HO LAI LEI AND ANOTHER v. MANG WAN KWAN SIMON AND ANOTHER

HO LAI LEI AND ANOTHER v. MANG WAN KWAN SIMON AND ANOTHER

There was an oral agreement in 2005 under which the Parents repaid mortgage instalments and acquired a beneficial interest; that agreement gave rise to a post‑acquisition common intention constructive trust; Madam Tse was a purchaser for value with notice (constructive notice by possession and surrounding circumstances) and by June 2011 had sufficient knowledge to be fixed with liability for knowing receipt; equitable compensation in lieu of restoration was awarded to the Parents and ordered to be paid jointly and severally by Mang and Madam Tse, with indemnity obligations allocated as between them.

Citation
[2020] HKCFI 527
Parties
1st Plaintiff: Ho Lai Lei; 2nd Plaintiff: Man Chap Shing; 1st Defendant: Mang Wan Kwan Simon; 2nd Defendant: Tse Yuk Chun
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
25 March 2020
Case Number
HCA2147/2015
Procedural Posture
Civil Action — Proprietary/equitable Claim (constructive Trust; Knowing Receipt) / Final Judgment (trial)
Outcome
Judgment for Plaintiffs: breach of constructive trust established against Mang and knowing‑receipt liability against Madam Tse; equitable compensation awarded to Plaintiffs; joint and several liability of Mang and Madam Tse; indemnity obligations against Mang
Legal Topics
Common Intention Constructive Trust, Post Acquisition Constructive Trust, Knowing Receipt, Bona Fide Purchaser, Constructive Notice, Equitable Compensation, Indemnity, Costs and Interest
Source Language
EN
Equity Trusts Property Law Family Law Civil Procedure Common Intention Constructive Trust Post Acquisition Constructive Trust Knowing Receipt +5 more

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Parties

Ho Lai Lei

1st Plaintiff

Man Chap Shing

2nd Plaintiff

Mang Wan Kwan Simon

1st Defendant

Tse Yuk Chun

2nd Defendant

Procedural Posture

Civil Action — Proprietary/equitable Claim (constructive Trust; Knowing Receipt) / Final Judgment (trial)

Legal Issues

  1. 1 Whether there was an oral agreement between the Parents and Mang in 2005
  2. 2 Whether that oral agreement gave rise to a common intention constructive trust over the property
  3. 3 Whether the oral agreement was made in the presence of or with knowledge by Madam Tse

Ratio Decidendi

There was an oral agreement in 2005 under which the Parents repaid mortgage instalments and acquired a beneficial interest; that agreement gave rise to a post‑acquisition common intention constructive trust; Madam Tse was a purchaser for value with notice (constructive notice by possession and surrounding circumstances) and by June 2011 had sufficient knowledge to be fixed with liability for knowing receipt; equitable compensation in lieu of restoration was awarded to the Parents and ordered to be paid jointly and severally by Mang and Madam Tse, with indemnity obligations allocated as between them.

Court Disposition

Judgment for Plaintiffs: breach of constructive trust established against Mang and knowing‑receipt liability against Madam Tse; equitable compensation awarded to Plaintiffs; joint and several liability of Mang and Madam Tse; indemnity obligations against Mang

Orders

  • Mang and Tse shall jointly and severally pay the sum of $1,107,670 to the Plaintiffs (the Parents)
  • There shall be interest on the sum at half the judgment rate from 16 June 2015 to the date of writ, and thereafter at judgment rate until payment