YU WANG YING v. CHAN KEUNG AND OTHERS

DCMP 1426/2021

[2023] HKDC 548

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO 1426 OF 2021

--------------------------------

--------------------------------

--------------------------------

---------------------

DECISION

---------------------

Background

1.  The Plaintiff in these proceedings is the wife of the 1^st Defendant (“D1”). The subject matter of the proceedings is a property known as Flat D, 33^rd Floor of Block 6, Belvedere Garden Phase 2, No 620 Castle Peak Road, Tsuen Wan, New Territories, Hong Kong (“the Property”). The Property is registered in the names of the Plaintiff and D1 as joint tenants.

2.  The 2^nd and 3^rd Defendants are companies licensed under the Money Lenders Ordinance (Cap 163) (“MLO”) in the business of providing loans secured by legal charges on property in Hong Kong. D1 executed a second legal charge in favour of the 2^nd Defendant (“D2”) on 30 November 2012 by which he charged his interest as one of the joint tenants of the Property as security for a loan (“the Second Legal Charge”). Later on 23 May 2014, D1 entered into another loan agreement with the 3^rd Defendant (“D3”) in which he was described as the ‘registered owner’ but did not charge or pledge his interest as one of the joint tenants of the Property as security.

3.  D1 started to default on making repayment of these loans from 2015. D2, being the creditor of D1, obtained a judgment on 29 August 2019 against the D1 in DCCJ 304/2019 for the sum of HK$2,552,358.48 plus interest and costs (“the Judgment”). Further, D3 obtained a charging order absolute in respect of the Property around February 2015 (the “Charging Order”) and had it registered at the Land Registry.

4.  On 10 August 2020, D2, via its solicitors, indicated to the Plaintiff its intention in enforcing the Second Legal Charge and to seek an order for the sale of the Property. The Plaintiff issued the present proceedings on 13 April 2021 against all Defendants and asserted her sole beneficial interest in the Property and sought declaratory relief to such effect.

5.  The Plaintiff claims that D1 has no beneficial interest in the Property as she contributed all of the deposits and mortgage repayments together with other outgoing expenses. The Plaintiff’s claim against D3 was settled on 23 August 2021 and the Charging Orders over the Property in favour of D3 have been withdrawn by consent.

6.  The main issue the Court has to decide is whether D1 has a beneficial interest in the Property or is simply holding a legal interest on trust for the Plaintiff. If a conclusion that D1 has no beneficial interest in the Property is reached, it will also be necessary to determine whether D2 is a bona fide purchaser without notice.

THE LEGAL PRINCIPLES ON BENEFICIAL OWNERSHIP

Common intention constructive trust

7.  Owing to the maxim of equity follows the law, the Plaintiff has the burden to show that the beneficial title of the Property departs from its legal title by reason of (i) common intention constructive trust and/or (ii) resulting trust. Stack v. Dowden [2007] 2 AC 432 was a case on beneficial ownership where the property was held under joint names. It was held that when a domestic property was conveyed into the joint names of cohabitants without any declaration of trust, there was a prima facie case that both the legal and beneficial interest in the property were joint and equal. The onus of proof lay upon the Plaintiff to show that the parties had held a common intention, which could be actual, inferred or imputed, that their beneficial interests be different from their legal interests. It was also held that in determining whether it is a common intention that a party shall have a beneficial interest, a holistic approach should be adopted by undertaking a survey of the whole course of dealing between the parties and taking into account of all conduct which throws light on the question what shares were intended.

8.  At §69 of the judgment in Stack, Baroness Hale identified many factors in addition to financial contributions that the court should take into account in a domestic context to divine the parties’ true intentions. This non-exhaustive list of factors has been helpfully set out by Mr Cheung, the Counsel for D2 in §12 of his written submission and I shall not repeat the same here.

9.  In Oxley v. Hiscock [2005] Fam 211, Chadwick LJ concluded that there are two stages in the process of determining the beneficial interest of a claimant by common intention constructive trust, which was endorsed by the House of Lords in Stack. The first stage is to examine whether there is a common intention that the claimant should have a beneficial interest in the property, which could be inferred by discussions between the parties at the time of the purchase. Should there be no discussion, an affirmative answer will readily be inferred from the fact that each has made a financial contribution (see §68 of Oxley). The second stage is to ascertain the extent of the parties’ respective interests in the property once the common intention as to beneficial ownership is established. At §71 of Oxley, his Lordship concluded that

“…in the absence of evidence that they gave any thought to the amount of their respective shares, the necessary inference is that they must have intended that question would be answered later on the basis of what was then seen to be fair.”

