MAK NGUN TAI AND OTHERS v. FUNG MING IP AND ANOTHER

HCAP 37/2015

[2020] HKCFI 2150

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PROBATE ACTION NO 37 OF 2015

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DECISION

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The appeal

1.  This is the appeal of the Plaintiffs (“P1”, “P2”, “P3”, and collectively “Ps”) against the Decision of the learned Master given on 13 May 2020 (the “Master Decision”) granting the application of the 2^nd Defendant (“D2”) made by Summons of 28 November 2019 (“D2’s Summons”) to strike out §11 and prayer (f) of the Amended Statement of Claim (the “ASOC”) insofar as they concern her.

2.  The main issue is whether the ASOC has disclosed a reasonable cause of action against D2 that the Deceased made the “purported will” (as defined below) “under undue influence … exercised by [D1], [D2] and/or other parties or any combination of them”.

The facts

3.  The following facts are taken from the ASOC.  They are for the purpose of this appeal taken to be true in favour of Ps.

4.  The Deceased died on 18 September 2014 in Hong Kong.

5.  The Deceased had 5 daughters.  One had predeceased her. 

6.  Ps are 3 of the Deceased’s daughters.  D2 is the other one. 

7.  At §7 of the ASOC, Ps plead that:

“ This action is commenced without the knowledge or consent of [D2]. She is joined in this action so that, at least, she, as one of the potential beneficiaries of the estate of the Deceased, can be bound by the outcome of this action. She has subsequently been informed of this action. She has not yet filed any Defence.”

8.  D1 was a good friend of D2.  He spent a lot of time at her residence. At §8 of the ASOC, Ps plead that D1 claims to be the executor of an English will made by the Deceased on 7 October 2013 (ie the purported will) and that he is solely entitled to the estate of the Deceased under the will.  On the face of the purported will, it was made in the presence of a solicitor and a clerk.

9.  Ps plead[1] that they are entitled to and do demand D1 to propound the purported will in solemn form if D1 intends to apply for the purported will to be admitted to probate.  Ps’ demand is made without prejudice to their case challenging the validity of the purported will.

10.  At §11 of the ASOC, Ps plead that:

“ [Ps] contend that the Deceased did not have the requisite testamentary capacity, and/or knowledge and approval of the contents of the [Purported Will]. Alternatively, they contend that the Deceased made the [Purported Will] under undue influence, subject to discovery and/or administration of interrogatories, exercised by [D1], [D2] and/or other parties or any combination of them. (They reserve the right of naming further parties exercising such undue influence on the Deceased.) The material facts in support of these contentions are set out in paragraphs 12 to 43 hereinbelow. They also serve as particulars under O.18, r.12 and O.76, r.9(3) of the Rules of High Court in support of the plea.”

11.  Facts in purported support of the plea are then pleaded in §§12 to 43 of the ASOC.  Mr Yau, counsel for Ps, summarizes them in his written submissions under a number of heads[2]:

 (a) “The Deceased and her children” — that D1 was a good friend of D2, who was often present in D2’s residence;

 (b) “The Deceased’s character and her attitude towards making a will” — that the Deceased was wealthy but a miser.  She had before she moved to (or was moved to) live with D2 told Ps that she did not trust D2 and would not make a will;

 (c) “The Deceased’s illiteracy, infirmity and dependence on others” — that the Deceased was illiterate, had shown symptoms of obsessive compulsive disorder, highly irritable, and had been diagnosed to have suffered significant cognitive impairment;

 (d) “The Deceased’s living arrangement before and after October 2011” — that after her cataract surgery in about September 2011, she moved in (or was caused to move in) with D2 at locations more remote than where the Deceased used to live.  She was effectively cut off from regular communications with Ps;

 (e) “The Deceased’s relationship with [Ps] became strained as a result of [D2’s] untruthful accusation” — that Ps heard from the Deceased saying that they did not want her to regain her eyesight because they were not willing to pay for the costs of the cataract surgery.  That was untrue;

 (f) “The Deceased’s heavy reliance on [D1] and [D2] — the power‑dependency relationship between them” — that the Deceased relied heavily on D1 and D2 for her daily living;

 (g) “The highly suspect transactions” — that the investigation conducted by the Administrator pendente lite of the Deceased’s estate (“APL”) into the Deceased’s affairs during the last 3 years of her life shows that since December 2011 (the “relevant period”), the Deceased made a number of inter vivo dispositions to D2’s son, D2’s elder daughter and D2’s husband.  Those transactions were bewildering, and “raised a red flag that [the Deceased] was either incapable of exercising independent judgment of her own or she was doing that under coercion or illegitimate pressure from those close to her.  It must be borne in mind that the disputed will was made during the relevant period.  The Court is entitled to draw the inference that the execution of the disputed will was also obtained by such means”[3].

