LAW KA YAN, the Administratrix of Estate of LAW CHI CHIU, deceased v. YE JIMEI

LDPD 279/2024

[2024] HKLdT 64

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO. LDPD 279 OF 2024

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DECISION ON REVIEW

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1.  I delivered my judgment orally on 20 June 2024 in which I ordered the Respondent to deliver vacant possession of the Premises to the Applicant and pay the Applicant the costs of the proceedings summarily assessed at $7,000 (“the Judgment”).

2.  The Respondent then on 4 July 2024 applied for a review of the Judgment pursuant to section 11A of the Lands Tribunal (“Application for Review”). Her grounds in support of the Application for Review as stated in her affirmation of even date (“the Affirmation”) include the following:

(a)  When analysing the existence of common intention constructive trust (“CICT”), the Learned Member was plainly wrong in emphasizing solely on written documents and physical evidence, disregarding the principle that the establishment of CICT could be inferred by conducts or oral agreement between the Respondent and the deceased, as it was an undisputed fact that they were partners of a romantic relationship; the possibility that the Respondent could be beneficiary under the CICT in equity in spite of lack of proof in black and white was nipped off without due consideration of the Learned Member;

(b)  No direction had been given by the Learned Member prior to the hearing on 20 June 2024 regarding the procedures of the said hearing, nor was the Respondent’s legal representative informed of the nature of the said hearing until commencement, which turned out to be a trial hearing. Had they been notified that hearing was in nature of a trial, the Respondent would instruct her legal representative to deploy other tactics in preparation, eg application of witness summons;

(c)  The Learned Member totally ignored the fact that the Respondent contributed about HK$300,000 to purchase the property at issue, for which she instructed her legal representative to submit relevant evidence as supporting evidence. Again had the Respondent been informed that it was a trial hearing, she would have been better prepared to support her allegation;

(d)  The Learned Member paid no mind to that the Applicant had wrongfully submitted in the Form 22 dated 6 March 2024 that the respondent was a tenant (subject to rent payment) of the Property.

Background

3.  The Property comprises a domestic unit, being Flat A10, 9/F, Lung Mong Building, Nos 38-44 Mong Kok Road & No 125 Fa Yuen Street, Kowloon, Hong Kong. The Property is registered in the ownership of Law Chi Chiu vide memorial 21042802010014 dated 1 April 2021 in the Land Registry.

4.  By Letters of Administration dated 3 November 2023, it became known that Law Chi Chiu died on 5 May 2022 and his estate which includes the Property was granted to the Applicant as the Administratrix.

5.  Initially, the Applicant, through Messrs Raymond Cheung & Chan, Solicitors (“RCC”), filed a Notice of Application dated 6 March 2024, ie the Form 22 as stated in the above paragraph, to the Tribunal for recovery of possession of the Property against an Unknown respondent who had been occupying the Property but not paying any rent:

“On 18^th December 2023, Letters of Administration of estate of LAW CHI CHIU, deceased (“the deceased”) was granted to Applicant. The Applicant found the premises was part of estate of the deceased. However, the Applicant cannot locate any Tenancy Agreement between the deceased and the Respondent and the deceased had not disclosed the particulars of tenancy to the Applicant. However, the Applicant honestly believes the Respondent is occupant of the premises as tenant and it is supposed the tenancy has expired and the Respondent is occupying the premises not paying rent. The Applicant issued letter of demand to the Respondent but Respondent did not reply.”

6.  Then there was a Consent Order filed on 28 March 2024 by both RCC on behalf of the Applicant and Messrs Kenneth Poon & Co, Solicitors, (“KPC”) on behalf of the Respondent seeking to extend the time limit for the respondent to file a Notice of Opposition for 14 days from the date of the Consent Order. This Consent Order was not approved by the Tribunal as the Respondent, ie Yu Jimei was not identified as a party in the Notice of Application. Neither was KPC solicitor to any person on the record of the Tribunal.

