HO LAI KING v. KWOK FUNG YING AND ANOTHER

HCA 305/2014

[2019] HKCFI 224

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 305 OF 2014

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JUDGMENT

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A. INTRODUCTION

1.  The plaintiff (“P” or the “Mother”) is the mother of the 1^st defendant (“D1”).  The 2^nddefendant (“D2”, and together with D1 “Ds”) is D1’s husband.  The late Mr Kwok Chun (“Kwok Chun”, “Husband” or “Father”) was P’s husband, and D1’s father.  The Deceased had a landed property in the Mainland at Phase 1 and Phase 2 of Dongjiao Renxiufang Nos 51 – 52, Liwan, Guangzhou, Guangdong Province (the “Property”). P’s claim and Ds’ counterclaim arose out of an alleged oral agreement between P and Ds about matters relating to the resumption of that Property and the compensation paid therefor (the “Alleged Oral Agreement”).  The main issues are whether the Alleged Oral Agreement existed, and if so, whether it was, given the family relationship between the parties, a legally binding contract.  This is the trial.

B.   THE BACKDROP

2.  Some facts are not in dispute.  They are set out in the Agreed Statement of Facts dated 17 January 2018 signed by Mr Y L Cheung and Mr Bowie Yip, counsel for P and Ds respectively.  I summarize them in this section.  They formed the backdrop to the dispute which subsequently developed between the parties.  The disputed facts will be dealt with in the latter part of this Judgment.

3.  Kwok Chun used to be a local resident of Guangzhou.  He came to Hong Kong in 1949, and had been residing here since.

4.  In 1959, P, then also a local resident of Guangzhou, was married to Kwok Chun in the Mainland.  They had two children.  Both were born in Guangzhou. The son, Kwok Siu Po (the “Son”), was born in 1965, and the daughter (ie D1) was born in 1969.

5.  In 1980, P, the Son and D1 moved to Hong Kong.  They have been living here since. 

6.  In 1990, the Son got married and moved out from the family home.

7.  In 2001, D1 married D2.She also moved out from the family.

8.  Kwok Chun died on 2 February 2012.  He made a will dated 26 February 2010 (“Will”), naming P as the sole executrix and trustee of the same, and giving all his estate whatsoever and wheresoever to her as thesole beneficiary[1].  On 13 August 2012, Grant of Probate HCAG 009868/2012was issued with the Will incorporated and annexed to it (“Grant of Probate”).

9.  Kwok Chun was the registered owner of the Property in Liwan.  It was constructed in the 1970s.  Kwok Chun’s parents, Kwok Chun, P, the Son and D1 used to live there.  After Kwok Chun’s mother died in 1989, and until its resumption, the Property had been leased out. 

10.  In or around mid-2012, the Property was subject to resumptionand re-development by the Mainland Government.  For that, compensation was payable.  It was primarily the compensation ultimately received by P which these proceedings are about.

11.  On 18 July 2012, during a morning tea gathering in a restaurant in Guangzhou, P, D1 and the Son met with inter alios Hu Zuo Wai (Son’s ex-schoolmate), Zhou Jie Lan (Son’s ex-teacher) and Liu Feng Ping (a friend of Zhou).  During that gathering, Liu Feng Ping explained about the allocation of property ownership after the death of the property owner in accordance with the Mainland succession law and usual practice.

12.  On the same date during an afternoon tea gathering in Guangzhou, P, D1, the Son and Hu Zuo Wai discussed about the interest in the Property and the Notary procedure.

13.  In or around August 2012, in a family gathering in Hong Kong, P, D1 and the Son discussed about the administration of the Property.

14.  On 18 February 2013, P, the Son and D1 attended the office of a China Appointed Attesting Officer.  There, P signed the Declaration of Inheritance dated 20 February 2013 (“Declaration of Inheritance”).  D1 and the Son signed the Declarations of Relinquishment of Estate dated 18 February 2013 (“Declarations of Relinquishment”).  

15.  In April 2013, P collected the original Declarations from D1, She then went to the China Notary Office in the Mainland for a formal application for change of ownership of the Property with the assistance of Kwok Kin Pong, who is P’s nephew (“Nephew”).  On 7 May 2013, the Liwan Notary Public Office of Guangzhou in Guangdong Province issued a Notary Certificate notarising P as the sole beneficiary of the Property (the “Notary Certificate”).  The address of the Property was changed from Nos 51 – 52 to No 52.

16.  In respect of the resumption of the Property, the amount of compensation originally offered by the relevant authorities in the Mainland was RMB 540,745.20.  After some negotiations with the Mainland authorities, the total amount of compensation was increased to RMB 3,000,000.00 in June 2013.  On 18 June 2013, P signed and executed one compensation agreement. On 29 July 2013, a Certificate of Change of Ownership of the Property was issued, which certified that P was the sole beneficiary of the Property.  Between 24 June and 13 September 2013, compensation in the total sum of RMB 3,000,000 was paid by the Mainland authorities to P. 

17.  On 13 May 2013, D1 through her then solicitors issued a letter of demand to P.  The relationship between P and Ds turned sour from there.

18.  On 15 July 2013, D2 commenced Small Claim Proceedings STC 026000/2013 against P for HK$50,000 for expenses he claimed to have incurred while negotiating with Mainland officials in relation to the resumption compensation of the Property.  Upon P’s application, the case was in February 2014 transferred to the Court of First Instance.

C.   P’S AMENDED STATEMENT OF CLAIM

19.  The Writ herein was issued on 21 February 2014.  It was indorsed with a Statement of Claim.  Certain amendments were effected inMarch 2016, resulting in the current Amended Statement of Claim (“ASoC”).  Only one cause of action remains relevant.  It runs as follows:

   (a)   P pleads the parties’ relationship (§1), Kwok Chun’s death, his Will and the Grant of Probate (§2), the Property (§3), the execution by Ds of the Declarations of Relinquishment (§4) and the Notary Certificate (§5);

   (b)   P then pleads in paragraphs 6 to 9 that:

“ 6. Afterwards, [Ds] approached [P] on many occasions, threatened and demanded [P] to divide shares of the estate of Kwok Chun to [D1], as particularized in paragraph 8 below. [P] had repeatedly told them that they are not entitled to the estate of Kwok Chun but that if [D1] treated her good, [P] may make provision in a will of her to give her estate to [D1] and to other family members (if see fit).

7. Through legal representatives, [D1] issued a demand letter dated 13 May 2013 against [P] alleging, inter alia, that [P] held the Property on trust for her and that the declaration she signed as stated in paragraph 4 above was invalid or ineffective as such.

8. On 15 July 2013, [D2] made a claim for HK$50,000.00 against [P] in the Small Claims Tribunal (STCT 026000/13). [D2] claimed that [P] authorized him to handle the deconstruction and relocation of the Property and that the amount he claims is the total expense incurred for such purpose. [P] disagrees having such contract, authorization or arrangement with him.

9. During the Small Claim Proceeding, [D2] further alleged that [P] had orally agreed to divide, after deduction of expenses, the interests of the Property into half and let her two children have half thereof each.  The Small Claim Proceeding became demanding and intensive.  Finally, in February 2014, [P] commenced the present High Court Proceeding and applied to transfer to [sic] the Small Claim proceeding to the present case.  An order for such transfer was made subsequently.”

