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由此
A A
HCA1780/2009
B B
IN THE HIGH COURT OF THE
C HONG KONG SPECIAL ADMINISTRATIVE REGION C
COURT OF FIRST INSTANCE
D ACTION NO. 1780 OF 2009 D
---------------------
E E
BETWEEN
F PETER MAN HO LAYE Plaintiff F
G and G
H TAM MA LAI 1st Defendant H
I
TAM MA LAI 2nd Defendant I
THE ADMINISTRATRIX OF THE ESTATE
OF LAYE HONG KIN(黎康健), DECEASED
J J
----------------------
K K
L
Before : Deputy High Court Judge Au-Yeung in Court L
Dates of Hearing : 20–22, 24, 27 and 29 September 2010
M Date of Judgment : 22 November 2010 M
N ------------------------- N
JUDGMENT
O
------------------------- O
P
1. This judgment is divided into the following sections : P
Section Para.
Q Q
Introduction 2
R R
Undisputed facts 3
S Plaintiff‟s case 13 S
Defendants‟ case 15
T T
Core issues 18
U U
V V
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A A
I. Common intention of the parties over
B B
ownership of the Premises
C II. Adverse possession C
Some general observations 19
D D
I. Common intention of the parties over ownership 30
of the Premises
E E
A. The decision to purchase the Premises 33
F F
A1. The plaintiff‟s version 34
G A2. The defendants‟ version 46 G
A3. Inferences to be drawn from the family 49
H letters H
B. Implementation of the decision to purchase 55
I I
C. Financial ability of Peter and the Deceased 60
J J
C1. Financial ability of Peter to shoulder the 61
down payment
K K
C2. Financial ability of Peter to shoulder the
mortgage instalments 68
L L
C3. Financial ability of the Deceased to 73
M shoulder the down payment M
C4. Financial Ability of the Deceased to
N shoulder the mortgage instalments 75 N
C4(1) When the 5th Uncle retired 78
O O
C4(2) When the Deceased retired 80
P 82 P
C4(3) Another source of income of the
Deceased
Q Q
D. Who Paid the Down payment? 86
R R
E. Who Paid the Mortgage Instalments? 87
S E1. Peter‟s case 90 S
E2. Defence case 99
T T
U U
V V
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A A
E3. The accelerated payment 108
B B
E4. Discharging the burden of proof 112
C C
F. Possession of title deeds since redemption of the 115
mortgage
D D
G. General credibility of Peter and Madam Tam 121
E H. Findings on Common Intention of the Parties over 131 E
Ownership of the Premises
F F
II. Adverse Possession 140
G I. 1994: Madam Tam‟s entry into occupation of the 141 G
Premises
H J. 1999: Deceased‟s proposal of marriage to 154 H
Madam Tam and his representation that he was the
I owner I
K. 2000: Delivery of title deeds by the Deceased to 159
J Madam Tam J
L. Deceased‟s demand for transfer of ownership from 164
K Peter K
L M. Other matters 173 L
N. Findings on adverse possession 175
M M
O. Mesne profits 182
N Conclusion 183 N
O O
Introduction
P P
2. The plaintiff (“Peter”) is the registered owner of the suit
Q Q
premises (“the Premises”). Mr. Laye Hong Hong was his 5th Uncle (“the
R 5th Uncle”). Mr Laye Hong Kin (“the Deceased”) was his 6th Uncle. R
st
The 1 defendant (“Madam Tam”) is the widow of the Deceased and is
S S
occupying the Premises. The centre of dispute is whether Peter or the
T Deceased was the real owner of the Premises. Each side claims to have T
U U
V V
由此
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A A
provided the full purchase price. Peter also claims that he granted a
B B
licence to the 2 Uncles to reside at the Premises for life, which licence was
C revoked upon their deaths. On the other hand, Madam Tam claims that C
Peter has been holding the Premises on resulting trust for the Deceased.
D D
Alternatively, she claims that the Deceased or she had been in adverse
E possession for over 14 years as at the date of commencement of this action E
and has thereby extinguished the interest of Peter.
F F
G Undisputed Facts G
H 3. The following are undisputed facts or facts supported by H
indisputable documentary evidence which I find to be true and correct :
I I
J 4. Peter‟s father (“the Father”) emigrated to the USA in J
about 1967. Peter‟s mother, Peter and his brother (“Tommy”) were left to
K K
live with the 2 Uncles and a servant at the Premises which were then
L rented. The 2 Uncles took care of Peter‟s family. L
M M
5. In 1971, Peter and Tommy moved to the USA and have
N resided there ever since. The 2 Uncles continued to live in the Premises N
with Peter‟s mother who was ill and the servant.
O O
P 6. In July 1986, Peter and his Father visited the Uncles. On P
30 July 1986, Peter executed a Power of Attorney (“the 1986 Power of
Q Q
Attorney”) appointing the 5th Uncle (not the Deceased) as the attorney for
R the purpose of purchasing the Premises and taking out a mortgage. R
S S
7. On 2 February 1987, Peter became the registered owner of the
T Premises. The down payment for the purchase was $100,000. A T
U U
V V
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A A
mortgage was taken out in the name of Peter with the Wing On Bank
B B
Limited (“the Bank”) for the balance of the purchase price in the sum of
C $200,000. C
D D
8. The mortgage was redeemed by an accelerated payment of
E about $87,934.67 („the accelerated payment”) on 12 February 1993. By a E
power of attorney in 1993 (“the 1993 Power of Attorney”) given by Peter,
F F
the title deeds were retrieved from the Bank.
G G
9. On 18 February 2000, the Deceased married Madam Tam.
H H
I 10. Both Uncles had lived in the Premises until the end of their I
lives, on 18 July 2000 and 1 April 2007 respectively. Peter, Tommy and
J J
the 2 Uncles remained close throughout their lives.
K K
11. On 5 June 2007, Peter wrote to Madam Tam stating that he
L L
and Tommy would send 2 more months‟ maintenance to her. He gave
M notice to recover possession by 31 August 2007. Madam Tam replied by M
letters dated 30 July, 10 August and 11 August 2007, refusing to move out.
N N
O 12. Peter commenced proceedings on 5 August 2008 (originally O
by originating summons which was later converted to a writ action) for
P P
possession of the Premises and mesne profits.
Q Q
The Plaintiff’s Case
R R
13. Peter claims that his Father initiated the idea of purchasing the
S S
Premises to accommodate the Uncles in view of their retirement and age.
T He was designated by his Father as the owner. He appointed the 5th Uncle T
U U
V V
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A A
as attorney to implement the purchase. He paid the down payment with a
B B
gift of US$5,000 from his Father and his own savings of US$10,000 from
C past earnings and student loans. He borrowed a loan of US$7,500 from C
Tommy which covered the first 2 years‟ mortgage instalments. He
D D
continued to pay the mortgage by sending monthly sums to the Uncles.
E He made the accelerated payment with his own savings of US$2,000 and E
another loan of US$10,000 from Tommy. All loans from Tommy had
F F
been fully repaid. In addition, both he and Tommy had been sending
G monthly maintenance to the 2 Uncles until the end of their lives. G
H H
14. Since purchase of the Premises, the 2 Uncles had been in
I occupation as licencees of Peter. Madam Tam had an implied licence I
from Peter through the Deceased to stay in the Premises.
J J
K The Defendants’ Case K
L 15. Madam Tam sues in her capacity as administratrix of the L
Deceased and her personal capacity. She asserts that it was the Deceased
M M
who provided the down payment and alone discharged the mortgage. By
N reason of his advanced age and to circumvent difficulties in taking out a N
mortgage, he purchased the premises in Peter‟s name. The Deceased also
O O
asked the 5th Uncle to be his attorney to handle the documentation. All
P along the Deceased or, after his death, Madam Tam had been in possession P
of the title deeds. The Deceased was the real beneficial owner.
Q Q
R 16. Alternatively, Madam Tam asserts that from 2 February 1987 R
to the time of his death, the Deceased had been in adverse possession.
S S
T T
U U
V V
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A A
17. Further, Madam Tam claims that she started to occupy the
B B
Premises from December 1994 as a licencee of the Deceased and has been
C in adverse possession for 14 years. C
D D
THE CORE ISSUES
E E
18. The core issues are :
F F
(I) The common intention over ownership of the Premises — was
G it intended that Peter or the Deceased should be the real G
owner?
H H
(II) Adverse possession : had the Deceased or Madam Tam been
I in possession of the Premises for such period as to extinguish I
Peter‟s interest?
J J
K SOME GENERAL OBSERVATIONS K
L 19. On Peter‟s side, there are 3 witnesses — his half-brother L
Robert (PW1), Tommy (PW2) and Peter himself (PW3). On
M M
Madam Tam‟s side, there are herself (PW1), her neighbour Madam Ng
N (DW2), her friend Mr Wong (DW3), her son from the previous marriage N
Mr Chow (DW4) and her grand-daughter Ms Chow (DW5).
O O
P 20. Neither party has a perfect case as many documents of the P
USA banks and Hong Kong banks were only available for the 7 years
Q Q
before the date of request. Witnesses have to try and recall incidents that
R happened as far back as 25 years. It is not surprising that they have to R
“reconstruct” events out of the limited documents available.
S S
T T
U U
V V
由此
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A A
21. On Peter‟s side, bank documents for the most crucial period
B B
covering 1983 to 1993 were completely missing. He and Tommy also
C lack bank documents to prove their monthly maintenance to the Uncles C
until about 2001/2002.
D D
E 22. However, the burden of proof rests entirely on Madam Tam to E
establish both core issues. She has an unenviable task. Even on her best
F F
case, she came on stage only after the mortgage had been redeemed. She
G inevitably has to piece together the very limited documentary evidence and G
hearsay information from the Deceased to construct her case.
H H
I 23. Madam Tam‟s reliance on hearsay information from the I
Deceased must be viewed with caution. She could have been confused or
J J
her recollection could be incorrect. Her confusion as to the 1986 and
K 1993 Powers of Attorney said to be based on what the Deceased told her is K
an example.
L L
M 24. A category of evidence which featured heavily in the case was M
a pile of 145 letters from the Father, Peter and Tommy to the Uncles (“the
N N
family letters”) produced by Madam Tam. The way she disclosed them
O gave rise to criticism of concealment of material evidence. She first O
produced some letters in her affirmation to oppose the originating
P P
summons. Next, as she admitted in Court, she produced another set of
Q family letters during an inspection exercise carried out on 12 January 2010. Q
Amongst them were 7 family letters now referred to in Tommy‟s witness
R R
statement. A week before the trial started, she produced yet another 127
S pages of family letters which the defence claims to be irrelevant but was S
disclosed to save argument. Over half of those 127 pages were letters to
T T
U U
V V
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A A
Peter‟s mother and were irrelevant but those to the Uncles were relevant.
B B
Letters produced in the 2nd and 3rd round (addressed to the Uncles)
C certainly meet the Peruvian Guano test on discovery. They reveal the C
persistent concern of the Father, Peter and Tommy over the finance of the
D D
Uncles, the readiness to provide financial assistance, the remittance of
E money by the Father and the state of employment of the Uncles. Some E
letters were relied on by both counsel in cross-examination.
F F
G 25. It is hard to believe that Madam Tam just happened to find G
those 127 pages of family letters when taking photos of the oil paintings
H H
exhibited. It is also unbelievable that the letters disclosed in the 1st round
I and the 7 letters in the 2nd round happened to be put together out of context I
with the other 127 pages. This is particularly so when on her evidence,
J J
the Deceased had, during his lifetime, handed her some family letters and
K explained to her that the Premises were purchased by him. I doubt if the K
Deceased had classified the letters as Madam Tam did.
