WONG YUNG v. HUI KWOK NAM

HCA 3838/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 3838 OF 2001

____________

____________

_______________

J U D G M E N T

_______________

1. In this action, a widow sues her eldest son over a property left by her deceased husband.

Plaintiff's evidence

2. The Plaintiff is now 65 years old, she was born in the Mainland, and received no formal education. She said in evidence that she had attended 3 years' evening classes at her home village, and can read and write Chinese with some difficulties. She certainly cannot speak or read English. She got married in 1958 and gave birth to the Defendant - her eldest son, a younger son ("Rocky") and a daughter ("Helen"). Because of her background and lack of education, the Plaintiff has been working in lowly paid jobs such as factory odd job worker and cleaner (which is her current employment).

3. The Plaintiff's husband passed away intestate in 1984. The suit property, which is situated at 1st Floor, No. 14, Kai Ming Street, Kowloon, Hong Kong, was valued at HK$300,000.00 by the Estate Duty Office. It was the only substantive asset left by him. The Plaintiff and her eldest son - the Defendant - jointly obtained Letters of Administration in respect of the estate, as infant interest was involved. After a short period of time, possession of the property, which had been tenanted, was obtained, and the family of four moved into the property in 1985. It should be noted that according to the intestacy rules, the widow and three children all had a share in the intestate estate of the deceased husband/father, although obviously the Plaintiff as widow had a more substantial share: see section 4(3) of the Intestates' Estates Ordinance (Cap. 73) - note that the widow's first entitlement was to a "net sum" of $50,000 according to the provisions in 1984.

4. The family lived together in the property until 1990 when the younger son - Rocky - planned to get married. After discussions between him and the Defendant, the two brothers agreed that one of them would move out of the property and be paid a sum of HK$150,000.00 in lieu of his share in the intestate estate of their deceased father, i.e. his share in the property (in layman's term) for all practical purposes, there being no other assets or liabilities of the estate. And eventually, it was the younger brother who decided to take the money, move out of the property, and relinquish his share in the property or the estate, it being his intention to use the money as downpayment for the purchase of a new matrimonial home in the New Territories. In those circumstances, the Defendant raised a loan of HK$150,000.00 from a relative ("Hui") and paid his younger brother. The Plaintiff was told about all this after everything had been agreed.

5. Of importance here is that the Plaintiff strenuously denied the suggestion made to her during cross-examination that on that occasion, there was an agreement amongst all members of the family that not only would Rocky relinquish his share in the property or the estate by payment to him of the sum of HK$150,000.00, the Plaintiff as well as Helen would also relinquish their respective shares in the property or the estate in favour of the Defendant. Although there was some confusion in the Plaintiff's evidence particularly during cross-examination in this regard, I think as a whole, her evidence was that any mention of her or her only daughter's agreeing to give up their respective shares in the property or the estate only came much later.

6. In any event the younger son got married in 1990, got paid and moved out. In 1991, the daughter went to Canada to pursue her tertiary education there. In 1993, the Defendant married a lady in the Mainland ("Lam"); Lam settled in Hong Kong subsequently, and a daughter was born to them in 1996. They, together with the Plaintiff, resided at the suit premises.

7. In 1997, the daughter returned from Canada after completion of her studies there. After staying in the suit premises for a few months, she moved out to live together with Rocky.

8. Turning to the property itself, after Letters of Administration were obtained jointly, the Plaintiff opened a safe deposit box in a bank, and asked the Defendant to be the co-owner of the safe deposit box which could be operated by either one of them singly. She said she trusted her eldest son very much, he being her eldest son and being more knowledgeable generally than his younger siblings. He was good to her (at least prior to marriage). The Plaintiff placed the title deeds of the property (which was free from mortgage) in the safe deposit box, and subsequently she also deposited some jewellery in the box.

9. In late October 1998, the Defendant told her that the title deeds had gone missing. She was so surprised that she went to the bank to check the contents of the safe deposit box twice on the same day, before she could believe that the title documents had really been lost. Apparently she concluded that it was her son (the Defendant) who had taken out the documents for use and had lost them in the course of doing so. She therefore asked the Defendant to go to a lawyer to have replacement deeds made at his own expense, to which the son apparently agreed.

10. According to the Plaintiff's evidence, prior to this incident, the Defendant had mentioned to her about the transfer of the property into his sole name because, so the son told his mother, if that was not done, after her death, it would be difficult for him to obtain the title from her estate. According to the Plaintiff, the Defendant was afraid that in that situation Rocky, who had sold his share to him for HK$150,000.00, might make a claim to the property. The Plaintiff said in evidence that she was not entirely comfortable with the suggestion, saying that although she had trust in her son, if she had "no name" in the property, there would always be a risk of her being evicted from the property at her old age. She said her son had mentioned to her something about his willingness to take care of her for life and so forth. But the gist of the Plaintiff's evidence was that the discussion was inconclusive.

11. After the title deeds were apparently lost, in December 1998, the Defendant told the Plaintiff to go up to a solicitors' office to sign some documents. The Plaintiff very naturally drew the conclusion that she was being asked to sign a replacement deed. There is no dispute that on 10 December 1998, some documents were signed at a solicitors' office. The Plaintiff maintained that on the occasion when she went up to sign the documents, only she and the Defendant were present. Her other two children were not. She said that a lawyer told her to the effect that she had no share in the property (or she would have no share in the property - the Chinese used could bear both meanings) and she should sign the documents. According to her own understanding, the lawyer was telling her that as the deed had been lost, she had "no name" in the property and therefore she had to sign the new documents as replacement deeds. She denied that there was any further interpretation or explanation of the contents of the documents to her.

12. More importantly, she said that after she signed the documents, whilst still in a room inside the lawyer's office, she found out from the Defendant that in fact the documents involved the transfer of her interest in the property to the Defendant. She disagreed, saying that by doing so, she would be left with no share or name in the property, and she would be put at risk of being evicted by the Defendant. She said she had received no payment from the Defendant for so giving up her share in the property (unlike Rocky). The Defendant then replied that the two of them should not discuss all this at the solicitors' office but at home; he added words to the effect that she could stay with him and he would take care of her for life. The Plaintiff therefore discussed no more about the matter at the solicitors' office. The Plaintiff said in evidence that she trusted her son very much, she was in fact quite pleased to hear that her son was willing to take care of her for life, and therefore when they returned home, she raised the matter no more, and the Defendant likewise did not mention it anymore.

