CHO KAM FOOK v. MAK SHUI HA JANET

HCA 1410/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1410 OF 2000

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J U D G M E N T

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1. The defendant (Miss Mak) is the registered proprietor of a flat in Oscar Court, Fa Yuen Street, Kowloon. The plaintiff (Mr Cho), claiming to have paid all or at least the lion's share of the purchase price and mortgage instalments, by this action seeks a declaration that Miss Mak's ownership is as trustee wholly for him or for both parties in such shares I am asked to determine, and for consequential relief. Her defence is that she is the outright owner legally and equitably because the total outlay was given her by a third party, a Mr Lee, for that purpose. Mr Cho paid nothing; indeed at the material time and thereafter he has lacked the wherewithal to make any contribution. She counterclaims that he wrongfully withheld some of the flat's title deeds, and when he vacated he took items of personal property belonging to her. It cost her to have the missing deeds replaced the sum of $3,190, and she has valued the items taken at $83,500. She counterclaims for these amounts. Mr Cho's reply to that is that he took the deeds because they are rightfully his; of the personal property, some he took because it was his, being stock-in-trade for the trading in goods he was then engaged in, some being consumables had been consumed by the parties when they were jointly residing in the flat; the balance he denied taking.

2. The parties met in 1982. Notwithstanding their age disparity, for he was then 44 and she but 18, the relationship developed to one of intimacy, and they began living together. How long they cohabited in intimacy is not agreed. But what is not disputed is that they lived together in various rental apartments until the Fa Yuen flat was purchased in 1989, and then in that flat until Mr Cho departed in 1999, not entirely voluntarily as I shall come to.

3. By the time they had got together in 1982 Mr Cho had worked in various jobs, mostly to do with Chinese opera and dancing. During the 1970's, on his account, he earned good money in the entertainment industry, sometimes as an actor, but more often teaching dancing and in choreography. However, he spent well too; by the 80's he had no accumulated savings. In 1981 he won $120,000 in the Mark Six. It is not clear what became of this. He says it was a parcel of funds from which he drew to lend to friends in need. When they repaid, it was relent. He could not readily explain how much was paid back and what happened to that; certainly no bank statements have survived. In 1982 he was working in a restaurant. Miss Mak was then a beautician. She operated a bank account with Standard Chartered Bank. It is his evidence that they used this account as a family account - he called it as such - that he was the primary provider meeting their shared expenses, allowing her to use her salary for her personal whims. He says that in 1984 he left the restaurant and began trading in commodities. This was a successful venture, he says; he made on average $18,000 per month. After family and other expenditure this left $4,000 to $5,000 profit which accumulated as savings month by month. He agreed that doing the maths this would have come to about $50,000 per year and thus $250,000 after five years. But he had to admit that the family account showed no sign of accumulated savings over the five years from 1984 and that in fact any surplus must have been spent.

4. Miss Mak dismisses all this as a fabrication. She says throughout their time together he paid little or nothing towards their expenditure. In fact they became hard up with little or no money; the rent fell into arrears and for a short time in 1985 she was obliged to take employment as a hostess in a nightclub in order to make more money. It was there that she met Mr Lee who was a customer attracted to her. The two became close, and then intimate. He wanted her to quit her job as a hostess and to allow her to do so began paying her $10,000 per month, an arrangement which continues to this day. He came to meet Mr Cho. Miss Mak introduced him as a relative who had fallen on hard times whom she was looking after; he bought this deception, and called Mr Cho 'Uncle'.

5. And so it was that in 1989 the Fa Yuen flat came to be bought. It is Miss Mak's account that the decision to do so was a shared one between her and Mr Lee. He said it should be in her name but that he would pay the downpayment, guarantee the mortgage and pay her sufficient extra to cover the monthly instalments. The purchase price was $790,000. The downpayment was $158,000 paid by Mr Lee. He also paid the legal expenses and real estate commission of about $10,000. The mortgage was for $632,000. The monthly instalments were $10,900. Mr Lee paid to her an additional $13,000 per month until the mortgage was cleared, in 1997.

6. Mr Cho presents a substantially different version. He says the parties as a cohabiting couple made the decision to buy the flat as their home, to safeguard for the future. It was bought in Miss Mak's name because he did not file tax returns and could not substantiate an income which was required before any bank would advance funds. She did file tax returns and moreover told him her friend Mr Lee was willing to go guarantor. And she told him:

"You ease your mind. I will definitely take care of you for the rest of your life. ...... You need not appear in front stage. It is better for us to have a steady place to live in."