   (c)   On the basis of those averments, P seeks against Ds the following Declarations:

“ i. Declaration that [P] is the sole beneficiary of the estate of late Kwok Chun in respect of his Hong Kong assets and the Property defined in paragraph 3 hereof;

ii.   Declaration that [Ds] are not entitled to the estate of late Kwok Chun in respect of his Hong Kong assets and the Property defined in paragraph 3 hereof, including not being entitled to the alleged authorization of [D2] from [P] and the alleged HK$50,000 as stated in paragraph 8 hereof.”

D.   DS’ AMENDED DEFENCE AND COUNTERCLAIM

20.  Ds’ Amended Defence and Counterclaim (“AD&C”) was dated 3 May 2016:

   (a)   Originally, Ds put a lot of matters in issue.  In particular, despite their admission of the Grant of Probate:

   (i)   Ds put P to strict proof that “the Will reflects the testamentary intention of Kwok Chun” (§3); and

   (ii)   Ds pleaded further (at §17 as part of the Amended Counterclaim) that:

“ In respect of the Will and Probate matter, [Ds] say [P] knew and ought to have known that it was the intention of Kwok Chun that [D1] shall be entitled to some estate. Further, or in the alternative, the Will does not apply to Kwok Chun’s estate in the PRC and according to the succession law of the PRC, [D1] is entitled to 1/3 of the interest of the Property.”

   (b)   However, much of those matters are no longer pursued.  As Mr Yip for Ds has clarified:

   (i)   in his Opening, that:

“ … this is not a contested probate case. Rather, the dispute between [P] and [Ds] was arising out of an oral agreement and the subject matter concerned is [the Property].” (§2)

   (ii)   in his Closing, that:

“ We have indicated in our Opening Submissions that this is not a probate dispute. The dispute between [P] and [Ds] was arising out of an oral agreement.” (§23)

“ The Counterclaim is premised on breach of an oral agreement (the ‘Oral Agreement’), made between [P] and [D1] on 7 July 2012 …” (§42)

“ The Counterclaim on the part of [D2] is pleaded in §16, AD&C …. He claims against [P] for the sum of HK$102,400 incurred in carrying out of the Oral Agreement.” (§43)

“ This case turns to determine solely on the ‘Agreed List of Issues’ which is basically stemmed from [Ds’] Counterclaim.” (§44)

   (c)   Ds’ pleaded case on the Alleged Oral Agreement is as follows:

“ 6. … On or about 7 July 2012, [P] made a telephone call to [D1] to seek for help from [Ds] to deal with or otherwise managethe Property. On that occasion, [D1] introduced to [P] that [D2]was a suitable person to deal with PRC matters. As a result, [P] and [Ds] entered into an oral agreement (‘the Oral Agreement’) with the following terms:

(1) [Ds] be appointed as [P’s] representatives jointly and severally to deal with or otherwise manage the Property;

(2) [Ds’] appointment shall include but not limited to negotiate for higher compensation amount of the Propertyor other form of compensation with the PRC Government officials;

(3) the amount of compensation of the Property (‘Compensation’) shall be determined by [Ds] and [the Son]. Their decision on the Compensation must be unanimous; and

(4) the Compensation will be equally shared by [D1] and [the Son] subject to deduction of tax levied by PRC Government, expenditures incurred by [D2] in the course of negotiation the Compensation.

7. Thereafter [Ds] did a series of acts to perform the Oral Agreement …[2]

…

16. … [D2] incurred the sum of HK$102,400 in carrying out the Oral Agreement.

…

18. In breach of the Oral Agreement, in particular the terms pleaded in paragraphs 6(3) and (4) above and on a date unknown to [Ds], [P] received the sum of RMB¥3,000,000 from the PRC Government as Compensation which was substantially below the reasonable amount of Compensation the PRC Government may award.

…

20 … From the information retrieved and to [Ds’] knowledge, the PRC Government would be willing to offer no less than RMB¥5,407,452 as Compensation.

21. [P’s] acceptance of the Compensation was without the consent of [Ds]. As a result, [D1] suffers loss and damage. Despite repeated demands, [P] fails and/or refuses to honour the Oral Agreement.

22.   [D1] avers that her entitlement pursuant to the Oral Agreement should be calculated as: (RMB¥5,407,452 less HK$102,400)/2.”

For ease of reference, I will refer to the four terms of the Alleged Oral Agreement pleaded in paragraph 6(1) to (4) of the AD&C as the 1^st, 2^nd, 3^rd and 4^th Pleaded Terms respectively.

   (d)   On the basis of the Alleged Oral Agreement, Ds claim that:

“ (a) [P] do account of profit of the Compensation of the Property;

(b) Damages to be assessed.”

E.   P’S REPLY AND DEFENCE TO COUNTERCLAIM

21.  P denies paragraph 6 of Ds’ Defence & Counterclaim (“D&C”)[3]. She puts Ds to strict proof of the Alleged Oral Agreement and its terms.  She denies having authorized D2 to handle the compensation of the Property as alleged.  She denies paragraph 7 of the D&C.  She pleads that those acts particularized therein, if existed, were/are “unilateral or done without the consent of [P] and/or her knowledge at the material times.  [P] would not have permitted [D2] to do such things as alleged” (§6).  She pleads that the negotiation was done by her with the assistance of mainly the Nephew.  She admits having received compensation for the resumption in the sum of RMB 3 million.  She denies that Ds’ consent was required for her to do so.  She denies that Ds have any interest in the same.

F.   THE AGREED ISSUES

22.  The issues, as set out in the Agreed List of Issues dated 16 January 2018, are as follows:

“ 1. Whether there was a binding agreement made between [P] and [Ds] on or around 7^th July 2012 (‘Oral Agreement’);

2. If the above issue is in the affirmative, the following issues are to be decided;

3. What is/are the term/terms of the Oral Agreement;

4. In particular, whether [P] warranted that [D1] would be entitled to half of the proceeds of compensation obtained from the demolition and resumption of the Property after deduction of the expenses incurred by [D2];

5. Whether [Ds] had performed the agreed terms; and

6.   Whether [P] has been in breach of the Oral Agreement.”

G.   THE DECLARATIONS SOUGHT BY P

23.  The two Declarations sought by P in the ASoC have been split up into four parts by Mr Cheung at paragraph 8 of his Closing Submissions, that:

“ (1) [P] is the sole beneficiary of the Property and the estate of late KWOK Chun in respect of his Hong Kong assets;

(2) [Ds] are not entitled to the Property and the estates of late KWOK Chun in respect of his Hong Kong assets;

(3) (An issue to be determined by this Court) [D1] is not entitled to any share or any part of the compensation money obtained by [P] from the PRC Government; and

(4)   [D2] is not entitled to the alleged authorization from [P] and the alleged HK$50,000 for expenses incurred for compensation negotiation.”

I will for ease of reference call them Declaration #1, Declaration #2, Declaration #3 and Declaration #4 respectively below.

G.1   Declarations #1 and #2

24.  I deal with Declarations #1 and #2 first.

25.  Mr Yip has now clarified that this is not a probate dispute, and that the Counterclaim arose solely out of the Alleged Oral Agreement. 

