YIP MEI NA v. CHOW LAP KWOK PATRICK AND OTHERS

DCCJ1226/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 1226 OF 2015

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JUDGMENT

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1.  The Plaintiff (“Yip”) is the ex-wife of the 2^nd Defendant (“Stephen”) and ex-daughter-in-law of the 1^st Defendant (“Chow Senior”) and his wife the 3^rd Defendant (“Madam Chow”).

2.  In this action Yip now claims against Chow Senior and Stephen the sum of HK$430,000, said to be the unpaid price for the sale to Chow Senior and Stephen of her 1/3 share in the property known as Flat 7, 3^rd Floor, Block G, Golden Lion Garden Stage II, Nos 1-3 Kak Tin Street, Shatin (respectively, “the Share” and “the Property”), the relevant conveyance having taken place about 6 years ago on 25 February 2011 (“the Conveyance”).

3.  The Defendants’ case is that Yip in fact held the Share on resulting trust for Chow Senior and Madam Chow, and hence no price was payable for its return.  To that, Yip says the Share was a gift from them to her made in November 2006 when the Property was purchased.  The first broad issue for trial, therefore, is whether the Share was a gift to Yip, or was held by her on resulting trust.

4.  The Defendants’ fallback case is that even if the HK$430,000 were payable, the same has been satisfied by the payment of a total sum of HK$450,000 made by Madam Chow to Yip between 28 January 2013 to 30 March 2014, about 2 years after the Conveyance.  There is no dispute that the sum was received by Yip.  However, Yip says that the sum was paid to her as compensation for Stephen’s “verbal harassments throughout all the years” and particularly those made in or about mid/late November 2012.  The second broad issue for trial, therefore, is whether the sum was paid to compensate Yip for the verbal harassment, or whether the same was used to satisfy Yip’s present claim, in the event the same is established.

5.  I should also mention that initially, the Defendants counterclaimed for the return of the said HK$450,000.  The counterclaim was discontinued in November 2016 with the result that they are now not claiming it back even if Yip has no legal basis to keep it.

6.  As the events pertaining to these two broad issues were about six years apart, I think it convenient to deal with these two broad issues separately.

WAS THE SHARE HELD ON RESULTING TRUST OR WAS IT A GIFT?

Background leading to the purchase of the Property in November 2006

7.  The following general background facts, unless otherwise indicated, are common ground or not seriously disputed.

8.  Stephen is the son of Chow Senior and Madam Chow.  Chow Senior used to be a high-ranking officer in the Immigration Department.  Since retired therefrom, and at the material time, he has been operating with some success his own renovation company.  Madam Chow has been assisting Senior Chow in his renovation company responsible for financial matters of the business.

9.  Stephen and Yip got acquainted in 1999.  They got married in the UK in September 2000.  Their son Ci En Terry (“Terry”) was born on 29 November 2000.  They lived in London until summer 2004 in a property owned by Chow Senior and Madam Chow.  Stephen was then studying in Middlesex University.  While living in the UK, Stephen, Yip and Terry were financially supported by Chow Senior and Madam Chow.

10.  Terry, their first grandson, has been very dear to Chow Senior and Madam Chow.  This is mentioned here as it is the defence case, that the Property was purchased, and many other benefits and financial supports were provided to Yip, intended to be directly or indirectly for the well-being of Terry.

11.  Stephen graduated from Middlesex University in the summer of 2004.  There was an unhappy incident happened in the graduation ceremony, the details over which there is some dispute.  Shortly after the graduation, Stephen, Yip and Terry moved back to Hong Kong to live.

12.  To prepare for that and thoughtfully, Chow Senior and Madam Chow repossessed from the tenant a flat in Maritime Bay in Tseung Kwan O owned by them, and had it renovated for Stephen’s family to move in.  However, after having moved in for a very short period, Yip and Stephen had a big fight and they moved out of that flat.  Yip took Terry to live with her parents in Sun Chui Estate in Shatin; while Stephen moved back to live with his parents in Dragon Court in Tin Hau.

13.  Since then, Stephen and Yip became separated, with Terry living with Yip.

14.  Several months later in 2005, Yip filed a petition for divorce.  By a consent order dated 30 May 2006, Yip was granted custody of Terry with reasonable access given to Stephen.

15.  Of note is that the financial arrangements between Yip and Stephen were also agreed and made part of that consent order.  The financial arrangements so ordered by consent was that Stephen was to pay a monthly maintenance of HK$5,000 to Yip until she re-marries and another monthly maintenance of HK$5,000 for Terry.  On 4 August 2006, the decree nisi was made absolute.

16.  Since the separation, the relationship between the parties was apparently tolerably cordial.  Stephen concentrated on developing his career.  He seldom contacted Yip, if any at all. Madam Chow was the main contact with Yip.  The contacts were mainly in relation to Terry.  Chow Senior, Madam Chow and Stephen (together referred to as “the Chows”) had had good and consistent opportunities to see and take care of Terry, principally during weekends when Terry would stay overnight in their home at Dragon Court.  Evidently, Chow Senior and Madam Chow enjoyed these weekends with Terry very much.  They looked forward to it.  They celebrated Terry’s birthdays dutifully and happily every year.

