SUEN SHU TAI v. TAM FUNG TAI

HCA 1466/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1466 OF 2010

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J U D G M E N T

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INTRODUCTION

1.  In this action, the Plaintiff claims against the Defendant for, inter alia, a declaration that the assignments (collectively as “the Assignments”) of two properties (collectively as “the Properties”), namely Shop No. 17B, G/F, Che Cheung Building, Nos. 135-143 & 135A-141A, Po Kong Village Road and No. 2 Po Tin Lane and No. 6 Yuk Wah Crescent, Kowloon, Hong Kong (“the Shop”) and 4/F, A1, Nos. 8, 8A, 10, 10A, 12, 12A Ha Heung Road, Kowloon, Hong Kong (“the Flat”), respectively dated 22 September 1999 and 5 October 1999, be set aside, alternatively be deemed null and void for all intents and purposes as having been procured by the Defendant’s undue influence over and/or fraud and/or misrepresentation to the Plaintiff.  The Plaintiff further claims a declaration that the Defendant holds the Properties as constructive trustee of the Plaintiff; an order that the Defendant do re-convey the Properties to the Plaintiff, or an order for vesting the Properties in the Plaintiff.  Further or alternatively, the Plaintiff seeks a declaration that she has a life interest in the Properties.  An account is also sought by the Plaintiff of the dealings by the Defendant with the Properties and of the income of the same, with payment to the Plaintiff of all sums found due from the Defendant.

2.  The Plaintiff is the mother of the Defendant.  The Assignments were executed by the Plaintiff purportedly as vendor and the Defendant as purchaser for the consideration of HK$300,000 and HK$500,000 respectively.  There was no dispute at trial that such purported consideration was in fact never paid by the Defendant to the Plaintiff.

3.  The present action was commenced by the Plaintiff on 29 September 2010.  The Plaintiff was legally-aided.  At trial, the Plaintiff was represented by Ms Josephine Tjia and the Defendant by Ms Winnie Chan.  I am grateful to counsel for their assistance in this case.

FACTS NOT IN DISPUTE

4.  The Plaintiff was born in 1927.  At the time of the trial, she was 85 years old.

5.  The Defendant was born in 1961.  She was 51 at the time of trial.

6.  The Plaintiff is married to a person called Tam Yuk Lam (“Tam”). They have 4 children.  The Defendant has 3 elder brothers and she is the youngest of the siblings. Her elder brothers lived in Huidong, China. 

7.  In 1973, Tam purchased a property at Manning Theatre Building (“the Manning Property”).  Several years later, in 1978, he acquired the Shop at the price of $100,980.  The Shop was rented out to tenants for rentals.

8.  In 1982, the Plaintiff came to Hong Kong with their daughter, namely, the Defendant.  At that time, Tam was living with his concubine called Lou Nui.  Lou Nui bore 3 children for Tam and they were then living together in a flat in Ho Man Tin.  When the Plaintiff and the Defendant came to Hong Kong, they joined the household of Tam and his concubine, although the Defendant soon moved out to live with some friends in To Kwa Wan.

9.  In 1984, the Defendant married a man called Chan To Man.  3 children were born from that wedlock. 

10.  In 1986, Tam purchased the Flat in the joint names of himself and the Plaintiff. After the Flat was purchased, the Plaintiff moved out of the household of Tam and his concubine, and lived in the Flat.  Her husband, Tam, would come to stay with her about once every 2 days.  The Defendant never lived in the Flat.

11.  The Flat was partitioned by Tam, and apart from the room in which the Plaintiff lived, the other parts of the Flat were rented out to other tenants.  The rentals collected were used to pay off the mortgage.  The mortgage was fully paid off in about 1993.

12.  In the years between 1986 and 1990, the Plaintiff helped to take care of the Defendant’s children while she worked in some garment factories. The Plaintiff was paid $500 a month by the Defendant for helping her out.  In 1990, the Defendant stopped working because, according to her evidence at trial, the income of her husband had improved.

13.  Tam suffered a stroke in 1994, and his health began to deteriorate.

14.  In 1995, the Defendant divorced her husband and was given custody of her 3 children.  The Defendant began to live on Comprehensive Social Security Assistance (“CSSA”) from about July 1994.  This continued until 22 September 1999, when the CSSA terminated in circumstances I would mention later.

15.  In August 1997, Tam divided his landed properties between his wife and his concubine.  The Properties, i.e. the Shop and the Flat, were transferred by Tam into the sole name of the Plaintiff.  The Manning Property was transferred to Lou Nui.

16.  According to the land search record, the Shop was assigned by the Plaintiff to the Defendant on 22 September 1999, and the Flat was assigned to the Defendant on 5October 1999.  The Assignments were prepared by and executed at the offices of George Y.C. Mok & Co. (“GYCM”), a firm of solicitors whose offices were in Mongkok.  The consideration for the assignment of the Shop and the Flat was, respectively, $300,000 and $500,000.  As pointed out above, it is not in dispute that the Plaintiff had never received payment of any of these sums from the Defendant.

17.  Despite the Assignments mentioned above, the Plaintiff continued to reside in the Flat.  In the meantime, Tam was apparently forced out of his Ho Man Tin home by his concubine.  The Plaintiff refused to let him stay in the Flat.  In about 2000, Tam moved into public housing in Ma Tau Wai Road.

18.  During the years between 2003 to 2009, the Plaintiff had, from time to time, travelled to Huidong, China and spent time living with her sons, sometime for lengthy periods.  In May 2003, she had a surgery in Huizhou.  In January 2006, the Plaintiff went to Huidong to live with her sons, and only returned to Hong Kong in March 2007.   She went back in Huidong again in June 2007.  During these years, whenever the Plaintiff returned to Hong Kong, she would go back to the Flat to live.

19.  The Plaintiff came back to Hong Kong in June 2009.    However, when she tried to get into the Flat, she found that the door-lock had been changed and she was unable to gain access to the Flat.

20.  Thereafter the Plaintiff was unable to return to the Flat to live.

21.  In August 2010, the Defendant entered into a Provisional Sale and Purchase Agreement with a company called Land Crown International Limited (“Land Crown”), whereby the Defendant agreed to sell the Flat to Land Crown for $2,988,000 and an additional payment of $1,328,000 as “decoration and removal expenses”.

22.  The Writ of Summons in this action was issued on 29 September 2010, and was registered in the Lands Registry as a lis pendens on the next day.

23.  On 8 December 2011, the Defendant purportedly completed the sale of the Flat to Land Crown, and the proceeds of sale was held by GYCM as stakeholders.

THE PLAINTIFF’S CASE

24.  It is the Plaintiff’s case that after Tam had transferred the Properties to her, she began to collect rent from the Properties herself, and Tam ceased to support her living.  The rental income was her only source of income. 

25.  According to the Plaintiff, one day in early 1999 the Defendant came to see her in the Flat and showed her a letter.  The Defendant told her that Tam had instructed his lawyers to claim back the Properties from her, and to transfer the same to his concubine.  The Plaintiff was told that she only had 10 days to move out.

26.  The Plaintiff became very worried.  She told me in Court that if the Properties were taken back from her and transferred to Tam’s concubine, she would have no place in the family (“企都無地企”). The Defendant suggested to the Plaintiff that, in order to avoid Tam’s claim, she should transfer the Properties into the Defendant’s name.  The Defendant told her that if the Properties were transferred into her name, Tam would not be able to recover the Properties from her.

