HO YAT WAH v. CHUNG HANG HIM (鍾衡謙), the Sole Executor named in the Will of Madam CHAN YUK MUI, deceased

HCA 731/2014

[2022] HKCFI 791

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 731 OF 2014

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JUDGMENT

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Table of Contents

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A.     INTRODUCTION

1.  In the present action, the plaintiff (“P”) claims that certain assets held by Madam Chan Yuk Mui (“Madam Chan”), now deceased, were held on trust for him and he is suing Madam Chan’s estate (“Estate”) for the return of those trust assets.   

2.  The alleged trust assets consisted of 7 real properties, jewellery items, shares and foreign currencies, cash in bank. There was also an alleged loan made by P to Madam Chan.  

3.  Counsel Ms Juliana Chow, Mr Kung Kin Chung and Ms Jacquelyn Ng, appeared for P at the trial and Mr Jonathan Ah-Weng appeared for the defendant (“D”).

B.     THE BRIEF BACKGROUND

4.  P was born in April 1953 and was 68 at the time of the trial.  He came from a family of 4 sons and he is the oldest.  He has 3 younger brothers, namely Hon Wah (Jack) who is about 3 years younger, Bing Wah (Roger) who is about 5 or 6 years younger, and Ho Wah (Jason) who is about 10 years younger.  They have a cousin Mr Leon Lai (“Mr Lai”).  Mr Lai was admitted as a solicitor in Hong Kong in August 1988 and is now the principal of Messrs Leon Lai & Co.  He is younger than P although P said he did not know by how much.

5.  Tai Wah Transportation Company (“Tai Wah”) was a business set up by P’s father in 1961 providing essentially transportation and delivery services.  According to P, in 1976, he took over the business.  P had referred to the business as “family business” but during the trial, it was P’s evidence that after 1976 Tai Wah became P’s business.  

6.  P married Madam Ng Lai Kwan Ada (“Madam Ng”) in January 1979[1].  They have a son Ho King Nam Kent (“Kent”) who was born in about 1979[2]. 

7.  On 4 July 1989, a limited company by the name of Tai Wah Sea & Land Heavy Transportation Limited was incorporated[3], and on 15 December 1999, a limited company called Tai Wah Sea & Land Transportation Company Limited was incorporated[4].  

8.  Then, on 15 March 2000, according to P, there was a swap of names, namely the name of the 1989 company Tai Wah Sea & Land Heavy Transportation Limited was changed to that of Tai Wah Sea & Transportation Company Limited (the 1989 company will be referred to hereinafter as “TW Sea & Land”)[5] and the name of the 1999 company Tai Wah Sea and Land Transportation Company Limited was changed to that of Tai Wah Sea & Land Heavy Transportation Limited (this 1999 company will be referred to hereinafter as “TWSL”)[6].  It was P’s written evidence that in about March 2000, TWSL was set up to carry on the business and operations of Tai Wah[7] but during the trial, P accepted that TWSL was incorporated in 1999.  Tai Wah’s business address, and later TWSL’s registered address, has been on 15 floor, No 48 Man Fai Building, Ferry Point, Kowloon since at least early 1990s[8] (“Man Fai Office”).

9.  As seen in the AR1 form of TWSL as of 15 December 2001[9], there were two issued shares of HKD 1 each which were transferred by two different Samoan companies to P and a BVI company Doress International Limited (“Doress”) respectively, resulting in P and Doress holding 1 share of HKD 1 each.  As at that date, P and his two brothers Hon Wah (Jack) and Ho Wah (Jason) were the directors and Hon Wah was also the secretary of the Company.  The appeared to have been no changes in the shareholding or the directorships throughout as seen in the AR1 of 15 December 2013[10].

10.  Other than TW Sea & Land and TWSL, there are at least two other limited companies which occupied the same Man Fai Office, one is called 群力重型陸運有限公司 (“Kwan Lik”) and the other one is Tai Wah (Jumbo) Company Limited (“TW Jumbo”).  Kwan Lik seemed to be in existence since 1 April 1992, as it was the evidence of P’s witness Madam Chan Kit Wai (“CKW”), a clerical staff, that she has worked for Kwan Lik since then.  As for TW Jumbo, this company seemed to be in existence since 2000 as seen later in this judgment, this company was the borrower of a mortgage loan on 27 June 2000 from the Wing Lung Bank which was secured by one of the units purchased by P at Discovery Park in Tsuen Wan[11].

11.  During the trial, P had said Roger started working for the business in about 1989/1990, followed by Jason in about 1995/1996, and that Jack joined the business only after he returned from USA after 1997.  As seen earlier, Jack and Jason are directors of TWSL but Roger is not, and P explained that Roger was bankrupt once before 1997.  In any event, all of them are still working for TWSL.  TWSL presently occupies 2 office units at the Man Fai Office, one is for P’s office and the other one is for Jack’s office and there is also a conference room in the latter unit.

12.  During the trial, P admitted he was very close to his 3 brothers.  P had transferred a property at 19C, Block 8, Discovery Park purchased in his personal name to Jack (Hon Wah) by 3 assignments respectively in 2006/2007 free of mortgage[12] and P said during the trial that the property was a gift from him to Jack for working for him.  There was another property at Whampoa Garden which was purchased in the name of TWSL and transferred to Jason (Ho Wah) and his wife Bonnie by 4 respective assignments in 2004 free of mortgage[13] which P had again said was a gift to Jason.  P also disclosed during cross-examination that he had gifted a property in Jordan to Roger (Bing Wah) before 1997 which P said Roger sold when he moved to the United States for a short while.  According to P, Roger returned only after a few weeks in the United States and started working for P.  Later, during re-examination, P then seemed to have said it was the unit at 38G B10 Discovery Park that he had gifted to Roger.

13.  Anyway, according to P, his son Kent returned to Hong Kong in June 2002 after studying abroad and started to work for P at TWSL on 1 April 2003.  Kent married in 2008 and is now father of 3 children.  P had also said that in mid 2008 he moved out of his home with his wife Madam Ng after having problems with her for many years.  Madam Ng started divorce proceedings in 2010 and the decree nisi was made absolute in December 2010[14].  P had said in his witness statement that throughout that period he suffered from emotional turmoil and that he was put on psychiatric medications. 

14.  It was not disputed that Madam Chan was first employed by P as his secretary in Tai Wah in about May 1984.

15.  Madam Chan was born in February 1963 and she was some 10 years younger than P.  She gave birth to D in February 1989.  At that time, she was living in a flat at Yau Lee Building in Mongkok (“Yau Lee Flat”).  The land registry record showed the Yau Lee Flat was purchased by Madam Chan on 1 April 1986 at HKD 245,000 with a mortgage loan and later sold on 9 September 1992 at HKD 985,000[15].

16.  It was not really disputed that D’s biological father Mr Chung Chi Wai (“Mr Chung”) and Madam Chan were never married, although P claimed he had no personal knowledge of that other than what Madam Chan had told him and that he had never met Mr Chung.  It was also not disputed that D was the only child Madam Chan had with Mr Chung out of their relationship.

17.  D’s case was that shortly after he was born, his parents separated and that in about early 1990s, P and his mother started a romantic relationship which lasted until sometime before his mother passed away.  On the other hand, it was P’s case that he never had any romantic relationship with Madam Chan. 

18.  Madam Chan had continued to work for TWSL when the company took over Tai Wah’s business until she passed away on 12 November 2012.  Madam Chan’s salary at Tai Wah/TWSL was a matter of dispute and this will be considered later in this judgment.

19.  Madam Chan was first diagnosed with Stage II breast cancer around middle of October 2007 and was admitted to the Hong Kong Sanatorium from about 29 October 2007 to 4 November 2007 where she underwent a mastectomy and thereafter she had received chemotherapy and radiotherapy at Queen Elizabeth Hospital for about half a year.  Her condition then remained stable.

20.  D said he graduated from Form 6 in 2009 and as he was not serious about getting any employment at the time, Madam Chan was worried about his future and under Madam Chan’s arrangement or at her suggestion, D had worked for TWSL for about 12 months from 1 August 2011. 

21.  It was in about December 2010, Madam Chan felt unwell again and discovered that cancer had recurred in her lungs.  Since then, she had been in and out of hospital.  It was P’s case that during the period from about 2007 when she was first diagnosed with cancer until Madam Chan passed away in November 2012, he had advanced to her various sums for her medical expenses.  This was denied by D.

22.  What was not disputed was that since about 1992, Madam Chan had acquired certain landed properties, jewellery, investments and cash in her name and/or in her possession. According to P, that all such assets were acquired with funds from him and were held on trust for him by Madam Chan for him.  This was denied by D.  Their respective pleaded case will be set out in the next section.

23.  Madam Chan had made two wills, the 1^st one dated 9 March 2010 (“1^st Will”)[16] and later another one dated 26 October 2012 (“2^nd Will”)[17].  In the 1^st Will, she appointed D as her sole executor and sole beneficiary of the Estate, after paying her debts and expenses.  In the 2^nd Will, D was again appointed as the sole executor and sole beneficiary of the Estate.  The main difference between the 1^st Will and the 2^nd Will is that in the latter, Madam Chan had set out the addresses of 4 landed properties and specifically bequeathed those properties to D, plus the residuary estate to D.

24.  Prior to making the 2^nd Will, Madam Chan had executed two powers of attorney, (i) a Specific Power of Attorney on 13 September 2012 in favour of P in relation to handling the sale of Flat B and the Roof, 18 floor, Willie Court (“SPoA”)[18]; and (ii) a General Power of Attorney on 4 October 2012 in favour of P under section 7 of the Powers of Attorney Ordinance, Cap 31 (“GPoA”)[19].  Madam Chan also purportedly signed a confirmation letter on 9 October 2012 (“Confirmation Letter”) to confirm 3 of the landed properties were purchased with money provided by P and that she only held them as trustee for P[20].

25.  Madam Chan passed away on 12 November 2012.

26.  On 20 March 2013, D obtained the grant of probate of the Estate having proved the 2^nd Will[21].

27.  It was only on 5 February 2014 that P instructed Mr Lai’s firm to issue a letter to D, being executor of the Estate, to claim for the return of the unsold properties, the jewellery items, investments, cash in bank and repayment of medical expenses advanced by P on behalf of Madam Chan[22].

28.  The writ with the statement of claim endorsed (“SOC”) was eventually issued by P on 23 April 2014, some 17 months after Madam Chan’s death.

C.     THE PARTIES’ RESPECTIVE PLEADED CASE 

C.1     P’s pleaded case

29.  In gist, it was P’s pleaded case that in about January 1990, that P and Madam Chan had entered into an oral agreement (“Trust Agreement”) and that pursuant to the Trust Agreement:

(1)     in about 1992 to 1998, P purchased 7 properties with his own funds and in some instances with the aid of mortgage loans (with P as the guarantor/borrower) but registered in the sole name of Madam Chan (collectively “7 Real Properties” and they will be referred to respectively as simply “Property 1”, “Property 2”, “Property 3”, “Property 4”, “Property 5”, and “Property 6” and “Property 7”; 

(2)     in or about 1990 to 2006, P purchased various jewellery items of diamonds, watches, gold and jade (“Jewellery”) with his own funds and he passed the Jewellery to Madam Chan solely for safe-keeping purposes and the Jewellery was of value of approximately HKD 3,883,800;

(3)     in about 1990 to 2006, P made investments in shares and foreign currencies with his own funds but in Madam Chan’s name and of total value of approximately HKD 1,638,000 (“Investments”);

(4)     P also deposited cash into bank accounts of Madam Chan of a total sum of HKD 21,189,000 (“Cash in Bank”).

The above will be collectively referred to herein as “Trust Assets”.

30.  The 7 Real Properties (with detailed addresses omitted) are set out in the following table:

	Property Address (in brief)	Date of Sale and Purchase Agreement	Date of Assignment	Purchase Price in HKD	Date of Sale	Sale Price in HKD
Property 1	Flat B, 12/F, Block 1, Prosperous Garden	09.06.92	06.07.92	3,180,000
Property 2	Flat G, G/F Tower 8, Parc Oasis	02.06.93	30.06.93	2,680,000
Property 3	Carpark No 19, Parc Oasis	14.03.95	27.03.95	730,000
Property 4	Carpark No 21, Parc Oasis	14.03.95	27.03.95	700,000	21.01.00	430,000
Property 5	Flat A, 12/F, Block 1, Prosperous Garden	15.02.96	23.03.96	3,168,000
Property 6	1A, Block 8, Discovery Park	01.04.97	25.05.98	5,400,290	12.04.12	3,980,000
Property 7	Flat B and Roof, 18 floor, Willie Court	28.09.10	28.10.10	1,780,000	18.10.12	2,380,000

31.  In so far as Property 2 (the Parc Oasis Property) was concerned, it was P’s case that he had been using this property as his personal study, and a place to store his collections and to rest, and that Madam Chan had never occupied Property 2 at all.  According to P, he has moved to reside in Property 2 in 2009 and he is still residing there.

32.  As seen in the above table, out of the 7 Real Properties, Property 4 was sold in 2010, and Property 6 and Property 7 were sold in 2012.  It was P’s case that those properties were sold by Madam Chan on behalf of and at the direction of P.

33.  As for the Jewellery, according to P, this consisted of the following 4 categories totalling about HKD 3,883,800:

	The Jewellery	Approximate Value in HKD
(1)	Diamonds – about 15 pieces their respective GIA certificates	2,000,000
(2)	Watches – About 10-12 Rolex watches, 5 Cartier watches and 2 Chopard watches	2,050,000
(3)	Gold – About 150 pieces of abacuses, ingots and navel-shaped pieces, 50 pieces of 9999 American Gold Eagle coins, and about 20 pieces of other gold ornaments	3,283,800
(4)	Jade-about 8-10 pieces of jade pendants, rings and ornaments	600,000

34.  According to P, the Investments consisted of publicly listed shares and foreign currencies totalling about HKD 1,638,000, and the Cash in Bank was HKD 21,189,000. 

35.  It was P’s case that after Madam Chan was first diagnosed with cancer, she had been borrowing money from him for her medical expenses until she passed away, by either sums of money advanced to her directly by P or by her asking P to pay her medical bills for her.  P claimed the total sum borrowed or paid by P for Madam Chan’s medical expenses amounted to HKD 1,268,500, which sum had remained outstanding from the Estate (“Medical Expenses”).  

36.  P has provided two sets of answers to D’s requests for further and better particulars (respectively “1^st Answers” and “2^nd Answers”).  In his 2^nd Answers, there were annexes attached, in particular an annex setting out his payments/transfers to Madam Chan and also a schedule of his  purchases of various items of the Jewellery (“Annex 1”)[23], an annex to set out the purchases of the Jewellery again (“Annex 3”)[24], an annex setting out Madam Chan’s accounts into which P’s payments were made (“Annex 4”)[25], and an annex to set out the Medical Expenses said to be paid by P on behalf of Madam Chan (“Annex 5”)[26].

C.2     D’s pleaded case

37.  Although D admitted that Madam Chan was employed by Tai Wah and TWSL up to the time she passed away, it was D’s case that P and Madam Chan were in a romantic relationship from since shortly after the birth of D and which continued until sometime before Madam Chan’s death when Madam Chan started to have suspicions against P.

38.  D denied that there was the existence of the Trust Agreement and that Madam Chan had always told him that the 7 Real Properties, the Jewellery, and the Investments were purchased with her own monies and that that she never held any assets on trust for any third party. Further, it was D’s case that apart from being employed by Tai Wah and TWSL, Madam Chan had earned substantial income from her partnership business carried out under the name of Chan’s Marine Supplies Company (“Marine Supplies”).

39.  D counterclaimed vacant possession of Property 2 occupied by P and mesne profits thereof for wrongful and unlawful occupation. D also denied that Madam Chan owed P the Medical Expenses as alleged by P.  It was D’s case that Madam Chan had in fact at P’s request loaned to him HKD 2m on 3 May 2012 and that this amount had remained outstanding to Madam Chan, or the Estate (“Loan”).

40.  As for the Jewellery, D’s case was that the Jewellery belonged to Madam Chan legally and beneficially.  Further, it was D’s case that his mother had told him that she had purchased various jewellery and valuable items from time to time and that she had stored them at Property 2.  D alleged that P had wrongfully and unlawfully been in possession of the Jewellery and other valuable items belonging to the Estate and claimed the return of the Jewellery or a sum of HKD 3,883,800 being the alleged value thereof.  D had also counterclaimed an account from P for monies paid by Madam Chan to P and net sale proceeds of Property 6 and Property 7.

