HCMP 1089/2016
[2020] HKCFI 911
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
MISCELLANEOUS PROCEEDINGS NO 1089 OF 2016
________________
IN THE MATTER of an application for relief under Order 17 rule 1 of Rules of the High Court by way of interpleader
________________
BETWEEN
WING LUNG BANK LIMITED
Plaintiff
and
KING ARNOLD THEO as Executor of the Estate of
1st Defendant
SHIH WEN HSIA BESSIE also known as BESSIE SHIH,
BESSIE KING and BESSIE SHIH KING, deceased
KIRKPATRICK CECILIA SHI
2nd Defendant
_______________
Before:
Deputy High Court Judge Anson Wong, SC in Court
Dates of Hearing:
11 – 12, 14 September 2018
Date of Judgment:
25 May 2020
_______________
J U D G M E N T
_______________
A. INTRODUCTION
1. These interpleader proceedings were commenced by the Plaintiff (the “Bank ”) by reason that there is a dispute as to the ownership of the contents of a Safe Deposit Box 612-898-B20208-002-9 (the “Box ”) held under the joint names of Bessie Shih, deceased (the “Deceased ”) and the 2nd Defendant.
2. The main protagonists in trial are the 1st Defendant and the 2nd Defendant.
3. The 1st Defendant is the sole executor of a will dated 17 January 2013 executed by the Deceased (the “Will ”). Subject to certain specific bequests made by the Deceased to some third parties (including the 2nd Defendant) under the Will (as amended by the first codicil dated 6 September 2013 (the “First Codicil ”)), the 1st Defendant is the sole beneficiary of the residuary estate of the Deceased. Probate was granted to the 1st Defendant as the sole executor of the Deceased’s estate under the Will.
4. The 2nd Defendant is a niece of the Deceased, who claims to have a close relationship with the Deceased prior to her passing away.
5. It is the 2nd Defendant’s case that she is the owner of all contents of the Box for the reason that such contents were gifted to her as a result of the Deceased making inter vivos gift of such contents to her, or alternatively, the Deceased declaring such contents to be held on trust for the 2nd Defendant’s benefits.
6. By an Order dated 21 September 2016, all contents of the Box were deposited into court pending the determination of the dispute on ownership between the 1st and 2nd Defendants.
7. Since these proceedings were commenced by way of originating summons issued by the Bank, no pleadings were filed by the 1st and/or 2nd Defendants. However, by an Order dated 11 May 2017, the parties were directed to agree, insofar as possible, on a list of issues. Pursuant to such Order, the parties filed an agreed list of issues on 17 July 2017.
8. The issues agreed between the 1st and 2nd Defendants are as follows:
(1) When the Deceased and the 2nd Defendant opened the Box in 2011, what were the intention of the Deceased, in particular whether:
(a) the Deceased intended it was an inter vivos gift of the contents of the Box to the 2nd Defendant, and if so, whether it was valid and enforceable at law?
(b) the whole process and conduct of opening the Box was a valid and enforceable declaration of trust of the contents of the Box with the Deceased and the 2nd Defendant as the trustees and the 2nd Defendant as the sole beneficiary?
(2) What is the nature of the co-ownership of the Box, in particular whether co-ownership is by way of joint tenancy of the Deceased and the 2nd Defendant, thus the 2nd Defendant is entitled to the contents of the Box under survivorship?
9. On the first day of the trial, Mr Roy Lau, counsel for the 2nd Defendant, confirmed that the 2nd Defendant would not pursue the point that the survivorship clause in the renting agreement for the Box created a joint tenancy between the Deceased and the 2nd Defendant such that the 2nd Defendant would be entitled to the contents of the Box under survivorship. In my view, Mr Lau’s concession was rightly made. The law is clear that this kind of survivorship clause is just a contractual arrangement between a bank and its customers, and it is not determinative of the parties’ intention as to the ownership of the subject property: see Nanyang Commercial Bank Ltd v Personal Representative of Vannee Nativivat [2013] 2 HKLRD 749 (per To J) at para 29.
10. Accordingly, the only live issue at the trial of these proceedings was issue (1) set out in the parties’ agreed list of issues.
B. MATERIAL BACKGROUND
11. The Deceased, who passed away on 18 August 2014, was married to Mr King Theodore Teh (“Mr King ”), who died intestate on 15 April 2011.
12. The 1st Defendant claims himself to be the natural and lawful son of the Deceased and Mr King. There is, however, some evidence suggesting that the 1st Defendant is the natural son of the Deceased’s younger brother and his wife; and he was only brought up by the Deceased and Mr King pursuant to the agreement of his natural parents. I do not consider this matter as a matter of any significance since even in the Will, the Deceased described the 1st Defendant as her son. I simply set out this background out of abundance of caution.
13. The 2nd Defendant, who is and was at all material times ordinarily residing in New Jersey of the United States, is the niece of the Deceased. She has been working as a fashion, accessory and home fashion designer since 1984.
14. At all material times, the Deceased also had keen interest in jewellery. She had rich collections of jewellery items and would from time to time give some pieces from her jewellery collections to her relatives, including the 2nd Defendant.
15. In 2005, Mr King was diagnosed to have lung cancer. In August 2010, Mr King suffered a bad fall. The 1st Defendant, who was studying in the United States at that time, came back to Hong Kong to live with the Deceased and Mr King at their home in Kowloon Tong.
16. At that time, the Deceased and Mr King had two safe deposit boxes (numbered 612-898-C30365-001-07 and 612-898-C30386-001-2) under their joint names at the Tsim Sha Tsui Branch of the Bank (the “Boxes with Mr King ”).
17. On 24 March 2011, the Deceased and the 2nd Defendant signed the agreement for renting of the Box and opened the Box in their joint names at the Tsim Sha Tsui Branch of the Bank. The instruction given by them to the Bank was that any one of them could have access to the Box.
18. Since there is dispute as to the circumstances and reasons as to why the Box was opened in March 2011, I will set out the parties’ respective cases in my summary of their evidence in Section C below.
19. There is, however, no dispute that prior to the demise of the Deceased, the annual fees of the Box were paid by the Deceased by way of autopay from the Deceased’s account with the Bank (number 612-202-9873-9)[1] ; whereas the relevant statements or notices were sent by the Bank to the 2nd Defendant at her address in New Jersey of the United States.