13. In fact, the documents signed at the solicitors' office that day were no replacement title deeds. Rather they were a Deed of Family Arrangement whereby the Plaintiff and her two other children relinquished their shares in the estate of the deceased regarding the property in favour of the Defendant, and an Assent whereby the property was conveyed by the two joint administrators in favour of the Defendant.

14. Unfortunately the relationship between the Plaintiff and Lam deteriorated after all this. Quarrels between the two ladies arose because of different ideas in bringing up the granddaughter. According to the Plaintiff, their relationship turned so bad that the daughter-in-law scolded her and assaulted her on more occasions than one. The Defendant spent a substantial amount of time working in the Mainland, and when he was around, he either sided with his wife or turned a blind eye to the Plaintiff's complaints.

15. Eventually the seriousness of the matter was noticed by Rocky and Helen. Events came to a head in July 2001 when the two children together with Hui went to visit the Plaintiff at the suit premises. Quarrels ensued between the two brothers, which ended up in the Defendant taking out a chopper from the kitchen to threaten his two younger brother and sister to leave the premises. In those circumstances, the younger son asked the Plaintiff to leave as well. The Plaintiff, fearing for her own safety (although the Defendant was not threatening her to leave), left the premises and went to stay with her younger son.

16. To be fair to the Defendant, he had on one occasion asked his mother to return to live at the suit premises, but the Plaintiff refused. The locks were since changed. The present action was commenced in August 2001 for the setting aside of the Deed of Family Arrangement and Assent, on the ground of unconscionable bargain, undue influence, misrepresentation, and breach of warranty (on the part of the Defendant to take care of the Plaintiff for life).

Rocky's evidence

17. Apart from the Plaintiff, both Rocky and Helen gave evidence in support of their mother's claim. Their evidence was in general agreement with their mother's, and indeed supplemented it in some aspects. According to Rocky, in 1990 he was planning to get married, and apprehended that his wife-to-be might not get along well with his family members if she were to reside with him at the suit property together with his family members. He suggested to his elder brother that either one of them should move out, and the other should buy off his share in the estate/property. He accepted in evidence that in fact it was he who had more reasons to move out than his elder brother, who was single and was not planning to get married at the time. He said that he raised the idea of instructing a surveyor to do a valuation on the property, but the Defendant told him that the title deeds had been lost. He clarified during cross-examination that the alleged missing of the title deeds was mentioned by his brother to him on that occasion, rather than in mid 1990's as his witness statement suggested. Anyhow, he said in evidence that the two brothers eventually agreed that whoever should move out would be paid HK$150,000.00 as the purchase price of his share in the estate/property. He admitted that the figure of HK$150,000.00 came from him. Rocky had some initial difficulties in explaining how he came up with this figure of HK$150,000.00. At one stage, he said he could not recollect the details. But eventually Rocky explained that at that time subjectively he thought that the property was worth about HK$700,000.00 to HK$800,000.00, and as one of the 4 beneficiaries of the intestate estate his share (and likewise his brother's share) should at least be worth HK$150,000.00. Rocky said that he had no idea exactly what proportion each of the 4 family members had in the estate of his late father or the suit property. At the time, he had no idea that the market value of the property was only HK$450,000.00. He said the property was, according to his subjective estimation, about 800 sq. ft. in area, had three bedrooms, and should be worth HK$700,000.00 to HK$800,000.00, given that the property market had been rising since 1984 when his father passed away. The valuation of the property (at the time of death) was already HK$300,000.00.

18. The gist of Rocky's evidence is that if his brother thought that his share was not worth HK$150,000.00, he (i.e. his brother) could choose to move out of the property and be paid the money instead. That was why he thought that he was making a fair proposal to his brother.

19. During cross-examination, Rocky was adamant that the agreement only concerned he and his brother, but not his mother or his sister, or their respective shares in the estate/property. The sum of HK$150,000.00 was to purchase his share (or, alternatively, his brother's share), and had nothing to do with the mother's or the sister's share. Rocky said that in 1990 there was no agreement amongst the 4 family members that the mother and sister would give up their respective shares in favour of the two brothers, and the Defendant would, by payment of HK$150,000.00, buy up the whole remaining interest in the property/estate.

20. According to Rocky, in 1998, through Helen, he learned of the Defendant's request that all should attend a solicitors' office to sign a deed relating to the suit property. He rightly assumed that his brother was requiring him to formally transfer his share in the property/estate in favour of him. He had no difficulty with agreeing to this as he had already pocketed HK$150,000.00 eight years ago. He also learned from Helen that Helen was willing to give up her share in the estate/property in favour of the Defendant on the condition that the Defendant would stay together with their mother and take good care of her for the rest of her life.

Helen's evidence

21. Helen said in evidence that she was absolutely certain that she did not take part in any agreement between the brothers, or for that matter the brothers and her mother, in 1990, relating to the payment of HK$150,000.00 in consideration for the sale of share(s) in the estate/property. She said she only learned about it subsequently after Rocky had used the sum of HK$150,000.00 to purchase a flat as matrimonial home. She said she was told by Rocky that the money was given by the Defendant to him as consideration for the purchase of Rocky's share in the estate/property. The money was borrowed from Hui. Helen insisted that the payment had nothing to do with her share in the estate/property. Indeed in 1990, she was barely 18, and did not participate in any alleged family arrangement.

22. As regards her execution of the Deed of Family Arrangement in 1998, she said in evidence that in 1998, the Defendant asked her to transfer her share in the property to him. She said she was agreeable to the request on the condition that the Defendant would continue to stay together with their mother and take care of her for the rest of her life. She regarded this as some sort of a fair compensation to the Defendant. Helen said that the execution took place in a solicitors' office, and the interpretation of the document to her and Rocky by the solicitor was very brief. She also said, like Rocky, that only the two of them signed the document together, whereas the Defendant and the Plaintiff had signed the document before they entered the small conference room in which the solicitor conducted the execution process. She maintained that the interpretation was very brief, and that was why she did not notice the mistaken particulars about her marital status and address as well as Rocky's address in the document to be executed. She said that the solicitor only told her that once she signed the document, she would no longer have any share in the property.

