Chan Yau Wing v. Chan Yau Hing

DCMP 600/2013

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MISCELLANEOUS PROCEEDINGS NO. 600 OF 2013

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JUDGMENT
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Introduction

1.The facts of this case beg the question of whether the English saying of blood is thicker than water is universally true.

Background

2.The plaintiff is the younger sister of the defendant.

3.They used to live with their parents and the elder brother in a public housing estate in Tseung Kwan O.

4.In 2009, the plaintiff and the defendant agreed and did purchase a property known as Flat B, 12th Floor, Tower 5, Metro City, Phase I, 1 Wan Hang Road, Tseung Kwan O, Sai Kung, New Territories, Hong Kong ("the property") at the price of $2,100,000. In the assignment of the property, the legal interests of the property are held by the plaintiff and the defendant as tenants in common in equal shares.

5.Dispute arose between the plaintiff and the defendant since 2011, which resulted in the plaintiff taking out the present proceedings in 2013.

6.By these proceedings, the plaintiff is seeking an order for sale of the property and proceeds of sale be distributed in accordance with the proportion of expenses respectively contributed by the plaintiff and the defendant. According to the plaintiff, her contribution was 80.5% whereas that of the defendant was 19.5%.

7.The defendant's position is that she does not oppose to the grant of an order for sale and is willing to reimburse the total amount money paid by the plaintiff for the defendant but disputes that the proceeds of sale should be distributed in the way as claimed by the plaintiff.

8.His Honour Judge Chow on 24 October 2013 ordered that the deponents of the affirmation or affidavit to be cross-examined.

9.On 10 February 2014, the defendant took out a summons applying for the case to be transferred to the Court of First Instance. The said summons was heard on 12 February 2014, the day of hearing for the cross-examination of the deponents.

10.After hearing arguments from both sides, I dismissed the said summons on the same day.

11.Owing to the technical reason that the documents relating to the proceedings were only served by the plaintiff's solicitors on the Director of Lands ("Director") pursuant to section 3(2) of the Partition Ordinance and rule 4 of the Partition Rules lately and on the other hand no service of the defendant's documents on the Director was effected by the defendant's solicitors, the cross-examination of deponents was re-fixed to 10, 11 and 14 July 2014.

12.By an Order dated 7 May 2014, it was ordered by consent that the property be sold on the terms agreed upon by the parties whereupon the balance of the sale proceeds would be paid into court pending the outcome of this trial.

Issues

13.The following issues are for the determination by this trial :

(a) whether the equitable principle of constructive trust applies to the present case;

(b) whether there was a post-acquisition common intention that their respective beneficial interests in the property should change;

(c) if so, what were their respective beneficial interests as a result; and

(d) how should the proceeds of sale of the property be distributed between the plaintiff and the defendant.

Legal principles

14.The development relating to the law on constructive trust has been usefully summarized by Cheung, JA in the recent Court of Appeal decision in Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985. In the context of joint names cases, His Lordship adopted the principle as formulated by the House of Lords in Stack v Dowden [2007] 2 AC 432 which was further elaborated by the Supreme Court of England in Jones v Kernott [2012] 1 AC 776.

15.In the joint judgment of Lord Walker of Gestingthorpe and Baroness Hale of Richmond JJSC in Jones v Kernott (supra), the principle is stated at p794 :

"51. ... where a family home is bought in the joint names of a cohabiting couple who are both responsible for any mortgage, but without any express declaration of their beneficial interest. (1) The starting point is that equity follows the law and they are joint tenants both in law and in equity. (2) That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change. (3) Their common intention is to be deduced objectively from their conduct ... (4) In those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset, or (b) had changed their original intention, but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, "the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property": Chadwick LJ in Oxley v Hiscock [2005] Fam 211, para 69. In our judgment, "the whole course of dealing ... in relation to the property" should be given a broad meaning, enabling a similar range of factors to be taken into account as may be relevant to ascertaining the parties' actual intentions. (5) Each case will turn on its own facts. Financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended (as in case (3)) or fair (as in case (4))."

