TSANG YEE KAM v. YIP KWUN LUN, the executor of the estate of YIP SHING, Deceased

HCA 608/2014

[2020] HKCFI 553

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 608 OF 2014

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J U D G M E N T

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Table of Contents

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A.   Introduction

1.  In the present case, a mother is suing the eldest of her five children, who is the eldest son and the sole executor and sole beneficiary of her deceased husband’s estate.  The mother seeks various declarations that certain of her deceased husband’s assets were held on trust for her and/or she had/has beneficial interests therein.  I understand the other four of her children (“4 Siblings”) are all on mother’s side.

2.  Counsel Mr Richard Leung and Mr Tommy Cheung appeared for the plaintiff mother (“Mother”) and Counsel Mr Roland Lau and Mr Andrew Lau appeared for the defendant (“D”) at the trial.

B.   Background

3.  Mother was born in Mainland China in 1939 and was about 80 years old at the time of the trial.  Her husband Yip Shing (“Father”) was born in Dongguan in about 1931.  According to Mother, Father told her that he had reported himself to be a couple of years older in order to find a job after he came to Hong Kong with his younger brother to join their father, but Father had also often told her that he was 8 years older than she.  Anyway, after arriving in Hong Kong, Father started to work as a sewing machine technician.

4.  According to Mother, her father was a landowner in Mainland China and her mother Madam Leung Suet Fong (“Madam Leung”) was his 3^rd concubine.  Mother said her father died in 1940s when she was young, and she was mainly brought up by Madam Leung.  Later, according to Mother, Madam Leung came with her to Hong Kong and that Madam Leung had brought with her some gold ornaments and some money and that they were able to support themselves.  In about 1956, Mother started to work as a spinning and weaving worker. 

5.  Father and Mother met in a garment factory in Hong Kong and were married on 3 February 1960.  5 children were born out of their marriage, namely:

(1)  D (葉冠麟), the eldest son, born on 24 August 1960, now aged 59, who worked as a “clothings technician”.

(2)  Yip Ka Fai (葉家輝), a son, born on 17 September 1961, now aged 58, who is a police officer.

(3)  Yip Kam Har, (葉錦霞) a daughter, born on16 November 1963, now aged 56, who owns a fashion shop.

(4)  Yip Kam Yee (葉錦儀), a daughter, born on 25 May 1966, now aged 53, who is a housewife.

(5)  Yip Ka Kit (葉家傑), a son, born on 26 February 1968, now aged 51, who is an estate agent.

6.  It was Mother’s case that soon after her marriage to the Father, the Father’s own father Yip Kam Chuen (“Yip Senior”) and her mother Madam Leung jointly provided funds for Father to set up a business in buying and selling new and/or second hand sewing machines in Cheung Sha Wan called 榮生衣車公司/“Wing Sang Sewing Machine Company” (“Wing Sang”).  Mother worked as a helper in Wing Sang until the business ceased, and so did Yip Senior.  According to Mother, the business did not go well and often owed rent to the landlords and had to move several times.

7.  Due to the riots in Hong Kong in 1966-1967, Wing Sang had to cease business and Father had to go to Taiwan in about May 1967 to avoid his creditors.  Mother said she was pregnant at that time with the youngest child Ka Kit and that she left the 4 older children in the care of Madam Leung who was living in Kwu Tung in Sheung Shui while Mother worked in a bra manufacturing factory in Kowloon to provide support for the children.  During this time, Mother rented a bed space in Cheung Sha Wan to be near the bra factory.  

8.  Father returned from Taiwan in around late 1967 or early 1968, and the family together with Madam Leung then all moved into a flat in Chung Sing Building in Tai Kok Tsui (“Chung Sing Flat”).  Mother and D gave different versions as to when they and/or Father moved into Chung Sing Flat which I will come back to later in this judgment.  The Agreement for Sale and Purchase of the Chung Sing Flat (“SPA”) was initially signed by Madam Leung in 1968 but the assignment was signed by Father in 1970 (“Assignment”). It is Mother’s case that she had/has beneficial interest in this property and suffice to say at this stage, this is one of the major disputed issues.  What was not disputed was that although Madam Leung moved into Chung Sing Flat with the family, she later moved out, which D said was in about 1970-1971, but Mother said during the trial that it was in 1971. 

9.  After Father returned from Taiwan, Mother said she continued to work in the bra factory during the day and she also brought pieces home to sew at night to support the family as Father was unemployed for about a year.  According to Mother, it was in early 1969, that Father found a job at a handbag factory and the family then settled down and Father and Mother worked hard and were later able to pay off the mortgage on Chung Sing Flat in February 1976.  However, D said Father was all along the main bread winner.

10.  It would appear that as Father and Mother had a friend called 樊叔, or “Uncle Fan” who was living in Lau Fau Shan, they often brought the children to Lau Fau Shan during weekends. This led to a flat at 3^rd floor in Kei Yip Building in Lau Fau Shan being purchased in the sole name of Mother on 20 December 1977 (“Kei Yip Flat”).

11.  Father’s employment at the handbag factory was terminated in about 1978 and according to Mother, Father then became unemployed for about a year, and he and Mother later started to work as hawkers in Lau Fau Shan.  It was Mother’s case that she and Father then mortgaged Chung Sing Flat to secure general banking facilities for their hawker business which then developed into a business of parallel trading (水貨生意) namely buying goods in Kowloon and selling them to Mainlanders. Father moved to reside in the Kei Yip Flat followed by Mother.  3 of their children including D remained living in the Chung Sing Flat on their own while the other two moved to live with Madam Leung who helped to care for them.

12.  According to Mother, after several months, they started to make a profit out of their parallel trading business and in about 1980, 有榮行貿易公司or Yau Wing Hong Trading Co was established for their business (the original business and various businesses subsequently registered as being carried out by Father as a sole proprietor with name of Yau Wing Hong will be referred to herein collectively as “Yau Wing Hong”).  Mother’s case was that she and Father jointly held beneficial interest in Yau Wing Hong, and this is another of the major disputes in the present action.

13.  Although according to Mother that it was in 1980 that Yau Wing Hong was set up by her and Father, according to D, Yau Wing Hong was only commenced in 1983 and by Father as a sole proprietor, and that until it ceased business in 2004, Father was the sole beneficial owner of the business of Yau Wing Hong.

14.  On 14 November 1983, Shop 12, G/F at Yik Fat Building in Yuen Long (“Yik Fat”) was purchased in Father’s sole name (“Shop 12”). Thereafter, the parallel trading business of Yau Wing Hong was carried out at Shop 12.  Mother said she acquired a driving licence and she started to drive to deliver goods to customers of Yau Wing Hong and that Father never held any driving licence.  In her witness statement, Mother said she obtained her first driving licence at the age of 45 on 17 March 1984[1].

15.  Later in April 1986, another shop space Shop 16A, Wing Fu Mansion in Yuen Long was purchased in the joint names of Father and Mother (“Shop 16A”).  

16.  In 1986, according to Mother, as she noticed that there was a bus stop near Shop 12 and many passengers would pass by Yau Wing Hong, she then decided to change the business of Yau Wing Hong at Shop 12 to that of a store business selling various drinks, instant noodles and sandwiches etc and also selling sports items.  In 1988, as the bus stop was moved, the store business of Yau Wing Hong at Shop 12 then dropped drastically.

17.  It was in about 1990/1991 that Yau Wing Hong’s business at Shop 12 changed to that of an estate agency.  According to the extract from the register of the Estate Agents Authority, Father was a licensed estate agent holding the business of Yau Wing Hong Estate Agency while Mother was a licensed salesperson[2]. According to Mother, she was the one responsible for bringing in the business and taking clients to view the properties and that Father was only responsible for book-keeping and clerical work and later in 1992, Ka Kit also started working with her.

18.  By the time when Mother and Father started their estate agency business in 1990/1991, Mother was about 51 years old and Father was about 59 years old (or 57 years old).  Since then, Father and Mother had made both short term and long term investments in the property market with funds, according to Mother, generated by Yau Wing Hong and also by re-financing Shop 12 and Shop 16A.  They later also acquired properties in Mainland China.

19.  The properties bought and sold by Father and/or Mother during their marriage and prior to the Father’s death included those set out in Annex A attached herein.

20.  Those properties and the Sale Proceeds marked with “*” in Annex A are subject to disputes as set out in the Agreed Scott Schedule of Major Issues (“Scott Schedule”). 

21.  It was Mother’s pleaded case that she retired in 2000[3].  As seen in a handwritten note signed by both Father and Mother, in about May 2002[4], Yau Wing Hong suspended its business temporarily from 1 May 2001 due to bad business (“May 2002 Note”). Eventually, Yau Wing Hong formally ceased business in about January 2004.

22.  On 4 January 2010, Mother had a stroke and was paralysed from waist down and had to sit in a wheelchair.  After the stroke, Mother said she discovered that Father had a mistress in Mainland China and that he was giving away their joint savings to the mistress.  Upon such discovery, she decided to issue a Notice of Severance (“Notice”) in respect of each of the 5 properties which were held by her and Father as joint tenants (collectively “Joint Properties”), and to make a will giving her half share to all her 5 children equally and that according to Mother, this was done at a solicitors’ firm in the presence of all her children, including D.  Further, according to Mother, when later Father returned from Mainland and found out, he was very angry and was violent towards her.

23.  On 4 May 2013, Father had a mini stroke, and was sent to hospital where he stayed until 11 May 2013.  It was D’s case that Father then made the following financial arrangements after his discharge:

(i)  One morning in May 2015 after Father’s discharge from hospital, Father telephoned D and asked D to accompany him to the Wing Hang Bank in order to add D’s name to the Father’s savings account there to enable either one of them to withdraw funds singly.  Father apparently further told D to open an account in his personal name at the Wing Hang Bank so that in case anything happened to him, then D could withdraw funds from the savings account held in joint names and to transfer the monies to the account in D’s sole name.  After opening the account, they then returned to Shop 12A where Father asked D to pre-sign a few undated blank cheques, and thereafter Father would inform D of any changes to his funds.  According to D, prior to Father’s death, he had transferred funds from his account at Wing Hang Bank to his account at China Construction Bank to be placed on fixed deposits and Father had notified D[5].

(ii)  On 18 May 2013, Father was said to have given to D all the details of his 2 Mainland bank accounts (a savings account at the Bank of China in Dongguan (“BOC Dongguan”) and a savings account at the Bank of Dongguan), including the password and the bank cash withdrawal cards which were kept in a safe at Shop 12A together with Father’s Home Visiting Permit.

(iii)  Between 14 May 2013 – 24 May 2013, under the arrangement by D, Father made a will at a solicitors’ firm (“2013 Will”)[6], appointing D as sole executor and sole beneficiary of Father’s estate.

24.  The circumstances of Father making the 2013 Will will be further considered later.  Father died on 8 September 2013.

25.  It was not disputed that the night of Father’s death, after Mother got home, all the children gathered together in the Family House.  It was Kam Yee’s evidence that D then announced the contents of the 2013 Will and told them the original of the will was placed in the safe in Shop 12A. As D claimed that he did not have the key to the safe and that he only knew the code, Kam Yee then suggested that her husband Yim Shun Fat (“Yim”) could arrange for a locksmith to open the safe.

26.  On 10 September 2013, Mother, Kam Yee, Yim, Ka Kit and D gathered at Shop 12A for the opening of the safe, and it was D’s case that after seeing the 2013 Will, Kam Yee gave him 3 options for the collection of the funds held in Father’s 2 Mainland bank accounts (“Mainland Funds”), and that they demanded D to sign a letter of authorisation[7], acknowledging and understanding that Ka Fai and Ka Kit had authorised D to deal with all matters in relation to the Mainland bank accounts and that on or before 28 February 2014, D was to hand over all the Mainland Funds to Ka Fai, Ka Kit and D in equal shares (“10.09.13 Letter of Authorisation”).  D said he had no choice but to sign on the 10.09.13 Letter of Authorisation at the time, and Yim had signed as a witness.

27.  The Mainland Funds consisted of Father’s funds in his bank accounts held respectively at BOC Dongguan and the Bank of Dongguan totalling RMB 1,893,225, which were alleged by Mother to be funded by Father and Mother equally from their joint account and/or originated from the Sale Proceeds[8]. After signing on the 10.09.13 Letter of Authorisation, on the same day, Yim drove D across the border to Dongguan, firstly to the Bank of Dongguan to transfer a sum of RMB 1,003,225 from Father’s account to D’s account at BOC Dongguan, and then Yim drove D to the BOC Dongguan, to transfer another RMB 800,000 from Father’s bank account there to D’s bank account. 

28.  It would thus appear that at that time, the relationship between Mother and his 4 younger siblings Ka Fai, Kam Har, Kam Yee and Ka Kit on one side and D on the other had not yet broken down completely. 

29.  On about 19 September 2013, D applied for and obtained a new business registration certificate in the name of有榮行貿易公司/Yau Wing Hong Trading Co to carry on business as an individual at D’s residential address at Flat D, 38/F, Block 1, Greenfields, Fung Kam Street in Yuen Long[9].

30.  On 24 September 2013, Mother had signed an authorisation for D to collect rents from various properties on her behalf[10].

31.  D also proceeded to apply for probate of Father’s 2013 Will.  With no opposition from P or his other siblings, on 24 October 2013, probate was granted to D (“Probate”)[11].  

32.  It was D’s case that after Father’s death, Mother had frequently asked him to hand over the assets which Father bequeathed to him.  On the other hand, it was Mother’s case that notwithstanding signing on the 10.09.13 Letter of Authorisation, D had refused to hand over 2/3 of the Mainland Funds to Ka Fai and Ka Kit (each 1/3) as agreed by him in the 10.09.13 Letter of Authorisation.

33.  On 18 December 2013, Mother decided to transfer her 50% interest in the Joint Properties and also her interest Kei Yip Flat to the 4 Siblings as set out in the Annex A, excluding D and this was effected without D being informed.

34.  D refused to transfer 2/3 of the Mainland Funds to Ka Fai and Ka Kit, saying that he had obtained legal advice and the he could ignore the 10.09.13 Letter of Authorisation.  Upon his refusal and upon D learning Mother’s various transfers of her interests in the properties, the relationship between D on one side and Mother (and the 4 Siblings) on the other turned from bad to worse, and litigation then ensued between Mother and D.  The various litigations are set out later. 

35.  There were various accusations made by each side.  It was Kam Yee’s evidence that D had objected to the 4 Siblings visiting P at the Family House[12] and had even made a report to the police.  On the other hand, D said it was his siblings who had not allowed him to enter the Family House even though one half share of the property had been vested in him.

36.  After Mother issued the two actions in Dongguan (seen below) and the present action in Hong Kong, it was alleged that D had telephoned Mother on 22 April 2014 at about 12:30 am.  Later D received a warning letter from Mother’s solicitors alleging that he had harassed Mother.  D had denied that he ever called Mother at about 12:30 am as Mother would have gone to sleep by then.

37.  It was Kam Yee’s evidence that after the safe was opened on 10 September 2013, as D had signed the 10.09.13 Letter of Authorisation, everyone agreed that the safe should be refixed with a new lock and that D would give a set of the new keys to the safe to Mother, but D later went back on his promise and refused do so and also refused to share the Mainland Funds.  In the circumstances, Kam Yee said she then arranged for a technician to open the safe again and found that the MTR share certificates of 12,768 shares, the title deeds of the properties, HKD100,000 in cash and RMB 100,000 in cash, 3 Chinese silver ingots, a bag of pearls and about 100 silver coins, 100 old HKD500 notes and 100 old HKD100 notes which were inside the safe were missing.

38.  On the other hand, D alleged that on 1 May 2014, Shop 12A was burgled and that there were two safes in Shop 12A, one big and one small and both had been tampered with and the accounts and ledger books of Yau Wing Hong went missing and various other business documents and other items also went missing (“Burglary Incident”).

C.   The various litigations

C.1    The litigations in Hong Kong

39.  On 7 April 2014, P commenced the present action against D seeking declarations including that :

(i)  Father/D held/holds the Chung Sing Flat on trust for Mother and himself in equal shares

(ii)  Father/D held/holds Shop 10 on trust for Mother and himself in equal shares

(iii)  Father/D held/holds Yau Wing Hong on trust for Mother and himself in equal shares and Mother is entitled to a half share of the assets of Yau Wing Hong and/or belong to Yau Wing Hong as pleaded;

40.  As seen in P’s Closing Submissions, it was the Mother’s primary case that Mother and Father shared all subject properties (and the fruits generated therefrom) and the assets of Yau Wing Hong in equal shares under a constructive and/or resulting trust and then there were two alternative cases, namely (1) Mother and Father shared Chung Sing Flat and Shop 10 in equal shares under a constructive and/or resulting trust and (2) Mother and Father shared Chung Sing Flat in equal shares under a constructive and/or resulting trust.

41.  The Burglary Incident also led to D to issue a writ as plaintiff against Ka Kit on 21 March 2016 under HCA 735 of 2016, seeking an order that Ka Kit to return to D all properties taken away by D from Shop 12A and that Ka Kit was not to deny or obstruct D from having free access to Shop 12A.  The litigation progressed to exchange of witness statements in mid 2018.  The latest status was unknown.

C.2    The litigations in Dongguan

42.  On about 20 March 2014, Mother had issued two claims in Dongguan over the Mainland Funds, namely (1) a claim No 163 of 2014 against D and Bank of Dongguan for a sum of RMB 500,000 alleging the amount of approximately RMB 1m held in Father’s bank account at the Bank of Dongguan was joint marital property to which Mother was entitled to half (“1^st Dongguan Action”)[13]; and (2) a claim No 299 of 2014 against D and BOC Dongguan for a sum of RMB400,000 alleging the amount of approximately RMB 800,000 held in Father’s bank account at BOC Dongguan was joint marital property to which Mother was entitled to half (“2^nd Dongguan Action”)[14].

43.  The 1^st Dongguan Action was subsequently dismissed on 16 June 2014 due to Mother’s absence[15] and the 2^nd Dongguan Action was  withdrawn by Mother on 18 June 2014[16].

