Given the property prices are constantly high in Hong Kong, not many young dating couples, or even newly-weds can afford purchasing a property for their own love nest. It has become this city’s phenomenon that parents would either allow their child and his/her partner to stay at one of the parents’ properties; or parents would “sponsor” them by paying downpayment of the couple’s new flat.
It is always tricky to determine the true beneficial ownership of premarital assets in divorce cases. In YKYM v YMCT  HKEC 487, the Family Court had to determine whether the parties’ former matrimonial home in London was a joint wedding gift to the son and daughter-in-law from the mother, or such property was held on trust on her behalf.
Sadly, the parties started having martial problem and in November 2011, the Wife filed for divorce proceedings based on the Husband’s unreasonable behaviour; as there was no child of the marriage, the Wife sought general ancillary relief.
It was not in dispute that the London Property was all paid for by the Mother. One of the factual issues before the court was to determine, at the time of purchase, was the London Property a wedding gift of the Mother for the parties?
Intention to Purchase
The Wife’s Case
1. She dealt with the purchase and negotiated the terms of the agreement of the London Property. The Husband proposed to her shortly after the purchase.
2. She agreed that she was not titled as the property’s legal owner because if the parties were later to purchase another flat, she could make use of the first time buyer benefit under the UK system. She also arranged renovation and furnished the property according to her own tastes and those expenses were bore by the parties.
3. The Mother has been generously provided wedding gifts to the Husband’s two elder brothers and a sister; hence there is nothing unusual for the Mother to purchase a property for them as wedding gift.
The Mother’s / the Husband’s case
1. The Parents purchased the Swiss Cottage Property in about 1990. Such purchase enabled the family to have a place to stay when they were in London. The Husband lived in the Swiss Cottage Property since 1995.
2. In 2005, the Mother decided to purchase a property in London as her and her family’s accommodation when they visit.
3. In April 2006, the Mother instructed her son to purchase the London Property on her behalf. At that time she did not know the parties were contemplating marriage. Even if she had known, she wouldn’t have purchased a property as their wedding gift as she had never purchase any property for any of her other children as wedding gift prior their marriage.
4. The Mother kept her own key to the flat with her own bedroom to keep her clothes. She also paid for the Council Tax and management fees by wiring money to her son.
After hearing each party’s case, the court ruled in favour of the Mother because the intention to purchase the London Property was merely for her and her family use. As there was no wedding planned at the time of the purchase of the London Property, it would be impossible to consider the London Property as the parties’ wedding gift.
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2016