LAM PING HING v. YEUNG LEUNG WAI

DCCJ 2673/2008

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 2673 OF 2008

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J U D G M E N T

1.  Lam, the Plaintiff, is the brother in law of Yeung, the Defendant.  This action concerns plots of land in Tai Po, New Territories.  Lam is the registered owner but Yeung and his family have been occupying the properties for the past three decades.  Lam now seeks to recover possession of the properties.  Yeung resists and claims that he is beneficially entitled to them.

Background

2.  The ancestors of Lam first came to settle at Tai Po, New Territories.  For the last century, they have been indigenous villagers of Nam Wah Po Village (南華莆村) (“the Village”).

3.  The late Lam Wing had 2 sons and 4 daughters.  The eldest son, the late Lam Ping Choi (“the Eldest Brother”), had spent the major part of his life in the Mainland since the Second World War.  Lam is the second son.  Yeung’s wife (“Mrs Yeung”) is one of the daughters.  Though born here, she had too lived in the Mainland since teen age until she came to Hong Kong in 1979.

4.  In 1962, Lam Wing passed away, leaving behind an estate in Hong Kong consisting of, among other properties, the following plots of land in the Village:

(1) Subsections 4 of Section A of Taxlord Lot No. T85 in Demarcation District No.9 (“T85A4”); and

(2) Remaining Portion of Lots Nos.483 & 485 and the Remaining Portion of Section B of Lot No.490 in Demarcation District No.9 (“RP483/485/490”).

By then, there were already 3 houses existing side by side on T85A4, namely, Houses 10, 10A and 10B.

5.  In the same year, Lam applied to the District Office in Tai Po for his registration as the successor to his late father’s estate.  The succession was complete in the following year.  Lam became the registered owner of, among other properties, T85A4 and RP483/485/490.

6.  Mrs Yeung married Yeung in the Mainland in 1970.  In 1979, Mrs Yeung came to Hong Kong with their daughter.  They started to live at House 10B.

7.  In 1981, Lam acquired a plot of land adjacent to T85A4, namely, Subsection 27 of Section A of Taxlord Lot No. T85 in Demarcation District No.9 (“T85A27”).  Lam then renovated the 3 houses including building kitchen compartments for Houses 10A and 10B.  The kitchen compartment of House 10B was effectively erected on part of T85A27.  House 10B is therefore partly on T85A4 and partly on T85A27.

8.  In about 1982, Yeung came to Hong Kong to join Mrs Yeung together with their son.  They too moved into House 10B.  Soon Yeung also began to occupy and to make use of RP483/485/490 as a ground for his gardening and landscaping business.

9.  In 1992, Lam and Yeung entered into a Chinese tenancy agreement in respect of RP483/485/490 dated 18 February 1992 (“the 1992 Agreement”).  Yeung apparently began to rent this plot of land from Lam for a term of 5 years from 1 February 1992 at the yearly rent of HK$6,000.  The agreement provided that upon the expiration of the term of tenancy, Yeung had the priority to enter into a new agreement with Lam.

10.  Later in 1992, Yeung acquired 2 plots of land adjacent to RP483/485/490, namely, the Remaining Portion of Lot No.480 and the Remaining Portion of Lot No.484 in DD No.9 (“the Additional Lots”).  RP483/485/490 and the Additional Lots form what is now called Nam Wah Garden (南華園).  Yeung has been running his business in the name of Nam Wah Co (南華公司).

11.  In 2004, Lam and Yeung entered into another Chinese tenancy agreement in respect of RP483/485/490 dated 18 April 2004 (“the 2004 Agreement”).  This agreement recited the background of Yeung’s use of the land and extended the term of the tenancy for another 3 years at the same rent as before.

12.  In November 2005, the Eldest Brother passed away in the Mainland.

13.  The term of tenancy under the 2004 Agreement expired in April 2007.  Since then, Yeung has stopped paying rent for his occupation of RP483/485/490.  On 20 November 2007, Lam through his solicitors sent 2 letters of demand to Yeung.

