On 30 September 2021, the High Court handed down its reasons for judgment in New Well Master Company Limited v Tidjan Ananto [2021] HKCFI 2953 dismissing the Plaintiff’s claim, and allowing the Defendant’s counterclaim.

The action concerned the beneficial ownership of a flat and two parking spaces in Victoria Heights on Stubbs Road (the “Properties“).  The Defendant was a business partner of the Plaintiff’s controller (“GG“).  The Plaintiff had transferred the Properties to the Defendant without consideration more than 30 years ago.      Nevertheless, the Defendant never took possession.

It is the Plaintiff’s case GG suffered severe financial losses during the economic downturn and had transferred the Properties to keep them beyond the reach of GG’s creditors.  In the circumstances, the Plaintiff sought a declaration that the Defendant held the Property on resulting trust for it.

The Defendant’s case, on the other hand, was that the Properties were a reward from GG to the Defendant for the latter’s contributions in the business.  The Defendant therefore counterclaimed for a declaration that he was beneficial owner and for vacant possession and mesne profits thereof.

In determining the issue of beneficial ownership arising from a gratuitous transfer of property, the Court started off the analysis by considering whether there is sufficient evidence to infer any relevant intention.  It was held that only in the absence of such evidence should the Court have recourse to the presumption of resulting trust, which is merely an evidential tool.

In terms of evidence, before trial, the Court granted orders that both GG and the Defendant were incompetent to be witnesses due to dementia and other cognitive issues. Hence, GG’s wife and the Defendant’s son gave evidence for the respective parties. The Court made reference to well-established principles in assessing credibility and reliability of witnesses (paras 39-40).

Having considered all the evidence, the Court ultimately disbelieved the Plaintiff’s evidence and held that there was common intention at the time of the transfer of the Properties that they were a gift to the Defendant.  On that basis the Court dismissed the Plaintiff’s claim and allowed the Defendant’s counterclaim.

Obiter, the Court also delved into issues concerning the application of s 20(1)(b) of the Limitation Ordinance (Cap 347) and laches.

Deanna Law appeared for the Defendant, instructed by Alex To & Co solicitors.

The full text of the judgment can be found here.