Chau Ting Yung v Chau Ming Yung

Supreme Court of NSW|2013-07-25|Before: Kunc J

Summary and orders 1The plaintiff and the defendant were registered as joint tenants of a property at North Ryde (the "Property"). The plaintiff seeks a declaration that he and the defendant hold the Property as tenants in common in unequal shares of 80% and 20% respectively. 2At the conclusion of the hearing I made the following orders: (1)The plaintiff's statement of claim is dismissed; and (2)The plaintiff to pay the defendant's costs of and incidental to the proceedings. 3I was able to do so because it was abundantly clear on the evidence that at the time the Property was purchased the parties intended that it was to be the defendant's and the plaintiff was not to have any beneficial interest. Nothing in what subsequently occurred between them changed that. 4I now give my reasons for that conclusion. In doing so I record that while he was legally represented when the proceedings commenced and at least his initial evidence was filed, the plaintiff appeared for himself at the hearing. Mr T.S. Pickering of Counsel appeared for the defendant.

The undisputed facts 5By the conclusion of the hearing most of the facts were undisputed. 6The plaintiff, Mr Chau Ting Yung and the defendant, Mr Chau Ming Yung are brothers. The defendant is the eldest brother of the plaintiff. 7The defendant was employed by Coca-Cola in Hong Kong. In August 1989 he moved to Sydney to work with Coca-Cola South Pacific. He had about $150,000 from the sale of his Hong Kong apartment. 8The defendant asked the plaintiff to help him find a house in Sydney. The plaintiff found the Property. The defendant was unable to get bank finance in his own name because he had only recently arrived in Australia. The plaintiff did have an employment record in Australia. It became apparent that finance would be forthcoming if they applied for a loan jointly. 9The plaintiff and the defendant agreed that the plaintiff would lend his name to the finance application on terms that, as between themselves, all loan repayments would be the responsibility of the defendant. Since they had to present to the financier as joint purchasers they agreed that they would be listed on the title to the Property as joint tenants. 10On 22 December 1989 the plaintiff and the defendant entered into a contract to purchase the Property for $210,000 in their joint names. 11The Property was the subject of a mortgage with the Commonwealth Bank of Australia (the "CBA") to secure a loan in the amount of $100,000. The loan was also in the joint names of the parties. The defendant paid the balance of the purchase price from his own funds. 12The defendant lived in the Property from 1990 until August 1993 following which he returned to live in China. The plaintiff lived in the Property from 1993 until 1998 and then later from 2009 until the time of these proceedings. He never paid rent for his occupation of the Property but contributed to its maintenance and upkeep. 13While jointly liable to the CBA, in accordance with the agreement between the parties the defendant alone made all the loan repayments. 14In 1993, the plaintiff approached the defendant and asked if the Property could be used to support a loan for the plaintiff's own purposes. These purposes included purchasing a business or investment property with his then wife. The defendant agreed to make the Property available for that purpose on terms that, as between them, the plaintiff would be responsible for making all the repayments on drawdowns which the plaintiff made for his own purposes. 15In April 1993 the mortgage was re-financed for $110,000 in the joint names of the parties with Advance Bank. An amount of approximately $28,000 was still owing to the CBA under the original loan. This amount was repaid out of the funds provided by Advance Bank and the CBA loan was discharged in May 1993. The remaining amount of $82,126.55 was deposited into a joint cheque account with Advance Bank in the names of both parties (the "Advance account"). 16The plaintiff withdrew money from the Advance account for his own use. He and his then wife bought a business. The defendant did not withdraw any money from the Advance account. The plaintiff deposited various sums of money into the Advance account in repayment of the drawdowns he had made. The Advance Bank loan was discharged on 28 April 2000: by whom was a matter of controversy which I consider below. 17In 2005 the plaintiff signed a transfer of the Property into the sole name of the defendant. He also signed an application for a replacement certificate of title. This transfer was registered and a new certificate of title was issued on 5 June 2007 in the sole name of the defendant. These events are also surrounded by controversy which I resolve below. 18In 2008 the plaintiff and his wife Ms Shirley Yung separated. On 10 June 2010 the plaintiff and Ms Yung executed a Binding Financial Agreement by which their marital property was divided. This document made no reference to the Property. The disputed facts 19There are four areas of factual dispute between the parties: (1)Whether the plaintiff contributed $400 to the purchase price of the Property; (2)Whether it was the intention of the parties in placing the plaintiff's name on the CBA loan agreement and the certificate of title for the Property that they would in fact and in law hold the Property as joint tenants; (3)The circumstances in which the transfer was executed and its subsequent registration. The plaintiff claimed throughout the proceedings that he was pressured into the transfer by the defendant and that registration occurred unbeknownst to him; and (4)How much of the amount owing to Advance Bank was paid by the plaintiff.

