TAI CHAN LAI KWAN v. TAI YUK KI

DCMP 1556/2002

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 1556 OF 2002

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JUDGMENT

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1. The Plaintiff took out an originating summons under the Partition Ordinance Cap. 352 and applies for an order of sale of the former matrimonial home registered in the joint names of herself and the Defendant.

2. The Defendant is opposed to the application. He further filed a Defendant's notice and counterclaim on 8th November 2002 for a declaration that the property was held jointly on trust for the Defendant absolutely, and he seeks an order of transfer to the Defendant's sole name. He claims that the Plaintiff made no contribution towards the purchase of the former matrimonial home at Flat 6, 6/F, Block B, San Shun House, San Wai Court, 23 Tin King Road, Tuen Mun, N.T. (hereinafter referred to as "the property").

Background

3. The background leading to the purchase of the property is set out in paragraph 8 the Defendant's 3rd affirmation affirmed on 9 September 2002.

4. The Plaintiff and Defendant were married on 19 April 1985. They lived in a village hut owned by the Defendant's father in Taan Kwai Village, Hung Shui Kiu in Yuen Long, N.T. It was targeted for demolition by the Hong Kong Government in 1988. They were given the option to be resettled in a public housing estate or to purchase a flat under the Home Ownership Scheme (HOS) without having to go through the balloting process. The Defendant decided to opt for the purchase of a HOS flat. Consequently, the parties entered into an agreement for sale and purchase with the Hong Kong Housing Authority on 10 March 1989 for the purchase of the property for $317,700.00. A deposit of $15,900.00 was paid at the time of the signing of the said agreement. The balance of purchase price was financed by a Hong Kong and Shanghai Bank 20 year home loan of $301,800.00, borrowed in the names of both the Plaintiff and the Defendant. The Hong Kong Bank further granted a 3 years decoration loan of $15,000.00 to the parties in November 1989.

5. The parties lived in the property until sometime in 1992. Divorce decree nisi was granted on 13 April 1993 on the parties' consent based on 2 year separation.

6. According to the Court order, the question of maintenance was adjourned to chambers on a date to be fixed, the hearing never took place. The divorce was made absolute on 5 January 1994.

7. Mortgage repayments were debited from the parties' joint bank account at the Hong Kong Bank from 1989 until 1 March 1995 when the Defendant transferred and substituted repayments from an account in his sole name.

8. The Plaintiff did not restore the maintenance hearing in the family court, neither did she get any maintenance from the Defendant since their divorce.

The Plaintiff's case

9. The Plaintiff filed three affirmations in support of her application. She claimed that the Defendant and she started to cohabit shortly after they met in 1983. She was aged 17 and he was 23. They got married in 1985.

10. In 1984, the Defendant had persuaded her to work as a prostitute. She claimed she agreed because she was told he was in deep trouble over his debts and his family would be harmed if his debts were not paid. She said she had agreed to work as a prostitute in order to get him out of trouble. Seven to eight months later, she was persuaded to work as a dance hall hostess because it would bring in a better income. She had been working as a hostess in various night clubs in Tsim Sha Tsui and Mongkok since then until 1996.

11. She claimed that the Defendant threatened to tell her relatives if she refused to carry on working as a dance hostess. She further claimed that he would take all her earnings from her, leaving just a small sum for her own use. That he would made her borrow from her boss an advancement of salary from time to time. She claimed that one of such incident was the down payment for the property in 1989, another such incident was in 1989 when he operated a fashion shop in Shenzhen, and furthermore, she had to pay the garment manufacturers from time to time on his behalf.

12. She claimed she believed that since she cohabited with him at 17 years old and married him at 18 she belonged to him and she would do everything he told her to do. Furthermore the bridal gift money he gave her mother when they got married was in fact paid from money earned by her.

13. Consequently, in 1989, when the hut they were living in was demolished and she was told he was given an option to purchase a Home Ownership Scheme (HOS) flat, she agreed and went along with it.

