CHAN YIU v. LEE WAI LAN

DCCJ 6442/2020

[2025] HKDC 971

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 6442 OF 2020

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JUDGMENT

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1.  This case concerns a dispute regarding the beneficial interest of a property known as Office Unit C on the 7^th Floor of Shun Lee Commercial Building, Nos. 338 & 340 Castle Peak Road, Kowloon (“the Property”).

Background

2.  There is no dispute that the Property was purchased by the plaintiff and the defendant as joint tenants for a consideration of HK$156,000 by an assignment dated 21 May 1983. An initial deposit of HK$31,200 was paid and a mortgage of HK$119,844.35 was taken out from Citibank.

3.  The mortgage was discharged on 19 May 1993.

4.  There is a dispute in whether the plaintiff and defendant were married in the PRC in 1974 or were simply co-habitating in Hong Kong since around 1979. In any case, they had a son born in 1980.

5.  They had since separated. There is a dispute as to the date of separation: the plaintiff claimed that it was in 1988 but the defendant claimed it was in 1993.

6.  Around January 2019, the defendant wrote to the plaintiff proposing, to no avail, that either both parties should transfer their interests of the Property to their son or that they should sell the Property so that the defendant could recover 50% of the sale proceeds for the son’s use (paragraph 13 of the Re-re-amended Defence and Counter-claim, Trial Bundle 1, p. 31).

7.  Subsequently, in around March 2019, the defendant registered a Notice of Severance of Joint Tenancy in the Land Registry and served the same to the plaintiff in June 2019 (Document Bundle 1, p. 7-10)

The plaintiff’s case

8.  The plaintiff claims that there was an agreement (oral and then written) in May 1988 that the defendant to transfer the 50% legal interest of the Property as soon as possible for the return of the plaintiff paying a total sum of HK$220,000 (by 40 monthly instalments of HK$5,000) etc.. The alleged hand-written agreement dated 12 May 1988 is in Document Bundle 1, p.12 (the “Written Agreement”).

9.  Soon after the Written Agreement, the defendant and the son moved out of the Property.

10.  Instead of paying such sums in instalments, the plaintiff claimed that he had in fact paid the defendant in the following way:

a.  On 13 February 1989, drawing and cashing a cheque from his company, Wing Fat Trading Company (“Wing Fat”) from the account held at Sin Hua Trust, Savings & Commercial Bank (“Sin Hua Bank”) for the sum of HK$120,000, which he handed to the defendant personally;

b.  Around May 1990, writing a cheque from Wing Fat account in Sin Hau Bank for the sum of HK$22,000 which he mailed to the address of the defendant’s clinic (where she worked as a nurse);

c.  Around August 1991, writing a cheque from Wing Fat account in Sin Hau Bank for the sum of HK$78,000 which he mailed to the address of the defendant’s clinic.

11.  However, the plaintiff claimed that the defendant (with the son) went out of contact after the payments and failed to transfer the 50% legal interest in accordance with the Agreement.

The defendant’s case

12.  The defendant denies that there was ever any agreement: she did not sign the Written Agreement because the negotiation broke down.

13.  The defendant claims that she and the son actually separated from the plaintiff and left the Property in 1993, by which time the mortgage of the Property had already been substantially discharged.

14.  The defendant further denies that the plaintiff ever paid her the alleged sums in accordance to the alleged Written Agreement.

15.  Instead, the defendant claimed that she was ousted from the Property and sought a declaration of her beneficial interest as well as counterclaiming a loss of rental income etc.

The Legal Principles

16.  The legal principles on Common Intention Constructive Trust and Resulting Trust are not in dispute and can be summarised as follows:

a.  Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary.

b.  Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the plaintiff regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (i) the common intention, (ii) the plaintiff’s detrimental reliance on their common intention, and (iii) the unconscionability of the property owner departing from it.

c.  The burden of providing each element is on the person seeking to show that the beneficial ownership is different from the legal ownership. The focus is on the intention of the parties at the time of acquisition of the asset. Contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.

d.  Common intention can be expressed or implied. It can be deducted or inferred objectively from the parties’ conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in the legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

e.  There are two situations where a common intention constructive trust can arise:

1.  At any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The finding of such can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.

2.  Where there is no evidence to support a finding of an agreement or arrangement of the beneficial ownership, the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust.

f.  A resulting trust arises by virtue of the plaintiff’s contribution in money or in some other way towards the property’s acquisition. Equity holds the legal owner to be a trustee of that property for the plaintiff in an appropriate share, giving effect to the parties presumed intention. Particularly in a domestic context, but also generally, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust.

g.  An intention to have beneficial interest from legal interest in property is unlikely, and the task of showing that should not be lightly embarked upon. It was recognised that, in family disputes, strong feelings are aroused when couples split up which can often lead the parties, honestly but mistakenly, to reinterpret the past in self exculpatory or even vengeful terms. If a difference is to be found between the legal and beneficial interest, clear evidence will be required. Unequal contributions to the purchase price of property will not likely be enough to move away from the starting point that equity follows the law.

(per Coleman J in Lam Ka Kui v Choi Yuen Ling [2020] HKCFI 2647 HCA 537/2017)

Considerations

17.  It was pleaded in the Amended Statement of Claim that there were 2 agreements: an oral agreement on 12 May 1988 which preceded the Written Agreement on the same day (paragraph 6 of the Amended Statement of Claim, Trial Bundle 1, p. 18-19).

18.  However the plaintiff has clarified in court that his case was that:

a.  he was discussing orally with the defendant at the same time that he was writing the Written Agreement;

b.  the correct terms were recorded in the Written Agreement; and

c.  there was only one agreement concerning the Property between him and the defendant.

