LEUNG HANG LIN AND ANOTHER v. LAM MEI YUNG

HCA 1374/2017

[2019] HKCFI 2819

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1374 OF 2017

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JUDGMENT

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A. INTRODUCTION

1.  The trial of this action took place on 3 – 6 and 11 June 2019.  The plaintiffs (“Ps”) were represented by Mr Kelvin K H Liu and the defendant (“D”) was represented by Mr Peter K M Chung.

2.  The plaintiffs are husband and wife, and the 1^st plaintiff (“P1”) is the adopted daughter of D.

3.  The dispute relates to a public housing unit (the “Property”) in Po Lam Estate, Tseung Kwan O, of which D is the registered owner.  The Property was purchased in 2005 in D’s sole name, pursuant to the Tenants Purchase Scheme (“TPS”) of the Hong Kong Housing Authority.

4.  The sole issue is the beneficial ownership of the Property.  The only substantive relief sought by Ps is a declaration that they are the beneficial owners of the Property, which D holds on trust for them. 

5.  In seeking the said relief Ps assert: (i) a common intention constructive trust; alternatively (ii) a resulting trust.  In so asserting, Ps rely on various matters including alleged express discussions between Ps, D and other family members shortly prior to purchase of the Property, and the provision by Ps of the entire purchase price and acquisition expenses for the Property. 

6.  Ps allege that from the point of its purchase in 2005, D held the Property on trust for them.  D alleges, conversely, that the provision of purchase monies for the Property was a gift from P1 to D, and that from its acquisition in 2005 the Property has been and still is owned by D both legally and beneficially.

B. PRINCIPLES

7.  The principles applicable to common intention constructive trusts are set out in various Hong Kong authorities, notably: Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 per Ribeiro PJ at §§35 – 38; Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9; Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985; Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327.

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 §44; Mo Ying §5.16; Primecredit §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 theproperty 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 §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 alater date), there is an agreement, arrangement or understandingreached between the parties as to how the property is to be heldbeneficially, 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’ commonintention 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 notthat common, the court has to pay more regard to circumstantial matters.  See: Mo Ying §§5.14 and 5.15; Primecredit §1.6.  

9.  As Mr Liu submitted, the said principles apply in the same manner to properties acquired under the Home Ownership Scheme: see Cheuk Shu Yinv Yip So Wan(2012) 15 HKCFAR 1.  Mr Chung made no contrary submission.  

10.  As to the principles on resulting trusts, I do not consider it necessary to canvass these in any detail: see further §§103-108 below.

C. COMMON GROUND

11.  In this section, I set out some uncontroversial facts.

12.  P1 was born in Mainland China in around 1967, and was adopted by D and her first husband (“Mr Lui”) when P1 was a few months old.  Mr Lui passed away in the Mainland when P1 was a child.  Around 1972, D married a Hong Kong resident, Mr Leung Kam Wing (梁金榮) (referred to as the “Father”) in Mainland China.  D and the Father had a son named Leung Wai Ming (梁偉明) (the “Brother”) and a daughter named Leung Wai Ngan (梁偉銀) (the “Sister”), born in 1973 and 1974 respectively.

13.  Around 1980, D moved from the Mainland to Hong Kong, to live with the Father.  Over the next two years, the Brother, and then P1 and the Sister, moved to Hong Kong to join them.

14.  In 1989, the Father, D, P1, the Brother and the Sister (collectively, the “Family”) began living at the Property, which was a rented public housing unit.  Over time, P1, the Brother and the Sister moved out of the Property in order to start their own families.  In P1’s case, she moved out in 1992, and married the 2^nd plaintiff (“P2”) in 1996.

15.  In 2005, it was announced that Po Lam Estate, Tseung Kwan O, fell under the TPS.  At that time, there were three registered occupants of the Property, who were accordingly entitled to apply to purchase the Property, namely, the Father, D and the Brother.

16.  The initial market value of the Property at the time was assessed at HK$859,700, and the list price was HK$320,700.  Under the TPS, if an application for purchase was made within certain time limits, a discounted price would be available.

17.  It is common ground that in September or October 2005, discussions took place between the Family as to the basis upon which the Property would be purchased, though the content of those discussions is disputed: see further below.

