POON MEI YUNG v. CHOI OI YAU

DCCJ 964/2023

[2024] HKDC 1229

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 964 OF 2023

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JUDGMENT

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1.  The Plaintiff and the Defendant are daughter and mother related by blood. In this action, the Plaintiff seeks to establish her proprietary interest in the suit property, namely Flat B on 2^nd Floor and Flat Roof, Mei Lai Building, 10 Wan Tau Kok Lane, Tai Po, New Territories (“Subject Property”), which has been registered in the sole name of the Defendant.

2.  The Plaintiff relies on common intention constructive trust, resulting trust and/or proprietary estoppel.

Trial in Defendant’s Absence

3.  On 19 April 2021, the Plaintiff commenced this action in the High Court.

4.  In 2023, this action was transferred from the High Court to this court.

5.  The Defendant did not file any Acknowledgment of Service of Writ of Summons, Defence or witness statement. Suffice it to say that the Defendant has never participated in this action.

6.  Pursuant to the Order made at the Case Management Conference on 22 December 2023, the Plaintiff’s solicitors, on 16 February 2024, affixed the Notice of the Pre-Trial Review and the Notice of Trial at a conspicuous part of the Subject Property, and administered personal service of the said notices on the Defendant. Notably, during personal service, the Plaintiff was present with the Defendant, and the Defendant positively identified herself.

7.  Yet, the Defendant did not turn up at the Pre-Trial Review on 18 March 2024.

8.  Pursuant to the Order made by Deputy District Judge B Mak at the Pre-Trial Review, the Plaintiff served the trial bundles on the Defendant on 25 April 2024.

9.  At trial, the Defendant did not appear. This Court was satisfied that the Plaintiff had taken all reasonable steps to notify the Defendant of the date of this trial, and ordered that the trial be proceeded with in the absence of the Defendant pursuant to Order 35 rule 1 of the Rules of the District Court (Cap 336H, sub leg).

10.  As the Defendant never participated in this action, the Plaintiff’s claim was uncontested. That said, the Plaintiff still has to discharge the burden of proving her case with evidence, and the duty of fair presentation. In Link Fish Import & Export SL v Multiply Import & Export HK Ltd [2023] HKCFI 2758, Deputy High Court Judge Winnie Tsui (as she then was) set out the following legal principles:-

“81. In his opening submissions, Mr Brown drew to the court’s attention the correct approach to a trial where the defendant fails to attend.

82. The plaintiff must still prove on the balance of probabilities the various elements of his claim: The Financial Conduct Authority London Property Investments (UK) Limited [2022] EWHC 2862 (Ch) at para 6.

83. There is also an obligation of fair presentation, which is less extensive than the duty of full and frank disclosure in an ex parte application:

(1) The plaintiff should identify points of factual or legal note which may be of benefit to the defendant;

(2) The plaintiff should not pursue claims which are not sustainable;

(3) The plaintiff should identify to the court points which the defendant had taken before it decided to play no further part in the action; and

(4) The plaintiff should also consider, and bring to the attention of the court, points which had not been taken by the defendant but which might well have been had it decided to defend the proceedings.

84. See, eg, the discussion in China Citic Bank International Ltd v Cheuk Shuk Hing [2022] HKCFI 3646 at para 6.”

Fact-finding and assessment of credibility

11.  The following principles on fact-finding and assessment of credibility set out by Deputy High Court Judge Eugene Fung SC (as he then was) in Hui Cheung Fai and Another v Daiwa Development Ltd and Others HCA 1734/2009, unreported, 8 April 2014 and cited by Deputy District Judge G Chow (as she then was) in So Ho Yee v Hui Mamie [2023] HKDC 1847 (at paragraph 54) are pertinent:-

“77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce) …

78. In deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: e.g. Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5 May 2011) §39 (Chu J).

79. In determining a witness’ credibility, I have also attached importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses (Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §§36-37 (Bokhary PJ)), or from the assessment of the witnesses’ character (Esquire (Electronics) Ltd v HSBC [2007] 3 HKLRD 439 at §135 (Stock JA))…”

12.  In So Ho Yee (supra), Deputy District Judge G Chow (at paragraph 55) also took heed of the following observations of the English Court of Appeal in NatWest Markets Plc v Bilta (UK) Ltd (In Liquidation) [2021] EWCA Civ 680:-

“49. In a case such as the present, where the events in question took place over 9 years before the trial and occurred in a narrow period of around 3 weeks, the salutary warnings about the recollections of witnesses in Gestmin SGPS SA v Credit Suisse UK Ltd [2015] EWHC 3560 at [22] and Blue v Ashley [2017] EWHC 1928 at [68] are pertinent. It was therefore of paramount importance for the Judge to test that evidence against the contemporaneous documents and known or probable facts if and to the extent that it was possible to do so.