20. In addition to the Box opened in March 2011, the Deceased also opened another safe deposit box (numbered 612-898-B20285-002-5) (the “Box with Ms Shi”) jointly with Ms Shi Jihong (“Ms Shi”) at the Tsim Sha Tsui Branch of the Bank on 9 June 2011. Ms Shi, who was at all material times living in Guangzhou, is a niece of the Deceased. According to the 2nd Defendant, she was trusted by the Deceased.
21. Apart from Ms Shi, according to the 2nd Defendant, the Deceased also trusted her nephew, Mr Chang Dick Leung (“Mr Chang ”), who was at all material times residing in San Francisco of the United States.
22. On 17 January 2013, the Deceased executed her Will. Under the Will, the Deceased made specific bequests to Mr Chang (a flat in Garden Mansion at Austin Road), Ms Shi (HK$1,000,000) and the 2nd Defendant (HK$1,000,000), and bequeathed her residuary estate to the 1st Defendant absolutely.
23. On 6 September 2013, the Deceased executed the First Codicil to amend the Will. Under the First Codicil, the specific bequest to Ms Shi was increased from HK$1,000,000 to HK$1,500,000 and to the 2nd Defendant was increased from HK$1,000,000 to HK$2,000,000; save as aforesaid, all other terms of the Will were confirmed.
24. The Bank’s records show that since the opening of the Box on 24 March 2011, the Deceased and the 2nd Defendant had access to the Box on the following dates:
29 March 2011
Access by the Deceased
9 April 2011
Access by the Deceased
19 April 2011
Access by the 2nd Defendant
26 April 2011
Access by the Deceased
11 May 2011
Access by the Deceased
20 May 2011
Access by the Deceased
9 June 2011
Access by the Deceased
2 August 2011
Access by the Deceased
27 October 2011
Access by the Deceased
27 January 2012
Access by the 2nd Defendant
23 February 2012
Access by the Deceased
2 April 2012
Access by the Deceased
5 November 2013
Access by the 2nd Defendant
25. After the Deceased passed away, a joint inspection of the Box was done on 8 October 2015 in the presence of, amongst others, the legal representatives of the 1st and 2nd Defendants. In addition to many pieces of jewellery, the Box was also found to contain:
(1) a passbook of the Deceased’s CNY savings account at Wing Hang Bank (numbered 861306-160) (the “Deceased’s Wing Hang CNY Account ”) showing a balance of CNY6,900 as of 24 March 2011;
(2) a passbook of the Deceased’s HKD savings account at Wing Hang Bank (numbered 561843-100) (the “Deceased’s Wing Hang HKD Account ”) showing a balance of HK$2,829.24 as of 24 March 2011;
(3) a passbook of the Deceased’s foreign currency savings account at the Yien Yieh Commercial Bank (numbered 01468792002917) (the “Deceased’s Yien Yieh Account ”) showing a balance of $0.91 as of 17 November 1998;
(4) cash of US$566 and HK$200;
(5) 57 silver coins;
(6) two empty boxes; and
(7) receipts.
26. Later, there was also a joint inspection of the Box with Ms Shi on 12 November 2015 in the presence of, amongst others, the legal representatives of the 1st Defendant and Ms Shi[2] . During that inspection, it was found out that only some receipts were kept in the Box with Ms Shi.
C. SUMMARY OF THE WITNESSES’ EVIDENCE
C1. The 2nd Defendant’s evidence
27. It is the 2nd Defendant’s evidence that she had a very close relationship with the Deceased.
28. According to the 2nd Defendant, she first met the Deceased and Mr King in 1978 when they visited Shanghai and they took immediate liking to her. In 1980, when the 2nd Defendant stopped by Hong Kong before going to the United States to pursue her study in the design field, she visited the Deceased. During that visit, she gave the Deceased accessories designed by her; whereas the Deceased gave her the first piece of her jewellery. Since then, she had stayed in close touch with the Deceased and Mr King and she met them every time when she travelled to Hong Kong. Over the years, the Deceased and Mr King gave her countless gifts, including clothes, accessories, luxurious handbag and various pieces of jewellery. The Deceased also designed a special piece of jewellery for the 2nd Defendant as her wedding gift; and she often expressed her appreciation of the 2nd Defendant’s taste in jewellery.
29. The 2nd Defendant gave evidence that the Deceased and the 1st Defendant had a strained relationship. She said that when Mr King was hospitalized after his bad fall in August 2010, the 1st Defendant on one occasion had an argument with the Deceased on a trivial matter at the ward and he yelled at the Deceased saying “I am waiting for you to die ” [3] .
30. Later in March 2011, during the 2nd Defendant’s visit to the Deceased at her home, the Deceased requested the 2nd Defendant to open a joint safe deposit box right away. According to the 2nd Defendant, the Deceased told her that the 1st Defendant had been going through her personal belongings while she was out of home; and that since she would like the 2nd Defendant to have some of her assets, it would be convenient for them to open a joint safe deposit box. Thus, the Box was opened on 24 March 2011.
31. It is the 2nd Defendant’s evidence that at that time, the Deceased expressly told the bank staff that she wanted to open a joint safe deposit box with the 2nd Defendant, and the 2nd Defendant should be able to access the box on her own.
32. According to the 2nd Defendant, on the day when the Box was opened, the Deceased brought various items from home. The Deceased also took out some boxes and pouches from her other safe deposit boxes at the same branch (ie Boxes with Mr King) and put them, together with what she brought from home, into the Box. During that process, the Deceased showed her some of the items and seriously hold her that “everything inside the joint safe deposit box belonged to [her] ” [4] .
33. The 2nd Defendant further claims that sometime in 2011, after the opening of the Box, the Deceased mentioned that she had also put her passbook(s) and some cash into the Box as she did not want to keep them at home, and “wanted [the 2nd Defendant] to have the monies as well” [5] .
