TAM CHIU KAM and Another v. CHUI YAN TAI

1995 No. MP 3470

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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(By Counterclaim)

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J U D G M E N T

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1. The first named Plaintiff in these proceedings is the widow of Shum Tak Hing deceased, (who I will refer to as "Tak Hing"), and the Defendant is his mother and the widow of Shum Woon Cheung, deceased, ("the father"). The father died in 1978, and the son in 1994, having married Madam Tam, the first named Plaintiff, who, for the sake of convenience I will refer to as the Plaintiff, in 1982.

2. At the date of his death, Tak Hing was the registered owner of a one third share as a tenant in common of a flat at King's Towers, North Point ("the flat"), and all of one car park space in the same building. The other two registered owners of the flat were his mother and his father. The Plaintiff now seeks an order for sale of the flat under the Partition Ordinance with associated directions accounts and inquiries. The Defendant counterclaims for an order that Tak Hing, and subsequent to his death, the Plaintiffs , held or hold the one third interest in the flat, and the car park space, on trust for the father or herself. The Defendant further claims repayment of a loan to Tak Hing of $50000.

3. The history of this family is not an unfamiliar one. In 1951 the father, who was a skilled refrigeration, and later air-conditioning, technician, came to Hong Kong from Shanghai. The following year he was joined by his wife, the Defendant, and their then children, Tak Hing, his eldest son, who was then about 5 years old, and his eldest daughter, Shum Kwok Tsin, then about 8 months old. Over the next nine years three more children were born, two more daughters and then a further son, all the last four children being born about three years apart. The father also had another son, not by the Defendant, 6 years older than Tak Hing, who does not appear to have lived with or been part of the family, and who died shortly before the father. For a short time the family lived in a hut in Cheong Wah Street, Kowloon, and then moved to another hut in Ah Kuk Ngam Village, Shaukiwan.

4. The father at first had a regular employment but worked on his own account in the evenings at his air-conditioning work, and in the late 1960's secured large sub-contracts of air-conditioning installation with other partners at Causeway Bay Magistracy Building and at the Mirama Hotel. This improved his income and savings enough that, by 1972, when he heard of the King's Tower development in North Point, he was in a position to consider purchasing the flat there. During these early years, times had clearly been hard for the family, and the Defendant subsidised their income, in the little time left to her when not caring for her growing family, by taking in piece work at home such as assembling plastic flowers.

5. Although the Defendant and her husband were illiterate, or almost illiterate, they ensured that their children made the most of the educational opportunities of Hong Kong and Tak Hing completed five years primary and five years secondary education. As he repeated one year in primary and one in secondary, I assume that he left school in about 1964 when he was 17. I am told that, after briefly helping his father in his business, he was employed first at a printing factory, earning about $3 a day, then at a laboratory on delivery work at about $4 a day, and then as a messenger and later junior clerk with an airline company earning $120 to $150 a month. These sums seem very modest now, but I have no evidence as to how they compared with average earnings in the 1960's. The Defendant says that he was engaged in the first two jobs for 6 months each and the last for two years. After that, which, on this evidence would be in 1967 or 1968, he joined his father full-time in his air-conditioning business, so that at the date of entering into the sale and purchase agreement for the flat, he would have been working with or for his father for at least four years.

The King's Tower Flat

6. The purchase price of the flat was $150000. The father paid a deposit of $2000 in cash on 18th April 1972 upon signing the provisional sale and purchase agreement, which provided for further payments of $28000 on signing of the formal sale and purchase agreement on or before 25th April 1972, and $29000 on or before 25th May 1972. The balance was payable within 14 days of the issuance of the Occupation Permit, which was finally issued in 1975.

7. The Defendant's account of what transpired when the second payment of $28000 was due is that, as this was to be paid out of their savings, which they kept at home in cash, not having a bank account, they took cash to the solicitors' office but were told that this was not acceptable and they had to pay by cheque. They had been accompanied by Tak Hing, as not only could he read and write, but he could also speak and understand English, and it was decided that he should pay the money into his bank account and issue a cheque. Whether he already had a bank account or opened one for this purpose is not clear, although, as there seems to have been no delay in issuing the cheque on the due date, it seems likely that the account was already in existence.

8. At the same time it was decided, if it had not already been, to put the property into the names of the father, the Defendant, and Tak Hing. It is the Defendant's case that this was done to facilitate any future dealings in relation to the property. However, as they all three had to sign the assignment in any event, and would have to sign any future transfer documents, it is not easy to see how they considered that it would be easier. Indeed, on a further charge created in 1991, the Defendant did in fact sign.

9. The Plaintiff's case is that there is no evidence that Tak Hing did not contribute to the purchase, and even if he did not, there is a presumption of advancement in his favour which has not been rebutted.

