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HCA 713/2014
[2019] HKCFI 1971
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO 713 OF 2014
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BETWEEN
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LEUNG SIU MAN |
1st Plaintiff |
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LEUNG SIU YEE |
2nd Plaintiff |
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LEUNG YIU CHEONG |
3rd Plaintiff |
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LEUNG SIU MEI |
4th Plaintiff |
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and
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LEUNG YIU TAI |
Defendant |
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Before: Hon Ng J in Court
Dates of Hearing: 28 - 30 November, 3 and 14 December 2018
Date of Judgment: 16 August 2019
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J U D G M E N T
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I. Introduction
1. This is one of those cases in which all the parties are siblings. The 3rd Plaintiff, born in 1958, is the eldest of the 5. The 2nd Plaintiff, the 1st Plaintiff, the Defendant and the 4th Plaintiff were born in 1959, 1961, 1963 and 1965 respectively. Their father passed away when the parties were very young[1] and they were brought up by their mother (“Mother”) single‑handedly. Mother is now 86 years old. It is unfortunate that Mother, who testified for the Plaintiffs, was in effect being accused by the Defendant of lying and being biased towards the Plaintiffs.
2. In a nutshell, the present action, commenced on 16 April 2014, concerns the parties’ beneficial interests in a residential property situated at Flat B, 9/F, Block D, Sai Kung Town Centre, Sai Kung, New Territories (“Property”). According to the land search record, the sale and purchase agreement was entered into on 30 September 1986 between the 1st Plaintiff, the 2nd Plaintiff and the Defendant as purchasers and the developer. The purchase price was agreed at HK$429,970 (“Purchase Price”). On 24 April 1987, the Property was assigned to and registered in the name of the 1st Plaintiff, the 2nd Plaintiff, and the Defendant as joint tenants. The purchase was financed by a loan of HK$343,000 (“Loan”) from Kwangtung Provincial Bank (“Bank”) and secured by a legal charge dated 24 April 1987 in favour of the Bank. The Loan was fully repaid in May 1999 and the legal charge was subsequently discharged.
3. Although the Purchase Price was stated to be HK$429,970, the amount actually paid towards the purchase of the Property was slightly more. This is because after having paid the 20% deposit and down payment, the 1st Plaintiff had, between October 1986 and March 1987, also paid 6 monthly instalments of HK$4,357.35 to the developer at its request in the total sum of HK$26,144.10. Most of the sum paid was allocated by the developer towards the payment of so‑called “interest”, the basis of which was actually unclear, with less than HK$1,000 counted towards payment of the Purchase Price. Hence, by the time of the assignment of the Property in April 1987, the amount of the Loan required for completion was still almost 80% of the purchase price.
4. In the Re‑Amended Statement of Claim (“RASOC”), the Plaintiffs claim against the Defendant for the following reliefs:
(1) A declaration that the 1st Plaintiff, the 2nd Plaintiff and the Defendant hold the Property on constructive and/or resulting trust respectively in the proportions of 35.71% for the 1st Plaintiff, 22.39% for the 2nd Plaintiff, 20.95% for the 3rd Plaintiff, 10.47% for the 4th Plaintiff and 10.47% for the Defendant.
(2) A declaration that the 1st, 2nd, 3rd and the 4th Plaintiffs and the Defendant are equitable tenants in common of the Property.
(3) An order for sale of the Property pursuant to Section 6 of the Partition Ordinance, Cap 352.
(4) Occupation rent and/or compensation for the Defendant’s use and occupation of the Property from 1993 to 2016 in the sum of HK$2,181,600; further or in the alternative, an account or inquiry as to what sums are due to the Plaintiffs from the Defendant by way of rent, compensation for use and occupation, profits and/or any other income arising or derived from the Property.
5. On the other hand, the Defendant, in his Re‑Amended Defence and Counterclaim (“RADNC”), disputes the Plaintiffs’ claims and counterclaims for a declaration that the 1st Plaintiff, the 2nd Plaintiff and him are the only “true” owners of the Property and jointly hold it in equal shares. The Defendant, however, does not oppose the sale of the Property but claims 1/3 of its sale proceeds.
II. The Parties’ respective cases
The Plaintiffs’ case
6. The Plaintiffs’ case is that prior to the purchase of the Property, Mother and the 5 siblings lived together in a very small flat within a public housing estate in Tsz Wan Shan. In around August 1986, the 1st Plaintiff saw an advertisement in the newspapers that units in Sai Kung Town Centre were up for sale. After viewing the units for sale, the 1st Plaintiff became interested in buying one but could not afford it on her own. At that time, the 1st Plaintiff was 25 and earned about HK$4,000 a month as a clothing merchandiser. She therefore discussed the matter with her other siblings. After some detailed discussions, the 5 of them decided to purchase the Property together.
