HO WAI KWONG , executor of the estate of YU KING, deceased v. HO KAM CHUI

HCA 1224/2016

[2023] HKCFI 2218

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1224 OF 2016

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J U D G M E N T

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1.  This is a family dispute over the ownership of a commercial property situated at Shop B on the Ground Floor of Kam Fook Mansion, Nos 148, 150, 154 and 156, Jaffe Road, Hong Kong (“the Property”).

2.  According to Mr Lam, SC, counsel for the Plaintiff, the Plaintiff’s claim is a simple one.  The late Madam Yu King (“the Mother”)  sold one half of the interest in the Property to the Defendant, one of her daughters, at $8 million pursuant to a Memorandum of Agreement for Sale and Purchase dated 7 February 2013 (“the SPA”).  By an assignment of the same date (“the Assignment”), the Property was assigned to the Mother and the Defendant as joint tenants.  It is common ground that the Defendant had not paid any of the purchase price.  According to the Plaintiff, this constituted a repudiatory breach of the SPA, which had been accepted by the Mother on 28 April 2015 during a family meeting; or by the Plaintiff,one of her sons and the executor of her estate, through the issuance of the writ herein on 10 May 2016.  Before the Mother passed away on 5 March 2016, on 23 April 2015, she issued a notice of severance of the joint tenancy in respect of the Property (“the 2015 Notice of Severance”).  In the circumstances, the Defendant is obliged to return the 50% interest in the Property held under her name to the Plaintiff on the ground of total failure of consideration.  She also has to account for any profits, in particular, rental income, that she has derived from the Property.

3.  On the other hand, the Defendant claims that the Mother made a secret gift of the Property to her by making her a joint tenant without the need of any payment such that the Defendant would become the sole owner of the Property upon the Mother’s death.  She does not admit the authenticity and validity of the 2015 Notice of Severance but claims, in the alternative, that assuming it is effective, it supports that the Mother at least intended to make a gift of 50% interest in the Property to her.  She argues that the Mother or the Plaintiff was and is estopped from denying that the Mother had made a gift of the Property, or alternatively 50% interest thereof, to her.  She also contends that, even if there was a genuine sale, the Plaintiff’s only remedy is to ask for payment of the $8 million (with interest), which she is able and willing to make.  She counterclaims for a declaration that she is the sole legal and beneficial owner of the Property, or alternatively 50% interest thereof.

4.  The main issue that the court has to determine in this case is, therefore, whether the transfer of the Property to the Defendant under the SPA (“the Transfer”)  was a genuine sale or a gift.

BACKGROUND OF THE CASE

5.  There is no serious dispute about the following background facts.

6.  The Mother was born in 1927 in Taishan in the Mainland.  She came to Hong Kong at around 8 years old.  She had no formal education and was essentially illiterate, although she managed to learn a few Chinese characters.  She worked as a tailor until marriage.  The Mother and the late Mr Ho Chee (“the Father”)  married in 1946.  Thereafter, she spent her time taking care of the family and assisting the ironware business run by the Father.

7.  The Father and the Mother had 8 children listed as below according to their seniority:

(i)  Ho Kam Hing (何錦卿), daughter, died in 2007 in Hong Kong.  She had two children including one 黃智超 (“James”);

(ii)  The Defendant, daughter, born in October 1948.  Her husband is Li Kwok Wah (李國華)  (“Kwok Wah”)  and they have 3 children including one Ms Li Yat Ling Bonnie (李逸靈)  (“Bonnie”);

(iii)  Ho Kam Chuen (何錦鑽), deceased, daughter;

(iv)  Ho Kam Ling (何錦玲)  (“Ling”), daughter, born in 1952.  She is married with one child;

(v)  Ho Wai Tim (何偉添)  (“Tim”), son, born in 1953.  He is married with 2 children;

(vi)  Ho Kwok Leung (何國良)  (“Leung”), son, born in 1956.  He is married with 2 children;

(vii)  The Plaintiff, son, born in 1958.  He has 2 children; and

(viii)  Ho Kam Sheung (何錦嫦)  (“Sheung”), daughter, born in 1960.  She and her son reside in the United Kingdom (“UK”).

8.  As in most traditional Chinese families, the Father was the head of the family (“the Ho’s Family”)  and the Mother would abide by and follow the Father’s decision and direction on important matters.

9.  The Father had in his lifetime made 5 fixed deposits (“the Fixed Deposits”)  in the sum of $1 million each, directing 2 fixed deposits ($2 million)  for the Mother absolutely and the other 3 fixed deposits ($3 million)  primarily for the use of the Mother which she could distribute as she wished.

10.  After the death of the Father, the Mother became the matriarch of the family.  As in most traditional Chinese families, the children respected the Mother as their parent.

11.  The Mother had at least executed previous wills in 2008, 2010 and 2011 in different solicitor firms.

12.  Apart from the Property, there are 3 other properties within the Ho’s Family:

(i)  Flat A, 9^th Floor, 338 Lockhart Road (“Flat 9A”)  held in the name of Tim;

(ii)  Flat C, 7^th Floor, 338 Lockhart Road (“Flat 7C”)  held in the name of the Plaintiff; and

(iii)  Flat B, 12^th Floor, Lam Fook Mansion, 152 Jaffe Road (“Flat 12B”)  in which the Mother resided before her death.

I will refer all the 4 properties collectively as “the 4 Properties”.

13.  In June 1976, the Father and the Mother purchased the Property as joint tenants.  The Property was used as the office and workshop of the Father’s ironware business until the end of 2005. Thereafter, the Property has been leased out for rental income.

14.  Upon the Father’s demise in November 2009, the Mother became the sole registered and beneficial owner of the Property.

15.  Between 2009 (after the Mother’s relationship with Leung deteriorated due to their disagreement about the Father’s funeral arrangement)  and 2011 (before the Defendant was entrusted with a power of attorney executed by the Mother (“the 2011 POA”)), the Mother had independently handled the rental affairs of the Property.

16.  On 7 February 2013, pursuant to the SPA and the Assignment, the Mother transferred the Property to herself and the Defendant as joint tenants at a consideration of $8 million.  The conveyancing documents were prepared by Ms Ma Pik Ha Rosaline (“Ma”), a solicitor of K M Lai & Li (“KML”), who acted for both the Mother and the Defendant in the transaction.

17.  The Defendant has never paid the consideration or any part thereof to the Mother pursuant to the SPA.

18.  On 3 November 2014, the Mother executed a Deed of Severance of Joint Tenancy in respect of the Property (“the 2014 Deed of Severance”)  prepared by Ma, which was not executed by the Defendant. Subsequently, the Mother issued the 2015 Notice of Severance.

19.  On 28 April 2015, the Defendant returned the title deeds of the Property, among other things, to the Mother at a family meeting.  The Mother acknowledged receipt by putting her name chop on a written receipt.

20.  The Mother passed away on 5 March 2016.  On 9 August 2016, probate of the Mother’s will dated 11 May 2015 (“the 2015 Will”)  was granted to the Plaintiff.

EVIDENCE AT THE TRIAL

21.  3 witnesses testified on behalf of the Plaintiff’s case at the trial: the Plaintiff himself, Leung and Sheung.

22.  On the other hand, the Defendant and her husband Kwok Wah testified on behalf of the Defendant’s case.

23.  I will analyse the credibility of the evidence of the different witnesses in greater details in the latter part of this Judgment when I address the question as to whether the Transfer was a sale or a gift. However, I will make some preliminary observations here.

24.  The Plaintiff has a chequered history.  He had been prosecuted for some criminal offences and was imprisoned some time ago.  He admitted that he has been in financial difficulty and he still owes money to financial company.  Despite that, I find the Plaintiff to be an honest and reliable witness.  His evidence has remained unshaken despite the vigorous cross-examination by Mr Li, SC, counsel for the Defendant.  His evidence is supported by the various records made by him after the various family meetings.  There is no reason for the Plaintiff to falsify the contents of these records, and indeed some of the contents are supported by the WhatsApp messages exchanged by the parties after the meetings.  Certain parts of his evidence is also corroborated by the evidence of Leung and Sheung.

25.  Mr Li tries to attack the credibility of his evidence based on: (i)  some alleged “confusion” in his evidence about the minute details relating to the making of the various letters and notes of meetings and the money he received from the family for his marriage; (ii)  some immaterial “inconsistencies” between his evidence and that of Leung and one Dr Lo regarding the conditions of the Mother at certain points in time; (iii)  the “incredible” reason given by the Plaintiff as to why he did not believe the Mother would have gifted the Property to the Defendant; (iv)  the alleged “exaggeration” of the Plaintiff’s evidence relating to his financial reliance on the Mother and his relationship with other siblings; and (v)  non-disclosure or late discovery of certain documents. 