18.  In December 2005, the Property was purchased in D’s name from the Housing Authority for HK$224,500, with the relevant assignment dated 30 December 2005 (the “Assignment”).  The Assignment was registered in the Land Registry under D’s name.  It is common ground that the purchase price and initial acquisition expenses were provided by P1 and P2.

19.  The completion documents for the purchase, were executed at the offices of a firm of solicitors (the “Solicitors”) on or around 29 December 2005.  In attendance were P1, P2 and D.  At the Solicitors’ offices, D also signed a will dated 29 December 2005 (the “2005 Will”) by which she (interalia) appointed P1 and P2 as executors, and bequeathed all her interests in the Property to P1 and P2 in equal shares as tenants in common.

20.  The Father passed away in March 2016.

21.  D executed a will dated 17 February 2017 (the “2017 Will”), by which she (inter alia) appointed the Brother as executor, cancelled all previous wills, and bequeathed the Property and her other remaining estate to the Brother.

22.  As at the time of the trial, the Property was occupied by D, the Brother and his wife and daughter.

D. THE PARTIES’ RESPECTIVE CASES

23.  It is Ps’ case that it was the common intention of Ps and D, and also amongst the Family, that Ps would fund the whole of the purchase price for the Property, and D would hold it on trust for Ps.  The allegation of common intention constructive trust is based on express discussions amongst the Family at dinner conversation(s) during October 2005: see further below.

24.  D’s case is also that there were express discussions regarding the Property amongst the Family at dinner(s) around September/October 2005. The essence of these is said to have been a gratuitous offer by P1 to fund the entire purchase price as a gift to D, in view of the love, care and concern that D had shown to P1 over the course of her life. At the same time, according to D, Ps also promised to take care of the Father and D (the “Couple”) on a financial and day-to-day basis until they passed away. There was never any intention that D hold the Property on trust; rather, Ps gifted the purchase monies to D who then came to own the Property absolutely.  Thereafter, D was free to execute such will as she wished, and was free in 2017 to alter her will in respect of the Property.

25.  One aspect of D’s case was not apparent from the pleadings per se,but was deployed during cross-examination and submissions.  The “case theory” run by Mr Chung was not that in 2005 Ps genuinely intended to make a gift of the purchase monies to D; but rather that, in essence, they connived to trick D (and the rest of the Family) into thinking that the purchase monies were gifted, but all along planned ultimately to claim the Property for themselves.  This is discussed further below.

E. WITNESSES AND EVIDENCE

26.  There were five factual witnesses.  Ps’ only witnesses were P1 and P2 themselves.  D’s witnesses were herself, the Brother and the Sister.

27.  The witnesses were cross-examined on various factual matters, and their credibility is in issue.  Below, I set out the salient portions of their evidence.

The 1^st plaintiff

28.  P1 works as a full-time cleaner.

29.  Her evidence was that after learning of the opportunity to purchase the Property under the TPS, the Couple were worried about being relocated to a smaller unit, and the Father expressed such worries to P1.  Ps were under the impression that the Couple could not afford to buy the Property.

30.  At a dinner in October 2005, at which the Family and P2 were present, P1 suggested to the Brother that he fund the purchase and live at the Property with the Couple; but the Brother declined on the basis that it was difficult to live with D due to her character.  P2 then suggested that the Brother buy the Property for use after the Couple pass away, but the Brother again declined.

31.  A few days later, P1 received a telephone call from the Father, who was anxious about being moved to a smaller flat, following which P1 and P2 discussed purchasing the Property.

32.  At a second family dinner one or two days after the first, P2 again asked the Brother if he would buy the Property, who again refused.  P2 then said that the Father was worried about relocation, and if the Brother did not buy, Ps would purchase the Property and let the Couple live there until they both pass away.  The Couple were very happy.  The Sister emphasised that Ps could not take possession of the Property until both of the Couple passed away.  D said she would make a will in favour of Ps so that they could take possession after she passed away.  D was very grateful, and subsequently told various neighbours that Ps would buy the Property and let the Couple live there.

33.  P1’s evidence was that previously, she had asked the Sister if she was interested in buying the Property, who declined due to financial concerns.