17.  In addition to the HK$5,000 per month ordered by consent to be paid by Stephen for Terry’s maintenance, almost every need of Terry was paid for by the Chows; while Yip was only paid the monthly maintenance of HK$5,000.  Yip however says that she was given a number of gifts from Madam Chow, and it is her case that the making of these gifts was relevant.  This would be discussed later.

18.  Some time in mid to late 2006, Yip told Madam Chow to the effect that as Terry would be entering primary school in the summer of 2007, he needed more living space and privacy.  Yip asked the Chows to rent a flat for Terry and her to live, which eventually led to the purchase of the Property.

19.  Though it was to Madam Chow that Yip made the said request, it is common ground that Chow Senior was the decision maker in the Chow family, especially over financial matters, and that Yip knew about this all along.

20.  There is also no dispute that the price and all incidental expenses for the purchase of the Property were paid by Senior Chow and Madam Chow from their joint bank account.

Applicable legal principles

21.  Ms Lau, counsel for Yip and Mr Chow, counsel for the Chows, both are content to rely on the following succinct statement of the trite principle on resulting trust made by Deputy High Court Judge To (as he then was) in Lee Tso Fong v Kwok Wai Sun^[1], that:

“where a person purchases property with his own money and directs that the property be transferred to the name of another, in the absence of evidence to the contrary, there is a presumption that the property is held by the person to whom it is transferred under a resulting trust in favour of the person who provided the money for the purchase. The law imputes a common intention to the parties to hold the property under a resulting trust even in the absence of such intention. This presumption may be rebutted by proof of the actual common intention of the parties…”

22.  Ms Lau rightly accepted that in the circumstances, the presumption of resulting trust applied in favour of Chow Senior and Madam Chow; and therefore the burden was on Yip to rebut the presumption by proving, on balance of probabilities, that they intended to make a gift of the Share to Yip.

23.  Mr Chow further drew my attention to another trite statement of principle by Deputy High Court Judge To in the same case, which was not disputed by Ms Lau, that:

“…subsequent acts and declarations which reflect on the intention of the parties are also admissible to the extent that they are evidence against the party who did the act or made the declaration, but not in his favour …”^[2].

The Plaintiff’s evidence

24.  For Yip, only herself gave evidence.  As usual, she adopted her witness statement as the evidence in chief.

25.  Her version in her witness statement as to the purchase of the Property and the making of the gift was as follows.

26.  In 2006 she mentioned to Madam Chow about Terry’s need for space and privacy as he grew older and ready to enter primary school.

27.  It was then Madam Chow who mentioned that the Chows “would provide a new place for Terry and me”. Madam Chow later informed Yip that the Chows “would purchase a flat for them”[3].

28.  It was later decided to purchase the Property.  According to Yip, Stephen and her then went to the estate agent on 14 November 2006 to sign the Provisional Agreement for Sale and Purchase (“Provisional Agreement”)^[4].

29.  According to Yip, it was Madam Chow who initiated to make the gift.  Yip said that after the Provisional Agreement was signed, “Madam Chow informed me one day that she wanted to provide a gift to me and said it was for compensating me for Stephen Chow’s betrayal of our marriage”^[5].

30.  Also, according to Yip, it was Madam Chow who then asked her to go to the office of Messrs Tony Kan & Co to sign the Formal Agreement for Sale and Purchase (“the Formal Agreement”)^[6].

31.  Yip said that on that day in that solicitors’ office, Madam Chow informed her that the Property would be acquired in the names of Chow Senior, Stephen and her “as she wanted to provide a gift to me”^[7] and that Chow Senior and Stephen agreed by nodding their heads.  They signed the Formal Agreement^[8].

32.  Then the Assignment was signed uneventfully on 20 December 2006.

33.  In cross-examination:-

(a) Yip added further details to the telephone conversation she said she had with Madam Chow after the signing of the Provisional Agreement and before signing the Formal Agreement in that Madam Chow said the following: that the Property was originally intended to be purchased in the names of Madam Chow and Chow Senior, but after discussing with Chow Senior, she wanted to give her share to Yip; however, it was not so good for Chow Senior and Yip to hold the Property in joint names, so they would add Stephen’s name as well.

(b) However, at the second day of trial, Yip said that she now recalled that in the telephone conversation mentioned in (a) above, Madam Chow only said that she wanted to give her share of the Property to Yip, there was no mention in that conversation in whose name(s) the Property was to be held.

(c) Yip said that in the solicitors’ office

(i) while waiting for the solicitor, Madam Chow said to her again that originally it was Chow Senior and Madam Chow who were intended to be the owners of the Property, but after discussion, she wanted to give her share of the Property to Yip; and Chow Senior and Stephen nodded indicating agreement; and

(ii) what happened there was very simple, with no complications (“當時事情很簡單，不復雜”).

34.  Yip also emphasized in her witness statement “some of the incidences (sic) which demonstrates (sic) the good relationship between Patrick Chow, Madam Chow and me” to support her case that they had intended to make a gift of the Share to her.  I will refer to them in due course.

