LEUNG MEE KUEN AND ANOTHER v. LEUNG SIU KUEN BESSIE

CACV 163/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO 163 OF 2015

(ON APPEAL FROM HCMP 1522/2012)

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REASONS FOR JUDGMENT

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Hon Cheung CJHC:

1. At the conclusion of the hearing, we dismissed the defendant’s appeal from the judgment of Mr Recorder Houghton SC dated 18 June 2015. We now give our reasons.

The facts

2. This is a family dispute.  The 2^nd plaintiff (“the mother”) is the mother of five children, three sons and two daughters.  One of the sons is Leung Ping Hung.  He is the elder brother of the other two parties to this litigation, that is, the 1^st plaintiff (“Mee Kuen”) and the defendant (“Bessie”).  Ping Hung is not a party but he supports the claims of Mee Kuen and their mother.

3. The dispute involves a property at Kin Yuen Mansion, Caine Road, Hong Kong (“the property”).  It was purchased in the names of Ping Hung and the mother as joint tenants in 2006. The purchase was funded by the proceeds of sale of another property in Caine Road, that is, No 102, Caine Road (“the Caine Road property”) registered in the names of Mee Kuen and Ping Hung.  The remaining proceeds of sale of the Caine Road property were used to fund the purchase of another flat also in Kin Yuen Mansion which was purchased in the sole name of Mee Kuen. On 4 May 2007, the mother and Bessie attended the office of a firm of solicitors and executed a deed of gift, giving the mother’s interest in the property to Bessie.  As a matter of law, this severed the joint tenancy and after the making of the deed of gift, Ping Hung and Bessie became tenants in common.

4. Mee Kuen and Ping Hung claim they only found out the purported gift in late 2011, whereas Bessie says the gift was made openly and her two siblings were aware of it right after it was made.  The recorder accepted Ping Hung’s and Mee Kuen’s story in this regard.  What is important is that they both say the mother in fact had no beneficial interest in the property for her to gift to Bessie.  She merely held the legal title to the property (as a joint tenant) on trust for Mee Kuen for tax consideration.  The registration of the property in the mother’s name also gave her a degree of assurance that she would be able to reside in the property for life – the mother, widowed since 2005, used to reside at the Caine Road property before it was sold.

5. Proceedings were therefore commenced in July 2012 by not only Mee Kuen, but also the mother, seeking a declaration that the deed of gift is null and void and an order that it be set aside.  Bessie, on the other hand, counterclaimed that she was in fact one of the two beneficial owners of the Caine Road property before it was sold (the other one being Mee Kuen) and of the proceeds of sale after it was sold, and therefore she had a beneficial interest in the property, the purchase of which was funded by the proceeds of sale.  Alternatively, if she had no beneficial interest in the Caine Road property at all, she claimed that when the property was purchased, Mee Kuen and Ping Hung intended to give the mother a beneficial interest as joint tenant in the property which the mother transferred to her by way of gift under the deed.  She counterclaimed for declarations of her interest in the property accordingly.

The judgment below

6. At trial, only Mee Kuen and Ping Hung gave evidence (for the plaintiffs).  The mother, apparently because of her old age and ill‑health, did not.  Bessie was the only witness for the defence.

7. As is apparent from the above outline, the case turned largely on the facts.  The learned recorder, having heard evidence from the factual witnesses, had no difficulty in rejecting Bessie’s case of a beneficial interest in the Caine Road property before it was sold.  His finding in this regard was not challenged on appeal, and I need say no more about it save to say the recorder was obviously correct when he observed that Bessie’s case of a beneficial interest in the Caine Road property (which was registered in the names of Mee Kuen and Ping Hung) was based essentially on inferences that she asked the court to draw, and the recorder was quite right in concluding that the evidence was simply quite insufficient for Bessie to establish a case of beneficial ownership.

8. This finding effectively disposed of Bessie’s case that she had a beneficial interest in the proceeds of sale of the Caine Road property and thus the property.

