LYYC v. CHL and CSMS, the Executrices of the Estate of CGSK also known as CSKG, Deceased AND ANOTHER

HCMP 683/2021

[2023] HKCFI 1585

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 683 OF 2021

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JUDGMENT

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Table of Contents

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A.  INTRODUCTION

1.  The applicant in this application (“CL”) was the secretary and personal assistant of the Deceased (“Mr C”), a wealthy businessman and the chairman of a group of companies (“WK Group”) under the holding company (“WKSH”) started by his father in 1966. CL claims she had an intimate relationship with Mr C and that she was financially supported by him during their relationship of over 20 years. Mr C became mentally incapacitated in late 2010 and passed away in 2016. CL is now claiming financial provision for herself against Mr C’s estate (“Estate”) under the Inheritance (Provisions for Family and Dependents) Ordinance, Cap 481 (“Cap 481”).

2.  It is CL’s case that she had a close intimate relationship with Mr C and was maintained by him, and that in addition to the salary she received from WKSA, she was allegedly paid by Mr C personally a monthly sum (“Monthly Payment”) and other payments for her financial provision.

3.  CL’s claim is strongly contested by the executrices of the Estate (“Executrices”), who are Mr C’s lawful widow (“Mrs C”) and their eldest daughter (“SSM”)[1]. They were granted probate of Mr C’s will on 20 June 2017, and they are named as the 1^st respondents herein. Mr and Mrs C were married for over 40 years and they had 4 children, SSM being the eldest, and two younger twin daughters (respectively “JSH” and “JSP”) and a son (“FSH”)[2]. SSM has worked for the WK Group since 2002 and since around January 2013, she has been the Managing Director of WKSH.   

4.  It is the case of the Estate that the Monthly Payments and other payments, even if indeed made which was not admitted by the Estate, were made by reason of CL’s services as a long-standing, loyal and trusted employee as Mr C’s personal secretary and assistant and assisting Mr C in his personal affairs and were not as “maintenance” or “financial support”, nor had Mr C ever assumed responsibility for the maintenance or financial support of CL.   

5.  During his marriage, Mr C had had affairs with two women, respectively “Madam Ching” and “Madam Tam” which his family members were well aware of[3]. Mr C had two children born out of his relationship with Madam Ching, a son (“HSH”) and a daughter (“ASC”)[4]. There were no children born out of the Deceased’s relationship with Madam Tam.

6.  ASC was granted leave to join these proceedings on 11 April 2022 as the 2^nd respondent (representing both herself and HSH) for the purpose of determining the beneficial ownership of a property (“City Garden Apartment”) which was said to have been purchased by their father Mr C and held in trust for them. Their claim of beneficial ownership in the property is supported by the Executrices, but disputed by CL.

B.  BRIEF BACKGROUND

B.1  The factual background

7.  The parties had filed a statement of agreed facts (“Agreed Statement”) and an agreed chronology (“Agreed Chronology”).  

8.  CL was first employed by a member of the WK Group, namely “WKSA” around 1980 and her employment was terminated on 30 September 2013.

9.  Mr C suffered two strokes, the 1^st one in September 2004 (“1^st Stroke”) and the 2^nd one on 11 December 2010 (“2^nd Stroke”).

10.  After his 1^st Stroke, on 27 June 2005, Mr C had paid for the purchase of a flat in Happy Valley, Hong Kong (“Happy Valley Apartment”) for CL’s residence, at a consideration of HKD 8,130,000(pt) with a mortgage loan. The Happy Valley Apartment was purchased in the name of a company (“SG Ltd”)[5]. Initially the two registered shareholders were CL’s daughters, and later the shareholding was changed to 98% being held by CL and 1% being held by each of her daughters and then on 26 September 2018 changed to 99% being held by CL and 1% being held by her younger daughter FC[6].

11.  Mr C executed his last will on 12 September 2005 (“Will”) in which Mrs C and SSM were appointed the Executrices[7]. The Will essentially provided that after paying his debts, funeral and testamentary expenses and legacies in the Will and any codicil and all estate duty or other taxes, the residuary estate be held as to 50% thereof to Mrs C, 20% thereof to SSM, and 10% to each of his remaining 3 children with Mrs C.

12.  A year later, on 20 September 2006, Mr C executed his first codicil to the Will (“1^st Codicil”)[8]. In the 1^st Codicil, Mr C (i) bequeathed to SG Ltd a sum of HKD 5m, or the sum equivalent to the balance of the mortgage loan due from SG Ltd to the mortgagee bank as at his date of death, whichever was the lesser amount; (ii) declared that any sums or sum of money which he had paid to SG Ltd or to the mortgagee bank on behalf of SG Ltd were gifts from him to SG Ltd; and (iii) his trustees were to pay the sum of HKD 50,000 per month to Madam Ching during her life provided that the total payment thereof was not to exceed HKD 6m.

13.  In December 2006, a new trust was created as the successor trust to the original family trust set up by Mr C’s father (“New Family Trust”). The discretionary beneficiaries of the New Family Trust were all of the issue of Mr C’s father, including Mr C[9].

14.  In September 2007, another discretionary trust was set up by Mr C (“CG Trust”) to which he transferred all his shares in the WK Group. The beneficiaries under the CG Trust were Mr C, Mrs C and their 4 children. As a result, thereafter, Mr C no longer held any interest in the WK Group, other than his indirect interest as a discretionary beneficiary under the CG Trust[10].

15.  On 28 November 2008, Mr C paid for the purchase of the City Garden Apartment in the name of a company Abbeylands Limited (“Abbeylands”), of which 9,999 shares were held by a company (“JVML”), and the remaining 1 share was held by Mr C in his personal name. In late 2008, ASC and her family including her brother HSH moved to reside in the City Garden Apartment.

16.  On 7 July 2009, Mr C executed his 2^nd codicil to the Will (“2^nd Codicil”)[11]. In the 2^nd Codicil, Mr C gave all his shares in a Liberian corporation (“Alliance”) to SG Ltd.

17.  Mr C was the sole shareholder of Alliance and through Alliance, he held 100% of the interests of a company (“Perm”), being 1 share held in his personal name and 6,001 shares held via Alliance. Perm was in turn used to hold a company in the WK Group (“WKEL”), which was at the time of the 2^nd Codicil the registered owner of an office in Lippo Centre (“Lippo Property”). In short, by the 2^nd Codicil and by giving Alliance to SG Ltd, Mr C was giving to SG Ltd all the shares but 1 in Perm.

18.  After his 2^nd Stroke on 11 December 2010, Mr C became mentally incapacitated and was hospitalized. In early 2012, Mr C was arranged to go to Taiwan to receive treatment there. It was not disputed that not long after Mr C’s 2^nd Stroke, CL ceased visiting or seeing Mr C. I will consider her explanations later in this judgment.

19.  Mr C was formally declared to be incapable by reason of his mental incapacity of managing and administering his property and affairs on 20 November 2012 in proceedings issued under Part II of the Mental Health Ordinance, Cap 136 (“Cap 136”), namely HCMH 44/2012 (“MH Proceedings”), and a committee was appointed for him (“Committee”)[12]. The Committee consists of 5 members namely Mrs C, Mr C’s eldest daughter SSM and his son FSH, and two of Mr C’s close friends and long time business associates, namely “LPMC”[13] and “DKN”[14]. LPMC was also the Managing Director of WKSH from 1999 to January 2013.

20.  After the 2^nd Stroke, a monthly sum of HKD 70,000 (which was the same amount of the alleged Monthly Payment last paid to CL by Mr C before his 2^nd Stroke) was continued to be paid to CL by the Committee through Perm, for the period from January 2011 to September 2013.  

21.  On 24 April 2013, at CL’s request, she was granted a loan of HKD 280,000 from Perm for purchasing a newer second hand BMW car at a price of HKD 316,000 for her use (“BMW Loan”). Later, the Committee (i) paid off the outstanding mortgage loan of the Happy Valley Property[15] and (ii) waived the repayment of the outstanding car loan from CL.

22.  On about 12 July 2013, one of the staff at the Accounts Department of WKSH enquired with CL regarding the whereabouts of a sum of monthly consultancy fee payment to one of Mr C’s private companies (“ESL”) which had not been deposited into ESL’s bank account. This led to one of the management companies under WHSH (“WKMT”) becoming concerned as to the possible impropriety of a number of long service staff who were suspected to have misappropriated funds from accounts belonging to WKMT and from Mr C’s personal account. When initial inquiries were made with the Treasury Manager (“Ringo”), he then failed to turn up for work the following Monday, ie 15 July 2013. According to CL, she had immediately informed SSM who was at that time with Mr C in Taiwan.

23.  It was later discovered that there was theft on the part of Ringo of about HKD 3m from ESL and HKD 300,000 from petty cash pools of the companies including WKSA.

24.  The Committee had instructed a firm of private investigators Steve Vickers and Associates Limited (“Vickers”) to conduct investigation into the alleged fraud and Vickers had interviewed 3 of the staff members, namely Ringo, Ringo’s subordinate in the Treasury Department (“HMY”), and also CL. On 19 July 2013, when CL was asked to provide a statement to Vickers, CL attempt to cut her own wrist in the office[16].

25.  A report dated 23 August 2013 was later prepared and submitted to the Committee by Vickers (“Vickers Report”)[17]. In the course of the investigation. CL had given two written statements to Vickers, one on 2 August 2013 (“1^st Statement”) and one on 9 August 2013 (“2^nd Statement”)[18].

26.  According to the Vickers Report, Ringo confessed to the theft of money belonging to both WKMT and also Mr C and that the stolen funds were used to pay off his personal debts incurred through his gambling habit.

27.  It was stated in the Vickers Report that there was no evidence to indicate CL either knew of Ringo’s criminal activities or that she had actively colluded with him, but for reasons stated therein, the Vickers Report had recommended that “WKMT may wish to consider whether it is inappropriate for [ CL] to remain in a position of trust in the longer term”.[19] Thereafter, on 30 September 2013, CL’s employment with WKSA was terminated with immediate effect. CL also ceased receiving the alleged Monthly Payment from the Committee and/or Perm, and further Perm no longer covered CL’s running expenses for the car.

28.  A video conference took place in early October 2013 between CL on one part and LPMC and a solicitor acting for the Committee on the other, in relation to discussions concerning an arrangement for CL. This was followed by a letter dated 7 October 2013 from the Committee’s solicitors to CL enclosing a deed of arrangement to be entered into between Mr C, the Committee, WKSA, SG Ltd, Alliance, Perm, WKEL, and CL (“Deed of Arrangement”)[20]. The Monthly Payments and other payments made by Mr C for CL were stated therein to be “ex-gratia” financial arrangements. Pursuant to the Deed of Arrangement, Perm was to engage CL as a consultant for a period expiring on or after 30 September 2016 at HKD 70,000 per month, subject to early termination and terms as provided therein.

29.  On 4 November 2013, CL instructed her then solicitors to reply. CL’s then solicitors stated therein that Mr C and CL had been having “a close relationship” and Mr C had been providing monthly maintenance to CL in the past 20+ years. She rejected the proposals in the Deed of Arrangement and refused to sign the Deed of Arrangement[21].

30.  On 27 November 2013, CL changed solicitors to her present firm. On 9 January 2014, CL’s present solicitors sent a letter before action to the Committee’s solicitors (“Demand Letter”)[22], in which they said they believed that the Committee, or some of its members, were aware, “at least in general terms, of the background to the relationship between [CL] and [Mr C] and the extent to which [Mr C] provided financial support to [CL]”, and CL’s solicitors then proceeded to set out the “more important aspects” for the Committee’s information. In short, the Committee’s proposals in the Deed of Arrangement were rejected by CL who demanded the Committee to forthwith restore the “maintenance payments” to her “at the overall level which they were being paid in the past”. The Demand Letter was followed by a further letter sent by CL’s solicitors to the Committee’s solicitors on 26 February 2014.

31.  The Committee’s solicitors replied on 27 February 2014[23]. No agreement was reached between CL and the Committee. In particular, the non-family members of the Committee said they had little or no knowledge of CL’s alleged relationship with Mr C and the alleged financial support, and the family members did not agree with CL’s account of her relationship with Mr C. The Committee further confirmed to CL’s solicitors that they had contracted to sell the Lippo Property.

32.  On 17 March 2014, WKEL sold the Lippo Property to unrelated third party for HKD 53m[24]. The Lippo Property was purchased on 13 October 1987 for $32.2m with a mortgage loan and had all along been subject to a mortgage loan with rental income assigned to the mortgagee bank, and there had been refinancing on a number of occasions.

33.  Mr C passed away on 20 July 2016.

B.2  The history of litigation

34.  After receiving the Committee’s solicitors reply of 27 February 2014, on 4 March 2014, CL issued a summons in the MH Proceedings[25] to join as a party and to seek amongst other things an order under section 10A(1)(c) of Cap 136 for financial provision[26]. CL was seeking amongst other things (i) a monthly payment of HKD 108,000 from 1 October 2013, (ii) a monthly payment to SG Ltd/CL of HKD 64,000 for the monthly mortgage loan repayment of the Happy Valley Apartment, (iii) payment to CL of a sum of HKD 100,000 respectively on CL’s birthday and on 1 December, for her birthday and Christmas presents, (iv) annual sum of HKD 50,000 for her car running expenses, and restoration of assets of Alliance and/or Perm and/or WKEL depleted by the Committee since 11 December 2010[27].

35.  CL had sought an early hearing for the case management conference of her summons in the MH Proceedings and the question as to whether CL should be provided with interim payments by the Committee was considered at a hearing on 27 October 2014 before L Chan J, who handed down a decision on 29 October 2014 (“Interim Decision”). As seen in the Interim Decision, L Chan J declined to  order any interim payments for CL because amongst other things, he was of the view that (i) CL’s allegation of an intimate relationship between her and Mr C did not appear to be overwhelming in the face of the evidence from the Committee denying such relationship; and (ii) he did not think CL was a dire position that required urgent relief by interim payment[28].

36.  The substantive hearing of the CL’s summons eventually took place on 17 November 2015 before M Ng J (“MH Hearing”). However, Mr C passed away before the handing down of any decision by M Ng J.

37.  In November 2016, CL through SG Ltd  commenced probate proceedings by writ under HCAP 29/2015 against Mrs C and her 4 children, Madam Ching and her 2 children[29], alleging amongst other things that Alliance, Perm, WKEL had been “wrongfully and substantially drained, dissipated, and/or depleted of properties and assets … and has had their values substantially depleted in breach of fiduciary and/or other duties, wrongfully and unlawfully with the intention of attempting to substantially deprive [SG Ltd] and CL of … what [Mr C] bequeathed under the 2^nd Codicil” and sought relevant orders for, amongst others, the appointment of an independent and impartial person to be granted letters of administration of the Estate on an urgent basis (“Probate Proceedings”).

38.  CL later discontinued the Probate Proceedings in March 2017, and probate of the Estate was eventually granted to the Executrices on 20 June 2017.

39.  Thereafter, on 1 November 2017, CL commenced the present proceedings under Cap 481 against the Executrices in the Family Court (FCMP 223 of 2017). This was followed by the Executrices issuing an application to strike out CL’s originating summons. Family Court Judge Melloy (“Judge Melloy”) handed down a judgment on 8 January 2019 dismissing the strike out application (“Strike Out Judgment”)[30]. The Executrices sought leave to appeal but this was dismissed by Judge Melloy[31]. The Executrices renewed their leave application before the Court of Appeal, but this was also dismissed by the Court of Appeal pursuant to a judgment of 14 May 2019[32] (“CA Judgment”)

40.  CL then applied for interim financial support in the Family Court for her maintenance and for litigation funding. Judge Melloy handed down a judgment on 20 October 2020[33] (“Interim Maintenance Judgment”). It was ordered by Judge Melloy that, subject to CL filing an undertaking to the effect that any interim maintenance paid pursuant to the order shall be taken into account, given credit for and legal costs provisions shall be taken into account on the question of costs, and in the event that her application under Cap 481 fails, she will repay such interim sums, that the Estate was to (i) pay CL HKD 55,000 per month for her interim financial support with effect from 1 November 2020, such sum to be increased to HKD 92,500 with effect from 1 January 2021 (to allow for the additional sum of HKD 37,500 per month for the mortgage repayments), and (ii) pay HKD 38,000 per month to CL’s solicitors as litigation funding with effect from 1 November 2020 until the FDR hearing[34] or trial, in the event that there was no FDR (“Interim Order”)[35]. CL filed her undertaking pursuant to the 1^st Interim Order on 23 October 2020 (“1^st Undertaking”)[36].

41.  Subsequent thereto, on 3 November 2020, CL filed an additional undertaking that (i) she will remain a director of SG Ltd ; (ii) SG Ltd will remain under CL’s control and that she will not dispose of or encumber her shares in SG Ltd; (iii) she will procure SG Ltd not to dispose of the Happy Valley Apartment nor to obtain any further loans against the equity of the Happy Valley Apartment or cause the property to be further encumbered which would cause the equity of the property to fall below HKD 10m (“2^nd Undertaking”)[37].

42.  Eventually, on 10 May 2021, after an unsuccessful FDR hearing before Judge Melloy, she transferred these proceedings to this Court.

43.  On 16 June 2021, there was a consent order before Judge Melloy for the Estate to continue to pay to CL HKD 38,000 per month for litigation funding from 1 June 2021 until trial subject to CL’s 1^st and 2^nd Undertaking.

44.  After the transfer up, on 27 October 2021, CL issued a summons for further litigation funding. This eventually led to a decision handed down by the Court on 17 May 2022 (“Litigation Funding Decision”)[38], and the Estate was ordered to pay a further sum of HKD 3,350,000 to CL’s solicitors on or before 1 September 2022 as litigation funding for her costs for the trial until final determination of the originating summons herein.

45.  Separately, on 4 April 2022, a consent summons was filed for ASC to be joined as a party in these proceedings for the purpose of determining the beneficial ownership of the City Garden Apartment, and leave was granted by the Court on 11 April 2022.  

