IN THE DISTRICT COURT OF
THE HONG KONG SPECIAL ADMINISTRATIVE REGION
FCMC 10998 of 1999
Coram: HH Judge Sauders
Date of Hearing: 20, 21 & 22 November 2001
Date of Judgement: 1 March 2002
1. The parties were married on 23 May 1990 in North Rockhampton Australia. There are two children of the marriage, both boys, now aged 9 and 5. The papers in the case have been divided into three bundles: A# contains the pleadings and affidavits, and some of the other exhibits; bundles B# and C# contain the exhibits. I have used these expressions when referring to the papers. Unless otherwise indicated all references to money in this judgement are to Hong Kong dollars. Although a decree nisi has been made I will, for convenience, refer to the parties as husband and wife. The husband's father features in the proceedings in a substantial way. I shall refer to him as "C Snr".
2. Unhappy differences arose between the parties, first, in May 1997, when the husband left the matrimonial home and stayed away for about a year. He returned home but the problems resurfaced and in September 1999 the wife left the matrimonial home with the children. She has not returned, and in November 1999 issued a petition based upon unreasonable behaviour.
3. The husband filed an answer and cross petition, but the matter of the divorce was compromised and on 21 September 2000 a decree nisi was made on an undefended basis. The marriage is therefore one of about 10 years in total during which the parties lived together for about 8 years.
4. Following the receipt of a Social Welfare report, by consent, custody of the children of the marriage was granted to the wife, reserving reasonable access to the husband. In March 2000, by consent, the husband was ordered to pay maintenance pending suit to the wife for herself and the children in the sum of $10,000 per month. There have been problems in payment and it was necessary for a judgment summons to be issued to secure payment.
The major issue:
5. Now the parties come to resolve outstanding issues of ancillary relief under the provisions of the Matrimonial Proceedings and Property Ordinance Cap 192 (MPPO).
6. Apart from the usual issues that arise in such cases, there are two major issues raised. First, the husband is the registered proprietor of a number of properties, including the former matrimonial home. It is his case, disputed by the wife, that he holds all of the property he has in trust for his father and that he has, in fact, no assets at all. He even says that the car that is in his name in Hong Kong is beneficially owned by his father.
7. The second issue is as to how the court should deal with an interest the husband has in a discretionary family trust established by his father.
The family history:
8. After the parties were married they remained in Australia. From May 1990 to March 1992 the wife worked as a waitress in a Chinese restaurant in Brisbane. There is no evidence as to just where the husband worked during this period, but no suggestion that he did not work and provide for the family in the usual way. For a period of 6 months between April 1991 and March 1992 the husband stopped work and undertook a marketing course. During that period the wife was the sole income earner for the family. She stopped work when she became pregnant with the first child and became a full time housewife.
9. For a period from early 1995 to April 1996 the husband operated a cafe. He was also involved in a restaurant with his brother but the evidence as to this was not at all clear. The wife says that she worked with him but did not receive any income. She was however able to draw freely on the parties joint bank account. There is no suggestion that she did so other than to support the family. She ceased work on becoming pregnant with the second child in April 1996.
10. In August 1996 the family returned to Hong Kong and the wife returned to work, this time as a sales assistant in a shop. The husband appears to have worked as a real estate salesman until November 1999, but again his evidence on this aspect of the marriage is not clear.
The law as to resulting trusts and the presumption of advancement:
11. The two relevant principles are the presumption of a resulting trust to the real purchaser and the presumption of advancement. I can do no better than to set out these principles from Snell's Equity 13 ed, 2000, by John McGhee, paras 9-07,9-11 & 9-13:
"1. Presumption of resulting trust to real purchaser
||(a) The principle. Another common sense case of an implied or resulting trust is where on a purchase property is conveyed into the name of someone other than the purchaser.
"The clear result of all the cases, without a single exception, is, that the trust of a legal estate, whether freehold, copyhold or leasehold; whether taken in the names of others without that of the purchaser; whether in one name or several; whether jointly or successive, results to the man who advances the purchase-money. This is a general proposition supported by all the cases, and there is nothing to contradict it; and it goes on a strict analogy to the rule of common law, that, where a feoffment is made without consideration, the use results to the feoffor."
The doctrine applies to pure personalty as well as land."
"2. Presumption of advancement
||As the doctrine of resulting trusts is based upon the unexpressed but presumed intention of the true purchaser, it will not arise where the relation existing between the true and nominal purchaser is such to raise a presumption that a gift was intended. This presumption of advancement, as it is called, applies to all cases in which the person providing the purchase-money is under, or expects to be under, an equitable obligation to support, or make provision for, the person to whom the property is conveyed, i.e. where the former is the husband or father of, or stands in loco parentis to, the latter."
||(b) Legitimate child. Similarly, if a father buys property and has it put in the name of his son or his daughter, prima facie it is a gift to the child. Again where the father pays the premiums of an insurance policy which he holds on trust for his son, the payments will prima facie be taken as advancements and not a payments made qua trustee in order to maintain the trust property on which he could claim an indemnity."
12. These are presumptions which are rebuttable by evidence of the actual intention of the purchaser. To rebut the presumptions, the acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration: see Snell, para 9-16. The court must consider all the circumstances of the case, so as to arrive at the purchaser's intention; it is only where there is no evidence to contradict it that the presumption of a resulting trust, or of advancement, as the case may be, will prevail. The solicitors for both parties cited a number of authorities. But both were agreed as to the principles to be applied, namely those that I have set out above. I accept Mr Clements's submission that most of the cases cited are really nothing more than examples of the application of the appropriate principles.
13. Mr Wong relied heavily on the decision of Pang J in Overseas Trust Bank Ltd. v Lee See Ching, John MP 820/1992. That is a case where the father of the defendant kept a highly detailed diary of his activities. It was a contemporaneous record of his state of mind. That C Snr did not keep such a diary is of no assistance to the husband. There is virtually no contemporaneous record of the state of mind of either C Snr or the husband.
14. In the course of the judgement the learned judge said:
"Another category of evidence shedding light on the issue or in appropriate cases, of rebutting the presumption, would be the evidence from the alleged beneficiary himself."
15. That is plainly right, but it is a statement that must be carefully considered, and applied with caution. Where, as here, the husband seeks to rebut the presumption, in order to remove property from the ambit of matrimonial legislation, a self serving statement, made only in evidence after the issue has arisen, that no gift was intended, will carry no weight at all. On the other hand, the statements of the husband, if made prior to the issue between husband and wife arising, will be relevant to determining the donor's and the donee's intention. If actions of the husband, performed after the issue between husband and wife has arisen, are inconsistent with a trust in favour of the father, they will be relevant and will carry weight against the husband. But his actions, after the issue have arisen, if consistent with a trust in favour of the father will carry no weight at all for they are entirely self serving. The same principle must apply to the statements and acts of C Snr.
16. In the course of argument Mr Wong, for the husband, began a submission to the effect that the property was held by the husband for C Snr only for tax planning reasons. The submission echoed an assertion made by the husband in para 15 of his 7th affidavit (A# p 212). It also echoed an assertion made by C Snr in his 2nd affidavit (A# p 221-2) that all of the property in the trust is in fact owned jointly by him and his wife. I cautioned Mr Wong to be careful before he proceeded with the submission as I was concerned that he may not be fully alive to the consequences of such a submission. He appeared to have abandoned it in the course of the hearing...