IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

SUIT NO. 1158 OF 1997

_________________
BETWEEN
SZE Petitioner

and

YIU Respondent

AND BETWEEN
YIU Applicant

and

SZE 1st Respondent

LEE 2nd Respondent

_________________

Coram : H.H. Judge Bruno Chan in Chambers

Date of Hearing: 18-21, 25-26, 28-29 January, 12-14, 24-28 May, 10-11,
29-30 June, 2 July, 16-18, 20, 27-28 August and 23
November 1999
Date of Handing Down of Judgment : 18 January 2000

_________________
 -2-

JUDGMENT
_________________

This is the Respondent Husband (Applicant)’s application

under Section 17 of Matrimonial Proceedings and Property Ordinance to
set aside a disposition of about $8.6 million by the Petitioner Wife (1st
Respondent) to her mother (2nd Respondent) which he says was the sale
proceeds of their matrimonial asset.

First, a few words about the strange heading as appeared in

this proceedings where the Petitioner is also referred to as 1st Respondent,
whilst the Respondent is also called the Applicant, and the Mother-in-law
as 2nd Respondent. According to the Matrimonial Causes Rules, the party
who issues the petition is the petitioner whilst the other party, i.e. the
spouse, is the respondent, whereas Rule 13 specifically provides that
where a petition alleges that the other party to the marriage has
committed adultery or has been guilty of an improper association with a
named person, that named person shall be made a party to the
proceedings unless the court otherwise directs. There is no rule for
making any other named person involved either in custody or ancillary
relief applications a party to the proceedings. Such person, for instance,
may apply under Rule 92 for custody without obtaining leave to intervene
in the cause or being made a party to the proceedings, whereas Rule 69
provides certain persons such as the guardian of any child of the family or
any person who has obtained leave to intervene in the cause may apply
for ancillary relief for a child without any specific provision for that
person to be made a party to the proceedings.
 -3-

In the present case the Section 17 Application for avoidance

of disposition was taken out by the Husband who is the Respondent in the
cause as the Wife is the one who issued the petition and hence she is the
Petitioner. The Section 17 Application is part of the ancillary relief
proceedings between the parties in the cause and not some separate
proceedings which require a separate heading in which the Husband
becomes the Applicant and the Wife and the Mother-in-law respectively
the 1st and 2nd Respondent. It is true that Section 17 refers to the person
who brings the proceedings as “the applicant” and the person against
whom the proceedings are brought as “the other party”, such references
are used only in that Section and do not mean to infer a different title to
the parties originally named in the proceedings. The Mother-in-law in
this case could have been simply referred as “Intervening Party” or
“Intervener”. The present heading is extremely inconvenient and
confusing and there is simply no rule which allows this. As the heading
now stands, I will just refer to the parties as the Husband and Wife whilst
the Mother-in-law as Madam Lee in this judgment.

Background

The parties were married on 10th October 1993 and there is

one child of the marriage, a daughter born on 4 th October 1995 who is
now 4 years old. The Husband was a real property investor and a director
of an estate agency known as U P Agency Ltd. The other director of the
limited company was the Husband’s sister who used to run an estate
agency known as U P Agency until about June 1996 when it was
incorporated into U P Agency Ltd. The Husband was also a director and
shareholder of a real estate investment company known as JP Ltd. which
 -4-

he incorporated in 1990 with his father with each holding 1 nominal

share. After the marriage the Wife was made a director and shareholder
of the company also holding 1 share. She was all along in the insurance
business and was a manager in AIA during the marriage.

Prior to the marriage the Wife resided in a City Garden

property with her parents. The property was purchased in her name but
she alleges that it belonged to her mother Madam Lee and that it was
registered in her name because her mother wanted to make use of the
low-interest loan which the Wife was able to obtain from AIA.

After the marriage the Wife moved to live with the Husband
and his parents at a Beverly Hill property which was owned by JP.

In February 1996 a property at Flat A, 23/F, Block 11,

Provident Centre, No. 40 Wharf Road, Hong Kong (“The Provident
Centre Property”) was purchased in the sole name of the Wife for
$8,383,000. The provisional sale and purchase agreement was signed on
3rd February 1996 and the assignment was executed on 30th September
1996.

The property was later sold by the Wife in early 1997 for
$11,880,000. The provisional agreement for sale was signed on 16 th
January 1997 and the completion took place on 5 th March 1997. The net
sale proceeds of $8,600,000 was then put in the bank account of the
Wife’s mother Madam Lee.

On 17th January 1997 the Wife left the matrimonial home at

Beverly Hill after a heated argument with the Husband’s mother on the
evening of 16th January 1997. On 1st February 1997 she issued a petition
for divorce in the present proceedings based on the Husband’s behaviour.
The petition was dated 20th January 1997 and in it the Wife also sought
 -5-

custody of the daughter and general ancillary reliefs. The petition

became defended when the Husband filed an Answer and also cross-
petitioned for divorce based on the Wife’s behaviour. In his Answer the
Husband also sought custody of the daughter and ancillary relief
specifically for transfer and settlement of property order.

The proceedings were bitterly contested on all front and

there were numerous interlocutory applications, but for the present
purpose I shall only mention those that are more relevant.

On 12th May 1997 the Husband applied for an injunction

restraining the Wife from, inter alia, disposing of or otherwise dealing
with the proceeds of sale of the said Provident Centre Property. The
matter came before Deputy Judge Saunders on 27th May 1997 when the
Wife revealed that her mother Madam Lee was in fact the beneficial
owner of the property and that after its sale, the proceeds had been
returned to her mother.

As a result the hearing was adjourned to 19th June 1997 and

Madam Lee was ordered to be joined in the proceedings. At the same
time the Husband took out the present Section 17 Application for an order
that the disposition by the Wife to Madam Lee of the sale proceeds of the
Provident Centre Property be set aside. On 19th June 1997 after hearing
argument from the parties and Madam Lee who was also represented,
Deputy Judge Saunders granted the injunction against Madam Lee in
respect of the sale proceeds until further order. The net sale proceeds of
HK$8.6 million have since been frozen in an interest-earning bank
account under the name of Madam Lee pending the determination of the
Section 17 application.
 -6-

The Husband and Wife were eventually able to first settle

their dispute over the divorce when on 2nd June 1998 the decree of
divorce was granted to the Wife, and later on custody when it was granted
to the Wife on 9th  March 1999 with defined access to the Husband,
leaving only the Section 17 Application and the ancillary relief
application which I had originally directed to be heard together.
Unfortunately it turned out that the hearing of the Section 17 Application
had taken up so much of the time allocated for the trial of both matters
that it was agreed that the Court should give its decision on the Section 17
Application first whilst the ancillary relief hearing should be adjourned to
a later stage.

Both parties and Madam Lee have filed substantive

affirmations in the Section 17 Application and have given lengthy oral
evidence at the hearing, with final written submissions made to save time
and costs which, I understand, amount to more than $3 million in total.
There is one small episode, though, that I ought to mention. During the
course of her being cross-examined, the Wife suffered some sort of
nervous breakdown which required medical attendance. Instead of
adjourning the trial, it was agreed amongst the parties, and quite rightly
so, that Madam Lee should start and finish her evidence before the Wife
returned to complete her evidence. The medical report produced by the
Wife later confirmed her situation and was not challenged by the
Husband.

The Husband’s Case

The Husband’s case is that he and the Wife jointly purchased

the Provident Centre Property as their home as they intended to move
 -7-

from their Beverly Hill property to the Provident Centre which was close
to his office and that it was also more convenient to his mother who had
to go to the wet market to purchase grocery twice a day. He says
although there was no expressed discussion with the Wife as to their
respective share of interest in the property, as he had contributed about
$1.5 million towards the purchase price, legal costs and stamp duty, he
believes he should have 1/3 share in the property with 2/3 to the Wife.

He explains that the property was purchased in the name of

the Wife because she suggested to make use of the low-interest loan from
AIA to finance the purchase and that registering the property in her sole
name was the only way to obtain the loan.

Although the provisional sale and purchase agreement was

signed on 3rd February 1996, the Husband says that the completion date
was not until 30th September 1996, some 7½ months later because he
needed more time to sell his Beverly Hill property. When the time was
getting close to the completion date, he says he was advised by his
mother that his name should be added to the title of the Provident Centre
Property but the Wife refused because she said AIA would not allow it.
The completion of the purchase took place as scheduled on 30 th
September 1996 with the assistance of a loan of $3 million from AIA and
the sale proceeds of the City Garden Property, and the Wife was therefore
registered as the sole owner.

After the purchase the Husband says he learnt from a friend

who also worked at AIA that what the Wife had told him of not being
able to add his name to the property as a co-owner was not true. When he
raised the matter with the Wife, he says she would agree to add his name
only if he would pay her 50% of the difference between the purchase
 -8-

price and the then increased market price of $11 million, to which he
refused. This led to a heated argument between the Wife and the
Husband’s mother and as a result the Husband says his parents refused to
move to the Provident Centre Property and so the parties remained in the
Beverly Hill property.

The Husband believes that after the Wife had decided to

divorce him, she secretly took steps to sell the Provident Centre Property
without informing him and placed the sale proceeds with her mother with
the intention to defeat his claims for ancillary reliefs or to deprive him of
his fair share therein, which was the reason why he was not served with
the divorce papers until 17th March 1997, some 1½ months after the
petition was issued.

The Husband does not accept that the property was Madam
Lee’s investment as alleged by the Wife. He believes that although some
of the money for the purchase price might have come from Madam Lee’s
bank accounts, they actually belonged to the Wife, as was the case with
the City Garden property which was purchased in the Wife’s sole name.
He also denies the Wife’s allegation that his payment towards the
purchase price was repayment of money owed to Madam Lee whom he
says was merely a factory worker in the past with limited income and that
as she had been unemployed in recent years, she could not have afforded
an investment as substantial as the purchase of the Provident Centre
Property.

The Husband believes that the Wife, on the other hand, was
wealthy and that she had for years put most of her income in some bank
accounts in joint name with her mother to avoid tax liabilities, which was
also the reason why she had made her mother, who knew nothing about
 -9-

the insurance business, as one of her agents in order to divert some of her
clients to her mother’s name in order to earn more commissions. He
therefore believes that the Wife paid for her share of the purchase of the
Provident Centre Property from her money in the joint accounts with her
mother, and that since the property belonged to both he and the Wife, the
disposition of the net sale proceeds of $8.6 million by her to her mother
which took place after the filing of her divorce petition was clearly
intended to defeat his claims for ancillary reliefs against her in the
divorce proceedings or to deprive him of his fair share in the sale
proceeds and should therefore be set aside.

The Wife’s case

The Wife says that the Provident Centre Property was her
mother’s investment and that it was purchased in her name solely for the
purpose of making use of the low-interest loan which she could obtain
from AIA, as she had done before with the purchase of the City Garden
property by her mother. She insists that all the purchase money came
from her mother and that the alleged payments of the Husband were in
fact his repayments of money owed to her mother from some earlier
property investments which her mother participated through his
connection.

The Wife says prior to her marriage she used to reside with
her parents. She started to work as an insurance agent in late 1985 and
had since made regular contribution to her mother. In 1987 her mother
decided to move the family from their low cost public housing unit into a
Lei King Wan property which her mother purchased with her own
savings. In 1990 her mother sold the property for $1,238,000 and used
 - 10 -

the sale proceeds to purchase the City Garden Property for $1,490,000.
This time the property was purchased in the Wife’s name as she could
benefit from a low-interest staff loan from AIA.

After the marriage the Wife moved from the City Garden
property to the Husband’s home at Beverly Hill, but she continued to
contribute to her mother’s household. In addition to her job at AIA, the
Wife says she often had to assist the Husband in running his company JP
the main business of which was investing and speculating in real
properties. She says she had also regularly put part of her income in JP’s
accounts to meet the company’s expenses but as she was busy with her
work at AIA, she had to enlist her mother’s assistance from time to time
to do the banking for her, and that on some occasions when the Husband
was in need of money for his business, she would borrow for him from
her mother.

At the time of the purchase of the Provident Centre Property,

the Wife says that the Husband owed her mother about $1 million being
money which her mother had lent him as well as her share of profits and
principal from 2 earlier property investments which she had participated
through his connection but which he had since kept without repaying her.
The Wife says these investments involved a Robinson Place property
invested by the Husband’s uncle and which Madam Lee had contributed
20% towards the purchase price and for which her share of profit and
principal was $660,000, and another property in Provident Centre
invested by JP for which Madam Lee had contributed $200,000 and her
share of profit was $115,000.

The Wife says the Husband had however kept these monies
and was reluctant to repay Madam Lee. She says when her mother
 - 11 -

decided to purchase the Provident Centre Property, she saw it as a good

opportunity to get the money back from the Husband for her mother. She
therefore told the Husband about the matter to which he agreed to repay
her and it was also decided that they would view the property together
with his parents and sister pretending to the owners that they were going
to purchase the property as their home in the hope to bargain a good
price. She says the Husband and his family therefore knew it was her
mother’s investment which was also the reason why she put down her
mother’s address at City Garden in the provisional sale and purchase
agreement signed on 3rd February 1996 instead of her own address at
Beverly Hill.

The Wife further says that on 15th February 1996 when she
and the Husband attended at the solicitor’s office to sign the formal sale
and purchase agreement, the various payments made by the Husband
towards the balance of the down payment and the stamp duty were all
part of the repayment of the money which he owed her mother and not for
his share in the property.

As the Provident Centre Property was purchased for short-

term investment, the Wife says her mother then placed the property for
sale through newspapers advertisement in December 1996. Soon a
purchaser was found and the provisional sale and purchase agreement
was signed on 16th January 1997 with completion to take place on 5 th
March 1997, whereupon she just returned the net sale proceeds of $8.6
million to her mother and it certainly was not any disposition to defeat the
Husband’s claims for ancillary relief as alleged by him.

Madam Lee’s case

 - 12 -

The case of Madam Lee is essentially the same as the Wife’s

in that she was the beneficial owner of the Provident Centre Property.
She further says that she came to Hong Kong from China in early 1970
and had worked hard in the factory for many years to make a living. Her
son quitted school at an early age to work and was subsequently able to
form his own business when he would from time to time give her money,
and when her daughter i.e. the Wife started working in 1985 as an
insurance agent, she would also regularly contribute towards her
household. She says she herself worked in a garment factory in the 1980s
as a sample maker making expensive high-class fashion and was able to
earn $10,000 per month on average. She says she had lived thriftily and
was able to accumulate some savings over the years which she had put in
some joint accounts with her daughter on the advise of others for security
reason.

