CHEN MIN LI v. YIU CHING SHU

HCA 12244/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 12244 OF 1999

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J U D G M E N T

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1. In this action, the Plaintiff sues her former father-in-law for the recovery of her alleged share of sale proceeds of a property.

2. The case turns largely on the facts. I shall summarise respectively the cases of the Plaintiff and the Defendant according to the evidence that was presented before me at the trial. Both sides raised and went into many factual matters, details and side issues. Whilst they have all been taken into account by me, I do not find it necessary to mention or go into detail of all this in this judgment. In the following paragraphs, I will simply set out the main case of each party respectively.

The Plaintiff's case

3. The Plaintiff alone gave evidence at trial. The Plaintiff was born and brought up in Shanghai. She married the younger son of the Defendant, Mr Yao Jing Guo, in Shanghai in 1985. In this judgment, I will, for the sake of convenience, refer to Mr Yao as the "Husband", although the Plaintiff obtained a divorce from her ex-husband in 2001.

4. As I said, the Husband is the younger son of the Defendant. His mother is Madam Zhou Shi Fen ("Madam Zhou"). The Defendant's eldest son is Mr Yao Jing Lun.

5. The Defendant and his wife are also Shanghainese. The Defendant himself is the younger son of the late Mr Yao Xing Cai whom I will refer to simply as the "Grandfather" in this judgment for the ease of reference. The eldest son of the Grandfather, i.e. the elder brother of the Defendant, is a gentleman called Mr Yao (or Yau) Ting Fong whom I will refer to as the "Brother".

6. All the persons thus far mentioned were/are Shanghainese. According to the Plaintiff, the Grandfather and the Brother used to do business together in Shanghai and Macau, and they came to Hong Kong in the 1950s. The Grandfather was apparently a very successful businessman and out of his business profits, he purchased a number of properties, including the suit property known as Flat 1517, 15th floor, Sincere House, 83 Argyle Street, Kowloon. For reasons of their own, the father and son decided to register all these properties in the name of the Brother.

7. The Defendant and his family, on the other hand, lived in Shanghai until 1979 and 1982 when the Defendant's wife and the Defendant respectively immigrated to Hong Kong to join the Grandfather and Brother.

8. As I said, the Plaintiff and the Husband married in 1985 in Shanghai. In November 1986, the couple were on a short visit to Hong Kong. Naturally they stayed with the Grandfather (and his wife - the "Grandmother"), the Brother and his wife, as well as the Defendant and his wife who were all living together at that time in one of the properties acquired by the Grandfather in Mei Foo Sun Chuen.

9. It is the Plaintiff's case and evidence that during that visit to Hong Kong, the Grandfather told the Husband and the Plaintiff that the Husband could apply to immigrate to Hong Kong on the ground that his father (i.e. the Defendant) did not have any children living in Hong Kong - the elder brother of the Husband had emigrated to the United States for quite some time by then; and if the Husband and the Plaintiff could manage to immigrate to Hong Kong, he (the Grandfather) would repossess one of his properties and give it to the couple to live there. The Grandfather told the couple that he was making the offer because the Husband was his grandson. According to the Plaintiff, at that time the Grandfather did not specify which property would be given to the couple.

10. According to the Plaintiff, apart from the Grandfather and the Grandmother as well as she and her husband, no one else was present when the promise or offer was made by the Grandfather.

11. The Husband eventually applied successfully to emigrate to Hong Kong in 1988. The Grandfather passed away the following year in 1989. Prior to the death of the Grandfather, the Plaintiff and her husband had learned from one of the letters written by the Husband's mother to them while they were still living in Shanghai that the Grandfather had caused one of his properties (registered in the name of the Brother as explained above) to be transferred by the Brother to the Defendant as his family's new residence. That took place in 1987 and I would simply refer to this property as the "King's Road property". So when the Husband came to Hong Kong in 1988, he joined his parents and lived in the King's Road property.

12. The Plaintiff, however, remained in Shanghai in the meantime, as her application to join her husband in Hong Kong was not to be approved until 1991. According to the Plaintiff, in 1989 after the death of the Grandfather, she learned from the Defendant that during the lifetime of the Grandfather, there had been a proposal to divide up the Grandfather's properties, but the Brother did not agree to the suggestion.

13. In any event, the Plaintiff successfully applied to immigrate to Hong Kong in 1991. The couple together with their only daughter who was born in 1988 resided together with the Defendant and his wife in the King's Road property. The Husband worked as a Mainland real estate salesman whereas the Plaintiff, a professional nurse in the Mainland, worked as a nurse-aide in St Paul's Hospital.

14. In March 1992, according to the Plaintiff, the Defendant said to the Plaintiff and the Husband that the Brother was going to emigrate to Canada and he would like to distribute some properties amongst the family members in Hong Kong before his departure. So the couple were told that one property would be given to the Defendant, one to the Defendant's wife Madam Zhou, one to the Plaintiff and the Husband, and the fourth one to the Defendant's eldest son. However, as the eldest son of the Defendant was then in the United States, the property would be given to the Defendant instead who would hold the property and look after his eldest son's interest. The Defendant told the couple that he would be responsible for making all arrangements to effect the transfer.

15. According to the Plaintiff's evidence, on 5 March 1992, she was told to attend a solicitors' firm's office in Kowloon of which a relative of her mother-in-law, namely, Mr Ricky Ng, was a partner. When she arrived together with her husband, she realised that the purpose of the visit was to sign the relevant legal documents to effect the transfer. So far as the Plaintiff and the Husband were concerned, they were required to execute a Deed of Gift whereby the Brother "in consideration of the natural love and affection" of his for the couple assigned the suit property to the couple as joint tenants. Mr Ricky Ng simply told the couple that the property was a gift by the Brother to the two of them.

16. It is common ground that on that day, apart from the Deed of Gift, the Brother also assigned by way of gift three other properties, two in favour of the Defendant (on account of himself and his eldest son as per the Plaintiff's understanding and evidence) and one in favour of the Defendant's wife.

17. According to the Plaintiff, all this including the gift of the suit property to the couple, was part of the family property arrangement initiated and effected by the Brother prior to his departure for Canada. The Plaintiff also regarded the gift of the suit property as a fulfilment of the wish or promise of the Grandfather made to her and her husband during their short visit to Hong Kong in 1986 as described above. In other words, it is the Plaintiff's case that she and her husband were the beneficial owners of the suit property.

18. This being the case, the Plaintiff strenuously denied in evidence suggestions coming from the side of the Defendant that the suit property was only transferred to the couple to enable them to apply for a tourist visa to the United States (i.e. for the purpose of convincing the US Consulate that the couple had a substantial asset in Hong Kong and would not over-stay in the United States for any purpose). The Plaintiff accepted that in fact prior to her immigration to Hong Kong, her husband had unsuccessfully applied for a tourist visa to the United States, but she said that the transfer of the suit property to the couple was not related to their intended application for such a visa. The Plaintiff pointed out in evidence that the timing was simply incorrect: the couple together with their daughter did apply for successfully a tourist visa to the United States in early July 1993 and the family did travel together with the Defendant and his wife to the United States that summer to visit the Defendant's eldest son there; but all this took place almost one year and four months after the Deed of Gift relating to the suit property was made.

19. During evidence, the Plaintiff also denied all suggestions that because of her background she was particularly sensitive to the 1997 issue and that she very much wanted to go to the United States. The Plaintiff said in evidence that in fact apart from the 1993 trip and a subsequent trip in 1995, she never went to the United States and she never applied for any immigration visa of the United States.

20. At the time when the suit property was transferred by the Brother to the couple, it was tenanted. According to the evidence of the Plaintiff, after she and her husband became the owners of the property, they allowed the Defendant to receive the rent from the suit property. The Plaintiff explained that they did this because the couple otherwise made no financial contribution towards the household expenditure of the King's Road property and moreover, they as new immigrants were inexperienced in owning property in Hong Kong, and the Defendant had offered to take care of the management of the property and the payment of outgoings including rates and management fees on the couple's behalf. The Plaintiff explained that at that time, the parties' relationship was good and the Defendant was very good and kind to her. The Plaintiff said that on the other hand, the property tax relating to the suit property was paid by her and her husband personally.