23. Both Rocky and Helen denied in cross-examination that they had any personal motives to side with their mother in making a false claim against the Defendant. In particular, Rocky denied that his relationship with the Defendant was bad because he had previously been scolded by his elder brother relating to his extra-marital affair and his alleged removal of customer data from his brother's company for which he had once worked at the time of his departure. As for Helen, she denied the suggestion that she had an "abnormal relationship" with Hui, the family's distant blood-relative who was very close to the family, and that her elder brother disapproved of and even scolded her for the relationship.

Hui's evidence

24. Hui was called by the Plaintiff to give evidence. He said that it was he who lent the sum of HK$150,000.00, repayable with interest, to the Defendant in order to enable the Defendant to pay Rocky in 1990. He said that he learned from both the Defendant and Rocky at the time that the money was required for the purchase of Rocky's share in the estate/property by the Defendant. He said that he had also verified this with the Plaintiff. Hui confirmed that he was present on the occasion in July 2001 when the siblings quarreled seriously with each other at the suit premises, immediately after which the Plaintiff moved out of the property to stay together with Rocky. He confirmed the evidence of the Plaintiff, Rocky and Helen that on that occasion the Defendant took out a chopper during the quarrels, apparently to threaten his siblings. He said he suggested to the Defendant on that occasion to acquire his mother's share in the estate/property by payment of a similar amount i.e. HK$150,000.00, by instalments, but that suggestion was rejected by the Defendant.

25. During cross-examination, Hui denied any "abnormal relationship" between him and Helen, and denied that because of the Defendant's disapproval of that (alleged) relationship he had a motive to side with the Plaintiff to frame a case against the Defendant. Hui, chairman of a public listed company in the local stock market, denied that he was financing the present litigation. But he said that because of his and his family's closeness to the Plaintiff's family, he was more than willing and ready to assist the Plaintiff financially if she should require assistance. He said he was upset with the Defendant's unfilial treatment of his mother.

Solicitor's evidence

26. The solicitor in question gave evidence at trial. He confirmed that the instructions came from the Defendant to prepare documents for the transfer of the respective beneficiaries' shares in the estate insofar as it concerned the property in favour of the Defendant. He said that he was not worried that the instructions only came from the donee because at the time of execution, he would have a chance to confirm the agreement of the donors to the transfer face to face when he interpreted the documents to them. He said that this he did at the time of execution. He insisted in evidence that he interpreted the Deed of Family Arrangement as well as the Assent thoroughly to the 4 signatories, before they were asked to sign the documents. None of them raised any questions or made any requests to amend the documents before their execution of the documents. He denied the suggestion that the interpretation done by him was very brief. The solicitor also said that the title documents to the suit property were supplied to him by the Defendant. He confirmed that the two documents prepared by his firm fully reflected the instructions he received from the Defendant. The documents did not miss out anything that he was instructed about regarding the 4 family members' agreement to the transfer.

Defendant's evidence

27. The Defendant, a businessman, and his wife gave evidence at trial. Essentially, it was the Defendant's evidence that in 1990, Rocky wanted to get married and move out of the premises. He needed money to make the downpayment for the purchase of his matrimonial flat. The Plaintiff then suggested in the presence of all her children that the suit property was worth about HK$300,000.00, and therefore the respective shares of the mother and two sons were HK$100,000.00 each, she being of the view that sooner or later Helen would grow up and get married and that she therefore should have no share in the suit property left by her deceased father. Further, the mother suggested to the children that she would give half of her own share to Rocky, and therefore Rocky's share would be worth HK$150,000.00, and the Defendant would be responsible for buying out his share (as increased). This was because without the mother's half share, Rocky's share or the value thereof would be insufficient to enable Rocky to pay for the downpayment. According to the Defendant's evidence-in-chief, the remaining half share of the mother, thus valued at HK$50,000.00, would be represented by her right to occupy a bedroom in the suit premises until her death. He said that was why up until the time of trial, he still kept a bedroom in the property for the Plaintiff's use and occupation, despite what had happened since 1998 and 2001.

28. The Defendant also said in evidence-in-chief that therefore he borrowed a sum of HK$150,000.00 from Hui and gave it to Rocky. He said that the payment of HK$150,000.00 was for the purchase of not only Rocky's share in the property/estate (as increased), but was also for the purchase of the mother's remaining share in the property/estate as well as Helen's interest in it. Pausing here, this part of the evidence of the Defendant is extremely if not impossible to understand in the light of what he had said in chief. Despite much effort by counsel for the Defendant during examination-in-chief, no better explanation or clarification was forthcoming.

29. Again pausing here, it must be pointed out that this story about what happened or what was agreed in 1990 also deviates seriously from the pleaded case of the Defendant and the case put to the Plaintiff and her witnesses during trial. The pleaded case was that during the 1990 meeting, both the Plaintiff and Helen agreed to give up their respective shares in the property/estate in favour of the two brothers, and as the property was estimated to be worth HK$300,000.00, therefore Rocky's half share was or became HK$150,000.00. By paying Rocky HK$150,000.00, the Defendant therefore acquired all interests (apart from his 50% interest) to the property/estate. In the pleadings, there was absolutely no mention of the mother's having a 1/6th share (equivalent to HK$50,000) in the property/estate which would entitle her to the use of one bedroom in the suit property for the rest of her life.

30. In evidence-in-chief, the Defendant also said that because of the HK$50,000.00 worth of share or interest in the property/estate, the mother stayed at the premises and resided together with him and his family.

31. In any event, the Defendant said that he was not privy to the discussion between his mother and Helen regarding the mother's view that Helen should have no share in the property/estate as a daughter who would get married sooner or later. He just said that Helen raised no objection when their mother made the suggestion.

