CHAN MING HUNG v. SUM CHOI WAN CHAU AND OTHERS

HCA 907/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 907 OF 2009

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J U D G M E NT

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1. This case concerns arrangements which were made amongst family members as to the way in which certain property belonging to the Plaintiff was to be dealt with. Unfortunately, the way in which the property has in fact been dealt with has resulted in allegations being made by the Plaintiff of misuse of trust money on the part of the Defendants in breach of trust and fiduciary duties.

2. The property in question was property which the Plaintiff inherited when his mother passed away in 1987.  The Plaintiff was left a flat and two shop units, the flat being a unit at No 101 Catchick Street, Hong Kong (“the Catchick Property”), and the shops numbers 30 and 31, at State Theatre Building, King’s Road.  These three properties are referred to collectively as "the Three Properties". 

3. The Plaintiff is the son-in-law of the 1^st Defendant and her husband, Sum Chun Ming (whose estate is the 2^nd Defendant), and the brother-in-law of the 3^rd Defendant (“Fabian”).  The Plaintiff’s wife is Gina Chan (“Gina”).  She is not a party to the proceedings but gave evidence on behalf of the Plaintiff.  For convenience, the 2^nd Defendant will be referred to as such irrespective of whether before or after the demise of Mr Sum Chun Ming.

4. The 3^rd Defendant, Fabian, is an architect who now lives with the 1^st Defendant.  He was, until 2008 resident in the USA, but returned to Hong Kong when his father was diagnosed as suffering from cancer.  Several of the relevant property transactions took place shortly after this illness was diagnosed.  His involvement arises mainly from his having been the recipient of some of the property in question.

5. The Plaintiff resides in the United Kingdom and, subsequent to the properties coming into his hands, made an arrangement with the 1^st Defendant, whereby the 1^st Defendant was to act on his behalf in regard to the management of the properties.  Various powers of attorney were executed by the Plaintiff to give effect to this arrangement. The Plaintiff says, and this is not disputed, that the intention was that the rental income available from the properties would be for the use of the 1^st and 2^nd Defendants who would manage the properties and maintain them on the Plaintiff's behalf. 

6. There was an argument as to whether the costs of maintenance would be taken out of the rental income such that the money available to the 1^st and 2^nd Defendants would, in effect, be the surplus over and above such expenses, or whether this remained the responsibility of the Plaintiff.  It appears that the properties were not continuously let, but of relevance is the fact that the Catchick Property was tenanted under a lease from 1 July 1993.  That lease was renewed on 15 June 1995.  The terms of the lease and renewal are touched on below.

7. The Catchick property was purchased by the Land Development Corporation ("LDC") on 27 December 1997.  An agreement for Sale and Purchase was made in November 1997 and a deposit of $396,800.00 was paid by LDC.  The balance of the agreed purchase price was $3,650,595.00, and this was paid on 27 December 1997.  The total consideration was therefore $4,068,000.00.  Following the sale of the Catchick Property the proceeds (“the Catchick Proceeds”) were held by the 1^st Defendant on behalf of the Plaintiff.

8. The 1^st Defendant acted on behalf of the Plaintiff in this transaction, and it was she who collected the proceeds of sale of the Catchick Property.  The Plaintiff's case is that it was agreed that the 1^st Defendant should put the sale proceeds into a high interest bearing account for the benefit of the Plaintiff.  Gina says that she was told this had been done but that it later turned out that the Catchick Proceeds were simply deposited into the 1^st Defendant’s bank account.  It is the Plaintiff’s case also that in those circumstances the 1^st Defendant was holding the Catchick Proceeds on trust for the Plaintiff.  This is not disputed.  The Plaintiff says 1^st Defendant acted in breach of her fiduciary duties by using the Catchick Proceeds in an unauthorised way. 

9. The way in which this misuse is said to have arisen is that the 1^st Defendant and the 2^nd Defendant purchased a residential property at Kent Mansion in Tin Hau Temple Road, Hong Kong (“Kent Mansion”) on or around 15 January 2000 using the Plaintiff's money.  The Kent Mansion property was registered in the names of the 1^st Defendant and the 2^nd Defendant.  Subsequently the 1^st and 2^nd Defendants assigned Kent Mansion to the 1^st Defendant and Fabian as joint tenants.  The 1^st Defendant has been resident at Kent Mansion since it was purchased.

10. By his Statement of Claim the Plaintiff seeks declarations that the 1^st Defendant is holding the Catchick Proceeds on trust for the Plaintiff, and has acted in breach of duty in regard to that trust.  An Order for an account and enquiry is also sought.