27.  According to the Plaintiff’s witness statement, which she confirmed in Court, the Defendant promised (collectively as “the alleged Promises”) her that she would support her living in the future and would give her a proper burial when she died (“生養死葬”). The Defendant further promised her that she would also hire a foreign domestic helper to look after her.  In her oral evidence given in Court, the Plaintiff claimed that the Defendant had also promised to give her $3,000 per month (this is however not mentioned in either the Amended Statement of Claim or in the Plaintiff’s witness statement – rather in paragraph 17 of her witness statement, the Plaintiff mentioned that in 2007, the Defendant had promised to give her $3,000 per month if she would go back to Huidong to live).

28.  The Plaintiff agreed to transfer the Properties to the Defendant. She had wanted to call her eldest son to discuss the matter but was stopped by the Defendant, who queried her for not trusting her.

29.  Sometime later the Defendant took the Plaintiff to the office of a firm of solicitors in Mongkok, which was located on the 12^th Floor of a building.  The Plaintiff had wanted to be accompanied by her sons or a nephew, but when she mentioned this to the Defendant, the Defendant asked her if she did not trust her, and the Plaintiff accordingly did not insist.

30.  At the offices of the solicitors, the Plaintiff was attended to by a Ms Wong and she was required to sign documents (which she did) that she did not quite understand.  All she knew was that by transferring the Properties into the name of the Defendant, her husband could not claim back the Properties from her for transfer to his concubine.  She remembered, however, that Ms Wong had told her that the price for the transfer of the Properties was $500,000 and $300,000, but it was a matter between the Plaintiff and the Defendant how the money was paid.  She also said that she had never expected such money to be paid by the Defendant to her.

31.  After she had transferred the Properties into the name of the Defendant, the Plaintiff continued to live in the Flat and collect rent from the tenants of the Properties.  The Defendant however did not keep her promises: she had not supported the Plaintiff’s living, nor had she hired a domestic helper to take care of her.

32.  It is the Plaintiff’s case the only reason why she transferred the Properties into the Defendant was to avoid the claim threatened by Tam.  She did not intend to make a gift to the Defendant.  She told me that she considered that the Properties still belonged to her after the transfer, even when she died (I take it to mean, in lawyers’ language, that she considered the Properties to belong to her estate upon her death). 

33.  The Plaintiff also alleges, as part of her case, that she had reposed trust and confidence in the Defendant.  The transfer of the Properties to the Defendant was, according to the Plaintiff, manifestly disadvantageous to her.  She claims that the transfer of the Properties was a result of the undue influence by the Defendant, and for that reason, is liable to be set aside.

34.  Tam never in fact pursued any claim for recovery of the Properties from the Plaintiff.   It is part of the Plaintiff’s case that she had relied upon what the Defendant’s represented to her (about Tam seeking to claim back the Properties for the benefit of his concubine) in transferring the Properties to the Defendant.  It is alleged that the representation made by the Defendant was false, and that accordingly the Assignments should be set aside inasmuch as the Plaintiff was relying upon such misrepresentation when she executed the Assignments.

35.  The Plaintiff further says that she made the transfer of the Properties in reliance on the alleged Promises made by the Defendant.  As the Defendant had failed to keep her promises, she says that she is entitled to have the Assignments set aside on this ground as well.

36.  Finally, the Plaintiff contends that she has a life interest in the Properties.  I note that this contention was introduced by way of an amendment to the prayers of the Statement of Claim, but it is not clear from the body of the Statement of Claim what is the legal basis for the contention.  Nothing was said by Ms Tjia in her Closing Submission about this contention.   

THE DEFENDANT’S CASE

37.  The Defendant’s case is quite different from the Plaintiff.  She claimed that in early September 1999, her mother called her and told her that she had received a letter (in both English and Chinese) from a law firm which stated that Tam intended to claim back the Properties from the Plaintiff.  The Plaintiff asked the Defendant to come to see her as soon as possible.

38.  The next day the Defendant went to see the Plaintiff who showed her the letter.  The Defendant recognised that the letter was from the Legal Aid Department which stated that Tam’s legal aid application had been refused. The Defendant told me in her oral evidence (when she was asked why she would relate the letter to the Properties if the letter only mentioned that Tam’s legal aid application had been refused) that the letter also stated that if Tam wanted to pursue his claim for the Properties, he would have to instruct his own private lawyers.

39.  According to the Defendant, the Plaintiff was very upset with this and a few days later she called the Defendant again and offered to transfer the Properties to her.  The Plaintiff told her that she would rather benefit her own daughter than the concubine and her sons. The Plaintiff told the Defendant that as Tam had provided financial assistance to her brothers to set up factories in China and had not given the Defendant anything, she would give the Properties to her.

40.  It is hence the Defendant’s case that her mother did not merely offer to transfer the Properties into her name, but to give her the beneficial interest in the Properties.  Her case is that her mother did so not merely to avoid her father’s threatened claim, but also because her mother considered that she had been left out of her father’s financial provisions, which her father had given to her brothers but not to her.

41.  According to the Defendant, she was not receptive to the Plaintiff’s offer initially as that would mean that she would have to terminate her CSSA, which gave her some $8,000 per month.  The Plaintiff then persuaded her to accept the Properties by offering to let her take the benefit of the rental income of the Properties, subject to deducting $1,000 per month for the Plaintiff’s use.  The Plaintiff told the Defendant that together with her Old Age Allowance of $700 per month, she would have a total of $1,700 a month, sufficient for her own use. 

42.  The Defendant then agreed to accept the offer of the Plaintiff.  The Defendant then arranged for GYCM, the firm of solicitors that had previously assisted her in her divorce proceedings, to handle the legal matters concerning the proposed transfer.

43.  According to the Defendant’s testimony in Court, she and the Plaintiff had gone to the offices of GYCM in Mongkok on 3 occasions without any prior appointment.  On the first occasion, they were merely attended by a receptionist and did not see any lawyers. On the second occasion, they met a solicitor called Ms Lau who gave them some advice.  On the third occasion, they attended Ms Lau again and the legal documents effecting the transfer of the Properties were executed.

44.  After the Properties were transferred to her, the Defendant’s CSSA was terminated.  Thereafter she received all the rentals from the Properties, and after deducting $1,000 to give to the Plaintiff, she would keep the rest of the rentals.  The rental for the Shop was $3,000, and for the Flat, $2,700.   The Defendant supplemented the rental income that she received by working part-time as a cleaner, from which she earned about $2,700 a month.

45.  The Defendant’s case is that in transferring the Properties to her, the Plaintiff intended to make a gift of the Properties to her.   She says that as she had to give up her CSSA in accepting the gift, she had acted to her detriment and it is unconscionable for the Plaintiff to recall the gift.

46.  The Defendant denies the allegations of undue influence and misrepresentation.  She also denies that she had made the alleged Promises to the Plaintiff to procure the transfer of the Properties to her.   

THE ISSUES

47.  The issues in this case, as I see it, are as follows:

(1) Did the Plaintiff make a gift of the Properties to the Defendant when she assigned the same into her name?  Relevant to – indeed determinative of – this issue is the intention of the Plaintiff at the time when the transfers were made.

(2) Did the Plaintiff transfer/assign the Properties to the Defendant under undue influence?

(3) Were the transfers vitiated by misrepresentation of the Defendant?

(4) Did the Defendant make the alleged Promises, and if so, were the transfers conditional upon the alleged Promises?

(5) Depending on the conclusions on the issues above, what are the proper orders to be made?

