HO KUENG AND OTHERS v. LAU YUET HING

HCMP 370/2018

[2023] HKCFI 6

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 370 OF 2018

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BETWEEN

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JUDGMENT

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Introduction

1.  This is the trial of the Action.

2.  The Plaintiffs are the registered owners of the property known as Lot No.1685 in Demarcation District No. 11 situated in Tai Po, New Territories (“Land”) with a two storey building erected thereon. They became the registered owners of the Land pursuant to an assignment dated 30 November 2015 (“Assignment”) executed by a Madam Lee Siu (“Madam Lee”) on 25 November 2015. At all material times, the Plaintiffs held and still hold the Land as joint tenants upon trust for the Sin Tin Toa Home for the Aged (“Home”) save that the 1st Plaintiff passed away in 2017.

3.  Madam Lee was born in 1921 and passed away on 1 October 2016. The Defendant was appointed the sole executrix of Madam Lee’s last will executed on 22 May 2009 (“Will”).

4.  Sin Tin Toa (先天道) is said to be a religious belief. The Home was at all material times and is a non-profit making charitable residential care home for the elderly.

5.  The Land was originally acquired by Madam Lee and 3 others as joint tenants under a New Grant No 10515 in October 1971 (“New Grant”). After acquisition of the Land, the two storey building known as Tung Yuan Yuan (銅源園) was built on it (the Land together with Tung Yuan Yuan are collectively referred to as “Property”). After the other joint tenants had successively passed away, Madam Lee became the sole owner in 2010.

6.  The Property is the subject of dispute in the present Action.

7.  The Plaintiffs’ case is straightforward. In the absence of any vitiating factors, Madam Lee, who had the requisite mental capacity, did on 25 November 2015 sign and execute a Memorandum of Agreement for Assignment of Real Property dated 20 November 2015 (“Memorandum”) and the Assignment (collectively “Assignment Documents”) by which Madam Lee assigned the Property to the Plaintiffs. They seek vacant possession of the Property and mesne profits from 1 November 2016 onwards against the Defendant until vacant possession of the Property is delivered to them.

8.  The Defendant’s original pleaded case as per her Defence and Counterclaim filed in November 2018 was simple. It was based on the alleged mental incapacity of Madam Lee at the time of executing the Assignment Documents in November 2015 and sought a declaration that the Assignment was null and void. The evidence in support is largely if not exclusively a matter of medical evidence.

9.  Then, on 27 September 2021, almost 6 years after Madam Lee had executed the Assignment Documents and less than 5 months before the trial, the Defendant, adopting a scattered gun approach, made sweeping amendments to her original 5-page Defence and Counterclaim and challenged the validity of the Assignment on the grounds not only of (1) lack of mental capacity but also (2) undue influence, (3) unconscionable bargain, (4) unilateral mistake, and (5) non est factum. In the Amended Defence and Counterclaim (“ADNC”) the Defendant counterclaims for a declaration that the Assignment was null and void or voidable and for an Order that various documents registered against the Land at the Lands Registry be vacated.

10.  The Defendant also claims to be entitled to possession and occupation of the Land as the executrix of Madam Lee’s estate.

The parties’ case

Plaintiffs’ case

11.  In light of the Plaintiffs’ Opening, the following is a brief summary of their case.

12.  The Plaintiffs are the trustees of the Home which is an elderly home set up by believers of Sin Tin Toa.

13.  Sin Tin Toa is a religious belief. Madam Lee was a believer of Sin Tin Toa and devoted much of her life to this religion, in particular to Tung Yuan Yuan which is one of the Tongs (堂) of Sin Tin Toa for worshipping purposes.

14.  In 1971, Madam Lee and three other believers of Sin Tin Toa viz Siu Chi Fong, Au Ngan and Yip Chi Kin acquired the Land as joint tenants under the New Grant. They then constructed Tung Yuan Yuan on the Land.

15.  Tung Yuan Yuan made donations to the Home until at least the 2010s.

16.  As the other joint tenants passed away one after the other, in 2010, Madam Lee became the sole legal and beneficial owner of the Land by the operation of survivorship.

17.  Madam Lee resided in Tung Yuan Yuan at first. In about 2009, she started residing at the Buddhist Sum Ma Shui Ying Care and Attention Home for the Elderly in Kwun Tong (“Buddhist Home”) as arranged by her cousin Tsui Sau Ying (“Tsui”). At all material times, Tsui was a director of the Buddhist Home. Madam Lee moved into the Buddhist Home because it would be more convenient for Tsui to arrange her affairs there.

18.  In 2015, Madam Lee intended to donate the Property to the Home. The executive committee of the Home independently ascertained Madam Lee’s intention and resolved to accept the gift from her. They instructed Messrs. Tang, Wong & Cheung (“TWC”) to prepare the necessary conveyancing documents.

19.  On 25 November 2015, Ms Cheng Yuen Yee (“Ms Cheng”)[1] of TWC met Madam Lee at the Buddhist Home where she was residing for the execution of the Assignment Documents. Madam Lee executed those documents in the presence of Ms Cheng after she had taken steps to ascertain and was satisfied with Madam Lee’s mental capacity. That Madam Lee had the requisite mental capacity to execute the Assignment documents is confirmed by the Plaintiffs’ expert Dr Leung Chi Ming (“Dr Leung”)[2].

20.  Pursuant to the Assignment, the Plaintiffs became the registered owners of the Property as joint tenants. By a declaration of Trust dated 30 November 2015 executed by the Plaintiffs, they declared themselves to be holding the Property on trust for the Home.

21.  On 14 October 2016, TWC wrote to the Defendant demanding for delivery up of vacant possession of the Property “before the end of the month” ie 31 October 2016. Despite repeated demands, the Defendant has failed to deliver up vacant possession. Since the Defendant failed to deliver vacant possession by 31 October 2016 and had become a trespasser, mesne profits should accrue as from 1 November 2016.

22.  On 21 March 2018, the Plaintiffs commenced the present proceedings.

Defendant’s case

23.  In light of the Defendant’s Opening, a brief summary of her case is as follows.

24.  In 1971, Madam Lee with 3 other devoted Buddhists viz Siu Chi Fong, Au Ngan and Yip Chi Kin (“Initial Owners”) acquired the Land as joint tenants under the New Grant by surrendering Section A of Lot No. 1103 in Demarcation District No. 11. At the same time, some of the Initial Owners also owned the Remaining Portion of Lot No. 1103 in Demarcation District No. 11 (“Surrounding Property”).

25.  Since around 1973 up to the present date, the Land and the Surrounding Property have been used together as single enclosed premises for a Buddhist temple ie Tung Yuan Yuan which was erected on the Land. Another two-storey building was also erected on the Surrounding Property to facilitate and to support the operation of Tung Yuan Yuan.

26.  From around 1973 to May 2009, Madam Lee was the person-in-charge of Tung Yuan Yuan, which had all along been a Buddhist temple, not a Sin Tin Toa temple.

27.  During her lifetime, Madam Lee was a devoted Buddhist who became a respected elder such that many children in her neighborhood addressed her as “godmother” (契媽). Au Kam Lun[3] (“Au”), is one of her god children.

28.  The relationship between Madam Lee and the Defendant was much closer and more intimate than her relationship with her god children. The Defendant met Madam Lee when she was around 10 years old in about 1959. Since then, Madam Lee was the mentor of the Defendant in Buddhism for over 50 years. During this mentorship, Madam Lee and the Defendant developed a very close bond with each other akin to a “mother and daughter” relationship.