14.  By one of the letters, Lam claimed that Yeung has been occupying House 10B pursuant to an oral licence by Lam revocable by notice.  Lam gave notice to Yeung to deliver vacant possession of House 10B on 31 January 2008.

15.  By the other letter, Lam claimed that the tenancy to Yeung in respect of RP483/485/490 has expired since April 2007 and demanded Yeung to deliver vacant possession in 14 days.

16.  In June 2008, Lam commenced this action for recovering from Yeung vacant possession of the part of T85A4 and the part of T85A27where House 10B is as well as RP483/485/490.  Lam also claims mesne profits for the occupation of House 10B at the annual rate of HK$82,000, and RP483/485/490 at the annual rate of HK$6,000, until the delivery of vacant possession.

17.  The above background is not in real dispute.  I find the same to be the facts in any event.

Issues

18.  Yeung put forward his defence and counterclaim on the following basis:

(1) Lam was not entitled to succeed his late father’s estate, including T85A4 and RP483/485/490.  The 2 plots of land belong beneficially to Eldest Brother, Lam and Mrs Yeung.  Yeung is entitled to stay at the properties with the permission of Mrs Yeung.

(2) It was the common intention of the parties that House 10B and RP483/485/490 belonged to Yeung and Mrs Yeung beneficially.  Alternatively, they have an irrevocable licence for life and Lam is estopped from claiming possession from them.

(3) By virtue of their adverse possession of House 10B and RP483/485/490 over the past decades, Lam’s right to recover the same has been extinguished pursuant to the Limitation Ordinance, Cap.10.

19.  On the first day of the trial, Mr Fok, then appearing on his own for Yeung, confirmed that his client abandoned the claim on the bases of succession under (1) above and adverse possession under (3) above.  In my view, Yeung would have had no real chance of success in respect of his claim on either of these bases.  Nevertheless, Yeung maintained all the factual allegations as relevant to his case on the bases of common intention and proprietary estoppel under (2) above.

20.  When closing, Miss Gwilt, appearing with Mr Fok, reduced Yeung’s counterclaim to that for the following relief:

(1) declaration that Lam holds House 10B and RP483/485/490 on trust for Yeung and Mrs Yeung in equal shares; or alternatively for Lam, Yeung and Mrs Yeung in such shares as the court sees fit;

(2) order that Lam transfers the title of House 10B and RP483/485/490 to Yeung and Mrs Yeung; or alternatively to Yeung and Mrs Yeung as well as Lam jointly;

(3) declaration that Yeung is under a licence to occupy House 10B and RP483/485/490 for life; or

(4) order that Yeung be permitted to and is entitled to reside in the same for his life upon such terms as the court sees fit.

The declaration of a licence for life under (3) above and the so-called order of permission to reside for life under (4) above are essentially the same relief.

Common intention and proprietary estoppel

21.  Miss Gwilt for Yeung referred to Chan Chui Mee v Mak Chi Choi [2009] 1 HKLRD 343 and Ip Man Shan Henry v Ching Hing Construction Co Ltd [2003] 1 HKC 256.  The court in those cases explained how a constructive trust arises from the common intention of parties.

22.  Mr Yue for Lam submitted that the alleged common intention is not referable to Lam’s acquisition of the plots of land in question.  First, Lam became the registered owner of T84A5 and RP483/485/490 by way of succession in as early as 1963.  Secondly, T84A27 (where part of House 10B is situated) was not part of their late father’s estate and became Lam’s property about 2 years after Mrs Yeung had been living in House 10B.  Thirdly, Yeung did not come to join his wife until about 1982.  I agree with Mr Yue’s observation.

23.  Miss Gwilt also referred to Taylor Fashions Ltd v Liverpool Trustees Co [1982] QB 133 in relation to proprietary estoppel.  Insofar as the principle is concerned, what the court there said does not differ from what is now summarised in Snell’s Equity (31^st ed.) at para.10-16:  If A, under an expectation created or encouraged by B that A shall have a certain interest in land thereafter, on the faith of such expectation and with the knowledge of B and without objection from him, acts to his detriment in connection with such land, a court of equity will compel B to give effect to such expectation.