As the financial situation of her family improved, Madam

Lee says she decided to move her family out of their public housing unit
to their own home by purchasing a property at Lei King Wan for
$636,210 of which she paid $240,000 from her savings with the balance
by means of a bank mortgage.

In 1990 Madam Lee and her family moved to the bigger City
Garden property to improve their living standard. The property was
purchased in the Wife’s name because she had then become entitled to
low-interest staff loan from AIA, but Madam Lee says the purchase
moneys were all paid by her from the sale proceeds of her Lei King Wan
property and from her savings. She says the arrangement was that as her
daughter would assist her with the monthly mortgage payment, her
monthly contribution to the family was therefore reduced accordingly.
 - 13 -

This continued after her daughter had married and moved out of the City
Garden property until it was sold in 1996.

Madam Lee says in early 1996 she decided to invest in the

Provident Centre Property as she had been able to accumulate substantial
savings from her investment in foreign currencies. She intended the
purchase to be a short-term investment and would try to sub-sell the
property as a confirmor, which was the reason why the completion date
was unusually long in 7½ months’ time. She says that in case she could
not sub-sell the property and had to complete the purchase, she would
make use of the low-interest loan which her daughter could obtain from
AIA, which was the reason why she purchased the property in her
daughter’s name, and from the sale proceeds of her City Garden property
which she found to be too big for just her and her husband and which she
intended to sell in order to move to a smaller flat.

After the purchase of the Provident Centre Property, Madam

Lee says she then tried to sell it by placing advertisements in newspapers
and was able to find a good buyer in January 1997 for $11,880,000. She
says after the sale it was only natural for her daughter to return to her the
net sale proceeds of $8.6 million in which neither her daughter nor her
husband has any beneficial interest upon which a claim could be made in
their divorce proceedings.

The Law

Section 17 of Matrimonial Proceedings and Property

Ordinance provides:-
 - 14 -

(1) Where proceedings for relief under any of the relevant

provisions of this Ordinance (hereafter in this section
referred to as “financial provision”) are brought by a
person (hereafter in this section referred to as “the
applicant”) against any other person (hereafter in this
section referred to as “the other party”), the court may, on
an application by the applicant-
(a) :
:
:
:
(b) if it is satisfied that the other party has, with the
intention aforesaid, made a disposition to which this
paragraph applies and that if the disposition were
set aside financial provision or different financial
provision would be granted to the applicant, make
an order setting aside the disposition and give such
consequential directions as it thinks fit for giving
effect to the order (including directions requiring
the making of any payment or the disposal of any
property);
(c) :
:
:
:
and an application for the purposes of paragraph (b) shall
be made in the proceedings for the financial provision in
question.

(2) Paragraphs (b) and (c) of subsection (1) apply respectively

to any disposition made by the other party (whether before
or after the commencement of the proceedings for financial
provision), not being a disposition made for valuable
consideration (other than marriage) to a person who, at the
time of the disposition, acted in relation to it in good faith
and without notice of any such intention as aforesaid on the
part of the other party.

(3) Where an application is made under this section with

respect to a disposition which took place less than three
years before the date of the application or to a disposition
or other dealing with property which is about to take place
and the court is satisfied-
(a) in a case falling within subsection (1)(a) or (b), that
the disposition or other dealing would (apart from
this section) have the consequence, or
 - 15 -

(b) in a case falling within subsection (1)(c), that the

disposition has had the consequence,
of defeating the applicant’s claim for financial provision, it
shall be presumed, unless the contrary is shown, that the
other party disposed of the property with the intention
aforesaid or, as the case may be, is, with that intention,
about to dispose of or deal with the property.

(4) In this section-

“disposition” ( 財 產 處 置 ) does not include any provision
contained in a will or codicil but, with that exception,
includes any conveyance, assurance or gift of property of
any description, whether made by an instrument or
otherwise;
“the relevant provisions of this Ordinance” (本條例的有關
條文) means any of he provisions of sections 3, 4, 5, 6, 6A,
8, 11 (except subsection (6)) and 15; (Amended 69 of 1997
s.33)
and any reference to defeating an applicant’s claim for
financial provision is a reference to preventing financial
provision from being granted to the applicant, or to the
applicant for the benefit of a child of the family, or
reducing the amount of any financial provision which
might be so granted, or frustrating or impeding the
enforcement of any order which might be or has been made
at the instance of the applicant under the relevant
provisions of this Ordinance.

There is no dispute that the Wife’s payment of the sale

proceeds to her mother can be said to be a disposition within Section 17
and as it was made shortly before the Husband’s application, thereby
putting it within the 3 years’ period referred to under (3) of the Section,
the presumption is that the Wife disposed of the sale proceeds with the
intention to defeat the Husband’s claims for financial provision or his
share in the sale proceeds, unless the contrary is shown. The burden that
this is not the case is therefore on the Wife. However, if Madam Lee was
in fact the sole beneficial owner of the Provident Centre Property, she
must be entitled to its sale proceeds, and therefore it can not be a Section
 - 16 -

17 disposition to be set aside. The consideration of Section 17 is only

necessary if I find that either the Wife or the Husband is beneficially
interested in the property. On the other hand, since the Provident Centre
Property was purchased in the Wife’s name and in the absence of a
declaration of trust, the burden is on the Wife to prove she was merely
holding the property in trust for her mother as alleged. It is apparent that
there is quite an unusual amount of issues that need to be resolved in
particularly in view of the intricate financial relationship and various past
dealings between the 3 parties concerned before I can get to the truth of
the matter. I shall now first examine the parties’ evidence in details on
the circumstances of the purchase of the property.

The Issues

There is an unusually large number of issues in this case but

the main issues are:-

1. Was the Provident Centre Property the joint

investment of the Husband and Wife as their home ?

2. If not, did the Husband contribute towards the

purchase price of the property thereby acquiring an
interest therein ?

3. If not, was the property the sole investment of the

Wife or her joint investment with Madam Lee ?

4. If so, was the Wife’s payment of its sale proceeds to

Madam Lee a disposition under Section 17 which
should be set aside ?

I shall now consider the evidence of each issue in details.

 - 17 -

The Husband’s evidence given in chief is that he intended to

move his family from Beverly Hill to the Provident Centre as it was close
to his office with less than 5 minutes’ walk and more convenient to his
mother who had to purchase fresh food at the wet market in North Point 2
to 3 times each day after the birth of his daughter. He says he found the
Provident Centre Property through his sister’s real estate agency U P
Agency and had viewed the property twice with the Wife, his mother and
sister as his agent. However, upon cross-examination, the Husband
admitted that before moving with his family to the matrimonial home in
Beverly Hill after his marriage in 1993, he and his family all along lived
in North Point and that he also worked in his sister’s U P Agency in
North Point. He also admitted that when he was residing in Beverly Hill,
he would drive to work at U P Agency which had very flexible working
hours and that he could use a car park space in City Garden which was
owned by his company JP. As submitted by Miss Tsui for the Wife, this
reason does not appear very satisfactory.

If however the 1st reason given by the Husband may not

sound very convincing, I have more difficulty accepting his explanation
for his 2nd reason that his mother had to go to the wet market 2 – 3 times
each day which caused him to decide to move his home to the Provident
Centre Property. Consider his following evidence given on cross-
examination:-

Q: After birth of your daughter, why did your mother

have to go the wet market 2 – 3 times each day ?
A: After giving birth to daughter, my Wife worked
only half day, she would bring her work home, so
my mother had to buy food for her, such as fresh
fish which was only available in the afternoon,
because my mother wanted to take good care of my
Wife after giving birth.
 - 18 -

Q: You mean after giving birth, it is traditional for

Wife to eat nutritious food ?
A: Yes.
Q: But it would be for only 1 month ?
A: Because my Wife’s health was not very good.
Q: If fresh fish were only available only in the
afternoon, why not just buy in the afternoon ?
A: But in the morning mother had to buy bread as
breakfast for my Wife and other food.
Q: What did your Wife eat for breakfast ?
A: Bread.
Q: So your mother would go to Chung Yeung Street
market in the morning just to buy bread for your
Wife?
A: No, sometimes she would buy other food.
Q: An average family would go shopping in market
once a day ?
A: I agree normally once, but sometimes twice is not
abnormal.
Q: But why 3 times ?
A: I only said 2 – 3 times, I don’t know as I wasn’t the
one who go to the market.
Q: You have given 2 reasons for moving house , one is
marketing 3 times a day, 2nd reason is close to office,
so why 3 times a day ?
A: Because after birth of daughter, it was necessary to
buy fresh food to make congee for her.
Q: Your daughter was born in October 1995 ?
A: Yes.
Q: And the provisional sale and purchase agreement
was in February 1996 ?
A: Yes.
Q: At that time daughter was just over 3 months old.
A: Yes.
Q: You are saying your mother had to buy fresh food
to make congee for 3 months old daughter ?
A: Perhaps I answered wrongly, it was after daughter
started to eat congee that my mother had to go to
 - 19 -

market 3 times a day, but before that, only 2 times a

day.
Q: But it was well after the purchase in February 1996
that daughter only started to eat congee ?
A: Yes.
Q: And by February 1996 daughter was still on milk
only ?
A: Yes.
Q: So what you said about mother having to go to
market to buy fresh food to make congee for
daughter is not true.
A: I agree, it was a slip of tongue.
Q: So the reason for moving house because mother had
to go to market 2 – 3 times each day is not true.
A: Yes, not true before daughter started to eat congee.

I find it difficult to believe the Husband’s evidence

concerning his mother’s marketing habit, in particularly of the fact that
the parties at that time also had the use of a domestic helper. On the
whole, I find the Husband’s reasons for purchasing the Provident Centre
Property unconvincing. However, it does not necessarily follow that he
had not acquired any interest in the property. It is necessary to consider
the other evidence relating to the purchase of the property.

It is not in dispute that on 3 rd February 1996 the Wife, the

Husband and his mother and sister attended at the Provident Centre
Property to view the premises in the presence of the owners and their
agent Ms Wong of City Property Agency, and that the provisional sale
and purchase agreement was signed by the Wife in her sole name on the
spot when she paid an initial deposit of $500,000 by means of her
personal cheque drawn on her Citibank account, into which the Husband
had paid $200,000 for the initial deposit. The Husband’s evidence is that
the property was recommended to him by U P Agency and he therefore
 - 20 -

brought his family to view the property on that day with his sister acting
as his estate agent. He says he had intended to purchase the property
through his company JP but at the time of the signing of the provisional
sale and purchase agreement, the Wife suddenly suggested purchasing the
property in her sole name in order to take advantage of the low-interest
AIA loan. He says it was the first time he learnt about such a staff loan
of AIA but he thought as they were husband and wife, he therefore let the
Wife purchased the property in her sole name. The completion date was
however put some 7½ months later on 30th September 1996 as he says he
needed time to sell his Beverly Hill Property to finance the purchase of
the Provident Centre Property.

I find this Husband’s explanation as to why the property was

purchased in the Wife’s sole name inconsistent and unsatisfactory. It is
clear from his evidence that he had been looking for a property in North
Point for quite some time with the intention to re-locate his family. It was
to be an important investment and his evidence is that he had decided to
purchase the property through his company JP, as he had done with
almost all his major real estate investments since the incorporation of JP,
and that he had held discussions with his family members about the
intended move and that it was an unanimous decision. Surely then when
he went to view the property on 3rd February 1996, he would have been
fully prepared and ready to sign the provisional sale and purchase
agreement in JP’s name and to pay the initial deposit through JP’s
account. Yet the evidence reveals that it was only on 5th February 1996,
two days after the provisional sale and purchase agreement that he made
the first of his alleged contribution towards the purchase price by
depositing $200,000 into the Wife’s Citibank account. And why did he
allow the Wife to put down her mother’s City Garden address in the
 - 21 -

provisional sale and purchase agreement ? The Husband’s following

explanation on this is equally unconvincing:-

Q: The address put in the agreement is North Point

City Garden ?
A: Yes.
Q: Why not the Beverly Hill address ?
A: No idea, may be it was her (the Wife)’s practice,
also the purchase price was comparatively low,
should have been $8.9 million, therefore she put in
the North Point address. At that time we told the
vendors that we were living in North Point City
Garden, and wanted to move from a smaller place
to a bigger place, we therefore deliberately gave this
address to make it easier to bargain for a lower
price. Prior to the sale and purchase agreement,
already told vendor of this address, which was also
the address given in my daughter’s birth certificate.

Furthermore, it is apparent from the fact that the completion

date was put 7½ months from the provisional sale and purchase
agreement that the Husband would still have intended to sell his Beverly
Hill property to finance the purchase despite the AIA loan which he
obviously felt insufficient to meet the balance of the purchase price.
Since the purchase could not be financed solely with the AIA loan, and
that its low-interest advantage could not be enjoyed until the completion
of the purchase, by which time the Husband would have sold the Beverly
Hill Property which he says was then worth $11 – 12 million with
sufficient funds to pay the balance of the purchase price of the Provident
Centre Property even without the AIA loan, it begs the obvious question
that why in the circumstances would the Husband agree to such an
important purchase to be done in the Wife’s sole name when the alleged
advantage of the AIA loan which he says was the sole reason for him
agreeing to do so was in fact no advantage at all ?
 - 22 -

Let’s say the Wife on 3rd February 1996 made the suggestion
of AIA loan so suddenly that the Husband was not given sufficient time
to consider before agreeing to her purchasing the property in her sole
name. But the formal sale and purchase agreement was to take place at
his solicitor’s office on 16th February 1996, some two weeks later which
would surely have given the Husband, his parents as well as his sister
who he says was acting as his estate agent enough time to consider the
implication of the Wife’s suggestion and an opportunity for him to
change his mind about her suggestion or to request to add his name as the
purchaser in the formal sale and purchase agreement.

