Chan Chun Ni v. Chan Ngai Keung

HCA 2206/2018

[2022] HKCFI 3031

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2206 OF 2018

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Before:  Hon Au-Yeung J in Court

Dates of Hearing:  21-24 February and 21 March 2022

Date of Judgment:  30 September 2022

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J U D G M E N T

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A.  INTRODUCTION

1.The Plaintiff is the younger sister of the Defendant. The Defendant used to hold the subject premises (“the Premises”) in joint names with their mother (“Mother”). After Mother passed away, the Plaintiff claims against the Defendant that the Premises has been held by the Defendant on trust for himself and the Plaintiff as surviving joint tenants in equity. The Plaintiff bases her claim on common intention constructive trust, resulting trust and proprietary estoppel. The Defendant denies the same.

B.  FACTUAL BACKGROUND

2.Save where otherwise specified, the facts in this section are undisputed or indisputable as being supported by documents.

3.The Plaintiff, the Defendant and their Mother used to live in one of 2 rooms in a flat shared with 5 persons of Grandmother’s family. It had always been the wish of Mother, the Plaintiff and the Defendant to have a residence of their own.

4.On 4 November 1991, Mother and the Defendant acquired the Premises at Flat G on 5/F, Fu Wah Court, Nos. 42-44 Hiu Kwong Street, Kowloon as joint tenants (“the Acquisition”). The purchase price was HK$798,000, which was paid partly with a down payment of HK$79,800 and partly with a mortgage loan of HK$718,200 from the bank (“the Mortgage”). It was the suggestion of the estate agent to use only the names of Mother and the Defendant as registered owners so as to obtain a larger mortgage.

5.Initially, it was Mother and the Defendant who had been repaying the mortgage instalments because the Plaintiff still had 4 years to study at college from 1991.

6.Soon after she graduated from college in July 1995, the Plaintiff started making monthly payments of HK$6,000 or more to Mother. There is dispute as to the nature of such monthly payments. The Plaintiff claims that they were for repayment of monthly mortgage and household expenses. The Defendant claims that such payments were made to Mother for common living expenses and were at Mother’s free disposal.

7.In June 1996, Mother retired and ceased to repay the Mortgage herself.

8.On about 15 June 1997, the Plaintiff won a prize of $520,000 in horse race betting. At the proposal of Mother, on or around 4 July 1997, the Plaintiff used the prize to pay off the outstanding Mortgage of HK$492,506,17 and the last instalment of HK$6,206. There is dispute as to whether she provided $500,000 or $505,000, but it does not affect the overall analyses or ultimate decision. I simply call this amount “the Winnings”.

9.There is dispute as to the nature of payment of the Winnings to Mother. The Plaintiff claims that it was her contribution towards the Mortgage as she had beneficial interest in the Premises. The Defendant claims that it was an interest-free loan to Mother for which the Defendant was to personally repay.

10.At some stage, the Defendant and his wife moved out from the Premises and the Defendant had ceased paying any household expenses to Mother, while the Plaintiff had been paying HK$3,000 per month to Mother for payment of rates, government rents and outgoings of the Premises. The Plaintiff also took care of Mother in her daily life.

11.In 2015, there was an argument between the Plaintiff and the Defendant’s wife (“2015 Argument”). In the same year, Mother was diagnosed with cancer.

12.In about 2016, Mother told the Defendant about her will (“Purported Will”). She died on 31 July 2017. The Defendant became sole owner of the Premises by survivorship.

C.  PARTIES’ RESPECTIVE CASE

13.It is the Plaintiff’s case that at all material times, Mother, the Defendant and the Plaintiff had an agreement or common intention at or before the time of the Acquisition that the Premises would be held for all three of them as joint tenants in equity (“the Common Intention”). The Plaintiff had contributed monthly payments and the Winnings towards repayment of the Mortgage:

Principal repayment of monthly instalments up to 4th July 1997	HK$34,036.97
One-off principal payment on 4th July 1997	HK$492,506.17
Total	HK$526,543.14

14.Alternatively, by reason of her contribution to the repayment of Mortgage, the Plaintiff claims under a resulting trust. Further or in the alternative, the Plaintiff claims that the Defendant is estopped from denying that the Plaintiff is beneficially entitled to the Premises on the ground that a representation had been made to her that she would have beneficial interest by virtue of the pre-acquisition discussion.

15.Although her contribution is equivalent to 65.9% interest of the Premises, the Plaintiff confirms that she is only claiming 50% interest in these proceedings if any trust is found to exist.

16.The Defendant denies the Common Intention and avers that Mother decided to acquire the Premises in joint names with the Defendant only. The Winnings were an interest-free loan from the Plaintiff. During Mother’s lifetime, HK$485,000 had been repaid to the Plaintiff. Further, the Purported Will provided that upon “taking back the property rights”, the Defendant should repay the remaining HK$20,000 to the Plaintiff and the Premises would belong to the Defendant.

17.The Plaintiff denies that the Winnings were a loan or that there had been any repayment. Mother had in fact borrowed or taken money from the Plaintiff in the amount of HK$396,000. The HK$485,000 from Mother was partly to repay the HK$396,000 and to give an education fund to the Plaintiff’s daughter. There was a balance of about HK$11,000 loan which had never been repaid by Mother.