34. On 15 April 2011, Mr King passed away. According to the 2nd Defendant, the relationship between the Deceased and the 1st Defendant did not improve. In June 2011, there was a heated quarrel between the 1st Defendant and the Deceased, which led the 1st Defendant and his girlfriend to move out of the Deceased’s residence until sometime in 2012. In addition, there were also legal proceedings involving the 1st Defendant and the Deceased over the administration of the estate of Mr King.
35. In the meantime, according to the 2nd Defendant, she maintained regular contacts with the Deceased. However, since about 2013, the 2nd Defendant found it increasingly difficult to talk to the Deceased. According to her, when her phone call to the Deceased was picked up by the 1st Defendant, the 1st Defendant would make up all kinds of excuse to prevent her from talking to the Deceased. When she visited the Deceased in person, the 1st Defendant would follow them closely.
36. Throughout the years, the 2nd Defendant only accessed the Box on three occasions, one in April 2011, one in January 2012 and one in November 2013. According to the 2nd Defendant:
(1) She went there in April 2011 in order to put into the Box some additional items of jewellery which the Deceased had given her at her home.
(2) She accessed the Box again in January 2012 because on that occasion, the Deceased asked her to wear a particular pearl necklace and a particular diamond ring, which were kept in the Box, for a dinner. After dinner, the Deceased insisted that the 2nd Defendant should bring those items home since they belonged to her anyway.
(3) Between late October and early November 2013, the 2nd Defendant managed to meet and talk to the Deceased privately. The Deceased told her that the 1st Defendant had asked her to sign a lot of papers, of which she had little idea. She repeated to the 2nd Defendant that “the contents of the [Box] belonged to [the 2nd Defendant]” and suggested that the 2nd Defendant should take the contents of the Box in order to “avoid any trouble after she passed away ”. She emphasized that “she would like to make sure that [the 2nd Defendant] got what she had put in the [Box] ”. Following that, the 2nd Defendant went to access the Box. Eventually, she decided that “it was not necessary to take out the contents of the [Box] because those already belonged to [her] ” and she sincerely hoped that the Deceased would “enjoy the contents of the [Box] ” and “[put] on beautiful and nicely designed jewellery in her lifetime as in the past ” [6] .
C2. The 1st Defendant’s evidence
37. The 1st Defendant maintains that he is the natural and lawful son of the Deceased and Mr King, and stresses that he has no knowledge that his natural parents are the Deceased’s younger brother and his wife.
38. The 1st Defendant claims that he had a good relationship with the Deceased and Mr King. When Mr King was discharged from the hospital in January 2011 after his fall in August 2010, he hired two nurses to take care of him until Mr King passed away in April 2011.
39. In his 2nd Affidavit, the 1st Defendant says that during the above period, doctors and nurses came to their home once or twice a week to check on Mr King. As a result of having strangers coming in and out of home all the time, the Deceased felt uneasy and insecure about keeping her valuable items, jewellery and coins at her home. It is his “understanding ” that the Deceased considered that it would be safer and more convenient to put her jewellery (both kept at home and in the Boxes with Mr King) in a safe deposit box jointly with the 2nd Defendant, who, by reason of her knowledge of jewellery, could assist the Deceased in getting those items she needed[7] .
40. In his examination-in-chief, the 1st Defendant explained that the basis of his said “understanding ” came from the Deceased. He was in fact told by the Deceased of the reasons why she chose to open the Box jointly with the 2nd Defendant to keep her jewellery.
41. The 1st Defendant denies that he had a strained relationship with the Deceased, in particular, he denies saying words to the effect that he was waiting for the Deceased to die. Whilst he accepts that he moved out of their home in June 2011, he claims that it was due to a quarrel between the Deceased and his girlfriend, and that he moved back home in March 2012.
C3. Wu Ji’s evidence
42. The 1st Defendant also called one Madam Wu Ji as his witness (“Madam Wu ”).
43. Madam Wu’s husband is a cousin of the 1st Defendant. In Madam Wu’s Affirmation, it is stated that she understands the 2nd Defendant’s case, but disagrees with it for the reason that the Deceased gave her various pieces of jewellery on six different occasions when she visited the Deceased at her home (respectively, in April 2011, late May/early June 2011, March 2012, April 2012, June 2012 and April 2013); on each of those occasions, the Deceased told her that those pieces of jewellery given to her had been taken out from the safe deposit box, which is defined in her Affirmation as “safe deposit box held by the Deceased at Wing Lung Bank ” [8] .
44. During cross-examination, Madam Wu accepted that the Deceased did not mention each time that she had taken the items out of the safe deposit box. She, however, was sure that the Deceased mentioned it on the first occasion because at that time, the Deceased also explained to her the reasons why she had opened the Box with the 2nd Defendant.
45. According to Madam Wu’s oral evidence (which is not contained in her Affirmation), the Deceased told her that she opened the Box jointly with the 2nd Defendant because she had safety concerns and that the 2nd Defendant could assist her in handling the jewellery items kept in the Box.
D. THE LEGAL PRINCIPLES
46. In my analysis and findings of fact, I am guided by the legal principles set out below.
D1. Burden and assessment of evidence
47. There is no dispute that the burden of proof rests on the 2nd Defendant to prove, on a balance of probabilities, that there was an inter vivos gift, or alternatively a declaration of trust in her favour, by the Deceased. For this reason, at the beginning of the trial, I directed that the 2nd Defendant should open her case first.
48. In Yung Shu Wu v Vivienne Sung Wu (2011) 14 HKCFAR 39, Lord Walker of Gestingthorpe NPJ held (at para 73) that in case of a claimant making a claim against the estate of a deceased person who cannot give evidence against his claim, the court has always approached such claim with “some suspicion ”, especially (in the case of an alleged gift) where the only or principal witness in support of the claim is the donee. That said, it was also held (at para 74) that corroboration is not required as a matter of law.
49. As far as assessment of evidence is concerned, the principles are summarized in the decision of DHCJ Eugene Fung SC in Hui Cheung Fai v Daiwa Development Ltd HCA 1734/2009 (8 April 2014) at paras 77 – 80. In short, the court will assess a witness’s evidence by reference to contemporaneous documents, inherent likelihood or unlikelihood of an event, the apparent logic of events, consistency of witness’s evidence with undisputed or indisputable evidence as well as internal consistency of the witness’s evidence.
