HUI TSZ KIN v. NG KA YAN aka NG KA YUN KAREN

DCCJ 1932/2023

[2023] HKDC [1586]

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1932 OF 2023

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

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

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

DECISION

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

A. INTRODUCTION

1.  This case concerns the entitlement to a sum of HK$1,182,677.64 (the “Sum”) paid by the Plaintiff into a joint account opened in the names of the Plaintiff and the Defendant (the “Account”) when they were boyfriend and girlfriend. After disagreements between the Plaintiff and the Defendant arose, the Defendant withdrew the Sum from the Account without prior notice to or consent from the Plaintiff. The Plaintiff seeks to claim back the Sum.

2.  Two applications are before this Court:

2.1  By a Summons dated 9 June 2023, the Plaintiff applies for summary judgment against the Defendant for, inter alia, a declaration that the Plaintiff is the owner of and has proprietary interest over the Sum, and an order that the Defendant pay the Sum to the Plaintiff.

2.2  By a Summons dated 6 October 2023, the Defendant applies for leave to amend the Defence.

B.  BACKGROUND

3.  The Plaintiff and the Defendant met in January 2022 and started dating in February 2022.

4.  In July 2022, the Plaintiff and the Defendant had an argument about whether the Plaintiff was being faithful to the Defendant. To reassure the Defendant, the Plaintiff proposed opening a joint account together with the Defendant so that she could know the Plaintiff’s financial situation.

5.  The parties disagree over whether the abovementioned discussion about opening a joint account included the Plaintiff saying to the Defendant that if the Plaintiff were unfaithful to the Defendant again, all the money in the joint account would be fully paid and belong to the Defendant as compensation (the “Alleged Representation”). The Defendant alleges that the Plaintiff did make the Alleged Representation whereas Plaintiff denies having done so. The Alleged Representation is central to the defence that the Defendant relies upon.

6.  On 1 August 2022, the Plaintiff and the Defendant opened the Account. At the time of account opening, the Plaintiff transferred HK$1,638,000 (of which the Sum formed part) from his own account into the Account. There is no dispute that the Defendant did not pay any money into the Account.

7.  According to the Plaintiff, the money in the Account was intended to and did belong to him, and the money could not be withdrawn by the Defendant without the Plaintiff’s prior consent. On the other hand, according to the Defendant, the Plaintiff’s intention was to allow the Defendant to access and use the money in the Account whenever she wanted.

8.  On 20 April 2023, the Defendant unilaterally withdrew the Sum of HK$1,182,677.64 from the Account without prior notice to or consent from the Plaintiff. Despite the Plaintiff’s requests, the Defendant has refused to return any part of the Sum to the Plaintiff.

9.  The Defendant claims that she took the Sum because the Plaintiff had been unfaithful to her in April 2023 by installing Telegram on his mobile phone, which she describes as a “mobile dating application”. The Plaintiff says that whilst the question of whether he was faithful or not is irrelevant to the dispute, he was not unfaithful, and he suspects that the Defendant herself may have been unfaithful.

10.  According to the Plaintiff, the Defendant’s refusal to return the Sum to him has caused severe financial difficulties for him.

C.  LEGAL PRINCIPLES

C1.  Summary judgment

11.  The principles regarding summary judgment application are well-established. See, for example, China Life Insurance (Overseas) Co Ltd v Li Xiaoming, HCA 570/2017, 11 December 2017, §§47, 50.

12.  In resisting an application for summary judgment, a defendant is not allowed to raise and rely upon a defence which has not been pleaded in his Defence. See Kaefer AG v Winfield Marine Services Co Ltd [2022] HKCA 807, §§30-32; Hong Kong Topkey Limited v Wintac (Hong Kong) Limited [2023] HKCFI 1711, §14.

C2.  Joint accounts

13.  In a joint account, the joint account holders are joint tenants in law. However, the beneficial interest in the account remains a matter that is to be determined by trusts law, with assistance from the presumptions of resulting trust and advancement, and depending on the relationship between the joint holders. See Paget’s Law of Banking, 15^th ed, §5.21.

14.  More particularly, in relation to the beneficial interest:

14.1  The general principle is that beneficial entitlement to funds in a joint account is to be determined by the common intention of the account holders. See Cheung Sai Lon v Cheung Sai Ha & Or [2020] HKCFI 2551, §20.

14.2  Where a sum of money belonging to one person is paid into a joint bank account, there is a presumption that the owner of that money does not make a gift of it to the account holder and accordingly the money is held on a resulting trust for the provider. See Cheung Sai Lon v Cheung Sai Ha & Or, §19.