WITNESSES

48.  At trial, both the Plaintiff and the Defendant gave evidence.  The Defendant also obtained subpoenas to call one Wong Mei Fong (“Wong”) and Lau Suk Wah Miranda (“Lau”) to give evidence.  Wong was and is a conveyancing executive of GYMC.  Lau is a solicitor and is presently a partner of GYMC.  She was the handling solicitor of the transfer of the Properties in 1999.

49.  It is not necessary for me to detail the evidence given by the witnesses in this Judgment.  I will refer to their testimony, so far as it is relevant, when I discuss my decision on the issues of the case.

50.  I should mention at the outset, before I refer to the witness testimony relevant to the issues before me, that I bear in mind the fact that the circumstances and events surrounding the making of the Assignments and the transfer of the Properties took place some years ago.  It is only natural that memory may lapse after all these years, and discrepancies in details are only to be expected.  I also bear in mind the fact that the Plaintiff is an old lady, and is largely illiterate, although the Defendant (rather belatedly) claimed that her mother had in fact received some education.  It is not surprising that a person of the age of the Plaintiff, illiterate or not, may not be able to recall details of events very well; and from what I observed of the Plaintiff’s testimony in Court, that is the case here.  I do not accept the criticisms made by Ms Chan of the credibility of the Plaintiff based on her inability to recall matters or details of matters, and I find the Plaintiff to be an honest witness overall.  That is not to say that the Plaintiff could not have mixed up matters in her mind, and needless to say that failure to recall matters or events, while understandable, is not proof of the matters or events in question.  I also remind myself that while the standard of proof is one of balance of probabilities, the more serious is the allegation, the more convincing the evidence should be before I find the allegation proved. 

51.  I have also reminded myself that the assertion/declaration by the Plaintiff of what was her intention at the time when the Properties were transferred is self-serving, and I do not find the evidence of such assertion or declaration, made years after the event, to be helpful in resolving the question of the Plaintiff’s intention in 1999.  Indeed I seriously doubt the admissibility of such evidence. Although counsel has not referred me to the case, I think the guidance provided by the decision of the House of Lords in Shephard v. Cartwright [1955] AC 431, is worth a reminder (see also, Overseas Trust Bank Limited v Lee See Ching John, unreported, CACV 238/1997, 14 May 1999, and Watson v Smith [1998] 3 HKC 461).  There, Viscount Simonds cited, at 445, the following passage from Snell’s Equity, 24^th ed., p.153, as stating well-settled law:

“The acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration… But subsequent declarations are admissible as evidence only against the party who made them, and not in his favour.”

52.  Although Shephard v Cartwright is a case involving the consideration of the admissibility of evidence tending to rebut the presumption of an advancement, I think the guidance given by the House of Lords is capable of more general application – it certainly makes good sense that subsequent declarations should not be lightly admitted in favour of the party making them, as they tend to be self-serving. 

53.  That said, I have rather greater reservation of the Defendant’s evidence.  I hasten to add that I am not finding her to be the kind of thoroughly dishonest witness telling lies out and out.  That is not the case.  I do, however, have doubts on her general credibility as a witness.  In the case of the Defendant, it is not just a matter of failing to recall details of events.  She would become evasive whenever she was asked questions on matters which she perceived might be adverse to her case.  She had also given evidence which departed significantly from what she described in her witness statement, and offered no or no satisfactory explanation for the change of her story.  Her account of how she and her mother attended the offices of GYCM and what happened at the solicitors’ office, which differed significantly from her witness statement, certainly did not impress me.   Her evidence that she did not have the phone number of GYCM; that she and her mother attended the solicitors’ offices without any prior appointment; and that GYCM was able to have the Assignments and other documents prepared immediately without previously having been provided with the title deeds really defies belief.  I think she gave such an account in order to distance herself from GYCM (who acted for her in her divorce, and subsequently also for her in relation to her sale of the Flat to Land Crown), when she knew that the Plaintiff’s legal representatives were criticising GYCM for having taken a very biased stance in the matter.  The Defendant did not want me to see her as having a close relationship with GYCM, and in doing so, told me a story which I think was quite incredible (and directly contradicted by the other evidence, including the testimony of Wong and Lau). 

54.  The Defendant also had a tendency to exaggerate her evidence.  Her evidence that the Plaintiff had repeatedly (on no less than 3 occasions) said that she completely understood the transaction – which the Defendant was at pains to emphasize – did not ring true.  Her evidence that the Plaintiff had, after meeting Lau, decided to take back all the title deeds and go back home to consider the matter for a week, is in my judgment simply not true.  I think she exaggerated this part of her evidence in order to create the impression that not only did the Plaintiff fully understand the transaction, she had in fact taken time to consider the matter carefully after meeting the lawyer.  Such exaggeration, no doubt, was made with a view to deflect the charge of undue influence.

55.  The Defendant’s demeanour in the witness box, and the matters that I mentioned above, has raised doubts in my mind of her credibility as a witness.  Except for certain matters that I specially mention below, generally speaking I prefer the Plaintiff’s evidence where her evidence conflicts with that of the Defendant’s.

56.  For reasons I shall mention later, I also have reservation as to the evidence of Wong and Lau.

WERE THE PROPERTIES TRANSFERRED BY WAY OF GIFT?

Ascertaining the intention

57.  Where A transferred or assigned to B property without receiving consideration therefor, the natural question – in most cases the single most important question – to ask, if subsequent dispute arises as to the transfer or assignment, is: “Why did A put the property in B’s name, instead of holding it himself?” The answer to the question will often provide an immediate answer to the legal question, namely, the intention of A in making the transfer or assignment.

58.  People making transfers of properties, particularly when they are laymen, will often not be alluded to concepts of legal title and beneficial title.  They do not think in such terms.  Often it is not real, and not practical, to seek to ask the legal question directly: “Did A intend to transfer the beneficial interest in the property to B, or did he intend to retain the beneficial interest for himself, and merely intends to transfer the legal title to B?”  Put in such legal form, the answer to the question posed is often unproductive: questions of beneficial and legal interest, a dichotomy of concepts entrenched in the common law but not necessarily well known to laymen (particularly Chinese laymen), may never occur to the mind of many transferors.  Accordingly, in many cases the more practical question to ask is the one I mentioned above.  I hasten to add that I am not suggesting that this “more practical question” is to replace the ultimate legal question (i.e. whether the intention is to transfer beneficial title or only the legal title).  What I am saying is that the answer to this more practical question will often lead immediately to the answer to the ultimate legal question, without getting bogged down with difficulties such as that of wondering whether a transferor has ever applied his mind to the question of the passing of beneficial title.  

59.  Answer to the question of intention will often be found by considering the relevant admissible evidence.  But sometimes the admissible evidence may not be clear, or may not be available at all.  There are useful legal devices – in the form of presumptions – to assist the Court in this regard.  Well known to lawyers are the presumption of resulting trust and the presumption of advancement.  As Lord Phillips observed (with reference to the scenario of one person A transferring property to B without receipt of any consideration) in the case of Lavelle v Lavelle [2004] EWCA Civ 223, at paragraph 14:

“Normally there will be evidence of the intention with which a transfer is made. Where there is not, the law applies presumptions. Where there is no close relationship between A and B, there will be a presumption that A does not intend to part with the beneficial interest in the property and B will take the legal title under a resultant trust for A. Where, however, there is close relationship between A and B, such as father and child, a presumption of advancement will apply. The implication will be that A intended to give the beneficial interest in the property to B and the transaction will take effect accordingly.”

