CHAN KIN MING AND ANOTHER v. CHAN KAM KAY

DCCJ5167/2009

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 5167 OF 2009

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BETWEEN
CHAN KIN MING 1st Plaintiff
KWAN SIU FONG 2nd Plaintiff
and
CHAN KAM KAY Defendant

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Before: Deputy District Judge Roy Yu in Chambers (Open to public)

Date of Hearing: 3 August 2010

Date of Ruling: 3 August 2010

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R U L I N G

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1. The Plaintiffs are husband and wife, and the Defendant is their son. The Defendant is the registered owner of Apartment A4, 8thFloor, Tin Shing Court, 32 Yuet Wah Street, Kowloon, Hong Kong (“the Trust Property”).

2. This is an application taken out by the Plaintiffs for a declaration that the Trust Property is jointly and beneficially owned bythe 1st and 2nd Plaintiffs, and for an order that the Defendant do convey the Trust Property to the Plaintiffs and for other reliefs. At today’s hearing, Mr Ngai, counsel for the Plaintiffs, confirms that all the other reliefs are abandoned, except for costs.

3. After the writ has been served on the Defendant, the Defendant filed an acknowledgement of service stating that he does not intendto contest the proceedings. As the Plaintiffs’ application includes a declaratory belief, they cannot apply for default judgmentunder Order 13. They have to proceed as if the Defendant had given notice of intention to defend (I refer to Order 13 rule 6).

4. No defence has been served by the Defendant within the prescribed time. The Plaintiffs took out this application before me today,under Order 19 rule 7, for judgment be entered against the Defendant for the said declaration that the Trust Property is beneficiallyowned by the Plaintiffs jointly, and an order that the Defendant do convey the Trust Property to the Plaintiffs jointly. In support,the 1st Plaintiff has filed an Affirmation on 16 July 2010.

5. Mr Ngai appeared for the Plaintiffs, and the Defendant was absent. Affirmations of service have been filed confirming that thewrit, this Summons and the supporting Affirmation of the 1st Plaintiff have been duly served on the Defendant. I proceed with theapplication on an ex parte basis.

6. According to the Affirmation of the 1st Plaintiff in early November 2007, the Plaintiffs decided to purchase the Trust Propertyfor investment purposes. Initially, they intended to hold the Trust property under their joint names. However, due to the bad healthof the 1st Plaintiff, they changed their plan. The Plaintiffs had an oral arrangement with the Defendant that the Defendant shallbe holding the Trust Property for the benefit of the 1st and 2nd Plaintiffs. The 1st Plaintiff confirmed that the arrangement wasnot a gift.

7. While all the conveyancing documents, including the provisional sale and purchase agreement and assignment of the Trust Propertywere signed and executed by the Defendant, all the purchase price, agency fees and solicitor charges had been paid by the Plaintiffs. The 1st Plaintiff exhibited in his Affirmation all the payment record.

8. The 1st Plaintiff further said in his Affirmation that after the Defendant got married in March 2009, their relationship deteriorated. The Plaintiffs demanded the Defendant to convey the Trust Property back to them, which the Defendant failed to do. Thus they tookout this writ.

9. According to the Affirmation of the 1st Plaintiff in February 2010, the Defendant had returned vacant possession of the Trust Propertyto the Plaintiffs. The Defendant also paid mense profit for using the Trust Property from April 2009 to January 2010. He had exhibiteda letter from the Defendant, dated 1 February 2010, confirming that the Defendant agreed to return the beneficial interest in theTrust Property to the Plaintiffs.

10. Mr Ngai, for the Plaintiffs, submitted that while it is not the normal practice of the Court to make a declaration in judgment byconsent or without a trial, this practice should only be followed when the claimant can obtain the fullest justice to which he isentitled to without such a declaration: He referred me to paragraph 19/7/14 and 19/7/20, Hong Kong Civil Procedure 2010.

11. Mr Ngai also referred me to the judgment of Chu J in Lam Shing Shou v. Lam Hon Man and Others HCA361/2001, reported on 13 July 2001. I only need to refer to paragraph 13 of the said judgment:

“In Patten v. Burke Publishing Co. Ltd … Millett J observed, at p.544A, that in the absence of a judgment reached after hearing evidence, a declaration can be based onlyon unproved allegations and that the Court ought not to declare as fact that which might not have proved to be such had facts beeninvestigated. Millett J, however, went on to point out that the rule referred to in Wallersteiner v. Moir is only a rule of practice. Although it should normally be followed, it should only be followed when the plaintiff can obtain thefullest justice to which he is entitled without the declaration he seeks.”

12. I agree with the judgment. With that in mind, I come to consider the application before me.

13. The 1st Plaintiff confirmed on oath that he never intended to give the Trust Property to the Defendant as a gift. There is no evidenceto contradict his evidence. And there is clear evidence that he and the 2nd Plaintiff jointly paid for all the consideration toacquire the Trust Property. In addition, the Defendant, in his letter, dated 1 February 2010, agreed to transfer the Trust Propertyback to the Plaintiffs. I accept his case and found that the Defendant is a trustee holding the Trust Property for the Plaintiffs.

14. Since the Trust Property is still registered under the name of the Defendant, the Plaintiffs could not assign the property unlessthe Defendant transferred the property back to them. There is evidence that the Defendant had formerly refused to execute documentto convey the Trust Property to the Plaintiffs. I agree with Mr Ngai that the declaration should be given.

15. I would grant judgment for the Plaintiffs in the following terms:

(Discussion with counsel)

“A declaration that the property known as ALL THAT one equal undivided 147th part or share of and in ALL THAT piece or parcel ofground registered in the Land Registry as KWUN TONG INLAND LOT NO. 393 and of and in the messuages erection and buildings thereonknown as TIN SHING COURT, no. 32 Yuet Wah Street Kowloon (“the Building”) and together with the sole and exclusive right andprivilege to hold use occupy and enjoy ALL THAT APARTMENT A4 on the 8TH FLOOR of BLOCK NO. A of the Building is beneficially ownedby the 1st and 2nd Plaintiffs jointly and the Defendant is holding the property in trust for the 1st and 2nd Plaintiffs.

16. I further grant an order that the Defendant do, within 14 days upon service of this order on him, convey the Trust Property to thePlaintiffs absolutely and for such purpose to sign and execute all necessary documents to convey and vest the beneficial interestof the Trust Property in the Plaintiffs jointly.

17. The Plaintiffs also asked for costs of the action, including costs of this application. I see no reason why they should not beentitled to their costs. I therefore award costs in favour of the Plaintiffs. The costs is assessed as a gross sum …

(Discussion with counsel)

… at $40,000.00.

(Roy Yu)
Deputy District Judge

Mr Lawrence Lung Kit Ngai, instructed by Lam Fung & Co., for the Plaintiffs

Defendant absent