TAM SUI LIM WILLIAM v. FUNG HO

HCA 848/2015

[2023] HKCFI 1583

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 848 OF 2015

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JUDGMENT

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Introduction

1.  This is one of those cases between former cohabitees whose relationship has turned sour.

2.  The Action principally concerns the beneficial interest in a property situated at Flat 4 on 11/F of Block C (Golden Harmony Court), Golden Lion Garden Stage I, Nos. 5-7, Chui Tin Street, Shatin, New Territories, Hong Kong (“Property”) registered in the sole name of the Defendant. In his prayer for relief as fine-tuned in Ms Law’s Closing Submissions[1], the Plaintiff claims he is entitled to:

a.  A declaration that the Defendant holds 50% of the beneficial title of the Property on trust for him, on the basis of express or inferred common intention constructive trust.

b.  Alternatively, by virtue of resulting trust, the Defendant holds a portion of the beneficial interest in the Property on trust in favour of the Plaintiff in the percentages of either 39.11%, 66.49% or 70.75%.

3.  In the event that this court finds the Plaintiff is and at all material times was a beneficial owner of the Property, the Plaintiff further claims he has been unlawfully ousted from the Property by the Defendant since about 21 April 2015 (“Ouster”) and seeks a declaration to that effect. The quantum of the mesne profits and/or damages consequent upon the ouster will be assessed by a Master later as this is a trial on liability only.

4.  In the event that this court finds the Plaintiff has never had any beneficial interest in the Property, the Plaintiff claims he is entitled to an irrevocable licence granted by the Defendant for him to use and/or occupy the Property rent-free for the remainder of his life, under the doctrine of proprietary estoppel.

The parties’ case and the issues

5.  The Plaintiff was born in 1947. He was around 75 at the time of the trial. The Defendant is 21 years younger than the Plaintiff. She told this court she was 54 at trial. The Plaintiff was born in Hong Kong and had received education up to Form 5 standard. The Defendant originated from Mainland China and had not completed her primary education.

6.  The Plaintiff’s case is thus.

7.  The Plaintiff and the Defendant were colleagues when they got to know each other in or around July 2001. The Plaintiff worked in the management office of a housing estate in Kau To Shan, New Territories whereas the Defendant was a cleaner at the said housing estate. They then developed a romantic relationship shortly afterwards[2]. After the Plaintiff’s formal separation with his wife in around 2006, the Plaintiff and the Defendant decided to purchase a property jointly for the purpose of cohabitation. Eventually, the Plaintiff and the Defendant agreed to jointly purchase the Property at the price of HK$710,000.

8.  It was the common intention and/or agreement of the Plaintiff and the Defendant before the purchase of the Property that:

a.  The parties would each contribute 50% of the down payment of the purchase price.

b.  The balance of the purchase price would be funded by a mortgage loan from a bank.

c.  Since the Plaintiff already had another property registered in his name, the legal ownership of the Property would be in the sole name of the Defendant, who would hold the Plaintiff’s half share in the Property on trust for and on his behalf.

d.  The Plaintiff and the Defendant would cohabitate together in the Property and in any event the Property would not be sold because the Plaintiff would be allowed to reside in the Property for the remainder of his life.

(“Common Intention/Agreement”)

9.  It is undisputed that the Provisional Sale and Purchase Agreement dated 20 August 2006 (“PSPA”) and the Formal Sale and Purchase Agreement dated 4 September 2006 (“FSPA”) were all signed by the Defendant as purchaser and the Property was assigned to her by an Assignment dated 20 October 2006 (“Assignment”).

10.  While the PSPA and FSPA only provided for the payment of an initial deposit of HK$20,000 and a further deposit of HK$51,000 totalling HK$71,000 (or 10% of the purchase price), it is not in dispute that a total of HK$213,000 (or 30% of the purchase price) were made as down payment. The balance of the purchase price was funded by a mortgage loan (“Mortgage”) from the Hang Seng Bank Limited (“Bank”) in the sum of HK$497,000, representing 70% of the purchase price.

11.  In paragraphs 5, 6 and 8 of the Amended Statement of Claim (“ASOC”), the Plaintiff has pleaded a total of 5 detrimental reliance on the Common Intention/Agreement:

a.  The Plaintiff and the Defendant each paid half of the down payment of HK$213,000 ie HK$106,500.

b.  The Plaintiff executed a personal guarantee in favour of the Bank dated 20 October 2006 (“Guarantee”) to secure the Defendant’s obligations under the Mortgage.

c.  While the Defendant paid for the renovation of the Property, the Plaintiff paid all the maintenance and repair costs in respect of the Property.

d.  The Plaintiff was solely responsible for all the household expenses and outgoings, including but not limited to the management fees, utility fees and general maintenance costs up to May 2015, shortly after his Ouster.

e.  The Plaintiff has transferred cash ranging from around HK$3,000 to HK$5,000 per month to the Defendant’s account with the Bank regularly, as his payment of 50% of the monthly mortgage instalments.

