MO YING v. BRILLEX DEVELOPMENT LTD AND ANOTHER

CACV 120/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 120 OF 2014

(ON APPEAL FROM HCA NO. 111 OF 2011)

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D E C I S I O N

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Hon Cheung JA (giving Decision of the Court) :

Application for leave

1.  The plaintiff (‘wife’) applies for leave to appeal to the Court of Final Appeal against our judgment of 15 April 2015.  We will deal with the application on paper.

The judgment

2.1  In this case, the wife asserted an interest in a property purchased by the 2^nd defendant (‘husband’) in his sole name and used as their matrimonial home.  The property was later sold by the husband to the 1^st defendant (‘purchaser’).  The proceeds of sale of the property were used to acquire some other properties which the wife is also asserting an interest against the husband under the divorce regime.  The wife’s claim on the property was based on common intention constructive trust. The trial judge dismissed the wife’s claim.

2.2  We dismissed the wife’s appeal.  We agreed with the trial judge that there was no express common intention between the wife and the husband that the wife would have a share in the property.  We also agreed with the trial judge that no inferred common intention could be found.

2.3  We, however, disagreed with the trial judge’s decision that (assuming a common intention constructive trust had been created), the wife was not estopped from asserting her interest against the purchaser by reason of her failure to speak out after becoming aware of the husband’s decision to sell the property to the purchaser.

The questions

3.1  The wife argues that this Court should grant leave to appeal on the basis that the appeal involves the following questions of great, general or public importance which ought to be submitted to the Court of Final Appeal (‘CFA’) for decision.

1) In relation to express common intention

3.2  In circumstances where one party (A) gave an excuse to another party (B) as to why B’s name was not added to the title of the property, whether the evidential burden rests on A to rebut the inference that A intended for B to have a proprietary interest in the property.

3.3  Whether the applicable test for materiality of A’s words is that (i) B must have been led by A’s words to believe that he/she has an interest in the property or (ii) it suffices that A’s words reinforced or confirmed B’s pre-existing belief that he/she has an interest in the property.

3.4  Whether the finding of an express common intention is to be determined objectively taking into account the relevant circumstances or subjectively taking into account A’s actual subjective intention.

2) In relation to inferred common intention

3.5  For the purpose of divining a married couple’s common intention in accordance with Baroness Hale’s list of factors in Stack v Dowden [2007] 2 AC 432 at paragraph 69, as a matter of principle:

(1) Whether, and if so to what extent, the concept of fairness and equality underlying a marriage relationship should be taken into account; and

(2) Whether general financial and non-financial contribution to the family, albeit not specifically referable to the property, should be taken into account.

3) In relation to detriment as a requirement of a constructive trust

3.6  Whether detriment is a requirement to establish a common intention constructive trust.

4) In relation to estoppel

3.7  In circumstances where a purchaser has failed to inspect the property, whether the purchaser could ‘reasonably assume’ that no title in the property was claimed, so as to establish an estoppel against a beneficial owner who had remained silent as to his/her title in the property from claiming such title.

Our views

1) Express common intention

4.1  We will not grant leave in respect of the three questions relating to express common intention.  The decision on this issue was solely a factual decision and these questions are not engaged.  In any event, these questions are not reasonably arguable because, even if the wife has an interest in the property, she was estopped from asserting her claim against the purchaser.

2) Inferred common intention

4.2  In respect of inferred common intention, on the face of it, the two questions do raise issues of great, general or public importance.  However, the wife will again face the estoppel defence and hence these two questions are not engaged.  We will not grant leave on these two questions.

2) Detriment

5.  We will also not grant leave on the question relating to detriment because this is not reasonably arguable in light of the CFA judgment of Luo Xing Juan v. Estate of Hui Shui See (2009) 12 HKCFAR 1 which we applied.

Estoppel

6.  The question on estoppel is clearly a fact sensitive question and not reasonably arguable.  The evidence in this case includes the wife’s knowledge of the sale some four weeks before completion but taking no action for 27 months.  We will not grant leave on this question.

Conclusion

7.  Accordingly the application is refused with costs to the purchaser.  We will grant certificate for two counsel.  As the husband had not responded to this application we will make no order as to costs between him and the wife.