PETER MAN HO LAYE v. TAM MA LAI AND ANOTHER

HCA 1780/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1780 OF 2009

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BETWEEN

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JUDGMENT

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1.  This judgment is divided into the following sections :

Section	Para.
Introduction	2
Undisputed facts	3
Plaintiff’s case	13
Defendants’ case	15
Core issues     I.          Common intention of the parties over ownership of the Premises     II.        Adverse possession	18
Some general observations	19
I.          Common intention of the parties over ownership of the Premises	30
A.        The decision to purchase the Premises     A1.      The plaintiff’s version     A2.      The defendants’ version     A3.      Inferences to be drawn from the family letters	33 34 46 49
B.        Implementation of the decision to purchase	55
C.        Financial ability of Peter and the Deceased     C1.      Financial ability of Peter to shoulder the down payment     C2.      Financial ability of Peter to shoulder the mortgage instalments     C3.      Financial ability of the Deceased to shoulder the down payment     C4.      Financial Ability of the Deceased to shoulder the mortgage instalments         ·         C4(1)  When the 5th Uncle retired         ·         C4(2)  When the Deceased retired         ·         C4(3)   Another source of income of the Deceased	60 61 68 73 75 78 80 82
D.        Who Paid the Down payment?	86
E.         Who Paid the Mortgage Instalments?     E1.       Peter’s case     E2.       Defence case     E3.       The accelerated payment     E4.       Discharging the burden of proof	87 90 99 108 112
F.         Possession of title deeds since redemption of the mortgage	115
G.         General credibility of Peter and Madam Tam	121
H.        Findings on Common Intention of the Parties over Ownership of the Premises	131
II.        Adverse Possession	140
I.          1994: Madam Tam’s entry into occupation of the Premises	141
J.          1999: Deceased’s proposal of marriage to Madam Tam and his representation that he was the owner	154
K.        2000: Delivery of title deeds by the Deceased to Madam Tam	159
L.         Deceased’s demand for transfer of ownership from Peter	164
M.        Other matters	173
N.        Findings on adverse possession	175
O.        Mesne profits	182
Conclusion	183

Introduction

2.  The plaintiff (“Peter”) is the registered owner of the suit premises (“the Premises”). Mr. Laye Hong Hong was his 5^th Uncle (“the 5^th Uncle”).  Mr Laye Hong Kin (“the Deceased”) was his 6^th Uncle.  The 1^st defendant (“Madam Tam”) is the widow of the Deceased and is occupying the Premises. The centre of dispute is whether Peter or the Deceased was the real owner of the Premises.  Each side claims to have provided the full purchase price.  Peter also claims that he granted a licence to the 2 Uncles to reside at the Premises for life, which licence was revoked upon their deaths.  On the other hand, Madam Tam claims that Peter has been holding the Premises on resulting trust for the Deceased.  Alternatively, she claims that the Deceased or she had been in adverse possession for over 14 years as at the date of commencement of this action and has thereby extinguished the interest of Peter.

Undisputed Facts

3.  The following are undisputed facts or facts supported by indisputable documentary evidence which I find to be true and correct :

4.  Peter’s father (“the Father”) emigrated to the USA in about 1967.  Peter’s mother, Peter and his brother (“Tommy”) were left to live with the 2 Uncles and a servant at the Premises which were then rented.  The 2 Uncles took care of Peter’s family.

5.  In 1971, Peter and Tommy moved to the USA and have resided there ever since.  The 2 Uncles continued to live in the Premises with Peter’s mother who was ill and the servant.

6.  In July 1986, Peter and his Father visited the Uncles.  On 30 July 1986, Peter executed a Power of Attorney (“the 1986 Power of Attorney”) appointing the 5^th Uncle (not the Deceased) as the attorney for the purpose of purchasing the Premises and taking out a mortgage.

7.  On 2 February 1987, Peter became the registered owner of the Premises.  The down payment for the purchase was $100,000.  A mortgage was taken out in the name of Peter with the Wing On Bank Limited (“the Bank”) for the balance of the purchase price in the sum of $200,000. 

8.  The mortgage was redeemed by an accelerated payment of about $87,934.67 (‘the accelerated payment”) on 12 February 1993.  By a power of attorney in 1993 (“the 1993 Power of Attorney”) given by Peter, the title deeds were retrieved from the Bank.

9.  On 18 February 2000, the Deceased married Madam Tam. 

10.  Both Uncles had lived in the Premises until the end of their lives, on 18 July 2000 and 1 April 2007 respectively.  Peter, Tommy and the 2 Uncles remained close throughout their lives.

11.  On 5 June 2007, Peter wrote to Madam Tam stating that he and Tommy would send 2 more months’ maintenance to her.  He gave notice to recover possession by 31 August 2007.  Madam Tam replied by letters dated 30 July, 10 August and 11 August 2007, refusing to move out.

12.  Peter commenced proceedings on 5 August 2008 (originally by originating summons which was later converted to a writ action) for possession of the Premises and mesne profits.

The Plaintiff’s Case

13.  Peter claims that his Father initiated the idea of purchasing the Premises to accommodate the Uncles in view of their retirement and age.  He was designated by his Father as the owner. He appointed the 5^th Uncle as attorney to implement the purchase. He paid the down payment with a gift of US$5,000 from his Father and his own savings of US$10,000 from past earnings and student loans.  He borrowed a loan of US$7,500 from Tommy which covered the first 2 years’ mortgage instalments.  He continued to pay the mortgage by sending monthly sums to the Uncles. He made the accelerated payment with his own savings of US$2,000 and another loan of US$10,000 from Tommy.  All loans from Tommy had been fully repaid.  In addition, both he and Tommy had been sending monthly maintenance to the 2 Uncles until the end of their lives.

14.  Since purchase of the Premises, the 2 Uncles had been in occupation as licencees of Peter.  Madam Tam had an implied licence from Peter through the Deceased to stay in the Premises.

The Defendants’ Case

15.  Madam Tam sues in her capacity as administratrix of the Deceased and her personal capacity.  She asserts that it was the Deceased who provided the down payment and alone discharged the mortgage.  By reason of his advanced age and to circumvent difficulties in taking out a mortgage, he purchased the premises in Peter’s name.  The Deceased also asked the 5^th Uncle to be his attorney to handle the documentation.  All along the Deceased or, after his death, Madam Tam had been in possession of the title deeds.  The Deceased was the real beneficial owner.

16.  Alternatively, Madam Tam asserts that from 2 February 1987 to the time of his death, the Deceased had been in adverse possession.

17.  Further, Madam Tam claims that she started to occupy the Premises from December 1994 as a licencee of the Deceased and has been in adverse possession for 14 years.

THE CORE ISSUES

18.  The core issues are :

(I)   The common intention over ownership of the Premises — was it intended that Peter or the Deceased should be the real owner?

(II)   Adverse possession : had the Deceased or Madam Tam been in possession of the Premises for such period as to extinguish Peter’s interest?

SOME GENERAL OBSERVATIONS

19.  On Peter’s side, there are 3 witnesses — his half-brother Robert (PW1), Tommy (PW2) and Peter himself (PW3).  On Madam Tam’s side, there are herself (PW1), her neighbour Madam Ng (DW2), her friend Mr Wong (DW3), her son from the previous marriage Mr Chow (DW4) and her grand-daughter Ms Chow (DW5).

20.  Neither party has a perfect case as many documents of the USA banks and Hong Kong banks were only available for the 7 years before the date of request.  Witnesses have to try and recall incidents that happened as far back as 25 years.  It is not surprising that they have to “reconstruct” events out of the limited documents available.

21.  On Peter’s side, bank documents for the most crucial period covering 1983 to 1993 were completely missing.  He and Tommy also lack bank documents to prove their monthly maintenance to the Uncles until about 2001/2002.

22.  However, the burden of proof rests entirely on Madam Tam to establish both core issues.  She has an unenviable task.  Even on her best case, she came on stage only after the mortgage had been redeemed.  She inevitably has to piece together the very limited documentary evidence and hearsay information from the Deceased to construct her case. 

23.  Madam Tam’s reliance on hearsay information from the Deceased must be viewed with caution.  She could have been confused or her recollection could be incorrect.  Her confusion as to the 1986 and 1993 Powers of Attorney said to be based on what the Deceased told her is an example.

24.  A category of evidence which featured heavily in the case was a pile of 145 letters from the Father, Peter and Tommy to the Uncles (“the family letters”) produced by Madam Tam.  The way she disclosed them gave rise to criticism of concealment of material evidence.  She first produced some letters in her affirmation to oppose the originating summons.  Next, as she admitted in Court, she produced another set of family letters during an inspection exercise carried out on 12 January 2010.  Amongst them were 7 family letters now referred to in Tommy’s witness statement.  A week before the trial started, she produced yet another 127 pages of family letters which the defence claims to be irrelevant but was disclosed to save argument. Over half of those 127 pages were letters to Peter’s mother and were irrelevant but those to the Uncles were relevant.  Letters produced in the 2^nd and 3^rd round (addressed to the Uncles) certainly meet the Peruvian Guano test on discovery.  They reveal the persistent concern of the Father, Peter and Tommy over the finance of the Uncles, the readiness to provide financial assistance, the remittance of money by the Father and the state of employment of the Uncles.  Some letters were relied on by both counsel in cross-examination.

25.  It is hard to believe that Madam Tam just happened to find those 127 pages of family letters when taking photos of the oil paintings exhibited.  It is also unbelievable that the letters disclosed in the 1^st round and the 7 letters in the 2^nd round happened to be put together out of context with the other 127 pages.  This is particularly so when on her evidence, the Deceased had, during his lifetime, handed her some family letters and explained to her that the Premises were purchased by him.  I doubt if the Deceased had classified the letters as Madam Tam did.

