Ian Hung Wai v. Cheung Sau Kuen and Another

HCA1541 /2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1541 OF 2007

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BETWEEN

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Before: Hon Au J. in Court

Dates of Trial: 29 January 2010, 1 to 4 February 2010 & 30 April 2010

Date of Judgment: 26 July 2010

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J U D G M E N T

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A. Introduction

1.Between August 1999 and November 2002, Mr Ian (the Plaintiff) and Ms Cheung (the Defendant) were boyfriend and girlfriend cohabitating together in Shenzhen, the Mainland.

2.During this period, Mr Ian says:

(1) He had purchased for or given to Ms Cheung three landed properties (two in Shenzhen and one in Hong Kong), all pursuant to an agreement (“the Marriage Agreement”) whereby Ms Cheung promised to marry him and to take care of him for the rest of his life.

(2) He had given to Ms Cheung various sums also pursuant to the Marriage Agreement.

(3) He had loaned to Ms Cheung and her sisters, at Ms Cheung’s requests, various sums of money.

(4) Ms Cheung has taken away a sapphire ring owned by him and has not returned it.

3.They broke up in late 2002, and they were never married.    As a result, Mr Ian now says he is entitled to the return of these properties and money.  He also wants the loans to be repaid and his sapphire ring back.

4.Thus, by this action commenced in 2006, Mr Ian claims against Ms Cheung for the return of the three landed properties, various sums of money and the sapphire ring.

B.      Mr Ian’s case in summary

5.It is common ground that, during this period of time, Ms Cheung had become sequentially the registered owner of the following properties:

(1) No. 1101, Block E, Wan Ke Jin Sa Jia Yuan, 2018, Lian Hua Xi Lu, Shenzhen, Guangdong Province, PRC (“the Shenzhen Property”) in about June or July 2000; and

(2) Flat 7 on the 7^thFloor of Block A, Tin Oi Court, Tin Shui Wai, Yuen Long, New Territories, Hong Kong (“the Hong Kong Property”) in about July 2000.

6.It is also Mr Ian's case that pursuant to the Marriage Agreement:

(1) In about September 1999, he paid two sums of RMB145,000.00 and RMB70,000.00 to Ms Cheung to enable her to settle her share of the building cost of the construction of a 4-storey villa named as 布心山莊 (“the Shenzhen Villa”) by Ms Cheung’s family.  Ms Cheung had said to him that he and she could live at the 2^nd floor of the Shenzhen Villa (“the Shenzhen Villa Unit”) when completed as matrimonial home.

(2) In about February 2002, he had altogether given Ms Cheung  a total of RMB$400,000.00 (“the Investment Sums”) to enable her to invest in an underwear retail business.

(3) During the time of cohabitation, he had been paying for the household expenses and the educational fees of Ms Cheung’s children, which are not less than RMB42,000.00 (collectively, the Miscellaneous Expenses”).

(4) At the requests of Ms Cheung:

(a) he lent to Ms Cheung’s sister Ms Cheung Sau Hung RMB50,000.00 in about March 2000.

(b) he paid off Ms Cheung’s own debts in the total sum of RMB100,000.00 in about June or July 2000.

(c) he paid Ms Cheung RMB200,000.00 to pay off her younger sister Cheung Sau Han’s mortgage loan in about February or March 2002.

(d) in February or March 2002, he paid Ms Cheung RMB50,000.00 to help her younger sister,  Cheung Sau Lan and her husband to complete the purchase of a housing unit in Shenzhen.

For convenience, I would call these above sums set out in paragraph 6(4) collectively “the Loans”.

(5) One day in March 2002, Ms Cheung without Mr Ian’s consent took away a sapphire ring (“the Sapphire Ring”) owned by him and has since refused to give it back despite demands.

7.In November 2002, it is again common ground that Mr Ian was evicted from the Shengzhen Property where he had been cohabitating with Mr Cheung (together with Ms Cheung’s own family) after it was purchased. 

8.Mr Ian now claims against Ms Cheung for the following relief:

(1) A declaration that Ms Cheung has been holding the Shenzhen Villa Unit, the Shenzhen Property and the Hong Kong Property on trust for him and that these properties have been beneficially owned by him.

(2) A declaration that Ms Cheung do transfer and assign the Zhenzhen Villa Unit, the Shenzhen Property and the Hong Kong Property to Mr Ian.

(3) Account and enquiries and tracing orders.

(4) Damages for misrepresentation.

(5) Ms Cheung do repay Mr Ian the Investment Sums and the Loans.

(6) Ms Cheung do forthwith deliver up the Sapphire Ring to him or alternatively for damages for conversion.

9.Mr Andy Hung, counsel for Mr Ian, pursues this claim on the following causes of action:

(1) Insofar as the properties are concerned:

(a) Breach of the Marriage agreement as these are all purchased with the use of Mr Ian’s money pursuant to the Marriage Agreement.   They are now returnable to Mr Ian given Ms Cheung’s breach in failing to marry him.

(b) Total failure of consideration under the Marriage Agreement as Ms Cheung has refused or failed to marry him.

(c) They were gifts given conditional for marriage and thus returnable when there was no marriage.

(d) Misrepresentation, as the purchases of the properties for Ms Cheung were all premised upon the misrepresentation that she would marry him.

(e) Unilateral mistake, given that he has purchased all the properties for her based on a unilateral mistake that she would marry him.

(f) Constructive trust/resulting trust/proprietary estoppel, as these properties were all purchased with the use of Mr Ian’s money based on the Ms Cheung’s representation to marry him and to use them as matrimonial homes.  It would now be unconscionable for her to hold on to the properties or that she is now estopped from denying the beneficial ownership of Mr Ian in these properties.

(2) Insofar as the Investment Sums are concerned, by the same causes of action as for the properties, it should now be returned to him.

(3) For the Loans, they are repayable on demand.

(4) For the Sapphire Ring, on conversion or detinue.

(5) In any event, all the above should all be returned to Mr Ian on the basis of unjust enrichment.

C.      Ms Cheung’s case in summary

10.In defence, Ms Cheung’s case can be summarized as follows:

(1) In relation to the claim for the properties:

(a) She had never made the promise to marry Mr Ian and there was never the Marriage Agreement. 

(b) In any event: (i) she was not the owner of the Shenzhen Villa or the Shenzhen Villa Unit, while (ii) the purchase of the Shenzhen Property was all financed by her own money but not Mr Ian’s, and (iii) in relation to the Hong Kong Property, it was given to her out of love as an absolute gift. 

(c) Alternatively, if Mr Ian had given her the money in relation to the properties as alleged, they were given to her as absolute gifts out of love.

(d) Further alternatively, if she had made the representations to marry him:

(i) there was still no Marriage Agreement as they were made socially without any intention to create any legal binding effect.

(ii) and even if there was the Marriage Agreement, there was no breach or no total failure of consideration, since it was Mr Ian who was in breach of it first because of his unreasonable behaviour and by abusing her physically.

(2) For the Investment Sums and the Miscellaneous Expenses:

(a) she denies that she and her family had ever received these sums.

(b) alternatively, if they had ever received them, there was no Marriage Agreement and Mr Ian gave it to them as absolute gifts out of love.