The Defendants’ evidence

Chow Senior’s evidence

35.  He impressed me as an intelligent, clear-minded and principled person.  He adamantly denied having any intention to make a gift of the Share to Yip.  In fact, his evidence was that he also never intended to make a gift of part of the Property to Stephen, a matter that Madam Chow and Stephen agreed.  He recounted a number of incidents and matters to explain, as follows.

36.  One of them was the incident occurred during Stephen’s graduation from Middlesex University in the summer of 2004, which I have briefly mentioned.  Chow Senior and Madam Chow flew to London to attend that ceremony.  Somehow an argument ensued.  At some point, whether seriously or jokingly made, there was a request from Stephen and/or Yip for payment by Chow Senior of HK$1,000,000 before Stephen would agree to take a photograph or photographs with Chow Senior during the graduation.  The upshot was no photograph was taken on that occasion between Chow Senior and Stephen. Chow Senior and Madam Chow felt deep regret over it.  Stephen said in evidence that he now felt deep regret over it also.  In evidence, Yip did not dispute that such a request was made but denied having personally made it; and on that I make no specific finding.

37.  The second incident occurred while Stephen, Yip and Terry were living in the Maritime Bay flat provided by Chow Senior and Madam Chow.  Chow Senior distinctly remembered an utterance made by Yip in an unfriendly tone when he visited them at the flat to the effect “how can he (Chow Senior) come here without our permission?!”  This event and utterance were not disputed by Yip, and I find it occurred as Chow Senior said.  It was obvious to me that Chow Senior felt very offended by the utterance and attitude and took that to heart.

38.  His evidence, which is undisputed, is that his upset was not directed towards Yip only, but to both Stephen and Yip.  Chow Senior said that he felt they were ungrateful, that their conducts and attitudes were very much against his own philosophy – that one should strive to earn one’s own living, to live responsibly and within one’s own means, and not to lay back and live off the wealth of one’s parents.  He said he already felt unjustifiably burdened financially to have to support Stephen and Yip during the years they lived in the UK.

39.  Chow Senior explained that thus he was very mindful not to further encourage this “ungrateful” and “irresponsible” attitude and manner of living of both Yip and Stephen.

40.  Accordingly, though he and Madam Chow paid for the needs of Terry, these needs were not paid by periodical payments. Rather, they required Yip to inform Madam Chow of the various needs for/spending of Terry, and she would pay Yip per her requests, and usually requiring the support by receipts.  In other words, it was an arrangement to reimburse.  These are not disputed by Yip, and I so find.

41.  Also, it was Chow Senior and Madam Chow’s requirement and practice, in line with Chow Senior’s admonition to Stephen to be responsible for his own expenditure, that Stephen would have to reimburse them every month from his own personal income all the support that was given to Yip and Terry.

42.  Although the request from Yip was to rent a flat, Chow Senior decided to buy, as he always thought purchasing was much more financially beneficial then renting.

43.  He stressed that the Property was acquired to provide appropriate accommodation for his beloved grandson Terry and not to make a gift to Yip.

44.  On 13 November 2006, upon arrangement by Yip, who was the person contacting the estate agent, Chow Senior and Madam Chow went to view the Property.  Yip and Terry later joined.

45.  Chow Senior highlighted the fact, as his purpose was to provide accommodation to Terry, that he observed Terry closely while he was visiting the Property to see if he liked it.  He observed that Terry moved around in the Property happily, and concluded that Terry liked the Property.  Yip and Terry then left.

46.  Chow Senior then negotiated with the vendor until quite late.  According to Chow Senior, he then further discussed with the estate agent in the agent’s office.  He then told the estate agent his intention to buy and instructed him as to the price he was willing to buy - HK$1,030,000.  He wrote out a cheque of HK$30,900 for the initial deposit and told the estate agent that the Property would be purchased in the names of himself and Stephen.  He and Madam Chow left and let the estate agent to follow up on the matter.

47.  He explained that he intended to include Stephen’s name as one of the purchasers not to make a gift to him, but to try to let him shoulder some responsibility so as to educate him.

48.  Chow Senior was then not involved until 28 November 2006 when he went with Madam Chow and Stephen to the office of Messrs Tony Kan & Co to sign the Formal Agreement.

49.  It was his evidence that in the office of Messrs Tony Kan & Co he discovered that he was not named as one of the purchasers in the Formal Agreement, which instead named Stephen and Yip as the purchasers.  Chow Senior was upset over that as he was the person effectively providing all the funds to purchase.  Then, there was a discussion among the Chows concluding that Yip’s name would remain there as one of the named purchasers in the Formal Agreement, together with Chow Senior and Stephen.

50.  Chow Senior was very clear that Madam Chow had not discussed with him about making a gift to Yip prior or that Madam Chow had ever spoken any word to that effect in the solicitors’ office. He was also very clear that had the matter of making a gift to Yip been discussed, he would without hesitation have rejected it.  He further said that according to his own understanding, being named as a purchaser did not necessarily mean having a beneficial ownership; that he agreed to keep Yip’s name as a purchaser, upon Madam Chow’s persuasion, because he was informed by Madam Chow that Yip requested it, such that she would feel more secure (“住得更安心”) and need not worry about being evicted by Stephen or Chow Senior.

