NG MOU WAI v. MAK POI WAN

DCCJ 13020/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13020 OF 2001

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HCA 15210/1999

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JUDGMENT

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1. The Defendant is the registered owner of the premises situate at Flat B, 9th Floor, Yuk Sing Building, No. 21 Yu King Square, Yuen Long, New Territories, Hong Kong ("the Property"). The Plaintiff seeks, inter alia, a declaration that he is the beneficial owner of the Property. The Defendant disputes the claim and further counterclaims possession of the Property against the Plaintiff. For reference, I shall call Mr. Ng Mou Wai the Plaintiff in the consolidated action and Ms. Mak Poi Won the Defendant in the consolidated action.

2. It is not disputed that the property was registered in the name of the Defendant. The Plaintiff's case is that he put up the purchase money for the Property. There is no evidence or any contention by the Plaintiff for any expressed agreement between the Plaintiff and the Defendant as to who shall have the beneficial interest of the Property. The starting point for the Plaintiff is to establish that he had paid for the purchase price and/or installment payment for the Property.

3. Counsel for the Plaintiff submitted in his written opening that if the Plaintiff could establish that:-

a. The initial deposit, further payment and other miscellaneous expenses for the purchase of the Property were paid by the money of the Plaintiff;

b. The mortgage installments under the 1st Mortgage were paid by the money of the Plaintiff; and

c. The Plaintiff did not intend to make a gift of the Property to the Defendant during his lifetime

Then the Defendant must be holding the Property in resulting trust for the Plaintiff and I should grant the declaration in favour of the Plaintiff.

4. And in the closing submission, the Plaintiff's counsel further relied upon an oral undertaking given to Wing Lung Bank Ltd. in respect of the 1st Mortgage that there is an understanding between the Plaintiff and the Defendant that the Plaintiff would pay for the purchase price. But this has never been pleaded. The Plaintiff is not entitled to rely on this ground.

5. The Plaintiff gave evidence and said that in 1976, he came to know the Defendant when working in Kei Yip Garment Factory. After knowing each other, they built up a courtship. Since the Plaintiff was married by then, he did not legal marry the Defendant. In 1980, the Defendant held a wedding ceremony according to Chinese marriage custom. According to undisputed evidence, the charges for the dinner were paid by the Defendant. The Plaintiff said he had in November 1979 paid "禮金" of $20,000 to the Defendant.

6. After the ceremony, the Plaintiff and the Defendant lived together as husband and wife in a rented premises at Yuen Long district. On 16th September 1982, the Defendant gave birth to their son, Ng Hon Kwan.

7. After the birth of Hong Kwan, the Plaintiff said he wanted to have a stable place of residence for the family. He looked around in Yuen Long district and intended to buy the Property. He had brought the Defendant to see the Property who said she liked it and asked him to buy it for her, "叫我買比佢".

8. On 10th October 1984, the Plaintiff said he went to the sale office of the developer Sang Tai Investment Limited to pay a deposit. He explained in his oral evidence that he went to the office of one Hoi Fat Land Investment Co. at Yuen Long district, which was the authorized agent of the developer. He paid an initial deposit of $10,000 by his cheque no.24669 drawn from his account with Wing Lung Bank. The staff asked him for the name of the owner of the Property. As he intended the Defendant to be the named owner of the Property, he put down the Defendant's name on this receipt as the payee. The copy receipt appears at p.203 of the bundle shows that the name of the Plaintiff was also written down as the buyer.

9. The Plaintiff said in his statement that he could not locate the said cheque (no.24669) or the stub thereof. He produced a cheque book for cheque no.23476 to 23500. It is his evidence that the said cheque 24669 was given to him for use by the Bank after he got the said cheque book. But in cross examination, it is noted that a cheque no.23493 was dated 6th February 1987. He could not explain how he could use the cheque 24669 in 1984.

10. On completion, the parties did not have sufficient money to pay off the purchase price. The Property was mortgaged to Wing Lung Bank Limited ("the 1st Mortgage") and the Defendant is the sole mortgagor and borrower. The Plaintiff is not a borrower or guarantor. The Plaintiff said he went with the Defendant to meet the staff of the Bank for applying a loan. The staff questioned the Defendant how she could pay the installments. The Plaintiff told the staff that he would pay the installments. But the Bank did not ask him to act as guarantor for the Defendant.

11. The Plaintiff also said he paid for all the legal expenses for the assignment and 1st Mortgage, all utility deposit and charges for the Property. He also paid for all the Fire Insurance Policy for the Property. He produced the relevant receipts.