(c) further, if there was the Marriage Agreement and that these sums were given to her based on that, it was Mr Ian who was in breach of the agreement.

(3) For the Loans, they were never made by Mr Ian and she had never requested for them.

(4) For the Sapphire Ring, again, she had never taken it, if there was ever the Sapphire Ring.

(5) Given that there were no representations to marry, or that the properties and money were given by Mr Ian as gift out of love, there also could not be any valid basis for any claim based on constructive trust, resulting trust, estoppel and/or unjust enrichment.

D.      Core issues

11.In light of above contentions raised by the parties, the core issues for trial are:

(1) Were there the requisite representations and the Marriage Agreement.

(2) Who paid for the purchases of the Shenzhen properties.

(3) If the two Shenzhen properties were paid for by Mr Ian, were they given to Ms Cheung pursuant to the Marriage Agreement, or as conditional gifts or absolute gifts.

(4) Was the Hong Kong Property given to Ms Cheung as an absolute gift.

(5) Had Mr Ian paid the Investment Sums and the Miscellaneous Expenses, and if so, were they given as absolute gifts out of love or conditional ones for the anticipated and promised marriage.

(6) Was Mr Ian in breach of the Marriage Agreement if there was one, and even if so, whether this would prevent the recovery of the properties and money given to Ms Cheung based on the anticipated marriage under the agreement.

(7) Depending on the above findings, whether they give rise to the case of misrepresentation, unilateral mistake, constructive trust, resulting trust, proprietary estoppel or unjust enrichment over the properties and the Investment Sums.

(8) Had Mr Ian made the Loans.

(9) Has Ms Cheung taken the Sapphire Ring, if there is one.

E.      Background

12.Unless otherwise stated, the following are the uncontroversial background facts I regard as relevant to the present disputes.

13.Mr Ian was born in Indonesia but had been raised in Guangzhou until completing his primary education.  Later he and his family first moved to Macau and then subsequently to Hong Kong.  In 1968, he went to Taiwan to continue his education, and had remained there to work after graduation.

14.He had been working in the financial field in Taiwan, and had made a lot of money from the stock market. 

15.Between 1990 and 1996, he had used part of the money he had made to purchase properties in Hong Kong for his parents’ living^[1].  He had also made some profits under these property transactions.

16.In about 1996 or 1997, Mr Ian started his retirement and returned to Hong Kong on a more permanent basis.  At that time, other than owning a property in Tin Shui Wai, he had some cash saved from the profits he had made from his investments in the stock and property markets.  Mr Ian has also been interested in collecting and dealings with antiques.  According to him, (a) in 1997, his collection of antiques was worth around HK$1m to HK$2m, (b) by 1999, he also had some un-repaid loans from his half younger brother and sister amounting to some US$130,000.000 to US$140,000.00.

17.He had been regarded by his father as a big spender and he is generous with his siblings and family members.   He also collects and wears expensive watches and man accessories. 

18.Ms Cheung, now aged about 47, is a resident in Shenzhen.  She was previously married and has two daughters and one son.  In 2008, they were respectively aged 25, 23 and 21.     She also has four sisters. 

19.Ms Cheung’s former husband passed away in 1994.  Since about 1989, Ms Cheung had been running a bedding retail and supplying business at a rented shop (“the Shop”) in Shenzhen.  At one time, she was also carrying on retail business through a consignment counter in a shopping mall. 

20.According to Ms Cheung, the retail business at the Shop was closed down sometime in October 2002, while the business at the consignment counter was also terminated in about 2006.

21.Until around 2000, she had been living in the Shop while her children were then separately residing at her sisters’ homes. 

22.In about late 1998 or early 1999, Mr Ian and Ms Cheung came to know each other.  He was then 58 and Ms Cheung 38.  They soon developed an intimate relationship, and by mid-1999, they had started cohabitating at the Shop.

23.In late 1999, Ms Cheung became the registered owner of the Shenzhen Property.  The purchase price of the Shenzhen Property was RMB573,920.00.   Later, in the end of 2000 or early 2001, Ms Cheung, her mother and her children moved to live in the Shenzhen Property.  Mr Ian also moved in to live with them.

24.At the same time, in about March 2000, Mr Ian entered into a sale and purchase agreement to buy the Hong Kong Property.  The purchase price was HK$820,000.00.

25.On 14 July 2000, Mr Ian and Ms Cheung went to a solicitors firm in Hong Kong to execute a nomination whereby Ms Cheung was nominated by Mr Ian to become the purchaser and registered owner of the Hong Kong Property instead of him.   She also then executed the corresponding assignment.

26.Mr Ian eventually paid for the full purchase price of the Hong Kong Property and Ms Cheung became the registered owner.   He also subsequently brought the title deeds from Hong Kong and gave them to Ms Cheung.

27.After the purchase of the Hong Kong Property, it was Mr Ian’s stepmother who was living in it.

28.In November 2002, it is common ground that Mr Ian moved out of the Shenzhen Property when he found one day that the locks to the house were changed  His relationship with Ms Cheung  had also by then broken down. 

29.After then, Mr Ian has been living in the Hong Kong Property as well.

30.In June 2004, Ms Cheung through her lawyers in Hong Kong sent a letter^[2] to Mr Ian purporting to terminate Mr Ian’s licence to occupy the Hong Kong Property, and asked him to vacate it by the end of July 2004.

31.Notwithstanding this letter, Mr Ian has not moved out of the Hong Kong Property.

32.In January 2006, i.e, two years after the above mentioned demand latter, and four years after the break-down of the relationship, Mr Ian brought this claim in the District Court seeking a declaration that Hong Kong Property is beneficially owned by him.    This initial claim related only to the Hong Kong Property.

33.In February 2007, Mr Ian amended his Statement of Claim to include claims against the Shenzhen Villa Unit and the Shenzhen Property, the Investment Sums and the Loans, as well as the Sapphire Ring.

34.In June 2007, the proceedings were transferred to the High Court.  Since then, both sides pleadings have been subject to further amendments. 

F.      The issues

F1.    Were there the representations on marriage and the Marriage Agreement

F1.1  The evidence

35.Mr Ian gave evidence to the effect that since late 1999:

(1) Ms Cheung had on various occasions said to him that she would marry him and take care of him.  It is Mr Ian’s evidence in his witness statements that she had also said that in front of his friends and parents.   On cross-examination in relation to the occasion Ms Cheung repeated the representations before his parents in Hong Kong, Mr Ian corrected himself and said Ms Cheung only said that in front of his mother but not father. 

(2) In asking him to give money to her to build the Shenzhen Villa and to purchase the Shenzhen Property, she had said that the Shenzhen Villa Unit and the Shenzhen Property would be used as matrimonial homes.

(3) Based on her representations to marry him and to take care of him, he nominated her to be the owner of the Hong Kong Property so as to use it as their future matrimonial home.