L L
M 26. Save for a few of them, Mr Chong had objected to the M
admissibility of the family letters. He bases his objection on the principle
N N
that the acts and declarations of the parties before or at the time of the
O purchase, or so immediately after it as constituting a part of the transaction O
are admissible in evidence either for or against the party who did the act or
P P
made the declaration. But subsequent declarations are admissible as
Q evidence only against the party who made them, and not in his favour : Q
R
Shepherd v Cartwright [1955] AC 431; applied by the Hong Kong Court
R
of Appeal in Siu Chun-wah, Alice and anor v. Malahon Credit Co. Ltd.
S S
[1988] 1 HKLR 196; Watson v. Smith [1998] 3 HKC 461; Overseas Trust
T
Bank Ltd. V. Lee See Ching Hohn [1999] 3 HKC 197. T
U U
V V
由此
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A A
27. The family letters formed an incomplete record of the
B B
communication between family members. They flowed only from Peter‟s
C side. They did not answer the core issues. They did not even show that C
the Uncles had asked for financial assistance (except in one letter produced
D D
by Peter). I do not read them as if they were written by lawyers. One
E can see from the language used that they were written by people whose E
Chinese standard was, without disrespect, just sufficient to express ideas
F F
from the heart. I have admitted all the family letters into the evidence.
G Ultimately, it is a question of what inference to draw and what weight to G
attach to them. By far, they are most useful not in revealing any
H H
declarations in favour of or against anyone but as revealing a close
I relationship between the Father, the Uncles, Peter and Tommy. They are I
useful to assess the credibility of each party‟s case. There will be more
J J
analyses of specific letters later on.
K K
28. There should be another side of the story – letters written by
L L
the Uncles to Peter, Tommy and the Father. Given that Peter and Tommy
M had moved from place to place, after so many years, it is not surprising that M
N
they had lost those letters except one dated 22.11.1999 („the 1999 Letter”).
N
O 29. When interpreting the family letters, more weight will be O
placed on Peter and Tommy‟s versions as they were makers of many of
P P
those letters. As they also maintained close contact with their Father and
Q had exchanged information about their Uncles, they were in a better Q
R
position to explain the Father‟s meaning. On the other hand, the
R
inferences she Madam Tam drew from the family letters is not entirely
S S
reliable. For example, she claims that Peter was unfilial because he did
T
not return to Hong Kong to pay respect upon the death of his mother. T
U U
V V
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A A
That has no basis as the failure to return was due to immigration problems
B B
in the USA, which evidence I accept.
C C
I. COMMON INTENTION OVER OWNERSHIP OF THE
D PREMISES D
E 30. It is well settled that the beneficial ownership of the property E
depends on the agreement of the parties ascertained at the time of
F F
acquisition : Pettitt v Pettitt [1970] AC 777, applied in Siu Chun-wah,
G Alice and anor v Malahon Credit Co. Ltd [1988] 1 HKLR 196. G
H H
31. Common intention could be established by reference through
I conduct other than payment of purchase price or mortgage instalments on a I
property. The conduct relied on must be examined against the
J J
background as to the dealings between the parties and from the
K circumstances of the case. Ip Ma Shan Henry v Ching Hing Construction K
Co. Ltd (No. 2) [2003] 1 HKC 256.
L L
M 32. A holistic approach is to be adopted in search of the parties‟ M
common intention and in the quantification of the beneficial interest by
N N
undertaking a survey of the whole course of dealing between the parties
O and taking account of all conduct which throws light on the question what O
shares were intended with respect to the property in the light of their whole
P P
course of conduct in relation to it : Chan Chui Mee v Mak Chi Choi
Q [2009] 1 HKLRD 343. Q
R R
A THE DECISION TO PURCHASE THE PREMISES
S S
33. A family letter dated as early as 23.3.1985 from Peter to the
T Uncles shows that an idea to purchase a property was already formed. T
U U
V V
由此
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A A
A1. The Plaintiff’s Version
B B
34. Peter‟s case is that in about 1983, he was told by the
C C
5th Uncle that the Deceased‟s job was terminated because his employer,
D Wyco Ltd (“Wyco”), went bankrupt; and the 5th Uncle was looking at D
retirement. The Uncles started to utilize their savings to pay expenses
E E
including rentals and gradually experienced financial difficulty to
F continuously rent the Premises. Tommy‟s version was similar save that it F
was through a letter in 1984 from the Uncles that he learnt of those facts.
G G
H 35. In early 1985, the Father first presented the idea of purchasing H
a residence for the Uncles due to growing concerns about their dwindling
I I
financial situation and advanced age. Peter was designated to be the
J purchaser because he was always considered the most responsible in the J
family. Both Peter and Tommy were then working.
K K
L 36. In July 1985, shortly after the decision to purchase was made, L
Peter was offered admission to the medical school. He took up the offer
M M
and resigned at the end of August 1985. Tommy continued to work. He
N had no intention of owning a property in Hong Kong but was willing to N
help with the purchase price.
O O
P 37. The family letters show that Peter and Tommy always enjoyed P
a close relationship with the Uncles. Even the Father admitted that they
Q Q
loved the Uncles more than him. As far back as 1978, shortly after the
R death of his mother, Peter already told his Uncles that “你們是我們現在 R
S
最親的幾個, 所以我們一定是照理(顧)你們…” Likewise, Tommy S
wrote, “媽媽以(已)經去了,所以你們是我（最）愛的人。所以(如果)你
T T
們需要錢和其它東西,一定要給我們知,我們會盡量幫你們的。” Peter
U U
V V
由此
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A A
and Tommy claim to be fulfilling this promise to the Uncles through the
B B
purchase of a property for them and payment of monthly maintenance until
C they passed away. C
D D
38. The defence challenged Peter as lying because Wyco only
E went into voluntary liquidation at the end of 1999 with a surplus of E
HK$3.8 million over liability of HK$26,597. Moreover, it was not
F F
correct for Peter to state that the Uncles started to use their savings and
G experienced financial difficulties because their deposits had not been G
reduced. Notwithstanding knowledge of their poor financial position, it
H H
nevertheless took about 2 years until 1985 to set the decision to purchase
I in motion and another 2 years to complete it. In the meantime, no attempt I
was made to alleviate the Uncles‟ immediate needs. The defence queried
J J
whether or not Peter and Tommy were the loving and caring persons they
K claim to be. They did not return to Hong Kong upon their mother‟s death, K
to visit their Uncles who had ailing health, or to mourn the deaths of the
L L
Uncles. Rather, one month after the death of the Deceased, Peter gave
M 2 months‟ notice to evict Madam Tam. M
N N
39. The income tax returns of the Deceased produced by
O Madam Tam did show employment of the Deceased only up to 1984. O
Madam Tam‟s assertion that the Deceased remained employed thereafter
P P
remains a bare assertion. Further, that Wyco was only wound up in the
Q year 1999 did not preclude its being in financial difficulty in 1983/84. Its Q
R
being solvent would also not preclude it from terminating the employment
R
of a person. There were family letters in 1988, 1989 and 1990 showing
S S
that the Father had constantly asked if “亞六” (i.e. the Deceased) had
T T
U U
V V
由此
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A A
found a job. He even asked a friend to find a job for the Deceased in the
B B
year 1990.
C C
40. I find that Peter was told that the Deceased was terminated.
D D
Whether it was in 1983 or 1984 was not of much significance. I find that
E Peter did believe that the Uncles were running into financial difficulties as E
the 5th Uncle had limited income. It would not be surprising for the
F F
Uncles to resort to their savings. It was based on what he was told and
G his concern for his Uncles which triggered the decision to purchase. G
H H
41. I do not find it surprising that despite learning of the financial
I difficulties of the Uncles in 1983/84, the decision to purchase was only I
made in 1985. This is because Peter and Tommy only graduated from
J J
university in 1983. It was their employment since 1984 that would
K support the decision to purchase. Entering medical school was not an K
option until about July 1985. Peter might be financially incapable in the
L L
following 4 years but he had the backing of his Father and Tommy.
M M
42. In the meantime, the Uncles were not left without recourse.
N N
It was the evidence of Peter and Tommy that they had been sending
O monthly maintenance to the Uncles since 1984. Having looked at their O
social security statements, I am satisfied that they had the means to do so.
P P
Given the love and care expressed throughout the years in the family
Q letters, I am satisfied that they had done so despite the lack of documentary Q
proof. There will be more analyses about monthly maintenance under
R R
sections C3 and E1.
S S
43. It is true that the love and care was not reflected by making
T T
visits to Hong Kong. I am satisfied that Peter and Tommy were
U U
V V
由此
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A A
prevented by immigration problems from returning to Hong Kong to
B B
mourn their mother‟s death, as disclosed in the family letters. Further,
C Peter‟s focus was on showing love and care during the lifetime of the C
Uncles and not after their deaths. He only learnt of their deaths some
D D
time afterwards. He was also preoccupied with taking care of cancer
E patients in the USA. I find these to be honest reasons and did not detract E
from the fact that he was committed to the care of his Uncles.
F F
G 44. As for decision to evict Madam Tam, since she had never G
contributed to the upbringing of Peter and Tommy, I do not see why Peter
H H
needed to provide a residence for her as he did for the Uncles.
I I
45. Peter‟s version is credible.
J J
K A2. The Defendants’ Version K
L 46. The defence asserts that the Deceased had sufficient means to L
purchase with his savings and income but the then prevailing bank policy
M M
refused to grant mortgages to people of the Deceased‟s age (“the bank
N policy”). The Deceased allegedly approached his 2nd brother in Hong N
Kong and said, “Now my negotiation regarding the purchase of the
O O
property has come to fruition. It‟s $300,000. I do not have money for that.
P Can your children help out?” It was however the 5th Uncle‟s idea to use P
the name of Peter whom the Deceased liked most.
Q Q
R 47. This piece of evidence about approaching another nephew in R
Hong Kong was never mentioned in any affirmation or witness statement
S S
of Madam Tam. Even if I were to accept that the assistance sought was
T for a nephew to lend his name to the mortgage, Madam Tam could not T
U U
V V
由此
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A A
explain why the Deceased wanted $300,000 when he already had over
B B
$100,000 savings. This could be a slip of tongue which shows that the
C Deceased did not have sufficient money to purchase the Premises. C
D D
48. The issue of financial ability of the Deceased will be
E discussed in Section C below. However, I am satisfied on the evidence E
before me that the bank policy did exist. As at 1985, the 5th Uncle was
F F
aged 64 and the Deceased 55. There was prima facie reason for the
G Deceased to invite Peter to lend his name for a mortgage. The defence G
case is credible in this respect.
H H
I A3. Inferences to be Drawn from the Family Letters I
J 49. The family letters completely lacked any reference to J
ownership or funding of the Premises. Mr Chong relies on several family
K K
letters1 as declarations pointing to the only reasonable conclusion that
L Peter and Tommy considered the purchase as that of the Deceased. L
M M
(a) Letters before the purchase:
N N
Peter‟s letter dated 23.3.1985 asking, “你們間屋的聲氣怎樣?
O 如 果 你 們 交 ( 攪 ) 好 就 話 比 我 們 知 ”. [Note : the defence O
suggests that this letter should be read as “如果你們交(易)好
P P
就話比我們知”. It does not really matter.]