41.  It was also D’s alternative case that if there had been any alleged monies paid by P for the purchase of the 7 Real Properties, the Jewellery, the Investments or Cash in Bank, such monies and/or any such purchase made by P were gifts provided by P and/or intended to benefit Madam Chan given the romantic relationship between P and Madam Chan and that P had never intended that Madam Chan had to repay.  

D.     THE EVIDENCE AND THE WITNESSES

D.1     The factual witnesses

42.  Apart from P himself, he had called his cousin Mr Lai and as mentioned earlier, his clerical staff CKW to give evidence on his behalf. 

43.  On D’s side, apart from himself, he had called two witnesses Madam Ho Siu Wai, Sarah (“Madam Ho”) and Madam Ngaw Shuk Chun Kinny (“Madam Ngaw”) who were said to be best friends of Madam Chan, to give evidence on his behalf.

D.2     The expert witnesses

44.  There was a dispute between the parties as to the authenticity of Madam Chan’s signature on the Confirmation Letter. Notwithstanding P’s opposition, leave was given for the parties to jointly engage a single joint expert.  Mr SC Leung of Scientific Consultancy Limited (“Mr Leung”) to determine the authenticity of the signature[27].  Mr Leung submitted a report dated 15 May 2017 (“Leung Report”)[28] and opined therein that the questioned signature on the Confirmation Letter was not written by Madam Chan.  Thereafter, P had applied for and eventually obtained leave to adduce an expert report from Mr Robert Radley dated 8 September 2017 (“Radley Report”)[29] to challenge Mr Leung’s opinion and a joint expert report was prepared on 5 October 2018 (“Joint Report”)[30].  Both experts had attended trial to give oral evidence.

45.  The parties agreed to the evidence in a property valuation report prepared by Ms Ellen Lo Yee Tak of Dudley Surveyors Limited dated 10 May 2021 (“Valuation Report”)[31]. The attendance of Ms Lo was dispensed with.

E.     AGREED SCOTT SCHEDULE

46.  There are altogether 19 items of issues set out in the Agreed Scott Schedule (“Scott Schedule”).  The 19 items can be grouped into the following 6 main issues (“Main Issues”) as follows:

(1)     What was the relationship between P and Madam Chan?  (including Item 8 and also Item 9 in relation to the authenticity of the Text Messages (as defined later)

(2)     Whether there was the alleged Trust Agreement in about January 1990?  (Item 1)

(3)     Was there a common intention constructive trust and/or a resulting trust?  (Items 6, 10, 11, 12, 13) If there was, what were/are the trust properties?  (Items 2-5, Items 16-19)

(4)     Did P lend $ 1,268,850 to Madam Chan for her medical expenses?  (Item 7)

(5)     Whether D is entitled to his counterclaim including whether Madam Chan’s payment of $2m to P on 3 May 2012 was a loan to P?  (Item 15)

(6)     Was the 2^nd Will validly executed? (Item 14)

47.  I will start with the Main Issue (1).

F.     MAIN ISSUE (1) – WHAT WAS THE RELATIONSHIP BETWEEN P AND MADAM CHAN

48.  As set out earlier, the Trust Agreement was alleged to be in about January 1990. 

49.  Property 1, namely Flat B Prosperous Garden Property, was the first of the 7 Real Properties allegedly purchased pursuant to the Trust Agreement, and it was purchased in July 1992.  According to P, he was told by Madam Chan at about the time of the purchase that she had to move out of her then residence at the Yau Lee Flat because she was being harassed by her ex-boyfriend and that Madam Chan asked him if she could live at Property 1 for a while, and it was under such circumstances that P permitted Madam Chan to move into Property 1.

50.  What was not disputed was that upon the purchase of Property 1, Madam Chan moved into the property with D and her parents and later had occupied both Property 1 and the adjoining Property 5 (upon its acquisition in 1996) until her death.  D has remained residing in Property 1 and Property 5.

51.  When P was asked during the trial in what way was Madam Chan harassed, P replied that Madam Chan told him that her ex-boyfriend kept taking showers and using her bathroom at her flat.  When it was put to him by Mr Ah-Weng that at that time he and Madam Chan were lovers, and that Property 1 was bought for Madam Chan to reside in, this was denied by P and he maintained that Property 1 was only lent to Madam Chan to reside in as she was being harassed.  P agreed that he did not advise Madam Chan to report the alleged harassment to the police or to advise Madam Chan to seek legal advice.  P also agreed that Madam Chan’s ex-boyfriend ought to know her work address and further it would not have been difficult for Madam Chan’s ex-boyfriend to find out about her new address.

52.  D’s case was that he and his mother were living in the Yau Lee Flat until his mother sold the Yau Lee Flat and used the sale proceeds to buy Property 1, when he was about 3 years old.  D said he first met P when he was about 2 or 3 years old.  It was further D’s evidence that his parents had parted on good terms, and that his father Mr Chung would visit him at Property 1 from time to time until about 1995 and it was only thereafter that Mr Chung did not come to see him and he lost touch with his father.  D’s evidence was that he had never seen his parents arguing and he had never seen or heard of any harassment by his father.

53.  It was P’s evidence that Property 1 was purchased for long investment purposes[32]. However, what was not disputed was that Madam Chan was occupying Property 1 rent free throughout, and further it was not disputed that the adjoining flat to Property 1, namely Property 5 or Flat A, Prosperous Garden Property was purchased in February 1996, and that thereafter both flats were interconnected by an internal door[33] and both were being occupied by Madam Chan, her parents and D rent free from their respective dates of purchase. 

54.  There was no sufficient evidence to contradict D’s evidence that since about 1995, Mr Chung had not visited him and he had lost contact with his father. Even if there had been harassment from Mr Chung in 1992, there was simply no sufficient evidence that such harassment had continued until 1996 when Property 5 was purchased.

55.  Property 1 was not sold for some 20 years notwithstanding that the value had gone up considerably during that period and that there was no rental income, and that this would contradict P’s evidence that Property 1 was for investment purposes.  I have to say I do not find P’s evidence as to why he allowed Madam Chan to move into Property 1 and/or for her to continue to occupy Property 1 and later Property 5, both rent free, to be convincing.

56.  P had called Mr Lai to give evidence. In Mr Lai’s witness statement, he had said he had never suspected any romantic relationship between P and Madam Chan and as far as he knew they had never had a romantic relationship and he believed that they maintained a good professional and platonic relationship throughout until her death.

57.  It was Mr Lai’s evidence that he met Madam Chan through P and in his witness statement, he had said during the period from about 1992 to 1998, he had assisted Madam Chan in the purchases, mortgages and/or releases of the 7 Real Properties, and that it was his evidence that it was only when she wanted to make a will in August 2012 to give the “things” back to P that Mr Lai learnt for the first time that she was holding properties for P.

58.  As mentioned earlier, it was the evidence of P’s clerical staff CKW that she started working for Kwan Lik on 1 April 1992, which shared/shares the same Man Tai Office as Tai Wah/TWSL.  According to CKW, Kwan Lik mainly carries out land transportation and Tai Wah/TWSL mainly carries out sea transportation, and that P is the boss of both and that the companies have shared the same office at the Man Fai Office since she was employed ion 1 April 1992, and that the warehouse of Tai Wah/TWSL was/is in Sai Kung.  Her evidence was that when she joined, Madam Chan was already P’s secretary and that Madam Chan was not treated differently from other staff when they were at the office.  The staff would address P as “華哥”. She said she had seen D once or twice when he was a young boy when he went to the office to wait for Madam Chan but could not recall whether that was after his school or not, nor could she recall how many times she saw D.  CKM had also said when D worked for TSWL, he would work in the warehouse in Sai Kung and he did not need to go to the office.

59.  When asked whether Madam Chan or P would sometimes go to a café called Sum Fat Café (深發茶餐廳) at the bottom of the building of the Man Fai Office, CKM said she did not know.  She said she attended Madam Chan’s funeral and so did P’s youngest brother Jason, but P did not.  CKM admitted that she and Madam Chan were only colleagues and they were not personal friends.

60.  D’s evidence was that his mother bought Property 1 for their residence after selling the Yau Lee Flat, and later bought Property 5 in 1996, at the time when D was starting primary school, so that she, her parents and D could have a bigger unit to live in. 

61.  According to D, after school, his school bus would drop him off at the bottom of the building where his mother was working, and that his mother would pick him up and took him to her office.  Sometimes, she would take him to the Sum Fat Café and that she would sometimes ask P to join them.  According to D, the staff at the Sum Fat Café had addressed Madam Chan as “Mrs Ho”.

62.  D’s evidence was further that every Sunday as from the time he was in primary one until about middle of secondary school, Madam Chan would bring her mother and D for “yum cha” with P and afterwards, her mother and D would be delivered home first, and then P and Madam Chan would go off together on their own.  

63.  It was also D’s evidence that Madam Chan was also addressed as “Mrs Ho” by the staff on the 22^nd floor of the Hong Kong Sanatorium Hospital when Madam Chan was hospitalised there in 2012, and that there had been occasion/s when he was visiting his mother at the hospital, he had seen P sleeping next to his mother on her bed and that when P saw him, he immediately got up.

64.  It was further D’s evidence in his witness statement that although he suspected P and his mother were having a romantic relationship, this was only confirmed when after his mother passed away when the nurse at the hospital handed over to him all his mother’s personal belongings, including her mobile phone.  When D checked out his mother’s mobile phone, he found text messages between P and his mother (“Text Messages”)[34], which confirmed his suspicion that they were having a romantic relationship.  He also contacted two of Madam Chan’s best friend who confirmed to him the romantic relationship between P and Madam Chan.

65.  The Text Messages produced by D were from 27 September 2011 @ 14:47 to 20 July 2012 @ 20:55.  According to D, there were no earlier messages than 27 September 2011 14:47 and this was because P and his mother had had an argument and the earlier messages had been deleted by his mother.  D confirmed during the trial that there were no photographs of P in his mother’s phone.

66.  During cross examination, P admitted that the telephone number of the sender of those Text Messages to Madam Chan or of the recipient of those Text Messages from Madam Chan was that of his, but he maintained that Madam Chan would not address him as “Ho Wah” and that he would not address Madam Chan as “小寶寶”. It was P’s case that the Text Messages were fabricated by D.

67.  The Text Messages disclosed there had been repayments by P to Madam Chan of a loan from her to him.  The information and identity of the payer of such repayments/payments, namely HKD 1m on 12 April 2012, HKD 95,000 on 13 April 2012, HKD 127,000 on 14 April 2012[35], HKD 138,000 on 16 April 2012 and HKD 595,000 on 17 April 2012 into Madam Chan’s account at the Public Bank (Hong Kong) would seem to have only been obtained by D and was thus only available to him when D’s solicitors received copies of the relevant cheques from the bank on 24 December 2014[36].  Annex 1, which had set out those payments from D, was only attached to P’s 2^nd Answers which were filed on 13 February 2015.

68.  There were also other exchanges in the Text Messages in relation to matters such as Madam Chan’s medical condition/treatment and her asking P to help her to deal with the roof leakage problems of Property 7. 

69.  The Text Messages were disclosed by D at the first opportunity, namely in his Defence and Counterclaim filed on 4 June 2014 after the SOC was served on D, and was thus prior to D’s solicitors had received copies of the cheques from the Public Bank.  In any event, I find the messages were spontaneous and there were communications over contemporaneous matters. There were quite a lot of exchanges between P and Madam Chan.  If the purpose was to show only the romantic relationship and/or the loans made by Madam Chan to P, there would have been no reasons for P to fabricate all those other exchanges.  P had also brought Madam Chan’s mobile phone to the Court for P and his legal representatives to check the original messages.

70.  There was no expert evidence called by P as to how the Text Messages could have been fabricated.  There was no complaint made to the police by P that someone had used his mobile number to send out messages.  Having considered the Text Messages and the evidence, I do not find it inherently probable that D could have fabricated all those Text Messages.  I accept D’s evidence that the Text Messages were genuine and they were found by him on Madam Chan’s mobile phone after her death. 

71.  As for the Text Messages, in particular the one on 24 April 2012, 19:59 indicated P had said to Madam Chan “小寶寶,擔心你,也掛念你!”[37]  and further the Text Message on 19 July 2012, 7:45 indicated that P had said to Madam Chan “小寶寶 早晨 一切放心 我會盡力而為 我愛你”^[38].

72.  The Text Messages clearly showed that the relationship between P and Madam Chan was a close and intimate one.  Ms Chow had submitted that as the Text Messages were only from 27 September 2011 to 20 July 2012 they would not support that P and Madam Chan had a romantic relationship since early 1990s.  However, it was not P’s case that he only started a romantic relationship with Madam Chan in about September 2011, it was his case that there was never aromantic relationship between him and Madam Chan.  In any event, I find the Text Messages showed a familiarity and intimacy of the relationship which could only have been built up over a long period of time.  Further, two of Madam Chan’s best friends Madam Ngaw and Madam Ho had also testified as to Madam Chan’s romantic relationship with P since early 1990s.

73.  Madam Ngaw was the first of the two to give evidence at the trial.  According to Madam Ngaw’s witness statement, all Madam Chan’s close friends including herself knew of the romantic relationship between P and Madam Chan which started in early 1990s, but Madam Chan had expressly told her not to tell D.  Madam Chan had told Madam Ngaw that ever since they started the relationship, P would give her sums of money from time to time as her maintenance and to buy her expensive gifts and that Madam Chan had shown Madam Ngaw collections of jewellery and watches at her home in Property 1.  According to Madam Ngaw, the relationship deteriorated some time before Madam Chan’s death as Madam Chan was very upset about P’s repeated requests to Madam Chan to give him Property 2 when she was dying.  Further, what upset Madam Chan most was in 2011, P told Madam Chan that he had given to his ex-wife the gold necklace which Madam Chan and P bought together over 10 years ago and worth over HKD 200,000 (“Gold Necklace Incident”). According to what Madam Chan told Madam Ngaw, the gold necklace was given by P to his ex-wife for household expenses as P told Madam Chan he had no more money.

74.  In particular, Madam Ngaw had mentioned one incident in around July/August 2012, Madam Chan called her in the middle of the night saying someone wanted to hurt her and asked her to go to the hospital immediately to take her away from the hospital.  It was Madam Ngaw’s evidence that when she and her husband arrived at the hospital, she saw P lying with Madam Chan in her bed in the hospital.  It was further Madam Ngaw’s evidence that Madam Chan was very scared and desperately urged Madam Ngaw to take her out of the hospital although P was insisting that she should stay.  According to Madam Ngaw, Madam Chan’s face showed fear and she was saying someone was trying to cause her harm and she wanted to leave the hospital immediately and in the end, she was arranged to be discharged immediately.  Madam Chan asked to be taken to Madam Ngaw’s home for the night, which Madam Ngaw did.  According to Madam Ngaw, Madam Chan later expressly told her that P was trying to cause her harm.

75.  Madam Ngaw had also said that after Madam Chan’s death, P had called her and asked her to tell D to use “何門陳氏” for Madam Chan’s funeral and that he told her he had cut a small bunch of his hair and a small bunch of Madam Chan’s hair and had tied them together to symbolize their relationship as “結髮夫妻”, meaning they were husband and wife.  Madam Ngaw’s evidence was that she did pass P’s message to D who bluntly disagreed.

76.  During the trial, Madam Ngaw had further explained that she and Madam Chan met when they were about 14/15 years old and attending Form 3 at school.  According to Madam Ngaw, Madam Chan told her she had a boyfriend at Tai Wah who died, and that their relationship only lasted several months.  At that time, Madam Chan was living in the Yau Lee Flat with her parents, D and D’s father Mr Chung.  There were 2 bedrooms, one was occupied by Madam Chan’s parents and the other one occupied by Madam Chan, Mr Chung and D.  Further, according to Madam Ngaw, the Yau Lee Flat was bought by Madam Chan and her father and that the mortgage repayments were paid by Madam Chan whilst her father paid the management fees. 

77.  Madam Ngaw said she was not sure when Madam Chan and Mr Chung separated.  However, according to Madam Ngaw, Madam Chan had told her that after her boyfriend at Tai Wah died, on one occasion P was drunk and P asked Madam Chan to stay with him which she did and that was how the relationship between Madam Chan and P had started.