44.  Then, on 20 September 2016, D issued a claim No 21797 of 2016 (Guangdong 1971) in the Dongguan Court against Mother claiming that as he is the sole executor and sole beneficiary of Father’s estate, he should be entitled to 100% of the Dongguan Flat, and that the flat did not form part of the joint marital property of Father and Mother[17] (“3^rd Dongguan Action”).  Mother lost in the 3^rd Dongguan Action and she then appealed.  Her appeal was later dismissed by the Intermediate Peoples’ Court in Dongguan. 

45.  The Intermediate Court held that under the applicable relevant Mainland law in relation to the spouses’ marital properties, the spouses could agree to elect the governing law of their marital properties, which could be the law of the habitual residence or domicile of one of the spouses, or the law of the jurisdiction of where the main marital properties were located, and if there was no agreement or election by the spouses, then the governing law would be the law of their joint habitual residence and if there  was no joint habitual residence, then then governing law would be the law of their joint domicile.  As there was no agreement or election of the governing law by the spouses over the Dongguan Flat, and Mother was not able to establish that the habitual residence of her and Father was Dongguan, the lower court was not in error in adopting the law in Hong Kong in determining the interests in the Dongguan Flat.  Since there was no marital community property law in Hong Kong, Mother’s appeal thus failed[18].

D.   The general legal principles 

46.  As said by Cheung JA in Mo Ying v Brillex Development Ltd & Anor [2015] HKCA 156, [2015] 2 HKLRD 985, CACV 120/2014 (15 April 2015), the modern development of the law on constructive trust is found in the earlier landmark cases of Pettitt v Pettitt [1970] AC 777, [1969] 2 WLR 966, Gissing v Gissing[1971] AC 886, Lloyds Bank plc v Rosset and Another[1991] 1 AC 107 and more recently the highest courts in the United Kingdom and the Commonwealth have further elaborated on the common intention constructive trust principle in three cases: Stack v Dowden [2007] 2 AC 432 (HL), Abbott v Abbott [2008] 1 FLR 1451 (Privy Council) and Jones v Kernott[2012] 1 AC 776 (Supreme Court).

47.  As summarised by Cheung JA in paragraph 5.10 of his judgment, in respect of the trio of modern authorities, both Stack and Jones are concerned with the interest of cohabitants in a family home registered in their joint names.  The dispute is on the proportion of their respective interest. In Stack at first instance, both were held to be entitled to an equal share.  On appeal, the woman (defendant) was given 65% in view of the fact she paid all the mortgage payments and household bills.  The House of Lords dismissed the claimant’s appeal.  In Jones the County Court Judge found that the claimant was entitled to 90% of the property.  The Court of Appeal ordered equal entitlement.  The Supreme Court reversed the Court of Appeal and restored the original apportionment.  Abbott deals with the interest of a wife in properties registered in the sole name of the husband. The important feature in that case is that the husband conceded that the wife had a beneficial interest in the properties.

48.  In particular, and quoted by Cheung JA, Baroness Hale in Stack has stated at paragraph 60 :

“… The law has indeed moved on in response to changing social and economic conditions. The search is to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.”

49.  Further, as quoted by Cheung JA, Baroness Hale has stated in paragraph 69 in Stack more factors than financial contributions may be relevant:

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

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

50.  As further said by Cheung JA, in Jones, Lord Walker and Baroness Hale in their joint judgment further elaborated on the applicable principles on disputes in respect of family homes in joint names and family homes in sole name.  Cheung JA then summarised the principles in respect of joint name homes, where a family home is bought in the joint names of a cohabiting couple who are both responsible for any mortgage, but without any express declaration of their beneficial interests:

“(1) The starting point is that equity follows the law and they are joint tenants both in law and in equity.

(2) 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.

(3) Their common intention is to be deduced objectively from their conduct.

(4) In those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, “the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property”: Chadwick LJ in Oxley v Hiscock [2005] Fam 211, para 69. In our judgment, “the whole course of dealing … in relation to the property” should be given a broad meaning, enabling a similar range of factors to be taken into account as may be relevant to ascertaining the parties’ actual intentions.

(5) Each case will turn on its own facts. Financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended (as in case (3)) or fair (as in case (4)).”

51.  In respect of sole name family homes, Cheung JA has quoted in paragraph 5.17 of Mo Ying the following paragraph in the joint judgment of Lord Walker and Baroness Hale in Jones, as follows:

“52 … The starting point is different. The first issue is whether it was intended that the other party have any beneficial interest in the property at all. If he does, the second issue is what that interest is. There is no presumption of joint beneficial ownership. But their common intention has once again to be deduced objectively from their conduct. If the evidence shows a common intention to share beneficial ownership but does not show what shares were intended, the court will have to proceed as at para 51(4) and (5) above”

52.  Mr Lau had also on behalf of D referred to what was observed by Cheung JA in Mo Ying :

“On reflection, whilst it is tempting to do so, in my view, it is wrong in principle to elide the matrimonial regime with the constructive trust approach. The matrimonial regime is based on statute and supplemented by the common law which has been developed incrementally over decades before it reaches the present status of using equal share as the starting point. In the constructive trust approach, the matrimonial relationship is no more than one of the factors to be considered in the inference exercise. This factor should no doubt be given more weight because it is in the context of this relationship that the inference should be drawn but what one must not do is to too readily infer the existence of common intention of a claimant’s beneficial interest simply because of this relationship[19].”

53.  Chow J in Chan Sang and Chan Kwok [2015] 3 HKLRD 131 has held that as a matter of principle, there was no reason why the doctrine of “common intention constructive trust” could only be invoked in the “domestic consumer context”, although the context could be relevant in considering the parties’ common intention as to the beneficial ownership of a property purchased either in their joint names or in the sole name of one party. Rather, the presumption of equality applicable where members of the same family purchased in joint names a property which they intended to be and in fact was occupied by them as a home, would not apply outside the “domestic consumer context”.  In a “commercial context”, the presumption of resulting trust would apply[20].

54.  As asked by Lord Kerr in Marr v Collie [2017] UKPC 17, if what Baroness Hale described in Stack v Dowden as a “starting point” (that joint legal ownership should signify joint beneficial ownership) is to be regarded as a presumption, is it in conflict with the presumption of a resulting trust where the parties have contributed unequally to the purchase of property in their joint names?  Lord Kerr then said a simplistic answer to that question might be that, if the property is purchased in joint names by parties in a domestic relationship the presumption of joint beneficial ownership applies but if bought in a wholly non-domestic situation it does not, and in the latter case, it might be said that the resulting trust presumption obtains[21].

55.  Further, as seen in Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, there are two situations where common intention constructive trust may arise, namely (1) where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially; and (2) where there is no evidence to support a finding of any agreement or arrangement on the beneficially ownership of the property and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust, and in this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust, referring to the judgment of Lord Bridge of Harwich in Lloyds Bank Plc v Rosset [1991] 1 AC 107, 132[22].

56.  Cheung JA in his judgment in Primecredit Ltd has gone on to then ask what is the difference between the second limb of common intention constructive trust and a resulting trust and he had set out that there are two separate doctrines that have emerged from the cases on the rationale of a resulting trust, namely (1) a resulting trust is in response to the absence of any intention on the part of the person providing the purchase price to benefit the recipient (the lack of intention analysis) and (2) a resulting trust arose from the presumed common intention of the parties (the positive-intention analysis)[23].  Cheung JA then said that it was not necessary in that case to resolve the two opposite doctrines or the difference between the second limb of common intention constructive trust and resulting trust, as in his view, apart from resulting trust, the beneficial interest of the mother in that case could also be asserted under the second limb of common intention constructive trust[24].

57.  With the above general legal principles in mind, I turn to the facts of the present case. 

E.   The Scott Schedule

58.  There were 4 subject matters of “Major Issues” in the Scott Schedule (“Subject Matters”), namely those issues relating to (1) The Chung Sing Flat (2) Yau Wing Hong (3) Other Properties such as Shops 10,11,12,16A, Carparking Space and the Dongguan Flat, and (4) the Family. 

59.  Before I consider the agreed disputed issues in relation to the 4 Subject Matters and even though there was no dispute as to the validity of Mother’s wills, nor was there any dispute as to the validity of Father’s 2013 Will, I will first set out the circumstances in which they made their wills and my observations thereon before considering the 4 Subject Matters.

F.   The witnesses

60.  Mother made two witness statements on 9 August 2017, and the 2^nd one was stated to be her supplemental statement. Mother is of course the most important witness in this trial.  Although by the time of the trial Mother was 80 years old, she attended the trial and was subject to cross examination from about 11:30am on the 1^st day of trial until the morning of the 4^th day of trial.

61.  Kam Yee and Ka Kit had each made a statement and had attended trial to give evidence for Mother.  There were also 5 persons who knew both Father and Mother who had given witness statements to support Mother’s case, but subsequently, only 3 attended the trial to be cross examined, namely 麥業成 (“Mr Mak”), 張達賢 (“Mr Cheung”) and 盧旭芬 (“Mr Lo”).

62.  As for D, he and his wife Ho Wai Ping also known as Bonnie (“Bonnie”) had each made two witness statements, and both attended trial to be cross examined.

G.   Circumstances leading to Mother making her two wills

63.  Mother appeared to be in good health until she had a stroke in January 2010 when she was about 70 years old, since when she has been paralysed from waist down.  According to Bonnie, it was in about middle of 2010 that she and the other members of the family discovered that Father had a mistress and there were arguments between Father on one side and the other members of his family on the other.  Further, according to Kam Yee, upon discovery, D was very angry and had scolded Father severely, which led to Father remaining in the Mainland for months.

64.  D did not mention in his witness statement about Father having a mistress.  When asked during the trial, D had said he never saw the mistress and it was only Mother and Ka Kit who mentioned it.  D said Father never told him about having a mistress and that he never asked Father as he did not believe it, nor did he scold Father.  However, D later had also said under cross examination that he did have a talk with Father at the time asking Father to return less to the Mainland, and to spend more time with Mother.

65.  Anyway I do not find D’s evidence credible, since even Bonnie had said in her written evidence that in about middle of 2010 the family members said Father had a mistress and thereafter the relationship between Father and members of his family became disharmonious[25].  D must have been aware at that time that the relationship between Mother and Father had been affected by Mother’s discovery.  Mother said the mistress was called Yeung Siu Lai and that Father gave her HK$50,000 to open a curtain shop and that Father’s address on the purchase agreement for the Dongguan Flat was the address of his mistress in Dongguan.   

66.  It was the discovery which led to Mother to issue the Notices and made her will on 3 September 2010.  In the will, she appointed Ka Kit as the sole executor, and she bequeathed all her interest in Kei Yip Flat to Kam Har, and her residuary estate to all 5 children (including D) in equal shares (“1^st Will”).  

67.  It was Kam Yee’s evidence that the suggestion of the severance came from D who had asked Ka Kit to go and find solicitors in Yuen Long to prepare the Notices, and that the first time they went to the solicitors’ office, she and Ka Kit went with Mother and that the second time when Mother went to sign on 3 September 2010, all 5 of them were present.  On the other hand, D’s evidence was that it was Kam Yee and Ka Kit who took Mother to the solicitors’ office to prepare the Notices and the 1^st Will, and D said he did not go to the solicitors’ office and he had no knowledge of this until the time when Father made his 2013 Will.

68.  Anyway, when Mother was asked during the trial, she said she could not recall whether D was present but she confirmed it was D who had asked her to sign the Notices and to make a will.  It would appear from Kam Yee’s written evidence that after Mother had a stroke, Mother had asked D to hand over her monies, which had been kept in a joint account of Mother and D at the Wing Hang Bank, to Kam Yee to arrange for payment of Mother’s medical expenses and the living expenses of Father and Mother but this was refused by D until Father intervened and told D to hand over Mother’s monies which D eventually did in July 2010.  D on the other hand had explained that after Mother had the stroke in January 2010, she was hospitalised, and later after discharge, was sent to the United Christian Hospital Rehabilitation Centre and when D visited Mother at the Rehabilitation Centre in about middle of March, Mother had asked him to hand over those sums in their joint account.  According to D, he had already bought a cashier order on 16 March 2010 for a total of HK$1,182,864.29 and he later asked Bonnie to hand over the cashier order to Mother.  D had produced a copy of the passbook of the joint accounts as evidence of the withdrawal of the amount of HK$1,182,864.29[26].

69.  Notwithstanding Kam Yee’s allegation, there was no sufficient evidence that the relationship between Mother and D had soured after Mother had a stroke.

70.  It was not exactly when Mother discovered that Father had a mistress in Dongguan.  By all accounts, Mother’s discovery of Father having a mistress must have been a serious matter, and it must have upset Mother greatly and caused grave concern among her children, particularly when Mother just had a stroke.  As I have said, there was no sufficient evidence that by that time, D’s relationship with Mother had already soured to the extent that they were not on speaking to each other, and in fact Mother had included D to be one of her beneficiaries in the 1^st Will.

71.  As seen later, Father had said at the time when he executed his 2013 Will, it was his daughter who had suggested to Mother to sever the ownership of the Joint Properties of the Joint Properties.  Whether D was the one who suggested Mother to sever the ownership and to prepare a will or whether D was actually present when Mother signed the Notices and the 1^st Will or not, I am of the view that more probable than not that he must have known that at that time that Mother had signed and caused to be registered the Notices in respect of the 5 Joint Properties.  In fact, Father was informed of the severance and Father was sent a letter with copies of the Notices by Mother’s solicitors on the same day, namely 3 September 2010[27].  Father admitted that he had received a Letter, as seen later, I therefore do not find D’s evidence credible, that he did not know about it at the time.  Further, the main purpose of severing the joint tenancies was for Mother to make a will, which she did.  I am therefore also of the view that D must have known about Mother making the 1^st Will at the time.

72.  After signing the Notices and making the 1^st Will, Mother later authorised Father to handle her property transactions as per handwritten notes signed by Mother on 31 October 2010, and on 13 November 2010[28].  Further, on 28 February 2011, Mother also signed a letter of authorisation authorising Father to deal with all rental matters permanently in relation to her 50% interest in Shops 16A, 11 and 12[29] (“28.02.11 Authorisation”).

73.  It would thus appear notwithstanding the discovery of the mistress and having severed the joint tenancies and made her 1^st Will, Mother had continued to entrust Father in relation to the renting out of the properties and the collecting of rent therefrom, as before, and thus she had not lost all her trust in Father.

74.  It would appear that after Father passed away and when the 4 Siblings found out that Father had left everything to D, Mother was then taken to make another will on 25 September 2013 to supersede her 1^st Will about 2 weeks after Father’s death (“2^nd Will”).  In the 2^nd Will, she appointed Ka Kit as the sole executor, and bequeathed her residuary estate to Ka Fai, Kam Har, Kam Yee and Ka Kit in equal shares, this time expressly excluding D[30].

H.   Circumstances leading to Father making the 2013 Will

75.  Prior to the 2013 Will, Father had in fact made an earlier will  on 11 May 2001 (“2001 Will”)[31].  Under the 2001 Will, Mother was appointed the sole executrix and trustee and also sole beneficiary of Father’s estate.

76.  Notwithstanding the provisions of the 2001 Will, Father and Mother had signed a handwritten note on 1 June 2006 stating that Shops 10, 11, 12, 16A were not to be sold unless reclaimed by the Government for redevelopment purposes and that the 4 Shops were to be held by their 5 children in the shares specified therein (“01.06.06 Note”)[32].

77.  After Father’s stroke in 2013, according to D, one day, on about 14 May 2013, in the afternoon, Father telephoned him and said he had some important matters to discuss with him and asked him to go to the Family House.  Upon arrival, Father and Mother were waiting for him in the sitting room, and Father asked all the domestic helpers to go outside to the garden and to close the door and D then disconnected the video camera installed by Kam Yee in the Family House.  Thereafter, Father then told him that he wanted to make a will and asked him to find a solicitor who was not in Yuen Long, as Ka Kit had connections with solicitors working in the Yuen Long district. According to D, Father then told him that he would give him everything.  Mother also said as D is the eldest son, it was right to give everything to D.  D said he then agreed to help Father find a solicitor and that Father had also told him not to mention this to his other siblings.

78.  D said he went home that night and told his wife, and it was Bonnie who recommended a solicitor Mr Tse at the solicitors firm Tse Yuen Ting Wong for him.  The next day D telephoned Mr Tse to inform him that his father wanted to prepare a will and D was told all Father needed to do was to state that everything be given to D, but according to D after he told Father this, Father said this would be too simple and that Father wanted to list out in the will each and every property held under his name.  Mr Tse then suggested to D that Father should attend his office personally to discuss. 

79.  According to D’s witness statement, on about 16 May 2013, Bonnie, Father and Mother and a helper went to the office of Tse Yuen Ting Wong in Sheung Wan.  D claimed that as he had to go to work, he did not go with them.  According to Bonnie’s written evidence, at the meeting with Mr Tse that day, when Father indicated that he wanted to give all the assets to D, Mr Tse had said the will could simply state everything would go to D, but Father insisted on the properties held under his name be listed out.  According to Bonnie, as the addresses of the properties were not available at the time, Mr Tse suggested that Bonnie to provide with him the addresses of the properties to see whether Father and Mother held the properties as joint tenants and if so, there needed to be a severance first and that Father and Mother should bring along their Hong Kong identity cards for signing any notice of severance. Further, according to Bonnie, during the meeting, Mother had asked Father to gift the Family House to Ka Fai but Father refused.[33]

80.  On 24 May 2013, Father was to attend the solicitors’ office again for execution of his will and Father was asked to bring all the title deeds of the properties, but according to D, although he drove Father there, as his car had some problems on the way, he only dropped off Father, his helper and Bonnie at the building where the solicitors’ office was and D then drove the car to the garage.  In short, D said he was not present on Father’s two visits to the solicitors’ office. 

81.  D’s former solicitors had written to Tse, Yuen, Ting Wong on 26 October 2017 and the firm had sent to D copies of documents in their file in relation to the 2013 Will matter[34], which consisted of two handwritten attendance notes of Mr Tse, one 2-page note dated 20 May 2013 and one 1-page note dated 24 May 2013 and a copy of the 2013 Will.  No invoice or receipt were produced, and there seemed to be no follow up enquiries from D’s former or present solicitors.