12. The Plaintiff said he paid the installments for the Property until the Defendant re-mortgaged the Property in September 1988 without his consent. He only came to know about it when he went to pay the installment at the Bank. After being confirmed of the situation, he shouldered some of its repayments until the Property was discharged on 27th March 1995. It is conceded by his Counsel in the summing up that the Plaintiff did not pay for all the installments of the Property. But he would rely on the oral undertaking he gave to the Wing Lung Bank to prove his full entitlement to the beneficial interest of the Property.

13. On the payment of the installments, the Plaintiff produced a bundle of receipts, p.223 to 316, and p.349 to 363. The Plaintiff said he came to possess these documents because he paid for these installments for the Defendant.

14. These receipts are all issued in favour of the Defendant. Except for 3 installments, the rest are paid by cash. In respect of the payment for the installments of the 2nd Mortgage, the Plaintiff said in his evidence in chief that he paid them by cash. At cross examination, he agreed that p.349 to 363 recorded a payment by transfer of fund from the Defendant's saving account into the loan account. The Plaintiff then explained that he had paid into the Defendant's account for transfer into the loan account. But none of the pay-in slip for the Defendant's account has been produced.

15. The Plaintiff said he was gainfully employed. To be more specific he was a sub-contractor earning over $7,500. He said that in 1976, the Defendant and her 2 sisters were working for him. But except for some name cards, there is no documentary proof being produced, in particular no tax returns and bank books are produced. But surely, even if the Plaintiff is gainfully employed, what is important is who paid for the installments for the Property.

16. The Plaintiff also said he had paid money or maintenance to the Plaintiff and Hon Kwan after they left for USA. It is not disputed that the Plaintiff and/or Hon Kwan did receive money from the Plaintiff.

17. Beside the abovementioned receipts, the Plaintiff did not produce any other evidence from his bank, such as bankbook and monthly statement to show where he got the money for paying the installments.

18. The Plaintiff did not call any other witness.

19. The Defendant also gave evidence. She said she came to know the Plaintiff in 1975 when she was working in Kee Yip Garment Factory. In or about 1981, the Defendant and the Plaintiff started co-habiting and rented a village house in Yuen Long. The Defendant's mother held and paid for a wedding feast. She denies that the Plaintiff had paid her $20,000 as "禮金".

20. After co-habiting, the Defendant said the Plaintiff relied on her earnings to pay all the living expenses. She was pregnant in 1982 and in mid 1982, she had to quit her job. But she continued to work on garment at home. She then returned to live with her mother as the Defendant had lower back pain. She kept working at home until a week before the birth of Hon Kwan. She returned to work after giving birth to Hon Kwan.

21. In about 1984, the Plaintiff and the Defendant were living at a rented apartment at Ka Ho Building in Yuen Long, near the Property. She asked the Plaintiff to enquire whether the Property was available for sale. She said that she had to work long hours. As the Plaintiff was not working, he was free to do such enquiry. She attended the Property for an inspection and she paid a holding deposit of $500 to the caretaker. Later, after obtaining some loan from her sister DW2, she gave $10,000 to the Plaintiff to arrange payment of the initial deposit. She asked the Plaintiff to buy a cashier order to pay the initial deposit. She was concerned that the Plaintiff's current account is messy and his cheques were bounced. She did not want the money to be cashed for other purpose. When cross examined why she still trusted the Plaintiff when his finance position is messy, she said they were in good relationship and she wanted him to handle it for her.

22. It is the Defendant's case that she paid for all the installments and household expenses of the Property. She was engaged as a contractor working in more than one factory. She said she had proved her income proof to Wing Lung Bank before she got the loan under the 1st Mortgage. She denies that the Plaintiff had given any oral undertaking to the Bank. As the Plaintiff was staying at home most of the time, she gave him the money to pay the monthly installments on her behalf.

23. The Defendant started her own business and in September 1988, she re-mortgaged the Property to Nanyang Commercial Bank Ltd. to obtain a loan of $230,000 ("the 2nd Mortgage"). After paying off the 1st Mortgage, the Defendant used the balance to start her own business, Hung Yuen Garment Factory, with some of her friends.

24. The relationship between the Plaintiff and the Defendant deteriorated in 1990. On one occasion, the Plaintiff slapped the Defendant in her office. The Defendant left the Property. She left the son to be taken care of by the Plaintiff, as he was not working. Between 1990 and 1996, she left the son with the Plaintiff and would return to the Property when the Plaintiff was not there to see the son.