36.Mr Ian also called Mr Tsang Kin Kwan to give evidence in support under this issue.   Mr Tsang’s wife is the goddaughter of Mr Ian’s father.  Mr Tsang gave a witness statement.  The statement only has two  paragraphs which state as follows:

“1. 本人曾於2001年6月16日，參加原告人大哥鄢鴻偉旺在深圳華橋城舉行結緍喜酒，當晚是我首次與被告人見面，經原告人介紹，才知她是被告人。當其時，我和她言談中提及下回該輪到原告人與被告人的喜酒，她笑而回答說應好快會安排，後來，我與他倆合影相片,當時大家談笑甚歡。

2. 約於2002年2月左右，原告人帶同被告人到我家住了數天，因當時被告人其公司在廣州大沙頭舉辦大型展銷活動,其活動主要是推銷女子減肥服裝；我和妻子都參加了其活動。後來，原告人告知我，是他打本給被告人做其減肥服裝生意的。其間有一晚，被告人之大女也到廣州與我家一同吃飯，並談及她到廣州諗大學，一直到是原告人支付費用的，她說如果沒有“阿叔”(原告人)，她何曾想過讀大學，她又讚美原告人如何好，將來一定會好好報答他們等。席間，被告人更親口對我說，她及她的家人會好好照顧原告人，叫我放心。” (emphasis added)

37.Ms Cheung denies that she has made any “promise” or agreement to marry Mr Ian or agreed to marry him in return for the properties.   She said this at paragraph 10 of her first witness statement:

“10. 在同居期間，雖然本人與原告人相愛，已發展成為親密男女關係，但本人從沒有想過、或答應與原告人結婚。因為當時本人已是3名子女(本人與前夫所生)的母親，加上3名子女已長大成人，實在沒有需要為3名子女再找新父親。本人一向經濟獨立，毋須依靠原告人。本人開始與原告人相愛時就說做男女朋友，原告人亦同意以男女關係一起生活。” (emphasis added)

F1.2  Discussion

38.After looking at the evidence against the objective and undisputed evidence, on balance, I reject Ms Ian’s evidence that Ms Cheung had made those various representations as alleged or the Marriage Agreement.  

39.In my view, the allegations of there being the representations and the Marriage Agreement are unbelievable as they are inconsistent with the following objective facts and evidence:

(1) Throughout the almost 3 years after the representations and the Marriage Agreement were said to have been made:

(a) There had not even been any tentative date set for the marriage.

(b) Mr Ian had never bought or given to Ms Cheung any engagement or wedding ring.

(c) Mr Ian had never planned to take or taken any wedding photos with Ms Cheung.

(2) Notwithstanding it is Mr Ian’s own case that his parents were aware of his intending marriage with Ms Cheung and that Ms Cheung had also made the representations before at least his mother, when Mr Ian’s father passed away in early 2001, Ms Cheung was not even invited to attend the funeral.  

40.Mr Ian sought to explain why some of the above were not carried out under cross-examinations.  However, I also find this part of Mr Ian’s evidence unreliable:

(1) Under cross-examination, he first could not explain why he did not invite Ms Cheung to attend his father’s funeral.  He then said perhaps it was because it was around the Chinese New Year, and he did not find it appropriate to invite Ms Cheung.  But when pressed and asked why it would be inappropriate for a prospective daughter-in-law to attend the funeral even if it was the Chinese New Year when all the other family members would attend, he could not explain.  He then later changed his evidence and said he could not remember whether he had invited Ms Cheung to attend, and if so, perhaps Ms Cheung had for some reasons refused to go.

(2) I find these explanations unreasonable and unacceptable.   They do not accord with common sense, and the various changed versions are inconsistent with each other.

(3) Further, when questioned under cross-examination as to why they did not get marry for so long or make any planning for the marriage if there were in fact the representations and Marriage Agreement, he for the first time gave the evidence that:

(a) he had repeatedly asked Ms Cheung when they should in fact get marry;

(b) it was Ms Cheung who had been stalling it by saying that as the tombstone of her deceased ex-husband had not been properly engraved and settled, under the local customs, it would be impolite and inappropriate for her to get re-married.   They would have to wait until that was properly done.

(4) I similarly do not accept these explanations.  In my view, they are no more than an afterthought came up by Mr Ian in the course of his oral evidence:

(a) If this were true, there are no good reasons why Mr Ian had not mentioned this in his three witness statements.  This is an important part of evidence to show that Ms Cheung had been stalling the marriage.

(b) It is against common sense that, first, after more than 5 years (Ms Cheung’s ex-husband died in 1994) that the tombstone had not been properly engraved and done.  It is even more contrary to common sense that, if this was an excuse given by Ms Cheung after the representations were made, Mr Ian would have continued to allow this to continue to drag on for another 2 years or so without chasing up or seeing that the engraving of the tombstone be done. 

(c) This was not even put to Ms Cheung under cross-examination.

41.I therefore reject Mr Ian’s evidence that Ms Cheung had made the various representations to marry him.   Save for my view on Mr Tsang’s evidence as set out below, for the same reasons, I reject Mr Ian’s case and evidence that:

(1) Ms Cheung had repeatedly reassured and promised him and in front of his friends and family members that she would marry him and take care of him for the rest of his life.

(2) There was any binding agreement or any intention on the part of Ms Cheung to form any binding agreement to marry Mr Ian.

42.Insofar as Mr Tsang is concerned, I am prepared to accept his evidence.  But even taking that (as quoted above) to the highest, it amounts to no more than that Ms Cheung had in a social occasion, and upon being asked jokingly and socially, indicated that she might get married with Mr Ian.  That to me is no more than a casual conversation, which is not infrequently casually made by persons involved in a courtship, made by Ms Cheung when asked.  This could not per se amount to any commitment made by her or any intention in her to form a legally binding agreement to marry Mr Ian.

43.In contrast, on balance, for the same reasons set out above at paragraph 39 above and subject to my above acceptance of Mr Tsang’s evidence, I accept Ms Cheung’s evidence that she had not made representations or the Marriage Agreement in the sense that she had made or intended to make any firm commitments or legally binding agreement to marry Mr Ian and to take care of him for the rest of his life. 

F1.3  Finding

44.Under this issue, I therefore find that:

(1) Ms Cheung had made at least a casual conversation with Mr Tsang that she might marry Mr Ian.    However, she had not made or intended to make any binding commitment or agreement to marry Mr Ian.  

(2) Thus, Ms Cheung had not made the representations as alleged for any committed marriage or committed use of the properties as matrimonial homes or the Marriage Agreement with Mr Ian.

F2.    Who paid for the purchases of the 2 Shenzhen properties

F2.1  The evidence

45.Mr Ian says:

(1) He had in about September 1999 paid a total of RMB215,000.00 to Ms Cheung at her request to enable her family to build the Shenzhen Villa Property.   Mr Cheung in asking Mr Ian to make the financial contribution said she would use the 2^nd floor of the villa as their matrimonial home, while the rest of her family could live in other floors.

(2) He had in June and July 2000 given Ms Cheung a total of HK$560,000.00 which was used to purchase the Shenzhen Property.  Again, Ms Cheung had said that they would use this as the matrimonial home, as the Shenzhen Villa was too far from the city.  He later paid another RMB110,000.00 for buying the furniture.

(3) He gave Ms Cheung theses sums pursuant to the Marriage Agreement or by reason of her representations to use them as matrimonial homes.

