PRIMECREDIT LTD v. YEUNG CHUN PANG BARRY AND ANOTHER

CACV 246 /2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 246 OF 2016

(ON APPEAL FROM HCMP NO 2103 OF 2015)

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J U D G M E N T

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Hon Lam VP:

1.1.  1 I have the benefit of reading the judgments of Cheung and Kwan JJA in advance. I agree with them that we should allow the appeal and there should be an order in terms of [49] to [51] below.

1.2.   I agree with Kwan JA’s analysis regarding resulting trust and for the reasons given by Her Ladyship we should overturn the judge’s conclusion in that respect.

1.3.   As I see it, it is ultimately a question of the intention of the 2^nd Defendant (be it presumed or presumption rebutted) at the time when the Property was acquired (under the resulting trust analysis) or the common intention of the parents and the 1^st Defendant (under the constructive trust analysis).  Between the two, at least in a domestic context, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust: Drake v Whipp [1996] 1 FLR 826; Yuen Yat Shan Fiona v Sit Hin Kau [2005] 4 HKC 170 at [20]; Au Yul Lin v Wong Wang Hin Eddy [2013] 4 HKLRD 373; Stack v Dowden [2007] 2 AC 432 at [31][1].

1.4.   Further, in either case, the court should have regard to inherent probabilities in light of the surrounding circumstances at the time when the Property was acquired.  In the present case, the competing suggestions were: (1) the 2^nd Defendant together with the deceased father had beneficial interest in the Property and the 1^st Defendant was added as a joint tenant so that the Property would be passed to the son after the death of both parents; or (2) the 2^nd Defendant did not have any beneficial interest in the Property whilst the deceased father and 1^st Defendant held the beneficial interest in joint tenancy.  Whilst there is a presumption of beneficial interest following legal interest, thus the starting point is in favour of (2), one must have regard to the circumstances when the Property was acquired to see if (1) can be made out.

1.5.   In that connection, as Kwan JA highlighted at [46] below, the circumstantial factors (to which, with respect, the learned judge below failed to pay proper regard) strongly pointed in favour of the 2^nd Defendant retaining some beneficial interest in the Property.  It has to be borne in mind that the Property was the only property which the parents had.  It was not a case where the parents purchased an additional property in the name of their only son as his matrimonial home shortly before he got married or where they paid the down payment for the son’s home after he had established himself in life.

1.6.   Since Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2012] 1 AC 776, as far as Hong Kong is concerned, the modern approach on constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context, see Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985.  In a domestic context, particularly in relation to a matrimonial home, the court is not constrained in that exercise by pure direct monetary contributions to the purchase price, see the judgment of Baroness Hale at [69] in Stack.  In a Chinese setting, especially for the older generations, where explicit discussions on property rights within the family was not that common, the court has to pay more regard to circumstantial matters.

1.7.   In the present case, I also respectfully agree with Cheung JA there is sufficient evidence to support the conclusion that the 2^nd Defendant had a beneficial interest in the Property based on constructive trust.  Like His Lordship, I see nothing “nebulous” in the 2^nd Defendant having an intention to pass the Property to the 1^st Defendant upon death but retaining beneficial interest in the meantime.  The judge’s observation on such intention at [20] of judgment below is, with respect, plainly wrong.  The other matters alluded by Cheung JA further tainted the judge’s assessment of the case on constructive trust.

1.8.   I note that the charging order in favour of the Plaintiff was made in 2003 at a time when the father was still alive.  Apparently, no notice had been given to the parents regarding the charging order at that time.  The father passed away in 2012.  It was only in 2015 that the Plaintiff took steps to enforce the charging order by the present proceedings.  Counsel have not addressed us on the question if the making of the charging order in favour of the Plaintiff would have the effect of equitable severance.  There are conflicting local authorities: Ho Wai Kwan v Chan Hon Kuen [2015] 1 HKLRD 901 contra Malahon Credit Co Ltd v Siu Chun Wah Alice [1988] 1 HKLR 196.  We leave that issue open for debate on another occasion.

1.9.   However, it would be unimaginable that had notice been given to the parents in 2003 no step would be taken by the father to effect a severance of the joint tenancy to protect their interests in the Property.  As Kwan JA observed, under Order 50 Rule 2(2), in an application for charging order, the court may direct service on any interested person.  I agree with Her Ladyship that a co-owner, in particular a joint tenant, is an interested person.  The present case shows that given the potential impact of a charging order on the interest of the co-owners other than the judgment debtor, in the interest of justice notice should be given to such persons before making any order absolute.  This is a matter which I would like to bring attention to masters dealing with charging order applications.  Copies of this judgment shall be given to the Registrar of the High Court and Registrar of the District Court.

