So Ho Yee v. Hui Mamie
Read the full judgment text of DCCJ 7002/2020 on BabelCite. This District Court judgment was delivered on 29 December 2023.
1. This action concerns a dispute over the ownership of a village house situated at 3 Ma On Kong, Yuen Long, New Territories (“the Property”) registered in the sole name of the Defendant (“D”). The Plaintiff (“P”) seeks a declaration that D holds the entire share, or alternatively such share as the Court shall determine, of the Property on trust for her.
Cited by 1 case · Cites 14 cases
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DCCJ 7002/2020 [2023] HKDC 1847 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 7002 OF 2020 ———————————— BETWEEN
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———————— JUDGMENT ———————— A. Introduction 1.This action concerns a dispute over the ownership of a village house situated at 3 Ma On Kong, Yuen Long, New Territories (“the Property”) registered in the sole name of the Defendant (“D”). The Plaintiff (“P”) seeks a declaration that D holds the entire share, or alternatively such share as the Court shall determine, of the Property on trust for her. 2.P also claims that a sum of HK$636,950.24 was misappropriated by D (“the Misappropriated Sum”) and seeks inter alia a declaration that the Misappropriated Sum is held on trust for P and should be returned to P. 3.D has counterclaimed against P for various sums of monies which are claimed to be loans from D to P and for monies overpaid by D to P. 4.The trial of this action took place before me on 18-20, 24-25 and 31 October 2023. P was represented by counsel Mr Esmond Wong and Mr Cyrus Lau (“P’s counsel”). D was represented by counsel Mr Lawrence Law (“D’s counsel”). 5.Counsel for parties had filed substantial opening submissions, closing submissions and reply submissions. For the avoidance of doubt, all the submissions (whether oral or written) have in fact been considered, and any points made by counsel not expressly discussed in this Judgment should not be regarded as having been overlooked by this Court. B. Background facts and the parties’ respective case B1. The parties and their relationship 6.P and D were first acquainted in August 2006. They soon became a couple and their relationship developed into an intimate one. They ended their relationship in December 2019. 7.When they were first acquainted, D was an Associate Professor of the Faculty of Medicine of the Chinese University of Hong Kong with a monthly salary of around HK$150,000.00. 8.P was a licensed insurance broker. According to P, she maintained an insurance broker licence with Midland Financial Planning Limited (“Midland”) after she turned down a job offer with Midland in around mid-2006. It is her case that she turned down the offer and did not practise to accede to D’s request to her in October 2006 to take care of D and their cohabitation home. Her licence was withdrawn by Midland on or before 28 September 2009. 9.On the other hand, D’s case is that she did not ask P to give up her job to take care of her. P had no job in October 2006. However, P worked for Midland from November 2006 to March 2008 as an Assistant Manager. There is no dispute that when living in Canada, P worked for several companies such as IKEA and Marks & Spencer for around 6 months or one year for each job. 10.When P and D were acquainted, P had already separated from her previous husband (“Mr Tsui”) even though the divorce decree absolute was only granted in November 2006. 11.According to P, the two children from P’s previous marriage with Mr Tsui (“the Children”) lived with P at Flat 3L, Kam Shan Building, Tai Wai, New Territories on Mondays to Thursdays. On Fridays to Sundays and all holidays, the children resided with Mr Tsui. D’s case is only on some weekends and holidays they resided with Mr Tsui. 12.P’s case is that she and D started to cohabit in around September 2006. Initially they cohabited at Flat 1308, 13/F, Ka Wai House, Ka Tin Court, Tai Wai, New Territories (“Flat 1308”), which was registered in the names of D’s parents, later at 3505, 35/F, Ka Wai House, Ka Tin Court, Tai Wai, New Territories (“Flat 3505”) and eventually at the Property. 13.On the other hand, D denied that they ever cohabited. D said that she either lived with her parents, in the call/duty room of doctors at the Prince of Wales Hospital or alone in Flat 3505 and the Property, although sometimes P and D spent time together overnight. 14.In D’s opening submissions, the relationship between P and D was described as a “dating relationship” and that they did not “live like a couple”. Whereas in P’s opening submissions, it was submitted that P and D’s relationship “is no different to that of a housewife and high-income earning husband”. 15.However, it is not disputed from October 2006 until around July 2019, D gifted P initially the sum of HK$15,000.00 per month which was gradually increased to HK$30,000.00 per month. D said that she gave such amounts to P out of sympathy or love and affection but not out of any promise. 16.P also received ancillary relief from Mr Tsui. This included: (1) a lump sum of over HK$2,000,000.00; (2) transfer of the whole interest of Flat G, 26/F, Tower 3, Granville Garden, No 18 Pik Tin Street, Shatin, New Territories (“Granville Garden”) to P from which she received monthly rental income of around HK$16,000.00 at the time; and (3) HK$15,000.00 per month as maintenance for the Children. P’s case is that she told D of the maintenance received from Mr Tsui during the first few months of their acquaintance. 17.It is also not disputed that in August 2008, D executed a will which provided that P would be entitled to half share of the value of her estate and D’s parents would be entitled to the other half after D passed away (“the Will”). B2. Purchase of Flat 3505 18.According to P, in around mid-2009, D decided to return Flat 1308 to her parents and looked for a new residence for their cohabitation as a gift to P. D discussed acquiring Flat 3505 which was in the same building as Flat 1308. At first, P hesitated to receive such a gift and offered to contribute half of the purchase price by expressing to D: “我唔好意思受咁大嘅禮，而且一個我冇付出嘅家，會令我冇歸屬感，其實我有錢，不如我俾返一半啦。” (Agreed English translation: “I am shy to receive such a big gift, and I will have no sense of belonging to a home without my contribution, actually I have money, I would rather contribute to half [of the purchase price of Flat 3505].”) D has denied this. 19.In response, D said: “間屋係我送俾妳，妳唔使出錢，以後呢個就係我哋嘅家，間屋我哋聯名，如果妳覺得唔好意思，咁正如妳提議妳就負責間屋裝修同傢俬嘅費用。” (Agreed English translation: “The flat [Flat 3505] is my gift to you, you do not have to pay any money, this [Flat 3505] is our family home in the future, the flat [Flat 3505] will be registered in our joint names, if you are shy [to receive such a gift], then as you proposed you contribute to the renovation and furniture expenses of the flat [Flat 3505].”) This is also denied by D. 20.D’s case is that she only mentioned that Flat 3505 were to be in the joint names of P and D to pacify P. D denied that she intended to gift half or any beneficial interest in Flat 3505 to P. It is averred that any interest P had in Flat 3505 was held on trust for D. 21.On 25 August 2009, P and D signed an Agreement for Sale and Purchase to purchase Flat 3505. There is no dispute that D paid the purchase price (HK$1,620,000.00) and the incidental expenses for Flat 3505 without any mortgage. Flat 3505 was conveyed into the joint names of D and P on 30 September 2009. 22.There is also no dispute that P paid for the renovation and furniture expenses of Flat 3505. According to P, such expenses in total were over HK$100,000.00 but D has denied this amount. Nonetheless, D’s case is that she subsequently reimbursed P for the renovation expenses in the amount of HK$61,500.00 to HK$71,500.00 by issuing various cheques to P on 8 October 2013. However, those cheques were never deposited by P. 23.P’s case is that she also contributed out of her own money to the joint living and household expenses of Flat 3505. She remained jobless in order to maintain the housekeeping for D and assist D in her investments. B3. Purchase of the Property and sale of Flat 3505 24.When pets could no longer be kept at Flat 3505, there was a discussion between P and D about the purchase of another property. 25.It is not disputed that it was P who spotted the Property online. Subsequently, it was purchased for the price of HK$1,230,000.00. Both P and D were aware that Flat 3505 could be sold at above HK$2,500,000.00. 26.According to P:
