CHAN SUNG LAI v. CHAN SUNG LIM PAUL AND ANOTHER

HCA 1958/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1958 OF 2011

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J U D G M E N T

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Introduction

1. This is a family dispute about real property.  The plaintiff (whom I shall call Peter, the English name he used in the family) is the eldest son of the 2^nd defendant (the Father).  The 1^st defendant (Paul) is the second son of the Father.  There is a third son, Patrick, but he is not a party to the proceedings. 

2. On 8 May 2006, Peter and the Father purchased, as joint tenants, Flat 16, 7^th Floor, Man Fai Building, 26‑48 Man Ying Street and 25‑47 Man Yuen Street, Kowloon (the first property).  Eighteen months later, on 29 November 2007, Peter and the Father purchased, as tenants in common in equal shares, Flat 35, 4^th Floor, Man Yiu Building, 25‑47 Man Wai Street and 26‑48 Man Yuen Street, Kowloon (the second property).  The dispute concerns these two properties.

3. It is agreed that it was Peter’s role to collect the rent from the two properties and to generally manage them.  There is no suggestion that the Father had any complaint as to Peter’s management of the properties prior to April 2011.

4. After January 2011, family members noted and complained that the Father suffered from decreased memory[1]. During April 2011, in consultation with a doctor, the Father was noted to have mild progressive expressive dysphasia[2]. Ultimately, in September 2011, he was diagnosed as having mild dementia. A medical report[3], dated 3 October 2011, records that the Father’s memory was reported to be significantly deteriorated since the death of his mother which had occurred in August that year.

5. In early April 2011, Paul made it known to Peter that he had discovered that Peter and the Father co-owned property.  Shortly thereafter the Father asked Peter to account for the rentals from the properties and raised an issue in respect of a life insurance policy.  Paul’s evidence was that on 20 April 2011, the Father had disclosed to him that the Father had paid the full price for the first property.  Events thereafter occurred which stimulated Peter to issue the present proceedings.  Those events included, according to Peter, interference with the tenancies by Paul (which is denied), and, on 19 May 2011, the execution by the Father of a notice of severance in respect of the joint tenancy of the first property.

6. The primary relief sought by Peter is a declaration that he owns a 50% interest in the first property absolutely, a declaration that the 50% interest in the first property which was held by the Father is held by the Father on a constructive trust for Peter; a declaration that the notice of severance is void and of no effect; and a declaration that Peter owns a 100% joint interest with his Father, in the second property absolutely.  Injunctions and damages are sought against Paul in respect of the alleged interference with the tenancies.

The available evidence

7. Before I can consider the evidence in relation to the relief sought by Peter it is necessary to consider the admissibility and weight to be attached to two particular aspects of the evidence.

8. First, on about 20 June 2011, Paul installed, he says at the request of the Father, a CCTV in the living room of the Father’s flat.  Unknown to Peter then, a total of 15 conversations between Peter and his Father were recorded by the CCTV.  Paul and the Father seek to have admitted in evidence transcripts of six of the conversations that took place between 20 June 2011 and 30 September 2011.

9. Mr Ko, for the plaintiff, objects to the admissibility of the transcripts.

10. Second, on 7 August 2013, the Father made a witness statement. This document, in the original Chinese, comprises 45 paragraphs over 23 pages.

11. I have already referred to the Father’s medical condition (§4 above).  A medical report made on 9 December 2014, shows that the Father was then a mentally disordered person within the meaning of the Mental Health Ordinance, and was mentally unfit to give evidence and/or defend in a civil proceeding, and was incapable of managing his own affairs. Upon application, on 11 February 2015, at a pre-trial review, an order was made appointing his daughter-in-law, Madam Hui Shui Fong (“Madam Hui”, Patrick’s wife) to be guardian ad litem to represent him in the proceedings and carry on the proceedings.

12. On 9 May 2015, (a Saturday) six days before the trial began, a hearsay notice pursuant to section 47A(2) Evidence Ordinance, Cap 8 (“EO”) and Order 38 of the Rules of the High Court, in respect of the Father’s witness statement was served by the Father’s solicitors on Peter’s solicitors.

13. Mr Ko objects to the admission of the witness statement as hearsay evidence.

The CCTV evidence

14. The CCTV ran and recorded continuously for some 13 months.  The hard disk was large enough to record about one month of continuous recording. When the hard disk was full it would simply rewrite over the top of content recorded in the previous month.  Thus, at the expiration of the 13 months, when it was turned off, the hard disk contained only the last month of recording.

15. The evidence was that on 15 occasions when Peter called to see his Father, Paul would, after Peter left, go to his Father’s flat and copy that portion of the recording relating to the visit by Peter to a USB flash drive. Paul would then take the flash drive home to his own computer and copy the recording onto his own computer.

16. Paul says that there were only 15 occasions when Peter was present when a recording was made.  Peter is unable to dispute that evidence. He has no record of the visits he made.  From those 15 occasions Paul has selected six conversations, between 20 June 2011 and 30 September 2011, which have been transcribed to be put into evidence.  A copy of the video recording of the other nine conversations, not sought to be put into evidence, has been given to Peter’s solicitors.

17. The contention for Paul is that certain passages of the recordings contain statements made by Peter that are statements against interest which are contrary to the case he now advances.  That being the case, it is clear that the evidence contained in the conversations is material and relevant evidence. Mr Ko does not seek to argue that the evidence from the CCTV recordings is not relevant.

18. Mr Ko says first that the making of the recordings was contrary to the Basic Law, and the provisions of the Personal Data (Privacy) Ordinance, Cap 486 (“PD(P)O”) and second that it is inherently unfair to admit the recordings into evidence.

19. Mr Ko points out that the selection of the recordings copied has been made by Paul alone.  It is significant, Mr Ko says, that no recordings of conversations between Paul and Father have been made available. Consequently, Mr Ko says, potentially available evidence to support Peter’s assertion that his Father, in a state of dementia, was being manipulated by Paul, is not available.  There is considerable strength in this argument. 

20. There is no evidence to substantiate Paul’s assertion that there were only 15 conversations between Peter and his Father.  There is no evidence to show that there were no other relevant conversations between Paul and his Father.  The selective nature of the recordings that have been made available of itself necessarily raises unfairness.

21. Paul sought to justify the taking of the data by asserting that there had been an occasion on which Peter had become angry with his Father and threatened his Father with a knife.  Paul said that the CCTV would assist in protecting the Father from this potentially life threatening situation. 

22. Article 30 of the Basic Law provides:

“The freedom and privacy of communication of Hong Kong residents shall be protected by law. No department or individual may, on any grounds, infringe upon the freedom and privacy of communication of residents except that the relevant authorities may inspect communication in accordance with legal procedures to meet the needs of public security or of investigation into criminal offences.”

Plainly, on the face of it, the secret recording of conversations between Peter and his Father is contrary to this Article.