60.  In the case where A and B are husband and wife, or father and child, it is well-settled law that the relationship is regarded as close enough to raise the presumption of advancement.  In the present case, however, the Plaintiff is the mother of the Defendant.  The question arises as to whether the presumption of advancement is applicable to such a relationship.  The Defendant contends that the presumption applies.  The Plaintiff contends otherwise.  

Presumption of Advancement

61.  As mentioned, in the case of father and child, it is well-settled law that the presumption of advancement applies (see, Dyer v Dyer (1788) 2 Cox Eq Cas 92, [1775-1802] All ER Rep 205, and Lavelle v Lavelle, supra).  In the case of mother and child, there is the nineteenth century authority of Bennet v Bennet (1879) 10 Ch D 474, where it was held that the presumption of advancement did not apply to mother and child.  Jessel MR held at p.478:

“But in our law there is no moral legal obligation – I do not know how to express it more shortly – no obligation according to the rules of equity – on a mother to provide for her child.”

62.  The case of Bennet v Bennet was followed by Godfrey JA in the decision of our Court of Appeal in Watson v Smith [1998] 3 HKC 461 at 464F to I , where his lordship held as follows:

“When there is evidence available for the resolution of questions such as this, which unfortunately arise all too frequently, the court has to consider that evidence, and decide where the truth lies. There are factual presumptions which can sometimes assist the court in resolving these questions, such as the presumption of advancement (ie gift). However, since there is no equitable obligation on a mother to advance a daughter, there is no presumption of advancement when a mother makes a purchase of property in the name of her child: see Bennet v Bennet (1879) 10 Ch D 474. Rather, in the absence of other evidence, there would in such a case be a presumption of a resulting trust, that is to say, that the property purchased belonged to the mother, as to the person who paid for it, no matter in whose name it was taken. And, where it is said that money was advanced for the purchase of a property by way of gift to a donee, the donee has to prove that that was the case. The burden of proof that a transaction was intended to be by way of gift rests on the donee: cp. Seddon v Davidson [1968] 1 WLR 1083.”

63.  Like the present case, in the case of Watson v Smith, the Court was concerned with the question whether a mother intended to make a gift to her daughter.  It is to be noted that in the case of Watson v Smith, the appellant was not legally represented, and it may be said that the Court of Appeal did not have the benefit of the arguments of counsel on his behalf.  Moreover, insofar as the decision of Godfrey JA touches upon the presumption of advancement, that part of the decision was obiter, for it is clear that the basis of the Court of Appeal’s decision was that it would not disturb the findings of the trial judge (Yam J) when they were based on the credibility of the witnesses, and Yam J was entitled to hold on the evidence before him that the mother in that case did not intend to make a gift to her daughter.  Indeed, the other 2 judges sitting in the Court of Appeal (Mortimer VP and Rogers JA) did not address the question of presumption of advancement at all. 

64.  In a decision subsequent to Watson v Smith, Deputy Judge To (as he then was) refused to follow the dicta of Godfrey JA: see, Lee Tso Fong v Kwok Wai Sun & Another [2008] 4 HKC 36.  The learned Deputy Judge held (at p.44, paragraphs 16-17) that the dicta is not to be followed because it was made without the benefit of argument by counsel and the development of the relevant law in other common law jurisdictions.  It was also inconsistent with current socio-economic circumstances.

65.  In Lee Tso Fong, Deputy Judge To referred to the Canadian case of Dagle v Dagle Estate (1990) 70 DLR (4^th) 201, where the Supreme Court of Prince Edward Island refused to follow Bennet v Bennet and extended the presumption of advancement from between father and child to the case of mother and child.  In that case, MacDonald CJTD held, at paragraph 22:

“Today, in contrast to the time of Jessel MR, there is an obligation upon a mother to support her children. Section 17(1) of the Family Law Reform Act states that every parent has an obligation to provide support for his or her child. Section 15(2) of the Divorce Act, 1985, SC 1986, c4, also provides that any spouse may be required to provide support for a child of the marriage.”

66.  I do not think that, in itself, what MacDonald CJTD referred to about modern family legislation provides a good reason for extending the presumption of advancement to the case of mother and child.  The statutory obligation by a parent, whether a father or a mother, to provide for children of a marriage plainly does not extend to adult children, but the presumption of advancement, an equity’s construct, if applicable at all, would apply to all children, adult or minor.  It would also apply, if it is held to be applicable to the relationship of mother and child, to cases such as the present, i.e. between an old non-working mother and an independent adult working daughter.  I do not think that reference to family reform legislations can be relevant to situations like these.  I am therefore very doubtful that development in modern family legislations in itself provides a sufficient ground for an extension of the presumption of advancement.

67.  As rightly held in Lee Tso Fong, the presumption of advancement is “based on the father-child relationship, the child’s dependence on the father, the father’s moral obligation to give and the common experience that the father, being older and having accumulated wealth, is more likely or is commonly intended to make gifts to his child.  The presumption does not apply to strangers or other relationships.” (para.13 at p.43)

68.  Implicit to the thinking behind the extension of the presumption of advancement to mothers is the recognition of the equality between men and women in modern societies, and the perceived anomaly of applying the presumption only to fathers but not to mothers.  It is true that modern societies like Hong Kong have witnessed a significant liberation of women rights, with the rise of the educational standard for women and their financial independence.  But the increased financial independence of women does not mean that nowadays children – and I have in mind particularly adult children, for the cases of minor children are subject to rather different consideration – are necessarily more dependent on their mothers, and mothers are to be regarded as having a greater obligation to provide for them.  In particular, the rise of education standards in general and financial independence of women is likely to benefit the younger generation more than the older.  In many cases, it is the daughters who enjoy greater financial independence than their mothers.  I am not at all sure that it is right to simply jump from the fact that there are now more working women who enjoy financial independence than in the old times, to the conclusion that nowadays we should consider mothers as having a greater obligation to provide for their children.

69.  This points to the consideration whether in the light of the modern day conditions, the presumption of advancement should be re-examined to see if it should be restricted in its application only to children who are dependent upon their parents.  But the obligation to provide is not the only element in the equation.  Other considerations, for example, the fact that parents naturally have affection for their children and are more likely to make gifts to them, play a significant part in the traditional justification of the presumption of advancement.  Such persistent common experience rests on human nature perhaps explains why the traditional presumption of advancement is still regularly held to be applicable to fathers and their adult children.  The position, I think, is correctly summarised by Professor Waters in his work on the Law of Trusts in Canada, 2^nd Ed., p.325, cited by MacDonald CJTD in the Dagle case, at paragraph 23:

“The presumption of advancement between father and child has not been subjected to any of the re-evaluation which in recent years has overtaken the presumption between husband and wife. Consequently, there is no authority which imputes to it less force than it had at the time of Krys v Krys. It may well be that, reflecting the financial dependency that it probably, does, contemporary opinion would accord it little weight as between a father and an independent, adult child. But the factor of affection continues to exists, something which cannot be presumed in the relationship between strangers, and possibly for this reason the courts have seen no reason to challenge its modern significance. The property relations between father and child are in any event quite different from those between contemporary husbands and wives. This means that the full force of this uncertain state of the law as between the Scheuerman case and the Goodfriend minority judgment continues to apply to father and child resulting trust actions.” (emphasis added)

70.  There is however a significant difference between the Court not challenging the modern significance of the presumption of advancement as it is traditionally applied to father and child, in recognition of the factor affection that continues to exist; and the Court extending the presumption to mother and child on the basis that the socio-economical conditions have significantly changed to justify a development of the law in such a way.  The factor of affection between mother and child existed in the nineteenth century as it is today, and I do not see why that factor alone can be sufficient ground to justify an extension of the presumption.