19.  As such, the crux of the dispute is whether:

a.  There was an agreement supporting a “common intention” as evidenced by the alleged Written Agreement; and

b.  The plaintiff had indeed paid the sum of HK$220,000 to the defendant in “detrimental reliance” to the Written Agreement as alleged.

The Written Agreement

20.  It is the plaintiff’s case that both parties had agreed on terms recorded in the Written Agreement (paragraph 6 of the Amended Statement of Claim, Trial Bundle 1, p. 18, paragraph 7 of the plaintiff’s (first) Witness Statement, Trial Bundle 1, p. 95-96). The defendant disputed this.

21.  However, it is obvious and not disputed by the parties that the Written Agreement had only been signed by the plaintiff and not by the defendant (Document Bundle 1, p. 12).

22.  The parties also dispute the cause of their separation. Suffice to say that each party accused the other of betraying the relationship. The court need not make any findings on the truth of such accusations as the cause of the split was not relevant to the consideration of this case.

23.  As for the circumstances of how the Written Agreement was created, both parties agreed that the plaintiff wrote paragraphs 1 to 6 and the defendant added paragraph 7 on the Written Agreement.

24.  The plaintiff gave evidence in court that he and the defendant were discussing the terms and he was writing them down. Then he saw the defendant wrote something more on the document and passed it back to him.

25.  Under cross-examination, the plaintiff explained in court that they were arguing intensely (“火遮眼”) at the time. He saw the name of the defendant (“李惠蘭”) appearing on the document (presumably, he meant under paragraph 7 which the defendant wrote: “兒子李蔚歸屬李惠蘭撫養，李蔚的一切生活一切歸李惠蘭管。”) and thought that this was enough.

26.  The plaintiff further argued that, if the defendant had not agree to the earlier paragraphs, she could have crossed them out or torn up the document. So he suggested that the fact that she added a paragraph on the document should be enough to show her agreement.

27.  However, the plaintiff also agreed that he had experience working in a commercial company and agree that it was usual practice that documents needed to be signed. When asked whether he checked the Written Agreement after the heated argument, the plaintiff claimed that he did not because he met with his sister soon after and gave it to her to be kept in a safe. Her sister also did not notice the lack of the defendant’s signature.

28.  On the other hand, the defendant’s case is that, during one of the intense arguments, the plaintiff presented her with the draft Written Agreement which provided that, inter alia, she would transfer her share of interest in the Property to the plaintiff in exchange for the custody of the son. The plaintiff also offered to pay her a monthly maintenance of HK$5,000 after the separation over a period of 44 months (paragraph 9 of the defendant’s (first) Witness Statement, Trial Bundle 2 p.406-407).

29.  The defendant inserted paragraph 7 in the draft Written Agreement. However, the parties failed to agree on the maintenance sums to be paid to the defendant and the son. The negotiation broke down and there was no agreement (paragraph 11 of the 2^nd Witness Statement of the defendant, Trial Bundle, p. 412-413). She therefore did not sign the Written Agreement.

30.  Even at this stage, it may appear that the defendant’s version of event is more logical: her signature was not on the Written Agreement, the plaintiff was aware of the significance of signatures on documents and indeed, despite what he claimed in court, should have reasonable opportunities to check after the “heated” argument. Yet, he somehow failed to do so.

31.  Therefore, the court finds that there was no reliable evidence to support whether there was an agreement on 12 May 1988 as alleged by the plaintiff. The court must therefore look at the contemporaneous conduct of the parties to see if this can infer or imply a common intention.

The alleged payments

32.  The most glaringly obvious problem with the plaintiff’s case is that the he altered his evidence from claiming that he did not pay the defendant HK$220,000 at all (as stated in the plaintiff’s first two Witness Statements) to that he did pay the amount in three separate sums (as stated in his Third and Fourth Witness Statements).

33.  The plaintiff commenced this action on 11 December 2020.

34.  In the plaintiff’s (first) Witness Statement dated 21 December 2021, he claimed that (as I summarise and translate from paragraphs 8 – 10, Trial Bundle p. 96-97)):

a.  Soon after the Written Agreement, the defendant and the son left the property “in a hurry” and did not leave any bank account numbers or contact details to the plaintiff;

b.  The son has changed school as well;

c.  Since then, the plaintiff could not contact the defendant and the son;

d.  The defendant did not arrange to transfer the legal title of the property to the plaintiff;

e.  The plaintiff did not have the defendant’s bank details, and so he could not pay the defendant the sum of HK$220,000 according to the Written Agreement;

f.  Further, he was worried that if he pay the sum, the defendant could breach the Written Agreement and refused to transfer the title. This was the reason why he stated in the Written Agreement that the defendant needed to attend the solicitor’s office to transfer the title first before he would pay; and

g.  As the defendant all along did not transfer the title, the plaintiff did not pay her any money.

35.  In the plaintiff’s Supplementary Witness Statement dated 31 August 2022, he affirmed this position (as I translate from paragraphs 35 and 40, Trial Bundle p.119):

“I remember that in fact on 12 May 1988, the defendant purposely requested me “to pay HK$5,000 a month for 44 terms starting from June 1988…”. This exceeded my ability to pay according to my income at the time (I was earning a salary of around HK$2,000 at the time, precise sum I cannot remember)…There was no way that I could afford the repayment. The defendant for sure knew that I could not afford this so in fact, she never thought I could afford this. Because of this, she did not bother to give me her bank account information.”

“I would repeat that the defendant did not abide by paragraph 3 of the Written Agreement to first attend the solicitor’s office to arrange for transfer of the title. Furthermore, the defendant did not provide any bank account details to me so I could not give the defendant any money.”