21. According to the Plaintiff, the Husband's relationship with his parents began to deteriorate in late 1993, so much so that the Plaintiff suggested to her husband and the Defendant respectively that the younger couple should move out of the King's Road property to minimise fiction. According to the Plaintiff, it was the Defendant who suggested to her that she and her family could move to live in the suit property, but they had to persuade the tenant to move out first.

22. This the couple attempted unsuccessfully to do sometime in 1994. Eventually Mr Ricky Ng was asked to write a solicitors' letter to the tenant and this resulted in negotiations between the tenant and the Plaintiff. The tenant asked for the payment of $50,000.00 as compensation, which was accepted by the Defendant when he was told by the Plaintiff about the tenant's request. Eventually the money was paid by the Defendant; and on 1 November 1994, vacant possession was recovered by the Plaintiff and her husband.

23. Initially, according to the Plaintiff, the Husband thought that he could personally carry out renovation work on the property which was rather old and required substantial renovation, but eventually found the task too daunting for him to undertake personally. The idea of selling the property was then raised by the Husband. In the meantime, the Grandmother passed away in around the end of 1994.

24. Then sometime in March 1995, the Plaintiff was told by the Defendant that the Husband had already agreed with a buyer for the sale of the property. The Defendant explained to the Plaintiff that in his opinion, it was better to sell the property which was old and required substantial renovation and to acquire a property in Hong Kong Island as the new residence of the Plaintiff and her family. He explained that buying a property in Hong Kong Island had the advantage of convenience because both the Plaintiff and her daughter were working and studying respectively in Hong Kong Island. The proceeds of sale could be used to acquire a new property. Most importantly, the Defendant told the Plaintiff that after the sale of the property, he would use the proceeds of sale to buy a property in Hong Kong Island for the couple. The Plaintiff who was then still on a very good relationship with the Defendant believed the Defendant's word and sincerity and therefore agreed to the sale.

25. The sale was again conducted through Mr Ricky Ng's firm. At one stage, according to the evidence of the Plaintiff, the Husband procured the Plaintiff to sign a document agreeing (unknowingly) to the Husband alone receiving the deposit and balance sale proceeds under the sale and purchase although both he and the Plaintiff were the joint tenants. This was accidentally discovered by the Plaintiff who did not agree to it. Eventually, a joint bank account was opened for the purpose of receiving the sale proceeds. Completion took place in April 1995; and it is common ground that by 3 separate transfers of money, at least two of which from the joint bank account of the Plaintiff and her husband, the initial deposit of $50,000.00, the further deposit of $158,000.00 and the net balance of sale proceeds in the sum of $1,859,846.00 were transferred by the couple to the Defendant, on the understanding that the Defendant would use the sale proceeds to buy a flat in Hong Kong Island in favour of the couple.

26. According to the Plaintiff, after the sale of the suit property, the couple did visit estate agents in the North Point area where they wanted to buy their new home to look for suitable properties, but they found the flats to be rather expensive. According to the Plaintiff, in mid 1995, the Defendant advised the couple not to hurry, saying that in his opinion, the then property market price was unreasonably high and would likely come down by 1997, and they should be careful and not rush into any quick deal. The Plaintiff said in evidence that by then the Husband's relationship with his parents had improved and she saw no urgency in moving out, so she agreed to the advice of the Defendant.

27. The Plaintiff accepted in cross-examination that at around that time, the Defendant had caused a sum of $100,000.00 to be transferred into the couple's joint account apparently for their use. The Plaintiff said she only learned of this from her husband, and when asked by the Plaintiff, the Defendant's wife, Madam Zhou, did not elaborate on the reason of transfer. The Plaintiff did not agree that they should make use of the money, as she felt the couple in fact owed the Defendant and his wife quite a lot by staying together with them without making any financial contribution, and as the Defendant had already promised to make use of the sale proceeds to buy the couple a new flat. So the money was eventually transferred back to the account of the Defendant.

28. According to the Plaintiff, soon thereafter, she heard rumours that the Husband who was then spending more and more of his time in Shanghai apparently for work had a mistress there. By then, there had already been incidents of heated arguments between the couple and allegedly the Husband had once beaten her (for which the Husband had allegedly paid her $50,000.00 as "compensation"). According to the Plaintiff, all this was too much for her and after leaving letters to her husband, her daughter and her parents-in-law, she flew alone to New York, leaving behind her husband and daughter in Hong Kong. Eventually, the Husband managed to speak to her over the telephone in New York and begged her to return. During their telephone conversation, the Husband mentioned about buying a flat in Hong Kong and reiterated his belief that his father (i.e. the Defendant) would honour his promise to buy the couple a flat when the time and price were right. So the Plaintiff returned to Hong Kong, but according to her, she noticed that since then her relationship with her in-laws was not as good as before.

29. Then came November 1996 and the Plaintiff again heard rumours of her husband having a mistress in Shanghai. She returned to Shanghai and apparently verified the rumours as true. She immediately sued for divorce in Shanghai. The Husband got hold of her and managed to persuade her to drop her divorce petition. He promised to leave his mistress and he also promised that after a separation period of 6 months, he would buy a property in Hong Kong for the family to reside in as their new matrimonial home. A separation agreement was executed in Shanghai and there was a clause in the agreement relating to the Husband's promise "to borrow or buy" a flat in Hong Kong after the separation period.

30. After the expiry of six months, the Husband did not buy any property in Hong Kong and the Plaintiff renewed her petition for divorce. That petition in Shanghai was dismissed by the court on the ground that both parties were domiciled in Hong Kong and therefore the court in Shanghai had no jurisdiction to hear the petition. The judgment referred to the Husband's argument that the couple had "a large amount of property" in Hong Kong. An appeal against the dismissal of the divorce petition failed. There was a period of time in between 1998 and early 1999 when the Plaintiff returned to live in the King's Road property. During a face-to-face conversation with the Defendant in December 1998, according to the Plaintiff, the Defendant alleged for the first time that the suit property had been transferred into the joint names of the Plaintiff and her Husband solely for the purpose of enhancing their chances of successfully applying for a visa to the United States. According to the Plaintiff, by then she had applied for legal aid to file a divorce petition in Hong Kong as well as to recover her share of the sale proceeds from the Defendant. It was in that context that the Defendant first put forward the excuse for not returning her share of the sale proceeds of the suit property to her.

31. Eventually, the Plaintiff's application for legal aid was successful and as I said in 2001, the Plaintiff successfully obtained a decree for divorce from the District Court. Moreover, the present action was commenced in 1999 and in the present action, the Plaintiff sues for her due share of the sale proceeds of the suit premises.

Ricky Ng's evidence

32. Mr Ricky Ng, the solicitor, gave evidence at trial. Mr Ng is related to the Defendant. His father-in-law and the Defendant's mother-in-law are brother and sister; and in other words, his wife and the Defendant's wife are cousins. Moreover, as the wife of the Defendant and the wife of the Brother are sisters as well, so in other words, Mr Ng's wife is the cousin of the respective wives of the Defendant and the Brother. However, according to the evidence, their relationship cannot be said to be close, and it remains on a general social level.

33. Mr Ng once worked as a judicial clerk in the District Court in the 1970s; he was admitted as a solicitor in the United Kingdom in 1980 and a solicitor in Hong Kong in 1981. He became a partner in a solicitors' firm in the 1980s and eventually started his own firm together with some partners in 1991. In 1994, he started practising as a sole practitioner. In 2002, he sat as a temporary magistrate in Tsuen Wan Magistracy for a period of time.

34. According to Mr Ng, in February 1992, the Brother and his wife together with the Defendant and his wife attended his office. The reason of the visit was that the Brother wanted to give 4 properties including the suit property to the Defendant. According to Mr Ng's impression, the Brother was leaving it to the Defendant and his wife to decide who should take up the assignment of the properties; Mr Ng explained to the two couples the downside of using a deed of gift to accomplish the transfer, but he said the Brother insisted on using a deed of gift to effect the transfer. He got the impression that that might have something to do with Canadian tax, as the Defendant's wife had told him in the meeting that the Brother was emigrating to Canada very soon.

35. In the meeting, Mr Ng also advised the couples of the disadvantage of transferring all 4 properties in one go to the Defendant in terms of added liability for stamp duty. He explained as part of his advice that if the properties were transferred to different transferees, stamp duty could be reduced or avoided.

