TSANG HIN YI HUBERT v. CHEUNG LAI PING

DCMP 3110/2018

[2022] HKDC 151

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 3110 OF 2018

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BETWEEN

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JUDGMENT

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A. THIS ACTION

1.  In this action, the plaintiff claims for an order for sale pursuant to section 6 of the Partition Ordinance (Cap.352, Laws of Hong Kong) (“the Ordinance”) and an order that the net proceeds of the sale be distributed between the plaintiff and the defendant equally.

B. FACTUAL BACKGROUND

2.  The following factual background is undisputed/indisputable.

3.  The plaintiff and the defendant were in a romantic relationship which started in around 1999 and lasted until around mid-2012.

4.  During their relationship, the parties had jointly invested in a number of land properties, including the subject property in the present case located in Tower 3, Park Central (將軍澳中心), No.9 Tong Tak Street, Tseung Kwan O, New Territories, Hong Kong (“the Property”).

5.  In the purchase of all those jointly-invested properties, the funds were contributed by the parties in equal shares, and when those other properties (other than the Property) were sold, the profits from the sales were shared equally between them.

6.  The Property was purchased by the parties in 2008 at the price of $3,900,000. They paid an initial deposit of $50,000 and further deposit of $340,000 on 15 June 2008 and 25 June 2008 respectively. Completion took place on 29 August 2008, when the Property was assigned to the parties as joint tenants. The common intention between the parties at that time was that the Property was to be beneficially owned by them in equal shares.

7.  The purchase of the Property was financed by a mortgage loan granted by the Standard Chartered Bank (Hong Kong) Limited (“SCB”), under which the parties were co-borrowers and co-mortgagors. The original loan amount was $2,730,000. The remainder of the purchase price in the sum of $780,000, together with stamp duty and other disbursements, was also paid on 29 August 2008 by the parties.

8.  The down payment for the Property mentioned above was contributed equally by the parties.

9.  After the purchase of the Property in 2008, the parties cohabited in the Property until around mid-2012[1] when their romantic relationship ended.

10.  The plaintiff moved out of the Property since then[2] and had never moved back, whereas the defendant remained in occupation of the Property.

11.  Up to the time when the parties broke up in mid-2012, they had contributed to the monthly repayments towards the mortgage loan equally.

12.  After their separation, the parties jointly applied to SCB to change the mortgage repayment account from an account under the plaintiff’s name to an account under the defendant’s name (“the defendant’s SCB Repayment Account”), and their appointed effective date for this change was 29 July 2012. The defendant also gave a standing instruction to HSBC by a form dated 26 July 2012 to transfer funds from her HSBC account to the defendant’s SCB Repayment Account for repayment of mortgage monthly instalments on a monthly basis with effect from 19 August 2012.

13.  By a Notice of Severance dated 24 July 2018, which was served by the plaintiff’s solicitors on the defendant on the following day, the joint tenancy of the Property was severed. Since then, the Property has been held by the parties as tenants in common in equal shares.

14.  Apart from the Property, the parties had also jointly purchased several other land properties including a flat situated at Tower 3, Residence Oasis (蔚藍灣畔), 15 Pui Shing Road, Tseung Kwan O, Sai Kung, New Territories (“the RO Property”) as joint tenants.

15.  The RO Property was bought with the assistance of a mortgage loan granted by Dah Sing Bank.

16.  By virtue of a tenancy agreement dated 19 July 2012, the RO Property was rented out for a term of 2 years from 1 August 2012 at the monthly rental of $21,500.

17.  On 26 July 2012, the defendant gave instructions to Dah Sing Bank (“DSB”) to change the mortgage repayment account for the RO Property from the parties’ joint names account with DSB to another DSB account under her sole name (“the defendant’s DSB Repayment Account”) with immediate effect. On the same day, the defendant also gave a standing instruction to HSBC to transfer funds from her HSBC account to the defendant’s DSB Repayment Account for repayment of mortgage monthly instalments on a monthly basis with effect from 19 August 2012.

18.  The RO property was subsequently sold. The Preliminary Sale and Purchase Agreement and Formal Sale and Purchase Agreement were dated 24 August 2013 and 6 September 2013 respectively.

19.  By a cheque dated 13 September 2013 which the defendant deposited into the plaintiff’s bank account, the defendant paid the plaintiff the sum of $17,524 being the round-up figure of the plaintiff’s half share of the difference between the initial deposit received from the sale of the RO Property ($250,000) and certain expenses.

20.  According to the said Formal Sale and Purchase Agreement, the transaction was completed on 22 October 2013. The plaintiff and the defendant did share the net sale proceeds equally out of this transaction.

C. THE PLAINTIFF’S CASE

21.  As his counsel put it, the plaintiff’s case is straight forward. It is said that the beneficial ownership of the Property is reflected by the way the parties held the Property. It was initially held by the parties as joint tenants. Upon the service of the Notice of Severance dated 24 July 2018, the joint tenancy was severed, since then the parties held the Property as tenants in common in equal shares. The common intention all along was that they would hold the beneficial interest in the Property in equal shares.

22.  The plaintiff stated that the parties treated this Property in no different way from how they held the other jointly owned land properties. They (including the Property) were intended to be owned by the parties equally.

23.  As the defendant had refused to purchase the plaintiff’s share in the Property nor to vacate the Property so that it could be sold in the market, the plaintiff asked for an order for sale, together with directions on the distribution of the net sale proceeds.

D. THE DEFENDANT’S CASE

24.  The defendant’s case is that when the parties broke up in mid-2012, there was a common understanding between them that the defendant would become the sole beneficial owner of the Property, because the plaintiff had agreed to gift all his beneficial interest in the Property to the defendant as remedy for the end of their romantic relationship.

25.  As a result, the plaintiff moved out of the Property, and she had become solely responsible for the mortgage repayments, utility charges and other expenses in relation to the Property.

26.  The defendant pleaded that:

“10. […] in around mid-2012, or around 29 July 2012,

10.1 The common intention of the Plaintiff and the Defendant in respect of the ownership of the Property had changed, and the Plaintiff has since been holding all his share in the Property on constructive trust for the Defendant.

10.2 Alternatively, the Plaintiff and the Defendant had formed a common intention that their respective shares in the Property would change such that the Plaintiff has since been holding all his share in the Property on constructive trust for the Defendant.

10.3 Alternatively, by reason of the said change of the common intention between the Plaintiff and the Defendant in relation to the Property, the Defendant has since been entitled to such share (to be assessed and in any event greater-than-equal) of the Property as is fair having regard to the whole course of dealing between the Plaintiff and the Defendant in relation to the Property. In particular, it is averred that the Defendant is entitled to such share in the Property as is correspondent to the Defendant’s share of the down payment, past and ongoing mortgage repayments, as well as future liability for mortgage repayments which the Defendant has since 29 July 2012 assumed […]”

(emphasis added)

27.  It should be reiterated that it is the defendant’s case that the common intention was changed in “around mid-2012, or around 29 July 2012”, but not at any other time.

28.  The defendant’s alternative case is that since about 2012, the plaintiff has represented by conduct that he would gift the entire or greater-than-equal share of the Property to the defendant (“the Representation”), and in detrimental reliance on the Representation, she has been making mortgage repayments from her own monies since around 29 July 2012, and as a result, it was said that the plaintiff is estopped from denying the defendant her reasonable expectation that she would receive the entire or greater-than-equal share of the Property.

29.  The defendant therefore claims for a declaration that she is the sole beneficial owner of the Property. Alternatively, she asks for a declaration that she is entitled to such beneficial share of the Property as the court assesses to be fair.

E. THE ISSUES

30.  On 20 November 2020, parties filed an agreed list of issues which included the followings:

(1) Whether the parties had formed a legally enforceable common intention in about mid-2012 that the beneficial ownership of the Property would change, such that: -

(a) the plaintiff would gift all his beneficial share in the Property to the defendant, such that the defendant should be the sole beneficial owner of the Property;

(b) or alternatively the defendant would be entitled to a greater-than-equal beneficial share of the Property, as is fair having regard to the whole course of dealing between the parties in relation to the Property, including by virtue of the defendant’s payment towards the purchase price and mortgage repayment in respect of the Property;

(2) Whether:-

(i) the plaintiff has made the Representation by conduct since about 2012;

(ii) the defendant has detrimentally relied upon the Representation in making mortgage repayments for the Property from her own monies;

(iii) the plaintiff has included, encouraged and/or acquiesced in the defendant’s reasonable expectation that she would receive the entire (or alternatively greater-than-equal) share of the Property;

and as a result the plaintiff is estopped from denying the defendant:

(a) the entire beneficial share of the Property;

(b) or alternatively a greater-than-equal beneficial share of the Property.