82.  There was no attendance note of any meeting on or dated 16 May 2013.  In the 2-page attendance note dated 20 May 2013, it was recorded by Mr Tse that Father brought along certain title deeds of the properties which Father owned and which Father said he wanted to give to D.  It was not stated in the attendance note which properties the title deeds Father brought along for that meeting.  The contents of Mr Tse’s note reflected that Mr Tse had been already been give some information of the properties by Bonnie and that he already knew some properties were in joint names and some were in D’s sole name.  There was no record made by Mr Tse of Mother asking Father during the meeting to give his share of the Family House to Ka Fai, and instead Mr Tse recorded “[Father] said everything will be given to his son Kwun Lun. He talked to his wife who also confirmed the same.”

83.  Mother did not dispute that she did go with Father on the 1^st visit to the solicitors’ office.  She claimed she did not know that Father was going to give everything to D and said there was no reason as to why he should give everything to D. 

84.  Bonnie’s evidence in her 2^nd witness statement was that on the day of the signing of the 2013 Will, Father had asked her to record down his signing and that Bonnie then video-recorded the circumstances of Father signing the 2013 Will with her mobile phone.  A copy of the video recording (“Video Recording”) and a transcript thereof was produced by her. 

85.  The Video Recording was played during the trial.  Although Bonnie maintained that it was Father who had asked her to record, it would appear from the Video Recording that it was done at an angle and not directly at the Father.

86.  More importantly, there was no recording of Mr Tse explaining the contents of the 2013 Will to Father, or confirming his instructions with Father.  Neither the attendance notes of Mr Tse nor the Video Recording could show whether Mr Tse had followed those enquiries which should be made by the solicitor during an appointment with a testator who was elderly and not in good health, or the “Checklist” or the “Golden Rule” referred to by Cheung JA in Choy Po Chun and Anor v Au Wing Lun CACV 177 of 2017 in paragraphs 2.4-2.7.

87.  In particular, the Video Recording was only of Father at the time of signing and thereafter.  When Bonnie was asked during the trial, she said she had just acquired a new mobile phone and that she did not know how to use it and only managed to record the latter part about Father signing and what was said after signing.  I have to say I do not find Bonnie’s evidence in this respect credible at all and I do not find sufficient evidence that it was Father who told her to record his signing of the 2013 Will, and in my view, she decided only to record the part when Father was signing the will and thereafter and not when Father was explained the will. 

88.  Anyway, Mother had not objected to the production or admission of the Video Recording, nor was Bonnie cross examined on that part of her written evidence which was inconsistent with Mr Tse’s attendance note.  Mr Tse was not called.

89.  As seen in the Video Recording, Mr Tse had caused searches to be carried out at the Land Registry in relation to the Joint Properties and Mr Tse had explained to Father after Father had signed the 2013 Will that Mother had already severed the title of the Joint Properties. Father had said very little throughout the Video Recording, and although Mr Tse said Father did not know about the severance, Father did not actually say he did not know.  It would appear that Mr Tse had told Father and Bonnie that he did not print out all the Notices, and only saw on the search record that the Notices appeared to have been signed and registered on the same day and Bonnie had responded by saying that should be the case.  Later Mr Tse explained again that he only printed out the one in relation to the lot in Yuen Long [the Family House], and that if he had to print out the ones relating to all the Joint Properties, then it would cost more.  Father then responded that there was no need and that [Mother] had sent him a letter.  Mr Tse had asked him to clarify with his wife but Father said that it was the “daughter” who had advised Mother to sever the Joint Properties, and that he was “懞查查” and there was no need to print out all the rest.

90.  I find it quite clear from the Video Recording that both Father and Bonnie knew about the Notices.  There was no surprise expressed by either of them when told by Mr Tse the result of his search.  In fact, Father had referred to a letter which was likely to be the letter sent by Mother’s solicitors informing Father of the Notices.  In my view, Mr Tse was only asked to conduct the land searches, for sake of certainty. 

91.  As said earlier, Bonnie’s own written evidence was that Mother had asked Father during the meeting with Mr Tse on about 16 May 2013 that the Family House be given to Ka Fai.  Her evidence would in fact support Mother’s evidence during the trial that when she went with Father to meet with Mr Tse, she did not know that Father was going to give everything only to D.  Since Father did not sign any will on that day, and Mother did not go with him on 24 May 2013, it was not quite clear as to when Mother found out that Father did execute the 2013 Will giving everything to D.

92.  Under the 2013 Will, D was appointed the sole executor. Father’s interests in 7 properties including the 5 Joint Properties were specifically listed out and bequeathed to D, with D also being the sole beneficiary of the residuary estate.  

93.  The 7 properties in which Father’s interests were specifically bequeathed to D were:

(i)  Chung Sing Flat

(ii)  Shops No 10, 11, 12, 16A

(iii)  The Family House

(iv)  The Carparking Space

I.   Subject Matter (4) – Mother’s role in the family

94.  This is in fact the 4^th of the Subject Matters of the disputed major issues in the Scott Schedule but which I will consider first as this will form the backdrop to the other disputes.

95.  At the time of the registration of their marriage, Mother was about 21 years old and Father was about 29 years old (according to his HKID card) or about 27 years old (if he had reported himself being two years older).  Father’s reported address on the marriage certificate was on Berwick Street and Mother’s was on Kwai Lam Street.   

96.  During the trial, Mother said prior to her marriage, she was living with Madam Leung in a flat on Kwai Lam Street and that later Father also moved there.  After their marriage, Madam Leung moved out and the newlyweds continued living in the flat on Kwai Lam Street until after D was born.  In this respect Mother’s memory could have been a bit muddled, since at the time of D’s birth in August 1960, on his birth certificate, Father’s address was reported to be the same address on Berwick Street as on the marriage certificate.

97.  When Ka Fai was born in September 1961, Mother’s address was reported to be at Apliu Street.  When Kam Har was born in November 1963, Mother’s address was reported to be at 151, Cheung Sha Wan Road (which was the shop address of Wing Sang according to Mother).  Then, in May 1966, when Kam Yee was born, Mother’s address was reported to be on 5^th floor, 68, Cheung Sha Wan Road.

98.  Mother had said that when D was several months old, they were asked by the landlady to move, and the family then moved to the shop space rented by Wing Sang at no 151, Cheung Sha Wan Road (D said the shop was at no 149A) and they occupied the cockloft of the shop[35].  Mother’s evidence was that as there were 4 small children prior to Wing Sang ceasing business, it was difficult for them to rent a place to live together as a family, as landlords would not be willing to rent to a family with so many children, and that they had to sleep in the cockloft of the shop.

99.  In any event, it was D’s own pleaded case in his Amended Defence, and also D’s own evidence that the family was residing at the cockloft of Wing Sang shop from about 1960 – mid 1967.

100.  According to Mother, Yip Senior was also helping and sleeping in the shop, initially in the cockloft but later, Mother told him to sleep downstairs so that he did not have to climb up and down the stairs.  Further, Madam Leung was also living in the shop helping out.  Yip Senior later passed away before 1967.  

101.  Mother gave birth to the 5 children almost in succession between August 1960 and February 1968.  Madam Leung was helping Mother in caring for the children.  Mother said she had worked throughout those years and had 3 jobs including caring for the children, working in a factory and also bring pieces back to sew at home in the evening.     Mother said during the trial that when she received her wages, she would hand over to Madam Leung for safekeeping as Madam Leung liked to buy gold, and Madam Leung would give her back HK$10 a day to spend but then Father would take it from her, and that Father often assaulted her.

102.  Mother had said life was very hard at the time and the children were often ill.  Later when Wing Sang had to cease business and Father had to leave for Taiwan, the landlord of the shop evicted her and the children as they failed to pay the rent.  According to Mother all the sewing machines and stock of Wing Sang were at that time sold to a “收買佬”, or a rag and bone man, for HK$1,300 (although she said at the trial, it was HK$1,200) and the monies were given to the Father to buy a ticket to Taiwan and a blanket and/or also for Father’s living expenses there.

103.  As mentioned earlier, at the time when Father left for Taiwan, Mother was already pregnant with Ka Kit.  She said she rented a bed space at HK$22 per month in a building on Ki Lung Street in Cheung Sha Wan, to be close to the bra manufacturing factory in Tai Kok Tsui from where she was working.  She arranged for D, Ka Fai, Kam Har and Kam Yee to live with Madam Leung in a stone hut belonging to a friend in Kwu Tung in Sheung Shui and that she was only able to visit them during her holidays. 

104.  D’s evidence was however that as he and his siblings were born within a span of 8 years, Mother had to stay home to look after them and she had no time to go out to work[36].

105.  It was D’s pleaded case in the Amended Defence that the proceeds of the sale of the stock of Wing Sang were used to maintain the living of the family and subsequently used to purchase Chung Sing Flat[37].   It was also his evidence that it was Mother and Madam Leung who had told him that prior to Father leaving, Father had already transferred his money away to avoid his creditors and that D believed that those monies and the monies from the sale of the sewing machines/stock were used for the family’s living expenses after Father left and for the purchase of Chung Sing Flat[38].

106.  What D said was hearsay only and it was only his belief that the down payment of HK$6,000 for the purchase of the Chung Sing Flat had come from Father’s hidden savings and/or the sale proceeds of the sewing machines/stock of Wing Sang.

107.  Anyway, Mother’s evidence in her 1^st witness statement was that Father returned to Hong Kong at end of 1967 and that Ka Kit was born after Father returned.  As Ka Kit was born on 26 February 1968, Father would seem to have returned at about end of 1967 or early 1968, which was also D’s evidence.  Thus, this much was common ground.

108.  Mother’s written evidence was that when Father returned, he lived with the children and Madam Leung in Kwu Tung and that it was after Madam Leung signed the SPA on 21 October 1968 that the family moved into Chung Sing Flat.  On the other hand, D’s evidence in his witness statement was that Father suddenly turned up at where Madam Leung was living with the children in Kwu Tung one day towards end of 1967/early 1968 and brought them all to Chung Sing Flat, and that Ka Kit was born shortly after the family moved into Chung Sing Flat.  What is clear is that Ka Kit’s birth was reported and registered by Mother on 21 March 1968.  At that time, Mother’s reported address was already that of Chung Sing Flat.

109.  Notwithstanding her written evidence, Mother’s evidence during the trial was that in 1967, Madam Leung had gone to talk to the developer and the developer had allowed the family to move into the Chung Sing Flat earlier.  Mother said she could not now recall clearly when the family moved into Chung Sing Flat, but she it was prior to the mid autumn festival. It was not clear whether she meant mid autumn festival in 1967 or 1968 but she had also said by then Father had returned, which would more likely to be mid autumn 1968. 

110.  When Madam Leung signed the SPA, her address was stated to be that of Chung Sing Flat.  It would thus appear that by October 1968, the family had already moved in.  As the date of the Deed of Mutual Covenant was 2 July 1967, Mr Lau submitted that that the flat would have been ready for occupation at that time.  The Deed of Mutual Covenant was not produced and no occupation permit was registered in the Land Registry.  It was not clear exactly when the occupation permit was issued.  In any event, irrespective of when the occupation permit was issued, it was D’s own pleaded case that by early 1968, possession of Chung Sing Flat was already given to Father and Father together with his family moved to reside at Chung Sing Flat. 

111.  As the monthly instalments for the purchase price were to commence on 1 January 1968, I find it probable that possession of Chung Sing Flat was given to Madam Leung on about 1 January 1968. Although Mother had said in her written evidence that she and Madam Leung and the children moved in first as Father had not yet returned, her evidence during the trial was that the entire family including Father and Madam Leung moved in at the same time.  Having considered the evidence, I find it was probably not long after 1 January 1968 that the entire family moved to Chung Sing Flat.

112.  As it was common ground that Father did not return from Taiwan until end of 1967 or early 1968, even if Father did stay in Kwu Tung initially, it would not have been long. 

113.  Mother’s written evidence was also that initially, Father was not able to find a job for about a year and Mother continued to work in the bra factory during the day and would take pieces of bras and gloves home to sew at night.  It was also Mother’s written evidence that Father often stayed at home and that he would help her in sewing the various pieces of bras and gloves she brought back from the factory to work at home at night.

114.  According to Mother, it was not until early 1969 that Father found a job working in a handbag factory in Kwun Tong, whereas D said in his witness statement that Father initially found a job as a moulding machine technician/mechanic in a wig factory after moving into Chung Sing Flat and that it was several years later that he was employed by the handbag factory in Kwun Tong.  Also, it was D’s evidence that after Father returned from Taiwan, Father was the main bread winner in the family and that Mother only undertook some casual sewing work at home with meagre income and that Father was the main bread winner.  

115.  When Mother was asked whether Father had worked for a wig factory prior to working for the handbag factory, Mother said Father had only worked for a rattan factory after his job at the handbag factory was terminated, but not before.

116.  Anyway, D’s pleaded case in the Amended Defence was only that after Father’s return from Taiwan, he was employed by a handbag factory[39]. There was no mention by D in the Amended Defence of Father having worked in a wig factory for several years prior to the handbag factory.

117.  I find there was no sufficient evidence that Father had worked for a wig factory prior to working for the handbag factory. I find more likely that not that even if Father did find some work, it was on a casual basis only since the evidence seemed to show that it was only when Father started to work for the handbag factory “先捷” in Kwun Tong that his job and his income had become more stable and Mother said his salary was then HK$550 per month.  Mother was not really challenged on her evidence that Father’s salary was HK$550 per month at the handbag factory. Mother had also said her own income was about HK$500 per month.  In any event, at end of 1967 or early 1968, D was only about 7 years old then.  In my view, he would not really have any personal knowledge at that time as to when his father started to work for the handbag factory or his father’s earnings or mother’s earnings. 

118.  I accept Mother was often repetitive, muddled and confused when giving her evidence during the trial and at times, her oral evidence was not consistent with her written evidence.  However, I find this understandable as she was about 80 years old at the time of the trial and she was giving evidence on events which took place over half a century ago.  She was cross- examined for almost 3 days and in fact, if she could not recall, she did say so and sometimes when she got matters wrong, she had accepted that she was wrong.  As pointed out by Mr Leung, Mother’s memory and/or recollection of older events was much better than more recent evidence, and I accept that this could be because she had suffered from a stroke.  On the whole, even though Mother was giving evidence against a deceased person, I find Mother’s oral evidence sufficiently lucid for someone of her age and condition and I find her generally a credible witness.

119.  Mother also appeared to be of a strong and independent character.  She had said at the time when she first started working, everyone called her “曾姑娘” and this was how she was addressed during the trial.  Apart from D’s birth certificate on which Father was the “informant”, on all the other birth certificates, Mother was the “informant” and she was the one who went to register the respective births, and this was an indication that she was up and about 2-3 weeks after giving birth to each of the younger 4 children.  She was probably a tough woman in her younger days having worked with Father as hawkers and running a parallel trading business in Lau Fau Shan, Yuen Long.  In fact, D had himself described her as “昔日的河東獅”[40], ie the former lioness. 

120.  There was no sufficient evidence that Father had substantial savings at the time he left for Taiwan or that there could have been substantial sale proceeds from the sale of the sewing machines/stock of Wing Sang.  I also do not find it probable that Father could have any substantial hidden savings when he left or there could have been substantial sale proceeds from the sale of sewing machines/stock.  If there were, then he could have afforded to pay for the rent of Wing Sang and also there would have been no need for Father to go and live in Taiwan to avoid his creditors and Mother and the children would not be evicted when she was pregnant with Ka Kit and Kam Yee was only about one year old.  I accept Mother’s evidence that when Father was in Taiwan, she was working in a bra manufacturing factory at Tai Kok Tsui and also at night at home to support the children.

121.  As said earlier, it was Mother’s evidence that after Father’s return, she had continued to work in the factory and sometimes she worked at piece rate at home.  Madam Leung had also moved to Chung Sing Flat with the family and Mother said during the trial that Madam Leung moved out in 1971 to a flat on Nam Cheong Street.  It was not disputed that Madam Leung had at that time met a Chinese bone-setter (跌打師傅) called 梁華 and Madam Leung moved out to live with him and they later set up a successful business.  

122.  No doubt, when Madam Leung was living in Chung Sing Flat, she would have been able to help Mother to look after the children and that Mother would have been able to work in the factory.  Even on D’s own case, Mother had worked piece-rate at home after Madam Leung moved out.   

123.  According to the SPA, the monthly instalment for the purchase price of Chung Sing Flat of HK$260 was payable to the vendor/developer as from 1 January 1968 onwards[41]. Father would have either returned from Taiwan by then or returned shortly thereafter.  It was Mother’s pleaded case that Father could not make a living in Taiwan and this was not specifically denied by D in his Amended Defence. When asked whether it was her case that Father did not pay anything towards Chung Sing Flat prior to 14 December 1970, the day on which the Father signed the Assignment to complete the purchase of Chung Sing Flat, Mother’s answer was Father only paid HK$50 per month for family expenses and HK$10 per month to her, namely totalling $60 per much and that she was responsible for all the rest of the expenses, and that Father did not pay anything towards Chung Sing Flat.  She also mentioned that Father liked smoking and was fooling around.

124.  It was not disputed that at one stage one of the bedrooms at Chung Sing Flat was rented out to two men but it was not clear from when, and as it was Mother’s pleaded case and written evidence that the rent was used to pay for the bank mortgage instalments, this seemed to indicate that it was only after Father signed the Assignment that they let out one of the bedrooms.  In fact, this also appeared to be D’s case.

125.  It was also Mother’s evidence during the trial that her piece rate was HK$20 or HK$30 per day and sometimes even HK$40 per day.  As I have found that it was not until early 1969 that Father found a stable job at the handbag factory, I accept what she said, that Mother had continued to work hard in a factory and had brought pieces to work at home to pay for the household expenses and the monthly instalments after Father returned.  I will consider the payments later relation to Chung Sing Flat.