29.  Since 1985, the Defendant started to assist Madam Lee in the management of Tung Yuan Yuan on a voluntary basis. In around May 2009, Madam Lee moved into the Buddhist Home. Before Madam Lee had left Tung Yuan Yuan, she appointed the Defendant to be the person-in-charge of it.

30.  On or about 22 May 2009, Madam Lee passed Tung Yuan Yuan to the Defendant as her successor to promote and glorify it. Madam Lee, who had no off springs, executed a will dated 22 May 2009 (“2009 Will”) under which all her real and personal property was bequeathed unto the Defendant upon trust to pay and transfer the same to one or more Buddhist temples (佛堂).

31.  On 14 September 2009, Madam Lee made a declaration (“Declaration”) that the Defendant was to be in charge of managing all the affairs of Tung Yuan Yuan. Madam Lee also executed a deed of gift dated 24 September 2009 (“2009 Deed of Gift”) to give her 1/3 interest in the Surrounding Property to the Defendant. It was Madam Lee’s instructions to Messrs. Anthony Kwan & Co (“AK & Co”) that the 2009 Deed of Gift was meant to cover the Land, but, unknown to Madam Lee and the Defendant, this was not reflected in the 2009 Deed of Gift prepared by AK & Co.

32.  Since 2009, the Defendant has taken over and has been managing Tung Yuan Yuan.

(1) The Defendant has contributed to paying the expenses of Tung Yuan Yuan, including but not limited to, government rent and rates, and water and electricity bills, which exceeded the donations from the worshippers/visitors.

(2) The Defendant has organised Buddhist events there.

(3) The Defendant has improved various facilities including but not limited to the kitchen, the gates and the washrooms.

33.  Madam Lee was mentally (and physically) too incapacitated to execute the Assignment. In November 2015, Madam Lee was around 95 years old, with a history of very poor health and severe illnesses since at least June 2011, including diabetes, cerebral vascular disease, hypertension and bladder cancer. By November 2015, Madam Lee had been suffering from progressive deterioration of her mental condition since at least April 2012.

Deliberation

The issues and witnesses

34.  While the parties have submitted an Agreed Statement of Issues in Dispute dated 11 November 2021, in this court’s view, the material issues can be simplified as follows.

35.  First, whether Madam Lee signed and executed the Assignment.

36.  Second, if the answer to the first issue is yes, whether the Assignment is vitiated on the ground of Madam Lee's lack of mental capacity.

37.  Third, if the answer to the first issue is yes, whether the Assignment is vitiated on the grounds of:

(1) undue influence;

(2) non est factum;

(3) being an unconscionable bargain;

(4) unilateral mistake.

38.  At the trial, the Plaintiffs called 4 factual witnesses and 1 expert witness Dr Leung.

(1) The 2^nd Plaintiff Ms Ma So Chun[4].

(2) Au[5], a godson of Madam Lee.

(3) Ms Chiu Kwai Mei (“Ms Chiu”)[6], the superintendent of the Home at the material time.

(4) Ms Cheng[7], an Assistant solicitor of TWC at the material time.

(5) Dr Leung[8].

39.  The Defendant called 2 factual witnesses and 1 expert witness Dr Tsang Fan Kwong (“Dr Tsang”).

(1) The Defendant herself[9].

(2) Ms Chan Lai King[10] (“Ms Chan”), the secretary of Tung Yuan Yuan from 2010 to 2018 who assisted the Defendant in managing it.

(3) Dr Tsang[11].

40.  As far as the factual witnesses are concerned, this court has carefully considered the manner in which they testified including their demeanour and assessed it against the contemporaneous documentary evidence and the known and undisputed circumstances of this case. This court has in particular considered the inherent probabilities of his/her testimony and assessed his/her credibility accordingly.

41.  Of the Plaintiff’s factual witnesses, there is no doubt that Ms Cheng is the most important one as she was the one who attended to Madam Lee’s execution of the Assignment. Her testimony will be analysed in greater detail later in this Judgment.

42.  As for the 2^nd Plaintiff, the most important part of her testimony is that around September/October 2015, she and a few executive members or directors of the Home went to ascertain Madam Lee’s intention to make a gift of the Property to the Home to which Madam Lee answered in the affirmative. This court will in so far as necessary refer to her testimony later when considering the plea of undue influence.

43.  The 2^nd Plaintiff had also visited Madam Lee again in early November 2015 before the Assignment was signed by Madam Lee. During the visit, Madam Lee was able to recognize her and managed to have a chat with her - this reflects positively on Madam Lee’s mental condition at the time.

44.  Au’s testimony mainly consists of background information such as the establishment of Tung Yuan Yuan, Madam Lee’s religious belief, the Defendant’s relationship with Madam Lee and her involvement in the running of Tung Yuan Yuan. There is also a bit of hearsay evidence about Madam Lee’s intention to give her interest in the Property to the Home in mid-July 2015.

45.  Au’s credibility was not challenged in the course of a rather short cross-examination. Importantly, and rather surprisingly, it was not put to Au that he was the one who exercised undue influence on Madam Lee and as a result she made a gift of the Property to the Plaintiffs, albeit that is undoubtedly the Defendant’s case throughout, as stated in Mr Wong’s Opening, re-confirmed by him at the end of Day 2 and repeated in his Closing. His testimony will be referred to when this court considers the plea of undue influence.

46.  Ms Chiu’s testimony is not controversial and her credibility was not challenged in a short cross-examination - the transcript of her cross-examination was only 3 pages long. The more relevant parts of her testimony consist of her visits to the Buddhist Home in September/October 2015 together with the 2^nd Plaintiff to see Madam Lee and Madam Lee was able to keep on chatting with her - which reflects positively on Madam Lee’s mental condition at the time.

47.  The Defendant’s testimony is general in nature about her relationship with Madam Lee, the establishment of, her involvement with and ultimately her taking over of the management of Tung Yuan Yuan, Madam Lee’s religious belief and lastly her physical and mental health. It is the last part that this court intends to discuss in the section “Mental capacity of Madam Lee”.

48.  Ms Chan’s testimony is rather peripheral. She did not know and only saw Madam Lee once in September 2016, well after the date of the Assignment. Her testimony is principally about how she assisted the Defendant in running Tung Yuan Yuan as its secretary from 2010 to 2018.

49.  As for the expert witnesses, there is some history regarding the appointment of Dr Tsang as the Defendant’s expert.

50.  By an Order dated 29 November 2021, the Defendant obtained leave to appoint Dr Wong Chung Kwong as her expert witness in place of her previous expert Dr Dong Yuet Sun Jimmy, and to prepare and file a new expert report. The expert report of Dr Dong dated 28 September 2019 and the relevant parts of the Joint report by Dr Dong and Dr Leung dated 17 October 2019 were expunged from the trial bundles.

51.  The Defendant subsequently dropped Dr Wong. By an Order dated 16 February 2022, leave was granted to the Defendant to appoint Dr Tsang instead and to adopt wholesale the expert report of Dr Dong and the relevant parts of the Joint report by Dr Dong and Dr Leung. Subsequently, Dr Tsang has prepared a 1-page report dated 21 February 2022 in which he simply adopted the said expert report of Dr Dong and the parts of the Joint expert report by Dr Dong as his own expert opinion.

Whether Madam Lee did execute the Assignment Documents

52.  In this court’s view, the answer to this is open and shut.

53.  Ms Cheng is the only one who has direct personal knowledge of the matter while the Defendant or her other witness Ms Chan does not. This is reflected in the original Defence and Counterclaim at paragraph 7, retained in the ADNC, that the Defendant has no knowledge of the matters averred in paragraphs 8 to 9 of the Statement of Claim which pleaded to Madam Lee’s execution of the Assignment Documents in front of Ms Cheng.

