NG KIT, legal representative and sole beneficiary of THE ESTATE OF NG KWUN YUEN, deceased v. WU TSUN HUA AND OTHERS

CACV 238/2021

[2021] HKCA 1787

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 238 OF 2021

(ON APPEAL FROM HCA NO. 201 OF 2017)

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J U D G M E N T

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Hon Cheung JA (giving the Judgment of the Court):

I.  The appeal

1.  This is an appeal by the plaintiff against the judgment of Deputy High Court Judge Paul Lam SC who dismissed his action against the defendants.

II.  Background

2.  Mr. Ng Kwun Yuen (‘the deceased’)  died on 12 March 2011.  He was survived by his wife who was the 1^st defendant and his children which included the plaintiff who was his son and the 2^nd defendant who was his daughter.  The 3^rd defendant is a sole proprietorship run by the 2^nd defendant, and is not a separate legal entity.  The Judge held that it is wrong for the plaintiff to sue it separately.

3.  The deceased had three wives.  The plaintiff was the son born of the first marriage.  The first marriage ended in divorce.  The plaintiff was then 3 years old.  The deceased then married a second wife Madame Chang who subsequently died.  The plaintiff had been looked after by Madame Chang who married the deceased when the plaintiff was five years old.  In 1996, the deceased married the 1^st defendant. She is a Taiwanese. 

4.  The deceased had three properties which are featured in this litigation.  A flat in Windsor Mansion, Kowloon (‘the Windsor Flat’)  in which the deceased lived with his second wife.  This flat was registered in his sole name.  He also used it to conduct his antique business called Golden Arts & Crafts Co (‘Golden Arts’).  The second flat is in Pacific Building, Kowloon (‘the Pacific Flat’)  where he lived with the 1^st defendant since September 2007.  This flat was registered in the joint names of the deceased and the 1^st defendant.  The third flat is in Shanghai (‘the Shanghai Flat’).  The registered owners were initially the deceased and the 2^nd defendant.  In October 2009, it was transferred to the 2^nd defendant and her sister.

5.  In July 2008, the deceased was diagnosed with stomach cancer.  On 11 August 2008, he made a will giving the Windsor Flat and his residuary estate to the plaintiff.

6.  On 7 April 2010, the deceased made another will in Taiwan by which he appointed the plaintiff as his executor who should be responsible for his funeral and burial matters.

7.  The health of the deceased gradually deteriorated in 2010.  On 1 December 2010, he was admitted to a Medical Centre.  He was being looked after by the 2^nd defendant during his hospitalisation.

8.  The plaintiff has been residing abroad in England (1972-1995)  and Singapore (1995-2003)  and eventually in England again from 2003 onwards.  He returned to Hong Kong to visit the deceased on 20 November 2011.

9.  By this action, the plaintiff claimed for the return of the deceased’s antiques (there was a dispute whether all of them were truly antiques and the Judge used the term artefacts to describe them)  kept by the 1^st and 2^nd defendants in the Pacific Flat and the Shanghai Flat.  He also claimed that the 2^nd defendant had misappropriated JP¥ 3,000,000 (equivalent to about HK$210,000 at present)  paid by a Japanese customer ACT East Co Ltd (‘AEC’)  owned by one Mr. Sato to settle trade debts owed to the deceased’s antique business.  The defendants contended that the artefacts were not properties belonging to the deceased’s estate.  Instead, the artefacts were given to them as gifts by the deceased during his lifetime.

10.  The plaintiff was the executor of the will of the deceased and the sole beneficiary of the deceased’s residuary estate.  He also relied on a document which he described as a Chinese Codicil (‘the Codicil’)  signed by the deceased in his claim for the artefacts.  The content is as follows :