32. However, during cross-examination, when pressed by counsel for the Plaintiff upon the obvious inconsistency between this latest story regarding the 1990 agreement and the contents of the Deed of Family Arrangement and Assent which made no reference whatsoever to the mother having a HK$50,000.00 worth of interest or share in the property/estate, the Defendant said that in fact in 1990 or 1991 when or after the mother's suggestion was made and accepted by him, there was a further agreement between him and his mother that after he should have fully paid off the loan to be borrowed from Hui, the mother would transfer her remaining HK$50,000.00 worth of share or interest in the property/estate to him; in effect, the mother was giving her share equally to her two sons. Pausing here, it must again be noted that this is quite different from what has been pleaded in the pleadings, and for all these difficulties, the Defendant was hard-pressed during cross-examination.

33. In any event, it was the Defendant's evidence that pursuant to what was agreed in 1990 (or subsequently), the Deed of Family Arrangement and Assent were eventually executed in 1998 in order to give effect to what had been agreed. They were not executed earlier because he only fully repaid Hui the HK$150,000.00 loan plus interest in 1995, and Helen only came back to Hong Kong from her studies in 1997.

34. The Defendant denied that the title deeds had been lost or that he had told his mother that they had been lost. He accepted that it was he who removed the title deeds from the safe deposit box and gave them to the lawyer for preparation of the necessary documents. He had a hard time in the box when he was cross-examined on his non-admission in pleadings that he was a joint owner of the safe deposit box or the person who removed the title deeds from the safe deposit box.

35. The Defendant said that the documents were interpreted by the solicitor to all family members together before they were executed.

36. The Defendant said that he never witnessed his mother being ill-treated by his wife, and he said he never asked or wanted her mother to move out of the suit premises. He said he was willing throughout to reside together with his mother, but his mother refused to return. He explained that he only changed the locks and keys to the suit premises after the departure of his domestic maid near Chinese New Year in 2002. This was not intended to prevent his mother from moving back to the suit premises.

37. As mentioned above, the Defendant gave possible reasons and motives for Rocky, Helen and Hui's acting in concert in giving false evidence against him.

38. The Defendant was vigorously cross-examined on his "conspiracy" theory. It was pointed out to him that despite the alleged reasons to take revenge on him, both Rocky and Helen were willing to and did sign the Deed of Family Arrangement in his favour in 1998, when the alleged reasons had arisen. As regards Hui, Hui's unchallenged evidence was that it was he who sought to cool down the parties in July 2001 and bring forth a compromise between the disputing siblings (and mother). Further, during cross-examination, it was pointed out to the Defendant that the Plaintiff could not have any possible motive to frame a case against her own son. The Defendant's answer was that the Plaintiff did so because of her quarrels with his wife.

39. Lastly, it was pointed out to the Defendant during cross-examination that in one of his witness statements, the Defendant sought to explain the Plaintiff's moving out of the property in July 2001 by reference to Rocky's (alleged) unwarranted demand for an additional sum of HK$150,000.00 for the transfer of the property to the Defendant, which the Defendant rejected, which explanation was totally different from the evidence given by all witnesses (including the Defendant himself), i.e. the two brothers quarrelled about the alleged mistreatment of their mother by the Defendant's wife. The Defendant said he could not remember whether HK$150,000.00 was mentioned by his brother on that occasion.

40. The Defendant denied in cross-examination that his mother trusted him particularly. He said that in fact his mother was quite an independent person, and trusted all her 3 children equally.

Lam's evidence

41. The Defendant's wife, Lam, also gave evidence. She said that she only came to settle in Hong Kong in 1996. Until 1999, her daughter stayed with her mother in Shenzhen. During that period of time, her relationship with her mother-in-law was normal, and indeed they had little daily contacts - both had jobs of their own, and the daughter-in-law spent most of her Saturdays and Sundays in Shenzhen to be with her own daughter and mother.

42. However, the daughter came to stay with the family in Hong Kong in 1999. She was not good or obedient to the grandmother. That caused the Plaintiff harbour ill-feelings towards her (Lam), thinking that it was she who taught the granddaughter to be disobedient and disrespectful to her grandmother. There were unhappy incidents between the two ladies but Lam denied ever hitting or using violence on the Plaintiff.

43. Lam said in evidence that at all times she and her husband were willing to have the Plaintiff stay together with them.

Findings of fact

44. I need not and do not intend to make findings on all matters and details that the parties or witnesses have given different or conflicting evidence on. It is neither necessary nor desirable to do so, particularly bearing in mind the nature of the dispute and the nature of many of these matters and details. It would not be fair for me to say, for instance, that I believe a particular witness and therefore everything that he or she said in the box must have been true. This would be too simplistic a view of the evidence given by the parties and witnesses in the present case. Moreover, since this Court only makes findings on the basis of a balance of probabilities, it would be undesirable for me to make findings on all disputes regardless of their importance or relevance, lest they should be wrongly regarded as representing the absolute truth of the matters in question.

45. That said, I must make findings on two specific matters, namely, the alleged 1990 agreement, as well as the true circumstances in 1998 under which the Deed of Family Arrangement and the Assent were executed. Further, I should make it clear that I have borne all the disputed matters and details in mind in assessing the general credibility of the witnesses and their credibility on the two specific matters in question.

46. Having had the benefit of closely observing the respective demeanour of the parties and witnesses in Court and in the box, and having carefully considered the contents of their respective evidence and the general circumstances of the case, based on the civil burden and standard of proof, I prefer the version of the Plaintiff to that of the Defendant in relation to the two specific matters. In other words, I find as a fact that what was definitely agreed in 1990 was only between the two brothers and to the effect that the Defendant would buy out Rocky's share in the estate/property for the sum of HK$150,000.00. I cannot exclude the possibility of there having been some inconclusive or indefinite suggestions, wish or hope that one day the Defendant would be able to acquire the mother's share in the estate/property as well, with or without the payment of a further substantial consideration, and with or without a promise that the Defendant would live together with his mother and take care of her for the rest of her life. What I am sure, on the civil standard, and find as a fact is that there was no concluded, specific and definite agreement between the Plaintiff and the Defendant that the Plaintiff would give up her share (or one half thereof) in favour of the Defendant if he agreed to pay his younger brother HK$150,000.00, whether as per the Defendant's original pleaded case, or his evidence in Court, or otherwise.