126.  Notwithstanding the difficult times, it would appear Mother and Father had both worked hard after Father started working at the handbag factory and the 1^st Mortgage Loan of Chung Sing Flat (as defined later) was paid off on 14 February 1976.  Further, as seen in Annex A, Kei Yip Flat was purchased on 20 December 1977. 

127.  As mentioned earlier, Father’s employment at the handbag factory was unfortunately terminated and Father became unemployed. According to Mother’s written evidence, this was in about 1978, but D said it was in the middle of 1979.  As Mother herself said during the trial, Father had worked for a rattan factory for a year or two after his employment was terminated at the handbag factory, it was probably in about 1979 that both Father and Mother were unemployed and they moved to Kei Yip Flat and started working initially as hawkers and later they started the parallel trading business. 

128.  Mother said she and Father started the hawking business with family savings and a loan from a friend and financial assistance from Madam Leung, whereas D said it was started by Father with the severance payment he received from the handbag factory and that the business initially had no name and that Yau Wing Hong was only started in 1983.  I will come back to consider the dispute over Yau Wing Hong later in this judgment.

129.  Mother and Father were married for 53 years when Father died.  Although Mother had complained that Father had assaulted and ill treated her and later had a mistress, Mother seemed to have been tolerant, and Father and Mother had remained married for some 53 years when Father passed away. Mother had brought up 5 children, even though Madam Leung had helped her at least until 1971 and also later when Mother and Father moved to Kei Yip Flat in Lau Fau Shan.  I accept Mother’s evidence that she was hard working and had worked throughout her marriage until she retired in about 2000, and this was some 40 years of her marriage.  As said earlier, Mother obtained a driving licence at the age of about 45 (her written evidence or 47, her evidence during the trial) to help with the parallel trading or the miscellaneous goods business, and she also obtained a licence as an estate agency salesperson.  In my view, Mother clearly played an important role in the family and in the very least, she played an equal role as Father in the family.

J.   Subject Matter (1) – Chung Sing Flat 

J.1     Mother’s case

130.  Mother’s pleaded case was that after she started working in around 1956, she had handed over her income to Madam Leung even after her marriage for safekeeping and that since 1967 she worked as a spinning/weaving worker and seamstress to support the whole family and had continued to hand over the bulk of her income to Madam Leung for (i) family expenses of Mother, the children and Madam Leung; and (ii) and for Madam Leung to save the remaining surplus for her[42]. On 21 October 1968, Madam Leung signed the SPA for the purchase of Chung Sing Flat at a consideration of HK$37,200 and that the down payment and monthly statements were, according to Mother, funded by (i) money from Mother through selling of her dowry of gold ornaments; (ii) money which was Madam Leung’s personal savings; (iii) money belonging to Mother which Madam Leung saved for her; (iv) money earned by Mother as a spinning/ weaving worker and seamstress[43].

131.  Further, Mother’s pleaded case was that after Father’s return, upon the repeated requests of Father, on 14 December 1970, Mother procured Madam Leung to cancel the SPA and Madam Leung received HK$14,840 upon the cancellation, and Chung Sing Flat was sold/assigned to Father in the consideration of HK$26,928,and at that time, there was an express oral agreement, common understanding and intention between Father and Mother that the Chung Sing Flat would be purchased with the down payment funded by Mother, namely from the said sum of HK$14,840 received upon the aforesaid cancellation, together with a bank mortgage loan; and Father and Mother would be the beneficial owners of Chung Sing Flat in equal shares despite that it would be acquired in Father’s name.  One room in Chung Sing Flat was leased to two tenants for a monthly rent of HK$80 and HK$70 respectively and Father and Mother used the same to contribute towards the repayment of the mortgage to the bank.  It was Mother’s case that the bulk of the aforesaid HK$14,840 belonged to Mother (as it originated from Mother) while the remaining small portion of the aforesaid HK$14,840 was a gift by Madam Leung to Mother[44].

132.  Further or in the alternative, it was Mother’s pleaded case that as the down payment was funded by her while the monthly bank mortgage repayment was contributed by Father and her, Father held Chung Sing Flat on resulting trust for Father and her in equal shares.

J.2     D’s case

133.  On the other hand, it was D’s pleaded case that Father was the sole beneficial owner of Chung Sing Flat and that no part of it was ever held for Mother.  It was his further pleaded case that at about end of 1967, Father having returned to Hong Kong decided to purchase Chung Sing Flat, and making use of the sale proceeds of the stock of Wing Sang, Chung Sing Flat was purchased by Father at the consideration of HK$37,200 initially using Madam Leung’s name and the SPA was signed in name of Madam Leung.  The deposit and monthly instalments for the purchase of Chung Sing Flat under the SPA were funded by the proceeds of the sale of the stock and/or further earnings made by Father after his return to Hong Kong[45].

134.  Further according to D’s pleaded case, by December 1970, as Father considered that it was no longer necessary for Chung Sing Flat to be held under the name of Madam Leung, arrangements were made for the cancellation of the SPA and for the deposit and the principal sums of the monthly instalments already paid thereunder in the total sum of HK$14,840 to be “refunded” by the vendor and for the purchase of Chung Sing Flat to be completed by having it assigned direct to Father at a consideration of HK$26,928, which was funded by the said refund of HK$14,840 and the balance paid by a bank mortgage loan in the sum of HK$13,000.  

135.  It was D’s written evidence that Father had told him that the sum of HK$14,840 was handed over to Father by Madam Leung upon being refunded by the developer as the money came from Father in the first place and Father then used the amount to pay for the down payment.  Also, it was also D’s evidence that Madam Leung had told him that as Father was concerned over being pursued by his creditors and therefore Father used Madam Leung’s name to sign the SPA and that by 1970, Father became less worried and decided to arrange for the SPA to be cancelled and the Assignment to be executed in his name.

J.3     The Land Registry documents

136.  The Land Registry record[46] shows that the developer/vendor of the Chung Sing Flat had purchased the relevant lots in August 1962 and obtained a mortgage in October 1963, and later a further charge in January 1967.  As mentioned earlier, the Deed of Mutual Covenant was dated 2 July 1967.  It was registered on 4 August 1967.  Both the mortgage and the further charge were reassigned to the developer on 20 November 1970, which indicated that it was only on that day that the developer obtained unencumbered title.  

137.  The Land Registry record shows that Chung Sing Flat was purchased direct from the developer and as said earlier the SPA was signed by Madam Leung on 21 October 1968 at a consideration of HK$37,200.  In the SPA, the payment of the purchase price set out in the schedule stated that (1) HK$6,000 was to be paid upon the signing of the SPA; and (2) the remaining HK$31,200 was to be paid by 120 equal month instalments of HK$260 each, the first to be made on 1 January 1968, and thereafter on the 1^st day of each month.  Although it seemed under clause 19 of the SPA there was set out what was stated to be the “correct basis of calculating the amount of each instalment”, it was common ground that the deposit paid by Madam Leung at the time of the signing of SPA was HK$6,000 and there was a receipt signed by the developer that HK$6,000 had been received from the purchaser on the date of the SPA, being the deposit referred to the Schedule.  There seemed also no dispute that the monthly instalments were HK$260 each and that such monthly instalments commenced to be payable as from 1 January 1968. 

138.  There was then a cancellation of the SPA dated 14 December 1970.  There was no separate cancellation agreement as such, but the cancellation was only recorded and endorsed on the SPA agreement dated 14 December 1970 and signed by Madam Leung and the developer and a receipt signed by Madam Leung acknowledging her receipt of HK$14,840, being the deposit money and 1^st to 34^th instalments (“Cancellation”)[47].  This would seem to indicate that if the monthly instalments commenced on 1 January 1968, they were paid only until October 1970, ie a total of 34 months. 

139.  On the same day of the Cancellation, Father signed the Assignment at a consideration of HK$26,928, and also the mortgage to the Hang Seng Bank for a loan of HK$13,000 (“1^st Mortgage Loan”). In the mortgage deed for the 1^st Mortgage Loan, the interest was stated to be at the rate of $10.50 per $1,000 per calendar month[48] which appeared to be $136.50 per month.  The 1^st Mortgage Loan was discharged on 14 February 1976.  Subsequent thereto, Chung Sing Flat was mortgaged again on 3 separate occasions, namely (i) on 10 December 1977 to secure a loan of HK$50,000 from Hang Seng Bank (“2^nd Mortgage Loan”), which was  discharged on 19 December 1980; (iii) a further mortgage was entered on the same day, 19 December 1980, to secure a sum of HK$65,000 and general credit facilities (“3^rd Mortgage Loan”), and this was later discharged on 22 March 1982; (iv) on same day, Chung Sing Flat was again mortgaged  to Hang Seng Bank to secure general banking facilities of HK$100,000 (“4^th Mortgage Loan”) which was eventually discharged on 15 March 1995. There had been no further mortgage loans since.

J.4     Who paid for the sum of HK$14,840 under the SPA?

140.  It was Mother’s evidence that it was Madam Leung who found Chung Sing Flat and that all along it was Madam Leung’s decision to purchase Chung Sing Flat.  It was also Mother’s written evidence that Madam Leung purchased Chung Sing Flat after discussing with her. 

141.  Mother had said during the trial that the developer of the Chung Sing Building was called Dah Chong and that Madam Leung was the one who had paid HK$14,840 and Madam Leung was the one who went to talk to Dah Chong to allow her early possession and that later Madam Leung also went to Dah Chong to discuss the Cancellation and the refund of the HK$14,840. According to Mother, Dah Chong had agreed to the Cancellation.  Although Mother could not remember exactly the details of the purchase when asked at the trial, as I have said earlier, this is understandable, as the evidence showed that Madam Leung would have first approached the developer in 1967, which was some 52 years ago by the time of the trial.   

142.  Mr Lau pointed out that Mother did not mention in her witness statements that Madam Leung had worked and only mentioned during the trial that Madam Leung had also done some casual sewing work to earn money.  Mother had said during the trial that Madam Leung had some money but not much and that Madam Leung liked to play mah-jong.  Mr Lau submitted that it would be extraordinary that Madam Leung would have agreed to enter into the SPA under which she was required to pay the balance of the purchase price on a monthly basis HK$260 for a 10 year period.  Further, as it was Mother’s written evidence that Madam Leung also invested in the business of Wing Sang, it would have meant that Madam Leung also had done badly and she would not have that much savings.

143.  Mother and Yip Senior had both helped Father financially to set up Wing Sang and this was in about 1960, but there was no evidence as to what amount Madam Leung had contributed.  Even though Madam Leung would have lost whatever she contributed in Wing Sang, it did not necessarily mean she had no money or no savings left at all.  Further, it was Mother’s evidence that she had continued to pay her income to Madam Leung as Madam Leung was helping her look after the children and that Madam Leung was saving up for Mother what was not spent. 

144.  Mother was also asked during cross examination that if Madam Leung had savings, then why did Madam Leung and the children did not buy a flat immediately upon moving out of the Wing Sang premises at 151, Cheung Sha Wan Road, and instead they moved to Kwu Tung.  Mother had responded that they were being evicted by the landlord of 151, Cheung Sha Wan Road at the time, and a friend happened to have a stone hut in Kwu Tung which was vacant and that the friend had allowed Madam Leung and the children to live there, and that they did not know or think about buying a flat at the time.  I find Mother’s explanation plausible and accept what she said.

145.  As for Mother’s evidence that Madam Leung liked to play mah-jong, I think Mother was referring to the time after Madam Leung had moved out of Chung Sing Flat in 1971, when Mother described Madam Leung as having “married a rich man”, and that she was playing mah-jong all the time.

146.  As said earlier, D’s case was that Father suddenly turned up one day in Kwu Tung at about end of 1967 or early 1968 and took him and his siblings to Chung Sing Flat, and his case was that Father did not live in Kwu Tung, and if this was the case, then possession of Chung Sing Flat must have been given by the developer earlier, and the negotiation for early possession must also have been taken place earlier and prior to Father’s return.  In such case, the decision and negotiation could only have been carried out by Madam Leung in 1967 as said by Mother, since Father had not yet returned from Taiwan.

147.  Further, since the evidence was that the monthly instalment had commenced on 1 January 1968, and unless there was another earlier written agreement entered into between the developer and Madam Leung prior to the commencement of the payment of the monthly instalment which was not registered in the Land Registry, it would appear that the SPA could have been signed in escrow earlier and prior to 1 January 1968 as the monthly instalments commenced on 1 January 1968 and also clause 3 of the SPA provided, amongst other things, that upon signing of the SPA, the purchaser was entitled to enter into possession of the Chung Sing Flat and that the purchaser’s possession was to be that of a licencee only until the full purchase price was paid by the purchaser[49].

148.  Clause 19 of SPA provided what was described as the “correct basis” of calculating the amount of each monthly instalment over the period within which the whole of the purchase price had to be paid, which seemed to suggest that the entire purchase price could have been paid by monthly instalments.  However, there was no evidence that the calculation basis under clause 19 was adopted for Madam Leung’s purchase.  On the contrary, since the amount of the refund on the Cancellation was on the basis of the deposit being HK$6,000 and 34 monthly instalments of HK$260, it was clear that the payment method in Schedule was adopted for Madam Leung’s purchase notwithstanding clause 19.

149.  Thus, although the sum of HK$6,000 was paid only on 21 October 1968, it would seem on 1 January 1968, ie the commencement date of the monthly instalment of HK$260 under the Schedule, Madam Leung had either already either paid or agreed to the payment method in the Schedule and to pay HK$6,000 upon signing of the SPA, which would indicate that she had the amount available.  Although the balance of the purchase price was stated to be paid by 120 monthly instalments for a period of 10 years, the Mother’s evidence was that her monthly income was about HK$500 and that it would appear that she could afford to help Madam Leung to pay for the monthly instalment of HK$260. 

150.  As it turned out, the Assignment was signed about 26 months after the SPA about a month the developer had discharged its mortgage and further charge as mentioned earlier, and the balance of the purchase price was paid by way of the 1^st Mortgage Loan as mentioned earlier. 

151.  I have found that that Father was at most only a casual worker between January 1968 and early 1969.  For Father to be able to pay for the deposit and the monthly instalments from 1 January 1968 until early 1969, this would mean that Father would have to amass savings between HK$6,000 and HK$9,120 (on basis of HK$260 x 12 months between January 1968 and early 1969) from Wing Sang or the sale of its stock.  

152.  As I have found earlier, there was no sufficient evidence that Father had substantial savings at the time he left for Taiwan or that there could have been substantial sale proceeds from the sale of the sewing machines/stock of Wing Sang of such an amount.  Moreover, Father would have needed to buy a ticket and to take some cash with him for his living expenses in Taiwan.  

153.  It was submitted by Mr Lau that Mother could not have that much dowry as the parties were poor at the time.  However, all along Mother had said Madam Leung had some gold ornaments and savings and it would not mean that Mother had no dowry kept with Madam Leung.  I accept Mother’s evidence that she did have some dowry. 

154.  Having considered all the evidence, I am of the view that more probable than not that the deposit of HK$6,000 paid on the signing of the SPA did come from one of the sources described by Mother.  As for the monthly instalments of HK$260 between 1 January 1968 and early 1969 (say 12 months), during the trial, apart from repeating that the sum of HK$14,840 was paid out of Mother’s and Madam Leung’s savings, Mother seemed to have forgotten part of the HK$14,840 was paid by monthly instalments of HK$260 as she had said she did not know about monthly instalments of HK$260.  I have earlier accepted Mother’s evidence that she had continued to work in the factory and piece rate at home after Father returned and that as she said, she had handed her income to Madam Leung for expenses and for savings.  In light of this, I am of the view that more probable than not, that monthly instalments of HK$260 were mainly discharged by Madam Leung (with the monies from Mother).  Even after Father started to work for the handbag factory, Mother’s evidence was that Father only paid her a total of $60 per month.  There was no sufficient evidence to contradict Mother’s evidence but bearing in mind by then, Mother had said that Father’s salary was $550 per month, he must have also contributed generally towards household expenses and outgoings of the property.  However, as Madam Leung was the “purchaser”, I find she would be the person mainly responsible for the discharge of the monthly instalment. 

155.  I am thus prepared to accept Mother’s evidence that the sum of $14,840 was paid mainly by Madam Leung out of whatever amounts paid to her by Mother.

156.  It was not disputed that the sum of HK$14,840 refunded by the developer on Cancellation went towards the down payment payable on the Assignment.  The balance of the purchase price HK$12,088 and legal costs and disbursement would have been paid out of the 1^st Mortgage Loan of HK$13,000 from the Hang Seng Bank.  Thus the total amount paid for the Chung Sing Flat would be about $27,840.

J.5     Who paid for the monthly bank mortgage instalments of the 1^st Mortgage Loan

157.  D’s pleaded case was that the 1^st Mortgage loan of $13,000 was eventually paid off by Father by no later than February 1976 funded by the proceeds from the sale of the stock of Wing Sang and/or Father’s further earnings[50].

158.  Although when it was put to Mother that the monthly bank mortgage instalments were about HK$300, Mother had said it was only HK$180 per month.  It would appear that as the 1^st Mortgage Loan was paid off in about 5 years and 2 months, ie 62 months, the monthly mortgage instalment would have been at least $300 per month.

159.  By then, there was also the total rental income of HK$150 per month from the two tenants of the room in Chung Sing Flat.  Mother’s evidence was that each month she collected the rent and credited into Father’s bank account to pay the monthly mortgage.  Mother said she had also contributed towards the mortgage payments and outgoings of the Chung Sing Flat.  I accept that she had made contributions generally towards the household expenses.  After the Assignment, Father was the one who would be responsible for paying the monthly instalments of the 1^st Mortgage Loan plus interests being the registered owner and the mortgagor of the property.  In my view, the mortgage instalments and outgoings were paid by Father from the joint earnings of him and Mother plus the rental income from the two tenants of HK$150 per month.

160.  All in all, I am satisfied that Mother’s (and Madam Leung’s) payments would be at least about 50% of the total purchase costs of Chung Sing Flat.

