CHEUNG YUK YING formerly known as TUEN YIM CHUN v. SIK MUNG SANG

To: Library

                Judge Liu instructed that only one copy should be sent to you for placing in the public search file.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

------------------

--------------------

------------------

JUDGMENT

------------------

1. With the assistance of counsel, I found it possible to deliver judgment at the conclusion of these proceedings. I reserved my right to reduce my oral judgment into writing with full reasons, which I now do.

2. It is not altogether a happy case because it is a contest between two friends sharing the close link of master and desciple. It is more unhappy because there are serious allegations of fraud made by master against the desciple.

3. The master is an old man of 72. The desciple is a lady of middle age.

4. The background leading to the meeting of the two is important to understand the disagreement, to say the least, between the parties to this action. Despite the plaintiff's claim to an eminent family tie and the wealth, love and affection of the late Dr Tuen, I cannot accept that she was a woman of means.

5. According to a former friend of the plaintiff's, Madam Lee Kwan Tai, whose evidence impresses me, she met the plaintiff over 10 years ago in Southern Playground, Wanchai. She had a daughter and the plaintiff had a son, then 2 or 3 years old. The plaintiff complained that her husband had deserted her and that she was suffering from financial hardship. The supply of her electricity was cut. She went on public assistance and was drawing it in the company of Madam Lee on at least one occasion. She took in a sub-tenant and eventually ended up in a police station. Leaving her premises, the plaintiff took shelter with a friend for a few nights. Ultimately, she went to the Tung Po Apartment House. The bell boy of the Apartment House also came before me. He strikes me as a honest witness. He told the Court that the plaintiff stayed there free of charge for a year and took up sewing work.

6. In plaintiff's version, her condition was rosier. She claims that she is from a well-to-do family and that she merely went on public assistance to force her family to come to her rescue. She also sought Government facilities for locating her husband. He was found. Her husband sent her to Tung Po Apartment House. She merely sewed to kill time. She was then told by her husband to go to Singapore for money. The trip was a mystery. She was received at the airport by a Mr Wong. She had no idea how much she was to obtain. She only realized the amount when it was handed over to her husband in Hong Kong. Out of that trip, she took S$190,000.00 which she kept on her person for a time because of pressure from the Social Welfare to have her signing some documents.

7. The plaintiff claimed that from time to time, she had funds taken over from Taiwan to Hong Kong for her by one Miss Lee, being funds improperly removed out of Formosa by Dr Tuen for, inter alia, tax evasion. Her own father has been and, I believe she maintains, still is a Lieutenant-General in Formosa. In all she received $300,000 in small sums and another $300,000 in large sums. She volunteered her free service to the Monastery although she did not explain why she stayed in the defendant's premises rent free or at all.

8. The plaintiff confided her affairs, both family and financial, to one Madam Lee, a friend met in Southern Playground, Wanchai. That information is grossly inconsistent with the family background and resources now narrated by the plaintiff. I accept none of it. The plaintiff was destitute. She required public assistance and did obtain it.

9. After a period of free accommodation in Tung Po Apartment House, she was introduced to the defendant, the Abbot of the Castle Peak Monastery.

10. There were matters not to the liking of the defendant in the beginning. A certain gentleman intervened resulting in the plaintiff being continued to be accepted for working in the Castle Peak Monastery. Thereafter, she gained the trust and confidence of the defendant. She became his deciple.

11. According to the defendant, the plaintiff was hard working, intelligent and innovative. She suggested the introduction of the donation box. She did general cleaning, everywhere. She was good at deciphering charm lots. She was attentive in the affairs of the Castle Peak Monastery. She was subsequently put in charge of the financial side of the vegetarian restaurant. She was required to obtain small change from the defendant personally on settling guests' bills. She was subsequently given a duplicate key to his room where loose change was kept as were the defendant's other documents. She was subsequently made one of the two signatories to the joint accounts of the defendant and his Castle Peak Monastery. The Monastery was incorporated into a limited company called the Castle Peak Sik Mung Sang Monastery Co. Ltd. for the finance and management side of the monastery secular activities. The plaintiff was made one of the three directors/shareholders. Not noly did the plaintiff become a co-signatory with the defendant to various joint accounts but she was also made a co-holder of a bank safe deposit box in which documents of title were kept.