12.  At paragraph (f) of the prayer, Ps seek that “costs of [Ps’] claim be borne by [D1], and where appropriate by [D1] and [D2]”.  If §11 of the ASOC in so far as D2 is concerned is to be struck out, §(f) of the prayer will similarly and consequentially also have to be struck out.  The reverse is also true.

D2’s application to strike out

13.  By Summons taken out on 28 November 2019, D2 seeks an order that §11 and prayer (f) of the ASOC, in so far as they concern her, be struck out.  The application is based solely on the limb that the ASOC discloses no reasonable cause of action in that regard against her. 

The law on striking out

14.  The law on striking out is not in dispute.  I refer to the summary of the legal principles by the Court of Appeal in LYYC v CHL & CSMS [2019] HKCA 521 at §12.  I highlight the following principles, that:

 (a) when considering an application to strike out a statement of claim based on the no reasonable cause of action limb, the pleaded facts are to be assumed to be true in favour of the plaintiff;

 (b) as explained in the Hong Kong Civil Procedure 2020:

 (i) at §18/19/4, that:

“ It is only in plain and obvious cases that the court should exercise its summary powers to strike out the indorsement on any writ or any pleading under this rule … The claim must be obviously unsustainable, the pleadings unarguably bad and it must be impossible, not just improbable, for the claim to succeed before the court will strike it out.”

 (ii) at §18/19/5, that:

“ A reasonable cause of action means a cause of action with some chance of success when only the allegations in the pleading are considered … So long as the statement of claim or the particulars … disclose some cause of action, or raise some question fit to be decided by a judge or jury, the mere fact that the case is weak, and not likely to succeed, is no ground for striking it out …

   Where a pleading is defective only in not containing particulars to which the other side is entitled, application should be made for particulars under r.12, and not for an order to strike out the pleading under this rule.  Even a serious want of particularity in a pleading may not justify striking‑out if (1) the defect can be remedied, and (2) the defect is not the result of a blatant disregard of court orders (British Airways Pension Trustees Ltd v Sir Robert McAlpine [1994] 72 B.L.R. 26).”

Undue influence in executing a will

15.  There is no dispute between the parties as to the approach to be adopted in considering a plea of undue influence in the execution of a will.  As summarized by Lewison J in Re Edwards [2007] EWHC 1119 at §47[4]:

“ i) In a case of a testamentary disposition of assets, unlike a lifetime disposition, there is no presumption of undue influence;

ii) Whether undue influence has procured the execution of a will is therefore a question of fact;

iii) The burden of proving it lies on the person who asserts it. It is not enough to prove that the facts are consistent with the hypothesis of undue influence. What must be shown is that the facts are inconsistent with any other hypothesis. In the modern law this is, perhaps no more than a reminder of the high burden, even on the civil standard, that a claimant bears in proving undue influence as vitiating a testamentary disposition;

iv) In this context undue influence means influence exercised either by coercion, in the sense that the testator's will must be overborne, or by fraud.

v) Coercion is pressure that overpowers the volition without convincing the testator’s judgment. It is to be distinguished from mere persuasion, appeals to ties of affection or pity for future destitution, all of which are legitimate. Pressure which causes a testator to succumb for the sake of a quiet life, if carried to an extent that overbears the testator’s free judgment discretion or wishes, is enough to amount to coercion in this sense;

vi) The physical and mental strength of the testator are relevant factors in determining how much pressure is necessary in order to overbear the will. The will of a weak and ill person may be more easily overborne than that of a hale and hearty one. As was said in one case simply to talk to a weak and feeble testator may so fatigue the brain that a sick person may be induced for quietness’ sake to do anything. A ‘drip drip’ approach may be highly effective in sapping the will;

vii) There is a separate ground for avoiding a testamentary disposition on the ground of fraud. The shorthand used to refer to this species of fraud is ‘fraudulent calumny’. The basic idea is that if A poisons the testator’s mind against B, who would otherwise be a natural beneficiary of the testator's bounty, by casting dishonest aspersions on his character, then the will is liable to be set aside;

viii) The essence of fraudulent calumny is that the person alleged to have been poisoning the testator’s mind must either know that the aspersions are false or not care whether they are true or false. In my judgment if a person believes that he is telling the truth about a potential beneficiary then even if what he tells the testator is objectively untrue, the will is not liable to be set aside on that ground alone;

ix) The question is not whether the court considers that the testator’s testamentary disposition is fair because, subject to statutory powers of intervention, a testator may dispose of his estate as he wishes.  The question, in the end, is whether in making his dispositions, the testator has acted as a free agent.”

16.  Relying on Hall v Hall (1868) LR 1 P & D 481, Mr Wong, counsel for D2, also submits that coercion and illegitimate pressure are the cornerstone of undue influence in relation to execution of wills.

