FACV No.

1 of 2021

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION
FINAL APPEAL NO. 1 OF 2021 (CIVIL)
(ON APPEAL FROM CACV NO. 107 OF 2017)

BETWEEN

CHEUNG LAI MUI (張麗梅), Plaintiff

the executrix of the estate of (Appellant)
CHEUNG PING KAU and
the administratrix of the estate of
CHEUNG PING FUK
(alias CHEUNG BING FUK)

and

CHEUNG WAI SHING (張偉城) 1st Defendant

(1st Respondent)
CHEUNG WAI MIN (張偉冕) 2nd Defendant
(2nd Respondent)
CHEUNG CHI YUNG (張智勇) 3rd Defendant
(3rd Respondent)

CASE FOR THE APPELLANT

[A/…/…] = [Part A of the Record/Item/Page]

A. INTRODUCTION

1
1. This is the Appellant’s appeal to the Court of Final Appeal (“CFA”)
against the judgment of the Court of Appeal (“CA”) handed down
on 5 March 2020 (“the CA Judgment”) [A/4/50-112].

2. Leave to appeal to the CFA was granted to the Appellant: 1

(1) On the basis that the following questions are reasonably

arguable and of the requisite general or public importance:

Question 1

“Whether there can be proprietary estoppel arising

from an oral promise relating to interest in land
binding on the estate of the promisor in the absence of
any or any reasonable detrimental reliance by the
promisee prior to the death of the promisor; and in
such case whether detrimental reliance of the promisee
only after the death of the promisor can give rise to
proprietary estoppel against the estate of the deceased
promisor overriding the interest of the successors or
beneficiaries to the estate?” (“Question 1”)

Question 2

“Whether a co-owner in sole occupation of land, in

cases other than partition or ouster and in the absence
of agreement, should be ordered to account to the other

1
§1 of the Order dated 14 December 2020 [A/8/141-142]. See also §§13-14 of the Reasons
for Determination dated 18 December 2020 [A/9/150-151].

2
 co-owners for occupation rent. Alternatively, whether
the proposition of law in Re Pavlou (A Bankrupt)
[1993] 1 WLR 1046 at 1050D that ‘a court of equity
will order an inquiry and payment of occupation rent
even if there is no ouster when it is necessary to do so
to do equity between the parties’ should be confined
to partition or analogous proceedings?” (“Question
2”)

(2) On the “or otherwise” basis in respect of the correctness of

the decisions of the Courts below regarding the Plaintiff’s
claims based on common intention constructive trust and
estoppel by acquiescence.

B. THE RELEVANT FACTUAL BACKGROUND

3. The factual background and the parties’ respective case are

summarised in §§2.1 to 3.7 of the CA Judgment [A/4/66-72] and
§§2 to 4 of the Reasons for Determination of the Appeal Committee
dated 18 December 2020 (“the Reasons for Determination”)
[A/9/146]. For the purpose of this appeal, the following facts are
material:

(1) Cheung Ping Wan (“Wan”), Cheung Ping Kau (“Kau”) and
Cheung Pink Fuk (“Fuk”) were the registered owners of Lot
No. 1101 in Demarcation District 221 (“the Disputed

3
 Land”) each holding one-third equal and undivided shares.
The three of them treated each other as brothers.2

(2) Fuk passed away intestate sometime in 1991 or 1992. Letters

of administration of Fuk’s estate were granted to the
Appellant on 9 May 2006. 3

(3) The Appellant is Kau’s adopted daughter. In 1997, Kau

passed away. Probate of Kau’s will was granted to the
Appellant on 27 October 1998. 4

(4) The 1st and 2nd Defendants (“D1” and “D2” respectively) are
the son and daughter of Wan, and the 3rd Defendant (“D3”)
is the son of D1. In 1999, Wan passed away and D1 became
the executor of his estate. 5

(5) In 2002 and 2003, D3 constructed certain buildings on the

Disputed Land. Since 2002/2003, D3 and his family have
lived in and occupied the two structures, together with the
garden and other facilities on the Disputed Land.6

(6) The Appellant, D1 and D2 are also joint owners of Lot 774
in DD 221 (including a house erected thereon “House 774”).
The Appellant has lived and still lives in House 774.7

2
§§2.1 and 2.2 of the CA Judgment [A/4/66-67].
3
§2.3 of the CA Judgment [A/4/67].
4
§2.3 of the CA Judgment [A/4/67].
5
§2.4 of the CA Judgment [A/4/67-68].
6
§§3.3 and 6.25 of the CA Judgment [A/4/70, 89].
7
§§2.8 and 3.5 of the CA Judgment [A/4/68, 70].

4
C. THE PROCEEDINGS IN THE COURTS BELOW

4. The Appellant claims that the Defendants have without her

knowledge and consent erected two large unauthorised structures
on the Disputed Land and seeks to have the structures removed.
D3’s defence is that he is the sole beneficial owner of the Disputed
Land as a result of common intention constructive trust, proprietary
estoppel and estoppel by silence. D1 and D2 have counterclaimed
against the Appellant for an account for one-third of the rental
income of House 774 which is under the ownership of the
Appellant, D1 and D2. 8

C.1 The Court of First Instance

5. In his judgment dated 10 April 2017 (“the CFI Judgment”)

[A/2/5-44], Wilson Chan J found as a fact that (1) there was a
common understanding (“the Common Understanding”) and/or
assurance that D3 should become the sole owner of the Disputed
Land and that he could use it as his home, and (2) the Common
Understanding was discussed and mentioned on various occasions
from 1978 to 1996.9

6. The trial judge also concluded that:

(1) P had stood by when D3 carried out works on the Disputed

Land and was estopped from complaining; 10 and

8
§§2.6-2.8 of the CA Judgment [A/4/68].
9
§99 of the CFI Judgment [A/2/35-36].
10
§§100-103 of the CFI Judgment [A/2/36-38].

