RE NG KWOK TAI ANDREW

HCB 5188/2018

[2026] HKCFI 3466

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

BANKRUPTCY PROCEEDINGS NO. 5188 OF 2018

_______________________

______________________

______________________

___________________________________

REASONS FOR DECISION

___________________________________

Introduction

1.  This is the adjourned hearing of the application by summons dated 26 February 2026 (the “Summons”) by the trustees in bankruptcy (“Trustees”) for an order for sale of a property, namely Flat B, 25/f, Triumph Terrace, 9 Victory Avenue, Kowloon (the “Property”) pursuant to section 6 of the Partition Ordinance, Cap. 352 (“PO”)[1] and section 60 of the Bankruptcy Ordinance Cap. 6 (“BO”).

2.  At the conclusion of the hearing, the Court made an order in terms of the draft order submitted by the Trustees. My reasons appear below.

Procedural history

3.  The Property which was purchased in 1999 is registered in the names of Ng Kwok Tai Andrew (the “Bankrupt”) and his wife Young Mei Li Maria (the “Respondent”) as joint tenants.

4.  The Respondent did not appear at the hearing of the Summons fixed for 9 April 2026 at 9:30 am although she had been properly served.

5.  It was only after the conclusion of the hearing that the Court became aware of the Respondent’s letter dated 2 April 2026[2] (the “Respondent’s letter”) to the effect that (i) she never received any summons served by Messrs Withers (solicitors for the Trustees); (ii) she only became aware of the hearing scheduled for 9 April on 2 April 2026; (iii) she had to invigilate HKDSE examinations the morning of 9 April and would not be able to attend the hearing, attaching a document from the school in support.

6.  The Court therefore scheduled a re-hearing of the Summons for 22 April 2026 at 9:30 am.

7.  On 16 April 2026, Messrs CP Tsui Lawyers (“CPTL”), solicitors for the Respondent, took out a draft consent summons seeking Withers’ consent to a 42-day adjournment. The Trustees did not consider it appropriate to vacate the hearing having regard to the Court’s direction in its note dated 9 April 2026 scheduling this rehearing that “there will be no further adjournment”.

8.  The Respondent filed an affirmation on 21 April 2026 (“Young 1^st”) to the effect that she was wholly unaware of the Summons until 2 April 2026 when the Bankrupt showed her a letter dated 20 March 2026 from Withers, solicitors for the Trustees, relating to the present proceedings and the hearing scheduled for 9 April 2026.

9.  The Bankrupt who is retired and unemployed had apparently intercepted the Summons and related documents addressed to the Respondent, and had concealed these proceedings from her until 2 April 2026[3].

10.  On 21 April 2026, CPTL issued a summons requesting 56 days to file her evidence in opposition to the Summons.

11.  At the hearing on 22 April 2026, the Court ordered the Respondent to file her evidence within 14 days.

Factual background

12.  The Bankrupt and the Respondent contracted to purchase the Property on 23 September 1998 and obtained mortgages from Standard Chartered Bank (“SCB”) on 23 October 1998 (the “1^st Mortgage”) and on 3 December 2012 (the “2^nd Mortgage”).

13.  On 13 January 1999 the Property was conveyed to them as joint tenants for a consideration of $2.535 million.

14.  The Bankrupt and the Respondent were married on 29 December 1998[4]. Since their marriage they have resided in a flat in Happy Valley which the Bankrupt’s family’s company provided to them rent-free and where they still reside.

15.  A bankruptcy order was made against the Bankrupt on 7 October 2022.

16.  The Trustees were appointed on 12 January 2023.

17.  The Bankrupt attended an interview with the Trustees on 20 February 2023 during which he alleged that he had been holding the Property on trust for the Respondent (the “Trust Allegation”). He was asked to provide evidence to substantiate the Trust Allegation.

18.  As will become apparent, the Trustees took out the Summons on 26 February 2026 because they were not satisfied with the supporting evidence the Bankrupt and the Respondent had provided.

19.  The Respondent filed her 2^nd affirmation on 5 May 2026 (“Young 2^nd”) in opposition to the Summons.

Applicable legal principles

20.  The principles applicable to an application under the PO are well established.

21.  In Wong Chun Kei Johnny v Poon Vai Ching [2007] 1 HKLRD 825 at §§18-19, Recorder Fok SC (as Fok PJ then was) set out the applicable principles summarised from case law[5] as follows:

(a)  A co-owner has a basic right to rid himself of the shackles of co-ownership and [if he has no other remedy,] ask for an order for partition or sale.