26.  Save for a few of them, Mr Chong had objected to the admissibility of the family letters.  He bases his objection on the principle that the acts and declarations of the parties before or at the time of the purchase, or so immediately after it as constituting a part of the transaction are admissible in evidence either for or against the party who did the act or made the declaration.  But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour : Shepherd v Cartwright [1955] AC 431; applied by the Hong Kong Court of Appeal in Siu Chun-wah, Alice and anor v. Malahon Credit Co. Ltd. [1988] 1 HKLR 196; Watson v. Smith [1998] 3 HKC 461; Overseas Trust Bank Ltd. V. Lee See Ching Hohn [1999] 3 HKC 197. 

27.  The family letters formed an incomplete record of the communication between family members.  They flowed only from Peter’s side.  They did not answer the core issues.  They did not even show that the Uncles had asked for financial assistance (except in one letter produced by Peter).  I do not read them as if they were written by lawyers.  One can see from the language used that they were written by people whose Chinese standard was, without disrespect, just sufficient to express ideas from the heart.  I have admitted all the family letters into the evidence. Ultimately, it is a question of what inference to draw and what weight to attach to them.  By far, they are most useful not in revealing any declarations in favour of or against anyone but as revealing a close relationship between the Father, the Uncles, Peter and Tommy.  They are useful to assess the credibility of each party’s case.  There will be more analyses of specific letters later on.

28.  There should be another side of the story – letters written by the Uncles to Peter, Tommy and the Father.  Given that Peter and Tommy had moved from place to place, after so many years, it is not surprising that they had lost those letters except one dated 22.11.1999 (‘the 1999 Letter”).

29.  When interpreting the family letters, more weight will be placed on Peter and Tommy’s versions as they were makers of many of those letters.  As they also maintained close contact with their Father and had exchanged information about their Uncles, they were in a better position to explain the Father’s meaning.  On the other hand, the inferences she Madam Tam drew from the family letters is not entirely reliable.  For example, she claims that Peter was unfilial because he did not return to Hong Kong to pay respect upon the death of his mother.  That has no basis as the failure to return was due to immigration problems in the USA, which evidence I accept.

I.       COMMON INTENTION OVER OWNERSHIP OF THE PREMISES

30.  It is well settled that the beneficial ownership of the property depends on the agreement of the parties ascertained at the time of acquisition : Pettitt v Pettitt [1970] AC 777, applied in Siu Chun-wah, Alice and anor v Malahon Credit Co. Ltd [1988] 1 HKLR 196.

31.  Common intention could be established by reference through conduct other than payment of purchase price or mortgage instalments on a property.  The conduct relied on must be examined against the background as to the dealings between the parties and from the circumstances of the case.  Ip Ma Shan Henry v Ching Hing Construction Co. Ltd (No. 2) [2003] 1 HKC 256.

32.  A holistic approach is to be adopted in search of the parties’ common intention and in the quantification of the beneficial interest by undertaking a survey of the whole course of dealing between the parties and taking account of all conduct which throws light on the question what shares were intended with respect to the property in the light of their whole course of conduct in relation to it : Chan Chui Mee v Mak Chi Choi [2009] 1 HKLRD 343.

A      THE DECISION TO PURCHASE THE PREMISES

33.  A family letter dated as early as 23.3.1985 from Peter to the Uncles shows that an idea to purchase a property was already formed.

A1.    The Plaintiff’s Version

34.  Peter’s case is that in about 1983, he was told by the 5^th Uncle that the Deceased’s job was terminated because his employer, Wyco Ltd (“Wyco”), went bankrupt; and the 5^th Uncle was looking at retirement.  The Uncles started to utilize their savings to pay expenses including rentals and gradually experienced financial difficulty to continuously rent the Premises.  Tommy’s version was similar save that it was through a letter in 1984 from the Uncles that he learnt of those facts.

35.  In early 1985, the Father first presented the idea of purchasing a residence for the Uncles due to growing concerns about their dwindling financial situation and advanced age.  Peter was designated to be the purchaser because he was always considered the most responsible in the family.  Both Peter and Tommy were then working. 

36.  In July 1985, shortly after the decision to purchase was made, Peter was offered admission to the medical school.  He took up the offer and resigned at the end of August 1985.  Tommy continued to work.  He had no intention of owning a property in Hong Kong but was willing to help with the purchase price.

37.  The family letters show that Peter and Tommy always enjoyed a close relationship with the Uncles.  Even the Father admitted that they loved the Uncles more than him.  As far back as 1978, shortly after the death of his mother, Peter already told his Uncles that “你們是我們現在最親的幾個, 所以我們一定是照理(顧)你們…”  Likewise, Tommy wrote, “媽媽以(已)經去了,所以你們是我（最）愛的人。所以(如果)你們需要錢和其它東西,一定要給我們知,我們會盡量幫你們的。” Peter and Tommy claim to be fulfilling this promise to the Uncles through the purchase of a property for them and payment of monthly maintenance until they passed away. 

38.  The defence challenged Peter as lying because Wyco only went into voluntary liquidation at the end of 1999 with a surplus of HK$3.8 million over liability of HK$26,597. Moreover, it was not correct for Peter to state that the Uncles started to use their savings and experienced financial difficulties because their deposits had not been reduced.  Notwithstanding knowledge of their poor financial position, it nevertheless took about 2 years until 1985 to set the decision to purchase in motion and another 2 years to complete it.  In the meantime, no attempt was made to alleviate the Uncles’ immediate needs.  The defence queried whether or not Peter and Tommy were the loving and caring persons they claim to be.  They did not return to Hong Kong upon their mother’s death, to visit their Uncles who had ailing health, or to mourn the deaths of the Uncles.  Rather, one month after the death of the Deceased, Peter gave 2 months’ notice to evict Madam Tam.

39.  The income tax returns of the Deceased produced by Madam Tam did show employment of the Deceased only up to 1984.  Madam Tam’s assertion that the Deceased remained employed thereafter remains a bare assertion.  Further, that Wyco was only wound up in the year 1999 did not preclude its being in financial difficulty in 1983/84.  Its being solvent would also not preclude it from terminating the employment of a person.  There were family letters in 1988, 1989 and 1990 showing that the Father had constantly asked if “亞六” (i.e. the Deceased) had found a job.  He even asked a friend to find a job for the Deceased in the year 1990. 

40.  I find that Peter was told that the Deceased was terminated.  Whether it was in 1983 or 1984 was not of much significance. I find that Peter did believe that the Uncles were running into financial difficulties as the 5^th Uncle had limited income.  It would not be surprising for the Uncles to resort to their savings.  It was based on what he was told and his concern for his Uncles which triggered the decision to purchase.

41.  I do not find it surprising that despite learning of the financial difficulties of the Uncles in 1983/84, the decision to purchase was only made in 1985.  This is because Peter and Tommy only graduated from university in 1983.  It was their employment since 1984 that would support the decision to purchase.  Entering medical school was not an option until about July 1985.  Peter might be financially incapable in the following 4 years but he had the backing of his Father and Tommy. 

42.  In the meantime, the Uncles were not left without recourse.  It was the evidence of Peter and Tommy that they had been sending monthly maintenance to the Uncles since 1984.  Having looked at their social security statements, I am satisfied that they had the means to do so.  Given the love and care expressed throughout the years in the family letters, I am satisfied that they had done so despite the lack of documentary proof.  There will be more analyses about monthly maintenance under sections C3 and E1.

43.  It is true that the love and care was not reflected by making visits to Hong Kong.  I am satisfied that Peter and Tommy were prevented by immigration problems from returning to Hong Kong to mourn their mother’s death, as disclosed in the family letters.  Further, Peter’s focus was on showing love and care during the lifetime of the Uncles and not after their deaths.  He only learnt of their deaths some time afterwards.  He was also preoccupied with taking care of cancer patients in the USA.  I find these to be honest reasons and did not detract from the fact that he was committed to the care of his Uncles. 

44.  As for decision to evict Madam Tam, since she had never contributed to the upbringing of Peter and Tommy, I do not see why Peter needed to provide a residence for her as he did for the Uncles. 

45.  Peter’s version is credible.

A2.     The Defendants’ Version

46.  The defence asserts that the Deceased had sufficient means to purchase with his savings and income but the then prevailing bank policy refused to grant mortgages to people of the Deceased’s age (“the bank policy”).  The Deceased allegedly approached his 2^nd brother in Hong Kong and said, “Now my negotiation regarding the purchase of the property has come to fruition.  It’s $300,000. I do not have money for that.  Can your children help out?”  It was however the 5^th Uncle’s idea to use the name of Peter whom the Deceased liked most.

47.  This piece of evidence about approaching another nephew in Hong Kong was never mentioned in any affirmation or witness statement of Madam Tam.  Even if I were to accept that the assistance sought was for a nephew to lend his name to the mortgage, Madam Tam could not explain why the Deceased wanted $300,000 when he already had over $100,000 savings.  This could be a slip of tongue which shows that the Deceased did not have sufficient money to purchase the Premises. 

48.  The issue of financial ability of the Deceased will be discussed in Section C below.  However, I am satisfied on the evidence before me that the bank policy did exist.  As at 1985, the 5^th Uncle was aged 64 and the Deceased 55.  There was prima facie reason for the Deceased to invite Peter to lend his name for a mortgage.  The defence case is credible in this respect.

A3.     Inferences to be Drawn from the Family Letters

49.  The family letters completely lacked any reference to ownership or funding of the Premises. Mr Chong relies on several family letters[1] as declarations pointing to the only reasonable conclusion that Peter and Tommy considered the purchase as that of the Deceased.

(a)      Letters before the purchase:

·Peter’s letter dated 23.3.1985 asking, “你們間屋的聲氣怎樣?如果你們交(攪)好就話比我們知”. [Note : the defence suggests that this letter should be read as “如果你們交(易)好就話比我們知”.  It does not really matter.]

·Tommy’s letter dated 29.4.1985, “你們買屋買成怎樣?”

·Tommy’s letter dated 4.8.1986, “你們幾時買間屋？幾時需要錢?”

(b)       Letters after the purchase operating against the plaintiff :

·Letter from Peter’s father dated 16.6.1987 when he asked the Uncles “您們的新屋怎樣?”

