YAN HOW YEE v. YU KIN SANG PAUL AND OTHERS

HCA 3050/2015

[2020] HKCFI 2021

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 3050 OF 2015

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J U D G M E N T

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A.  INTRODUCTION

1.  On 7 November 2018, Deputy High Court Judge Bernard Man SC ordered that Judgment be entered herein in favour of the plaintiff: -

1.1  against the 1^st to 3^rd defendants, for payment of the sums of HK$833,000 and HK$1,260,000 together with interest thereon and the costs of this action; and

1.2  against the 1^st defendant, for transfer to the plaintiff of certain shares held by him in two Hong Kong companies, namely Haywood International Development Ltd. (company no 598922) and Yenwa Limited (company no 293626)[1].

2.  By an Order made on 6 December 2018, the learned Deputy Judge further ordered, inter alia, that the rate of pre-judgment interest payable by the 1^st to 3^rd defendants on the two sums of HK$833,000 and HK$1,260,000 is the commercial rate. 

3.  On the plaintiff’s application, a Charging Order: Notice to Show Cause was made by Master Kot on 1 February 2019 in respect of the 3^rd defendant’s liability to pay the said judgment debt, which was subsequently amended on 23 July 2019 (“Charging Order Nisi”). 

4.  The asset sought to be charged under the Charging Order Nisi is the 3^rd defendant’s beneficial interest in the property known as Flat 13, 20/F, Block D, King Shing Court (景盛苑), 8 Yat Ming Road, Fanling (“Property”) which was at all material times held by her and her husband, Mr Kwan Kwok Bun (“Husband”) as joint tenants.  

5.  This application was opposed by the 3^rd defendant on the ground that she has held no beneficial interest in the Property.  According to her, the Property was paid for by the Husband alone and he has at all material times been the sole beneficial owner of the Property. 

6.  Upon the filing of evidence, it was ordered, by consent, that the hearing of the Charging Order Nisi be adjourned before a Master for trial of the issue “whether the 3^rd defendant holds any beneficial interest in the [Property]” (“Issue”)[2]. The parties’ consent for such a trial before a Master was given under RHC O 36 r 1[3].

7.  This is my judgment on the plaintiff’s application following the trial.

B.  GENERAL APPROACH

8.  Section 20 of the High Court Ordinance (Cap 4) provides that:-

“(1) Where, under a judgment or order of the Court of First Instance, a person (in this section and in sections 20A and 20B referred to as the debtor) is required to pay a sum of money to another person (in this section and in section 20A referred to as the creditor) then, for the purpose of enforcing that judgment or order, the Court of First Instance may make an order imposing on any such property of the debtor as may be specified in the order a charge for securing the payment of any money due or to become due under the judgment or order.

(2) An order under subsection (1) is referred to in this Ordinance as a charging order.

(3) In deciding whether to make a charging order the Court of First Instance shall consider all the circumstances of the case and, in particular, any evidence before it as to—(a) the personal circumstances of the debtor; and (b) whether any other creditor of the debtor would be likely to be unduly prejudiced by the making of the order.”

9.  The principles governing the exercise of the court’s discretion as to whether a charging order should be made were stated by Lord Brandon in Roberts Petroleum Ltd v Bernard Kenny Ltd [1982] 1 WLR 301 at 307E-H, cited by DHCJ Le Pichon in United Asia Finance Ltd v Yiu Tsz Ngar [2015] 2 HKLRD 189 at §21, as follows:-

“(1) The question whether a charging order nisi should be made absolute is one for the discretion of the court.

(2) The burden of showing cause why a charging order nisi should [not] be made absolute is on the judgment debtor.

(3) For the purpose of the exercise of the court’s discretion there is, in general at any rate, no material difference between the making absolute of a charging order nisi on the one hand and a garnishee order nisi on the other.

(4) In exercising its discretion the court has both the right and duty to take into account all the circumstances of any particular case, whether such circumstances arose before or after the [making] of the order nisi.

