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Cheung Lai Mui, The Executrix Of The Estate Of Cheung Ping Kau And The Administratrix Of The Estate Of Cheung Ping Fuk (Alias Cheung Bing Fuk) v Cheung Wai Shing And Others

Judgment Cited authorities 36 Cited in 1 Precedent Map Related
Vincent
Judgment Date27 May 2021
Neutral Citation[2021] HKCFA 19
Judgement NumberFACV1/2021
Citation(2021) 24 HKCFAR 116
Year2021
Subject MatterFinal Appeal (Civil)
CourtCourt of Final Appeal (Hong Kong)
FACV1/2021 CHEUNG LAI MUI, the executrix of the estate of CHEUNG PING KAU and the administratrix of the estate of CHEUNG PING FUK (alias CHEUNG BING FUK) v. CHEUNG WAI SHING AND OTHERS

FACV No. 1 of 2021

[2021] HKCFA 19

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 1 OF 2021 (CIVIL)

(ON APPEAL FROM CACV NO. 107 OF 2017)

________________________

BETWEEN
CHEUNG LAI MUI (張麗梅), Plaintiff
the executrix of the estate of (Appellant)
CHEUNG PING KAU and
the administratrix of the estate of
CHEUNG PING FUK
(alias CHEUNG BING FUK)
and
CHEUNG WAI SHING (張偉城) 1st Defendant
(1st Respondent)
CHEUNG WAI MIN (張偉冕) 2nd Defendant
(2nd Respondent)
CHEUNG CHI YUNG (張智勇) 3rd Defendant
(3rd Respondent)

Before: Chief Justice Cheung, Mr Justice Ribeiro PJ, Mr Justice Fok PJ, Mr Justice Bokhary NPJ and Mr Justice Gummow NPJ
Date of Hearing: 20 April 2021
Date of Judgment: 27 May 2021

_________________________

JUDGMENT

_________________________

Chief Justice Cheung:

1. I agree with the joint judgment of Mr Justice Ribeiro PJ and Mr Justice Gummow NPJ.

Mr Justice Ribeiro PJ and Mr Justice Gummow NPJ:

2. There has reached this Court litigation commenced by the Appellant (“P”) in 2012. It concerns family disputes respecting two parcels of land located in the Sha Kok Mei Village (“the Village”), Sai Kung, in the New Territories. The Cheung family are indigenous inhabitants of the Village. The land law in the New Territories in 1898 and its subsequent development provides the background to the issues in this litigation and has been traced in Winfat Enterprises (HK) Co Ltd v A-G [1983] HKLR 211, and on appeal [1985] 1 AC 733 at 744.

3. The first dispute relates to the parcel (“the Disputed Land”) being Lot 1101 in Demarcation District 221. The principal issues in this Court concern equitable doctrine and remedies, in particular the existence and incidents of proprietary estoppel in favour of the Third Respondent (“D3”).

4. The second dispute concerns Lot 774 on which a house is erected (“House 774”). House 774 is about two minutes walking distance from the Disputed Land. The First and Second Respondents (“D1” and “D2”) together hold a 1/3 undivided share in the land. P was born in 1960 (adopted in 1961). She grew up in House 774 and lives there with her daughter and granddaughter on the ground floor. She derives rental income from the other two floors. The trial judge ordered that P pay to D1 and D2 1/3 of that rental income from 1997 (the year of the death of P’s father) and 1/3 of the mesne profits from 1997 in respect of the ground floor.

Question 1

5. It is convenient to deal first with the Disputed Land and to begin with the family history which lies behind the litigation.

6. Cheung Tak Ming died in 1934. He was owner of the Disputed Land, along with other land in the Village. His three sons, Wan, Kau and Fuk, became registered co-owners of the Disputed Land. The eldest, Wan, died in 1999. D1 and D2 are respectively his son and daughter. They together are registered owners as to 1/3 of the Disputed Land, in succession to their father. D1 is the father of D3. D3 was born in 1971 and is the sole great grandson of Cheung Tak Ming. This was a matter of much significance from the traditional viewpoint of Wan, Kau and Fuk.

7. The second son, Kau, died in 1997. P is his adopted daughter, executrix of his will under a grant made in 1998 and beneficiary of his estate with her daughters.

8. The third son, Fuk, had a physical disability, never married and suicided on a date between September 1991 and May 1992. He died intestate and P is administratrix of his estate under a grant made as late as 2006. By operation of s 4(8) of the Intestates’ Estates Ordinance, Cap 73, Fuk’s assets passed to his brothers Wan and Kau who survived him.

9. In this litigation P sought, among other relief, an order for sale of the Disputed Land under the Partition Ordinance, Cap 352. After a 16 day trial Wilson Chan J dismissed her claims. He found P not to be a credible or reliable witness, whereas D3 was a credible witness whose evidence was consistent with the objective circumstances.