46.  Thereafter, shortly before the PTR, on 15 July 2022, a summons was issued on behalf of CL pursuant to section 12 of Cap 481 (“s12 Summons”)[39] seeking an order for the Executrices/Estate to provide the following sums of money, being dispositions made by Mr C (whether by himself, his servants, agents or otherwise) less than 6 years before the date of death of Mr C with the intention of defeating an application for financial provision under Cap 481:

(1)  HKD 53,000,000, being the consideration for the sale of the Lippo Property by the Committee;

(2)  HKD 23,005,178.97, being the total amount of dispositions made by the Committee from 31 March 2014 to 21 July 2016

47.  In the alternative, but without prejudice to the above, CL sought in her s12 Summons that the total value of HKD 76,005,178.97 be “added back” and be treated as being with the Estate. The s12 Summons was also served on ASC.

48.  Suffice to say at this stage, the s12 Summons was later withdrawn by CL, together with CL’s 10^th affirmation filed in support thereof, with costs paid by her.

49.  The trial eventually took place before the Court over 10 days commencing 5 December 2022 (“Trial”).

C.  AGREED LIST OF DISPUTED ISSUES

50.  It was common ground that Mr C died domiciled in Hong Kong and was survived by Mrs C and their 4 children, and also Madam Ching[40] and her 2 children by Mr C. There are a total of 6 disputed issues in the Agreed List of Disputed Issues, as follows:

(1)  Whether CL had/has locus to make the Cap 481 application (“Issue 1”)

(2)  What is the size of the Estate (“Issue 2”)

(3)  Who has the beneficial ownership of the City Garden Apartment and/or its holding companies (“Issue 3”)

(4)  What is a fair and equitable amount of maintenance to be paid to CL if she does have locus to make the Cap 481 application (“Issue 4”)

(5)  Whether the decisions of the Committee can be taken to reflect Mr C’s own decision (“Issue 5”)

(6)  Whether the dispositions made by the Executrices were made with the intention to defeat CL’s Cap 481 application (“Issue 6”) 

51.  Issues 1, 4, 5 and 6 do not concern the 2^nd respondent ASC.

52.  The Executrices object to Issue 6 being included and in any event, they deny any such disposition being made.

D.  THE WITNESSES

53.  CL submitted a total of 10 affirmations in these proceedings (with her 10^th affirmation filed in support of the s12 Summons withdrawn). She had also submitted 2 Form Es, one in May 2019 and one in June 2022. There were a total of 5 witnesses who had submitted affirmations and attended the Trial to give oral evidence to support CL’s case, namely her former colleague and Ringo’s subordinate at the Treasury Department, HMY, another former colleague at the Accounts Department (“CYL”), CL’s brother (“Luis”), CL’s younger daughter (“FC”), and also Mr C’s former driver (“Wallace”).  

54.  SSM had submitted a total of 7 affirmations and 2 Form Es on behalf of the Executrices, one in May 2019 and one in May 2022. There were a total of 5 witnesses who submitted affirmations and attended the Trial to support the Executrices’ case, namely SSM’s younger sister JSH, younger brother FSH, their half siblings ASC and HSH, and LPMC. SSM’s other younger sister JSP had originally also submitted an affirmation to support the Executrice’s/Estate’s case, but ultimately JSP did not attend trial and her affirmation was ordered to be withdrawn on 30 November 2022. FSH was given leave to give evidence by video conferencing from a hotel in Wuxi in Mainland China. ASC and HSH gave evidence both to support the Executrices’ case and also their own case. Mrs C did not file any affirmation nor did she attend the Trial to give evidence.

E.  ISSUE 1 – WHETHER CL HAD/HAS LOCUS

E.1  Relevant statutory provisions

55.  I will first set out the relevant parts of section 3 of Cap 481, as follows:

“3. Application for financial provision from deceased’s estate

(1) Where after the commencement* of this Ordinance a person dies—

(a) domiciled in Hong Kong; or

(b) having been ordinarily resident in Hong Kong at any time in the 3 years immediately preceding his death,

and is survived by any of the following persons—

(i) …

(ii) …

(iii) …

(iv) …

(v) …

(vi) …

(vii) …

(viii) …

(ix) any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or substantially, by the deceased,

that person may apply to the court for an order under section 4 on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant.

(2) In this Ordinance, reasonable financial provision (合理經濟給養)—

(a) in the case of any application made—

(i) by virtue of subsection (1)(i) …

(ii) by virtue of subsection (1)(iii) …

(b) in the case of any other application made by virtue of subsection (1), means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance.

(3) For the purposes of subsection (1)(ii), (iv), (v), (vi), (vii), (viii) and (ix), a person shall be treated as being maintained by the deceased, either wholly or substantially, as the case may be, if the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money’s worth towards the reasonable needs of that person.”

[*Commencement date: 3 November 1995]

(emphasis added)

56.  Section 4 of Cap 481 sets out the orders the court may make if it is satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of is will and that law, is not such as to make reasonable financial provision for the applicant.

57.  Section 5 of Cap 481 then provides as follows:

“5. Matters to which court is to have regard in exercising powers under section 4

(1) Where an application is made for an order under section 4, the court shall, in determining whether the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters—

(a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b) the financial resources and financial needs which any other applicant for an order under section 4 has or is likely to have in the foreseeable future;

(c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(d) any obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased;

(e) the size and nature of the net estate of the deceased;

(f) any physical or mental disability of any applicant for an order under section 4 or any beneficiary of the estate of the deceased;

(g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.

(2) Without prejudice to the generality of paragraph (g) of subsection (1), where an application for an order under section 4 is made by virtue of section 3(1)(i), (ii) or (iii), the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to—

(a) the age of the applicant and the duration of the marriage or union of concubinage;

(b) the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family,

and, in the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce.

(3) …

(4) …

(5) Without prejudice to the generality of paragraph (g) of subsection (1), where an application for an order under section 4 is made by virtue of section 3(1)(viii) or (ix), the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to the extent to which and the basis upon which the deceased assumed responsibility for the maintenance of the applicant, and to the length of time for which the deceased discharged that responsibility.

(6) Without prejudice to the generality of paragraph (g) of subsection (1), where an application for an order under section 4 is made by virtue of section 3(1)(ix), the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection and subsection (5), have regard to the closeness of the relationship between the applicant and the deceased immediately before the death of the deceased.

(7) In considering the matters to which the court is required to have regard under this section, the court shall take into account the facts as known to the court at the date of the hearing.

(8)  In considering the financial resources of any person for the purposes of this section the court shall take into account his earning capacity and in considering the financial needs of any person for the purposes of this section the court shall take into account his financial obligations and responsibilities.”

(emphasis added)

E.2  The legal principles

58.  Sections 3(1)(ix), 3(3) and 5(5) of Cap 481 are similar or almost identical to sections 1(1)(e), 1(3), and 3(4) of the Inheritance (Provision for Family and Dependants) Act 1975 in UK (“1975 Act”). The relationship and interaction between these UK sections were first considered at length by Sir Robert Megarry VC in In re Beaumont (deceased) [1980] 1 Ch 444.

59.  In In re Beaumont, the plaintiff and the deceased who was a widow began to live as man and wife in the deceased’s bungalow in 1940 until the deceased died at about end of 1976. The plaintiff had paid the deceased a weekly sum in return for the accommodation and in addition he contributed to the weekly shopping bill. He had a car in which he would drive the deceased about. They nursed each other in sickness. The deceased paid all outgoings on the bungalow and did the cooking and housework and other household chores while the plaintiff did various household and gardening jobs. During the last year before the deceased died, she was in hospital for about 3 months and for the last 10 days before her death. The deceased gave nothing in her will to the plaintiff, save that she made a nomination in his favour of some units of her savings certificates. The plaintiff made a claim against the deceased’s estate under section (1)(1)(e) of the 1975 Act [our section 3(1)(ix)].

60.  It was held amongst other things by the Vice Chancellor that:

“(1) That it was not enough for an applicant under section 1(1)(e) [our section 3(1)(ix)] to show that he was being wholly or partly maintained by the deceased unless he also satisfied the requirements of section 1(3) [our section 3(3)] as to a “substantial contribution”;

(2) That in determining whether there was a “substantial contribution” within section 1(3) [our section 3(3)], the words requiring anything provided “for full valuable consideration” to be disregarded applied to anything that was in fact provided for full consideration, even though it was not provided under any contract;

(3) That the words “immediately before the death of the deceased” in section 1(1)(e) [our section 3(1)(ix)] required the court to consider the general basis or arrangement then existing for the maintenance of the applicant by the deceased, and not merely the de facto state of maintenance at that moment;

(4) That although section 3 (4) [our section 5(5)] was directed towards the factors to be considered at the trial rather than to the requirements for making a claim, it assumed that a person applying under section 1(1)(e) [our section 3(1)(ix)] was a person for whose maintenance the deceased had assumed responsibility; that such an applicant had therefore, in addition to satisfying both section 1(1)(e) [our section 3(1)(ix)] as to maintenance and section 1(3) [our section 3(3)]  as regards a “substantial contribution” to establish that the deceased had in fact assumed responsibility for [the applicant’s] maintenance.”

61.  The Vice Chancellor’s expositions of the various sections in the 1975 Act were subsequently agreed and approved by the Court of Appeal[41] in Jelley v Iliffe [1981] Fam 128 on all points but one. In particular, Stephenson LJ agreed with the Vice Chancellor that:

“(2) In considering whether a person is being maintained “immediately before the death of the deceased” it is the settled basis or general arrangement between the parties as regards maintenance during the lifetime of the deceased which has to be looked at, not the actual, perhaps fluctuating, variation of it which exists immediately before his or her death. It is, I think, not disputed that a relationship of dependence which has persisted for years will not be defeated by its termination during a few weeks of mortal sickness ...”[42]

62.  The Court of Appeal in Jelley v Iliffe however disagreed with the Vice Chancellor’s view that the bare fact of maintenance raised no presumption that responsibility for it had been assumed. Stephenson LJ, with Cumming-Bruce and Grifiths LJJ agreeing, was of the opinion that the bare fact of maintenance did generally raise a presumption that responsibility for it had been assumed[43]. Stephenson LJ later added that the presumption could be rebutted by circumstances including a disclaimer of any intention to maintain, but there was a distinction to be drawn between an intention to maintain during the lifetime of the giver who had something to offer and an intention to provide continuing support after death[44].

63.  What is clear from the 2 cases Jelley v Iliffe and In re Beaumont, and also later in Baynes and Hedger [2009] EWCA Civ 374[45], an assumption of responsibility by the deceased for the maintenance of the claimant is an essential ingredient in the qualification of a person entitled to make a claim under section 1(1)(e) [our section 3(1)(ix)].  

64.  The above principles set out in In re Beaumont and Jelly v Iliffe have been followed by judges in Hong Kong, including Family Court Judge Grace Chan in Re Estate of CHS, LPC v CYC, FCMP 61/2012, unrep, 16.09.14, at paragraphs 21-24.

65.  With the above principles in mind, I turn to the facts of the present case.

E.3  The Executrices’/ Estate’s case

66.  It was submitted on behalf of the Executrices that CL did not have any locus standi to bring the present dependency claim as she was not a person who fell within section 3(1)(ix) of Cap 481, for in particular the following reasons:

(1)  No payment or “maintenance” was provided by Mr C or the Committee acting in his stead to CL “immediately before his death” on 20 July 2016;

(2)  Further or alternatively, CL was not being “maintained, either wholly or substantially, by the deceased ” otherwise than for full valuable consideration contrary to section 3(3) of Cap 481.

67.  It was argued that the Committee had, for all intents and purposes, stepped into the shoes of Mr C during those years of their appointment, and the Committee was authorised by the Court in the MH Proceedings to manage Mr C’s affairs including whether or not to make payments to CL, and if so the nature of such payments, and that the Committee was Mr C for the purposes of the law[46].

68.  In light of the above, there were no payments immediately before Mr C’s death as:

(1)  Mr C ceased making any payments to CL in December 2010 when he suffered the 2^nd Stroke, which was nearly 6 years before his death; and

(2)  The Committee also ceased all payments to CL after September 2013, some 3 years before Mr C’s death.

69.  In any event, CL was not even “maintained ” by Mr C under section 3(3) immediately before the 2^nd Stroke and that the payments made by Mr C to CL including the Monthly Payments were not paid for the purpose of making “substantial contributions” towards the reasonable needs of CL, nor had Mr C assumed responsibility for CL’s maintenance or financial support.

E.4  CL’s case

70.  As set out earlier, CL’s case was that she and Mr C had all along a close intimate relationship and that he had substantially or wholly maintained her and, in continuation thereof, it was also Mr C’s intention to make very substantial financial provisions to her by way of testamentary bequests. It was CL’s case that she fell within section 3(1)(ix) of Cap 485.

E.5  CL’s relationship with Mr C

71.  I will first set out CL’s evidence as to her relationship with Mr C during various periods.

E.5.1.  Period between about July 1980 and about mid 1992

72.  According to CL’s 2^nd Statement provided to Vickers, she first joined WKSA in July 1980 as a receptionist, and that she was promoted in 1992 to be Mr C’s personal secretary and that as his personal secretary, her duty was to arrange all meeting appointments and handle some home affairs for Mr C, but Mr C was capable to handle all letters/business documents on his own[47]. During the Trial, CL confirmed that when she was first employed by WKSA in July 1980, she worked not only for Mr C but also for other directors, and she had also said she was not able to recall when she became Mr C’s personal secretary but it was sometime after 1992, and that by the time of Mr C’s 1^st Stroke in 2004, she had been his personal secretary for some time.

73.  In her 1^st affirmation, CL’s evidence was that in 1992, her boyfriend with whom she had two young daughters then aged 8 and 5, died suddenly as a result of heart disease, and that this caused her great concern as to how she would manage to bring up their two daughters.

74.  Pausing here for a moment, CL had in fact disclosed very little information about her own personal circumstances in her written evidence. In her 1^st Statement to Vickers, she had referred to her boyfriend (father of her two daughters) as “her husband”[48]. In one of the magazine articles produced by her, it was reported that “her husband” died in a traffic accident[49]. Anyway, as seen from her brother Luis’s evidence below, it was clear that CL was never married to the father of her two daughters.

75.  According to Luis’s witness statement, he and CL were living together with their parents until CL moved out in or around 1988. Luis disclosed during the Trial that CL’s daughters were also living with them until 1988, when CL and her daughters moved to a nearby block in the same estate as her parents could help to look after her daughters when she was at work. Her daughters would appear to be about 5 and 2 years old at the time of their moving out[50]. When asked why CL and her daughters did not live with the father of the daughters, Luis explained that CL was never married to the father of CL’s daughters, as he had another family[51].

76.  It was Luis’s written evidence that CL had always had a very close relationship with her mother who passed away in 2008 and that he learnt of CL’s relationship with Mr C from their mother in or around 1992. It was their mother who told him that his ex-wife, a senior purser with an airline company, had jokingly asked Mr C if he could introduce some men to take care of CL by giving her financial assistance and after that, Mr C then asked CL to become his “mistress” which CL accepted[52].

77.  In her 1^st affirmation, CL had also said that one day her sister-in-law had mentioned “CL’s position” to Mr C and asked him whether he would be able to introduce some suitable friends to CL[53]. When asked during the Trial, CL said her then sister-in law[54], being Singaporean and outspoken, had met Mr C on a flight, and that on one occasion, she had jokingly told Mr C that CL was young and that the father of her two children had passed away, and that if Mr C had any friends, he could introduce to CL.

78.  It was not quite clear why Luis’s ex-wife would say what she allegedly said to Mr C. It was also odd why she did not tell her then husband Luis her conversation with Mr C, as according to Luis, he heard it from his mother. As Luis’s ex-wife was not called to give evidence, it was not clear as to what she actually said to Mr C.

79.  According to CL, sometime thereafter, Mr C invited CL to his office and told her that he would like to “take care” of her and that he would treat her very well. He “offered ” to pay her HKD 25,000 per month from his personal account, ie the alleged Monthly Payment, in addition to the salary CL was receiving from WKSA, and CL said she accepted his offer of financial assistance to her and her daughters, due to her then financial position and also due to her “warm feelings” towards Mr C[55].

80.  However, CL’s written evidence as to when the Monthly Payment started and when her sexual relationship with Mr C started was rather vague and confusing. According to her 1^st affirmation herein[56], by around early to mid 1990s she and Mr C became “personally acquainted ” and that she and her two daughters as well as her extended family to some extent became very financially dependent on Mr C. She then said her friendship with Mr C “developed into a sexual relationship”.

81.  Later in her 4^th affirmation of 5 December 2019, CL had said her relationship with Mr C developed into a sexual relationship from or around 1992[57]. In her most recent 9^th affirmation of 18 January 2022, she reverted to saying that it was in around round early to mid-1990s that she and Mr C became personally acquainted, and that the friendship between then “developed ” into a sexual relationship[58].

82.  It would thus appear from CL’s then written evidence that her relationship developed by stages or gradually, namely after Mr C’s offer to pay her the alleged Monthly Payment, they became “personally acquainted ” first and then a sexual relationship developed. When asked during the Trial, CL then said her written evidence was wrong. Her oral evidence during the Trial was that she started her sexual relationship with Mr C at the same time when he offered her the Monthly Payment of HKD 25,000 per month, which was a few months after her then boyfriend died in February 1992, which would make it around mid 1992.

83.  Anyway, what was clear from CL’s evidence was that prior to the alleged Monthly Payments, the relationship between Mr C and CL was purely one of an employer and employee only.

E.5.2.  Period between about mid 1992 and the 1^st Stroke in September 2004

84.  Throughout her 9 affirmations, CL did not produce any documentary evidence such as loving messages, cards or photographs etc to support her relationship with Mr C and there was no evidence that they had ever gone on any holidays together. When asked during the Trial, CL accepted that there was none but explained that they saw each other every day in the office, and that Mr C had sent her flowers and had paid her money to buy a present for herself.

85.  In her 1^st affirmation, CL had described her relationship with Mr C was that they “provided each other with companionship and affection. This was a long term close romantic and intimate relationship”[59]. However, contrary to her written evidence, CL frankly admitted during the Trial that her relationship with Mr C prior to his 1^st Stroke was a “transactional relationship”, and that it was only at a later stage, after Mr C’s 1^st Stroke that their relationship became more loving. Further, CL’s evidence was prior to the 1^st Stroke, she did not regard herself as Mr C’s girlfriend and that he had other girlfriends, and she had put it bluntly, that if there was a need on his part, she would provide it. CL also admitted that there were no personal meals together between her and Mr C and that they would meet at hotels or in the office to have their sexual contact, and that Mr C would ask her to book a room at a hotel at lunch time and he would then go over to meet her, or that they had their sexual contact inside Mr C’s private bathroom in the office.