36. He said that after hearing his advice and after further discussions amongst themselves in Shanghainese which he could not quite understand, the Defendant and his wife put forward names as the suggested transferees for the 4 properties respectively. The proposed transferees included the Defendant, his wife, the Husband and the Plaintiff. The then suggestion was for the Defendant and his wife to hold some properties as joint tenants and the Husband and the Plaintiff to hold one property, i.e. the suit property as joint tenants. Mr Ng did not know whether all these names were put forward in response to his advice on stamp duty or not.

37. According to Mr Ng, upon learning of the Defendant couple's intention to transfer one of the properties to the Husband and the Plaintiff, he, in accordance with his usual practice, warned the Defendant and his wife that once the property was so transferred to their son and daughter-in-law, there might be difficulty in getting the property back subsequently.

38. Mr Ng explained in Court that he did not ask the Defendant couple whether they actually intended to give the property to their son and daughter-in-law as a gift. He found it improper to raise the question. Yet he was aware of the thinking of many Chinese parents that they could, after a (free) transfer of property in favour of their children, ask their children for the property back at any time; that was why he had developed this practice of warning the parents of the potential difficulty in getting the property back from their children subsequently, and that was what he did in the present case.

39. Mr Ng also told the Court that upon hearing his warning, the Defendant's wife replied that the Husband and the Plaintiff had previously failed in applying for a visa to the United States because they had no property in Hong Kong and therefore they would like to transfer one of the properties to them to facilitate their application for a visa. The Defendant's wife also added her belief that if she and her husband wanted to get back the property from their son and daughter-in-law, the latter would return the property to them. But there was no mention of when that (i.e. the "return" of the property) should happen.

40. Mr Ng explained in Court that upon hearing that, i.e. the Defendant couple's trust in their son and daughter-in-law, he saw no reason to pursue the matter any further. In particular, he said it never occurred to him that he should advise the Defendant couple to have or at least raise with them the option of having a declaration of trust executed by their son and daughter-in-law in their favour.

41. According to Mr Ng, in that first meeting, the Defendant couple did not make up their mind as to the identities of the transferees of the 4 properties. After that meeting, the Defendant couple went to his office again some days later and gave him a piece of paper in which they wrote down the names of the transferees for the 4 properties respectively, namely, the Husband and the Plaintiff as joint tenants for the suit property, the Defendant for 2 properties, and the Defendant's wife for the last property. Mr Ng simply followed their instructions and prepared the conveyancing documents. Eventually, 4 Deeds of Gift were executed between the Brother on the one hand, and respectively the Defendant, the Defendant's wife, and most importantly the Husband and the Plaintiff as joint tenants (in relation to the suit property), on the other.

42. Mr Ng said that on the occasion when the Husband and the Plaintiff attended his office to execute the Deed of Gift in relation to the suit property, it did not occur to him that he should inquire with the couple whether they agreed to return the property to the Defendant and/or his wife when required to do so. As I mentioned earlier, on the face of the Deed of Gift executed by the parties, it was a gift of the suit property by the Brother in favour of the Husband and the Plaintiff as joint tenants. Nothing was mentioned in relation to the Defendant couple's belief that they could require their son and daughter-in-law to return the property to them subsequently.

43. Mr Ng also said in evidence that in 1994, the Husband and his father, the Defendant, approached him relating to the recovery of vacant possession of the suit property from the tenant. Letters were written on their behalf and eventually vacant possession was recovered upon payment of compensation money to the tenant.

44. In 1995, the Husband telephoned Mr Ng and told him that he had contracted to sell the suit property. He was instructed to act for the vendors. Mr Ng prepared the conveyancing documents accordingly and obtained the title documents from the Defendant. Mr Ng could recall nothing unusual in relation to the signing of the formal Sale and Purchase Agreement by the Husband and the Plaintiff in his office. Mr Ng could recall nothing in relation to the authorization letter that the Plaintiff had once signed authorising the Husband to receive the further deposit and balance purchase price and the relevant correspondence, except that they were kept in his conveyancing file. He said he could not recall anything about the Plaintiff's accidentally discovering the true meaning of the authorization letter (written in English) in his presence, as alleged by the Plaintiff in her evidence.

45. But in relation to the occasion when the Assignment was executed, Mr Ng was able to tell the Court that initially the Plaintiff refused to execute the Assignment, and therefore Mr Ng saw the couple and discussed the matter with them. According to Mr Ng, apparently the Plaintiff was very unhappy with the sale. He asked her why she did not want to sign and the Plaintiff told him that she wanted to keep a sum of $500,000.00 out of the proceeds of sale which she would use as a down payment for the purchase of a property in the joint names of herself and her husband as their new home. She told Mr Ng that they could then pay off the mortgage by instalments and she and her husband could live in the new property happily together thereafter. Mr Ng said that the Husband was obviously embarrassed by the situation and he, i.e. the Husband, whispered in the ears of the Plaintiff that "This is Daddy's money". Mr Ng said he asked the couple to sort it out amongst themselves, and generally helped the Husband in persuading the Plaintiff to execute the Assignment which of course the couple were contractually bound to execute in favour of the purchaser. Mr Ng said to the Plaintiff that she could speak to her father-in-law in relation to her wish to keep $500,000.00 out of the proceeds for the purchase of a new property.

46. Mr Ng added that at one stage the Plaintiff threatened to divorce her husband if he did not accede to her request to keep $500,000.00 out of the sale proceeds for the purchase of a new property, but in the end, the wife backed down.

47. Mr Ng said the whole incident lasted about ten to fifteen minutes and eventually the Plaintiff agreed to execute the Assignment; and he felt relieved when the Plaintiff finally executed the Assignment. Mr Ng denied in cross-examination that all this never took place and the completion went ahead smoothly. (It is convenient to add here that this whole episode was denied by the Plaintiff when it was put to her during cross-examination.)

Ng Pui Kwan's evidence

48. Madam Ng Pui Kwan ("Madam Ng") is related to the Defendant and the Husband. Her husband and the Defendant's wife (Madam Zhou) are cousins. She is therefore the aunt of the Husband as well as the Plaintiff (prior to their divorce). She is a medical technician working in the Medical University in Shanghai. In three lengthy periods of time in the last decade, Madam Ng stayed in Hong Kong to work at the invitation of the Institute of Chinese Medicine, the Chinese University of Hong Kong. In fact, she first arrived Hong Kong to work here in December 1990, before the Plaintiff successfully immigrated to Hong Kong in early 1991.

49. The gist of Madam Ng's evidence is that because of her relationship with the Defendant's family, she became acquainted with the Plaintiff since her marriage to the Husband in 1985 in Shanghai. Madam Ng said in evidence that she liked the Plaintiff very much and they became good friends. Moreover, the two of them were in medical related fields (the Plaintiff was a nurse), and that gave them an extra common topic. Madam Ng said by the time the Plaintiff emigrated to Hong Kong, they had already become very close friends. She said whilst the Plaintiff was still in Shanghai, she had visited the Plaintiff very often, particularly during the time immediately after the death of the Plaintiff's first baby and the second time when the Plaintiff was pregnant.

50. During Madam Ng's first and second periods of stay in Hong Kong, i.e. between December 1990 and December 1991, and between April 1995 and October 1996, the two maintained contacts both by telephone as well as through visits. The close relationship continued until sometime in early 1996.

51. Madam Ng said in evidence that sometime in 1995, whilst the Defendant and Madam Zhou were on a visit to the States, she spent a night at the King's Road property at the invitation of the Plaintiff. Amongst the many things that the two of them chatted about, the divorce and the division of the proceeds of sale of a property of a brother-in-law of Madam Ng was mentioned. The Plaintiff then told Madam Ng that the Defendant was aware of that divorce and it alerted him to the possibility of the Plaintiff and the Husband divorcing each other, and as a result, the Defendant caused the suit premises to be sold and kept the proceeds.

52. Madam Ng said this was the first time she heard about the suit premises. She asked the Plaintiff about it, who told her that some time before, the Husband's application for a US tourist visa was unsuccessful, the reason being that he had no asset in Hong Kong. As the couple wanted to visit the States, they got the assistance of the Defendant who therefore had the suit premises transferred to the names of the Husband and the Plaintiff so as to facilitate the couple's intended application for the tourist visa. The application was successful, the two of them went to the States, and then the Defendant heard about the divorce of Madam Ng's brother-in-law, and eventually procured the sale of the suit premises.

