Posts Tagged ‘family’

Did son hold property on trust for his mother?

January 19, 2017

In Primecredit Ltd v Yeung Chun Pang Barry ([2016] HKEC 2667) title to the family home was in the name of a father and his son as joint tenants. The father died and the son became sole owner by virtue of the right of survivorship. Primecredit was a judgment creditor of the son. It obtained a charging order in respect of the debt. The defendant’s mother claimed that she had a beneficial interest in the property under a common intention constructive trust or a presumed resulting trust.

The mother had the burden of proof to show that the beneficial ownership was different from the legal ownership. She had undoubtedly contributed to the purchase price. On the facts, however, the court did not believe that a trust in her favour should be inferred from these payments. She had intended to make a gift of the contributions to her son.

Michael Lower

Advertisements

Legal joint tenancy: unequal contributions often not enough to establish common intention constructive trust in the family context

October 21, 2015

In Chow Chung Kwan ([2015] HKEC 2112, CFI) H and W bought property as joint tenants and jointly charged it to a bank as security for the loan to fund the purchase. H’s bankruptcy severed the joint tenancy by operation of law. W claimed that she had provided the entire purchase price and that H and W held on trust for W alone under a common intention constructive trust.

Ng DJ referred to the recent review of the law in this area in Mo Ying v Brillex Developments and to the principles concerning common intention constructive trusts of the family home held in joint names in Jones v Kernott [51]. She also referred to the statements as to the whole course of conduct in Oxley v Hiscock and Stack v Dowden. 

The starting point where H and W held as joint tenants was that this was the actual ownership arrangement (Stack v Dowden). It was for W to prove that there was some other common intention ([28]). The fact that title was held by H and W as joint tenants and that they had jointly charged it to the bank provided the starting point for the analysis (Ip Man Shan Henry v Ching Hing Construction Co Ltd and Chan Chui Mee v Mak Chi Choi). Unequal contributions to the purchase price and mortgage installments will usually not be enough to establish the existence of a common intention constructive trust (Re Lau Hiu Tuen, bankrupt). Ng DJ said:

’35. In a family setting, if a married couple decides to buy a family home, almost always with the help of a mortgage for which they are jointly and severally liable, that is on the face of things a strong indication of emotional and / or economic commitment to a joint enterprise. The fact that parties in a trusting personal relationship do not hold each other to account financially is underpinned by the practical difficulty, in many cases, of taking such account many years later of the ups and downs of living together as a married couple.

36. A holistic approach should be adopted, and other than financial contributions for the purchase and usual outgoings, other relevant factors including how and why the property was acquired and the nature of the parties’ relationship would be considered in ascertaining the couple’s intention’

In fact, the facts did not establish that W had shouldered responsibility for making all of the payments. She had not established the existence of a common intention constructive trust in her favour.

The question then was whether H’s trustees in bankruptcy were entitled to an order for sale under section 6 of the Partition Ordinance. Section 6(1) focuses the question on the interests of ‘all of the persons interested.’ A sale was clearly not in the interests of H and W (both elderly and infirm). On the other hand, the creditors had a right to be paid. Ng DJ noted a difference of judicial opinion as to whether priority should be given to W’s interests and she had not been addressed on this conflict. She decided that she could not refuse an order for sale unless this were for the benefit of all of the co-owners (ie of the creditors, represented by H’s trustees in bankruptcy, as well as of W) ([40] – [46]). She granted the order for sale.

Michael Lower