「 二零一一年一月二十五日給吳春花與吳琪收閱

本人 吳坤元 (身份證號碼 AXXXXXX 現委派我兒子吳傑可以隨時收回存放：

(1)  在九龍太平洋大廈家(即我與吳春花之房產)內；

(2)  上海海華花園家(即我贈送吳琪姊妹之房產)內；

(3)  上海友人陳律師家中

我所擁有全部古玩，工藝術品，包括古玩櫃，及仿古傢俱等物件，收回後物件全歸我兒子 吳傑 收藏及擁有。此決定即與本人患上癌病後於二零零八年八月十一日成立之遺囑內所寫下其中之意願無異，自那遺囑簽立後至今日本人從未有更改遺囑，亦無再立新遺囑，吳傑 仍是我遺囑之執行人。」

Translation :

‘ 25 January 2011 for Wu Tsun Hua and Wu Chi to receive and read

I, Ng Kwun Yuen [ID card number AXXXXXX] now appoint my son Ng Kit to get back at any time all the antiques, arts and handicraft articles, including antique cabinet(s)  and imitations of antique furniture which are owned by me and placed inside:

(1)  The home at the Pacific Building in Kowloon [i.e. the property of Wu Tsun Hua and I];

(2)  The home at the Shanghai Flat in Shanghai [i.e. the property I gifted Wu Chi and her sister];

(3)  The home of my friend in Shanghai, Lawyer Chan.

All the items, after being collected, will belong to my son Ng Kit as his collection and for his possession.  This decision is the same as one of my wish stated in my Will made on 11 August 2008, after I was diagnosed with cancer.  From the time that the Will was signed, up to today, I have never amended my Will, nor did I make another Will.  Ng Kit is still the executor of my Will.’

11.  The Judge viewed the video clips of the deceased making the Codicil.  The clips were silent.  The Judge commented that the deceased appeared to be very sad in the video.  The Judge also noticed a photo of the deceased’s second wife put next to the Codicil.  The Judge stated that he had the distinct impression that the photo was placed by the plaintiff next to the Codicil intentionally.  The Judge summarised the plaintiff’s evidence on the Codicil :

‘ 50. The Deceased did not refer to any artefact in the Will, but P relies heavily on the Codicil. P admitted that it was his idea to ask the Deceased to sign the Codicil. The Will did not refer specifically to any artefact at all. P returned to Hong Kong on 20 January 2011 to see the Deceased at the Medical Centre. He said that, on 21 January 2011, the Deceased told him that he could start to collect the artefacts in the Pacific Flat and the Shanghai Flat. However, on 22 January 2011, when he told D2 that he wished to collect them at a convenient time, D2 replied that they had nothing to do with her and said words to the effect that they all belonged to D1. He then said he would seek clarifications from the Deceased. Hence, on 23 January 2011, he explained the difficulty to the Deceased, and the Deceased agreed to sign a document to confirm his intention. On 24 January 2011, he produced to the Deceased a duplicate of the Codicil. After he explained its content to the Deceased, the Deceased signed on it. On 25 January 2011, he brought another duplicate of the Codicil and asked the Deceased to sign again. The content was the same except the date. He explained that it was more appropriate if the Deceased could sign it in the presence of two witnesses, namely, Madam Ki Noh Chun (祁糯珍)  (“Ki”)  and Jonathan. He explained the content of the Codicil again to the Deceased in the presence of Ki and his son. After that, the Deceased, Ki and his son signed on the document.

51. P said in his witness statement that he had destroyed the first duplicate of the Codicil dated 24 January 2011 which had been signed by the Deceased on 24 January 2011.  This cannot be true.  D2 has produced a copy of the Codicil signed by the Deceased without any witness’ signature, which was also dated 25 January 2011 (not 24 January 2011).  D2 said P gave this document to her on 26 January 2011.’

12.  The Judge held that knowing that the Codicil was intended to be an important document, the plaintiff had not arranged lawyers or doctors to witness the execution by the deceased.  He further stated that he had reservations whether the plaintiff had told him the whole truth as to the circumstances in which he persuaded the deceased to sign the Codicil.  He believed that the plaintiff might try hard to persuade the deceased to sign the Codicil.  Nonetheless, the Judge accepted that the deceased had signed this document because :

‘ 56. ….there is insufficient evidence to prove that the Deceased’s execution of the Codicil was procured by any undue influence exerted by P.’

