TJOE, JOEN MOY v. LIE HERLINA JAUHARI

DCCJ 417/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 417 OF 2001

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JUDGMENT

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Background

1. This is a property dispute between family members. The Plaintiff is an elderly widow aged 93 at the time of the trial. She suffers from functional and mental disability and hence by an order of Acting Registrar Chow dated 31 July 2002, she was given leave to appoint her younger daughter CHIOE POO YING ("PY") as her Next Friend in this action. The Defendant is the Plaintiff's daughter-in-law, having married to the Plaintiff's younger son, HIU YAN FO ("YF"), on 31 May 1985. Apart from YF and PY, the Plaintiff has an elder son called HIU YAN CHOI, who is not involved in the dispute, and an elder daughter called DJAUHARI MAGDALENA also known as HIOE TJIOE JIN or HIU CHAU YING ("CY").

2. The property in dispute is known as Flat F, 14th Floor, Tsuen Lok Building, Tsuen Wan, New Territories, Hong Kong ("the Property"). It was assigned by one CHUNG HON YING as vendor to YF and PY as purchasers and joint tenants on 7 July 1983. The purchase price of the Property was HK$170,000.00. After the purchase, the Plaintiff, YF and PY had resided at the Property. The Defendant started to reside at the Property after she was married to YF. The Defendant gave birth to a daughter on 3 June 1989. PY moved out of the Property in around 1994, whilst the Plaintiff moved to an elderly care home in around 1997. YF passed away on 19 October 1998. The Defendant and her daughter have been residing at the Property until now.

3. Shortly before his death, YF executed a Notice of Severance dated 30 September 1998, whereby YF gave notice to PY that the joint tenancy between them in the Property was severed to the intent that they should hold the Property as tenants in common in equal shares. On the same day, YF executed a Deed of Gift and assigned his half share of the Property to the Defendant. There is also a will of YF in Chinese writing dated 10 October 1998 whereby YF stated that he and PY were holding the Property in equal shares and when he passed away, his half share of the Property should be passed to the Defendant and their daughter.

4. The Plaintiff, however, claims that the purchase money and the mortgage repayments for the Property were paid out of her own money, and hence YF and PY were just holding the Property on trust for her. Thus, by this action, the Plaintiff is seeking for the following reliefs:-

(1) A declaration that the Notice of Severance and the Deed of Gift executed by YF are null and void and of no effect;

(2) A declaration that the half share of the Property which is registered in the name of the Defendant is held by the Defendant on trust for the Plaintiff;

(3) An order that the Defendant shall deliver all the title deeds and documents of the Property to the Plaintiff;

(4) An order that the Defendant do execute and deliver to the Plaintiff a transfer of the half share in the Property into the name of the Plaintiff;

(5) Further or alternatively, an order that the Property be sold and the proceeds therefrom be distributed to the Plaintiff;

(6) Further or other relief; and

(7) Costs.

The Plaintiff's case

5. Two witnesses were called for the Plaintiff at the trial, namely PY and one Madam YIP CHOU YING ("Yip"). The Plaintiff herself did not give oral evidence at the trial because of her health conditions, but her Affirmation in Chinese writing made on 14 July 2001 was produced as part of the evidence. Yip was the interpreter who interpreted the Affirmation to the Plaintiff in Hakka dialect. Yip testified that she had properly interpreted the contents of the Affirmation to the Plaintiff and the Plaintiff confirmed her agreement with the contents. PY's evidence also confirmed most of the contents of the Plaintiff's Affirmation.

6. According to the Plaintiff and PY's evidence, the source of the purchase money for the Property came from the sale of the Plaintiff's Indonesian property at Jalan Kartini, 7A, No. 16 Jakarta Pusat, Indonesia ("the Indonesian Property"). The Plaintiff sold the Indonesian Property in or about the beginning of 1982 for about HK$270,000.00. In the same year, she took HK$100,000.00 in cash to Hong Kong and started to reside here. She left the remaining savings of about HK$200,000.00 to CY and CY's husband, TONY SUGIANTO DJAUHARI ("Tony") in Indonesia. CY and Tony were to keep the money as trustees for the Plaintiff.