54.  Notwithstanding the above, in his Opening at paragraph 22, Mr Wong still sees fit to deny Madam Lee’s execution of the Assignment. This denial was never withdrawn throughout the trial.

55.  In Mr Wong’s Closing, from paragraph 95 onwards, he, no doubt on instructions, even attacks Ms Cheng, an officer of the Court with no incentive to lie on oath and none has been suggested, as an incredible witness and implicitly suggests Ms Cheng had turned a blind eye to Madam Lee’s alleged severe dementia. Mr Wong further accuses Ms Cheng of having compromised her integrity or failing to do her work to a proper standard thereby breaching the Solicitors’ Practice Rules, Cap. 159H.

56.  Lastly, and most regrettably, in his oral closing submissions, Mr Wong submits that Madam Lee’s signature on the Assignment is forged. This is so despite the fact that forgery has never been pleaded.

57.  None of the attacks are remotely justified. They only go to show how desperate the Defendant is in challenging the Assignment and pursuing her claim to the Property as the executrix of Madam Lee’s estate.

58.  Ms Cheng came across to this court as a truthful witness. Her answers to questions put to her were firm, direct and to the point. This court did not detect any embellishment of her testimony. When Ms Cheng was asked something the answer to which she could not remember, she would directly say so instead of buying time e.g. by constantly asking counsel to repeat his question and making up her answer along the way. In fact, some of her answers can be regarded as being adverse to the Plaintiffs’ case e.g. she accepted that she did not interpret everything in the Assignment Documents to Madam Lee rather she relied on her training and experience as a conveyancing lawyer to interpret and explain what she considered to be the more important parts of them. Ms Cheng also accepted that she only spent 15 minutes in explaining the gist of Assignment Documents to Madam Lee, one of the criticisms made by Mr Wong as being insufficient for the task at hand. Overall, her testimony has withstood Mr Wong’s cross-examination.

59.  The gist of Ms Cheng’s testimony is as follows.

60.  She attended the Buddhist Home to visit Madam Lee in the morning of 25 November 2015 upon the instructions of her principal. The purpose of the visit was to explain the contents of the Assignment Documents to Madam Lee and witness her signatures on them.

61.  After self-introduction and checking Madam Lee’s ID card, Ms Cheng chatted briefly with Madam Lee to ascertain her mental capacity and asked her questions like what her name was, the date of that day and whether she had her breakfast. Ms Cheng observed that Madam Lee replied sensibly and without difficulties.

62.  Thereafter, Ms Cheng explained the contents of the Assignment Documents to Madam Lee in Cantonese, not word for word but only the important parts. No one else was present. Ms Cheng asked if Madam Lee understood what she said and whether that was her own will and instructions, and Madam Lee confirmed that it was.

63.  As good conveyancing practice, Ms Cheng asked Madam Lee to sign on the Assignment Documents in the same manner as she signed on the Memorandum of Agreement by the Grantee page of the New Grant dated 1 October 1971. Madam Lee then signed the Assignment Documents in front of Ms Cheng. The whole process of explanation took about 15 minutes.

64.  Ms Cheng’s testimony is corroborated by her signature and chop on the Assignment Documents and by a contemporaneous attendance note that she prepared on the same day after returning to her office. Her testimony is further corroborated by the fact that Madam Lee’s signatures on the Assignment Documents are similar, though not identical, to those on the New Grant in 1971 and indeed her 2009 Will.

65.  At this juncture, it is convenient to deal with a related submission by Mr Wong in his Closing that Madam Lee’s intention was to pass Tung Yuan Yuan (consisting of the Property and the Surrounding Property) to the Defendant. In this regard, Mr Wong submits that Madam Lee’s intention was consistent with the following:

(1) On or about 22 May 2009, Madam Lee passed Tung Yuan Yuan to the Defendant as her successor to promote and glorify it by saying “我將佛堂交俾你發揚光大嗱”and executed the 2009 Will under which the Defendant as her executrix was to pay and transfer all of Madam Lee’s real and personal property to one or more Buddhist temples (佛堂).

(2) On 14 September 2009, Madam Lee made the Declaration that the Defendant was to be in charge of managing all the affairs of the Temple (有關本人 李少，原居於大埔鐵尾仔南坑村24號，之屋宇及種植地，全權授予劉月馨女士管理一切事務，別人不得干涉).

(3) Madam Lee executed the 2009 Deed of Gift to give her 1/3 interest in the Surrounding Property to the Defendant.

66.  Mr Wong also relies on documents submitted to the Social Welfare Department by Madam Lee between 2010 and 2012 in support of the alleged intention of Madam Lee.

67.  The short answer to all these is that none of the documents actually passed the Property to the Defendant and even assuming for the sake of argument that the Defendant’s testimony on Madam Lee’s intention in 2009 is accurate, it has been superseded by Madam Lee’s intention as expressed in the Assignment and Ms Cheng’s testimony which this court accepts as truthful.

68.  To conclude, without laboriously reciting Mr Wong’s unfair and misconceived attack on Ms Cheng, this court has no hesitation in rejecting his submission and accepting Ms Cheng’s testimony. This court finds as a fact that Madam Lee did execute the Assignment Documents in November 2015.

Mental capacity of Madam Lee

Overview

69.  This is the key issue in the Action.

70.  The principal evidence is the expert reports adduced by the parties based as they were on the medical history of Madam Lee. Both experts agree that Madam Lee suffered from dementia (a type of Major Neurocognitive Disorder) at the time of executing the Assignment Documents. However, they differ as to the severity of her dementia and her mental capacity:

(1) Dr Leung is of the opinion that Madam Lee was functioning at mild, and not more than mild to moderate, dementia level, and had sufficient mental capacity to execute the Assignment Documents.

(2) On the other hand, Dr Tsang adopted the opinion of Dr Dong that Madam Lee was likely to have been suffering from moderate to severe dementia in November 2015. Given that no formal assessment of mental capacity was done at the time of the assignment, this casts great doubt on the state of mind of Madam Lee at the time of executing the Assignment Documents.

71.  For ease of reference, according to DSM-5[12] at p 605, Major Neurocognitive Disorder, including dementia, can be divided into the following 3 categories:

(1) Mild: Difficulties with instrumental activities of daily living (e.g. housework, managing money).

(2) Moderate: Difficulties with basic activities of daily living (e.g. feeding, dressing).

(3) Severe: Fully dependent.

72.  At this stage, this court shall make a few observations on the expert evidence and medical records.

73.  First, none of the medical experts involved in this case had the opportunity to examine Madam Lee in her lifetime. Their opinions are constrained as they are solely based on Madam Lee’s past medical records.

74.  Second, it does not appear from the summary of findings by Dr Dong at para 5 of the Joint Report, and there is no suggestion in Mr Wong’s Closing, that any of the past medical records relied upon by Dr Dong were prepared for the purpose of assessing Madam Lee’s mental capacity or due to concern about her mental capacity. For instance, in the discharge summary dated 6 April 2012 from the United Christian Hospital (“UCH”)[13] which recorded “dementia (MMSE20/30)” as part of her medical history, there is no suggestion in it or in Mr Wong’s Closing that the reason for Madam Lee’s admission to UCH at that time had anything to do with concern about her mental capacity.