This however did not happen and the agreement was signed
by the Wife in her sole name on 16th February 1996 when she paid the
balance of the initial deposit in the sum of $338,300 at the solicitor’s
office which the Husband also attended. His evidence is that on that
occasion he contributed by making 2 separate payments to the Wife in
the respective sum of $80,000 and $65,000, and that later on 9 th March
1996 he paid for the stamp duty in the sum of $230,532.50. His evidence
on this was first set out in Paragraph 4 of his 2 nd Affirmation and in his
evidence in chief he gave more details as follows:-

“On 16th February 1996 at the signing of the sale and

purchase agreement, of the balance of the initial 10%
deposit of $338,300, I paid a cheque of $80,000 to the
solicitors plus cash of $65,000 and another cheques for
$230,000 odd for the stamp duty. Two days later I paid
another $10,000 in cash to my Wife for the property. For
the balance of the initial deposit of $338,300, my Wife said
she had the money so she could pay first as my current
account was in over-draft which charged interest, so I
thought she was going to pay first, and the cheque was
drawn by my Wife for $338,300 being balance of the initial
deposit. On 15th February 1996 I also paid a cheque for
$80,000 to the solicitor. The sale and purchase agreement
was executed on 15th February 1996. As I had already paid
 - 23 -

$80,000, my Wife therefore drew out her cheque for only

$250,000 odd for the balance, being $338,300 less $80,000.
Prior to this, I already paid $65,000 in cash to my Wife for
the purchase price. On 15th February 1996, I also drew a
cheque for $230,532.50 for the solicitor for the stamp duty
and costs.”

During cross-examination, however, the Husband’s evidence

started to become confusing and unsatisfactory. Consider the following:-

Q: The cheque for $65,000 was a bearer cheque.

A: Yes.
Q: It was your signature on the back of the cheque.
A: Yes.
Q: Appears to be for your own use ?
A: I did give the cash to my Wife.
Q: But the cheque was drawn by you and cashed by
you ?
A: It was drawn by me but not used by me. We were
going to solicitor’s office for the sale and purchase
agreement, found that we were required to pay
more money, so we used this money, it was not for
the Chinese New lucky money.
Q: You also drew another cheque for $80,000 on the
same day payable to solicitors.
A: Yes.
Q: Why not made this cheque ($65,000) also payable to
solicitors ?
A: At that time, I gave the cash to Wife, when we
arrived at solicitor’s office, found that it wasn’t
enough, so I drew another cheque.
Q: You brought cash to solicitors ?
A: No.
Q: When did you make out the cheque for $80,000 ?
A: On 15th February 1996.
Q: On same date you also wrote a cheque for $65,000 ?
A: Yes.
Q: You went to bank to cash it and then gave cash to
Wife ?
 - 24 -

A: No, I went to bank in the morning to cash the

cheque for Wife, then later in the afternoon, I drew
the cheque for $80,000 for the solicitors. If she had
known that there wasn’t enough money, I would
have given her the $80,000 in cash as well.
Q: Why in cash ?
A: I thought it would be convenient to do it in cash, as
it would be too troublesome for so many cheques,
also solicitors would accept cash or cashier order. It
was already late at the solicitor’s office, when it was
realised that the money was not sufficient, but as I
was well acquainted with the solicitors, so they
accepted cash.
Q: You mean solicitors would not accept personal
cheque ?
A: Not so, but as they have to give the money to the
vendors, usually require cashier order or solicitor’s
cheque, but there wasn’t enough time to mark good
the cheque.
Q: Was the $250,000 odd paid by your Wife to the
solicitors by cheque or cashier order ?
A: For the balance of the initial deposit of $250,000
odd, if I remember correctly, the solicitor wanted
cashier order or cash.
Q: On that day you and Wife went to solicitor’s office
where Wife drew a cheque for $250,000 odd less the
$80,000 ?
A: Yes, but she had to go to bank for cash as it was her
personal cheque and solicitors wanted her to make
out cheque to vendor.
Q: What time was it when you arrived in solicitor’s
office.
A: Can’t recall the exact time, late afternoon, after 3
pm.
Q: What time your Wife told you there wasn’t enough
money ?
A: When we arrived at the solicitor’s office.
Q: You mean your Wife intended to bring a cheque
there, then realised not enough cash, so you made
out another cheque ?
A: On that day, I gave Wife $65,000 in cash in the
morning, then we went to solicitor’s after 3 pm in
 - 25 -

the afternoon for the sale and purchase agreement,

Wife said there wasn’t enough money, asked me to
draw a bearer cheque for $80,000, I don’t
remember it was her personal cheque or cashier
order, on that day we went separately, at that time I
thought the cheque was to be deposited into Wife’s
account.
Q: This is inconsistent with your evidence-in-chief
when you were asked whether the cheque was
drawn to solicitors, you said yes.
A: I can now see that the cheque had been paid to the
solicitors, but at the time when I made out the
cheque, it was made payable to bearer, it was later
completed by Wife.
Q: But you said in chief that the balance of the initial
deposit was paid by your Wife as your company’s
account was overdrawn, so she paid the balance of
$330,000 odd less the $80,000 which you said you
paid for on 15th February, then on 16th February
you and Wife went to solicitors to sign agreement,
but when you were asked about the cheque of
$80,000, you said it was paid to solicitors.
A: Yes.

Several questions later and when the Husband was shown

evidence that the cheque for $80,000 was in fact paid into the solicitor’s
account, he gave the following explanation:-

A: This cheque was deposited by my Wife.

Q: Were you with her when the cheque was deposited ?
A: No, I was at the solicitor’s office.
Q: Why didn’t she just hand the cheque to solicitors
but instead deposited on their behalf ?
A: Because she had to pay cash as requested by the
solicitors.
Q: But they accepted your cheque.
A: Because my cheque was in smaller amount.
Q: Put to you the $80,000 was not your contribution
towards purchase price but instead was your
repayment of money to your mother-in-law.
A: I don’t agree.
 - 26 -

Q: This cheque for $80,000 was drawn before the

cheque for $65,000 ?
A: I don’t agree.
Q: The cheque number for $80,000 is 098270 ?
A: Yes.
Q: Whilst that for the $65,000 cheque is 098271.
A: Yes.
Q: So before you gave cash of $65,000 to Wife, already
gave cheque for $80,000 to her.
A: I don’t agree.

I find this evidence of the Husband on his alleged payments

made upon the signing of the sale and purchase agreement confusing,
inconsistent and contradictory, and I do not believe that he paid the
$65,000 to the Wife at all as alleged. Furthermore, it is clear from the
provisional agreement that the balance of the initial deposit of $338,300
was to be paid to the vendors on 16 th February 1996. The Husband as an
experienced property investor and estate agent could not have any doubt
as to exactly how much it was required to pay when the sale and
purchase agreement was signed. It is also a common practice and in fact
a duty of solicitors to inform their clients of their financial obligations
well before the date when they are to execute conveyancing agreements
or assignments. I find it incredible that the Husband would not have all
the necessary payments ready on the day when the formal sale and
purchase agreement was to be executed. It just doesn’t ring true of
someone who was supposed to be making an important investment on a
$8 million property as a home for himself and his family.

I also find the Husband’s evidence that he had paid the

agency commission of $83,830 for the purchase unconvincing. There is
no dispute that the property was purchased through the joint co-operation
 - 27 -

of City Garden Property Agency and U P Agency respectively

representing the vendor and purchaser and therefore agency commission
was payable. However in this case the Husband was supposed to be
purchasing his own home with his sister with whom he had a good
relationship acting as his agent and whose agency was also where the
Husband worked. In fact when the commission was allegedly paid on
18th June 1996 when its receipt was issued, the sister’s agency had
already been incorporated into a limited company of which the Husband
was one of the two directors. Although it is accepted that the agency and
the subsequent limited company were legally two separate entities each
with its own accounts, it can be argued that in reality they were at that
time essentially the same business of the Husband and his sister which
occupied the same office premises. One would have expected that the
agency commission would easily be waived under the circumstances.

The Husband’s evidence on this is however both vague and

unsatisfactory. He said this on cross-examination:-

Q: U P Agency at that time was your sister’s business ?

A: Yes.
Q: It was incorporated into limited company in May
1996 ?
A: Not so, not from unlimited company to limited
company.
Q: Were you not interested in U P Agency in May
1996 ?
A: Not this company.
Q: Same address, at City Garden ?
A: Yes.
Q: But at that time belonged only to your sister ?
A: Yes.
Q: She had all along been residing with you and
family ?
 - 28 -

A: Yes.
Q: Your relationship with her was good ?
A: Yes.
Q: Are you sure that she billed you for $83,830 ?
A: Yes.
Q: Why did she bill you ?
A: Perhaps she thought she needed to charge this
commission.
Q: But you are her brother.
A: She required me to pay.
Q: She was residing with you ?
A: Yes, but she still charged me.
Q: The two of you are still in good relationship ?
A: Yes.
Q: But she didn’t even give you a discount ?
A: May be she would later give a discount, but due to
breakdown of relationship, she decided to charge in
full.
Q: It is too late for you to say this, because you have
already said in your evidence that you had paid this
amount.
A: Yes.
Q: She didn’t even give you a discount ?
A: Why don’t you ask her ?
Q: You were residing with her, didn’t you ask ?
A: I didn’t ask, no reason to.
Q: You simply paid ?
A: Yes.

I find it difficult to accept the Husband’s evidence as to why

he didn’t ask his sister to waive the commission under the circumstances
in particularly in view of their relationship and his alleged tight financial
situation at that time as evidenced by the fact that he could only make
part contribution towards the purchase of the property.
 - 29 -

Furthermore, despite the fact that the Husband has been able
to produce copies of cheques, bank records and other documentary
evidence to support his various alleged payments made in respect of the
many relevant transactions mentioned in these proceedings, he has not
produced a single piece of evidence to substantiate his payment of the
commission which at $83,830 is not an insignificant sum. In fact I am
unable to find from the disclosed bank statements either of the Husband’s
personal bank accounts or of the bank accounts of JP of any withdrawals
at the material time that may remotely resemble such payment. I accept
that the Husband did try to explain in cross-examination that he paid the
agency commission on two separate occasions by both cash and cheque
and hence he was unable to say for certain from the bank statements
which withdrawals were for such payments. However he is unable to
explain why the commission was settled in such manner. If he had
difficulties at that time to settle the payment in one go, he could have
asked his sister to waive the commission or to give him a discount, and if
he did pay in full, there is no reason why he could only produce the
receipt but no other documentary evidence of such payments. I simply
find it difficult to accept his evidence on this issue.

The Husband’s explanation of why he and his family did not

move into the Provident Centre Property after the completion of its
purchase in late 1996 is equally unconvincing. His evidence on this is set
out in Paragraph 7 of his 2nd Affirmation as follows:-

“The completion date for this property was unusually late.

It was not until 30 September 1996, some 7 and ½ months
after the signing of the formal sale and purchase
agreement. When the time for the completion of the
purchase of this property was getting close, my mother
asked me about it. When she learned that the property
had been purchased in the sole name of the Petitioner, she
advised me that I should also have my name added to the
 - 30 -

property. I then discussed the matter with the Petitioner.

At first she told me that it was not possible to have my
name added because if that was done, she would not be
able obtain the low interest loan from AIA. The matter
therefore proceeded to completion with the Petitioner
becoming the sole registered owner of the property.
Subsequently, however, I learned from a friend who also
worked for AIA that what the Petitioner had told me was
not true, and that the Petitioner would still have been
entitled to the low interest loan if my name had been
added. I, therefore, raised the matter the Petitioner, and it
was then that she made known to me her true stand on the
matter. The price of the property had by then risen
considerably and the Petitioner told me that if I wanted to
have my name added to the property I would need to pay
her 50% of the difference between the then market price
which she said was $11 million and the purchase price of
$8,383,000.”

In his evidence in chief, the Husband repeated the above

explanation and added that after it was discovered that his name could be
added to the property without affecting the AIA loan, and when the Wife
refused to do so, she had a quarrel with his mother who later refused to
move to the property, so as a result the family stayed at Beverly Hill and
never moved to the Provident Centre Property. The main disputes on this
issue therefore center around the several different time stages mentioned
in the Husband’s evidence which are relevant in establishing the
credibility of his allegation.

Firstly, as pointed out by the Wife, since the Husband’s

mother was present when the Wife signed the provisional sale and
purchase agreement on 3rd February 1996, she should and would have
known there and then that the property was purchased in the Wife’s sole
name, yet the husband’s evidence is that she only learnt about this when
the time for the completion of the purchase was getting closer when she
asked him about the matter. If the Husband’s evidence is to be believed,
 - 31 -

clearly it was important to his mother that his name be included in the
property, as the Wife’s refusal would lead to a big quarrel with her which
resulted in the whole family remaining in Beverly Hill instead of moving
to their new home in North Point, something which the Husband says
they had been planning to do so since late 1995. This begs the obvious
question that even if she did not know that the Provident Centre Property
was purchased in the Wife’s sole name on 3rd February 1996, which is
unlikely, why had the Husband’s mother waited so long thereafter until
the time for the completion of the purchase was getting close, to raise her
big concern about the question of ownership of the property ? There is
simply no explanation from the Husband.

The Husband’s evidence as to when exactly he learnt that

his name could be added to the property and his action taken thereafter is
both baffling and incredible. Consider his following evidence on cross-
examination:-

Q: According to Paragraph 7 of your 2 nd Affirmation,

you are saying that you knew that your name could
be added only after the completion ?
A: In fact I mentioned this to her before completion.
Q: But you said in Paragraph 7 that it was only after
the completion ?
A: Yes.
Q: Why did you in this morning say that you learnt
about this in June or July 1996 ?
A: At that time I asked her about it, she said no, but I
made enquiry with people in AIA, then told her that
it could be done, she didn’t believe they would say
something like this, she also asked me for the name
of the people who told me.
Q: What is the reason for the difference between
Paragraph 7 of your Affirmation and your evidence
this morning ?
A: Before completion, I only asked her colleague about
it, but after completion, I went to AIA to ask about
it and it was confirmed by them.
 - 32 -

Q: But in June or July you already found out about it,

so you stopped selling the Beverly Hill Property ?
A: Yes.
Q: You must have already found out by then that your
name could be added ?
A: I asked about it, it was confirmed.
Q: But why did you say in Paragraph 7 that you learnt
about it after completion ?
A: I later asked friend working at AIA who confirmed
it.