As such, the case law clearly establishes that it is possible to have a constructive trust with an indeterminate beneficial interest when the common intention was formed.

10.  By adopting this two-stage inquiry, Baroness Hale at §§54-56 and §68 in Abbott v Abbott [2007] UKPC 53 emphasized that the burden is on the party who alleges that the beneficial interest is not vested in the same manner as the legal interest in a property to establish the same.

Resulting trust

11.  In Ip Man Shan, Henry v Ching Hing Construction Co. Ltd [2003] 1 HKC 256, Deputy Judge Lam (as he then was) clearly set out the relevant principle when both the presumption of resulting trust and the common intention constructive trust are raised in ascertaining the beneficial interests. He referred to Drake v Whipp [1996] 1 FLR 826 where the Court of Appeal held that there would be no room for the operation of resulting trust in a case where it was clear that there was a common intention between the parties, and one of them has acted to his or her detriment in reliance on the common intention. This view was later adopted by Recorder Kotewall SC in Re Superyield Holdings Ltd [2000] 2 HKC 90 at 111D-F where he said,

“In my judgment, the court resorts to the presumption of resulting trust and advancement only where there is no acceptable evidence of the actual intention of the provider or providers of the purchase money as to the vesting and apportionment of the beneficial interest. Where there is evidence of actual intention upon which the court may act and where the intention proved is not consistent with the legal title, the court gives redress, no longer under a resulting trust, in my view, but under a common intention constructive trust or an equitable proprietary estoppel.”

12.  As such, it is not necessary in this judgment to resolve the issue of resulting trust in the event that a common intention constructive trust can be asserted.

EVIDENCE

13.  The Plaintiff has filed three affirmations with the first one explaining the background how she acquired the Property. The second and third affirmations were prepared after the filing of an affirmation from D2’s director, who revealed the fact that the Plaintiff and D1 were joint tenants of two other properties before they acquired the Property. The Plaintiff offered explanations in her 2^nd and 3^rd affirmations as to, amongst other things, how the two other properties were acquired, and her dealings with D2 when she found out about the Second Legal Charge and other loans D1 took out.

14.  The Plaintiff’s mother also filed two affirmations which the Court does not find particularly useful, as she was simply affirming what the Plaintiff said. A partner of the solicitors’ firm instructed by D2 also filed an affirmation to confirm his direct dealings with the Plaintiff after the sale of one of the three properties jointly owned by the Plaintiff and D1.

15.  D1 did not file any affirmation.

16.  In analysing the evidence, I shall start with D2’s case.

D2’s case

17.  Mr. Chan, the company director of D2, filed an affirmation on 9 June 2021. He gave evidence that the Plaintiff and D1 were joint tenants of another two properties before the acquisition of the Property. As revealed in the records from the Land Registry, the first property was Flat B on 22^nd Floor of Block 3, Phase 1 of Lung Mun Oasis, No. 43 Lung Mun Road, Tuen Mun (“Lung Mun”). It was purchased on 20 August 1998 at the price of HK$1,044,200 and sold at the price of HK$1,480,000 on 14 November 2011. The second property was Flat B on 17^th Floor of Block 5, Belvedere Garden Phase 3, No. 625 Castle Peak Road, Tsuen Wan (“Flat 17B”) and was purchased at the price of HK$3,120,000 on 31 August 2010.

18.  D1 took out different loans from D2 which were secured by legal charges on his interests in both Flat 17B and the Property in or around 2012. Chan averred there had been negotiations in relation to D1’s default in repayment of the loans from around November 2015 and D1’s sister was involved in the discussion. Chan further averred that later in August 2016, it was agreed amongst the Plaintiff, D1 and D2 that both Flat 17B and the Property should be sold for the purpose of settling D1’s indebtedness owed to D2.