D2. Inter vivos gift
50. As far as inter vivos gift is concerned, apart from the requirement that there must be the intent on the part of the donor to voluntarily transfer the subject property to the donee as gift, there must also be delivery to vest the property in the donee.
51. At the trial, there was at one stage a debate as to whether joint possession would amount to sufficient delivery for the purpose of inter vivos gift. At the end, counsel for both sides agreed that the law in this regard is accurately summarized by DHCJ Muttrie in Young Tin Kin Kenneth v Lau Lan Fong Nancy HCA 1545/2004 (6 September 2006), at para 61:
“ … in cases where the courts have found delivery of possession where there was no actual handing over of anything, emphasis has been placed, albeit tacitly, on the element of intention, rather than that of custody or control. What has been found is some action by the donor, going further than mere words, which indicates clearly that he gives up his intention to possess, in favour of the donee’s intention; so long as there is some such action, it is immaterial that custody or control apparently remains with the donor, or is joint, or has already passed from the donor to the donee. What is required in an action which demonstrates intention. The donor’s intention is the most important element. ” (emphasis added )
52. In determining the intention of the alleged donor at the time of transfer, the modern approach of the court is that the acts and declarations of the parties before, at the time or after the transactions are all admissible. However, contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than the words and conduct after the event: see Leung Wing Yi Asther v Kwok Yu Wah (2015) 18 HKCFAR 605 (per Stock NPJ) at paras 55 – 56.
D3. Express trust
53. As far as express trust is concerned, it is well established that an express trust may be created by the settlor declaring himself holding certain property as trustee. Such trust, however, will not be validly created unless the “three certainties” are present, namely (1) certainty of words, (2) certainty of subject matter, and (3) certainty of objects: see Hoh Han Keyet v Artimax Investment Ltd & Ors HCA 1163/2013 (30 June 2016) at para 30.
54. To create an express trust, technical or formal words are not required. Trust may be created by means of an informal declaration, or may be inferred from the acts of the settlor or the circumstances of the case. What is required is sufficiently clear manifestation of an intention to create such a trust: see Lee Sai Nam v Li Shu Chung & Anor HCA 1711/2009 (9 December 2015) per DHCJ Leung at paras 85 – 87.
55. However, equity will not assist a volunteer. Thus, the court will not treat ineffective words of outright gift as taking effect as if the donor had declared himself a trustee for the donee: see T Choithram SA v Pagarani [2001] 1 WLR 1 (PC) per Lord Browne-Wilkinson at 11E; Pennington v Waine [2002] 1 WLR 2075 (CA) per Arden LJ at para 53.
56. That said, equity will not strive officiously to defeat a gift. Hence, if words that are apparently words of outright gift can in the circumstances be construed and given effect as essentially words of gift on trust, an express trust may arise: see T Choithram SA v Pagarani (supra ) at 10H – 11B; Pennington v Waine (supra ) at para 60.
E. ANALYSIS AND FINDINGS OF FACT
E1. Reasons for opening the box in March 2011
57. A crucial issue in this case is this: why did the Deceased open the Box jointly with the 2nd Defendant and put jewellery items in it in March 2011?
58. The 2nd Defendant’s case is that the Deceased did do because the Deceased wanted to give those items in the Box as gifts to her; whereas the 1st Defendant’s case is that the Deceased had security concerns and that, insofar as it is necessary, the 2nd Defendant could assist the Deceased in handling those items in the Box.
59. In my judgment, the undisputed or indisputable objective facts are more helpful yardsticks to gauge the inherent probabilities or improbabilities of the parties’ respective cases. This is all the more so when, as so held by the Court of Final Appeal in Yung Shu Wu (supra ), I should view the evidence of the 2nd Defendant with suspicion.
60. Mr Lau, counsel for the 2nd Defendant, submitted that the 2nd Defendant’s case is inherently probable since the Deceased was a very generous and kind person and that she had extremely good relationship with the 2nd Defendant.
61. Whilst it appears to be not in dispute that the Deceased was a generous person who had a very close relationship with the 2nd Defendant, I do not think these matters take the 2nd Defendant’s case very far. As pointed out by Ms Liu, if the Deceased wanted to give her jewellery to the 2nd Defendant as a gift, the Deceased could have simply given them to the 2nd Defendant at home. In this regard, it is indeed the 2nd Defendant’s own evidence that the Deceased had done so on many occasions before as well as after the opening of the Box.
62. During cross-examination, it was suggested to the 2nd Defendant that the Deceased could have given her jewellery to the 2nd Defendant straight away without opening the Box. In answer to that suggestion, the 2nd Defendant said that the Box was opened because the Deceased had safety concerns.
63. I am not prepared to accept what the 2nd Defendant said in this respect for the following reasons.
64. First, I observe that this was not something mentioned in the affidavits filed by the 2nd Defendant. In her 1st Affidavit, the 2nd Defendant said that during her visit in March 2011, the Deceased “all of a sudden ” requested her to open a joint safe deposit box “in a hurry ”, and the Deceased further said that she wanted the 2nd Defendant to have some of her assets so it would be “convenient ” to open a joint safe deposit box. It is not suggested in any of the affidavits filed by the 2nd Defendant that the Box was opened as a way to make gift to the 2nd Defendant by reason of some safety concerns on her part or on the part of the 2nd Defendant.
65. Second, if safety concern was the reason for the Deceased to make gift by depositing her jewellery items into the Box, I would expect the Deceased would have discussed such concern with the 2nd Defendant and asked the 2nd Defendant as to, for example: What would she consider to be a safe place to keep these items of gift which, at the end of the day, would belong to her? How could they safely bring the jewellery kept at home to the Bank? There is, however, no evidence of such discussion.
66. In answer to the point that the Deceased could have given her jewellery to the 2nd Defendant without opening the Box, Mr Lau further submitted that because of the number of items involved, the Deceased could not give the jewellery to the 2nd Defendant in the same way as she had done in the past.