11. A declaration is also sought that the 1^st and 3^rd Defendants currently hold the Kent Mansion property on trust for the Plaintiff, and the Plaintiff seeks an Order compelling the transfer of the Kent Mansion property to the Plaintiff.  The Plaintiff also seeks an Order setting aside the sale transaction on 26 August 2008 whereby the Kent Mansion was conveyed into the joint names of the 1^st and 3^rd Defendants and a declaration that the 1^st and 2^nd Defendants hold the Kent Mansion property on trust for the Plaintiff, and acted in breach of trust in assigning the Kent Mansion property to the 1^st and 3^rd Defendants.

12. There is no challenge from the Defendants as to the general background described above, and in particular it is not disputed that the 1^st Defendant received the Catchick Proceeds in the manner described, and was to hold these on behalf of the Plaintiff.  The 1^st Defendant says however that Kent Mansion was purchased with the 1^st and 2^nd Defendants’ own money.  In summary, the 1^st Defendant’s answer is that even though she received the proceeds from the sale of the Catchick Property to hold for the Plaintiff, the whole of the Catchick Proceeds has been exhausted through various outgoings incurred by the 1^st Defendant and the 2^nd Defendant on the Three Properties.  This was helpfully set out in a table in the opening submission served on behalf of the Defendants by their counsel, Mr Jeremy Poon.  There were four items of expenditure:

a.  compensation paid to the tenants in the Catchick property (of $600,000);

b.  payment for a property at Siu Po Mansion ($1,800,000);

c.  remuneration to the 2^nd Defendant ($989,383); and

d.  expenses incurred on the Plaintiff's behalf ($970,000).

13. The Defendants have an alternative tabulation of the way in which the Catchick Proceeds have been exhausted, differing from the formulation above by excluding the 3^rd item (remuneration to the 2^nd Defendant) and including payment for the purchase of a property at Healthy Village.  This was purchased in 1998 for $1,471,000.00, and the 1st Defendant says there was an agreement that the Plaintiff’s money be used for this purchase.  In addition to the direct purchase cost the 1^st Defendant alleges that the Plaintiff agreed that legal expenses of the purchase, refurbishment costs, and other expenses in a combined total of HK$401,254.20 were to be paid for by the Plaintiff.

14. Under either set of circumstances therefore the Defendants contend that the Plaintiff’s money had been spent prior to the purchase of the Kent Property.  The Plaintiff disputes that any of the other alleged items of expenditure on his behalf are legitimately to be set against the Catchick Proceeds.  The legitimacy or otherwise of these alleged expenses by the 1^st Defendant forms, in effect, the only defence to the Plaintiff’s claim.  Accordingly it is necessary to examine each of these in turn. 

Tenant Compensation

15. The Plaintiff and the 1^st Defendant entered into a lease arrangement for the Catchick property with an agreed monthly rental of $1,000.00. The 1^st Defendant then sublet the premises, so far as relevant, between 1993 and the sale of property at the end of 1997.  The sub-lease entered into contemplated “resumption” by the government and the 1^st sub-lease contained an express provision by which the sub tenant acknowledged that circumstance, and expressly waived any claims to compensation arising from the non‑renewal of the tenancy.  The sub tenancy was in fact renewed prior to any resumption, and the renewed sublease contained a waiver on the part of the sub tenant in regard to “…claims for compensation (if any) arising from the immediate termination of the tenancy and/or non renewal of the tenancy upon receipt of notice from the Landlord and/or Authorities concerned”.

16. Notwithstanding that provision (which may or may not have been effective in law to preclude any claim from the sub-tenant), compensation was sought by the sub tenant and after negotiation by the 2^nd Defendant, was paid by the 1^st Defendant at $300,000.00.  The 1^st Defendant asserts in her witness statement an entitlement to set off such tenant compensation, but in the amount of $600,000.00 of which, she says, she has paid one half to the sub tenant. 

17. By the stage of the closing submissions the assertion being made on behalf of the 1^st Defendant was that there were four components to the sum of $600,000.00; namely, legal charges of $18,245.00 incurred in connection with the sale to LDC; $300,000.00 paid to the sub-tenant; $280,960.00 payable to the 1^st Defendant; and $1,395.00 “shortfall”.  In addition, in the Amended Defence the 1^st Defendant alleged an oral agreement made with the Plaintiff that a one third share of the compensation paid by LDC would accrue to the 1^st and 2^nd Defendants. This is addressed below. 

