HAU KING WAI KEITH AND OTHERS v. HAU TAK CHEUNG AND OTHERS

HCAP 18/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 18 OF 2013

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J U D G M E N T

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A. BACKGROUND

1.  The parties to this action are family members of the Hau clan in Ho Sheung Heung, New Territories.

2.  This is an action concerning the estate of Hau Fook (Fuk) Sui, deceased, who died intestate on 5 March 1990.

3.  There is no dispute that the estate of Hau Fook Sui consists of only 6 pieces of land in Demarcation District No 95, namely, Lot Nos 1644, 214RP, 187, 191, 216 and 69 (collectively “the 6 Properties”). This is clear from the Letters of Administration of the estate of Hau Fook Sui obtained by Hau Sun Chiu, deceased on 27 July 2012(“the Grant”). This is also common ground on the pleadings.

4.  There is also no dispute that the succession and inheritance of the estate of Hau Fook Sui were and are to be governed by Chinese customs and customary rights affecting such land.  

A1.   Members of the Hau Clan

5.  The relevant members of the Hau clan can be gleaned from the Family Tree, annexed to this Judgment as “Annexure I”.

6.  Hau Hing Sau, deceased and Hau Man Sau, deceased were natural brothers and were indigenous inhabitants in Ho Sheung Heung.  Both of them died without leaving any natural son.

(1) Hau Hing Sau’s wife was Hau Lau Shi; whereas Hau Man Sau’s wife was Hau Liu Shi.

(2) It is not entirely clear when Hau Hing Sau and Hau Man Sau passed away.

(3) However, it appears that Hau Hing Sau passed away sometime between 1911 and 1920 (and probably sometime before 1918).

(4) As to Hau Man Sau, it would appear that he should have passed away in 1909 (ie 己酉年, which would be宣統元年), but not 1914 as the defendants suggest (as 1914 should be甲寅年 and民國三年).

7.  There is no dispute that Hau Fook Sui was the adopted heir to Hau Hing Sau.  It was after the demise of Hau Hing Sau that Hau Lau Shi posthumously adopted Hau Fook Sui as the heir to Hau Hing Sau.

(1) It would appear that Hau Fook Sui was born in about 1899. 

(2) Hau Fook Sui died intestate on 5 March 1990.

(3) Hau Fook Sui was not any blood relative of Hau Hing Sau, deceased.

(4) It is the the Plaintiffs’ case that Hau Fook Sui only came to Ho Sheung Heung in about 1918, after both Hau Hing Sau and Hau Man Sau had passed away.

(5) Hau Fook Sui was originally surnamed “Chan”, and he only came to have his surname changed to “Hau” with the posthumous adoption to Hau Hing Sau.

(6) It would appear that Hau Lau Shi had posthumously adopted Hau Fook Sui as the heir to Hau Hing Sau, deceased by no later than 1920; whilst the adoption only came to be documented in 1924. 

(7) It is relevant to note, as pointed out by Professor Palmer and Professor Baker, the respective experts engaged by the parties, in their Joint Report, the adoption of Hau Fook Sui as the heir to Hau Hing Sau was “clearly illegal under the Ching Code”.  However, despite such “illegality”, they are prepared to accept that the adoption of Hau Fook Sui as the heir to Hau Hing Sau was a valid adoption under Chinese customary law. 

8.  Tang Kam was the wife of Hau Fook Sui.  It would appear that they got married in about 1925.  It appears that Tang Kam was born in 1906.  She passed away on 12 July 1995.

9.  Hau Fook Sui and Tang Kam had the following natural offspring, in the order of seniority: –

(1) Hau Yuk Chiu, deceased – the eldest son, born in about 1928 and passed away in 1978 (pre-deceasing Hau Fook Sui);

(2) Hau Sun Chiu, deceased – the 2^nd son, born on 16 August 1929 and passed away on 9 October 2012;

(3) Hau Foo Chiu, deceased – the 3^rd son, born in around 1931/1932 but died at very tender age with no offspring;

(4) Hau Look Shun, deceased – the 4^th son, born in about 1935 and died on 2 November 1995;

(5) Hau Bing Gwai – the 5^th son, born in around 1938/1939 but died at very tender age with no offspring;

(6) Hau Ping Ho, deceased – a daughter, born in 1942 or 1944 and passed away on 29 September 2013; and

(7) Hau Yuk Chun, a daughter, born in 1946 or 1948 and is still alive.

10.  There is no dispute that the daughters of Hau Fook Sui are not entitled to any right of succession and/or inheritance of the estate of Hau Fook Sui.

11.  Hau Yuk Chiu and his wife Chung Kam Yung got married in about 1949.  Chung Kam Yung passed away on 21 August 2010.  Hau Yuk Chiu and Chung Kam Yung had 4 natural sons and 4 natural daughters, in the order of their dates of birth: –

(1) Hau Mui Mui, a daughter;

(2) Hau King Wai Keith, a son – 1^st plaintiff by original action and 1^st defendant by counterclaim;

(3) Hau Hang Mui, a daughter;

(4) Hau Yuen Kwong, a son – 2^nd plaintiff by original action and 2^nd defendant by counterclaim;

(5) Hau Chi Kin, a son – 4^th defendant by counterclaim;

(6) Hau Lan Mui, a daughter;

(7) Hau Wai Kuen, a daughter; and

(8) Hau Ying Fat, the youngest son – 3^rd plaintiff by original action and 3^rd defendant by counterclaim.

12.  Hau Sun Chiu’s first wife was Ng Oi Jun (Chun), who passed away in 1962.  Hau Sun Chiu had 3 natural sons and a natural daughter, namely: –

(1) Hau Tak Shing, a son;

(2) Hau Tak Cheung, a son –

(i) He is (a) 1^st defendant by original action and 1^st plaintiff by Counterclaim (in the capacity as executor of the estate of Hau Sun Chiu, deceased) and (b) 2^nd defendant by original action and 2^nd plaintiff by Counterclaim; and

(ii) He is also the father of Hau Wing Yin – 3^rd defendant by original action and 3^rd plaintiff by counterclaim, who is also a solicitor by profession;

(3) Hau Tak Yan, a son; and

(4) Hau Mei Kwan, a daughter.

13.  Hau Look Shun was never married, and he died intestate on 2 November 1995 without having any natural offspring.

14.  It is the case of the plaintiffs by original action and defendants by counterclaim (“plaintiffs”) that: –

(1) Despite Hau Yuk Chiu having pre-deceased Hau Fook Sui, Hau Yuk Chiu’s sons are still entitled to succeed to and inherit Hau Yuk Chiu’s share of the estate of Hau Fook Sui under Chinese customs and/or customary law;

(2) Hau Ying Fat has been adopted under Chinese customs and/or customary law as the heir to Hau Look Shun, deceased, and therefore Hau Ying Fat is entitled to succeed to and inherit the estate of Hau Look Shun (including Hau Look Shun’s interest in the estate of Hau Fook Sui); and

(3) Hau Sun Chiu was adopted under Chinese customs and/or customary law as the heir to the “fong” of Hau Man Sau, deceased, and therefore Hau Sun Chiu was not entitled to any right of succession or inheritance in the estate of Hau Fook Sui.

B.   DEALINGS WITH THE ESTATE OF HAU FOOK SUI BY THE DEFENDANTS

15.  The plaintiffs contend that while Hau Sun Chiu was not entitled to any right of succession or inheritance in the estate of Hau Fook Sui, Hau Sun Chiu, together with Hau Tak Cheung and Hau Wing Yin, have wrongfully and surreptitiously dealt with the estate of Hau Fook Sui and the 6 Properties, behind the backs of the “fong” of Hau Yuk Chiu and Hau Ying Fat.

16.  Firstly, some 22 years after the demise of Hau Fook Sui, without any prior notice to the members of the “fong” of Hau Yuk Chiu and/or Hau Ying Fat, Hau Sun Chiu applied for and obtained the Grant of administration of the estate of Hau Fook Sui. 

(1) The affirmation of Hau Sun Chiu for his application for the Grant of administration of the estate of Hau Fook Sui was made in June 2012.  He made the application on the purported basis that he was entitled to share in the estate of Hau Fook Sui as his “lawful and natural son”, but without disclosing, on the plaintiffs’ case, that he had been adopted under Chinese customs and/or customary law as the heir to the “fong” of Hau Man Sau.  He falsely claimed that the Deceased Hau Fook Sui had no other children or issue during the whole of his lifetime than himself, Hau Ping Ho, Hau Yuk Chun and Hau Look Shun; and in so doing the plaintiffs say he must have deliberately concealed from the Probate Registry the existence of Hau Yuk Chiu and the whole of the first “fong”.  He made his affirmation before his grand daughter Hau Wing Yin, the 3^rd defendant by original action herein.

(2) Relying on that affirmation, Hau Sun Chiu obtained the Grant of administration of the estate of Hau Fook Sui on 27 July 2012.

17.  Immediately after obtaining the Grant on 27 July 2012, Hau Sun Chiu, acting purportedly as the administrator of the estate of Hau Fook Sui, purported to transfer the 6 Properties, representing the entire estate of Hau Fook Sui, to Hau Sun Chiu’s son Hau Tak Cheung and his granddaughter Hau Wing Yin. 

(1)   The 6 Properties were purportedly transferred by Hau Sun Chiu as follows: –

	Lot	Assignee	Date of Assignment	Purported nature of transaction	Stated price (HK$)
(1)	1644	Hau Tak Cheung	1 Aug 2012	Sale	1,500,000
(2)	214RP	Hau Wing Yin	1 Aug 2012	Sale	1,500,000
(3)	187	Hau Tak Cheung	8 Sep 2012	Sale	400,000
(4)	191	Hau Wing Yin	8 Sep 2012	Sale	400,000
(5)	216	Hau Tak Cheung	21 Sep 2012	Sale	100,000
(6)	69	Hau Tak Cheung	1 Oct 2012	Sale	100,000

(2) Each of the 6 assignments was dressed up as outright “sale” of the relevant piece of land with a stated “consideration”. However, as it transpired (as admitted by the defendants), no consideration was ever paid. 

(3) That was done without notice to nor consent of the beneficiaries of the estate of Hau Fook Sui, in particular the plaintiffs.

18.  After the purported sale of the 6 Properties was discovered by Hau Ying Fat in March 2013, legal proceedings were commenced by the plaintiffs by original action initially by HCA 562 of 2013 on 10 April 2013, which only complained of Hau Sun Chiu’s transfer of the 6 Properties to Hau Tak Cheung and Hau Wing Yin.  That action has since been withdrawn after the commencement of the present action, which deals with not only Hau Sun Chiu’s transfer of the 6 Properties to Hau Tak Cheung and Hau Wing Yin, but also issues on the revocation of the Grant of administration of the estate of Hau Fook Sui to Hau Sun Chiu and on the entitlement to the estate of Hau Fook Sui.  Plainly the earlier action had been issued as a matter of great urgency aiming at registering the writ against the 6 Properties so as to stop any further dealing or disposal of the properties.  A land search of the property was done on 2 April 2013 and the writ was issued on 10 April 2013 and was registered on the same day.  The writ in the earlier action was never served.

19.  It is the case of the plaintiffs that: –

(1) The Grant of administration of the estate of Hau Fook Sui was unnecessary and Hau Sun Chiu was never entitled to the Grant, and the Grant should therefore be revoked.

(2) Further, Hau Sun Chiu was acting in breach of fiduciary duties as the administrator of the estate of Hau Fook Sui in transferring the 6 Properties to Hau Tak Cheung and Hau Wing Yin respectively; and Hau Tak Cheung and Hau Wing Yin have dishonestly assisted and/or knowingly received benefits arising from Hau Sun Chiu’s wrongful breaches of fiduciary duties.

C.   THE MAIN ISSUES IN DISPUTE

20.  While the parties in this action have no dispute that the succession and inheritance of the 6 Properties constituting the entire estate of Hau Fook Sui were and are to be governed by Chinese customs and customary rights, the disputes between the parties as to the entitlement to such estate of Hau Fook Sui are essentially as follows:

(1) Entitlement of the “fong” of Hau Yuk Chiu, deceased: –

(i) It is the case of the plaintiffs that the “fong” of Hau Yuk Chiu, as one of the “fong” of Hau Fook Shui, is entitled to share in the estate of Hau Fook Sui, deceased by virtue of Chinese customary law and/or Chinese custom.

(ii) Although the defendants accept the “general rule of Chinese customary law and/or Chinese custom” that the estate of Hau Fook Sui ought to be “distributed per stirpes and equally to the Three Fongs [ie the “fongs” of Hau Yuk Chiu, Hau Sun Chiu and Hau Look Shun]”, they contend that the “fong” of Hau Yuk Chiu is not entitled to share in the estate of Hau Fook Shui, because of the alleged “分家 fan ka” (or economic family division) in 1983 before the demise of Hau Fook Sui.

(2) Entitlement of the “fong” of Hau Sun Chiu, deceased: –

(i) It is the case of the plaintiffs that the “fong” of Hau Sun Chiu is not entitled to share in the estate of Hau Fook Sui, because Hau Sun Chiu was adopted out of the “fong” of Hau Fook Sui to become the adopted heir of the “fong” of Hau Man Sau.

(ii) But, the adoption of Hau Sun Chiu, deceased is denied by the defendants.

(3) Entitlement to Hau Look Shun, deceased’s share –
While there is no dispute that Hau Look Shun was entitled to share in the estate of Hau Fook Sui, deceased: –

(i) It is the case of the plaintiffs that Hau Ying Fat is entitled to succeed to and inherit Hau Look Shun’s share in the estate of Hau Fook Sui, deceased, because Hau Ying Fat is the adopted heir of Hau Look Shun.

(ii) But, the adoption of Hau Ying Fat is denied by the defendants; and they further contend that the succession to the estate of Hau Look Shun ought to be governed by the Intestates’ Estates Ordinance.

21.  Further, in relation to the Grant of administration of the estate of Hau Fook Sui to Hau Sun Chiu and the dealings with the 6 Properties by Hau Sun Chiu with Hau Tak Cheung and Hau Wing Yin, there are issues as to: –

(1) Whether the Grant of administration of the estate of Hau Fook Sui to Hau Sun Chiu should be revoked;

(i) The plaintiffs contend that the Grant of administration of the estate of Hau Fook Sui should be revoked for the reasons that (a) the Grant was unnecessary, because by virtue of Section 12 of the New Territories Land (Exemption) Ordinance, succession to the estate of Hau Fook Sui (namely the 6 Properties) was to be effected by registration of the successors’ interest pursuant to Section 17 of the New Territories Ordinance; and (b) Hau Sun Chiu was never entitled to the Grant because of his having been adopted out as the heir to the “fong” of Hau Man Sau.

(ii) The defendants by original action and counterclaimants (“defendants”) contend that (a) the Grant was necessary; and (b) Hau Sun Chiu was never adopted to the “fong” Hau Man Sau.

(2) Whether Hau Sun Chiu acted in breach of fiduciary duties in purportedly selling and assigning the 6 Properties to his son and his granddaughter, namely Hau Tak Cheung (2^nd defendant by original action) and Hau Wing Yin (3^rd defendant by original action). The defendants contend that the transfers were done for the “sole purpose of securing, safeguarding and protecting” the estate of Hau Fook Sui.

(3) The role and liabilities of Hau Tak Cheung and Hau Wing Yin as accessories to such breach of fiduciary duties by Hau Sun Chiu, deceased.

22.  In other words, there are essentially 5 main issues in dispute between the parties.

C1.   Whether there was “分家 fan ka”

23.  In relation to the entitlement of the “fong” of Hau Yuk Chiu, there is no dispute that despite Hau Yuk Chiu having predeceased Hau Fook Sui, under the general rule of Chinese customary law and/or Chinese custom, the distribution of the estate of Hau Fook Sui ought to be “per stirpes”; the “fong” of Hau Yuk Chiu would have been entitled to in effect one-third of the estate of Hau Fook Sui.

24.  The only real issue is whether there was the alleged “分家 fan ka” (or economic family division) in 1983 before the demise of Hau Fook Sui, which would have the effect of depriving the “fong” of Hau Yuk Chiu of any distribution of the estate of Hau Fook Sui after his demise.

25.  The defendants allege that there was such “fan ka”; but that is denied the plaintiffs.

26.  It would be for the defendants to make good their case of “fan ka”. 

27.  The case of “fan ka” as advanced by the defendants is based on the transfer of Lot 975 in DD 95 by Hau Fook Sui to Hau King Wai on 11 May 1983.

28.  The defendants allege that the transfer was made because of a prior demand made by Hau King Wai on Hau Fook Sui for Hau Yuk Chiu’s “fong” / Hau King Wai to take its / his inheritance by way of “fan ka”.

29.  The case of the plaintiffs is that Lot 975 was a gift by Hau Fook Sui to Hau King Wai, and the transfer was not made under any threat or demand of Hau King Wai, not to mention any alleged “fan ka”.  In any case, by the time of the transfer Hau Yuk Chiu had already passed away.  There was nothing to indicate that Hau King Wai had any authority to represent the “fong” of Hau Yuk Chiu, and at the time Hau Yuen Kwong, Hau Ying Fat and Hau Chi Kin have all been born.

30.  On this issue, as pointed out by the plaintiffs, it can be noted that: –

(1) Insofar as the defendants seek to rely on the 2 letters written by Hau Chi Kin and by Hau King Wai as the alleged “demand” for “fan ka”, it is plain that the contents of those letters do not bear out the alleged so-called demand for “fan ka”.

(2) After the transfer of Lot 975 by Hau Fook Sui to Hau King Wai in May 1983, Hau Fook Sui was still holding various pieces of land, including the 6 Properties (which eventually became the entire estate of Hau Fook Sui) and also Lot 689B in DD 95 (which was subsequently resumed by the Government.  So, there was no, and would not have been any, once-and-for-all “fan ka”.

(3) Further, it was only in August 2013, months after the parties have been corresponding through solicitors in relation to the entitlement to the estate of Hau Fook Sui and after the defendants had sought to dispute/challenge the entitlement of the plaintiffs to the estate of Hau Fook Sui but without offering any basis for such dispute/challenge, that it came to be alleged that the defendants had after May 2013 “uncovered evidence” that the plaintiffs were “no longer (at law) entitled to receive a distribution of” the estate of Hau Fook Sui.  Yet, they still refused to say what the “evidence” was and how and why the plaintiffs became “no longer entitled”.

(4) Further, it would appear that under Chinese customary law and/or Chinese custom, there are certain features/requirements for “fan ka” which would have to be satisfied before the “fong” of Hau Yuk Chiu would be disentitled to share in the estate of Hau Fook Shui, but which the so-called “fan ka” as alleged by the defendants falls foul, such as: 

(i) A transaction of “gift” would not be a “fan ka”;

(ii) Disinheritance was extremely rare, and when it did occur it would be announced publicly;

(iii) If “fan ka” did occur, there should be documentary record;

(iv) “Fan ka” was meant to be a “once and for all” event for all of the property of the whole family; and

(v) Even if there were a partial “fan ka”, the heir would still be entitled to share in the estate of the family head after his demise.

C2.   Adoption of Hau Sun Chiu

31.  The plaintiffs contend that Hau Sun Chiu was adopted out of the “fong” of Hau Fook Sui to become the adopted heir of the “fong” of Hau Man Sau.  Therefore, the “fong” of Hau Sun Chiu would no longer be entitled to share in the estate of Hau Fook Sui under the “per stirpes” distribution of the estate of Hau Fook Sui to his “fongs”. 

32.  The issue is whether Hau Sun Chiu was adopted out as the heir of the “fong” of Hau Man Sau.

33.  The plaintiffs contend that Hau Sun Chiu’s adoption out to the “fong” of Hau Man Sau is supported by the following: –

(1) Hau Sun Chiu’s adoption was a well-known fact within the Hau family.

(2) It is customary that if a man has more than one son he would only allow the younger son to be adopted by another branch of the family with no issue.

(3) His adoption is also well-known within the Hau clan.  This is evident from the fact that when Hau Sun Chiu sought to obtain Hau Fook Sui’s share in the distribution for land resumption compensation from the Hung Ancestor (珙祖) (which is a Tso of the Hau clan in Ho Sheung Heung), the managers of the Hung Ancestor required Hau Sun Chiu to get the consent of the descendants of Hau Yuk Chiu and Hau Look Shun, because only they were entitled as descendants of Hau Fook Sui, and Hau Sun Chiu having been adopted out to the “fong” of Hau Man Sau was not so entitled.

(4) The only piece of property belonging to Hau Man Sau and left behind after his demise, namely House G6 on Lot Tsung Un 2 in DD 95 which was given by Hau Yan Cheung (侯仁祥) to Hau Man Sau but held originally in the name of Hau Hing Sau and subsequently in the name of Hau Fook Sui, was eventually succeeded to by Hau Sun Chiu upon transfer to him by Hau Fook Sui in 1979.

(5) The ancestor’s altar kept at the home of Hau Sun Chiu only showed Hau Man Sau, but not Hau Hing Sau, as his ancestor. 

(6) It is admitted by the defendants that the ancestral tablet of Hau Hing Sau was placed and maintained in the house of Hau Yuk Chiu; whereas the ancestral tablet of Hau Man Sau was placed and maintained in the house of Hau Sun Chiu.

(7) Names of the members of the “fong” of Hau Sun Chiu do not appear on the tombstone of Hau Hing Sau.

(8) After the demise of Hau Fook Sui, the “fong” of Hau Sun Chiu no longer worship the grave of Hau Hing Sau.

34.  To the defendants’ contention that the adoption of Hau Sun Chiu was contrary to aspects of Chinese customary law and/or Chinese customs, the plaintiffs contend that: –

(1) So far as ceremony for the adoption, or the absence of which, is concerned,

(i) There is no mandatory requirement under Ching law for there to be any formal ceremony.

(ii) In any event, the local custom of Ho Sheung Heung did not require adoption to be celebrated by any formal ceremony.

(2) Likewise, there was no legal requirement for there to be any written document for the adoption.

(3) The general principle that the adoption arrangement ought to be in line with the seniority or “bei fun (輩分)” in the family was not a rule that could not be departed from. 

