The common intention constructive trust: post-acquisition statements in one’s own interest. Promissory estoppel: the limits of Luo Xing Juan v Estate of Hui Shui See

In Chan Sung Lai v Chan Sung Lim Paul ([2015] HKEC 1366) a father and his son (the plaintiff) held two properties as investments. Flat A was held by them as joint tenants and flat B was held by them as tenants in common in equal shares. A dispute arose as to the beneficial ownership of the properties. The father sought to establish that the properties were held on trust for him as sole beneficial owner. He relied on a declaration that he made long after the purchases to the effect that he was the sole beneficial owner. Deputy Judge Saunders held that this post-acquisition statement in his own interest was inadmissible (Shepherd v Cartwright followed in Hong Kong in Overseas Trust Bank v Lee See Ching Jong) ([88] – [90]).

The son sought a declaration that there was a common intention constructive trust so that flat A was held on trust for him as sole beneficial owner and that flat B was held on a beneficial joint tenancy. He relied on an alleged promise by his father that he would be the sole beneficial owner on his father’s death. This failed: there was clear evidence to show that the beneficial entitlement followed the legal title ([122] – [126]).

The son also sought to rely on promissory estoppel as articulated by the Court of Final Appeal in Luo Jing Xuan v Estate of Hui Shui See. This failed. The relationship was different: the parties were father and son (not an engaged couple); they had not used a company to hold the title. Where was the legal right the enforcement of which would be extinguished / suspended? No such right could be identified. In any event, there was no sufficiently clear representation, nor any evidence of detrimental reliance ([127] – [135]).

Michael Lower

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