LIM POR YEN v. HIGHFIT DEVELOPMENT LTD AND ANOTHER

HCA1942/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.1942 OF 2002

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J U D G M E N T

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1. This is an appeal against the order of Master Lisa Wong striking out paragraphs 3(p) and 5(d)(i) of the 1st defendant's defence and paragraphs 3(p) and 5(e)(1) of the 2nd defendant's defence. For all practical purposes the averments contained in the two defences are identical. The paragraphs struck out were :

"	3(p)	The 2nd defendant is the plaintiff's third wife. Pearl is their daughter and Ling Wai Kwan Eric is their son
	5(d)(i)	The plaintiff and the 2nd defendant were married in or about 1956, the 2nd defendant being the plaintiff's third wife."

2. The plaintiff's claim against the defendants is for $1,009,185,969.32 in respect of loans totalling about $573,000,000.00 plus interest. It is the plaintiff's case that the loans were made to the 1st defendant, which is controlled by the 2nd defendant and her daughter Ling Ming Chu Pearl, or alternatively to the 2nd defendant personally, for the purpose of financing a property development project (the "Project") in Shanghai. They were repayable when the Project was completed and it was completed in 1999. There were oral agreements as to interest. The loans are unpaid.

3. The defendants make various averments by way of defence but for the purposes of this summons the important ones are these :

(a)	The plaintiff and the 2nd defendant were married in about 1956, the 2nd defendant being the plaintiff's third wife. They had two children, Pearl and Eric.
(b)	Before 1997 the 2nd defendant wanted to emigrate to Europe or North America. The plaintiff did not want her to go. He persuaded her instead to purchase and develop the property in Shanghai and so the Project came about.
(c)	The funds were provided either by way of gift to the 2nd defendant or in consideration of her not emigrating.

4. The plaintiff by way of reply admits that Pearl and Eric are his and the 2nd defendant's children, but denies marriage to her and of course denies the defendants' averments as to gift or consideration.

5. The defendants have provided further and better particulars that the marriage took place on 6 March 1956 at a dinner when the plaintiff announced that the 2nd defendant was his third wife. The marriage was never registered and there was no marriage certificate. The plaintiff had a principal wife and a second wife or concubine. Since 6 March 1956 the 2nd defendant has been accepted by his family as his third wife or concubine.

6. Mr Thomson, for the defendants, argues in the first place that strike-out is only for plain and obvious cases, and the plaintiff does not satisfy this test. The plaintiff's precise relationship with the 2nd defendant as his third wife is directly relevant to the issue of whether there was a loan or a gift or a contract under which it was paid by way of consideration. In particular the defendants seek to rely on the presumption of advancement. It is also argued that since there has been a direction by Master Lung, dated 29 January 2003, allowing the parties at trial to adduce evidence on Chinese law and custom, the plaintiff's application to strike out the pleadings is an abuse of process as it represents a collateral attack on the Master's order.

7. Mr Beresford, for the plaintiff, argues that the averments are ambiguous or unintelligible because the particulars show that the 2nd defendant was not a wife but a second concubine which has a different status to that of a wife. Therefore the averments should be struck out unless properly amended.

8. So far as the presumption of advancement goes, Mr Beresford says that this is not really a presumption but rather a counter-presumption to overcome, where an advance is made to a wife or a child, the presumption of resulting trust which applies in the normal situation where an advance is made to a stranger. There is no allegation of resulting trust in the statement of claim; the plaintiff is suing in contract. So there is no resulting trust to be rebutted. Alternatively where the oral testimony of the parties is receivable, there is no need to resort to the presumption which is in any event a tool of last resort.

9. I note that section 2 of the Marriage Reform Ordinance, Cap. 178 provides :

"'parties to a customary marriage' means the husband and the principal wife (tsai) whether such wife is a kit fat or a tin fong wife; and, for the avoidance of doubt, 'party to a customary marriage' does not include a concubine (tsip);"

and that there is also reference in the Ordinance to a kim tiu marriage. Not having the benefit of expert evidence I do not know what a kit fat or a tin fong wife may be, or what is a kim tiu marriage but it certainly appears to be the case that a wife and a concubine have different status in Chinese customary law. There is also support for this in the passage in Ho Tsz Tsun v. Ho Au Shi & Ors. (1915) 10 HKLR 69 at 73 to the effect that it is clear that "China is a polygamous country; that the first wife has precedence, but that the other wives are wives and not merely concubines...".

10. It seems to me that there is merit in the objection that the pleading is ambiguous. Whatever status the 2nd defendant relies on it would be necessary to plead that status unambiguously.

11. Much more important however is the question of the relevance of the presumption of advancement in this case. It may be that a wife who has contracted a Chinese customary marriage is entitled to rely on the presumption. As Mr Thomson points out, this was not ruled out even in the case of concubinage in Li Hung Chan v. Wong Woon Heung [1950] HKLR 213 at 226 at any rate where the plaintiff had admitted his moral obligation to support his concubine. But is it relevant?

12. There is no doubt that the presumption of advancement is not something which stands on its own but is an exception to the normal presumption of a resulting trust. See the dicta of Lord Upjohn in Pettit v. Pettit [1970] AC 777 (H.L. (E.).) at 813-814 cited for the plaintiff. Further, at any rate in its application to a house acquired for occupation, the equitable presumption of advancement had been "reclassified as a judicial instrument of last resort, and in cases between father and child, as between husband and wife, was easily rebutted by comparatively slight evidence". See McGrath v. Wallis [1995] 2 FLR 117.

13. In the instant case, we are not dealing with property in joint names or another situation which might give rise to a resulting trust, but with specific averments of a loan. It is true that a wife may rely on the presumption of advancement to say that money which her husband says was lent to her was in fact given to her, but ultimately the court will decide the matter, at any rate so long as the husband and wife are still alive and capable of giving evidence, not on any equitable presumption but on the evidence it hears.

14. There is no magic in a marriage, in whatever tradition it may have been contracted. There are men who, having vowed in a Church of England marriage ceremony "With all my worldly goods I thee endow", or its modern equivalent, will not give their wives a cent. There are men who will give their mistresses a fortune and never expect it back. No doubt the same applies in all cultures and religions. What matters in the situation where one partner says "I lent you the money" and the other replies "No, you gave it to me" is surely the nature of the actual personal relationship they had rather than any kind of duty which a particular society or culture may have imputed to either of them, arising out of their status. Ultimately it is a question of whose evidence is to be preferred.

15. On this basis I respectfully agree with Mr Beresford's contention that it is the facts and matters relied upon to establish the intention to advance the 2nd defendant which should be pleaded and not an assertion of status under Chinese customary law. It follows that the averment is unnecessary in that it raises an issue which will involve trouble, expense and delay. Expert evidence will only prolong the trial and obfuscate the real issues.

16. For these reasons the appeals are dismissed with costs (nisi) to the plaintiff in any event. There will also be an order in terms, by consent, of the plaintiff's summons dated 27 November 2003 to amend the Master's order.