Proprietary estoppel: ‘detriment’ and countervailing benefits

In Mak Ho Fung v Mak Kai ([2013] HKEC 1924, CA) the Court of Appeal had to consider the concept of ‘detriment’ and the linked concept of countervailing benefits.

Two aunts persuaded their nephew (the plaintiff) to move to Hong Kong from Guangzhou in the early 1980s. They assured him that they would give him their flat if he looked after them. In reliance, he officially changed his surname to that of his aunts and became the foster-son of one of them. He moved to Hong Kong. The aunts had looked after him and had given him a substantial amount of cash to start a business. The question was whether this amounted to detriment or not. The Court of Appeal found that it did.

The question had to be assessed as at the date when the aunts sought to resile from their assurance. Countervailing benefits had to be taken into account. The Court referred to Robert Walker LJ’s statement on the subject in Gillett v Holt (Chu JA at [28]). The judge at first instance had been justified in finding that the nephew had incurred detriment.

On the question of countervailing benefits:

‘[A]lthough countervailing benefits should be taken into account in judging detriments, the court should not embark upon a quantified comparison of the benefits received and the detriments suffered by a claimant. The issue is to be approached on the basis of a broad inquiry.

In view of the life-changing consequences of the giving up of the family name and the adoption of a new surname, notwithstanding the countervailing benefits relied on by the defendants, the Judge would be entitled in the exercise of his wide judgmental discretion to conclude that substantial detriment had been suffered by the plaintiff.’ ([37] – [38]).

Jennings v Rice was not relevant to the appeal since it considered the role of countervailing benefits in deciding on the appropriate relief and this was not the point being considered ([36]).

The aunts had sold the flat to third parties (other nephews). The nephews were ordered to transfer the property to the plaintiff.

Michael Lower

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2 Responses to “Proprietary estoppel: ‘detriment’ and countervailing benefits”

  1. Tony Wong Says:

    Your last sentence says, “The nephews were ordered to transfer the property to the plaintiff.” But in the second paragraph, “Two aunts persuaded their nephew (the plaintiff) to move to Hong Kong from Guangzhou in the early 1980s. “. It seems plaintiff = nephew?

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