36.  However, in the plaintiff’s 2^nd Supplementary Witness Statement dated 9 November 2022, he now claimed that (as I summarised and translate from paragraphs 8-14, Trial Bundle 1, p. 130-133):

a.  After searching through contemporaneous documents at the time, he has “recovered memories” of more than 30 years ago;

b.  He was in PRC with his brother for Chinese New Year (“CNY”) in 1989. Between 4 and 10 February 1989, the defendant called and asked him to pay according to the Written Agreement;

c.  He asked the defendant that she should attend the solicitor’s office to transfer title first but the defendant said she needed to receive the money before the transfer of title;

d.  The defendant called to chase him again the next day so he arranged to meet her on the morning (10:30 am) on the 8^th day of CNY at the Sin Hua Bank (when the bank re-opened after CNY holidays);

e.  He had over HK$300,000 in the account at the time and because he did not want the defendant to “constantly disturb” him, he wrote a cheque for HK$120,000 and cashed it.

f.  He then handed this cash to the defendant immediately (at the Sham Shui Po Lei Cheng Uk branch of Sin Hua Bank);

g.  He could be sure that he paid the defendant because it was his usual business practice to pay all outstanding bills before CNY. His clients were all in PRC so he would have done bank transfer and not use cash. Even if it was payment for Hong Kong clients, it was CNY so he would not pay a lot of cash but would use cheques. Further, according to his departure records, he only declared carrying HK$4,000 into Guangzhou, PRC, so he could not have taken out so much cash for use;

h.  The defendant did not contact him again until May 1990. She said that the HK$120,000 only lasted until 1990 May and asked for the balance in one go;

i.  However, the plaintiff’s company did not have much cash, but he did not want the defendant “to come to his home to chase him for money”, so he issued a cheque for HK$22,000 and sent this to an address in Prince Edward Road East where he knew was the defendant’s clinic address (where she was working as a nurse). The cheque was cashed on 23 May 1990;

j.  The plaintiff now explained that this clinic address was “the only address of the defendant that I knew”;

k.  The plaintiff was then busy at work and forgot about further payments until the end of August 1991 when he “suddenly” got a call from the defendant. She apparently said, “It has again reached the time that you have to pay, pay me quickly.”;

l.  So the plaintiff prepared a cheque for HK$78,000 on 30 August 1991 and again sent the same to the defendant’s clinic address. The cheque was cashed on 2 September 1991;

m.   However, after each payment, the plaintiff “foolishly did not request the defendant to give a receipt or ask for confirmation of receipt”;

n.  After receiving the full sum of HK$220,000, the defendant did not call or contact him again, and she did not transfer the interest of the property; and

o.  The plaintiff “did not understand law” so he “even more foolishly did not take legal action to request the defendant to transfer 50% of the legal interest” to the plaintiff in accordance with the Written Agreement (presumably, the plaintiff meant “until this action”).

37.  The plaintiff made a 4^th Witness Statement on 16 February 2024. This was in reply to the defendant’s 4^th Witness Statement which, in essence, denied that she has ever received the 3 payments totaling HK$220,000 according to the Written Agreement (and again denied that there was any agreement).

38.  The plaintiff now further claimed that (as I translate from paragraph 2, Trial Bundle 1, p. 143):

“…I wish to add that, to avoid being harassed by the defendant for payment, and I saw that my company has over HK$300,000 in the account at the time, and I considered that the son’s living should not be affected by our disputes, so I suggested that I could arrange to pay in one go the entire sum for the son’s maintenance, that is, HK$120,000. My condition was that the defendant should not chase me every month, and should only ask me for money after 2 years. The bank deposit rate was high at the time so the defendant happily accepted…”

39.  As for the calculation of the son’s maintenance expenses and how this came under the alleged agreed sum of HK$220,000, the plaintiff explained under paragraph 7 of the same document (as I translate):

“The maintenance expense of the son until 21 years (i.e. the year 2001) from 1988 would be, for a monthly payment of HK$750, total HK$117,000 (i.e. HK$750 x 12 x 13 years). Finally, we agreed at HK$120,000. The son’s maintenance of HK$120,000 plus the defendant’s interest of the Property at HK$100,000 came to a total of HK$220,000, which was divided into 44 monthly payments of HK$5,000…”

40.  Of course, the obvious burning question that the plaintiff needs to address to the satisfaction of this court is:

Why did he completely change his evidence from a “no payment made” version of events to “full payment made” version of events between 31 August 2022 and 9 November 2022, almost 2 years after commencement of the action?

41.  It is of note that, in support for his “full payment made” version of events, the plaintiff can only one piece of evidence capable of identifying the defendant as recipient of a payment: a copy of a cheque dated 30 August 1991 for the sum of HK$78,000 addressed to the defendant from Wing Fat (Document Bundle 6, p. 1220).

42.  The defendant, in her 5^th Witness Statement, admitted receipt of this sum but explained that this was not related to the Property but was for payment of her mother’s medical expenses. I will deal with this dispute later.

43.  For the remaining two of the alleged payments, the plaintiff only referred to particular entries in the Sin Hua Bank statements. These records only show the dates, the cheque numbers and the amounts withdrawn (Document Bundle 6, p. 1218 and 1219). There is no information as to the identities of the recipients of these cheques. Further, the plaintiff cannot produce any copies of those two cheques, cheque stubs, records of receipts or, indeed, any records that the money was paid to the defendant in compliance with terms of the Written Agreement.