50.  Mr Chong submits that if the purchase was by Peter, the appropriate wording should have been: “我買的屋”，or “Peter 買的屋”.  It was especially so when Tommy’s letter dated 4.8.1986 was sent shortly after Peter and the Father’s return from the July 1986 visit to Hong Kong.  “新屋” must be referring to the “new ownership”.  “您們的(Your)” was contemporaneous evidence pointing to ownership by the Uncles who had direct personal knowledge of the fact.

51.  Some words are equivocal and different people could have different interpretations.  In Watson v Smith [1998] 3 HKC 461, there was a dispute between mother and daughter as to whether a half share in the property was conveyed to the daughter as a gift (as contended by the daughter) or that the mother always intended to have beneficial interest in it (as contended by the mother).  The first instance judge relied on 2 letters written by the daughter long after the transaction had been completed as evidence against the daughter.

(i)   The first letter read, “If we cannot finance the purchase and renovation of this house, can we sell our flat in Hong Kong because we can really make money on this one.”

(ii)   The second letter read, “Malcolm [i.e. boyfriend of the daughter] wants his money from the sale of our flat in Hong Kong to you [i.e. the mother].  I agree to give him another $300,000.”

Godfrey JA stated that for his part he did not think those letters bore the weight which the judge put on them.  They were at best ambiguous.  However, there was nothing the appellate court should do to interfere with the judge’s decision.

52.  I do not read the words “您們” as irrevocably pointing to ownership being in the Deceased.  Otherwise, did it mean that the 5^th Uncle was also an owner?  The query “您們的新屋怎樣？” was but a general greeting asking how the Uncles felt about living in a property that was purchased as opposed to being rented.  As Tommy testifies, he said it was going to be the Uncles’ home.  Peter was buying it but they were arranging the purchase for Peter.  The writers of the letters were not paying attention to the legal form. 

53.  Quite contrary to Mr Chong’s view, I interpret the 3 letters against the defendant.  If Peter was simply lending his name, why would he be interested in knowing when the transaction would攪好or 交易好?  Why would Tommy be interested in knowing when the Uncles needed money?  The irresistible inference is that these 2 nephews needed to come up with purchase funds and needed to know the time frame.  In fact, in a subsequent letter from the Father dated 15.12.1989, the Father asked:

“……現在您們每月開銷大概要多少？請來函通知，然後我就計劃一下，和屋尚久(欠)息(多)少亦請查一查．因爲二仔要明年底才會完成他的醫生執照(licence)。在訓練時期他的入息很少很少。不過我總盡力邦(幫)助您們的。有什麽都不怕講……”

In another letter, the Father asked,

“您的屋現在尚欠數目多少，什麽時候才可供完，得有點預算”.

Why would the Father need to mention mortgage interest, Peter’s income and budgeting except because Peter had a financial role to play?

54.  I find on a balance of probabilities that Peter’s version was more believable.

B.       IMPLEMENTATION OF THE DECISION TO PURCHASE

55.  Peter executed the 1986 Power of Attorney. The other steps to implement the decision to purchase were logically all undertaken by the Uncles.  They negotiated down the price to $300,000 which only sitting tenants may get, a price that was even lower than the landlord’s acquisition price. 

56.  It is not surprising that Peter displayed complete “lack of interest” (as described by Mr Chong) in the identity of the vendor, the amount of banking facilities sought and approved, and had never met the representative of the Bank, etc.  To him, what was most important was that the financial outlay was within his means (then and the future).  I see no reason why Peter could not trust his Uncles who had no conflict of interest with him.  In any case, I do not consider the implementation steps as useful in pointing to the identity of the true owner.

57.  The 1986 Power of Attorney, however, gave a hint of the common intention.  The undisputed evidence is that the 5^th Uncle was the donee of the power. To Peter, the Deceased was anti-social whereas the 5^th Uncle had a more outgoing personality.  Peter also said that he and Tommy were so close to the Uncles that it was as if he was 5^th Uncle’s son and Tommy was the Deceased’s son.  The 1986 Power of Attorney had a limited scope — to purchase the Premises and to take out a mortgage.  Had the Deceased been the real owner, he would have asked to be the donee with a much wider power, such as that for sale or lease.

58.  Madam Tam claims that the Deceased had to work from Monday to Saturday and could not take leave.  So he instructed the 5^th Uncle to deal with the documentation concerning the purchase.  This is hardly believable.  The negotiation for sale and purchase spanned over 2 years.  Why couldn’t the Deceased afford to take half a day’s leave to attend to legal documentation that would best protect his ownership?  I also find it surprising that when telling Madam Tam about his “true ownership” over the Premises, the Deceased would have gone into such a technical matter as to why the 1986 Power of Attorney was given to the 5^th Uncle.

59.  I find the appointment of the 5^th Uncle as the attorney was consistent with Peter being the real owner of the Premises.

C.      FINANCIAL ABILITY OF PETER AND THE DECEASED

60.  The period in the 1980’s leading up to the date of the Assignment of the Premises on 2.2.1987 is relevant.

C1.     Financial Ability of Peter to Shoulder the Down payment

61.  The income of Peter from 1981 to 1989 were as follows :

          1981           US$0 (studying for bachelor degree)

          1982           US$0 (studying for master degree)

          1983           US$0 (studying for Master degree)

          1984          US$16,380 (US$12,591 after tax; job with Du Pont)

          1985          US$21,287 (US$15,874 after tax; job with Du Pont)

          1986- 89    US$10,000 per year x 4 (student loan from medical school)

          1989-         High income under internship and as doctor

62.  Peter claims that he was able to accumulate US$10,000 from his Du Pont years and US$10,000 from his student loan of US$40,000 (for 4 years) obtained since 1987.  Together with a gift of US$5,000 from his father, he could provide for the down payment.  In examination‑in‑chief, Peter suddenly mentioned that he also had a student grant of US$7,500 per year.  He was also at liberty to ask for further loans because the medical school wanted its students to concentrate on studying and not to worry about money.  In the end, he did not ask for more.

63.  The student grant was not an entirely new invention.  His witness statement mentioned that he had earned scholarship awards which helped him to pay for school expenses and living costs although the year of the awards and amount were unclear. I will disregard this student grant/scholarship awards when considering his means.

64.  Meaningful savings would only have come from about 15 months’ earnings from June 1984 (after passing the security vetting of Du Pont) to August 1985 (before entering medical school).  From inception of the idea to purchase in early 1985 to August 1985, there was sufficient opportunity for Peter to save up. He even had a pay rise in the meantime.  Given his frugal lifestyle, saving US$10,000 was probable.

65.  The annual student loans from medical school could not have started later than 1985 or extended beyond 1989.  Peter’s witness statement stating that his student loan of US$40,000 was obtained since 1987 (as opposed to 1985) must be a clerical error.  Hence, by the start of the 2^nd academic year in 1986, he would have received a total loan of US$20,000.  He would not need to use the past savings from the Du Pont job to support his living expenses whilst in medical school.  Though he needed to pay for food, boarding, tuition fees and textbooks, his living expenses were very minimal.  Apart from doing exercise, he would be studying all day and this was well-supported by his account to his Uncles in the family letters.  Even disregarding his grant/awards and potential to raise further student loans, I find Peter’s case that he could save up another US$10,000 to be credible. 

66.  As for the Father’s gift of US$5,000, I disagree with Mr Chong that this sum was applied to the mortgage instalments.  As stated clearly in Peter’s witness statement, this sum was expended as part of the down payment.

67.  The Father had retired on 26.11.1985.  According to Peter, the Father received social security funds and retirement income from his previous employer in as much sums as when he was working.  He was financially sound and never demanded any of his children to support his abundant living even during his retirement.  I find that the Father had the means to and did give US$5,000 to Peter.  Hence, even disregarding his savings from his student loans, with his US$10,000 savings and gift from the Father, Peter could have afforded to pay the down payment.

C2.             Financial Ability of Peter to Shoulder the Mortgage Instalments

68.  Mr Chong submits that between 1985 and 2.2.1987, Peter was in medical school and was in debt (student loans and loan from Tommy).  He must have been surviving on past savings which rendered it unlikely for him to embark upon (a) an expensive and (b) long term financial commitment such as purchasing a property on the other side of the globe where he had no desire to reside in. 

69.  I respectfully differ from Mr Chong’s view.  The student loan was unlikely to be due for repayment until Peter’s graduation.  It was also unlikely that Tommy, knowing the reason behind his loan, would have demanded for payment within the 4 years of Peter’s medical studies.  Mr Chong also overlooked Peter’s earning capacity.  His qualifications are supported by documentary evidence.  Even if he could not finish his medical degree, Peter could still rely on his science degree to earn him a respectable income.  If he could finish his medical degree, his income might be (and later proved to be) much better. A commitment of about $2,800 per month for 10 years would pose no problem for him.  

70.  Peter temporarily lacked the ability to shoulder the mortgage between 1985 and the summer of 1989 without the assistance of Tommy.  However, from the summer of 1989, Peter would be clearly in a better position than his Uncles who were approaching retirement.  His taking up of the mortgage would enable the Uncles to use any savings they might have for their retirement.

71.  Tommy gave financial backup through a loan of US$7,500 to cover the first 2 years’ mortgage instalments.  His social security statement disclosed a respectable income as an engineer of over US$20,000 from 1984 to 1985; and over US$30,000 from 1986 to 1989.  He described his saving pattern and how he increased his savings to cater for the purchase of the Premises.  After the first 2 years, he continued to send monthly sums of US$200 to the Uncles.  Hearing the Father’s worry that the US$7,500 would be running short, Tommy increased the monthly sums to US$300 per month. 

72.  I find Peter and Tommy’s versions to be credible. 

C3.      Financial Ability of the Deceased to Shoulder the Down payment

73.  There is undisputable documentary evidence that over a continuous 10 years since 1975, the Deceased had accumulated savings of HK$100,000 by 1985; and he had joint savings with the 5^th Uncle in the sum of HK$30,000.  These indicate the ability to shoulder the down payment. 

