CHEUNG HON HUNG v. SIU WAI CHUN

DCCJ874/2012

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 874 OF 2012

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JUDGMENT

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1. This is a case resulting from a broken relationship between a man and a woman who had been cohabitating together for a long period of time.

2. The issue I am asked to decide is whether a (i) resulting trust or (ii) common intention constructive trust or (iii) remedial constructive trust arising from unconscionable conduct has been successfully established by the plaintiff in relation to a property jointly occupied by them but registered in the name of the defendant only. 

BACKGROUND

The undisputed fact

3. The plaintiff and the defendant came to know each other in the 1970s.  They became intimately involved with each other towards the end of 1980s.  Soon they moved in and lived together as husband and wife but their relationship has never been formalised.

4. The subject matter of this action is a property known as “all that 2^nd Floor and Roof, Section A and The Remaining Portion of Lot No. 963 in Demarcation District No. 222, Pak Kong Village, Sai Kung, New Territories” (“the Property”).

5. By an assignment dated 28 January 1991, the Property was conveyed into the names of the defendant and one Madam Siu Kit Wah (“Madam KW Siu”) , the 7^th paternal aunt of the defendant.

6. The purchase price of the Property was at HK$590,000, which was financed by way of cash deposits in the sum of HK$190,000 and a mortgage loan at $400,000 taken out from HSBC. 

7. The mortgage loan with HSBC was taken out in the name of the defendant and Madam KW Siu, with the plaintiff acting as a personal guarantor for the full amount of the loan plus interest.

8. After renovation, the plaintiff and the defendant moved into the Property to live as cohabitees together.  The defendant’s mother also moved into and lived in the Property at the same time until she passed away in 2008.

9. By an assignment dated 15 September 1992, the joint tenancy between the defendant and Madam KW Siu was severed and the defendant became the sole registered owner of the Property.  No consideration changed hands between the defendant and Madam KW Siu in the assignment. 

10. In or about September 1995, the outstanding mortgage with HSBC was redeemed and a Deed of Release was executed by the bank on 25 September 1995.

11. The relationship between the plaintiff and the defendant turned sour and came to an end when the plaintiff moved out of the Property in or about October 2011. 

12. Since October 2011, the defendant has occupied the Property by herself.  

The plaintiff’s case

13. In a nutshell, the plaintiff’s case is that the defendant is only a nominee owner and she holds the Property on resulting trust; alternatively common intention constructive trust; or alternatively remedial constructive trust for his sole benefit absolutely.

14. The plaintiff claims that he had made the following payments in respect of the Property:

(i) The deposits in the sum of HK$190,000 for the initial purchase;

(ii) All the expenses associated with the purchase including stamp duty, legal costs and estate agent commission;

(iii) Expenses for the decorations and furniture incurred in 1991 when they first moved in the Property;

(iv) All mortgage instalments payable to HSBC;

(v) Redemption money paid in the sum of HK$265,453.83 paid to HSBC in 1995; and

(vi) Legal fees incurred in the redemption.

15. As a fallback position, the plaintiff says that the defendant holds the Property on trust for the benefit of the plaintiff and the defendant in such shares as to be determined by the court.

The defendant’s case

16. The defendant’s case is almost the complete opposite of that of the plaintiff’s.  She claims that she is the sole beneficial owner of the Property and the plaintiff had never contributed anything towards the price of the Property.

17. There is no allegation of gift or advancement on the part of the defendant.  Further, she is not making any counterclaim against the plaintiff.

Witnesses called at trial

18. The only witness on the plaintiff’s side was the plaintiff himself.  On the defendant’s side, beside the defendant, she also called one of her younger sisters Madam Siu Ping Kin (「蕭聘堅」) (“Madam PK Siu”) to give evidence.

DISCUSSION

19. In this case, it will be convenient for me to make my finding of the different factual issues first.  Then I will deal with the specific legal issues of this case, as defined by the parties under the agreed statement of the issues in dispute filed pursuant to the order of a master on 8 April 2013. 

20. I would like to stress here that while the parties almost disagree on every single factual issue raised in the course of this trial, fortunately, I do not need to make findings on all of them.  The reason simply is that not all of the matters raised are pertinent to the core issues which will determine the outcome of this case.  It is only on the important factual matters which are required to form the basis of my decision on the 3 specific legal issues that I will make findings on.   