14.3  The presumption will be rebutted if the circumstances give rise to a presumption of advancement, or by evidence that the owner intended to transfer the beneficial interest to the account holders jointly, or as the case may be to the other account holder solely. See Cheung Sai Lon v Cheung Sai Ha & Or, §19.

14.4  In drawing inferences of common intention, greater weight is to be given to the source of the funds in the joint account and the presumption of resulting trust in favour of the account holder who provided the funds. See Cheung Sai Lon v Cheung Sai Ha & Or, §20.

14.5  Thus, where all the money paid into a bank account held by two or more persons is provided by one of them, normally there will be a rebuttable presumption that all the money standing to the credit of the account is held on trust for the person who provided the money. See Lewin on Trusts, 20^th ed, §10-095.

15.  The above is consistent with the general principles in equity on gratuitous transfers of property. See e.g. Law Pak Fun v Tai Lee Fat International Ltd [2015] 4 HKLRD 339, §§26-27.

16.  The presumption of advancement does not apply as between a man and his female partner, even if they are living together as man and wife. See Lewin, §10-033.

D.  DISCUSSION

D1.  Amendment application

17.  The Defendant’s proposed amendments are at §4(3) of the Defence. The Defendant had originally pleaded that from the moment the Plaintiff was unfaithful to the Defendant for the second time, or from the moment when the Plaintiff admitted that he had been unfaithful for a second time, all the money in the Account “was fully paid and belonged to the Defendant as compensation” (§4(3)(a) of the Defence). The Defendant now seeks to plead alternatives to that primary case at §§4(3)(b) and (c) of the draft Amended Defence:

“(b) the Plaintiff has been estopped from claiming all the money in the Account, including the Sum; or alternatively

(c) the Plaintiff has waived his right to claim all the money in the Account, including the Sum”.

18.  Whilst the Defendant has taken out a Summons for leave to amend the Defence, the stance taken by Ms Natalie S.K. Yeung (appearing for the Defendant) is that this was done “not out of an admission of procedural irregularity but out of a commitment to transparency”: see the Defendant’s skeleton, §4. Ms Yeung also informed me at the hearing that her position is that even without the amendments, the Defendant can still rely on the doctrines of waiver and estoppel.

19.  I cannot accept Ms Yeung’s aforementioned position as being correct. I agree with Mr Keith Chan (appearing for the Plaintiff) that in light of Kaefer AG v Winfield Marine Services Co Ltd, §§30-32, and Hong Kong Topkey Limited v Wintac (Hong Kong) Limited, §14, referred to at §12 above, it is clear that the Defendant is not allowed to raise and rely upon a defence which has not been pleaded in her Defence. Further, as Mr Chan has pointed out, estoppel and waiver must both be pleaded. See Hong Kong Civil Procedure 2023, §18/8/15.

20.  As to the substance of the proposed amendments, I also agree with Mr Chan that the proposed new alternative pleas are problematic. They are bare assertions of estoppel and waiver without any particularisation, without even any cross-references to other paragraphs. I accept Mr Chan’s submission that whilst, for example, the Alleged Representation (which is pleaded at §2(2) of the Defence) is one candidate for founding the alleged estoppel, there is also another plea at §4(2) of the Defence that “the Plaintiff expressly orally and/or in writing that the Defendant could use and/or spend the money in the Account on various occasions”, and it is unclear from the draft Amended Defence as to which representation is alleged to have founded an estoppel.

21.  In §§27-29 of her skeleton, Ms Yeung stated that the Defendant seeks to rely on the Alleged Representation to found waiver and estoppel. Thus, Ms Yeung ultimately did not rely upon §4(2) of the Defence in either her written or oral submissions, and has not sought to rely on any representation from the Plaintiff that the Defendant could use and/or spend the money in the Account even if the Plaintiff had not been unfaithful. Nevertheless, I am of the view that I need to consider the Defence in its entirety in order to decide whether the proposed amendments are sufficiently clear and sustainable. Unfortunately, my view is that they are not.

22.  In any event, even if I leave aside the lack of clarity in the draft Amended Defence and even taking into account Ms Yeung’s clarification by submission, I agree with Mr Chan that the doctrines of estoppel and waiver still do not take the Defendant’s case any further.