46.In further support of his case of the above payments, Mr Ian relies on various entries and withdrawals records shown on certain bank statements of his and the first page of a bankbook of Ms Cheung’s bank in Shenzhen. 

47.The entry records of first page of the bankbook of Ms Cheung’s bank account^[3] shows that:

(1) This bankbook was issued on 5 July 2000.

(2) HK$260,000.00 and HK$300,000.00 were respectively deposited into this account on 5 July and 24 July 2000.

(3) On 27 July 2000, these two sums were apparently taken out of the account, and on the same day, two sums of RMB328,500.00 and RMB284,600.00 were deposited into it.

(4) On 15 August 2000, a sum of RMB328,500.00 was taken out. 

48.At the same time:

(1) Other than the above entries, Ms Cheung’s own banking document of the same account discovered also shows that another sum of RMB245,420.00 was taken out of the account on 15 August 2000.

(2) A banking transfer document dated 15 August 2000 shows that a sum of RMB573,920.00 was paid from Ms Cheung’s above bank account to the bank account of a property developer.  It is common ground that this payment was made for the purchase of the Shenzhen Property.

49.Ms Cheung on the other hand denies that she had received any money from Mr Ian for the purchase of the Shenzhen Property and the construction of the Shenzhen Villa.  She says that she is not the registered owner of the Shenzhen Villa, and for the Shenzhen Property, she had paid for the purchase price all from her own money.  She says she in fact had substantial saving and money at that time which came from the profits she had earned from her bedding and retail business, as well as from the previous electronics business she and her ex-husband had carried on.  

50.When asked by the Court, she said at one time she had cash or savings in many millions of RMB.  She also said her bedding retail business had an average monthly turnover of RMB500,000.00 to RMB600,000.00.  When further asked how much she still has at present, she said she did not have much now, as over the years, all her money had been “cheated” by her business partners when she went into various business joint ventures with them.

51.Ms Cheung has not produced any documentary evidence to support her once wealthy financial position, the handsome incomes of her bedding and retail business, and the various joint business ventures she had entered into whereby her investments were cheated. 

F2.2  Discussion

52.I have no hesitation in rejecting Ms Cheung’s evidence as unreliable and unbelievable.   It is beyond me that if Ms Cheung’s evidence on her own personal wealth bears any truth, she however could not produce any documents to support it.  It is simply unbelievable that she could not even produce a single banking document or statement to show that, at least at the relevant time of the purchase of these properties, she had sufficient funds in her account to finance them.    It is also unbelievable that she could not produce any documentary records, such as profit and loss or accounting records, or tax records and business registration records to show the alleged handsome profits her businesses had once been making and the various business ventures that she had entered into.

53.On the other hand, on balance, I accept Mr Ian’s evidence that he had provided the funding to enable Ms Cheung’s purchase of the Shenzhen Property and the construction of the Shenzhen Villa:

(1) The above mentioned banking documents are consistent with Mr Ian’s case that he had given HK$300,000.00 and HK$260,000.00 to Ms Cheung to purchase the Shenzhen Property.   To me it is clear from those documents, that these sums which were deposited into Ms Cheung’s bank account were converted into the currency of RMB and then paid out on 15 August 2000 (RMB328,500.00 + RMB245,420.00) in the total sum of RMB537,920.00 to the developer of the Shenzhen Property for its purchase by Ms Cheung.^[4]

(2) Moreover, given that it is either Mr Ian or Ms Cheung who had provided the funds to purchase the Shenzhen Property and to contribute to the construction cost of the Shenzhen Villa, after clearly rejecting Ms Cheung’s evidence, on balance, I accept Mr Ian’s evidence that it was him who had provided these funds.

54.I further accept Mr Ian’s evidence that he had provided some RMB110,000.00 to purchase the furniture for the Shenzhen Property.  There is no dispute that furniture was purchased to furnish the house for them to live in there.  There is also no challenge on this cost of the furniture.  The only question is still who had paid for it.  For the same reasons set out above, on balance, I prefer Mr Ian’s evidence.

F2.3  Finding

55.Under this issue, I find that:

(1) Mr Ian had in about September 1999 paid a total of RMB215,000.00 to Ms Cheung at her request to enable her family to build the Shenzhen Villa Property.  

(2) He had in June and July 2000 given Ms Cheung a total of HK$560,000.00 which was used to purchase the Shenzhen Property.  He later paid another RMB110,000.00 for buying the furniture.

56.At the same time, it must be noted that there is no evidence adduced at the trial that Ms Cheung has in fact become a legal or beneficial or one of the owners of the Shenzhen Villa or the Shenzhen Villa Unit.  In the premises, if necessary, I would further find that there it has not been proved that Ms Cheung is an owner of the Shenzhen Villa Unit.  Thus, the claim for a declaration of trust of the beneficial interest over it for Mr Ian or an order for the transfer or assignment of it to Mr Ian as sought in any event could not succeed.  I have for the above reasons also found rejected Mr Ian’s evidence and case that Ms Cheung had made various representations for committed use of the properties as matrimonial homes.

F3.  If the two Shenzhen properties were paid for by Mr Ian, were they given to Ms Cheung pursuant to the Marriage Agreement, or as conditional gifts for the marriage, or as absolute gifts out of love

F3.1  Preliminary consideration

57.Under common law, the recovery of gifts given in anticipation of a marriage is premised on the imposition of an implied condition of the gifts that they should be returned when there is no marriage because of the fault of the recipient of the gifts.  This is said to achieve justice in the circumstances.  See: Jacobs v Davis [1917] 2 KB 532, 533-4 per Shearman J;Cohen v Sellar [1926] 1 KB 536, 546 per McCardie J. 

58.The common law requirement of the “innocence” of the donor of the gifts to enable recovery is modified by section 25 of LARCO (Cap 23), which provides as follows:

“(1) A party to an agreement to marry who makes a gift of property to the other party to the agreement on the condition (express or implied) that it shall be returned if the agreement is terminated shall not be prevented from recovering the property by reason only of his terminated the agreement.

(2) The gift of an engagement ring shall be presumed to be an absolute gift; this presumption may be rebutted by proving that the ring was given on the condition, express or implied, that it should be returned if the marriage did not take place for any reason.” (emphasis added)

59.Whether under the common law or LARCO, the recovery of gifts conditional for marriage therefore requires the finding that the gifts were given in anticipation of a committed marriage. 

60.Given my finding above that there were no representations on any committed marriage made as alleged and the Marriage Agreement, it follows naturally that it is my finding that, the two Shenzhen properties were paid for by Mr Ian not as a result of or pursuant to the Marriage Agreement or for marriage.  They are also therefore not conditional gifts for the anticipated marriage. 

61.However, I may still need to determine whether they were given as gifts to Ms Cheung out of love.

F3.2  The evidence

62.It is Mr Ian’s evidence that in light of the representations and the Marriage Agreement, he gave Ms Cheung funds to purchase the two Shenzhen properties for use as matrimonial homes. 

63.As mentioned above, Ms Cheung denies making these representations and the Marriage Agreement.  It is however her alternative case if that if these funds were given to her by Mr Ian for the two properties, they were absolute gifts out of love.