21. However, before I do that, I would like to make some general comments on the credibility of the witnesses who have given evidence during the trial.

General finding on credibility

22. Overall, I do not find the plaintiff a particular impressive witness.  In my view, he is a very stubborn, opinionated and dictatorial person who almost always insists he is right in all things.  I find him to be rather arrogant and self-conceited, someone not only is unwilling to listen to others but would forcefully impose his own views on others, whether those views are right or wrong.  I also find him not having been honest with the court when he gave his evidence.  It is clear that he has selectively disclosed documents which are favourable to his own case while chose to discard documents which might not be helpful to his case.  In my opinion, he is a calculative and scheming person who has been secretly making preparations to take this case to court even at the beginning of the live-in relationship.  Further, I have no doubt that he was the dominant party in the relationship, with the defendant playing a much more submissive and subservient role.  I therefore have no hesitation to reject most, if not all, of his evidence.   

23. On the other hand, I find the defendant to be a much more trustworthy and honest person who has in the main been telling the truth.  She clearly is a much weaker character in the relationship.  However, I find her to be a frank and forthcoming witness who was willing to tell the court her side of the story in a straightforward and truthful manner.  On the whole, I find her evidence to be closer to be truth and more consistent with the contemporaneous documents produced at the trial.  Having said that, I do not accept everything she told the court.  It is clear to me that in some of the matters, she has muddled up with other events in her memory; while on others matters her accounts differed from those she had previously given to her lawyers for the purpose of preparing her defence and witness statements.

24. I find PW2 Madam PK Siu to be a completely honest and truthful witness who, while not shy in displaying her contempt towards the plaintiff when she gave evidence, was able to give a clear and candid account of what she knew and what she could recall.  I accept her evidence entirely.

Factual findings on different matters   

25. In this case, I do not believe that the purchase money of the Property has come from the plaintiff as claimed by him at all.  In fact, I do not believe that any of the deposits, mortgage repayment and money for the redemption has come from the plaintiff at all.  If anything at all, he might have contributed a little towards some of the associated costs incidental to the acquiring of the Property, like legal costs and agent fees.  However, I do not believe that he has made any contribution towards the initial deposits, the monthly mortgage repayments and the money to redeem the Property from the HSBC.

26. The purchase price of the Property in the sum of $590,000 can be divided into 3 categories:-

(i) The initial deposits in the sums of $10,000 + $49,000 + $131,000 = $190,000;

(ii) The monthly mortgage repayment (inclusive of interest) in a sum of about $5,500 per month x 55 months (ie from February 1991 to August 1995) at a total sum of around $302,500; and

(iii) The money to redeem the mortgage from HSBC in the sum of $265,453.83.

27. The defendant’s counsel submits that the payment of the legal fees for the purchase of the Property in January 1991, the renovation fees, the purchase of furniture and the legal fees for redeeming the mortgage in August 1995 do not touch on and concern the acquisition of the Property and therefore do not and will not affect the court’s determination on the beneficial interest of the Property.  I would agree with that submission.  I shall deal with them separately below.   

28. In evidence, the plaintiff tries to paint a picture that he was a successful contractor who used to own a fleet of vehicles and employed a large team of workers.  He also claims that his business had an annual turnover of over $5 million.  He claims to have regular business dealing with HSBC, Hang Seng Bank and the Bank of China.  He claims to have issued cheques to settle payments on a regularly basis.  He claims to have, with the assistance from his accountants, prepared the accounts for his business and reported his income to the Inland Revenue Department.  The evidence indicates that he had a sole proprietorship business in the name of “Wai Chun Trading Company” in 1981-82; another sole proprietorship called “Y Cheung Construction and Trading Company” in the mid-80s and a limited company in the name of “Astor Engineering Limited” in the late-80s.   

29. If he was indeed such a successful businessman / contractor as he claims himself to be, then in my opinion he has not much to show for it.  Save and except for a period of time in the early 1990s when he had money to speculate on some residential units at Uptown Plaza, Tai Po (where he seems to have made some quick profits), there was no bank account records to show that he had had the money to pay for the deposits or the mortgage repayments or the redemption of the mortgage.  While he had money to purchase a ground floor property at No. 103 at Pak Kong Village in Sai Kung (“the Ground Floor Property”) about 6 to 9 months after the purchase of the Property in question in his own name, he was not able to produce one single document for funds which is either under his own name or his control to show that he had in fact paid for the deposits, mortgage repayments and the redemption of the Property. 