(4) It is important to note that in the present case it is not a case where there was evidence that there was no ceremony.  It is merely a case that there was no positive evidence of a ceremony.  However, having regard to the fact that the only persons who could be expected to have any actual knowledge of the ceremony could not reasonably be expected to be available to give evidence, the fact that there was no positive evidence of a ceremony has lost much of its probative value.

C3.   Adoption of Hau Ying Fat

35.  The plaintiffs contend that Hau Ying Fat is the adopted heir of Hau Look Shun.  Therefore, Hau Ying Fat is entitled to succeed to and inherit Hau Look Shun’s estate.  As the member of the “fong” of Hau Look Shun, Hau Ying Fat is also entitled to the “per stirpes” distribution of the estate of Hau Fook Sui for the “fong” of Hau Look Shun”. 

36.  The issue is whether Hau Ying Fat was adopted out as the heir of Hau Look Shun.

37.  The plaintiff contends that Hau Ying Fat’s adoption is obvious from the following: –

(1) Hau Ying Fat’s adoption was a well-known fact within the Hau family.

(2) His adoption is also well-known within the Hau clan. This is evident from the fact that Hau Ying Fat managed to obtain Hau Look Shun’s share in the distribution for land resumption compensation from the Hung Ancestor (珙祖) (which is a Tso of the Hau clan in Ho Sheung Heung), without any query from the managers of the Hung Ancestor.

(3) When Hau Ying Fat was still a child, before Hau Ying Fat’s natural mother (who was taking care of Hau Ying Fat as Hau Look Shun was working on ocean liners) could take Hau Ying Fat to the UK, she had to seek and obtain the consent of Hau Look Shun.

(4) Before the demise of Hau Look Shun, he had already made it clear to the Hau family members that Hau Ying Fat as his adopted son was to take care of his funeral arrangements.

(5) After Hau Look Shun’s demise, Hau Ying Fat took possession of all personal belongings of Hau Look Shun.

(6) Hau Ying Fat bore responsibility and handled all the funeral arrangements of Hau Look Shun, including looking for burial ground, “carrying the banner and buying the water” (擔幡買水), etc.

(7) The ancestral tablet of Hau Look Shun is kept and worshipped by Hau Ying Fat at Hau Ying Fat’s residence.

(8) Hau Ying Fat succeeded to the entire estate of Hau Look Shun (except the piece of land which, according to Hau Sun Chiu, Hau Look Shun had promised to give to Hau Sun Chiu as and for repayment of alleged “loans” made by Hau Sun Chiu to Hau Look Shun), after Hau Sun Chiu had with the consent of Hau Ying Fat applied for and obtained the grant of administration of the estate of Hau Look Shun (instead of having the application for grant made by Hau Ying Fat which would have involved greater complexity because of his status as the adopted son of Hau Look Shun).  The surviving siblings of Hau Look Shun all consented to Hau Ying Fat’s succession to the estate of Hau Look Shun, showing their recognition of Hau Ying Fat as the adopted heir of Hau Look Shun.

(9) Again in the present case, there is no positive evidence that there was no ceremony.  If there should be an adoption, then it must have taken place at the time when Hau Ying Fat was very young and he could not reasonably be expected to be able to remember it.  Further, the ceremony could be a very simple one and it could simply be a case of an ancestral worship where only the immediate family members of Hau Yuk Chiu would be involved.  Hau Yuk Chiu having passed away and his wife, the mother of Hau Ying Fat had also passed away before any dispute on his being the adopted son has arisen.  Hau Yuk Chun was living away from the village by then.

38.  To the defendants’ contention that the adoption of Hau Ying Fat was contrary to aspects of Chinese customary law and/or Chinese customs, the plaintiffs contend that: –

(1) Whether there was any ceremony is quite irrelevant.  As pointed out above,

(i) There is no mandatory requirement under Ching law for there to be any formal ceremony.

(ii) The local custom of Ho Sheung Heung did not require adoption to be celebrated by any formal ceremony

(iii) Hau Ying Fat’s adoption was a well-known fact within the Hau family.

(2) There was no legal requirement for there to be any written document for the adoption.

(3) There was no rule prohibiting adoption even if the adopting father was unmarried, like Hau Look Shun.

(4) Hau Ying Fat’s status as the adopted heir and entitlement to succeeded to the estate of Hau Look Shun would not be affected (a) by the fact that the other 3 natural brothers of Hau Ying Fat gave him a share in the estate of Hau Yuk Chiu, namely House G5 on Tsung Un Lot 1, nor (b) by his natural mother Chung Kam Yung appointing him as executor of her will and giving him a share in her estate by will, nor by his acting as executor as such (especially when he has relinquished all his interest in the estate of Chung Kam Yung anyway).

C4.   Revocation of Grant of administration of estate of Hau Fook Sui

39.  The plaintiffs contend that it was unnecessary (and indeed improper) for Hau Sun Chiu to apply for and obtain the Grant of administration of the estate of Hau Fook Sui. 

40.  Hau Fook Sui passed away in 1990, before the enactment of the New Territories Land (Exemption) Ordinance in 1994.  No grant of probate or administration of the estate of Hau Fook Sui was made within 3 months after his demise.  By virtue of Section 12 of the New Territories Land (Exemption) Ordinance, succession to the 6 Properties was and is to be effected by way of registration of the successors’ estate therein in the Land Registry pursuant to Section 17 of the New Territories Ordinance. [see: Liu Ying Lan v Liu Tung Yiu, HCA 6693/1992 (Judgment dated 8 May 2002, paras 11-16)]

41.  It is clear from the Schedule of Property annexed to the Grant itself that the estate of Hau Fook Sui consisted of only the 6 Properties.  Succession to the 6 Properties would not have required the Grant.

42.  Further, the plaintiffs contend that by reason of Hau Sun Chiu’s adoption out as the heir of the “fong” of Hau Man Sau, he was not entitled to any right of succession or inheritance in the estate of Hau Fook Sui.  Hau Sun Chiu has no beneficial interest in the estate of Hau Fook Sui.  For that reason, he was not entitled to any grant in respect of the estate of Hau Fook Sui. [Rule 21, Non-Contentious Probate Rules]

43.  Further still, the Grant of administration of the estate of Hau Fook Sui was obtained by Hau Sun Chiu by making false statement – by his misrepresenting to the court that he was a beneficiary to and entitled to a grant of administration of the estate of Hau Fook Sui when he was not, by reason of his having been adopted out to the “fong” of Hau Man Sau, and also by his deliberate concealment of the existence of Hau Yuk Chiu and his descendants.  The application of letters of administration in common form is similar to an ex parte application to the court and the doctrine of full and frank disclosure is also applicable. [see: Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 20^th ed, para 32-03]

44.  The plaintiffs contend that the Grant of administration of the estate of Hau Fook Sui to Hau Sun Chiu should therefore be revoked. [Tristram and Coote’s Probate Practice, 31^st ed, para 17.08 and 17.11]

C5.   Defendants’ dealings in the 6 Properties

45.  There is no dispute that Hau Sun Chiu owed the following fiduciary duties to the beneficiaries of the estate of Hau Fook Sui: –

(1) To act in good faith and in the best interests of the estate and/or the beneficiaries;

(2) To exercise care and skill in administering the estate;

(3) Not to act so as to place himself in a position in which his personal interests do or might conflict with the interests of the estate and/or the beneficiaries; and

(4) Not to gain financial benefit out of the estate, and not to use or deal with the estate for his own advantage and/or for the advantage of others and to the detriment of the estate and/or the beneficiaries.

46.  The plaintiffs contend that Hau Sun Chiu was clearly acting in breach of these fiduciary duties when he transferred the 6 Properties to his son Hau Tak Cheung and his granddaughter Hau Wing Yin by way of the 6 assignments (i) which were dressed up as purported outright sale of the 6 Properties; (ii) with stated consideration purportedly having been paid by Hau Tak Cheung and Hau Wing Yin and with receipt of which purportedly acknowledged by Hau Sun Chiu; (iii) but when in truth and in fact no consideration was in fact paid by either Hau Tak Cheung or Hau Wing Yin; and (iv) that was done without prior notice to nor the consent of the other beneficiaries of the estate of Hau Fook Sui such as the plaintiffs.

47.  The plaintiffs say that the defendants’ allegation that the transfers were done for the sole purpose of protecting and/or securing and/or safeguarding the estate of Hau Fook Sui by assigning only the “legal title” in the 6 Properties to Hau Tak Cheung and Hau Wing Yin is unsustainable and is nothing but a lame excuse for the blatantly wrongful acts on their part.

(1) There is no reason why the application for the Grant by Hau Sun Chiu and the transfers of the 6 Properties had to be done with such secrecy by Hau Sun Chiu, and Hau Tak Cheung and Hau Wing Yin.

(2) By the 6 assignments, both the legal and beneficial title in the 6 Properties were transferred to Hau Tak Cheung and Hau Wing Yin.  The assignments did not merely convey the “legal title”. 

(3) It is completely unbelievable that Hau Wing Yin being a qualified solicitor in actual practice would be unaware of the proper form of transfer of property to a trustee or that the trustee should have made a proper declaration of trust.

(4) It was simply not necessary, and indeed contrary to common sense, for someone who has already got the grant of administration to transfer the property of the estate to someone else to protect the estate.

(5) It is inconceivable why no declaration of trust was signed, if the real purpose of the transfer was merely to transfer the “legal title” to Hau Tak Cheung and Hau Wing Yin for the sole purpose of protecting the estate; especially when the transactions were done under legal advice and when Hau Wing Yin herself was and is a practicing solicitor.

(6) It was completely unnecessary to have the 6 Properties assigned to Hau Tak Cheung or Hau Wing Yin in order for them to “help” Hau Sun Chiu with taking care of the 6 Properties.  For example, they had actually started engaging surveyors for boundary survey and setting out, and renting out the land well before the assignments.

(7) If the transfers were done only to protect the estate, it is also difficult to see why a separate bank account was only opened in late August 2013 for depositing the proceeds from renting out of the 6 Properties, and after the commencement of action by the plaintiffs.

(8) The refusal of Hau Tak Cheung and Hau Wing Yin to actually have the 6 Properties transferred back to the estate is also telling.

(9) There was never any attempt to make any application for direction as to how to dispose of the estate by Hau Wing Yin and Hau Tak Cheung if indeed they ever genuinely want to hold the properties only as trustee.

48.  The plaintiffs contend that Hau Tak Cheung (as the son of Hau Sun Chiu and also the assignee of 4 of the 6 Properties without paying any consideration therefor) and Hau Wing Yin (as a solicitor by profession, the daughter of Hau Tak Cheung and granddaughter of Hau Sun Chiu and also the assignee of 2 of the 6 Properties without paying any consideration therefor) have dishonestly assisted and/or knowingly received benefits arising from Hau Sun Chiu’s wrongful breach of fiduciary duties.

D.   DISCUSSION

D1.   Transfer of the 6 Properties in Breach of Fiduciary Duties

49.  As the transfer of the 6 Properties was the event which triggered the dispute between the parties, I think it is convenient to deal with this issue first.

50.  Hau Fook Sui died intestate on 5 Mar 1990.

51.  It is clear that the value of the 6 Properties is substantial. 

(1) As summarized in Exhibit P19, the 6 Properties have a total area of about 2,918.40 square metres (which converts into over 31,000 square feet). 

(2) It is rather clear from the evidence available that in around 2012, the value of the land, as reflected by the price offered by developers for purchasing similar land, was at least HK$200 to 300/square feet, which would give a total value of HK$6.2 million to HK$9.3 million.

(3) With the Government’s plan for the development of the Northeast of the New Territories (which covered the area of Ho Sheung Heung) since about 2008, and the public consultation since about 2009, which the defendants were fully aware of (as acknowledged by Hau Tak Cheung in his oral evidence), it is apparent that the potential value of the land would be even higher.  Hau Tak Cheung, in his evidence took the view that normally, the price of land would grow as time passed. 

D1.1   Grant to Hau Sun Chiu

52.  It is common ground between the parties that Hau Fook Sui was the adopted son of Hau Hing Sau, who was an indigenous inhabitant in Ho Sheung Heung.  There is no dispute that the succession and inheritance of the estate of Hau Fook Sui were and are to be governed by Chinese customs and customary rights affecting such land. 

53.  Some 22 years after the demise of Hau Fook Sui, Hau Sun Chiu, without any prior notice to the members of the “fong” of Hau Yuk Chiu and/or Hau Ying Fat, applied for and obtained the Grant of administration of the estate of Hau Fook Sui. 

(1) The affirmation of Hau Sun Chiu for his application for the Grant of administration of the estate of Hau Fook Sui was made in Jun 2012.  He made the application on the purported basis that he was entitled to share in the estate of Hau Fook Sui as his “lawful and natural son”, but without disclosing that he had been adopted under Chinese customs and/or customary law as the heir to the “fong” of Hau Man Sau.  Neither did he disclose that Hau Fook Sui was an adopted son of an indigenous inhabitant of Ho Sheung Heung, and his estate was thus to be succeeded to in accordance with Chinese customs and customary rights.  He further falsely claimed that Hau Fook Sui had no other children or issue during the whole of his lifetime than himself, Hau Ping Ho, Hau Yuk Chun and Hau Look Shun, and in doing so he must have deliberately concealed from the Probate Registry the existence of Hau Yuk Chiu and the whole of the 1^st “fong”.  He made his affirmation before Hau Wing Yin, who, on her own admission made in the 2^nd Meeting held on 15 May 2013, must have before the time of the application for Hau Fook Sui’s grant been fully aware of the existence of the 1^st “fong”, and that the 1^st “fong” should have been included, but had deliberately been excluded, from the affirmation. 

(2) Relying on that affirmation, Hau Sun Chiu obtained the Grant of administration of the estate of Hau Fook Sui on 27 Jul 2012.

D1.2   Grant unnecessary

54.  The Grant of administration of Hau Fook Sui’s estate was applied for in Jun 2012 and obtained in July 2012.  I agree with the plaintiffs that the reasons put forward by the defendants in the Defence and Counterclaim for obtaining the Grant are not valid.

55.  There was no unclarity about whether the daughters of Hau Fook Sui would be entitled to succeed to Hau Fook Sui’s estate.  There was simply no need to obtain “advice from Chinese customary law experts and/or the Court to ascertain and identify the membership of the beneficiaries entitled to succeed to the Hau Fook Sui’s estate”,and no such advice was in fact obtained. 

(1) Hau Fook Sui passed away in 1990, before the enactment of the New Territories Land (Exemption) Ordinance in 1994.  No grant of probate or administration of the estate of Hau Fook Sui was made within 3 months after his demise.  By virtue of Section 12 of the New Territories Land (Exemption) Ordinance, succession to the 6 Properties was and is to be effected by way of registration of the successors’ estate therein in the Land Registry pursuant to Section 17 of the New Territories Ordinance. The legal position has been clear years before the application was made in 2012. [see: Liu Ying Lan v Liu Tung Yiu, Supra]

(2) It is clear from the Schedule of Property annexed to the Grant itself that the estate of Hau Fook Sui was taken to have consisted of only the 6 Properties.  Succession to the 6 Properties would not have required the Grant.  Succession to the 6 Properties could have readily been effected by registration of the successors’ interest in the 6 Properties. But this would probably involve public notice in the village.

(3) It is not a case that before the application for grant was taken out, there had already been disputes within the Hau family about who should or should not be entitled to the estate.  As a matter of fact, the defendants had never consulted the plaintiffs before making the application for the grant.  Further, it is plain from the evidence that even up to the 2^nd Meeting on 15 May 2013, nearly a year after the grant was applied for, there was never any dispute within the Hau family that only the 3 “sons” of Hau Fook Sui would be entitled to succeed to his estate.  Hau Wing Yin in her oral evidence confirmed that even at the 2^nd Meeting, she knew very well that only the 3 “sons” of Hau Fook Sui were entitled. 

56.  The defendants would not have required the Grant to “relate back” the acts of administration, nor for the purpose of entering into valid leases. 

(1) Even up to the time of the 2^nd Meeting, there had never been any complaint from any beneficiary about Hau Sun Chiu and/or Hau Tak Cheung or Hau Wing Yin having carried out boundary survey for or having let the land of Hau Fook Sui.  Nor indeed is there any such complaint even in these proceedings.  The only complaint was the secretive transfer of all of the 6 Properties to Hau Tak Cheung and Hau Wing Yin without prior knowledge of the beneficiaries.

(2) As a matter of fact, leases of the land had been entered into by Hau Sun Chiu before the Grant was obtained.  There was never any suggestion that anyone was seeking to dispute the validity of such leases. Anyhow, the tenant would be estopped from disputing the landlord’s title.  The beneficiaries are not disputing.

57.  For the foregoing reasons, it is clear that it was not necessary for the Grant to be applied for.  However, by applying for the Grant, instead of effecting succession by way of registration, the 6 Properties could be transferred by Hau Sun Chiu to Hau Wing Yin and Hau Tak Cheung without any prior knowledge of the beneficiaries of the estate of Hau Fook Sui, as it eventually happened.

D1.3   Transfer of the 6 Properties

58.  Immediately after obtaining the Grant on 27 July 2012, Hau Sun Chiu, acting as the administrator of the estate of Hau Fook Sui, surreptitiously purported to “sell” the 6 Properties to his son Hau Tak Cheung and his granddaughter Hau Wing Yin. 

(1) Each of the 6 assignments was dressed up as outright “sale” of the relevant piece of land with a stated “consideration” paid.  However, as it transpired (as admitted by the defendants), no consideration was ever paid. 

(2) The transfers were done without prior notice to, nor prior consent of, the beneficiaries, in particular the plaintiffs, and including Hau Tak Shing and Hau Tak Yan.

(3) While the transfers were done between August and October 2012, the beneficiaries, in particular the plaintiffs, were not ever told of such transfers for many months after the transfers. 

59.  After the transfers were discovered by the plaintiffs, the defendants have at different stages put up different excuses for the transfer in ill-attempts to justify the transfers, which excuses as explained below are all invalid. 

D1.4   The Letter of Authorization

60.  In an apparent attempt to explain how Hau Wing Yin and Hau Tak Cheung came to get involved in the estate of Hau Fook Sui and why subsequently the 6 Properties were transferred to them, they put forward the Letter of Authorization allegedly signed by Hau Sun Chiu on 19 December 2011. 

61.  The story put up by the defendants in the witness statement of Hau Wing Yin, the relevant part of which was confirmed and adopted by Hau Tak Cheung, was that: –

(1) It all started off in November 2011, when Hau Sun Chiu (in a family gathering attended by Hau Wing Yin, Hau Tak Cheung and others) asked Hau Wing Yin to help him with making payment for the government fees for Hau Fook Sui’s land.  It is alleged that within a month or so, Hau Wing Yin drafted for Hau Sun Chiu the Letter of Authorization who signed it on 19 December 2011. 

(2) They painted a picture that Hau Sun Chiu did not know where the land was; and even thought that the land were not “owned” by Hau Fook Sui but was just sort of “rented” by Hau Fook Sui from the government for farming purpose. 

(3) Hau Wing Yin, being a solicitor, therefore did some land search to find out that the 6 Properties actually belonged to Hau Fook Sui and had not been dealt with by anyone for over 20 years since Hau Fook Sui’s demise in 1990.  To her knowledge, no beneficiary of the estate of Hau Fook Sui had asked for such land in the meantime. 

(4) It is alleged that she considered that various things ought to be done to “protect” the estate of Hau Fook Sui, such as to find out where the land was, etc., and Hau Sun Chiu entrusted Hau Wing Yin and Hau Tak Cheung to help him with the same. 

(5) The alleged purpose of the Letter of Authorization was for Hau Wing Yin and Hau Tak Cheung to show to the unauthorized occupants and the police as proof of their capacity to deal with the land when they sought to take back the land – to prove that they were related to the owner, with authority to deal with the land and to prove their identity as descendant of Hau Fook Sui.

62.  The story as so related in the witness statement is clearly to the effect that it was only in November 2011 when Hau Wing Yin was first asked to pay fees for Hau Fook Sui’s land while both Hau Wing Yin and Hau Tak Cheung were in the family gathering.  However, in Hau Tak Cheung’s oral evidence – his evidence was that some one to one-and-half year before his retirement (in May 2012), i.e. between December 2010 and June 2011, Hau Wing Yin had already told him about Hau Sun Chiu asking her to pay government fees for Hau Fook Sui’s land when Hau Wing Yin visited Hau Sun Chiu and later on she telephoned Hau Tak Cheung about it; and in about a week or so the three of them already had discussion about the land; and thereafter “on and off” the three of them talked about the matter, initially about arrangement to find out the land and later about the Letter of Authorization; and eventually the Letter of Authorization was drafted by Hau Wing Yin, with discussions among Hau Wing Yin, Hau Tak Cheung and Hau Sun Chiu on the contents.  Clearly, there are significant differences between the written evidence of Hau Wing Yin and Hau Tak Cheung on the one hand and the oral evidence of Hau Tak Cheung on the other in relation to both the timing of and the circumstances of the events leading to the Letter of Authorization.

63.  Moreover, the contents of the Letter of Authorization, which on the defendants’ case was drafted by Hau Wing Yin, who is a solicitor and who in the 2^nd Meeting actually held herself out to have acted as solicitor for Hau Sun Chiu in relation to the document, show that it could not have been signed by Hau Sun Chiu in December 2011 or thereabout.

(1) The second paragraph started off by saying that “本人 ...行動不便”, when, according to Hau Tak Cheung’s oral evidence, plainly that was not the condition of Hau Sun Chiu in December 2011 or thereabout.  His health condition only started to deteriorate in August 2012.  Hau Tak Cheung could not even say whether Hau Sun Chiu required a walking stick at all in December 2011.

(2) The Letter of Authorization went on to state that the authorization was made by Hau Sun Chiu in the capacity as the “administrator of the estate” “遺產管理人” of Hau Fook Sui.  However, the fact is that Hau Sun Chiu did not become the administrator of the estate of Hau Fook Sui until 27 July 2012.  It is no answer for Hau Tak Cheung to say in re-examination that the document was intended to be used after May 2012 (presumably his retirement).  When the document was prepared by Hau Wing Yin, Hau Sun Chiu had not even applied for the letter of administration.  Nor was he the administrator as at the date of the document.  The grant was not even applied for until 27 June 2012 and the grant was not issued until 27 July 2012.