26.  I do not find that these submissions would undermine the credibility of the Plaintiff’s evidence.  Most of the challenges relate to some minute details that are quite immaterial to the central issue in the case.  Further, different persons may have different opinions about the conditions of the Mother at certain points in time, and so these slightly different observations should not be regarded as a discrediting factor.  As the Plaintiff’s case is one based on sale and not gift, any reason given by the Plaintiff for not believing the making of gift is at most an opinion of the Plaintiff himself.  There is also no good reason as to why the Plaintiff had to exaggerate his financial dependency on the Mother.  In any event, as demonstrated in the latter part of this Judgment, the Mother’s own financial needs (including possible medical expenses)  and the distributions under her will (by then the 2013 Will)  are already major factors supporting that the Mother would not transfer the Property to the Defendant for free.  It is also not surprising that the Plaintiff would only start to appreciate the importance of certain peripheral documents after being questioned by counsel.

27.  I also find Leung to be an honest and reliable witness.  He mainly gave evidence as to what happened in the few family meetings which I would address in the latter part of this Judgment.  Mr Li tries to attack his evidence on the ground that he should have raised queries about the true purchase price (whether it was $8 million or $16 million)  when he was shown the undated Chinese memorandum referred to in §62 below (“the Chinese Memorandum”).  This is not a fair criticism.  As further elaborated below, there is no reason for the court to doubt the genuineness of the Chinese Memorandum.  After all, the sale was a matter between the Mother and the Defendant.  As the Mother was still alive when Leung was first shown the Chinese Memorandum, it is understandable why he, by then, did not raise any query relating to such document.

28.  The Plaintiff’s last witness was Sheung who flew back from UK to testify in court.  Again she gave evidence about the matters discussed in the various family meetings.  It is quite true that her relationship with the family and the Mother was relatively distant as she lived in UK most of the time.  But at the same time, she was not directly involved in the cross-fire between the Defendant and the other siblings of the family, and I do not accept that she would have fabricated evidence about what happened in the family meetings with a view to advance her own interest or those of other siblings.  Sheung was straight-forward in giving her evidence in court and I accept her to be a truthful and reliable witness.

29.  Mr Li submits that Sheung has selective memory. I do not accept such criticism.  It is not surprising, for example, for her to forget when was the last time she spoke to the Mother whilst she was able to recall some details of the discussions that took part in the family meetings.

30.  The Defendant tries to attack the credibility of the Plaintiff’s witnesses on the ground that they have financial interests in the outcome of the proceedings.  Apparently, there was an agreement between the siblings (except the Defendant)  that, if they succeed in this action, the distribution of the Property would be divided into 9 shares (i.e. sons each with 2 shares and daughters each with 1 share).  The Plaintiff also testified that it was Ling and her husband who funded the present litigation.

31.  But whether the siblings had made a final binding agreement or not, it would be natural to expect that the siblings would have certain financial benefits if the Mother’s estate is to succeed in this action.  The important question to ask is whether they would have conspired together to fabricate a case against the Defendant in order to obtain such benefits.  In my judgment, this is most unlikely.  In fact, the court has taken into account the possible motives that the Plaintiff’s witnesses might have in assessing the credibility of their evidence.  As compared with the Defendant, the financial benefits to be obtained by, say Sheung, would be much less.  More importantly, it would require all the other siblings to be greedy persons for them to have conspired together to fabricate a false claim against the Defendant.  Having heard their evidence, I find such possibility a remote one.

32.  On the other hand, as further elaborated in the latter part of this Judgment, I do not find the Defendant’s evidence reliable.

33.  The Defendant was working as an accounting clerk in the 1970s to 1980s.  She was married to Kwok Wah who was promoted as a general manager taking charge of worldwide business.  At the material time, she mostly stayed in Canada but she would come back to Hong Kong from time to time.  Such background does not support that she is a naïve person.

34.  The Defendant testified that she was a filial child. Yet the Defendant could not give a satisfactory explanation when she was confronted as to: (i)  why the Mother wanted to keep the gift a secret when the Mother then made the Transfer by way of a sale; (ii)  why she did not mention the alleged gift to the other siblings, whether in the various family meetings, WhatsApp messages or correspondence between lawyers, when the other siblings expressed their dissatisfaction about the Transfer.

35.  According to the Defendant’s case, the Plaintiff had repeatedly conveyed fabricated messages on behalf of the Mother (假傳聖旨).  Yet facing a whole series of “serious misconducts” on the part of the Plaintiff, the Defendant just kept quiet without clarifying the matters with the Mother, her lawyer Ma or the other siblings.  She did not mention the “gift” which, to most lay persons, would be a perfect justification to fence off the attacks.  More importantly, it would avoid her being put in a difficult position facing the other siblings in the future.

36.  Mr Li just tries to explain her inaction and silence by reason of her character.  Mr Li says that the Defendant is a passive person.  But even taking this into account and that she might be a filial child always respecting the wishes of the Mother, her silence throughout the confrontations does not sit well with her background and simple common sense.  In fact, the Defendant does not appear to be a passive person as alleged by Mr Li.  She did reply to some of the messages in a rude manner and actively criticise her siblings on some occasions.  Indeed, the Defendant is the eldest surviving child in the Ho’s Family and there is no reason for her to behave in a passive or submissive manner towards her other siblings.  More importantly, a lot of matters, if not properly clarified, may affect her personally in the future. After the demise of the Mother, the unclarified matter (i.e. the gift dressing up as a sale with repeated demands made by the Mother for the payment of purchase price)  would probably put her in a most difficult position.  It is simply against common sense that the Defendant had not thought about these matters.

37.  Kwok Wah is the Defendant’s husband.  It is only natural that he would support the Defendant in her defence.  Whilst the court should not discredit his evidence simply because of his relationship with the Defendant, nevertheless due to the various strange features in his evidence as identified in the latter part of this Judgment, I also do not find him to be a reliable witness.

38.  With these preliminary observations, I proceed to deal with the main issue in this case: whether the Transfer was a sale or a gift?

WHETHER THE TRANSFER WAS A SALE OR A GIFT?

39.  Having considered all the evidence and the circumstances of this case, I find that the Transfer was a sale and not a gift, whether it was for half or all the interest in the Property, as alleged by the Defendant.  As the Transfer involved some sort of family arrangement, the transaction may not be the same as other commercial transactions.  However, it is quite clear from the evidence that it was the intention of the Mother and the Defendant that the latter would not obtain her interest in the Property for free, and she had to pay for her interest even under such kind of family arrangement.

(i)  Preliminary observations

40.  Before I give my detailed reasons, I would like to make the following observations.

41.  First, it has been stated in the SPA and the Assignment that the Transfer was a sale, and so it is the burden on the Defendant to prove the gift.  The Defendant has to show that such intention on the part of the donor and to identify clearly the subject matter of the gift.

42.  The Defendant seeks to rely on the presumption of advancement.  However, since I find that the Mother and the Defendant had intended the Transfer to be a sale, the presumption cannot really assist the Defendant’s case.[1]

43.  Second, the Defendant’s evidence must be approached with great caution as she is alleging a gift made by a deceased who would not be able to give evidence.[2] However, the uncorroborated evidence of a claimant against the estate of a deceased person, although will be viewed with suspicion, does not meant that it will necessarily be rejected.[3]

44.  Third, as pointed out by Mr Lam, the modern approach is to treat evidence of subsequent conduct of the parties as generally admissible and to leave the court to assess the weight to be given to it having regard to the time when, and the circumstances in which, it occurred.[4] The Transfer was made in February 2013.  Whilst the court should focus on what happened before the Transfer in order to ascertain the intention of the parties at the time of the Transfer, I find that what happened afterwards are not consistent with the Defendant’s case that the Transfer was a gift.  The court is entitled to look at the subsequent events to assess the credibility of the evidence of the parties as to the intention of the Mother and the Defendant at the time of the making of the Transfer.

45.  Fourth, it is clear that the Defendant has abandoned her primary case that the gift was for all the interest in the Property.  In the trial itself, she accepted that the alleged gift was for 50% interest in the Property.  As the Defendant has the burden of identifying the exact subject matter of the gift, such shifting of stance certainly undermines the credibility of her case.

46.  Indeed, the circumstances of the case do not support the Defendant’s allegation of gift.

(iii)  The Mother’s plan for the sale of her main income-generating asset

47.  Firstly, there is no good reason as to why the Mother had to gift her main income-generating asset to the Defendant only.

48.  The Property initially belonged to the parents.  According to the Defendant, the Mother suddenly told her that she decided to give the Property to her byadding her name as a joint tenant co-owner so that she could have the Property upon her demise.  The Mother also told her that she was displeased with the behaviour of some of her siblings.  It is also the Father’s wish as expressed in his will that the Property should not be sold or transferred to person outside the family, and that was why the Mother decided to gift the Property to her.

49.  In the trial, the Defendant tried to show that she was a filial child taking care of the Mother.  Despite living in Canada, she came back to Hong Kong from time to time to take care of family matters.  The Mother also trusted her as shown by the execution of the 2011 POA which was a general power of attorney (as compared with the limited power of attorney later granted to the Plaintiff).  In fact, the Father directed the Fixed Deposits to be held in the name of the Mother and the Defendant and then under the Defendant’s sole name in 2008.  The only joint bank account of the Mother was under the joint name with the Defendant and not other children.  Further, according to the Defendant, the Mother had poor relationships with her other siblings.