26.  I have considered the undisputed expert evidence on the Mainland succession law (as set out in the “中國法律專家聯合報告” prepared by 于海涌教授 and 馮育紅律師and signed on 11 May 2017), which I accept.  The gists of their opinion, as summarized by Mr Cheung and not challenged by Mr Yip, are that:

   (a)   Pursuant to《中華人民共和國涉外民事關係法律適用法》, given that the Will is valid under the laws of Hong Kong, it shall have the same legal effect in the Mainland, and can be enforced there;

   (b)   The procedure to inherit a deceased’s estate consists of the following: (1) the signing and execution of the Declaration of Inheritance and the Declaration of Relinquishment of Estate before a China Appointed Attesting Officer; (2) the submission of these of these Declarations (with will attached) to the China Notary Office in the Mainland; (3) the issue of China Notary by the China Notary Office;

   (c)   In order for P to obtain the interest in the whole of Kwok Chun’s landed property in the Mainland, she was required to obtain the China Notary from the China Notary Office as mentioned above and register inheritance;

   (d)   Since the Will did not mention either the Son or D1 as beneficiary, neither of them is entitled to any interest of his estate; and

   (e)   Under Mainland succession law, an “oral will” can only be made at times of emergency and it requires the presence of two witnesses.  An oral will is rendered invalid as soon as the testator is able to make a written will or an audio recorded will.

27.  In the light of the experts’ opinion, and given the wording of the Will, the Grant of Probate, and the undisputed factual evidence set out above, Declaration #1 and Declaration #2 should not to be controversial.

28.  Mr Yip nonetheless submitted that Declarations #1 and #2 ought not to be made.  He submitted that the making of declaratory relief is discretionary.  That of course is correct.  He then relied on Lai Wai Kuenv Wong Shau Kwong (unreported, HCA 3424/2003, 12 November 2004) and submitted that one of the legal principles governing whether the court should exercise its discretionary power to grant declaratory relief is whether P has a genuine need for the declaration sought.

29.  Lai Wai Kuen has little application to the present action.  It concerned an application for default judgment.  The relief sought was a declaration based on the doctrine of adverse possession.  In that context, Lam J (as the Vice President then was) observed that it is not the normal practice of the Court to grant declaratory relief without a trial, but that it is not an inflexible rule, and that in appropriate cases where the claimant has a genuine need for the same, one can be granted even in the absence of any trial.

30.  In any event, given the equivocal and inconsistent conduct on the part of Ds as reflected by the wording of the letter of demand dated 13 May 2013 (pleaded in §7 of the ASoC), the Small Claim Proceedings (pleaded in §8 of the ASoC), and their stance once adopted in paragraph 3 of their Amended Defence (of putting P to strike proof that the Will reflects the testamentary intention of Kwok Chun), I am of the view that P has a genuine need for Declarations #1 and #2.  Those Declarations are not academic or hypothetical.  I also do not accept Mr Yip’s submissions that P has in the circumstances overacted.  P is justified in seeking Declarations #1 and #2 to protect her interest in Kwok Chun’s estate.  I see no reason which weighs against the granting of the same.

G.2   Declarations #3 and #4

31.  In respect of Declarations #3 and #4, they overlap to a large degree with the Counterclaim.  There are also merits in Mr Yip’s submissions that in the eventuality of me dismissing the Counterclaim, there would be no need for Declarations #3 and #4 to be granted.  For these reasons, I will now proceed to consider the Counterclaim first.  I will come back to Declarations #3 and #4 at the end of this Judgment.

H.   THE COUNTERCLAIM

H.1   The 1^st Agreed Issue refined

32.  To recapitulate, the 1^st Agreed Issue is whether there was a binding agreement made between [P] and [Ds] on or around 7^th July 2012 (i.e. the Alleged Oral Agreement). 

33.  This Agreed Issue in fact comprises two distinct sub-issues, namely:

   (a)   whether the Alleged Oral Agreement as pleaded existed (“Sub-issue #1.1”); and

   (b)   if so, whether the Alleged Oral Agreement was legally binding (“Sub‑issue #1.2”).

34.  Sub-issue #1.1 is primarily factual.  Sub-issue #1.2 is both legal and factual. 

 H.2.a   Sub-issue #1.1 — The evidence

35.  This sub-issue is whether the Alleged Oral Agreement as pleaded existed. 

36.  I have set out Ds’ pleaded case above.  Ds aver that the Alleged Oral Agreement was formed during a telephone conversation D1 had with P on or about 7 July 2012 (the “7 July Telephone Conversation”).

37.  I summarize the relevant evidence as follows.

38.  D1’s material evidence in summary:

   (a)   D1 gave evidence.  Her witness statement was dated 31 March 2015, which she adopted as her evidence in chief.  She also adopted D2’s witness statement of the same date as her evidence in chief;

   (b)   D1’s witness statement was a short one with only 13 paragraphs.  In paragraphs 1 to 11 thereof, she dealt with various backgroundmatters like her personal background and her relationship withher Father, P and the Son.  She said that before her Father’s death, her relation with her parents was good. She was particularly close with her Father.  She talked about the Father’s wish to leave her one of his properties.  She said P was biased towards the Son, that her relationship with the Son had never been good, and that the Son thought all family properties should belong to him;

   (c)   Specifically in relation to the relationship between D1 and P:

   (i)   D2 said in paragraph 6 of his statement (which D1 adopted) that even after the Father’s death:

「……太太仍十分尊重和愛惜 [P]，平均一至兩個星期日回娘家探望 [P]，在生活細節上處處盡孝照料。」

   (ii)   D1’s evidence under cross-examination was to similar effect, that:

「問：因為我聽到證供就妳媽咪同兩個孫女感情都好㗎喎？

答：係。

問：即係妳兩個女女都好鍾意婆婆㗎喎，係嘛？

答：鍾意嘅，因為即係成日都過去吖嘛，咁樣囉。

問：好，咁即係話換言之妳除咗即係帶女女返去，會見到妳媽媽之外，當然不定期喇，即係都會成日同媽媽有通電話喇，係咪？

答：係。

問：咁呢--換言之即係如果咁睇，我哋當旁人咁睇，妳同妳媽媽嘅感情都唔錯㗎喎？

答：出於關心囉，大家都。

問：係，嗱，即係我哋就...

