NG WAI MING v. LIU XIN

DCCJ 4932/2011

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 4932 OF 2011

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JUDGMENT

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Introduction

1.  This is a trial of the plaintiff’s claim for 3 personal loans in the total sum of HK$269,000 allegedly advanced to the defendant in 2010.

The plaintiff’s case

2.  The plaintiff Mr Ng Wai Ming (“Ng”) and the defendant Madam Liu Xin (“Liu”) formerly were boyfriend and girlfriend.  They came to know each other around 2005 and developed an intimate relationship.  In or about February 2009, their relationship turned sour.  Ng’s case is that he advanced 3 personal loans to Liu, the first one in the sum of HK$59,000 on 26 May 2010 (“the 1^st Payment”), the second one in the sum HK$10,000 on 31 August 2010 (“the 2^nd Payment”) and the third one in the sum of HK$200,000 in December 2010 (“the 3^rd Payment”).

The defendant’s case

3.  Liu denies that she had borrowed any money from Mr Ng. 

4.  She accepts that she received the 1^st Payment in May 2010 and the 2^nd Payment in August 2010.  As to the 3^rd Payment, Liu only admits that she received HK$70,000 odd from Ng in December 2010.  She denies the aforesaid payments were loans.  Her case is that, during their courtship and cohabitation, Ng would give her money from time to time out of love and affection for household expenses and her personal expenses. 

Core Issues

5.  The core issues of this case, as I see it, are as follows:

a. Whether the 1^st Payment HK$59,000 was a loan to Liu or an unconditional gift out of love and affection?

b. Whether the 2^nd Payment HK$10,000 was a loan to Liu or an unconditional gift out of love and affection?

c. Did Ng advance the 3^rd Payment HK$200,000 as alleged or any part thereof? If so, was this a loan to Liu or was it an unconditional gift out of love and affection? 

The witnesses

6.  At trial, Ng was the only witness on this side.  Liu testified and called 2 witnesses, namely Li Xiaobo and Liu Heyuan.

The plaintiff’s evidence

7.  Ng testified in court. He confirmed and adopted his witness statement and supplemental witness statement both dated 27 December 2013.

8.  According to Ng, he is a director of a garment trading company. Around 2005, he became acquainted with Liu in a massage parlour in Tsuen Wan.  Liu was working there as a masseuse.

9.  Both Ng and Liu were divorcees and they developed an intimate relationship not long after they met. Ng gave the keys of his flat to Liu so that she could visit any time.  Liu would spend several nights a week in Ng’s flat in Kwai Chung. For other nights, she might stay in her former matrimonial home.

10.  Ng and Liu would keep their finances separate. During their courtship, Liu continued to work as a masseuse.  Liu told him that she was earning about HK$30,000 a month.  She did not require any financial support from Ng.  But Ng would pay for the household expenses.

11.  During their courtship, Liu had 3 abortions.  The first one was in 2006 and the second one was in 2008. The third one was around August 2009 when Liu told him.  Ng said he was not able to verify whether the third one had any connection to him.

12.  Their relationship turned bad in February 2009. They had frequent quarrels.  In June 2009, they had a heated argument as a result of which the police’s assistance was called for.  Ng demanded Liu to leave his flat.  Since then, she had spent less time in the flat.

The 1^st Payment

13.  Around April 2010, Liu called Ng and they met in person.  Liu requested Ng to lend her HK$59,000.  She said one of her cousins was in need of money for arranging a marriage in Hong Kong. Ng said he could lend Liu HK$59,000 but this had to be repaid upon demand.  Liu agreed.  On 26 May 2010, Ng deposited HK$59,000 into Liu’s bank account no. 826-xxxxxx-888 with HSBC.

The 2^nd Payment

14.  Around August 2010, Liu requested Ng to meet.  At the meeting, Liu asked for a second loan of HK$10,000 and explained that the 1^st Payment was not enough for her cousin. Ng told her that he could lend another HK$10,000 but this had to be repaid on demand.  Liu agreed.  On 31 August 2010, Ng transferred HK$10,000 into Liu’s HSBC account.

The 3^rd Payment

15.  Around November 2010, Liu approached Ng and requested for a third loan in the sum of HK$200,000.  She explained that she needed this for the purchase of a property in mainland China situated at 深圳市寶安區灣上六座花園6棟B單元2001單位 which was for investment.

16.  Ng said he could lend her HK$200,000 but this had to be repaid on demand.  Liu agreed.  Pursuant to this agreement, Ng went to the Yuen Long branch of Hang Seng Bank Limited to withdraw cash in the sums of HK$30,000, HK$35,000, HK$10,000 and HK$25,000 respectively on 3 December 2010, 6 December 2010, 8December 2010 and 9 December 2010.  Cash in the total sum of HK$100,000 was given to Liu as half of the 3^rd Payment.  The other half in the sum of HK$100,000 was by way of a cash cheque no. 454834 dated 15 December 2010 made payable to Liu.

Demand for repayment

17.  On 29 June 2010, Ng called Liu asking her to repay the 1^st Payment.  Liu did not do so. On 2 July 2010, Ng started a case SCTC 30400/2010 in the Small Claims Tribunal claiming for HK$50,000, abandoning HK$9,000 due to the jurisdictional limit.