71.  Watson v Smith was decided in 1998, and can be regarded as a modern authority.  Certainly, Godfrey JA did not see it that there had such significant change of socio-economical conditions such as to justify a departure from Bennet v Bennet.  I accept that Godfrey JA’s comments on the application of the presumption of advancement in that case is obiter only, and is therefore not strictly binding on me.  I also accept that in that case the Court of Appeal did not have the benefit of full argument from counsel (although the first respondent in that case was represented by counsel).  Nonetheless, the obiter having emanated from an eminent Court of Appeal judge, deserves respect; and unless there are convincing grounds to show that he was wrong, I do not see how it could be said that his obiter is outdated and not consistent with modern social conditions. I certainly do not see a substantial difference between the socio-economical conditions (relevant to the present issue) in 1998 and in 2013, as far as Hong Kong is concerned.  So unless Godfrey JA was wrong in 1998 to have followed Bennet v Bennet, I do not think that it is right to dismiss his obiter as being outdated and for that reason inapplicable.  In this regard, I certainly do not see why I should prefer the obiter of the Court of Appeal in New South Wales in Brown & another v Brown & another (1993) 31 NSWLR 582 to the obiter of our own Court of Appeal.

72.  In Lee Tso Fong, Deputy Judge To held as follows (at p.43, paragraph 12):

“In very much the same way as the court may dis-apply a presumption due to changes in circumstances, I think the court may extend the application of a presumption for the same reason. The law is living and flexible. It is capable of adapting to changing circumstances. A judge’s duty is to find out what the law is and to give effect to it. First instance judges are in the best position as front line judges to feel the pulse of the society and the pulse of the evolving law. A judge would be abdicating his duty by slavishly following precedents under new circumstances when the basis for their application no longer existed and to leave it to the appellate process to find out what the law now is. In finding out what the law is under the new circumstances, a judge does not offend the principle of stare decisis.”

73.  While I fully agree with Deputy Judge To’s view that the law is living and must adapt to changing circumstances, in my judgment the Court has to be cautious not to be too trigger-happy in the exercise of its judicial function.  The myriad of social-economical conditions at play in a modern society need to be carefully considered before one can say that there has been such fundamental changes in social and economical conditions as to require a change of the law, and the extension or creation of a device that has the effect of reversing the burden of proof.  This is particularly so for the Court of First Instance in the absence of binding authorities.  As pointed out above, it is one thing for the Court seeing insufficient reason to challenge the modern significance of the presumption of advancement as it is traditionally applied to father and child; it is quite another to extend the presumption to mother and child on the ground that there has been such change in socio-economical conditions as to require a development of the law in this regard. 

74.  The law, of course, must develop in line with the change in social conditions if it is not to become a dead letter.  But consistency in the application of the law is the life-blood of our system and old authorities are not to be discarded or dismissed simply because they are old.  Judicial development of the law should be undertaken cautiously.  Unrestrained judicial innovations can cause great uncertainty to the law.

75.  For the reasons above, despite Lee Tso Fong, I do not see sufficient reasons to justify departure from Bennet v Bennet.  Accordingly, if it is necessary at all for me to rely on any presumption in this case, I would hold that the presumption of advancement does not apply.  Rather it is the presumption of resulting trust that is applicable.

76.  I have devoted some space in this Judgment on the discussion of the presumption of advancement in deference to the arguments made by counsel on the point.  However, as will be clear from the discussion below, I take the view that the evidence on the intention of the Plaintiff is clear.  I do not have the need to resort to either the presumption of resulting trust or the presumption of advancement to resolve the question of intention.  Accordingly, the discussion above may be somewhat academic as it is not necessary for me to rely on any presumption in my finding of the Plaintiff’s intention in the present case.

Why did the Plaintiff transfer the Properties?     

77.  It is clear from the evidence that the reason why the Plaintiff wanted to transfer the Properties to the Defendant in 1999 was to avoid the attempt by Tam to claim the Properties back from the Plaintiff.  Although the Plaintiff’s and the Defendant’s evidence differed on how the attempt by Tam was brought to the attention of the Plaintiff (the letter can no longer be found, and I do not have the benefit of studying the contents of the letter itself), both agreed that it was shortly or immediately after the Plaintiff had become aware of the threatened claim by Tam that the idea of transferring the Properties to the Defendant was first raised.  For present purposes it does not matter whether Tam’s threat to recover the Properties from the Plaintiff had any legal merits at all.  It is plain from the evidence that the Plaintiff took the matter seriously and was upset about it.  I am satisfied that if there had been no attempt by Tam to claim back the Properties, this idea of transferring the Properties to the Defendant would not have been raised at all.

78.  So there is a clear purpose for the transfers – it was to put the Properties out of the reach of Tam.  The question is whether in so doing, the Plaintiff also intended that the Defendant would benefit from the transfers and to become the owner of the Properties.  It is not inconsistent to putting the Properties out of Tam’s reach, and also making a gift to the Defendant. 

79.  In my judgment, the evidence before me points overwhelmingly against the intention to make a gift.

80.  The Plaintiff never worked in Hong Kong and did not have any income other than the rental income from the Properties, which she relied upon for her living.  After Tam had gifted the Properties to her, Tam had ceased to support the Plaintiff in her living.  The Properties were the Plaintiff’s only valuable assets and she was dependent on them.  The Plaintiff had all along been using the Flat as her home (while renting part of the premises out), which was her only residence in Hong Kong.  In 1999, the Plaintiff was enjoying good health and the Defendant did not suggest that health reasons played any part at all in the Plaintiff’s alleged gift to her.

81.  So there does not appear to be any reason at all why the Plaintiff would wish to suddenly give everything away to the Defendant.  The Plaintiff has 4 children, and there is nothing to suggest that if the Plaintiff was to think about dividing her properties between her children, she would prefer the Defendant to such extent as to give everything to her. This is so even though the Defendant was the only child living in Hong Kong.  In 1999, the Plaintiff’s relationship with her sons was good, and as I pointed out before, from time to time the Plaintiff would go to Huidong to live with her sons (which continued until some ten years later). The Plaintiff would not have any reason to prefer the Defendant in such a way.

82.  It was suggested by the Defendant that the Plaintiff wanted to benefit her with the Properties as she considered that her brothers had been well provided for by Tam, who had financially assisted them in setting up factories in China.  I do not accept this allegation, which is a rather bare one without the support of any convincing evidence.  Indeed the evidence suggests that Tam was not particularly well off to be in a position to provide any significant financial assistance to his sons.   By 1994, Tam had already suffered a stroke and his health had gone downhill.

83.  The Plaintiff’s conduct after making the transfers was consistent with her still treating the Properties as hers.  She continued to pay the rates of the Properties and the phone bills of the Flat.  In this connection, I firmly reject the Defendant’s evidence that it was she who paid the rates (the Defendant accepted that it was the Plaintiff who paid the phone bills of the Flat).  It was the Plaintiff, not the Defendant, who was able to produce the relevant rates demands and receipts.  The Defendant’s claim that the Plaintiff was able to produce the rates demands/receipts only because, every time after the Defendant had paid the rates, she would bring the rates demands/receipts back to the Flat and put them on the dinner table, seems to me to be quite incredible.  Why would the Defendant do so if she was the person who paid the rates (and did so because she considered herself to be the owner)?  Why did she not keep the demands/receipts herself?  No satisfactory explanation has been given by the Defendant in this regard.