5
 (2) D3 had demonstrated factual possession of the Disputed
Land and the requisite animus possidendi for over 12 years.11

7. His Lordship then dismissed the Appellant’s claim and, inter alia,
(1) declared D3 to be the sole beneficial owner of the Disputed
Land, (2) declared the Appellant to be a constructive trustee holding
2/3 interest in the Disputed Land for D3, and (3) ordered the
Appellant to give an account and payment to D1 and D2 of 1/3 of
the rental income in respect of the 1st and 2nd floors of House 774
and the mesne profits in respect of the ground floor of House 774,
both from 1997 onwards.12

C.2 The Court of Appeal

8. The Appellant appealed against the CFI Judgment. The CA came

to the following conclusions in respect of following issues:

(1) Common intention constructive trust:

A claim based on constructive trust cannot succeed if there

was no detrimental reliance on the common intention on the
part of the party seeking a beneficial interest by the time of
death of the legal owner(s). 13 However, no specific findings
were made by the trial judge as to whether there was any
detrimental reliance of D3 prior to the death of the three legal

11
§§104-109 of the CFI Judgment [A/2/38-40].
12
§§116-117 of the CFI Judgment [A/2/42-43].
13
§§1.3, 1.6, 6.35 and 9 of the CA Judgment [A/4/52, 53, 93-94, 111].

6
 owners, and the matter should be remitted to the trial judge
to make additional findings. 14

(2) Proprietary estoppel:

(a) To assess whether there was detrimental reliance on

the promise or assurance, it is necessary to look at the
whole chronology of events from the communication
of the promise or assurance to the time when the
plaintiff commenced proceedings, and the “cut-off”
date should not be the time of demise of the person(s)
who made the promise or assurance.15

(b) However, the trial judge did not consider (i) whether
it was reasonable for D3 to rely on the promise or
assurance of the three brothers (Wan, Kau and Fuk)
when the two structures were built on the Disputed
Land in 2002 and 2003 after their demise;16 (ii) other
matters which the court should take into account in
deciding if there was reasonable reliance by D3 after
the demise of the three brothers; 17 and (iii) the
question of relief.18 These matters should be remitted
to the trial judge for determination.19

14
§§1.8-1.9, 1.44, 6.35 and 9 of the CA Judgment [A/4/54, 66, 93-94, 111].
15
§§1.13, 1.20, 1.21, 1.24 and 9 of the CA Judgment [A/4/55, 57-60, 111].
16
§§1.31 and 9 of the CA Judgment [A/4/62, 111].
17
§§1.33 and 9 of the CA Judgment [A/4/63, 111].
18
§§1.36, 6.41 and 9 of the CA Judgment [A/4/63, 97, 111].
19
§§1.44 and 9 of the CA Judgment [A/4/66, 111].

7
 (3) Estoppel by acquiescence and by silence: D3’s claim on
proprietary estoppel should be upheld and it was unnecessary
to consider these estoppels. 20 But the CFI will need to
consider these estoppels if D3 fails on the remitted issues.21

(4) Adverse possession: D3’s claim cannot succeed in the light

of the finding of the Common Understanding and the consent
given by the three brothers to D3 to use and occupy the
Disputed Land. 22

(5) Account:

(a) The court should order an inquiry and payment of

occupation rent even if there is no ouster by one co-
owner against another. 23

(b) However, the expenses on rebuilding House 774 had

not been taken into account by the trial judge in
ordering an account and the matter should be remitted
to the CFI for determination.24

(6) The CA set aside the CFI Judgment, remitted issues relating
to common intention constructive trust, proprietary estoppel
and account to the trial judge “for determination in
accordance with the legal analysis set out” in the CA

20
§§1.35 and 9 of the CA Judgment [A/4/63, 111].
21
§§1.1 and 6.40 of the CA Judgment [A/4/51, 96].
22
§§1.39, 6.64, 6.66 and 9 of the CA Judgment [A/4/217, 260-261, 264].
23
§§1.43 and 9 of the CA Judgment [A/4/66, 111].
24
§§1.41, 1.44 and 9 of the CA Judgment [A/4/65, 66, 111].

8
 Judgment, and stated that other than those remitted issues,
the findings of the trial judge in the CFI Judgment are not to
be disturbed.25

9. The Appellant then applied to the CA for leave to appeal to the CFA
on the ground that the appeal raises questions of great general or
public importance. The two questions are those set out in §2(1)
above. By a Decision dated 3 July 2020 (“the CA Decision”)
[A/6/118-121], the CA held that the two questions of law are prime
facie reasonably arguable for the purpose of granting leave to
appeal. However, no leave was granted. The CA said:

“… since the Court below has to rehear issues that we have

directed, it would be more appropriate as a matter of case
management and following the approach of Chee Fei Ming
v. Director of Food and Environmental Hygiene (2017) 20
HKCFAR 64 to adjourn the application sine die with liberty
to the parties to restore it for hearing, if so advised, in the
light of the decision of the rehearing. …” 26

C.3 The Appeal Committee

10. The Appellant filed her Notice of Application for Leave to Appeal
to the CFA on 31 July 2020 [A/7/122-139]. The Defendants’
position was that since the CA had not refused leave but merely
adjourned the application sine die pending determination of the

25
§§1.44 and 8-10 of the CA Judgment [A/4/66, 111-112].
26
§1.2 of the CA Decision [A/6/120]. The Appeal Committee criticised this as an “unorthodox
approach”: see §9 of the Reasons for Determination [A/6/149].

9
 remitter, the Appeal Committee lacked jurisdiction to entertain the
application. 27

11. The Appeal Committee rejected the Defendants’ argument and held
that the CA’s decision to adjourn the application sine die
constituted a refusal sufficient to confer jurisdiction on the Appeal
Committee. 28

12. Further, the Appeal Committee made the following observations in

respect of the CA’s remitter Order29:

‘7. That Order is unusual in that the remitted questions

do not consist merely of questions of fact but raise
legal issues (determining a cut-off date regarding
detrimental reliance; deciding what relief is
appropriate; ascertaining P’s capacity to sue co-
owners; and deciding whether D1 and D2 are entitled
to relief) as well as evaluative judgments of mixed fact
and law (regarding the adequacy of detrimental
reliance and the reasonableness of any reliance). One
might have expected such questions to be determined
by the Court of Appeal either definitively, if the facts
had been found, or in principle, if not, remitting
questions of fact to the Judge only in so far as
necessary. Indeed, the legal principles underlying the
remitted questions appear to have been decided by the

27
§11 of the Reasons for Determination [A/9/150].
28
§12 of the Reasons for Determination [A/9/150].
29
§6 of the Reasons for Determination [A/9/150].