J.6     Whether there was a common understanding and intention that Chung Sing Flat was purchased for Father and Mother as equal beneficiaries

161.  Mother’s evidence was that it was Father who kept demanding Madam Leung to unconditionally allow the Father to acquire the formal title of Chung Sing Flat in place of Madam Leung.  It was her pleaded case that this was due to Father’s “chauvinism” as he claimed to be the head of the family[51].

162.  During the trial, it was Mother’s evidence that Father assured her and Madam Leung that all of them would have a share and it did not matter who had the legal title.  Mr Lau submitted that this did not tally with Mother’s written evidence that Father had said he was the head of the family, he should be the one to hold the property and he had often scolded Mother and was even violent towards her demanding that she asked her mother to transfer the purchase of Chung Sing Flat the property into his name, and that Madam Leung finally decided to transfer to Father’s name as she did not want to cause any trouble to Mother and to protect her and the children[52].  Even if Father had declined to add Mother’s name to the legal title, this would not necessarily mean that it was Father’s intention that Mother should have no beneficial interest at all in the property.  In any event, Mother had maintained her oral evidence under cross-examination.

163.  According to Mother’s written evidence, Mother had told Father orally that the sum of HK$14,840 refunded by the developer was from Mother and Madam Leung and that she and Father had understood and agreed that they would jointly own the beneficial interests in Chung Sing Flat and it was pursuant to their understanding and agreement, Mother then requested Madam Leung to cancel the SPA and the refund was received by Mother who, in reliance on the understanding and agreement, to use the refund as down payment and further to, jointly with Father, continue to pay for the bank mortgage instalments and all related outgoings such as rates, government rent, land taxes and management fees[53].

164.  Mother said that the bank mortgage instalments and other outgoings were paid by Father but her case was she had also contributed her earnings towards such expenses, which I had accepted earlier.

165.  Under cross examination, Mother had said “葉勝話轉左比佢有咩所謂, 佢話大家都有份; 我媽都有問我, 葉勝話大家都有份, 一家人都有份, 真係唔知佢咁衰,返大陸搞女人”[54].  As pointed out by Mr Leung, this was consistent with Ka Kit’s evidence, who confirmed in his witness statement that Father had considered “夫妻兩人, 無分彼此, 何需此舉”, citing tax and legal expenses concerns as the underlying reason.[55]

166.  Mother was making a claim against the estate of a deceased person who could not give evidence against her claim and that as pointed out by Mr Lau, the Court would need to approach her evidence with suspicion and skepticism.  Mother is the only person who could give direct evidence in relation to the purchase of Chung Sing Flat and why it was initially purchased in the name of Madam Leung and later changed to Father’s name.  She was cross examined at length in relation to Chung Sing Flat, and notwithstanding there being some inconsistencies, she maintained her version during her oral evidence throughout.  To summarise, I have earlier accepted her evidence that it was Madam Leung who, after discussion with Mother, decided to buy Chung Sing Flat and that Madam Leung was the one who went to discuss with the developer to request for early possession be given to her.  I have also accepted that the down payment paid at the time of the Assignment of $14,840 had come mainly from Madam Leung (and Mother) even though Father had also contributed towards household expenses.  Having considered all the evidence, and that for whatever reasons that Father wanted the title to be held in his name, I find that it more probable than not that he did utter those words expressly, as alleged by Mother around the time of the execution of the Assignment and that such utterance was a promise or assurance made to the Mother during the trial that she would have a half share in Chung Sing Flat.  I find that this was the parties’ common intention.

167.  Mr Lau argued that even if the Father did really make such a promise or assurance, the common intention existing had been altered by Father’s purchase of the Kei Yip Flat gifted to the Mother.  It was D’s case that Father obtained the 2^nd Mortgage Loan for HK$50,000 for the purpose of purchasing the Kei Yip Flat in Mother’s sole name.  Mr Lau submitted that this was why Father decided to purchase Chung Sing Flat in his sole name and did not intend that Mother would own half share in Chung Sing Flat.

168.  First of all, there was no evidence that at the time of Father signing the Assignment of Chung Sing Flat, he already had the intention to purchase Mother another flat in her sole name.  Secondly, Mother had said that there was a premium plus also legal costs totalling HK$30,000 payable and that the cost of purchase of Kei Yip Flat was in fact HK$70,000.  It was not clear what premium Mother was referring to.  Kei Yip Flat is the top floor of a village house.  Although there was no sufficient supporting what Mother said, Kei Yip Flat being village house or “small house”, it was not impossible that there was an additional premium payable.

169.  Thirdly, there was no valuation of Chung Sing Flat at the time of the purchase of Kei Yip Flat and there was no evidence, even if HK$40,000 of the 2^nd Mortgage Loan did go towards the purchase of Kei Yip Flat, that the amount was roughly half of the beneficial interests of Chung Sing Flat at the time.

170.  Fourthly, there was no sufficient evidence that Father had intended to alter his common intention or the parties’ common intention had been altered by the purchase of Kei Yip Flat in the sole name of Mother.  

171.  Mr Lau had also submitted that the mere fact of actual contributions to the mortgage repayments (or part of the purchase price) would still not be sufficient to infer a common intention and he had referred the Court to Tong Kwa Ying v Poon Kwok Sin (unrep) HCA 2790/1996, 4 June 2001 per Recorder Kwok SC[56] citing with approval the following passage from the English Court of Appeal in the unreported decision of First National Bank plc v Wadhwani, 22^nd April 1998 (Lexis Citation 4250):

“I do not think that passage supports the proposition that where the matrimonial home was owned by the husband at the time of the marriage, subject to a mortgage for which he alone was liable to repay, the mere fact that the wife contributed by her earnings to the fund from which the instalments were paid by the husband would be by itself a sufficient ground for inferring a common intention that the wife should have a beneficial interest in the property. There must be something more if that inference is to be drawn.”

172.  In the present case, I have found earlier that Mother (and Madam Leung) had agreed to the sum refunded to them of HK$14,840 to be used towards the down payment payable by Father upon signing the Assignment, and that the amount had mainly come from Mother (and Madam Leung).  Thus, in the present case, there was “direct payment” of HK$14,840 and that it was after the Assignment that Mother’s contributions could be said to be “indirect”, namely Mother contributing her earnings to household expenses and outgoings.  As said by Lord Bridge and referred to by Cheung JA in the Primecredit case, a direct payment would readily justify the inference necessary to the creation of a constructive trust.  Even if there had been no express agreement or utterance by Father, the creation of a constructive trust could in my view be inferred by Mother’s direct payment plus her continuing contributions towards the household expenses including mortgage loan instalments and outgoings of the Chung Sing Flat.

173.  Mother did not dispute that when Madam Leung moved out, she did not ask Father to pay back the money she had paid for Chung Sing Flat.  In fact, most of the money paid by Madam Leung originated from Mother anyway.  Mother’s case was that Madam Leung was willing to gift whatever Madam Leung had paid out of her personal savings to Mother   to adhere to Mother’s request and to make arrangements to enable Father to take up the Assignment.  Given the close relationship between Mother and Madam Leung, I find that Mother’s case is plausible.

174.  There was no sufficient evidence that it was Father who arranged for Madam Leung to sign the SPA as he did not want his creditors to find out and that by December 1970, Father felt that it was then fine for him to take up the Assignment and that was why Madam Leung transferred the name of the purchaser to Father.    

175.  That Father would want to be the one to hold the legal title to the family home, being the head of the family, would not, in my view, be surprising as he was the head of the family with a stable income, and also he was the one to apply for the 1^st Mortgage Loan.  I accept Mother’s evidence that Father was chauvinistic.

176.  To summarise, having considered all the evidence, I find that there was an express agreement or utterance on part of Father and there was common understanding and intention between the Father and the Mother at around or prior to the signing of the Assignment that Father and Mother were to have equal beneficial interest in Chung Sing Flat, and in any event, such common understanding and intention could be inferred from the direct payment and the continuing contributions by Mother towards the discharge of the 1^st Mortgage Loan and outgoings of the property.

177.  Alternatively, as said earlier, Mother (add Madam Leung) had paid at least 50% of the purchase costs of Chung Sing Flat and I find that there exists a resulting trust in favour of Mother of at least 50% of the beneficial interest of Chung Sing Flat.

178.  In any event, having regard to the whole course of dealing between Father and Mother and all the circumstances, I am of the view that it is fair for Mother to have 50% of the beneficial interests of Chung Sing Flat.

K.      Subject Matter (2) – Yau Wing Hong

179.  Under this Subject Matter, there were 4 sub-issues.  I will first set out as to when Yau Wing Hong commenced and ceased business and also the source of funds for the setting up of Yau Wing Hong.

K.1    When did Yau Wing Hong commence and cease business

180.  According to Mother, Yau Wing Hong was commenced in about 1980 when they were working in Lau Fau Shan and according to D, it was in about 1983.  However, even in D’s own witness statement, he had said that for convenience sake, Father decided to use the name of Yau Wing Hong when Father and Mother were working from Kei Yip Flat[57].

181.  According to Mother’s written evidence, Father’s job at the handbag factory was terminated at about end of 1978 and that Father stayed home for several months until about April or May 1979 that after discussing with Madam Leung, they decided to use what they had saved up and a loan from a friend and also with Madam Leung’s assistance of HK$10,000, they moved to live in Kei Yip Flat in Lau Fau Shan and to work as hawkers nearby.  There they met some parallel business traders, and they then started to carry out parallel trading business[58]. It was also Mother’s written evidence that by then Madam Leung was doing quite well and that after Father and Mother moved to Kei Yip Flat, D, Ka Fai and Kam Yee remained residing in Chung Sing Flat, but Kam Har and Ka Kit moved to reside with Madam Leung. 

182.  According to D’s own written evidence, it was in about middle of 1979 that Father’s job at the handbag factory was terminated and that Father moved to Kei Yip Flat at about end of 1979 all by himself and he started working as a hawker and that it was only about one to two months later that Mother followed and that they started to work as hawkers in Lau Fau Shan. 

183.  During the trial, Mother had said that after Father’s job at the handbag factory was terminated, he met by chance a former employee who then recommended Father to work for a rattan factory called Wing Tai for about 1- 2 years, but the factory then ceased business and at the time she was also unemployed.

184.  It did not really matter whether it was Father who moved one or two months earlier or not, having considered the evidence, I find it was more probable that it was at about end of 1979 or in early 1980 that Father and Mother moved to live and work in Lau Fau Shan.  I accept Mother’s evidence that D, Ka Fai and Kam Yee remained living in Chung Sing Flat while Kam Har and Ka Kit went to live with Madam Leung. It was D’s evidence that in 1980, as Father was not able to pay for his further education, he then helped his parents in Yau Wing Hong and later he started working as a warehouse attendant as from 1 May 1981.  He was about 21 years old then.  I am also prepared to accept this part of D’s evidence, that he did help Father and Mother in the business in Lau Fau Shan for a while prior to him finding a job with Espirit.

185.  Mother had produced bundles of business accounts, ledgers and various records of the business at Lau Fau Shan and later at Shop 12 (“collectively “Ledgers”).  Some 400 pages of these Ledgers were produced without a proper index, which were extremely unhelpful.  These Ledgers appeared to consist of (i) Records of  the year-end stock/bank balances of the business trading in “miscellaneous goods” (雜貨) from 1 May 1980 to about January 1993, the 1983 records and the outstanding loans on the shops in Yik Fat Building^[59] (“Year-End Stock/Bank Balances Records”); (ii) Annual accounts from May 1980 to December 1983 and monthly balances from about March 1984 – July 1984^[60] (“Annual Accounts”); (iii) Yau Wing Hong 1994 – 2003 record of expenses and rental income and commission income^[61] (“Yau Wing Hong Accounts”) (iv) Records of bank transactions including the Hang Seng Bank account of Yau Wing Hong 1986 – 1990^[62] (“Bank Transaction Records”); (v) Annual accounts  from May 1980 to about 25 January 1986^[63] (“Year-End Balances”); (vi) annual accounts of various expenses, loans on each shop and income from commencement of the estate agency business February 1989 – July1990^[64] (“Estate Agency Accounts”); (vii) Record of rental income of  shops under Yau Wing Hong (which included Chung Sing Flat)^[65] (“Rental Records”).

186.  There seemed to be some overlap between items (i) and (v) above.  Further, for some of the Ledgers, the columns of “Debit” and “Credit” seemed to be reversed.

187.  D had produced various business registration certificates.  The earliest business registration certificate produced was one of  “Yau Wing Hong Trading Co” with address at Shop 12 and date of commencement 10 July 1984, which was valid for 12 months from July 1984[66]. The business registration fee was paid on 16 July 1984 and the nature of business stated thereon was “emporium” and the status was stated to be “sole proprietorship”.

188.  It would appear that on the cover page of the Year-End Balances (item (v) of the Ledgers), some one had written that the commencement date of Yau Wing Hong was 10 July 1984[67].  Further in the Year-End Stock/Bank Balances Records (item (i) of the Ledgers), it was also written that on 10 July 1984, Yau Wing Hong commenced business at Shop 12[68].  There were references to this date on other pages of the Ledgers.    Having considered the Ledgers and the Business Registration Certificates, I find that the commencement date of the formally registered business of Yau Wing Hong at Shop 12 was on 10 July 1984.  This would also accord with Mother’s own evidence was that they moved to Shop 12 in about middle of 1984. 

189.  Having said this, even though Yau Wing Hong was not formally registered until July 1984, as found earlier, it was around end of 1979/early 1980 that Mother and Father and she moved to Kei Yip Flat in Lau Fau Shan.  I also accept Mother’s evidence that they initially worked as hawkers and then the parallel trading business was started and that the name of Yau Wing Hong for the business was used for their business in Lau Fau Shan.  

190.  In the Ledgers, there was a reference to trading in “miscellaneous goods” (雜貨) which was started on around 1 May 1980, and in any event not later than that date, as seen in particular from the cover page of the Year-End Stock/Bank Balances Records (item (i)) of the Ledgers[69] and there were also other references to this date in items (ii) and (iii) of Ledgers.  Thus, it would appear that the parallel trading business described by Mother was recorded as “miscellaneous goods” trading in the Ledgers.  The Ledgers would also accord with Mother’s evidence that they were doing well in the business from about end of May 1980.

191.  As seen in the business registration certificate for the year valid until 9 July 1986 (ie from 10 July 1985 to 9 July 1986), the nature of the business at Shop 12 continued to be “emporium”[70]. There were no business registration certificates produced by D between 1986 – 1990. Presumably, there was no change.  Then, in the business registration certificate (10 July 1990-9 July 1991)[71], Yau Wing Hong’s name in English had been changed to “Yau Wing Hong Estate Agency & Sports Goods Center” and its nature of business was stated to be “store”.  In the business registration certificate (10 July 1993- 9 July 1994)[72], name of the business at Shop 12 was changed to “Yau Wing Hong Estate Agency” in English but maintained its Chinese name “有榮行貿易公司” and the nature of business was “property agency”.

192.  To summarise, the business registration certificates indicated a change of the nature of the business from “emporium” in 1984 to “store” in 1990, and later to “property agency” in 1993. 

193.  As said earlier, the parallel trading business in Lau Fau Shan, referred to as “trading in miscellaneous goods (雜貨)” in the Ledgers, commenced on about 1 May 1980[73], from which the Ledgers would appear to be first recorded.  Apart from there being a record that Yau Wing Hong commenced trading on 10 July 1984, the Year - End Stock/Bank Balances (item (i) of the Ledgers) recorded stock of miscellaneous goods as at December 1982, and thereafter at end of each year until end of December 1986 and thereafter there appeared to be no year end stock of “miscellaneous goods”.

194.  The miscellaneous goods bought during the year of 1982 consisted of, amongst others, electric clocks, calculators, playing records, record players, electric fans, and the stock at end of the year of 1982 consisted of Chinese herbs and silver coins[74].  The stock as at end of 1983 consisted of, amongst others, pearls, Chinese herbs, Shanghai “Seagull” watches, mechanical watches etc[75], and the stock as at end of 1984 consisted of, amongst other things, mechanical watches, pearl necklaces, video recorders, calculators, computers etc[76].

195.  An “emporium” would mean a business/company selling various kinds of goods.  In my view, whether it was parallel trading or not, or a business selling miscellaneous goods, the nature of business of “emporium” on the business registration certificates for 1994 and 1995  would accord with Mother’s evidence that when the registered Yau Wing Hong first started at Shop 12, it continued to carry on a business rather similar to that which was carried out by Mother and Father in Lau Fau Shan, namely selling the wide variety of goods as described by Mother, until when the store business commenced. 

196.  There was no evidence of any formal transfer of business or stock from that of the business in Lau Fau Shan to the registered Yau Wing Hong.  The bank balances in the bank accounts (which were in Father’s sole name) were carried forward from the business in Lau Fau Shan to the registered business of Yau Wing Hong. 

197.  Whether the business at Lau Fau Shan, or the business under registered name of Yau Wing Hong at Shop 12, this was an informal family business, and Father and Mother simply moved the location of their business of trading in miscellaneous goods from Lau Fau Shan to Shop 12 in Yuen Long and instead of delivering or collecting goods from sea side, it would appear from Mother’s evidence that she obtained the driving licence to collect/deliver goods around.

198.  Mother’s evidence that in 1986 the business changed to that of a grocery store selling beverages, snacks, sports equipment such as badminton racquets, shuttlecocks and a small amount of sports clothes etc was not really disputed.  By end of 1986, there was still quite a lot of stock of miscellaneous goods[77] but by end of 1987, there was no stock of miscellaneous goods records in so far as one could see.  Thus, it would seem sometime in 1987, the business had changed to that of a store.

199.  It was the evidence of both Mother and D that the property agency business started in about 1988.  However, from the Estate Agency accounts ie item (vi) of the Ledgers, it appeared that the business commenced in February 1989, although it would seem that it was not until 1993 that the nature of business on the business registration was formally changed to that of property agency.

