Lo Li v. Lo Shing

HCA006576/1994

1994, No: A6576

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

______________

______________

Coram: The Hon. Mr. Justice Findlay, in Court.

Dates of hearing: 18, 19, 20, 21, 24, 25, 26, and
                  27 October 1994

Date of handing down of judgment: 7 November 1994

_________________

JUDGMENT

__________________

The Subject of the Dispute

1. On 13 November 1984, the plaintiff entered into an agreement of sale and purchase of a fourteenth part of Inland Lot 6654 with the sole and exclusive right to use, occupy and enjoy the fifth floor of a building erected on that lot. The purchase price was $330,000, of which $33,000 was to be paid on signature of the agreement and $297,000 on completion. On 19 February 1985, this property was assigned to the plaintiff.

The Claim

2. In his pleadings, the plaintiff says that, in February 1985, he let the south portion of the flat to the defendant on a monthly basis at a rental of $1200 per month. He says that, in September 1990, he and the defendant entered into an oral agreement in terms of which the defendant agreed to settle outstanding arrears of rental, management fees, electricity charges and rates, and the plaintiff would let the south portion to the defendant for two years from 1 September 1990 at a rental of $2000 per month. If the rental was overdue by 15 days, the plaintiff could repossess the portion. The defendant, the plaintiff says, did fail to pay as required, and he asks for an order for possession, contractual arrears and mesne profits.

The Defence and Counterclaim

3. The defendant's pleadings tell a different story. The defendant says that, around October 1984, he and plaintiff agreed that they would purchase a flat for their common use, and he would be a co-owner of the premises purchased. He then proceeded to look for suitable premises, found a flat and negotiated the purchase price . At about the same time, the defendant says, the plaintiff represented that he wished to have the premises registered in his own name "so that he could reassure his wife (then living in China) that he had a house [as this would facilitate the application of the plaintiff's wife to come to live in Hong Kong permanently.]". The allegation in square brackets was added by amendment. At this time, the plaintiff confirmed that the defendant would continue to be a beneficial owner and would continue to live in the premises on condition that he shared the mortgage repayments. In November 1984, the defendant says he negotiated the purchase of the present premises, and the property was registered in the name of the plaintiff. About February 1985, the parties moved into the flat, but the defendant occupied the smaller portion so, he say, it was agreed he would pay only 40% of the mortgage payments. The defendant says he understood the mortgage repayments to be then $3000 per month so he gave $1200 per month by cash to the plaintiff which was accepted. He paid nine instalments and then suffered financial difficulties. In September 1990, he and the plaintiff agreed, he says, that against the security of the defendant's share of his mother's estate, he would be allowed to defer payment "until such time as he might be able to repay the outstanding.". So, the defendant says, he is the beneficial owner of the flat to the extent of 40% and the plaintiff is not entitled to the relief he claims. On the contrary, he alleges, he is entitled to a declaration that he is the beneficial owner to the extent of 40% of the flat and to an assignment of that share to him.

The Reply and Defence to the Counterclaim

4. In reply, the plaintiff agrees that he and the defendant intended to purchase a flat together, and decided to do so, but later the defendant proposed that one or other of them should purchase it. He says the defendant decided to let the plaintiff purchase the flat in his own name. This was done and the property was registered in the plaintiff's name accordingly.

The Evidence

5. The plaintiff is the younger brother of the defendant. I heard evidence, on behalf of the plaintiff, from the plaintiff himself and the parties' father, Lo Chi Ho. The defendant gave evidence on his own behalf and called his daughter, Lo Wing.

The Evidence of the Plaintiff

6. In his witness statement, which he adopted as evidence, the plaintiff says that, in October, 1984, he occupied a flat in King's Road with the father, the defendant, the defendant's wife and Lo Wing. The defendant was the tenant. The rent was about $3000 per month. He and defendant shared the rent and the outgoings. The lease was due to expire at the end of 1984. The landlord proposed an increase in rent to $3,900. "Since the rent was so high and that the said flat was too small to accommodate all of us, I decided to purchase the own flat and not to rent any further." The defendant and the father were introduced to the suit premises. Shortly after their arrival at the suit premises to inspect it, he also arrived. He then negotiated the price of $330,000 with the owner directly. His father issued a cheque in the sum of $10,000 as a deposit.