86.  CL had called her former colleagues HMY and CYL to give evidence on her behalf as to her relationship between Mr C and CL.

87.  HMY had worked as an employee of the Treasury Department of WKSA and/or another company in the WK Group from 1988 until 2013 when she was laid off after the Ringo incident and according to HMY, she was a close friend of CL’s and that they had remained in contact after they ceased to be colleagues. It was HMY’s evidence  that CL had told HMY about CL’s intimate relationship with Mr C, and that she had witnessed CL going into Mr C’s office along with closed doors, and that she was the only woman whom HMY had seen lying on Mr C’s couch inside his office, and that she had also witnessed CL going into Mr C’s private bathroom many times before his 1^st Stroke and coming out with smudged make up and looking embarrassed[60].

88.  As for CYL, she had worked in the Accounts Department of WKSA and/or another company in the WK Group from 1977 to 2014. According to CYL, she was shown a copy of HMY’s affirmation, which CYL had read and was explained the contents thereof. CYL had said that many colleagues at the office were well aware of the bathroom incidents that HMY described, and that CL’s relationship with Mr C was more than one between an employer and employee and it was an intimate relationship. CYL had also said she had also sometimes saw Mr C and CL during lunch time at the Hong Kong Jockey Club’s Shan Kwong Road clubhouse[61].

89.  During the Trial, under cross examination, CYL however admitted that her desk was initially not close to CL’s (or Mr C’s), and they were on different floors, and later the Accounts Department then moved to the floor where CL and Mr C were. She could not recall whether the move took place before Mr C’s 1^st Stroke but was before his 2^nd Stroke. Although CYL disagreed that the relationship between CL and Mr C was only that of a long term employer/employee relationship, she admitted that she did not pay much attention as to whether they were boyfriend/girlfriend. In fact, she had hesitated and was evasive in answering the question as to whether she knew they were boyfriend/girlfriend, and eventually she only answered that Mr C treated CL very well.

90.  Upon this Court’s queries as to whether Mr C’s private bathroom was, CYL explained that it was on the left side of the lifts in the lift lobby, and there were one bathroom for the male and one for the female, and one for the “boss”, which was Mr C’s private bathroom. When asked whether everyone in the office could see Mr C going into his private bathroom, CYL did not answer the question directly and only said they would see him coming back into the office, and that the receptionist was the one who could see Mr C going into his bathroom and coming out, although CYL then added that the staff could also see sometimes if they happened to walk from one side to the other side. CYL confirmed that she would not know what happened inside Mr C’s bathroom. She also said that sometimes she only saw CL coming out alone and she did not see Mr C coming out, and that she did not pay attention to CL’s make up when CL came out of the bathroom.  

91.  Notwithstanding that it was CL’s written evidence that after she and Mr C started their sexual relationship, that they maintained “a close, meaningful and mutually supportive relationship”, and Mr C had made “inter vivos gifts gratis to provide for the financial support and maintenance of her and her children[62], yet, CL said she was in financial difficulties in 2002. CL had said that this was largely due to the cost of bringing up her two daughters and also providing for the care of her aging parents and financially supporting her brother due to his failing business.

92.  CL said she told Mr C about this and that she decided to file for bankruptcy. Although Mr C tried to dissuade her from doing this, she decided against accepting Mr C’s offer of assistance and petitioned for her own bankruptcy, and was a bankrupt from August 2002 to October 2006. According to CL, she did not wish her relationship with Mr C to be based “just on money”, and that notwithstanding her bankruptcy, the relationship between her and Mr C continued as before and that Mr C provided financial support for her daughters during this time[63].

93.  When CL was cross examined over her reason why she decided against accepting Mr C’s offer of assistance and decided to file for bankruptcy in 2002, she explained that she rejected Mr C’s financial help as she already “felt ashamed ” in having to accept from Mr C the Monthly Payments and that even though he had wanted to help, in his mind she would become “someone cheap”, or words to that effect. She also explained that the reason why she told Mr C that she would petition for bankruptcy was because she was a director of a number of Mr C’s companies and she would have to resign as director upon being declared a bankrupt.

94.  Thus, on one hand, CL’s evidence was, in addition to her salary, she was receiving the alleged Monthly Payment from Mr C which according to her was increased to HKD 40,000 per month “by about 2002”[64] (2002 was the year she was declared bankrupt), and she was receiving gifts from Mr C for the financial support and maintenance of herself and her daughter, which she said she “felt ashamed ”, and on the other hand, she turned down his financial help said it would make her become “someone cheap” in his mind.

95.  CL disclosed very little information in her affirmations about the financial difficulties she said she was in. It would appear from FC’s affirmation that in the summer of 1999 she was sent to Vancouver to continue her education with her sister there, after one year, namely in 2000, she was then sent to Canberra in Australia where she stayed for only a few months, and she then returned to Hong Kong to finish her high school studies in an international school here. It was not quite clear where CL’s older daughter (with whom CL has now become estranged) was at the time. However, apart from CL’s own evidence that Mr C was subsidizing their family expenses including her daughters’ school fees, there was no supporting evidence of her financial difficulties and/or the difficulties CL’s brother was in, and/or the expenses involved over the care of CL’s parents.

96.  During the Trial, CL had agreed that, as pointed out by SSM in her affirmation[65], apart from being employed by WKSA as Mr C’s secretary, she was also Mr C’s personal assistant, and she had assisted in his personal affairs and financial matters, and in that capacity, she dealt with all of his personal matters, including payments to his family and his mistresses, payments into and out of his private companies, bank accounts, filings, bank statements, appointments, club memberships and the like, and was intimately aware of all aspects of Mr C’s personal affairs, except CL had said that she would not know what happened between Mr C and Mrs C or their family.

97.  It was not disputed that during that period that CL alleged she started sexual relationship with Mr C, he had two mistresses, namely Madam Ching and Madam Tam. As said, his relationship with them was known to his family, CL, and in particular, his relationship with Madam Tam was a high profile one.

98.  Insofar as Madam Ching was concerned, as said, she had two children with Mr C, namely a son HSH who was born in 1989 and a daughter ASC who was born in July 1992. According to ASC’s 1^st affirmation filed herein, her mother’s relationship with Mr C ended in around 1994, which meant that the relationship between Mr C and Madam Ching lasted at least some 6 years. Further according to ASC, her mother later married a another man (“Mr Chong”) in around 1995, but later they separated and, despite that, her mother and Mr C had maintained a friendly relationship and that both HSH and ASC had maintained regular contact with their father that they would stay at Mr C’s home during their childhood[66].

99.  It was not clear as to when Mr C’s relationship with Madam Tam started but according to JSH’s evidence during the Trial, she had said that during the 5 year period before her father’s 1^st Stroke, Mr C was carrying on his high profile relationship with Madam Tam. In the absence of any contrary evidence, this would mean that Mr C’s relationship with Madam Tam started latest by about 1999, and even on CL’s evidence, it had continued after Mr C’s 1^st Stroke in 2004. In fact, even according to the driver Wallace, who only started to serve Mr C in latter part of 2007, Mr C was still seeing Madam Tam once every one or two weeks. According to SSM, CL was completely aware of Mr C’s relationships with Madam Ching and Madam Tam as arrangements involving Mr C with Madam Ching and thereafter Madam Tam were made by CL at the time, including lunch and dinner appointments, golfing excursions and holidays[67]. CL admitted during the Trial that she was aware of Mr C’s intimate relationship with respectively Madam Ching and Madam Tam.

100.  Although CL denied that she had assisted Mr C in his arrangements with Madam Tam, CL had admitted during the Trial that she was aware that Mr C and Madam Tam would travel together, although according to CL, Madam Tam would book her own tickets. CL also admitted that there had been contact between her and Madam Tam although CL said was rare, and that it was in the capacity as Mr C’s girlfriend that Madam Tam had contacted CL. CL said that it was Mr C who gave her direct orders, not Madam Tam, but CL also admitted that she, as Mr C’s personal assistant, had accompanied him to his meetings with Madam Tam, after Mr C’s 1^st Stroke.

101.  Even during re-examination, CL’s evidence was that during the period from 1992 to prior to the 1^st Stroke, Mr C was nice to her but not to the extent of love and that her feeling was that he could not treat her the same way he treated his girlfriends/mistresses, as he and CL had to carry on their relationship secretly. Anyway, I find no evidence that the relationship between CL and Mr C prior to his 1^st Stroke was “long time close romantic and intimate” or “meaningful and mutually supportive” as initially described by CL. It was, as CL herself described, only a “transactional relationship”.

E.5.3.  Period between the 1^st Stroke in September 2004 and the 2^nd Stroke on 11 December 2010

102.  According to SSM, after her father’s 1^st Stroke, he was in the constant care of two helpers who were primarily in charge of taking care of Mr C and his every day needs, with one being on duty at all times.

103.  CL’s evidence in her 1^st affirmation was that after the 1^st Stroke, she had visited Mr C daily at the Hong Kong Sanatorium & Hospital (“HKSH”) in the afternoon and would remain with him and take care of him until later afternoon or early evening, and that after his discharge, she would visit him at his home instead[68].

104.  It was also CL’s evidence in her 1^st affirmation that after Mr C’s 1^st Stroke, the Monthly Payments were continued to be made to CL by SSM for several months whilst Mr C was recovering[69]. CL however admitted under cross examination that she had told SSM that as the person who used to manage Perm had left, CL took up the job of managing Perm and that the Monthly Payments from Mr C were for her services of managing Perm, and that was why the Monthly Payments were continued to be paid by SSM to CL for several months until Mr C recovered sufficiently to be able to continue to make those payments himself. CL admitted that she had lied to SSM who believed her, but alleged that Mr C was aware of what she had told SSM.

105.  It was CL’s evidence in her 2^nd Statement that after Mr C’s 1^st Stroke, she was told by him to do all his filing and to keep his personal cheque books for him, and that after Mr C recovered , he resumed going back to the office and at that time, CL was told to open all his letters and his business documents and to put them on his desk for him to review, and that after he finished, she was told to file them in accordance with is instructions, although CL claimed she never examined the contents in those letters or business documents[70].

106.  The evidence from FSH in his affirmation of 6 June 2014 filed in the MH Proceedings was that after his father’s 1^st Stroke, his left side was incapacitated and he was confined to a wheel chair. FSH had said that his father became more dependent on those around him as he needed assistance in manoevring and performing simple tasks and as most members of his family were involved with the business or were busy with other work, they could not be there to assist him on a day to day basis, and that as a result, CL, as Mr C’s secretary, took on “an enlarged role” in his daily life including being asked to attend events and lunches with Mr C to assist him, and that Mr C became more reliant on CL from this time[71]. It was further FSH’s evidence that he believed it would be very difficult for his father to have a sexual relationship with anyone after his 1^st Stroke since he was so incapacitated physically, and further that there had been a marked change in his character and that he would become more openly emotional[72]. This was also the evidence from SSM in the MH Proceedings.

107.  When asked, CL denied FSH’s evidence that it was difficult for Mr C to have a sexual relationship with anyone after the 1^st Stroke due to his physical incapacitation. However, CL’s own evidence at the Trial was that Mr C “半邊身體唔方便”, which meant he would have limitation in moving half of his body. CL had also said she would accompany Mr C to lunches and meetings everyday as he had mobility issues and could not move around as freely as before.  

108.  Even according to CL’s daughter FC, Mr C would need more help physically after the 1^st Stroke, and that he was not the same person as before, and that when she had meals with her mother and Mr C at a restaurant, his helpers would be there to help him and to push him in his wheelchair, and that he would be assisted by his driver and his helpers who would then go away after he settled down, and that her mother would then help him cut his food for him to eat.

109.  In 2005, Mr C learnt about medical treatment which he could receive in Beijing and according to CL, he told her he would not go unless CL accompanied him. CL said as she wanted him to receive the best medical treatment possible, she agreed to accompany him there for 3 months.

110.  However, it appeared that it was Mrs C who requested CL to accompany Mr C to Beijing. According to SSM and JSH, CL had only visited Mr C from time to time when he was in Beijing so that she could assist with his business and professional affairs whilst he was there.

111.  In fact, according to FC[73], she was still in high school at the time[74], and it was FC’s evidence that it was Mrs C who asked her mother to travel to Beijing with her and Mr C. It was clear that CL going to Beijing was with the approval and knowledge of Mrs C and her family members. What was also clear from FC’s evidence was that CL did fly back to Hong Kong regularly during the 3 month period to visit FC and her sister, and that CL was also catching up with the clerical work at the office which had piled up during her absence in Hong Kong.

112.  It would appear that by May 2005, Mr C was back in Hong Kong, as the agreement for sale and purchase for the Happy Valley Property was entered into by SG Ltd on 24 May 2005. According to CL, Ringo had assisted Mr C to arrange for the mortgage facility with the Bank of Communications at the time of the purchase[75]. The completion was on 27 June 2005 and thereafter, the monthly mortgage repayments were credited/transferred by Mr C from his Wing Hang bank account direct into the bank account of SG Ltd at Bank of Communications[76].

113.  According to CL, after Mr C returned to Hong Kong, they continued to see each other at all available times. They had lunch together every day, and that she accompanied him to most of his business events, and that she would spend a large part of the day with him, which included going to physiotherapy with him, and that she even bathed him and that when Mrs C was not in Hong Kong, CL would not leave Mr C at his home in the evenings until he fell asleep.

114.  However, the Will was executed by Mr C on 12 September 2005, about 3 months after he bought the Happy Valley Apartment for CL, and yet there was no financial provision for CL in the Will.

115.  It was almost a year after he executed the Will, namely on 12 September 2006, that Mr C executed the 1^st Codicil. As seen in the 1^st Codicil, Mr C’s intention was that the Happy Valley Property was to be given to SG Ltd by way of gift and free of mortgage upon his death. There were no other provisions for CL. Yet, in the 1^st Codicil, Mr C did bequeath a monthly sum of HKD 50,000 to Madam Ching during her life time, provided the total payment paid to Madam Ching was not to exceed HKD6,000,000, ie for a period of not more than 10 years after his death.

116.  CL’s evidence in her 1^st affirmation was that apart from discussing with her the 1^st Codicil at the time of its execution, Mr C had also told her that he intended to provide both her and Madam Ching HKD 50,000 per month “by way of life interests following his death”. It was CL’s evidence that after discussion with her, an agreement was reached between her and Mr C (“Agreement”), namely that instead of providing her with HKD 50,000 per month after his death, Mr C would give CL an annual sum of HKD 500,000 during his lifetime (“Annual Payment”)[77].  

117.  According to CL’s written evidence, she had received a total of HKD 1,500,000 for the period 2007 to 2009 (ie 3 years) towards the alleged Annual Payments and that the Annual Payment for 2010 had not yet been made before Mr C’s 2^nd Stroke. Further, according to CL’s written evidence, the Annual Payment was in addition to the alleged Monthly Payment which had by 2009 been raised to HKD 70,000 per month[78].

118.  In her 1^st Affirmation, CL had produced in “LYYC-1-3” copies of cheques drawn in her favour by Mr C or by Perm said to be for the alleged Monthly Payments[79], and in “LYYC -1-4” copies of cheques drawn in her favour by Mr C or by ESL said to be for other payments including the alleged Annual Payments[80].

119.  So far as “LYYC-1-4” was concerned, those cheques produced by CL included those said to be made to CL for the following purposes:

(1)  when CL’s mother passed away in 2008, Mr C gave her HKD 350,000 to purchase connected colubarium for her parents at Shatin;

(2)  when CL had a tooth implant in 2008, Mr C settled 95% of the cost of HKD 450,000 (the remaining 5% balance was settled by her in 2011 as by then Mr C had suffered his 2^nd Stroke);

(3)  other additional sums during special occasions such as Christmas or her birthday, usually of the order of about HKD 100,000 or more.

120.  During the MH Proceedings, a table had been compiled by CL of those cheques, produced under “LYYC-1-3” (which will be referred herein as “Part I”) and those under “LYYC-1-4” (referred herein as “Part II”) with dates, numbers, payers, amounts and amounts (“Table of Cheques”)[81]. In the MH Proceedings, CL had been asked to provide legible copies of some of the cheques, and again in these proceedings prior to the Trial. CL’s answer had been simply the copies of the cheques produced by her were the ones provided by the bank. As CL was able to compile the Table of Cheques, which had set out the particulars on even those illegible copies of the cheques she obtained from the bank, it would appear that CL must have another source for compiling the Table of Cheques.

121.  Under cross examination, CL had at first said that she had checked the cheques against her monthly consolidated bank statements which she gave to her lawyers, but later she then said those bank statements had been thrown away before she issued her summons in 2016 in the MH Proceedings. Eventually, during cross examination, CL disclosed that she still had in her possession the passbooks of her savings account at the Bank of Communication, and that she only found them in July/August 2022.  

122.  As the Table of Cheques was prepared by CL for MH Hearing during the MH Proceedings and over 6 years before she said she found her passbooks, as pointed out by Mr Man, CL must have another source for compiling the Table of Cheques which she had not disclosed. CL was clearly not being forthcoming on how she was able to compile the Table of Cheques.

123.  Under further cross examination, CL had admitted that she applied for those copies of the cheques from the Bank of Communications prior to 9 January 2014, the date of the Demand Letter, which meant that she should have been able to obtain copies of cheques and/or statements from the bank from at least January 2007, as banks in Hong Kong normally retain banking records/information of account holders for 7 years, but the earliest date of the cheque set out by her in the Table of Cheques was one dated 20 December 2007. When asked, CL’s response was that she was told by the bank that they could only provide copies since December 2007. No evidence had been produced by CL to support her allegation.