19.  To procure the sale of Flat 17B, D2 agreed to grant two further loans of HK$150,000 and HK$120,000 respectively to D1 as he needed to refund some security deposits and rent advanced by his tenant for early termination of the tenancy (the “Sale Framework”). The cheques for these payments were drawn in favour of the Plaintiff.

20.  The sale of Flat 17B was completed on 22 February 2017 and was sold by the Plaintiff and D2 in exercise of their power of sale as second legal chargee. The Plaintiff received an aggregate sum of HK$2,060,308.99 representing half of her interest in Flat 17B.

21.  However, the Plaintiff and D1 failed to honour their obligation to sell the Property after the sale of Flat 17B. D2 therefore commenced legal proceedings against D1 with Judgment obtained on 29 August 2019.

The 1^st Affirmation of the Plaintiff

22.  The Plaintiff was born and raised in the People’s Republic of China until 1991 when she relocated to Hong Kong at the age of 21. She lived with her parents in Belvedere Garden, which is the same estate of the Property. She worked in a factory with monthly salary starting around HK$8,000-HK$9,000. She lived with her mother-in-law after she married D1 in 1993. She averred D1 has never given her any maintenance due to his gambling addiction and she had to rely on her own income. The Plaintiff gave birth to three sons who were born in 1995, 1996 and 2000, and she continued working in the factory over all those years in order to maintain the children. However she did not need to pay rent as she was living with her mother-in-law.

23.  The Plaintiff said she was interested in buying the Property in 2011 as it was located near her parents’ home and was suitable for her children. There were discussions between her and D1 but D1 told her he had no means to contribute towards the down payment. They nonetheless agreed to purchase the Property in their joint names, despite it was allegedly financed by a loan of HK$770,000 from the Plaintiff’s parents together with her savings and a mortgage loan to be repaid by the Plaintiff solely.

24.  She averred she contributed a total sum of HK$358,000 as a deposit before the formal agreement for Sale and Purchase was entered into on 28 July 2011. A mortgage loan in the sum of HK$2,506,000 was taken out in the joint names of the Plaintiff and D1, with the Plaintiff being the sole borrower. The balance of the purchase price together with stamp duty and legal fees were settled by way of the loans from her parents.

25.  The Plaintiff claimed that she was responsible for not only the monthly mortgage repayment at around HK$11,200 but also all outgoing expenses including utilities, management fees, rates and government rent. She also said that D1 moved out from the Property in around late 2014 or early 2015 and has never returned since.

26.  She further claimed that she had no prior knowledge of the Second Legal Charge or loan agreement D1 entered into with D2 and D3.

The 2^nd and 3^rd Affirmations of the Plaintiff

27.  In response to Chan’s affirmation, the Plaintiff did not dispute the records from the Land Registry that she and D1 jointly owned Lung Mun and Flat 17B at the relevant times. She nonetheless averred that the sale proceeds from the two other properties borne no relevance to the acquisition of the Property, but all of them were used to settle D1’s gambling debts.

28.  The Lung Mun property, as averred by the Plaintiff, was purchased in 1998 by D1 as a matrimonial home under the Home Ownership Scheme and it was D1 who made contributions to the mortgage repayment. The purchase of Flat 17B in 2010 was originally intended to replace Lung Mun as their matrimonial home and the acquisition was supported by loans from the Plaintiff’s parents, grandmother and two uncles. It took 3 months to renovate Flat 17B and after some deliberation with D1, the couple agreed to lease out the flat to cover the mortgage repayments and waited until Lung Mun could be sold at a reasonable price. Since Flat 17B was the couple’s joint property, the Plaintiff let D1 solely managed its affairs, which explained why she was not aware of the advanced rent paid by the tenant.

29.  The Plaintiff in her 3^rd affirmation claimed that it was actually her mother’s intention to buy a larger flat by selling the one she was living in and using her own savings to fund the balance. The Plaintiff duly found the Property for her mother but the Plaintiff’s father disagreed with the purchase at the time when the mother was prepared to sign the preliminary sale and purchase agreement (“the PSPA”). The Plaintiff said both she and her mother then decided to buy the Property in the name of the Plaintiff with money contributed by her parents towards the down payment. She approached D1’s sister since she needed a guarantor to secure a mortgage, but her sister-in-law would only agree to act as a guarantor on the condition that D1’s name be registered as a joint tenant in the Property even if the mortgage was going to be repaid by the Plaintiff solely.