7. He, the defendant and the father had meeting that night. The defendant proposed that he and the plaintiff should jointly purchase the flat. The plaintiff rejected this and proposed that the flat should be purchased by one or other of them. The father agreed with this. The father said that since the defendant had visited and inspected the flat, he should have the right to decide whether he should purchase first. The defendant thought about this, but decided not to purchase, and let the plaintiff purchase in his sole name. The plaintiff applied for mortgage finance from the Hong Kong Bank, but the defendant refused to act as guarantor. About February 1985, the plaintiff let a portion of the flat to the defendant . The monthly rent was $1200, and the defendant was to contribute to outgoings. All was fine until December 1985 when the defendant ceased to pay rental. About April 1989, the plaintiff's wife and daughter came from China. The plaintiff asked defendant to move out, but he refused to do so.

8. About August 1990, there was a family meeting. His father advised him to extend the tenancy for two years commencing August 1990 at a rent of $2000 per month, and the defendant must deliver possession on expiry of this period. If the defendant failed to pay, the deficiency could be deducted from the defendant's share of his mother's estate. He and the defendant agreed to this. The defendant paid from August to October 1990. He then failed to pay, but the plaintiff did not notice this because the defendant would pay rental to the father, and the father was allowed by him to keep the money as "pocket-money". He father did not inform him of this failure. He discovered the failure in about August 1991, and then told the defendant to pay the arrears at the rate of $500 per month. The defendant did pay rent from August 1991, but not the arrears. Again, the plaintiff did not know this because his father concealed it from him. The father paid the sum of $500 per month himself.

9. When the tenancy expired in August 1992, the defendant refused to give possession. In order to persuade him to do so, the plaintiff offered the defendant a lump sum of $40,000 and $1000 per month. He also said he would not to press for the arrears until the defendant's financial position improved. The defendant, however, refused to move. In September, 1992, the defendant refused to pay rental and, for the first time, claimed he had an interest in the flat

10. In evidence before me, the plaintiff said that he issued rental receipts to the defendant. He kept some of the counterfoils of issued receipts, but some were missing. These counterfoils acknowledge receiving "rental" from Chung Hwa Medical Centre. The Chung Hwa Medical Centre was operated by the defendant who was Chinese medical doctor. The plaintiff said the defendant was the "boss" of the centre.

11. The plaintiff told me that the defendant occupied about 45% of flat.

12. The plaintiff said that he and defendant did not intend to purchase flat jointly. In spite of saying in his pleadings that "In or about November, 1984, the plaintiff and the defendant intended to purchase a real property for their use and enjoyment" and "Subsequently, the parties herein decided to purchase the said premises", the plaintiff told me that all along he intended to purchase his own property. His idea was that "I would rent part of premises to him [the defendant] and use rental to pay debt. He did not discuss purchasing the flat jointly. Nothing of that sort" occurred.

13. The plaintiff told me that he joined the defendant and the father while they were negotiating the price. He made the decision on a price of "$300,000 something".

14. When asked why, in view of the fact that "all along" he negotiated and bought the flat, the defendant was given the right to buy property which he had already bought, he said that "because on that day my elder brother first reached there and as elder brother I must respect him. Therefore I let him choose first".

15. Although the plaintiff says that the defendant decided not to purchase, at one stage in his evidence he said that "at that time he [the defendant]did not actually make clear to me he decided not to buy. He just did not give me the price."

16. The plaintiff says he borrowed the sum of $70,000 from the father to assist in making the purchase. For some reason not clear to me, the plaintiff insisted that he did not regard this as a "down-payment". The father was willing to lend money to defendant or to him for this purpose. In this regard, he said there was an agreement between the father and him and the father and the defendant.

17. When asked why the defendant should refuse this offer to allow him to purchase premises at a price which the plaintiff regarded as a very attractive, the plaintiff said that it was because the defendant's income as herbalist was not stable, because he did not raise the price and because he did not have confidence. The defendant, he said, was given two chances to buy. In fact, the plaintiff says the defendant gave no reason for not buying.