13.  The Judge, however, found that the document was not in the nature of a codicil because the gift that the deceased made to the plaintiff was to take effect immediately and not only to take effect on his death which is the requirement for a testamentary codicil.

14.  The Judge went on and held that the Codicil was, in any event, revoked by another document dated 26 January 2011 by the deceased (‘the Chinese Declaration’)  which was produced and relied upon by the defendants in support of their case.

「 正重聲明

我吳坤元 NG KWUN YUEN 身份證號碼 AXXXXXX 在此嚴正聲明下述幾點:

(1)  在我生病前搬至金巴利道太平洋大廈的古董文物，在我身後均留在屋內，任何人均不可拿取。

(2)  在我有生之日，我不願用子女的錢，所有費用由我中銀帳戶支出，早已授權予女兒吳琪處理。

(3)  之前所簽屬的任何文件都先依此聲明為主。」

Translation :

‘ Solemn Declaration

I, NG KWUN YUEN, ID card number AXXXXXX, hereby solemnly declare the followings:

(1)  All the antiques and cultural relics which had been moved to the flat at Pacific Building on Kimberly Road before I became ill shall remain
inside the flat after my death.  No one shall take them away.

(2)  I do not want to use any money of my children in my lifetime.  All the expenses shall be paid with the money in my Bank of China account, and I have authorized my daughter Wu Chi to handle it.

(3)  All the documents signed previously shall be subject to this Declaration.’

15.  The defendants in support of their case that the artefacts had been given to them by way of gift also relied on a letter of the deceased dated 11 February 2011.  Earlier on 9 February 2011, the plaintiff wrote an email to the 2^nd defendant mentioning that they had a quarrel in the Medical Centre about two weeks before.  The Judge held that there was a quarrel between them on 26 January 2011.

「 弟弟：

聽完你寫給阿琪的 mail，讓我非常難過，並對你的行為非常失望。你媽媽與我都是敦厚和善的人，你從3歲到19歲離開香港前，都是受你媽媽的教誨及薰陶，我以為你在母親的耳濡目染下，加上你書讀得多，也會如你母親般明事理、公正和善敦厚的對人，所以在08年寫遺囑時就讓你做遺囑執行人，真正的目的只是讓你完成你媽媽的遺願 --我身後與她葬在一起；並非讓你就財產上做分配。

你應該很清楚我並沒有大的財產，剩下最多的是古董，所有搬到新加坡、太平洋房內及上海的古董、工藝品及仿古傢俱都是我決定放置的，希盼你聽從我的安排，不要就這些物品上，對你弟妹及我台灣的太太做任何不友善行動。

多年前我就告訴過你：我們父子倆客氣點，若彼此說的不中聽就當沒說過。但我聽到你給阿琪的 mail 內容時，我非常憂慮也確定我必需留話交待你，不論你中不中聽都要記得，『和善敦厚對待你弟妹及我台灣的太太，千萬不可鬧上法院，切記』。

父字」

Translation :

‘ Little Brother*

I felt so sad after hearing the mail that you wrote to Ah Chi.  And your action let me down so much, too.  Your mother and I are amiable and kind.  From 3 to 19 years old and before you left Hong Kong, your mother taught you so much and she was the influence of your life.  I thought you were reasonable, fair and amiable like your mother, since you were always under her influence and were well educated, that was why you were appointed the executor when the will was prepared in 2008.  The real purpose of that was to give you an opportunity to fulfill the wish of your late mother: to bury me with her after I die.  Its purpose is not for you to decide how to distribute the property.

You should know very well that I do not have much money.  What I have most is antiques.  For all the antiques, arts and crafts and replica antique furniture that have been moved to Singapore, the Pacific Flat and Shanghai, it was my idea to do that.  I hope you will accept my arrangement and will not take any unfriendly action against your younger brother, younger sister and my Taiwanese wife in relation to those things.

I told you many years ago that as father and son, we should be polite to each other.  In case something not very nice has been said, let us just forget it like it never happened.  However, when I heard the content of the mail that you wrote to Ah Chi, I felt so worried and I know I must say this to you, whether you like it or not, just bear in mind: “be amiable and kind to your younger brother, younger sister and my Taiwanese wife.  Do not ever try to start a court battle.  Always keep this in mind”.