10
 Court of Appeal and the Judge was directed to
determine the remitted questions “in accordance with
[the Court of Appeal’s] legal analysis”.

13. … We do not think, with respect, that the approach

adopted by the Court of Appeal in the present case was
appropriate. Questions of law and evaluative
questions of mixed law and fact ought not to have been
remitted back to the Judge. The points of legal
principle ought to have been determined and, only if
necessary and only if it could be done without
procedural unfairness, should the Court have remitted
any outstanding questions of fact. Referring legal
issues back to the Judge while at the same time
directing him to determine them in accordance with
the Court of Appeal’s legal analysis was confusing. It
also gave rise to the possibility of a further appeal to
the Court of Appeal on a point of law arising from the
Judge’s decisions on the remitter. Moreover if, after
having gone through the remitter exercise, the case
were to proceed to the Court of Final Appeal where a
view differing from the legal analysis of the Court of
Appeal was taken, the basis and value of the remitter
might be put in doubt. In these circumstances, our
decision is to grant leave to appeal to enable the Court
to determine the issues of legal principle and to remit
any outstanding factual issues to the Judge only if such

11
 course proves necessary and possible without
procedural unfairness.’ 30 (emphasis added)

13. The Appeal Committee directed that the CA’s remitter Order be
stayed and granted the Appellant leave to appeal in the terms set
out in §2 above.31

D. QUESTIONS OF GREAT GENERAL OR PUBLIC

IMPORTANCE

D.1 Question 1

14. Question 1 is:

“Whether there can be proprietary estoppel arising from an

oral promise relating to interest in land binding on the estate
of the promisor in the absence of any or any reasonable
detrimental reliance by the promisee prior to the death of the
promisor; and in such case whether detrimental reliance of
the promisee only after the death of the promisor can give
rise to proprietary estoppel against the estate of the deceased
promisor overriding the interest of the successors or
beneficiaries to the estate?”32

30
§§7 and 13 of the Reasons for Determination [A/9/148, 150-151].
31
§14 of the Reasons for Determination [A/9/151].
32
§§8 and 14(1) of the Reasons for Determination [A/9/148, 151].

12
15. The elements of proprietary estoppel have been described by Lord
Walker and Lord Scott in Thorner v Major [2009] 1 WLR 776 at
§§15 and 29 (and adopted by Cheung JA) 33 as follows:

(1) a sufficiently clear and unequivocal representation or

assurance is made by A to B;

(2) reasonable reliance on it by B;

(3) sufficiently substantial detriment to B in consequence of

his/her reasonable reliance.

16. When all of the elements take place during A’s lifetime, and the
court finds them as proved, there is generally no difficulty for B to
establish a claim in proprietary estoppel. The promise (ie element
(1)) only becomes binding on A, and therefore irrevocable, due to
B’s detrimental reliance on it: see Gillett v Holt [2001] Ch 210 at
229D and 232D-F, per Robert Walker LJ. The reason is that once
the elements of proprietary estoppel are established, a personal
equity (or a “mere equity”) arises: see Jennings v Rice [2003] 1 P
& CR 8 at §36, per Aldous LJ. As explained by Ribeiro PJ in Luo
Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 at §67,
the word “mere” is used simply to indicate that no proprietary
interest accrues to the plaintiff when proprietary and promissory
estoppels are established.

33
§§5.4 and 5.5 of the CA Judgment [A/4/74].

13
17. However, if element (1) takes place during A’s lifetime, but
elements (2) and/or (3) take place after A’s death, the analysis as to
whether B can succeed in a claim in proprietary estoppel becomes
more complicated. This is because A’s death would trigger the
operation of two alternative legal regimes in the law of succession
which would invariably affect A’s potential proprietary interests.

(1) During A’s lifetime, no personal equity arises because there

is no reliance and/or detriment on the part of B.

(2) Upon A’s death, his property immediately vests in:

(a) A’s executor (if A dies with a valid and binding will
in which an executor is appointed),34 or

(b) the Official Administrator until a grant of

administration is taken out (if A dies intestate).35

(3) If B’s reliance and/or detriment materialises after A’s death,

further legal questions arise, such as whether (a) a personal
equity nonetheless arises in favour of B, and (b) if so,
whether B’s equity would be subject to the interests of the
beneficiaries under A’s will or of A’s intestate estate. These
questions do not appear to have been decided by any courts
in Hong Kong or other common law jurisdictions, or
discussed in the relevant leading textbooks.

34
Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (21st ed, 2018)
at §35-02.
35
Williams, Mortimer and Sunnucks at §35-03; Probate and Administration Ordinance (Cap
10), section 10.

14
18. It is respectfully submitted that if B’s detrimental reliance only
occurs after A’s death, B cannot subsequently obtain an interest that
can override the interests of the beneficiaries of A’s estate which
has taken effect upon A’s death.36

19. It is because when there is no detrimental reliance by B prior to the

death of A, the promise of A must be taken to have lapsed. At his
death, unless A leaves interest in the land by will to B or B is
entitled to the interest in the land by virtue of the law of intestate
succession (in which cases there are no issue of proprietary estoppel
as promise is made good by the promisor at his death), A has no
way to make good the promise. 37 A can no longer effect an inter
vivos gift of the interest in the land to B; nor can A’s personal
representative disregard the will or the provisions of the Intestates’
Estates Ordinance, Cap 73 (as the case may be). Given that at this
point of time A’s promise remains revocable but cannot be made
good by A (or his representatives) anymore, A’s promise can only
be taken to have lapsed. The promise can no longer bind A and
effect must be given to the interests of the beneficiaries of A’s
estate. A promise not acted upon by the time of A’s death is no
different from any other case of imperfect or uncompleted gift that
fails for want of formalities.

