YEUNG WAI LUNG FRANCO v. YEUNG WAI PING & ANOTHER

HCA6703/1995

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.6703 OF 1995

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J U D G M E N T

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1. The plaintiff is the sole legal owner of the premises of Unit 507, 5/F, Block L, Kornhill, Hong Kong ("Unit 507"). He is claiming as the sole legal and beneficial owner against the 1st and 2nd defendants for vacant possession, an injunction against trespass and damages thereof.

2. The 1st and 2nd defendants are the occupants of Unit 504 and siblings of the plaintiff. There are altogether seven siblings in the family :

(1)	Yeung Tak Yu ("Tak Yu")	Eldest brother
(2)	Yeung Suk Ching ("Suk Ching")	Eldest sister
(3)	Yeung Wai Ping (1st Defendant)	Brother
(4)	Yeung Suk Mei ("Suk Mei")	Sister
(5)	Yeung Suk Wai (2nd Defendant)	Sister
(6)	Yeung Wai Wing ("Wai Wing")	Brother
(7)	Yeung Wai Lung (Plaintiff)

3. The 1st and 2nd defendants alleged that Unit 507 was held by the plaintiff as trustee on implied trust for the seven siblings. Originally, the 1st and 2nd defendants were counterclaiming a declaration that Unit 507 was held by the plaintiff on trust for the seven siblings, the taking of account of the contributions including mortgage payments by the plaintiff, the 1st and 2nd defendants or other persons, and an order for the vesting of the shares of property in the seven siblings. The counterclaim was withdrawn at the commencement of the trial.

Background

4. The following facts are not in dispute amongst the parties. In 1986, Mr Yeung Jet Sheung, the late father of the siblings ("the late Mr Yeung"), then in his eighties, was about to retire from his partnership business and was to receive $730,000 as his capital share. He had never owned any property in his life and wanted to buy a property with this money. Later, the premises of Unit 714, 7/F, Block P, Kornhill ("Unit 714") was chosen.

5. On 31 July 1986, the plaintiff and the 1st and 2nd defendants entered into a Sale and Purchase Agreement with the vendor for the purchase of Unit 714 for a consideration of $450,340. The construction of the property was then still uncompleted.

6. As that stage, the late Mr Yeung had only received the first instalment of $280,000 from the partnership. A mortgage for $180,000 was taken out with Hang Seng Finance Limited. On 4 August 1986, the plaintiff and the 1st and 2nd defendants entered into an equitable mortgage as mortgagors and the entire purchase price was paid to the vendor. From August 1986 to April 1987, monthly instalments of $2,207.80 were paid before completion of the property. On 7 April 1987, the equitable mortgage was discharged upon full redemption when the late Mr Yeung received the balance of his capital share.

7. By a letter dated 3 March 1987 signed by the plaintiff and the 1st and 2nd defendants to Messrs Slaughter & May, solicitors for the vendor and purchasers, it was stated as follows :

"I want to transfer the ownership of (Flat 14, 7th Floor, Block P, Kornhill Garden, Hong Kong) from the following three persons :

(1) Mr (sic.) Yeung Suk Wai, Wyman (I.D. No.)

(2) Mr Yeung Wai Ping (I.D. No.)

(3) Mr Yeung Wai Lung, Franco (I.D. No.)

to the following person only Mr Yeung Wai Lung, Franco (I.D. No.)

I hope that the above transferring of ownership can be carried out at the same time when we are moving into the above flat."

8. On 16 June 1987, the Plaintiff signed as the purchaser and the 1st and 2nd defendants signed as confirmors in the Assignment of Unit 714. No consideration was ever received by either the 1st or 2nd defendant. It was common ground that the 1st and 2nd defendant were not in loco parentis vis-à-vis the plaintiff. After the assignment, the late Mr Yeung, the plaintiff and the 1st and 2nd defendants moved into Unit 714.

9. On 12 February 1990, the plaintiff entered into a preliminary agreement to buy Unit 504 at $1,328,000 and an initial deposit of $20,000 was paid. On 19 February 1990, the plaintiff entered into an Agreement for Sale and Purchase in respect of Unit 507 and the balance of deposit of $112,800 was paid. On 8 March 1990, a second deposit of $132,000 was paid. The purchase was completed on 19 March 1990. The purchase was facilitated by a mortgage for $1,062,000 with Dah Sing Bank.