78.  Madam Ngaw said she had been to Property 2 and that Madam Chan had told her that frequently on Sundays, she and P would go to Property 2 to rest and to spend time together.  Further, on such occasions and if Madam Ngaw was free, Madam Chan would ask her to help care for D, and this was when D was about 2 or 3 years old and this continued until D was about 4 or 5 years old.  On these occasions, Madam Ngaw said she would take D to “Yum Cha” or for swimming but later when D was about 5 years old, as Madam Ngaw had a boyfriend at that time, she spent less time caring for D and that Madam Chan had other friends who had kids and D would go and spend time with them.  It was also Madam Ngaw’s evidence that on Sundays when Madam Chan went to meet with P, she would only return home late in the afternoon.

79.  During the trial, Madam Ngaw had mentioned a number of matters such as she had gone with P and Madam Chan and also P’s friends to karaoke lounges and had seen P and Madam Chan behaving in an intimate manner, hugging and kissing each other, but such evidence was not in her witness statement.  I would ignore such of her evidence which was not in her witness statement, but in my view, this would not detract from her other evidence in relation to the relationship between P and Madam Chan and/or what Madam Chan had told her. 

80.  As for Madam Ho, it was her written evidence that she and Madam Chan had known each other since 2000/2001 through introduction by their common friends, and that they had maintained very frequent contacts and were always hanging out together until Madam Chan passed away.  Madam Ho had understood that Madam Chan had never married but she had a boyfriend, namely Mr Chung and that D was born out of their relationship, and that they separated shortly after D was born.  She said she had never heard of Madam Chan complaining of any violence or harassment by Mr Chung.

81.  According to Madam Ho, Madam Chan had told her she started her relationship with P since early 1990s, and that P was married and had a son.  Madam Ho had said she would have lunch with Madam Chan from time to time at Sum Fat Café and that all the staff there would address Madam Chan as “Mrs Ho” and that they would shop together at the jewellery shops such as Chow Tai Fook and the staff there would also address Madam Chan as “Ms Ho”.

82.  Madam Ho had also said when she visited Madam Chan at the hospital, she always saw P lying with her on her bed, and that Madam Ho had found this rather embarrassing and felt strange that the hospital would allow this.  It was put to her that she only saw this on one occasion. Madam Ho denied and said it was more than once.  It was also Madam Ho’s evidence that the hospital nurses all regarded P as Madam Chan’s husband, and Madam Chan had a carer who also thought P and Madam Chan were husband and wife, and Madam Chan did not deny this.  Madam Ho had also described Madam Chan’s relationship with P was half his secretary and half his lover.

83.  The incident which Madam Ngaw described at the hospital in July/August 2012 was supported by a DAMA Form dated 16 July 2012 1:50am[39] (“DAMA Incident”).  The DAMA Form was signed by P and his relationship with Madam Chan was described as “husband and wife”.  Madam Chan was re-admitted on 17 July 2012, 2pm[40].  Although it would appear that Madam Chan could be suffering from hallucination, anxiety and/or hysteria[41] that night when she wanted to be discharged immediately, what was clear was that Madam Chan had wanted to be taken away from her room in the hospital when P was staying with her for the night, and to stay with Madam Ngaw instead.

84.  Although Madam Ngaw’s and Madam Ho’s evidence was largely hearsay, in that they were only told by Madam Chan of her relationship with P, there was direct evidence such as their own observation in seeing P lying with Madam Chan on the same hospital bed (which also supports what D had said).  In Madam Ngaw’s case, she confirmed what P had said to her regarding the funeral arrangements.  Madam Ngaw had also mentioned that Madam Chan had saved up to buy properties and when cross examined as to from where Madam Chan had made her savings, Madam Ngaw’s response was “[原告人]有的錢俾佢,包二奶, 俾咗二奶, [二奶]可唔可以儲起” .  What Madam Ngaw meant was as P’s mistress, Madam Chan could have savings from monies given to her by P.  Madam Ho’s evidence that Madam Chan was addressed as “Mrs Ho” by the staff at the Sum Fat Café supported D’s own evidence.  In any event, notwithstanding P’s challenges to their credibility, I find Madam Ngaw and Madam Ho both reliable and credible witnesses.  They were close to Madam Chan and there was no reason for them to doubt what Madam Chan had told them, nor was there any reason for them to make up their stories. 

85.  P had intimate knowledge of Madam Chan’s health and he had accompanied Madam Chan on her visits to doctors.  He admitted he was the one who drove Madam Chan every time to her doctor for her chemotherapy treatment after her first cancer.  Madam Chan’s doctor in 2011 was Dr George Au and on Dr Au’s record, P was named as the emergency contact.  Madam Chan was admitted to the Hong Kong Sanatorium Hospital on 14 separate occasions from 29 February 2012 until 12 November 2012[42].  P had signed some 20 forms wherein the relationship between P and Madam Chan was described as “husband and wife” or “family/relative”[43]. When all those forms signed by him with descriptions were shown to P during cross examination, P’s evidence was that those descriptions were added later after he had signed.  When asked who would have written/added those descriptions of him being Madam Chan’s husband/relative, P claimed he did not know and that it was a misunderstanding on the part of others.  I do not find that P’s evidence was credible.  In any event, there was no evidence that P had ever corrected people such as Dr Au or the Hong Kong Sanatorium Hospital nurses/staff addressing/regarding him as the “husband” or “family/relative” of Madam Chan.  Ms Chow submitted if there had been a romantic relationship with Madam Chan and/or P had designs on her assets, P could simply marry Madam Chan. I do not quite understand this submission.  There was no suggestion from P nor was it his evidence that he had wanted to marry Madam Chan when she was alive. Further, marrying Madam Chan did not mean that P would necessarily get her assets.

86.  CKM was not a personal friend of Madam Chan and there was no reason why she would know of whether P and Madam Chan had a romantic relationship.  The fact that Mr Lai did not suspect that there was any romantic relationship between P and Madam Chan was also not surprising as although he had known Madam Chan for more than 20 years, as he himself had said, they became friends through their working relationship.  Mr Lai had said Madam Chan would often call him in relation to any company problems, or her own legal problems or her friend’s legal problems, and clearly their relationship was that of a working/professional relationship.  There was no evidence that Madam Chan had regarded Mr Lai as a close personal friend and in fact Mr Lai had said during the trial, he did not know that Madam Chan had breast cancer and underwent a mastectomy in 2007.  There was no reason why Madam Chan would have told Mr Lai of the true nature of her relationship with P.

87.  When asked about his relationship with Mr Lai, P had said Mr Lai was living in Aberdeen and P was living in Jordan and they would only see each other at Chinese New Year or any family celebrations and that Mr Lai would always charge him for any professional services.  As there was no evidence that P and Mr Lai had any close relationship other than they are cousins, there was no reason why Mr Lai would know of the real nature of P’s relationship with Madam Chan, particularly when P was married at the time and had a son and it was not until 2010 that P was divorced.

88.  I have found earlier that the Text Messages were genuine and that Madam Ngaw and Madam Ho reliable and credible witnesses. Having considered all the evidence, it is my finding that there was a romantic or an intimate relationship between Madam Chan and P which started shortly after D’s birth in early 1990s and although they were not cohabiting under the same roof, they did frequently meet and spend time in Property 2.  I further find that their romantic and/or intimate relationship had continued and they were close to each other until as set out below. 

89.  It would appear from the evidence of Madam Ho and Madam Ngaw that towards the end of 2011, P was constantly telling Madam Chan that he was in financial difficulties in his business and that he had asked Madam Chan for a loan from time to time although he had also made repayments.  As mentioned, there was the Gold Necklace Incident.  Although Madam Chan was very upset, in the end, she did give P the gold necklace which was worth about HKD 200,000.  There was also a request for a diamond ring from P which Madam Chan also gave him.  According to Madam Ho, Madam Chan told her that P had his greedy eyes on her assets, in particular Property 2 and P had repeatedly asked her to give him that property.  As said earlier, I find them reliable witnesses.  I find that the relationship between P and Madam Chan started to take a turn towards latter part of 2011 in that it would appear that Madam Chan was losing her trust in P and was often upset by P.  This would also support D’s evidence that Madam Chan was upset with P and deleted all the Text Messages prior to 27 September 2011.  To conclude, I find P and Madam Chan started a romantic and intimate relationship in early 1990s shortly after D was born and that Madam Chan was P’s mistress, and it was only around September 2011 that Madam Chan started to lose her trust in P.

G.     MAIN ISSUE (2) - WAS THERE WAS THE ALLEGED TRUST AGREEMENT IN ABOUT JANUARY 1990

G.1     Generally

90.  The starting point is that there is a presumption that the beneficial interest is to follow the legal interest and that the party seeking to show that they are different bears the burden of proof[44].  The burden is thus on P to show that he was and/or is the beneficial owner of the Trust Assets in question.

91.  P’s pleaded case in relation to the Trust Agreement in the SOC was based on an oral agreement the terms of which were expressly agreed by P and Madam Chan and for which the consideration was stated in P’s 1^st Answers to be P waiving debts of about HKD 20,000 to HKD 30,000 allegedly owed to P by Madam Chan (“Consideration”)[45]. 

92.  In Ms Chow’s Opening Submissions, it was confirmed that P was no longer relying on any express trust  in respect of the 7 Real Properties given the requirements of section 5(1)(b) of the Conveyancing and Property Ordinance, Cap 219,  but that it was still P’s case that the Trust Agreement was capable of giving rise to express trusts in respect of  the rest of the Trust Assets[46].  There were no further submissions on this in P’s Closing Submissions.  Essentially during the trial P was relying on common intention construction trust and/or resulting trust for the 7 Real Properties and also for the rest of the Trust Assets.

93.  P’s case seemed to have undergone a metamorphosis and was confusing, as there were no pleadings as to any common intention constructive trust and/or resulting trust, nor any particulars as to how the common intention constructive trust and/or resulting trust arose.  Be that as it may, I shall consider P’s case as it was during the trial.

G.2     Reason and purpose for creating the alleged Trust Agreement

94.  P’s case was there was never any romantic relationship between him and Madam Chan, and all along according to him, it was only a platonic relationship and an employer and employee relationship. 

95.  As to why P would need to enter into a trust agreement with Madam Chan, according to P’s 1^st Answers, the reason and purpose for P to create the Trust Agreement was to separate his own personal assets from his family’s assets, that is, assets held by TWSL[47] . In answer to the request as to whether Madam Chan had ever been requested to or did sign any document in relation to the alleged Trust Agreement, P had relied on two documents[48]:

(1)     the GPoA dated 4 October 2012 executed by Madam Chan in favour of P;

(2)     the Confirmation Letter dated 9 October 2012 which was said to be signed by Madam Chan in the presence of both P and Mr Lai, to confirm that Property 2, Property 3 and Property 5 held under Madam Chan’s name were in fact purchased with all purchase monies provided by P, with the intention that Madam Chan should hold the said properties as trustee for the interest and benefit of P. 

96.  In addition to the above, P also relied on the SPoA to support the existence of the Trust Agreement as seen in Item 11 of the Scott Schedule, and on D’s work experience at TWSL for D’s public housing application as seen in Item 10 of the Scott Schedule.

97.  In P’s 2^nd Answers, P had said that he remembered orally asking if Madam Chan would agree to act as his nominee so that P would transfer to her the subject matter or legal title of his then existing assets or assets to be acquired; and she would then keep, hold and/or deal with P’s said assets according to P’s directions, and Madam Chan had orally agreed[49].

98.  The purpose and reason stated in P’s 1^st Answers for creating the Trust Agreement was again repeated in P’s Re-Re-Amended Reply[50], namely to separate his own personal assets from his family’s assets held by Tai Wah/TWSL.  As it was P’s evidence during the trial that after 1976 Tai Wah was his own business, any assets of Tai Wah would be his assets and not family assets.  It was thus not clear what family assets he was referring to.  In P’s Closing Submissions, it was submitted on his behalf that P’s arrangements in respect of acquiring and safekeeping his wealth assets underwent a sea change in or around 1989/1990 when there was an accident with a shipment of an industrial photocopier (“Accident”) and after the Accident, P decided to make two changes: (i) to separate his personal and corporate assets; and (ii) to entrust his personal assets to an administrator other than his then wife[51].  Thus, P’s reason/purpose for creating the Trust Agreement had changed to (i) separating personal from corporate assets and (ii) entrusting his personal assets to an administrator. 

99.  There appeared to be no mention of the Accident or any accident in 1989 in his pleadings, and the reference to the Accident in 1989 seemed only to appear in P’s witness statement of 8 January 2016.  In any event, it was never P’s pleaded case nor evidence that Madam Chan was only an administrator. 

100.  The Accident was said to be in or about 1989.  According to P, a large industrial photocopier was damaged at sea whilst being delivered by Tai Wah and there was a dispute with the insurance company with regard to the policy, and a sum of about HKD 2 million was required to prevent the ship that delivered the photocopier from being arrested.  According to P, as most of his then assets were held under Madam Ng’s name, when he asked her to transfer HKD 2m to him, she refused.  P said he then asked his cousin Mr Lai for advice and Mr Lai advised P to set up a limited company to avoid mingling his personal assets with that of the business assets.  P said in the end, he had to borrow HKD 2 million to prevent the ship from being arrested.

101.  P’s evidence was that after the Accident, he became aware of Madam Ng’s attitude towards money, but as his only son Kent was only about 10 years then, he did not want to fight with her.

102.  It was also P’s evidence that at the time of the Accident, he was working with a Taiwanese company in relation to storage for cargos from and to Taiwan, and that the operation was rather complicated involving other parties, and that Madam Chan had helped him in keeping the accounts, holding funds generated from it and apportioning the same to various interested parties.  P said his workload was very heavy at the time, and Madam Chan had helped him in running many errands and he had accumulated certain trust in her.  When he proposed the Trust Agreement to Madam Chan, she was willing to hold his properties in her name.  P also said he and Madam Chan agreed to the Trust Agreement so that it would be easier for her to execute documents, and that he could better manage his own assets, and not mingle his personal assets with his business assets[52].

103.  There had been no supporting documents produced by P in relation to the Accident or that Madam Ng had refused to let him have $2m, or that at the time he was working with a Taiwanese company in a complicated operation.  Although Mr Lai confirmed that P had sought legal advice from him in relation to the Accident which took place when P was under unlimited liability being the sole proprietor of Tai Wah, it was Mr Lai’s evidence during the trial that at the time, he did not know that P had approached Madam Ng for money or that Madam Ng had refused to give him the money.  Mr Lai said he learnt of this only after the commencement of this action. 

104.  In any event, P’s available bank statements at the Asia Commercial Bank (“ACB”), later known as Public Bank (“PB”), showed that P had continued to pay sums of money to Madam Ng including a sum of at least HKD 90,000 to Madam Ng almost every month from December 2000 and well into 2006.  As said earlier, P and Madam Ng were only divorced in 2010 and there was no sufficient evidence to show that Madam Chan had refused to help him after the Accident.

105.  P’s evidence was the purpose of the Trust Agreement was also not to mingle his personal assets with his business/corporate assets.  In P’s witness statement he had said that it was in March 2000[53] that TWSL was set up to take over Tai Wah’s business.  During the trial, P had agreed that TWSL was in fact set up in 1999 and not in March 2000.  However, it was not P’s evidence that the 1989 company was the one which took over Tai Wah’s business.  Whether it was 2000 or 1999, it was still some 10 years after the Accident that TWSL took over Tai Wah’s business.  When this was pointed out to P by Mr Ah-Weng, P had agreed that he had had the advice from Mr Lai for a long time, but he had delayed in setting up TWSL to take over the business of Tai Wah.

106.  There was however no reason given by P for such delay.  Whether he was a sophisticated businessman or not, he was specifically advised and he could have arranged for a limited company to take over Tai Wah’s business as early as in 1989.  Further, as P’s evidence during the trial was that TWSL was his company (although at times he had referred to it as family business), it would mean that the BVI company Doress was holding its 1 share for P.  P admitted during the trial that he was aware that having a BVI company would make it difficult for the public to find out who the beneficial owner was and it was thus open for P to arrange for a BVI company to hold his personal assets, latest from 1999 onwards.