(“Detrimental Reliance”)

12.  In relation to the Plaintiff’s payment of 50% of the monthly mortgage instalments, the Plaintiff slightly revised his case by pleading at paragraph 6(4) of the Reply that:

“(4) At the beginning after the purchase of the Property, the monthly mortgage repayments were shared equally between the Plaintiff and the Defendant. Later on, since the interest rates fluctuated, the monthly mortgage repayments increased in amount but the Defendant only paid about HK$4,000 at most every month (which was less than 50% of the monthly mortgage repayments) and the balance was repaid by the Plaintiff from his own financial resources every month...”

13.  It is further pleaded in paragraph 6(4) of the ASOC that after the purchase of the Property, there had been a number of conversations between the parties from time to time during which the Defendant promised and/or acknowledged that the Plaintiff would reside in the Property for the remainder of his life.

14.  The Plaintiff and the Defendant have lived in the Property since its purchase in 2006.

15.  Sometime in February 2015, the Defendant requested the Plaintiff to move out of the Property which the Plaintiff refused. The Plaintiff alleges the Defendant had entered into a romantic relationship with another man. The Defendant claims the Plaintiff had never said he would marry her and constantly criticized her look. Finally, the relationship deteriorated to such an extent that the Defendant told the Plaintiff she wanted to split up with him.

16.  In or about March 2015, the Plaintiff and the Defendant had a discussion regarding the disposal of the Property. During the said discussion, the Defendant proposed that the Property be sold but only agreed to give about 25% of the sale proceeds to the Plaintiff. The offer was rejected by the Plaintiff.

17.  On or about 21 April 2015, the Defendant locked the front door of the Property with a big chain on the gate and refused to let the Plaintiff enter it. Save for a short while on or about 22 April 2015 when the Plaintiff was allowed to remain in the Property to pack his personal items, he has been ousted from the Property since.

18.  The Defendant’s case has been succinctly summarized in Mr Chan’s Opening as follows:

a.  There has not been any common intention / agreement whereby the Defendant would hold half interest of the Property on trust for the Plaintiff.

b.  The Plaintiff had neither contributed 50% of the down payment of the Property nor 50% of the mortgage payments. The whole of the purchase price of the Property, including the down payment and mortgage payments, was paid by the Defendant.

c.  There was no agreement between the Plaintiff and the Defendant that the Plaintiff would be allowed to stay in the Property for the remainder of his life.

d.  The Plaintiff had paid the Defendant HK$5,000 per month as living expenses until the Plaintiff retired in 2011. Upon the Plaintiff’s retirement, it was the Defendant who gave the Plaintiff a monthly allowance of HK$1,000 and then increased it to HK$1,500 until January 2015 when the Plaintiff asked for HK$2,000 which the Defendant refused.

19.  It is further pleaded in paragraph 11 of the Amended Defence that:

a.  The Defendant in making the painful decision to split up with the Plaintiff and knowing the Plaintiff was retired and had no source of income, offered to give the Plaintiff HK$900,000 out of sentimentality for many years that she had been with the Plaintiff.

b.  The Plaintiff refused and said that he would sue the Defendant and make her go to prison.

20.  The Defendant had never had any alleged common intention and/or agreement with the Plaintiff ever. She only offered to give the Plaintiff part of the sale proceeds out of sentimentality.

21.  The following are the agreed issues in this case:

a.  Whether the Defendant holds any part of the beneficial title of the Property on behalf of the Plaintiff pursuant to any constructive trust and/or resulting trust? (“Issue 1”).

b.  If the answer to Issue 1 is “yes”, what is the percentage of beneficial ownership of the Plaintiff in the Property? (“Issue 2”)

c.  Whether the Plaintiff was unlawfully ousted from the Property by the Defendant since on or about 21 April 2015? (“Issue 3”)

d.  If the answer to Issue 3 is “yes”, whether the Plaintiff is entitled to mesne profits, damages for ouster, occupation rent and/or equitable compensation against the Defendant for her exclusive use of the Property since on or about 21 April 2015? (“Issue 4”)

e.  Further and/or alternative to Issues 1 and 2, whether the Plaintiff is entitled to rely on the doctrine(s) of proprietary estoppel and/or promissory estoppel[3] against the Defendant? (“Issue 5”)

f.  If the answer to Issue 5 is “yes”, what relief is the Plaintiff entitled to claim against the Defendant in relation to the Property? (“Issue 6”)

22.  At trial, the only two witnesses are the Plaintiff and the Defendant. The Plaintiff has filed 3 witness statements dated 27 July 2017, 24 May 2018 and 26 September 2022 (respectively “Tam 1”, “Tam 2” and “Tam 3”). The Defendant has filed 2 witness statements dated 28 July 2017 and 2 November 2022 (respectively “Fung 1” and “Fung 2”).

