offices of the wife's solicitors, Messrs Kwan and Kwan. In the assignment of the half-share in favour of D4, she was described as a 'spinster of Flat F, third floor, 78 Un Chau Street, Kowloon' and purportedly purchased the half share for $70,000. There is no evidence as to who 'Yim Chui Ling' was, beyond the fact that, earlier, she had become allegedly the tenant of the Wing Yip Street and Cheung Sha Wan Road properties. According to D3, she was a total stranger prior to these transactions, as far as he was concerned. And yet, according to the assignment, she apparently paid $70,000 for an undivided half-share of the Un Chau Street flat. Why anyone would have wanted to pay $70,000 for an undivided half-share in the flat has never been explained: particularly someone who, if she had inspected the Land Office register, would have known that there was the order of 12 March 1984 affecting the property.

44. As regards the transfers of half-shares in Fat Tseung Street and Cheung Sha Wan Road by the wife to D3, D3 said that he paid 'cash' at the solicitors offices to his mother and that he regarded these transactions as pure investments in real estate. The solicitor, Mr L H Kwan, who apparently witnessed the execution of the assignments, was never called as a witness. I reject D3's evidence on this point. I do not believe for a moment that he paid any money to his mother as alleged and it was certainly not an investment in real estate as he alleged.

45. The wife is an old and illiterate woman. To what extent she fully appreciated that what she was doing was in wilful and in deliberate contempt of court is not something which I need to adjudicate upon in this case. But D3 is an intelligent young man and his participation in this clumsy scheme with his mother to injure the interests of the plaintiff, by taking an assignment of a half-interest from the mother in two of the three properties, is unworthy of him. What purpose he thought he was achieving by this clumsy device I do not know. The outcome is that he is now the registered co-owner together with the husband in respect of the Fat Tseung Street property and the Cheung Sha Wan Road property, and unless he consents to a sale of these premises there will simply be further proceedings under the Partition Ordinance and, inevitably, an order for sale by the Court: the premises being in the meanwhile yet further charged with legal costs. If there ever was a self-defeating exercise in futility, then what the mother and son have done in this case is a prime example of it.

46. I should add that if reinforcement of my conclusion that D2, D3 and D4 were knowing participants in breaches of trust be necessary, this can be found in the following facts: on 28 January 1987 Messrs P H Sin & Co wrote to 'the tenant' of the three premises giving notice that the assignment of the half-shares had been made by the Regisrar, and requiring the tenant to account for half the rent to the Plaintiff. This was followed by letters of 9 February 1987 addressed to each of D2, D3 and D4 requiring them to pay half the rent to the Plaintiff under the purported tenancy agreements. Not surprisingly, these letters have been totally ignored.

Legal Liability of the Parties

47. The wife was, at all material times, a trustee. From the time that the High Court adjudicated upon the rights of the husband and wife in the four premises, the wife was fixed with the liabilities of a trustee, holding the legal estate in respect of the four premises in trust for herself and the husband in equal shares. As regards Wing Yip Street, this was from 16 December 1983, when Mr Justice Power made the order of that date. As regards the three other premises, this was from 12 March 1984 when Mr Justice Power ordered the wife to transfer a half-interest in the premises to the husband. From those dates onwards, the wife was under a liability to account to the husband for a half-share of the rents and profits and to exercise care so that the husband's interest in the properties should not be damaged. The wife failed totally in the discharge of those duties. She failed to account and, from about the time when she realised that her delaying tactics in court would fail, she did everything possible to impede and frustrate the implementation of the court orders.

48. D1 is plainly liable in damages to the husband. In the writ in this case there is an alternative claim for accounts and enquiries but I do not see what purpose would be served if I were to make an order in those terms. Assume that I made an order that the defendant should, within, say, 21 days, make an affirmation and file the same in court stating the details of what rents and profits she has received from the four properties since the dates mentioned above, what is the likely effect? Almost certainly, given the history of this unfortunate matter, it would lead to further acts of contempt of court. There would then have to be contempt proceedings, and the court's punitive powers invoked. There would be further expense and delay. What the Plaintiff seeks is not the punishment of his former wife; he requires effective remedies so that he would receive at least something from these properties which he owns, before their value is wholly swallowed up by legal costs. It must follow that the sensible and just course is for me to assess the damages now, arising from the breaches of trust by Dl and the knowing participation in those acts by D2, D3 and D4.

Claim for Damages

49. The accounts which the wife has purported to render in relation to the four premises are based upon: (i) the purported rent payable under the four imputed tenancies and (ii) certain outgoings and expenses, including expenditures of a capital nature such as repairs.