(5) The court should so exercise its discretion as to do equity, so far as possible, to all the various parties involved, that is to say, the judgment creditor, the judgment debtor, and all other unsecured creditors.”

(6) The following combination of circumstances, if proved to the satisfaction of the court, would generally justify the court in exercising its discretion by refusing to make the order absolute: (i) the fact that the judgment debtor is insolvent; and (ii) the fact that a scheme of arrangement has been set on foot by the main body of creditors and has a reasonable prospect of succeeding.

(7) In the absence of the combination of circumstances referred to in (6) above, the court will generally be justified in exercising its discretion by making the order absolute.”

10.  Principles (6) to (7) above are irrelevant on the facts of the present case.  As to principles (1) to (5), the only issue for determination is whether the 3^rd defendant holds any beneficial interest in the Property. The parties have agreed that, if the Issue is answered in the positive, the Charging Order Nisi should be made absolute.  If however it is answered in the negative, the Charging Order Nisi should be discharged. 

C.  PARTIES’ CASES AND SUB-ISSUES

11.  Notwithstanding the dispute of facts over the Issue, no direction has been sought for pleadings to be served, as one would normally expect for a case of this nature under the modern practice. 

12.  The court was therefore left to conduct the trial on the basis of the relevant affidavits[4], the parties’ written and oral opening submissions, the oral testimonies of the 3^rd defendant and the Husband given at the hearing, as guided by the parties’ agreed list of sub-issues[5].

13.  It is common ground that the Property was acquired on 8 March 1996 by the 3^rd defendant and the Husband as joint tenants at the consideration of HK$834,200.  There is also no serious dispute that the Property was purchased by the couple under the Home Ownership Scheme operated by the Hong Kong Housing Authority. 

14.  As Ms Tam made clear in her opening, the 3^rd defendant’s case is that:-

14.1.  The Property is held on a resulting trust for the Husband’s sole benefit, as he was the only one who paid for its purchase (including all mortgage repayments and related expenses) and there was no intention for him to make a gift to the 3^rd defendant;

14.2.  Although the 3^rd defendant and the Husband were and are a married couple, the presumption of advancement is a weak presumption and would in any event be rebutted by a resulting trust and the Husband’s lack of intention to gift;

14.3.  Alternative to resulting trust, the Property was held on a common intention constructive trust, not based on there being any express agreement as to the beneficial ownership thereof, but on an inferred common intention that the Husband had no intention to make a gift to the 3^rd defendant based on his sole financial contribution towards the purchase of the Property; and

14.4.  On either case, the reason why the 3^rd defendant’s name was added as a joint owner and purchaser of the Property was only in order to satisfy the eligibility requirements for applications under the Home Ownership Scheme. 

15.  As Mr Wong submitted in his opening, the plaintiff’s case is, on the other hand:-

15.1.  Any presumption of resulting trust in respect of the Property would be rebutted by the presumption of advancement or the common intention of joint ownership by the 3^rd defendant and the Husband at the time of purchase;

15.2.  If the court should find that the Husband had made a gift to the 3^rd defendant in respect of the Property, there would be no need to apply any presumption; and

15.3.  If the court should find that there was no such gift, equity should follow the law and thus the 3^rd defendant does have a beneficial ownership in the Property. 

16.  Upon the court’s request, the parties have also provided the following agreed list of sub-issues:-

“In relation to resulting trust

1. Whether there was any contribution paid by [the 3^rd defendant] for the Property, whether by contribution towards down payment or contribution to mortgage payments?

2. Whether the Husband had any intention to gift any beneficial interest in the Property to [the 3^rd defendant]?

3. Whether [the 3^rd defendant]’s interest in the Property was held on resulting trust for the Husband, and if so, what proportion of [the 3^rd defendant]’s interest was held on trust for the Husband?

In relation to common intention constructive trust

4. Whether there was any express agreement between [the 3^rd defendant] and the Husband as to the respective beneficial interest in the Property?