53. Madam Ng said in evidence that the Plaintiff also told her that at the time of sale, she really wanted to buy the property herself; and when her mother and elder sister came from Shanghai to visit her, they could also have a place to stay in. However, she had no money; she had asked the Husband to speak to his father, but the Husband never did so.

54. Madam Ng said the Plaintiff also told her that she gave all the proceeds, to the very cent, to her father-in-law. After that, the Defendant gave each of his two sons and their spouses HK$50,000.00. The Plaintiff told Madam Ng that she did not take her HK$50,000.00 because she did not want to take a single penny from the Yao family.

55. Madam Ng also said in evidence that some time later, the Plaintiff mentioned to her that her relationship with the Husband was not good and she was thinking about having a divorce. Madam Ng said she tried to persuade the Plaintiff against a divorce. Madam Ng also said that on one occasion she also spoke indirectly about the subject to the Husband, seeking to persuade him to be a good husband. However, Madam Ng maintained during cross-examination that her attitude was that she should not get involved in the couple's dispute as this might do more harm than good, even though she was quite against the idea of a divorce.

56. Madam Ng said during cross-examination that her relationship with the Plaintiff became less close by early 1996. The Plaintiff no longer gave her telephone calls as before. On the other hand, she did not want to get involved in the marital difficulties of the couple. Madam Ng said there was an occasion in mid 1997 after she had already returned to Shanghai when the Husband asked her to accompany him to visit the couple's daughter who was studying in Shanghai as a result of arrangement made by the Plaintiff unilaterally.

57. Madam Ng said that after the visit, she received a lengthy telephone call from the Plaintiff who, amongst other things, asked her not to get involved in her quarrels with her Husband and her family affairs. Madam Ng said thereafter she had no further contacts with the Plaintiff.

58. Amongst other things, Madam Ng was cross-examined in detail about her relationships with members of the Yao family, as well as her relationship with the Plaintiff, including her knowledge of details of matters pertaining to the Plaintiff's case, such as the Plaintiff's application for a US visa, her trips to the States, the transfer of the suit premises in 1992, her quarrels with her husband, her divorce and so forth. She was also vigorously cross-examined on her claimed close relationship with the Plaintiff, as well as her claimed non-participation in the marital problems between the Plaintiff and her husband.

59. During cross-examination, Madam Ng added that on the night when the Plaintiff first mentioned to her about the suit premises, the Plaintiff also indicated to her, her intention of eventually taking her daughter back to Shanghai for education, thus suggesting some marital problems between the Plaintiff and her husband at that time. Madam Ng said she tried to persuade the Plaintiff to stick to her marriage.

60. Madam Ng was also asked in detail during cross-examination about the divorce of her brother-in-law. She clarified that although the brother-in-law and his then wife had talked about divorce for many years, the actual divorce, the sale of property and the division of the proceeds, apparently only happened in 1995 or 1996. She personally only heard of the idea of selling the property and dividing up the proceeds between the husband and wife after she came to Hong Kong for the second time in April 1995.

61. Madam Ng said she learned about the present action in 1999 when she came to stay in Hong Kong for the third time. She was only asked by the Defendant to write a statement in relation to the case in late 2001. She explained that she had some reasons to have a good recollection of what the Plaintiff had told her about the sale of the suit premises: first, throughout she had been under the impression that the relationship between the Plaintiff and her in-laws was harmonious, and it was only on that occasion that the Plaintiff described her father-in-law as being "contrived" (心計); secondly, the name of the building in question was the same as the name of a well-known beauty in ancient China (apparently this was a mistake made by Madam Ng - she mistook the Chinese name of the building "先施" (Sincere) as "西施", a famous beauty in ancient China); and thirdly, the Plaintiff's mention of her father-in-law giving his two children and their spouses HK$50,000.00 each and the Plaintiff's refusal to take the money was rather unusual and left her with a distinct recollection of what she was told.

62. As to the timing of the relevant conversation in question, all that Madam Ng could remember was that it took place when the weather was neither too cold nor too hot and when the Defendant and his wife were on a visit to the United States. She said at that time, the Plaintiff's mother and elder sister were not visiting Hong Kong. She could not be more exact.

63. Madam Ng also said during her long cross-examination that after learning about the court action, she and her sister-in-law once contacted the Plaintiff's mother to see if the matter could be resolved amicably but to no avail. As for the Plaintiff, she had lost her contacts.

The Defendant's evidence

64. The Defendant spent much time in the witness box and gave evidence on many matters, many of which in great detail. I would simply set out the gist of his evidence here.

65. The Defendant was born in 1929. He is the younger son of the Grandfather, and thus the younger brother of the Brother. He is a Shanghainese and until 1982, he worked and resided in Shanghai, whereas the Grandfather and Brother came to live in Hong Kong in 1952. Before they came to Hong Kong, the father and son did business in the Mainland.

66. Whilst the Defendant was still in Shanghai, he resided in a property purchased by his father many years ago. The Defendant came to Hong Kong in 1982 to join his father and elder brother, whereas his wife (Madam Zhou) had arrived several years earlier. The couple lived together with the Grandfather and the Brother as well as their respective families altogether in Mei Foo Sun Chuen after arrival in 1982 until 1987.

67. In the meantime, the younger son of the Defendant, i.e. the Husband married the Plaintiff in 1985. They used the former Shanghai residence of the Defendant as their matrimonial home. In fact, subsequently, the household registration of the Shanghai residence was changed from the Defendant to the Plaintiff. According to the evidence of the Defendant, this was only done upon the advice of the Plaintiff, in order to keep his entitlement to the residence just in case he would like to return to Shanghai in future. The Defendant regarded the Shanghai residence as belonging to him notwithstanding the change of registration.

68. In 1987, according to the Defendant, his elder brother happened to recover vacant possession of the King's Road property, one of his many properties in Hong Kong, and upon the suggestion of their father who was of the view that the living condition of the Defendant and his wife in the Mei Foo premises was rather poor, the elder brother gave the King's Road property to the Defendant by way of gift. Although the formal document said this was a sale for HK$300,000.00, the Defendant confirmed in evidence that no consideration was paid. It was a gift.

69. According to the Defendant, after his father came to Hong Kong, he no longer did any business. The Defendant was not clear about what his brother did for his living. According to the Defendant, his father did not bring much money or property to Hong Kong when he came in the early 50s. He said by 1992, the Brother had altogether nine properties registered in his name in Hong Kong. He was not sure about his brother's source of money for the acquisition of the properties.

70. The Defendant said that in late 1991 or 1992, his brother was about to emigrate to Canada and told him that he would make provision for him by transferring four properties, including the suit premises, to him. The Defendant said that because of poor health, since his arrival in Hong Kong in 1982, he had not been working and had been depending on his father and brother for his living. The father and sons were very close to each other, and his brother had taken care of him well.

71. The Defendant said after hearing his brother's generous offer, he discussed the matter with his wife and the Husband. The Husband asked him to cause one property to be transferred to his and the Plaintiff's joint names so as to facilitate their intended application for a visa to the United States, given that the Husband had failed in an earlier attempt to get a visa. The failure was thought to be due to the fact that he had no assets in Hong Kong. Further, the couple were new immigrants. It was believed that if they owned a property in Hong Kong, their chances of successfully obtaining a visa would be enhanced.

72. The Defendant agreed with his son's proposal, and he said in evidence that that was the only purpose or reason why he eventually procured his brother to directly transfer the suit premises to the Plaintiff and the Husband. He said that notwithstanding the legal registration of the couple as joint owners of the property, he regarded the suit premises as belonging to him.

73. The Defendant said his brother left the choice of the transferees entirely to him to decide. He also said that the matter was raised with Mr Ricky Ng, the solicitor, who advised him to be careful because it happened quite often that in this sort of transfers of property between parents and children, the parents would subsequently find it very difficult to ask their children back for the properties. The Defendant said that he had confidence in his younger son and after further discussion with his wife, eventually decided to instruct the solicitor to cause the suit premises to be transferred to the Plaintiff and her husband. The Defendant said that throughout his intention was to sell the property after three years - the period within which, so he had been given to understand, the property could not be sold given that the transfer was by way of gift, and to use the proceeds to support his living. He said he had told both the Husband and the Plaintiff about his intention.