200.  According to Mother’s own pleaded case, and as mentioned earlier, she worked in the business until she retired in about 2000. As seen in the May 2002 Note, by that time, (i) the business of Yau Wing Hong was not doing well; (ii) Yau Wing Hong had suspended its business as from 1 May 2001; (iii) Shop 12 was vacant; (iv) on 19 May 2002, Shop 12 was divided into two shop spaces and the larger space, which has remained being called Shop 12, had been rented out to a person running an aquarium at the time whereas the smaller space called Shop 12A was stated in the May 2002 Note to be kept for use by Father, Mother and Ka Kit.  Shop 12A remained to be used by Yau Wing Hong.

201.  As said, it would appear that Yau Wing Hong formally ceased its business around 1 January 2004[78]. This was evidenced by a notice of 28 June 2004[79] sent by Father to the Business Registration Office.  The business registration certificate of the business of Yau Wing Hong at Shop 12 appeared to have been renewed on about 9 July 2004[80], but it was later cancelled on 15 July 2004[81].  However, it would appear that the Yau Wing Hong Accounts had continued and notwithstanding the registered Yau Wing Hong had ceased, the informal Yau Wing Hong carried out, not to carry out trading but to collect rent from the properties held by Father and Mother.

K.2    What was the source of capital for the setting up of Yau Wing Hong

202.  It was Mother’s pleaded case that all along the Father and the Mother agreed and intended that the financial pool of their family would be shared by Father and Mother and that when Yau Wing Hong was set up in about 1980[82], there was an express oral agreement, a common understanding and intention between Father and Mother that Yau Wing Hong would be their family business and that Father and Mother would be the beneficial owners of Yau Wing Hong in equal shares despite the business registration and bank accounts of Yau Wing Hong being registered in the sole name of Father.

203.  Mother’s pleaded case was also that Yau Wing Hong was set up with the capital funded predominantly by Mother and from the mortgage loan of Chung Sing Flat and that Mother worked very hard for Yau Wing Hong since around 1980 until she retired in or around 2000[83].

204.  On the other hand, D’s case was that Father was the registered sole proprietor of Yau Wing Hong and was the sole beneficial owner and that Yau Wing Hong was principally, if not solely, financed by Father’s own financial resources and/or with funds from mortgage of properties purchased with funds of Father[84].

205.  I find earlier that Father and Mother went to Lau Fau Shan to work as hawkers in late 1979/early 1980.  Further, as seen earlier in the Ledgers, the parallel trading business or business in trading in miscellaneous goods in Lau Fau Shan was set up not later than 1 May 1980 when the Ledgers started to be recorded, and it was possible that the name of Yau Wing Hong was used and adopted at that time informally. 

206.  It was Mother’s evidence that they moved to work as hawkers in Lau Fau Shan with funds from their own savings, a loan from a friend or their tenant, Mr Pang and also HK$10,000 from Madam Leung.

207.  D’s evidence was that Father had told him that he had used the compensation payment from the handbag factory to start the hawker business in Lau Fau Shan.

208.  This was denied by Mother.  During the trial, she had said that Father only received about HK$1,000 odd upon his employment at the handbag factory being terminated.  Further, while working the rattan factory Wing Tai, Father had a fight with someone and that Father did not bring any money home, and that at the time Father also needed to pay for medical expenses/medication for his 2^nd elder sister.  This was also what Mother said why Father had obtained the 2^nd Mortgage Loan on the Chung Sing Flat, which was in December 1977, and that it was not for paying the purchase price of Kei Yip Flat, as alleged by D.

209.  D’s evidence was based on what he was allegedly told by Father.  Even though he would be about 19 or 20 years old, there was no sufficient evidence that he knew exactly the source of funds when Father and Mother started to work as hawkers in Lau Fau Shan.

210.  By 1979, it would appear that Madam Leung was doing quite well having married a rich man.  As seen from the Land Registry records, Madam Leung had bought two properties, namely (i) a roof flat in Man Hoi Mansion in Cheung Sha Wan Road on 16 November 1979 at a consideration of HK$170,000 (pt) with a mortgage loan which was discharged on 12 May 1980[85]; and (ii) a 2^nd floor flat with flat roofs in Cheuk Wah House in Nam Cheong Street on 20 December 1980 at a consideration of HK$339,000 with a mortgage loan for HK$200,000 which was discharged on 16 March 1982 and later there was another mortgage loan for HK$100,000 on 4 October 1982 which was discharged on 19 November 1982.  Madam Leung later sold the property on 23 February 1990 for HK$400,000.

211.  Both the above properties were bought by Madam Leung with mortgage loans, and not paid outright as said by Mother.  However, both the mortgage loans were discharged within a short time.  The one on Man Hoi Mansion was discharged by Madam Leung in 6 months’ time and the one on Cheuk Wah Building on Nam Cheong Street was discharged by Madam Leung within 2 years.

212.  In view of the very close relationship between Mother and Madam Leung, and Madam Leung had always helped Mother as mentioned earlier, it was not improbable that when Father and Mother first went to Lau Fau Shan to work as hawkers in late 1979 or early 1980 that Madam Leung did help them but there was no sufficient evidence that it was as much as HK$10,000.  Even though during the trial, Mother had said that Father had no savings, in her written statement, she did say they had used savings kept at home. As for the loan from Mr Pang who was one of the tenants at Chung Sing Flat, Mother had said it was HK$1,200 but D had said the tenants had moved away prior to 1979. 

213.  Anyway, having considered the evidence, I find more probable than not that the initial capital for buying goods for the hawker business were contributed mainly by both Father and Mother from their joint savings and from their profits of their hawking business, they then set up the miscellaneous goods/parallel trading business by 1 May 1980.

214.  It was not disputed that Father had used his personal bank account for the business in Lau Fau Shan.  From the cover page of the Bank Transactions Record, (item (iv)) of the Ledgers, it would appear that there was a bank account at the Far East Bank opened in March 1980.  It was not clear in whose name this account was held even though on the cover page, some one had written “Yip” against the account.  Then in September 1982, there was an account opened at Hang Seng and it appeared that some one had again written “Yip” against this. 

215.  Thus, it would appear that between 1980 and 1982, there were two bank accounts only.

216.  From the Year - End Balances (item (v)) of the Ledgers, it was written as follows[86]:

Period	Amount
May to December 1980	$57,892.00
1981	$229,000.00
1982	$331,917.53 (including a stone hut and a wooden hut)
1983	$829,663.80 (including Shop 12)

217.  Notwithstanding what was written above, in the Annual Accounts (item (ii)) of the Ledgers, between May 1980 – December 1980, the amount recorded was HK$56,892.  It was further recorded that there were total expenses of HK$41,020 and the net profits for that period were HK$15,827[87].  Mother’s evidence in her witness statement that the business had made some HK$50,000 odd during May to December 1980 would seem to be referring to  gross profits only[88].  As for the “7 part time workers” mentioned in her written evidence[89], Mother seemed to be referring to an item of “salary 5,000 x 7”.  However, what was recorded in the Annual Accounts for 1980 was for a period 7 months, rather than 7 employees as it was not a monthly ledger.

218.  What was clear from the Annual Accounts that the profits increased greatly during the year from January – December 1981 to HK$308,950.  After deducting all the expenses including an item “salary 5,500 x 12”, the net profits were HK$229,990[90]. For January to December 1982, the net profits were HK$137,360[91], but with the stock, the stone hut and the wooden hut, and the bank balances, the assets at end of 1982 were a total of HK$439,901.  Thereafter, at end of December 1983, the assets were a total of HK$924,663[92] including Shop 12.

219.  The stone hut mentioned by the Mother in her witness statement that was purchased in December 1981 in Ho Tin in Lau Fau Shan[93]  should be the stone hut recorded in the Year End Balances, (item (v)) of the Ledgers, bought for HK$50,000.  Mother had said in her witness statement that as Kei Yip Flat was in a walk up building, it was inconvenient for moving the stock in and out and they then bought a stone hut in Ho Tin in December 1981 for storage.  During the trial, Mother’s evidence seemed to be that she wanted to build two more storeys to the stone hut but the Government did not issue a building licence, and the stone hut was then sold for HK$40,000.  She did not dispute that the stone hut was purchased in Father’s name.

220.  According to the Year End Balances item (v) of the Ledgers, in 1982, there was also a wooden hut was bought for HK$35,000[94].  This was not mentioned by Mother in her witness statement but by D in his witness statement[95].  D had said in his witness statement that to accommodate the need to load and unload the goods, and as Kei Yip Flat was not near the coast, a wooden hut was then bought near the sea in Lau Fau Shan for loading and unloading of goods and that D had helped in the loading and unloading of goods.  However, as the wooden hut was not bought until the year of 1982, and as D’s own evidence was that he stopped helping his parents in Lau Fau Shan at end of April 1981 and started working for Espirit on 1 May 1981[96], D could not really have spent that much time in helping with the loading and unloading of goods from the wooden hut, if at all.

221.  It can also be seen in the Year End Balances for the year ended 30 December 1983, on 10 November 1983, a total sum of HK$421,185 was spent on the purchase of Shop 12 and renovation expenses and the amount of $829,663.80 had included Shop 12 as part of the balance.  There was also a sum of HK$350,217.10 which was said to be overdraft facilities from Hang Seng Bank as at 30 December 1983, but there was also a fixed deposit of HK$550,000 at Hang Seng Bank as at 30 December 1983.

222.  D’s evidence in his witness statement was Shop 12 was purchased by Father mortgaging Chung Sing Flat in 1982[97].  D seemed to be referring to the 4^th Mortgage Loan for HK$100,000 obtained on 22 Mach 1982.  However, this did not seem probable as the 4^th Mortgage Loan on Chung Sing Flat was taken out some 20 months before the purchase of Shop 12 and there was no evidence in the accounts that the purchase money for Shop 12 had come from the 4^th Mortgage Loan or any mortgage loans on properties.

223.  Mother had referred to in paragraph 22 of her 1^st witness statement of a mortgage loan obtained for Father and Mother to purchase video machines, digital watches[98] and this would have been the 4^th Mortgage Loan.  However, Mother somewhat confused under cross examination and had said that the 4^th Mortgage Loan was for Father to raise money to help his younger brother to rebuild his collapsed house in Mainland China.  Anyway, under re-examination, Mother had clarified that the 4^th Mortgage Loan was for purchase of goods but Father had also paid for his younger brother to rebuild his collapsed house.

224.  Mother seemed to jump from the repayment of the 2^nd Mortgage Loan than to the 4^th Mortgage Loan in her written evidence without mentioning the 3^rd Mortgage Loan.  She was not asked about it either. 

225.  However, and notwithstanding that Mr Lau said that D did not accept that the 4^th Mortgage Loan was for the purchase of goods, it was D’s  evidence in his own witness statement that Father had mortgaged Chung Sing Flat and other property/properties on several occasions which he had repaid and borrowed again and that the mortgage instalments prior to middle of 1979 were paid from his salaries from the handbag factory and after end of 1979, they were paid out of the business profits in Lau Fau Shan.  Further, D had said Father did not mention from which bank/s were the mortgage loans obtained and that he only knew that Father had a current account at Hang Seng Bank[99].

226.  Although D did not say mention the purpose of these mortgage loans, what he said was in connection with the Lau Fau Shan period.  Further, there was no other explanation or reason put forward by D as to why Father would obtain those mortgage loans from Chung Sing Flat and/or other property/properties.

227.  In 1979 or during the Lau Fau Shan period, the only properties purchased by Father and/or Mother were the Chung Sing Flat and the Kei Yip Flat, apart from the stone hut and the wooden hut.  In the Bank Transaction Records, on the 1^st page, 5 bank accounts were listed including the bank account of Yau Wing Hong at Hang Seng Bank and further there was a bank account at Far East Bank, and there was a reference to there being an overdraft opened in May 1980, against which there were 2 figures, one “50000” and the other “75000” (?)[100].

228.  There were two mortgage loans taken out on Kei Yip Flat, one on 9 July 1980 for HK$50,000 and a further charge for HK$50,000 on 6 October 1982, both from Far East Bank.  When Mother was asked about these two mortgage loans during the trial, she had said they were borrowed for Father for his use for maintaining a capital flow (週轉), and that the loans were with her consent. 

229.  Although there was no sufficient evidence that the Far East Bank account overdraft had any connection with the mortgage loans on Kei Yip Flat from the Far East Bank, Mother’s evidence that those mortgage loans were for Father’s use for capital flow was not really challenged and in fact accords with D’s own written evidence that Father had obtained mortgage loans on properties. 

230.  The 4 mortgage loans, namely the two mortgage loans on Kei Yip Flat respectively on 9 July 1980 for HK$50,000 and on 6 October 1982 for HK$50,000 from the Far East Bank and also the two mortgage loans on Chung Sing Flat, namely the 3^rd Mortgage Loan on 19 December 1980 for HK$65,000 and the 4^th Mortgage Loan on 22 March 1982 for HK$100,000 from the Hang Seng Bank were all obtained during almost the height of the business or trading in miscellaneous goods in Lau Fau Shan.

231.  Having considered all the evidence, I find that it more probable than not that those 4 mortgage loans which were in 1980 and 1982 were all obtained for the use for the business in Lau Fau Shan and not really for the registered Yau Wing Hong as it was only registered in July 1984.   

232.  As seen in the Annual Accounts, (item (ii)) of the Ledgers, as at 20 June 1984 the overdraft at Hang Seng Bank was about HK$151,496 and the fixed deposit at Hang Seng Bank was HK$300,000[101] and in July 1984, the fixed deposit was stated to be HK$300,000[102]. Further, as seen in Yau Wing Hong Accounts, the Yau Wing Hong bank account at Hang Seng Bank was only opened on 4 December 1984[103].  The bank account/s used by Yau Wing Hong between 10 July 1984 and 4 December 1984 appeared to be the Hang Seng Bank Accounts held in Father’s personal name as was before in Lau Fau Shan.  The Hang Seng Bank overdraft account which was in Father’s personal name was only cancelled on 18 February 1995[104].

233.  There was no sufficient evidence that Father had financed the setting up of the registered Yau Wing Hong solely as alleged by D.  As said earlier, the business in May 1980 in Lau Fau Shan was set up with profits from the hawking business.  By the time it was registered, Father and Mother had already worked firstly as hawkers and then in the business parallel trading/miscellaneous goods trading in Lau Fau Shan for over 4 years from May 1980 to 10 July 1984, and the evidence showed that they were doing well.  In my view, the business in Lau Fau Shan was the joint business of Father and Mother notwithstanding that the bank account/s was/were held in sole name of Father and they had used both the Kei Yin Flat and the Chung Sing Flat for financing their business.

234.  Having considered all the evidence, it is my finding that more probable than not, the setting up of the registered Yau Wing Hong and the purchase of Shop 12 was from the joint earnings and savings of Father and Mother from their business in Lau Fau Shan in which they worked as equal partners.

K.3    What was Mother’s role in Yau Wing Hong

235.  Mother’s pleaded case was that from about 1983 to about 1988, she worked at Shop 12 in the capacity of a boss of Yau Wing Hong in the various businesses.

236.  This was denied by D who averred that Mother, as Father’s wife, only undertook some casual sewing work and provided some assistance to Father with the daily work in Father’s operation of his different businesses and that Father was at all material times, the owner or “boss” of the different businesses of Yau Wing Hong.  D’s own evidence during the trial was that Father had said to him “呢生人最榮幸係娶咗我阿媽”, namely it was his greatest honour to have married Mother.  D’s case was that Mother’s only played a supporting role.

237.  It was however Kam Yee’s evidence in her witness statement that Father had never told any one that Yau Wing Hong belonged to him solely, and on the contrary, he often praised Mother for her contributions to his relatives and friends.

238.  One of Mother’s witnesses Mr Mak was the District Councillor for Yuen Long at the time he made his witness statement.  He met Father and Mother in about 1984-1985.  He had described Yau Wing Hong as a “夫妻檔”/a “husband and wife partnership” and that Father was more outgoing whereas Mother was hardworking and would stay and manage the shop.  Another of Mother’s witness Mr Cheung met Father and Mother in 1989-1990, and he had participated in buying and selling properties in Yuen Long together with Father and Mother and that it was always Mother who would bring him to view various properties.  He had described Mother as very hard working and the main force behind Yau Wing Hong, and that Father often would spend the mornings having tea and Father always liked to talk about speculating to shares and foreign currencies.  As for Mother’s witness, Mr Lo, he was the Yuen Long District Councillor between 1991 to 2003 and met Father and Mother in about 1992.  He often visited Yau Wing Hong but would often only see Mother and that Father was often not there, and that if one did not know them, one might think Mother was the boss.  He had said the business was their joint business and that “男人做持牌人, 女人坐陣”.

239.  I find the above three witnesses were all credible witnesses and I accept their evidence.

240.  Having considered all the above, I am satisfied that Mother had worked at Shop 12 in the capacity of an owner, or a partner or “boss” of Yau Wing Hong.

K.4    What was the Father’s role in Yau Wing Hong

241.  Mother’s evidence in her 2^nd witness statement was that she had received 8 years of education in Mainland China.  However, during the trial, Mother herself had said she received very little education in Mainland China and did not even complete primary school, but she said she could read and write Chinese.  Mother accepted that Father was much better in written Chinese than she. 

242.  Having considered her own evidence, I find it was more probable than not that it was Father who chose the name Yau Wing Hong even though Mother had claimed credit for this. 

243.  Mother had said under cross examination that she was moving goods around herself in the business in Lau Fau Shan and she was responsible for selling while Father was responsible for receiving monies.  She said she was the one who placed orders for, say glasses from Taiwan, the electronic watches from Putian in Mainland and that she was the one who contacted the boss there.  During the trial, Mother had mentioned that D did go with her to somewhere on the 6^th floor in a building in Tsuen Wan to order the electronic watch components but she denied that D had helped in the business in Lau Fau Shan and said that D seldom went to Lau Fau Shan, and that other than helping to work at Shop 12 for a short time in assembling watches and in delivery of goods, he did not participate in the business of Yau Wing Hong.

