Yue Mei Kin (or Kuen) v. Lam Chark Hin

Case No.HCA 849/1976

Court

High Court CFI

Date—

Judge—

Case Document

100%Judiciary

HCA000849/1976

IN THE HIGH COURT OF JUSTICE

ORIGINAL JURISDICTION

ACTION NO. 849 OF 1976

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BETWEEN
	YUE Mei Kin (or Kuen)	Plaintiff
	and
	LAM Chark Hin	Defendant

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Coram: Li, J.

Date of Judgment: 21st July, 1977 at 4.24 p.m.

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JUDGMENT

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1. The plaintiff is the lawful wife of the defendant in this action. They were married in China in 1948 and came to Hong Kong together in 1949. Although there is no direct evidence as to how many children there are in this union I understand there are seven of them three of whom are still minors. Having come to Hong Kong they lived first in one room at the rent of $50 per month. The defendant was first employed by a company by the name of Watzman and then by the Yau Luen Hong at a starting salary of some $250 per month. They moved from one place to another until finally the defendant in 1954/55 purchased a flat known as No.17, Hei Wo Street the subject matter of this action and I shall refer to it as the suit premises.

2. The suit premises was assigned to the plaintiff as the purchaser. Then the family moved in to the suit premises and used it as their family home until 1960. Then in 1961 the family moved to a flat in Paterson Street. From that time onwards the suit premises was let out and the rent was collected by the defendant to be used as domestic and family expenses. The defendant also paid all the taxes and outgoings in respect of the suit premises.

3. In 1969, the family decided to migrate to Canada. The defendant went with the family. After a while, the defendant returned to Hong Kong. Later, the plaintiff found out that the defendant was living with another woman in Hong Kong. The relationship between husband and wife further deteriorated. Then in 1976, the plaintiff wrote to the defendant through her solicitor claiming the suit premises as her own. The defendant refused to hand over the title deeds to the plaintiff. Hence this action.

4. The plaintiff's case is that when she came to Hong Kong from China, she brought some money with her. Her maiden family was a fairly well-off family in Canton. Her father owned quite a number of shops and business enterprises. She said that she brought in the first instance a sum of HK$20,000 in cash with her when she came. Later on, she went back to China and liquidated whatever possession she had and brought a further HK$10,000. In addition, she had ornaments in gold which she converted into cash from time to time. Between 1949 and 1951 her mother brought a total sum of $47,000 and her younger sister who was a doctor brought some HK$58,000 to Hong Kong. They left their money with the plaintiff.

5. She said that the defendant was a penniless person who came to Hong Kong with nothing. As such, she had to pay for domestic expenses in the first couple of years. She had to subsidize the defendant. In addition, the defendant from time to time asked her for money so that the defendant could lend to manufacturers to buy raw materials in order to earn either commissions or interests. The defendant never repaid her. When she discovered that the defendant was fooling around with dance hostesses some time in 1951/52, she started to ask for repayment.

6. She said that she advanced some $40,000 odd to the defendant in this way, all her mother's money. Instead of repayment, the defendant told her that he would buy a flat in her name and let it out for rent so that remittances could be made to the plaintiff's parents in Canton. It was in such circumstances that the suit premises was acquired. After acquisition of the suit premises the defendant changed his mind and decided to move in to live there with the family. The plaintiff continued to ask the defendant for remittances to her parents and also for repayments. But every time she asked him the defendant used to bully her and beat her up. For this reason, she claims that the suit premises was purchased with her money, or, alternatively, that the suit premises was a gift to her because the defendant had spent a lot of her money in the years before.

