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Submitted by // K Bowers, Partner / Solicitor Advocate
22 August 2018


Ng Po Yu and Another v Lam Kai On [2018] HKCU 2335

Introduction

This is a case involving a family dispute over the ownership of a house ("House") which was left by the deceased ("Mother"), who had 3 sons from a previous marriage and a daughter, the 1st Plaintiff, from her second marriage to Mr. Ng ("Father"). The Mother left the House to her 3 sons (one of which was the Defendant) in a will.

In 1982, the Mother and Father ("Parents") set up a fabric wholesale business called Shun Lee Trading Co ("Shun Lee"), and held equal shares in Shun Lee as partners. Over the years, the Parents bought 6 properties held in either the sole name of the Father or the Mother.

During the 1990s, the 1st Plaintiff gave up her job to help the Parents with the running of Shun Lee. Among other transactions involving the Parents' properties, a mortgage was created over the House in May 1996 to secure banking facilities for Shun Lee. Over the years, multiple facilities and loans were taken out by the Father, the 1st Plaintiff, and Shun Lee. The House eventually became the only property left in the family.

After the Mother died during May 2012, the 1st Plaintiff applied for letters of administration. She then discovered the Mother's will.

Parties' respective cases

The 1st Plaintiff's case was three-fold:

- there was a general promise by the Parents which led to the 1st Plaintiff leaving her job to (i) help run the family business (ii) repay the mortgage, and (iii) maintain the Parents ("3 Conditions");

- the Mother had asked the 1st Plaintiff to perform the 3 Conditions on the express understanding that the House would be left to the 1st Plaintiff; and

- there was a common intention constructive trust which arose after the 1st Plaintiff assumed liability for repaying the mortgage on the House in return for the Mother's agreement to leave her the interest in the House.

The Defendant pointed out that the ownership of the House was in the Mother's sole name, and asserted that he had also helped run (for no pay) the Mother's business between 1970 – 1980 and that the bank loans were taken out wholly or partly for the personal use of the Father and the 1st Plaintiff. The Defendant also claimed that the 1st Plaintiff had provided maintenance and had repaid the mortgage on the House in discharge of her filial duties, and not in exchange for the House.

Findings

In assessing whether a constructive trust had been created, the starting point is that beneficial interest follows the legal title. The burden of proof in establishing that there was a constructive trust fell on the 1st Plaintiff. The principles for a common intention constructive trust are that there must be:-

a) a common intention between the parties that one party was to be the beneficial owner of a property despite the fact that the property was acquired in another's name;

b) the claiming party had altered its position in detrimental reliance upon such a common intention; and

c) it is therefore unconscionable for the legal owner to assert ownership in reliance on his/her legal title to the property.

In relation to the 1st Plaintiff leaving her job to perform the 3 Conditions, the Court found that the 1st Plaintiff had received significant benefits at the beginning of her career working for the family business. In evidence, the 1st Plaintiff also stated that she had acquired shares in some of the family business. As such, she had suffered no real detriment. The Court did not find any incentive on the part of the Parents to make a general promise. Without any concrete evidence of intention, the Court found that the facts and evidence did not support the 1st Plaintiff's case.

It is worth pointing out however that although the 1st Plaintiff's case in constructive trust failed, the Court found that the 1st Plaintiff's money was the source of the repayment of the mortgage on the House and that these repayments had not been made out of filial duties. As such, the Court held that the Mother's estate should reimburse 3/4 of the mortgage repayments made by the 1st Plaintiff. The monetary judgment for repayment was charged on the House until full payment by the Mother's estate.

Comment

It is important for family members to ensure that interests in property and other family-owned assets are recorded in writing (and preferably witnessed), so that there is 'hard' documentary evidence of any conflicting interests to prefer any family member over another – the alternative (in disputed cases) is an expensive, long-drawn out court process which can (and does) cause permanent damage to family relationships.


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

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Submitted by // J Wong, Partner
21 August 2018


"Bitcoin, Blockchain and ICOs : Brave New World or Wild Wild West" 

Please click here for a printable PDF version.


About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

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Submitted by // K Bowers, Partner / Solicitor Advocate
05 July 2018


Dr. Chan Hin Keung Henry v Apple Daily Ltd and Others [2018] HKDC 219

This recent District Court judgment revisits the applicable legal principles concerning libel  and considers the application of the Reynolds defence for journalists.

Background Facts

During November 2012, Apple Daily published a full-page report concerning a possible pyramid scheme in Hong Kong.

The report contained a number of articles, amongst which one suggested that a local company was promoting a pyramid scheme; another mentioned that there were a number of possibly related companies registered under similar names and at the same address, and that the Plaintiff was a shareholder and director of one of the named companies; and a third article contained generic commentary outlining the features of a pyramid scheme.

The Plaintiff was then the President of the Chiropractors Association.  He issued proceedings against Apple Daily, alleging that that the article which named him was libellous of him when viewed together with the other articles in the same report.

Issues at trial

The case at trial focused on two main issues; firstly, whether the Court would attribute a defamatory meaning to the articles insofar as the Plaintiff was concerned; and secondly, if the Court were to ascribe a defamatory meaning to the articles, whether the Defendant could invoke the defence of Reynolds privilege.

After trial, the Court dismissed the Plaintiff's claim by finding that (1) the article was defamatory of the Plaintiff; but that (2) the Defendant was able successfully to rely on Reynolds privilege as a defence to the publication of the article.

Determining the meaning of the article

The Court considered the natural and ordinary meaning of the article which specifically identified the Plaintiff in order to decide whether it was defamatory of him.  It took a holistic view of the whole report and considered the inferences readers would draw, and held that it was "entirely plausible" for a reasonable reader to gain the impression that there was a connection between the Plaintiff and the pyramid scheme.