74. The Defendant said that after the transfer of property, the existing tenant began to pay rent into a bank account of his son, the Husband, who in turn gave the rentals to him. The Defendant said that with some exceptions (during the time when his mother was seriously sick and he had to take care of her), he was the person who wrote all the rental receipts in relation to the suit premises, just in the same way as he did with the three other properties that his elder brother had transferred to him. He said when he was busy with taking care of his mother, his son, i.e. the Husband, took care of the rental receipts.

75. The Defendant said that he was responsible for paying all outgoings relating to the suit premises.

76. The Defendant said in 1994, he asked the Husband to take steps to recover possession of the suit premises, as the three-year period would expire the following year, and he wanted to dispose of the suit premises as planned. This, his son did by instructing Mr Ricky Ng. Eventually, agreement was reached for the return of vacant possession of the suit premises to him upon payment of compensation in the sum of HK$50,000.00. The Defendant said that the money was paid by him by two instalments.

77. The Defendant said that after recovery of possession of the suit premises, in early 1995, he asked his son to sell the property for him. A buyer was eventually found, the price was found to be satisfactory, and the sale was effected through the same solicitor. The net proceeds of sale comprising the initial deposit, the further deposit and the balance payment were all handed to him or transferred to his own bank account. The Defendant said that the Plaintiff was aware of the sale, and so far as he was are she raised no objection about it. He also said that after the sale of the property, neither his son nor the Plaintiff mentioned anything about the proceeds of sale.

78. The Defendant said that he first learned of a formal petition for divorce filed by the Plaintiff in Shanghai in late 1996. However, he subsequently learned that the Husband had compromised the petition with the Plaintiff.

79. The Defendant's elder son emigrated to the States in the early 90s. He and his wife visited their elder son in the States annually. The Defendant said that whilst he was visiting in the States in October 1998, the Plaintiff made a long distance telephone call to him complaining much about the Husband. The Defendant said he told the Plaintiff over the phone he was fed up with the quarrels and disputes between the Plaintiff and her husband. He said in evidence that that marked the deterioration of his relationship with the Plaintiff. He said that before, he used to like the Plaintiff very much and had been very kind to her.

80. Upon his return to Hong Kong in late 1998, the Defendant discovered for the first time that the Plaintiff had applied for legal aid to recover 50% of the sale proceeds of the suit premises from him. He said he was upset by it, because in addition to this, the Plaintiff was already seeking to or had indeed obtained the Shanghai residence which his father had acquired, and a half-share in another property jointly acquired by his two sons, from the Yao family. He confronted the Plaintiff with all this, who only replied that this was indeed what she wanted to do.

81. The Defendant said in cross-examination that because of the claim for the 50% proceeds of sale and the litigation that followed, he simply had no energy to deal with the Shanghai residence, the household registration of which had been changed from him to the Plaintiff more than ten years before.

82. The Defendant also said that in 1999, Madam Ng paid a visit to him and his wife and learned about their plight. Madam Ng told him what she had learned from the Plaintiff about the suit premises (as per her evidence given at trial), and volunteered to assist the elderly couple if necessary. Madam Ng eventually gave them a statement in 2001 shortly before the trial which was originally scheduled to commence in September that year.

83. The Defendant said in cross-examination that he had mentioned about the Plaintiff's usurpation of the Shanghai property in his various letters to the Director of Legal Aid who had granted legal aid to the Plaintiff, as well as his witness statements.

84. In relation to a letter written by his wife to the Plaintiff and the Husband shortly after the transfer of the King's Road property from the Brother to him, the Defendant said in cross-examination that his wife's reference in the letter to the transfer being made by the Grandfather was in fact a loose reference to the suggestion made by the Grandfather to the Brother that the Brother should transfer the King's Road property to him. It was not meant to suggest that the King's Road property had been held by the Brother on behalf of the Grandfather. Indeed the Defendant strongly denied the suggestion put to him during cross-examination that the Brother on behalf of himself and the Grandfather held a number of "family properties", including the suit premises; he denied that there was ever any suggestion of a division of the so-called family properties or any objection by the Brother to the suggestion. He also denied the Plaintiff's case that the suit premises were eventually assigned to her and her husband as part of a subsequent scheme to divide up the family properties.

85. The Defendant was cross-examined at great length in relation to the transfer of the suit premises from the Brother to the Plaintiff and her husband, including his visits to the solicitors' office. The Defendant said that he had learned about the so-called three-year rule relating to the sale of a property which had been transferred by way of gift during the occasion when the King's Road property was transferred by his brother to him. He said that after his brother offered to transfer the four properties to him, he mentioned it to the Husband. The Husband and the Plaintiff then requested him to have one property transferred to their joint names so as to facilitate their application for a US visa; the Defendant discussed the request with his wife, and agreed to it. The couple then went to see Mr Ricky Ng together with the Brother and his wife. During that meeting, Mr Ng advised him to be careful about transferring the property to the joint names of his son and daughter-in-law. The Defendant said that he and his wife went home to think about it but eventually decided that they could trust the Husband and the Plaintiff. He then told the Husband and the Plaintiff about his decision, and told him his plan to sell the suit premises after a period of three years, to which the younger couple raised no objection whatsoever. It is not very clear from the Defendant's evidence as to whether it was explicitly mentioned by the Husband or implied in his request made to the Defendant for the transfer of one property into the joint names of him and his wife that the property would be returned to the Defendant after their successful application for a visa. The Defendant said that the request was for the "borrowing" of the suit premises. He said during his visits to the solicitors' office, he was never advised about a declaration of trust.

86. The Defendant said in cross-examination that as far as he could see at the time, nothing went wrong: the property was transferred in 1992, the couple successfully obtained their visas in 1993, the Husband successfully recovered vacant possession of the property for him in 1994, and when the three years expired in early 1995, the same was successfully sold at a good price which was duly paid over to the Defendant.

87. The Defendant said that the Brother, now aged 77, was suffering from various illnesses, and he simply dared not trouble his brother by asking him to return to Hong Kong from Canada to testify in Court for him, although his brother was in the habit of returning to Hong Kong from time to time and he was last in Hong Kong in April 2002.

88. The Defendant said in cross-examination that he had heard from the Husband about the Plaintiff's wish to buy the suit premises in the sum of HK$1,000,000.00. He was not clear in evidence as to when he first heard this from his son, i.e. whether before or after his sale of the suit premises in March 1995. But obviously, nothing came out of it in any event.

89. The Defendant agreed in cross-examination that after the sale of the suit premises in 1995, he deposited a sum of HK$100,000.00 into the joint bank account of the Plaintiff and the Husband. He said it was a gift of HK$50,000.00 each to the couple. He said a similar gift was also made to his elder son and his wife in the United States. But unlike the situation of the Husband and the Plaintiff, the gift to his elder son and daughter-in-law was simply done by ear-marking a sum of HK$100,000.00 in his own bank account: when they returned to Hong Kong to visit him, he would give them money to buy things; when he visited the States, he would also give his elder son money.

90. The Defendant agreed that the sum of HK$100,000.00 was subsequently re-transferred to his account. He explained that he learned from his son (the Husband) that the Plaintiff did not want to accept the money. He did not know why and was not told. According to his recollection, the Husband had no problem in accepting the gift, so he gave the son his $50,000.00 after the sum of $100,000.00 was returned to him.

91. In relation to Madam Ng, the Defendant said she was not particularly close to him and only occasionally visited him and his wife whilst she was in Hong Kong. The Defendant said he had read in the newspapers about the divorce of the brother-in-law of Madam Ng before 1999 when Madam Ng paid him a visit and learned about the claim of the Plaintiff against him. But he could not recall when he read about the divorce. Nor could the Defendant remember when in 1995 he returned to Hong Kong from his US trip, something that would help to pinpoint the time when Madam Ng allegedly spent the night at the King's Road property with the Plaintiff when the crucial conversation between the two ladies allegedly took place.