44.  Indeed, as observed by Mr. Ken Chan, counsel of the defendant (“Mr. Chan”), the plaintiff has produced voluminous amounts of bank statements (he estimated to be around some 80 pages).

45.  It was of note that Wing Fat issued many cheques for withdrawals during all these times. For example, one can observe that in just the one month between 26 April 1990 and 24 May 1990, Wing Fat issued 18 cheques for withdrawals (ranging from as little as HK$7.50 to as much as HK$24,720) (Document Bundle 6, p. 1219). One wonders how, by looking at such voluminous bank transactions over the years, the plaintiff could suddenly “recover his memories” as alleged?

46.  Under cross-examination, the plaintiff explained that he could not remember that he paid HK$220,000 at the time because he “could not find the evidence of payment at the time” (“點解會唔記得咗，因為我當時根本找不到自己俾咗錢嘅證據”). He said that his solicitors had asked him whether he had paid, and that if he had, he should find the evidence. As he could not find the evidence at the time, he could not state that he has paid and could only “endure it by keeping quiet” (“查唔到證據，只有啞忍!”).

47.  This is clearly a ludicrous explanation.

48.  It is not the plaintiff’s case that he has many cohabitants and many properties in disputes over the years, or that he is so rich that HK$220,000 is but a trivial sum, and so he may not remember whether he paid or not. The plaintiff admitted that this was the only property he had with the defendant and this was the only (alleged) agreement.

49.  Given the passage of some 30 years, I would accept that one might forget the finer details of the payments, e.g. the dates and amounts of each payment and the way each sum was paid.

50.  However, “have I paid?” is a simple yes or no question.

51.  Moreover, this question (i.e. whether the plaintiff has complied with the terms of an alleged agreement) is central to the dispute and must have been an important consideration on the plaintiff’s mind when contemplating the current action.

52.  As such, if the plaintiff had actually paid, I find it unlikely that he could have lost that memory so completely to the extent that he might ever deny having paid at all.

53.  Furthermore, it is of note that the plaintiff claimed (more than once in court) that he had to “endure it by keeping silent” as the explanation for the evidence in his first two witness statements.

54.  This explanation is clearly false: the plaintiff did not “keep silent” about the alleged payment: instead, as stated in paragraphs 34 and 35 above, the plaintiff made a positive case that he did not pay the defendant at all and proceeded to give evidence to justify this, for example:

a.  she left in a hurry and did not leave any bank details, the son even changed school so both could not be contacted;

b.  he was concerned that the defendant might breach the agreement if he paid upfront so he did not pay. In fact, the plaintiff stated many times in court that his business practice was “money and goods to be exchanged at the same time” (“一手交錢一手交貨”); and

c.  His salary at the time could not afford the payment and the defendant “for sure” knew this, and that was why she did not even bother to leave her bank account details to him.

55.  Of course, when the plaintiff changed his evidence to the “full payment” version of events, he proceeded to put forward another set of evidence to justify that claim which are embellished with rich details (as stated in paragraphs 36, 38 and 39 above), including:

a.  his travels during CNY of 1989;

b.  the dates and contents of telephone conversations with the defendant (and how he had forgotten about further payments in between such);

c.  his business and payment practice during CNY;

d.  how and why each of the 3 payments came to be those amounts (including agreements and calculations regarding the arrangement of the son’s maintenance never mentioned previously);

e.  how each of those 3 payments were delivered to the defendant (by meeting in person and handing over cash, by post to the “only known address” of the defendant); and

f.  Why he failed to take action to request the defendant to transfer the legal interest pursuant to the Written Agreement given that he had made full payment in August 1991 (until he commenced the current action in 2020, some 29 years after).

56.  Therefore, the plaintiff is effectively trying to convince the court that he has previously suffered from memories of false evidence, and now that he has “recovered” the memories of another set of evidence, the court should accept these instead as the truth!

57.  However, even this new version of events is full of internal inconsistencies and illogical explanations as I shall examine below.

The period between May to September 1988

58.  The plaintiff confirmed that the defendant and the son moved out in September 1988 (see paragraph 9 of the plaintiff’s 2^nd Supplementary Witness Statement, Trial Bundle p.130).

59.  If so, the defendant was still living in the Property from June to August 1988 and was not “out of touch”. Why did the plaintiff not pay HK$5,000 each month during this time according to the Written Agreement?

60.  The plaintiff explained that he did not pay because the defendant had not moved out, and that she had not yet attended the solicitor’s office to transfer the interest. His thinking, as an experienced businessman, was that “money and goods should be exchanged at the same time” (“一手交錢一手交貨”).

61.  So, did the plaintiff chase the defendant to transfer the interest during this time?

62.  The plaintiff at first claimed that he already had the Written Agreement and so did not want further dispute. They both were busy working. But on further questioning, the plaintiff claimed that he now remembered that he did chase the defendant “1-2 times” but she said she needed to work and had no time to attend the solicitors.

63.  So, after the defendant moved out (allegedly) in September 1988, why didn’t the plaintiff pay her in accordance with the Written Agreement?

64.  The plaintiff argued that this was because he was “afraid that the defendant might move back”.

65.  As such, the plaintiff did not pay before the defendant moved out, and did not pay after she moved out.

66.  Therefore, even on the plaintiff’s “new” case, the defendant did not transfer the interest and the plaintiff did not pay HK$5,000 per month. Neither parties’ conducts showed that they were abiding by the alleged Written Agreement during this period.

February 1989 and alleged payment of HK$120,000

67.  The plaintiff alleged that in February 1989 (precisely between 4^th and 10^th), he received two telephone calls (but actually attending only one, as he confirmed in court) from the defendant whilst in Guangzhou.