9. That left Bessie with her alternative case that the mother, despite the fact that the property was purchased with money belonging beneficially to Mee Kuen and Ping Hung and that she had made no contribution to the purchase money, had a beneficial interest in the property by way of gift from her two children, and therefore she had a beneficial interest to pass to Bessie under the deed of gift.

10. The recorder rejected this alternative case of Bessie, and thus this appeal.  Again, the rejection of Bessie’s alternative case was essentially a matter of findings of primary fact.  The recorder accepted the oral evidence of Mee Kuen and Ping Hung relating to their common intention at the time the property was purchased in the joint names of the mother and Ping Hung, that is, by doing so they did not intend to make a gift of beneficial interest to the mother but rather, as already described, the adding of her name was merely intended to give the mother some assurance that she would be able to reside at the new property as in the old one for life.

11. The recorder observed that the only direct evidence against the evidence of Mee Kuen and Ping Hung on their common intention was the subsequent deed of gift.  However, he did not think much, if any, reliance could be placed on it as evidence of the true position as to ownership.  He correctly noted that not only had the mother purported to give her share of the property to Bessie but she had also sought, through these proceedings, to have that transaction set aside on the basis of undue influence (undue influence was not pursued at trial).  The recorder observed that the mother is an old lady who had, so far as he could infer, limited legal knowledge.  The evidence suggested to the recorder that she was herself unclear as to what the legal implications of her name having been placed on the title deed might be.

12. The recorder also observed that not only did Bessie have no interest in the Caine Road property, she was not even aware of the purchase of the property until sometime after it had been purchased.  Nor did the recorder think that Mee Kuen and Ping Hung would give an interest in the property to the mother.  He regarded this as inherently unlikely given her age.  He could not accept that the mother had an interest in the property capable of being the subject of the deed of gift.  The recorder therefore entered judgment for Mee Kuen and the mother against Bessie, and dismissed the latter’s counterclaim.

Appeal against findings of primary fact

13. As mentioned, in this appeal, Bessie only challenged the recorder’s findings and holding in relation to the deed of gift. Her counsel, Mr Michael Chai, recognised that he was seeking to challenge findings of primary fact, and therefore had an uphill task.  He was right.  Echoing what has been said more than a decade ago by the Court of Final Appeal in the oft‑cited case of Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD 1, this court has repeatedly said in quite a few recent cases that an appeal against findings of primary fact can only succeed if it can be demonstrated to the satisfaction of the appellate court that the findings of the trial judge are “plainly wrong”.  This was elaborated by Lam VP in China Gold Finance Limited v CIL Holdings Limited, CACV 11/2015, 27 November 2015, in relation to the re‑running of arguments on fact that had been unsuccessfully run before the trial judge:

“10. We agree with the submissions of Mr Lam (appearing together with Mr M Wong for the Defendants) that the Plaintiff’s appeal is essentially an attempt to overturn the findings of fact of the Judge by re-running arguments which had been considered but rejected by her. We hasten to say that it is a misuse, if not an abuse, of the appellate process. We shall explain why.

…

14. These authorities explained the limits of an appellate court in reversing the findings of fact of the primary judge. We used the expression “primary judge” because it emphasizes the primary role of the first instance judge in the assessment of evidence and making of relevant findings of fact. In our judicial system, the appellate process is not designed to give a litigant (or his counsel) a platform for regurgitating his closing submissions on the evidence and factual aspects of the case again with the hope that the appellate judges may come to a different view to that of the primary judge. It is thus, as we said above, a misuse of the appellate process to place before this court submissions which, in substance, are (or should be) submissions advanced by way of closing submissions at the trial after the judge has heard all the evidence.

…

16.  Thus, in an appeal, it is not helpful if counsel and litigant (acted in person) only repeat submissions already advanced and considered by the primary judge at the trial. The starting point should be the judgment of the primary judge and the identification of palpable errors (which must be errors of such nature which warrants intervention from this court) in the judgment.  The mere assertion that the finding of the judge is against the weight of the evidence or that the judge should have reached another conclusion because of points advanced in the closing submissions below are not errors coming within that category.”

