MA MEE KIU AND OTHERS v. CHAU CHUN YUEN

CACV 173/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 173 OF 2007

(ON APPEAL FROM HCA NO. 495 OF 2003)

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J U D G M E N T

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Hon. Lam J (giving the judgment of the court):

1.  By a judgment handed down on 4 May 2007, A Cheung J gave judgment for the Plaintiffs in the sum of $164,000 plus interest and gave judgment for the Defendant for the payment of his due share of income from the estate of Chau Chi (deceased) as from 4 April 2000 plus interest.  The 2^nd and 3^rd Plaintiffs appealed against that judgment[1].

2.  The 2^nd and 3^rd Plaintiffs and the Defendant are brothers.  The Defendant was the executor of the estate of their late father Chau Chi.  The main dispute between the parties is whether a so-called “buy-out” agreement made in 1990 (whereby the Defendant disposed of his interest in the estate) had been superseded by a “10-year agreement” in 1991 (whereby the Defendant only gave up his interest in the estate for a period of 10 years).  The plaintiffs denied the existence of the 10-year agreement and sought specific performance of the buy-out agreement.

3.  The facts have been fully set out in the careful and detailed judgment of the learned judge and it is not necessary to recite the same here.

4.  In the judgment, the learned judge found for the Defendant and held that the 10-year agreement had been made and the buy-out agreement had been discharged by the former.  In essence, it is a finding of facts.

5.  The Defendant testified on the making of the 10-years agreement.  His witness, the eldest sister, testified on the acknowledgment of the 10-year agreement by the 2^nd Plaintiff and Pak Leung, a witness to the making of that agreement who has since died.  The 2^nd Plaintiff, on the other hand, testified that he only promised that if the Defendant refrained from interfering with the tenancy affairs of the estate for 10 years, he would after the lapse of 10 years consider giving the Defendant something out of the income of the estate.  He emphasized it was a matter of his discretion.

6.  The learned judge was impressed by the evidence of the sister as illustrated by what he said at para.35 of the judgment,

“Of the oral evidence given by the witnesses, I find the sister’s evidence to be most impressive.  She is the eldest child of the deceased and the eldest sister of the brothers.  As such, she enjoys a degree of respect from all of them.  She is resident in the Mainland.  She used to teach at Jinan University in Guangzhou.  She retired in 1992.  She was confident and straightforward in the box.  No doubt she is highly intelligent  and possesses a very good memory --- some occasional lapses in her evidence notwithstanding.  She has no financial stake in the dispute.  She said in the box that she is unbiased, loves all her siblings and they all love her.  She had tried but failed to persuade the brothers to settle the case.  She agreed to give evidence for the defendant so as to tell the truth.  An additional reason was that she had promised Pak Leung in his dying bed … to help the Defendant …”.

7.  He also preferred the evidence of the Defendant to that of the 2^nd Plaintiff, see para.50 of the judgment.

8.  There is also documentary evidence which the learned judge referred to.  Though the contemporaneous documents do not fully support the Defendant’s case, the judge accepted the explanations of the Defendant on the discrepancies.

9.  In this appeal, the 2^nd and 3^rd Plaintiffs tried to challenge the factual findings of the court below.  They had an onerous burden.  The proper approach had been explained in full by the Court of Final Appeal in Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD1.  We only need to refer to para.42 of the judgment of Bokhary PJ,

“Where the judgment turns on issue of fact, the Court of Appeal must have regard to the nature of that issue of fact.  And it must have regard to the advantages enjoyed by a trial judge who received the evidence on such an issue at first-hand, in other words, in whose presence the whole of the evidence unfolded in its living state.  Such advantages can be, as Lord Shaw of Dunfermline put it in Clarke v Edinburgh Tramways [1919] SC (HL) 35 at p.36, ‘sometimes broad and sometimes subtle’.  The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand, it is nevertheless satisfied that his conclusion on the facts is plainly wrong.  The Court of Appeal should intervene if so satisfied.  But if not so satisfied, the Court of Appeal should defer to the trial judge’s conclusion even if in some doubt as to its correctness.”

10.  Is the judge plainly wrong? With respect, we are of the view that the 2^nd and 3^rd Plaintiffs do not come anywhere near in establishing this.  There is simply no ground to warrant this court’s interference with the trial judge’s findings.

11.  Turning to the specific grounds of appeal, of the numerous grounds set out in the Notice of Appeal only three grounds were pursued at the hearing: Grounds 5, 8 and 9.  Ground 9 was not argued as a separate ground, rather it was put forward as a conclusion based on the points canvassed under the other two grounds.

12.  Ground 5 focused on the judge’s acceptance of the evidence of the sister.  It is said that her evidence is basically hearsay evidence.

13.  Amongst other things, she testified about the acknowledgments by the 2^nd Plaintiff to her as regards the existence of the 10-year agreement.  Thus, the learned judge said at para.37,

“As to the all important 10-year agreement …, the sister was very firm in her evidence that she had heard about it and confirmed it with the 2^nd Plaintiff face-to-face on several occasions.”