67. This is, in my judgment, not a very satisfactory answer. I appreciate that it is the 2nd Defendant’s evidence that the Deceased wanted to put those items of jewellery which she wanted to give to the 2nd Defendant in the Box right away because the 1st Defendant had been going through her personal belongings while she was not at home. There is, however, no dispute that the Deceased continued to keep some jewellery at home after the opening of the Box. More importantly, it is the 2nd Defendant’s own evidence that in April 2011 (ie about one month after the opening of the Box), the Deceased still gave some jewellery which she kept at home to the 2nd Defendant. I am therefore not satisfied, on the balance of probabilities, that there was such urgency for opening the Box and putting jewellery into it as alleged by the 2nd Defendant.
68. In support of his argument concerning the Deceased’s intent, Mr Lau put much emphasis on the undisputed fact that the Box was accessible by either the Deceased or the 2nd Defendant without the presence of the other, and, hence, the 2nd Defendant could take out everything from the Box at any time.
69. In my view, this undisputed fact is at best neutral on the crucial question as to the Deceased’s intent for the following reasons.
70. First, I consider this fact as a neutral factor for the simple reason that the Deceased could take out everything from the Box at any time. It does not shed light on the intent of the Deceased, one way or another.
71. Second, this fact is also consistent with the 1st Defendant’s case that the Deceased wanted the 2nd Defendant to help her to take out items of jewellery from the Box insofar as it might be necessary. Thus, the fact that the Box was accessible by the 2nd Defendant alone does not assist this Court in determining the crucial issue as to why the Box was opened in March 2011 one way or another.
72. In this regard, Mr Lau made the criticism that the 1st Defendant’s case about why the Box was opened is inherently incredible because the 2nd Defendant only stayed in Hong Kong a few times a year, and that if the Deceased wanted someone to help her to take jewellery out from the Box, she should have opened it jointly with the 1st Defendant who had returned to Hong Kong for good since August 2010. While I see some force in this submission, I do not agree that the 1st Defendant’s case is inherently improbable since the undisputed evidence is that the 2nd Defendant was the only person trusted by the Deceased who, at the same time, had good knowledge of jewellery.
73. Third, I should also mention that on this issue, the 2nd Defendant said in her examination-in-chief that she could not open any safe deposit box in Hong Kong because she had no bank account here. This is a matter that had not been touched upon in the 2nd Defendant’s affidavits. Upon cross-examination, the 2nd Defendant confirmed that this was merely her own understanding, and that the Deceased never suggested she should open her own safe deposit box. Thus, I do not think this matter shed any light on the intent of the Deceased in opening the Box in March 2011.
74. Mr Lau also made the point that it is the 2nd Defendant’s evidence (which is not seriously challenged) that the jewellery put into the Box included items taken out from the Boxes with Mr King. On this basis, Mr Lau submitted that if there was no intention on the part of the Deceased to make gift to the 2nd Defendant, there would be no reason for the Deceased to move jewellery from the Boxes with Mr King to the Box.
75. I am of the view that not much weight should in the circumstances be given to this aspect of the 2nd Defendant’s evidence (which I am prepared to accept) for the purpose of gauging the intent of the Deceased at the material time.
76. First, I must point out that the moving of jewellery from the Boxes with Mr King to the Box is also consistent with the 1st Defendant’s case that since Mr King was seriously ill by March 2011, the Deceased wanted to open the Box jointly with the 2nd Defendant such that the 2nd Defendant, instead of Mr King, might assist the Deceased in handling the jewellery kept in the Box.
77. Second, the undisputed fact is that all the four safe deposit boxes maintained by the Deceased were opened jointly with someone else (two with Mr King, one with the 2nd Defendant and one with Ms Shi). As far as the Box with Ms Shi is concerned, nothing apart from some receipts were kept in that box. In light of these undisputed facts, it is in my judgment not inherently improbable that the Deceased would simply ask people whom she trusted to open safe deposit boxes jointly with her in order to ensure someone could assist her in handling the items kept in those boxes, without possessing any intent to give away the ownership of those items to the other joint owner.
78. Another point which Mr Lau highlighted in his submissions is the undisputed fact that the statements concerning the Box were sent to the 2nd Defendant’s address in the United States; based on this, Mr Lau argued that it supports the 2nd Defendant’s case that the Deceased wanted to hide the Box and its contents from the 1st Defendant.
79. In my judgment, not much weight can be given to this as a fact supporting the 2nd Defendant’s case for the following reasons.
80. First, as explained in paragraph 67 above, the fact that the Deceased continued to keep jewellery and gave some of them to the 2nd Defendant at home after March 2011 militates against the 2nd Defendant’s case that the Deceased wanted to hide her jewellery collections from the 1st Defendant.
81. Second, the 2nd Defendant’s case that the Deceased did not want the 1st Defendant to know of the existence of the Box is to some extent built on her allegation that the 1st Defendant had a strained relationship with the Deceased.
82. Whilst there is no dispute that the 1st Defendant moved out of the Deceased’s home in June 2011 as a result of a quarrel, it is also not in dispute that he moved back in or about March/April 2012. Indeed, the Deceased by her Will made in January 2013 (which was amended by the First Codicil in September 2013) also bequeathed her residuary estate to the 1st Defendant under the Will. Thus, I conclude that the relationship between the Deceased and the 1st Defendant was not as bad as the 2nd Defendant alleged, certainly not to the extent that she wanted to hide her assets away from the 1st Defendant.
83. Third and in any event, even assuming (but without accepting) that the Deceased did deliberately hide the existence of the Box from the 1st Defendant by directing the statements to be sent to the 2nd Defendant, one cannot, without more, draw the inference that the Deceased made an inter vivos gift of the contents of the Box to the 2nd Defendant. The Deceased could have intended to hide them from the 1st Defendant without harbouring any intent of giving them to the 2nd Defendant (or anybody else) as gifts immediately. The Deceased might simply want to hide them from the 1st Defendant such that she could later decide whether and, if so, when and to whom she gave them (or part of them).
84. In this regard, Ms Liu submitted that it was improbable that the Deceased would have intended to give the contents in the Box as gifts to the 2nd Defendant since the Box contained valueless items, such as empty boxes, invoices, and a passbook of the Deceased’s Yien Yieh Account (which shows a balance of $0.91 as at 17 November 1998).
85. Further, Ms Liu submitted that the two other passbooks found in the Box (which relate to the Deceased’s Wing Hang CNY Account and Wing Hang HKD Account) further militate against the 2nd Defendant’s case that the contents of the Box were intended by the Deceased to be gifts to her.