68.  Of course, the plaintiff has no documentary evidence of such telephone calls and presumably, these are part of his “recovered” memories.

69.  The defendant now “requested him to pay money according to the Written Agreement” (paragraph 9 of the plaintiff’s 2^nd Supplementary Witness Statement, Trial Bundle p.130).

70.  Why did the plaintiff not obtain a receipt from the defendant given that he was handing over HK$120,000 in cash?

71.  The plaintiff explained that the defendant said that she would only give a receipt after receiving all the payment. (In his witness statement, he only stated that the defendant said she would transfer the interest after receiving all the payment.)

72.  This is clearly illogical.

73.  What is the point and logical justification of issuing a receipt only when all the payments have been received, and not when each payment was received?

74.  The plaintiff then explained that he still had feelings for her so “don’t want to give her a lot of pressure” (“唔想逼得太緊”).

75.  This explanation is again illogical: I cannot see how asking someone to sign a receipt after receiving HK$120,000 in cash would be giving any “pressure” to that person.

76.  Further, as the plaintiff kept stating that he was a businessman with the practice of “money and goods to be exchanged at the same time” (“一手交錢一手交貨”), I am not convinced that he would fail to obtain a receipt to protect his own interest. Indeed, he could have insisted that the defendant should sign a receipt otherwise he would not hand over the cash.

77.  I also observe with interest that on re-examination, the plaintiff gave another explanation why that he did not insist on the defendant giving a receipt: “We have been living together for long so I trusted her.” This would be entirely inconsistent with his earlier evidence of his business practice of “money and goods to be exchanged at the same time” (“一手交錢一手交貨”).

78.  It was clear that the plaintiff was “flip-flopping” in an attempt to answer two sets of questions: why he failed to pay the defendant HK$5,000 per month in accordance with the Written Agreement, and why he failed to obtain a receipt for this alleged cash payment. He simply gave an answer (in form of new evidence) according to what he thought was good for his case without realising that he was giving conflicting answers.

79.  It was then put to the plaintiff that even if the defendant refused to give a receipt, there was nothing to stop the plaintiff, on his own, to record such a transaction, say, in writing on the bank statement or just on a piece of paper.

80.  The plaintiff now claimed that he “should have” (“應該有 ”) the record in a notebook. But he had lost the notebook (and the cheque stumps) because he had moved office a few times. On further questioning, he said that he had been looking for the notebook around the time of the commencement of the action but could not find it.

81.  This is, again, new evidence.

82.  Further, it begs the question, if the plaintiff knew that he “should have” kept the record of the payment all along (which prompted him to search for the notebook in the first place), why would he gave the “no payment” version of events in his first two witness statements?

83.  The plaintiff explained that it was his “feelings” (“ 感覺上”)that he should have paid. He “felt” that he could not have been such a “bad person” that he did not pay. Then he found the cheque for HK$78,000 and then he “slowly” looked at the records and “pieced the payments together” (“拼出來”). That was how he “recovered” his memories and so he amended his case.

84.  Mr. Chan suggested to the plaintiff that, after he found the cheque for the payment of HK$78,000, he had retrospectively trawled through the numerous transactions in the bank statements over the years to locate two transactions that fitted the balance of payment. (Mr. Chan also showed other examples of transaction combinations that would fit). He then changed his evidence and claimed that these were the payments by “creating” a background explanation of such payments accordingly.

85.  The plaintiff of cause denied this but one wonders whether this was the plaintiff’s “Freudian slip” when he said that the payments were “拼出來”. Indeed, this may explain why the alleged circumstances of such payments were so illogical and unbelievable.

86.  Further, it does not matter how the plaintiff was putting it (whether he felt he have paid or that he should have kept record of the payment). In either case, he could not give any reasonable explanation as to why, under the circumstances, he pleaded a positive case of “no payment” at the commencement of the action and in his first two witness statements.

87.  The plaintiff is clearly not a credible witness.

88.  Indeed, the justifications the plaintiff claimed that showed that this must have been a payment of cash to the plaintiff (e.g. his business and payment practice around CNY etc. see paragraph 36(g) above) were all his bare assertions without other document evidence.

89.  In addition, he also suggested that the money must have been paid to the defendant because the records showed that he had taken out so much cash but only declared HK$4,000 when entering PRC on the same day.

90.  Mr. Chan observed that this did not appear to be an exceptional occasion but was quite a routine. The records showed that on many occasions, the plaintiff took a large withdrawal from the Sin Hua bank account and then entered the PRC on the same (or next) day. But yet, from his China entry records, he always declared that he was only carrying a few thousand dollars in cash.

91.  The plaintiff’s immediate answer was: “I have no courage!” (“我冇膽!”)

92.  I note with interest that the plaintiff made his reply without the need to check the voluminous amount of bank statements and China entry records to see if Mr. Chan’s observation was true. Perhaps it might be some pure coincidence that he could explain.

93.  This reaction might suggest that the plaintiff was all along fully aware of his “routine”.

94.  Further, Mr. Chan’s observation only hinted at some illegal activities (perhaps smuggling of cash into China?). One expect an innocent person would immediately deny this and provide an explanation. However, the plaintiff’s answer was neither. Instead, it was a linguistic “sleight of hand”: he made a suggestion that made the listener thought it was a denial. In fact, he merely claimed that he was a coward and perhaps hoped that this might draw an inference: “Oh! A coward would never do any smuggling!”

95.  Of course, the legality of the plaintiff’s bank withdrawal routine is irrelevant to this case, but his answer would further raise a question on his credibility.

96.  In any case, I find none of the “justifications” showing that the plaintiff have paid the defendant HK$120,000 convincing.