51.  His evidence was also that nothing significant happened while the parties signed the assignment.

Stephen’s evidence

52.  Stephen’s evidence was that he did not want to be, and in fact was not much, involved in the purchase of the Property as Yip and him had divorced on terms not entirely amicable and he wanted to have a clean break with Yip.  His evidence relevant to this part of Yip’s claim concerns several telephone calls and what happened in the solicitors’ office during the signing of the Formal Agreement.

53.  He said he received a call from Yip one day in which in gist Yip asked him to go and view various flats and Stephen told Yip in the same conversation that he would not go.

54.  Stephen did not go to view those flats.  Importantly and contrary to what Yip claimed, he said he did not go with Yip to the estate agent’s office to sign the Provisional Agreement.  This is clearly borne out by his purported signature in the Provisional Agreement, which was signed in Yip’s signature stated to be “for and on behalf of Chow Tsing Kin Stephen …”^[9].

55.  Stephen then received another call from Yip late one night in which Yip told him that the Property “was purchased” (“買咗啦”).  Stephen’s evidence was that Yip did not sound too happy and said words to the effect that they would be living in Chows’ property again (“又係住我地啲嘢”).  Yip also asked in whose name(s) the Property would be held and Stephen replied “Chow Senior and Madam Chow” (Stephen then surmised that the Property would be held in their names).  Stephen also said that he also told Yip that as she was not paying any money, she would not be named as purchaser and she would not have any share (“冇名都冇份”).  Shortly after, Madam Chow called Stephen and Stephen told her about his conversation with Yip.

56.  In relation to what happened in the solicitors’ office during the signing of the Formal Agreement, Stephen’s evidence was as follows.  In the solicitors’ office, he was surprised when he learned for the first time that the names of the intended purchasers in the Formal Agreement were Yip’s and his.  He was very unwilling to be named as a co-purchaser with Yip as they had divorced; moreover, he then had a girlfriend. He also recalled that Chow Senior was surprised and upset that he was not named as one of the purchasers in the Formal Agreement, and that there was ensued a discussion in the conference room in the solicitors’ office among the Chows but in the presence of Yip in which he said Chow Senior and Madam Chow should be named as the purchasers, while Madam Chow said words to the effect that if Yip’s name was included, she would feel happier and more at peace (安心哋), and Senior Chow suggested adding his name as one of the purchasers together with Yip and Stephen.  Stephen also recalled that at some point, he and Madam Chow left the conference room and continued with the discussion.  Eventually, the Chows agreed that Chow Senior, Stephen and Yip would be named as the purchasers in the Formal Agreement.

57.  According to Stephen, he clearly recalled that neither Madam Chow nor Chow Senior had uttered any words to the effect that they made a gift of the Share to Yip.

Madam Chow’s evidence

58.  She gave evidence to the effect of those of Chow Senior and Stephen.  I therefore would not repeat her evidence again.

59.  As to what happened in the solicitors’ office, Madam Chow however remembered that all 3 of them - Chow Senior, herself and Stephen - did leave the conference room to discuss among themselves as to who should be named as the purchasers.

60.  Madam Chow has been cross-examined in several instances and remained unshaken that she has not told Yip that she would give her share of the Property to Yip, or that in any conversation between Yip and her that she has spoken the words “give” or “gift” (送贈) or words to that effect.

61.  Two matters inadvertently came out from Madam Chow’s cross-examination, which I accept, that I need to mention, for reasons that I will explain later.  Firstly, she said to the effect that she generally respected and listened to Chow Senior, no less in financial matters.  She explained that one of the reasons she kept a journal of expenditures, bank and other monetary transactions^[10] was so that she could be accountable to Chow Senior, if required.  Secondly, she said she and Chow Senior did not want to get involved in the frequent conflicts between Yip and Stephen both of whom she and Chow Senior thought were too immature.

Credibility of witnesses

62.  I am impressed by each of the Chows as a witness.  All 3 of them answered questions in a forthright and direct manner.  Each of them tried to give an accurate account according to their best memory, even though that meant that their accounts on certain details did not exactly match with each other’s.  Additionally, Stephen on his part readily admitted that he had been immature and often times ill-tempered in the way he interacted with Yip previously.  I have no hesitation in finding that each of the Chows is a truthful and reliable witness.

63.  I am not so impressed with Yip as a witness.  She hesitated and was evasive at times when giving evidence.  It seems to me she tried often to give rationalizations in support of her own preferred conclusion rather than trying to give an accurate account.  Particularly, I hesitate to place reliability on her testimony.  At this juncture, I would mention two instances leading me to that conclusion (other instances would be mentioned in the Discussion section below).  I have mentioned in paragraph 33(a) and (b) above the way she has changed her testimony in relation to that very important telephone conversation between her and Madam Chow.  I have also mentioned that Yip stated in no uncertain terms in her witness statement that Stephen went with him on 14 November 2006 to sign the Provisional Agreement, which was obviously untrue as borne out by the signature in the Provisional Agreement.