Q Tommy‟s letter dated 29.4.1985, “你們買屋買成怎樣?” Q
R
Tommy‟s letter dated 4.8.1986, “你們幾時買間屋？幾時需
R
要錢?”
S S
1
T Except for Tommy‟s letter dated 29.4.1985, these family letters were amongst those T
disclosed by Madam Tam in the 2nd round.
U U
V V
由此
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A A
(b) Letters after the purchase operating against the plaintiff :
B B
Letter from Peter‟s father dated 16.6.1987 when he asked the
C C
Uncles “您們的新屋怎樣?”
D D
50. Mr Chong submits that if the purchase was by Peter, the
E E
appropriate wording should have been: “我買的屋”，or “Peter 買的屋”.
F F
It was especially so when Tommy‟s letter dated 4.8.1986 was sent shortly
G after Peter and the Father‟s return from the July 1986 visit to Hong Kong. G
“新屋” must be referring to the “new ownership”. “您們的(Your)” was
H H
contemporaneous evidence pointing to ownership by the Uncles who had
I direct personal knowledge of the fact. I
J J
51. Some words are equivocal and different people could have
K different interpretations. In Watson v Smith [1998] 3 HKC 461, there was K
a dispute between mother and daughter as to whether a half share in the
L L
property was conveyed to the daughter as a gift (as contended by the
M daughter) or that the mother always intended to have beneficial interest in M
it (as contended by the mother). The first instance judge relied on
N N
2 letters written by the daughter long after the transaction had been
O completed as evidence against the daughter. O
P (i) The first letter read, “If we cannot finance the purchase and P
renovation of this house, can we sell our flat in Hong Kong
Q Q
because we can really make money on this one.”
R (ii) The second letter read, “Malcolm [i.e. boyfriend of the R
daughter] wants his money from the sale of our flat in Hong
S S
Kong to you [i.e. the mother]. I agree to give him another
T $300,000.” T
U U
V V
由此
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A A
Godfrey JA stated that for his part he did not think those letters bore the
B B
weight which the judge put on them. They were at best ambiguous.
C However, there was nothing the appellate court should do to interfere with C
the judge‟s decision.
D D
E 52. I do not read the words “您們” as irrevocably pointing to E
ownership being in the Deceased. Otherwise, did it mean that the
F F
th
5 Uncle was also an owner? The query “您們的新屋怎樣？” was but a
G G
general greeting asking how the Uncles felt about living in a property that
H was purchased as opposed to being rented. As Tommy testifies, he said it H
was going to be the Uncles‟ home. Peter was buying it but they were
I I
arranging the purchase for Peter. The writers of the letters were not
J paying attention to the legal form. J
K K
53. Quite contrary to Mr Chong‟s view, I interpret the 3 letters
L against the defendant. If Peter was simply lending his name, why would L
he be interested in knowing when the transaction would 攪好 or 交易好?
M M
Why would Tommy be interested in knowing when the Uncles needed
N money? The irresistible inference is that these 2 nephews needed to come N
up with purchase funds and needed to know the time frame. In fact, in a
O O
subsequent letter from the Father dated 15.12.1989, the Father asked:
P P
“……現在您們每月開銷大概要多少？請來函通知，然後我就計劃一下，
Q Q
和屋尚久(欠)息(多)少亦請查一查．因爲二仔要明年底才會完成他的醫生
R 執照(licence)。在訓練時期他的入息很少很少。不過我總盡力邦(幫)助您 R
們的。有什麽都不怕講……”
S S
T In another letter, the Father asked, T
U U
V V
由此
- 19 -
A A
“您的屋現在尚欠數目多少，什麽時候才可供完，得有點預算”.
B B
C Why would the Father need to mention mortgage interest, Peter‟s income C
and budgeting except because Peter had a financial role to play?
D D
E 54. I find on a balance of probabilities that Peter‟s version was E
more believable.
F F
G B. IMPLEMENTATION OF THE DECISION TO PURCHASE G
H
55. Peter executed the 1986 Power of Attorney. The other steps H
to implement the decision to purchase were logically all undertaken by the
I I
Uncles. They negotiated down the price to $300,000 which only sitting
J tenants may get, a price that was even lower than the landlord‟s acquisition J
price.
K K
L
56. It is not surprising that Peter displayed complete “lack of L
interest” (as described by Mr Chong) in the identity of the vendor, the
M M
amount of banking facilities sought and approved, and had never met the
N representative of the Bank, etc. To him, what was most important was N
that the financial outlay was within his means (then and the future). I see
O O
no reason why Peter could not trust his Uncles who had no conflict of
P interest with him. In any case, I do not consider the implementation steps P
as useful in pointing to the identity of the true owner.
Q Q
R 57. The 1986 Power of Attorney, however, gave a hint of the R
th
common intention. The undisputed evidence is that the 5 Uncle was the
S S
donee of the power. To Peter, the Deceased was anti-social whereas the
T 5th Uncle had a more outgoing personality. Peter also said that he and T
U U
V V
由此
- 20 -
A A
Tommy were so close to the Uncles that it was as if he was 5th Uncle‟s son
B B
and Tommy was the Deceased‟s son. The 1986 Power of Attorney had a
C limited scope — to purchase the Premises and to take out a mortgage. C
Had the Deceased been the real owner, he would have asked to be the
D D
donee with a much wider power, such as that for sale or lease.
E E
58. Madam Tam claims that the Deceased had to work from
F F
Monday to Saturday and could not take leave. So he instructed the
G 5th Uncle to deal with the documentation concerning the purchase. This G
is hardly believable. The negotiation for sale and purchase spanned over
H H
2 years. Why couldn‟t the Deceased afford to take half a day‟s leave to
I I
attend to legal documentation that would best protect his ownership?
J
I also find it surprising that when telling Madam Tam about his “true J
ownership” over the Premises, the Deceased would have gone into such a
K K
technical matter as to why the 1986 Power of Attorney was given to the
L
5th Uncle. L
M
59. I find the appointment of the 5th Uncle as the attorney was M
N
consistent with Peter being the real owner of the Premises. N
O C. FINANCIAL ABILITY OF PETER AND THE DECEASED O
P 60. The period in the 1980‟s leading up to the date of the P
Assignment of the Premises on 2.2.1987 is relevant.
Q Q
R C1. Financial Ability of Peter to Shoulder the Down payment R
61.
S 61. The income of Peter from 1981 to 1989 were as follows : S
T T
U U
V V
由此
- 21 -
A A
B
1981 US$0 (studying for bachelor degree)
B
1982 US$0 (studying for master degree)
C C
1983 US$0 (studying for Master degree)
D D
1984 US$16,380 (US$12,591 after tax; job with
Du Pont)
E E
1985 US$21,287 (US$15,874 after tax; job with
F F
Du Pont)
G 1986- 89 US$10,000 per year x 4 (student loan from G
medical school)
H H
1989- High income under internship and as doctor
I I
62. Peter claims that he was able to accumulate US$10,000 from
J J
his Du Pont years and US$10,000 from his student loan of US$40,000 (for
K 4 years) obtained since 1987. Together with a gift of US$5,000 from his K
father, he could provide for the down payment. In examination-in-chief,
L L
Peter suddenly mentioned that he also had a student grant of US$7,500 per
M M
year. He was also at liberty to ask for further loans because the medical
N
school wanted its students to concentrate on studying and not to worry N
about money. In the end, he did not ask for more.
O O
63. The student grant was not an entirely new invention. His
P P
witness statement mentioned that he had earned scholarship awards which
Q Q
helped him to pay for school expenses and living costs although the year of
R
the awards and amount were unclear. I will disregard this student R
grant/scholarship awards when considering his means.
S S
T T
U U
V V
由此
- 22 -
A A
64. Meaningful savings would only have come from about
B B
15 months‟ earnings from June 1984 (after passing the security vetting of
C Du Pont) to August 1985 (before entering medical school). From C
inception of the idea to purchase in early 1985 to August 1985, there was
D D
sufficient opportunity for Peter to save up. He even had a pay rise in the
E meantime. Given his frugal lifestyle, saving US$10,000 was probable. E
F F
65. The annual student loans from medical school could not have
G started later than 1985 or extended beyond 1989. Peter‟s witness G
statement stating that his student loan of US$40,000 was obtained since
H H
1987 (as opposed to 1985) must be a clerical error. Hence, by the start of
I the 2nd academic year in 1986, he would have received a total loan of I
US$20,000. He would not need to use the past savings from the Du Pont
J J
job to support his living expenses whilst in medical school. Though he
K needed to pay for food, boarding, tuition fees and textbooks, his living K
expenses were very minimal. Apart from doing exercise, he would be
L L
studying all day and this was well-supported by his account to his Uncles
M in the family letters. Even disregarding his grant/awards and potential to M
N
raise further student loans, I find Peter‟s case that he could save up another
N
US$10,000 to be credible.
O O
66. As for the Father‟s gift of US$5,000, I disagree with
P P
Mr Chong that this sum was applied to the mortgage instalments. As
Q stated clearly in Peter‟s witness statement, this sum was expended as part Q
R
of the down payment.
R
S 67. The Father had retired on 26.11.1985. According to Peter, S
the Father received social security funds and retirement income from his
T T
U U
V V
由此
- 23 -
A A
previous employer in as much sums as when he was working. He was
B B
financially sound and never demanded any of his children to support his
C abundant living even during his retirement. I find that the Father had the C
means to and did give US$5,000 to Peter. Hence, even disregarding his
D D
savings from his student loans, with his US$10,000 savings and gift from
E the Father, Peter could have afforded to pay the down payment. E
F F
C2. Financial Ability of Peter to Shoulder the Mortgage
G
Instalments
G
68. Mr Chong submits that between 1985 and 2.2.1987, Peter was
H H
in medical school and was in debt (student loans and loan from Tommy).
I He must have been surviving on past savings which rendered it unlikely I
for him to embark upon (a) an expensive and (b) long term financial
J J
commitment such as purchasing a property on the other side of the globe
K K
where he had no desire to reside in.
L L
69. I respectfully differ from Mr Chong‟s view. The student
M loan was unlikely to be due for repayment until Peter‟s graduation. It was M
also unlikely that Tommy, knowing the reason behind his loan, would have
N N
demanded for payment within the 4 years of Peter‟s medical studies.
O O
Mr Chong also overlooked Peter‟s earning capacity. His qualifications
P
are supported by documentary evidence. Even if he could not finish his P
medical degree, Peter could still rely on his science degree to earn him a
Q Q
respectable income. If he could finish his medical degree, his income
R might be (and later proved to be) much better. A commitment of about R
$2,800 per month for 10 years would pose no problem for him.
S S
T T
U U
V V
由此
- 24 -
A A
70. Peter temporarily lacked the ability to shoulder the mortgage
B B
between 1985 and the summer of 1989 without the assistance of Tommy.
C However, from the summer of 1989, Peter would be clearly in a better C
position than his Uncles who were approaching retirement. His taking up
D D
of the mortgage would enable the Uncles to use any savings they might
E have for their retirement. E
F F
71. Tommy gave financial backup through a loan of US$7,500 to
G cover the first 2 years‟ mortgage instalments. His social security G
statement disclosed a respectable income as an engineer of over
H H
US$20,000 from 1984 to 1985; and over US$30,000 from 1986 to 1989.
I He described his saving pattern and how he increased his savings to cater I
for the purchase of the Premises. After the first 2 years, he continued to
J J
send monthly sums of US$200 to the Uncles. Hearing the Father‟s worry
K that the US$7,500 would be running short, Tommy increased the monthly K
sums to US$300 per month.