97.  The other big question concerns the amount he allegedly paid the defendant on this occasion.

98.  As stated above in paragraph 69, the defendant only “requested him to pay money according to the Written Agreement”. Under cross-examination, the plaintiff confirmed that the defendant did not asked for any specific sum of money.

99.  This of course begs another question: if the defendant only requested HK$5,000 per month, and that the sum owing for the 9 months since May 1988 would only be HK$45,000, why should the plaintiff pay HK$120,000 at this point of time?

100.  To this, the plaintiff has given several explanations.

101.  Firstly, he claimed that the bank account has excess money and he “did not want the defendant to disturb him frequently” (paragraph 10 of the plaintiff’s 2^nd Supplementary Witness Statement, Trial Bundle p.131).

102.  I do not believe this explanation. It is the plaintiff’s own evidence that he had never paid the defendant all along so money was owing since June 1988. However, she only called in February 1989. (Indeed, the plaintiff admitted in court that there was only one telephone conversation.)

103.  As such, even on the plaintiff’s own case, there was only one “disturbance” in 9 months. There was clearly no risk of “frequent disturbance” by the defendant, at least no such risk as to reasonably justify paying HK$120,000 instead of the sum owed according to the Written Agreement (HK$45,000).

104.  Secondly, the plaintiff claimed that this sum was for an early but total payment of the son’s agreed maintenance fee (see paragraph 38 above).

105.  The son was only 8 years old at the time. So why would he decide to pay maintenance fee for the son up to 21 years old? The plaintiff claimed that he told the defendant that: “the son is innocent and the dispute is only between us, so I will pay the whole maintenance costs upfront so it would not affect the son!” This line of explanation was not mentioned until paragraph 2 of the plaintiff’s 4^th Witness Statement (Trial Bundle 1, p.143)

106.  As such, the plaintiff now claimed that there was an agreement of the monthly maintenance sum for the son of HK$750.

107.  There was no mention of such in the Written Agreement. This would be inconsistent with the plaintiff’s previous claim in court that all the correct terms were stated within.

108.  Further, it was stated in the Written Agreement that the plaintiff would pay HK$5,000 per month for 44 months, i.e. for a period of 3 years and 8 months. But the plaintiff now claimed that there was also agreement for the maintenance sum for the son at HK$750 per month until he was 21 years old, i.e. for 13 years, and that the maintenance money was included in the agreed payment of HK$5,000 under the Written Agreement.

109.  This is clearly inconsistent and illogical. Even if there was this “additional agreement”, there would likely be some calculations (not to mention discussions and negotiations) between the parties so that the purported monthly payment of maintenance over 13 years could be paid up within 44 months.

110.  The plaintiff appeared to be able to recall many details of the circumstances concerning the Written Agreement on 12 May 1988. However, even in the plaintiff’s 4^th Witness Statement when he first mentioned the calculation of the son’s maintenance, he has completely failed to mention the circumstances of such an “additional agreement”.

111.  Further, during cross-examination, the plaintiff confirmed that he remembered the agreement to pay maintenance for the son but he failed to give any reasonable explanation on why he failed to mention that until his 4^th Witness Statement on 16 February 2024, more than 3 years after the commencement of the action.

112.  The plaintiff attempted to explain that he had a different working style and lower working level. This was clearly not believable.

113.  There is yet another big problem with the plaintiff’s case.

114.  The plaintiff claimed that he did not pay the defendant from June to August 1988 onwards because he was concerned that if he paid her, she might not move out. And after she did move out in September, the plaintiff claimed that he did not pay her because of the concern that she might return.  If so, why would the plaintiff pay her HK$120,000 in February 1989 and somehow not be concerned that she might still return?

115.  At first, the plaintiff claimed that this was when the defendant had moved out for a long time so he was certain. However, when it was put to him that this was only 5 months after she moved out, the plaintiff then said, “It was just a gamble!” (“ 博吓!”).

116.   Could he not simply change the door lock? The plaintiff said: “I cannot be so mean. She still had personal items in the Property so I allow her to take. She could come back any time but I might not know because I need to travel to the PRC in my work.”

117.  As such, the plaintiff was clearly not that concerned about the defendant being able to re-enter the Property and move back after all!

118.  This is another example of the plaintiff’s “flip-flopping”: by trying to deal with this line of questioning, the plaintiff completely contradicted his earlier answer to justify why he did not pay the defendant according to the Written Agreement since the month of June 1988.

119.  When this inconsistency was put to the plaintiff, he simply claimed that: “I was dumb!”

120.  In conclusion, I find no convincing evidence, on balance of probability, that the plaintiff has paid the defendant HK$120,000 in accordance with the Written Agreement in February 1989 as alleged or at all.

May 1990 and alleged payment of HK$22,000

121.  The plaintiff’s case is summarised in paragraphs 36(h), (i) and (j) above.

122.  The plaintiff again has no documentary record of the alleged telephone conversation in May 1990, yet he was able to give details of the defendant’s precise request, presumably as part of his “recovered” memories.

123.  The plaintiff claimed that the defendant said: “It has reached the time that you have to pay me (“到期俾錢”). You have only paid me HK$120,000, so it should be payment until to May 1990. You have to pay the balance of HK$100,000 in one go!” (paragraph 12 of the plaintiff’s 2^nd Supplementary Witness Statement, Trial Bundle p. 131-132)

124.  Of course, in view of the evidence from the plaintiff (from his 4^th Witness Statement) that the HK$120,000 was agreed to be for the maintenance of the son until he was 21, why would the defendant be claiming that HK$120,000 “should be payment until May 1990”? Surely, if the defendant said such, the plaintiff would have pointed out that the previously paid sum was for the son’s maintenance until he was 21, and that he was only 10 years old then.