18. The plaintiff said that he issued rent receipts in name of the defendant's business although the property was let as residential. Each time the defendant paid, he issued a receipt. These receipts were issued from the same booklet, which was used only for purpose of issuing receipts to the defendant. He conceded that no receipts were issued for the months of August, September and October 1990 although defendant paid for those months. No receipts were issued for the months of August 1991 to August 1992 because, the plaintiff said, it was through the father that the rental demands were given. He did not issue receipts for August to October 1990 and August 1991 to August 1992 because the defendant did not ask him for receipts, although he was not saying that the defendant asked for receipts during period February 85 to November 85.

19. After the family meeting in August 1990, all rental was collected by the father "because father was the guarantor at that time as defendant had not paid rent for quite some time". In this regard, the plaintiff said: "His money was not handed over to me; it was handed over to father, and it was for father's mouth. As the defendant failed to pay father so the person who suffered loss was my father. Father was told to keep the money; it was to be regarded as repayment because I owed him money. It was not 'pocket money'. I do not understand what 'pocket money' means".

20. The plaintiff was cross-examined closely regarding the rent receipts. He said he did not keep all the counterfoils. He agreed that the counterfoil for April 1985 was not amongst those produced by him; it was missing. He agreed that the receipt for April 1985 should be the third one issued.

21. The counterfoils produced in court are as follows:

22. It will be seen that the manuscript numbers are in sequence, but the printed numbers are not, and numbers 054063 and 054064 being missing.

23. The plaintiff, the defendant and the father are agreed that there were nine payments during this period and nine receipts were issued. There are nine counterfoils, but the defendant says that one is missing. When asked about the missing counterfoil for the period 1 April to 28 April, the plaintiff said "might be something special happened". He denied making up - that is, falsifying - these receipts. He repeated that all receipts were from the same book, and were issued one after another, although sometimes he made mistakes and tore out the receipt and counterfoil. Thus he tore out 054063 and 054064. He agreed that 054071 was issued earlier than the serial number indicated. When pressed on this, he said there were two receipt books. Counterfoil 054071 related to another book. He also said that the books were not used solely for purpose of issuing receipts to the defendant.

24. When it was put to him that he had earlier said that all the counterfoils came from a single book, he said "Where did I say that?" He was told and replied: "Yes, I did say that but in fact they were from two different booklets. Most of the counterfoils were from same booklet, whereas a few were from another." He said that receipt 054061 was from the first page of a booklet, and pointed to some brownish residue adhering to the counterfoil consistent with it having been stuck to a cover of that colour.

25. The plaintiff told me that he had torn out the counterfoils to give to his lawyer. He said he had too many documents, therefore he just tore them out to produce to his lawyer because they were useful. He said that it was a co-incidence that first two counterfoils followed the other set. He said counterfoil number 054060 should be the one for April. He agreed that he had said that 054061 was the front page of a booklet, but because of poor memory it may not be.

26. Later in his evidence, the plaintiff produced a booklet of receipts and counterfoils. The first legible number on a fragment of a counterfoil in this booklet is 054072, and there is a portion of another counterfoil, but the number of this cannot be read. It is likely that this last-mentioned counterfoil is 054071. It appears to me from the physical appearance of this booklet that it is unlikely that counterfoil 054070 or the series commencing 054061 came from this same booklet. Counterfoils 054070 and 054071 are stuck together, but they are not aligned.

27. The plaintiff agreed that he issued a legal demand 57 months after the defendant ceased to pay. He did not seek to "kick him out" earlier because the defendant was his brother. He sought to "kick him out" now because his children were grown up and he needed the space.

28. The plaintiff said that, at the family meeting, the defendant did not agree that, if he failed to pay rent for 15 days or more, the 2 year tenancy would be terminated. However, he remembered that this was so in re-examination.