16.It should be noted that in England, with the spread of registration of title, the form of transfer prescribed by the Land Registry did not require the transferees to state their beneficial interests as well as their legal title: see the speech of Lady Hale in Stack v Dowden (supra) at p452. The lack of declaration of the beneficial interests by the co-owners had led to the application of the principle stated in the last paragraph. However, as can be seen below, the way in which the assignment in the present case was drafted has necessitated the application of the same principle.

17.Where it is alleged that there is a post-acquisition common intention changing the beneficial interests of the co-owners, compelling evidence is required before one can infer that the parties intended a change in the shares in which the beneficial ownership is held. In the words of Lord Neuberger of Abbotsbury in Stack v Dowden (supra) at para 138,

"Such evidence would normally involve discussions, statements or actions, subsequent to the acquisition, from which an agreement or common understanding as to such a change can properly be inferred."

18.Lam, J (as he then was) in Chan Chui Mee v Mak Chi Choi [2009] 1 HKLRD 343 also adopted the same view: see paras 34-36 and 96.

Whether the equitable principle of constructive trust applies to the present case?

19.Miss Emma Wong, counsel for the defendant, urged upon this court that the principle of constructive trust is not applicable in the circumstances of this case. Miss Wong is relying on the case of Goodman v Gallant [1986] Fam 106, in a passage of Slade LJ's speech at 110F-111A :

"In a case where the legal estate in property is conveyed to two or more persons as joint tenants, but neither the conveyance nor any other written document contains any express declaration of trust concerning the beneficial interests in the property (as would be required for an express declaration of this nature by virtue of section 53(1)(b) of the Law of Property Act 1925), the way is open for persons claiming a beneficial interest in it or its proceeds of sale to rely on the doctrine of "resulting, implied or constructive trusts": see section 53(2) of the Law of Property Act 1925. In particular, in a case such as that, a person who claims to have contributed to the purchase price of property which stands in the name of himself and another can rely on the well known presumption of equity that a person who has contributed a share of the purchase price of property is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust: see, for example, Pettitt v Pettitt [1970] AC 777, 813-814, per Lord Upjohn. If, however, the relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property of its proceeds of sale, there is no room for the application of the doctrine of resulting implied or constructive trusts unless and until the conveyance is set aside or rectified; until that event the declaration contained in the document speaks for itself."

20.Miss Wong's argument is that at the time of the acquisition, both the plaintiff and the defendant made an express agreement on their interests in the property as tenancy in common in equal shares in the formal agreement for sale and purchase and the property was eventually conveyed to them as tenants in common in equal shares. Hence, on the strength of the speech of Slade LJ in Goodman v Gallant (supra), there is no room for the application of the principle of constructive trust.

21.There is no counter-argument from Mr Patrick Siu, counsel for the plaintiff.

22.In my view, the validity of Miss Wong's argument depends on the existence of a declaration of trust of the beneficial interest at the time of the acquisition.

23.The declaration in the agreement for sale and purchase that the plaintiff and the defendant would hold the property as tenants in common in equal shares is merely an indication of how the legal estate would be held upon completion. It cannot be treated as a declaration of trust by them.  

24.In Goodman v Gallant (supra), the conveyance, apart from declaring that the vendor conveyed to the purchasers the property "to hold the same unto the purchasers in fee simple as beneficial joint tenants", also contained an express declaration of trust in the following terms as recited at p101A of the judgment:

"The purchasers hereby declare as follows : (a) the purchasers shall hold the property upon trust to sell the same with power to postpone the sale thereof and shall hold the net proceeds of sale and net rents and profits thereof until sale upon trust for themselves as joint tenants."

25.In the present case, the assignment dated 9 October 2009 contains the following granting clause :

"... the Vendor as beneficial owner ASSIGNS to the Purchaser the property described in the Schedule hereto ("the Property") TO HOLD the same unto the Purchaser as Tenants in Common in equal shares ..."

There is no declaration of trust in respect of the beneficial interest of the property.

26.In other words, the assignment only declares in whom the legal title is to vest but not the beneficial title.

27.Slade LJ in Goodman v Gallant (supra) had expressly differed from the view taken by Davies LJ in Bedson v Bedson [1965] 2 QB 666 and stated that there is a real and important distinction between a conveyance into joint names which contains a declaration of trust of the beneficial interests and a conveyance which contains no such declaration: see p114A of the judgment. Therefore, the granting clause in the assignment cannot be taken as a declaration of trust of the beneficial interest.