F3.3  Discussion

64.I accept Ms Cheung’s case that these funds were given to her as absolute gifts out of love:

(1) In my view, this is consistent with the objective facts that Mr Ian did not seek to recover these properties from her until 5 years after the breakdown of their relationship and separation.  If these funds were given to Ms Cheung pursuant to the Marriage Agreement or conditional for the marriage and not otherwise, it would only be natural that Mr Ian would soon after the breakdown of relationship (and that there was unlikely to be any marriage) seek to demand the return of these properties.  However, it was only until 4 years later, and 2 years after he was asked to vacate the Hong Kong Property, that he brought the present action in 2006.  It is also important to note that when he first brought the action, he was only seeking to recover the Hong Kong Property but not these two Shenzhen properties.  It was only in 2007 that he amended the Statement of Claim to include the claims for these two Shenzhen properties.

(2) When asked as to why he only sought to claim these properties long after the breakdown of the relationship, Mr Ian gave the vague explanations that he needed to find a job, and to sort out the legal aid arrangements.   I do not accept these explanations to justify the long delay in claiming for the return of these properties.  Even if he had to look for a job (which I doubt, as there is no evidence that he did so or that he is at present working) or to sort out the legal aid applications, it would not have required 4 to 5 years for him to commence the action.   There is also no explanation as to why he did not claim for the two Shenzhen properties when he first commenced this action.

(3) The delay is more consistent with the case that Mr Ian gave those funds to Ms Cheung as absolute gifts and only in later years that for one reason or another he wanted to renege on that and brought the present claim against Ms Cheung.

F3.4  Finding

65.I therefore find that Mr Ian gave the funds to Ms Cheung to construct the Shenzhen Villa and to purchase the Shenzhen Property as absolute gifts out of love.

F4.    Was the Hong Kong Property given to Ms Cheung as an absolute gift

66.I can deal with this issue quickly.

67.It is common ground that:

(1) Mr Ian paid for the Hong Kong Property.  

(2) He was the one who signed the provisional sale and purchase agreement as the purchaser.

(3) He later nominated Ms Cheung as the purchaser for the purpose of the assignment, and she was asked to attend the solicitors’ office in Hong Kong to execute the necessary documents.

(4) Mr Ian later brought the title deeds from Hong Kong and gave them to Ms Cheung.

68.He now says he did not give it as a gift to Ms Cheung.  He says he only “gave” the property to Ms Cheung pursuant to the Marriage Agreement and also as it was her request to have a property in Hong Kong because:

(1) She had to work in Shenzhen often.

(2) She had to raise three children.

(3) She needed a place to stay during her visits to Hong Kong.

(4) She could take care of Mr Ian’s mother. 

69.Ms Cheung on the other hand says she had not requested Mr Ian to buy her a property in Hong Kong.  It was only Mr Ian who suddenly told her that he was giving her a Hong Kong Property as a “gift of love” as he had recently made some handsome profits in the stock market in Hong Kong. 

70.I reject Mr Ian’s case and evidence.

71.First, I have already found that there was no Marriage Agreement and any representations for a committed marriage. 

72.Secondly, even if there was the Marriage Agreement:

(1) I am not satisfied that the Hong Kong Property was given to Ms Cheung pursuant to the Marriage Agreement, if any:

(a) After they broke up in November 2002 and before the commencement of the present proceedings in 2006, there is no evidence that Mr Ian had ever asked Ms Cheung to return the title deeds and the Hong Kong Property to him.

(b) When Ms Cheung through her solicitors issued the demand letter to Mr Ian in June 2004 to ask him to vacate the Hong Kong Property, there is no evidence to show that Mr Ian had promptly responded to the letter by asserting his alleged beneficial interest in the Hong Kong Property.   It was only until 2006 when he commenced the present proceedings that he did this.

(c) The above long period of inactivity on the part of Mr Ian to seek the return of the Hong Kong Property shows in my view when he gave the Hong Kong Property to Ms Cheung, it was intended as an absolute gift out of love.

(2) Moreover, I could not see how the alleged four reasons said to have been proffered by Ms Cheung would have caused or justified Mr Ian to cause the Hong Kong Property to be registered in Ms Cheung’s name.  The first two reasons said to be given by Ms Cheung simply do not show why it was necessary to purchase a property in Hong Kong.  But even if any of these reasons called for the need to acquire a residence in Hong Kong to enable Ms Cheung’s use, it needed not be registered in Ms Cheung’s name.   Mr Ian’s case that he was “persuaded” by Ms Cheung to buy the Hong Kong Property for her because of these reasons is inherently implausible.

73.To the contrary, the objective facts set out in paragraph 67 above and the fact that Mr Ian did not seek to claim for the recovery of the Hong Kong Property 4 years after the break-up of the relationship are more consistent with Ms Cheung’s evidence and case that the property was given to Ms Cheung as a gift out of love.

74.I therefore prefer and accept Ms Cheung’s evidence under this issue and find that the Hong Kong Property was given to her by Mr Ian as a gift out of love.

F5.    Had Mr Ian paid the Investment Sums and the Miscellaneous Expenses, and if so, were they given as gifts out of love or pursuant to the Marriage Agreement

F5.1  The evidence

75.Mr Ian gave evidence and said pursuant and in light of the Marriage Agreement, he had given Ms Cheung:

(1) HK$200,000.00 to help Ms Cheung to run a retail business in selling corrective underwear; and

(2) Another HK$200,000 to enable Ms Cheung to obtain a right to sell a corrective underwear of the Taiwanese brand (善美得). 

76.It is also Mr Ian’s evidence that in order to enable Ms Cheung to learn how to promote the sale of the Taiwanese brand underwear, he had invited the wife of his friend Mr David Fonda to come and stay in the Shenzhen Property for a few days. Ms Fonda’s wife was a supervisor of that Taiwanese brand company. 

77.Mr Ian also says he had paid all the university expenses for Ms Cheung’s children. He had also paid the household expenses since they had moved into the Shenzhen Property. He had not kept records of these payments, but in his own estimate and calculation, it should be not less than RMB42,000.00.

78.Mr Ian has also called Mr Fonda to give evidence at trial to support his case on the Investment Sums.  Mr Fonda confirmed^[5] that:

(1) He was told by Mr Ian in about 2001 that Ms Cheung was interested to run a corrective underwear retail business and that Mr Ian had in 2000 given her not less than HK$200,000.00 to become an authorized sale agent in the Mainland for selling corrective underwear of a Hong Kong brand known as “雅築”.

(2) His wife was a supervisor of the Taiwanese brand corrective underwear company.

(3) He accepted Mr Ian’s invitation and arranged his wife to go to Mr Ian’s home in Shenzhen to “teach” Ms Cheung the “tips” on sales technique and strategy for the Taiwanese brand underwear.

(4) His wife went to stay at the Shengzhen Property for a few days for that purpose.

(5) Since that time, Mr Ian had told him that, in order to facilitate Ms Cheung’s said business, Mr Ian had been visiting Taiwan from time to time to source the mercantile for Ms Cheung.

79.Ms Cheung denies that she was given the Investment Sums or that Mr Ian had been paying the Miscellaneous Expenses. 