Hon Cheung JA:

2.1.   I agree with the judgment of Lam VP and the judgment of Kwan JA on the issue of resulting trust.

2.2.   I would add the following observations of my own in respect of two matters canvassed in argument.

Difference between the second limb of common intention constructive trust and resulting trust

2.3.   The first situation where common intention constructive trust may arise is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially.

2.4.   The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust.  In this situation direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust.  See the judgment of Lord Bridge of Harwich in Lloyds Bank Plc. v Rosset [1991] AC 107 at 132.

2.5.   What then is the difference between the second limb of common intention constructive trust and a resulting trust based on the payment of the purchase price of the property by a third party?

2.6.   A glimpse of the difference may be gathered from the two separate doctrines that have emerged from the cases on the rationale of a resulting trust.  The first view is that a resulting trust is in response to the absence of any intention on the part of the person providing the purchase price to benefit the recipient (‘the lack of intention analysis’).  As Lord Millett stated in the Privy Council case of Air Jamaica Ltd v Charlton [1999] 1 WLR 1399 at 1412 :

‘ Like a constructive trust, a resulting trust arises by operation of law, though unlike a constructive trust, it gives effect to intention. But it arises whether or not the transferor intended to retain a beneficial interest--he almost always does not--since it responds to the absence of any intention on his part to pass a beneficial interest to the recipient.’

2.7.   The second view, which is different from the first doctrine, is that a resulting trust arose from the presumed common intention of the parties (the ‘positive-intention analysis’).  Lord Browne-Wilkinson in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 2 All ER 961 at 989-990 stated :

‘ 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 transfers 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 effect to his presumed intention.’

2.8.   There are academic debates on which of the two doctrines on resulting trust is to be preferred : see a discussion of this topic in the Singapore case of Chan Yuen Lan v See Fong Mun [2014] SGCA 36 at paragraphs [38]‑[52] referred to in Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985 at paragraph 6.13.

2.9.   It is not necessary in this judgment to resolve these two opposite doctrines or the difference between the second limb of common intention constructive trust and resulting trust.  In my view, apart from resulting trust, the beneficial interest of the mother can also be asserted under the second limb of common intention constructive trust.  Even when there was no express agreement between mother and son, the intention of the mother at the time of acquisition must be a relevant factor.  Specifically, the mother’s evidence is, as summarised by the Judge, that it was intended that the property would pass to the son as the only male descendent after she and her husband passed away.  The proper inference to be drawn from this evidence is that the mother is the beneficial owner of the property during her lifetime.  In my view there is nothing incredible or inherently improbable about such an intention particularly in the context of a Hong Kong Chinese family where it is not uncommon that parents would acquire a property in the name of their children and yet retain control and beneficial ownership of the property during their lifetime.

2.10.   More importantly, there is the financial contribution by the mother.  The Judge was skeptical about the extent of contribution by the mother in the matrimonial home, the proceeds of which were used to acquire the property in question.  What the Judge seems to have overlooked is that the mother’s interest in the matrimonial home is not solely determined by her financial contribution but by reason of her status of a married woman.

2.11.   The Judge also questioned, if the mother is the beneficial owner, the need for the father to tell the son that he should allow the mother to stay in the property after the father’s death.  Again I do not see anything odd in such a reminder when the mother is not registered as an owner of the property.

2.12.   In any event, the mother’s interest is well established under resulting trust and as Kwan JA observed the Judge had erred on the issue of advancement.

Presumption of resulting trust being a weak presumption?