124.  In relation to the alleged Agreement, CL’s evidence initially was that that there was no Annual Payment of HKD 500,000 in 2006, and that the Annual Payments paid by Mr C after the Agreement were in 2007, 2008 and 2009. However, according to Part II of the Table of Cheques, there was only one cheque from Mr C in 2007, which was dated 20 December 2007, for HKD 150,000[82]. In fact, none of the cheques listed by CL in Table of Cheques was for an exact amount of HKD 500,000. When asked, CL’s evidence was initially the two payments by cheques dated 28 February 2008 and 6 March 2008 respectively for a sum of HKD 250,000 formed the total sum of HKD 500,000 for the Annual Payment under the allged Agreement. Her explanation was that that it was the usual practice of Mr C to pay her by instalments, but offered no explanation why this was Mr C’s usual practice, in particular when she was paid HKD 5m in a lump sum by Mr C in 2010. Anyway, as it was also her evidence that there was no understanding between her and Mr C as to whether the Annual Payments were to be paid in advance at the beginning of the year or in arrears at the end of the year, it was thus not clear whether those two cheques were meant to be the Annual Payment for 2007 or for 2008.

125.  As set out in Part II of the Table of Cheques, there were 5 other cheques stated to be issued by Mr C during 2008 totalling HKD 750,000. When questioned over the purpose of those cheques, CL had initially said HKD350,000 was for the columbarium for her mother, but could not recall whether the other cheques were for her tooth implant. She then changed her evidence later and claimed that one of the two HKD 250,000 cheques, ie the one dated 28 February 2008 could have included HKD 100,000 gift for her birthday, and that it was not part of the Annual Payment under the Agreement.

126.  Eventually, on the 3^rd day of the Trial, CL produced 22 of her Bank of Communications savings passbooks (“Passbooks”) dating from 15 November 2006 to 21 June 2022[83]. It was CL’s evidence during the Trial that during her bankruptcy period 2002 to 2006, she had no bank account. Anyway, it was not clear why she did not try to look for the Passbooks during the MP Proceedings and also why she was not able to find them when she moved out of the Happy Valley Apartment towards end of 2018, nor was it clear as to why she did not immediately produce the Passbooks as soon as she found them in July 2022.

127.  As seen in the Passbooks, there were numerous transactions in her savings account and some marked “NTR” (No Book Transfer). When asked, CL said those transactions were transfers between her savings account and her current account/fixed deposit account, and that all transactions marked “NTR” should be for her own use and not from/to Mr C. It was put to her that the payments from Mr C could be for reimbursements for payments CL had made on behalf of him, or for other purposes, and they were not gifts from Mr C, but this was denied by CL. However, CL had confirmed during cross examination that those cheques not set out in the Table of Cheques were not from Mr C.

128.  I have to say CL’s evidence concerning those cheques in the Table of Cheques later amended after her production of the 22 Passbooks (“Revised Table of Cheques”) and those transactions in her savings account at the Bank of Communications was confusing and it was not clear at all as to how the alleged Annual Payments under the alleged Agreement for 2007, 2008 and 2009 were paid. I will come back to this issue later in this judgment.

129.  According to CL, in about 2007, Mr C’s family caused her significant anguish and unhappiness and that not being able to withstand the pressure, she handed in her resignation, but Mr C refused to accept it. It was CL’s evidence that Mr C requested CL to promise and guarantee that as long as he was running his businesses she would not leave him or resign, and that he promised her that he would treat her just like a family member and that her life and her well-being would be safeguarded[84]. It was further CL’s evidence that as in 2007 Mrs C’s attitude towards CL underwent a sudden change, thereafter, CL stopped visiting Mr C at his home, but that she and Mr C “still saw each other almost every day” at her home, and that this relationship continued till up to the time Mr C had his 2^nd Stroke[85].

130.  Again, it seems that CL’s evidence was rather confusing since CL denied she was threatening to break up her alleged intimate relationship with Mr C at the time. On her case, her only employer was WKSA, and resigning from WKSA would not mean breaking up of her alleged intimate relationship with Mr C. Even without working at the office of WKSA, there was no reason why CL could not still accompany Mr C to say, lunches and/or to continue to see him every day. When asked, CL said it was because Mr C wanted to be able to see her all the time when he was in his office.

131.  Although CL’s evidence that in about 2007, Mrs C’s attitude towards her underwent a sudden change and that Mr C’s family caused her anguish and unhappiness, yet FC’s evidence was when she and her mother went with their family to Shanghai in 2008 for a vacation, Mrs C was an excellent host to her family[86].

132.  Anyway, at about this time, in addition to the provision in the 1^st Codicil for Madam Ching, on 28 November 2008, Mr C decided to purchase the City Garden Apartment for Madam Ching’s children with him, namely ASC and her family including HSH, for them to reside therein. As said earlier, the City Garden Apartment was purchased in the name of a company Abbeylands. On 3 October 2008, the Formal Sale and Purchase Agreement was executed by CL as director of Abbeylands[87].

133.  When CL was shown a copy of the Formal Sale and Purchase Agreement for the City Garden Apartment, which she had signed as a director of Abbeylands, she had denied having seen the document before and said she was only told by her boss Mr C to sign. She denied she was involved in Mr C’s decision to use Abbeylands to hold the City Garden Apartment. Notwithstanding such denials, it was clear that CL was fully aware of Mr C acquiring the City Garden Apartment for Madam Ching, ASC and HSH.

134.  Mr C was said to be a public figure. CL had produced an article in a gossip magazine which appeared to show that in May 2009, there had been media attention to the relationship between CL and Mr C. The magazine article of 21 May 2009 bore a headline “[Mr C] was accompanied by a woman at every meal”[88], in which it was reported that Mr C was seen having lunch and dinner every day with a long hair woman, and that sometimes Mr C would pick up the woman from her flat in Happy Valley in his Mercedes Benz car (“May 2009 Article”). It was further reported that an “insider” disclosed that that the long hair woman was Mr C’s secretary CL who would accompany Mr C to meals and even to his meetings with friends, and that Mr C was very fond of his secretary who was being paid a high salary with other benefits and that she was even provided with the use of a BMW car. The photographs in the May 2009 Article showed the woman accompanying Mr C to be CL. It was also reported that when Mr C was asked about his relationship with CL, Mr C’s response was she was his secretary who had worked for him 20 odd years and that if he had no one to have meals with, she would accompany him.

135.  When asked, CL admitted during the Trial that the May 2009 Article did not deter her from accompanying Mr C every day to meals, or to continue to see Mr C at the Happy Valley Apartment.

136.  According to CL, in 2009, Mr C was at the Hong Kong Sanatorium & Hospital (“HKSH”) for surgery, he had telephoned her one night after Mrs C left the hospital for Shanghai and spoke in “an excited and energetic tone” and asked CL to go quickly to the hospital as he had thought of a really good gift for her. When CL arrived, Mr C told her that he had decided to give her the assets of Perm and WKEL totaling approximately USD 10m[89].

137.  What was not disputed was the 2^nd Codicil was executed by Mr C on 7 July 2009, which was some 2 years and 9 months after the 1^st Codicil. In the 2^nd Codicil, Mr C bequeathed his shares in Alliance to SG Ltd. As mentioned earlier, Alliance held 6001 out of 6002 shares in Perm, which in turn held WKEL (registered owner of the Lippo Property).

138.  According to SSM, the value of the assets of Perm and WKEL at that time, namely throughout 2009 and 2010, was considerably lower than USD 10m and that the net value of the Lippo Property was only about HKD 15.77m at the time of the 2^nd Codicil. Further, according to SSM, Perm was used as a “cashbox” for settling Mr C’s personal and his family’s expenses.

139.  During the Trial, CL had denied that Perm was used as a “cashbox” by Mr C prior to the 2^nd Stroke, but CL admitted that there had been payments made from Perm by Mr C to, say a relative from Mainland China, and for the expenses of the upkeep of the graveyard in Taiwan for Mr C’s 2^nd elder brother. CL also admitted that all maintenance/repairs expenses of Mr C’s two cars were paid out of Perm’s account. Thus, notwithstanding CL’s denial, Perm was clearly used by Mr C for his personal and his family expenses.

140.  It was CL’s written evidence in her 1^st affirmation that in about 2009, Mr C had given her a sum of HKD 5m telling her that the sum was for temporary financial relief for the period after he passed away and before probate of his estate could be granted[90].

141.  During the Trial, CL admitted that the sum of HKD 5m was in fact paid to her by Mr C in 2010, after he sold the Shek O House and having made almost HKD 100m in profit. However, she denied that Mr C gave the amount to her because he was happy about the profits he made.

142.  It was put to CL that the alleged Monthly Payments of initially HKD 25,000 per month (later increased to HKD 40,000 per month by 2002 and then by 2009 to HKD 70,000 per month) were paid by Mr C to her for her additional work as personal assistant to him in dealing with his other private affairs and/or providing services for Perm and/or other private companies, and that she was a good employee. This was denied by CL.

143.  Just before the 2^nd Stroke, CL was receiving HKD 38,000 per month as salary from WKSA and the Monthly Payment of HKD 70,000 from Mr C, totalling HKD 108,000 per month. It was put to her that HKD 108,000 per month was a fair pay for the work she was doing for Mr C, and that HKD 38,000 per month would be low. CL admitted that the salaries for the senior staff at WKSA were on the low side as there had been no pay rise for 10 years, but she said she never thought about whether HKD 38,000 per month was low or not for the work she was doing. CL said at the Trial that the Monthly Payment was contribution for her “household expenses” (家用) due to their intimate relationship.

E.5.4.  Period between the 2^nd Stroke on 11 December 2010 and death

144.  Mr C had his 2^nd Stroke on 11 December 2010. SSM had said that this caused substantial damage to the left side of her father’s brain and thereafter, he became bed-ridden, required tube-feeding and could not speak or write.

145.  According to CL evidence in her 2^nd Statement to Vickers, she had said that on 11 December 2010, a Saturday, she received a call from Mrs C telling her that Mr C had suffered another stroke, and according to the 2^nd Statement, CL said she went to Mr C’s home and called the ambulance and sent him to Queen Mary Hospital, and that Mr C was unconscious. This was inconsistent with CL’s evidence in her 1^st affirmation in which she said that upon receipt of the phone call from Mrs C, CL immediately contacted Mr C’s cardiologist, Dr Lau, and CL then rushed to the hospital where Mr C was admitted[91].

146.  According to CL’s evidence in the 2^nd Statement, she had gone to the Queen Mary Hospital to visit Mr C after his 2^nd Stroke for three weeks to one month until Mr C was transferred to the HKSH after the new year[92]. However, it was CL’s evidence in her 1^st affirmation that during the first two weeks when Mr C was in a critical condition, she visited him as often as she could and would go to the hospital during lunchtime and after work, but that she stopped visiting Mr C due to media attention on their relationship and to avoid additional trouble and anguish to his family[93]. CL said when the media coverage died down, she told SSM that she would like to seek Mrs C’s approval to visit Mr C again but received no response.

147.  CL had produced a gossip magazine article which appeared to be published sometime in December 2010 after Mr C’s 2^nd Stroke[94], with the headline “A storm [gathering] - the fight over assets, the emergence of the “3^rd mistress” of [Mr C] and his wife [Mrs C] guarding the hospital room” [95] (“December 2010 Article”). There were photographs in the December 2010 Article purportedly taken on 14 and 15 December 2010 of various people visiting Mr C at the hospital after his 2^nd Stroke, including CL.

148.  During the Trial, when asked, CL said she did not visit Mr C after the December 2010 Article. She had also said it was not just because of the article, but there were also reporters at the hospital. As the article appeared to be published in December 2010, it would thus appear from CL’s evidence during the Trial that she ceased visiting Mr C when he was still at the Queen Mary Hospital which appeared to be inconsistent with her earlier evidence in her 2^nd Statement, that she only stopped visiting Mr C only after his transfer to HKSH after the new year in 2011.

149.  As said, it was CL’s evidence that after the media coverage died down, that she told SSM that she would like to seek Mrs C’s approval to visit Mr C [96]. When CL was asked about this during the Trial, she said all along she did not receive any notification that there was approval from Mrs C, and without permission from Mr C’s family, she did not go and visit Mr C.

150.  The fact was that thereafter until Mr C’s death on 20 July 2016 (for over 5 and half years), CL did not visit Mr C again. During the Trial, CL maintained that she was waiting for his family’s approval, and that as an employee of WKSA, she dared not go without the family’s permission. She admitted that she did not follow up, and simply waited.

151.  SSM denied that she and her family indicated any objections to CL visiting her father in hospital and had said that if CL truly cared about her father’s condition, any media attention would not have deterred her from visiting.

152.  It was also CL’s written evidence that in July 2013, arrangements were made for Mr C to receive treatment in Taiwan. According to CL, about a month prior to Mr C’s departure, the then managing director of WKSH, LPMC, had told her that if Mrs C were to ask CL to accompany Mr C to Taiwan, CL should refuse, and that the next day, Mrs C did make such a request to her, and CL said she reluctantly felt she should refuse Mrs C’s request[97]. However, JSH’s evidence was that when her mother requested CL to go to Taiwan to assist Mrs C and the family, CL declined because she said she had to take care of her elderly father in Hong Kong. When asked during the Trial, CL said that was only an excuse given by her to Mrs C. CL’s evidence during the Trial was also that LPMC was passing a message on behalf of Mr C’s children in asking CL to decline going to Taiwan as the children wanted their mother to personally take care of their father. However, this was not mentioned by CL in any of her affirmations. When cross examined, CL claimed she had told her lawyers this.

153.  I have to say CL seemed to give different reasons at different times to different persons and in any event when Mrs C requested her to accompany Mr C to Taiwan, CL could have at least made use of the opportunity to ask Mrs C to allow her to visit Mr C at HKSH, or as suggested by Mr Man, she could also have agreed to accompany Mr C to Taiwan as this would be an opportunity for her to be with Mr C if indeed according to CL, they had a very close and loving relationship. CL’s explanation was only that she was afraid of SSM, and that SSM was then her boss, and that if she did not listen to SSM, she would lose everything. However, CL was dismissed in September 2013, and that in March 2014, she had issued a summons against the Committee in the MH Proceedings, and she was clearly not afraid of SSM thereafter. In fact in the then affirmations filed by SSM and her sister in the MH Proceedings, they were accusing CL of not visiting their father and they denied CL’s reasons for not visiting. Yet, there was no step taken by CL to make any request to the Committee and/or Mr C’s family members for visiting Mr C, whether through her solicitors or otherwise.

154.  During the Trial, CL suddenly said that in 2013, when ASC, who was studying abroad, returned to Hong Kong for the 1^st time after the 2^nd Stroke, CL had dinner with ASC and SSM, and that after dinner, SSM was taking ASC to visit their father. According to CL, ASC had suggested to CL to go with them, but there was no response from SSM. According to CL, as SSM did not say she could go, CL felt unwelcome. At first, CL said this dinner took place in 2013, but she later changed her evidence and said it was in fact in 2011. This incident was not mentioned by CL in any of her affirmations. ASC had denied there was such an incident. In any event, if CL had indeed wanted to go, it was not clear how SSM could have stopped her.

155.  As seen earlier, the staff investigated in July 2013 over the Ringo incident included Ringo, CL, and also HMY. According to the Vickers Report, the initial inquiries resulted in the discovery of a total of HKD 3,090,000 missing from the ESL account, by Ringo making arrangements whereby 20 monthly consultancy cheques valued at HKD 154,500 each for payment into the ESL account had been cashed for Ringo’s own benefit, and that a further HKD 309,709 was missing from the petty cash pools under WKSA and another two companies. Ringo had admitted having stolen the sums. Ringo admitted having misappropriated money from the petty cash pool since 2008 and the ESL consultancy fee cheques following Mr C’s 2^nd Stroke.

156.  It was reported by Vickers that CL had lent Ringo RMB 160,000 and that Mr C had facilitated a loan from the company of HKD 2m approved by Mr C.

157.  It was further reported by Vickers that Ringo was able to successfully steal those funds by (i) taking advantage of his uncontrolled and unrecorded access to petty cash accounts under various WKMT entities which were under his direct custody and control, and (ii) his ability to effectively cash cheques which were intended for the ESL bank account. For (ii), Ringo instructed HMY to alter the payee on the cheques from ESL to Mr C’s name and to ensure those cheques were not crossed, thus enabling a cash withdrawal by Ringo. According to Ringo, CL had agreed to this arrangement but CL denied it. Insofar as HMY was concerned, she said she followed Ringo’s instructions as Ringo was her superior although it was contrary to WKMT’s standing instructions.

158.  The Vickers Report concluded that there was clearly a strong criminal case against Ringo. As for CL, other than Ringo’s statement to the contrary, there was no evidence to indicate that CL either knew of Ringo’s criminal activities or that she had actively colluded with him, but “given their close relationship (over 30 years) and their personal financial inter-dependence”, it would have been very difficult for her to expose Ringo’s activities to senior management, and thus Vickers had stated under “Possible Options” that WKMT might wish to consider whether it was appropriate for CL to remain in a position of trust in the longer term[98]. As for HMY, it was also recommended by Vickers that WKMY might wish to consider whether it was appropriate for her to remain with the company in the longer term.

159.  During the Trial, when cross examined, CL had denied there was a “close relationship” between her and Ringo, or any “personal financial inter-dependence” between them, as stated in the Vickers Report.

160.  As said earlier, Ringo did not go to work on 15 July 2013, the Monday after the theft was first discovered. According to CL, Ringo had telephoned her after work on 16 July 2013, and told her about accounting matters relating to the JSP (the younger of SSM’s twin sisters) and that Ringo had admitted to CL that he had use of the ESL fees due to his gambling, and he confessed to have made terrible mistakes and was talking about death[99], and that CL said she had informed the CFO of the company the following day about her conversation with Ringo. Later, Ringo had sent an email to SSM copying CL relating to his confession. On 19 July 2013, according to CL, Ringo returned to the office and met with SSM, and that was the last time Ringo and CL had any contact.

161.  During the Trial, CL denied that she tried to commit suicide on 19 July 2013 when she was asked to assist in Vickers’ investigation. CL explained she could not control herself as she felt so upset since she had served Mr C’s family for many years. She said she had asked SSM why SSM was treating her like this when she was asked to give a statement to Vickers and that she wanted SSM to pay attention to her, and that was why she cut her wrist. CL insisted that she was not committing suicide but admitted that she cut her wrist in the open office area to attract SSM’s attention.