7. When the Plaintiff started to reside in Hong Kong, she decided to buy a flat for her, YF and PY to stay. YF and PY were then already residing in Hong Kong and they shared a rented room, which was too small to accommodate three of them on a permanent basis. Thus, the Property was purchased. Originally the Property was purchased in the names of the Plaintiff, YF and PY as joint tenants. This can be confirmed by the Agreement for Sale and Purchase dated 12 April 1983. However, a staff of the solicitors firm, Messrs. Cheung, Chan & Chung, explained to her that as she was then over 60 years of age, she could not execute the title deed alone. The Plaintiff was advised that she should consider having only YF and PY as the registered owners and joint tenants for the Property. YF and PY then promised in front of the Plaintiff that they would not cast her off or usurp her title to the Property. PY also testified that the bank refused to grant the Plaintiff a loan because of her old age. As a result, the Plaintiff signed a Nomination on 31 May 1983 to nominate YF and PY as the purchasers and joint tenants in the assignment. Thus, the assignment on 7 July 1983 only conveyed the Property to YF and PY as joint tenants without the Plaintiff.

8. Nevertheless, the Plaintiff and PY testified that the Plaintiff did not have any intention to give the Property to YF and PY as a gift. The initial deposit of HK$10,000.00 was paid by the Plaintiff in cash and a further part payment of HK$60,000.00 was paid by the Plaintiff by way of a cashier order issued to the solicitors, Messrs. Johnson, Stokes & Masters. A mortgage loan of HK$100,000.00 was obtained from The Hongkong and Shanghai Banking Corporation Limited to pay the balance purchase price. The Plaintiff then used the interest earned from the money entrusted to CY and Tony to pay for the mortgage repayments. PY testified in court that the interest rate in Indonesia was much higher than that in Hong Kong and hence the Plaintiff was prepared to entrust the money to CY and Tony to earn interest in Indonesia. Tony remitted the interest into YF's bank account in Hong Kong and the same account was used to repay the mortgage loan. If there were insufficient money in the account, YF and PY would contribute towards the mortgage repayments. YF and PY had together contributed about HK$30,000.00 in total, but they had no intention to claim any interest in the Property when making these contributions. The mortgage was fully discharged on 20 July 1995.

9. Thus, the Plaintiff's case is that she was the beneficial owner of the Property as she was the person who financed the purchase of the Property.

The Defendant's case

10. According to the Defence, the Defendant's case is that the Plaintiff did not pay for the purchase money. Most of the purchase money came from Tony. Apart from being CY's husband, Tony is also a cousin of the Defendant's mother. So Tony purchased the Property as a gift to YF and PY out of his love towards CY and his care towards CY's maiden family. Thus, the Property belonged to YF and PY beneficially as joint tenants before YF executed the Notice of Severance and transferred his half share of the Property to the Defendant. The Plaintiff has no title, interest or share in the Property at all.

11. Hence, the pleaded case of the Defendant is simply that the Property was purchased with the money from Tony rather than the Plaintiff. However, in the closing submission, Mr. Tang for the Defendant submitted an alternative case that if the Plaintiff did advance part or all of the purchase money, the presumption of resulting trust could be rebutted by the facts of the Defendant's case. Mr. Tang submitted that the mother-son relationship between the Plaintiff and YF gave rise to the presumption of advancement and the Plaintiff did intend to benefit her son and daughter.

12. It is trite law that a party is bound by his pleadings. All the material facts and issues should be clearly set out and particularized in the pleadings. The court is to adjudicate on the issues disclosed in the pleadings and no party should be taken by surprise with issues that have not been pleaded. The alternative case submitted by Mr. Tang was not pleaded in the Defence at all. The Defendant cannot simply make submission of the alternative case without pleading the same. I will not therefore deal with the alternative case as submitted by Mr. Tang.

13. The Defendant gave oral evidence at the trial. She testified that the initial payment of HK$70,000.00 and the subsequent mortgage repayments were mostly contributed by Tony. Tony would either remit the money to Hong Kong through banks or bring the money back by himself or his friends. If Tony did not send the money to Hong Kong on time, YF and PY would make up the difference, but their contributions were not of large sums. Each time YF received the money from Tony, YF would record the receipt of the money in a diary, i.e. exhibit "D2". On some occasions, the Defendant was asked by YF to make the records on his behalf. The money was deposited into YF's bank account and the same account was used to repay the mortgage loan. The Defendant did not know that YF and PY were holding the Property on trust for the Plaintiff, and when she visited the Plaintiff at the elderly care home and hospital, the Plaintiff seemed to be unaware of the present litigation at all.