(3) If the answer to 1(a) and 2(a) above is in the negative,

(1) What is the defendant’s beneficial share of the Property;

(2) Whether the plaintiff is entitled to an order for sale of the Property under the Ordinance; and

(3) In the event of sale, how the proceeds of sale are to be divided between the parties.

31.  However, during the trial, the defendant’s counsel informed this court that:

(1) In the event the court does not accept the defendant’s case that there was any common intention between the parties that the plaintiff would gift all his beneficial interest in the Property to the defendant, the defendant would accept that an order for sale shall be made;

(2) If an order for sale is made, the defendant would accept that the net sale proceeds of the Property should be divided between the plaintiff and the defendant equally;

(3) He accepted that the legal principles on proprietary estoppel would not assist the defendant’s case in the event the court does not accept that there was any common intention between the parties that the plaintiff would gift all his beneficial interest in the Property to the defendant.

32.  In the light of the aforesaid positions, the only substantive matter which requires this court’s adjudication in the present case is whether there was any common intention between the parties that the plaintiff would gift all his beneficial interest in the Property to the defendant in around mid-July 2012 or around 29 July 2012. More particularly, given their consensus that their common intention before their separation in mid-2012 was to hold the beneficial interest in the Property equally, the issue here is whether there was any change of common intention between the parties on the beneficial ownership of the Property in around mid-July 2012 or around 29 July 2012.

33.  In the event this court decides that an order for sale should be made, I will deal with two minor differences between the parties at the end of this Judgment on the proposed order for sale.

F. THE APPLICABLE LEGAL PRINCIPLES

34.  In Chen Lily v Yip Tsun Wah Alvan (HCA 1695/2013, unreported, 7 December 2015), in which two ex-lovers sought declaration as to their rights in a property held in their joint names, Au-Yeung J held that the correct approach which should be adopted by the court should be as follows:

“17. Firstly, the pleaded case should be borne in mind. […]

18. Secondly, the court will first ascertain the true intention of the parties as to beneficial ownership and the share of it. Where a property is held in joint names, the starting point is that equity follows the law and so beneficial interest follows the legal title. All the more so when there was an agreement of the parties as to ownership.

19. In Jones v Kernott [2012] 1 AC 776, Lord Kerr states:-

‘68 The following appear to be the areas of agreement. (i) In joint names’ cases, the starting point is that equity follows the law. One begins the search for the proper allocation of shares in the property with the presumption that the parties are joint tenants and are thus entitled to equal shares. (ii) That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home or (b) that they later formed the common intention that their respective shares would change. (iii) The common intention, if it can be inferred, is to be deduced objectively from the parties’ conduct. (iv) Where the intention as to the division of the property cannot be inferred, each is entitled to that share which the court considers fair. In considering the question of what is fair the court should have regard to the whole course of dealing between the parties.’

20. Thirdly, the burden of proof rests on Ms Chen to demonstrate that the parties intended their beneficial interests to be different from their legal interests and in what way. This is an onerous burden. In joint names cases it is also unlikely to lead to a different result unless the facts are very unusual: Stack v Dowden [2007] 2 AC 432 at §§68-70. Lady Hale explains the situation thus:

‘68. The burden will therefore be on the person seeking to show that the parties did intend their beneficial interests to be different from their legal interests, and in what way. This is not a task to be lightly embarked upon. In family disputes, strong feelings are aroused when couples split up. These often lead the parties, honestly but mistakenly, to reinterpret the past in self-exculpatory or vengeful terms. They also lead people to spend far more on the legal battle than is warranted by the sums actually at stake. A full examination of the facts is likely to involve disproportionate costs. In joint names cases it is also unlikely to lead to a different result unless the facts are very unusual. … It cannot be the case that all the hundreds of thousands, if not millions, of transfers into joint names using the old forms are vulnerable to challenge in the courts simply because it is likely that the owners contributed unequally to their purchase. (Emphasis added)

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. (Emphasis added)

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.’

21. Fourthly, the court should avoid using “the balance sheet approach” in determining the contribution of each party: Stack v Dowden, Lord Walker:

‘33. In the ordinary domestic case where there are joint legal owners there will be a heavy burden in establishing to the court’s satisfaction that an intention to keep a sort of balance-sheet of contributions actually existed, or should be inferred, or imputed to the parties. The presumption will be that equity follows the law. In such cases the court should not readily embark on the sort of detailed examination of the parties’ relationship and finances that was attempted (with limited success) in this case. I agree with Lady Hale that this is, on its facts, an exceptional case.’ ”

35.  On appeal (Chen Lily v Yip Tsun Wah Alvan (CACV 4/2016, unreported, 28 October 2016)), Yuen JA had the following to say:

“A change in the parties’ common intention does not need to be express, but there must be some conduct of both parties from which a court could infer a change in common intention.”

(at paragraph 24.3)

36.  In Chin Nai Man v Chin Yat Keung Alex [2020] HKCFI 403, Madam Recorder Winnie Tam SC had summarised the legal principles applicable to common intention constructive trust as follows:

“10. The following legal principles are not in dispute. Legal ownership of a property is normally consistent with the beneficial entitlement. The onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership: see Chan Hin v Chen Bai Dyi (unreported, HCA 680/2014, 25.7.2017, Anthony Chan J) at §21; Stack v Dowden [2007] 2 AC 432 at §§56, 68. In the present case, the burden rests on the plaintiff.

11. In a domestic context, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust: see the recent Court of Appeal decision of Primecredit Ltd v Yeung Chun Pang Barry (unreported, CACV 246/2016, 21.7.2017) at §1.3 (per Lam VP).

12. In ascertaining the (alleged) common intention;

(a) The plaintiff must prove (i) there was a common intention between him and the defendant that the plaintiff was to be the beneficial owner of the property despite that it was acquired in the defendant’s name; (ii) the plaintiff altered his position in detrimental reliance upon such common intention; and (iii) it is unconscionable for the defendant to assert ownership in reliance on his legal title to the property;

(b) In ascertaining whether there was a common intention, it is the objective intention of each party which was reasonably understood by the other party to be manifested by that party’s words and conduct that one must examine;

(c) Such intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the property concerned based on evidence of express discussions. It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention;

(d) Even where reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested.

See Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9 at §§46-50, Godfrey Lam J, approved in WML v LCK (unreported, CACV 82/2014, 27.2.2015 at §41).

13. The modern approach in conducting the assessment is to adopt a holistic approach having regard to the context. Context was even described as a “fundamental consideration” : Chan Hin v Chen Bai Dyi (unreported, HCA 680/2014, 25.7.2017).”

G. WAS THERE ANY CHANGE IN COMMON INTENTION

37.  As aforesaid, the issue which has to be resolved herein is whether there was any change of common intention between the parties on the beneficial ownership of the Property in around mid-2012 or around 29 July 2012.

38.  There is no dispute that the defendant bears the burden of proof because it was her contention that there was such a change.

39.  When I consider the aforementioned issue, I have to take into account the credibility of various witnesses who had given evidence in court. In this regard, I bear in mind the following guiding principles which were set out in Hui Cheung Fai v Daiwa Development Ltd (unreported, HCA 1734/2009, 8 April 2014):

“77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce) […]

78. In deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: eg Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5^th May 2011) §39 (Chu J).

79. In determining a witness’ credibility, I have also attached importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses (Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §§36-37 (Bokhary PJ)), or from the assessment of the witnesses’ character (Esquire (Electronics) Ltd v HSBC [2007] 3 HKLRD 439 at §135 (Stock JA)).

81. The practical approach to assessing credibility of witnesses in a case such as the present may have best been summarised by the words of Robert Goff LJ, as he then was, in The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 57:

‘Speaking from my experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities.It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.’