27.Save for what said at subparagraph (4) above, D denied the other words were said in their discussion. D averred that she said those words as an excuse not to register the Property in the joint names of P and D. 28.On 25 February 2011, P and D attended the offices of Messrs Louis K Y Pau & Company and the Sale and Purchase Agreement was signed by D. The deposit was paid by D and the balance of HK$1,107,000.00 was paid by a cashier’s order issued by P (having earlier been put in funds by D by 2 cheques in the sum of HK$780,000.00 and $327,000.00). D’s case is that she asked P to purchase the cashier’s order on her behalf because she was too busy to arrange it at the bank. 29.The Property was assigned to D’s sole name on 31 March 2011. 30.Subsequently, Flat 3503 was sold at a price of HK$2,600,000.00 on 20 March 2012. 31.P’s case is that she contributed to all the renovation, substantial improvement and furniture expense of the Property at her own cost in the amount of over HK$200,000.00. Whereas D’s case is whilst P paid for part of the renovation expenses, she had reimbursed P for all those expenses in the sum of HK$128,500.00 to HK$138,500.00 by issuing cheques to P on 8 October 2013. As mentioned, those cheques were never deposited by P. 32.It is also P’s case that she contributed out of her own money to the joint living and household expenses of the Property. Later, when she was living in Canada, she hired a domestic helper to look after D and their household in Hong Kong. B4. D’s counterclaim for various sums of monies paid to P 33.In 2012, P notified D that Mr Tsui agreed to increase maintenance for the Children on the condition that the money would be transferred through a bank account in China. As a result, as requested by P, D opened a bank account with China Citic Bank in Shenzhen (“Shenzhen Citic Bank Account”) in order to receive the maintenance from Mr Tsui. 34.P’s case is that she did not know the actual amount of maintenance that D had received from Mr Tsui over the years. 35.D, however, claims that from 2013 to 2019, P repeatedly asked D to make withdrawals to P or her brother’s bank accounts. It is D’s pleaded case that P confused D on the amounts owed to P and as a result wrongly overpaid the amount of RMB¥1,192,106.10 to P which D counterclaims against P. In D’s opening submissions, for the first time it was asserted that “the confusion by P causing D to overpay P was a fraud or fraudulent breach of trust to which P was a trustee in respect of the sum with D as a beneficiary under the trust.” In D’s witness statement, she said that she counterclaims the return of RMB¥918,034.50 after crediting two cheques admittedly not credited by P. In D’s closing submissions, after deducting RMB¥40,000.00 which admittedly was deposited by P into D’s foreign exchange account with Standard Chartered Bank, it was confirmed that D counterclaims RMB¥878,034.50. 36.In around September 2015, P went to Canada with the Children to accompany and supervise their education. Since then, P came back to Hong Kong 2 to 3 times a year spending at least 5 months each year in Hong Kong when she cohabited with D in the Property. D also travelled to Canada to visit P twice a year until their relationship ended in December 2019. It is not disputed that P received various amounts in Canadian dollars from D totalling CAD132,943.00 (“the CAD Sums”). D’s case is that these were loans from her to P, whereas P’s case is that they were gifts. D counterclaims the CAD Sums from P. 37.On 29 March 2018, D issued a cheque of HK$650,000.00 to P which P deposited into an account maintained with DBS Bank (Hong Kong) Limited (“DBS”). According to P, this was expressed by D to be a gift to protect her future livelihood and to meet the minimum deposit level for DBS. D’s case is that this was a loan from her to P upon P’s request in order for her to invest in time deposits. 38.Furthermore, according to P, on 28 March 2019, she transferred a sum of HK$1,500,000.00 to D who was short of liquidity for her to invest in an insurance policy of China Life Insurance Co. It is P’s case that D expressed to her that D’s US dollar savings plan would mature soon and she would gift the realized value of that plan to P upon its maturity. D then gave her a cashier’s order in the sum of US$269,972.12 (“the USD Sum”) as a gift on 6 April 2019. D’s case is that that the USD Sum was a loan. In total, D counterclaims against P the sum of HK$1,255,782.54. B5. The alleged Financial Arrangement 39.In the summer of 2019, P decided to acquire a residential property in Vancouver. It is P’s case that she and D entered into the following express and mutually agreed financial arrangement (“Financial Arrangement”):
40.P’s case is that pursuant to the Financial Arrangement, she transferred the Misappropriated Sum to D in the following manner:
41.D has denied the Financial Arrangement. Rather, D avers that in October 2019, P requested from her a HK$1M loan (“the HK$1M Loan”) for P to purchase a residential property in Canada and promised to repay D soon. D deposited a sum of HK$1M into the bank account of P’s mother maintained with the Bank of China (Hong Kong) Limited (“BOC”) on 10 October 2019. It is said that the transfer of the sum from P’s DBS Accounts to D’s account and the cheque from P were partial repayment of the HK$1M Loan. D thus counterclaims the sum of HK$363,049.76. 42.There is no dispute that the Misappropriated Sum received by D was never transferred to P’s mother or returned to P. B6. Telephone conversation on 18 December 2019 43.On 18 December 2019, over a telephone call, D ended the relationship with P. It is P’s case that the follow conversation took place:
44.It is D’s pleaded case, and also according to her witness statement, that it was out of heated exchange of words that D said those words in sub-paragraph (1) of the preceding paragraph save she did not say she would pay rental to P. The rest of the conversation was not admitted. In D’s oral evidence, she denied also having said “妳俾我住住先”. B7. Gathering at Pokka Café on 22 January 2020 45.On 22 January 2020, there was a gathering attended by P, D, their mutual friend Ms Day Wong (“Ms Wong”) and D’s friend, Dr Tracy Lee. The gathering lasted 3 hours at Pokka Café in Tsuen Wan. During that gathering, P’s case is that the following were said in the presence of all:
46.D admitted that out of heated exchanges she had said the words in sub-paragraph (1) in the preceding paragraph, or words to that effect, in order not to provoke P during the gathering. D also admitted that she said the words in sub-paragraph (2) in the preceding paragraph. She denied she said the words in sub-paragraph (3) in the preceding paragraph but she did say she and P could not each live in a separate floor in the same house. 47.It is also P’s case that after they all stepped out of Pokka Café, P requested D to return the Misappropriated Sum to her and in reply D expressed to P: “元朗間屋轉妳名絕對足夠cover嗰60幾萬，唔好再追我” (Agreed English translation: “The transfer of Yuen Long house [the title of the Property] into your name is absolutely enough to cover the 600-odd thousand, do not chase after me.”). D admitted having said those words but she said those words because P kept on troubling her by wrongly alleging that she owed that money to P. C. The issues for determination 48.A Joint List of Disputed Issues has been submitted to me after the trial. In my view, the following are the main issues which need to be determined:
D. Applicable Principles D1. Common intention constructive trust 49.The applicable principles to common intention constructive trust are not in dispute between the parties. Although various authorities have been cited by counsel, I would gratefully adopt the succinct and useful summary of Deputy High Court Judge Alexander Stock SC in Leung Hang Lin and Li Kwai Fuk v Lam Mei Yung [2019] HKCFI 2819 at §8:
50.Moreover, there are authorities to the effect that where both parties allege express discussion and actual intention as to where the beneficial interest lies, there is little scope for the operation of a resulting trust: see Leung Hang Lin, §103 and Liu Wai Keung, §45. 51.In Primecredit Ltd, §2.3, it was also held that at least in the domestic context, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust. D2. Proprietary Estoppel 52.P also relied upon proprietary estoppel. In Cheung Lai Mui v Cheung Wai Shing [2020] 2 HKLRD 15 at §5.4, it was held that the requirements for proprietary estoppel are:
