Chan Pui Chen v Leung Kam Ho
| Jurisdiction | England & Wales |
| Judgment Date | 2002 |
| Date | 2002 |
| Year | 2002 |
| Court | Court of Appeal (Civil Division) |
Property – Unmarried couple – Beneficial interest – Judge finding claimant acting to her detriment on basis of common intention to have beneficial interest in property – Judge finding claimant entitled to beneficial interest in house – Whether judge in error – Family Law Act 1996, s 33(3) – Trusts of Land and Appointment of Trustees Act 1996, s 14.
In 1992, Miss C started working in Hong Kong for Mr L, who was under investigation for corruption. They developed a relationship and discussed marriage. In 1993 he was sentenced to three years’ imprisonment, which deferred the couple’s nuptial plans. At the time of his conviction Mr L was engaged in various property development projects, including WM and HC. While he was in prison Miss C assisted him in the progression of the two projects. He later gave her a general power of attorney over his affairs. He also gave Miss C a gift of $HK700,000. When Miss C visited Mr L in prison, he asked her to help with his business affairs in return for a share in the business. He also repeated his earlier promise of marriage and restated that he would give her a house. Following his release from prison, Miss C came to England to look for a house in which they could live together. They arranged to buy a house with funds supplied by Mr L. Although the couple used the property as their home, it was transferred into the name of a company which the couple had set up. The couple agreed that the company would be beneficially owned as to 51% by Miss C and as to 49% by Mr L. By 1998, their relationship had broken down. Miss C remained at the property (which had been mostly paid for from the profits of the two projects Miss C had worked on) whilst pursuing her University studies. Miss C subsequently sought an order under s 33(3) of the Family Law Act 1996 (the FLA) to enforce her entitlement to remain in occupation of the property, and/or a declaration under s 14 of the Trusts of Land and Appointment of Trustees Act 1996 (the TLATA) as to her beneficial interest in the property. Miss C alleged that Mr L had told her that if she looked after his interest in the WM and HC projects, she would have a half share in the profits of those projects and that the proceeds would be applied in buying her a property abroad where they could live together, and that on that basis she had agreed to look after his interests in the two projects. Miss C further alleged that there had at all material times been a common intention between her and Mr L that she should have a beneficial interest in the property. The judge accepted Miss C’s evidence and found that Miss C had been induced to work on the WM and HC projects by the promise of a share in them and had altered her position by remaining with Mr L and not pursuing her political career and by all the
work that she had done, and that she had done so to her significant detriment. The judge therefore ordered, under s 33 of the FLA, that Miss C was entitled to remain in occupation of the property and Mr L was excluded from occupation until the house was sold; and under s 14 of the TLATA that the extent of Miss C’s beneficial interest in the house was 51% and that the property was not to be put on the market until Miss C had completed her studies. Mr L appealed against that decision on the grounds, inter alia, that the promises he had made to Miss C had been insufficiently precise to give rise to any beneficial interest in the WM and HC projects, or their proceeds, and that Miss C had not suffered detriment capable of founding an entitlement to a beneficial interest in the house.
Held – Once an agreement had been established in relation to sharing property beneficially, it was necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she had acted to his or her detriment, or had significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a proprietary estoppel. In the instant case, the judge was entitled on the evidence to find (a) that Mr L had promised that Miss C should have a share in the proceeds of the projects, (b) that Miss C had acted to her detriment in reliance on that promise, and (c) that in all the circumstances her beneficial share should be quantified at one half. In relation to (a), the existence of a degree of uncertainty as to whether Mr L’s promise extended to other projects on foot at the material time did not lead to the conclusion that the promise in relation to the WM and HC projects should be treated as so uncertain as to have precluded the court from granting equitable relief in respect of it. In relation to (b), the evaluation of whether the acts in question amounted to an alteration of Miss C’s position to her detriment in reliance on Mr L’s promise was a matter for the judge, who had heard the witnesses over a considerable time. The court would therefore not interfere with the judge’s evaluation. In relation to (c) it was also a matter for the judge to determine the extent of Miss C’s beneficial share in the two projects, as no specific share was mentioned. The letters written to Miss C by Mr L clearly envisaged equality of ownership between them; Lloyds Bank plc v Rossett [1990] 1 All ER 1111 applied.
Cases referred to in judgmentsBasham (decd), Re [1987] 1 All ER 405, [1986] 1 WLR 1498, [1987] 2 FLR 264.
Eves v Eves [1975] 3 All ER 768, [1975] 1 WLR 1338, CA.
Gissing v Gissing [1970] 2 All ER 780, [1971] AC 886, [1970] 3 WLR 255, HL.