25. In 1995/96, Hon Kwan moved to live with her. She had requested the Plaintiff to leave the Property, and he refused. The Plaintiff said he would pay her $3,000 to make up the Defendant having to rent somewhere else to live with their son. It is her pleaded case that she let the Plaintiff to stay on as a licensee. But the Plaintiff was late in making payment, and eventually stopped paying altogether in about 1997. In 1998, the Defendant migrated to USA with her son.

26. Before the action, the Defendant had orally demanded the Plaintiff to leave the Property and her solicitor had issued notice to the Plaintiff. But the Plaintiff still remains in wrongful occupation of the Property.

27. There are 2 other witnesses for the Defendant whose evidence is not directly on the issue. I would refer to their evidence hereinafter when necessary.

28. As such, the case of the Plaintiff turns heavily on the credibility of his evidence.

29. While the Plaintiff claimed that he paid for all these installments, except for the first three monthly installments and initial deposit, the payment were all made by cash. It is not disputed that the Plaintiff has a chequeing account. And there is no explanation why he chose to use cash in payment. And he explained that he paid the deposit by his cheque 24669. But on cross examination, it is shown that this cheque could not be issued before 1987. His allegation that he paid the deposit by this cheque could not be right.

30. It has always been the case of the Plaintiff that, as evidence of his payment for the installment, he kept all the receipts from the bank. The receipts he kept included payment under the 1st and 2nd Mortgages. A closer look at the so-call receipt under the 2nd Mortgage would show that these are confirmation of transfer by the bank. When being cross-examined, it was only at the cross-examination when the Plaintiff then said he paid the money into the account of the Defendant for transfer to satisfy the installment payment. This has never been disclosed in any of his witness statement. And what is more important, there is no record of his payment to the Defendant's account.

31. If the Plaintiff were a careful man who kept all these documentation to protect his own interest or at least to keep a proper record, I would expect he had kept the pay-in slip as well. Not one single pay-in slip had been produced. By keeping this confirmation of transfer, they would not be evidence of his payment but rather assist the Defendant by confirming that these installments were paid from her saving account.

32. For the cash payment for the installments under the 1st Mortgage, there should be pay-in slip. None of these had been produced. No explanation had been offered by the Plaintiff why he did not keep these pay-in slip.

33. The ability to pay for the monthly installment was an issue raised by both sides at the very beginning of the whole case. The Plaintiff had not produced any bank document or tax return or any employment letter to support his case that he was gainfully employed. He claimed himself to be a sub-contractor in a number of factory earning at the relevant time $7,500 net per month. That would be a handsome income and must be liable to tax. I have seen no tax return or tax demand note produced to show the income of the Plaintiff.

34. There are various aspects that have been submitted by the defence counsel on the credibility of the Plaintiff. I don't wish to repeat that but I just wish to say I agree with her observation on the demeanor of the Plaintiff. In conclusion, I find that he is totally unreliable.

35. The Defendant said that she was at the material time working as a sub-contractor in the factory. She used to pay her workers by cash. Hence she also gave cash to the Plaintiff for payment of the monthly installment.

36. I also observe the demeanor of the Defendant. There was a lot of complain by the Plaintiff's counsel against the Defendant on her discrepancy between her 1st and 2nd witnesses statements.

37. It is mentioned in her 1st statement that she paid an initial deposit of $500. This is subsequently rectified to mean a holding deposit pay to the caretaker. Counsel submitted that it is not reliable and she is just making up her story when she found that she had made a mistake. I have consider the point and I do not find that she is trying to make up her story.

38. Counsel went on to suggest that the Defendant tried to make up her story by saying that she had to borrow money from PW2. He said if the Defendant knew that the Plaintiff's account was in a messy state, she should not have relied upon the Plaintiff to pay any money, as this might be used by the Plaintiff to satisfy his own indebtedness.

39. This point was in fact answered by the Defendant. She said as they were having a good relationship, she wanted him to handle the matter. It is an answer of love. It may not be absolutely sensible. But, between a man and a woman who are living together as husband and wife, I can imagine that she would wish to entrust the job to this Plaintiff.

40. It has been put it to the Defendant that she has accessed to all the bank receipt. If she wishes to take them back, she could. She agrees. But this point is not leading anywhere. I see no reason why a man and a woman living together is not prepared to leave such important document inside their home.

41. The Defendant had in fact produced documents to show her income. I must agree that these documents are not very clear and some of the payments were effected to the joint account of the Defendant and PW2. But what is not disputed is, the Defendant has started her own business of a garment factory. And, the 2nd mortgage was arranged to obtain further loan to support her business. It showed at least that she was engaging in business.