(3) Hau Tak Cheung’s oral evidence emphasizing that all along he was only prepared to help Hau Sun Chiu with dealing with matters relating to the estate of Hau Fook Sui after his retirement (in May 2012)and that the document was intended to be used after May 2012 is also telling in that there was simply no reason for the Letter of Authorization to be prepared and signed so much in advance in December 2011.

(4) According to the evidence of Hau Tak Cheung, in late 2011 Hau Sun Chiu was obviously still in good health and mobility.  His health condition only started to deteriorate by August 2012.  Hau Sun Chiu was living in the village.  In the circumstances, in late 2011, when the Letter of Authorization was allegedly signed, they would not have contemplated any particular difficulty in getting Hau Sun Chiu to give confirmation of the “status” of Hau Tak Cheung and/or Hau Wing Yin if anyone were to challenge their capacity to deal with the land.

(5) According to Hau Tak Cheung in his oral evidence, he had already bought the blank pro forma tenancy agreement before the Letter of Authorization was signed.  There can be no valid explanation, and Hau Tak Cheung has not been able to offer any, for him to buy the pro forma tenancy agreement at such an early stage, if the Letter of Authorization were in fact signed in December 2011.  On the defendants’ case, at that stage, they did not have any idea where the land were, the land were yet to be found, the land were yet to be measured, they did not have any idea whether somebody was occupying the land, and it was not known if there would be any interested tenant.  There were so many steps down the line before they would need the pro forma tenancy agreement.  The pro forma tenancy agreements were all readily available in the bookshops, and Hau Wing Yin herself is a solicitor.  There was no need for Hau Tak Cheung to get ready the pro forma tenancy agreement so much in advance.  In all probability, Hau Tak Cheung would only have got the pro forma tenancy agreement shortly before the signing of the first few tenancy agreements on about 28 June 2012. 

(6) For the above reasons advanced by the plaintiffs, I agree that the Letter of Authorization would not have been signed as early as December 2011 as the defendants allege.

64.  The defendants’ story that Hau Sun Chiu did not have “any idea where the land was, and therefore would need their help to find the land, simply cannot be true.

(1) On Hau Tak Cheung’s own oral evidence, he did take Hau Sun Chiu in a car to find out where the land were, and though Hau Sun Chiu did not know the exact location he knew roughly where the land were. 

(2) Further, even before any survey for the land was done, they already knew that Lot 1644 was the sort of “environmental protection land”, and “was once a fish pond, now grown with grass, with no one there”, and therefore they made the deliberate decision not to do any land survey for that piece of land.  Clearly, they knew very well where that land was. 

(3) The letter from the Government in 1999 shows that Hau Sun Chiu must have known for a long time that Hau Fook Sui “owned” the 6 Properties.  On the defendants’ own case, he was familiar with the villagers. He was also one of the committee member responsible for preparing the Genealogy. He would have no difficulty in finding where the land were, even if he himself did not know it at the outset.

65.  In the circumstances, there is little left with the defendants’ case that the Letter of Authorization came to be given to them on the basis that they were to help Hau Sun Chiu to find out where the land was.

66.  The Letter of Authorization also could not serve the purpose for which the defendants say it was supposed to serve, namely, to be shown to outsiders, such as unauthorized occupants or police, as proof of the capacity of Hau Tak Cheung and Hau Wing Yin to deal with the land. 

(1) If somebody were to challenge their authority, Hau Sun Chiu in December 2011 was simply unable to show that he was the “administrator” of the estate of Hau Fook Sui.  Hau Sun Chiu’s authorization to Hau Tak Cheung and Hau Wing Yin was therefore useless.

(2) To any trespasser or outsider who did not know Hau Fook Sui and his family members, the Letter of Authorization would not even help in proving the relationship of Hau Wing Yin / Hau Tak Cheung with Hau Sun Chiu, and/or the relationship of Hau Sun Chiu with Hau Fook Sui.  What the Letter of Authorization says about the relationship of the people there mentioned is at best self-serving.  It simply cannot meet the challenge by such outsider.

(3) As acknowledged by Hau Tak Cheung in his oral evidence, the document would only help if it was shown to somebody who knew Hau Sun Chiu and Hau Fook Sui.  But that was not quite what the defendants say to be the purpose of the document.

(4) As confirmed by Hau Tak Cheung, the Letter of Authorization was never shown to any outsider.

67.  If, as Hau Wing Yin alleges in her oral evidence, the land of Hau Fook Sui was never intended to be sold at all and was only to be held for the estate of Hau Fook Sui pending government resumption, when Hau Sun Chiu gave the authorization to Hau Tak Cheung and Hau Wing Yin he would not have made provision for discussion with the beneficiaries in the event of purchase by developer, as provided for under paragraph 8 of the Letter of Authorization.

68.  I agree with the plaintiffs that the above circumstances show that the Letter of Authorization was in fact prepared, not to face any challenge from any outsider to the authority of Hau Wing Yin and Hau Tak Cheung, but to face the challenge of somebody from within the family, such as the people from the 1^st “fong”, on the acts of Hau Wing Yin and Hau Tak Cheung, by purporting to show that a lot of things had to be and had been done by them for the estate, including to find the land for the beneficiaries, and to whitewash themselves by saying that they would be consulting the beneficiaries before the land were to be disposed of.

D1.5   Ripping Hau Sun Chiu off his own land & Hau Fook Sui’s land

69.  The plaintiffs submit that the following documents or information originating from the defendants give a strong flavour of how Hau Wing Yin and Hau Tak Cheung “ripped” Hau Sun Chiu off all of his own land and all of Hau Fook Sui’s land then under his control as administrator within a short period of time before the death of Hau Sun Chiu, with all of the transfers (i) invariably dressed up as outright sale and purchase with legal and beneficial ownership of the land passed to the “purchaser”, (ii) invariably with stated consideration purportedly paid by the “purchaser” and acknowledged to have been received by the “vendor” Hau Sun Chiu, but (iii) invariably with no consideration having been paid as a matter of fact.

	Date	Document
(a)	Late Apr 2012	1st Will of Hau Sun Chiu (2-3 weeks before the 2nd Will)
(b)	2 May 2012	Quotation for boundary survey of Hau Fook Sui’s land
(c)	11 May 2012	2nd Will of Hau Sun Chiu
(d)	27 Jun 2012	Application for Grant of estate of Hau Fook Sui
(e)	27 Jul 2012	Letters of Administration of estate of Hau Fook Sui
(f)	1 Aug 2012	Assignments for Lots 1644, 214RP, 187 and 191 (of Hau Fook Sui’s estate) signed for transfer to Hau Tak Cheung (Lots 1644 and 187) and Hau Wing Yin (Lots 214RP and 191), with no consideration paid
(g)	Before 19 Aug 2012	Assignment for Lot 216 (of Hau Fook Sui’s estate) signed for “sale” to Hau Tak Cheung, with consideration stated as “paid”, but in fact not paid at all
(h)	Late Sep 2012 onwards	Hau Sun Chiu stayed in hospital until his death
(i)	25 Sep 2012	Assignments of all 5 pieces of landed properties of Hau Sun Chiu on same day, all with consideration stated as “paid”, but in fact not paid at all – Lot 1486BRP (House G2A) and adjoining garden land Lot 1486B2 to Hau Wing Yin 1/3 interests in Lots 207 & 833 to Hau Tak Cheung Tsung Un 2 (House G6) to Hau Chun Yin (son of Hau Tak Cheung)
(j)	1 Oct 2012	Assignment of Lot 69 (of Hau Fook Sui’s estate) to Hau Tak Cheung signed at the hospital, with consideration stated as “paid”, but in fact not paid at all
(k)	9 Oct 2012	Hau Sun Chiu died

70.  The common theme of the case put forward by both Hau Tak Cheung and Hau Wing Yin for all these transfers of land, (i) owned personally by Hau Sun Chiu and also (ii) owned by Hau Fook Sui but held by Hau Sun Chiu as the administrator, is that despite the transfers and the purport of the documents effecting the transfers, they did not acquire any beneficial interests in any of the land so transferred – (a) the land personally owned by Hau Sun Chiu remained beneficially owned by him before his death and by his estate after his death, and (b) the land owned by Hau Fook Sui remained beneficially owned by the beneficiaries of Hau Fook Sui’s estate. 

71.  However, as correctly submitted by the plaintiffs, this allegation of the defendants is completely contradictory to all of the contemporaneous documents and also the contemporaneous conduct of the defendants.

D1.5.1   The assignments

72.  What the assignments purport to do is to pass beneficial interest in the respective properties to the assignee.

(1) The Assignments of the land owned by Hau Fook Sui were all stated to be ordinary outright sale by the administrator with consideration duly paid and received. 

(i) They invariably contained the Recital (4) that “The Vendor as such administrator … in the course of administration of the estate of the Deceased has agreed with the Purchaser for the sale of the Property for the price of HK$......”. 

(ii) Their Clause 1 invariably provided that “in consideration of the sum of Hong Kong Dollars …… paid by the Purchaser to the Vendor (receipt whereof is acknowledged) the Vendor as the personal representative of the estate of the Deceased and in the course of administration of the estate of the Deceased Assigns to the Purchaser the Property ……”. 

(2) Similarly, the transfers of the land owned by Hau Sun Chiu were also stated to be ordinary sale and purchase.

(i) Memoranda for Sale and Purchase were prepared and signed for the transfer of the 2 houses.

(ii) Clause 1 of the assignments invariably provided that “in consideration of the sum of Hong Kong Dollars …… paid by the Purchaser to the Vendor (receipt whereof is acknowledged) the Vendor as the Beneficial Owner Assigns to the Purchaser the Property ……”.

(3) Hau Wing Yin was no doubt heavily involved in all of these transfers, as the transferee herself in some cases, and as witness to the signatures of Hau Tak Cheung and/or Hau Sun Chiu in other cases, and also as the solicitor certifying the Memorial for registration of each of the instruments.  There can be no doubt that she knew of the true purport of the documents signed and she participated in all of the transactions, but she now seeks to say none of those documents meant what they say. 

(4) Though Hau Wing Yin in her witness statement said that she had explained to Hau Sun Chiu that the transfers of the 6 Properties of Hau Fook Sui “did not involve payment of money”, and “were not purchases in personal names of Hau Wing Yin and Hau Tak Cheung”, but “were transfers for her and Hau Tak Cheung to manage the land”, the assignments were all to contrary effect.  Hau Wing Yin, when getting Hau Sun Chiu to sign the assignments, was making Hau Sun Chiu to say to the beneficiaries through the documents that he had “sold” all the 6 Properties to Hau Wing Yin and Hau Tak Cheung and he had also “received” the stated consideration. With consideration paid and received, the beneficial interest would no doubt pass.

(5) Any assertion of the defendants that the beneficial interests in the land were not intended to pass to them despite the assignments simply cannot be true.  The wordings of the assignments could be used to defeat all allegations against the defendants that they were just bare trustees. 

73.  I agree that if what was intended were really that neither Hau Wing Yin nor Hau Tak Cheung were to obtain any beneficial interest in the respective properties assigned to them, there is, and indeed can be, no valid explanation as to why those transfers could not be and had not been structured as transfers to them as “trustees” for the estate of Hau Fook Sui in respect of the 6 Properties (or as “trustees” for Hau Sun Chiu in respect of Hau Sun Chiu’s own properties).  Even if they, for whatever reason, did not wish to have the transfers structured as “trusts” so that when the transfers were registered the public would learn of the fact that the beneficial interests remained with the estate of Hau Fook Sui (or with Hau Sun Chiu for Hau Sun Chiu’s own land), there is, and there can be, no valid explanation why they could not have prepared and signed, and provide the relevant beneficiaries with copies of, declarations of trusts declaring that they were only holding the respective properties on trust for them.  Hau Wing Yin, as a solicitor, must know that this could easily be done.  Though such “secret” unregistered trust would be null and void as against subsequent bona fide purchaser, they would nevertheless be binding on Hau Tak Cheung and Hau Wing Yin.  So long as they “honour” their promise of not selling the properties, the beneficiaries would be safe.  By so doing, the beneficiaries would be properly appraised of the transfers and the purpose of the transfers, and offered protection.  That, of course, was never done, obviously because they would not have wanted the beneficiaries to be alerted.

74.  Alternatively, the transfers of Hau Fook Sui’s land could have been made to the joint names of Hau Wing Yin / Hau Tak Cheung with representatives from the 1^st / 3^rd “fong”.  The evidence of Hau Wing Yin is clearly that at least Hau Yuen Kwong (who has been living at the house behind Hau Sun Chiu’s House G2A and who had been apprentice together with Hau Tak Cheung) could be easily contacted at the material times. Indeed, Hau King Wai was also readily available at the time.  Any attempt to shift the blame to Hau Sun Chiu, who of course is dead and unable to refute it, to say that he only trusted Hau Wing Yin and Hau Tak Cheung is futile.  By transferring the land to the joint names of Hau Wing Yin / Hau Tak Cheung and a representative from the 1^st and/or 3^rd “fongs” would be just as safe and secure.  The important thing is that by doing so, the beneficiaries would all be in the know, and the transfers could then be said to be “performed above board” (as the defendants’ solicitors sought to say in their letter of 31 May 2013).  I agree that by choosing to transfer the 6 Properties to Hau Wing Yin and Hau Tak Cheung in secrecy as further described below, they did it otherwise than above board.

D1.5.2   Secrecy

75.  Not only that the beneficiaries were not provided with any declaration of trust nor were any representative from the other “fongs” made jointly a transferee, the beneficiaries have in fact been kept in the dark about the defendants’ dealings with the land of Hau Fook Sui. There can be no valid explanation for keeping the beneficiaries in the dark, unless there was ulterior motive behind the transfers to Hau Tak Cheung and Hau Wing Yin.

(1) In their evidence, the defendants sought to describe how much concern they had about having to find the land which they say they had no idea where they were, and having found the land they had concern about the status of the occupant of Lot 69, and their having concern about having to have litigation and to contribute costs in the litigation for Lot 69. 

(2) It is, however, strange that they never told Hau Yuen Kwong, who has always been living in the village and at the house right behind that of Hau Sun Chiu, about all these, or to seek his assistance in finding the land at least.  Neither was Hau King Wai, who by 2012 has already been staying in the village for a large part of the year, been told about these.  The more they allegedly were worried about the land or litigation on the land, the stronger the reason for them to alert the beneficiaries of the same. 

(3) Further, the application for the Grant of Hau Fook Sui and most importantly the transfers of the 6 Properties had all been kept secret from the 1^st “fong” and the plaintiffs.  More so, it would appear that Hau Tak Yan was also kept in the dark in relation to the transfers of the 6 Properties.

(4) It is not even the pleaded case of the defendants that the plaintiffs had been informed of the transfers – what is pleaded is only that Hau Sun Chiu had informed Hau Yuen Kwong that “he had instructed [Hau Tak Cheung] to be in charge of the handling of” Hau Fook Sui’s estate, which is way short of saying that he had informed Hau Yuen Kwong of the transfers of the 6 Properties.  It is clear from (i) the lack of refutation to Hau King Wai’s complaint in the 2^nd Meeting about lack of notice to the beneficiaries of the transfers; (ii) the lack of response to the plaintiff’s former solicitors’ complaint about the plaintiffs having been kept in the dark about the application for Hau Fook Sui’s grant and also the transfers;(iii) the timing when Hau Wing Yin had allegedly asked Hau Sun Chiu to inform the 1^st “fong” (ie when the Letter of Authorization was signed, which did not even authorize them to hold the land) and (iv) Hau Wing Yin only alleged that she had asked Hau Sun Chiu to tell the 1^st “fong” that they would “接手”, that any suggestion by Hau Wing Yin that Hau Yuen Kwong had been told of such transfers by Hau Sun Chiu is simply not true. 

(5) The suggestion that it was for Hau Sun Chiu to do the contact is just a convenient excuse put up by the defendants to lay the blame with the dead.  As Hau Wing Yin acknowledged, she and Hau Tak Cheung would have no difficulty to contact Hau Yuen Kwong and indeed paragraph 8 of the Letter of Authorization contemplated that they would be contacting the beneficiaries as well, and as a solicitor she clearly knew that it was very important that she did write to inform the beneficiaries. 

(6) But, they did not tell the beneficiaries of the transfers, and the transfers were eventually discovered by the plaintiffs themselves in March 2013.  To effect the transfers with such secrecy, their ulterior motive is plain.

D1.5.3   Attempt to mislead the Plaintiffs

76.  The secrecy with the application for the Grant of Hau Fook Sui’s estate (rather than simply having succession of the land by way of registration) and the secrecy with the transfer of all of the 6 Properties to Hau Tak Cheung and Hau Wing Yin as purported sale and purchase (rather than by way of trust or to also representative of the other “fongs” jointly) were further compounded by the deliberate attempt by Hau Wing Yin to misguide the members of the 1^st “fong” in both the 1^st Meeting (on 25 April 2013) and the 2^nd Meeting (on 15 May 2013) after the plaintiffs had discovered and complained about the transfer of the 6 Properties to Hau Wing Yin and Hau Tak Cheung without their prior knowledge.  As submitted by the plaintiffs, the nefarious intent of the defendants is evident.

(1) Before those meetings, Hau Wing Yin had already read the Writ in HCA 562/2013, and must have known very well that the only complaint of the plaintiffs at the time was in relation to the transfers of the 6 Properties to Hau Wing Yin and Hau Tak Cheung.

(2) It is clear that in the 1^st Meeting, which was attended by Hau Yuen Kwong, the defendants sought to mislead him by, for example,

(i) Hau Wing Yin scolding her uncle Hau Yuen Kwong as being crazy “白癡” to sue Hau Sun Chiu in HCA 562/2013, when the action was well justified – Hau Wing Yin’s allegation that the plaintiffs should have issued a pre-action demand instead of the writ is clearly nonsense, for the simple reason that the issue and registration of the writ was to prevent any further dealing with the land.  Any pre-action demand would have defeated the purpose.  Hau Wing Yin as a litigation solicitor must know that and she was only pretending to be naive in giving evidence in court.

(ii) Hau Wing Yin misled Hau Yuen Kwong that a consideration would have to be stated for any transfer – but, plainly that is untrue to anyone with legal knowledge;

(iii) Hau Wing Yin distracting the focus of the matter by talking about the Letter of Authorization and boundary survey, when she knew full well that neither of which had anything to do with the plaintiffs’ complaint about transfer of the 6 Properties to Hau Wing Yin and Hau Tak Cheung;

(iv) Hau Wing Yin pretending not to understand, and therefore refused, Hau Yuen Kwong’s request to be “司理人” in respect of Hau Fook Sui’s land;

(v) Hau Wing Yin misleading Hau Yuen Kwong about the reason for the transfer of the land of Hau Fook Sui by putting up the excuse of worry of having to litigate with Cheung Kong Holdings “長實” over Lot 69 because Cheung Kong Holdings might claim “adverse possession” over Lot 69 – but, she as a solicitor with experience in adverse possession litigations would know full well that no developer would make such claim for “adverse possession” (though laymen may easily be scared by having to litigate with developers and may readily be misguided);

(vi) Hau Wing Yin bringing in the “entitlement” of Hau Yuk Chun and Hau Ping Ho to the estate of Hau Fook Sui, to create difficulty for Hau Yuen Kwong, when she knew very well that only the sons would be entitled (and she was obviously not telling the truth in evidence when she said that she was then talking about the aunts’ entitlement to Hau Look Shun’s share in Hau Fook Sui’s estate);

(vii) When Hau Wing Yin brought into issue the “errors” in the affidavit for the grant of Hau Look Shun’s estate, she was obviously trying to complicate the matter – the meeting had nothing to do with Hau Look Shun’s estate, there was no need or reason to raise that at all.

(3) Having managed to persuade Hau Yuen Kwong to get the plaintiffs to suspend further progress with HCA 562/2013 in the meantime, which the plaintiffs did by withholding service of the Writ, Hau Wing Yin tried to play the same trick in the 2^nd Meeting by trying to bring out misleading and distracting messages to muddle things up and to create difficulties for the plaintiffs.  What she had and had not done in the 2^nd Meeting is now clear from the agreed transcripts of the recording of the meeting.  As Hau Wing Yin confirmed in her oral evidence, she knew very well that Hau King Wai’s complaint in the 2^nd Meeting was the transfer of the 6 Properties without the plaintiffs’ knowledge and that Hau King Wai required that the land be given back by Hau Wing Yin and Hau Tak Cheung to all beneficiaries of Hau Fook Sui’s estate.  Yet, Hau Wing Yin, making use of her status as a solicitor or otherwise, sought to raise all sorts of extraneous and irrelevant matters to distract the focus and to misguide the 1^st “fong”, by, for example: –

(i) Seeking to raise the issue about “errors” in the grant of Hau Look Shun’s estate at the beginning of the meeting, suggesting it may have to redo all that was done with Hau Look Shun’s estate etc, apparently to threaten Hau King Wai into believing that the matter was very complicated and to shift the focus of the meeting;

(ii) Lying about the number of pieces of land transferred to Hau Wing Yin and to Hau Tak Cheung;

(iii) Raising, and insisting on reading out the Letter of Authorization, when it had nothing to do with Hau King Wai’s complaint at all;

(iv) Misrepresenting that Hau Sun Chiu was at the time of the Letter of Authorization the “lawful” administrator of the estate of Hau Fook Sui – but plainly he was not at the time;

(v) Misrepresenting that Hau Sun Chiu had the power to so transfer the land without notifying the beneficiaries, because he was a son of Hau Fook Sui – but plainly he had no such power to purport to sell without receiving consideration;

(vi) Misleadingly putting up the excuse of “having no time”, to explain why Hau Yuen Kwong or Hau Tak Yan had not been asked to take up some of the land, when she said it required more than 1 person to take up the transfers in order to save stamp duty – but, Hau Wing Yin in Court is seeking to say that Hau Sun Chiu only trusted her and Hau Tak Cheung;

(vii) Putting up the false reason / creating a false impression that the transfer was to facilitate the sale of the land when the negotiations with the developers were maturing, for fear of Hau Sun Chiu no longer being able to sign the documents and the difficulty of having to find all beneficiaries to sign on the sale of the land – but, the defendants at trial is now saying that the land were never intended to be sold at all, and that was why they had to do the acrobatic move to transfer the first 5 lots in order to protect Lot 69;

(viii) Pretending not to know how to give back the land to the beneficiaries – but, any lawyer would know that it could easily be done by a declaration of trust;

(ix) Disingenuously pretending that she needed to know who were the beneficiaries of Hau Fook Sui for giving back the land – but, that plainly is not necessary, one can simply make a declaration of trust in favour of the beneficiaries of the estate without naming who specifically; and

(x) Pretending, and misrepresenting, that there were 2 “interpretations” about who were the beneficiaries of the estate of Hau Fook Sui, ie sons only or sons and daughters as well (when she knew full well that only the sons were entitled).