23. The law protecting freedom and privacy of communication of Hong Kong residents is contained in section 4, PD(P)O in the following terms:

“A data user shall not do an act, or engage in a practice, that contravenes a data protection principle unless the act or practice, as the case may be, is required or permitted under this Ordinance.”

24. Data Protection Principle 1(1) is arguably breached because it cannot be said that the data, collected over a very long period, was not excessive in relation to the purpose for which it was collected.  Data Protection Principle 1(3) is arguably breached because no steps at all were taken to ensure that a person from whom the personal data was to be collected (Peter), was informed either explicitly or implicitly of any of the matters set out in that provision.  Data Protection Principle 3 is arguably breached because the purpose for which the data was being used was a new purpose and not that for which it was said the data was originally collected (see §21 above).

25. On the basis that it protected the father from a potentially life threatening situation, it was argued that section 63C, PD(P)O from data protection should apply to permit the recording.  That provision permits the collection of personal data if the application of Data Protection Principles 1(3) and 3 would be likely to prejudice the informing of the Father’s immediate family members of the Father’s involvement in a life threatening situation.

26. I think it highly unlikely that this exemption would apply, bearing in mind that the CCTV feed was not being watched live, and consequently had a similar situation arisen there was nothing that could be done at that time to inform the Father’s family of what was happening.  In simple terms, the installation of the CCTV did nothing to protect the Father from any event that might occur inside his flat.  Nobody was informed through the CCTV at the time of an event that might be happening.  The CCTV might subsequently assist family members in identifying who was responsible for an event in the flat, but that is not the rationale for the exemption contained in section 63C.

27. However, for the reasons set out below I do not consider it necessary to reach a conclusion as to whether or not the collection of data was in the circumstances contrary to the provisions of the PD(P)O.

28. In England the court in civil proceedings has a specific power to exclude evidence that would otherwise be admissible: see Rule 32.1 of the Civil Procedure Rules (“CPR”), which, so far as is relevant provides:

“(1) The court may control the evidence by giving directions as to…

…

(c) the way in which the evidence is to be placed before the court.

(2)  The court may use its power under this rule to exclude evidence that would otherwise be admissible.”

29. An example of a consideration of that rule is found in the decision of the Court of Appeal in Jones v University of Warwick [2003] 1 WLR 954.  There, in personal injury proceedings, a private enquiry agent, by a subterfuge, obtained access to the plaintiff’s home and secretly installed a video camera without her knowledge.  Admissibility of the video footage was challenged.  The court accepted that under R 32.1, CPR (UK), the court had discretion to admit or reject the evidence.  The evidence was admitted.

30. There is no similar power in a Hong Kong court in civil proceedings to refuse to admit otherwise admissible evidence on the basis of either unfairness, or that the evidence has been illegally obtained.  Such a discretion does exist in criminal proceedings, but Mr Ko was unable to point me to any similar power in civil proceedings.

31. The existence of such a discretion was explicitly rejected in the United Kingdom prior to the current CPR and R 32.1, by Otton J in Bradford City Metropolitan Council v K [1990] Fam 140[4].  In the absence of a rule such as CPR R 32, the law as stated by Otton J must be the law in Hong Kong.

32. Consequently, although I am satisfied that the video evidence has been obtained in breach of the provisions of Article 30 of the Basic Law, and in all likelihood contrary to the provisions of the DP(P)O, and that the admission of the evidence carries with it significant elements of inherent unfairness, there being no discretion to refuse to receive otherwise relevant evidence, there is no lawful basis upon which I can reject it.

33. However, when considering the weight to be placed upon the evidence I shall have regard to the circumstances in which it came to be in existence, in particular the unfairness to Peter that he had no opportunity himself to examine the video footage to determine whether or not any other passages of recording should be put before the court.

The Father’s witness statement

34. The Father’s witness statement was made on 7 August 2013.  The family were aware of the Father’s memory loss as early as January 2011.  In September 2011, the Father had been diagnosed as suffering from mild dementia.  A medical report of 6 November 2014, by a resident psychiatrist in the Department of Psychiatry, Kowloon Hospital, stated that the Father was then a mentally disordered person within the meaning of the Mental Health Ordinance.  The psychiatrist was of the view that the Father was mentally unfit to give evidence and/or defend in civil proceedings and was incapable of managing his own financial affairs.

35. No steps were then taken by those advising Paul and the Father following the receipt of that report, to inform Peter’s advisors of the situation.  It was not until three months later, on 5 February 2015, when a summons was taken out under Order 80, rule 3 for the appointment of Patrick’s wife, Madam Hui to be appointed guardian ad litem for the purpose of carrying on with the proceedings that those advising Peter became aware of the situation. The order appointing the guardian ad litem was duly made on 11 February 2015.

36. On 16 February 2015, Madam Hui filed a witness statement in which she asserted that she knew certain identified paragraphs of the Father’s witness statement to be true.  That assertion did not, of course, achieve the admission of the Father’s witness statement in evidence in its own right, but was merely a shorthand method of identifying the areas in which Madam Hui was able to say that she believed the Father was telling the truth.

37. The law is clear that notwithstanding the pre-trial exchange of witness statements, until the witness is called and makes a statement public by verifying the statement on oath in the witness box, the statement does not become evidence in the trial: see Hong Kong Civil Procedure 2015, 38/2A/6.

38. Apparently ultimately appreciating this situation, on 9 May 2015, the hearsay notice was served by the Father’s solicitors, see §12 above.

39. The law relating to the admissibility of hearsay evidence in civil proceedings is contained in Part IV, EO and in particular section 47 which provides:

“(1) In civil proceedings evidence shall not be excluded on the ground that it is hearsay unless-

(a) a party against whom the evidence is to be used objects to the admission of the evidence; and

(b) the court is satisfied, having regard to the circumstances of the case, that the exclusion of the evidence is not prejudicial to the interests of justice.”

40. There is no question that the appropriate objection under section 47(1)(a) has been taken.  The question now be determined is whether, having regard to the circumstances of the case, the exclusion of the evidence would not be prejudicial to the interests of justice.

41. Mr Ko argues that a witness statement made by a person who at the time of making the statement is suffering from dementia is a statement to which no weight at all can be attributed.  As the Father cannot been called to give evidence this statement cannot be tested by cross-examination at all.  It is accordingly necessary to examine the circumstances in which the witness statement came into existence.

42. A number of medical reports and records were put in evidence by agreement.  No medical person was called by either side to give evidence in respect of the Father’s condition.  Each was apparently content to rely upon reports that were put before me.

43. A series of “Medical Consultation Summary” records were made by a Dr Moamina Ismail who had attended the Father.  These include the following references:

“12 July 2011: Noted slow in response x ½ year, unsteady gait since late 2010, Mild dysarthria[5], occasionally slow in expression. The plan of management was to refer to a neural psychologist for assessment and a CT and MRI of the brain.

9 August 2011: FU (follow-up) cognitive impairment/? Parkinsonism, memory problems similar, also noted deterioration in handwriting.