107.  I find P’s evidence confusing as to the purpose of why he needed to create a trust and/or why P would need to entrust his personal assets to a trustee.  There was no proper explanation as to why P could not hold his personal assets under his own name particularly when after the Trust Agreement he had purchased properties under his personal name such as the two Discovery Park properties mentioned below.  It was submitted on behalf of P that it was out of necessity and to fulfil requirements beyond his control and it seemed to be P’s case this was because the Discovery Park properties were purchased through internal subscription from a staff of the developer as confirmor.  P had mortgaged one of the Discovery Park properties in his name to Wing Lung Bank to obtain a loan for TW Jumbo.  It seemed that P was not concerned about he being the registered owner of properties.  The point is if P could buy the two Discovery Park properties in his personal name in 1998, why would he need to buy a 3^rd Discovery Park property, ie Property 6, also in 1998, in the name of a trustee or Madam Chan.

108.  The evidence showed that there had been large sums of transfers/cheque deposits in say, P’s saving account with Nanyang Commercial Bank between 1997 and 2000[54] and also into P’s ACB savings account between 10 June 2008 and 1 July 2008 of some HKD 24,780,000 and that between 3 July and 9 July 2008, he had disposed of the entire sum by 4 withdrawals[55], three of which were outward remittances to whereabouts unknown and the 4^th one was HKD 5m to Madam Chan’s ACB Current Account.  There was no sufficient evidence that P was concerned over receiving large sums of money in his personal bank accounts or dealing with his personal funds, which he was capable of dealing.  When asked during cross examination why he needed a trustee for his personal assets, all P said was he had his own reasons.

109.  When asked during cross examination as to why he did not ask any of his brothers to be trustees and/or witnesses to the Trust Agreement, P said he had not thought of that.  Later during re-examination when he was asked to explain his answer, P’s explanation was that there could be many gossips between his sisters-in-law and he did not want his brothers and particularly their wives to know about the extent of his wealth because it might unnecessarily complicate family relations.  However, this evidence or reason was not in his witness statement.  Further, as mentioned earlier, P had admitted during the trial that he was very close to his brothers.   

110.  As mentioned earlier, P admitted that he had transferred to each of his brothers respectively in 1997, 2004 and in 2006/2007 a property by way of gift.  

111.  The land registry record showed that in 1995, TWSL had acquired a property at Whampoa Garden for HKD 4,200,000 which TWSL transferred to P’s brother Jason and his wife in 2004 free of mortgage, which P said was a gift to reward Jason for working for TWSL.  As said, in 1998, P had acquired two properties at Discovery Park both in his personal name[56], whether one was given to Roger or not[57], the other one was definitely transferred to Jack in 2006/2007 free of mortgage which P said was a gift for Jack working for P’s business which included TWSL.  These gifts would show that P was very generous towards his brothers and there was no sufficient evidence that P was keeping his wealth a secret from his brothers.

112.  In any event, there was no sufficient evidence from P that he had made substantial profits from sources other than Tai Wah and/or TWSL and/or Kwan Lik and/or TW Jumbo.  According to P’s witness CKW, in 1992, there were about 6-7 staff employed and 5 worked in the Man Fai Office and the others would work outside, and in 2016, there were about 10 odd staff employed by Kwan Lik and about 30 staff employed by TWSL and this would include P’s 3 brothers but all along there would still be only 6 or 7 staff in the office and the rest would work outside the office, such as drivers or workers on the ship.  It was CKW’s evidence that Madam Chan was responsible for assigning work for her and two other staff.  CKW had also said during the trial that it was the TWSL staff who was responsible for paying salaries and bonuses and issuing reminder notices for loans to staff of both companies[58].

113.  It was P’s own case that TWSL remains to this day a small and close-knit establishment akin to a family business[59].  P’s businesses had clearly grown over the years and there was no sufficient evidence that this was a secret kept by P from his brothers.  As P’s brothers have worked for Tai Wah/TWSL for many years and two of them are directors, there was no reason why they would not have known the financial situation of the businesses and companies.  It was never P’s pleaded case nor his evidence that he created the Trust Agreement to keep his personal assets a secret from his brothers.

114.  Having considered all the above, I have to say I do not find P’s explanation as to why he did not ask any of his brothers to be a trustee and/or a witness to the alleged Trust Agreement credible.  

115.  In fact, P’s cousin Mr Lai, a professional solicitor, could also have been trustee.  However, it was Mr Lai’s evidence in his witness statement that P had asked him to hold properties for him a few years ago, exact date of which he said he could not remember but that he had refused to do so as he could not be sure or guarantee that the administrator of his (Mr Lai’s) estate upon his death would return the properties to P. 

116.  First of all Mr Lai’s evidence was vague as to when he was approached by P, as Mr Lai had said, “a few years ago”, this would not have meant 26 years ago, namely January 1990, which was not long after he was admitted as a solicitor.  Secondly, what Mr Lai said was not quite understandable, as being a solicitor, surely if he were to hold properties for P or any client, one would have thought he would ensure there would be a legally enforceable written agreement or a declaration of trust in writing properly prepared and executed in presence of witnesses, and/or made it clear in his will what properties he was holding as trustee.  I would not have thought that there was any reason for Mr Lai to think that the administrator of his estate would not return the properties to P.  Thirdly, if P had indeed approached Mr Lai and if Mr Lai had refused with the reason given by him, he could have advised P to approach a professional trustee, and there was no evidence that he did.  Fourthly, one would have thought being told Mr Lai’s alleged reason for refusal, this should have alerted P at the time to ensure there would be something in writing to evidence the alleged Trust Agreement, or to arrange for Madam Chan to hand back the assets held for him, or to arrange to sell the properties.  

117.  In any event, P himself had said in his witness statement that after his son Kent returned to Hong Kong in June 2002, P had given most of his purchases to him for safe keeping.  However, as it was troublesome to hand over the accounts and he did not want Kent to know about all his father’s assets so soon after he graduated, he had allowed Madam Chan to continue to manage his funds in her bank accounts under the Trust Agreement.  P then went on to say in his witness statement that since Kent’s return, most of the new real properties and assets purchased by P were held on trust for P by Kent and that after Kent married in about 2008 P had also purchased some of his properties in the name of his daughter-in-law.  In this respect, P had listed some 14 properties purchased between October 2005 and March 2015 said to be purchased by P and held in the name of Kent and/or his wife on trust for P, out of which 9 were purchased on or prior to 9 September 2010[60].

118.  Again, P’s evidence was self-contradictory.  If since 2005 P had already been entrusting Kent to hold properties on trust for him, thereafter none of the Trust Assets alleged by him would need to be held by Madam Chan as trustee.  One would have thought that when Madam Chan was first diagnosed with cancer in October 2007, latest by then, P should start arranging for Madam Chan to hand over her trustee’s/administrator’s duties to Kent and/or his wife and yet, thereafter Property 7, which according to P was part of the Trust Assets, was purchased in Madam Chan’s name at about end of September/October 2010, and further according to Annex 1[61], large sums continued to be transferred by P to Madam Chan after 2005.

119.  Having considered all the evidence and the above, I do not find P’s evidence about his reason or purpose of creating the alleged oral Trust Agreement with Madam Chan in January 1990 to be credible, and I find there was no reasonable purpose for P to create a trust.  There was no sufficient evidence that he needed a trustee or an administrator for his personal assets.

G.3     The alleged Trust Agreement

120.  According to P’s pleaded case in the SOC, the terms of the Trust Agreement were:

(1)     P’s solely-owned and/or personal assets and all new personal assets to be acquired would be transferred to and/or purchase and/or kept in the name of Madam Chan as nominee of and on trust for him solely for safe keeping purposes;

(2)     Madam Chan would hold and/or keep the said assets of P on trust solely for the use and benefit of P; and

(3)     P would remain the sole beneficiary to all the said assets. 

121.  Further, it was expressly agreed between him and Madam Chan under the Trust Agreement that (a) whilst Madam Chan kept the said assets and/or held the legal title in respect of the said assets on trust for P, she did not own and in any event was not entitled to any beneficial title or ownership in respect of the said assets or at all; (b) P was and is the sole beneficial owner in respect of the said assets; (c) at any time after the Trust Agreement Madam Chan was to return the said assets and/or re-convey or re-assign the legal title in respect of the said assets in favour of P upon the request or instruction of P.

122.  The “said assets” in the Trust Agreement would thus consist of (i) P’s then solely-owned assets and (ii) all new assets to be acquired by P.  When D requested for further particulars, all P said in his 1^st Answers was to refer to paragraphs 5-10 of the SOC[62].  Property 1 was only purchased in June 1992.  Although P had pleaded that there were items of Jewellery purchased in about 1990 to 2006, from the table in Annex 1 and/or Annex 3, the first of such items was in September 1992 in the sum of HKD 2,029.  As for the Investments pleaded to be made by P with his own funds in about 1990 to 2006, the table of cheques and transfers from P to Madam Chan set out by him in Annex 1[63] only started from 7 October 1998.  There was no sufficient evidence as to what P’s solely-owned assets were in about January 1990 or what solely-owned assets had been transferred by P to Madam Chan after the alleged Trust Agreement in about January 1990 until the purchase of Property 1 in June 1992. 

123.  In P’s witness statement, his evidence was that it was agreed between him and Madam Chan she was to act and deal with any assets in accordance with his instructions and that he would give her instructions to deal with his assets from time to time. Madam Chan was not allowed to sell, dispose or otherwise use the said assets unless upon his instruction and consent.

124.  It was P’s evidence that all directions he gave Madam Chan to deal with each of the 7 Real Properties were verbal directions as he saw Madam Chan every working day, and that Madam Chan had kept comprehensive records of his properties and assets and that she would show him the said records from time to time and any important documentation.  In short, P’s evidence was that:

(1)     Madam Chan would write down a record of the Jewellery, the Investments, Cash in Bank, the mortgage instalments that had been repaid for the 7 Real Properties and any outstanding loans that various peoples owed to P;

(2)     Madam Chan kept all the records in a grey cardboard file (“Cardboard File”) which she would periodically update and every two months, Madam Chan would show P at the office the Cardboard File containing all previous records;

(3)     Madam Chan also marked down the repayments of loans to P by various people on the bank passbooks kept in a drawer at the office under lock and key;

(4)     when P visited Madam Chan at Property 1 when she was too weak to go to the office, she took out from a room to show him a transparent plastic file containing two sheets of A4 paper with the most updated records (“Plastic File”). 

125.  It was put to P that what he said in relation to the Cardboard File or Plastic File was made up by him.  P denied this and maintained that the Cardboard File was kept by Madam Chan in the office and that the Plastic File was kept by Madam Chan in her home at Property 1.  P however admitted that all the records were kept by Madam Chan and that he had not kept any records of his own. 

126.  According to P’s witness CKW, although the staff would have desk with drawers with locks in the office, there would be a set of spare keys kept by P, and that if there was a need, other staff could open the drawers and to access company’s documents with the spare keys.  If indeed there was the alleged Trust Agreement, one would have thought that P being the beneficial owner of all the Trust Assets, he could have access to any information kept by Madam Chan in the Cardboard File himself at any time, that is if there was the Cardboard file and that it was indeed kept in the office, and there was no need for Madam Chan to update him every two weeks.

127.  It was also put to P that the invoices produced by P in relation to the Jewellery items were stored by Madam Chan in Property 2, which he denied. In the SOC, P had set out a schedule of the Jewellery items claimed by him and allegedly were passed to Madam Chan for safe-keeping, and he had valued the total to be HKD 3,883,800, but in his 1^st Answers, he had listed 33 items totalling HKD 1,360,263. Under cross examination, he admitted that he had no documents to prove when the items in the schedule in the SOC were purchased or the purchase price of each item or their whereabouts, and the figures were only his estimates.  P also admitted that he had no documents to prove, when, at what price or whereabouts of the shares/investments set out in the schedule of Investments in his SOC.

128.  I accept what was submitted by Mr Ah-Weng, P seemed to be re-constructing his case, in particular in relation to the 7 Real Properties, from public documents and his own bank statements and what invoices he could find.  As admitted by P, he had never kept any contemporaneous records of his own and that all the records were kept by Madam Chan.  That Madam Chan had kept records of all the purchases of the 7 Real Properties, and also for the Jewellery items and Investments would not mean that there was any express agreement that Madam Chan was to hold those assets on trust for P pursuant to any oral trust agreement.

129.  There was no proper explanation as to why the alleged Trust Agreement could not have been reduced into writing and signed by P and Madam Chan in presence of witnesses since it was reached by them in his office. There were also no witnesses to the agreement.  As mentioned earlier, any of P’s brothers, or Mr Lai or any other independent third party, could have been a trustee and/or a witness. The evidence indicated nothing was done by P to put something in writing in relation to the oral agreement and that P was content with there being no written agreement and nothing in writing until some 22 years later when Madam Chan was in her last days.

130.  As seen in the copies of the assignments in 1998 in relation to P’s purchase of the two Discovery Park properties from the predecessor Hui Kin Chung[64], in the recitals therein, there was mention of a deed of declaration and it was P’s evidence that those properties were acquired through Mr Hui (a staff of the developer) through internal subscription.  The purchase of the two properties was thus stated to be pursuant to a declaration of trust[65], and these conveyancing documents were confirmed by Mr Lai to have been explained to P.  Thus P should be fully aware of the existence and significance of a “declaration of trust”, and there was no reason why he could not have asked Madam Chan to sign a declaration of trust or at least an acknowledgment in writing to confirm the terms of the oral Trust Agreement, say latest by 1998.

131.  There was no mention of the Consideration in the SOC at all and it was only in P’s 1^st Answers that he mentioned the Consideration.  There was no submission made in relation to the Consideration in P’s Closing Submissions.  Although there was evidence from CKW that Tai Wah/TWSL would advance sums to staff and there would be notices of reminders sent to staff for deductions or repayments at the time of payment of year end bonuses, there was no sufficient evidence that there was any amounts owing by Madam Chan to P or Tai Wah in January 1990 or there was any sufficient evidence of any waiver from P or that this was a consideration for the alleged Trust Agreement.

132.  P had admitted that there was no premediated or over-arching plan or schedule to acquire the 7 Real Properties at the time of the alleged oral Trust Agreement, or any of the Trust Assets.  The actual trust assets to be transferred to Madam Chan and/or to be acquired later pursuant to the Trust Agreement were never specified nor made clear at the time of the alleged Trust Agreement.

133.  Having considered all the evidence and what has been stated above, it is my finding that there was no sufficient evidence of there being the alleged oral Trust Agreement or any trust agreement or express agreement entered into between P and Madam Chan in about January 1990, as alleged by P, or at any time thereafter.  

H.     MAIN ISSUE (3) - WAS THERE A COMMON INTENTION CONSTRUCTIVE TRUST AND/OR A RESULTING TRUST?

H.1     The legal principles

134.  Ms Chow referred the Court to what was set out by Recorder Eva Sit SC in Woo Tat Huen v Lee Wai Ping, the executor of the estate of Tsang Kam Ho, deceased [2021] HKCFI 576 as follows:

“43. The relevant principles have been conveniently summarized recently by Coleman J in Lam Ka Kui v Choi Yuen Ling [2020] HKCFI 2647; HCA 537/2017 (unrep., 23 October 2020), §§8-16:-

(1) Where a common intention constructive trust has arisen, ownership in the property is split into legal ownership and beneficial ownership. The trustee holds the legal title on trust for the beneficiary.

(2) Where a constructive trust is alleged to arise on the basis of the parties’ common intention, it is the intention commonly held by the property owner and the plaintiff regarding their shared beneficial interests in the property that matters. The trust is constituted by the three elements of (i) the common intention, (ii) the plaintiff’s detrimental reliance on their common intention, and (iii) the unconscionability of the property owner departing from it.

(3) The burden of proving each element of common intention, detrimental reliance and unconscionability is on the person seeking to show that the beneficial ownership is different from the legal ownership. The focus is on the intention of the parties at the time of acquisition of the asset. Contemporaneous conduct is inherently more likely to be a reliable indicator of intention, to be given greater weight, than are words and conduct after the event.

(4) Common intention can be expressed or implied. It can be deduced or inferred objectively from the parties’ conduct. As a matter of common sense, it is easier to infer such an intention prior to the acquisition of property which results in an obvious change in legal ownership (rather than after such an acquisition where there is no change in legal ownership and a change in beneficial ownership is not otherwise apparent).

(5) In Primecredit Ltd v Yeung Chun Pang Barry [2017] 4 HKLRD 327, §§2.3-2.4, Cheung JA identified two situations where a common intention constructive trust may arise.

