NG HIU v. KAN KAM CHIU WILSON AND ANOTHER

H.C.A. No. 1299 of 1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO. 1299 OF 1997

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J U D G M E N T

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1. The Plaintiff is an old lady 84 years of age. She is the registered owner of a flat at Chan Man Court, Homantin, Kowloon ("the suit property"). The suit property is now occupied by the Defendants and their family. The Plaintiff claims in this action that the Defendants ought to deliver vacant possession of the suit property back to her. In their defence, the 1st Defendant ("D1") claims in essence that he was the beneficial owner of the suit property because he was the one who paid the purchase price and the suit property was registered in the Plaintiff's name without the intention of passing its title to her.

2. Background and Relationship of the Parties

3. The Plaintiff was married to a handicapped husband. She is and was illiterate. There are 5 children born of the couple:-

(a) Kan Kam Chuen (簡錦泉), the eldest son;

(b) Kan Kam Cheung (簡錦昌), the second son;

(c) D1, the third son;

(d) Kan Oi Kwan (簡愛群), the fourth daughter;

(e) Kan Kwan Ying (簡群英), the fifth daughter.

The husband was handicapped and apparently has been out of work a long time ago (the Plaintiff said since she was about 37 years old). Since about 1963, the family moved to a unit in a public housing estate in Ngau Tau Kok. The Plaintiff shouldered up the role of bread-winner and for that reason she has been in various jobs. In 1968, the husband finally passed away leaving the Plaintiff with 5 young children.

4. The "Chi Cheong Flat"

5. Apparently, the Plaintiff's family was not too well off by 1968. In about 1970, the Plaintiff rented a unit at 4B, 6th Floor, Chi Cheong Building, 2-4 Yee On Street, Kowloon, Hong Kong ("the Chi Cheong flat") and started to operate a children care centre there. It appears from the testimony that this was a kind of baby-sitting operation and the whole family helped the Plaintiff to run it. D1's testimony was that this was operated for about 1-1/2 years or so while the family was still living in Ngau Tau Kok.

6. In about 1973, the owner of the Chi Cheong flat told the Plaintiff that he wanted to repossess it; but he was also willing to sell it to the Plaintiff as an alternative. The Plaintiff decided to purchase the Chi Cheong flat. It is common ground that she borrowed money from friends to make up the down payment of $10,000. The rest of the price was paid for by mortgage. The Chi Cheong flat was registered in the name of D1 and the second son. According to D1, at about this time, the Plaintiff was running a sub-letting operation there.

7. It is a crucial issue in this action as to who in fact paid for the purchase price of the Chi Cheong flat. The Plaintiff's case was that the sub-letting operation generated enough income to pay for the loan from friends, the family expenses and the mortgage instalments. She also worked as an out-worker for toy factories during that time. D1 agreed that there was income from the sub-letting operation. He claimed, however, that that was consumed by the family expenses and it was he who paid for the mortgage instalments. The sub-letting was terminated sometime before 1982 and the Chi Cheong flat was sold in September, 1982 for $182,000. There is no direct documentary evidence showing the source of the payment of the mortgage instalments. This issue will have to be resolved by considering the credibility of the relevant witnesses.

8. The Suit Property

9. In September, 1978 (about 4 years before the sale of the Chi Cheong flat), the Plaintiff became the registered owner of the suit property for the price of $156,700. It is again common ground that the Plaintiff paid the deposit of $15,670 for the purchase of the suit property. The Plaintiff said the money came from her savings and the contributions by the other children (other than D1). From January, 1981 onwards (that is, about 21 months before the sale of the Chi Cheong flat in September, 1982), the suit property was mortgaged for the sum of $140,000 and therefore monthly mortgage instalments had to be paid to the mortgagee, Wayfoong Finance Limited since.

10. The banking documents showed that the monthly mortgage instalments ($1,420) were paid for by D1 (see the trial bundle at Part A, pp. 96-7 (bank cheques), pp. 122-58 (bank statements of H.K.S.B.) and pp. 162-67 (bank statements of S.C.B.)). The Plaintiff's testimony was that she paid D1 cash and asked him to issue cheques for her to pay the mortgagee. D1 claimed that the cheques were paid from his own money.

11. The documents again cannot give a definitive answer because they only disclose that funds were either deposited into or transferred to the accounts before cheques were issued. Whether these funds came from the Plaintiff or D1 will also have to be resolved by examining the witnesses' testimony.