12. Hundreds of documents were executed. Those involved in this case are 9, processed by 4 firms of solicitors at different times.

13. The plaintiff claimed that out of her own funds she lent $180,000 to the defendant, $800,000 in 1976 and $100,000 on their visit to Formosa. It is unclear as to precisely how these sums were given, but the net result is that the plaintiff allegedly lent to the defendant, in all, $180,000. For these loans, according to the plaintiff, the defendant gave her half interest in 3 Flats; they are : Flat C on the 12th Floor of Great George Building, Causeway Bay, Flat E on the 6th Floor of Kin Wang Mansion and carpark and the 14th Floor Flat plus the flat roof and portion of the main roof of the Hing Ming Building.

14. For the Great George Building flat, according to the plaintiff, the defendant's own half interest was also subsequently assigned over to her. When the initial half interest in the Great George Premises was alledgedly given to the plaintiff by the defendant for $80,000 on the 18th May 1979, no cash was said to have changed hand. Different explanations came from the plaintiff and the defendant. Thereafter, a mortgage dated the 20th May 1980 was executed by the plaintiff and the defendant as well as the Requesting Parties, the Chit Wing Hong, for securing banking facilities to the limit of $300,000. On the assignment over of the defendant's remaining half portion of the Great George premises to the plaintiff by way of a Deed of Gift dated the 23rd July 1980, on the same day, she executed a mortgage with Chit Wing Hong as the Requesting Parties for securing $300,000 banking facilities.

15. As for the Kiu Wang flat, on the 26th March 1979, the plaintiff assigned to himself and the defendant in equal shares these premises for $94,000. On the 4th February 1983, the defendant's remaining half share was also assigned over to the plaintiff, this time for $96,000. Later, on the 10th May 1983, a Deed of Gift was made of these premises by the plaintiff in favour of the defendant. Subsequently on the 27th October 1983, the defendant sold the Kiu Wang Premises for $700,000.

16. As for the Hing Ming Premises, the defendant assigned over t6 himself and the plaintiff in equal shares for $80,000 on the 15th March 1979. Subsequently, on the 6th October 1980, it was sold for $330,000 by an assignment executed by both the plaintiff and the defendant.

17. There were 3,733 Hong Kong Bank Shares in the joint name of the plaintiff and the defendant. They were all sold between July 1982 to March 1983.

18. According to plaintiff, the defendant had knowledge and consented to each and every of these transactions.

19. As for the half share in each of the 3 flats, they were allegedly given to her in return of her loans of $180,000. Later, the plaintiff also maintained that these half interests were assigned over to her in order to tie the premises down so as to safeguard them against the demands of the defendant's adversaries. The plaintiff also conceded that these half shares were not assigned over to her at the true market value.

20. According to the plaintiff, she has been kept out of the flat in Great George Building. She is asking for possession of the premises and damages since early February last year. She also seeks an injunction to restrain the defendant by himself or his servants or agents from entering and using the same.

21. As for the proceeds of sale of the Kiu Wang premises, according to the plaintiff, these were disposed of as follows : $200,000 paid to one Lee Sau Kam who had her husband working allegedly in police headquarters, for expected favour shown. That sum was said to have been paid at the instigation of the defendant. Madam Lee Sau Kam did not live up to her expectation. The defendant was dissatisfied, and Madam dam Alice Lee was recruited to recover the amount so paid to Lee Sau Kam. The attempt was successful in part. Out of $200,000 pocketed by Lee Sau Kam, $150,000 was retrieved. Madam Alice Lee was certainly not offering her service gratuitously. She was allegedly rewareded $30,000. Hence, out of the $200,000, we are now left with $120,000 plus the remaining $500,000. That should be $620,000.

