LEUNG YIU MAN v. CHU KUEN

HCA 1018/2021

[2024] HKCFI 2753

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1018 OF 2021

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J U D G M E N T

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A. Introduction

1.  In these proceedings, the Plaintiff claims a half interest in a flat registered solely in the Defendant’s name.  It is undisputed that they had an affair in the past, though they never married.  When the Defendant purchased the flat in 2004, the Plaintiff was single, and the Defendant was married.  The Plaintiff contributed some money towards the purchase price, though the exact amount is disputed. The Plaintiff now asserts that, at the time of purchase, both parties had a common intention to share ownership of the flat, which was bought for investment purposes.  The Defendant denies this, stating that the Plaintiff’s financial contributions were gifts made out of love and affection, and that the flat was intended for her own occupation in old age if necessary. Consequently, the Plaintiff commenced the present proceedings against her.

2.  My finding is that there was no common intention between the parties as alleged by the Plaintiff. Additionally, I reject the Plaintiff’s alternative claim that he has an interest in the flat based on a resulting trust, which he argues arises from his contribution towards the purchase price.  The reasons for these conclusions are explained below.

3.  In this case, as in other cases on common intention construction trust, context is everything. Hence facts I should start with.  Below I shall refer to the Plaintiff as “Leung” and the Defendant as “Chu”.

B.   Facts which are not disputed

4.  The following facts are not disputed by the parties:

(1)  Chu was acquainted with Leung in about 2003.  At that time, Chu was married with three daughters.

(2)  On 20 November 2004, Chu signed the Provisional Agreement for Sale and Purchase (the “Provisional Agreement”)  of a flat known as Serviced Apartment No. 22, 33^rd Floor, Indihome, No. 138 Yeung Uk Road, Tsuen Wan, New Territories (the “Flat”)  in her name as the purchaser.  The purchase price was $2,258,000.

(3)  On 24 November 2024, Chu signed the Formal Agreement for Sale and Purchase of the Flat.

(4)  On 22 February 2006, the sale and purchase was completed.  The flat was assigned to Chu as “Sole Owner” under an Assignment of even date.

(5)  The purchase was financed by Public Bank, secured by a Mortgage dated 22 February 2006.  

(6)  On 28 June 2010, the Flat was remortgaged in favour of Hang Seng Bank Limited (“Hang Seng”).  In this Mortgage, Chu executed as the Mortgagor, and she also executed together with Leung as the Borrowers.

(7)  On 31 August 2020, the Flat was remortgaged in favour of The Hongkong and Shanghai Banking Corporation Limited (“HSBC”).  Leung was not a borrower under this mortgage.

(8)  On 29 September 2020, Chu issued a cashier order for $1 million in Leung’s favour.  

C.   Questions for determination

5.  The questions for determination are obvious, as formulated by Leung’s counsel:

(1)  Whether the parties had the Common Intention as pleaded in the Statement of Claim and whether the Flat held under Chu’s name was under a common intention constructive trust in favour of Leung.

(2)  Alternatively, whether the Flat held under Chu's name was under the operation of a resulting trust in favour of Leung?

(3)  If so, what are consequential orders and directions for the relief sought?

6.  In the Statement of Claim (as amended on 15 February 2023), Leung pleaded and defined the Common Intention as follows:

“ 2.  In or about November 2004, the Plaintiff and the Defendant orally reached a common intention (“the Common Intention”)  that:

a.  Whilst the property to be purchased would be registered in the Defendant’s sole name, the Plaintiff and the Defendant should each own half of the share of the property with each of them would contribute towards half of the purchase price of the property and  would contribute the mortgage instalments and outgoings of the property in equal share;

b.  On the disposal of the property, after taking into account the financial contribution towards the property made by the parties, the Plaintiff and the Defendant should share the profits (including but not limited to the net rental profits)  in equal share; and

c.  Before the disposal, the property would be rented out and the rental income would be used to repay the mortgage loan and other outgoing expenses of the property. In the event that the rental is insufficient to defray the mortgage loan and outgoing expenses, the outstanding balance should be borne by the Plaintiff and the Defendant equally.”

7.  The Flat is registered in the sole name of Chu as owner.  Leung asserts that he has beneficial interest in it, by reason of the Common Intention or alternatively a resulting trust in shares which are proportionate to Chu’s and his respective contributions to the purchase price (the “Resulting Trust”)[1].  As such, he takes up the burden to prove the Common Intention or the Resulting Trust. 

8.  Chu’s counsel proposes 25 issues for the Court to resolve.  However, I find it unnecessary to address each one.  The proposed issues encompass almost every fact pleaded in the Defence (re-amended on 7 March 2023).  As will be elaborated upon in the legal principles discussed below, considering the question of a common intention constructive trust and the ancillary possibility of a resulting trust necessitates a holistic, rather than piecemeal, approach.  Over-dividing the issues risks losing sight of the broader context. 