74.   However, as shown below in section C4, I am not satisfied that the Deceased had stable employment beyond 1984 or that he had another source of income.  If so, these deposits would have been depleted by the time the down payment had to be paid. 

C4.      Financial Ability of the Deceased to Shoulder the Mortgage instalments

75.  There is no dispute that the mortgage instalment was more or less of the same amount as the rent.  The relevant questions are: viewed in 1985 to 1987 (i) would the Deceased have a sufficiently long working life to meet the 10 year mortgage?  (ii) What was there to provide for the Uncle’s retirement fund if the deposits and income were consumed by the purchase price of the Premises?

76.  As the evidence shows, the Deceased had ceased employment in 1984 and did not resume stable employment.  How could he shoulder the mortgage?  Even if I am wrong and he had continued working with Wyco, what was his expected retirement age? In view of the bank policy and age of the Deceased, why wait for 2 years of working life to lapse before taking out the mortgage in 1987?  Why fly in Peter when a nephew in Hong Kong might be able to help?  After all it was just lending of name for the mortgage without the need for actual financial contribution. Tommy would also be the better choice with better income proof to satisfy the bank.  During the term of the mortgage, at least the 5^th Uncle would retire, he being 9 years older than the Deceased.  According to Madam Tam, the 5^th Uncle was in fragile health.  He did not receive good education.  He did not earn much income.  How much retirement pension he received was his private business.  If so, would not the Deceased also make provision for him and how?  After the down payment, about $30,000 deposit would be left.  There might be a retirement pension for each of the Uncles but how much?  How long could the deposit and pension last?  There is no credible evidence to show that the Deceased could shoulder the full term of the mortgage whilst leaving sufficient funds for retirement use.

77.  If I am wrong in posing the questions in paragraph 75, I have considered the evidence which purports to show that the Uncles retired much later than 1983/84 and that the Deceased had another source of income. 

C4(1)      When the 5^th Uncle Retired

78.  The 5^th Uncle should have retired at the end of 1988 to early 1990.  This is deduced from the following letters :

(i)      From the Father dated 15 December which said “[I ]know you will be retiring at the end of the year.”  Based on the remark in the letter that Peter will be completing his doctor’s licence at the end of the following year, it was deduced that the year of this letter should be 1988 or 1989.

(ii)     From Peter dated 23 January which said, “I still have half a year to go before graduation.  … I know the 5^th Uncle has retired.”  As Peter graduated in mid-1989, the 5^th Uncle would have retired at the end of 1988/early 1989.

(iii)    From the Father on 17.12.1990 wherein he asked whether the 5^th Uncle was at risk of losing his job should ownership of Dai Cheong (his employer) change hands.

79.  There appeared to be a difference of 1-2 years here.  I do not think it really matters.  On the defence’s case, the 5^th Uncle was never regarded as having contributed in any way towards the purchase or the household expenses.  I draw an inference most favourable to the defence – that the 5^th Uncle retired in 1990.

C4(2)    When the Deceased Retired

80.  There were different versions:

(a)   Peter’s:  retired in about March 1983 with no regular or significant income thereafter. The employer’s return filed up to March 1984 contradicted him.  He clarified in his oral evidence that the year of retirement could easily be 1984.

(b)   Tommy’s: in his oral evidence (unsupported by his witness statement and affirmation) he stated that the Deceased had, in a letter in 1984 to him, informed him about losing his job.

(c)   The Father’s: in 1988, 89 and 90 he expressed concern as to whether the Deceased had found a job.  On 17.12.1990, the Father wrote to the Uncles enquiring whether or not there would be risk of losing his job should the ownership of Dai Cheong (the 5^th Uncle’s employer) changed hands.  Mr Chong suggests that the letter in 1988/1989 relating to “know you will retire at the end of the year” could only be directed at the Deceased.  The Deceased was still in employment at least until the end of 1989.

(d)   Madam Tam’s: her 4^th affirmation stated that the Deceased retired in 1989.  Her witness statement stated that both Uncles retired between 1990 and 1993.  When asked as to which version she was willing to stick to in the witness box, she was unwilling to commit herself.  She is unreliable.

81.  Taking these versions together, the most probable scenario is that the Deceased lost his job with Wyco in 1984.  He might have worked thereafter until 1989 but the identity of the employer and income level were unclear.  From 1983-1985, his deposit had remained at or about $100,000.  After 15.1.1985 there was no more documentary evidence showing that the Deceased still had any fixed deposit.  This situation was consistent with the termination of employment with Wyco in around 1983/84. 

C4(3)    Another source of income of the Deceased

82.  Madam Tam claims that the Deceased had another source of income from selling paintings.  It brought in about HK$5,000 to $10,000 per month.  The Deceased allegedly stopped painting in 1997 because after the handover, many commercial paintings flooded from Mainland China and the Deceased could no longer sell for profit.

83.  I accept that the Deceased was engaged in selling paintings.  This is borne out by the evidence of Madam Ng that back in the 1990s, the Deceased was already painting and she even wanted her son to learn from him.  In addition, the photos showed that the paintings were not yet mounted onto frames; some were identical with slight variations.  Without disrespect, the paintings were not of very high standard. They could not be collector items of the Deceased but clearly for the purpose of commercial disposal.  It was unlikely that the paintings belonged to the 5^th Uncle whose interest was in Chinese artefacts, antiques and painting. The fact that Robert and other family members were only aware of the interest of the Deceased in music but not painting was not surprising, given what Peter described to be the anti-social character of the Deceased.  The Deceased might have picked up the art at a time unknown to his nephews. 

84.  The more difficult question was the income from selling paintings.  The alleged income was up to about 1.5 to 3 times of the Deceased’s latest monthly average income of HK$3,352 in 1984.  There was not a shred of documentary proof.  There was complete silence over this business or even interest in oil painting in the family letters notwithstanding the constant concern of the Father over the Uncles’ financial condition, and his express mention that his new wife could do well in oil painting. 

85.  Obviously the income from oil painting was unstable because at one stage in 1995 the Deceased suggested renting out one room to reduce the financial pressure.  The objective evidence, however, was that between 1975 and 1985, the deposits increased from HK$10,000 to HK$100,000, representing an average of about HK$937 per month.  The continuous accumulation of savings of the Deceased might be due to income from employment, oil painting, interests, money from the Father, monthly sums from Peter and Tommy or even some contribution from the 5^th Uncle.  I am unable to infer the level of income from oil painting.

D.      WHO PAID THE DOWN PAYMENT?

86.  The down payment was about HK$100,000.  Peter said he wrote out a cheque for US$15,000 to the 5^th Uncle.  Madam Tam did not state how the Deceased paid.  Although each party has a credible version on ability to pay, there is no documentary proof as to who actually paid the down payment.  Even if I reject Peter’s version, Madam Tam still fails to discharge the burden of proof.

E.       WHO PAID THE MORTGAGE INSTALMENTS?

87.  The central issue was the identity of the true purchaser.  Once that is decided, I agree with Mr Chong that the identity of who repaid the mortgage was irrelevant.  The rights and liabilities of the parties would be crystallized at the time of the purchase and not thereafter :  Siu Chun Wah Alice & another v Malahon Credit Co. Ltd [1988] 1 HKLR 196.

88.  Mr Chong is also correct that it was no part of Peter’s case that by virtue of his contribution to the mortgage repayment, he acquired proprietary interest in the Premises. 

89.  Evidence of who paid for the mortgage may help to decide who might have been the owner. 

E1.      Peter’s Case

90.  Peter’s case is that he had written out a cheque to the 5^th Uncle for the first 2 years’ repayment representing the loan of US$7,500 from Tommy.   

91.  In addition, he had been sending US$100 to US$200 per month to the Uncles primarily for repayment of mortgage and living expenses as early as 1984 until they died.  (The mortgage did not start until 1987 so this could only mean that the monthly sum before and after the mortgage period was for living expense.)  From 1987-1993, he had been paying US$100-US$200 per month to the 5^th Uncle for repayment of the mortgage.  Given that Peter lived frugally and could save up from the first 2 years’ student loan, I accept that he had the ability to come up with the alleged monthly sums.  After graduating from medical school, he definitely had the means to pay the mortgage instalments. 

92.  Tommy has been sending US$200 per month to the Uncles after the first 2 years of the mortgage and US$300 per month since 1989.  Since he was able to save up US$7,500 in about 2 years (on average US$312.30 per month), continuing to pay US$300 per month was within his means.  His monthly payments would have supplemented any shortfall between each mortgage instalment and Peter’s monthly payment.

93.  For the defence case, Mr Chong submits that the Father’s letter dated 16.6.1987 suggested that the financial burden arising from the acquisition of the Premises fell upon the shoulders of the Uncles :

“……您們的新屋怎樣？亞六找到新工作未有？如因須(需)邦(幫)忙的話，最(重)要通知我們……”[2]

94.  I do not think this letter points either way.  If the Premises were owned by Peter, the Deceased could still need financial assistance.  If the Premises were owned by the Deceased, the Father’s concern would not just be limited to the question of mortgage but the Deceased’s finance generally. 