50. We say, ‘if and to the extent that it was possible to do so’, because it is important to bear in mind that there may be situations in which the approach advocated in Gestmin will not be open to a judge, or, even if it is, will be of limited assistance. There may simply be no, or no relevant, contemporaneous documents, and, even if there are, the documents themselves may be ambivalent or otherwise insufficiently helpful. The case could be one about an oral promise which turns entirely on the word of one person against another’s, and the uncontested facts may well not point towards A’s version of events being any more plausible than B’s. …

51. Faced with documentary lacunae of this nature, the judge has little choice but to fall back on considerations such as the overall plausibility of the evidence; the consistency or inconsistency of the behaviour of the witness and other individuals with the witness’s version of events; supporting or adverse inferences to be drawn from other documents; and the judge’s assessment of the witness’s credibility, including his or her impression of how they performed in the witness box, especially when their version of events was challenged in cross-examination. Provided that the judge is alive to the dangers of honest but mistaken reconstruction of events, and factors in the passage of time when making his or her assessment of a witness by reference to those matters, in a case of that nature it will rarely be appropriate for an appellate court to second-guess that assessment.”

13.  Three witnesses testified for the Plaintiff’s case, namely:-

(1)  the Plaintiff 潘美容herself;

(2)  Mr Poon Chun Ho（潘春好）(“Mr Poon”), being the youngest of the six children of the Defendant, as well as the youngest brother of the Plaintiff; and

(3)  Madam Yip Kit Wah（葉潔華）(“Madam Yip”), a former colleague of the Plaintiff,

and all three witnesses adopted their respective witness statement.

14.  The Plaintiff was allowed to amplify and explain some aspects of her evidence including her earnings and savings which enabled the acquisition of the Subject Property, her remittance of money for the outgoings, maintenance and repairs of the Subject Property after emigration, as well as the Defendant’s knowledge of and attitude towards this action. One key feature of this action is the relative lack of contemporaneous documents showing the precise beneficial ownership of the Subject Property between the parties. That said, the Plaintiff adduced (a) a bank passbook of the bank account maintained with the Kwangtung Provincial Bank held under the joint name of the Defendant and Poon Chun Hei（潘春喜）, the Plaintiff’s second youngest brother, (b) some invoices and receipts for home maintenance and repairs of the Subject Property, and (c) some documents and records from the Incorporated Owners of Mei Lai Building. The Plaintiff intended the said documentary evidence to support her evidence that the outgoings and costs of maintenance and repairs of the Subject Property were settled by her notwithstanding her emigration to the United Kingdom in the 1990s.

15.  In my view, the Plaintiff was an honest and credible witness, and, as I say further below, her evidence is supported by the available contemporaneous documents and corroborated by the evidence of Mr Poon and Madam Yip, and is also inherently and on balance of probabilities credible. I accept the Plaintiff’s evidence in full.

16.  On the other hand, the duration of the course of the evidence in court of Mr Poon and Madam Yip was understandably short. Nonetheless, I was still able to come to the view that both Mr Poon and Madam Yip were straightforward and credible witnesses. Mr Poon testified that he had known from the Defendant and the Plaintiff and also during family discussions that the Plaintiff had always been the breadwinner of the family, and as a result of the Defendant’s request and out of filial piety, the Plaintiff had accepted to register the Subject Property in the sole name of the Defendant notwithstanding that the Subject Property had been her acquisition with her own funds for the purchase price, mortgage instalments, outgoings and maintenance costs, while the Defendant had also agreed to assign the Subject Property to the Plaintiff upon the Plaintiff’s request in the future. Madam Yip was frank that due to the passage of time, she could only remember that the Plaintiff had requested her more than once to prepare application letters by typewriting for early payment of mortgage instalments, but she forgot the name of the mortgagee bank. I accept the evidence of Mr Poon and Madam Yip in full.

17.  By reason of my acceptance of the evidence of the Plaintiff and her witnesses, I find the matters set out below to be the facts.