D.  ISSUES

18.The issues have been agreed and can be briefly summarised as follows:-

(1)  Whether at or before the time of acquisition, there was the Common Intention, and if so, whether a common intention constructive trust in favour of the Plaintiff has arisen (“Common Intention Issue”);

(2)  Whether a resulting trust in favour of the Plaintiff has arisen, in respect of her substantial contribution to the purchase price of the Premises (“Resulting Trust Issue”); and

(3)  Whether the Defendant had made a promise to the Plaintiff that the Premises was jointly owned by all 3 family members in equity, and if so, whether he is estopped from reneging his promise (“Promissory Estoppel Issue”).

The 3 issues in fact rise and fall on the same express agreement in 1991. Reliance and detriment are not in issue.

E.  LEGAL PRINCIPLES

E1.  Common Intention Constructive Trust

19.Beneficial interest follows the legal title. The burden is on the party asserting the contrary to prove it. Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the claimant regarding their shared beneficial interests in the property that matters. The trust is constituted by the claimant’s detrimental reliance on their common intention and the unconscionability of the property owner departing therefrom. See Luo Xing Juan v Estate of Hui Shui See (2009) 12 HKCFAR 1, Ribeiro PJ, §38.

20.Hon Cheung JA in Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, at §§2.3-2.4 has identified two situations where a common intention constructive trust may be found:-

(1)  Where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially; or

(2)  Where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust.

21.In Liu Wai Keung v Liu Wai Man [2013] 5 HKLRD 9, G Lam J (as he then was) also stated the following:-

“46. The focus of the inquiry is therefore on the elements that the plaintiff has to prove in order to establish a constructive trust in his favour. In the context of this case, this means that the plaintiff must prove (i) there was a common intention between him and the defendant that the plaintiff was to be the beneficial owner of the Property despite that it was acquired in the defendant’s name; (ii) the plaintiff altered his position in detrimental reliance upon such common intention; and (iii) it is unconscionable for the defendant to assert ownership in reliance on her legal title to the Property.

47. In ascertaining whether there was a common intention, it is the objective intention of each party ‘which was reasonably understood by the other party to be manifested by that party’s words and conduct’ that one must examine: Gissing v Gissing [1971] AC 886, 906; Jones v Kernott [2012] 1 AC 776, 794 at para. 51.

48. In the present case it is the parties’ common intention at the time of the acquisition of the Property that is relevant, there being no suggestion from anyone that the intention had changed.

49. Such intention is to be found, first and foremost, from any agreement, arrangement or understanding reached between the parties with respect to the beneficial ownership of the property concerned based on evidence of express discussions. It is only where there is no evidence to support a finding of such an agreement or arrangement that the court seeks to infer from the conduct of the parties the relevant common intention: Lloyds Bank v Rosset [1991] 1 AC 107, 132-133.

50. Even where, as in this case, reliance is placed on an express agreement, arrangement or understanding between the parties, their other conduct remains relevant as a matter by reference to which their assertions about the agreement or understanding must be gauged and tested.”

E2.  Resulting Trust

22.No resulting trust will arise if money is provided as a loan, and it is only when a payment is voluntary that a resulting trust may arise: Big Island Construction (HK) Ltd v Wu Yi Development Co Ltd (2015) 18 HKCFAR 364, §44, following Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669.

23.A resulting trust may arise in two sets of circumstances:

(1)  Where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, by operation of law, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. This is generally known as “purchase money resulting trust”. This presumption of resulting trust can be rebutted either by direct evidence that A intended to benefit B, or by a counter-presumption of advancement. The latter can, in turn, be rebutted by evidence.

(2)  Where A transfers property to B on express trusts, but the trusts declared do not exhaust the whole beneficial interest, a resulting trust arises by operation of law. This may be called a “failure of disposition resulting trust”.

See Lord Browne-Wilkinson in Westdeutsche, 708A-C; explained in Hui Cheung Fai v Daiwa Development Ltd and Ors, HCA1734/2009, 8 April 2014, DHCJ Eugene Fung SC, §§60 and 64.

24.As Lord Browne-Wilkinson further explains that both types of resulting trusts are “traditionally regarded as examples of trusts giving effect to the common intention of the parties. A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention.” (at 708C)

25.As the Court of Appeal noted in Primecredit at §§2.6 and 2.7, there is another view that “a resulting trust is in response to the absence of any intention on the part of the person providing the purchase price to benefit the recipient (the lack of intention analysis)” (emphasis added).

26.If both parties allege that there was express discussion and actual intention as to where the beneficial interest in the property should lie, there is little scope for the operation of resulting trust: Liu Wai Keung at §45, G Lam J (as he then was).

27.Ms Ma, counsel for the Plaintiff, refers to 3 passages in Lewin on Trust, 20^th ed:

“If the evidence establishes that the transferor did not intend to make a gift then effect will be given to that intention, so that there is a resulting trust in favour of the transferor… That in any case where the transferor’s actual intention is established, there is no need to rely on the presumptions to show either that the transferor retains beneficial ownership or that the transfer takes effect as a gift: the resulting trust or the gift, as the case may be, is established by the evidence. (§10-006)

… a resulting trust, whether based on a presumption, or on the evidence, is founded on a presumption or evidence as to the transferor’s intention. There is no requirement as such for the transferee to share or participate in that intention [citing Lin v Hin [2013] 4 HKLRD 373, §26, CA]. Consequently, there may be a resulting trust even though property is put into the transferee’s name without his knowledge [citing, amongst others, Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, at 705, HL]. (§10-010)

What is presumed where the presumption of resulting trust applies is that the transferor does not intend a gift, and, where a resulting trust is sought to be established by reference to the transferor’s intention, the relevant intention is that he did not intend a gift. If the transferor intended to retain beneficial ownership, it necessarily follows that he did not intend a gift. (§10-011)”

28.The submission of Ms Ma, is that, as transferor, the Plaintiff’s intention in using the Winnings indicated that she had no intention to make a gift. Applying Lewin on Trust, a resulting trust would arise to give her beneficial interest in the Premises.