22. The plaintiff no longer recalls into which particular bank accounts this remainder was put and how that sum or any part thereof was withdrawn. But deposit went from Wing Lung to Mercantile Bank, then to Hong Kong Bank. It was all allegedly lifted by the defendant and thereafter whatever was left of it was deposited by the defendant with Wing Lung and subsequently with the Union Bank. Insofar as the plaintiff had access to the funds representing by what was left of the proceeds of sale of the Kiu Wang premises in one account or another, she claims to have withdrawn sums with the defendant's consent, express or implied, for ligitimate purposes, in the sense that they were taken out either for the purposes of the defendant or pursuant to the agreement or understanding between the plaintiff and the defendant that either party could use these funds freely.

23. As for the Hing Ming premises sold on the 6th of October 1980, there was only $320,000 odd, representing the net balance after legal charges and expenses. This sum was deposited into joint accounts and likewise used by the plaintiff allegedly with the consent, express or implied, and knowledge of the defendant. The plaintiff agreed that she had withdrawn for her own business in Taiwan more than she had deposited into accounts into which the $320,000 odd was put.

24. The plaintiff also produce bundle of particulars of the defendant's medical expenses in Exhibit “P4”. She claims that there are many more, some of which are being kept in the Great George premises.

25. As for the shares, they were allegedly sold with the consent of the defendant and the proceeds thereof were likewise used.

26. The plaintiff told the Court that she is in no position today to account for the nature and amount of each and every item of withdrawals or deposits. When the parties fell apart, she allegedly struck a bargain with the defendant and settled by paying him $190,000 in two sums after a District Office meeting said to have taken place on the 5th January 1987. The settlement was not evidenced in writing. The settlement took into account medical expenses and tonic food said to have been paid for by the plaintiff. It was maintained by the plaintiff, at least at one time, that the Great George Building half share was then mentioned and that the defendant was putting pressure to bear on her to repay this half share so as to force her to help his nephew. It was also claimed that she was returning the whole of the flat in Kiu Wang Mansion to set off the defendant's gift to her of the Great George Building flat on the advice of a fortune teller.

27. The defendant raised, so the plaintiff claimed, all these undeserving allegations against her because being in poor health, he had requested the plaintiff to assist him in having his nephew brought in from China and installed as a monk for taking over his establishment, worth allegedly some $26 million. The plaintiff violently disagreed with the suggestion. The parties did not see one another eye to eye. I do not really manage to understand why. Relationship turned from bad to worse. Because of the alleged demeanour of the guest implanted in Great George premises by the defendant, she left the same sometime, presumably in February 1987. She has since been locked out.

28. As far as the defendant is concerned, his claim is straight-forward : none of the transactions I have described was executed with his knowledge or consent; because of the trust and confidence reposed in the plaintiff and the affection he had for the plaintiff as his desciple, he allowed the Hing Ming premises to be sold for the educational expenses of the plaintiff's son. The plaintiff challenged that as being rediculous if only because her son was then in Primary 3, in the custody of her husband until his death on the 16th of October 1980 whilst the Hing Ming premises were sold some 10 days early on the 6th of October. For whatever reason, the defendant now makes no claim on the Hing Ming flat, sold for $330,000.00.

29. The defendant explained to the Court that, there was no earthly reason why any interest in the other 2 flats had to be conveyed to the plaintiff. Indeed, after the entire interest of the Kiu Wang premises passed to the plaintiff, she assigned all of it back to the plaintiff. There was, so the defendant alleged, also no reason for his assignment of even the half share in the Hing Ming premises to the plaintiff on the 15th March 1979. Although, the flat in the Hing Ming Building was claimed to have been given to the plaintiff only for the educational expenses for her son, in any case the defendant does not wish to make capital of the alleged earlier impropriety nor does he wish to claim, as counsel suggested at one stage, half of the consideration in the challenged earlier assignment. He knew not when, how and for how much it was sold. Equally, the defendant does not wish to claim half of the consideration for the assignment dated the 26th of March 1979 to himself and the plaintiff of the Kiu Wang premises.