10. On the counterclaim by D3, his Lordship declared that D3 is the sole beneficial owner of the Disputed Land and P is a constructive trustee holding 2/3 interest therein for D3.

11. The inconclusive outcome of the appeal by P to the Court of Appeal, [2020] HKCA 148, is described in the Reasons for the Determination of the Appeal Committee (Ribeiro, Fok, Cheung PJJ) given on 18 December 2020 ([2020] HKCFA 41). The Court of Appeal (Lam VP, Cheung and Au JJA) set aside the judgment of the trial judge and remitted certain issues for determination in accordance with its legal analysis, but not on a retrial. Leave was granted by the Appeal Committee on several questions of law. Question 1 concerns proprietary estoppel and the position of D3 with respect to the Disputed Land.

12. Before turning to the text of that question it is appropriate to consider the findings at trial respecting what was identified as the “Common Understanding” and the reliance of D3 upon it.

13. The Disputed Land is situated in front of Lot 1099 where the family of D3 lived since 1974 and he grew up. The evidence of D3, accepted at trial was that since the 1970’s there had been a “Common Understanding” among the elders of the family, in particular Wan, Kau and Fuk, that D3 could use and own the Disputed Land and build a house there when he became an adult at the age of 18. The Common Understanding did not include an assurance that by way of testamentary disposition the three brothers would bequeath the Disputed Land to D3.

14. D3 is a professional construction contractor and builder. Knowing about the Common Understanding, when D3 was a teenager in the 1980’s he had started carrying out works to build stone walls to surround the Disputed Land. In 1991/1992 D3 applied substantial physical effort to heighten the stone walls and install underground electricity cables connected to the lights at the entrance gate. He also installed a new gate to prevent strangers entering the Disputed Land and maintained the trees, plants and storage house there. Significantly, in March 1997, Wan and Kau, the surviving brothers, signed a consent statement to facilitate the intended application by D3 to the District Lands Office of Sai Kung for permission to build a house on the Disputed Land. In this Court, D3 submits that by 1999 when the last of the three brothers died he had already acted upon the Common Understanding and sustained significant detriment.

15. In about 2002, D3 erected a one storey building, referred to in the pleadings as “Structure B” and in 2003 a second building (“Structure A”). In September 2003, with his wife and infant son, D3 commenced living on these premises and in the following years D3 made further improvements to the Disputed Land. He estimated that from the early 1990s he spent at least HK$2 million on construction and improvement works to the Disputed Land and did so in reliance on the Common Understanding.

16. The trial judge accepted that the case for proprietary estoppel had been established by D3.

17. To displace that outcome, P submits that (i) the activities of D3 from 1992 to 1999 do not constitute the requisite “substantial” detrimental reliance (ii) no “equity” had arisen in favour of D3 at the time of the death of Wan, the last of the three brothers, in 1999 and (iii) the activity of D3 after 1999 cannot supply the necessary detrimental reliance because this must occur before the death of the last of the authors of the Common Understanding.

18. D3 responds that, contrary to (i), the activities of D3 from 1992 to the death of Wan in 1999 did constitute sufficient detrimental reliance, and this Court should accept that submission and uphold D3’s case on proprietary estoppel giving rise against P to a constructive trust over the Disputed Land as the measure of relief.

19. Further, and in the alternative, D3 submits that the determinative question is whether D3 had suffered sufficient detriment when P, as personal representative of the estates of Kau and Fuk, sought in 2012 to resile from the Common Intention.

20. Before considering those submissions, several observations of a general nature are appropriate. The first concerns the approach of equity in such property disputes as those concerning undue influence and, here, proprietary estoppel. In Muschinski v Dodds (1985) 160 CLR 583 at 616 Deane J emphasised that, while “general notions of fairness and justice” inform “the content and application of equity”, relief by way of constructive trust should not reflect “the formless void of individual moral opinion”. Nevertheless,in Jenyns v Public Curator (Q) (1953) 90 CLR 113 at 119, Dixon CJ, McTiernan, Kitto JJ emphasised the “comprehensive view” taken by a court of equity of connected circumstances which influence determination upon “the real justice of the case”. Recently, Lady Arden has emphasised that equity operates by “principles” rather than “rules”, to produce a “fair result” (Manchester Ship Canal Co Ltd v Vauxhall Motors Ltd [2020] AC 1161 at [63]-[64]).

21. In the current, 21st, edition of Hanbury and Martin “Modern Equity” (Glister and Lee eds.) §30-022, it is said that the doctrine of proprietary estoppel has developed rapidly in the past half century. That may be so, as illustrated by the numerous cases decided in Hong Kong, the United Kingdom and Australia to which the parties to this appeal referred the Court.

22. But the foundation decision of...

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