CHEUNG SIK LANG, the sole executor in the estate of CHEUNG WAI WAH, deceased v. LEE PUI LAI

DCCJ1472/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1472 OF 2012

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JUDGMENT

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BACKGROUND

1.  The plaintiff and the defendant are siblings.  The plaintiff claims vacant possession of a property known as Flat 6, 20^th Floor, Block A, Sui Wo Court, No. 5 Sui Wo Road, Shatin, New Territories (the “Property”), which forms part of the estate of their late mother, Madam Cheung Wai Wah (“Mother”).  The plaintiff, who is the sole executor of the Mother’s last will dated 30 August 2002 (the “Will”), is prima facie entitled to possession of the Property.

2.  The defendant has been living in the Property since no later than 2000.  There is no real dispute that when the defendant first began to occupy the Property, she did so under an express or implied licence from their father, Mr Lee Yu (“Father”), and/or Mother, who owned the Property as joint tenants.  The Father passed away in February 2003.  Accordingly, his interest in the Property passed to the Mother by survivorship.  The Mother passed away in November 2007.  Probate was granted to the plaintiff on 5 December 2011 (“Probate”).

3.  The defendant objects to vacating the Property primarily on the basis that Father and Mother had, when they were alive, promised her that she could live in the Property for life.

ISSUES

4.  The issues arising are:-

(1)   Whether the defendant’s licence was irrevocable in law or in equity; and

(2)   If the defendant’s licence was not irrevocable, whether the same has been validly revoked or terminated.

5.  Pausing here, I should add that the defendant (who was not legally represented) had, over the course of these proceedings, also raised various allegations challenging the validity of the Will and the Probate.  However, it was made abundantly clear to the plaintiff at the previous adjourned hearing of this trial before His Honour Judge Kent Yee on 14 July 2014 and at the beginning of this resumed hearing that her proposed challenge would not be entertained in this case as the District Court has no jurisdiction over these matters.  In any event, those allegations did not form part of the defendant’s pleaded case.  I also disallowed the defendant’s last minute oral application to adjourn the trial because no exceptional circumstances had been made out justifying yet another adjournment.

THE WITNESSES AND THEIR CREDIBILITY

6.  The disputes in this case are all factual.  The outcome depends on my finding of credibility of the witnesses.  Both the plaintiff and the defendant gave viva voce evidence at trial.  In assessing the credibility of the witnesses, I am guided by the principles set out by Deputy Judge Thomas Au (as he then was) in Lee Fu Wing v Yan Po Ting Paul [2009] 5 HKLRD 513 at §53:-

“In assessing the credibility of a party’s case on a particular issue, …the Court should take into consideration the following:

(1) Whether the party’s case is inherently plausible or implausible;

(2) Whether the party’s case is, in a material way, contradicted by other evidence (documentary or otherwise) which is undisputed or indisputable;

(3) Where it is shown that a witness has been discredited over one or more matters to which he has given evidence using the above tests, this is relevant to the assessment of his overall credibility; and

(4) The demeanour of the witness.”

7.  The plaintiff is the defendant’s elder brother.  His evidence was straightforward.  After Mother passed away, he obtained Probate as sole executor of Mother’s estate on 5 December 2011.  By letter dated 23 April 2012, the plaintiff through his solicitors, Messrs Kelvin Cheung & Co, demanded the defendant to deliver up vacant possession of the Property within 7 days.  This demand was ignored.  The defendant, although still occupying the Property, stopped paying for its management fees in around mid-2012.  The plaintiff has been paying the management fees since then in his capacity as legal owner.  

8.  Generally, I find the plaintiff to be a reliable and honest witness.  His evidence accorded with common sense, and was consistent and inherently credible.  He gave evidence in a straightforward and cogent manner, and was not shaken in cross-examination. I accept his evidence.

9.  The defendant’s evidence was that Father and Mother had agreed she could stay in the Property for life and that the plaintiff knew about this.  In support, she relied on an authorization from Father dated 26 April 2002 authorizing the defendant to manage all sale and rental related matters concerning the Property (“Authorization”), a purported will signed by Father dated 6 August 2002 (“Father’s Purported Will”), as well as an undated and unsigned draft will of Mother (“Draft Will”).  The defendant pointed out that the Will did not specifically authorize disposal of the Property and on that basis queried the plaintiff’s right to sell it against Father and Mother’s common wish.