7. The defence case is that the defendant also had money of his own in China. When he came down to Hong Kong, he brought a small sum of money, not much, leaving the bulk of his property in China intact without disposing of them. He says that the suit premises was acquired with his own money and savings. He admitted that his starting salary was about $250 per month plus travelling expenses. In addition he had been helping friends and business associates. He earned commissions. To start with, when he joined the Yau Luen Hong, he was practically in charge of the whole set of business. As the Yau Luen Hong was an exporting and importing firm, he very often received commissions from the manufacturers who supplied the Yau Luen Hong. He also helped his friends, a Mr. HONG and a Mr. LAM, in their export businesses. In this way, he also earned commissions. By about 1952/53, he had already accumulated a sum of some $30,000 in cash. He had always intended to buy a flat for his family to live in and that's why the suit premises was purchased.

8. The reason, he said, why the assignment was in the name of his wife as the purchaser was that during 1954/55 there was a what was called 'land reform' in China. All land owners, particularly land owners in the villages, were persecuted. At that time, his mother had already committed suicide as a result of the persecution in China. He had, however, still a step-grandmother and a step-uncle living in China. He constantly received threatening letters from the peasants in China saying that he was a landlord and he should go back to face trial. He feared that if the suit premises were assigned to him in his own name, he might have trouble by receiving further demands from the authorities in his native village that he must remit money home or they would further persecute his step-grandmother or step-uncle.

9. He said that ever since they moved out of the suit premises he collected all rents and paid for all outgoings. The plaintiff never demanded the suit premises from him. In addition, he held the title deeds of the suit premises.

10. In August 1975, after the family had migrated to Vancouver in Canada, there was a discussion with the family when his wife wanted to have a loan from him for property speculation. As a result, he agreed to lend 24,000 Canadian dollars to his wife on the understanding that it should be repaid within about eight to nine months after profits were made by this speculation.

11. Hence, the defence is that there should be a resulting trust of the suit premises in his favour, because the suit premises was purchased entirely with his own money.

12. Perhaps I should also mention that as the plaintiff failed to repay the 24,000 Canadian dollars to the defendant. There is a counterclaim for this sum. I should also mention that originally the defendant also counterclaimed for a sum of HK$7,380.20, being the sum remitted to the plaintiff's parents at the plaintiff's request. In the course of the proceedings the defendant has abandoned the counterclaim for the HK$7,380.20 and therefore I need not deal with this matter.

13. The issue between the parties appear to be: first, whether the suit premises was purchased with the plaintiff's money; secondly, if it's not purchases with the plaintiff's money whether the presumption of gift or advancement would apply to the suit premises or whether there was a resulting trust in favour of the defendant in respect of the whole interest or half interest of the suit premises; and the third point is whether the 24,000 Canadian dollars was a loan to the plaintiff or a gift to the plaintiff.

14. Having heard the parties and the witnesses who have given evidence I come to the conclusion that the plaintiff had not as much as a total of $135,000 in Hong Kong. However I am quite inclined to believe that some money must have been brought by her. I do not believe that the plaintiff had advanced the money which her mother and sister gave her to the defendant without asking for repayment until she found out that the defendant was fooling around with dance hostesses. Otherwise the plaintiff would have been a most irresponsible daughter or sister. These were indeed quite a sizable fortune in the early years of 1949/1950. They were the only security of her parents and her sister. She could not have let her husband use these without accounting for them all those years.

15. Nor do I believe that she would hide such a large sum in a quilt which was wrapped in newspapers and hidden under the mattress or the bed. Indeed, she called a witness LEE Yau to corroborate her evidence that her mother gave her money. However, I find that the evidence of LEE Yau was totally unreliable except in one aspect which vitally affected her reputation as a servant. She said that she cleaned the room thoroughly every day including underneath the bed. But she saw there was nothing underneath the bed or underneath the mattress at all.