64.  In all, where the evidence between Yip and the Chows differs, I would prefer that of the Chows.

Discussion

65.  I remind myself again that where a gift is alleged, it is the intention of the donor, and not the donee, that is in issue.  The intention is to be ascertained objectively from the contemporaneous communications by or actions of the parties, primarily those of the donor.  As always, contemporaneous documents, where available and relevant, could be very probative.  Also, I have to consider the inherent probabilities of the competing allegations.

Yip’s case on the Chows’ reason for making the alleged gift

66.  As is common ground, the purchase of the Property began with Yip’s request, and the Chows’ willingness and agreement, to provide better accommodation for Terry.  That was the only purpose mentioned and discussed, not the making of a gift to Yip.  That sole purpose remained the same when Chow Senior, Yip and Terry viewed the Property, as it can be recalled that according to Chow Senior, whose testimony I accept, his primary concern when viewing the Property was whether Terry liked the flat.  On the other hand, there was no evidence whatsoever from either side suggesting that, when deciding to purchase the Property, any attention had been placed on ascertaining whether Yip liked the Property.

67.  According to Yip’s case, the making of a gift to her was suddenly related to her by Madam Chow in a telephone conversation occurred after the signing of the Provisional Agreement, without any request on Yip’s part or any discussion.  Bearing in mind the background events, namely, the unhappy incident during Stephen’s graduation in UK, the sudden moving out from the Maritime Bay flat and Yip’s words that upset Chow Senior, that the financial arrangements between Stephen and Yip were agreed to and made part of the consent order just less than 6 months ago on 30 May 2006, that the decree nisi for divorce was only made absolute on 4 August 2006, that the Chows would only pay Terry’s expenses by way of a reimbursement arrangement requiring receipts and so on, this alleged change in making a gift of part of the Property to Yip, on the Chows’ own initiative without request from Yip, would, by any measure, be considered a very dramatic change of attitude and position on the part of the Chows.  What was the reason for it ?

68.  According to Yip, the only reason for this dramatic change was this: Madam Chow in the same telephone conversation said “it was for compensating [Yip] for Stephen Chow’s betrayal of [their] marriage”^[11].

69.  This reason for the making of the alleged gift clearly is a very important piece of information in ascertaining whether a gift was indeed intended; a fortiori in the context in this case as set out in paragraph 67 above.

70.  However, I am quite surprised that this clearly very important expression of motive and reason for the dramatic change was never put to Madam Chow in her cross-examination, nor was it mentioned again by Yip herself in her oral testimony; nor has Yip offered any other reason for this dramatic change.

71.  If this notion that Stephen had “betrayed” the marriage between him and Yip was of such force such as to motivate this dramatic change in Madam Chow to make the gift and Chow Senior to agree, one would expect that it would have been mentioned somehow in the text messages exchanged between Madam Chow and Yip, which were comprehensively and extensively reproduced in the trial bundles.  However, there was not a single utterance from Madam Chow that she (or Chow Senior) agreed with Yip’s such viewpoint about this “betrayal”, nor was there any other words to similar effect.

72.  Also, if Madam Chow did say those words as alleged by Yip as being the reason for making the gift, she and Chow Senior would not only have involved themselves, but indeed would have taken side against Stephen, in the conflicts between them which would have flied against Chow Senior and Madam Chow’s position that they did not want to get involved in the conflicts between Yip and Stephen.

73.  Moreover, I accept the evidence of Chow Senior that Madam Chow had indeed never asked him regarding the making of a gift of part of the Property to Yip; and that even if asked, he would have refused.

74.  In the premises and in my judgment, I disbelieve Yip and I also find it inherently improbable that Madam Chow had uttered the words as alleged by Yip that the alleged gift was made for compensating Yip for Stephen’s betrayal of their marriage.  I reject Yip’s evidence that such words were said by Madam Chow and Yip’s case that the reason for making the alleged gift was to compensate her for Stephen’s “betrayal” of the marriage.

Yip’s reliance on certain benefits given to her by the Chows over the years

75.  As mentioned, in Yip’s witness statement, it was said that “some of the incidences (sic) which demonstrates (sic) the good relationship between Patrick Chow, Madam Chow and me”. Ms Lau for Yip placed substantial reliance on them.

76.  These instances were^[12]:-

(a)   the gift of the Share to her in late 2006;

(b)   Four trips that Chow Senior, Madam Chow, Yip and Terry took to Japan and Taiwan respectively in February 2007, April 2010, July 2010 and June 2012; and in some of these trips they all flew business class, stayed in 5-star hotels and Yip was given money to spend amounting to HK$10,000;

(c)   From 2004 to 2014, Chow Senior and Madam Chow celebrated important dates with Terry and Yip;

(d)   2009, Madam Chow made Yip the policy holder and beneficiary of an insurance plan for an insured amount of HK$100,000;

(e)   Senior Chow and Madam Chow made various monetary payments to her over the years in addition to her maintenance.

77.  For reasons set out below, I do not consider them that probative to the issue and I do not place much weight on them.