15. It is trite that at trial the field was wide open, and parties were of course free to make whatever submissions that they considered would help to advance their own case or destroy their opponent’s case, whether on law or on evidence and facts, before the trial court.  But after trial, and after the trial judge had made findings of fact, particularly findings of primary fact, the scene changed.  On appeal, the threshold for challenging a finding of primary fact is very high.  Unless it can be demonstrated that the finding is plainly wrong on the evidence before the trial judge, it cannot be disturbed.  That explains why deploying the same arguments on facts and evidence already run at the trial below would normally fall far short of what is required to demonstrate that a finding is plainly wrong.  Put another way, unless an intending appellant or those advising him or her are in a position to say there is a reasonable chance of meeting that high threshold, no challenge against a finding of primary fact should be attempted, and in many cases, that would simply mean no appeal should be launched.

16. With respect, this appeal is yet another futile attempt to overturn findings of primary fact.  I will now deal with the various points made to challenge the recorder’s findings.

Inclusion of the mother’s name

17. Mr Chai attacked the recorder’s clear finding on the common intention of Mee Kuen and Ping Hung at the time the property was bought, that is, that the property was to be registered in the joint names of the mother and Ping Hung to give the mother some assurance that she would be able to reside at the new property for life, and also for tax purpose.  That intention meant, according to the evidence of the siblings, that the mother’s name was to be included in the title documents, whereas Mee Kuen’s name was to be excluded.

18. Mr Chai essentially argued that putting the mother’s name in the title documents was also consistent with Bessie’s case that the mother was intended to be given a beneficial interest in the property.  Indeed, that was what she apparently thought by executing the deed of gift one year later.  He also submitted that the explanation given by Mee Kuen and Ping Hung about giving the mother some assurance was inconsistent with their evidence that they could sell the property at any time.

19. In my view, these were all fair points that could be (and were) made at trial before the learned recorder.  But as explained, they fell far short of what was required to demonstrate to this court that the recorder’s findings of fact, after hearing these same points at trial, were plainly wrong.

20. The reality of the situation at trial was that there was direct evidence from the two persons who paid for the purchase of the property on their common intention at the time of purchase. They were the best people to give evidence on such intention – their own intention.  This is not a case where the court needs to resort to the concept of resulting trust, as there was direct evidence on the parties’ actual intention at the time: Yuen Yat Shan Fiona v Sit Hin Kau [2005] 4 HKC 170.  Unless the siblings’ evidence could be effectively challenged at trial, it was perfectly open to the recorder to accept their direct evidence on their common intention.  Moreover, leaving aside the deed of gift for the time being, there simply was no other evidence, direct or otherwise, to effectively challenge what they testified in court.  Importantly, in the present case, Bessie was not in a position to give any evidence on that matter as she was not even aware of the purchase of the property until sometime after its purchase.

21. As for the mother, she did not give evidence at trial and the recorder could not be criticised for taking into account her age and possible health condition.  The deed of gift was some evidence from her that she did consider, at least at the time the deed was made, that she had a beneficial interest in the property.  However, the recorder was correct, and I reject Mr Chai’s argument to the contrary, in thinking that this was to some extent neutralised by the fact that she subsequently joined in as a co‑plaintiff in this litigation, siding with Mee Kuen and Ping Hung, who claimed that she was not intended at the time of purchase to be given any beneficial interest in the property.  I think the recorder was fair when commenting that the mother might well not be clear on what the true legal position was – she might be mistaken at one stage or another.  What is not permissible, as Mr Chai had attempted to do in his written submissions, is to suggest that the mother does not know what she is doing in this litigation.  This cannot be done because there is simply no challenge by Bessie either as to the solicitors’ authority to act for the mother in this litigation or as to the mother’s mental capacity to sue as a plaintiff – matters which if raised would have to be resolved immediately and before trial.