D1.5.4   Refusal to return the 6 Properties

77.  What is also important is that despite the clear demand by Hau King Wai in the 2^nd Meeting that Hau Wing Yin and Hau Tak Cheung must give back the land to the beneficiaries of the estate of Hau Fook Sui, the hard fact is that they never did so. 

(1) Hau Wing Yin refused to promise to do so at the 2^nd Meeting, on the pretext that there was a “technical issue”, though it is difficult to see what that “technical issue” could be when one could simply make a declaration of trust to have the 6 Properties held on trust for the lawful beneficiaries of the estate of Hau Fook Sui (even if one were to have any doubt about who exactly they are).  Hau Tak Cheung’s explanation that they did not know who the “大眾” were is plainly nonsense.  Hau Wing Yin actually accepted in cross-examination that the exact identity of the beneficiaries would not have to be known, and there was actually no “technical issue” at all.

(2) The other excuse put up repeatedly by Hau Wing Yin in the witness box – that she thought that all the 4 conditions raised by Hau King Wai in the 2^nd Meeting was a “package” – is equally nonsense and is clearly an afterthought.  At no time, whether in the meeting or in the subsequent solicitors’ correspondence, did the defendants say the conditions were unreasonable and suggested only to return the land and not to comply with the other conditions.  Hau Wing Yin cannot justify in cross-examination why the conditions were unreasonable.

(3) It is no answer to say that the land prices had increased in 2013, and the transfer of the land would incur stamp duty – it was the defendants’ own making in the first place to have the 6 Properties transferred to themselves wrongfully and surreptitiously.  After all, on Hau Wing Yin’s own evidence, the stamp duty involved was at most HK$110,000.  

(4) The purported offer “to re-assign the legal title of the said 6 pieces of land to the Ancestor’s Estate in a manner that would not require penal levels of stamp duty” in the letter from the defendants’ solicitors dated 31 May 2013 is meaningless when even Hau Wing Yin herself cannot explain what that meant and how that could be achieved. 

(5) In this connection, it is important to bear in mind that the very reasonable invitation by the plaintiffs’ former solicitors on 7 August 2013 for confirmation that the defendants “will give an irrevocable undertaking to set aside all the transactions of the land under the estate [of Hau Fook Sui] made in their favour and return all properties concerned back to the estate of the Deceased irrespective of who should be the beneficiaries” was simply “rejected” by the defendants on 9 Aug 2013 without any explanation or counter-proposal.  Hau Wing Yin has no explanation to offer for why that very reasonable request of the plaintiffs was being rejected.

(6) From the foregoing, it is plain that the defendants never had any intention to return the land to the lawful beneficiaries of Hau Fook Sui – though up till now they seek to say that they were only holding the land for the benefit of the beneficiaries.

D1.5.5   Evasive about no consideration paid

78.  I agree with the plaintiffs that the evasiveness of the defendants in relation to whether they had paid the consideration as stated in the assignments for the 6 Properties is also telling. 

(1) It is noteworthy that in the 2^nd Meeting, the defendants did not even tell the plaintiffs that they had not paid the consideration as stated in the assignments for the 6 Properties.

(2) By a letter dated 21 May 2013 from the plaintiffs’ former solicitors Messrs M L Tam & Co to Hau Wing Yin’s firm, Messrs Reimer & Partners, who were the solicitors effecting the 6 assignments, the plaintiffs squarely raised the question about the “payment terms and payment manners of” the 6 assignments for the 6 Properties, and “whether payments have been made to the Administrator or his solicitors” etc.  Those are questions which the plaintiffs, as beneficiaries, were perfectly entitled to ask.

(3) That was however given a long 7-page response from the defendants, through their solicitors dated 31 May 2013, asking the plaintiffs “please will you explain in full, the basis upon which your clients claim that they are the beneficiaries of the Ancestor’s Estate and provide to us all supporting contemporaneous documents, evidence or statements to support your client’s assertions, failing which your clients’ requests as per your said letter will not be entertained”.  Hau Wing Yin and Hau Tak Cheung knew perfectly well who the clients of Messrs. M L Tam & Co were, they knew perfectly well that they were the sons of Hau Yuk Chiu, who in turn was the son of Hau Fook Sui.  It is no answer for Hau Wing Yin to say that at the time of the letter, they were already considering the issue of “fan ka”, when they did not get anywhere close to saying it in the letter.  Her suggestion that she did not raise it because she wanted to have the matter settled with the plaintiffs at that stage is even more ridiculous, when she was putting up such a challenge to the plaintiffs’ status as beneficiaries which could only be even more provocative.  In that letter, the Defendants did not disclose squarely that no consideration had been paid, but chose to say rather ambiguously that “all 6 pieces of land were assigned on a nominal basis for the purpose of holding such land on trust for the Ancestor’s Estate only”.

D1.5.6   Schedule of Property in Hau Sun Chiu’s Grant

79.  Further, the Schedule of Property attached to the Grant of Probate of Hau Sun Chiu (Exhibit P14), which was prepared by Hau Wing Yin and by which Hau Tak Cheung applied for the grant, unequivocally shows that neither of them recognize their avowed case of their merely holding the land transferred to them by Hau Sun Chiu between August and October 2012 as bare trustee of the legal title.  The Schedule of Property contains no reference whatsoever to (i) Hau Sun Chiu’s beneficial interests in the land owned by himself personally (namely the 5 pieces of landed property transferred to Hau Wing Yin, Hau Tak Cheung and Hau Chun Yin on 25 September 2012); and (ii) Hau Sun Chiu’s beneficial interests in the estate of Hau Fook Sui (namely the 6 Properties).  If the Defendants’ story were true, there could not have been the omission of Hau Sun Chiu’s beneficial interests in both his own land and in Hau Fook Sui’s land from the Schedule of Property. 

(1) I agree that Hau Wing Yin’s explanation for not having included Hau Sun Chiu’s interest in the estate of Hau Fook Sui in the Schedule of Property of Hau Sun Chiu is complete nonsense, and serves only to expose the complete lack of credibility on the part of Hau Wing Yin. 

(i) Her first explanation was that she did not know what should be the share, and it could be 1/3 (namely the 3 sons to share) or 1/2 (namely only Hau Sun Chiu and Hau Look Shun to share, with the alleged “fan ka”).

(ii) However, when pointed out to her in cross-examination that even in the 2 meetings in 2013, there was no question between 1/3 and 1/2, though there was purportedly a question between 1/3 and 1/5 (and which “interpretation” of 1/5, with daughters also entitled, was plainly disingenuous), she came up with the excuse that she did not quite know how to do the Schedule of Property. 

(iii) This explanation does not help either, because on her own case, before she dealt with the application for the Grant of Hau Sun Chiu, she already knew that Hau Look Shun’s interest in the estate of Hau Fook Sui ought to be put back into the Schedule of Property of Hau Look Shun.

(iv) In fact, even if she really had any doubt about the exact share, the simplest thing to do was to state Hau Sun Chiu’s interests in the estate of Hau Fook Sui, without stating the exact share or saying that the share was uncertain.

(v) She chose not to put in any reference to interests in Hau Fook Sui’s estate because she wanted to give everybody, including those of Hau Sun Chiu’s family, an impression that Hau Fook Sui’s land had all been “sold” to Hau Tak Cheung and Hau Wing Yin.

(2) Her explanation for not including Hau Sun Chiu’s own beneficial interests in his own land in the Schedule of Property is equally nonsensical, and equally exposes the lack of credibility on her part.

(i) She first said she had not thought of doing so.  That could not be a truthful answer, given her explanation about why she had not included Hau Sun Chiu’s interests in Hau Fook Sui’s estate.

(ii) Then, she said she was only dealing with the bank accounts and securities.  That is complete nonsense.  The form of the Schedule of Property, by items 8 and 12, plainly expressly called for such information to be included.

(iii) Later on in her evidence, she said it could be added subsequently, if missed out, and she had not thought about it at that time.  Again, that could not be true, given the thought she allegedly had given to Hau Sun Chiu’s interests in Hau Fook Sui’s estate.

(iv) Her answer was as though she did not know she had to include in the Schedule Hau Sun Chiu’s beneficial interests in his own land.  That plainly is contrary to her explanation of “not knowing the exact share” as the reason for not including Hau Sun Chiu’s interests in Hau Fook Sui’s estate.

(v) Then she said she forgot to write it there, though she did remember about Hau Sun Chiu’s beneficial interests in his own land.  That is plainly untrue.

(3) With Hau Sun Chiu’s beneficial interests in his own land and Hau Sun Chiu’s beneficial interests in Hau Fook Sui’s land having been excluded from his Schedule of Property, the falsity of the defendants’ case that they were only holding the 6 Properties (and also Hau Sun Chiu’s own land) as bare trustees for the beneficiaries of the estate of Hau Fook Sui (and for Hau Sun Chiu and his estate) is plain beyond doubt.  Their conduct shows that they simply did not recognize the beneficial interests of the beneficiaries whom they now say they were holding the legal title for.

D1.5.7   Hau Wing Yin’s Public Bank mortgage & response to Rating & Valuation Department

80.  The defendants’ case that the properties of Hau Sun Chiu which were transferred on 25 September 2012 were all still beneficially owned by Hau Sun Chiu is further contradicted by the Public Bank Mortgage, whereby Hau Wing Yin (being a solicitor by profession) purported to “charge and assign as beneficial owner” all her interest in House G2A to the bank, and further represented and warranted to the bank that she was “the sole beneficial owner” of the property and had “given to [the bank] all information relevant to [their] decision to lend any money” to her.  Indeed, she could offer no explanation for such false covenants, representations and warranties to the bank. 

81.  Hau Wing Yin’s responses to the Rating and Valuation Department, when she was being challenged by the Rating and Valuation Department about the value of House G2A transferred to her on 25 September 2012, other than being fraught with various misleading statements to the government (which, I agree, reflects the propensity of Hau Wing Yin to mislead and lie when to do so is thought to be to her advantage), also shows that she was not really just holding the property for Hau Sun Chiu, when, for example, she said she had “purchased” the property, and that she had been “advised the consideration that [Hau Sun Chiu] and I agreed was just and fair” and “I fully trust the consideration given [sic] the Agreement of Sale and Purchase is satisfactory to reflect the full value of the interest passing”.

D1.6   Explanations for transfer of Hau Sun Chiu’s own land – all invalid

82.  The explanations put up by the defendants for the transfer of Hau Sun Chiu’s own land on 25 September 2012 were that: –

(1) For the transfer of House G2A to Hau Wing Yin it was to facilitate a mortgage of the house by her to generate funds for renovation of House G2A and also for rebuilding House G6, and with the transfer of House G2A the land next to it was to go with it even though the land was never contemplated to have to be mortgaged by her.

(2) For the transfers of Hau Sun Chiu’s 1/3 interests in Lot 207 and 833, and also House G6, it was Hau Sun Chiu who wanted to know who was to manage the land for him after his death.

83.  All these explanations simply cannot be true, and this goes to the credibility of the defendants. 

(1) The alleged arrangements were totally different from that stated in Hau Sun Chiu’s 2^nd Will made on 11 May 2012. 

(2) The arrangement for “mortgage” of House G2A was said to have been reached before Ching Ming in April 2012, ie shortly before the 2^nd Will.  Though Hau Wing Yin initially said that the arrangement was reached after the 2^nd Will, on further cross-examination she changed her case and confirmed that it had been agreed before.  But, the arrangement was not reflected in the 2^nd Will, which Hau Wing Yin prepared for Hau Sun Chiu within weeks after the arrangement had allegedly been agreed. 

(3) With the 2^nd Will of Hau Sun Chiu done, and with Hau Tak Cheung having been appointed executor to deal with the estate, there was no need for the transfers of the other land of Hau Sun Chiu anyway.  He knew very well who was to deal with the same for him after his death.

84.  Further, in relation to the transfer of House G2A and the adjoining land to Hau Wing Yin,

(1) There was also no explanation given as to why it would wait for some 5 months before the transfer was effected if it were really intended to be transferred to facilitate the mortgage.  What if Hau Sun Chiu passed away in the meantime?

(2) There is no logical reason why House G2A had to be transferred to Hau Wing Yin in order to get a mortgage from the bank.  Logic dictates that banks would prefer an arrangement of Hau Sun Chiu being the mortgagor / guarantor with House G2A as security and Hau Wing Yin as the borrower, so that the bank would have recourse to 2 persons in case of default (and in this case possibly recourse to further land of Hau Sun Chiu as well). It would appear to be the evidence of Hau Wing Yin that the bank was concerned about the age of the house; and if that were the case the transfer of the house to Hau Wing Yin would not have helped with securing a mortgage.  The transfer of House G2A was plainly not required for facilitating any “mortgage”. 

(3) It is important to note that with such unnecessary transfer, Hau Wing Yin exposed herself to liability for a lot more stamp duty.  Hau Wing Yin, as a solicitor, must be well conscious of that – stamp duty concern was indeed why she had so “structured” the stamping of the 6 assignments for Hau Fook Sui’s 6 Properties.  Hau Wing Yin must have alerted to the possibility that the transfer of House G2A at the purported consideration of HK$1.5 million was at undervalue.  This is plain from the fact that she was allegedly contemplating to have the house mortgaged to secure a loan of HK$1.5 million for renovating House G2A and of HK$800,000 for rebuilding House G6 – She knew that House G2A was worth much more than HK$1.5 million.  It transpired that the Collector of Stamp Revenue did challenge the consideration and initially considered that the value of House G2A should be HK$4.3 million; and Hau Wing Yin after putting up various false representations to the Rating and Valuation Department, readily accepted the value of the house to be HK$3.8 million “having taken into account the costs of the repairing work”.  As a result of that, she would have to pay extra stamp duty of some HK$104,400 (being HK$3.8 million x 2.75% - HK$100 paid).  One must not forget that on her case, the house would eventually have to be transferred back to the beneficiaries of the estate of Hau Sun Chiu; and if that be so that transfer would again attract substantial stamp duty assessed on the enhanced value of the house after the renovation. That would be wholly unreasonable, especially when she said in evidence (in relation to the stamp duty payable for Hau Fook Sui’s 6 Properties) that to her, stamp duty of HK$110,000 was a lot of money.

(4) Further, there is absolutely no reason why the land next to House G2A would have to be transferred to Hau Wing Yin as well, when it is admitted by Hau Wing Yin that the arrangement never contemplated that the land would be mortgaged as well.  The land was and is apparently used as the garden for House G2A; the transfer of the land together with the house was clearly a move to benefit Hau Wing Yin.

85.  The explanations offered by Hau Tak Cheung for the transfer of the 1/3 interests in Lot 207 and Lot 833 to him, to facilitate his management of the land for Hau Sun Chiu, are equally unbelievable.  The 2^nd Will had already named Hau Tak Cheung as the executor.  He would be entitled to “manage” them anyway as the executor, the transfer would not have made it easier for him to “sign document” in relation to the land.  Neither was the transfer required to enable him to pay government rent for the land.  The purported reason of making it easier to deal with in case of resumption is nonsensical when there was no imminent resumption and Hau Tak Cheung was the executor anyway.

86.  It is clear that there is no truth in the defendants’ explanations for the transfers of Hau Sun Chiu’s own land to them shortly before Hau Sun Chiu’s death.  What they intended to do was to take away Hau Sun Chiu’s land, together with Hau Fook Sui’s land held by Hau Sun Chiu as administrator.

D1.7   Explanations for transfer of Hau Fook Sui’s land – all invalid

87.  Similarly, I agree that when the transfer of the 6 Properties were made in August to October 2012, what the defendants intended was also to take away Hau Fook Sui’s land from the beneficiaries.

88.  According to the evidence of the defendants,

(1) The assignments for the first 4 lots, namely Lots 1644, 214RP, 187 and 191, were apparently signed on 1 August 2012; whereas that for the 5^th lot, namely Lot 216 was signed sometime around a week before 19 August 2012 (before Hau Tak Cheung went on his trip to Europe on 19 August 2012); all allegedly at Hau Wing Yin’s solicitors’ firm.

(2) The assignment for the 6^th lot, namely Lot 69 was signed on 1 October 2012 at the hospital. 

89.  In a nutshell, the story offered by the defendants when giving evidence in court about the transfers of the 6 Properties to Hau Tak Cheung and Hau Wing Yin was that: –

(1) It was initially decided that the first 5 lots would be transferred, because when they did the survey of the lot boundary of the land, the first 5 lots were found to be “safe”, but the 6^th lot was found to be “unsafe”, because it was occupied by somebody as a car park but the identity of the occupant being then unknown.  Therefore, it was decided that the first 5 lots be transferred in order to avoid liability for a potentially astronomical bill of costs to the opposing party if they were to lose the litigation over Lot 69 with “Hilder”, being a subsidiary company of Cheung Kong Holdings, who may take enforcement action against the other 5 lots in satisfaction of the bill of costs.

(2) As to the 6^th lot, Hau Tak Cheung said in court that after his return from the European trip, he found out that Lot 69 was occupied by a “Man Pak”, not Hilder; and on telling Hau Sun Chiu about that Hau Sun Chiu said he knew “Man Pak” and was confident “拍心口” that the village chief could successfully get the land back from “Man Pak” for him.  Therefore, Lot 69 was also transferred for convenience of management and because of the then bad health condition of Hau Sun Chiu.  

But, these are not the reasons pleaded in the defendants’ pleadings.

D1.7.1   The first 5 lots

90.  The story of Hau Wing Yin and Hau Tak Cheung is indeed very strange.  They are in effect saying that because they wanted to protect or they did not want to lose the remaining 5 “safe” pieces of land, they had to have all the 5 pieces of land transferred to themselves, away from the estate of Hau Fook Sui.  However, as demonstrated below, working on the alleged state of mind of the defendants at the material time, it would have been obvious that to “protect” the remaining 5 “safe” pieces of land, it was absolutely unnecessary to transfer them away; and instead what should have been transferred away was Lot 69 itself, and Lot 69 only.  Strangely though, Hau Wing Yin initially said that she had never considered this option of only transferring Lot 69, though she subsequently changed her evidence to say that she did consider it herself.

91.  The purported need to transfer away the first 5 lots in order to protect the estate is nothing but a self-serving excuse recently fabricated because: –

(1) That was not what was pleaded in the Defence and Counterclaim.

(2) As confirmed by Hau Wing Yin, the explanation offered in court was not set out in her witness statement.

92.  The whole case of the defendants for the need for the transfer of the first 5 lots is premised on a potential litigation with a developer over Lot 69, wherein the developer would claim “adverse possession” of Lot 69.  While that “threat” of liability for an astronomical bill of costs when litigating with a developer and the “threat” of litigation with a developer over “adverse possession” of land in the New Territories would certainly have impact on any layman, Hau Wing Yin, as a solicitor with experience in handling adverse possession cases, must know very well that there would not be any risk of litigation with a developer on Lot 69.  She knew very well that the legal title to Lot 69 was held by Hau Fook Sui, not the developer.  Any lawyer would know very well that developers would not fight for an adverse “possessory title”, for the simple reason the developer would not be able to give “good title” to any property built on the land.  The adverse possessory title would rather be a liability or burden to the other land around it which the developer had good title, if the developer were to develop the land together.  In the circumstances, I agree that the so-called risk of litigation with developer over Lot 69, and therefore the potential liability for costs on losing the litigation, is illusory; and is nothing but an ill-thought excuse put up by Hau Wing Yin to seek to explain away the transfer of the first 5 lots when she has no better explanation to offer.

93.  Furthermore, Hau Wing Yin, as a solicitor, must also know very well that such purported transfer of the first 5 lots, without any payment of consideration, would not help to avoid enforcement action against the 5 lots if the estate were to lose the litigation and would have to bear a heavy bill of costs.  This is simply because such transfers are clearly fraudulent conveyance and voidable dispositions under section 60 of the Conveyancing and Property Ordinance. 

(1) Her denial that they were not fraudulent conveyance is disingenuous. 

(2) If, as she said, when the creditor was knocking at the door for payment, she and Hau Tak Cheung would pay up the creditor; then there would not have been the need for the transfer in the first place.

(3) However, she was clearly not prepared to confirm that she would be paying up whatever may be due to the creditor.  On her case, when the creditor came up, she and Hau Tak Cheung would pretend that the assignments were “genuine” sale and purchases and would then pay up the stated consideration of up to HK$3.9 million (apparently being the total amount of the stated consideration for the first 5 lots) pretending that that was the money received by the estate in the sale of the 5 lots, then it was clearly a fraudulent conveyance.  In so doing, they put the estate at risk of bankruptcy.

(4) Indeed, the transfers being voidable dispositions would be exposed as soon as the creditor take the step of cross-examination of judgment debtor.  But, Hau Wing Yin, though being a litigation lawyer, pretended not to know of that procedure. 

(5) The exercise of transferring the first 5 lots to avoid creditor would obviously be a futile exercise.  I agree that it is a completely untruthful explanation made up by the defendants in an ill-attempt to justify their wrongful conduct.

94.  Further, the defendants’ own case about why the first 5 lots had to be transferred is wholly unreasonable and inherently unbelievable.  If their concern about litigation on Lot 69 were real, what should have been done was only to transfer away Lot 69, but not the first 5 lots.

(1) The whole plank of their case is the so-called concern about potential litigation on Lot 69 for “adverse possession”.

