FU FUNG YAN CAFORNIA AND ANOTHER v. CHAN MAN PAN the executor of the estate of CHAN LAP PAN, deceased AND ANOTHER

HCA 882/2016

[2021] HKCFI 769

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 882 OF 2016

________________________

BETWEEN

________________________

________________________

J U D G M E N T

________________________

1.  The plaintiffs in this action are Madam Fu and her three children. Each of her three children are minors. This dispute concerns the matrimonial home of Madam Fu and her deceased husband, who died on 1 May 2015, and also the estate of the deceased. The brother of the deceased, Mr Chan Man-pan, is the sole executor of the estate and the 1^st defendant in the action. He is also sued as the 2^nd defendant in the action.

2.  A consent summons was filed on 12 January 2021 by the parties, seeking to settle the disputes between parties and also with a view to vacating the trial, scheduled to commence on 18 January 2021.

3.  On 14 January 2021, Keith Yeung J ordered that the consent summons be returnable on the first day of trial.  The learned judge was not satisfied the trial should be vacated.  This was clearly correct.  The concerns raised by the judge in relation to the settlement included the fact that the 2^nd to 4^th plaintiffs were minors and the consent summons included a declaration by consent in relation to the matrimonial home.

4.  It was in these circumstances I directed submissions be filed at 10 am on 18 January 2021 and for the trial to start at 2:30 pm of that day.

5.  On the first day of trial, I raised three issues.  Two of those issues were raised by the PTR judge but I also raised an additional third issue as to the format of the consent order and the fact that it was not expressed in the conventional Tomlin order format.

6.  I also indicated that the court would require a proper application supported by a memorandum for the settlement of the minors' claims under Order 80, rule 10.

7.  This memorandum was filed on 21 January 2021 and on that day I made an order to approve the proposed settlement in the draft order annexed to the plaintiffs’ summons of that day under RHC Order 80, rule 10 insofar as it related to the claims of the minors.

8.  The parties have since filed an updated draft consent order which is now in Tomlin order format.

9.  The outstanding issue is in relation to the declaration which is sought.  The terms of the declaration are that the property known as Flat E, 36th Floor, Tower 1, Harbour Green, No. 8 Sham Mong Road, Kowloon, Hong Kong, was held by Chan Lap-pan, the deceased, as a trustee for and on behalf of himself and the 1^st plaintiff as joint tenants and is now held by the 1^st defendant as trustee for the 1^st plaintiff herein.

10.  It is of course a rule of practice that the court does not ordinarily grant declaratory relief by consent, but this rule is not rigid or inflexible.

11.  The declaration sought in essence seeks to establish that the matrimonial home was held by the deceased on a common intention constructive trust.  Although the property was registered in the sole name of the deceased, it is said, on the plaintiffs’ case, that it was beneficially held by his then-wife Ms Fu and the deceased in joint tenancy.

12.  The requirements for a common intention constructive trust are well established. First, you need to establish a common intention that, at the time of acquisition of the property, the plaintiff was to be the beneficial owner of the property despite the fact that the registered sole owner was another party, that the plaintiff had altered the position in detrimental reliance upon the common intention, and that it would be unconscionable for the defendant to assert ownership in reliance on his or her legal title to the property.

13.  I have had the benefit of written submissions and also oral submissions this morning on behalf of the plaintiffs.  I have had regard to the amended statement of claim and also the witness statements filed on behalf of the plaintiffs.

14.  The defendants, who were represented very responsibly by Mr Hu, has indicated that, in view of the settlement, no issue would be taken with the declaration.  It does appear to me that the facts as alleged by the plaintiffs and, in particular, that the property that was previously owned by Ms Fu and her husband and was held jointly does support an inference that there could be or there would be a common intention constructive trust and also that, on the facts as pleaded, that there would be detrimental reliance on the part of Ms Fu.

15.  In these circumstances, I am satisfied that it would be appropriate to grant the declaration specified in the consent order.

16.  There was a suggestion that the plaintiffs would call Ms Fu to give evidence but I do not think that would be a fruitful exercise because the defendants have ready indicated that she would not be cross-examined.

17.  Therefore, I proceeded on the basis that the facts as stated in the statement of claim and also in the witness statements would be received by the court and would be analysed by the court in determining whether or not the declaration ought to be granted.

18.  I am also satisfied that it would be useful to clarify the legal basis on which the matrimonial home was held by the deceased.

19.  In addition, I would also take into account the fact that there is evidence that the provisional sale and purchase agreement of the matrimonial home was signed roughly two weeks before Ms Fu gave birth to her second child on 9 October 2009 and it was in these circumstances in which there was an arrangement by which the deceased signed the sale and purchase agreement in his sole name, and I note this allegation is also supported by two witness statements of estate agents who were there at the time.

20.  For these reasons, I will grant an order in terms of the draft order that was submitted this morning, subject to the minor amendments which have been specified by Mr Hu for the defendants, and has been agreed by the plaintiff. This will include the declaration which I have mentioned in relation to the matrimonial home, which is specified in paragraph 1 of the draft order.