36
In McFarlane, The Law of Proprietary Estoppel (2nd ed, 2020) at §6.100, Professor
McFarlane noted (in the context of proprietary estoppel based on A’s promise to leave assets
to B on A’s death) B’s claim is that “at or prior to the time of A’s death, A was under a liability
to B” (emphasis added). The learned author confined the timing to before A’s death, and did
not envisage the possibility of the imposition of liability after A’s death.
37
See Powell v Benney [2007] EWCA Civ 1283 at §14, citing the judgment of HHJ Levy QC
in the court below at §61, which held that the moment when A, who died intestate, went back
on his promise was on A’s death. See also §6.35 of the CA Judgment [A/4/93-94].

15
20. Further, to allow an oral representation/assurance/promise relating
to land which has not been acted upon to survive A’s death will
create serious uncertainty in the administration of estate. A’s estate
and its successors’ or beneficiaries’ interests can be encumbered by
an interest subsequently arising in the unknown future, depending
on acts of third parties who may be unknown, overriding the effect
of A’s last will or the law of intestate succession.

21. The CA has (correctly) decided that a claim based on constructive

trust cannot succeed if there was no detrimental reliance on the
common intention on the part of the party seeking a beneficial
interest (i.e. B) by the time of death of the legal owner(s) (i.e. A)
(see §8(1) above). But a different view was taken in relation to
proprietary estoppel (see §8(2) above). Lam VP considered that
“The going back from an assurance can take place either during
the lifetime of a promisor or after his death when his estate is
administered by his personal representative … if there were
reasonable reliance, the unconscionability is to be assessed at the
time when the promisor or, after his death his personal
representative goes back on the assurance. The question of
detriment is to be considered only when dispute has arisen”.38 The
Appellant respectfully submits that such a view is too simplistic as
a matter of law and is incorrect in the context of the present case.

(1) If B’s personal equity arises during A’s lifetime (because all
the elements of proprietary estoppel are satisfied), there is
little doubt that B can seek to enforce the equity by bringing

38
§1.24 of the CA Judgment [A/4/60].

16
 a claim in proprietary estoppel even after A’s death against
A’s personal representative if the personal representative
refuses to acknowledge the promise (as long as it is done
within the relevant limitation period).

(2) If, on the other hand, B’s personal equity does not arise
during A’s lifetime, or after A’s death at all, or arises after
A’s death but is subject to the proprietary interest of others,
the learned Vice President’s statement would not be correct.
It begs the question whether and, if so, when B’s personal
equity arises.

(3) Further, insofar as the CA suggests that B’s personal equity

arises when A seeks to resile from his representation or
assurance or promise, that suggestion is contrary to
authorities: see eg Clarke v Meadus [2010] EWHC 3117
(Ch) at §75, per Warren J; Webster v Ashcroft [2012] 1 WLR
1309 at §§26-27, per DHCJ Nicholas Strauss QC. The
personal equity arises once the elements of proprietary
estoppel are established: Jennings v Rice at §36. While the
cause of action may accrue after the death of A when A’s
personal representative seeks to resile from A’s promise, the
personal equity must have arisen prior to A’s death with the
detriment occurring prior to the death.

(4) In particular, the observation of Robert Walker LJ in Gillett

v Holt at 232E-F that “the issue of detriment must be judged
at the moment when the person who has given the assurance
seeks to go back on it” must be understood in its proper

17
 context. It was a guidance as to the point of time at which the
Court should judge the issue of detriment in order to decide
on the appropriate relief. However, it should not be taken to
mean that detriment need only be incurred upon A going
back on the promise.

22. For the purpose of proprietary estoppel, it is well-established that

the detriment to B in consequence of his reliance must be
sufficiently substantial. 39 On the evidence before the Courts below,
D3 only started incurring substantial detrimental reliance from
2002. 40 The only detrimental reliance pleaded by D3 from 1992 to
2002 is the building of a gate and some walls, and maintenance of
some trees, plants, flowers, storage house and the gate, 41 which the
Appellant submits cannot on any view constitute substantial
detrimental reliance. It follows that there was no detrimental
reliance on the part of D3 prior to or at the time of death of any of
the three brothers (in 1991/92, 1997 and 1999). No personal equity
had arisen in favour of D3 at the time of death of Wan the last of
the 3 co-owners in 1999 and the Appellant respectfully submits that
the CA’s upholding of D3’s claim in proprietary estoppel is
incorrect.

23. For the above reasons, the Appellant respectfully submits that
Question 1 should be answered as follows:

39
See §15(3) above.
40
§§6.25 and 6.44 of the CA Judgment [A/4/89, 98]. See also the relevant aerial photos.
41
D3’s Re-Re-Amended Defence §§10(1)-(2). See also the relevant aerial photos.

18
 (1) there cannot be proprietary estoppel arising from an oral
promise relating to interest in land binding on the estate of
the promisor in the absence of any or any substantial
detrimental reliance by the promisee prior to the death of the
promisor; and

(2) in such case detrimental reliance of the promisee only after

the death of the promisor cannot give rise to proprietary
estoppel against the estate of the deceased promisor
overriding the interest of the successors or beneficiaries to
the estate.

D.2 Question 2

24. Question 2 is:

“Whether a co-owner in sole occupation of land, in cases

other than partition or ouster and in the absence of
agreement, should be ordered to account to the other co-
owners for occupation rent. Alternatively, whether the
proposition of law in Re Pavlou (A Bankrupt) [1993] 1 WLR
1046 at 1050D that ‘a court of equity will order an inquiry
and payment of occupation rent even if there is no ouster
when it is necessary to do so to do equity between the parties’
should be confined to partition or analogous
proceedings?” 42

42
§§8 and 14(1) of the Reasons for Determination [A/9/148-149, 151].

19
25. This question arises because the trial judge has ordered the
Appellant to pay to D1 and D2 (1) one-third of the rental income in
respect of the 1st and 2nd floors of House 774 from 1997 onwards
and (2) one-third of the mesne profits in respect of the ground floor
of House 774 from 1997 onwards. The Appellant is two-thirds co-
owner of House 774. The CA has upheld such an order.