50.  However, though the statutory declaration signed by the Mother on 7 February 2013 supports that, at that time, she was unhappy with Leung and Ling, there was no indication that she was displeased with the other siblings.  Indeed, the Plaintiff, Tim and Sheung would receive substantial amounts of cash under the Mother’s will dated 7 February 2013 (“the 2013 Will”), which was made at around the same time as the Transfer.  Further, the Mother also had more than 10 grandchildren.  There is no cogent reason why the Mother would suddenly decide to give the Property to the Defendant only.  Further, as rightly observed by Mr Lam, it is very odd that Kwok Wah said the Defendant merely told him that the Mother had gifted the Property to her without telling him the reason or anything else.

51.  In contrast, the Plaintiff’s case on what the Mother told him in July or August 2014 provides a far more plausible reason why the Mother decided to sell 50% interest in the Property to the Defendant.  In short, the Defendant persuaded the Mother to do so on the ground that she would need sufficient cash in bank if she would wish to make cash bequests to beneficiaries in her will.  Under clause 4(3)(i)-(iii)  of the 2013 Will, the Mother gave a total sum of $7.3 million in cash to her sons, daughters and grandchildren.  She must have considered how she could have so much cash upon her death. It is unclear whether she had in mind the $5 million odd Fixed Deposits left by the Father (which were then under the Defendant’s control).  But even assuming that she did, there was still a significant shortfall of more than $2 million.  She had no income or any income generating assets apart from the Property.  The monthly rental of the Property was only $70,000 a month, out of which she paid a total sum of $30,000 to her sons and also her own daily expenses (including medical expenses).  The Defendant could not explain how the Mother could have possibly made up the substantial shortfall by the time of her demise. In these circumstances, it made perfect sense for her to raise sufficient cash by selling 50% interest in the Property at $8 million to the Defendant as joint tenant.  At the same time, the Property would remain in the hands of her family upon her death, which apparently was the wish of the Father.

52.  Mr Li submits that gifting real properties to the children was not something new in the family: the Plaintiff, Leung and Tim had been given such gifts.  However, there is no dispute that the Ho’s Family was a traditional Chinese family and all the said gifts were made to the sons as their matrimonial homes.  Obviously, the parents trusted the Defendant.  As compared with the sons, the Defendant might even be regarded as a filial and able daughter who was able to take good care of herself.  Yet, it cannot explain why the Mother suddenly made such gift to the Defendant whilst at the same time making sizeable cash bequests to different beneficiaries under the 2013 Will.

53.  I also do not see how it can advance the Defendant’s case by saying that the gifting arrangement could keep the Property within the family.  Whether the Transfer was a sale or a gift, it could achieve such purpose.  The issue is whether the Mother intended the Defendant to get the Property for free, which I do not find it to be the case.

(iii)  The contradictions in the Defendant’s case

54.  Secondly, the Defendant’s case itself is full of contradictions.

55.  The Defendant’s case is very much based on the premise that it was the intention of the Mother to keep the “gift” secret.  According to the Defendant, her other siblings were bad and greedy always targeting the assets of the Mother.  If that was the case, there was more the reason to shut them up by telling them the Mother’s decision. There was nothing they could have done to stop the Mother from giving the Property to the Defendant.  And even if the Mother found it inappropriate to tell them immediately, I agree with Mr Lam that she could have made, and one would expect Ma would have advised her to make, a clear signed declaration that she intended to make a gift of the Property to the Defendant, i.e. a document similar to the statutory declaration dated 7 February 2013 in which she scolded some of her children in very strong language and explained why she decided to disinherit them.  There is no conceivable reason why she did not do the same in relation to the Property if the Defendant’s allegation is true.

56.  The contradictions do not end here.  Even assuming that the Mother favoured the Defendant the most, it is still inexplicable why the Mother had to give the Property as gift to the Defendant immediatelyrather than as a bequest upon her death.  As pointed out by Mr Lam, the Defendant did not need the use of the Property, or any of the rental income derived therefrom, at that time.  More importantly, to make a bequest in the will made on the same day would have been much more consistent with the Mother’s alleged desire to keep the matter secret.  In contrast, a sale, which had to be registered in the Land Registry, was bound to become public knowledge. In fact, the Plaintiff and Leung said that they were informed of the sale by some neighbours who came to know about it based on the information supplied by the estate agents.

57.  In reply to all these contradictions, the Defendant just maintained that it was the plan of the Mother, and she did not ask the Mother the reason for making such kind of arrangement.  Nevertheless, there should be a logical reason behind the Mother’s arrangement, and the absence of such logical reason certainly undermines the credibility of the Defendant’s case.

(iv)  No logical reason as to why the Mother, with the involvement of a solicitor, would have to dress up the “gift” in the form of a sale

58.  Thirdly, assuming that the Transfer was a gift, it is difficult to understand why the Transfer was dressed up as a sale and purchase rather than just by way of a deed of gift, bearing in mind that the transfer documents (which would be false and misleading if the Defendant’s case is true)  were prepared by a solicitor.

59.  In particular, the Defendant said the following in her witness statement:

(i)  The Mother said she would talk to Ma who was a solicitor of KML on the necessary arrangements of making a gift of the Property to her.

(ii)  After their discussions, Ma in the Defendant’s presence told the Mother that in consideration of stamp duty problem, she proposed to adopt a sale and purchase agreement to effect the transfer of the Mother’s interest in the Property to the Defendant.

(iii)  In order to effect the Mother’s intention, the Mother agreed with the legal advice of Ma and executed the gift in the form of a sale and purchase agreement.

60.  Hence, according to the Defendant, Ma knew that the Transfer was a gift but she nevertheless dressed up the Transfer falsely as a sale and purchase agreement.  I agree with Mr Lam that it is unlikely a solicitor would knowingly have designed or implemented a sham transaction which involved making false declarations on oath.  Further, the Defendant was unable to explain how dressing up the gift as a sale could possibly resolve any “stamp duty problem” as alleged.  As shown by the additional stamp duty payment of $393,750 on 19 February 2019, no stamp duty had actually been saved.  All these destroy the credibility of the Defendant’s story.

(v)  The Defendant’s case is inconsistent with the conducts of the parties after the making of the Transfer

61.  Further, the Defendant’s case is inconsistent with the conducts of the parties after the making of the Transfer.  I first start with the undated Chinese Memorandum executed by the Mother.

62.  In the Chinese Memorandum, the Mother expressly stated that the Transfer was a sale.  Apart from that, she specified the detailed payment term: a cheque of $1 million as deposit; and another cheque for the balance of the purchase price in the sum of $15 million.  The money under the second cheque would be used to maintain a fixed bank deposit under the name of the Defendant.  After the death of the Mother, such fixed deposit could then be used for the execution of the various provisions in her will.

63.  There is no basis for the court to doubt the authenticity of such document.  Assuming that the Transfer was a gift as alleged by the Defendant, it is difficult to understand why the Mother did not tell the truth and deliberately created a false document to lie and mislead the other siblings.  As pointed out by Mr Lam, the contents of such memorandum corroborate the Plaintiff’s evidence that the purpose of the sale was to raise sufficient cash in order to carry out the terms of the Mother’s will.

64.  It also provides the most logical explanation on how in fact stamp duty was saved. $8 million was exactly 50% of $16 million (as stated in the SPA and the Assignment), which could not possibly be a coincidence.  Selling and transferring 50% interest to the Defendant as joint tenant (who would acquire the other 50% upon the Mother’s death)  would enable the Mother to complete the transfer of the whole Property to the Defendant upon her death on the one hand and save 50% stamp duty on the other.  Furthermore, $8 million would be sufficient to carry out the terms of the 2013 Will.  For the present purpose, it is immaterial whether the Mother in fact wanted the Defendant to pay $8 million or $16 million.  The Chinese Memorandum has not been registered in the Land Registry and the Plaintiff has never purported to enforce it.  What is critical about this document is that both the Mother and the Defendant signed to confirm that the nature of the Transfer was a sale and not a gift.

65.  According to the Defendant, the reason for preparing the Chinese Memorandum was “if [the Plaintiff] knew the [Property] had been gifted to [her], he would be irritated and make trouble with [her]”.  However, the document was not only addressed to the Plaintiff.  Further, the false content would certainly give rise to more, rather than reduce, disputes: the Defendant’s allegedly greedy siblings would definitely ask the Defendant where the purchase money was, in particular when they found out that there was insufficient money to carry out the terms of the 2013 Will.  It is incredible that the Defendant had not thought about these serious potential problems after the Mother’s death, which would put her in a most difficult position.

66.  Finally, in the last sentence, the Mother stated expressly that an independent witness was arranged to sign the document to verify the truth of its content and to prevent any future disputes.  That independent witness was Lee Chau Hin (“Lee”), who was a classmate of one of the Defendant’s daughters.  It is unthinkable that the Mother would be so calculating; and that Lee, a stranger to the family, would have agreed to participate in the production of such a false document.  It is also significant that the Defendant has not called Bonnie (the Defendant’s daughter), who typed the document, and Lee to give evidence.