47. As already outlined above, the evidence of the Defendant in Court gave himself much difficulty. It deviated seriously from his pleaded case and what he said in his witness statement. It involved the mother retaining a HK$50,000.00 worth of interest, equivalent to the right to occupy a bedroom in the suit property for the rest of her life, as per the Defendant's evidence-in-chief; it involved a further agreement that the mother would transfer this remaining HK$50,000.00 worth of share to the Defendant after the Defendant should have fully paid off Hui the HK$150,000.00 loan plus interest, as per the Defendant's evidence under cross-examination.

48. By contrast, the Plaintiff's, Rocky's, Helen's and even Hui's evidence in this regard was much simpler and more straightforward. The deal was only between the two brothers. It did not concern the rest of the family. In particular, the suggestion that Helen was willing to give up her share in the estate/property was not sufficiently supported by reasons and evidence. In the papers filed in this action, there were some suggestions that this was a conservative Chinese family and an unmarried daughter was not regarded as having any real share in her father's estate. That has not been borne out by evidence. There was no or little evidence that this was such a traditional family, the mother was such a traditional Chinese woman, or that her children were of such inclination.

49. The Plaintiff's evidence on what was actually agreed in 1990 was straightforward. So was Helen's evidence in this regard, although generally speaking, she (Helen) was rather argumentative during her evidence. But by contrast, the evidence of the Defendant in the box was much more problematic, uncertain and suspicious. Hui's evidence on what he was told about the 1990 agreement was straightforward enough, although I must also say that while generally his evidence was straightforward and direct, he was, perhaps understandably, slightly hesitant or embarrassed when he was cross-examined on his alleged "abnormal relationship" with Helen and his own marital relationship with his wife.

50. On the figure of HK$150,000.00, in my view, both sides had their respective difficulties. The Defendant tried to say in the box that the value of the property was HK$300,000.00 in 1990 - the same as the estimated value of the property back in 1984, which estimation was made by the Estate Duty Office. But from common experience, the evidence of Rocky, and the valuation done on the property for the purpose of this litigation, there was an increase in property prices during those 6 years. It was thus difficult for the Defendant to justify the base figure of HK$300,000.00 and therefore the sum of HK$150,000.00 that he paid to Rocky purportedly in purchase of everybody's share in the estate/property.

51. To be fair, as I pointed out, the Plaintiff's side had its own difficulty. The Plaintiff said that she did not know much about how this figure was arrived at. Nor did Helen. Nor did Hui. Rocky's evidence in this regard was not perfect or free from doubt. For the most part of his evidence, he was unable to tell the Court how this figure of HK$150,000.00 came about. At one stage, he said in the box that he had forgotten how the figure was arrived at, whilst insisting that it was nonetheless a fair figure, particularly when it was open to the Defendant to choose moving out and taking the money. (I do not think this is really a fair description of the situation back in 1990 - quite obviously it was Rocky who really wanted to move out and needed the money to buy a new home for marriage). It was only towards the end of his evidence that Rocky said that the property was, according to his subjective estimation and belief, worth HK$700,000.00 to HK$800,000.00 and his one-quarter share (there being 4 beneficiaries) must have been worth no less than HK$150,000.00. Of course, even this latest explanation for the figure is not totally free from difficulties, and the calculations do not exactly tally.

52. I have borne all this in mind. As I said more than once above, I am only concerned with the civil burden and standard of proof. On balance, despite the above and despite all the "inconsistencies" that counsel for the Defendant drew my attention to during final submission regarding the evidence of the Plaintiff and her witnesses (such "inconsistencies" were, in my judgment, understandable and were basically due to different witnesses' lapses in memory), I am satisfied that there was no agreement, other than the agreement between the two brothers for the purchase of Rocky's share in the estate/property, regarding the relinquishing or buying and selling of shares in the estate/property.

53. It is convenient for me to deal with at this juncture the allegation of a "conspiracy" by all to frame a case against the Defendant, or put another way, the suggestion that Rocky, Helen and Hui all had a motive to lie in Court against the Defendant. I am not here directly concerned with the truth of the various allegations that the Defendant made against these 3 persons in the box. The force of these allegations of ulterior motives, even if true, was very much diminished by the point very clearly made by counsel for the Plaintiff during cross-examination of the Defendant: The matters relied on by the Defendant against these 3 individuals had all arisen prior to the execution in late 1998 of the two documents in question. If any of them had borne real grudges against the Defendant, it would be unlikely for Rocky and Helen to have agreed, or to have agreed so easily, to execute the Deed of Family Arrangement in favour of the Defendant, and Hui would unlikely have in July 2001 acted in the way he did as a friendly mediator amongst the siblings and their mother.

54. More importantly, it was a bold suggestion from the Defendant in evidence and his counsel in Court that the Plaintiff, the Defendant's own mother, would have wanted to frame a case against her own eldest son. Of course, I have borne in mind all possible motives, such as financial gain, such as her quarrels with the Defendant's wife, such as influence by her other children and relatives and so forth, but based on the evidence in this case, and based on my observation of the respective personalities and characters involved in the present case, I am far from satisfied that this is a case in which a mother frames a case against her own son.

55. In short, having considered the evidence before me and the inherent probabilities of the matter, I have no hesitation in rejecting the suggestion of ulterior motives to tell lies against the Defendant by the Plaintiff, Helen, Rocky and Hui.

