CHAN SHIU YEE SHIRLEY v. CHANG KIAN CHUNG PETER

1986, No. A5170

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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Reasons in writing handed down: 20th May, 1987

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JUDGMENT

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1. The Plaintiff wife seeks a declaration that she is entitled to a half share in the matrimonial home in which she lived with the Defendant husband between their marriage in June 1984 and their separation in April 1986. The Defendant now concedes that she is entitled to a share, but contends that it should be less than 50%.

2. The agreed bundle of documents and the evidence given by the parties in relation to matters not in dispute establishes the following facts.

3. At the time of their betrothal in August 1982, they opened a joint savings account with Citibank under which each had authority to draw and into which thereafter, in the terms of their agreement to do so, the Plaintiff deposited $1,500 and the Defendant $2,500 per month. On the 28th of October 1983 they opened with the same bank an additional joint current account upon which either could operate. In February 1984 they selected a flat for purchase as their matrimonial home. The purchase price was $458,000 of which $5,000 was to be paid on the signing of the sale and purchase agreement on the 19th of February 1984, a further $40,800 on 29/2/84 and the balance of $412,200 on 26/3/84.  On 21/12/83 the credit balance in a joint savings account was $62,699.83 : on 22/2/34 it was $3,122.43.   No deposits were made after that date and both accounts were closed on 29/5/84 - almost 3 weeks before their wedding day. The payments to complete the purchase were duly made, the source of 'the balance of $412,200 payable and paid on 26/3/84 was a loan from the Defendant's employer. The application form for that land was typed by the Plaintiff, a day or so before 20/2/84 and then signed and submitted by the Defendant to his employer on 20/2/84. Although the form required and contained particulars of the Plaintiff's income, the application was made in the name of the Defendant alone and paragraph 11 of the form stated that title to the property was to be in the sole name of the Defendant. The Defendant, however, submitted with the application a letter in which he stated, inter alia,

"I wish to apply for Housing loan from the company for both myself and Fiance".

On completion of the sale and purchase agreement, the legal estate in the property was conveyed to the Defendant alone. The repayment instalments in respect of the loan were deducted each month from the Defendant's salary. Neither party was able to give the exact figure in respect of that deduction, but both agreed that it was about $3,300 per month. From the time the employers began deducting the loan repayments until the time of their separation, the Plaintiff paid $3,000 per month, her agreed contribution to the 'family fund', to meet the family expenses which included the cost of meeting the loan repayments.

4. The parties in their evidence disagreed about the purpose for opening the joint savings account and the reason for conveying the legal estate in the matrimonial home to the Defendant alone.

5. The Plaintiff said that they opened the joint savings account to create a fund for use in purchasing their matrimonial home. The Defendant early in his evidence appeared to say that they did not envisage, using the fund for the purpose of purchasing the matrimonial home. When first asked what the purpose was in opening the joint savings account, he said 'to save up for general expenses before our marriage'.  Later when he was asked to specify what 'general expenses before marriage' they had in mind, he replied -

"because we planned to marry, we wanted to save for such expenses as wedding feast, clothes, purchasing a house and decorating it, furniture, jewellery etc.".

He said that throughout their discussions, they both knew that he was the one who would have to be responsible to purchase the flat because he had about $90,000 in his own savings account whereas the joint account had insufficient funds to cover the down payment on a flat.

6. The Plaintiff's evidence was that the down payment was paid wholly from the joint savings account. The banking documents in the agreed bundle convincingly demonstrate that she is right. They show that the money to pay the first payment of $5,000, the second instalment of the down payment, namely, $40,800, the agent's commission and the conveyancing fees came from the joint savings account.

7. The second major area of disagreement between the parties concerns the circumstances surrounding the signing of the sale and purchase agreement.