18. In principle I do not see that there is any difficulty with the legal charges; these appear plainly to have been legitimate expenses incurred in connection with the sale transaction.  I do not accept any suggestion that these should have been paid for by the 1^st Defendant out of any surplus of rental income.  The “shortfall” item is unexplained and, somewhat similarly to the tenant’s compensation claimed by the 1^st Defendant, appears to be a balancing item intended to round out the set off amount to $600,000.00.

19. The evidence does not support the 1^st Defendant's assertion that there was a sum of $600,000.00 paid or due by way of tenant’s compensation.  The purchase price identified in the Sale and Purchase Agreement was expressed as comprising a sum in respect of the open market value of the property, an ex gratia allowance, and an additional allowance to meet “incidental costs”.  The ex gratia allowance, at $2,565,000.00 was the largest component.  There was no reference to tenant’s compensation in any amount.

20. There was some debate in the evidence as to whether a head tenant (such as the 1^st Defendant) was, in any event, entitled to compensation from LDC.  If so the question arose as to whether any such entitlement formed an intrinsic part of the compensation paid to the property owner (the Plaintiff) and as such, whether it was for the Plaintiff to pay over a portion of his compensation to the 1^st Defendant or whether this would be paid separately and directly by LDC (if such an entitlement existed). The 1^st Defendant asserts that this was a component of the compensation paid for the purchase of the property but, as referred to above the evidence was that the Catchick Proceeds did not include a component for tenant’s compensation.  Moreover, there was no evidence as to any entitlement on the part of the head tenant even in principle.  The only documentary evidence available as to any entitlement to tenant’s compensation referred to compensation payable by LDC (not by the property owner) to “genuine residents”, with the compensation to be calculated as a multiple of the rateable value.  In the context of the issues between the parties it is sufficient for me to record that I do not accept that the evidence shows that the 1^st Defendant had any such entitlement vis-a-vis Plaintiff.  Accordingly the 1^st Defendant is not entitled to reduce the Catchick Proceeds by either the amount she alleges in respect of her purported entitlement to tenant’s compensation, or by the balancing item.

21. The other relevant issue so far as the “tenant’s compensation” aspects are concerned is whether $300,000 which was paid to the sub tenant by the 1^st Defendant is a permissible expenditure to be set against the sale proceeds of the Catchick Property.  This was said by the 1^st Defendant to be a commercial arrangement made with the sub-tenant to ensure vacant possession and therefore to secure better compensation for the property owner from LDC.  Although this is not fully documented, I accept the evidence was that this amount was in fact paid, notwithstanding the existence of the provisions of the sublease, and was paid so as to ensure that the Catchick Property could be handed over to LDC with vacant possession.  This, it seems to me fell within the scope of the authority given to the 1^st Defendant under the Powers of Attorney.  It appears to me that in the circumstances this was a legitimate and reasonable expenditure incurred by the 1^st Defendant and the 2^nd Defendant on behalf of the Plaintiff, and I accept that this is to be taken into account in determining the expenditures which have been made against the Catchick Proceeds.

22. Accordingly I accept that the Plaintiff’s interest in the Catchick Proceeds was reduced by the compensation by $300,000.00 plus the legal fees of 18,245.00.

Siu Bo

23. This was a property which was purchased in the name of Gina in 1986.  The 1^st Defendant and Fabian each claim that Gina had only a legal interest in the property; that she was holding Siu Bo Mansion on trust for the 1^st Defendant, and had no beneficial entitlement.  The explanation given for this arrangement was that the 1^st and 2^nd Defendants wished in due course to purchase a flat Under the Home Ownership Scheme, and would not have been able to do so if they were property owners.  They did indeed, in due course, purchase a property at Healthy Village under the HOS scheme.  The purchase price for the Siu Bo property was $314,800.00 which was financed in part by initial cash payments made by the 1^st and 2^nd Defendants. The balance was funded through bank financing.  There is no dispute that the mortgage payments were funded by rental income from the property, not by Gina, although there was some dispute as to who was the mortgagor.  The purchase preceded the sale of the Catchick property and there is no question therefore that the initial payments had no connection to the Catchick Proceeds. 