答：即係我唔可以講用感情好唔好，只可以就話因為我見到佢一個老人家住喺一間屋裡面，咁先生過咗身，咁其實我又身為女，咁咪即係點呀？都要關心佢。」

   (d)   Specifically in relation to the relationship between D1 and the Son, D1 said these in her witness statement:

「 8. 在父親在生時，母親尚算疼惜本人，母親是個傳統觀念較重的人，比較重男輕女。在父親過身後，本人感覺到母親與兄長關係明顯較為親密，母親言談之間都較為兄長著想，有時候兩人會私下決定家庭的事宜而不與本人商量。

9.   從小到大，本人與兄長的關係不太好。兄長的性格凡事都較為自己著想，對家庭的事情愛理不理‌……」

   (e)   In respect of the material events which led to Ds’ claim, D1 (at §12 of her statement) adopted what D2 had stated in his witness statement.  In gist, she said that in June 2012, P approached her for assistance in negotiating for higher compensation for the Property. She was reluctant to assist to start with.  D2 said in paragraph 8 of his witness statement that:

「太太告知本人當時她沒有即時答覆[P]的要求，原因是 [P]一直較偏心太太的兄長 [the Son]，往往只站在其兒子角度著想，在這件事情上一直瞞著太太，似乎只想讓 [the Son] 得到所有賠償。本人和太太衡量這件事情不容易處理，預計會花費想當的金錢和時間，因為是親人之間拜託，也不好意思問其取回所支出的費用，即使爭取到更高的賠償金額，也很有可能只是讓[the Son] 全部獨佔。本人和太太不想到處奔波勞累後，所得的成果全部只是由 [the Son] 得到，覺得這樣十分不值得，因此對這件事有所猶豫。」

   (f)   According to paragraph 9 of D2’s witness statement, P called D1 again on 7 July 2012 about the compensation matter (ie the 7 July Telephone Conversation).  D2 was next to D1 during that telephone conversation.  P was crying over the phone.  D1 said she was busy with her work and suggested that D2 could be appointed to assist in the matter.  According to D2’s witness statement:

「……[P] 當時回覆『唔理你揾邊個幫手，攞咗之後都係分比你地二兄妹，我夠食夠住，要嚟都無用，我一心都係爭埋比你地二兄妹』。在對話中，[P] 承諾把第51號房屋拆遷的賠償平均分給太太及 [the Son] ……[P] 和太太在電話中亦談到處理這事的細節，雙方達成清楚共識，[P] 委任本人及太太兩人為 [P] 的代表，授權本人及太太共同或分別處理第51號房屋的拆遷賠償事宜，範圍包括但不限於向內地各部門協商以爭取更高賠償金額。在電話中，本人及太太特別和[P] 約定好，無論最後爭取到的賠償金額如何，一定要有[the Son]、本人和太太三人的一致同意才可以接受。最後，[P] 在電話中清楚表示，第51號房屋的拆遷賠償，扣除在爭取更高金額所花費用及其他開支後，將全數由太太和 [the Son] 兩人平分……」

   (g)   D2 in his witness statement then gave some details on what he did in purported performance of the Alleged Oral Agreement, which evidence D1 also adopted;

   (h)   That the 7July Telephone Conversation existed was not seriously challenged by Mr Cheung during cross-examination.  What was in dispute was what were said during that conversation:

「問：好，得。好喇，得喇，我明，郭小姐，我而家向妳指出我哋嘅案情，妳只係聽清楚問題，妳可以同意、可以唔同意，但係妳嘅證供我哋聽咗就唔需要重複喇。我而家向妳指出，妳喺2012年妳所聲稱嘅7月或者7號，妳媽媽同妳有一個嘅電話嘅通話，嗰個係一個閒話家常，妳媽媽根本冇任何委託你哋辦理嗰啲拆遷事宜嘅意願嘅，妳同唔同意？

答：唔明，再講多次，sorry。

問：嗰個7月7 -- 2012年7月7日嗰個嘅，妳同媽媽嘅一個電話通話，嗰個只係一個閒話家常，妳媽媽完全喺電話裡面冇透露過要委託妳或者妳先生，或者你兩個人，去代表佢處理大陸呢個拆遷賠償嘅事宜？

答：唔同意。

……

問：郭小姐，重複個問題。我向妳指出，2012年7月7日嗰個--妳媽媽同妳嗰個電話談話，純粹只係同妳閒話家常，中間佢從冇向妳表達過一個意願要委託妳或者妳先生，或者妳兩個人去代表佢去處理大陸呢個拆遷賠償？

答：唔同意。

問：唔同意。喺呢個電話談話裡面，妳媽媽根本冇向妳表示，收到賠償嘅時候，妳哥哥同妳將會一人一半咁去分呢個賠償嘅款項，佢冇咁樣講過？

答：唔同意。

問：我亦都向妳指出，喺呢個電話談話裡面，妳媽媽從來冇少少任何嘅表達過，佢願意委託妳先生代表佢為呢件事去奔走，去搞呢個拆遷賠償？

答：唔--唔同意，唔同意。

問：因此更加不可能妳媽媽會同意呢，佢為呢件事所引致嘅任何嘅費用會喺呢個賠償金額或者任何嘅來源去賠償番佢嘅，佢冇講過呢樣嘢？

答：唔同意。

問：我亦都向妳指出，喺呢個電話談話裡面，妳媽媽從來冇承諾過喺將來嘅協議裡面，必須要妳或者妳先生，或者呢個郭肇波三個人去同意所有嘅文件，佢先可以動筆去簽署任何嘅協議，佢冇承諾過呢樣嘢？

答：唔同意。」

39.  D2’s material evidence in summary:

   (a)   I have set out above what D2 said in his witness statement about the 7 July Telephone Conversation;

   (b)   D2 gave evidence in Court.  He adopted his witness statement as his evidence in chief;

   (c)   The cross-examination of D2 concerned primarily what he had allegedly done in performance of the Alleged Oral Agreement.  He was not cross-examined about the 7 July Telephone Conversation.  Rather, P’s case, as put to him, was that P had never entrusted him or his wife to handle the compensation of the Property:

「問：好喇，咁你答咗我問題喇，好，得。劉生，我而家向你指出我哋嘅案情，呢件案件裡面，何麗瓊女士從來都冇委託你或者你太太擔任佢嘅代表人，向呢個廣州呢個有關當局談呢個拆遷賠償嘅問題，你有咩嘢回應？

答：完全嘅謊言。

問：由頭到尾，劉生，完全都係你過份積極又好，甚至難聽啲講句，你係僭越咗佢嘅權利，走去進行呢個企圖談判，你有乜嘢回應？

答：完全係唔可能。

問：唔。

答：完全係謊言。

問：我...

答：佢只有佢嘅委託，因為從中方--我哋冇--我哋冇興趣佢嘅遺產，我只係要番我自己應得嘅嘢，呢個作為一個投資計劃，我作佢嘅分析，甚至佢畀嘅資料畀我嘅時候，我首先自己做咗一份分析報告。」

40.  P’s material evidence in summary:

   (a)   P has given two witness statements (“1^st Statement” and “2^nd Statement” respectively).  The 1st Statement is the main one.  The 2^nd Statement simply clarified some specific issues;

   (b)   At paragraph 6 of her 1^st Statement, she said that:

“ Historically, the family relationships between me, my son, [D1] and [D2] had been normal and fairly good with no major dislike to each other. Relationships started to turn sour since May 2013by their demand letter (dated 13 May 2013), leading to the present dispute and litigation.”

   (c)   In her 1^st Statement, she denied having reached the Alleged Oral Agreement with Ds.  In particular, at paragraphs 38 and 41 of her 1^st Statement, she said:

“ 38. Through negotiation and assistance of my [Nephew], thePRC Government was willing to further increase the compensation amount to RMB3,000,000. After discussion with my nephew, I agree that the amount was fairly reasonable and I communicated my acceptance to the PRC Government…”

“ 41. At all material times, I never agreed and discussed with [D1/D2], and made offer to them to the effect that [D1] and/or [D2] would be entitled to share the interest of the Property or authorization for them or [D2] to approach and negotiate with the PRC Officials for demolition and compensation of the Property.”

