Chin Lan Hong And Others v Cheung Poh Choo And Others

cacv 98/2004

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 98 of 2004

(on appeal from HCA NO. 1208 of 2000)

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J U D G M E N T

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Hon Rogers VP:

1. I have had the advantage of reading the judgment of Le Pichon JA in draft and there is nothing I can add.

Hon Woo VP:

2. I entirely agree with the judgment of Le Pichon JA.

Hon Le Pichon JA:

3. This is an appeal and cross-appeal from the judgment dated 15 January 2004 of Deputy High Court Judge To. The proceedings concerned the right of the 1^st defendant to occupy the property known as No. 4A South Bay Road (“the property”) after the expiration of a notice to quit served on her by the plaintiffs on 24 December 1999. The judge found that the 1^st, 2^nd and 3^rd defendants were guilty of trespass in respect of the 1^st defendant’s occupation of the property for nine days between 2 and 11 October 2000 and awarded the plaintiffs damages which he assessed at $36,812.90 together with interest. It was also ordered that the property be sold by public tender with a reserve price but that part of the order was made with the consent of the 2^nd and 3^rd defendants and does not form the subject matter of the appeal and cross-appeal. At the conclusion of the hearing, judgment was reserved which we now give.

The facts

4. Cheung Kung Hai (“the father”) was a wealthy Singaporean businessman. He came to Hong Kong in 1961 and built an eight-bedroomed house on the property in 1967 as a home for his wife Lim Bee and the eight children of that marriage consisting of a son Cheung Chin Chye (“CCC”) and seven daughters including the 1^st defendant.

5. The father had a concubine namely, the 1^st plaintiff with whom he had three sons, Cheung Kee Wee (“CKW”), Cheung Lin Wee (“CLW”) and Cheung Ying Wee (“CYW”) and three daughters. The 1^st plaintiff and her children lived in a flat at No.4 South Bay Road and at a later date in a house in Black’s Link. The judge found that the relationship between the half siblings was less than harmonious.

6. The father also had two adopted sons, Cheung Theam Siew (“CTS”) and the late Cheung Kwong Wai. Three of the daughters including the 1^st defendant are unmarried.

7. Starting from 1967, the 1^st defendant assisted in the family business together with CTS. In 1975, when she was sent to take charge of the family business in Singapore, she maintained a room in the property which she used whenever she returned to Hong Kong. In 1976, CKW joined the family business in Hong Kong. Lim Bee died in 1977. At about that time the 1^st defendant returned to work in Hong Kong and lived in the property.

8. The family business which was property orientated experienced financial difficulties in the early 1980s when uncertainty over the future of Hong Kong led to a drop in the property market. On 30 October 1982, the father assigned his interest in the property to the 1^st plaintiff, CCC, CKW, CLW and CTS in equal shares as tenants in common (“the 1982 assignment”). The judge found that the assignment was made to protect the property from possible enforcement action by creditors of the family business as the father was the guarantor of the business debts. Given that finding, he had little difficulty in holding that the presumption of a gift to the 1^st plaintiff and 4 sons had been rebutted. The father was to live for another 18 years after the 1982 assignment. As will become apparent, he remained in possession either actually or through Lim Bee’s children right up to his death in October 2000.

9. In 1984, the father and the 1^st plaintiff relocated to Taiwan and the 1^st defendant was again sent to work in Singapore. She nevertheless maintained a room in the property for her use whenever she was in Hong Kong. The father maintained control of the Hong Kong business from Taiwan, with CTS and CKW being responsible for the day-to-day management in Hong Kong. At about this time, CLW also joined the family business in Hong Kong. In the following year, CTS emigrated to Canada and re-assigned his 1/5 share in the property to the 4^th plaintiff in exchange for some assets from the father. The judge, apparently erroneously (although nothing turns on this) thought that the 4^th plaintiff was owned and controlled by CKW, CLW and CYW when it was in fact owned by Doran Ltd which the father and the 1^st plaintiff controlled at the time and only later came to be controlled by CKW, CLW and CYW. The judge summed up the situation in 1985 as follows:

(1)	Lim Bee’s children were ousted from the family business in Hong Kong and were replaced by the 1st plaintiff’s sons; and
(2)	the 1st plaintiff’s sons together with the 1st plaintiff became the legal owners of 4/5ths of the family home for Lim Bee’s children but the de facto possession remained unchanged.

