Hui Sum and Another v. Hui Ting Nung

HCA 289/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 289 OF 2010
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Before: Deputy High Court Judge Mayo in Court

Dates of Hearing: 7, 8 and 13 October 2014

Date of Judgment: 22 October 2014

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Introduction

1.The plaintiffs in this case are the parents of the children.

2.The first named plaintiff (the father) is the father of the children and the second named plaintiff (the mother) is the mother of the children.

3.The father died on 9 August 2014 and the mother who had previously been appointed as the fathers guardian pursuant to Order 15, rule 7 represented the father’s interests in this litigation.

4.The father suffered a serious stroke in 2007.  As a consequence of this his physical and mental condition was seriously impaired and his mental condition thereafter deteriorated.  He suffered from dementia.

5.In March 2011 the mother applied for an order that she be appointed as the guardian of the father and this application was successful.

6.After the father and mother came to Hong Kong from China they resided in a property which was registered in the father’s name in the Kowloon Walled City (KWC property).  The Government resumed this property in 1988 and compensation of $300,000 was paid to the father.

7.The four children of the family are as follows:

(1) Hui Wai Chi (the 1^st sister), a daughter who is now aged 59.  She was one of the witnesses who gave evidence for the plaintiffs.

(2) Hui Pui Chee (the 2^nd sister) who is now aged 58.

(3) Hui Ting Kau (the elder brother) who is now aged 55 who gave evidence on this Trial.

(4) The defendant who is now aged 48.

8.The three eldest children had moved out of the KWC property when it was vacated.  They had got married and moved to other accommodation.

9.The defendant continued to reside with his parents and indeed still lives with the mother.

10.Subsequent to the resumption of the KWC property the father purchased a flat on the 2^nd floor of 350 Ma Tau Wai Road, Kowloon the property which is the subject of the present proceedings (the property). 

11.The property was bought from a relative for $500,000.

12.The bulk of the purchase price consisted of the $300,000 compensation earlier referred to and there was some controversy as to how the balance of the purchase price was made up.  On the evidence of the mother the balance was made up from the savings of the father and her savings from her earnings as a hawker.  According to the defendant, he contributed $20,000 towards the purchase.

13.Be that as it may a decision was made to purchase the property in the name of the defendant.

14.The main issue in this case is whether the defendant held the property as a trustee for other members of the family or whether the property was in fact a gift to him.  The defendant also calls in aid a presumption of advancement that the father had gifted the property to him.

The evidence for the plaintiffs

15.Four witnesses gave evidence for the plaintiffs:

(1) the mother;

(2) the father’s brother Hui Yuk Ping;

(3) the elder son; and

(4) the 1^st sister.

16.The mother who is in her eighties is almost completely illiterate. Until about 1993 she had worked as a hawker and her earnings from this had been applied towards the family’s expenses.  Her income was irregular and unpredictable.

17.Originally it had been hers and the father’s intention to register the property in their joint names.  They had not proceeded with this intention partly as a result of their advanced years and her being illiterate and partly as a result of the father and herself having joined in the application which had been made by the 1^st sister and her husband for a flat under the Home Ownership Scheme.  It was never clearly established the extent to which this involvement would constitute some impediment in their being joint owners of the property.

18.In any event she was adamant that it was the intention of both herself and the father that they were the owners of the property and that no gift of the property had been made to the defendant.

19.While she accepted that the defendant had made financial contributions towards family expenditure she gave evidence that it had been the father who had paid for the maintenance and repairs of the property.

20.There was also the question of the title deeds of the property. These had been kept in a safe deposit box which had been opened by herself and the father with the Bank of China at its San Shan Road Branch and when this was closed at their Ma Tau Wai Branch office.  Following the father’s stroke she had taken the deeds out of the safe deposit box and given them to the elder son who in turn had placed them in a deposit box at the Tseung Kwan O branch of the Bank of China.

21.In 2005 the defendant had married a lady who was a resident in China. Initially she had been unable to come to Hong Kong as she could not obtain a one way permit from the Mainland authorities.  She did however subsequently obtain such a permit and took up residence in Hong Kong.  This was in 2012.

22.The relationship between herself and the defendant had soured after his marriage.

23.He had continued to live in the property with his parents.  He, though on numerous occasions, suggested that the property should be sold and that the proceeds of sale should be given to his wife to enable her to fund a proposed business venture namely acquiring a beauty parlour.