162.  Notwithstanding CL denied that she had a close relationship with Ringo, her own evidence showed that: 

(1)  CL had said in her 2^nd Statement to Vickers that in 1992 after her “husband’s” sudden death, she had asked Ringo for help[100].

(2)  In 2002 (ie when CL was bankrupt (ie August 2002 to October 2006), she had asked Ringo for help to apply for two supplementary cards from Ringo’s account for her daughters, although according to CL, she had paid back all expenses to Ringo immediately, and that Ringo never provided a supplementary card for CL herself[101].

(3)  Some years later, Ringo had asked CL for help and asked her to remortgage her flat (ie the Happy Valley Apartment), as his wife was sick. CL suggested that he speak to Mr C instead. According to CL, she then told Mr C about Ringo’s problems and that Mr C had agreed to lend Ringo HKD 2m[102].

(4)  In 2008, Mr C had helped CL to get a supplementary credit card from ICBC but later that was cancelled. According to CL, as Ringo knew the guy at ICBC because of arranging the loan for Mr C in relation to the Shek O House, her supplementary credit card was arranged by Ringo and that CL had given her financial report to Ringo to give to the bank for review for this purpose, but CL said she did not know why Ringo had kept the original of her financial report[103].

(5)  According to CL, Mr C would provide her with HKD 50,000 cash to pay for his household expenses, but it was not a regular payment, only once every few months and sometimes less. When it ran out, she would tell Mr C and she would prepare a cheque from his Wing Hang bank account for Mr C to sign and she would give to the messenger who would cash the cheque and would bring the cash back. CL said as the cash was usually used for lunches for Mr C’s helper/s and for other small things, she would keep may be HKD 5.000/HKD 6,000 with her and the rest she would give to Ringo. She said she did not know where Ringo put the money but if the money was used up, she would ask for more from Mr C. CL said she never tried to keep an account of what she had given to Ringo as it was small money. She also said she never thought that the amount Ringo had was less than what she thought it really should be[104].

(6)  According to CL, after the 2^nd Stroke, she was mainly in the office during lunch time whereas before she would go out for lunch with Mr C. She knew that Ringo was getting into financial problems and that he had asked her for a loan and she had loaned him HKD 10,000 which he later repaid. CL said she had also loaned Ringo RMB 160,000 and that he later repaid some and ended up owing her about RMB 60,000. CL said Ringo was in financial problems as his wife was sick, and also he needed money for a court case to get back an apartment in Mainland China in the name of his wife. According to CL, Ringo never let on about his gambling at the time of the borrowings[105].

(7)  On 16 July 2013, it was CL whom Ringo called, and according to CL, Ringo was very emotional and started crying over the phone and told CL he was heavily in debt due to his gambling but assured CL not to worry about the RMB 60,000 debt he owed her as CL was the beneficiary to one of his life insurances[106].

(8)  On CL’s own evidence, when Ringo sent his email to SSM to admit his theft, it was CL whom he copied his email.[107]

163.  It would thus appear from the above evidence that whether CL knew of Ringo’s theft or gambling or not, she and Ringo did have a close relationship, and there was personal financial inter-dependence, as described in the Vickers Report.

E.5.5.  Analysis of the evidence

164.  On findings of fact and assessment of credibility, it has been set out by DHCJ Eugene Fung, Senior Counsel, in Hui Cheung Fai and Daiwa Development Limited, HCA 1734/2009, 08.04.14 as follows:

“77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce) …

78. In deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: e.g. Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5 May 2011) §39 (Chu J).

79. In determining a witness’ credibility, I have also attached importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses (Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336 at §§36-37 (Bokhary PJ)), or from the assessment of the witnesses’ character (Esquire (Electronics) Ltd v HSBC [2007] 3 HKLRD 439 at §135 (Stock JA)).”

165.  It is not disputed that the burden is on CL to prove that she had/has the locus to make a claim under section 3 of Cap 481.

E.5.5.1.  On CL’s relationship with Mr C

166.  As pointed out earlier, CL’s evidence as to when she started to have a sexual relationship with Mr C (if any) was vague and confusing and her oral evidence that it started in about mid 1992 was not really consistent with her written evidence in her 1^st affirmation that it developed from the personal acquaintance which had been formed between them “by around early to mid 1990s”. Her written evidence gave the impression that her sexual relationship with Mr C developed after mid 1990s, in other words, after 1995.

167.  CL’s witnesses were also not helpful on this issue. Although HMY in her affirmation said CL had told her about her intimate relationship with Mr C, HMY did not say when CL told her, and she had gone on to say in the same paragraph of her affirmation that it was difficult for CL as Mr C’s family members would “give her attitudes and difficult times”[108]. HMY appeared to be referring to 2007 when CL’s evidence was it was at that time Mr C’s family was causing her anguish and unhappiness and that CL had threatened to resign.

168.  As for CYL, as set out earlier, her evidence was ambivalent and evasive. When asked whether she knew that Mr C and CL were in a boyfriend/girlfriend relationship, CYL was evasive and only said Mr C treated CL very well. In any event, both HMY and CYL admitted that they would not know what CL and Mr C were doing in his office with closed door, or what they were doing in his private bathroom.

169.  Luis’s evidence that it was in 1992 that CL became Mr C’s “mistress” was hearsay from his mother. As for Wallace the driver, he only started working as a driver for WKSA on 17 July 2007 and was assigned to solely serve Mr C as his driver after a few months, and thus it would appear to be in the latter part of 2007 that he started to serve Mr C solely, and he was laid off around Chinese New Year in 2011 after Mr C’s 2^nd Stroke. Thus, Wallace would not be able to give any evidence on the relationship between Mr C and CL prior to the latter part of 2007. Wallace had said the conversations between Mr C and Mrs C/their children in the car had led him to believe that Mr C’s family also realized and acknowledged the intimate relationship between Mr C and CL, but he was not able to give particulars. In any event, Wallace’s own evidence was that it was around 6 months into his employment that he became suspicious of the relationship between Mr C and CL and this would mean it would be around February 2008.

170.  Anyway, none of CL’s witnesses was in a position to say when CL’s sexual or intimate relationship with Mr C actually began.

171.  SSM’s evidence was that she had been employed by the WK Group since 2002 and she had worked closely with her father and CL for many years and that having had the opportunity of observing the interactions between her father and CL throughout the years, there was nothing which would lead SSM to suspect that they had any special relationship other than a professional one[109]. It was SSM’s evidence during the trial that she only found out upon receipt of the Demand Letter the alleged relationship between her father and CL. This was also the evidence of JSH and as seen below, that of LPMC.

172.  LPMC’s evidence was that he had been working with Mr C since the 1980s and they were very close friends since then, LPMC became the CEO of WK Group/ Managing Director of WKSH in 1999 when the Belgian company he was responsible for became a major shareholder of WKSH. He moved to Hong Kong in June 1999 and he and Mr C had travelled around the world to look for business and later developed the idea of privatizing WKSH in 2000. Further, as a result of LPMC’s proposal, Mr C’s family later bought out the Belgian company and became the sole shareholder of WKSH in around 2004, and since then LPMC would come to Hong Kong about once a month, and staying about half a month each month, which was reduced to staying about a week each month when he got married, until 2010.  

173.  LPMC attended the Trial and under cross examination maintained that during the time when he was CEO, he was very much aware of what was going on in the company. It was his evidence that Mr C would share with him some of his personal matters, and that according to his understanding, Mr C’s relationship with CL was strictly professional and LPMC had never observed anything that was out of ordinary, and that by comparison, he had travelled together with Mr C when Mr C was sometimes accompanied by Madam Tam and that Mr C’s relationship with Madam Tam was a very close one and that they were openly affectionate and loving to each other. There was no sufficient evidence to contradict LPMC’s evidence. In fact, the evidence of Wallace the driver was that he had driven Mr C to visit his girlfriend, Madam Tam, once very one or two weeks and this had continued during the period of his employment.

174.  In light of CL’s own inconsistent evidence as to when her sexual relationship started with Mr C, even if she did start to have a transactional sexual relationship with Mr C at some point in time prior to his 1^st Stroke, I find there was no sufficient evidence that such a relationship started from as early as about mid 1992.   

175.  As set out earlier, after Mr C’s 1^st Stroke, FSH’s evidence was that it was unlikely that Mr C could have any sexual relationship with anyone after his 1^st Stroke since he was so incapacitated physically and that CL’s own evidence, as well as FC’s evidence, was that Mr C had mobility issues. In light of this, it seemed unlikely that CL and Mr C could have been having any regular sexual relationship after his 1^st Stroke.

176.  Having said this, it should be the closeness and the extent of the relationship between CL and Mr C that is more relevant, and not whether the relationship was a sexual one or not.

177.  What was clear was that from the evidence of FSH, as well as SSM’s, that after their father’s 1^st Stroke, there was a marked change in his character, and that Mr C would become more emotionally unstable. This in fact also accorded with CL’s own evidence that after his 1^st Stroke, Mr C became more emotionally and more personally involved with her. FC’s evidence was also that Mr C had “transpired into a different man”(sic)[110] after his 1^st Stroke. All their evidence showed that Mr C had changed into a much more emotional man than prior to his 1^st Stroke.

178.  It was also clear that Mr C’s high profile relationship with Madam Tam had continued after his 1^st Stroke.

179.  CL’s intimate relationship with Mr C was according to her a covert one. There appeared to be no sufficient evidence that Mrs C and her family had any suspicion of the alleged intimate relationship between Mr C and CL, prior to his 2^nd Stroke. Although Mrs C did not give evidence, it would seem improbable that Mrs C, with the knowledge of her children, would have asked CL to accompany her and Mr C to Beijing in late 2004/early 2005, and to allow CL to accompany Mr C at his home with Mrs C when Mrs C was not in Hong Kong. Although CL did mention a change in Mrs C’s attitude in 2007 (which was denied) and CL then stopped going to Mr C’s home, this was not sufficient evidence to indicate Mrs C had by then become suspicious. It was improbable that had she been suspicious, Mrs C would still be an excellent host to CL and her family when they went to Shanghai in 2008 for a vacation. In any event, I find there was no sufficient evidence that there was any suspicion on the part of Mrs C and her children that prior to Mr C’s 2^nd Stroke, there was anything other than an employer/employee relationship between Mr C and CL, or that after the 1^st Stroke, CL had merely taken on an “enlarged role” in Mr C’s daily life as described by FSH.

180.  Anyway, there was no mention of the Happy Valley Apartment to CL in the Will and there were no financial provisions for CL at all in the Will which was executed on 12 September 2005 by Mr C, which was about a year after his 1^st Stroke.

181.  It was not until the 1^st Codicil, which was executed about 2 years after his 1^st Stroke, namely on 20 September 2006, that Mr C decided that the Happy Valley Apartment would be given to CL mortgage free upon his death. There were no other provisions in the 1^st Codicil for any maintenance payments made for CL upon his death, and yet, provisions for maintenance payments were made for Madam Ching. Even though CL claimed that there was the alleged Agreement with the alleged Annual Payment of HKD 500,000 during his lifetime instead of after his death, as set out later in this judgment, I find there was no sufficient evidence of the alleged Agreement or the alleged Annual Payments. What can be seen in the Revised Table of Cheques, the frequency of cheque payments to CL from Mr C increased only from early 2008.

182.  Having considered all the evidence, I find irrespective of whether there was any sexual relationship between Mr C and CL after his 1^st Stroke, it would appear that after Mr C returned from Beijing in early 2005, as CL was accompanying him constantly, the relationship between Mr C and CL did start to grow closer. It was not surprising that Mr C would gradually find emotional dependence and support from the constant companionship provided to him by CL and that he would gradually become more and more emotionally attached to her. It was also not surprising that when CL ceased going to his home in 2007 allegedly due to Mrs C’s attitude, he would go to CL’s home, ie the Happy Valley Apartment, to be with CL. Even so, it appeared from Wallace’s evidence that Mr C would still return to his own home every night, as Wallace would pick him up from his home every morning to go to the office. Further, even if Mr C had sometimes stayed late at the Happy Valley Apartment, there was no evidence that he had set up a separate home with CL at the Happy Valley Apartment or had ever regarded the happy Valley Apartment as his second home. Having considered all the evidence, it is my finding that after his return from Beijing, Mr C did start to gradually become close to CL but it was not until early 2008 that Mr C became emotionally dependent on and closely attached to CL.

183.  Even though according to CL, she was rendering care to and looking after Mr C including bathing him, I do not find sufficient evidence that CL was emotionally or closely attached to Mr C to the extent he was to her. Her explanation as to why she did not go on visiting Mr C, in particular after he was transferred to HKSH, as set out earlier, did not make sense, as she had continued to see Mr C in public and in the Happy Valley Apartment notwithstanding the May 2009 Article. Even if according to her, the December 2010 Article and reporters’ and/or public attention deterred her from visiting Mr C at the Queen Mary Hospital which was a public hospital, there was no reason why she could not have visited Mr C after he was moved to the private hospital HKSH where in fact she had visited him before in 2009 just prior to the 2^nd Codicil when he was undergoing a surgery. As seen earlier, there was no reason why she could not either accompany or visit Mr C in Taiwan, or make an application to court to visit Mr C.

184.  I find no sufficient evidence that Mrs C, or SSM, or any one of Mr C’s family or the Committee had objected or prevented CL from visiting Mr C after his 2^nd Stroke. I do not find CL’s explanations for failing to visit Mr C since about early 2011 credible.

185.  The fact was CL never visited Mr C again after his transfer to HKSH until his death in July 2016, namely a period of some 5 1/2 years. It appeared in the minutes of the Committee Meeting that Mr C went to Taiwan for some new stem cell treatment sometime in the first half of 2012, and that an application for residency was made for him[111].

186.  The Committee had held regular meetings after their appointment in 2012 and Mr C’s death, and minutes of those meetings had been submitted to the judge in the MH Proceedings (“MH Judge”). As seen in the minutes of the 1^st Committee meeting on 15 January 2013, it was planned for Mr C to remain in Taiwan to receive medical treatment until July 2013 when he would return to Hong Kong[112]. In the 2^nd Committee meeting on 9 July 2013, it was noted that Mr C’s condition had improved and that Mrs C noted that he had become more alert and aware although he remained incapable of dealing with his affairs and that he gave the impression that he had become increasingly homesick[113], and plans were being made for his return, and that he would be accompanied by a medical doctor for his journey to Hong Kong on a chartered flight and an ambulance would then transport him to the HKSH[114]. The minutes of the 3^rd Committee meeting on 13 August 2013 indicated that the approval for the clinical trial application for the stem cell procedure had not come through. It appeared from the minutes of the 4^th Committee meeting on 13 January 2014 that Mr C had not yet returned to Hong Kong, but since the 2^nd Committee Meeting, his condition had improved and he had become more alert and aware, and that as Mr C was increasingly homesick and needed to be around his family and friends in his “home environment”[115].

187.  As seen in the minutes of the 5^th meeting, Mr C eventually returned to Hong Kong on 31 March 2014 and had initially settled into the HKSH but had other health issues[116]. This meant that Mr C had been in Taiwan for about two years, from early 2012 to 31 March 2014. Mr C was eventually discharged from the HKSH on Father’s Day, 19 June 2014 and settled into his new rented home in Repulse Bay with seaview, and SSM noted that Mr C gave the impression he was comfortable in the new environment and he liked his home[117].

188.  The minutes showed that Mr C went to Taiwan in the first half of 2012 and not in July 2013 as said by CL in her 1^st affirmation. What was clear was that whilst Mr C appeared to have shown improvement in his condition, not only did CL did not make any proper attempt to visit Mr C, there was also no evidence that CL had shown any concern towards Mr C’s condition in any way since early 2011, whether before or after his return from Taiwan. In my view, this demonstrates the extent of CL’s feelings towards Mr C and that I find there was no real love or affection or concern on CL’s part towards Mr C’s well being and she had in effect brought her relationship with Mr C to an end in early 2011.

189.  To summarise, it is my finding that, Mr C’s relationship with CL did start to gradually grow closer after his return from Beijing but it was not until early 2008 that Mr C had become emotionally dependent on and emotionally closely attached to CL. However, not long after his 2^nd Stroke, in early 2011, CL had abandoned Mr C and she had brought their relationship to an end. By the time of Mr C’s death, there had been no relationship between CL and Mr C for some 5 ½ years. The relationship was not a “long term close romantic and intimate relationship” as alleged by CL.

E.5.5.2.  On various payments allegedly made by Mr C to CL

E.5.5.2.1.  The alleged Monthly Payments

190.  First, according to CL’s oral evidence, her transactional sexual relationship with Mr C commenced at the same time as the alleged Monthly Payments. As I have found earlier that there was no sufficient evidence that her transactional sexual relationship with Mr C (if any) started in about mid 1992, or when it started, it was thus not clear when the alleged Monthly Payments, if any, in fact started.  

191.  Second, as to the circumstances of how the Monthly Payments started, CL’s written evidence was that Mr C told her that he would like to “take care of ” her and would treat her very well and he “offered ” her the Monthly Payment of HKD 25,000 from his personal account in addition to her salary, and CL “accepted ” the offer[118]. There was clearly an “offer” and an “acceptance” of the bargain they were entering into. As mentioned earlier, CL herself had put it bluntly during the trial, that if there was a need on the part of Mr C, she would provide it, referring to the transactional sexual relationship. It would thus appear that the Monthly Payments, if any, were made to CL pursuant to an agreed bargain between CL and Mr C. In other words, the alleged Monthly Payments, if any, could not be said to have been made “otherwise than for full valuable consideration”.

192.  Third, as seen earlier, the only documentary evidence provided by CL in support of the alleged Monthly Payments were initially those copies of cheques produced by her with the amounts set out in Part I of the Table of Cheques in the Revised Table of Cheques, the earliest alleged Monthly Payment of HKD 60,000 was on 25 January 2008. It was CL’s evidence that the Monthly Payments were increased to HKD 40,000 by about 2002. It was not sure how she would recall this, as the first of the 22 Passbooks was from 15 November 2006. There appeared to be no credits of HKD 60,000 cheques between 15 November 2006 and 25 January 2008. Further, according to Part I of the Revised Table of Cheques, for the entire year of 2008, there were only 8 cheques of HKD 60,000 each. For 2009, there were 12 cheques (from January – March 2009, HKD 60,000 per month, and thereafter, HKD 70,000 per month), but for 2010, there were only 9 cheques of HKD70,000 each. There appeared to be no documentary evidence from CL of how the alleged Monthly Payments, if any, were being made by Mr C to CL or into which of CL’s bank account/s they were credited between 15 November 2006 until 25 January 2008, or prior thereto, or since mid 1992 as alleged by CL. There was no sufficient evidence of the frequency or the amount prior to January 2008.