L L
M 72. I find Peter and Tommy‟s versions to be credible. M
N N
C3. Financial Ability of the Deceased to Shoulder the Down
O payment O
P P
73. There is undisputable documentary evidence that over a
Q continuous 10 years since 1975, the Deceased had accumulated savings of Q
HK$100,000 by 1985; and he had joint savings with the 5th Uncle in the
R R
sum of HK$30,000. These indicate the ability to shoulder the down
S payment. S
T T
U U
V V
由此
- 25 -
A A
74. However, as shown below in section C4, I am not satisfied
B B
that the Deceased had stable employment beyond 1984 or that he had
C another source of income. If so, these deposits would have been depleted C
by the time the down payment had to be paid.
D D
E C4. Financial Ability of the Deceased to Shoulder the Mortgage E
instalments
F F
75. There is no dispute that the mortgage instalment was more or
G less of the same amount as the rent. The relevant questions are: viewed G
in 1985 to 1987 (i) would the Deceased have a sufficiently long working
H H
life to meet the 10 year mortgage? (ii) What was there to provide for the
I Uncle‟s retirement fund if the deposits and income were consumed by the I
purchase price of the Premises?
J J
K 76. As the evidence shows, the Deceased had ceased employment K
in 1984 and did not resume stable employment. How could he shoulder
L L
the mortgage? Even if I am wrong and he had continued working with
M Wyco, what was his expected retirement age? In view of the bank policy M
and age of the Deceased, why wait for 2 years of working life to lapse
N N
before taking out the mortgage in 1987? Why fly in Peter when a nephew
O O
in Hong Kong might be able to help? After all it was just lending of
P
name for the mortgage without the need for actual financial contribution. P
Tommy would also be the better choice with better income proof to satisfy
Q Q
the bank. During the term of the mortgage, at least the 5th Uncle would
R retire, he being 9 years older than the Deceased. According to Madam R
th
Tam, the 5 Uncle was in fragile health. He did not receive good
S S
education. He did not earn much income. How much retirement
T pension he received was his private business. If so, would not the T
U U
V V
由此
- 26 -
A A
Deceased also make provision for him and how? After the down
B B
payment, about $30,000 deposit would be left. There might be a
C retirement pension for each of the Uncles but how much? How long C
could the deposit and pension last? There is no credible evidence to show
D D
that the Deceased could shoulder the full term of the mortgage whilst
E leaving sufficient funds for retirement use. E
F F
77. If I am wrong in posing the questions in paragraph 75, I have
G considered the evidence which purports to show that the Uncles retired G
much later than 1983/84 and that the Deceased had another source of
H H
income.
I I
C4(1) When the 5th Uncle Retired
J J
78. The 5th Uncle should have retired at the end of 1988 to
K K
early 1990. This is deduced from the following letters :
L L
M (i) From the Father dated 15 December which said “[I ]know you M
will be retiring at the end of the year.” Based on the remark
N N
in the letter that Peter will be completing his doctor‟s licence
at the end of the following year, it was deduced that the year
O O
of this letter should be 1988 or 1989.
P P
(ii) From Peter dated 23 January which said, “I still have half a
year to go before graduation. … I know the 5th Uncle has
Q Q
retired.” As Peter graduated in mid-1989, the 5th Uncle
R would have retired at the end of 1988/early 1989. R
S
(iii) From the Father on 17.12.1990 wherein he asked whether the S
5th Uncle was at risk of losing his job should ownership of Dai
T Cheong (his employer) change hands. T
U U
V V
由此
- 27 -
A A
79. There appeared to be a difference of 1-2 years here. I do not
B B
think it really matters. On the defence‟s case, the 5th Uncle was never
C regarded as having contributed in any way towards the purchase or the C
household expenses. I draw an inference most favourable to the defence
D D
– that the 5th Uncle retired in 1990.
E E
C4(2) When the Deceased Retired
F F
80. There were different versions:
G G
H (a) Peter‟s: retired in about March 1983 with no regular or H
significant income thereafter. The employer‟s return filed up
I I
to March 1984 contradicted him. He clarified in his oral
J evidence that the year of retirement could easily be 1984. J
K K
(b) Tommy‟s: in his oral evidence (unsupported by his witness
L statement and affirmation) he stated that the Deceased had, in L
a letter in 1984 to him, informed him about losing his job.
M M
N (c) The Father‟s: in 1988, 89 and 90 he expressed concern as to N
whether the Deceased had found a job. On 17.12.1990, the
O O
Father wrote to the Uncles enquiring whether or not there
P would be risk of losing his job should the ownership of Dai P
Cheong (the 5th Uncle‟s employer) changed hands. Mr
Q Q
Chong suggests that the letter in 1988/1989 relating to “know
R you will retire at the end of the year” could only be directed at R
the Deceased. The Deceased was still in employment at least
S S
until the end of 1989.
T T
U U
V V
由此
- 28 -
A A
(d) Madam Tam‟s: her 4th affirmation stated that the Deceased
B B
retired in 1989. Her witness statement stated that both
C Uncles retired between 1990 and 1993. When asked as to C
which version she was willing to stick to in the witness box,
D D
she was unwilling to commit herself. She is unreliable.
E E
81. Taking these versions together, the most probable scenario is
F F
that the Deceased lost his job with Wyco in 1984. He might have worked
G thereafter until 1989 but the identity of the employer and income level G
were unclear. From 1983-1985, his deposit had remained at or about
H H
$100,000. After 15.1.1985 there was no more documentary evidence
I showing that the Deceased still had any fixed deposit. This situation was I
consistent with the termination of employment with Wyco in around
J J
1983/84.
K K
C4(3) Another source of income of the Deceased
L L
82. Madam Tam claims that the Deceased had another source of
M M
income from selling paintings. It brought in about HK$5,000 to $10,000
N per month. The Deceased allegedly stopped painting in 1997 because N
after the handover, many commercial paintings flooded from Mainland
O O
China and the Deceased could no longer sell for profit.
P P
83. I accept that the Deceased was engaged in selling paintings.
Q Q
This is borne out by the evidence of Madam Ng that back in the 1990s, the
R Deceased was already painting and she even wanted her son to learn from R
him. In addition, the photos showed that the paintings were not yet
S S
mounted onto frames; some were identical with slight variations.
T Without disrespect, the paintings were not of very high standard. They T
U U
V V
由此
- 29 -
A A
could not be collector items of the Deceased but clearly for the purpose of
B B
commercial disposal. It was unlikely that the paintings belonged to the
C 5th Uncle whose interest was in Chinese artefacts, antiques and painting. C
The fact that Robert and other family members were only aware of the
D D
interest of the Deceased in music but not painting was not surprising, given
E what Peter described to be the anti-social character of the Deceased. The E
Deceased might have picked up the art at a time unknown to his nephews.
F F
G 84. The more difficult question was the income from selling G
paintings. The alleged income was up to about 1.5 to 3 times of the
H H
Deceased‟s latest monthly average income of HK$3,352 in 1984. There
I was not a shred of documentary proof. There was complete silence over I
this business or even interest in oil painting in the family letters
J J
notwithstanding the constant concern of the Father over the Uncles‟
K financial condition, and his express mention that his new wife could do K
well in oil painting.
L L
M 85. Obviously the income from oil painting was unstable because M
at one stage in 1995 the Deceased suggested renting out one room to
N N
reduce the financial pressure. The objective evidence, however, was that
O between 1975 and 1985, the deposits increased from HK$10,000 to O
HK$100,000, representing an average of about HK$937 per month. The
P P
continuous accumulation of savings of the Deceased might be due to
Q income from employment, oil painting, interests, money from the Father, Q
R
monthly sums from Peter and Tommy or even some contribution from the
R
th
5 Uncle. I am unable to infer the level of income from oil painting.
S S
T T
U U
V V
由此
- 30 -
A A
D. WHO PAID THE DOWN PAYMENT?
B B
86. The down payment was about HK$100,000. Peter said he
C C
wrote out a cheque for US$15,000 to the 5th Uncle. Madam Tam did not
D state how the Deceased paid. Although each party has a credible version D
on ability to pay, there is no documentary proof as to who actually paid the
E E
down payment. Even if I reject Peter‟s version, Madam Tam still fails to
F discharge the burden of proof. F
G G
E. WHO PAID THE MORTGAGE INSTALMENTS?
H H
87. The central issue was the identity of the true purchaser.
I Once that is decided, I agree with Mr Chong that the identity of who repaid I
the mortgage was irrelevant. The rights and liabilities of the parties
J J
would be crystallized at the time of the purchase and not thereafter : Siu
K Chun Wah Alice & another v Malahon Credit Co. Ltd [1988] 1 K
HKLR 196.
L L
M 88. Mr Chong is also correct that it was no part of Peter‟s case M
that by virtue of his contribution to the mortgage repayment, he acquired
N N
proprietary interest in the Premises.
O O
89. Evidence of who paid for the mortgage may help to decide
P P
who might have been the owner.
Q Q
E1. Peter’s Case
R R
th
90. Peter‟s case is that he had written out a cheque to the 5 Uncle
S S
for the first 2 years‟ repayment representing the loan of US$7,500 from
T Tommy. T
U U
V V
由此
- 31 -
A A
91. In addition, he had been sending US$100 to US$200 per
B B
month to the Uncles primarily for repayment of mortgage and living
C expenses as early as 1984 until they died. (The mortgage did not start C
until 1987 so this could only mean that the monthly sum before and after
D D
the mortgage period was for living expense.) From 1987-1993, he had
E been paying US$100-US$200 per month to the 5th Uncle for repayment of E
the mortgage. Given that Peter lived frugally and could save up from the
F F
first 2 years‟ student loan, I accept that he had the ability to come up with
G the alleged monthly sums. After graduating from medical school, he G
definitely had the means to pay the mortgage instalments.
H H
I 92. Tommy has been sending US$200 per month to the Uncles I
after the first 2 years of the mortgage and US$300 per month since 1989.
J J
Since he was able to save up US$7,500 in about 2 years (on average
K US$312.30 per month), continuing to pay US$300 per month was within K
his means. His monthly payments would have supplemented any
L L
shortfall between each mortgage instalment and Peter‟s monthly payment.
M M
93. For the defence case, Mr Chong submits that the Father‟s
N N
letter dated 16.6.1987 suggested that the financial burden arising from the
O acquisition of the Premises fell upon the shoulders of the Uncles : O
P “……您們的新屋怎樣？亞六找到新工作未有？如因須(需) P
2
邦(幫)忙的話，最(重)要通知我們……”
Q Q
R 94. I do not think this letter points either way. If the Premises R
were owned by Peter, the Deceased could still need financial assistance.
S S
If the Premises were owned by the Deceased, the Father‟s concern would
T T
2
This is one of the family letters disclosed by Madam Tam in the second round.
U U
V V
由此
- 32 -
A A
not just be limited to the question of mortgage but the Deceased‟s finance
B B
generally.