10. In the late 1980s, CLW and CKW assigned their respective interests in the property to the 2^nd and 3^rd plaintiffs, companies which they respectively controlled.

11. When the father and the 1^st plaintiff returned to live in Hong Kong in 1987, they did not move to live in the property; rather, they resided in a house in Shatin. The property remained as a home exclusively for Lim Bee’s children. By 1989, CPK, a sister of the 1^st defendant was the only person living in the property although the 1^st defendant who was still working in Singapore maintained a room which she used whenever she returned to Hong Kong. CPK accepted the father’s offer to buy her a flat in Repulse Bay and moved out of the property in 1990. Although a similar offer had been made to the 1^st defendant, she declined. When the father and the 1^st plaintiff moved into the property in 1990, the 1^st defendant who was still working in Singapore, continued to maintain a room there and used it whenever she was in Hong Kong. The father renewed his offer to purchase a flat for the 1^st defendant in 1995 but the 1^st defendant did not take it up.

12. CCC died in Singapore in 1995. On 27 November 1996, letters of administration were granted in Singapore to the 2^nd and 3^rd defendants who are his sons and the sole beneficiaries of his estate. They obtained a re-sealed grant of administration to CCC’s estate in Hong Kong on 11 October 2000.

13. The 1^st defendant returned from Singapore in 1996 and lived in the property with the father and the 1^st plaintiff. In May 1996, the father was diagnosed as suffering from a brain tumour. That affected his walking ability, obliging him to use a wheelchair whenever he went out. He and the 1^st plaintiff moved to a flat in Grenville House in late 1996. The judge found that he did so for health reasons and rejected the plaintiff’s case of constructive exclusion by the 1^st defendant particularly as the 1^st plaintiff who was in a position to give first hand evidence of the 1^st defendant’s alleged intolerable behaviour was never called to give evidence in support of the plaintiffs’ case. The father’s health continued to deteriorate. He had operations in January 1997, August 1998 and September 2000.

14. After her return to Hong Kong, the 1^st defendant began to suspect that she was being systematically excluded from the family business. When she complained to her father that her half siblings CKW and CLW were receiving higher salaries than herself, she was told that her salary included an element of rent-free accommodation in the property. Whilst there had been unhappy quarrels between the 1^st defendant and the family companies particularly in the second half of the 1990s, the judge found that there was no evidence to suggest that any of the plaintiffs or the father objected to the 1^st defendant’s occupation of the property.

15. In about 1999, the 1^st defendant had further complaints about various matters relating to the family business including a complaint concerning the receipt of salary by one of her half sisters from the family business without working for any of the family companies. Those disputes led to the issue of a notice to quit on 24 December 1999 by the 3^rd plaintiff on behalf of the plaintiffs (who were 4 out of 5 tenants in common) requiring her to vacate the property within 30 days “assuming that [the 1^st defendant] had been occupying the property as a licensee”.

16. The 1^st defendant and one of her sisters had a meeting with the father on 17 February 2000 in the presence of the 1^st plaintiff. The 1^st defendant produced a tape recording and a transcript of the conversation that took place during the meeting. The judge summarised the gist of that conversation at paragraph 45 of his judgment:

“When the 1^st Defendant asked if the Father knew about the action taken by the half-siblings to evict her from the Property, the Father said unequivocally that he did not know. He did not categorically tell the 1^st Defendant that he had revoked her licence or that what the half-siblings did was with his consent or words to that effect. … This evidence was not challenged by the Plaintiffs.”

17. Several events occurred on 31 May 2000. On that day, the father signed an affirmation to the effect that he had never granted any permission to the 1^st defendant to...