24. The relevance of this property to the matters in dispute is that it is alleged by the Defendants in their pleaded defence that there was an agreement made in or around 1998 that the beneficial interest in the Siu Bo property would be given to the Plaintiff and Gina and set off against the Catchick Proceeds.  The agreement was said to have been made between the 1^st and 2^nd Defendants and Gina, and it was the 1^st Defendant's case that Gina was acting on behalf of her husband, the Plaintiff, in agreeing to this arrangement. Gina denied ever having made any such agreement and denied ever giving any indication of acting in a capacity of agent for the Plaintiff.  The Plaintiff denies that there was any such agreement.  Their evidence was clear and straightforward.  I accept their evidence, and reject that of the 1^st Defendant. 

25. Gina’s oral evidence (and the Plaintiff’s denial of an agreement) is consistent with a letter written by Gina to her parents on 4 September 2003, some years after the alleged agreement was made by her on behalf of the Plaintiff.  At that stage the Plaintiff was starting to become anxious as to what had happened to the Catchick Proceeds.  The high interest account had not been opened and the money had plainly become mixed with that of the 1^st and 2^nd Defendants.  The relationship between the family members was clearly under some strain and Gina related in her evidence that she was afraid that this would adversely affect her marriage. In that letter Gina sought to make arrangements with her parents to regularise the position in regard to the Plaintiff's funds.  Various “proposals” were set out by her, one of which involved Gina offering to “release Siu Bo ownership to mum” in return for, in part, her husband’s funds being legally secured. This proposal would appear to make no sense whatsoever if there had been an agreement some years earlier as suggested on behalf of the 1^st and 2^nd Defendants that Siu Bo be exchanged for part of the Catchick Proceeds.  There was no response to that letter from either the 1^st or 2^nd Defendant.

26. The 1^st Defendant gave evidence in support of the agreement but I found it hard to accept her version when set against the clear evidence of the Plaintiff and Gina.  The conclusion I draw from this evidence is that there was no agreement to set off the Siu Bo property against the Catchick Proceeds.  I would, for completeness, note that there was some debate in the evidence as to whether this property was beneficially owned by Gina or by the 1^st Defendant prior to the alleged agreement being made.  The evidence on this was not clear cut but it is not necessary for me to draw any conclusions on this debate.  The evidence appears to show that no part of the funding was provided by Gina, and that her name was used for the purchase so that the HOS application could be made.  However even if I were to accept the 1^st Defendant’s assertion that the property was beneficially owned by her, I would not have been persuaded that there was the agreement on which the defence case relies.  Accordingly I express no view on the beneficial ownership of this property.

Remuneration to the 2^nd Defendant

27. The defence case is that the Plaintiff promised to give one third of the Catchick Proceeds to the 2^nd Defendant as compensation for his efforts in regard to the negotiations with LDC and in regard to his and the 1^st Defendant’s efforts in management of the properties over the years.  The existence of this promise was spoken to by the 1^st Defendant in specific terms both in her witness statement and in her oral evidence.  Once again it was disputed by the Plaintiff and by Gina.

28. It is worth noting that the amount of this compensation is substantial, particularly in the context of the matters at issue, being calculated by counsel for the Defendants as being $989,383.00.  It is also worth noting that Mr Poon rightly acknowledged that there was an element of assumption in the way in which this was calculated since, as he put it, the parties had obviously not worked out the exact sum at the time of the agreement itself.  These were not commercial dealings between the parties, or at least were not dealt with as such, but even in that context the precise terms of this alleged agreement appear to be somewhat vague.

29. There are no contemporaneous records or documents which are relevant to this question and, in essence, its determination is dependent upon my perceptions of the witnesses and whose evidence is more persuasive.  The Plaintiff says it did not happen while the 1^st Defendant says that it did.  It is for the 1^st Defendant to persuade me that she is more likely than not correct in her assertion but I am not so persuaded.  Having seen and heard the witnesses, the conclusion I draw is that no such agreement was made.  Accordingly the Defendant has no entitlement to ‘set off’ that sum.

Expenses

30. The 1^st Defendant asserts an entitlement to reduce the Catchick Proceeds by $970,000 in respect of 6 items of expenditure said to have been paid on behalf of the Plaintiff while the 1^st Defendant was managing the Catchick Property.  The largest component of this account item is described as “pre-1997 agreement expenses”, totalling $739,000.00.  As the name suggests, this represents purported expenses that precede in time the sale of the Catchick Property and, therefore, the relevant fiduciary obligations arising.  Moreover, these appear to be a collection of miscellaneous items in regard to which the only possible relevance is that they involved the relevant family members.  These are pleaded in the Amended Defence as “miscellaneous advances” and involve purchase by the 1^st Defendant of mobile telephones, and fashion garments, as well as the alleged repayment by the 2^nd Defendant of a loan owed by Gina to Hang Seng Finance, a cash advance and safety box rental fees.  None of the ‘expenses’ claimed under this category bear any relationship to the 1^st Defendant’s obligations under the Powers of Attorney and none bear any relationship to the Catchick Proceeds.  I do not accept that any of these are legitimately to be set off as expenses against the proceeds of the Catchick Property.