C C
95. Mr Chong submits that none of the family letters ever hinted
D D
that monthly maintenance had been given to the Uncles nor that the Uncles
E asked for financial help. The only exception was in the 1999 letter when E
the 5th Uncle was critically ill and the Deceased asked Peter and Tommy to
F F
send in US$10,000 or US$1,200 per month. If there had been regular
G monthly maintenance, it was difficult to imagine why Peter and the Father G
had to ask the Uncles if they needed financial assistance:
H H
Letters from the Father
I I
(a) 16.6.1987 : “……如因須(需)要邦(幫)忙的話，最要通知我
J 們……” J
K (b) 10.8.1987 : “……還有您們的經濟情形如何？……” K
(c) 30.5.1988 : “……如果您們有什麽須(需)要的，就通知
L L
我……”
M (d) 15.12.1989 : “……現在您們每月開銷大概要多少？請來函 M
通知，然後我就計劃一下，和屋尚久(欠)息(多)少亦請查
N N
一查．因爲二仔要明年底才會完成他的醫生執照
O (licence)。在訓練時期他的入息很少很少。不過我總盡力 O
邦(幫)助您們的。有什麽都不怕講……”
P P
(e) 23.01.1990 : “……現在寄五佰元給您們訴年利事……(錢
Q 是孩子們給您的)……” Q
(f) 27.5.1990 : “……您的屋現在尚欠數目多少，什麽時候才可
R R
供完，得有點預算……”
S S
T T
U U
V V
由此
- 33 -
A A
B
Letter from Peter
B
(g) 15.7.1978 : “……如果您們要錢的話，可以話比我知……”
C C
D 96. I disregard Peter‟s letter dated 1978 because monthly D
maintenance had not started yet. However, the above letters show a
E E
constant concern from the Father as to how the Uncles were going. Only
F he had the habit of stating the purpose of sending money to the Uncles and F
the amount. There is evidence that Peter and Tommy had regularly sent
G G
money to the Deceased and Madam Tam in 2001-2003 but without an
H accompanying letter. I can hardly see why they had adopted a different H
practice for the monthly maintenance before 2001.
I I
J 97. As Tommy explained, the 1999 letter was very telling. It J
demonstrated that the Deceased felt close enough to Peter and Tommy that
K K
they would ask for more money for emergency reasons. That did not
L mean that before 1999 they had not been sending monthly maintenance. L
M M
98. Peter case is credible.
N N
E2. Defence Case
O O
99. The instalment loan credit advice (“the Credit Advice” and
P P
similar documents will be called “the credit advices”) showed that in
Q December 1992 a sum of about $2,800 was debited from “account no. Q
021-307-105056362” (“the Bank Account”) of the Wing On Bank Limited
R R
to meet a mortgage instalment. Peter does not claim to be holder of the
S Bank Account. Madam Tam claims that the Deceased was the holder of S
T T
U U
V V
由此
- 34 -
A A
the Bank Account. The other possible candidate was the 5th Uncle to
B B
whom Peter sent the money for down payment and monthly sums.
C C
100. The issue are: who the holder of the Bank Account was and
D D
the source of deposits into the Bank Account.
E E
101. Madam Tam says that when attending to the Deceased‟s
F F
affairs, she could see that the Bank Account number was in the Deceased‟s
G name. In cross-examination, she admitted that she could not remember G
the Bank Account number but there was a passbook of the Wing On Bank
H H
Limited with the Deceased‟s name on it. Her evidence is not sufficient to
I establish the identity of the Bank Account holder. I
J J
102. The other piece of supporting evidence of the Bank Account
K holder came from Mr Chow. He claims that on a day in 2000 after the K
death of the 5th Uncle, the Deceased told him to tear up the passbook of the
L L
Deceased with the Bank and the credit advices since the mortgage had
M been fully repaid. Mr Chow counted some 60-70 entries of deductions M
from the passbook which the Deceased told him were for mortgage
N N
instalments. Mr Chow also tore some interest tax deduction certificates
O but he could not recall how many. (This incident will be referred to O
below as “the tearing up exercise”.)
P P
Q 103. In his oral testimony Mr Chow claimed that it was the credit Q
advices (not the entries in the passbook) that he counted and found there to
R R
be 60-70 sheets. He said he was interested to know about the cost of the
S Premises. His conclusion was that it cost about “several hundred S
thousand”. He also mentioned that during the tearing up exercise, he
T T
went to the kitchen to fetch a pair of scissors so as to cut up the passbook.
U U
V V
由此
- 35 -
A A
Having learnt of that, Madam Tam went to see the documents. Since she
B B
had never taken out a mortgage in her life, she took the Credit Advice for
C the purpose of keepsake. C
D D
104. There are lots of puzzling areas in Mr Chow‟s evidence :
E E
(a) The Deceased had only come across Mr Chow for about half a
F year. It was very surprising that he would have allowed F
Mr Chow to go into details of his financial affairs. (The
G G
passbook allegedly contained entries not only of the mortgage
instalments but also substantial deposits of several ten
H H
thousands.)
I I
(b) Mr Chow‟s witness statement stated that he counted the
entries of the bank passbook. In his oral testimony, it was
J J
the credit advices that he counted. This was inconsistent.
K The witness statement never mentioned any credit advices. K
L
(c) The reason for counting the credit advices was illogical. L
Mr Chow said he went through the documents just to make
M sure he had not torn up any useful documents. However, M
documents in each category looked the same so it was not
N N
necessary to examine each of them. If what he wanted to
O know was the cost of the Premises, he could have asked the O
Deceased directly. He said he felt embarrassed to do so.
P Why would he not feel embarrassed to count the Deceased‟s P
financial documents but felt embarrassed to ask directly of the
Q Q
Deceased? The Deceased had readily told him the use of the
R deposits already. R
(d) Counting 70 credit advices at a monthly repayment of $2,800
S S
would only give about $200,000 and not “several hundred
T thousand” as he claimed. T
U U
V V
由此
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A A
B
(e) Why didn‟t he read or count the interest tax deduction
B
certificates to ensure that he had not torn up useful
C documents? C
D D
105. Most remarkable was that his evidence was contradicted by
E Madam Tam. According to her 4th affirmation filed in November 2009 in E
opposition to the originating summons, Madam Tam stated that “My
F F
husband had handed to me 70 odd pieces of Instalment Loan Credit
G Advice … I had destroyed all of them except one.” She never mentioned G
H
the involvement of Mr Chow or the destruction of other documents. It
H
was only in her supplemental witness statement that she said her son was
I I
the one who tore up the passbook.
J J
106. There was also no mention of the incident of fetching a pair of
K scissors and the presence of Madam Tam at some stage of the tearing up K
L
exercise in the witness statements of either Madam Tam or Mr Chow. L
Mr Chow said he had left it out because he did not think it was important.
M M
107. The whole purpose of the evidence in this respect was to
N N
correlate the Bank Account number to the passbook in the name of the
O Deceased to show that it was the Deceased who repaid the mortgage. The O
P
inconsistencies in the evidence of Madam Tam and Mr Chow expose their P
unreliability as witnesses. I am not satisfied that the Deceased was the
Q Q
holder of the Bank Account or that the tearing up exercise had occurred or
R
that it was how Madam Tam came into possession of the Credit Advice. R
The knowledge of there being about 60-70 instalments paid was simply
S S
obtained from reading the Credit Advice and not from counting anything.
T T
U U
V V
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A A
E3. The Accelerated Payment
B B
108. Who made the accelerated payment in February 1993 to
C C
redeem the mortgage and hence save interest?
D D
109. Peter claims that he did it with a loan of US$10,000 from
E E
Tommy and his own savings totalling US$12,000. Tommy had stable
F income since 1984. He had the ability to lend the sum. By then, Peter F
was working as a clinical director of radiation oncology with a very
G G
substantial starting salary. He got an offer for a doctor‟s post in late 1992,
H the formal contract for which was to start in 1993. No doubt he would H
have the means to repay Tommy.
I I
J 110. Madam Tam, on the other hand, says the Deceased used his J
savings of about $100,000 to pay off the mortgage. How was the
K K
Deceased able to save up $100,000 from 1987 to 1993 when both Uncles
L had retired in the meantime? If, as found above, the Deceased had retired L
in about 1989, why did he not redeem in that year to save interest? How
M M
would he meet his retirement if these savings were used up and his income
N from oil painting was unstable? N
O O
111. I find Peter‟s case to be more credible.
P P
E4. Discharging the Burden of Proof
Q Q
112. It is not sufficient to proof an ability to bear the mortgage
R R
instalments. Nor is it sufficient to show that the claimant of beneficial
S interest actually deposited money into the mortgage account. The source S
of funds for such payments must be proved and there must be
T T
contemporaneous documents. In Chan Chui Mee v Mak Chi Choi
U U
V V
由此
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A A
[2009] 1 HKLRD 343, the property was registered in the sole name of the
B B
1st defendant, the plaintiff‟s ex-husband. The plaintiff alleged that she
C paid the initial deposit and all the mortgage payments although she C
expected the 1st defendant would pay. Since she had jobs, she had the
D D
ability to meet the mortgage payments as well. The learned judge
E commented on her evidence in this way : E
F “ The plaintiff said she undertook several odd jobs during F
that time. However, she did not produce any documents to
support her income. Nor did she produce any documents to
G G
show money was withdrawn from her bank accounts to pay the
mortgage payments. This court had explained to her the
H importance of producing contemporaneous documents to support H
her case at the pre-trial review on 9 January 2008. In particular,
this court explained why the production of pay-in slips might not
I be sufficient. Despite the direction from this court, up to the I
beginning of the trial the plaintiff only produced the pay-in slips
J showing money paid into the account of the 1st defendant to J
support her case. There is no documentary evidence to show
the source of funds for such payments.
K K
It was only on the last day of trial the [son of the plaintiff]
produced passbook records of the Hang Seng Bank account of
L L
the plaintiff to support the [son‟s] case that he had issued
cheques paid into the plaintiff‟s account for mortgage payments.
M However, the passbook records do not tally completely with the M
[son‟s] claim. …
N More importantly, the passbook records do not tally with N
the mortgage payment records as evidenced by the pay-in
slips. …”
O O
P P
113. It can be seen that the plaintiff in Chan Chui Mee’s case has
Q
produced more than Madam Tam in showing deposits into the bank Q
account. The learned judge still considered that it was insufficient. In
R R
the present case, there was neither contemporaneous document to show the
S Deceased‟s income from Wyco or selling oil paintings during the term of S
the mortgage, nor to correlate his own resources to the payment of the
T T
down payment and mortgage instalments.
U U
V V
由此
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A A
114. I am not satisfied on the balance of probabilities that
B B
Madam Tam had discharged the burden of proving this issue.
C C
F. POSSESSION OF TITLE DEEDS SINCE REDEMPTION OF
D THE MORTGAGE D
E 115. There is no dispute that the Uncles did ask for and obtained E
from Peter a power of attorney („the 1993 Power of Attorney”) and
F F
retrieved the title deeds from the Bank. Mr Chong submits that Peter was
G complying with the requirement of the Uncles instead of himself in G
initiating the collection of the title deeds and executing the 1993 Power of
H H
Attorney. Then for 14 years up to the death of the Deceased, the title
I deeds had indisputably been in the uninterrupted possession of one or both I
of the Uncles. There was no evidence of either of the Uncles‟ attempt to
J J
return them to Peter or Peter‟s request for their return during the lifetime of
K
the Deceased. Being honest gentlemen, the Uncles‟ conduct was K
L
inexplicable, so the submission goes, and would only be consistent with L
the fact that the title deeds were in the hands of the real owner with Peter
M M
thinking likewise. The title deeds are now in the hands of Madam Tam.
N N
116. Peter explained that the 1993 Power of Attorney was given to
O
the 5th Uncle to take possession of the title deeds for him. He never asked O
P
for return of the title deeds for 2 reasons : P
Q
(a) He did not truly understand the importance of the title deeds; Q
(b) He had complete trust in his Uncles.