D3. Quistclose trust 53.In respect of the Misappropriated Sum, it is P’s case that D holds the sum on a Quistclose trust for her. The principles of Quistclose trust were explained by the Court of Appeal in China Life Trustees Ltd v China Energy Reserve and Chemicals Group Overseas Co Ltd and Another [2023] HKCA 966 at §§23-31. Essentially:
D4. Approach to fact finding and assessment of credibility 54.As for evaluating the evidence given by witnesses at trial, I bear in mind to the guidance of Deputy High Court Judge Eugene Fung SC in Hui Cheung Fai and Another v Daiwa Development Ltd and Others (unreported), HCA 1734/2009, 8 April 2014 at §§77-83:
55.I would also take heed of the more recent observations of the English Court of Appeal in NatWest Markets Plc v Bilta (UK) Ltd (In Liquidation) [2021] EWCA Civ 680 at §§49-51:
E. My assessment of the witnesses’ evidence E1. P’s evidence 56.P gave evidence for most of the first 3 days of trial. I am of the view that although her evidence was not perfect in the sense there were some inconsistences between her evidence and the pleaded case, generally P gave evidence in a straightforward manner and was not hugely shaken in cross-examination which lasted more than 2 days. Having regard to the entirety of her evidence, I am of the view that she is a credible and reliable witness and I would prefer her evidence over D’s. The matters which she gave evidence on happened over 10 odd years ago. I take into account in my assessment of her evidence that there may be honest but mistaken recollection or reconstruction of events due to the passage of time. 57.D’s counsel had submitted that there were plenty of examples of her evidence being self-contradicting. Given P was extensively cross-examined on matters or incidents including those which are not central to the disputed properties or sums of monies in this action spanning the 13 years relationship, I will only summarize below the more pertinent examples submitted by D’s counsel. 58.First, it was submitted that P was evasive in answering whether she had emigrated to Canada since 2015. Her answer was that she had gotten citizenship in 2008 but she resided in Hong Kong most of the time. Although D’s counsel suggested that because P had already emigrated to Canada in 2008 and hence had already emigrated to Canada in 2015, this was not agreed to by P. She said (and this is not disputed) from 2015, she spent 5 months in Hong Kong per year and D also travelled to Canada to visit her twice a year. I do not regard P as being evasive on this matter. It was further submitted that there is serious doubt on her getting citizenship in 2008. However, no evidence was adduced to demonstrate that she did not acquire citizenship as she alleged. Even if she told lies about this, it is hardly a central or important issue that I need to determine such that I would place such weight to discredit her in respect of all her evidence. 59.Second, D’s counsel pointed to the fact that in the Statement of Claim, it was pleaded that P “quitted her job in around October 2006”. In cross-examination, she agreed she did not have a job from October 2003 to October 2006. According to her, she was offered a job from Midland in mid-2006. She told D about this job offer but in August or September 2006, D told her to give up this job. Therefore she maintained a licence with Midland and she would only receive commission if she made any orders for insurance. Strictly speaking, the position was that P gave up the offer for employment from Midland. She did not quit her job. Indeed this is made clear in the Amended Reply that P did not have any full-time job in October 2006 and she rejected the job offer from Midland. There is therefore no inconsistency between her evidence and pleaded case or such inconsistency as would dent her credibility. 60.Third, D’s counsel referred to a CV which P has sent to D for her to print out. In that CV, it stated that P was an Assistant Manager in Midland from November 2006 to March 2008. She admitted in cross-examination that this was not true because she never worked for Midland and has not worked as an Assistant Manager. D’s counsel put to P that she made a false CV and intended to use the false CV to make find a job and suggested that she was a dishonest person. However, P disagreed with D’s counsel that she intended to use that CV to apply for jobs. She further said that in fact it was never sent out for any job application. She explained the purpose of making the CV and sending it to D was to irritate D whom P knew did not like her to work but had threatened not to pay her monthly maintenance. I do not agree that P’s character and credibility are seriously in doubt by this matter. 61.Fourth, P’s pleaded case was that the whole interest of Granville Garden was transferred to her but in cross-examination she agreed it was held on trust by her for the Children. It was submitted by D’s counsel that she exaggerated her case of how financially abundant she was. I do not find there to be any serious inconsistency between her evidence and her pleaded case. Whether or not Granville Garden is held beneficially for the Children is besides the point. The fact of the matter is that the rental income of around HK$23,500.00 each month was received by P for her use and together with other maintenance from Mr Tsui, it cannot be said that she had exaggerated her financial abundance. 62.Fifth, D’s counsel pointed out it is P’s pleaded case throughout the cohabitation with D in the Property, P contributed out of her own money to the joint living and household expenses of Flat 3505 and the Property. In P’s witness statement, she stated that she always contributed out of her own money from rental income of Granville Garden and Mr Tsui’s maintenance. However, D’s counsel submitted that in cross-examination she agreed the several thousands spent for living and household expenses were met by the monthly payments made by D to her. It is therefore submitted there was internal inconsistence in P’s evidence. However, even though when D’s counsel asked P, “would those several thousands be met by D’s monthly payments to you?” she answered, “you may put it that way”, it seems to me that the gist of P’s evidence was that she did not differentiate money from Mr Tsui, D and the rental income from Granville Garden. If her evidence is properly understood, I do not find any serious inconsistency or contradiction. 63.Sixth, D’s counsel said there was internal inconsistency between her oral testimony and witness statement in the amounts spent on the renovation of the Property. In her witness statement, she stated that she spent over HK$200,000.00 (as was P’s pleaded case) but in cross-examination she admitted it might have been less that HK$200,000.00. She went on to explain that as she did not have all the documents such as bank statements, cheque stubs and it happened over 10 odd years ago so the amount of HK$200,000.00 was an estimation. I accept P’s explanation as being a credible one. In any event, I do not regard the discrepancy between over HK$200,000.00 and under HK$200,000.00 as a significant one. 64.Seventh, D’s counsel submitted contrary to P’s pleaded case that prior to the acquisitions of Flat 3505 and the Property there were specific agreement that P would be responsible for the renovation and furniture expenses, in cross-examination she agreed that it was D who paid for the first 2 instalments to Long Progress Limited, one of the contractors. D’s counsel expressly asked P why she did not pay for the first 2 instalments if it was her case that she was responsible for the renovation expenses. Her evidence was that at that time she had found an old contractor from Sheung Shui but D found Long Progress Limited online. They had some differences between them on the choice of contractor and it may have been this reason why she didn’t pay for the first two instalments. She fairly accepted that she had a vague recollection on this matter. Even though it was put to her there was no agreement or discussion prior to the acquisition of the Property that she would be responsible for paying the renovation expenses, she maintained that it was mentioned that she would be responsible as she was more familiar with renovation given she had dealt with the renovation of Flat 3505. I also do not accept D’s submissions that the shifting of evidence from P being responsible for all to some of the renovation and furniture expenses in view of her explanation given (which I accept) renders her evidence in this matter as contradictory or incredible. 