Dad’

[*The plaintiff accepted that this is his nickname used by the deceased.]

16.  The Judge dealt with this letter in detail :

‘ 65. The next important event is that, D2 said that, subsequently, the Deceased gave the 11/2/2011 Letter, put inside an envelope addressed to P and signed by the Deceased at the back, to her. Again, P challenges both the authenticity and validity of the 11/2/2011 Letter, which was only disclosed formally on 18 July 2017 to P’s solicitors. There is no cogent evidence that the Deceased’s signature on the document was forged. As to the allegation that D2 induced the Deceased to sign the document when he did not know or agree to its content, P does not have any direct evidence proving such allegation. I have reminded myself yet again that I must assess D2’s evidence on this document with great care. I have decided to accept her evidence. It is not her case that she prepared the document. Indeed, she said she did not know who assisted the Deceased to prepare it. P was addressed as “弟弟” in the letter, which P admitted to be his nickname used by the Deceased. The letter contained the Deceased’s exhortations to P. If this was a false document produced by D2, some of these exhortations would not have been necessary. It should be noted that the letter referred to artefacts in Singapore, the Pacific Flat and the Shanghai Flat. P never suggested that D2 wanted to claim the artefacts in Singapore from him. There was no apparent reason why, if it was a false document drafted by D2, she had to mention the artefacts in Singapore at all. In addition, it was merely stated that it was the Deceased’s decision to put (放置)  the artefacts in those places. Again, one would have thought that clearer language spelling out who was or should be the owner would and could have been used had the document been prepared falsely by D2. In fact, when the Deceased had already signed the Chinese Declaration on 26 January 2011 (which P claims to be false as well), there was no conceivable need for D2 to prepare yet another false document, in particular, about the artefacts in the Pacific Flat. The first sentence of the letter referred to a “mail” written by P to D2. It must be a reference to the email dated 9 February 2011. D2 said, which I accept, that from time to time, the Deceased would ask her to read emails exchanged between P and her to him. This matches with the date of the letter i.e. 11 February 2011, which was 2 days after the said email. P pointed out that D2 said in her Defence that the Deceased gave her the 11/2/2011 Letter before the Chinese New Year but the Chinese New Year in 2011 was in fact before 11 February 2011. I accept D2’s explanation that she could not recall the date clearly. Her main concern at that time was to take care of the Deceased. And she was asked to recall what happened many years later. It is understandable why she made such an inadvertent mistake in this respect. P also questions why D2 did not give the 11/2/2011 Letter to him immediately when it was addressed to him. I accept D2’s explanation that she had put the letter together with the copy Codicil and the Chinese Declaration in the drawer at the Medical Centre and did not think about it further before the Deceased died as she was concentrating on taking care of the Deceased at that time. It is also necessary to bear in mind that, by then, P had returned to England.’

III.  The Judge’s decision

1)  Assessment of the witnesses

17.  The plaintiff gave evidence and called his wife and son to give evidence.  The 1^st and 2^nd defendants gave evidence and called two other witnesses. 

18.  In respect of the plaintiff’s evidence, the Judge held :

‘ 38(a)  P is an intelligent person. My concern is that his evidence consists of beliefs and opinions on matters that he does not really have any direct personal knowledge; and his beliefs and opinions might have been somewhat tainted by his dislike of Ds.’

19.  The Judge stated that he did not find the evidence of the plaintiff’s witnesses particularly helpful.

20.  In respect of the defendants’ evidence, the Judge held :

‘ 38(c)  D1 is an old lady who has received little education. It is understandable that she had difficulties in understanding some of the questions put to her in cross examination. That said, her answers were natural, spontaneous and straightforward.

38(d)  D2 gave evidence in a sincere, composed and straightforward manner even when serious accusations were put to her.’

21.  The Judge held that the evidence of the other two defence witnesses either did not assist the defendants’ case on the real issues or was not relevant to the real issues.