10. As to the money used for the purchase, I am of the view that it is more likely than not that most, if not all, came from the father. Such evidence as there is, and I regret to say that this case has suffered throughout from a severe lack of reliable evidence, points to the father as the only one likely to have sufficient funds to make the payments necessary. The Defendant had no access to substantial sums. Her earnings in the early days would have gone to supplement the upkeep of the family, and, although she mentioned chit funds as a source of income, there was no evidence of the amounts which she made from this source, or even an attempt to guess such amounts. By the time of the purchase Tak Hing had been assisting his father in the business for some four years, but there is no evidence of his earnings, and, as he was living at home, I consider it likely that he was not paid a large salary by his father, but that the profits were kept in the business.

11. That being the case, it is clear that the presumption of advancement, from father to son arises, and it is for the Defendant to attempt to rebut it. Mr. Wong, on behalf of the Defendant, says that the evidence shows that the father did not intend to make a gift of the third share to the son. The evidence of the Defendant, who is the only witness who can give an account of what happened at the time, and it is the time of the transaction that we are concerned with, is that they only thought of buying the property as a home and there was no intention to give any part of the interest to any of the children. However, there is no doubt that she and her husband were willing parties to an assignment which clearly stated that Tak Hing was to have a third share, and it was drawn up by solicitors who were under a duty to explain to their clients the effect of what they signed, and the document itself includes a statement that it has been interpreted to them. The Defendant said in evidence that she told the solicitor that they did not want Tak Hing to have any share. I cannot accept that a solicitor in the face of such instructions would ignore them and add a third party they did not want.

12. To put the matter beyond doubt one only has to look at the behaviour of the parties since the assignment. There is no statement or assertion in any document since that the ownership of the property is anything other than as in the assignment and as it is registered. In the schedule of property annexed to the Letters of Administration of the father's estate there is no suggestion that he has an interest in the part of the property in Tak Hing's name, and the Defendant swore the affidavit setting out the father's property. In the deed of assignment by way of family arrangement of 13th October 1982, transferring to the Defendant the one third share of the father, there is no mention that he was beneficially entitled to any more than that, or had any interest in any other share.

13. I accordingly cannot accept what the Defendant now says regarding the intention of the father and herself at the time in respect of the share assigned to Tak Hing. Neither do I accept that she ever asked him to transfer it back to her. This was, as Mr. Lui says, an answer given in evidence which nowhere appears in her written statement or her earlier affidavits. Indeed, in her statement she says the opposite at paragraph 14.

14. If I needed further support for my view that the share of the flat was intended as a gift, I only have to look at the family itself and its situation at the time. The Defendant accepted in evidence that she was a traditional Chinese mother, and I believe that this was a very traditional Chinese family, and that the eldest son had a special place in that family. In addition to that, Tak Hing was several years older than the other children, and many years the senior of the next boy. He had already been helping his father in the family business for four years, and it was clearly intended that he should take it over. He was then unmarried, and no doubt considered by his parents to be the one responsible for the rest of his younger siblings in the future. In the circumstances I find nothing unusual in the arrangement, and, had it not been for his untimely death, I do not believe that this matter would ever have been questioned.

15. I say that as there has been a considerable amount of evidence in this trial as to the character of the Plaintiff, her gambling habits, her unwillingness to vacate a flat owned by Tak Hing's sister, in which they had lived prior to his death, and her attitude to the High Court proceedings to recover that flat and money said to have been lent by the sister to him. I do not intend to deal with this evidence in detail, or indeed, at all. Mr. Wong says it goes to show her lack of credibility. I am not satisfied it does, particularly as the evidence she is able to give sheds little light on events several years before she even knew the family. What it does show, and the evidence of the Defendant and the sister, Shum Kwok Tsin, shows, is that there is, and probably has been for some time, considerable antagonism between the Plaintiff and the rest of the family, and the matters which are in issue here have only arisen since the death of Tak Hing. It is clear to me that the evidence I have heard from the Defendant and her daughter has been to a great degree coloured by their unwillingness to let what they regard as family property pass to someone they obviously dislike.

16. I accordingly find that the estate of Shum Tak Hing is entitled to the third share in the property registered in his name. Having said that, I am not prepared to make an order which would entail the Defendant having to give up possession of the flat which has been her home for some 22 years, and I will hear counsel on the question of appropriate orders to make.

The Car Park Space

17. The situation regarding the car park at least has the merit of more and clearer evidence as to how it came to be bought, save that I again only have that of one side. The Plaintiff was still not on the scene, and I have to conjecture to some extent as to what took place where I am not entirely satisfied that I am being told the whole truth. My remarks as to the attitude of the Defendant and her daughter to the Plaintiff equally hold good for this part of the case.

18. The Defendant says in her statement that it the father who wished to buy the car park space. However, Shum Kwok Tsin gave evidence that it was Tak Hing that asked her to check whether it was true that there was on for sale in the block, and she returned the call to him to confirm it. This does seem to suggest that it was Tak Hing that was the one eager to buy. Further, it was Tak Hing who was the only one who could drive in the business, and it was he who drove the vehicle owned by the business which would be parked there. He had by then been working in the business nine years, the father had already contracted the stomach cancer from which he would die the following year, leaving the running of the business largely in his hands. In these circumstances it is more likely, in my view, that it was Tak Hing's idea and his wish to buy.