10. On 28 March 1990, the plaintiff entered into an Agreement for Sale and Purchase to sell Unit 714 for $1,020,000. The completion was on 17 April 1990. On 19 April 1990, the mortgage with Dah Sing Bank was repaid to the extent of $710,000 with the sale proceeds from Unit 714 and the outstanding balance of the mortgage was $350,732.02. For all intents and purposes, the entire proceeds from the sale of Unit 714 had been applied towards the purchase of Unit 504. The late Mr Yeung, the plaintiff, the 1st and 2nd defendants all moved to Unit 504.

11. I n 1992, the late Mr Yeung died. On 15 April 1994, the plaintiff and his wife and daughter moved out of Unit 504. On 2 June 1994, the mortgage on Unit 540 was discharged by early repayment by the plaintiff. The present proceedings were issued on 8 July 1995.

The issue

12. The main issue is the beneficial ownership of Unit 507. The specific issues are :

(a) The late Mr Yeung's intention regarding the purchase of Flat 714;

(b) Whether it was the late Mr Yeung or the 1st and 2nd defendants who paid for the monthly instalments of the

equitable mortgage of Unit 714 from August 1986 to April 1987;

(c) The reason why Unit 714 was assigned to the plaintiff alone;

(d) Whether the 1st and 2nd defendants have contributed in the monthly instalment of the mortgage on Unit 504.

Plaintiff's case

13. The plaintiff said Unit 714 was chosen by him. When the late Mr Yeung paid for the purchase price of Unit 714, he only intended it to be a gift for the 1st defendant and him. The late Mr Yeung favoured sons at the expense of the daughters. The late Mr Yeung did not give any dowry to Suk Ching when she got married, and refused to support the 2nd defendant when she wanted to study abroad. Amongst the sons, Tak Yu had left the family earlier on and there was no contact with him. Wai Wing had used the money of the late Mr Yeung when he studied in the United States. Hence, the gift was for the 1st defendant and him only.

14. Although the 1st defendant was named in the Agreement for Sale and Purchase of Unit 714, the 1st defendant later declined the gift in favour of him because the 1st defendant disliked the late Mr Yeung as blamed him for the early death of their late mother by neglecting her health.

15. The 2nd defendant was named in the Agreement for Sale and Purchase only for the purpose of aggregating her income for the application of the equitable mortgage. And when the Assignment was executed, the late Mr Yeung ordered her to take her name off as a purchaser because he disapproved of her relationship with a married man.

16. The plaintiff said the 1st and 2nd defendants never made any contribution to the mortgage repayments of Unit 714 or Unit 504.

17. The plaintiff said neither the 1st or 2nd defendant nor himself contributed to the eight instalments of the equitable mortgage of Unit 714. They were all paid by the late Mr Yeung. Although by then he had retired from the partnership, he was still entitled to drawings therefrom. During that period, the 1st and 2nd defendants each contributed $1,000 per month to the household expenses, which was the same amount as before the mortgage was taken out. Hence, Unit 714 was purchased entirely with the money of the late Mr Yeung, and it belonged to the plaintiff absolutely by reason of the gift.

18. Unit 504 was purchased with the proceeds of Flat 714 and further contributions by him and his wife. The 1st and 2nd defendants had never made contribution towards the mortgage repayment. He and his wife paid for the initial deposits of $20,000 and $112,800. The second deposit of $132,800 was paid for with a loan by eldest sister Suk Ching, which had subsequently been repaid. He also paid the legal costs, stamp duty, commissions of $53,945. After the move into Unit 504, the 1st and 2nd defendants increased their monthly contribution to $1,300 each, but that was solely because of increase in household expenses. Between 1990 to 1992 until the death of the late Mr Yeung, the household expenses were about $5,050 per month, and thereafter until he moved out in 1994, about $4,300 per month.