193.  Fourth, although it was CL’s written evidence that she accepted Mr C’s offer because of her “then financial position” and her “warm feelings” towards Mr C, not only did her own oral evidence contradict the alleged “warm feelings” on her part, there was little or no evidence at all as to CL’s “then financial position”.  

194.  All CL said in her 1^st affirmation was that her then boyfriend’s death caused her “great concern and worry” about how to bring up her daughters. Although CL’s brother Luis said CL’s finances improved after she accepted Mr C’s offer to become his mistress, and that CL had started to pay their mother regular allowances and pocket money for looking after her daughter, there was no evidence as to what actually was CL’s financial position at the time.

195.  There was also no information of her then boyfriend’s financial situation at the time of his death, nor was there any information as to whether he had made any financial provision for CL and/or their two daughters, whether prior or upon his death. It was not clear whether CL made any claim under Cap 481 against her then boyfriend’s estate. There was no reason as to why CL could not have provided information or details of her own financial circumstances upon his death, which was one of the reasons she said made her accept the offer from Mr C. There was not even sufficient evidence as to what CL’s salary from WKSA was in 1992 or during the 12 year period thereafter, and CL’s evidence at the Trial, was that the salary cheques from WKSA were cash cheques during her bankruptcy period and that she would immediately cash them on receipt.

196.  More importantly, there was no evidence as to what CL’s “reasonable needs” were in about mid 1992 or thereafter. In her 1^st affirmation, CL had said she together with her two daughters and “her extended family to some extent” became very financially dependent upon Mr C[119]. CL had described the alleged Monthly Payments as maintenance/financial provision for her in the Demand Letter and during the Trial, she had also said the Monthly Payments were for “household expenses” (家用). As said, she and Mr C had never set up home together. There was no information as to where CL was living prior to her moving to the Happy Valley Apartment, or whether she ever moved back to live with her parents, or whether she was living with anyone apart from her two daughters. There was no information as to what her household expenses or her reasonable needs were, nor was there any evidence of what her daughters’ school fees were.

197.  It was CL’s evidence that the alleged Monthly Payment was increased to HKD 40,000 per month by 2002, and to HKD 70,000 by 2009. Again, there was no information or evidence as to what the alleged increments were based on, whether they were based on inflationary rate, or Consumer Price Index, or how they were linked to CL’s reasonable needs. On the other hand, as mentioned, CL filed for bankruptcy in 2002 alleging she was in financial difficulties. The fact that she was not able to manage her own finances and ended up with debts of some HKD 1m which she could not repay would tend to indicate that the alleged Monthly Payments and/or whatever alleged financial support she said she was receiving from Mr C were not substantial, nor sufficient to meet her then reasonable needs.

198.  Although FC’s evidence appeared to support CL’s case that she was in financial difficulties in 2002, it was FC’s evidence that it was sometime later that it came to her knowledge that Mr C was subsidizing her family expenses including her school fees. In any event, as said if Mr C was indeed subsidizing CL’s family expenses including FC’s school fees at the time, CL, could not have been under huge financial distress, unless such subsidy was not sufficient nor substantial.

199.  Fifth, as mentioned, CL’s evidence in paragraph 14 of her 1^st affirmation as to how the Monthly Payments came to be offered by Mr C was that Mr C said he would “take care of ” CL and would “treat [her ] very well”. There was no evidence as to the duration, namely whether CL would be taken care of and treated very well during the period of CL continuing to provide Mr C with sexual relationship, or during the period of CL continuing to provide her services to WKSA/Mr C as personal secretary/personal assistant, or whether until CL’s remarriage or during CL’s life time, or during Mr C’s life time.

200.  It was LPMC’s evidence during the trial that while he was CEO of WKSA, he was responsible for all payments for the staff and he had thought CL’s salary from WKSA of HKD 38,000 per month was a very low salary and he had raised the point with Mr C, but Mr C told him not to worry as apart from the salary CL was receiving from WKSA, CL was being paid additional money by Mr C for other services she was rendering to Mr C’s private companies. LPMC said he did not know what the exact additional amount paid by Mr C to CL was until the 2^nd meeting of the Committee.

201.  To summarise, having considered all the evidence, I do not find there was sufficient evidence that Mr C started to pay CL the alleged Monthly Payments as early as from mid 1992, and in any event, there was no sufficient documentary evidence as to the amounts or frequency thereof prior to January 2008. Further, even if there were the alleged Monthly Payments, there was no sufficient evidence that they were made by Mr C for the purpose of making substantial contributions towards CL’s household expenses/maintenance/financial provision for her reasonable needs. All along, CL had herself told SSM that the additional payments from Mr C were for her work for Perm and/or other companies in the WK Group. Whether Mr C did say to CL or not that he would take care of her and/or he would treat her very well, I do not find those utterances would mean that the alleged Monthly Payments were for substantial contributions for CL’s household expenses/maintenance/ financial provision for her reasonable needs, or that by making those utterances, Mr C had assumed responsibility for CL’s household expenses/maintenance/financial provision for her reasonable needs.

E.5.5.2.2.  Other alleged Payments prior to Mr C’s 1^st Stroke

202.  Although CL’s evidence in her 1^st affirmation seemed to suggest that apart from the alleged Monthly Payments, there had been other payments and/or financial assistance for CL and her daughters (and to certain extent, her extended family) prior to the 1^st Stroke, there was no sufficient evidence provided by her as to what other payments had been made to her.

203.  I further find CL’s explanation as to why she decided against accepting Mr C’s offer for financial assistance, namely it would make her become “someone cheap” in his mind, and instead to file for bankruptcy did not make sense. Further as it was CL’s own evidence that the approximately HKD 1m of her debts was not a significant amount to Mr C but it was “crippling” for her[120], there was no reason why CL could not even have asked Mr C for a loan to pay off her debts, rather than filing for bankruptcy. On CL’s own evidence, and on the SSM’s evidence, Mr C was a generous man and Mr C had helped Ringo by lending him a sum of HKD 2m. There was also no reason why Mr C would not have insisted on paying off CL’s debts to her if he had indeed assumed responsibility for CL’s maintenance, and the “crippling” debts were incurred by CL in meeting her cost of bringing up her two daughters, providing for the care of her aging parents and helping her brother due to his failing business.    

204.  Further, instead of seeking assistance from Mr C, according to CL, it was Ringo who had assisted her in obtaining two supplementary credit cards on his account for her daughters to use during the period she was bankrupt.  

205.  CL had also mentioned she was provided with the use of a car by Mr C through Perm since 2003 but there was no sufficient evidence that by this Mr C had assumed responsibility for CL’s maintenance or reasonable needs. All in all, I do not find sufficient evidence that Mr C had made any other payments to CL, as alleged by CL, prior to his 1^st Stroke in September 2004 or that he had assumed responsibility for CL’s household/expenses/maintenance/financial provision towards her reasonable needs in any way.

E.5.5.2.3.  The purchase of the Happy Valley Apartment

206.  As said, according to SSM, Mr C was a very generous person, and had made a loan to a university friend of over HKD 10m and that he had also helped an another friend, and that Mr C had also provided properties to various persons to live in. SSM gave examples, such as after his 1^st Stroke, Mr C’s physiotherapist in Beijing followed him back to Hong Kong and Mr C had provided him with a property to live in, and that Mr C had also provided a property for Madam Tam to live in, and also for Mrs C’s mother (SSM’s maternal grandmother) to live in, for Madam Ching and her children, and also for CL.

207.  It was also the evidence of JSH during the trial Mr C purchased the Happy Valley Apartment for CL as he was generous towards a loyal employee and that he would want her to have a more comfortable life. JSH had also mentioned that this was unsurprising within their social circles as many bosses would buy flats for their employees, and that her mother in law had also bought a flat for each of her two personal assistants.

208.  LPMC’s evidence was also it was not surprising for Mr C to purchase a property for a loyal long term employee.

209.  The fact that the purchase of the Happy Valley Apartment took place not long after Mr C returned from Beijing would accord with the evidence of SSM, JSH and LPMC that it could be no more than a generous gesture on part of Mr C to show his appreciation and/or gratitude towards a long time personal secretary/assistant who had assisted him and his family while he was receiving medical treatment in Beijing.

210.  As said, the Happy Valley Property was purchased in the name of SG Ltd, the shareholders of which, were initially CL’s two daughters, and it was purchased with a mortgage loan from Bank of Communications on 27 June 2005. In fact on 24 June 2005 Mr C had also refinanced the Lippo Property with a mortgage loan from the Bank of Communication.

211.  I have found earlier that it was only by early 2008 that Mr C had become emotionally dependent on and closely attached to C. As said, Mr C had only returned from Beijing in early 2005. Having considered all the evidence, in my view, it is more probable than not that the Happy Valley Apartment was purchased by Mr C for CL to show his appreciation for CL’s loyalty and long time service. I find there was no sufficient evidence that the Happy Valley Apartment was purchased for CL by reason of any close loving or affectionate relationship between Mr C and CL at that time, nor was there sufficient evidence that it was purchased for the purpose of making a substantial contribution towards CL’s maintenance or for her reasonable needs. As said, there was no evidence of what her reasonable needs were at the time. In any event, there was no sufficient evidence that by such purchase, and by paying for the monthly mortgage repayments, Mr C was assuming responsibility for CL’s maintenance or financial provision for her reasonable needs.

E.5.5.2.4.  The alleged Annual Payments

212.  As seen earlier, CL’s evidence about the alleged Annual Payments was confusing and that it was not at all clear as to how the Annual Payments for 2007, 2008 and 2009 were paid. In fact, under cross examination, CL had eventually said that the Annual Payment for 2010 was also paid. The Agreement alleged by CL was around the time of the 1^st Codicil, namely in September 2006, but there was no evidence of the alleged Annual Payments whether in 2006 or in 2007. As mentioned earlier, the only payment in 2007 as seen in Part II of the Revised Table of Cheques was one cheque for HKD 160,000 on 20 November 2007. As for 2008, there were 7 cheque payments totaling HKD 1,250,000. However, according to CL’s evidence, in 2008, there were also the payments for her mother’s columbarium of HKD 350,000, 95% for her tooth implant of HKD 427,500 and some HKD 200,000 for her birthday and Christmas presents, totaling HKD 977,500. This would mean the Annual Payment of HKD 500,000 for 2008 could not have been included in those 7 cheques for 2008. I accept that for 2009, there were 7 cheque payments of a total of HKD 960,000, and for 2010, there were 6 cheque payments of a total of HKD 800,000 (without counting the cheque dated 25 January 2010 for HKD 149,760 said to be a Cartier watch for CL’s birthday present). However, it was never CL’s written evidence that the Annual Payments were made up of part payments spread over the year. This also did not make sense, as it was CL’s evidence that the reason why she entered into the alleged Agreement with Mr C was because she wanted to be paid the Annual Payments during his lifetime rather than after his death and Mr C could well afford to pay the sum of HKD 500,000 by way of a lump sum and in advance every year after the Agreement was made. CL’s evidence regarding the Annual Payments and the alleged Agreement was clearly unsatisfactory.

213.  Having considered CL’s evidence and the cheque payments in the Revised Table of Cheques, I find no sufficient evidence that any of those cheques listed in Part II thereof had formed part of the alleged Annual Payments paid pursuant to the alleged Agreement. I also find no sufficient evidence of the alleged Agreement.

214.  As set out above and in the Revised Table of Cheques, there were various cheques issued by Mr C deposited into CL’s savings account. The purposes of those cheques were unknown. It was put to CL that one of those payments in 2009 was in fact a reimbursement by Mr C to CL for asking her to withdraw cash of HKD 100,000 to be given as laisees for JSH’s wedding as Mr C had forgotten to make arrangements for such cash. It was in fact suggested to CL that some of those cheque payments were for reimbursements for advances made by CL on behalf of Mr C. This was denied by CL. Although there was no sufficient evidence to support this allegation on the part of the Estate, there was also no sufficient evidence that they were gifts to CL, but even if they were, in my view they were one off payments. There was no sufficient evidence that those payments were made as a substantial contribution for CL’s maintenance or towards her reasonable needs and/or by making those payments, Mr C had assumed responsibility for CL’s maintenance/financial provision for her reasonable needs.

E.5.5.2.5.  Other alleged payments after Mr C’s 1^st Stroke

215.  One other payment mentioned by CL was a sum of HKD 5m given to her by Mr C which according to CL, Mr C had told her the sum was for temporary financial relief for the period after he passed away and before probate of his estate could be granted, and CL’s initial evidence in her 1^st affirmation was that this was paid in about 2009[121]. Later, in her 9^th affirmation, she had produced copy of a cheque from Mr C in the sum of HKD 5m dated 19 March 2010 which indicated the sum was in fact paid on 19 March 2010, and that it was then placed directly on a fixed deposit by CL[122].

216.  What was not disputed was that the Shek O House was sold by Mr C in early 2010 and that he had made about HKD 100m in profit. It was put to CL that the sum was given to CL because Mr C was happy with the profit he made and that he did not say it was for CL’s interim support before probate. This was denied by CL.  

217.  However, CL’s evidence as to why Mr C gave her this sum was again not consistent with her case of the alleged Agreement in that her case was she and Mr C agreed that he was to give her the Annual Payments of HKD 500,000 during his lifetime, instead of HKD 50,000 per month after his death, as his financial provision for Madam Ching. There was no evidence as to why CL would need HKD 5m for her interim support pending the grant of probate. There was also no evidence as to why Mr C should be contemplating death and probate matters when he was happy and had just made a profit of HKD 100m. I find that there was no sufficient evidence that the sum was paid to CL for temporary financial relief pending probate of his estate. It was clearly no more than a one off gift and was probably paid because Mr C was happy with his profit.

E.5.5.2.6.  Whether CL was being maintained, either wholly or substantially, by Mr C immediately before his death

218.  To summarise, my findings included the following:

(1)  there was no sufficient, evidence that the alleged Monthly Payments, if any, had commenced in mid 1992 and in any event, that they were paid, other than for full valuable coincidence, for the purpose of CL’s maintenance or financial provision towards her reasonable needs;

(2)  there was no sufficient evidence that the purchase of the Happy Valley Apartment and the mortgage repayments thereof were for the purpose of providing for CL’s maintenance or financial provision towards her reasonable needs;

(3)  there was no sufficient evidence that the alleged Agreement had existed, nor was there any sufficient evidence that there were any Annual Payments paid by Mr C to CL pursuant to the alleged Agreement;

(4)  any other payments set out in Part II of the Revised Table of Cheques were one off payments whether as gifts or otherwise, and there was no sufficient evidence that they were made towards CL’s maintenance or for her reasonable needs;

(5)  there was no sufficient evidence that the sum of HKD 5m was for CL’s temporary financial relief pending the grant of probate and it was no more than a one off gift.

(6)  There was no sufficient evidence that by making those payments set out in the Revised Table of Cheques before his 2^nd Stroke. Mr C had assumed responsibility for CL’s maintenance

219.  In light of all said above, CL had not been able to satisfy this Court that prior to Mr C’s 2^nd Stroke, she was being wholly or substantially maintained by Mr C and/or that Mr C was, otherwise than for full valuable consideration, making a substantial contribution in money or money’s worth towards her reasonable needs, and/or that Mr C had assumed responsibility for her maintenance or financial provision. Even though I have found earlier that Mr C had by early 2008 become emotionally dependant and closely attached to CL, I do not find that by those cheque payments in Part I and Part II in the Revised Table of Cheques, there was any settled basis or general arrangement between CL and Mr C as regards CL’s maintenance prior to his 2^nd Stroke. As found earlier, shortly after the 2^nd Stroke, CL had abandoned Mr C and their relationship was brought to an end. There was no settled basis or arrangement for the maintenance of CL immediately before Mr C’s death. Whatever payments made by the Committee were not made for the purpose of providing for CL’s maintenance and in any event, they ceased after September 2013. As for the mortgage loan repayments on the Happy Valley Apartment, SSM’s explanation was that they were continued to be paid by the Committee until the loan matured in July 2015 as Mr C had provided a personal guarantee for the loan. There being no contrary evidence, I accept SSM’s explanation.

E.5.6.  Conclusion on Issue 1

220.  In light of all my findings set out, CL has not been able to discharge the burden on her to satisfy this Court she had/has the locus to make a claim under section 3(1)(ix) of Cap 481. In my view, her claim must fail.

221.  I will continue consider the other issues, in the event that CL did have the locus to make a claim under section 3(1)(ix) of Cap 481. I will start with Issue 3, followed by Issue 6, Issue 2, Issue 4 and Issue 5.

F.  ISSUE 3 – WHO HAS THE BENEFICIAL OWNERSHIP OF THE CITY GARDEN APARTMENT AND/OR ITS HOLDING COMPANIES

F.1  The companies Abbeylands and JVML

222.  Abbeylands was a BVI company which appeared to have been held by a nominee on behalf of the original family trust as early as 5 August 1987. On 4 January 2007, the two directors were Mr C and SSM[123]. CL was appointed as a director on 26 September 2008[124]. On 2 October 2008, it was resolved by the two directors Mr C and SSM that 9,999 shares were transferred into the name of JVML and 1 share to Mr C’s personal name[125]. After Mr C’s 2^nd Stroke, on 26 May 2011, CL ceased to be a director and on that day, JSH was appointed as a director, and later on 11 July 2013, FSH was also appointed as a director[126]. On 11 July 2013, both the shares held in the name of JVML and in Mr C’s name were transferred to the name of SSM[127].

223.  From the evidence, it would appear that Abbeylands was simply a company selected by Mr C from among his various personal companies for the purpose of acquiring the City Garden Apartment.

224.  JVML is a Liberian company and appeared to have been acquired by Mr C on about 22 July 2008. Mr C had arranged for 1 share of JVML to be transferred to ASC on 22 July 2008 and 1 share to HSH on 2 October 2008, namely for them to become equal owners of JVML each holding 1 share of USD 1.00 each.