14. She was told by the Defendant at the time that the down payment was $30,000.00, she had believed him and gave him the money accordingly. She had no recollection as to how the down payment was made, she recalled she had gone with the Defendant to see the show flat and to sign various documents for the purchase of the property. She claimed she also paid for the decoration and furnishing of the property because she had asked a relative to do part of the work.

15. She admitted she became a "mama san" in a nightclub in early 1992. In the same year, she discovered the Defendant was having an affaire with two of her team of girls. Furthermore, she was contacted by and met a woman in Shenzhen whom the Defendant was having an affaire. The Defendant asked her for a divorce to marry the Shenzhen woman promising to re-marry her after the Shenzhen woman obtained an entry permit to settle in Hong Kong. He had promised to pay her $2,000.00 a month when he asked her to sign the divorce papers, but he never did so.

16. In August 1992, she signed the divorce papers at the matrimonial home at the direction of the Defendant. However, very soon afterwards they quarrelled and he drove her away from the property, claiming it belonged to him and she had no share in it.

17. Believing she had no claim against him and since she was making a living at the nightclub, she did not pursue her claim in the Family Court.

18. In February 1996, she quit her job and began living with a male friend. After giving birth to a daughter in September 1997, they separated in October 1997. She claimed she has to live on public assistance now because she received only 1 year of education in China and also because she has a child to look after.

19. She took up the present application because the Social Welfare Department informed her that she is a joint owner of a property and she has to deal with her ownership of this property. In trying to locate the Defendant during this time, she discovered he had let out the property to various persons. These persons were registered as residents of the estate by the management office.

The Defendant's Case

20. The Defendant denied the Plaintiff had in any way contributed to the purchase of the property. He claimed he had $16,000.00 saved and thus was able to pay the $15,900.00 deposit for the purchase of the property. He obtained a home loan from the Hong Kong Bank from which he also obtained a $15,000 decoration loan which he used to pay legal costs and other expenses. He claimed the furniture and electrical appliances were all gifts from relatives and friends and little decoration was required.

21. The Defendant claimed the Plaintiff had stopped working at the electronic factory after they got married, she became a full time home-maker. He gave her $3,000.00 per month household money throughout the marriage. In 1989, he had taken up work as a China/Hong Kong truck driver and was spending half his time in China each month. He claimed he found out the Plaintiff was frequently staying away from home during the night. Their relationship became bad and later on he found out she was working as a dance hostess.

22. He claimed the Plaintiff moved out of the matrimonial home on her own volition in 1992. She had sent her nephew to collect her things from the property.

23. After she left, he petitioned for divorce and he obtained her consent to the petition though he refused her request for maintenance in the sum of $2,000 to $3,000 per month.

24. He maintained that he had always believed and regarded the property to belong to him solely. Further, it was only because the Hong Kong Housing Authority had required both their names to be registered as legal owners that the Plaintiff's name appeared in the titles.

25. He seeks a declaration that the property was held in trust on his behalf by the Plaintiff and asks for a transfer of her share of the interest to his name and a dismissal of the Plaintiff's application.

Findings

26. After considering the affirmations with the exhibits filed by both parties and their evidence in Court, I have come to the following conclusions on the basis of their evidence. I find the Defendant's evidence inconsistent and unreliable. He was an older and more experienced man when he met the Plaintiff in 1983. Through working as a supervisor at the glove factory, he also became a contractor for the factory and that was how he first came to know the Plaintiff. The Plaintiff was clearly under his influence at 17 years old, particularly after she started living with him in the same year.

27. I find the Plaintiff a credible and reliable witness. I find her evidence to be truthful, the strenuous cross-examination had in no way diminished her credibility. I accept her evidence that at the time she believed she belonged to him because she cohabited with him and married him at a young age. Consequently, being a young woman who had little education she accepted her perceived role and did whatever the Defendant told her to do.

28. I accept the Plaintiff's evidence that the Defendant was spending more than he was able to earn and he persuaded the Plaintiff to work as a prostitute and later as a dance hostess to finance his spending. I further accept that they had frequented the casinos in Macau and she had been giving him a large part of her earnings throughout the marriage.