Goodman v Gallant [1986] 1 All ER 311, [1986] Fam 106, [1986] 2 WLR 236, [1986] 1 FLR 513, CA.
Grant v Edwards [1986] 2 All ER 426, [1986] Ch 638, [1986] 3 WLR 114, [1987] 1 FLR 87, CA.
Hammond v Mitchell [1991] FCR 938, [1992] 2 All ER 109, [1991] 1 WLR 1127, [1992] 1 FLR 229.
Jennings v Rice[2002] EWCA Civ 159, [2003] 1 FCR 501.
Lloyds Bank plc v Rossett [1990] 1 All ER 1111, [1991] 1 AC 107, [1990] 2 WLR 867, HL.
Mortgage Corp Ltd v Shaire, Mortgage Corp Ltd v Lewis Silkin (a firm) [2000] 2 FCR 222, [2001] 4 All ER 364, [2001] Ch 743, [2001] 3 WLR 639, [2000] 1 FLR 973.
Pettitt v Pettitt [1969] 2 All ER 385, [1970] AC 777, [1969] 2 WLR 966, HL.
Ungarian v Lesnoff [1990] FCR 719, [1990] Ch 206, [1989] 3 WLR 840.
AppealThe appellant, Mr Gilbert Leung Kam Ho, appealed with the permission of Chadwick LJ from the decision of Judge McGonigal, dated 30 November 2001, whereby he ordered that the respondent, Miss Esther Chan Pui Khan, was entitled to remain in occupation of their property, Hill House, and that Mr Leung was excluded from occupation of the property until it was sold. He also ordered that the extent of Miss Chan’s beneficial interest was 51% and that the property was not to be put on the market until Miss Chan had completed her University studies. The facts are set out in the judgment of Jonathan Parker LJ.
Rosalind Nicholson (instructed by Penningtons) for Mr L.
Simeon Thrower (instructed by Fenwick & Co) for Miss C.
JONATHAN PARKER LJ(giving the first judgment at the invitation of Rix LJ).
Introduction[1] This is an appeal by Mr Gilbert Leung Kam Ho (Mr Leung) against an order made by Judge McGonigal, sitting in the Chancery Division, Companies Court, on 30 November 2001. Before the judge were three sets of proceedings, as follows.
(1) An action (ref no HC 2000 0745) brought by Miss Esther Chan Pui Kwan (formerly Esther Chan Pui Chun) (Miss Chan) against Mr Leung, seeking firstly an order under s 33(3) of the Family Law Act 1996 (the FLA) to enforce Miss Chan’s entitlement to remain in occupation of a residential property known as Hill House, Roundhill Drive, Woking, Surrey, further or alternatively a declaration under s 33(4) of the FLA (alternatively under s 14 of the Trusts of Land and Appointment of Trustees Act 1996 (the TLATA)) as to Miss Chan’s beneficial interest in Hill House. Joined as second defendant in the action is Melodious Corp (a company incorporated in the British Virgin Islands) (the company), which is the registered proprietor of Hill House at HM Land Registry. The company is beneficially owned as to 51% by Miss Chan and as to the remaining 49% by Mr Leung. Miss Chan is currently in sole occupation of Hill House, in which she and Mr Leung previously lived together.
(2) A winding up petition (no 004911 of 1998) presented by Mr Leung on 29 August 1998 against the company in his capacity as a creditor of the company, on the ground that the company is unable to pay its debts.
(3) A winding up petition (no 00282 of 1999) presented by Mr Leung on 18 January 1999 against the company in his capacity as a contributory of the company on the ground that it is just and equitable that the company should be wound up.
[2] By his order dated 30 November 2001, which was made in the action and in the petitions, the judge declared that the company holds the freehold title of Hill House as trustee for Miss Chan and Mr Leung in the proportions 51:49. He further ordered that Hill House be sold (but with the proviso that, save with the consent of Miss Chan, no sale should take place before the end of the academic term in the summer of 2003, when Miss Chan was due to complete her studies at the University of Surrey, or the earlier cessation of her studies), and that the net proceeds of sale be distributed as to 51% to Miss Chan and, following payment to the company of £180,000 in discharge of a debt owed to it by Mr Leung, the balance (if any) to Mr Leung; and he declared that until sale Miss Chan is entitled to occupy Hill House as her residence. The judge dismissed both the winding-up petitions, and directed that an account be taken—
‘in order to ascertain the sums (if any) that are due and ought to be paid or distributed by the company to its creditors (including Mr Leung and Miss Chan) and its contributories.’
[3] The judge’s order went on to give directions as to evidence on the taking of the account. The judge awarded Miss Chan her costs of the...
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