Other evidence

92. The Brother has emigrated to Canada for quite some time. He is now 77 years old. He did not return to Hong Kong to give evidence. Instead, a short statement together with two short affirmations made by him were admitted as evidence at trial pursuant to the hearsay provisions. He essentially said that in 1992, when he was preparing for emigration, he decided to give the suit premises and several other properties to the Defendant by way of gift. As to the choice of the transferees, he had no opinion, and only acted in accordance with his brother's wishes. He said later he was informed by his brother that in relation to the suit premises, he would like him to transfer the property to the Plaintiff and the Husband. He did so accordingly. He also said that he was old and in weak health and felt that he could not return to Hong Kong to testify.

93. Despite the filing of witness statements, neither the Husband nor Madam Zhou (the Defendant's wife) gave evidence at trial.

Findings of fact

94. This case turns on the facts. The story of the Plaintiff cannot stand together with the story of the Defendant. Not only that, it is recognised by counsel on both sides and is indeed easily apparent from the evidence given at trial that the Plaintiff's case cannot square with the respective evidence of Mr Ricky Ng, the solicitor, and Madam Ng. There can be no half-way house in relation to, for instance, Madam Ng's account of her conversation with the Plaintiff in which allegedly the Plaintiff mentioned to her the true reason for the transfer of the subject property by her father-in-law into the joint names of hers and her husband's. Nor is there any half-way house in relation to Mr Ricky Ng's account of what happened immediately before the completion of the sale of the subject property at his office in 1995, which account was flatly denied by the Plaintiff in the box. It was put to Mr Ng during cross-examination that what he said occurred on that occasion in fact never happened.

95. I have no hesitation in accepting the evidence of both Mr Ng and Madam Ng. I have had the benefit of closely observing their respective demeanour in Court whilst giving evidence. I can say that they were most impressive witnesses. In relation to the evidence of Mr Ng, I have no doubt that he was telling the truth in the box in accordance with the best of his recollection of the events. According to my observation, he did try his best to answer all the questions that were put to him from both sides. I am fully aware that strictly speaking he is a distant relative of the Defendant or the Yiu's family. But I have no difficulty whatsoever in concluding that he was an impartial and truthful witness. Understandably, due to the lapse of time, his recollection of the fine details of his several meetings with the persons involved in the relevant transactions between 1992 and 1995 and generally of matters relating to his or his firm's involvement in the relevant transactions, the subject of lengthy examination by counsel at trial, was not as good as one would have wished it to be. I accept without hesitation that all the alleged discrepancies in his evidence, differences between what he said and what other witnesses said, and differences between what he said in Court and what he had put down in his witness statement, were merely innocent mistakes or lapses in recollection due to the lapse of time, on his part and/or on the part of the other witnesses on the side of the Defendant. Indeed, whenever Mr Ng found it difficult to recollect exactly what had happened, he said so or qualified his answer accordingly in the witness box. He has shown himself to be a very responsible witness.

96. I am impressed by Mr Ng's evidence relating to the Defendant's wife's mentioning of the intention to facilitate the Plaintiff's and her then husband's intended application for a US visa as a reason for causing the subject property to be transferred into their joint names, as well as his evidence relating to what happened at his office when the assignment for the sale of the property was due to be executed by the couple in 1995. His account of what precisely was said in each particular meeting between solicitor and clients, when a particular thing was said or mentioned, who said what, on what occasion a particular thing was mentioned, and so forth, may not have been absolutely accurate due to the lapse of time, but I have no doubt in accepting his evidence that the Defendant's wife did mention the intention to facilitate the couple's intended application for a US visa as the reason for causing the subject property to be transferred into the joint names of the couple.

97. As regards what happened at his office immediately prior to the execution of the assignment in 1995, as Mr Ng said in the box, this was a rather unusual event, and naturally he had a relatively distinct recollection of it. I have no difficulty in accepting his account. Of course, with the passage of time, he had difficulty in describing precisely who said what during that meeting at his office when the Plaintiff expressed great reluctance in executing the assignment. But the gist of his evidence, based no doubt on the best of his recollection, is reasonably clear.

98. Much has been said about Mr Ng's failure, if his evidence and the Defendant's story were true, to give the Defendant and his wife more detailed advice relating to their intended transfer of the subject property to the joint names of the couple (as per the Defendant's story) and in particular, Mr Ng's failure to advise the Defendant to have a declaration of trust executed by the couple in his favour. This is used as a ground for challenging the veracity of the evidence of Mr Ng. Mr Ng has given explanations for his apparent failures in the box. He gave evidence on what went through his mind. He explained what his subjective thinking and reasoning were. I need not express any view on whether I agree with the subjective reasoning, thinking or belief of Mr Ng in relation to what he ought to do as the conveyancing solicitor in order to protect or safeguard the Defendant's interest in the subject property. That is not really the crux of the matter. The essential thing here is that I find Mr Ng's explanations of what he did or did not do to be understandable. More importantly, I find what he said by way of explanations to be truthful. That is sufficient to dispose of the criticisms against Mr Ng's evidence in this regard.

99. Mr Li, counsel for the Plaintiff, very fairly and properly refrained from suggesting that Mr Ng fabricated his evidence, particularly in relation to the two important aspects of his evidence that I have specifically mentioned above. He simply invited me to find his evidence "unreliable". As I pointed out at the outset, there is no half-way house here. Either the event mentioned by Mr Ng about the couple's argument over whether to execute the assignment in 1995 at Mr Ng's office happened or it did not. There is no way, by the nature of things, that Mr Ng could have made any mistake about the occurrence or non-occurrence of that event. In other words, putting it bluntly, Mr Ng was either telling the truth in the box relating to the event or he was telling a deliberate and very serious lie.

100. I have considered the whole of the circumstances of the case, and particularly those relating directly or indirectly to Mr Ng and his involvement in the case. I find it most unlikely and inherently improbable that Mr Ng would have gone to such length to fabricate the event on oath in the box. I have borne in mind Mr Ng's background, training, profession, experience and his involvement in the transactions. I have in fact borne in mind any possible motive for Mr Ng to lie in Court, say, for instance, in order to cover himself against any possible negligence suit by the Defendant. Indeed I mentioned this possibility to counsel during final submission, even though this was never even suggested to Mr Ng during cross-examination by Mr Li. Again very fairly counsel did not see fit to make any submission on this possibility.

101. In any event, this possibility does not stand up to scrutiny. First, this possibility postulates that Mr Ng was negligent and he was lying in Court to cover himself against any possible negligence suit by his former client. This, however, by definition, means that his client (i.e. the Defendant) had indeed told him that the couple were not intended to be the beneficial owners of the property, and the supposed negligence of Mr Ng lay in his failure to advise the Defendant to have a declaration of trust executed by the couple in his favour. So this possibility does not assist the Plaintiff's case at all.

102. Secondly, and in any event, commonsense dictates that it would have been much easier for Mr Ng, if he were determined to lie in Court, to side with the Plaintiff's case rather than the Defendant's case. It would have been much easier for Mr Ng to lie in Court by saying that he had heard nothing about the intended application for a US visa and for him to say that the execution of the assignment in 1995 went ahead very smoothly and normally, than for him to invent this story about the last minute hiccup relating to the execution of the assignment.

103. Thirdly, the risk of a negligence suit is minimal: If the Plaintiff wins, it will mean that the Defendant's story is not believed by the Court. In that event, a claim by the Defendant against him is most unlikely. On the other hand, if the Defendant wins, a claim by him against Mr Ng will be unnecessary.

104. I have gone into great length relating to this possibility which was not embraced by counsel at trial because apart from this possibility, and apart from the fact that Mr Ng is remotely related to the Defendant and his wife, on the evidence it is difficult to think of any other realistic reason or motive for Mr Ng to perjure himself by fabricating his evidence. I have no difficulty in rejecting the possibility that Mr Ng would risk everything by lying in Court in order to help a distant relative in defending a case in which (ex hypothesi) to his knowledge he (his relative) had no merits. I find this possibility to be inherently most unlikely.