30.  The Plaintiff agreed to put D1’s name under the Property. She averred D1 was present at the time when the Plaintiff signed the PSPA and not only was he well aware of the financial arrangements as stated in the foregoing paragraphs, he also acknowledged that his name was registered on the Property for the sole purpose of securing the mortgage.

31.  Despite the fact that Lung Mun was sold in a month after the purchase of the Property, the Plaintiff alleged the idea of having the family to move into the Property only came after she signed the PSPA. She explained the proceeds from the sale of Lung Mun was to pay off D1’s debts.

32.  As to the sale of Flat 17B, the Plaintiff did not deny that Chan did approach her to discuss the sale/auction of Flat 17B for D1’s indebtedness. However, she said she never agreed to sell the Property as it has always intended to be the residence of her and her sons. She agreed that she received HK$150,000 and HK$120,000 from D2 but she claimed those were interest rebate as there were overpaid interests of D1’s loans.

Analysis of evidence

33.  The question is whether the Plaintiff has exclusive beneficial interest in the Property. Since the Property was assigned to and registered under the joint names of D1 and the Plaintiff, the burden is on the Plaintiff to establish that there has always been a common intention between the Plaintiff and D1 that the Plaintiff is the sole beneficiary, owing to her contributions to the initial deposit and mortgage repayments.

Factual finding as to the Plaintiff’s contributions to the Property

34.  The Plaintiff described D1 as an irresponsible father who gambled away all the money and incurred debts that she needed to help repay. She had to work two jobs at a time not only to support the family, but also to save up money for the deposit of the Property and to pay the mortgage. While the Court believes that D1 was deep in debt in the relevant period of time, I bear in mind that no evidence was filed by D1 and the evidence of the Plaintiff in the present proceedings must not be taken at its face value.

35.  The Plaintiff explained that the Property was initially an intended purchase of her mother but she was encouraged to acquire it at the last moment when her father refused to let her mother entering into the PSPA. Interestingly, as claimed by the Plaintiff, the idea of moving into the Property as a new family home only formed after she entered into the PSPA. The Court finds that the explanations given by the Plaintiff are simply incredible. The Plaintiff portrayed the purchase of the Property as a spontaneous opportunity presented to her rather than a planned purchase, which helped her in explaining why D1’s name was used for registration in a hasty arrangement against her real intention. However, if the purchase of the Property was really intended as an exchange of her parents’ flat, how could the Plaintiff’s mother agree to enter into the PSPA without first putting her own flat on sale? And if the Property was intended for the Plaintiff’s parents, why was there desperation in buying the flat such that the Plaintiff had to ask D1’s sister to act as a guarantor? And why would D1’s sister agrees to act as a guarantor for a flat that was not intended, at that moment of time, to be a family home of D1 and the Plaintiff? In any event, it is difficult to believe that a woman who leads a frugal life would decide at a spur of the moment, to commit to a HK$3.58 million purchase.

36.  Further, in analysing the Plaintiff’s evidence, the Court bears in mind that the Plaintiff was a factory worker earning HK$16,000-HK$17,000 per month and her parents together with other relatives had lent her an unknown amount of money in funding her and D1’s purchase of Flat 17B less than a year prior. The Plaintiff said she had savings to contribute to the initial deposits totalling HK$358,000 and her parents were ready to lend her another HK$770,000. This triggers the question why she did not contribute her own savings when purchasing Flat 17B instead of borrowing money from her parents, grandmother and uncles. In any event, the Plaintiff’s passbook records did not tally with her averments. In relation to the deposit, the Plaintiff was unable to provide any transaction records of the initial deposit of HK$100,000 to D1 for him to make the down payment for the Property. There was only a withdrawal record of HK$200,000 against the alleged HK$258,000 showing on the Plaintiff’s passbook in late July 2011. In connection with the alleged parents’ loan of HK$770,000, the passbook records of the Plaintiff’s parents did not tally completely with the mother’s claim which only showed that a total amount of HK$401,000 was withdrawn between August and October 2011.