12. As stated earlier, the Chi Cheong flat was sold in September, 1982. The Plaintiff's case was since she was its owner, she instructed D1 to use its sale proceeds to pay off the outstanding mortgage of the suit property. However, contrary to her instruction (and unknown to her until much later), he used them to pay off the mortgage of his own flat in Chi Fu Fa Yuen ("the Chi Fu flat"). D1's case was that the Plaintiff's share in the Chi Cheong flat did not extend beyond the $10,000 down payment which she paid. After the sale of the Chi Cheong flat, the Plaintiff's share was repaid to her. This consisted of a payment of $20,000 to her and a remittance of S$7,000 to the second son as she instructed. D1 contended that he was therefore entitled to use the balance of the sale proceeds as he wished.

13. The suit property was, according to D1, registered in the Plaintiff's name for no special reason except as requested by her. It was, however, not intended that the Plaintiff should become its true owner.

14. The Plaintiff testified that she was badly treated by D1, D2 and the Filipino maid when she was staying with them in the suit property and she left as a result. This was denied by the Defendants.

15. Credibility of Witnesses

16. The parties have agreed that there is no need for the original documents to be produced and I can refer to the copy documents in the trial bundle which were referred to by the respective witnesses during trial. Three witnesses testified: the Plaintiff and the 2 Defendants.

17. I find the Plaintiff to be a truthful and reliable witness. She was not shaken in cross-examination and she was adamant in the truth of her version. There might be minor inaccuracies in her testimony. However, I consider that these were only the result of her age and the lapse of time between the relevant incidents and the time of trial. In cross-examination, she agreed D1 might have given her money as early as in about 1968. Although D1 had done so, it does not mean that the Chi Cheong flat belonged to him and I rather consider he was, like the other children, only making contributions to the family expenses.

18. The only matter over which I have some reservation as to whether the Plaintiff's testimony should be wholly accepted was whether she was so mistreated by D1's family as she testified. She could be telling the truth or it could have been her subjective feeling. However, the reservation I have over this part of her testimony did not affect adversely my finding that otherwise she was an honest and reliable witness over the other material matters in her testimony. Further, the matter over which I have reservation is not crucial to the outcome of this action.

19. I do not find D1 to be a truthful or reliable witness. I do not propose to set out all the reasons for so finding but the main reasons were:-

(a) I do not accept his explanation as to why the Chi Cheong flat was registered in his name and that of the second son.

According to D1, this was done at the Plaintiff's request. D1 could not give any reason for such request. He said that even before the flat was purchased, it was known to everyone in the family that he would be the one responsible for paying all the mortgage instalments because the other siblings were not able to do so for one reason or another. Further, at that time he and the Plaintiff enjoyed a good relationship (in fact, this good relationship continued until about 1 to 2 years after his marriage in October, 1988).

These were denied by the Plaintiff who testified that she was lured into doing so by D1.

I find it implausible that the Plaintiff would ask that the Chi Cheong flat be registered in this manner for no apparent reason. I rather consider that this was done for the following reasons. First, while this property was hers, the Plaintiff was, at that time, already about 60. She was the only surviving parent (her husband having passed away some 5 years ago) and an illiterate. Secondly, the eldest son has by then already lived in Singapore; the second son and D1 were the only sons living in Hong Kong. I consider that the Plaintiff wanted them to be the registered owners so that (to use a term often used by traditional Chinese) the "family property" could be more easily passed on to the sons.

In view of the above, I accept the Plaintiff's version;

(b) it is even more implausible that the suit property was registered in the Plaintiff's name for the reason given by D1, that is, it was done merely as requested by the Plaintiff. According to him, the suit property belonged to him and both he and the Plaintiff were aware of that. Further, at that time, he enjoyed a good relationship with the Plaintiff. It must be remembered that the Plaintiff was illiterate and it would be very inconvenient to ask her to deal with the documents relating to and the financing of the suit property. There would have been every reason for D1 to use his name as the registered owner but none for using the Plaintiff's;

(c) I find that D1 was a careful and meticulous person. An example of this was the fact that every month when D1 paid the Plaintiff money for the family expenses (when the Plaintiff was staying in the suit property with D1's family), he did so by issuing his personal cheques to the Plaintiff. All these cheques were produced by D1 for use in this trial (trial bundle, Part A, pp. 168-207 and pp. 334-345). No particular reason was given as to why D1 did not pay cash to the Plaintiff instead. I certainly do not find any reason why family expenses paid to one's mother of old age needed to be paid by cheque and not by cash (which would be much more convenient for her). As he admitted in cross-examination, D1 did so in order to keep a record of these payments. With a person of such careful and meticulous character, it would be highly unlikely that D1 would allow the suit property to be registered in the Plaintiff's name when this property in fact belonged to him.

