Ong Ban Chye v. Ong Ban Huey
Read the full judgment text of DCCJ 839/2007 on BabelCite. This District Court judgment was delivered on 31 March 2009.
1. This is a dispute over a property within a family.
Cites 2 cases
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DCCJ 839/2007 IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION CIVIL ACTION NO. 839 OF 2007 ------------------------ BETWEEN
---------------------- Coram: Deputy District Judge Richard Khaw in Court Dates of Hearing: 21, 22 & 24 July 2008 Date of Handing down of Judgment: 31 March 2009 ---------------------- JUDGMENT -------------------- The claim 1.This is a dispute over a property within a family. 2.The Plaintiff’s parents (the late Mr. Ong Hoo Lye (“Ong Senior”) and his wife, Madam Tay Ngiam (“Madam Tay”)) adopted the Defendant as their son in 1933 shortly after he was born. The Defendant has been treated as the eldest son in the family and has 7 siblings who are all the natural children of Ong Senior and Madam Tay. The Plaintiff (being the only other son in the family) is the younger brother of the Defendant. I shall deal with further details of the family later in my judgment. 3.The crux of the present dispute arose from the purchase of a property known as Flat H, 13/F, Coronet Court, Nos. 321-333 King’s Road and Nos. 1, 3, 5, 7, 7A, 9 and 9A North Point Road, Hong Kong (“the Property”) in 1992. 4.The Defendant was named as the purchaser in the Provisional Sale and Purchase Agreement dated 4 November 1992 (“the Provisional Agreement”), the Formal Sale and Purchase Agreement dated 17 November 1992 (“the Formal Agreement”) and the Assignment dated 31December 1992 (which have been duly registered in the Land Registry) and has therefore become the sole registered owner of the Property. 5.There is no dispute that the Defendant has never made any contribution to the purchase price (in the sum of HK$1,348,000) or any expenses incidental to the transaction (such as the legal costs and disbursements and also stamp duty). 6.The initial deposit in the sum of HK$30,000 was paid by the Plaintiff. Further, the Plaintiff (according to his case) caused a company named as Nikson & Co Ltd (“Nikson”) (in which the Plaintiff, at that time, was a director and also held 39,998 of 40,000 shares) to issue two cheques for payment of a total sum of HK$1,357,670 for the purpose of settling the remaining balance of the purchase price and the other relevant expenses. In addition, the Plaintiff also paid HK$13,480 as the estate agent’s fees. 7.The Defendant and his family have been residing in the Property since it was purchased. 8.On the basis of the contribution made towards the purchase price of the Property, the Plaintiff claims, amongst others, a declaration to the effect that the Property was at material times and is held by the Defendant on trust for the Plaintiff. On the contrary, the Defendant alleges that the Defendant was intended to acquire the entire legal and beneficial interest in the Property by way of an absolute gift from the Plaintiff. 9.Although the reliefs sought in the Amended Statement of Claim included vacant possession, Mr. Benjamin Chain (Counsel for the Plaintiff) in his submissions made it clear that the Plaintiff was not asking for an immediate order for possession. In the circumstances, I shall only focus on who should have the beneficial interest in the Property in this judgment. The law and burden of proof 10.The legal principles applicable to the present case, which do not seem to be in dispute, can be summarised as follows:-
11.In the present case, the Plaintiff relies on the presumption of resulting trust based on payment of the purchase price of the Property. It has been accepted by the parties that the burden is on the Defendant to prove that the intention was otherwise. As a result, the Defendant agreed to open his case first at trial. Background 12.Whilst both parties have referred me to quite a long history of events, it is obvious that some of such events (particularly those regarding what happened before the Defendant came to Hong Kong) do not have any direct bearing on the present dispute even though they may be relevant to the issue of credibility. For the sake of completeness, I now summarise the relevant factual background in the following paragraphs. 13.The Defendant was born on 11 December 1932. When he was adopted in 1933 in Fujian, PRC, Ong Senior and Madam Tay had not yet had any other children. In 1940, the Plaintiff was born in Burma when his father was working there. In fact, the family (including the Defendant) lived in Burma for some time until about 1942 when they returned to Fujian. 