 [2025] HKCA 237 has affirmed that detrimental reliance is required to establish surrender of beneficial interest in real property.

P and D1 are brothers who initially held equal beneficial interests in a property at Kotewall Road registered in D1’s name.  On Ds’ case, P, who had emigrated to Canada, surrendered his interest in a telephone call, refusing to contribute to mortgage payments and severing ties with Hong Kong.  In 2009, D1 sold the property.  P initiated proceedings against Ds in 2014, claiming a half share in the sale proceeds and asserting tracing claims against D2-D4 who allegedly received part of the proceeds to purchase another property.

After trial, B Chu J dismissed P’s claims, finding that he had surrendered his interest in 1998.  In dismissing P’s appeal, the Court of Appeal (Cheung, Au and G Lam JJA) upheld the trial judge’s findings that P’s words and conduct demonstrated his intention to surrender his interest.  Importantly, the Court clarified that while the term “surrender” was used, this was not a reference to any legal doctrine concerning a unilateral disposition of equitable interest.  The substantive legal analysis was properly founded on the principles of common intention constructive trust.  The Court of Appeal referred to the English Court of Appeal’s decision in 

 [2023] KB 345 which held that detrimental reliance is a key component in establishing a common intention constructive trust.  The Court of Appeal found that the fact that D1, among other things, shouldered all the responsibilities in relation to the property after the 1998 telephone call without contacting P again constituted sufficient detrimental reliance.

Richard Khaw SC and Jeffrey Lee, instructed by Raymond Lam & Associates, acted for the Defendants (Respondents).

Members

Recruitment

More on Recent Judgments

Is Detrimental Reliance Required for Surrender of Beneficial Ownership?

About

Members

Recruitment

What's New