19. The plaintiff and his wife paid the monthly mortgage repayments for Unit 504 of between $3,000 to $4,000. They had also saved up to make the following early repayments :

(1)	4 December 1991	$51,318.23
(2)	22 February 1992	$50,154.43
(3)	8 October 1993	$100,715.12
(4)	2 June 1994 (Final payment)	$61,282.30

20. In April 1994, the plaintiff suggested that Unit 504 should be sold and the sale proceeds be used to buy two smaller flats, one in Nam Fung Sun Chuen for the 1st and 2nd defendants, and the balance of the sale proceeds be used to buy another flat for his own family. The plaintiff said he offered to buy a flat for the 1st and 2nd defendants merely out of kindness and the concern for their housing needs, not because they had any interest in Unit 504. Suk Ching and some of the siblings disagreed with his proposal. On or about 15 April 1994, the plaintiff rented premises and he and his wife and daughter moved out of Unit 504. And in June 1994, he made the early payment of the mortgage as mentioned above. He had paid all the management fees and rates for Unit 504 until now even after he had moved out in April 1994.

21. Hence, the plaintiff said he was the sole beneficial owner of Unit 504. He only allowed the 1st and 2nd defendants to stay there because of family relationship. On 11 October 1994, his solicitors had written to the 1st and 2nd defendants revoking their licence to occupy the premises.

22. The plaintiff's wife Choy Ching Wah also gave evidence but did not add much to the plaintiff's evidence.

Defendants' case

23. The 1st and 2nd defendants and Suk Ching (DW1) gave evidence for the defence.

24. Suk Ching said after the death of their mother, as the eldest sister, she assumed the role of looking after the family. The late Mr Yeung always discussed matters with her first before bringing them up with the siblings.

25. Before the late Mr Yeung retired in 1986, he was living in rented premises at Pan Hoi Street with the plaintiff, the 1st and 2nd defendants. The late Mr Yeung told her that he had never owned any property and wanted to purchase a property with his share of capital so that the siblings could live together, and he said the property was to be treated as family property whereupon after his death, those siblings who suffered a change of fortune could live in it if they wanted to. Later, the matter was raised at the frequent family dinner gatherings where the plaintiff, the 1st and 2nd defendants were also present. Later, the plaintiff, Suk Mei and her chose Unit 714.

26. Suk Ching said as the late Mr Yeung had no intention of selling the property, she suggested that it should be held in the name of those siblings who were going to live with him, i.e. the plaintiff, the 1st and 2nd defendants. The late Mr Yeung did not raise any objection.

27. Both the 1st and 2nd defendants said that although they were named as purchasers in the Agreement for Sale of Purchase for Unit 714, the common understanding was that it was family property for the benefit of all seven siblings.

28. The 1st defendant said he never gifted his share of the property to the plaintiff when he conveyed his interest to the plaintiff as confirmor. It was for convenience only. He denied that his relationship with the late Mr Yeung was poor nor he detested his gift. He said after his late mother's death, he continued to live with the late Mr Yeung, and to work in his business for many years. At the time of the purchase of Unit 714, the 1st defendant was a lorry driver doing two jobs at the same time. He had to deliver newspaper at night which make his living and sleeping pattern very awkward. Hence, he left it to the plaintiff to handle the management of the property.

29. The 2nd defendant denied that her name was only added to the Agreement for Sale and Purchase merely for the purpose of facilitating an application for the equitable mortgage. At the relevant time, she was working in Tsing Yi and had to spend long hours traveling daily. She also conveyed her interest to the plaintiff for convenience only. She said she went by the family decision that the property was to be held by the plaintiff in his sole name for the benefit for all the siblings.

30. The 1st and 2nd defendants said that the eight instalments of the equitable mortgage were paid by them. Suk Ching also agreed as during that period, the late Mr Yeung's balance of the capital share had not been received and he had no income to pay for the instalments.

31. The 2nd defendant said before the equitable mortgage was taken out, both the 1st defendant and her contributed $1,000 per month to household expenses. For the payment of the equitable mortgage, they increased the contribution to $1,800 each. After the discharge of the mortgage, they contributed $1,000 per month. The 1st defendant agreed that he contributed $1,800 during the period of the equitable mortgage, but said he did not contribute anything before that.

32. The 1st defendant said he did not know how much of the $1,800 was applied towards repayment of the equitable mortgage. The plaintiff told them each to contribute that amount, and he trusted the plaintiff and left the details to him.

33. The 2nd defendant said the rented premises at Pun Hoi Street had no facilities at all. Apart from refuse collection, there was really no management charges. The 1st defendant and her were rarely at home for meals. Apart from the daily tea breakfast, the late Mr Yeung had meals at the elder sisters' homes. Besides, the late Mr Yeung received the old age allowance from the Government. Hence, there was over contribution each month before the equitable mortgage was taken out.