23.  Mr Chan rightly submits that the answers to Issue 1 and 2 are by and large fact dependent. Since the Plaintiff and the Defendant have given competing versions of what happened and what was said at the material times, this court should explain at the outset that its approach, as always, is to consider the testimony of the witnesses and assess it against inter alia the contemporaneous documentary evidence and the known and undisputed circumstances of this case. This court would in particular consider the inherent probabilities or otherwise of the witnesses’ testimony and assess their credibility accordingly in order to come to its findings of fact. This court would also take note of the well-established general approach on fact-finding and assessment of credibility as summarised in, for instance, Hui Cheung Fai v Daiwa Development Limited unrep, HCA 1734 of 2009, 8 April 2014, DHCJ Eugene Fung SC at [77] - [83]. The approach is really all common sense but it is perhaps worth reminding oneself of the following:

a.  Contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility.

b.  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.

c.  In determining a witness’ credibility, it is also important to have regard to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence, which is to be tested by a comparison between the witness’ oral testimony and his witness statement.

24.  For reasons to be explained below in analysing the material issues, this court does not find the Plaintiff a forthcoming or reliable witness. Rather, this court finds the Defendant is an honest and truthful witness, notwithstanding Ms Law’s attack on her credibility.

Deliberation

Issues 1 and 2: Common Intention Constructive Trust/ Resulting Trust

25.  The relevant legal principles are not in dispute.

26.  The starting point where there is sole legal ownership is sole beneficial ownership, and the onus is on the non-owner to show that he has any interest at all: Stack v Dowden [2007] 2 AC 432 at [56].

27.  In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327 at [2.3] - [2.4], Cheung JA identified two situations where a common intention constructive trust may arise.

“2.3 The first situation where common intention constructive trust may arise is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially.

2.4 The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. …”

28.  At [1.6], Lam VP (as he then was) emphasised that the modern approach to constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context. Further, as between resulting trust and constructive trust, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust: per Lam VP at [1.3].

29.  In Liu Wai Keung v Liu Wai Man at [46]‑[50], G Lam J (as he then was) further elaborated on the elements that a party must prove in order to establish a constructive trust in his favour:

“46. The focus of the inquiry is therefore on the elements that the plaintiff has to prove in order to establish a constructive trust in his favour. In the context of this case, this means that the plaintiff must prove (i) there was a common intention between him and the defendant that the plaintiff was to be the beneficial owner of the Property despite that it was acquired in the defendant’s name; (ii) the plaintiff altered his position in detrimental reliance upon such common intention; and (iii) it is unconscionable for the defendant to assert ownership in reliance on her legal title to the Property.

47. In ascertaining whether there was a common intention, it is the objective intention of each party ‘which was reasonably understood by the other party to be manifested by that party’s words and conduct’ that one must examine: Gissing v Gissing [1971] AC 886, 906; Jones v Kernott [2012] 1 AC 776, 794 [51].

48. In the present case it is the parties’ common intention at the time of the acquisition of the Property that is relevant, there being no suggestion from anyone that the intention had changed.

49. Such intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the property concerned based on evidence of express discussions. It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention: Lloyds Bank Plc v Rosset [1991] 1 AC 107, 132‑133.

50. Even where, as in this case, reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested.” (emphasis added)

30.  A resulting trust arises under two circumstances.

31.  In Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 708A‑D, Lord Browne‑Wilkinson set out the law in these terms:

“Under existing law a resulting trust arises in two sets of circumstances: (A) where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter‑presumption of advancement or by direct evidence of A’s intention to make an outright transfer … (B) Where A transfers property to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest ... Both types of resulting trust are traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention.”

32.  When there is sufficient evidence on actual intention at the time of the transaction, there is no room for the operation of presumption of resulting trust: Yuen Yat Shan Fiona v. Sit Hin Kai [2005] 4 HKC 170 at [20] (per Tang JA, as he then was).

33.  Since the onus is on the Plaintiff to show that he has any beneficial interest in the Property at all, this court should first examine the evidence he puts forward in support of his principal case of Common Intention Constructive Trust and if necessary, his fallback position of resulting trust.

34.  First, the Plaintiff’s alleged reasons for the Common Intention/Agreement that the Defendant would be the sole legal owner of the Property but would hold half share on behalf of the Plaintiff.

35.  In Tam 1, the Plaintiff said this:

“6. In around August 2006, through an agent, Ms. Fung and I were satisfied with a unit, Room 4, 11/F, Flat C, Golden Lion Garden, Shatin, New Territories (hereinafter called “the Property”), which is the subject unit in this case. At the time of the assignment[4] of the Property, the divorce proceedings between my ex-wife and I had not been completed, and meanwhile, I already held another property. Therefore, as discussed between Ms. Fung and me, we would each pay half of the down payment of the Property, and the Property would be mortgaged to bank. The Property would be nominally be held by Ms. Fung as the sole owner, but our decision at that time was that she shall hold half share of the proprietary interest of the Property in the form of trust for me.” (emphasis added)

36.  Thus, essentially, 2 reasons were given by the Plaintiff for the trust arrangement ie (i) there were on-going divorce proceedings between him and his ex-wife which had not yet been completed and (ii) he was holding another property.