30. In order of time, the alleged assignment of half share interest to the plaintiff dated the 15th March 1979 of the Hing Ming premises came first. It was followed by the assignment of the half share interest of the Kiu Wang premises on the 26th March 1979. Next came the assignment of the half share interest in Great George premises on the 18th May 1979. The defendant claims that he had no knowledge and did not consent to any of these transactions. He was unaware of any subsequent assignments of the premises entirely over to the plaintiff nor the Deed of Gift back to himself of the Kiu Wang premises. He was unaware of the mortgages and the sales. He knew not about the sale of the shares, nor the signing of the Transfer Forms.

31. The defendant's allegation is and has throughout been that as advised by the plaintiff, all the documents he was to assign related to the Monastery affairs. The accusation against the plaintiff is one of fraud. It is accepted by counsel for the defendant that evidence for establishing fraud must be clear and cogent.

32. The half share interest transfers of the 3 separate premises were transacted in Messrs Thomas Wang & Co. The plaintiff desires the attendance of Mr Thomas Wang and his staff, Miss Anita Wu and a Lee Ching Har. The firm of Messrs Thomas Wang & Co. is no longer in existence; the gentleman must have retired. Miss Anita Wu and Lee Ching Har cannot be found. But what is important is, and the defendant agrees, that Mr Thomas Wang and his firm were then the legal advisers to whom he went for consultation in Monastery affairs; They were his, the defendant's own solicitors. We have the documents in Court each containing a clause for interpretation. As against the evidence of the plaintiff that on each occasion in every solicitors' firm, documents had been duly explained to the defendant prior to execution, the defendant denies knowledge. We have no assistance from Mr Thomas Wang and his staff as to what precisely transpired in Messrs Thomas Wang & Co. But Messrs Thomas Wang & Co. were the defendant's chosen legal advisers for instituting proceedings against one Lee Hoi Kwong for attempted deceit. There is no suggestion that the defendant had difficulty with his own solicitors on that occasion. He admits to understanding Cantonese but is unable to speak it well. However, the defendant was adamant that on the other occasions "the purpose (he) consulted Thomas Wang was concerned with matters of Castle Peak Monastery and had nothing to do with (his) private properties." It would have been highly harzardous, if the plaintiff had been minded to defraud the defendant, to have such fraud perpetrated in the offices of the personal solicitors of the defendant.

33. Secondly, it is not a case, as at one time described by the defendant, of the documents being brought to him by the plaintiff for signature under the pretext that they concerned Monastery affairs. Apart from the mortgage "Dl", the documents in question, 8 in all, were executed in 4 different firms of solicitors. If frauds had been the objective of the plaintiff, it would have been equally harzardous to allow the defendant full and free contact and opportunity of communication with respective firms of solicitors on all these occasions. Moreover, the plaintiff would have had to make arrangements, not just with or in a single firm of solicitors but with or in 4 different firms of solicitors. The risks would have been astronomical.

34. Lastly, we have had the benefit of documents each containing an interpretation clause as well as viva voce evidence of conveyancing clerks in the person, first of all, of Mr Law in respect to the Deed of Gift dated the 10th May 1983 in respect to the Kiu Wang premises. Mr Law Sui Sun, then a conveyancing clerk of Messrs C.T. Chan & Co. testified that he duly interpreted the contents of the deed to both the plaintiff and a monk by the name of Sik Mung Sang. Although due to passage of time he was not in the position to remember details and particulars, he had the document executed after he was satisfied that the parties understood its contents. He could not remember if the plaintiff did any interpretation for the benefit of the monk. Nor could he remember whether the monk spoke any particular dialect or whether the monk asked questions through the plaintiff.