30. This contrasts sharply with the conduct of the plaintiff in collecting the defendant’s bank and other personal documents without her knowledge over the years in preparation of the present litigation.  The plaintiff’s excuse was that he had lost confidence in the defendant and therefore he started to collect evidence in preparation for the litigation.  This was long before the present proceedings commenced.  These documents included:-

(i) The defendant’s tax documents including tax returns for the years of 1989/90; 1990/91; 1991/92; 1995/96;

(ii) The defendant’s current account statements for July 1995 and August 1995;

(iii) The defendant’s cheque stubs for the some of the expenses in relation to the redemption of the Property in August 1995;

(iv) Documents from the Rating and Valuation Department and the Inland Revenue Department challenging Madam KW Siu’s sale of her share in the Property at $200,000 to the defendant.

31. I agree with Mr Lam, counsel for the defendant, that what the plaintiff has done was trying to make selective discovery of documents, ie he would only disclose those documents which are helpful to his case but not those which might throw a bad light on his own case.  I believe the defendant when she said that it was the plaintiff who had told her to throw away the old documents.  Hence, she was no longer able to provide any documents in relation to the sale and purchase of the Property.  Of course, little did she know that the plaintiff had been secretly collecting photocopies of those relevant documents behind her back and would produce them in the present proceedings almost 20 years later.  Considering this was done not long after they started to live together, the only logical deduction is that the plaintiff had been scheming about obtaining the title of this Property even at an early stage of their relationship. In my view, it takes a very calculative person who could think of such scheme while still at an early stage of their cohabitating relationship.  I find such behaviour of the plaintiff despicable.

32. In my judgment, there is no doubt that the plaintiff is a much more sophisticated and business orientated person while the defendant is a rather simple if not naïve individual.  Before he ventured into business, the plaintiff was working as a driving instructor.  In fact, it was how they met.  She was his student.  The first business the plaintiff had was acting as a sole proprietor operating a transportation company which transport soils to and from construction sites.  Later, in mid-1980s, he traded building materials under the name of a different name, then he used the name ‘Y Cheung Construction and Trading Company’ to act as a main contractor before incorporating the limited company Astor.

33. The defendant claims that all along the plaintiff had asked her for money to help him with the starting of his business as well as running of it.  This she did through raising funds from her family members and friends.  The plaintiff promised that he would give half of the profits of the company to her when the business becomes stable.  I could well believe that.  That explains why the English name of the business was the same as the name of the defendant, ie “Wai Chun” eventhough its Chinese name was 「偉駿」.  I think this was one of the ways how the plaintiff acknowledged the financial contributions made by the defendant as related to the court by the defendant.  Despite the plaintiff’s denial, I find the defendant’s account on this much more convincing.   

34. The defendant worked at the canteen of HSBC from the 1960s to 1987.  She left the bank for 2 years before joining it again in April 1989 where she worked as an office assistant at its headquarters until her retirement at the end of December 1998.  In 1999, she continued working for the bank in the same post on contract term until she finally retired completely in April 2007.  As an office assistant, she was not earning a lot.  It was certainly not sufficient for her to save up to buy the Property or to repay the monthly mortgage after meeting her monthly personal expenses.  However, as the defendant has told the court, of which I believe, the majority of her money had come from her 7^th paternal aunt, Madam KW Siu. 

35. I believe the defendant when she says that her aunt and uncle (ie Madam KW Siu’s husband) had been working as butlers at a HSBC taipan’s quarters for about 40 years until their retirement and therefore had substantial savings.  As her aunt and husband have no children of their own, they always treated the defendant as their own.  I also believe the defendant when she said that her aunt and husband had received a substantial sum of retirement fund when they retired from HSBC.  I further accept the defendant’s claim that Madam KW Siu continued to work at a garment factory after her retirement from HSBC as a butler in the early 90s.

36. I believe the defendant’s reasons that, due to her 4^th sister’s impending marriage and the fact that she was staying at her sister’s flat at the time, there was a need for the defendant and her mother to find somewhere else to live.  I accept her evidence that it was a friend of the defendant who went to view the Property first due to her work.  Later she went with the plaintiff and the estate agent to view it together.

