TANG TAK CHUN, the administratrix of the estate of AU-YEUNG LEUNG KING, deceased, suing on behalf of and for the benefit of the estate of AU-YEUNG LEUNG KING, deceased and on behalf of and for the benefit of the other dependent(s) of AU-YEUNG LEUNG KING, deceased v. MA HON BOR

DCCJ 4483/2025

[2026] HKDC 1402

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 4483 OF 2025

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BETWEEN

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JUDGMENT

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INTRODUCTION

1.  Before me is the Plaintiff's Summons filed on 18 May 2026 (“P’s Summons”), applying for default judgment against the Defendant (“D”) in default of defence under Order 19 rule 7 of the Rules of the District Court and the inherent jurisdiction of the Court.

BACKGROUND

2.  On 11 August 2025, P commenced the present action by issuing a Writ of Summons against D.

3.  In P’s Statement of Claim (“SOC”), it is pleaded that:

(1) The Plaintiff is the lawful son of the late Madam Au-Yeung Leung King (“Deceased”) and has been the sole administrator of the Deceased's estate (“Estate”) since 24 June 2025.

(2) D was a friend of the Deceased. At all material times, D was and is the account holder of, inter alia, (1) a Hong Kong Dollars saving account no 012-928-1-004762-4 (“Savings Account”) and (2) securities account no 012-741-63-01982-0 (“Securities Account”), both maintained with the Bank of China (Hong Kong) Limited (“BOC(HK)”).

(3) Since around 2005 to 2006, D and the Deceased, by virtue of their respective conduct and/or express agreement, agreed to the following arrangement, whereby:

(a) In around October 2005, D opened a full-service bank account maintained with BOC(HK), consisting of (inter alia) the Savings Account and the Securities Account (collectively, the “Bank Account”);

(b) Although D was the account holder of the Bank Account on paper, he expressly authorised and allowed the Deceased to operate and control the Bank Account since the date of the Bank Account’s opening;

(c) There had been a mutual understanding between the Deceased and D that (i) the Deceased was the sole controller and beneficial owner of the Bank Account. The Deceased would use it to invest in the Hong Kong stock market with her own funds; and (ii) D would not operate, impede, or obstruct the Deceased from controlling and/or using the Bank Account;

(d) key documents and items such as the Savings Accounts bank passbooks, bank card and customer advice slips were all kept in the custody of the Deceased;

(e) all banking documents, including monthly statements were all mailed to the Deceased's residence at Tsui Ping;

(f) the Deceased had full access to the Bank Account via BOC(HK)’s hotline trading services;

(collectively, the “Arrangement”).

(4) From the opening of the Bank Account until the Deceased’s death:

(a) The Deceased would deposit her own funds into the Savings Account, which would be utilised for stock trading via the Securities Account. The relevant sales proceeds and dividends received from such stock trading would be deposited into the Savings Account, pending subsequent withdrawals by the Deceased for her own use;

(b) Save for (i) a HK$500,000 advancement made by D on 29 May 2006 (which had already been repaid on 21 November 2009); and (ii) a HK$40,000 transferred to D on 30 May 2006, D was not involved in any other transactions in the Bank Account;

(5) On 21 July 2009, D had instructed BOC(HK) to add the Deceased as an authorised signatory of the Bank Account.

4.  P’s pleaded case in the SOC is that the trust properties were (i) the Bank Account and (ii) the financial assets therein, including the cash, securities and dividends generated from those securities that were deposited into the Bank Account from time to time and standing as a debt owed by BOC(HK) to the credit of D (“Bank Account Assets”).

5.  According to P, as at 28 January 2025, the Bank Account held (inter alia):-

(a) The cash deposit of HK$222.02 (“Cash Balance”); and

(b) 10,000 Shares of HSBC (Stock Code 0005) (“HSBC Shares”), which attained a monetary value of HK$799,500.

6.  In the SOC, P claims (1) a declaration that the Estate has beneficial ownership over the Cash Balance, the HSBC Shares and the dividends to be generated by the HSBC Shares (“HSBC Dividends”) (if any) which were standing as a debt owed by BOC(HK) to the credit of D and held by D as trustee under an “Express Trust and/or a Common Interest Constructive Trust”; and (2) an order requiring D to transfer the Cash Balance, the HSBC Shares (or the relevant sale proceeds after liquidating the HSBC Shares in the market) and the HSBC Dividends (if any) to the Estate.