26. In Hong Kong, it has been held that (1) co-owners are not agents or
fiduciaries for one another and there is no duty to account for rent
received by one co-owner arising simply by reason of the incidence
of co-ownership, (2) a co-owner out of occupation has remedies in
law in two situations: (a) damages for occupation rent for ouster, or
(b) an account if the other co-owner has rendered himself liable as
agent or bailiff: see Chen Yu Tsui v Tong Kui Kwong [2006] 1
HKC 23 at §§87-105, per DHCJ Barnabas Fung, following the
judgment of Meagher JA in Forgeard v Shanahan (1994) 35
NSWLR 206. This has subsequently been followed in other Hong
Kong cases, including Wing Ming Garment Factory Ltd v Wing
Ming Industrial Centre (IO) [2014] 4 HKLRD 52 at §200, per G
Lam J and Tang Tak Sum v Tang Kai Fong [2015] 1 HKLRD 286
at §46, per Cheung JA.

27. The rationale for the general principle that there is no duty to
account for rent received by one co-owner arising simply by reason
of the incidence of co-ownership is the fundamental concept of
unity of possession (each co-owner is as much entitled to the
possession of the subject-matter of the right as any of his co-owner).
Therefore, there is no right for one co-owner to demand payment
for the use by the other co-owner of the property concerned: see

20
 Burrows, English Private Law (3rd ed, 2013) at §4.391. It is a firmly
established principle at the common law: see McMahon v Burchell
(1846) 41 ER 889 at 892-893, per Lord Cottenham LC; Henderson
v Eason (1851) 117 ER 1451 at 1458; Jones (AE) v Jones (FW)
[1977] 1 WLR 438 at 441H-442C, per Lord Denning MR; see also
Forgeard v Shanahan at 221F-222B, per Meagher JA.

28. Accordingly, by reason of the co-owners’ unity of possession, a co-

owner in sole occupation of land, in cases other than partition or
ouster and in the absence of agreement, should not be ordered to
account to the other co-owners for occupation rent. The application
of the unity of possession concept may be displaced in situations
such as a case where (1) the occupation of one co-owner has been
ousted by the other who remains in occupation, or (2) one co-owner
has by agreement or otherwise become the bailiff of the undivided
shares in the land for the other co-owner, or (3) one co-owner has
sought to sever the co-ownership of the land by partition.

29. In Re Pavlou (a bankrupt) [1993] 1 WLR 1046, Millett J said at

1050D:

“a court of equity will order an inquiry and payment of

occupation rent, not only in the case where the co-owner in
occupation has ousted the other, but in any other case in
which it is necessary in order to do equity between the parties
that an occupation rent should be paid.”43

43
In Wing Ming Garment, G Lam J at §214 had this to say about this quote from Re Pavlou:
“The precise ambit of that principle is, however, unclear. Meagher, Gummow and Lehane’s
Equity: Doctrines and Remedies (4th ed, 2002) para.25-065, states that the decision in Re

21
30. This was described by Lam VP as the “modern approach” and his
Lordship said (which Au JA agreed):44

“I see no reason why the modern approach should not be

followed in Hong Kong. In other words, a court of equity
will order an inquiry and payment of occupation rent even if
there is no ouster when it is necessary to do so to do equity
between the parties.”45

31. The approach in Re Pavlou should not be generally applied to all

instances of occupation by co-owners like the present case, as the
CA has held. The Appellant respectfully submits that insofar as the
approach in Re Pavlou should be followed in Hong Kong, its
application should be confined to (1) partition or analogous
proceedings where it would be unreasonable to expect continued
joint occupation of the property, 46 or (2) a case where the unity of
possession concept would be displaced.47

32. The unreasonableness of continued joint occupation or enjoyment

of the property is the foundation justifying the departure from the

Pavlou (A Bankrupt) [1993] 1 WLR 1046, 1050 (Millett J), should be placed in the category
of an account as an incidental consequence in a suit for partition or proceedings analogous
thereto. See also Forgeard v Shanahan (1994) 35 NSWLR 206; Chen Yu Tsui v Tong Kui
Kwong [2006] 1 HKC 23, [87]-[105].”
44
§§1.43 and 9 of the CA Judgment [A/4/66, 111].
45
The approach in Re Pavlou has also been followed by courts in England and in Hong Kong:
see the authorities referred to in §1.42 of the CA Judgment [A/4/65].
46
See Goo & Lee, Land Law in Hong Kong (4th ed, 2015) at §5.37 and footnote 77; French v
Barcham [2009] 1 WLR 1124 at §40, per Blackburne J. This approach was adopted in two
CFI judgments in Hong Kong: see Wing Ming Garment at §§213-214, per G Lam J; Tang
Tak Sum v Tang Kai Fong (No 2) [2020] 2 HKLRD 338 at §29.2, per Master Anthony HK
Chan.
47
See §28 above.

22
 common law rule and justifying equitable accounting as between
co-owners. As Millett J said in Re Pavlou at 1050E-F:

“The true position is that if a tenant in common leaves the

property voluntarily, but would be welcome back and would
be in a position to enjoy his or her right to occupy, it would
normally not be fair or equitable to the remaining tenant in
common to charge him or her with an occupation rent which
he or she never expected to pay.” (emphasis added)

33. It is in this light that Millett J’s observation (in Re Pavlou at 1050D)
that “[t]he fact that there has not been an ouster or forceful
exclusion therefore is far from conclusive” should be understood.
The observation was not intended to lay down a free-standing
doctrine of equitable accounting simply by incidence of co-
ownership, which would also have been contrary to authority. In
Henderson v Eason, Parke B held at 1458:

“There are obviously many cases in which a tenant in

common may occupy and enjoy the land or other subject of
tenancy in common solely, and have all the advantage to be
derived from it, and yet it would be most unjust to make him
pay anything. For instance, if a dwelling house … is solely
occupied by one tenant in common, without ousting the other
…; and it would be most inequitable to hold that he thereby,
by the simple act of occupation or use, without any
agreement, should be liable to pay a rent or anything in the
nature of compensation to his cotenants for that occupation

23
 or use to which to the full extent to which he enjoyed it he
had a perfect right.” (emphasis added)

34. Rather, what equity seeks to do is to provide relief in situation

equivalent or analogous to an ouster at common law. This has
recently, and rightly, been described as a “constructive exclusion”
from the property: see Gandesha v Gandesha [2020] 4 WLR 129
at §§78-81, per Andrews J.