80.In relation to the Investment Sums, it is her evidence that:

(1) In 2000, she was running an underwear retail business of the Hong Kong brand.  

(2) Mr Ian himself wanted to invest in the Taiwanese brand underwear business which Mr Fonda and his wife had obtained the right to sell in Shenzhen through direct/multi-level sale.    He therefore asked Mrs Fonda to bring their mercantile to the Shenzhen Property to ask for Ms Cheung’s assistance in selling them.

(3) She refused the request.   She had not invested in that business. 

81.Insofar as the Miscellaneous Expenses are concerned, it is also her evidence that it was in fact she who had been paying for her children’s expenses, the household expenses and also even sometimes Mr Ian’s own expenses. 

F5.2  Discussion

82.I find Mr Fonda a reliable witness and accept his evidence:

(1) He was straightforward in answering questions and was unshaken under cross-examination. 

(2) He does not have any apparent interest in the outcome of this case, and there is nothing to show that he would be prepared to say something which is factually untrue or incorrect just because he is a friend of Mr Ian.

83.I also accept Mr Ian’s evidence under this issue: 

(1) His evidence (in relation to the Investment Sums) is supported and consistent with Mr Fonda’s evidence, which I have for the above reasons accepted.

(2) He was unshaken under cross-examination on the material aspects of the evidence.

84.Mr Leung, Counsel for Ms Cheung, submits that Mr Ian’s evidence is unreliable as he was unclear on the particulars as to how he came up with the two HK$200,000.00 payments.  Mr Ian, Mr Leung further submits, also only gave a more detailed account of the source of these funds for the first time in his oral evidence.

85.I do not think the above criticisms materially affect the reliability of Mr Ian’s evidence on this issue.  The matters occurred some 9 years ago, and at a time when Mr Ian and Ms Cheung were in good and intimate relationship.  It is therefore not unreasonable for Mr Ian not to be able to initially recall in detail how the funds came about and to have made some mistakes.

86.On the other hand, I reject Ms Cheung’s evidence insofar as it conflicts with that of Mr Ian and Mr Fonda:

(1) I find it contrary to common and commercial sense that she would reject investing in the Taiwanese brand retail business, given that she was already running a corrective underwear business at that time.  It was not her case that she herself was asked to come up with the funds for doing the business.  The oblique reason that she gave was that, as she was then already running her own underwear business through counter-sale, she therefore rejected to take up Taiwanese brand which adopted a direct/multi-level sale model, is unconvincing to me.

(2) Further, given my above rejection of her evidence that she was financially independently wealthy at that time, she has not given any evidence to show the source of fund which supported her underwear business in selling the Hong Kong brand, if the same did not come from by Mr Ian. 

(3) She was also generally not forthcoming and evasive in giving evidence in Court under these issues as to how she was financially capable of supporting the children’s expenses and the household expenses. In particular, she was unable to give any convincing answers as to why, if she was as independently wealthy as she claimed and before moving into the Shenzhen Property, she had to live at the Shop herself while her children and her mother had to live separately at the homes of her sisters and relatives.

F5.3  Finding

87.For the above reasons, I find that Mr Ian had given Ms Cheung the Investment Sums and paid for the Miscellaneous Expenses.

88.However, I do not find that these sums were given to Ms Cheung or paid for by Mr Ian pursuant to the Marriage Agreement as I have concluded above that there was not Marriage Agreement or any representations of committed marriage.

89.In my judgment, and I further find that, these payments were made by Mr Ian out of love as:

(1) This is inherently consistent with the facts that they were at that time cohabitating and were very close and intimate, and that Mr Ian was generally a generous person who has been regarded a big spender. 

(2) The long delay in Mr Ian’s claim for the return of these sums is more consistent with the case that when they were given. It was intended as out of love gifts.

F6.  Was Mr Ian in breach of the Marriage Agreement if there was one

F6.1  The evidence

90.Ms Cheung gave evidence on Mr Ian’s physical abuse and unreasonable behaviour of unwarranted jealousy, bad temper towards her, her children and mother, as well as sexual demands.  These are set out in her witness statements as follows:

(1)       In her first witness statement:

“21. 原告人與本人家人同住後,當作自己是一家之主，變得經常發脾氣，為輕微的事情大發雷霆，用粗魯的語言對本人及本人的家人。他曾對我的子女說，我討厭你們，我只喜歡你媽咪。原告人的行為令到我和家人覺得不安和惶恐，增加了不少壓力。

22. 不僅如此，原告人在性方面總不滿足，不理會本人感到不適或者不方便都強行進行性行為,甚至打嚇本人。我們因此而吵架，原告人曾試過整夜不睡，坐在床邊陰森的笑著看著我。我問他為何不睡用這種恐怖眼神望我呢？原告人答，我很愛你，想把你整個人吞下去，24小時在我肚內,我便永遠擁有你。如此令我非常害怕。我挨到2002年11月，多次與原告人商討，但原告人沒有任何改變他以上的變態性格和行為，本人難以再忍受而與他分手,之後他離開我們同居的地方。”

(2)       In her supplemental witness statement:

“12.    本人在最新的修訂答辯書內提及了遭原告人毆打的事情。事實上，本人在第一份供詞第22段已提及,原告人有打嚇本人的行為。據本人的記憶，原告人首次動手打我的時間大約是2001年尾。原因如第一份供詞述，原告人搬入我深圳住所後，逼我停止回“莉莎”工作，要求和我行房的次數愈頻密，又當作自己是一家之主，對我的家人發脾氣。我和原告人之間出現言語爭吵，在爭吵激烈時，原告人動手打我。

13.    第一份供詞第22段曾提及，原告人於2002年11月離開我深圳住所。據本人記憶，約在2002年10月發生了一連串的事情，最終導致我和原告人關係決裂。10月的某天晚上，原告人和我發生爭吵,原告人再次動手打我，我為此哭泣，並驚動了本人的女兒。我女兒張珈瑋走進我房間，看發生了什麼事。我沒有告訴女兒被打的事，將女兒送回她房間睡覺。第二天早上，我僱用的點工人到我家打掃衞生。開始打掃後不久，鐘點工人告訴我在廚房門口發現了玻璃,並帶我到廚房看，我看見廚房入口的地氊上竪立擺放了一塊玻璃。我當時又生氣又害怕,第一個想法就是原告人放置了這塊玻璃在地氊上，因為我媽媽和兒女一定不會這樣做。我又想原告人這樣做的原因是想傷害我媽媽。因為我媽媽經常出入廚房，加上視力不好，最容易被玻璃刺傷。我認為家人身安全受到威脅，於是報公安處理。公安來到聽完我和原告人的陳述後，要求原告人遷出。原告人同意遷出，但要求多住1個月，以方便搬遷物品和找地方住。我說最多給予1星期的時間，但原告人再三要求，我同意了讓他多住1個月。

14.    其後，我在兒子房間睡，原告人睡主人房。原告人曾跪在地上叫我給他機會，和他復合。我向他說我不會再給他機會。因為我不相信原告人會改變他的行為，事實上，原告人在這一個月內，所做的行為還是令我無法忍受,例如要求我常陪著他和24小時不離開他的視線，要求我和他行房，要求我家人服從他的說話等。事實上，我不願意亦不能接受他的要求。