67.  The Plaintiff said that the Mother instructed him to chase the Defendant for the purchase price of the Property since July or August 2014, which the Defendant denied.  However, the Plaintiff has produced the type-written letter dated 25 October 2014 (“the 25 October 2014 Letter”)  supporting that, by then, the Mother was demanding the Defendant to account for the purchase price.  The Plaintiff explained that he recorded the Mother’s instructions in a 3-page handwritten document and he also typed it up.  The Mother then gave the handwritten document to the Defendant.  He then wrote a manuscript signed by the Mother on a typewritten copy to record that the handwritten document had been taken away by the Defendant. The signed typewritten copy was subsequently found missing.  The one produced in court was disclosed by the Defendant who challenges the authenticity of the document.  However, there is no suggestion, let alone evidence in support, that the Mother’s two signatures were forged.  I agree with Mr Lam that it was most improbable that: (i)  the Plaintiff would have made a false document containing so many unnecessary details; and (ii)  the Plaintiff would have chosen to present this document to the Defendant when the Mother was also present as claimed by the Defendant.

68.  The Defendant said that, after receiving the handwritten original, she read it to the Mother and asked her about it when they were alone, and “the [Mother] told [her] that the contents of the purported [25 October 2014 Letter] were made up by [the Plaintiff] and not being her words”.  The Defendant said in court for the first time that she then tore up the handwritten note.  But, curiously, she went on to say that, on 1 November 2014 in Hong Kong Sanatorium & Hospital, Ma gave her the typewritten version pursuant to the Mother’s instructions.  If the document did not reflect the Mother’s true intention, why would she have instructed Ma to do so?  The Defendant said further in court that, a few days later, she asked the Mother again who confirmed that it was not her idea. It is inexplicable why she then simply kept the typewritten copy, and did not confront the Plaintiff or clarify the matter with Ma.

69.  Despite the signature of the Mother, the Defendant still seeks to challenge the authenticity of the 25 October 2014 Letter on the ground that the contents therein are contrary to the Mother’s subsequent will dated 15 November 2014 (“the 2014 Will”), in particular: (i)  there seems to be inconsistency as to how the Mother dealt with the ownership of Flat 7C; (ii)  the Defendant was appointed as the sole executrix under the 2014 Will; and (iii)  there seems to be inconsistency as to how to deal with the Fixed Deposits.  However, the fact that the Mother later revised her testamentary arrangement should not undermine the credibility of the 25 October 2014 Letter.  As mentioned in the preceding paragraphs, the 25 October 2014 Letter was signed by the Mother and was, according to the Defendant’s own case, given to her by Ma pursuant to the Mother’s instruction.  Hence, I find that the 25 October 2014 Letter does accurately reflect the Mother’s words by that time.

70.  The contents of the 6-page handwritten letter dated 29 October 2014 (“the 29 October 2014 Letter”), also disclosed by the Defendant, further support the Plaintiff’s case that the Mother regarded the Transfer as a sale and she demanded the Defendant to pay for the purchase price.  According to the Plaintiff, though the Mother did not sign on the 29 October 2014 Letter, such letter was written by him upon the instruction of the Mother.

71.  The contents of such letter support the handwritten manuscript on the 25 October 2014 Letter that the Defendant told the Mother that she would consult Ma.  In the 29 October 2014 Letter, the Mother said that she had met Ma at home that morning who confirmed that, contrary to what Defendant told her, Ma had not met the Defendant at all. The Mother then talked about the Fixed Deposits and the following matters:

(i)  The Mother demanded the Defendant to pay for the purchase price for the Transfer in the sum of $8 million together with interest and to account to her 50% of the rental income associated with the Property, failing which Ma advised her to take legal action.

(ii)  The Defendant mentioned the possibility of purchasing the whole Property in the sum of $16 million, but according to Ma, such arrangement would not take effect unless the proper legal documents were executed.

(iii)  According to the legal advice given to her during the execution of the Transfer, the Property was transferred to them as joint tenants.  However, she had instructed Ma to execute the documents to effect severance of their interests in the Property.

72.  According to the Defendant, she received the letter from the maid on or about 4 November 2014.  The Defendant challenges the contents of this letter.  However, there is really no conceivable reason why the Plaintiff had to make up such a long document.  In particular, it is difficult to explain why the Plaintiff had to falsify a second letter when, according to the Defendant’s case, the Plaintiff had made a false document only a few days ago, i.e. the 25 October 2014 Letter. Further, the 29 October Letter appears to be a genuine document.  It purported to record some past events.  The letter issued by the Rating & Valuation Department referred to therein was true.  I agree with Mr Lam that it would have been extremely stupid for the Plaintiff to invent the conversations and meetings between the Mother and Ma, as the “lies” would and could have been easily exposed if the Defendant verified the matter with Ma.

73.  The Defendant simply said that after she received such letter, she asked the Mother in hospital (the Mother was hospitalized on 30 October 2014)  who confirmed to her that the contents of the letter were made up by the Plaintiff. But on the Defendant’s own case, this was the second false document produced by the Plaintiff within a period of 4 days.  It would have been an utmost serious matter.  Yet according to the Defendant, neither she nor Kwok Wah confronted the Plaintiff directly or destroyed the document immediately or took any steps to ensure that this document could not be misused by the Plaintiff to misrepresent the true intention of the Defendant.  This does not make much sense.

74.  The Defendant alleges that the Plaintiff had a record of making false letters purportedly on behalf of the Mother, and she referred to the 3 letters addressed to Tim, Ling and Leung.  Naturally, the Plaintiff and the Defendant gave very different evidence about these draft letters. However, I agree with Mr Lam that there is no conceivable reason why the Plaintiff had to ask the Defendant’s daughter to help typing up these allegedly false letters (and one of the drafts was incomplete).  In any event, these draft letters do not provide any reliable assistance in resolving the real issues in this case.

75.  Leung said that, on 1 November 2014, when they were on their way to the hospital to visit the Mother, the Defendant told him, inter alia, that: (i)  the lawyer asked her to execute the deed of severance in respect of the Property; (ii)  in order to save stamp duty payment, the Mother sold the Property to her by way of joint-tenancy arrangement.  The Defendant denied such conversation.  But having considered all the other factors identified in this Judgment, I accept Leung’s evidence as the truth.  In fact, Leung was a most impressive witness whose demeanour and answers in cross-examination were impeccable.

76.  I agree with Mr Lam that the truthfulness of the 29 October 2014 Letter is supported by the objective fact that, as anticipated in that letter, the Mother signed on a Deed of Severance of Joint Tenancy dated 3 November 2014 (“the 2014 Deed of Severance”).  The Defendant claimed she only knew about the existence of this document after the commencement of this action, but this could not be true.  Even putting aside Leung’s evidence on what the Defendant told him on 1 November 2014:

(i)  As the document was supposed to be signed by the Defendant, the solicitor would have asked her to sign in the normal course of event.  Ma in fact met the Defendant and others in the hospital on 3 November 2014, and it was quite unbelievable that Ma did not mention the 2014 Deed of Severance or asked her to sign on it at all.

(ii)  In a statement of account prepared by the Defendant[5], she stated that: (a)  on 17 November 2014, she paid $59,700 as legal fees to Ma for, inter alia, preparing the 2014 Deed of Severance and arranging the Mother to sign on 1 November 2014; and (b)  on 25 November 2014, she paid $139 as travelling expenses of collecting, inter alia, the 2014 Deed of Severance from the solicitors.

77.  In trying to explain the payment of legal fees, the Defendant testified that the Mother simply asked her to ignore it and she did not follow up on the matter.  This is a most surprising explanation.  The existence of such document should have been an alert to her as such document would affect her interest in the Property (which according to her was a gift to her), and I do not accept that she could have ignored such important matter.

78.  Hence, what happened must be that the Defendant refused to sign the 2014 Deed of Severance, and she was aware that the Mother intended to sever the joint tenancy of the Property.

79.  The Mother made the 2014 Will on or about 15 November 2014 whilst in hospital.  The Defendant relies heavily on clause 4(3)  of the 2014 Will, which provided that if the Mother severed the joint tenancy in respect of the Property during her lifetime, the 50% interest retained by her would be given to the Defendant upon her death.  

80.  The Plaintiff and his witnesses did not know why the Mother included such clause in this will, but I agree with Mr Lam that this clause does not assist the Defendant’s case and indeed gives rise to more important unanswered questions.  This clause contemplated the possibility that the Mother might sever the joint tenancy. But if the Mother had already agreed to give the whole of the Property to the Defendant as alleged by her, why would she have considered such possibility?  More importantly, this clause went on to stipulate that, if such possibility materialised, the Mother would nevertheless give the 50% interest that she had retained to the Defendant upon her death.  This provision rendered the potential severance completely meaningless.  Why would the Mother have contemplated and agreed to such a possible futile exercise?  In any event, objectively speaking, this clause safeguarded the interest of the Defendant irrespective of whether the Mother was going to sever the joint tenancy.  As submitted by Mr Lam, the Defendant might have played some roles in the inclusion of this clause, but it is quite unnecessary for the court to make any finding in this respect for the present purpose.