34. Suk Ching said towards the end of 1989, the plaintiff told her that he wanted to get married and Unit 714 was not big enough anymore. The plaintiff asked her to persuade the late Mr Yeung to sell Unit 714 and use the proceeds to buy a bigger flat. The late Mr Yeung was angry about this idea and said the plaintiff could move out himself. Finally, the late Mr Yeung was persuaded to agree to the plaintiff's proposal.

35. At some stage before Unit 714 was sold, the plaintiff borrowed $132,800 from Suk Ching to pay for the deposit in the purchase of Unit 504. Later, the plaintiff repaid the sum to Suk Ching. Suk Ching's husband also acted as a guarantor of the mortgage on Unit 504. Suk Ching said he did so not because he wanted to help the plaintiff, but so that the plaintiff needed not move out and the family could reside together.

36. The 2nd defendant said that after moving into Unit 504, the plaintiff told her the monthly contribution had to be increased from $1,000 to $1,300 to cover the increased household expenditures and the mortgage repayments. Both the 1st and 2nd defendants paid $1,300 per month as told by the plaintiff.

37. In December 1992, the late Mr Yeung died. In the same month, the plaintiff's wife gave birth to a baby daughter. The 1st and 2nd defendants' monthly contribution remained at $1,300.

38. In late 1993, the plaintiff's wife was pregnant again. In about early April 1994, the plaintiff went to see Suk Ching and said Unit 504 would not be big enough when his second child was born. Suk Ching said he wanted to seek her consent to sell Unit 504 and used the sale proceeds to buy two smaller flats as mentioned above. Suk Ching replied that since Unit 504 was purchased with the late Mr Yeung's money, the consent of the other siblings had to be sought.

39. Two weeks later, Suk Ching arranged a meeting at her home. The 2nd defendant, Suk Mei, the plaintiff, the plaintiff's wife and herself were present. The 1st defendant was busy and did not attend. The 1st defendant said he had told Suk Ching that he objected to the plaintiff's proposal. The parties failed to reconcile each others.

40. A few days later, Suk Ching's husband tried to mediate and a second meeting was held. It was suggested as Unit 504 was purchased partly with the late Mr Yeung's money, a calculation could be made as to the plaintiff's contributions to the mortgage repayments and the property could be split up amongst the siblings. The plaintiff agreed to produce all the receipts for the mortgage repayments.

41. A few more days later, the plaintiff told Suk Ching there was no need for him to produce any receipts for the mortgage repayments. He said if his proposal were not accepted, there was no room for negotiation.b The plaintiff and his family moved out of Unit 504. Even after the plaintiff had moved out, the 1st and 2nd defendants continued to make their respective contribution of $1,300 per month by crediting the plaintiff's account at the Hongkong Bank No.156-1-001809 until March 1996. Sometime after June 1994, they knew about the early redemption of the mortgage as Suk Ching's husband's guarantee was discharged, nevertheless they continued to make the payments until advised by their lawyer not to do so.

42. The 2nd defendant said the 1st defendant and her seldom had meals at home while residing with the plaintiff and his family. After the plaintiff had moved out of Unit 504, the utilities charges and household expenses (excluding rates and management charges) were between $1,000 to $2,000 only.

Assessment of the evidence

43. Counsel for the plaintiff submitted that the 1st and 2nd defendants were not credible witnesses by reason of the numerous inconsistencies in their evidence.

44. The Defence pleaded that the plaintiff was unemployed at the time of the purchase of Unit 714 so that it was more convenient for him to deal with the procedural matters. However, documents showed that the plaintiff was employed during the relevant time.

45. The 2nd defendant said before the equitable mortgage, both the 1st defendant and her each paid $1,000 per month towards the household expenses, which was increased to $1,800 each for the repayment of the equitable mortgage. However, the 1st defendant said before the equitable mortgage, he did not have to make any contribution. Counsel for the plaintiff submitted that the net increase of $1,600 was insufficient to cover the equitable mortgage repayment of $2,200 per month, and the 1st defendant deliberately understated his contribution beforehand in order to arrive at a bigger sum for the mortgage repayments.