86. The significance of these two passbooks is two-fold:
(1) First, the latest entries in these two passbooks are 24 March 2011, which was the day when the Box was opened; thus, in all likelihood, these two passbooks were put into the Box by the Deceased at the time of the opening of the Box. This, to some extent, does not sit comfortably with the 2nd Defendant’s evidence that after the opening of the Box, the Deceased on one occasion in 2011 mentioned that she had put her passbook(s) and some cash into the Box and wanted the 2nd Defendant to have those monies as well[9] .
(2) Second, and more importantly, the balances shown on these two passbooks are different from the balances of the relevant accounts at the time when the Deceased passed away[10] . This suggests that the Deceased continued to use those accounts even after placing their passbooks into the Box at the time of or shortly after the opening of the Box.
87. In my view, the contents of the Box strongly militates against the 2nd Defendant’s case that the contents of the Box were intended to be gifts; on the contrary, they are supportive of the 1st Defendant’s case that the Deceased intended to use the Box for keeping her own personal belongings. I say this for the following reasons.
88. First, the 2nd Defendant alleged that the Deceased told her that she had put her passbook(s) into the Box as she wanted the 2nd Defendant to have those monies. I find the 2nd Defendant’s allegation to be incredible.
89. The evidence before me shows that the Deceased was a sophisticated person. She knew that her estate could be dealt with in accordance with her wishes by making a will, and she indeed made the Will and the First Codicil in 2013. Thus, it must have been obvious to the Deceased that she would not be able to give the monies kept in her bank accounts to the 2nd Defendant simply by putting the passbooks into the Box.
90. Similarly, it must also have been obvious to the 2nd Defendant that the Deceased would not have been able to make a gift of the monies kept in her bank accounts to the 2nd Defendant by simply putting the passbooks into the Box. Thus, I would expect the 2nd Defendant to raise this issue with the Deceased after hearing the Deceased telling her of the intention to make a gift to her in such manner. However, according to the 2nd Defendant’s own account, she did not have any such conversation with the Deceased. In my view, the 2nd Defendant’s reaction lacks inherent probabilities.
91. I, therefore, reject the 2nd Defendant’s allegation. I find that the Deceased put her bank passbooks into the Box because she treated the Box as her safe deposit box; and that she did not say that she wanted to give the monies in those bank accounts to the 2nd Defendant.
92. Second, in coming to the above view:
(1) I attach weight to the fact that the balance of the Deceased’s Yien Yieh Account as shown in the passbook was only $0.91 (as at 17 November 1998). As rightly put by Ms Liu, what was the point for the Deceased to give away such small amount of monies to the 2nd Defendant by placing the passbook into the Box?
(2) Similarly, I also attach weight to the fact that the balances of the Deceased’s Wing Hang CNY Account and Wing Hang HKD Account as at the date of death were different from those shown in the passbooks (as at 24 March 2011). As submitted by Ms Liu, if the Deceased intended to immediately give away the balances in those accounts to the 2nd Defendant by placing the relevant passbooks in the Box in or around March 2011, why would the Deceased continue to use those accounts after that?
93. Apart from saying that the 2nd Defendant does not seek to claim the balances in those bank accounts, Mr Lau was unable to offer any satisfactory explanation to the above question. In my view, whether the 2nd Defendant seeks to make such claim is irrelevant for the present purpose since the point here is what inference should this Court draw from the fact that the Box contained the passbooks in question.
94. In my judgment, the undisputed facts regarding those passbooks found in the Box further support the inference that the Deceased put things into the Box for safe-keeping purposes, rather than as a means to make gifts to the 2nd Defendant.
95. Third, I also see some force in Ms Liu’s point that it was improbable that the Deceased would have intended to give the contents of the Box to the 2nd Defendant as gifts since she also placed in it some valueless items such as empty boxes and receipts.
96. In answer to this point, Mr Lau submitted in his oral closing that these empty boxes and receipts might relate to the jewellery items given to the 2nd Defendant by the Deceased.
97. With respect, I cannot accept Mr Lau’s submission for the simple reason that it is not supported by any evidence. The evidence before this Court is simply a document setting out some brief descriptions of the items found in the Box, which are so brief that one simply cannot know whether the empty boxes or invoices so described are related to any of the jewellery items found in the Box.
98. In passing, I also wish to add that in light of the fact that some of the contents of the Box either are valueless or cannot be meaningfully passed to the 2nd Defendant as gifts, I do not think any weight should be given to the survivorship clause in the renting agreement for the Box for the purpose of gauging the underlying intent of the Deceased in opening the Box jointly with the 2nd Defendant.
E2. The contents of the Box since March 2011
99. I now move on to consider another major dispute in this case, whether the contents of the Box had changed over time.
100. On this issue, the 2nd Defendant’s case is that over the years, the Deceased had only made more gifts to her by putting some further items into the Box; whereas the 1st Defendant’s case is that the evidence shows that it is very probable that items of the Box had changed over the years without the knowledge of the 2nd Defendant.
101. At the outset, it is important to note that the following objective facts are not in dispute:
(1) Since the opening of the Box on 24 March 2011, the Deceased had on many occasions accessed the Box in the absence of the 2nd Defendant.
(2) The 2nd Defendant did not go through each of the items when they were put into the Box in March 2011 when the Box was opened. Although she visited the Box three times after that, there was never a single occasion on which she went through everything in the Box.
(3) There had never been any written record of the items kept in the Box, until the Box was opened during the joint inspection after the death of the Deceased.
(4) The 2nd Defendant did not personally attend the joint inspection. As to those items that were kept in the Box at the time of the Deceased’s death, the 2nd Defendant could only rely on the list of inventories prepared as a result of the joint inspection (the “List of Inventories ”).
102. There are essentially two bases on which the 2nd Defendant contends that items had only been added to, but not taken away from, the Box since its opening in March 2011:
(1) First, the 2nd Defendant gave evidence that she talked to the Deceased almost every other day, and that the Deceased told her about her visits to the Box without mentioning anything about taking things out of the Box. Mr Lau submitted that given the close relationship between the Deceased and the 2nd Defendant, had the Deceased taken anything out of the Box, she would have told the 2nd Defendant about it.