18.  Around May 2011, Ng made an oral demand for repayment of the 1^st Payment, the 2^nd Payment and the 3^rd Payment totalling HK$269,000 on the ground floor of the building in Kwai Chung Estate where Liu’s former matrimonial home was situated.  Liu refused.  They got into a heated argument as a result of which the police was called.

19.  Finally, Ng started this case on 28 December 2011 by issuing the writ of summons to claim for the total sum of HK$269,000.

The defendant’s evidence

20.  Liu testified in court.  She confirmed and adopted her witness statement dated 22 November 2012. 

21.  According to Liu, she came to know Ng in early 2006 while working as a masseuse in a massage parlour in Tsuen Wan.  As both of them had an unhappy marriage and were separated from their spouses, they soon developed a boyfriend and girlfriend relationship. Around mid-2006, they started to cohabit.  A few months afterwards, they moved to a rented apartment at Bellagio in Sham Tseng. 

1^st termination of pregnancy

22.  Around September 2006, Liu became pregnant with Ng’s child. Ng indicated that he did not want to have a child and hoped Liu would terminate the pregnancy.  Ng said he would look after Liu’s living expenses during her recovery.  Liu accepted Ng’s suggestion as their relationship had just begun and the divorce procedures for both of them still had not been completed.  Ng accompanied her to go for an abortion at the Family Planning Association. Liu also quitted her job for taking rest and Ng started paying for her living expenses.

Ng’s support for Liu’s living expenses

23.  After resting for about a month, Liu intended to start working again.  But Ng did not want her to work at the massage parlour and preferred her to spend more time on looking after the household.  Ng promised the he would be responsible for her living expenses and personal expenses.  As a result, Liu did not start working again.

24.  From that time up to March 2011, Liu had only temporarily worked as beautician for about 3 to 4 months.  She relied on Ng to support her living.

25.  From time to time, Ng would give Liu money for her living expenses.  On average, it would be around HK$10,000 each month.  If there were extra expenses due to gatherings with friends or purchases of electrical equipment, more would be given to her.

26.  By late 2006, Ng and Liu lived just like husband and wife.  Ng would let Liu meet his colleagues, friends and family members.  Starting from late 2007, they would visit Ng’s father 2 to 3 times at an elderly home in Sheung Shui.  Likewise, Ng would meet Liu’s friends, including Li Xiaobo (“Li”).

27.  Liu spent most of her time looking after the household.  But while Ng had gone to work, she would find some time to visit her son from the previous marriage who was born in 2000.  This would be about 2 times in a week.

2^nd termination of pregnancy

28.  In early 2008, their relationship had become stable and they planned to have a child.  Liu became pregnant again.  But she would havearguments with Ng from time to time due to Liu’s visits to her son from the previous marriage.  When she was 4-month pregnant, Ng harassed her son as a result of which they had a serious argument.  Ng forced Liu to choose between the son from her previous marriage and the child in her womb.  Liu insisted on visiting her son.  Ng then said he would decide for her and that her pregnancy should be terminated.  Ng packed her clothes and kicked her out of the apartment on 10/F, Tower 2 of the Apex in Kwai Chung.

29.  Liu returned to her former matrimonial home where her ex-husband was staying.  She was worried that the child in her womb would lack the care of a father if born and so she went to a hospital to terminate her pregnancy. 

30.  After learning about this 2^nd termination of pregnancy, Ng tendered his apology and promised Liu that he would not harass her son again.  He requested Liu to go home with him.  Seeing his remorse, Liu went back with Ng.

Incident in 2009

31.  In late 2008, Ng indicated that the divorce procedures for him and his former wife had been completed.  But Liu found that he would still contact his former wife from time to time. When Ng went to visit his children from this previous marriage, he would switch off his mobile phone.  Liu had a doubt as to whether Ng’s relationship with his former wife had been clear cut.  On 6 February 2009, they had a heated argument on this subject in the course of which Ng grabbed her neck, slapped her face and kicked her out of the apartment at Tower 2 of the Apex.  Liu had to take shelter at her friend’s place.

32.  While Liu was staying in her friend Li’s place in Shenzhen, she told her how she had been treated by Ng.  Ng went there to find Liu, pleading her to unite with him.  As Liu found that she had become pregnant with Ng’s child again and she moved out of the apartment out of a brief moment of anger, she agreed to move back with Ng.

3^rd termination of pregnancy

33.  After moving back, another argument broke out in June 2009 regarding the relationship between Ng and his former wife.  Ng kicked her out of the apartment on 27/F, Tower 1 of the Apex and gave her money, saying that she should have an abortion.  Liu left and took shelter at Li’s place in Shenzhen again.

34.  Liu was feeling sad and thought that the relationship with Ng could not be saved.  After struggling for a while, she went to a hospital in mainland China to have an abortion in late June 2009.  She was accompanied by Li.

Intended marriage

35.  In early July 2009, Liu took her son from the previous marriage back to her hometown in Hunan.  Ng went there to find her tendering his apology.  In early August 2009, he promised in the presence of Liu’s family members that he would treat her well in future and that he would marry her.  He further said he would purchase a property as their matrimonial home.  Liu was convinced and went back to live with him.

36.  Liu’s divorce procedures were completed in late 2009.  On 8 March 2010, Liu and Ng went to the marriage registry in Tsim Sha Tsui to apply for registration of marriage on 12 May 2010.  This application was subsequently cancelled by Ng due to a heated argument in early April 2010 over the issue of whether Liu should start working again.

