To Chi Hung v. The Official Receiver & Receiver of the Property of Ng Bik Fung, A Bankrupt and Another

DCCJ 1336/2015

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1336 OF 2015

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JUDGMENT

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Issue

1.The only issue in this case is: if the plaintiff, Mr To, can prove and persuade the court that he is the sole beneficial owner of the Property[1] owning 100% interest (or any other percentage) in it.

2.On 4 December 1999, Mr To married with the 2^nd Defendant, Madam Ng; on 1 September 2003, the Property was purchased in their names as joint tenants [HB/77][2]. In or about April 2004, Madam Ng moved out of the Property and on 7 December 2004, she declared bankrupt.  On 28 February 2014, she filed the Notice of Application for Decree Nisi to be Made Absolute to divorce Mr To without his knowledge. 

3.As Madam Ng declared bankrupt;the Official Receiver (the “OR”) was appointed as the trustee-in-bankruptcy of her property and was sued as the 1^st Defendant.

4.Madam Ng absents from trial; Miss Chan, who acts for the OR, states clearly that she attends the hearing so as to assist the court.  She does not challenge Mr To’s evidence.

Mr To’s Case

5.Mr To’s unchallenged evidence is that:

a. The purchase price of the Property was HK$600,000.  The down payment $10,000 and all the costs and expenses in relation to the purchase were paid by him.  The balance of the purchase price of HK$590,000 was paid by way of loans advanced by the Hong Kong Housing Authority (HK$390,000) and the Bank of China (Hong Kong) Limited (HK$200,000) under the Home Assistance Loan Scheme (collectively, the “Loans”).  The Loans were secured by a legal charge on the Property (the “Legal Charge”) [HB/5, B/22 & 28];

b. When the Property was purchased, it was the couple’s common intention and agreement that Mr To would have the entire interest in the Property (the “Common Intention”);

c. In detrimental reliance on the Common Intention, Mr To made all the payments for acquisition of the Property and all the Legal Charge monthly instalment repayments from his income.  Madam Ng has not made any contribution toward the acquisition of the Property or the monthly legal charge repayment; nor has she made any contribution to the welfare of the family which enabled her to acquire any interest in the Property;

d. By reasons of the matter aforesaid, Mr To is and was the sole beneficial owner of the Property.

The Law

6.Pursuant to p.206 of Snell’s Equality, 13^th Ed:

“Another common case of an implied or resulting trust is where on a purchase property is conveyed into the name of someone other than the purchaser.

‘The clear result of all the cases, without a single exception, is, that the trust of a legal estate, whether freehold, copyhold, or leasehold; whether taken in the names of purchasers and others jointly, or in the names of others without that of the purchaser; whether in one name or several; whether jointly or successive, results to the man who advances the purchase-money. This is a general proposition supported by all the cases, and there is nothing to contradict it; and it goes on a strict analogy to the rule of common law, that where a feoffment is made without consideration, the use results to the feoffor.’

The doctrine applies to pure personalty as well as land.”

7.In Lee Tso Fong v. Kwok Wai Sun & Anor. [2008] 4 HKLRD 270, §§5:

“... where a person purchases property with his own money and directs that the property be transferred to the name of another, in the absence of evidence to the contrary, there is a presumption that the property is held by the person to whom it is transferred under a resulting trust in favour of the person who provided the money for its purchase. The law imputes a common intention in the parties to hold the property under a resulting trust even in the absence of such intention. This presumption may be rebutted by proof of the actual common intention of the parties. The classic authority for this proposition is Dyer v Dyer (1788) 2 Cox Eq 92.”

Mr To’s Application

8.Upon the unchallenged evidence, I accept Mr To has contributed all the purchase price of the Property and pursuant to the Common Intention, he should have the entire interest in it.  Madam Ng is to hold her share of the Property on trust for Mr To and that she is to transfer back her share of the Property to him as and when she is so required.

9.Accordingly, pursuant to section 43 (3) of the Bankruptcy Ordinance, the Property does not form part of Madam Ng’s estate.

Conclusion

10.Hereby I order that:

a. A declaration that Mr To is the sole beneficial owner of the Property owning 100% interest in the Property;

b. Madam Ng do execute and deliver to Mr To an assignment of the Property into the sole name of Mr To and in the absence of compliance, the Register of the District Court is authorized to execute the said assignment;

c. There be no order as to costs and Mr To’s own cost be taxed in accordance with the Legal Aid Regulations.

Mr Tsang Chung Yu of C Y Tsang & Co for the plaintiff.

Miss Helen Chan of Official Receivers for the 1^st defendant.

The 2^nd defendant is not represented and did not appear