225.  On 22 July 2008, there were 3 directors of JVML, namely Mr C, SSM and LPMC. Later, on 26 September 2008, CL was appointed as a director[128]. On 2 October 2008, SSM and LPMC ceased to be directors, and on the same day, namely 2 October 2008, 9,999 shares of Abbeylands were transferred to JVML, with the remaining share held by Mr C.

226.  Then on 28 November 2008, Mr C arranged for the JVML shares held by HSH and ASC to be converted into 2 bearer shares[129]. Subsequently, on 11 July 2013, the 2 shares in JVML were transferred into the name of SSM who executed a declaration of trust holding the 2 shares in trust for Mr C. On the same day, Mr C ceased to be a director and SSM was appointed as a director. On 8 August 2013, CL ceased to be a director. On 14 January FSH was appointed as a director[130].

F.2  The acquisition of the City Garden Apartment

227.  The Provisional Sale and Purchase Agreement dated 19 September 2008 for the purchase of the City Garden Apartment at a consideration of HKD 7,900,000 (pt) was entered into initially in the name of Madam Ching for and on behalf of Abbeylands as purchaser[131].

228.  On 3 October 2008, the Formal Sale and Purchase Agreement for the City Garden Apartment was signed by CL as a director of Abbeylands[132]. As at that date, Abbeylands was held as to 9,999 shares by JVML and 1 share by Mr C. JVML was held equally by ASC and HSH of 1 share each.

229.  On 28 November 2008, the Assignment for the City Garden Apartment was signed by Mr C himself as a director of Abbeylands. On same day, the two shares held by ASC and HSH were converted into 2 bearer shares. There was a Legal Charge entered into by Abbeylands in favour of Wing Hang Bank, which was subsequently discharged on 8 October 2014 by the Committee.

F.3  The Estate’s case

230.  The Estate’s case was that Mr C had no beneficial interests in JVML, and Abbeylands or the underlying City Garden Apartment was/is held on trust for ASC and her elder brother HSH since date of purchase.

231.  SSM’s evidence was that her father was open with her mother and SSM and her siblings about his relationship with Madam Ching, HSH and ASC after such was found out by Mrs C in about 1993. SSM had confirmed the evidence of ASC that she and HSH had stayed in their father’s home with Mrs C. SSM also confirmed that her father had discussed with her his intentions to send HSH and ASC to schools in the UK, and that after her father became incapacitated, SSM had personally attended to taking her half siblings to their schools in the UK. It was clear from SSM’s evidence and also HSH’s and ASC’s evidence that notwithstanding being half siblings, they have always had a good relationship and that HSH and ASC have been accepted as members of Mr C’s family.

232.  According to SSM, prior to the purchase of the City Garden Apartment, HSH and ASC had lived with Madam Ching at a property bought by Mr C for Madam Ching, which SSM recalled was a house at Redhill Peninsula. However, Madam Ching later sold the property to pay her debts and thereafter, they had resided in other rented apartments. Madam Ching later broke up with Mr C and had married another man, but the marriage did not go well. Therefore, in 2008, Mr C arranged for the purchase of the City Garden Apartment for HSH (when he was about 19 years old) and ASC (when she was about 16 years old) as a gift, and to ensure they had a place to live. According to SSM, Mr C had initially wanted JVML to be jointly owned by HSH and ASC and therefore one share in JVML was issued to each of them on 22 July 2008 and 2 October 2008 respectively.

233.  According to SSM, she had spoken to her father about the purchase of the City Garden Apartment and her father had told her that the City Garden Apartment was purchased for HSH and ASC, and that during the conversation with her father, SSM had expressed her concern over the risks that could arise as HSH and ASC were then both very young, being 19 and 16 respectively and that Madam Ching had mismanaged her finances before. According to SSM’s recollection, Mr C told her that a simple solution to address her concern would be for him to convert the shares of the holding company into bearer shares for him to hold on their behalf first, and then transferred the same to ASC and HSH when they were older[133].

234.  Although SSM said her father did not discuss with her further, she later learnt that on 28 November 2008, the same day when the Assignment was to be entered into, Mr C did follow up on what he told SSM and arranged for the JVML shares to be converted into 2 bearer shares, and that according to SSM’s understanding with the benefit of a fuller picture supported by contemporaneous documents, Mr C held the 2 bearer shares or the legal title of the City Garden Apartment in trust for HSH and ASC and to transfer the legal title to HSH and ASC when they became responsible adults[134].

235.  Although SSM arranged for the 2 bearer shares to be transferred to her, SSM had explained this was pursuant to the Committee’s decision after Mr C became incapacitated and upon her then wrong understanding. SSM clarified and confirmed that those shares should have been held on trust for ASC and HSH in continuation of the earlier arrangements.

F.4  ASC’s case

236.  According to ASC, the romantic relationship between her mother Madam Ching and Mr C ended around 1994 when she was around 2 years old. Her mother later married Mr Chong but they divorced in around 2000. Madam Ching had 2 daughters by Mr Chong in 1995 and 1996.

237.  It was ASC’s evidence that her mother had always been a full-time housewife and had not worked even before her brother HSH was born, and that they were fully reliant on Mr C’s support financially, and that Mr C’s monthly financial support had continued even after his relationship with her mother had ended. Although, after the divorce, Mr Chong had paid Madam Ching maintenance in respect of their two daughters of approximately HKD 10,000 to HKD 20,000 per month, this amount was not enough to support their entire family. According to ASC, Mr Chong stopped paying any maintenance to Madam Ching after their two daughters went to study overseas in 2013 and 2014.

238.  Further according to ASC, prior to his 2^nd Stroke, Madam Ching was receiving a monthly allowance of HKD 50,000 from Mr C, which was subsequently increased to HKD 65,000 when Madam Ching was diagnosed with cancer and the payments had continued to be paid by the Committee until Madam Ching passed away in 2018. In addition to the monthly allowance, Mr C had paid for the school fees and related expenses for ASC and HSH including such fees when they studied abroad in UK. Mr C had also provided ASC with GBP 400 per month as monthly allowance and she would get extra allowance and that the Committee had continued to make financial provision for her until she graduated in 2014.

239.  ASC had said that although she did not live with her father during school days, she and her brother had stayed at their father’s home every weekend during their childhood except when he was out of Hong Kong for business trips from time to time. Her evidence was that Mr C was a responsible father and that he had personally made arrangements for HSH and ASC to study in the UK, like all her half siblings. ASC went to a boarding school in UK when she was 13 years old and thereafter she spent less time in Hong Kong as she only came back to Hong Kong for summer and Christmas holidays. Although ASC did not use to have regular contact with Mrs C and her children or close interactions with them as her half-siblings were many years older than she, she respected them and that they were kind to her mother and brother. After Mr C had his 2^nd Stroke, SSM was entrusted by Mr C to assume the role of taking care of Madam Ching, ASC and HSH and according to ASC, she and SSM would meet 2 to 3 times each year.

240.  ASC confirmed that Mr C had bought Madam Ching a house at Redhill Peninsula as her family home, but Madam Ching sold it in 1996 and thereafter, the family started renting, and that they had to move house every few years. As Madam Ching grew older, and HSH and ASC became very tired of moving house every few years, Madam Ching discussed the matter with Mr C and in 2008, Mr C purchased for them the City Garden Apartment. It was ASC’s recollection that her mother had borrowed from her friend to pay for the preliminary deposit which later Mr C paid Madam Ching. Madam Ching, HSH and ASC had lived in the City Garden Apartment since its purchase in 2008, and that at the time of the Trial, HSH was still living there.

241.  It was ASC’s evidence that her mother told her that originally Mr C wanted to buy an apartment for each of HSH and ASC when they reached 18 years old so that they would have security in terms of accommodation, but after discussion with her mother, Mr C agreed to buy a larger apartment for all of them to live together as their family home. On one occasion, in winter of 2008 or summer of 2009, when HSH and ASC had dinner with their father when they returned to Hong Kong from UK for the holidays, their father had told them the City Garden Apartment was theirs and that he assured them that they should not worry about legal formalities which would be completed in due course for the transfer of the property to the names of HSH and ASC and that the property was purchased for them.

242.  ASC was only around 16 years old in around 2008, and she could not really recall the circumstances surrounding the purchase or matters relating to the companies, and that to the best of her recollection, in around late 2008, she went to her father’s office for lunch and that CL was also there. After lunch, her father told her to sign some papers relating to the City Garden Apartment, and she trusted her father. It was ASC’s evidence that the property was not purchased in her mother’s name to be held on trust for HSH and her as their father did not have confidence in their mother’s financial management, in light of the fact that she had to sell the house at Redhill Peninsula in 1996 to pay off her debts.

243.  ASC said she only turned 18 years old a few months before Mr C had his 2^nd Stroke. When she visited her father in 2012, SSM had asked her whether she would like the property to be formally transferred to her and her brother’s name as their father had said that the property was gifted to her and her brother. However, if the property was transferred to their names, they would need to be wholly responsible for all expenses, but as she was still studying, she was not ready for the property to be held in her name together with HSH, but it was always their understanding that it was purchased by their father as a gift for them. ASC moved out of the City Garden Apartment in 2017 and she is now living with her husband in a rented property. HSH’s salary was lower than hers and he was working as a waiting staff.

244.  HSH is ASC’s older brother. He went to UK to study when he was 16 years old but did not graduate from university and he returned to HK in 2009. As he did not do particularly well academically, his father was concerned about his career. After his return to HK, he did various internships arranged by his father and although he had studied Hospitality Management at one of the universities here, he did not complete the course. He took up various jobs between 2010 and 2012 but was unemployed between 2012-2015, and since around 2015, he had been working as a waiting staff at various restaurants.

245.  HSH confirmed his sister’s evidence that his father originally planned to buy him and his sister each an apartment but later after further discussion between his mother and Mr C, they decided instead that Mr C would buy a larger apartment for Madam Ching, HSH and ASC. HSH confirmed that it was his mother who chose the City Garden Apartment and that his mother had asked a friend to help her pay for the initial deposit, which Mr C later repaid. Since then, they had moved into the apartment, and never had to pay any rent or management fees for the apartment. After his mother passed away in 2018, HSH said he had been living there with one of his younger half sisters (the daughter of Mr Chong and Madam Ching).

246.  HSH’s evidence was consistent with that of ASC’s. He also confirmed he was present during the dinner gathering with their father in Wanchai in around 2008 or 2009 when their father had assured them that they should not worry about legal formalities and that the apartment would be transferred to his and his sister’s names after both of them turned 18 when they would be employed and had stable income to settle the related expenses. HSH had also said he would meet his father at least once a week before his father’s 2^nd Stroke and during the time they met, his father would from time to time referred to the apartment being his and his sister’s.

F.5  CL’s case

247.  CL’s case was that the Estate’s case was inconsistent in that (1) the minutes of the Committee meeting showed that Mr C had “planned ” to give the City Garden Apartment to HSH and ASC and that at most it was an unfulfilled gift, and it was not an intention to hold on trust; and that the full value of the City Garden Apartment was reflected in the Committee Accounts as being beneficially owned by Mr C, and that such state of affairs continued even after the present proceedings began and in the Estate’s 1^st Form E in 2019; (2) Estate’s position only changed after SSM contacted ASC and funded her with HKD 1m for her to intervene in the present proceedings, and after ASC’s joinder, in the Estate’s 2^nd Form E in 2022, the property was then said to be a trust.

F.6  Discussion and Conclusion on Issue 3

248.  The fact was the Committee was appointed in November 2012, by which time Mr C was not in any position to explain to the Committee in relation to any matters concerning the purchase of the City Garden Apartment. One could only try to ascertain his intention from the evidence. I do not find that there was sufficient evidence that there had been a deliberate change of case on part of SSM with the intention or removing the City Garden Apartment from the assets of the Estate.

249.  SSM had in her 7^th affirmation explained that although she had arranged for the two bearer shares of JVML to be transferred into her name and she had executed declarations of trusts of those shares in favour of Mr C, subsequently recalling her conversation with her father and with the benefit of a fuller picture supported by contemporaneous documents in relation to the acquisition of the City Garden Apartment , her earlier understanding that her father only “planned” to gift those shares to HSH and ASC in future was inaccurate. She clarified that Mr C was in fact holding the two bearer shares in trust for HSH and ASC all along and that Mr C had intended to transfer the legal title to the shares of the companies to HSH and ASH after both of them became responsible adults[135].

250.  HSH admitted that he did not know much about the law or the difference between legal title and beneficial interest and that at the time his father promised to buy a property for him and his younger sister and he was very clear that the City Garden Apartment was purchased for them by their father, and no one else had any interest. He had said if he did not have the City Garden Apartment, he could not live at all as his salary was not high. He had also said that rates and management charges had been taken care of by SSM as trustee. According to HSH, CL being a close personal assistant of Mr C was responsible for following up on matters concerning their family and often it was CL who conveyed to them messages such as when they needed to sign documents relating to the property, and that it was HSH’s evidence that CL was fully aware of Mr C’s intentions that the property was held on trust for him and his sister ASC and that the property was purchased by Mr C for them.

251.  ASC disclosed during the trial that in the second half of 2021, when she was having a meal with SSM, SSM told her about the present litigation and that the Estate had included City Garden Apartment and that if the Estate were to lose in these proceedings, City Garden Apartment might have to be liquidated, and that the Estate could not transfer to ASC and HSH the property pursuant to what their father had wanted to do before he died. As a result, ASC said she then sought legal advice with her own funds, and that she had explained to her lawyers that the property was held in trust for them. ASC said she had limited savings only having just started to work only a few years earlier and HSH had applied for legal aid twice but was rejected, as City Garden Apartment was counted as their assets. In the end, she called SSM and asked SSM for HKD 1 million for litigation funding, and that up to the Trial, she had paid HKD 300,000 from her own pocket, and what she had spent already exceeded HKD 1m, and that if she were to lose, she had to pay CL’s costs out of her own salary.

252.  ASC also explained that all along, she and HSH trusted the SSM and her side of the family. ASC said she had also discussed with her own lawyer and that her lawyer knew that she had no money, and it was only in early 2022 she telephoned to ask SSM whether she could help and when SSM agreed, ASC then applied to intervene. ASC also disclosed that prior to her approaching SSM to help, in 2021, she had telephoned CL whom she knew since she was small, and also CL was present when Mr C asked ASC to sign the documents relating to the City Garden Apartment. ASC said she had asked CL whether CL would agree to give the City Garden Apartment to her and HSH if CL were to win in this litigation, but CL told her she herself had no more money and she could not agree to this. This led to ASC to decide to intervene in these proceedings.

253.  JSH’s evidence was that she was never involved in her father’s personal financial matters and that all along she only knew that her father had bought a property for ASC and HSH to live in and ASC and HSH had lived in the property for many years, and that JSH thought it was their property. She said she would not have agreed that the property should be included as part of their father’s assets.

254.  It was submitted on behalf of CL that FSH’s evidence and LPMC’s evidence only showed that Mr C was “planning” to give the City Garden Apartment to HSH and ASC, which meant it was to be a future gift, and that LPMC’s response when asked whether he knew that the companies were held by two bearer shares was that Mr C still “held the key to everything in his pocket” or words to that effect which meant Mr C was still holding the beneficial interest of the City Garden Apartment. However, neither FSH and LPMC had any personal/direct knowledge about Mr C’s intentions in relation to the City Garden Apartment and their evidence about Mr C “planning” to give the City Garden Apartment to HSH and ASC came from only what was said by SSM during the 6^th Committee meeting in the MH Proceedings[136].

255.  There was no sufficient evidence to contradict what ASC and HSH had said. There was also no sufficient evidence to contradict their evidence that their mother was poor in financial management, and that she had sold the Redhill house which Mr C had bought for her and thereafter, there had been no stable home for ASC and HSH. The fact that it was Madam Ching who signed the Preliminary Sale and Purchase Agreement on behalf of Abbeylands and paid for the preliminary deposit (with the help of her friend) supported the case of ASC and HSH that it was their mother who selected the City Garden Apartment for them. The fact that when JVML was first set up, ASC and HSH were registered as the only two shareholders further supported their case that the shares, and the property, were beneficially theirs. There was no evidence of anything which had taken place between the signing of the Formal Sale and Purchase Agreement and the signing of the Assignment which would have made Mr C to deprive ASC and HSH of their beneficial interest. It was also not disputed that at that time ASC was only 16 years old and a minor, and thus it would not be surprising for Mr C to decide to make a different arrangement, namely for those shares held by ASC and HSH to be transferred into bearer shares held by him in trust for them until they became responsible adults. Further, had it been Mr C’s intention to indeed take back those shares registered in the names of ASC and HSH, he could have simply transferred them into his personal name, since he already held 1 share in Abbeylands in his personal name anyway.

256.  Even though ASC’s litigation funding had come from SSM, there was no sufficient evidence that they made up a story to deprive CL of the availability of the City Garden Apartment for CL’s financial provision. I also find SSM a credible witness and that she made a mistake in including the City Garden Apartment as part of the Estate. Having considered all the evidence, I am satisfied that it was Mr C’s intention for the shares of JVML and its underlying asset, namely the City Garden Apartment to be beneficially owned by HSH and ASC upon purchase of the property and that it was his intention to hold the legal title of the property (through the bearer shares) as trustee for HSH and ASC until they became of responsible age. I therefore find that the shareholding in JCML and Abbeylands and/or the underlying asset, ie the City Garden Apartment, should not be included as part of the Estate, as they belong beneficially to ASC and HSH. The valuation of the City Garden Apartment was HKD 16.96m as at 30 August 2022.

G.  ISSUE 6 – WHETHER THE DISPOSITIONS MADE BY THE EXECUTRICES WERE MADE WITH THE INTENTION TO DEFEAT CL’S CAP 481 APPLICATION

257.  The Executrices had objected to Issue 6 being included.

258.  As pointed out on behalf of the Executrices, the allegation of dispositions being made to defeat CL’s claim was first raised in the s12 Summons, which had been withdrawn.

