OFFICIAL ADMINISTRATOR, the Personal Representative of the Estate of LUNG NGA LAI EILLY v. KONG MEI SIN AND OTHERS

[English translation – 英譯本]
HCMP 1793/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1793 OF 2009

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BETWEEN

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J U D G M E N T

1.   This case is about the distribution of the estate of the deceased Madam Lung Nga Lai Eilly (“the deceased”).

The deceased and her estate

2.  The deceased was a spinster, without any next-of-kin.  In her lifetime, she lived by herself at Flat B, 6^th floor, Kai Ming Building, 364-377 Hennessy Road, Hong Kong (“unit 6B”).

3.  The 1^st defendant of this case Madam Kong Mei Sin (“Madam Kong”) and her family members, including her husband Mr. Yip Kin Kwok (“Mr. Yip”) and their 3 minor children, i.e. the 3^rd to 5^th defendants of this case Yip Nga Ching, Yip Nga Man and Yip Wai Lam (collectively referred to as “Madam Kong’s children”), live at Flat A, 6^th floor, Kai Ming Building. They had been the deceased’s neighbours for 20 years.

4.  Sometimes between 1 - 2 p.m. on 31 December 2006, Madam Kong found the deceased unconscious in unit 6B.  She called the police and an ambulance sent the deceased to a hospital, where she was certified dead at about 2.30 p.m. the same day.  The deceased passed away at the age of 65.  The cause of death stated on the death certificate was pneumonia and meningioma.

5.  The deceased did not make any will during her lifetime.

6.  On 8 January 2009, Letters of Administration HCAG 008438/2008 were granted by the Court of First Instance to the Official Administrator, i.e. the plaintiff of this case.

7.  According to the Letters of Administration, the deceased left the following assets (collectively referred to as “the deceased’s estate”):

(1) Unit 6B;

(2) Cash of the amount of HK$41,360 found inside unit 6B (“the cash”);

(3) Deposit of the amount of HK$127,907 (“the deposit in Citibank”) in an account with the Citibank (account number 02340658) (“the Citibank account”);

(4) Deposit of the amount of HK$ 1,006,617.36 (“the deposit in BEA”) in an account with the Bank of East Asia (account number : 015-521-10-050719) (“the BEA account”).

8.  In addition, the deceased, during her lifetime, rented a safe deposit box number 03592 at the Bank of East Asia (“the BEA safe deposit box”).  After the deceased passed away, it was opened for the first time on 31 October 2007.  In it there were title deeds and documents relating to unit 6B, including the Deed of Assignment evidencing the deceased’s ownership of the property (collectively referred to as “the unit 6B documents”), and a passbook of the BEA account (“the BEA passbook”).

9.  Madam Kong wrote a letter dated 23 March 2009 to the Official Administrator, in which she listed the items which, to her knowledge, belonged to the deceased.  Besides the assets mentioned in paragraph 7 above, Madam Kong claimed that the deceased, during her lifetime, had inherited the estate of her mother Madam Chan Man [transliteration of 陳敏].  However, Madam Kong did not provide any further information about the estate which she said the deceased inherited from her mother, and the court has not seen any evidence which shows that the deceased left any other asset.

Issues in this case

10.  On 14 September 2009, the Official Administrator, as the administrator of the deceased’s estate and pursuant to rule 2(2) of Order 85 of The Rules of the High Court, Cap. 4A Laws of Hong Kong, brought this action by way of originating summons to ask the court to determine how the deceased’s estate should be distributed.

11.  Madam Kong was named as the 1^st defendant.

12.  As the deceased had no next-of-kin and died intestate, her estate may go to the Government as bona vacantia by virtue of section 4(9) of the Intestates’ Estates Ordinance, Cap. 73 Laws of Hong Kong; so the Secretary for Justice was named as the 2^nd defendant.

13.  Madam Kong’s children made an application through Mr. Yip, i.e. their father and their guardian ad litem, for allowing them to join as the 3^rd to the 5^th defendants.  On 24 February 2010, Chu J granted the application and consequential amendment was made to the question which the court was asked to determine.

14.  The question, as amended, about the distribution of the deceased’s estate which the court has to determine is: whether Madam Kong and/or any of her children have any valid claim against the deceased’s estate or any part thereof under the doctrine of donatio mortis causa or under a nuncupative will of the deceased (if there exists such a will).