56. In relation to the true circumstances under which the 1998 documents were executed, I find as a fact that the Defendant did lie to his mother about the missing of the title documents. In this regard, I prefer and accept the evidence of the Plaintiff and reject the Defendant's evidence on a balance of probabilities. In my judgment, more likely than not, the Defendant, having failed to persuade her mother to make a will in his favour or transfer the property to him, made up the story of losing the title documents, so as to give him an opportunity to ask his mother to go to a lawyer's office to execute new documents. It should be remembered that according to the Plaintiff's story, prior to the story of the missing title deeds, the Defendant had told her that she was old and if she did not make a will it would be difficult for him to get the property. The mother was rightly concerned about her right to stay in the property. To me, this did suggest that there had been some mention or even understanding between the mother and son that after the death of the mother, her eldest son would be entitled to her share in the estate/property. But as I said above, I am far from convinced that there was any definite agreement between the two in this regard. Moreover, the mentioning of the making of a will really goes against the Defendant's story that there was already a prior definite agreement for the mother to transfer her share in the estate/property to him after full repayment to Hui. In any event, the more important thing for my present finding is that the mother was, as it were, indecisive or non-committal regarding the making of a will or other documents to transfer her share in the property/estate to the Defendant. The lie about the missing of the title deeds thus provided a good opportunity or pretext for the Defendant to ask his mother to go to the solicitors' office to sign something.

57. As mentioned above, the Plaintiff and the Defendant told different stories to explain why the Plaintiff had gone to open the joint safe deposit box twice on the same day. I prefer the Plaintiff's explanation. The Defendant's story, i.e. that he asked her mother to go to fetch some documents required by the lawyer, that the mother failed to get the documents or all the necessary documents on the first occasion, that he found this out from the lawyer, and that he therefore asked his mother to go a second time, was not corroborated by the evidence of the lawyer. In fact, the lawyer was not asked any questions on this aspect, which would have been an easy thing to do. There may have been innocent reasons for this omission. But I have borne all possible explanations in mind.

58. As I said, on balance, I prefer the mother's version and find as a fact that the son lied to his mother about the missing of the title documents.

59. On what happened on the day of execution, I accept basically the Plaintiff's version, namely, that she thought she was attending the solicitors' office to sign a replacement deed, that she misunderstood the interpretation given by the lawyer to her, that she realized that she was giving up her share in the property/estate only after the signing of the documents, and that she had a brief discussion with the Defendant about it in the solicitors' office in which she raised her concern about her right to stay in the property after signing the documents.

60. On the question of interpretation, I find as a fact that the interpretation was not done word by word as maintained by the lawyer in evidence, but only the gist of the Deed of Family Arrangement was interpreted to the parties. The claim that the documents executed had been interpreted word by word to the 4 parties involved is rebutted, on a balance of probabilities, by the many basic mistakes found in the documents such as the various addresses and the marital status of Helen.

61. I accept that on the Plaintiff's own version, there was some ambiguity regarding how all of a sudden she discovered that under the documents that she had just executed, she would have no share in the property/estate. But by comparison with the Defendant's story, particularly bearing in mind my finding on his lie to his mother about the missing title documents, on a balance of probabilities, I prefer the Plaintiff's story.

62. As will become apparent below, the above findings are sufficient for my purpose of disposing of the present action. But as the matter has been raised, and I think in all fairness to the Defendant, I should make clear my views on certain matters, which are of course based only on a balance of probabilities: I do not accept the suggestion (which was not seriously pursued in any event in the end by the Plaintiff) that there was a preconceived plan going back to 1990 or 1998 to eventually evict the mother from the premises, which ultimately materialized in July 2001. Although I find as a fact that the Defendant lied to his mother about the missing of the title documents, in my judgment, that was done merely to achieve what the son thought - rightly or wrongly - he was entitled to obtain from the mother, as he was the son who had been taking care of his mother and living together with her. There was no preconceived plan on his part (in conjunction with his wife) to make life as difficult for his mother as possible after the signing of the 1998 documents with an ulterior motive to eventually force her to move out of the property. What happened after 1998 was most unfortunate. Regardless of the rights and wrongs between the mother-in-law and the daughter-in-law, and regardless of whether the Defendant could have dealt with the two ladies' disagreements in a wiser manner, there was no premeditated plan against his mother. Any attempt to totally blacken, as it were, his character as a son and as an elder brother would in fact go contrary to my finding that back in 1990, he was quite prepared to borrow a sum of HK$150,000.00 at a substantial interest rate to give his brother so as to enable the latter to move out and buy a matrimonial home, in return for the purchase of the brother's share, and nothing else, in the suit property (which was and is not a particularly attractive property), when he himself had absolutely no need to do so. The undeniable fact is that he has for the most part of his life lived together with his mother, and since 1991, he was the only child of the Plaintiff who was living together with and (physically) taking care of the Plaintiff.

63. Nor do I need make any findings on the quarrels between the mother-in-law and the daughter-in-law. Apart from providing the background to the eventual moving out of the Plaintiff from the suit property, the quarrels are not really relevant. Each side has its own story to tell, and all that I would like to say is that I can appreciate the difficulties for two persons of different ages and coming from two different backgrounds to live under the same roof.

64. Nor am I really concerned with the truth of the various allegations that the Defendant made against Rocky, Helen and Hui. Some of these were very serious allegations. For reasons explained above, I need not make any findings in relation to them.

Misrepresentation

65. Turning to liability based on the above findings of fact, on the question of misrepresentation, in my judgment, the making of the Deed of Family Arrangement and the Assent were induced by the Defendant's misrepresentation that the title deeds had been lost. It was a material representation which was false. The Plaintiff believed in it and when she went up to the solicitors' office, she thought she was going to sign a replacement deed. According to my finding, based on her evidence, in fact when she executed the two documents, she thought she was executing the replacement title documents. She did not find out the truth about the title documents until after the commencement of the present action - the Defendant admitted in an answer to interrogatories that it was he who took the title deeds to the lawyer for the preparation of the two documents (although strangely he did not admit that he was also the person who retrieved the title documents from the safe deposit box in the first place).

66. It is true that after the execution of the two documents, as per the Plaintiff's evidence and as per my finding based on her evidence, she realized that under the two documents she would lose her share in the estate/property. That, in my judgment, is insufficient to undo the harm or wrong done by the misrepresentation. This is because whilst she realized that the two documents were not simple replacement title deeds, she did not realize at that stage that the title deeds had not been lost at all. Her agreement to the two documents (as eventually understood by her) was still coloured by the misrepresentation that the original title documents had been lost.

67. For this reason alone, the Deed of Family Arrangement and Assent are liable to be set aside for misrepresentation, as between the Plaintiff and the Defendant.