(b)  When it is impracticable to make an order for partition, the court should make an order for sale unless it is persuaded (the burden being on the opposing co-owner(s)) that such an order will not be beneficial to all the co-owners or that it will result in very great hardship to one co-owner.

(c)  Whether an order for sale is beneficial to all the co-owners is not determined by the dissent of the opposing co-owners or the assertion by them that it is not beneficial. It has to be determined by the court objectively.”

22.  In Re Lau Hiu Tuen, HCB 8430/2006, G Lam J (as he then was) adopted those principles and (at §21) considered the meaning of the phrase “such an order will not be beneficial to all the owners”, concluding that

“an order for sale would not be refused unless all the co-owners would be benefited by its refusal, in other words, an order for sale would be detrimental to all the co-owners, or unless it will result in very great hardship to one co-owner.”

23.  He also noted (at §§23-24) a divergence in judicial opinion in Hong Kong on whether the voice of creditors will usually prevail over the voice of the other co-owner save in exceptional circumstances, or that there is no requirement of exceptional circumstances to resist an application for sale. But in the absence of argument from both sides, he did not deem it appropriate to deal with that divergence.

24.  Instead, he proceeded on the basis of the authorities decided under the PO which established the principle that the court will make an order for sale on the application of a co-owner unless it is satisfied that all the co-owners would be better served by the refusal of the order or that making an order would result in very great hardship to one co-owner.

25.  In Liu Chung Hang & Ors v Liu Chung Leung Alfred, unrep., HCMP 1255/2007, 19 December 2007, Recorder B Yu SC held (at §§9-10) that where the subject matter of the property is a flat which in legal concept and parlance is one (or more) undivided part(s) or share(s) in the land together with the sole and exclusive right and privilege to hold, use, occupy and enjoy the unit, it is obviously impracticable to contemplate partition and partition cannot be beneficial to the owners. Therefore, the condition for the exercise of the Court’s power under section 6 (1) of the PO to order the sale of the property is satisfied: see also Annotated Ordinance of PO at §6.03.

26.  Since the Property was purchased and held in the joint names of the Bankrupt and the Respondent, they are prima facie beneficially interested in the Property as joint tenants. Moreover, both Mortgages were taken out in their joint names. In other words, the Bankrupt assumed joint and several liability to SCB thereunder. Despite this, the Bankrupt maintains that he has no beneficial interest in the Property and was holding the Property on trust for the Respondent.

27.  The House of Lords in Stack v Dowden [2007] 2 AC 432 held (at §68) that where property is held in joint names,

“[t]he 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 … In joint names cases it is also unlikely to lead to a different result unless the facts are very unusual ... It cannot be the case that all the hundreds of thousands, if not millions, of transfers into joint names using the old forms are vulnerable to challenge in the courts simply because it is likely that the owners contributed unequally to their purchase.”

28.  While a post-acquisition common intention that the beneficial ownership of the Property should change can also give rise to a constructive trust binding upon the legal owners, there must be sufficient evidence to justify such an inference or conclusion: Re Lau Hiu Tuen at §16.

The evidence prior to Young 2^nd

29.  As noted in §17 above, the Bankrupt made the Trust Allegation at the interview with the Trustees on 20 February 2023.

30.  By letter of 4 September 2023, the Trustees requested the Bankrupt to provide supporting documents within 14 days to substantiate the Trust Allegation.

31.  On 7 October 2023, the Bankrupt and the Respondent each wrote to the Trustees alleging that the Mortgage (without specifying whether it was the 1^st Mortgage or the 2^nd Mortgage) had been paid by the Respondent and that the Bankrupt was merely the registered owner holding the Property on trust for the Respondent. They requested more time to locate further evidence.

32.  On 16 October 2023, the Bankrupt submitted a statement of Affairs asserting that he held the Property “on trust for [his] wife”.

33.  Then by letter dated 15 November 2023 (the “November 2023 letter”) sent by the Bankrupt and the Respondent to “All Concerned Parties”, they alleged that they obtained

(i)  a mortgage loan of HK$1 million on 23 October 1998 (i.e. the 1^st Mortgage) from Standard Chartered Bank (“SCB”) for the purchase of the Property and that the loan was for a term of 7 years with an end instalment date of 23 August 2005[6]; and

(ii)  a mortgage loan of HK$2 million from SCB on 3 December 2012 (i.e. the 2^nd Mortgage) for a term of 10 years for use by the Bankrupt[7].