15.  As regards the latter part of the question, it can be summarily disposed of in this way: a nuncupative will is not in written form, so it does not comply with the formal requirements as to a valid will laid down in section 5(1) of the Wills Ordinance, Cap. 30 Laws of Hong Kong.  Exceptions to section 5(1), which are specified in section 5(2) and section 6 of the Wills Ordinance, do not apply to a “nuncupative will” mentioned in this case, because section 5(2) requires that the testamentary intentions should be embodied in a document, while the exemption afforded by section 6 of the Wills Ordinance from complying with section 5(1) is applicable only to a person in actual naval, military or air force service, and a mariner or seaman at sea.

The claim of Madam Kong and/or her children and the factual basis

16.  Madam Kong and her children seek to claim against the deceased’s estate under the doctrine of donatio mortis causa.  This case is no different from any usual civil case.  The party which asserts that a fact is true or makes an allegation bears the burden of proof and the standard of proof is to show that on a balance of probabilities the assertion or allegation is more likely to be true than not true.

17.  The factual basis of the claim of Madam Kong and her children for the deceased’s estate is the contents of the conversations between Madam Kong and the deceased which occurred when there were just the 2 of them within 3 days before the deceased passed away, i.e. between 28 December 2006 and 30 December 2006.  Besides Madam Kong and the deceased, one [sic] else was present or had knowledge of the contents of the conversations.  Therefore, Madam Kong was the only witness who testified in this case.  The credibility and reliability of her evidence are crucial.

18.  Before and after the commencement of this action, Madam Kong, acting in person, filed in court letters and affirmations which she wrote by herself.  There was a large number of such letters and affirmations.  After she made certain corrections to them in court, they were adopted as part of her evidence in chief.

19.  Madam Kong appeared in person at the trial of this case and was cross-examined by Mr. Suen, government counsel for the Secretary for Justice and by Ms. Tsui, counsel for her children. She also answered questions put by the court.

20.  As far as factual issues are concerned, the plaintiff and the other defendants have no respective cases of their own to present to the court, but that does not follow that the court must then totally accept Madam Kong’s evidence.  On the contrary, where the court is dependent wholly on the evidence of a witness who may be a beneficiary of the estate, the court must scrutinize such evidence rigorously; see Birch v Treasury Solicitor [1950] 1 Ch 298, 301 and Official Administrator v Luk Hoi Tong, HCA 1348/2000 (unreported), para. 136.

21.  After reading/hearing the written/oral testimony of Madam Kong, I have the following observations:

(1) Firstly, the first time that Madam Kong wrote to the Official Administrator about the deceased’s estate was on 15 April 2008; that was well over 1 year after the deceased passed away.  Her purpose was to confirm that she had given the key to the BEA safe deposit box to the Probate Registry.  She also expressed her wish that the Probate Registry could complete the administration of the deceased’s estate as soon as possible and she asked to be notified when the Government put unit 6B up for auction, as she would like to bid for the property.  Apart from that, Madam Kong did not make any request relating to other parts of the deceased’s estate.  The second time Madam Kong wrote to the Official Administrator was on 22 October 2008. Her purpose this time was to apply for “borrowing” unit 6B “for [her] use” (in her evidence in chief, she corrected it to be “using” unit 6B).  She also said, “In future, if the Administrator repossesses unit 6B by reasonable and lawful means, I will respectfully return it to the Administrator.”  The contents of these letters are at odds with the allegations and the claim which she made subsequently in relation to the deceased’s estate.

(2) Secondly, the first time when Madam Kong made any allegation or claim to the Official Administrator about the deceased’s estate was 6 days after the date of the 2^nd letter mentioned above, i.e. 28 October 2008, that was nearly 2 years after the deceased passed away.