Did the Plaintiff contribute $400 to the purchase price? 20In his statement of claim and in his affidavit and outline of submissions of 24 July 2013 the plaintiff claimed that both he and the defendant purchased the Property with monies contributed by both parties. The plaintiff acknowledged in cross-examination that the defendant provided a "substantial amount" of the purchase price. This included paying the stamp duty associated with the purchase. When asked by Mr Pickering to say how much he (the plaintiff) contributed to the purchase price, the plaintiff asserted that he had paid a $400 holding deposit on the Property at the time they inspected it. The plaintiff did not suggest he made any other contribution to the original purchase price of the Property. 21In both his affidavit and outline of submissions, the plaintiff made no mention of this $400 cash payment. Neither the defendant nor any other witness has attested to a $400 cash payment being provided by the plaintiff as his contribution to the purchase price of the Property. 22I do not need to resolve whether the $400 was in fact paid by the plaintiff, because even if it was it would not avail him for two reasons. First, I find the sum to be de minimis. Second, the payment of a small holding deposit would not displace the firm view I have reached as to the parties' intention at the time the Property was purchased (see paragraphs [25] to [33] below). In the absence of clear and specific evidence I could not accept that $400 was intended to entitle the plaintiff to a beneficial interest as joint tenant or otherwise in the Property. 23The plaintiff raised another line of argument in his oral evidence and submissions. But for the $400 it was accepted that, as has been agreed between them, the defendant alone made the repayments for the CBA loan. The plaintiff argued that there was an implied agreement between the defendant and himself that the defendant would repay the CBA loan, whilst he (the plaintiff) would pay for utilities and contribute to the general maintenance and upkeep of the Property to justify his interest in the Property. 24I do not accept this for two reasons. First, there was no mention of this apparently implied agreement in the plaintiff's affidavits or outline of submissions. Second, for the entire time the plaintiff lived in the Property he did not pay any rent to the defendant. It is clear to me that if there was any agreement about this between the parties (and I am not sure there was - the flavour was far more of an informal family arrangement) it was for the plaintiff to live on the Property rent-free on the proviso that he contributed to the general upkeep and maintenance of the Property.

The plaintiff's name on the certificate of title 25The plaintiff's case shifted during the proceedings. As recorded above, his statement of claim sought a declaration that he and the defendant held the property 80%:20% respectively as tenants in common. This was based on a case that those proportions represented their respective contributions to the purchase price of the Property. That position changed in the hearing when the plaintiff accepted that (with the possible exception of the $400 holding deposit) the defendant had made all the CBA loan repayments as well as providing the balance of the purchase price. 26The position then seemed to shift to an assertion that because the plaintiff (so he alleged) had paid out the balance of Advance Bank loan (which had included the repayment of so much of Advance Bank loan as had discharged the $28,000 balance of the CBA loan), that $28,000 represented his contribution to the purchase price. However, that position did not translate into a submission that he held a proportionate interest in the Property represented by that contribution. Rather, the plaintiff claimed that his name was intentionally placed on the certificate of title and loan agreement with the CBA because the parties had the intention of holding the Property as joint tenants. 27By contrast the defendant maintained his position that the plaintiff's name was intentionally placed on the certificate of title for no other reason than to enable the defendant to secure financing to purchase the Property. He submitted that at no time was it his intention or that of the plaintiff for the plaintiff to have a beneficial interest in the Property. 28I accept the defendant's submission over the version of the plaintiff for the following reasons. 29First, while it is clear that the parties' family had a practice of mutual assistance in financial matters, there is a real improbability in the suggestion that the defendant - who was paying $100,000 from his own funds and repaying the whole of the CBA loan - intended to confer what would otherwise be such a substantial gift on the plaintiff. The complete absence of any contemporaneous written or oral corroboration (other than the plaintiff's own assertions) is a significant matter which tells against the plaintiff. The defendant's explanation for the plaintiff's name being on the title to the Property is far more plausible. 30Second, the views which I have expressed in the previous paragraph are fortified by the fact that the plaintiff accepted in cross-examination that a condition the plaintiff imposed of entering into the arrangement with his brother was that the plaintiff would not, as between themselves, be liable to contribute to the repayments of the CBA loan. Furthermore, the plaintiff accepted that it was the defendant who in fact made all such repayments. 31Third, at various critical points in the history, especially at the time the plaintiff says he was forced into signing a transfer of his interest in the Property to his brother (see paragraphs [34] to [40] below), the plaintiff says he insisted that he told those present that he had a lawyer available and the he would be seeing his lawyer. The plaintiff accepted that as the principal of a real estate agency (which he was at the relevant times) he had daily contact with solicitors and easy access to them. However, at neither the time of signing the transfer nor at any other time when it might have been logical to do so (for example, when he was put on notice that the transfer was going to be registered) did the plaintiff instruct a solicitor to assert the plaintiff's case that the true arrangement was for him to be a joint tenant in the Property. 32Fourth, the plaintiff separated from his wife, Shirley Yung, in 2008. On 10 June 2010 they executed a Binding Financial Agreement (the "Agreement") in which he did not make mention of any interest in the Property. This Agreement was one which "relate[d] to all property and financial resources of the parties". In cross-examination the plaintiff contended that he did not mention the Property because he was unaware of his potential interest until after the Agreement was executed and that he was waiting for further legal advice. He did not in fact notify his ex wife until April 2012 (several months after these proceedings were commenced) that some adjustment to the Agreement would be required to account for his alleged interest in the Property. 33Given the earlier occasions when he failed to seek legal advice when he said he was going to do so, I do not accept the defendant's explanation. The fact that he did not include an alleged interest in the Property in the Agreement, or at least assert and investigate it with a lawyer prior to signing the Agreement, is consistent with the conclusion that I have reached that the plaintiff understood from the outset that he was never intended to have a beneficial interest in the Property.