16. Be that as it may, I find also as a fact that in the late '40s and early '50s, the plaintiff must have to some extent subsidized and contributed heavily to the household expenses. As I said, I believe that she brought some money to Hong Kong. She must have spent it to augment her husband's income. That was quite reasonable. The defendant admitted himself that he earned about $250 per month. Even at the early stages of the marriage his expenses were some $400 per month. In the first few months after arrival, the defendant had no employment at all. Granted that the defendant might have brought some money to Hong Kong, it could not have been very much. In evidence, he conceded that he did not sell any of his properties in China and he come from China soon after his marriage. He was a student before he went into China from Hong Kong to get married. He could not have a great deal of savings. Whatever was given him by his grandfather was left in China. In contrast, the plaintiff's parents were well-to-do. I am satisfied with the evidence so to that. Her parents must have given her some money and that's why she could utilize this money in the first few years to subsidize her husband, the defendant. On the other hand, I also find as a fact that the defendant did earn commissions whether permissible or not permissible by his employer the Yau Luen Hong or whether to the knowledge of the proprietor of the Yau Luen Hong or not. I also accept his evidence that the evenings he spent with HONG and LAM helping out the business and thereby earning further income were not entirely for pleasure and following around with dance hostesses. The plaintiff might be obsessed with the idea that no legitimate business was done by HONG and LAM. However, having regard to some of the documents produced and having regard to the defendant's evidence, I accept that he did earn an income from HONG and LAM as well. Therefore, I am satisfied that as from 1952 onwards, the defendant was gradually establishing himself on his feet in business and the scale of fortune turned. The defendant was earning money and getting more and more income whereas the plaintiff had already spent whatever she possessed when she come to Hong Kong in domestic expenses.

17. In 1952 when she found out that the defendant mixed his business with pleasure or fooling around with women, she started to pester him for repayment. There were quarrels. However, the plaintiff appears to me to be the typical type of woman who would tolerate the husband so long as he brought money home for domestic expenses. Provided that there's a roof over her head she was quite prepared to accept all this nonsense. By that time, there had been a few children and she did not have anywhere to go. It was in such circumstances that the suit premises was acquired in 1954/55 in the name of the plaintiff. It was used as their matrimonial home.

18. I am also satisfied that it was the defendant who provided the money for the purchase of the suit premises. Even if the plaintiff succeeds in proving that she lent the defendant any money, such money was never lent or advanced to the defendant in trust to enable the defendant to acquire a flat for her. Thus, in the first issue, I find for the defendant that the flat was not purchased with the plaintiff's money.

19. I now have to consider the second issue: the flat having been assigned to the plaintiff in her name, whether there was the presumption of a gift to the plaintiff. In this connection, I would have to repeat and bear in mind that the plaintiff and the defendant are husband and wife. As such, there is a presumption of advancement however slight. The burden is on the defendant to rebut this presumption so as to show there is a resulting trust. For this purpose the defendant gave evidence that there were two reasons why it was not a gift. The first one was that when the flat was acquired in 1954/55, there was a persecution craze on the part of the Chinese peasants in his village and that he feared not only for his step-grandmother but also for trouble to himself if the authorities in China knew that he owned properties in Hong Kong. The second is that since 1961, after the family moved out of the suit premises, he had collected the rent, paid the taxes and outgoings in respect of the suit premises throughout and the plaintiff never claimed for the suit premises. According to the defendant, the plaintiff never claimed the suit premises until 1976, just a short period before the writ was issued.

20. Although the fact in the case of Pettitt v. Pettitt⁽¹⁾ is different from those in the present case, I have to observe that four out of the five law Lords spoke something against the presumption of gift in the modern world. I only need to cite one of the dictums of Lord Reid at page 793 in which he said:

"It was argued that the present case could be decided by applying the presumption regarding advancement. It was said that if a husband spends money on improving his wife's property, then, in the absence of evidence to the contrary, this must be regarded as a gift to the wife. I do not know how this presumption first arose, but it would seem that the judges who first gave effect to it must have thought either that husbands so commonly intended to make gifts in the circumstances in which the presumption arises that it was proper to assume this where there was no evidence, or that wives' economic dependence on their husbands made it necessary as a matter of public policy to give them this advantage. I can see no other reasonable basis for the presumption. These considerations have largely lost their force under present conditions, and, unless the law has lost all flexibility so that the courts can no longer adapt it to changing conditions, the strength of the presumption must have been much diminished. I do not think that it would be proper to apply it to the circumstances of the present case."