37. I do not accept the plaintiff’s explanation at all that when he gave his reasons of why he used the names of the defendant and the Madam KW Siu to buy the Property.  He said firstly it was more economical than paying rent.  This is no rocket science and everyone in Hong Kong knows that.  But it does not mean one has to use other persons’ names for the registration of a property.  Second, he said because this might affect his wife and children who were then living in public housing estate.  I simply cannot see how it could be the case when the plaintiff had already left them a long time before that.  If he cared so much for his wife and children, I suppose he would not have left them in the first place.  Thirdly, he said that he was afraid that due to the ups and downs in his contractor’s business, he might have no place to live should his business made a down turn.  I find this rather absurd as the plaintiff allegedly was doing so well at the time and had no qualm in using his own name to speculate on several Uptown Plaza properties and buying the Ground Floor Property. 

38. The plaintiff claims that during the discussion with the defendant, the defendant volunteered herself (「自動逞英」) to use her name to act as a temporary registered owner.  According to him, the defendant had promised that she would unconditionally return the Property to him should he need it at any time.  Therefore, he was at ease to start searching for the right property.  Given my view of the plaintiff’s character, I do not believe he is that kind of individual who would easily be willing to allow another person to register his or her own name for a property that was paid for by him.  In fact, if one were to look at the source of funds of where the money for the (i) deposits; (ii) monthly mortgage repayments; and (iii) redemption of the mortgage had come from, I do not think they had come from the plaintiff at all.

(i) Deposits of $190,000

39. I think the first and foremost thing to remember is that the Property was first purchased and registered in the names of the defendant and Madam KW Siu.  I find it difficult to believe that had the plaintiff paid for the deposits of the Property, he would not have insisted to put his name on it.  As said, I do not think the plaintiff is that kind of character who would lightly prepare to forfeit his rights had he even paid partly for the deposits, let alone the entire amount.  Given the dominant if not male chauvinistic character the plaintiff, I find it difficult to accept that he would not have insisted to register his name as one of the co-owners of the Property had he paid part of the initial deposits.   

40. I therefore do not believe the initial $190,000 deposits had originated from the plaintiff as claimed by him at all.  For the first deposit of $10,000, although it was initially paid by his cheque, I believe that was because the defendant did not have a current account at the time and it was paid by the plaintiff’s cheque first.  I believe the defendant when she said that this was subsequently re-paid to the plaintiff in cash.  For the further deposits of $49,000 and $131,000, the documentary evidence suggests that they were paid by cashier orders issued out of the joint account in the names of the defendant and Madam KW Siu.  As the defendant told the court, I believe the majority of the funds in this joint account had come from Madam KW Siu.  This explains why the Property was registered in their names and not in the name of the plaintiff.

41. While there are some discrepancies between the accounts given by the defendant as to the exact combinations made by the different members of her family to the funds in the joint account, I accept her case that the majority of those funds had come from her 7^th Aunt, ie Madam KW Siu.  I accept that while her mother and younger sisters might have also made some contributions, the bulk of the funds had actually come from Madam KW Siu.  That was the reason that her name was put down initially as co-owners with the defendant.  In my opinion, whether the funds had come from her 7^th Aunt, mother or sisters matters little, the crucial point here is that the deposits of $190,000 had all came from the defendant’s side of the family, with no contribution made by the plaintiff at all.    

(ii) Monthly repayments of mortgage

42. The plaintiff’s case on this is at the time of applying for the mortgage, it was his intention that he was going to discharge the monthly mortgage payments.  That was apparently what he had told the defendant.  He claims that Madam KW Siu also knew of his intention.  It was not his intention that either the defendant or Madam KW Siu should make the monthly repayments.  The plaintiff claims that he would use the $7,000 per month rental he had received from renting out the Ground Floor Property from March 1992 to June 1994 to give cash to the plaintiff to settle the mortgage repayments.  As for the periods when he did not receive any rental income, he would give cash generated from his business to the defendant to repay the mortgage.  He claims that save for a few time when he did not have sufficient money, the majority of the mortgage repayments were paid by him.