34.  The purchase price and initial expenses were funded from Ps’ household funds and savings, plus a loan of around HK$35,000 taken by P2 from a friend.  Ps obtained cashier orders for the purchase price deposit (HK$2,500) and purchase price balance (HK$222,000), and also paid the legal costs (HK$1,300) and management fee deposit (HK$1,488).

35.  At the time, Ps had savings around HK$210,000.  They also already owned another property, in which they were living.

36.  Around 29 December 2005, Ps accompanied D to the Solicitors’ offices to execute the Assignment and other incidental documents.  On her own initiative, D instructed the Solicitors to prepare the 2005 Will, which was executed.  D indicated to P1 that there was no reason for D to keep the title deeds and documents for the Property since the price was paid by Ps.  D passed these to P1, who has had them in her possession since. 

37.  P1 denied that the purchase monies were a gift, stating that there was never any reference to a gift at the relevant family dinners, or at all prior to D’s pleaded defence.

38.  P1 gave evidence of a past troubled relationship with D, referring to certain instances of alleged favouritism by D to the Brother and Sister, whilst growing up.  There was, said P1, some improvement in relationship after the Ps married.

39.  In any event, at some point after 2005, family relations deteriorated.  P1 said she did not attend the Father’s funeral in 2016 as she was not informed of the details and the Brother forbade her attendance.

40.  In December 2016, Ps were unable to access the Property as the lock had been changed, so they visited D at a care centre for the elderly.  D eventually told Ps that she had given the Property to the Brother.  When Ps objected onthe basis that they had paid the purchase price,D indicated that she must give the Property to her biological son and they should go their separate ways. 

41.  P1 was cross-examined on various topics.  Her evidence of the Couple’s concern about relocation, was challenged by reference to a Housing Authority brochure on the TPS, which was said to suggest that this was unlikely.  P1 responded to the effect that she had not read that material in detail; that she only knew that the Father had called her expressing such concerns; and that the Property was for five people but occupied by only two, hence a risk of relocation to a smaller unit[1].  

42.  As to an alleged deadline to apply for purchase by 31 October 2005, P1 accepted that this was only a deadline for a special discount on the purchase price (HK$96,700), and that under the TPS the Property could still be purchased thereafter.

43.  P1 was also cross-examined on the circumstances in which the 2005 Will was executed, and various disputes as to historic family grievances: see further below.

44.  Contrary to Mr Chung’s submissions, I do not think that P1’s credibility as a witness was substantially undermined. Though there may have been some minor inaccuracies of recollection or discrepancies as to thedetail of peripheral historic events, the cross-examination gave me no reason to doubt P1’s honesty as a witness.

The 2^nd plaintiff

45.  P2 gave evidence which, in essence, mirrored P1’s on the central relevant events, including: the conversations at family dinners in October 2005; provision of the purchase price and various expenses by Ps; attendance at the Solicitors’ offices around 29 December 2005; and visiting D in December 2016.

46.  P2 was cross-examined on topics similar to P1, and similarly, I do not think that his credibility was substantially undermined.

The defendant

47.  D is in her late 70s.  She stated that she was educated up to primary 2, and could read only a few Chinese words.

48.  As a general matter, I did not consider D’s evidence to be very reliable.  It was apparent under cross-examination, that she had substantial difficulty recalling relevant events, and at times became rather confused andsometimes self-contradictory.  In my assessment, this was due to the passage of time and her age, to which she referred expressly on several occasions.  Given the lapse of time since 2005, this is perfectly understandable, and I make no criticism of D in this regard.

49.  It was apparent that D has a strong personality, and she became emotional at various points of her evidence.  This is again understandable, given the unfortunate family circumstances which form the backdrop to this action.  D expressed feelings of strong grievance against P1, apparently stemming from D’s perception that P1 did not visit (or infrequently visited) the Father during his later years, and did not attend his funeral; and from Ps having brought these proceedings.

50.  Since D was unable to recall certain portions of the evidence in her witness statement, I focus on her oral evidence.