37.  On 12 April 2010, they went to the marriage registry in Shatin to apply for registration of marriage on 10 June 2010.  This date was subsequently postponed to 29 June 2010 due to another argument over Liu’s work as a beautician for about a month.

Defendant’s explanation of the 1^st Payment

38.  In late May 2010, they agreed to take a trip to Zhangjiajie in China before their intended marriage in June 2010 so as to harmonise their relationship and visit Liu’s relatives in her hometown.  In this connection, Liu asked Ng for a sum of about HK$50,000. This was intended to cover the dowry from Ng to Liu’s family in accordance with tradition, the renovation costs for Liu’s family house, the costs of gifts for Liu’s parents and the expenses for the trip.  It was under such circumstances that Ng deposited HK$59,000 into Liu’s HSBC account on 26 May 2010.  Ng also made clear that this sum would compensate Liu for the HK$70,503 that Liu had returned to him in February 2009 when they were having a heated argument.  Liu spent the said sum of HK$59,000 as described in June 2010.

Cancellation of intended marriage

39.  On 27 June 2010, Liu and Ng had another argument over the issue of Liu visiting her son from the previous marriage.  Ng said he did not care whether their marriage would go ahead.  On 28 June 2010, Liu decided that she would not marry Ng and went to Shenzhen to stay with her friend Li.

40.  Ng and Liu did not get married on 29 June 2010 as they had originally planned. 

41.  On 30 June 2010, Ng went to Shenzhen to find Liu asking her to go back with him.  He promised that he would amend.  Liu said that she would need some time to consider.  She went back to Hong Kong on the same day but did not move back to Ng’s apartment on 27/F, Tower 1 of The Apex.

42.  Ng continued to approach Liu in the next few days.  He said he would purchase a property in the joint names of Liu and himself and build a family together.  Liu thought that Ng would amend his past deeds and hoped to start anew with him.  So they were reunited again.

Small Claims Tribunal Case (SCTC 30400/2010)

43.  In early July 2010, Liu’s ex-husband told her that a letter from the Small Claims Tribunal to her had been sent to his home address.  When Liu opened it, she found that it was a claim by Ng against her for a loan of HK$59,000.  Liu was surprised and asked Ng why he had treated the expenses for the trip to Zhangjiajie, the dowry to Liu’s family and the renovation costs for Liu’s family home as a loan.  Ng replied that he started the claim out of anger and that he was just playing a joke on Liu to scare her.  He told her not to mind and said he would discontinue the case.  Subsequently, Liu received a notice of discontinuance of the case. 

Defendant’s explanation of the 2^nd Payment

44.  In August 2010, Liu asked Ng to give her money for living expenses.  Ng said that he did not have much cash with him and would transfer money into Liu’s account.  It was under such circumstances that the 2^nd Payment of HK$10,000 was transferred into Liu’s HSBC account on 31 August 2010.  Liu subsequently withdrew the money for use.

Defendant’s explanation of the 3^rd Payment

45.  The apartment situated on 17^th Floor, Block 3, Villa by the Park, No 139 Castle Park Road, Ping Shan, Yuen Long, New Territories (“Villa by the Park”) was purchased in the joint names of Liu and Ng and the completion of the transaction took place on 20 September 2010.  The apartment was intended to be their home.  Ng paid for the purchase price with the help of a mortgage from Hang Seng Bank Limited.  They moved into the apartment in late October or early November 2010.

46.  Liu explained that in December 2010, Ng gave her a sum in cash.  She did not count how much upon receiving.  Later she found that it was about HK$70,000.  Ng made it clear to her that the sum was for payment of decoration expenses for Villa By the Park, the purchase of a pet dog, the purchase of a new year gift for Liu and the payment of expenses for the new year and the trip to Shanghai and South Korea in February 2011.   

47.  Liu denied that the sum received from Ng in December 2010 was for purchase of the property in China. She said the property was for investment purpose and the down payment was contributed by Liu and her father.  The monthly mortgage repayment came from the rental income and the contribution from Liu’s father.

Final breakup of relationship   

48.  Liu and Ng went to Shanghai and South Korea for a trip in early February 2011 as planned. But their relationship became turbulent again when Liu started working at the beauty parlour run by her friend Liu Heyuan in early March 2011.  Ng criticized her for not spending enough time on him and said that she should not spend so much money on her son from the previous marriage.  He would check Liu’s mobile phone and stop her making phone calls to her son.  He would also search Liu’s handbag.

49.  On 24 April 2011, Liu and Ng had a heated argument inside the car which was parked near Villa by the Park.  That developed into a fight.  On the next day, Liu packed her things and moved out of Villa by the Park, intending to end the relationship with Ng.

50.  In May, June and July 2011, Ng tried to approach Liu hoping that they would be reconciled to each other.  But Liu stood firm on her decision to end the relationship.  They agreed that the 50% ownership of Villa by the Park held by Liu should be returned to Ng so that they could have a clean break.  This was done by way of a deed of gift on 11 November 2011.

Evidence of Li Xiaobo

51.  Liu called her friend Li Xiaobo as a witness.  She confirmed and adopted her witness statement dated 20 November 2012.