In the Court's analysis, readers could have attributed a number of meanings to the articles (when read together) including the following:-

i) the Plaintiff knowingly participated in the pyramid scheme (this was the defamatory meaning as pleaded by the Plaintiff) ("Level One Meaning");

ii) there were reasonable grounds to suspect such participation ("Level Two Meaning");

iii) there were grounds to investigate if there was such participation ("Level Three Meaning"); or

iv) there was no culpable connection between the Plaintiff and the pyramid scheme ("Level Four Meaning").

The Court decided that the "Level Two Meaning" was the right meaning as the article contained reasonable grounds for one to suspect that there was a "nefarious connection" between the Plaintiff and the pyramid scheme and that he knowingly participated in it. The article was therefore found to be libellous of the Plaintiff.

Reynolds privilege - a balancing exercise by the Court

Having established the defamatory nature of the article, the Court had to consider whether the Defendant could rely on the defence of Reynolds privilege. In order for Reynolds privilege to be successfully invoked, the Court had to consider whether:-

i) the subject-matter of the publication was of sufficient public interest;

ii) it was justifiable to include the particular material complained of; and

iii) the publisher had met the standards of responsible journalism.

Application of Reynolds privilege to the present case

The Court undertook a balancing exercise and considered the reasonableness of the Defendant's conduct in including the defamatory statement in the article. The Defendant's reference to the Plaintiff was found to be justifiable because:-

i) the emergence and existence of pyramid schemes was a matter of public interest, and so was the identity of persons who may be involved in such schemes in Hong Kong;

ii) it was part of the story for the Defendant to explain the nature of pyramid schemes and disclosing connected persons ; and

iii) references to the Plaintiff in the article were made in a "balanced and matter-of-fact fashion".

Although the Defendant's news editor and reporter were found not to have verified the defamatory statements made about the Plaintiff in the articles, they were found to have presented facts in an objective manner. It was therefore held that they had conducted themselves as responsible journalists.  Based on this finding, the Defendant was found to have successfully invoked the Reynolds defence, and the Plaintiff's claim was dismissed.

Commentary

This case is a good illustration of the Court's balancing exercise between public interest and a subject person's interest in the context of responsible journalism.

Journalists should take note from this Judgment that the applicability of the Reynolds defence is a delicate balancing exercise with responsible journalism and fair reposting on matters of public interest at its heart.

 

About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice.  Please contact pr@hwbhk.com if you have any questions about the article.

 
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Submitted by // K Bowers, Partner / Solicitor Advocate
04 July 2018


Levy Collection under Property Management Services Ordinance (Cap. 626)

Background

This Alert is a follow-up to HWB's January 2017 Property and Building Management Law Alert. To briefly recap, the Property Management Services Ordinance ("Ordinance") was passed during May 2017 to monitor the operation of property management companies ("PMCs") and practitioners.

The main changes brought about by the enactment of the Ordinance include (among other things) the establishment of the Property Management Services Authority ("PMSA") and a new 'licencing' system for PMCs. These changes were implemented to assist PMCs achieve an appropriate industry standard, given the trend of the professionalization of property management services.

Part 8 of the Ordinance

Part 8 of the Ordinance and the Property Management Services (Levy) Regulation came into operation on 1 July 2018.

This part of the Ordinance refers to a levy which is payable for each leviable instrument. A leviable instrument is a conveyance on sale chargeable with stamp duty. Generally, the purchaser or the transferee is liable to pay the levy. Any person with a vested interest in the immovable property should have the obligation to pay the levy. In situations where there is more than one transferee, they are jointly and severally liable to pay the levy.

Levy and consequence of late payment

The levy payable for a leviable instrument is fixed at HK$350, to be paid within 30 days after the instrument is executed. The levy will be collected on behalf of the PMSA by the Stamp Office of the Inland Revenue Department, when stamp duty is submitted for stamping.

Non-payment or late payment of the levy will attract penalties under sections 57 and 58 of the Ordinance. The penalty is two times the levy payable if late payment is made within one month of the deadline; four times the levy payable for non-payment / late payment of not more than two months from the deadline. If the outstanding levy is not settled within four months of the deadline, the PMSA can register a Certificate in the Land Registry against any premises or land in respect of which the levy and penalty arose in accordance with section 59 of the Ordinance.

Upon registration of the Certificate, the levy and penalty are recoverable from a person who appears from the Land Register to be the owner of the premises or land. The Certificate also constitutes a legal charge on the premises or land. A properly registered Certificate has priority starting from the day after the date of its registration. The PMSA may also recover the outstanding amount of any levy or penalty payable as a civil debt under section 60 of the Ordinance.

Exemptions

Under the Property Management Services (Levy) Regulation, a person is not liable to pay a levy under Part 8 of the Ordinance if that person is not liable to pay stamp duty in respect of a leviable instrument under sections 41 or 41(3) of the Stamp Duty Ordinance.

Accordingly, the government and any incorporated public officer or person acting in his capacity as a public officer shall not be liable for payment of a levy under Part 8 of the Ordinance. This exemption does not apply to any public officer acting in his capacity as Official Administrator, Official Receiver, Official Trustee or liquidator, or any public officer acting under any Order of any Court.

With the first of many key sections of the Ordinance coming into operation, building managers should keep themselves updated as to any guidelines issued by the PMSA to ensure they stay on top of the changes.
 

About Us

Howse Williams Bowers is an independent law firm which combines the in-depth experience of its lawyers with a forward thinking approach.

Our key practice areas are corporate/commercial and corporate finance; commercial and maritime dispute resolution; clinical negligence and healthcare; insurance, personal injury and professional indemnity insurance; employment; family and matrimonial; property and building management; banking; financial services/corporate regulatory and compliance.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of international business and business in Asia.

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