(3) Thirdly, even though Ms. Kong at last began to prosecute her claim against the deceased’s estate on 28 October 2008, the case she presented oscillated so much so that one was at a loss as to what it really was.  The most disquieting features were that she, on her own initiative, repeatedly stated that she would “give up” (she corrected it to “modify” in her evidence in chief) [her claim for] the deceased’s estate; and that she changed her stance as to the exact items in the deceased’s estate which she claimed; for example, in her letter dated 20 March 2009 written to the Official Administrator, she stated that she “give up [the right to] inherit (borrow)” (in her evidence in chief she changed it to “not give up”) unit 6B; and when she signed, she addressed herself as “Kong Mei Sin, the person who gives up”.  3 days later, i.e. 23 March 2009, she wrote to the Official Administrator again.  This time, she said she intended to pursue her claim for unit 6B, the cash and the deposit in Citibank, but she said the deposit in BEA could go to the Government.  In her letter to the Official Administrator dated 8 April 2009, she expressed the same intention once more.  After that, in her affirmation dated 12 May 2009, she said that she would give up (in her evidence in chief she changed it to “modify”) her claim against the deceased’s estate, and would instead apply for buying the ownership of unit 6B for HK$50,000 (that was the price at which the deceased purchased unit 6B 44 years ago).  However, in her affirmation dated 2 March 2010, she reiterated that she would pursue her claim for unit 6B, the cash and the deposit in Citibank (in her evidence in chief she changed it to be all the deposits).  Finally, when she was giving evidence at the trial of this case, she firmly declared her determination to claim for the whole of the deceased’s estate.

(4) Fourthly, Ms. Kong failed to give a satisfactory and reasonable explanation as to why there was such delay and why she kept changing her stance in the prosecution of her claim against the deceased’s estate.  Ms. Kong even claimed that there were quite a few times when the deceased appeared in her dreams and gave her instructions about her claim against the deceased’s estate.  Furthermore, Ms. Kong referred to occasions on which when she offered sacrifices to the deceased, she would obtain inspirations about her claim against the deceased’s estate.  Such kind of evidence was really a bit out of the ordinary.  As submitted by Mr. Suen, one of the factual issues which the court had to determine was whether the conversations which Ms. Kong alleged in her evidence to have taken place between the deceased and she occurred during the lifetime of the deceased or existed in Ms. Kong’s dreams or whether the knowledge she has about them was part and partial of her inspirations.

(5) Fifthly¸ part of Madam Kong’s evidence seemed to have been exaggerated.  One of the instances was the account she gave about how she attentively took care of the deceased in her daily life because her foot/feet were swollen and could not go out within the 3 days before she passed away.  According to Madam Kong, the deceased gave her $1,000 - $2,000 every day.  Except for [the money given on] 28 December, which was used for paying the management fee for unit 6B and for buying food for the deceased, the rest of the money was all given to Madam Kong to buy gifts and food for her children.  Furthermore, besides giving food to the deceased 3 times each day, each time Madam Kong would stay in unit 6B half an hour to several hours to keep the deceased company and to have “chit-chat” with her. It seemed that the purpose of this part of Madam Kong’s evidence was to highlight the close relationship between the deceased and she and the deceased’s love towards her children, so as to enhance the credibility of her account about the deceased’s making testamentary gifts to her and her children by word of mouth.

(6) Sixthly, starting from 28 October 2009, Madam Kong had written to the Official Administrator 8 times, and had filed in court 6 affirmations. Part of the contents [of these documents] was her answers to questions raised by the Official Administrator concerning her factual allegations about her claim against the deceased’s estate.  However, there were some relevant details which Madam Kong did not mention in any of these written materials, and the first time that such details ever came to light was the moment when she was giving evidence in court; for example, the Official Administrator wrote to Madam Kong on 9 December 2008, asking her to “state clearly the contents of all the conversations between the deceased and Madam Kong about how her real property should be dealt with after her death; the dates on which and the places where such conversations took place, the people who were present and the physical and mental conditions of the deceased”.  In Madam Kong’s reply, she only related what the deceased said within the 3 days before she passed away. However, when she was giving evidence in court, she, for the first time, said that in 1999 when she gave birth to her second daughter Nga Man, she was upset because the child, again, was not a son.  The deceased tried to comfort her and told her that as long as she (Madam Kong) “do not jump out of the window to kill yourself”, she would give unit 6B to her after her death.  Thereafter, from time to time, the deceased mentioned to her that after she died, unit 6B would belong to her.