See also paras.38, 42, 44 and 47 as regards the acknowledgments by the 2^nd Plaintiff.

14.  In a civil trial, the court is entitled to act on hearsay evidence.  The hearsay evidence of the sister was based on what the sister learnt from the Defendant, Pak Leung and the 2^nd Plaintiff.  The 3^rd Plaintiff submitted in the appeal that the information from the Defendant and Pak Leung was unreliable because of their subscription to documents which are manifestly false.  We will deal with that point later.  However, the same cannot be said with regard to the hearsay evidence based on information from the 2^nd Plaintiff.  The acknowledgments (as regards the existence of the 10-year agreement) are admissions against interest and the court can attach great weight to the same. 

15.  Turning to the submission of the 2^nd and 3^rd Plaintiffs on unreliability of information from Pak Leung and the Defendant, the complaints of the 2^nd and 3^rd Plaintiffs are that because the two of them had put their signatures on a document dated 13 November 1991 (at p.574 of the Appeal Bundle) and such document purported to record the terms agreed at the meeting of 7 November 1991 which even on the Defendant’s own case are shown to be inaccurate, they were guilty of forgery and their credibility is very much in doubt.

16.  It was clarified in the course of hearing that the 2^nd and 3^rd Plaintiffs did not allege the document to be forged in the sense that the signatures to the document were not genuine.  What they said to be false is the statement in the document that at the meeting of 7 November 1991 there was an agreement to repay the money advanced by the 2^nd Plaintiff to the Defendant from the latter’s share in the income of the estate.  That is not an accurate summary of what had been agreed at that meeting.  The Defendant’s case (accepted by the judge) was that the agreement was to treat 10 years’ entitlement of the Defendant from the income of the estate as repayment of the monies advanced by the 2^nd Plaintiff.

17.  The learned judge referred to the document in his judgment at para.22.  He was well aware of this discrepancy between the statement in this document and the case of the Defendant.  This is plain from the reference at para.21 of the judgment to the Defendant’s explanation on a similar discrepancy in another document dated 8 November 1991.  The judge again dealt with the same point (regarding letters written by the parties as well as these two documents in November 1991) at paras.66 to 72 of the judgment.

18.  Thus, the judge did take this discrepancy into account when he assessed the evidence.  Having done so, it is perfectly within his power to accept the Defendant’s evidence and to find that Pak Leung was trustworthy despite such discrepancy.

19.  The same observation applies to the 2^nd and 3^rd Plaintiff’s complaint arising from a similar discrepancy regarding the document of 8 November 1991.

20.  We do not see any merits in the suggestion of the 2^nd and 3^rd Plaintiffs that the learned judge had misread these two documents.

21.  In his written submissions, the 3^rd Plaintiff put forward other arguments under this ground which strictly do not fall within the scope of this ground.  Be that as it may, we have considered the same.  They were in many instances suppositions upon suppositions.  They also criticized the judge in forming a view on the evidence.  But that is precisely the function of a trial judge after hearing and considering all the evidence.  None of those arguments constitute any valid ground for saying that the judgment of the learned judge was plainly wrong.

22.  Turning to Ground 8, it is said the learned judge erred in finding that the “buy-out” agreement and the 10-year agreement were made between the Defendant and the 2^nd Plaintiff personally.

23.  The question of capacity was dealt with at para.106 of the judgment,

“There was a dispute at trial as to whether the original 1990 agreement was made between the defendant and the 1^st to 3^rd Plaintiffs together with Yam Ka or was just made between the defendant and the 2^nd Plaintiff personally.  I do not find this a material issue.  Whether the 2^nd Plaintiff had agreed with the defendant for the so-called purchase of his share in the estate in his own personal capacity or in a representative capacity, in that same capacity he had agreed, so I find, with the defendant for the cancellation of the same under the 10-year agreement as per the defendant’s version.”

24.  Though the judge went on to make some findings, they were unnecessary for the disposal of the action.  It has never been seriously suggested at the trial that the 2^nd Plaintiff attended the meeting in November 1991 in a capacity different from that when he made the buy-out agreement.  Nor has it been suggested that the 10-year agreement did not bind others having an interest under the buy-out agreement because the 2^nd Plaintiff did not have any authority to represent them.  In these circumstances, we agree with the learned judge the question of capacity is immaterial.

25.  For these reasons, the grounds relied upon by the 2^nd and 3^rd Plaintiffs fail to show that the judgment below is plainly wrong.  We dismiss the appeal with an order that the 2^nd and 3^rd Plaintiffs shall pay the costs of the Defendant in the appeal, such costs to be taxed if not agreed.  The Defendant is on legal aid and his own costs shall be taxed in accordance with the Legal Aid Regulations.

[1] Originally the 4^th Plaintiff also signed the Notice of Appeal of 12 June 2007. However, on 20 November 2007, she applied to have her appeal dismissed with costs and an order in terms of her application was granted by Tang VP on the same date.