84.  I further reject the Defendant’s evidence concerning the CSSA.  Indeed I find it difficult to understand why, if the Defendant’s understanding at the time was that her mother was offering to gift the Properties to her, why she would have been non-receptive of the offer allegedly because she would lose her CSSA.  The value of the Properties gifted to her would have far outweighed the benefit of the CSSA that she might stand to lose.  I find that the Defendant did initially hesitate on the idea of having the Properties transferred to her name, precisely because she knew that the intention was her mother was to let her hold the Properties in her name only and not to make a gift to her.  She was not under any misconception that the proposed arrangement was to benefit her with the ownership of the Properties – she knew that the whole exercise was to create an appearance that the Properties had been transferred out of her mother’s name, as an attempt to avoid Tam’s intended action.  The Defendant hesitated because she had to weigh the consequence to herself if she would lose CSSA.  No doubt the Defendant had hesitated long and hard.  I find that eventually she agreed to the proposal when the Plaintiff agreed that she could keep the rental income of the Shop, and subject to the deduction of $1,000, also keep the rental income of the Flat as well to support her living.  In this particular regard, I prefer the Defendant’s evidence to the Plaintiff’s.  I find that the Defendant eventually agreed to the proposal because she considered that she would be able to support her living by finding a part-time job to supplement the rental income that the Plaintiff agreed that she could keep.  The Defendant may well have other reasons for agreeing to help out her mother – the two were in good terms and the Defendant might consider Tam’s proposed action to be unfair to her mother.  It is not necessary for me to make any finding on these matters.  It is sufficient for me to find that at the time of the transfers, the Defendant was well aware of the fact that the Plaintiff was not making a gift of the Properties to her, which was why she was not initially receptive to the proposal.

The Evidence of Wong and Lau

85.  Ms Chan relies on the evidence of Wong and Lau.  In fact, however, the evidence of Wong and Lau differs significantly from that of the Defendant’s (whether one takes the version of the Defendant’s evidence given in Court or that as set out in the witness statement), particularly in regard to the circumstances under which they allegedly met at the offices of GYCM.  I do not, however, place great significance on the discrepancies in the details, as I think that it is not surprising that the witnesses may have different recollection of the details after the lapse of so many years. 

86.  I have instead focused more on what I consider to be the crucial question in the case, namely whether Wong or Lau has given credible evidence that sheds light on the intention of the Plaintiff at the time of the transfers.

87.  Ms Tjia has made a number of valid points against the evidence of Wong and Lau.  Although these points are, in my view, valid criticisms of their evidence, it is not necessary for me to discuss them in detail as I have not, at the end of the day, attached much reliance on them.  I have not placed much importance on these points simply because I take the view that the evidence of Wong and Lau, even if they are accepted, casts very little light on the crucial issue in this case, i.e. the intention of the Plaintiff at the time of the transfers.

88.  I cannot, however, leave this Judgment without putting it on record that I do take a dim view of the GYMC’s conduct in this case.  It is plain from the relevant correspondence between GYMC and the solicitors of the parties that GYMC had taken a very biased attitude towards the Plaintiff and her solicitors.  It is plainly not for GYMC to take a stance on the Plaintiff’s claim in this action, yet GYMC had chosen to criticise the merits of the Plaintiff’s case (implying or suggesting that the Plaintiff was wasting public money by continuing to be legally-aided in her claim), and it appears from the correspondence that the firm was treating the Plaintiff’s solicitors and the Defendant’s solicitors with vastly different attitude.  I would give just one example.  On 22December 2010, the Plaintiff’s solicitors wrote to GYMC and asked 5 specific questions concerning the transfers in 1999.  It took GYMC almost 3 months to provide a reply, and when they eventually did reply (by a letter dated 10 March 2011), they claimed that the relevant files had been warehoused away some 10 years ago and demanded the payment of $3,000 for answering the questions of the Plaintiff’s solicitors.  It turns out that by a letter dated 5 November 2010, GYMC had written to the Defendant’s former solicitors (Hampton Winter & Glynn) to provide them with information and documents concerning the transfers.  It is clear that the same information and documents could have been provided to the Plaintiff’s solicitors in response to their letter of 22 December 2010.  It has also raised grave doubts in my mind on the veracity of the allegation that the relevant files concerning the transaction had been warehoused away at the time when GYMC received the letter of the Plaintiff’s solicitors.  Be that as it may, it is clear that GYMC has not shown itself to be impartial in their treatment of the Plaintiff’s and the Defendant’s solicitors.  Their behaviour clearly shows that they harbour a large measure of bias against the Plaintiff, despite the fact that the Plaintiff was, as admitted by Lau, the client of GYMC in respect of the 1999 transaction (and indeed it was the Plaintiff who paid all the legal costs of GYMC in 1999).

89.  Returning to the crucial issue mentioned above, I note that by a letter dated 5November 2010, GYMC wrote to the Defendant’s former solicitors and stated, inter alia, as follows:

“We recorded that both [the Plaintiff] and [the Defendant] attended our office several times from 10^th September 1999.

The [Plaintiff] requested us to transfer the [Properties] to [the Defendant] by way of gift and after drawing to their attention of the possible implications of the Bankruptcy Ordinance, [the Plaintiff] agreed to transfer the [Properties] to the [Defendant] by way of sale although the properties were in fact meant to be gifts to the [Defendant].” (emphasis added)

90.  I must say that, coming from the mouth of a firm of solicitors, I have found the allegation in the letter (as underlined above) to be surprising, to say the least.  If indeed GYCM truly believed that the Plaintiff intended to make a gift to the Defendant, it is difficult to see how they could bring themselves to effect the transaction as though it was a sale and purchase (or to be more precise, to give it the appearance of a sale and purchase) 

91.  This allegation in GYCM’s letter of 5 November 2010 obviously raised eyebrows and I have paid close attention to the evidence of Wong and Lau to see if there is any factual basis for the allegation that the Plaintiff intended to make a gift of the Properties to the Defendant.  

92.  There was an attendance note prepared by Lau (for each of the Properties).   In each of these attendance notes, Lau wrote, inter alia, as follows:

“Was informed by clients that they are mother and daughter and that due to the age of Madam Suen Shu Tai, she would like to transfer [the Properties] to her daughter by way of Deed of Gift etc.”

93.  As the attendance notes are contemporaneous documents to the transaction, they are normally worthy of great weight.  However, I do not find the attendance notes to be helpful in my resolution of the issue of intention.

94.  It is clear from the evidence that during the short meeting that Lau had with the Plaintiff (and the Defendant), Lau had never explored with the Plaintiff her intention in transferring the Properties to her daughter.  Lau had not asked the Plaintiff (or the Defendant) any question relevant to intention, and she knew nothing at all about the background and the circumstances which led the Plaintiff to instruct GYCM to effect a transfer of the Properties to the Defendant’s name.  The reference in the attendance notes to the age of the Plaintiff as a reason for wanting to make the transfer is plainly incorrect.  No witness before me has ever suggested that either the age of the Plaintiff was a reason for the transfers at all.  In particular, the Defendant has not suggested that in 1999, the Plaintiff was concerned with her age, or that the age factor played any role at all in the transaction.  As I pointed out above, in 1999, the Plaintiff was enjoying good health, and I have already found that if Tam had not threatened to claim back the Properties from the Plaintiff, this idea of transferring the Properties to the Defendant would not have been raised at all.

95.  Accordingly, I place no weight at all on the attendance notes.  I find that the attendance notes were prepared by Lau in this way simply because she had assumed that by instructing her to transfer the Properties to the Defendant without any payment by the Defendant, the Plaintiff was making a gift to her daughter.  In the circumstances of the present case, that was not so.  Lau was wholly unaware of what had motivated the Plaintiff to instruct her to make the transfers.