52.  Li came to know Liu in 2000 in Shenzhen where Li was running a beauty parlour.  Even after Liu moved to Hong Kong in 2003, their friendship continued.  In late 2005, Li learned that Liu’s marriage was breaking up.  About 6 months later, Liu told her that she was having a relationship with Ng and they were cohabitating.

53.  Because of Liu, Li had the chance to meet Ng in early 2007.  Since then, she would meet them about 2 times a month in Shenzhen for meals and massage.  She had also come to Hong Kong to visit them for 6 to 7 times.

54.  As far as she knew, Ng and Liu had an intimate relationship just like husband and wife.   But she also knew that they would have arguments from time to time.

55.  In mid-February 2009, Liu stayed in Li’s home in Shenzhen due to an argument with Ng during which he used violence against her and kicked her out.  Subsequently, Ng went to Shenzhen to find Liu and apologized to her.  Liu forgave him and returned to Hong Kong with him.

56.  In late June 2009, Liu went to Shenzhen to find Li again after a heated argument with Ng.  It was due to Ng’s frequent contacts with his ex-wife.  She said she was kicked out by Ng.  She was then 6-month pregnant but was considering to terminate the pregnancy. Li kept her company for a few days and escorted her to a hospital for terminating the pregnancy.  After the operation, Liu went to Hong Kong to pick up her son and then went back to her hometown in Hunan for rest.

57.  In mid-August 2009, Li learned that Liu had been reunited with Ng after he had gone to Hunan to apologise.  Since then, the 3 of them went out for entertainment from time to time as before.  She also heard that they were planning to get married.

58.  In late June 2010, Liu went to Shenzhen to find Li saying that she had another argument with Ng and did not want to marry him.  On 29 June 2010, Liu received a phone call from Ng and they had an argument about the cancellation of their intended marriage.  On the next day, Ng went to Shenzhen to find Liu and apologise.  Liu said she needed time to consider.  But in view of the fact that Li would need to move house soon, Liu did not want to cause her inconvenience and returned to Hong Kong on the same day.

59.  During the period between July 2010 to early 2011, Li met Liu and Ng for a number of times and learned that they had been reconciled to each other.  Their relationship was intimate.  In November 2010, Liu and Ng went to Heyuan in China for a trip with Li and her 3 friends.  Liu and Ng stayed in the same room at the hotel.  In front of Li’s friends, they introduced themselves as Mr and Mrs Ng.

60.  Around March to April 2011, Liu told Li that she had a number of arguments with Ng after she started working again.  She was discouraged by the relationship.  In late April 2011, Liu told her that she and Ng had become separated.       

Evidence of Liu Heyuan

61.  Liu called her friend Liu Heyuan (“LHY”) as a witness.  She confirmed and adopted her witness statement dated 22 November 2012.

62.  According to LHY, she came to know Liu in 2007.  They became friends afterwards.  Liu told her that she was cohabiting with Ng.  LHY had the chance to meet Ng due to her friendship with Liu.

63.  In November 2010, Liu told LHY that she had moved to Villa by the Park which was brought in the joint names of Liu and Ng.  She went to visit them and went out for dinner together.

64.  Also in November 2010, LHY quitted her job as a health service assistant in a public hospital.  She was planning to open a beauty parlour.  In December 2010, Liu accompanied her to look for suitable shop premises.  LHY invited Liu to help at her beauty parlour as a beautician.  She expressed interest but indicated that Ng did not like her taking up a job. 

65.  In February 2011, Liu told LHY that Ng finally let her take up the job.  So Liu started working at the beauty parlour in early March 2011.  During the period from March to April 2011, she sometimes saw Ng coming to the beauty parlour to pick up Liu after work.

66.  One day in mid-May 2011, around 9 pm, LHY saw Ng pulling Liu on the street outside the beauty parlour.  Ng was emotional and asked Liu not to leave him.  Liu told him to let her go.  LHY and her husband tried to separate them and escorted Liu back to the beauty parlour.  After staying for about 1 hour, the couple intended to leave with Liu.  But they found Ng was still waiting outside.  When the 3 of them were boarding a taxi, Ng tried to stop them.  LHY told Ng that Liu would go to their place to stay for a night.  Ng backed down and let the taxi be driven away.  At the request of Liu, the couple dropped her in Kwai Chung as she said she needed to meet her son.

67.  2 days after the aforesaid incident, Ng showed up outside LHY’s beauty parlour.  When LHY went out, Ng tried to give her a pile of HK$500 notes and asked her to pass the same to Liu as household expenses.  LHY said Liu was on leave and refused to accept the notes.  Then Ng left.

68.  In June 2011, Liu resigned from LHY’s beauty parlour as she did not want the matter between her and Ng affecting the business of LHY.  Since then, Liu had only worked there as a part-time beautician on a casual basis.

Discussions

69.  My ruling on the 1^st Payment, the 2^nd Payment and the 3^rd Payment as personal loans or payments out of love and affection depends on the witnesses’ credibility.  On this issue, I find what was stated by Deputy High Court Judge Eugene Fung SC in Hui Cheung Fai v Daiwa Development Ltd, HCA 1734/2009, as applied by His Honour Judge Andrew Li in Ricoh Hong Kong Limited v Wallbanck Brothers Securities (Hong Kong) Limited, DCCJ 2454/2013, instructive:

“76. In making my findings of fact in this case, I am guided by a number of general principles which judges apply as to fact finding and the assessment of credibility.