29. I have not been shown the Defendant's bank passbook or any evidence that the Defendant was able to save $16,000 to pay for the 5% down payment on the property in 1989. I find the Defendant's claim that he had paid the 5% down payment on the property from his savings to be incredible.

30. The Defendant claimed at the time, he paid the Plaintiff $3,000.00 per month (paragraph 21 of his 3rd affirmation) and he had paid all other outgoings from his salary of $8,500.00 per month. He claimed he further paid $3,000.00 into the Hong Kong Bank account each month for the mortgage repayment. Based on these figures, it leaves no more than $2,500.00 per month for the Defendant's own use. From the Defendant's smoking and gambling habit described by the Plaintiff, I find it difficult to believe the Defendant would have any savings at all if the two of them had lived on his $8,500 monthly salary. It would hardly leave any money for the Defendant to save even if the Defendant was not smoking and gambling.

31. The Defendant stated in paragraph 23 of his 3rd affirmation that the Plaintiff moved out of the property in 1992. He further confirmed this in his letter to the Director of Legal Aid on page 61 of the bundle that he and the Plaintiff cohabited in the property for about 3 years. However, in the petition for divorce he filed on 13 July 1992, he stated that they have lived apart since January 1990. This statement clearly cannot be correct if they had only just moved into the premises in December 1989. When cross-examined on these discrepancies, he claimed the Plaintiff had moved out in early 1992. I find his evidence in court to be inconsistent with his affirmation evidence and with his admission in his letter to the Director of Legal Aid.

32. I found from the evidence before me that the Defendant has a domineering personality and regarded the Plaintiff as his property. This is supported by his evidence in Court when under cross-examination he said he made the decision to purchase the property and the Plaintiff would live where he lived, and the Plaintiff would obey him because she was his wife. It follows that in his mind when he drove her out, she would not be entitled to remain in the property.

33. From the evidence before me, I am satisfied that :-

a) the Plaintiff was young and immature when she began cohabiting with the Defendant in 1983;

b) the Plaintiff was persuaded by the Defendant to work as a prostitute in 1984 and later as a dance hall/nightclub hostess to help him pay his debts;

c) the Plaintiff had little education and few skills, and because of the Defendant's repeated demand for money, she continued to give him part of her earnings as a dance hostess up to their separation in 1992;

d) in 1989, the Defendant opted for the purchase of the property, and it was the Housing Authority's requirement that as occupants of a hut to be demolished, both occupants were entitled to purchase a HOS flat in joint names;

e) the Plaintiff had financed the down payment of $15,900.00 for the purchase of the property in 1989;

f) the Plaintiff also put up money to furnish the flat which they moved into in December 1989. They lived together in the property up to late 1992. The Defendant, after the Plaintiff had consented to the divorce, drove the Plaintiff out of the property claiming he was the sole owner of the property;

g) when the Defendant asked the Plaintiff to give her consent to the divorce they were both living at the property. He offered to pay her $2,000.00 per month but she counter-proposed a payment of $3,000.00 per month. He refused and told her to wait for the Family Court's decision;

h) the Defendant had, due to the demand of his work as a China/Hong Kong driver, spent a great deal of his time in China. He had further bought a property in Shenzhen where he lived with his present wife and her son until they were granted a one way permit to settle in Hong Kong. Before the purchase of the Shenzhen property, they had lived in Shenzhen since their marriage in 1995; the Defendant and his wife have been living in Taan Kwai Village after the Defendant's wife settled in Hong Kong in 1999;

i) since the divorce, the property had been let to various persons by the Defendant for a rental income. Mr. Ng Tak-wing and a Miss Lee were the tenants from 1998 until sometime in late 2000.

j) the Defendant had been paying the monthly installments of the property from the parties' joint account since its purchase. It was sometime after the divorce from the Plaintiff that in 1995 he transferred the repayment account to an account in his sole name;

k) the money in the parties' joint account belonged to both parties jointly based on the presumption of joint ownership.