51.  On the key family conversations during 2005, D at times stated that P1 bought the Property for her so it belonged to her, for the Couple to live in.  D said that in 2005 she had funds to buy the Property.  D said thatP2 was not present at the family dinner(s) when the purchase of the Property was discussed.  However, when questioned as to what was said at those dinner(s), she repeatedly said she had no idea, sometimes denied what was put to her, and expressly said that she was already old and could not remember because it was too long ago.  She initially denied that P1 had promised to take care of the Couple for the rest of their lives (as per her pleaded case); but later said that P1 had, but the promise was not kept.

52.  When questioned about telephone calls said to have been made fromthe Father to P1 in 2005, D denied that he could make telephone calls, stating hewas illiterate; but later said he would only call colleagues, and was very quiet.

53.  When asked about the visit to the Solicitors in December 2005, D initially denied signing the 2005 Will, but later confirmed her signature on the Instruction (see below)[2]. She denied that anything was explained to her, and when shown the 2005 Will said she had no idea, could not remember, and was too old.  She later said that a lawyer told her to take a careful look to see which of her children loved and cared for her most, before she gave the Property - she could give it to whichever because it belonged to her.  When asked about a person witnessing the will, she said she was old and had no idea who was who.  D accepted that after the meeting, P1 retained the title deeds, since D had no use for them.

54.  D accepted that after the Father passed away, the lock to the Property was changed by her/the Brother, and broadly accepted Ps’ account of their December 2016 visit.  D said P1 had promised to provide financially until D passed away, but had not, and had failed to visit the Father, so D changed her will.

55.  D was also questioned on various historic family incidents (regarding a gold necklace and the splashing of paint).  Her evidence was that she had all along treated all of the siblings fairly and equally.

The Brother

56.  The Brother is a bus captain, born in 1973.

57.  On the central events and discussions in 2005, his witness statement substantially mirrored D’s pleading and statement.

58.  His oral evidence was that the key dinner at which a decision was made on the Property, took place on Mid-Autumn Festival 2005, though P1 had briefly floated the issue during previous dinner(s).  At that time, there were three registered occupants (the Couple and the Brother) each with an option to buy, though the Brother had priority since he had an income

59.  At the Mid-Autumn Festival dinner, P1 asked the Brother if he was interested in buying the Property, and the Brother said he was considering.  P1 asked if it would be good if she gave it as a gift to D, and thereafter took care of the Couple.  Having heard this, the Brother and Sister approved, and it was decided. 

60.  The Brother’s evidence was that P2 was not present at the Mid-Autumn Festival dinner.  There was no mention of a will, nor discussion about the provision of the purchase monies. P1 simply said the Property was a gift to D.

61.  Afterwards, P1 proceeded with the formalities. Several days later she called the Brother, since the purchase could only proceed if his name was removed from the register of occupants, to which the Brother agreed. 

62.  It was the Brother’s evidence that at the time, he and his wife had sufficient funds to buy the Property, and he effectively gave up the possibility of so doing, given P1’s gift to D.  In this regard, the Brother was cross-examined on certain of his wife’s bank statements in 2005, on which he relied to indicate that they had sufficient funds[3].  His evidence was that in 2005, he and his wife owned another property (bought in 2004 in his wife’s name), but that is no longer the case. 

63.  The Brother said he learned of the 2005 Will from D, some time after it was signed.  D told him that a lawyer indicated that she could give the Property to whichever child was good to her, and that it could be changed.  The Brother and the Sister trusted P1, and the Brother simply acknowledged this and was not particularly concerned.

64.  The Brother denied that the Couple had concerns about relocation in 2005.  Up to the present day, units in the estate were still being sold under the TPS.  Once a relocation issue arose, he said, the occupied unit could still be bought under that scheme.  Under questioning, the Brother agreed there was a risk of relocation in 2005, but said it was low.

65.  The Brother said that in 2005, the Father had various health conditions including having suffered several strokes, and dementia / Alzheimer’s disease.  The Father could not speak or only very softly, and D would help him to make phone calls.

66.  The Brother’s evidence was that in 2005, the relationship between P1 and D was very good.  After the purchase of the Property, P1 gradually began to attend fewer family gatherings.  He accepted that in 2016, he refused P1 permission to attend the Father’s funeral, stating that for some time P1 had failed to visit the Father in a care home.  In 2017, D indicated that she wished to change her will, so he took her to do so at her request. D was free, he said, to do what she wished with the Property.