9.  Therefore, it is unnecessary for the Court to make definite findings on peripheral issues such as whether Leung paid approximately 90% of their expenses since around 2003, whether he bought Chu gifts, or whether he unsuccessfully searched for Chu at a restaurant owned by her friend between March and July 2020, as proposed by Chu’s counsel.  Delving too deeply into these details would distract the Court’s attention from the determinative issues at hand.

D.   Credibility of Witnesses

10.  Other than Leung and Chu, the parties did not call any witness.  I have taken into account that the incidents occurred more than 20 years ago.  It is understandable that their memories of the details might be less vivid.  Therefore, slight inconsistencies and deviations from assertions in witness statements will not automatically render their evidence unbelievable.  

11.  Nonetheless, I do not find Leung to be a credible witness.  His evidence is unreliable.  Where his testimony conflicts with Chu’s evidence, I prefer Chu’s account.  I will explain the reasons below.

12.  First, during cross-examination, Leung often remained silent for 10 to 30 seconds after a question was posed, appearing to ponder the question.  He did not explain these delays.  On some occasions, he did not answer at all, despite prompting from Chu’s counsel and the Court, necessitating the repetition of the question.  Leung did not exhibit the demeanour of a forthcoming witness.

13.  Second, in many respects, Leung’s oral evidence contradicted his witness statements, which he had adopted under oath as his evidence in chief[2].

14.  Third, some of Leung’s oral evidence was inconsistent with or different from his pleaded case.[3]

15.  Fourth, notably, on key topics, Leung retracted from his previous answers without good explanation during questioning. 

16.  For example, in paragraphs 10 and 14 of his witness statement, Leung alleged that he borrowed two sums of money, $112,900 and $350,000, from his mother and his mother and elder brother, respectively, to contribute towards the purchase price. Initially, Leung confirmed this.  However, when asked why he needed to borrow the money and whether he had meagre earnings, he retracted, claiming he had savings and the money was his own.  When paragraph 10 of his witness statement was specifically referred to, he pondered for a while and retracted again, stating that the money was indeed borrowed from his mother and elder brother, and that even though he had savings, he could still borrow from them:

“ Question: 買物業嘅時候$112,900係問母親借？

Answer: 係

Question: 2006年係咪再問咗母親同埋哥哥借咗$350,000？

Answer: 係

Question: 關於你嘅財政狀況，你可以話係收入不多，同唔同意？

Answer: 唔同意因為有積蓄

Question: 咁點解仲要問母親借？

Answer: $112,900其實係自己嘅，因為同母親有個聯名股票戶口，所以啲錢同阿媽綁起咗，而佢就負責提取本票

Question: 所以$112,900其實唔係問阿媽借？

Answer: 唔算係借

Question: 係Bundle A 82頁第10段，你提到$112,900係問阿媽借，所以呢個說法係錯嘅？

Answer: 係有問題 … [Leung paused] … 係錯，係借㗎，350,000都係借㗎

Question: 如果$112,900同$350,000都係借嘅，我向你指出你冇乜積蓄？

Answer:  不同意，有積蓄都可以問阿媽同哥哥借”

Leung changed his evidence twice within a few questions.  Coupling with the pauses, Leung did not behave as a truthful and straightforward witness.

17.  On another occasion, Leung initially confirmed Chu had suggested purchasing a property for investment.  However, during cross-examination, when asked why Chu would suggest this to him if she did not know his financial status, Leung retracted his confirmation.  Contrary to his pleaded case and witness statement, he then claimed that it was he, not Chu, who had made the suggestion.  Chu’s counsel then referred Leung to paragraph 6 of his witness statement, where he had stated that Chu suggested purchasing the property together for investment. When asked if paragraph 6 was incorrect, Leung initially agreed but then paused and changed his evidence again, stating, “It was written correctly.”  Upon further clarification, he confirmed that it was Chu who had made the suggestion:

“ Question: 2004 年 11 月，被告是否向你提議買物業作投資？

Answer: 係

Question: 被告知唔知你嘅財政狀況？

Answer: 不知道

Question: 如果佢唔知道咁點解佢會向你提議？

Answer: 之前係我提議，因為我淨係可以負擔一半，唔係被告提議嘅

Question: 第 80 頁第 6 段提到被告向你提議去買嘅說法係錯嘅？

Answer: 同意 … [Leung paused] … ，係寫啱㗎

Question： 係邊個提議嘅？

Answer：  黃太 [i.e. Chu]”  

18.  During re-examination, Leung’s counsel asked, in a leading manner, whether Leung understood the question.  Leung stated that he understood the question but had misunderstood it.

“ Question: 2011年11月你提到係黃太提議去買物業作投資，你明唔明白當時嘅問題？

Answer: 明嘅

Question: 被告大律師冇提出係共同提議，當時你係咪唔小心同意咗？

Answer:  理解錯咗”

19.  The questions put to Leung were clear and simple.  It was only when his answers were challenged or contradicted that Leung retracted and changed his evidence.  Hence this Court infers that whenever Leung sensed that his answer was detrimental to his case, he swiftly changed or retracted it. 