2)  Acceptance of the defendants’ case

22.  The Judge accepted the defendants’ case that the deceased had given them the artefacts by way of gift.  He also found that in respect of the plaintiff’s claim for the JP¥ 3 million, the deceased had transferred his business in Golden Arts to the 2^nd defendant and there was an equitable assignment of AEC’s trade debts to the 2^nd defendant.

(1)  Pacific Flat Artefacts

23.  In respect of the Pacific Flat, the Judge accepted that the artefacts in the flat were gifts to the 1^st defendant.  He held that the deceased initially kept the artefacts in the Windsor Flat but moved some to the Pacific Flat which was intended by the deceased to the home of the 1^st defendant which she could use and stay in her right.  He accepted the evidence of the 1^st defendant that the deceased had one day told her that :

「這些都是要搬到太平洋房屋的擺件，都是送你的了，留在豐樂的我可能買進賣出，這些妳要賣或送人都不關我事。」

Translation

‘ All these are to be moved to the Pacific Flat, they are all yours. Those remaining in the Windsor Flat, I may buy and sell. These you may sell or give to others which will not be my concern.’

24.  The Judge held that even if the Codicil is a proper codicil it cannot revoke the gifts :

‘ 58. ......it cannot be used to set aside any earlier legally binding acts of the Deceased. To be more specific, if, as the Ds contend, the Deceased had already given the artefacts in both the Pacific Flat and the Shanghai Flat to them as gifts, the Deceased would not be entitled to revoke the gifts in whatever manner.’

25.  The Judge held that the relationship between the plaintiff and the new family of the deceased was not a good one.  He referred to the quarrel in the Medical Centre :

‘ 60. P claims that, on the next day i.e. 26 January 2011, P provided D2 with a copy of the Codicil in the presence of the Deceased, who confirmed having signed the same. P demanded D2 to return the artefacts immediately but D2 refused, and said she could ask the Deceased to sign yet another document. On the other hand, D2 said P lost his temper and yelled loudly at her. Seeing what happened, the Deceased cried. I am sure that there was a quarrel in the Medical Centre on that day as P referred to it in his email dated 9 February 2011. I am also sure that the quarrel touched upon the artefacts and other financial matters. However, I am not sure what exactly each party had said to the other.’

26.  The Judge accepted the evidence of the 2^nd defendant on the Declaration :

‘ 61. ......After taking shower on 26 January 2011 (which must be after the quarrel between P and D2), the Deceased asked her to take out and read to him the Codicil. He then dictated the content of the Chinese Declaration to D2, and asked her to write on a piece of paper. D2 wrote the Chinese Declaration accordingly. The Deceased then signed on it. After that, D2 put the Chinese Declaration together with the copy Codicil back into the drawer.’

27.  The Judge explained the significance of this document is that it is a piece of contemporaneous document evincing the deceased’s intention and his state of mind at the material time.  He held :

‘ 64. ...When construing the document, in particular, the words chosen by the Deceased, one should bear in mind the rather difficult situation he was facing at that time. He was aware that there were heated arguments concerning the artefacts between his children whom he all loved. It is most natural that he would choose the language carefully which should make his intention clear enough but at the same time, not escalate the conflicts between P and Ds insofar as possible. Looking at the matter from this perspective, I take the view that the message that the Deceased intended to convey is clear. He stated expressly that the artefacts in the Pacific Flat should remain where they were after he died. To his knowledge, the Pacific Flat, held by him and D1 as joint tenants, would belong to D1 solely after he passed away. By stating that the artefacts should remain in the Pacific Flat after he died, he was confirming his intention that they belonged, or should belong, to D1. When he directed that nobody should take them away, I have no doubt that he had P in mind bearing in mind that the document was prepared in response to the Codicil he signed the day before and he knew well that P was trying to collect the artefacts in the Pacific Flat. Nobody other than P had expressed any intention to take away the artefacts in the Pacific Flat. I take the view that the Deceased signed the Chinese Declaration because he wanted to revoke the authority given to P to collect the artefacts in the Pacific Flat, as well as the purported future gift to P, in the Codicil which he signed on the previous day.’