37.  The first reason is factually incorrect. According to paragraph 4 of Tam 1, there were never any divorce proceedings between him and his wife. This fact was confirmed by the Plaintiff in cross-examination. Para 4 of Tam 1 stated:

“4. In around July 2001, working as an estate security guard, I met the Defendant Ms. Fung in an estate in Kau To Shan. Soon after meeting her, we had a romantic relationship. At that time, although my wife and I had lived apart for years, we never initiated any divorce proceedings.” (emphasis added)

38.  The first reason is not even pleaded in the ASOC. At paragraph 4(3), the Plaintiff only said:

“(3) Since the Plaintiff already had another property registered in his name, the legal ownership of the Property would be in the sole name of the Defendant, who is to hold the Plaintiff’s half share in the Property on trust for and on behalf of the Plaintiff…” (emphasis added)

39.  The second reason, which is pleaded, is a complete non sequitur. The fact that a person is holding another property does not explain why he cannot be a joint owner of a different property - it does not even explain why it is preferable for him not to be a joint owner of that different property.

40.  Thus, the Plaintiff’s case of Common Intention/Agreement has gone off with a bad start - he cannot even give a factually correct, honest and logical reason for its existence. Thus, this court has no difficulty rejecting the reasons given by the Plaintiff for the Common Intention/Agreement.

41.  Second, the Plaintiff’s alleged contribution of half of the down payment of the purchase price[5] in accordance with the Common Intention/Agreement.

42.  It is common ground that the Property was purchased at the price of HK$710,000, out of which HK$497,000 or 70% was covered by a mortgage loan from the Bank. The down payment was thus 30% of HK$710,000 ie HK$213,000. Half of the down payment would be HK$106,500. In Ms Law’s Executive Summary at para 9(1), she submits that the distinct timing and amount of the Plaintiff’s payments of HK$71,000 and HK$35,000 (totalling only HK$106,000 rather than HK$106,500) to the Defendant show the 2 sums were clearly the Plaintiff’s contribution to 50% of the down payment.

43.  As Mr Chan rightly points out in his Closing, Tam 1 is supposed to set out all the evidence in support of the Plaintiff’s pleaded case. Yet, the Plaintiff had failed to even explain when and how he had paid his half share of down payment at all. There is also no reference to any contemporaneous documents which supports his case that he had paid his half share of the down payment. Mr Chan submits it is highly incredible that the Plaintiff did not adduce any evidence on down payment in Tam 1 to prove his own case. Rather, the first time the two sums of HK$71,000 and HK$35,000 were mentioned was in Fung 1 at paras 25-27. In those paras, the Defendant was very clear that HK$71,000 were to pay for renovation and HK$35,000 were to purchase bed and furniture. At para 27 of Fung 1, the Defendant said:

“27. The aforesaid HK$71,000 and HK$35,000 were given to me by the Plaintiff as a gift. The Plaintiff gave me the said money because we were in a close couple relationship and he had to take care of me. He has never told me to return the said money to him, nor did he say that the money was used for his purchase of the Property.” (emphasis added)

44.  What is more incredible is what the Plaintiff said, or rather did not say, in Tam 2[6] after he had been shown Fung 1.

45.  At para 4 of Tam 2, the Plaintiff said:

“After reading the Witness Statement of the Defendant, I think that several parts are not the truth, and I must set out my reply in this Supplemental Witness Statement…”

46.  At para 8 of Tam 2, the Plaintiff specifically contradicted the Defendant’s claim in Fung 1 that she solely paid 30% of the purchase price of the Property.

47.  Then, crucially, at paras 9 and 11 of Tam 2, the Plaintiff only mentioned after he had sold some shares, he paid HK$71,000 to the Defendant said to represent 10% of the purchase price of the Property. There was no mention of the HK$35,000 at all.

48.  This is what the Plaintiff said in paras 9 and 11:

“9. In fact, before the payment of the down payment of 30% of the purchase price, the Defendant sold her previous house in Guangzhou, and I sold my stocks in Hang Seng Bank. On that day[7], the Defendant and I went to Hang Seng Bank together. I sold the stocks I held on two separate days, and then passed HKD71,000 to the Defendant. The Defendant and I also went to Tam & Partners Solicitors together to settle the down payment.

…

11. In fact, from the bank statements admitted by the Defendant… my payment of HKD71,000 was precisely 10% of the purchase price of the Property at that time. This showed that, I paid part of the purchase price in accordance with parties’ agreement.” (emphasis added)

49.  In fact, what the Plaintiff said in para 9 of Tam 2 is factually incorrect. As shown from the table below in Ms Law’s Closing, the Defendant had paid the HK$71,000 to the vendor/ vendor’s solicitors by early September 2006, long before the Plaintiff’s cheque of HK$71,000 was deposited in her bank account on 16 October 2006.