The Sister

67.  The Sister’s witness statement was short, and mirrored parts of the Brother’s (and D’s).  Her oral evidence was largely similar to the Brother’s, though unlike the Brother, she occasionally referred to an unclear recollection of certain events in 2005 (though on some points she seemed clear).

68.  The Sister denied Ps’ version of family dinner(s) in 2005.  According to her, P2 was not present at the relevant dinner.  P1 said she would buy the Property as a gift for D, so they asked her to go ahead.  P1 also promised to take care of the Couple financially until they passed away.

69.  The Sister’s evidence was that there was not in 2005, to her understanding, a large chance of the Couple being relocated, and that the Couple could havebought the Property.  At the time, the Brother had another property, as did she.  The Father would not have telephoned P1 since he had Alzheimer’s disease, did not know the children’s phone numbers, and did not know who to call.

70.  On the subject of the 2005 Will, the Sister’s evidence was somewhat unclear.  At times she said she did not remember it or know about it in 2005. But she also said that she was told afterwards by D that P1 had taken D to sign documents which the Sister guessed included a will or something similar.

F. ANALYSIS AND FINDINGS

71.  As noted above, the central factual dispute in this case concerns what occurred and was said at family dinner(s) in September/October 2005. 

72.  This central dispute - like certain more peripheral factual disputes - is substantially an instance of one side’s oral evidence against the other’s[4].  

73.  Further, and subject to my comments above regarding D’s recollection of events, I do not think that the credibility of any of the witnesses was so clearly undermined during cross-examination that it is possible to conclude solely on such a basis, that one side’s evidence was truthful whilst the other side’s was not[5].

74.  In the circumstances, it is helpful to analyse the competing evidence by reference to the inherent probabilities in light of certain objective facts: compare Primecredit Ltd v Yeung Chun Pang Barry (supra) at §§1.4, 46 and 47.

75.  Proceeding on this basis, I conclude that Ps’ version of events, at least in respect of its key allegations on family conversations in 2005, is to be preferred to D’s, and I accept Ps’ evidence in its said key aspects.

76.  In so concluding, I rely on a number of different features of the case, taken cumulatively.

77.  First, it is common ground that the purchase price and initial expenses for the Property were provided not only by P1 but also by P2.  D was not able to dispute that this entailed the utilisation of all or virtually all of Ps’ savings, and required P2 to borrow money from a friend.

78.  Of course, this is not necessarily inconsistent with D’s case of a gift from P1. But as a starting point, the financial participation of P2 and its extent sits, in my view, more comfortably with Ps’ case as to the parties’ stated common intention than with D’s.  That is particularly so when this factor is considered together with others referred to below.

79.  Second, the 2005 Will.  I consider that that this document and the events surrounding its execution are difficult to square with D’s case, and tend to support Ps’ position as to the stated common intention.  This is further discussed in a separate section below.

80.  Third, it is common ground that after the purchase the title deeds to the Property were retained by P1 with D’s knowledge and consent.  I accept Mr Liu’s submission that the title deeds may carry, at the least, some value as a symbol of ownership.  Though this is again, not conclusive, it is a further factor which supports Ps’ factual account.

81.  Fourth, it is common ground that since its purchase, the Government rent and rates payable for the Property were funded by Ps by paying cash to the Couple until around April 2007, and thereafter by bank autopay.  This continued until Ps discovered in July/August 2017 (ie aroundthe time these proceedings were commenced) that the account payer’s name had been changed to the Brother (apparently at his behest).

82.  I consider this to be an important point.  The fact that Ps specifically bore the rent and rates for the entire period up to the commencement of proceedings (without, for example, contribution by the Brother or the Sister), is a strong pointer that Ps were intended as the ultimate beneficial owners of the Property.

83.  Fifth, and as a collateral matter, I find it reasonably unlikely that P1 would have promised, in addition to gifting the purchase monies to D, to take care of the Couple financially for the rest of their lives, as alleged by D. I say this because, as Mr Liu submitted, a burden on Ps to do this single-handedly would likely have been too heavy; and further sits uneasily with the evidence that all along, including after 2005, all three offspring contributed to the Couple’s finances.