R R
S 117. I do not consider Peter as complying with the instructions of S
the Uncles in retrieving the title deeds. Upon discharge of the mortgage,
T T
the Bank would naturally want to return the title deeds to the title holder
U U
V V
由此
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A A
and the Uncles would relay the Bank‟s message to Peter. Who initiated
B B
the return was irrelevant.
C C
118. Peter had never bought another property in Hong Kong. He
D D
was not familiar with the Hong Kong law. According to him, in the USA,
E it was the registration of title that was important. The piece of paper E
showing title was not. I find that he did operate under that understanding
F F
and hence had not asked for the return of the title deeds. More
G importantly, as the Uncles were to have a licence to live in the Premises G
for life, what was the importance and hurry in getting back the title deeds?
H H
I 119. Mr Chong refers to the case of Warren v Guerney [1944] 2 I
All ER 472 for the proposition that the title deeds were sinews of land. In
J J
that case a father purchased a property for her daughter but had retained
K the title deeds until his death. In deciding whether or not the executors of K
the father had rebutted the presumption of advancement, the English Court
L L
of Appeal was of the view that there was ample evidence to justify that
M conclusion of the judge. The Court of Appeal was of the view, amongst M
others, that the father‟s retention of the title deeds from the time of
N N
purchase to the time of his death was a very significant fact because the
O title deeds were “sinews of the land”. The English Court of Appeal did O
not state, however, that possession of title deeds was conclusive in the
P P
determination of a person‟s property rights. In Warren v Guerney, the
Q Court relied not only on the possession of title deeds to decide its case but Q
R
also the fact that the father had paid for the full price and that there was
R
contemporaneous declarations by the alleged donor as to his interest.
S S
T T
U U
V V
由此
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A A
120. I am not satisfied that mere possession of title deeds would of
B B
itself be an act showing true ownership of the Deceased. In the present
C case, it was consistent with the gratuitous licence to occupy and the Uncles C
were holding the title deeds as bailees for Peter.
D D
E G. GENERAL CREDIBILITY OF PETER AND MADAM TAM E
F 121. If Peter were not the real owner and had never paid any part of F
the purchase price, why not leave the Premises to Madam Tam who had
G G
been married to the Deceased for 7 years and had been looking after the
H 2 Uncles? Does Peter have a motive to lie? Mr Chong suggests that H
greed motivated him to litigate, the Premises having grown in value to
I I
over HK$6 million.
J J
122. Peter left Hong Kong at the age of about 14. He has lived in
K K
the States for 4 decades. He has his own property in the USA and a
L remunerative and reputable job. Why would he put those at stake by L
perjury? Even if Peter were greedy, that cannot explain why Tommy
M M
needed to lie. Tommy does not even claim a share in the Premises
N because of his financial assistance to Peter. Still less does Robert have N
the motive to lie, he being admittedly not in a close relationship with his
O O
2 half-brothers. I am not satisfied that Peter was motivated by greed or
P that any of these 3 brothers had lied. Overall I find them to be honest P
witnesses even though there was lack of contemporaneous documents for a
Q Q
material period. Their versions are consistent with the tone and contents
R of the family letters. R
S S
123. Madam Tam had cohabited and been married to the Deceased
T for 13 years. She does not appear to have the security of another property. T
U U
V V
由此
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A A
She expended money on the Premises and had always regarded it as her
B B
home. At her age, she certainly needed the security of a roof over her
C head for the rest of her life. She does have the motive of not stating the C
whole truth to salvage her interest in the Premises.
D D
E 124. Madam Tam has purported to set out her case in 3 pre-action E
letters, In the first letter dated 30 July 2007 to Peter and Tommy, she
F F
expressed refusal to move out because she was not in a tenant relationship
G with them. She asserted that they had seriously told her and the Deceased, G
“The Premises were yours. You could live on in it.” She did not assert
H H
that the Premises were owned by the Deceased. The tone suggested that
I she thought she was just permitted to live there. I
J J
125. In the 2nd letter dated 10 August 2007, Madam Tam wrote to
K Peter stating, amongst others, that the Premises were bought with the K
lifetime earnings of the Deceased, authorizing the use of Peter‟s name.
L L
M “It was completed under an agreement to let us live till the end of our M
lives, under a promise that you will take care of us in our old lives. This
N is a trust in you, you along did so. Today, regardless of everything, you N
hope to use superficial evidence in order to swallow the estate of the 6th
O O
Uncle.” (emphases added)
P P
If the Premises were bought by the Deceased, why would Peter need to
Q Q
enter into the agreement or give the promise referred to in this letter?
R This was an attempt to get the best of both worlds – ownership of the R
Premises and lifelong financial provision from the nephews.
S S
T T
U U
V V
由此
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A A
126. Finally in her letter dated 11 August 2007, Madam Tam
B B
reminded Peter that the Deceased had kept his promise to Peter.
C Although he used Peter‟s name and took out a mortgage to purchase a C
property, he had never required Peter to bear any expenses. The Premises
D D
simply had nothing to do with Peter. Therefore, not only had Peter not
E paid the mortgage, but he had not also borne the renovation costs and E
outgoings.
F F
G 127. These 3 letters gradually built up Madam Tam‟s case on G
ownership. However, what is telling is her oral evidence. She said that
H H
she and the Deceased did not have children. Her intention was to reside
I there till she died and the Premises “would be given to them”. She asked I
what she needed the Premises for. She had no intention to snatch
J J
somebody‟s property.
K K
128. Madam Tam does have a son from her previous marriage.
L L
When she died, the Premises should go to her estate. Mr Chong submits
M that Madam Tam was talking about traditional succession law so that when M
the Deceased and Madam Tam died, the Premises would revert to the
N N
Deceased‟s line. If he is correct, to whom would the Premises be given?
O Why to Peter (and/or) Tommy but not other nieces and nephews? O
P P
129. In my view, the true meaning of this piece of evidence is that
Q Madam Tam truly thought that she only had a life interest and the Premises Q
would be returned to the true owner. She was clearly mistaken because
R R
Peter and Tommy had never intended to make provisions for her as for the
S Deceased who had taken care of them. S
T T
U U
V V
由此
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A A
130. Overall, I find the version of Peter and his brothers to be more
B B
credible.
C C
H. FINDINGS ON COMMON INTENTION OF THE PARITES
D OVER OWNERSHIP OF THE PREMISES D
E 131. In 1983/84, the 5th Uncle told Peter and Tommy that the E
Deceased‟s employment was terminated because Wyco went bankrupt and
F F
the 5th Uncle was expecting retirement. The Father decided in about 1985
G that Peter should purchase the Premises for the Uncles. The common G
intention of Peter and the Deceased was for Peter to be the real owner and
H H
to bear all costs of the purchase. At that time, Peter and Tommy had
I already graduated and were in employment. I
J J
132. Shortly after this decision was made, Peter received notice of
K admission to the medical school for the year 1985. He quitted his job by K
the end of August 1985 and studied medicine for 4 years.
L L
M 133. The decision to purchase took about 2 years to mature. In M
July 1986, Peter and his Father came to Hong Kong for the purpose of
N N
th
executing the 1986 Power of Attorney authorizing the 5 Uncle to
O purchase the Premises and to take out a mortgage. In the meantime, the O
Uncles negotiated as sitting tenants with the landlord and successfully
P P
agreed on a purchase price of $300,000. The Assignment was executed
Q on 2.2.1987. The mortgage in the name of Peter was for $200,000 Q
R
repayable over 10 years. The monthly repayment was about $2,000 odd,
R
similar to the rent the Uncles were previously paying.
S S
T T
U U
V V
由此
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A A
134. Peter had the ability to and did pay the down payment and
B B
mortgage instalments. Tommy had the ability to and did assist Peter.
C Peter sent his own savings from past earnings and student loans totalling C
about US$10,000 and a gift of US$5,000 from the Father to the 5th Uncle
D D
to pay for the down payment of $100,000. He borrowed US$7,500 from
E Tommy to cover the first 2 years‟ mortgage repayment. In addition, Peter E
had been sending US$100 to US$200 to the Uncles per month. Tommy
F F
has also been sending the Uncles US$200 per month. He increased it to
G US$300 when his income increased and when the Father expressed G
concern when the US$7,500 was running short.
H H
I 135. After his graduation from medical school, Peter secured a I
highly remunerative job. He borrowed US$10,000 from Tommy.
J J
Together with his own savings of US$2,000, he made an accelerated
K payment to pay off the mortgage. All loans to Tommy had been repaid. K
L L
136. The Deceased had savings of HK$100,000 and joint savings
M with the 5th Uncle of HK$30,000. Theoretically, he could afford the M
down payment. The monthly mortgage was more or less the same as the
N N
rent and theoretically he could also afford to pay it. The bank policy
O existed and the Deceased would not be able to take out a mortgage in his O
own name had he needed to.
P P
Q 137. The 5th Uncle retired in about 1990. The Deceased was Q
employed by Wyco until 1984; he might have other jobs until 1989 but the
R R
identity of the employer and income level was unclear. He had alternate
S income from oil painting but the level of income was unclear. Applying S
all his deposits and income to purchase the Premises would consume all
T T
U U
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由此
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A A
his funds and left him with virtually no means to meet his and the
B B
5th Uncle‟s retirement life. It was thus improbable that he would be able
C to afford the purchase or meet a 10 year mortgage. Madam Tam claims C
that the Deceased paid the accelerated payment. Again, the source of
D D
such payment was not proven.
E E
138. There was no tearing up exercise as claimed by Madam Tam
F F
and Mr Chow. Accordingly, there was nothing to associate the Deceased
G with the Bank Account from which the mortgage repayments were made. G
H H
139. I find Peter‟s case to be credible despite the lack of crucial
I banking documents. The Uncles were in occupation as licensees of Peter. I
Even if I do not believe him, I am not satisfied that Madam Tam has
J J
discharged the burden of proving that it was the Deceased who funded the
K purchase of the Premises. There was no contemporaneous documentary K
evidence to prove the means of the Deceased or to correlate the payment of
L L
purchase monies with the Deceased‟s own resources. The claim of
M Madam Tam as an executrix based on resulting trust fails. M
N N
II. Adverse Possession
O O
140. Madam Tam relies on the following facts to establish her
P claim in adverse possession : P
Q (i) 1994 : her entry into occupation of the Premises; Q
(ii) 2000 : delivery of title deeds by the Deceased to her; and
R R
(iii) 2003 : the Deceased‟s demand for transfer of ownership from
S S
Peter.
T T
U U
V V
由此
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A A
I. 1994 : Madam Tam’s Entry into Occupation of the Premises
B B
141. Madam Tam‟s evidence was that she had known the Deceased
C C
since 1958 and they had been in correspondence. Correspondence
D between them ceased in 1964 but resumed in 1987 when they entered into D
closer acquaintance. She arrived in Hong Kong in April 1994. Upon
E E
learning of her quarrel with her family, the Deceased invited Madam Tam
F to reside at the Premises. When Madam Tam asked if his family member F
(meaning the 5th Uncle) would object, the Deceased stated that no one
G G
could object as the Premises were purchased with his own money.
H Madam Tam then moved in and cohabited with the Deceased since H
December 1994, until they got married in 2000. If accepted, this piece of
I I
evidence tends to show that the Deceased had exercised a right of
J ownership over the Premises inconsistent with the right of Peter and that J
the time for the purposes of sections 7 and 17 of the Limitation Ordinance
K K
had started to run from the end of 1994.
