Lui v Chong

An assent transferring land into joint names does not, without more, establish a beneficial gift. Its effect depends on the transferor’s true intention, assessed from the instrument and all surrounding evidence. An assent normally transfers the legal estate and preserves equitable interests off the title, but it can transfer beneficial title where that is intended. A certificate of value may support an inference that value was transferred, but is only prima facie evidence and may carry little weight where the document is poorly drafted or uses wording inconsistent with a gift. An appellate court may uphold the result despite errors in treating individual items of evidence where those errors are immaterial to a conclusion supported by the evidence as a whole.

The claimant, acting as personal representative of Mrs Foo Man Tsang Chong’s estate, brought proceedings concerning property conveyed into the joint names of Mrs Chong and her son, the defendant, by an assent dated 5 September 1984. The defendant claimed sole beneficial ownership by survivorship. The Central London County Court declared that he held the property on bare trust for the estate and ordered him to pay 85% of the claimant’s costs, including £8,000 on account.

The defendant appealed against those parts of the order. The central issue was whether the assent was intended to confer a beneficial joint interest or merely to place the legal title into joint names for administrative convenience.

Mr Justice Henderson gave the substantive judgment. Lord Justice Wilson and Lord Justice Ward agreed.

1. Disposition. The appeal was dismissed. The declaration that the defendant held the property on bare trust, together with the challenged costs orders, stood. The alternative issues of undue influence and mistake were not determined because they were unnecessary to the result.
2. Effect of the assent. The normal function of an assent under section 36(1) of the Administration of Estates Act 1925 is to transfer the legal estate from a personal representative to a person entitled to it, beneficially or as trustee. Section 36(7) gives statutory effect to the assent as a curtain for a purchaser, keeping equitable interests off the title. Nevertheless, an assent may transfer beneficial title where that is the true intention. The absence of express wording identifying beneficial ownership therefore required the intention to be inferred from the whole evidence.
3. Evidence. The claimant and the estate bore the burden of proving, on the balance of probabilities, that Mrs Chong intended to retain the beneficial ownership rather than make a gift. The certificate of value was at least prima facie evidence of a transfer of value, but its weight was slight because it might have been included merely to avoid doubt and its wording was not the appropriate form for a gift. The judge was wrong to treat it as wholly insignificant. His inference from the solicitor’s 1988 retirement letter was also unwarranted; the letter was neutral and had no probative value on beneficial ownership.
4. Overall assessment. Those errors were minor in the context of the evidence as a whole. The family’s unchallenged evidence about retaining the property as a shrine and family refuge, the analogous use of joint bank accounts for convenience, the absence of conduct showing beneficial co-ownership, and the absence of evidence that the solicitor advised Mrs Chong about the consequences of an equitable gift supported the conclusion that the defendant was intended to act as custodian, not as beneficial co-owner.

1. Court of Appeal (Civil Division). On 21 April 2010 the court dismissed the defendant’s appeal and upheld the material parts of the order: [2010] EWCA Civ 398.
2. Central London County Court. On 6 March 2009 HHJ Wakefield declared that the defendant held the property on bare trust for the claimant as personal representative and ordered payment of 85% of the claimant’s costs, including £8,000 on account.