(2) Hau Wing Yin must know, and it is likely that Hau Tak Cheung should also know, that if the estate of Hau Fook Sui were to lose such litigation, the only piece of land that would be lost would be Lot 69 itself, though the estate would also be liable for costs.

(3) As Hau Tak Cheung recognized, and obviously Hau Wing Yin would know, the estate would not have to litigate if it has no reasonably good case against the adverse possessor.

(4) The whole theme of the defendants’ case is that they wanted to keep the first 5 lots as far as possible, and if necessary would put up money to pay costs on losing the litigation. 

(5) Hau Tak Cheung no doubt realised that for their arrangement to work, when dealing with the creditor, they would have to lie to the creditor about the beneficial ownership of the 5 lots.  He says that he would not tell the creditor about the estate still owning the beneficial interests in the land, and would put forward the stated consideration and use the “cash in books” to pay the creditor.

(6) Hau Tak Cheung says that by putting up the stated “price” or “consideration” in the assignments, there was an “amount in the books”, and therefore limiting the exposure of the estate to the extent of HK$3.9 million. 

(7) Hau Tak Cheung says that the stated price or consideration in the assignments would not be challenged by the creditor because he says that represented the fair market price.  However, the evidence reveals that the market price of the land should at least be in the tune of HK$200 to 300/square foot, the stated price or consideration in the assignments is way short of that.  For that reason alone, the assignments would be open to challenge.

(8) Anyhow, assuming that the assignments did state the proper market value of the land, Lot 69 would only have a market value of HK$100,000.  Indeed, according to Hau Tak Cheung, Lot 69 had the “lowest value” among all 6 pieces of land.  On the defendants’ case, they were prepared to put up the amount of HK$3.9 million stated in the assignments to compensate the adverse possessor of Lot 69 for the costs.  On Hau Wing Yin’s estimate, the litigation on Lot 69 would cost the estate HK$1.5 million (in the District Court) and would be up to HK$3 million (if the matter were to go on appeal).  There then comes the question why Hau Wing Yin (who was so conscious about money) and Hau Tak Cheung would have thought it possible at all to risk so substantial costs of HK$5 or 6 million or even more (including the estate’s own costs and the costs payable to the winner) to fight the litigation on Lot 69 which has so low value.  As submitted by the plaintiffs, it simply does not make sense.

(9) In such scenario, when anyway they would have to lie to the creditor about the estate’s beneficial ownership in the land, the simplest thing to do would have been to have only Lot 69, being the allegedly “unsafe” piece of land, transferred to a nominee, be that a man of straw or a one-dollar company, and let the litigation be fought by the nominee.

(10) It is alleged that the transfer was only a sort of precautionary arrangement.  Hau Tak Cheung accepted that at the time of the transfer of the first 5 lots, there was no actual litigation on Lot 69 yet; and there was only fear that there might be litigation in the future.  It was therefore not a case where any writ had been registered against Lot 69 which would impede its transfer.  As such, if there were any genuine concern about the “safety” of Lot 69, they should simply have Lot 69 transferred.

(11) From all the surrounding circumstances, I accept that the apparent real reason why the first 4 or 5 lots were first transferred by way of assignments executed in August 2012 was that by that time, the defendants were pretty sure that those 5 lots were “safe” in the sense that either they had secured tenancy agreements for the land or that the land was vacant. Therefore, they first took the “good and ripen” ones, which came with no “risk” of the transfers and any incidental expenses incurred by them being rendered futile if somebody were to come along to claim adverse possession subsequently.

D1.7.2   The 6^th lot (Lot 69)

95.  I agree that the defendants’ explanation for the eventual transfer of Lot 69 by the assignment signed on 1 October 2012 in the hospital, about a week before the death of Hau Sun Chiu, is self-contradictory and in any event illogical.

(1) In paragraph 52 of Hau Wing Yin’s witness statement, which Hau Tak Cheung adopted, the message was clear that it was only after the demise of Hau Sun Chiu, and at his funeral, that Hau Tak Cheung and Hau Wing Yin came to learn from Hau Chi Keung with surprise – “原來” – that the car park at Lot 69 was operated by Man Pak, but not Hilder.

(2) However, when Hau Tak Cheung gave evidence in court, to explain why Lot 69 was transferred on 1 October 2012, he invented a new story, saying that: –

(i) After his return from the trip to Europe in late September 2012, he came to know that the car park at Lot 69 was operated by Man Pak, not Hilder.

(ii) He therefore talked to Hau Sun Chiu about it, when he visited him at the hospital. 

(iii) Hau Sun Chiu said he knew that person, and suggested Hau Tak Cheung to find the village chief and ask the village chief to introduce Man Pak to him.

(iv) Hau Sun Chiu was confident “拍心口” that the matter could be resolved.

(v) Hau Sun Chiu therefore suggested that Hau Tak Cheung and Hau Wing Yin should handle the matter for him altogether, including Lot 69, and the assignment for Lot 69 was therefore prepared and signed.

(3) The version put forward by Hau Tak Cheung in his oral evidence is completely different from the story told in the witness statement.

(i) The picture painted in paragraph 52 of the witness statement was that the information as to the identity of the occupant of Lot 69 was from Hau Chi Keung at the funeral of Hau Sun Chiu and it came as a surprise to Hau Tak Cheung – “原來”.  But, if his oral evidence were true, he had already known of that beforehand. 

(ii) That is also different from what is stated in paragraph 51 of the witness statement, which painted the picture that Hau Tak Cheung had not been able to find the occupant, but the health of Hau Sun Chiu had deteriorated in late September 2012 and therefore Lot 69 was also transferred to him to manage. 

(4) There can be no, and Hau Tak Cheung has offered no, valid explanation for such significant differences between the witness statement and his oral evidence.

(i) He first sought to say that Hau Wing Yin had alluded to the episode before Hau Sun Chiu’s death in her witness statement, so he did not say it in his own.  That is plainly untrue.

(ii) He then said that he just forgot to mention it when he made the witness statement.  That simply could not be true, when the event was so important – about why Lot 69 was being transferred at such a point in time.

(iii) It was not a case that he had forgot about it, he had in fact spoken contrary to it in paragraphs 51 and 52 of the witness statement.

(iv) With his figurative description of the degree of confidence of Hau Sun Chiu “拍心口”, it could not be true that he forgot to mention it, not to say to speak contrary to it, in his statement.

(5) Hau Tak Cheung has not been able to explain why the transfer would have to be done for the ease of management of Lot 69.  He confirmed that at the time of the transfer, it was not anticipated that there was anything which he could not do with the Letter of Authorization that would require the land to be transferred to his name.  Obviously, other than to sell the land, there was no need for the land to be transferred to him – but, the defendants kept saying that the land was not to be sold.  There was simply no reason for the transfer.

(6) Further, if the transfer were only to facilitate management of Lot 69, it should have been transferred to Hau Tak Cheung as trustee, for which no stamp duty would have to be paid at all.  Hau Wing Yin’s answer that there was worry about Lot 69 having to be involved in litigation, and therefore the transfer was made, is complete nonsense.  She could offer no explanation when it was pointed out that if there were to be litigation on Lot 69, and if the litigation was lost, Lot 69 would be lost anyway and there was no need or no point to hide from the creditor the alleged secret trust over this piece of land.  Further, as Hau Wing Yin acknowledged subsequently, by 1 October 2012, they were confident that there would not be litigation on Lot 69. 

(7) Again, it is clear that it was never the defendants’ intention that Lot 69 be transferred to Hau Tak Cheung to hold on trust for the beneficiaries of the estate of Hau Fook Sui.  Rather, they took that piece of land either because by that time they considered it ripen or because they saw that Hau Sun Chiu would die soon and they just scraped the bottom of the barrel.

D1.8   Conclusion on Breach of Fiduciary Duties

96.  There is no dispute that Hau Sun Chiu owed fiduciary duties to the beneficiaries of the estate of Hau Fook Sui (i) to act in good faith and in the best interests of the estate and/or the beneficiaries, (ii) to exercise care and skill in administering the estate, (iii) not to act so as to place himself in a position in which his personal interests do or might conflict with the interests of the estate and/or the beneficiaries and (iv) not to use or deal with the estate for his own advantage and/or for the advantage of others and to the detriment of the estate and/or the beneficiaries.

97.  Hau Sun Chiu was clearly acting in breach of these fiduciary duties when he transferred the 6 Properties to his son Hau Tak Cheung and his granddaughter Hau Wing Yin by way of the 6 assignments (i) which were dressed up as purported outright sale of the 6 Properties, (ii) with stated consideration purportedly having been paid by Hau Tak Cheung and Hau Wing Yin the receipt of which was purportedly acknowledged by Hau Sun Chiu, (iii) but when in truth and in fact no consideration was in fact paid by either Hau Tak Cheung or Hau Wing Yin, and (iv) that was done without prior notice to or the consent of the other beneficiaries of the estate of Hau Fook Sui such as the plaintiffs.

98.  As set out above, Hau Tak Cheung and Hau Wing Yin had embarked on a scheme to grab for their own personal benefits as much of the land under the control of Hau Sun Chiu, be it under his own personal name or under his control as administrator of the estate of Hau Fook Sui, in the final days of Hau Sun Chiu.  Hau Tak Cheung (as the son of Hau Sun Chiu and also the assignee of 4 of the 6 Properties without paying any consideration therefor) and Hau Wing Yin (as a solicitor by profession, the daughter of Hau Tak Cheung and granddaughter of Hau Sun Chiu and also the assignee of 2 of the 6 Properties without paying any consideration therefor) have dishonestly assisted and/or knowingly received benefits arising from Hau Sun Chiu’s wrongful breach of fiduciary duties.

(1) The dishonesty of Hau Tak Cheung and Hau Wing Yin is obvious.  As the learned author of Lewin on Trusts, 19^th ed, at para 40-035, quoted from Lord Nicholls, “Unless there is a very good and compelling reason, an honest person does not participate in a transaction if he knows it involves a misapplication of trust assets to the detriment of the beneficiaries.”  What the defendants did was exactly to participate in a misapplication of trust assets to the detriment of the beneficiaries.

(2) They received the trust property, namely the 6 Properties, for their own benefit, with the knowledge that they were trust properties and were transferred to them in breach of trust.  They know that the land belong to the estate of Hau Fook Sui, and they know that Hau Sun Chiu was only acting as the administrator of the estate when the 6 Properties were transferred by Hau Sun Chiu to them.  Yet, they did not pay anything for the property.  Further, they chose to retain them despite the demands from the plaintiffs for the property to be returned to the estate.  It is plain that their state of knowledge makes it unconscionable for them to retain the benefit of the receipt. 

(3) The defendants’ admission that they had not paid the consideration and claim that they merely held the land for Hau Fook Sui’s estate could not, in the circumstances of this case, show that they were not dishonest.  Given the fact that their misappropriation of the land was discovered within a year of the transfer and the fact that they could not hide the fact that no money was in fact paid, there was no alternative for them but to admit albeit reluctantly that no money was paid.  Faced with the challenge from the 1^st “fong”, they could not but claim that they held the lands for the estate.

99.  Insofar as the defendants now seek to rely on any fear of having to litigate on Lot 69 with “squatters” who “are legally aided and therefore with considerable resources”, as stated in their Closing Submissions, that explanation is again completely unacceptable for the reasons that (i) it is yet another new explanation put forward by the defendants, (ii) it is contrary to the defendants’ own evidence at trial of fear of litigating with a huge developer Hilder, (iii) it is so desperate and recent an invention that it has to come through their counsel in Closing Submissions after years of litigation with extensive witness statements put in by the defendants and after more than 20 days of oral evidence, and (iv) anyhow, it is no answer to why not just Lot 69 was transferred.

100.  The suggestion that if only Lot 69 was transferred, “it was very likely for the opponent to seek an injunction to preserve the subject matter and the status quo of the litigation” is also unsustainable: (i) On what basis could a squatter apply to enjoin the paper title owner from disposing of her title?  (ii)  There was at the material time of the transfers of the 6 Properties, no litigation nor imminent litigation whatsoever, and the only alleged fear was there might be litigation in the future.  The transfer could be done by a simple assignment, without even an agreement or memorandum of sale registered beforehand.  There was no “opponent” as such.  I agree the alleged likelihood of “injunction” is illusory.

D2.   Revocation of Grant of administration of estate of Hau Fook Sui

101.  As discussed above, it was in fact unnecessary for Hau Sun Chiu to apply for and obtain the Grant of the estate of Hau Fook Sui. 

(1) Hau Fook Sui passed away in 1990, before the enactment of the New Territories Land (Exemption) Ordinance in 1994. 

(2) No grant of probate or administration of the estate of Hau Fook Sui was made within 3 months after his demise. 

(3) Succession should have proceeded by way of registration under Section 17 of the New Territories Ordinance.

102.  Further, by reason of Hau Sun Chiu’s adoption out as the heir of the “fong” of Hau Man Sau as discussed below, he was not entitled to any right of succession or inheritance in the estate of Hau Fook Sui.  Hau Sun Chiu has no beneficial interest in the estate of Hau Fook Sui. For that reason, he was not entitled to any grant in respect of the estate of Hau Fook Sui. [Rule 21, Non-Contentious Probate Rule]

103.  Further still, the Grant of administration of the estate of Hau Fook Sui was obtained by Hau Sun Chiu by misrepresentations and non-disclosures to the court, in that: –

(1) He made the false statement by misrepresenting to the court that he was a beneficiary to and entitled to a grant of administration of the estate of Hau Fook Sui, when he was not by reason of his having been adopted out to the “fong” of Hau Man Sau.

(2) He deliberately concealed the existence of Hau Yuk Chiu and his descendants.  He concealed the existence of Hau Yuk Chiu as a son of Hau Fook Sui, and had also concealed the existence of the 1^st “fong” as beneficiaries to the estate of Hau Fook Sui.  That the concealment was deliberate is evident from Hau Wing Yin’s own admission in the 2^nd Meeting that before the time of the application for Hau Fook Sui’s grant she was fully aware of the existence of the 1^st “fong”, and that the 1^st “fong” should have been included in the affirmation, but had been excluded by her decision of simply to follow the “error” in the application for Hau Look Shun’s grant.  The application of letters of administration in common form is similar to an ex parte application to court and the doctrine of full and frank disclosure is also applicable.

(3) He also concealed from the court in the affirmation that Hau Fook Sui was an adopted son of an indigenous villager of Ho Sheung Heung, and further misrepresented to the court in the same affirmation that the daughters were also entitled to share in the estate of Hau Fook Sui, when clearly the daughters were not, for the reason that Hau Fook Sui, being the adopted son of an indigenous inhabitant of Ho Sheung Heung, the estate was to be succeeded to in accordance with Chinese customs and customary rights under which daughters would have no entitlement.

104.  In the circumstances, the Grant of administration of the estate of Hau Fook Sui to Hau Sun Chiu should be revoked. [Tristram and Coote’s Probate Practice, 31^st ed, paras 17.08 & 17.11]

D3.   Credibility of Witnesses

105.  Before proceeding to deal with the remaining 3 main issues, I would like to further discuss the credibility of the witnesses of the respective parties.

D3.1   Plaintiffs’ Witnesses

106.  The plaintiffs have called 4 factual witnesses, namely the 3 sons of Hau Yuk Chiu (Hau King Wai, Hau Ying Fat and Hau Yuen Kwong) and Hau Kan Bo.  I agree that their evidence is logical, in accord with common sense and where appropriate is consistent and supported by documents. Their evidence remains firm and consistent, and unshaken despite substantial cross-examination. 

(1) Hau King Wai was at one stage accused by the defendants, during cross-examination, of making things up when moving along in giving evidence, when he mentioned about a Hau Yan Cheung, the grandfather of Hau Tai Hong, owning a lot of land in Ho Sheung Heung.  One actually sees that the defendants’ own case is that Hau Tai Hong was a “大地主” in Ho Sheung Heung, and the Genealogy (Exhibit P2) shows that Hau Yan Cheung was in fact the grandfather of Hau Tai Hong.

(2) I agree that Hau Ying Fat is clearly an honest witness.  This is evident from his production of Exhibit P4A on Day 6 of the trial, after he mentioned about his having prepared a form for application for succession to the property of Hau Look Shun on Day 5 and was asked to look for the form over the weekend.  Exhibit P4A purports to state that Hau Look Shun was his “uncle” and not his adopted father.  If he were dishonest, no doubt, he would not have produced it on Day 6.  If, as suggested by the defendants in cross-examination, that he had previously made a conscious decision not to disclose it, he would definitely not have “found” and would not produce it during cross-examination.

(3) Hau Yuen Kwong is clearly a straightforward person.  Though he has not had high level of education, he is obviously an honest and unsophisticated person trying his best to tell the truth in court. 

(4) The 3 Hau brothers are clearly persons who show a lot of respect for the older generations, including Hau Sun Chiu.

D3.2   Defendants’ Witnesses

107.  As to the witnesses for the defendants, their credibility is beyond redemption.  I agree it is plain and obvious that they have been lying in court, making up stories in their witness statements, making up further stories when giving evidence in court.  Their evidence is often inconsistent and self-contradictory, illogical and devoid of common sense. 

D3.2.1   Hau Yuk Chun

108.  In relation to the evidence of Hau Yuk Chun, I agree with the plaintiffs’ observation that: –

(1) She has been evasive, which is evident not only from her answers but also from her demeanour including her murmuring and keeping her head down in giving evidence.  She was evasive even about her work and residence after marriage.

(2) She was very much like a “recorder” or “spokeswoman”, coming with a script, to speak for Hau Wing Yin, to white-wash the plainly wrongful conduct of the defendants and to speak in support of the case of the defendants (for example, by blurting out the case of “fan ka” time and again when she was not being asked about that topic at all) on the one hand, and to blacken the 1^st “fong” on the other.

(3) Her bias against the plaintiffs is obvious when she insisted that the conditions raised by Hau King Wai in the 2^nd Meeting were unreasonable.

(4) She was not even truthful about her own date of birth and the date of birth of Hau Ping Ho – the only purpose of that lie apparently was to make her look older and Hau Ping Ho looked younger, in order to give credence to her professed knowledge about what had allegedly happened in the village.

(5) She was untruthful about what Hau Wing Yin had told her regarding what happened at the 2^nd Meeting – initially saying that she was told virtually nothing, but as it turned out she was told quite a lot.

(6) She repeatedly told lies when giving evidence, such as the lies about why she was in Hong Kong at the time of the 2^nd Meeting – saying that she was then in Hong Kong to deal with the public housing issue after her husband had passed away, but in fact her husband only died in 2016.

(7) She professed to know a lot about the village or the village / Chinese customs when obviously that is not the case. 

(i) She had left the village at the age of 14, and since then had not been living in Ho Sheung Heung (not even when she returned to study in Lung Yeuk Tau in the New Territories, when she lived in the home of Tang Chu Tin for some time).

(ii) Her relationship with her father, Hau Fook Sui was obviously very bad, as evident from the fact that after the age of 14 she never returned to live in Ho Sheung Heung, even after she could no longer live in the home of Tang Chu Tin.  This is further evidenced by the absence of Hau Fook Sui from her marriage banquet, and the absence of any marriage banquet in the village.  With such bad relationship, it is most unlikely she would have been told much by Hau Fook Sui.

(iii) Her lack of knowledge of village / Chinese customs is evident from, for example, (i) her misconception that an elder brother is of a higher generation than a younger brother, (ii) her lack of understanding of the term “長子嫡孫”, (iii) her confusion between “香油錢” and “香油火”, and (iv) her complete misunderstanding of the use of the phrase “長兄為父 長嫂為母”.

(8) Her evidence about the episode of signing the papers in relation to the estate of Hau Look Shun in the solicitors’ office is obviously untrue, concocted only to explain away her consent to Hau Ying Fat succeeding to the estate of Hau Look Shun, when she could not explain why Hau Ying Fat would have been so entitled other than because of his being the adopted son of Hau Look Shun.  If she were really told that it was only for signing adoption papers, the village chief and Chung Kam Yung or some representative of the 1^st “fong” should have been there (but they were not), she would not have to sign so many papers (including the Deed of Family Arrangement) as she knew she did, and most important of all it would have involved a grand conspiracy among Hau Ying Fat, Hau Sun Chiu, Hau Ping Ho and on her case 2 representatives of the law firm.

(9) I further agree that her evidence on the “fan ka” issue further exposes her complete lack of credibility. (i) Her initial oral evidence about the quarrels between Chung Kam Yung and Hau Fook Sui which she said she witnessed in 1981 (2 incidents) and 1982 (1 incident) was obviously a recent fabrication, when details of such important incidents are glaringly absent from her very lengthy witness statement, and were not even supplemented by her in her oral evidence-in-chief.  (ii) Her oral evidence that in the 1982 incident Hau Fook Sui had right-away brought Chung Kam Yung to choose the land is indeed contrary to her witness statement, which suggested that the choosing of land must have taken place sometime after the division of Lots 207 and 833 to the 3 “fongs” on 31 Dec 1982.  (iii) Her evidence on whether, and if so when, she had heard Hau Fook Sui saying in the quarrel in 1982 that the remaining land would all go to Hau Sun Chiu and Hau Look Shun, was changing and inconsistent.  (iv) Her evidence on the heated quarrels also did not make sense, when on her case, despite the seriousness of such matter in the village, she never told any of her siblings about that and asked them to stop Chung Kam Yung, a daughter-in-law of Hau Fook Sui.  (v) Further, her sudden change of evidence about the alleged quarrel, which allegedly led to Hau Fook Sui giving a piece of land to the 1^st “fong”, which she said she witnessed, over the lunch break on Day 13 of the trial, at the very least, shows that she was making up stories along the way.  Before lunch on Day 13, and indeed on many occasions before that when she was blurting out the alleged quarrels relating to “fan ka”, she had been sticking to the year of 1982 being the year of the quarrel which she had witnessed and Hau Fook Sui there and then brought Chung Kam Yung to choose the land.  However, by the cross-examination in the morning of Day 13, it became evident that the story regarding the quarrel in 1982 would not work because on 31 December 1982, Hau Fook Sui was still giving the 1^st “fong” a 1/3 share in Lots 207 and 833, and also Hau King Wai had in 1980 written to Hau Fook Sui clearly indicating that he was not asking for any land.  There then came the change of the year of the quarrel to Spring of 1983 in the afternoon.  (vi) Her suggestion in the witness statement (which bore a similar error with Hau Tak Cheung’s statement) that Hau King Wai or the 1^st “fong” had left to live in the UK after getting that piece of land in the 1980s is plainly an error make up by the same script writer.