7.  In P’s skeleton submissions, it was submitted that the pleaded facts support at least three causes of action: (i) Bare Trust; (ii) Express Trust; and (iii) Common Intention Constructive Trust. This categorisation of three causes of action is however not particularly helpful. Whilst express trusts can be distinguished from trusts arising by operation of law (such as constructive trusts), an express trust and a bare trust are not mutually exclusive arguments. In any event, P asserted in the SOC that D held the Bank Account and Bank Account Assets on trust for the Deceased as a bare trustee in P’s pleading of an express trust.

SERVICE OF DOCUMENTS

8.  The Writ was personally served on D on 15 September 2025.

9.  On 9 December 2025, by a letter of the same date, the SOC was sent to D by ordinary post at his last known address.

10.  On 12 January 2026, by a letter of the same date, the Notice of Change of Solicitors was sent to D by ordinary post at his last known address.

11.  On 22 April 2026, by a letter of the same date, the Notice of Intention to Enter Judgment was sent to D by ordinary post at his last known address.

12.  As to P’s Summons, Order 65 rule 9 of the RDC provides that it is not required to be served on D as D had been in default as to acknowledgement of service.

13.  I was satisfied that P has duly served the relevant court documents on D. No acknowledgment of service was filed by D, nor has D filed any defence. I proceed to consider whether default judgment for the reliefs sought should be granted to P.

LEGAL PRINCIPLES

Default Judgment

14.  The legal principles on granting default judgment for declaratory reliefs under Order 19 rule 7 are well established. As summarised by Au-Yeung J in Chau Sai Hong v Cheng Stephen Sohim [2020] HKCFI 2064 at §§38-39:

“38. (a) The statement of claim must show a case for the order the plaintiff seeks to obtain. The Court’s task (in exercising its discretion) is to see whether the plaintiff appears to be entitled to judgment on his statement of claim.

(b) The Court cannot receive any evidence but must give judgment according to the pleadings alone.

…

39. Further, there is a general proposition that a declaration will not be granted when giving judgment without trial (e.g. judgment in default of defence). However, it is a rule of practice and not of law, and will give way to the paramount duty of the Court to do the fullest justice to the plaintiff to which he is entitled: Law Yuk Fong v Man Chung Wai & anor, HCA 2195/2015 (unreported, 16 January 2017) at §17, DHCJ Marlene Ng (as she then was).”

Bare Trust

15.  In Hotung & Anor v Ho Yuen Ki [2002] 3 HKLRD 641, the Court of Appeal examined the nature of a bare trust at §§13-17:-

“13. We will now examine the nature of a bare or simple trust. It is one in which property is vested in one person on trust for another, the nature of the trust not being prescribed by the settlor but being left to the construction of the law, as where property is transferred to T ‘on trust for B absolutely.’ In such a case, T must permit B to enjoy the property, and must obey his instructions as to disposing of it. …

14. A bare or simple trustee, especially of shares in a limited company, is often called a nominee. He is a mere name or dummy for the true owner: Lewis on Trusts 17^th Ed., paragraph 1-21.

15. In case of bare trustee, the beneficiary may call for a conveyance of the legal estate at any time, and the trustee must comply. In the meantime the trustee has no duties to perform and must deal with the trust property in accordance with the instructions of the beneficiary: Hanbury & Martin on Modern Equity 16^th Ed. page 71.

16. A simple trust is a trust in which the trustee is a mere repository of the trust property, with no active management duties to perform. Such a trustee is called a bare trustee. The trustee of a simple trust is regarded as a bare trustee or agent or nominee. Where a trustee holds property for a beneficiary or beneficiaries absolutely entitled to call for the property to be transferred to them or at their direction under the rule in Saunders v Vautier, but until such call has powers and discretions to exercise, then he will be an active trustee and not an agent or nominee or bare trustee. However, usage of the term ‘bare trustee’ may extend in context to trusts where beneficiaries are absolutely entitled under the rule in Saunders v Vautier, so the property is held to their order: Underhill and Hayton: Law Relating to Trusts and Trustees 15^th Ed., pages 44 and 45.

17. In Halsbury’s Laws of England 4^th Ed. 2000 Reissue Vol. 48, para. 650, a bare trustee is described as ‘a person who holds property in trust for the absolute benefit and at the absolute disposal of other persons who are of full age and sui juris in respect of it, and who has himself no present beneficial interest in it and no duties to perform in respect of it except to convey or transfer it to persons entitled to hold it, and he is bound to convey or transfer the property accordingly when required to do so.’”