10.  The plaintiff disputed the defendant’s allegations.  The plaintiff stated in his testimony that he had no knowledge of Father’s Purported Will or Authorization, and has never seen the Draft Will.  The plaintiff had never heard Father or Mother stating to the effect that the defendant could stay in the Property for life.  He had not made any such promise to the defendant himself.

11.  The defendant is in her sixties.  She appeared to have reasonably good memory.  She gave evidence at trial in an evasive manner, and usually responded to simple questions with long and convoluted answers.  Her evidence is mostly made up of bald assertions.  When she was asked for more details, she said she could not recall and shifted the burden of answering the question to her brother, the plaintiff, or refused to answer on the ground of privacy.  Her evidence was inconsistent with her written statements and affidavits in a number of material respects.  When confronted with these inconsistencies, the defendant prevaricated.

12.  Most notably, the defendant gave different versions of how Father’s Purported Will was prepared.  The defendant’s evidence in her statement was that Father wrote the Purported Will himself but stated in her oral testimony that the document was actually written in her handwriting under Father’s instructions.  

13.  Even allowing for the usual complexities associated with an aged witness, I do not think she was honest and telling the truth.  On the contrary, I think she was deliberately withholding the truth. I do not accept her evidence.  I have no difficulty in preferring the plaintiff’s evidence to that of the defendant where there is any conflict.

WAS THE DEFENDANT’S LICENCE IRREVOCABLE?

14.  At common law, a licence, unless coupled with a recognized interest in property, was always revocable, for the licence had no estate or interest in the land that would entitle him to remain there: see Megarry & Wade, The Law of Real Property (8^th ed, 2012) at §34-007.

15.  This simple position of a licence has been modified in important aspects, namely, where revocation is restricted by contract or where the licence had been acted upon (in the sense that the licensee has completed his or her use) or where revocation is restricted by estoppel (see §§34-008 to 34-013).

16.  As there is no suggestion that the licence granted to the defendant was coupled with a recognized interest in property and it is not the defendant’s case that she has completed her use of the Property, the questions arising here are whether, on the evidence placed before me, the defendant has either (a) a contractual right to remain in occupation of the Property for the rest of her life; or (b) an equity in the Property in the form of a proprietary estoppel restricting revocation of her licence. 

Revocation restricted by contract

17.  I turn first to the question as to whether revocation of the defendant’s licence was restricted by contract.  This is the logical place to start, for if the defendant has an enforceable legal right to remain in the Property for the rest of her life, then there can be no scope or need for the intervention of equity.

18.  The learned editors in Megarry & Wade explained as follows at §34-008:-

“Revocability a matter of construction. Except in those cases which are governed by statute, then whether or not a contractual licence is revocable is a question of construction of the contract. If the contract makes no express provision for determination, the court will imply a term that is appropriate in the circumstances.”

19.  Pausing here, the learned editors noted at §34-011 that the English courts had found, in a number of cases involving informal family arrangements, an implied contract which prevented or restricted the revocation of a licence.  One such decision cited was Tanner v Tanner [1975] 1 WLR 1346.  In that case, a man bought a house and installed his mistress and their twin daughters in it, the mistress having given up her rent-controlled flat.  The man sought possession of the house, but the English Court of Appeal inferred a contractual licence under which the mistress and children were entitled to retain the house so long as the children were of school age and reasonably required the accommodation. Brightman J said at p 1352:-

“The defendant in the present case was clearly a licensee of accommodation in the house with a right to occupy it for herself and the twins so long as the licence was not lawfully terminated. The question then arises whether the plaintiff was entitled to revoke the licence at short notice. If the licence had been granted without any consideration at all, then it could have been revoked at short notice. In my opinion there was consideration. I think that the proper inference to be drawn from the facts is that the defendant was granted a licence on the terms that she would give up her rent-controlled flat in Steeles Road and look after the twins at 4 Theobalds Avenue.”

20.  The right which the defendant claims in this case is much greater than what was claimed in Tanner v Tanner. It is alleged in the instant case that Father and Mother had agreed and were bound to provide accommodation for the defendant at the Property without any limitation of time, ie for the defendant’s life.  Presumably, such an obligation would not be dependent on any changes that may take place in the circumstances or needs of Father, Mother or the defendant in the future.  Can such a contract be inferred from the evidence in the present case?