28.On this note, I am bound to reject the submission of Miss Wong. I hold that the equitable principle of constructive trust applies to the present case and this court is duty-bound to find out the actual intention of the parties.

Whether there was a post-acquisition common intention that their respective beneficial interests in the property should change?

29.The property was purchased at the price of $2,100,000. With the help of a 90% mortgage loan from the Bank of China, the down payment was $210,000.

30.According to the plaintiff, the initial agreement was that she would contribute $110,000 whereas the defendant would contribute $100,000 towards the down payment. However, due to the financial difficulty that the defendant was facing at that time, she agreed to contribute an extra sum of $30,000. Therefore, she had actually contributed $140,000 and the defendant had contributed $70,000 towards the down payment.

31.Apart from the down payment, there were other outgoings arising out of the purchase of the property. For ease of reference, the following is a summary of the plaintiff's account :

Plaintiff's			Defendant's
Expenses	Amount ($)		Expenses	Amount ($)
Refurbishment	7,800.00		Refurbishment	6,200.00
Television	3,300.00		Television	2,690.00
Furniture	5,120.45		Furniture	5,120.45
Curtains	800.00		Curtains	800.00
Door lock	1,600.00		Stamp duty	10,100.00
Town gas deposit	600.00		Management fee
Air-conditioner	2,498.00		deposit	2,396.22
	21,718.45		Legal fees	5,900.00
			Electricity deposit	770.00
			Water deposit	400.00
			Commission	10,000.00
				44,376.67

32.In respect of the regular outgoings, the following is the plaintiff's account :

	Plaintiff	Defendant
Expenses
Rates between 11/2009 and 1/2013	$ 8,272.00
Management fees between 11/2009 and 1/2013	$22,910.50	$ 868.50
Mortgage repayment between 11/2009 and 1/2013	$277,682.34	$7,307.43
	$308,864.84	$8,175.93

33.Hence, according to the above figures, the plaintiff has contributed a total sum of $470,583.29 whereas the defendant's contribution is $122,552.60 as at January 2013.

34.The plaintiff said she was persuaded by the defendant to buy the property as their residence and not for investment purpose. Her understanding was that she and the defendant would own the property as tenants in common with 1/2 share each and each of them should bear all the outgoings equally. After the purchase of the property, she discovered that the defendant was financially unsound and was in debt. In view of that and in order to ease the financial problem of the defendant, between 9 December 2009 and 8 January 2010, the plaintiff proposed to the defendant that :

(a) she would bear the responsibility of the repaying the mortgage loan;

(b) she would repay the defendant all her contribution towards the purchase of the property;

(c) the plaintiff would become the sole owner of the property.

35.The plaintiff said on one Saturday, the defendant gave her a call informing her that she was agreeable to the said proposal and that she could take her time in paying back her contribution. In the year that followed, the plaintiff said she did on several occasions ask the defendant when she should pay her back. But every time the defendant said there was no need yet.

36.The plaintiff said in her 2^nd Affirmation that she was on good terms with the defendant in 2010. However, in or about February 2012 (sic), the defendant proposed to sell the property. That came as a surprise to her because according to the agreement, the property belonged to her solely. The defendant kept on demanding her to sell the property in order to reap a profit from the rising price. She resisted to the demand but eventually agreed to sell the property on or about 16 May 2012 (sic) in order to end the dispute. It should be noted that according to exhibit CYH-4 at p150 of Bundle C, the year in question should be 2011 instead of 2012.

37.It was her belief that after the sale of the property, the profits arising therefrom should be distributed in accordance to the proportion of their respective contributions to the property. This was also the advice she got from her current solicitors, Messrs S K Lam, Alfred Chan & Co.

38.On the other hand, the defendant told a very different story. She said the purpose of buying the property was for investment and helping out the plaintiff as she dared not bringing her boy friend to home (which was a public housing flat) for fear of being looked down by him.

39.The defendant said the plaintiff knew that she was owing a credit card loan at that time. Nevertheless, they both agreed to purchase the property in equal shares and to bear all the outgoings equally. They further agreed that once the price of the property had risen to a level that each of them would be able to make a profit of $500,000, they would sell the property and all the profits would go to the parents. To that end, they had no plan to move into the property. As they were on good terms at that time, they did not keep a record of each and every outgoing borne by either of them.