Unconscionable bargain

68. A further reason for challenging the two documents is unconscionable bargain. I need not examine in detail the principles of law involved. That has been done recently in Lo Wo v. Cheung Chan Ka [2000] 2 HKLRD 370 (an appeal on the relief granted was dismissed: CACV 217/2000); Beacon College Ltd v. Yiu Man Hau, Alfred HCA 4273/2001 Chu J (18 November 2002 paras. 12 & 13); Standard Chartered Bank v. Shem Yin Fun HCMP 3289/1998 Poon DJ (13 May 2002 paras. 134-138); see also Bank of China (Hong Kong) v. Fung Chin Kan FACV 16/2001 (4 December 2002) paras. 49-51; Hart v. O'Connor [1985] AC 1000; Bachicha v. Poon Shiu Man Henry [2000] 3 HKLRD 833; Cresswell v. Potter [1978] 1 WLR 255; Alec Lobb (Garages) Ltd v. Total Oi1 Great Britain Ltd [1983] 1 WLR 87; Chitty on Contracts (28th ed.) Vol. 1 para. 7-075 et seq.

69. In Hart v O'Connor, a Privy Council appeal, Lord Brightman said (at p. 1024A/B - C):

"In the opinion of their Lordships it is perfectly plain that historically a court of equity did not restrain a suit at law on the ground of 'unfairness' unless the conscience of the plaintiff was in some way affected. This might be because of actual fraud (which the courts of common law would equally have remedied) or constructive fraud, i.e. conduct which falls below the standards demanded by equity, traditionally considered under its more common manifestations of undue influence, abuse of confidence, unconscionable bargains and frauds on a power. (cf. Snell's Principles of Equity, 27th ed (1973), pp 545 et seq.) An unconscionable bargain in this context would be a bargain of an improvident character made by a poor or ignorant person acting without independent advice which cannot be shown to be a fair and reasonable transaction."

70. In Lo Wo, Waung J. summarized the relevant case law in the following manner (at pp. 381B/C to 382F):

"For the purpose of deciding this particular case, it seems to me that a fair reading of the relevant authorities including authorities from Australia suggest the following factors are relevant to the court's consideration of whether to set aside for unconscionable bargain.

1. Serious disadvantage of the exploitee

The traditional requirement of poverty and ignorance of the person exploited (exploitee) stated in the old cases such as Fry v Lane, Re Fry, Whittet v Bush (1888) 40 Ch D 312 had been broadened in recent years to include all species of serious disadvantage so that age, poverty, ignorance, lack of assistance or independent advice or inability to judge what is in his best interest are merely various aspects of serious disadvantage suffered by the exploitee giving rise to the opportunity for the other party who gains from the transaction (exploiter) to take unconscionable advantage.

2. Terms of bargain being oppressive

The cases have shown that mere inadequacy of consideration is not sufficient for the court to act. The undervalue has to be such as to lead to the view that the exploitee had given away valuable assets or rights for much less than what they are worth to such extent as to either reinforce the view that the exploitee was at a serious disadvantage by a morally culpable exploiter or that the conduct of the exploiter was morally culpable.

3. Morally culpable conduct of the exploiter

Exploitation is the foundation for a finding of unconscionable bargain and exploitation usually takes the form of the strong party, the exploiter taking unfair advantage of the seriously disadvantaged party, the exploitee. What seems to be present in all cases where the courts have set aside for unconscionable bargains are circumstances of the transactions which suggest that the exploiter was aware of an opportunity for exploitation and has taken advantage of such opportunity. Examples of this would be the ignorant brothers in Fry v Lane, Re Fry Whittet v Bush (1888) 40 Ch D 312, the drunk old man in Blomley v Ryan (1957 - 58) 99 CLR 362, the elderly immigrant parents in Commercial Bank of Australia Ltd v Amadio (1982 - 83) 151 CLR 447, the "slow" lessor in Boustany v Piggott (1995) 69 P & CR 298. In Hart v O'Connor [1985] AC 1000 relief was denied because although the vendor was of unsound mind, this fact was not apparent to the purchaser. In Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144, Millett LJ expressed the view at p.153 that impropriety could be inferred from the terms of the transaction itself in the absence of an innocent explanation and it seems to me that implicit in that statement is the assumption that the terms of the transaction are so unfavourable to the exploitee that the exploiter did know that the transaction was exploiting and unconscionable and hence there was impropriety in his conduct. It has been suggested that some of the cases were decided on basis of an objective standard instead of a subjective standard (see Bamforth on Unconscionability as a Vitiating Factor (1995) Lloyd's Maritime and Commercial Law Quarterly 538 at pp.548 - 551). This is an area of some difficulty, where the special facts of the cases (such as Commercial Bank of Australia Ltd v Amadio (1982 - 83) 151 CLR 447 which has large elements of constructive notice) might lead to specific conclusions which may not be wholly consistent with the subjective standard approach. For the limited purpose of this judgment and in the absence of focused arguments, I will assume that the traditional subjective standard applies and that for the court to reach a conclusion of unconscionable bargain it is necessary to have a finding of moral culpability against the exploiter, either by way of over-reaching or oppressive conduct or in the form of actual or constructive fraud. What seems to be necessary in my view is that the conduct of the expoiter in the circumstances has shocked the conscience of the court."

71. Once the conditions for relief are met, the burden is on the "exploiter" or stronger party to show that the transaction is "fair, just and reasonable" (per Kay J in Fry v. Lane (1888) 40 Ch D 312, 322, quoting from Lord Selborne in Aylesford v. Morris (1873) 8 Ch. App. 484, 490-491).

72. Here all the requisite elements for the grant of relief against an unconscionable bargain are present. The Plaintiff received little education. Certainly she cannot read or write English. There is no suggestion that she was aware of her actual share in the estate/property under the intestacy rules. She was "lowly educated" and "ignorant" regarding the subject matter of the Deed of Family Arrangement. She was at a "serious disadvantage".

73. The Deed of Family Arrangement was to her total disadvantage. Under the intestacy rules, she has a statutory claim to the first HK$50,000.00 plus a half share in the remainder of the estate. Given the relatively humble value of the property in question, the statutory sum of HK$50,000.00 was by no means insignificant. Yet under the Deed of Family Arrangement, she was giving away all this at no consideration. She was not even promised in black and white that her son would take care of her for the rest of her life.