46. Further, the 2nd defendant in para. 8 of her witness statement stated that she usually deposited the $1,800 into the plaintiff's account No.156-1-001809. In chief, she shifted her case to sometimes it was by cash, and sometimes by deposits. However, the bank record (Common Bundle pp.355-7) showed that while there were numerous no passbook deposits of $1,100 or $1,200, there was only one passbook deposit of $1,800. Upon cross-examination, she said she made more payments by cash than by transfer. The 2nd defendant explained that she could not really remember the mode of payment in the early years. The reason why she said the payments were by transfer into the plaintiff's stated account was because that was the method in the later years.

47. Counsel for the plaintiff submitted that the increased contribution from $1,000 to $1,300 per month after the move into Unit 504 was reasonable in view of the increased household expenses only, and insignificant in relation to the mortgage repayment of $3,000 to $4,000 per month. The 1st and 2nd defendants were also challenged for saying they had made non-cash contributions apart from the $1,300 for the first time at the trial. The 2nd defendant was also cross-examined on records of payments to the plaintiff, which showed figures of less than $1,300. She explained that sometimes she had bought things for the plaintiff and she made deductions before making payments to him.

48. Counsel for the plaintiff also submitted that the 1st defendant lied about his good relationship with the late Mr Yeung. The 1st defendant said he had visited the late Mr Yeung in Ruttonjee Hospital about 10 times. In fact, the late Mr Yeung had only stayed there for a week before he died, and he had stayed at other hospitals before.

49. Counsel for the plaintiff also pointed out that while the 1st defendant said he told Suk Ching he objected to the selling of Unit 504 and the buying of two smaller flats, Suk Ching said the 1st defendant had left the matter with her.

50. Notwithstanding the above inconsistencies, I find the 1st and 2nd defendants and Suk Ching to be honest and credible witnesses. I do not find the plaintiff and his wife to be honest witnesses.

51. It is clear from the evidence that the Yeung's family was a closely knit unit. The late Mr Yeung resided with his unmarried children and did provide for a place for them to live during his life time. There were regular ancestral worships and family meals where most of the siblings gathered as a family. It is logical that the late Mr Yeung wished to benefit all his siblings after his death. After Unit 714 was purchased, the title deed was kept by Suk Ching, the eldest daughter who had helped looking after the siblings after the death of the mother. If the late Mr Yeung had intended to give Unit 714 to the plaintiff alone, I can see no reason why the title deed was not kept by the plaintiff, since apart from being the registered owner of Unit 504, the plaintiff was also the account holder of the time deposit and savings accounts which funds belonged to the late Mr Yeung, and was also the late Mr Yeung's attorney with the power to withdraw from his savings account in receipt of the old age allowance.

52. I agree with counsel for the plaintiff that the keeping of the title deeds is by no means conclusive (Wong Kwok Hin v. Wong Lai Fun [2001] 3 HKC 660), but it is an important factor in this case.

53. I accept Suk Ching's evidence that the late Mr Yeung accepted her suggestion that initially Unit 714 was to be held by the plaintiff and the 1st and 2nd defendants for the seven siblings.

54. The 1st defendant denied refusing the gift of the share of the property. He had worked for the late Mr Yeung, and resided with him rent free until the late Mr Yeung's death. He might not have cared for the late Mr Yeung well, but I could not see that he disliked his father. The 1st defendant worked two jobs in order to earn more income, and did not appear to be carefree about money at all. I can see no reason why the 1st defendant would give Unit 714 to the plaintiff at all.

55. I accept Suk Ching's evidence that the late Mr Yeung had no income and did not pay the monthly instalments of the equitable mortgage of Unit 714. Notwithstanding that the 1st and 2nd defendants' recollection of the mode of payment to the plaintiff in the early years might have been faulty, I accept their evidence that they had contributed $1,800 per month each during the equitable mortgage, which together exceeded the monthly repayment of $2,200. I also accept that after the move into Unit 504, they were invited to increase the contribution from $1,000 to $1,300 per month, which according to the plaintiff were applied partly towards the mortgage repayments.

56. After the plaintiff had moved out of Unit 504 in April 1994, the 1st and 2nd defendants continued to pay $1,300 each month to the plaintiff. The element of common household expenditure with the plaintiff no longer existed. For at least two months before they knew there was an early redemption of the mortgage, they must have been fulfilling their obligations to make monthly contributions to the mortgage repayments of Unit 504.