21.  In my view, taking the defendant’s case at its highest, the evidence simply does not permit the inference of any contract entitling the defendant to be accommodated at the Property for the rest of her life.  What was originally referred to as an arrangement Father and Mother had “agreed” to was later watered down to being merely their “common wish” (共同意願) in the defendant’s oral evidence.  It also transpired from her testimony that she was not required to give up anything when she moved into the Property in around 2000, as she did not have a job at the time.  Indeed, the defendant frankly admitted that she gained financially as a result of her move in two ways.  First, she was able to rent out her To Kwa Wan property (where she had been living) for HK$5,000 to HK$6,000 per month after her two sons moved out.  Second, after Mother moved to Shenzhen in around 2001, the defendant was no longer required to look after Mother and she rented out the two rooms in the Property for HK$1,300 to HK$1,500 per month each, which she kept as income for herself.

22.  This is in contrast to Tanner v Tanner where the court found that the mistress was granted a licence in consideration for her giving up her rent-controlled flat and looking after the children in the new property. 

23.  In the circumstances, on the evidence before me, I am wholly unable to infer an enforceable contract under which Father and/or Mother became obliged to accommodate the defendant at the Property for the rest of her life.  I find that the licence had been granted to the defendant without any consideration at all and therefore, applying Tanner v Tanner, could have been revoked at short notice, subject to the question of proprietary estoppel, which I now turn to.

Proprietary estoppel

24.  Proprietary estoppel is a means by which property rights may be affected or created.  It describes the equitable jurisdiction by which a court may interfere in cases where the assertion of strict legal rights is found to be unconscionable: see Megarry & Wade at §16-001. As Lord Denning MR said in Crabb v Arun District Council [1976] Ch 179 at 187:-

“The basis of this proprietary estoppel – as indeed of promissory estoppel – is the interposition of equity. Equity comes in, true to form, to mitigate the rigours of strict law. The early cases did not speak of it as ‘estoppel’. They spoke of it as ‘raising an equity’. If I may expand what Lord Cairns LC said in Hughes v Metropolitan Railway Co (1877) 2 App Cas 439, 448: ‘it is the first principle upon which all courts of equity proceed’, that it will prevent a person from insisting on his strict legal rights – whether arising under a contract, or on his title deeds, or by statute – when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties.”

25.  In the context of the general position of revocability of licence that has been modified, Megarry & Wade (at §34-013) explains as follows:-

“Revocation restricted by estoppel. The doctrine of proprietary estoppel has already been explained. It has no necessary connection with the law of licences, though the converse was once thought to be true. If A has a licence over B’s land, and B encourages him to act to his detriment in the belief that he will acquire certain rights over B’s property, an equity may arise in A’s favour. One way in which the court may satisfy that equity arising by estoppel is by declaring A’s licence to be irrevocable, either in perpetuity or only on the occurrence of certain events or only by giving an extended period of notice.”

26.  The essential elements of proprietary estoppel are well established. In summary:-

(1)   The owner of land induces, encourages or allows the claimant to believe that he has or will enjoy some right to benefit over the owner’s property (“Representation”);

(2)   In reliance upon this belief, the claimant acts to his detriment to the knowledge of the owner (“Reliance”); and

(3)   The owner then seeks to take unconscionable advantage of the claimant by denying him the right or benefit which he expected to receive (“Detriment”).

See:   Megarry & Wade at §16-001;甘百利投資有限公司 v佛道修明協進會有限公司等, unreported, HCMP 4032/1996, 26 July 2006, per Chung J at §38; Chan Gordon v Lee Wai Hing [2011] 2 HKLRD 506 per Deputy High Court Judge Au-Yeung at §28.

Representation

27.  As stated, the defendant originally claimed that Father and Mother had “agreed” she could stay in the Property for life but this was later watered down to being merely their “common wish” (共同意願) in the course of her oral evidence.  In support, the defendant relied on the Father’s Purported Will and Authorization, as well as the Mother’s Draft Will.

28.  The Authorization simply stated that the defendant was authorized to manage all sale and rental related matters concerning the Property.  It offers no support for the alleged agreement or wish that the defendant could stay at the Property for life.

29.  The Father’s Purported Will, on the other hand, provided that the defendant could unconditionally occupy or use the Property for the rest of her life but such occupation or use was limited to half the Property only.  Accordingly, even taking the defendant’s case at its highest, this document only conferred permission to occupy or use half of the Property for life, and not the whole of the Property as the defendant now contends.  It should be noted that Father’s Purported Will also provided that the Property could be sold and 5% of the sale proceeds should be donated to charity.