81.  The Plaintiff said that, which is disputed by the Defendant, there was a meeting about 3-4 days after the Mother was discharged from hospital on 8 December 2014.  In that meeting, the Defendant complained emotionally that the original deal was for the sale of the whole Property.  Now that the sale was only for 50% interest, she did not want to buy the Property any more.

82.  What is not in dispute is that, at around that time, the Defendant created a statement of account for transactions between 6 April 2008 and 30 November 2014 (“the Statement of Account”).  There are two important entries in the Statement of Account: (i)  a sum of $1 million on 28 February 2013 described as “謝斐道150舖訂金” (Jaffe Road No 150 Shop deposit); and (ii)  a sum of another $1 million on 30 September 2014 described as “謝斐道150舗付款” (Jaffe Road No 150 Shop payment).  It does not matter whether the Defendant had actually made these payments, the point is why she recorded that she had paid $2 million as the purchase price of the Property if that was not a genuine sale.

83.  In trying to justify these entries, the Defendant gave inconsistent and illogical explanations.  Initially, she said these sums were just “墊支租金” (prepaid rent)  prepaid by her in the fear that she might not be able to transfer the monthly rental in time to meet the Mother’s daily expenses, and that they would be set off against rental to be received.  If that was really the case, there is no reason why she did not simply describe the payments as “prepaid rent”.  She then said that she described them as such pursuant to the Mother’s instructions in order to be shown to her siblings as a follow up on the undated Chinese Memorandum; and in her words “做戲做全套” (to complete the whole show).  But she also said that the document was to be considered between her and the Mother only (but the Mother was illiterate).  Nevertheless, if true, this would only put the Defendant in an even more difficult position upon the Mother’s death.  As rightly observed by Mr Lam, her siblings would certainly ask for the whereabouts of the $2 million and also the outstanding $14 million purchase price.  The fact that she always respected the wishes of the Mother cannot explain why she had not sought clarification or asked about the purpose of such arrangement from the Mother in respect of such important matter.

84.  It is clear that the Defendant had produced the Statement of Account to her siblings. There were WhatsApp messages exchanged between the family members on 4 January 2015.  By then, their relationship had broken down, it was recorded therein that the Plaintiff on behalf of the Mother asked for a meeting on 11 January 2015 to clarify the Statement of Account.  The Defendant then became angry.  The Plaintiff said he only exposed the Defendant’s fraudulent scheme.  He further said that the Defendant should be responsible for paying the $300,000 stamp duty and that the Defendant had failed to account for the $8 million sale proceeds and interest thereon.  It is most surprising that the Defendant simply withdrew from the chatgroup, and did not say there and then to her siblings that it was indeed a gift not a sale, and that all those allegations against her were lies made up by the Plaintiff.  Avoiding confrontation is hardly an excuse under such kind of circumstances.

85.  The Plaintiff produced a typewritten document signed by the Mother purportedly recording her oral instructions on 28 March 2015 (“the 28 March 2015 Memorandum”).  The Defendant again challenges its authenticity.  However, this document was retrieved from Ma’s firm, and there is no evidence that the Mother’s signature was false.  The Defendant claimed that she had never seen this document and had never heard from the Mother mentioning the matters therein.  In fact, the bulk of the contents did not concern the Property.  What is significant is that it recorded that in a meeting held before the new year, the Defendant said that she decided not to buy the Property and would account to the Mother, but there was no subsequent follow up.  This supports that there was indeed a meeting in mid-December 2014 as claimed by the Plaintiff.  The Defendant admitted that some of the contents were true, and yet there is no conceivable reason why the Plaintiff had to fabricate another false document (which would be the third one according to the Defendant’s case)  to advance his case, bearing in mind that he was only an executor and perhaps one of the beneficiaries of the estate of the Mother.

86.  At the trial, the Plaintiff admitted that the 28 March 2015 Memorandum was placed in a drawer from March 2015 to April 2016 and he only retrieved this document after the commencement of this action.  The Plaintiff further admitted that he did not pass the said memorandum to Tim and Leung for reading.  Mr Li attacks the Plaintiff’s case as to why he had to apologise subsequently when he did not show the 28 March 2015 Memorandum to Tim and Leung for reading. Further, the contents of the memorandum show that the Mother’s mind was muddled as she could not remember clearly what assets she had at the time.

87.  I do not accept these challenges.  Though the Mother might be at one stage confused as to the exact assets possessed by her at the time, she had clearly expressed her intention for the Defendant to pay for the purchase price of the Transfer in a series of documents, which is inconsistent with the Defendant’s case that the Transfer was a gift.  Further, given that it was very much a family dispute, it is too pedantic to pick on the apologetic words used by a person addressing his siblings.  More importantly, it was quite unnecessary for the Plaintiff to falsify another document to boost his case.

88.  The Plaintiff said that the Mother’s condition improved after regular peritoneal dialysis.  On or about 15 April 2015, the Mother instructed the Plaintiff to make an appointment with Ma.  For that meeting, the Plaintiff prepared a memo recording in detail the matters on which the Mother intended to consult Ma (“the 15 April 2015 Memorandum”).  The Mother wished to clarify exactly what documents she had signed during her hospitalization.  In respect of the Property, she referred again to the meeting in which the Defendant said that she would not buy the Property any more but she failed to follow up as promised.  Under such circumstances, the Mother wanted to know: if the Defendant still wanted to buy the Property, where was the money and interest thereon; and if the Defendant no longer wanted to buy, where was the rental income and interest since February 2013, etc.  The Mother also requested: (i)  the Defendant to return the title deeds of the Property; and (ii)  to revoke all previous wills.  There is no reason for the court to doubt the authenticity of this document, and indeed there is no serious challenge by the Defendant in this regard.

89.  The Plaintiff gave un-contradicted evidence that on 16 April 2015, he and the Mother consulted Ma.  Apparently, Ma advised that there was no way the joint tenancy could be severed without a Deed of Severance signed by the Defendant.  Whether Ma gave such advice or not, the Mother then changed to consult Mr Ricky Wan (“Wan”)  of Yip, Tse & Tang (“YTT”)  on 20 April 2015, which is also an undeniable fact.  As rightly observed by Mr Lam, if the Defendant’s relationship with the Mother remained as good as suggested by her, it is difficult to explain why: (i)  the Mother did not inform the Defendant of her meeting with Ma, her decision to consult another solicitor and her subsequent meetings with Wan; and (ii)  the Mother chose to see Ma and Wan in her absence.

90.  Wan confirmed what happened during the four occasions on which he met the Mother in a detailed letter.  I agree with Mr Lam that there is no reason whatsoever to challenge the accuracy of the record.  At the first meeting on 20 April 2015, the Mother told him that she had a property dispute with her daughter.  As her daughter had not paid the purchase price, she would like to make a will to protect her interest.  Wan advised her on the implication of survivorship.  After that, the Plaintiff told Wan about the previous advice given by Ma, but Wan advised them that severance could be done by a notice signed by the Mother alone.  Wan confirmed that the Mother “was able to express her intent and communicate coherently” at all material times.  As observed by Mr Lam, if the Defendant had indeed made a gift of the Property to her as alleged, then what the Mother said to Wan would be completely false and wrong.  This simply cannot be right.

91.  At that meeting, the Plaintiff was then asked to leave the room so that Wan could take instructions from the Mother on her new will independently and confidentially.

92.  On 23 April 2015, the Mother signed the 2015 Notice of Severance at Wan’s office.  The notice was sent to the Defendant by ordinary post, but the Defendant denied receipt thereof.

93.  Mr Li tries to make a point that, if there was a dispute between the Mother and the Defendant, it would be odd that the Mother had not instructed Wan, who by that time knew about the dispute, to issue a pre-action letter to the Defendant to protect the Mother’s interest.  He also submits that the reason given by the Plaintiff for that (i.e. they had no money to pay for such legal expenses)  was unreasonable in the circumstances.  However, despite Mr Li’s able submissions, there may be different reasons for the Mother not to have issued pre-action letter, for example, she would prefer to keep the dispute within the family without resorting to legal proceedings.  In addition, the reason given by the Plaintiff should be understood as someone who did not want to spend money on legal expenses which are expensive to lay persons. Hence, I do not find that these arguments would undermine the credibility of the Plaintiff’s case.

94.  There was a family meeting on 28 April 2015 (“the 28 April 2015 Meeting”), and I accept that the typewritten meeting record produced by the Plaintiff (“the 28 April 2015 Meeting Record”)  accurately reflects the contents of the discussions in that family meeting.  The Plaintiff explained that he had jotted down some handwritten notes which he no longer kept.  Shortly after this action had commenced and after consulting his siblings, the Plaintiff typed up the record.  The accuracy of the 28 April 2015 Meeting Record has been confirmed by Leung.

