Legal tenancy in common: contractual interpretation

In Lam Kwok Hing v Lam Siu Keung ([2015] HKEC 2228, CFI) four brothers were tenants in common in equal shares of land in the New Territories (‘the Land’). They were also co-owners of several adjoining lots. The brothers entered into four contemporaneous transactions in 1972 to re-arrange the ownership of the Land and the adjoining lots. The 1972 transaction concerning the land assigned it to two of the brothers, LLW (2/5 shares) and LTW (3/5 shares). A separate ‘Division of Property’ document, signed by the four brothers, confirmed the overall effect of the four transactions. In a  document called ” 執照 ” and dated 2 September 1974, the District Commissioner, New Territories certified that LLW owned 2/5 and LTW owned 3/5 of the shares in the Land. LLW died in 1976 and in 2005 his family contended that his share was 9/20 rather than 2/5 (that he owned an additional 1/20).

The court now had to decide on the parties’ respective shares. The fact that the 1972 assignment recorded LLW as owner of 2/5 provided the starting point. All of the relevant legal and factual material available to the court supported the contention of the LTW family that the assignment accurately recorded the parties’ contractual intention. The undivided shares reflected the physical division of the Land between the two families. the Division of Property and the 執照 confirmed the ownership intention. Finally, the Schedule of Property annexed to the Letters of Administration of LLW’s estate also referred to his ownership of a 2/5 share.

The case is interesting since there was no recourse to the concept of the common intention constructive trust. In Hong Kong, unlike England, disputes as to ownership shares can be resolved through a process of contractual interpretation that focuses on ownership of the legal title.

Michael Lower

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