(10) Significantly, she was obviously being untruthful in her evidence relating to why she had wanted to join as a party to this action, and about her application for legal aid in Hong Kong and the preparation of her statement for submission to the Director of Legal Aid for the application.  She lied apparently to seek to dissociate herself from Hau Wing Yin.

(11) She was even untruthful about how her witness statement was prepared.  Initially, she said that it was all written by her in manuscript and then typed up by her daughter into the form as it appears in her witness statement.  That could not be true, as her daughter was not legally trained, and would not have known the format for such witness statement.  Then after a lunch break, she came up with a case of her daughter having passed her draft through a lawyer surnamed Wong. 

(12) It would actually appear that her statement had somehow been prepared by the same person who prepared the statement for Hau Tak Cheung, as both statements bear the same error of Hau Fook Sui having told them separately that he had seen Hau Man Sau, when that simply could not possibly have happened, because Hau Fook Sui had never seen Hau Man Sau.  Hau Fook Sui only came to Hong Kong, on the defendants’ case, earliest in 1913 or 1914, but Hau Man Sau clearly had died in 1909.  The error is apparently made by the script writer when he or she misread the tomb stone of Hau Man Sau as saying that he had died at “宣統六年”, when in fact there was no “宣統六年” as the “宣統” reign had ended on its third year, and Hau Man Sau died and the tomb stone in fact said he died at “宣統元年”, “己酉” year which was 1909.

(13) Her unrelenting efforts in blackening the 1^st “fong” and to create stories to “help” with the defendants’ case (in this case to explain why the tablet of Hau Man Sau is in and only in the house of Hau Sun Chiu), is well-demonstrated by her making up stories of Chung Kam Yung’s stance towards the tablet of Hau Man Sau, which is inherently unbelievable, especially given the status of women in the village at the time, and also the fact that Chung Kam Yung was then just married with Hau Yuk Chiu. 

(14) The blackening of the 1^st “fong” of borrowing 2 mugs of rice, measuring 5 inches in height and 6.5 inches in diameter, every day (which story being made up apparently to counteract the plaintiffs’ case that the 1^st “fong” had contributed to Hau Fook Sui’s living) is clearly a gross exaggeration.

(15) The production of her medical records from New Zealand shows that she must have acted in defiance of this court’s repeated reminders, and discussed, at least with her daughter, about the evidence while she was in the course of giving evidence.

(16) Her motive in siding with the defendants in giving all sorts of untruthful evidence is apparently that she thought she would be able to get a share in the estate of Hau Look Shun if they could somehow defeat Hau Ying Fat’s adoption.

D3.2.2   Hau Tak Cheung

109.  Turning to Hau Tak Cheung,

(1) The false explanations as discussed above given by him in relation to the transfers of the 6 Properties (of the estate of Hau Fook Sui) and also the land personally owned by Hau Sun Chiu clearly demonstrated his complete lack of credibility.

(2) The way he says he would be prepared to lie to the creditor (if they were to lose the Lot 69 litigation) further demonstrates his low sense of morality.

(3) He was obviously lying about Hau Fook Sui having told him of his having seen and known Hau Man Sau. 

(4) He deliberately lied, in making his affirmation in HCA 562/2013, about what happened in the 2^nd Meeting, when he thought that the plaintiffs would not have any recording of the meeting to challenge him. 

D3.2.3   Hau Wing Yin

110.  The credibility of Hau Wing Yin is even more appalling. 

(1) Despite being a solicitor, who has been in practice since 2006, she has demonstrated herself to be prepared to tell and state untruths to suit her own interests: to lie to the Rating and Valuation Department, to lie to the bank, to lie to potential creditors of the estate of Hau Fook Sui, to lie to the plaintiffs, and, as submitted by the plaintiffs, to lie to the court.

(2) She was involved in many of the documents generated in relation to the estate of Hau Fook Sui and also the personal assets of Hau Sun Chiu.  I agree with the plaintiffs’ comment that it is difficult to find any document that went through her hands which are completely truthful.  It would appear that the only such document is the 2^nd Will of Hau Sun Chiu.  All of the other documents, such as the Letter of Authorization, the assignments of the 6 Properties, the assignments of Hau Sun Chiu’s own land, the application for the grant of Hau Fook Sui’s estate, the schedule of property of Hau Sun Chiu’s estate, the mortgage for House G2A, the affirmation of Hau Tak Cheung in HCA 562/2013, her own witness statement, were all full of falsities or were inaccurate on her own case.

(3) To say the least, she must have blatantly disregarded her discovery obligation when she purported to have destroyed her notes about the 2^nd Meeting after preparing the witness statement. In fact, it would appear that she would have got some sort of record, more detailed than merely hand-written notes, of the meeting, as evident from her detailed and accurate recitation of what Hau King Wai said in the meeting.

(4) She was obviously prepared to lie in order to blacken Hau King Wai / fabricate what happened in the 2^nd Meeting, when she thought that there was no recording of the 2^nd Meeting to contradict her, both in the affidavit of Hau Tak Cheung for which she was responsible, and also in her own witness statement.

(5) She even lied in court about whether Hau King Wai had explained in the 2^nd Meeting as to what he meant by “大眾” in the 2^nd Meeting.

(6) Her evidence on her alleged telephone enquiry with Hau Mei Kwan about the adoption of Hau Ying Fat shows that she was making up stories along the way, initially saying that the enquiry was made only after the 2^nd Meeting, then saying that it was before the 2 meetings, and finally saying that she did so both before and after the 2 meetings.

(7) Again, the false reasons made up by her to explain away the transfers of the 6 Properties and also the transfers of Hau Sun Chiu’s personal properties shortly before his death exposed the complete lack of credibility on the part of Hau Wing Yin.

D4.   Hau Sun Chiu’s adoption

D4.1   The real issue

111.  As pointed out by the plaintiffs, it is not the plaintiffs’ case that Hau Sun Chiu was adopted as a son of Hau Man Sau.  The plaintiffs’ case as pleaded is that Hau Sun Chiu was adopted to the “fong” of Hau Man Sau.

112.  It is accepted by the plaintiffs that the plaintiffs bear the burden of proving on balance of probabilities the existence of a valid adoption whereby Hau Sun Chiu had become adopted away from the lineage of Hau Hing Sau and Hau Fook Sui.

D4.2   Chinese Law and Customs – how to ascertain

113.  The adoption was of course one governed by Chinese Law and Customs as applicable to Ho Sheung Heung in Hong Kong.  It is to be noted that Chinese Law and Customs as they apply to Hong Kong are in fact part of the local law in relation to which the court is entitled to take notice.  However, it is also a long established practice that the court may receive expert evidence on such law.  The often quoted statement of the law is the observation of Hogan CJ in Re Tse Lai Chiu[1969] HKLR 159 at 175-176:

“… It would seem, therefore, that contrary to what the Solicitor General had suggested, Chinese law was part of the law of the land. Consequently, court could purport to find this law in authoritative textbooks as Sir Henry Gollan did in the Chak Chiu Hangcase [20 HKLR 1, at 21] but there has long been a practice in Hong Kong of taking evidence on such law, a practice endorsed in a number of judicial decisions, and although this practice may be regarded as a departure from the procedure normally followed in English courts, I think it must now be regarded as an established modification based on local circumstances though it should not be taken to supplant the court’s right to inform itself by other means.”

D4.3   The approach to the evidential issues

114.  In To Kan Chi & others v Pui Man Yau and the Attorney General and others, HCMP 562/1992 & 2084/1994 (Judgment dated 26.11.98), Yam J had to consider whether the To Ka Yi Tso has succeeded in discharging the burden of proving that the lands held in the name of Tsing Wan Kun were beneficially belonging to it.  Yam J remarked (at para 3.8): –

“No doubt in approaching the question of the discharge of the burden, the Court, ... , is bound to take into account of all relevant factors and circumstances including –

i) the things to be proved;

ii) the inherent probabilities of the matter;

iii) the timing of the relevant events;

iv) the normal expectation on the availability of evidence; and

v) the presence or absence of any contrary evidence.”

115.  Again, in Kan Yam Yau and Kan Ching Tai v Kan Yook Tim, CACV 298/2007 (Judgment dated 18.06.2008), Cheung JA stated as follows at para 22: –

“22. When a Court makes a finding of fact or drawing an inference from facts, it does not depend solely on direct evidence. Very often such evidence is lacking. The Court looks to the overall circumstances of the case. The conduct of the parties in relation to each other is a relevant consideration. If the parties had conducted their affairs in a particular manner for a substantial period of time, the Court may ask whether this is because they know that their relationship is governed by a certain mode based on agreement or understanding? Or is it because of other reasons such as misapprehension of some fundamental facts, inertia or lack of financial means to adopt a different approach? The Court also looks to contemporaneous records such as written agreements or correspondence of the parties. In the context of an indigenous clan in the New Territories, the Court also expects its history to be passed down from generation to generation by way of oral transmission or recorded in documents such as a genealogy. From these various facets the Court makes the finding and draws the inference as to what probably had taken place.”

116.  In the present case, the event of the adoption of Hau Sun Chiu, if it should have occurred at all, would have occurred sometime between 16 August 1929, the date of his birth, and 22 July 1938, the date of the re-transfer of the House G6 back to Hau Fook Sui and Hau Lau Shi. This is because according to the evidence of Hau King Wai, it was after the adoption of Hau Sun Chiu to the “fong” of Hau Man Sau that Hau Fook Sui managed to recover House G6, a house previously being the family home of Hau Man Sau, from Hau Mi Tsik’s widow, and his evidence in this regard was corroborated by Hau Yuen Kwong.  Given that the relevant events must have occurred at least some 80 years ago, and the persons who could reasonably be expected to have direct knowledge of the adoption (being Hau Fook Sui, Hau Lau Shi, and Tang Kam) are all dead, the evidence to prove the adoption would necessarily be hearsay evidence and also other circumstantial evidence tending to indicate that the adoption must have occurred.

D4.4   Evidence showing that there was adoption

117.  As submitted by the plaintiffs, apart from the hearsay evidence given by Hau King Wai and Hau Yuen Kwong, there are still many pieces of cogent evidence pointing to the fact that Hau Sun Chiu had been adopted to Hau Man Sau’s “fong”.

D4.4.1   The Ancestral Tablets

118.  

(1) The ancestral tablet in House G5 showed Hing Sau and his wife (Lau Shi) to be of the 27^th generation, Fook Sui and one Sai Fu (the deceased natural son of Hing Sau) to be of the 28^th generation.  Man Sau’s and his wife’s names were not found at the tablet at House G5 at all.   On the other hand, the ancestral tablet at Sun Chiu’s House G6 (as copied to House G2A) showed that the 27^th generation was Man Sau and his wife (Liu Shi), but Hing Sau & Lau Shi were not found there at all.   The defendants’ evidence in explanation was that these entries to the ancestral tablets were done at the instigation of Fook Sui.  However, Hau Yuk Chun’s allegation that it was Hau Fook Sui’s intention that both Hau Yuk Chiu and Hau Sun Chiu should worship both Hing Sau and Man Sau should be rejected.  This is because even assuming that her explanation that the tablet at G5 did not contain Man Sau was because of the objection from Yuk Chiu’s wife, Chung Kam Yung, there was no reason why the one at Sun Chiu’s House G6 should have Hing Sau missing if indeed it was Fook Sui’s idea that both Yuk Chiu and Sun Chiu should worship both Hing Sau and Man Sau.  Moreover, given the alleged date of Chung Kam Yung’s objection was about 1949, it was quite unbelievable that Chung Kam Yung as a new daughter-in-law would have raised and insisted on objecting to the view of her father-in-law.

(2) Even though after the death of Hau Fook Sui and Tang Kam, Hau Fook Sui’s and Tang Shi’s names were inserted onto the tablet at House G6, it is plain that it was only recently done by Hau Sun Chiu after 1995 when Tang Kam died, and accordingly it is of little probative value in showing that Sun Chiu was not adopted to Man Sau’s line.  Furthermore, Sun Chiu’s act in so inserting Fook Sui and Tang Shi’s names was well understandable because Fook Sui and Tang Shi were in fact his natural parents, and at any rate by 1995, it was highly probable that even Sun Chiu himself did not appreciate how his adoption was structured.

(3) As it is an important feature and duty of an adopted person to worship and venerate his adopted ancestors, the entries on the tablets existing as G5 and G6 are important indications that Hau Sun Chiu had been adopted to the lineage of Hau Man Sau.  Since Hau Fook Sui is clearly only adopted to Hau Hing Sau, Hau Sun Chiu would not be entitled to inherit the property of Hau Fook Sui, as Hau Sun Chiu himself had crossed over to be adopted to the lineage of Hau Man Sau.

D4.4.2  House G6 passing to Hau Sun Chiu

119.  

(1) Houses G5 and G6 (ie Nos 1 and 2 of Tsung Yuen) are not found in the schedules to the Block Crown Lease of Demarcation District No 95.  Unlike all other pieces of land owned by Hau Fook Sui, there was no record showing that these 2 houses were acquired by Hau Fook Sui during his life time.  Hence, the inference is that they were properties passed down to Hau Fook Sui by Hau Hing Sau.  House G5 was transferred to Hau Yuk Chiu on 7 August 1973, and House G6 was transferred to Hau Sun Chiu on 22 November 1979.

(2) The evidence from Hau King Wai is that House G5 was previously the house of Hau Hing Sau, and House G6 was the house of Hau Man Sau but it was held by Hing Sau for him.  It was probably after the death of Hau Hing Sau that a close relative Hau Mi Tsik had taken House G6.  House G6 was transferred to Hau Mi Tsik on 24 January 1911 (not as a sale) but was by Order of the Court.  This transfer which was not signed by Hau Hing Sau was indicative that by then Hau Hing Sau had probably died.  After the death of Hau Mi Tsik there was a dispute between Hau Lau Shi and the widow of Hau Mi Tsik, and eventually on the ground that Hau Fook Sui had a second son Hau Sun Chiu who was adopted to succeed Man Sau’s lineage, House G6 was transferred back to Hau Fook Sui and Hau Lau Shi as trustees for Hau Fook Sui on 22 July 1938.  The documentary evidence of the 2 transfers supported the evidence of Hau King Wai and Hau Yuen Kwong.

(3) The transfer of G5 to Yuk Chiu and G6 to Sun Chiu by Fook Sui indicated that Hau Fook Sui recognised that Hau Sun Chiu was to succeed to Hau Man Sau’s “fong” and this would constitute a good explanation as to why Hau Fook Sui transferred G5 to Hau Yuk Chiu and G6 to Hau Sun Chiu.

(4) It is clear that Hau Sun Chiu’s family, including Hau Tak Cheung and Hau Wing Yin all treated House G6 to be the ancestral home, even though it may be argued that when accepting the proposition put to them in cross-examination that G6 was the ancestral house passed down from Hau Man Sau, Hau Tak Cheung and Hau Wing Yin may not have paid sufficient attention to the importance of the reference to Hau Man Sau.  From the evidence, even though Hau Tak Cheung and Hau Wing Yin would in all probabilities not have any personal knowledge on the history of the ownership of the house, that House G6 originated from Hau Man Sau is something which was quite widely known within the Hau family.

D4.4.3   The arrangement regarding ancestral tomb visit

120.  

(1) It is common ground that during his life time, Hau Fook Sui led his descendants to the tomb visits to worship the ancestors, including both Hau Hing Sau and Hau Man Sau during Ching Ming and Chung Kau. In this respect, Hau Sun Chiu’s “fong” and Hau Yuk Chiu’s “fong” all took part in the ancestral worship.  However, there was no evidence on how those worships were conducted and what took place during the worship.

(2) The details of what took place during tomb visits before the death of Hau Fook Sui and after Hau Fook Sui had ceased to personally lead the descendants to the tomb visit worship were set out in paragraph 29 of the witness statement of Hau Tak Cheung.  The unusual features of the ceremonies were that even though both the 1^st and 2^nd “fongs” would set off to do the tomb sweeping and worship together, there were distinct roles played by each “fong” when worshipping Hau Hing Sau and Hau Man Sau.  When worshipping Hau Hing Sau, it was the exclusive role of the 1^st “fong” to prepare the offerings, and the 1^st “fong” would do the worshipping first including the final ceremony of burning the joss papers.  It was then the turn of the 2^nd “fong” to worship.  It is of importance to note that the 2^nd “fong” merely put in the joss sticks, and it is indicative of a very simple worshipping act consistent with some outsiders doing it as a matter of courtesy to the dead.  It is of importance that when it came to worshipping Hau Man Sau, the role and sequence were reversed.  The role of the 1^st “fong” was merely to put in the joss sticks after the 2^nd “fong” had completed the worshipping ceremony.  Again, the acts and participation of the 1^st “fong” would appear to be like that of a guest who was present at the ceremony putting in the joss sticks as a matter of courtesy.

(3) The situation after the death of Hau Fook Sui was even more indicative that the 2 “fongs” had conducted themselves showing that they were in fact worshipping different ancestors.  The evidence is clear that at the request of Hau Sun Chiu, each of the 2 “fongs” would do their own tomb visit.  The 1^st “fong” would merely worship the branch of Hau Hing Sau and would not worship Hau Man Sau at all.  The 2^nd “fong” merely worship Hau Man Sau and not Hau Hing Sau at all.

(4) Even though the evidence was that after the death of Hau Fook Sui and Tang Kam, not only the 1^st “fong” but also the 2^nd “fong” also went to worship their graves, I agree that the worshipping of Hau Fook Sui and Tang Kam by the 2^nd “fong” was of little probative value, because plainly Hau Fook Sui and Tang Kam were the natural parents of Hau Sun Chiu and nothing could be inferred from the fact that Hau Sun Chiu and his descendants would also pay worship to their tombs.

(5) There is no credible explanation for the strange way of making the worshipping arrangements between the 2 “fongs” other than the fact that Hau Sun Chiu must have been adopted to the Hau Man Sau lineage.  Such explanation like “Fu Chai (附祭)” is plainly not applicable.  Apart from the fact that the defendants’ expert Professor Baker himself had admitted in cross-examination that he did not know much about Fu Chai, plainly the role played by the 2^nd “fong” in the worship of Hau Man Sau and the way that it differed from its role in the worship of Hau Hing Sau could not be explained on the basis of what he described as Fu Chai.

121.  Regarding the arrangements for ancestral tomb visit, it is the clear evidence of Professor Palmer, that the arrangements described by Hau Tak Cheung not only “suggest they [Hau Man Sau and Hau Sun Chiu] had special relation” as the defendants refer to in their Closing, but also that such arrangements “support the argument that Hau Sun Chiu was adopted to Hau Man Sau’s line”, because of the “inversion of orders” of priority by Hau Yuk Chiu’s “fong” and Hau Sun Chiu’s “fong” when coming to the worshipping of Hau Hing Sau and Hau Man Sau.  In cross-examination, Prof Palmer only said that it “could” (not “would”, as the defendants submit) be the case that the 1^st “fong” was assigned to take care of the worshipping matters of Hau Hing Sau, but he made it clear that he did not think that was the reason for the worshipping arrangements (when he said “but I did not see it that way”). 

122.  Professor Baker has not been able to offer any satisfactory explanation for such strange arrangements for ancestral tomb visit, other than that Hau Sun Chiu was adopted to Hau Man Sau’s lineage.  The arrangement was that for worshipping Hau Hing Sau, all of the members of the 1^st “fong” (even though some would be junior in terms of seniority to the members of the 2^nd “fong” present) would complete their elaborate ceremony, which would then be followed by a much simpler ceremony by the members of the 2^nd “fong”.  It was the other way round in the worshipping of Hau Man Sau. 

(1) The tomb visit arrangements are contrary to Professor Baker’s initial answer on cross-examination that such tomb visits were “always led by the most senior one in the family”, with people “making offerings in order of seniority”.  The “order of seniority” was not followed in the worshipping arrangements.

(2) Neither can the arrangements be satisfactorily explained on the basis of the “族長” first doing the ceremony and then followed by others, as subsequently suggested by Professor Baker.  On the arrangements, the head of the 1^st “fong” would be like the “族長” for the Hau Hing Sau lineage; whereas the head of the 2^nd “fong” would be like the “族長” for the Hau Man Sau lineage; which dovetails with the adoption of Hau Sun Chiu to Hau Man Sau.

(3) Nor can Professor Baker’s suggestion that Hau Man Sau was of “secondary importance” help the defendants’ case.  The arrangements show that Hau Hing Sau was of “primary importance” to the 1^st “fong” but of “secondary importance” to the 2^nd “fong”; whereas Hau Man Sau was of “primary importance” to the 2^nd “fong” but of “secondary importance” to the 1^st “fong”, which again dovetails with Hau Sun Chiu’s adoption.

D4.4.4   The repair / renovation of the graves of Hau Hing Sau, and Lau Shi etc & also acts of representation of the “fongs”

123.  

(1) This was done in 2004.  The important thing to note is that this was done at the wish of Hau King Wai and his brothers, and Hau Sun Chiu and his “fong” was never involved.  This shows that Hau Sun Chiu was not considered to be a descendant or successor of Hau Hing Sau.  The fact that the renovation did not extend to the grave of Hau Fook Sui is neither here nor there because it is common ground that Hau Fook Sui chose the location of his own grave and did not want to move.

(2) Also there was the occasion of the need to repair and renovate the grave of the Hau ancestors Hau Sam Gong (侯三恭) of the 24^th generation.  There was the unchallenged evidence of Hau King Wai that on this occasion in 2009, Hau King Wai and Hau Ying Fat respectively representing the “fong” of Hau Yuk Chiu and Hau Look Shun and thus in turn representing the “fong” of Hau Hing Sau, while Hau Sun Chiu represented the interest of Hau Man Sau in making the decision to renovate.  It is to be noted that there were other “fongs” involved, viz the “fong” of Hau Mi Tsik which was represented by Hau Gwai Choy.