(7) Seventhly, when Madam Kong was confronted with questions which she found it difficult to answer, or sometimes even when she came across some minor issues which were of no consequence, she would make guesses which were devoid of any factual basis; for example, when she was asked about a piece of paper with the number of the Citibank account and the full English name of the deceased written on it (see paragraph 25(5)(a) below), she admitted that she did not see with her own eyes the writing of the figures and words on the piece of paper by the deceased, and that therefore she was not sure whether they were written in her own hand, yet she not only claimed that the person who wrote these things on the piece of paper was the deceased, but she, for 2 times, said she reckoned that they were written down on the piece of paper by the deceased at the birth of Yip Nga Man.

(8) Eighthly, contradictions cropped up again and again in Madam Kong’s evidence about the beneficiaries and distribution of the deceased’s estate.  In her letters and affirmations, she stated many times that a part, even if not the whole, of the deceased’s estate would be given to her children.  In the letters dated respectively 26 March and 3 July 2009, even the names of Madam Kong’s children appeared and their name chops affixed at the end of the letters at the places for the writer to sign.  Moreover, in the affirmation dated 16 December 2009, there is this sentence “the passbook shall go to the school/schools of the children”, so it seemed to be possible that a part of the estate would be given to the school/schools of Madam Kong’s children.  However, Madam Kong totally refuted these propositionsin her oral evidence. Her claim changed to be this:- She herself was the sole beneficiary of the deceased’s estate, and then after she inherited the estate, she would make her own decision as to whether, when and how distribution was to be made to her children.  Her explanation of the change of her evidence was that :- (1) the version appeared in the letters and the affirmations was a result of writing errors; and (2) the deceased had no reason to give her estate to her children, who were still minors.  The factual issue which must be sorted out was which version of the events, the one represented by Madam Kong’s written statements or the one represented by her oral evidence, was more reliable.  There was certainly one more possibility, i.e. Madam Kong did not clearly and thoroughly understand the deceased’s testamentary intention, so neither version was reliable.

(9) Ninthly, there is another area in Madam Kong’s evidence which is unclear:- In Madam Kong’s 3^rd and 4^th letters to the Official Administrator, she said the deceased had told her that she wanted to go with her to engage a lawyer and to contact the principal of the school where her daughters were studying.  When Madam Kong was questioned about the deceased’s purpose of doing so, she at first said that the intention of the deceased was not to engage a lawyer, and that the deceased’s purpose for contacting the principal was to find a private tutor for her children.  But later, she changed her evidence and said that the purpose of contacting the principal was to find a witness for the name-changing procedure of the BEA safe deposit box.  However, when she was reminded that in her 1^st affirmation she stated that the deceased wanted to ask the principal of her daughters’ school to be a witness, and that she wanted to make a will, Madam Kong said that she did not remember clearly whether the deceased wanted to engage a lawyer, and that she did not know for what purpose the deceased would like to engage a lawyer, but she did not rule out the possibility that the deceased wanted to engage a lawyer for making a will.

22.  The above-mentioned factors compelled the court to be doubly cautious in assessing the overall credibility and reliability of Madam Kong’s evidence.

23.  Having said that, in this same process I also noticed the following:

(1) From Madam Kong’s written statements and her manner in giving evidence, it was not hard to see that she had not received much education; her ability to understand what people said and her verbal skillsin expressing herself were much limited; and she did not understand English, let alone anything about the law.

(2) It appeared that Madam Kong had not sought professional legal advice either before or after the commencement of this action.  Her evidence showed that she had only scanty knowledge about relevant legal concepts and the legal significance of material facts; furthermore, such scanty knowledge of hers was mingled with certain ideas which she picked up from rumours and gossip, and clouded by interpretations which were products of her own mental exercises but were beyond the comprehension of other people.  The court needed not take such evidence too seriously.

(3) Sometimes, in order to bolster their cases,some litigants and their witnesses may conceal and evade certain matters, and may even lie, thinking that these are the correct tactics to achieve their purpose, when in fact it is not necessary to do so.  However, that does not mean that their evidence should be totally rejected for this reason.  The court, in examining the material facts, must still consider the inherent probabilities and see whether they are supported by objective and/or undisputable evidence.

