Posts Tagged ‘intention’

Gift or trust: proving the relevant intention

October 16, 2017

Leung Wing Yi Asther v Kwok Yu Wah ((2015) 18 HKCFAR 605) arose out of ancillary relief proceedings on the divorce of H and W. W was the daughter of F, a highly successful businessman. In 2005 F transferred shares in his company to W. The result of this transfer, and a 2006 issue of further shares to W arranged by F, was that W had 20 million shares in F’s company. H argued that these shares should be regarded as an asset of W for the purposes of the ancillary relief proceedings.

F and W argued that F had not given the shares to W but remained the sole beneficial owner of them. They pointed to the way in which, even before 2005, F had transferred shares to his children but later insisted on their re-transfer to him. They also pointed to the company’s 2012 purchase of two very valuable properties. The divorce proceedings had already begun by then. F and W argued that F would not have enhanced the company’s value in this way had he thought that part of the gain would go to H.

H succeeded at first instance and in the Court of Appeal. In the Court of Final Appeal, F and W argued that the first instance judge had mistakenly considered that he should decide on F’s objective intention in making the transfer. Stock NPJ agreed that the judge had to ascertain F’s subjective intention; in the absence of an express declaration this, ‘requires an objective inference drawn from the parties’ words and conduct’. The presumptions of resulting trust and advancement are only relevant where there is no evidence of actual intention ([53]). The judge had, however, taken the right approach to this question.

F and W also argued that the first instance judge had not given due weight to the 2012 acquisitions by the company when considering F’s intention. This conduct, though it post-dated the transfer to W, was admissible as evidence of F’s intention in making the transfer. That said, ‘contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.’ ([56])

Michael Lower





No tenancy where there is no intention to create legal relations or where the landlord is not excluded

November 17, 2014

In Heslop v Burns ([1974] 1 WLR 1241, CA) T allowed a family (Mr and Mrs Burns) to live rent-free in a house he owned for many years. He covered all of the outgoings. This action was inspired by sympathy and affection for them. When T died, his executors argued that they were licensees and sought to evict them. Mr and Mrs Burns argued that they had been tenants at will. If this succeeded, they would be able to rely on the Limitation Act 1939 to resist eviction.

The Court of Appeal found that they were licensees and not tenants. There was no intention to create legal relations; the arrangement was an instance of ‘generosity on a very large scale’ (Roskill LJ at 1249). Roskill LJ observed:

‘a licence will be more readily inferred than a tenancy at will first where the advantage given to the suggested “tenant” is obviously intended to be personal to him, and secondly, following what Denning L.J. subsequently pointed out in Facchini v. Bryson [1952] 1 T.L.R. 1386 , 1389, where there has been something in the circumstances, such as a family arrangement, an act of friendship or generosity, or such like, to negative any intention to create a tenancy.’ (at 1248 – 9)

Further, the evidence showed that T felt entitled to come and go to the property as he pleased; there was no intention that his right to possess should be excluded by the arrangement.

Michael Lower