20.  For the above reasons, I find Leung to be an unreliable witness.  His evidence is generally incredible.

21.  In contrast, Chu was much more forthcoming during cross-examination.  She provided her answers straightforwardly.  She readily accepted matters that she did not know or could not recall.

E.   Common Intention

E1.  Legal principles

22.  The applicable legal principles are agreed.  It is well set out by Madam Recorder Sit SC in Woo Tat Huen v Lee Wai Ping [2021] HKCFI 576, §§42-47:

“ 42. The starting point where there is sole legal ownership (as is the present case)  is sole beneficial ownership, and the onus is on the person seeking to show that beneficial ownership is different from the legal ownership; in other words, it is for the non-owner to show that he has any interest at all: Stack v Dowden [2007] 2 AC 432, §56.

43. The relevant principles have been conveniently summarized recently by Coleman J in Lam Ka Kui v Choi Yuen Ling [2020] HKCFI 2647; HCA 537/2017 (unrep., 23 October 2020), §§8-16:-

(1)  Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary.

(2)  Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the plaintiff regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (i)  the common intention, (ii)  the plaintiff's detrimental reliance on their common intention, and (iii)  the unconscionability of the property owner departing from it.

(3)  The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership. The focus is on the intention of the parties at the time of acquisition of the asset. Contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.

(4)  Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties' conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

(5)  In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, §§2.3-2.4, Cheung JA identified two situations where a common intention constructive trust may arise.

(a)  The first is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The finding of such an agreement or arrangement can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.

(b)  The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property, and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust.

(6)  A resulting trust arises by virtue of the plaintiff's contribution in money or in some other way towards the property's acquisition. Equity holds the legal owner to be a trustee of that property for the plaintiff in an appropriate share, giving effect to the parties presumed intention. Particularly in a domestic context, but also generally, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust.

(7)  As emphasized in Stack v Dowden §§68-69, an intention to have beneficial interest different from legal interest in property is unlikely, and the task of showing that should not be lightly embarked upon. It was recognized that, in family disputes, strong feelings are aroused when couples split up which can often lead the parties, honestly but mistakenly, to reinterpret the past in self exculpatory or even vengeful terms. If a difference is to be found between the beneficial and legal interest, clear evidence will be required. Unequal contributions to the purchase price of property will not likely be enough to move away from the starting point that equity follows the law.

44. As can be seen from the above, ultimately it is a question of intention – in the case of constructive trust, the common intention of the property owner and the plaintiff; and in the case of resulting trust, the intention of the person who provided the purchase price at the time the property was acquired. Between the two, and particularly in a domestic context, if it is possible to resolve the matter by reference to common intention, it would not be necessary to resort to resulting trust at all: Primecredit §1.3.

45. The modern approach to constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context. In a domestic context (particularly in relation to a matrimonial home), the court is not constrained in that exercise by pure direct monetary contributions to the purchase price: Primecredit §1.6.

46. Moreover, in the assessment (whether on constructive trust or resulting trust), the court should have regard to inherent probabilities in light of the surrounding circumstances at the time the property was acquired: Primecredit §1.4.

47.  Whilst the authorities cited above are mostly concerned with matrimonial homes or residences of cohabitating couples, whereas the Property in this case is an industrial premise and not a home, in my view the same approach applies.  The matrimonial home / residence is just an additional context which may be taken into account in an appropriate case (whether for the assessment of intention or inherent probabilities)  which does not feature in this case.”

23.  Of particular relevance to the facts of the present case, in assessing the probable existence of a constructive trust or resulting trust, holistic consideration of the context is more important than arithmetical calculation, see the English House of Lords in Stack v Dowden [2007] 2 AC 432 at §§69-70 per Baroness Hale of Richmond:

“ 69  In law, “context is everything” and the domestic context is very different from the commercial world.  Each case will turn on its own facts.  Many more factors than financial contributions may be relevant to divining the parties’ true intentions.  These include: any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names; the reasons why (if it be the case)  the survivor was authorised to give a receipt for the capital moneys; the purpose for which the home was acquired; the nature of the parties’ relationship; whether they had children for whom they both had responsibility to provide a home; how the purchase was financed, both initially and subsequently; how the parties arranged their finances, whether separately or together or a bit of both; how they discharged the outgoings on the property and their other household expenses.  When a couple are joint owners of the home and jointly liable for the mortgage, the inferences to be drawn from who pays for what may be very different from the inferences to be drawn when only one is owner of the home.  The arithmetical calculation of how much was paid by each is also likely to be less important.  It will be easier to draw the inference that they intended that each should contribute as much to the household as they reasonably could and that they would share the eventual benefit or burden equally.  The parties’ individual characters and personalities may also be a factor in deciding where their true intentions lay.  In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection.  At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.