8. The Plaintiff said that both she and the Defendant signed the agreement at the office of the real estate agent and that thereafter a copy of the document was given to them and subsequently kept by the Defendant. The Defendant agreed that they did so sign, that he was given a copy of the document and subsequently retained custody of it, but he also said that the dual signing resulted from a mistake made by the real estate agent who assumed that since the Plaintiff and the Defendant were together inspecting premises, they were also jointly purchasing the premises they eventually jointly selected. Later, according to the Defendant, whilst he and the Plaintiff were still at the agent's office at a time subsequent to the vendor's signing the agreement and leaving the office, the agent, on learning that the Defendant was to be the sole purchaser, deleted the Plaintiff's name from the document. The Plaintiff was emphatic that no such alteration was ever made in her presence. I have no doubt whatsoever that the Defendant's allegation that the Plaintiff's name was deleted from the document by the agent in the presence of the Plaintiff shortly after the signing of the document is a deliberate lie. The copy of the document produced from the Defendant's custody does reveal that lines have been drawn through the Plaintiff's name and particulars as a joint purchaser of the property. When Plaintiff's solicitors discovered this document they wrote to the real estate agent involved in the purchase and obtained the agent's copy of it. That copy was produced in evidence. A comparison of the two documents reveals that the original or top copy was handed to the Defendant whilst a carbon copy was kept by the agent. The agent's copy does not correspond with the Defendant's in that it still includes a description of the Plaintiff as joint purchaser of the premises, her signature and details of her identity card. The particulars entered on the original retained by the Defendant were entered with a blue ball point pen Whereas the crossing out of the Plaintiff's signature and particulars as joint purchaser has been done with a black ball point pen. The Defendant knew the name of the agent who behaved in this extraordinary way yet he did not call him as a witness nor give any explanation during his evidence as to why he was unavailable to be called. The Defendant's counsel did say from the bar table in answer to a question by me as to whether the agent was to be called that the agent could not be found but no evidence was given of any effort main by or on behalf of the Defendant to trace the whereabouts of the agent. I unhesitatingly accept the Plaintiff's version of this incident.

9. The Plaintiff said that the legal estate was assigned to the Defendant for one reason and one reason only, namely, that if that had not been done his employer would not have granted the loan. The Defendant said that they both knew all along that that was the employer's policy and that knowing that they agreed that the Plaintiff should only be entitled to a share proportional to the contribution she made towards the purchase. Again an agreed document supports the Plaintiff. The Defendant's letter of 20/2/84 to his employer indicates that he himself thought that his employer would lend the balance of the purchase price to the two of them. I accept the Plaintiff's evidence even though she was mistaken regarding the time she became aware of the employer's policy. This was the only matter on which she was in any way shaken in cross-examination. She said she first became aware when she went to the solicitor's office on the day appointed for completion, that is, 26/3/84. Mr. Wong, in cross-examination, made the point that she must have known on or before 20/2/84, the date of the application for the loan, because she typed in the particulars required by paragraph 11, namely, that the title to the property was to be in. the Defendant's name. I think that her confusion about the time at which she became aware arises from a failure to realise the significance of paragraph 11 at the time the form was prepared. Such a failure would also be consistent with the Defendant's attitude at that time as well an attitude revealed by the terms of his letter of 20/2/84. In any event I am in no doubt that she was telling the truth when she said the property would have been conveyed to them jointly had the employer's loan conditions not ruled out a joint legal title.

10. On the evidence I find that the Plaintiff made a substantial contribution towards the purchase of the matrimonial home.

11. Mr. Wong, for the Defendant, sought to persuade me by an elaborate analysis of the actual cash contributions made by each of the parties that the Plaintiff was entitled to something less than a half share. It has been said that contributions made by a claimant may be relevant for, inter alia the purpose of quantifying the extent of a beneficial interest ⁽¹⁾.  But it has also been said that 'prima facie the interest of the claimant is that which the parties intended'⁽²⁾, and that where the common intention was that there should be a joint interest then that pointed to an equality of beneficial interests⁽³⁾.

12. In this case, the compelling inference from the conduct of the parties is that they intended a joint interest. The inequality of the contributions to the joint account before purchase of the matrimonial home and to the "family fund" subsequent to that purchase was an agreed inequality based on the parties' then ability to contribute. It was their intention, as the Defendant inadvertently let slip towards the end of his cross-examination, that the Plaintiff was to contribute more as her income increased. The history of their respective employments indicates that the Plaintiff's income was likely to edge closer to the Defendant's and eventually exceed his. Their contributions at any given time were not meant by them to be indicia of the extent of their respective interests but simply represented what they both recognised as the amount each could afford in the exigencies of their family life at that time. I infer that it was their common intention that they were to have equal shares in the home.

13. As an alternative to that inference I would hold that the contribution of the Plaintiff, as a working wife with no domestic help, was not limited to the $3,000 she directly paid in cash to the Defendant each month. The value of that extra contribution would be difficult to quantify, but whatever its value, it must have brought her contributions so close to equality with the Defendant's as to make the 'equality is equity' maxim applicable.

14. I accordingly hold that the Plaintiff is entitled to the declaration sought.

(1) Grant v. Edwards, [1986] 2 All E.R. 426, 437

(2) Gissing v. Gissing, [1971]. A.G. 886, 908

(3) Eves v. Eves, [1975] 3 All E.R. 768, 775