50.  Lastly, in Tam 3, made less than 3 months before trial, he chose not to say a word about the HK$35,000 or how else the remainder of his alleged contribution to down payment was made. This is again extraordinary given what he said at para 4:

“I perused the documents of this case in detail again. Upon legal advice and my thorough consideration, I hope to supplement some information in relation to this case in this 2^nd Supplemental Witness Statement, to assist the Court at trial.” (emphasis added)

51.  The Plaintiff’s failure is extraordinary in light of the fact that in paragraph 5 of her original Defence filed as early as November 2015, the Defendant had already denied the Plaintiff had paid his alleged half share of the down payment of the purchase price. The Plaintiff’s failure to adduce evidence in support of his own case and to contradict the Defendant’s case in this respect is highly damaging to his credibility as a witness.

52.  As pointed out by Mr Chan, it was only during the Plaintiff’s examination in chief in the afternoon of Day 1 that he mentioned anything about the HK$35,000 he paid to the Defendant. But the context of that revelation is important.

53.  During the Plaintiff’s oral top-up examination in chief, he did not go straight to add that he had actually paid another HK$35,000 to the Defendant as the supposed balance of his contribution to his half share of the down payment. Instead, the Plaintiff was referred to para 26 of Fung 1 in which the Defendant mentioned a sum of HK$35,000 was given by the Plaintiff to her on 6 December 2006 for the purchase of bed and furniture. The words used by the Defendant in Fung 1 were:

“26. Furthermore, on 6^th December 2006, the Plaintiff gave me HK$35,000. That was because right after renovation, there was no bed nor other furniture at the house, the Plaintiff therefore gave me a further HK$35,000 to buy a bed and furniture etc.”

54.  The Plaintiff then said he disagreed with what was stated in that paragraph and for the first time stated it was meant to be the remainder of his half share of the 30% down payment ie HK$106,500.[8]

55.  This is again extraordinary. Fung 1 was dated 27 July 2017. Since then, the Plaintiff has filed 2 supplemental witness statements in 2018 and 2022. But it was not until the first day of trial on 6 December 2022 that the Plaintiff suddenly remembered that the HK$35,000 were not for bed and furniture, but as the balance of his contribution to the down payment.

56.  In fact, the Plaintiff had never satisfactorily explained his aforesaid failure to reveal and explain the HK$35,000 when asked about it in cross-examination or re-examination. Given the materiality of the HK$35,000 as part of the Plaintiff’s contribution to his share of the down payment pursuant to the Common Intention/Agreement, this court is firmly of the view that the credibility of the Plaintiff is highly questionable.

57.  In Ms Law’s Closing, she submits that the Defendant has admitted the Plaintiff paid her HK$71,000 on 16 October 2006 and HK$35,000 on 6 December 2006 by reference to inter alia Fung 1. That is true as far as it goes but it does not assist the Plaintiff since it is clearly stated in Fung 1 that (i) the HK$71,000 were to pay for the renovation costs of the Property and (ii) the HK$35,000 were to pay for bed and furniture.

58.  Ms Law then further submits that the the distinct timing and amount of the Plaintiff’s payments as contribution to 50% of down payment reveal that the Defendant’s case is plainly inherently improbable. At paragraph 63 (1) of her Closing, Ms Law prepared the following table in support of her submission:

Date	Events	Reference
20.8.2006	Provisional Agreement for Sale and Purchase of the Property. Initial Deposit of HK$20,000 paid to the Vendors.	B/194
02.9.2006	Final Deposit of HK$51,000 transferred to Messrs Tam & Partners	B/211-222
04.9.2006	Agreement for Sale and Purchase of the Property	B/214
04.10.2006	Letters from HSB to P confirming sale of the Shares, the total amount being HK$119,935.45	B/295-298
16.10.2006	D deposited P’s cheque to D in the sum of HK$71,000	B/197
18.10.2006	Messrs Tam & Partners receipt of HK$146,640 (HK$142,000 being the remainder of the down payment)	B/340-341
20.10.2006	Assignment of the Property at HK$710,000	B/343
06.12.2006	P gave HK$35,000 to D	B/199

Legend

The orange rows refer to the payments by the Defendant.

The yellow rows refer to the payments by the Plaintiff to the Defendant.

59.  Based on that table, Ms Law then submits at length on the inherent improbabilities of the Defendant’s allegations that the HK$71,000 were paid for renovation and that the HK$35,000 were paid for bed and furniture.

60.  This court disagrees.

61.  As this court sees it, the table shows the Defendant was able to pay for the initial deposit of HK$71,000 out of her resources (either her own funds or borrowed money) before the Plaintiff’s payment of HK$71,000 to her, which took place more than a month later. Similarly, the Defendant was able to pay the balance of the down payment in the sum of HK$142,000 on 18 October 2006, before the Assignment and well before the Plaintiff’s payment of HK$35,000 to her in December 2006. This is so despite the Plaintiff’s allegation that the Defendant did not have the means to purchase the Property on her own, given her estimated monthly salary of HK$9,000 odd: Tam 1 at paragraph 8.