78.  Firstly, they occurred long time after and not contemporaneous with the alleged gift.  For instance, the holiday trips occurred between 2007 to 2012, while the alleged gift of the insured amount HK$100,000 took place in 2009.

79.  Secondly, I accept the explanations offered by the Chows as to the specific reasons why such benefits were given to Yip.

(a)   In relation to the 4 family trips to Japan and Taiwan, Chow Senior explained that since he had a minor stroke in 2006, his health was not as good, therefore in those happy occasions and as the Chows could afford it, he would like to fly first class and stayed in good hotels.  It would be embarrassing to Yip and not good for Terry if Yip had to fly economy while the rest fly first class and Yip was to stay in a different hotel, and so on.

(b)   The gift of the insured amount in the sum of HK$100,000 by Madam Chow was made, upon Yip’s request, for the payment of part of the purchase price of a car to be used to take Terry to and from school.

(c)   As to the other smaller gifts by Madam Chow, I accept her explanation that it was her personal belief to try to treat Yip right and nice regardless of the conflicts she might have with Stephen.  Indeed, Madam Chow rejected the allegation that her relationship with Yip was “good” and expressed misgiving and frustration in that Yip would be polite and nice to her when Madam Chow gave to her what she wished; but when Yip was moody or when things did not go her way, she would be rude and disrespectful to Madam Chow, to Madam Chow’s dismay.

80.  Lastly, in my view, even assuming that certain benefits were given to Yip out of the graceful generosity of the Chows on certain occasions, such generosity, alone without more, would not go to show that the Chows would necessarily visit Yip with the same generosity next time around; particularly when it comes to something as substantial as an interest in real property.

Did Madam Chow say the words alleged evincing an intention to make the alleged gift?

81.  To recap, Yip’s evidence is this. In her witness statement, she said Madam Chow informed her one day that Madam Chow “wanted to provide a gift to [her]”.  In oral testimony, Yip said that Madam Chow told her in a telephone conversation that she wanted to “give [Yip] her share in the Property”.  Madam Chow then afterwards told Yip to attend the office of Messrs Tony Kan & Co to sign the Formal Agreement.  In the solicitors’ office and while waiting, Madam Chow said to her again that originally it was Chow Senior and Madam Chow who were intended to be owners of the Property, but after discussion, she wanted to give her share of the Property to Yip; and Chow Senior and Stephen nodded indicating agreement. Yip also said that what happened in the solicitors’ office was very simple, with no complications (“當時事情很簡單，不復雜”).

82.  To recap the evidence of the Chows, Senior Chow instructed the estate agent that the intended purchasers would be himself and Stephen.  In the office of Tony Kan & Co, the Chows were surprised to find that the purchasers named in the Formal Agreement were Yip and Stephen.  Chow Senior was also upset as he, who in effect provided the entire fund, was not even named as a purchaser.  Stephen was surprised and was very unwilling to be named as a co-purchaser with Yip.  There was then a discussion among the 3 of them, part of it in the presence of Yip, and part of it only among themselves.  In the end, with Madam Chow’s persuasion, they agreed to let Yip’s name remain as a purchaser such that she would feel more secure (“住得更安心”) and Chow Senior and Stephen would be the other 2 named purchasers.  The discussion was about in whose name(s) the Property would be held, and not the entitlement to the beneficial interest.  The words “give” or “gift”, or words similar, were not spoken on that occasion or in the telephone conversations between Yip and Madam Chow, as alleged by Yip.

83.  Had Yip’s version were true, one would expect that the Chows would have communicated with Tony Kan & Co as to who the intended purchasers were so that they could prepare in advance the Formal Agreement for execution.

84.  When one examines the Schedule to the Formal Agreement^[13], however, one finds that the purchasers originally were Stephen and Yip.  Chow Senior’s name was inserted there as the 1^st named purchaser by having it typed by a different and smaller font set on top of the name of Stephen and indicated with the symbol “ / ”.  It clearly showed that Chow Senior’s name was added subsequently and manually after the Schedule has been printed out. 

85.  Stephen and Yip in fact were the purchasers named in the Provisional Agreement^[14]. It is Chow Senior’s evidence, which I accept, that the Chows only have sight of the Provisional Agreement for the first time during discovery in this action; and thus they only recently knew that Stephen and Yip were named as the purchasers in the Provisional Agreement.

86.  All these lend credibility to the Chows’ evidence that initially the named purchasers in the Formal Agreement were Stephen and Yip; and that they were surprised by that fact.  Therefore, they had to discuss and decide in the solicitors’ office who the intended purchasers would be.  The existence of this discussion, however, was essentially denied in Yip’s version of events.

87.  As to how the purchasers were named in the Provisional Agreement, it is undisputed that Yip was the only person attending the estate agent to sign the Provisional Agreement on 14 November 2006, on which she appended her signature twice, one for herself and one for and on behalf of Stephen.  In cross-examination, Yip said that on that occasion the estate agent had not asked her about who the intended purchasers would be, and that the names of the intended purchasers were already written out in the Provisional Agreement when she attended the estate agent, and that she guessed that the estate agent had called Chow Senior about it.  I find Yip’s such evidence incredible and evasive.  Not only have I accepted Chow Senior’s evidence that he had earlier instructed the estate agent that the intended purchasers would be himself and Stephen, I also find it highly improbable that any one of the Chows would instruct the estate agent to name Yip and Stephen together as co-purchasers.  Evidently, the only other person who could have instructed the estate agent to name Yip and Stephen as the purchasers in the Provisional Agreement would have been Yip herself.