14.In about 1951 or 1952, Ong Senior and Madam Tay migrated to Hong Kong. The Defendant, after his graduation from secondary school at the age of 23 (i.e. about 1955), started to work in a government department. The Plaintiff, however, had to quit his studies before he received education up to the level equivalent to Form 3 and started to work for the purpose of supporting the family. During the period between 1952 and 1958, the Plaintiff and his sisters moved to Hong Kong at different stages. By 1960, the whole family (except the Defendant) had already migrated to Hong Kong. 15.According to the Plaintiff’s case, the Defendant was imprisoned in Mainland China in about 1970 due to the political stance he took. In 1977, the Defendant started to apply to move to Hong Kong. 16.The Defendant said that in around 1977, he received various letters from the Plaintiff and his father inviting and requesting him to make an urgent application although he himself had no desire to do so. In some of those letters, the Plaintiff requested the Defendant to come to Hong Kong to take over the family business and also his share of the father’s assets. The Plaintiff, in his evidence, admitted that those parts of the letters were untrue and had been exaggerated as it was hoped that the contents of those letter would facilitate the processing of the Defendant’s application. 17.In any event, who actually initiated the idea which led the Defendant to make an application to come to Hong Kong is not of significance. Further, the contents of the letters issued by the Plaintiff (on the assumption that they contained untrue statements which were intended to assist the Defendant in his application) are not material to the present dispute. Suffice it to say that the Defendant’s application was welcomed by the family at that time when Ong Senior was diagnosed to have cancer. Further, the Defendant admitted during cross-examination that he, after the application was made, also wanted to come to Hong Kong even though he said he did not originally intend to come. 18.In Hong Kong, Ong Senior was running a company known as Ban Hin Investment Co. (“Ban Hin”) which was carrying on securities trading business. While Ong Senior was ill, Ban Hin’s business was mainly handled by the Plaintiff. After Ong Senior was discharged from hospital in about 1978, he started to become less involved in the daily business of Ban Hin. 19.In about 1983, the Defendant came to Hong Kong after his application had been approved. He had stayed in the parents’ home in Braemar Hill (“the Braemar Hill apartment”) and also in the Plaintiff’s apartment in Winner House, North Point. He was also arranged to work in Ban Hin. 20.Although the Defendant, in his witness statement, made no mention of his relationship with his parents, he admitted in his oral evidence that he had friction and disputes with the parents when he lived with them in Hong Kong. From time to time, the Defendant had quarrels with them and sometimes got rather emotional and upset even in respect of very trivial matters. 21.On certain occasions, the Defendant even found it necessary to issue some handwritten notes to express his negative feelings towards his parents. Such notes included words such as “請不要:嘲弄我的人生; 任意擺佈我的命運; 把我的生命拿去開玩笑” and “對老人不滿，分別列出，以供大家細思”. Obviously, the parents were very angry at the Defendant’s hostile attitude and behaviour. They asked the Defendant to leave the Braemar Hill apartment in about 1985. Subsequently, as the relationship between the Defendant and Ong Senior further deteriorated, Ong Senior instructed the Plaintiff to terminate the Defendant’s work in Ban Hin. 22.The Plaintiff tried to persuade the Defendant to improve his relationship with the parents but to no avail. 23.After the Defendant was asked to leave the Braemar Hill apartment, the Plaintiff moved to an apartment at Ming Yuen Western Street, Hong Kong (“the Ming Yuen apartment”) where the Plaintiff’s sisters and their families lived. In about 1987, one of the Defendant’s sons (together with his family) also migrated to Hong Kong. They first stayed in the Braemar Hill apartment for some time and were then arranged to reside in the Ming Yuen apartment after one of the Plaintiff’s sisters moved out from there. 24.Further, with the assistance of the Plaintiff, the Defendant was arranged to work in another company, Reputed Castle Enterprises Company Limited (“Reputed Castle”) (in which the Plaintiff was a director and shareholder). When Reputed Castle ceased business in about 1987, the Defendant started to work as a watchman. 25.In about 1992, the Defendant informed, amongst others, the Plaintiff that his wife and another son were about to come to Hong Kong as their applications to permanently reside in Hong Kong were soon to be approved. After receiving such information from the Defendant, the Plaintiff purchased the Property with a view to providing suitable accommodation for the Defendant and his family. 26.The Plaintiff then over the telephone told the Defendant about his decision to buy the Property for his family’s use. He also mentioned that the purchase would be made in the name of the Defendant and asked for the number of the Defendant’s Hong Kong Identity Card. 27.What happened at that point in time and also shortly afterwards is in dispute and will, I believe, amount to an important factor in ascertaining the intention of the parties. 28.According to the Defendant’s evidence, around that time, there were three occasions where he and the Plaintiff had conversations which led the Defendant to believe that the Property was purchased as a gift to him. I will come to the details of the evidence later. It is necessary to mention at this juncture that the Defendant proceeded to execute the Provisional Agreement and the Formal Agreement in November 1992. The Assignment was made on 31December 1992. In the circumstances, the Defendant became the registered owner of the Property. 