LIU KUI WEI v. WONG CHIU HA

1995, No.A90

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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1. On 19 May 1997, I have given judgment for the Defendant and dismissed the Plaintiff's claim herein. I now state herein below my reasons therefor.

2. The Plaintiff claimed that he had an oral agreement with the Defendant in or about November 1993 whereby they would jointly purchase a property ("the Property) in Tai Kok Tsui for the sum of $480,000. The Plaintiff said he had initially contributed the sum of $200,000 and it was agreed between the two of them that the Plaintiff should contribute to the provision of furniture and chattels to the Property. Accordingly it was alleged that the Plaintiff should have an equal interest in the Property or alternatively a resulting trust would arise in favour of the Plaintiff to the extent of his actual contribution, i.e. on pro rata basis.

3. The Plaintiff alleged in the pleadings that between December 1993 and March 1994, he had purchased furniture and chattels and contributed to the decoration works and utilities deposits for the Property to the extent of more than $40,000 in accordance with the agreement he had with the Defendant.

4. The Defendant said that the sum of $200,000 she received from the Plaintiff was a gift to her absolutely and was for her own use and benefit.

5. It is common ground that the Plaintiff wrote to the Defendant in response to her advertisement in Wah Qiu Yat Pao in November 1992 whereby the Defendant, being a widow, was looking for "elderly companion" and "close boyfriend" at the age of between 65 and 72. The Plaintiff being a widower himself however denied that he was looking for a girlfriend.

6. According to the Defendant, their relationship was later on developed into an intimate one. There were sexual acts of caressing initiated by the Plaintiff but short of any intercourse. However, the Plaintiff said there were advances made by the Defendant instead by embracing him. He denied that he had ever embraced the Defendant. In answer to questions concerning their relationship, he said that he had never embraced the Defendant, it was the Defendant who had embraced him. He also denied that he had ever kissed the Defendant, it was, according to him, the Defendant who kissed him.

7. Although it was disputed as to exactly when was the first time the Defendant had suggested to the Plaintiff to purchase a property together (according to the Plaintiff it was the second time of their meeting in early 1993 whereas according to the Defendant, it was a bit later), yet it was common ground that the Defendant was the one who had suggested to purchase a property together whereas the Plaintiff refused to enter into such an arrangement at that stage.

8. It is also not disputed that on or about 15 October 1993, through the introduction of the Defendant's friend, one Madam Kung, the Defendant agreed with the then owner of the Property to purchase the same at $480,000. A receipt was issued by the then owner for the sum of $10,000 as initial deposit. Thereafter on 3 November 1993, the owner and the Defendant alone signed a formal sale and purchase agreement at a solicitor's office whereby the balance of the 10% deposit in the sum of $38,000 was also paid by the Defendant herself.

9. The Plaintiff agreed that it was only thereafter that the Defendant took the Plaintiff to view the flat. According to the Plaintiff he was so invited in order that he could decide whether to join in with the purchase. According to the Defendant that was not so. She brought along the Plaintiff there only as a friend. At that time, according to the Defendant, there was certain talk between them as to whether they should live together. At one time before that incident, the Plaintiff had mentioned to the Defendant about the two of them living together with his daughter in Tai Po. The Defendant rejected that idea because she was working in Kowloon and it would be inconvenient for her to live in Tai Po. Further, she could not be sure whether she could get along with the Plaintiff's daughter.

10. It was repeatedly put to the Plaintiff that by the time he went along to take a view of the flat, i.e. after the Defendant had paid the two sums of deposit to the owner, he had not yet agreed to enter into such an agreement. He was not even aware of this Property in Tai Kok Tsui until he was taken there by the Defendant. He however denied the same; he insisted that he had already agreed. This part of his evidence is incomprehensible and the court is of the impression that he was afraid to say if at the inception of the contract between the Defendant and the owner he was not included in the agreement, he cannot now claim any interest in the Property. That idea was misguided as he could have an interest in the Property if the Defendant later on accepted his sum of $200,000 as payment for an interest in the said Property. The fact that he, for no reason, insisted that he had already agreed with the Defendant to have an interest in the suit Property when she paid those two sums of deposit had substantially affected his credibility.

