NGAI FEW FUNG v. CHEUNG KWAI HEUNG

HCMP 1186/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1186 OF 2006

____________

____________

____________

___________________________________

R E A S O N S   F O R   J U D G M E N T

___________________________________

1.  On 24 June 2008, after hearing evidence and submissions from the parties, I made an order for sale of the property known as Flat B, 12^th Floor, Tak Wai Building, No.25 Cheung Lok Street, Kowloon [“the Property”].  I also dismissed the Defendant’s Counterclaim.  The following are my reasons.

2.  The Property is held under the joint names of the parties.  The history of the dispute was set out in the judgment of Judge CB Chan in DCCJ 2331 of 2004 and the judgment of Deputy Judge Muttrie in this action on 13 February 2007.

3.  I have already explained in my Reasons for Decision of 22 May 2008 why the question of gift and the question of contribution cannot be relied upon by the Defendant in this trial.  If the Property were to be sold, subject to reimbursement of mortgage payments made by the Plaintiff since July 2006, a 50-50 distribution of the net sale proceeds is the agreed basis accepted by the parties in the Court of Appeal.  I do not see any unfairness to the Defendant in such approach bearing in mind what I had said in my said Reasons for Decision.

4.  Given the breakup of the parties since at least 2003, it is prima facie unfair that the Plaintiff should be locked into this co-ownership of the Property with the Defendant.  The Defendant had been using the Property as her residence since 1999 and despite the breakup, she has not been paying any occupational rent to the Plaintiff.  Moreover, the Plaintiff has been paying the mortgage payments of the Property without any reimbursement by the Defendant for quite some time.

5.  Given the nature of the Property, partition is obviously not beneficial to the parties and subject to the defence raised by the Defendant, an order for sale is the appropriate course.

6.  The only ground that can be relied upon by the Defendant to resist an order for sale is hardship.

7.  The Defendant said she would suffer hardship in terms of difficulty in finding alternative accommodation for herself and her son and her mother.  She said she could afford to continue with the mortgage payment to the bank and she should be allowed to live at the Property as long as she keeps up with such payment.  She also disputed the Plaintiff’s claim that the Property was purchased as an investment and there had been advertisements in the newspaper for sale of the Property.

8.  That assertion has to be tested against the following background,

(a)     According to valuation evidence before the court, the market price of the Property is at least $2.46 million (and the Defendant said it should have a higher value);

(b)    The outstanding mortgage is about $1.2 million.  After deducting that and reimbursement to the Plaintiff for the mortgage payments made since July 2006, the net balance is about $1 million.  Even after deducting costs of the sale, the Defendant would have got a substantial sum by way of her half share;

(c)     Whilst the half share might not be enough to enable the Defendant to purchase another property of the same size, she should not have difficulty in getting alternative rental accommodation comparable to the Property.  The market rental of the Property is about $12,500;

(d)    The Defendant is currently gainfully employed earning $13,500 per month;

(e)     The mother of the Defendant is a tenant at a public housing unit and before 2004, the Defendant and her mother lived there.  Even though the unit is now occupied by the Defendant’s sister, there is no reason why her sister should not contribute to the maintenance of the mother.

9.  In my judgment, the Defendant fails to discharge the onus of showing great hardship that is necessary to prevent an order for sale to be made.  To hold otherwise would in effect oblige the Plaintiff to continue with mortgage payments and payment of other outgoings related to the Property whilst he derives no benefit from the same.  Though the Defendant said she could pay, the past history shows that she has no incentive to do so and the burden has therefore fallen upon the Plaintiff.

10.  As regards the advertisements, the Defendant’s story is inherently incredible.  She said she asked the reporters to take photos of the Property so that she could have some beautiful photos for her memory.  I have no hesitation in rejecting that.  However, given the timing of the advertisements, they had little relevance to the issue that I have to decide.

11.  For these reasons, I made the order for sale in terms as discussed with parties on 24 June 2008.