77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onasis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce). It is right to point out, however, that some of the documents in this case are alleged by the Son to be sham and those documents obviously cannot be used to assess the credibility of the parties.

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

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

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

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

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

82. Whilst these words were spoken in the context of a fraud case, I believe they are applicable to any case where a witness’ credibility features prominently in the court’s determination.  They are particularly apposite in a case like the present where very serious allegations (akin to allegations of fraud) have been made by the Son against the defendants.”

Duration of relationship

70.  Ng’s case is that the boyfriend and girlfriend relationship with Liu lasted from 2005 to June 2010. They remained as ordinary friends afterwards.  Liu’s version is that their courtship was from early 2006 to 25 April 2011.  The date on which their relationship came to an end might shed some light on the nature of the 3 payments made on 26 May 2010, 31 August 2010 and in December 2010 respectively.  I accept Liu’s version regarding the duration of the relationship for the following reasons: -

a. Looking at the departure and re-entry records of Ng and Liu, they left Hong Kong and entered Hong Kong together 76 times between 9 July 2010 and 14 April 2011.  The reasonable inference is that they were travelling together.  If they were just ordinary friends after June 2010 as alleged by Ng, I fail to see why they would travel together so frequently.  This pattern of travelling matches with Li’s evidence that Liu and Ng would go to Shenzhen to join her for dinner and massage from time to time.  I do not accept Ng’s saying that he was just giving a ride to Liu for her convenience and that after they crossed the border together, they would go different ways in mainland China.

b. If Ng and Liu were ordinary friends as alleged by Ng, it would be odd for them to stay in the same room in the hotel during the trip to Heyuan in November 2010.  They even allowed Li’s friends to address them as Mr and Mrs Ng.  I accept Li’s evidence on this aspect and see no reason why she had to lie about this.

c. They also travelled together to Shanghai and South Korea in February 2011 and stayed in the same hotel room.

Presumption of Advancement

71.  Counsel for both sides made reference to the presumption of advancement.  This presumption is succinctly stated in Snell’s Equity (32^nd  Edition) at paragraph 25-008:

“BETWEEN SPOUSES. In the past, the formal presumption of advancement has applied where a man bought property and had it conveyed to his wife, or if he contributed to the mortgage payments on a property owned or purchased by her. Prima facie this was treated as a gift to her. The presumption has been extended to payments made to a man’s intended wife. The presumption of advancement existing at the date of the conveyance was not destroyed by the fact that the marriage did not take place, or was afterwards dissolved or was declared null on some ground which made the marriage voidable only, and not void ab initio …”

72.  Counsel for Liu submitted that this presumption should apply in the case of fiancé and fiancée according to Moate v Moate [1948] 2 All ER 486 and Mossop v Mossop [1989] Fam 77.  As such, this should apply to the 1^st Payment because when payment was made on 26 May 2010, Ng and Liu were in the status of fiancé and fiancée in view of their intended marriage in June 2010.

73.  I accept counsel’s submission on this point.  The 1^st Payment should be treated as a gift by Ng to Liu.  Regarding the 2^nd Payment and the 3^rd Payment, counsel for both sides accept that the principle is inapplicable as they were not longer fiancé and fiancée when payments were made.

Burden of proof

74.  Counsel for Ng raised the issue of burden of proof.  He submitted that the presumption of advancement, if applicable, applies to the 1^st Payment only and Liu bears the burden to prove that the 2^nd Payment and 3^rd Payment were not repayable.  He relied on Seldon v Davidson [1968] 1 WLR 1083 where the English Court of Appeal stated the followings:

“… Payment of the money having been admitted, prima facie that payment imported an obligation to repay in the absence of any circumstances tending to show anything in the nature of a presumption of advancement …” (at 1088B)

“… we have from the defendant in this case a clear admission of the payment of the money, and no suggestion that it was paid in settlement of an existing debt, or that it was given in return for cash, or anything of that sort. In the absence of any such circumstances, money paid by the plaintiff in circumstances such as these is prima facie repayable on demand. If the defendant seeks to evade repayment of the money which was paid to him, it seems to me that the judge was right in placing the onus upon him to prove the facts which he alleges show the money was not repayable.” (at 1088G)

“… proof of payment imports a prima face obligation to repay the advancement in the absence of circumstances from which the presumption of advancement can or may arise.” (at 1090G)

“My Lord has expressed the view that the loan would be repayable on demand. I would say, if not repayable on demand, at least repayable within a reasonable time of a request for repayment, and, of course, if it be the case that mere loans were made and, later on, the borrower repudiates the loans and asserts that the advancements were by way of out-and-out gifts, that repudiation of the true nature of the transaction would upon any view render the loans immediately repayable.” (at 1090H)

75.  I have already ruled that the presumption of advancement applies to the 1^st Payment. Assuming that I am wrong on this, then the burden is on Liu to prove that the 1^st Payment and the 2^nd Payment were made by Ng out of love and affection. 

76.  Liu does not admit the 3^rd Payment in full and only accepts that she received about HK$70,000 from Ng in December 2010.  The burden is on Ng to prove that the whole 3^rd Payment, amounting to HK$200,000, was advanced to Liu.  Upon the court’s ruling on how much had actually been advanced, the burden will be on Liu to prove that such sum is not repayable.