70  This is not, of course, an exhaustive list.  There may also be reason to conclude that, whatever the parties’ intentions at the outset, these have now changed.  An example might be where one party has financed (or constructed himself)  an extension or substantial improvement to the property, so that what they have now is significantly different from what they had then.”

24.  In essence, I should consider all the circumstances of the present case to discern the true intention of Leung and Chu.  Specifically, I need to determine whether the Flat was purchased as a potential residence for Chu in her old age, as she claims, and whether the money advanced by Leung was a gift to Chu motivated by love and affection.  Alternatively, I must decide whether the Flat was purchased as an investment with the intention of equal ownership, as Leung alleges. 

E2.  Context of this case

25.  Having reviewed the evidence adduced by both parties, the following matters are of particular concern in the context of this case:

(1)  Chu registered herself as the sole owner of the Flat.

(2)  Leung did not question the accuracy of Chu’s reason for sole ownership for 16 years following the signing of the Provisional Agreement on 20 November 2004.

(3)  Leung did not raise any complaints even after discovering the falsity of Chu’s stated reason.

(4)  The financial relationship between Leung and Chu did not suggest they were conducting an investment on an equal share basis.

E3.  Chu’s Registration as the sole owner

26.  What happened at the time when the Flat was purchased?  Why was the Flat only registered in Chu’s name?  There is no written agreement between Leung and Chu.  Therefore, in determining whether Leung has discharged the burden of proving the Common Intention, the Court should start by assessing the inherent probability of Leung’s case based on his testimony and the circumstantial evidence.

27.  First, Leung did not provide a coherent explanation in his pleadings for why, despite allegedly owning a half interest in the Flat as an investment, he was excluded from being a registered co-owner with Chu. 

28.  In Leung’s Amended Statement of Claim (as quoted in paragraph 6 above), the first element of the Common Intention was that the property would be registered in Chu’s sole name.  However, he did not explain why, if the Flat was purchased for equal investment[4], it was agreed to be registered solely in Chu’s name.  He did not plead whether he discussed this arrangement with Chu at the time of reaching the Common Intention.  Nor did he explain why he would agree to an arrangement that afforded him, as a co-investor, less protection. These are material facts which should have been pleaded.  The absence of such pleas casts doubt on the truthfulness of Leung’s case, making it implausible and inherently improbable.

29.  In attempting to address Chu’s plea in the Re-Amended Defence – that had there been a Common Intention, the Provisional Agreement would have been signed by both Leung and Chu[5] – Leung, in his Amended Reply[6], made two claims: first, on the night before choosing the Flat, around 11pm, Chu represented to Leung that since Leung was not her direct relative, his name could not be registered as a co-owner (the “Representation”); and second, that due to his limited education (only up to secondary three)  and in reliance on the Common Intention, Leung did not investigate the truth of the Representation and agreed the Flat be registered in Chu’s sole name.

30.  I have grave doubts about this explanation.  The content of the Representation is obviously false.  Leung claimed it was given after the Common Intention was reached, but he did not explain why or how the Representation came up.  If the Common Intention had already been reached, there was no reason for Chu to make the Representation to Leung.  It was not Leung’s case that he asked Chu why the Flat should be registered in Chu’s sole name.  Even assuming Leung, due to his limited education, accepted the truthfulness of the Representation, it is not believable that he would rely on the Common Intention (as he pleaded)  to avoid investigating whether the Representation was correct.  Leung’s plea suggests that, relying on his earlier agreement to Chu registering the Flat as the sole owner, he agreed not to investigate the Representation and continued to accept Chu registering the Flat in her sole name.  Initially, he did not plead why he accepted the Common Intention.  All these pleas are inexplicable, cannot be understood, and hence, cannot be believed.

31.  Second, and further, Leung’s said pleaded case is inconsistent with his witness statement and oral evidence.  The “common intention” defined in the witness statement is not the same as the Common Intention defined in the Amended Statement of Claim[7].  In Leung’s first witness statement, he provided evidence on the common intention as follows:

“ 6. 大約於 2004 年 11 月左右，黃太向本人提議共同購買物業作投資之用。 … … 本人覺得可行，故同意黃太的建議並達成共識如下:-

(一)  我們二人每人佔所購買物業一半的股份；

…

7.  於 2004 年 11 月 20 日揀樓晚上，黃太向本人表示，由於本人不是黃太的直系親屬，因此不能將本人的名字在物業上註冊。鑑於本人的學歷有限及對物業買賣的認識不深及加上對黃太的信任，本人沒有探究黃太所說的是否真確便信以為真。最後，本人與黃太達成共識，同意上述所購買的物業只登記黃太為註冊業主。此共識連同上一段所述的共識，為方便超見，以下簡稱為 ‘該共識’。”

Leung stated in his witness statement that the “common intention” was agreed only after Chu’s Representation that only direct relatives could be co-owners.  As submitted by Chu’s counsel, this raises doubts about when and what the Common Intention was.  During cross-examination, the following questions were asked of Leung: 

“ Question: 之前有冇共識係用兩個人名？

Answer: 有因為係一齊投資

Question: 係咪當黃太話唔係親屬就唔可以做長命契，嗰陣時開始先改變主意？

Answer: 係…

Question: 一直至到被告話俾你聽之前都係有共識係兩個人名？

Answer:  係”

32.  I accepted Chu’s counsel’s submission that Leung’s pleaded case regarding when they reached the Common Intention that the Flat was to be registered in Chu’s name contradicted his averment in his witness statement and his testimony.