15.     至到2002年11月中，原告人終於遷出本人居所。原告人離開時，本人要求屋苑保安部停用了原告人進入屋苑的智能卡，但本人沒有更換住所的門鎖。直至2008年上半年，我家人和朋友說見到原告人在屋苑內出現，本人才更換了住所的鉄閘門鎖。”

91.Ms Cheung’s daughter, Cheung Ka Wai (張珈瑋), also gave evidence to support Ms Cheung’s case under this issue.  Her relevant evidence is set out at paragraph 8 of her witness statement as follows:

“8. 原告人搬入我們家後，慢慢變得霸道和愛發脾氣。他有時在深夜與媽媽吵架，經常就一些瑣屑事情責駡我們姐弟。最令本人難過的是，原告人經常與本人外婆吵架,有一次他擺放一大塊玻璃在廚房入口地下，幸好被我們發現拿走，因本人外婆眼睛有毛病，視力不好，進出廚房時難免會被這塊玻璃割傷。”

92.Both Ms Cheung and her daughter added during their oral evidence that Mr Ian was very mean and had been repeatedly complaining about trivial matters such as their consumption of instant noodles or even candies at home.  Ms Cheung further added that in mid 1999, after their return from a trip to Beijing, she already found that Mr Ian was mean, and she was not happy with him.  But she wanted to observe Mr Ian some more time.   

93.Mr Ian denies all these allegations of unreasonable behaviour.  To the contrary, he says that, in the later part of their relationship, Ms Cheung had been going and staying out overnight more and more frequently, and had been seen by others of being very intimate with another young man.   For this, he had been having quarrels with Ms Cheung from time to time.

F6.2  Discussion

94.The burden is on Ms Cheung to prove the alleged unreasonable behaviour.  I however do not accept her evidence as this is inconsistent with other parts of her own evidence or case:

(1) It is her daughter’s evidence that before they moved into the Shenzhen Property, Ms Cheung told the children that Mr Ian had been very good to her^[6].

(2) It is also her own evidence that during the cohabitating period, and when Mr Ian was living together with her children and mother (which must be the period after moving into the Shenzhen Property), her family members had been caring for Mr Ian^[7].   Ms Cheung has also produced photos taken at the garden of the Shenzhen Property and at trips which show that she and her children were happily together with Mr Ian.

(3) This is in stark contrast with her evidence that (a) she already found Mr Ian a mean person in mid 1999 after retuning from a trip to Beijing, and (b) soon after moving into the Shenzhen Property, Mr Ian had become so unreasonable and perverse in his conducts and demands. 

(4) There are no good explanations for these inconsistencies. 

(5) Further, in my view, these allegations of Mr Ian being very mean and unreasonable in his conducts are also flatly inconsistent with Ms Cheung’s own evidence (which I accept) that Mr Ian had given him the Hong Kong Property as a gift of love.   This is also inconsistent with her alternative case (which I also accept) that the funds for the Shenzhen Villa and Shenzhen Property, as well as the Investment Sums and the Miscellaneous Expenses were all given by Mr Ian as gifts out of love.

95.For similar reasons, I also reject Ms Cheung’s daughter’s evidence insofar as it supports Ms Cheung’s evidence.

96.Having rejected Ms Cheung’s evidence under this issue, the burden being on her to prove it, strictly speaking, it is not necessary for me to deal with Mr Ian’s evidence.  However, for completeness:

(1) For the same reasons in rejecting Ms Cheung’s evidence, I would accept Mr Ian’s evidence in his denial of any unreasonable or perverse acts on his part as alleged by Ms Cheung.

(2) I am not satisfied that it is proved on balance of probabilities that Ms Cheung had been meeting another man as alleged by Mr Ian, such evidence being almost entirely hearsay. 

F6.3  Finding

97.For the above reasons, I do not find that Mr Ian had committed those unreasonable behaviours as alleged by Ms Cheung.

98.In the circumstances, I would have found that Mr Ian was not in breach of the Marriage Agreement if there was one. 

99.In any event, even if I had found that Mr Ian was in breach of the Marriage Agreement (if there was one), and if I had also found that Mr Ian had given the properties and funds to Ms Cheung conditional upon the Marriage Agreement or the committed marriage, in light of section 25 of LARCO (cited above), this would not have prevented him from recovering those properties or funds.

F7.    Whether the above findings give rise to a case of misrepresentation, unilateral mistake, constructive trust, resulting trust, estoppel or unjust enrichment over the properties and the Investment Sums

100.Given my above findings that the properties, the Investment Sums and the Miscellaneous Expenses were given to Ms Cheung by Mr Ian as gifts out of love and care, there is no support for a case of constructive trust, resulting trust, estoppel or unjust enrichment.

101.Similarly, Mr Ian’s case on unilateral mistake or misrepresentation would not succeed:

(1) These are all bases to vitiate a prima facie legally binding agreement so as to seek redress and reliefs.

(2) As I have found there were no representations of a committed marriage or a binding Marriage Agreement, there is no question of legally operative misrepresentation or unilateral mistake. 

F8.    Had Mr Ian made the Loans

F8.1  The evidence

102.It is Mr Ian’s case and evidence that:

(1) In about March 2000, Ms Cheung at the Shop asked him to loan her RMB50,000.00 to help her younger sister Cheung Sau Hung to complete the acquisition of the title of the Shenzhen Villa.  He acceded to the request and pay her the sum^[8].  Ms Cheung has not repaid the sum.  I would refer this as the “Cheung Sau Hung Loan”.

(2) In about February or March 2000, at Ms Cheung’s request, he deposited RMB200,000.00 to the bank account of Ms Cheung’s sister, Cheung Sau Han^[9].   He supplemented in his oral evidence that he withdrew cash from his USD account in Hong Kong, carried the cash to Shenzhen and handed the same to Ms Cheung which was then deposited into Cheung Sau Han’s account.   I would refer this as the “Cheung Sau Han Loan”.

(3) Again in about February or March 2000, at Ms Cheung’s request, he gave her RMB50,000.00 to help her other sister, Cheung Sau Lan, to purchase a government subsidized housing unit.   He supplemented this under his evidence-in-chief that this RMB50,000.00 came from various cash withdrawals from his USD account and he handed the cash to Ms Cheung directly.   I would refer this as the “Cheung Sau Lan Loan”.

(4) In about June to July 2000, at Ms Cheung’s request, Mr Ian gave her RMB100,000.00 to pay off her debts which she had incurred before coming to know Mr Ian.  I would refer this as the “Ms Cheung Loan”.

103.Mr Ian also relies on the bankbook record of his USD account to support his case in relation to the Cheung Sau Han Loan and the Cheung Sau Lan Loan.

104.Ms Cheung denies that she had asked for or been given these loans.

F8.2  Discussion

105.I am not satisfied that Mr Ian has proved on the balance probabilities that he had made those loans:

(1) In relation to those loans that are said to be supported by the evidence of the USD account, Mr Ian identified various “withdrawal” entries in February and March 20002 as recorded on the bankbook.   These entries consist of sums taken out of the account in different amounts, for examples, such as USD22,000.00, USD10,000.00, USD40,000.00 and USD 3,000.00.