24.  Bearing in mind the above considerations, I also directed my attention to the following:

(1) According to Madam Kong’s observation, the deceased was suffering from diabetes and had to keep away from sugar; she had got cataracts for several years and could not read; within the few days before she passed away, her foot/feet swelled and she could not go up or down a staircase; but other than that, her mental condition was, on the whole, not different from that in her usual days, and she appeared to have a clear mind.  However, the unchangeable fact is that the deceased died from pneumonia and meningioma on 31 December 2006.  Therefore, it was possible that the deceased, to a certain extent, was feeling unwell at the material time.  Madam Kong also gave evidence that several days before her death, the deceased indicated that she did not want to live any more.  Under these circumstances, it is not strange that the deceased thought about how her assets should be disposed of after her death.

(2) The deceased was a spinster and was all along living by herself.  It seemed that she had no friends or relatives except Madam Kong and her family.

(3) Madam Kong and her family had been the neighbours of the deceased for 20 years, and their relationship had always been harmonious.  Before the deceased got the cataracts, she often taught Madam Kong’s children how to do their homework.  It appeared to be true that Madam Kong and the deceased had frequent contacts with each other, that they were in good terms and that they trusted each other; for example, each of them had the keys to the other’s unit; that was the reason why on 31 December 2006 Madam Kong was able to find the deceased unconscious in her home.  Furthermore, Madam Kong took charge of the deceased’s funeral and paid the expenses of it, though she was repaid later.

(4) Under these circumstances, if the deceased intended to give her estate to Madam Kong (and/or her children), there is little to be said against it.  It can even be said that Madam Kong (and/or her children) was/were the person/people most likely to be within the contemplation of the deceased to be the beneficiary/beneficiaries of her estate.

(5) Most importantly, Madam Kong did have possession of the key to the deceased’s BEA safe deposit box.  As stated above in paragraph 8, the indicia of title of the two most valuable items of the deceased’s assets were kept in this safe deposit box.  The court did not see there was any evidence which was sufficient to make one reasonably suspect that Madam Kong came by the key to the BEA safe deposit box in any circumstances other than those found by the court in paragraph 25(5) below.

25.  Having considered Madam Kong’s evidence in its entirety, I am of the view that although there were imperfect and inaccurate areas, sufficient evidence, which was objective and undisputable, was still available to support my making of the following findings of fact:

(1) In the morning of 8 December 2006, the deceased confided to Madam Kong that she “wished that God would allow her to die” and that she would leave all her property to her, but she did not say clearly what property she had.

(2) On the same day, the deceased gave Madam Kong a bunch of 4 keys, including the wooden door key and the iron door key of unit 6B, the letter box key for unit 6B’s letter box situated on the ground floor of the building and the key for opening the iron door at the entrance to Kai Ming Building.  Before that, the deceased had already given Madam Kong the keys to unit 6B as spare keys (because Madam Kong gave the deceased the keys to her unit, namely unit 6A, first, just in case she forgot to bring along her keys and could not enter her unit).  On this occasion, the most important article which the deceased gave to Madam Kong was the letter box key for unit 6B.  With this key, she could open the letter box and receive letters for the deceased.  The keys to unit 6B and the letter box key were strung together on the same key-ring, that was why the keys to unit 6B were at the same time given to Madam Kong again.

(3) In the morning of 29 December 2006, the deceased again told Madam Kong that she felt she was “good for nothing and she wanted to die”, that she would leave everything to Madam Kong and that she could decide how to handle her property.  The deceased did not say clearly what items of property she had.  She just said that all of them were in the safe deposit box in the bank.

(4) In the afternoon of the same day, Madam Kong was in the home of the deceased, helping her to tidy up the place.  When the articles in the drawers were being sorted out, the deceased gave 22 keys, including keys to the rooms in the unit and keys to drawers, to Madam Kong for her to keep them.

(5) In the evening of 30 December 2006, Madam Kong went to the deceased’s home again after dinner to keep her company.  In the course of the conversation between them, the deceased reiterated that she would leave everything to Madam Kong after her death.  At the same time, she gave Madam Kong an old metal candy box, the size of which was similar to that of the bible on the witness box.  Madam Kong opened it and saw that besides some old photographs, Christmas cards, receipts and some odds and ends, it contained:-

(a) One white envelope, in which there was a piece of paper, white in colour, about 8" x 4.5"; on the top right corner there were 2 lines of handwritten English words and figures, namely “Account No.” and “02340658” (the number of the Citibank account); right in the middle of the paper was the English name of the deceased, handwritten in full; see para. 47 of the bundle; this piece of paper was folded in half and an old passbook, the corners of which having been cut off, was wrapped in it;

(b) One plastic bag, in which there was a seal with the deceased’s name engraved on it; the name was blurred but still identifiable; and

(c) One key for opening a safe deposit box in a bank, i.e. the key to the BEA safe deposit box.