5. Whether the conduct of [the 3^rd defendant] and the Husband gave rise to any objectively inferred common intention as between [the 3^rd defendant] and the Husband, on the beneficial ownership of the Property?

6.  Whether [the 3^rd defendant]’s interest in the Property was held on common intention constructive trust for the Husband, and if so, what proportion of [the 3^rd defendant]’s interest was held on trust for the Husband?”

D.  EVIDENCE AND ANALYSIS

D.1. The witnesses

17.  Both the 3^rd defendant and the Husband adopted their affidavit evidence as their respective evidence in chief and were subject to cross-examination at the hearing. 

18.  In assessing their evidence, I have borne in mind the well-established considerations of inherent probability and consistency with contemporaneous documents[6]. In determining the weight to be given to a particular piece of factual evidence, I have also considered the cogency of such evidence and the relevant witness’ source of knowledge. 

19.  Before going into the evidence, I shall first set out the well-established principles relevant to the determination of beneficial ownership of real properties where one of the joint owners contends that beneficial ownership differs from legal ownership. 

D.2. Applicable principles

20.  It is now firmly established that, in a domestic context, a party seeking to establish a common intention that the beneficial ownership in a property differs from the legal ownership has a heavy burden to discharge:-

20.1.  In Lo Kau Kun v Cheung Yuk Yun (unreported) HCA 152/2013; 24 February 2015, DHCJ Sakhrani held, citing Stack v Dowden [2007] 2 AC 432 (at §§9-10):-

“9. In Stack v Dowden [2007] 2 AC 432 it was held (Lord Neuberger dissenting) that where 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 any party seeking to establish that equity should not follow the law. Such a party had to prove that the parties had held a common intention that their beneficial interests be different from their legal interests, and in what way. In order to discern the parties’ common intention the court should look at the parties’ whole course of conduct in relation to the property. It was also held that the law had moved on from the presumption of resulting trust and many more factors other than the parties’ respective financial contributions might be relevant to divining their true intentions. When all relevant factors had been taken into account, cases in which the joint legal owners were to be taken to have intended that their beneficial interests should be different from their legal interests would be very unusual.

10. I would also refer to what Lord Walker said at paragraph 33 in Stack v Dowden (supra):

“In the ordinary domestic case where there are joint legal owners there will be a heavy burden in establishing to the court’s satisfaction that an intention to keep a sort of balance-sheet of contributions actually existed, or should be inferred, or imputed to the parties. The presumption will be that equity follows the law. …”

and also to what Baroness Hale said at paragraph 68:

“The burden will therefore be on the person seeking to show that the parties did intend their beneficial interests to be different from their legal interests, and in what way. This is not a task to be lightly embarked upon. …””; and

20.2. In Lung Ka Kuen v Chu Chun Yuk & Anr (unreported) HCA 2832/2015; 24 October 2016, DHCJ Marlene Ng (as she then was) likewise held (at §21):-

“21. The onus of proof lay on the party seeking to show that equity should not follow the law … and to establish (a) the joint owners intend their beneficial interests to be different from their legal interests and (b) in what way [see Stack v Dowden [2007] 2 AC 432, 439 (per Lord Hope) and 458 (per Baroness Hale) and Mo Ying at p 996]. The burden is a heavy one “because it will almost always have been a conscious decision to put the property into joint names, and committing oneself to spend large sums of money on a place to live is not normally done by accident or without giving it thought” [see Chen Tak Yee & ors v Chan Moon Shing & anor HCA954/2010 (unreported, 7 May 2015) para 16].”

21.  It is also important to note that, in the same context, the law’s emphasis has moved away from simply focusing on financial contributions in respect of the property (under a presumption of resulting trust analysis) to a more holistic approach looking at the parties’ entire course of conduct in relation to the property in question.  This may be seen from the various leading authorities referred to by Cheung JA in Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985 (at §§5.12-5.14):-

“5.12 At [31], Lord Walker [in Stack v Dowden] further stated that:

In a case about beneficial ownership of a matrimonial or quasi-matrimonial home (whether registered in the names of one or two legal owners) the resulting trust should not in my opinion operate as a legal presumption, although it may (in an updated form which takes account of all significant contributions, direct or indirect, in cash or in kind) happen to be reflected in the parties’ common intention.