40.The defendant said she was able to pay her half share of mortgage repayment, management fees, Government rent and rates for the first 2 months. However, in January 2010, she encountered cash flow problem. She requested the plaintiff to allow her to defer payment of the 3^rd instalment. The plaintiff unexpectedly offered to pay the other half share for her. The defendant initially declined the offer. She even borrowed $3,600 from her sister and deposited $7,200 (of which $3,600 was her own money) into the plaintiff's bank account in payment of the 3^rd and 4^th instalments. But eventually, the plaintiff insisted that there would not be any need for the defendant to bear the mortgage repayment, which she gratefully accepted. Thereafter, the plaintiff did not request the defendant to pay for the management fees, Government rent and rates. According to the defendant, therefore, she had contributed $14,400 towards mortgage repayment.

41.The defendant said it was her sister Chan Yau Kwan ("Kwan") who initiated the idea of selling the property in February 2011. As the price of the property had risen to between $3,100,000 and $3,300,000 which had already exceeded their target, she was also agreeable to the idea. Nevertheless, the idea was initially objected to by the plaintiff. All members of the family except her younger brother took the side of the plaintiff and they all pressed upon her to give up the title to the property. However, in May 2011, the plaintiff suddenly proposed to her that the property be sold but she would only be entitled to a reimbursement of her contribution from the proceeds of sale. She rejected the proposal right away. Thereafter, the plaintiff pressurized the defendant through Kwan and eventually, the defendant agreed to the sale on condition that the profits would go to their mother. This was rejected by the plaintiff.

42.In May 2012, the plaintiff once again proposed to sell the property and the proceeds of sale be distributed in accordance to the proportion of their respective contributions. The defendant objected to the proposal and insisted that the profits should be divided between them equally. Thereafter, the defendant was pressurized by the plaintiff and other family members into agreeing to the plaintiff's proposal but she refused to do so.

43.In respect of the plaintiff's account of their respective contributions, the defendant has the following responses :

(a) Down payment : The plaintiff had only contributed $130,000 as opposed to $140,000;

(b) Television : The price was paid by her solely;

(c) Refurbishment : She contributed $6,200;

(d) Furniture : The plaintiff only paid her back the sum of $3,500;

(e) Door lock : It was paid by her solely;

(f) Government rent and rates : She only paid $245 as the plaintiff did not request her to pay further;

(g) Management fees : She only paid for the first 3 months because the plaintiff did not request her to pay further;        

(h) Air-conditioner : She was not told of the purchase;

(i) Cash rebate from bank : The plaintiff had not accounted for the cash rebate in the sum of $14,700 from the mortgagee bank.

44.It can be seen that at the time when the property was purchased, both parties intended that they would each own half share of the property and that they were to bear the outgoings of the property equally. Such was their intention despite the fact that the plaintiff was conscious of the fact that she had to contribute a bigger sum of money in payment of the down payment.

45.Nevertheless, when it became apparent that the defendant was not financially capable of paying her half share of mortgage instalment, their evidence began to diverge.

46.The plaintiff alleges that the defendant on one Saturday (presumably in early 2010) agreed to her proposal as stated in paragraph 34 of this judgment. That was the explanation put forward by the plaintiff as to why she bore all the mortgage repayment, management fees, Government rent and rates of the property since the beginning of 2010.

47.The defendant is not disputing that she encountered difficulty in keeping up the mortgage repayment in January 2010. However, she alleges that the plaintiff out of her own volition offered to pay for the mortgage instalment unconditionally. That was the explanation put forward by the defendant as to why she did not share the burden of the mortgage repayment, management fees, Government rent and rates of the property since the beginning of 2010.

48.The explanation of the plaintiff requires examination.