14. The Defendant had two witnesses, i.e. Tony and CY, but they were not called to give oral evidence at the trial on the ground that they were presently residing in Australia. Their witness statements were however produced as part of the evidence for the Defendant. According to Tony and CY's witness statements, the Indonesian Property in fact belonged to CY as it was given to her by her father, the late HIOE JAW TJEW (the Plaintiff's husband), as a gift. They produced a Deed of Gift in Indonesian language dated 18 May 1966, i.e. exhibit "D1", to prove that the Indonesian Property was given by the Plaintiff to CY as a gift in the presence of the father. They also testified that the Plaintiff was a housewife and she did not have the money to purchase the Indonesian Property. The Indonesian Property was purchased with the money from the father, who was then a successful businessman, but registered in the Plaintiff's name. It was also alleged that three days before the father passed away on 24 November 1970 and in front of a few relatives, the father orally declared that he would transfer the Indonesian Property into Tony's name. However, since the Indonesian Property was already in his wife's name, Tony did not request CY to transfer the Indonesian Property to him. Thus, the Plaintiff never beneficially owned the Indonesian Property. The Property was purchased with the money from the sale of the Indonesian Property and Tony's savings to provide accommodation for the Plaintiff, YF and PY in Hong Kong.

The issues

15. The matters in dispute are:-

(a) Whether the Plaintiff beneficially owned the Indonesian Property;

(b) The authenticity and legal implication of the Deed of Gift;

(c) Whether the purchase price and the mortgage repayments were paid by the Plaintiff or by Tony; and

(d) Whether there is a resulting trust in favour of the Plaintiff.

The Indonesian Property

16. The Plaintiff testified in her Affirmation that the Indonesian Property belonged to her and she sold it for about HK$270,000.00. As the Plaintiff could not give oral evidence at the trial, she could not elaborate the matter further. PY did not have much personal knowledge about the ownership of the Indonesian Property. She however admitted that the father was the breadwinner while the Plaintiff was a housewife, and the purchase money for the Indonesian Property came from the father. The father and the Plaintiff were in good relationship and they were just in different roles in the family. So it is not surprising that the Indonesian Property was registered only in her name. Even though the Plaintiff did not pay any money for the Indonesian Property, it does not mean that she had no beneficial interest in the Indonesian Property. In 1981, PY learned from the Plaintiff that she wanted to sell the Indonesian Property and then buy another property in Hong Kong. The Plaintiff also mentioned to her that the Indonesian Property was transferred to CY because of the policy in Indonesia and CY was the only person in the family having Indonesian nationality, but the Plaintiff believed that the Indonesian Property belonged to her all along. According to what PY knew, the Plaintiff had to sign some documents to give effect to the sale of the Indonesian Property.

17. PY also testified that when CY married Tony in 1967, they moved out from the Indonesian Property and lived in a rented unit. The Plaintiff continued to live in the Indonesian property and even borrowed money to build another storey on top of the Indonesian Property in order to rent out the same to earn a living. The Indonesian Property was the sole property of the family. So it was impossible that the Plaintiff would give the Indonesian Property to CY as a gift.

18. Although the Plaintiff's evidence by way of an Affirmation without giving oral evidence might not be perfect by itself, and as pointed out by Mr. Tang, the way that Yip interpreted the contents to the Plaintiff and the mistake made by the Plaintiff about the year of death of her husband do cast doubts on the reliability of the Affirmation, I am of the view that the Plaintiff would not have mistaken about her ownership of the Indonesian Property. The undisputed fact is that the Indonesian Property was the sole property of the family. There was no reason at all for either the father or the Plaintiff to give it to CY as an outright gift in 1966 while they still required the same to live in. It is unbelievable that CY and Tony had to move out from the Indonesian Property and rented a unit when CY was the rightful owner. If CY had already become the rightful owner of the Indonesian Property, it is very strange that the father had to declare the transfer of the Indonesian Property to Tony shortly before he died. I think the Defendant's case in this aspect does not make any sense at all.