75.  Third, according to Dr Leung, which is not contradicted by Dr Dong in the Joint Report, the assessment of mental capacity involves assessment of one’s ability to understand, retain, decide and communicate his decision. There are tools for the purpose while clinical interviews by psychologists or psychiatrists remain the gold standard, in the absence of which other tools such as the MMSE are only employed as a rough guide. However, the correlation between findings with specific mental capacity assessment and MMSE scores are well known to be poor. Dr Tsang, in his examination in chief, also opines that there is no direct relationship between MMSE scores and a patient’s mental capacity. The above opinion of both experts’ casts considerable doubt on the weight which can be placed on Madam Lee’s MMSE scores of 20/30 recorded in April 2012. This in turn renders Dr Dong’s projection of Madam Lee’s dementia from “moderate” in 2012 to “moderate to severe” in November 2015 dubious.

76.  Lastly but certainly not least, this court is sceptical of Dr Tsang’s wholesale adoption of Dr Dong’s expert report and the relevant parts of the Joint report. This is because during Dr Tsang’s cross-examination on Day 7, he accepted that he had no discussion with Dr Dong prior to preparing his 1-page report, he had no involvement in the without prejudice meeting between Dr Dong and Dr Leung prior to the Joint report and he did not know why the 2 doctors put down or not put down what appears in the Joint report. Ms Lee submits and this court agrees that without knowing what Dr Dong and Dr Leung had discussed in the without prejudice meeting, it is rather inconceivable how Dr Tsang could adopt wholesale Dr Dong’s opinion.

77.  On the whole, this court agrees with Ms Lee that, other things being equal, less weight should be accorded with Dr Tsang’s opinion.

78.  Apart from the expert evidence and the contemporaneous medical records of Madam Lee, the parties’ factual witnesses have also testified generally on Madam Lee’s mental capability as they perceived it.

79.  As far as the Plaintiffs’ witnesses are concerned, this court has earlier referred to the testimony of the 2^nd Plaintiff and Ms Chiu about their visits of Madam Lee in September/October and November 2015 which go some way in reflecting positively on her health condition during the visits. By contrast, the testimony of the Defendant paints a rather gloomy picture of Madam Lee in her supplemental witness statement. The long and short of her testimony is that from 2014 onwards, Madam Lee was unable to sign any legal documents without assistance or to express her thoughts or communicate with the Defendant. In November 2015, Madam Lee could not have understood the meaning and effect of the Assignment Documents.

80.  As this court sees it, these general observations on Madam Lee’s physical and mental health only assist to a limited degree. Neither Ms Lee nor Mr Wong places emphasis on these witnesses’ testimony in their Closing. That is understandable. The key issue is Madam Lee’s mental capacity to execute the Assignment Documents on 25 November 2015. Ms Cheng is the only person who had directly observed Madam Lee at close range while the Defendant was simply not present at the Buddhist Home. On this issue, this court is prepared to accept and place weight on Ms Cheng’s observation.

CSSA Scheme documents

81.  In section C2 of Mr Wong’s Closing, after repeating what Dr Leung and Dr Dong/Dr Tsang agree or disagree, he does not immediately carry on to analyse the expert reports. Instead, Mr Wong goes straight to the records from the Social Welfare Department in August 2015 in connection with Madam Lee’s CSSA Scheme application, the more germane parts of which are as follows:

(1) A Medical Assessment Form by UCH dated 6 August 2015 which stated that Madam Lee was mentally unfit to make a statement for her CSSA Scheme application. The Form also stated she was assessed to have inter alia (i) under Illness “Diabetes Mellitus, Dementia”, (ii) under Degree of disability “Besides 100% loss of earning capacity, also in need of constant attendance.”

(2) A memo under the CSSA Scheme dated 6 August 2015 which stated that Madam Lee required continual supervision in order to avoid endangering herself, e.g. severely demented/mentally retarded.

82.  In Mr Wong’s Closing, he refers to Dr Tsang’s testimony and submits that (1) giving a statement for the purpose of a CSSA Scheme application is a less complicated task than executing the Assignment and that (2) Madam Lee required continual supervision because she was severely demented. Mr Wong further submits that a CSSA Scheme application concerns only a small amount of money whereas the execution of the Assignment would result in the disposal of her principal asset. Mr Wong concludes by submitting at para 38 of his Closing that “it seems obvious that the mental capacity requiring to make a statement for a CSSA Scheme application is a less complicated task than execution of the Purported Assignment and a person who is unfit to make a statement for a CSSA Scheme application must also have no requisite mental capacity to execute the Purported Assignment.”

83.  Quite apart from the obvious fact that the medical assessment shown in the records was for a wholly different purpose, this court does not agree with Mr Wong’s submission.

84.  First, there is no clear indication in the Medical Assessment Form as to what sort of statement an applicant for CSSA was supposed to make or why the medical officer concerned ticked the box stating Madam Lee was mentally unfit to make a statement. As an example, Mr Wong refers to the CSSA Scheme application made by Madam Lee on 5 June 2012, in which she made a 4-page statement detailing all her assets including (i) recounting multiple events from years ago on her historical relationship with Tung Yuan Yuan, (ii) explaining her interest in two other lots of land (Lot 730A and 1304A), and (iii) setting out all of her bank accounts so as to support her application for CSSA.

85.  Mr Wong then submits that such a 4-page statement is a much simpler document than the Assignment and that the application for CSSA only involved a few thousand dollars per month from the Government whereas the Assignment involved the giving away of Madam Lee’s most valuable asset. On the other hand, Ms Lee submits that making such a statement is clearly much more complex than executing the Assignment which explains why a person may be assessed as being “unfit to make a statement” but still has sufficient mental capacity to carry out legal transactions, as Dr Leung opines.

86.  This court agrees with Ms Lee and disagrees with Mr Wong.

87.  In this court’s view, it is a false assumption that because the contents of the statement are less complicated that those of the Assignment, and that the CSSA Scheme application involves less financially as compared with the Assignment, making a statement must be a less complicated task for Madam Lee. This is because the task of making a statement required Madam Lee herself to remember, decide and communicate to the social welfare officer (who put it down in written form) all relevant information about her assets in order to qualify for CSSA. The Assignment, on the other hand, was a standard form document the gist of which was explained to her before Madam Lee executed it. After the explanation, all that required of Madam Lee was to understand what she was doing ie making a gift of the Property to the Plaintiffs for the benefit of the Home, to make a decision and communicate the decision to the lawyer, in this case, Ms Cheng.

88.  It is unreal to suggest a person must be able to understand each and every part of and the legal concepts embedded in an assignment of property before one can be satisfied that he/she has the mental capacity to execute it. If that were the criterion, then probably very few lay persons would be regarded as having the requisite mental capacity to do so. As rightly submitted in Ms Lee’s Closing, what is important is not whether each and every word of the Assignment Documents was translated and explained to Madam Lee, but whether she understood the nature and effect of the documents. In Re K (Enduring Powers of Attorney) [1988] Ch 310, 313F-G, Hoffman J (as he then was) observed at that:

“It is well established [at common law] that capacity to perform a juristic act exists when the person who purported to do the act had at the time the mental capacity, with the assistance of such explanation as he may have been given, to understand the nature and effect of that particular transaction: see In re Beaney, decd. [1978] 1 W.L.R. 770. In principle, therefore, an understanding of the nature and effect of the power was sufficient for its validity.”

89.  As for the amount of money involved, it is an oversimplification to suggest that a person requires a higher level of mental capacity to execute an assignment of landed property than to apply for CSSA because more money is involved. Both actions involve managing money in one way or another but it all depends on the complexity of the task. As Ms Lee puts it, a person could have difficulties shopping for many items of small value eg in a supermarket and doing small mental calculations but still be mentally capable, if explained in appropriate language, to assign an asset of sizeable value. This is just common sense.

