SZE YUEN SAN JANE v. CHEUNG WAH HOP

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

Plaintiff: Mr. Bernard Mak, instructed by Hermes W.K. Lui & Co.

Defendant: Mr. Anthony Chan, instructed by Paul Kwong & Co.

Delivery of Judgment : 18 November, 1996.

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JUDGEMENT

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1. By Originating Summons issued on 20 November, 1995, the Plaintiff sought the sale by public auction of a flat held by herself and the Defendant as Tenants in Common in equal shares, delivery by the Defendant of vacant possession of the flat so that it could be sold with vacant possession, and distribution of the proceeds of sale. She asked that the proceeds of sale be divided after, inter alia, payment of the expenses of the sale, and redemption of a legal charge, equally between herself and the Defendant.

2. The Defendant gave notice of intention to defend. Each party filed an affirmation. The Summons was heard by Master Woolley on 15 February, and he gave directions in accordance with a draft submitted by the solicitors for the parties, his Order being subsequently amended by consent. The Order provided for the sale by auction of the flat and the discharge of the legal charge. The proceeds of sale were ordered to be divided into 3 portions, after deducting the cost of the auction and conveyancing fees, with one portion being paid to each of the parties, and the remaining portion to be paid into Court and held in an interest bearing account pending disposal. It was further ordered that all questions relating to the beneficial entitlement over the net proceeds of sale between the parties be tried before a Master in court, with leave to the parties to file a further affidavit relating to the issue to be tried, and that the parties attend for cross-examination on their affidavits.

3. The Plaintiff was cross-examined on her affirmation by Mr. Chan. In my view, any differences in her account between the affirmation and her evidence before me amounted to clarifications rather than contradictions. Her account of the way in which the flat came to be bought is that after they had been going out together for some time the Defendant asked her to marry him. Both had been divorced. She explained that, having had the experience of an unhappy marriage, she had suggested that they first live together without marrying. She explained that she needed security by way of a matrimonial home and that the Defendant agreed that they should buy a property. He asked her to make a contribution towards the purchase price, as he did not have sufficient money of his own. She agreed to mortgage another flat she owned and contribute $300,000. In his affirmation the Defendant said that his recollection was that her contribution was only $290,000, but I accept the evidence of the Plaintiff on the figure she contributed. The Plaintiff said that the Defendant further said that if she did contribute the suggested sum he would give her a half-share interest in the flat, and that he would be responsible for making the mortgage payments. Based upon these undertakings the Plaintiff mortgaged her flat and paid $300,000 towards the purchase price, with the Defendant contributing $545,000. A mortgage was obtained for the balance of $800,000 in joint names, the monthly instalments being $10,000. Subsequently, the Defendant paid all the mortgage payments. He had also paid the conveyancing costs and paid $100,000 for the flat to be decorated. It was common ground between the parties that the Defendant must have credit for those costs and expenses

4. For reasons which are in dispute, and in my view not relevant to my considerations, the relationship between the couple deteriorated, and they ceased to live together in September, 1993, without marrying. The Defendant thereafter continued to make the mortgage payments.

5. The Defendant was cross-examined on his affirmation by Mr. Mak. In that affirmation he said he had never proposed marriage to the Plaintiff, and denied that he ever promised her that she would have a half-share in the flat. He said that it was the intention that they would be jointly responsible for the mortgage payments. In cross-examination he claimed that the flat had been bought by the couple as an investment to make a profit. He further claimed that the Plaintiff had agreed that in view of the fact that he was contributing more than half the cash towards buying the flat, he would be able to make an appropriate deduction from the profit on the later sale of the flat. He agreed that none of this was in his affirmation.

6. I am satisfied that the Defendant's claim that the flat was bought as a investment is a pure invention for the purpose of the hearing before me. I believe the evidence of the Plaintiff. Her feeling for a need for security after one failed marriage is perfectly understandable, and the warm and generous offer by the Defendant to give her a half-share in the flat is equally understandable from a man persuading a woman to live with him with a view to subsequent marriage.

7. Mr. Chan, anticipating that I may accept the case for the Plaintiff, submitted that that situation should only be regarded as continuing until the couple parted, and that the promised gift of half-share in the flat cannot be considered to have continued thereafter. He submitted that the Defendant should have credit for the mortgage payments he made after that time. Mr. Chan produced an English authority in which in a similar situation. but by concession, the Court had made such an order. I do not consider it necessary to have authority for what I consider to be a commonsense approach.

8. I indicated to counsel that I accepted the evidence of the Plaintiff that the parties had proceeded with the purchase of the flat on the basis that she should have a half-share in it, but that I also agreed that the Defendant should have credit for the mortgage payments after the break-up.

9. Counsel then took advantage of an adjournment to save me calculating the financial consequences of my findings and informed me that, based on those findings, the sum to be awarded to the Plaintiff out of the money held in Court should be $44,066.64. I therefore order that that sum be paid out of Court to the Plaintiff, together with a proportionate part of the accrued interest in the account, and that the balance remaining be paid to the Defendant.

10. Costs of the action are to be paid by the Defendant, to be taxed if not agreed, with a certificate for counsel.