35. Mr Hong Po Kwan, a conveyancing clerk then of W.L. Yuen & Co. also interpretated the Deed of Gift dated the 23rd July 1980 in respect to the Great George premises as well as a mortgage, the memorial number of which is 1973444 of even date, Exbhit "P3". According to Mr Hong, he explained to the plaintiff and a monk by the name of Sik Moon Sang, the contents of the deed in Catonese. He would normally take instructions in Cantonese and speak to his client likewise in Cantonese. When the mortgage was processed, he only explained its contents to the plaintiff but the monk was present and within hearing distance. Early in time, Mr Hong explained the contents of a mortgage of the same premises, "D1" dated 20th May 1980, to the plaintiff and a monk by the same name. He maintained that if he had ever sensed any possible misunderstanding of his interpretation, he would have repeated it, but he could not recall whether there was any repetition of his interpretation on these occassions although he was satisfied that the parties understood otherwise he would not have allowed execution to proceed.

36. Mr Kwan Ka Fai, a conveyancing clerk of Messrs Liu, Chan & Lam, was in charge of interpretation of the assignment to the plaintiff by way of deed of gift of the defendant's remaining half share in the Kiu Wang premises on dated 4th February 1983. Mr Kwan told the Court that after he had duly interpreted contents to the plaintiff and a monk by the name of Sik Mung Sang, the monk signified his understanding by merely nodding. He saw the plaintiff converse with that monk before the interpretation. Possibly, it was a casual conversation, but it seemed to him to be about the transfer of the flat although he could not hear clearly. The conversation was brief. There were no more than a few sentences. Even after interpretation, it appeared to him that the plaintiff was talking to the monk about the transaction. According to the plaintiff, she had explained the transaction to the defendant at home, and the conversation in the solicitors' firm was casual. However, she said she did ask the defendant if he understood and the defendant told her that he did. The plaintiff's sequence is slightly confused; she seemed be talking about the Deed of Gift of the 10th May 1983 returning the Kiu Wang premises to the defendant rather than this assignment of half share on the 4th February 1983 for $96,000.

37. By reason of all these matters, none of the evidence in this case can be regarded as clear and cogent evidence of fraud. All allegations of fraudulant conduct against the plaintiff must be overshadowed by these matters that I have mentioned. These matters make it highly unlikely that the plaintiff would attempt on these occasions to prepetrate any fraud against the defendant. Moreover, the defendant's own evidence of fraud is far from being satisfactory.

38. One may never know the truth, but so far as cogent and clear evidence of fraud is concerned, in my view, the defendant has decidedly failed to establish his case against the plaintiff. There is no good cause, therefore, for me to intervene in and disturb any of these transactions in question.

39. Coming to the Hong Kong Bank shares, the defendant's allegation is that whatever documents he signed, they were allegedly held out by the plaintiff to be in connection with Monastery affairs. The defendant himself had initially purchased some Hong Kong Bank shares. How 3,733 Hong Kong Bank shares subsequently came to be jointly owned by the plaintiff and the defendant, the defendant is not in the position to explain. But his signatures on the Transfer Forms has not been challenged formally although the defendant himself is unable to say whether they were truely his. The Transfer Forms are not only in English. They contain an interpolating Chinese version. On some of the Transfer Forms like the one at p. 129 of the Defendant's Bundle, the name of the company, New World Development Co. Ltd., is in bold type chinese characters. It would have been unlikely for the defendant to have mistaken or to have been in any way misled into signing these Transfer Forms as documents of a different nature. It would have been highly improbable for the defendant to have been misled into believing that these Transfer Forms he signed were connected with Monastery affairs. Nowhere in these Transfer Forms signed by the defendant is written the name in chinese characters of the Castle Peak Monastery. Again, the allegation of fraud against the plaintiff by the defendant on these 3,733 Hong Kong Bank shares is evidently not supported by clear and cogent evidence. The defendant's allegation of fraud against the plaintiff on the Hong Kong Bank shares also fails.