95.  Mr Chong submits that none of the family letters ever hinted that monthly maintenance had been given to the Uncles nor that the Uncles asked for financial help.  The only exception was in the 1999 letter when the 5^th Uncle was critically ill and the Deceased asked Peter and Tommy to send in US$10,000 or US$1,200 per month.  If there had been regular monthly maintenance, it was difficult to imagine why Peter and the Father had to ask the Uncles if they needed financial assistance:

Letters from the Father

(a)   16.6.1987 : “……如因須(需)要邦(幫)忙的話，最要通知我們……”

(b)   10.8.1987 :  “……還有您們的經濟情形如何？……”

(c)   30.5.1988 : “……如果您們有什麽須(需)要的，就通知我……”

(d)   15.12.1989 : “……現在您們每月開銷大概要多少？請來函通知，然後我就計劃一下，和屋尚久(欠)息(多)少亦請查一查．因爲二仔要明年底才會完成他的醫生執照(licence)。在訓練時期他的入息很少很少。不過我總盡力邦(幫)助您們的。有什麽都不怕講……”

(e)   23.01.1990 : “……現在寄五佰元給您們訴年利事……(錢是孩子們給您的)……”

(f)   27.5.1990 : “……您的屋現在尚欠數目多少，什麽時候才可供完，得有點預算……”

Letter from Peter

(g)   15.7.1978 : “……如果您們要錢的話，可以話比我知……”

96.  I disregard Peter’s letter dated 1978 because monthly maintenance had not started yet.  However, the above letters show a constant concern from the Father as to how the Uncles were going.  Only he had the habit of stating the purpose of sending money to the Uncles and the amount.  There is evidence that Peter and Tommy had regularly sent money to the Deceased and Madam Tam in 2001-2003 but without an accompanying letter.  I can hardly see why they had adopted a different practice for the monthly maintenance before 2001.

97.  As Tommy explained, the 1999 letter was very telling.  It demonstrated that the Deceased felt close enough to Peter and Tommy that they would ask for more money for emergency reasons.  That did not mean that before 1999 they had not been sending monthly maintenance.

98.  Peter case is credible.

E2.      Defence Case

99.  The instalment loan credit advice (“the Credit Advice” and similar documents will be called “the credit advices”) showed that in December 1992 a sum of about $2,800 was debited from “account no. 021-307-105056362” (“the Bank Account”) of the Wing On Bank Limited to meet a mortgage instalment.  Peter does not claim to be holder of the Bank Account.  Madam Tam claims that the Deceased was the holder of the Bank Account.  The other possible candidate was the 5^th Uncle to whom Peter sent the money for down payment and monthly sums.

100.  The issue are: who the holder of the Bank Account was and the source of deposits into the Bank Account.

101.  Madam Tam says that when attending to the Deceased’s affairs, she could see that the Bank Account number was in the Deceased’s name.  In cross‑examination, she admitted that she could not remember the Bank Account number but there was a passbook of the Wing On Bank Limited with the Deceased’s name on it.  Her evidence is not sufficient to establish the identity of the Bank Account holder.

102.  The other piece of supporting evidence of the Bank Account holder came from Mr Chow.  He claims that on a day in 2000 after the death of the 5^th Uncle, the Deceased told him to tear up the passbook of the Deceased with the Bank and the credit advices since the mortgage had been fully repaid.  Mr Chow counted some 60-70 entries of deductions from the passbook which the Deceased told him were for mortgage instalments.  Mr Chow also tore some interest tax deduction certificates but he could not recall how many.  (This incident will be referred to below as “the tearing up exercise”.)

103.  In his oral testimony Mr Chow claimed that it was the credit advices (not the entries in the passbook) that he counted and found there to be 60-70 sheets. He said he was interested to know about the cost of the Premises.  His conclusion was that it cost about “several hundred thousand”.  He also mentioned that during the tearing up exercise, he went to the kitchen to fetch a pair of scissors so as to cut up the passbook.  Having learnt of that, Madam Tam went to see the documents.  Since she had never taken out a mortgage in her life, she took the Credit Advice for the purpose of keepsake. 

104.  There are lots of puzzling areas in Mr Chow’s evidence :

(a)   The Deceased had only come across Mr Chow for about half a year.  It was very surprising that he would have allowed Mr Chow to go into details of his financial affairs.  (The passbook allegedly contained entries not only of the mortgage instalments but also substantial deposits of several ten thousands.)

(b)   Mr Chow’s witness statement stated that he counted the entries of the bank passbook.  In his oral testimony, it was the credit advices that he counted.  This was inconsistent. The witness statement never mentioned any credit advices.

(c)   The reason for counting the credit advices was illogical.  Mr Chow said he went through the documents just to make sure he had not torn up any useful documents. However, documents in each category looked the same so it was not necessary to examine each of them.  If what he wanted to know was the cost of the Premises, he could have asked the Deceased directly.  He said he felt embarrassed to do so.  Why would he not feel embarrassed to count the Deceased’s financial documents but felt embarrassed to ask directly of the Deceased?  The Deceased had readily told him the use of the deposits already.

(d)   Counting 70 credit advices at a monthly repayment of $2,800 would only give about $200,000 and not “several hundred thousand” as he claimed.

(e)   Why didn’t he read or count the interest tax deduction certificates to ensure that he had not torn up useful documents?

105.  Most remarkable was that his evidence was contradicted by Madam Tam.  According to her 4^th affirmation filed in November 2009 in opposition to the originating summons, Madam Tam stated that “My husband had handed to me 70 odd pieces of Instalment Loan Credit Advice … I had destroyed all of them except one.”  She never mentioned the involvement of Mr Chow or the destruction of other documents.  It was only in her supplemental witness statement that she said her son was the one who tore up the passbook. 

106.  There was also no mention of the incident of fetching a pair of scissors and the presence of Madam Tam at some stage of the tearing up exercise in the witness statements of either Madam Tam or Mr Chow.  Mr Chow said he had left it out because he did not think it was important.

107.  The whole purpose of the evidence in this respect was to correlate the Bank Account number to the passbook in the name of the Deceased to show that it was the Deceased who repaid the mortgage.  The inconsistencies in the evidence of Madam Tam and Mr Chow expose their unreliability as witnesses.  I am not satisfied that the Deceased was the holder of the Bank Account or that the tearing up exercise had occurred or that it was how Madam Tam came into possession of the Credit Advice. The knowledge of there being about 60-70 instalments paid was simply obtained from reading the Credit Advice and not from counting anything.

E3.      The Accelerated Payment

108.  Who made the accelerated payment in February 1993 to redeem the mortgage and hence save interest? 

109.  Peter claims that he did it with a loan of US$10,000 from Tommy and his own savings totalling US$12,000.  Tommy had stable income since 1984.  He had the ability to lend the sum.  By then, Peter was working as a clinical director of radiation oncology with a very substantial starting salary.  He got an offer for a doctor’s post in late 1992, the formal contract for which was to start in 1993.  No doubt he would have the means to repay Tommy. 

110.  Madam Tam, on the other hand, says the Deceased used his savings of about $100,000 to pay off the mortgage.  How was the Deceased able to save up $100,000 from 1987 to 1993 when both Uncles had retired in the meantime?  If, as found above, the Deceased had retired in about 1989, why did he not redeem in that year to save interest? How would he meet his retirement if these savings were used up and his income from oil painting was unstable?

111.  I find Peter’s case to be more credible.

E4.      Discharging the Burden of Proof

112.  It is not sufficient to proof an ability to bear the mortgage instalments.  Nor is it sufficient to show that the claimant of beneficial interest actually deposited money into the mortgage account.  The source of funds for such payments must be proved and there must be contemporaneous documents.  In Chan Chui Mee v Mak Chi Choi [2009] 1 HKLRD 343, the property was registered in the sole name of the 1^st defendant, the plaintiff’s ex-husband.  The plaintiff alleged that she paid the initial deposit and all the mortgage payments although she expected the 1^st defendant would pay.  Since she had jobs, she had the ability to meet the mortgage payments as well.  The learned judge commented on her evidence in this way :

“ The plaintiff said she undertook several odd jobs during that time. However, she did not produce any documents to support her income. Nor did she produce any documents to show money was withdrawn from her bank accounts to pay the mortgage payments. This court had explained to her the importance of producing contemporaneous documents to support her case at the pre-trial review on 9 January 2008. In particular, this court explained why the production of pay-in slips might not be sufficient. Despite the direction from this court, up to the beginning of the trial the plaintiff only produced the pay-in slips showing money paid into the account of the 1^st defendant to support her case. There is no documentary evidence to show the source of funds for such payments.

It was only on the last day of trial the [son of the plaintiff] produced passbook records of the Hang Seng Bank account of the plaintiff to support the [son’s] case that he had issued cheques paid into the plaintiff’s account for mortgage payments. However, the passbook records do not tally completely with the [son’s] claim. …

More importantly, the passbook records do not tally with the mortgage payment records as evidenced by the pay-in slips. …”

113.  It can be seen that the plaintiff in Chan Chui Mee’s case has produced more than Madam Tam in showing deposits into the bank account.  The learned judge still considered that it was insufficient.  In the present case, there was neither contemporaneous document to show the Deceased’s income from Wyco or selling oil paintings during the term of the mortgage, nor to correlate his own resources to the payment of the down payment and mortgage instalments.  

114.  I am not satisfied on the balance of probabilities that Madam Tam had discharged the burden of proving this issue.

F.                POSSESSION OF TITLE DEEDS SINCE REDEMPTION OF THE MORTGAGE

115.  There is no dispute that the Uncles did ask for and obtained from Peter a power of attorney (‘the 1993 Power of Attorney”) and retrieved the title deeds from the Bank. Mr Chong submits that Peter was complying with the requirement of the Uncles instead of himself in initiating the collection of the title deeds and executing the 1993 Power of Attorney.  Then for 14 years up to the death of the Deceased, the title deeds had indisputably been in the uninterrupted possession of one or both of the Uncles.  There was no evidence of either of the Uncles’ attempt to return them to Peter or Peter’s request for their return during the lifetime of the Deceased.  Being honest gentlemen, the Uncles’ conduct was inexplicable, so the submission goes, and would only be consistent with the fact that the title deeds were in the hands of the real owner with Peter thinking likewise.  The title deeds are now in the hands of Madam Tam.

116.  Peter explained that the 1993 Power of Attorney was given to the 5^th Uncle to take possession of the title deeds for him.  He never asked for return of the title deeds for 2 reasons :

(a)   He did not truly understand the importance of the title deeds;

(b)   He had complete trust in his Uncles.

117.  I do not consider Peter as complying with the instructions of the Uncles in retrieving the title deeds. Upon discharge of the mortgage, the Bank would naturally want to return the title deeds to the title holder and the Uncles would relay the Bank’s message to Peter. Who initiated the return was irrelevant.  