95.  It was recorded in the 28 April 2015 Meeting Record that:

(i)  The Mother demanded the Defendant to return various properties entrusted to her including 50% interest in the Property.

(ii)  The Mother accused the Defendant for not honouring her promise to pay $8 million to buy the 50% interest in the Property, and as a result the Mother could not pay for her medical expenses. The Mother asked the Defendant to return the 50% interest in the Property to her or to pay her the $8 million.  The Defendant said she did not have the money, further she said it was the original deal to sell the whole interest in the Property to her, and she would not buy if the sale was only for 50% interest in the Property.

(iii)  Tim said that the Transfer was not a fair deal. To avoid the allegation of cheating the Mother, the Defendant said she would return the Property to the Mother.

(iv)  There was a confirmation that the Defendant returned the title deeds of the 4 Properties to the Mother.

96.  It is common ground that, on that occasion, the Defendant returned the title deeds of the 4 Properties (including the Property)  and some other valuable or memorable family documents to the Mother, who affixed her chop to acknowledge receipt of the same.  James also signed as a witness.  That certainly corroborates the contents of the record produced by the Plaintiff.

97.  In trying to explain what happened in the 28 April 2015 Meeting, the Defendant said the sole purpose of that meeting was for her to return various documents and objects to the Mother.  She never agreed to give back her interest in the Property, and there was no discussion about the ownership of the Property.  James simply proposed that the Property be mortgaged to raise money though there was in fact no need to do so, and she returned the title deeds because they were documents kept by her and she wanted to avoid confrontation with the Plaintiff.

98.  It may be understandable why the Defendant returned the other properties and objects to the Mother.  But on the Defendant’s own case, the Property had already been gifted to her and so there is no reason why she would see fit to return the title deeds of the Property to the Mother.  It is difficult to understand why she did not mention the alleged “gift” under such kind of circumstances.

99.  Further, having regard to the WhatsApp messages in January 2014 and events that had happened by then, it is incredible that the Plaintiff (and other siblings)  did not raise any question about the Property in the 28 April 2015 Meeting.  And if it was the Plaintiff who forced the Mother to ask the Defendant to return the title deeds of the Property, one would expect that the Defendant would have confronted the Plaintiff and told the siblings the truth.  Her admission in court that she would accept that the Mother took back 50% interest in the Property is most telling.  It is also most strange that James, being the most junior family member present, would have proposed mortgaging the Property out of the blue when there was not even any real need to do so.  Further, there is no reason why James’ friend, who had some legal knowledge, was present if there was no plan to make a deed of family arrangement.  I agree with Mr Lam that it is unbelievable that his friend was simply there to witness the return of the documents and objects as alleged by the Defendant, and in fact the receipt was only signed by James and stamped by the Mother.  It is also inexplicable why in another statement of account produced on that day, the Defendant deleted the references to the two payments of $1 million in the previous Statement of Account.  If the purpose of the Statement of Account was “做戲做全套” (to complete the show)  as alleged by the Defendant, those references would be of crucial importance.  As pointed out by Mr Lam, the Defendant’s deletion of such references was in fact an indication that she had decided to rescind the sale.

100.  Whilst the Defendant testified that the 28 April 2015 Meeting was not a significant one and there was nothing to follow up, the WhatsApp messages in the chatgroup entitled “28/4 會議跟進” (28/4 meeting follow-up)  (“the 2015 Chatgroup”)  show otherwise.  As the title of the 2015 Chatgroup suggests, there were indeed matters that required follow up. It was intended that they should prepare a deed of family arrangement to reflect the result of the discussions at that meeting.  James stated that the main points in the deed should include that the Defendant “would like to forfeit her ownership and rights [in] the Property” and agreed to the Mother becoming the sole owner, and that this arrangement was mutually agreed by them and they waived their right to bring further legal actions. The Chinese version uses the term “放棄”.

101.  Mr Li submits that both the English word “forfeit” and the Chinese words “放棄” are not consistent with the suggestion that the Defendant was the guilty party in breach of the SPA and hence should be liable to return the Property to the Mother.  I disagree.  These words were apt to describe the Defendant’s decision not to buy any more and to give up her half interest in the Property.  I also agree with Mr Lam that it is most improbable James, bearing in mind his status in the family, invented these proposed terms if they were not something which had already been agreed upon.  It is clear that the contents were based on his recollection of what had actually been discussed.

102.  According to Kwok Wah, the Defendant told him that she did not instruct anyone to draft the deed, and all these things were done by the other family members in the Mother’s name with a view to pressurize her to give up her interest in the Property.  Kwok Wah then advised the Defendant that if she was willing to give up her interest, the draft deed was deficient as it did not specify that it was the Mother who breached the promise of gift so that the Mother should be responsible for the payment of stamp duty, and the Defendant should engage a lawyer to draft the document.  I have great reservation about the credibility of his evidence in this regard.  Even if Kwok Wah might not want to get involved in the dispute within the Ho’s Family, it was most unnatural (as said by Kwok Wah)  that the Defendant did not tell her husband who put pressure on her, and more importantly, what her stance was.

103.  What is even more telling is the Defendant’s response in the 2015 Chatgroup.  She described the agreement for the Transfer as a “買賣協議” (sale and purchase agreement)  and that the Defendant had breached the same, rather than a “餽贈協議” (gift agreement).  Further, she did not say at any time, even after she allegedly had confirmed with the Mother that the latter had no intention to take back the gift, that there was no such discussion about returning her interest in the Property to the Mother at the meeting or she would not do so because it was a gift.

104.  In a disparate attempt to attack the Plaintiff’s case in this regard, Mr Li tries to rely on the following matters:

(i)  Whilst Leung testified that the 9A Flat was not discussed in the 28 April 2015 Meeting, the ownership of such property was dealt with in the draft family agreement.

(ii)  As the Mother had by then sought the assistance of Wan, she could have asked Wan (instead of asking James or his friend)  to prepare the draft family agreement if she wanted to get back her interest in the Property.

105.  These challenges have no merit at all.  Leung cannot be expected to remember all the minute details discussed in the 28 April 2015 Meeting.  Taking into account the deteriorating relationship between the siblings by that time, it is hard to imagine that the parties left out the important family assets in the discussion.  Further, there is nothing surprising that the relevant parties did not want to spend money to engage the professional service of Wan.  After all, legal expenses are not cheap for lay persons.

106.  There is further evidence to show that the Mother did not regard the Transfer as a gift.  Her solicitor, Wan, arranged the Mother to be examined by Dr Au Ming Kai (“Dr Au”)  on 8 May 2015 to ensure that she had the mental capacity to make a new will.  Dr Au made contemporaneous handwritten notes which were then reduced into a written report.  There is no basis for the court to doubt the accuracy of such report.  Most importantly, the Mother told Dr Au that “she has two properties: the flat she is staying and a ground floor commercial property, currently rented out”.  The latter is clearly referring to the Property.  If she had already given the Property as a gift to the Defendant as alleged, she would not have told the aforesaid to Dr Au.  Indeed, what she said is perfectly consistent with the Plaintiff’s case that, by then, the Defendant had agreed to return the 50% interest in the Property to the Mother, and so the Mother regarded herself as the full owner of the Property.  Dr Au also recorded that the Mother had explained why she disinherited all her daughters: “they are distant to me… seldom come along to see me… the two older daughters’ lives are very comfortable, my youngest daughter has moved to the [UK] for over 10 years, very distant and seldom rings me”.  Dr Au concluded that the Mother had fair knowledge of the extent of her assets and possessed the testamentary capacity to execute a will.

107.  The Mother then executed her last will dated 11 May 2015 before Wan (“the 2015 Will”).  There were important changes in the distribution of her assets in the 2015 Will, and the Plaintiff seems to suggest that, by reason of such changes, the relationship between the Mother and the Defendant were not as good as that described by the Defendant.  However, for the purpose of this Judgment, I do not find it necessary to address the question as to why the Mother decided to change the distribution or not to inform the Defendant the contents of the 2015 Will.

108.  On 29 May 2015, the Plaintiff on behalf of the Mother sent a WhatsApp message to the Defendant making two requests: (i)  to increase the monthly sum to be paid to the Mother from $60,000 to $80,000; and (ii)  to pay her an additional lump sum of $100,000.  The Defendant replied in a surprisingly rude manner.  She explained that as the Mother was illiterate, she did not expect that the Mother would read her words.  But as pointed out by Mr Lam, she must have realized that the Plaintiff would certainly read the Defendant’s reply to the Mother, which would only provide more ammunition to the Plaintiff to attack her.  In any event, after that, the Plaintiff sent a voice message from the Mother to the Defendant.  The Defendant tried to make a point that the Mother did not mention about the Property in that voice message, but it is hardly surprising because this was not the subject matter of the discussion by that time.  The Defendant alleged in court that it was the Plaintiff who compelled the Mother to record the voice message.  If that was case, it is difficult to understand why, by that stage, the Defendant still did not expose the Plaintiff’s alleged serious misconducts to her other siblings.

