LAM MEI PIK v. NG KAM ON

DCCJ13017/2001

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 13017 OF 2001

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JUDGMENT

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BACKGROUND

1. The Plaintiff and the Defendant were married on 18 August 1988 and divorced on 8 July 1999. For the most part during the currency of their marriage, both resided at the property known as 1st floor, No.1 Yau Kwong Street, Peng Chau ( The Property), the legal title to which is held by the Plaintiff and the Defendant as joint tenants. At the divorce proceedings, neither parties asked the Court to deal with their interests in the Property. On 31 January 2000, the defendant registered a Notice of Severance relating to the Property in the Islands New Territories Land Registry. The Plaintiff in this action claims, inter alia, :

(a) a declaration that the Defendant holds one half share of and in the Property in trust for the Plaintiff;

(b) a declaration that the said Notice of Severance be null and void;

(c) an order that the registration of the said Notice of Severance be vacated from the Islands New Territories Land Registry;

(d) an order that the Defendant do execute an assignment of his share of and in the Property in favor of the Plaintiff.

ISSUES

2. The Property was bought for HK$ 200,000.00 A down payment of HK$ 64,000.00 was made towards the deposits and part payment of the purchase price of the Property. The balance of the purchase price was financed by taking out a mortgage with a bank. The Plaintiff claims she had paid for the whole of the purchase price with her own resources, whilst the Defendant claims he had made some contributions towards the purchase price and is entitled to at least half share of interest in the Property. The issue before the Court is whether the parties concerned had any agreement in sharing the Property beneficially at the time of acquisition of the Property; if none, then who had actually paid towards the purchase price and if so, how much? This will form the basis upon which the Court determines the relative shares of beneficial interest in the Property.

EVIDENCE OF THE PLAINTIFF

3. The Plaintiff came to know the Defendant in May 1987 when he delivered lunch boxes to her workplace, thereafter they had co-habited for a year before they got married in August 1988. At that time, the Plaintiff worked as a full time garment worker and took up a part-time job in the evening as a hostess in a karaoke lounge. She earned on average in a month about HK$ 15,000 from both jobs. The Defendant engaged in heavy gambling and did not have any savings at all. The main discussion between them before marriage was about buying a flat. As Defendant's father , Ng Yin, did not trust the Defendant for he gambled so much, the Plaintiff took the initiative to approach Mr. Ng Yin for a loan to buy a flat and to hold a wedding banquet. Mr. Ng Yin agreed to lend her a loan of HK$ 120,000. The amount of loan was spent on buying the Property and on wedding. She repaid Mr. Ng Yin the full amount by 12 instalments of HK$ 10,000 as from April 1989 to January 1992. There were 12 cash withdrawal records of HK$10,000 each time during the said period from her savings account with Hang Seng bank. And she also paid off the mortgage loan with Hong Kong bank on 22 October 1998. There were records of monthly repayment in her savings account with the Hong Kong bank.

4. She quitted the part-time job in 1990 and changed to hawking in the street in Peng Chau since 1993 until 1998 and earned about HK$ 400 to HK$ 1,200 daily depending on the business of the day. She put the earnings in Hong Kong bank and China bank. The Defendant was able to find a job working on a pleasure boat since 1989 and earned about HK$ 7,000 odd a month. At the beginning of their marriage, arrangement was made for the Defendant to pay the household expenses such as electricity, rates and telephone bills, and the Plaintiff would be responsible for all the other expenditures including mortgage and father's loan repayment. Except for the first 11 months of their marriage the Defendant made a monthly contribution of HK$ 700 to the family, and thereafter, he stopped bringing home any money and engaged in heavy gambling again. During the currency of their marriage, the Plaintiff had given the Defendant money on several occasions upon his request, each time in the region of few thousand dollars but on one particular occasion in September 1996, the Plaintiff gave the Defendant an amount of HK$ 70,000 odd dollars for him to put in a fixed deposit account. All this money was belonged to the Plaintiff.

5. In 1998, the Defendant petitioned to the Court for divorce and promised the Plaintiff that he would transfer half his share in the Property to the Plaintiff after divorce. But the Defendant failed to honor his promise despite a number of demands from the Plaintiff to effect the transfer and in January 2000, the Defendant registered a Notice of Severance for the Property in the Land Registry. At time of divorce, the Plaintiff also held a property in her sole name in Mainland which was bought in 1997 for HK$ 100,000 odd dollars free of mortgage.