24.  Being the registered owner, Lam is prima facie entitled to possession of the plots of land in question.  Effectively, Yeung is saying that it was the common intention of the parties or his belief that Lam has given up his rights in these plots of land, after their acquisition, in favour of Yeung and/or Mrs Yeung.  Mr Yue submitted that this is Yeung’s burden to substantiate such allegation.  I agree.

How the common intention or belief allegedly arose

25.  When it came to the evidence, Yeung alleged that T84A5 (or the part where House 10B occupies) and RP483/485/490 represented the Eldest Brother’s express gift to her as her dowry (or in his words “嫁妝”) before she came to Hong Kong in 1979.  This was how Mrs Yeung first came to believe that she would be beneficially entitled to the land.  This allegation is actually not pleaded.

26.  Yeung came to join his wife in about 1982.  He claimed that being a live-in son-in-law (or in his words “上門女婿”) and the husband of Mrs Yeung, he believed that he has thus become entitled to his wife’s interest in the land.  This allegation is also not pleaded.

27.  Yeung stated that after he had acquired the Additional Lots in 1992, Lam allegedly told him that he could use RP483/485/490 without payment.  This alleged promise by Lam in 1992 is not pleaded either.

28.  Yeung have allegedly spent substantial sums of money on the improvement and development of House 10B and RP483/485/490.  According to the pleading, this is said to be the conduct from which the common intention can be inferred and the conduct detrimental to them in reliance of the common intention.

Discussion

The alleged dowry to Mrs Yeung

29.  According to Yeung, the Eldest Brother promised his wife the dowry when the brother and sister were in Nanjing in 1979 immediately before she and her daughter came to Hong Kong.

30.  It is understandable that the Eldest Brother might suggest to Mrs Yeung that she could move into one of their late father’s properties in Hong Kong.  But it sounds odd that he would go so far as to promise Mrs Yeung a dowry of the land particularly when she had already married for 9 years.

31.  As mentioned above, there were 3 houses on T84A5 and RP483/485/490 was only part of his late father’s estate.  According to Yeung’s statement, the Eldest Brother was quite specific about which part of the properties contained in his late father’s estate should form the dowry to his wife.  To me, the suggestion that the Eldest Brother managed to do that is not appealing.

32.  Miss Gwilt argued that the Eldest Brother promised Mrs Yeung the dowry because he retained the say as the eldest son over his late father’s estate.  It was stressed that Lam succeeded to the late father’s estate by way of false declaration.  According to Yeung, the Eldest Brother was not aware of the succession.  Nor did Yeung know about Lam’s succession until the present dispute.

33.  In this respect, Lam does not dispute that the Eldest Brother was entitled to the estate.  Lam also does not dispute that he succeeded to the estate by way of false declaration that he was the only son entitled.  But he explained why he did that in 1962.

34.  According to Lam, after the passing of his father, the head of the Village took him to consult one Cheung Sui Wing, who was his late father’s good friend and an officer of the then Tai Po District Office.  Only sons were entitled to succeed to the land in the New Territories.  It was almost impossible for the Eldest Brother with his military background in the Mainland to come to Hong Kong then for the succession.  Lam was the only son in Hong Kong. Cheung suggested that Lam proceeded to apply to be registered as the only son entitled to the succession.

35.  Considering that he was about to emigrate to the United Kingdom, Lam wanted to have the succession matter sorted out before his departure.  Therefore he submitted his application in accordance with Cheung’s advice.  Lam stated that he has subsequently informed the Eldest Brother of his succession to the estate including once during a visit to the Eldest Brother in Nanjing in 1976.

36.  Mr Yue for Lam submitted that though false, the declaration by Lam for the succession was made for a good reason and in good faith in the circumstances of this case.  He referred to Cham Siu Tsan v Cham Kin Hung, HCA 3207/1996 (12 March 2002) as an example of the court’s acceptance of the explanation for not disclosing the existence of an elder brother in the application for similar kind of succession in the New Territories.  Mr Yue asked me to accept Lam’s explanation in the present case.