34.  By the November 2023 letter, the Trustees were informed that

(i)  between November 1998 and December 2004, the Respondent had paid approximately 86.15% of the 1^st Mortgage and the Bankrupt, approximately 13.85%[8];

(ii)  as the Bankrupt required “cash for turnover” in 2012, he and the Respondent had obtained a further mortgage loan of $2 million from SCB. As the Bankrupt has had no income since his dismissal in April 2006 and was incapable of making repayments, the Respondent and the Bankrupt “reached a mutual oral agreement” that the HK$2 million loan constituted the sale by the Bankrupt to the Respondent of the Bankrupt’s remaining equity interest in the Property.

35.  The November 2023 letter is highly problematic:

(i)  If the intention was that in consideration of $2 million the Bankrupt would transfer his interest in the Property to the Respondent, making the Respondent the sole owner, the obvious way to achieve that was for the Bankrupt to convey his interest in the Property to the Respondent.

(ii)  That would obviate the rather convoluted arrangement of setting up a 2^nd Joint Account and going through the rigmarole of writing cheques to the Bankrupt or giving him cash to be paid into the 2^nd Joint Account on a monthly basis.

(iii)  The ostensible reason given for not transferring the Bankrupt’s legal title to the Respondent was that the bank had informed them that

“all existing mortgage loans would first have to be redeemed, and only then could a fresh mortgage application be made under a sole name. This process would be extremely time-consuming, impractical, and very costly.”

(iv)  However, based on the Appendix, the 1^st Mortgage had been fully repaid by December 2004 and ceased to exist more than 7 years before the 2^nd Mortgage was drawn down on 3 December 2012. It negates the suggestion that the 1^st Mortgage had to be redeemed and that it would be costly to do so. In other words, it completely undermines the explanation advanced.

(v)  In any event, the ‘bank’ (which was not identified) would have known from a Land Search that there were no extant encumbrances on the Property at the time.

(vi)  There was thus no impediment to conveying the Property into the sole name of the Respondent.

(vii)  That was not done and the Property remained in their joint names.

(viii)  The 2^nd Mortgage was also taken out in their joint names such that the Bankrupt assumed joint and several liability to SCB for repayment of the 2^nd Mortgage.

36.  On 6 January 2025, the Trustees informed the Respondent that the Trustees did not accept that she is the sole beneficial owner of the Property and invited her to provide further supporting evidence.

37.  On 25 September 2025, the Trustees again requested the Bankrupt and the Respondent to provide further information to substantiate the Trust Allegation. There was no response to that letter.

38.  Following the November 2023 letter, the Bankrupt and the Respondent did not provide further evidence to substantiate the Trust Allegation despite the Trustees’ repeated requests. It was only after the present application was made by the Trustees in February 2026 that the Respondent filed Young 2^nd, advancing a new version of events endorsed by the Bankrupt.

Young 2^nd

39.  The new version of events is as follows:

(i)  In 1998, the Respondent’s mother suggested that the Respondent should acquire the Property as an investment;

(ii)  Prior to the purchase of the Property the Bankrupt and the Respondent orally agreed (the “Alleged Common Intention”) that

(a)  the Respondent would contribute more financially towards the purchase price and hence have a larger beneficial share in the Property; and

(b)  the precise division of their respective beneficial shares would be determined by reference to their actual financial contributions towards the Property over time, including[9] the mortgage repayments.

(iii)  The purchase of the Property was financed in part by the 1^st Mortgage. According to the Respondent, the remaining $1.535 million was made up of payments by the Bankrupt ($500,000), herself ($535,000) and her mother ($500,000) as a gift to the Respondent to be applied towards the down payment of the Property.

(iv)  Repayments towards the 1^st Mortgage were made out of the Bankrupt and the Respondent’s joint account with SCB (the “1^st Joint Account”). The Respondent drew cheques on her personal account in favour of the Bankrupt each month so that he could deposit the same into the 1^st Joint Account. It is the Respondent’s case that she contributed far more towards the 1^st Mortgage than the Bankrupt.