It is clear from the Husband’s evidence that he was advised

by his mother that his name should be added to the property and so he
started to make enquiries with his friend working in AIA in June or July
1996 when he was told that it could be done. He therefore raised the
matter with the Wife and when she refused, it led to the quarrel with him
and his mother and the eventual abandonment of the plan to move his
family to Provident Centre. If it was so important to the Husband that his
name should be added to the property, why then did he wait until after the
completion on 30th September 1996 to get the matter confirmed by AIA,
when he had in fact already been making enquiry with his friend as early
as June or July which should have given his ample time to make further
enquiry with AIA before the completion date.
Furthermore, as the Husband has readily admitted that he
and his family at that time were very angry with the Wife over her
deceiving him about the AIA matter so much so that he quashed the plan
to move his family to the Provident Centre Property, why then was he
still willing to give her further sums of $200,000 and $300,000 for the
completion of the purchase as alleged, without demanding her, for
example, to execute a declaration of trust in respect of his share in the
property or at least to give some acknowledgement of his contribution
towards its purchase ? His alleged action or lack of such action as would
 - 33 -

have been expected of a reasonable person under the circumstances is

indeed perplexing and incredible.
I also find the Husband’s explanation given in Paragraph 8
of his 2nd Affirmation as to why he put the respective shares in the
Provident Centre Property at 1/3 for him and 2/3 for his wife equally
puzzling, contradictory and ultimately unconvincing. He said this in that
paragraph:-

“In paragraph 9 of my First Affirmation, I had mentioned

that No. 23A Provident Centre was purchased by the
Petitioner and I jointly, as to 1/3 for me and 2/3 for the
Petitioner. As stated in paragraph 6 hereinabove, at the
time the provisional and formal sale and purchase
agreements were entered into, there had not in fact been
any express discussion between the Petitioner and I about
what our respective beneficial interest in the property were
to be. My understanding at the time was that it was to be
purchased as our joint property regardless of whose name
it was in. The proportion of 1/3 and 2/3 mentioned in my
First Affirmation was what I had subsequently worked out
on the basis that the moneys that I had in fact contributed
towards the purchase of this property was about 1/3 rd of
30% of the purchase price of the property plus stamp duty,
legal fees, estate agent’s fees and other incidental expenses.
I had used 30% of the purchase price as the basis for my
calculations for the reason that the original intention at the
time the provisional and formal sale and purchase
agreements were made was for the Petitioner and I to
jointly put up 30% of the purchase price and for the
remaining 70% to be financed by a mortgage loan.”

First of all, the basis upon which the Husband arrived at his
share of 1/3 in the property is wholly and fundamentally wrong. The
purchase price of the property was $8,383,000. Adding the stamp duty
and costs of its purchase would bring the total amount to over $8.5
million. Even if I were to accept that the Husband had paid a total sum of
$1.5 million towards the purchase of the property including stamp duty
 - 34 -

and agent commission, the fact that the balance of the purchase price was
paid by the Wife’s AIA loan and the sale proceeds of her mother’s City
Garden Property in which he had no interest at all, irregardless the true
beneficial ownership thereof, the Husband’s alleged payment of $1.5
million could not have, mathematically or otherwise, given him 1/3 share
in the Provident Centre Property. Putting his case at the highest and
using his own basis of calculation, it would be at most only 1/5.
Furthermore, the Husband’s evidence here is that the original
intention was to put up 30% of the purchase price by him and his Wife
whilst the balance of 70% was to be financed by a mortgage loan. This
clearly contradicts his earlier evidence in Paragraph 7 of the same
affirmation when he tried to explain that the completion date was put
back by 7½ months because he intended to finance the purchase by
selling the Beverly Hill Property. If it was indeed the Husband well-
considered plan to purchase the Provident Centre Property as the new
home for his family, it is incredible that he could be so inconsistent and
contradictory in his evidence on how he had intended to finance the
purchase.
Nor is he able to challenge the Wife’s evidence about an
incident which occurred after the purchase and which she says will go to
refute once and for all the Husband’s allegation that he had any interest in
the Provident Centre Property. The Wife says that after her mother had
sold her City Garden Property but before she could move into her new
home, she needed somewhere to store her chandeliers and therefore the
Wife took her chandeliers home and placed in her maid’s room. When
her mother-in-law did not allow it, she then put the chandeliers in the
boot of the Husband’s car. On 16th January 1997 the Husband told her to
take the chandeliers out of his car as he needed to transport some roasted
 - 35 -

pork for the celebration of the opening of his branch office in Mei Foo
Sun Chuen. When the Wife replied that she had nowhere to store her
mother’s chandeliers, the Husband said that she could take it to her
mother’s Provident Centre Property. This incident led to a heated quarrel
between the parties which also involved the Husband’s parents and the
Wife’s eventual departure from the matrimonial home on the following
day. The Wife submits that the fact that the Husband told her to take the
chandeliers to her mother’s property at the Provident Centre could only
mean one thing, i.e. the property belonged to her mother and that the
Husband never had any interest therein. This is strong argument indeed
but the Husband has never even tried to challenge the Wife’s evidence on
the incident.
For the reasons aforesaid I have come to the conclusion that
the Husband’s evidence that he purchased the Provident Centre Property
jointly with the Wife as their new home is inconsistent, contradictory and
ultimately unconvincing and cannot be sustained. I believe that he made
up this story in order to boost his claims against the sale proceeds. This
however by no means follows that he had no interest in the property.
After all, it is not in dispute that he had made certain payments towards
the purchase price, and if they were not meant to be his share of the
investment in the property, then what could they be ? To answer this it is
necessary to consider the evidence of both the Wife and Madam Lee
about the Husband’s payments.
The Husband’s evidence as to his payments made towards
the purchase of the Provident Centre Property is detailed in Paragraph 17
of his 7th Affirmation. OP the $1.5 million which he alleges to have paid,
he says $1,205,592.50 could be traced from the relevant bank records, the
particulars of which he sets out as follows:-
 - 36 -

Date Amount Particulars

(1) 05/02/1996 HK$200,000.00 Debit to Wife’s CitiBank

A/C 10141251;

(2) 15/02/1996 80,000.00 Paid to solicitors Lam Lee

& Lai by JP Cheque
No.098270 Kincheng bank;

(3) 15/02/1996 65,000.00 Paid to the Wife by JP

Cheque No.098271
Kincheng bank;

(4) 17/02/1996 10,000.00 Paid to the Wife by JP

Cheque No.098279
Kincheng bank;

(5) 09/03/1996 230,532.50 Paid to HK Government by

JP Cheque No.066979 Wing
Lung bank;

(6) 18/06/1996 83,830.00 Paid to the Property

Agency by JP;

(7) 15/07/1996 36,230.00 Paid to the Wife by JP

Cheque No.047603
Kincheng bank;

(8) 21/09/1996 200,000.00 Paid to the Wife by JP

Cheque No.908596
Kincheng bank;

(9) 26/09/1996 300,000.00 Paid to the Wife by JP

Cheque No.876459 Wing
Lung bank;

Total HK$1,205,592.50
=============

Of these alleged payments, only items (1), (2), (5) and (9)
totalling $810,532.50 are admitted by the Wife and her mother Madam
Lee as having come from the Husband towards the purchase of the
property, not as his investment but merely repayment of monies due and
 - 37 -

owing to Madam Lee of her capital and profit from two earlier Joint-
investments in a Robinson Place Property and another Provident Property
Centre as well as a previous personal loan made to the Husband. They
deny the other alleged payments of the Husband. I shall now consider the
parties’ evidence on this issue in details, first the Robinson Place
investment.
The Husband’s evidence is first set out in his 2nd Affirmation
in which he said he was invited by his uncle Mr Yiu K.W. to take a 20%
stake in his investment in this property, but when the time came for him
to pay his uncle for his share, he did not have available funds handy and
so he asked the Wife to lend him the money. After the property was sold,
his uncle returned to him the capital as well as his share of the profit. He
said he must have repaid his Wife the money she lent him for this
transaction but was unable to pinpoint the time or manner of his
repayment.
However, in his later 7th Affirmation, the Husband changed
his evidence by saying that the 20% stake was in fact an investment of
him and the Wife in equal share and that their respective share of capital
and profit of $166,110.90 each were returned to them after the sale of the
property.
In his evidence-in-chief, the Husband changed his evidence
again when he said the following:-

“The Robinson Place Property was a joint investment

between me, my Wife and my uncle, of which my Wife and
I contributed 10% each and by uncle contributed 80%.
Our 20% was contributed by my Wife paying $170,000
odd. I don’t recall whether I had paid any money to my
uncle. I did make out a cheque to my uncle, and my Wife
made up the balance, but I can’t remember the amount of
my cheque made to my uncle. The total purchase price
was $6.9 million odd, later the property was sold for $9.36
 - 38 -

million. After deducting for the expenses, the net profit

was $1.6 million and the 20% of our share was $332,221.70,
i.e. $166,110.90 for each of my Wife and myself, but my
Wife’s share wasn’t paid to her, I took the money but as we
were husband and wife and as she could draw money from
the company’s account. I also agree I did not repay my
Wife the $170,000 initially paid by her, so I still owe her
$340,000, but as we often used each other’s money, so it
doesn’t matter, and as I at that time often gave her money,
so it doesn’t matter that I didn’t pay her her share of this
particular investment. At the time when the property was
sold, I did give her some money the amount of which I
can’t recall.”

The Husband has therefore given 3 versions of his

investment in the Robinson Place Property, changing from the initial
version that the 20% stake was his own investment funded with money
borrowed from the Wife, to a joint investment with the Wife in equal
share with each receiving their respective share of capital and profit after
the sale of the property, to the final version that he had kept his Wife’s
share but that she might have been paid at some later stage. When he was
asked to explain all these discrepancies, the Husband’s answers were
evasive and he even tried to blame his solicitors for not following his
instructions. Consider his following evidence given on cross-
examination:-

Q: Your Wife had 10% in the investment ?

A: Yes.
Q: It was a joint investment between you and your
Wife ?
A: Yes.
Q: When did Wife ask for 10% ?
A: After I obtained 20% from uncle, when I was going
to draw cheque for the payment, my Wife said she
wanted 10%.
Q: She specifically asked for 10% ?
A: She asked for 1/2 of my 20%, so 10%.
Q: But in Paragraph 19 of your 2nd Affirmation, you
said the 20% was your investment now you have
 - 39 -

changed your evidence by saying it was a joint

investment with Wife ?
A: It was a joint investment.
Q: But in your 2nd Affirmation, you said it was a loan
from Wife, now you are saying it was joint
investment with her ?
A: All along it was joint investment with Wife, but I
didn’t have enough money, so I borrowed from
Wife. Then the 2nd payment was paid by me. I
remember there were 2 payments, it was a new
project, there were 2 payments, but I can’t
remember exactly.
Q: But you only mentioned in your 2nd Affirmation
filed in June 1997 that you asked Wife for loan for
the investment, you never mentioned about her joint
investment, why ?
A: May be I did mention to my solicitors, but it wasn’t
put in, I don’t know why, but later I did disclose
that she had 10%.
Q: At the time where the Affirmation was deposed by
you, you knew that her 10% share wasn’t
mentioned ?
A: When it was read to me, I thought it was what it
meant, later I wanted to clarify.
Q: This is not true, you only made this up afterwards ?
A: I don’t agree.
Q: Your uncle repaid you the capital and profit ?
A: Yes, I don’t remember the exact amount, but I do
remember 10% profit was $166,000 odd not
including capital.
Q: Did uncle pay you in one go ?
A: I don’t remember.
Q: Cash or cheque ?
A: Should be cheque ?
Q: Payable to whom ?
A: I can’t remember.
Q: When ?
A: After sale, I can’t remember, long time ago.
Q: Put to you that you had no knowledge of details
because you never paid any money from this
property.
A: I don’t agree.

I in particularly find it difficult to believe that if it is true that

the Wife did specifically ask to have 1/2 share in the Husband’s 20%
stake, why then did she not press him for her share of the capital and
 - 40 -

profit and instead allow him to keep the money ? I simply find the
Husband’s explanation for not repaying the Wife for her share of the
investment because they often used each other’s money and that he had
paid her some other money during the marriage wholly unconvincing and
unsatisfactory. Madam Lee’s evidence, on the other hand, is more
coherent and consistent.
She says she was given this investment opportunity as the
Husband happened to be short of funds for the investment at that time and
as his uncle needed someone to chip in financially for an investment
which was surely going to make a quick profit, and as her daughter didn’t
wish to pass up such an opportunity, she was therefore asked to join in
the investment. She says she therefore paid for her share of the capital
investment from her bank account and is able to produce copies of the 2
cheques issued by her respectively dated 16th November 1993 for
$177,352.00 and 23rd November 1993 for $3,131.00 in favour of the
Husband’s uncle as evidence of her investments, the timing and amount
of which both support her case, and is confirmed by the land search
record which shows that the property was purchased by a company of the
Husband’s uncle on 19th November 1993 for $6,955,000 and was later
sold for $9,360,000.
What is more convincing of Madam Lee’s evidence comes
from copies of invoices of the solicitors handling the transaction produced
by her, one of which dated 15th November 1993 shows what she says to
be the handwriting of the Husband’s uncle about her share of the legal
costs of $3,131 for which she later issued the 2nd cheque referred above
on 23rd November 1993. It is true that the handwritten words of “Yiu
mother 3131” on the invoice may at first appear more logically to refer to
the Husband’s mother instead of Madam Lee whose maiden name or her
 - 41 -

husband’s name is neither Yiu. However even the Husband agrees that it
could not have meant his mother as she was never involved in this
investment and there was no reason for his uncle to make any reference to
his mother on the invoice. And since the Husband does not dispute that
the handwriting was that of his uncle or that it could be forged or faked
by the Wife or Madam Lee, the only logical conclusion one can draw on
the evidence is that the uncle meant to refer Madam Lee as “Yiu mother”
when he stated her share of the legal costs for the investment.
The Husband has also tried to cast doubt on Madam’s Lee’s
evidence by arguing that since this investment was bound to make
money, why would he pass up such an opportunity to his mother-in-law
even if he was short of funds as he could have borrowed the $180,000
odd which was required for his share from anyone, such as the Wife or
his family, or for that matter from Madam Lee, rather than giving up such
a good opportunity. However it was also his evidence that he did at that
time intend to speculate on Robinson Place which was a popular new
project but as he was unable to successful draw lot for a unit, whereas his
uncle was successful, he was therefore invited by his uncle to contribute
towards the purchase. I find this inconsistent with his evidence that he
had to borrow from his Wife for the first payment as he did not have
sufficient money, whereas although he says that the 2nd payment was paid
by him, he cannot remember the exact amount or other details. If there
was the original intention to speculate on a property on his own which
was then worth almost $7 million, as was indeed his evidence, why did he
not have his funds ready for a mere 20% contribution towards his uncle’s
unit and instead had to borrow from his Wife ? It just doesn’t sound right
for someone who says he had planned for such an investment.
 - 42 -