29.With respect, as pointed out by Mr Chiu, counsel for the Defendant, those passages in Lewin were written in the context of resulting trusts on gratuitous lifetime transfers. That was why only the intention of the transferor was relevant. Lin v Hin was a case on presumption of advancement. Westdeutsche concerns recovery of money under a commercial interest rate swap agreement. The facts are distinguishable from the present case. Lewin on Trust cited by Ms Ma is accordingly not relevant to the issues before me.

30.On the other hand, Mr Chiu points out the effect of mortgage payments, also by Lewin on Trust, §10-087:

“In a case where property is acquired on mortgage, the money borrowed and applied in the purchase will, where the resulting trust analysis applies, be taken as being a contribution to the purchase by the person or is obligated at the time of purchase to repay the loan. It will not be taken as a contribution by a person who subsequently pays mortgage instalments, even after the decision in Stack v Dowden. … It would therefore seem that, where a party in fact makes payments of mortgage instalments despite not having agreed to do so at the time of acquisition, his claim to a beneficial interest ought in principle to be available only in accordance with the common intention rules, considered above, and not with those relating to resulting trust.”

E3.  Proprietary Estoppel

31.The essential requirements of proprietary estoppel are:-

(1)  A representation or assurance made to the claimant;

(2)  Reliance by the claimant; and

(3)  Detriment to the claimant in consequence of his or her reasonable reliance.

See Cheung Lai Mui v Cheung Wai Shing [2020] 2 HKLRD 15 at §5.4.

32.A claim of proprietary estoppel is an equitable claim against the conscience of the “true” owner and is to be satisfied by the minimum award necessary to do justice, whereas a common intention constructive trust is to identify the true beneficial owners and the size of their beneficial interests: Cheung Lai Mui, §1.4.

F.  Evidence

33.The Plaintiff had 4 witnesses as to facts, ie herself, her husband (Mr Wong Kin Ming), Ms Hui Man Shui and Ms Luk Chui Shan. They have all tried to tell the Court the facts as best they could.

34.The Plaintiff was, of course, the main witness. She was firm and clear minded. She did not have documentary evidence to prove the Common Intention and her oral evidence was crucial.

35.The Court is naturally wary that in many cases on common intention constructive trust, the other main witness (Mother) had passed away. The Court considers the inherent probabilities and logicality of the Plaintiff’s own evidence and tests it against the contemporaneous documents and other irrefutable evidence.

36.The other witnesses for the Plaintiff were not privy to the discussion about acquisition of the Premises. Their evidence was to show the Plaintiff’s belief (over 5 years since the Acquisition) that she had beneficial ownership in the Premises. Ms Hui and Ms Luk, in particular, were truthful witnesses who had no interest in this case.

37.The Defendant had 3 witnesses as to facts, ie himself, Mr Cheng Chung Chiu (“Fourth Uncle”, brother of Mother) and Mr Lee Lung Chuen (godfather of the Defendant). The Defendant was the main witness. His evidence was not entirely reliable on the reasons why he moved out of the Premises and where the title deeds were kept.

38.Without disrespect, his other witnesses, evidence was of peripheral importance. Fourth Uncle told the Court as to Mother’s intentions as to the Premises. Quite apart from being hearsay, his evidence was imprecise. Mr Lee was neither eloquent nor precise but he was able to remember major events. Where specified, I shall rely on the evidence of Fourth Uncle and Mr Lee.

39.Based on the statement of claim (“SOC”), the important point of time was before and at the time of the Acquisition because that was the time when Mother and the parties expressly discussed the question of beneficial ownership and any common intention would have formed. Having regard to this being a domestic matter, one could expect no direct documentary proof and no independent witnesses of the Common Intention. The Court has thus to draw inferences from surrounding circumstances, including conduct subsequent to the Acquisition.

40.The evidence disclosed, without disrespect, that Mother favoured the Defendant more than the Plaintiff. Further, the Mother had different expectations of the Plaintiff and the Defendant. Mother would support the Defendant (a son) by purchasing a property for his marriage and pay the mortgage together. On the other hand, Mother considered that the Plaintiff would fare better with her higher education, and that the Plaintiff would not need a property as she could move into her husband’s home upon marriage.

41.The evidence also disclosed, again without disrespect to Mother, that she was financially dominating. She exercised control over the Plaintiff and Defendant’s money, including to invest as she deemed fit and to deploy their money without first consulting them. She would also use the Plaintiff’s money to assist the Defendant.

42.Two pieces of documentary evidence featured prominently at the trial:

(1)  The “Running Accounts” (Exh 1-6) which were records kept by Mother of her financial dealings. One should not read them as her accurate or full records because, after all, they were kept only for herself. The Running Accounts have been explored in detail during the oral evidence. There was nothing to show that Mother anticipated litigation or had other ulterior motives when prepareing the Running Accounts.

(2)  The Purported Will, which each party interprets differently in trying to ascertain Mother’s intention over the Premises.

43.Great weight should be attached to these 2 pieces of evidence as they represented contemporaneous records of Mother’s intention over the movement of money and ownership over the Premises.

44.It is not necessary to recite every piece of evidence or rehearse all of counsel’s submission. In the following analyses, I shall focus on the material evidence. Other disputed evidence not referred to, however decided, will have no bearing on my ultimate decision.