244.  Mother’s evidence was that she obtained a driving licence in March 1984 to help in delivering the goods.  Further, as said earlier, it was in 1986/1987 that Yau Wing Hong changed the nature of business to that of a store.  By then, Father was 53/54 or 55 /56 years old. Mother was 47 years old.  Mother had said she was the one who ran the store by making the soya bean drink, herbal tea, instant noodles for breakfast, sandwiches and various drinks, and that she had got up at 4 am in the morning and worked until 10 pm every day to work at the store while Father would only read newspapers or would go out to having tea with friends as Father was at that time already semi-retired.  

245.  By the time the estate agency business commenced in February 1989, Mother was 50 and Father was 58 (or 56) years old.  Mother obtained a licence for an estate salesperson although Father also obtained a licence for an estate agent.  D himself had admitted that Father could not have worked long after the commencement of the estate agency business.  In fact, as seen in Annex A, most of the short term investments and also a development project was carried out by Mother.

246.  In my view, Ka Kit’s description of Father and Mother were “一文一武” was an accurate description.  As one of her own witnesses had said, it was a “husband and wife partnership”.  Having considered all the evidence, I am satisfied that Father and Mother had both played an equal role in the business in Lau Fau Shan and in the registered business of Yau Wing Hong.

K.5    Who was the person primarily generating profit of Yau Wing Hong? 

247.  Mother’s case was that it was both of them who were generating the profits of Yau Wing Hong.  D’s case was that it was only Father. 

248.  The business of Father and Mother went through several periods, namely (1) hawking business from 1979 to early 1980; (2) the parallel trading or trading in miscellaneous goods in Lau Fau Shan from not later than 1 May 1980 onwards, probably under the un-registered name of Yau Wing Hong at Kei Yip Flat, until July 1984; (3) continuing the trading in miscellaneous goods under the registered Yau Wing Hong at Shop 12 from 10 July 1984 until about 1986/1987; (4) changing to the store business in about 1986/1987; (5) changing to the estate agency business from February 1989; (6) temporary suspension of business in May 2001 and renting out part of Shop 12; (7) the registered Yau Wing Hong ceasing business formally in January 2004; and (8) thereafter continuing using the unregistered name of Yau Wing Hong to collect rent from properties held by Father and/or Mother.

249.  In light of what I have found earlier, both Father and Mother were generating the profits in periods (1), (2) and (3).  For period (4), Mother had said she was the main person who was making the tea, snack, noodles and sandwiches and she had said Father was only keeping accounts.  Her evidence was not really challenged.  Further, one of her witnesses, Mr Mak, had said she often sold to him her home made chrysanthemum tea.  I am of the view that for this period, Mother was probably the one who was primarily generating the profits. 

250.  Most of the family money was made during period (5), after the commencement of the estate agency business.  The profits of the estate agency business of Yau Wing Hong appeared to be mainly from 3 sources, (i) from service fees/commissions paid by clients; (ii) from short term property investments made by Mother and/or Father, and (iii) from rental income of long term investment properties.  I accept Mother’s evidence that she was mainly the one bringing clients to view properties and this was also supported by one of her witnesses Mr Cheung, and Father was responsible for collecting and recording the rent and keeping the Ledgers.  Further, as said earlier and as seen in Annex A, almost all the short term property investments and a small houses development project were made in Mother’s name.

251.  As seen in the Estate Agency Accounts, (item (iv)) of the Ledgers which were between February 1989 – July 1990, the “service fee” received in February 1989 was initially only HK$4,578 and in December 1989 was HK$30,373 9 although in January 1990, it fell to HK$15,625 and on average until July 1990 was not more than HK$20,000 per month^[105].   As for the profits made by short term property investments, these were reflected in the tax returns filed under Mother’s name but it did not appear that all such tax returns had been produced.  The rental income should be reflected in property tax returns but again, not all these had not been produced.

252.  Mother’s evidence in her witness statement was all the income of Father and Mother were paid into (i) bank account/s held in Yau Wing Hong’s name; or (ii) bank account/s held in Father’s sole name on behalf of Yau Wing Hong (collectively “Yau Wing Hong Bank Accounts”). It was also her written evidence all the estate agency business of Yau Wing Hong, such as property investments including the down payments, mortgage instalments, the expenses of Mother and Father, the family expenses and all expenses of the properties were paid out of the assets and profits of Yau Wing Hong, and for any long term property investments, the rental income and rental deposit were paid into the Yau Wing Hong Bank Accounts.  Further, any profits made by Mother from properties purchased in her sole name for short term investments were also deposited into Yau Wing Hong Bank Accounts.

253.  It would seem that there were no profits tax returns filed in the name of Yau Wing Hong, and that separate profits tax returns were filed respectively in Mother’s name and Father’s name.  As said, properties purchased for short term purposes were mainly registered in Mother’s name and that tax returns were filed in her name for such profits, and this could be seen in Profits & Loss Account for the period of 1/4/90 to 31/3/91 and the period of 1/4/91 to 31/31/3/92 under “Tsang Yee Kam (Property Dealing)^[106].

254.  In particular, the Profits & Loss Account, for the financial year 1/4/92 to 21/3/93 was headed “Yau Wing Hong Estate Agency” and thereunder, there were two sections, one section simply “Profits & Loss Account 1/4/92 to 31/3/93”, with the income and expenses of Yau Wing Hong and net profit of HK$26,412 for the year and one section headed “Profits & Loss Account (on property dealing) for period ended 31/3/93 by my wife” which recorded the purchase and sale of Flat 4, 4/F, Yik Fat Building, of net profit of HK$77,039.  The total net profit certified by Father for Yau Wing Hong was HK$103,451^[107].

255.  It would appear that there was an attempt to file one tax return under “Yau Wing Hong Estate Agency” for the financial year 1992/1993, but this was not followed up and thereafter, there were individual income tax returns were filed, one by Father and one by Mother.  It would further appear that by filing individual income tax returns, they were be able to elect personal assessment to reduce the total tax payable.  This can be seen in the Notices of Individual Tax for the year 2010/2011, in which by filing separately, the total tax payable was HK$53,318, whereas if a joint return was filed, it would be HK$89,328^[108]. In any event, the total amount of HK$53,318 was paid by Father by one cheque^[109].

256.  I find that the filing of individual income tax returns separately was probably a mechanism to reduce tax.  In my view, the fact that Father’s tax liability was higher than Mother’s would not mean that Father was the one who was primarily generating profits of Yau Wing Hong.

257.  Mr Leung had in his Closing Submissions set out the modus  operandi carried throughout in the business of Yau Wing Hong to show the very significant role played by Mother throughout and that it was Mother who was the personal primarily operating the business and generating the profits of Yau Wing Hong^[110].

258.  Having considered all the evidence, I find that Mother did play a very significant role in generating the profits of the estate agency business of Yau Wing Hong, namely for period (5).  Thereafter, there was only one short term investment made by Mother in 2006 which was over 2 years after the full cessation business of Yau Wing Hong.  The Carparking Space was purchased by Father and Mother from D, to help out D.  I will consider the two Mainland properties later.  There was no sufficient evidence that there was any income from commissions or service fees in period (6) or thereafter. 

259.  All in all, I am satisfied that in the very least, Mother and Father generated the profits of their business in Lau Fau Shan and the registered Yau Wing Hong jointly and equally.

K.6    Whether there was a common understanding and intention between Father and Mother that Yau Wing Hong’s profits should be shared between Father and Mother equally

260.  It was Mother’s pleaded case when they set up Yau Wing Hong as their family business in Lau Fau Shan in about 1980, there was an express oral agreement, a common understanding and intention between Father and Mother that Yau Wing Hong would be their family business and Father and Mother would be the beneficial owners of Yau Wing Hong in equal shares notwithstanding that the business registration was in the sole name of Father[111].

261.  Further, it was Mother’s written evidence that at the commencement of the business under the name of Yau Wing Hong, there was a common understanding and agreement between Father and her that Yau Wing Hong was a business built up by the two of them through hard work and that they equally owned the assets of Yau Wing Hong, and that it was only because Yau Wing Hong was the head of the family, Mother let him hold the business registration in his sole name[112].

262.  There was no written evidence from Mother as to what  express words were alleged to have uttered by Father or how the express oral agreement was reached, save that it was her evidence that Father was completely clear and had agreed to all assets of Yau Wing Hong including all assets in the safe were to be owned jointly by Father and Mother[113].

263.  Mother’s evidence in her witness statement was that notwithstanding that separate individual tax returns were filed, all the income/profits reported in the tax returns were credited into the Yau Wing Hong Accounts.

264.  Mother’s evidence was also that it was through the hard work of both of them that they were able to afford to purchase several properties during the period between 1983 to 1998.  As said earlier, During that period, she had also purchased properties in her sole name for short term investments and all profits had been credited by her into Yau Wing Hong Bank Accounts, and this was because she and Father jointly owned all assets of Yau Wing Hong, and that if the assets of Yau Wing Hong was Father’s sole assets, she would not have credited all profits from the properties held in her sole name into the Yau Wing Hong Accounts[114].

265.  There was no sufficient evidence to contradict what Mother had said that she had credited all profits from the short term investments in properties into the Yau Wing Hong Accounts. 

266.  Further, although Shop 12 (with Father and Mother as joint tenants at the time) was purchased outright without any mortgage loan, about a year after the purchase, on 29 December 1984, it was mortgaged for all sums of money including general banking facilities to the Hang Seng Bank to the extent of HK$200,000, and when this mortgage loan was discharged on 6 April 1989, it was mortgaged to the Sin Hua Bank and this mortgage loan discharged on 1 July 1991[115].

267.  Also Shop 16A (with Father and Mother as joint tenants at the time) was purchased with a mortgage loan on 3 April 1986 from the Nanyang Bank, the mortgage was for Father as the “Principal”, who at that time kept one or more account(s) with Nanyang Bank, to secure all sums of money including general banking facilities to the extent of HK$200,000.  Although this mortgage loan was discharged on 6 April 1989 but on the same day, it was mortgaged to the Sin Hua Bank as security for general banking facilities to Yau Wing Hong as “Borrower” and this mortgage loan was only discharged on 1 July 1991[116].  When Mother was asked during the trial, she had said that the both mortgage loans were for business “週轉”.

268.  Again, for Shop 11 (with Father and Mother as joint tenants at the time) was purchased with a mortgage loan on 14 November 1990 from Po Sang Bank, the mortgage was for all monies in respect of general banking facilities and this was discharged on 16 September 1993[117].

269.  In short, Mother’s evidence at the trial was that she was aware of the above mortgage loans, and that they were all for business purposes.

270.  In the Year End Balances, (item (v)) of the Ledgers, there was one page recording the total of the bank balance/s as at December of each calendar year commencing from December 1980 to December 1997 and  for the year ending December 1994, there was a record of “ less Leung Wai Fong 200,000”^[118]. As seen in another set of Ledgers produced by D, it was recorded that on about March 1994, Madam Leung had deposited $300,000 with Father/Yau Wing Hong, and on 24 March 1994, 3 May 1995 and 28 May 1995, there were withdrawals totalling $130,000 and also a withdrawals of HK$40,000 on 16 May 2002, leaving a balance of HK$130,000 outstanding to Madam Leung^[119].

271.  When asked during the trial about the above transactions, Mother said she had no recollection.  However, it would appear that Madam Leung had continued to entrust monies with Father and Mother and this was no doubt through her close relationship with Mother as I have found earlier.

272.  According to Mother, Madam Leung was admitted into hospital in May 2004 because of lung cancer, and on 17 May 2004, with Madam Leung’s consent, an amount of HK$207,000 was transferred from Madam Leung’s bank account at Sin Hua Bank into Mother’s personal account, and she transferred the amount into the Hang Seng Bank account  no 221-056716-001 held in name Yau Wing Hong[120]. Further, on 15 September 2005, Mother said she had transferred another HK$261,963.80 into Yau Wing Bank Accounts, as seen in a bank statement of 30 September 2005 of Yau Wing Hong Account no 221-056716-001 at Hang Seng Bank^[121].

273.  The above transactions were not disputed by D but D pointed out that $156,500 out of the said $207,000 were withdrawn by cheque the same day and a sum of $260,000 out HK$261,963.80 was withdrawn by cheque on 20 September 2005, whereabouts of both withdrawals unknown. However, only Father had signing rights and the cheques would have been signed by him.  In any event, at least $50,500 of the 1^st sum had remained in the Yau Wing Hong Bank account with Hang Seng Bank. 

274.  I find there was no sufficient evidence to dispute what Mother had said, that she had credited all the profits made out of properties held in her sole name into the Yau Wing Hong Accounts on the common understanding and intention between her and Father that the assets of Yau Wing Hong belonged to them jointly and equally. Further, as said earlier, notwithstanding the formal cessation of Yau Wing Hong, the Yau Wing Hong Bank Accounts, in particular, the Hang Seng Bank Account 221-056716-001 continued to exist and it would appear that rents were continued to be collected in the name of Yau Wing Hong as receipts were issued in name of Yau Wing Hong. 

275.  Having considered all the evidence, I find that a common understanding and intention as pleaded by Mother at the time of setting up of Yau Wing Hong could be inferred from her conduct including the following:

i.  Mother continued to work hard as set out in the modus operandi in Mr Leung’s Closing Submissions[122];

ii.  Mother continued to consent to mortgage loans being obtained on the Joint Properties for the use of the business at Lau Fau Shan and for the registered business of Yau Wing Hong;

iii.  Mother continued to pay all profits she made in any short term investments in her name into the Yau Wing Hong Bank Accounts.   

iv.  Mother had paid into the Yau Wing Hong Bank Accounts sums she had received from Madam Leung.

276.  I am thus satisfied that at the time of setting up their parallel trading business not later than 1 May 1980 and later of the registered Yau Wing Hong as from 10 July 1984, it was the common intention of Father and Mother that they would be equal partners and they would have equal beneficial interests in the business and each would be entitled to 50% of the business assets and profits.  I find there was a common intention constructive trust and that Father had held 50% of the assets and profits of Yau Wing Hong for Mother.

277.  Alternatively, in light of the fact that I have found that the source of the capital for the registered Yau Wing Hong came from the business at Lau Fau Shan, the source of capital of which was contributed and/or paid by Father and Mother equally, I am of the view that Father would have held 50% of the assets and profits of Yau Wing Hong for Mother also on resulting trust.

278.  Having said this, as seen later, there was no sufficient evidence from the Mother as to what assets and profits there were at the time of formal cessation of the registered business of Yau Wing Hong, apart from the landed properties set out hereinafter and Sale Proceeds.  As Mother has separately sought a declaration in relation to her beneficial interests in Shop 10 and the Sale Proceeds, being assets of Yau Wing Hong, I do not find it necessary to make a separate declaration generally in relation to the assets and profits of Yau Wing Hong.

L.   Subject Matter (3) – Other Properties     

L.1    Shop 10

279.  It was Mother’s pleaded case that the down payment and bank mortgage instalments of Shop 10 were funded by Father and Mother through Yau Wing Hong, and that at the time of the purchase of Shop 10 on 2 March 1989, both Father and Mother had intended purchasing and selling Shop 10 for short term speculation purpose and thus it was conveyed only to the sole name of Father, merely for the sake of convenience.  However, as they could not resell Shop 10 for a good term after purchase, they then decided to keep Shop 10 for long term investment/rental income, and that Father failed and/or neglected to transfer Shop 10 into their joint names although it was apparent that both Father and Mother were beneficial owners of Shop 10 in equal shares[123].

280.  Mother’s evidence was that the intention of Father and her at the time of the purchase was that Shop 10 was for short term speculation, same as Shop 6, but as they were not able to sell it at a good price, and they later purchased Shop 11 on 14 November 1990, they then decided to keep the two connected/adjacent shop spaces for long term investment.  This was supported by Ka Kit’s evidence.

281.  Ka Kit said he went with Mother to see the then owner of Shop 10 and to discuss the purchase, and that his parents had told him that they would buy only for short term speculation.  In fact, at that time, they had just bought Shop 6 and later they sold Shop 6, but the market was quiet at the time then, and then they also bought Shop 11.  Ka Kit had also said that on one occasion in about 1993 inside Shop 12 he heard Mother asking Father to add her name to the title of Shop 10 and that Father had said as they were husband and wife, there was no need to differentiate between them and it was not necessary to incur again stamp duty and legal costs in order to all Mother’s name. 

282.  Mr Lau submitted that such evidence should be rejected as all along Ka Kit had said he did not care about the title ownership of various properties owned by his parents, and he could not explain why he could recall this particular conversation between his parents so many years ago. Under cross examination, Ka Kit said he did not eavesdrop deliberately to what Father and Mother were saying but he maintained that he did hear what Father said, although Mother did not herself refer to this conversation in her witness statement.  When Ka Kit was asked why he would remember this after some 27 years, Ka Kit had said as he was also working in the estate agency business, he knew and/or agreed that legal costs were expensive. 

283.  There was no sufficient evidence to contradict both Mother’s evidence and Ka Kit’s evidence that Shop 10 was intended originally for short term investment and later after Shop 11 was purchased, they had been rented out as connected shop spaces.  As seen in the 01.06.06 Note, the 4 shop spaces, namely Shops 11, 12, 16A were regarded by Father and Mother as a whole to be their assets not to be sold and were to be left for their 5 children notwithstanding Father having made the 2001 Will.  This in my view indicated that Father did not distinguish between Shop 10 and the other shop spaces.  I also find Ka Kit a reliable witness and I am prepared to accept what he said.

284.  Mr Lau had referred to what was said by Father in the Video Recording that Shop 10 was his.  What Father said was in response to the solicitor Mr Tse explaining to him that by reason of the Notices, Father and Mother had become tenants in common, and it was not quite clear as to whether what Father was referring to the title or the beneficial ownership.  In any event, as I have said earlier, there was no sufficient evidence that Mr Tse had gone through all those enquiries as set out by Cheung JA in the Choy Po Chun case or the “Golden Rule” in particular when there was an earlier will leaving everything to the Mother.

285.  Having considered the evidence, I find that Shop 10 was purchased from the assets of Yau Wing Hong and that all the down payments and bank mortgage instalments were paid from the assets and profits of Yau Wing Hong and/or from the Yau Wing Hong Accounts.  In light of my earlier finding that Father and Mother had an equal beneficial ownership in the assets of Yau Wing Hong, I am of the view that Shop 10 was an asset of Yau Wing Hong and that Mother should be entitled to 50% of the beneficial ownership of Shop 10.