The Wife’s evidence confirms that it was his uncle who

invited the Husband to jointly invest in the Robinson Place Property but
he passed over the chance to her mother. It is also her evidence, which is
not disputed by the Husband, that the uncle frequently speculated in
property investments and had often asked others including the Husband to
join in the investments or speculations. She says on this occasion the
Husband did not have extra money for this investment and so he passed
the chance to her mother. It is submitted on behalf of the Wife that since
the Husband at that time took part in many other profitable speculative
activities, it shouldn’t be surprising that he would give up a seemingly
good opportunity to Madam Lee as relationship at that time was very
good. I find this submission logical and sensible in particularly in view
of the fact that the Husband had at that time on more than one occasion
asked Madam Lee to co-operate in certain property transactions to enable
him to obtain better mortgage terms which makes it all the more likely
why the Husband was willing to pass up the Robinson Place investment
to Madam Lee as a favour.
The Wife also in her evidence confirms that her mother did
from time to time ask for repayment of her principal and profit made in
the investment but the Husband always found excuses to delay payment.
She says she did in 1995 pay her mother $150,000 as part-repayment
from the JP’s account but when the Husband found out about it, he gave
her a fierce scolding. She therefore decided to wait until February 1996
to use her mother’s investment in the Provident Centre Property as an
excuse to press the Husband for repayment of the rest of the money
which he still owed her at that time. This included money which Madam
Lee says the Husband also owed her from another property investment,
the evidence of which I shall now consider.
 - 43 -

The issue over the 2nd alleged investment by Madam Lee is

more complicated and the evidence less clear or direct. Madam’s Lee’s
evidence is set out in her 1st Affirmation where she said she issued a
cheque on 7th March 1994 for $200,000 in favour of the Husband’s JP for
her investment in Flat B, 13th Floor, Block 11, Provident Centre. She said
the property was purchased for $7.25 million and was later sold for $8.25
million, giving her $115,455 as her share of the net profit but which
together with her principal of $200,000 was kept by the Husband.
In her later Affirmation Madam Lee corrected herself by
saying that she actually did not know the exact address of the property in
Provident Centre for which she gave the Husband $200,000 for the
investment. She said she merely gave the money to the Husband through
her daughter for an investment in a property in Provident Centre. She
also explained that she gave the wrong address of the property in her
earlier Affirmation based on the incorrect information provided by her
daughter. Like her investment in the Robinson Place Property, Madam
Lee says the Husband had kept the money without repaying her.
In reply to Madam Lee’s alleged investment in this 13B
Provident Centre Property, the Husband said this in his 2nd Affirmation:-

“20(a)This property was never purchased by JP. I verily

believe that the $200,000 paid into JP on 7 th March
1994 was a payment to JP by the Petitioner either as
a loan by the Petitioner to JP or repayment by the
Petitioner to JP of a loan she had earlier taken from
JP, and that the Petitioner had again merely utilised
a bank account in the name of Madam Lee to make
the payment. The funds for the cheque belonged to
the Petitioner.

(b) There is now produced and shown to me marked

“YKC-12” a copy of the land registry search record
in relation to this property. It shows that a
company named Full Wealth Development Limited
 - 44 -

(“Full Wealth”) was the purchaser of this property

under a sale and purchase agreement dated 22 nd
December 1993 and that Full Wealth sub-sold this
property before completion to one Lee Hang
Knitting Garment Factory Limited (“Lee Hang”) on
10 January 1994, and that the sale of this property
to Lee Hang was completed on 28 th February 1994.
I have no recollection of having any involvement
with this property but will not rule out such
involvement because Full Wealth was also the
company used by my uncle Yiu K.W. for the
purchase of the Robinson Place property and I
suspect that Madam Lee got the address of this
property from the Petitioner who must have taken it
form my records. Regardless of whether I was or
was not involved in the purchase of this property, it
is clear that Madam Lee was not. She says that she
gave a cheque for $200,000 on 7 March 1994 to JP
as her contribution towards its purchase. That is
clearly untrue. Firstly, JP was never involved and
secondly even if I or JP were involved in this
purchase jointly with my uncle, the time when
money would have been payable would have been in
December 1993 when the purchase was made. By
7th March 1994, even the sale to the sub-purchaser
had long been completed. Completion had taken
place on 28th February 1994.

The Husband further argues that it doesn’t make sense that

Madam Lee would invest $200,000 in a property without knowing the
address, and that her explanation in her later affirmation was merely an
attempt to backtrack on her evidence after being contradicted by the land
registry record produced by him.
The Husband then later in his evidence-in-chief admitted
that the cheque of $200,000 was in fact given to him by the Wife for the
purpose of investing in a Kornhill Property which was purchased by him
and his friend through his friend’s company in equal share, and that the
Wife’s contribution was for 1/2 of his share. He said that the Kornhill
property was purchased in 1994 for $4.5 million, but was later sold at a
loss in 1997 for $4.1 million. He also said in his evidence that the
 - 45 -

$130,000 of so-called personal loan from Madam Lee was in fact a

cheque given to him by the Wife also for the purchase of the same
Kornhill Property, and he said this in his evidence:-

“At that time I told my Wife of my investment in the

Kornhill Property, she wanted to have a share, so he paid
me a cheque, but I didn’t notice who was the drawer of
these cheques. I disagree that mother-in-law had invested
$330,000 in this property.”

The Wife in her 2nd Affirmation confirmed her mother’s

payment of $200,000 by means of a cheque issued in favour of JP for
investing in a property in Provident Centre but did not give the address.
In her later Affirmation in reply to the Husband’s 7th Affirmation, she
gave the address of this property at 11B provident Centre. In cross-
examination, she explained that she had made the mistake by confusing
Flat 11B Block 11 with another property at Flat 13B Block 11 which was
another investment made by the Husband jointly with his uncle’s
company Full Wealth, which was the reason why her mother gave the
wrong address in her 1st Affirmation.
The Wife denies any involvement in the Husband’s
investment in the Kornhill Property and insists that her mother’s payment
of $200,000 was for the investment in 11B Block 5 Provident Centre
Property which was a joint investment of her husband and his friend. She
gave the following details in Paragraph 11 of her 3rd Affirmation:-

11. Referring to paragraph 6(b), investment in 11B,

Provident Centre:

(a) I was only able to find details about this

investment after the commencement of the
hearing of the S.17 application by the
Respondent. The Respondent mentioned the
 - 46 -

property at Flat 813, Block Q, Kornhill in his

7th Affirmation which triggered me to search
the pieces of paper that I have kept. I have
now found some useful information about an
investment in 11B Provident Centre.

(b) Looking at the pieces of paper now, I recall

that the Respondent used JP to jointly invest
in this property with a Brilliant Peak
Company Ltd (“Brilliant Peak”) In March
1994. Brilliant Peak bought the property at
the price of $4,900,000.00 by a sale and
purchase agreement dated 8th March 1994
and sold to a subsequent purchaser by a sale
and purchase agreement dated 18th March
1994 for a price of $5,900,000.00. Brilliant
Peak made a profit of $1,000,000.00 within a
very short time. There is now produced and
shown to me marked “SYL-1” a copy of the
land search record in respect of this
property.

(c) There is now produced and shown to me

marked “SYL-2” a copy of a fax copy from a
Golden Road Development Ltd dated 24th
March 1994 marked to the attention of the
Respondent. I believe that Brilliant Peak
just made use this sheet of paper bearing the
heading of Golden Road Development Ltd to
fax to the Respondent. According to the
information contained on this sheet of paper,
the parties were to pay $918,750.00 being
$735,000.00 (15% on $4,900,000.00),
$134,750.00 (2.75% of $4,900,000.00 as
stamp duty) and $49,000.00 (commission).
Each party was to pay $459,375.00 for the
purchase.

(d) At the time of sale at $5,900,000.00 $590,000

was received at 10% of the purchase price
and deducting and commission of $59,000.00
from this sum, each party was to receive
$265,500.00.

(e) My mother participated in this investment of

JP by injecting $200,000.00 into JP’s capital.
She paid by a cheque numbered 037433
dated 7th March 1994 in favour of JP.
 - 47 -

Looking at the copy of bank statement of

JP’s current account with Kincheng Bank
for the month of March 1994, I can now
identify a deposit of $200,000.00 and I verily
believe that this was my mother’s cheque.

(f) There is now produced and shown to me

“SYL-3” a copy of a receipt issued by
Messrs. T.L. Ip & Co dated 7th March 1994
with reference to this 11B property. This is a
receipt received from Brilliant Peak for the
sum of $735,000.00 being deposit money. It
is marked in this receipt that a cheque
numbered 007287. On this receipt I also
noted the Respondent’s own handwriting for
the remark: $275,595.00, 15% deposit for
11B, Block 5, Provident Centre.

(g) I have checked JP’s March 94’s bank

statement and noted that JP drew 2 cheques
in the amount of $275,595.00 (number
007287) dated 8th March and $134,810.00
(numbered 007288) dated 14th March. I
verily believe that the $134,810.00 was for
the stamp duty and also probably for some
other miscellaneous charges.

(h) I also note in the same bank statement that

there was a deposit of $$265,500.00 on 24th
March 1994. I verily believe that this was a
deposit made by Brilliant Peak in connection
of this transaction.

(i) While my mother’s share was roughly half of

JP’s share of investment, my mother should
be entitled to about half of JP’s profit.
Together with the principal, my mother
should be entitled to at least $364,000.00.

(j) The Respondent has never returned this sum

of money to my mother.”

The documents produced by the Wife clearly implicates the

Husband in 11B Provident Centre. Before he was confronted with these
documents, the Husband gave the following evidence about the property
in cross-examination:-
 - 48 -

Q: Remember The Property at Flat 11B, Block 5,

Provident Centre mentioned by your mother-in-
law ?
A: I have no recollection of this property.
Q: This Property was bought by one Brillient Peak
Company ?
A: I know about Brillient Peak Ltd. which was used for
the purchase of the Kornhill Property.
Q: Brilliant Peak did purchase the Property at 11B
Block 5 Provident Centre.
A: I don’t know about this. It was not even my
company.
Q: Any recollection of Brillient Peak buying 11B
Provident Centre ?
A: No recollection.
Q: Any association with this company ?
A: I only jointly purchased the Kornhill Property with
it, I know nothing about its other purchases.
Q: Who was the shareholder of this company ?
A: My friend.
Q: I now show you a land search record of 11B
Provident Centre which shows on 8th March 1994
Brillient Peak entered into a sale and purchase
agreement for this property, and by another
agreement on 18th March 1994 Brillient Peak sold
this property for $5.9 million, $1 million over the
purchase price of $4.9 million.
A: I have no idea of all these.
Q: You knew Brillent Peak was buying this property,
you saw it was a good chance to make a profit ?
A: I am all confused by all these questions, so many
purchases said to be my me which I have nothing to
do, you have confused me.
Q: In fact, you didn’t pay for this transaction, your
Wife gave you a cheque for $200,000 on 7 th March
1994 for the purchase of 11B Provident Centre ?
A: I don’t know anything about this.
Q: This represented your mother-in-law’s investment
in this property ?
A: I don’t know anything about this.
Q: Your mother-in-law invested in this property with
Brillient Peak through you ?
A: I don’t agree, I never have anything connection with
her on this.
Q: You received a cheque for $200,000 from mother-in-
law through your Wife for this investment ?
 - 49 -

A: I don’t know anything about the $200,000.

Q: Look at page 35, a copy of the cheque dated 7 th
March 1994 drawn by your mother-in-law ?
A: Yes.
Q: The cheque was payable to JP ?
A: Yes.
Q: You received this cheque from Wife as investment
from mother-in-law for 11B Provident Centre ?
A: I don’t agree, I only know it was money for the
purchase of the Kornhill Property, at that time I
asked Wife for money, she came up with the money,
I don’t remember who deposited the money, it was
intended as investment of me and Wife deposited in
JP’s account, as an investment with another person,
each for 50%, so my Wife’s share was 25%, the
property was purchased in the name of Brillient
Peak, I don’t know why cheque was drawn in name
of JP, I can’t remember who deposited it, whether
by me or by Wife.

Several questions later, when he was shown the various

documents relating to the purchase of 11B Provident Centre, the Husband
gave the following evidence:-

Q: I put to you that you knew about the investment on

this 11B Provident Centre Property.
A: I don’t agree.
Q: It was in fact a joint investment between JP,
Brillient Peak and mother-in-law ?
A: I don’t agree.
Q: Look at the land search record on this property
which shows that Brillient Peak entered into sale
and purchase agreement on 8th March 1994 for $4.9
million, then sold for $5.9 million.
A: Yes.
Q: Next document from Golden Road Development
Ltd. with attention to Mr Yiu, a fax dated 24 th
March 1994.
A: Yes.
Q: This was a fax from Brillient Peak to you ?
 - 50 -

A: I don’t know.
Q: It was written on this fax, $4.9 million with certain
calculations on expenses and profits ?
A: I don’t know anything about this.
Q: You then issued a cheque by JP for the stamp duty,
and page 697 of your Affirmation Bundle shows a
bank statement of JP about a cheque No. 007288 for
$134,810.00 ?
A: Yes.
Q: Although the stamp duty was stated to be
$134,750.00 for this property, whilst the amount of
this cheque is $134,810.00, probably because you
paid for some photocopying charges as well ?
A: I don’t know.
Q: After paying this sum, subtracting your share, you
should have paid $364,255 ?
A: I don’t know.
Q: As there was no commission payable, you therefore
paid $275,595 which is calculated as follows:
$459,375 being your half share of the purchase price
less stamp duty of $134,180 gives $324,565, and less
$49,000 of commission gives $275,565. Look at this
cheque No. 007287 for $275,595 issued by JP for this
property to Brillient Peak. The difference of $30
between these 2 amounts is probably photocopying
charges or other charges.
A: I don’t agree.
Q: Look at the receipt issued by Messrs T.L. Ip & Co.
solicitors for $735,000 being the deposit for this
property.
A: I don’t know.
Q: The bottom shows some Chinese writing, were they
by you ?
A: I don’t know, some looks like mine, but I don’t
know.
Q: It says $275,595 ?
A: Yes.
Q: Your mother-in-law paid you $200,000 for her share
of the investment in this property ?
A: I don’t agree.
Q: You in fact needed this sum for the payment of
$275,595 ?
A: I don’t agree.
Q: Look at the document which shows that $590,000
was the 10% deposit of the sale price received from
the purchaser ?
 - 51 -

A: Yes.
Q: The commission of $59,000 was paid by Brillient
Peak ?
A: Yes.
Q: This is the profit made, to be divided by 2 less the
commission ?
A: I don’t know.
Q: See the deposit of $265,500 on 24th March 1994.
A: Yes.
Q: Do you still say that the $200,000 paid by mother-in-
law was from the Kornhill Property ?
A: It was my Wife who deposited the $200,000, not
mother-in-law.