7.  On 22 April 2024, KPC wrote in response to the Tribunal’s refusal of granting the consent application as follows:

“1. our client Ms Ye Jimei is and have (sic) been at all material times an occupant of the property at issue, namely Flat A10, 9^th Floor, Lung Mong Building, Nos 38-44, Mong Kok Road & No 125 Fa Yuen Street, Kowloon; her proof of address are enclosed hereto for your reference;

2. the Notice of Application (Form 22) issued by the Applicant was attached outside the place of residence of our client; and

3. the Applicant and her solicitors were willing to file a Consent Order with in support of our application of late filing of a Notice of Opposition to Application (Form 7).

We therefore respectively ask His Honor to allow our client joining in as the Respondent of the captioned proceedings, and approve the consent application to file the Notice of Opposition to Application (Form 7) so that our client’s fair opportunities to defend her rights will not be deprived solely because of the Applicant putting “Unknown” as the Respondent.”

8.  This was followed by an Interlocutory Application filed by KPC dated 8 May 2024 on behalf of the Respondent intending to substitute the latter as the Respondent instead of the Unknown.

9.  Attached to this Interlocutory Application was an Affirmation by the Respondent of even date explaining her lateness of filing a Notice of Opposition because she was not aware of the implication and importance of the Form 22 as it was supposed to be against the Unknown. Apart from seeking to join as the respondent in this action, the Respondent sought to extend the time for filing and service of a Notice of Opposition for 14 days from the date of the order to be made on this Interlocutory Application.[1]

10.  Leave as sought by the Respondent was granted by the Tribunal at a hearing on 24 May 2024.

11.  Then came the Notice of Opposition dated 28 May 2024 by KPC on behalf of the Respondent:

“The Respondent opposes the allegation of the Applicant that the Respondent is a tenant of the premises at issue. The Respondent therefore submits that she is not subject to any rental payment for occupying the said premises, and she intends to contend the Applicant’s alleged rights, ownership and/or interest thereto.”

12.  Nothing happened until 17:05 on 19 June 2024, ie less than one day before the hearing scheduled at 10:30 on 20 June 2024, KPC filed a list of documents which included:

(a)  A copy of bank statement of Bank of China (Hong Kong) in the name of the Respondent dated 5 November 2020 whose address was identified as a unit in Tsz Lok Estate in Tsz Wan Shan, Kowloon, ie not the Property. While most of the content of the bank statement were redacted, it only showed a withdrawal of $120,000 on 7 October 2020.

(b)  Copy of Provisional Agreement for Sale and Purchase of the Property dated 29 December 2020 (“S&P”) for a consideration of HK$5,500,000. In this S&P, there were originally supposed to be two buyers: Law Chi Chiu, the deceased and the Respondent but the Respondent’s name was crossed out without any explanation, leaving Law Chi Chiu, the deceased as the sole buyer. The initial deposit paid included $20,000 in cash and $130,000 by a cheque issued by Bank of China (Hong Kong) No 012163.

(c)  Screen Capture of Chat History between the Respondent and Law Chi Chiu, the deceased on or around 1 May 2021:

“老公， 我上班的地方信號不好， 你發那個語音我聽不到， 你先自己看， 看着你自己抓主意， 好嗎？ 我下班了就過來找你， 我這裏打不通啊， 我打你電話也打不通啊， 沒信號啊。”[2] There was then a reply supposedly from Law Chi Chiu, the deceased with only a photo of a bed.

(d)  Copy of photographs of Law Chi Chiu, deceased allegedly having meal with the Respondent together on or around 6 May 2021 but the photographs only showed the appearance of Law Chi Chiu, deceased but nobody else.

(e)  Copy of Government Rent Demand Note (Second Reminder) dated 3 May 2021 in respect of the Property.

