MO YING v. BRILLEX DEVELOPMENT LTD AND ANOTHER

FAMV No. 48 of 2015

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO.48 OF 2015 (CIVIL)

(ON APPLICATION FOR LEAVE TO APPEAL FROM
CACV 120 OF 2014)

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REASONS FOR DETERMINATION

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Mr Justice Ribeiro PJ:

1. At the hearing we dismissed this application for leave to appeal.  These are our reasons.

2. The applicant Mo Ying (‘W’) married Chan Wai Tim (‘H’), the 2^nd respondent, in Hangzhou in 1987.  W came to Hong Kong in December 1988.  Before she arrived, H bought the property in question in his sole name in June 1988.  He paid the deposit and arranged a mortgage.  Then he made the mortgage repayments, partly financing them with rentals from sub-letting rooms in the flat.  The property served as the matrimonial home.  Shortly after W arrived in HK, she asked H to add her name as owner of the property.  H declined and she did not pursue this.  She believed that as a wife, she had some sort of beneficial interest in the property.

3. In July 2008, H sold the property to Brillex (‘B’), the 1^st respondent.  They remained in the flat which they leased back from B until H defaulted on the rent in July 2010.  In September 2010, B brought proceedings to recover possession and W intervened, claiming a beneficial interest in the property.  On 30 January 2011, W commenced divorce proceedings against H.  B intervened in those proceedings.

4. After H sold the property to B in July 2008, he used the proceeds to purchase three properties in Tai Po, one of which has been sold.  W claims financial relief in the divorce proceedings in respect of the other two properties.

5. In the present proceedings, W claims a beneficial interest in the original property (which has long been sold) on the basis of a common intention constructive trust (‘CITC’).  H has throughout been unrepresented and the litigation has essentially been between W (on legal aid) and B.  

6. W contends that a CICT arose either expressly, based on a discussion she had with H soon after she came to Hong Kong; or by inference from the fact of her marriage, her contributions to household expenses and her looking after the family.

7. W’s action was dismissed at first instance[1] and her appeal was dismissed by the Court of Appeal[2] which also refused leave to appeal.[3]  She faces concurrent findings against the existence of any common intention[4] capable of founding a CICT.  No grounds have been disclosed for inviting the Court to re-visit those concurrent findings.

8. The applicant’s Questions 1a-1c which purport to be questions of great general or public importance are, contrary to the submissions of Mr William Wong SC[5], in fact attempts to challenge the adverse concurrent findings regarding an express CICT.  As the Court of Appeal held in refusing leave, the decision was solely factual.[6]

9. The Court of Appeal thought that Questions 2a and 2b potentially raised important issues as to whether “the concept of fairness and equality underlying a marriage relationship should be taken into account” and “whether general financial and non-financial contribution to the family, albeit not specifically referable to the property should be taken into account”.  They held, however, that those questions are not reasonably arguable because W is estopped from asserting her claim against B.[7]

10. The property was sold pursuant to a provisional agreement entered into on 18 July 2008, with the purchase completed on 29 October 2008.  W had known of the sale but did nothing to assert a beneficial interest in the property, standing by while the purchaser proceeded to complete. She also acquiesced in the purchaser entering into a lease back agreement with H.

11. As Yuen JA pointed out:

“The evidence in the present case was that the wife had been informed of the husband’s sale of the property some four weeks before completion. Yet she had stood by and let her husband complete the sale and receive the proceeds from a third party who had parted with the purchase money in good faith. Her explanation was that she had wanted to save her marriage; in other words, she chose to go along with the husband’s decision to sell the property and in return (to comply with her wish to continue living in North Point) he rented the property back for her to continue living there. That was a course that the wife chose with knowledge that the sale had not yet been completed and despite her belief that she had a beneficial interest in the property.”[8]

12. Cheung JA similarly noted that:

“... the wife must have a duty to speak up once she realized that the husband had agreed to sell the property to the purchaser and further agreed with the purchaser to lease back the property. As a result of her silence the purchaser had completed the sale. The purchaser must have been prejudiced by the wife’s conduct when they could have sought to rescind the sale if the wife had informed it of her interest.”[9]

13. Although Mr Wong SC sought to suggest otherwise, there is no doubt that the Judge found that W knew of H’s sale of the property before completion and that she stood by without objection.  His Lordship stated:

“I find that on a day between 18 July 2008 (the date when the Provisional SPA was signed) and 29 October 2008 (date of completion of the sale and purchase of the Property), the Wife visited Yue Kee and spoke to Mr Chu. On that occasion, the Wife asked Mr Chu whether the Property had been sold. Mr Chu told the Wife that the Husband had already sold the Property for HK$1,750,000 and that the Provisional SPA had already been signed. Having heard Mr Chu’s response, the Wife left Yue Kee without protest or making any objection to the sale.”[10]

“The exact date on which the Wife learned about the sale of the Property is not important. It is sufficient for me to find that the Wife knew about the sale of the Property on 1 October 2008 at the latest.”[11]

14. The Judge also found that in October 2008 or shortly afterwards, she knew that there was some lease arrangement in respect of the property.[12]

15. Kwan JA referred to these findings and concluded:

“... there was ‘positive conduct’ of the wife to found representation, alternatively her silence or inaction had acquired a ‘positive content’ in that not only had she raised no objection to the sale, she had permitted or consented to the husband entering into a lease back arrangement with the purchaser. Asking the question of the reasonable man, given this additional factor, the purchaser could ‘reasonably assume’ that no adverse title or interest would be claimed as whoever who might have an interest in the property was content to have the property leased back to the husband.”[13]

16. The Court of Appeal were plainly right to hold that W is now estopped from contesting B’s title, so that Questions 2a and 2b are academic and not reasonably arguable on the facts found.

17. The other proposed questions (Question 3 on whether detriment is needed for a CICT; and Question 4 on the effect of a failure to inspect the property on the defence of estoppel) both assume the factual existence of a common intention founding a CICT.  Given the contrary concurrent findings, Questions 3 and 4 are never reached.

18. We accordingly dismissed the application with costs.  We directed that W’s own costs be taxed in accordance with the Legal Aid Regulations.