Up to this point of the cross-examination, the Husband’s

evidence was still that he knew nothing about 11B Provident Centre but
was unable to offer any explanation as to his connection with it as
appeared in the several documents shown to him. However, when he was
shown further documents, he gave the following evidence:-

Q: Look at “PP-2c”, cheque No. 007287 which together

with the cashier order made up total amount of
$735,000, the same amount as stated in the receipt
shown to you earlier.
A: May be something to do with borrowing by Brillient
Peak from JP, or my father investing with Brillient
Peak, but I don’t know anything about this.
Q: Did father have authority to issue cheque for JP ?
A: Yes, but he seldom drew cheque.
Q: What about your Wife ?
A: She has the authority.
Q: Who is this friend of Brillient Peak ?
A: A Mr Sze.
Q: Did Wife know him ?
A: Yes, she did.
Q: Very friendly ?
A: Very good friends.
Q: If she had invested with Mr Sze on this property,
would he have told you ?
A: I don’t know, difficult to say.
Q: Look at “PP-2b” – it is said here Mr Yiu.
A: Yes.
Q: Your father ?
A: It doesn’t say.
 - 52 -

Q: Could be you ?
A: Could be any Mr Yiu.
Q: How many Mr Yiu in JP ?
A: Me and my father.
Q: I put to you that your father was not signatoree to
JP’s account with Kincheng Bank at that time.
A: I don’t agree.

I find the Husband’s evidence on this issue evasive, difficult

and inconsistent. His evidence about his planned investment in the
Kornhill Property and yet had to borrow the money from his Wife is both
incredible and contradictory, whilst he was unable to give any details of
payments or to produce any documentary evidence such as bank
statements or receipts to connect the mother-in-law’s payment of
$200,000 to this Kornhill Property. His evidence that this property was a
joint investment between him and his friend’s company Brillient Peak is
inconsistent with the fact that the mother-in-law’s cheque for $200,000
was made out to JP, and he is simply unable to give any logical
explanation when confronted with the various documents produced by the
Wife which apparently linked him to the purchase of 11B Provident
Centre. On the whole, his evidence about the Wife or the mother-in-law
investing the respective sums of $200,000 and $130,000 in the Kornhill
Property is unreliable and unsatisfactory.
On the contrary, I find the evidence of Madam Lee and the
Wife on the investments in the both Robinson Place Property and 11B
Provident Centre as well as the personal loan thoroughly consistent, well-
corroborated by documentary evidence and ultimately more reliable. The
argument of the Husband about Madam Lee not knowing the correct
address of the Provident Centre Property in which she was said to have
invested $200,000 and her later attempt to backtrack on her evidence
cannot remain on solid-ground when one considers that the investment
 - 53 -

was made through the Wife whom Madam Lee totally trusted and in view
of the good relationship between the parties at that time.
As regard the remaining items of the Husband’s alleged
payment which are disputed, I also find the Husband’s evidence
unconvincing and unsatisfactory. The alleged payment of $10,000 was
only made 2 days after the sale and purchase agreement and was a cash
cheque endorsed by the Husband himself. His evidence as to why the
payment was made to the Wife and the reason why he was able to
remember this particular payment is incredible to say the least. The same
can be said about the alleged payment of $36,230 which was made on
15th July 1996, some 5 months after the sale and purchase agreement but
more than 2 months to go before the scheduled complete date when the
balance of the purchase price would have to be paid. Although it is not
disputed that this payment was received by the Wife, she denies that it
had anything to do with the purchase of the property and set out her
evidence in details in her Affirmation supported by documents that it was
the Husband’s reimbursement to her for various expenses unconnected
with the property, which evidence I find to be much more convincing and
consistent than the Husband’s.
I have already dealt with the alleged agent commission of
$83,830 earlier in the judgment and rejected the Husband’s evidence. As
to the last disputed payment of $200,000 allegedly made on 21 st
September 1996, the date is admittedly closer to the scheduled date of
completion, but the Husband’s evidence of such payment is again
unsatisfactory. He was only able to produce a copy cheque for $100,000
instead of $200,000 and that this cheque was in fact cashed by himself.
When asked why he did not simply just give the cheque to the Wife
instead of cashing it himself and then gave the cash to her as alleged, his
 - 54 -

explanation that because he did not have her bank account number is
unbelievable, in particular in view of the fact that he had in the past
issued cheques to her or deposited cheques into her bank account. I do
not believe that he had paid this sum to the wife as alleged and suspect
that he simply picked out this item from his bank statements because of
its proximity to the date of completion to push up his alleged contribution
towards the purchase price of the Provident Centre Property.
Having considered the evidence before me and for the
reasons aforesaid, I am satisfied that the Husband did not purchase the
Provident Centre Property jointly with the Wife as alleged and that his
various payments which I have found to have been made towards the
purchase of the Property were repayments of monies which he at that
time owed Madam Lee and not his contribution for his share in the
property, whereas his remaining alleged payments have been successfully
refuted by the Wife or Madam Lee. This however by no means follow
that his S.17 Application has failed as the property was purchased in the
Wife’s name and that if the Wife had an interest in the property, whether
wholly or jointly with her mother, her disposition of the sale proceeds
could still come within the section and liable to be set aside. I shall now
examine the evidence as to the ownership of the property.

Beneficial Ownership of Provident Centre Property

The Husband believes that the Wife had placed most of her
income with her mother to avoid higher tax as she had told him so during
the marriage, and therefore although the purchase monies for the
Provident Centre Property may appear to have come from Madam Lee,
they in fact belonged to the Wife and hence she must be regarded as the
beneficial owner of the property as well as its sale proceeds. This is of
 - 55 -

course disputed and it encumbrances on me to consider the financial

background of both Madam Lee and the Wife and the evidence which
lead to the purchase of the property. Like the other issues in this case,
they are by no means simple or straightforward.
Madam Lee’s financial background is set out in details in her
2nd Affirmation. Basically she says she married her husband in China
who then came to work in Hong Kong in the 60s, whilst she and her 2
children came to join him in 1971. She first worked as a packing worker
and later in a factory as a garment worker earning $800 per month. Her
son quitted school early and started to work in an electronic factory.
Madam Lee says as she gained more experience in the
garment field, she was able to earn more than $5,000 per month in 1975,
increasing gradually to $8,000 per month in 1980. She says in 1981 she
became a sample maker in a factory making what she says to be high-
class evening gowns and dresses for export and was able to earn almost
$10,000 per month on average until about 1988 when her income became
unstable due to the general trend at that time of the garment business
moving their factories into China.
In August 1985 the Wife finished her secondary education
and started working as an insurance agent for AIA. Madam Lee says her
daughter who was all along residing with her soon started paying her
money regularly towards the family’s household expenses. She says as
she had introduced many of her friends, relatives and colleagues to her
daughter as clients, and with the deteriorating garment business in Hong
Kong and her daughter’s encouragement, she decided in October 1990 to
also work for AIA as a sub-agent of her daughter until September 1997
when her employment was terminated as she had to help looking after her
granddaughter after the breakup of her daughter’s marriage.
 - 56 -

Apart from her income earned as a factory worker and later

as an insurance agent all these years, Madam Lee says her son had also
given her spending money since he started working. She says he was
able to gradually worked his way up in the electronic factory and
eventually started his own business in the early 80s. She says he would
from time to time give her pocket money, in particularly during Lunar
New Year when he would give her several tens of thousand dollars and
that at present he still pays her $5,000 per month as her pocket money.
In addition, Madam Lee says in between 1973 and 1985, she
was also able to earn extra income by letting out part of her rented flat at
Tokwawan, Kowloon, and even after her family had moved into a public
housing unit in Kwei Shing, she had kept the Tokwawan flat and let out
extra rooms for more income. She says at one time she was able to make
a profit of as much as $6,000 per month from subletting 5 rooms out of
the Tokwawan flat.
Madam Lee admits that her husband, who used to trade in
jade and jewellery business after he settled in Hong Kong in the 60s, had
to retire in the early 80s due to some mental illness, but she says this has
not caused her family any financial difficulty as her husband has been
able to pay for his keeps from his own savings. She says with her own
income earned over the years and with the monies given to her by her
children, she was able to save up substantial sums which she later
invested in foreign currencies and real properties, including the property
in dispute.
Madam Lee says she had throughout the years put her
savings in foreign currencies to earn higher interest and also to make
good profits when the exchange rate of the particular currencies which
she had invested, usually in the Australian and New Zealand dollars, had
 - 57 -

gone up as against the Hong Kong dollars. In January 1987 when she
decided to purchase the Lei King Wan Property for $636,210, she says
she had about $400,000 in savings from which she paid $240,000 as
deposit and borrowed $390,000 from the Bank of Canton by means of a
mortgage for the balance of the purchase price.
On 7th December 1988 Madam Lee re-mortgaged the Lei
King Wan Property to Chase Manhattan Bank for a loan of $790,000 part
of which she applied to discharge the mortgage due to the Bank of
Canton, and lent $280,000 to the Wife for her purchase of a taxi in 1989.
She admits that the Wife has since not repaid the said sum to her, but
denies that the Wife had ever paid any money for the purchase of the Lei
King Wan Property. She reasons that since the Wife had only been
working for less than 2 years at the time of the purchase, she could not
have been able to save up $240,000 for the deposit which she insists all
came from her own savings.
Madam Lee says in 1990 she decided to move to the City
Garden Property after her daughter’s office had moved to North Point.
The purchase price for the City Garden Property was $1,490,000 and as
her daughter was then entitled to housing loan from AIA, Madam Lee
says she decided to purchase the property in her daughter’s name so as to
benefit from the low-interest loan. She also put the Lei King Wan
Property in the market for sale to finance the purchase of the new
property. She says she paid an initial deposit of $30,000 for the City
Garden Property and on 20th February 1990 when the sale and purchase
agreement was signed by her daughter on her behalf, she paid a further
deposit of $119,000 from her current account with the Bank of
Communication. The sale was completed on 12th March 1990 when the
balance of the purchase price was paid mainly by a mortgage of about
 - 58 -

$1.2 million from Chase Manhattan Bank. She has produced copies of
various cheques and receipts as evidence of payments made by her
towards the purchase of this property including legal costs and stamp
duty.
Madam Lee says she was however unable to sell the Lei
King Wan Property in time to finance the purchase of the City Garden
Property which explains the reason why a mortgage had to be obtained
from Chase Manhattan Bank for the purchase. The Lei King Wan
Property was only sold on 2nd May 1990 for $1,238,000, the net proceeds
of which she used to discharge the Chase Manhattan Bank mortgage
which was then replaced by the AIA loan, whilst the balance of about
$400,000 was then paid into her own bank account, the particulars of
which however she says she can no longer recall due to the long lapse of
time.
The City Garden Property was about 800 sq. ft. with 3
bedrooms. The family moved into their new home in April 1990 with
Madam Lee and her husband each occupied one room while the Wife
occupied the 3rd room. Madam Lee says as the monthly repayment of
the AIA loan was deducted from her daughter’s salary, her daughter
therefore reduced her contribution of the household expenses and
maintenance to Madam Lee and her husband, and that this arrangement
continued even after her daughter married in 1993 and moved to the
Husband’s Beverly Hill Property until the sale of the City Garden
Property in 1996.
Madam Lee says in 1996 she had about $3 million in savings
and in view of the booming property market at that time which she says
everybody was making money from speculating in properties, she
therefore decided to invest in the Provident Centre Property. She says she
 - 59 -

intended to sub-sell the property which explains the rather long 7½

months completion date, and that in case she was unable to sub-sell and
had to complete the purchase, she would have to rely on a mortgage to
help meet the balance of the purchase price which was the reason why
she decided to again use her daughter’s name in the purchase so as to
make use of her AIA loan.
After the formal sale and purchase agreement was signed,
Madam Lee says she then asked the Wife to list the Provident Centre
Property for sale through the Husband’s U P Agency. However she was
unable to sub-sell the property at her intended price of $12 million and
she therefore had to complete the purchase. She says at the same time
she had wanted to sell her City Garden Property because she found it too
big for her and her husband after her daughter’s marriage. She therefore
returned her public housing unit to the Government in return for a
housing loan of $600,000 which she used to finance the purchase of a
smaller flat in Fang Cheong Building in North Point.
The City Garden Property was sold for $4,355,000 on 6th
September 1996 and after deducting the outstanding mortgage and
necessary costs and expenses, Madam Lee says she put the net sale
proceeds of $3.8 million odd in some fixed deposit accounts of hers
which she later applied towards the balance of the purchase price of the
Provident Centre Property together with her daughter’s AIA loan of $3
million on 30th September 1996.
One of the most contentious aspects of Madam Lee’s
evidence is how she as a garment factory worker with apparently limited
income was able to come up with the means to invest in a $8.8 million
property. She was subject to lengthy and vigourous cross-examination on
her alleged income earned as a garment factory worker in the 80s by
 - 60 -

Counsel for the Husband who confronted her with the wage indexes
published by the Government Census and Statistics Department in the
garment industry in 1983 and 1987 which showed that the average
incomes of garment workers in various positions in that period were only
between $3,000 - $4,000 per month, much less than her claimed income
of about $10,000.
In reply, Madam Lee gave the following account of her
earned income:-
“In 1975 I sublet part of my flat to a couple, where the
Wife Mrs Ma was working in a fashion company. She
introduced me to work in the factory of that company
where the salaries were higher than elsewhere. Whilst Mrs
Ma and her co-worker always had afternoon tea and
played mahjong in the afternoon, I would work very hard
and was able to earn more income. In fact I had sewed so
many pieces of clothes that I was afraid to tell others for
fear that it might affect their wages. Since working in this
factory, I was able to earn much more. From 1975 to 1979
I was able to earn $4,000 - 5,000 per month. However later
the factory closed down in 1978 and I went to another
factory also at higher salary. I worked in this factory until
I moved to the Kwei Shing public housing unit. Because I
was then well familiar with fashion, I therefore looked for
a job as sample maker, and I found the job in this factory.
Before this I never worked as a sample maker, so I gave it a
try. After working for 2 – 3 months I discovered that the
clothings of this company not too high class, so I looked for
another job. A friend introduced me to work in another
factory which made a lot of evening dresses in various
styles. Later this factory also closed down. Then I came to
work in this very high class fashion factory until 1988.
Because I was familiar in high class fashion, I was offered
higher wages.”