50. As regards the imputed tenancies, I have already concluded that they were shams and must therefore be set aside by the Court. As regards the outgoings and repairs, the material which has been put before me is wholly inadequate. There are documents in the Defendant's bundle which could be construed as estimates or as receipts, but no witness has been called to substantiate any of these matters. I am not therefore prepared to act upon these bare photocopy bits of paper as proof of any substantial expenditure made by the wife in relation to any of the premises. On the other hand, there must, from time to time, be a certain amount of expenditure by way of outgoings and repairs for which the landlord would be responsible, and it seems sensible to make some allowance for this fact in any computation of damages.

51. Counsel for the plaintiff have put before me schedules with sophisticated computations for the deduction of rates and of property tax based upon certain putative receipts. Such an approach gives a semblance of exactitude in the computation, but as the wife has totally failed to render proper accounts, this approach is simply another way of attempting broadly to arrive at the truth. In these circumstances, it seems to me that the fairest approach is to view the matter broadly: that is to say, to take a reasonably conservative figure for the rent which these premises might have been expected to have yielded, with, perhaps, a small allowance for the fact that premises do not necessarily become tenanted over the entirety of a long period of time. There will be occasions when premises become untenanted - though I do not accept, for a moment, the so-called accounts of the wife which purport to show that for the whole of the calendar year 1985 the Wing Yip Street premises were unoccupied.

52. As regards Un Chau Street, it appears that at all material times this flat was occupied by the wife. It is quite possible that during at least part of the period (that is, from the date of Mr Justice Power's order of 12 March 1984 until today), it might have been occupied also by the son. There is, as regards Un Chau Street, no question of the wife having to account for actual rent received (though I note that D4 was described as living at that address and could therefore have been paying some sort of rent) and the fairest way of dealing with Un Chau Street is to attribute a rental value to those premises and, after deductions, to make an order for payment against the wife as to one half by way of damages.

53. My approach, therefore, broadly is as follows:

(i)    to take a reasonably conservative figure by way of rental yield, with some allowance for the possibility that the premises may not be tenanted for the whole of the period in question;

(ii)    to make a deduction from the gross figure computed on the basis of (i) above for outgoings such as property tax, repairs and, in the case of Un Chau Street for the payment of rates as well.

Fat Tseung Street

54. Adopting the approach as outlined above, I compute the gross rental yield from Fat Tseung Street for the period from 12 March 1984 to l April 1986 (the date of the impugned tenancy agreement) at $250,000. With a deduction of 20% for property tax and other outgoings, I reach a net figure of $200,000. Therefore, the amount of damages for which the wife is liable to pay for this period is $100,000.

55. Using the same approach, and having regard to the increase in rental value for the period from 1 April 1986 until today, I compute the gross rental yield at the figure of $400,000 and, after deducting 20% for property tax and other outgoings, the net rental yield is $320,000. The damages which the wife is liable to pay in this regard is therefore $160,000. I should add that, as from 23 January 1987, the wife was in the position of a trustee de son tort: she no longer held the legal estate, but continued in receipt of the income from the property and continued therefore liable to account as a trustee.

56. As D2 had, upon the findings as I have made above, knowingly assisted the wife in depriving the husband of his entitlement to a half-share, D2 is jointly liable to pay the damages of $160,000 with the wife.

Un Chau Street

57. For the period from 12 March 1984 until 15 April 1986 (the date of the impugned tenancy agreement) the gross rental income which this flat might reasonably have been expected to have yielded would have been the sum of $40,000. With a deduction of 20% for rates, property tax and outgoings, the net benefit which the wife has received, in money terms, from the possession of the flat to the exclusion of the husband can be put at a figure of $30,000. The damages would therefore work out for this period to the figure of $15,000.

58. For the period from 15 April 1986 to today's date, the Un Chau Street flat could reasonably have been expected to have yielded a further $100,000 and, with the same deductions for outgoings as stated above, the net yield can be put at the figure of $75,000. Accordingly, the damages work out to the sum of $37,500 for which the wife and the third defendant are jointly responsible to pay.

Cheung Sha Wan Road

59. For the period from 12 March 1984 to 1 August 1986, adopting the approach as indicated above, this flat could reasonably have yielded the gross sum of $60,000. With a deduction of 20% for property tax and other outgoings, the gross yield is $48,000. Accordingly, the damages for which the wife is liable to pay is the figure of $24,000.

60. As regards the period from 1 August 1986 (the date of the impugned tenancy agreement to today's date, these premises could reasonably have yielded a gross figure of $80,000 and, with a 20% deduction, it works out to a figure of $64,000. Accordingly, the wife and the fourth defendant are jointly liable to pay to the husband the sum of $32,000 by way of damages.