(2) Second, the 2nd Defendant gave evidence that although she did not see all the items put into the Box when the same was opened in March 2011, she did during her three subsequent visits to the Box go through the items in it. She claimed that having looked at the List of Inventories, nothing seems to be missing.
103. As to the first basis, I cannot accept Mr Lau’s submission. In my view, even assuming that I accept the 2nd Defendant’s evidence about her conversations with the Deceased regarding the latter’s visits to the Box, no weight can be placed on such conversations to infer that nothing had been taken out of the Box over the years for the reason that there could be a lot of reasons why the Deceased did not mention her taking items out of the Box during her conversations with the 2nd Defendant (eg the Deceased did not see any need to inform the 2nd Defendant of it, or she simply forgot to mention it). Mr Lau’s submission, in my view, involves too much speculation.
104. I also cannot accept the second basis for the following reasons:
(1) First, as noted above, there is no dispute that the 2nd Defendant did not go through all the items that were put into the Box when the same was opened in March 2011. Although the 2nd Defendant said in her oral evidence that she did go through the items during her subsequent visits, she accepted there was never one single occasion on which she went through everything. Bearing in mind the undisputed fact (as set out in para 24 above) that in between her visits, the Deceased also had accessed the Box in her absence, the 2nd Defendant simply did not know whether the Deceased had taken items away from the Box. Hence, her evidence that nothing in the Box seems to be missing (even if accepted) is plainly insufficient to prove that no items were taken away by the Deceased from the Box.
(2) Second, given that the 2nd Defendant did not prepare any written records of the items kept in the Box during her visits to the Box, I find it incredible that she could confirm to this Court nothing was missing simply based on what she remembered to have seen during her visits and what she saw on the List of Inventories.
(3) Third, adding to what I have already said in the foregoing paragraph, I also agree with Ms Liu’s submission that the descriptions in the List of Inventories are very general. There is no description of the shape, size, brand name, etc of many of the items found in the Box; and, therefore, it is impossible for the 2nd Defendant to say that the items left in the Box at the time of the Deceased’s death were the same items seen by her during the opening of the Box and/or her subsequent visits to the Box.
105. For the above reasons, I find that the 2nd Defendant has failed to show on a balance of probabilities that over the years, the Deceased had only made more gifts to her by putting some further items into the Box and had not taken any items out of it.
106. That said, I also do not think there is sufficiently reliable evidence to establish a positive case that the Deceased took items out of the Box after March 2011:
(1) In this regard, the 1st Defendant seeks to rely on the evidence of Madam Wu, who specifically said in her Affirmation that the Deceased had given her some jewellery items on six occasions after March 2011 and told her that those items were taken out of the Box on each of the occasions. In my judgment, I find it inherently improbable that the Deceased would specifically tell Madam Wu on each occasion that the jewellery items given to her had been taken out of the Box.
(2) In her oral testimony, Madam Wu corrected her evidence and said that the Deceased might not have told her that the items came from the Box on each of the six occasions; she could remember the Deceased saying this on the first occasion, but due to long lapse of time she could not remember on which other occasion(s) did the Deceased mention the source of the items. If that is the case, it begs the question as to why Madam Wu specifically said in her Affirmation (which is written in Chinese) that the Deceased told her the source of the jewellery items on each of the six occasions when the Deceased gave her those items.
(3) In my judgment, no weight should be given to Madam Wu’s evidence about the source of those jewellery items given to her by the Deceased, which is in any event hearsay in nature.
107. In these circumstances, bearing in mind that the burden rests upon the 2nd Defendant to prove the existence of an inter vivos gift or an express trust, I have to rule against the 2nd Defendant insofar as she seeks to suggest that no items had been taken out of the Box since the opening of it in March 2011.
E3. Other subsequent conducts of the Deceased
108. In addition to the matters discussed above, Mr Lau also seeks to place reliance on the following subsequent incidents (as alleged by the 2nd Defendant) in support of the 2nd Defendant’s case:
(1) After Mr King passed away, the 2nd Defendant visited the Deceased on or around 19 April 2011 during which the Deceased gave her a necklace and a ring at home as gifts; she then told the Deceased that she would put those into the Box and the Deceased agreed.
(2) On or around 27 January 2012, the Deceased said that she wanted to see the 2nd Defendant putting on a particular necklace and a particular ring that were kept in the Box for a dinner. After the dinner, the Deceased insisted the 2nd Defendant should take those items home since they belonged to the 2nd Defendant anyway.
(3) In around late October/early November 2013, the Deceased repeated that the contents of the Box belonged to the 2nd Defendant; and she further suggested that the 2nd Defendant should take away the contents of the Box in order to avoid any trouble.
109. As to the first incident in April 2011, I do not think any weight should be given to it for the following reasons:
(1) The fact that the Deceased gave two pieces of jewellery to the 2nd Defendant at home and agreed to their being put into the Box does not, without more, support the inference that the Deceased must have intended the 2nd Defendant to own everything inside the Box. By agreeing to the 2nd Defendant’s suggestion of putting those two items into the Box, the Deceased could simply mean that she was happy to allow the 2nd Defendant to keep some of her personal belongings in the Box, which was opened in their joint names.
(2) In fact, if it were the common intent of the Deceased and the 2nd Defendant that everything in the Box belonged to the 2nd Defendant, why would the 2nd Defendant need to tell the Deceased of her intention to put these two additional items into the Box, and why would the Deceased need to express her agreement to it? In my view, the 2nd Defendant’s conduct is equally, if not more, consistent with that of her asking the Deceased’s specific permission to use the Box to keep her personal belongings.
110. Similarly, no weight should, in my view, be given to the second incident in January 2012 for the following reasons:
(1) This incident, without more, does not support the inference that the Deceased intended the 2nd Defendant to have everything inside the Box. It is equally consistent with a case that the Deceased on that occasion decided to give those two jewellery items to the 2nd Defendant as gifts.