5.13 Baroness Hale in Stack at [60] stated:

… The law has indeed moved on in response to changing social and economic conditions. The search is to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.

5.14 Specifically Baroness Hale in Stack stated more factors than financial contributions may be relevant to divining the parties’ true intention:

[69] In law, ‘context is everything’ and the domestic context is very different from the commercial world. Each case will turn on its own facts. Many more factors than financial contributions may be relevant to divining the parties’ true intentions. These include: any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names; the reasons why (if it be the case) the survivor was authorised to give a receipt for the capital moneys; the purpose for which the home was acquired; the nature of the parties’ relationship; whether they had children for whom they both had responsibility to provide a home; 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. When a couple are joint owners of the home and jointly liable for the mortgage, the inferences to be drawn from who pays for what may be very different from the inferences to be drawn when only one is owner of the home. The arithmetical calculation of how much was paid by each 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. The parties’ individual characters and personalities may also be a factor in deciding where their true intentions lay. In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection. At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.

[70] This is not, of course, an exhaustive list. There may also be reason to conclude that, whatever the parties’ intentions at the outset, these have now changed. An example might be where one party has financed (or constructed himself) an extension or substantial improvement to the property, so that what they have now is significantly different from what they had then.

22.  As submitted by Ms Tam, in Mo Ying, Cheung JA provided a useful summary of the modern approach in determining the existence of a common intention constructive trust in the domestic context of a joint name acquisition (at §5.16) which is applicable in the present case:-

“5.16 In Jones, Lord Walker and Baroness Hale in their joint judgment further elaborated on the applicable principles on disputes in respect of family homes in joint names and family homes in sole name. In respect of joint name homes, the principles are as follows. For ease of reading, I have arranged each of the five principles in separate paragraphs:

[51] In summary, therefore, the following are the principles applicable in a case such as this, where a family home is bought in the joint names of a cohabiting couple who are both responsible for any mortgage, but without any express declaration of their beneficial interests.

(1) The starting point is that equity follows the law and they are joint tenants both in law and in equity.

(2) That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change.

(3) Their common intention is to be deduced objectively from their conduct: “the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party’s words and conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party”: Lord Diplock in Gissing v Gissing [1971] AC 886, 906.

Examples of the sort of evidence which might be relevant to drawing such inferences are given in Stack v Dowden [2007] 2 AC 432, para 69.

(4) In those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, ‘the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property’: Chadwick LJ in Oxley v Hiscock [2005] Fam 211, para 69. In our judgment, ‘the whole course of dealing … in relation to the property’ should be given a broad meaning, enabling a similar range of factors to be taken into account as may be relevant to ascertaining the parties’ actual intentions.

(5) Each case will turn on its own facts. Financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended (as in case (3)) or fair (as in case (4)).”

D.3. The evidence

23.  Applying these principles, I now turn to assessing whether the 3^rd defendant has discharged her burden of establishing, on the evidence of the parties’ entire course of conduct in relation to the Property, that she has held no beneficial interest in it at all. 

(a)  Parties’ relationship and finances

24.  According to the Husband, he started full time employment in 1987 after completing a design course and started dating the 3^rd defendant in around 1992 to 1993. 

25.  Soon after the couple started dating, they began cohabiting together at the flat of the Husband’s mother where she was then living.  On 3 November 1994, the defendant and the Husband got married when they were both around 24 years’ of age.  They have not given birth to any children as of today. 

26.  At the time of their wedding, the couple would seem to be of relatively modest means: the Husband was then earning a monthly salary of around HK$14,000, while the 3^rd defendant was earning a monthly salary of around HK$7,000 to HK$8,000. 