Healthy Village

31. The 1^st Defendant, as an alternative to her contention as to an entitlement to a share in the compensation paid for the Catchick property contends that the Plaintiff's funds were used for the purchase of the HOS property at Healthy Village.  The pleaded case on this is that there was an authorisation given by Gina in or around 1998 to the 1^st and 2^nd Defendants to invest the Catchick Proceeds in real properties, at the discretion of the 1^st and 2^nd Defendants, and that all expenses losses and liabilities arising out of such investments would lie with the Plaintiff.

32. Once again this was not supported by the evidence at the hearing and the 1^st Defendant gave evidence that was in line with the evidence of Gina, namely that the Healthy Village property was purchased without seeking permission from the Plaintiff.  Madam Sum stated the Plaintiff was only notified of the fact of the purchase after the transfer of the property to the 1^st and 2^nd Defendants, and he was only informed of the use of the Catchick Proceeds for this purchase in or about September 2000.  This is consistent with Gina's evidence which I accept in which she stated that she had asked the 2^nd Defendant (her father) at about this time whether he had made use of the Catchick Proceeds to purchase either or both Kent Mansion and Healthy Village.  Her evidence was that he answered in the affirmative.

33. There is no dispute that Healthy Village was bought by the 1^st and 2^nd Defendants on 16 November 1998 for HK$1,471,000.00.  The property was leased out rather than being occupied by the 1^st and 2^nd Defendants from late 2000, an additional premium having been paid to the Housing Society to allow this.  The rental proceeds were received by the 1^st and 2^nd Defendants. The property was subsequently assigned to the 1^st Defendant and Fabian as joint tenants on 26 August 2008, and partially changed hands again in June 2009, when the property was assigned to Fabian as sole owner for HK$500,000.00.  The final relevant transaction in regard to this property was on 25 March 2010, when the property was sold by Fabian to third parties for HK$2,380,000.00.

34. As appears from the above I reject the 1^st Defendant’s contention that there was an agreement made on behalf of the Plaintiff permitting any of these expenditures of or related to the purchase of Healthy Village to be made on his behalf.  The Plaintiff could, no doubt, have ratified and adopted the action of the 1^st and 2^nd Defendants in the purchase of the Healthy Village property (not having authorised the purchase in the first place) but I accept that he did not do so. 

Kent Mansion

35. Ms Gwilt, counsel for the Plaintiff describes the purchase of Healthy Village and Kent Mansion as a property spending spree and while that may be putting things a little high, it is significant that both were purchased within the space of about 12 months.  The Kent Mansion property was purchased on 13 November 1999 by the 1^st and 2^nd Defendants for $3,100,000.00.  It is the Defendant’s case that the Catchick Proceeds had all been expended (“exhausted”) by the various matters referred to above prior to the purchase of this Property.  As appears from the above I do not accept that to be the case.  The 1^st Defendant says that the purchase of Kent Mansion was funded through the 1^st and 2^nd Defendants own resources.  Apart from the 1^st Defendant's assertion as to this, there are no documents which would go to support this proposition.  While it might be inferred that the 1^st and 2^nd Defendants would have had some savings of their own, I am not prepared to infer that their savings were sufficient to fund this purchase.

36. The 1^st Defendant states that the Plaintiff and Gina were asked to invest in the Kent Property, (as were Gina’s siblings) prior to its purchase, (and I note the inconsistency with the proposition that there were available savings to fund this purchase) but although the Plaintiff and Gina refused, Fabian and another sister, Emily, made small contributions.  Hence, the 1^st Defendant submits, the property had nothing to do with the Plaintiff or Gina. 

37. The Plaintiff accepts that there was such an approach, and agrees that, originally, he refused to invest in Kent Mansion.  Subsequently he changed his mind and decided to give permission to the 1^st Defendant to use the Catchick Proceeds to purchase Kent Mansion, but by that time the purchase had already been made.  It is common ground that there was no express authorisation prior to the purchase therefore.  Upon realizing that the purchase had been made using the Catchick Proceeds the Plaintiff (and Gina) sought reassurances from the 1^st and 2^nd Defendants.  The assurance they were given initially was that the property would be transferred to the Plaintiff when he returned to visit Hong Kong.  That transfer simply did not happen as matters transpired.