118.  Peter had never bought another property in Hong Kong.  He was not familiar with the Hong Kong law.  According to him, in the USA, it was the registration of title that was important.  The piece of paper showing title was not.  I find that he did operate under that understanding and hence had not asked for the return of the title deeds. More importantly, as the Uncles were to have a licence to live in the Premises for life, what was the importance and hurry in getting back the title deeds?

119.  Mr Chong refers to the case of Warren v Guerney [1944] 2 All ER 472 for the proposition that the title deeds were sinews of land.  In that case a father purchased a property for her daughter but had retained the title deeds until his death.  In deciding whether or not the executors of the father had rebutted the presumption of advancement, the English Court of Appeal was of the view that there was ample evidence to justify that conclusion of the judge.  The Court of Appeal was of the view, amongst others, that the father’s retention of the title deeds from the time of purchase to the time of his death was a very significant fact because the title deeds were “sinews of the land”.  The English Court of Appeal did not state, however, that possession of title deeds was conclusive in the determination of a person’s property rights.  In Warren v Guerney, the Court relied not only on the possession of title deeds to decide its case but also the fact that the father had paid for the full price and that there was contemporaneous declarations by the alleged donor as to his interest.

120.  I am not satisfied that mere possession of title deeds would of itself be an act showing true ownership of the Deceased.  In the present case, it was consistent with the gratuitous licence to occupy and the Uncles were holding the title deeds as bailees for Peter.

G.      GENERAL CREDIBILITY OF PETER AND MADAM TAM

121.  If Peter were not the real owner and had never paid any part of the purchase price, why not leave the Premises to Madam Tam who had been married to the Deceased for 7 years and had been looking after the 2 Uncles?  Does Peter have a motive to lie?  Mr Chong suggests that greed motivated him to litigate, the Premises having grown in value to over HK$6 million. 

122.  Peter left Hong Kong at the age of about 14.  He has lived in the States for 4 decades. He has his own property in the USA and a remunerative and reputable job.  Why would he put those at stake by perjury?  Even if Peter were greedy, that cannot explain why Tommy needed to lie.  Tommy does not even claim a share in the Premises because of his financial assistance to Peter.  Still less does Robert have the motive to lie, he being admittedly not in a close relationship with his 2 half-brothers. I am not satisfied that Peter was motivated by greed or that any of these 3 brothers had lied.  Overall I find them to be honest witnesses even though there was lack of contemporaneous documents for a material period.  Their versions are consistent with the tone and contents of the family letters.

123.  Madam Tam had cohabited and been married to the Deceased for 13 years.  She does not appear to have the security of another property.  She expended money on the Premises and had always regarded it as her home.  At her age, she certainly needed the security of a roof over her head for the rest of her life.  She does have the motive of not stating the whole truth to salvage her interest in the Premises. 

124.  Madam Tam has purported to set out her case in 3 pre-action letters, In the first letter dated 30 July 2007 to Peter and Tommy, she expressed refusal to move out because she was not in a tenant relationship with them.  She asserted that they had seriously told her and the Deceased, “The Premises were yours.  You could live on in it.” She did not assert that the Premises were owned by the Deceased.  The tone suggested that she thought she was just permitted to live there.

125.  In the 2^nd letter dated 10 August 2007, Madam Tam wrote to Peter stating, amongst others, that the Premises were bought with the lifetime earnings of the Deceased, authorizing the use of Peter’s name.

“It was completed under an agreement to let us live till the end of our lives, under a promise that you will take care of us in our old lives. This is a trust in you, you along did so. Today, regardless of everything, you hope to use superficial evidence in order to swallow the estate of the 6^th Uncle.” (emphases added)

If the Premises were bought by the Deceased, why would Peter need to enter into the agreement or give the promise referred to in this letter?  This was an attempt to get the best of both worlds – ownership of the Premises and lifelong financial provision from the nephews.

126.  Finally in her letter dated 11 August 2007, Madam Tam reminded Peter that the Deceased had kept his promise to Peter.  Although he used Peter’s name and took out a mortgage to purchase a property, he had never required Peter to bear any expenses.  The Premises simply had nothing to do with Peter.  Therefore, not only had Peter not paid the mortgage, but he had not also borne the renovation costs and outgoings.

127.  These 3 letters gradually built up Madam Tam’s case on ownership.  However, what is telling is her oral evidence.  She said that she and the Deceased did not have children. Her intention was to reside there till she died and the Premises “would be given to them”.  She asked what she needed the Premises for.  She had no intention to snatch somebody’s property. 

128.  Madam Tam does have a son from her previous marriage.  When she died, the Premises should go to her estate.  Mr Chong submits that Madam Tam was talking about traditional succession law so that when the Deceased and Madam Tam died, the Premises would revert to the Deceased’s line.  If he is correct, to whom would the Premises be given?  Why to Peter (and/or) Tommy but not other nieces and nephews?

129.  In my view, the true meaning of this piece of evidence is that Madam Tam truly thought that she only had a life interest and the Premises would be returned to the true owner.  She was clearly mistaken because Peter and Tommy had never intended to make provisions for her as for the Deceased who had taken care of them. 

130.  Overall, I find the version of Peter and his brothers to be more credible.

H.     FINDINGS ON COMMON INTENTION OF THE PARITES OVER OWNERSHIP OF THE PREMISES

131.  In 1983/84, the 5^th Uncle told Peter and Tommy that the  Deceased’s employment was terminated because Wyco went bankrupt and the 5^th Uncle was expecting retirement. The Father decided in about 1985 that Peter should purchase the Premises for the Uncles.  The common intention of Peter and the Deceased was for Peter to be the real owner and to bear all costs of the purchase.  At that time, Peter and Tommy had already graduated and were in employment.

132.  Shortly after this decision was made, Peter received notice of admission to the medical school for the year 1985.  He quitted his job by the end of August 1985 and studied medicine for 4 years. 

133.  The decision to purchase took about 2 years to mature.  In July 1986, Peter and his Father came to Hong Kong for the purpose of executing the 1986 Power of Attorney authorizing the 5^th Uncle to purchase the Premises and to take out a mortgage.  In the meantime, the Uncles negotiated as sitting tenants with the landlord and successfully agreed on a purchase price of $300,000.  The Assignment was executed on 2.2.1987.  The mortgage in the name of Peter was for $200,000 repayable over 10 years.  The monthly repayment was about $2,000 odd, similar to the rent the Uncles were previously paying.

134.  Peter had the ability to and did pay the down payment and mortgage instalments.  Tommy had the ability to and did assist Peter.  Peter sent his own savings from past earnings and student loans totalling about US$10,000 and a gift of US$5,000 from the Father to the 5^th Uncle to pay for the down payment of $100,000.  He borrowed US$7,500 from Tommy to cover the first 2 years’ mortgage repayment. In addition, Peter had been sending US$100 to US$200 to the Uncles per month.  Tommy has also been sending the Uncles US$200 per month.  He increased it to US$300 when his income increased and when the Father expressed concern when the US$7,500 was running short.

135.  After his graduation from medical school, Peter secured a highly remunerative job.  He borrowed US$10,000 from Tommy.  Together with his own savings of US$2,000, he made an accelerated payment to pay off the mortgage.  All loans to Tommy had been repaid.

136.  The Deceased had savings of HK$100,000 and joint savings with the 5^th Uncle of HK$30,000.  Theoretically, he could afford the down payment.  The monthly mortgage was more or less the same as the rent and theoretically he could also afford to pay it.  The bank policy existed and the Deceased would not be able to take out a mortgage in his own name had he needed to. 

137.  The 5^th Uncle retired in about 1990.  The Deceased was employed by Wyco until 1984; he might have other jobs until 1989 but the identity of the employer and income level was unclear.  He had alternate income from oil painting but the level of income was unclear.  Applying all his deposits and income to purchase the Premises would consume all his funds and left him with virtually no means to meet his and the 5^th Uncle’s retirement life.  It was thus improbable that he would be able to afford the purchase or meet a 10 year mortgage.  Madam Tam claims that the Deceased paid the accelerated payment.  Again, the source of such payment was not proven.

138.  There was no tearing up exercise as claimed by Madam Tam and Mr Chow.  Accordingly, there was nothing to associate the Deceased with the Bank Account from which the mortgage repayments were made.

139.  I find Peter’s case to be credible despite the lack of crucial banking documents.  The Uncles were in occupation as licensees of Peter.  Even if I do not believe him, I am not satisfied that Madam Tam has discharged the burden of proving that it was the Deceased who funded the purchase of the Premises. There was no contemporaneous documentary evidence to prove the means of the Deceased or to correlate the payment of purchase monies with the Deceased’s own resources. The claim of Madam Tam as an executrix based on resulting trust fails.

II.      Adverse Possession

140.  Madam Tam relies on the following facts to establish her claim in adverse possession :

(i)   1994 : her entry into occupation of the Premises;

(ii)   2000 : delivery of title deeds by the Deceased to her; and

(iii)   2003 : the Deceased’s demand for transfer of ownership from Peter.

I.      1994 : Madam Tam’s Entry into Occupation of the Premises

141.  Madam Tam’s evidence was that she had known the Deceased since 1958 and they had been in correspondence.  Correspondence between them ceased in 1964 but resumed in 1987 when they entered into closer acquaintance.  She arrived in Hong Kong in April 1994.  Upon learning of her quarrel with her family, the Deceased invited Madam Tam to reside at the Premises.  When Madam Tam asked if his family member (meaning the 5^th Uncle) would object, the Deceased stated that no one could object as the Premises were purchased with his own money.  Madam Tam then moved in and cohabited with the Deceased since December 1994, until they got married in 2000.  If accepted, this piece of evidence tends to show that the Deceased had exercised a right of ownership over the Premises inconsistent with the right of Peter and that the time for the purposes of sections 7 and 17 of the Limitation Ordinance had started to run from the end of 1994.