84.  Sixth, I refer to D’s “case theory” run in cross-examination and submissions: see §25 above.  The argument was, essentially, that: (i) Ps had in 2005 identified an opportunity to purchase the Property for their own benefit and take advantage of the substantially discounted price available under the TPS; (ii) at that time, the only parties eligible to purchase under the TPS were the Couple and the Brother; (iii) Ps knew that the other members of the Family would not agree to them funding the purchase on the basis that Ps would ultimately become the owners; (iv) accordingly P1 stated that she would gift the Property to D, planning to resile from this later, and Ps further ensured that they kept receipts for payments made so as to bolster their position; (v) this was the only way that Ps could essentially trick the Brotherinto giving up his chance to purchase the Property under the TPS, and obtain it for themselves.

85.  I reject this.  A scheme of this nature would have required Ps to be highly conniving against the Family, and indeed dishonest.  There was nothing reliable in the evidence to suggest such a propensity on their parts.  Next, and more importantly, even if Ps had been so conniving, such a scheme would have been extremely risky from their perspective.  It would have entailed Ps spending all or most of their savings on a property registered in D’s name, simply to acquire a chance of later establishing an interest in that property; in circumstances where it was at least likely that they would have to litigate against their family in order do so.  To say the least, it would not have been a good plan.  It would also probably have required Ps to in 2005 obtain some understanding of or advice on the principles governing constructive or resulting trusts.  Ultimately, I find this version of events to be implausible and unrealistic, and I have little hesitation in rejecting it.

The 2005 Will

86.  I consider the 2005 Will to be an important piece of evidence, since it was executed contemporaneously with the Assignment, in the presence of Ps and D, and contains indicia of the parties’ intentions.

87.  Certain features of the 2005 Will are notable.  It is written in English.  It relates only to the Property (not D’s other assets). It appoints P1 and P2 as executors and bequeaths the Property to them in equal shares as tenants in common.  It bears the signature of a solicitor and a clerk of the Solicitors.  At the bottom it contains a statement signed by the clerk that the will has been interpreted in Cantonese to D who appeared to thoroughly understand the same and that it was in accordance with her intention and instructions.

88.  There is a contemporaneous document (the “Instruction”) written in Chinese and signed by D, which confirms D’s instruction to prepare the 2005 Will, and declares that upon the Solicitor’s detailed explanation, D clearly understands certain specified matters in relation to the will.

89.  I find as facts that: (i) the 2005 Will was explained by the Solicitors in the presence of Ps and D, in its key aspects as set out in the Instruction; and (ii) the Solicitors confirmed with D that she understood the 2005 Will and that it was in accordance with her instructions.

90.  During cross-examination, P1 accepted that the 2005 Will was so explained, and this is supported by the wording in the will and the Instruction, as well as the inherent probabilities. It is also supported by the Brother’s evidence that he subsequently learned of the 2005 Will from D. Insofar as D gave contrary evidence on the execution of the 2005 Will, I consider that this stems from her unclear recollection.

91.  It is noteworthy that under the 2005 Will, D left the Property not only to P1 but also to P2. Similarly, P1 and P2 were appointed executors.  In my view, this feature sits poorly with D’s case that the purpose of the will was simply to exercise her choice as to which of her children should inherit the Property. If that were the case, it would seem more natural to leave the Property to P1 only.  That the will was to both P1and P2 is more consistent with an intention that the Property was to be theirs, and a linkage between the will and the provision of purchase monies by both P1 and P2.  The 2005 Will, executed at the same time as the Assignment, supports an intention from the outset that after D’s death, the Property would go to Ps as the family members who financed the purchase, ie broadly consistent with Ps’ case.

92.  Mr Chung, for D, relied on the fact that the Solicitors’ explanation given on 29 December 2005, included that D could later revoke or change the will.  This appears from item 3 of the Instruction, and was accepted by P1.  Mr Chung argued that the explained revocability of the 2005 Will is consistent with a gift scenario, but not with a trust scenario. 

