CACV 220/2016
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 220 OF 2016
(ON APPEAL FROM HCA NO. 745 OF 2011)
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BETWEEN
LI PING CHUN, the Co-Administratrix of the Estate of LEUNG FOO SU (or She), the Deceased
1st Plaintiff
NG MEI KAM, the Co-Administratrix of the Estate of LEUNG FOO SU (or She), the Deceased
2nd Plaintiff
and
LIANG TONGHUA
Defendant
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Before: Hon Cheung, Yuen and Poon JJA in Court
Date of Hearing: 10 May 2017
Date of Judgment: 19 October 2017
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J U D G M E N T
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Hon Cheung JA:
1. I agree with the judgment of Yuen JA.
Hon Yuen JA:
2. This is the defendant’s appeal against the Judgment of Deputy Judge Poon given on 6 October 2016 in which he entered judgment against the defendant and ordered her to: (1) render an account of what is due to the estate of Mr Leung Foo Shu (“the Deceased ”); (2) pay the sum found due on the taking of the account; and (3) pay the costs of the action to the plaintiffs.
Parties
3. The 1st plaintiff is the widow (“the widow ”) of the Deceased. The 2nd plaintiff (“Madam Ng ”) is a close family friend of the Deceased’s family and co-administratrix of the Deceased’s estate. The defendant is a sister of the Deceased.
Background
4. To understand the submissions made by the defendant on appeal, it is necessary to set out briefly the background of the parties and certain relevant events.
5. Mr Leung Sik Man (“the Father ”) who died in 1984 and Madam Chan Ngan Ping (“the Mother ”) who died in 2002, had 7 children, viz
(1) Foo Chung (a son) who died in 2001;
(2) Foo Shu (the Deceased) who died in 2008;
(3) Hong Wah (a daughter);
(4) Kin Wah (a daughter) who died in 1960;
(5) Tung Wah (a daughter, the defendant);
(6) Foo Hon, also known as Francis (a son);
(7) Koon Wah (a daughter).
6. In the 1960’s, some members of the family (the Father, Foo Chung and the defendant) lived in the mainland, and some (the Mother, the Deceased, Hong Wah, Francis and Koon Wah) lived in Hong Kong.
7. In the late 1960’s, Hong Wah moved out of the family home in Hong Kong. In the 1970’s, Francis and Koon Wah went to study in the United States1
8. In 1984, the Father died. In 1986, the Mother became a US citizen but spent her time between the United States, Hong Kong and the mainland, often in the company of Madam Ng.
9. In 1987, a property on the mainland which had belonged to the family, but which had been taken over by the government, was returned to the Mother. Apart from this property, the Mother owned some other residential units in Hong Kong, some of which were let out.
10. The Deceased did not marry until 1991, when he was in his mid-50’s. According to the evidence of Madam Ng2 3
11. In 1994, the defendant moved to the United States with her husband but visited Hong Kong regularly. After 20044
12. In 1995, the Deceased suffered his first stroke. He was then 58 years old. At the time, his daughters were aged 3 and 1 respectively.
13. In 1997, a son was born to the Deceased and the widow.
14. In 2000, the Mother moved to live in the US permanently with the defendant and her husband.
Relationship between the Mother and the Deceased
15. It is common ground that the Deceased was close to the Mother. The two lived together for a long period of time. According to the evidence at trial, the Mother was particularly concerned about the Deceased as he was less self-sufficient, did not have a steady career, had suffered a stroke and had young children.
The Chinese Note
16.1. The Mother held some joint accounts with some of the children, including some joint accounts with the Deceased. On 24 January 2002, a document in Chinese (“the Chinese Note ”) handwritten by the defendant was signed by the Mother and the defendant.
16.2. It contained the following passage:
“我与扶枢名下存款交扶枢继承，其中叁拾叁萬元港币改由扶枢、统华联名存入银行。本人与扶枢名下存款有弍拾叁萬元港币交扶枢与屏珍共同继承，扶枢、屏珍联名存款。本人与扶枢联名余下款项，均交扶枢、统华联名存款，由扶枢继承。”
This may be translated as follows:
“The deposits in the names of myself and [the Deceased] are to be handed over to the [Deceased] for succession, of which HKD330,000 shall instead be deposited in a bank in the joint names of [the Deceased] and [the defendant]. There is HKD230,000 deposited in the joint names of myself and [the Deceased], which is to be handed over to be jointly succeeded by [the Deceased] and [the widow], to be deposited in a bank account in the joint names of [the Deceased] and [the widow]. As for the balance of the funds deposited in the joint names of myself and [the Deceased], they should be deposited in the joint names of [the Deceased] and [the defendant], to be succeeded by [the Deceased]”.