27.  Acting out of a sense of duty, the Husband has shouldered all major living expenses by himself all along.   According to him, he loves the 3^rd defendant very much and, as a responsible man, never asked her to bear any family expenses.  Moreover, the 3^rd defendant would not ask to pay for the family expenses, the only exceptions being minutiae such as toiletries.  According to the 3^rd defendant, the couple never discussed about the responsibility for family expenses.  As to her own income, it was mostly spent on clothes, cosmetics, personal items and for supporting her parents’ living. 

28.  In their affidavits, the Husband and the 3^rd defendant were at pains to emphasize that they have been keeping their finances separate all along.  They explain that they have never maintained any joint name bank accounts, apart from the mortgage account with Bank of East Asia which was required to be held in the names of both registered owners. 

29.  The evidence also establishes that, prior to this litigation, the 3^rd defendant had not encountered any financial problems nor had she been sued.  According to the Husband, the 3^rd defendant had never asked him to help resolve any financial problems. 

(b)  Acquisition of the Property

30.  At around the time of the wedding in 1994, the Husband and the 3^rd defendant jointly applied, as a married couple, to purchase the Property under the Home Ownership Scheme as their matrimonial home.  They have been living there since 1996.  

31.  On unchallenged evidence, the Property was acquired in the couple’s joint names to fulfil the requirements of the Home Ownership Scheme.  It is the Husband’s evidence that it was a matter of course that he made the application with the 3^rd defendant and never thought about making the joint application with any of his other family members. 

32.  Under cross-examination, the 3^rd defendant explained that why they got married so soon after they had started dating was to enable them to apply to purchase the Property as a married couple.  She also explained that, at the material times, she mentioned to him that if he wanted to buy the property he should buy it himself (“你買就自己買”). Despite this, both admitted that there was no discussion, nor was there any reason to hold any such discussion, as to their respective beneficial ownership or entitlement in the Property as it was intended to be used by both of them as the matrimonial home.  As the Husband also admitted under cross-examination, he in fact never even thought about this issue of beneficial ownership before the present litigation started.  

(c)  Financing the Property

33.  As to the purchase price for the Property, it is both the Husband’s and the 3^rd defendant’s evidence that it was the Husband who single-handedly paid the down payment and all mortgage repayments, as well as all the related fees and expenses. 

34.  On the down payment of HK$83,420, however, neither the Husband nor the 3^rd defendant produced documentary evidence of the payment of this sum by the Husband, or by him alone.  While the Husband has produced copy passbooks from 1996 to 2010 and bank statements from 2013 to 2016 for his Bank of East Asia account (which according to him was his main bank account over the relevant periods), those records only date back to 16 March 1996 and do not show the Husband’s bank transactions up to and including the completion date of the purchase of the Property of 8 March 1996. 

35.  When the Husband was asked why he did not disclose his earlier bank records, he explained that after he started using the Bank of East Asia account on 16 March 1996, he no longer used his earlier bank account and moved his monies to the Bank of East Asia.  But as of 16 March 1996, the account balance in his Bank of East Asia was HK$20 and only increased to HK$18,820 as of 2 April 1996.  Apart from this, his only other explanation was that he did not have a habit of keeping all his bank records. 

36.  In this regard, it is relevant to note that, as the Husband admitted during cross-examination, his average level of savings before the Property was purchased was only around HK$30,000 or so.  As he also frankly admitted, it was not until after he started running his own business in around 1997 that he had larger incomes and accumulated more substantial savings in the range of HK$100,000 to HK$500,000.  

37.  Turning to the mortgage repayments, the unchallenged evidence is that they were paid out of the Husband’s own Bank of East Asia account up to 7 March 2016, being the last of the 240 instalments payable under the mortgage loan from the bank.  On the evidence, the monthly repayment amounts ranged from around HK$4,000 to HK$7,000 odds. 