29. It was put to the plaintiff that the purpose of the family meeting was to resolve the dispute that he was claiming the defendant was only a tenant whereas the defendant was claiming he was an owner. Consistently with what he had said in his witness statement (that it was in September, 1992, that the defendant, for the first time, claimed he had an interest in the flat) the plaintiff denied this. However, when he was referred to a letter from the elder brother-in-law saying that the dispute was whether it was a tenancy dispute or "instalment" dispute, he agreed that this was the dispute. Asked to explain why he had not mentioned that the dispute existed at this time, said - "In my opinion, this problem does not exist. This property was purchased by me. At that stage, he claimed he owned half of it." The plaintiff gave no adequate explanation for saying that there was no claim by defendant to ownership at a stage earlier than September 1992.

30. The plaintiff agreed that he had received about $40,000 in total from the defendant, and had offered to pay him $40,000 to move out. He denied that he was trying to pay back the defendant's contribution. It was only a co-incidence that sum offered was more or less same as rental he paid.

The Evidence of the Father

31. The father, Lo Chi Ho, gave evidence before me. Mr Lo Chi Ho was born in 1907. His witness statement, which was adopted by him as evidence, is, word for word, in almost identical terms to that of the plaintiff.

32. It was quite clear to me, although the plaintiff denied it, and so did this witness until driven to admitting "I don't like him", that the father favours the plaintiff. He is not an unbiased, objective witness.

33. His evidence before me was supportive of that of the plaintiff. He said that he had no idea if defendant wanted to buy a flat. When he went to suit premises with defendant, the defendant was simply accompanying him to look for flat for the plaintiff. The plaintiff was present when the negotiations took place; it was the plaintiff who negotiated not the defendant. In spite of this, the witness was unable to give a satisfactory explanation as to why the flat was offered to the defendant.

34. The father said initially that he had never seen the rent counterfoils before, but he admitted that his handwriting appeared on one of them. He then said that he had seen just that one before.

35. Regarding certain records he kept about his dealings with the defendant, he said they were made at the time, but later admitted they were not contemporaneous.

The Evidence of the Defendant

36. The defendant gave evidence before me. He adopted his witness statement as evidence. In this, he said that three months before of the expiry of the lease of the old premises, he was informed by the landlord that the rent would be increased by 30%. About month later (or one or two days, if one accepts his oral evidence), he discussed the matter separately with plaintiff and the father. He and the plaintiff formed the view that it would be better if they purchased their own flat. About two months after notification of rent increase, he discussed the matter with the plaintiff again. They agreed that they would share the purchase price of a property equally and each of them would own one half of the property.

37. He and father went to see the suit premises. He negotiated the price. "Finally," he says, "the purchase price was verbally agreed as approximately $325,000 [he says $330,00 in a later statement]. The agent reminded them to come to the company to make a deposit of approximately $20,000 [he says $10,000 in a later statement] forthwith." Payment of the deposit was subsequently made by the father. They secured a loan from On Wah Securities. The father paid the $70,000 referred to in the agreement. He agreed with the plaintiff that he would pay a monthly sum to the plaintiff as his contribution to the loan repayments and the outgoings. The plaintiff would then arrange payment of these expenses. They agreed that the payments to On Wah, which did not require a fixed payment, would, for the first two years, not exceed $3000. Thereafter, the payments would be reviewed every two years. In a later statement, he says the On Wah loan agreement stipulated a monthly repayment of $3000.

38. At that time, the plaintiff's wife was still in China and her application to migrate to Hong Kong had not been approved by the Chinese authorities. When the loan was being arranged, the plaintiff suggested that he be registered as the sole owner of the flat so as to facilitate the wife's application, though he (the defendant) would own one-half of the flat. So it was agreed that the flat would be purchased in the plaintiff's sole name temporarily, and that arrangements be made to include the defendant as co-owner as and when the plaintiff's wife obtained permanent residence in Hong Kong.

39. In early 1985, the plaintiff and the father moved into the flat. Later, he moved in. The defendant occupied the southern portion.

40. In November 1985, he got into financial trouble. The plaintiff agreed that he could cease making contributions until his financial position improved.