105. Similarly, in relation to Mr Ng's evidence about the mentioning of the intended application for a US visa, unless Mr Ng has deliberately tailored his evidence in accordance with the Defendant's case, his evidence in this regard cannot be anything but true. There was no way, in the nature of things, for him to have been mistaken in his recollection regarding whether the US visa matter was mentioned or not mentioned during his meetings with the Defendant couple and the others concerned. Again it is a choice between fabrication of evidence (in order to corroborate the untruthful account of the Defendant) and his telling the truth. On the evidence as a whole, I have no hesitation in concluding that the latter is the correct answer.

106. For the sake of completeness, I should expressly mention that I have carefully considered all the points and criticisms that were ably raised by Mr Li on behalf of his client against the evidence of Mr Ng, and I have also considered Mr Ng's evidence against the totality of the evidence available before me. Nothing said by Mr Li persuaded me against my acceptance of Mr Ng's evidence.

107. As regards Madam Ng's evidence, again I have had the opportunity of closely observing her demeanour in Court. She was a most impressive witness and I have no difficulty in accepting in entirety her evidence. I have no difficulty in accepting her evidence that she was and is still very fond of the Plaintiff. The two ladies were formerly close to each other although, from mid 90s onwards, their relationship became more distant. On the other hand, I have of course borne in mind the undeniable fact that Madam Ng is again a distant relative of the Defendant and his wife. That notwithstanding, like the case of Mr Ng, I am firmly of the view that this did not in any way affect the impartiality of Madam Ng as a witness or the truthfulness of her evidence in the box. She was, understandably, subjected to lengthy cross-examination by Mr Li. Her evidence remained unshaken.

108. There is no suggestion that Madam Ng was particularly close to the Defendant or his wife or indeed their family. In any event there is no suggestion that her relationship with the Defendant and his family is so close that she would go to such length to fabricate her evidence and invent the story about the Plaintiff telling her the reason behind the transfer and subsequent sale of the subject property on oath in order to assist the Defendant to win the present litigation. On balance, I find this to be inherently unlikely on the material and evidence before me. Any lingering doubt was removed by the most impressive demeanour of Madam Ng in the box which I have already alluded to.

109. In accepting Madam Ng's evidence, I have specifically borne in mind two matters. First, the timing of the conversation between the Plaintiff and Madam Ng in which Madam Ng was told about the Sincere House story. Much effort was expended on the part of the Plaintiff to show that the conversation could not have taken place. According to Madam Ng's evidence, the conversation took place at a time when the Defendant and his wife were away on a visit to the States, and when the Plaintiff's mother and sister were not visiting Hong Kong (when they were visiting Hong Kong, they would invariably stay in the King's Road property together with the Defendant). According to Madam Ng, the conversation most probably took place in 1995, although 1996 was also possible. In short, the Plaintiff's argument is that on the evidence, the only possible time that the alleged conversation could have taken place was in the month of June in 1995. Yet according to the evidence of Madam Ng, the conversation took place when the weather was neither too cold nor too hot, as Madam Ng in her evidence was unable to be more precise about the time when the conversation took place.

110. Having paid particular attention to this part of Madam Ng's evidence as well as having considered Madam Ng's evidence as a whole, I find nothing in the point. Whether the temperature or weather was temperate, moderate or mild, whether the weather was too hot or too cold, or neither, was merely a matter of subjective impression. It also depends on the weather on the particular day in question and the time of the day in question. More importantly, this piece of evidence of Madam Ng only represented her best recollection in this regard after a lapse of seven years. She may have been mistaken about this answer. All in all, I do not consider this answer as casting any doubt, let alone a sufficient doubt, whether by itself or when taken together with all other circumstances of the case, on the veracity of the evidence of Madam Ng.

111. Secondly, Madam Ng's evidence was that the subject property was first touched on by the Plaintiff when the two ladies causally chatted about the divorce of a brother-in-law of Madam Ng, the related sale of a family property and the division of the proceeds by the divorcing or divorced couple. Madam Ng herself first heard about all this after her arrival in Hong Kong for the second time in April 1995. By then, the suit property had already been sold. Yet according to Madam Ng's witness statement as well as evidence in Court, the Plaintiff told her during the conversation that because the Defendant had heard about the divorce and the division of proceeds he caused the suit property to be sold in order to avoid a similar situation in the event of a divorce between the Plaintiff and her then husband. Moreover, according to the Defendant's evidence, he only briefly learned about the divorce in question from the newspapers and he could not recall when that took place. And of course, it was not the evidence of the Defendant that he caused the suit property to be sold because he had heard about the divorce and had fear about the same thing happening to his son and daughter-in-law. In short, the Plaintiff's criticism of Madam Ng's evidence is that the substance of the alleged conversation, the timing as well as the sequence of events are simply incorrect.

112. I have carefully borne this in mind. Having considered the matter from all possible angles, I have come to the conclusion that this does not affect the credibility of Madam Ng. All that Madam Ng did was to relate to the Court what actually happened, i.e. what she was told by the Plaintiff. She did not know what made the Plaintiff think or conclude that the sale of the subject property had anything to do with the divorce of Madam Ng's brother-in-law or the related sale of the family property. In particular, she did not know, and as per her evidence the Plaintiff did not explain to her, what made the Plaintiff think that it was the divorce and the related sale of the family property which caused the Defendant to procure the sale of the subject property. In short, one simply does not know what went though the Plaintiff's mind or what led to her conclusion that the Defendant's sale of the subject property was related to the divorce of Madam Ng's brother-in-law and the related sale of property. Madam Ng was not told about it.

113. In any event, according to Madam Ng's evidence, her brother-in-law and his then wife had been talking about divorce for many years. Although she personally only learned about the idea of selling the property and dividing up the proceeds after her arrival in April 1995, this by no means excludes the possibility that all this was mentioned prior to April 1995 and was known to the divorcing couple's relatives in Hong Kong. Moreover, I am not at all concerned with whether the Plaintiff's deduction was correct or not. All that I am concerned with is whether the account or evidence of Madam Ng was truthful or not. As I said, I have paid particular consideration to this aspect of Madam Ng's evidence. But having considered all relevant matters, I have no hesitation in concluding that Madam Ng was telling the truth relating to the conversation.

114. I accept Madam Ng's evidence on why she had a particular recollection of this conversation that she had had with the Plaintiff.

115. Mr Li doubted the impartiality of Madam Ng as a witness by pointing to the circumstances under which she made her witness statement and eventually came to Court to give evidence. I see nothing in the argument.

116. Likewise, I have considered all the points, alleged discrepancies and criticisms raised by Mr Li against the evidence of Madam Ng. Nothing said persuaded me against my accepting Madam Ng's evidence in its entirety.

117. This really is quite sufficient to dispose of the Plaintiff's case. In other words, I do not believe the Plaintiff's story. I do not accept her evidence. Needless to say, I have also closely observed the demeanour of the Plaintiff in Court. She has apparently done much homework in relation to this case, and she no doubt possesses a very good memory. She was able to recall dates, details of conversations, sequence of events, and so forth, with great precision and much confidence. But after comparing her demeanour in Court with that of Mr Ng's and Madam Ng's, I have no hesitation in preferring the evidence of Mr Ng and Madam Ng to her evidence where there were conflicts, and as I said, there were important ones.

118. Important features in the Plaintiff's case are also inherently unlikely. First, I find the idea of the Plaintiff and her husband agreeing to let the Defendant keep the sale proceeds of the subject property for the supposed reason that the Defendant would later buy them a property for their occupation when the time and price were right to be most odd. As the flat to be purchased was to be occupied as the matrimonial home of the Plaintiff and her husband, why should the couple be leaving the buying of their flat, a very important matter for most couples in such situation, to the hands of their elderly father/father-in-law? Why should the money be remitted to the Defendant immediately even if the decision relating to when to buy and what to buy should be made by the Defendant on the couple's behalf, particularly when the Defendant was not thinking of immediately buying a new flat for the couple?

