ANGEL LEE OI SHEUNG v. QUEENIE LEUNG WAI LING AND OTHERS

HCMP 2668/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2668 OF 2006

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J U D G M E N T

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1. This is the plaintiff’s application by Originating Summons for a declaration and orders in respect of monies kept in two safe deposit boxes at the Central Branch, Head Office of Public Bank (Hong Kong) Limited, formerly known as Asia Commercial Bank Limited (“the Public Bank”) at No. 120 Des Voeux Road Central, Hong Kong.

2. The monies are the total sum of HK$10 m which is presently kept in two safe deposit boxes in the Public Bank.  The sum of HK$5 m is in safe deposit box No. C2202 and another sum of HK$5 m is in safe deposit box No. C2204.  The two safe deposit boxes were rented in the joint names of the 1^st defendant Queenie Leung Wai Ling (“Queenie”) and the 2^nd defendant Peggy Choi Pik Kay (“Peggy”), I am told, on 17 May 2006.  Peggy was adjudicated a bankrupt by an order on 2 September 2003 and she is an undischarged bankrupt.

3. The plaintiff claims that the monies in the two safe deposit boxes belong to her absolutely and that Queenie and Peggy held the monies on trust for her.  This is not disputed by Queenie and Peggy.  In fact, in their declarations they both support the plaintiff’s case that the monies belong to her absolutely and that they only held the same on trust for her.  The plaintiff, Queenie and Peggy are good friends.

4. The background facts on the evidence before me are that in about 2002 the plaintiff purchased penthouse H on 26/F and 27/F (including flat roof thereof) of Celeste Court, No. 12 Fung Fai Terrace, Hong Kong together with a car parking space (“the property”) for HK$12,700,000.  This was a purchase from the previous owner’s mortgagee bank who was exercising the mortgagee’s power of sale under the then existing mortgage over the property.  Completion of the sale and purchase took place on 29 May 2002. 

5. Towards the end of 2005 the plaintiff sold the property at a higher price thereby making a profit on her investment.  The plaintiff sold the property for HK$16 m by a sale and purchase agreement dated 20 December 2005.  Completion took place on 13 February 2006.  I would observe that in the sale and purchase agreement it was clearly stipulated in Part 1 of the First Schedule that the plaintiff as vendor was selling the property as beneficial owner thereof.

6. The plaintiff had a mortgage on the property with Hang Seng Bank and after redeeming the mortgage and paying legal fees the statement of account showed that there was a balance of HK$13,832,877.21 due to her.  The statement of account provided to the plaintiff on completion supports this.

7. The plaintiff was given a cheque for the said sum of HK$13,832,877.21 and from the plaintiff’s bank statement in respect of her account with the Hang Seng Bank, this amount was paid into her account by cheque on 13 February 2006.

8. The plaintiff’s evidence is that on 15 May 2006 she withdrew a total of HK$5 m in cash from her bank account with the Hang Seng Bank by making two withdrawals of HK$2 m and HK$3 m respectively.  The withdrawal slips adduced in evidence confirm this.  The plaintiff says that she asked Queenie to arrange a safe deposit box for her so that she could put the HK$5 m there.  Queenie agreed and opened a safe deposit box at the Ngau Tau Kok branch of the Hang Seng Bank.

9. On 17 May 2006 the plaintiff withdrew another sum of HK$5 m in cash from her Hang Seng Bank account.  The withdrawal slip produced in evidence confirms this.

10. The plaintiff telephoned Peggy and asked her to rent a safe deposit box so that she could place the sum of HK$5 m that she had withdrawn from her account there.  Peggy agreed to help her and rented a safe deposit box in the Public Bank being safe deposit box no. C2568.

11. Also on 17 May 2006 the plaintiff told Peggy and Queenie that she wanted both Peggy and Queenie to hold the monies in safe deposit boxes in trust for her and they agreed to do so.  She then asked Queenie to take the contents from the safe deposit box at the Ngau Tau Kok branch of Hang Seng Bank to the Public Bank and asked both Peggy and Queenie to rent two more safe deposit boxes under their joint names which they did.  These are the safe deposit boxes nos. C2202 and C2204 which they rented.  The HK$5 m which was kept in safe deposit box no. C2568 together with the HK$5 m which Queenie had brought from the safe deposit box at the Ngau Tau Kok branch of Hang Seng Bank were put into the two safe deposit boxes nos. C2202 and C2204.

12. All along the keys to the safe deposit boxes nos. C2568, C2202 and C2204 were handed over to the plaintiff and were kept by her.  Also, the rental payments for the hire of the safe deposit boxes were paid by the plaintiff and not by Queenie or Peggy.