33.  With this serious confusion as to the contents of the Common Intention, I cannot be satisfied that Leung has discharged his burden of proof of its existence.

E4.  Leung’s failure to question Chu’s Representation for 16 years

34.  It was not until about 2019 – 16 years after signing of the Provisional Agreement in 2003 – that Leung discovered that Chu’s Representation was incorrect.  This realization came when his family’s residence was sold and he consulted a lawyer:

“ Question: 你幾時知道被告嘅說法係錯？

Answer:  喺去到屋企要收購嘅時候大約係2019年問律師先知”

35.  The naivety and inconsistency displayed in Leung’s evidence is, in my view, appalling and hardly believable.

36.  According to his witness statement, Leung accepted Chu as the sole registered owner of the Flat based on Chu’s Representation.  This Representation was evidently untrue. Leung claimed ignorance due to his limited education.  However, verifying whether a non-direct relative, like a friend such as Leung, could be registered as a co-owner, was a simple task.  The falsity of the Representation was easily discoverable.  This was highlighted during Leung’s cross-examination:

“ Question: 點解你唔問佢關於資料嘅來源？

Answer: 因為我信佢

Question: 咁你可以去問售樓處嘅職員?

Answer: 我信佢，所以冇問

Question: 被告去咗律師樓簽正約可以去問律師？

Answer: 嗰日返工冇去到同埋相信佢

Question: 由2004年11月20日至到成交有一年三個月有冇任何人關於資料嘅真假？

Answer: 冇，因為相信佢 …

Question: 之前有冇機會問過律師？

Answer: 冇

Question: 咁轉按嘅時候呢？

Answer: 冇，因為信佢

Question: 但係你都可以問㗎？

[no answer]”  

37.  Leung repeatedly asserted that he believed Chu, which was his sole reason.  Despite this, it was pointed out to him that he could record his agreement with Chu in writing to protect his rights.  Specifically, he could have recorded in writing his contribution of $550,800 towards the Flat’s purchase price (as he alleges).  He stated he did not, again citing his trust in Chu as the reason.

“ Question: 你之前有冇要求過做任何信契 (trust deed)？

Answer: 當時唔識

Question: 有冇白紙黑字同被告寫低？

Answer:  冇，因為信佢”

38.  When he admitted that he did not enquire with anyone on the accuracy of the Representation, not even when he personally attended before a solicitor to sign the fresh mortgage in favour of Hang Seng in 2010.  Nonetheless, he conceded that Chu could have been wrong on what she told him.

39.  He was also asked whether his limited education had anything to do with his trust in Chu.  He said he could not say:

“ Question: 你之前沒有去了解被告說話嘅真相係因為你嘅學歷水平低跟對黃太嘅信任有什麼關係？

Answer: 講唔到

Question: 但（學歷水平低）係咪其中一個原因？

Answer:  係”

40.  He could not explain why he did not make any enquiry for 16 years.  He also did not explain what then prompted him to ask the lawyer about the Representation when his own residence was sold in 2019.  Neither were these questions clarified during re-examination.

41.  From another perspective, Leung’s case is that he paid a total sum of $635,276, of which $550,800 was for down payments and $84,476 for mortgage instalments, for the acquisition of the Flat[8].  He claims that his contribution towards down payments was much more than Chu’s.  If this were so, it begs the question why he, as the larger contributor, was not registered as the sole owner.  He answered that he discussed this with Chu but decided to give the registered ownership to Chu as he was busier and trusted her:

“ Question: 如果你出錢多個被告，點解唔用你名？

Answer: 有傾過，但係信佢所以用佢名

Question: 但係你唔會想保障自己嘅權益？係咪被告拒絕你要求

Answer: 被告冇拒絕，係我嘅選擇，因為我比較忙同埋相信佢所以就俾佢做業主就俾返被告

Question: 你從來冇喺證人口供紙講過，我向你指出你所講係假嘅

Answer:  不同意”

Leung’s answer is perplexing because this was the first time he mentioned discussing the issue of registering in his name instead of Chu’s.  Clearly, this allegation is relevant to the Common Intention, but it was not mentioned in his pleadings nor his witness statements.  He did not explain this omission, nor was it clarified in re-examination.

42.  Therefore, in my view, Leung’s evidence is perplexing, inexplicable, messy, self-contradictory, and cannot be believed.