The facts

18.  The Plaintiff was the eldest among the six children of her parents, ie 潘洪 (“the Father”) and the Defendant.

19.  The six children of the Father and the Defendant were:-

(1)  the Plaintiff, born in 1963;

(2)  潘美霞, a daughter born in 1965;

(3)  潘美儀, a daughter born in 1966;

(4)  潘春明, a son born in 1969;

(5)  the said Poon Chun Hei, a twin son born in 1971; and

(6)  Mr Poon, another twin son and the younger twin brother of the said Poon Chun Hei born in 1971.

20.  The Plaintiff used to reside with the Father, the Defendant and her two younger sisters and three younger brothers in a village house in Yiu Tsz Yin Village（陶子����村）and lead a simple life.

21.  In about 1976 when she was about 13 years old, the Plaintiff joined the workforce and started earning money for herself and her family. The Plaintiff began working in a factory manufacturing cloth and silk flowers. At that time, the Father stopped working due to deterioration of health, while the Defendant was a housewife taking care of the children, and so the Plaintiff became the sole breadwinner of the family.

22.  Around two years later, the Plaintiff changed to work in the factory of a garment-manufacturing company. During the first three years, she was a garment maker and could earn as much as $6,000 per month. Having deducted family contributions from her salary, the Plaintiff was able to have some savings. The Plaintiff testified that at that time, when she earned $2,000 odd per month, she would give $2,000 to the family and keep a few hundred dollars as savings, and subsequently when she earned more, she would give around two-thirds of her salary to her family and keep the remaining one-third as her savings.

23.  Having worked as a garment maker for about three years, the Plaintiff was promoted to become a supervisor, and her monthly salary could reach as high as $7,000 to $8,000. At the same time, the Plaintiff took up part-time jobs in the same industry and her monthly income could exceed $10,000. The Plaintiff stayed at this position until around 1988. The Plaintiff further testified that during this period as a supervisor, she would give a few thousand dollars per month to the Defendant as her family contribution and keep the rest as her savings, and sometimes she would also accompany the Defendant to go to the wet market and buy groceries and pay out of her own pocket.

24.  Meanwhile, the Father passed away in 1982.

25.  In around 1984, the Government informed the Plaintiff’s family of the plan to redevelop the lands at Yiu Tsz Yin Village and to rehouse the Plaintiff’s family to a public housing estate in Tai Po. As a result, and considering the savings she had, the Plaintiff intended to acquire a property. The Plaintiff shared her intention with the Defendant and her siblings, and they all agreed with the Plaintiff. Since her siblings were still young and required financial support, the Plaintiff decided that her family members could reside at the property to be acquired.

26.  In the same year, the Plaintiff became interested in the Subject Property which was still under construction. The asking price was $495,000. The Plaintiff informed the Defendant of her intended acquisition of the Subject Property, and the Defendant supported her decision.

27.  In about 1985, the Plaintiff paid $1,000 as deposit for the Subject Property.

28.  By around 1986, the Plaintiff had accumulated savings of around $200,000, so she intended to obtain a bank mortgage for a loan of around $200,000 in order to pay the purchase price of the Subject Property, and the mortgage instalments would be settled by her.

29.  Sometime before the signing of the sale and purchase agreement for the Subject Property, the Defendant requested the Plaintiff to allow her to be the sole owner of the Subject Property even though she was not expected to pay any consideration for the acquisition. The Defendant expressed that she made the request for some reassurance that the Plaintiff would, out of loyalty and filial piety, continue to provide financial support and accommodation to the Defendant and the Plaintiff’s siblings even after her marriage, whilst she knew that the Plaintiff would be the real owner in substance of the Subject Property. The Defendant further agreed that she would assign the Subject Property to the Plaintiff at the latter’s request in the future, when the Defendant became old. (“The Request”)

30.  The Plaintiff agreed with the Request, and expressly allowed the Defendant to continue to reside at the Subject Property even after her marriage. On 17 October 1986, an agreement for sale and purchase was signed by the Defendant as the purchaser of the Subject Property at the consideration of $495,000. On the same day, an Equitable Mortgage in respect of the Subject Property was executed with the Defendant being the Mortgagor, both the Defendant and the Plaintiff as the Requesting Party and the Kwangtung Provincial Bank as the Mortgagee, for banking facilities to the extent of $200,000 in order to pay the consideration of the Subject Property.

31.  The Plaintiff paid all mortgage instalments and expenses for the acquisition of the Subject Property. Initially, the monthly mortgage instalment was $2,500. The Plaintiff further testified that mortgage payments were made by way of monthly direct debit from her bank account maintained with the Kwangtung Provincial Bank, but due to the passage of time the relevant bank statements had been disposed.