Ruling on the 1^st Payment

77.  The 1^st Payment in the sum of HK$59,000 was deposited into Liu’s HSBC account on 26 May 2010.  Even if I am wrong in holding that the presumption of advancement applies to the 1^st Payment, I still do not accept that it was a loan due to the following reasons:

a. Ng said that the loan agreement was orally made in April 2010 and the 1^st Payment was deposited on 26 May 2010.  This should be looked at in the context of the events concerning Ng and Liu. On 12 April 2010, Ng filed a Notice of Intended Marriage with the Registrar of Marriages to state his intention to marry Liu in June 2010 at Shatin Marriage Registry.  I find it odd and absurd that a bridegroom to be and a bride to be would enter into a loan agreement at the time when they decided to get married.  Such a commercial dealing simply does not match with the romantic, harmonious and joyful atmosphere that one would expect of a wedding plan.  Ng’s version is incredible.

b. When Ng started the case SCTC 30400/2010 to claim for the 1^st Payment against Liu on 2July 2010, the claim form stated that Liu requested for the loan in the end of May 2010.  But in his witness statement, he stated that the request was made in April 2010.  Ng is inconsistent.

c. If the claim in SCTC 30400/2010 were a genuine claim for the 1^st Payment, there would be no reason for Ng to discontinue it subsequently.

d. In his witness statement, Ng stated that he made it clear to Liu that the 1^st Payment had to be repaid on demand.  But in his evidence in court, he said he told Liu that she should repay when she had money.  This is a material departure from his original version.    

Ruling on the 2^nd Payment

78.  The 2^nd Payment in the sum of HK$10,000 was transferred to Liu’s HSBC account on 31 August 2010.  I do not accept that it was a loan due to the following reasons:

a. Ng started the case SCTC 30400/2010 to claim for the 1^st Payment against Liu on 2July 2010.  This case was subsequently discontinued by Ng.  One would find it absurd that when the 1^st Payment had not been repaid by Liu so that Ng had to start a claim in the Small Claims Tribunal to recover the same, Ng would accede to Liu’s request for a second loan in the sum of HK$10,000.

b. Ng said the purchase of Villa by the Park was not for self-use but was an investment for Liu and himself.  The purchase price was HK$1,950,000.  The agreement for sale and purchase was dated 18 August 2010.  The completion took place on 20 September 2010.  The property was registered in the joint names of Ng and Liu as tenants in common.  He said he paid for all the deposits, miscellaneous expenses and renovations costs which should be shared equally.  The initial deposit was HK$100,000.  The purchase price was partly settled by a mortgage from Hang Seng Bank Limited.  Such a version would mean that when Ng advanced the 2^nd Payment to Liu, she was owing him not just the 1^st Payment but also the contribution for the initial deposit in the sum of HK$50,000. Under such circumstances, Ng still advanced a further loan of HK$10,000.   This is incredible.

c. In his witness statement, Ng stated that he made it clear to Liu that the 2^nd Payment had to be repaid on demand.  But in his evidence in court, he said he told Liu that she should repay when she had money.  This is a material departure from his original version.

Ruling on the 3^rd Payment

79.  As to the 3^rd Payment in the sum of HK$200,000 that Ng alleged as a third loan, Liu admitted that she received about HK$70,000 from Ng in December 2010.  I find the evidence adduced by Ng insufficient to prove that Liu had received HK$200,000 from him.  While Ng’s passbook shows the withdrawals of HK$30,000, HK$35,000, HK$10,000 and HK$25,000 from his account with Hang Seng Bank Limited on 3 December 2010, 6 December 2010, 8 December 2010 and 9 December 2010 respectively, there is no concrete proof that all these were given to Liu.  As to the cheque for HK$100,000, there is also no concrete proof that the same was given to Liu.  I find that Liu only received about HK$70,000 from Ng in December 2010 based on her admission.

80.  Even assuming the whole sum of HK$200,000 had been received in full by Liu, I do not accept that it was a loan due to the following reasons:

a. If Ng had agreed to grant a third loan in the sum of HK$200,000, it would be strange that he would need to go to Yuen Long Branch of Hang Seng Bank Limited to withdraw cash in the sums of HK$30,000, HK$35,000, HK$10,000 and HK$25,000 on 3 December 2010, 6 December 2010, 8December 2010 and 9 December 2010 respectively and then followed by a payment by cheque on 15 December 2010.  This was too troublesome for a businessman like Ng.

b. Ng said that the first cash payment HK$30,000 was made to Liu at Yuen Long branch of Hang Seng Bank Limited on 3 December 2010.  But when one looks at the departure and re-entry records, Liu was not in Hong Kong on that day.

c. According to Ng’s version, in December 2010, Liu was owing him the 1^st Payment, the 2^nd Payment and the investment contribution for Villa by the Park.  Liu had not repaid anything but Ng still agreed to grant a third loan as much as HK$200,000.  This is contrary to common sense and commercial sense.

d. As to the cheque payment on 15 December 2010, Ng said he had to borrow from a friend Hung Lam so as to get sufficient fund for lending to Liu.  Such an allegation whereby a creditor would borrow from a third party to lend to a debtor who was already owing previous debts is simply incredible.  This sounds even more ridiculous when the debtor was saying that she was borrowing a third loan for the purpose of a property investment in China in which the creditor had no interest.

e. Ng’s present claim of the 3^rd Payment stands at HK$200,000.  Surprisingly, when Ng’s solicitors issued the demand letter to Liu on 21 November 2011 and in the original Statement of Claim, the 3^rd Payment only included the cheque payment of HK$100,000.  There was no mention of the cash payment in the total sum of HK$100,000.  This casts another doubt on the truthfulness of Ng’s version.

