Tang Kim Kwan Patrick v Lee Chi Ting Karen ([2014] HKEC 292, CA) concerned four properties in Hong Kong. Three were purchased in the name of the defendant and one was in the joint names of the plaintiff and the defendant. The defendant, who had been the plaintiff’s mistress and had a child by him, had not provided any of the purchase price for any of the properties. The relationship between the parties broke down and the plaintiff alleged that the properties were all held on resulting trust for him and, in one case, the company that he used for his property investment activities.
The defendant appealed against the first instance decision in respect of two of the properties. In the case of one of the properties (Metro Harbour View) the plaintiff had told the defendant that this had been purchased for her ‘to hold onto’. What was the reasonable inference to be drawn from the plaintiff’s words and conduct (including the words just mentioned) ([21])? They were unequivocal evidence of an intention to make a gift ([25]). This was borne out by certain post-acquisition statements of the plaintiff which could be accepted as good evidence of his intention at the time of the acquisition ([27]). The property was intended to be a gift ([29]).
It was accepted that another property (Royal Peninsula) was held on resulting trust for the plaintiff. It had been found, however, that the intention was that the property should be re-sold quickly and that the defendant was entitled to keep any profit. Although the profit could not be the subject matter of a gift, a power of sale could be. The plaintiff had made a gift of the power of sale ([43]). This was combined with a power to keep the net profit after sale ([42]). The defendant was ordered to sell the property and hand over the original purchase price to the plaintiff. She could keep the net profit (net of any rentals received) ([44]).
Michael Lower
