Where legal title is in joint names but there is no express declaration concerning beneficial ownership, there is a rebuttable presumption of a beneficial joint tenancy. This is even more likely to be the outcome where the jointly owned property was acquired as a family home.
This presumption was clearly established by the House of Lords in Stack v Dowden and the UK Supreme Court in Jones v Kernott. The presumption has been accepted by Hong Kong’s courts.
Chen Lily v Yip Tsun Wah Alvan is one example of a case illustrating the application of the presumption in Hong Kong. The facts of this dispute illustrate the aptness and good sense of the principle.
In Chen Lily, an engaged couple bought a flat as legal joint tenants. Mr. Yip paid 5% of the purchase price and the balance was provided by secured loans.
Mr. Yip’s salary was much bigger than Ms, Chen’s but he gave most of his salary to Ms. Chen who handled the household finances.
The relationship broke down and Mr. Yip moved out. From then on Ms. Chen made all the mortgage payments, refusing Mr. Yip’s offer to contribute half of the payments.
There was no express declaration concerning beneficial ownership. Ms. Chen argued that she was entitled to a 95% beneficial interest.
The implication was that she had been responsible for all the mortgage payments and that an intention should be inferred that she should have a correspondingly enhanced share in the property. Mr. Yip’s 5% share would, then, reflect his contribution to the initial purchase price.
The Court of First Instance found that Mr. Yip contributed at least 50% of the mortgage payments before the relationship breakdown so that the factual basis of Ms. Chen’s case was undermined.
More important, however, is the court’s insistence that the Stack presumption of equality meant that there was no need to carry out any form of accounting exercise.
Joint tenancy (equal shares following relationship breakdown) is presumed to be the right outcome because that is what the title deeds say. Weight should be given to the express adoption of joint tenancy.
This is reinforced by the family home context. There is a presumption that couples in committed relationships look on the family home as something that is ‘ours’; the finding of a beneficial joint tenancy reflects this presumption
The parties are rebuttably presumed to adopt a ‘pooled assets’ approach. They accept that their respective fortunes, and ability to contribute financially, may vary over the course of a relationship which they hope will last a lifetime. They are presumed to agree that their respective rights in the family home will not be affected. The beneficial joint tenancy expresses the idea that the home is at the service of an enduring ‘domestic joint venture’.
The legal joint tenancy and the committed relationship between the parties are, then, mutually reinforcing factors pointing towards a beneficial joint tenancy as the parties’ likely intention.
The finding of a beneficial joint tenancy also has the practical advantage of making it unnecessary to engage in a messy and costly accounting exercise to determine the contributions made by each party over a long time.
The Court of First Instance in Chen Lily applied the presumption. Each party had an equal share in the flat.
Michael Lower
**Disclaimer**: The information provided on the Hong Kong Land Law blog is for educational purposes only. It is intended to offer a general understanding of the cases or issues discussed, not to provide specific legal advice. Readers should not act upon this information without seeking professional legal advice. The views expressed are my own and do not necessarily reflect the official policy or position of any court or legal authority.