38.  In his affidavit, the Husband’s states that he never asked the 3^rd defendant to make any of the mortgage repayments nor did she ask to do so.  But when it was pointed out to him that his bank balance would have been insufficient to make the repayments on 7 December 1999, 7 June 2000, 7 August 2000 and 7 September 2000 if not for deposits made shortly before the due dates (two of which seemingly corresponded to withdrawals from the 3^rd defendant’s bank account based on her produced bank records), he accepted that there may have been occasions in which the 3^rd defendant had lent him money for such purpose.  This was corroborated by the 3^rd defendant when she was asked about some of her bank withdrawals. 

39.  However, as both the Husband and the 3^rd defendant stressed, even if he relied on money borrowed by the 3^rd defendant at times, she should have been repaid, unless he had forgotten to do so owing to inadvertence.  Despite this, neither the Husband nor the 3^rd defendant was able to point to any of the bank records evidencing any such repayments.  Nor is there any documentary evidence before the court to this effect. 

(d)  Husband’s new business

40.  In 1997, together with two friends, the Husband set up an interior design company in which he is the second largest shareholder and responsible for the design works. 

41.  Shortly before then, he discussed with the 3^rd defendant of the possible need to sell or re-mortgage the Property in future to raise capital for his new business.  According to the Husband, while this would be a decision for him to make, he still told the 3^rd defendant out of respect and sought her understanding.  While the Husband’s evidence is corroborated by the 3^rd defendant, their evidence on this alleged conversation was only revealed for the first time under their cross-examination.

42.  As the Husband’s bank records show, in the period from around mid-1997 to 1998, he had indeed received more substantial incomes than previously. According to him, this was because his new business became quite profitable in that period.  However, as he also accepted, business deteriorated substantially from late 1998 to 2000 when Hong Kong was suffering from economic downturn.  At that time, the Husband’s savings fell to the 4-digit level and, at points in time, were insufficient to pay the mortgage repayments. 

43.  At the hearing, Mr Wong cross-examined the 3^rd defendant about various withdrawals from her Kwangtung Provincial Bank account in between September 1999 to December 2001, when she regularly made daily withdrawals totaling around HK$4,000 to HK$12,000.  In fact, the total of such withdrawals in a month appears to have exceeded the 3^rd defendant’s monthly income at times.  According to her, those withdrawals were for repaying her credit card debts, even though she had not kept any credit card statements.  As Mr Wong observed, the timing of these withdrawals coincides with the period (September 2000 to September 2013) in respect of which the Husband had not produced any of his bank records, allegedly because he had not retained them. 

(e)  Other matters

44.  Finally, as both the Husband and the 3^rd defendant pointed out, they had never sought to sell the Property in order to evade any liabilities arising from this litigation. 

45.  It is also the Husband’s evidence that, after becoming aware of the plaintiff’s present application, he was legally advised that, if the 3^rd defendant had made no payments towards the purchase of the Property, she would have no beneficial interest therein. 

D.4. Analysis and findings

46.  For the 3^rd defendant, Ms Tam identified the two main questions as being (i) financials and (ii) intention.  As she submitted in her opening, the 3^rd defendant’s case is primarily founded on resulting trust arising from financial contributions, although she accepts that intention may also be relevant to the question of the presumption of advancement. 

(a)  Financials

47.  On financials, the evidence is clear, and I so find, that the monthly mortgage repayments in respect of the Property were intended to be paid by the Husband.  This is supported by the fact that, as Ms Tam submitted, the monthly instalments were paid by direct debit from the Husband’s sole name account rather than from the parties’ joint name account. 

48.  Though there were instances when the Husband’s bank balance was admittedly insufficient to cover the monthly repayments, based on the foregoing finding and that the number of such instances were relatively limited, I accept the Husband’s evidence and find that he was still the one making the payments, albeit using borrowed money. 

49.  Thus, whether or not there is evidence of repayment to the 3^rd defendant is beside the point: so long as the money used to make the repayments were either his own money or money lent to him by the 3^rd defendant, it would still be prima facie regarded as having been provided by him as purchaser (see Lewin on Trusts (20^th ed) Vol 1 §10-049), even though he would be under a personal liability to repay the 3^rd defendant. 