15 November 2011: the MRI had revealed a non-enhancing mass in the sella[6], the memory problem similar, patient’s mother passed away recently (8/2011), CT brain 31/8/2011 prominent sulci[7] with pituitary mass similar to before, cerebral atrophy.

29 November 2011: CP (consultant psychologist) report: mild dementia, but may be affected by depressive mood, patient’s son requests reference letter as patient is involved in a lawsuit.”

44. The clinical psychologist’s report referred to by Dr Ismail on 29 November 2011, had been made on 3 October 2011.  The interview and assessment for that report had been conducted on 26 September 2011.  The report contains the following statements:

“Mr Chan complained of a verbal problem. He had difficulty in expressing himself since a year ago. Reportedly, verbal comprehension was intact. Attention and memory was reported to be significantly deteriorated since his mother passed away.

According to Mr Chan’s son, Mr Chan demonstrated difficulty in expressing himself a year ago. He was noted as irritable and unhappy when he failed to express himself fluently. Mr Chan was noted to have further deterioration in verbal expression and memory as well as depressive mood since his mother passed away.

Formal neuropsychological assessment was administered. On the Chinese Dementia Rating Scale, Mr Chan’s global cognitive function was assessed to be significantly impaired after adjustment for age and years of education. He also showed mild impairment in memory as assessed by Hong Kong List Learning TestsecondEdition. To recapitulate, he was dependent on others the daily care as well. Taken together, Mr Chan was impressed to perform at the range of mild dementia.” (my emphasis)

45. It is significant that the matters emphasised existed in September 2011, two years prior to the making of the witness statement, was the difficulty in expressing himself existing as long ago as September 2010.

46. The next medical report is dated 16 October 2014.  That was again from Dr Ismail.  The report, after reviewing the results of a CT scan of the brain that had been done on 12 November 2011, contains the following statement:

“(The Father’s) cognition continued to deteriorate. He showed reduction in verbal output. He was reviewed by clinical psychologist on 28 August 2013. The results of the assessment suggested that his global cognitive functioning was impaired. He scored 108 in the Chinese Version of the Mattis Dementia Rating Scale, below the cut-off limit. He showed impairment in instrumental daily activities.”

47. On 6 November 2014, a resident psychiatrist from the Department of Psychiatry at Kowloon Hospital, made following report:

“Mr Chan was diagnosed to have dementia by medical colleague of Queen Elizabeth Hospital, anti-dementia drugs was started since 2012. He was referred to our unit and was first seen on 22 January 2014. He also had pituitary tumour since 2007 for conservative treatment, he had regular follow-up by neurosurgeon in Queen Elizabeth Hospital.

He had a gradual worsening in cognitive function. He scored 15 out of 30 in the Mini Mental State Examination in April 2014. His diagnosis is Senile Dementia, moderate severity.

He was last seen by me on 21 November 2014, his mood was neural. His speech is markedly slurred and dysphasic. He could not express by writing either. No psychotic features could be elicited.

He could not recall any information about legal proceedings and detail of his financial affairs. He has not been put on any psychiatric medication.

In summary, Mr Chan is currently a mentally disordered person within the meaning of the Mental Health Ordnance. He is mentally unfit to give evidence and/or defend in a civil proceeding and is incapable to manage his own financial affairs.”

48. The medical reports plainly establish a progressive deterioration in his mental condition, his memory and his ability to express himself, since his family first noticed the symptoms sometime in 2010, until he was finally diagnosed as suffering sufficiently from senile dementia to be declared mentally unfit to give evidence in November 2014.

49. The best evidence that could have been given as to his mental condition in August 2013 when the witness statement was made would be available from the clinical psychologist who reviewed the Father on 28 August 2013, (see §46 above), only 21 days after the statement was made, and the solicitor who took the instructions for the witness statement and attended the Father on the signing of the witness statement.  Neither was called and there is no suggestion at all that either was not available to give evidence.

50. I must record that it is a matter of concern that the medical reports dated 16 October 2014 and 9 December 2014 had not been disclosed to Peter’s solicitors until 22 May 2015, when they were disclosed pursuant to my instructions during the trial.  It must have been patently obvious to those advising the Father and see guardian ad litem that the Father’s mental state would be an issue in the trial.  They were under the plain obligation to disclose the medical reports as soon as they were received.  I note that despite my instruction that the medical reports were to be supplied, the report from the clinical psychologist made on 28 August 2013, and referred to in Dr Ismail’s report of 16 October 2014, was not disclosed.

51. Where witnesses are available to give evidence but are not called, it is open to the court to infer from the fact that those witnesses were not called to give evidence, that any evidence they might have given would have been unfavourable to the defendants: see: Phipson on Evidence, 18^th Edn, §§11‑15.  The principles as to the drawing of adverse inferences have been usefully summarised by Brooke LJ, in Wisniewski v Central Manchester Health Authority [1998] PIQR 324 at 340:

“From this line of authority I derive the following principles in the context of the present case:

(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.

(2) If a court is willing to draw such inferences they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.

(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.

(4)  If the reason for the witness’s absence or silence satisfies the court then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.”

52. Plainly, the best evidence as to the Father’s state of mind and his ability to remember events and his ability to express those events would have come from the clinical psychologist who reviewed him on 28 August 2013, only 21 days after he had made his witness statement.  Valuable and persuasive evidence could also have been led from the solicitor who took the instructions for the witness statement.  If, as one would expect, the solicitor was able to say that he sat with the client and asked a series of non-leading questions to which the Father clearly responded and which resulted in the witness statement, that would be powerful evidence of the competence of the witness at the time the statement was made.

53. But neither was called.

54. So the situation is as follows in summary:

(i) September 2010, family members note that the Father is suffering from decreased memory.

(ii) July 2011, the Father is diagnosed with mild dysarthria.

(iii) August 2011, cognitive impairment is suspected.

(iv) September 2011, “significant memory deterioration” is diagnosed.

(v) November 2011, “mild dementia” is diagnosed, the doctor notes that he is irritable and unhappy when unable to express himself fluently, he is noted to have further deterioration in verbal expression and memory; his global cognitive function was assessed to be significantly impaired; he is diagnosed as being in a range of mild dementia.

(vi) August 2013, review by clinical psychologist and assessment suggests that his global cognitive functioning was impaired.

(vii) October 2014, his cognition continued to deteriorate, his global cognitive functioning is impaired.

(viii) November 2014 moderately severe senile dementia is diagnosed; at interview he cannot recall any information about legal proceedings or the detail of his financial affairs.  He has become a mentally disordered person.

55. There is ample evidence from the foregoing summary that there is a case to answer on the submission by Mr Ko that at the time the Father made his witness statement he was suffering from senile dementia to the extent that little or no weight could be placed on that statement. 

56. In the absence of evidence from the clinical psychologist who undertook the assessment in September 2013, and evidence from the solicitor who took the witness statement, I am satisfied that the appropriate inference to draw is that neither witness would have been able to support the contention that the Father was mentally capable of making a witness statement.  No explanation has been offered for the absence of either witness.

