KWOK SIN HO v. WA KWOK also known as KWOK WA

HCA 903/2014

[2018] HKCFI 612

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 903 OF 2014

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J U D G M E N T

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Introduction

1.  This is a family dispute over the beneficial ownership of a property in Chevalier Garden, Sha Tin, in the New Territories (“Property”) held in the joint names of the plaintiff and his son, the defendant, as joint tenants.

2.  In his statement of claim, the plaintiff (“P”) seeks a declaration that he is the sole beneficial owner of the Property and the Property is being held on trust for him absolutely.  Although alternatively, P seeks a declaration that the Property is held on trust for him and the defendant (“D”) in equal shares, P’s positon at the trial remains that he should be entitled to 100% of the beneficial interest, having paid for all the purchase price.

3.  D counterclaims for a declaration that by reason of his contribution to the purchase price he holds at least 50% of the beneficial interest of the Property.

Background

4.  P was born in November 1937, and is now 80 years old.  He and his wife (“Madam Kwok”) were married in 1958 in Hubei, and they have two children, a daughter Guo Shuqiong (“GSQ”) born in 1961, and D born in 1962.

5.  In December 1979, P, Madam Kwok and D moved to Hong Kong from the Mainland.  P said he found work about 3 days after he arrived in Hong Kong and continued to work until his retirement in 2002.  Madam Kwok also worked in a hospital after arriving in Hong Kong until 1986.

6.  When their initial home had to be demolished due to redevelopment by the Government, they were arranged by the Government to reside in a unit in a temporary housing estate (“Kai Cheung Estate”) while queuing up for a public housing unit.  P said he was allocated a public housing unit in Tin Shui Wai, but found it inconvenient, and he and Madam Kwok then decided to apply to purchase a unit under the then Home Ownership Scheme (“HOS”) of the Government.

7.  It was P’s case that he asked D to help with the application, and that he did not realise at the time that D had made the application in D’s own name until when it came to selection of the unit.  The Property was selected in September 1987 and the formal sale and purchase agreement (“SPA”) was executed in the same month.  Occupation permit was issued about a year later in September 1988 and completion took place in November 1988.  Shortly thereafter, in December 1988, D left Hong Kong to further his studies in the United States.

8.  Since then, D had only returned to Hong Kong on two occasions, the first time was in about 1990/1991 when Madam Kwok was not well and had to undergo an operation, and the second time was to attend Madam Kwok’s funeral in April 2012. 

9.  According to P, after D went to the United States, D had to rely on P and his elder sister GSQ for financial assistance. GSQ had gone to the United States two years earlier in 1986.  She has since also settled in the United States.

10.  It was not disputed that the Property was acquired with a 95% mortgage loan from the Standard Chartered Bank (“Mortgage Loan”).  P’s case that it was he and Madam Kwok who were responsible for all the mortgage instalments of the Property and all outgoings.  It was also P’s case that in 1996/1997, with the assistance of GSQ, P had paid off the then outstanding balance of the Mortgage Loan and since then, the title deeds have always been in P’s possession.

11.  On the other hand, according to D, after he and his parents moved to Hong Kong until December 1988 when he left for United States for his graduate studies, he had been working full time, and that he had the financial means to buy the Property through his savings from work and financial investments.  Further, it was his intention all along to buy a permanent home and that after he left for United States, Madam Kwok was authorized by him to operate his bank accounts to pay for the instalments of the Mortgage Loan and to pay the rates and other utilities.

12.  It was not disputed that after completion of his studies in 1995, D obtained employment in United States and since then he has continued to work and reside in the States.  In 2004, D became a citizen of the United States.

13.  It was D’s case that since 1996, he had made various payments his parents and that he had provided most of the funds for the Property, if not all.

14.  It was not disputed that GSQ had also made payments to her parents.

15.  Anyway, according to the Land Registry record, the mortgage was formally discharged on 13 September 1997 (“Discharge”).

16.  It was further P’s evidence that after D’s son was born in 1999 and as the child had serious allergy and needed constant care, D had requested his parents to go to the United States to help look after their grandson.  Thus, in 2002, P retired so that he and Madam Kwok could travel to the United States to help D and that he had said they travelled back and forth 10 odd times.

17.  The Property was all along occupied by P and Madam Kwok until she passed away on 28 April 2012.  According to P, 58 days after Madam Kwok passed away, P brought Madam Kwok’s ashes with him and went to live with D in Pittsburg intending to settle there, but he said he was evicted by D on 25 June 2012 (“Incident”).

18.  D gave a different version of events, and that after Madam Kwok died, P and GSQ insisted on D buying a piece of land in Pittsburg to bury her and where P could also be buried in future.  It appeared that P went with D when D left Hong Kong to return to Pittsburg.  D complained P then started to burn incense in his house, and as his son had allergy and the house was centrally air conditioned, he told P to burn incense outside the house but P did not listen.  D then suggested that P went to stay in GSQ’s house in Texas until Madam Kwok’s burial date.  P refused.  D apparently tried to seek help from local authorities and D said he had even arranged for his family and son to stay in a hotel at US$190 a day. 

19.  Anyway, according to D, the police attended his house and was only trying to help the family in their dispute.  He said P was not evicted and P stayed in his house for about one month until after Madam Kwok’s ashes were buried before he left.

20.  P became emotional during the trial when he recounted the Incident.  Anyway, after P left D’s house, he went to stay with GSQ for awhile before returning to Hong Kong alone. He had not had any communications with D after leaving D’s house.

21.  When P left Hong Kong with Madam Kwok’s ashes to be buried in Pittsburg, it was clearly P’s intention to stay with D for a larger period of time and the Incident resulted in the breakdown of relationship between P and D.  No doubt the Incident, whatever the cause, would have greatly affected and upset P who was then about 75 years old.  It would appear that not long after his return to Hong Kong P went to apply for legal aid to commence the present action.  The letter before action was sent to D by P’s assigned solicitors on 29 January 2014. 

22.  Counsel Ms Susanna Leong appeared for P at the trial and Mr Sunny Chan appeared for D. 

23.  At the outset, Mr Chan informed this Court that D was prepared to agree to P having 50% interest in the Property but the matter in the end had to proceed to trial as this was not accepted by P.

The Law

24.  As the Property is held in joint names of the parties, the burden is on P to show that the beneficial ownership of the Property is different from the legal ownership or that there is a resulting trust in his favour[1].

25.  In many cases, where a property is gratuitously transferred, there is evidence that the transferor intended to make a gift, to make a loan or (much less likely) to abandon his interest in the property.  In all such cases, the law will give effect to that intention, and no question will arise of a resulting trust being imposed[2]. In Re Superfield Holdings Limited [2000] 2HKC 90 ,  the then Mr Recorder Kotewall SC summarised the law on resulting trust[3] and held , amongst other things, that the court would only resort to the presumption of resulting trust and advancement where there was no acceptable evidence of the actual intention of the providers of the purchase money as to the vesting and apportionment of the beneficial interest.