37.  Miss Gwilt disagreed.  She questioned why Lam did not include the Eldest Brother as a beneficiary in the succession in 1963.  But as Mr Yue pointed out, this was succession to New Territories land by registration pursuant to section 17 of the New Territories Ordinance, Cap.97.  I was not referred to any statute or evidence that may provide the basis for Miss Gwilt’s suggestion.  In any event, Lam would have been accountable to the Eldest Brother, not Mrs Yeung or the other daughters of their late father.

38.  Reference was made to a letter from the Eldest Brother to Lam dated 26 July 1992.  Yeung argued that this letter evidences the Eldest Brother’s intention to succeed to the land through one of his sons even in as late as 1992.  Lam disagreed.  He explained that the letter was written with regard to the application of the Eldest Brother’s son for a one-way permit in the Mainland.  Succession to the late father’s estate was only the ground put forward for such application at that time.  The Eldest Brother was never minded to take part in the succession.

39.  Properly read as whole, the letter supports Lam’s case.  Indeed the ground put forward for such application appears to be inconsistent with the fact that Lam had already succeeded to the estate for 30 years.  However, the details of how such an application in the Mainland was supposed to be carried out are unknown.  If Lam had intended to hide his succession from the Eldest Brother, one would have expected Lam to be less than frank and open in this matter.  But as the Eldest Brother acknowledged in the letter, Lam had indeed assisted by providing the documents in relation to the estate of their late father for the lawyers for such purpose.

40.  The alleged dowry is the backbone of Yeung’s case.  Whilst this episode involving the dowry was privy to the Eldest Brother and Mrs Yeung, Mrs Yeung chose not to come forward as a witness during the trial, notwithstanding the filing of her statement.  Even assuming that no adverse inference is to be drawn, I remind myself to assess Yeung’s evidence in this respect with caution.

Thereafter

41.  In about 1982, Yeung came with their son to join his wife and daughter.  There is no dispute that Lam first met Yeung upon his return from the United Kingdom to Hong Kong in about 1983.  As he has already accommodated Mrs Yeung in House 10B since 1979, Lam raised no objection to Yeung and their son to join them.  According to him, he never intended that the house would thus become the property of Yeung or Mrs Yeung.

House 10B

42.  Lam stated that he used to return from the UK to Hong Kong and stay for a month or more two times a year.  He lived at House 33B which was 4 to 5 minutes’ walk from House 10B.  There were frequent family gatherings.  He always kept a key to House 10B.  After the renovation in 1994, Lam also kept the new key to the renovated house.  In 2000 when he returned to Hong Kong after the passing of his wife, he had moved to House 10B for about 3 months pending the renovation of House 33B.  During the property market slump in 1997 and 2003, he had suggested to Yeung and Mrs Yeung to acquire their own property.

43.  Though Yeung was responsible for paying for the maintenance and utility charges of House 10B, Lam has always been responsible for paying the Government rent.  In 1995 and 2001, Lam had correspondence with the District Lands Office and the Ratings and Valuation Department regarding exemption in respect of House 10B.  In 2005, Lam even applied to the District Lands Office for permission to redevelop T85A4 and T85A27.  The letter from the Office in 2008 confirmed that.

44.  House 10A does not form part of Yeung’s claim.  But it is interesting to note that the address of Nam Wah Co in its letterhead was House 10A.  When asked to explain in court, Yeung somehow maintained that there was nothing wrong about his claiming House 10A as the address of his company.

RP483/485/490

45.  According to Lam, he also agreed to allow Yeung to use RP483/484/485 for free.  Yeung was a graduate in Architecture from Tsinghua University.  Lam understood that Yeung planned to use the land to operate a gardening landscape business.

46.  Yeung has developed RP483/485/490 into what is now Nam Wah Garden.  The photographs produced depict the structures, installations and landscape that could be found there nowadays.  But Lam denies that these were done pursuant to any common intention that RP483/484/490 was the property of Yeung and Mrs Yeung at their disposal.  Mr Yue’s submission goes to the heart of the matter: Yeung simply did not hold such belief.