142.  After so many years, one cannot expect Madam Tam to have any document to show her residence at the Premises in the 1990s or early 2000s.  Four witness gave evidence to the effect that Madam Tam had resided at the Premises since 1994/1995 :

(i)   Madam Ng Hung met Madam Tam on the street in the Chinese New Year of 1995. Madam Tam introduced the Deceased as her husband stating this was her second marriage.  Madam Ng often went to the Premises and saw Madam Tam, the Deceased and the 5^th Uncle there. 

(ii)   Mr Wong testified that when he visited Madam Tam’s mother at the end of 1994, she told him that Madam Tam had moved into the Premises.  He later met Madam Tam who confirmed she had so moved.  He had been to the Premises to help out on odd jobs since 1995 but most of his visits were post-2000.  He saw the Uncles inside the Premises but rarely talked to them.  Mr Wong’s witness statement did not mention the relationship between Madam Tam and the Deceased but his oral testimony was that Madam Tam had introduced the Deceased as her boyfriend. 

(iii)   Mr Chow and Ms Chow testified that they had visited Madam Tam in the Chinese New Year of 1995 and resided at the Premises.  The photo exhibited of Ms Chow, however, provided no support.  Ms Chow was in outdoor gear showing her and the 5^th Uncle in the Premises.  That picture could have been taken when she was stopping by to visit the Premises.  I place no weight on their evidence in this respect.

143.  Both Madam Ng and Mr Wong do not appear to have any interest in this suit and have no reason to lie.  Madam Ng who had returned to reside in Shanghai specially returned to Hong Kong to give evidence in this case.  She gave evidence in a direct way that bespoke of a female “kaifong” regularly having chitchats with a friend.  She gave clear explanations as to time frames.  Mr Wong was also a straightforward and honest witness.  I am satisfied from the evidence of these 2 witnesses that Madam Tam had resided in the Premises since about 1995. 

144.  However, in what capacity did Madam Tam reside there?  It is of interest to note that those 2 independent witnesses gave different descriptions of the Deceased’s relationship to Madam Tam — “husband” (married for a second time) and “boyfriend”.  The former was a lie.  Madam Ng often told Madam Tam that “it did not look good” to cohabit with the Deceased and asked Madam Tam to get married.  Sharing her own experience, Madam Ng told Madam Tam that without a registered marriage, problems could arise when probate/letters of administration needed to be applied for.  To that, Madam Tam replied that if the Deceased did not propose how could she register a marriage? 

145.  In considering credibility and the proper inferences to draw,  I have taken into account the following matters :

(i)   No defence witness could testify as to signs of cohabitation (e.g. joint occupation of a room or a double bed).  Rather, Robert testified that such signs were absent.  (He usually paid respect to his grand parents’ memorial which was placed at the back of the premises.  To do so he had to walk past all the rooms of the Premises.  The premises were fairly small and he had a clear view of all the rooms of the Premises in his visits.) Whilst Madam Tam cared to exhibit photos of her family visiting Hong Kong, there was not a single photo showing her own presence inside the Premises in any year. 

(ii)   It was within only a few months of her arrival in Hong Kong that Madam Tam, for what seemed to be a quarrel over a small matter, decided to enter into cohabitation. 

(iii)   Her different declarations to Madam Ng and Mr Wong about the Deceased’s being her husband and boyfriend respectively showed her own uncertainty as to her relationship with the Deceased.

(iv)   She had the nerve to enter into cohabitation for years and yet none to suggest marrying despite the repeated advice of Madam Ng.

(v)   he could not explain what prompted the marriage after 6 years of cohabitation. 

(vi)   The marriage certificate stated her pre-marriage address to be her mother’s place.  Madam Tam explained that in accordance with Chinese custom, the bride and groom should not be residing at the same place before marriage.

(vii)   The death certificate of the 5^th Uncle shows that Madam Tam, being the informant, was described as his cousin.

I am not satisfied that Madam Tam had been cohabiting with the Deceased.  It was possible for her to be present as a mere occupant since there are 3 rooms in the Premises.

146.  There is some hint in Robert’s evidence that Madam Tam might have resided at the Premises as a health carer for the 5^th Uncle.  During a visit in 1999 he saw a lady taking care of the 5^th Uncle at the health care clinic.  He saw the lady again at the Premises in 2002 whom the Deceased introduced as a health care worker.  On each occasion he gave her $100 as tips.  He had not visited Hong Kong after 2002.  He could not associate the lady with Madam Tam until seeing her in Court.

147.  I am satisfied on the evidence that Madam Tam was an accounts supervisor earning a much higher salary than a health care worker.  However, I find Robert to have accurately and honestly reported what had happened.  I find that he did not deliberately conceal the identity of Madam Tam because he only saw her twice before the trial and for 5 minutes on each occasion.  I find that he was genuinely mistaken as to the role of Madam Tam.  That was not surprising because the undisputed evidence was that the family members in the USA including Robert did not know about the marriage of the Deceased and Madam Tam until about 2002/2003.  I am not surprised that Madam Tam was never introduced to Robert as the Deceased’s cohabite or the 6^th Aunt during the lifetime of the Deceased.  Madam Tam’s witness statement was completely silent as to any visit by Robert.  Given this low profile which the Deceased and Madam Tam kept as to their relationship or marriage, it would not be surprising that Robert could not detect Madam Tam’s occupation in the Premises or her role as a cohabitee. 

148.  The late disclosure of the marriage was most incomprehensible given the close relationship between the Deceased and his family members in the USA.  The Father had remarried in 1990 and informed the Uncles in one of the family letters.  There was no reason why the Deceased would not similarly disclose this important event in his life to his family members earlier. 

149.  Whilst satisfied that Madam Tam had resided at the Premises since about the end of 1994/early 1995, I am not satisfied that her relationship with the Deceased was one of cohabitants before the marriage in 2000.  The Deceased had a licence to occupy the Premises for life; so during that licence period, he could permit anyone to occupy the Premises. I do not think he was purportedly exercising the right of an owner.  Peter, learning of Madam Tam’s presence in 2002/3, did not evict her.  I find that she was there through the licence of the Deceased and, later, Peter.

150.  If I am wrong and that Madam Tam had resided at the Premises in the capacity of cohabitee, I am still not satisfied that she (or even the Deceased) had since the necessary intention sufficient to establish adverse possession.  In Wong Tak Yue v. Kung Kwok Wai [1998] 1 HKLRD 241, the Court of Final Appeal held that a person claiming to be in adverse possession must be shown to have both possession and the requisite intention to possess.  It was the intention of the squatter that was essential.  The burden was on him to establish his intention to exclude the whole world: including the owner of the land.  Where the occupier had made self-serving statements as to what was his intention, whether during the period of occupation or when challenged in legal proceedings, the court should approach them with some scepticism.  The courts would scrutinize the circumstances in which they were made and would give them such weight if any as they might deserve.  Conversely, where the occupier had made statements as to what was his intention and such statements were against his interest, the court should usually accord to them considerable weight.

151.  In her pleaded case (see her particulars by letter), Madam Tam’s occupation was always “with the 5^th Uncle and the Deceased” to the exclusion of the registered owner.  She could not have the intention to oust the Deceased who had a licence and invited her to reside there. When asked who she thought allowed the 5^th Uncle to live there, Madam Tam said that it was not a question of allowing or not.  The 5^th Uncle and the Deceased were brothers and not married.  They lived with Peter’s mother and a maid.  After the mother passed away the 2 brothers lived together.  I asked her if she could oust the 5^th Uncle.  She did not give a direct answer but queried why she had to.  She stated in re-examination that it was out of love and affection that the 5^th Uncle was allowed to stay there. 

152.  In my view, irrespective of her reasons, Madam Tam could not have the necessary intention to oust the whole world including the 5^th Uncle before his death in 2000.

153.  Further, as I have analyzed in Section G under general credibility, I find that Madam Tam’s belief was that she only had a life interest and continuous maintenance from the nephews.  That was a clear expression of her intention against her interest.

J.           1999 : the Deceased’s Proposal of Marriage to Madam Tam and His Representation that He Was the Owner

154.  At the end of 1999, when the Deceased proposed to Madam Tam, it was the first time when the Deceased informed her as to the beneficial status of the Premises and the 1986 power of attorney. (Prior to this, she just assumed that the Deceased was the beneficial owner of the Premises because he was “the head of the family”.)  She asked for proof. The Deceased gave her some family letters, telling her that she would understand from those letters his relationship with Peter; that Peter was pure by nature and he would not take what did not belong to him.

155.  One does not really understand why the Deceased suddenly wanted to get married until Madam Tam testified on her son’s application for right of abode in Hong Kong.  Mr Chow was then residing at the Premises but he did not know about the basis of his application. This was confirmed by Madam Tam.  As Madam Tam was not a permanent resident then, the basis of the application was the Deceased’s status in Hong Kong. 

156.  That made sense.  Back in 1999 the public’s perception of whether a child could have right of abode through his parent(s) was a hot topic. Article 24 of the Basic Law was under scrutiny by the Court of Final Appeal and subsequently subject to the interpretation by the Standing Committee of the National People’s Congress. 

157.  I find that the Deceased wanted to help Mr Chow to apply for right of abode in Hong Kong by being his “parent”.  So he proposed to Madam Tam at the end of 1999 which culminated in the marriage in the year 2000.  However, I find the version on the Deceased’s representation as to ownership difficult to believe for the following reasons :

(a)   The 5^th Uncle was 9 years older than the Deceased. What was Madam Tam’s basis for asserting that the Deceased was the head of the family?

(b)   Why would the Deceased need to go to such depth as to why the 1986 Power of Attorney was given to the 5^th Uncle if all that the Deceased wanted to say was that the beneficial ownership was in him? 

(c)   Her own evidence was that she disbelieved the Deceased and asked for proof.  She was given some family letters (unidentified).  If, as Madam Tam claims, the title deeds had all along in the Deceased’s possession, why wouldn’t the Deceased use those as proof instead?