35. Thus, in England, the approach of Re Pavlou has been applied in

situation where the co-owners’ matrimonial relationship has broken
down: see Re Pavlou at 1050G-H; see also earlier decision Dennis
v McDonald [1982] Fam 63 at 71D; or where a trustee-in-
bankruptcy cannot reside in or derive any financial enjoyment from
the property: see Re Byford (deceased) [2004] 1 P & CR 12 at §40,
per Collins J; French v Barcham at §§34-35, per Blackburne J;
although equitable accounting will not necessarily be ordered if on
the facts there is no exclusion from the property: see Davis v
Jackson [2017] 1 WLR 4005 at §§72-75, per Snowden J.48

36. In the present case, the Appellant respectfully submits that there is
no good reason to displace the unity of possession concept (as
summarised at §28 above) in relation to House 774; nor were D1
and D2 constructively excluded from House 774. Regard must be
paid to the fact that “[D1 and D2] have never requested to enter

48
While Snowden J in Davis v Jackson criticised at §§62-63 Blackburne J’s approach in
French v Bracham of asking whether “it was unreasonable for the non-occupying party to
go into occupation”, subsequent decision did not treat it as undermining the test: see Shilabeer
v Lanceley [2019] EWHC 3380 (QB) at §§52-53.

24
 House 774 and got rejected by [the Appellant]”, 49 and that the
relationship between P and D1 and D2 were not as poor as P
described.50 The CA’s decision to remit the case back to the trial
judge to make additional findings on the basis of the approach in
Re Pavlou is therefore incorrect. There is no basis to order equitable
accounting in the present case at all.

37. For the above reasons, the Appellant respectfully submits that
Question 2 should be answered as follows:

(1) a co-owner in sole occupation of land, in cases other than

partition or ouster and in the absence of agreement, should
not normally be ordered to account to the other co-owners
for occupation rent; or

(2) the proposition of law in Re Pavlou at 1050D that “a court

of equity will order an inquiry and payment of occupation
rent even if there is no ouster when it is necessary to do so to
do equity between the parties” should be confined to partition
or analogous proceedings where it would be unreasonable to
expect continued joint occupation or enjoyment of the
property or where a co-owner was constructively excluded
from the property.

E. “OR OTHERWISE” GROUND

49
§113(4) of the CFI Judgment [A/2/41].
50
§§36-38 of the CFI Judgment [A/2/17-18].

25
38. Further, leave to appeal was granted on the “or otherwise” basis in
respect of the correctness of the decisions of the Courts below
regarding the Appellant’s claims based on common intention
constructive trust and estoppel by acquiescence.51

E.1 Relevant Legal Principles for Common Intention Constructive

Trust

39. The relevant legal principles on common intention constructive

trust are summarised in Mo Ying v Brillex Development Ltd [2014]
3 HKLRD 224 (“Mo Ying (CFI)”) at §§33-46 (per DHCJ Eugene
Fung SC) and Mo Ying v Brillex Development Ltd [2015] 2
HKLRD 985 (“Mo Ying (CA)”) at §§5.6-5.17 (per Cheung JA)
respectively.

40. Unlike proprietary estoppel, common intention constructive trust is

“identifying the true beneficial owner or owners, and the size of
their beneficial interests”: see Stack v Dowden [2007] 2 AC 432 at
§37, per Lord Walker. This is reflected in the exercise that the Court
will undertake. As explained in the joint judgment of Lord Walker
and Baroness Hale in Jones v Kernott [2012] 1 AC 776 at §13:

“… if the task is embarked upon, it is to ascertain the parties’

common intentions as to what their shares in the property
would be, in the light of their whole course of conduct in
relation to it …”

51
§14(2) of the Reasons for Determination [A/9/151].

26
41. The onus is upon the person seeking to show that the beneficial
ownership is different from the legal ownership. In sole ownership
cases it is upon the non-owner to show that he has any interest at
all: see Stack v Dowden at §56, per Baroness Hale; Jones v Kernott
at §17, per Lord Walker and Baroness Hale; applied in Mo Ying
(CFI) at §34 and Mo Ying (CA) at §5.5.

42. A common intention constructive trust is constituted by the

promisee’s detrimental reliance. In Luo Xing Juan, Ribeiro PJ
explained at §38:

“Where a constructive trust is alleged to arise on the basis of

the parties’ common intention, it is the intention commonly
held by the property owner and the claimant regarding their
shared beneficial interests in the property that matters. The
trust is constituted by the claimant’s detrimental reliance
on their common intention and the unconscionability of the
property owner departing therefrom.” (emphasis added)

43. It has recently been affirmed in O’Neill v Holland [2020] EWCA

Civ 1583 at §§27-35 that detrimental reliance is an essential
ingredient. The detriment has to be “sufficiently substantial” to
justify the intervention of equity: Parris v Williams [2009] 1 P &
CR 9 at §49; see also (in the context of proprietary estoppel)
Thorner v Major at §15, per Lord Scott; Kwan So Ling v Woo Kee
Yiu Harry (unrep, HCA 1311/2011, 28 August 2013) at §47, per
DHCJ Marlene Ng.

27
44. In the present case, the onus is upon D3 (who sought to show that
the beneficial ownership is different from the legal ownership 52) to
prove that:

(1) there was a common intention that he should be the sole

beneficial owner of the Disputed Land;

(2) he has acted to his detriment on the basis of that common

intention; and

(3) such detriment is binding on the conscience of the legal

owners53.

E.2 No Common Intention Constructive Trust

45. In the present case, the Common Understanding as found in §99 of

the CFI Judgment [A/2/35] (and affirmed by the CA 54) was at best
an intention to make a future gift. A declaration of future intention
to make a gift of land not evidenced in writing is not enforceable
against or binding on the intended donor or his estate. Such
Common Understanding cannot give rise to common intention
constructive trust as it cannot bind the conscience of the intended
donor without evidence of sufficiently substantial detrimental
reliance on the part of the intended donee.

52
D1 and D2 did not seek any relief based on common intention constructive trust. No
detrimental reliance on their part is pleaded.
53
In Luo Xing Juan, Ribeiro PJ giving judgment on behalf of the CFA said at §37: “It is also
the case where a constructive trust is imposed. Equity attaches the conscience of the legal
owner …” (emphasis added).
54
§§6.7-6.12 of the CA Judgment [A/4/80-82].