82. Whilst these words were spoken in the context of a fraud case, I believe they are applicable to any case where a witness’ credibility features prominently in the court’s determination […]”

40.  With the above in mind, I now turn to consider the factual matters in the present case.

G1. The defendant’s email sent on 13 September 2013 (“the 2013 Email”)

41.  In my view, this is one of the most important documents which can shed light on the issue before the court. Given the unfortunate situation that both parties have allegedly lost their phone messages exchanged at the material time, the 2013 Email which was sent by the defendant to the plaintiff is, among all the messages exchanged between the parties which were placed before the court, the closest one to the date of separation, that is, mid-2012.

42.  Because of the importance of this email, I will first of all explain what had been contained therein.

43.  The 2013 Email is actually a short email, which includes only one line, which reads:

“上次同你商量後有這開支表，如有意見請回.”

44.  4 documents were attached to the 2013 Email. I will refer to these 4 documents as “Page 1”, “Page 2”, “Page 3” and “Page 4” of the Attachments respectively.

45.  Page 1 of the Attachments reads:

	收租		支出	(蔚南 + 將中)
15-7-2012	租 + 按金	= 64500 – (43000)	26/7	17310
3/9 3/10 3/11 3/12 3/1/2013 3/2 3/3 3/4 3/5 3/6 3/7 3/8 3/9	+ 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500 + 21500	\         收      + 279500 /	19/8 19/9 19/10 19/11 19/12 19/1/2013 19/2 19/3 19/4 19/5 19/6 19/7 19/8 19/9	- 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310 - 17310	\         支出 - 259650 /
Hubert 4/9 入數 17/9	+ 4000 + 2500	\        + 286000 /	租蔚南佣金: 支出 10750        – 270400 7/2012

46.  In paragraph 35.1 of the defendant’s witness statement, she explained:

“On the first page of the table, the column on the left represented rental income which I collected from the tenant of the RO Property from September 2012 to September 2013. The column on the right represented the mortgage repayments that I had made for the RO Property and the Property in the same period.”

(emphasis added)

47.  Page 2 of the Attachments reads:

15-7-2013[3] 8 9 10 11 12 1-2013 2 3 4 5 6 7 8 9

蔚南管理費   每月 1660 1660 x 15個月 = 24900  支出

將中管理費   每月 1270 1270 x 15 = 19050  支出

48.  Page 3 of the Attachments reads:

蔚南差响 + 地租		將中差响 + 地租
7月 – 9月 2012 10 – 12月 1月 – 3月 – 2013 4 – 6    – 2013 7 – 9 _________________	– 1935 – 1935 – 1935 – 3066 – 3066	7月 – 9月 2012 10 – 12月 1月 – 3月 – 2013 4月 – 6月 7月 – 9月 ____________________	– 1124 – 1124 – 1124 – 1647 – 1647
支出 – 11937		支出	– 6666
	Etta – 46953 ÷ 2 = 23476.5

49.  In paragraph 35.2 of the defendant’s witness statement, she stated:

“The second and third pages represented outgoings that I have paid for the RO Property and the Property from July 2012 to September 2013; and at the bottom of the third page was a calculation of the half share of such outgoings in the sum of $23476.5.”

(emphasis added)

50.  Page 4 of the Attachments provides that:

蔚南訂金 :

250000 ÷ 2

= 125000 – 30000 (當日2011–9月出左50000你) – 54000 (將中3000 x 18個月) – 23476.50 (由7/2012 – 9/2013所扣出的支出) – 17523.50 (To Hubert)

51.  In paragraph 35.3, the defendant stated that:

“The fourth page contained a calculation of a sum. It started off with a sum of $125,000, which is half of the $250,000 deposit which I paid for the RO Property. I cannot recall what the next two deductions in the sum of $30,000 and $54,000 refer to. The last deduction was the $23476.5, which corresponded with half of the outgoings for the RO Property and the Property from July 2012 to September 2013.”

(emphasis added)

52.  Pausing here, I think when the defendant referred to the “$250,000 deposit which I paid for the RO Property” above, what she meant was actually the “$250,000 deposit which I received for the RO Property”, as she had admitted in court that the figure of $125,000 represented the plaintiff’s entitlement of half of the initial deposit in relation to the RO Property. Further, if $250,000 was a sum which the defendant had paid, she would not have paid $17,524 to the plaintiff but she would have asked the plaintiff for reimbursement rather.

53.  The importance of these calculations and the defendant’s payment of $17,524 to the plaintiff is that they show that the defendant had asked the plaintiff for reimbursement for half of the mortgage repayments together with other expenses such as management fees, rates and Government rent in relation to the Property after their separation for the period up to September 2013. This contradicts the defendant’s case that the plaintiff had agreed to gift her his beneficial interest in the Property and her evidence that:

“[…] we had commonly intended that I have the entire interest in the Property and I would be making all the remaining financial contributions to the mortgage payments of the Property.”[4]

54.  If the plaintiff had really gifted the defendant his beneficial interest in the Property in mid-2012 with a common understanding that the defendant would from then on bear all the mortgage repayments herself, then even if she had boldly requested the plaintiff to share mortgage repayments after mid-2012, I would infer that the plaintiff would not have agreed to do so. Although the defendant stated that she did not wait for the plaintiff’s confirmation of his agreement before depositing a cheque for the balance into the plaintiff’s account, the undisputed fact is that the plaintiff did not raise any objection against the defendant’s calculation. Moreover, it appears that the calculation was done after some discussions between the parties: see further paragraphs 58 – 59 below.

55.  I have not lost sight of the plaintiff’s evidence that he did not make his own calculation at the time when he received the 2013 Email because he trusted the defendant. He even let her deduct an item of $54,000 from his entitlement even though he did not know what exactly that sum of $54,000 represented. However, that does not mean that he would have kept silent even if something such as the mortgage repayments for the Property were deducted when such amounts should not have been deducted as a matter of principle. There is obviously a difference between “trusting the defendant to do the calculation” and “allowing the defendant to make deductions against the alleged common understanding”.

56.  Perhaps because of her recognition that this was a weakness in her case, the defendant had made some assertions in court which were plainly in contradiction with what she stated in her witness statement and her other conduct, or were inherently improbable or against common sense.

57.  Firstly, it is noted that, on one hand, the defendant stated in court that the calculations were only made for her own reference, and even alleged that she did not take it seriously when she prepared them (“求其做[5]”); but on the other hand, she said that she would like to use the calculations to get a higher amount of compensation from the plaintiff. If the purpose of those calculations was to get more compensation from the plaintiff, I do not believe that she would take the matter causally. In fact, given her evidence that she thought the plaintiff owed her a lot in money terms, it would only be logical if she had treated the calculations very seriously so that she would not get anything less than her entitlement from the plaintiff.

58.  Attention should also be drawn to the covering email of the Attachments which reads “上次同你商量後有這開支表 ，如有意見請回”; and what she stated as the background of the 2013 Email:

“[…] I do not recall the exact circumstances in which that email was sent, but basically what happened was that the Plaintiff and I discussed by phone when it was clear finally that the RO Property could be sold. The 2013 Email was sent after that phone call […]”[6]

59.  In my view, it is more likely than not that after a purchaser of the RO Property was found, the plaintiff and the defendant discussed over the phone about what the next step should be, and they then agreed that the defendant should pay the plaintiff his 50% entitlement to the initial deposit received, subject to certain deductions. The defendant therefore did the calculations and paid the plaintiff accordingly. This led to the issuance of the 2013 Email (which referred to such a telephone conversation) and the deposit of a cheque into the plaintiff’s bank account.

60.  Secondly, the defendant stated in court that the purpose of the formula “46,953 ÷ 2” on Page 3 of the Attachments was to find out the average expenses spent on each of the 2 properties (the RO Property and the Property) rather than the share which each of the parties (the plaintiff and the defendant) should bear. She alleged that the figure of “2” in the above formula means “2 properties” but not “2 persons”.

61.  This apparently cannot be correct, because the figure of $46,953 was not the total amount of all expenses spent on the 2 properties but the net amount which was arrived at by deducting all such expenses from the rental income derived from the RO Property.

62.  The allegation which the defendant made in court also contradicted what she stated in her witness statement in which she described the sum of $23,476.5 as “half share of such outgoings”[7].

63.  Furthermore, the defendant explained in court that she did the calculation because she wanted to know the average amount of money required to maintain the 2 properties. However, by the time when the 2013 Email was sent on 13 September 2013, the RO Property had already been sold (the Preliminary Sale and Purchase Agreement was signed on 24 August 2013). There was simply no need to make such calculation at all. Moreover, I fail to see any meaningful purpose can be achieved by calculating the average expenses for each property for a period of 15 months.