65.Eighth, it was submitted that notwithstanding P’s witness statement said she paid around HK$55,000.00 for the glasshouse built on the roof of the Property, the quotation dated 29 August 2011 showed that the price was only HK$49,000.00. In cross-examination, P explained that the figure of HK$55,000.00 was according to the ATM deposit receipt which had faded so the exact amount was based on her recollection. In fact, there was a later quotation dated 7 September 2011 which included the heat-insulating ceiling of HK$24,000.00 for which deposit of HK$7,200.00 was stated to have been paid already leaving an arrear of HK$16,800.00. D’s counsel submitted that the price of the work for the heat-insulating ceiling (HK$24,000.00) together with HK$17,000.00 for the side sliding door and window were already included in the earlier quotation. However, if that was the case, I wonder why there would be later quotation for the further amount of HK$24,000.00. In any event, in re-examination, P confirmed that after the first quotation, the village head thought that the glasshouse was too near to his house and therefore an additional glass windows had to be constructed which were costs not included in the first quotation. 66.Ninth, D’s counsel submitted that P’s evidence about the reason for D to issue the 5 cheques during their quarrel on 8 October 2013 was beyond common sense. P’s evidence was that D issued to her the 5 cheques because she was breaking up with her and said since P always said that D owed P money, she issued the cheques to pay her back the monies owed. D’s counsel submitted if D was paying her a break-up fee, D would only have issued one cheque for a lump sum. The reasons why 5 different amounts were issued was because (according to D) it was P who asked D to reimburse or repay her 5 different amounts. This was denied by P. P’s counsel on the other hand submitted it can also be said that had P alleged D owed her money then D would also have issued her one cheque for the amount alleged owed. I do not regard P’s case in respect of this incident inherently incredible. There is no dispute that P never deposited the cheques. If P had demanded repayment or reimbursements of those amounts, she most likely have deposited those sums. She explained as they quickly made up that evening, she kept the cheques as a memento. This seems more likely to have been what happened. 67.Tenth, in respect of P’s evidence that she intended to buy D a BMW car as a birthday present, D’s counsel submitted this was totally incredible. D’s counsel submitted that if P had intended to buy the car for D, she would have paid for the entire purchase price at the car dealer’s and not just a deposit. Yet P’s evidence was that she signed a blank cheque and gave it to D to pay the balance of the purchase price when D went to pick up the car. I disagree there is anything unbelievable for P to act in accordance with the car dealer’s instruction on payment of deposit and then the balance when the car was picked up. There is nothing to this point. 68.Eleventh, relates to the WhatsApp message on 9 October 2019 where D asked P to give to D the account number of P’s mother and that D would transfer money into that account the next day. P’s response was: “not the 16th? I will have a sum of money matured at 2:00 p.m. on Friday in Citic. Will transfer to you. See if this can be done together.” P said that this conversation related to the Financial Arrangement. However, D’s counsel submitted that in P’s witness statement she said she only transferred the Misappropriated Sum in November and December 2019, the Financial Arrangement was to transfer P’s monies into the Citic Bank account of P’s mother not BOC Account, and hence P’s evidence was unbelievable. Yet in P’s witness statement, it was mentioned that initially it was intended P’s deposit of sums into D’s Citic Account would be transferred to the BOC account of P’s mother and that was how D got to know the BOC account number of P’s mother. It was only later in November 2019 that to enjoy a better exchange rate the deposit would be transferred to the Citic Bank account of P’s mother. This is also P’s pleaded case in the Amended Reply. 69.D’s counsel submitted that the evidence in this respect fits D’s case that in October 2019, P asked D to lend HK$1M to purchase a residential property in Canada and deposit it into the BOC account of P’s mother, with respect, I do not accept this quantum leap. This plainly contradicts the message on the next day following a photo of the BOC transfer advice for the HK$1M deposited and the message “Don’t need to pay me back the money, you keep saying that I owe you money, let us make it clear this time. If there are arrears, I will pay. Otherwise you can sue me in court.” This contemporaneous message on the same day of the transfer puts it beyond doubt that the transfer to P’s mother was not a loan. D clearly stated P did not need to pay back this sum and that it was intended to repay monies owed by her to P. 70.Twelfth, it was submitted that there was self-contradiction in P’s oral evidence that D said verbally that she [D] owed P a lot and later in her evidence P said D did not directly say she owed her money. However, P’s evidence was that D felt she owed P money so there was no inconsistency. 71.Thirteenth, it was submitted that it was not credible that the HK$1M was a break-up fee since in her witness statement she stated they made up quickly after the quarrel on 8 October 2019 so there was no reason why this sum was not returned to D when she returned to Hong Kong in December 2019. Furthermore, it was never stated in her witness statement or pleading this sum was a gift to her. However, in P’s witness statement she did refute that the HK$1M was a loan and referred to the WhatsApp exchange in October 2019 that P did not have to return the sum to her as D considered she owed P monies. Also under cross-examination, P said she did not need to return the HK$1M because that was what D said in her WhatsApp message and she handled the sum accordingly. 72.Fourteenth, D’s counsel attacked P’s credibility from the change of evidence on the reason why she regarded the CAD Sums given to her by D were gifts. I believe that D’s counsel either misheard or misunderstood P’s evidence. There was no change in evidence. P’s evidence was that for the first two times, she did give back to D the Hong Kong dollars equivalent of the Canadian dollars given to her by D. However as P brought many things back from Canada and D hoped that she would return to Hong Kong 3 times a year with the Children, on the later occasions when D gave P Canadian dollars she did not require P to repay her. Up to the last occasion, that is on 6 December 2019, she did not request P to pay her back the CAD Sums and therefore considered the monies as living expenses in Canada that D gave to P. 73.Although D’s counsel submitted that it is unbelievable that D would pay P living expenses in Canada in addition to the monthly payment and that D had no responsibility for the maintenance of the Children, but P’s evidence was that when D visited P in Canada, P took D out for meals, they joined some tours to other provinces and also P would buy things for D in Canada. I therefore do not find anything inherently incredible in gifting P the CAD Sums as additional living expenses. 74.Fifteenth, in respect of D’s counterclaim that a cheque of HK$600,000.00 was issued to P on 11 October 2013 (which was abandoned at trial), D’s counsel submitted her denial of having received the cheque was inconsistent with an email dated 27 July 2020 where she acknowledged receiving it. I accept P’s explanation that when she wrote that email she did not have the relevant bank statements and but after this litigation was commenced she did look over all her statements and found she never received this sum. 75.Sixteenth, in respect of P’s evidence that she exchanged RMB¥200,000.00 into HK dollars at an exchange shop in Hong Kong which did not issue any receipt and from what she knows most exchange shops would not issue receipts, D’s counsel submitted this evidence is a lie. Although invited by D’s counsel to take judicial notice that in Hong Kong money exchange shops do issue receipts I refuse to do so as it was not being a matter well-known to this Court. 