90.  Second, Dr Tsang’s testimony that Madam Lee required continual supervision because she was severely demented wholly depends the correctness of his/Dr Dong’s opinion that she suffered from moderate to severe dementia in the first place. If this court is not satisfied with his opinion, as to which this court will deal with later in this Judgment, then Dr Tsang’s said testimony will carry little weight.

91.  There is nothing in the memo under the CSSA Scheme dated 6 August 2015 itself which stated that Madam Lee was severely demented. As correctly submitted by Ms Lee in her Closing, severe dementia is only one example of why an applicant for CSSA requires continual supervision in order to avoid endangering himself/herself. As noted by Dr Leung in his testimony which is self-evident anyway, the box for continual supervision in the memo could still be ticked where eg one is not severely demented but will still endanger oneself, such as a person with sleeping problems who would wake up in the dark at night trying to leave the bed, causing danger to oneself. In the present case, Madam Lee could be assessed as requiring continual supervision for any number of other factors that might cause her to endanger herself which the medical officer did not see fit to elaborate in the memo.

92.  To conclude, this court rejects Mr Wong’s proposition at para 42 of his Closing that the medical assessment shown in the Social Welfare Department records three months prior to the execution of the Assignment must be the most important and reliable evidence to show a prima facie case that Madam Lee lacked the requisite mental capacity to do so.

Opinions of Dr Leung, Dr Dong/Dr Tsang

93.  In the Joint Report, Dr Dong’s reasoning leading to his conclusion boils down to this.

(1) Madam Lee suffered from Major Neurocognitive Disorder according to DSM-5.

(2) The records showed that Madam Lee’s (physical) condition deteriorated with time from 2011 to 2016. This is evidenced by the fact that she was initially freely mobile. She was then recorded to be wheelchair bounded on the 20 January 2013. Later on, on 19 August 2013, she was recorded to be bed bounded. Madam Lee became long-term bed bound since at least March 2016 ie after the Assignment. This shows that probably had successive cerebrovascular accidents (strokes) from 2011 to 2016.

(3) Madam Lee’s diagnosis of dementia, likely due to cerebral vascular accident (“CVA”) (stroke), was first recorded on 16 April 2012, with a MMSE score of 20.

(4) Vascular Neurocognitive Disorder is known to take a “stepwise” course of deterioration. In other words, with each succession of stroke, the cognitive function would also decrease. Therefore, it is almost certain that Madam Lee’s cognitive function would have deteriorated since April 2012 when the MMSE was last done. The MMSE score at the time of the assignment in November 2015 would be much lower and she would be suffering from a moderate to severe dementia.

(5) The fact the Madam Lee was likely suffering from moderate to severe dementia at the time of the assignment in November 2015 does not automatically render her mentally incapable to give the instruction of the Assignment. A doctor should use the criteria stated in the Oxford Textbook of Psychiatry in order to decide whether or not the subject person is or is not of sound disposing mind.

(6) No test of mental capacity was done at the time of the Assignment in November 2015.

94.  In conclusion, Dr Dong opined that Madam Lee was likely suffering from moderate to severe dementia at the time of the Assignment in November 2015. Since no formal assessment of mental capacity was done at the time of the Assignment, this casts great doubt on the state of mind of Madam Lee at the time of the Assignment and, in turn, the validity of the Assignment.

95.  The above reasoning and conclusion are unsatisfactory in a number of ways in that they are at least partly based on factual errors and/or conjecture and/or the conclusion simply does not follow from the reasoning.

96.  First, the UCH medical records dated 19 August 2013 only shows that Madam Lee was wheel-bed bounded upon admission, rather than bed bounded generally. In this regard, Dr Dong was mistaken as to a fact which he relied upon in arriving at his speculation that Madam Lee probably had successive cerebrovascular accidents (strokes) from 2011 to 2016. It is important to note that, in her subsequent medical consultation notes in August, September and November 2015, Madam Lee was only described as “wheelchair in” and “wheel chair ridden”, rather than bed bound. This further undermines Dr Dong’s said speculation.

97.  Further, while Dr Dong’s speculation is that Madam Lee probably had successive cerebrovascular accidents (strokes) from 2011 to 2016, he has not referred to any relevant medical records in support. Even Dr Tsang confirms in the box that he had not seen any record showing Madam Lee had suffered a succession of stroke and is unable to confirm that. This renders it difficult for this court to accept Dr Dong’s speculation or Dr Tsang’s opinion in the box on Day 7 that the speculation is a reasonable one.

98.  In this court’s view, if Madam Lee had indeed suffered a succession of stroke, which is no small matter, it is more likely than not that the same would have been stated in the various UCH admission records or other consultation notes up to 2016.

99.  Second, Dr Dong’s opinion that Madam Lee’s MMSE score at the time of the Assignment in November 2015 would be much lower compared to April 2012 and she would be suffering from moderate to severe dementia does not necessarily follow from his opinion that Vascular Neurocognitive Disorder is known to take a “stepwise” course of deterioration - it all depends on the rate of Madam Lee’s deterioration as to which Dr Dong has not pinpointed any medical records which throw light on it. Dr Dong’s said opinion is based on his subjective professional opinion without any backup from the relatively objective medical evidence.

100.  Third, Dr Dong’s conclusion that Madam Lee was likely suffering from moderate to severe dementia in November 2015 is highly problematic.

101.  To begin with, Dr Dong’s starting position in para 19 of his expert report is that the MMSE score of 20, recorded in April 2012, shows that Madam Lee was suffering from “moderate dementia”. Dr Leung’s opinion, backed up by medical literature, is that a score of 20 - 24 suggests only mild dementia. Even Dr Tsang accepts in his examination in chief that in 2012, Madam Lee’s dementia should be mild only.

102.  Next, Dr Dong’s opinion is based at least partly on Madam Lee becoming bed bounded since August 2013. As shown above, it is not only unsupported by medical evidence but that it is contradicted by the medical consultation notes in August, September and November 2015 in which Madam Lee was described as “wheelchair in” and “wheel chair ridden” only. Further, an important premise of Dr Dong’s conclusion is that Madam Lee probably had successive cerebrovascular accidents (strokes) from 2011 to 2016 something which even Dr Tsang is unable to confirm it.

103.  Importantly, in the consultation note dated 18 November 2015, one week before the signing of the Assignment Documents, the geriatric doctor who visited Madam Lee at the Buddhist Home considered it sufficiently important to put down her past medical history of “dementia MMSE20/30”. But there is nothing in the note which even hints at Madam Lee suffering from moderate to severe dementia. According to DSM-5, someone suffering from severe dementia is “Fully dependent” which is rather difficult to miss by a layman, not to mention a geriatric doctor. Dr Tsang accepts that if the doctor saw signs or suspected Madam Lee was suffering from moderate to severe dementia, he should have put down something to that effect in the note. This court will take it a step further and suggest that the doctor would have done so. The absence of such an observation strongly indicates that Madam Lee was not suffering from severe dementia at the time.

104.  Fourth, Dr Dong’s conclusion does not sit well with other medical records showing Madam Lee’s cognitive functioning and Dr Leung’s opinion on it. She was variously described in the medical records before and after November 2015 as “alert+”, “follow command+”, “verbal response+” and/or “limbs moving+” in April 2014, April 2015 and March 2016, at least the first two observations were made by a visiting medical officer during consultation.