125.  For all these “recovered” memories that allowed the plaintiff to now give such details of this telephone conversation, the plaintiff did not state that there was any such discussions. The plaintiff’s evidence is again inconsistent and illogical.

126.  The plaintiff’s evidence for the alleged payment was again from the Sin Hua bank statement (Document Bundle 6, p.1219). Similarly, the statement only shows the cheque number, amount paid (HK$22,000) and the date (23 May 1990). There is no information as to the payee of the cheque.

127.  The plaintiff also has not produced a copy of this cheque nor the cheque stump, any receipt nor any other record of this payment.

128.  Similarly, by looking at this bank statement, one would note that in this month alone (from 26 April to 24 May 1990), Wing Fat had issued 18 cheques for withdrawal for sums ranging from HK$10 to HK$24,720.

129.  Under cross-examination, the plaintiff claimed that he “remembered” this one cheque for HK$22,000 as the one paid to the defendant (and, presumably, he then “recovered” the memories regarding the telephone conversation).

130.  This is, again, not convincing.

131.  Further, the plaintiff claimed that he simply paid by sending the cheque to the defendant’s clinic address.

132.  Despite this payment, he claimed that he had still failed to chase or request the defendant to attend the solicitor’s office to transfer the interest of the Property.

133.  Indeed, now that the plaintiff’s case was that he knew the working address of the defendant (so she did not disappear out of contact as previously alleged), there was no reason why he should not get hold of the defendant to arrange for a visit to the solicitor’s office before he gave more money.

134.  This is, again, very much against the plaintiff’s claimed business practice of “money and goods should be exchanged at the same time” (“一手交錢一手交貨”).

135.  Furthermore, instead of paying the balance of HK$100,000 as allegedly requested by the defendant, the plaintiff only paid HK$22,000. The plaintiff explained that his company was short of cash at the time and this was what he could afford to pay.

136.  As such, the plaintiff’s case was that although the defendant requested for HK$100,000, he only sent a cheque for HK$22,000. Nothing more was heard from the defendant, so apparently, for whatever unexplained reasons; the defendant had simply accepted this smaller sum without chasing him for the remaining balance (until the next alleged telephone call more than 1 year later).

137.  Even on the plaintiff’s own case, the defendant had made no contact with him except calling him (once or twice) in February 1989 and once in May 1990 since she left in September 1988.

138.  However, the plaintiff claimed that, despite his company having not much cash, he paid HK$22,000 because: “I don’t want the defendant to come to the Property to look for me to pay money.” There was, again, no reasonable justification for that concern.

139.  Also, HK$22,000 was an odd sum (the Written Agreement was for HK$5,000 a month so this was not a payment for 4 or 5 months). It would be more important for a receipt to record such an odd sum.

140.  The plaintiff now claimed that he was “sure” that such payment was recorded in the notebook, which he had lost. Of course, this again brought back the argument that if he was so “sure” of the record of payment, why would he claim that there was no payment in his first two witness statements?

141.  In conclusion, I find no convincing evidence, on balance of probability, that the plaintiff has paid the defendant HK$22,000 in accordance with the Written Agreement in May 1990 as alleged or at all.

August 1991 and the alleged payment of HK$78,000

142.  The plaintiff’s case is summarised in paragraphs 36(k) and (l) above.

143.  The plaintiff claimed that he was busy at work and had forgotten to pay the defendant until she called in late August 1991. Apparently, the defendant told him that: “It has again reached the time you have to pay (“又到期俾錢”). Pay me quickly!”

144.   Firstly, if the plaintiff had paid HK$22,000 in May 1990, this sum would only have lasted less than 5 months, i.e. until October 1990. There was no explanation as to why the defendant would wait another 10 months before chasing him. Of course, under the circumstances, the defendant would unlikely have said: “It has again reached the time you have to pay…” instead of: “You are 10 months behind in payment!”

145.  Further, the plaintiff once again showed that even in his case, the defendant did not have a habit of disturbing him and chasing for payment. This would again be inconsistent with the plaintiff’s often-repeated claim that he was concern with the defendant disturbing and harassing him.

146.  This time, the plaintiff managed to produce a copy of the cheque addressed to the defendant for the sum of HK$78,000.

147.  In her 5^th Witness Statement, the defendant admitted  receiving this cheque but claimed that this was for payment of her mother’s medical expenses. It was a remittance of US$10,000 from relatives (Lee Ping Kin and Amy Lee) from USA.

148.  Ms. Sezen Chong, counsel for the plaintiff (“Ms. Chong”), made much of the fact that the defendant had all along denied receiving any payment from the plaintiff, and only admitted it after the plaintiff disclose a copy of this cheque in his 4^th Witness Statement.

149.  Ms. Chong also submitted that this was “not a small sum of money in 1988” (or, more accurately, 1991 when it was paid) and if the court accepted that the couple separated in 1988 rather than 1993, then “the only reason” why the defendant was paid this sum was for the settlement of the Written Agreement.

150.  However, when one reads paragraphs 4 and 5 of the defendant’s 4^th Witness Statement together, (Trial Bundle 2, p. 424), it is clear that the defendant was denying receiving any payment under the alleged Written Agreement (because she denied ever agreeing to it). She was not denying that she had ever received any payment from the plaintiff.

151.  Further, given that even Ms. Chong submit that this was “not a small sum” at the time, it is the baffling that the plaintiff completely forgotten about this payment until at least until his 2^nd Supplementary Witness Statement in November 2022.