47.  According to Lam, Yeung’s financial condition had improved by 1992.  Yeung said that too (though for the purpose of his other allegation that will be discussed below).  Hence the 1992 Agreement came about and Yeung started to pay Lam for the use of RP483/485/490.

48.  The 1992 Agreement contained the following terms:

“               租地合約

業主林炳興先生將南華莆村口現南華園一幅私地，租給楊良為使用，年租港幣陸千元正，租期五年，自一九九二年二月一日起至一九九七年一月卅一日止，到期楊良為先生可優先另同林炳興先生另簽合約，兩方立此合約為憑。”

49.  As mentioned above, Yeung claimed that he was not aware of Lam’s succession to the land in his late father’s estate until the present dispute.  Yet the 1992 Agreement contained Yeung’s acknowledgement that Lam is the owner of RP483/485/490 who let to him the land.

50.  Had there been the common intention or belief that Yeung or Mrs Yeung were beneficially interested in the land, there would have been no reason for any tenancy agreement in respect of that to come to exist.  Indeed, Yeung denied that the 1992 Agreement was a genuine tenancy agreement.  According to him, this was a purported tenancy agreement for the sole purpose of facilitating his obtaining certain permission to change the land use and to develop the land.

51.  In support, Yeung produced a letter from the District Lands Office, Tai Po.  Whilst the agreement came into existence in February 1992 allegedly for such purpose, the letter from the District Lands Office produced was dated 24 August 1993, some 18 months later.  The letter only referred to a letter from Yeung to the Office dated 12 August 1993.  Apart from stating that certain matter was receiving the Office’s attention, the letter made no reference to any application by Yeung.  Apart from this letter, Yeung produced no other document in support of his case.

52.  Drafted by Yeung, the 1992 Agreement fixed the annual rent of HK$6,000.  Yeung said that the HK$6,000 annual rent was in fact a subsidy that he and Mrs Yeung provided for the Eldest Brother.  Lam was supposed to remit the money to the Eldest Brother.

53.  In other words, besides being a purported tenancy agreement for his personal purpose, the 1992 Agreement was also a pretext for making financial provision for the Eldest Brother.  But if the 1992 Agreement was not meant to be carried out, Yeung could have remitted the money himself without first making payment to Lam.  It is difficult to understand why he would adopt such an indirect and probably inconvenient way of making provisions for the Eldest Brother.

54.  Also in 1992, Yeung claimed to have proposed to give a sum of money to the Eldest Brother as if he were buying the land that he had been using from the Eldest Brother.  This met with Lam’s rejection on the ground that the ancestral properties should not be dispersed (or in his words “祖業不分散”).  Lam then allegedly promised that Yeung could just continue to use the land.

55.  Whether it was because of the alleged dowry or the alleged common intention, Yeung would have been occupying the land as his own property for a decade.  It therefore sounds strange that Yeung would come up with the idea of buying the land from the Eldest Brother in 1992.

56.  Yeung explained that the proposal to buy the land was a mere pretext for making financial provision for the Eldest Brother.  This is incredible.  How would such proposal in 1992 sound to the Eldest Brother who, according to Yeung, had promised Mrs Yeung the dowry in 1979?  Further, according to Yeung, the proposal was made after he had acquired the Additional Lots in 1992.  His family savings was reduced to less than HK$100,000.  As he had to pay about HK$250,000 for the Additional Lots, how would such proposal to give less than HKS100,000 in return for RP483/485/490, which is a much larger plot of land than the Additional Lots, sound to the Eldest Brother?

57.  Even assuming that the alleged proposed lump sum payment was meant to be a mere gesture instead of real consideration for the land, I find it strange for Yeung to come up with the idea of using another pretext for making a lump sum financial provision to the Eldest Brother, when he had already been using the 1992 Agreement as the pretext for making a monthly HK$6,000 financial provision to the Eldest Brother for 5 months.