L.2    Shop 11, Shop 12, Shop 16A, Carparking Space

286.  All the above properties were purchased between 1986 and 2003, within the period of the business of Yau Wing Hong.  I find more probable than not that they were also purchased out of the assets and profits of Yau Wing Hong, and in any event, they were purchased in the joint names of Father and Mother, and there was no counterclaim by D for the 50% share held by Mother.

L.3    The Sale Proceeds (of the Yau Wing Hong Tower in Dongguan), withdrawals from the Joint Account and the Dongguan Flat

287.  It was Mother’s pleaded case that in about 2003, Father and Mother had purchased a property in Dongguan, partly for rental and party for self-use, and that the purchase price was funded by Father and Mother through Yau Wing Hong and named Yau Wing Hong Tower.  Further, for the sake of convenience, Yau Wing Hong was conveyed into the sole name of Father and therefore Father held the half share of Yau Wing Hong Tower on trust for Mother.  Yau Wing Hong Tower was later sold in 2011 to one Yip Fung Cheung for RMB 1.8m (ie the Sale Proceeds).  Further, it was Mother’s pleaded case that after her stroke, she had signed authorisation letters to appoint Father to complete the sale transaction on Mother’s behalf and after completion, the Sale Proceeds were deposited into Father’s accounts with BOC Dongguan and the Bank of Dongguan[124].

288.  According to D’s Amended Defence, the piece of land was purchased by Father in about 2002 and that the construction of the building was completed in about late 2003, and that the funds for the purchase of the land and the constructions of the building and for defraying the outgoing expenses were financed by Father’s own financial resources.  It was D’s pleaded case that at a date unknown to D, Father sold the land and building. Although D admitted that Father did hold bank accounts with BOC Dongguan and the Bank of Dongguan, in the pleadings he had denied that the building was called Yau Wing Hong Tower, or that the Sale Proceeds were RMB 1.8m or that the Sale Proceeds were held in Father’s bank accounts with the two banks[125].

289.  Mother later produced a bundle of documents in relation to the Yau Wing Hong Tower.  Mother had also produced a copy of the licence for construction dated 2 January 2003 which indicated that construction work on the land was to commence in January 2003, and was to be completed in September 2003[126]. The building to be constructed was an area of 1,697 square meters and consisted of 4 levels.  It would appear from a rental agreement dated 5 January 2007 (for the period of 20.01.07 – 20.01.11), the building was referred to as “有榮行樓”/Yau Wing Hong Tower[127].

290.  Mother’s evidence during the trial was that initially she did not know about Father purchasing the land, and that the deal was recommended to Father by his younger brother, and later after purchasing the land, Yau Wing Hong Tower was then constructed, and then his later younger brother passed away.  Mother said she only found out about the transaction when one day she discovered that a large sum of money had disappeared from the joint account she held with Father, she then asked Father who then told her about the purchase.  Mother said she had gone to Dongguan to verify what Father told her. 

291.  Mother seemed to be confused over the Yau Wing Hong Tower transaction and the disappearance of the funds from a joint account of Father and Mother at Wing Hang Bank (“Joint Account”), and also the purchase of the Dongguan Flat.

292.  What was clear was that the Yau Wing Tower was completed in September 2003 and this was during the time when Yau Wing Hong was still in operation.  Further, the building was called Yau Wing Hong Tower.  Having considered the evidence, I am prepared to accept Mother’s evidence and find that more probable than not that the purchase price for the acquisition of the land and the construction costs were funded by Father and Mother through Yau Wing Hong.  

293.  Mother had produced two authorisation letters, the 1^st one dated 31 October 2010 to cancel all registered certificates previously signed by her and that any future sale and purchase was to be carried out by Father, and the 2^nd one dated 3 November 2010 to cancel all temporary land title certificates previously signed by her and that any future sale and purchase   was to be carried out by Father[128].  The 1^st authorisation letter bore a photocopy of Father’s Home Visit Permit and Father’s HKID card, as well as Mother’s HKID card.  The 2^nd authorisation letter bore photocopies of both Mother’s HKID card and Mother’s Home Visit Permit and a photocopy of Father’s name card. 

294.  It seems clear that both those authorisation letters concerned Mainland property transactions.  Although they were signed by Mother shortly before Father signed the formal sale agreement of Yau Wing Hong Tower on 9 November 2010 it was also at around the time the Dongguan Flat was purchased and thus the authorisation letters could also be in connection with the purchase of the Dongguan Flat.

295.  Anyway, Mother did produce a copy of the sale agreement of Yau Wing Hong Tower signed by Father as vendor and dated 9 November 2010 at a sale price of RMB 1.8m[129]. The sum of RMB 1.8m was to be made by 5 instalments, commencing with a sum of RMB 200,000 on 28 October 2010 followed by a total sum of RMB 800,000 to be paid between 15 to 25 January 2011.  Thereafter, there were 2 further instalments, RMB 550,000 on 15 April 2011 and RMB 250,000 on 15 July 2011, totalling RMB 800,000.  The balance (ie RMB 200,000) was to be paid when all the originals of the title documents were handed over to the purchaser, and it was stated that Ka Kit was authorised to receive the balance on behalf of Father if Father were unable to go and collect the balance.

296.  Father held at least two bank accounts at the Bank of Dongguan, the 1^st one opened on 10 January 2011 and the 2^nd opened on 8 August 2013 after Father’s mini stroke with D as his authorised agent[130].  The opening of the 1^st bank account at the Bank of Dongguan would coincide with the payment of the 2^nd instalment.  I understand that no bank statements from BOC Dongguan were available.

297.  Payments of the 1^st and 2^nd instalments for the sale price of Yau Wing Hong Tower would appear to have been received by a 葉志剛 on behalf of Father, who had deposited the 1^st instalment of RMB 200,000  into Father’s account at BOC Dongguan on 29 October 2010 and the 2^nd instalment of RMB 730,000 and RMB 70,000 respectively into Father’s account at the Bank of Dongguan on 20 January 2011[131].  Thereafter, there were other credits into the Bank of Dongguan.

298.  It would appear from the bank statements of the Bank of Dongguan that after monies were credited, there had been withdrawals, and without complete bank statements and the bank statements from the BOC Dongguan, it is not possible to trace all the Sale Proceeds.  Suffice to say, I find more probable than not, the Sale Proceeds were credited into Father’s bank accounts at BOC Dongguan and the Bank of Dongguan, at the time of sale, and there was no evidence that the Sale Proceeds had been transferred into the Yau Wing Hong Accounts in Hong Kong.  I am thus prepared to find that Mother should be entitled to 50% of the Sale Proceeds, or a sum of RMB 900,000.

299.  Mother had said in her witness statement that Father had transferred sums from the Joint account into an account held by Father at BOC Dongguan (RMB 800,000) and to an account held by Father at Bank of Dongguan (RMB 1,000,000) to be placed on fixed deposits to earn higher interests[132], and Mother then followed on in her witness statement to refer to the acquisition of the land and the construction of the Yau Wing Hong Tower[133] which seemed to suggest that the withdrawal of funds was connected with the Yau Wing Hong Tower. 

300.  Mother had produced copies of two bank statements from the Wing Hang Bank of the Joint Account[134].  It can be seen therein at as at 11 November 2009, there was a balance of about HK$3.6m in the account but by 16 January 2010, there was only about HK$57,000 left.  By the end of June 2010, the monies in the account had all been transferred. However, the large amounts of transfers/debits were to another bank account at Wing Hang Bank marked “TMB” or “YLB” which seemed to indicate the relevant branch, ie Tuen Mum Branch and Yuen Long Branch.  It was not clear whether those amounts were transferred to accounts held in Father’s sole name, although this was the Mother’s case.  There was also no sufficient evidence that those withdrawn seems ended up in Father’s accounts in BOC Dongguan or Bank of Dongguan or in Mainland China.

301.  In any event, as the above transactions were long after the completion of the construction of Yau Wing Hong Tower, and prior to the sale thereof, they were in my view clearly separate transactions from the purchase of the land and/or construction of Yau Wing Hong Tower.

302.  It would appear from Mother’s defence in the 3^rd Dongguan Action issued by D against her over the Dongguan Flat her then case was that the purchase price of the Dongguan Flat had come from a total of HK$1.5m withdrawn by Father on 30 December 2009 and 4 January 2010 from the Joint Account[135].  However the Dongguan Flat was purchased in October 2010 at a consideration of RMB 416,513 and according to D, the consideration had to be paid outright before 8 October 2010, although the registration date of the agreement was on 19 November 2010 and the Father was required to formally apply for the title registration certificate within 3 months^[136]. The title registration of the Dongguan Flat was eventually effected on 20 May 2011^[137].

303.  There was no sufficient evidence to contradict D’s evidence the purchase price of the Dongguan Flat had to be paid by Father prior to 8 October 2010.  This meant that it could not have come out of the Sale Proceeds.  There was also no sufficient evidence that the Dongguan Flat was purchased with monies withdrawn from the Joint Account, which was several months before the purchase.  Further, the Dongguan Flat was purchased some 6 years after the formal cessation of the registered Yau Wing Hong.  There was no sufficient evidence that it was purchased out of assets or profits of Yau Wing Hong, even though Mother’s evidence was she had stayed there.

304.  As mentioned earlier, the 1^st and 2^nd Dongguan Actions were commenced by Mother against D in Dongguan over the Mainland Funds.  Mr Lau submitted that as the subject matters in the two Dongguan Actions were identical to the Mother’s claim in the present action, and although there was no formal decision on merits in those two Dongguan Actions, it would be prima facie abuse on the Mother’s part.

305.  When Mother was asked during the trial in relation to the dismissal of the 1^st Dongguan Action, she said she did not recall.  When she was asked about the withdrawal of the 2^nd Action, she said this was because D refused to attend the hearing. 

306.  According to D, at the hearing of the 1^st Action, neither Mother nor her Mainland lawyers appeared and that D’s lawyers and the Bank of Dongguan’s lawyers and the Judge were all kept waiting for some 45 minutes.  Since Mother was legally represented, it was not clear why her lawyer did not attend the hearing which was 2 days prior to the hearing of the 2^nd Action.  There was no evidence that D had filed any defence to the two actions apart from instructing his lawyers to attend the hearing.  The court fees for dismissal of the 1^st Dongguan Action were RMB 4,400 and for the withdrawal of the 2^nd Dongguan Action was RMB 50. 

307.  The dismissal/withdrawal of the Dongguan Actions in June 2014 came about two months after Mother issued the present action.  As quoted by Chief Justice Ma in Ko Hong Yue v Chiu Pik Yuk & Ors (2021) 15 HKCFAR from what was said by Lord Millet, “It is one thing to refuse to allow a party to re-litigate a question which already been decided; it is quite another to deny him the opportunity of litigating for the first time a question which is not previously being adjudicated upon”[138].  Having considered the circumstances of this case and that Mother had quickly caused to be dismissed/withdrawn the two Dongguan Actions, I am satisfied that there had not been any abuse on Mother’s part and she should not be deprived the opportunity of litigating the issue of whether she should be entitled to 50% beneficial interest in the Sale Proceeds.

M.   Other assets of Yau Wing Hong 

308.  Mother has in her Amended Statement of Claim sought half of the assets of Yau Wing Hong and/or belonging to Yau Wing Hong.

309.  It seemed to be Mother’s pleaded case that all bank accounts held under Father’s name, the cash and properties kept in the safe place in the office of Yau Wing Hong belonged to Yau Wing Hong, and she then set out all the assets at the time of Father’s death, and her list of cash in Father’s bank accounts appeared to be compiled from what was set out by D in the schedule of Property in his application for the Probate[139], and the items which she said were found in the safe at Shop 12A.  However, her list did not seem to tally with the Supplemental Schedule of Property of what D said he had found in Shop 12A[140].

310.  When Father died on 8 September 2013, it was same 12 years since Yau Wing Hang first suspended trading on 1 May 2001 and 9 years after Yau Wing Hong had formally ceased business in January 2004.  There was no sufficient evidence as to what other assets of Yau Wing Hong there were at the time of suspension of trading and later formal cessation, save the landed properties mentioned earlier.  It was D’s pleaded case that Father was the owner of the various sums in his bank accounts, Father was the owner of the MTR shares, and also the items in the safe which included more items than what was listed by Mother.

311.  Apart from a blanket statement that all Father’s assets at the time of his death were assets of Yau Wing Hong, Mother did not offer any other evidence on this allegation.  Nor were there any submissions in this regard.   I do not find that there was sufficient evidence that all Father’s assets at the time of his death were assets of Yau Wing Hong. Mother’s claim on the cash at Father’s bank account and his MTR shares and/or his personal items and/or items in the safe in Shop 12A must fail.  On the other hand, the items in the Family House set out by D in the Supplemental Schedule of Property attached to the Probate were clearly family items and there was no sufficient evidence that they were Father’s sole assets.  In any event, this was not an issue before this Court.

312.  As for the loans Father and Mother lent to D for redemption of the Shum Fung flat[141] and the loan of the purchase of Greenfields flat[142] by D, there was no sufficient evidence to contradict D’s evidence that any amounts lent by Father to him had been repaid.  There was also no sufficient evidence to contradict D’s evidence that he had accounted for his share of proceeds from the sale of the Yuen Long Development (as defined in Annex A) in that he had spent it on Mother’s medical and/or other expenses.

N.   Account

313.  Mother has sought an account from D of half share of all the monthly rental income (including all rental deposits from the tenants) generated from the properties, subject to repayment of other outgoings and to pay Mother half share of all the monthly rental income (including all rental deposits from the tenants) generated from the properties.

314.  However, there was no sufficient evidence as to what liabilities or expenses there were of Yau Wing Hong or of the properties. There was no pleaded case   from Mother as to what agreement she and Father had on the division of net profits of Yau Wing Hong.  On the other hand, it was clearly Mother’s evidence that all the down payments of the properties, the mortgage instalments, the expenses of Father and Mother, the family expenses, and all the outgoings of the properties were paid by Father out of Yau Wing Hong Bank Accounts, and/or Yau Wing Hong’s assets[143].  There was nothing in the Amended Statement of Claim to indicate the amount of annual or monthly profits of Yau Wing Hong, or the annual or monthly personal expenses of Father and Mother or the family expenses or the mortgage instalments and outgoings between 1 May 1980 until 10 July 1984, and then from 10 July 1984 until January 2004 (cessation) or any payments received by Mother from Father and/or otherwise paid by Father out of profits and/or rental income.

315.  According to Kam Yee, after Mother’s stroke in January 2010, Father had paid Kam Yee HK$20,000 per month to help pay the living expenses of both Father and Mother, which was increased to HK$30,000 per month from middle of 2012.  Mother initially stayed in hospital and later was sent to the Christian United Rehabilitation Centre until May 2010 before being discharged.  There were also medical expenses which had been paid by Father.

316.  In any event, there was no properly pleaded case as to what living expenses Father had paid Mother from the income of the properties and/or Yau Wing Hong including what expenses he had paid for Mother and the family.  I am not prepared to order any account up until Father’s death on 8 September 2013.

317.  On 18 December 2013, Mother had gifted away 50% her share in the Joint Properties in which she held interest as a tenant-in-common after serving the Notices and also her interests in Kei Yip Flat.  In my view, she should only be entitled to an account between Father’s death on 8 September 2013 and 18 December 2013 to the Joint Properties in which she had a 50% share as a tenant-in common.  As for Chung Sing Flat and Shop 10, I am prepared to order an account for any income arising therefrom and outgoings thereof between 8 September 2013 until the date of transfer of 50% of the ownership to Mother by D as a result of this Court’s order herein, and to order D to pay any net rental income, if any, to Mother.  According to D, he had also paid Mother living expenses after Father’s death.  Any amount paid by him to Mother and/or for her benefit may be deducted from the amount he has to pay Mother pursuant to this Court’s order.  Any deficit will have to be shared equally between Mother and D. 

O.      Conclusion and Order

318.  In light of all above said, the effect of my order is:

(1)  a declaration is hereby granted that Father/D held/holds the Chung Sing Flat on trust for Mother and himself as tenants-in-common in equal shares;

(2)  D do within 3 months assign/transfer the title of half share of Chung Sing Flat to Mother or to her nominee;

(3)  a declaration is hereby granted that Father/D held/holds Shop 10 on trust for Mother and himself as tenants-in-common in equal shares;

(4)  D do within 3 months assign/transfer the title of half share of Shop 10 to Mother or to her nominee;

(5)  D to render account to Mother within 3 months hereof one half share of all monthly rental income (including rental deposits from the tenants) generated from Chung Sing Flat and Shop 10 until the date of transfer, subject to all outgoings between 8 September 2013 and the date of transfer;

(6)  D to render account to Mother within 3 months hereof one half of all monthly rental income (including rental deposits from the tenants) generated from Shops 11, 12, 16A, and Carparking Space, subject to all outgoings between 8 September 2013 and 18 December 2013;

(7)  D shall pay to Mother any amount owing to her within one month upon account being rendered in paragraphs (5) and (6)   above, subject to any deductions for any sums already paid by D to Mother after 8 September 2013.  Any deficit shall be shared equally.

(8)  a declaration is hereby granted that Father/D held/holds one half share of the Sale Proceeds including all interests generated from the Sale Proceeds on trust for Mother and Mother is entitled to one half share of the Sales Proceeds together with all interests generated thereon.

(9)  D shall render an account of the Sale Proceeds and interests thereon within 3 months of this order and D shall pay to Mother a sum equivalent to one half of the amount within 1 month upon rendering of the account.

319.  All transfer costs and stamp duty of Chung Sing Flat and Shop 10 shall be shared equally by Mother and D.  As for legal costs of this action, Mother is overall the successful party, and I order D to pay her costs of and incidental to this action, to be taxed if not agreed, with certificate for one counsel.  This is an order nisi, to be made final within 21 days.

Annex A

List of Properties