2.13.   Mr Alvin Tsang for the plaintiff argued that the presumption of resulting trust and the presumption of advancement are weak presumptions.  He referred to the Court of Final Appeal’s decision of Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605 where Stock NPJ at paragraph 53 described these two presumptions arose as a matter of default where there is no sufficient evidence to displace them.  While, Mr Tsang referred to authorities where the Courts have expressly described the presumption of advancement as a relatively weak presumption and can be rebutted on comparatively slight evidence (Pettitt v Pettitt [1970] 1 AC 777 per Lord Upjohn at 814, Cheung Pui Yuen v Worldcup Investments Inc (2009) 12 HKCFAR 31 per Litton NPJ at paragraph 10.18, Laskar v Laskar [2008] 1 WLR 2695 per Lord Neuberger of Abbotsbury at 2700 and Suen Shu Tai v Tam Fung Tai [2014] 4 HKLRD 436 at paragraph 10.17), he was unable to produce any authority at the hearing in respect of resulting trust.  After the hearing, he referred this Court to Vandervell v Inland Revenue Commissioners [1967] 2 AC 291 where Lord Upjohn at 312 C to F referred to resulting trust and stated :

‘ ...But this is only a presumption and is easily rebutted. All the relevant facts and circumstances can be considered in order to ascertain A’s intentions with a view to rebutting this presumption.’

2.14.   This passage was referred to with approval in Hotung v Ho Yuen Ki [2005] 4 HKLRD 558, at paragraph 134.

2.15.   I just wish to point out that as resulting trust operates in the absence of evidence of intention of the parties, it is not helpful to use adjective like weak to describe it.  In ascertaining the beneficial ownership of a party who provided the purchase price of a property acquired in another person’s name, the issue of financial contribution is clearly a most weighty consideration.  Resulting trust is still being relied upon to establish beneficial interest in authorities such as the minority judgment of Lord Neuberger in Stack v Dowden [2007] 2 AC 432 and adopted by the Singapore Court of Appeal in Chan Yuen Lan.

Hon Kwan JA:

3.  This is an appeal of the 2^nd defendant, Madam Wong Ho (“Madam Wong”), against the judgment of A Chan J handed down on 9 December 2016.  The 1^st defendant, Yeung Chun Pang Barry (“Yeung”) is her son. He and his late father, Yeung Sheh Luk (“SL”) have been the registered owners of a property in Richland Gardens, No. 80 Wang Kwong Road, Kowloon (“the Property”), holding the same as joint tenants.  He has become the sole owner by operation of law on SL’s death in 2012.  The Property is subject to a charging order absolute to secure a judgment debt owed by him to the predecessor of the plaintiff.

4.  The plaintiff, Primecredit Limited, applied to court in September 2015 to enforce the charging order against Yeung by an order of sale to discharge the outstanding balance of the judgment debt.  Madam Wong claimed to be a beneficial owner of the Property and was joined as a party to the proceedings.  She relied on common intention constructive trust and resulting trust to establish her interest.  The judge found after trial she is not a beneficial owner and made a declaration that Yeung is the sole beneficial owner of the Property.  He ordered the sale of the Property within 90 days and made consequential directions.  Hence, this appeal was brought by Madam Wong.

Background

5.  The relevant background matters, taken largely from the judgment below and other non-controversial facts, may be stated as follows.

6.  Yeung is the only son and youngest child of SL and Madam Wong.  He has four elder sisters.  SL and Madam Wong were married in 1953.  Their five children were born between 1956 and 1963.

7.  Like many others in Hong Kong, SL and Madam Wong worked hard and tried to save as much as they could to buy a property to live in.  At the material time, SL was a technician working in a dockyard.  Madam Wong was a casual worker in a canteen earning a very modest income.  In 1978, a property in Che Wah Building, No. 8 Po Ying Lane, Kowloon (“the Che Wah Property”) was purchased at $110,300 without the assistance of a mortgage.  It was registered in the sole name of Madam Wong.  The family moved into the Che Wah Property.

8.  As the children grew up, they needed a bigger home in mid 1980s.  With their limited financial resources, SL and Madam Wong decided to apply to purchase a property under the government sponsored Home Ownership Scheme (“HOS”).  At that time, SL and Madam Wong were in their fifties; Yeung was aged 21.  He was still studying and had a part-time job at a convenience store earning a small income. He was not financially independent.

9.  An application was made in the name of SL and Yeung and it was successful.  The Property was purchased in the joint names of SL and Yeung at $320,200.  A down payment of $270,000 was made and the balance was funded by a mortgage[2]. The sale and purchase agreement was signed in February 1985 and the assignment in June 1985.  As the Che Wah Property was in the course of being sold, they needed a bridging loan.  The judge found Madam Wong’s evidence of how a loan of $200,000 was obtained difficult to believe, but thought that a bridging loan was required and it is not critical where it came from[3].

10.  In November 1985, the Che Wah Property was sold at $240,000.  The proceeds were applied to pay off the loan.  As for the mortgage loan of $50,200, this was repaid by monthly instalments by the joint efforts of SL and Madam Wong and it was discharged in March 1988.