7. He says he paid the downpayment and costs out of the accumulated savings. The balance borrowed on mortgage was $500,000. He was responsible for the monthly instalments.

8. The difficulty Mr Cho has about establishing this is that he got the figures wrong; the mortgage was indeed for $632,000 and not $500,000. Further, he is not able to show where the downpayment and costs of about $170,000 emerged from. On the other hand Mr Lee has come forward to confirm Miss Mak's account of how they came to meet and his financial involvement in her affairs; in particular to confirm he paid the downpayment and costs and the mortgage instalments. From bank statements produced both Miss Mak and Mr Lee have been able to point to the regular input of $13,000 per month into her account which paid for these.

9. In 1997 the mortgage was fully repaid. The title deeds were released to Miss Mak and she kept them at home, in the flat. She says that without her permission, or knowledge, Mr Cho took some of the documents. He says he did so at her behest, as the rightful 'owner' of the flat. He cannot however explain why he was not given all of them.

10. In 1999 Miss Mak decided that it was time for Mr Cho to go. Feigning that she had rented the flat to two friends of her brother, she confronted Mr Cho with the proposition, supported by the three men. Mr Cho agreed to leave and did so, but it was not until later that she realized that he had taken some of the deeds and the personal property that was hers not his.

11. Mr Cho's version is that he was intimidated and forced out of his own home by the physical presence of the three men and he had no alternative but to leave. He took the deeds because they were his and such of the personal property he admitted to because they were his stock-in-trade. Some of the property he was accused of taking he denied having done so; the consumable items had already been consumed.

12. Since then he has fallen on hard times. With no home in Hong Kong he went to live in Thailand where he lives to this day, mainly on charity provided by a friend. He is claiming an interest in the Fa Yuen flat as his only asset. He instructed solicitors in 2000 to pursue his claim. They wrote to Miss Mak. When there was no positive response he issued his writ, in February 2002.

13. Miss Mak meanwhile having discovered the loss of the title deeds and personal property made a report to the police but declined to follow up, not to appear petty. She instructed solicitors to complete on her behalf a declaration of loss, incurring their fees of $3,190. When she got the solicitors' letter of 2000 she was obliged to tell Mr Lee the true circumstances of her involvement with Mr Cho. He forgave her for her earlier deception. When the writ arrived she decided not just to defend it but to sue for the cost of replacing the deeds and reimbursement for the lost property. Mr Lee remained and remains supportive to this day.

14. It being on Mr Cho to overcome the presumption of Miss Mak's ownership in the Fa Yuen flat his claim as I find does not begin to get off the ground. His allegation that he paid the downpayment, costs and all the mortgage instalments is not supported by any other evidence at all. Indeed it is apparent from bank statements and other contemporary evidence that he lacked the wherewithal to pay for the flat. I accept as the truth, because it is supported by contemporary documents, that Miss Mak paid for it all because she was given the means to do so by her benefactor Mr Lee. Mr Cho lived in the flat for 10 years because she allowed him to do so. But he has no entitlement to it or any part of it. His claim fails.

15. I come to Miss Mak's counterclaim; first the cost of replacing the title deeds. She did not, it seems, call for their return. Instead she instructed solicitors to complete on her behalf a declaration of loss which incorporated the usual terminology:

"I immediately conducted an exhaustive search inside my home but was unable to locate any of the missing title deeds. I verily believe that the missing title deeds have been lost and can no longer be traced. I have never sold encumbered or otherwise dealt with the property or deposit(ed) or pledge(d) any of its title deeds and documents by way of security."

16. This is incompatible with her having reason to suspect their wrongful conversion by Mr Cho. The appropriate course would have been to demand their return. This not having apparently been done I do not find that Miss Mak has proved her right to reimbursement for the declaration of loss she ordered to be carried out.

17. I come to the items claimed to have been taken. Similarly the appropriate course would have been to demand their return and, in the absence of compliance, seek by way of damages the cost of their replacement, with evidence of worth. This was not, apparently, done either. Certainly there was no evidence before me. A claim in damages, with a bare allegation of ownership and value, is not enough. For want of proof this part of the counterclaim fails also.

18. I come to the issue of costs. This will be subject to the right for the parties to return to argue them. Both claim and counterclaim have failed. But the counterclaim is incidental to the defence; almost an afterthought. In the circumstances costs will be wholly to Miss Mak to mark the success of her defence.

19. Accordingly I order that the claim and counterclaim be dismissed with costs to the defendant taxed if not agreed; the order for costs is nisi at first instance. The plaintiff's own costs are to be taxed under Legal Aid Regulations.