24.This had greatly alarmed her and the father because if the property was sold and the proceeds of sale were not applied towards acquiring an alternative property she and the father would have nowhere to live in the final years of their lives.

25.It was on account of this that numerous requests were made to the defendant to add the names of his siblings or alternatively the names of the parents to the title deeds of the property.  The defendant had refused to accede to these requests.

26.The mother produced the medical reports which had been used in support of the application she had made for appointment as a guardian of the father, and it was manifest from these that the father was suffering from dementia and unable to comprehend to any significant extent what was going on around him.

27.The mother was cross examined at some length by Ms Lam who was representing the defendant.

28.Ms Lam put it to the mother that she and the father had given the elder son $600,000 for the purpose of decorating his flat.  She denied this and asked where would her husband have been able to obtain such a large sum of money.

29.Ms Lam then referred the mother to a time deposit which was part of the agreed bundle for over $1.18 million in the joint names of herself and the father.  She admitted that they had had this money and that on 18 July 2009 had transferred the money to a time deposit in the joint names of herself and the elder son.

30.On being pressed upon what the moneys were intended for she said that it was intended that the moneys be used for hers and her husband’s funeral expenses.

31.It was definitely my impression that the mother was less than forthcoming on financial matters and that she was reluctant to provide a complete picture of the finances of the family.

32.The cross examination was then directed towards a tape recording which recorded a telephone conversation between her and the elder son.

33.The provenance of this tape was by no means made clear.

34.It appeared from the subject matter that the conversation had taken place shortly after the defendant had declined to add the names of the other siblings to the title deeds of the property.  The mother was represented on the tape as stating that the father had expressed the opinion that the family should not fight with the defendant as the flat had been given to him.

35.I attach little weight to this tape recording as the conversation in question was between the mother and the elder son, and in all the circumstances there was no assurance that anything which was said took matters any further.

36.There was on the tape what appeared to be an emotional outburst from the mother who said to the elder brother that if the flat was sold by the defendant and the proceeds of sale had been given to the defendant’s wife, she, the mother, might find herself sleeping on the street.

37.The mother agreed that when the defendant’s wife had obtained her one way entry permit to Hong Kong she had come to live in the property. 

38.Unfortunately there had been a number of verbal confrontations with the wife and the relationship deteriorated significantly.

39.It appears that it was at this time that efforts were made to attempt to get the defendant to add the names of the other siblings to the title deeds.

40.More particularly at this time two different solicitors’ letters were sent to the defendant on the instruction of the elder brother demanding that he add the names of the other siblings to the deeds.

41.One aspect of the mother’s evidence which was slightly puzzling was that when the mother was shown the letters she was asked if the object of the exercise had merely been to make provision for the other siblings or whether the primary purpose was to provide for her security.  She was adamant even after being acquainted with the contents of the letters that her sole concern was her own security.

42.The next witness Hui Yuk Ping can be dealt with very briefly. 

43.He is the younger brother of the father.

44.He said that he and the father were very close and that he was aware that the father had purchased the property after the KWC property had been resumed.

45.Mr Hui said that it was his impression that the property belonged to the father and mother.  He had not heard that it had been gifted to the defendant.

46.He accepted, however, in cross examination that it could well have been the case that the property had been given to the defendant and that the father had not informed him of this.

47.This being the case Mr Hui’s evidence does not take matters any further.

48.The elder brother then gave evidence.  His evidence concerning the siblings’ moving out and getting married was similar to the mother’s.  He accepted that he had received as a gift $100,000 from the father but denied that he had received from him $600,000 to enable him to discharge the mortgage secured on his flat.

49.When asked how he had managed to pay off the mortgage he said that he had done so out of his earnings as supplemented by the part time earnings of his wife.  His salary as a technician with MTR had been approximately $20,000 per month.  He said that mortgage payments were $15,000 per month.

50.During the trial the elder brother produced bank pass sheets in support of his denial that the father had given to him funds, to discharge his mortgage.  In fact it appeared from the entries recorded that a sum of $398,000 was paid into his account at the relevant time which would indicate in the absence of evidence to the contrary that the father had indeed provided a substantial sum to assist the elder brother.

51.He accepted that he had held jointly with the mother the time deposit for $1.18 million.  He said that of that sum approximately $720,000 remained.  He agreed that the money belonged to the mother and that the depletion of the moneys had been attributable to the payment of legal fees in connection with the instant litigation.