Express Trust

16.  In Re Gatecoin Ltd (in Liq) [2023] 2 HKLRD 1079 [P#16], Linda Chan J’s judgment at §§60-65 provides that to create an express trust, there must be the “three certainties”:

(a) Certainty of subject matter: It is possible for a settlor to declare a trust over a part of a bulk of identical and interchangeable assets such as shares or securities; and a trust of part of a fungible mass without appropriation of any specific part does not fail for uncertainty of subject matter, provided that the mass is sufficiently identified and the beneficiary’s proportionate share of it is not uncertain (at §61 (1)-(2));

(b) Certainty of object: A trust would be valid so long as there is no conceptual ambiguity or uncertainty in the definition of the class of beneficiaries (at §63);

(c) Certainty of intention: subject to the issue of certainty, the question whether B has a proprietary interest in the property acquired by A for B’s account depends upon their mutual intention、to be ascertained by an objective assessment of the terms of the agreement or relationship between A and B with reference to that property, (at §65(v)).

The Common Intention Constructive Trust

17.  In Cheung Sai Lon v Cheung Sia Ha & Anor [2020] HKCFI 2551, Coleman J summarised the principles for a common intention constructive trust at §§15 to 18:

“15. Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary: see, for example, Luo Xing Juan Angela v Estate of Hui Shui See Willy, deceased [2009] 12 HKCFAR 1 at §38.

16. Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (1) the common intention, (2) the claimant’s detrimental reliance on their common intention, and (3) the unconscionability of the property owner departing from it.

17. The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership.

18. Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties’ conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).”

18.  The first situation where common intention constructive trust may arise is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property, and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust: Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 per Hon Cheung JA at §§2.3-2.4.

ANALYSIS

19.  P’s skeleton submissions argued that “If the Court accepts that D held the Trust Property as a bare trustee, there is not even the need to resort to the Express Trust or the Common Intention Constructive Trust as pleaded”. I do not see how this categorisation of D as a bare trustee could help to avoid an assessment of the three certainties required for establishing an express trust.

20.  In respect of the certainty of subject matter, I accept that the trust properties are the Bank Account and Bank Account Assets, as all assets within the Bank Account (save for the limited transactions by D in 2006 and 2009) derived exclusively from deposits made by the Deceased.

21.  There was certainty of object as the beneficiary of the trust was the Deceased.

22.  There was certainty of intention given that there was mutual understanding between the D and the Deceased as pleaded, D expressly authorised and allowed the Deceased to operate and control the Bank Account, the Deceased kept all key documents indicative of ownership of the Bank Account, had full access to the funds in the Bank Account and was an authorised signatory of the Bank Account.

23.  Accordingly, an express trust was established, On the facts pleaded in the SOC, I am satisfied that the Bank Account and Bank Account Assets were held by D on an express trust for the Deceased as bare trustee. D’s role was that of a bare trustee. A bare trustee is bound to transfer the property to the beneficiary when requested to do so. The Estate is now entitled to enforce a claim against the trustee.

24.  Having concluded that an express trust was established, it is not necessary for me to analyse further the arguments in respect of the claim of common intention constructive trust.

25.  It is noted that P also seeks various further or alternative reliefs in the SOC including (i) an enquiry/or account in respect of the HSBC Shares, the HSBC Dividends (if any) and the Cash Balance, if they were sold or transferred away from the Bank Account; (ii) the traceable proceeds or substitutes in respect of the HSBC Shares, the HSBC Dividends and the Cash Balance; (iii) the traceable proceeds or substitutes that had been received and/or retained by D. The grounds in support of these further and alternative reliefs were however unclear from P’s pleaded case. It was further submitted by P that the Court may order equitable compensation. A sum of HK$1,410,220.02 was inserted in P’s Skeleton Submissions, but no factual basis for that figure was pleaded in the SOC. Further, the SOC does not confirm that the HSBC Shares have been sold, and therefore there is insufficient basis for me to order a transfer of the relevant sale proceeds.

26.  In the circumstances, I am prepared to exercise my discretion in granting the proprietary declaratory relief, but not granting the further and alternative reliefs sought.

CONCLUSION

27.  For the above reasons, I would grant default judgment against D and make the following orders:

(1) A declaration that the Estate has beneficial ownership over the Cash Balance, the HSBC Shares and HSBC Dividends (if any) which were standing as a debt owed by BOC(HK) to the credit of D and held by D as trustee; and

(2) An order requiring D to transfer the Cash Balance, the HSBC Shares and the HSBC Dividends (if any) to the Estate.

28.  Costs should follow the event. I therefore order that costs be paid by the D to P, summarily assessed at HK$264,546.