30.  Different accounts were given as to how Father’s Purported Will was prepared.  The defendant’s evidence in her statement was that Father wrote the Purported Will himself but she stated in her oral evidence that the document was actually written in her handwriting under Father’s instructions.  She prevaricated when she was confronted with this inconsistency between her oral testimony and written statement.

31.  It is also of significance to note that Father did not sign on the main body of the Purported Will (at page 124 of the bundle).  Rather, his signature appeared on a separate page (at page 123 of the bundle).  When asked why Father did not sign on the main body of the Purported Will in cross-examination, the defendant alleged for the first time that the signature page and the main body of the Purported Will were in fact contained on the same piece of paper, such allegation not having been raised or foreshadowed in her pleading or any of her statements and affidavits previously filed in court.  The defendant further motioned that the Purported Will was written on what appeared to be a piece of A3 paper, with the signature page on the left and the main body on the right.  The paper was then folded in half with the contents facing each other.  When asked the simple question whether that meant the contents could not be seen when the paper was folded together, the defendant refused to answer.

32.  The Fathers’ Purported Will was not witnessed by anyone.  Although the defendant stated in her affidavit dated 16 October 2012 that the original copy of the Father’s Purported Will was in her possession, she did not bring the same to court, notwithstanding this court’s reminder at the end of the first day of trial as a condition for adjourning slightly early that she must bring all relevant documents she wished to rely upon to court the next day.

33.  As mentioned, the plaintiff disputed the Father’s Purported Will and his evidence was that he had no knowledge of the document.  If Father’s Purported Will did in fact exist, the defendant would have no doubt brought it to the attention of the family including the plaintiff when Father passed away in February 2003, just six months after he allegedly executed the Purported Will on 6 August 2002.  The fact that the plaintiff had no knowledge of Father’s Purported Will suggests that the document did not in fact exist but was rather a recent fabrication.

34.  The Draft Will was undated and unsigned.  It stated that the Property was to be transferred to the plaintiff and the defendant as joint tenants if Father passed away before Mother.  The Draft Will further provided that Mother’s wish was that the Property would be kept permanently as an ancestral home where descendants of the family could stay.

35.  Father’s Purported Will and Mother’s Draft Will provide no more than very weak circumstantial evidence to the alleged agreement or wish.  These documents must be viewed against the defendant’s own evidence, who stated in her affidavit dated 16 October 2012 that they were drawn up by Father and Mother together at the same time (“其間”, “共同”).  This assertion does not stand up to the contents of the documents which show clearly that the expectations on the future of the Property were very different between Father and Mother.  Father was willing to sell the Property and donate 5% of the proceeds to charity, whereas Mother wished to keep it permanently as an ancestral home for the family.  This directly contradicts the defendant’s evidence that these documents reflected Father and Mother’s “common wish” and that they were drawn up after discussions with each other.

36.  In any event, I do not see how these documents could assist the defendant’s case.  Father’s share in the Property passed to the Mother by survivorship when he passed away.  The joint tenancy was never severed or determined.  It follows therefore that I do not see how Father’s Purported Will could restrict Mother’s interest or rights over the Property.

37.  The Draft Will was never signed.  Even if there were discussions or oral promises between Father and Mother that the defendant could occupy the Property for life, those discussions must have taken place around 6 August 2002, when Father executed the Purported Will.  This is because the defendant’s own evidence was that Father’s Purported Will and the Draft Will were drawn up by Father and Mother together at the same time after discussions.  Those discussions must have been no more than indications of future intentions, which in my view could not be accepted as a representation or assurance.

38.  My view is fortified by the fact that the first part of the Draft Will was never implemented, namely, that the Property was to be transferred to the plaintiff and the defendant as joint tenants if Father passed away before Mother.  Mother took no step to carry this into effect, even though Father passed away over four and a half years before she did. This reinforces the fact that the contents of the Draft Will amount to nothing more than indications of her future intentions, which were capable of being changed and did in fact change as can be seen from the Will.

39.  In any event, I do not see how those discussions or oral promises (if they did take place) could, as a matter of law, confer upon the defendant an entitlement to occupy or use the Property for life.  The Will, which is the Mother’s last will, did not give the defendant any interest in the Property or a right to occupy or use it.  Likewise, there is nothing in the Will that reduces or restricts the plaintiff’s interest or rights over the Property.  An oral promise could not be used to overturn the legal effect of a will: Peter Young and Lo Wai Yee Jaffe, unreported, HCMP 2441/2008, 11 September 2009, per Chu J (as she then was) at §32.