43. I do not accept the plaintiff’s evidence on this for several reasons.  First, if the plaintiff had paid for the mortgage, I would expect him to be able to produce at least some documentary evidence like his own bank account records to show that he had regularly drew out cash in similar amount to meet the mortgage repayments.  Second, given my view of the plaintiff’s character, I find it difficult to imagine that he would make all those payments without even keeping some evidence to show them, bearing in mind that he has secretly kept some of the defendant’s bank documents which was favourable to his case in order to produce it at the present trial.  Third, although the defendant was a bit confused about exactly from which account the repayments was being deducted during a particular period of time, what is significant to note is that the monthly repayments were either deducted from the joint account she kept with her 7^th aunt or her personal account (the same account which she received her monthly salary from HSBC).  It had never been deducted from any of the plaintiff’s account.

44. I accept the defendant’s evidence when she told the court that the money for the mortgage repayment had either come from Madam KW Siu or her mother.  She might not have mentioned all these accurately or in meticulous details in her witness statement or the defence prepared by her solicitors. However, in my judgment, this is not important in a case of such nature when a witness is asked to recall events happened almost 20 years ago.  In my opinion, giving evidence is not a memory game.  The court judges a witness’s credibility not by what they could or could not remember in the witness stand on a particular issue alone.  What is more important is the overall impression a witness gives to the court of whether he or she is telling the truth and whether the totality of the evidence actually matches with the contemporaneous documents and other evidence adduced in the case.

45. Of course the defendant’s case on this is supported by the evidence of Madam PK Siu who says that their 7^th Aunt, mother and sisters had all helped out and contributed to the repayments of the mortgage.  As said, I accept Madam PK Siu’s evidence in its entity.

46. Given that the Property was in the name of the defendant and Madam KW Siu (at least up to 1992) and the mortgage repayments were deducted either through her own account or the joint account with Madam KW Siu, I have scant doubt that it was the defendant, through the support of her 7^th Aunt and mother, who had paid the monthly mortgage repayments during the relevant period, with no contribution from the plaintiff whatsoever.  

(iii) The $265,453.83 used to redeem the mortgage    

47. The source of this sum has a checked history. It is important to set them out briefly to decide where the source of the fund has most likely come from.

48. The plaintiff sold the Ground Floor Property in 1995 and had received a large sum of money as a result.  He thought that he should redeem the mortgage of the Property with the HSBC as he did not want to bear further interest.  He said it was his own idea and not anybody else’s. However, the way he chose to go about it was quite peculiar.  Instead of paying the outstanding sum by cheque or into the defendant’s account, he would ask the buyer of the Ground Floor Property to pay the sum of $800,000 (which represented the second payment) into the defendant’s account.  The reason he gave was that as his company had outstanding litigations and he also owed money to his contractors and suppliers, therefore it was not convenient to put the money in his own account.  He allegedly told the defendant that the $800,000 was to “redeem the outstanding mortgage as well as for setting the outstanding sums from his company’s contracts, contractors’ fees, material suppliers and the like”.   

49. I do not accept the plaintiff’s explanation on this at all.  If he really had intended to redeem the mortgage of the Property by using part of the $800,000 received from selling the Ground Floor Property, all he needed to do is to open a cheque in the sum of the outstanding amount and repay the bank.  There was absolutely no need to mix up this sum with repayments of his outstanding debts with the contractors and suppliers. 

50. On this matter, I much prefer the defendant’s explanation.  She told the court that after the plaintiff sold the Property, he told her that he would deposit $800,000 into her account.  He told the defendant that she could use part of this sum to redeem the mortgage.  However, at the same time, he said that he needed to use the $800,000 to repay his many outstanding debts outside.  For that purpose, he asked the defendant to open a current account (with cheque issuing facility) for his use and allegedly for her use also.  Of course the defendant has always led a simple life style and paid everything in cash.  Therefore, there was absolutely no need for her to own a current account up to that stage in her life.  I therefore accept her evidence that the account was opened at the suggestion of the plaintiff and was mainly for his business use.  I accept her evidence when she said that the plaintiff had asked her to pre-sign a few cheques and that he would “fill in the figures” when he needed to use them.  Although the plaintiff denied that the current account was opened at his request, he agreed that he did use the account to settle his own debts in relation to his contracting business.  He admitted that the defendant did not even know how to fill in a cheque and all the cheques’ payees names and amounts were filled in by him.  The defendant merely signed them.