76.As for the attack on P’s credibility that she could be put to the trouble to physically bring RMB¥200,000.00 to Hong Kong (in batches because of the restriction to bring RMB¥ into Hong Kong), it was suggested that it was incredible to convert into HK dollars instead of depositing the RMB¥ into D’s foreign currency account. There is nothing to this point because P explained clearly: (1) there was a limit of 200 notes for depositing RMB¥ into the bank; (2) every time she and D brought back RMB¥ from the Mainland it was first put at home because they could not go to the bank on the same day; (3) when there was more than RMB¥20,000.00 at their home, sometimes she would convert the extra RMB¥ into HK dollars for otherwise that would have required P to go to the bank every day; and (4) D thought it would be troublesome so told P to convert the RMB¥ into HK dollars. Such explanation has not been seriously challenged by D’s counsel. 77.Seventeenth, D’s counsel submitted that P accepted that the transfer of RMB¥50,000.00 from D’s Shenzhen Citic Bank Account on 5 December 2019 was to confirm the general online banking service and the transfer limit of the Shenzhen Citic Bank Account but it was never stated in her Statement of Claim or witness statement that this sum was paid back to D or was a maintenance fee owed to P. However, there is nothing to this point as it was pleaded in the Reply, and she also stated in cross-examination, that the RMB¥ in the Shenzhen Citic Bank Account included Mr Tsui’s maintenance that D held for P for which D intended to bring back to Hong Kong through the bank account of P’s brother. 78.Eighteenth, D’s counsel pointed out that it was never pleaded that during the meeting at Pokka Café when D demanded the return of the HK$1M and P showed D the WhatsApp record of 9 and 10 October 2019 and having recalled the reason for such deposit to the account of P’s mother, D stated the words: “咁啲錢就當我俾你阿媽使” (Agreed English translation: “Then treat such sum [of HK$1 million] was given by me for your mother to spend”). It is true that this conversation was never pleaded. The failure to plea these words P alleged were spoken cannot be said to cast doubt on her credibility when in cross-examination, D admitted that she had mentioned the alleged HK$1M Loan and P having shown her the WhatsApp messages on her phone at Pokka Café and those contemporaneous messages are consistent with P’s case it was a gift. It is only D’s bare denial of having stated the words: “咁啲錢就當我俾你阿媽使”. 79.Nineteenth, D’s counsel submitted that although in cross-examination P said that outside Pokka Café, D said that she would transfer the Property to her when P was back next time but this was never mentioned in her witness statement or in her pleadings. However, P’s pleaded case was that outside Pokka Café, D said the following words: “元朗間屋轉妳名絕對足夠cover嗰60幾萬，唔好再追我”. The transfer of the Property was thus pleaded. Indeed the fact those words were said has been admitted by D. In P’s witness statement, it was stated: “At the end of the gathering, [D] promised that she would transfer the Property to me in recognition of my entire interest in the Property and would not return the Misappropriated Sum under the Financial Arrangement. [D] told me that after her lawyer had prepared the relevant documents, she would ask me to go to her lawyer’s office to proceed with the transfer of the Property to me.” When D’s counsel put to P that she was changing her evidence, she disagreed. I do not agree that there was such material inconsistency in P’s evidence to cast doubt on her credibility. 80.For the above reasons, I therefore do not agree with D’s counsel that there were many inconsistencies such that whether taken individually or collectively would render P’s evidence unreliable. E2. Ms Wong’s evidence 81.Ms Wong is an Associate Professor at the Department of Sociology of the Hong Kong Baptist University. She gave evidence on behalf of P in the morning of Day 4. 82.It is not in dispute that Ms Wong got to know P in 2007 when she was conducting a research on the topic of “Hong Kong Lesbian Partners in the Making of their Own Family”. She interviewed P and after the research they remained good friends. Ms Wong later was introduced to D and all three attended gatherings from time to time. 83.D’s counsel submitted that Ms Wong was not an independent witness given that she has been a long-time friend with P, over ten years, whereas D was never interviewed by her during her research. I agree that it is fair to say that Ms Wong was closer to P than D and in that sense she may not be truly independent. That said, I cannot see how she has any direct personal interest in the outcome of these proceedings. 84.It was also submitted by D’s counsel that given the wordings of the alleged conversation between P and D at Pokka Café in her witness statement were almost exactly the same as the Statement of Claim, her credibility is in doubt. It was specifically put to her that she had read the Statement of Claim and P’s witness statement before making her witness statement and that the wordings in her witness statement was copied from the Statement of Claim and P’s witness statement. She denied both. I do accept that this matter on its own is insufficient to attack her credibility. 85.In any event, her evidence is not identical to P in all respect. As to what happened outside Pokka Café, whilst P’s evidence is that D said “元朗間屋轉妳名絕對足夠cover嗰60幾萬，唔好再追我”, she has not mentioned this in her witness statement. 86.D’s counsel further submitted that there was inconsistency between her witness statement where she said she thought that the financial disputes between P and D were resolved after the Pokka Café gathering, and her evidence in cross-examination that if the Property were agreed to be transferred to P in March 2020 then P would not have nowhere to stay when she returned in March as was mentioned in her WhatsApp messages to D on 2 and 3 March 2020. I do not find that there was any inconsistency because in cross-examination she explained that D did not honour the promise made by her in Pokka Café. Furthermore, in her WhatsApp message on 3 March 2020, it was mentioned that “it was agreed to deal with the property issue in March…”. I therefore do not find any inconsistency in her evidence in this regard. 87.On the whole, I accept Ms Wong as a honest witness. Ms Wong’s evidence was not shaken during cross-examination and there were no real inconsistency in her evidence. When she did not have personal knowledge of certain matters, she honestly admitted that. E3. D’s evidence 88.D gave evidence for almost 2 full days. From her answers, D appears to be a very intelligent woman who was very familiar with her case and the documents in the trial bundles. 89.Unfortunately, there were aspects of D’s case which were inherently incredible or illogical as well as inconsistencies in her evidence. I would only give a few of the more obvious examples. 90.Firstly, D’s denial that P and D ever cohabited and were just in a dating relationship is incredible in light of the following undisputed facts or objective circumstances:
91.Secondly, there were a number of self-contradictions in D’s own case. For example, on the registering of Flat 3505 in their joint names: (1) she confirmed in cross-examination that their solicitors had advised them of the consequences of having Flat 3505 registered in their joint names; (2) yet she maintained that P knew she had no interest in Flat 3505 and was simply holding the half interest on trust for her; and (3) she said the flat was registered in their joint names to “pacify” P yet it makes no sense at all that D was able to pacify P if, notwithstanding Flat 3505 was registered in their joint names, P knew that she had no interest in Flat 3505. So even on D’s case, in order to pacify P, D must have led P to believe she had beneficial interest in Flat 3505. 