28
46. D3 failed to prove that there was sufficiently substantial detrimental
reliance prior to the deaths of the three registered owners (namely,
Wan, Kau and Fuk):

(1) while Fuk died between September 1991 and early 1992,55
D3 did not plead any detrimental reliance (let alone
sufficiently substantial one) prior to Fuk’s death;

(2) the detrimental reliance pleaded by D3 prior to the death of

Kau in 1997, or prior to the death of Wan in 1999, was
insufficient to give rise to common intention constructive
trust; and

(3) the “detrimental reliance” pleaded and relied on by D3 such

as moving into the Disputed Land or constructing a 25 feet
high building (“Structure A”) and a single-storey building
(“Structure B”) thereon 56 all occurred after the deaths of the
three registered owners and could not bind the conscience of
dead men. Further, these were matters of benefit or
enjoyment (rather than detriment) to D3: see Kwan So Ling
v Woo Kee Yiu Harry (unrep, HCA 1311/2011, 30 April
2015) at §53 (per G Lam J) and Chan Gordon v Lee Wai
Hing [2011] 2 HKLRD 506 at §§48-49 (per DHCJ Queeny
Au-Yeung, as she then was).

55
See death certificate of Fuk dated 8 March 1993. According to the Letters of Administration
dated 9 May 2006, Fuk “was last known to be alive [in] September 1991 and his dead body
was found on the 7th day of May 1992”.
56
D3’s Re-Re-Amended Defence §10.

29
47. In this regard, the Appellant submits that Lam VP’s ruling that “if
there were no detrimental reliance on the part of [D3] by the time
of the death of legal owners of the Disputed Land, he cannot assert
a claim based on constructive trust” 57 is correct for the reasons
given by his Lordship at §§1.3-1.6 of the CA Judgment [A/4/52-
53]. Common intention constructive trust is to identify the true
beneficial owner of the property. Given that the whole of the
property of the legal owner will automatically vest in the executor
or Official Administrator upon his death (as the case maybe), 58 in
order for the claimant to be the true beneficial owner of the
property, the trust must be validly constituted prior to the death of
the legal owner.

48. It follows that in the present case, no common intention

constructive trust in favour of D3 was constituted. His detrimental
reliance which could justify the intervention of equity took place
only after the death of all three registered owners. D3’s claim of
common intention constructive trust should therefore fail.

49. In the circumstances:

(1) there was nothing binding on the conscience of Fuk who died
intestate before any detrimental reliance on the part of D3,
such that by law of intestate succession, his one-third share

57
§1.3 of the CA Judgment [A/4/52].
58
See §17(2) above.

30
 of the Disputed Land would go equally to Wan and Kau59;
and

(2) there was nothing binding on the conscience of Kau who died
leaving a will dated 27 February 1993 leaving his estate
(which includes his one-third share of the Disputed Land and
his entitlement to half share of Fuk’s one-third share of the
Disputed Land) all to the Appellant.

50. Further or alternatively, it is respectfully submitted that the

Common Understanding came to an end upon the death of the
intended donor(s):

(1) In the case of Fuk who died intestate, his share of the
Disputed Land became part of his “residuary estate” 60 upon
his death. As such, his share of the Disputed Land shall be
distributed in accordance with the rules of intestate
succession laid down by the Intestates’ Estates Ordinance.
Any Common Understanding on the part of Fuk prior to his
death, without any sufficient detrimental reliance binding on
his conscience, cannot override the statute.

(2) In the case of Kau and Wan who died testate, their last wills
dated 27 February 1993 and 5 August 1999 respectively shall
be construed to speak and take effect as if they had been

59
Since Fuk had no husband or wife and no issue and no parent surviving him (see §§2-4 of
“Affirmation by Administratrix” of Fuk’s estate), his brothers of the whole blood (namely,
Wan and Kau) were entitled to his estate pursuant to section 4(8) of the Intestates’ Estates
Ordinance (Cap 73).
60
See section 2(1) of the Intestates’ Estates Ordinance and section 3 of the Wills Ordinance,
(Cap 30).

31
 executed immediately before their death since there is no
evidence of any contrary intention appearing from their
wills: see section 19 of the Wills Ordinance. Therefore, any
Common Understanding formed prior to Kau’s and Wan’s
death, without sufficient detrimental reliance binding on
their conscience, were superseded by their last wills which
spoke and took effect immediately before their death.

(3) This means that Kau’s half share (ie Kau’s original one-third
share plus half of Fuk’s one-third share) would pass to the
Appellant whereas Wan’s half share (ie Wan’s original one-
third share plus the other half of Fuk’s one-third share) would
pass to D1 and D2.

E.3 Relevant Legal Principles for Estoppel by Acquiescence

51. The relevant principles for estoppel by acquiescence are set out in
Mo Ying (CA) at §8.2, per Cheung JA:

(1) An estoppel by acquiescence arises where a reasonable man

would expect the person against whom the estoppel is raised,
acting honestly and responsibly, to bring the true facts to the
attention of the other party known to him to be under a
mistake as to their respective rights and obligations.

(2) A duty to speak, such as to found an estoppel by

acquiescence, will arise in circumstances, so far as material
for the present appeal, where a person, having a title or right
to property of any kind, perceives that another person is

32
 innocently, and ignorant, conducting himself with reference
to the property in a manner inconsistent with such right or
rights.

52. To establish estoppel by acquiescence, unconscionability has an

important role to play. 61

53. In a narrow sense, estoppel by acquiescence can apply only if A is

aware that B is taking action on the basis of a belief and also that
B’s belief is mistaken: see Ramsden v Dyson (1866) LR 1 HL 129
at 141, per Lord Cranworth. In this regard, constructive knowledge
of the mistaken belief is insufficient in pure acquiescence cases: see
Smith-Tyrrell v Bowden [2018] L & TR 23 at §78, per HHJ Paul
Matthews.