105.  Based inter alia on the above, Dr Leung’s opinion as summarized in the Joint Report is that Madam Lee’s performance allowed her to have the requisite mental capacity to execute the Assignment Documents in November 2015, if explained in a way which was appropriate to her circumstances.

106.  That brings this court to the testimony of Ms Cheng who explained the contents of the Assignment Documents to Madam Lee the gist of her testimony has already been set out in the previous section on “Whether Madam Lee did execute the Assignment Documents”. Ms Cheng, whose testimony this court has no hesitation in accepting, was satisfied with Madam Lee’s mental capacity before asking her to sign, albeit that she had not translated and explained each and every clause of the Assignment Documents to Madam Lee and the process of explanation took about 15 minutes.

107.  In Mr Wong’s Closing, he launched an unjustified attack on Ms Cheng’s credibility, integrity and professionalism. Specifically in relation to Madam Lee’s understanding of and her mental capacity to execute the Assignment Documents, the gist of Mr Wong’s criticism boils down to 3 areas:

(1) Instead of examining Madam Lee’s mental capacity by two medical practitioners in accordance with the Mental Health Ordinance, Cap 136 (“MHO”), Ms Cheng chose to examine Madam Lee herself.

(2) Ms Cheng did not have the requisite expertise in psychiatry and had not received any medical training. Her assessment of Madam Lee’s mental capacity falls short of what Dr Tsang or Dr Leung, as psychiatrists, would have done under similar circumstances. Further, the time spent by Ms Cheng for the assessment also falls short of what Dr Tsang himself would have taken ie 45 to 60 minutes.

(3) Ms Cheng had failed to fully interpret and explain the Assignment Documents to Madam Lee. As an example, Mr Wong queried how Ms Cheng could have explained the term “appurtenance” to Madam Lee in Cantonese.

108.  None of the criticisms are fair or justified.

(1) TWC and specifically Ms Cheng were not instructed to assess Madam Lee’s mental capacity for the purpose of and in accordance with the MHO.

(2) Ms Cheng is not a psychiatrist and it goes without saying that she would not have conducted the assessment in the same way that Dr Tsang or Dr Leung would have done. But that does not mean that she was incapable of observing whether someone might be “fully dependent” or making an assessment of whether a person is mentally capable of executing a legal document. After all, explaining and attending to the execution of legal documents is part of the routine of any conveyancing lawyer and Ms Cheng is no exception.

(3) The real issue is not so much the time spent in explaining the documents to Madam Lee, but rather the time required for her to understand their nature and effect and generally what she was doing. In this regard, this court agrees with Madam Lee that the Assignment is uncomplicated in that it confers a gift of the Property with which Madam Lee was well familiar with to 4 others, including the 2^nd Plaintiff who had known Madam Lee since about 1976, for the benefit of the Home, a charity which Madam Lee was also well familiar with.

(4) It was pointless and would not have assisted Madam Lee in understanding what she was doing by explaining to her e.g. all the terms in the Schedule to the Assignment like exceptions and reservations in the Government Lease or easement and other appurtenant rights. In fact, it would more probable than not have confused Madam Lee.

109.  Given that what is important is whether Madam Lee understood the nature and effect of the documents, this court is satisfied that Ms Cheng had sufficiently explained the Assignment Documents to Madam Lee in a way which was appropriate to her circumstances and which would have enabled her to understand the nature and effect of them, in particular the Assignment.

110.  Fifth, it is accepted by Dr Dong that severe dementia at the time of the Assignment in November 2015 does not automatically render Madam Lee mentally incapable to execute the Assignment. Instead, a psychiatry should use the criteria stated in the Oxford Textbook of Psychiatry, as elaborated in the Joint report, in order to decide whether or not Madam Lee was or was not of sound disposing mind. That was never done at the time. If so, the logical conclusion, in this court’s view, should have been that Dr Dong could not confirm one way or another whether Madam Lee was mentally incapable, which would spell the end or almost the end of the Defendant’s case on Madam Lee’s mental capacity. Instead, Dr Dong opined that this cast great doubt on the state of mind of Madam Lee at the time of signing the Assignment and, in turn, the validity of Assignment which this court does not accept.

111.  To conclude, this court prefers the opinion of Dr Leung to that of Dr Dong/Dr Tsang.

112.  Looking at all the evidence in the round, this court is satisfied that the Defendant has failed to discharge the burden of proving the Assignment was vitiated on the ground of mental incapacity. That disposes of the key issue in this case.

Other vitiating factors

113.  The other vitiating factors can be disposed of quickly as this court is satisfied that the evidence relied upon by the Defendant in no way supports the existence of any vitiating factors.

Undue influence

114.  The essence of the defence of undue influence was neatly summarized in Bank of China (Hong Kong) Limited v Wong King Sing & Others [2002] 1 HKLRD 358, delivered shortly after the law was clarified in Royal Bank of Scotland v. Etridge (No.2) [2002] 2 AC 773. At [34] - [35] of the judgment, Recorder Ma SC (as he then was) observed:

“34. …it is to be borne in mind that the defence of undue influence is ultimately a simple concept. It has all to do with informed consent. Once a court forms the view that consent was freely given with full knowledge of the consequences of entering into the relevant transaction, that is the end of the matter, however improvident the transaction may objectively appear. The rationale for the defence of undue influence is to prevent the victimisation of the complainant. It is there to protect people from being forced, tricked or misled in any way by others into entering into a disadvantageous transaction: see Allcard v. Skinner (1887) 36 Ch.D. 145, at 182–3; National Westminster Bank Plc v. Morgan [1985] AC 686, at 705. As Lord Nicholls of Birkenhead said in Royal Bank of Scotland v. Etridge at 1029 paragraph 8, the unacceptable conduct lies in ‘a relationship between two persons where one has acquired over another a measure of influence, or ascendancy, of which the ascendant person then takes unfair advantage.

35. The burden is of course on the person seeking to set aside or avoid liability under the relevant transaction. It is not for the other party to prove that the transaction was entered into with full understanding of the nature and consequences of the transaction…” (emphasis added)

115.  In his Closing, Mr Wong invites this court to approach the issue on the basis that the present case is what is commonly described as a Class 2B category of undue influence, as explained by Lord Browne-Wilkinson in his speech in Barclays Bank Plc v. O’Brien [1994] 1 AC 180, 189-190:

“Class 2(B)

Even if there is no relationship falling within Class 2(A), if the complainant proves the de facto existence of a relationship under which the complainant generally reposed trust and confidence in the wrongdoer, the existence of such relationship raises the presumption of undue influence. In a Class 2(B) case therefore, in the absence of evidence disproving undue influence, the complainant will succeed in setting aside the impugned transaction merely by proof that the complainant reposed trust and confidence in the wrongdoer without having to prove that the wrongdoer exerted actual undue influence or otherwise abused such trust and confidence in relation to the particular transaction impugned.”

116.  Mr Wong submits that the facts of this case raise a presumption of undue influence which presumption the Plaintiffs have failed to rebut. Specifically, he submits that:

(1) Madam Lee and Au had a pre-existing relationship such that she had reposed trust and confidence in him.

(2) The Assignment is a transaction that is only explicable if it was procured by undue influence on the part of Au or is not readily explicable by the relationship of the parties.

(3) Since the Assignment took the form of a gift which constitutes a serious disadvantage to Madam Lee, the Plaintiffs are required to provide a more cogent explanation to rebut the presumption of undue influence.

(4) Based on the evidence of the Plaintiffs’ witnesses, they have failed to rebut the presumption of undue influence, let alone to provide a cogent explanation.