64.  Thirdly, the defendant denied in court that the rental income earned from renting out the RO Property had been used to cover the mortgage repayments in respect of both the RO Property and the Property. However, the calculation on Page 1 of the Attachments clearly shows that in effect this was the case.

65.  Fourthly, the defendant also stubbornly denied that the plaintiff had reimbursed her any mortgage instalment since July 2012 for the Property. However, the calculation on Page 1 of the Attachments shows that she had deducted the plaintiff’s half share of the mortgage repayments from the initial deposit which the plaintiff was entitled to receive.

66.  The defendant was a successful salesperson who had worked in several finance service companies. I am sure she understood what she was doing in her calculation.

G2. Change of payment instructions

67.  In my view, the most forceful argument that the defendant could make in support of her case that the plaintiff had agreed to gift her his beneficial interest in the Property was that the plaintiff and the defendant had taken the trouble to give instructions to SCB in changing the mortgage loan repayment account for the Property – from the plaintiff’s sole name account to the defendant’s SCB Repayment Account. It might be said that if the common intention was to sell the Property as soon as possible after July 2012 as alleged by the plaintiff, then there was no need to make such a change.

68.  However, this argument has been much weakened by the fact that the same arrangement had been made by the parties in relation to the RO Property at around the same time under which they instructed DSB to change the mortgage repayment account from their joint names account to the defendant’s sole name account. In her witness statement, the defendant had given the following explanation:

“29. […] we were intending to sell the RO Property by or after the end of our relationship […]

30. As far as I can recall, I only suggested taking all the rental income from the RO Property because it was intended to be only a short period until the sale of the RO Property can be arranged. The sale of the RO Property ended up taking longer time than expected and the RO Property could only be sold about 1 year later. But in any event, both the Plaintiff and myself intended there to be continued rental income from the RO Property only over s short interim period after the end of our relationship.

31. Indeed, in July 2012, the Plaintiff and myself also arranged to change the mortgage repayment terms for the RO Property such that the repayment would come from my own bank account instead. The Plaintiff and I requested Dah Sing Bank to change the loan repayment account to a Dah Sing Bank account under my name (‘DSB Account’), and I issued standing instructions to HSBC to make automatic monthly transfers to the DSB Account for the purposes of repaying the mortgage for the RO Property […]

32. I emphasize that both changes in relation to the RO Property – my collection of the rental income and my payment of the mortgage loan – were made simply to avoid the potential difficulties and arguments if we still have to jointly manage the rent collection and mortgage repayment after our acrimonious separation. However, the Plaintiff and I have had no change of intention as to the ownership of the RO Property, which was only intended to be an investment property anyway, and the RO Property was indeed sold afterwards with the proceeds shared between us roughly equally.”

(emphasis added)

69.  If the same arrangement, namely, to replace an account held by the plaintiff with the defendant’s sole name account as the mortgage repayment account, was also made in respect of the RO Property despite the parties’ anticipation that it would be sold very soon for the avoidance of argument between the parties, I do not think this arrangement made in respect of the Property could assist the defendant much. The relationship of such a conduct with the beneficial interest of the Property is much vague than what the defendant argued it to be.

70.  The defendant alleged that it would be unfair to her if she were to bear the mortgage repayment solely when the plaintiff was allegedly still holding 50% beneficial interest in the Property, and that such unfairness shows that it could not be the intention between the parties that they were still holding the beneficial interest in the Property equally.

71.  On my part, I cannot see how it could be said that there was any unfairness as alleged, since she had been living in the Property all along, and it is evident that the monthly mortgage repayment amount was much less than the monthly market rental of the Property. Undeniably, the defendant had never paid any rent to the plaintiff for the period after their separation.

G3. No contribution from the plaintiff

72.  Another conduct which the defendant had relied on to show that there was a change of common intention was the fact that the plaintiff had made no contribution to the mortgage repayment after the parties’ separation.

73.  I accept that this conduct, if established, is consistent with and would support the defendant’s case that there was a change of the parties’ common intention.

74.  However, I have already explained my finding that, in relation to the period between mid-July 2012 and September 2013, the plaintiff did reimburse the defendant his half share of mortgage repayments together with other expenses such as management fees and rates. This, in my view, is inconsistent with the defendant’s alleged change of common intention, and is contrary to the defendant’s case that there was a common understanding that the defendant would be solely responsible for such repayments after the change of common intention in July 2012.

75.  The defendant also alleged that the plaintiff had not taken any initiative to contribute to the mortgage repayments from mid-July 2012 onwards, and it was said that this is because he recognised that, by virtue of the parties’ change of common intention, he no longer had any beneficial interest in the Property.

76.  In this regard, I accept the plaintiff’s evidence that at the material time, he expected that the mortgage instalments of the Property would be repaid by making use of the rental income earned out of the RO Property, and as a result, he did not think it was necessary for him to make any contribution on top of such rental income. This assertion is consistent with the defendant’s evidence, even though she said that it had taken much longer than expected for the RO Property to be sold.

77.  It seems that there was a fall-back position adopted by the defendant in that the plaintiff had not paid (and did not propose to pay) towards any mortgage instalments since October 2013.

78.  As a matter of factual finding, I accept the defendant’s evidence that she did not ask the plaintiff for any further contribution towards mortgage instalments, and on the other hand, the plaintiff did not propose to make any contribution after September 2013. I do not accept the plaintiff’s evidence given in court that he had contributed to the mortgage repayments from time to time after September 2013. If he did, he would have included such important evidence in his witness statement, but he did not do so. While he had referred this court during his cross-examination to a transfer of $20,000 which he made to the defendant on 14 July 2014, I do not accept that that was for the purpose of contributing to the mortgage instalment. This contradicts his own evidence that since the defendant was occupying the Property herself, he considered that he should not contribute further to the mortgage instalments.

79.  However, it should be borne in mind the defendant’s pleaded case which I have highlighted in the earlier part of this Judgment: the common intention was changed in around mid-2012 or around 29 July 2012. If the court’s finding is that there was no such change at that time, then that should be the end of the defendant’s case. Even if the plaintiff subsequently decided not to make further contribution to the mortgage instalments (for example, from October 2013 onwards), that would not assist the defendant’s case herein. It is not open to the defendant to argue now, for example, that there was a change of common intention upon the plaintiff’s failure to contribute to the mortgage instalments in late 2013.

G4 Communications between the parties

G4.1 August 2015

80.  Both parties alleged that they had messages in writing sent to the other side by phone in support of their respective cases but they had lost all those messages.

81.  As a result, apart from the 2013 Email which I have already discussed above, the earliest message in writing which was placed before this court was dated 27 August 2015 (i.e. around 3 years after parties’ separation).

82.  There were two documents bearing that date and both were sent by the plaintiff.

83.  The first one was an email (“the 2015 Email”) which stated that:

“你好，有關於以上物業，我本人也是與你有相同權利的合法法定業權人之一 (JOINT & SEVERAL TITLE)。經過你自購買後多年的佔住，本人也不斷向你商討怎樣處理業權的安排，但你不但裝作沒有回應，並沒有向本人繳交相應市值租金。本人(曾憲彝)重新向你聲明，這並非放棄本人的一切作為業主的權利，並且保留一切向你採取法律行動去追討業權(包括擁有和行使權利)，並且有可能會採取向你追討上述相應的市值租金作為對本人被你非法獨佔單位的補償。如果你再無法與本人妥善商討業權的安排，本人會聯合銀行去作進一步的行動，包括要求銀行主動拍賣物業。

本人避免你冤枉本人去打擾你日常生活而不到上述地址清理你私人物品， 不等于放棄我本人的應有法定權利。敬請你盡快與本人聯絡！”

84.  The second one was a letter (“the 2015 Letter”) which was sent by the plaintiff to the defendant by registered post:

“你好，有關於以上物業，我本人也是與你有相同權利的合法法定業權人之一 (JOINT & SEVERAL TITLE)。

經過你自(我和你共同付款)購買後多年的佔住，本人也不斷向你商討怎樣處理業權的安排，但你不但裝作沒有回應，並沒有向本人繳交相應市值租金。本人(曾憲彝)重申向你聲明，這並非放棄本人的一切作為業主的權利，並且保留一切向你採取法律行動去追討業權(包括擁有和行使權利)，並且有可能會採取向你追討上述相應的市值租金作為對本人被你非法獨佔該單位的補償。