58.  Yeung then sought to explain that this was intended to be financial provision for the Eldest Brother’s son instead.  However, as the Eldest Brother’s letter dated July 1992 revealed, one of the Eldest Brother’s son has already emigrated to the United States.  This was funded by Lam.  By 1992, the previous attempt of the other son to obtain a visa to study in the United Kingdom had not been successful and the Eldest Brother expected to receive the refund of the tuition fee paid.  That letter, as mentioned above, was mainly about that other son’s application in the Mainland for one-way permit to Hong Kong.

59.  Yeung sought to paint the picture that Lam was most unwilling to assist the Eldest Brother.  But this was not how the Eldest Brother viewed Lam, according to his letter.  In 2002, Lam again assisted the Eldest Brother’s grandson to study overseas.  The documents show that Lam remitted another HK$150,000 to the Eldest Brother for such purpose.

60.  The 1992 Agreement was not extended after its expiration in 1997.  Yet there is no dispute that the payment of the annual rent of HK$6,000 continued and there came the 2004 Agreement.  According to Yeung, the 2004 Agreement was Lam’s idea.

61.  There was no real dispute that Yeung and Lam were members of a certain non-profit making group.  According to Yeung, Lam suggested that Yeung as the chairman of the group should enter into a tenancy agreement with him to properly obtain the use of the land for the group’s activities.  This was why the 2004 Agreement came about.

62.  The 2004 Agreement contained the following terms:

“   租約

業主：          林炳興先生

承租人：      楊良為先生

地段：          南華莆村口第9約，圖示之位置(現為南華園中除R.P.484外)

        二十年前，林先生將該幅地免費借給初到香港的妹夫楊良為先用作花園謀生之用，1992年，楊先生一家生活基本穩定，所以每年象徵式支付6,000元年租，租約期滿。

        由2004年四月開始，繼續延長合約三年，租金不變，約滿後如無特殊情況可以繼續簽署租約，如果林先生有意出售該幅土地，楊先生可以按市價優先收購。”

63.  Yeung drafted and prepared the 2004 Agreement in duplicate.  On the plan attached to the agreement, Yeung identified RP483/485/490 as the original land of Lam (or in his words “炳興原地”) as opposed to the land that he acquired.  The 2004 Agreement recited that Lam allowed Yeung to use the land for free for his gardening business 20 years ago.  But since 1992, Yeung started to rent the land at the annual rent of HK$6,000.  The recital was actually in line with Lam’s case.

64.  Besides specifying the 3-year term and the same annual rent as before, Yeung included in the 2004 Agreement the term that the tenancy was extendable.  He also included the term that in case of sale of the land, Yeung would have the first right to purchase the land at the market price from Lam.

65.  I find that Yeung had the necessary educational background and the previous experience of entering into written agreements with his construction contractors.  Whether the 2004 Agreement was Lam’s idea, it was Yeung who drafted the terms.  He took the care to include the terms mentioned above apparently for his benefit.  So did Lam.  Had the parties intended that the agreement was not to have any effect, Lam would have had no reason to be so concerned about its terms that he even sought to amend the terms and to ask for an amended agreement to be prepared for signature again.

66.  Yeung then argued that as a result of the amendments proposed by Lam, he considered that the 2004 Agreement had ceased to have any effect.  The proposed amendments written by Lam on the agreement were as follows:

“……

由2004年四月開始，繼續延長合約三年，租金不變，約滿後如無特殊情況可以繼續簽署租約 雙方再商議，雙方同意再行簽署新合約。如果林先生有意出售該幅土地，楊先生可以按市價優先收購。假如楊先生他日無意收購又無意繼續租用，或楊先生轉手他人，要林先生同意及簽署合約，所有樹木花苗及其他物品，楊先生自理。”

        [proposed amendments underlined]

67.  Essentially, what Lam proposed was to make clear that upon the expiration of the term of the tenancy, parties should negotiate for a new tenancy agreement.  In the event that Yeung did not intend to purchase or to rent the land or his business changed hands, Lam’s agreement would be required and Yeung would be responsible for the disposal of all the plants and articles in the land.