259.  In any event, what was clear from CL’s 10 affirmation filed in support of the s12 Summons, the s12 Summons was in relation to the dispositions which were made by the Committee. The Committee consisted of 5 members, and only two of them are the Executrices. At the PTR hearing, the s12 Summons had not served on the rest of the Committee members, nor was notice given to them, nor were they joined. Further, as any order made under section 12 of Cap 481 would be against the donee/s (so defined/referred to in section 12) of the dispositions, it had not been set out clearly in the s12 Summons nor in CL’s 10^th affirmation as to who the alleged donee/s were. In fact, no donee/s had been served with the s12 Summons, nor were any notice given to any purported donee/s prior to the PTR hearing.  

260.  Section 12(1) of Cap 481 provides that for this Court to make any order under that section, this Court has to be satisfied on 3 conditions, namely that:

(1)  the dispositions were made with the intention of defeating CL’s claim for financial provision under Cap 481, and

(2)  full valuable consideration for the dispositions was not given by the donee/s; and

(3)  the exercise of the powers conferred by section 12 would facilitate the making of financial provision for the applicant under Cap 481

261.  The Lippo Property was sold for full valuable consideration on 17 March 2014 (not on 15 April 2014 as wrongly stated in CL’s 10^th affirmation[137]) and SSM’s 7^th affirmation indicated that the net sale proceeds[138] plus the liquidation of Perm’s stock portfolios totaling a sum of HKD70m was made available to meet Mr C’s needs and that this improved the cash position of the Committee account from a deficit of HKD21.8m to a positive HKD 44.6 m by 27 April 2014[139]. As seen in the Committee’s Statement of Accounts as at 31 March 2014[140], there was a sum of HKD70,419,037.30 in the Committee’s Bank Account at Wing Hang Bank. It would appear that the total assets value of Mr C’s as at 31 March 2014 of HKD 83,361,205.92 had included the net sale proceeds of Lippo Property, which was then “reduced” to a total assets value of HKD 60,356,026.95 as at 20 July 2016[141].

262.  This meant the total reduction would be only HKD 23,006,178.97, and not HKD 76,005,178.97 as stated in the s12 Summons. The Committee had set out the various expenses incurred by and on behalf of and for the benefit of Mr C in their Statement of Accounts in the MH Proceedings. There was no sufficient evidence in CL’s 10^th affirmation to support condition (i), that the “reductions” were with intention of defeating her claim for financial provision. In any event, it was further not clear how condition (ii) was satisfied, namely that full valuable consideration for the dispositions was not given by the donee/s, without her even identifying clearly the donee/s.

263.  At the PTR hearing before this Court on 19 July 2022, this Court had pointed out some of the above observations. Thereafter on 31 August 2022, by consent, CL’s s12 Summons was withdrawn with costs to be paid by CL to both 1^st and 2^nd respondents, namely the Executrices and ASC[142].

264.  In fact, paragraphs 76-97 and paragraph 108 of A’s Closing Submissions consisted of those repeated complaints against the Committee, but the Committee was never a party in the present proceedings.

265.  It was also pointed out in paragraph 107 of A’s Closing Submissions that the value of Mr C’s assets was some HKD 375.5 m at the date of the 2^nd Codicil (7 July 2009)[143]. However, this had included the Shek O House which was sold by Mr C personally around 23 February 2010 at about HKD 480m[144], more than 6 years before he died, and the evidence was that the net sale proceeds had been paid by Mr C into the one or more of the companies in the WK Group to offset Mr C’s shareholder’s loans therefrom.

266.  There was no sufficient evidence of any dissipation.  

267.  As pointed out by Mr Man, which I agree, Issue 6 must be a “complete non-starter”. I find CL’s case on Issue 6 was misconceived.

H.  ISSUE 2 – WHAT IS THE SIZE OF THE ESTATE

268.  “Net estate” is defined in the Ordinance as follows:

“net estate (淨遺產) in relation to a deceased person, means—

(a) all property of which the deceased had power to dispose by his will (otherwise than by virtue of a special power of appointment) less the amount of his funeral, testamentary and administration expenses, debts and liabilities, including estate duty (if any);

(b) any property in respect of which the deceased held a general power of appointment (not being a power exercisable by will) which has not been exercised;

(c) any sum of money or other property which is treated for the purposes of this Ordinance as part of the net estate of the deceased by virtue of section 10;

(d) any property which is treated for the purposes of this Ordinance as part of the net estate of the deceased by virtue of an order made under section 11;

(e) any sum of money or other property which is, by reason of a disposition or contract made by the deceased, ordered under section 12 or 13 to be provided for the purpose of the making of financial provision under this Ordinance;”

269.  “Property” is defined in the Ordinance as

“property (財產) includes any chose in action”

270.  According to a schedule of assets and liabilities of the Estate dated 29 September 2022, Mr C’s net assets were as follows:

As at date of 2nd Codicil (07.07.09)	As at date of death (29.07.16)	As or around 01.09.22
375,501,075.89	44,991,727.41	(964,763.41)

271.  The above amounts did not include the valuations of the shareholdings in JVMH and Abbeylands and/or the City Garden Apartment.

272.  The Closing Submissions for CL were rather confusing in that insofar as the Index was concerned, there appeared to be no submissions made on Issue 2, save under the sections on “General Overview” and “Background”[145].

273.  It was however the submissions on behalf of CL that:

(1)  there should be an “add-back” type reconciliation in the value of the Estate[146];

(2)  there were assets available to the greater Mr C’s family[147]

274.  As for the submissions on the “add back”, this appeared to be in respect of two areas, the first being the dissipations by the Committee of the value of Alliance[148], and allegations that after SSM knew about the 2^nd Codicil, she began to “strip its value”[149]. As said the figure which was sought to be added back as set out in the s12 Summons was some HKD 76m. As also said earlier, the s12 Summons had been withdrawn, and there was no sufficient evidence that any reduction in the value of the company Alliance or the Estate was HKD 76m, or that such reduction was due to any dissipation with the intention to defeat CL’s claim for financial provision. Further, there was no sufficient evidence of SSM “stripping” the value of Alliance, and again as set out earlier, according to the Committee, the net sale proceeds of the Lippo Property had been used to meet Mr C’s expenses. There was no sufficient evidence to contradict this. No grounds for “add-back” had been made out.

275.  The second area for “add back” appeared to be CL’s complaint that there had been a steady decline in the value of the Estate by the expenditure of legal fees, which should be added back[150]. On the legal fees, what was clear was there had been substantial legal costs incurred. In the Estate’s 1^st Form E, a figure of about HKD 5.5m was stated and in the 2^nd Form E, a figure of HKD 5.78m was stated. There was also litigation funding for CL said to be HKD 11.4m. There was another sum of about HKD 10m incurred in the MH Proceedings. By a letter of 6 December 2022, the Estate was asked to provide an amount and breakdown of the legal costs. There had been no information provided by the Estate at the time of their Closing Submissions. It was submitted on behalf of CL that those costs should be “added back” until the liability for those costs would be known.

276.  The liability for the various legal fees will depend on this Court’s order. In light of this Court’s finding that CL has no locus to make an application under Cap 481, no “add-back” in the net estate in relation to any legal fees would be necessary.

277.  In so far as the New Family Trust or the CG Trust was concerned, there was no sufficient evidence that the Estate had continued to be a beneficiary of the two trusts upon the death of Mr C.

278.  There were no other challenges to the figures provided by the Executrices for the net estate. I accept their figures and find the net estate to be a negative HKD 964,763.41.

I.  ISSUE 4 – WHAT IS A FAIR AND EQUITABLE AMOUNT OF MAINTENANCE TO BE PAID TO CL IF SHE DOES HAVE LOCUS TO MAKE THE APPLICATION

I.1  Closeness of relationship - section 5(6)

279.  To repeat, I have found earlier that the relationship between Mr C and CL did grow gradually closer after he returned by Beijing in early 2005 and that by early 2008 that Mr C had become emotionally dependent on and emotionally closely attached to CL. I have also found shortly after his 2^nd Stroke, in early 2011 such relationship was brought to an end by CL, and this could not have been said to be a long and settled close relationship, as CL tried to portray. By the date of Mr C’s death, the relationship between Mr C and CL had ceased for some 5 1/2 years.

I.2  CL’s financial resources and financial needs – section 5(1)(a)

280.  On financial resources, as seen in CL’s 2^nd Form E of 9 June 2022, she had net assets of around HKD 18.3m[151]. She appeared to have included both the value of the Happy Valley Apartment and the share value of SG Ltd. Anyway, CL’s assets consisted of the net value of the Happy Valley Apartment of (ie the HKD 26.36m as at 25 May 2022[152] less an outstanding mortgage loan of about HKD 6.3m as at 24 April 2018), cash at bank of about HKD 1.565m, a BMW car of then value of HKD 300,000, and her main liabilities at that time consisted of the mortgage loan and a loan of HKD 2.5m under the loan agreement dated 28 October 2018 with her son-in-law, ie FC’s husband.

281.  As for her financial needs, CL said she had moved out of the Happy Valley Apartment which had been rented out since 1 December 2018 for HKD 52,000 per month. According to CL, she moved out because her elder daughter had got herself into messy financial difficulties which caused loan sharks to make threats against CL, and as a result, CL moved to live in a rented place in Ho Man Tin. As seen in the annual return dated 18 April 2019, CL’s elder daughter transferred her one share to CL on 26 September 2018[153]. CL had set out in her 2^nd Form E monthly expenses of some HKD 170,000, of which some HKD 143,000 were towards her general expenses including her rent and management fees of a total of HKD 53,820 per month for her premises (including carpark) in Ho Man Tin and mortgage repayments on the Happy Valley Apartment of some HKD 44,000 per month. Her general expenses had included mortgage instalments and management fees of the Happy Valley Apartment and business registration fees of SG Ltd. These should be part of the expenses of SG Ltd as the rental income of the Happy Valley Apartment of HKD 52,000 per month was regarded as income of SG Ltd[154]. To summarise, CL’s general expenses (about HKD 94,025 less the expenses of SG Ltd) and personal expenses (HKD 26,650) are now claimed  to be about HKD 120,675 per month.

282.  As seen in the Interim Maintenance Judgment, CL initially in her 1^st Form E sought HKD 250,000 per month but by the time she filed her updated affirmation on 24 August 2020, her claim was reduced to about HKD 150,000 per month for interim support which included HKD 38,000 per month as litigation funding. In her then affirmation, it was CL’s case that she would move back to the Happy Valley Apartment in December 2020 and that her rent would be zero. On 15 July 2015, the mortgage loan from the Bank of Communications on the Happy Valley Apartment was paid off. However, CL claimed that she had no cash for her day to day expenses, she then obtained firstly a mortgage loan from Hang Seng Bank in March 2016 and then remortgaged the Happy Valley Apartment to obtain a loan from the Dah Sing Bank on 24 January 2017. The original loan amount was HKD 7m. Anyway, as seen in paragraph 31 of the Interim Maintenance Judgement, Judge Melloy had set out her reasons for making the 1^st Interim Order HKD 37,500 per month for the mortgage repayments, and a total of HKD 55,000 per month to cover CL’s interim financial support (being HKD 35,000 for general expenses and HKD 20,000 for personal expenses).

283.  The Executrices had been complying with the Interim Order since 20 October 2020.

284.  CL’s son-in-law, namely FC’s husband, comes from a well known wealthy family and had lent CL HKD 2.5m and bought her a new BMW as a present for CL’s 60^th birthday. As said, there was a loan agreement dated 28 October 2018 for the said HKD 2.5m.  Interest rate was stated to be 5.625% per annum and repayable within 3 calendar months from the date that the lender gives the borrower a written notice of payment[155]. However, up until the date of the trial, no notice had been served by her son-in-law. I agree with Mr Man that this appeared to be a “soft” loan.

285.  Having considered all the evidence, I agree with the observations made by Judge Melloy on CL’s claimed expenses and Judge Melloy’s reasons. I find CL’s reasonable financial needs as at the time of the Trial or in the foreseeable future should not be more than HKD 55,000 per month, with her accommodation needs being separately provided for.

I.3  Other matters under section 5 (1) of Cap 481

286.  There were no other applicants applying for an order under Cap 481. There was no information on the financial resources and financial needs which the other beneficiaries in the Estate had or likely to have in the foreseeable future, save what has been set out earlier in relation to HSH and ASC. Mr C no doubt had legal obligations and responsibilities in maintaining his wife Mrs C and his children (whilst they remained a minor, or receiving education or undergoing training for trade, profession or vocation). There was no evidence of any physical or mental disability of CL or any beneficiary of the Estate. CL was born in February 1961 and was 61 years old at the time of the Trial. There was no sufficient evidence of what earning capacity she had since her employment at WKSA was terminated or whether she had any at the time of the Trial. As said, the net estate now has a negative value.

287.  As for any other matters including conduct of the parties, as found earlier, it was CL who had abandoned her relationship with Mr C and brought it to an end shortly after Mr C’s 2^nd Stroke. This is a matter which in my view should be taken into consideration. Insofar as CL’s allegations against SSM of dissipation of assets and stripping off the value of the Estate, as said earlier, any decision made was that of the Committee. In any event, I have found there was no sufficient evidence of these allegations.

I.4  Exercise of discretion

288.  As found earlier, there was no settled basis or arrangement for CL’s maintenance. The relationship between C and Mr C was not a long term and close relationship prior to his 2^nd Stroke or immediately before his death. There was no evidence that Mr C had assumed responsibility to maintain CL for life or until her remarriage. In fact, notwithstanding the long and good relationship Mr C had with Madam Ching who was the mother of two of his children, his provision for her of HKD 50,000 per month during her life was subject to a provision that the total payment was not to exceed HKD 6m. It was CL’s own evidence that at the time of the 1^st Codicil, Mr C was intending to make a similar provision for her upon his death as he had made for Madam Ching by way of life interest, upon which CL then alleged that she and Mr C arrived at the Agreement. Thus, even on CL’s own evidence, at the time of the 1^st Codicil, apart from providing Happy Valley Apartment to CL to reside rent free, Mr C was only going to provide her with HKD 50,000 per month during her life but subject to a similar provision as for Madam Ching.

289.  As said, CL’s reasonable financial needs should not be more than HKD 55,000 per month with accommodation separately provided for. Having considered all the evidence and the section 5 matters and all the circumstances of this case, even if it is found that CL had/has locus to make her present claim and that Mr C had indeed assumed responsibility for CL’s maintenance immediately before his death, having considered the extent of the relationship, in my view, a reasonable amount for CL’s financial should not be more than HKD 55,000 per month subject to a maximum total amount of HKD 6,600,000, with accommodation separately provided for. Mr C’s intention in his 1^st Codicil that CL be given the Happy Valley Apartment free of mortgage upon his death had already been fulfilled by the Committee. CL’s accommodation had already been provided for separately.

J.  ISSUE 5 – WHETHER THE DECISIONS OF THE COMMITTEE CAN BE TAKEN TO REFLECT MR C’S OWN DECISION

290.  In the Index to A’s Closing Submission, under Issue 5, the reference was to “Acts of Committee”. What was being submitted on behalf of CL was that the decisions made by the Committee were acts of the Committee alone and could not be taken to reflect Mr C’s own decision.

291.  The Court had been referred by Mr Todd to the observations made by L Chan J in the Interim Decision in the MH Proceedings when he observed that after the Lippo Property was sold by WKEL for HKD 53m, the net proceeds were distributed as dividend to Perm and Perm then paid to Alliance the dividend together with the proceeds of some other investment and Alliance paid the same over to the Committee for defraying Mr C’s expenses and that it thus appeared that the value of the shares in Alliance given to SG Ltd in the 2^nd Codicil had “dwindled” substantially[156].

292.  The Court had also been referred by Mr Todd to what was observed by Anthony Chan J in his decision of 22 April 2015 concerning various interlocutory procedural applications in the MH Proceedings, in which he had observed that pursuant to the 2^nd Codicil, CL had the prospects or expectation of inheriting, inter alia, a commercial property of considerable value[157].

293.  What was observed above by both Louis Chan J and Anthony Chan J were obviously correct, in that it was not disputed that at the time of his 2^nd Codicil, Mr C’s intention was to bequeath to SG Ltd/CL his interests in the Lippo Property.

294.  However, even given the good intentions of any testator, there can be changes in the testator’s circumstances before his death particularly over a period of some 7 years and 5 months. It is not unheard of for a testator to change his mind before his death, about any testamentary bequests/provisions he had made, or the testator’s estate has diminished by the time of his death due to circumstances beyond his control.

295.  In the present case, the evidence was that according to the Committee, they had to resort to the net sale proceeds of Lippo Property to defray Mr C’s substantial expenses during the period between his 2^nd Stroke and his death. It was the evidence from the Estate that there were no other financial resources available to Mr C when the Committee made the decision to sell the Lippo Property. The evidence showed that the MH Judge was aware of the sale of the Lippo Property and Mr C’s expenses. There was no sufficient evidence that the net sale proceeds of the Lippo Property were not reflected in the Committee’s Statements of Accounts and the Committee Statements of Accounts had to be submitted to the MH Judge as provided in the order made by the MH Judge. As mentioned earlier, the s12 Summons had been withdrawn by CL, and there had been no claim against the Committee nor any finding of dissipation with intention to defeat CL’s claim.

296.  As submitted by Mr Man, appointing a committee to manage the finances of a mentally incapacitation person (MIP) is a way to give effect to the “wishes” or the MIP, and the mental health court could supervise the committee and ensure that its decisions were made in the MIP’s best interests. As seen in Re NLS (Mental Condition) [2021] 3 HKLRD 814, where there is disagreement, the court may ascertain the “notional wish and view of the MIP as if he had not lost his mental capacity in making the relevant decision, or if he could express his view at a snapshot moment”[158].

297.  There was no sufficient evidence that the acts and decisions made by the Committee on behalf of Mr C were not made in the best interests of Mr C. Further, in light of CL bringing to an end of her relationship with Mr C, and in light of his own medical requirements, had Mr C been able to make his wishes known, it would not have been surprising or improbable that he would wish to sell the Lippo Property, (which appeared to have been acquired for investment purposes and not for self use), and to realise the profits and/or to utilize the net sale proceeds for his personal benefit.  

K.  CONCLUSION AND ORDER

298.  In light of all said above, CL’s claim herein is dismissed. I order costs to be reserved and I will hear parties on costs and any consequential orders. I direct the parties to fix a hearing (30 minutes) for directions in this respect.