43.  Lastly on this topic, the fact that only Chu entered the draw[9] as a prospective buyer adds weight to her case that the Flat was not purchased for joint investment with Leung.  As submitted by Chu’s counsel, if the Flat had been intended for joint investment, there was no reason why Leung would not have also entered the draw as a prospective buyer, at least to increase the chances of success.  This aligns Chu’s evidence[10] that since she wanted to buy a flat for her own occupation in her old age, especially given her poor relationship with her husband at that time. 

E5.  Leung’s absence of any complaints against the falsity of Chu’s Representation

44.  Leung repeatedly stated to the Court under oath that he believed Chu.  Sixteen years after, he discovered what Chu told him was incorrect – friends like him and Chu could indeed be co-owners of the Flat. Whether it was a deliberate lie or misinformation, he should have addressed it with Chu, even if he was not directly confronting Chu.  When asked if he ever did so, he admitted he did not even mention it to Chu:

“ Question: 當你2019年12月先知你有冇去向被告對質？

Answer: 冇

Question: 係咪因為被告從來冇咁講過？

Answer: 不同意

Question: 咁點解你發現之後唔向佢對質？

Answer: [Pause] 冇做過，因為我嗰陣時收購緊同我想買返佢嗰份

Question: 但係收購同埋買返佢嗰份係兩回事？

Answer:  同意”

When asked why he did not raise this issue with Chu, he responded that it was because his residence was being purchased, and he wished to buy Chu’s share.  This was no explanation.  The sale of his residence and his intention to purchase Chu’s share cannot explain why he did not raise the issue of misrepresentation with her.  When this was put to him, he simply agreed and did not explain further, nor was this clarified in re-examination.  The evidence is bewildering.  

45.  Leung evidence becomes even stranger and less believable due to his complete lack of complaint even after his relationship with Chu turned sour.  The situation became so confrontational that Leung went to Chu’s residence and displayed a banner outside that read “首譽六號屋 騙人血汗屋”, and a sheet of paper filled with accusations of Chu cheating him out of his flat[11].  Despite this, Leung never mentioned Chu’s misrepresentation, not in his WhatsApp communications[12] with Chu nor anywhere else.  Given Chu’s Representation was crucial to Leung’s agreement for Chu to become the sole registered owner of the Flat, it would be expected that he would have brought it up if his case were true.

46.  In conclusion, I find that Chu did not make the Representation to Leung.

E6.  The financial relationship between Leung and Chu

47.  The financial relationship between Leung and Chu did not suggest that they were conducting an investment on an equal share basis, for the following reasons.

48.  First, regarding the financial background, Leung’s evidence[13] stated that around 2004, he worked as an electrical maintenance worker with a monthly income of $10,000.  He lived with his parents, elder sister, and younger brother, contributing $3,000 to $5,000 per month for household expenses.  He also invested in blue chip stocks, earning a few thousand dollars in interest.  Notably, he mentioned that Chu’s financial capability was much better than his.  He further emphasized[14], almost exclamatorily[15], that a monthly mortgage contribution of $3,000 was significant, not to mention the additional costs for the deposit, down payment and legal fees when purchasing the Flat. 

49.  Given Leung limited means, if Chu had indeed suggested buying the Flat for investment on an equal basis, and considering the financial strain of regular mortgage contributions along with the deposit, down payment and legal fees, it is unlikely that Leung would have agreed.  However, in his witness statement[16], he claimed that when Chu proposed the idea, he found it feasible and reached a Common Intention with him.  This makes his evidence appear inconsistent.

50.  Second, before the Flat was purchased, Leung recalled[17] that on 11 May 2004, he lent $90,000 to Chu to pay off her credit card debt.  He admitted during cross-examination that they were already in a romantic relationship at that time.  He did not mention that the money was lent at Chu’s request, nor was there any discussion on the terms of the loan, particularly the date of repayment.  According to Leung’s own evidence, it was only in 2011 that he requested Chu to repay the loan.  Given that $90,000 was ten times his monthly income and Leung knew Chu was financially more capable than him, his willingness to lend her the money indicates that he was infatuated with her, as submitted by Chu’s counsel.

51.  Third, during cross-examination, Leung admitted that Chu had sufficient money to purchase her own property.  Therefore, there was no need for Chu to ask Leung to buy the Flat jointly.  Leung explained that although Chu had money, she wanted to invest together with him.  This is hardly believable because, as mentioned earlier, Leung admitted that Chu did not know his financial status.  Thus, there is no reason why Chu would want to join Leung in the purchase.

“ Question: 喺2004年11月個被告其實可以用公司嘅錢同賣屋(Cheerful Park)嘅錢去買個物業，同唔同意？

Answer: 不同意

Question: 點解？

Answer: 有錢但係想一齊合作

Question: 佢有足夠嘅金錢去自己買物業，同唔同意？

Answer:  同意”

52.  Fourth, right from the beginning of the Flat purchase, even according to Leung’s case, the respective contributions of Leung and Chu were not equal, contrary to the alleged Common Intention that each would contribute half of the purchase price.  According to Leung’s evidence[18], when the Flat was purchased, he contributed $550,800 towards the deposit, down payment and legal fee and other expenses, whereas Chu only contributed $195,470.  Leung explained[19] this by stating that Chu, due to insufficient savings, requested him to pay more deposit, promising the difference would be offset during the down payment, to which he agreed. However, Leung did not mention that this offsetting was ever done. Additionally, there is no evidence that Leung had ever requested Chu to repay the difference. 