23.  First, for both estoppel and waiver, there must be a clear and unequivocal representation or promise, and the language used must be precise and unambiguous. See Asia Shahid t/a International Business Point (Hong Kong) v China Ping An Insurance (Hong Kong) Company Limited [2023] HKCFI 1296, §§12, 17, 40. In particular, I bear in mind that if the Alleged Representation exists, the unfaithfulness of the Plaintiff is a condition subsequent (also known as a condition of defeasance or forfeiture). It is well-established that these types of conditions must be strictly construed. It must be possible for the Court, from the outset, to know with certainty the exact event the happening of which will result in the defeasance or forfeiture of the beneficial interest. See AN v Barclays Private Bank and Trust (Cayman) Ltd (2006) 9 ITELR 630, §§39-49.

24.  Yet the reference to the Plaintiff being unfaithful again in the Alleged Representation is inherently ambiguous. I agree with Mr Chan that whilst there may be some clear cases of what constitutes unfaithful behaviour, reasonable persons may also differ as to what behaviour would cross the line into unfaithfulness in a romantic context. As Mr Chan pointed out, the present factual context illustrates that latter possibility. The Defendant considers that the Plaintiff was unfaithful because he downloaded the app, Telegram, which the Defendant says the Plaintiff used to meet women. On the other hand, the Plaintiff says that Telegram is simply a messaging app rather than a dating app, and whether the Telegram app might be used to engage in unfaithful behaviour depends on who the Plaintiff uses the app to talk to. Whilst the Defendant insists that the Plaintiff’s downloading of the Telegram app demonstrates unfaithfulness, I agree with Mr Chan that not all reasonable persons would share that view.

25.  Whilst Ms Yeung pointed out that the Plaintiff had admitted to being unfaithful at one point (which I discuss further at §41.2 below), I agree with Mr Chan that this does not mean that the meaning of “unfaithful” in the Alleged Representation is sufficiently clear. The requirement for clarity and certainty is an objective test, and a subjective statement by a party does not provide the answer.

26.  Secondly, I agree with Mr Chan that it is inherently implausible that the Defendant relied on the Alleged Representation and was induced by the Alleged Representation to continue her relationship with the Plaintiff. It would be paradoxical for the Defendant to rely on the Alleged Representation, which relates to the possibility of the Plaintiff being unfaithful, to stay in a relationship with the Plaintiff. It is very difficult to see how a promise that the Plaintiff would give money to the Defendant to compensate her if he were unfaithful to her again would provide comfort to the Defendant when her concern was whether the Plaintiff would in fact remain faithful to her. Ms Yeung was not able to explain how it is plausible that there was detrimental reliance by the Defendant on the Alleged Representation.

27.  Thirdly, as Mr Chan rightly pointed out, the Defendant’s amendment application has been made at a late stage, and it was taken out only after the Plaintiff filed evidence in reply. There is no explanation for the delay, and indeed, as mentioned above Ms Yeung submitted that the Defendant does not even need to make this application. I do not consider there to be a satisfactory explanation for the lateness of the application to amend, which was taken out only less than two weeks before the substantive hearing of the Plaintiff’s summary judgment application.

28.  For the above reasons, I do not consider that the Defendant’s amendment application is meritorious or takes the Defendant’s case any further. I dismiss the Defendant’s Summons dated 6 October 2023.

D2.  Summary judgment

29.  Next, I turn to consider the Plaintiff’s application for summary judgment.

30.  As established by the authorities, the starting point is to consider the source of funds in the Account. In this regard, there is no dispute that all money deposited into the Account came from the Plaintiff, and that the Defendant did not contribute any money into the Account. I agree with Mr Chan that this gives rise to a presumption, as a matter of law, that the intention was not for the Sum to be gifted, but rather, it is held on trust for the payer, i.e. the Plaintiff.

31.  By way of defence, and in an attempt to rebut the abovementioned presumption, the Defendant seeks to rely on the Alleged Representation. See §§9-14 of the Defendant’s skeleton.

32.  I agree with Mr Chan that the Defendant has not raised any triable defence as a matter of law. I have already discussed the ambiguity in the concept of unfaithfulness in the Alleged Representation at §24 above. Despite her best efforts, Ms Yeung was unable to offer any real answer in this regard. This is sufficient to dispose of the Defendant’s proposed defence.

33.  In any event, I take the view that on the facts, the Defendant also faces very great difficulties, to the extent that I do not consider that there is a triable issue as to whether the Plaintiff had made the Alleged Representation or (for completeness, even though Ms Yeung does not appear to rely on it) a representation that the Defendant could use and/or spend the money in the Account even if the Plaintiff had not been unfaithful.