21. However, I have also to read another dictum from Lord Morris of Borth-y-Gest at page 803 in which he said:

"Where questions of ownership have to be decided the judge must weigh every piece of evidence as best as he may; the fact that the parties are husband and wife all that is as a result involved, is in itself a weighty piece of evidence. Sometimes the conclusion will be that ownership was in one party alone; sometimes the conclusion will be that ownership was in both parties. There will be some cases in which a court is satisfied that both the parties have a beneficial interest, and a substantial beneficial interest but in which it is not possible to be entirely precise in calculating their respective shares."

22. Taking these into consideration, I find that in this issue I have to consider the various circumstances under which the suit premises was acquired and whether the defendant has satisfied me on the balance of probability that he never intended a gift to his wife although such a presumption is very much weakened these days. I have to consider also that the circumstances that prevailed in England in 1970 were quite different from the circumstances prevailing in Hong Kong in 1954/55 amongst Chinese persons of the generation to which the plaintiff and the defendant belonged. Perhaps I should add that however slight, as Lord Morris said, the very fact that they are husband and wife is an important piece of evidence to be taken into consideration.

23. The two-fold explanation or evidence in rebuttal adduced by the defendant was: the fear of persecution; and, that he had treated the property all along as his own without any query by the plaintiff. In addition the plaintiff allowed him to retain the title deeds of the suit premises.

24. I first deal with his fear of persecution. In this connection, I have to observe that the defendant was a person who was originally educated in Hong Kong, he was brought up in an environment of comparative freedom when he went back into China to marry the plaintiff. By the time the persecution craze in China started, he was already well settled in Hong Kong having acquired some savings. That's in 1954/55. He said that he continually received letters from China accusing him of being a landlord and that he also feared for his grandmother. I have to observe that that was his step-grandmother, the deceased husband of whom was already branded as a landlord. Indeed, the whole of the defendant's family was branded as landlords. Whether the defendant had, in addition, properties in Hong Kong would not worsen or ameliorate her position. In short, she had been persecuted in any way. As to the defendant, he should have known that living in Hong Kong, so long as Hong Kong remains under the British flag, nobody could touch him for owning a flat or indeed any property in Hong Kong provided it was legitimately acquired. Further, the plaintiff's parents were still in Canton. There had not been evidence that they had been persecuted. If the defendant's fears were justifiable fears, then the same predicament would have applied to the plaintiff's parents. If the plaintiff was also a property owner, then the same fear should have applied to the plaintiff. I do not accept that fear on the part of the defendant was the real reason why the flat was assigned in the name of the plaintiff. Had that been so, the defendant would have been a most selfish husband who passed on the risk of persecution to his wife and her parents for nothing.

25. Then there was this question that the rents and profits were all received by the defendant. On the defendant's own evidence, from 1961 up till recently the rents and profits of the suit premises were all used for domestic expenses. Having regard to the type of person the plaintiff is, a Chinese woman of her age and of that generation who is entirely dependant on husband and would tolerate quite a lot of nonsense I find that she's quite prepared to allow her husband to handle money. She's also satisfied provided that the husband brings money home. As long as the rent collected from the suit premises were used for the family probably she had no objection.