29.Unfortunately, the Defendant’s wife passed away in Mainland China in 1993 and was therefore unable to come to Hong Kong as originally planned. The Property was then occupied by the Defendant, his sons and their families. 30.In 1994, the Defendant approached the Plaintiff and told him about a business plan of operating a shop (together with the Defendant’s sons) which would sell Chinese medicine and other nutritious products. The Plaintiff offered to give them a sum of HK$700,000. The Plaintiff, in his evidence, agreed to the effect that the amount was given to the Defendant in the form of a gift in the sense that it did not have to be repaid. 31.With the assistance from the Plaintiff and his own savings, the Defendant set up a company known as “Ban Sing & Co” (“Ban Sing”) with his sons for the purpose of carrying out their business plan. However, the business did not do well and the Defendant was required to seek a loan from the bank. As a result, the Defendant considered having the Property mortgaged in favour of a bank as security for the loan. 32.By a handwritten letter dated 5 September 1995, the Defendant sought the Plaintiff’s consent to the intended mortgage. Before analysing the Plaintiff’s evidence in this regard, the fact that the Defendant found it necessary to seek the Plaintiff’s consent, in my view, constitutes another important factor in determining whether the Property was purchased as a gift to the Defendant. 33.The Plaintiff raised no objection to the Defendant’s suggestion to have the Property charged. The Defendant then instructed solicitors to prepare the mortgage documents. However, the mortgage failed to salvage the business of Ban Sing which was eventually closed down in October 1996. The Defendant was responsible for repaying the debts owed to the bank and managed to obtain a Release for the mortgage in 2005. 34.In fact, in view of the serious breakdown in the relationship between Ong Senior and the Defendant, the Plaintiff all along did not want his father to know anything about the purchase of the Property which was actually used by the Defendant and his family. However, for reasons unknown to both the Plaintiff and the Defendant, Ong Senior somehow had knowledge of the purchase. It transpires from his Declaration made on 23 September 1997 (“the Declaration”) (for the purpose of explaining the contents of his will made on the same day), Ong Senior stated as follows:-
35.Finally, after Madam Tay and Ong Senior passed away in 2000 and 2001 respectively, one of the Defendant’s sons in the village in Mainland China (together with the Defendant), as alleged by the Plaintiff, spread rumours about the distribution of the estate of his grandparents and also took the initiative of making substantial alterations to a family house in the village without consulting the Plaintiff and his sisters. The Plaintiff has adduced evidence that owing to the objectionable conduct of the Defendant and his son in those incidents, the Plaintiff has lost his trust and confidence on the Defendant. The Plaintiff relied on such information to explain why he suddenly decided to recover the interest in the Property from the Defendant. Payments made by Nikson 36.As a preliminary point, the Defendant contends that as the Plaintiff himself has only made payment in the sum of HK$30,000 towards the purchase price of the Property, the presumption of resulting trust could only apply to the Plaintiff’s beneficial interest to the extent of HK$30,000 as the rest of the payment was made by way of cheques issued by his company, Nikson. 37.However, it is clear from the receipts issued by Messrs. Poon, Yeung & Li (“PYL”) (solicitors instructed by the Plaintiff for the transaction) that payments from Nikson were expressly acknowledged to have been made by Nikson “on behalf of” or “for the A/C of” the Plaintiff. In the circumstances, the Defendant’s preliminary point has no merit. Credibility 38.Insofar as the outcome of this case turns on credibility of the witnesses, I have no hesitation in taking the view that I prefer the Plaintiff’s evidence to that of the Defendant. 39.In general, I have formed the impression that the Defendant is a person of strong character. He appeared to be stubborn and could be easily disturbed emotionally. At the same time, he was eager to assert his claims and was prepared to change his stance and also exaggerate things so as to advance his case. 40.I wish to highlight a few aspects of the Defendant’s evidence in support of my view that his evidence is self-contradictory and highly unsatisfactory:-
41.On the contrary, the Plaintiff impressed me as an honest and straightforward person. Although he was by no means sophisticated or eloquent, he was sincere in answering the questions and was able to respond to them spontaneously. 3 incidents pointed out by the Defendant 42.The Defendant, during cross-examination, emphasised that there were three incidents from which he gathered that the Property was given to him as a gift:-