Wing Yip Street

61. From the date of the order for sale (16 December 1983) to 1 May 1986 (the date of the impugned tenancy agreement) the Wing Yip Street premises might reasonably have yielded a gross rental income of $100,000 and, with a deduction of 20% for property tax and other outgoings the net yield for this period would be $80,000. The damages for which the wife is liable to pay are therefore the sum of $40 000.

62. For the period from 1 May 1986 until today's date, the Wing Yip Street premises could reasonably have yielded a further $200,000 and, with a 20% deduction it works out at a figure of $160,000. Accordingly, the damages which the wife and D4 are liable to pay is the sum of $80,000.

Damages : Generally

63. There will therefore be judgment for damages as follows:

As against Dl :                       $488,500

As against D2 :                      $160,000

As against D3 :                      $ 37,500

As against D4 :                      $112,000

64. But, of course, in so far as Dl satisfies the judgment for damages against her, then the liability of D2, D3 and D4 would, to that extent, be discharged in accordance with this judgment.

65. The money judgment against the wife can, of course, be charged against her half-share in the Wing Yip Street premises and be satisfied out of the proceeds of sale. Likewise, the money judgments against D3 and D4 can be charged against their respective half-shares in the three premises under Order 50 of the RSC, and orders for sale can be made, with the concurrence of the Plaintiff, by way of equitable execution. It may not therefore be necessary for the Plaintiff to embark upon any further forensic adventure in this case.

Sale

66. Mr Mills-Ovens Q.C., counsel for the plaintiff, submits (tentatively) that I should make an order for the sale of the three premises (upon the assumption that the impugned tenancies are set aside by order of the Court) so that the premises can be sold at today's relatively high prices, and the proceeds distributed. The only provision of law to which Mr Mills-Owens has directed me, empowering a court to order sale (apart from the provisions of the Partition Ordinance) is Section 56 of the Trustee Ordinance. I do not see how Section 56 can assist in this regard. Section 56 deals with a situation where a trustee, vested with trust property, lacks the power of sale and, in these circumstances, the Court 'may by order confer upon the trustee, either generally or in any particular instance, the necessary power for the purpose'.

67. I cannot see how Section 56 of the Trustee Ordinance can apply as things stand today. In the Land Office register, the registered owners of the premises are as follows:

Premises                                                Owner

Fat Tseung Street                                              Plaintiff and D3

Un Chau Street                                                 Plaintiff and D4

Cheung Sha Wan Road                                     Plaintiff and D3

Wing Yip Street                                                the wife.

68. There is already an order for sale as far as Wing Yip Street is concerned. As far as the other three premises are concerned, no one is now holding a half-share in trust for the plaintiff. The reality is that the plaintiff has found himself a co-owner with D3 in respect of the Fat Tseung Street and Cheung Sha Wan Road premises, and with D4 in respect of the Un Chau Street premises. If it were within my power to order a sale (in lieu of physical partition of these flats, under the provisions of the Partition Ordinance), I would have no hesitation in so doing. Counsel representing the plaintiff might wish to consider what application they can make for an amendment of the Statement of Claim so that the necessary orders under the Partition Ordinance can be made. But, as I have indicated above, this might not be necessary since, in satisfaction of a charge on an interest in land, a court has plainly a power of sale under Order 50 of rule 9A of the RSC.

Appointment of Receiver

69. The Court has power, under Section 21L of the Supreme Court Ordinace, to appoint a receiver whenever it considers it just or convenient to do so. It is difficult to think of circumstances more appropriate than the present case for this relief to be granted: expensive though it may turn out to be for the parties involved. A receiver has already been appointed in respect of Wing Yip Street; I accede to the application in respect of the three premises.

Conclusion

70. I express the hope that this judgment will, at last, bring to an end the unfortunate litigation between the husband and wife which goes back to 1983. The outrageous behaviour of the wife might, perhaps, be partially explained by ignorance, infirmity of mind and old age (she has put in a psychiatric report in her bundle of documents concerning her mental condition). But D3 has no such excuse. He is now registered as a co-owner of Fat Tseung Street and Cheung Sha Wan Road with the Plaintiff. D3 ought to know that any attempts hereafter by him to frustrate the execution of lawful orders of the Court will result in harsh punishment. As regards the behaviour of Dl's former solicitors, and the solicitor who effected the assignment of half-shares, that is something the Court may have to look into upon the conclusion of these proceedings.

71. I will now hear counsel as to the terms of the orders I should make. I should add that the formal orders must be carefully drawn up, so as to leave nothing to be implied if acts are required to be done by anybody hereafter. There is also the question of interest and costs.