93.  I have carefully considered this, but I do not accept it.

94.  First, although a lawyer might consider the 2005 Will to be an imperfect instrument to marry with the alleged trust arrangement, the parties themselves are not lawyers.  I consider that the 2005 Will was consistent with the family’s broad intentions as alleged by Ps, namely that after D’s death the property would be Ps’; and its execution contemporaneous with the conveyance is less consistent with D’s case of gift.  Second, it is Ps’ case that the 2005 Will was D’s own suggestion; and an explanation that a will is revocable is an ordinary incidence of any will.  Third, even from a technical legal perspective, the revocability of the will is not necessarily inconsistent with a trust scenario, since under such a scenario the will would bite (and provide reassurance to Ps) only in respect of the legal as opposed to beneficial interest in the Property.

95.  Ps gave evidence and were cross-examined on sets of keys to the Property, three of which they produced as exhibits. 

96.  Ps’ evidence was to the effect that: (i) one set included a key to the Property which P1 had had since childhood; (ii) another set of keys was given by D to P2 shortly after theProperty was purchased, at which time D stated that this was because he hadbought the Property; (iii) a third set of keys was the Father’s old set, given by D to P1 after the Father passed away.  Ps’ possession of these keys was relied on as further supporting Ps’ case on intended ownership of the Property.

97.  D’s witnesses disputed this evidence, in limited respects.  D’s own evidence was somewhat unclear.  She appeared to accept that she had given P2 a set of keys to the Property, but denied that it was shortly after purchase.  She denied that so many sets were given to Ps, and largely did not recognise the keys shown to her. 

98.  The Brother’s evidence was that he only recognised one of the sets of keys shown to him.  He identified this as the Father’s old set.  D had told him, he said, that D had passed this set to P1 after the Father’s death to enable her to clean the Property, but P1 never returned them. 

99.  On balance, I accept Ps’ evidence on the keys.  I see no basis toconclude that Ps lied about the keys or forged any of the sets of keys produced.

100.  I consider that the provision of keys as per §96(ii) and (iii) above, provides some additional support for Ps’ case on the parties’ stated intentions in 2005.  However this is not a central reason for my conclusions, and in the absence of this evidence, the outcome would have been the same.

Other matters in dispute

101.  Various other matters of factual controversy arose, which I only mention briefly, for completeness:

 (1) It was part of Ps’ case that, in addition to Government rates and rent, Ps paid the management fees for the Property from 2005 until around June 2018.  For the majority of this period (ie 2005 to February 2016), this was disputed by D[6].  The evidence was that both before and after 2005,  all three siblings  made various regular contributions to the Couple’s finances. There was nothing firm, other than Ps’ oral say so, to tie Ps’ cash contributions from 2005 to February 2016, to management fees specifically.  Accordingly, I do not accept that Ps have established that for the entire period asserted, Ps paid the management fees. Nor do I find find it necessary to so find, in order to reach the conclusions set out below.

 (2) As referenced above, there were disputes as to the extent to which the Couple fearedrelocation in 2005, and whether they could then afford to buy theProperty.  I do not consider it necessary or helpful to attempt to resolve these issues, which are only peripherally probative (if at all), and a question of one side’s word against another.  The same applies to disputes as to: the Father’s health condition and ability to make phone calls in 2005; historic family grievances (alleged incidents in relation to a gold necklace and splashed paint); the state of relationship between P1 and D.

 (3) Similarly, I do not consider it necessary to make findings as to whether the Brother and his wife were, in 2005, in a financial position to buy the Property (see above).  Proceeding on the assumption that they were, as per the Brother’s evidence, this would not affect the outcome. 

Conclusions on common intention construction trust

102.  For the reasons set out above, I accept the central tenets of Ps’ case on common intention constructive trust, namely:

 (1) A family dinner or dinners took place in September or October 2005, during which the basis upon which the Property would be purchased was expressly discussed.

 (2) There was a common understanding between at least Ps and D (and indeed the rest of the Family) on the basis of express discussions that: the purchase price would be funded by Ps; the Property would be purchased in D’s name but would in substance belong to Ps; the Couple would be entitled to live at the Property for the rest of their lives; thereafter Ps would be entitled to the Property.  In effect, the common intention was that Property would be Ps’ beneficially, subject to the Couple’s rights to occupy and have use of it for the remainder of their lives.[7]

 (3) In reliance on the said common intention, Ps altered their position to their detriment by paying the purchase price and other acquisition expenses for the Property, and paying Government rent and rates from 2005 until 2017. 