19. Even if I were to ignore the Plaintiff's evidence in the Affirmation entirely, there is still the evidence of PY, which supports the Plaintiff's case, and I find it to be more credible than the Defendant's case. The Defendant herself did not have any personal knowledge about the Indonesian Property and she had to rely on the evidence of CY and Tony. However, both CY and Tony chose not to come to Hong Kong to give oral evidence. I find it very strange that they were unable to come to Hong Kong to give evidence. They were both well off and retired persons. Unlike the Plaintiff, who was prevented from giving evidence because of her health, CY and Tony should have no problem in attending court at all. As a result of their non-attendance, their evidence had not been tested on cross-examination, and I would place no weight on their evidence.

20. Moreover, in his witness statement dated 26 September 2001, Tony alleged that in 1962 the father complied with the Indonesian law and transferred the Indonesian Property to CY and that the Plaintiff never owned the Indonesian Property, but he corrected himself in his subsequent witness statement dated 25 March 2003 by admitting that the Indonesian Property was registered in the Plaintiff's name, after the Deed of Gift was located from his home. This shows that Tony's evidence in respect of the ownership of the Indonesian Property is not reliable too. Thus, I accept that the Plaintiff was the beneficial owner of the Indonesian Property.

The Deed of Gift

21. The authenticity of the Deed of Gift is challenged as it was produced by the Defendant shortly before trial, after it was allegedly found in Tony's home. It is not clear if the Deed of Gift produced is the original or a copy, as it bears no signatures of the parties except that of the Notary. Tony or CY did not explain how and why this Deed was kept at their home. If it was the original, it is surprising that it still remains in the possession of CY or Tony, and was not passed to the purchaser of the Indonesian Property. If it was just a copy, there is no proof that the original was properly executed. The Defendant herself knew nothing about the Deed. So her evidence cannot prove the existence of the Deed.

22. I appreciate that PY had admitted that she heard from the Plaintiff that the Indonesian Property was transferred to CY, but that is only hearsay. In fact, PY stated that she was not aware of the form or procedure of the transfer. So PY's evidence cannot really support the existence of the Deed of Gift. The burden is on the Defendant to prove the authenticity of this document. In the absence of further evidence, I find the Defendant failed to discharge the burden.

23. Leaving aside the authenticity of the Deed of Gift, it is also not clear about the legal effect of its existence. The Deed of Gift involved Indonesian landed property. The governing law should be Indonesian law. The issue of foreign law therefore arose. Where any issue of foreign law arises before an English court, in which it is required to adjudicate upon the effect of the foreign law, there is a general rule that it must be proved upon evidence as a fact (see Expert Evidence: Law and Practice by Tristram Hodgkinson at p. 294 and Concha v. Murrieta [1889] 40 Ch.D. 543).

24. The Defendant did not call any expert to give evidence on the Indonesian law. I do not have any evidence to support any finding in relation to the legal effect of the Deed of Gift in terms of the Indonesian law. I accept that if the issue of foreign law arises, and where the foreign law cannot be ascertained, it must be taken to be the same as the English law, or in our context, the Hong Kong law: The Owners of Cargo Lately Laden On Board The Ship "Dong Do" [1992] 242 HKCU 1). Mr. Tang relied on the doctrine that ancient documents over 20 years retrieved from proper custody prove themselves: Halsbury's Laws of Hong Kong at 175.126. However, there is no proof of proper custody in our present case. The Deed was allegedly kept in CY and Tony's home, but they can hardly be said to be the proper person who would keep the Deed. There is even no evidence on how and why they kept the Deed. Since they did not come to court to give evidence, I will totally reject their evidence in this regard.

25. In the circumstances, I do not find that the Defendant has satisfied me that the Deed of Gift was authentic. I also do not find that it could have the legal effect of establishing the Indonesian Property being given by the Plaintiff to CY as a gift.

Payment by the Plaintiff or Tony

26. PY was present when the Property was purchased and payments of the purchase price were made. She testified that the Plaintiff made the payments with her money. The Defendant was not present, so she cannot really testify in this regard. Again, the Defendant has to rely on the evidence of Tony and CY, but they did not testify in court. Without making themselves available for cross-examination, I will not accept their evidence on how the payments were made by Tony and I attach no weight on their witness statements.