G.  COMMON INTENTION ISSUE

G1.  Evidence in support of the Plaintiff’s case

45.The Plaintiff has tendered weighty evidence in the following aspects:

(1)  Residence: having lived at the Premises, the Plaintiff resided in Mainland China between 1999-2001. She returned to live at the Premises from 2001 until 2003 when she bought Hiu Ming Court. Mr Wong would also reside there when he visited her every year. The Defendant has moved out for 25 years since 1997.

(2)  Title deeds: the title deeds of the Premises had been kept for some time in a safe deposit box in the joint names of the parties at a bank. That safe deposit box was cancelled in 2009 and the title deeds have since been kept in the Plaintiff’s safe deposit box at her home in Hiu Ming Court till now.

(3)  Monthly contribution: as soon as she graduated, since August 1995, the Plaintiff had been making monthly payments of about HK$6,000 to Mother. The monthly amount was reduced after discharge of the Mortgage (“Discharge”).

(4)  Discharge: the Winnings were the Plaintiff’s most substantial asset, which she could have used as downpayment to buy her own property. With her then income, she could have afforded a mortgage. And yet she used the Winnings for the Discharge (with agreement of Mr Wong), plainly thinking that she had ownership of the Premises.

(5)  Independent evidence: her 2 witnesses testified that when asked about what she would use the Winnings for, the Plaintiff replied that she would use them for discharging the Mortgage of “our family’s property”. That was an indication of the Plaintiff’s belief in part ownership of the Premises. Winning a horse race, especially with such a huge prize was a striking experience and I accept that Ms Luk and Ms Hui had reason to remember the Plaintiff’s reply.

Such evidence bore the hallmarks of beneficial ownership.

46.The Defendant gave inconsistent evidence during cross-examination on the following material facts:

(1)  Residence: he claims that the Premises was his permanent residence and yet he had moved out for 25 years.

(a)  Initially, he said that he alternated between living at the Premises and at his mother-in-law’s property because there was insufficient space when Mr Wong visited the Plaintiff in Hong Kong. Mr Wong would stay at the Premises for a few months, whilst the Defendant and his wife would stay at the mother-in-law’s place temporarily. When it was pointed out to him that the immigration policy then only allowed Mainlanders to enter Hong Kong twice a year, the Defendant changed his evidence and accepted that between 1997 and 1999, Mr Wong only came to live at the Premises 2-3 times. The unchallenged evidence of Mr Wong was that, being a government official, he had only a month’s annual leave. Between 1997 and 1999, he had only come to Hong Kong twice. Thus the reason given by the Defendant initially to live with his mother-in-law was not convincing.

(b)  The Defendant had to change his evidence by saying that he moved to live at the Hiu Wah Property (purchased in his wife’s name) in 2001, and then to his mother-in-law’s property in 2004 for his daughter to be taken care of by his mother-in-law. This move was quite contrary to the asserted purpose of purchasing the Premises as the matrimonial home of the Defendant.

(c)  The Defendant’s evidence was further contradicted by Fourth Uncle who said that the Defendant had been living at the mother-in-law’s property for the last 20 years. The Defendant had to say that he has still occupied the Premises by keeping his personal belongings there.

(2)  Title deeds: the Defendant changed his evidence substantially:

(a)  In his witness statement, the Defendant asserted that the title deeds were first kept in his wife’s safe deposit box at HSBC. They were later moved to a new safe deposit box under his sole name, after which the Plaintiff’s name was added in 1997. Later on, when the safe deposit box of the parties was cancelled, the title deeds were moved to the Premises. Since 2003, when the Plaintiff installed a safe at Hiu Ming Court, the title deeds have been kept there till now.

(b)  Under cross-examination, the Defendant changed his evidence. He testified that the title deeds were first placed at the Premises. Due to the concern of Mother over fire, it was decided to place the title deeds in the safe deposit box of the Defendant’s wife. Because there was not enough space in that safe deposit box, the Defendant opened a safe deposit box (no. 22692) under his own name. Not long after, the Plaintiff also requested to use the safe deposit box to store some of her accessories. It was only for that reason that the Plaintiff’s name was added to the safe deposit box. Due to the increasing cost of keeping a safe deposit box, Mother and the Defendant decided to cancel the safe deposit box and keep the title deeds at the Premises. He knew that sometime thereafter, the title deeds were placed at a safe at the Plaintiff’s home, but he did not know when.

(c)  There was no record in Mother’s notebooks that the title deeds had ever been kept in the safe deposit box of the Defendant’s wife. Instead, the Running Accounts showed that the title deeds were picked up on 17 March 1998 (shortly after the Discharge) and were “kept in a safe deposit box no. 22692 of the bank”, which was the one in the joint names of the parties. Such evidence corroborated the Plaintiff’s evidence and I accept the same to be true.

(d)  The Defendant’s change in evidence revealed his twist of the facts. He could not explain why, after cancellation of the joint safe deposit box, the title deeds have not been in his possession but in that of the Plaintiff who allegedly did not have beneficial ownership.

(e)  After the 2015 Dispute, as the Defendant admitted that the Plaintiff asked for a share of the Premises. It was simply impossible and unreasonable for the Defendant to allow the title deeds to remain in the possession of the Plaintiff if she did not have any interest in the Premises.

47.Against the weighty evidence of the Plaintiff, one has to consider other surrounding circumstances.