41. At the family meeting in August 1990, he, in response to the request of the plaintiff , agreed that he would resume his monthly contributions and, regarding the $90,000 he owed for arrears, that, if he failed to pay, he must use his share of his mother's estate as security. The defendant insisted, however, that if he was able to repay the money he owed, he would be entitled to claim his share of his mother's estate and be added as co-owner. The plaintiff agreed to this. In a later statement, he say that Lo Wing told the father in his presence that she would contribute $800 per month to reduce the arrears.

42. There is no mention of payments of $1200 in his original statement. In a later statement, he says he contributed $1200 towards repayment of loan to On Wah. From January to October 1985, he paid nine instalments of $1200. He contributed $1200 and not $1500 as agreed before the purchase because he found that south portion he occupied was only 40% of whole flat.

43. In evidence before me, the defendant said that he formed the idea to purchase a flat jointly with the plaintiff before the notice of the rent increase, but it became more concrete afterwards. After he was notified of the rent increase, he went to see the plaintiff to discuss the idea with him. This was early November or early December 1984 approximately. He told the plaintiff of his first, and then told the father. The plaintiff agreed with his idea. He was then aware he needed the father's assistance. If the plaintiff rejected the idea, he could not purchase by instalments alone. Nor could he do so if the father did not approve. He mentioned to the plaintiff that each of them should have a half share. He raised the matter with the father the following night. His daughter, Lo Wing, was present. His father agreed to make the down-payment. The father said that if they had money, they could re-pay him; if not, they did not have to re-pay. They all decided to hunt for flats. He told the plaintiff of the rent increase first, and then discussed the idea of purchase with the father.

44. The defendant conceded that there was no mention in his statement of his meeting with the plaintiff and his father the night after his discussion with the plaintiff. He explained this by saying that he was told by the Legal Aid Department that he need only give brief version and that he could supplement it later.

45. The plaintiff did not come to suit premises when he was negotiating the deal; he did not arrive at any stage. He concluded the deal without the plaintiff seeing the flat. The defendant gave no satisfactory explanation for this; saying essentially it was a good deal - the flat was worth between $400,000 and $500,000. He said he and the father believed the plaintiff would be satisfied. It did not occur to him that the plaintiff might not approve. After inspection, the plaintiff said he was satisfied with flat.

46. The defendant agreed that the application for a loan from On Wah was by the plaintiff alone. When asked why this was not made jointly, he said this was because the property was to be registered in plaintiff's name alone, and it would unfair to him if he borrowed because if anything unfortunate happened to the plaintiff the property would be automatically transferred to the plaintiff's wife and children. The defendant was evasive about whether the plaintiff had said this. He was evasive about whether he knew if anything, or what, could be done to protect his interest. He said that he now realised that at the time he was too stupid and too honest. It did not occur to him to ask the plaintiff to write down that he had a 40% interest..

47. When asked if there was any reason why the sale agreement was in the plaintiff's sole name, he said he did not know. He knew the father went with the plaintiff to sign. He did not go because he was too busy preparing for an examination. He had no time; even two hours very important. Only when the father and the plaintiff told him they were going to sign did he say he was not going. Before that he gave them the impression he would be going. He gave no satisfactory explanation as to why not tell them before. He took advice from the estate agent who said he did not need to go. He was too busy to go, but he took the trouble to ask the agent's view.

48. He paid $1200 as his first instalment in January 1985. He gave no satisfactory explanation as to how he knew his portion was only 40% in January.

49. He was told the terms of the loan after the formalities were complete. He was told the monthly instalments were at least $3000, but could be increased. He said there was a misunderstanding with the lawyer over his statement that no minimum payment was stipulated.

50. He said he was quite certain that his portion was 40% of the whole, but refused to give his area in square feet or metres.

51. He agreed that the repayment arrangement with the father was not mentioned in his statements. He forgot to mention this.

52. It was always clear to him that he was a 40% owner. He said one-half to Legal Aid Department because he was only asked to give a rough indication. He did not pay attention when this was read over to him. In his evidence, he used the term "half and half", but said immediately that this means 40/60 not 50/50.

53. The defendant was asked about the arrangement in terms of which he agreed that the property could be assigned to the plaintiff alone. He said it would not help the wife to come to Hong Kong if the plaintiff was only a part-owner. There was, he said, a great difference between a part-owner and a sole owner. He was asked how the wife could take over the property when the husband was in Hong Kong. He said the husband would transfer it to her. The plaintiff only had to show proof that the husband was willing to transfer the property to her if she came to Hong Kong. A transfer was not necessary; only a promise to transfer. A promise by the defendant would not be believed.