17.  In respect of the approach explained by Lewison J in Re Edwards, the only matter which Mr Yau, counsel for Ps, seeks to highlight concerns sub‑paragraph (iii) thereof.  He submits[5] that what Lewison J observed therein refers to the standard of proof which the body of admissible evidence relied upon by the asserting party should satisfy in making out a case of undue influence “at the end of the day”.  He submits that for the purpose of this appeal, “the Court only needs to be satisfied that the facts stated on the pleading have disclosed a prima facie case of undue influence”.

18.  In respect of the issue before this Court, I accept the submissions of Mr Wong, counsel for D2[6], that the issue simply is “whether the allegations pleaded in the ASOC, when assumed to be true, are sufficient to constitute a reasonable cause of action against D2 for undue influence”.  The phrase “no reasonable cause of action” is used in Order 18 rule 19.  Its meaning has been considered in many authorities.  I see little point in adding to the formula the term “prima facie case”, which Mr Yau is seeking to do.  That also begs the question as to what Mr Yau means by “prima facie case”.

Parties’ submissions

19.  I have set out how Mr Yau summarizes the contents and effect of the ASOC.  He submits further[7] that although D1 was the sole beneficiary under the purported will, the will did not in the end provide D1 with any financial benefit as the Deceased had practically lost her entire wealth during the relevant period.  In that regard, he submits, with reference to a letter dated 24 February 2020 from Ps’ solicitors, that:

“ … the disputed will served the purpose of depriving those who would otherwise benefit under the Deceased’s estate on intestacy the locus standi to pursue against those parties responsible for embezzling the assets of the Deceased during the relevant period.”

Mr Yau submits that the picture painted by the ASOC is one inconsistent with that of a testatrix making a will under her own volition[8]. He concludes at §19 of his written submissions, that:

“ There was really no rational explanation for a testatrix of normal mental power and independence to make a will in these circumstances. The reasonable hypothesis, on the face of the ASOC, is that the Deceased made the disputed will against her own volition under pressure of those in power over her, in particular [D2]. That was quintessence undue influence. In all probability, it is in the final analysis the only reasonable hypothesis even though at the present stage, as stated in paragraph 5 above, it is unnecessary to engage in such exercise.”

20.  Mr Wong submits that the elements of a claim of undue influence in the context of probate are that:

 (a) there was coercion and/or illegitimate pressure exerted on the testator;

 (b) the coercion was exercised by the alleged wrongdoer; and

 (c) the coercion was the cause of overpowering the deceased’s own volition in executing the will in question.

21.  While not necessarily accepting that undue influence has to take the form of coercion or illegitimate pressure, Mr Yau accepts that there has to be undue inference, that the undue influence is exercised by the alleged wrongdoer, and that there has to be causation.

22.  Mr Wong then submits that:

“ 20. … there was no express plea in the ASOC that D2 had exercised any illegitimate pressure and/or coercion towards the Deceased.

…

22. …the absence of a plea of coercion or illegitimate pressure is not one in semantic (i.e. in the failure to use the words ‘coercion’ or ‘illegitimate pressure’), but one of substance where the facts pleaded in the ASOC are insufficient to find a case of [sic] that coercion or undue influence was exercised by D2 even if all of the allegations are proved.

…

  25. …none of the allegations relied on by Ps expressly alleges that D2 was the person who had exercised coercion or illegitimate pressures on the Deceased to cause her to make the Will … [Mr Wong then proceed to analyze the pleaded facts in some details in an attempt to make good his submission.]

…

  34. In the ASOC, there is simply no plea that D2 had taken advantage of the Deceased, and there is no plea as to how this had led to the Deceased’s execution of the Will.  As submitted above, the absence of such pleas is both in form and in substance which is fatal to Ps’ claim against D2.”

23.  On what Mr Yau submits to be the true purpose of the purported will, Mr Wong submits[9] that that amounts to an allegation of fraud, that it is not a point that has been pleaded on the face of the ASOC, and that the unpleaded allegations should be totally ignored for the purpose of this appeal.

Discussion

24.  It is Mr Wong’s submissions that Ps’ plea is bad both in form and in substance.

25.  In relation to the complaint that Ps’ plea is bad in form:

 (a) the only direct plea is made in §11 of the ASOC that “the Deceased made the [Purported Will] under undue influence … exercised by [D1], [D2] and/or other parties or any combination of them”;

 (b) In the ASOC, Ps have not in fact used the words “coercion” or “illegitimate pressure”.  Mr Yau also accepts that;

 (c) Causation has not directly been pleaded;

 (d) There is some force in Mr Wong’s complaint that Ps’ plea against D2 has left much to be desired in so far as form is concerned;

 (e) I on the other hand accept ground (iv) as set out in Ps’ Notice of Appeal, that should the only averment that is regarded as lacking is an express allegation of illegitimate pressure and/or coercion, Ps should be allowed a reasonable opportunity to amend.  That is consistent with the discussion at §18/19/5 of the Hong Kong Civil Procedure 2020.