26.  In the recent case Prime Credit Ltd v Yeung Chung Pang Barry and anor CACV 246/2016 (21/7/2017), a mother had claimed to have interest in a HOS flat purchased in the names of her husband and her son as joint tenants, and after her husband’s death, her son became the sole owner. Lam VP had said, amongst other things, that it was ultimately a question of the intention of the mother (be it presumed or presumption rebutted) at the time when the property was acquired (under the resulting trust analysis) or the common intention of the parents and the son (under the constructive trust analysis), and between the two, at least in a domestic context if it was possible to resolve the matter by reference to common intention, there would be no need to resort to resulting trust[4]. 

27.  Lam VP went to say[5]:

“Since Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2010] 1 AC 776, as far as Hong Kong is concerned, the modern approach on constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context, see Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985. In a domestic context, particularly in relation to a matrimonial home, the court is not constrained in that exercise by pure direct monetary contributions to the purchase price, see the judgment of Baroness Hall at [69] in Stack. In a Chinese setting, especially for older generations, where explicit discussion on property rights within the family was not that common, the Court has to pay more regard to circumstantial matters”.

28.  There was no real dispute to the above general principles.

List of issues to be tried

29.  P’s pleaded case was all the down payment, mortgage instalments, legal and other expenses in connection with the purchase of the Property and also all rates, Government rents and utilities charges in connection with the occupation of the Property since the purchase were paid by P and D had made nil contribution, and therefore, P and D held the Property in trust for P absolutely.

30.  On the other hand, D’s pleaded case that it was the common intention between P and D that D would pay for the Property and hold the same with P as joint tenants, and that P did not have to contribute any money towards the purchase of the Property and that P is only a bare trustee for D[6].

31.  P’s case was one based on resulting trust and this was D’s case as well.  Put it simply, P said he paid it all and D said he paid it all.

32.  The list of issues agreed by the parties was as follows:

(1) Whether there was any common intention between P and D at the time of the purchase of the Property;

(2) If so, what was the common intention?

(3) Who paid for the purchase price, mortgage instalments, rates, Government rent and utility charges in connection with the Property :-

(i) Whether P pad for the purchase price, mortgage instalments and other expenses in relation to the occupation of the Property with the earnings and savings of P and Madam Kwok and contribution made by P’s daughter?

(ii) Whether D had made any contributions to P and/or his late mother (ie Madam Kwok) for the purchase and/or occupation of the Property?

(iii) In particular, whether accounts in Kwantgung Provincial Bank (Hong Kong) were the accounts of D or the accounts of Madem Kwok?

(4) Whether D has parted with possession of the Property within the meaning of Housing Ordinance.

The parties’ intention at time of purchase

The evidence

33.  At the time when P, Madam Kwok and D came to settle in Hong Kong in December 1979, D was about 17 years old.  GSQ did not join them.  GSQ had remained in Mainland China and later went to the United States.  She has never been a Hong Kong resident.

34.  As mentioned earlier, P found work shortly after he arrived and he was working in various factories.  P had produced employer’s returns for the Inland Revenue Department for the years ended 31 March 1984 – 31 March 1995 indicating that P was earning on average about HK$2,362 per month in 1984 and HK$3,300 per month in the financial year 1 April 1986 – 31 March1987.  P did not produce only returns between 1 April 1987 to 31 March 1989.  From 1 April 1989 to 31 March 1990, there was a jump in his salary to about HK6,218 a month.  In 1993/1994, P was earning about HK$8,000 per month which then dropped slightly to about HK$7,350 per month in 1995.  P said he retired in 2002 but did not produce any tax returns between 1 April 1995 and 2002.

35.  Madam Kwok commenced working in a hospital caring for patients shortly after arrival in Hong Kong, and P said later she was earning a daily wage of about HK$200.  In 1986, Madam Kwok ceased working after an eye surgery.

36.  D said he also started working a month after he came to Hong Kong with his parents and that he was working during the day and attending evening school from 7 pm to 10 pm.  He completed secondary school on 1 June 1982.  After graduation from secondary school, D attended the then Hong Kong Polytechnic College for two years and obtained a diploma in mechanical engineering in November 1984 and a further higher certificate in mechanical engineering in November 1986.

37.  D said he started working in a watch factory as a mechanical technician earning about HK$2,000 – HK$3,000 per month.  D produced a letter of reference from the watch factory certifying he worked there from 20 September 1984 to 31 March 1985.  He joined Cathay Pacific Airways Limited on 1 April 1985 initially as a technical trainee.  D had produced letters from Cathay Pacific indicating he was promoted with a salary of HK$3,476 per month as from 1 January 1986 and thereafter, he received a salary increase at end of each year and when he left Cathay Pacific to go to United States, his then salary was HK$4,843 per month.  D left for the United States on about 12 December 1988.

38.  As mentioned earlier, P did not accept the initial allocation of a unit in Tin Shiu Wai.  According to P, he and Madam Kwok decided to apply for a unit under the Home Ownership Scheme (HOS), as they had enough savings to pay for the down payment.  Further according to P by then, their daughter GSQ was in the United States and she had income.  She was about to complete her master degree and was willing to help her parents financially.  P thus said he was not concerned over finances.

39.  P said as he had to work long hours, he asked D to help applying, and he had left it to D to handle all the procedures.

40.  As further mentioned earlier, P’s case was that initially he did not realise that D had made the application in the joint names of the two of them, until the time came when they had to select the unit or at the time of signing the SPA.  P said although by then he had been in Hong Kong for 8 years, but had no experience or knowledge in buying properties, and that there was never any discussion between him, his wife and D in relation to giving D any interest.  Further, after D took care of the procedures until about 12 December 1988 when he left Hong Kong for United States for further studies, D had never asked whether he held one half of the interest in the Property. 

41.  P’s evidence was that he never, whether in writing or orally, promised to gift to D one half of the interest in the Property. The purpose of buying a HOS unit was for him and his wife to live in, and all down payments and mortgage instalments were paid by him and his wife and the ownership should follow, namely he and his wife should jointly own the Property. 

42.  P reiterated that D knew very clearly that he should not have any interest in the Property.

43.  As for D’s evidence, he said as his family did not own a permanent home in Hong Kong he decided to improve the family condition by purchasing a family home so that they could have a stable place to live.  According to D, he discussed with his mother and P, and because the property price in 1988 was not high and the HOS provided comprehensive financial assistance to home buyers, he could afford to fund a HOS flat and did fund for the purchase of the Property.

44.  D maintained that it was the common intention between P and him that the Property be held under a joint tenancy.  The intention behind was that the Property was to be used as a family home and that he wanted his parents to feel secure and thus P was nominated by him as a co-owner of the Property. 

45.  It was also D’s case that P could not afford to pay for the purchase at the time.  He said P was working for Hsin Chong Real Estate Management Limited as a security guard from 1995 to 2002.  He retired at about age of 64 and that given P’s minimal monthly income and poor financial condition, he could not possibly have sufficient funds to purchase the Property.

46.  D said in his witness statement that he applied to the Housing Authority in July 1987 and that he selected the Property with his parents, and applied for the mortgage from Standard Chartered Bank with P. He said he had intended to nominate his mother as a co-owner of the Property but she gave up the opportunity, and he therefore nominated P as a joint tenant instead.