32.  On or about 20 May 1987, when the construction of the Subject Property was completed or almost completed, an Assignment in respect of the Subject Property was executed with the Defendant as the purchaser, and a Charge in respect of the Subject Property was executed with the Defendant being the Mortgagor, both the Defendant and the Plaintiff as the Requesting Party and the Kwangtung Provincial Bank as the Mortgagee, for banking facilities to the extent of $200,000.

33.  As a result, the Plaintiff and her family members (save and except 潘美霞 who resided at the public housing estate in Tai Po) moved into the Subject Property. The Plaintiff was responsible for paying Government rent and rates, utility bills, management fees and costs of maintenance and repairs.

34.  In around 1988, the Plaintiff was promoted to be a factory manager, earning over $10,000 per month. In addition, the Plaintiff was paid bonuses and overtime payments. The Plaintiff testified that being a factory manager, she would pay around $3,000 per month to the Defendant as her family contribution and keep the rest to herself. At that time, her two younger sisters were at the workplace, each of them making a monthly family contribution of $1,000.

35.  The Plaintiff further testified that during her employment with the garment-manufacturing company, her salaries, bonuses and overtime payments were always paid in cash, and the factory never provided any employment proof or payroll to employees. The Plaintiff and the other employees had to record their daily work attendance with the time clock, but all such records belonged to the company and the Plaintiff did not have a copy of her work attendance record.

36.  In February 1989, the Plaintiff got married, and continued to reside at the Subject Property with the Defendant and her siblings.

37.  Meanwhile, the Plaintiff had always intended to emigrate for the United Kingdom after marriage, but the Defendant had intended to stay in Hong Kong and reside at the Subject Property. Contemplating that she might not be able to find a good job with stable income upon arrival at the United Kingdom, the Plaintiff decided to pay off the mortgage over the Subject Property with her savings before her emigration. Hence, whenever she had saved a certain amount such as $30,000 to $40,000, the Plaintiff would make early mortgage payments to the bank. To do so, the Plaintiff would find Madam Yip, who had a better command of the English language, to prepare application letters to the bank by typewriting for early payment of mortgage instalments. However, due to the passage of time, the Plaintiff has not kept copies of the said application letters.

38.  Eventually, in around May 1989, the Plaintiff had paid off the Charge over the Subject Property, and a Deed of Release was executed on 4 May 1989. I say a bit more on the payment of the purchase price including mortgage instalments below.

39.  In around March 1990, the Plaintiff emigrated to the United Kingdom. The Defendant continued to reside at the Subject Property, while the Plaintiff’s other siblings gradually moved out of the Subject Property upon coming of age or becoming financial independent.

40.  After her emigration, the Plaintiff, who ran a takeaway food business, remitted money from the United Kingdom to the said joint bank account of the Defendant and Poon Chun Hei for the Defendant’s subsistence and for the costs of maintenance and repairs of the Subject Property. The Plaintiff further testified that she remitted money whilst she was in Birmingham or London where the branches of the relevant banks were available, and so she did not remit money on a regular basis. The utility bills of the Subject Property were settled by Poon Chun Hei with the Plaintiff’s money, though some of the bill accounts were in the name of the Defendant for her residential proof.

41.  The said bank account was closed sometime later, and Poon Chun Hei withdrew the money and handled the same.

42.  In November 2019, the Plaintiff settled back in Hong Kong. Since then, she has been residing with the Defendant at the Subject Property and taking care of the Defendant physically and financially.

43.  In 2020, as the Defendant (born in 1928) was getting old, the Plaintiff requested the Defendant to assign the Property. The Defendant agreed. However, when the Plaintiff took the Defendant to a law firm later in the same year, the Defendant refused to execute the assignment of the Subject Property and did not disclose the reason for her refusal. The Plaintiff repeatedly made the same request (including once in the first half of 2023) but every time the Defendant refused to respond and pretended that she could not hear or did not understand.

44.  Therefore, the Plaintiff commenced this action in 2021.

45.  The Plaintiff testified that the Defendant knew about this action, and they had discussed about it but the Defendant refused to assign the Property. Although the Defendant could only read simple Chinese, she could certainly speak, hear and understand Chinese. Moreover, whenever the Plaintiff’s solicitors served legal documents, they would explain the nature of the documents to the Defendant and inform her the hearing dates.

46.  In April 2022, Poon Chun Hei emigrated for the United Kingdom, and the Plaintiff took over the task of paying utility bills.