G2.  Circumstances surrounding the Acquisition

48.At or before the Acquisition, Mother had described the Premises as “3 persons’ property” (三個人的樓) or “a property of the family” (一家人的樓). That phrase was equivocal, which could mean that the Premises belonged to the 3 of them, or that it was a home for the 3 of them. The latter meaning was more probable in the light of the past crowded accommodation.

49.I do not consider the fact that it was the Plaintiff who accompanied Mother to select the Premises was of importance in the determination of beneficial ownership, as a purchaser often would want objective views from another person.

50.The decision to have only Mother and the Defendant as owners was made after discussion over having more than one owner prior to acquisition of the Property. The estate agent recommended having 2 working person’s names as owners as it would be easier to obtain a higher mortgage loan. However, despite no downside to the application for a mortgage, the Plaintiff’s name was not added as an owner.

51.Further, the decision upon a joint tenancy was made after Mother and the Plaintiff had learnt of the concept of joint tenancy and survivorship from a lawyer. I disregard the evidence of Fourth Uncle in this respect as he himself did not seem to know much about those concepts. Mother would have known that if she were to die first, the Premises would vest solely in the Defendant. However, the use of a joint tenancy was under the advice of the lawyer that this would save costs of assignment upon death of one owner. The use of joint tenancy was thus a neutral factor in the present case.

52.Mr Lee lent a sum of HK$100,000 to enable the Defendant to buy what was to be the latter’s future matrimonial home. The sum was borne out by the Running Accounts, of which 3 entries totalling HK$80,000 were referred to therein (C240, Exh P5). Below the 3 entities were the words “存2元” in blue ink but crossed out in black ink. The inference is that apart from the HK$80,000, another HK$20,000 was owed and repaid. That explained why the final line on the same page recorded “full repayment” (全數還清).

53.As the Court has observed during the trial, whether Mr Lee lent HK$100,000 or HK$80,000 was not relevant to the core issue (since it was not suggested that the difference was funded by the Plaintiff or that the loan was insufficient to cover the down-payment of $79,600). What was relevant was that Mr Lee’s loan tipped the scale in favour of an intention on the part of the Mother, the Defendant and Mr Lee in purchasing the Premises for the Defendant, but not for the Plaintiff.

G3.  Running Accounts

54.The Running Accounts pose problems to the Plaintiff’s case because (i) monthly payments from the Plaintiff had been treated as “common living expenses” (共同生活費用) and (ii) Mother regarded the Winnings and other monies from the Plaintiff as money that had to be repaid (“Repayable Sums”, “要還部分”) and were partly repaid.

55.In respect of monthly payments, the relevant record was C126 (Exh P1), which the parties agreed should refer to the years 1996 to 2001:

(1)  As the Court noted and which the Plaintiff confirmed during cross-examination, taking the sums in the right-most column (being sums which the Plaintiff had paid Mother), and excluding the Repayable Sums, those sums described as “Remaining Sums” (其他部分) were “of the same nature”.

(2)  The Remaining Sums were clearly treated by Mother as being made by the Plaintiff towards common living expenses (“其他部分均為共同生活費用，在可能基礎上給部分”).

(3)  The Plaintiff suggested that common living expenses (共同生活費用) included Mortgage repayments. I do not accept that because the right-most column on C126 comprised payments made by the Plaintiff even after the Discharge.

56.In the premises, the Plaintiff’s reliance on her monthly payments as Mortgage repayments was misplaced. The proper inference, instead, is that Mother, who dominated the family finance, freely decided on how those monthly payments should be used. She had not ear-marked any part of those monthly payments towards Mortgage repayment. She had, however, clearly distinguished between repayable and non-repayable sums.

57.In respect of the Winnings, the Running Accounts have at least 3 entries in 3 different booklets that disclosed Mother’s intentions:

(1)  C126 (Exh P1) was written not earlier than 2001. The Winnings on the right-most column was recorded as money paid by the Plaintiff to Mother. The same amount was put under the column of Repayable Sums. Under that column were other entries which, even on the Plaintiff’s own case, were loans from her to Mother and were repayable:

(a)  Bonus in the amount of HK$50,000, which the Plaintiff lent Mother in April 1997 for investment purposes;

(b)  Loan relating to the Defendant’s business in the amount of HK$196,000 (「轉強作生意」), which the Plaintiff lent in April 2001 and Mother promised to repay;

(c)  Withdrawal of $120,000 by an ATM card from the Plaintiff’s Hang Seng Bank account (“ATM $120,000”), which Mother and the Defendant took from the Plaintiff in August 1999 without her prior consent. Mother regarded this amount to be repayable by her.

(2)  C233 (Exh P4) was written not earlier than 1999. On the right side of the page, the Winnings were marked as having been applied towards the Discharge (「50萬攻[1]樓款」). That entry was listed together with the ATM $120,000 (「12萬(返鄉前交款) 」) under the heading 「應給珍兒數」, ie “sums that ought to be given to [the Plaintiff ]”.

(3)  D249 (Exh P6) was written not earlier than 2004. The Winnings were listed as 「攻[2]樓 50萬5千元」 under sums which the Plaintiff had given Mother, which also included (a) the ATM $120,000 (「珍兒返鄉交12萬」) and (b) the loan Relating to Defendant’s business (「強作生意：交20萬」), totalling $825,000 (「共82萬五千元」). Having deducted $385,000 previously paid by Mother to the Plaintiff (「珍妮共提：... 合共 38,5000[3]元」), the “total sum which remained to be repaid to [the Plaintiff]” was $440,000 (「總數尚需還珍兒：44萬元」).

58.Hence, the Running Accounts had consistently and repeatedly revealed that Mother had for some years felt that the Winnings had to be repaid to the Plaintiff.