   (d)   P gave evidence in court.  Her evidence was that she had forgotten most things.  During cross-examination, she said:

「我而家咁多年，我係唔記得，第一，我就病住緊，腳痛；第二，我真係完全以前做過啲嘢係唔記得滯㗎喇，好多嘢，真係，唔係話乜嘢。第一，我隻腳好痛；第二，而家你話協議乜嘢，你讀晒出嚟我聽，我先至知道、唔知乜嘢，你而家叫我咁睇，我就真係--我係唔明白你哋講乜嘢嗰啲我就，而家--即係我自己幾年，我係好冇記性嘅而家，點解--協議係講賠錢吖，定協議乜嘢咁先得㗎，我而家都唔知佢協議乜嘢，你叫我讀晒，我都唔識得晒呢啲字。」[4]

   (e)   In respect of the phone call on 7 July 2012, her evidence during cross-examination was as follows:

「問：先先講妳打過電話畀佢先，2012年7月7號，同唔同意？

答：你話我7月7號有冇打，我唔記得，有冇打、幾多號、幾多號，我又唔記得，即係打電話，我都好甚少。

問：妳就好似喊咁樣就同郭鳳英講嗰個51號房屋遷拆嘅賠償事情。

答：我唔會喊，為咗間屋唔會喊，拆咗間屋，我唔會喊嚟叫郭鳳英同我做嘢，點解我要--會喊呢？我呢間，第一，喊嚟做咩嘢啫？你係愛幾多就愛幾多，幾時搞，嗰陣我都未有耐想搞，因為點解呢？我個個要搞好晒嗰啲--我琴日都講我搞好晒啲證件，嗰陣我都未曾要愛話搞間屋，7月7號就，7月7號如果12年就，就完全冇呢件事添，7月7號就，點解我--幾時有冇--可能打電話係咪7號、8號，我都唔知，就冇完全話搞屋呢件事嘅，7月7號至話知之嘛，咁我邊會喊出嚟要搞間屋事啫，7月7號？

問：妳頭先講過話知，係知乜嘢？邊個知呀？兩個問題。

答：即係話知道話東漖坊頂我哋拆之嘛，咁之嘛，咁我--你話有冇打，我第一唔記得，你話有冇喊，就一定唔會喊，點解要為呢啲喊啫？

問：嗰個時候，7月嘅時候，2012年7月初，妳唔滿意賠償得六、七十萬喎，係咪？

答：你話嗰啲，我都完全躉低先，我唔會賠償住，唔會講住，7月7號，12年7月7號，就我唔會講住。

問：明白妳個答案，但係我個問題係賠償七十幾萬，妳是否不滿意？

答：七十...

問：好簡單，是否不滿意七十幾萬賠償額？

答：有七--梗係唔滿意㗎喇。

問：明白妳嘅答案。郭鳳英喺電話度都話咗畀妳聽佢就工作好忙，就唔可以有太多時間就幫到妳嘅，就建議就叫劉振威女婿幫妳就出面處理。

答：第一，我冇叫人幫，我從來都冇叫人幫。

問：得。繼續向妳指出，電話入面，妳咁樣覆佢嘅，『唔理妳搵邊個幫手，搵咗之後，都係分畀你哋兩兄妹，我夠食夠住，要嚟都冇用，我一心都係爭埋畀你兩兄妹』。

答：我冇講過呢啲嘢。

問：喺咁樣講之後，跟住--呢個時候，唔知妳知唔知，劉振威就係喺郭鳳英身邊嘅，妳知唔知？

答：我梗係唔知喇，電話就，我點知佢喺邊度呀？

問：因為妳咁樣講咗頭先嗰啲說話，郭鳳英先至係同劉振威係答應幫妳處理嗰個收地賠償嘅事情嘅？

答：我冇叫佢同我--幫我。

問：跟住我嘅問題就係講多幾日，就係2012年7月15號，7月15號嘅事情，請妳嘅回憶帶番去嗰日，許左偉係郭肇波嘅舊同學，係咪？

答：係。」

41.  The Son and the Nephew:

   (a)   It is not alleged that the Son was present during the 7 July Telephone Conversation. He could give no direct evidence on the existence or otherwise of the same;

   (b)   The Son testified in court.  He said that P had never mentioned about equal distribution of the compensation money between him and D1.  He said that he had accompanied P to the Mainland to negotiate the compensation.  He said that he had been with P to the Demolition Office.  It is however important to note his evidence that he had only been there twice.  His evidence in this regard is as follows:

“ 問：講到--頭先問咗你第二次親身陪你阿媽上去拆遷辦嗰度，就未曾傾出嗰個結論，同意嗰個數目，之後嘅事，之後，第二次之後，你仲有冇陪過何麗瓊女士返去拆遷辦嗰度，又係為咗收地賠償嘅事呀？

答：應該就好似冇，就係嗰兩次，即係話去傾過之後，咩嘢之嘛，佢哋--佢再返去同佢傾之嘛，再之後佢自己。”

   (c)   The Nephew also testified in court.  He is a Mainland resident.  He said that during the tea gathering on 18 July 2012, he did not hear P saying that the compensation was to be shared between D1 and the Son.  He said that he acted as P’s driver when P came back to Guangzhou to deal with the compensation matter.  He said that he had accompanied P to the Demolition Office on seven occasions.  He confirmed specifically that on five of those occasions, the Son was there also accompanying P.  He described how he and the Son sat to one side when P herself discussed the issues of compensation with the Mainland officials.

 H.2.b   Sub-issue #1.1 — Discussion

42.  In assessing the credibility and reliability of each witness, I had regard to the contemporaneous documents or circumstances, and the inherent probabilities of his/her evidence. 

43.  On the issue as to whether the 7 July Telephone Conversation took place and if so its contents, I do not find P’s evidence to be reliable.

44.  P was when giving evidence 80 years of age.  Age by itself is of course not per se a problem.  But as she has herself said during cross-examination, she had forgotten what she had done in the past. 

45.  Specifically in respect of the 7 July Telephone Conversation, P on the one hand said that she could not recall whether she had made that call.  On the other hand, she was adamant that she had never asked anyone to assist in the negotiation of compensation, or that she had said that the compensation would be shared amongst the Son and D1.

46.  It is important to note in this regard that P’s counsel, when putting her case on her behalf, did not dispute the existence of that telephone conversation, but just that it was one for “閒話家常”.

47.  According to the evidence, the relationship between P and D1 had been “normal and fairly good” in 2012.  It was indeed D1 who assisted P in obtaining the Grant of Probate in Hong Kong.  P is not educated.  In her own words during cross-examination:

「答：我唔識字，我唔理財嘅，我先生理財，我做工夫，幫佢拍檔做，一人做一樣。

問：即係凡係單據，用有文字牽涉嘅，妳就冇幫到佢喇？

答：冇㗎，我唔識字吖嘛。

問：妳啱啱講話唔識字，我想問多啲，中文字，妳能唔能夠睇得明白呀？

答：睇又七成零喇，睇就睇到七成喥，寫就兩成都唔得。」

That being the case, I find it inherently unlikely that P did not seek D1’s assistance in respect of the compensation of the Property.