At that time, Madam Kong already knew that the deceased kept the “title deeds” to unit 6B in a safe deposit box in a bank. Madam Kong took the metal box to her home in that evening and kept it.

(6) Lastly, on this occasion the deceased told Madam Kong that she hoped that after the New Year holidays she could engage a lawyer, ask the principal of the school of Madam Kong’s daughters to be a witness, and make a will.  Although Madam Kong said that she did not know whether these 3 matters were interrelated, as a matter of common sense, obviously the wish of the deceased was to make a will with the assistance of a lawyer, which would be recognized by the law, and to ask the principal of the school of Madam Kong’s daughters to be a witness, so as to ensure that her wish to benefit Madam Kong would be put into effect.

26.  The next issue which the court must deal with is whether the above findings of fact are sufficient in law for the court to hold that there was a complete and valid donatio mortis causa.

Legal principles about donatio mortis causa

27.  The law will not perfect an imperfect gift.  This principle is well-established, see Milroy v Lord (1862) 45 ER 1185, 1189.  This authority was cited by A. Cheung J in Official Administrator v Luk Hoi Tong Company Limited [2005] 3 HKC 615, para. 102.

28.  However, donatio mortis causa is one of the exceptions to this principle.  The reason is that a donatio mortis causa is a singular form of gift, being a gift which is neither inter vivos nor testamentary.  It is an act inter vivos by which the donee is to have the absolute title to the gift not at once but if the donor dies.  If the donor dies the title becomes absolute not under but as against the personal representative of the donor.  In order to make the gift valid it must be made so as to take complete effect on the donor’s death; see Re Beaumont [1902] 1 Ch 889, 892.

29.  In addition, donatio mortis causa was held to be a trust raised by operation of law.  Upon the death of the donor, his personal representative will hold, as trustee, the legal title to the gift for the donee; see Duffield v Elwes (1827) 1 Bli (NS) 497, 543.

30.  There are 3 requirements of a donatio mortis causa:

(1) The donor must have made the gift in contemplation though not necessarily in expectation of death;

(2) The donor must have delivered to the donee the subject-matter (in the case of a chose in possession) or the indicia of title (in the case of a chose in action) of the gift, or transferred to him the means of getting at that subject-matter or indicia of title, e.g. delivering a key, like car keys, or a key to a box containing the indicia of title, intending to part with dominion over the gift;

(3) The gift must be such as to be absolute and complete only on the donor’s death so that it is revocable before then.  A condition to this effect need not be expressed and will normally be implied from the fact that the gift was made when the donor was seriously ill.

(See para. 105 of Luk Hoi Tong, where A. Cheung J cited the legal principles elucidated on p. 276 of Hayton and Marshall, Commentary and Cases on the Law of Trust and Equitable Remedies (11^th Ed.))

31.  Considerations about the 2^nd requirement:

(1) The subject-matter or indicia of title of the gift can be delivered through an agent.  In other words, a donee can take delivery of a joint gift for himself and as agent for another donee or a number of donees; see Birch v Treasury Solicitor [1950] 1 Ch 298, 303.

(2) A passbook is the indicia of title of the deposit in the relevant bank account.  By delivering a passbook, a donor can validly gift the deposit by way of donatio mortis causa to a donee; see Birch v Treasury Solicitor.

(3) After delivery of the subject-matter of the gift or its indicia of title, the donor must part with dominion over the gift.  The reason is that the gift must be some definite property and, to ensure that it can validly pass under donatio mortis causa, the donor must put it out of his power to deal with the gift between the date of the donation and the date of the death; see Re Craven’s Estate [1937] 1 Ch 423, 427.

32.  Something more should be said about donatio mortis causa of landed property.  In Duffield v. Elwes, the House of Lords held that interest in the form of mortgage or bond with landed property as security could be subject-matter of a donatio mortis causa.  However, Lord Eldon said in obiter that there was a difference between interests in the form of mortgage or bond and absolute estate in land; see Duffield v Elwes, 543.