51. I accept the fact that by the date when the redemption took place, there was insufficient fund in the account to settle the outstanding amount required to redeem the mortgage.  I find the reason for this was due to the fact that the plaintiff had used up most of the money to settle his own debts and for his business through the cheques pre-signed by the defendant.  By the date of the redemption, only a small amount was left in the account.  The defendant only knew about this when her colleague at HSBC alerted her that there was insufficient funds in her account when the cheque given to the solicitors firm for the redemption of the Property was presented for clearing.  I further accept her evidence that she had to make use of a sum of $270,000 from a fixed deposit account with the bank to meet the outstanding amount.  I believe that those funds in the fixed deposit account had also mainly come from her 7^th Aunt (with part of it contributed by her sisters and mother) as related by the defendant to the court. 

52. However, I do not accept the defendant’s evidence that she had purchased a cashier’s order at $270,000 to pay for the redemption of the Property.  The documentary evidence clearly goes against her recollection on this.  The defendant has produced a cheque stub showing that the sum of $265,453.83 was used to redeem the Property[1]. The bank statement of the defendant on this account shows that the money came from a cheque number 025079 which was paid in on 23 August causing the account to be overdrawn.  On the next day, a sum of $270,000 was transferred to the account from a “saving/fixed deposit”[2]. I think the defendant must have mistaken about this.  I believe that the redemption of the mortgage was paid by the money from the fixed deposit account. However, I accept that the defendant’s mistake was more to do with the long lapse of time since the event rather than the defendant was trying to deliberately lie to the court.   

53. I reject the plaintiff’s evidence that the redemption amount at $265,453.83 was part of the $800,000 deposited into the defendant’s account by him.  I have no hesitation to further reject his claim that the $250,000 entered on 7 August 1995 as shown in the bank statement of the defendant’s account[3] was for the purchase of New Zealand dollars for 7-day short term high interest yield deposit using part of his $800,000.  I also find his allegation that he had added $18,500 of his own money to make up the NZ$56,000 deposit totally untrue and was fabricated by him to “perfect” his own story.  I find there was absolutely no truth in such wild allegation which was unsubstantiated by any contemporaneous documents.  While the plaintiff was carefully collecting cheque stubs for expenses in relation to the payment of the Property, I find it absurd that he would not even bother to keep this important cheque stub for this alleged sum of $250,000 used to purchase the New Zealand dollars.  To me, this demonstrates how low the plaintiff was prepared to go in order to make up some farfetched lies to suit his own case.  I have no difficulty in finding him as a dishonest and untruthful witness. 

54. For the above reasons, I find as a fact that the money used to redeem the mortgage at $265,453.83 had come from the defendant’s account with money transferred by her from her own fixed deposit account.  I further find that the money in the fixed deposit account was her own money which was mainly contributed by Madam KW Siu, with some help from her sisters and mother.

Other contributions

55. I accept that the plaintiff did make contributions to the Property like paying for the renovation when they first moved in[4].  The total of the renovation cost was at or around $66,970 as shown by the receipts issued in the name of “Wai Chun Trading Co”[5].  However, I agree with the defendant’s counsel that they would not constitute to part of the purchase price as a matter of law.  The same would apply to the purchase of furniture and payment of legal fees.

56. However, on the purchase of furniture, I would prefer the evidence of Madam PK Siu than that of the plaintiff’s.  I believe that the furniture was provided by Madam PK Siu and her daughter as gifts to the defendant when she first moved into the Property.  Her evidence on this is both clear and direct.  Madam PK Siu was able to give a vivid account of how she and her daughter had gone to the shop in Tsuen Wan to order the specific items of furniture.  Just because the name of “Mr Cheung” and his phone number was written on the invoice, I do not believe the money spent on the furniture was actually paid by the plaintiff at all.  I believe the defendant and Madam PK Siu’s evidence that the plaintiff’s name and particulars were filled in because he was acting as the contacting person for the delivery of the furniture as the defendant was having a full-time job at the time.

57. For the payment of the legal fees both on the initial purchase and redemption, I accept that the plaintiff might have paid for them.  However, in comparison with the purchase price of the Property, such sums are negligible.

58. I also accept the fact that the plaintiff had acted as a guarantor for the mortgage loan taken out in the name of the plaintiff and Madam KW Siu.  Given the age of Madam Siu and the defendant’s meagre income at the time, it is perhaps not surprising that the bank would insist a guarantor for the payment of the loan and interest[6].  However, just because he was willing to act as a guarantor does not in my view give him a proprietary interest in the Property.  Taking into consideration the fact that he was going to live in the Property with the defendant (who was his live-in partner at the time), I am not surprised that he was willing to act as guarantor for the mortgage loan.