11.  SL and Madam Wong moved into the Property with their three unmarried children.  It remained their matrimonial home until SL passed away in 2012.  A year after moving in, the third daughter got married and moved out, followed by the fourth daughter two to three years later.

12.  In 1989, Yeung went to the United Kingdom to study quantity surveying, supported financially in part by his parents.  He returned to Hong Kong in 1993 on completion of his studies and lived with the family.  In 1995, he purchased a property in Cartwright Garden, Bonham Road, Hong Kong (“the Cartwright Property”) with his girlfriend, with a mortgage loan from the plaintiff’s predecessor, GE Capital (Hong Kong) Limited (“GE Capital”).  They got married in 1997 and he moved out of the Property.

13.  Yeung and his wife failed to keep up with the mortgage instalments in 2000 and voluntarily surrendered possession of the Cartwright Property for GE Capital to exercise its power of sale.  There was a deficit of $1,703,704.12 after deducting the proceeds of sale from their indebtedness.  GE Capital then brought proceedings against Yeung in HCA 3549/2003 and obtained a default judgment in October 2003.  In December 2003, GE Capital obtained a charging order absolute against the Property, at that time held in the joint names of SL and Yeung.  Yeung did not oppose the application for charging order absolute.  It was recited in the order that he was absent.  It is not clear on the available evidence whether the court had made directions under Order 50 rule 2(2), on making the charging order nisi in respect of the Property which was held in joint names, for the service of copies of the order to show cause and the supporting affidavit on SL, who was clearly an interested person mentioned in that provision.

14.  The business of GE Capital was transferred to the plaintiff when the former was wound up by members’ voluntary liquidation.  In 2013, the plaintiff obtained a court order that it be made a party to HCA 3549/2003 in substitution for GE Capital.

15.  GE Capital and the plaintiff did not enforce the charging order while SL was alive as it would not be possible to obtain an order for sale.  Nor did Yeung, whose wife is a solicitor (and is jointly liable for the mortgage debt), apply at any time to set aside the charging order absolute under Order 50 rule 7(1).  From December 2003 to August 2015, Yeung made regular payments of $3,000 a month to settle in part his indebtedness.  He paid a total sum of $416,000.

16.  The plaintiff later became aware of SL’s death in 2012 and issued an originating summons in September 2015 in the present proceedings against Yeung seeking vacant possession of the Property and an order for sale.  As in September 2015, the total indebtedness to the plaintiff amounted to $3,056,641.87.  The market value and the value for sale under repossession of the Property under the Secondary Market Scheme of the Housing Authority have been estimated at $4.3 million and $3.44 million respectively.  In December 2015, a master granted leave to Madam Wong to join in the proceedings as the 2^nd defendant.

17.  As it is the claim of Madam Wong that the beneficial ownership of the Property is different from the legal ownership, the burden of proof is on her to establish this.  Both Yeung and Madam Wong gave evidence before the judge.  She was 82 years old at the time and has some hearing problem.  The judge made no mention that her evidence was affected in any or any significant way on account of her old age.

Common intention constructive trust

18.  The judge first considered the evidence of Yeung and Madam Wong to see if there had been any agreement, arrangement or understanding reached between the parties that Madam Wong was to have a beneficial interest in the Property.  “The finding of an agreement or arrangement to share in this sense can only … be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.” (Lloyds Bank plc v Rosset [1991] 1 AC 107 at 132F to G, per Lord Bridge of Harwich)

19.  According to Yeung, he knew little about the acquisition of the Property.  He said his father told him that his name would be borrowed for that purchase.  He did not contribute to the purchase in any way and regarded the Property as belonging to his parents.  He put it this way in his own words: “I guess that [SL] did this for the traditional reason that he thought that real properties of the family should be passed on to male descendants (i.e. myself) upon his and my mother’s deaths.”[4]

20.  The judge found there is “little relevant evidence from Yeung in respect of the issue to be resolved in this case”.  In any event, he was of the view that Yeung “is clearly a witness not to be relied upon”[5]. He rejected Yeung’s evidence there was an oral agreement with the judgment creditor that no further action would be taken against him if he paid $3,000 a month to repay his debt.  He found Yeung’s explanation that he used the Property as merely his correspondence address unconvincing and thought it “quite possible that Yeung is residing at the Property”[6].  And the judge found the fact that Yeung did not defend the application for the charging order absolute “speaks volumes”.  He took into account Yeung is a “sophisticated person” married to a solicitor and reasoned that “there can be little doubt if the application was unfounded because the Property did not belong to Yeung,  he would have told his parents to oppose it.  His father was available to give evidence then.”[7]