11. The documentary evidence concerning the electricity bill revealed that the Defendant was originally registered as the user as evidenced by the first electricity bill dated 28 December 1993 after the Defendant's purchase. Thereafter the electricity bills for January, February and March 1994 were all in the name of the Plaintiff. However in April 1994, the name on the bill was changed back to the Defendant.

12. The Plaintiff insisted that he was registered as the user for the bill from day one and the Defendant had asked him to give her a copy of his I.D. Card so that she could change the electricity bill back to her name. According to the Plaintiff, the Defendant said that was because "he did not live there (permanently)".

13. However, according to the Defendant, she said she was on the waiting list for public housing and she was asked to attend an interview in December 1993. She wanted to keep her option open and therefore she asked the Plaintiff to assist her to change the user of the electricity bill into his name. (The other utilities bills : in respect of water, were all registered in the previous owner's name up to today whereas the Demand for Rates was also registered in the previous owner's name until the 3rd quarter of 1994). She agreed that she had not disclosed her intention to the Plaintiff but the Plaintiff complied with her request. In or about March 1994, (i.e. before the completion) she decided to give up her public housing and understandably she had no cause for using the Defendant's name as the user for the electricity bill. Thus, according to her, she asked the Plaintiff to accompany her to the electricity company to change the name back to hers.

14. After hearing the Plaintiff and the Defendant and the Defendant's witness, Madam Kung, I must say that, on the balance of probability, I prefer the evidence of the Defendant and her witness than that of the Plaintiff. Apart from the aforesaid incidents whereby I have the impression that the Plaintiff was evasive, I find the Plaintiff's description of the relationship with the Defendant was quite incredible. He was responding to an advertisement for an "elderly companion". He said he only responded to it out of curiosity but he cannot say out of curiosity for what except to say that he wanted to know whether there was any such person on earth that was really rejected by one's own children. But by then, i.e. five years ago, he was already 77. It was quite incredible that he did not know such a fact of life by then. I find that he was just too embarrassed to say that he was looking for a girlfriend (although this court finds nothing wrong for a widower even at his respectable age to look for another lady companion) and he also did not want to tell the court the truth that there were love and affection at one stage between the two of them.

15. The Plaintiff denied all physical contacts between the two of them except he agreed that there were advances made by the Defendant instead. They were spending nights after nights together in the same room between December 1993 and April 1994. According to the Plaintiff, there was a chest of drawers in between the two beds. However, the Defendant said that it was not so, the two beds were put side-by-side. The parties did not ask their mutual friend, Madam Kung, about this question. In response to a question from the Bench, Madam Kung quite spontaneously recalled that the two beds were put side-by-side as described by the Defendant without any chest in between. Madam Kung also said that the two of them were dating each other meaning they were steadying as between boyfriend and girlfriend.

16. This Court is not saying that it is impossible that no love and affection had developed between them. It is just that this Court do not believe the version put forward by the Plaintiff. He was trying very hard to convince the court that there was no intimate relationship between the two of them. He even suggested that the reason why he spent all these nights between December 1993 and April 1994 with the Defendant in the same room was just to "watch over the property"!

17. It is also common ground that before the agreement to give the Defendant $200,000, the Plaintiff had given her a ring as a gift. However, the Plaintiff strenuously denied that there was any special meaning attached to the ring. He said there was no special meaning at all when he gave the Defendant a ring. He was not even aware the usual meaning attached to such a gesture when a man gave a lady a ring. He said he had lived in Taiwan for the first part of his life until 1945 and there was not any meaning as he understood it in Taiwan. I find his explanation incredible. I believe people in Taiwan are no different from people in Hong Kong or in mainland whereby those who are better informed should know the meaning of giving a ring by a man to a woman as a kind of proposal for a more intimate relationship. In any event, Mr Liu had been living in Hong Kong for the better part of the rest of his life (48 years up to 1993) and I find his explanation incredible. Again he was trying to convince the Court that there was no love and affection between them and his payment to the Defendant was just a commercial investment.