(f)  Copy of Notice of Intended Marriage between the Respondent and Law Chi Chiu, deceased on 15 July 2021 at Tsim Sha Tsui Marriage Registry:

“本處已安排在2021年07月15日（星期四）早上11時45分在上述登記處為你們 （羅志超先生及叶繼梅小姐）舉行婚禮。…… 根據《婚姻條例》（第181章）第10條的規定， 如發出擬結婚通知書後，雙方不在3個月內結婚，則該通知書及一切就之而進行的程序即作廢，必須發出另一擬結婚通知書，雙方始可締結婚姻。”

(g)  Copy of HSBC Life Insurance Letter dated 10 September 2021 in the name of the Respondent with the Property as the correspondence address confirming the Respondent had purchased a HSBC Family Goal Insurance Plan (5-year Payment).

(h)  Copy of a photograph of the Respondent and Law Chi Chiu, deceased allegedly taken on 28 September 2021[3].

(i)  Copies of Demand for Rates and Receipt in respect of the Property dated 29 October 2021 and 28 February 2022.

(j)  Copy of Water Bill in respect of the Property and Notice to Change Contact Person dated 23 August 2022.

(k)  Copy of Invoice of Mandatory Building Inspection Scheme and Receipt in respect of the Property both dated 30 September 2022.

(l)  Copy of Electricity Bills in respect of the Property dated 21 March 2023, 22 January 2024, and 21 March 2024.

(m)  Copy of Management Fee Receipts in respect of the Property dated 17 April 2023 and 19 February 2024

(n)  Copy of Water Bill in respect of the Property dated 6 November 2023 and 5 March 2024.

Hearing on 20 June 2024

13.  As can be seen from the above, the respondent had not pleaded the defence of common intention constructive trust until the very late.

14.  The importance of pleadings has been repeatedly emphasised in many legal authorities. In Grand Power International Limited v Chan Sing Hoi Enterprises Limited [2020] 2 HKLRD 142, the Court of Appeal found that justice may best be served in the circumstances of that case by refusing to allow a party to run an unpleaded case even in the Lands Tribunal:

“40. We also have regard to s. 10(5)(a) of the Lands Tribunal Ordinance, Cap. 17, which provides that “the proceedings of the Tribunal shall be conducted with as much informality as is consistent with attaining justice”, and Direction No 4 given by the President of the Lands Tribunal on 1 July 1986 which states, inter alia, that presiding officers should not regard Notices as in the nature of pleadings by which parties are bound, but as an indication of the issues which are likely to be raised.

41. In this particular instance, all the parties have engaged counsel early on and litigation has been conducted in a fairly rigorous manner. As the judge as stated, this is not a classic building management dispute. The notice of application and the notice of opposition set out the respective cases of the applicant and the 1^st respondent with such details that are in no way different from a pleading. The 1^st respondent even insisted on the applicant filing a notice of reply to plead its reliance on bone fide purchaser for value without notice, instead of merely mentioning this in the solicitors’ letter. Even if the amended notice of opposition is not to be treated as a pleading by which the 1^st respondent is strictly bound, it can hardly be regarded as given “fair indication” of the issues likely to be raised.

42. The judge is clearly in error in supposing that no real prejudice would be occasioned to the applicant in allowing the 1^st respondent to run an unpleaded case. Exercising the discretion afresh, we think that justice would best be served in these circumstances by refusing to allow the 1^st respondent to rely on the defences of acquiescence and waiver based on inaction and implied representation.” (underline added)

15.  Similar to Grand Power, the Respondent in the present has been legally represented by KPC since 28 March 2024 by the latest when the latter attempted to file a Consent Order with RCC. Notwithstanding this, the defence of common intention constructive trust had not been raised in the Respondent’s Notice of Opposition dated 28 May 2024.

16.  Thus according to Mr Chan Shu Yung (“Mr Chan”) of RCC who represented the Applicant, the Respondent was at best a licensee as permitted by Law Chi Chiu, deceased but such licence would be revoked under common law when Law Chi Chiu passed away.