37.  I find the Plaintiff’s evidence on her earnings and her contributions to the initial deposits and mortgage repayments rather unsatisfactory. Not only did she fail to produce reliable contemporaneous documentary evidence to support her case, her evidence on her income was insufficient to support her case on her contribution to the Property in a realistic way. The Plaintiff claimed that D1 never provided her any maintenance and she had to work two jobs to maintain the children, yet there was no evidence showing how much she earned from her second job. In any event, I believe the alleged part time job she undertook would unlikely to yield a significantly high combined income for the Plaintiff, such that it would enable her to satisfy all of her financial commitments. The mortgage repayment for the Property at the relevant period was about HK$11,200 per month and her monthly income from being a factory worker was about HK$16,000-HK$17,000. Since it is the Plaintiff’s case that she contributed all the household expenses, including utility fees, rates and government rents together with management fees, I would say, with reference to the bills she produced as evidence, an amount in the region of HK$13,500 would already be a very conservative estimation of her monthly expenses. Her eldest son was around 16 years old in 2011 and since no evidence suggesting that any of her sons were working around that time, I assume the balance of her income would also have to cover the outgoing expenses of herself and the three sons who were still in primary and secondary schools. It raised doubt as to how much of her income she could afford to spend on the mortgage payments after paying all of the family’s outgoing expenses.

38.  In this connection, Mr. Cheung, Counsel for D2 pointed out that there had been regular deposits into the Plaintiff’s account of various amounts since November 2011, which were always made just within the week before the repayment of mortgage was due. The Court looked into these entries and formed a view that these credit entries were unlikely to be the Plaintiff’s monthly salary because first, it is strange that the total amount of the monthly repayment was always made over several transactions in odd amounts rather than a single transfer. Secondly, there were occasional deposits and withdrawals in large sums which went beyond the amount of the usual household expenses and mortgage: e.g. HK$40,232.77 and HK$48,000 deposited on 16 and 31 March 2012, respectively, along with three withdrawals of HK$25,330.02, HK$48,996.90 and HK$11,182.00 (the last one being the mortgage repayment) made on 27 March, 5 and 16 April 2012, respectively. Then, in January 2013, five deposits totalling around HK$180,000 were deposited into the Plaintiff’s account and at the same time, around HK$140,000 was withdrawn on various occasions in the same month. While I am not prepared to elicit all entries here nor speculate the source of these deposits, the passbook records demonstrate that the Plaintiff has not told this Court everything about the financial position of the family and it certainly is not as simple as she depicted. Monies in her bank account were certainly not exclusively derived from her own earnings.

39.  While there was no reliable evidence as to the financial position of the family as a whole, there was evidence suggesting that they were not as financially strained in 2011 as was depicted by the Plaintiff. D1 was never unemployed at any material time and I believe he must have a stable income in order to obtain mortgages for all the properties he held. It must be borne in mind that the Plaintiff and D1 were holding a total of three residential properties before Lung Mun was sold in November 2011 when the property market in Hong Kong was growing exceptionally strong. Even in the assumption that Lung Mun’s mortgage was paid up when the couple acquired Flat 17B in 2010, and that the rent received from Flat 17B could cover its mortgage repayment, the modest income the Plaintiff made could barely allow her to make the monthly mortgage repayment, let alone all the alleged loans from her parents and relatives.

40.  As such, I have some misgivings regarding the Plaintiff’s credibility in general. I am not satisfied that she paid for the all the deposit and every mortgage payment. She might have contributed to the deposit with her own savings and monies borrowed from relatives, but I do not believe that D1 did not pay her anything for the mortgage payments.

41.  My finding regarding what happened is as follows - D1 and the Plaintiff decided to purchase Flat 17B and the Property as investments during the housing market boom in the early 2000s. Lung Mun was sold shortly after the purchase of the Property and some, if not all of the proceeds, went to repay the loans incurred for those acquisitions. D1 who was employed with stable income, paid monies to the Plaintiff from time to time for household expenses, including the mortgage repayments. In fact, both the Plaintiff and D1 regarded the mortgage repayments as an item in the household expenditure to be met by whatever resources available to the family. There could be occasions where D1 could not pay enough money to the Plaintiff to cover everything when they resided together and I accepted that the Plaintiff would contribute all her earnings and savings to the family expenses after D1 moved out in 2015.