(2) More importantly, if it were intended that the Box should be used for keeping the 2nd Defendant’s personal belongings, why would the Deceased insist the 2nd Defendant take the two items home on that occasion? In my judgment, the conduct of the Deceased and the 2nd Defendant in the first and second incidents to a certain extent militates against the 2nd Defendant’s case that the Box was intended to be used to keep the 2nd Defendant’s own personal belongings.
111. As to the third incident in late October or early November 2013, I do not accept this aspect of the 2nd Defendant’s evidence for the following reasons:
(1) I find it incredible that notwithstanding that the Deceased had warned the 2nd Defendant of her concern and requested the 2nd Defendant to take everything out of the Box, the 2nd Defendant did not take anything out of the Box.
(2) According to the 2nd Defendant’s own evidence, in around that time, the 1st Defendant had already tried to stop the 2nd Defendant from visiting the Deceased and, if the 2nd Defendant managed to do so, the 1st Defendant would try to be present and participate in the conversations between them. Thus, the 2nd Defendant must have appreciated that the concern expressed by the Deceased was a genuine one; and she should take items out of the Box as so suggested by the Deceased.
(3) The 2nd Defendant explained that she did visit the Box on 5 November 2013, but eventually decided not to take anything out of the Box because she wanted the Deceased to enjoy those items in the Box as she used to do.
(4) I find this explanation incredible for the reason that, according to the 2nd Defendant, the Deceased had told her time and again that all items in the Box belonged to her. Further, the Deceased on this occasion specifically asked the 2nd Defendant to take everything out of the Box. If that was the case, I find it incredible that the 2nd Defendant decided not to take out the contents of the Box due to her own belief that the Deceased would still want to enjoy them.
(5) Furthermore, even assuming that the 2nd Defendant still had reason not to be overly concerned with the safety of the items kept in the Box in late October or early November 2013, it would have been obvious to her by no later than December 2013 that she should take such concern seriously since, according to the 2nd Defendant, she had been cut off from and lost contact with the Deceased since December 2013. Despite losing contact with the Deceased, the 2nd Defendant still took no step to take anything out of the Box. The 2nd Defendant’s version of the events, in my judgment, lacks common sense and is incredible.
112. For the above reasons, I reject Mr Lau’s submission that the alleged subsequent conduct on the part of the Deceased supports the 2nd Defendant’s case that the Deceased had a clear intention for the 2nd Defendant to have ownership of the contents of the Box.
E4. Conclusion
113. Having considered all the above matters, and bearing in mind that I am required by law to approach the 2nd Defendant’s case with some suspicion, I am not satisfied on the balance of probabilities that, whether at the time of the opening of the Box or at any other time, the Deceased said that everything inside the Box belonged to the 2nd Defendant, and/or that she intended the 2nd Defendant to have ownership of the contents of the Box.
114. Insofar as it may be necessary, I also find on the balance of probabilities that the Box was opened jointly with the 2nd Defendant in March 2011 because the Deceased, in view of Mr King’s then health condition, wanted the 2nd Defendant to assist her in handling her jewellery items kept in the Box.
115. In coming to the finding in the foregoing paragraph, I attach no weight to the oral evidence given by the 1st Defendant and Madam Wu that they were told by the Deceased as to why had she opened the Box jointly with the 2nd Defendant. This is because none of them mentioned having such conversations with the Deceased in their respective affidavits/affirmations filed in these proceedings. That said, I take the view that the objective circumstances support the inference that the Box was opened in March 2011 for the reasons suggested by the 1st Defendant.
116. Also, for the above reasons, I come to the conclusion that the 2nd Defendant has failed to discharge her burden to show on a balance of probabilities that nothing had been taken away from the Box by the Deceased over the years. This, coupled with my findings relating to the Deceased’s intent, show that there was no effective delivery of the contents of the Box to the 2nd Defendant.
F. DISPOSITION
117. By reason of my analysis and findings set out in Section E above, I must rule against the 2nd Defendant on the live issues set out in the agreed list of issues.
118. Since the parties have not addressed me on the terms of the substantive order to be made in these proceedings in light of my rulings above, I hereby direct the 1st Defendant to submit a draft order within 7 days from the date of this judgment, and the 2nd Defendant to submit a short reply submission commenting on the terms of the draft order (if so advised) within 7 days thereafter. I will make the order to dispose of these proceedings after hearing the parties.
119. As far as costs are concerned, given that the 2nd Defendant fails in her claim, I make a costs order nisi that the costs of the Plaintiff and the 1st Defendant in these proceedings be paid by the 2nd Defendant, to be taxed if not agreed. This costs order nisi will become absolute unless the party seeking to vary it takes out a summons for the variation within 14 days from the date of this judgment.
120. Lastly, I wish to thank counsel for their most helpful submissions.
(Anson Wong, SC)
Deputy High Court Judge
Attendance of Myra Li & Co, for the plaintiff, was excused
Ms Elaine Liu, instructed by Y C Lee, Pang, Kwok & Ip, for the 1st defendant
Mr Roy Lau, instructed by W F Kwok & Co, for the 2nd defendant
[1] There is a rental receipt [254] showing that the payment for the opening of the Box on 24 March 2011 was made by way of cash.
[2] At that time, Ms Shi and the 2nd Defendant were represented by the same solicitor, ie Mr Kwok Wing Fung of Messrs K M Tang & Co.
[3] The 2nd Defendant’s 1st Affidavit, para 23 [64]
[4] The 2nd Defendant’s 1st Affidavit, para 39 [68]
[5] The 2nd Defendant’s 1st Affidavit, para 40 [68]
[6] The 2nd Defendant’s 1st Affidavit, para 41(c) [69 – 71]
[7] The 1st Defendant’s 2nd Affidavit, paras 10 – 12 [43 – 44]
[8] Madam Wu’s Affirmation, paras 4-5 [54-56]
[9] The 2nd Defendant’s 1st Affidavit, para 40 [68]
[10] In respect of the Deceased’s Wing Hang CNY Account, the balance as at 24 March 2011 (as shown in the passbook) was CNY 6,900 [3] whereas the balance as at the date of death was CNY 7,017.85 [94]; and in respect of the Deceased’s Wing Hang HKD Account, the balance as at 24 March 2011 (as shown in the passbook) was HK$2,829.24 [3] whereas the balance as at the date of death was HK$30,448.16 [94].