92.The objective or undisputable facts indeed are consistent with P believing she had an interest in both Flat 3505 and the Property. Given that D was a high-income earner, she paid for the purchase of Flat 3505 and the Property without any mortgage and there was no evidence that she had any liquidity problems at that time, it is not explicable and not explained why substantial sums were spent by P on Flat 3505 and the Property if she had no beneficial interest in them. D’s case that she reimbursed P such sums on 8 October 2013, over 4 and 2 years respectively after the renovation of Flat 3505 and the Property is incredible. The amounts for the cheques issued also do not reconcile with the actual amount of renovation and furniture expenses even on D’s case. 93.Thirdly, there were internal inconsistency in D’s evidence. On the one hand, in her witness statement she stated that on 8 October 2013 one of the cheque issued by her to P in the sum of HK$526,000.00 represented part of proceeds of the sale of Flat 3505 but further on in her witness statement (as is D’s pleaded case), she said that she never distributed any sale proceeds to P because she was not entitled to receive any. 94.Fourthly, there were instances where D changed or embellished her evidence which was not pleaded or even stated in her witness statement nor were any supplemental witness statement made by her. For example, in D’s pleaded case and in her witness statement she admitted that during the telephone conversation on 18 December 2019, save she did not say the words that she would pay rental to P, words to the effect as pleaded by P (set out above at paragraph 43(1)) were said. However, in cross-examination, she denied (which she previously admitted) that she said to P to let her live in the Property. Another example is why D had to pacify P. She sought to embellish on the reasons why Flat 3505 was registered in their joint names and the meaning of “pacify” in her oral evidence but these being matters so crucial to her case were never pleaded or contained in her witness statement do cast doubt on her credibility. 95.Fifthly, D’s case did not sit well with the few contemporaneous documents that were available and produced to this Court. An example is the alleged HK$1M Loan. As mentioned already, after D’s transfer of HK$1M to the BOC Account of P’s mother, the WhatsApp message D sent to P plainly contradicts D’s case that it was a loan. She plainly was saying that the HK$1M was to discharge the monies P had alleged D owed her and if necessary after calculation if more was owing, she would further pay P. 96.Another example is D’s case that the 5 cheques issued to P on 8 October 2013 were to reimburse sums owed by D to P for the renovation expenses of Flat 3505 and the Property as well as share of the profits from the sale of Flat 3505. As already mentioned, the timing as well as the amounts of the cheques simply do not reconcile and support D’s case. 97.For all these reasons, together with my analysis in the next section, overall I do not find D a reliable witness and would prefer P’s evidence in the case of conflict. F. My findings on the issues to be determined F1. The beneficial ownership of Flat 3505 98.As Flat 3505 was registered in the joint names of P and D, the burden rests on D to prove that, on the balance of probabilities, the beneficial interest is different from the legal interest. 99.From the authorities I have referred to above, D may discharge her burden by showing: (1) there was a common intention held by them at the time of the purchase that the beneficial ownership was different to the legal ownership; (2) D altered her position in detrimental reliance; and (3) it is unconscionable for P to assert ownership in reliance on the legal title. 100.It is not disputed that there were some express discussion between P and D at the time of (or prior to) the purchase of Flat 3505 as to how the property is to be held beneficially. The dispute is as to what was said and was not said. 101.As mentioned in the previous section, I accept P’s evidence over D where there is a conflict between their evidence. It is also more probable, in light of the parties’ relationship and other objective circumstances at or around the time of acquisition of Flat 3505, that the whole conversation, according to P, prior to the purchase of Flat 3505 did take place. 102.I have already mentioned that I find D’s case that they did not cohabit is incredible. I do find as a fact that soon after their acquaintance, the parties cohabited on Fridays to Sundays and holidays when the Children were living in Mr Tsui’s residence, initially at Flat 1308, later at Flat 3505 and then finally at the Property. 103.Furthermore, it is noteworthy that just 1 year prior to the acquisition of Flat 3505, D had made the Will, out of her own volition, to devise half of her estate to P upon her death. I find this somewhat difficult to square with D’s case that she did not want P to have any interest in Flat 3505 and only to pacify P she stated that Flat 3505 would be registered in their joint names. 104.By the making of the Will and payment of monthly payments to support the living and household expenses paid by P, I also find that it is more likely than not D regarded P as her spouse even though they could not get married in Hong Kong. 105.It is also not disputed that that P paid for the renovation and furniture expenses of Flat 3505. For the reasons explained in the previous section, I do not accept that P had asked and D had reimbursed her for those expenses. If P had no interest in Flat 3505 and in view of the objective circumstances found by me, as already mentioned in the section above, there was no reason for P to pay for those expenses. 106.Apart from the bare denial that there were such express discussion or common intention according to P, I find that D has not discharged her burden, on the balance of probabilities, that there was a common intention that D held 100% of the beneficial interest of Flat 3505. 107.At most, D’s evidence that Flat 3505 was registered in their joint names to pacify P amounts to an uncommunicated or secret intention which was not the shared intention of the parties. This evidence could not support any common intention that P did not hold any interest in Flat 3505. See Fowler v Barron [2008] 2 FLR 831 at §§36-37:
108.Accordingly, I find that there was an express common intention held by P and D that: (1) Flat 3505 would be purchased as a home for the cohabitation of P and D; (2) P and D would be the joint legal and beneficial owners of Flat 3505 notwithstanding that D would pay for the whole purchase price; and (3) P would be responsible for the renovation and furniture expenses of Flat 3505. 109.As D has failed to prove on the balance of probabilities that there was a common intention that the beneficial interest was different to the legal interest, it is not necessary to consider whether D has also demonstrated she had altered her position in detrimental reliance and it would be unconscionable for P to assert ownership in reliance on the legal title. 110.As mentioned in the authorities cited above, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust. Given my findings, I will not apply the resulting trust analysis which D’s counsel invited me to if on the evidence I cannot decide whether an inference as to intention may properly be drawn. 111.Alternatively, if necessary, I would have found that P has made out her claim based on proprietary estoppel. Based on the conversation that I found took place, there was a representation or assurance made by D that both she and P were the joint owners of Flat 3505 and in reliance on that representation or assurance, P contributed to the renovation and furniture expenses of Flat 3505 to her detriment. Although from the evidence before me, I am unable to find the exact amount contributed by P towards the renovation and furniture expenses of Flat 3505, but even on D’s case on the amount of expenses paid for by P, I find that substantial contributions were made which constitute sufficient detriment. 112.I therefore find that both P and D were 50% beneficial owners of Flat 3505. F2. The beneficial ownership of the Property 113.As the Property was registered solely in D’s name, P bears the burden to prove, on the balance of probabilities, that she was the sole beneficial owner of the Property. 114.D’s counsel both in his Opening Submissions and Closing Submissions placed heavy reliance on the case of Mo Ying v Brillex Development Ltd [2015] 2 HKLRD 985 (“Mo Ying”) which he submitted the facts and context of this case are similar such that applying Mo Ying there was no common intention between P and D that P was to have any beneficial interest in the Property. 