Other observations on plaintiff’s credibility

81.  Apart from the aforesaid reasons which led to my conclusion that the 1^st, 2^nd and 3^rd Payments were not personal loans advanced to Liu, there is another aspect of Ng’s evidence which I find unreasonable.  In his evidence in court, Ng said that he could not tell whether Liu’s first 2 pregnancies which were terminated respectively in 2006 and 2008 had any connection to him.  He explained that he had not had a circumcision at that time and sometimes he would wear condoms while having sexual intercourse with Liu.  Such a saying would mean that he had a great reservation about Liu’s fidelity when they were still having an intimate relationship.  But this was not mentioned anywhere in his 2 witness statements.  If Ng had such a reservation, it would not make sense for him to advance 3 personal loans to Liu and entered into a so-called investment joint venture with her for the purchase of Villa by the Park.

82.  Furthermore, Ng’s aforesaid version in court conflicts with the version in his witness statement.  In the witness statement, he did not deny Liu’s first and second pregnancies were connected to him but said he was not sure whether the third pregnancy was related to him.  In his evidence in court, he admitted that he was the father of the baby of the third pregnancy.

83.  Ng said in his witness statement that Liu spent less time in his flat after September 2009.  From the information filled in for registration of marriage in respect of their 2 intended marriages in May 2010 and June 2010, one could see that Liu’s address was stated to be at 27/F, Tower 1 of The Apex.  This address was same as Ng’s address.  Ng signed on the Notices of Intended Marriage on both occasions.  He must be aware of the information given.  Also, Liu’s statements for her HSBC accounts were also sent to this address at least from June 2010 to November 2010.  Such documentary evidence defeats Ng’s denial of their cohabitation relationship.

84.  Likewise, Ng denied that he had given the keys of Villa by the Park to Liu and that she lived there.  But Liu’s statements from Bank of China were sent there at least from December 2010 to March 2011.  I fail to see why Liu would use this as a correspondence address if she did not have the keys and did not live there.  Ng’s evidence is not reliable.

85.  Ng tried to paint a picture that he and Liu were independent of each other in terms of their finances and that Liu did not require any financial support from him.  Such a version is contradicted by the information filled in for registration of marriage in respect of their 2 intended marriages in May 2010 and June 2010.  Liu was described as a housewife therein.  The reasonable inference must be that Ng, as fiancé, was supporting her.

86.  In his first witness statement, Ng stated that he never allowed Liu to drive any of his cars.  But when Liu produced the police record showing that she was caught violating traffic regulations on 4 occasions while driving his 2 cars, Ng changed his version in the supplemental statement by saying that he let Liu drive his car because he was tired and preferred to be a passenger.

87.  Ng agreed that he and Liu took a trip to Shanghai and South Korea together in February 2011.  On his own words, Ng even paid partly, if not in full, for Liu.  Such a trip does not fit into the depressive atmosphere described by Ng.  At that time, according to Ng’s version, the 1^st Payment, the 2^nd Payment, the 3^rd Payment and the investment contribution for Villa by the Park had not been repaid, the intended marriage in June 2010 did not work out and there were previous arguments which led to the calling of the police.  Against such a background, I do not believe that they would still travel as ordinary friends for companionship as alleged by Ng.

Other observations on defendant’s credibility

88.  Liu said that Villa by the Park was purchased by Ng as their home.  The transaction was completed on 20 September 2010.  She admitted that Ng paid the purchase price and miscellaneous expenses even though the property was in the joint names of Liu and Ng.  After their relationship was broken around 25 April 2011, Liu voluntarily returned her interest in the property to Ng on 11 November 2011 by a deed of gift in order to have a clean break.  Liu’s conduct indicated that she is an honest and honourable person.  She did not claim what she believed did not belong to her.  If the 1^st Payment, the 2^nd Payment and the 3^rd Payment were loans advanced to her, I believe she would have admitted the same.  I accept her version that the money given to her by Ng was out of love and affection.

89.  I note that Liu in her witness statement stated that when the intended marriage did not work out on 29 June 2010, Ng went to Shenzhen to find her hoping to reconcile on 30 June 2010. In her evidence in court, Liu said that the date should be 29 June 2010 instead. I accept that after their intended marriage did not work out on 29 June 2010, Ng did go to Shenzhen to find Liu asking for reconciliation.  Whether that was on 29 June 2010 or 30 June 2010, I do not think it makes any material difference.  Liu’s evidence on this aspect would not weaken her credibility.

Observation on Li Xiabo’s credibility

90.  I find Li Xiabo an honest and reliable witness.  She gave her evidence in a straightforward manner.  She was not shaken under cross-examination by Ng’s counsel.  Even though she could not recall whether Ng went to Shenzhen to find Liu on 29 June 2010 or 30 June 2010, I do not think this would affect her overall credibility.  I accept Li’s evidence.