Exclusion of Mee Kuen’s name

22. Mr Chai also attacked the explanation given by Mee Kuen and Ping Hung for not including the name of Mee Kuen in the title documents of the property, namely, their tax concern.  He submitted that the recorder should not have accepted their evidence because they could not give any legally valid explanation as to what the concern was and how the concern could be overcomed by leaving out the name of Mee Kuen from the title documents.  With respect, I do not accept the argument.  First, once again, this would have been a fair point to make during final submission before the recorder (and indeed it was made), but it is not a point which can demonstrate that the findings of the recorder are plainly wrong on appeal.  Secondly, one must not confuse the question of whether the concern was misconceived or otherwise with the question of whether the siblings, as lay persons, did have such concern at the time.  It is the latter point which the recorder was concerned with.  He was perfectly entitled to accept, after hearing evidence, that the siblings, as lay persons, did have some tax concern although it was “wide of the mark” as he put it in his judgment. Thirdly, on the evidence, what the two siblings did was nothing really unusual once one remembers that the other property in the same building purchased with the remaining proceeds of sale of the Caine Road property was registered in the sole name of Mee Kuen, such that the two siblings each had one property in the same building registered in their own respective names, save that in relation to the property, the mother’s name was added for the purpose already explained.  The recorder was therefore perfectly entitled to accept the siblings’ explanation in this regard.

The deed of gift

23. As regards the deed of gift heavily relied on by Mr Chai, particularly in his written submissions, the short point is that at best it reflected the mother’s understanding and belief at the time the deed was executed.  As explained, the recorder did not think much could be made out of it given the mother’s age and apparent health and the fact that she is a co‑plaintiff with Mee Kuen in this litigation.  Mr Chai made a number of miscellaneous points in relation to the deed such as the fact that it was made quite openly, through a firm of solicitors known to the family, and interpreted to the mother before it was executed.  There was some dispute as to when Mee Kuen and Ping Hung found out the deed, whether the solicitors failed to respond to Ping Hung’s queries, and why the siblings did not complain immediately but waited several months even on their own case before issuing a letter before action.  Again, these were “trial points” for the trial court.  But – and I am repeating myself – this is an appeal, and these points simply do not even begin to demonstrate that a plain error has been made by the recorder when he came to the view that not much could be made out of the deed of gift, and that on the entirety of the evidence, there was not much to challenge the direct evidence of the siblings on their common intention at the time of purchase.

Miscellaneous points

24. At the oral hearing, Mr Chai took as his first point that it was not the mother but rather the siblings who of their own initiative included the name of the mother in the title documents of the property.  With respect to counsel, this cannot be a point going to the crucial question of whether the recorder’s finding was plainly wrong.  Whether the mother requested expressly for the assurance or whether the children understood their mother’s wish and thinking and of their own initiative included the mother’s name in the title documents to give the mother what she wanted at heart, can hardly be a matter of any significance in the appeal, particularly given the family context of this case.

25. The recorder was entitled to infer from the age of the mother that it was unlikely the siblings would have wanted to give their elderly mother a beneficial share in the property.

26. As for the suggested inconsistency that Mee Kuen and Ping Hung thought they could sell the property anytime they wanted, the so-called discrepancy disappears once it is remembered that whilst as a matter of strict law, the two siblings as beneficial owners may ignore their mother’s wish if they want and sell the property at anytime they want, in reality, the mother is residing at the property and moreover, she is one of the registered owners.  In practice, it would not be entirely straightforward to sell the property over the objection of the mother.  Again, these are considerations that must have gone through the mind of the recorder when he assessed the evidence, weighed the possibilities and came to his findings of fact on the balance of probabilities.

27. Given the family context, the lapse of several months after the discovery of the deed of gift in late 2011 (as the recorder found by accepting the siblings’ evidence) and the issue of the letter before action in March 2012 cannot be a matter of any great moment.  One would have thought in fact the two siblings had acted quite promptly in the circumstances.  The fact that the mother did not pursue at trial the initial allegation of undue influence in relation to the making of the deed of gift does not detract from the fact that she was and remains a co‑plaintiff in this litigation, asking for the deed of gift to be set aside.

Outcome

28. For these reasons, the appeal was dismissed with costs to the plaintiffs, to be taxed if not agreed.

Hon Lam VP:

29. I agree and have nothing to add.

Hon Cheung JA:

30. I agree with the reasons for judgment of the Chief Judge.