57. In respect of the solicitor’s evidence, no question of privilege arises, or even waiver of privilege.  There is no bar to a man calling his own solicitor to give evidence on his behalf if the solicitor has material and relevant evidence to give on an issue in the proceedings.  The privilege is the client’s, and by calling the solicitor to give evidence he is waiving the privilege.

58. The evidence of Madam Hui does not take the matter further. She merely asserts that certain paragraphs of the Father’s witness statement at known by her to be true but does not assert the basis of that belief.  When considering her evidence it is necessary to take into account the fact that she is potentially an interested party in the proceedings. 

59. Whilst it is right that her husband Patrick is not a party it is plain that Patrick, like Paul, stands to benefit if Peter’s claim fails.  If the claim fails and the Father is found to be the sole beneficial proprietor of the two properties then on his death the whole of that property goes to his estate.  It is known that he has made a will, but the contents of that will have not been disclosed, at least to me or those advising Peter.  On the balance of probabilities, it may be expected that he has divided his estate equally between his three sons.  But it may well be, having regard to the factual circumstances this case, that he has preferred Paul and Patrick.  Madam Hui, as Patrick’s wife will benefit in either situation.

60. In her witness statement, Madam Hui makes no assertion at all as to the state of the Father’s mental capacity at the time he signed his witness statement.  She says (§4) that:

“(The Father) was asked to confirm the contents of his Witness Statement. Regarding the content of his witness statement (the Father) had made some amendments. After the amendment, I witnessed that (the Father) was satisfied with its content and thereafter signed to confirm.”

61. This statement falls a long way short of being an assertion that at the time he gave the instructions for the witness statement the Father’s memory was good, and that he understood what was taking place.  It is a statement by a person who has an interest in the proceedings, and it is inconsistent with other independent evidence such as the medical evidence.  Little weight can be placed on that statement.

62. When considering the weight to be placed on the witness statement I have had regard to the relevant considerations in section 49(2), EO, which sets out seven factors which may be taken into account.

63. First, having regard to the Father’s mental state I am satisfied it would not have been reasonable and practicable to have produced him as a witness: section 49(2)(a).  This factor favours the admission of the statement.

64. Next, I note that the witness statement was not made contemporaneously with the occurrence or existence of the matters stated.  The statement is one which would have relied upon the memory of the maker going back some six years.  The deterioration in the Father’s memory is a significant factor in the medical reports: section 49(2)(b).  This factor counts against the admission of the statement.

65. The witness statement is not one which involves multiple hearsay: section 49(2)(c). This factor is neutral.

66. There is no direct evidence as to the extent of Paul’s assistance, or the assistance of the solicitor in the preparation of the witness statement: section 49(2)(d).  However, it is plain that Paul has been the driving force behind this litigation.  I have no doubt at all that it was his idea to install the CCTV camera.  He accepts that he drafted the “Declaration” (see §§84‑91 below). 

67. Having regard to the Father’s mental condition at the time he made his witness statement a very strong inference arises that in order to prepare and make the witness statement he had assistance from someone.  On the basis of the medical evidence, he simply could not have made it without help.  I am satisfied that it is more likely than not that the witness statement was prepared by the solicitor, with assistance from Paul, probably in the presence of the Father.  This factor counts strongly against the admission of the statement.

68. It is necessary to consider whether any person involved had any motive to conceal or misrepresent matters: section 49(2)(d).  This is a case where such a motive might be attributed to Paul.  If the Father is successful in the proceedings his estate is increased in value, potentially to the benefit of Paul and his brother Patrick.  This factor counts against admission of the statement.

69. There is no suggestion that the original statement is edited or was made in collaboration with another or for a particular purpose other than these proceedings: section 49(2)(e).  This factor is neutral.

70. It is necessary to assess whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight: section 49(2)(f).  Of particular concern in this respect is the absence of the clinical psychologists report dated 28 August 2013.  As it is more likely than not that that report would show the Father was not, at that time, capable of making the witness statement, the inference arises that it was not put before the court so that a finding of incapacity might not be made.  This factor counts against admission of the statement.

71. Finally, it is necessary to consider whether or not the evidence adduced by the party is consistent with any evidence previously used by the party: section 49(2)(g).  No previous evidence has been given by the Father in relation to this matter.  It is not possible to compare his evidence as to the circumstances and statements made at the time of the acquisition of the properties, (the relevant time), as no other witness was called, other than Peter, who might give that evidence.  This factor is neutral.

72. Mr Mak, for the 2^nd defendant, mounted an argument based on the provisions of sections 24 and 25 of the Civil Evidence Act 1955 (UK). Mr Mak argued that notwithstanding the introduction of Part IV into the EO in 1999, the court must still have regard to the provisions of the UK legislation, because that legislation was in force in Hong Kong prior to the introduction of Part IV.

73. I do not accept the argument.  It is plain that Part IV, EO constitutes a code as to the admissibility of hearsay evidence in civil proceedings in Hong Kong.  As the editors note in Hong Kong Civil Procedure, Vol. 2, at J1/46/1:

“The amendments made to the Evidence Ordinance by Ordinance 2 of 1999 are in some respects similar to but do not replicate the Civil Evidence Act 1995. The amendments reflect the basic policies of the English legislation but the differencesand variations require that English authority be applied with critical care. Perhaps the important difference is that the Hong Kong legislationreposes a greater degree of judicial control over the reception of the hearsay evidence than does the English legislation.”

74. The UK Evidence Act is simply no longer part of Hong Kong law.  It is simply irrelevant to the assessment that has to be made in the exercise of the discretion whether or not to admit hearsay evidence.

Discussion

75. I am fully aware that if I should hold that the Father’s witness statement should be excluded, there will be no evidence at all to counter that of Peter as to the circumstances in which the properties were purchased.  That is a result with a very weighty consequences and I have given this matter very anxious consideration.

76. The weight of the evidence lies heavily with the conclusion that at the time the Father made his witness statement his memory was impaired, his ability to speak was impaired, and he was in a state of, at least partial, if not full, dementia.  The plain inference is that a great deal of assistance must have been given to the Father in the preparation of the witness statement.  It is more likely than not that that assistance came from Paul, and the solicitor who prepared the statement.  In the circumstances of this case, having regard to the limited ability of the Father both to remember matters and to express himself, the statement becomes not a statement of the Father, but of Paul and solicitor.

77. Weighing all the evidence, with the matters required to be considered under section 49(2), I have come to the conclusion that it would be quite unsafe to place any weight at all on the Father’s witness statement as being a true statement of events.

78. Where no weight can be placed on a witness statement then the court will simply disregard that witness statement.  Consequently the exclusion of the evidence will not be prejudicial to the interests of justice.  This same conclusion was reached by Lam J (as he then was) in Cheung Wei Man Vivien v Centaline Property Agency Ltd & Ors (unreported, 25 September 2003, HCA 286/2000).