68.  There is nothing to suggest that Yeung treated that Lam’s proposed amendments as conduct evincing an intention not to be bound by the one already signed.  There is no dispute that Yeung continued to have the use of RP483/485/490 and Lam continued to receive the annual rent throughout the entire term of the tenancy until 2007.  There was in fact no repudiation or termination of the agreement signed.

Improvement and development of the land

69.  Yeung referred to the improvement of House 10B and the development of RP483/485/490 both as conduct manifesting the alleged common intention that he and Mrs Yeung are beneficially entitled to the land and conduct to their detriment upon reliance on the belief that they were so entitled.  It is said that Lam was aware of such conduct but raised no objection and thus encouraging their belief.

70.  The conduct consisted of the following:

(1) Yeung and his wife have been paying for the expenses and maintenance of House 10B and RP483/485/490.

(2) In about 1994, Yeung and his wife rebuilt House 10B and House 10A on their own in the belief that it was their property to dispose of.

(3) Yeung and his wife have sole possession of House 10B and RP483/485/490 to the exclusion of Lam.

(4) Yeung and his wife have erected various buildings and grown numerous plants on RP483/485/490 in the belief that it was their property to dispose of.

71.  Lam does not dispute that Yeung and Mrs Yeung have been paying for the utility charges for their occupation of House 10B.  He also does not dispute that House 10A and 10B underwent renovation in 1994.  Lam agreed that work had been done to the roof, windows and walls of the houses.  But it was agreed that he would be responsible for the cost of renovating House 10A while Yeung would pay for the renovation of House 10B.  Yeung took charge of the renovation and Lam had reimbursed him a sum of about HK$70,000 in respect of the work done to House 10A.

72.  Yeung insisted on labelling the work as rebuilding as opposed to renovation.  Allegedly a sum of HK$800,000 had been spent for that purpose.  This was first raised in his supplemental statement just days before the trial.  A lot of documents have been produced but it became clear that most of them are unrelated to the 1994 building work.  Yeung had to confess that the documents got mixed up.  The documents relating to Yeung’s contracting out the plastering work done to Houses 10A and 10B at that time show payments by Yeung of a total sum of less than HK$100,000.  Lam’s evidence in respect of reimbursement of HK$70,000 to him was not really challenged.

73.  Indeed after Lam has acquired T84A27, part of which became part of Houses 10B, Mrs Yeung also started to occupy the newly erected additional part of the house as well.  Apart from that, there is no evidence of anything said or done between Lam and Mrs Yeung to reflect their alleged common intention in respect of this additional part of the house.  There is no evidence of any contribution made by Mrs Yeung towards the cost of acquiring T84A27 or that of building the additional part of the house in 1981.

74.  Whilst Lam has expended on the development of RP483/485/490 over the years, the circumstances show that he has been occupying the land as a tenant since 1992.  In fact, Yeung acquired the Additional Lots only after the 1992 Agreement was entered into.

75.  Miss Gwilt then submitted that estoppel could still arise between a landlord and tenant so as to give rise to a proprietary interest in the tenant and to defeat the landlord’s apparent right of reversion.  In principle, this is not disputed.  In Taylor Fashions Ltd v Liverpool Trustees Co [1982] QB 133, the option to renew provided in the tenancy agreement, though not registered, was relied on by the tenant to act to its detriment.  That was how the question of estoppel arose in favour of the tenant.

76.  In the present case, the 1992 Agreement spoke of Yeung’s prior right to enter into new agreement with Lam, and the 2004 Agreement provided for an option to renew or to purchase.  However, Yeung is not seeking to prevent Lam from denying the effect of such provisions in the tenancy agreements or his right to purchase the land.  Quite to the contrary, Yeung denies that the agreements were genuine tenancy agreements, i.e., the very basis for giving rise to the estoppel in Taylor Fashions Ltd.

Conclusion

77.  Seeing the witnesses testify and considering all the materials, I prefer the evidence of Lam to Yeung.  I find what Lam said to be the truth.