115.In Mo Ying, the husband purchased the subject property which was registered in his sole name in May 1988. In December 1988, the wife came to Hong Kong from the Mainland and lived in the property as their matrimonial home. Shortly after the wife’s arrival, they discussed adding her name as a co-owner but the husband refused because he said it would be troublesome and cause expense. The matter was not pursued further. Later, the husband sold the property and the wife was informed 4 weeks before completion. He then leased back the property where the wife and children continued to live there after their relationship had deteriorated. Later, the wife commenced proceedings claiming that the property is held by the husband on common intention constructive trust for himself and her. 116.The Court of Appeal held that it would not lightly disturb the judge’s conclusion that the husband at the time of the discussion did not want to make the wife a co-owner of the property and the wife knew that was the case. It was held that looking at the words uttered by the husband during the conversation the words were equivocal. On the one hand, it may be said that if the husband truly thought that the wife had no interest in the property he would have told her so directly and would not have uttered the words. On the other hand, the words that were in fact said by the husband may be taken to mean that he did not want to add the wife’s name to the property and therefore told her not to hassle him and brushed her off. However, on the evidence, the wife was not led by the husband’s words into believing that she would have in interest in the property. In any event, it was held that the words used were very different from the excuse made by the man in Eves v Eves [1975] 1 WLR 1338 and Grant v Edwards [1986] Ch 638 (cases the wife had relied heavily). In those two cases, the woman could well believe that her name would be added when the excuse given was no longer relevant. However, it was said in the present case the wife could not have believed that the reasons given by the husband would one day disappear and her name would be added to the title of the property in the future. 117.D’s counsel therefore submitted similarly there is no evidence from P that she was led by the words uttered by D into thinking or believing that she had interest. More importantly, he further submitted, P could not have reasonably believed that the reason given by D would one day disappear and that her name would be added to the Property. 118.However, as I believe is accepted by D’s counsel, each case will turn on its own fact and “context is everything”: see Stack v Dowden [2007] 2 AC 432, §69 which was cited in Mo Ying, §5.14. In Mo Ying, it was held at §7.7, “whether the excuse made by the husband would lead to the conclusion of an express common intention on the beneficial interest of the wife is very much a fact-sensitive and contextual issue and in this case the Judge’s conclusion that the husband by his words intended to brush off the wife is justified on the facts of this case.” 119.The facts of the present case (as found by me) and Mo Ying are different in material respects:
120.I find as a fact that on a balance of probabilities, prior to the acquisition of the Property, the conversation according to P did take place. As mentioned, I would prefer P’s evidence over D in case of any conflict based on my assessment of their credibility above. 121.P’s evidence is also more consistent with the following objective or undisputed facts and inherently more probable:
122.I should mention that although I have referred above to some events which took place after the time of the acquisition of the Property as evidence of intention at the time of the acquisition, I bear in mind that words and conduct after the event should be given less weight than contemporaneous words and conduct: see Poon Loi Tak the Administrator of the late Poon Nuen deceased v Poon Loi Cheung Desmond [2023] HKCFI 101, §45. 123.Although D has relied upon the letter of P’s solicitors dated 30 October 2020 whereby it was stated that P and D are entitled to equal shares of the Property as reflecting the intention of the parties at the time of the acquisition they are entitled to equal share in the Property, I accept P’s explanation that at that time of the letter, prior to the commencement of these proceedings, she had hoped that D would settle with her and what was asserted therein was a compromise. 124.In any event, prior to this letter, during the telephone conversation on 18 December 2019, the gathering at Pokka Café on 22 January 2020 and P’s email to D on 27 July 2020, P had asserted her full ownership to the Property and not just a half share. As mentioned above, I do acknowledge that more weight should be given to contemporaneous documents then those after the relationship turned sour. 125.On the basis of the parties’ discussion and in view the parties’ relationship and the surrounding circumstances at the time of the acquisition of the Property as found by me, I find that there was an express common intention held by P and D that: (1) the Property would be purchased as a home for the cohabitation of P and D; (2) the Property would be registered in D’s name due to their concerns about the perception and possible discrimination from the indigenous villagers but P would own the entire beneficial ownership of the Property by foregoing her entitlement to the proceeds from the sale of Flat 3505; (3) P’s interest would be protected by the issuance by P of a cashier’s order for the purchase of the Property but D would advance the money to P for the purchase of that cashier’s order; and (4) as was the case for Flat 3505, P would be responsible for the renovation and furniture expenses of the Property. 126.I also find that pursuant to and in reliance of the express common intention, the Property was conveyed into D’s sole name, P paid for part of the renovation and furniture expenses and forewent her entitlement to half of the proceeds of the sale of Flat 3505. I further find that P altered her position in reliance of the common intention to her detriment and it would be unconscionable for D to rely on her legal title. 127.Again, given my findings above, I am able to resolve this issue by reference to common intention and it is not necessary for me to resort to any resulting trust analysis. 128.If necessary, I would also have found the discussion and agreement of the parties constitute a representation or assurance made by D that P would be the sole beneficial owner of the Property. P reasonably relied upon those representations to her detriment. P’s claim based on proprietary estoppel would also have succeeded. 129.I therefore find that P is the sole beneficial owner of the Property. Although in D’s closing submission, for the first time she relies alternatively on the unpleaded case that it was intention of the parties prior to the acquisition of the Property they would be joint tenants, based on my findings of fact, I necessarily would have rejected this alternative case. F3. Is the Misappropriated Sum held by D on trust for P and should it be repaid to P, or is P liable to repay D HK$363,049.76 being the outstanding amount for the HK$1M Loan? 130.There is no dispute that HK$636,950.24 was paid by P to D and they were ultimately deposited into D’s Citic Account. It is also not disputed that the sum was never paid to P’s mother or returned to P. D’s only answer to the return of this sum is the alleged HK$1M Loan. Therefore, D’s defence stands and falls with the HK$1M Loan. 131.I have explained in the section above how the HK$1M Loan is plainly contradicted by the contemporaneous WhatsApp conversation. I do not accept the submissions by D’s counsel that because in these messages D asked P again for her mother’s bank account number and said she would deposit money the next day, it supports D’s case that D and P had an agreement prior to these messages that D should deposit the HK$1M into the bank account of P’s mother pursuant to P’s request for such a loan. I further do not accept there was any mention of repayment of any loan by P to D in these messages. Reading the messages as a whole, including what was said by D immediately after the transfer, it is inconsistent with D’s case that P requested HK$1M as a loan. 132.On the contrary, D’s case plainly contradicts her admission that P had chased D for the sum of HK$636,950.24 as owing from D. D admitted she said outside Pokka Café: “元朗間屋轉妳名絕對足夠cover嗰60幾萬，唔好再追我”. D said she only said those words because P “kept on troubling me by alleging that I was owing money to her, which allegation is not true” but I have found such excuse incredible. 