53.  For completeness, regarding payments of the deposit, down payment, legal fees and expenses, according to Chu’s case[20], Leung only contributed $350,000 instead of $550,800 he alleged.  Despite claiming this was an investment, Leung did not produce any documents, such as copies of cheques, deposit slips, or receipts, to record any of his payments.  Given that Leung bears the burden of proof, and coupled with my earlier finding that he is an unreliable witness whose evidence is generally incredible, I prefer Chu’s account over Leung’s in this regard.

54.  Fifth, after the purchase was completed on 22 February 2006, Leung’s contributions were inconsistent with his allegation that he and Chu agreed to contribute equally towards mortgage instalments and other expenses.  Pursuant to the Common Intention, if true, both Leung and Chu were committed to paying the mortgage instalments and other expenses of the Flat in equal shares.  However, even according to Leung’s own account, the contributions he and Chu made were insufficient, and he had defaulted on too many occasions – so frequently, in fact, that it casts doubt on whether Leung truly regarded himself as having an obligation to make regular contributions:

(1)  Leung’s case is that he and Chu should each pay $3,000 per month for the mortgage instalment[21]. However, during cross-examination, he admitted this was insufficient because there were additional expenses such as management fees, rates and government rents.  After deducting rental income, the $3,000 each paid would not cover all the expenses.

“ Question: 我向你指出每人夾$3000的事宜從來沒有出現

Answer: 不同意

Question: 按揭加其他支出，例如管理費差餉地租，再用租金扣減，費用一定多過每人$3000同唔同意？

Answer: 同意

Question: 所以從來沒有話過每人夾$3000？

Answer:  不同意”

(2)  The first mortgage instalment presumably started around 22 February 2026, following the completion of the purchase.  However, according to Leung’s evidence[22], he first paid $6,000 on 22 February 2006, and then $2,000 on 29 July 2006. This means that, out of the six mortgage instalments due between 22 February 2006 and 22 July 2006 (each $3,000, totalling $18,000), Leung only paid $8,000, missing more than three instalments.  When asked during cross-examination, he was evasive and unable to explain.

“ Question: 2006年3月至5月期間的按揭係邊個俾？

Answer: 未開始

Question: 不過喺2006年2月22日已經開始第一期支付？

Answer: 忘記咗

Question: 三月至五月的按揭是否由被告支付？

Answer:  唔清楚”

Leung’s failure to pay means that Chu had covered all the outstanding mortgage instalments and expenses during this period.  Yet, there is no evidence from either party that Chu ever demanded Leung to pay his outstanding contributions.  This supports Chu’s case that Leung had no obligation to pay anything because no Common Intention was ever reached, and he did not have any interest in the Flat.

(3)  Leung failed to make any contributions during certain months between 14 August 2006 and 29 December 2006, between 29 December 2006 and 14 February 2007 (where he paid an irregular amount of $4,976), between 25 April 2006 and 26 July 2007, between 27 December 2007 and 5 March 2008, and in June 2008.

(4)  Between January 2009 and April 2010, he did not make any contributions.  He explained[23] this by citing his financial difficulties and claimed he had informed Chu, asking her to cover the mortgage instalments herself and that she simply understood and accepted.  I doubt the veracity of this explanation.  If it were true, this commitment to equal investment would be too casual to be taken seriously.  It seems too good to be true, and there is no supporting evidence.  The likelihood is that no such commitment to invest existed at all.  

55.  Sixth, regarding the expenses for repair and maintenance of the Flat, despite claiming in his witness statement that he paid such expenses in equal shares as requested by Chu from time to time[24], during cross-examination, Leung admitted that all the repair and maintenance expenses were paid by Chu.  This admission came after he was referred to WhatsApp messages[25] between himself and Chu, where he asked Chu to outline the works and expenses, to which Chu responded with a detailed list, and he replied with his approval.  This inconsistency between his witness statement and his oral testimony further underscores the unreliability of Leung’s evidence.

“ Question: 文件夾B第287頁，被告列出所有支出？

Answer: 係

Question: 你從來都冇話夾咗？

Answer: 同意

Question: 被告從來都冇要你夾錢去維修？

Answer: 支出全部由供樓戶口支付

Question: 文件夾A第122頁(f)& (g)段提到「不定期的開支隨時夾錢支付」和我「以現金支付給黃太」，這些說法係咪錯的？

Answer: 不同意

Question: 如果你知道開支的話，就不用在whatsapp逐一列出？

Answer: 同意

Question: 我向你指出被告從來冇同你夾過

Answer: 不同意，一直由黃太負責

Question: 所有開支由黃太支付？

Answer:  係”  

E7.  Conclusion

56.  For the above reasons, I reject Leung’s claim.  There was no Common Intention reached between Leung and Chu as he alleges.  Chu did not agree with Leung to purchase the Flat jointly in equal shares; she purchased it for her own purposes.  