59.The Plaintiff says that she had never heard of Mother’s intention to repay her. She submits that Mother’s intention over the Premises had changed from one of Common Intention in 1991 and 1997 to an intention to exclude the Plaintiff from ownership since 1999. The reason behind the change was that the Defendant’s business was closed in 1997 and his financial ability went downhill since 1999. Mother was worried about him, whereas the Plaintiff had been improving financially since her graduation from College. The Plaintiff’s acquisition of a property with her husband in 2002 reassured Mother that the Plaintiff would have a good standard of living whereas the same could not be said of the Defendant.

60.Further, the Plaintiff points out that the earliest time Mother wrote down her intention to repay the Winnings was in or after 2001. Accordingly, the Running Accounts should not be regarded as proof of there being a loan from the Plaintiff, but as proof of change of mind of Mother as to ownership of the Premises.

61.With respect, it is not open to the Plaintiff to submit that Mother had a change of mind as SOC §33 pleads that “the same common intention subsisted among the Mother, the Defendant and the Plaintiff as at July 1995, 1997 and late 2015” (emphasis added).

62.2015 was the year in which the Plaintiff requested Mother to add the Plaintiff’s name to the title deeds. Before that, there was absolutely no reason why Mother had to make up the Running Accounts in, amongst others, 1999, 2001 and 2004 and craftily mixed the Winnings with other Repayable Sums to create a false impression of loans to defeat the Plaintiff’s beneficial ownership over the Premises.

63.In summary, I am of the view that the Running Accounts do not support the Plaintiff’s case on her contribution to the Mortgage repayments and tend to show that the Winnings were a loan.

64.The Plaintiff claims that the Running Accounts and the Purported Will were inconsistent. I shall deal with it in sub-section G5 below.

G4.  Repayments of the loan

65.If the Winnings constituted a loan, whether or not the loan was repaid is irrelevant to the question of beneficial ownership. I only deal with the repayments for the sake of completeness and to test the veracity of each party’s case.

66.There is no dispute that the Mother had made 3 payments to the Plaintiff totalling HK$485,000. The dispute was over their purposes. The Plaintiff contends that they were to repay in part the loan of HK$396,000 and not the Winnings and applied for the following purposes:

(1)  The sum of $285,000 in November 2002 (“1^st Payment”) was part repayment for the Plaintiff to purchase her own property;

(2)  The sum of HK$100,000 in 2004 (after Mother obtained HK$120,000 from Grandmother’s estate (“2^nd Payment”) was a gift from Mother for the education fund of the Plaintiff’s daughter; and

(3)  The sum of $100,000 in 2007 (after Mother sold some shares) (“3^rd Payment”) was for part repayment.

67.Under cross-examination the Plaintiff testified that what she had asked Mother in 2002 to repay were “the amounts previously lent” to Mother without specifying HK$396,000. On further prompting, the Plaintiff testified that she had reminded Mother of the several lump sums advanced. However, I find that the figures mentioned in the witness box did not add up to HK$396,000. At that time, on top of the Winnings, Mother also owed the Plaintiff the ATM $120,000, the Bonus and the loan relating to the Defendant’s business. In my view, the Plaintiff could not unequivocally establish that the 1^st Payment was solely allocated to reduce the debt of HK$396,000. It was not surprising that the Mother, once again, exercised her own discretion to designate 2 Payments towards reduction of the loan from the Winnings.

68.As to the 2^nd Payment, the Plaintiff accepts that there is no documentary proof as to the Mother’s intention. She relies on the words “給珍兒: 10萬” on C140 to suggest that Mother made a gift instead of repayment of HK$100,000 to her. The Plaintiff’s suggestion may be true because for repayments, Mother would use words like “repay” (還) (eg C240 in respect of the loan from Mr Lee), or “taken by [the Plaintiff]” (珍兒取) (eg C249). Moreover, Mr Wong corroborated the Plaintiff in that he was present when Mother stated that it was education fund to his daughter. However, these were refuted by the Purported Will (see below).

69.Anyhow, whether Mother had repaid HK$485,000 or HK$385,000 is irrelevant to whether the Winnings were a loan or whether the Common Intention existed.

70.The Plaintiff queries why, if there had been a loan which the Defendant claimed he had to personally repay, the Defendant had not repaid her when the following funds were available:

(1)  In 1997 when the Defendant gave Mother $400,000 upon closure of his business;

(2)  In 1999, at the time when the ATM $120,000 was withdrawn, when the Defendant stated that the family had savings;

(3)  In 2001, when the Defendant’s wife purchased the “Hiu Wah Property” for the sum of $600,000 without a mortgage;

(4)  When the Defendant learnt from Mother the contents of the Purported Will, which showed that his joint account with Mother had $100,000;

(5)  When the Defendant withdrew $50,000 from his joint account with Mother after Mother’s death.

71.In my view, the queries can be easily answered. The HK$400,000 showed how much trust the Defendant had in Mother in the control over his finance. As shown by the Running Accounts, the discretion of when and how much of the parties’ funds to use plainly rested with Mother, even though the responsibility to repay fell on the Defendant.

72.As for the Hiu Wah Property, the uncontroverted evidence was that it was purchased with funds from the wife and her own mother.