17.  In response, Mr Kwok Chi Chun Chester (“Mr Kwok”) of KPC who represented the Respondent conceded however he did not realise that the Tribunal would be in the position to give judgment in the first hearing[4].

18.  However, in 永華電子實業有限公司 對 陳樹雄經營三雄行, HCMP 1951/2012 (unreported, dated 16 November 2016), the Court of Appeal held that in appropriate case, the Tribunal may enter judgment even at the first hearing.

19.  As regards the applicable principles to common intention constructive trust, I would gratefully adopt the succinct and useful summary of Deputy High Court Judge Alexander Stock SC in Leung Hang Lin and Li Kwai Fuk v Lam Mei Yung, HCA 1374/2017 (unreported, 22 November 2019) at §8:

“In summary:

(1) The starting point is that equity follows the law. There is a presumption that the beneficial interest follows the legal interest. Where the property is registered in a defendant’s name, the plaintiff bears the burden of showing, on the balance of probabilities, that the defendant held the property on trust for him or her such that the beneficial ownership differs to the legal ownership. See: Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9, §44; Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985, §5.16; Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, §17.

(2) The burden may be discharged by showing that: (i) there was a common intention held by the plaintiff and the property owner at the time of the purchase (or exceptionally, thereafter) that the beneficial ownership was to be different to the legal ownership; (ii) the plaintiff altered his or her position in detrimental reliance upon the common intention; and (iii) it is unconscionable for the property owner to assert ownership in reliance on the legal title. The constructive trust is constituted by the plaintiff’s detrimental reliance on the common intention and the unconscionability of the legal owner departing therefrom. See: Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1, §38; Liu Wai Keung, §46.

(3) The approach to ascertaining common intention is objective. One looks to the intention of each party which was reasonably understood by the other party to be manifested by the first party’s words and conduct. See: Liu Wai Keung, §47; Mo Ying, §5.16.

(4) The doctrine is sometimes described as having two limbs. First, where at any time prior to the acquisition (or exceptionally, at a later date), there is an agreement, arrangement or understanding reached between the parties as to how the property is to be held beneficially, based on evidence of express discussions. Second, where there is no evidence to support such a finding but the court relies on the parties’ conduct as a basis from which to infer a common intention. There is some authority that under the second limb, direct contributions to the purchase price by a party who is not a legal owner will readily justify the inference. See: Mo Ying, §5.8; Primecredit, §§2.3 and 2.4.

(5) However, the modern approach is to assess the parties’ common intention by a holistic approach having regard to the context and the particular facts. The court is not constrained to consider only pure direct monetary contributions to the purchase price. In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family are not that common, the court has to pay more regard to circumstantial matters. See: Mo Ying, §§5.14 and 5.15; Primecredit, §1.6.”

20.  In relation to (4) above, Mr Chan drew my attention to that the Respondent failed to provide any document in support of express agreement, arrangement or understanding between Law Chi Chiu, deceased and the Respondent. Mr Chan submitted there must have been some actual discussions between them, however imperfectly remembered and however imprecise their terms may have been before common intention constructive trust but it appears that Law Chi Chiu, deceased did not take the trouble to write down anything.

21.  The situation here is where there is no evidence to support a finding of an agreement or arrangement to share. I had commented at the hearing that what can be inferred from the list of documents filed by the Respondent on 19 June 2024 was flimsy or shadowy[5].

22.  For instance, the bank statement of Bank of China (Hong Kong) in the name of the Respondent dated 5 November 2020 only showed a withdrawal of $120,000 on 7 October 2020 which could not in any way be related to the S&P where the Property was purchased by Law Chi Chiu, deceased for a consideration of HK$5,500,000. Neither can it be related to the deposit $20,000 in cash and $130,000 by a cheque issued by Bank of China (Hong Kong) No 012163.

23.  The WhatsApp by the Respondent on or around 1 May 2021 at most only showed the Law Chi Chiu, deceased and the Respondent were in a romantic and/or intimate relationship but this is far short of evidence of common intention constructive trust. The photographs allegedly dated May/June 2021, with respect, cannot add anything.