7. It is the Plaintiffs’ case that in September 1986, the 5 siblings formed the express common intention (“Common Intention”) that they would acquire the Property as beneficial owners in accordance with their oral agreement (“1986 Agreement”), the material terms of which were:
(1) The 5 siblings would purchase the Property together.
(2) The 1st Plaintiff, the 2nd Plaintiff and the Defendant would become the legal owners of the Property and hold it for the 5 of them — their specific shares of the Property would be determined in accordance with their respective financial contributions towards the purchase.
(3) The 1st and 2nd Plaintiffs would pay 20% of the Purchase Price by way of initial deposit and down payment. The remaining 80% would be financed by a mortgage loan. The mortgage loan would be repaid by the 5 siblings in proportion having regard to each of their age, job and salary. The proportion agreed was that the 1st Plaintiff, the 2nd Plaintiff and the 3rd Plaintiff would each be responsible for 25% while the 4th Plaintiff and the Defendant would each be responsible for 12.5%.
8. At that time, the 5 siblings were in their 20s and did not earn a great deal. The agreed financial contribution to the mortgage loan was arrived at after taking into account of their age, occupation and earnings as follows:
(1) The 1st Plaintiff — 25 years old with a monthly income of around HK$4,000 as a clothing merchandiser.
(2) The 2nd Plaintiff — 27 years old with a monthly income of around HK$5,000 as a garment quality controller.
(3) The 3rd Plaintiff — 28 years old with a monthly income of around HK$5,500 as an engineer.
(4) The 4th Plaintiff — 21 years old with a monthly income of around HK$1,800 as an accounts clerk.
(5) The Defendant — 23 years old with a monthly income of around HK2,450 (according to his witness statement) or HK$3,371 (according to the RADNC) as a technician.
9. Since the 1stto the 3rd Plaintiffs were older and earned more than the other two, it was agreed that they would bear a greater proportion of financial contributions towards the purchase:
(1) The 1st Plaintiff paid the initial deposit of HK$5,000 in cash to the 4th Plaintiff who then made the payment by cheque.
(2) The 1st and 2nd Plaintiffs paid the down payment of HK$80,994 in cash to the 4th Plaintiff who then made the payment by cheque. Out of the HK$80,994, the 1st Plaintiff contributed HK$70,994 while the 2nd Plaintiff contributed HK$10,000.
(3) Between October 1986 and March 1987, the 1st Plaintiff paid the first 6 instalments mentioned earlier in cash to the 4th Plaintiff who issued cheques in the total amount of HK$26,144.10.
10. With regard to the Loan, the monthly instalments were around HK$4,000. It is not in dispute that the Plaintiffs and the Defendant had agreed to leave the mortgage repayments for Mother to deal with. Out of convenience, from May 1987 to May 1999, Mother would each month collect HK$4,000 from the Plaintiffs and the Defendant as follows and paid the same into the joint account of the 1st and 2nd Plaintiffs (“Joint Account”) for the purpose of making the monthly repayment to the Bank:
| 1st Plaintiff (25%) |
HK$1,000 |
| 2nd Plaintiff (25%) |
HK$1,000 |
| 3rd Plaintiff (25%) |
HK$1,000 |
| 4th Plaintiff (12.5%) |
HK$500 |
| Defendant (12.5%) |
HK$500 |
11. On the Plaintiffs’ calculation, the total financial contributions by the 5 siblings towards the purchase of the Property were as follows:
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1st Plaintiff
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2nd Plaintiff
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3rd Plaintiff
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4th Plaintiff
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Defendant
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Deposit |
$5,000 |
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Down payment |
$70,994 |
$10,000 |
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First 6 monthly payments towards purchase price |
$26,144.10 |
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Mortgage installments
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$145,000 ($1,000 x 145 months) |
$145,000 ($1,000 x 145 months) |
$145,000 ($1,000 x 145 months) |
$72,500 ($500 x 145 months) |
$72,500 ($500 x 145 months) |
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Total contribution (HK$)
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$247,138.10
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$155,000
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$145,000
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$72,500
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$72,500
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Total contribution
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35.71%
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22.39%
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20.95%
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10.47%
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10.47%
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12. As noted earlier, the Plaintiffs claim against the Defendant for a declaration that the 1st Plaintiff, the 2nd Plaintiff and the Defendant hold the Property on trust for the 5 of them in the above percentages.
13. It is further the Plaintiffs’ case that in reliance on the Common Intention and the 1986 Agreement, the Plaintiffs, but not the Defendant, had paid for inter alia the following expenses over the years:
(1) Renovation expenses for the Property of HK$90,690 in around 1987‑1988.
(2) Electrical appliances expenses of HK$21,991 in around 1987‑1988.
(3) Management fees and miscellaneous expenses in respect of the Property from...
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