The execution and later registration of the transfer 34In his submissions and in oral evidence, the defendant claimed that in February 2005 he visited the Property and asked the plaintiff to sign a transfer of the plaintiff's interest in the Property and an application for a replacement certificate of title (the "application"). The defendant said that the plaintiff responded "Give it to me, I do it now" without asking any questions or seeking a negotiation. 35In contrast, the plaintiff said that he was forced into signing the transfer and that it was registered without his knowledge and consent. In his statement of claim he said that he refused to sign, repeatedly telling the plaintiff that he wanted to see a lawyer. The plaintiff further claimed that the defendant became very angry and pushed him and said "sign it, sign it now, now, now, now". The plaintiff then alleged that the defendant said "this is for record only, not for transfer". 36The plaintiff's version of events is rejected for four reasons. 37First, his recollection of other aspects of what occurred is poor. He says the events occurred in 2004. I am satisfied they did not. The defendant was not in the country at that time. The events occurred in February 2005. Next, the plaintiff says he signed only one document. It is clear from the evidence that he signed two, the other document being the application. 38Second, the defendant adduced evidence from two other family members who were present at the time the plaintiff signed the documents. Their recollection accorded with the defendant's. One of them, the defendant's nephew Kai Tai Fan, was the witness to the parties' execution of the documents. He was cross-examined by the plaintiff by telephone in Hong Kong and rejected the plaintiff's version of events. I accept Mr Fan's evidence that he did not hear any exchange of the kind referred to in the plaintiff's statement of claim, nor did he hear the plaintiff suggest that he wanted to see his lawyer. 39Third, by his own admission the plaintiff did not take steps immediately to consult a lawyer, notwithstanding he had ready access to solicitors at the time. If he really felt a grave injustice had been done to him I find it inconceivable that he would not have sought urgent legal assistance as he says he threatened to do at the time. 40Fourth, the notion of signing the transfer as a record only makes no sense. The plaintiff was unable to articulate what it might have been intended to record as opposed to effecting the transfer in accordance with its terms. 41The executed transfer was mislaid, but was found again in 2007. On 30 May 2007 the defendant's solicitors (Eric Fung & Co) emailed and faxed a letter to the plaintiff notifying him that the executed transfer would be registered. The plaintiff denies receiving these, but to the extent it is necessary I find he did. Not a lot turns on this because the plaintiff admits that he had a telephone conversation with Mr Fung at this time. During the course of his evidence I asked the plaintiff if he understood after speaking to Mr Fung that the transfer would be registered. He said he did. He also said he told Mr Fung he objected to the registration and that he would be contacting his lawyers. I asked the plaintiff if he immediately or at any later time approached a lawyer to seek to stop the registration of the transfer. He said he did not. 42The plaintiff's consent was not required to the registration of the transfer. However, even accepting his account of his conversation with Mr Fung, I find that the plaintiff's failure to see a lawyer immediately to assert his claim is the best evidence that the plaintiff understood that it was never intended by that parties that the plaintiff should have a beneficial interest in the Property.