62.  In this court’s view, the table actually supports the Defendant’s case as a matter of inherent probabilities. Accepting that the Defendant had a rather low paid job, after spending her savings and/or borrowings to purchase the Property, it was not unnatural for her to resort to the Plaintiff to pay for the renovation and the purchase of bed and furniture in order to render the Property in a habitable condition. After all, he was going to live there too and it was inherently probable that the Plaintiff was expected to pay for them.

63.  If the Defendant’s financials had been as dire as the Plaintiff seeks to depict, she would have needed the HK$71,000 and HK$35,000 from the Plaintiff before rather than after she had made the down payment for the Property in order to complete the transaction.

64.  For all the above reasons, this court rejects the Plaintiff’s evidence and finds as a fact that he had not contributed his half share of the down payment pursuant to the alleged Common Intention/Agreement. Rather, this court accepts the Defendant’s evidence that the HK$71,000 and HK$35,000 from the Plaintiff were for the purpose of renovation and the purchase of bed and furniture.

65.  Third, the Plaintiff’s alleged contribution of half of the monthly mortgage repayment to the Bank in accordance with the Common Intention/Agreement. As shown in the letter dated 22 September 2006 from the Bank to the Defendant, the term of the mortgage loan was 5 years and the monthly mortgage payment was around HK$9,459. This is borne out by the Defendant’s bank account passbook for the month of November 2006 when exactly HK$9,459 was debited from her account. Since interest rate fluctuated, for instance, the Defendant’s bank account passbook shows a sum of HK$9,402.80 was debited on 21 December 2006 and 22 January 2007 respectively as mortgage repayments.

66.  The Plaintiff’s case on mortgage repayment is pleaded at para 8 of the ASOC.

“Since the purchase of the Property, the Plaintiff transferred cash ranging from around HK$3,000 to HK$5,000 per month to the Defendant’s bank account in Hang Sang Bank with the number 255-4-026589 regularly, as his payment of 50% of the monthly mortgage repayments to Hang Seng Bank.”

67.  In para 10 of Tam 1, the Plaintiff further elaborated on this:

“During our cohabitation, Ms. Fung would pay me around HKD1,000 as meal and household expenses. Since I was a chef of Chinese cuisine, I was responsible for most of the cooking. Meanwhile, I would pay Ms. Fung HKD4,000-5,000 for the repayment of the mortgage. From time to time, when Ms. Fung was in financial needs, she would borrow money from me, and I would thereby deduct the same amount from my mortgage repayment to her.” (emphasis added)

68.  To start with, the Plaintiff had failed to come up with any contemporaneous documents to prove his case that he had actually paid HK$4,000 to HK$5,000 to the Defendant each month. The Plaintiff’s evidence consists of deposit slips showing his deposits into the Defendant’s bank account at the material time. As far as this court can tell from the deposit slips, they do not support the Plaintiff’s case of paying HK$4,000 to HK$5,000 to the Defendant each month. Instead, the deposit slips show quite haphazard deposits of anything between HK$200 on 20 August 2007 to HK$8,000 on 4 May 2008.

69.  The deposit slips do not even show the Plaintiff had deposited money into the Defendant’s bank account every month from November 2006 until the discharge of the Mortgage at the end of 2011. This is to be contrasted with para 9 of Tam 3 in which he said:

“9. Items 20(1) to 20(27) of the Plaintiff’s 2^nd SLOD are most of the deposit records/deposit slips of my deposit of mortgage repayment into the Defendant’s account each month. Some deposit slips are faded out due to lapse of time, it is difficult to read the content of the said deposit slips, I therefore did not put those deposit slips in the Plaintiff’s List of Documents and present to court. However, from the deposit slips enumerated in the Plaintiff’s 2^nd SLOD, it can be observed that I deposited money into the Defendant’s account monthly, mostly are on the 16^th to 20^th day of each month.” (emphasis added)

70.  What the Plaintiff said in para 9 of Tam 3 is not borne out by the deposit slips at all.

71.  Further, there are no contemporaneous documents evidencing the Defendant’s alleged borrowings from the Plaintiff or the amounts thereof for the purpose of deduction, for instance a notebook recording the date and amount of the borrowings. In this court’s view, the Plaintiff’s allegation that the Defendant had borrowed from him from time to time is just a convenient excuse for the lack of evidence to prove his case that he had paid HK$4,000 to HK$5,000 to the Defendant each month as his share of the mortgage payments.

72.  According to the Table 1 prepared by Ms Law at this court’s request, the first payment by the Plaintiff to the Defendant’s bank account was a sum of HK$1,000 on 7 March 2007. The next payment by the Plaintiff to the Defendant’s bank account was a sum of HK$2,500 on 17 March 2007. No payment was shown to have been made by the Plaintiff from April to June 2007. The next payment by the Plaintiff to the Defendant’s bank account was a sum of HK$1,900 on 22 July 2007.

73.  As per Table 1, the total amount paid by the Plaintiff to the Defendant’s bank account which is vouched for by the contemporaneous documents only comes to HK$105,566. This is far from half of the mortgage loan of HK$497,000.