13. The Public Bank later learnt that Peggy was an undischarged bankrupt and froze the two safe deposit boxes nos. C2202 and C2204 which were in the joint names of Queenie and Peggy.  The Official Receiver (“the OR”) as the trustee in bankruptcy of the estate of Peggy was notified.  

14. The contents of the two safe deposit boxes were opened on 15 September 2006 in the presence of the OR’s officers and it was found that HK$5 m in cash was in each of the safe deposit boxes nos. C2202 and C2204.

15. As I have said, both Queenie and Peggy do not claim any entitlement to the monies in the safe deposit boxes and they support the plaintiff’s case that the monies belong to her absolutely and that they held the same on trust for her.  They agreed to assist the plaintiff out of friendship.

16. The OR is a necessary party as the trustee in bankruptcy of Peggy’s estate and has been joined as the 3^rd defendant.

17. The OR, in my view, has adopted a reasonable attitude in these proceedings.  The OR adopts a neutral stance in these proceedings.

18. Mr Suen, for the OR, submitted, correctly in my view, that the starting point is that there is a presumption that the monies in the two safe deposit boxes in the joint names of Queenie and Peggy are owned by them jointly.

19. In Gleeson’s Personal Property Law it is succinctly stated at page 146 :

“Money is not an asset like any other, but has a unique status as a medium of exchange and a store of value, and for this reason the ordinary rules of property are modified in the case of money.  The primary modification is that title to notes and coins is presumed to be vested in the possessor for the time being.  The underlying logic of this rule is a matter of public policy.  As Best CJ said in Wookey v Pole: ‘The true reason of this rule is that by the use of money the interchange of all other property is most readily accomplished.  To fit it for its purpose, the stamp denotes its value, and possession alone must decide to whom it belongs’.  Put another way, if the merchant had to investigate the title of his customer to the notes and coins which he tendered in payment, commerce would cease.”

20. Mr Suen also referred me to paras 13-29 and 13-30 of Equity and Trusts Law in Hong Kong by Lawrence Yan-Kwok Ma where it is stated :

“Bailment is a transfer of property from one person (the bailor) to another person (the bailee) for the performance of services by the bailee upon certain conditions………………..

The title of the property does not pass to the bailee but always remains with the bailor………………………………………”

21. In my view, it is plain that the title to the contents of the safe deposit boxes did not pass to the Public Bank as bailee but remains with Queenie and Peggy as joint bailors. 

22. Mr Suen rightly submitted that as one of the two co-owners, Peggy is presumed to own a half share in the monies.

23. The presumption, however, is a rebuttable presumption.  The evidence of the plaintiff is unchallenged.  There has been no cross-examination of her affirmation evidence.  Both Queenie and Peggy have confirmed that they have held the contents in the safe deposit boxes in trust for the plaintiff.  They do not claim to be entitled to the same.

24. As I have said, the sale and purchase agreement whereby the plaintiff sold the property stipulated that the plaintiff was selling the property as beneficial owner thereof.  That being so, the proceeds of sale would belong to her beneficially.  Neither Queenie nor Peggy have ever claimed to be entitled to any part of the proceeds of sale of the property.

25. The plaintiff has not herself given a reason why she herself did not rent a safe deposit box but instead asked her friends to rent the safe deposit boxes in their names so that they could keep the monies for her there.  Nor has she explained why she chose to put the monies in a safe deposit box instead of earning interest on the monies by placing the same in a time deposit or other income producing instrument or investment.  The only hint of an explanation comes in the telephone note of 4 July 2006 kept by the officer of the OR of a telephone conversation that she had with the former solicitors of the plaintiff where it was recorded that the plaintiff had problems with her husband and did not want him to know about the monies in the safe deposit boxes.

26. Be that as it may, it seems to me that on the unchallenged evidence of the plaintiff and the declarations of Queenie and Peggy adduced in evidence, the plaintiff has rebutted the presumption that the monies are jointly owned by Queenie and Peggy. 

27. I am satisfied on the evidence that the plaintiff is entitled to the declaration sought.

28. I grant a declaration that the HK$10 m cash held deposited in safe deposit box nos. C2202 and C2204 at the Central Branch, Head Office of Public Bank (Hong Kong) Limited, formerly known as Asia Commercial Bank Limited, Public Bank Centre, No. 120 Des Voeux Road Central, Hong Kong belong to the plaintiff absolutely and are held upon trust for the plaintiff and do not form any part of the bankrupt’s estate of Peggy Choi Pik Kay (a bankrupt).