L L
142. After so many years, one cannot expect Madam Tam to have
M M
any document to show her residence at the Premises in the 1990s or early
N 2000s. Four witness gave evidence to the effect that Madam Tam had N
resided at the Premises since 1994/1995 :
O O
(i) Madam Ng Hung met Madam Tam on the street in the
P P
Chinese New Year of 1995. Madam Tam introduced the
Q Deceased as her husband stating this was her second marriage. Q
Madam Ng often went to the Premises and saw Madam Tam,
R R
the Deceased and the 5th Uncle there.
S (ii) Mr Wong testified that when he visited Madam Tam‟s mother S
at the end of 1994, she told him that Madam Tam had moved
T T
into the Premises. He later met Madam Tam who confirmed
U U
V V
由此
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A A
B
she had so moved. He had been to the Premises to help out
B
on odd jobs since 1995 but most of his visits were post-2000.
C He saw the Uncles inside the Premises but rarely talked to C
them. Mr Wong‟s witness statement did not mention the
D D
relationship between Madam Tam and the Deceased but his
E oral testimony was that Madam Tam had introduced the E
Deceased as her boyfriend.
F F
(iii) Mr Chow and Ms Chow testified that they had visited
G Madam Tam in the Chinese New Year of 1995 and resided at G
the Premises. The photo exhibited of Ms Chow, however,
H H
provided no support. Ms Chow was in outdoor gear showing
her and the 5th Uncle in the Premises. That picture could
I I
have been taken when she was stopping by to visit the
J Premises. I place no weight on their evidence in this respect. J
K K
143. Both Madam Ng and Mr Wong do not appear to have any
L interest in this suit and have no reason to lie. Madam Ng who had L
returned to reside in Shanghai specially returned to Hong Kong to give
M M
evidence in this case. She gave evidence in a direct way that bespoke of a
N female “kaifong” regularly having chitchats with a friend. She gave clear N
explanations as to time frames. Mr Wong was also a straightforward and
O O
honest witness. I am satisfied from the evidence of these 2 witnesses that
P Madam Tam had resided in the Premises since about 1995. P
Q Q
144. However, in what capacity did Madam Tam reside there? It
R is of interest to note that those 2 independent witnesses gave different R
S
descriptions of the Deceased‟s relationship to Madam Tam — “husband” S
(married for a second time) and “boyfriend”. The former was a lie.
T T
Madam Ng often told Madam Tam that “it did not look good” to cohabit
U U
V V
由此
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A A
with the Deceased and asked Madam Tam to get married. Sharing her
B B
own experience, Madam Ng told Madam Tam that without a registered
C marriage, problems could arise when probate/letters of administration C
needed to be applied for. To that, Madam Tam replied that if the
D D
Deceased did not propose how could she register a marriage?
E E
145. In considering credibility and the proper inferences to draw,
F F
I have taken into account the following matters :
G G
(i) No defence witness could testify as to signs of cohabitation
H (e.g. joint occupation of a room or a double bed). Rather, H
Robert testified that such signs were absent. (He usually
I I
paid respect to his grand parents‟ memorial which was placed
J
at the back of the premises. To do so he had to walk past all
J
the rooms of the Premises. The premises were fairly small
K and he had a clear view of all the rooms of the Premises in his K
visits.) Whilst Madam Tam cared to exhibit photos of her
L L
family visiting Hong Kong, there was not a single photo
M showing her own presence inside the Premises in any year. M
(ii) It was within only a few months of her arrival in Hong Kong
N N
that Madam Tam, for what seemed to be a quarrel over a
O small matter, decided to enter into cohabitation. O
(iii) Her different declarations to Madam Ng and Mr Wong about
P P
the Deceased‟s being her husband and boyfriend respectively
Q showed her own uncertainty as to her relationship with the Q
Deceased.
R R
(iv) She had the nerve to enter into cohabitation for years and yet
S none to suggest marrying despite the repeated advice of S
Madam Ng.
T T
U U
V V
由此
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A A
(v) She could not explain what prompted the marriage after
B B
6 years of cohabitation.
C C
(vi) The marriage certificate stated her pre-marriage address to be
D her mother‟s place. Madam Tam explained that in D
accordance with Chinese custom, the bride and groom should
E E
not be residing at the same place before marriage.
F (vii) The death certificate of the 5th Uncle shows that Madam Tam, F
being the informant, was described as his cousin.
G G
I am not satisfied that Madam Tam had been cohabiting with the Deceased.
H H
It was possible for her to be present as a mere occupant since there are 3
I rooms in the Premises. I
J J
146. There is some hint in Robert‟s evidence that Madam Tam
K
might have resided at the Premises as a health carer for the 5th Uncle. K
L
During a visit in 1999 he saw a lady taking care of the 5th Uncle at the L
health care clinic. He saw the lady again at the Premises in 2002 whom
M M
the Deceased introduced as a health care worker. On each occasion he
N
gave her $100 as tips. He had not visited Hong Kong after 2002. He N
could not associate the lady with Madam Tam until seeing her in Court.
O O
P
147. I am satisfied on the evidence that Madam Tam was an P
accounts supervisor earning a much higher salary than a health care worker.
Q Q
However, I find Robert to have accurately and honestly reported what had
R happened. I find that he did not deliberately conceal the identity of R
Madam Tam because he only saw her twice before the trial and for
S S
5 minutes on each occasion. I find that he was genuinely mistaken as to
T the role of Madam Tam. That was not surprising because the undisputed T
U U
V V
由此
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A A
evidence was that the family members in the USA including Robert did not
B B
know about the marriage of the Deceased and Madam Tam until about
C 2002/2003. I am not surprised that Madam Tam was never introduced to C
Robert as the Deceased‟s cohabite or the 6th Aunt during the lifetime of the
D D
Deceased. Madam Tam‟s witness statement was completely silent as to
E any visit by Robert. Given this low profile which the Deceased and E
Madam Tam kept as to their relationship or marriage, it would not be
F F
surprising that Robert could not detect Madam Tam‟s occupation in the
G Premises or her role as a cohabitee. G
H H
148. The late disclosure of the marriage was most
I incomprehensible given the close relationship between the Deceased and I
his family members in the USA. The Father had remarried in 1990 and
J J
informed the Uncles in one of the family letters. There was no reason
K why the Deceased would not similarly disclose this important event in his K
life to his family members earlier.
L L
M 149. Whilst satisfied that Madam Tam had resided at the Premises M
since about the end of 1994/early 1995, I am not satisfied that her
N N
relationship with the Deceased was one of cohabitants before the marriage
O in 2000. The Deceased had a licence to occupy the Premises for life; so O
during that licence period, he could permit anyone to occupy the Premises.
P P
I do not think he was purportedly exercising the right of an owner. Peter,
Q learning of Madam Tam‟s presence in 2002/3, did not evict her. I find Q
R
that she was there through the licence of the Deceased and, later, Peter.
R
S 150. If I am wrong and that Madam Tam had resided at the S
Premises in the capacity of cohabitee, I am still not satisfied that she (or
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even the Deceased) had since the necessary intention sufficient to establish
B B
adverse possession. In Wong Tak Yue v. Kung Kwok Wai [1998] 1
C HKLRD 241, the Court of Final Appeal held that a person claiming to be C
in adverse possession must be shown to have both possession and the
D D
requisite intention to possess. It was the intention of the squatter that was
E essential. The burden was on him to establish his intention to exclude the E
whole world: including the owner of the land. Where the occupier had
F F
made self-serving statements as to what was his intention, whether during
G the period of occupation or when challenged in legal proceedings, the court G
should approach them with some scepticism. The courts would scrutinize
H H
the circumstances in which they were made and would give them such
I weight if any as they might deserve. Conversely, where the occupier had I
made statements as to what was his intention and such statements were
J J
against his interest, the court should usually accord to them considerable
K K
weight.
L L
151. In her pleaded case (see her particulars by letter), Madam
M Tam‟s occupation was always “with the 5th Uncle and the Deceased” to the M
N
exclusion of the registered owner. She could not have the intention to
N
oust the Deceased who had a licence and invited her to reside there. When
O
asked who she thought allowed the 5th Uncle to live there, Madam Tam O
P
said that it was not a question of allowing or not. The 5th Uncle and the P
Deceased were brothers and not married. They lived with Peter‟s mother
Q Q
and a maid. After the mother passed away the 2 brothers lived together.
R I asked her if she could oust the 5th Uncle. She did not give a direct R
answer but queried why she had to. She stated in re-examination that it
S S
was out of love and affection that the 5th Uncle was allowed to stay there.
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152. In my view, irrespective of her reasons, Madam Tam could
B B
not have the necessary intention to oust the whole world including the 5th
C Uncle before his death in 2000. C
D D
153. Further, as I have analyzed in Section G under general
E credibility, I find that Madam Tam‟s belief was that she only had a life E
interest and continuous maintenance from the nephews. That was a clear
F F
expression of her intention against her interest.
G G
J. 1999 : the Deceased’s Proposal of Marriage to Madam Tam and
H His Representation that He Was the Owner H
I 154. At the end of 1999, when the Deceased proposed to I
Madam Tam, it was the first time when the Deceased informed her as to
J J
the beneficial status of the Premises and the 1986 power of attorney. (Prior
K to this, she just assumed that the Deceased was the beneficial owner of the K
Premises because he was “the head of the family”.) She asked for proof.
L L
The Deceased gave her some family letters, telling her that she would
M understand from those letters his relationship with Peter; that Peter was M
pure by nature and he would not take what did not belong to him.
N N
O 155. One does not really understand why the Deceased suddenly O
wanted to get married until Madam Tam testified on her son‟s application
P P
for right of abode in Hong Kong. Mr Chow was then residing at the
Q Premises but he did not know about the basis of his application. This was Q
R
confirmed by Madam Tam. As Madam Tam was not a permanent
R
resident then, the basis of the application was the Deceased‟s status in
S S
Hong Kong.
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156. That made sense. Back in 1999 the public‟s perception of
B B
whether a child could have right of abode through his parent(s) was a hot
C topic. Article 24 of the Basic Law was under scrutiny by the Court of Final C
Appeal and subsequently subject to the interpretation by the Standing
D D
Committee of the National People‟s Congress.
E E
157. I find that the Deceased wanted to help Mr Chow to apply for
F F
right of abode in Hong Kong by being his “parent”. So he proposed to
G Madam Tam at the end of 1999 which culminated in the marriage in the G
year 2000. However, I find the version on the Deceased‟s representation
H H
as to ownership difficult to believe for the following reasons :
I I
(a) The 5th Uncle was 9 years older than the Deceased. What
J was Madam Tam‟s basis for asserting that the Deceased was J
the head of the family?
K K
(b) Why would the Deceased need to go to such depth as to why
L the 1986 Power of Attorney was given to the 5th Uncle if all L
that the Deceased wanted to say was that the beneficial
M M
ownership was in him?
N (c) Her own evidence was that she disbelieved the Deceased and N
asked for proof. She was given some family letters
O O
(unidentified). If, as Madam Tam claims, the title deeds had
P all along in the Deceased‟s possession, why wouldn‟t the P
Deceased use those as proof instead?
Q Q
R 158. I am not satisfied that the Deceased had made the R
representation to Madam Tam as claimed.