27. Moreover, in the diary compiled by YF, it was recorded as follows:-

“母年老了,銀行不允許母簽字，只能由我和寶英的名簽字。”

28. This can show that but for the bank's attitude in refusing the Plaintiff to sign on legal documents, the Plaintiff would have her name in the Property. This clearly confirms the Plaintiff's case.

29. There is no dispute that the source (or part of the source) of the purchase money came from the sale of the Indonesian Property. As I have already found that the Indonesian Property was owned by the Plaintiff and the Defendant failed to establish the alleged Deed of Gift, the purchase money must have come from the Plaintiff.

30. The monthly mortgage repayment was around HK$1,500.00. It is not in dispute that the instalment payments were from money sent by Tony. The question is whether it was Tony's savings or the Plaintiff's money entrusted to Tony and CY. YF's diary has the following significant entries:-

(a) 1982.10.15日放進 (Bundle B, p.65).

(b) 1/4饒綬權來港帶1萬5千利息，即2,3,4,6 (Bundle B, p.65).

(c) 饒綬權欠1,000 (Bundle B, p.65).

(d) 1/8/83饒綬權寄來共4,500.00元，是7,8,9月的利息 (Bundle B, p.68).

(e) 30/1/84 - 30/3/84母在印尼寄來4,000.00元 (Bundle B, p.68).

(f) 84年4,5,6,7,8,9,10月母在印尼自己用（母84年10月12日來港）(Bundle B, p.68).

(g) 婷雯21/12/86帶回母利息8,9,10,11,12月共HK$4,700.00 (Bundle B, p.69).

(h) 吳玉坤26/5/87帶8千，5千利息1,2,3,4,5月，87年，2千津貼生活費，1千定買錄音頭 (Bundle B, p.69).

(i) 22/11/88由匯豐銀行打卡出5,600.00元（6,7,8,9,10,11月87年；每月利息933.33） (Bundle B, p.69).

(j) 25/5/88 亞雯由椰城帶來利息，12月87年925元 (Bundle B, p.69).

(k) 5/8/88 綬權來港帶利錢5,600.00元，由88年1,2,3,4,5,6月 (Bundle B, p.69).

(l) 註：綬權寄71,000.00，拿去65,010元，餘下5,990元 + 綬權欠1,000.00母的錢(Bundle B, p.73).

(m) 母錢總錢7,000.00 + 7,500.00 = 14,500元 (Bundle B, p.73).

(n)	取出10條 -- 港元71,428.57
	餘下10條 -- 港元71,428.57
	月息20萬 -- 港元1,428.57 (Bundle B, p.75).

31. The references in these entries show that the money sent by Tony were interests and they were owed to the mother, i.e. the Plaintiff. These entries clearly confirm the Plaintiff's case. Mr. Tang for the Defendant cannot offer any explanation on these entries. It is clear to me that if the money were Tony's money, YF would not have recorded the entries in these wordings. The witness statements were mutually exchanged on 16 October 2001. In other words, when PY made her witness statement on 16 October 2001, she did not know about the diary kept by YF. So the Plaintiff would not have made up the story by reference to the diary. I am convinced that the Plaintiff's case is more probable than the Defendant's case.

32. It was alleged by Tony that the sale price of the Indonesian Property was around HK$100,000.00. The money was not sufficient to pay the purchase price of the Property. Therefore, he used his own savings to assist YF and PY to purchase the Property. Mr. Tang for the Defendant tried to take issue on the amount of the sale price of the Indonesian Property. He referred to an entry in the diary (Bundle C, p.136) wherein YF made a calculation of the monthly mortgage repayments for a "new flat". The sale price of that flat was HK$288,400.00 and the interest as calculated by YF was HK$1,513.07. Mr. Tang also pointed to a sum of HK$133,333.00 recorded as "principal" to argue that the sale price should be such an amount. However, there was no evidence at all from the Defendant to show that YF was referring to the whole sum of the sale price. It may well be the case that he was referring to only part of the money. The most it can say is that the sale price should be at least HK$133,333.00.