如果你再無法與本人妥善商討業權的安排，本人會聯合銀行去作進一步的行動，包括要求銀行主動拍賣物業。

本人避免你冤枉本人去打擾你日常生活而不到上述地址清理你私人物品， 不等於放棄我本人的應有法定權利。敬請你盡快與本人聯絡！你對本人的多年哀求，置若罔聞，才出此方法溝通。本人很明白你貪得無厭的性格，很想獨佔該物業之權益，但我可向你重新這是沒可能，並且對於由這物業在這漫長溝通期間所引致一切開支，本人一概不負責，全因你故意逃避商討安排，本人如非到達退無可退及忍無可忍地步，絕不希望用法律解決，敬請諒解。

(敬請留意，萬一樓市市況有變化，而你又毫無積極回應，在不利情況下(例如樓價跌)，本人或不會簽名同意賣出或改變該物業業權。)”

(emphasis added)

85.  In my view, these documents support the finding that it is more likely than not that the plaintiff did not gift his beneficial interest in the Property to the defendant as alleged:

(a) By virtue of the said email and letter, the plaintiff alleged that he had been chasing the defendant as to how to deal with the Property in all those years but the defendant did not give any reply to the plaintiff. This allegation is consistent with the plaintiff’s evidence given in this trial, namely, that he had tried to approach the defendant repeatedly through his daughter and the defendant’s mother, but the defendant did not reply to him.

(b) It was alleged by the plaintiff therein that he was also a beneficial owner of the Property holding equal share with the defendant. This is also consistent with the plaintiff’s case herein.

(c) The 2015 Letter stated that “萬一樓市市況有變化，而你又毫無積極回應，在不利情況下(例如樓價跌)，本人或不會簽名同意賣出或改變該物業業權”. Again, this is consistent with the plaintiff’s case that the common intention had always been selling the Property.

86.  The defendant admitted in court that she did receive the 2015 Email and the 2015 Letter at the time. She also agreed that she did not make any reply thereto. I am most surprised that she did not feel the need to do so if she was truthful when she said that it was clear that there was common intention back in mid-2012 that the Property should belong to her solely. In my view, if this really was the first time that the plaintiff made his claim of ownership in respect of the Property after their separation, it is inherently improbable that she did not think it necessary to ask the plaintiff as to the reason why he suddenly changed his mind. This is particularly so when the plaintiff had made various allegations against her such as avoiding the plaintiff and making no reply to the plaintiff’s repeated requests to discuss about the title of the Property.

87.  Furthermore, the plaintiff mentioned about selling the Property in the 2015 Letter. If this had never been mentioned by the plaintiff before, this must come as a shock to the defendant, who had allegedly treated the Property as her own. Selling the Property would mean that she would lose her home. It is unimaginable that she would do absolutely nothing in response.

88.  The defendant said in court that she did not think she had to reply to the 2015 Letter because it came all of a sudden, and she was puzzled as to why the plaintiff would have to “vent” like that. She also stated that the plaintiff vented all the time to others. For the reasons aforesaid, these explanations are so unreasonable that I would not accept.

G4.2 November 2015

89.  Then there were some messages exchanged via WhatsApp between the parties in late November 2015. They were on a separate matter (the plaintiff’s request for the defendant to return his books and a pen which he kept in the Property). While the plaintiff did not make use of the opportunity (when the defendant finally gave him some replies) to urge the defendant in selling the Property, neither did the defendant ask the plaintiff to stop making up stories as per his 2015 Email and 2015 Letter. These messages are therefore not particularly helpful for this court’s purpose.

G4.3 2017/2018

90.  The plaintiff then sent the defendant two SMS messages. The plaintiff’s phone record did not show the exact year of those messages but the plaintiff told the court that these were probably sent in either 2017 or 2018. The wordings used were much stronger this time. The plaintiff threatened the defendant by saying that she’d better sell the Property as soon as possible, otherwise he would bring someone to the Property and talk to the defendant’s boyfriend and told him all the defendant’s “bad stories”.

91.  Again, the defendant did not make any reply thereto.

92.  While the defendant confirmed in court that, at the time of the trial, she was still using the phone number to which the plaintiff sent the above SMS, she said that she had missed those messages and she did not know that those messages had been sent to her. In any event, she did not deny that she had received these messages.

93.  I must say at the outset that I do not believe that the defendant had missed those messages. The defendant had had an intimate relationship with the plaintiff for over 12 years. It must be more likely than not that she would remember the plaintiff’s telephone number. His messages must stand out to the defendant.

94.  If the defendant did receive those SMS at the material time, it is difficult to understand why she did not reply to them and told the plaintiff to stop the nonsense (given her case that the plaintiff had gifted her the Property for a few years already by then). However, the defendant did nothing about it at all.

95.  The defendant’s counsel had reminded this court that the said SMS, if sent in 2017 or 2018, was pretty close to the commencement of these proceedings, and therefore they might have been sent by the plaintiff for the purpose of creating evidence in support of this action. This argument was made on the basis that these messages were the only ones which, as the defendant’s counsel submitted, “can marginally show that parties may had (sic) a discussion to sell the Property”[8]. This, in my view, has incorrectly ignored the 2015 Letter which I referred to above.

G4.4 Solicitors’ letters

96.  The first time when the defendant alleged in writing that the plaintiff had gifted the Property to her was by way of her solicitors’ letter dated 13 August 2018. However, I would give much less weight to this letter than the previous documentary communications (such as the 2013 Email, the 2015 Email and the 2015 Letter) because I regard them as “contemporaneous written documents and documents which came into existence before the problems in question emerged”[9].

97.  Hence, in my view, the communications between the parties tend to support the court’s finding that there was no change of common intention in around mid-2012 or around 29 July 2012 as alleged by the defendant.

G4.5 Loss of contact between the parties

98.  Before I leave this topic on communication, I should consider one more question, namely, what happened in the period between October 2013 (i.e. after the 2013 Email was sent) and July 2015 (before the 2015 Email and 2015 Letter were sent)?

99.  In their respective oral evidence given in court, both the plaintiff and the defendant admitted that after their separation in July 2012, initially they could still talk to each other. The defendant even said that they still cared for each other. Indeed, the 2013 Email shows that they had discussed about their land properties on the phone.

100.  However, it can be seen in the 2015 Email and the 2015 Letter that the plaintiff alleged that he could not contact the defendant. In this regard, the plaintiff stated in his witness statement that:

“29. I was keen to have the Property sold and to recover my investment from the Property. However, oftentimes, when I tried to contact [the defendant] to discuss about the Property, I was not able to get in touch with her. She would not answer or return my calls. I could only contact [the defendant]’s mother in order to get her to return my phone calls. [The defendant] only called me back after many attempts on my part to contact her.

30. Since about 2015, my calls to her were all directed to the answering machine. I suspect that she had blocked my phone number on her phone.

31. As I was unable to contact her, I was worried that she would take steps to take over my interest in the Property. I heard about cases of people successfully making claims of adverse possession against the registered owner. I was worried about this happening. I wrote her an email and a letter on 27^th August 2015 […]”

101.  It is worthwhile to point out that while the defendant did file a supplemental witness statement in response to, among other things, matters raised in the plaintiff’s witness statement, she did not deny the allegations made in the quoted paragraphs above. Neither did the defendant’s counsel cross-examine the plaintiff on those matters.

102.  I accept the plaintiff’s evidence that it was the defendant who suddenly failed to take or return the plaintiff’s calls. In my view, this would give support to the plaintiff’s case that he had all along been chasing the defendant to sell the Property. If the defendant was truthful in that she believed the plaintiff had gifted her the Property, I expect that there would have been evidence coming from her saying, at least, that she had told the plaintiff that his demand was unreasonable given his previous promise of gift. However, there was no evidence to that effect. It would be far more reasonable if, for example, the defendant refused to take/return further calls from the plaintiff after she had made her stance clear at least once. However, there was no evidence that she did that. The first time when she refused the plaintiff’s demand to sell the Property was on 13 August 2018 when her solicitors sent a reply letter to the plaintiff’s solicitors. This was 3 years after the plaintiff’s 2015 Email and 2015 Letter, not to mention the oral requests made by the plaintiff prior to August 2015. It is inherently improbable that she would have done nothing in all those years if there was really common intention of gift as she alleged.