74.  In her Note 1 to Table 1, Ms Law explains that:

“Note (1): This table does not set out all of P’s contribution to D’s payment of monthly mortgage instalment. First, it is the unchallenged evidence of P that not all deposit slips have been adduced as evidence because the content of some of these slips have faded out due to lapse of time. It is therefore difficult to read the content therein [A/132-133/§9]. Secondly, the funds transferred by P to D vary every time because, based on P’s evidence, the sums transferred were occasionally reduced in order to set off against the sums owed by D to P. In any event, it remains D’s pleaded case that P continuously paid HK$5,000 to D until 2011. [A/31/§5(f)-(g)].”

75.  In essence, what Note 1 boils down to is that the Plaintiff has failed to come up to proof.

76.  It is futile for Ms Law to refer to the Defendant’s pleaded case at paras 5 (f) and (g) of the Amended Defence that the Plaintiff paid her HK$5,000 continuously until 2011 when the Plaintiff retired. According to the Defendant’s case, the HK$5,000 were for living expenses - there is no admission by the Defendant that the Plaintiff had paid HK$5,000 a month for his alleged share of mortgage repayment.

77.  It is true that in Fung 1 at para 29, the Defendant appeared to accept that the Plaintiff had consistently paid her HK$5,000 every month as household expenses to pay for meals. Other than that, the Plaintiff had also paid for the management fees, renovation fees and utilities expenses. However, in Fung 2, the Defendant realised, after seeing the Plaintiff’s deposit slips and comparing them with her own bank passbook, that the Plaintiff had not even paid the monthly HK$5,000 that he promised.

78.  In Tam 1, the Plaintiff has emphasized the Defendant could not possibly afford to purchase the Property with her own resources. In Tam 3, the Plaintiff has set out at length his financial resources notwithstanding the fact that he was earning only HK$8,350 a month as security guard in 2006. This is what the Plaintiff said in Tam 3:

“13. In 1967, I was at the age of 18 and was employed by “King Wai Mo Fong Chong” [Transliteration], one of the largest woolen mills in Hong Kong at the time. Since then, I worked in that company for around 16 years. During my employment, in around February 1977 when I was aged 29, I purchased Flat G on 29/F and Flat Roof, Hiu Wah Building, Nos.42-44 Hiu Kwong Street, Kowloon (hereinbelow called “Hiu Wah Flat”) at the purchase price of HK$78,030. Hiu Wah Flat is my first property. Item 24 of the Plaintiff’s 2^nd SLOD is the land search record of Hiu Wah Flat. Apart from this, I also purchased some stocks at that time, life was blissful.

14. Later, in around 1988 to 1996, I worked in a dye house. During this period, my annual salary was around HK$200,000, my annual saving could reach HK$100,000. During this period, I purchased a flat of around 1,000 sq. ft. in Longtu Garden in Dongguan, China (hereinbelow called “the Mainland Property”). Before the outbreak of Coronavirus in 2019, I often lived in the Mainland Property, for a short period of time every time. Until later the outbreak of Coronavirus, due to different quarantine measures, I lived there once a year.

15. In 1984, my wife and I (despite living separately, we did not get divorced formally) went to Japan and Taiwan for marriage. Later, after our daughter was born in 1987, I purchased Flat 4 on 24^th Floor of Block H, Hiu Lai Court, No.21 Hiu Kwong Street, Kowloon (hereinbelow called “Hiu Lai Flat”) with my wife at the purchase price of HK$1,122,100. Item 25 of the Plaintiff’s 2^nd SLOD is the land search record of Hiu Lai Flat.

16. After moving to Hiu Lai Flat with my wife and daughter, I leased out Hiu Wah Flat, the monthly rental increased from HK$4,500 at the beginning to HK$8,000 later. Item 22 of the Plaintiff’s 2^nd SLOD is a tenancy agreement of Hiu Wah Flat in 2013.

17. Till now, the aforesaid Hiu Wah Flat and the Mainland Property are still owned by me, and Hiu Lai Flat is still owned by me and my wife who lived separately with me for many years as joint tenants.

18. As regards my employment as a security guard, my monthly salary in 2006 was around HK$8,350, until around HK$10,814 in 2012. Please refer to item 15 of the Plaintiff’s 2^nd SLOD.”

79.  If the Plaintiff were as well off as he claims, in order to persuade the Defendant to cohabit with him without any promise of marriage, it is inherently probable, and this court shall so find, that the Plaintiff had promised to and did pay for the renovation, bed and furniture, as well as some living expenses in order to sustain their relationship.

80.  To conclude, this court has no doubt that the Plaintiff has failed to prove his bare assertion that he had contributed half of the monthly mortgage repayment to the Bank in accordance with the Common Intention/Agreement. Instead, this court is satisfied and finds as a fact that whatever amount the Plaintiff had paid to the Defendant, as evidenced by the deposit slips and the Defendant’s bank passbook, it was for the couple’s living expenses, as per the Defendant’s case.