The plaintiff's payment of the loan with Advance Bank 43In his statement of claim, the plaintiff alleged that during the period of August 1993 and February 1999 he paid a total of $144,070.00 to Advance Bank in servicing the loan. This amount increased to $155,769 from the period of August 1993 to March 2000 in the plaintiff's outline of submissions. Notwithstanding, it is clear from his submissions that because he claimed his repayments to Advance Bank included the $28,000 of the Advance Bank loan that had been applied to discharge the mortgage with the CBA, the plaintiff believed he was entitled to a share in the Property. During the course of cross-examination, when I asked the plaintiff if this was his view, he agreed. 44There is no dispute between the parties that the plaintiff paid back those amounts which he had drawn down for his own purposes from the Advance account. There is, however, a dispute about who repaid the $28,000 component. The evidence is unclear. 45The defendant, supported by the evidence of the plaintiff's ex-wife, said that he repaid it. His evidence was that since he was living in Hong Kong he would either transfer cash to family members to pay into the Advance account or would give it to them while he was visiting Sydney. In cross-examination the plaintiff conceded that such deposits from the defendant were possible. 46The plaintiff says he repaid the whole of the Advance Bank loan, including the $28,000. At one point in his cross-examination he suddenly asserted the defendant had asked him to make the final repayments. This had never been suggested in his voluminous earlier affidavits and submissions and I do not accept his evidence to this effect. 47The Advance account bank statement shows that the Advance Bank loan was paid out on 24 March 2000 by a cash payment of $11,698.98. Both parties say they provided the final repayment. The plaintiff seeks to prove it by relying on a note in his handwriting on a letter of 4 February 2000 from the Advance Bank on which he has written "Closed. Paid. 24/3/00 $11,698.98". The difficulty for the plaintiff is that while he was scrupulous in keeping receipts (which are in evidence) for his other repayments, he is unable to produce a receipt for this payment. On the other hand, the defendant can do no more than point to the repayment and say that he paid it in cash with his funds. 48There is insufficient evidence from both parties to enable me to find who made the final repayment. However, it is unnecessary for me to determine this issue (or who repaid any part of the $28,000) because it will make no difference to the final outcome. This is because I am satisfied that at the time the Property was purchased the parties did not intend the plaintiff to have a beneficial interest. Nothing in the arrangement which they subsequently reached about providing funds to the plaintiff changes that. The arrangement was, in effect, the defendant making a personal loan to the plaintiff secured against the Property. It is quite clear that made no alteration to the fundamental proposition that the plaintiff's name was on the title to the Property in name only.

Legal principles and resolution 49The legal principles invoked by the plaintiff are not in doubt. Where two or more persons contribute to the purchase of property which is conveyed to them in their joint names, in the absence of the application of the presumption of advancement or evidence of contrary intention at the time the property was purchased on the part of the person who paid the purchase money, the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless the contributions are equal: Pearson v Pearson [1961] VR 693; Martin v Martin (1963-1964) 110 CLR 297; Calverley v Green (1984) 155 CLR 242; Muschinski v Dodds (1984) 160 CLR 583. 50In the present case the presumption of advancement of the plaintiff by the defendant will not apply: Noack v Noack [1959] VR 137 (although the dictum in that case concerned sisters, I see no difference in principle with brothers and the facts do not support the conclusion that the defendant was in loco parentis to the plaintiff). 51There is no doubt that the defendant paid the purchase price for the Property including the repayments on the CBA mortgage. The question then becomes what was the defendant's intention? For the reasons set out in paragraphs [25] to [33] above I was well satisfied at the conclusion of the hearing that not only the defendant's intention, but the agreement between the parties, at the time the Property was purchased was that the entire beneficial interest in the Property was to be with the defendant. 52Furthermore, there is nothing in the arrangement that they subsequently entered into about providing a loan to the plaintiff for his own purposes against the security of the Property that suggests either party, and certainly not the defendant, intended that arrangement to work a change in the beneficial entitlement to the Property. 53Two other matters need to be dealt with. First, even if some undue pressure had been brought to bear on the plaintiff to sign the transfer of his interest in the Property (and I have found that there was none), it would not have resulted in any relief for the plaintiff. This is because as beneficial owner of the entire Property the defendant was entitled to require the plaintiff to convey his (the plaintiff's) legal interest in the Property to the defendant. Registration of the transfer perfected the arrangement that I have found always applied in relation to the beneficial ownership of the Property. 54Second, even if I were satisfied that the plaintiff had repaid so much of Advance Bank loan as represented the $28,000 original balance of the CBA loan, this would not give rise to a proprietary interest in the Property by the plaintiff. The overriding conclusion I have reached as to the parties' intentions dictates this must be the case. In any event, I would characterise any such payment by the plaintiff in one of two ways. First, it was a gift as part of the general doing and repaying of favours between members of the family. Second, if it was not a gift and the plaintiff sought to recover it from the defendant, it would as a matter of equity have to be set off against the occupation rent that would be attributed as payable by the defendant for his years of rent-free occupation of the Property: Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,497. 55I have no doubt that by the time the matter came on for hearing the plaintiff had a genuine conviction that by reason of his name being on the title and the repayments he had made in connection with the Advance Bank loan, he was a co-owner of the Property. Unfortunately for the plaintiff the evidence clearly pointed to a contrary conclusion, which meant his conviction could not be translated into a legally sustainable outcome. The plaintiff failed to make out grounds for either the relief he claimed or any other relief and I accordingly dismissed his claim.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 August 2013

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