54. There was never an agreement pay $1500 as he said in his statement. The impression created by that was wrong.

The Evidence of the Daughter

55. The defendant's daughter, Lo Wing, gave evidence. She is now 23 years of age, so she was about 13 years old when the relevant events transpired.

56. She said in her statement, which she adopted, that in early December 1984, she was present when the plaintiff and the defendant discussed the purchase of their own flat. The defendant suggested to the plaintiff that they could find a flat nearby with a reasonable price and area, purchase it and share repayment of the mortgage between them. The plaintiff agreed that it was a good idea to purchase a flat jointly and share repayment of the mortgage.

57. The following evening, the defendant invited his father and the plaintiff to their portion to discuss the oral agreement. The defendant told the father about the agreement. Father agreed to make the down-payment for the flat.

58. At that time, she slept in living room. She asked her father if she could have own room in new flat. Her father agreed and kept his promise.

59. After family meeting, she agreed to contribute $800 per month to reduce arrears.

60. On 5 October 1992, at about 8 pm, the plaintiff and the father discussed the dispute with her at the cafe at the Garden City Hotel. They requested her to persuade her father to give up his share of the suit premises and move out at once. They also sought to persuade her not to appear as her father's witness in the dispute. If she agreed, they were prepared to disregard the arrears due and would also pay $40,000 if they moved out. If her father had difficulties in the future they would offer $1000 per month to assist him. They said they were prepared to sponsor and assist her to study abroad and she could live with them in the flat. She rejected these "unreasonable" requests. Her grandfather then made some kind of threat, implying triad influence.

61. In her evidence, this witness made it clear that much of what said in her statement came from her father. As to some details of timing, she even adopted what her father had told her, although her own recollection was different. But she insisted that she had direct knowledge of the initial discussion between her father and the plaintiff and the one following with her grandfather. She also adhered to her version of events on 5 October 1992.

Assessment of the Evidence

62. At the end of this trial, when I had heard all the evidence, my firm impression was that I had not heard from anyone the truth of the matter. I have now read my notes carefully and given thought to the matter. I remain of the view that the truth has not emerged.

63. The plaintiff, the defendant and the father were all poor witnesses. I believe they are not unintelligent people, but they have very convenient memories. They were evasive, contradictory and my impression was that they always ready to say whatever they thought would advance their cause. Clearly, the father was biased in favour of the plaintiff, and the daughter favoured her father.

64. The daughter, I thought, was telling me what she thought was the truth, but, since the age of thirteen, for ten years, she had lived with her father's version of events, and, clearly, from her own evidence, he has influenced her greatly in this matter. In any event, it is difficult to believe that, at the age of thirteen, when she heard the conversations in 1984 to which she deposes, that she would have understood the significance of what was being said or absorbed it sufficiently to relate it independently ten years later. Of course, the fact that there was a prospect of having the privacy of a room to herself would have interested her, but this as consistent with her father leasing a portion of the new premises as purchasing the portion. Her version of the meeting with the plaintiff and the father on 5 October 1992 is probably substantially true, but, in my view, very little significance can be attached to this. The difference between seeking to persuade the defendant, through the daughter, to surrender his claim to a portion of the premises as against his right to a portion is subtle, and it is not possible to infer from the conduct of the plaintiff and the father that they were acknowledging the defendant's right as opposed to recognising that he was asserting a troublesome claim.

65. The quality of the evidence before me does not lead me to believe one version rather than the other.

The Probabilities

66. The version of the plaintiff and the father is that there was no discussion about purchasing a flat jointly before there was an agreement to purchase the suit premises. This, of course, as I have pointed out earlier, is inconsistent with the plaintiff's own pleadings and parts of his evidence. It is also inconsistent with the probabilities. I am asked to believe that, although the defendant showed little interest in purchasing a flat before the premises were purchased, afterwards he was offered, for no good reason, the opportunity of acquiring this attractive property in preference to the plaintiff; an offer which he rejected.

