Vincent’s rights

In considering how Vincent’s rights to the title in the property could be impacted by Maria’s rights, it is necessary to evaluate the law relating to enforceability of third party proprietary rights. The factual scenario indicates that Polly has entered into an enforceable contract to sell the property to Vincent, which complies with the requirements of section 3(2) of the Conveyancing and Property Ordinance (CPO) 1984 . Moreover, under the Land Registration Ordinance all land in Hong Kong is leased by the Government and registered at the Land Registry .

The register does not guarantee title but is a register of title deeds which means that a person’s title to property must still be proved by investigation of the title deeds . Failure to register will create a loss of priority. However, whilst Maria may not have a registered interest, she may nevertheless have an overriding interest in the property. Moreover, section 28 of the Land Titles Order asserts that overriding interests do not require registration and are binding on third parties .

The very fact of Maria’s occupation will not constitute an overriding interest per se, however if Maria has a proprietary right and is in actual occupation then she will most likely have an overriding interest . The overriding interest will be binding only if Vincent has knowledge of Maria’s occupation and should have made reasonable inquiries regarding the nature of her rights . The most likely form of proprietary right that Maria could potentially claim is a beneficial right in equity either under a resulting trust or constructive trust.

If we firstly consider resulting trusts, this type of trust usually involves contribution to the initial cost of the family home, which is registered solely in the name of another person . Equity does not presume an outright gift, but rather a presumption that the contributing party intended to retain a beneficial interest in the property (despite no evidence of actual intention). Whilst this approach has been criticised theoretically as the imposition of an “artificial presumption ”, it is arguably a necessary approach to protect third party interests.

This presumption creates an automatic resulting trust. With regard to Maria there is no evidence that she contributed to the purchase price or that there was an intention retain a beneficial interest, which can point towards an automatic resulting trust. Nevertheless, it is unlikely that Vincent will be able to rely on the presumption of advancement as established in the case of Dyer v Dyer as in the case of Bennett v Bennett it was held that the presumption of advancement did not extend to a gift between mother and child.