CHAN HON WING v. LEUNG WAI HANG

CACV 309/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 309 OF 1999

(ON APPEAL FROM HCMP 3352/1997)

----------------------

J U D G M E N T

----------------------

Hon Godfrey VP :

Introduction

1. This is an appeal from an order of Mr Recorder Kotewall, SC (sitting as a deputy judge of the Court of First Instance) made on 17 September 1999. The judge had to adjudicate on a dispute between members of a family. One Chan Hon Wing was the plaintiff in the action ("the plaintiff"). His wife, whom he married on 10 October 1990, was one Tam Siu Fun ("Ms Tam"). Her mother, Leung Wai Hang, was the defendant in the action ("the defendant").

The dispute

2. The plaintiff claims to be entitled jointly with Ms. Tam to the beneficial interest in a flat known as Flat 15B, Hoi Sun Building, 12 Mercury Street, North Point, Hong Kong. He relies primarily on an agreement said to have been made between the parties at the defendant's home over dinner towards the end of July 1989. The plaintiff says that the defendant then agreed to make an interest free loan to the plaintiff and to Ms Tam (whom he had not yet married) with a view to enabling them to acquire a flat as their matrimonial home. Under the agreement, the loan was to be applied in the purchase of the flat and was to be repayable by monthly repayments of such sum as the plaintiff and Ms Tam could afford. The flat was to be taken in the name of the defendant, and was to be transferred by the defendant to the plaintiff and Ms Tam when it became possible for them to conclude an arrangement under what is known as the "Home Purchase Scheme", under which the government would provide the price for the purchase of the flat and the plaintiff and Ms Tam would be able to discharge the loan from the defendant.

3. The defendant denies that any such agreement was ever concluded. She says that she bought the flat in her own name with her own money and the only arrangements made in relation to it which concerned the plaintiff and Ms Tam was that it was to be let to the plaintiff and Ms Tam. This arrangement was carried into effect by a tenancy agreement dated 15 July 1990 for a term of two years from 1 September 1990 at $6,500 per month (subsequently varied from time to time).

4. In answer to the defendant, the plaintiff replies that he knew nothing of the alleged tenancy agreement (and its successors). They were shams. The documentation was designed to demonstrate that there was nothing more than a tenancy of the flat in order to mask the truth of the matter, which was that in fact the plaintiff and Ms. Tam were to become, in due course, the beneficial owners of the flat.

The judgment below

5. Against that background, I turn to the judge's judgment, observing, by way of preliminary, that we are, of course, considering this dispute on appeal, and that, as counsel for the plaintiff very properly recognised, our function is a limited one. I need not here repeat what are the principles upon which the Court of Appeal acts, where, as here, the appeal is an appeal against the judge's decision on questions of fact. Reference may be made, for this purpose, to the Supreme Court Practice 1999, Vol. 1, at 59/1/41.

6. The judge considered the facts, and after a 6-day hearing, gave judgment, two days after the conclusion of that hearing, on 17 September 1999. He went into the facts very fully. Reference may be made to his judgment for a fuller recitation of the facts than is necessary for the purpose of disposing of this appeal. It is sufficient for that purpose to consider how it is said that the judge fell into error, if he did fall into error, for that is our only function.

7. In his judgment, the judge accurately summarises the issue as follows :-

"The contest as appears from the pleadings and the evidence comes down essentially to whether the Defendant lent the purchase price to the Plaintiff and Ms Tam as the Plaintiff alleges, or whether the Defendant purchased the Property for herself and merely rented the Property to the Plaintiff and Ms Tam. The Defence evidence from the Defendant and Ms Tam flatly contradicts the Plaintiff's evidence."

8. The judge reviewed all the evidence, including evidence said to be independent evidence which (as he accepted) supported the case for the plaintiff.

9. The thrust of the appeal is based upon seven specific criticisms of the judge's judgment and to these I now turn in the order in which they were advanced to us.

(1) The "trustee" point

10. The judge, in summarising the plaintiff's case, suggested that the plaintiff had claimed that one of the terms agreed at the July 1989 dinner meeting was a term that "the Defendant would be the registered owner of the Property and would hold the Property as trustee for him and for Ms Tam".

11. It is now submitted for the plaintiff that it was not suggested by the plaintiff in evidence that words denoting the utilisation of the concept of trusteeship were, in fact, used by the plaintiff and that the judge was wrong to attribute that to him. The significance of the point is to be found in the following passage of the judge's judgment :-

"The concept of a trust and the concept of trusteeship would not have been understood by the Defendant. On the Plaintiff's evidence it was not familiar from [I suppose the judge means "to"] him in July 1990 either, as he really began reading up on this area of the law for the purposes of these proceedings. Yet the trust was fundamental to what was supposed to have been agreed in July 1990 [this reference must be a slip for "1989"]. According to the Plaintiff, this concept and everything else at that meeting was discussed by all three of them. This is evidence that I am not able to accept."

12. I accept that there is some force in this criticism. It does not appear from the transcript that the plaintiff had used words which denoted a reliance on any concept of trusteeship, and the rejection by the judge of the plaintiff's evidence on this point does not seem to be justified. However, the point is purely peripheral and has no significant bearing on the substantive issue which the judge had to decide, whether to accept the evidence led on behalf of the plaintiff or the evidence led on behalf of the defendant. I therefore put this criticism to one side.

(2) The "litigation" point

13. The judge in the course of his judgment said this :-

"In November 1995, when the Plaintiff raised the issue of the Property with Ms Tam, it is his evidence that she was already saying that he had no interest in the Property which was beneficially the Defendant's. So it is not as if the Defendant's and Ms Tam's versions were prompted by this litigation."