57. I reject the plaintiff's evidence that he offered to buy a flat in Nam Fung Sun Chuen for the 1st and 2nd defendants out of concern for their housing needs. I find that he did so because he knew that the 1st and 2nd defendants were beneficial owners of Unit 504.

58. Counsel for the plaintiff submitted that in paying for the rates and management fees and early repayment of the mortgage of Unit 504, the plaintiff had treated the property as his own. I find that was his wish rather than the reality.

59. I also find that the plaintiff had exaggerated the claim that he and his wife had used their own money to pay for the deposit of $132,800 in the purchase of Unit 504. No doubt they had paid this amount before Unit 714 was sold. According to the cash flow statement prepared by the plaintiff's wife (Common Bundle p.426), taking into account the sale proceeds of Unit 714 and the mortgage with the Dah Sing Bank, they were only out of pocket to the tune of $27,652.36. I find the plaintiff's wife a very evasive witness as when she was asked who contributed the deposit of $132,800, she said "Maybe I have contributed", and she was slow to acknowledge that the entire proceeds of sale of Unit 714 were applied to the purchase of Unit 504, a point which was not in dispute.

60. As to the respective contributions of the parties to Unit 714 and Unit 504, as the counterclaim has been withdrawn, I shall not make any finding as to the respective amounts and shares thereof. I also make no finding as to the source of funds in which the plaintiff made early repayments of the mortgage of Unit 504.

Finding of facts

61. From the accepted evidence, I make the following findings :

(a) The late Mr Yeung did express to his children including the plaintiff and the 1st and 2nd defendants that he intended to use his money to purchase a property so that his children could have a place to live in after his death;

(b) The late Mr Yeung never intended that the property purchased was for the benefit of the plaintiff and the 1st defendant only;

(c) The late Mr Yeung intended the plaintiff to hold Unit 714 for the benefit of his seven children;

(d) At all material times, the plaintiff, the 1st and 2nd defendants knew of such intention of the late Mr Yeung;

(e) Unit 714 was purchased partly with the money of the late Mr Yeung and partly with contributions to the repayments of the equitable mortgage by the 1st and 2nd defendants;

(f) The plaintiff and the late Mr Yeung did not contribute towards the equitable mortgage of Unit 714;

(g) The amount the 1st and 2nd defendants each did contribute towards the equitable mortgage was worked out by the plaintiff;

(h) The 1st and 2nd defendants did not convey their interests in Unit 714 to the plaintiff as a gift but for convenience only;

(i) The sale proceeds of Unit 714 were applied towards the purchase of Unit 504;

(j) The 1st and 2nd defendants did contribute to the mortgage repayments of Unit 504 at the invitation of the plaintiff.

Constructive trust

62. Counsel for the 1st and 2nd defendants submitted the 1st and 2nd defendants are entitled to a beneficial interest in Unit 504 on two bases :

(a) As Unit 714 was purchased with the money of the late Mr Yeung and he intended it to be for the benefit of all his seven children, Unit 714 was held by the plaintiff in trust for the seven siblings, and as the sale proceeds of Unit 714 were applied towards the purchase of Unit 504, Unit 504 was also held by the plaintiff in trust for the seven siblings;

(b) As the 1st and 2nd defendants had contributed towards the mortgage repayments of Unit 714 and Unit 504 on the common intention with the plaintiff that they were the beneficial owners of the property, there was a constructive trust in favour of the 1st and 2nd defendants to the extent of their contributions.

63. As to the 1st limb, at one stage, counsel for the 1st and 2nd defendants queried whether trust had failed by reason of the lack of writing as required by section 5(1) of the Convenyancing and Property Ordinance (Cap.219).

64. Section 5 of Cap.219 provides that :

"(1) Subject to section 6 -

(a) no equitable interest in land can be created or disposed of except by writing signed by the person creating or disposing of the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law;

(b) a declaration of trust respecting land or any interest therein shall be manifested and proved in writing signed by the person who is able to declare such trust or by his will. (Amended 31 of 1988 s. 3)

(2) This section does not affect the creation or operation of resulting, implied or constructive trusts."