(2) However, there is nothing other than bare assertions by Mr Ian as to how he could identify these various sums and relate them to the two separate sums of RMB50,000.00 and RMB200,000.00 he said he had given to Ms Cheung.  In particular, when these 2 loans of RMB50,000.00 and RMB200,000.00 were on his evidence paid on each occasion at one go, it makes it even more difficult to understand how he could relate these “withdrawals” from the bank account to the loans, when the “withdrawals” were made over a period of time at different dates for different sums, without any one of them alone or together matching the loan amounts. 

(3) Given that there is no other documentary evidence to support the relationship between these “withdrawals” and the loans, I am not persuaded that Mr Ian could be able to simply remember all these which happened for more than 8-9 years ago.  The unreliability of these is further underlined by Mr Ian’s insistence that he had withdrawn all these sums in cash to enable the payment of the loans, when the bankbook shows that all these “withdrawals” were all made by transfers.  When this was pointed out to Mr Ian under cross-examination, he could not explain the inconsistency but simply insist on his own “memory” that they were cash withdrawals.

(4) Insofar as the Cheung Sau Hung Loan and Ms Cheung Loan are concerned, there is simply no documentary evidence to support them.    Given the passage of time, this is inherently unreliable.

(5) The unreliability and lack of credibility of the evidence of the existence of all the above loans are further highlighted by the following:

(a) there is no evidence set out in his witness statement that he had in fact demanded (and if so, how) for the repayment of these loans.  All Mr Ian has said at paragraph 19 of his first witness statement, after setting the various loans, is that “… 一直至今，被告人並沒有歸還上述的款項，共 RMB 400,000.00”.  The lack of any such demands is inconsistent with the existence of the loans.

(b) when Mr Ian first brought the present claim in 2006, he did not even include the claims for the repayment of these loans in his original Statement of Claim.   This is again consistent with the non-existence of the loans.

(6) For these reasons, I cannot safely accept Mr Ian’s above evidence on the existence of the four loans.

106.As a result, I do not accept Mr Ian’s evidence that there were the 4 loans, and prefer Ms Cheung’s evidence that they were not made.

F8.3  Finding

107.Mr Ian has failed to prove the existence of the Loans.

F.9    The Sapphire Ring

F9.1  The evidence

108.In his witness statements, Mr Ian says in March 2002, Ms Cheung took away the Sapphire Ring he kept at the Shenzhen Property without his consent and refused to return it despite his repeated demands.   The Sapphire Ring is worth about HK$100,000.00.

109.In his evidence in re-examination, he said in March 2002 he could not find the Sapphire Ring, and when he asked Ms Cheung, she told him that she had kept it and advised him not to put it on for safety reason.

110.Mr Fonda also gave evidence that he had seen Mr Ian having a sapphire ring, which was about 20 carets with some small diamonds together with a big white good ring. 

111.Ms Cheung denies having taken the Sapphire Ring.  However, in her supplemental witness statement^[10]:

(1) She confirms that Mr Ian has a sapphire ring, which he once gave it to her.  But as it did not fit her finger, Mr Ian took it back and said he would bring it to Taiwan for re-sizing.  However, Mr Ian never gave the right to her again.

(2) She also says, after carefully looking through the things kept at home, she has found a blue gem.  This gem is similar to the one Mr Ian gave to her brother-in-law[11] in October 2001 as a security for the repayment of a RMB5,000.00 loan Mr Ian had borrowed from her brother-in-law.  But they subsequently found out that this gem was not a genuine one and not worthy of much.  However, given that the loan was a small one, and to give face to Mr Ian, she and her brother-in-law did not pursue it any further.  According to the latest report from a Hong Kong gemmologist, the market value of this gem is no more than HK$500.00. 

112.Ms Cheung has at the trial produced the gem as her exhibit.  Mr Ian of course denies that this is the Sapphire Ring.

F9.2  Discussion

113.The burden is on Mr Ian to prove (a) the existence of the Sapphire Ring, (b) Ms Cheung has taken it and refused to return, and (c) if necessary, the value of the Sapphire Ring.

114.Accepting Mr Fonda’s evidence, I am satisfied that Mr Ian has owned a sapphire ring as described by Mr Fonda and supported by a drawing of it attached to Mr Ian’s answer dated 17 December 2009 to the Defendant’s interrogatories.

115.However, I am not satisfied that Mr Ian has proved that Ms Cheung has taken it:

(1) If Mr Ian had in fact discovered in March 2002 that the Sapphire Ring had been taken away by Ms Cheung, and that she had refused to return subsequently despite repeated demands as alleged, it is difficult to understand why, soon after their breaking up in November 2002[12], he had not brought a claim against her for its return or report it to the police.   It is even more difficult to understand why when he brought the present action in 2006, he had not included in the claim for the recovery of the Sapphire Ring.

(2) When he was asked under cross-examination why he did not claim for the recovery of the Sapphire Ring in his initial pleading, he explained that he gave priority to the claim for the property.  I find this explanation illogical.  I cannot understand why it was necessary to prioritise the claims when he had already brought an action against Ms Cheung.  Worse still, the fact is he did eventually include the claim by way of amendments for the Sapphire Ring in 2007. 

(3) I therefore do not accept this as a reasonable explanation. In my view, the failure to initially bring a claim for the Sapphire Ring in this claim and the lack of any evidence of his demands for its return after the break-up of the relationship show the incredibility and unreliability of his evidence that Ms Cheung has taken the Sapphire Ring without his consent and refused to return it on demand.

116.I therefore reject Mr Ian’s evidence that Ms Cheung has taken the Sapphire Ring and refused to return it. 

117.Furthermore, given that there is no photograph of the Sapphire Ring, no certificate of its quality, no valuation report, no receipt on its purchase price, and no evidence to explain the basis of Mr Ian’s own estimate of the value of the Sapphire Ring, I am also not satisfied that it is proved on balance of probabilities that its value is HK$100,000.00 as said by Mr Ian.

F9.3  Finding

118.I find that Mr Ian has once owned a sapphire ring of the description of Mr Fonda.  However, I also find that Mr Ian has failed to prove that (a) Ms Cheung has taken it and refused to return the same, and (b) the value of the Sapphire Ring is HK$100,000.00.

G.      Conclusion

119.For the above reasons, I dismiss all of Mr Ian's claims.

120.There is no reason why costs should not follow the event. I further make an order nisi that costs of the action, including any reserve costs, be to Ms Cheung, to be taxed if not agreed.  Mr Ian's own costs be taxed in accordance with legal aid regulations.   Unless any of the parties applies by Summons to vary the same, the costs order nisi shall be made absolute 14 days from today.

Mr. Andy HungHing-shek, instructed by Messrs Christine M. Koo & Ip, assigned by Director of Legal Aid, for the Plaintiff.

Mr. Herbert Y.F.Leung, instructed by Messrs Kelvin Cheung & Co., for  the Defendant.

Appeal by the plaintiff to Court of Appeal dismissed. Please refer to CACV210/2010 dated 6 May 2011