158.  I am not satisfied that the Deceased had made the representation to Madam Tam as claimed.

K.      2000 : Delivery of Title Deeds by the Deceased to Madam Tam

159.  According to Mr Chow, in April 2000 (2 months after the marriage), the Deceased and he went to the bank to close the safe deposit box and retrieved the title deeds.  At home, the Deceased then handed to Madam Tam the title deeds of the Premises with these words :

“This property was purchased wholly with my own money, just that it was registered in Peter’s name. He is my gratuitous trustee. He will not come back to take it, and dare not to take it, and cannot come back to take it. He does not even have the title deeds. Anyhow, this nephew was pure in nature since young. It was I who raised him up. Now I give the Premises together with the title deeds to you as a gift. From today onwards, this property is yours. You can live in it in peace.”

(This will be called “the retrieval and delivery incident”.)

160.  At the time the Deceased handed her the title deeds, he also gave her some letters from Peter, Tommy and their Father and thoroughly explained each letter to her. 

161.  Mr Chow was able to describe the appearance of the title deeds.  That tallied with the pile of original title deeds shown to the Court.  He said he specifically remembered the incident because the Deceased gave him a gold coin on that day.  However, given my findings regarding his credibility on the tearing up exercise, I hesitate in relying on any part of his evidence without independent proof. 

162.  Neither can I believe Madam Tam. If the Deceased had already asked her to read the letters in 1999, why was it necessary to explain it to her again in 2000?

163.  Assume I am wrong and the retrieval and delivery incident did occur.  The Deceased had lived for a long time in Hong Kong.  What made him believe that the mere handing over of the title deeds without an assignment or other document would give title to Madam Tam? That state of mind was wholly inconsistent with what happened in 2003 when he and Madam Tam asked Peter to transfer the Premises back.  I am not satisfied that the Deceased was exercising a right of ownership over the Premises.  If he had ever handed over the title deeds to Madam Tam, it was just for safe custody.

L.      2003 : the Deceased’s Demand for Transfer of Ownership from Peter

164.  There is no dispute that in 2003 the health condition of the Deceased deteriorated to the extent that he had mobility problem.  Madam Tam was worried about what would happen if she was left alone and the title deeds were in Peter’s name.  The Deceased allegedly made 3 phone calls to Peter in February/March 2003 asking Peter to write a power of attorney to Madam Tam and transfer the legal ownership to the Deceased/Madam Tam.  Peter allegedly promised repeatedly that the Premises were theirs and he would comply with their request; and that he would take care of Madam Tam in future.  In the 3^rd telephone call, Madam Tam took over the conversation and told Peter that they had financial difficulties and wanted to sell the Premises.  Peter allegedly told her that the Premises was theirs; if it were sold, the rent would be high; he would discuss with Tommy; they promised to take care of their livelihood so that they did not have to sell the Premises. 

165.  The Deceased had considered making a will to devise the property to her.  Upon learning that the solicitor’s fees for preparing a will would be $5,000, the Deceased gave up the idea.  Peter did not execute any power of attorney but just sent cheques since 2003. She stopped pressing on the issue. 

166.  If Madam Tam’s version is correct, she could not explain the following :

(a)    Why were the cheques made out to her and not to the Deceased?  She claimed it was because the Deceased had asked Peter to sign an authorization letter to Madam Tam for the transfer of the Premises.

(b)    Why were the cheques made out by both Peter and Tommy well before the 2003 telephone calls? Even on the limited documentary evidence, Peter had been sending cheques to the Deceased as early as 2001 and Tommy in 2002.  It cannot be suggested that Tommy had any ulterior motive in doing so or otherwise expected the subject matter of the 3 telephone calls as alleged by Madam Tam to be raised.  Both brothers even increased the monthly maintenance after learning of Madam Tam’s existence.

(c)    How would the worry of Madam Tam that she might be left alone whilst title deeds remained in Peter’s name be alleviated if she were just left with the cheques but not an Assignment in her favour?

(d)    How could the issue of getting premises with a lift be solved?

(e)    Why did the Deceased do nothing for the remaining 4 years before his death in the light of Peter’s seeming “delaying tactics”?   There was not even an assertion from Madam Tam that the Deceased had written to Peter to request or demand for the return of the Premises.

(f)    The 5^th Uncle had mobility problem in 1999.  Why wasn’t the idea of getting Premises with a lift raised then?

167.  Peter, on the other hand, says that the 3 telephone calls were for the following purposes :

(a)   From the Deceased (in about 2003) telling him about the marriage.  Madam Tam got on the phone but Peter could not understand her.  There was nothing about finance or the Premises.

(b)   From the Deceased (in about 2003) asking Peter to change the recipient of the cheques to Madam Tam. Madam Tam also got on the phone but Peter could not understand her.

(c)   The last phone call was from Madam Tam when she (through an interpreter) informed Peter about the death of the Deceased. 

168.  Both Robert and Tommy say that the Deceased had never once mentioned that he had requested Peter to transfer the Premises back to him.  I give little weight to this.  Robert had not returned to Hong Kong after the alleged demand for transfer had been made.  As for Tommy, I cannot see why the Deceased needed to talk to him about this because Tommy was not the registered owner.

169.  Madam Tam used Putonghua which Peter could not catch.  There could not have been such substantial discussion between them.  I accept Peter’s version as to what had happened.  I am not satisfied that the Deceased or Madam Tam had asked Peter to transfer the Premises back to him or her.

170.  As to the monthly maintenance, Mr Chong criticized Tommy for just producing the carbon copy cheques for March 2002 to June 2007 but did not obtain copies from the bank.  I do not regard the former as of any less weight than the latter.  Looking at the carbon copy cheques, they were not in consecutive cheque numbers and appeared to have been issued in the ordinary course month after month.  I accept those cheques were genuinely issued by Tommy to the Deceased. 

171.  Insofar as Peter was concerned, he could only produce 2 cheques dated 12.8.2001 and 12.2.2002 for the sum of US$3,000 and US$2,500 respectively.  All the remaining cheques for US$200 or US$300 were issued since the beginning of 2003.  The payment record for about 16 months from 12.8.2001 to 4.1.2003 was missing.  On the other hand, Madam Tam admitted in her witness statement that from March 2002 Peter had been sending US$200 every 2 months to the Deceased.  Even if I am not satisfied on the evidence that Peter had been sending monthly payments for those 16 months the 2 cheques in 2001 and 2002 would have well covered maintenance in the average of US$200 to US$300 per month.

172.  I am satisfied that the monthly maintenance was to honour Peter and Tommy’s promise to the Uncles to take care of them for life and were not intended to prevent the Deceased/Madam Tam from pursuing the issue of re-transfer of the Premise.

M.      OTHER MATTERS

173.  There is other evidence such as payment of outgoings and renovation expenses for the building which Madam Tam relies on.  Suffice to say that these payments/expenses are commonly paid by an occupier and are not evidence of assertion of ownership. 

174.  Mr Chong has also confirmed that Madam Tam’s interest has merged into her status as administratrix of the Deceased.  She is not relying on her contribution or investment as a wife to claim any interest in the Premises.

N.       FINDINGS ON ADVERSE POSSESSION

175.  Madam Tam went into possession at the end of 1994/early 1995 but her status as cohabitee could not be established.  Her status as occupant was referable to the Deceased but subsequently with the knowledge and implied licence of Peter.

176.  The marriage in 2000 was prompted by the Deceased’s wish to help Mr Chow apply for right of abode in Hong Kong.  The marriage was not disclosed to the family members in the USA until about 2002/3.

177.  I am not satisfied that the Deceased had represented to Madam Tam that he was the beneficial owner in 1999, or that the retrieval and delivery incident did occur.  If he had ever handed over the title deeds to her, it was just for safe custody.

178.  The 3 telephone calls took place as Peter described, namely, the Deceased told Peter about his marriage and requested him to issue cheques from then on to Madam Tam because of his mobility problem.  The last call came from Madam Tam who informed Peter about the death of the Deceased.  There had never been any demand/request for transfer of the Premises back to the Deceased or Madam Tam.

179.  There had been monthly maintenance from Peter and Tommy to the Deceased since 1984 even before the 3 telephone calls.  Their cheques were later issued to Madam Tam as per the Deceased’s request.  Peter and Tommy honoured their promises to take care of the Uncles until they passed away.

180.  Madam Tam’s possession had always been with the 2 Uncles. She did not have the intention to evict the 5^th Uncle before his death in 2000.  She believed, though mistakenly, that she could only occupy the Premises for life and receive continuous maintenance from the nephews.  It was clear expression of her intention against her interest.  She has failed to show that she had been in possession for the requisite 12 years with intention to dispossess the whole world.

181.  The licence to occupy was revoked upon the death of the Deceased.  Peter’s notice to quit to Madam Tam had expired. Peter can recover possession of the Premises.

O.               MESNE PROFITS

182.  Madam Tam has remained as a trespasser after 31.8.2007 upon expiry of the notice to quit given by Peter.  She has to pay mesne profits for her occupation.  Unfortunately, there is no evidence as to market rent for the Premises.  In the premises, the mesne profits to be paid by her would only be nominal in the sum of $100 up to the date of this judgment.

Conclusion

183.  I give judgment as follows :

(i)   The 1^st and 2^nd defendants shall deliver vacant possession of the Premises to the plaintiff within 28 days from the date of the handing down of this judgment.

(ii)   The 1^st and 2^nd defendants shall deliver all title deeds to the Premises to the plaintiff forthwith.

(iii)   The 1^st and 2^nd defendants shall pay mesne profits to the plaintiff for her occupation of the Premises from 1 September 2007 to the date of this judgment in the nominal sum of $100.

(iv)   The amended counterclaim is dismissed.

184.  I make an order nisi that :

(i)   Costs shall be to the plaintiff to be taxed if not agreed.

(ii)   There shall be payment out of the court sum(s) paid in by the plaintiff as security for costs forthwith.

(iii)   The 1^st and 2^nd defendants’ own costs be taxed in accordance with the Legal Aid Regulations.

Any application to vary must be made by summons within 14 days of the date of handing down of this judgment. 

185.  I am most grateful to counsel for their thorough preparation and assistance to the Court.