109.  On 28 August 2015, the Plaintiff sent a WhatsApp message to Tim and Leung as well as the Defendant.  He put on record that it was already 4 months after the 28 April 2015 Meeting, and that “双方达成共識的三件事至今仍未办妥” (the 3 things mutually agreed by the parties had not been completed)  and one of which related to “地舖業權” (the ownership of the ground floor shop), i.e. the Property.  This certainly contradicts the Defendant’s allegation that ownership of the Property was not discussed at that meeting at all.  Moreover, the Defendant did not respond to the message nor denied what the Plaintiff said.  On 11 September 2015, the Plaintiff informed his siblings that the Mother asked to hold another meeting on 13 September 2015 to follow up on matters agreed upon but not yet completed at the 28 April 2015 Meeting.  It appears that the Defendant refused to talk any more.  Again, if the Defendant’s case is to be believed, it is most surprising that she did not make any complaints about a whole series of the Plaintiff’s alleged misconducts to her other siblings.

110.  On 7 January 2016, with the assistance of Wan, the Mother executed a power of attorney in favour of the Plaintiff.  The tenancy of the Property was due to expire on 31 March 2016.  As the Defendant was still one of the joint tenants on record, she had to sign the new lease. On 19 February 2016, the Defendant called the Plaintiff to discuss about the renewal of the tenancy, and said that she would return her interest in the Property to the Mother so long as it was done properly by a sale and purchase agreement and the Mother paid the stamp duty.  The Plaintiff then sent an apologetic WhatsApp message to the Defendant.  On the same day, the Plaintiff informed his two brothers that the Defendant would sign the new lease on 23 February 2016.  In the same message, he referred to the said conversation he had with the Defendant on the same day and the promise made by the Defendant to return her interest in the Property to the Mother in the 28 April 2015 Meeting.  Again and surprisingly, the Defendant did not refute that no such thing had happened.  Her explanation that she was numb (麻木哂)  and did not see the point of responding (if what the Plaintiff said were all lies)  is most unnatural and unconvincing.  Eventually on 23 February 2016, the Plaintiff on behalf of the Mother and the Defendant signed a new tenancy agreement as landlords.

111.  The Mother passed away at home on 5 March 2016.  There is a dispute as to whether that the Defendant said in front of the Mother’s body in the mortuary at the hospital that she would return the Property to Tim.  I do not think that the result of the case turns on whether the Defendant actually said so, but I agree with Mr Lam that it is improbable and quite unnecessary that Leung had to fabricate such an episode.

112.  In any event, there was a family meeting in the afternoon on 25 March 2016 (“the 25 March 2016 Meeting”)  after the Mother’s funeral on the same day.  The Plaintiff has produced a typewritten meeting record which was prepared in the same manner as the one for the 28 April 2015 Meeting (“the 25 March 2016 Meeting Record”).  The following matters, inter alia, were recorded in the 25 March 2016 Meeting Record:

(i)  Some of the siblings expressed their dissatisfaction that the consideration for the sale of the 50% interest in the Property to the Defendant was below market value.

(ii)  When confronted on the issue on payment, the Defendant admitted that she had not made any payment, alleging that the rental income had been used to set-off the payment of initial deposit.  She was also asked the reason as to why she collected all the rental income when she only purchased 50% interest in the Property.

(iii)  The Defendant was asked as to why she refused to honour the promise that she had given to the Mother in the 28 April 2015 Meeting that she would return the Property to the Mother.

(iv)  When Tim asked the Defendant as to how to resolve the dispute, she said she would return her 50% interest in the Property upon the execution of formal legal documents and the payment of stamp duty, so that she would have no further legal liability associated with the Transfer.

113.  The accuracy of the record has been confirmed by the evidence of Sheung and Leung in court.  I agree with Mr Lam that, since there was no grudge between Sheung and the Defendant at that time (the incident relating to some outstanding debts which happened long time ago was quite inconsequential), the court should prefer to accept the evidence of Sheung.

114.  In contrast, the Defendant challenged the accuracy of the record, denying that she had agreed to give up her interest in the Property.  However, she evaded the question as to what were actually discussed about the Property in the 25 March 2016 Meeting.  It is most incredible that no one mentioned about the Property at all during that meeting (as alleged by the Defendant in court)  bearing in mind that, according to the Defendant’s case, the Plaintiff had all along wanted to snatch the Property and by then the Mother had died.  While Kwok Wah purported to support the Defendant’s evidence, it is also improbable and unbelievable that he did not say anything or take part in any discussion when, on his own admission, his wife was challenged by her siblings on various matters. The record indeed stated that, at least, Kwok Wah spoke out to support his wife on two occasions.  I agree with Mr Lam that this part of the record (which set out the disagreement of the Defendant and Kwok Wah)  is most improbable to have been made up by the Plaintiff.

115.  There was another family meeting 5 days later on 30 March 2016.  Again, the Plaintiff has produced a typewritten record prepared in the same manner as those for the previous meetings.  The Defendant was recorded to have voiced out her frustration of being wrongly accused of cheating the Mother.  She also agreed to return her 50% interest in the Property upon the execution of formal legal documents and the provision of a letter of indemnity by the other siblings agreeing to indemnify her of any liability for payment of stamp duty.

116.  The accuracy of the record is again confirmed by the evidence of Sheung and Leung in court.  On the other hand, the Defendant and Kwok Wah testified that Sheung was not present in that meeting, but I agree with Mr Lam that there is no reason for Sheung to have falsified her presence in the meeting.  Indeed, I have serious doubt about the credibility of the Defendant’s evidence about the meeting.  It must have been clear to the Defendant that his siblings believed that the Property formed a part of the Mother’s estate and hence should be included in the deed of family arrangement. It is impossible to understand why the Defendant asked to see the Mother’s last will first because if the Property had been gifted to her, the Mother’s last will would be irrelevant.  The Defendant then said that she had queries due to the severance of the joint tenancy, but she must have forgotten her earlier evidence that she was unaware of the details of the severance by then.  Precisely because she did not have any legal knowledge, it is impossible to understand why she did not simply tell her siblings that the Mother gave the Property to her as a gift and she would not return the 50% interest in any event.  This would have been the most natural response even to a lay person.  Again, what Kwok Wah said in trying to corroborate the Defendant’s evidence does not make much sense.  He said the Defendant had not consulted his views and he did not ask anything about the Property at all, which is most surprising in the circumstances.

117.  Mr Li tries to challenge the accuracy of the records made by the Plaintiff after the meetings on 28 April 2015, 25 and 30 March 2016 on the ground that these records are only self-serving statements which were prepared after the commencement of the proceedings.  According to him, there are evidential gaps as to what were added or deleted after the discussions between the siblings about the contents of these meetings.  However, one would not expect that the family members would have jotted down all the details and prepared a perfect record after the meetings.  After all, not all people would contemplate that their family disputes would eventually end up in courts.  There is certainly a time gap between what happened and the time when these records were prepared.  Yet, the court is not just relying on these records to reach the final conclusion.  The court mainly assesses the credibility of the oral evidence of the various witnesses, and these records only support the memory of these witnesses.  As I have mentioned above, it is unlikely that these siblings would have conspired together to fabricate false evidence against the Defendant, and I accept that these records are the result of their best effort to recall what had actually happened in these meetings.

118.  After the meeting on 25 March 2016, a WhatsApp chatgroup entitled “何氏家族群” (“the 2016 Chatgroup”)  was set up by Tim.  The 2016 Chatgroup recorded the Defendant’s own words: (i)  on 31 March 2016, the Defendant said that after discussing with her lawyer (i.e. Ma), she asked for the disclosure of the Mother’s last will before considering the execution of a deed of family arrangement; and (ii)  on 2 April 2016, she repeated such request as advised by her lawyer.

119.  On 5 April 2016, Ma stated that she had been instructed by the Defendant to seek a copy of the Mother’s last will.  Using the excuse of not having received a copy of such document, the Defendant declined to attend a family meeting on 8 April 2016.  The Plaintiff through solicitors provided a copy of the 2015 Will to Ma on 7 April 2016.  After that, the Defendant still refused to attend the meeting.  In the 2016 Chatgroup, Sheung then referred to the Defendant’s promise to return her interest in the Property.  The Defendant denied that she had made such a promise.  In any event, the family meeting was postponed to 12 April 2016.

120.  On 11 April 2016, the Defendant made it clear that she would not attend the meeting on 12 April 2016 and said that her siblings could contact her lawyer. The Defendant wrote the following words: “將我真金白銀購買舖頭的事實扭曲” (twisting the fact that I had used real money to purchase the Property).  As rightly observed by Mr Lam, there is absolutely no reason whatsoever why the Defendant would have said so unless it was a genuine sale.  If her case was true, one would expect that, by then, she would have said loudly that the Mother had given the Property to her as a gift.  