21.  The judge stated “there is no evidence of the intention of SL or Yeung at the time of the acquisition of the Property.”[8]

22.  Madam Wong filed three affirmations.  As noted by the judge[9], the allegation of “common intention” only surfaced in her third affirmation.  In her two earlier affirmations, she appeared to be advancing a case on resulting trust based on her financial contribution to the purchase of the Property[10].  She said this about common intention in her third affirmation[11]:

“Being the sole registered owner of the Che Wah Property, I was not eligible to be an applicant under the said Home Ownership Scheme at that time[12]. Since [Yeung] is our only son, it was my and my late husband’s common intention that any real property belonging to myself and my late husband would eventually passed [sic] on to [Yeung] as the only male descendant of our family after both my and my late husband’s deaths. For the purpose of succession planning and for the purpose of increasing the chance of success in obtaining a HOS flat, an application was made in the name of my late husband and [Yeung].”[13]

“… according to the understanding of all of us in our family, the Property belonged to my late husband and myself, at least until both of us have passed away.”[14]

“… the common intention among the family is that my late husband and I were the beneficial owners of the Property. It is well understood among all the family members including [Yeung]. [Yeung] has no beneficial interest in the Property at all before both my late husband and I had passed away.”[15]

23.  The judge found that even in the third affirmation, the allegation of common intention is “nebulous”[16].  On balance, he was not satisfied there was any common intention at all[17].

24.  Mr Anthony Cheung, who appeared with Mr Marco Tse for Madam Wong here and below, sought to challenge this finding of fact of the judge.  This is a finding of primary fact, not even a finding of fact based on a process of inference.  What is more, it is a finding based on the credibility and demeanour of the witnesses.  It is well established that in this kind of situation the appeal court can only interfere if it is satisfied that the finding is plainly wrong.

25.  Mr Cheung referred us to the oral evidence of Yeung[18] and Madam Wong[19] on their explanation why Yeung’s name was used in addition to SL’s in applying to purchase a flat under the HOS.  The judge did not seem to mention specifically their oral evidence in this respect in the judgment, but the mere fact he did not do so should not lead to the conclusion that he had not taken this into account, bearing in mind that he had just heard the evidence in the two-day trial and the judgment was handed down in a little over a week.  More importantly, the oral evidence did not add significantly to the narrative of the evidence set out in the judgment.

26.  The repetition of the evidence given by Yeung and Madam Wong does not begin to show any palpable error of the judge to warrant intervention of his finding of fact.  The judge is entitled to take the view he did that the evidence on an arrangement or understanding reached among the three parties regarding common intention is so nebulous and vague that he cannot be satisfied on balance there was such common intention.

27.  Mr Cheung criticised the judge for not going through the two-limb analysis for common intention constructive trust, the first being an agreement, arrangement or understanding reached between the parties of the common intention that the property is to be shared with the claimant beneficially, and the second being the conduct of the parties as the basis from which to infer objectively a common intention to share the property beneficially.  In the latter situation, “direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust.” (Lloyds Bank plc v Rosset, at 133A to B) He contended that the judge had only applied the first limb and not the second.

28.  I do not think there is substance in this criticism.  The judge’s thinking process may be described as follows.  First, he took note of Madam Wong’s monetary contribution to the acquisition of the Property and said this in §18 of the judgment:

“Although the Che Wah Property was in Wong’s sole name, given her modest income, more likely than not it was acquired with the joint effort of her and her husband. However, on any view, Wong had contributed to the acquisition of the Property. This is the strongest point in her case.”

29.  In §19, he made reference to the proposition in Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1 at §§38 and 39 in these terms:

“To constitute a common intention constructive trust, it is essential for there to be a common intention on the part of the owner(s) and the claimant regarding their shared beneficial interest in the property …”

30.  I do not think the judge has cited the above proposition out of context, as submitted by Mr Cheung.  The similarity of Luo Xing Juan with the present case is that both are involved with three parties.  Having considered the evidence, and having come to the conclusion in §21 that on balance he cannot be satisfied there was any common intention on the part of the property owners (SL and Yeung) and the claimant (Madam Wong), the judge reached the view in §23 that this case depends on whether Madam Wong can make out her claim based on resulting trust, the principle being that where a person purchases property with his money but in the name of another, in the absence of contrary evidence, there is a presumption that the property is held by the owner under a resulting trust in favour of the person who paid for the property.