26.  What is therefore more important for the purpose of this appeal is whether the plea is also bad in substance.

27.  Mr Yau’s contention is that the picture painted by the ASOC “is a picture inconsistent with that of a testatrix making a will under his own volition”.

28.  I bear in mind that this Court is not to conduct a trial on affirmations.  Pleaded facts are assumed in favor of Ps.  I look at the main planks of Ps pleaded case without getting bogged down in fine details.  The following aspects are in my view material:

 (a) the Deceased’s previous character as pleaded;

 (b) she moved in with D2 in the 2^nd half of 2011 until she died;

 (c) during that period, the Deceased had little contact with her other daughters and her younger sister;

 (d) during the period when the Deceased lived with D2 and/or her son, she was in their company and D1.  It was a power‑dependency relationship.  The Deceased heavily relied on those living with her or in her constant company for her daily living;

 (e) the Deceased had mental and cognitive impairment during that period[10]. She displayed signs of anxiety disorder on 23 October 2010.  Her anxiety problem deteriorated when observed on 28 April 2011.  On 21 September 2011, she was assessed by a psychiatrist as having “significant cognitive impairment”, and that she was “not mentally fit to give consent for her eye surgery”.  On 28 August 2014, she was admitted to North District Hospital where she stayed till she died.  During her stay, she was assessed by a psychiatrist as suffering from delirium.

 (f) But starting in December 2011, the Deceased started to terminate her fixed deposits.  Monies were transferred out.  She started to raise loans with bank and finance company for the benefit of others.  She sold 3 of her landed properties during the last 10 months of her life.  The assignment of the last one is dated 5 September 2014, within 2 weeks of her death;

 (g) Out of those transactions outlined above, D2’s son got the  lion   share of HK$37.36 million.  D2’s husband got HK$1.42 million.

29.  For the purpose of the present appeal, I ignore Mr Yau’s submissions on what he submits to be the true purpose of the purported will.  I agree with Mr Wong that that has not been pleaded.  I also ignore the letter dated 24 February 2020 from Ps’ solicitors which Mr Yau has referred to.  This appeal has to be looked at on the face of the pleadings.

30.  However, even with the alleged true purpose of the purported will excluded for the present consideration, the facts pleaded in the ASOC still reveal a case of an old lady with cognitive impairment in the final 3 years of her life, while in a power‑dependency relationship with D1 and D2, and acting out of character, entered into inter vivios transactions apparently to her detriment but to the benefit of D2’s husband and son, and executed a will to a good friend of D2 to the exclusion of Ps.  All those matters are pleaded under the umbrella of §11 of the ASOC, that “the Deceased made the [Purported Will] under undue influence … exercised by [D1], [D2] and/or other parties or any combination of them”.

31.  Undue influence can seldom be proved by direct evidence.  Inferences are normally relied upon.  In particular, the two matters which Mr Wong complains most about, namely whether it was D2 who had taken advantage of the Deceased and whether that led to the purported will, can both at the end of the day be considered and resolved inferentially.

32.  The question then boils down to whether on the facts pleaded on the face of the ASOC, and as a matter of inferences, Ps claim based on undue inference against D2 is “obviously unsustainable”, “unarguably bad ”, and that it is “impossible, not just improbable, for the claim to succeed ”. On my analysis of the pleaded facts as set out above, I am not satisfied that it is. 

33.  On the pleaded facts, I am not satisfied as a matter of substance that this is one of those clear cases for striking out.

34.  Going back to my views expressed above on the question of form, Mr Yau has not placed before me any proposed amendment.  No application for amendment has been made.  It is therefore not appropriate for me to express any further view on any need for amendment.  But given my view on the question of substance, even on the ASOC as it is without any amendment, I am not satisfied that it is impossible for Ps’ claim against D2 to succeed.

Disposition

35.  For the reasons set out above, I allow the appeal, set aside the Master Decision and dismiss D2’s Summons.

36.  I give D1 and D2 35 days from the date of this Decision to file their defence (and counterclaim if any).  Otherwise the Rules of the High Court are to be followed.

Costs

37.  I make a costs order nisi that D2 is to bear the costs of and occasioned by D2’s Summons, both before this Court and in relation to the application before the learned Master (which was disposed of on the papers), to be taxed if not agreed.  For the avoidance of doubt, there will be certificate for one counsel only (covering Mr Yau in so far as Ps’ representation is concerned).  Any application for variation may be made by way of submissions within 14 days from the date hereof.