81.  For completeness, Ms Law has placed emphasis on the fact that Counsel for the Defendant had failed to cross-examine the Plaintiff on a number of material parts of his evidence and that the court is invited to treat such failures as the Defendant’s acceptance of its truth under the rule of Browne v Dunn (1893) 6 R 67. Those so-called material parts include inter alia (i) the reason why the Plaintiff agreed to execute the Guarantee as part of his alleged detrimental reliance; (ii) the Plaintiff’s payment of the maintenance and repair costs as part of his alleged detrimental reliance; (iii) one of the reasons leading to parties’ decision to form the Common Intention/Agreement was because the Plaintiff already had another property registered in his name; (iv) the Defendant lacked the financial means to fund the monthly mortgage repayments without the Plaintiff’s regular contribution; and (v) the Plaintiff was responsible for meals and household expenses during the parties’ co-habitation.

82.  In this court’s view, Ms Law’s reliance on Browne v Dunn shows how desperate the Plaintiff is in relation to his claim for half of the Property which, as this court has found, he has failed to come up to proof.

83.  In Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605, 623 at [43] and fn [27], Stock NPJ stated:

“Put broadly, the principle in Browne v Dunn is that where a party intends to impeach the credibility of a witness on a material point, that party is bound to challenge the witness in cross-examination so as to give the witness an opportunity of making any explanation open to him; failure to do so may be taken as an acceptance of his evidence. But there are cases “in which [notice of the challenge] has been so distinctly and unmistakably given and the point upon which he is impeached, or is to be impeached, is so manifest, that it is not necessary to waste time in putting questions to him upon it” (emphasis added)

84.  In the present case, the Defendant’s notice of challenge to the Plaintiff’s case of the alleged Common Intention/Agreement and his alleged detrimental reliance thereof were evident as early as the original Defence filed in November 2015. It is also fairly put in Mr Chan’s Opening, as quoted above. It is clear to this court, and no doubt to Ms Law, that it is not necessary to waste time in putting questions to the Plaintiff upon these so-called material parts of his evidence. The truth is the Plaintiff knew full well that his case of the alleged Common Intention/Agreement or his alleged detrimental reliance is disputed.

85.  Lastly, this court does not place heavy weight on the Defendant’s offers of money to the Plaintiff to persuade him to leave the Property. It is not uncommon that one party to a relationship which turns sour to offer money to the other in order to end it and the present case is the same. For the reasons given above, this court has rejected the Plaintiff’s case on the alleged Common Intention/Agreement or his alleged detrimental reliance. The fact that the Defendant has offered some money to the Plaintiff to persuade him to leave the Property is consistent with the Defendant’s case.

86.  In conclusion, this court does not find the Plaintiff a truthful witness. In relation to Issues 1 and 2, this court finds that the Plaintiff has failed to prove (i) the Common Intention/Agreement or (ii) he has made the alleged financial contribution towards the purchase of the Property to support his case of purchase money resulting trust. The Plaintiff’s claim of common intention constructive trust or resulting trust thus fails.

Issues 3 and 4

87.  Given that the Plaintiff has no beneficial interest in the Property, these issues do not strictly arise. For completeness, this court finds that the Plaintiff was not unlawfully ousted from the Property by the Defendant and he is not entitled to any mesne profits, damages for ouster, occupation rent and/or equitable compensation whatsoever from the Defendant.

Issues 5 and 6

88.  In para 6(4) of the ASOC, the Plaintiff pleaded that after the purchase of the Property and pursuant to and/or in detrimental reliance on the Common Intention and/or Agreement, there had been a number of conversations between the parties from time to time during which, inter alia, the Defendant promised and/or acknowledged that the Plaintiff would reside in the Property for the remainder of his life.

89.  Given this court’s view that the Plaintiff is not a truthful witness and its finding that there was no alleged Common Intention and/or Agreement or any detrimental reliance in reliance thereof, the answer to Issues 5 and 6 should be self-evident.

90.  In Tam 1 at para 7, the Plaintiff stated that:

“Since we considered that the Property was for our cohabitation, we discussed and agreed not to sell the Property until either Ms. Fung or I pass away.” (emphasis added)

91.  To start with, that proposition at Tam 1 is a complete non sequitur. Even if the Property was for the purpose of cohabitation, it is difficult to see why it cannot be sold, because for instance the parties had decided to split, which is what actually happened.

92.  Further, during cross-examination on Day 1, it was put to the Plaintiff that there was no agreement between him and the Defendant about not selling the Property until either of the parties died. The Plaintiff frankly accepted that while they did discuss about it, there was no agreement that he was allowed to reside in the Property until he died. In other words, the Defendant never represented to or assured the Plaintiff not to sell the Property or to allow him to live there until he passed away.

93.  In these circumstances, the Plaintiff has simply failed to establish his case of proprietary estoppel.

94.  Issues 5 and 6 shall be decided against the Plaintiff.

Disposition and costs order nisi

95.  The Plaintiff’s claim is hereby dismissed.

96.  There shall be Judgment in favour of the Defendant together with costs of the Action on a nisi basis, to be taxed if not agreed, and paid forthwith, certificate for counsel.