G5. Alleged reason(s) for the plaintiff’s gift

103.  The defendant alleged that the plaintiff had gifted her his beneficial interest in the Property as a remedy because the plaintiff owed her a lot.

104.  In her Amended Defence and Counterclaim, she pleaded that:

“In order to achieve a break between the parties, the Plaintiff and the Defendant formed a common intention that the beneficial ownership of the Property would change in that the Plaintiff would gift all his beneficial share in the Property to the Defendant as remedy for the end of the said relationship.” (at paragraph 8.5) (emphasis added)

105.  In support of such a case, the defendant in her witness statement said that the gift was made “as a remedy for [her] many lost years in the unfruitful relationship”[10].

106.  In this regard, I must confess that this court simply is not in a position to assess whether it is inherently probable or improbable that the plaintiff would gift her his share in the beneficial interest in the Property for the alleged reason. The court has to look at other matters and decide on this issue.

107.  However, the defendant did not stop there. In her witness statement, the defendant attempted to expand her case in saying that there were more reasons for the gift. In paragraphs 11 and 12 thereof, she stated the following:

“11. For a good period of time before and after our end of relationship in mid-2012, the Plaintiff and myself had substantial discussions about our jointly invested properties. Due to lapse of time, it is difficult for me to recall the minute details of such discussions.

12. However, I can recall that eventually we did reach a common understanding and intention in around mid-2012 that we would sell the other jointly invested properties (including the RO Property and the MT Property) except for the Property, which the Plaintiff would gift to me. The gift was made as a remedy for my many lost years in the unfruitful relationship as well as financial contribution to the purchase of the other properties such as the RO Property and the MT Property. It was also because, by that time, the Plaintiff had started residing together with his another girlfriend at his property at Flat E, 18/F, Block 6, Belair Monte, No.3 Ma Sik Road, Fanling (‘Fanling Property’), and that was why he no longer needed to live in the Property. I agreed to let the Plaintiff live in his Fanling Property with his another girlfriend, so that I could continue live in the Property and have the entire interest in the Property. This financial re-arrangement would also hopefully achieve a somewhat cleaner break among the Plaintiff and myself.” (emphasis added)

108.  It has time and again been emphasised in different authorities that in civil cases, parties are bound by their pleaded case, and they cannot introduce unpleaded issues by “slipping in” evidence in witness statements. The principles are trite, and I only need to quote what was said by Chief Justice Ma in Kwok Chin Wing v 21 Holdings Ltd [2013] 16 HKCFAR 663 for this purpose:

“21. It should by now really be quite unnecessary to issue yet another reminder on the rationale behind pleadings. The basic objective is fairly and precisely to inform the other party or parties in the litigation of the stance of the pleading party (in other words, that party’s case) so that proper preparation is made possible, and to ensure that time and effort are not expended unnecessarily on other issues:- Wing Hang Bank Limited v Crystal Jet International Limited [[2005] 2HKC 638, at 643G-H (para 6(1))]. It is the pleadings that will define the issues in a trial and dictate the course of proceedings both before and at trial. Where witnesses are involved, it will be the pleaded issues that define the scope of the evidence, and not the other way round. In other words, it will not be acceptable for unpleaded issues to be raised out of the evidence which is to be or has been adduced. As the Court of Appeal remarked in Wing Hang Bank Limited v Crystal Jet International Limited:

‘(2) In a trial, particularly where evidence is given by witnesses, it becomes extremely important that each side knows exactly what are the live issues. Where issues are sought to be introduced that have not been adequately or properly pleaded, amendments must be sought unless the consent of the other party or parties has been obtained. It will simply not do for unpleaded issues to be ‘slipped in’ when evidence is being given in the hope that the other side is not sufficiently alert to object.’

22. […]

23. The purpose of pleadings, in clearly and unambiguously setting out the true extent and nature of a dispute not just for the benefit of the parties but also for the Court in managing and trying cases, remains important under our system of civil justice. The retention of the old rules as to pleading as well as the introduction of new provisions over four years ago under the Civil Justice Reform, reinforce this.”

109.  For that reason, the defendant should not be allowed to rely on her past financial contribution and the plaintiff having a new home with his new girlfriend in support of her case.

110.  In any event, I hold the view that these matters do not assist the defendant. I will explain the reasons in relation to the alleged financial contribution in this section of the Judgment. I will express my view on the defendant’s “new girlfriend” point in the following section (Section G6).

111.  As far as defendant’s financial contribution to the investments is concerned, the defendant stated that:

“Insofar as I can recall, I contributed mostly if not solely to the repayment of mortgage for the other properties, including the RO Property and the MT Property, until they were sold. Throughout a substantial part of the relationship between the Plaintiff and myself, I bore the greater share of our outgoings for our property purchases and investments.”[11]

112.  In answer to the plaintiff’s witness statement, the defendant further explained in her supplemental witness statement:

“4. As I said in D WS at §9, insofar as I can recall, I contributed mostly if not solely to the repayment of mortgages for our investment properties such as the RO Property and the MT Property. Even the funds for some of our property investments may appear on the books to be contributed by us in equal shares, the reality is very different.

5. As the Plaintiff acknowledged in P WS at §3, I had been a successful salesperson in several finance service companies with a high-quality clientele. This had been the case since before the start of the relationship between the Plaintiff and myself (until around 2011 or 2012, as I mentioned in D WS at §22). To the contrary, when I first knew the Plaintiff, he was not financially well off.

6. The Plaintiff and I started working together in the financial services industry after we met. I transferred my clients to the Plaintiff. However, I continued to be the one who maintained most, if not all, of these client relationships and found even more clients for the Plaintiff. The Plaintiff mostly worked on administrative matters. On the books, the Plaintiff may be the one who made some of the earnings, but in reality most of them were attributable to me and my work.

7. My very hard work over the years had been the reason why I was able to earn a lot of money for the both of us, so that we were able to make the property investments. Even if we may appear to contribute more or less equally to some of our property investments on the books, I was the one whose credit is really due for the funds for these investments. I believe both of us understood this reality.

8. Another way in which I contributed to the investments was that I would lend the Plaintiff money to help him make his payments when he did not have sufficient money to do so. For example, I recall that the Plaintiff did not have sufficient money to afford the down payment for the MT Property. I lent him money for that, and he only repaid some time afterwards.

9. I believe all these at least partly explain the Plaintiff’s motive behind his gift of the Property to me, which, as I said in D WS at §12, was partly as a remedy for my many lost years in the unfruitful relationship as well as my financial contribution to the purchase of the other properties such as the RO Property and the MT Property.”

113.  It can be seen that the defendant had made two additional points. The first one related to the allegation that the plaintiff’s wealth was earned by virtue of the defendant’s hard work. The second one was that she had paid for the plaintiff’s share in the investment.

114.  On the first point, I need only refer to the commission table which both counsel had referred to during cross-examination. It can be seen from that table that the plaintiff was the team leader, and there was an agreement between the employer on one hand, and the plaintiff and the defendant on the other hand, that the plaintiff would be entitled to the largest share of commission for business done by the “Hubert and Etta Team” (i.e. the team comprising the plaintiff, the defendant and some other team members). I do not think it would be up to the defendant to say that the plaintiff “owed” her anything by earning commission deriving from the work done by the defendant. That was the plaintiff’s entitlement. I therefore accept the plaintiff’s evidence that he thought there was no question of the defendant contributing more to the building of their wealth.

115.  On the second point, I do not accept that the defendant has made out her case.

116.  In that regard, it is important to bear in mind the plaintiff’s evidence that the couple’s finances had always been separate, as to which the defendant did not challenge. Even though they were lovers, when it came to investment, it appears that they did record their respective sums of money put into the investment clearly. For example, according to the defendant’s evidence, the plaintiff was unable to pay his share of investment when they jointly purchased a flat located at Metro Town (defined in various court documents in this action as “the MT Property”). As a result, the defendant had paid on the plaintiff’s behalf first. However, as the defendant explained in paragraph 8 of her supplemental witness statement, the plaintiff did repay the defendant for such an amount. I would therefore infer that they had made their calculations clearly (just like what the defendant had shown by the Attachments to the 2013 Email), so that there would be repayments or set-off, as the case may be, subsequently between the parties.