She also gave further details in cross-examination as

follows:-

Q: What exactly did you do from 1981 onwards ?

A: Sampling worker for high class fashion. Average
income around $10,000 per month. Large scale
factory, many workers, 40 – 50 in the whole factory.
 - 61 -

Q: Why do you mean by high class fashion ?

A: Different style, also nightgowns, whole dress for
evening occasions, sold at very high price, also many
were in silk.
Q: How much were they sold for ?
A: I have no idea, but for export, many parts were
handmade.
Q: What caused you to say they were sold at high
price ?
A: They were to be sold in U.S. dollars, required high
quality in tailoring.
:
:
:
:
Q: How many sample workers doing same job in your
factory ?
A: 3 or 4.
Q: Same salary ?
A: Should be.
Q: Highest pay in that factory ?
A: Not the highest, also overtime pay.
Q: You were earning more than most of the other
workers ?
A: Sample worker’s salaries were higher because of
better skill.
:
:
:
:
Q: In this factory many workers earned same salary or
more than your salary ?
A: A very few earned as much, many others earned
less, $2 – 3000 less.
Q: Some $9,000 odd per month ?
A: Yes.
Q: Most of the workers were able to earn $9,000 odd
and a few earned your salary ?
A: Not everyone of them earned $9,000 odd, some
earned very low wages, some were as little as half,
they were slow. Some sewing workers were earning
average wages, some miscellaneous workers were
earning very low salary, such as those who cut
threadends, only $3,000 per month.
Q: So the salaries in your factory were from $3,000 to
$10,000 per month ?
 - 62 -

A: May be some were even more than $10,000 because

the experienced master in making patterns, they
earned quite a lot.
There is indeed great disparity between Madam Lee’s
alleged income and those figures provided by the Census and Statistics
Department. It is true that Madam Lee has not produced any evidence,
documentary or otherwise, to support her allegation other than her own
words, which is understandable in view of the long lapse of time, and I
don’t think anyone can seriously dispute that $10,000 was a significant
amount in terms of salary in the early 80s, not just in the garment industry
but also in many other professions. On the other hand, it must be pointed
out that the figures from the Census and Statistics Department were no
more than mere average or median incomes in the garment industry
which, I am sure as in other industries or professions as well, must also
have workers earning above or below these average or median incomes,
as much will depend on other factors such as experience, expertise, age,
overtime pay, etc. of the particular employee as well as the size,
requirement, affordability, etc. of the particular employer or factory. In
the absence of evidence or information as to how these figures were
compiled, collated or interpreted by the Census and Statistics Department
or any other direct evidence to challenge Madam Lee’s evidence, I am
unable to say that she could not have been able to earn as much as she
alleges, for which she has given detailed and logical explanation. It really
boils down to the question of credibility.
Having heard and observed her in evidence for days in
Court, I am in fact quite impressed by the fact that she was always
straightforward and forthcoming in her evidence, even in contentious or
controversial areas involving complicated figures or dates when she was
 - 63 -

never vague, difficult or evasive, and I find her evidence generally

consistent throughout the hearing.
Take for example, her evidence as to how she was able to
accumulate $3 million in savings from 1987 to 1996 to finance the
purchase of the Provident Centre Property. She first laid out the evidence
as to her financial background, her jobs and income in her 2 nd Affirmation
filed on 15th January 1999, but she never gave any evidence in details as
to how she actually saved up $3 million until she was cross-examined by
Counsel for the Husband when she was asked, as instigated by me, to
prepare a summary account in writing of her income and spendings from
1987 to 1996 to see if such savings were possible, as it appears on the
face, as argued by the Husband, too far-fetched that a working class
woman with Madam Lee’s background was able to save up $3 million
during those few years all by herself.
The point whether the summary was actually prepared by
Madam Lee or assisted by her daughter as suspected by the Husband, is
not really that relevant when she was able to demonstrate with the
summary based on the evidence already given by her earlier either in her
Affirmation or at the hearing that it was entirely possible.
One can of course find discrepencies in some of Madam
Lee’s lengthy evidence, such as her allegation that she was able to make
as much as $6,000 per month at some stage by subletting her Tokwawan
flat, when it was shown to her during cross-examination that it could only
be $2,000 odd, whilst her evidence that she was able to place $280,000 in
savings in foreign currencies after the purchase of the Lei King Wan
Property was contradicted by her earlier evidence that she had $400,000
from which she spent $240,000 purchasing the Lei King Wan Property
and so could only have $160,000 left instead of $280,000 as alleged, or
 - 64 -

that she was unable to say what interest rate or exchange rate it was in the
80s for Australian or New Zealand dollars which she says she had
invested at that time, but I also remind myself that such discrepencies
may be more to do with her stretching her memory over minute details of
things that happened more than 10 years ago rather than indication of her
having lied in her evidence.
No matter what the Husband says about Madam Lee’s
alleged income or savings, I don’t think he is able to dispute that Lei
King Wan Property was purchased by her or that the purchase monies did
not come from the Wife since, as argued by Counsel for Madam Lee, the
Wife could not have been able to save up $240,000 for the downpayment
after having worked as an insurance agent for only 1½ years, as it would
mean that she was then able to earn substantially and to put aside a net
sum of $15,000 every month during that period to be able to have that
kind of savings which is most unlikely, if not virtually impossible, for an
inexperienced insurance agent to achieve within such a short time. In
fact, it is the Husband’s submission that the Wife only started to earn a
good living as an insurance sales manager in the early 90s and after she
received 2 large sums of money from the sale of her taxi in 1993 and the
insurance payout to her after the death of her former boyfriend.
Nor can it be disputed that the purchase of the City Garden
Property in 1990 was partly funded by the sale proceeds of the Lei King
Wan Property. Although at first sight the timing of the sale of the Lei
King Wan Property and the purchase of the City Garden Property did not
seem to support that, Madam Lee was later able to explain satisfactorily
in her 2nd Affirmation as to such discrepency. She was also able to
produce documentary evidence that the downpayments and legal costs all
came from her personal accounts.
 - 65 -

As pointed out by Counsel for Madam Lee, the Husband’s

case regarding the Wife’s interest in the City Garden Property is not clear
at all. In his submission the Husband argues that since the Property was
in the Wife’s sole name, that the mortgage loan was obtained by her at
AIA, that the monthly instalments of the loan was paid by means of direct
debit from the Wife’s payroll account, that she also contributed to her
mother’s household expenses and paid pocket money to her mother, and
that even after her marriage in 1993 and no longer lived in that property,
she continued to pay money to her mother as well as the mortgage
instalments. He contends that these evidence support his case that the
City Garden Property belonged to the Wife and not Madam Lee.
However this does not reconcile with the fact that this property was
financed by the sale proceeds of Madam Lee’s Lei King Wan Property.
Madam Lee has explained the reason why the City Garden
Property was purchased in her daughter’s name and it was a perfectly
legitimate reason. I may have rejected the Husband’s evidence as to his
alleged interest in the Provident Centre Property, this was also the same
reason put forward by him as to why he allowed the Provident Centre
Property to be registered in the Wife’s name. It is also true that the Wife
had regularly contributed to her mother’s household expenses and pocket
money, which she says she has always done since she started earning as
part of her filial duties towards her parents, something which is not at all
uncommon in Hong Kong and which is also practised by the Husband in
his own family. This common financial arrangement between parents and
children contributing together towards the household expenses and / or
maintenance payments by children to parents do not necessarily thereby
create a beneficial interest in any property between them. There needs to
 - 66 -

be shown more direct and concrete evidence in particularly as to intention

and source of the purchase monies.
It is true that the monthly mortgage instalment for the City
Garden Property was paid out of the Wife’s salary. Madam Lee says it
was the internal arrangement of AIA and that her daughter therefore
simply just reduced her monthly maintenance to her accordingly. She
argues that this by no means follow that the Wife should be held as
having contributed towards the purchase monies. Madam Lee is also able
to prove, with supportive documentary evidence, that the downpayments
and costs came from her bank accounts and that it was the sale proceeds
of her Lei King Wan Property which funded the purchase of the City
Garden Property.
The Husband’s case is that the Wife had placed her income
with her mother and that they were then holding several joint accounts
which contained her money. This is what he said in his 2nd Affirmation:-

“12. The Petitioner had never told me why the property

at Lee King Wan was put into the name of Madam Lee,
but she had told me one of the reasons why a lot of her
money was kept in the name of Madam Lee. Although
Madam Lee knows nothing about the insurance business
she is and has for a long time been registered as an
insurance sales agent with AIA. The reason for that was to
enable the Petitioner to earn more commission and to help
the Petitioner avoid tax. The Petitioner had told me that
she had a practice of using Madam Lee’s name instead of
her own name as the agent for a good portion of the
policies that she secured for AIA. The reason for that, she
had explained to me, was twofold. Firstly, it would enable
her to pay less tax. Secondly, the way the commission
system worked at AIA was that when the Petitioner sold a
policy, she would receive a commission of x% and the
Petitioner’s immediate superior would also receive a
commission of y% for that policy; when an agent
registered under the Petitioner, of whom Madam Lee is
and was one, sold a policy, the agent would receive a
commission of x%, the Petitioner would receive a
 - 67 -

commission of y%, and the Petitioner’s immediate superior

would receive a commission of only z% which is less than y
%. The package was substantially better for the Petitioner
when she used Madam Lee’s name to sell a policy because
she would collect x% through Madam Lee as well as y% in
her own name, whereas the commission receivable by her
immediate superior would be less as z% is less than y%.

13. I know that the Petitioner is very concerned about

her tax liability and is always thinking of ways to lessen the
same. She was asked by the Inland Revenue to pay over $1
million in tax in 1995. She eventually entered into an
agreement with the Inland Revenue whereby she was
permitted to pay off the $1 million plus by instalments.”

And in his 7th Affirmation, he said the following about his

Wife:-

“10. ….. She tactically uses the names of others to secure

the sales of the insurance policies partly for avoiding tax
liabilities and partly for maximizing commission earnings.
The Petitioner, in particular used the names of her mother,
Madam Lee and one Mr. Cheung both identified as the
Petitioner’s debtors in paragraph 11 of the SYL’s
Affirmation, in securing a good portion of the policies for
AIA. I believe that a substantial part of her income had
been paid to the bank accounts of Madam Lee and Mr.
Cheung which now remained difficult to trace from the
payroll records or from the Petitioner’s bank accounts as
disclosed. As the Petitioner had in 1995 secured an
arrangement to pay more than $1 million income tax plus
penalties to Inland Revenue Department by instalments, I
strongly believe that the Petitioner had understated her
financial status in the SYL’s Affirmation. She is in reality
a wealthy person as a result of her success of the insurance
agency business and investments in real properties. She is
also capable of supporting herself and maintaining a
comfortable living standard independently of me
notwithstanding our separation.”

Clearly the only basis for the Husband to allege that the
Wife had placed her monies or income with her mother is that she wanted
to avoid tax liabilities and to maximize her commission earnings.
 - 68 -

Looking at the point of avoiding tax liabilities alone, one wonders how
the Wife by placing her income with her mother could avoid her tax
liabilities since she, as every tax payer in Hong Kong who is an
employee, would have to pay tax based on the information provided by
her employer, i.e. AIA, in the Employer’s Tax Return of Remuneration
submitted annually to the Inland Revenue Department on her behalf, and
in the absence of any evidence that she had other jobs or business which
she had not disclosed, I simply fail to see the logic in this argument of the
Husband.
As to his second basis for alleging that the Wife had placed
her income with her mother because she had been using her mother’s
name to sell insurance policies so as to earn more commission which, if
true, could only mean that she had placed her mother’s earned
commissions which he believes to be hers into her mother’s bank
accounts. However her mother only started to work as an insurance
agent for AIA in October 1990, whilst the City Garden Property was
purchased in early 1990 when the payments and expenses were paid from
Madam Lee’s account in February and March 1990, long before the Wife
could put her commissions allegedly earned through her mother into her
accounts. Hence it cannot be argued that such money of the Wife had
gone from her mother’s accounts into the purchase of the City Garden
Property.
Furthermore, is it not self-defeating to the Wife if the sole
purpose of placing her income with her mother was to avoid tax liabilities
and any possible investigation by the Inland Revenue Department, then
for her to withdraw such income from her mother’s accounts to purchase
the City Garden Property in her sole name without making some
documents such as a declaration of trust in favour of her mother just to
 - 69 -

show that the property did not belong to her in case she had to answer to
Inland Revenue Department’s enquiries ? On careful analysis of the
Husband’s arguments and for the reasons aforesaid, I have to say that his
basis for alleging that the Wife had placed money with her mother which
were later used to purchase the City Garden Property cannot stand and
that his argument that the Wife had a beneficial interest in that property is
rejected.
This however does not mean that it will bring a quick end to
the Husband’s case regarding the Wife’s interest in the Provident Centre
Property as it was purchased in 1996 and with Madam Lee admittedly
working under the Wife as an insurance agent from 1990 until 1997, the
Husband’s argument of the Wife placing her income with her mother
which eventually ended up in the purchase money for the property can no
longer be easily dismissed as too far-fetched or invalid. In fact the
Husband has alleged, in support of his argument, that the Wife was
penalised by the Inland Revenue Department in the early 90s for failure
to disclose accurately her taxable income and was ordered to pay $1
million as additional tax, and that she and her mother had set up joint
bank accounts in which they mixed their monies together for no good
reason.
The Wife denies that she was asked by the Inland Revenue
Department to pay as much as $1 million for tax and penalty. She
explains that it has been a practice in her trade to deduct expenses such as
secretary, printing, entertainment, etc. from the gross income for filing
tax returns, but in 1994 the Inland Revenue Department decided not to
allow certain items of expenses claimed by her over the years and hence
she was required to pay additional tax dating back from 1988 to 1993
totalling $329,005 including 5% surcharge as she asked to pay by
 - 70 -