Conclusion on the issue of gift

96.  For the reasons above, I have no doubt that, on the evidence before me, when making the transfers to the Defendant, the Plaintiff did not intend to gift the Properties to her.   Accordingly, I hold that the transfers of the Properties were not by way of gift, and the Defendant holds the Properties as resulting trustee for the Plaintiff, she not having paid any consideration for the transfers.

97.  I have come to the above conclusion on the evidence without reliance on any presumption. Accordingly, if I am correct in holding that the presumption of trust applies, my conclusion on the evidence fortifies the effect of that presumption.  If I am wrong in holding that the presumption of trust applies, and that contrary to my judgment, the presumption of advancement applies instead, I would have little hesitation in holding that the presumption of advancement has been rebutted in the present case.  Either way, my conclusion is the same.

Pleadings

98.  There is a point of pleadings which I think I should deal with before I leave this part of the Judgment.  Towards the end of her submissions in closing, Ms Chan complained that in the Amended Statement of Claim, the Plaintiff has never expressly pleaded a case of resulting trust.  The prayers seek a declaration for setting aside the Assignment on the ground of undue influence, fraud (the allegation of fraud was expressly abandoned by Ms Tjia at the beginning of the trial) and misrepresentation.  A declaration was prayed by the Plaintiff that the Defendant holds the Properties as constructive trustee – as opposed to resulting trustee – of the Plaintiff

99.  I do not think that Ms Chan’s complaint is justified.  It is true that the term “resulting trust” was never used or pleaded in the Amended Statement of Claim, but the Plaintiff has pleaded the fact that she had never received any money or other consideration for the transfers (paragraph 5(g) of the Amended Statement of Claim).  The fact that the transfers were made without consideration (which is not disputed) would be sufficient to give rise to a resulting trust, unless it can be shown that the transfers were made by way of gift – the burden of proving which rests with the Defendant.

100.  As Lord Denning held in Re Vandervell’s Trust (No.2) [1974] Ch 269 (at 321G-322B):

“[Counsel for the Plaintiff] stressed that the points taken by [the defence counsel] were not covered by the pleadings. He said time and again: “This way of putting the case was not pleaded.” “No such trust was pleaded.” And so forth. The more he argued, the more technical he became. I began to think we were back in the bad old days before the Common Law Procedure Acts 1852 and 1854, when pleadings had to state the legal result; and a case could be lost by the omission of a single averment… All that has been long swept away. It is sufficient for the pleader to state the material facts. He need not state the legal result. If, for convenience, he does so, he is not bound by, or limited to, what he has stated. He can present, in argument, any legal consequence of which the facts permit. The pleadings in this case contained all the material facts. It does appear that [the defence counsel] put the case before us differently from the way in which it was put before the judge: but this did not entail any difference in the facts, only a difference in stating the legal consequences. So it was quite open to him.”

101.  More recently, in Lau Wing Hong and others v Wong Wor Hung and another [2006] 4 HKLRD 671, at 711H-712B, Recorder McCoy SC remarked that:

“… it would be unnecessarily demanding to require the party to plead in the prayer every precise possible variation of the underlying factual dispute that could ultimately found to be proved… The real test is whether there is genuine prejudice caused by this ambulatory approach… The pleadings set out the material facts and legal consequences which are sought to be drawn from those facts. A party is not precluded at the trial from asking the court to draw different legal consequences from the pleaded facts.”

102.  I respectfully agree with the remarks of Lord Denning and Recorder McCoy.

103.  There is no substance to Ms Chan’s complaint.  The Defendant’s case, as pleaded in the Defence and Counterclaim, is that the transfers were intended to be “outright gifts so as to benefit the Defendant…” (see, paragraph 8(a) of the Defence and Counterclaim).  It must be clear to the Defendant that if the Court rejects her contention that the transfers were outright gifts, she would be held to be holding the Properties as resulting trustee as she had not paid any consideration for the transfers.  Resulting trust as a possible legal consequence arising from the material facts pleaded in the pleadings should be well known to the Defendant or her legal advisers.

104.  For these reasons, I am unable to accept Ms Chan’s objection based on the pleadings.

UNDUE INFLUENCE

105.  Having come to the conclusion above, there is no further need for me to consider the issue of undue influence.  If the Plaintiff never intended to make a gift to the Defendant, there is obviously no question of her being unduly influenced to make such a gift.

106.  However, in deference to the arguments made by counsel on this issue, and just in case I am wrong in holding that the Plaintiff did not intend to make a gift to the Defendant, I would briefly set out my view on the issue of undue influence.  The discussion below is made on the assumption that contrary to my judgment above, the Properties were indeed transferred by way of gift.  For convenience and the purpose of discussion, in the paragraphs below I will refer to this assumed (but in my judgment non-existing) gift simply as “the gift”.

107.  The law on undue influence has been admirably summarised by Recorder Ma SC (as he then was) in the case of Bank of China (Hong Kong) Ltd v Wong King Sing & others [2002] 1 HKLRD 358.  I have also been referred to a number of well-known cases, including Barclays Bank Plc v O’Brien [1994] 1 AC 180 and Royal Bank of Scotland Plc v Etridge (No.2) [2002] 2 AC 773. The relevant principles are now well-settled, and it serves little purpose for me to set them out again in this Judgment.

108.  There is no evidence before me of any actual undue influence.  Insofar as the Plaintiff’s case is based upon actual undue influence, it cannot, in my judgment, get off the ground at all.

109.  Ms Tjia relies on what is sometimes called the “Class 2B” type of presumed undue influence.  She argues that the relationship between the Plaintiff and the Defendant was one in which the Plaintiff reposed such a degree of trust and confidence on the Defendant that undue influence is presumed as the transaction concerned in this case was not one that could be explicable by the relationship of the parties.

110.  In my judgment, Ms Tjia’s case based on undue influence is fraught with great difficulties.  Leaving aside the question whether the transaction was one that could be explicable by the relationship of the parties, I do not think that the evidence shows that the relationship the Plaintiff had reposed such trust and confidence on the Defendant that it could fairly be said that the Defendant had acquired an ascendancy or domination over her.  In this regard, the only matters that Ms Tjia could point to in support of her argument on presumed undue influence was that the Plaintiff was illiterate, old and that the Defendant was her only child living in Hong Kong. These matters are far from being sufficient to establish a Class 2B case.  The evidence shows clearly that despite her old age and illiteracy, the Plaintiff was quite capable of leading an independent life.  For many years, she had been living apart from her daughter in the Flat (the Defendant never lived there), and she was able to take care of her own daily needs.  She dealt with the tenancy matters herself and collected the rentals from the tenants after Tam had given her the Properties.  There is nothing to show that she had been heavily dependent on her daughter, let alone in making important decisions in her life.  From time to time she would travel to China (and return to Hong Kong) by herself, and she did not require any assistance or the company of the Defendant in these travelling (except on one occasion in August 2002, when the Defendant accompanied the Plaintiff to go to China).  When the Plaintiff worked for the Defendant to help her take care of her children, she did not work for free – the Defendant paid her $500 per month for helping to take care of her children.

111.  In Court, the Plaintiff has demonstrated herself as having a pretty strong personality, and a person with an independent mind.  For her age, I think she was also quite intelligent.  Certainly she did not appear to me to be a person who would just listen to her daughter.  I do not consider that the evidence in this case has established a case of presumed undue influence in the Class 2B sense.