79. I am accordingly satisfied that the witness statement of the Father must be excluded from the evidence on the ground that it is hearsay.  If I am wrong in that conclusion, and the statement should be admitted, then for the foregoing reasons I am unable to place any weight at all on that statement and I disregard it entirely.

Madam Hui’s evidence

80. Madam Hui asserts as to the truth of a certain number of paragraphs in the Father’s witness statement.  The time period dealt with in these paragraphs begins in March 2011, and relates to events that occurred after that date.  Consequently the evidence does not assist Paul or the Father in respect of the circumstances surrounding the acquisition of two properties, at the time they were acquired (2006‑7), the relevant time to determine the interests of the owners.

81. In his witness statement the Father makes assertions as to his mental state, but those assertions are contradicted completely by the medical reports.  Madam Hui says that the Father’s assertions are true.  I prefer the evidence of the doctors to the evidence of Madam Hui as to the Father’s mental state.

82. Although Madam Hui asserts as to the truth of certain paragraphs in the Father’s witness statement she makes no statement at all as to the source of her knowledge of that truthfulness.  By way of example, in §32 of the Father’s witness statement, he talks of the Declaration (see §84 below). Madam Hui was not present on that occasion, and the only source of knowledge could be from the Father or one of the others present.  Her assertion is hearsay.

83. Having determined that I can place no weight on the Father’s witness statement, any assertion that Madam Hui may make as to the truth of any paragraph in that statement takes the matter no further.  That is particularly so when regard is had to the interest she has the outcome, (see §59 above).

The Declaration

84. On 15 May 2011, at a restaurant, in the presence of Paul and Patrick, one of the Father’s brothers, one of the Father’s cousins, and a family friend, the Father signed a document, in Chinese, described as a “Declaration”. In the Declaration the Father makes a number of statements in relation to the acquisition of two properties and other matters that have arisen subsequently, all of which are entirely consistent with the case that was advanced on his behalf.  In so far as the Father’s case is concerned, the document is entirely self serving.

85. The document was drafted and prepared by Paul.  That is entirely consistent with the way in which Paul appears to have been the guiding hand behind the whole of the case for the Father.  In that respect it must be remembered that Paul has a direct interest in the outcome of the proceedings.  If the Father’s case succeeds, his estate will increase accordingly, and Paul may reasonably expect to benefit on his Father’s death.

86. Of the five people present who signed as witnesses to the Declaration the only one who gave evidence was Paul.  It must have been anticipated that if Patrick, the Father’s brother and cousin, and the friend were called they would be cross examined as to the Father’s capacity at the time.  I have already set out the extent of the evidence that demonstrates that even at that time the Father was suffering from mild dysarthria, and that prior to that his family had noted that his memory was deteriorating.

87. The only inference that can be drawn from the failure to call those witnesses is that they could not have been relied upon to assert as to the competency of the Father to understand and make the declaration.  In the whole of the circumstances I am unable to place any weight at all on statements written by Paul and purportedly adopted by the Father in the Declaration.

88. In any event, the Declaration is inadmissible as against Peter.  The law is clearly stated in Shepherd v Cartwright [1955] AC 431 at 445, where the following passage from Snell’s Equity, 24^th Edn, p 153 is cited:

“Theacts and declarations of parties before or at the time of the purchase, also immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or make the declaration….But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour.”

Viscount Simonds goes on to say:

“… the burden of authority in favour of the broad proposition as cited in the passage I have cited is overwhelming and should not be disturbed.”

89. Shepherd v Cartwright has been followed in Hong Kong in Overseas Trust Bank v Lee See Ching Jong [1999] 3 HKC 197.

90. The rationale for the rule is patently obvious.  If such declarations were permitted a man could bolster his case was a series of subsequent entirely self-serving declarations.  Thus, while the declaration would be admissible against the Father, it is not admissible against Peter.  It should never have formed part of the Father’s case.  I accordingly disregard it entirely. 

91. On 13 July 2011, the Father signed a “Letter of Authorisation” in which he authorised Paul and Patrick to deal with the properties in place of Peter.  In so far as the letter might be considered a statement by the Father of his sole ownership of the properties, for the reasons given above, it is not admissible against Peter.

Paul’s computer note

92. Throughout his evidence Paul denied that he had any interest in sharing in the properties.  In cross-examination Paul admitted that he had made a note in his computer of various matters which he said the Father had told him from 20 April 2011, onwards.  This computer note was plainly discoverable, but was not revealed until during the course of the trial.  Paul admitted that he had made the note because he was very concerned about matters.  In the circumstances it is difficult to understand what concern he might have had other than his own interest in the matter, particularly bearing in mind that prior to his disability, the Father had no concern about Peter’s administration of the properties.

93. It is of interest to note that included in the note was a heading: “Evidence and Information Provided” and a subheading: “CCTV footage provide evidence and motives to (Peter’s) false allegation against me (Peter himself is a long serving auxiliary police officer)”.

94. Paul is a full time police officer and plainly experienced in assembling evidence for a trial.  Consequently, it is surprising that there were numerous incidents in his cross-examination where he was obliged to concede that matters contained in his witness statement were not contained in the computer note.  He was obliged to admit that the Father had never told him that the Father had paid for the complete purchase price of the second property, yet that statement was included in the computer note.  His assertion that he typed that by mistake is simply incredible.

95. No reliance can be placed upon the note.  It was not made contemporaneously with the events it recorded.  Paul admitted that he did not begin making the note until at least a month after the first events it recorded.

The CCTV transcripts

96. The submission was made for the Father and Paul that the CCTV transcripts showed subsequent statements that had been made by Peter on the question of intention and understanding between the Father and Peter.  In particular, reliance was placed by Mr Mak on the following words from Peter, recorded on 20 June 2011[8]:

“… let us talk about (the first property) first. Someone is going to (buy it), 3.5 million… Well …

…

Well, now someone is offering a price for buying your flat.

…

Hey, Dad, the reason why I am so irritated is that I am making money for you. … What did you serve a demand letter to sue me ...

...

Your so-called rental, I told you that, hey Hoi Yee[9] has to study. I have to take the money out to help Hoi Yee. I am talking about the money here, money in the passbook account. ... After the flat has been sold, I would calculate everything exactly and clearly with you. … Why do you say to me that I have taken all your money now? I am really baffled.

…

We promised, ... Promised that if there’s money earned, we were divided on a fifty-fifty basis. …

…

Now I get you a (buyer) for 3.5 million… I tell you one thing first, Dad, only one of the suites is occupied, because the people had all gone. …

Now there is a (buyer), sell it then.  Hey when you have sold….  Your 1.5 million would be returned and your account passbook precisely and we would divide the remaining money.  You have 1 million; you have as much as 2 million.  One would only be too glad to do it, why have to …”

97. Mr Mak says that the assertion that $1.5 million would be returned to the Father is a statement against Peter’s interest in that he is acknowledging that he made no contribution in money terms to the purchase of the first property. 