33.  The obiter dictum of Lord Eldon had been relied on as the authority that landed property could not form the subject matter of a donatio mortis causa until the English Court of Appeal’s decision in Sen v Headley [1991] Ch 425.

34.  In Sen v. Headley, Mr. Hewett and the plaintiff Mrs. Sen lived together as man and wife for 10 years.  After they stopped living together their relationship continued to be a close one.  Upon the death of Mr. Hewett, the principal asset of his estate was a house.  During his last illness in hospital, Mrs. Sen regularly visited him.  She asked Mr. Hewett what she should do about the house if anything should happen to him.  Mr. Hewett told her that the house was hers.  The title deeds to the house were kept in a steel box and the key to the box was slipped into Mrs. Sen’s handbag without her noticing it.  After Mr. Hewett passed away, Mrs. Sen discovered that one of the keys slipped into her handbag was the only key to the steel box containing the title deeds.  On this basis, she made a claim to the personal representative of Mr. Hewett for her interest in the house.

35.  In that case, the trial judge dismissed Mrs. Sen’s claim, holding that land could not be the subject matter of a donatio mortis causa.  However, the English Court of Appeal, after hearing the appeal, reversed the judge’s decision.  It considered that Lord Eldon’s comments in Duffield v Elwes, being obiter in nature, were not binding on it.  It further held that the difference between landed property and other kinds of property was not such as to prevent it from being the subject matter of a donatio mortis causa.  Moreover, as donatio mortis causa operates as a trust, the exception laid down in section 5(2) of the Conveyancing and Property Ordinance, Cap. 219 Laws of Hong Kong to the rule that no interest in land can be disposed of except by writing should be applicable.

36.  The above holding in Sen v Headley was cited by Yam J in Cai Guo Xiang v Mok Hang Won Elsa, HCAP 13/1997 (26 March 2001) (unreported); see page 29.

Application of relevant legal principles to this case

37.  First of all, according to the authorities, all the 4 kinds of assets in the deceased’s estate can be subject-matters of a donatio mortis causa.

38.  Then, it is clear that the ultimate intention of the deceased was to make a will, only that she passed away before this intention was carried out. However, if the deceased during his lifetime had acted in such a way that a valid donatio mortis causa was constituted, the existence of an intention to make a will will not be in conflict with the operation of the donatio mortis causa; see Hudson v Spencer [1910] 2 Ch 285.

39.  Next, I find that there is sufficient evidence in this case to fulfill the 1^st and the 3^rdrequirements of donatio mortis causa:

(1) The relevant conversations between the deceased and Madam Kong took place within a few days before the deceased passed away, and the deceased repeatedly said she wished that “God would allow her to die”; therefore, it was likely that she had such conversations in contemplation of death.

(2) The evidence of Madam Kong showed that the deceased wanted Madam Kong (or her children) to inherit her estate after her death; therefore, the gift (if any) which the deceased made to Madam Kong (or her children) was likely to be conditional on her death.

40.  What remained to be seen is whether the deceased had delivered the subject-matter of the gift or its indicia of title to Madam Kong, and had parted with dominion over the subject-matter of the gift.

41.  Firstly, in the case of the deposit in Citibank, the deceased had never given the passbook of that account or any other indicia of title in any form (if there was any) of that account to Madam Kong.  The only thing which Madam Kong could rely on was the piece of paper described in paragraph 25(5)(a) above, which obviously was not and could not possibly be an indicia of title of the deposit in Citibank.

42.  Therefore, Madam Kong (or her children) cannot take the deposit in Citibank under donatio mortis causa.

43.  As for the deposit in BEA, I have made the finding in paragraph 25(5)(c) above that in the evening of 30 December 2006 the deceased gave Madam Kong the key to the safe deposit box in which the BEA passbook was kept.  A passbook is an indicia of title of the money in the relevant account.  Therefore, the deceased had transferred to Madam Kong the means of getting at the indicia of title of the deposit in BEA.

44.  The question left to be considered is whether the deceased had parted with dominion over the deposit in BEA/the BEA passbook:

(1) So far there is no binding precedent on this point, but on p.428 of Re Craven’s Estate, the court discussed, by way of obiter dictum, the hypothetical situation where there were a box and two keys, which could unlock the box.  The box and one of the keys were handed over to the donee, but the other key was retained by the donor.  The court’s opinion was that probably there was not sufficient parting with dominion over the box.