26. But there's the other side of the story. After the family had migrated to Canada, the defendant returned. There was a power of attorney (Exhibit 4) executed by the plaintiff for the defendant to sell the suit premises in 1970. At that time, the defendant could not sell it because he could not render vacant possession. No question was raised then that the plaintiff should acknowledge the flat belonging to the defendant or that it was a case of resulting trust. In 1973, the defendant had a few flats in other properties assigned in the names of his sons. He was careful enough to require the sons to execute a declaration of trust in his favour. In 1972, it was evident to the defendant that the plaintiff was applying for legal aid to claim the suit premises as her own. Nothing was done to protect his interest even up to 1975 when there was a family meeting when the plaintiff demanded maintenance and provision for the family. No question was raised on the suit premises. Instead, a sum of 24,000 Canadian dollars was transferred to the credit of the plaintiff's account. I shall come to that $24,000 later.

27. It is sufficient at this stage to observe that had there been a genuine resulting trust, had the defendant wanted to claim the suit premises as his own, he should have taken actions to protect his interest then and there. On the contrary, he did nothing. He never alleged the suit premises was his until he filed his affidavit in opposition to an Order 14 summons. That was the first time he made his claim. As far as the plaintiff is concerned, she had taken steps as far back as 1972 to regain possession of the title deeds of the suit premises. There's no denial that when the defendant had money, he started to have other woman and that in 1975 he was permanently settled with another woman in Hong Kong. Hence the family meeting in Canada.

28. I find as a fact that although the suit premises was purchased with the defendant's money, yet on the balance of the evidence the suit premises was purchased in the name of the plaintiff so as to give the plaintiff security and as a gift to her. This was particularly in consideration of whatever money she might have spent in the early years to subsidize the domestic expenses. I also find that the plaintiff allowed the defendant to retain all the title deeds and maintain the suit premises provided the defendant was prepared to utilize the rent so collected for domestic expenses. This ran well up to some time in 1972/73 when it was apparent to the plaintiff that the defendant was having other women in Hong Kong. In 1975 when it was definite that the defendant had already settled down in Hong Kong with another woman the plaintiff took action. For these reasons, applying the test and the dictum cited in Pettitt v. Pettitt, I am of the opinion that taking all the evidence into consideration this was a case of a gift or an advancement by a husband to a wife in 1954/55.

29. I now consider the counterclaim of $24,000. According to the plaintiff there was a confrontation during the family discussion. The plaintiff was asking for the earth which I can believe. She was asking for all the defendant's properties, all his shares and all his savings, the typical behaviour of a woman who has not hurt in feelings. She said that she asked for 50,000 Canadian dollars but the defendant only agreed to pay her $24,000 Canadian dollars as provision for her maintenance and that of the family. The defendant's evidence is that this sum of 24,000 Canadian dollars was a loan to the plaintiff which the plaintiff would use for property speculation with their eldest son. It was envisaged that within eight to nine months the loan would be repaid to the defendant. However, the plaintiff failed to repay it.

30. On the evidence alone I have much less difficulty in coming to the conclusion that it must have been a gift. One of the most obvious reasons is that by 1975 it was quite clear to the defendant that the plaintiff wanted the suit premises. She wanted the earth. She knew that the defendant had another woman. Being a man of the world and a businessman if the defendant wanted to protect himself, one would have expected the defendant to ask for some documentary evidence of loan in the form of an I.O.U. or something similar. Instead, the transfer was made straight out to the plaintiff. For this reason alone and together with the background under which the 24,000 Canadian dollars were transferred, I come to the conclusion that it must have been a gift and not a loan by the defendant to the plaintiff.

31. In the circumstances, I find in favour of the plaintiff. There will be judgment for the plaintiff and a declaration for the plaintiff to the effect that the beneficial interests of the suit premises belong to the plaintiff, that the plaintiff is entitled to an account of its rent and profits and outgoings for the last six years preceding the writ of summons, that the title deeds of the suit premises should be returned to the plaintiff by the defendant and that the counterclaim of the defendant for the 24,000 Canadian dollars should be dismissed. Costs should follow the events. The plaintiff would have costs in both the claim and the counterclaim. Once account is settled and money found due, the defendant would have to pay the plaintiff.

Representation:

(1) (1970) A. C. 777.