20. There is no basis for me to find the 2nd Defendant ("D2") not to be a truthful or honest witness. However, her testimony cannot assist me in deciding on the important issues of this action, that is, whether the Chi Cheong flat or the suit property was paid for by the Plaintiff or D1. She clearly did not have personal knowledge of these matters, having married D1 only in 1988. Having said so, I am unsure whether D2 was telling the truth when she claimed that neither she, D1 nor her maid maltreated the Plaintiff. It is quite possible that both the Plaintiff and D2 were holding onto their own views that it was the other party who was wrong. However, in view of my finding on D1's credibility, I am already able to decide in the Plaintiff's favour on the question of liability (the burden is on the Defendants to prove the defence relied upon). I therefore do not find it necessary to make a definitive finding on D2's credibility save to say that her testimony did not adversely affect my finding on the credibility of the material parts of the Plaintiff's testimony.

21. Findings of Facts

22. Based on the testimony which I accepted and the documents which were referred to in the trial, I came to the view that the material facts of this case were:-

(a) the Chi Cheong flat was purchased by the Plaintiff. This flat was only registered in the names of D1 and the second son because the Plaintiff felt that she was old and she wanted to be able to leave the flat to the two sons in Hong Kong in case she passed away. There was probably also the consideration that the Plaintiff was illiterate and it would be more convenient for the two sons' names to be used to deal with matters like documentation and financing;

(b) the suit property also belongs to the Plaintiff. The fact that the Plaintiff's name was registered as its owner is a very telling fact in the circumstances. Further, the sale proceeds from the sale of the Chi Cheong flat would have been sufficient to pay for the balance of the purchase price if D1 had not used them for his own purpose.

23. Conclusion

24. The Plaintiff has established her claim against the Defendants on liability.

(1) Plaintiff's Possession of the Suit Property

25. The only defence advanced by the Defendants was that the suit property in reality belonged to D1 and not the Plaintiff. Since I have already decided in the Plaintiff's favour on this point, there is no reason not to make an order for possession of the suit property, which she is entitled to as of right.

(2) Plaintiff's Claim for an Injunction Order

26. Because I have already made an order for possession of the suit property in the Plaintiff's favour, it is unnecessary to grant the injunction order asked for in paragraph (ii) of the prayer for relief of the Statement of Claim and no such order will be made. This prayer asked for an injunction to enjoin the Defendants from wrongfully occupying the suit property and from interfering with the Plaintiff's quiet enjoyment.

(3) Plaintiff's Claim for Mesne Profits

27. Paragraph (iii) of the prayer for relief of the Statement of Claim asked for mesne profits against the Defendants. However, no evidence was adduced by the Plaintiff as to what the market value, or fair market rental, of the suit property was during the material time. It was the Plaintiff's burden to adduce evidence to prove such damage and I therefore find that the Plaintiff has failed to discharge this burden.

28. When I raised this with Mr. Vaughan during his final submissions, he asked me to enter interlocutory judgment against the Defendant for damages to be assessed. There was no direction given (or sought by the Plaintiff until the point was raised) that the trial should be split on liability and quantum. I consider that there was no valid reason for affording the Plaintiff effectively a second chance to mend her case by acceding to Mr. Vaughan's request. Only a nominal damage of $100 will be awarded to the Plaintiff under this head of claim.

Costs Order Nisi

29. There is no apparent reason why a costs order nisi should not be made pursuant to R.H.C. Ord. 42 r. 5B(6). Further, there is no reason why costs should not follow the event. The costs of this action are therefore to be paid by the Defendants to the Plaintiff to be taxed if not agreed.

30. Since the Defendants are acting in person, I think it is better if I mention that pursuant to Ord. 42 r. 5B(6), they may apply within 14 days after this decision is pronounced to vary the costs order nisi, failing which it will become absolute.

(Andrew Chung)

Deputy Judge of the Court of First Instance