19. Where then did the money come from? The Plaintiff cannot show that Tak Hing paid from his own funds, as no bank statements or receipts are in evidence, but I find it difficult to believe that, after all this time in his father's business, and taking an increasingly prominent part in it as his father's health deteriorated, he did not have money of his own. He was after all still apparently single and living at home. A previous marriage was adverted to at some stage in the evidence, without any details being given.

20. As against that, the Defendant says that it was totally her money. She again referred to chit funds as the source of some of it, without any details at all of amounts, and said the rest came from her own savings. Again, there were no details or documentary evidence of those, or where they had come from, as she had long since given up her work at home when her husband's business became more successful. However, this is the only direct evidence I have, and I must accept it, albeit with some reluctance in view of its scanty nature.

21. So again I must look to the intentions of the parties at the time to see whether, by registering the car park in Tak Hing's name only, it was meant to be his property.

22. If the Defendant provided the funds, why should she not have her name as the owner? In her witness statement she says the car park space was purchased for her husband's business car, that neither he nor she could drive, that he was suffering from ill health, so "we gave the money to my son and asked him to buy the car parking space in his name."

23. Although Mr. Lui has directed my attention to a number of Commonwealth authorities in support of his contention that the presumption of advancement does operate where the gift is from mother to son, the English authorities are still against such a proposition. It may be time for it to be reconsidered, bearing in mind that the English cases supporting the contention date from the last century when society was infinitely more inclined to a patriarchal system, with responsibility always on the father for the support of the children. Times have changed, with equality of the sexes going beyond employment and social situations, and I am not convinced that the same cases tried today would have had the same result. One only has to look at the provisions of the Matrimonial Proceedings and Property Ordinance to see that it is now accepted that either party to a marriage can, in the event of divorce, be made responsible for the financial provision for a child. Such a provision would have been unheard of 100 years ago. Having said that, I cannot ignore the present state of the law as accepted by the editors of Snell's Equity, and Halsbury's Laws, and as it has been followed in Hong Kong.

24. In Wong San Mui and anor. v. Ha Pa Yang and anor. HCA 6027 of 1993 as reported in Hong Kong Current Law, Woo J., referring to the presumption, held that:

"Where a father, or a person who had put himself in loco parentis, purchased either real or personal estate in the name of a child alone, or in the joint names of the child and of himself or a stranger, the father or other person was presumed to have intended to make a gift to the child. The presumption did not exist where the purchase was made by a mother, but slighter evidence might be sufficient to prove an intention on her part to advance the child than would be required in the case of a purchase by a stranger."

25. I can find little evidence in this case to support the Defendant's contention that, by giving the money to Tak Hing to buy the car park, it was intended that he should hold it in trust for her or her husband. When a parent gives a child money a tells the child to buy something in their own name, even in the absence of a presumption of advancement, as a matter of common sense it is more likely to be a gift than an instruction to hold the property on trust. There is no suggestion here, as there was in the case of the flat, that it was a matter of convenience to have Tak Hing's name as the registered owner. There is no plausible explanation at all. Which leaves me with what, in my view, is the only possible explanation, that the Defendant intended the money, and. as a result, the car park space, to be a gift to him.

The $50000 loan

26. The evidence of the Defendant and her daughter, Shum Kwok Tsin, is that the loan of $50000 was made by the Defendant in December 1992 as part of three loans made by members of the family to Tak Hing at a time when he was hard pressed by the bank to repay his firm's overdraft, and needed $300000. They said that Shum Kwok Tsin lent him $200000, the Defendant $50000, and the Defendant's sister, his aunt, a further $50000.

27. Since his death, Shum Kwok Tsin has recovered the $200000 from his estate in separate High Court proceedings. There is no evidence as to whether the loan to the aunt has ever been recovered, or pursued at all.

28. The Plaintiff can shed little light on the loan. She agreed that there had been a serious financial problem at that time caused by a creditor going into liquidation, but said she had no idea of the loan. However, she very frankly admitted that she could not rule out the possibility that such a loan was made.

29. Mr. Lui has pointed out that both the Defendant and her daughter gave evidence of the loan being made on or after 28th December 1992, yet the Defendant's bank pass book shows a withdrawal on 24th December. This was not put to the Defendant in cross-examination so I have no explanation for it, save for the obvious assumption that they made an error in the date. He has also sought to persuade me that, if the payment was made to Tak Hing by the Defendant, then it must have been as a gift by a fond mother to a dutiful son. This is possible. But it is equally possible that it was the loan described, and, as the need for the loan is not seriously in dispute, nor the fact of the loan by Shum Kwok Tsin at the same time, I am satisfied that it was paid, and that it was more likely to be a loan than a gift.

30. The Plaintiff therefore succeeds in her principal contentions that the estate of Shum Tak Hing owns and is entitled to the one third share in the flat, and that the car park was at all times his sole property.

31. The Defendant succeeds on the counterclaim only to the extent of the claim for the repayment of $50000, on which I order stay of execution pending determination of the orders consequent upon my findings as to the flat.

32. I will hear the parties on this and as to the question of costs.