33. In any event, what was the actual sale price of the Indonesian Property is not important. The most important point in this case is that the mortgage repayments came from the interests generated from a sum of money in Indonesia and that sum belongs to whom. It appears that the whole purpose for YF to make the calculation was to ascertain the amount of monthly interest generated in Indonesia. The currency he used for the calculation was in Indonesian currency. He was estimating whether the amount of interest was sufficient to repay the mortgage loan of the Property. I find that YF had recorded down in the diary the interests generated in Indonesia and the dates on which and the manners by which such interests were brought to Hong Kong, and that if Tony had used his savings to finance the purchase the Property, YF would not have stated the term "interest" in the diary. The Defendant's case simply cannot hold any truth in view of these entries.

34. Moreover, if Tony really paid for the purchase price, he could have paid it in full. The Defendant did not explain why Tony merely sent a couple thousands of dollars to Hong Kong from time to time to repay the mortgage loan over a period of 12 years. The amounts sent also did not match the amounts of the mortgage repayments. The Defendant's version is simply unbelievable.

35. I accept the PY's evidence that her relationship with CY was not good. In the witness statement of CY, she did not say anything about her affection to PY. Even if Tony or CY wanted to buy a flat for her maiden family, it should be in the name of the Plaintiff. There was no reason why they bought the Property and put it in the joint names of YF and PY. This does not make any sense at all.

36. I also accept that Tony and CY were not generous people as they claimed to be. The Plaintiff is now 93 years old living at an elderly care home. She had to rely on comprehensive assistance. According to the evidence of the Defendant, Tony is well off and was successful in his business. Why would they leave their aged parent in an elderly care home surviving only on the comprehensive assistance? It is totally contradictory to their claim that they bought the Property out of love and care to their family.

37. In the circumstances, I find that the purchase money for the Property came from the Plaintiff rather than Tony.

Resulting Trust

38. When real or personal property is conveyed to a purchaser jointly with others, or to one or more persons other than the purchaser, a resulting trust will be presumed in favour of the person who is proved (by oral or other evidence) to have paid the purchase-money in the character of purchaser (as opposed to that of donor or lender) (see Law Relating to Trusts and Trustees, Underhill and Hayton, 15th ed., at p. 317 to 321; Lewin on Trusts, 17th ed., para. 9-03 to para. 9-08; and Resulting Trust, Robert Chambers, at p. 32 to p. 35).

39. The Defendant did not plead the defence of presumption of advancement. As aforesaid, this cannot be an issue in this case. The pleaded case of the Defendant is that the purchase money came from Tony, which I have already found against the Defendant. The Defendant also tried to suggest that the Plaintiff did not intend to have the litigation, but again this matter was not pleaded and should not be dealt with. I therefore find that the Defendant has not rebutted the presumption of resulting trust.

Conclusion

40. Since the Plaintiff has proved her case, she is entitled to the reliefs sought. Mr. Ng for the Plaintiff submitted that as the Property has been solely occupied and enjoyed by the Defendant and the Plaintiff has moved to an elderly care home in 1998, it is unrealistic to expect the Plaintiff to go back to the Property. The best way to resolve the matter would be by selling the Property. The sale of the property is one of the reliefs claimed by the Plaintiff, and the District Court has the power to order for sale of a property (see District Court Ordinance, Cap. 336, s. 37 and High Court Ordinance Cap. 4, s. 21D and 25A).

41. I do not agree with Mr. Ng on the sale of the Property. First of all, the sale of the Property was pleaded as an alternative relief and it is not clear whether the Plaintiff's present intention is really to sell the Property. In view of her health conditions, it is doubtful whether she can execute any documents for the sale of the Property or give valid receipt to the Purchaser. PY is not a party to this action and the half share of the Property held by her does not form the subject matter of the present proceedings. I do not think that it is appropriate to grant an order for sale at this stage. I will therefore only grant orders in terms of prayers (1) to (4) as stated in the Statement of Claim.

42. As to costs, I shall grant costs order nisi as follows:-

(1) Unless there are previous costs orders, the Defendant do pay the costs of this action including all costs reserved to the Plaintiff, to be taxed if not agreed;

(2) The Plaintiff and the Defendant's own costs be taxed in accordance with the Legal Aid Regulations; and

(3) If there is no further application on costs within the next 14 days, the costs order nisi herein shall become absolute.