117.  This court does not agree with the approach suggested by Mr Wong, as it is wholly outdated in light of Li Sau Ying v Bank of China (Hong Kong) Ltd (2004) 7 HKCFAR 579, an authority actually cited by Mr Wong. Nor with his conclusion.

118.  In Li Sau Ying v Bank of China (Hong Kong) Ltd, the Court of Final Appeal expressed grave misgivings on the use of the expression “presumed undue influence” and, in particular, its use in connection with Class 2B cases. In [29] and [30], Lord Scott of Foscote NPJ expressed his view as follows:

“29. …Lord Nicholls of Birkenhead at paras 16 and 17 [in Royal Bank of Scotland plc v Etridge (No. 2) [2002] 2 AC 773] made clear that the expression connoted no more than a shift in the evidential burden of proof, “the equitable counterpart of common law cases where the principle of res ipsa loquitur is invoked”. Lord Hobhouse of Woodborough said, at para. 98 that the Class 2A and Class 2B categorisation derived from [Bank of Credit and Commerce International v Aboody [1990] 1 QB 923] had been “the source of much of the confusion which has ensued” and, at para. 105, that “the language of presumption is likely to confuse rather than assist”. He said that:

‘… If at the end of the trial the wife succeeds on the issue of undue influence, it will be because that is the right conclusion of fact on the state of the evidence at the end of the trial, not because of some artificial legal presumption that there must have been undue influence.” (para. 106)

Lord Hobhouse concluded that:

‘… the so-called Class 2(B) presumption should not be adopted. It is not a useful forensic tool.’ (para. 107)

And I expressed similar views at para. 161:

‘For my part, I doubt the utility of the Class 2B classification … The presumption in Class 2B cases, … is doing no more than recognising that evidence of the relationship between the dominant and subservient parties, coupled with whatever other evidence is for the time being available, may be sufficient to justify a finding of undue influence on the balance of probabilities …’

30. The strong message from Etridge therefore is that, particularly in Class 2B cases, concentration on a so-called presumption of undue influence is likely to detract from the real issue, namely, whether the evidence justifies a conclusion that the impugned transaction was procured by undue influence…”

119.  At [34], Lord Scott of Foscote concluded that in future cases, where undue influence has to be proved but where the relationship between the parties is not a relationship that falls within the Class 2A category, the parties will concentrate on whether the evidence justifies the inference that, on a balance of probabilities, the impugned transaction was procured by undue influence, that is to say, by an abuse by the allegedly dominant party of the trust and confidence reposed in him by the allegedly subservient party. That is how this court is minded to approach the issue.

120.  Ms Lee accepts that Au and Madam Lee were in a relationship of trust and confidence, including her financial affairs. The question is whether on the totality of the evidence, the court should infer that on a balance of probabilities the Assignment was procured by Au’s undue influence on Madam Lee. In his Closing, Mr Wong relies on paragraph 6 of the supplemental witness statement of Au (“Au 2”), paragraph 10 of the witness statement of the 2^nd Plaintiff (“Ma 1”) and paragraphs 23-24 of the 2^nd supplemental witness statement of Au (“Au 3”).

121.  Paragraph 6 of Au 2 reads:

“6. This is the background of the visit to Madam Lee in or about mid July 2015 by me and Mr. Yip. When Mr. Yip intended to consult Madam Lee on his intention to give his interest in Lot No. 1103 to the said Home, I excused myself because I consider that the subject matter is something private between Mr. Yip and Madam Lee. After the meeting of Mr. Yip and Madam Lee, I was subsequently informed by Mr. Yip that after Madam Lee learned of his intention, she was pleased and when asked whether she would also do the same, she indicated that she would like to give all her interest in the Property to the said Home.”

122.  Paragraph 10 of Ma 1 reads:

“Reasons for giving the Property to Sin Tin Toa Home for the Aged

10. The land search of the Property reveals that one of the previous owners of the Property was Yip Chi Kin. On 31st August 2015, the nephew of the said Yip Chi Kin, namely Yip Hung Cheong approached the said Home. He expressed his intention that he would like to give to the said Home his interest in a piece of land which he inherited from his aunt. He also said that before he decided to give his interest in the land to the said Home, he went to visit Madam Lee together with her god son Au Kam Lun and consulted Madam Lee on his intention to give his interest in the land to the said Home. Madam Lee was pleased with his intended action and gave Mr. Yip her full support. When Mr. Yip asked Madam Lee whether she would also like to give all her interest in the Property to the said Home, Madam Lee replied in the positive.”

123.  Paragraphs 23-24 of Au 3 read:

“23. On 25th November 2015 namely the date when Madam Lee signed the transfer papers, I arrived at the Buddhist Elderly Home at 9:00 a.m. in the morning. Before the solicitor and others arrived, I said hello to Madam Lee and called her “Sam Gu Po”. At that time Madam Lee looked at me and had eye contact with me. She nodded her head but said nothing. I then left without saying anything. This is because I knew Madam Lee would sign legal documents on that day and I did not want to influence her…

24. After Madam Lee signed the papers, I watched her from a distance but did not exchange any word with her before I left. This is because I used to pay visits to her and I did not regard there was anything special for this occasion, and I did not have anything special to speak to her.”

124.  As stated earlier, Au’s credibility was not challenged by Mr Wong in cross-examination and it was not put to Au that he was the one who exercised undue influence on Madam Lee. Indeed, not only does Mr Wong not attack Au’s credibility, he purports to rely on his testimony in support of his submissions on undue influence. But as the evidence shows, there is not an iota of evidence that there was an abuse by Au of the trust and confidence reposed in him by Madam Lee. Nor can this court find that Au has any motive to do so - the Defendant does not suggest that Au has any advantage to gain as a result of the Assignment and there is simply no reason for him to exert any influence, let alone undue influence, on Madam Lee. The Assignment is ultimately for the benefit of the Home.

125.  The rationale of the defence of undue influence is to prevent the victimisation of the complainant. Once a court forms the view that consent was freely given with full knowledge of the consequences of entering into the relevant transaction, that is the end of the matter. In the present case, not only is there no evidence that Madam Lee had been victimized or taken unfair advantage of by Au, there is positive evidence that the Assignment came about out of Madam Lee’s own free will.

126.  Ms Cheng’s testimony is that before executing the Assignment, she had asked Madam Lee whether the assignment of the Property to the Plaintiffs was her own will and instruction and Madam Lee replied positively. Ms Cheng is a truthful witness and this court fully accepts her testimony. That was November 2015.

127.  Prior to that, in August 2015, the nephew of one of the previous owners of the Property viz Yip Hung Cheong (“Yip”) had also personally ascertained Madam Lee’s intention to donate the Property to the Home after indicating to Madam Lee that he would donate his interest in another piece of property to the Home[14]. While strictly speaking what Au (as well as the 2^nd Plaintiff) learned from Yip is hearsay evidence, this court is entitled and is prepared to place weight on such evidence as it considers appropriate in the circumstances. From the land search of the Remaining Portion of Lot No. 1103 ie the Surrounding Property, it would appear that Yip had indeed assigned his 1/3 interest to the Plaintiffs in November 2015, weeks before the Assignment. There was no reason for Yip to misinform Au about Madam Lee’s intention and Au’s credibility was not challenged by the Defendant.