88.  By reason of the above and also based on my finding on the witnesses’ general credibility and on balance of probabilities, I find in favour of the version of events as testified to by the Chows and reject Yip’s version.  Specifically, I find that Madam Chow has not uttered words to the effect of making a gift of part of the Property to Yip and I find that the intention of Chow Senior and Madam Chow in letting Yip’s name remain as one of the purchasers of the Property was not to make a gift of the Share to Yip.

Yip held the Share in resulting trust for Chow Senior and Madam Chow

89.  I therefore hold that Yip has failed to rebut the presumption of advancement.  The Share was held by Yip on trust for Chow Senior and Madam Chow, who were entitled to have the Share conveyed, per their direction, to Chow Senior and Stephen by way of the Conveyance executed on 25 February 2011.  Chow Senior and Stephen therefore are not liable to pay the price now claimed by Yip.

90.  My conclusion above is sufficient to dispose of this action.  For completeness however, I will also deal with the Chows’ fallback defence.

THE HK$450,000 – COMPENSATION FOR VERBAL HARASSMENT OR SATISFACTION FOR YIP’S CLAIM HEREIN (IF YIP’S CLAIM IS ESTABLISHED)?

Events up to November 2012

91.  There are quite a number of incidents and events happened in the period between the purchase of the Property to this payment that the parties referred to at trial.  Some of them involved relational matters hotly disputed by the parties.  I do not find them relevant or find it necessary to refer to them save to the extent below.

92.  Somehow as a result of a dispute over the renovation of the Property, and as a matter of plain undisputed fact, since sometime in May 2007 for about a whole year, Terry was unable to continue with the routine, not even once, of spending the weekend in Dragon Court with the Chows.  The Chows sorely missed Terry and the time they could have together during those weekends.

93.  One day in October 2007, the Chows drove to Terry’s primary school with a view to seeing him after school. According to the Chows, they were told by school personnel that Stephen was enjoined by a court order of some sort from seeing Terry.  Yip denied having obtained the court order or told the school so.  On that, I do not find it necessary to, and do not, make any finding.  Suffice it to state that I accept the testimony of the Chows that that was what they understood.

94.  The Chows then followed the school bus Terry was on and attempted to see him albeit briefly when he disembarked. It is common ground that when Stephen approached Terry when he was disembarking the bus, somehow Yip summoned the help of a nearby policeman whereupon the Chows left, not wanting to make a scene in front of Terry.  Chow Senior and Madam Chow mentioned that it was very disheartening to them when they could only catch a distant glimpse of Terry.  Yip gave an explanation why she summoned the policeman.  On that, again I do not find it necessary to, and do not, make any finding.

95.  I find it relevant that from these events, and as the Chows so testified, which I accept, that they formed a subjective perception that as Yip had the custody of Terry, she could refuse them access to Terry, for which there was little they could properly do.

96.  On 10 and 29 May 2008, Chow Senior and Madam Chow paid Yip HK$100,000 and HK$200,000 as payments for the renovation costs of the Property.

97.  A short while later, Terry resumed his weekend routine staying with the Chows.

98.  In August 2011, Yip married her present husband.

99.  I should also mention that on 5 May 2015 upon Stephen’s application, the Family Court granted joint custody of Terry to Stephen and Yip, with care and control of Terry to Stephen, and reasonable access to Yip.

The verbal harassment

100.  Yip complained that some time in mid-November 2012, Stephen called her consecutively for several days and in those telephone conversations he threw abuses against her, her husband and her younger son begotten with her said husband.

101.  Yip confirmed in cross-examination that she had quoted in paragraph 34 of her witness statement the worst examples of the abusive language used by Stephen.  There were 4 – one adjective, one noun and two phrases.  Without the need to quote them here, suffice to say they were common Cantonese abusive and derogatory terms.

102.  Stephen in oral testimony readily admitted that he had lost temper when he made those calls and had used those derogatory terms.  He explained that he was calling then to ask Yip’s permission for Terry to attend his coming wedding with his present wife. Stephen greatly desired Terry to be present in his special day.  However, Yip refused.  In the result he had lost temper.  Stephen’s such version was not challenged in cross-examination and I accept his testimony.