47.  D had produced copies of the following 4 documents which he had obtained from the Housing Authority (collectively “HA Documents”) :-

(i) Application Form dated 2 July 1987 signed by D as applicant  (“Application Form”)[7];

(ii) Flat Selection Statement dated 24 September 1987 signed by D as applicant (“Flat Selection Statement”)[8] ;

(iii) A letter dated 24 September 1987 from the Housing Authority in relation to, amongst other things, notifying D and another of the name of the solicitors for execution of the legal documents and D and another had signed on a copy of this letter signifying their receipt of the original of this letter (“HA Letter”)[9];

(iv) A Nomination Fee Receipt dated 24 September 1987 issued to D and another by the Hong Kong Housing Authority (“Nomination Fee Receipt”)[10].

48.  There were parts on the HA Documents indicating name of another person which were blocked out, and D had explained, this was done by the Housing Department for privacy reasons when providing copies of the HA Documents to him, and that the blocked out parts contained either P’s signature and/or P’s name.

49.  P had also produced various documents in relation to the purchase of the Property, among which was a copy of the complete unredacted HA letter which indicated that the parts blocked out contained P’s name and/or signature[11]. Although when shown the HA Documents with the blocked out parts, P became somewhat confused, I am satisfied that the blocked out parts on the HA Documents contained either P’s name or his signature.

50.  In short, P’s evidence was that he did not realise that the HOS flat was applied for in the joint names of P and D and/or in D’s sole name and that he had only asked D to help in handling the procedures.

51.  The Application Form showed that it was D who was the applicant for the HOS unit.  When P was shown the Application Form, P had responded by saying that this should be the form that D helped him to fill in. P said he did not know why D had signed the form as applicant.  P further said he had obtained an application form and that P made the application and the form was collected by the Housing Authority and that P was then given a number.

52.  When P was shown the Flat Selection Form on which D signed as applicant, P’s response was that D was not qualified to apply for a HOS unit.  When it was suggested by Mr Chan that P had seen the document in September 1987, P said he could not remember as it happened several decades ago.  When it was suggested to P that the blocked out parts were his name and his signature and that he had signed on the Flat Selection Form as the person who was nominated by D to be a joint-tenant, P said he could not see his signature thereon.

53.  Anyway, it was not really disputed that all three of them, namely P, Madam Kwok and D went to select the flat and the Property was then selected.

54.  When it was put to P that he knew in 1987 that he was to co-own the Property with D, P’s answer was it was unclear to him.  When P was asked whether it was his intention in 1987 to (i) co-own the Property with D or (ii) to own the Property solely by himself, P said it was unfair for him to choose an answer and when this Court explained to P that he had to answer, P then said he could not remember.  However, when it was suggested to him that it was his intention to co-own with D, P maintained that this was not his intention.

55.  P had further said that the mere fact that two names, namely his and D’s appeared side by side on the documents did not mean co-ownership and that D was not qualified to purchase the HOS flat.

56.  From the Land Registry record, there were the following documents executed:

(i) The SPA executed on 2 November 1987;

(ii) The assignment executed on 16 November 1988 at a consideration of HK$252,500 (“Assignment”);

(iii) Legal Charge to Standard Chartered Bank executed on 16 November 1988 for the Mortgage Loan of HK$239,875 (“Legal Charge”);

(iv) Receipt of the Discharge executed on 13 September 1997.

57.  When cross examined about the Assignment, P denied that the contents were interpreted to him and that he could not read English, and merely signed the document.  He said no one had told him that the mere fact he signed meant that he co-owned the Property with D.

58.  When asked about the payment of the nomination fee of HK$12,625 (“Nomination Fee”), P said it was not clear to him and that the first time he had heard of it.  When shown a copy of the Housing Authority’s Nomination Fee Receipt, P said it was the first time he saw that document.

59.  During re-examination, as mentioned earlier, P became emotional over the Incident, and further said it was not a matter whether D owned it or not and that co-owning had no meaning and that after he died, his son could inherit the Property.  He said he had no one to rely on and he did not have any income or money to pay for ongoing rates, government rents and utilities.  He said he did not want to sell the Property, and only wanted to apply for a reverse mortgage and to live on the money advanced.  He had also said he was not able to do so as the Property was held in joint names.  His legal representatives later produced a copy of the “Reverse Mortgage Information Pack” from the Hong Kong Mortgage Corporation Limited and it would appear therefrom that an applicant’s eligibility to apply may not be affected by a residential property being held in joint names[12].  Anyway P confirmed that he had not in fact made any application for the reverse mortgage.

60.  On the other hand, D’s evidence was that he was the applicant who applied for the HOS flat.  He knew it was an application by “green form”, which meant that if successful in his application, his family would have to move out of the then unit at Kai Cheung Estate they were living in and thus, he had to obtain the signature of the “registered household tenant” of the Kai Cheung Estate unit and although initially he claimed he did not know who was the “registered household tenant”, he did not in the end dispute that it was P. 

61.  D said during the trial that he made the application on his own with the “green form”, and that it was only after he won the ballot, then Housing Authority required him to nominate one more family member as joint-tenant, and he had wanted to nominate his mother Madam Kwok, but she gave up this opportunity.  He therefore nominated his father, ie P, instead.

62.  D’s evidence was that there had been quite a lot of discussion at the time between his parents and him.  He said the family was very poor when they moved to Hong Kong.  In early 1980s, they were living in a shed near the mountainside with no electricity, no water, and no toilet and that he had always said one day he would buy a flat.

63.  He said the flat was intended to be occupied by, his parents and him as well.  In the beginning he only intended to go to the United States to receive his education and that one day he would return to Hong Kong.  He said after he got his PhD he had tried to find a job in Hong Kong in 1995 but was not able to find one.  Later he found his current job with Ansys Inc where he has worked until now.

64.  D explained that when the Housing Authority telephoned to ask the successful applicants to attend selection of flat, he had to produce monthly income details of his family.  Also the Housing Authority had asked the applicants to bring a cheque at the time of selection, and since he was the only one who had a checking account at the time, he brought his cheque. 

65.  D disagreed that P had only asked him to handle all paper work. 

66.  D had said that P had no income from 1987 to 1990 as P did not produce any employers tax returns during that period, but he later accepted that not producing or having any tax returns would not necessarily mean that P was out of a job from 1987 to 1990. 

Analysis

67.  First of all, the issue as agreed by the parties is whether there was any common intention at the time of the purchase of the Property, and if so, what was their intention.

68.  As the Application Form was dated 2 July 1987, the decision to apply and purchase a flat under HOS would have to be made prior thereto. The purchase price of the Property was HK$252,500 and the time of completion was 16 November 1988.

69.  Less than a month later, D left Hong Kong on about 12 December 1988.  He said he only made a decision to go to United States in early 1988.

70.  In 1986 Madam Kwok was said to be receiving a daily wage of HK$200 before she stopped work in 1986, but it was not clear how many days in a month she was working. 