28.  The Judge further accepted the evidence of the 2^nd defendant on the 11 February 2011 Letter.  He further relied on this document in support of his finding that the artefacts were gifts to the defendants :

‘ 66. The 11/2/2011 Letter is a just a letter not intended to have any legal effect. Like the Chinese Declaration, its significance lies in the fact that it is a piece of contemporaneous document evincing the Deceased’s intention and state of mind. Construing the document objectively, the most important point is the Deceased’s statement that it was his decision to place the artefacts in various places i.e. Singapore, the Pacific Flat and Shanghai, and his hope that P would obey his arrangement. Although he simply used the phrase “放置”, what he clearly meant must be that he intended that the artefacts should stay with, and belong to, the owners or occupiers of the real properties where they had been placed.’

(2)  Shanghai Flat Artefacts

29.  The Judge first held that the plaintiff did not have the locus to claim and sue for these items :

‘ 73. The question is not whether the Hong Kong court has jurisdiction over D2 (which is not in dispute). The problem is that the probate granted by the Hong Kong Court does not extend to the Deceased’s assets outside Hong Kong; and the Hong Kong grant does not give P any authority to collect the Deceased’s assets in the Mainland, or to compel delivery thereof to him. There is no evidence that P has obtained probate of the Will in the Mainland.

74.  An additional problem is that P has not joined Ting as a defendant.  On the evidence, Ting, as one of the joint tenants of the Shanghai Flat, is also in possession of the artefacts in the flat.’

30.  The Judge then went on to consider whether the artefacts in the Shanghai Flat were part of the deceased’s estate.  The Judge dealt with the evidence of the 2^nd defendant :

‘ 78. D2 merely stated in her Defence that the artefacts in the Shanghai Flat belonged to her and her sister. She stated in her affirmation dated 25 June 2019 that the Shanghai Flat did not contain anything belonging to the Deceased’s estate. She had not explained why she said they belonged to her and her sister.

79.  Having said that, D2 said in Court that at around the time the Shanghai Flat was transferred to the joint names of D2 and her sister on 12 October 2009, the Deceased said that all things inside the flat would belong to them and would have nothing to do with him (in Chinese, words to the effect that “房子內的東西都是妳們倆姊妹的, 不關我的事了”).’

31.  He addressed the plaintiff’s criticism of the 2^nd defendant’s lack of pleading that these artefacts were gifts but nevertheless accepted her evidence.  He considered the deceased had in the past also given the plaintiff artefacts which he had sent to Singapore originally intended for an antique business to be set up there but later not pursued upon because the plaintiff and his wife did not wish to take up the business.  The Judge held :

‘ 84. All in all, I accept that, when the Deceased transferred the Shanghai Flat to D2 and her sister, he made a gift of all the artefacts inside the flat to them. There was a change in possession of those artefacts because, before the transfer, he was one of the co-owners having the right to possession of the flat and hence, the objects inside; but by transferring his share to Ting, he gave up his right to possession to both the flat and the objects inside. Accordingly, there was a complete gift of the artefacts inside the flat. It follows that the artefacts in the Shanghai Flat no longer belonged to the Deceased when he died.’

(3)  JP¥ 3 million   

32.  The Judge held that it was not in serious dispute that, sometime after the deceased became ill, the business of Golden Arts was operated by the 2^nd defendant. He accepted that, after July 2008 when the deceased had been diagnosed as suffering from cancer, he asked her to manage his business.  He also found that there was a meeting in late November 2008 (after the deceased learnt that he was suffering from cancer)  at which the deceased told Mr. Sato that he would hand over the business to the 2^nd defendant and Mr. Sato agreed to continue to do business with Golden Arts on such basis, and also to pay all trade debts (both past and future)  to the 2^nd defendant as she directed.  

33.  The deceased’s business was terminated upon his death.  The registration was cancelled on 6 July 2011.  On 23 June 2011, the 2^nd defendant commenced a business also called Golden Arts & Crafts Co (源 浩行).  The Judge rejected the plaintiff’s argument that the 2^nd defendant set up this company to deceive AEC into transferring monies to her.