17. Returning to the narrative of events, 3 months later, on 24 April 2002 the Mother died in the US. It is common ground that at the defendant’s suggestion, the Deceased was not informed immediately as it was expected that he would be upset.
18. Three days after the Mother’s death, on 27 April 2002 the defendant arrived in Hong Kong.
Opening of joint accounts in the names of the defendant and the Deceased
19. On 29 April 2002, when the Deceased had still not been told about the Mother’s death, the defendant showed the Deceased the Chinese Note. The same day, the Deceased and the defendant opened joint accounts at the Bank of China and the Hang Seng Bank.
20. The following month (May 2002), the Deceased, the widow, the defendant and other members of the family attended the Mother’s funeral in the US.
Deposit of funds into the joint accounts in the names of the defendant and the Deceased
21.1. In the months after their return (June to August 2002), funds from the joint accounts in the names of the Mother and the Deceased were deposited into the joint accounts of the defendant and the Deceased.
21.2. Apparently no use was made of the funds in the joint accounts, the certificates of deposit for which were kept by the defendant.
Conflicts in the family
22. In the meantime, conflicts arose within the family. First there was a conflict arising from the defendant’s application for letters of administration which apparently did not include references to Foo Chung’s widow and children.
23. In June 2004, the Deceased suffered a second stroke. This was more serious than the first. The widow and the children then moved to reside with him in Hong Kong.
24. There were more conflicts within the family in 2006 arising from rent due for a unit which should have been paid to the Deceased but which was not.
25. The details of these disputes are not material to this appeal but it is clear that the siblings were not getting along.
The Deceased’s third stroke
26. On 1 March 2006, the Deceased had a third stroke, as a result of which he could no longer speak or write. However in May 2006 when Francis visited the Deceased, the latter responding by gestures, informed Francis that he (the Deceased) had demanded that the defendant “pay him back his money” which the Mother had left him and which the defendant had taken away, which was in the region of $1.7 million. According to the Deceased, it was right after his demand that he suffered the third stroke.
Transfers from joint accounts of the Deceased and the defendant to the defendant’s sole account
27. It was during this period, after the Deceased had had a third stroke and there were conflicts among the siblings, that in the three months between March and June 2006, the defendant closed or emptied the joint accounts in the name of the Deceased and herself, and transferred the funds to account(s) in her sole name.
28. Meanwhile, there were other conflicts between the siblings, concerning a bag containing items of the Mother, and the widow’s receipt of rents of the property on the mainland.
Death of the Deceased
29. On 6 August 2008, the Deceased died. His eldest child was 16 and his youngest, 11 years old.
Proceedings
30. As a result of the discovery of various matters, the widow and Madam Ng, as the co-administrators of the Deceased’s estate, sued the defendant for an account of the funds transferred to herself, and payment upon the taking of such account.
Trial
31. The trial took place in August 2014 and lasted 7 days. Both parties were legally represented. The widow, Madam Ng, Madam Leung (a cousin) and Francis testified for the plaintiffs, and the defendant, her husband, Hong Wah and Koon Wah gave evidence for the defendant.
Judgment of the trial judge
32. The judge gave judgment for the plaintiffs for reasons set out in his 39-page Judgment which I shall not summarize here. The following were his findings of essential facts5
“(a) The Mother had a number of joint accounts with the Deceased in Hong Kong dollars and in US dollars in the BOC and the HSB;
(b) The Mother intended to let the Deceased succeed all the money in their joint accounts out of the Mother’s affection to the Deceased, the 1st Plaintiff and their children;
(c) It was the intention of the Mother that the money in their joint accounts was jointly owned by the Mother and the Deceased in that all the money will be owned by the Deceased upon the Mother’s death by virtue of the principle of survivorship;
(d) The Chinese Note recorded the true intention of the Mother;
(e) As recorded in the Chinese Note, it was the intention of the Mother to open joint accounts in the names of the Deceased and the Defendant to manage the Deceased’s money. The purpose of naming the Defendant as one of the account holders was merely to allow the Defendant to assist the Deceased in managing his money;
(f) The Deceased and the Defendant opened the BOC account and the HSB account to implement the Mother’s intention under para (e) above;
(g) The Deceased and the Defendant transferred the money in the joint accounts of the Mother and the Deceased to the BOC account and the HSB account to implement the Mother’s intention under para (e) above;
(h) The Defendant has no beneficial interest in the money transferred to the BOC and HSB accounts. As a signatory of the joint accounts, she held the money on trust for the Deceased;
(i) The Deceased has at any time no intention to gift away any part of the money to the Defendant;
(j) The relationship between the 1st Plaintiff and the Defendant later turned sour, possibly because of their disputes in relation to the rental incomes of the Guangzhou Property and/or the Defendant’s administration of the Mother’s estate;
(k) The Defendant was unwilling to share the assets of the Leung family to the 1st Plaintiff, including the money of the Deceased in the BOC and HSB accounts;
(l) Conflicts developed between the Deceased and the Defendant about the operations of the BOC and HSB accounts;
(m) In order not to allow the 1st Plaintiff to share or enjoy the Deceased’s money, the Defendant transferred all the money out from the BOC and HSB accounts into her own account without the authority from the Deceased.”.