52.The elder brother confirmed that he had given instructions to the two different firms of solicitors addressed to the defendant requiring him to agree to adding the names of the siblings to the title deeds.  The defendant had not complied with the requests.  He did not give any reason why the requests for the names of the siblings to be added rather than the names of his parents.  He said that he had not given any consideration in depth on this.

53.Overall his evidence did not take matters much further as the elder brother did not claim to have any direct knowledge as to what had transpired in 1989 at the time when the property was acquired.

54.The final witness to give evidence for the plaintiffs was the 1^st sister. She gave evidence concerning her and her husband’s application for a Home Ownership Scheme flat.  She said that the father and mother had joined in the application as she thought that this was the reason why the property had been bought in the defendant’s name.

55.She went on to express the opinion that her parents had not breached the conditions relating to Home Ownership Scheme flat simply on account of not residing themselves in the flat.

Evidence for the defendant

56.No one other than the defendant gave viva voce evidence.

57.He said that his family comprised of his parents, two elder sisters, an older brother and himself.

58.They lived at the KWC property.  In 1988 the Hong Kong Government resumed the property and the father received compensation of $300,000.

59.His siblings had all got married and had moved away to be with their families.  He however remained with his parents. 

60.As they were advancing in years he assisted in looking after them.

61.The defendant said that he left school when aged 16.  However he trained to become a technician.  During his training he received a small salary but on attaining requisite qualifications his remuneration was substantially increased.

62.He made financial contributions to his father who assumed the role as head of the family.  He paid what he could afford.

63.After qualification he paid his father $2,000 per month.  In 1998 this had increased to $4,000 per month.

64.When the KWC property was resumed he and his father made a decision to purchase a property nearby and to apply the compensation which had been paid for this purpose. 

65.They found a suitable flat namely the property which belonged to a cousin Hui Fuk Sang which was for sale.

66.The purchase price was agreed at $500,000.

67.A week or two before the completion of the purchase of the flat the father and he had a discussion in the KWC property.

68.He said that as his siblings had all moved away and had obtained alternative accommodation the father had decided to make a gift of the property to him so that he would always have somewhere to live.  This was on the basis that he would continue to live with his parents in the property and take care of them.

69.No other member of the family was present during this conversation.

70.His father asked him to contribute $20,000 to $30,000 towards the purchase price.  He was able to provide $20,000 from savings he had been able to make.

71.His father told him that he would be able to make up the balance of the purchase price.  He did not refer to any contribution being made from his mother’s savings.

72.He and his father attended at the solicitors office for the completion of the purchase.  His mother, siblings and the vendor were not present and he denied that anyone had stated at the meeting that he was holding the property as a trustee as referred to in the statement of claim.

73.From that time onward his father had never said that the property was not a gift to him or asked him to transfer it back to him.

74.He said that after he received the letter dated 7 August 2009 from the elder brother’s solicitor requiring him to add the names of his siblings to the title deeds he had discussed the matter with his father.

75.His father advised him not to do so as the property had been gifted to him.

76.He also said that he had contributed $100,000 towards the purchase of the elder brother’s Home Ownership Scheme flat and paid him $600,000 to enable him to redeem the mortgage on his flat.

77.On the basis of his father’s advice he had declined the requests which had been made by the solicitors.

78.The defendant agreed that three building orders had been issued in relation to the property.  He also agreed that as his finances were tight at that time his father had assisted him in providing funds to enable him to comply with the orders.

79.The next area of evidence canvassed was his matrimonial situation.

80.In 2005 he had married a woman who lived in Mainland China.  She gave birth to his daughter in 2006.

81.It had not been possible for her to obtain residence in Hong Kong and she was only able to acquire a one way permit in 2011. While the wife and daughter were living in China the defendant visited them over the weekends.

82.When they did get the permit the wife and daughter came to Hong Kong and took up residence with him and his parents at the property.

83.When Mr Ko, for the plaintiffs, put it to him that the relationship between his wife and his parents was acrimonious and unhappy he did not agree.

84.He said that the wife had assisted him in looking after his parents and had been kind to them.  He accepted that there had been trivial disputes and disagreements over minor matters but this was inevitable when considering the different backgrounds they had had respectively.

85.One matter upon which he was emphatic was that at no time had he ever said that he was contemplating the sale of the property.

86.Far less than it had been in his mind that if the property was to have been sold that the proceeds of sale would be applied towards investing in a beauty parlour for his wife.