74. Thirdly, there was, based on my above findings, moral culpability on the part of the Defendant. He lied to her about the missing of the title documents. He did not tell the Plaintiff the true nature and contents of the two documents. When the Plaintiff discovered them after execution, he did not afford her any or any sufficient time to consider the matter before agreeing not to go back on her signature. He did not ask her to seek advice from the lawyer in question, let alone independent legal advice. Instead, he asked her not to raise the matter at the lawyer's office but only at home.

75. Plainly the transaction cannot be said to have been "fair, just and reasonable", when the Plaintiff did not even know in truth what her share under the intestacy rules was, and when she had no legal advice - independent or otherwise - in respect of the transaction itself.

76. In fact, I would go one step further and say that even based on the pleaded case of the Defendant or his evidence-in-chief and evidence given under cross-examination, the transaction cannot have been a "fair, just and reasonable" one, when the Plaintiff - even on his story - was totally mistaken about her true share in the property/estate under the intestacy rules. In a sense, this makes my findings relating to what was or what was not actually agreed in 1990 rather unimportant.

77. Further, my holding under this limb of unconscionable bargain would remain the same even if I were to find that the Plaintiff became aware of the true contents and nature of the two documents at the solicitors' office after interpretation by the solicitor and before she signed them. In other words, whether she was aware of the true nature of the two documents before she signed them or she only found that out immediately afterwards is quite irrelevant to whether the transaction was fair, just and reasonable.

78. In conclusion, I hold that the two documents in question may also be challenged on the ground of unconscionable bargain.

Undue influence

79. Having come to these conclusions on law, I need not deal with the further argument based on undue influence or the other pleaded alternative causes of action (which were not seriously pursued during final submission). For a convenient summary of the law on undue influence, see my recent decision in Dao Heng Bank Ltd v. Ho Yin Yuk [2003] 1 HKLRD 28. I should however say that I have my doubts regarding undue influence in that on the evidence, the Plaintiff was not totally dependent on the Defendant regarding her financial affairs in general. She certainly trusted her son. But she did retain, in my judgment, quite an independent mind. She was not terribly old at the time (or even now), and she was financially independent. She had her own income and pocket money (from Helen and Rocky), which she used quite independently from the Defendant. She was working throughout, and had her own contacts and circles of friends and colleagues. She also had two other children and a close relative (Hui) to whom she could turn for advice if necessary. I am therefore not prepared to rely on undue influence to base my judgment against the two documents in question.

No equitable defence

80. The Defendant has not pleaded any defence, such as laches, affirmation, or unclean hands, to the claim based on misrepresentation and unconscionable bargain. Therefore they need not be considered, nor in any event, do I think that they would stand any real chance of success even if pleaded and fully argued.

Outcome

81. In the circumstances of this case, I have come to the conclusion that the Deed of Family Arrangement and Assent are liable to be set aside for misrepresentation and unconscionable bargain, as between the Plaintiff and the Defendant, there being no challenge by either Helen or Rocky to the documents even after the present action arose. Setting aside the two documents as between the parties to the present action is, in my judgment, the just and equitable way to redress the legal wrongs.

82. I therefore order that as between the Plaintiff and the Defendant, the Deed of Family Arrangement and the Assent, both dated 10 December 1998, be rescinded and set aside.

83. It follows that the intestate estate of the deceased (comprising only the suit property by now) remains unadministered, insofar as it concerns the respective shares of the Plaintiff and the Defendant in the estate. Any question of account by the Defendant to the estate for his use and occupation of the property after the two documents in question were executed or after 15 July 2001 when the Plaintiff moved out would be a question between the estate as represented by the co-administrators and the Defendant. This action is not an administration action. The Plaintiff and the Defendant have been litigating in their personal capacity, but not as co-administrators of the estate. I do not see fit to make any order relating to account, or any other relief.

84. Turning to the question of costs, I have already heard counsel on a provisional basis regarding costs. There is no dispute that costs should follow the event. The Plaintiff asks for costs on an indemnity basis in case she is successful, which is indeed the case. I do not wish to repeat counsel's respective submissions here. All that I need say is that I agree with the submission of counsel for the Plaintiff that there are indeed special circumstances for awarding costs on a higher basis. Of course, I bear in mind all the circumstances of this case, including all that I have said specifically above. But I also take into account two specific matters. First, the Defendant made a number of very serious, if not also embarrassing and scandalous allegations against Helen, Rocky and Hui. I am not concerned with the truth of these allegations. I am concerned with whether it was reasonable, justified or necessary for the Defendant to raise these allegations against these people at trial. Whilst I can understand why the Defendant wanted to do so, his eventual failure at trial must mean that he was not justified in raising these allegations. In fact, in my judgment, even working on the basis that the result of the present litigation was unknown at the time of trial, in my judgment, there was then nonetheless insufficient justification for raising the allegations against the 3 witnesses.

85. Secondly, as I indicated above, even based on the Defendant's pleaded case, I have grave doubts as to whether his case could afford him any defence to the Plaintiff's challenge of the two documents based on unconscionable bargain. Based on the Defendant's own pleaded case, the Plaintiff was totally wrong about her own share in the estate/property under the intestacy rules when she raised her suggestion in 1990. Coupled with the lie he told his mother about the missing documents which by definition he was fully aware of from the outset, the Defendant simply did not have much of a case by way of defence to the Plaintiff's claim based on unconscionable bargain. Yet he soldiered on and forced everybody, including his mother, his brother, his sister, his close relative Hui, and even if his own wife, to appear at trial and endure the unenviable experience of giving evidence at trial, together with its attendant publicity.

86. In my judgment, I am entitled to take all this into account.

87. On the other hand, I do not think this is the worst type of cases that the courts have dealt with. Having considered all matters, in the exercise of my discretion, I order that the costs of the action be paid by the Defendant to the Plaintiff on a common fund basis, such costs to be taxed if not agreed.

88. Finally, I wish to thank counsel for their helpful assistance.