(v)  The Respondent claims that the respective financial contributions towards the acquisition of the Property and thus their corresponding beneficial interest therein were 75.8% for the Respondent and 24.2% for the Bankrupt. For the purposes of that calculation, the mother’s contribution to the purchase price of $500,000 was ascribed to the Respondent’s share.

(vi)  In late 2012, the Respondent and the Bankrupt reached an oral agreement that the Respondent would assume responsibility for repaying the 2^nd Mortgage in exchange for the Bankrupt’s “remaining beneficial interest” (the “2012 Agreement”).

(vii)  Repayments of the 2^nd Mortgage were made from a joint account in the joint names of the Respondent and the Bankrupt with SCB opened specifically for the purpose of repaying the 2^nd Mortgage (“2^nd Joint Account”).

(viii)  The Respondent claims to have repaid the 2^nd Mortgage loan alone without any contribution from the Bankrupt. The monthly instalment for repayment was $20,000 and the Respondent will either pay cash to the Bankrupt or draw cheques on her HSBC account and ask the Bankrupt to arrange for such cash or cheques to be deposited into the 2^nd Joint Account from which SCB would deduct the monthly mortgage instalments.

(ix)  Some repayments were made in cash and that practice continued during the covid pandemic.

(x)  Due to the lapse of time, the Respondent no longer has copies of all the cheques she issued to the Bankrupt or the bank statements for the 2^nd Joint Account apart from various cheques issued to the Bankrupt from March to November 2021 and passbook statements from June 2018 to July 2022.

(xi)  The 2^nd Mortgage was fully repaid and redeemed on 13 June 2022.

(xii)  The Respondent’s mother lived at the Property rent free shortly after its acquisition in January 1999 until her death in 2013. Since 2016, rental income averaging $18,000 per month from 3 successive tenancies of 2 years each was received solely by the Respondent.

Alleged Common Intention

40.  The Alleged Common Intention did not surface until Young 2^nd, more than 3 years after the interview and 32 months after the Trustees’ written request to the Bankrupt to substantiate the Trust Allegation. Given that the Alleged Common Intention is a critical element in the Respondent’s claim to the Property, it is inexplicable why it was not at the forefront of the parties’ case to substantiate the Trust Allegation and did not feature from the outset.

41.  In her letter of 7 October 2023 to the Trustees, the Respondent merely claimed that the Bankrupt is the registered owner in trust for her, that the Mortgage was actually paid by her and requested more time to find further evidence.

42.  In that regard, the Respondent acknowledged that she and the Bankrupt meticulously preserved records of the mortgage repayments[10] for the 1^st Mortgage. Indeed, Mr Eugene Kwan, counsel for the Respondent, submitted that there must have been a purpose for the parties to have preserved the cheques for 2 decades which is to establish their respective contributions in support of the Alleged Common Intention.

43.  Pausing there, it should be noted that the cheques together with a handwritten schedule of mortgage repayment contributions formed part of the Appendix sent to the Trustees with the November 2023 letter. Yet, there was no suggestion of the existence of the Alleged Common Intention or that those payments evidence such.

44.  The Respondent’s evidence of the Alleged Common Intention in Young 2^nd is that “the precise division” of their respective beneficial shares would be determined by reference to their actual financial contributions towards the Property over time “including” the mortgage repayments. Clearly, the parties contemplated that they would be making financial contributions towards the Property other than for mortgage repayments although exactly what they had in mind is unclear. They have not adduced evidence of those contributions.

45.  Despite tabulating payments into the 1^st Joint Account based on the cheques that had been preserved, for reasons unexplained, the Alleged Common Intention never featured until Young 2^nd.

46.  How the purchase was financed is obviously relevant. The Respondent acknowledges that the Bankrupt did contribute to the purchase of the Property by contributing $500,000 towards the down payment and contributing to some mortgage repayments. Apart from the 1^st Mortgage of $1 million, there is no documentary evidence to substantiate the contributions alleged in §39 (iii) above.

47.  If the parties considered it necessary to preserve the cheques paid into the 1^st Joint Account, why did that not extend to records of the capital contributions? The Respondent’s excuse for not being able to locate or produce documentary records of the payments, namely, “due to the lapse of time[11]” is obviously not a valid excuse.

