Liu Wai Keung v Liu Wai Man

Court of First Instance
High Court Action No 1106 of 2011
Godfrey Lam J
16–19, 22–23 April, 30 September 2013

Beneficial ownership —common intention constructive trust established

The plaintiff (“P”) and defendant (“D”) were siblings. P set out that their family decided in June 1981 to buy a new family home (the “Property”) and agreed that P would pay for the purchase and the Property would belong to him. P gave a large proportion of his salary to his parents towards this purpose. The Property was then purchased with a mortgage taken out on preferential terms that were available to D, who then worked in a bank; D became the registered owner. P funded the monthly mortgage instalments and an early partial repayment of the loan in 1983. From mid-1987, P lived there with his wife and their children, and paid all outgoings until 2012 when the Property was sold for redevelopment in early 2013.

D had also lived in the Property since late 1987, but in 1992, she and her son moved out into rented accommodation. In 2011, P brought proceedings against D claiming she held the Property on a constructive trust for him absolutely. D asserted that the Property was hers as she, and not P, had funded it, and she and their father had decided to buy it without P’s involvement. Plus, since P had asked her to assign the title to the Property to him in about 1998–1999, the action was time-barred.

Held, giving judgment to P, that, inter alia:

On the evidence, there was a common understanding and intention formed by the family that a property would be purchased, with the down payment to be funded by P’s savings and a mortgage loan from the bank on preferential terms available to D. On the basis of this understanding and intention, P financed the purchase of the Property and had been in continuous occupation of it and paid all outgoings until 2012. Accordingly, P had altered his position in reliance on the common intention, and it would be unconscionable for D to assert her legal title to the Property against him.

P’s action was not time-barred. Where the legal estate was vested in the trustee, the relevant property was “in [his] possession”. He held the legal estate qua trustee with the equitable estate being vested in the beneficiary. 


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