49.The inability of the defendant to bear her half share of the mortgage instalment surfaced in early January 2010: see paragraph 23(c) of the plaintiff's 2^nd affirmation. She also discovered that the defendant was owing over $100,000 to a bank in the same month. She then found out that the defendant had borrowed $59,000 from members of the family: paragraph 25 of the plaintiff's 2^nd affirmation. It must have come as a surprise to the plaintiff. Although the plaintiff had a steady job as a teacher at that time, she was not financially well off. According to her evidence, she had to borrow $30,000 from a friend called Anita in order to make up the difference of the down payment caused by the defendant's lack of fund. In other words, after the purchase of the property, the plaintiff was already in debt. By reason of the defendant's inability to pay her half share of the mortgage instalment, the plaintiff was faced with the situation that the burden would have to rest on her shoulder. Or else, default of mortgage repayment would be inevitable which would result in a greater financial loss. The added monthly expenses arising therefrom must be an extra burden to the plaintiff. To the plaintiff, it was a choice between two evils. In my judgment, it is unlikely that the plaintiff had made the proposal in order to save "the defendant from making her financial problems even worse" as claimed in paragraph 26 of her 2^nd affirmation.

50.Turning to the alleged proposal of the plaintiff and the acceptance thereof by the defendant, in my view, there are a number of inherent improbabilities. In her affirmation, she said the proposal was made between 9 December 2009 and 8 January 2010. However, under cross-examination, the plaintiff agreed that the defendant did pay her share of mortgage instalment in December 2009.  That being the case, it is not possible that she would make her proposal in December. More so, the plaintiff has not been specific as to the date on which the defendant accepted her proposal. The said proposal, if accepted, is a fundamental and important change of the original intention of the defendant. It also meant a dramatic increase of burden on the shoulder of the plaintiff. It is not something which can slip through the mind of the plaintiff easily. To give effect to the changed intention, lawyer's advice should be sought and the requisite legal documents such as agreement and assignment should have been executed accordingly. If this was not done for one reason or another, at least, the changed intention should have been recorded and confirmed by the parties in writing. There is a total lack of documentation in support of the plaintiff's alleged agreement.

51.According to the plaintiff's proposal, if accepted, she was obliged to reimburse the defendant her contribution towards the purchase of the property. Although it is the plaintiff's case that the defendant accepted her proposal sometime in January 2010, no action whatsoever was taken by the plaintiff regarding the reimbursement since that time. It must be remembered that the defendant was at that time in debt of $160,000. If she had accepted the plaintiff's proposal, she must be eager to receive the reimbursement, which, according to the plaintiff's calculation, was in the region of $120,000. Against that background, the claim of the plaintiff that the defendant told her that she could take her time in reimbursing her is defying logic. It is even more illogical that the defendant had repeatedly told her that there was no need to reimburse her for the time being in the year that followed. Indeed, it is doubtful that the plaintiff herself had the ability to reimburse the defendant bearing in mind that she was herself in debt after the purchase of the property.

52.The explanation of the defendant also calls for examination.

53.Whilst the defendant was encountering financial difficulty in January 2010, the plaintiff was also in debt at that time. The fact that the plaintiff had a job with stable income does not mean that she could afford to double her expenses on mortgage repayment with ease. The extra expenses must be something not in her contemplation at that time. Therefore, I find it hard to believe that the plaintiff had offered to pay the defendant's share of mortgage instalment unconditionally. In my consideration, I am also in grave doubt if the plaintiff had ever made her alleged proposal at all.

54.To my mind, I do not think that both the plaintiff and the defendant are truthful in their evidence. I tend to believe that in January 2010 when it was apparent that the defendant was unable to keep up with the mortgage repayment, the plaintiff was left with no choice but to shoulder the burden by her own resources. In doing so, there was no consensus between the plaintiff and the defendant regarding a change in the shares of the beneficial ownership of the property. This had led to the dispute between them that ensued.

Conduct of the parties subsequent to January 2010

55.The period between February 2010 and January 2011 was comparatively quiet. However, in February 2012, the question of selling of the property was raised. There is a dispute as to who raised the question. However, for the purpose of this trial, there is no need for this court to decide on this issue. Suffice it to say, the parties had entered into a battle over the beneficial interest of the property, during which, there was a total breakdown of face to face communication. The only form of communication between them was by way of text messages. Kwan was also involved in the process.

56.The plaintiff produced the text messages between her and the defendant and those between her and Kwan. The authenticity of those messages was not challenged. The majority of those messages were from the defendant, mainly expressing her anger towards the plaintiff and other family members. By a message dated 13 July 2012, the plaintiff had requested to meet the defendant for the purpose of checking their respective contributions so that the proportion of their respective shares could be worked out[1]: see pp210-211 message A20 & A22 of Bundle C.