(2) Under cross-examination, Madam Kong disclosed that there should be two keys to the BEA safe deposit box.  One of them was given to her but the whereabouts of the other one was unknown.  Madam Kong thought that it was still in the possession of the deceased.  This court has no idea on what basis she formed this opinion.  After the deceased passed away, in the course of administering her estate, the goods and chattels in unit 6B would have to be sorted out and counted.  That was the reason why some cash was found.  This court noticed that the other key to the BEA safe deposit box (if there was one) was not found after the deceased passed away.  I therefore hold that the opinion of Madam Kong, by itself, is not sufficient evidence to prove that the deceased kept the other key to the BEA safe deposit box so as to retain her dominion over the deposit in BEA/the BEA passbook.

(3) Such being the case, I think that it is not necessary to consider or decide whether the opinion of the court in Re Craven’s Estate is applicable to this case.

45.  For the reasons given in paragraphs 39, 43 and 44, I find that Madam Kong (or her children) can have the deposit in BEA by way of donatio mortis causa. As to whether Madam Kong’s children have any interest in this asset, that will be discussed in paragraphs 49 to 51 below.

46.  Lastly, turning now to unit 6B and the cash (they can be discussed together), other factors have to be considered.  According to Sen v Headley, landed property undoubtedly can pass under donatio mortis causa; and the deceased during her lifetime had delivered to Madam Kong the key to the BEA safe deposit box in which the unit 6B documents were kept.  However, in Sen v Headley the English Court of Appeal’s finding that the deceased Mr. Hewett had parted dominion over his house during his lifetime was based on facts peculiar to that case.  In that case, Mr. Hewett gave the donee the keys to his house before he passed away. Although he kept his own set of keys to the house, at the material time he was admitted to hospital and knew that he was not able to return home (see p. 438E to 439B).  On the other hand, the donee in that case had always had her set of keys to the house.  When Mr. Hewett was seriously ill, bedridden in hospital, she looked after his house and brought articles from the house to him in hospital on his instructions.  (see p. 430G to p. 431A).

47.  In the present case, on 30 December 2006 the deceased handed to Madam Kong the key for opening the safe deposit box in which the indicia of title of unit 6B (i.e. the unit 6B documents) were kept, but Madam Kong repeatedly and clearly said in her evidence that the deceased intended to stay in unit 6B until she passed away.  Some people had suggested to her about selling the unit and staying in hospital, but she was much averse to such suggestions.  As a matter of fact, the deceased did stay or virtually stayed in unit 6B up to the last moment of her life.  The deceased had on two occasions during her lifetime given Madam Kong the keys to unit 6B, but on neither of these occasions was her purpose to let Madam Kong look after the unit for her.  At all material times, the deceased lived in unit 6B on her own and exercised her dominion over the unit and over everything in the unit (including the cash).  Madam Kong’s answer to Mr. Suen’s last question in his cross-examining her was a confirmation that the deceased had never indicated that she would give up unit 6B before she passed away.

48.  Therefore, Madam Kong (or her children) cannot have unit 6B or the cash in the unit under donatio mortis causa.

Do Madam Kong’s children have any interest

49.  The subject matter or the indicia of title of the gift can be delivered through an agent.

50.  However, it has been pointed out in paragraph 21(8) above that there were contradictions in Madam Kong’s evidence about the beneficiaries and distribution of the deceased’s estate.  In answering the question raised by me about whether the written version of Madam Kong’s case or the one advocated by her in court should be accepted, Ms. Tsui, counsel for Madam Kong’s children, urged the court to accept the latter.  Ms. Tsui also submitted that in the family of Mr. Yip and Madam Kong, the members lived in harmony with one another, and that the 3 children, represented by Mr. Yip, adopted a neutral position.

51.  That being so, I hold that Madam Kong is the sole beneficiary of the deposit in BEA, and that her children have no interest in it.

52.  If any party is minded to make any application about costs, he or she must make the application in writing to the court within 21 days of the handing down of this judgment.

53.  Finally, I would like to express my appreciation and gratitude to the two counsel for their fair and pertinent submissions.

Translated by the Judgment Translation Unit of the Judiciary and approved by Mr. P. Y. Lo, Barrister-at-law