Issues

47.  The issues for determination are:-

(1)  Issue 1 – Was there any common intention held between parties over the acquisition of the Subject Property and, if so, what was the common intention.

(2)  Issue 2 – Whether the common intention was acted on.

(3)  Issue 3 – Whether the Subject Property, which is currently registered in the sole name of the Defendant, is held by the Defendant on trust for the Plaintiff under common intention constructive trust, resulting trust and/or proprietary estoppel.

(4)  Issue 4 – What relief should be ordered if liability is established.

Legal Principles

48.  A succinct summary of the legal principles on common intention constructive trust, resulting trust and proprietary estoppel can be found in So Ho Yee (supra):-

“49. The applicable principles to common intention constructive trust are not in dispute between the parties. Although various authorities have been cited by counsel, I would gratefully adopt the succinct and useful summary of Deputy High Court Judge Alexander Stock SC in Leung Hang Lin and Li Kwai Fuk v Lam Mei Yung [2019] HKCFI 2819 at §8:

“In summary:

(1) The starting point is that equity follows the law. There is a presumption that the beneficial interest follows the legal interest. Where the property is registered in a defendant’s name, the plaintiff bears the burden of showing, on the balance of probabilities, that the defendant held the property on trust for him or her such that the beneficial ownership differs to the legal ownership. See: Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9, §44; Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985, §5.16; Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, §17.

(2) The burden may be discharged by showing that: (i) there was a common intention held by the plaintiff and the property owner at the time of the purchase (or exceptionally, thereafter) that the beneficial ownership was to be different to the legal ownership; (ii) the plaintiff altered his or her position in detrimental reliance upon the common intention; and (iii) it is unconscionable for the property owner to assert ownership in reliance on the legal title. The constructive trust is constituted by the plaintiff’s detrimental reliance on the common intention and the unconscionability of the legal owner departing therefrom. See: Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1, §38; Liu Wai Keung, §46.

(3) The approach to ascertaining common intention is objective. One looks to the intention of each party which was reasonably understood by the other party to be manifested by the first party’s words and conduct. See: Liu Wai Keung, §47; Mo Ying, §5.16.

(4) The doctrine is sometimes described as having two limbs. First, where at any time prior to the acquisition (or exceptionally, at a later date), there is an agreement, arrangement or understanding reached between the parties as to how the property is to be held beneficially, based on evidence of express discussions. Second, where there is no evidence to support such a finding but the court relies on the parties’ conduct as a basis from which to infer a common intention. There is some authority that under the second limb, direct contributions to the purchase price by a party who is not a legal owner will readily justify the inference. See: Mo Ying, §5.8; Primecredit, §§2.3 and 2.4.

(5) However, the modern approach is to assess the parties’ common intention by a holistic approach having regard to the context and the particular facts. The court is not constrained to consider only pure direct monetary contributions to the purchase price. In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters. See: Mo Ying, §§5.14 and 5.15; Primecredit, §1.6.”

50. Moreover, there are authorities to the effect that where both parties allege express discussion and actual intention as to where the beneficial interest lies, there is little scope for the operation of a resulting trust: see Leung Hang Lin, §103 and Liu Wai Keung, §45.

51. In Primecredit Ltd, §2.3, it was also held that at least in the domestic context, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust.

…

52. P also relied upon proprietary estoppel. In Cheung Lai Mui v Cheung Wai Shing [2020] 2 HKLRD 15 at §5.4, it was held that the requirements for proprietary estoppel are:

(1) A representation or assurance made to the claimant;

(2) Reliance on it by the claimant; and

(3) Detriment to the claimant in consequence of his/her reasonable reliance.”

49.  Further, a resulting trust may arise where:

(1)  A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested in B alone or in the joint name of A and B. By operation of law there is a presumption that A did not intend to make a gift to B. The money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. The presumption of resulting trust can be rebutted by direct evidence that A intended to benefit B, or by a counter-presumption of advancement (which may be rebutted by evidence).

(2)  Where A transfers money to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest.

See, for example, Leung Ching Wai v Li Yun Lim The Sole Executor of the Estate of Ng Bo Chuen, Deceased & Another [2023] HKDC 459, at paragraph 42.

50.  From the principles above, it is clear that the burden is on the Plaintiff to show that the Defendant holds the Subject Property on trust for her.