48.  While the Property was not their matrimonial home[12] as they were living rent free in a flat owned by the Bankrupt’s family’s company, that does not necessarily preclude joint ownership of a property for themselves. The agreement to purchase the Property as joint tenants is dated 23 September 1998[13], some 3 months prior to the parties’ marriage, at a time when the parties did not own a matrimonial home and were not residing in the Happy Valley flat. There are no particulars concerning the arrangement for the occupation of that flat by the Bankrupt and the Respondent.

49.  The Trustee submitted that even if their contributions were unequal, in a family setting, that does not support an inference of a common intention to adjust their beneficial interests to align precisely with their financial contributions from time to time.

50.  In Re Lau Hiu Tuen, unrep., HCB 8430/2006, 20 August 2015 G Lam (as he then was) observed (at §17):

“In general, married couples do not intend that their beneficial ownership of a jointly-owned property varies from month to month depending on the precise monetary contribution each makes towards the mortgage loan repayments for the party’s overall expenses.”

51.  Under the Alleged Common Intention, the precise beneficial interest would fluctuate from month to month depending on the actual contributions. That is hardly a workable arrangement and stretches one’s credulity, particularly in the context of a married couple.

52.  Other than the 1^st Mortgage, there is no evidence to support how and when the balance was funded. The Respondent claims that her mother’s contribution was a gift to her alone. It is but a bare assertion. It is equally plausible that her mother made a gift to the couple who were about to be married or to the newlywed couple depending on the date of her contribution which is unknown.

53.  It is a fact that shortly after its purchase, the Respondent’s mother occupied the Property rent free for the rest of her life. The Respondent’s evidence[14] is that “she allowed[15]” her mother to use the Property rent-free as a token of appreciation to her for contributing to part of the down payment. There is no evidence as to when and how the idea that the mother should live there arose. In those circumstances, the possibility of that being at least a reason for its purchase cannot be ruled out.

54.  Mr Kwan submitted that unlike most cases arising in a domestic context, the Property was acquired for investment rather than as a matrimonial home and that sets it apart from the usual run of cases concerning jointly owned family properties. He referred to an observation made by Andrews LJ in support in R v Moore [2021] EWCA Crim 956 at [83] cited by Lewison LJ Hudson v Hathway [2022] EWCA Civ 1648 at §125:

“… if A gives B money for the express purpose of using it only to purchase an identified property as an investment, A and B agree that A will have an interest in the property pro rata to his financial contribution, and the money is then used to buy the property, does A have a beneficial interest in the property? The answer is yes.”

55.  The context in which those observations arose in R v Moore was not considered in Hudson. In the present case, the parties are a married couple. As the relationship between A and B mentioned in the passage cited above is not known, I am not persuaded that it is applicable in the present circumstances.

56.  What is clear is that the Property was conveyed to the Bankrupt and the Respondent as joint tenants. They also assumed joint and several liability under the 1^st Mortgage. In my view, the Respondent’s evidence is far from sufficient to prove that the beneficial ownership of the Property is different from the legal ownership based on the Alleged Common Intention.

The 2012 Agreement

57.  Ms Sharon Yuen, counsel for the Trustees, highlighted the fact that based on the November 2023 letter, the Trust in question arose from the alleged oral agreement in 2012, made many years after the acquisition of the Property.

58.  As noted in §35 above, the November 2023 letter is highly problematic.

59.  Regarding the Respondent’s reason for not transferring the Bankrupt’s title to the Respondent in 2012 (set out in §35(iii) above), in the Respondent’s skeleton at §60.1, the Respondent accepts that the explanation[16] set out in the November 2023 letter was “mistaken and inaccurate”. However, as the Trustees submitted, nowhere in Young 2^nd does the Respondent state that any part of the November 2023 letter is wrong or inaccurate. It is not permissible for the Respondent to change her case and try to retract what she had said in the November 2023 letter by way of submissions.

60.  Further, the Respondent’s evidence (at Young 2^nd at §53.1) to the effect that the November 2023 letter was drafted by the Bankrupt (who told her that it had been prepared “in a rush” and that he had not carefully reviewed the relevant documents before drafting it) does not pass muster. The November 2023 letter was sent in response to the Trustees’ request of 4 September 2023 (some 2 months earlier) for evidence to substantiate the Trust Allegation. Nor is it evident what “relevant documents” required careful review on the part of the Bankrupt.

61.  Taking into consideration all the relevant factors, I consider that the Respondent has failed to prove that the beneficial ownership of the Property is different from its legal ownership.

62.  Accordingly, the Court granted the relief the Trustees sought.