65. Section 6 relates to creation of interest in land in parol and is not relevant for the present purpose.

66. Section 5 was never pleaded by the parties. Counsel for the plaintiff submitted that section 5(1) did not apply to the facts of this case as it was the provision of the purchase money by the late Mr Yeung, and in the event that the court do accept the evidence of the 1st and 2nd defendants, the court can rely on the exception for an implied trust under section 5(2). Counsel for the 1st and 2nd defendants agreed to this.

67. I agree with the submission on section 5(2) by counsel for the plaintiff. In case I am not correct, I find that equity will not allow the statute of frauds to become an instrument of fraud.

68. According to Halsbury's Laws of England Vol.48 (4th ed., 2000) at para.525:

"A constructive trust is automatically imposed in circumstances where it is unconscionable or contrary to fundamental equitable principles for the owner of particular property to hold it purely for his own benefit. It is imposed irrespective of the intentions of the persons concerned, although it may coincide with their original intentions where the person who had agreed to hold property as express trustee subsequently relies on the absence of the requisite statutory formalities to claim the property as sole beneficial owner. It is, however, possible to regard this latter situation as an express trust enforced as such and exempted from the statutory formalities on the basis that equity will not allow a statute to be used as an instrument of fraud."

69. I have found that the plaintiff knew that it was the intention of the late Mr Yeung to benefit all the seven siblings when he provided the purchase money of Unit 714, and the late Mr Yeung agreed that it was to be held in the sole name of the plaintiff and the sale proceeds of Unit 714 were applied towards the purchase of Unit 504. In the premises, I hold that Unit 504 was held by the plaintiff on trust for the seven siblings including the 1st and 2nd defendants.

70. As to the 2nd limb, counsel for the 1st and 2nd defendants submitted that a trust arises in connection with the acquisition by one party of a legal title to property whenever that party has so conducted himself that it would be inequitable to allow him to deny the other party a beneficial interest in the property acquired. This will be so where (i) there was a common intention that both parties should have a beneficial interest and (ii) the claimant has acted to his detriment in the belief that by so acting he was acquiring a beneficial interest (see Lewin on Trusts, 17th Ed., 2000, p.250).

71. According to Lord Diplock in Gissing v. Gissing [1971] AC 886, 905B :

"A resulting, implied or constructive trust - and it is unnecessary for the present purpose to distinguish between these three classes of trust - is crested by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held so to have conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land."

72. Lord Diplock further stated at 905G :

"An express agreement between spouses as to their respective beneficial interests in land conveyed into the name of one of them obviates the need for showing that the conduct of the spouse into whose name the land was conveyed was intended to induce the other spouse to act to his or her detriment on the faith of the promise of a specified beneficial interest in the land and that the other spouse so acted with the common intention required to create a resulting, implied or constructive trust. But parties to a transaction in connection with the acquisition of land may well have formed the common intention that the beneficial interest in the land shall be vested in them jointly without having used express words to communicate this intention to one another; or their recollections of the words used may be imperfect or conflicting by the time any dispute arises. In such a case - a common one where the parties are spouses whose marriage has broken down - it may be possible to infer their common intention from their conduct.

As in so many branches of English law in which legal rights and obligations depend on the intentions of the parties to the transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct. It is in this sense that in the branch of English law relating to constructive, implied or resulting trusts effect is given to inferences as to the intentions of parties to a transaction which a reasonable man would draw from their words or conduct and not to any subjective intention or absence of intention which was not made manifest at the time of the transaction itself. It is for the court to determine what those inferences are."

73. From the facts found by me, it is beyond peradventure that there was common intention between the plaintiff and the 1st and 2nd defendants that the 1st and 2nd defendants would contribute to the mortgage repayments of Unit 714 and Unit 504 because they were beneficial owners of the properties by reason of their common understanding of the intention of the late Mr Yeung. Hence, I hold that Unit 504 was held by the plaintiff on trust for the 1st and 2nd defendants also by reason of their contributions towards the mortgage repayments.

Proprietary estoppel

74. This point was never pleaded and was eventually abandoned by counsel for the 1st and 2nd defendants.

Conclusion

75. I hold that the 1st and 2nd defendants are beneficial owners of Unit 504 and the plaintiff is not the sole legal and beneficial owner of the property to the exclusion of the 1st and 2nd defendants. Hence, the plaintiff's claims must fail, and are hereby dismissed.

Costs

76. I shall hear the parties as to the costs on the main action and on the withdrawn counterclaim.