40.  Accordingly, I find that there was no representation by Father and/or Mother that the defendant could stay at the Property for life.

Reliance and detriment

41.  As issues of reliance and detriment are intertwined, I shall deal with them together.

42.  Putting the defendant’s case at its highest, as stated above, the discussions between Father and Mother must have taken place around 6 August 2002, by which time Mother had moved out of the Property and relocated to Shenzhen.  There is no evidence that the defendant relied on any alleged discussions, agreement or promises when she first moved into the Property no later than 2000.  Instead, the defendant’s evidence in cross-examination was that she moved into the Property for three reasons, namely: (i) to look after Mother who was ill at the time; (ii) it was her responsibility to manage the Property; and (iii) she needed accommodation.

43.  It is important to note that even on the defendant’s own evidence, taking care of Mother was not part of what she must do to earn the right to occupy the Property for the rest of her life.  It was something she considered her responsibility as a filial daughter and had nothing to do with reliance on any promise of a right to occupy the Property.  Thus, the defendant could not be fairly said to have taken care of the Mother in reliance on any alleged promise.

44.  Nor is there any evidence that the defendant suffered any detriment in reliance upon the belief that she could stay at the Property for life, to the knowledge of Father and/or Mother.  As mentioned, the defendant’s evidence was that she did not have a job when she moved into the Property to look after Mother in around 2000.  The defendant also frankly admitted that she suffered no detriment but instead gained financially as a result of her move from renting out the To Kwa Wan property (after her two sons moved out) and the two rooms in the Property (after Mother moved to Shenzhen in around 2001).

45.  The defendant also said in evidence that she paid for the management fees of the Property until around mid-2012, when she asked the plaintiff to pay for it because he was the “owner” of the Property.  There is no dispute that the plaintiff has paid for the management fees since then.  The defendant’s evidence was that she paid for the management fees using the income she derived from renting out the two rooms in the Property.  She also benefited from the management services as occupant of the Property. As such, such payment could not amount to detriment, let alone substantial detriment.

46.  In the circumstances, I find that the defendant did not in any event rely on any representation or assurance and did not suffer any detriment.

WHETHER THE DEFENDANT’S LICENCE TO OCCUPY THE PROPERTY HAD BEENREVOKED OR TERMINATED?

47.  The defendant was occupying the Property under a bare licence.  It is well established that a revocable licence is automatically terminated by the death of the licensor and it is not necessary for the licensee to have received notice of the death: Ho Hang Wan v Ma Ting Cheung as Personal Representative of Ma Sz Tsang, deceased [1990] 1 HKLR 649 (CA) at 652A-B per Hunter JA.

48.  Accordingly, I find that the licence had been terminated by the death of Mother on 22 November 2007 or latest by 23 April 2012 when the plaintiff through his solicitors issued a letter demanding the defendant to deliver up vacant possession of the Property. This letter clearly stated that the defendant had no right to occupy the Property and had to move out of the Property within 7 days.

OTHER ISSUE

49.  The defendant also alleged that the plaintiff was in breach of the Law on Protection of the Rights of the Elderly in the People’s Republic of China (中華人民共和國老年人權益保障法).  I agree with Mr Wilfred Tsui, Counsel for the plaintiff, that those provisions can have no application in the instant case.  Article 18 of the Basic Law provides that “National laws shall not be applied in the Hong Kong Special Administrative Region except for those listed in Annex III to this Law”.  As the said Law on Protection of the Rights of the Elderly in the People’s Republic of China is not listed in Annex III of the Basic Law, it shall not be applied in Hong Kong.

CONCLUSION

50.  I find that the defendant was occupying the Property on a bare licence.  The licence had been determined on 22 November 2007 when Mother passed away or latest by 23 April 2012 when the plaintiff’s solicitors issued a letter demanding the defendant to deliver up vacant possession of the Property.

51.  The plaintiff is entitled to possession of the Property.  Mr Tsui confirmed on behalf of the plaintiff during the course of the trial that the plaintiff no longer seeks damages or mesne profits against the defendant.  Accordingly, I enter judgment for the plaintiff against the defendant and order that vacant possession of the Property be delivered by the defendant to the plaintiff within 28 days.

52.  I see no reason why costs should not follow the event.  I make an order nisi that the defendant shall pay the plaintiff’s costs of this action, such costs to be taxed if not agreed, with certificate for counsel.  The costs order nisi shall become absolute unless an application for variation is made within 14 days from the date of delivery of this judgment.