Issue 1 – Common Intention

51.  The Plaintiff’s case is that by reason of her acceptance of the Request, there was an express agreement, common intention and/or mutual understanding between the Defendant and her that she is the sole beneficial owner of the Subject Property, and that as a result she would solely pay for all the purchase price and acquisition costs of the Subject Property, the mortgage instalments, the government rent and rates, management fees and other outgoings related to the Property, and that the Defendant would convey or assign the legal title, right and interest of the Subject Property to her upon her request at nil costs and expenses (“the Common Intention”).

52.  The Plaintiff was the eldest among all the six children of the Father and the Defendant. She joined the workforce when she was at the age of about 13 in 1976, and since then had been the sole breadwinner of her family. In about 1978, the Plaintiff started to work in the garment-manufacturing company and, since then to about 1986, she had received one job promotion and had been making more earnings due to salary increment and part-time jobs. At the same time, she was able to make regular financial contributions to her family. Meanwhile, the Defendant had been a housewife taking care of the children, whilst the two younger sisters of the Plaintiff had not begun working until around 1988.

53.  In my view, against such background, it was highly likely that the Plaintiff and the Defendant contemplated that the purchase price (including mortgage instalments) and acquisition costs of the Subject Property, as well as all the government rent and rates, management fees, outgoings and costs of maintenance and repairs related to the Subject Property would be paid by the Plaintiff. Moreover, given that the Defendant and the other siblings were financially dependent on the Plaintiff, it is inherently plausible that the Defendant made the Request so that with the Subject Property (being the most valuable asset of the Plaintiff) registered under her name, the Plaintiff would, even after her marriage in the future, feel obliged to continue to provide financial support and accommodation to her family. That said, as the acquisition of the Subject Property would be fully funded by the Plaintiff, and given that the Plaintiff’s siblings would gradually grow up and be able to take care of themselves, it is inherently plausible that the Defendant intended to hold the Subject Property as a matter of formality only and with no beneficial interest thereof, and to assign the same to the Plaintiff at the Plaintiff’s request in the future. From the perspective of the Plaintiff, given that the Plaintiff had always been filial and committed to the well-being of her family, it is likely that the Plaintiff acceded to the Request.

54.  The existence of the Common Intention is also supported by Mr Poon’s evidence summarised in paragraph 16 above.

55.  In the circumstances, I find in favour of the Common Intention.

Issue 2 – Detrimental Reliance

56.  Turning to the consideration for the acquisition of the Subject Property, despite the lack of contemporaneous documents, I accept that it was the Plaintiff who paid more than half of the purchase price initially and all the mortgage instalments subsequently. I attribute the lack of bank or mortgage statements to the long passage of time, the family nature of the Common Intention and the then good relationship and mutual trust between the Plaintiff and the Defendant.

57.  I had the opportunity to observe the testimony of the Plaintiff, and I find her as an honest and credible witness. I accept the Plaintiff’s evidence on her income during her employment with the garment-manufacturing company. Given her simple life and her financial commitment to her family, it is inherently plausible that the Plaintiff:-

(1)  could save a few hundred dollars per month (say, $500) while working as a garment worker from about 1978 to 1981, a few thousand dollars per month (say, $5,000 on average) as a supervisor from about 1981 to 1988, and even more per month (say, around $8,000) as a factory manager from about 1988;

(2)  had savings of around $200,000 by 1986 and around $300,000 by the time of signing of the sale and purchase agreement for the acquisition of the Subject Property, so that a mortgage loan to the extent of $200,000 was obtained from the Kwangtung Provincial Bank for the outstanding balance;

(3)  settled mortgage instalments per month; and

(4)  accumulated sums of $30,000 to $40,000 from time to time and made early mortgage payments to the bank, so that the mortgage was paid off by around 4 May 1989.

58.  The Plaintiff’s evidence is also corroborated by:-

(1)  Mr Poon’s knowledge that the Subject Property had been the Plaintiff’s acquisition with her own funds for the purchase price, mortgage instalments, outgoings and costs of maintenance and repairs; and

(2)  Madam Yip’s evidence that she had, for more than once, acceded to the Plaintiff’s request for preparation of application letters for early payment of mortgage instalments.

59.  I should also mention that there is no evidence or suggestion that the purchase price or any part of it was possibly paid by someone other than the Plaintiff, such as the Defendant or any of the siblings.

60.  In the premises, I accept that the Plaintiff paid the entire purchase price of the Subject Property by paying part of it with her income and settling all mortgage instalments for the outstanding balance. The Plaintiff altered her position to make all these payments in detrimental reliance on the Common Intention.