24.  Perhaps the most persuasive evidence is the Notice of Intended Marriage between the Respondent and Law Chi Chiu, deceased on 15 July 2021. Mr Kwok tried to explain that the marriage could not be pursued because Law Chi Chiu, deceased stayed at the hospital but this is obviously rebutted by the photograph allegedly taken on 28 September 2021. In any event, was Law Chi Chiu, deceased too ill to write down something or utter a will for the benefit of the Respondent? Mr Kwok could offer no explanation.

25.  As regards the S&P again, the Respondent’s name was crossed out. Mr Chan explained that it was for the reason to avoid paying Buyer's Stamp Duty when the Respondent was not yet a permanent resident of Hong Kong. But be that as it might, it was the choice by Law Chi Chiu, deceased not to have the Respondent included as a co-owner. It does not necessarily mean that a common intention constructive trust has been created.[6]

26.  Even by a holistic approach having regard to the context and the particular facts, I was not satisfied that there was sufficient evidence of any common intention constructive trust or any agreement.

27.  Mr Chan then referred to the payment of bills or rates by the Respondents but these actions were equivocal as evidence of interest in land as such payments are also often made by licensees, or tenants.

28.  In Gissing v Gissing [1971] AC 886 at p. 909-910, Lord Diplock observed that normal contribution to household expenses could not give rise to an inference of common intention to share the property beneficially.

"For such conduct is no less consistent with a common intention to share the day-to-day expenses of the household, while each spouse retains a separate interest in capital assets acquired with their own moneys or obtained by inheritance or gift. There is nothing here to rebut the prima facie inference that a purchaser of land who pays the purchaser price and takes a conveyance and grants a mortgage in his own name intends to acquire the sole beneficial interest as well as the legal estate..."

29.  Assistance may also be found in the dicta in Grant v Edwards [1986] Ch 638[7], 657A-B as follows:

“In many cases of the present sort, it is impossible to say whether or not the claimant would have done the acts relied on as a detriment even if she thought she had no interest in the house. Setting up house together, having a baby, making payments to general housekeeping expenses (not strictly necessary to enable the mortgage to be paid) may all be referable to the mutual love and affection of the parties and not specifically referable to the claimant's belief that she has an interest in the house…”

30.  Only when it has been shown that there was a common intention that the Respondent should have an interest in the house, any act done by her to her detriment relating to the joint lives of the parties is sufficient detriment to qualify.

31.  Although the respondent raised the defence of common intention constructive trust at the hearing, this had never been disclosed prior to the hearing. Bearing the above in mind, the present case is indeed not so complicated that I could not follow 永華電子實業有限公司, supra, by delivering the Judgment after the hearing.

32.  Notwithstanding the above, I had succinctly dealt with the arguments or submissions by Mr Kwok. As I commented at the hearing, the list of documents filed very late at 17:05 on 19 June 2024 disclosed flimsy or shadowy arguments. I accepted the submission by Mr Chan that the Respondent was at best a licensee as permitted by Law Chi Chiu, deceased but such licence would be revoked under common law when Law Chi Chiu passed away. Thus, I ordered the Respondent to deliver vacant possession of the Premises to the Applicant and pay the Applicant the costs of the proceedings.

Responses by the Applicant

33.  On 9 July 2024, RCC filed on behalf of the Applicant submissions in reply to the Review Application. These submissions are summarised in the following paragraphs.

34.  In regard of the allegation of the common intention constructive trust, RCC submitted that if the Respondent wishes to establish there was such a trust, she should submit cogent evidence of the trust. By reference to paragraph 3(a) of the Affirmation, ie ground for review (a) as stated in §2 above, the Respondent could only prove her case highest to: “… the possibility that [the Respondent] could be the beneficiary”. It sounds as the Respondent cannot prove a trust by evidence and it was only a “possibility” of a trust.