38. The evidence accordingly therefore is quite clearly to the effect that it was the Plaintiff's money that was used for the purchase of (at least) Kent Mansion.  The 2^nd Defendant was fully aware of this as, of course was the 1^st Defendant.  It seems to me that the 2^nd Defendant was thereby constituted a trustee of the relevant part of the Catchick Proceeds. As I have found above, the Plaintiff did not authorise the 1^st or 2^nd Defendant to act in this way and accordingly it follows that the purchases were made in breach of duty by the 1^st Defendant and, by this time if not earlier, the 2^nd Defendant was knowingly a recipient of the relevant part of the Catchick Proceeds.

Present Situation

39. Fabian returned to Hong Kong in 2008 when his father was ill and has remained in Hong Kong since.  Healthy Village is no longer in the hands of any of the Defendants.  It was assigned by the 1^st and 2^nd Defendants to the 1^st and 3^rd Defendants in August 2008, shortly after the 2^nd Defendant was diagnosed as having cancer.  Kent Mansion was similarly assigned at about the same time but for no consideration.  Healthy Village was subsequently assigned by the 1^st and 3^rd Defendants to the 3^rd Defendant alone at a consideration of only $500,000.00 in June 2009 and was then sold by the 3^rd Defendant in March 2010 for $2,380,000.00.  Kent Mansion remains registered in the names of the 1^st and 3^rd Defendants.  The position of the 1^st Defendant has been summarised above.  So far as the 3^rd Defendant is concerned, he has taken the legal title to Kent Mansion as a volunteer, being aware of the circumstances of its acquisition.  Once against it seems to me that he has made himself a trustee of the relevant assets and liable to account to the Plaintiff.

The Claim for Relief

40. The prayer for relief is somewhat convoluted and, I note, asserts no claim against the Healthy Village property or its proceeds as such.  The Orders and Declarations sought were reformulated by Ms Gwilt in closing submissions but remained to much the same effect.  Ms Gwilt’s submissions addressed the question as to whether the Plaintiff’s claim was one giving rise to a proprietary claim over Kent Mansion, without citing authority.  Ms Gwilt submitted that a proprietary interest existed because the property was acquired with trust money.  It seems to me that this must be correct.  The Plaintiff has, to my satisfaction established that the trust fund which the Catchick Proceeds constituted has been applied, in part at least, in the purchase of Kent Mansion by the 1^st Defendant.  The 3^rd Defendant has acquired a legal interest for no value and, more likely than not it seems to me, being aware of the circumstances in which the property was acquired by the 1^st and 2^nd Defendants.

41. Accordingly I make the following declarations, namely

(1)  The 1^st Defendant is a trustee of the Catchick Proceeds holding on trust for the Plaintiff;

(2)  The 1^st Defendant has acted in breach of duty in regard to that trust by the purchase of the Kent Property;

(3)  The 1^st and 2^nd Defendants have held the Kent Mansion property on trust for the Plaintiff; and the 1^st and 3^rd Defendants now hold the Kent Mansion property on trust for the Plaintiff.

42. I Order that an account and appropriate enquires be made into the Catchick Proceeds since receipt of the same by the 1^st Defendant in or about 27 December 1999.  I further Order that the 1^st and 3^rd Defendants shall file and serve an affidavit within 14 days of the date of this judgment identifying what deeds or documents relating to the title of the Kent Property are in their possession and whether they are in the possession of another person, and if so, stating the name and address of every such person and further that they do within 28 days thereafter cause to be delivered up to the Plaintiff’s solicitors all deeds or documents of title to the Kent Property as are stated by them in their own control or possession.

43. The Plaintiff also sought Orders for the setting aside of the transfer of the Kent Mansion property and an Order for its transfer to the Plaintiff.  Although claimed in the Statement of Claim and referred to by Ms Gwilt in her written closing submission these orders and their terms were not the subject of full argument and were not addressed by the Defendants.  While it appears to me that the Plaintiff is prima facie entitled to such orders, in the circumstances I content myself at this stage with the above Orders.  I will hear further submissions from the parties as to these further orders in relation to the possession and transfer of Kent Mansion if required.  For that purpose, and for any other matter arising from this judgment leave to apply is provided.

Costs

44. The Plaintiff seeks his costs on an indemnity basis.  It appears to me to be plain from the above findings that he is entitled to both his costs and the indemnity basis for taxation of those costs.  I so order.