71.  From 1 April 1986 to 31 March 1987, according to P’s tax returns, he was earning about HK$3,300 per month.

72.  According to those letters from Cathay Pacific, D was earning about HK$3,700 per month in 1987.

73.  As mentioned earlier, there was a gap of 2 financial years from 1 April 1987 to 31 March 1989 for which P did not produce any tax returns.  On the Application Form, D’s monthly income was stated to be HK$3,700 and the total monthly household income was stated to be HK$6,500, which meant P was earning about HK$2,800 per month at the time, namely around July 1987.

74.  Assuming that the monthly income of P and Madam Kwok were more or less the same since they arrived in Hong Kong, this would mean the combined monthly income of P and Madam Kwok before she stopped working in 1986 would be around $5,000 to $6,000 a month. 

75.  During the trial, P himself said he had about HK$50,000 savings at the time of the application.  GSQ had said during the trial that P had told her in a letter that he had about US19,000 savings but she had never seen his bank account.  It was not clear what letter she was referring to, and this part of her evidence was not in her witness statement.

76.  The evidence indicated that P and Madam Kwok were very frugal and based on their respective income, I find it probable that between the 7 years, namely 1980 – 1986, P and Madam Kwok would have savings that, notwithstanding paying GSQ US$4,200 in 1986, by 1987 they could still have some HK$50,000, and could afford to pay for 5% of the purchase price and related expenses for the purchase of the Property.

77.  It was P’s case that although D was also working he did not contribute a cent towards the family expenses and only used his own income for his own expenses and entertainment.

78.  D did not seem to have contradicted this in his witness statement, and only said that by 1986/1987, he had the financial means to buy the Property through his own savings and financial investments as he had also invested in Cathay shares and foreign currencies.  D had also said that when he went to the United States, he took US$6,000 of his savings with him, and that P did not give that sum to him.  All in all, as seen later, D’s case was that he had savings of some HK$300,000 in 1988, which was disputed by P, and I will consider this later in this judgment.

79.  Suffice to say, at this stage, in light of his earnings after D joined Cathay Pacific, I am prepared to accept that at the time D would also be able to pay for 5% of the purchase price and related expenses for the purchase of the Property out of his own savings.

80.  Having said this, I find the loss of Madam Kwok’s income in 1986 would have a significant on the household income.  P himself had admitted there would be strain in him meeting the monthly mortgage instalments.  He had said that as GSQ was working in the United States and was about to complete her master degree and that she was willing to help, he was not worried over his ability to buy a property.

81.  GSQ’s own evidence was that P and Madam Kwok gave her US$4,200 when she went to United States in 1986 and that she only completed her master of science degree in chemistry in 1989.  Although she did receive a stipend of US$500 per month as a teaching assistant, it was only in 1990 that she got a proper job at a pharmaceutical company in New York.

82.  GSQ never lived in Hong Kong and her evidence on the purchase of the Property was all hearsay, from what she had heard from her mother and also D at the time.   

83.  GSQ said she had regular conversations with her mother and was told that as the registered household tenant of the Kai Cheung Estate unit, P was entitled to apply for a HOS flat and that he intended to do so. She had said in her witness statement that all along it was her understanding that the Property was purchased by P under his sole name and at no time did any one tell her at the time that the Property belonged to P and D jointly.

84.  She said about a year after D arrived in the States, he had called her for help.  At the time, she was planning to send US$8,000 to US$10,000 to her parents but was told by D to withhold sending the money since she was in the course of applying for her own husband, Shi Chihua (“Shi”), who was still in Mainland China, to go to the United States and she might have to produce financial proof to the US Immigration Department.

85.  GSQ also said D had told her at the time that he had given about HK$60,000 to their parents prior to his leaving Hong Kong, ie about US$7,700, but out of which US$6,000 was then given back to D by a cashier order when he left for the United States.  At the trial, GSQ also said Madam Kwok had borrowed about HK$300,000 from friends for purpose of financial proof when D was completing the I-20 Form to go to the United States. 

86.  As there were no tax returns produced by P for the two year period 1 April 1987 – 31 March 1989, it was not quite clear what his job was during that period.  As mentioned earlier, from the Application Form, P’s monthly income around July 1987 would only be about HK$2,800. 

87.  Although P said he was working long hours, D was at that time also working in the day time and studying in the evenings.

88.  Even if P was working long hours and that he asked D to help or that the Application Form was prepared by D, P did himself sign the Application Form and the Application Form was clearly signed by D as applicant and P had only signed thereon as the registered household tenant of the then unit at Kai Cheung Estate.  The Application Form was in Chinese and it was not P’s case that he could not read Chinese.  He was about 49 years old at that time.  I find there was no sufficient evidence that at the time P was not aware of D being the applicant.  Further, as he had signed on the Flat Selection Statement, I find P must have been aware that he and D were to be joint owners for the HOS flat.

89.  P had said in his witness statement that he bought the HOS flat to live in, and therefore he and Madam Kwok would naturally be responsible for the down payment and the mortgage instalments and that naturally the ownership would be P’s and Madam Kwok’s, ie “業權順理成章由我和妻子擁有”.  Anyway, his evidence was that at the time of signing the SPA, he did not realise nor did he consider there being a need to cancel D’s name or to make a fresh application in his own name or jointly with Madam Kwok.  

90.  From all accounts, the family had a good and close relationship during 1986 to 1988.  P’s evidence that he turned down a public housing unit at Tin Shui Wai and that he wanted to purchase a flat under HOS was not really challenged.  Even though they were working and/or studying long hours, the decision to apply for a HOS flat instead of accepting a public housing unit at Tin Shui Wai when allocated to them was a major decision for the family since this would mean a further delay in them having a new home, and in my view, there must have been discussions among the three family members at the time for the purchase of a HOS flat.  They were all working and saving hard and no doubt it was their intention to own a home of their own.

91.  D said at the time when the Application Form was submitted, he had not yet decided whether to go to the United States even though   GSQ’s evidence was that she was already helping D to make applications to universities in the United States in 1987.  D said during the trial that he had 3 options at the time, (i) remaining working and studying in Hong Kong; (ii) going to United Kingdom for further studies; and (iii) going to USA for further studies.  He was only asking GSQ to help obtaining information from the US universities, and it was only when his mother went to Wong Tai Sin temple to ask and the answer was USA that he decided to go there, and this was around early 1988.  D had also said he only took the TOEFL and GRE examinations in February 1988 and he applied to the US universities after February 1988.  

92.  Having considered D’s evidence, I accept what he said in this respect and find there was no sufficient evidence that D had formed the intention of leaving for United States at the time of the submission of the Application Form in July 1987.  

93.  It was also D’s evidence that it was not his intention not to return when he left Hong Kong in December 1988.  His evidence was he tried to find a job in Hong Kong after obtaining his PhD in 1995 but was not able to and eventually, he found a job with his present employer Ansys Inc. Thus, according to D, all along, it was his intention to buy a flat in Hong Kong, where not only his parents, but also where he could live.  However, he himself said he had obtained a “green card” in US after the 1989 Tian An Men incident and although he claimed he had tried to look for a job in Hong Kong after graduation, this could not have been for a long time as he had started working in Ansys Inc in September 1995 already, the same year he graduated.