57.In response, the defendant intimated that it was also her wish long ago. However, she was not happy with the way the plaintiff and other family members treated her[2]: see p211 message A22 of Bundle C.

58.Eventually, both parties turned down the suggestions of the other.

59.In a message from Kwan to the plaintiff on 14 October 2012, after she had talked to the defendant, she conveyed the message of the defendant to the plaintiff in which the defendant proposed 2 options :

(1) the profits derived from the sale of the property be divided by the proportion of 2/3 in the plaintiff's favour and 1/3 in the defendant's favour; or

(2) the plaintiff should give the defendant an apology after which the profits derived from the sale of the property could be divided according to the wish of the plaintiff[3].

See p241 message K25 of Bundle C.

60.The proposal of the defendant however was turned down by the plaintiff. In her response to Kwan at p241 message K28 of Bundle C, the plaintiff said if the defendant was not in agreement with the proportion, she could provide all payment records to the lawyers for calculation[4].

61.Having read the text messages in particular the passages quoted above, I can say that there was a great deal of animosity between the plaintiff and the defendant. In my judgment, despite the said animosity, both of them had displayed a clear common intention that their respective interests in the property should be changed. However, due to the same animosity, they had not been able to agree upon how and to what extent should their respective interests be changed.

What were their respective beneficial interests in the property as a result of their post-acquisition common intention?

62.Although it can be concluded that the parties had a common intention to change their respective beneficial interests in the property, this court is still required to ascertain what their respective interests should be. In view of the particular facts of this case, this is no easy task.

Express or inferred intention

63.Both parties had over the time professed different positions. On the side of the plaintiff, she initially claimed that she had bought out the defendant's share, but later was prepared to accept that the defendant was entitled to a certain share, which had to be worked out after their respective contributions were calculated and discussion. The defendant initially maintained that she was entitled to half of the share, but later said she was prepared to calculate their respective contributions with the plaintiff, which, of course, would result in a different proportion. Later on, she proposed that she would be entitled to 1/3 of the share or alternatively whatever share the plaintiff wished in return for an apology from her. 

64.The primary duty of this court is to ascertain the parties' actual shared intention, whether expressed or to be inferred from their conduct : see Jones v Kernott (supra) at p788E. First, there cannot be any expressed shared intention in this case. Secondly, in the circumstances of this case, it seems obvious that no shared intention as to the share of their beneficial interests can be deduced or inferred from their conduct.

Imputed intention

65.In a case such as this, this court has to embark on the less attractive exercise of  imputing an intention which this court considers fair having regard to the whole course of dealing between the parties in relation to the property: see Jones v Kernott (supra) at pp792G-H, 794E, 799D.

66.Mr Siu for the plaintiff invited this court to impute an intention to the parties that their interests in the property would be proportionate to their actual financial contributions as the only fair outcome because the plaintiff had shouldered all the financial responsibility of the property since early 2010. No authority was cited by Mr Siu in support of his proposition. It appears that Mr Siu is proffering the concept of resulting trust.

67.The resulting trust analysis approach that was favoured by Lord Neuberger of Abbotsbury in Stack v Dowden (supra) was the minority view and does not represent the law in domestic context : see the speech of Baroness Hale at p455B. In that case, the majority of the House held that the law had moved on from the presumption of a resulting trust and many more factors other than the parties’ respective financial contributions might be relevant to divining their true intentions. In Jones v Kernott (supra), the joint speech of Lord Walker and Baroness Hale at p786 expressly made it clear in the following terms :

" ... in the case of the purchase of a house or flat in joint names for joint occupation by a married or unmarried couple, where both are responsible for any mortgage, there is no presumption of a resulting trust arising from their having contributed to the deposit (or indeed the rest of the purchase) in unequal shares. "

68.Therefore, in attributing an intention which the court considers fair, financial contribution is only one of the factors to be taken into account. Lord Walker in Stack v Dowden (supra) at p448 expressed the view that contributions in kind (manual labour was used as an example) should also be taken into account. 