61.  It is indisputable that the Subject Property was acquired and registered in the sole name of the Defendant, and that both the Equitable Mortgage and the subsequent Charge for the bank loan were executed with both the Plaintiff and the Defendant as Requesting Party. I accept that the Plaintiff altered her position to carry out such acts in detrimental reliance on the Common Intention.

62.  I also accept that the Plaintiff has been responsible for the outgoings and costs of maintenance and repairs of the Subject Property. The Plaintiff’s earnings before her emigration was likely sufficient to cover not just her family contribution and mortgage instalments, but also the outgoings and costs of maintenance and repairs. After her emigration to the United Kingdom in around March 1990, the Plaintiff wired money from the United Kingdom to the said joint bank account of the Defendant and Poon Chun Hei for the subsistence of the Defendant and for the costs of maintenance and repairs of the Subject Property. This is supported by the bank passbook of the said joint bank account which shows that sums ranging from a thousand odd British Pounds to tens of thousands British Pounds were deposited from time to time and subsequently withdrawn between 2000 and 2007. The Plaintiff has also produced some invoices and receipts for maintenance and repairs of the Subject Property ranging from a few hundred dollars to over $10,000, and some minutes of meeting and documents from the Incorporated Owners of Mei Lai Building demanding contributions to maintenance and repair of common parts. Mr Poon also testified that it was the Plaintiff who settled the outgoings and costs of maintenance and repairs of the Subject Property. I accept that such payments by the Plaintiff was her detrimental reliance on the Common Intention.

63.  I should also add that there is no evidence or suggestion that the Defendant has settled any outgoings or costs of maintenance and repairs of the Subject Property.

Issue 3 – Common intention constructive trust, resulting trust and/or proprietary estoppel?

64.  I accept the evidence of the Plaintiff and Mr Poon that the Defendant has denied, more than once, the Plaintiff’s request for assignment of the Subject Property, and such denial was not due to any health issues which prevented the Defendant from understanding the Plaintiff’s demand. There is no evidence justifying the Defendant’s refusal to comply with the Plaintiff’s request which was part of the Common Intention. The Defendant, who has resided at the Subject Property since its completion, must have known that the Plaintiff has settled the entire purchase price and all outgoings and costs of maintenance and repairs of the Subject Property, and all such payments were effected in detrimental reliance on the Common Intention.

65.  In the premises, I hold that it is unconscionable for the Defendant to depart from the Common Intention and assert ownership on the Subject Property in reliance on the legal title by declining to comply with the Plaintiff’s request for assignment of the Subject Property. The Defendant holds the Subject Property on common intention constructive trust in favour of the Plaintiff.

66.  In the circumstances, there is no need to resort to resulting trust. That said, if I had ruled against the claim of common intention constructive trust, I would hold that the Subject Property is held on resulting trust by the Defendant in favour of the Plaintiff, by reason of my finding that the entire purchase price of the Subject Property was paid by the Plaintiff using her income and settling mortgage instalments for the outstanding balance, whilst there is no evidence rebutting the presumption of resulting trust.

67.  Again, given my finding of common intention constructive trust, it is unnecessary to rule on the plea of proprietary estoppel. If I had ruled against the claim of common intention constructive trust, I would hold that a proprietary estoppel has been established. The Request constituted a representation or an assurance by the Defendant to the Plaintiff that the Subject Property would be registered in the sole name of the Defendant for reassurance of the Plaintiff’s financial subsistence and provision of accommodation only, and upon the Plaintiff’s request the Defendant would assign the Property. The Plaintiff’s acts and conduct in detrimental reliance on the said representation or assurance were the same as those in detrimental reliance on the Common Intention, and the Defendant was fully aware of the same. It was therefore unconscionable for the Defendant to deny the Plaintiff’s request for assignment of the Subject Property. In the circumstances of this case, the minimum equity to do justice would be to recognise the Plaintiff as the sole beneficial owner of the Subject Property.

Plaintiff’s duty of fair presentation – illegality?

68.  Before turning to the question of relief, since the Defendant is absent in these proceedings, it is necessary to consider whether the Plaintiff has discharged her duty of fair presentation.

69.  Mr Anson Tso, Counsel for the Plaintiff, submitted that a possible point which the Defendant may advance is that the common intention constructive trust claim may be defeated by illegality, in that the Plaintiff and the Defendant had induced the mortgagee bank to enter into the Equitable Mortgage and the Charge with the false information that the Defendant was the beneficial owner of the Subject Property. It was submitted that central to this claim is the parties’ common intention that the Plaintiff is the sole beneficial owner of the Subject Property, but it was recorded in both the Equitable Mortgage and the Charge that the Defendant as Mortgagor is the sole beneficial owner of the Subject Property who has good title and power to charge the same free from incumbrances (Clauses 2(a) and 6(2) thereof).