59. However, I find that during the time when they were cohabiting together, as related by the defendant and Madam PK Siu, the plaintiff often borrowed money from the defendant and her family.  Not only had the plaintiff failed to make any regular contributions towards the general housekeeping expenses, I believe that in fact the defendant was subsiding him for living expenses over the years.  Thus, I find there is no truth in his allegation that he would pay the defendant housekeeping expenses from time to time.  I believe the defendant when she said that she paid for all the utility charges and her mother had paid for all the food and groceries while she was still alive.     

60. Another “strong” piece of evidence the plaintiff relies on is a CD-Rom containing the audio recording of a lengthy conversation between the plaintiff and the defendant on 4 August 1999[7] which was transcribed into a formal transcript prepared by a professional service company and produced as part of the documents in the case[8].  It is not disputed that a “recording made by mechanical means without human intervention is in the nature of real evidence and is admissible evidence, e.g. tape recordings (R. v. Maqsud Ali [1966] 1 Q.B. 688; [1965] 2 All E.R. 464)…” (see §38/1/19 of Hong Kong Civil Procedure 2014, p 761). However, I consider the relevance and the weight of the contents of such recording must be a matter for the court to decide.

61. In my judgment, it would take a rather mean if not shrew individual to think of recording a conversation like that and to use it years later to his advantage.  To me, that recording was no more than a emotionally charged conversation between 2 live-in partners who were experiencing a very low ebb in their relationship.  The defendant does not deny she said those things as recorded in the conversation between them. What she says is that she was trying to keep the plaintiff and did not want him to leave her.  It is clear from the transcript that the defendant was almost prepared to agree to everything the plaintiff put to her during the discussion.  I believe that the defendant was trying hard to salvage the then highly strained relationship between them. Given that she was almost 60 years old at the time and the plaintiff was the only man she had a serious relationship with in her whole life, I can quite understand her sentiment and why she was prepared to say anything in order to salvage the relationship.  It is clear that, despite all the faults of the plaintiff, the defendant loved him deeply and did not want to lose him.  At the time of the recording, the defendant desperately wanted him to stay with her in the Property together and to spend their remaining life together. 

62. Seen in such light, perhaps it is not surprising that the defendant was prepared to say anything the plaintiff had put to her during that conversation.  Thus, I am very sceptical as to how truthful or accurate the contents of that conversation were.  When comparing the evidence given by the parties under oath, I would much prefer to assess the credibility of the witnesses from what I could see and read in court than from some recorded conversation between two lovers in an emotionally charged discussion recorded some 15 years ago. 

63. I am aware that there are other side issues like details on the speculation on the Uptown Plaza properties, the purchase and registration of the Ground Floor Property, alleged purchase of stock by the plaintiff on behalf of the defendant and so on.  However, in my opinion, they are not important issues and certainly not crucial for the determination of the core issues this case.  I therefore will not go into them.

Findings on specific legal issues

64. Based on the above factual findings, I shall proceed to make my finding on the specific legal issues as defined by the parties in this case.   

Issue (1): Whether, having regard to the parties’ intention (whether expressed, presumed or implied) and the conduct at the time of acquisition of the Property, there ought to be a resulting trust arsing in respect of the Property.  If so, whether the Property ought to be held on resulting for the benefit of (a) the plaintiff absolutely; or (b) the plaintiff and the defendant in such shares as the court shall determine 

65. There is no dispute on the applicable law in this case. 

66. I agree with Mr Lam for the defendant that in a sole legal ownership case, the onus is upon the person seeking joint beneficial ownership to show that he has an interest at all: see Stack v Dowden [2007] 2 AC 432, at 454 §56.

67. First, I would like to state that as I find there is no evidence of any actual express intention on both sides as to whom should have the beneficial interest on the Property, hence what Deputy Judge Tong QC said in Lui Kam Lau & Anor v Leung Ming Fai [1994] 3 HKC 477 at 485F and Deputy Judge Johnson Lam (as he then was) stated in Ip Man Shan Henry v Ching Hing Construction (No.2) [2003] 1 HKC 256 at §134 does not apply in our case.