94.  The actual amounts paid at the time of purchase in 1988 were (i) 5% of the purchase price of HK$252,500, namely HK$12,625, being the Nomination Fee; (ii) HK$1,830 for the legal costs for preparation of the SPA (“SPA Costs”); (iii) HK$12,978.60 for legal fees at the time of completion for preparation of the Assignment and other fees such as stamp duty and disbursements (“Completion Costs”), and (iv) HK$1,254.55 for deposits for management fees and utilities and miscellaneous expenses (“Utilities Deposits”).  The payments for these 4 items (collectively “Purchase Costs”) at the time of the completion were a total of about HK$28,688.15.  As said earlier, the balance of the purchase price of HK$239,875 was paid by way of the Mortgage Loan. 

95.  According to P, initially, the monthly mortgage repayments would be HK$2,300 per month and that the rates were HK$555 per quarter, or HK$140 per month.  There were also government rents, utilities and management fees (“Ongoing Expenses”).

96.  To summarise, the Application Form was dated 2 July 1987, and at the time:

(i) Both P and D had said it was their respective intention to purchase a HOS flat to live in;

(ii) Madam Kwok had stopped working in 1986;

(iii) In 1986, P and Madam Kwok had given US$4,200 to GSQ for her to go to United States for education;

(iv) In July 1987, it would appear on the Application Form that P’s income was only HK$2,800 per month;

(v) D’s salary at Cathay Pacific had been increased to HK$3,740 per month since January 1987;

(vi) There was no sufficient evidence that D had formed an intention to go to USA in July 1987;

(vii) GSQ had only just left for the United States a year ago, and she did not get a proper job until 1990.

97.  In light of the above, D having a steady job with good prospects must have been in the mind of his parents.  However, although P himself had admitted that it would cause a financial strain on him in light of the amount of the mortgage instalments and Ongoing Expenses, there was no sufficient evidence that it was the parties’ common intention at the time of the application that D was to solely pay for the purchase price including mortgage instalments and Ongoing Expenses.

98.  As said earlier, D’s case was that it was the Housing Authority which required him to add one more family member in the Application Form.  There was no sufficient evidence as to why the Housing Authority would require this, or if so, whether this was because P was the registered household tenant, and P had to surrender the Kai Cheung Estate unit upon a HOS flat being purchased.   

99.  Having considered the then circumstances and the parties’ respective evidence, it is my view that more probable than not, that the intention at the time of lodging the Application Form was that P and D would jointly own the HOS flat which was to be their home, and that both P and D would jointly contribute towards the purchase price, including the mortgage instalments and Ongoing Expenses.  I do not find there was any common intention that P was to be a bare trustee for D as alleged by D. 

100.  However, by the time of completion, D must have by then formed the intention of leaving for the United States.  Whether he was intending to return or not, there would be uncertainty as to whether, and when, if ever, he would return.  Further, D would need to support himself and it would also be uncertain as to whether, or when, if ever, he would send money to his parents from the United States.  It was not really disputed that D took US$6,000 with him when he left.  

101.  Having considered the then change of circumstances, I am of the view that the intention of P at the time of the completion must have been that he would be solely responsible for all the mortgage instalments and Ongoing Expenses of the Property, and that the Property was to be his home with Madam Kwok.  There was no suggestion on D’s part that there was any intention of a gift or advancement of any beneficial interest in the Property from P to D and throughout D maintained he had sole beneficial interest because he was responsible for all the payments and that P was a bare trustee.  Anyway, P clearly said there was no intention on his part at the time of any gift or advancement to D of any beneficial interest or share in the Property and I accept his evidence in this respect.  

102.  Thus, in light of the then circumstances, I find that notwithstanding that P and D were to continue to hold the Property as joint tenants, P’s intention at completion was that as he was to be solely responsible for the mortgage instalments and Ongoing Expenses and, as he had said, the Property should be held in trust for him (and Madam Kwok).  I find that it was not P’s intention, nor was there any common intention between the parties for P to hold the Property as a bare trustee for D.

Payments

103.  It was D’s case that the Purchase Costs were paid by him, as follows:

(i) The Nomination Fee was paid to the Housing Authority by cheque;

(ii) The SPA Costs were paid by cash;

(iii) The Completion Costs were paid by a cheque drawn on Standard Chartered Bank;

(iv) The Utilities Deposits were paid by cash.

104.  Further, according to D, the monthly instalments of the Mortgage Loan were paid by him with monies from Kwangtung Provincial Bank account/s held in his name (“KPB Accounts”), and (2) by cheques to P or Madam Kwok.

105.  As for the Ongoing Expenses after the date of completion until the date of his witness statement, according to D, these were paid by monies advanced to P by D to settle on his behalf with monies from the KPB Accounts and by cheques to P or Madam Kwok (before her death). 

The Purchase Costs

106.  P’s case was that all the Purchase Costs, the Ongoing Expenses and also the mortgage instalments were paid by him.  When P was asked about the payment of the Nomination Fee, P said he was not clear about this and appeared to say that he saw the Nomination Fee Receipt for the first time when it was shown to him at the trial.  P had also said that a 5% down payment or about HK$20,000 plus was paid by bank transfer from a joint account at HSBC held jointly by him and Madam Kwok (“HSBC Joint Account”) to the Standard Chartered Bank.

107.  On the other hand, D was also not able to provide any direct evidence that he had paid for the Purchase Costs due to the effluxion of time.   He did maintain during the trial that at the time he was the only one who had a checking account and he said the cheque for the Nomination Fee was probably issued from his Standard Chartered Bank checking account.  He said he had an account at another bank but unable to recall which bank. Nor was he able to recall where his “salary” account was.  It was his evidence that the KPB Accounts were held in his name. 

108.  The Nomination Fee was clearly paid by a cheque but the name of the bank was illegible.  From the receipt issued by the solicitors, the Completion Costs were also clearly paid by a cheque from “STDC”, presumably Standard Chartered Bank.  In fact, none of the Purchase Costs were paid by bank transfers.

109.  Being about 80 at the time of the trial, P’s recollection was understandably faded and he was somewhat confused when asked about the Nomination Fee.  In any event, there was no sufficient evidence that P had a checking account at the time. 

110.  P had produced a receipt dated 17 November 1988 for the deposit of HK$200 for the supply of Shellgas and a deposit advice of HK$400 for electricity meter due on 27 February 1989[13].  These were issued to P’s sole name.  These were however separate items from the Utilities Deposits which were part of the Purchase Costs payable to the solicitors on the day of the completion.

111.  Having considered all the evidence, I am prepared to accept D’s evidence in this respect and find it more probable than not that he did pay for the Purchase Costs.

The KPB Accounts

112.  It was D’s evidence that the KPB Accounts were held in his name[14]. D had produced two letters from the bank dated respectively 11 August 1988 and 4 October 1988.  The bank stated that the letters were issued at the request of D, the son of Madam Kwok, who was going to further his studies in the United States.  The 1^st letter confirmed that Madam Kwok at the date of the letter maintained a fixed deposit account with a credit balance of low five figures in pound sterling up to 5 September 1988, and the 2^nd letter confirmed that Madam Kwok maintained a savings account/fixed deposit account/current account with a credit balance of low six figures equivalent in Hong Kong dollars on 4 October 1988.

