POON TING CHAU AND ANOTHER v. WONG KWOK CHI

HCMP5314/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO.5314 OF 2002

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J U D G M E N T

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1. I have before me an application by the 2^nd plaintiff to cease to be a party, namely as the 2^nd plaintiff, on the ground of certain irregularities in relation to the Power of Attorney and in relation to her mis-joinder as a 2^nd plaintiff.  I have also before me an application for the directions as to the further progress of this proceeding.

2. This proceeding had been brought in relation to a property which was registered in the name of the defendant and, according to the 1^st plaintiff, all the money for the purchase of property was paid by the 1^st plaintiff.  The relationship between the 1^st plaintiff, the 2^nd plaintiff and the defendant is as follows : the 2^nd plaintiff is a common-law wife of the 1^st plaintiff; the defendant is married to the elder sister of the 2^nd plaintiff.  Therefore, the defendant is the brother-in-law of the 1^st plaintiff.

3. The case of the 1^st plaintiff is that the property, having been purchased with his money, is really held on resulting trust by the defendant in favour of the 1^st plaintiff.  As I understand it, there is a defence by the defendant that the property, although admittedly not purchased with the money of the defendant, was a gift to the defendant by the 1^st and 2^nd plaintiffs.  The 1^st plaintiff said that if that was a gift which he did not admit, it was procured by the fraud or misrepresentation by the 2^nd plaintiff, his common-law wife, and by the defendant and his wife.

4. The questions, therefore, raised by the 1^st plaintiff were simple.  First, as to whether in law there was a resulting trust in favour of the 1^st plaintiff or possibly in favour of both the 1^st plaintiff and his common-law wife (if it could be established, that the common-law wife also made financial contribution towards the purchase of the property).  The second question is, even assuming there was a valid gift, whether that gift should be set aside by reason of the fraud or misrepresentation or inequitable conduct on the part of the common-law wife and her sister, and her sister’s husband. 

5. In the light of those two questions which really should be determined by the court, it seems to me and I have expressed the clear view to the parties, that the proper way to proceed is for the 2^nd plaintiff to cease to be a co-plaintiff but instead she should become a 2^nd defendant, so that the finding by the court in this action by the 1^st plaintiff against the defendant and the 2^nd plaintiff, his common-law wife (as 2^nd defendant), would be binding on all three parties.  This is obviously important so that there can be finality in this dispute between the three parties.  This is even more so because the reality is, as I understand it, is that the common-law wife is helping the defendant and is not helping the 1^st plaintiff.  If she was not helping the 1^st plaintiff and she is not really on the 1^st plaintiff’s side, then she should not be the 2^nd plaintiff, and she should properly be the 2^nd defendant.

6. Everyone before me agrees that the 2^nd plaintiff should cease to be the 2^nd plaintiff.  However, the common-law wife, i.e. Agnes Yam, and the defendant both said they would leave it to the court to decide whether Agnes Yam should be joined as the 2^nd defendant.  In the light of my view previously expressed, it is essential that Agnes Yam be a party to the proceedings as the 2^nd defendant, so that she can also be bound by the determination of the court and on all the matters arising out of this dispute.  I therefore order, pursuant to Order 15, rule 6, paragraphs 2(a) and (b), that the 2^nd plaintiff shall cease to be a party as the 2^nd plaintiff but should be joined as a 2^nd defendant.  This is the order I make and I will now proceed to hear the parties as to the further directions of this case arising out of my aforesaid judgment.

7. Subsequent to the delivery of my earlier oral judgment, Mr Lee for the 2^nd plaintiff has helpfully pointed out to the court that there is in existence a 3^rd affirmation of the defendant filed on 20 January 2004 where, in paragraph 2, the defendant alleged that all the costs, expenses and disbursements in connection with the purchase of the property were not funded by the 1^st and/or the 2^nd plaintiff but, in paragraph 3, he said he had paid the whole purchase price including the mortgage of the subject matter.  This being the case, all it means is there is a third question to be added to the two questions that I have indicated earlier in my oral judgment.  That is, whether in fact the defendant made contribution or how much contribution to the purchase of the property.  I am grateful to Mr Lee for pointing this out.  I am surprised that Mr Lam for the defendant has misled me.  But in the circumstances, this has not changed in any way the decision or the reasons I have given and, although it has added a new dimension to the case and makes the case more complicated, it is even more important that Agnes Yam must be added because it may well be that, on the investigation at the trial it could turn out to be that the contribution made was for example 90% by the 1^st plaintiff, 8% by Agnes Yam and 2% by the defendant, in which case, there might be a declaration to that effect : Property is owned beneficially as to 90% by the 1^st plaintiff, 8% by Agnes Yam and 2% by the defendant.

8. So far as costs of the application is concerned, it seems to me that having regard to the order that I made, the costs should follow the event of the Action.  It is costs in the cause, so that in the event the trial goes in favour of whichever party, then that party should have the costs of today.