D4.4.5  The role played by Hau Sun Chiu at the funeral of Hau Fook Sui and Tang Kam

124.  

(1) Hau Fook Sui died in 1990.  There is clear evidence that Hau King Wai was the one who performed the most important duty in the ritual of “carrying the banner” and “buying the water” (擔幡買水).  The most telling evidence as to what happened during the funeral of Hau Fook Sui was the evidence given by Hau Tak Cheung in cross-examination. His evidence was to the effect that there was a dispute at the funeral as to who should perform the ritual of 擔幡買水.  The 2 contesting candidates were Hau King Wai and Hau Tak Shing – Hau King Wai being the eldest son of Hau Yuk Chiu who predeceased Hau Fook Sui.  Hau Tak Shing being the son of Hau Sun Chiu but was older in age than Hau King Wai.  It was said that originally the intention was to ask Hau Look Shun to perform that ritual, and Hau Sun Chiu (notwithstanding that he was alive and present) was never considered to be a suitable candidate.  For some reason Hau Look Shun did not perform the task and would appear to support Hau King Wai.  Eventually the decision was that Hau King Wai should perform that important ritual.

(2) Since Hau Yuk Chiu, being the eldest son of Hau Fook Sui, predeceased Hau Fook Sui, unless there was a special reason, Hau Sun Chiu, being the oldest son available then, should be the one to carry out the ritual.  This is supported by the clear evidence of Professor Baker.  The fact that Hau Sun Chiu was never considered to be a suitable person for the ritual plainly calls for an explanation.  The only reasonable explanation must be that it was widely accepted by the Hau family that Hau Sun Chiu had been adopted away from the lineage of Hau Hing Sau and Hau Fook Sui, so much so that being out of the family, he could not be the person to perform the ritual.  Thus, in all probabilities, Hau Sun Chiu had been adopted to the lineage of Hau Man Sau.

(3) For the same reason, the unchallenged evidence that it was Hau King Wai and not Hau Sun Chiu who performed the ritual of 擔幡買水 at the funeral of Tang Kam is also a strong indication that Hau Sun Chiu had been adopted out of the family of his natural father, Hau Fook Sui.

D4.4.6   The evidence from witnesses

125.  

(1) The evidence of the plaintiffs, Hau King Wai and Hau Yuen Kwong derived from what they learned from their grandfather Hau Fook Sui is that Hau Sun Chiu was adopted to the lineage of Hau Man Sau.  The evidence from Hau Yuk Chun was to the effect that she had not heard from her parents or others from the village of the adoption of Hau Sun Chiu to be the adopted son or adopted grandson of Hau Man Sau and his wife Liu Shi.

(2) I agree that apart from the fact that Hau Yuk Chun was a most unreliable witness having an interest in the defendants’ success in this action, it is quite clear that she had very little contact with Ho Sheung Heung and as such her knowledge or rather the lack of it must weigh heavily against the court’s accepting her evidence.  It is noted that she left Ho Sheung Heung to live in Kowloon at a very young age when she went to secondary school.  After that, even though she claimed that she also visited her parents rather regularly, it is plain that being just a visitor and even staying overnight for a day or two could not give her much opportunity to interact with people in the village.  Her evidence on what she was supposed to have heard from Hau Fook Sui regarding the early history of how Hau Fook Sui came to Ho Sheung Heung and how he became adopted was plainly wrong.  In this respect, her evidence (in common with that of Hau Tak Cheung) that Hau Fook Sui came to Ho Sheung Heung at the age of 13, and met Hau Man Sau and starting working in Ho Sheung Heung is plainly wrong.  It is quite plain that even on her version that Hau Fook Sui came to Ho Sheung Heung at the age of 13 or 14, it just cannot be right that Hau Fook Sui would have met Hau Man Sau and had interaction with him and his brother Hau Hing Sau, because there is solid evidence that Hau Fook Sui was born in 1899 and that Hau Man Sau died in 1909.  Hence at the age of 13 or 14, Hau Fook Sui could never have met Hau Man Sau and the story told by Hau Yuk Chun and Hau Tak Cheung relating to what they attributed to being told by Hau Fook Sui was simply untrue.  By contrast, the fact stated in paragraph 4 of the witness statement of Hau Tak Cheung, that Hau Fook Sui came to Hong Kong after World War I (ie in 1918) is likely to be true, as it corroborated the evidence of Hau King Wai that he was told by Hau Fook Sui that he came to Hong Kong at the age of 18 or 19, by which time Hau Hing Sau (not to mention Hau Man Sau) was dead.

(3) Significantly, there was the evidence from the independent witness Hau Kan Po that strongly supports that it was widely known by people closed to the stirpes of Hau Hing Sau and Hau Man Sau that Hau Sun Chiu had been adopted to be the descendant of Hau Man Sau.  He explained convincingly why it was necessary for him to seek the confirmation from Hau Yuen Kwong and Hau Ying Fat for their consent to allow Hau Sun Chiu to claim the share of Hau Fook Sui in the distribution of Hung Ancestor (珙祖). His evidence is not contradicted.

D4.5   Counter arguments – against adoption

126.  The defendants raised 2 objections to the adoption of Hau Sun Chi: (i) that there was no direct evidence on how the adoption took place; and (ii) that the adoption to Hau Man Sau’s lineage was faced with the legal objection that there was a generation gap between Hau Man Sau and Hau Sun Chiu.

D4.5.1   No evidence of the adoption ceremony

127.  As to the objection that there was no direct evidence on how the adoption took place, it must be borne in mind that the current situation is such that it could not be expected that there would be evidence from living people as to how the ceremony took place.  From the evidence available, the adoption of Hau Sun Chiu must have taken place when he was very young.  Hau Sun Chiu was born on 16 August 1929.  Hau King Wai’s evidence was that it was after the adoption of Hau Sun Chiu to the “fong” of Hau Man Sau that Hau Fook Sui managed to recover House G6, a house previously being the home of Hau Man Sau, from Hau Mi Tsik’s widow, and such transfer back of House G6 took place on 22 July 1938, hence the adoption must have taken place before 22 July 1938.  Hau King Wai’s evidence was corroborated by Hau Yuen Kwong.

128.  The expert evidence is that although formal adoption may often be evidenced by a big ceremony and some documentary evidence such as a Chuk Shu (祝書), the ceremony could be relaxed and could be rather informal.  Such was the custom and practice of the Hau family at Ho Sheung Heung was confirmed by the un-contradicted evidence of Hau Kan Po.  The situation is to be contrasted with the special circumstances of the adoption of Hau Fook Sui.  Hau Fook Sui was with a different surname (Chan) from a completely different village. There was the further evidence that for the particular reason that the close relatives, having had their eyes on the properties of Hau Hing Sau, did not want to recognise the adoption of Hau Fook Sui; and in order to dispel the unwarranted thoughts of such relatives, Hau Lau Shi decided to have a further formal adoption.  With the progression of time, it is to be expected that the ceremonial elements in any ritual would be reduced.  Hence in the circumstances, it cannot be reasonably expected that there would be any direct evidence on how the ceremony took place and how it was structured.  The persons who would have knowledge of the adoption ceremony would be Hau Fook Sui, Hau Lau Shi, and Tang Kam.  They have all passed away.

129.  At any rate, the fact that there was no evidence on how the adoption took place or structured was never per se a reason for holding against the adoption [see e.g. Tang Cho Sang Wayne v Chim Siu Wah, HCA 6666/1993, discussed below].

D4.5.2   The generation matching

No absolute prohibition in Chinese Law and Customs

130.  First and foremost, there is nothing to suggest that in Chinese Law and Customs, there could not be an adoption that ignores the generation correctness.  Instances of adoption in violation of the requirement of generation correctness were known, although that being the exception rather than the rule [see, e.g. per Professor Palmer citing the passage from Professor Ann Waltner, which was also cited with no adverse comments from Professor Baker]. 

131.  The defendants argue that “generation matching” is very important in adoption.  However, the citation from Professor Ann Waltner, which both experts refer to and which the defendants heavily rely on, precisely shows that, especially in cases of posthumous adoption (of which the adoption of Hau Sun Chiu was one), adoptions might be done in such a manner that “a man’s younger brother or cousin might be adopted, violating the rules of precedence for proper generation” (emphasis added).  This further shows the “flexibility” towards the “correct generation requirement” in adoptions, especially posthumous adoptions.

132.  Apart from that, there was also the precedent from Taiwan, where it was said that where there was no one from the son’s generation to be adopted, one from the generation of grandson could be adopted as grandson and his position in inheritance would be equivalent to that of the adopted son.  There was no particular reason given by Professor Baker as to why such precedent from Taiwan could not be applicable to Ho Sheung Heung.  Indeed, in Liu Ying Lan v Liu Tung Yiu[2003] 3 HKLRD 249, at para 40 (page 266), Cheung JA had referred to the customs in Taiwan without any adverse comment that it was not applicable to Hong Kong.

The Yat Chi Kim Leung Fong argument – advanced by Professor Baker

133.  Professor Baker appeared to explain the worshipping of Hau Man Sau by Hau Fook Sui as a kind of Fu Chai (附祭) and said that that would not involve any question of inheritance. As it has been discussed above, in the present case, how the 2 “fongs” conducted their respective worships of Hau Hing Sau and Hau Man Sau could hardly be described as Fu Chai.

The consequence of the case of Yat Chi Kim Leung Fong

134.  As submitted by the plaintiffs, if the situation was as analyzed by Professor Baker, that the situation of Hau Fook Sui was that he was the son who had the responsibility of taking care of 2 “fongs”, ie the respective “fong” of Hau Hing Sau and Hau Man Sau, the legal consequence is also that Hau Sun Chiu, who was designated to continue to worship Hau Man Sau did not have the right to inherit the property of his natural father, Hau Fook Sui.

135.  The position was considered by Cheung JA in the Court of Appeal in Liu Ying Lan v Liu Tung Yiu, ibid where the issue involved was the application of the general prohibition that an adopted son could not inherit in more than one of the families ie his natural family and his adopted family (see page 250G).  At paragraphs 47 and 48 (pages 267 & 268) Cheung JA cited with approval the passage from Jamieson, Chinese Family and Commercial Law p.24:

“47. The learned Judge also referred to the kim tiu marriage (兼祧). Jamieson, Chinese Family and Commercial Law at page 24 dealt with this rule:

“A son dying young and unmarried as a rule drops out of the genealogy altogether.  He has no tablet in the ancestral hall and consequently no successor can be appointed. ... Another exception to the general rule is the case of two brothers dying leaving only one son between them.  In such case with the consent of the elders in writing the son may be appointed to succeed to both families.  But the two lines must not be fused; the two households remain distinct, and he must have a separate wife in each or more properly a wife in one, the first married, and a concubine in the other.  The grandsons born in each succeed to the line and patrimony of that particular house and no other.” [citation from Jamieson]

48. I agreed with the learned Judge that this rule supports the general prohibition. Even in a kim tiu situation the two male lines have to remain distinct and the descendants in each household succeed to the line and patrimony of that particular house and no other…” (Emphasis supplied)

136.  Even though technically Hau Fook Sui did not have a concubine giving birth to Hau Sun Chiu, nor is there anything to suggest that there was anything in writing by elders consenting to the appointment of Hau Sun Chiu to succeed to the line of Hau Man Sau, I agree that plainly these requirements of having a concubine and the written approval of elders were not essential, given the fact that Hau Fook Sui did have Hau Sun Chiu as his 2^nd son (even though born from the same spouse Tang Kam), and the general rule is that the 1^st son would not be adopted and it is the 2^nd son who might be adopted to the next branch of the family.  Given that the evidence on the designation of Hau Sun Chiu to succeed to Hau Man Sau’s branch is so overwhelming, the consequence that follows must be that Hau Sun Chiu’s succession to the line of Hau Man Sau must mean that Hau Yuk Chiu and the other son Hau Look Shun would succeed to the family and line of Hau Fook Sui and Hau Hing Sau, and not that of Hau Man Sau, and Hau Sun Chiu could only succeed to the line of Hau Man Sau and no other.

D4.5.3   Alternative means of overcoming the generation gap requirement

137.  The approach of Chinese Law and Customs is that the continuation of the family line is paramount and the technicality of generation matching could easily be overcome by technical means even though this is to be achieved retrospectively.  In the case of Li Lung Chien referred to in Mr Jamieson’s book, the action was brought by the wife of a Deceased to declare that one Li See Yeh, a son adopted by the Deceased from an unconnected family should be deprived of the succession to the Deceased, and that the son of one Li Yu Chen, who was the 2^nd son of the Deceased’s elder brother should be appointed to succeed the Deceased as adopted grandson.  Li Yu Chen was originally the first adopted son of the Deceased, but he was formally expelled from the family by the Magistrate because of his bad habit.  The decision of the Court was that both Li See Yeh and the son of Li Yu Chen were disqualified for the succession on the ground that Li See Yeh did not belong to the kindred, and that the son of Li Yu Chen should be qualified because his father, ie Li Yu Chen had been debarred for misconduct and the disqualification would extend to all his descendants.  It is of importance to note that the disqualification of the son of Li Yu Chen was not for the reason that the wife sought to have him adopted as the grandson.  Upon enquiries, it was found that all the living nephews of the Deceased could not be adopted as they were the only son of their respective family.  Eventually the Court appointed the son of another nephew who was dead to the succession and be heir to all the family property as grandson, and it was also decided that the deceased nephew should posthumously be adopted as son of the Deceased.  I agree that this decision does support the contention that the continuation of the line was of paramount importance, and the court would strive to have this happen even at the expense of ordering posthumously the adoption of a dead person as the adopted son of the Deceased. 

138.  In the present case, it is plain and obvious that Hau Sun Chiu was designated to be adopted to succeed to the lineage of Hau Man Sau.  There was no evidence on precisely how this was achieved.  It was possible that Hau Sun Chiu’s adoption was to be structured through his adoption to be the son of the deceased son of Hau Man Sau. 

139.  The case of the succession by Wun Tso (煥祖) (of the 22^nd generation) to the son of Yeuk Choi Gong (若彩公) recorded in page 15 of the Genealogy of the Hau clan would give support to the theory that Hau Sun Chiu could well have been adopted to the unnamed deceased son of Hau Man Sau.  While it is true that the precedent on page 15 of the Genealogy did not conclusively show that it was on all fours with the situation of Hau Sun Chiu, in that it was possible that the person from the 21^st generation whose name is lost may be an adult, I agree that the probability was that he was a young male who died at a tender age as it was unlikely that a grown up male would not have his name remembered.  As to the suggestion that Wun Tso may well be a natural and not an adopted son of the nameless person, it is to be noted that while the text at page 15 of the Genealogy did not use the word adopted (入嗣) relating to the succession of Wun Tso, it is to be noted that the word used is (傳) which literally would mean “passing to” as opposed to using expression that Wun Tso was born as a son (生子) by the nameless person, thus indicating that it was not a case of Wun Tso being the natural son of the nameless person.  Further, if the nameless person had died at a tender age, he would not have any natural son.

140.  Even though the plaintiffs had pleaded that Hau Man Sau and his wife Liu Shi had no natural offspring, the witness statement of Hau King Wai did show that in fact they had a son who died a few days after his birth, and in his evidence he mentioned that he was told about that on an occasion when Hau Fook Sui was building the ancestors’ gravestone with him and he repeated that it was a son in cross -examination (“it is not the case that he did not have a child, he had a son but died”), and Hau King Wai was being cross-examined on this part of his evidence.

141.  It was obviously a slip on the part of Professor Palmer insofar as he might have admitted in evidence that he only learned about Hau Man Sau having a son who died young when Hau King Wai was giving evidence – because that fact has been referred to by Hau King Wai in his witness statement (which witness statement Professor Palmer also referred to in his 1^st report).   

142.  Hau Tak Cheung when asked about Hau Man Sau having had a son who died very young said that “Hau Fook Sui only mentioned about those who died young very briefly, I do not particularly remember about that”. 

143.  In view of (i) Hau King Wai’s evidence which plainly was not made up during the trial, and which was not objected to and was cross-examined upon, (ii) Hau Tak Cheung was also asked about the issue in cross-examination, and (iii) its implications were fully dealt with in the experts’ evidence adduced during the trial with the leave of the Court, I would direct an amendment to the Statement of Claim by adding the words: “[other than a son who died very young].” at the end of paragraph 12(c) on page 5 thereof. 

144.  At any rate, there is clear evidence that Hau Hing Sau had a natural son called Hau Sai Fu who also died young and his tablet was also found amongst the ancestral tablets at House G5, and this is not challenged.  The adoption of Hau Sun Chiu to the lineage of Hau Man Sau may also be routed through the adoption of Hau Sai Fu to Hau Man Sau and Hau Sun Chiu in turn be adopted to Hau Sai Fu.

145.  For the reasons stated above, I am of the view that since the evidence of Hau Sun Chiu’s succession to the lineage of Hau Man Sau was so overwhelming, and since there was no evidence to show that such adoption could not legally be accomplished, Hau Sun Chiu must be treated as being debarred from inheriting the estate of Hau Fook Sui.

146.  Finally, as regards the terms of the draft will of Hau Fook Sui, quite apart from the fact that the probative value of the draft will of Hau Fook Sui is very limited when it was never signed by him, what it shows at most is that Hau Fook Sui had at one stage thought of making a gift of part of his estate to Hau Sun Chiu.  That was understandable given that Hau Sun Chiu was his natural son, despite his having been adopted over to Hau Man Sau’s lineage.  When Hau Fook Sui had not signed the will before his death, his estate is to be distributed in accordance with Chinese Law and Custom, and Hau Sun Chiu would have no entitlement.

D5.   Hau Ying Fat’s adoption to Hau Look Shun

147.  Even though there was no direct evidence on how the adoption was conducted, I agree the circumstantial evidence of there being an adoption was overwhelming.  On the plaintiffs’ case, the adoption took place sometime around 1965 when Hau Ying Fat was still a baby.  His adoption was at least in part prompted by the superstitious belief that it was necessary for his recovery from the disease of tetanus.

D5.1   Evidence of adoption

D5.1.1   The special relationship between Hau Look Shun and Hau Ying Fat

148.  There was the evidence from Hau Ying Fat on the special care and attention given to him by Hau Look Shun during his infancy, such as taking care of him and making arrangement for his hospitalization.  There was also the special treatment given to him by Hau Look Shun compared with other children.  There was also the evidence of the very paternal kind of counselling given to Hau Ying Fat in 1992 described in paragraph 27 of his witness statement.   Even though this piece of evidence per se is not conclusive in showing that Hau Look Shun was the adopting father, I agree it is highly supportive of the case on adoption.

D5.1.2   Direct Evidence of the adoption

149.  Apart from the general evidence on his adoption, Hau Ying Fat also gave evidence on a specific occasion of his being told by his mother Chung Kam Yung of his adoption to Hau Look Shun.  It came on an occasion of his mother’s reminding him the duties and obligations of being an adopted son.  There was also the evidence in cross-examination of Hau Ying Fat that when he was 6 or 7 years old, he heard of Hau Look Shun telling his girlfriend that there was no need for him to have any child as he had already got Hau Ying Fat as his adopted son.  There was also evidence that he heard his elder sister mentioning about his being adopted to Hau Look Shun.

150.  There was also the evidence that in 1990, Hau Look Shun expressly told the family members including Hau Sun Chiu and Hau Ping Ho and her husband Mak Yan Tung that he wanted his adopted son Hau Ying Fat to take charge of his funeral and all after life matters.

151.  Apart from the evidence of Hau Ying Fat, his adoption was also supported by the evidence of Hau Yuen Kwong.  There is no reason not to accept his evidence especially in conjunction with other supportive evidence.

152.  Apart from the occasion in 1990, the evidence as to what took place at the death bed of Hau Look Shun is also important. According to Hau Yuen Kwong, on that occasion it was Hau Sun Chiu who demanded that Hau Ying Fat being the adopted son of Hau Look Shun must be asked to come.  This incident was also supported by the evidence from Hau Ying Fat.  In this connection the evidence from Hau Yuk Chun that she was present at the death bed must be rejected.  Apart from her general lack of credibility alluded to above, and the numerous occasions in cross-examination that she was found to be inventing things, the evidence did not sit well with the totality of the evidence that her relationship with the Hau family was extremely loose.

153.  The adoption was also supported by the evidence recorded in the taped conversation at the 2^nd Meeting, in that everyone present at the meeting would appear to accept that Hau Ying Fat was the successor of Hau Look Shun and that Hau Look Shun has a successor.

D5.1.3   Evidence form independent witness

154.  The adoption was supported by the independent witness Hau Kan Po.  In cross-examination, he confirmed that Hau Ying Fat’s adoption was generally known to many at Ho Sheung Heung and he further related to the court a particular incident of his traveling with Hau Look Shun to Sheung Shui and in the course of the journey, Hau Look Shun confirmed that he had Hau Ying Fat as his adopted son to take care of his affairs upon his death. 

155.  On top of that there was also evidence in cross-examination of Hau Ying Fat that since this proceedings, (i) on a recent occasion of worship at the ancestral hall, he met Aunt Shun Choi and (ii) on another occasion a couple of years ago, he met the mother of Hau Wing Leung (village representative), and on discussing about this present case, both Aunt Shun Choi and the mother of Hau Wing Leung said things to the effect that they were aware of his adoption when he was a child,and that many senior members in Ho Sheung Heung was aware of his adoption.  Further, Hau Ying Fat was given Hau Look Shun’s share of the Hung Ancestor distribution, without any query being raised as to his entitlement.

D5.1.4   The events after the death of Hau Look Shun

156.  There is no dispute that upon the death of Hau Look Shun, Hau Ying Fat immediately took physical possession of all his belongings as well as his house at G4 of Ho Sheung Heung.  This was done without any objection from all family members including Hau Sun Chiu.  This is clearly indicative that all family members accepted that Hau Ying Fat was the adopted son of Hau Look Shun entitled to succeed and take over his properties.  There was no challenge to this piece of evidence.