18. The Plaintiff said in his testimony that before and after the payment of the $200,000 on 17 November 1993 he had paid several sums of money in terms of $10,000 odd, totalling to more than $40,000. He said before 17 November 1993, he had paid ten or several tens of thousand of dollars to the Defendant as his contribution to the decoration fee and/or furniture. However, his two bank passbooks (which he said were all the bank accounts he had) did not reveal any withdrawal of $10,000 during that material period way back to July 1993. (But by that time he had not viewed the flat and had not agreed to purchasing the suit Property together with the Defendant). In any event, in July 1993 Madam Wong was not aware of the flat herself nor had agreed to purchase the same herself. In desperation he even insisted that he had gone to the bank and withdrawn about $10,000 before 17 November 1993 and given the same to the Defendant.

19. However in re-examination, the Plaintiff gave me the impression that he then realized that he could not insist that he had withdrawn $10,000 from the bank before 17 November 1993 as there was no such withdrawal at all. Thus he changed his evidence by saying that the amount of money he had given her prior to 17 November might be a smaller sum like several thousand dollars when he had the cash available without having to go to the bank for it. His change of evidence rendered him incredible.

20. Further such a change of testimony gave me the impression that he was quite clear-headed in his mind and yet stubborn. He did not show any impairment of the mind by any old age at all. In fact, during these few days of giving evidence in court, he was going quite strong and he had not shown any sign of any confusion in his mind.

21. On the other hand, all the Defendant's payments to the decorator and for the furniture were all well documented. They complied with the bank record. She said the Plaintiff had only paid her $10,000 which she used to pay the decorator.

22. In assessing the totality of the evidence I must say that I prefer the evidence of the Defendant who had given her testimony in a straightforward manner. She has no hesitation to disclose to the Court that there was an incident earlier in March 1993 whereby she intended to introduce the Plaintiff to purchase a flat in Hung Hom together. But the Plaintiff revealed that he was not interested. Actually he had shown his displeasure. Thereafter she dared not raise this subject of purchasing a property together again.

23. In the end, I accept the Defendant's version that the sum of $200,000 was not intended to be the Plaintiff's part of the purchase price of the suit Property. It was as described by the Defendant that the Plaintiff intended to give her this sum of $200,000 as a gift to secure her future or, literally translated as "an old-age security". Perhaps the Plaintiff thought it was a conditional gift, i.e. a gift with a condition that she would agree to live with him for the rest of their lives. The Defendant apparently accepted such a notion.

24. Counsel for the Plaintiff agreed that if it is a gift with such a condition, such a condition is not enforceable.

25. However, Mr Miu for the Plaintiff submitted that this gift was actually tainted with undue influence not in a probate sense but in the equity sense.

26. The way this issue of undue influence was pleaded and found its way into the pleadings is this :

(a) The Defendant alleged that the payment by the Plaintiff was a gift;

(b) Thereupon at the first day of the trial the Plaintiff put in a reply by saying that if it was a gift made by the Plaintiff to the Defendant, the Plaintiff would say that it was secured by undue influence of the Defendant.

In the final submission, the Plaintiff's counsel was asked how an action on undue influence or relief for the same in terms of restitution could originate from a reply and not from the claim itself. There was no application to amend the Plaintiff's Statement of Claim by alleging an alternative claim that if it was a gift, then the Plaintiff would say that it is secured by undue influence and should be set aside by a court of equity.