87.Even if there were concerns in this connection they no longer had any basis.  This was because the defendant’s marriage had been dissolved in May 2014 by the mutual agreement of the parties.  The defendant had not been ordered to pay maintenance for his ex‑wife or daughter.  They continued to reside in Hong Kong.

88.The defendant was subjected to a lengthy cross examination by Mr Ko.  His evidence was never seriously shaken.

89.One of the lines of approach adopted by Mr Ko was to invite the defendant to comment upon the fact that he had not objected to his parents having the custody of the title deeds of the property when it was his case that the beneficial ownership of the property was vested in him.  His answer to this was that until much later in the relationship there was no reason not to trust his parents and siblings.  He had lived harmoniously with his parents who he looked after.

90.In all the circumstances this appeared to be a convincing explanation.

91.Overall I obtained a favourable impression of this witness.  He appeared to be a truthful and reliable witness.

Analysis of evidence and finding of facts

92.I regret that I was not very impressed by the mother as a witness.

93.It appeared to me that her main concern was to say what she thought was in her best interests rather than what was the truth.

94.I do not believe that there was any serious discussion with the defendant concerning the sale of the property and the application of the proceeds of sale towards investing in a beauty parlour for the defendant’s wife.

95.I do not believe that the mother attended the completion of the purchase with her other children and then together with the father informed the assembled company that the defendant was holding the property as trustee for the parents and the other siblings.

96.As I have stated earlier I found the defendant to have been a truthful and reliable witness and where there are disparities between his evidence and the evidence of the mother I much prefer his evidence.

97.Clearly the crux of this matter relates to what happened when the property was purchased.  The issue simply being was a gift of the property made to the defendant.

98.When consideration is also given to all the surrounding circumstances, it would appear to be overwhelmingly likely that the explanation for the title to the property being vested in the defendant was that a gift was being made to him.

99.What has to be borne in mind is that all of the other siblings had their own accommodation with their respective families.

100.The defendant did not.  It is a notorious fact that real estate prices in Hong Kong are extremely high and for anyone in the defendant’s financial position it would be difficult for him to purchase a flat.

101.Over and above this the defendant was at the relevant time living with his elderly parents and taking care of them.

102.Even the mother in her evidence accepted that at that time the defendant was a good son.

103.Having considered all of these matters I make a finding of fact that the property was gifted to the son in the manner he described in his evidence.

104.One of the matters raised by Mr Ko in his final submissions was that the mother claimed to have a beneficial interest in the property and she had given evidence that she had not at any time made a gift of her interest to the defendant.  

105.As indicated earlier in this judgment there was a paucity of evidence concerning the earnings of the mother as a hawker.

106.It was definitely my impression that the moneys she had earned had been applied towards the upkeep of the family and this being the case the amount of the savings she could have made would have been very limited.

107.In the overall context of the amount which was required for the purchase I do not think it would be realistic to attempt to allocate to her any significant share or percentage interest in the beneficial ownership of the property.

The law

108.During the course of the trial various references were made by counsel to the presumption of advancement.

109.There can be no doubt that in the present case where the alleged gift is made by a father to his son the presumption of a gift would arise if there was either no evidence concerning this or that whatever evidence had been adduced was equivocal.

110.In the present case I have made clear findings of fact in favour of the defendant and that being the case there is no need for the defendant to have to place reliance upon the presumption.

111.The law on this was helpfully expounded by Rogers VP on page 3 of Cheung Cho Kam v Cheung Chor Chun Stella and Cheung Yuet Ying Rose, unreported, CACV 178/2008.

“7. On this appeal Mr Yip has manfully tried to argue that the judge should have applied the presumption of advancement. He says that the judge should have started with that. But the fact of the matter is that the presumption of advancement is only a presumption which is applied when there are no facts upon which the court can operate which would determine one way or the other where the particular property was intended to be owned. Once the judge has made findings of fact, as has the judge in this case, there is no scope, in my view, for the presumption of advancement. ”

Conclusion

112.The result of this is that the plaintiffs’ application is dismissed.

113.I make an order nisi that the defendant is to have his costs.

114.Finally I would like to express the hope that the defendant will continue to allow the mother to reside at the property and that the title deeds of the property be given to him.

Mr Tony Ko, instructed by Kent Tam & Co, for the plaintiffs

Ms Priscilia TY Lam, instructed by Carol Lam & Co, for the defendant