42.  On the balance of probabilities, I find that the Plaintiff fails to discharge the onus of establishing that she exclusively paid for the acquisition of the Property and the mortgage repayments.

Common Intention to the Plaintiff’s exclusive beneficial interest

43.  But even if I am wrong that the Plaintiff did contribute every cent to the acquisition of the Property, I bear in mind that the parties’ whole course of conduct in relation to the Property must be taken into account in determining the shared intention as to its ownership. In this connection, I find that the Court must not adopt a narrow view restricted to the acquisition of the Property in question, but to look into the history of the parties’ affairs in relation to their other assets and its distributions.

44.  The Plaintiff did not disclose any information as to the two other properties held together by her and D1 until after Chan revealed it in his affirmation. In her 2^nd and 3^rd affirmations, she explained those two properties had nothing to do with the acquisition of the Property and found it unnecessary to mention them in her 1^st affirmation. Such an explanation is perhaps too convenient to negate any common intention to the shared beneficial ownership between the Plaintiff and D1, and it departs from the legal principles as held in Stack and Abbott, which stated that the parties’ whole course of conduct in relation to the property must be taken in account in determining the shared intentions as to its ownership.

45.  So the question is how far does the Court need to examine this ‘whole course of conduct’? Baroness Hale in Stack stated more factors than financial contributions may be relevant to divining the parties’ true intention, which included inter alia, the reasons why the home was acquired in their joint names; the nature of the parties’ relationship; how the purchase was financed both initially and subsequently; how the parties arranged their finances; whether separately or together or a bit of both; how they discharged the outgoings on the property and their other household expenses.

46.  Due to the changing social and economic conditions, the Court in search of a couple’s shared intention in their beneficial interests of a property must not be confined in the light of the property in question. The deciding factors as to whose name is to be registered on the property could be determined by the couple’s earnings and borrowing power at the time of the acquisition, and the prevailing social policies such as property tax, stamp duty and repayment interest rate. In cases where the couple owns more than one property, the arithmetical calculation of how much was paid by each for the property in question is also likely to be less important. It will be easier to draw the inference that they intended that each should contribute as much to the household as they reasonably could and that they would share the eventual benefit or burden equally.

47.  Thus when the Court is to undertake a survey of the whole course of dealing between the parties, it could only be fair to take into account of all financial arrangements the couple made, not only for the property in question but all properties the couple held.

48.  The Court formed a view that not only did the Plaintiff deliberately hide the fact that she and D1 jointly owned Lung Mun and Flat 17B before the purchase of the Property, she was evasive in explaining the financial position of the family.

49.  The Plaintiff agreed that Lung Mun was purchased in 1998 by D1 and he made contributions for mortgage repayment, but it is beyond dispute that it was the intention of D1 that the Plaintiff should have interest in it.

50.  While it was asserted by the Plaintiff that the 2010 purchase of Flat 17B was intended to be the couple’s new matrimonial home, Lung Mun was not sold to finance such purchase and the family never actually moved into Flat 17B. The Plaintiff claimed that she needed to borrow money from her parents and extended family to fund the purchase and she gave no evidence of D1’s financial contribution to Flat 17B. However, it was clear from the Plaintiff’s 3^rd affirmation that D1 was intended to have a beneficial interest in it because first she averred that Flat 17B was intended to be the couple’s joint property; secondly, she and D1 agreed to lease out the flat to cover the mortgage repayments after it was renovated; thirdly, the parties also agreed they would not sell Lung Mun until it could be sold at a reasonable price; and fourthly, D1 was the one responsible in managing the rent income of Flat 17B.

51.  It was the Plaintiff’s case that D1 had a gambling habit all along and never contributed to the household expenses. It was also the Plaintiff’s case that debt collectors started to harass the family from 2007. Should Flat 17B have been funded entirely by the Plaintiff and her family, the Plaintiff failed to explain why D1’s name was put under the property, and why he would be given the responsibility in collecting rents from the tenant if he was not intended to have a beneficial interest. It is also equally absurd that the Plaintiff’s mother would suggest to the Plaintiff not to move in Flat 17B after she financed the purchase of this intended matrimonial home.