F.   Nature of Leung’s money given to Chu

57.  I have concluded that Chu’s account is more credible and that Leung had indeed given $350,000 to Chu for her purchase of the Flat.  The question now is: what is the nature or intention of this advancement?

58.  Chu’s evidence[26] in this regard is:

(1)  On the evening when she was queuing in her car with Leung, waiting for her turn to choose the Flat to be purchased,  Leung told her that if she had any financial difficulty, he would help me with money and effort (“他會出錢出力幫助我”); to thank him for his kindness, Chu told him that if he had no place to stay in the future, she would allow him to live at the Flat.  Chu stated that she gave this response based on their relationship at the time.

(2)  She believed that Leung’s voluntary suggestion to financially sponsor her was out of his love and affection towards her.  She described it as a gift of love.

(3)  Leung told her that after they got together, she brought him good fortune in the stock market, and he had earned substantial profits; therefore, he sponsored her to purchase the Flat as a reward.  After Chu received the sponsored money from Leung, she thanked him.

59.  Leung denied Chu’s account.

60.  I accept Chu’s account, for the following reasons:

(1)  Chu’s account was not challenged in cross-examination.

(2)  Leung’s allegation of the Representation happened in the same scene on the evening when he and Chu were waiting for the Flat to be chosen.  As held above, I have already rejected the existence of the Representation. 

(3)  For the reasons above, I have also rejected Leung’s allegation that the Flat was purchased for joint investment. 

(4)  Both Leung and Chu agreed that they were intimately in love at the time.

(5)  Evidence shows that Leung and Chu mutually assisted each other financially according to their respective needs.  For examples:

(a)  As mentioned above, Leung testified that in May 2004, he lent $90,000 to Chu to settle her credit card debt.

(b)  According to Chu[27], between 2008 and January 2020, Leung would give her several hundred dollars whenever she mentioned she had little cash or pocket money.

(c)  Chu also testified[28] that from 2008 to early 2020, before their relationship turned sour, Leung had asked Chu to lend him money, usually several thousand dollars each time, because he lacked cash flow.  On those occasions, Leung repaid her.

(d)  According to Chu[29], between 2008 and 2012, Leung asked her for three more significant loans of $20,000, 25,000 and 60,000.  $60,000 was for Leung’s purchase of property in the Mainland.  Chu stated that due to their relationship and his usual monetary subsidies, she did not request repayment.  During cross-examination, Leung admitted he borrowed $60,000 from Chu and Chu had not asked for repayment.

(6)  For completeness I have considered but do not find Leung’s sponsored money to Chu it to be a loan because, firstly, this is neither party’s case.  Secondly, when Chu paid $1 million to Leung in September 2020 as a gesture of goodwill, Leung accepted the payment but insisted[30] on his joint investment claim that $1 million was insufficient because more profit should be received after deducting that amount from half the value of the Flat.

(7)  I have held above that I prefer Chu’s evidence to Leung’s, which is unreliable.

61.  Therefore, I find that the money advanced by Leung to Chu for the purchase of the Flat was given out of love and affection for her. 

62.  Consequently, no resulting trust arises.  Leung’s alternative claim of Resulting Trust is rejected.

63.  Lastly, for completeness, I should mention that Leung relies on certain WhatsApp messages with Chu to argue that Chu has admitted he had interest in the Flat.  In my view, this is a red herring.  As submitted by Chu’s counsel, it was only in December 2019 that Leung first claimed to Chu that he owned half of the Flat, which she denied. However, as Leung threatened to disclose their relationship to Chu’s husband, Chu continued to communicate with Leung and acceded to some of his requests in hopes of settling the dispute.  On 29 September 2020, she issued a cashier order for $1 million to Leung, hoping that he would agree to settle the dispute upon receiving the payment.  Leung denied making threats.  However, messages such as “已過了一個多星期黃太你未有遵守承諾妥善對待我們的糾紛，這樣我別無選擇再度拜訪你屋苑，奉勸一句你不知羞字怎樣寫都要想想黃生和你的小朋友感受。” clearly constitute serious threats.  Therefore, Leung’s suggestion that Chu has admitted his claim out of such threats is nothing but a red herring.

G.   Overall Conclusion and Disposal

64.  For the above reasons, the Plaintiff’s action is dismissed.

65.  Costs should follow the event.  I make an order nisi that the Plaintiff pay the Defendant’s costs of the action, including all reserved costs, to be taxed if not agreed. This order shall become absolute unless either party applies for variation within 14 days from the date of this judgment.

66.  I thank counsel for their assistance.