98. In my view, the passage is equivocal. Whilst it may be argued that Peter is making a statement against interest, it may equally be argued, as Mr Ko submitted, that in this passage Peter is not making a statement against interest, but is seeking a means of resolving the differences that had arisen between himself and his Father.  Peter is, the submission was, prepared to make a concession in respect of the beneficial ownership of the property being shared equally, instead his father taking the whole of the initial purchase price and the profit being shared equally. 

99. The circumstances in the family were very unhappy at this time.   Peter is plainly aware of his father's disability and is endeavouring to appease him.  I am satisfied that it is more likely than not that Peter is merely endeavouring to resolve the differences by making a compromise.  It is not a statement against Peter’s interest.

100. Mr Ko relied upon the following passage, recorded on 17 August 2011[10]:

“Father:	I want the property ownership.
Peter:	You can take it back. The property ownership is always there (sic).
Father:	What is always there. I never have the ownership.
Peter:	Don’t you listen to (Paul). It is yours, (do not say you) do not have. Property ownership … it is you who want to snatch my share of the property ownership. You are trying to get my share, (don’t say you) don’t have. You have the ownership. You are trying to t-t-take my share of ownership. You are trying to t-take my share of ownership. My lawyers said, you are trying to take my half … take my half. Your half is there. But what are you trying to get (?) You are trying to take 100%.
Father:	100% ... (I) can’t take.
Peter:	Now I am asking, this flat, Man Fai Building, who is the owner?
Father:	You and I both.
Peter:	What proportion do we each get (?)
Father:	Fifty-fifty.
Peter:	That’s it, that’s it. What are you now suing me for (?) What are you now find me a lawyer to sue me for (?)? Do you know what you are suing me for (?)
Father:	S-s-suing y-y-you…No … (sic)”

101. Peter is entitled to rely upon that passage to assert that, at the least, the Father is acknowledging that Peter is entitled to a half share in each of the two properties.  Being a statement against interest, that is a statement against the case the Father now advances, and the statement is admissible against the Father. 

102. The final exchange did not form part of the passage Mr Ko relied upon.  But it goes to demonstrate that even at that time the Father appears to be quite unaware that instructions had apparently been given by the Father to solicitors to send a letter before action to Peter.

103. Those were the only two passages that Mr Ko and Mr Mak relied upon directly in their speeches.  That only those two passages were relied upon demonstrates how little evidence of any real nature actually came from the 178 pages of transcripts.  Other than as stated above, I placed no reliance on the CCTV transcripts.

Other background

104. It is convenient at this stage to note that it is not in dispute that the Father had the following further property interests:

(i) On 19 October 2006, (between the purchase of the first property and the second property), the Father, in his own name alone, purchased a property at Flat 22, 8^th Floor, Man Wai Building, 1‑23 Man Cheong Street and 2‑24 Man Wai Street, Kowloon.

(ii) The Father and one Hui Jat Man (Mr Hui[11]) were the registered joint owners of Garage Car Park 210, 1^st Floor, Carado Garden, 20‑30 Tin Sam Street, Sha Tin, New Territories.  Through the joint instructions of the Father and Mr Hui that property was sold on 26 November 2010.

(iii) The Father and Mr Hui were the registered joint owners of Car Parks P215 and P218 Sun Hing Garden, 2 On Po Lane, Tai Po, New Territories.  Through the joint instructions of the Father and Mr Hui that property was sold on 16 May 2011.

(iv) The Father, Peter, and Mr Hui were the joint registered owners of Shop 162, Upper Ground Floor, “268 Computer Zone” 268 Hennessy Road, Wanchai, Hong Kong.  Through their joint instructions completion of the sale of the shop took place on 1 November 2011.

105. There is no evidence as to the dates when these properties were acquired.

106. There is an issue on the pleadings as to the mental capacity of the Father in effecting and handling of those sales, but at the end of the day, with one exception, (see §110 below), nothing turns on that issue, because no claim is made by the Father against Peter as to the application of the proceeds of sale following disposal of the properties. 

107. With the two properties in dispute, the Father had purchased a total of six properties with the ownership variously involving himself, Peter, and Mr Hui, with title being held in one case by the Father alone, two by the Father and Mr Hui, as joint tenants, one with the Father, Peter, and Mr Hui as joint tenants, one with Peter as a tenant in common in equal shares, and one with Peter as joint tenants.

108. There was no evidence to suggest that on the acquisition of each of those properties the manner in which title was being held was not properly explained to the Father.  The evidence was that over the years the Father had consistently used the same firm of solicitors to advise him on his property matters.  It is plain that the Father is an experienced property investor.

109. The number of acquisitions, and the different manner in which the various properties were held, all point to a property investor who knew and understood what he was doing, and made deliberate decisions on each occasion as to how title would be taken.

110. Once again, it is significant that there was an available witness who might have been called to assert to the contrary in this respect.  There was no suggestion that Mr Hui could not have been called to give evidence in respect of his involvement in the acquisition of the various properties, and the Father’s mental condition both at the time of acquisition and at the time of sale.

Peter’s evidence

111. There is no evidence to contradict Peter’s evidence of the circumstances of the acquisition of the two properties.  Paul was obliged to concede that he knew nothing of the conversations that had taken place between the Father and Peter at the time the two properties were acquired.  Madam Hui had no direct knowledge of those conversations.  Peter was clear and straightforward in his evidence.  He was not moved in cross examination. 

112. As the eldest son the Father chose Peter with whom to make property investments.  That is not surprising with a traditional Chinese man, as the Father plainly is.  There is no independent evidence at all to contradict Peter’s proposition that his Father intended other than that Peter should benefit in the properties in accordance with the way in which title was taken.  In fact, Peter’s involvement in the other purchases with his Father, about which no complaint is made, serves to provide independent evidence of the Father’s intentions.

113. Part of Peter’s rationale for his Father favouring him was that he had been mistreated by his mother as a child, and that his mother had favoured his younger brothers.  In evidence Paul confirmed that the mother’s relationship with Peter had not been a good relationship.  Paul did not dispute Peter’s assertion that during her lifetime the mother had favoured Paul and Patrick.  In those circumstances it is not at all surprising that the Father would favour Peter.

114. It is significant that between the acquisition of the two properties, May 2006, and November 2007, and April 2011, no complaint at all was made by the Father as to Peter’s administration of the two properties.  Peter says, and there is no evidence to the contrary, that he regularly kept his Father informed of the state of the properties in the rental proceeds. 

115. It was not until after April 2011, when the Father’s physical and mental health began to deteriorate, and Paul discovered Peter’s interest in the two properties, that any complaint was made.  If, as was asserted on behalf of the Father, Peter’s interest in the two properties was held on trust for the Father, he being entitled to the whole of the rental proceeds from two properties, I have no doubt at all that the Father would have complained earlier to Peter.

116. Up until April 2011, Peter managed the two properties, and applied the proceeds of the rent as he wished, including supporting his daughter in overseas education, orally reporting to his father, and without complaint.  I am satisfied that Peter discussed the application of rental towards Peter’s daughter, Hoi Yee’s education with the Father and that the Father was perfectly content with that payment.