31.  I could detect no error of law in this approach. The judge had first approached the matter to see if a common intention constructive trust could be inferred, but found on the evidence a common intention of the owners and the claimant as to the basis on which the beneficial interests would be held could not be deduced.  It was in those circumstances that he considered resulting trust.  I have the benefit of reading in draft the judgments of Lam VP and Cheung JA.  I respectfully differ from them in that I do not think the judge was clearly wrong in holding on the evidence that common intention could not be inferred.  And, it is on the question whether there is contrary evidence (as the judge later found) to rebut the presumption of resulting trust in favour of Madam Wong that I have difficulty with the judgment below.

Resulting trust

32.  In §24, the judge mentioned the presumption of advancement as a counter-presumption to that of resulting trust.  But he did not apply the presumption of advancement, as Mr Alvin Tsang, who appeared for the plaintiff at the trial and on appeal, urged him to do, noting in §25 that “it is common ground that the modern approach is to rely upon the evidence to ascertain the intention of the person who paid for the property.”

33.  There is therefore no need to deal with Mr Cheung’s contention that the judge had erred in applying the presumption of advancement (because the judge evidently did not) as the law at the time the Property was purchased in 1985 was that this presumption did not apply to a mother and dependent child, and the law in Hong Kong was changed in that respect only in 2008 with the decision of Deputy Judge A To in Lee Tso Fong v Kwok Wai Sun [2008] 4 HKLRD 270.  In any event, it does not seem to me that this contention can be right.  All that was held in Lee Tso Fong was that the rationale for not applying the presumption of advancement to a mother and dependent child had changed over time from the days of Bennet v Bennet (1878-79) LR 10 Ch D 474 on account of changing socio-economic conditions and the recognition of the obligation of a mother to provide support for a child.  It was not in 2008, but much earlier, that changes in socio-economic conditions came about thereby removing the rationale for not applying this presumption (Lee Tso Fong, §§14 and 15; see also Suen Shu Tai v Tam Fung Tai [2014] 4 HKLRD 436 at §10.15).

34.  I turn to the evidence that the judge considered sufficient to rebut the presumption of resulting trust.

35.  Whilst the judge found there is insufficient evidence of the common intention of the three parties, Madam Wong has given evidence as to her intention at the time of acquisition.  She asserted that she was only in her fifties at the time, that Yeung was not meant to be a true owner of the Property when he became a registered owner, and that the Property would be left to Yeung only when SL and she had passed away[20].

36.  The judge however was “not inclined to accept her bare assertion when she faces the prospects of losing her home.”[21]  He found that apart from her bare assertion, there is nothing to counterbalance these aspects of the evidence that he has considered[22]:

(1)   Madam Wong intended to give the Property to Yeung her only son.  This is underlined by: (a) the fact that the name of one of her two unmarried daughters could have been used to answer the need to have an extra person named as purchaser; and (b) she made no attempt to have herself named as an owner of the Property after the Che Wah Property was sold[23].

(2)   From Madam Wong’s point of view, there was no risk in giving the Property to her son during her lifetime because it would be held jointly with her husband[24].

(3)   The plaintiff’s application for a charging order absolute was not defended[25].

(4)   The evidence of both Yeung and Madam Wong was that SL had told his son to allow his mother to continue to reside at the Property after he passed away[26].

37.  As the judge was of the view “there is nothing to counterbalance the above evidence” apart from Madam Wong’s bare assertion of her intention at the time of acquisition, the judge concluded that he “cannot be satisfied that Wong has discharged her burden of proof that her intention was that her son would hold the Property (or any part thereof) for her benefit” and “more likely than not, the purchase was a gift from her to her son.”[27]

38.  The above is a finding of secondary fact based on inference drawn from findings of primary fact.  But the finding of fact thus arrived at was not based purely on inferences, or otherwise has nothing to do with the witnesses’ demeanour or the trial judge’s having received the evidence at first hand.  So in this situation the appeal court would adopt the same approach as regards a finding of primary fact.  In other words, it should only disturb such finding of fact if satisfied that the same is “plainly wrong”. (Pang Ketian Sally v Tam Yuk Hung Annie, CACV 147/2013, 25 April 2104, §§26 to 32)

39.  I also bear in mind the well-known statements of Lord Hoffmann in Piglowska v Piglowski [1999] 1 WLR 1360 at 1372D to H on the evaluation of facts by a trial judge as an inherently incomplete statement of the impression upon him by the primary evidence, that his expressed findings are surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance, of which time and language do not permit exact expression but which may play an important part in his overall evaluation.