34. Based on the aforesaid, I find on a balance of probability that the Plaintiff had financed the down payment for the purchase of the property in November 1989. The Defendant took the money given to him by her and put $3,000.00 per month into their joint account at the Hong Kong Bank for the payment of installments. This continued until sometime in 1992 when the Plaintiff discovered the Defendant had been cheating on her with two of the girls on her team at the nightclub and the woman in Shenzhen. She then refused to give him more money. This led to their separation and he drove her out of the property. This is supported by the fact that she was not allowed to return to collect her belongings. She had to send her nephew to do so, watched by the Defendant because he had to see that "she would not remove my things" according to his evidence.

35. Even if I were wrong, and the Defendant was the sole breadwinner during the marriage, and the Plaintiff was a housewife not earning an income, the Plaintiff would still be entitled to share equally in the joint name property and the joint name bank account on the basis of the presumption of advancement between husband and wife. That is, unless the Defendant can successfully rebut the presumption. To do so the Defendant has to produce evidence of actual agreement between him and the Plaintiff that in spite of the property being held in joint names, he would be the sole beneficial owner and the Plaintiff was not to have any interest whatsoever.

36. The Defence referred to the case of Secretary of Justice v. Chau Mei-ha trading as Romeo International Co. HCA 787 of 1992, a decision of Yeung J. (as he then was on 29 January 1999). In that case, the parties agreed the husband would be the sole beneficial owner of the joint named property because the wife had an independent business which had failed 21/2 years before the property was purchased. On the basis of the parties' expressed agreement due to the wife's financial failure, the Court accepted the presumption had been rebutted.

37. Mr. Justice Yeung referred to Godfrey J.'s earlier decision in Cheung Lily v. CED [1987] 3 HKC 307 at page 312 :

"There are few cases, indeed, in which husband and wife can be found to have come to any express agreement about their respective beneficial interests in the matrimonial home. Accordingly, the court, finding it impossible to ascertain the actual intention, has to search for the presumed intention of the parties, the matter thus resolving itself into a battle of competing presumptions. These are the presumption of resulting trust and the presumption of advancement."

38. The facts in the present case differ from the facts in the Secretary of Justice v. Chau Mei-ha case. In that the right to purchase the property was offered to the parties upon the demolition of the hut they resided in. The granting of this right came from their right of occupation of the hut and not from the ownership of the hut. The right of occupation was personal to the Plaintiff and the Defendant as individual occupants. Unlike the Chau Mei-ha case where the right came from a balloting on a white application form, the parties here were not required to file in either a green or a white form for balloting.

39. I am not satisfied the Defendant had shown sufficient evidence to rebut the presumption of advancement. I find that in fact, neither the Plaintiff nor the Defendant had discussed the ownership of the property when it was purchased. So far as the Defendant was concerned, he had made the decision to purchase and the Plaintiff would live where he lived and she would do what she was told to do. Neither was there any presumed intention from the evidence adduced. The only time the parties did discuss the matter was when they discussed the Defendant's petition for divorce and the Defendant had offered to pay the Plaintiff a sum of $2,000.00 per month. She indicated her requirements in the acknowledgment of service form. The fact that the Plaintiff had little education, is hardly literate and had been under the influence of the Defendant during the marriage explains why she did not pursue ancillary relief in the Family Court. I accept that she was clearly ignorant of her rights under the law. This ignorance cannot be presumed to be an intention to forego her entitlement.

40. I find, on the basis that the Plaintiff had contributed to the purchase of the property and had continued to do so during the marriage, the Defendant had failed to rebut the presumption of joint ownership. I find for the Plaintiff and make an order in terms of the Plaintiff's summons, I dismiss the declarations sought by the Defendant.

41. Costs nisi to the Plaintiff to be taxed if not agreed. The Plaintiff's own costs to be taxed in accordance with Legal Aid Regulations.