The Court of First Instance’s decision in Liang Xiaozi v Tong Kwok Chung & Tung Wah Group of Hospitals [2026] HKCFI 363 offers timely insights regarding the Court’s cross-border jurisdiction over real property in the context of trusts and estates, and highlights the continued relevance of the Mocambique rule in Hong Kong.
Background
The plaintiff claimed beneficial ownership of three PRC properties previously registered in the name of the deceased, relying on an alleged oral agreement said to have been made in 1994, under which the properties would pass to her upon the deceased’s death (§§1, 38).
The deceased later executed a will in 2007 leaving the properties to Tung Wah Group of Hospitals, a charitable institution (§§16, 20). Importantly, prior to the commencement of the present action, maintenance proceedings had been brought by the plaintiff’s mother against the estate and Tung Wah, which were resolved by a court‑approved settlement on the basis that the properties formed part of the estate (§§22-24, 56).
The plaintiff commenced these proceedings only in 2020, seeking declarations based on the alleged 1994 agreement, constructive trust and estoppel, as well as an order compelling transfer of title to the PRC properties (§§24, 51).
Key Takeaways
1 Jurisdiction and the Mocambique Rule
The Court confirmed that the Mocambique rule applies in Hong Kong, such that courts generally lack jurisdiction to determine title to immovable property located in another jurisdiction (§§67–72).
However, the rule is subject to recognised exceptions. The Court held that it did have jurisdiction to determine:
(1) whether the alleged 1994 agreement existed and was enforceable; and
(2) whether any equitable rights (constructive trust or estoppel) arose as between the parties,
as these were personal claims founded on contract or equity, falling within the recognised exceptions to the rule (§§73–74).
By contrast, the Court declined jurisdiction over the claim seeking an order compelling the transfer of title to PRC properties. Such relief would be unenforceable under the lex situs, and the Hong Kong court could not effectively supervise its execution (§§75–76).
2 The Alleged 1994 Agreement: Credibility and Inconsistencies
The Court reiterated that claims against a deceased’s estate based on alleged oral agreements are subject to particularly close scrutiny, as the alleged promisor is no longer able to give evidence. In such cases, the claimant must adduce clear, cogent and reliable evidence of when, where and on what terms the agreement was made; unsupported testimony is insufficient (§80).
Applying this approach, the Court found the alleged 1994 agreement wholly incredible. It was irreconcilable with the deceased’s wills and fundamentally inconsistent with earlier family provision proceedings and a court‑approved settlement conducted on the basis that the properties formed part of the estate (§§85–94). The claim was therefore rejected as a fabrication (§113).
Conclusion
The claims against the Estate were dismissed in their entirety. The Court emphasised that informal family arrangements and alleged oral promises cannot displace clear testamentary dispositions without cogent and reliable evidence, particularly where earlier conduct points decisively the other way (§§118–122).
The decision reinforces both the jurisdictional limits of Hong Kong courts in relation to foreign land and the stringent evidential burden borne by claimants asserting oral agreements against estates.
Read the judgment here: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=176426&currpage=T
Mr Kerby Lau and Ms Valerie Kwok (instructed by Hugill & Ip) for the Estate.
Mr Joseph Wong (instructed by Philip KH Wong, Kennedy YH Wong & Co) for Tung Wah Group of Hospitals.