117. It was not until April 2011, and Paul’s involvement in the matter, that the Father began to complain.  The lack of complaint prior to April 2011, is entirely inconsistent with the case now advanced for the Father.  It is entirely consistent with Peter’s case.

118. Peter’s evidence was that his Father wished to keep Peter’s involvement in the properties secret from the other family members.  He plainly recognised that Paul would be extremely dissatisfied if he learned that the Father had involved Peter in the properties, to the future benefit of Peter. Paul’s conduct since learning of Peter’s interest in the two properties has entirely justified the Father’s desire to keep Peter’s interest in the properties secret.

119. Paul’s involvement as the driving force in this litigation demonstrates the very concern the Father had.  There is a strong inference that the complaints raised by the Father as to Peter’s administration of the properties have been stimulated and encouraged by Paul once he learned of Peter’s involvement in the properties.

120. I am satisfied that the Father was not concerned as to whether or not each made equal contributions in cash terms to the acquisition of the two properties.  To the extent that his cash contribution exceeded Peter’s, I am satisfied that the Father intended to make a gift of the difference to Peter.  That would in part compensate Peter for the burden of managing the properties by maintaining them or arranging for them to be maintained, finding tenants, dealing with tenants and accounting matters.

121. I am satisfied on the balance of probabilities that the intention of both the Father and Peter at the time the first property was purchased was that they should own it as joint tenants, and as to the second property that it should be owned by them as tenants in common in equal shares. In respect of both properties each held both the legal and beneficial title pursuant to that common intention.

A common intention constructive trust

122. In respect of both properties, Peter asserts that his Father told him that he would give Peter all the rights and benefits of all his vested real estate on his death for always having managed the properties.  He says that the purpose of the joint tenancy was so that Peter could inherit the property on his Father’s death.  It is upon these assertions that Peter contends that the legal interest his Father held in the two properties was held on a common intention constructive trust so that the beneficial title was in Peter.

123. The modern approach to a common intention constructive trust is well stated in the following passages of the decision of Godfrey Lam J in Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9, cited with approval by the Court of Appeal in WML v LCK (unreported, [2015] HKEC 338):

“46. The focus of the inquiry is therefore on the elements that the plaintiff has to prove in order to establish a constructive trust in his favour. In the context of this case, this means that the plaintiff must prove: (a) there was a common intention between him and the defendant that the plaintiff was to be the beneficial owner of the Property despite that it was acquired in the defendant's name; (b) the plaintiff altered his position in detrimental reliance upon such common intention; and (c) it is unconscionable for the defendant to assert ownership in reliance on her legal title to the Property.

47. In ascertaining whether there was a common intention, it is the objective intention of each party ‘which was reasonably understood by the other party to be manifested by that party’s words and conduct’ that one must examine: Gissing v Gissing [1971] AC 886, 906; Jones v Kernott [2012] 1 AC 776, 794 [51].

48. In the present case it is the parties’ common intention at the time of the acquisition of the Property that is relevant, there being no suggestion from anyone that the intention had changed.

49. Such intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the Property concerned based on evidence of express discussions. It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention: Lloyd’s Bank Plc v Rosset [1991] 1 AC 107, 132-133.

50.  Even where, as in this case, reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested.”

124. The evidence in this case falls a long way short of meeting the requirements that are needed to establish a common intention constructive trust. The statements relied upon by Peter are equivocal in the sense that they may equally be seen as a statement of a future intention in respect of a will.

125. I accordingly reject the claims made by Peter for a declaration of a common intention constructive trust.

126. The presumption of advancement is not applicable in this case.  The Father has made a clear statement of his intention and the manner in which title has been taken to the properties.  That is sufficient evidence of the intention of the Father at the relevant time.

Promissory estoppel

127. The leading authority in Hong Kong on promissory estoppel is the decision of the Court of Final Appeal in Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1.  At §55 Ribeiro PJ said:

“A promissory estoppel may be said to arise where (i) the parties are in a relationship involving enforceable or exercisable rights, duties or powers; (ii) one party (the promisor), by words or conduct, conveys or is reasonably understood to convey a clear and unequivocal promise or assurance to the other (the promisee) that the promisor will not enforce or exercise some of those rights, duties or powers; (iii) the promisee reasonably relies upon that promise and is induced to alter his or her position on the face of it, so that it would be inequitable or unconscionable for the promisor to act inconsistently with the promise.”

The relationship

128. In Luo Xing Juan the court found that the couple were living together as man and wife.  Peter and the Father had a relationship only of father and son.

129. The court found in Luo Xing Juan that at the time the promise was made the deceased was the controlling shareholder in a company, having 80% of its shares, and had the power to cause the company to exercise its rights over property in a manner adverse to the interests of Miss Luo.

130. There is no equivalent in the relationship between Peter and the Father. It is right that as a joint tenant of one of the properties, the father had the ability to sever the joint tenancy[12] and thereby avoid the doctrine of jus accrescendi[13], which otherwise operated in Peter’s favour.  Other than that, I cannot find the relationship between Peter and the Father to be a sufficient relationship for the purposes of promissory estoppel.

The sufficiency of the promise

131. In Luo Xing Juan, at §§59‑60, Ribeiro PJ had this to say about the sufficiency of the promise:

“While the promise need not be express, the meaning of the promise conveyed by the promisor’s words or conduct must be clear and unequivocal. He must make it clear that he is promising not to enforce the relevant rights or powers. This message must be conveyed with a clarity similar to that needed to vary a contract. Whether there is sufficient clarity is to be assessed objectively by the court.

The court will seek to ascertain the meaning in substance of the promise.  It is the substance of its meaning that must be clear and unequivocal.  A promisor may make his intentions perfectly plain but, not being a lawyer, may express himself in terms which are legally imprecise or inaccurate.  A promisee may likewise clearly understand the substance of what is being promised without any knowledge of the legal rights or powers within which the promise is framed.”

132. In the present case the promise upon which Peter places reliance is equivocal.  It may be a promise that Peter will receive full title to the properties at some stage in the future, during the Father’s lifetime, but it is more likely that it is a promise that the Father will deal with the properties to Peter’s advantage in his will.

133. That is not a promise which can found an action for promissory estoppel while the father still lives.

134. There must be reliance upon the promise.  There is no evidence at all as to any reliance Peter may have placed upon promise that is to his disadvantage.

135. There is no basis for a claim for promissory estoppel.

The severance of the joint tenancy

136. On 19 May 2011, the Father attended his solicitors and signed a formal notice of severance of the joint tenancy of the first property.

137. Peter sought a declaration that the Notice of Severance was void and of no effect.  The argument that was made was that if it was found, as has been, that it was the common intention of Peter and the Father that they should own the first property as joint tenants, then it followed that the notice of severance was void and of no effect.

138. However, it necessarily follows from the fact that they were joint tenants that each of the joint tenants has the right, as any joint tenant does, to sever the joint tenancy.  There being no common intention constructive trust, and no rights of promissory estoppel, there can be no basis to say that that right did not exist in each of Peter and the Father.  It was equally open to Peter to sever the joint tenancy and to create a tenancy in common in equal shares.