27. In any event, apart from this technical matter that an action could only be found in the Statement of Claim and it should not be made in the reply, the alternative claim of the Plaintiff is inconsistent. In other words, the Plaintiff cannot say in a Statement of Claim that there was a joint agreement to purchase the suit Property but in the event he was disbelieved by the Court and the Court decided it was a gift then he would say it was tainted by undue influence. This two alternative claims to my mind are totally inconsistent.

28. In any event, the Plaintiff could not lead evidence to the same effect, i.e. he could not say in the witness box that there was such a joint venture and in the event he was disbelieved and it was found to be a gift, he was actually unduly influenced by the Defendant. Consequently there was no evidence led as to how he was unduly influenced by the Defendant. According to him, the relationship between the two of them were not one between lovers. According to him, they were just ordinary friends or atmost good friends but short of any intimacy as between a man and a woman. According to him, even for those nights spent together in the same room, there was no intimacy between the two of them.

29. Thus it is different from the case of In Re Craig, Deceased [1971] 1 Ch.95 in which case the donor of various gifts was deceased and the gifts made to his young secretary were set aside by the deceased's residuary beneficiaries under his will. It has been said in Goff and Jones on The Law of Restitution (1993 Ed.) at p.279 :

" The presumption [of undue influence] is perfected only if two conditions are satisfied. First, the complaining party must show that the transaction is 'wrongful', in the sense that the victim must be 'victimised' and 'forced, tricked or misled in any way by others into parting with their property.'"

30. There was no evidence whatsoever that the Plaintiff was victimised or forced, tricked or misled in any way by the Defendant into parting with his property. No doubt it has been further said in Goff and Jones what the second condition is namely :

"Secondly, the transaction must be to the manifest disadvantage of the person influenced and is explicable only on the basis that undue influence has been exercised to procure it. Whether a transaction is manifestly disadvantageous 'must depend on the balance of two factors, namely, (a) the seriousness of the risk of enforcement to the giver, in practical terms; and (b) the benefits gained by the giver in accepting the risk.' A 'disadvantage would be a manifest disadvantage if it would be obvious as such to any independent and reasonable persons who considered the transaction at the time with knowledge of all the relevant facts.' It is surprising that the courts should insist on the transaction being for the manifest disadvantage of the party influenced. Certainly, no such condition is imposed on a party who seeks to recover a benefit, or set aside a transaction, for duress or misrepresentation. In principle, once undue influence is presumed or found to exist, the transaction should, subject to defences, be set aside.

Once the presumption is perfected, the onus of proof is on the other party to show that the grantor or donor exercised an independent will which justifies 'the court in holding that the gift or transaction was the result of a free exercise of his will.'"

It could be said in the Plaintiff's favour that there was a serious risk of enforcement when he attached a condition to the gift itself. To my mind, he had never thought, at that time, about the risk of enforcement. The impression I got from him was that he was under the impression that the Defendant, once accepted the gift, had to fulfill the condition, whatever things had happened. That could also explain his misbehaviour in picking quarrels and losing his temper as described by the Defendant. I find the Plaintiff's version that he had never scolded her and he did not even know how to scold people an incredible one. Suffice to say that the two of them simply could not live together.

31. In this case, I find that the Plaintiff had not effectively put forward an alternative claim in the Statement of Claim. Even if I consider that they have raised the same in the reply and for whatever reason treated it as a claim in itself, this claim is inconsistent with the first one and would have been struck out if at the start of the trial the Plaintiff was put to his election. In any event, no evidence was led in this case from the Plaintiff as to this issue of undue influence. On the contrary I find as a matter of fact that there was no undue influence exercised by the Defendant on the Plaintiff. The whole payment was entirely voluntary albeit the Plaintiff was under the misapprehension that the Defendant would have to fulfill the condition laid down by him whatever would happen in the future.

32. In the end, I find for the Defendant and dismiss the Plaintiff's case herein with costs to the Defendant. There shall be an order for Legal Aid taxation for the Defendant.