54. In a broad sense, the circumstances must be that equity considers A

to be dishonest to remain passive: see Ramdesn v Dyson at 140-
141 (per Lord Cranworth) and at 168 (per Lord Wensleydale). The
need for dishonesty or unconscionability on A’s part continues to
be recognised: see Blue Haven Enterprises Ltd v Tully [2006]
UKPC 17 at §§22-25 and 27, per Lord Scott.

E.4 No Estoppel by Acquiescence

55. It is respectfully submitted that the trial judge erred in finding in

§§100-103 of the CFI Judgment [A/2/36-38] that the Appellant was
estopped by acquiescence.

61
See McFarlane, The Law of Proprietary Estoppel (2nd Edn, 2020) at §§5.33-5.43.

33
56. At the outset, the Appellant was not entitled to take any action until
she obtained: (a) grant of probate in respect of Kau’s estate in
October 1998, or (b) grant of letters of administration in respect of
Fuk’s estate in May 2006. However, given that Wan only passed
away in September 1999, it could not reasonably be expected that
the Appellant would assert the interest of Kau’s estate as soon as
she obtained the grant.

57. Further, even after the Appellant obtained grant of probate or letters
of administration in respect of the estates of Kau or Fuk, there are
features which are fatal to D3’s claim of estoppel by acquiescence.

58. First, awareness of the work carried out by D3 on the Disputed

Land, without more, was insufficient to give rise to an estoppel by
acquiescence. The Appellant must also know of the basis on which
those work was carried out, and know that the basis was mistaken.
However, there was no pleading or evidence that she was party to
such Common Understanding. Further, it was only pleaded that
Wan, Kau, Fuk, D1, D2 and D3 were “privy” to the Common
Understanding.62 Thus, on D3’s own pleaded case, the Appellant
was not aware of the belief on which Structures A and B were built
in 2002 and 2003, let alone whether such belief was mistaken. It
follows that estoppel by acquiescence was simply not engaged.

62
Answer (i) to Request No 1 of the 3rd Defendant’s Answer to the Plaintiff’s Request for
Further and Better Particulars of the 3rd Defendant’s Defence & Counterclaim.

34
59. Secondly and more importantly, D1 and D2, who are both parties
to the Common Understanding, 63 are also co-owners of the
Disputed Land as explained in §50(3) above. They plainly had
given consent to D3’s use and occupation of the Disputed Land. 64
Although the Appellant was unaware of the Common
Understanding, she could not object to the use and occupation by
co-owners for reasons discussed in Section D.2 (on Question 2)
above. As shown in her pleadings, she only brought the current
proceedings because Structures A and B did not conform to the
safety requirements imposed by the Buildings Department and were
thus liable to cause danger. 65 Hence there can be no estoppel by
acquiescence when the Appellant’s understanding was that co-
owners were allowed to use and occupy the Disputed Land (in the
same way as she was using House 774) and when as a matter of fact
D3 was using and occupying the Disputed Land with the other co-
owners’ consent. As the Appellant was not privy to the Common
Understanding, D3 were not acting inconsistently with the
Appellant’s right. In not objecting to D3’s use of the Disputed
Land, the Appellant would not be dishonest or unconscionable
given the other co-owners’ consent thereto.

60. Thirdly, the Appellant submits that D3 is not entitled to any

equitable defences in that he did not come with clean hands. As
submitted above, the primary complaint of the Appellant in the
present case is the erection of Structures A and B because they were

63
§99 of the CFI Judgement [A/2/35-36].
64
§87(2) and (3) of the CFI Judgment [A/2/32-33].
65
Re-Amended Statement of Claim §15.

35
 liable to cause danger and were “unauthorised structures” 66, ie in
breach of the restrictive covenant in the Block Lease which
prohibits erection or construction of any building or structure
without first having obtained the approval of the Government. 67
However, the erection of Structures A and B is also the very act of
reliance on which D3’s defences, including estoppel by
acquiescence, are founded. Thus, D3 is relying on his own wrong
to raise equitable defences and cannot be said to have come with
clean hands.

61. Fourthly, it is respectfully submitted that the observation by the

Privy Council in Knowles v Knowles [2008] UKPC 30, a pure
acquiescence case, is particularly apposite. As Sir Henry Brooke
observed at §27:

‘…In the opinion of their Lordships it would be

unconscionable in this case to deprive George of his property
when he had done nothing at all to encourage any belief that
his brother and sister-in-law could treat the property as
belonging to them. While recourse to the doctrine of estoppel
provides a welcome means of effecting justice when the facts
demand it, it is equally important that the courts do not
penalise those who through acts of kindness simply allow
other members of their family to inhabit their property rent
free. In E & L Berg Homes Ltd v Grey (1979) 253 EG 473,
[1980] 1 EGLR 103 Ormrod LJ said at p 108:

66
Re-Amended Statement of Claim at §13; Re-Amended Reply to D3’s Re-Re-Amended
Defence §27.
67
Letters from the District Lands Office, Sai Kung, Lands Department dated 26 February 2013
and 17 April 2013 respectively.

36
 “…I think it important that this court should not do or
say anything which creates the impression that people
are liable to be penalised for not enforcing their strict
legal rights. It is a very unfortunate state of affairs
when people feel obliged to take steps which they do
not wish to take, in order to preserve their legal rights,
and prevent the other party acquiring rights against
them. So the court in using its equitable jurisdiction
must, in my judgment, approach these cases with
extreme care.”’ (emphasis added)

62. For the above reasons, the Appellant respectfully submits that the
decisions of the Courts below regarding the Appellant’s claims
based on common intention constructive trust and estoppel by
acquiescence are erroneous and should be quashed.

F. PROCEDURAL UNFAIRNESS

63. The Appellant respectfully submits that the CA should have

determined the appeal upon the basis of the above legal principles
based on the case as pleaded and the evidence as found in the CFI
Judgment. For reasons stated by the Appeal Committee and cited in
§12 above, the CA’s remitter Order would cause substantial
procedural unfairness to the Appellant.

37
G. CONCLUSION

64. For the above reasons, it is respectfully submitted that this appeal
should be allowed on the bases as set out in these submissions.

Dated the 16th day of February 2021.

Audrey Eu, SC

Anson Wong Yu Yat

Jason Kung

Counsel for the Appellant

38