OSMAN MOHAMMED ARAB AND ANOTHER v. LAM YING LUNG, ALAN

OSMAN MOHAMMED ARAB AND ANOTHER v. LAM YING LUNG, ALAN

On the balance of the contemporaneous documents, pattern of family payments, tax returns, and surrounding circumstances the Judge found the Father intended in October 1996 to make a gift of the property to the Bankrupt or to benefit the Bankrupt (so the Bankrupt was the beneficial owner). Accordingly the Declaration of Trust (29 May 2009) and Vesting Assignment (1 Dec 2009) were transactions at an undervalue and/or unfair preferences and/or voidable dispositions under s60 CPO. The court exercised its wide remedial discretion under ss49(2),50(2) and 51A(1) BO to vest the property in the Trustees as part of the Bankrupt's estate, subject to repayment in priority to the Father of the sum he...

Citation
OSMAN MOHAMMED ARAB AND ANOTHER v. LAM YING LUNG, ALAN
Parties
Plaintiff (joint Trustee): Osman Mohammed Arab; Plaintiff (joint Trustee): Wong Tak Man, Stephen; Defendant (personal Representative of Estate of Lam Sai Ching, Deceased): Lam Ying Lung, Alan
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
29 July 2016
Case Number
HCA653/2011
Procedural Posture
Bankruptcy and Trust/property Dispute / Judgment at First Instance (court of First Instance)
Outcome
Judgment for the Plaintiffs (Trustees). Property vested in the Trustees as part of the Bankrupt's estate with limited priority payment to Father; costs ordered nisi against Father.
Legal Topics
Transaction at Undervalue, Unfair Preference, Fraudulent Disposition, Resulting Trust, Presumption of Advancement, Subrogation and Merger, Declaration of Trust, Vesting Assignment
Source Language
EN
Bankruptcy Trusts and Equitable Remedies Property Law Conveyancing Insolvency Law Evidence Transaction at Undervalue Unfair Preference +6 more

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Parties

Osman Mohammed Arab

Plaintiff (joint Trustee)

Wong Tak Man, Stephen

Plaintiff (joint Trustee)

Lam Ying Lung, Alan

Defendant (personal Representative of Estate of Lam Sai Ching, Deceased)

Procedural Posture

Bankruptcy and Trust/property Dispute / Judgment at First Instance (court of First Instance)

Legal Issues

  1. 1 Whether at time of purchase (Oct 1996) Father intended to gift property to son (Bankrupt) or to retain beneficial ownership (trust for Father)
  2. 2 Whether Declaration of Trust (29 May 2009) and Vesting Assignment (1 Dec 2009) are voidable under s60 CPO, s49 BO (transaction at undervalue) or s50 BO (unfair preference)
  3. 3 Proper weight of contemporaneous documents and subsequent conduct as evidence of intention

Ratio Decidendi

On the balance of the contemporaneous documents, pattern of family payments, tax returns, and surrounding circumstances the Judge found the Father intended in October 1996 to make a gift of the property to the Bankrupt or to benefit the Bankrupt (so the Bankrupt was the beneficial owner). Accordingly the Declaration of Trust (29 May 2009) and Vesting Assignment (1 Dec 2009) were transactions at an undervalue and/or unfair preferences and/or voidable dispositions under s60 CPO. The court exercised its wide remedial discretion under ss49(2),50(2) and 51A(1) BO to vest the property in the Trustees as part of the Bankrupt's estate, subject to repayment in priority to the Father of the sum he...

Court Disposition

Judgment for the Plaintiffs (Trustees). Property vested in the Trustees as part of the Bankrupt's estate with limited priority payment to Father; costs ordered nisi against Father.

Orders

  • Property (Flat B2, 24/F, Rhine Court, 80 Bonham Road, Hong Kong) to be vested in the Trustees as part of the Bankrupt's estate pursuant to ss49(2), 50(2) and 51A(1) Bankruptcy Ordinance, Cap 6
  • Trustees upon sale of the property to first pay to the Father the sum of 1148438.13 HKD (sum paid by Father to discharge DBS mortgage on 27 Nov 2009) in priority to the creditors