(a) The first is where at any time prior to acquisition, or exceptionally at some later date, there is an agreement, arrangement or understanding reached between the parties on how the property is to be held beneficially. The finding of such an agreement or arrangement can only be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been.

(b) The second situation is where there is no evidence to support a finding of an agreement or arrangement on the beneficial ownership of the property, and the court must rely entirely on the conduct of the parties both as the basis from which to infer a common intention on the beneficial ownership of the property and as the conduct relied on to give rise to a constructive trust. In this situation, direct contributions to the purchase price by the party who is not the legal owner, whether initially or by mortgage instalment payments, will readily justify the inference necessary to the creation of a constructive trust.

(6) A resulting trust arises by virtue of the plaintiff’s contribution in money or in some other way towards the property's acquisition. Equity holds the legal owner to be a trustee of that property for the plaintiff in an appropriate share, giving effect to the parties presumed intention. Particularly in a domestic context, but also generally, if it is possible to resolve the matter by reference to common intention, there is no need to resort to resulting trust.

(7) As emphasized in Stack v Dowden §§68-69, an intention to have beneficial interest different from legal interest in property is unlikely, and the task of showing that should not be lightly embarked upon. It was recognized that, in family disputes, strong feelings are aroused when couples split up which can often lead the parties, honestly but mistakenly, to reinterpret the past in self exculpatory or even vengeful terms. If a difference is to be found between the beneficial and legal interest, clear evidence will be required. Unequal contributions to the purchase price of property will not likely be enough to move away from the starting point that equity follows the law.

44. As can be seen from the above, ultimately it is a question of intention – in the case of constructive trust, the common intention of the property owner and the plaintiff; and in the case of resulting trust, the intention of the person who provided the purchase price at the time the property was acquired. Between the two, and particularly in a domestic context, if it is possible to resolve the matter by reference to common intention, it would not be necessary to resort to resulting trust at all: Primecredit §1.3.

45. The modern approach to constructive trust is to assess the common intention of the parties by a holistic approach having regard to the context. In a domestic context (particularly in relation to a matrimonial home), the court is not constrained in that exercise by pure direct monetary contributions to the purchase price: Primecredit §1.6.

46. Moreover, in the assessment (whether on constructive trust or resulting trust), the court should have regard to inherent probabilities in light of the surrounding circumstances at the time the property was acquired: Primecredit §1.4.

47. Whilst the authorities cited above are mostly concerned with matrimonial homes or residences of cohabitating couples, whereas the Property in this case is an industrial premise and not a home, in my view the same approach applies.  The matrimonial home / residence is just an additional context which may be taken into account in an appropriate case (whether for the assessment of intention or inherent probabilities) which does not feature in this case.”

135.  There was no dispute as the above general legal principles.

H.2     Whether there was express common intention

136.  P relied on there being an express common intention embodied in the oral Trust Agreement.  As I have found there was no sufficient evidence of there being the alleged oral Trust Agreement or any oral trust agreement or express agreement entered into between P and Madam Chan in about January 1990 as alleged by P, there was no sufficient evidence of any express common intention.  

H.3     Whether commons intention can be inferred

137.  Whether a common intention can be implied or inferred, the parties’ “whole course of conduct” will need to be considered and the Court will adopt a “holistic approach”[66].  It was submitted by Ms Chow that this would include financial contribution to the initial purchase as well as subsequent mortgage repayments, referring to Lewin on Trusts 20^th Ed, at para 10-66 and also Snell’s Equity, 34^th Ed, at para 23-53.

138.  In fact, it was Ms Chow’s submission in her Closing Submissions that the common intention can be inferred on P’s direct financial contributions alone. 

139.  It was P’s pleaded case and evidence that he was responsible for the whole payment including all down-payments and mortgage payments in respect of the 7 Real Properties, and specifically for Property 1 and Property 2.  The recurring theme in P’s case was that based on Madam Chan’s limited income, she was unlikely to have had sufficient resources to make the initial payment or the subsequent mortgage payments for the 7 Real Properties.

H.4     Madam Chan’s financial circumstances

140.  According to P, Madam Chan’s monthly salary at TWSL was a modest one, roughly HKD 11,000 to HKD 16,000 per month.  In this respect, P had relied on (i) a letter dated 5 November 2012 to the Wing Lung Bank from TWSL cancelling an autopay monthly salary payment to Madam Chan of HKD 11,742 on 3 November 2012[67], and (ii) a copy of Madam Chan’s passbook of her savings account ending 559-5 with Wing Lung Bank (“WLB 559-5 Account”) showing entries for deposits marked “salary”[68].  Attached to P’s Closing Submissions was an appendix setting out all payments marked “salary” to Madam Chan or autopay payments transferred from TWSL into her WLB 559-5 Account between 6 April 2004 to 4 August 2012 (“Appendix 1”).  Her salary was stated to be HKD 11,153 per month in April 2004 and HKD 11,742 per month from 4 March 2008 until the time of her death, with additional payments in January/February each year, of HKD 15,450 being lowest in 2012 and HKD 26,810 being highest respectively for 2009, 2010, and 2011.

141.  It was submitted on behalf of P that the documentary evidence accord with the evidence of CKW whose evidence was that she did not know Madam Chan’s salary but that when Madam Chan was on sick leave in about 2010 or 2011, there was an occasion when CKW had to check the payment of bonuses and CKW had seen a list of TWSL’s payroll and recalled that Madam Chan’s salary was around HKD 15,000 to HKD 16,000 per month. 

142.  When asked whether Madam Chan was entitled to 14 months’ salary, P said he could not recall.  He said there was no year end double pay, nor was she entitled to commissions, but there would be annual bonuses depending on the business.

143.  As mentioned earlier, it was D’s evidence that Madam Chan had told him that she had sold the Yau Lee Flat and used the sale proceeds to purchase Property 1.  The land registry record of the Yau Lee Flat was not produced until during the trial[69].  D’s evidence was that he could not remember the exact address of the Yau Lee Flat earlier and was only able to find out the address during the trial.  I do not find this part of his evidence satisfactory.  He could have and should have made greater efforts to find out the address rather than suddenly producing the land search during the trial.  Anyway, the land registry record showed that Madam Chan bought this property on 1 April 1986 with a loan from the Hong Kong Building and Loan Agency Limited and the loan was paid off on 27 January 1988 and was re-mortgaged to Kincheng Bank for HKD 280,000.  This loan was paid off in November 1991.  P had said during the trial that Madam Chan had borrowed money from him to buy the Yau Lee Flat but no supporting evidence had been provided by P. 

144.  The Yau Lee Flat was sold by Madam Chan on 9 September 1992, for HKD 985,000.  As for the purchase of Property 1, the preliminary sale and purchase agreement indicated a sum of HKD 30,000 on 18 May 1992.  On 6 June 1992, a further sum of HKD 318,000 (inclusive of the initial deposit) was to be paid.  There was also HKD 16,000 agency fees payable on the signing of the formal sale and purchase agreement.  The purchase was completed on 6 July 1992.  Madam Chan could not have used the sale proceeds from the Yau Lee Flat for the purchase of Property 1, but this would not mean Madam Chan had no other financial resources or assets to pay.

145.  It was also D’s evidence that Madam Chan had in early 1990s co-operated with her friend to have a business known as Chan’s Marine Supplies Co (“Marine Supplies”) and in this respect, he had found a receipt booklet of this business with a receipt stubb dated 9 September 1994 for a cheque for a sum of HKD 130,000 apparently for payment of 3 invoices issued by Marine Supplies[70]. However, due to the time lapse, there was no other available evidence as to the amount of income/profits if any, generated from Marine Supplies.

146.  It was P’s evidence that he had set up Marine Supplies as part of the Trust Agreement between Madam Chan and him, and that it was a sole proprietorship registered in Madam Chan’s name which was terminated 5 years after it was set up.  According to P, Marine Supplies was used by P as a vehicle to carry out business which was unrelated to his family business conducted by Tai Wah or TWSL[71].  The business of Marine Supplies, according to P, included but not limited to the provision of services as an agent for the leasing of real properties or the sale of yachts.  P said the annual income generated from the business was insignificant and did not exceed HKD 500,000 per year.  Anyway, it was P’s case that this business was set up pursuant to the Trust Agreement and that he had authorized Madam Chan to hold and keep the said income or profits generated from the business solely for his use and benefit.

147.  No evidence was produced by P in relation to Marine Supplies, and there was no mention of Marine Supplies in the SOC or that the income or profits generated therefrom was part of the Trust Assets.  I have earlier found the alleged Trust Agreement did not exist.  I find there was no sufficient evidence that any income/profits generated from Marine Supplies formed part of the alleged Trust Assets.  On P’s own evidence, Marine Supplies was registered in Madam Chan’s name.  Thus, whatever insignificant income would be her financial resources.  Further, HKD 500,000 a year may be insignificant to P but it would have been sufficient for Madam Chan to pay, say for down payment for Property 1 or Property 2.

148.  D had also relied on various letters issued by TWSL to the mortgagee banks for loans/facilities on security of the 7 Real Properties, namely to Nanyang Commercial Bank, Wing Lung Bank, and Asia Commercial Bank/Public Bank between 2001 and 2012, which were signed by P as a director (“TWSL Letters”), Madam Chan’s salary was stated to be as follows[72]:

(i)     16.10.01  -     $65,000 per month

(ii)     02.04.03  -     $55,000 per month

(iii)     20.08.04  -     $55,000 per month

(iv)     10.01.05  -     $55,000 per month

(v)     08.03.05  -     $55,000 per month

(vi)     19.06.06  -     $55,000 per month

(vii)     11.04.07  -     $55,000 per month

(viii)     22.05.08  -     $55,000 per month

(ix)     18.05.09  -     $55,000 per month

(x)     22.04.10  -     $50,000 per month

(xi)     13.01.11  -     $50,000 per month

(xii)     16.05.11  -     $50,000 per month

(xiii)     03.05.12  -     $50,000 per month

149.  In letter (i), Madam Chan was stated to be employed as a secretary but in letter (ii) and those thereafter, she was stated to be employed as a personal assistant.    

150.  Further in a loan application form to the Wing Lung Bank signed by Madam Chan in 2000 in applying for a re-mortgage of Property 1 for a loan of HKD 2,000,000, she had stated that her position in TWSL was that of a senior assistant manager and her monthly income was HKD 75,000[73].  When P was cross-examined over this, P simply said it was wrong. However, as seen in P’s bank statements at ACB, there was a withdrawal of HKD 70,000 with handwritten word “Abo” which was Madam Chan’s English name and from August 2001 onwards, there was a monthly payment of HKD 75,000 marked “Abo”[74].  Interestingly, almost each of these payments to Madam Chan would be preceded or followed by the earlier mentioned monthly HKD 90,000 P was paying to Madam Ng, which was marked “Ada”.  When asked, P had said those to Madam Chan were monthly payments for paying the monthly mortgages. 

151.  Ms Chow argued that the purported monthly salary stated in those letters to the mortgagee banks was “entirely out of kilter” with the information gleaned from the relevant bank documents in Appendix 1 and that the salaries stated in the TWSL Letters exhibited a “strange arbitrariness” in that Madam Chan’s salary was repeatedly reduced, and there were no bank documents which showed actual payments to Madam Chan in those amounts.  However, there were bank statements which showed that there were monthly sums of say, HKD 75,000 credited into Madam Chan’s bank account not by TWSL but by P.  In any event, it was P himself who had signed those TWSL Letters which were addressed to various banks for Madam Chan to obtain the loans/facilities and if the information therein was not correct, then there had been misrepresentations made to the banks by TWSL and/or P.  

152.  Anyway, it also seems odd from Appendix 1 that there had not been any significant increase in Madam Chan’s salary over a period of some 8 years from April 2004 to August 2012.  There appeared to be an increase of only HKD 589 in March 2008 and none thereafter.  In my view, those amounts set out in Appendix 1 were only “official salaries” stated in the books of TWSL, and even assuming that Madam Chan’s “official salary” from TWSL was a low one, what was not disputed was that there had been substantial deposits into her bank accounts.  An annex was attached to D’s Reply Submissions (“Annex J”) which indicated at least HKD 8.77m deposits in two of her bank accounts from 1992 onwards excluding her official salaries from TWSL.  As seen later, there was no sufficient evidence that all the deposits/transfers in Madam Chan’s bank accounts had come from P.  Having considered her bank statements, I find Madam Chan had other financial resources in addition to her official salary from TWSL set out in Appendix 1.

H.5     P’s financial contribution

153.  I will first set out how the purchase price of each of the 7 Real Properties was paid.

H.5.1.     Property 1

154.  Property 1 was purchased in the name of Madam Chan on 6 July 1992 at a consideration of HKD 3,180,000.  As set out earlier, the initial outlay would be about HKD 334,000 (the initial and further deposit totalling HKD 318,000 and agency fee of HKD 16,000) plus legal costs, stamp duty and other disbursements. 

155.  The Preliminary Agreement for Sale and Purchase[75] indicated a preliminary deposit of HKD 30,000 was paid on 18 May 1992 by a HSBC cheque # 937352 (or # 957352) on 18 May 1992.  P had produced his HSBC 121-xxx688-001 current account statements from 16 February 1989[76]. There was no such cheque payment seen nor any cheques seen for the down payment, stamp duty and/or other disbursements for Property 1 from P’s said HSBC account.  There was no sufficient evidence that P had transferred any sums to Madam Chan at around the time of the purchase of Property 1 for the purpose of the initial payments. 

156.  As I have found earlier, Madam Chan had other financial resources other than her official salary from Tai Wah/TWSL.  I find no sufficient evidence that those initial payments were from P.

157.  There was a mortgage loan from the Standard Chartered Bank to P and Madam Chan jointly as borrowers and Madam Chan as the mortgagor[77]. As seen in the passbook of Madam Chan’s savings account ending with 265-3 with the Standard Chartered Bank (with opening transaction on 3 June 1992) (“SCB Account”)[78], the monthly mortgage repayments were initially HKD 18,966.98 from 9 October 1992 onwards but fluctuated and later increased to about HKD 35,000 on 26 October 1994, and thereafter had remained at about HKD 35,000 to HKD 36,000 until the last payment on 4 July 2000. 

158.  As seen in the SCB Account and Annex J, initially there was a regular monthly sum of HKD 20,000 deposited into the account by “CD” (presumably cash deposit) and later by “QD” (presumably cheque deposit) to meet the monthly mortgage repayments of about HKD 19,000 and later, when the mortgage repayments went up to about HKD 35,000 to HKD 36,000, a monthly sum of HKD 35,000 to HKD 37,000 was deposited (mostly by cheque deposits) to meet the mortgage repayments.  From about September 1998 onwards, the deposits into Madam Chan’s SCB Account were often by two or more amounts.  The mortgage repayments appeared to be met from those various deposits. 

159.  There was however no sufficient evidence as to the source of those deposits in Madam Chan’s SCB Account.  Annex 1 attached to P’s 2^nd Answers commenced with a deposit of HKD 300,000 on 7 October 1998 and none of the deposits set out therein was transferred to Madam Chan’s SCB Account.  Ms Chow attached another appendix to her Closing Submissions in relation to amounts allegedly transferred to Madam Chan (“Appendix 3”).  Appendix 3 started with a cheque payment on 18 March 1999.

160.  The fact that P co-signed with Madam Chan as borrowers for the mortgage showed that they would be jointly and severally liable for the loan.  There was no reason for Madam Chan to be jointly and severally liable if she had no beneficial interest in Property 1 and/or that she was only a trustee.  The fact that P had allowed himself to be named as a borrower would also support the finding that there was no need for him to have any trustee.  In any event, there was no sufficient evidence that the deposits in Madam Chan’s SCB Account to meet the mortgage repayments were transferred from P and/or Tai Wah/TWSL.  The SCB Account was closed on 31 July 2000 after there was a re-mortgage of Property 1 to the Wing Lung Bank as seen below.  The final monthly instalment on 4 July 2000 was HKD 35,811.26.  Again, there was no sufficient evidence that this amount was paid by P.

161.  At about end of June 2000, Property 1 was re-mortgaged to the Wing Lung Bank for HKD 2m and this time, Madam Chan was the sole borrower[79]. The monthly repayments were reduced to about HKD 16,419 from July 2000 and thereafter fluctuated and eventually were reduced to about HKD 13,017.90 per month in May 2001 and from about end of January 2002 onwards, they were around HKD 11,147 per month.