117.  The defendant alleged that she had contributed mostly if not solely to the repayment of mortgages of their investment properties such as RO Property. That is not supported by the calculation documents attached to the 2013 Email. To recap, these calculations were done for the purpose of ascertaining how much the defendant had to pay the plaintiff upon her receipt of $250,000 initial deposit from the sale of the RO Property after setting off such deposit against sums which the plaintiff owed her. Given the defendant’s evidence that she was minded to seek as much compensation from the plaintiff as possible, I have reason to believe that the defendant would have put down every deduction item that she could think of so that she could set off as much out of the plaintiff’s entitlement of $125,000 as possible.

118.  However, it can be shown from the said calculations that at the end of the day, the defendant, apart from mortgage instalments, management fees, rates and government rent incurred since July 2012 (the time when they separated), she had only set-off $84,000. In my view, this shows that the plaintiff did not owe the defendant any other sum apart from the said $84,000 as at the time of the calculation. Even if the defendant did lend the plaintiff any other sums of money for the purpose of their joint investment, the plaintiff had repaid her beforehand.

119.  In other words, as far as the RO Property and the Property were concerned (those were the two remaining properties held by the parties jointly at the time), the plaintiff did not owe the defendant any further money after the aforesaid set-off in September 2013.

120.  The above inference is also supported by the following matter. I note that according to paragraph 26 of plaintiff’s witness statement, after the sale of the RO Property, the plaintiff and the defendant had received $2,449,734.57 and $2,401,279.05 as net sale proceeds respectively. According to the plaintiff, $43,000 being the rental deposit paid by the tenant of the RO Property to the defendant had been deducted from the defendant’s share of the sale proceeds and such sum of $43,000 was transferred to the new landlord. Taking this $43,000 into account, the parties had received roughly equal amount of the net sale proceeds. The defendant did not dispute this part of the plaintiff’s evidence. Neither did the defendant say there was any adjustment between the parties afterwards. That being the case, in my view, that means the plaintiff did not owe the defendant any further amount of money by the time of the completion of the RO Property transaction in October 2013, which was around 1 month after the 2013 Email was sent, because otherwise the parties would not have given joint instructions to their solicitors for the cheques to be split in this way.[12]

G6. The plaintiff’s move upon separation

121.  It is undisputed that the plaintiff had moved away from the Property no later than July 2012.

122.  The defendant pleaded that the plaintiff had moved out of the Property in about mid-2012 “so as to fulfil his promise of gifting his beneficial share in the Property to the defendant”[13].

123.  However, in her own witness statement, she had given another explanation:

“12. However, I can recall that eventually we did reach a common understanding and intention in around mid-2012 that we would sell the other jointly invested properties (including the RO Property and the MT Property) except for the Property, which the Plaintiff would gift to me. The gift was made as a remedy for my many lost years in the unfruitful relationship as well as financial contribution to the purchase of the other properties such as the RO Property and the MT Property. It was also because, by that time, the Plaintiff had started residing together with his another girlfriend at his property at Flat E, 18/F, Block 6, Belair Monte, No.3 Ma Sik Road, Fanling (‘Fanling Property’), and that was why he no longer needed to live in the Property. I agreed to let the Plaintiff live in his Fanling Property with his another girlfriend, so that I could continue live in the Property and have the entire interest in the Property. This financial re-arrangement would also hopefully achieve a somewhat cleaner break among the Plaintiff and myself.” (emphasis added)

124.  So, it can be seen that in her witness statement, the “Plaintiff’s move” was described as a cause rather than a consequence of the gift. The defendant has therefore not made out her pleaded case.

125.  Putting aside the defendant’s departure from her pleaded case, I am of the view that her evidence that the plaintiff had moved to live with his new girlfriend could not assist her case anyway, because this supplies another strong reason as to why he decided to move away from the Property (rather than because of the alleged gift).

126.  In any event, I would not place much weight on the fact that the plaintiff had moved out of the Property when I consider the issue of whether the plaintiff had gifted the Property to the defendant, because in my view, the conduct is equivocal: After the parties’ separation, it is natural that they could not continue to live together under the same roof, so one party had to move away anyway, if such an option was available (which was indeed available in the present case).

127.  Before I leave this section of the Judgment, I should add that I found that the plaintiff was quite evasive when he was asked about moving to live with his new girlfriend. He tried to paint a picture as if his move away from the Property was only due to his new career in the mainland. I reject his evidence in this regard. Having said that, I do not think that would have any impact on the end result of the present case.

G7. Evidence of the plaintiff’s daughter

128.  The plaintiff has called his daughter (“the Daughter”) to give evidence in support of his case. The Daughter was born while the plaintiff was still married to his ex-wife.

129.  According to the Daughter, the defendant had complained to her about the plaintiff having pressed her (the defendant) to sell the Property after their separation. However, the defendant had only grumbled that there was no buyer instead of saying to the Daughter that the plaintiff had gifted the Property to her.

130.  When I assess the Daughter’s credibility, I bear in mind that she has blood relationship with the plaintiff only but not the defendant. Having said that, it was admitted by the defendant that she had had a good relationship with the Daughter in the past. I do not believe that the Daughter would, for the sake of assisting her father, give false evidence in the court of law.

131.  The defendant’s counsel challenged the Daughter’s evidence by saying that she did not state in her witness statement some of the matters which she mentioned in court, for example, that she had asked the plaintiff not to give too much pressure on the defendant in selling the Property, and that the plaintiff had told her that he would have 50% interest in the Property. However, I accept the Daughter’s explanation that she had only focused in her witness statement on what the defendant told her because she thought that would be far more important.

132.  I therefore find that the Daughter is a truthful witness, and accept her evidence that the defendant did tell her that she (defendant) had instructed agents to look for purchasers for the Property after her separation with the plaintiff. This could only happen if there was no change in the common intention of the parties in the beneficial ownership of the Property.

H. CONCLUSION ON CHANGE OF COMMON INTENTION

133.  Having considered the above-mentioned matters in the round, I find that the defendant has failed to prove, on the balance of probabilities, that there was any change of common intention in the beneficial ownership of the Property upon the parties’ separation in around mid-2012 or around 29 July 2012 as alleged.

I. THE ORDER FOR SALE

134.  As aforesaid, the defendant agreed that in the event this court finds that there was no change in the parties’ common intention to own the beneficial interest in the Property in equal shares, an order for sale shall be made herein.

135.  As far as the terms of the order for sale are concerned, parties have reached agreement on most of the details, save on two matters, namely:

(1) Which solicitors’ firm should have the conduct of the sale; and

(2) The amount of estate agent commission and auctioneer’s remuneration.

I1. Conveyancing solicitors

136.  The plaintiff proposed that his solicitors shall have the conduct of the sale. On the other hand, the defendant initially proposed that her solicitors should be appointed, but subsequently suggested that an independent law firm should be engaged.

137.  Mr Ho submitted that the rationale of the defendant’s latest proposal was to ensure that both parties’ shares and interests can be fairly represented. He cited the case of Lai Tai Miu, Rovana v Everest Timothy Wodehouse [2021] HKCFI 206 and submitted that a similar order had been made therein in the context of ex-partners and/or former cohabitees.

138.  There was no discussion in the Judgment in Lai Tai Miu, Rovana as to why an independent firm of solicitors should be appointed in that case, because that particular term was inserted into the court order by consent.

139.  On my part, I think ordering another solicitors’ firm to be chosen by both parties to conduct the forthcoming conveyancing transaction would possibly lead to further disagreement between the parties as to which firm should be instructed and this in turn would only render much legal costs to be incurred.

140.  Moreover, since parties have included a cap in the amount of costs which may be charged by the conveyancing solicitors, it may create another hurdle for locating a willing firm of solicitors.

141.  That leaves either the plaintiff’s solicitors or the defendant’s solicitors.

142.  Given this is the plaintiff’s action in which he has succeeded, I am of the view that it is more appropriate to let his solicitors have the conduct of the sale. Insofar as there is any hint that the defendant is worried that her interest is not protected should the plaintiff’s solicitors be entrusted with the conduct of the conveyancing transaction, such a concern is, in my view, unnecessary, since the plaintiff’s solicitors firm would be acting for both parties in such a transaction and therefore would owe the defendant fiduciary duty in protecting her interest as well as the plaintiff’s interest.