Communications and events leading to the payment

103.  Yip’s evidence in her witness statement was that after the verbal abuse, she called Chow Senior and Madam Chow demanding an explanation.  Chow Senior did not take her call.  Madam Chow did.  Yip then informed Madam Chow that Yip’s mother and Yip’s husband demanded a meeting with Chow Senior and Madam Chow but Madam Chow did not respond. Madam Chow then suggested she would pay HK$550,000 “to settle the matter”, which Yip agreed.^[15]

104.  Madam Chow’s evidence is that Yip called her in early 2013, saying that Chow Senior “owed her a settlement” (欠她一個交代); and the settlement was money Chow Senior should have given her as the price of the Share in the Property.  As Madam Chow was not involved at all in the Conveyance, she mistakenly thought that such money was in fact owing.  She recalled the painful experience of not able to see Terry in 2007 and 2008.  She therefore decided to pay Yip by instalments from her personal savings.  As Yip has not told her the amount, she thought HK$550,000 was about right and suggested that sum, which Yip agreed.^[16]  She started paying Yip a sum of HK$30,000 each month since 28 January 2013 until late March when she was stopped by Chow Senior who discovered the matter.

105.  At trial, parties also relied on the text messages exchanged between Yip and Madam Chow and Chow Senior.

106.  The following text messages exchanged contemporaneously between 20 November 2012 (shortly after the verbal harassment was made) to late January 2013 (when first instalment was paid) were relevant and telling:-

(a) 20 November 2012 (a Tuesday) 11:45 am: Yip wrote to Chow Senior: “since Sunday until now, you did not take my call, I can only message you.  I look for you because my mother wanted to meet you and Stephen to talk.  It is about his [Stephen’s] request to me to transfer the custody of Terry to him …”.^[17]

(b) 20 November 2012 7:06 pm: Chow Senior wrote to Yip: “Mei, sorry I did not revert to you these few day as I have a lot of urgent matters to attend to.  On the matter you pointed out, I hope we can take time to discuss and handle …”.^[18]

(c) 21 November 2012 6:15 pm: Yip wrote to Chow Senior: “Ok, thanks uncle, we can take time to discuss and handle, but hope you will pay attention to this issue this time”.^[19]

(d) There were then 2 chasers from Yip sent on 3 January 2013.

(e) 4 January 2013 (time illegible in the print-out): Yip wrote to Madam Chow: “Auntie, … (then setting out Terry’s schedule in the weekend), Auntie, for us everything can stay the same in the meantime, I will give you some time to handle well the previous matter, please do not disappoint me again …”.^[20]

(f) Apparently, there was no text message exchanged until on 21 January 2013 9:00 am, Madam Chow sent a text message to Yip suggesting she paid HK$550,000 by installments.^[21]

Discussion

107.  Since these text messages were contemporaneous records and there is no dispute on their authenticity or accuracy, I place great weight on them.

108.  In all of the text messages written by Yip, there was no clear statement of what “the matter to settle” was.  Nor was there any reference to the verbal harassment by Stephen as now complained of.

109.  There was however a clear reference in the text message sent on 20 November 2012 at 11:45 am by Yip that her mother wanted to meet to discuss Stephen’s request for the transfer of custody of Terry; followed by several messages referring to this pending matter.  So far as available text messages are concern, this was the closest in time to the happening of the verbal harassment.

110.  In the text message sent on 4 January 2013, which was the last available one immediately prior to Madam Chow’s suggestion to pay, Yip set out Terry’s weekend schedule and immediately said that “everything can stay the same in the meantime” followed by a reminder to Madam Chow : “give you some time to handle well the previous matter” and “please do not disappoint me again”.  In my view, this text message carried a hint that Terry’s weekend schedule might well be changed if Madam Chow did not “handle well the previous matter”.

111.  Based on my reading of these messages, I find on balance of probabilities that “the matter” under discussion was not confined to the verbal harassment, if related to it at all; rather, “the matter” at least concerned, if not concerned mainly, with Stephen’s request to transfer the custody of Terry to him and Terry’s weekend schedule.

112.  Moreover, in my view, any ordinary person approaching the matter with common sense and full knowledge of what the “verbal harassment” consists of and the history of conflicts between Yip and Stephen, he would regard the payment of HK$550,000 as an extraordinarily excessive and disproportionate sum of compensation for the verbal harassment; such that in my view it is highly improbable that Madam Chow would offer and agree to pay such a large sum to compensate Yip for the verbal harassment.

113.  More importantly, Yip herself in cross-examination said twice that she was surprised that Madam Chow offered an amount as huge as HK$550,000 as compensation for the verbal harassment.

114.  Considering the above and having regard to my finding on the credibility of Madam Chow over Yip, I accept Madam Chow’s evidence that Yip had in telephone conversation told her that the matter requiring settlement was the price allegedly owed by Senior Chow to Yip.  I also accept Madam Chow’s evidence that she was willing and offered to pay the sum as she feared that the Chows might not be able to see and spend time with Terry as they used to if she did not comply with Yip’s demand.  I firmly reject Yip’s case that the sum paid was for compensating her for the verbal harassment.

115.  In the result I would hold that even if Yip’s claim for HK$430,000 herein were established (which is not), the same has been satisfied by the HK$450,000 paid by Madam Chow to Yip from 28 January 2013 to 30 March 2014.

DISPOSAL

116.  In the premises, I dismiss the Plaintiff’s claim herein with a costs order nisi that the Plaintiff do pay the Defendants their costs of this action, to be taxed if not agreed.  This costs order nisi will become absolute unless an application to vary the same is made by summons within 14 days from the date of this judgment.