EVIDENCE OF DEFENDANT'S WITNESS

DW1- NG YIN

6. DW1 is the father of the Defendant. The Defendant had approached him for a loan to enable him to get married and buy a flat as a matrimonial home. Seeing that both the Plaintiff and the Defendant had a job at the time and they just lacked the down payment for the flat, DW1 was happy to help his son to set up a family. Therefore, he lent him HK$ 120,000 and hoped that he would save money to repay him but at the same time, he was prepared that the Defendant might not be able to do so. After all, the Defendant was his son, he could not refuse to help him. The loan was never intended to be advanced to the Plaintiff. As they were husband and wife, he thought the Plaintiff was entitled to have a half share in the Property, that was why the Plaintiff signed on the legal documents as joint tenants. Subsequently, the Defendant did repay him the full amount by 12 instalments of HK$ 10,000 dollars each.

DEFENDANT

7. In 1987, when the Defendant met the Plaintiff, she was working as waitress in a nightclub, after she was going out with him, she took his advice and quitted her job in the nightclub and changed to work in a garment factory. The Defendant also found another job working on pleasure boats and since then, he had never changed his job, and at the same time, he also worked part-time as a petrol station assistant and factory worker etc.. When they decided to get married, the Defendant asked his father for a loan of HK$120,000 to enable him to finance the wedding as well as buy a flat as their matrimonial home. The balance of the purchase price of the Property was financed by taking out a mortgage with the Hong Kong bank. At the time, it was an understanding between them that the Plaintiff and him would save money to repay his father's loan by 12 instalments of HK$ 10,000 each. As soon as they had saved up HK$ 10,000, they would pay to his father. The loan was finally paid off and the repayments were partly contributed to by the Defendant and partly by the Plaintiff.

8. Whenever the Defendant received his monthly salary, he would first of all take away the amount for himself for his own use and gave the rest ( about 80% to 90%) to the Plaintiff for the household expenses and mortgage repayments. In September 1996, the Defendant asked the Plaintiff to give him back his share of the money in two fixed deposit accounts maintained under the name of the Plaintiff, the Plaintiff agreed and gave him HK$70,000. This repayment had nothing to do with the purchase or mortgage repayment of the Property. The Property was purchased in joint names was never intended to be a gift to the Plaintiff as a whole, otherwise, it would have been registered in her sole name. As far as his gambling habit was concerned, he was never a heavy gambler, but he admitted that he lost the HK$ 70,000 in gambling.

ASSESSMENT OF EVIDENCE

9. The Defendant denied that he was a heavy gambler and he was able to make contributions to his family from his salaries during the time of his marriage with the Plaintiff, however, he did not produce any bank accounts to show his finance situation except the deposit record of the HK$ 70,000 which he received from the Plaintiff. Then again, the deposit of HK$ 70,000 only lasted for six months before he gambled it away. Defendant testified that he withdrew his salary on the payday, after deducting the sum for his own use, he paid the major part of his salary to the Plaintiff for the family. As the evidence suggested, the Plaintiff at that time did not have any financial problem, and was not in urgent need of money from the Defendant, I see no reason that the Defendant needed to withdraw the whole salary on each payday, unless he was indebted to others. I think it was more likely that he owed others debts and took out the salary for repayment.

10. From the documents in the agreed bundle C (see P.89 to P. 107), these are demand letters issued by the Hong Kong bank to the Defendant for the period from December 1998 to February 2000, it clearly shows that the defendant was unable to make payments for his credit card and the annual fee for his ETC card for sums less than HK$ 15,000. Although this did not really relate to the period of marriage, the more reasonable inference to be drawn was that the defendant did not have the ability to save money during the currency of marriage to make contributions to the family.