V.  Grounds of appeal

34.  The plaintiff advanced four grounds of appeal :

1)  The Judge erred in finding there was an equitable assignment of the JP¥ 3 million because of novation.  The Judge erred in conflating novation and equitable assignment.  The evidence does not support a novation. The evidence does not support a valid equitable assignment because the chose was not sufficiently identified and there was no consideration.

2)  The Judge erred in holding the plaintiff had no locus to sue for the artefacts in the Shanghai Flat.

3)  The Judge erred in relying on an unpleaded defence by the defendants that the deceased’s transfer of the Shanghai Flat to the 2^nd defendant and her sister amounted to a gift of the artefacts in that flat as well.

4)  The Judge erred in holding the deceased had the intention of giving the artefacts in the Pacific Flat to the 1^st defendant because it was contrary to the Codicil.  The Chinese Declaration does not support the defendants’ case.

35.  In the plaintiff’s first written submission, he elaborated on his grounds of appeal.  He further contended that the Judge had ignored some material evidence in his assessment of the evidence. The plaintiff stated that he had assisted the deceased in the operation of his jewellery and antique business since 1970 by referring to the letters between him and the deceased between 1975 and 1981.  The plaintiff referred to the parties’ pleadings and the verbal evidence of the defendants and their witnesses.  He commented that the evidence given by the defendants and their witnesses was false or inconsistent.

36.  In his supplemental submission, the plaintiff stated that the Judge had wrongly relied on certain matters, specifically the witness signatures in the Codicil in assessing his credibility.  He also challenged the findings of the Judge in respect of his acceptance of the evidence of the 2^nd defendant, the defence witness Jia and other matters.  He commented on the video clips which the Judge had seen at the hearing below.

37.  In Court, the plaintiff referred to the family history, about how he had suffered as a child when his birth mother left the deceased and took their youngest son with her.  He referred to the evidence and repeated his view that the 2^nd defendant had lied. He made specific comments on the 11 February 2011 Letter.  He challenged the signature and the contents of this letter.

VI.  Our view

38.  The plaintiff’s appeal covers both finding on facts and on law.  We will deal with the appeal on facts first.  This concerns the Judge’s finding that the artefacts in the Pacific Flat and Shanghai Flat were given as gifts by the deceased to the defendants.  This aspect of appeal also covers the Judge’s finding on the events leading to the 2^nd defendant receiving JP¥ 3 million from Mr. Sato.

39.  The well-established principle in an appeal against a finding of fact by a trial judge is that the appellant must demonstrate that the finding is plainly wrong before the appellate court will interfere and overturn the finding.  Various reasons have been given for this approach and they include the following :

1)  The appellate court does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand and had the benefit of observing the demeanour of the witnesses and how the whole of the evidence unfolded before him.

2)  The appellate process is not designed to give a litigant (or his counsel)  a platform for regurgitating his closing submissions on the evidence and factual aspects of the case with the hope that the appellate judges may come to a different view to that of the primary judge. 

3)  There are many areas, particularly those in relation to finding of fact, where judges can reasonably reach different conclusions from each other.  That would not be a ground for intervention unless the decision is plainly wrong.

4)  The written decision of the trial judge consists of the impressions he had of the witnesses and the evidence.  It is not possible for the Judge to record in the decision each and every piece of evidence or his impression that he may rely upon in coming to his finding.

40.  What is important to bear in mind is that where a trial judge has reached a conclusion on the primary facts, it is only in a rare case, such as where that conclusion was one (i) which there was no evidence to support, (ii) which was based on a misunderstanding of the evidence, or (iii) which no reasonable judge could have reached, that an appellate tribunal will interfere with it.