48.  As I have summarized above, it is P’s pleaded case in her Reply that the negotiation for compensation was done by her with the assistance of mainly the Nephew.  It is specifically pleaded in paragraph 7 of the Reply that:

“ … [P] avers that after the death of Kwok Chun, [P] and her PRC relative [the Nephew] had worked together over the land resumption and compensation issue related to the Property.”

49.  However, according to the Nephew’s evidence during cross-examination, his role was primarily that of a driver.  Even on those occasions when he accompanied P to the Demolition Office, he and the Son only sat to one side, leaving P to do the negotiation.

50.  Also of significance is the discrepancy in this regard between the evidence given by the Son and the Nephew.  The Son’s evidence was that he had accompanied P to the Demolition Office only twice.  However, according to the Nephew’s evidence, he had been with P to the Demolition Office on seven occasions, and that the Son was there on five of those occasions.  This is not simply a difference on some minute details as to what had happened during those attendances at the Demolition Office. The discrepancy goes to the number of times they had been there. In my view, it is not something which reliable witnesses will get wrong. 

51.  On the question as to the role the Son and the Nephew played in the negotiation of compensation, I do not find their evidence to be reliable.

52.  D1’s evidence has its own problem.  I do not quite understand why she, being the one who according to her case had the 7 July Telephone Conversation directly with P, did not give a direct account of the conversation in her statement, but chose to rely on and confirm the less direct version given by D2 in his statement.  However, D1 did give oral evidence in Courtand was subject to cross-examination.  She was adamant in the existence ofthat phone call and its contents.  P’s counsel did not challenge the existenceof that call (though the contents were).  That P sought D1’s assistance in the negotiation of compensation is in my view also inherently more probable. 

53.  In all the circumstances, having considered all the relevant matters and evidence, and on the balance of probabilities, on the existence ofthe 7 July Telephone Conversation, the contents of the same, and the existence of the Alleged Oral Agreement, I prefer D1’s evidence as summarized above to that of P and her witnesses.  

H.2.c   Sub-issue #1.1 — Conclusion

54.  For the above reasons, I find as a matter of evidence that the Alleged Oral Agreement existed. I will call it the Oral Agreement from now on.

 H.3.a   Sub-issue #1.2 — The applicable law

55.  Sub-issue #1.2 is whether the Oral Agreement was legally binding.  I will consider first of all the applicable law.

56.  While an agreement is usually binding on the parties and as such legally enforceable, it is not necessarily so.  An agreement between for example family members, though exists, may not be legally binding, because the agreeing parties may not have the intention to be legally bound.  In the context of agreements between spouses, Atkin LJ explained in Balfour v Balfour [1919] 2 KB 571, at pages 578 – 579, that:

“ … those agreements, or many of them, do not result in contracts at all, and they do not result in contracts even though there may be what as between other parties would constitute consideration for the agreement. … Nevertheless they are not contracts, and they are not contracts because the parties did not intend that theyshould be attended by legal consequences. … All I can say is thatthe small Courts of this country would have to be multiplied one hundredfold if these arrangements were held to result in legal obligations. They are not sued upon, not because the parties arereluctant to enforce their legal rights when the agreement is broken,but because the parties, in the inception of the arrangement, never intended that they should be sued upon. Agreements such as these are outside the realm of contracts altogether.”

57.  While Balfour v Balfour was a case concerning husband and wife,the same consideration applies to other close family relations.  As observedby Danckwerts LJ in Jones v Padavatton [1969] 1 WLR 328, at page 332B, that:

“ … I have reached a conclusion that the present case is one of those family arrangements which depend on the good faith of the promises which are made and are not intended to be rigid, binding agreements. Balfour v. Balfour was a case of husband and wife, but there is no doubt that the same principles apply to dealings between other relations, such as father and son and daughter and mother.”

58.  That is not to say that there can be no legally binding agreement between family members.  There can be.  As Warrington LJ explained in Balfour v Balfour (at page 574):

“ … I do not for a moment say that it is not, possible for such a [legally binding] contract as is alleged in the present case to be made between husband and wife. The question is whether such a contract was made. That can only be determined either by proving that it was made in express terms, or that there is a necessary implication from the circumstances of the parties, and the transaction generally, that such a contract was made.”

59.  In effect, and in the context of agreements between close relations, there is a presumption of fact against an intention of creating any legal relationship.  The presumption is a strong one.  The onus of rebutting the same is on the party seeking to establish such an intention.  The test to be applied is an objective one.  As explained by Salmon LJ in Jones v Padavatton, at page 332:

“ … The daughter alleges that there was such an agreement, and the mother denies it. She says that there was nothing but a loose family arrangement which had no legal effect. The onus is clearly on the daughter. There is no dispute that the parties entered into some sort of arrangement. It really depends upon (a) whether the parties intended it to be legally binding, and (b) if so, whether it was sufficiently certain to be enforceable.

Did the parties intend the arrangement to be legally binding? This question has to be solved by applying what is sometimes (although perhaps unfortunately) called an objective test. The court has to consider what the parties said and wrote in the light of all the surrounding circumstances, and then decide whether the true inference is that the ordinary man and women, speaking or writing thus in such circumstances, would have intended to create a legally binding agreement.

   Mr. Sparrow has said, quite rightly, that as a rule when arrangements are made between close relations, for example, between husband and wife, parent and child or uncle and nephew in relation to an allowance, there is a presumption against an intention of creating any legal relationship.  This is not a presumption of law, but of fact.  It derives from experience of life and human nature which shows that in such circumstances men and women usually do not intend to create legal rights and obligations, but intend to rely solely on family ties of mutual trust and affection.  This has all been explained by Atkin L.J. in his celebrated judgment in Balfour v. Balfour [1919] 2 K.B. 571, 578–580.”

See also paragraph 2.168 of Butterworths Common Law Series, The Law of Contract (1999), that:

“ … the assessment of intention is made on the basis of two presumptions, first that agreements made in a family or social context are not intended to be legally binding and second,that agreements made in a business or commercial context are intended to be legally binding. Each of these presumptions is a presumption of fact, and is rebuttable. However, the onus of rebutting the presumption is on the party who seeks to displace it, and it has been said that in both contexts the presumption is a strong one[5].”

60.  When applying that objective test, and in deciding whether thatpresumption is rebutted, the court has to consider all the relevant surrounding facts and circumstances.  Relevant factors include:

   (a)   The express terms of the agreement — Balfour v Balfour (per Warrington LJ at page 574).

   (b)   The necessary implication from the circumstances of the parties, and the transaction generally—Balfour v Balfour (per Warrington LJ at page 574).

   (c)   Certainty of the agreement.  The issue of intention to create legal relationship is closely related to the question of certainty (or lack of it) of the agreement concerned.  On the one hand,lack of certainty can of itself be a reason for the unenforceability of the agreement — see Jones v Padavatton, per Salmon LJ at 332F–G and 334C.  On the other hand, it can (though not necessarily) be an indication which suggests that no contract was intended — it supports the inference that the parties did not intend to be legally bound — see Jones v Padavatton, per Fenton Atkinson LJ at 336G–H.