50.  On the other hand, it is equivocal as to whether the Husband paid the entire down payment of HK$83,420.  Not only is there no direct evidence to this effect (see §35 above), the evidence as to the Husband’s means (see §36 above) in my view casts a material doubt over whether he could afford to pay the entire down payment on his own.  

51.  In particular, I am unimpressed by the Husband’s explanation for why he had not disclosed the bank records of his previous bank account covering the period up to the completion date of 8 March 1996 (see §35 above).  Given his ability to produce aged bank pass books dating back to 16 March 1996 (shortly after the completion date), I reject his explanation that he had not kept the previous bank records as being incredible.  

52.  Neither the Husband nor the 3^rd defendant contended that any part of the down payment was paid by the Husband using borrowed monies from the 3^rd defendant.  Both were adamant that it was paid by the husband alone.  Given the deficiency of the 3^rd defendant’s evidence in this regard, I hold that she has failed to discharge her burden of proving that the down payment for the Property was paid by the Husband alone. 

53.  For all these reasons, I reject Ms Tam’s submission that the Husband had paid the entirety of the financial cost for acquiring the Property on the evidence. 

(b)  Intention

54.  Turning to intention, there is no dispute that the Husband and the 3^rd defendant had no discussion over their respective beneficial ownership in the Property.  While the 3^rd defendant had allegedly told the Husband that if he wanted to buy the Property, he should buy it himself (“你買就自己買”), that informal or passing statement, even if proved, in my view goes nowhere to demonstrate their consensus or common intention on the question of beneficial ownership. 

55.  In particular, the 3^rd defendant’s alleged suggestion that the Husband should buy the Property himself does not mean that the 3^rd defendant were not intended to have any beneficial interest in it, or that she agreed not to receive any such interest.  In fact, when the 3^rd defendant was cross-examined, she was uncertain as to whether that statement would amount to a discussion over the beneficial ownership of the Property. 

56.  Likewise, even if the Husband did inform the 3^rd defendant in 1997, when he was about to set up a new business, of his possible future need to sell or re-mortgage the Property to raise capital for his business, this is neither here nor there as to their intention as regards the beneficial ownership of the Property.  It can hardly be disputed that a sale or re-mortgage would require the 3^rd defendant’s cooperation in signing the papers. It would thus be unsurprising for him to alert his wife of this possibility at the time.  In fact, as the Husband admitted, he did not even think about the issue of beneficial ownership of the Property before the present litigation started. 

57.  The 3^rd defendant places much reliance on the fact that her name was only added as a joint tenant of the Property to meet the application requirements under the Home Ownership Scheme, rather than to reflect to gift of a beneficial ownership in the Property to her.  In support of this argument, Ms Tam cited Secretary for Justice v Chau Mei Ha (unreported) HCA 787/1992; 29 January 1999 in which Yeung J (as he then was) accepted the defendant’s argument to the same effect and that she was not intended to have any beneficial interest in the subject property.  On this basis the learned judge therefore discharged the charging order nisi made in respect of the property in that case. 

58.  With respect to Ms Tam, I am not persuaded that Chau Mei Ha assists the 3^rd defendant.  It is clear from the judgment that Yeung J’s decision was founded on an explicit agreement between the defendant and her husband at the time of purchase of the property that she was not to have any beneficial interest in the property.  In particular, the defendant there was then exposed to a massive debt from her failed business, and it was this imminent liability that motivated the couple to take steps to protect their family home, not only for themselves but also for their young child.  None of these special facts are present in this case.  Chau Mei Ha is in my view plainly distinguishable. 

59.  Ms Tam next submitted that, on the evidence, the Husband had no intention to gift any beneficial interest in the Property to her.  In support, Ms Tam referred to a couple of “negatives”, being: - (a) first, the couple did not understand the Husband to be gifting any to the 3^rd defendant merely by adding her name as a joint owner under the Home Ownership Scheme requirements; and (b) second, the couple has had limited exchanges, both pre- and post-acquisition, as to the question of beneficial ownership. 