14. I fail to understand why the fact that the judge took that view is, in any way, determinative of the issue which he had to decide. Even if it were the case that the defendant's and Ms Tam's versions were prompted by this litigation, it would make no difference to the judge's finding that the evidence of the defendant was to be preferred to the evidence of the plaintiff.

(3) The "interest free loan" point

15. The judge said in his judgment :-

"When I take into account that, on the Plaintiff's case, at the July 1990 [I think he means "1989"] meeting, even repayment amounts and the terms of the repayment had not been agreed, I have even more difficulty in accepting that version of events."

16. All the judge is saying there is that the more uncertain the alleged agreement, the less likely it is that any such agreement was ever made. That seems to me to be a mere matter of common sense. There is no force in this criticism either. It is true that in disputes over family arrangements of this sort, the court does not look for the same certainty as is appropriate when it is investigating commercial arrangements. But, even so, there seems to me no justification for any criticism of the passage of the judge's judgment to which I have referred.

(4) The "credibility" point

17. It is said that the judge made no reference to the demeanour of the witnesses and no reference to inconsistencies in the defendant's evidence. He referred only to the improbability of the plaintiff's case when compared to that of the case for the defendant. This is a point without any foundation. A judge is perfectly entitled to make his findings of fact on his view as to inherent probability. He is in no way obliged to give a summary of his view of the demeanour of any witness, if he chooses not to do so. He is entitled to have his judgment upheld even if he does not choose to go into every detail of the evidence in order to deal with every assertion that one part of the evidence is inconsistent with another. Unless the point is fundamental to the case, and I am not satisfied that any of the points taken here are fundamental to the case, that is no valid criticism of a judgment.

(5) The "tenancy agreements" point

18. It is said that the judge should have regarded all the tenancy agreements as fabricated because he appears to have overlooked that there was evidence that the defendant and Ms Tam fabricated certain rental receipts.

19. I am not satisfied that the judge did overlook that evidence. It is true that he did not refer to it in his judgment, but he was entitled to accept the evidence of the defendant and Ms Tam in face of their admission of this charge. He described them as "essentially frank witnesses". The evidence was that they had brought into existence certain rental receipts to replace some which had been, as it was thought, lost, in order to complete the picture. That may not have been an honourable thing to do. But it is not enough to justify overturning the judge's findings of fact. I do not consider that the facts relating to these rental receipts are sufficient to compel the conclusion that the judge was bound to find that the tenancy agreements on which the defendant placed reliance were sham documents and that therefore all her evidence ought to have been rejected.

(6) The "rehearsed story" point

20. What is said in this connection is that the judge was not entitled to say, as he did say, that the story of various witnesses in relation to conversations which had taken place some 10 years ago were "simply too rehearsed and convenient for comfort". The judge said :-

"I have observed, I hope, carefully all the witnesses while they were giving evidence."

21. If the judge comes to the view that the witnesses' evidence for a party is to be rejected, he may do that for a number of reasons. Sometimes, the more pat and polished a witness's evidence is, the more dubious the judge will be as to its veracity. Sometimes, the witness who stumbles, and is unable to remember anything very clearly, comes over to the judge as a witness of truth. It all depends. This case is one in which the view of the judge formed after seeing and hearing the witnesses is of crucial importance. The judge having rejected the evidence in question as being "too rehearsed and convenient for comfort" was entitled to form that view and I see no reason why this court should intervene to criticise him for doing so.

Conclusion

22. For all these reasons, it seems to me that the judge's finding that "that the inherent probabilities were against the plaintiff's case" cannot legitimately be criticised. It is of course nothing to the point what this court, or any member of it, might have thought if he had been trying the case at first instance and had had the benefit of seeing and hearing the witnesses. We cannot retry the case on paper. All we can do is to see whether or not the judge fell into such a degree of error as would oblige us to set aside his judgment. I am satisfied he did not.

23. For the sake of completeness, I deal lastly with a separate point taken for the plaintiff, that, even if the judge was right to reject the plaintiff's primary case and to hold that there never was any such agreement as the plaintiff asserted, the plaintiff had nevertheless proved to the judge a continuing common intention on the part of himself and of the defendant that the plaintiff and Ms Tam were to become beneficial owners of the property. This case is based on the admitted facts that the plaintiff and Ms Tam made payments to the defendant amounting over the years to something like $230,000; that the plaintiff made payments by way of purchases of furniture for the flat; and, most importantly, perhaps, that the plaintiff did renovation work on the flat of a substantial nature, going beyond that which a mere tenant would do.

24. In the absence of any other evidence, it is, sometimes, possible for the court to infer a continuing common intention from matters of this sort. But here all the evidence on both sides was placed fairly and squarely before the judge. As it seems to me, having formed the opinion that there was no such agreement as the plaintiff asserted, there was really no room for any argument based on a continuing common intention to give the plaintiff an interest in the flat. The difficulty is that the facts supporting the alleged agreement, and the alleged continuing common intention are really the same. The judge having rejected the contentions of the plaintiff as to what the parties' intentions actually were, and having accepted the evidence of the defendant in that regard, there really is no room at all left for the argument based on a continuing common intention.

Result

25. For all these reasons, I am of the opinion that the appeal cannot succeed and that we have no option but to dismiss it. I would dismiss it accordingly.

Hon Rogers JA :

26. I agree.

Hon Ribeiro JA :

27. I also agree.