 (4) In the circumstances, it would be unconscionable for D to resile from the common intention and now assert legal and beneficial ownership of the Property.

 (5) Ps have accordingly discharged their burden of establishing thatas from 2005, the beneficial ownership of the Property differed to its legal ownership, as alleged.

103.  There is authority that where it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust analysis: Primecredit Ltd v Yeung Chun Pang Barry (supra) at §1.3 [8].  Where both parties allege express discussion and actual intention as to where the beneficial interest lies, there is little scope for the operation of a resulting trust: Liu Wai Keung v Liu Wai Man (supra) at §45.

104.  Both Mr Liu and Mr Chung took the position (at least as their primary position) that since both sides alleged express discussions as to the basis upon which the Property was purchased, it was unnecessary to resort to resulting trust principles; unless, for example, the court rejected both sides’ factual account.  I received only limited submissions on resulting trusts.

105.  Given the above findings, it is unnecessary to consider Ps’ alternative case of resulting trust: compare Liu Wai Keung §45.  However, I would briefly mention that had I applied a resulting trust analysis, my conclusion would have been the same.  The full purchase price was contributed by Ps, giving rise to a presumption of resulting trust: Primecredit §30.  There was no sufficient evidence or matter relied on by D to rebut this presumption.

107.  I do not accept this argument (whether in the context of a resulting trust, or to the extent that it was also deployed to oppose a finding of common intention constructive trust).  The suggestion of a very weighty non-financialcontribution byD declining to purchase the Property for herself, depends on an acceptance that in 2005 the purchase was obviously a good one from an investment perspective. But that is clear only with hindsight as to subsequent direction of property price movements. 

108.  As to D’s right to live at the Property at subsidised rent, she has lost little or nothing since under a constructive trust analysis she remains entitled to live there for the rest of her life: see below.  In short, I do not accept that these matters would be sufficient to rebut the presumption of resulting trust (or, under a constructivetrust analysis, to establish a common intention different to that found above).

G. RELIEF

109.  In their pleading, Ps sought a declaration that they are the beneficial owners of the Property together with the sole and exclusive right to use and occupy it, and that D holds it on trust for them. 

110.  During submissions, however, Mr Liu indicated that if successful, it was not Ps’ intention to remove D from the Property during her lifetime.  Ps accepted, or at least did not strongly resist, that provision should be made in any relief granted to reflect the parties’ intentions in 2005 to similar effect. 

111.  There was some discussion as to the form of such a provision entitling D to remain, including whether this should be by way of license only or “life interest” in the Property, and whether D should be entitled to exclusive possession.  By the end of closing submissions, there was little remaining controversy.  Ps did not push strongly against D being granted exclusive possession, and submitted that the court could and should make such orders as appropriate to give effect to the parties’ common intention in 2005.

112.  Mr Liu cited three authorities: Chandler v Kerley [1978] 1 WLR 693, Ungurian v Lesnoff [1990] Ch 206 and Harry Neal Ltd v Clarke (1998) 75 P&CR D47.  The principle that I take from these—which was essentially common ground—is that the court may declare and order the terms of any constructive trust arrangement so as to give effect to the parties’ relevant common intention or understanding, whether express or implied: see especially Chandler v Kerley at 698F–G; Ungurian v Lesnoff at 223C–E and 224A–E [9].

113.  It was part of Ps’ own case that the express discussion in 2005 included that Ps would permit the Couple to live in the Property until they both passed away, and that Ps could not take possession until both of the Couple had passed way: see above. 

114.  Accordingly, I consider that it was a term of the common intention constructive trust that the Couple would retain a life interest in the Property, meaning a proprietary entitlement (as opposed to a contractual or other license), including to exclusive occupation and use of the Property during their lifetime.

115.  I will therefore grant a declaration to the effect that Ps are the beneficial owners of the Property and D holds the Property on trust for Ps, subject to D’s life interest in the Property and her entitlement to exclusive possession, occupation and use of the Property during her lifetime.

116.  As noted above, this approach was not resisted—at least not with firmness—by Mr Liu for Ps.

117.  I consider the costs should follow the event.  I make an order nisi that D bear Ps’ costs of these proceedings, to be taxed if not agreed.