68. I agree with Mr Lam, Counsel for the defendant, that where the non-owner is able to prove by way of evidence that he has provided all the purchase money of the property, unless the principle of presumption of advancement or gift applies, it is open to the court to find that the legal owner holds the property on resulting trust for the non-owner. However, the burden to prove the non-owner has provided all the purchase money for the property falls squarely with the non-owner.  If the non-owner is not able to discharge the burden, the claim must fail.

69. Given my findings on fact above, I am of the opinion that all the deposits, monthly repayment on the mortgage and the subsequent money for the redemption of the Property had all come from the defendant, either through money from her 7^th Aunt Madam KW Siu, her mother or sisters or herself.  There is no question of the Property having purchased in the names of the defendant and Madam KW Siu with the money of the plaintiff in this case as in Lui Kam Lau & Anor v Leung Ming Fai [1994] 3 HKC 477. Thus, based on the evidence produced at trial, there is no question of any resulting created in favour of the plaintiff in this case.

70. In my judgment, the actual intention of the parties in this case is clear:  the Property was purchased in the names of the defendant and Madam KW Siu for their own interest and benefit.  The plaintiff was never a party to it and never meant to receive any beneficial interest out of it.  Madam KW Siu had clearly given up her interest in favour of the defendant in 1992.  I believe that she did so due to her old age and immobility.  That was her choice.  But that did not create any interest in favour of the plaintiff: see Ip Man Shan Henry v Ching Hing Construction (No.2) [2003] 1 HKC 256. 

71. As the intention of parties are in my view perfectly clear in this case, the usual situation of the imposition of resulting trusts on property conveyed into the name of another, or into the joint names of the purchaser and another where a cohabiting couple have each contributed to the purchase of their family home but have failed to make an express written declaration of trust as to their shares will not apply: see Underhill & Hayton, Law Relating to Trust and Trustees, 18^th edition, §25.2.

Issue (2): whether there ought to be a common intention constructive trust in respect of the Property.  If so, whether the Property ought to be held on trust for the benefit of (a) the plaintiff absolutely or (b) the plaintiff and the defendant in such a share as the court shall determine?  

72. Based on my finding of facts above, there is no question of any common intention to share the property beneficially in this case.  In the absence of such common intention, it would not be right for the court to make such a finding on the ground that it would be fair to do so in all the circumstances: see Lui Kam Lau & Anor v Leung Ming Fai, supra at p 487F-G, citing Viscount Dilhorne in Gissing v Gissing [1971] AC 886 (HL).

73. Hence, based on the evidence adduced by the parties and my findings, I hold that no common intention constructive trust has even been intended or created in this case.  As such, the plaintiff fails in his attempt to show that he has an interest at all based on this ground.    

Issue (3): Whether, having regard to the defendant’s assertion that the Property is solely hers beneficially to the exclusion of any interest at all on the part of the plaintiff, equity ought to intervene to impose a constructive trust in respect of the Property

74. Based on the factual findings I made in this case, there is in my view no question of any remedial constructive trust arising from unconscionable conduct as submitted by the plaintiff at all.

75. In my judgment, the situation in Baumgartner v Baumgartner [1987] 164 CLR 137 relied on by the plaintiff’s counsel where a non-owner is entitled to claim a share in the property on remedial constructive trust when the evidence shows that he/she has contributed to the purchase money of the property and it is unconscionable for the legal owner to refuse his/her claim simply does not apply in our instance case.  The reason simply is that the plaintiff has failed as a matter of evidence to establish that he had in fact contributed to the purchase price of the Property.        

76. Further, I agree with Deputy Judge Johnson Lam (as he then was) in Ip Man Shan Henry v Ching Hing Construction (No.2) [2003] 1 HKC 256 at 286 §90 that it is a moot point whether this kind of remedial constructive trust has taken root in Hong Kong in view of the different developments in England and Hong Kong in the context of constructive trust.  Like the learned judge, I would much prefer to apply the approach in respect of common intention constructive trust so as not to complicate matter unnecessary. 

CONCLUSION

77. In conclusion, I am of the view that the plaintiff has failed in establishing his claim by way of evidence in this case.  Therefore, his claim is hereby dismissed with costs.

78. I make an costs order nisi that the plaintiff to pay the defendant the costs of this action, such costs to be taxed if not agreed, with certificate for counsel.  The order nisi will become absolute 14 days after the handing down of this judgment unless the parties apply to vary the same.

79. It remains for me to thank counsel on both sides for the very able assistance they have provided to the court throughout this trial.