152.  On the other hand, there was good reason why the defendant might have forgotten receiving this payment at all: it was not related to the Property or the Written Agreement.

153.  Furthermore, the plaintiff claimed in court that if there was a sum remitted from USA, it would have shown in his bank accounts but there were none.

154.  However, there were two cheques dated 31 May 1991 from Lee Ping Kin and Amy Lee for the sums of US$4,000 and US$2,000 to the plaintiff. The plaintiff failed to find such remittance in his bank statements. Hence, the fact that there was no deposit shown in the plaintiff’s account would not be proof that such deposit did not occur.

155.  The defendant’s case was that the plaintiff and defendant had mixed their finances together and the defendant did not have a cheque account, so cheques were issued by the plaintiff.

156.  Mr. Chan referred to clauses 1 and 2 of the Written Agreement (Document Bundle 1, p.12). Those clauses, as proposed by the plaintiff, stated to the effect that after auditing by both parties of the assets (including all cash and the Property), the rights and interests should be divided 50% for each party, and that after (the proposed) separation, each party should be financially independent from the other.

157.  I agree with Mr. Chan that this clearly shows that the plaintiff and defendant had their finances mixed together.

158.  On balance of probability, I found that this payment of HK$78,000 by cheque on August 1991 was not related to the Written Agreement or the Property at all but was related to the medical expenses of the defendant’s mother.

The date of separation

159.  There is a dispute: the plaintiff claimed that the defendant moved out in September 1988 but the defendant claimed it was 1993.

160.  As stated in paragraph 142 above, Ms. Chong made a big deal out of this date because she submitted that if the couple had separated in 1988, “the only reason” why the defendant was paid HK$78,000 in August 1991 was for the settlement of the Written Agreement.

161.  The defendant has disclosed the school handbooks of the son for the school term commencing on (September) 1988, the school term commencing on 1989, the school term commencing on 1990 and the school term commencing on 1991 (Document Bundle 6, p. 1268, 1270, 1277 and 1279). No objection as to the authenticity of the son’s school handbooks was raised by the plaintiff.

162.  The school handbooks all showed that the Property as the home address of the son and with the same home telephone number. These are objective evidence that the son was living in the Property until at last 1991.

163.  Further, the handbooks are from the same school so they show that the son did not change school after the defendant moved out in September 1988 as the plaintiff alleged. Thus, there would be no reason why he could not contact the son (and thus the defendant).

164.  Further, the defendant has disclosed a set of photographs dated 23 November 1991 which showed the plaintiff, the defendant and the son amongst other relatives at the Hong Kong Kai Tak Airport.

165.  These are again objective evidence to show that the plaintiff, the defendant and the son were still in contact after the alleged last payment in August 1991. The plaintiff’s claim that the defendant had no contact with him after the full payment (thus he could not procure her to transfer the interest of the Property) was clearly false.

166.  In addition, the defendant was able to produce the Demand for Rates of the Property for January 1989, April 1992 and January 1993. The plaintiff argued in the court that the defendant could have snuck back to the Property to steal them. This is clearly not credible: I cannot see how the defendant could have the foresight and legal knowledge to do that in anticipation of the current legal action some 30 years later. The most likely explanation of such is that the defendant was living in the Property as she alleged until at least January 1993.

167.  Against the strength of these objective evidence, the plaintiff only has subjective evidence from himself, her mother and sister, draw from memory of an event some 35 years ago.

168.  I need not go into detailed discussions of such subjective evidence but suffice to say, I find that, on balance of probability, the plaintiff and the defendant separated only in 1993 as the defendant claimed.

169.  As such, the submission of Ms. Chong that the payment in August 1991 must be for the payment under the Written Agreement must fail. I find that the couple had not separated at that time.

The defendant’s evidence

170.  Given my findings above and that the burden of proof is on the person seeking to show that the beneficial ownership is different from the legal ownership, I need not go into a detailed analysis of the defendant’s evidence.

171.  Suffice to say that I found the defendant to be a much more honest witness. She was able to provide many rich details to the couples past history (including their PRC marriage, how the plaintiff came to Hong Kong, reasons for his concern about his Hong Kong status, , her pregnancy, their respective work, reasons for disputes and separation, reasons for application for immigration to USA etc.)

172.  I found her evidence to be coherent and logical on the whole and, as stated above, I accept her evidence that she never accepted the Written Agreement nor received any payment under such, and she had continued to live in the Property until 1993.

Other disputes

173.  There are many other disputes between the parties which concern their marital status in China, application for immigration to USA, reasons for separation etc.. I am of the view that these are not relevant to the issues in this action.

Conclusion

174.  The plaintiff has clearly failed to discharge the burden of proof to show that there was any common intention, either expressed (as alleged in the Written Agreement) or implied/inferred by the conduct of the parties that the defendant had agreed to transfer 50% of her interest of the Property to the plaintiff.

175.  The plaintiff also has clearly not discharge the burden of proof to show that he has relied on any common intention to his detriment: the court does not find, on balance of probability, that he has made any payment at all to the defendant in pursuant of the Written Agreement as alleged or at all.

176.  Given that the court finds that the couple were living together with mixed finance until at least 1993, and given that there is no dispute that the mortgage has also been fully repaid in 1993, there is also insufficient evidence before the court to support the finding of a resulting trust.

Order

177.  I will therefore give the following orders:

a.  The plaintiff’s claim be dismissed;

b.  There be a declaration that the defendant owns 50% beneficial interest of the Property;

c.  The plaintiff shall pay damages for loss of rental income of the Property to the defendant for a period of time and amount to be assessed; and

d.  Costs of this action be to the defendant to be taxed if not agreed with certificate for counsel granted.