11. The fact that the Property was in joint names did not, in my view, indicate the parties' intention to share the Property beneficially. DW1 said that he would not lend the money to the Plaintiff alone for he hardly knew about her, but agreed to put her name down in the title deed because they were married and she should have half share of the Property. On the other hand, DW1 also said that he expected that the Defendant might not be able to repay the loan to him, if that was what he thought at the time, I see no reason he should give away his money to the Plaintiff with whom he had no close relationship. I think it more likely that DW1 did not trust the Defendant for he gambled a lot and lent the money to the Plaintiff for she was able to repay it. And I believe that was why repayments of the loan and mortgage were made from the Plaintiff's bank accounts. If the Defendant was prepared, as he alleged, to shoulder the responsibility of repaying the mortgage, why were the repayments not made from an account under the joint names of the Defendant and the Plaintiff? The Defence had not offered any explanation for that. Moreover, I accept the Plaintiff's version that it was for the sake of convenience to add the name of the Defendant to the title deed so that DW1 would be willing to lend the money to the Plaintiff.

12. At the divorce proceedings, the Defendant was legally represented whilst the plaintiff was acting in person. The Defendant said that the reason for no order from the Court in respect of the Property was because there was an understanding between the parties that each should have half share in the Property and would continue to be so after divorce, so they did not ask for such an order. It doesn't make sense to me if that was the intention on the part of the Defendant, why he did not make use of the opportunity to sort the matter out once and for all, but rather leave the matter hanging in the air after their relationship had severed. I believe the Plaintiff's version more likely to be the truth that the Defendant agreed to give back the other half share to the Plaintiff, and relying on such promise and without proper legal advice, the Plaintiff asked no court order as to the Property. I think the reason the Defendant made such a promise because he knew he had made no contributions to the purchase price of the Property.

13. On the whole, I find the Plaintiff to be more credible than the Defendant and have more documentary proofs in support of her assertions. For instance, Defendant testified that after marriage, he had not engaged in any gambling until about 1995, however, under cross- examination, he agreed and admitted that he had actually gambled throughout his marriage. Also in his affidavit in support of his petition for divorce, he stated that he separated from his wife by moving out of the Property in November 1997, but in his evidence in the present case, he said that he moved out in June or July 1998. When asked for the reason, he explained that when he moved out in November 1997, he did go back to assist the Plaintiff in her hawking business but did not stay overnight, and that went on until June or July 1998 when he stopped going back altogether. The Defendant said that he misunderstood the meaning of separation, but I don't believe him. I think he was either lying in the affidavit for the divorce proceedings or in Court before me.

14. As far as the evidence of DW1 is concerned, I don't believe his evidence insofar as they are in conflict with the Plaintiff's, for I find him to be a witness who would go at any length to support his son regardless of the truth. In his testimony, he stated that the Defendant had quite serious financial problem during the marriage but he did not find him to be a heavy gambler. When asked under cross-examination what he meant by financial problem, he said that he meant the Defendant did not owe anyone any debts, he just could not save any money. But when further asked about the same question, he then said that it was not that the Defendant could not save any money, otherwise he would not have been able to repay the HK$ 120,000 dollars loan to him. Given that the parties' relationship had come to an end, I think DW1 was quite to say things in favour of the Defendant as could be seen from the above example.

FINDINGS OF FACT

15. Prior to or at the time of acquisition of the Property, the evidence did not suggest that the parties had discussed the matter of sharing the Property beneficially. The Plaintiff said that they had discussion about sharing the household expenditures between them such that the Defendant was responsible for the rates, electricity and telephone bill and the Plaintiff for all the other expenditures. While the Defendant said that they had plans to save money together for the family and he was responsible for the repayment of the father's loan. In my judgment, I do not find that there was any agreement or understanding between the parties as to the relative share of the Property beneficially prior to or at the time of the acquisition of the Property.

16. Based on the reasons I stated above, I find that the Defendant had not contributed any money towards the purchase price of the Property. Even if he had given some money to the family, I don't find these payments to be substantial as to relieve the Plaintiff's burden on repaying the mortgage and the loan. The whole of the purchase price of the Property was paid by the Plaintiff with her own resources.

CONCLUSION

17. The order that I make, therefore, is for the declaration and order as sought by the Plaintiff in the statement of claim for items (a), (b) and (d), I shall make no order as to item( c), for in my judgment, when the Court having granted the relief for (a), (b) and (d), item( c) would be unnecessary.

18. I make an order nisi that the Defendant do pay the Plaintiff the costs of this action with certificate for Counsel, such costs shall be taxed if not agreed, the order nisi is to be made absolute at the expiration of 14 days from the date of handing down judgment.