   (d)   The relationship of the parties when the agreement was made, and whether the parties were in amity or estranged.  In Merritt v Merritt [1970] 1 WLR 1211, Lord Denning MR, having been referred to Balfour v Balfour and Jones v Padavatton where the parties were living in amity, observed at page 1213 that:

“ I do not think those cases have any application here. The parties there were living together in amity. In such cases their domestic arrangements are ordinarily not intended to create legalrelations. It is altogether different when the parties are not living in amity but are separated, or about to separate. They then bargain keenly. They do not rely on honourable understandings. They want everything cut and dried. It may safely be presumed that they intend to create legal relations.”

   (e)   The subsequent conduct of the parties.  In the words of Salmon LJ in Jones v Padavatton (at page 336H):

“ … it is the subsequent history which gives the best guide to the parties’ intention at the material time.”

   (f)   The consequences of the agreement for the parties, or in other words the extent to which parties have relied on the agreement — see Jones v Padavatton, per Salmon LJ at 333D–H; see further as an illustration Parker v Clark [1960] 1 WLR 286.

61.  I apply the principles above when considering the evidence.

 H.3.b   Sub-issue #1.2 — Consideration of the evidence

62.  Given the relationship between P, D1 and D2 as mother, daughter and son-in-law, a presumption arises that the Oral Agreement was not intended to be legally binding.  It is a strong presumption of fact.

63.  Ds seek to argue that the Oral Agreement was legally binding.  The onus is on them to rebut the presumption.

64.  Indeed, given Ds’ status as the claimants under the Counterclaim,the onus is in any event on them to prove that the Oral Agreement was legally binding in the sense that the parties, despite their close family relationship, intended to be legally bound thereby.

65.  When considering the evidence and whether Ds have rebutted the presumption, an objective approach has to be adopted.  All the circumstances will have to be considered.  I set them out as follows.

66.  P was a senior lady in her mid-seventy at the time of the Oral Agreement.  She was poorly educated.  Her relationship with Ds had been, in her words, fairly good.

67.  D1 is P’s daughter.  Even after the death of the Father, she still cared about P.  P’s relationship with D1’s daughters was good.

68.  D1 was educated up to university level.  She worked as an assistant to general manager and had experience of handling financial matters.

69.  As described by D1, P first approached her in June 2012 for assistance in negotiating for higher compensation for the Property.  D1 was reluctant to assist for the reasons I have summarized above.  P called again on 7 July 2012.  She was crying.  She again sought D1’s help.

70.  Faced with a crying, aged, poorly educated and newly widowedmother seeking assistance in dealing with outsiders on compensation payable for resumption of a property owned by her recently deceased father, and objectively viewed, D1 was most unlikely to have any intention to take her mother to a court of law in respect of any dispute that might subsequently arise from an agreement reached in such circumstances.  That is particularly so given their fairly good relationship at that time, and that P’s relationship with her two granddaughters (Ds’ daughters) was good.  All these would also have borne upon D2’s intention. 

71.  I have taken into account D1’s evidence about her feelings towards the Son, and the way D1 said P had been favoring him.  That was primarily something between D1 and the Son.  It was D1’s own evidence that her relationship with P remained fairly good.

72.  D1’s feelings towards the Son in fact open up another issue.  I have summarized D1’s evidence in respect of her views on the Son.  The Son was not a party to the 7 July Telephone Conversation.  Given D1’s relationship with the Son, and had she intended the Oral Agreement to be legally binding, one would expect D1 to have clearly and expressly confirmed with the Son that he agreed to the same.  But when cross-examined on this issue, D1 could not give any detail of such confirmation.  That is in my view most surprising, and is inconsistent with the conclusion that D1 had treated the Oral Agreement as a legally binding contract.  Her evidence in this regard was as follows:

「問：好，但係無論如何，妳話妳呢啲--起碼我而家聽到三--或者可能係四個條件喇，都喺當日嘅電話裡面講咗出嚟嘅？

答：係。

問：妳覺得媽媽係聽得明嘅？

答：我覺得佢應該明。

問：妳覺得佢應該明？

答：唔。

問：好。咁中間妳又提到一定要有郭肇波本人同埋妳先生三個人一致同意吖嘛？

答：係。

問：好喇，咁及後妳喺咩嘢時候將呢個協議通知郭肇波？

答：之後我哋有食飯喇，有--即係點？有屋企--佢有返屋企，我有返屋企㗎嘛，咁係...

問：妳話畀得聽，喺呢個供詞裡...

答：我唔係好exactly記得邊一日通知佢喇，即係我唔係好exactly記得邊一日通知佢，咁但係只不過就話因為嗰一段時間屋企都係圍繞呢個話題去傾偈嘅，咁食飯又好，見面又好，其實都係圍繞呢啲話題，因為啱啱屋企...

問：乜嘢叫做呢啲話題？準確少少。

答：拆遷吖嘛而家，咁拆遷，屋企嘅拆遷，咁係屬於呢間屋企嘅最大事喇，如果係即係我都參與入嚟嘅話就。

問：冇錯。

答：咁咪喺個家庭碰面嘅時候通常都會傾呢啲，咁但係妳問我邊一日、邊一時同佢--同過佢...

問：唔，好。

答：...去通知郭肇波，我就真係唔係好記得喇。

問：我幫一幫妳吖，妳揭去266頁吖，第11段。

答：唔，唔。

問：最少有一次你哋專程為呢個賠償事情而奔走嘅啫，7月18號，妳同哥哥同埋媽媽就一齊去廣州吖嘛，係咪？

答：係。

問：咁呢件事個過程我哋都聽咗好多㗎喇，咁我想問下妳，直至到7月18號呢段時間，妳同妳先生同媽媽之前達成嗰個叫做喺電話度嗰個協議，嗰一日或之前有冇話畀妳哥哥聽？

答：我唔記得咗有冇，但係我唔知我媽媽有冇講。

問：即係妳冇講？

答：我唔記得咗。」

73.  The terms of the Oral Agreement did not expressly say that theOral Agreement was intended to be a legally binding contract.  If the parties indeed had had an intention to be legally bound by the Oral Agreement, Ds could have said so to P and made their intention plain.  They did not.  The Oral Agreement was not reduced into writing.  There had not even been any request for P to make a will to record her promise.

74.  The certainty (or lack of it) of the terms of the Oral Agreement is relevant when considering whether the parties had the intention to be legally bound.  In this regard, I agree with Mr Cheung that a number of the terms lack certainty in the following regards:

   (a)   in respect of the 1^st Pleaded Term, no written authorization had ever been executed by P in favour of either D1 or D2;

   (b)   in respect of the 2^nd Pleaded Term:

   (i)   the meaning of “to negotiate for higher compensation” is vague.  “Higher” than what, and “higher” by how much?  Even if one takes the amount of the compensation originally offered as the starting point, does it mean that so long as the final compensation would become higher by just one dollar, D1 would be legally entitled under the Oral Agreement to half of the compensation?