119. This conveniently brings me to the three remittances (used as a shorthand here - the evidence is not very clear on how the initial deposit was actually given to the Defendant) of the initial deposit, the further deposit and the balance of the purchase price respectively, comprising the net proceeds of sale. The Plaintiff's story does not stand well with the fact that there were three remittances. If the couple were simply asking the Defendant to keep their money for them pending the purchase of a new flat in the indefinite future, why was there any hurry to remit money into the Defendant's account? One would have thought that the remittance of money could and more naturally should have been done in one go after the entire net proceeds had been received by the couple. Moreover, each transfer, particularly the last remittance relating to the balance sale proceeds, was in exactly the same amount as the amount of money received by the couple from the purchaser on each occasion. In particular, in relation to the last remittance, it represented the net balance purchase price in the odd sum of HK$1,859,846.00. The figure needs only to be stated in order to illustrate how odd it was for the couple to remit this exact amount to the Defendant in order to enable the Defendant to buy the couple a flat in the indefinite future at an unspecified location for an unknown price. In my judgment, I find the three remittances to be much more consistent with two trustees/nominees accounting to the beneficiary the sale proceeds of a trust property that had just been sold by them on behalf of the beneficiary.

120. Furthermore, I find the absence of any specific reference in the contemporaneous documents and correspondence, including the settlement agreement under which the Plaintiff agreed to withdraw her petition for divorce in Shanghai, to be inconsistent with the Plaintiff's story, particularly when the relationship between the Plaintiff and the Husband had become strained from late 1995 onward, and also bearing in mind that no doubt the Plaintiff was a careful and meticulous person possessing an excellent memory.

121. So for instance, whilst the separation agreement required the Husband to "borrow or buy" a flat in Hong Kong as the matrimonial home of the couple and their daughter after the expiry of the separation period provided for in the separation agreement, there was no mention whatsoever that the couple had over $2 million with the Husband's father in Hong Kong, or of the father's promise to buy the couple a flat. If there were indeed such a promise by the Defendant to buy the couple a flat, at the very least one would have expected the separation agreement to make some reference to that promise by the Husband's father. Moreover, why should the Plaintiff make the Husband promise in the separation agreement to "buy" her a flat after the expiration of the separation period of a bare six months when the Defendant, according to the Plaintiff's story, had already promised the couple to buy them a flat and was keeping over $2 million of their money for that purpose. Were there signs at that time that the Defendant was not going to honour his promise? If not, why should the Husband be buying a flat or even "borrowing" a flat? If somehow by then the Plaintiff and the Husband were no longer interested in the Defendant's buying a flat on their behalf, why was there no mention whatsoever in the separation agreement that the couple were going to ask the Defendant back for the money in order to enable the Husband to buy the flat as per the provisions in the separation agreement? Indeed the separation agreement referred to the sale proceeds of a flat in Shanghai which were said to be belonging beneficially to the Husband's elder brother (clause 3). Why was there no mention about the sale proceeds of the subject property which were being held supposedly by the Defendant on behalf of the couple beneficially for the purpose of buying a flat for them?

122. I do not accept the suggestion that since the separation agreement dealt with the Plaintiff's petition for divorce in the Mainland, therefore it did not refer to the couple's supposed money which was being held on trust by the Defendant for them in Hong Kong.

123. Likewise in an earlier letter written by the Husband to the Plaintiff on 15 December 1995, there was mentioned by the Husband, in response to the Plaintiff's request for a "written guarantee", that when the Husband had the necessary financial condition, he would buy a flat for their family in satisfaction of the wish of the Plaintiff. This is quite inconsistent with the Plaintiff's story that in fact, the Defendant had already promised the couple to buy them a flat, and the couple had already got over $2 million with the Defendant for that flat-buying purpose.

124. Having carefully considered the demeanour of the Plaintiff, the inherent possibilities or probabilities of the competing stories, the evidence of the other witnesses, as well as the available evidence and surrounding circumstances, I do not believe the Plaintiff's story.

125. In other words, I accept the Defendant's story. In my judgment, due to old age and the lapse of time, the Defendant's memory of the relevant events, most of which took place many years ago, did not allow him to give very detailed or accurate evidence on what had actually happened. But I accept the gist of his evidence. In other words, I accept his story that the property in question was only transferred to the couple in order to facilitate their intended application for a visa as per their request. I find as a fact that there was never any intention to pass any beneficial interest to the couple by the transfer. Instead, the couple merely held the property as nominees and trustees on behalf of the Defendant. The Brother only transferred the property to the couple pursuant to the direction of the Defendant, to whom alone he intended to make a gift of the subject property.

126. I have no doubt that during cross-examination, annoyed and slightly agitated by the very detailed cross-examination conducted on behalf of the Plaintiff, the Defendant was occasionally less than co-operative and forthcoming in giving evidence. That, however, does not distract from the main point, i.e. that generally speaking, his evidence was truthful.

127. I find his story of agreeing to transfer the property in question into the joint names of his son and daughter-in-law in order to facilitate their intended application for a US visa to be credible. I have no doubt that in those early years, the relationship between the parents and the younger couple was very good and close. It was a very harmonious family. The parents-in-law were very good and kind to the Plaintiff, and they liked her very much. The younger couple were also financially dependent on the Defendant and his wife. That also ties in well with Mr Ng's evidence that notwithstanding his subtle advice against transferring property to one's children, the Defendant and his wife eventually decided that they could trust their son and daughter-in-law and they could safely go ahead with the intended transfer of the property into the joint names of their son and daughter-in-law.

128. Needless to say, the Defendant's evidence was well corroborated by the evidence of Mr Ng and Madam Ng. I accept the Defendant's evidence that he was the actual recipient of the rental incomes of the property during those three years when the property was held on his behalf by the couple after the transfer, and he was responsible for meeting the outgoings of the property, as well as paying the legal costs and compensation relating to the recovery of vacant possession of the property from its tenant. I accept the Defendant's account of the subsequent sale of the property in 1995; I accept his explanation that indeed that was throughout his intention, so that he could use the sale proceeds to support his living, after the emigration of his elder brother who used to support him.

129. I need not make any finding on whether the Brother acquired the properties in question from his own resources or from business done jointly by him and the Grandfather. I reject the Plaintiff's story of a prior promise by the Grandfather to give her and her husband a property if they should successfully emigrate to Hong Kong, or her suggestion that the transfer of the subject property to her and her husband was an eventual fulfilment of that promise. In my judgment, the transfer of the four properties, including the subject property, by the Brother was done as per the Defendant's evidence, namely to make provision for the Defendant, given the impending emigration of the Brother to Canada.

130. Mr Li vigorously criticised the Defendant for failing to call the Brother, the Defendant's wife (Madam Zhou), the Husband and the Defendant's eldest son to give evidence at trial. As for the Brother, I have no difficulty or hesitation in accepting the explanation given that because of his old age and less than satisfactory health he did not want to stay in or return to Hong Kong to give evidence. That was most understandable. In fact even if the Brother were still ordinarily residing in Hong Kong, his reluctance to give evidence in Court would still be most understandable.

131. The failure of the Defendant to call Madam Zhou or the Husband, despite the service of their witness statements, or for that matter, the Defendant's eldest son, to give evidence, was, in my judgment, motivated by tactical considerations rather than any intention to hide the truth from the Court. As it is, the evidence available to me is sufficient for the Defendant to sustain his case and defeat the Plaintiff's case.

132. Lastly, I wish to emphasize that in reaching my findings of fact, I have borne in mind all the points and submissions made by counsel. I have borne in mind the oral as well as documentary evidence, the general circumstances and background of the case, as well as the respective inherent probabilities of the competing versions and conflicting evidence. I have borne in mind the alleged discrepancies in the evidence of the witnesses and considered whether they could be explained by lapses in memory or other innocent reasons, or whether they represented lies, untruthful account or unreliable evidence.

Outcome

133. Given my findings, I have no difficulty in concluding that the subject property was at all material times held by the Plaintiff and the Husband as trustees and nominees on trust for the Defendant beneficially. The Plaintiff, and for that matter, the Husband, had no beneficial interest in the subject property. It must follow that the sale proceeds of the property belonged beneficially to the Defendant, and indeed the net proceeds have been remitted by the couple to the Defendant accordingly.

134. In those circumstances, the Plaintiff's claim for a beneficial interest in the sale proceeds or a half share in the sale proceeds, depending on whether there has been an effective severance of the alleged joint tenancy (which I reject), must fail.

135. The action is dismissed. The Plaintiff must pay the costs of the action to the Defendant, such costs to be taxed if not agreed. I further order that the Plaintiff's own costs be taxed in accordance with the Legal Aid Regulations (Cap. 91).

136. Lastly, I would like to thank counsel for their helpful assistance.