113.  The lowest five figure would be 10,000 and the lowest six figure would be 100,000.  There was no evidence as to the exchange rate of HKD to Sterling in 1988.  It was not in fact clear whether the 2 letters referred to the same amount, in different currencies, or 2 separate amounts.

114.  Ms Leong had assumed two separate amounts, the total of which would be about HK$240,000, in her cross examination of D and this also appeared to be D’s own case.

115.  D’s evidence was that it was he who had authorized Madam Kwok to maintain those sums respectively in August and October 1988 in the KPB Accounts and that with his authorization, Madam Kwok could freely withdraw monies from his KPB Accounts to repay the mortgage instalments and to pay the Ongoing Expenses.  Further, in December 1988, when he left, his December income as well as the 1988 year end bonus from Cathay Pacific, which was more than HK$10,000 was automatically deposited into his bank account after he left for the United States.

116.  Ms Leong had put to D that Madam Kwok was the holder of the KPB Accounts, which appeared to be both fixed deposit accounts[15].  D strongly disputed that Madam Kwok was the holder of the accounts and claimed that he had gone with Madam Kwok to the bank at the time and it was he who authorized Madam Kwok to maintain the accounts on his behalf.

117.  Unfortunately, as this was almost 30 years ago, the bank had not kept any other records reflecting the name of the account holder.  D said that the monies in the KPB Accounts were maintained solely for the purpose of paying the mortgage instalments and Ongoing Expenses.

118.  It was D’s evidence that he went to KPB with a cheque and deposited the cheque as fixed deposit in foreign currency as it would earn a high interest rate.  When asked the source of the funds for the cheque, D said he could not remember.  When asked whether and when he had closed his bank accounts in Hong Kong, D then said he must have added his mother’s name to his accounts, and that his salary account was probably closed by Madam Kwok after the December 1988 salary and year end bonus from Cathay Pacific had been credited.  He also said he must have also closed his Standard Chartered Bank account at some time, but he could not remember when. 

119.  When asked which bank accounts he thought he had added his mother’s name, he again said he could not remember. 

120.  The two letters from KPB were ambiguously drafted.  Although a bank would not normally issue any letter at the request of someone who is not the account holder, on my reading of the two letters in relation to the KPB Accounts, the letters were clearly financial proof for D’s application to study in the US, and in my view the two letters also clearly referred to Madam Kwok as the person who maintained the accounts. 

121.  Further, D could not simply “authorize” Madam Kwok to maintain accounts, without any proper power of attorney, or without adding Madam Kwok as a signatory, if those accounts were indeed held in D’s name. The two letters were clearly not instructions from D to the bank to “authorize” Madam Kwok to maintain his accounts.

122.  There was no sufficient evidence that D had added Madam Kwok’s name to the KPB Accounts, and this was not D’s evidence in his witness statement either.

123.  As mentioned earlier, during the trial, GSQ had said that Madam Kwok had to borrow from friends HK$300,000 as financial proof for D when D was completing the I-20 Form for the US authorities.  This was not mentioned in GSQ’s witness statement. 

124.  It was however put to D by Ms Leong that Madam Kwok had borrowed money from an “aunty” to put into the KPB Accounts, and that was why the money in those accounts could not be used for the payment of the purchase of the Property.  D disagreed.  

125.  Anyway, in my view, if those KPB Accounts were indeed held in D’s personal name, then all D needed to do would be to show the bank statements of the KPB Accounts to the US authorities for financial proof in support of his own application to study in the US.  There would be no need for KPB having to issue those two letters. 

126.  Having considered the contents of those letters, it is my finding that the KPB Accounts were held in Madam Kwok’s name. 

127.  As to the source of the funds in the KPB Accounts, D’s case was that Madam Kwok had already stopped working in 1986 and that she could not have those funds.

128.  As mentioned earlier, during the trial, GSQ said that at the time of the purchase of the Property, P had in a letter told her that he had about US$19,000 of savings but she confirmed that P never showed her his bank accounts.  GSQ further said that at about the time when her family bought the Property, D had told her that he had given HK$60,000 to his parents, or about US$7,700, but according to GSQ US$6,000 was then given back to D for him to bring to the United States and that in the end the HK$60,000 D gave to his parents was used by D himself and not on the Property.

129.  What was not disputed was that D did bring with him US$6,000, or about HK$ 46,800, with him when he went to the United States. As he also claimed that he was the holder of the KPB Accounts, and that he had paid for the Purchase Costs of about HK$28,688.15, this would mean on his case, he had savings of some HK$315,488 (HK$240,000 + about HK$46,800 + about HK$28,688), or about HK$300,000 at about the time around completion.

130.  Under cross examination, D claimed that he had already managed to save about HK$50,000 to HK$60,000 during 1980-1982 as he was very frugal.  He had said the US$6,000 came from another of his bank account and that at the time he had a checking account with Standard Chartered Bank and also had a savings account with another bank which he could not recall.

131.  D said that he had also made some money from investing in foreign currencies, and from subscribing for the Cathay Pacific shares when the company was publicly listed in 1986 and he made profits of about HK$40,000.

132.  It was P’s case that it was Madam Kwok who gave D HK$3,000 to buy the shares and that it was not possible for D to have made HK$40,000. D had however denied this.

133.  As all this happened almost 30 years ago, neither was able to produce any documentary evidence as to their respective savings at the time.  The only concrete evidence of D’s income was after he joined Cathay Pacific in April 1985. 

134.  At the time of the application, as earlier mentioned, the total monthly household income was then HK$6,500 per month.  One would have thought there would be income and asset ceilings under the HOS, and as I have earlier found, P’s savings were about HK$50,000, and if D’s savings were some HK$300,000, the total assets of the household in 1987 would be around HK$350,000. I doubt that with such assets, they would be eligible for a HOS flat with the “green form” at that time.

135.  In any event, in my view, D had exaggerated and over-stated his savings.  If he indeed had about HK$300,000 savings at the time, he would not have needed any mortgage at all, let alone a 95% mortgage, which apparently carried a very high interest rate of 10% at the time.  Further, there was no challenge by D that P had made early repayment of HK$50,000 in 1989 towards the Mortgage Loan.  If D’s case were to be believed, and that he had authorized Madam Kwok to maintain his fixed deposits of some HK$240,000, part of such sum could have been utilized towards the early repayment of the entire outstanding Mortgage Loan in 1989.

136.  Having considered the evidence, I am not satisfied that the monies in the KPB Accounts came from D’s savings, and in my view, more probable than not, that Madam Kwok had borrowed amounts to be placed in her accounts as financial proof to help D in his application to study in the United States.

137.  In fact, when D left and as he would be in the United States for some time, in my view, more probable than not, he would have taken most of his savings with him, as GSQ had said.

From November 1988 to Discharge

138.  It was not disputed that the monthly instalments of the Mortgage Loan were paid from the mortgage loan account at the Standard Chartered Bank (“Loan Account”).

139.  P’s evidence was that there were automatic transfers from the HSBC Joint Account to the Loan Account for the payment of the monthly instalments.