43.Insofar as the 1st incident is concerned, the Defendant, in his witness statement, has gone so far as to say that the Plaintiff did expressly tell him that “the Property has been purchased in my name and all the interest of and in the Property would be vested onto me as a gift so that my family and I can have our own home in Hong Kong”. However, under cross-examination at trial, the Defendant admitted that the Plaintiff did not expressly mention that the Property was a gift. 44.The 2nd and 3rd incidents were briefly mentioned in the Original Defence. Whilst these two incidents have never been referred to by the Defendant again in his Amended Defence and also his witness statement, they resurfaced when he was giving evidence under cross-examination at trial. In any event, even if it is accepted that the Plaintiff did mention that the Defendant could rent out the Property, this factor cannot, by itself, support the existence of a gift. 45.In the circumstances and also having regard to my earlier views on the issue of credibility, I rule that the Plaintiff has never made any representation or indication to the effect that the Property was given to the Defendant as a gift. I accept the Plaintiff’s evidence that he simply purchased the Property with the use of the Defendant’s name without any intention to convey the interest in the Property to the Defendant as a gift. In fact, given what happened in the family at all material times, it is difficult to identify any convincing reason why the Plaintiff would have decided to give such a gift to the Defendant. 46.According to the Plaintiff’s submissions, the Defendant’s own belief or intention is not relevant to the question of intention (see Resulting Trusts, Robert Chambers (above), p.35; “Restitution and Constructive Trusts” by Lord Millet (contained in Restitution Past, Present and Future, Essays in Honour of Gareth Jones, 1998 Ed. p.201); and also Air Jamaica Ltd v Joy Charlton [1991] 1 WLR 1399 at 1412B-D). I accept this proposition. However, the Defendant’s own belief may throw light on what the Plaintiff might have said about the underlying intention of the transaction. In the present case, even on the assumption that the Defendant’s own belief is relevant, any belief that the Property was given to him as a gift has been directly contradicted by his request for the Plaintiff’s consent in respect of the intended mortgage. 47.In conclusion, I hold that the Defendant has failed to discharge his burden of rebutting the presumption of resulting trust. The other factors 48.For the purpose of completing the picture, I wish to make a few comments on the other factors which have been canvassed in parties’ submissions. 49.The Defendant has sought to criticise the Plaintiff’s case on the basis that if the Plaintiff simply purchased the Property for the Defendant’s and his family’s future use, such an arrangement could have been made by alternative means and it was unnecessary to have the Property registered in the name of the Defendant. However, it is exactly the registration of the Defendant’s name which has given rise to such a dispute. Hence, this factor alone is neither here nor there. I have already given my reasons as to why I did not accept the Defendant’s evidence. Further, the Plaintiff’s evidence on intention has been corroborated by Mr. Lo Pui Chung (“Mr. Lo”) who worked as a clerk in PYL in the conveyancing transaction. Mr. Lo’s evidence in this respect was not specifically challenged by the Defendant. 50.The fact that the Defendant has paid for decoration, rates and also management fees is also irrelevant. The Defendant does not rely on proprietary estoppel in this claim. 51.As stated above, it is unclear as to how exactly Ong Senior came to have knowledge of the purchase of the Property. He might not have been told of all the details leading to such purchase. In that case, he might have been under a misapprehension as to what actually happened in the transaction when he made the Declaration. Conclusion 52.By reason of the above matters, I declare that the Property (known as Flat H, 13/F, Coronet Court, Nos. 321-333 King’s Road and Nos. 1, 3, 5, 7, 7A, 9 and 9A North Point Road, Hong Kong), which is registered in the name of the Defendant, was at all material times and is held by the Defendant on trust for the Plaintiff. I also order the Defendant to deliver all the title deeds and documents relating to the Property to the Plaintiff and also to sign all necessary documents for the purpose of transferring all the legal and beneficial interest in the Property to the Plaintiff. 53.I further make an order nisi that costs of this action be paid by the Defendant to the Plaintiff, to be taxed if not agreed, with certificate for counsel. The order nisi shall become absolute in the absence of any application to the contrary. I also order that the Defendant’s own costs be taxed in accordance with Legal Aid Regulations.
Mr. Benjamin Chain, instructed by Messrs. Joyce Chan & Co., for the Plaintiff Mr. Patrick Szeto, instructed by Messrs. Cheung, Chan & Chung (assigned by D.L.A.), for the Defendant |
Cases cited in this judgment
Further hearings and rulings under DCCJ 839/2007