69.Coming back to the present case, it is fair to say that the plaintiff was the main financial contributor to the property. Not only that she had contributed more money to the purchase of the property, she was also the person to keep up the mortgage instalment payments when the defendant encountered financial difficulty. Had it not been for her effort, the property would have become the subject of mortgagee action by the bank.

70.On the other hand, the defendant was the prime mover of the purchase. It is not in dispute that she persuaded the plaintiff into buying the property. It should also be noted that due to the fact that the estate agent was one of her friends, she was able to negotiate a lower estate agent commission of $10,000 as opposed to the market rate of 1% of the purchase price.

71.In terms of financial contributions, I consider that expenses on furniture and electrical appliances should not be included in the calculation of financial contributions.

72.The plaintiff has shown to be meticulous with the expenses of the property. She was ready to admit under cross-examination that the defendant had contributed $6,200 on refurbishment. The defendant testified that in January 2010 (the month she was having difficulty to pay her share of the mortgage instalment) she borrowed $3,600 from her sister so that she paid the 3^rd and 4^th mortgage instalments in one go. It is in my view totally illogical, unreasonable and unbelievable. On balance, I accept the plaintiff's evidence as far as the financial contributions of the parties are concerned. Hence, the contributions of the parties are as follows :

Plaintiff			Defendant
Expenses	Amount ($)		Expenses	Amount ($)
Down payment	140,000.00		Ditto	70,000.00
Mortgage	277,682.34		Ditto	7,307.43
Refurbishment	7,800.00		Ditto	6,200.00
Door lock	1,600.00		Commission	10,000.00
Town gas deposit	600.00		Management fee deposit	2,396.22
Rates	8,272.00		Electricity deposit	770.00
Management fees	22,910.50		Water deposit	400.00
	458,864.84		Stamp duty	10,100.00
			Legal fee	5,900.00
				113,073.65

73.Arithmetically, therefore, the plaintiff had contributed about 80% and the defendant had contributed about 20% by proportion.

74.In line with the authorities and having taken into account the whole course of dealing between the parties in relation to the property, I am driven to the conclusion that the fair apportionment of the beneficial interest in the property should be 75% in favour of the plaintiff and 25% in favour of the defendant.

How should the proceeds of sale be distributed between the plaintiff and the defendant?

75.Accordingly, the proceeds of sale of the property should be distributed between the plaintiff and the defendant at the proportion of 75% in favour of the plaintiff and 25% in favour of the defendant.

Costs

76.In a case of this nature where the parties are competing for a bigger share of the pie, the appropriate costs order should be one of no order as to costs.

77.Therefore, I make an order nisi that there be no order as to costs. In the absence of an application by either party to vary the same within 14 days from the date of this judgment, the order nisi shall become absolute.

Mr Patrick Siu, instructed by S K Lam, Alfred Chan & Co for the plaintiff   

Miss Emma Wong, instructed by K M Lai & Li for the defendant

[1] Original text: "請你在下星期一下午十二時或以前跟我對數，我今晚要上大陸，如果你想明天對數的話，請發短訊給我告知時間。如果你限期前仍不願對數，我惟有交給律師處理。我只是想知道你對不對數？惟有見面才可解決問題，不對數就永遠計到不到比率，如果你堅持不對數的話，不想私底下解決，我也無話可說，只好透過律師跟你談了"

[2] Original text: "你搵家姐日日迫我，屈我，害我甘就係所謂解決問題啦！你有心對數就唔好下下叫佢地鬧我，命令我，我唔係狗隨意任你地玩，一早我就想對數，因為我一早想脫離你地 ..."

[3] Original text : " ... 她對我們說她比面媽媽現在比兩個方案你選-1個就是你要遵守當初你和她初買樓的承諾賺了錢買樓比媽媽！你可以佔3分2-而她要佔3份1利潤-因為這她才可買下翠林比父母住的！2個方案就是-若你做不到-就要向她當面道歉 ... 現她只要你向她道歉一聲-她就算了-道了歉後她可按照傾你的要求按比例寫分配買樓-而你們也需再對數-而你再選過另一間律師樓寫分配！..."

[4] Original text : " ... 她不同意比例的話，可以把她的供款紀錄交給我的律師，他會計清楚 ..."