52.  Although the Court is left in the dark as to how much contribution D1 had made to Flat 17B (both initial and mortgage payments), the arrangement between the couple at that time allows the Court to infer that the purchase of Flat 17B was certainly not exclusively derived from the Plaintiff and her family, but was an investment agreed and contributed to by both D1 and the Plaintiff as husband and wife.

53.  The Plaintiff asked the Court to conclude an exclusive beneficial intention because she contributed to all the monies for acquiring the Property and she expressly made known to D1 that she would make all the mortgage repayments. The Court finds that such a statement is too equivocal to establish a sole beneficial ownership bearing in mind the usual financial arrangement of the couple and more importantly, the fact that the Property was actually used as a home for the family at least before D1 moved out in around 2015. On the evidence before me, notwithstanding the unsatisfactory state of evidence on the family finances, I am able to conclude that in light of the conduct of the Plaintiff and D1 in respect of all their properties during the whole course of dealing, they must have intended that every property would be a family asset in which both of them should have an equal beneficial interest, irrespective of their respective contributions, even Lung Mun, where the Plaintiff made no monetary contribution. The history of the Plaintiff and D1’s financial arrangement shows a clear intention that the acquisition of the Property was to be funded by the household account into which both parties would pool their resources together, where the Plaintiff might contribute more to the Property whereas D1 would contribute to other household expenses, e.g. mortgage repayment of other properties they jointly owned. I believe this is the implication when D1’s sister told the Plaintiff to have D1’s name put under the Property as to assert his interest in this matrimonial home. In any event, I am of the view that all evidence shows that it was never been the couple’s intention or agreement that their respective share of beneficial interest in any of their properties depended on their precise financial contribution, and thus D1 must always have an intended beneficial interest in the Property.

Other matters

54.  Before coming to this conclusion, I have taken into account the averment from the Plaintiff and D2 in regard to the Sale Framework, where D2 said the Plaintiff consented to sell Flat 17B and the Property. Such agreement was evidenced by the fact that the two cheques issued to the Plaintiff for the purpose of facilitating the refund of the deposits and rents advanced by the tenant of Flat 17B. Although the Plaintiff did not dispute to the acceptance of the cheques, she explained those two cheques totalling at HK$270,000 were refunds of overpaid interests in respect of loans took out by D1. This explanation is inherently improbable as it would be illogical for D2 to refund the Plaintiff interests that were overpaid by loans taken out by D1. On the balance of probability, I have no hesitation in accepting the evidence from Chan of D2 that the two cheques were drawn in favour of the Plaintiff which allowed her to ensure D1 to settle the arrears with the tenant of Flat 17B, and thus to have it proceed to sale.

55.  The Counsel for the Plaintiff Ms. Au also urged the Court to take into account that the Plaintiff was named as the sole borrower under the mortgage of the Property which was consistent with her intention in retaining the sole beneficial interest. I do not find this argument compelling as the Plaintiff gave evidence that the family had been harassed by debt collectors since 2007, and if this was true, it is unlikely for D1 to apply for loans given his credit history, and thus explained why the Plaintiff took out the loan in her sole name.

Resulting Trust

56.  Resulting trust operates in the absence of evidence of intention of the parties as Lord Brown-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 2 All ER 961 stated the followings:

“Under existing law a resulting trust arises in two sets of circumstances. (A) where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B… (B) where A transfer property to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest… Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effects to his presumed intention.”

57.  As such, no resulting trust can be asserted based on the Court’s finding that D1 did contribute to the mortgage repayment of the Property. But even if D1 did not make such contribution, the common intention of the shared beneficial interests between D1 and the Plaintiff in respect of all their properties left no room for the operation of resulting trust per Drake as discussed in §§11-12 hereinabove.

Conclusion

58.  In light of the above discussions, the Plaintiff has failed to persuade the Court that the beneficial title of the Property should depart from its legal title by reason of resulting trust and/or common intention constructive trust. In my view it was more likely than not that the Property was acquired with the joint effort of her and D1 through their salaries, savings and proceeds made from other properties they held with shared beneficial interest.

59.  It follows that the issue of whether D2 was an Equity’s Darling is no longer a concern in these proceedings.

60.  For the above reasons, I order that the Amended Originating Summons be dismissed and there be a costs order nisi that the costs of these proceedings be to D2 with certificate for counsel, to be taxed if not agreed.

61.  I thank both Counsels for their assistance.