162.  The WLB 559-5 Account appeared to be only opened on 7 October 2000, and initially there was a monthly deposit of HKD 12,360 for two months which then appeared to be reduced to HKD 11,340 on 2 February 2001[80].  Thereafter, on 2 March 2001 onwards, the “salaries” in Appendix 1 of HKD 11,741 per month started to be deposited into Madam Chan’s WLB 559-5 Account.  D had produced copies of Madam Chan’s passbook and/or bank statements for this account from 7 October 2000 onwards until 5 July 2014[81].  The amount of HKD 11,742 per month commenced on 2 March 2001 and continued until 3 June 2003 when the amount became HKD 11,153 per month and then went back to HKD 11,742 per month on 4 March 2008 until 4 August 2012.  These amounts were paid on about 1^st day to the 4^th day of the calendar month.

163.  In the statements of the WLB 559-5 Account, the monthly withdrawals for the mortgage repayments had “12B” handwritten next to those amounts and it was not disputed those amounts so marked were indeed the mortgage repayments for Property 1.  The final monthly mortgage withdrawal of HKD 10,798.90 was made on February 2005.  The monthly withdrawal for the mortgage repayments followed almost immediately the credit of the “salary” HKD 11,742 per month.  When the “salary” fell short of the repayments before the repayments were reduced to about HKD 11,147 per month, there were various cheque and cash payments deposited in the WLB 559-5 Account to meet the shortfall but source of these cheques and cash credits was unknown.

164.  Thus, it would appear from the bank statements of the WLB 559-5 Account that the monthly mortgage repayment for Property 1 were entirely paid by Madam Chan by her “salary” paid by TWSL from at least January 2002 onward until February 2005.   

165.  Madam Chan paid off the balance of the mortgage loan from Wing Lung Bank for Property 1 of about HKD 1,042,592.58 on 3 February 2005[82]. Just prior thereto, there were two sums credited into the WLB 559-5 Account, namely a sum of HKD 1,000,000 on 1 February 2005 and a sum of HKD 45,000 on 2 February 2005[83]. There was no sufficient evidence that these sums were from P as they did not appear in Annex 1 or Appendix 3.  In any event, as seen in both Annex 1 and Appendix 3, none of the cheque deposits stated therein were stated to be deposited into Madam Chan’s WLB 559-5 Account.

166.  I find there was no sufficient evidence that those monthly mortgage repayments in relation to Property 1 could be linked to P or any payments from P.

H.5.2.     Property 2, Property 3, and Property 4

167.  Property 2 was purchased in the name of Madam Chan on 30 June 1993 at a consideration of HKD 2,680,000.  As the mortgage instalment loan from Citibank was for HKD 2,010,000 only, this would mean Madam Chan had paid at least HKD 670,000 for deposits/downpayment (a sum of HKD 100,000 was paid as preliminary deposit, HKD 168,000 as further deposit on the signing of the formal agreement for sale and purchase on 2 June 1993[84], and another HKD 402,000 on completion) plus agency fee of HKD 26,000 and legal costs, stamp duty and other disbursements.  The mortgage loan from the Citibank of HKD 2,010,000 repayable by 84 monthly instalments of HKD 31,580 at fluctuating interest rate[85].  Later the two carparks, namely Property 3 and Property 4 were purchased on 27 March 1995 for a total of HKD 1,430,000 and they were also mortgaged to Citibank.  The mortgage loans for Property 2, Property 3 and/or Property 4 from Citibank were discharged in 1997. 

168.  By the time of the purchase of Property 2, Madam Chan would have received the net sale proceeds of the Yau Lee Flat.  Further by the time of the purchase of the two carparks, Madam Chan would have had income from Marine Supplies, and in any event, I have found she had other financial resources apart from her salaries from Tai Wah/TWSL.  The payments from P to Madam Chan set out in Annex 1 and/or Appendix 3 were only from 7 October 1998 or later.  I find there was no sufficient evidence that any of the initial payments for Property 2 and the carparks, namely Property 3 and Property 4, had come from P.

169.  D was only able to provide Madam Chan’s loan statements from Citibank for Property 2 dated 30 December 1993 to 30 December 1996, and that as at end of March 1997, there was an amount of HKD 1,537,411.55 outstanding[86]. Eventually, the outstanding loan amount of HKD 1,475,853.67 from Citibank was paid off by a cheque from Madam Chan[87] and the legal charge of Citibank was discharged on 10 April 1997[88].  Receipts for all the discharge legal costs and disbursements were issued in favour of Madam Chan.  As Property 2 was re-mortgaged to ACB on 10 April 1997, the outstanding loan amount from Citibank was probably paid off from the instalment loan from ACB upon the re-mortgage. 

170.  After, the re-mortgage, the monthly repayments for the ACB instalment loan fluctuated depending on the interest rate, with initially the monthly repayment of about HKD 21,898 per month[89]. 

H.5.3.     Property 5

171.  In the meantime, Property 5 was purchased in Madam Chan’s name on 23 March 1996 at a consideration of HKD 3,168,000. As the instalment loan which Madam Chan obtained from ACB was for HKD 2,200,000, Madam Chan would have initially paid a total of HKD 968,000 (namely HKD 100,000 as preliminary deposit and HKD 216,800 on signing of the formal agreement of sale and purchase and another HKD 651,200 on completion) plus agency fee, stamp duty, legal costs and disbursements.  The further deposit of HKD 216,800 was paid by a cheque #456122 dated 12 February 1996 from Madam Chan’s account with Dah Sing Bank[90].

172.  Again, as I have found earlier that Madam Chan had other financial resources, there was no sufficient evidence that she could not have paid the initial payments out of her own financial resources.  I find there was no sufficient evidence that those initial payments had come from P.

173.  On 26 February 1996, Madam Chan obtained an instalment loan of HKD 2,200,000 from ACB secured by Property 5, repayable by 240 monthly instalments of HKD 20,864.44 at fluctuating interest rate[91].  The legal fees and stamp duty and disbursement were paid by Madam Chan by cheque from ACB[92].  The monthly repayments were initially about HKD 20,867.37 and then went up to HKD 26,898,031 between November 1997 and January 1998 and thereafter further fluctuated.

174.  Thus it would appear that by 1997, both Property 2 and Property 5 were mortgaged to ACB, initially for respective instalment loans, Property 2 for about HKD 1,500,000 and Property 5 about HKD 2,200,000[93].

175.  Madam Chan had maintained various accounts with the ACB/PB under the number 0713-xxx680, including 2 statement savings accounts, time deposits and loan accounts and in particular a current account (“680 Current Account”). 

176.  As seen in a facility offer letter from ACB dated 24 May 2001, Property 2 and Property 5 were re-mortgaged to ACB for which Madam Chan obtained banking facilities for (i) a time loan, or an instalment loan repayable by monthly instalments over a fixed period of time of HKD 1,944,249.89 and (ii) an overdraft of HKD 2,000,000 (“OD Facility”)[94].  As pointed out by Ms Chow, the instalment loan of HKD 1,944,249.89 was equivalent to the then outstanding principal of Property 5 as seen in the repayment loan schedule[95]. P’s own evidence in relation to the OD Facility was that it was for his use but to minimise interest liability, he would instruct Madam Chan to transfer the borrowed funds to him only as and when the need arose.  I will come back to this part of his evidence later in this judgment.

177.  Suffice to say, on 26 June 2007, the instalment loan for Property 5 was discharged by a final payment of HKD 1,297,718.74 on early redemption[96]. There was no such payment from P to Madam Chan stated in Appendix 3 around that date.  There was no sufficient evidence that the final payment was from P.

H.5.4.     Property 6

178.  Property 6, another property at Discovery Park, was also purchased in Madam Chan’s name on 25 March 1998 at a consideration of HKD 5,400,290.  However,  the formal agreement for sale and purchase was entered into on 1 April 1997[97], and between 1 April 1997 and 17 July 1997, there were 4 instalment payments for the downpayment totalling HKD 1,620,087, with the balance of HKD 3,780,203 payable on completion.

179.  The earliest payment from P in Annex 1 was 9 October 1998, and 18 March 1999 in Appendix 3.  There was no sufficient evidence that those 4 instalments for the down payment were from P.  

180.  In fact, it would appear that by January 1998 Madam Chan already had an overdraft facility at ACB, and that the bank statement of her 680 Current Account indicated an overdraft of HKD 1,567,801.47 on 10 January 1998[98].  Although it was P’s evidence that the OD Facility was for his use/ use of TWSL, there was no sufficient evidence that it was only P who was using the facility through Madam Chan.  In any event, as said earlier, it is my finding that Madam Chan had her other financial resources apart from her official salaries.  

181.  The mortgage repayments for Property 6 were paid from Madam Chan’s savings account with Nanyang Commercial Bank ending 5027 (“NCB Account”)[99]. The initial monthly repayment was HKD 27,579.76 increasing to about HKD 28,118.85 in October 1999.  From July 2001 onwards, there had been monthly payments by cheque of HKD 75,000 into Madam Chan’s NCB Account which seemed to have been reduced to HKD 70,000 from 6 May 2003 onwards until 23 December 2003[100].  These monthly payments have been set out in Appendix 3 and I accept they were from P. 

182.  Property 6 was re-mortgaged to Wing Lung Bank on 3 February 2005[101].  Property 6 had been rented out by Madam Chan since about April 1998 for about HKD 9,000 to HKD 13000 a month, which P alleged was upon his instructions.  There was however no supporting documents produced by him.  The documents produced by D showed was that Property 6 was renovated on 18 December 2006 and the receipt for the renovation expenses was issued to Madam Chan[102].  Madam Chan then rented out the property from January 2007 onwards at HKD 9,000 per month[103]. 

183.  By 17 September 2008, the mortgage instalment loan from Wing Lung Bank was repaid[104] and the mortgage discharged on 25 September 2008[105].  There was no sufficient evidence that the payment was from P.

184.  Property 6 was sold on 12 April 2012 at a loss for HKD 3,980,000.

H.5.5.     Property 7

185.  On 14 May 2010, there was a facility offer letter from ACB/PB, and this time the OD Facility for Madam Chan’s PB 680 Current Account was increased to HKD 4,000,000 and there was an instalment loan for HKD 1,064,000[106], and the facilities were to be secured by three properties, namely Property 2, Property 5 and a unit at 5B, Willie Court, the same building as Property 7.  In particular, as seen in the “conditions precedent” set out in the facility offer letter, the instalment loan was for the purchase of 5B, Willie Court.

186.  For reasons I do not need to go into, Madam Chan did not go ahead with her purchase of 5B, Willie Court but instead she later purchased Property 7.

187.  Property 7 was purchased on 28 October 2010 at a consideration of HKD 1,780,000 with a mortgage loan of HKD 1,246,000 from the PB with an initial monthly repayment of HKD 5,708.28[107].  As set out in the formal agreement for sale and purchase dated 28 September 2010, HKD 178,000 was paid as down payment and the balance of HKD 1,602,000 was to be paid on completion.  As the mortgage loan was only HKD 1,246,000, Madam Chan must have paid a total of HKD 534,000 plus agency fee, stamp duty, legal costs and disbursements.

188.  Although there were various payments stated to be from P to Madam Chan in Appendix 3 in 2010, there were none in October 2010 and, as said later, most of those payments from P during this period were paid into the 680 Current Account to reduce the OD Facility.  There was no sufficient evidence that P had paid for the initial payments of HKD 534,000 and other expenses.

189.  Property 7 was sold on 18 October 2012 for HKD 2,380,000.

H.5.6.     Alleged payments from P

190.  I have found earlier that, there was no sufficient evidence that the initial down payments and other expenses for the purchases of the 7 Real Properties were paid by P or originated from P.

191.  As for the monthly mortgage repayments, Ms Chow had attached an appendix to P’s Closing Submissions (“Appendix 2”) to set out the monthly mortgage repayments (with the amounts in blue stated to be estimated amounts only) from August 1992 to November 2012 for the 7 Real Properties.  The total of the mortgage repayments between 1992 and March 1999 was stated to be HKD 6,034,328.62 and between April 1999 and November 2012 was HKD 10,984,570.33.  Ms Chow submitted that even if the monthly salaries stated in the TWSL Letters to the banks were correct, such salaries would still be insufficient or barely sufficient to support the monthly mortgage repayments of a total of HKD 17,018,898.95 as set out in Appendix 2.  

192.  I find difficulties to accept Ms Chow’s calculations and submissions for a number of reasons: First, it appears from Appendix 2 that the amounts of monthly mortgage repayments were for the fixed term instalment/time loans but the amounts in Appendix 2 were not reliable as set out further below.  Second, the salaries set out in the 13 TWSL Letters were respectively at the date of the letters ranging between HKD 65,000 and HKD 50,000 per month, and there was no information as to whether there were changes between the date of each of the TWSL Letters.  Third, there was no total amount of Madam Chan’s salaries in the TWSL Letters set out by in Ms Chow’s calculations and it was not clear what total amount Ms Chow’s submission was based on. Fourth, the dates of the TWSL Letters were between 16 October 2001 and 3 May 2012 and Madam Chan’s “official salaries” set out in Appendix 1 were from 6 April 2004 until 4 August 2012.  Thus there were overlaps, and if the monthly salaries in the TWSL Letters were correct, then it would appear that were “unofficial salaries” paid to Madam Chan by Tai Wah/TWSL in addition to the “official salaries”.  Ms Chow’s calculations did not include the “official salaries”.  Fifth, there was no information as to what these “unofficial salaries” and annual bonuses paid to Madam Chan were between the purchase of Property 1 in 1992 and April 1999, nor was there proper evidence from Tai Wah and/or TWSL as to what her “official salaries” were during that period.  Fifth, there was rental income from Property 6 which those calculations submitted by Ms Chow did not include.

193.  Anyway, roughly, it would appear that the average of the salaries stated in the 13 TWSL Letters was about HKD 54,230 per month[108] Over the period between April 1999 and May 2012, ie about 13 years, the total amount would be about HKD 8,460,000, but as said, this did not take into account any bonuses, the “official salaries”, nor the rental income.

194.  There were many estimated amounts (in blue) in Appendix 2.  I accept that it would be difficult to ascertain the actual monthly repayments for the instalment loans, as the amounts had fluctuated with changes in interest rates.  As mentioned earlier, Property 1 was re-mortgaged in June 2000 to the Wing Lung Bank and that after the re-mortgage, the monthly repayments were reduced and had been paid, either partly or wholly by Madam Chan’s “official salary”.

195.  In any event, the instalment loan on Property 1 was paid off by 3 February 2005.  There were no outstanding mortgage loans on Property 3 and Property 4 after March 1997 according to Appendix 2.  The instalment loan secured by Property 5 was paid off on 26 June 2007 and that secured by Property 6 was paid off on 17 September 2008.  Although Appendix 2 seemed to indicate there was still an instalment loan secured by Property 2 after that of Property 5 was discharged, I find the evidence appeared to indicate there was no instalment loan secured by Property 2 but only the OD Facility remaining, and thus those amounts set out (in blue) in relation to Property 2 may not have been correct.

196.  I have found earlier that there was no sufficient evidence that the deposits/down payment for Property 7 of HKD 534,000 (which was included in Appendix 2 in blue) had come from P.  I have earlier found that Madam Chan had other financial resources in addition to her “official salaries”, and not all deposits in her bank accounts were from P.  All in all, having considered all the evidence, I find there was no sufficient evidence that Madam Chan could not have afforded to pay for those mortgage repayments of the 7 Real Properties out of her salaries and/or her own financial resources.

197.  In Appendix 3, Ms Chow had set out all the payments which P alleged he had made to Madam Chan covering the period of about 163 months from 18 March 1999 until 1 November 2012.  The total amount of cheque payments in Annex 1 was set out therein to be HKD 27,793,848.75[109] and the transfers from P to Madam Chan set out to be another HKD 6,400,000.  According to Appendix 3, there were entries which could not be found in evidence, and that the final amount after taking into account the amounts in Annex 1 and additional transfers shown in bank books/cheque images was stated to be HKD 34,192,848.75.   

198.  Ms Chow had also annexed an appendix to her Closing Submissions which purports to set out the various amount transferred from Madam Chan’s bank accounts to P which totalled HKD 20,030,481.17 between 1996 and November 2012, of which HKD 360,000 was said to be prior to March 1999 (“Appendix 4”). 