40.  Last but not least, what weight should be given to a particular piece of evidence is a matter for the trial judge.

41.  With the above guiding principles, I examine the evidence regarded by the judge as sufficient to counterbalance Madam Wong’s evidence of her intention.

42.  The judge attached importance to Madam Wong’s evidence that “she intended to give the Property to her only son.”  But she had adamantly denied it was meant to be an outright gift and had throughout qualified that by saying that the Property would be left to her son only when she and SL had passed away.  The fact that the name of one of her unmarried daughters could have been used but was not, and that she made no attempt to have herself named as an owner after the Che Wah Property was sold cannot be regarded as inconsistent with an intention that the Property would eventually be given to her son upon SL’s death and her own.  The judge would appear to have misdirected himself as to the effect of certain evidence which he understood to support his conclusion (Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §45).

43.  The fact that there was no risk from Madam Wong’s point of view in putting the Property under Yeung’s name during her lifetime as Yeung would be a co-owner with SL is likewise a neutral factor.  It is equally consistent with an intention to leave the Property to Yeung only on the parents’ demise.

44.  As for the fact that the plaintiff’s application for a charging order absolute was not defended, Madam Wong gave evidence she only knew about the order at the end of 2015[28]. This was supported by Yeung’s evidence[29]. The judge has made no finding as to her state of knowledge.  It would not be right to draw an adverse inference against her premised on her choice not to defend the application when there was no finding she had known of the order long before the plaintiff sought to enforce it in September 2015.

45.  As for the evidence that SL had told Yeung to allow Madam Wong to continue to reside in the Property after SL passed away, the judge took the view this would militate against the proposition that Madam Wong is a beneficial owner.  But there could well be other cogent reasons why SL should find it necessary to enjoin or exhort his son before his death to allow Madam Wong to continue to live in the Property.  It was not explored in evidence with Yeung or Madam Wong.

46.  The judge did not mention the inherent probabilities in his evaluation of the facts when he considered whether there is sufficient evidence to rebut the presumption of resulting trust in Madam Wong’s favour.  We are here concerned with a couple in their fifties with limited financial resources, who had spent a substantial part of their resources in the purchase of a property as their matrimonial home.  At the age of 51, Madam Wong could reasonably look forward to a number of years ahead.  Their son was then aged only 21, had not completed his studies and had not got married.  Even allowing for the Chinese traditional thinking of leaving real property to the male descendant, this would likely happen on the demise of the parents, it would not be so likely for an immediate gift to be made to the son in these circumstances.  Similar doubts were raised by Nourse LJ in McGrath v Wallis [1995] 2 FLR 114 at 121H – there was no real reason for the parent’s wishing to divest himself of his interest in the property and no special reason for the parent’s wishing to benefit the child at that time.

47.  When Madam Wong’s evidence of her intention is considered against the context of inherent probabilities, there is really nothing so inherently incredible about her assertion.

48.  The judge has misdirected himself on the evidence and did not appear to have considered the inherent probabilities in his evaluation of the facts.  Even though this court does not enjoy the advantages of the judge who received the evidence at first-hand, I am nevertheless satisfied he is plainly wrong in his conclusion on the facts that there is sufficient evidence to rebut the presumption of resulting trust in favour of Madam Wong.

49.  I would allow the appeal of Madam Wong, set aside the declaration that Yeung is the sole equitable and beneficial owner of the Property, the order for delivery up of vacant possession, the order for sale of the Property, and the consequential directions.

50.  I would also set aside the costs order below and make an order that the plaintiff is to pay the costs of Yeung and Madam Wong of the action.

51.  Costs of the appeal should follow the event.  There would be an order nisi that the plaintiff is to pay Madam Wong’s costs of the appeal.  I am not minded to give a certificate for two counsel for the appeal.

52.  No relief has been sought by Madam Wong in the court below or on appeal regarding any declaration in her favour[30] or the setting aside of the charging order absolute.  I think it would be best for her to pursue such remedy as she may be advised in other proceedings.