S S
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K. 2000 : Delivery of Title Deeds by the Deceased to Madam Tam
B B
159. According to Mr Chow, in April 2000 (2 months after the
C C
marriage), the Deceased and he went to the bank to close the safe deposit
D box and retrieved the title deeds. At home, the Deceased then handed to D
Madam Tam the title deeds of the Premises with these words :
E E
“This property was purchased wholly with my own money, just
F F
that it was registered in Peter‟s name. He is my gratuitous
trustee. He will not come back to take it, and dare not to take it,
G G
and cannot come back to take it. He does not even have the
H title deeds. Anyhow, this nephew was pure in nature since H
young. It was I who raised him up. Now I give the Premises
I together with the title deeds to you as a gift. From today I
onwards, this property is yours. You can live in it in peace.”
J J
(This will be called “the retrieval and delivery incident”.)
K K
L L
160. At the time the Deceased handed her the title deeds, he also
M gave her some letters from Peter, Tommy and their Father and thoroughly M
explained each letter to her.
N N
O 161. Mr Chow was able to describe the appearance of the title O
deeds. That tallied with the pile of original title deeds shown to the Court.
P P
He said he specifically remembered the incident because the Deceased
Q gave him a gold coin on that day. However, given my findings regarding Q
his credibility on the tearing up exercise, I hesitate in relying on any part of
R R
his evidence without independent proof.
S S
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162. Neither can I believe Madam Tam. If the Deceased had
B B
already asked her to read the letters in 1999, why was it necessary to
C explain it to her again in 2000? C
D D
163. Assume I am wrong and the retrieval and delivery incident
E did occur. The Deceased had lived for a long time in Hong Kong. What E
made him believe that the mere handing over of the title deeds without an
F F
assignment or other document would give title to Madam Tam? That
G state of mind was wholly inconsistent with what happened in 2003 when G
he and Madam Tam asked Peter to transfer the Premises back. I am not
H H
satisfied that the Deceased was exercising a right of ownership over the
I Premises. If he had ever handed over the title deeds to Madam Tam, it I
was just for safe custody.
J J
K L. 2003 : the Deceased’s Demand for Transfer of Ownership from K
Peter
L L
164. There is no dispute that in 2003 the health condition of the
M Deceased deteriorated to the extent that he had mobility problem. M
Madam Tam was worried about what would happen if she was left alone
N N
and the title deeds were in Peter‟s name. The Deceased allegedly made
O O
3 phone calls to Peter in February/March 2003 asking Peter to write a
P
power of attorney to Madam Tam and transfer the legal ownership to the P
Deceased/Madam Tam. Peter allegedly promised repeatedly that the
Q Q
Premises were theirs and he would comply with their request; and that he
R would take care of Madam Tam in future. In the 3rd telephone call, R
Madam Tam took over the conversation and told Peter that they had
S S
financial difficulties and wanted to sell the Premises. Peter allegedly told
T her that the Premises was theirs; if it were sold, the rent would be high; he T
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would discuss with Tommy; they promised to take care of their livelihood
B B
so that they did not have to sell the Premises.
C C
165. The Deceased had considered making a will to devise the
D D
property to her. Upon learning that the solicitor‟s fees for preparing a
E will would be $5,000, the Deceased gave up the idea. Peter did not E
execute any power of attorney but just sent cheques since 2003. She
F F
stopped pressing on the issue.
G G
166. If Madam Tam‟s version is correct, she could not explain the
H H
following :
I I
J (a) Why were the cheques made out to her and not to the J
Deceased? She claimed it was because the Deceased had
K K
asked Peter to sign an authorization letter to Madam Tam for
the transfer of the Premises.
L L
(b) Why were the cheques made out by both Peter and Tommy
M M
well before the 2003 telephone calls? Even on the limited
documentary evidence, Peter had been sending cheques to the
N N
Deceased as early as 2001 and Tommy in 2002. It cannot be
O suggested that Tommy had any ulterior motive in doing so or O
otherwise expected the subject matter of the 3 telephone calls
P P
as alleged by Madam Tam to be raised. Both brothers even
Q increased the monthly maintenance after learning of Madam Q
Tam‟s existence.
R R
(c) How would the worry of Madam Tam that she might be left
S alone whilst title deeds remained in Peter‟s name be alleviated S
if she were just left with the cheques but not an Assignment in
T T
her favour?
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B
(d) How could the issue of getting premises with a lift be solved?
B
(e) Why did the Deceased do nothing for the remaining 4 years
C C
before his death in the light of Peter‟s seeming “delaying
D
tactics”? There was not even an assertion from Madam Tam D
that the Deceased had written to Peter to request or demand
E for the return of the Premises. E
(f) The 5th Uncle had mobility problem in 1999. Why wasn‟t
F F
the idea of getting Premises with a lift raised then?
G G
167. Peter, on the other hand, says that the 3 telephone calls were
H H
for the following purposes :
I I
(a) From the Deceased (in about 2003) telling him about the
J marriage. Madam Tam got on the phone but Peter could not J
understand her. There was nothing about finance or the
K K
Premises.
L (b) From the Deceased (in about 2003) asking Peter to change the L
recipient of the cheques to Madam Tam. Madam Tam also
M M
got on the phone but Peter could not understand her.
N (c) The last phone call was from Madam Tam when she (through N
an interpreter) informed Peter about the death of the
O O
Deceased.
P P
168. Both Robert and Tommy say that the Deceased had never
Q Q
once mentioned that he had requested Peter to transfer the Premises back
R to him. I give little weight to this. Robert had not returned to Hong R
Kong after the alleged demand for transfer had been made. As for
S S
Tommy, I cannot see why the Deceased needed to talk to him about this
T because Tommy was not the registered owner. T
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169. Madam Tam used Putonghua which Peter could not catch.
B B
There could not have been such substantial discussion between them. I
C accept Peter‟s version as to what had happened. I am not satisfied that C
the Deceased or Madam Tam had asked Peter to transfer the Premises back
D D
to him or her.
E E
170. As to the monthly maintenance, Mr Chong criticized Tommy
F F
for just producing the carbon copy cheques for March 2002 to June 2007
G but did not obtain copies from the bank. I do not regard the former as of G
any less weight than the latter. Looking at the carbon copy cheques, they
H H
were not in consecutive cheque numbers and appeared to have been issued
I in the ordinary course month after month. I accept those cheques were I
genuinely issued by Tommy to the Deceased.
J J
K 171. Insofar as Peter was concerned, he could only produce K
2 cheques dated 12.8.2001 and 12.2.2002 for the sum of US$3,000 and
L L
US$2,500 respectively. All the remaining cheques for US$200 or
M US$300 were issued since the beginning of 2003. The payment record M
for about 16 months from 12.8.2001 to 4.1.2003 was missing. On the
N N
other hand, Madam Tam admitted in her witness statement that from
O March 2002 Peter had been sending US$200 every 2 months to the O
Deceased. Even if I am not satisfied on the evidence that Peter had been
P P
sending monthly payments for those 16 months the 2 cheques in 2001 and
Q 2002 would have well covered maintenance in the average of US$200 to Q
R
US$300 per month.
R
S 172. I am satisfied that the monthly maintenance was to honour S
Peter and Tommy‟s promise to the Uncles to take care of them for life and
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were not intended to prevent the Deceased/Madam Tam from pursuing the
B B
issue of re-transfer of the Premise.
C C
M. OTHER MATTERS
D D
173. There is other evidence such as payment of outgoings and
E E
renovation expenses for the building which Madam Tam relies on.
F Suffice to say that these payments/expenses are commonly paid by an F
occupier and are not evidence of assertion of ownership.
G G
H 174. Mr Chong has also confirmed that Madam Tam‟s interest has H
merged into her status as administratrix of the Deceased. She is not
I I
relying on her contribution or investment as a wife to claim any interest in
J the Premises. J
K K
N. FINDINGS ON ADVERSE POSSESSION
L L
175. Madam Tam went into possession at the end of 1994/early
M 1995 but her status as cohabitee could not be established. Her status as M
occupant was referable to the Deceased but subsequently with the
N N
knowledge and implied licence of Peter.
O O
176. The marriage in 2000 was prompted by the Deceased‟s wish
P P
to help Mr Chow apply for right of abode in Hong Kong. The marriage
Q was not disclosed to the family members in the USA until about 2002/3. Q
R R
177. I am not satisfied that the Deceased had represented to Madam
S Tam that he was the beneficial owner in 1999, or that the retrieval and S
delivery incident did occur. If he had ever handed over the title deeds to
T T
her, it was just for safe custody.
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178. The 3 telephone calls took place as Peter described, namely,
B B
the Deceased told Peter about his marriage and requested him to issue
C cheques from then on to Madam Tam because of his mobility problem. C
The last call came from Madam Tam who informed Peter about the death
D D
of the Deceased. There had never been any demand/request for transfer
E of the Premises back to the Deceased or Madam Tam. E
F F
179. There had been monthly maintenance from Peter and Tommy
G to the Deceased since 1984 even before the 3 telephone calls. Their G
cheques were later issued to Madam Tam as per the Deceased‟s request.
H H
Peter and Tommy honoured their promises to take care of the Uncles until
I they passed away. I
J J
180. Madam Tam‟s possession had always been with the 2 Uncles.
K She did not have the intention to evict the 5 th Uncle before his death in K
2000. She believed, though mistakenly, that she could only occupy the
L L
Premises for life and receive continuous maintenance from the nephews.
M It was clear expression of her intention against her interest. She has M
failed to show that she had been in possession for the requisite 12 years
N N
with intention to dispossess the whole world.
O O
181. The licence to occupy was revoked upon the death of the
P P
Deceased. Peter‟s notice to quit to Madam Tam had expired. Peter can
Q recover possession of the Premises. Q
R R
O. MESNE PROFITS
S S
182. Madam Tam has remained as a trespasser after 31.8.2007
T upon expiry of the notice to quit given by Peter. She has to pay mesne T
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profits for her occupation. Unfortunately, there is no evidence as to
B B
market rent for the Premises. In the premises, the mesne profits to be
C paid by her would only be nominal in the sum of $100 up to the date of C
this judgment.
D D
E Conclusion E
F 183. I give judgment as follows : F
G (i) The 1st and 2nd defendants shall deliver vacant possession of G
the Premises to the plaintiff within 28 days from the date of
H H
the handing down of this judgment.
I (ii) The 1st and 2nd defendants shall deliver all title deeds to the I
Premises to the plaintiff forthwith.
J J
(iii) The 1st and 2nd defendants shall pay mesne profits to the
K plaintiff for her occupation of the Premises from 1 September K
2007 to the date of this judgment in the nominal sum of $100.
L L
(iv) The amended counterclaim is dismissed.
M M
184. I make an order nisi that :
N N
(i) Costs shall be to the plaintiff to be taxed if not agreed.
O O
(ii) There shall be payment out of the court sum(s) paid in by the
P plaintiff as security for costs forthwith. P
st nd
(iii) The 1 and 2 defendants‟ own costs be taxed in accordance
Q Q
with the Legal Aid Regulations.
R Any application to vary must be made by summons within 14 days of the R
date of handing down of this judgment.
S S
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185. I am most grateful to counsel for their thorough preparation
B B
and assistance to the Court.
C C
D D
E E
(Queeny Au-Yeung)
F Deputy High Court Judge F
G G
Ms Elsie Yiu, instructed by Messrs Christine M. Koo & Ip,
for the Plaintiff
H H
Mr K.M. Chong, instructed by Messrs Raymond & Chan, assigned by the
I Director of Legal Aid for the Defendants I
J J
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
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