70.  Whether the common intention constructive trust claim is defeated by illegality involves the application of the maxim of ex turpi causa (no action arises from a disgraceful cause). In Monat Investment Ltd v All Person(s) in Occupation of Part of No 16 Ma Po Tsuen [2023] 2 HKLRD 1311, the Court of Appeal decided that the applicability of the maxim should depend on all relevant factors set out in the “range of factors approach” based on the trio of necessary considerations in Patel v Mirza [2016] UKSC 42, in place of the “reliance approach” as propounded in Tinsley v Miligan [1993] UKHL 3. The “trio of necessary considerations” encompassed the following questions to be considered (see §36.4 of Monat (supra), reciting the test as laid down by Lord Toulson in Patel (supra)):-

(1)  Consider the underlying purpose of the prohibition which has been transgressed;

(2)  Consider conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim; and

(3)  Keep in mind the possibility of overkill unless the law is applied with a due sense of proportionality.

71.  Monat (supra) is an adverse possession case, but it was held by Deputy District Judge W H Wong in Chow Kwun Chung (in his personal capacity, and as the sole executor of the estate of Leung Kin, deceased) v Leung Yi Sze & Anor [2023] HKDC 528 (at paragraphs 34 to 35) that the maxim is also engaged in the context of common intention constructive trust claim and resulting trust claim.

72.  I have carefully considered the submissions of Mr Tso, and accept that the common intention constructive trust established in this case is not defeated by illegality. Applying the range of factors approach, the underlying purpose transgressed was the prohibition of fraud against bank and the safeguard of integrity of commercial transaction. On the contrary, should the common intention constructive trust claim here be denied, it would be very unjust to the Plaintiff who would be denied her beneficial interest in the Subject Property despite her payment of the entire purchase price of the Subject Property and all the outgoings, government rent and rates, and costs of maintenance and repairs. In the present case, the denial of the common intention constructive trust claim would be disproportional and overkilling:-

(1)  This case does not involve property or abuse under any scheme of Government subsidies, and Leung Ching Wai (supra) is clearly distinguishable. Neither does the evidence suggest either the Plaintiff or the Defendant having obtained any unfair advantage by entering into the Equitable Mortgage and the Charge.

(2)  The loan secured by the Equitable Mortgage and the Charge was fully paid off by the Plaintiff in 1989 (more than 30 years ago), and the protection to the mortgagee bank was not watered down or otherwise compromised.

73.  I have held that it is unnecessary to rule on the plea of proprietary estoppel. If I had held against the common intention constructive trust claim and gone on to rule in favour of proprietary estoppel claim, I would adopt the same analysis on illegality in respect of common intention constructive trust claim, and hold that the proprietary estoppel claim is not defeated by illegality.

74.  Likewise, I have already held that there is no need to resort to resulting trust. If I had held against the common intention constructive trust claim and ruled in favour of the resulting trust claim, I would adopt the reasoning of Deputy District Judge Frances Lok in Leung Ching Wai (supra) (at paragraphs 74 to 75) and hold that the resulting trust is not defeated by illegality.

75.  I am satisfied that the Plaintiff has discharged her duty of fair presentation to the court in the absence of the Defendant.

Issue 4 – Relief

76.  Having allowed the Plaintiff’s claim on common intention constructive trust, I grant the following relief:-

(1)  A declaration that the Plaintiff is the sole beneficial owner of the Subject Property.

(2)  The Defendant shall execute an assignment and all necessary documents to transfer her legal title of the Subject Property to the Plaintiff within 42 days, failing which a partner of the law firm representing the Plaintiff in these proceedings be authorised to execute the assignment and all necessary documents on behalf of the Defendant to transfer the legal title to the Plaintiff, and all reasonable conveyancing costs be borne by the Defendant. The Plaintiff shall have liberty to apply under this paragraph.

(3)  The Defendant do hand over all the title deeds of the Subject Property which are in her possession to the Plaintiff within 42 days.

77.  I make a costs order nisi that the Defendant do pay the Plaintiff’s costs of this action, including all reserved costs, with Certificate for Counsel, to be taxed if not agreed.

78.  It remains for me to thank Mr Tso for his assistance.