140.  As said earlier, it was P’s evidence in his witness statement that prior to 1989, he had made an early repayment of HK$50,000 towards the Mortgage Loan, and that thereafter, he said he had also made several repayments, thereby reducing the monthly instalment of HK$2,300 gradually to HK$300.

141.  According to P, the Mortgage Loan was completely paid off in 1996.  According to the Land Registry record, the Discharge was dated 13 September 1997.  It was not disputed that all the title deeds of the Property had been returned to P and kept in his possession. 

142.  D’s evidence was that when he was pursuing his Master and PhD degrees from 1989 to 1995 he got financial support from University of South Florida and Purdue University by working as teaching and/or research assistant, and that such support covered his daily living expenses and further his tuition fees were waived.  As said earlier, after he completed his PhD degree in 1995, he started working for Ansys Inc on 25 September 1995.

143.  D had produced a notice of graduate student appointment as a research assistance at Purdue University dated 26 August 1992 indicating his appointment at a monthly rate of USD815 from 1 July 1992 to 30 June 1993.  D had also produced his US tax statements (Forms W-2) indicating his income to be as follows:

(i) 1989 USD3,005.19 (State of Florida)

(ii) 1990 USD5,999.97 (State of Florida)

(iii) 1991 USD2,677.30 (Purdue University)

(iv) 1992 USD9,500 (Purdue University)

(v) 1993 USD9,932.90 (Purdue University)

(vi) 1994 USD10,244.06 (Purdue University)

(vii) 1995 USD8,722.58 (Purdue University) + USD14,635.96 (Ansys Inc)

144.  However, D only produced the tax statements of his income and did not produce his Individual US Income Tax Returns.  Thus, it was not clear whether he had disclosed his interest in the Property to IRS in the United States.

145.  D had produced copies of cheques issued from his bank account/s in United States in favour of P as evidence of his payments to P, but the earliest of these cheques was dated 11 January 2001 and the last one that was cashed by P was one dated 12 February 2012.  There was then a gap, and finally D sent a cheque to P dated 22 July 2013[16], but it was sent to the Property and P at that time was staying with GSQ in the United States.  Anyway P did not cash that cheque.

146.  It was D’s case that he had been making periodic payments to P and Madam Kwok for the purpose of the instalments for the Mortgage Loan and Ongoing Expenses, and that since 1996, he had sent cheques totaling more than HK$400,000, but because he trusted his parents he did not keep copies of all his cheques and banks were only required to keep records for 7 to 10 years, and therefore he was not able to recover copies of all the cheques.

147.  Further it was D’s evidence that when P and Madam Kwok flew to Pittsburg in 1996 to see him, he gave them US$5,000.

148.  GSQ’s evidence was that although D brought with him US$6,000 when he went to University of South Florida in 1988, one year later, he had telephoned her for help.  GSQ said she told Madam Kwok about this, who said if GSQ could help D, then P could focus on paying the monthly instalments for the Mortgage Loan.  GSQ said she had sent a cheque of US$7,200 to D, which was originally meant to be sent to P to help P and Madam Kwok with the monthly instalments.  GSQ said she sent D another cheque for US$2,000 in the summer of 1990 so D could go back to Hong Kong to see Madam Kwok, who had to undergo a surgery.  It was also her evidence that after she got a job in New York City in 1990, she had given D an additional US$7,300 from 1990 to 1996, and that she had also lent him the use of her car.

149.  It was also GSQ’s evidence that Madam Kwok had provided a USD savings account number with Standard Chartered Bank in Hong Kong for GSQ to directly transfer USD to Madam Kwok.  GSQ said she had also been helping her father financially by sending P around US$10,000 from 1992 to 1997, but she did not specify the purpose of her payments.  According to GSQ, it was always her understanding that the Property was purchased by P under his name alone. 

150.  Anyway, GSQ’s evidence was that in all those years up to at least 1996 D had no financial means to contribute towards payments for the Property.  GSQ had produced bundles of cheques issued in favour of D by her husband Shi from 24 December 1990 to 3 April 1996[17].

151.  GSQ also produced copies of 4 cheques issued by Shi in favour of Madam Kwok, dated respectively (i) 5 October 1996 for US$6,000; (ii) 2 January 1997 for US$600; (iii) 16 June 1997 for US$300; and (iv) 4 January 1999 for US$2,000[18].

152.  Shi had also transferred sums directly to Madam Kwok’s USD account at Standard Chartered Bank as follows (some dates illegible)[19]:

(i) 3 January 1992 US$500

(ii) 9 July 1994 US$300

(iii) 17 October 1994 (?) US$500

(iv) 1 November 1994 US$300

(v) 29 December 1994 US$600

(vi) (? ) 1995 US$800

153.  D denied receiving US$7,200 from GSQ and/or a sum of US$2,000 from GSQ in 1989/1990.  He said GSQ had just found a job and could not return to Hong Kong when Madam Kwok was unwell, and so she paid about US$1,500 for a ticket for D to return, and that he came back to Hong Kong in 1991, and that the amount of US$2,000 was not for his support or his studies.  Anyway, it would appear D could not even afford to pay for his own ticket to see his mother.  D also admitted borrowing several times from GSQ between December 1990 to 1992 but claimed he had paid GSQ back.

154.  As for the US$2,000 GSQ paid him on 3 April 1996, D said by then he had already graduated and that the US$2,000 was GSQ repaying for a loan from him.  His evidence for the US$1,000 from GSQ on 6 December 1993 appeared to be also repayment of a loan. 

155.  GSQ was not cross examined on D’s evidence above in relation to the alleged repayment of loans to her, nor was what D said put to GSQ when she was giving evidence.  D did not produce any supporting evidence of his repayments or that any sum GSQ paid him was a repayment of a loan from him.

156.  GSQ’s own evidence was that she had found a job in 1990 in a pharmaceutical company in New York city and since then she had been lending D various sums to help him.  In my view, there was no sufficient evidence as to why she would want to borrow any sums from D. 

157.  Anyway, I find GSQ a reliable witness.  Having considered GSQ’s evidence, and D’s own income from 1988 to 1995, I accept GSQ’s evidence in relation to her payments to D and also to Madam Kwok.

158.  It was never D’s pleaded case that he had paid US$5,000 to his parents while they were in Pittsburg in 1996, nor was this in his witness statement.  In fact, according to his witness statement, the mortgage instalments were paid by monies from the KPB Accounts and also by cheques to P or Madam Kwok.  There was no mention of any payment of US$5,000 in cash to his parents in Pittsburg.  P was not cross examined on this, nor was this put to P when he was giving evidence.  It was also not quite clear when P and Madam Kwok went to Pittsburg in 1996.

159.  GSQ was not asked whether she knew about D’s payment of US$5,000 to his parents in Pittsburg in 1996 even though it was D’s evidence that GSQ also went to Pittsburg when their parents were there.

160.  D started working for Ansys Inc on 25 September 1995.  His gross pay in 1995 from Ansys Inc was US$14,635.96 and net of withheld taxes was US$11,442.20.  He also received US$8,722.58 gross income in 1995 or USD7,712.29 net of withheld taxes from Purdue University.  On his own evidence, he did not send any money from USA to his parents from 1989 to 1995. 