112.  It follows that I would reject the argument of Ms Tjia on undue influence if I had held that the Plaintiff did intend to make a gift to her daughter.  If the Plaintiff did intend to make a gift, she would have formed that intention freely as there is nothing to show that she had been unduly influenced by the Defendant.

MISREPRESENTATION

113.  Again, given my conclusion on the intention of gift, it is not necessary for me to deal with Ms Tjia’s argument on misrepresentation.

114.  In any event, the case of the Plaintiff based on misrepresentation is even weaker.  Ms Tjia argues that as Tam never did pursue his claim to recover the Properties from the Plaintiff, the Defendant must have made a false representation to her when she told her about Tam threatening to claim back the Properties.  Plainly that does not follow.  Tam was not called to give evidence at trial and there is nothing to show that in 1999 the Defendant was misrepresenting to the Plaintiff as to Tam’s intention to claim back the Properties from her.  That Tam did not in fact pursue the claim subsequently does not show that he did not have the intention in 1999.  It is not difficult to imagine many reasons why Tam might choose not to pursue the claim (he might not have the money to fund the litigation, his heath might have deteriorated seriously, his relationship with his concubine might have fallen foul etc.). It is not for this Court to speculate on such matters, but it is clear to me that there is simply no evidence to establish that the Defendant had misrepresented Tam’s intention to the Plaintiff in 1999 to have caused the Plaintiff to transfer the Properties to her.

CONDITIONAL GIFT

115.  As I have held that there was no intention to make a gift, the issue of conditional gift does not arise at all.

116.  In any event, I would reject the submission of Ms Tjia based on conditional gift.

117.  The argument on conditional gift was based on the alleged Promises. In paragraph 5(b) of the Amended Statement of Claim, it was pleaded that the Defendant had promised the plaintiff the following (i) she would support the Plaintiff’s living; (ii) the Plaintiff would be allowed to live in the Flat for the rest of her life; (iii) a domestic helper would be hired to take care of the Plaintiff; (iv) a proper burial would be given to the Plaintiff after her death.

118.  At trial, Ms Tjia suggested that as the Defendant had failed to fulfil the alleged Promises, any gift of the Properties would have failed.  The suggestion, I must say, was not made with much force; and she had devoted relatively little time and effort in her submissions on this point.

119.  It is not clear why these alleged Promises, even if they were made, would become the conditions of the gift (assuming the transfers were gifts). There is no pleading in the Amended Statement of Claim that the alleged Promises were conditions for the gift.  It is one thing to allege that the Defendant had made promises to the Plaintiff, it is quite another to allege that the gift was conditional upon any or all of the promises made.  If conditional gift is alleged, it is incumbent on the part of the Plaintiff to plead the material facts relied upon for the allegation. That has not been done.  The Amended Statement of Claim merely alleged that the Defendant had “failed to support the Plaintiff’s living and take care of the Plaintiff as promised.” (see, paragraph 7 thereof).

120.  I do not think that on such pleadings, the Plaintiff is entitled to argue conditional gift. 

121.  In any event, even if the Plaintiff can argue conditional gift, her evidence falls far short of proving it.  The Plaintiff’s evidence on the alleged Promises made by the Defendant was vague and inconsistent. The evidence relating to the alleged promise for the hiring of a maid and the payment of a monthly sum of $3,000 to the Plaintiff, in particular, is very unsatisfactory. According to her own witness statement, the Plaintiff claimed that the $3,000 monthly payment was only promised to her in 2007.  At one stage of her evidence, the Plaintiff told me that the Defendant had never made the promise to let her stay in the Flat until death.  Moreover, although the Plaintiff had repeatedly emphasized the alleged Promises, I note that she has not given evidence to the effect that the transfer of the Properties were conditional upon the alleged Promises.  It is also not clear whether all the alleged Promises were made at the time when the Plaintiff offered to transfer the Properties to the Defendant.

122.  As Ms Chan rightly pointed out, if these alleged Promises were indeed conditions of the gift, the fact that the Defendant did not fulfil the alleged Promises would have been well known to the Plaintiff years ago.  It is difficult to see why the Plaintiff would have waited for so many years to complain about the breach of the conditions for the gift. I agree with Ms Chan on this point.  This part of the Plaintiff’s case seems to me to be quite unreal.

123.  If, contrary to my finding, there was in fact a gift of the Properties to the Defendant, I hold that the Plaintiff has not made out a case of conditional gift.      

LIFE INTEREST

124.  I need not spend much time on this.  The claim for life interest in the Properties only appears in the prayers of the Amended Statement of Claim. No factual or legal basis has been pleaded in the Amended Statement of Claim save for the bare allegation that the Defendant had allegedly promised the Plaintiff that she “might continue to live in the Flat for the rest of her life”.  It is not clear how the promise, even if it had been made, would give the Plaintiff a life interest in the Property. It is also not clear what exactly is the life interest that is claimed.  Is it some kind of irrevocable licence to live in the Flat for life, or is it some kind of proprietary interest that goes beyond an irrevocable licence? I have already noted that it has not been pleaded in the Amended Statement of Claim that any of the alleged Promises were conditions of the gift, and if so, how they became such conditions.  No estoppel or any other grounds have been pleaded.  Nor has Ms Tjia made any attempt in her closing submissions to make good this claim.  As pointed out above, at one stage of her evidence the Plaintiff told me that the Defendant had not made the promise to let her stay in the Flat until death.   

125.  I have no hesitation in rejecting the claim for life interest.

ORDER    

126.  For the reasons given above, I hold that there was no gift of the Properties by the Plaintiff to the Defendant.  However, if I am wrong on that, I would hold against the Plaintiff on all her other claims based on undue influence, misrepresentation, conditional gift and the assertion of life interest.

127.  I would accordingly make a declaration that the Properties were held by the Defendant as trustee (resulting trustee) for the Plaintiff.

128.  As I have held against the Plaintiff on the issue of undue influence and misrepresentation, and I also reject the contention based on conditional gift, I do not see any basis for setting aside the transfers.  The transfers are not vitiated.  It is only that the Defendant only acquired the legal title while the beneficial interest in the Property is retained by the Plaintiff.

129.  It has been made known to this Court that the Defendant has purportedly sold the Flat to Land Crown, and I understand that the proceeds of the sale are now being held by GYCM as stakeholders.  Land Crown is not a party to the proceedings and I have not heard from them regarding any title or rights that they may assert over the Flat.  In these circumstances I do not consider that it would be right for me to order the Defendant to re-convey the Flat to the Plaintiff without ascertaining the interests of possible third parties.

130.  In any event, as I am of the view that the Assignments are not vitiated and I have refused to set them aside, it is up to the Plaintiff (no doubt with the benefit of the advice of her legal representatives) to apply for any further directions in regard to the Properties, if agreement is not reached between the parties. For the avoidance of doubts, I give liberty to the parties to apply for further directions.

131.  I see no reason why I should not order the Defendant to provide an account of the dealings with the Properties. At this point I would not make any order for payment.  That can wait until the account has been rendered and the parties may well be able to have these matters sorted out, based on the findings made by me in this Judgment, without the Court’s intervention.  If they cannot agree, they can always make applications to the Court for further directions, or for any further accounts or enquiries.

COSTS

132.  In the light of my conclusions above, I am minded to order that the Defendant pay 70% of the costs of the Plaintiff, to be taxed if not agreed.  I make an order nisi to that effect.

133.  The Plaintiff’s own costs are to be taxed in accordance with Legal Aid Regulations.

(H Wong, SC) Recorder of the Court of First Instance of the High Court