34.  First, the context is significant.

34.1  The Plaintiff and the Defendant had only known each other for about half a year before opening the Account.

34.2  The Plaintiff had very limited earnings and financial resources, and at the material time, he was a pharmacist trainee with a monthly income of only HK$9,000. The money that the Plaintiff deposited into the Account was what his mother had left him, and the Plaintiff received no financial assistance from his father. The Plaintiff rented an apartment with his younger brother and they shared the monthly rent of HK$16,000, so the Plaintiff needed the money from the Account for payment of rent. By contrast, the Defendant had a steady income as a kindergarten teacher and could support herself.

35.  I accept Mr Chan’s submission that the above context makes it inherently improbable that the Plaintiff intended to gift the entire amount of money in the Account (including the Sum) to the Defendant under any circumstances.

36.  Secondly, the Alleged Representation is a bare assertion with extremely few particulars, and which does not have supporting or corroborating evidence. I agree with Mr Chan that there is no real context of what led to the alleged telephone conversation, what exactly the Plaintiff is alleged to have said, and how the Defendant responded. There is only a very brief description at §15 of the Defendant’s 1^st Affirmation. The paucity of detail is striking.

37.  The lack of supporting or corroborating evidence is also of concern. I note Ms Yeung’s submission that the Plaintiff and the Defendant could have verbally discussed the matter rather than on WhatsApp, but I find it to be a point against the Defendant’s case that there is not even a single WhatsApp which references the Alleged Representation over the course of the year’s worth of WhatsApps exhibited by the Defendant. I would add that I do not consider the lack of supporting or corroborating evidence to be in itself fatal, and I do not base my views solely on this point, but it is one point of many which causes me concern.

38.  Further, it is well-established that it is for a defendant to condescend to particulars when seeking to show that there is an arguable defence or triable issue, and the Defendant cannot simply say that there were many verbal conversations and the matter should therefore go to trial to investigate what was said. See China Life Insurance (Overseas) Co Ltd v Li Xiaoming, §47.

39.  Thirdly, as Mr Chan rightly points out, it is not enough for the Plaintiff to have said something to the Defendant along the lines of the Alleged Representation. The Defendant must also raise a triable issue that there was an intention to affect the legal relations between the two parties, and the burden of proving the intention is a heavy one. See Ho Hon Piu v Liu Miu Kwai representing the estate of Ho Hon Ka (deceased) [2018] HKCA 784, §§20-21. Especially bearing in mind the context of the present case as discussed above, I accept Mr Chan’s submission that the Defendant cannot show any triable issue as to whether any statements made between the Plaintiff and the Defendant were intended to affect their respective beneficial entitlements.

40.  Ms Yeung emphasised that the Plaintiff and the Defendant had a loving relationship, and that this was not a commercial relationship. Ms Yeung argued that if the Plaintiff had made the Alleged Representation, I should accept that he intended to create legal relations: she described intention as being “looser” in romantic relationships than in commercial relationships. However, I do not agree.

40.1  First, Ms Yeung was not able to cite any authority which supports her proposition.

40.2  Secondly, as explained at §38 above, it has been held in a case concerning family members (which is also not a commercial relationship) that the burden of proving the intention to create legal relationships is a heavy one.

40.3  Thirdly, I agree with Mr Chan’s submission that the opposite of what Ms Yeung suggests is true: where the context is a loving relationship rather than a commercial one, one would not expect everything that one says to be actionable in Court and create a legal defence.

41.  Fourthly, I am of the view that the factual evidence before me shows that neither the Alleged Representation, nor the alleged representation that the Defendant could freely use the monies in the Account, existed.

41.1  Importantly, in a WhatsApp message on 20 April 2023 at 8:53:21 p.m., the Defendant herself admitted that she ought to return the Sum to the Plaintiff: “… 其實你之後點我都唔應該再去care 我又冇需要要咁多錢 我係應該俾返你 但我真係做唔到咁大方當冇事發生過” (emphasis added). Further, after the Plaintiff asked her to repay the Sum, the Defendant went on to say that she would “play” with the Plaintiff (“好 我同你玩”) by donating the whole Sum to charity in the Plaintiff’s name (“一陣放工我捐晒佢 你做咁 [expletives omitted] 野 當幫你積返到d陰德 放心會用你個名捐 send返張單俾你”). In my view, it is significant that the Defendant said she would use the Plaintiff’s name to donate the Sum to charity as that shows recognition by the Defendant that the Sum was the Plaintiff’s money. The Defendant has not been able to suggest how the abovementioned messages are consistent with the Alleged Representation or any part of the Defendant’s defence.