199.  Thus, for the period between March 1999 and November 2012, the total in Appendix 3 (what P had made Madam Chan) was HKD 34,192,248.75 and the total in Appendix 4 (what Madam Chan had paid P) was HKD 19,670,481.17.  

200.  However, Appendix 3 was based on Annex 1, which was produced by P in 2^nd Answers in support of his allegation that pursuant to the Trust Agreement his solely owned and/or personal assets were transferred or to be transferred to Madam Chan and Annex 1 was to support P’s payments not only for the 7 Real Properties, but for the Jewellery, the Investments and also the Cash in Bank in Annex 4. 

201.  The burden was on P to satisfy this court that a common intention was to be inferred from his payments to Madam Chan that there was a trust arrangement or agreement.

202.  As set out earlier, 6 of the 7 Real Properties were purchased prior to March 1999, and predated the payments set out in either Annex 1 or Appendix 3.  In any event, those payments/transfers in Appendix 3 were not pleaded by P to be with reference to the purchase of any specific property, and I have found earlier there was no sufficient evidence that P had paid for the initial deposits/down payments and purchase costs for the 7 Real Properties.

203.  Appendix 3 indicated that there were some 14 payments which were of HKD 100,000 or more and about 10 of them were marked “IWC” between March 1999 and August 2006, but not all such payments could be traced to Madam Chan’s bank accounts from the available statements.  These alleged payments were based on P’s own evidence that they were marked “Abo” in his bank statements.  Mr Ah-Weng had pointed out that on P’s pleadings, P did not admit “Abo” was Madam Chan.  In any event, between July 2007 and April 2010, there were about 6 amounts of HKD 100,000 or more stated to be paid by P to Madam Chan most of which again could not be traced to Madam Chan’s bank accounts due to lack of available statements but P had produced copies of cheques in support of his payment.    

204.  I do not find payments simply marked “Abo” on P’s bank statements would be sufficient evidence that Madam Chan did receive those amounts, but I would accept copies of cheques from the banks as evidence to support P’s payments.  However, even if those payments which could not be traced to Madam Chan’s bank accounts were in fact received by her, as I have said earlier, those payments were not pleaded to be for any specific mortgage repayments for the landed properties. 

205.  Apart from those larger amounts pf HKD 100,000 or more mentioned above, Appendix 3 indicates that from about June 2000 up till October 2006, there had been regular cheques/transfers from P to Madam Chan of amounts less than HKD 100,000.  As mentioned earlier, there were regular monthly payments of HKD 75,000 per month from July 2001 until April 2003, with some odd extra payments in between, and HKD 70,000 per month from April/May 2003 until December 2003 credited into Madam Chan’s NCB Account.  Those HKD 75,000 monthly payments were from P’s ACB current account initially later the HKD 70,000 monthly payments were from P’s Nanyang Bank account.  However, it seems that from August 2003 to February 2004, Appendix 3 also sets out a monthly sum of HKD 45,000 said to be paid by P to Madam Chan, but no details as to which of Madam Chan’s bank accounts they were credited.  These seemed to overlap with the HKD 75,000 or HKD 70,000 monthly payments.  Anyway, from February 2004 onwards until August 2005, there were also various payments of HKD 20,000 or HKD 30,000 or HKD 50,000, each month from P’s account to Madam Chan until October 2006.  In Annex H of D’s Reply Submissions, Mr Ah-Weng had set out his remarks on P’s transfers in Appendix 3 as compared with the mortgage repayments in Appendix 2.

206.  Suffice to see, the regular payments above cannot be linked to the monthly mortgage repayments in Appendix 2 even if the amounts in Appendix 2 were correct.

207.  Apart from those payments of HKD 100,000 or more, and the regular/monthly payments, I find those payments listed in Appendix 3 on or after 10 July 2007 and credited into Madam Chan’s 680 Current Account at ACB/PB were of a different nature.  On 10 July 2007, P paid HKD 700,000 into Madam Chan’s 680 Current Account.  Prior to P’s payment, the 680 Current Account was HKD 1,621,442.78 overdrawn[110]. As seen in her January 2008 statement, by then, Madam Chan’s OD Facility was HKD 4,000,000[111].  On 25 March 2008, P credited a cheque of HKD 1,000,000 into the 680 Current Account, but prior thereto, there had been an amount of HKD 1,000,000 withdrawn from the 680 Account on 11 March 2008 which resulted in the account being HKD 995,320 overdrawn.  Then on 10 June 2008, as seen in Appendix 4, a sum of HKD 4,000,000 was withdrawn from the 680 Current Account and credited to P’s PB account.  On 9 July 2008, P paid a sum of HKD 5,000,000 into Madam Chan’s 680 Current Account.  In fact, out of a total amount of HKD 19,670,481.17 stated in Appendix 4, the total amount transferred by Madam Chan to P from 10 June 2008 until 3 May 2012 was some HKD 18,500,000, and on a rough calculation, the total amounts in Appendix 3 transferred by P into the Madam Chan’s 680 Current Account between 9 July 2008 and 17 April 2012 was about HKD 19,785,000.  

208.  I find those payments from Madam Chan to P and vice versa would show that more probable than not, Madam Chan was advancing various sums from the OD Facility to P, and that those payments from P into the 680 Current Account were repayments of the overdrawn amounts plus interests.  I accept that those transactions in and out of the OD Facility of Madam Chan’s 680 Current Account would indicate that Madam Chan had drawn on the OD Facility of her 680 Current Account to advance funds to P for his use and/or use of TWSL. However, as not all funds withdrawn from the 680 Current Account could be traced to P, nor all the deposits were said to be from P, I find no sufficient evidence that the OD Facility was for P’s sole use.  In any event, I find there was no sufficient evidence those payments from P into the 680 Current Account were intended for any mortgage instalment loan repayments or purchase of Property 7.

209.  As seen in P’s bank statements at ACB for the period from 20 July 2001 to 20 August 2001[112], the monthly payment of HKD 75,000 Madam Chan was made on 3 August 2001, and on 7 August 2001, there was a payment of HKD 90,000 marked “Ada”, namely his ex-wife Madam Ng.  As mentioned earlier, this pattern of a monthly payment to Madam Chan followed by or preceded by a monthly payment to Madam Ng seemed to occur frequently during the period from 3 August 2001 to about 13 June 2003 even though the monthly payment to Madam Chan was reduced to HKD 70,000 per month[113].

210.  I have found earlier that Madam Chan and P had a romantic and/or intimate relationship as from the 1990s and that Madam Chan was P’s mistress.  It was D’s alternative case that in light of their romantic relationship, any payments made by P to Madam Chan were gifts.  In light of their relationship, and having considered the evidence, I find more probable than not, that those regular or monthly payments, varying between HKD 75,000 to HKD 70,000 and/or HKD 45,000 or around those amounts, were made by P to Madam Chan for her general spending and the larger amounts, in particular those prior to July 2007 were gifts to her and in any event there was no sufficient evidence that P had ever intended any repayment or accounting from Madam Chan at the time of his payments, except towards the end of her life, he had tried to get the properties back. 

211.  As said earlier, there was no sufficient evidence that the OD Facility was for P’s sole use, whether for him personally or for TWSL, and there were amounts paid into the 680 Current Account or withdrawn therefrom of which the source or destination was unknown.  In any event, I find that in light of the long romantic and intimate relationship between P and Madam Chan, it would not have been surprising or improbable that if P had needed a short term loan, Madam Chan would have advanced to him sum from the OD Facility.

212.  Having considered the evidence and all above, I find there was no sufficient evidence that those payments in Appendix 3, even if they were correct, would mean that they were paid to Madam Chan pursuant to any common intention that Madam Chan was to hold the alleged Trust Assets for P.   I do not find that a common intention can be inferred simply from P’s payments to Madam Chan as set out in Appendix 3 or Annex 1. 

H.6     The SPoA, GPoA and the Confirmation Letter

213.  Mr Lai’s evidence in his witness statement was that in or about end of August 2012, he received a telephone call from P saying that Madam Chan wanted to make a will.  This was followed by Madam Chan herself calling Mr Lai saying she wanted to make a will.  Mr Lai said as her voice sounded very weak, he asked for her location and she gave him her room number at the Hong Kong Sanatorium Hospital.  Mr Lai then went to see her that evening.  According to Mr Lai, during his visit Madam Chan told him that she wanted to make a will and give back “the things” to P, which were properties which she was holding for P.  Mr Lai said this was the first time that he heard that Madam Chan was holding properties for P, but as Madam Chan was too weak, and had difficulty in carrying on with the conversation, Mr Lai decided to leave the room to let her rest. 

214.  According to Mr Lai, P was waiting and standing outside the room when Mr Lai left and Mr Lai asked P what things Madam Chan was holding for him which she wanted to give back to him and P had told him that they were properties, some gold, diamonds and shares but P did not go into detail.  In light of Madam Chan’s condition, Mr Lai told P that she would need a doctor to certify that she was mentally capable of making a will, and P then told him to wait until Madam Chan was better.  

215.  During the trial, Mr Lai admitted that Madam Chan only mentioned to him “the things” being landed properties and that it was P who had told him that “the things” were not only landed properties but also some gold, diamonds and shares.  Mr Lai also admitted after what P told him, he did not re-enter the room to confirm with Madam Chan as to what P had said about “the things”. Mr Lai’s reason was Madam Chan was already tired when he left the room.

216.  However, Mr Lai’s evidence clearly showed that all Madam Chan had told him was about landed properties and there was no mention of any gold, diamonds or shares.  Further, when asked whether Madam Chan said she was holding landed properties on trust and/or on behalf of P (代持物業), Mr Lai answered that all she said was she was holding landed properties (揸住的物業). It was not quite clear what Mr Lai meant.

217.  It was also Mr Lai’s evidence that in September 2012, he received a call from Madam Chan informing him that she had signed a provisional sale and purchase agreement to sell Property 7 and that as she was not feeling well and might have to go in and out of hospital, she asked Mr Lai to prepare a power of attorney in favour of P to sign all relevant documents for the sale.  It was under such circumstances that Mr Lai prepared the SPoA which was signed by Madam Chan in his office on 13 September 2012.

218.  Although the signing of the SPoA took place about a month after Madam Chan’s telephone call regarding preparing a will, it was Mr Lai’s evidence that he did not raise the matter of the will again with Madam Chan when she went to sign the SPoA, nor did he ask her about whether she was holding gold, diamond and shares, or any details of the landed properties or “the things” she was holding for P and wanting to give back to P.  When asked why, Mr Lai said it was none of his business.  However, Mr Lai’s evidence was that he then called P after Madam Chan had signed the SPoA and that he had asked P what he planned to do with the landed properties held by Madam Chan for him and that he had advised P that the best would be for Madam Chan to transfer all properties back to his name but this would incur stamp duty, or alternatively Madam Chan could sell the properties and give the monies back to P. It was Mr Lai’s evidence that he had asked P what properties and that P had mentioned Property 2, the car parks and a few other properties which P did not go into details.  When cross examined as to why Mr Lai had asked P instead of Madam Chan for the details of the landed properties, Mr Lai’s response was why did he need to ask Madam Chan as he had no instructions from Madam Chan.

219.  However, as admitted by Mr Lai, neither did P give him any instructions regarding the landed properties.  It was thus rather odd as why Mr Lai would ask P about the details of the landed properties and he chose not to ask Madam Chan, and further why he would offer his advice to P, ie to sell the properties and to give the monies back to P, and not to Madam Chan.  There seemed to be a conflict of interest on Mr Lai’s part.

220.  Anyway, according to Mr Lai’s written evidence, on or about 25 September 2012, he received another telephone call from Madam Chan that she wanted to redeem the mortgages in respect of Property 5 and Property 2 and that he told her that he would prepare authorization letter(s) to the bank for her to sign (“Authorisation Letter”).  Further, according to Mr Lai, Madam Chan also asked him to prepare some documents for her to sign to enable P to deal with the landed properties and bank accounts in her name as she anticipated that she would be in and out of the hospital.  According to Mr Lai, Madam Chan told him that she intended to sell all the landed properties and to return all the money (sale proceeds) to P.  Mr Lai said he then advised Madam Chan to prepare a general power of attorney.  Also, according to Mr Lai, Madam Chan told him to inform P once the Authorisation Letter and the general power of attorney were ready for her execution.

221.  When the Authorisation Letter and the general power of attorney were ready for execution, Mr Lai telephoned P and P told him to send them over to P, which Mr Lai did.  Mr Lai said that on or about 28 September 2012, he then received the Authorization Letter and the general power of attorney both dated 28 September 2012 and signed already by Madam Chan.  According to Mr Lai, he telephoned P to say that he needed to explain to Madam Chan the legal effect of the general power of attorney and she needed to confirm her intention, and she had to sign before him personally. 

222.  Madam Chan later attended Mr Lai’s office on 4 October 2012.  According to Mr Lai, Madam Chan appeared to be quite well and they chatted for a while, and that according to Mr Lai, he had explained to her that a general power of attorney made by her in favour of P would virtually enable P to do all things for and on her behalf as if they were done by her personally, which Madam Chan confirmed she understood, and she had repeated to him that she planned to sell all the landed properties she held for P and to give all the money back to him.  Madam Chan also said she wanted to sign the general power of attorney just in case she was in hospital or was physically unfit to deal with all matters personally and that P would then be able to take over and deal with all the matters for her (including her bank accounts and her other personal matters).  Madam Chan executed the GPoA in Mr Lai’s presence on that day.

223.  It was Mr Lai’s written evidence that on or about 9 October 2012, P and Madam Chan attended his office and that Madam Chan was in a wheelchair and P pushed the wheelchair into his office.  Madam Chan looked tired and weak and said to him that she wanted to sign something in order to transfer back to P all the landed properties and assets held by her for him. She told Mr Lai that she held Property 2, Property 3, Property 5 and Property 7 in her name for P, but since the sale of Property 7 would take place shortly, and P had the SPoA, he could receive and deal with the sale proceeds directly.

224.  According to Mr Lai, he then advised Madam Chan that it was not desirable to transfer the landed properties to P due to the substantial costs and stamp duty and he advised Madam Chan to make a will to bequeath the said properties and assets to P instead, but Madam Chan rejected this idea, and then stated that she wanted to sign something to show that the landed properties and assets she held in fact belonged to P.  Mr Lai told P that it would be difficult as a declaration of trust would equally attract stamp duty.  According to Mr Lai, P told him he should just go along with Madam Chan’s wish, and Mr Lai then suggested to P a document to be signed by Madam Chan confirming she was holding the properties and assets for P although its legal effect may be questioned.  According to Mr Lai, P agreed and he then proceeded to prepare the Confirmation Letter which was signed by Madam Chan. 

225.  Pausing here, I must say I do not understand why Mr Lai would suggest Madam Chan to sign a document the legal effect of which may be questioned. Further, it seems that it was to placate P that Mr Lai suggested Madam Chan to sign the Confirmation Letter.

226.  Anyway, the Confirmation Letter was then typed which stated that Property 2, and Property 3 (Carpark 19) and Property 5 held under Madam Chan’s name were in fact purchased with all purchase monies being provided by P and that she was holding those properties as trustee for P and that Madam Chan was to transfer those properties to P or his nominee upon his request and at his costs and expenses.

227.  According to Mr Lai, on about 25 September 2012, Madam Chan had already given him instructions to redeem the mortgage of Property 2 and Property 5.  If according to the Confirmation Letter, those properties did not belong to Madam Chan and the purchase price was not provided by her, there was no reason why Madam Chan would suddenly want to redeem the properties and to pay off any loans or overdraft from the bank shortly before she signed the Confirmation Letter.  It did not seem to make sense but it appeared that Mr Lai did not seek any clarification from Madam Chan.

228.  Under cross examination, Mr Lai had said both P and Madam Chan were his clients and one was his friend and the other a relative.  In my view, there was thus even more reason for Mr Lai to be cautious and he should have been aware that there could be a conflict of interest between P and Madam Chan.    

229.  As pointed out by Mr Ah-Weng, a power of attorney, whether specific or general, would only give the donee power to deal with the donor’s properties/assets, and would not mean that that the donee had any beneficial interests or if there was a sale, the donee was entitled to the sale proceeds. If the instructions from Madam Chan were that she wanted to return the landed properties or the net sale proceeds to P, a power of attorney would not have served this purpose.  There was no evidence that Mr Lai had even asked Madam Chan or clarified with Madam Chan her instructions.