161.  In fact, D got married in about 1992 before he completed his studies but he said his wife made more money than him.  Further, the evidence indicated that he bought a new car after he found a job in 1995 and that he bought his 1^st house in 1997.

162.  There was no sufficient evidence that D paid his parents US$5,000 when they were in Pittsburg in 1996.  In any event, even if D did give his parents US$5,000, there was no sufficient evidence that this was for the repayment of the Mortgage Loan or Ongoing Expenses for the Property.

163.  P’s evidence that in 1989 he had made early repayment of HK$50,000 and also several other early repayments thereby reducing the monthly mortgage instalment to HK$300 was not really challenged by D.  D had himself said during the trial that P had paid extra HK$50,000 towards the principal of the Mortgage Loan.  

164.  As I have found that the source of the monies in the KPB Accounts were not D’s and that more probable than not, he had taken most of his savings to the United States when he left, and in light of D’s own evidence that he did not send any money to his parents from 1989 – 1995, any early repayments towards the Mortgage Loan would have come from P’s own savings.

165.  I have found earlier that P and Madam Kwok had at least HK$50,000 savings in 1987.  Further, from April 1989 onwards, P’s income had substantially increased and by 1995, P was earning about $7,350 per month.  P had said if he had more than $5,000 in his account, he would make early repayments.  In my view, P had sufficient savings in 1989 to make an early repayment towards the principal of the Mortgage Loan of $50,000 and thereafter between 1989 and 1996/1997 to make further early repayments of about $5,000 each, gradually reducing the mortgage instalments to about HK$300 per month.

166.  3 of the 4 cheques GSQ had produced which were issued in favour of Madam Kwok were prior to the Discharge, and these 3 cheques totaled US$6,900 and as seen on the endorsement on those cheques, they were clearly deposited into Madam Kwok’s account at Standard Chartered Bank on about 13 December 1993, 8 April 1996 and 16 January 1997.  There were also the regular transfers mentioned earlier between December 1992 to 1995 totalling about US$3,000 to Madam Kwok’s Standard Chartered Bank USD Account.  All in all, between end of 1992 to early 1997, GSQ had transferred almost US$10,000 to her parents.  GSQ had said these payments were not specified for any purpose.  Thus, they were gifts or contributions for her parent’s expenses. 

167.  On the other hand, as I have said earlier, there was no sufficient evidence that D had paid US$5,000 to his parents in 1996 in Pittsburg for the purpose of payments towards the Property. 

168.  In light of the above, in my view, there was no sufficient evidence that D had made any payments towards the monthly mortgage instalments, or repayments towards the principal of the Mortgage Loan, or the Ongoing Expenses of the Property from the date of purchase until the date of Discharge. I am of the view that P had discharged the burden on him and I find more probable than not, the Mortgage Loan and Ongoing Expenses until Discharge were paid by him (and Madam Kwok) from their own savings and payments given to them by GSQ.

From Discharge to date

169.  Out of the Ongoing Expenses, in my view, the only items of expenses relating to the ownership of the Property would be rates and government rent, as utilities and management fees would normally be paid by the occupier rather than the owner.  There was no evidence that there had been any other maintenance expenses of the Property.

170.  The rates and government rent have always been made by autopay.  It was not D’s case that the payments were paid automatically from any bank account held by him.  In fact, it would appear that all his accounts in Hong Kong were closed sometime ago although he was vague about when and how they were closed.

171.  D had produced a bundle of 16 cheques issued by him in favour of P from 11 January 2001 to 12 February 2012[20], a period of 11 years, totaling about US$31,085, or averaging about US$2,830 a year, or HK$1,837 a month.  There was also a cheque dated 22 January 2001 issued by D’s wife in favour of Madam Kwok in the amount of US$1,888 with remarks “parents (illegible) gift”.  It would appear that all these cheques were credited into an account at HSBC of P or Madam Kwok’s and probably the HSBC Joint Account (collectively “D’s Cheques”).

172.  D’s evidence during the trial was that D’s Cheques were for the basic maintenance of the Property, ie management fees, rates and government rent.

173.  P’s evidence was that those payments were not related to the Property at all but were for air-tickets and for subsidizing P and Madam Kwok’s living expenses after P took early retirement at D’s request to fly over to United States to help take care of D’s son.  The last of D’s Cheques, which were cashed by P, was dated 12 February 2012.  Then there was the Incident, and only after GSQ’s husband telephoned to tell D that P would sue and claim back the Property, then D sent the cheque dated 22 July 2013, with the remarks “I Q for living expenses”[21]. As mentioned earlier, this cheque was sent to Hong Kong at a time when P was staying with GSQ in the United States.  This cheque was not cashed and this would mean the last payment from D to P was in February 2012.  D has not sent any money to P since.

174.  First of all, D’s Cheques were sent only after the Discharge.  Secondly, if D’s Cheques were for payment of maintenance of the Property, there was no reason why he would stop after 12 February 2012, if he had considered himself an owner of the Property.

175.  In my view, D’s Cheques were like those payments from GSQ to her parents, they were no more than gifts to P and Madam Kwok, or contribution towards their living expenses.  They were not specified for the maintenance expenses or rates or government rents of the Property.

176.  Having considered the above, I accept P’s evidence that all Ongoing Expenses had been paid by P.  

Parting with possession

177.  It is a condition in the Deed of Assignment of the Property and in the Schedule to the Housing Ordinance, Cap 283, that under P and D covenanted not to part possession of the Property unless premium has been paid.  It was P’s pleaded case that D had parted with possession of the Property when he left for the United States and that unless P is compelled by the Court to cause a change of ownership or by his name being deleted as an owner, P was/ will continue to be in breach of the covenant.

178.  There were no further submissions made by Ms Leong on this point.  In any event, it is not clear how this would assist P.  D had “parted with possession” with the full knowledge and consent of P and any breach of covenant or condition under the Housing Ordinance would be a matter for the Housing Authority to take action.

Conclusion    

179.  To conclude, it is my finding that more probable than not that D had paid for the Purchase Costs, namely a sum totaling HK$28,688 and this is the extent of his payments, and I find all other amounts, whether monthly mortgage instalments, early repayments towards principal of the Mortgage Loan, Discharge, or Ongoing Expenses were made by P.  Ms Leong and Mr Chan agreed that the total purchase price plus the miscellaneous expenses was HK$268,563.15 and thus the amount of HK$28,688 paid by P was about 10.68%.

180.  I therefore find that the Property has been held by P and D in joint names on trust as to 89.32% for P, and 10.68% for D.  D should bear 10.68% the expenses of the rates and government rent since date of completion of the purchase of the Property and should continue to bear 10.68% of such expenses and any future maintenance expenses relating to the Property but excluding management fees and utilities which should be borne by the occupier, and in this case P.

Costs 

181.  As P is largely the successful party, D should pay P’s costs of this action, to be taxed in accordance with Legal Aid Regulations, if not agreed.  This is an order nisi, which shall be made final after 21 days.