G5.  Purported Will

73.The Purported Will was plainly intended, by its opening words, to be read after the passing of Mother. Clause 2 was in these terms:

“我們於91年買了富華閣5樓的樓宇，當時由我與強兒攻 *。至97年珍兒付出50萬5千元，由強兒續*樓，此後於03年珍兒買 ‘曉明’ 時，從銀行提取28萬5千元，然後於04年四舅分給錢，我給珍兒十萬元，後賣 ‘中信泰富’ 股票，又給珍兒十萬元，總共給了 ‘48萬5千元’，尚需給珍兒2萬元。如強兒在取回樓權時，請給珍兒 ‘2萬元’。因珍兒也曾表示，因哥讓她上學，自己失去上學機會。此樓宇願歸哥。” (underline added)

74.The Plaintiff submits that, when referring to the acquisition of the Premises, Mother used the word “we” (我們). When referring to specific items, she used “I and [the Plaintiff]” (我與珍兒) or “I and [the Defendant]” (我與強兒). It indicated that the Premises belonged to the 3 of them. Mother used the word “paid” (付出) instead of “lent”. The Plaintiff asks rhetorically, if Mother never believed that the Plaintiff had proprietary right in the Premises, why would Mother have used the phrase “taking back rights in the Premises” (如強兒在取回樓權時)? Further, the phrase “wish this property to belong to elder brother” (此樓宇願歸哥) implied that the Plaintiff had interest to begin with. If not, why would her wish be at all relevant to the Defendant’s ownership?

75.I do not agree with the Plaintiff’s construction:

(1)  There were 2 joint accounts and that was why Mother had to distinguish them by use of the words “I and …”

(2)  Although the word “we” indicated at first blush that the family of three bought the Premises, Mother gave a clear picture of each person’s contribution towards the price.

(3)  If Mother had thought that the Plaintiff had paid in the sense of contributing to the purchase price, there was no need for Mother to give an account of repayment.

(4)  Mother had been told the meaning of survivorship at or about the time of Acquisition. She and the Defendant had understood that there was a simple procedure to go through after her death to enable the Defendant to have full ownership, and that explained the phrase “取回樓權”. Although Mother had made typos in the Running Accounts, I disagree with the Defendant that “取回樓權” was a typo meaning “取回樓契”. Mother had always used the words “契” or “屋契” in the Running Accounts and never “樓權”.

(5)  Mother had personally borne part of the Mortgage. The Plaintiff’s wish that the Premises would belong to the Defendant instead of fighting against the Defendant for a share must have been relevant to Mother’s view of ownership.

76.In my view, Clause 2 of the Purported Will was weighty evidence of the Mother’s intentions in the following aspects:

(1)  Mother stated that only she and the Defendant had repaid the Mortgage. The Plaintiff’s monthly payments between 1995 and 1997 were omitted. Mother plainly took the view that the the Plaintiff had never contributed to the Mortgage.

(2)  Mother regarded the HK$505,000 as a loan, which had been repaid, save for a balance of HK$20,000. That was consistent with the record of Repayable Sums in the Running Accounts.

(3)  Clause 2 stated in no uncertain terms Mother’s own perception of the 3 Payments and it is not open to the Plaintiff to specify other purposes of those Payments.

(4)  Mother clearly took the view that the Premises would ultimately belong to the Defendant solely.

(5)  Mother explained the Plaintiff’s willingness to let the Defendant own the Premises – that the Defendant let the Plaintiff receive education whilst he lost his own chance.

77.The Plaintiff was not aware of how the Purported Will came into being, save that in early 2016, she was told by the Defendant that Mother had prepared a will but was not told of the contents. She claimed that after Mother’s death, the Defendant once told the Plaintiff that Mother made the Purported Will but knew it was too unfair to the Plaintiff that she did not get round telling the Plaintiff. The Defendant has also subsequently asked the Plaintiff not to blame Mother for such a subsequent arrangement because it was his fault that, unlike the Plaintiff, he was not able to acquire a property on his own. The Defendant dared not say that the Plaintiff had no beneficial interest in the Premises.

78.I have already held that it is not open to the Plaintiff to assert a change in Mother’s mind. In any case, I do not see why Mother dared not to tell the Plaintiff if she really had a change of mind. It was not for the Court to criticize Mother’s bias towards her own children but the fact was that she had on more than one occasion favoured the Defendant at the expense of the Plaintiff eg (i) by withdrawing the ATM $120,000 without the Plaintiff’s consent; (ii) by asking the Plaintiff to use HK$200,000 to buy shares which were worth HK$100,000; both to help the Defendant. Although the Plaintiff refused (ii), she had lent around HK$200,000 in relation to the Defendant’s business.

79.Further, the Plaintiff’s contentions in paragraph 77 should be viewed in the light of the timing of preparation of the Purported Will. The Plaintiff told Mother about the 2015 Argument and claimed that Mother shared her grievance. The Plaintiff proposed to Mother that the Plaintiff’s name be added to the title deeds of the Premises.

80.I note that:

(1)  The Plaintiff has given inconsistent evidence. In §55 of her witness statement, she said that Mother had no objection to her proposal. However, in the witness box, she said that Mother did not give any immediate response to the proposal; Mother neither agreed nor objected. I am not satisfied that Mother had agreed to the Plaintiff’s proposal.

(2)  If the Purported Will was prepared before the 2015 Argument, and Mother shared the Plaintiff’s grievance or held a Common Intention with the Plaintiff, there was no reason why Mother would not change the Purported Will to reflect that.

(3)  If the Purported Will was prepared after the 2015 Argument, it was a plain indication that Mother did not accept the Plaintiff’s proposal or shared the Common Intention with her.