Appeal
33.1. The defendant appealed. As her application for legal aid for the appeal was refused, she was no longer legally represented.
33.2. Shortly before the hearing, the defendant applied again for legal aid but the court lifted the stay. The hearing of the appeal therefore proceeded.
Discussion
34. The defendant sought to persuade this court that the judge’s findings of fact were erroneous. However the appellate courts have said time and again in a number of judgments6
35. We are not persuaded that the trial judge was wrong.
36.1. First, the defendant emphasized that the trial judge was wrong to accept Francis’s evidence as he (Francis) had been misled by the widow, and that he (Francis) and she (the defendant) had personal conflicts as (she alleged) she had given him a sum of money to invest. She also alleged that Francis had made a false claim in his tax returns that the Mother was dependent upon him.
36.2. However if Francis has been misled by the widow, this should have been put to him at trial. We were not referred to transcripts containing such cross-examination. As for the personal conflict between Francis and the defendant, the judge was well aware of the conflict between him and Hong Wah regarding a unit, but the judge did not think that would cause him “to furnish false evidence to the court”7
37. In any event, apart from Francis, the judge also accepted the evidence of Madam Ng and Madam Leung. The judge’s acceptance of their evidence was not challenged in the grounds of appeal. The effect of the two ladies’ evidence8
38. Accordingly, assuming the Deceased believed that he was following the Mother’s instructions when he opened the joint accounts with the defendant (even though the Mother had already died without his knowledge), it would have been inherently improbable for the Mother and the Deceased to have intended that the defendant should have any beneficial interest in the funds, whether before or after the death of the Deceased. Given the Deceased’s lack of self-sufficiency, illnesses and his young children’s need of financial support, it was entirely likely that it was intended that the Deceased should alone enjoy the benefit of the funds, and that the defendant was made joint account holder simply so that she could help him manage them. This is also entirely consistent with the Chinese Note which set out the Mother’s wishes that the Deceased should “succeed” to the funds even though they are to be put in the joint names of the Deceased and the defendant9
39.1. The defendant also argued that it was through her efforts that the family was able to obtain the return of the house on the mainland and that improvements were made to it. She argued that therefore it was understandable that the Deceased instructed her to transfer the funds from their joint accounts to her sole-name accounts in 2006.
39.2. It may well be that the defendant had made more efforts than her siblings to obtain the return of the house and to improve it, but her argument that as a result the Deceased gave her the funds is simply contradicted by Francis’s evidence (which the judge accepted) that, far from the Deceased wanting to give the funds to the defendant, in fact he (the Deceased) wanted to retrieve the funds from the defendant but failed to do so. The defendant’s allegation of a gift of the funds from the Deceased is also inherently unlikely given his financial and family circumstances.
Order
40. For the reasons set out above, I would dismiss the appeal. It follows that it is not necessary to deal with the Respondent’s Notice. I would also order that the defendant pay the costs of the appeal to the plaintiffs.
Hon Poon JA:
41. I agree with the judgment of Yuen JA.
(Peter CHEUNG)
(Maria YUEN)
(Jeremy POON)
Justice of Appeal
Justice of Appeal
Justice of Appeal
Mr Tom Ng, instructed by Tai, Tang & Chong, for the 1st and 2nd Plaintiffs
The defendant, unrepresented, appeared in person
1 Francis settled down in the US while Koon Wah did not return to live in Hong Kong until many years later.
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6 Ting Kwok Keung v Tam Dick Yuen [2002] 3 HKLRD 1, China Gold Finance Ltd v CIL Holdings Ltd (CACV11/2015, 27.11.2015)
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