42. I have observed the demeanor of the Defendant while giving evidence. I find that she is trustworthy and has been telling me the truth. Having taking all the submission by Counsel, on the balance I accept her evidence in total.

43. In view of the above findings, I am driven to one and only one conclusion, namely that the Plaintiff could not establish he had paid any money towards the purchase price of the Property. I also found that the Defendant had paid for all the purchase money for the Property. That being the case, the Plaintiff's claim for declaration must fail and is hereby dismissed. His other claims are based on whether he had a beneficial interest in the Property and therefore must be dismissed at the same time.

44. There is some argument on whether the Property is a gift to the Defendant. It is not relied upon by the Defendant. But for the Plaintiff to succeed with the declaration, he had to satisfy me that it is not a gift. Just for completeness, I would rule on this point as if the Plaintiff established that he paid for the purchase price of the Property. Since the Defendant is not his wife, there is a presumption of resulting trust. But the presumption is rebutable and I must look at all the fact of this case.

45. It is stated in the statement of the Plaintiff that he intended to buy the Property in order that the Defendant and their son could have a shelter if he predeceased them. He also mentioned that he was worrying that the Defendant may not be able to get his estate, as they had not been legally married. But then he goes on to say that he does not intend to make a gift to the Defendant of the Property during his lifetime. I expressly ask counsel for the Plaintiff how that could be achieved. He gives me no answer. I would interpret his statement as self-contradictory. The clear intention must be to ensure that the Defendant and their son had a shelter.

46. Given the relationship of the Plaintiff and the Defendant is that of a de facto husband and wife, and on the above admitted intention of the Plaintiff of giving a shelter to the Defendant and their son, on the undisputed fact that the Plaintiff named the Defendant as the register owner, I am driven to one and only one conclusion that, if the Plaintiff did put up the purchase money, he must intend this to be a gift to the Defendant. The gift has been perfected by the assignment and he could not now seek to set aside the gift. So even if he paid up for the purchase price, I would not grant him the declaration of beneficial interest.

47. I now turn to the counterclaim of the Defendant. The Defendant claims that sometime in 1990, her relationship with the Plaintiff deteriorated and she moved out of the Property. She had to find some alternative accommodation.

48. In about 1996, she requested the Plaintiff to leave. And it is her evidence that the Plaintiff said he would give her $3,000 to rent another place to live in. There was no formal agreement signed.

49. Counsel for the Plaintiff submitted that this is a tenancy. And the word rent was used both in oral evidence and the statement. But I should look at the whole circumstances to interpret the true nature of the arrangement.

50. It is quite obvious that the whole arrangement is nothing more than a family arrangement. Surely it is no longer a family because their relationship deteriorated. But it is one of those situations when she would require some support from the Plaintiff because he refused to move out of the Property adding on to her financial burden. This kind of arrangement falls short of a demise of legal interest in the land. It is quite obvious that it is nothing more than a licence. This licence would terminable by sufficient notice. And in any event, the Plaintiff has ceased paying any rent or licence fee since 1997, which is not disputed.

51. Prior to the issue of this proceeding, the Defendant said she had orally demanded the Plaintiff to leave. A formal notice was issued by her solicitor. And clearly the issuance of this proceeding with a claim for possession is a claim that the licence has been terminated and for recovery of the Property. Accordingly I rule that the licence of the Plaintiff has been terminated and the Plaintiff is liable to return possession of the Property to the Defendant.

52. Since it is not a lease or tenancy agreement section 58 of the Conveyancing and the Property Ordinance does not apply. The Landlord and Tenant (Consolidation) Ordinance does not apply. The relief provision of the District Court Ordinance does not apply. I would therefore order the Plaintiff to deliver up vacant possession of the premises within 14 days from the date of judgment.

53. In the counterclaim, the Defendant also claimed damages for trespassing. There is no evidence on the damage she suffered. Except for the statement that she required $3,000 from the Plaintiff at the material time, there is no evidence as to the market rental of the Property.

54. It is well-established principal that when there is no evidence, I should not adjourn the matter for assessment of damages. The Defendant has not sought for a direction that we shall first do with liability and leave assessment to a later stage. When there is no evidence on the damages, I am lack of alternative but to award nominal damages. I am not satisfied that the requirement of $3,000 reflect the market rental, as I have commented earlier on, this is nothing more than a family arrangement. It may or may not reflect the market rental.

55. In the circumstances for the damages on trespass, I could only award a nominal sum of $1.

56. I would also given an order nisi for cost to the Defendant against the Plaintiff with certificate for counsel to be taxed if not agreed, such order to be make absolute within 14 days.