133.The burden being D to prove what she alleges, there being no other contemporaneous documents adduced as evidence to support her case and given my doubts on her credibility, I find that D has failed to demonstrate on a balance of probabilities that the transfer of HK$1M to P’s mother was a loan and HK$363,049.76 is owed by P to D. 134.On the contrary, I find that there were discussions between P and D and it was expressly agreed that D’s Citic Account would be deposited two sums of money from: (1) all balances of P’s DBS Accounts; and (2) the sum of HK$400,000.00 from P’s HSBC Account. It was further mutually intended the sums would solely and exclusively used for D to transfer to bank account of P’s mother (originally it was intended for the transfer be to her BOC Account but later it was agreed to be transferred to her Citic Account) who would then transfer the same to P’s account in Canada. Pursuant to that discussion: (1) a total of HK$236,950.24 from P’s DBS Accounts was transferred to D on 30 November 2019 whereupon D purchase a cashier’s order from DBS and deposited such sum into D’s Citic Account; and (2) P issued a cheque of HK$400,000.00 from P’s HSBC Account to D on 2 December 2019 which was deposited into D’s Citic Account on 3 December 2019. 135.I also find that it was not intended by P and D that the Misappropriated Sum would be at the free disposal of D or that D would have any interest in the Misappropriated Sum. The elements of Quistclose trust having been made out and the Misappropriated Sum not having been transferred to P’s mother, I find that the Misappropriated Sum is held on trust by D for P and should be repaid to P. F4. Is P liable to repay RMB¥878,034.50 to D? 136.As mentioned above, the amount in RMB¥ that D counterclaims in this action has metamorphosized from her pleadings, witness statement and from the beginning to the end of this trial. This is a matter which casts doubt on the credibility of this counterclaim. 137.More importantly, the legal basis for claiming such sums from P was never pleaded. It was only in D’s opening submissions filed and served before trial that it was asserted that “the confusion by [P] causing [D] to overpay [P] was a fraud or fraudulent breach of trust to which [P] was a trustee in respect of the sum with [D] as a beneficiary under the trust”. Furthermore, it seems the allegation of fraud was belatedly raised to deal with P’s defence to the counterclaim that the claims under paragraphs 46(4)(a) to (d) of the Amended Defence and Counterclaim are time-barred pursuant to section 20 of the Limitation Ordinance, Cap 347 and are liable to be struck out. 138.In closing submissions, P’s counsel invited me to strike out this counterclaim as it discloses no reasonable cause of action. It seems to me however, by that time there has already been a trial of this action and there has been no application taken to strike out prior to trial, if I take the view that no viable cause of action has been pleaded for claiming such sums, I simply will refuse this counterclaim. 139.As submitted by P’s counsel, which I accept is well-established from the authorities, fraud must be distinctly alleged and as distinctly proved: see e.g. Three Rivers DC v Bank of England (No 3) [2003] 2 AC 1 at §184:
140.Although it is not necessary to use to words “fraud” in the pleadings, the facts which make the conduct complained of fraudulent must be pleaded: see Armitage v Nurse [1998] Ch 241 at 256-257 cited in Haifa International Finance Co Ltd v Concord Strategic Investments Ltd [2009] 4 HKLRD 29, §16. 141.The elements of fraud has been summarised by Cheung JA in Haifa International Finance Co Ltd at §15 as:
142.I respectfully disagree with D’s counsel that the plea in paragraph 46(4) of the Amended Defence and Counterclaim (“[d]uring the period from 2013 to 2019, [P] repeatedly asked [D] to make withdrawals to her through her bank account and her brother’s bank account. [P] confused [D] on the amounts being owed to [P] as [D] was always too busy at work and had no time to reconfirm the amounts. As a result, [D] discovered that she had overpaid an amount of RMB¥1,192,106.10 which had been wrongly paid to [P].”) sufficiently pleaded that the conduct of P’s confusing D into overpaying is fraudulent. 143.I am of the view that D’s Amended Defence and Counterclaim has woefully failed to plea fraud and give sufficient particulars of the alleged fraud. 144.Firstly, it is not clearly pleaded what is the representation of fact made by P. All that is pleaded is that P repeatedly asked D to make withdrawals to her. It is not pleaded that a particular sum was alleged as owing to P which was known to be false or was no genuine belief in its truth. 145.Secondly, even assuming that some implicit representation of fact was made that all the money in D’s Shenzhen Citic Bank Account were monies owing to P, I do not accept the submission by D’s counsel that the plea that P “confused” D on the amounts means that the representation must be made with knowledge that it may be false or at least in the absence of any genuine belief that it was true. The allegation that P “confused” D may be totally consistent with innocence. For example, as is P’s case, she herself did not know what amounts were owing to her as she did not know the amount of maintenance paid by Mr Tsui to D and simply requested D to return to her Mr Tsui’s maintenance. 146.For all these reasons, there not being a pleaded cause of action for the repayment of alleged ¥RMB overpaid by D, D’s counterclaim against P for RMB¥878,034.50 ought to be dismissed. F5. Is P liable to repay the CAD Sums to D? 147.No contemporaneous documents have been adduced in support of D’s assertion that the CAD Sums given to P were loans. 148.On the other hand, P has adduced a WhatsApp message from D which stated: “這是我這三年來俾你的加元匯票…”. There was no mention that these sums were loans or that they have not been repaid. 149.I have already mentioned above the fact that the CAD Sums were sums gifted by D to P, in additional to the monthly payments by D to P, is not inherently incredible. 150.In the circumstances, I find that D has not proved on a balance of probabilities that the CAD Sums were loans. I therefore find that P is not liable to repay the CAD Sums to D. F6. Is P liable to repay HK$1,255,782.54 to D? 151.D’s counterclaim for the sum of HK$1,255,782.54 involves 3 transactions: (1) a sum of HK$650,000.00 from D to P; (2) a sum of HK$1,500,000.00 from P to D; and (3) the USD Sum from D to P. 152.Essentially, P’s evidence is that over the years, where attractive investment opportunities arose and if either party were in short of liquidity, to enjoy those investment opportunities the other would gift each other money out of love and affection. On the other hand, D’s evidence is that the HK$650,000.00 sum was requested by P for her to make investment in time deposits in Hong Kong and the USD Sum was in exchange of the HK$1,500,000.00 as P wished to hold USD rather than HKD. 153.Given my finding on the length and nature of their relationship, the fact that D gifted the monthly payments to P and the CAD Sums, the apparent wealth of D, and my preference of P’s evidence over D’s, I find it more likely than not the sums of HK$650,000.00 and the USD Sum paid by D to P were gifts to P. 154.I do not accept the submission by D’s counsel that there is no reason for D to gift HK$650,000.00 and the USD Sum within such a short period of time and that P’s explanation is unbelievable. On the contrary, it is also noteworthy, unlike the other claims which D counterclaims, demand for HK$1,255,782.54 was never made in the letter from D’s solicitors dated 4 December 2020 or prior to these proceedings. 155.The first time it was asserted that HK$650,000.00 was a loan was in D’s Counterclaim. As for the USD Sum, only in the amendments to the Defence and Counterclaim, after service of the Reply and Defence to Counterclaim, was it alleged the USD Sum was a loan. The belated raising of this claim does cast doubt on the credibility of this counterclaim. 156.For all the above reasons, I am not satisfied that the sum of HK$1,255,782.54 is owed by P to D. G. Conclusion 157.By reasons of the aforesaid, P’s claim against D succeeds and D’s counterclaim against P fails. 158.I would make the following orders nisi:
159.Costs should follow the event. I therefore also make a costs order nisi that D do pay P the costs of this action and the counterclaim, to be taxed if not agreed, with certificate for one counsel. 160.The above orders nisi shall become absolute unless an application to vary is made within 14 days from the date of this Judgment.
Mr Esmond Wong and Mr Cyrus Lau, instructed by Stewart Wong & Associates, for the plaintiff Mr Lawrence T H Law, instructed by Au-Yeung, Chan & Ho, for the defendant |
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