78.  In respect of House 10B, the parties have been content with the status quo for the past decades.  This is understandable in view of the family relationship.  However, I do not find that as a result, Lam has given up the land where the house is.  I do not find that Lam shares a common intention or belief that the land has become the property of Yeung or Mrs Yeung.  It cannot be said that the improvement to House 10B carried out by Yeung in 1994 was the result of the alleged common intention or belief encouraged by Lam.  I come to the conclusion that Yeung or Mrs Yeung cannot fairly claim a life interest in House 10B either.  Lam should be entitled to possession of the part of T85A4 and T85A27 where House 10B is.

79.  In respect of RP483/485/490, it is in my view clear that no claim of intention or belief that it belonged to Yeung or Mrs Yeung can be made.  I also reject the claim that Yeung or Mrs Yeung has the right to occupy the land for life.

80.  Mr Yue submitted that even assuming that Yeung’s case in respect of House 10B can be established, the relief granted by the court must be proportionate to the detriment suffered and that the court is not always required to satisfy his or her expectation by awarding the promised or expected interest in land: see Snell at paras.10-16; 10-23 to 10-27; Sledmore v Dalby (1992) 72 P&CR 196 (as an example).  He submitted that in the circumstances of this case, any detriment suffered by Yeung or Mrs Yeung must have already been outweighed by their past enjoyment of the house.

81.  All along, Yeung’s family has been occupying the house free of charge.  Save for the occasional visits and stays by Lam at the house in the past, the improvement of the house was largely done for the enjoyment of Yeung’s family.  Whether the improvement done in the ‘90s has enhanced the value of T84A5 or T84A27 is irrelevant.  Lam is not going to take the fruit of it.  Back in November 2005, Lam has already commissioned surveyor to submit plan to the Office for the redevelopment of T85A4 and T85A27.  As mentioned above, House 10B occupies only part of T85A4.  Yeung or Mrs Yeung has made no contribution towards Lam’s acquisition of T85A27 where the kitchen of the house was.  Yeung revealed in his evidence his children have already grown up with professional achievements and successful careers.

82.  The above are valid observations.  But the court has to determine the minimum equity to do justice on a case-by-case basis.  In view of my finding that Yeung’s claim fails, it is not necessary for me to conclude what would have been the minimum equity to do justice in the present case as if the alleged common intention or proprietary estoppel were established.

Mesne profits

83.  In support of his claim for mesne profits, Lam has produced evidence of expert valuation of the annual market rental in respect of House 10B.  Yeung has produced no relevant evidence to counter that.  The annual market rent is HK$82,000.  Mr Fok accepted such valuation.

84.  In principle, Lam should be entitled to mesne profits for Yeung’s occupation of House 10B from the moment when the licence was terminated.  However, the fact was that at no time has Lam received, demanded or expected payment from Yeung and Mrs Yeung for their occupation of the house.  Lam has been minded to re-develop T85A4 and T85A27 since 2005.  In the circumstances of this case, I am not minded to order that Yeung pays mesne profits in respect of House 10B unless he defaults in compliance with the order for possession to be made.

85.  In respect of RP483/485/490, Lam claims mesne profits at the rate of an annual amount of HK$6,000, which was the amount that he had been receiving from Yeung.  Lam is clearly entitled to them.  Lam is apparently content with the claim for mesne profits from the commencement of action until delivery of vacant possession.  I so order.

Order

86.  I give judgment in favour of Lam:

(1) Yeung shall deliver up vacant possession of House 10B (on T84A5 and T84A27) and RP483/485/490 to Lam within 90 days from the date hereof.

(2) Since the date of writ until the delivery of vacant possession, Yeung shall pay to Lam mesne profits in respect of RP483/485/490 calculated at the annual rate of HK$6,000.

(3) In default of delivery of vacant possession of House 10B on or before 90 days from the date hereof, Yeung shall also pay mesne profits in respect of House 10B calculated at the annual rate of HK$82,000 until the delivery of its vacant possession.

(4) Interest on mesne profits shall run from their accrual until payment at the judgment rate.

87.  I make a nisi order that Yeung shall pay Lam’s costs of this action including any costs reserved.  Costs shall be taxed, if not agreed, with certificate for counsel.  In the absence of application within 14 days to vary, this costs order shall become absolute.