41.2  The Defendant relies on a WhatsApp message which the Plaintiff sent to the Defendant on 8 September 2022 at 5:14:35 p.m. a message saying “都話左你可以用我張卡”. The Defendant suggests that this is an example of the Plaintiff asking her to use the monies in the Account. However, the Plaintiff has given a clear and uncontradicted explanation about that message at §23 of his 2^nd Affirmation, namely that the Defendant had been complaining about how her mother never gave her money, and the Plaintiff sought to reassure her by saying that she could use his card for the Account on that occasion. Further, insofar as timing is concerned, I note that this message was sent prior to the alleged unfaithful installation of the Telegram app in April 2023, and thus I do not see how it can support any suggestion that the Alleged Representation had been made and that the Plaintiff had agreed to gift the monies in the Account to the Defendant if he were unfaithful again. At best, it seems to me that this particular WhatsApp can only support the alleged representation that Ms Yeung does not rely on, namely that the Defendant was free to use the monies in the Account. I discuss that in the next sub-paragraph.

41.3  Whilst Ms Yeung has focused on the Alleged Representation, for completeness I note that the Defendant has also alleged at §4(2) of the Defence and §17 of her 1^st Affirmation that she had blanket permission to access and use the money in the Account whenever she wanted. I do not find this suggestion at all sustainable since there is evidence from the Plaintiff (which has not been contradicted by the Defendant) that on each of the few occasions that the Defendant used money in the Account, she asked and obtained the Plaintiff’s specific permission to do so. This must have been because the parties’ intention was that the money in the Account belonged to the Plaintiff, and that any use of the money by the Defendant would require the Plaintiff’s specific permission.

42.  Finally, I turn to consider other points raised by Ms Yeung.

42.1  Ms Yeung argued that there were alternative methods for the Plaintiff to demonstrate his financial status to the Defendant, such as sharing his monthly bank statements, and that the decision to open the Account implies a motive beyond mere financial transparency. However, my role is not to adjudicate on the wisdom of the parties’ actions, and I do not consider that the possibility that the Plaintiff could have achieved his original objective in another, or even better, manner, is remotely strong enough to show that there is a triable issue as to whether the Plaintiff had made the Alleged Representation, which is the crux of the issue before me. In my view, the key difficulty for the Defendant remains that she cannot show that the Alleged Representation is sustainable as a matter of law or that there are any triable issues regarding the Alleged Representation.

42.2  Further, Ms Yeung places reliance on an alleged confession by the Plaintiff at §27 of his 2^nd Affirmation, where the Plaintiff recounts a telephone conversation on or about 20 April 2023 during which the Defendant said that if the Plaintiff agreed to confess that he had been unfaithful to her, she would return the Sum to him. According to the Plaintiff, he complied in the hope that the Defendant would return the Sum to him even though he had not (according to him) acted unfaithfully to her. However, the Defendant did not return the Sum to the Plaintiff, hence the present proceedings. I do not see how this conversation supports the plausibility of the Alleged Representation or casts doubt on the Plaintiff’s credibility. I agree with Mr Chan that this incident does not provide answers to the various points, legal and factual, discussed above, and that the fact that the Plaintiff was willing to say on affirmation something which at first sight may not seem particularly favourable to him does not undermine his credibility.

43.  For all the above reasons, my view is that the Defendant does not have an arguable defence and that there are no triable issues in the present case which ought to go to trial. I grant summary judgment in favour of the Plaintiff. I am conscious that I should not be approaching the case as a trial on affidavit, but the abovementioned WhatsApp messages are clear (in particular, where the Defendant admitted that she should in fact return the Sum to the Plaintiff), and I consider that I am entitled to take a view on them. Further, even if I am wrong on any point concerning the problems with the Defendant’s defence on the facts, there remain the problems as a matter of law to which no real answer has been put forward by the Defendant.

E.  CONCLUSION

44.  In the premises:

44.1  I make an order in terms of §(1) of the Plaintiff’s Summons dated 9 June 2023, and order that the costs of this action, including the costs of and occasioned by the Plaintiff’s aforesaid Summons, be to the Plaintiff on a party and party basis, with certificate for counsel.

44.2  I dismiss the Defendant’s Summons dated 6 October 2023, and award the costs of and occasioned by the aforesaid Summons to the Plaintiff on a party and party basis, with certificate for counsel.

45.  Having considered the Plaintiff’s Statement of Costs and the Defendant’s Lists of Objections, I summarily assess the Plaintiff’s costs of this action, including the costs of and occasioned by his application for summary judgment as well as the Defendant’s amendment application, at HK$170,000.