   (ii)   no time frame for the completion of the compensation negotiation had been set out;

   (iii)   the consequence of D1 and D2 failing to “to negotiate for higher compensation” (whatever that meant) was not set out.  If the Oral Agreement were meant to be legally binding, would it also mean that Ds could have been legally liable to P if they had failed to “negotiate for higher compensation”? I do not believe that had been the intention;

   (c)   in respect the 3^rd Pleaded Term, the consequence of the Son refusing to be a party to the Oral Agreement, or the consequence of the parties ultimately failing to reach any “unanimous” decision on the compensation was not spelt out.  No mechanism had been agreed to resolve any impasse.

75.  Mr Yip referred me to a number of authorities and submitted that any uncertainty of the terms of the Oral Agreement could be cured by the implication of additional terms, or the application of the standard of reasonableness, or the consideration of the concept of best endeavor.  I do not accept those submissions.  Given the nature of the terms as explained above, and in particular the inherent vague nature of “higher”, the absence of any express authorization and the lack of any mechanism to resolve impasse, I do not accept that any of those authorities could assist Ds.  More importantly, the Court is concerned here with the inference which the vague nature of the terms supports, namely the parties did not have the intention to be legally bound.  None of those authorities alters that.

76.  Mr Yip sought to rely on what he described as “the Kwok’s family tradition/practice to remunerate any work done by the family member(s)”.  He pointed to the evidence that when D1 was young, she was paid monies after performing certain household chores.  However, D1 was not saying that she could take her parents to court if, having done the household chores, she was refused the remunerations promised.  In my view, the existence of that so-called practice does not assist Ds. 

77.  Mr Yip’s reliance upon Ds’ subsequent conduct:

   (a)   Mr Yip then referred to the following conduct of D1 and D2 subsequent to the 7 July Telephone Conversation;

   (b)   He referred to the Declaration of Relinquishment signed by D1.  He did not seek to dispute the joint expert evidence (as summarized above).  He relied on the explanation given by Liu Feng Ping during the morning tea gathering on 18 July 2012 to the effect (rightly or wrongly) that D1 was entitled to ⅙ interest in the Property under Mainland succession law.  He asked “Whether [D1] was so filial to give up her share; or whether there was an underlying agreement”?  He submitted that “The truth must be that [D1] must have relied on the Oral Agreement and relinquished her share”;

   (c)   Mr Yip further referred to what he described to be “a series of act [sic] to negotiate for a higher Compensation”.  I have summarized in footnote 2 above the pleaded particulars of those acts.  They included, as categorized by Mr Yip, negotiation with the authorities, liaison with the relevant channels, pressure through the media and villagers, and reporting to family members.  I will not recite here the large amount of evidence adduced in those regards.  Mr Yip concluded that “[Ds] would not have put themselves through the above tedious work if not for the Oral Agreement”;

   (d)   I accept D1’s evidence that Liu Feng Ping during the morning tea gathering on 18 July 2012 gave the explanation to the effect (rightly or wrongly) that D1 was entitled to ⅙ interest in the Property under Mainland succession law.  I accept Mr Yip’s submission that the joint expert evidence was not available to Ds at that stage, and that at the time when the Declaration of Relinquishment was signed by D1, her state of knowledge on the relevant Mainland succession law would have been affected by the explanation she had received from Liu;

   (e)   In respect of the other acts of D1 and, more importantly of D2, assummarized in (c) and Footnote 2 above, I accept that they had been undertaken. Indeed, save some details, Mr Cheung did not dispute that those acts had been done.  Mr Cheung’s main stance was, as summarized in paragraph 56 of his closing submissions, that “far from pursuing on behalf of [P] a legitimate scheme of compensation, [Ds] had in mind seizing this opportunity to hi‑jack this land resumption and compensation procedure.  They have never been authorised by [P] to act for her; they have never delivered any or any meaningful performance pursuant to the Alleged Terms of the Oral Agreement ….”

   (f)   However, despite my findings, I am of the view that the subsequent conduct on the part of the Ds, when considered together with all the other matters set out above, is not sufficient to support the inference that the parties intended to be legally bound when the Oral Agreement was discussed and reached during the 7 July Telephone Conversation.  I have found that the Oral Agreement existed.  Ds had thereby made some promises to P.  They received some promises by P in return.  All these were done between close family members in circumstances described above.  What Ds did subsequently are readily explicable by, and are in my view more consistent with and referable to, such promises having been made between family members.  Those promises did not need to be intended to be legally binding before a daughter and a son-in-law would undertake those subsequent acts.  The likelihood is that they did so in honour of their promises made to P as mother and mother-in-law, and out of trust and natural love and affection.  That is far short of supporting the conclusion that the parties indeed intended that the mother (or mother-in-law) could be sued in a court of law should things go wrong.

78.  Having carefully considered the evidence and the submissions made to me, I am of the view that whether with reference to the express terms, or by necessary implication from the circumstances of the parties and the transactions generally, Ds have failed to prove that the parties had the requisite intention to be legally bound.  In my view, the Oral Agreement was, objectively assessed, on the balance of probabilities, and borrowing the words of Danckwerts LJ in Jones v Padavatton, “one of those family arrangements which depend on the good faith of the promises which are made and are not intended to be rigid, binding agreements.”  In fact, with or without the presumption, my decision would have been the same.

H.3.c   Sub-issue #1.2 — Conclusion

79.  For the reasons set out above, I find that Ds have failed to prove on the balance of probabilities that the Oral Agreement was intended by the parties to be legally binding.  On this basis, I dismiss the Ds’ Counterclaim.

I.   THE OTHER AGREED ISSUES

80.  As has been made clear by paragraph 2 of the List of Agreed Issues signed by counsel for the parties, the other agreed issues are engaged and call for decision only if I were to find that the Oral Agreement was legally binding between the parties.  I have concluded that the Oral Agreement, albeit existed, was not intended to be legally binding.

81.  In the light of my findings above, there is no need for me to consider the other issues.  I say only these.  The discussions above have in fact also addressed Agreed Issue #3.  Having done so, I see no value in addressing Agreed Issue #4, which in effect and curiously seeks to couch the 4^th Pleaded Term differently as a “warranty”.  In respect of Agreed Issues #5 and #6, they relate to issues of “performance” and “breach”, which should not and could not be considered in a vacuum but can only be answered against a legally binding contract.  Given my findings above, I do not find it appropriate to deal with them beyond what I have already stated above (and in particular paragraph 77(e) above).  In respect of the part of Ds’ Counterclaim for RMB5,407,452 based upon (a) the decision of the State Council of the Mainland on the passing of 《中華人民共和國土地管理法修正案(草案) 》and (a) certain information retrieved from the Yang Cheng Evening News Media, I agree with Mr Cheung’s submissions that in the absence of (a) any expert evidence on the relevant Mainland Law, and (b) any evidence on the source of the media information, Ds have failed to establish the basis of their claim in this regard.  I would have if necessary rejected that basis of the Counterclaim.

J.   DECLARATIONS #3 AND #4

82.  I now come back to Declarations #3 and #4.  In the light of my conclusion set out in Section H.3.c above, and having dismissed the Counterclaim, Declarations #3 and #4 have become academic.  I do not find it necessary or appropriate to make them.

K.   CONCLUSION AND DISPOSAL

83.  By reasons of the above, I grant Declarations #1 and #2.  I dismiss the Counterclaim.  I make a costs order nisi that P shall have the costs of the Claim and the Counterclaim, to be taxed if not agreed.