instalments. She has produced copies of her various tax returns in that
period and the demand for additional tax as evidence to refute the
Husband’s allegation of her having to pay $1 million in additional tax and
fine. Regardless of the correct amount of additional tax that the Wife had
to pay, I am unable to see its relevancy to the issue over her possible
interest in the Provident Centre Property, the same can be said about the
fact that the Wife has not repaid her mother’s loan of $280,000 after
selling her taxi which is not at all relevant to the issue.
The Husband’s case of the Wife using her mother’s name to
sell insurance policies in order to earn more commissions, on the other
hand, may be more relevant if true and that these commissions were paid
into her mother’s bank accounts in trust for the Wife and were later used
to purchase the Provident Centre Property, in particular of the fact that
they had at the material time held joint accounts.
Madam Lee did appear not very knowledgeable on how
insurance premia are calculated or on the differences between different
types of insurance policies under cross-examination, which she gave the
excuse that she did not have to do the paper work herself in her line of
work. But if what the Husband alleges is true that her earned
commissions in fact belonged to the Wife, and since she had no other job
or income when she was said to be working as an insurance agent, then
how was she able to meet her own personal or household expenses during
these years ? Such an arrangement, if true, would mean that the Wife
would have to fully support Madam Lee and her household and given the
fact that Madam Lee was only earning an average income of about
$10,000 per month as an insurance agent from 1990 to 1995 according to
the summary prepared by her to demonstrate how she was able to save up
$3 million between 1987 and 1995, which is the only evidence on her
 - 71 -

income as an insurance agent before the court, I find that it hardly

justifies such an arrangement by the Wife and more importantly, there
would not be much left for her savings after meeting Madam Lee’s living
and household expenses, let alone to finance the purchase of a $8 million
property.
It is true that Madam Lee had held joint accounts with the
Wife at that time, which she explains were opened at the advice of the
people working in the bank which she used to deal with for security
reason due to her age, which cannot really be said to sound unreasonable
or suspicious, in particular in view of the close relationship of mother and
daughter and the fact that Madam Lee’s husband is mentally disabled.
This include a savings account and 2 fixed deposit certificates with the
National Commercial Bank.
Whilst I can understand Madam Lee’s reason for adding her
daughter’s name to these bank accounts of hers, there is the question of
why the Wife would also deposit her money such as the sale proceeds of
her taxi or insurance premium payments of her clients into these accounts
so as to mix their monies together, in the words of the Husband, rather
than into her own bank accounts.
The Wife explains that as a very busy insurance sales
manager who also had to assist the Husband in running JP, she simply
did not have time to do her own banking as well as that of JP, she
therefore had to rely on her mother to run such errands for her including
drawing and depositing money and issuing cheques on her behalf, and to
do so her mother would have to operate such accounts which explains the
reason why her monies including insurance premia paid by her clients
were deposited into these joint accounts.
 - 72 -

When queried how she was able to differentiate her monies

from her mother’s in these accounts, the Wife explained that she would
keep a daily record of all the deposit of her monies on some pieces of
papers which she would then cross-check against the bank statements,
which is also why there were some notes or names next to certain entries
in the bank statements indicating the identity of her clients who had
deposited their insurance payments.
The Husband does not accept this explanation and argues
that it is incredible that the Wife would adopt such a clumsy and
inconvenient method to handle her clients’ payments when it would have
been much simpler for her to open a designated account for such
payments with authority to her mother to do the banking for her in which
case she would not have to go through all the trouble of making records
of payments and cross-checking them in the bank statements so as to
differential her monies from her mother’s. The Husband’s suggested
method certainly looks to me a much more sensible way of doing things
but people do not necessarily do things in their daily life in the most
reasonable or convenient manner and I cannot say that the Wife’s method
is so inherently illogical or unreasonable that it should not believed. One
should still have to look further for more concrete evidence as to her
interest in the property.
The same can be said of the Husband’s argument that it was
highly unlikely that Madam Lee would invest in something as substantial
as the $8 million Provident Centre Property when all along she had
merely invested in much smaller scale such as the Kornhill Property, or
even the Robinson Place Property if her evidence on that property was to
be believed, which involved only a few hundred thousand dollars in joint
investment with others. He argues that her alleged sole investment in the
 - 73 -

Provident Centre Property is wholly inconsistent with her conduct in the

past, and is strong indication that either it was in fact not her investment
but her daughter’s, or at least it was their joint investment.
This argument, like the one before, seems valid on first
glance but is nevertheless circumstantial based on various assumptions
and not on any concrete evidence. Madam Lee has explained that after
her daughter’s marriage, she found her City Garden Property too big for
just her and her husband and she had planned to purchase a smaller flat
by returning her public housing unit to the government for a $600,000
housing loan. She says as she was going to sell the City Garden Property
and with about $3 milllion in savings, she decided to invest in the
Provident Centre Property because she had viewed similar premises
which she found to have attractive features to make it a good investment,
and as she had been following the property market closely and was
convinced that the market would continue its upward trend so as to make
her investment easily profitable, in particularly if she were to sub-sell it
as a confirmor. She says she could also rely on her daughter’s assistance
in obtaining low-interest AIA loan in case she had to complete the
purchase.
Every investment of course has its risk but it cannot be said
that Madam Lee’s investment in the Provident Centre Property was so
risky or financially improbable that it could not be her sole investment
without the financial backing or involvement of her daughter. She has
explained that she had the means for such an investment, and with the
property market situation at that time, I cannot say that Madam Lee’s
alleged sole investment in the Provident Centre Property is so unlikely
that her evidence should not be accepted.
 - 74 -

The Husband has also introduced a witness to challenge

Madam Lee’s evidence that she had actually viewed the Provident Centre
Property before instructing the Wife to purchase it. This witness, a Miss
Wong was the former owner of City Property Agency which acted for the
then owner of the Provident Centre Property and was therefore
responsible for showing the property to all potential buyers. She first
gave a written statement in respect of the sale of the property to the Wife
as follows:-

“I am now employed by Emperor Security Company at 23-

24 Floors, Emperor Group Centre, 288, Hennessy Road,
Hong Kong.
In or about 1991, I established City Property Agency
company at Olympic Centre, Electric Road, North Point,
Hong Kong dealing as property and estate agents. In or
about 1995, I moved my Agency company to Wharf Road,
North Point, Hong Kong.
So far as I can recall, in or about February, 1996, my
agency company was entrusted by the owner of Provident
Centre to put on for sale of this property. About one or
two days later after my agency company received the
appointment, one Miss Yiu of U P Agency company
brought along intended purchasers to my company to view
this property. When they arrived, I became aware that
they were Mr. Yiu (whom I met before), one Mrs. Yiu Sze
YL and Mr. Yiu’s mother, (Mrs. Yiu).
I then brought them to view the property and after
negotiation, Mr. Yiu immediately paid the initial deposit
with his wife’s cheque and the provisional Chinese
agreement for sale of this property was signed by his wife.
During conversation with Mr. Yiu’s family members, I was
aware that the property was purchased intended to be
home of and occupied by Mr. Yiu’s family.
A few months after the sale of the Provident Centre, Miss
Yiu of U P Agency company again brought intended
purchasers to negotiate for the purchase of the Fung
Cheong Building and to view the property. On this
occasion, it was Mrs. Yiu Sze YL and one elderly woman
came with Miss Yiu. When I met Mrs. YiuSze YL who
introduced me the elderly woman with her was her mother,
Lee. Mrs. Yiu Sze YL told me that she intended to
purchase Fung Cheong Building for the home of her
 - 75 -

mother. It was the first time I met and knew Sze’s mother,
Lee.”

Her statement does not really contradict Madam Lee’s

evidence as it was her case, and that of the Wife, that after having viewed
the property, it was decided that the Wife would go with the Husband and
his family members to view the premises again pretending to purchase it
as their home for the purpose of trying to negotiate a good price with the
owners, as it would be easier to get the owners to come down from their
demand if they thought that the property was to be purchased as a home
rather then as an investment. If this was indeed the arrangement, it is no
surprise that Miss Wong got the impression that the Husband and
his family was buying the property.
Ms Wong was then called to give oral evidence at the
hearing when she revealed that she closed down her agency in 1998 and
that she gave her statement and evidence just from her memory without
referring to any business records or documents of the particular
transaction as she has not kept them after the close down of her previous
company. Despite this she insisted that she was able to remember the
transaction because she personally knew the Husband as a fellow real
estate agent who also worked in the neighbourhood of her agency, and
that neither she nor any of her staff had ever shown the property to
Madam Lee. When asked by Counsel for Madam Lee as to how she was
able to remember that Madam Lee was never taken to view the property,
she replied that her staff would have reported to her if they had taken
Madam Lee to view the premises as they would have meeting every
evening to review their work of the day and also to keep record of all
such viewings for each property of their clients.
 - 76 -

Even assuming Ms Wong has amazing memory, I find it

incredible that she was able to tell just from memory that neither she nor
her staff had ever brought Madam Lee to view the premises, something
which was supposed to occur more than 3 years ago in a business in
which she and her staff must have dealt with many clients and potential
clients and brought them to view countless different premises almost
every day. She might well have daily meeting with her staff to discuss
about various transactions, but I do not see the point of discussing
unsuccessful case or uneventual viewing as in the case of Madam Lee, or
for that matter to keep such record. And even if there were records, Ms
Wong has conceded in her evidence that she never referred to such
records before coming to Court to give evidence as she has not kept them
after her business had ceased.
I am not suggesting that Ms Wong has lied in her evidence.
Her evidence about what she saw at the premises on 3 rd February 1996
when the Wife signed the provisional sale and purchase agreement was in
general accepted by the Wife and Madam Lee to be accurate. I believe
that the reasons why she was able to give such details is probably more
of the case that she is able to remember the Husband as an acquaintance
and that she had been reminded of the transaction from discussions with
the Husband when he asked her to be his witness. I however have great
difficulty accepting her basis for alleging that Madam Lee had never
viewed the Provident Centre Property.
Madam Lee has already explained the reason why her
investment in the Provident Centre Property was purchased in the Wife’s
name, and has produced evidence to show her subsequent repayment to
her daughter of the several mortgage instalments debited from her
daughter’s salary account after the sale. She has also explained that as
 - 77 -

the investment was only for a short term and as she did put the property
up for sale in January 1997 by newspapers advertisement, the unfortunate
timing of the sale and her daughter’s commencement of the divorce
proceedings in the same month of January 1997 was merely a
coincidence and not the Wife’s planned attempt to dissipate her assets.
In the absence of any other direct or concrete evidence of the Wife’s
contribution to the purchase of the property, and in the circumstances of
the case and the evidence that have been presented before me, there is
very little merits or substance left in the Husband’s argument that the
property was the Wife’s investment.
The Wife married the Husband in October 1993. She was
at the same time made a director and shareholder of the Husband’s
company JP which was the main and most important matrimonial asset of
the parties. The Wife says she had during the marriage, i.e. between
1993 and 1996 paid about $1.8 million either as loans or injection of
capital into JP. The Husband says that the Wife’s total contribution to JP
was much less, only about $535,000 as of 31st December 1995. The Wife
has produced copies of her bank statements, deposit slips, etc. as
evidence of her alleged contribution. She also says in evidence that in
addition she also contributed regularly to the running expenses of JP and
the family household expenses such as salary of the maids employed at
different time of the marriage as well as the child’s expenses. She
reasons that as she earned only between $30,000 to $40,000 per month on
average during the marriage, it would be virtually impossible to have any
savings when she had to meet her own personal expenses as well as those
expenses and payments aforesaid, let alone to have $3 million to invest in
the Provident Centre Property.
 - 78 -

It is unfortunate that the parties did not go into details on the

evidence of the Wife’s contribution to JP at the hearing to enable one to
arrive safely any conclusion as to the exact amount of the Wife’s
contribution, but even if she only contributed as little as $500,000 odd
between 1993 and 1995 as alleged by the Husband, it would still amount
to an average of more than $20,000 per month. Taking into account of
her own personal expenses and her household expenses, as well as her
monthly maintenance to her mother, I agree with the Wife that her
income was simply not sufficient to enable her to at the same time
accumulate such savings for the purchase of the Provident Centre
Property.
Furthermore, it is undisputed evidence that the Wife had
during the marriage been actively involved in her husband’s various
investments not just through JP in the real property market in Hong
Kong, but also in other investments or project in China. In fact she had
started such joint investment with her husband even before their marriage
in 1993. With their marriage generally a happy one until late 1996 or
early 1997, and with their various joint investments generally successful
and profitable at that time, and the fact that the Wife was given almost a
free hand to manage the accounts of JP, I find it difficult to believe that
she would still choose to secretly put aside some of her own income or
monies with her mother and then in early 1996, shortly after the birth of
their first child, she would use some of these secret funds to purchase
such a substantial property as the Provident Centre Property as her own
investment without allowing the Husband any share therein, yet at the
same time decided to involve him and his family in the viewing and
purchase of the property. The Husband’s argument in the circumstances
is simply not reasonable or logical, and I am satisfied that the Wife has
 - 79 -

successfully rebuted the presumption that she had any beneficial interest
in the property.

Conclusion
This case was complicated by the intricate financial
relationship amongst the 3 parties resulted in enormous amount of
evidence given in a trial which lasted almost 30 days, with most of the
evidence diametrically opposed between the 2 sides. However, with also
many of the facts of the dealings and transactions between the parties
could not be disputed, it is virtually impossible for the evidence of the
party guilty of not telling the truth to hold up consistently and logically
against those facts, and at the end it is inevitable that the case of that
party must fail upon close scrutiny. I have no difficulty in concluding
that the Husband is that guilty party. On the other hand, the evidence of
both the Wife and Madam Lee have been so consistent and so well
corroborated each other that the logical and reasonable conclusion is that
they have told the truth. Having considered all the facts and
circumstances of the case and the evidence before me, I am satisfied that
the Provident Centre Property was Madam Lee’s sole investment, that the
Wife was merely holding the property in trust for her and that neither the
Wife nor the Husband had any beneficial interest therein. It follows that
the sale proceeds of $8.6 million rightfully belong to Madam Lee and that
the Husband’s S.17 application must be dismissed, with costs to both the
Wife and Madam Lee not just because costs should follow the event but
also because I find that the Husband has fabricated his evidence in the
application. My order is therefore as follows:-
1. The Respondent Husband S.17 application is
dismissed;
 - 80 -

2. The Respondent to pay the Petitioner Wife and

Madam Lee their costs of and incidental to the
application to be taxed if not agreed with Certificate
for Counsel. This is an order nisi to be made absolute
at the expiration of 21 days.

( Bruno Chan )
District Judge

Miss. Jennifer Tsui instructed by M/S Wong, Hui & Co. for Petitioner /
1st Respondent.

Mr. Hylas Chung instructed by M/S Josip Ma & Co. for Respondent
/Applicant.

Miss. Anita Yip instructed by M/S Chaine, Chow & Barbara Hung for
2nd Respondent.