Observation on Liu Heyuan credibility

91.  LHY also testified in a straightforward manner.  Her evidence was not shaken under cross-examination by counsel for Ng.  I find her an honest and truthful witness.  I accept her evidence.

Conclusion on the 1^st Payment, 2^nd Payment & HK70,000 received in December 2010

92.  I have already concluded that the 1^st Payment, the 2^nd Payment and the 3^rd Payment, even if made in full, were not loans.  Then there is a remaining question as to the nature of these payments.  I accept Liu’s explanation that the 1^st Payment, the 2^nd Payment and the HK$70,000 paid to her in December 2010 were payments by Ng out of love and affection because Ng was supporting her and paying for the household expenses during their courtship.  Such a conclusion is supported by the documentary evidence that cannot be disputed.

Ng’s application to reopen case

93.  After hearing the witnesses, I adjourned the trial to another day for hearing counsel’s final submissions. On that day, Ng’s counsel applied to reopen Ng’s case because he would like to adduce the copy of a cheque no. 454834, dated 15 December 2010, for the sum of HK$100,000 and its back.  These documents had already been included in the bundles of documents for trial.  The only difference is that the back of the cheque in the trial bundles is blank but the copy that Ng’s counsel sought to adduce bears a signature in Chinese, the first character of which is the same as Liu’s surname.  The cheque was not crossed.  According to Ng’s HSBC bank statement, the cheque was cashed on 15 December 2010. As I understand it, Ng’s counsel was trying to submit that it was Liu who signed on the back of the cheque as endorsement and cashed the same. 

94.  I refused the application by Ng’s counsel and refused to admit the copy of the cheque and its back.   I told counsel that I would give my reasons in the judgment and now I do.

95.  This application by Ng was late by any standard.  The court had already heard all the witnesses and the parties had already closed their cases.

96.  As early as 18 June 2013, Ng’s solicitors already filed their Listing Questionnaire confirming that discovery had been completed and there would be no further interlocutory application.  It was under such circumstances that the case was set down for trial. It would be undesirable for the court to let a party depart from his previous confirmation, especially at such late stage, unless there is a very good reason.

97.  I have considered the higher court’s approach in granting leave to a party to adduce further evidence on appeal as stated in Ladd v Marshall [1954] 1 WLR 1489:

“... ie further evidence is admissible on an appeal only where such evidence:

(i) could not have been obtained at the trial with reasonable diligence;

(ii) would or might, if believed, have a very important effect on the mind of the tribunal; and

(iii) is of a sort which inherently is not improbable.”

(See:  Hong Kong Civil Procedure 2014, Volume 1, paragraph 59/10/8)

98.  I believe the aforesaid factors should also be considered in an application for adducing evidence at a late stage such as the situation in front of me.

99.  Counsel for Ng informed me that their side got hold of the copy cheque from the bank on 22 January 2014 after the parties had closed their cases but before the court’s hearing of final submissions.  There was no suggestion that the same could not have been obtained well before the start of the trial.

100.  The copy cheque alone, if admitted by the court, would not shed much light to the case.  Liu’s case is that she never received the cheque from Ng.  There are remaining questions surrounding the cheque:

a. Did Liu receive the cheque?

b. Did Liu sign on the back of the cheque?

c. If Liu signed, why did she sign?

d. If Liu did not sign, who signed it?

e. Did Liu cash the cheque?

f. If it was not Liu, who cashed the cheque?

g. What are the bank’s usual procedures for cashing an uncrossed cheque?

h. Does the bank allow cashing of the cheque when it is not presented by the payee?

i. Why is the back of the cheque in the trial bundles blank but the copy sought to be adduced by Ng’s counsel bears a signature?

101.  There is not any evidence in front of the court in relation to (b), (c), (d), (e), (f), (g), (h) and (i).  These aspects were not covered in the witness statements and were not touched upon in the witnesses’ testimonies.  The cheque, if admitted, might shed further light only if the court also allows further witness statements to be filed and witnesses to be further examined and cross-examined.  Such a course was wholly undesirable at such late stage as it would certainly disrupt the trial process and prolong it.  I believe Ng’s counsel had underestimated the complexity of the issue when he submitted that it would only take his side one hour if he was allowed to reopen Ng’s case.

102.  To complete the whole picture, counsel for Liu also applied to adduce 8 pages of correspondence between Liu’s solicitors and Ng’s solicitors and HSBC regarding the cheque before the start of the trial.  Counsel for Ng at that time objected on the ground of lateness and irrelevance.  I refused the application.  Now, I fail to see why a different yardstick should be adopted for Ng’s application for reopening the case.

Conclusion

103.  In light of what I have said, I order that the plaintiff’s claim against the defendant be dismissed.

104.  Costs should follow the event.  I make a costs order nisi that the plaintiff is to pay the defendant the costs of this action, to be taxed if not agreed, with certificate for one counsel.  The costs order nisi shall become absolute in the absence of application to vary within 14 days.

105.  Lastly, I thank counsel for both sides for their assistance and thorough submissions.  The plaintiff’s counsel’s written submissions consisted of 20 pages and 5 authorities from decided cases and leading textbooks.  The defendant’s counsel’s written submissions consisted of 52 pages and 16 case authorities.  It is sufficient for me to say that their points had been duly considered before reaching my conclusion. It is unnecessary and counterproductive for me to set out each and every point taken by them.  I believe the above analysis sufficiently disposes the matter.