Constructive trust – common intention constructive trust – whether established
M and F were the parents of S. In May 1997, M and S acquired a Home Ownership Scheme flat, which required M and F to forfeit a public housing unit in which they and their family had been living for 12 years. The purchase was made in S’s name only to benefit from concessionary legal fees and F had paid all the mortgage instalments. In May1998, S presented a bankruptcy petition stating that he held his interest in the property as trustee for F. S became bankrupt and his legal title in the property became vested in the Official Receiver. F sought various declarations with the effect of removing S’s bankruptcy from the title to the property and recording title in the names of M and F as joint tenants.
Held, granting the declarations sought, that:
- Applying the standard of proof of a balance of probabilities, in all the circumstances, the parties’ common intention was that F and M would own the property as joint tenants and S would hold his interest on trust for F.
- The advantage of the saving in legal fees was more than sufficient to rebut the presumption of advancement here. The fact that S accepted a personal liability under the mortgage was not inconsistent with a trust. To achieve the parties’ common intention of a purchase by F and M with reduced legal fees, it was vital that S be a registered proprietor and purchaser and thus accept such personal liability. Further, that S contributed to the purchase by effectively guaranteeing with his personal liability his parents’ liability under the mortgage, was entirely consistent with adult children in Hong Kong assisting their parents out of filial obligation. This did not detract in any way from the parties’ common intention.