35.  The Applicant further submitted that insofar as I did not find evidence to prove there was a trust in favour of the Respondent during the hearing, the Respondent did not submit further evidence in this application for review.

36.  Though the Respondent alleged that she had contributed about HK$300,000 to purchase the Property, no evidence was divulged in the Respondent’s List of Documents or in the Affirmation therefor. The Applicant further submitted that even if the Respondent contributed HK$300,000 (which is denied), the Respondent would not have a right to stay in the Property indefinitely as HK$300,000 is a small amount in comparison with the market value of any landed property in Hong Kong. To put the Respondent’s case to the highest, the Respondent can only recover money compensation from the estate of Law Chi Chiu, deceased.

37.  As regards the Form 22, the Applicant submitted that the Form 22 expressly stated that the Applicant did not know the condition of the Property as owned by Law Chi Chiu, deceased so that the Application only guessed the Unknown or the Respondent now in place was a tenant.

38.  In the premises, the Applicant submitted that given sufficient opportunity to the Respondent to submit her supporting evidence, the Respondent would not enable the Tribunal to see she had a case of defence.

39.  I agree with these submissions as they accord more or less with my view.

Discussion on Grounds of Review

40.  I now deal with the Respondent’s various grounds for review in the following paragraphs.

41.  Mr Kwok for the Respondent did not argue that there was any express agreement, arrangement or understanding reached between the parties as to how the property is to be held beneficially. Thus during the hearing, I had referred to the list of documents filed by the Respondent to see if a common intention can be inferred. With respect, and as I stated above, the evidence, if any, was flimsy or shadowy. Therefore, the Respondent’s complaint that I solely based my decision on written documents and physical evidence is misplaced.

42.  Mr Kwok did suggest that there was oral agreement between the Respondent and the deceased that she could stay at the Property for life but I had replied that the Respondent would be just making mere assertion against the dead who could not bear witness[8].

43.  The Respondent rehashed the argument that she had contributed about HK$300,000 to purchase the Property but as commented above, the documents including bank statement of Bank of China (Hong Kong) in the name of the Respondent dated 5 November 2020 and the S&P cannot be correlated.

44.  As regards the complaint that Applicant had wrongfully submitted in the Form 22 dated 6 March 2024 that the Respondent was a tenant (subject to rent payment) of the Property, it was neither here or there. In The Incorporated Owners of Mountain View Mansion v Heart Cuisine [2012] 4 HKLRD 628, the Court of Appeal had clarified at §27 that the jurisdiction of the Lands Tribunal is expressly provided for in section 8 of Lands Tribunal Ordinance (Cap 17) to make an order for the recovery of possession of any premises or for the ejectment of a tenant from those premises, whether under the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) or otherwise. In that case, the 2^nd respondent, Lam Lap Kei, who was represented by lawyers applied to be joined as a party to the proceeding and no application had been made by him to transfer the matter to other courts. Likewise, in the present case, the Respondent applied on 8 May 2024 to be joined in place of the Unknown as stated in the Form 22. No protest had ever been made before or during the hearing as regards the jurisdiction of the Tribunal or the so-called mis-statement in the Form 22. In any event, as stated above, when the Respondent filed the Notice of Opposition dated 28 May 2024, such protest was not made and the defence of common intention constructive trust was not raised.

45.  Lastly, the complaint that the Respondent’s legal representative was not informed of the nature of the said hearing until commencement is again misplaced. With respect, the Respondent or her legal representative was in complete ignorance of the jurisdiction of the Tribunal in delivering judgment in the first hearing which has been affirmed by the Court of Appeal in 永華電子實業有限公司, supra.

Conclusion

46.  In view of the above, I dismiss the Application for Review by the Respondent.

Costs

47.  As this decision is made on papers without a hearing pursuant to the Practice Directions issued by the President of the Tribunal: Review No 1/2009, I make no order as to costs.