67. On the other hand, the defendant's version of how it came about that the loan, the agreement of sale and purchase and the assignment were in the name of the plaintiff alone is neither credible nor probable.

68. What the defendant says about how he came to pay $1200 per month, instead of $1500 per month, does ring true. He had grave difficulty explaining this himself.

69. The plaintiff's story about the issuing of the receipts to the defendant, and his explanations about the counterfoils are complicated and contradictory. There are several unsatisfactory aspects to this matter. The reason he gave for issuing the receipts in the name of the medical centre when they were being issued to his own brother, especially having regard to the fact that the purpose of the letting was residential, is hard to accept. This smacks of some attempt to make the counterfoils appear more 'official'. There is also no acceptable explanation as to why the counterfoil for the month of April is missing and why the plaintiff seemed to say there were others missing, bearing in mind that the counterfoils are numbered consecutively in manuscript and it is common cause that there were nine payments during this period. The stated periods for which the rental was paid are also peculiar. And there remains the problem about the receipt 054070 being apparently issued out of sequence.

70. The defendant remained in possession of a portion of the premises for some 57 months without paying anything. It is hard to understand why the plaintiff allowed this if the defendant was a mere tenant. It was not a case of brotherly love; the plaintiff asked the defendant to move out. Against this, it is difficult to believe that the defendant was unable to pay something as a co-owner during this long period, if only to mark his right.

71. It is also improbable that the defendant would do nothing about seeking to get his name registered as a co-owner after the plaintiff's wife arrived from China in about April 1989, having regard to the fact that, according to him, it was specifically agreed that arrangements would be made to include him as a co-owner when the plaintiff's wife came to Hong Kong.

72. The plaintiff said, initially, that the defendant made no claim to be a co-owner until September 1992. This is clearly untrue, but, if throughout the defendant was a co-owner and he had agreed that his name should not appear on the documents initially, it is improbable that he would not have taken even the most elementary of steps to have in writing a recognition of his interest. This is especially so when one has regard to the fact that when it was said that it would be unfair for him to oblige himself under the loan, he had adverted to the possibility of something going wrong and the property going to the plaintiff's wife and children.

73. As I have indicated, the defendant's memory of the details of the deal, which, he says, he himself negotiated in respect of a property of which he was to be a co-owner, was hazy when he made his first statement to the Legal Aid Department. He did not recall the amount of the purchase price or the amount of the deposit required. In my view, it is improbable that a person in the position in which the defendant says he was would fail to remember at least the purchase price of a property he had purchased and of which he was a co-owner.

74. I find it is improbable that the plaintiff would offer to pay to the defendant a sum approximately the same as the defendant had paid to him, together with offering other inducements, to persuade the defendant to move out of the premises if the plaintiff thought that the defendant had no rights whatsoever in respect of the property, especially if it so that the defendant had had occupation of a portion of the premises as tenant for a long period of time without paying anything for this benefit.

75. My conclusion on the probabilities is that they do favour either party.

Conclusion

76. In the result, I have decided that I cannot find for either party on the basis of the credibility of the witnesses or the weight of probabilities. That being so, the function of the onus comes into play. It follows from what I have said that I cannot find that either party has discharged the onus upon him. I cannot find there is a tenancy and I cannot find that the defendant is a co-owner.

77. I appreciate that this conclusion is unsatisfactory; it is unsatisfactory to the parties and it is unsatisfactory to me. It is my job to resolve disputes, and, in this case, I have been unable to do this. This situation should be avoided if at all possible, but I find that I cannot find in favour of either the plaintiff or the defendant because they have not put to me cases that are credible on the evidence or favoured by the probabilities.

78. In the result, both the claim and counterclaim are dismissed.

The Costs

79. There seems no reason why the costs should not follow the event. I make an order nisi that the defendant pay the costs of the claim and that the plaintiff pay the costs of the counterclaim.

Representation:

Mr K. H. Hui, instructed by Oldham, Lie & Nie, for the plaintiff.

Mr W. Sham, instructed by Samuel Soo & Co., for the defendant.