40. That is not the end of the matter, the plaintiff is left with documents of title evidencing her entitlement to possession of the Great George premises. She has been kept out of them since presumably February 1987. There is very little evidence of the precise dispossession date. At one time, it was offered through counsel that a joint visit be made to the premises for the plaintiff to collect and take away her own belongings in the interim. To that suggestion, the plaintiff responded unfavourably. Hence the plaintiff, left with documents of title, must succeed and an order for possession for Flat C, 12th Floor, Great George Building, No. 11 Great George Street, Causeway Bay must be granted in favour of her. And with the order for possession goes an order for injunction. Damages represented by loss in rental be deferred and assessed, in an absence of agreement, by the Registrar. The plaintiff should have costs of the action against the defendant.

41. As far the defendant is concerned, failing in his allegations of fraud, he is driven to rely on a claim for an account against the plaintiff for the balance of the proceeds of sale from the Kiu Wang premises limited to a maximum of $500,000 as conceded by his counsel.

42. The balance of the proceeds of sale of the Kiu Wang premises in the sum of $500,000, jumped from. bank joint deposit account to bank joint deposit account. The plaintiff's allegation is that the defendant subsequently took it all over and banked it himself. I do not accept her evidence; nor do I accept that she paid the defendant $190,000 by way of settlement. The plaintiff had no means and was paid $2,000 a month by the defendant who also provided her with free accommodation. The allegation of this settlement is, I find, no more than an afterthought. The documents of title relating to the Kin Wang premises were, despite the failed allegations of fraud of the defendant, effectual. The Kiu Wang flat and car park finally were reverted back to the defendant on the 10th of May 1983. Thereafter the same was sold for $700,000 on the 27th October 1983. The $500,000 balance is now the remaining bone of contention. I do not accept that the plaintiff was given any authority or consent by the defendant to use any part of his $500,000 for her own purpose. The plaintiff, I find, was only authorised, as indeed it was admitted by the defendant, to operate the joint accounts into which this $500,000 was deposited for the benefit of the defendant himself or of the Castle Peak Monastery or for purposes duly sanctioned by the defendant. Hence the plaintiff must account to the defendant whatever is left of this $500,000 after all legitimate expenditure. Any expenditure for her personal use or benefit, in particular, must be accounted for and paid back by the plaintiff to the defendant.

43. I order therefore, instead of a mere judgment for payment of any sum of money, that the plaintiff should account to the defendant in the manner I have indicated, and an order for account against the plaintiff in favour of the defendant in that regard is ordered accordingly.

44. Allegations of fraud in respect to the Hong Kong Bank shares have also failed, but as to the proceeds, I equally find that the plaintiff had no beneficial interest in the, shares or their proceeds. She must account to the defendant apart from legitimate expenses either for the defendant's benefit or for the benefit of the Castle Peak Monastery or otherwise sanctioned by the defendant. Likewise, I order an account for those proceeds of sales or whatever is left of them against the plaintiff in favour of the defendant.

45. The Counterclaim of the defendant against the plaintiff has not been substantially successful. The plaintiff is called upon to account to the defendant on only 2 sets of proceeds of sale. This case has gone on long enough. I would take the defendant's pleading as having been properly amended to include a prayer for these accounts. The bulk of the allegations including the crucial allegations of fraud against the plaintiff have not proved to be successful. In the circumstances, subjected to what the parties have to say, I propose to allow the defendant only one third of the Counterclaim costs against the plaintiff.

46. Therefore, in conclusion, I order that the plaintiff do recover vacant possession of Flat C, 12th Floor, Great George Building, No. 11 Great George Street, Causeway Bay, Hong Kong against the defendant and that an injunction to retrain the defendant whether by himself or his servants of agents or otherwise howsoever from entering and/or using the said premises. The plaintiff is to have an Order for assessment of damages by the Registrar against the defendant unless the parties otherwise agree to quantum. I further order an account against the plaintiff in respect to the $500,000. balance of proceeds of sale in respect to the Kiu Wang premises and an account against the plaintiff in favour of the defendant in respect of the proceeds of sale of 3,733 Hong Kong Bank shares. Unless the parties otherwise agree, proceedings shall have to follow accordingly. The plaintiff is to have costs of the action against the defendant and the defendant is to have one third of the costs of the Counterclaim against the plaintiff.