81.Finally, the Plaintiff points out that the Purported Will did not mention anything about the HK$396,000 owed by Mother to the Plaintiff. The Running Accounts disclosed that the Mother changed her mind and altered the records from time to time. For example,

(1)  The Defendant agreed that C233 was written in 1999. Mother did not record the bonus of HK$50,000 and the tax refund that the Plaintiff lent to Mother;

(2)  Subsequently, in C126 which Mother wrote in or around 2001, she recorded these two items for the first time;

(3)  In a yet later record written not earlier than 2004, the bonus and tax refund were missing again, and the alleged loan amount was changed from HK$500,000 to HK$505,000 (C233 and 249).

(4)  In C249, the Mother concluded that HK$440,000.00 should be paid to the Plaintiff but the Purported Will omitted the Plaintiff’s payments of HK$120,000.00 and HK$200,000.00.

82.With respect, it is not for the Court to guess why Mother had recorded the figures in the way. Counsel are agreed that the Exhibits simply did not disclose a pattern of which booklet was used for what purpose. However, it did not undermine the fact that the figures were genuine and that Mother had made repayment by the 3 Payments.

G6.  Other conduct of the Plaintiff before and after the death of Mother

83.With a view to adding her name to the title deeds, the Plaintiff had sought legal advice from a friend. The friend explained to the Plaintiff that since the latter already owned Hiu Ming Court, addition of her name to the title deeds would attract a significant amount of stamp duty. The move to add the Plaintiff’s name was thus stalled.

84.That piece of advice was plainly given with section 27(1) of the Stamp Duty Ordinance, Cap 117 (“SDO”) in mind, when stamp duty was chargeable upon conveyance of immovable property operating as a voluntary disposition inter vivos. However, if the “conveyance of transfer [is one] under which beneficial interest passes in the property conveyed or transferred or made to a beneficiary by a trustee … under any trust, whether expressed or implied”, the parties would be exempted from paying stamp duty: section 27(5) SDO.

85.The inferences could be either that the Plaintiff did not believe she had interest in the Premises after receiving the legal advice; or the friend had given the wrong advice. Both were equally possible and I place little weight on this aspect of the evidence.

86.What is more important, as Mr Chiu points out, is that none of the contemporaneous WeChat messages produced by the Plaintiff contained an assertion that she had beneficial interest in the Premises, not even when she asserted that Mother and/or the Purported Will were not truthful.

G7.  Summary of Findings

87.The evidence in favour of the Plaintiff as set out in paragraph 45 above is cast in doubt by the Running Accounts, the Purported Will and the evidence of Mr Lee that he provided money to enable the Defendant to buy a property. I find that the Common Intention was not shared by Mother. I also find that the Winnings were in the nature of a loan which had been repaid save for HK$20,000; and the Plaintiff’s monthly payments to Mother were not regarded by Mother as contribution to the Mortgage but as common living expenses. Lack of full repayment of the Winnings may warrant an order for repayment of the balance but not equitable relief in the form of a declaration of proprietary interest in the Premises. The claim in common intention constructive trust must fail.

H.  RESULTING TRUST ISSUE

88.The plea in SOC §36(3) is this:

“If the Plaintiff’s financial contribution had not been used for such purpose [ie as contribution to a jointly owned family property] because the beneficial ownership of the Premises was different from what she understood, a resulting trust over the Premises in favour of her arose.”

89.Firstly, there is no room for a resulting trust because the Plaintiff has put forward an express agreement (SOC §5) and so there could be no “presumed intention” on the part of Mother and the Defendant that all three of them were to jointly own the Premises: Westdeutsche Landebank Girozentrale, at §708C-D; Primecredit, at §§2.6 and 2.7; Liu Wai Keung, §45.

90.Secondly, SOC §36(3) is wrong in law. It boils down to a suggestion that payments made on a mistaken basis justifies a proprietary interest in the Premises by way of resulting trust. While mistaken payment is a classic case for unjust enrichment, it is clear that it does not afford a proprietary claim unless it is a Chase Manhattan Bank type of mistaken payment[4] where the recipient knew of the mistake, and the recipient’s conscience is affected. Even that gives rise to a constructive, not resulting, trust: Westdeutsche Landebank Girozentrale at 715B-C.

91.Thirdly, given the finding that the Winnings were a loan, there is likewise no room for resulting trust: see Big Island, at §44.

I.  PROPRIETARY ESTOPPEL ISSUE

92.In the present case, the pleaded representation is based on the same facts as the Common Intention: SOC §39. As I have rejected the Plaintiff’s case on Common Intention, a unilateral belief of the Plaintiff or participation in pre-acquisition discussion could not give rise to any representation. It also follows that the Plaintiff cannot establish detriment suffered in reliance on a non-existent representation.

J.  CONCLUSION

93.The Plaintiff fails on all 3 issues. Accordingly, I dismiss her claim. Consequent upon this ruling, the Plaintiff should deliver the title deeds to the Defendant.

94.Costs should follow the event and be borne by the Plaintiff. Given the value of the Premises (about HK$3,500,000 according to §48 of Defendant’s witness statement), this action should have been transferred to the District Court after the increase in its jurisdiction in December 2018. Both parties should bear responsibility in failing to seek a transfer. Accordingly, the costs should be assessed on the District Court scale. I make an order nisi accordingly.

95.The Plaintiff is at liberty to provide grounds of objection to the Defendant’s costs statement within 14 days. There shall be summary assessment on paper.

96.I thank counsel for their assistance.

Ms Van Ma and Mr Ernie Tung instructed by Mike So, Joseph Lau & Co., for the Plaintiff

Mr Byron Chiu instructed by Solomon C. Chong & Co, for the Defendant