128.  Third, the 2^nd Plaintiff’s testimony is that in around September/ October 2015, she and a few officers of the Home went to ascertain Madam Lee’s intention to make a gift of the Property to the Home. The 2^nd Plaintiff asked Madam Lee about it to which Madam Lee said yes, she had already decided[15]. While Mr Wong had put to the 2^nd Plaintiff that conversation in September/October 2015 between her and Madam Lee did not exist, this court cannot see any evidential basis for Mr Wong to do so - none of the defence witnesses were present during that conversation and could challenge the veracity of the 2^nd Plaintiff’s testimony. What Mr Wong has put to the 2^nd Plaintiff suggests nothing short of perjury in Court and a fraud by her on Madam Lee. It is regrettable that Mr Wong saw fit to make such a serious but unfounded allegation against the 2^nd Plaintiff.

129.  The 2^nd Plaintiff impresses this court as a truthful witness and her testimony was not shaken in cross-examination. Indeed, there is nothing in Mr Wong’s Closing which can persuade this court to find the 2^nd Plaintiff as an incredible witness. Rather, it seems to this court that, after what she had learned of Madam Lee’s intention about the Property as revealed by Yip, it was entirely logical and reasonable for the 2^nd Plaintiff to directly re-confirm that with Madam Lee herself.

130.  For all the reasons aforesaid, this court has no hesitation in rejecting the defence of undue influence.

Non est factum

131.  The key elements for a successful plea of non est factum have been summarised as follows:

(1) the belief of the signer that the person is signing a document of one character or effect whereas its character and effect were quite different;

(2) the need for some sort of disability which gives rise to that state of mind;

(3) the plea cannot be invoked by someone who does not take the trouble to find out at least the general effect of the document.

Chitty on Contracts 34^th Ed Vol 1 para 5-050

132.  In Mr Wong’s Closing, other than citing a couple of authorities on the subject, his submission can be boiled down to these:

(1) Given that the Assignment took the form of a gift and the effect of the gift almost completely or completely depleted Madam Lee’s assets, a high level of understanding of the Assignment of Madam Lee was required.

(2) The evidence indicates that Madam Lee did not have the mental capacity to have an understanding of the nature and effect of the Assignment. Therefore, she had no proper appreciation or knowledge of the Assignment Documents that she was signing, and therefore the Assignment Documents were fundamentally and radically different from whatever she thought they were.

(3) Based on Ms Cheng’s own evidence, the clauses of the Assignment Documents were written in English but they were not fully translated into Cantonese for Madam Lee. Ms Cheng had only spent 10 or 15 minutes explaining the Assignment Documents to Madam Lee and failed to verify whether Madam Lee could understand the content of the Assignment Documents and the effect of the Assignment.

133.  In the present case, it is clear beyond doubt that the Defendant fails to get over even the first key element ie Madam Lee was signing a document ie the Assignment the character and effect of which was fundamentally and radically different from what she believed. While Mr Wong has made an assertion to that effect in his Closing, he has not adduced any evidence as to what mistaken belief Madam Lee had about the document she was signing at the material time. This is fatal to his case.

134.  Further, this court reiterates its acceptance of Ms Cheng’s testimony and its finding that Madam Lee had the mental capacity to and did understand the contents of the Assignment and executed it out of her own free will.

135.  For these reasons, the plea of non est factum fails.

Unconscionable bargain

136.  The doctrine of unconscionable bargain requires the Defendant to satisfy the Court of the following:

(1) The bargain must be oppressive to the complainant in overall terms.

(2) The complainant was suffering from certain types of bargaining weakness.

(3) The other party must have acted unconscionably in the sense of having knowingly taken advantage of the complainant.

Chitty on Contracts supra para 10-164

137.  It has also been noted by the learned editors of Chitty on Contracts supra at para 10-165 that in modern cases in which this plea succeeded, the resulting transaction has been not merely hard or improvident, but overreaching and oppressive so that its terms, together with the conduct of the stronger party, “shock the conscience of the court”.

138.  While there is a bare assertion to that effect in Mr Wong’s Closing, this court cannot find any evidence that the Assignment was overreaching or oppressive to Madam Lee or that she had been unconscionably taken advantage of by the Plaintiffs. Nor can this court see how the conduct of the Plaintiffs or the terms of the Assignment “shock the conscience of the court”. The Assignment is a straightforward donation to the Plaintiffs for the benefit of the Home, properly explained by Ms Cheng to Madam Lee who had the mental capacity to and did understand its nature and effect and executed it out of her own free will.

139.  The plea of unconscionable bargain must be rejected.

Unilateral Mistake

140.  This defence is hopeless given this court’s acceptance of Ms Cheng’s testimony and the Defendant’s failure to show Madam Lee was acting under any mistake in executing the Assignment. Mr Wong’s submission in this regard is wholly rejected.

Conclusion

141.  For all the above reasons, this court rejects all the alleged vitiating factors put forward by the Defendant and holds that the Assignment is legally valid. If so, the Plaintiffs are entitled to vacant possession of the Property.

Mesne profits

142.  Apart from vacant possession, the Plaintiffs also seek mesne profits from the Defendant from 1 November 2016 until vacant possession is delivered to them. The claim is calculated as follows:

Period	Amount of Mesne Profits Payable
1 November 2016 – 31 October 2017	$14,000 x 12 = HK$168,000
1 November 2017 – 31 October 2021	$15,000 x 48 = HK$720,000
1 November 2021 – 16 February 2022	$15,000 x 3.57 = HK$53,550
Sub-total	$941,550 (Up to 1st Day of Trial)
After 16 February 2022	$15,000 / 30 = $500 per day until delivery of vacant possession

143.  The normal measure of damages is the ordinary letting value of the Property for the period of wrongful occupation or user, irrespective of whether the Plaintiffs would have let the Property out to someone else: Swordheath Properties v Tabet [1979] 1 WLR 285 (CA); McGregor on Damages 21^st Ed para 39-052.

144.  The evidence of the Defendant herself shows that she has taken over Tung Yuan Yuan and has been managing it since 2009. She has also been residing on the upper floor of Tung Yuan Yuan until now. The Land and the Surrounding Property combined was fenced off by an iron wire mesh with metal gates and the Defendant could control people’s access to the area.

145.  On 14 October 2016, TWC sent a demand letter to the Defendant asking her to deliver vacant possession of the Property by the end of the month ie 31 October 2016. It is accepted that the Defendant has received the demand letter, both in her ADNC and in her supplemental witness statement. It is also not disputed that the Defendant has not delivered vacant possession as demanded. On the contrary, it is pleaded in paragraph 8A(6) of the ADNC that the Defendant is entitled to vacant possession of the Land and occupy it in her capacity as executrix of Madam Lee’s estate.

146.  Apart from challenging the validity of the Assignment, Mr Wong does not put up any resistance to the claim for mesne profits in his Closing either on liability or quantum.

147.  This court is satisfied that the Plaintiffs are entitled to mesne profits from the Defendant as claimed.

Disposition and costs order nisi

148.  There shall be Judgment in favour of the Plaintiffs for an Order that:

(1) the Defendant shall deliver vacant possession of the Property to the Plaintiffs not later than 6 weeks from the date hereof or such other period as may be agreed between the parties;

(2) the Defendant shall forthwith pay to the Plaintiffs mesne profits as per paragraph 142 above together with interest at the rate of prime plus 1% from 1 November 2016 to Judgment and thereafter at Judgment rate until full payment.

149.  The Defendant’s Amended Counterclaim is hereby dismissed.

150.  Costs should follow the event. There shall be an Order nisi that costs of the Action, including costs of the Amended Counterclaim, be to the Plaintiffs, to be taxed if not agreed, and paid by the Defendant forthwith, certificate for counsel.