I2. Commission/remuneration

143.  The plaintiff suggested that instead of the usual 1%, the maximum amount of the estate agent’s commission and the auctioneer’s remuneration should be fixed at 1.5% of the sale price so as to allow more flexibility.

144.  I cannot see why there is such a need for flexibility. I would fix the maximum rate at 1%.

J. THE COURT ORDER

145.  I therefore make the following orders:

(1) Pursuant to section 6 of the Partition Ordinance (Cap. 352), there be an order for sale of the property, namely, ALL THOSE 128 equal undivided 720,495^th parts or shares of and in ALL THAT piece or parcel of ground registered in the Land Registry as TSEUNG KWAN O INLAND LOT NO.57 and of and in the messuages erections and buildings thereon now known as PARK CENTRAL (將軍澳中心), NO.9 TONG TAK STREET, TSEUNG KWAN O, NEW TERRITORIES, HONG KONG (“the Development”) TOGETHER with the sole and exclusive right and privilege to hold use and enjoy ALL THAT FLAT F on 6^th Floor of Tower 3 of the Development (“the Property”).

(2) The Plaintiff’s solicitors herein, Messrs. Lo Chan & Leung (“the Conveyancing Solicitors”), shall have conduct of the sale of the Property.

(3) The Property shall be sold with vacant possession at first attempt by private treaty at a price of not less than HK$10,500,000 or such other price as the Plaintiff and the Defendant may agree. The sale and purchase agreement shall be executed within 12 months from the date hereof and the date of completion of such transaction shall be within 2 months from the date of execution of the sale and purchase agreement, unless both the Plaintiff and the Defendant herein should consent in writing to any variation of the said time limits. However, in the event that the Property cannot be sold within the first 6 months from the date hereof, i.e. on the first day of the 7^th month from the date hereof, the Property shall be sold with vacant possession by private treaty at a price of not less than HK$10,000,000 or such other price as the Plaintiff and the Defendant may agree.

(4) Both the Plaintiff and the Defendant shall be entitled to instruct estate agents of their choice for the purpose of securing a sale of the Property by private treaty.

(5) On receipt of an offer for purchase of the Property, the Conveyancing Solicitors shall have the duty, authority and/or power to accept offer at or above the price as set out in paragraph (3) above, unless otherwise instructed by the Plaintiff and the Defendant jointly.

(6) If the Property cannot be sold and/or the sale and purchase agreement cannot be executed within the time-frame as stated in paragraph (3) above, the Property shall be sold with vacant possession by public auction with a reserve price of HK$8,320,000. If the Property shall be sold by public auction, the first public auction shall be held within 6 months from the expiry of the time limit for the execution of the sale and purchase agreement by private treaty sale.

(7) In the event of a sale by public auction as stated in paragraph (6) above, the Conveyancing Solicitors shall be authorised to appoint an auctioneer on behalf of the Plaintiff and the Defendant and to give all necessary instructions to the auctioneer thereon and to agree on the terms of auction, subject to consultation with the Plaintiff and the Defendant.

(8) The Plaintiff and the Defendant shall, upon request by the Conveyancing Solicitors, take all necessary steps to enable the sale and/or auction of the Property to proceed, including but not limited to authorising the Conveyancing Solicitors to contact the mortgagee bank for the release of the title deeds, ascertaining the amount to be paid for redemption and obtaining a discharge of the mortgage of the Property.

(9) Not less than 1 month prior to the completion of any sale of the Property, the Defendant shall deliver vacant possession of the Property to the Plaintiff’s solicitors, provided that at any time before that, the Defendant shall permit prospective purchasers or intended bidders at the auction sale to inspect the Property on reasonable notice given by the Plaintiff or an estate agent appointed by either the Plaintiff or the Defendant or the appointed auctioneer.

(10) The Plaintiff and the Defendant shall within 7 days of any request made by the Conveyancing Solicitors sign and execute all necessary instruments and do all acts as are necessary to effect the sale of the Property to the purchaser (whether under the offer accepted by the Conveyancing Solicitors or by way of public auction), failing which a solicitor of the Conveyancing Solicitors shall be appointed pursuant to s.38A of the District Court Ordinance (Cap. 336), s.8 of the Partition Ordinance (Cap. 352) and/or s.51 of the Trustee Ordinance (Cap. 29), to execute, on behalf of the Plaintiff and/or the Defendant, the necessary agreement, conveyance, assignment, and all other necessary documents (if any) to give effect to this Order and/or to convey the Property and all interest therein to the purchaser.

(11) The Conveyancing Solicitors shall be paid the following costs :-

(i) costs in respect of the conveyancing work of the Property in the case of a sale of the Property by private treaty (which includes the drafting, negotiation and attending to the execution of the agreement for sale and purchase, attending to the proof of title of the Property, attending to the completion of the sale and purchase of the Property, approving the draft assignment of the Property and attending to the execution of the assignment by the Plaintiff and the Defendant, obtaining a discharge of the mortgage of the Property and sending the same to the purchaser’s solicitors and inclusive of all communications with the purchaser’s solicitors in relation to the sale of the Property but is EXCLUSIVE of any legal costs payable to the mortgagee’s solicitors in preparing and executing a discharge of the mortgage of the Property on completion), which shall not exceed HK$10,000;

(ii) costs in respect of the conveyancing work of the Property in the case of a sale of the Property by auction (which includes the appointment of the auctioneer, drafting of the Conditions of Sale, attending to the inspection of title deeds by intended bidders; attending to the proof of title of the Property, attending the execution of confirmation of acceptance by the successful bidder; liaising with solicitors for the purchaser for the completion of the sale and attending to the completion of the sale and purchase of the Property, approving the draft assignment of the Property and attending to the execution of the assignment by the Plaintiff and the Defendant, obtaining a discharge of the mortgage of the Property and sending the same to the purchaser’s solicitors and inclusive of all communications with the purchaser’s solicitors in relation to the sale of the Property but is EXCLUSIVE of any legal costs payable to the mortgagee’s solicitors in preparing and executing a discharge of the mortgage of the Property on completion), which shall not exceed HK$15,000,

(the costs payable to the Conveyancing Solicitors under sub-paragraphs 11(i) and 11(ii) above shall hereinafter be referred to as “the Conveyancing Costs”); and

(iii) costs for work done in relation to the sale of the Property other than the conveyancing work charged under the Conveyancing Costs to be charged on a time spent basis, subject to the maximum of HK$15,000.

(12) The proceeds of sale of the Property shall be applied according to the following priority:-

(i) In discharge of government rent, taxes, rates and/or any other outgoings due and affecting the Property, if any;

(ii) In discharge of any prior encumbrances affecting the Property, including the mortgage to the Standard Chartered Bank (Hong Kong) Limited dated 29 August 2008 and registered in the Land Registry by Memorial No. 08092602380284;

(iii) In payment of the estate agent’s commission, conveyancing costs, legal costs and disbursements, auctioneer’s commission, and all other reasonable expenses payable or incurred for the purposes of or in connection with the sale provided that such estate agent commission and/or auctioneer’s remuneration shall not exceed 1% of the sale price of the Property, and the legal costs payable to the Conveyancing Solicitors pursuant to paragraph (11) above;

(iv) The remaining balance of the proceeds of sale of the Property be paid to the Plaintiff and the Defendant in equal shares, subject to sub-paragraph (v) below; and

(v) Out of the Defendant’s share of the sale proceeds, the settlement of the Plaintiff’s costs of the action herein.

(13) There be liberty to apply for further directions as to the manner of sale of the Property and generally.

(14) The Defendant’s counterclaim herein be dismissed.

K. COSTS

146.  I make a costs order nisi that the defendant shall bear the plaintiff’s costs of the action (including all costs reserved), with certificate for counsel, to be taxed if not agreed.

147.  If any party wishes to vary the costs order nisi:

(a) Such a party shall lodge and serve written submissions within 14 days hereof;

(b) The other party shall lodge and serve written submissions within 14 days thereafter;

(c) The applying party shall lodge and serve written submissions in reply within 8 days thereafter;

(d) The application shall then be disposed of on papers[14].

148.  The above order nisi shall become absolute in the absence of application to vary within the first 14-day period mentioned above.