60.  On established principles, the starting point for a joint name case is that equity follows the law.  Absent cogent evidence showing that the parties’ intention was different, beneficial ownership would follow legal ownership. Properly understood, it is positive evidence showing the Husband’s intention not to gift, rather than the lack of evidence showing his intention to gift a beneficial interest to the 3^rd defendant, which would assist her client’s case.  It is plain that Ms Tam’s submissions are premised upon the latter but not the former and do not advance her argument. 

61.  On the other hand, the preponderance of the evidence goes to show, and I so find, that the Property was intended to be purchased as the couple’s matrimonial home.  While it is true that the Property was principally funded by the Husband, I find that he did so acting out of his sense of responsibility to provide for his family and his love for his wife, rather than out of an intention not to gift a beneficial interest in the Property to her.  Indeed such an intention on the part of the Husband would be out of his character on the unchallenged evidence before me.  This in my view is put beyond doubt by the Husband’s affidavit evidence, extracted below:-

“4. 當時我和太太是以港幣HK$834,200.00 元向香港房屋委員會購買該物業，該物業的所有費用，包括百份之十的首期，即港幣HK$83,420.00 元，與及法律費用等全數都是由本人支付，我並沒有要求太太分擔有關的費用，本人一直認為作為有承擔的男人是有責任以自己的財力單方面付責一切的家庭開支，這當然包括出資購買物業作為我倆的婚姻居所，與及支付購買物業的所有開支和樓價；就算我和太太同居期間我也沒有要求她分擔家庭的開支，太太也深知本人的性格， 一直沒有主動要求作出有關的財政分擔。”

62.  Moreover, as I have stated above, the parties never had any discussions touching upon their respective beneficial interests in the Property.  Nor is there, in my view, sufficient evidence showing that they have conducted themselves in such a way as to infer their common intention that the 3^rd defendant was not a beneficial owner of the Property. 

63.  For completeness, under my above analysis on “financials”, I have held that the 3^rd defendant has failed to prove that the Husband had solely paid the down payment.  Even if I were wrong and the Husband did pay for the Property alone, I would still have held, for the reasons given in §§61-62 above, that the parties did not intend that the beneficial ownership in the Property would be different from the joint legal ownership. 

64.  Finally, in the opening submissions, the parties have debated over the relevance and application of the presumption of advancement.  In my view it is unnecessary to resort to this presumption as the evidence is crystal clear that the Husband, being the type of responsible man he is, had intended to gift a beneficial interest in the Property to the 3^rd defendant even though he was the one who principally or solely paid for the Property. 

65.  But even if it had been necessary to consider the point, I would have held that this is a classic case for the application of the presumption of advancement by reason of the couple’s relationship and the Husband’s personality as described above.  While the importance of the presumption has been described as “weak” and “[rebuttable] on comparatively slight evidence”[7], and “having lost its weight”[8], there is in my view no material evidence capable of rebutting the presumption of advancement on the facts.  

(c)   Conclusion

66.  Accordingly, I answer the Issue in the positive and conclude that the 3^rd defendant does hold a beneficial interest in the Property as a joint tenant together with the Husband.  

E.  DISPOSITION

67.  It follows from this conclusion that I order that the Charging Order Nisi be made absolute. 

68.  There is no reason why costs should not follow the event.  I therefore further order that the costs of and incidental to the application, including the trial hearing, be to the plaintiff. 

69.  The parties have agreed that summary assessment of costs would be appropriate.  I have reviewed the plaintiff’s statement of costs lodged on 7 January 2020 and the 3^rd defendant’s list of objections dated 21 January 2020.  I consider the plaintiff’s total costs of HK$184,155 to be reasonable and proportionate and would allow that sum in full. 

70.  Lastly, I thank both Mr Wong and Ms Tam for their able assistance.