157.  There was also the clear evidence from Hau Ying Fat and Hau Yuen Kwong that after the death of Hau Look Shun, Hau Ying Fat invited other male members to House G4 to clean the house and to search for the papers and other belongings of Hau Look Shun.  Hau Ying Fat was the person with the key to Hau Look Shun’s house and who received the other male members for the occasion.  There were Hau King Wai, Hau Yuen Kwong, Hau Sun Chiu and Hau Tak Yan present.  There was no female member present on this occasion.  During that occasion, Hau Sun Chiu announced that Hau Ying Fat was the adopted son and he (Hau Ying Fat) would succeed to Hau Look Shun’s estate and if anyone should have any objection, please say so.  There was no one objecting.  Hau Sun Chiu made the announcement because he was the uncle, and Hau Yuen Kwong in his evidence further explained that he thought Hau Sun Chiu saw the need of saying so probably because Hau Sun Chiu was worried that Hau Tak Yan may not be aware of the adoption of Hau Ying Fat.

158.  On the same occasion, Hau Ying Fat assumed the role of the successor of the property of Hau Look Shun and he let others to take some articles left behind by Hau Look Shun, and in fact Hau Yuen Kwong took a watch.

D5.1.5   The funeral, tablet & grave of Hau Look Shun

159.  Hau Ying Fat proceeded swiftly to hold the funeral.  He was in charge of the funeral and took up the responsibility of 擔幡買水.  He also performed other duties listed out at para 30 of his witness statement.  The tablet of Hau Look Shun has since been kept and worshipped by Hau Ying Fat in his residence.  It was at Hau Ying Fat’s request that Hau Look Shun was included in the consolidated grave when it was built in 2004.

D5.2   Challenges made by the Defendants

160.  Realising the importance of the role of the successor or adopted son in the funeral, and in the hope of challenging the plaintiffs’ case that Hau Ying Fat was the adopted son, the defendants through Hau Yuk Chun sought to say that (i) Hau Look Shun had wanted Hau Tak Yan to be his adopted son; (ii) it was Hau Sun Chiu who took charge of the funeral and it was only Hau Ping Ho who directed Hau Ying Fat to擔幡買水; and (iii) it was only after the funeral and towards the end of 1995 that there was a meeting at House G4 attended by Hau Sun Chiu, Hau Ping Ho, Hau Yuk Chun, Hau Yuen Kwong, Hau Ying Fat and Hau Tak Yan during which it was suggested by Hau Ping Ho that Hau Ying Fat should be the successor.  To embellish the story, she further said that Hau Sun Chiu then said that Hau Ying Fat should be responsible for all funeral expenses. She further alleged that Hau Yuen Kwong told Hau Ying Fat that if Ying Fat should become the adopted son, he would not have any right to inherit the estate of Chung Kam Yung unless it was as a gift by his other brothers.  She further alleged that Hau Sun Chiu then said he would arrange for the signing of the documents for the adoption.

161.  Apart from her general lack of credibility, I agree with the plaintiffs that none of the above allegations by Hau Yuk Chun can be accepted: –

(1) Apart from the bare allegation that Hau Look Shun had once indicated to Hau Yuk Chun of his wanting to adopt Hau Tak Yan, there was no other supporting incident or event which showed any affection between Hau Look Shun and Hau Tak Yan.

(2) The suggestion that Hau Sun Chiu took charge of the funeral and paid the expenses was contrary to the documentary evidence of the record of the Grieve Money kept by Hau Ying Fat, which showed that Hau Ying Fat took and kept the money.  If it was Hau Sun Chiu who paid for and was in charge of the funeral, there was no reason for the Grieve Money to be kept by Hau Ying Fat, nor for Hau Sun Chiu to pay any grieve money to Hau Ying Fat.

(3) Unless it is recognised by all Hau members that Hau Ying Fat was the adopted son and successor, there was no reason for Hau Ying Fat to assume the role of 擔幡買水.  Even accepting Hau Yuk Chun’s explanation that Hau Sun Chiu being older than Hau Look Shun should not do it, unless it was recognised that Hau Ying Fat had a special position, otherwise the one who did it must be Hau King Wai, being the eldest nephew of the first stirpes, or Hau Tak Shing, being the eldest of the next generation. The suggestion by Hau Yuk Chun that there was a fierce argument between Hau Sun Chiu who proposed someone whose identity she (Hau Yuk Chun) could not tell, and Hau Ping Ho who proposed Hau Ying Fat was simply unbelievable.  There must be some strict rule of customs within the village to decide the precedence of who should carry out the 擔幡買水.

(4) The suggestion that there was a meeting sometime after the funeral to discuss and decide that Hau Ying Fat should be the adopted son is simply not logical.  The event before the funeral and during the funeral clearly showed that Hau Ying Fat had already carried out the function of the adopted son and so why should it be necessary for another meeting to decide on the person to be the adopted son.  Moreover, the suggestion that Hau Sun Chiu would go and organize the signing of an adoption document clearly did not take place.  I agree that plainly Hau Yuk Chun made this up to dovetail with her evidence that subsequently she was tricked into signing the Deed of Family Arrangement and the Deed of Gift, believing that they were simply adoption documents.

162.  The defendants may also rely on the following matters to show that there was no adoption:

(1) After the alleged adoption, Hau Ying Fat appeared to continue to stay with his natural family and was taken care of by his natural family.

(2) When he signed the form to apply for succession of the property of Hau Look Shun, he claimed that he was the nephew of Hau Look Shun and not adopted son.

(3) He did not insist on applying for a grant of administration of the estate of Hau Look Shun, and let Hau Sun Chiu to be the applicant and administrator.

(4) He was one of the joint successors of the property of his father, and he was entitled to a share of the estate of his natural mother.   Hence he was caught by the general rule that an adopted son could not inherit in more than one of the families.

(5) He did not have a formal document like “Chuk Shu (祝書)” to evidence the adoption.

163.  There is no rule or requirement that after an adoption the adopted son must stay with the adopted family or may not live with his natural parents’ family.  In the case of a posthumous adoption, the adopted son may not have seen his adopted parents at all.  In the present case, Hau Look Shun worked in a ship and was often away from home, and in the circumstances, it is natural that Hau Ying Fat would be taken care of by his natural family.  Furthermore, it would appear that Hau Look Shun was not a person of means, but on the other hand, Hau Yuk Chiu after his emigration to the United Kingdom would appear to be doing well, so much so that he could afford to have his wife and his children joining to live with him and be educated in the United Kingdom.  Hau Ying Fat was brought to the United Kingdom only after Hau Look Shun had been consulted and had agreed.  In the circumstances, I agree that the fact that Hau Ying Fat did not live with Hau Look Shun is not indication that he was not adopted, and certainly could not be evidence that he has reverted back to his natural family after the adoption.  At any rate, the very fact that on the death of Hau Look Shun, Hau Ying Fat performed all the rituals of the adopted son showed clearly that there was no reverting to his natural family or abandonment of his adopted son status.

164.  The fact that he described his relationship with Hau Look Shun as uncle/nephew in his application for succession did not indicate that Hau Ying Fat did not consider himself as an adopted son.  First, Hau Look Shun was in fact his uncle biologically.  Secondly, under Chinese Law and Customs, Hau Look Shun not having a natural son, as his nephew, Hau Ying Fat was entitled to apply for succession.  Whether there were anyone competing with him as successor had already been resolved because everyone in the family accepted that he was the adopted son and was entitled to succeed the estate.  At any rate, it is not the defendants’ case that there was no recognition of Hau Ying Fat as adopted son.  Even on the defendants’ version an agreement was reached to have him as adopted son in the family meeting albeit after the funeral and so by the time of his application for succession, he could have no doubt that he had the status of an adopted son.

165.  The reason for arranging to have Hau Sun Chiu to apply for the grant is one of convenience as explained in Hau Ying Fat’s witness statement.  Indeed, it must be an arrangement for convenience because this would save the trouble of proving an adoption, and also serve the purpose of Hau Sun Chiu to make sure that he could get the land that he said Hau Look Shun had promised him.   That this was for convenience is further supported by the fact that shortly after the grant, there was the arrangement through the means of Deed of Family Arrangement, Assent and Deed of Gift whereby in fact all other known properties of Hau Look Shun at the time were eventually all assigned to Hau Ying Fat on 7 January 1999.

166.  There was no other possible explanation as to why Hau Sun Chiu, Hau Ping Ho and also even Hau Yuk Chun would have agreed to such arrangement of giving all properties to Hau Ying Fat, had it not been the fact that Hau Ying Fat was the rightful successor to Hau Look Shun.  Hau Yuk Chun’s explanation that she was tricked into signing the documents believing that they are just documents for the adoption of Hau Ying Fat is simply unbelievable.

167.  I further agree the fact that on 13 September 1983, Hau Ying Fat as one of the four beneficiaries had obtained succession to the land of Hau Yuk Chiu does not mean that he must be taken to have reverted to his natural family and could not succeed to the estate of Hau Look Shun.  In this respect it is to be noted that Hau Ying Fat did not personally execute the succession.  It was done at a time when he was in the United Kingdom by Hau Yuen Kwong as his trustee, and at a time when he had not reached the age of majority.  The arrangement was a matter of gift by his siblings to him.

168.  Hau Look Shun died intestate on 2 November 1995.  The distribution of his estate is governed by section 4 of the Intestate Estates Ordinance, under which as the adopted son of Hau Look Shun adopted under Chinese Law and Customs before the commencement of the Adoption Ordinance, Hau Ying Fat is entitled to the estate of Hau Look Shun as the lawful issue of Hau Look Shun.  Whether he would otherwise be disqualified under Chinese customary law from receiving the estate because he had already received property from his own natural family is thus wholly irrelevant.

169.  At any rate, even under Chinese Law and Customs, the mere fact that the adopted son having changed back his name to that of his original family and had accepted and succeeded to property of his natural parents was held by the court not sufficient to show that the adopted son had returned to his original family and as such would be disentitled to succeed to the property of the adopted family [see: Tang Cho Sang Wayne v Chim Siu Wai, HCA 6666 of 1993 (Judgment dated 13/06/95), and the decision was affirmed by the Court of Appeal in CACV 163 of 1995 (Judgment dated 1/12/95)].  It can further be noted that in that case, there was in fact no evidence of the adoption ceremony at all and the main evidence on the adoption was the announcement by the adopting father that he adopted the Plaintiff as his son. 

170.  In relation to the assets of Chung Kam Yung, the position is that she made a will appointing Hau Ying Fat as her executor.  It is thus a matter of gift and not inheritance.  In any event, the evidence was that Hau Ying Fat had voluntarily given up his right as a named beneficiary of Chung Kam Yung’s estate by instruments executed between 6 December 2010 and 6 April 2011, well before the commencement of these proceedings.

171.  The un-contradicted evidence is that at Ho Sheung Heung, adoption could be carried out rather informally.  The same is also corroborated by the statement of Hau Ping Ho who unfortunately died shortly after the commencement of this action.  The 祝書 is plainly the document by which the adoption of Hau Fook Sui was evidenced.  Hau Fook Sui’s 祝書 was not signed by Hau Hing Sau for the obvious reason that it was a posthumous adoption.  The adoption of Hau Ying Fat took place when he was young when Hau Look Shun was alive.  At any rate, there was no point in Hau Ying Fat’s arranging for a 祝書 or a post event record of the adoption when no one has ever challenged the adoption.

172.  Accordingly, for the reasons set out above, I agree that Hau Ying Fat’s status as the adopted son and his right to the intestate estate of Hau Look Shun is well established. 

173.  The defendants also contend in their Closing that as a matter of Chinese Law and Customs, Hau Look Shun did not have the capacity to adopt.  I agree that the contention is unsustainable, and indeed contrary to the expert evidence, including that of the defendants’ own expert Professor Baker.

(1) Both Professor Palmer and Professor Baker agree that the Ching Code, in particular Section 78 Sub-statute 5 “is silent on inter vivos adoption by an unmarried man” and it only “does not condone the posthumous appointment of a successor to an unmarried man except in specified circumstances”.  Clearly, it is never the experts’ view that inter vivos adoption by an unmarried man is unlawful under Section 78 Sub-statute 5.  Hau Look Shun’s adoption of Hau Ying Fat was done inter vivos.  Therefore, it was never the experts’ view that Hau Look Shun’s adoption of Hau Ying Fat, which on the plaintiffs’ case had taken place during Hau Look Shun’s lifetime, is unlawful under Section 78 Sub-statute 5.

(2) Professor Baker’s evidence in cross-examination further clarified that under the Ching Code (i) it is not a legal impossibility for unmarried man to adopt; (ii) certain grounds for an unmarried man to adopt have been spelt out in the code; and (iii) but there is no specific prohibition against and it is not illegal for adoption by an unmarried man even if he does not fall within those grounds.  I agree that that is really the end of the defendants’ case on Hau Look Shun’s lack of capacity to adopt.

(3) Insofar as Professor Baker had suggested in the First Joint Report that the Ching Code prohibits adoption by an unmarried man and the only exceptions are those set out in the code, Professor Baker has retracted from it in the Second Joint Report and in his oral evidence.  Further, even in the First Joint Report, it was never the position of Professor Palmer that an unmarried man cannot adopt under the Ching Code.

(4) The examples cited by Professor Palmer clearly illustrate the point that an unmarried man can adopt – (i) the example of Hiu Yat taking an adopted son though he was never married; and (ii) the decision of the Dailiyuan, are clear illustrations that there were no such alleged prohibition against adoption by an unmarried man during his lifetime.

(5) Professor Baker is unable to offer any rationale for making it unlawful for an unmarried person to adopt.  On the other hand, as Professor Palmer pointed out, the rationale for adoption by an unmarried man is the tremendous importance to continue the descent line; and therefore unmarried man quite often did adopt, and his marital status being unimportant but what is important is the need to continue the descent line.

D6.   The “fan ka (分家)” issue

174.  The plaintiffs submit that this issue was raised by the defendants as a desperate attempt to frustrate the plaintiffs’ claim against them for breach of trust and misappropriation of the estate of Hau Fook Sui, to which the defendants would otherwise have no defence.  Plainly the defendants hoped that by raising this issue, the plaintiffs may be prevented from getting an order for the defendants to disgorge the land assigned to Hau Tak Cheung and Hau Wing Yin even though they had paid lip service in saying that they were willing to do so. 

175.  The relevant pleadings on “fan ka” is paragraphs 24(4) and 36 to 44 of the Defence and Counterclaim.  It is important to note that in paragraph 44, after referring to the matters pleaded, the defendants merely asserted that [they] “held a genuine belief that the 1^st Fong and/or Keith had taken their and/or his inheritance in accordance with Chinese customary law…and were no longer entitled to succeed as male beneficiaries of the Ancestor’s Estate”.  I agree the pleading is plainly insufficient to properly raise the issue, as the defendants’ own belief genuine or otherwise is neither here nor there.

176.  The Defendants relied heavily on the letters written by Hau Chi Kin (on behalf of Chung Kam Yung) of 10 October 1979, the letter written by Hau King Wai of 15 July 1980 and also the draft will of Hau Fook Sui dated May 1982 to support their case of “fan ka”.  It was even suggested that these were the evidence unearthed by the defendants since the 2^nd Meeting of May 2013 that backed up their belief on “fan ka”.  On the other hand, the plaintiffs submitted that quite to the contrary, these documents showed conclusively that there was no “fan ka”.

177.  The letter of 10 October 1979 made it clear that Chung Kam Yung was asking Hau Fook Sui for some field to cover the expenses of the veneration of the ancestor (“香油火”) which fell on the 1^st “fong”.  The letter made it very clear that she was not asking Hau Fook Sui for any division of the estate (“我們不是要阿爺過遺產”), and the 2 things are separate (“一事還一事”).  In relation to the division of the estate, it is entirely up to Hau Fook Sui as to how he would distribute his estate.  As to the custom of whether the 1^st “fong” should be given something for veneration of the ancestor, she asked rhetorically whether Hau Fook Sui had consulted other village elders.  Plainly this is not a demand for distribution of estate or land of Hau Fook Sui.

178.  Hau King Wai’s letter of 15 July 1980 was written in response to a letter from Hau Fook Sui’s wife to him suggesting that there would not be an extra share of the ancestral property to be given to the 長子嫡孫.  Hau King Wai’s letter made it clear that there was certainly no demand for any share to be given to the eldest son (長子) although he believed that there was such a custom in the village and would ask Hau Fook Sui to consult other village elders as to whether there was any need to make such provision for the eldest son.  As to the share to him as the 嫡孫, he would not ask Hau Fook Sui to give him anything and everything was up to the wish of Hau Fook Sui.  Furthermore, in relation to the suggestion that the property would be divided into 3 equal shares with one share given to his family (the 1^st “fong”), Hau King Wai’s response was that he could not represent the 1^st “fong” and urged Hau Fook Sui to consult his other siblings.  Again this letter made it clear that Hau King Wai did not ask for the division of any property either for himself or for his deceased father.  Furthermore, it is clear that Hau King Wai expressly disclaimed that he could represent the 1^st “fong”.

179.  The probative value of the draft will must be considered in the light of the fact that it was not executed.  At any rate, on its face it showed in May 1982, Hau Fook Sui was considering that he would give certain properties to his 3 sons in equal shares, and he would reserve some land for his own support and that upon his death, the land should be left to his 3 sons to keep.

180.  The uncontroversial fact is that on 7 August 1973, Hau Fook Sui gave House G5 to Hau Yuk Chiu.  Some 6 years later, on 22 November 1979, he gave House G6 to Hau Sun Chiu and House G4 to Hau Look Shun. In the meantime, in 1975, he swapped some land with Hau Tai Hong and the exchanged land (Lot 1486B) was divided also amongst his 3 sons, with Hau Sun Chiu getting a larger piece because of his having chipped in some money.

181.  Since the date of the draft will, on 31 December 1982, he gave Lots 207 and 833 to Hau Sun Chiu, Hau Look Shun and Chung Kam Yung in equal shares.  It is quite clear that the share to Chung Kam Yung may be treated as the share to the 1^st “fong”.

182.  On 11 May 1983, he gave Lot 975 to Hau King Wai.  When Professor Baker was asked as to whether this would amount to “fan ka”, the clear answer is an unqualified “No”.  Plainly it could not be “fan ka”, because (i) this piece of land was only acquired by Hau Fook Sui on 1 March 1920 and is not ancestral land; (ii) for over 7 years since he gave this piece of land to Hau King Wai, he did not distribute any land to his other sons and if this was part of the “fan ka”, then one would expect that he would continue to make some distribution of land to Hau Sun Chiu and Hau Look Shun; (iii) none of the features commonly associated with “fan ka” as listed in paragraph  41 of the expert opinion of Professor Baker was present.

183.  I agree that Hau King Wai’s evidence on the circumstances of his being given this piece of land as stated in paragraph 41 of his witness statement should be accepted.  Plainly the land was given to him because of his contribution towards the upkeep of Hau Fook Sui and possibly also because of his position as being the 長子嫡孫.  It is possible that after consulting some village elders, Hau Fook Sui felt that Hau King Wai deserved a gift from him. 

184.  I further agree that the evidence from Hau Yuk Chun that Chung Kam Yung had fiercely demanded Hau Fook Sui to divide his estate cannot be accepted.  This is contradicted by the clear terms of the letter of 10 October 1979, and Hau Fook Sui could not have mistaken that what she wanted was not the division of the property but rather some property to provide for the 1^st “fong” to discharge their duties on the veneration of the ancestors (“香油火”).

185.  The further evidence from Hau Yuk Chun that Hau Fook Sui had said that after giving the land chosen by Chung Kam Yung he would leave the rest of his lands to Hau Sun Chiu and Hau Look Shun is not believable because apart from the lack of creditability of Hau Yuk Chun, the solid fact is that there was a lot of opportunity for Hau Fook Sui to give land to Hau Sun Chiu and Hau Look Shun since 11 May 1983 and he had not done so.  In the circumstances, the only reasonable inference to be drawn is that Hau Fook Sui would treat the 6 undistributed pieces of land to be left for his own upkeep and as evidenced from his draft will, upon his death, those land would be for his 3 sons.

186.  Certainly there could be no basis for suggesting that Lot 975 was given to Hau King Wai as representative of the 1^st “fong”.  In fact, in the letter of 15 July 1980, Hau King Wai had already made it clear that he could not represent the 1^st “fong”.  The suggested disqualification of Hau King Wai personally to any benefit in the estate whether as 長子嫡孫 or otherwise does not assist the defendants’ case, as even then the 1^st “fong” would nevertheless be entitled to 1/3 share of the estate (on the assumption that Hau Sun Chiu had not been adopted to Hau Man Sau’s lineage).

187.  In any event even if there was any “fan ka”, the consequence is still that the undistributed property of Hau Fook Sui would still be divisible amongst the families of his 3 sons according to the expert evidence of Professor Baker [see: paragraph 43 of his Opinion].  In any event, this cannot be a case where Hau Fook Sui has made up his mind not to make any distribution of his property, as plainly he did distribute his property fairly and evenly amongst his 3 sons between 1973 and 1982. 

188.  However, in this respect, it is important to note that whatever was the intention of Hau Fook Sui on how his estate was to be distributed after his death, short of making a valid will, his estate would have to be distributed in accordance with Chinese Law and Customs applicable to Ho Sheung Heung.  Accordingly, despite the apparent wish of Hau Fook Sui that Hau Sun Chiu should also benefit from his estate, the adoption of Hau Sun Chiu to the lineage of Hau Man Sau would disqualify Hau Sun Chiu from benefiting from Hau Fook Sui’s estate.

E.   CONCLUSION AND DISPOSITION

189.  For the reasons set out above, I find in favour of the plaintiffs on all 5 main issues in dispute between the parties.

190.  Accordingly, I make an order in terms of paragraphs (1) to (12) and (16) of the prayer for reliefs of the Statement of Claim.

191.  I grant the plaintiffs liberty to apply in respect of paragraphs (13), (14) and (15) of the prayer for reliefs of the Statement of Claim.

192.  I order that the counterclaim by the defendants against the plaintiffs be dismissed.

193.  I further order that the defendants do pay to the plaintiffs the costs of this action and the defendants’ counterclaim, such costs to be taxed if not agreed.

194.  The above order as to costs is nisi and shall become absolute in the absence of any application within 21 days to vary the same.

195.  Lastly, I thank counsel on both sides for their helpful assistance in this matter.