41.  In our view, the plaintiff’s challenge on the factual finding by the Judge on the essential issues is bound to fail because the plaintiff is simply not able to show that the finding is plainly wrong.  The case lasted five days before the Judge.  He had dealt with the Codicil which he accepted to be signed by the deceased but held that it was revoked by the deceased because of the Chinese Declaration and the 11 February 2021 Letter.  He had analysed the evidence relating to these two documents and accepted the defendants’ evidence that they were signed by the deceased.  Specifically on the letter the Judge had dealt with it in detail in [65] of his judgment.  We cannot see how the Judge can be faulted.

42.  Apart from the two documents, the Judge had examined the background leading to the purchase of the Pacific Flat and the transfer of the Shanghai Flat. He had also addressed the plaintiff’s argument of the so-called unpleaded case of gift of the artefacts in the Shanghai Flat before coming to his finding that the artefacts were gifts given to the defendants.

43.  The plaintiff is not able to show that the Judge’s finding of fact on the JP¥ 3 million is plainly wrong.  His acceptance of the November 2008 meeting forms the cornerstone of the finding that the 2^nd defendant is entitled to the money.  Her assistance of the deceased in his antique business can hardly be challenged.  As to the argument on law on whether the plaintiff has the locus to sue, it is not necessary for us to go into it because the Judge had ultimately held in favour of the defendants on the gift of the artefacts in the Shanghai Flat.

44.  In respect of the law on assignment of a chose in action in the form of trade debts, the Judge rejected the plaintiff’s argument (he was represented by counsel at the trial)  that an assignment of debt must be made in accordance with section 9 of the Law Amendment and Reform (Consolidation)  Ordinance (Cap. 23).  He referred to the law on equitable assignment which does not require any particular form of words so long as the words clearly show an intention that the assignee is to have the benefit of the chose or thing in action.  An informal notice, including oral notice would be sufficient to constitute notice to the debtor.

45.  He held that consideration is not required to support an equitable assignment of an existing legal chose or thing in action, provided that the assignor has done everything required to be done by him to make the assignment complete in equity.  On the other hand, an assignment of future property can only operate as a contract to assign when the property comes into existence, and consideration is therefore needed.  The Judge held that in a case where there was a tripartite agreement whereby the debtor agreed to pay the debt to a third party instead of the creditor, there would be a valid equitable assignment of the chose in action supported by consideration because the parties have in effect entered into a legally binding ‘novation’ or substituted agreement (see Anson’s Law of Contract, (31^st ed., 2020), p 662).

46.  The Judge further held it is unknown whether the trade debts making up the total sum of the JP¥ 3,000,000 received by the 2^nd defendant were incurred before or after the transfer of business.  Insofar the JP¥3,000,000 covered any trade debts owed to the deceased before the transfer of business, the Judge held that there was a valid equitable assignment supported by good consideration i.e. a novation agreement as just described.  And even if there was no good consideration, according to German v Yates, since the deceased had not revoked his direction before he died, his executor cannot ignore it.  Furthermore, the absence of good consideration (if that be the case)  does not matter because the trade debts had already been paid, and the 2^nd defendant is not seeking the Court’s assistance to enforce the equitable assignment.  On the other hand, if the JP¥ 3,000,000 were trade debts incurred after the deceased had transferred his business, the 2^nd defendant was, of course, entitled to receive them in her own right as the new proprietor of the business.

47.  We do not consider that the Judge was wrong on the law.  There was no wrongful conflation of the concepts of equitable assignment and novation.  He was correct when he held there was a tri-parte agreement as a result of the November 2008 meeting. As the Judge observed :

‘ 117. It does not really matter which is a more accurate description of the tripartite agreement between the Deceased, D2 and Sato of AEC. The important point is that, as submitted by D2, it is unthinkable that Sato would agree to pay the outstanding trade debts to her without knowing that this was the direction given by the Deceased. The legal effect of the tripartite agreement is that, whatever liabilities already owed by AEC to the Deceased were discharged, and would be replaced by liabilities in the same amount owed by AEC to D2; and, from then on, all liabilities arising out of the business would be owed by AEC to D2.’

VII.  Conclusion

48.  The plaintiff’s appeal is dismissed.  As the parties are not represented and having considered the background of this case, we will make an order nisi that will be no order as to costs of this appeal.