139. In those circumstances, a severance of the joint tenancy, with the property consequently becoming owned by Peter and the Father as tenants in common in equal shares is a necessary risk that Peter carried.  In those circumstances I am unable to say that the severance of the joint tenancy is void and of no effect.

140. The case has not been pleaded or argued on the basis of undue influence.  The only basis on which Peter argued for the severance to be set aside was that the statement that he would ultimately receive the whole of the property.

The injunction and damages

141. Peter seeks injunctions restraining Paul into areas.  First, he says Paul should be restrained from causing, assisting and/or procuring the Father to dispose of, transfer away, assign, charge, deal with and/or transfer away the 50% interest in the first property registered under the name of the Father. Second, he says Paul should be restrained from visiting the first and second properties and from approaching and harassing the tenants thereof.

142. Despite his assertions to the contrary, I am satisfied that Paul engaged in these proceedings and assisted his father with a view to protecting and furthering his own interests.  That is plain from the computer note if nothing else.  He has actively assisted his father in the proceedings and in doing so has challenged Peter’s rights to the properties.

143. However, as I have found, severance of the joint tenancy was always a risk that Peter must face.  The right to sever is a lawful incident of the holder of a joint tenancy.  Once severed, the ownership of the property becomes a tenancy in common in equal shares.  There is no basis in law to restrain an equal tenant from dealing with his interest in the property.  If he wishes to sell that half interest, he is free to do so, and cannot be prevented from doing so by the other tenant. 

144. In the circumstances there can be no injunction against either Paul or the Farther in this respect.

145. As for the second injunction, the evidence fell far short of that which would be required to justify the grant.  The assertion was that on three occasions on one day Paul had approached one of the tenants in an inappropriate manner. 

146. Peter was unable to give direct evidence of anything that Paul might have done by way of interference with the tenants of the properties.  He was not present when the events were said to have occurred.  None of the tenants were called to assert as to Paul’s behaviour.  There is no evidence to justify the grant of the injunction sought.

147. Some agreement will have to be reached between Peter and the guardian ad litem as to the administration of the properties in future.  That is a matter beyond this litigation.

148. In those circumstances I am not prepared to grant the injunction sought against Paul, however leave is reserved to apply in the event that anything might happen in this respect in the future.

149. No evidence at all was led to justify an award of damages in favour of Peter against Paul.  Whatever Paul might have done in relation to the tenants, if anything, has not been shown to have caused Peter any loss at all. The claim for damages fails.

150. An injunction was also sought against the Father restraining him from disposing of his 50% interest is in the first property.  As I am satisfied that the severance of the joint tenancy must stand, (see above, §136‑140), he must be free to be able to deal with that half interest as he wishes.  There is nothing in the law to prevent a tenant in a tenancy in common in equal shares from disposing of his interest in the property.  That will be a matter for the guardian at litem.  In this respect I note that no similar injunction sought in respect of the first property.

Specific performance

151. Mr Ko framed his submissions, in part, in terms of seeking specific performance of the agreement/common understanding between Peter and the Father that the first property should be held by them as joint tenants. 

152. Specific performance was not pleaded as a form of relief, but in any event by virtue of the foregoing findings, I would not grant specific performance, the purpose of which was to give effect to a common intention constructive trust or a promissory estoppel.

The counterclaim by the Father

153. By his counterclaim the Father simply repeats his defence and asserts that he is entitled to declarations in accordance with his case.  He seeks a declaration that a sum of $300,000 was a loan to Peter.  There is no evidence to substantiate that assertion.  As I have recorded, if the Father’s contribution to the acquisition of property exceeded that of Peter’s, I am satisfied that Father intended to make a gift of that sum to Peter.

154. By virtue of the findings that I have made in favour of Peter, the counterclaim must fail in all respects.

Relief

155. In respect of the first property, Peter sought a declaration that he absolutely owned a 50% interest in that property.  He has established his case, and there will be a declaration that Peter is the legal and beneficial owner of a 50% share in the first property.

156. In respect of the second property, Peter sought a declaration that he absolutely owned a 50% interest in the property.  He has established his case, and there will be a declaration that Peter is the legal and beneficial owner of a 50% share in the second property.

157. I am of the view that those declarations will be sufficient to clarify the position in the family, and that no further relief is required.  If any further relief is considered necessary or essential, leave is reserved to apply.

An accounting

158. It necessarily follows from the findings I have made that Peter and the Father are entitled to share equally in the net income after expenditure from the two properties.

159. It is appropriate that I should record that I am satisfied on the evidence that the Father knew of the application of the proceeds of rental to the overseas education of Peter’s daughter, Hoi Yee, and that he approved of that expenditure.  In effect, Peter and the Father would be jointly contributing to Hoi Yee’s education by the application of the rental proceeds.  Any accounting between the parties must take this fact into account.  Peter’s re‑funding to the passbook of the amounts withdrawn amounted to nothing more than a clumsy attempt to satisfy his Father, in his state of disability, that all was well.  As was demonstrated in conversations between the Father and Peter, the Father accepted that the rental was to be divided equally.

160. It became abundantly clear during the trial that the accounting system that Peter used in respect of the income and expenses from the two properties was casual and haphazard.  It had been Peter’s practice to make notes in the bank passbooks and another notebook of the purpose for which money was spent.  That informal method may well have been satisfactory to both Peter and the Father during the Father’s competency, but it is no longer sufficient. Whilst the Father was perfectly content with the oral reports that Peter gave him prior to April 2011, that is a situation that cannot now stand.  Mr Ko raised no objection when I said that a proper accounting between Peter and the Father would now be necessary.

161. Rather than put the parties to the expense of a formal accounting I have suggested to them that they should join together to instruct a certified public accountant to undertake the exercise.  Sensible discussions between the parties and an accountant should be able to result, relatively inexpensively, in an income and expenditure statement that will satisfy all concerned.

162. Consequently, I do not propose to make a formal order for an accounting, but reserve leave to apply if that is necessary.

Costs

163. Peter has been substantially successful in the litigation, both against Paul and the Father in respect of the relief sought by way of declarations as to his interest in the property.  He has succeeded in the counterclaim against the Father, but has failed to establish a basis for the injunctions sought against both Paul and the Father.  However it is right to say that the evidence in relation to the injunctions was virtually peripheral to the central issue in the trial, that of the common understanding between Peter and the Father at the time the properties were purchased.  That was reflected in the time taken in the trial in relation to the injunctions.  The clear central issue which occupied the greater part of the trial was in relation to the legal and beneficial title to the two properties.

164. In the circumstances therefore I am of the view that justice will be done in respect of costs if Paul and the Father are ordered to pay 80% of Peter’s costs on the claim, and the Father to pay Peter’s costs on the counterclaim.  Costs are to be on the party and party basis to be taxed if not agreed.  The order is an order nisi.