121.  In trying to explain why she said so, the Defendant just said that the wordings were ambiguous, and she was referring to the fact that she had contributed $50,000 to assist the Father to acquire the Property in 1976.  But this cannot be true.  First, even assuming that she had given $50,000 to help her parents to buy the Property, it was not the case that she bought the Property herself.  She merely helped them to buy it, which is very different from what she said in the 2016 Chatgroup that she purchased the Property herself.  In a desperate attempt to explain away this point, she said in court, for the first time, that she had missed typing three characters in her message, i.e. “給父親” (to the Father).  This is a most contrived explanation.  Even on the Defendant’s own evidence, whether she had contributed to the purchase was never a subject matter of the relevant discussions.  There is no reason why she had to talk about what happened back in 1976.  This was also not how her siblings understood her message.  When she was then confronted by Tim that such stance was inconsistent with her promise to return the Property given in the previous family meetings, she simply did not reply further.

122.  It is true that the Defendant, through her lawyer Ma, later denied having agreed to renounce her interest in the Property, but what is most unusual is that she did not mention the alleged gift in the correspondence.  That was the case even if the Plaintiff’s solicitors had threatened to institute legal proceedings against her.  Even to a lay person without the benefit of legal advice, one would expect that the Defendant would have mentioned the gift by then if not much earlier.  At the latest, she should have mentioned it in the 2016 Chatgroup and the correspondence between lawyers.  Surprisingly, it was only in her Defence and Counterclaim filed on 22 June 2016 that she first mentioned the gift.  In my judgment, the lateness in making such allegation, which is most unusual, destroys the credibility of the defence case.

(viii)  Conclusion on the issue of sale or gift

123.  Based on the evidence in this case, it is clear that the Transfer was a sale and not a gift.  The signed transfer documents show that it was a sale.  More importantly, the subsequent words and conducts of both the Mother and the Defendant show clearly that it was a sale, as evidenced by the contemporaneous records such as the WhatsApp messages and the Statement of Account which were written or prepared by the Defendant.  Apart from such incontrovertible evidence, there are also the records and memorandums made by the Plaintiff about the various meetings and the instructions given by the Mother.  As analyzed in the earlier part of this Judgment, I accept the genuineness and accuracy of these documents. Finally, the records prepared by some third parties, such as Wan and Dr Au, also support the Plaintiff’s case.

124.  Mr Li submits that the Mother was an old lady at the material time and she could have changed her mind easily.  Further, relying on Lavelle v Lavell[6], Mr Li argues that no weight or very little weight should be given to the words and conducts of a donor said and made long after the gift was given and perfected. The words and conducts more proximate to the transaction itself should be given more weight.

125.  Whilst I agree with such observation, the court does not just look at the subsequent conducts of the Mother in making the aforesaid conclusion.  The court looks at all the circumstances of the case, in particular the interactions between the relevant parties and the conducts and the words of the Defendant, in reaching the conclusion that the Transfer was a sale.

126.  Obviously, it was the intention of the Mother and the Defendant at the time of the making of the Transfer that counts.  In the earlier part of this Judgment, I have already explained the reasons as to why it was unlikely that the Mother would have made such a gift to the Defendant.  Even if she wanted to make such a gift, it was unlikely that the Mother would have made the gift in such manner, i.e. dressing up the gift as a sale.  Further, even bearing in mind the risk of the Mother changing her mind, the subsequent conducts of the relevant parties are not consistent with the intention of making a gift at the time of the Transfer.  For all the reasons discussed in this Judgment, I find that the Transfer was a sale.

EFFECT OF THE FINDING OF A SALE

127.  As I find that the Transfer was a sale, the Defendant was obliged to pay $8 million being the stated consideration.  Although clause 2 of the SPA provided that this sum should be paid on completion (i.e. 7 February 2013)  and the Assignment contained a receipt clause, it is common ground that the Defendant had not paid any of such consideration.  Being a transaction within the family, the Mother had not insisted on payment on that date.  On the evidence, the Plaintiff on behalf of the Mother started to chase for the outstanding $8 million in July or August 2014.  Under such circumstances, the Defendant committed a repudiatory breach by failing and refusing to accede to such demand within a reasonable time after that.  As submitted by Mr Lam, the Mother then had the choice to elect accepting the repudiation or affirming the sale.  It is for the Defendant to prove that the Mother had affirmed the sale so that she lost the right to rescind it and claim back the 50% interest of the Property.

128.  According to the letter dated 29 October 2014, Ma advised the Mother that she had the right to rescind the SPA if the Defendant did not pay the price.  What is critical is the events that took place at the 28 April 2015 Meeting.  The evidence shows that, upon the Mother’s demand of either payment or returning the interest in the Property, the Defendant stated that she would no longer buy the Property.  She then returned the title deeds of the Property to the Mother, who acknowledged receipt by stamping on the relevant document. The words and conducts of the parties on that occasion clearly support that the Mother had accepted the Defendant’s repudiation of the SPA.  There are also numerous subsequent records stating that, in that meeting, the Defendant had agreed to return the interest in the Property on condition that proper procedures would be completed and that she would not be liable for any payment of stamp duty or any other liabilities.  In any event, the Defendant has failed to identify or prove any word or conduct on the part of the Mother which could constitute an equivocal election to affirm the SPA.

129.  Upon the Mother’s election to accept the Defendant’s repudiation, the SPA came to an end.  It is trite that once an election is made, it is irrevocable.  It is therefore of no relevance that, on 13 September 2015, the Plaintiff chased for the Defendant for payment of $8 million in his WhatsApp message to the Defendant’s daughter.

130.  Indeed, in trying to establish that the Mother had affirmed the SPA after the breach by the Defendant, the Defendant is relying on the fact that the Mother had kept on demanding the Defendant to pay for the purchase price. However, the present transaction is different from other commercial transactions, and the conducts of the parties would have to be assessed in the context of a family arrangement.

131.  Unlike other commercial transactions, the Mother did not insist on immediate payment upon the making the Transfer.  After that, in the interactions between the parties, the Defendant was given the option to proceed with the sale or to return her interest in the Property to the Mother.  Hence, the making of the demands for payment should not by itself be construed as an act affirming the SPA.  The dispute was then left in the air for quite some time.  As I accept the evidence of the Plaintiff’s witnesses on what happened in the 28 April 2015 Meeting, it is quite clear that the Defendant by then decided not to buy the Property and returned the title deeds to the Mother.  In return, the Mother had also clearly indicated her acceptance of the breach by signing on the receipt acknowledging the return of the title deeds.  As analyzed in the earlier part of this Judgment, the subsequent records also support the Plaintiff’s case on what happened in the 28 April 2015 Meeting.

132.  Even if I am wrong on the aforesaid and the SPA was not terminated by the acceptance of the breach as indicated in the 28 April 2015 Meeting, what happened afterwards can only be regarded as the continuance of the option to the Defendant to either proceed with the sale by paying the purchase price within a reasonable period of time or to terminate the SPA by returning her interest in the Property to the Mother.  As the Defendant had maintained her position of not paying the purchase price, the Plaintiff,being the executor of the Mother’s estate, had, at the latest, accepted the breach by the issuance of the writ herein on 10 May 2016.

133.  As pointed out by Mr Lam, before the termination of the SPA by the Mother’s acceptance of the Defendant’s repudiatory breach, the Mother enjoyed an equitable unpaid vendor’s lien over the Property. However, upon its termination, there was no longer any legal basis whatsoever for the Defendant to continue to hold any beneficial interest in the Property. Under the law of restitution, from that moment, the Defendant must have been holding the 50% interest in the Property registered in her name as joint tenant on trust for the Mother (and the Plaintiff as executor of the Mother’s estate upon her death).[7]

134.  Likewise, there is no merit in the Defendant’s claim based on estoppel.  First, she relies on the representation purportedly made by the Mother that the Property would be gifted to her.  But as her evidence in this respect is disbelieved, the foundation for the alleged estoppel collapses. Second, the detriment that she claims is the following two payments: (i)  $43,062 as maintenance costs for the building where the Property was located; and (ii)  $3,100 as taxes paid under personal assessment.  These payments were made simply because the Defendant was in fact one of the legal joint-tenants of the Property at the material time, rather than in reliance on the Mother’s alleged representation.  In any event, the amounts involved are very small.  Yet to avoid any unjust enrichment, I agree that these amounts should be deducted from the rental income that has to be accounted for by the Defendant in due course.

RELIEF GRANTED BY THE COURT

135.  I therefore find that the half share of the Property, which is now registered in the name of the Defendant as a tenant-in-common, was at all material times and is held by the Defendant on trust for the Mother’s estate.  The Defendant’s counterclaim for a declaration that she is the beneficial owner of all or half of the interest of the Property should be dismissed.  Consequentially, the Defendant should be ordered to transfer her interest in the Property back to the Mother’s estate.  There should also be an account for the rental income received by the Defendant subject to the deductions mentioned above.

136.  I understand that the parties may wish to make further submissions on the final wordings of the order.  I therefore direct a draft final order to be agreed by the parties be submitted to the court for approval within 21 days. In the case of disagreement, the parties are at liberty to restore the case for further argument on the final wordings of the order.  I also make a costs order nisi that the costs of this action (including the claim and the counterclaim)  be to the Plaintiff, which shall be made absolute 21 days after the date of the handing down of this Judgment.