230.  As for the signing of the Confirmation Letter, Mr Lai’s evidence was that Madam Chan wanted to sign something to give the properties to P and he had advised she made a will but she rejected this. There was no explanation as to why Madam Chan wanted to make a will less than 2 months ago refused to adopt this course when advised by Mr Lai.  Mr Lai did not elaborate on this.  I do not find Mr Lai’s evidence made sense.

231.  As said earlier, the SPoA regarding the sale of Property 7 would not mean that P would be entitled to the net sale proceeds.  Mr Lai, being a solicitor, should be aware of this but there was no sufficient evidence that Mr Lai had advised Madam Chan accordingly.  Nor was Property 7 (or any net sale proceeds thereof) mentioned in the Confirmation Letter.

232.  Although Mr Lai said Madam Chan was looking tired and weak, it seems that Mr Lai was not concerned over whether she was in a condition to sign any document.  It was also rather odd that Mr Lai told P that it would be better for P to be present at the time of Madam Chan signing the Confirmation Letter.  Although Mr Lai said when he explained to Madam Chan the contents of the Confirmation Letter, P had stepped out of the room, it was his evidence that he had asked P to return and for Madam Chan to sign in the presence of both him and P.  As the signing took place in Mr Lai’s office, there should be other independent persons who could have been witnesses.

233.  Although Mr Lai said he had explained the contents of the Confirmation Letter to Madam Chan, there was no interpretation clause of the Confirmation Letter which was in English. Yet, there were interpretation clauses in both the SPoA and GPoA. 

234.  As mentioned earlier, the authenticity of Madam Chan’s signature on the Confirmation Letter was disputed.  The parties’ single joint expert Mr Leung was of the opinion that the questioned signature on the Confirmation Letter was not written by Madam Chan.  P’s own handwriting expert Mr Radley was of the opinion that it was inconclusive as to whether Madam Chan had signed the Confirmation Letter.

235.  Mr Radley had said he agreed with Mr Leung that there were generally differences between the questioned signature and the known writings of Madam Chan but as pointed out by Mr Radley, the two experts were in considerable disagreement as to the interpretation of those differences.  Mr Leung attributed them to different authorship whilst Mr Radley considered the evidence was wholly inadequate to offer a meaningful opinion reliably identifying their cause[114]. Mr Radley had also pointed out that whilst there was an abundance of early dated signatures of Madam Chan, signatures which were “strictly contemporaneous” with the Confirmation Letter were not available, although there were four signatures signed in 2012 that had been considered, those four signatures varied considerably one from another and that the variation being the result of deteriorating health and/or the effect of drugs and medication that Madam Chan was taking.  It was Mr Radley’s views that it was not possible to determine what potential side effects any of the individual ten drugs that Madam Chan was taking at the relevant time would have had on her and on her signature structuring.  According to a medical report of Dr George Au dated 12 December 2016[115], Madam Chan was re-admitted to hospital between 22 and 26 September 2012 for chemotherapy and on 24 September 2012, she was mentally alert and was able to communicate but she was re-admitted on 10 October 2012 and she was very weak.

236.  There was no expert opinion produced by either party on the effect of the drugs and medications Madam Chan was taking on her handwriting on the day of her signing the Confirmation Letter.  There was evidence that there were “good” days and there were “bad days” such as the DAMA Incident when on re-admission the next day 17 July 2012 Madam Chan was recorded to have no more hallucination and anxiety and Mr Lai’s evidence also showed that Madam Chan could be weak one day and better another.  Mr Lai had attended the trial and confirmed that the Confirmation Letter was signed by Madam Chan in his presence.  Mr Lai is a solicitor and an officer of the Court and gave evidence on oath.  Having considered all the evidence, I am prepared to give Mr Lai the benefit of the doubt and find that Madam Chan did sign the Confirmation Letter in his presence.  

237.  Having said this, the Confirmation Letter is only one of the matters which this Court will have regard in considering the common intention of Madam Chan and P.  The fact is that Madam Chan had signed 4 documents at Mr Lai’s office, the Authorisation Letter, the SPoA, the GPoA and lastly the Confirmation Letter in less than two months of each other and shortly before her death.  In my view, these documents evinced an inconsistency as to Madam Chan’s true intention.  In particular, the Authorisation Letter, the SPoA and the GPoA were inconsistent with the contents of the Confirmation Letter, which on Mr Lai’s own evidence, Madam Chan was very weak and this also accorded with Dr Au’s evidence on her re-admission on 10 October 2012.  As said earlier, it did not seem to make sense for Madam Chan to redeem Property 2 and Property 5 if according to P, she was only P’s trustee and P was the one using the OD Facility.  Also, there was no mention of Property 1 in the Confirmation Letter or the sale proceeds of Property 4, both of which P was claiming in the SOC.  Nor were the sale proceeds of Property 6 or Property 7 mentioned in the Confirmation Letter, or the rest of the alleged Trust Assets, namely the Jewellery, the Investments and the Cash in Bank.  Having regard to the inconsistencies of the documents Madam Chan signed before Mr Lai and in particular the Confirmation Letter was signed in presence of P without a proper interpretation clause and when Madam Chan was very weak, I am not satisfied that Madam Chan was fully aware of the contents of the Confirmation Letter and/or that it reflected her true intention.

238.  Having considered the above, I do not find that a common intention can be inferred from those documents signed by Madam Chan at Mr Lai’s office that she was merely a trustee holding the alleged Trust Assets on trust for P.

H.7     P’s use of the 7 Real Properties as security and his purpose of purchasing the 7 Real Properties

239.  Only Property 2 and Property 5 were secured for the OD Facility.  As said earlier, in light of Madam Chan’s romantic relationship with P that she allowed her properties to be used as security for OD Facility used by P would not be surprising and I am not satisfied a common intention can be inferred by her allowing P to use the OD Facility.  It was also not surprising for P to be a guarantor, if any, for Madam Chan’s mortgage loans in light of their relationship.

240.  P had given his reasons as to why he purchased the 7 Real Properties.  His reason in respect of Property 1, and later Property 5, being for investment, had been considered earlier.  As for Property 2, P said only he had the keys and Madam Chan did not and that he bought Property 2 to store his “toys” ie antiques and his collections and to use it as a study. However, the insurance premia, the 1999 renovation (changing floor tiles) and moving of furniture were all paid by Madam Chan[116].  Whether Madam Chan had the key or not, I have found earlier that P and Madam Chan did meet there frequently on Sunday afternoons.  Property 2 was clearly for the joint use of P and Madam Chan and the carparks (Property 3 and Property 4) were again for their use.  As for Property 4, it was said by P that he instructed Madam Chan to sell it to cut the loss.  There was no evidence that either of them had any financial problems at that time and both or either could have sold to cut loss due to fall of the then market. 

241.  Property 6 was purchased around the same time as P bought the other two units at Discovery Park in his personal name.  According to P, he came to know of this development through internal contact.  Whether it was for investment or not, there was no reason as to why he needed to buy Property 6 in the name of a trustee since he bought the other two in his personal name. 

242.  As for Property 7, P’s evidence was that he purchased it as a place to rest and that he had placed a massage chair there. D’s case that his mother bought Property 7 with the intention to move there with her dogs as she was receiving complaints from the management office of Property 1 and Property 5 for keeping dogs, which was not allowed by the management.  D’s case was also supported by the evidence of Madam Ngaw.  I accept their explanation as to why Madam Chan bought Property 7.

H.8     D’s application for public housing

243.  It was also P’s case that D’s application for public housing would support the existence of Trust Agreement.  However, it was Madam Ngaw’s evidence that as Madam Chan was worried about having to sell all her assets to pay for her medical and hospital expenses, and that D would have nowhere to live and that was why she asked D to apply for public housing which was approved on 1 March 2011.  Madam Ngaw’s evidence supported D’s in that the application was made much earlier in about 2009/2010. The application was approved some 5 months before D worked for TWSL, I accept D’s evidence that his working for TWSL and his application for public housing were unrelated matters.  I accept D’s case that he applied for public housing because his mother was concerned she had to sell all her assets to meet her medical expenses.  I do not find that a common intention can be inferred by Madam Chan arranging for D to apply for public housing.

H.9     Conclusion on Common Intention Constructive Trust

244.  Having considered all the above and the conduct of P and Madam Chan and all the circumstances of the case, I do not find there was any sufficient evidence for a common intention to be inferred.  In light of my findings on that P’s payments to Madam Chan were for her general spending or gifts or P’s repayments of sums advanced to him under the OD Facility, I see no evidence of any detriment to P and he had had the benefit of advances from Madam Chan.  There was no unconscionability of Madam Chan/the Estate retaining the legal and beneficial ownership of the alleged Trust Properties.  I am not satisfied there was any common intention constructive trust nor the alleged Trust Assets were trust assets held by Madam Chan on behalf of P. 

H.10     Whether there was a resulting trust

245.  As I have said, the payments made by P in Annex 1 and/or Appendix 3 were not linked specifically to the purchase of any of the 7 Real Properties.  I have also found that those payments were either for Madam Chan’s general spending or gifts or repayments for advances under the OD Facility and there was no supporting evidence of any intention on P’s part that they should be repaid or that if they had been turned into landed properties, or assets, such as the Jewellery/Investments/Cash in Bank, they had to be returned to P.  I do not find there was any sufficient evidence of a resulting trust.

I.     MAIN ISSUE (4) - DID P LEND $ 1,268,850 TO MADAM CHAN FOR HER MEDICAL EXPENSES? 

246.  P’s pleaded case in the SOC was that since about 2008 when Madam Chan was first diagnosed with cancer, she had been borrowing money from him for her medical expenses until Madam Chan passed away on 12 November 2012.  When P was requested particulars including the dates and amounts of each advancement and each medical expense and the manner in which P had made the advancement or direct payment of medical expenses, in P’s 1 Answers, he said D was not entitled to such requests.  Only in P’s 2^nd Answers he then produced Annex 5 which purported to set out the amount of the Medical Expenses paid by P for Madam Chan totalling HKD 1,218,597 (“Annex 5”)[117], which was slightly different from the amount in the SOC.

247.  D’s case was that Madam Chan had her own money to pay for her own medical expenses and that she had received insurance payment of at least a sum of HKD 500,000 under her critical illness protection insurance purchased from China Life Insurance (Oversea) Company Limited in 2007 and other payments from her AIA policy.  D’s case was also that Madam Chan had sold Property 6 and Property 7 in 2012 for payment of her medical bills.  Property 6 was sold in 2012 at a loss of HKD 1,420,290 (it was purchased at HKD 5,400,290 and sold for HKD 3,980,000).  As for Property 7, as said earlier, it was D’s case that this was purchased by Madam Chan as an alternative residence purpose, as the deed of mutual covenant of Property 1 (and Property 5) do not allow occupants to keep dogs.  As seen in the Text Messages, there were water ponding problems at the roof of the property and the property was sold by Madam Chan.  This was the property for which Madam Chan gave P the SPoA to complete the sale on 18 October 2012.  It was D’s case that a sum of HKD 500,000 was missing from the net sale proceeds.

248.  D’s own evidence during the trial was that Madam Chan’s medical expenses were high and that she had to sell Property 6 and Property 7 to pay for her expenses.  There was no reason why Madam Chan could not pay her own medical expenses or if P had paid it on her behalf, there was no reason why he should not be reimbursed by Madam Chan and/or the Estate. For item (1) of the Medical Expenses in Annex 5, although Madam Chan did make a claim to China Life Insurance for her surgery and/or hospitalisation, she only received payment in December 2007 and there was no sufficient evidence that she had reimbursed P the sum of HKD 252,646 he paid on 2 November 2007 or other expenses in Annex 5 which P paid to Dr Au and/or paid by P by his credit card for Madam Chan.  I accept the amounts in Annex 5 and I am of the view the Estate should reimburse P for the amounts stated therein.  

J.     MAIN ITEM (5) – WHETHER D IS ENTITLED TO HIS COUNTERCLAIM

J.1     The Loan of HKD 2m and the sum of HKD 1,162,662.44

249.  D had counterclaimed, amongst other things, (i) a loan of HKD 2m advanced to P by Madam Chan on 3 May 2012, and (ii) a total sum of HKD 1,162,662.44 said to be withdrawn by P from Madam Chan’s bank accounts using the GPoA between 2 to 5 November 2012.

250.  According to P’s Re-Re-Amended Reply and Defence to the Counterclaim, P’s case was the sum of HKD 2,000,000 was withdrawn by him on 3 May 2012, and the sum, being the balance of proceeds of sale of Property 6, was duly returned by Madam Chan to P pursuant to the Trust Agreement[118].

251.  First, I have found there was no Trust Agreement or any trust.  Second, the Test Messages clearly showed that P was asking Madam Chan for the Loan of HKD 2m which she had agreed.  The amount came from Madam Chan’s 680 Current Account with the OD Facility.  I find that the amount of HKD 2m was a loan from Madam Chan to P.

252.  As said earlier, the GPoA only gave P to sell, or manage and/or deal with Madam Chan’s properties.  It would not mean that by giving P the GPoA, Madam Chan was acknowledging that P was the beneficial owner of properties held in her name or that there was the existence of a Trust Agreement.

253.  There was a total of about HKD 3,162,662.44 withdrawn by P from Madam Chan’s bank accounts namely the Loan of HKD 2m and the sum of HKD 1,162,662.44 using the GPoA.  I allow P to deduct the Medical expenses he had paid for on behalf of Madam Chan as set out in Annex 5[119], and that he should repay the balance to the Estate.

J.2     The Jewellery

254.  As said earlier, it was P’s case that the Jewellery were part of the Trust Assets.  As I have found there was no common intention constructive trust and/or resulting trust, the Jewellery items were not part of the Trust Assets.  Thus, if they existed, they belonged to Madam Chan and if P had paid for them, I find they were gifts in light of their relationship.

255.  D did not admit the existence of the Jewellery as set out by P in the SOC, but his case was if the Jewellery had existed, then P should return them to the Estate or to pay the Estate the sum of HKD 3,883,800 which P alleged was the value[120]. It was D’s case that Madam Chan had purchased various jewellery and valuable items during her lifetime and that she had told D that she had stored such items in Property 2 as Madam Chan’s parents had apparently taken the jewellery and gold coins when they were originally in Property 1 and had pawned them for gambling.

256.  There was no sufficient evidence that the Jewellery items were still stored in Property 2 at the time of Madam Chan’s death.  P’s evidence was that Madam Chan had kept the jewellery in a safe deposit box and he had produced a copy of an agreement for renting of safe deposit box no xxx-xx760 to the Hang Seng Bank dated 4 August 2011[121].  According to D, this safe deposit box at the Hang Seng Bank was opened on 4 August 2011 in his name and D claimed that there was nothing there when he went to open it for the purpose of applying for grant of probate.  During the trial, D had produced the rental agreement which showed although the box was opened in D’s name, Madam Chan held a power of attorney to operate the box singly. 

257.  Madam Chan’s savings passbooks showed there was probably a safe deposit box opened earlier than the one mentioned above.  In any event, I find there was no sufficient evidence as to what Jewellery was still held by Madam Chan at the time of her death inside Property 2, or in a safe deposit box or elsewhere.  P had said that 30 taels of gold had been returned to him by Madam Chan.  There was no sufficient evidence to contradict P’s evidence that it was Madam Chan who gave P or to allow P to have the 30 taels of gold.   

258.  Having considered all the evidence, I am not prepared to allow this part of D’s counterclaim. 

K.     MAIN ITEM (6) - WAS THE 2^ND WILL VALIDLY EXECUTED?

259.  According to P, Madam Chan was taken away from the hospital on 25 October 2012 against doctor’s advice.  As seen in Dr Au’s medical report, for the period between 10 October 2012 to 24 October 2012, Madam Chan was weak and she had agreed that she be given no chemotherapy and only supportive care.  The nursing notes however showed that Madam Chan could communicate and could be alert at times when she was awake and that she had been informed of her terminal condition[122]. When D was asked the circumstances Madam Chan left the hospital that day, he said he could not recall.  The discharge form on 25 October 2012 was signed by D.  There was no sufficient evidence that Madam Chan did not leave the hospital voluntarily and there was no DAMA form on 25 October 2012. 

260.  It was D’s evidence that his mother had asked him to contact a solicitor on 26 October 2012, and that he contacted the solicitor at Messrs CH Chan & Co whom his mother had asked him to contact. He said his mother told him to go to the solicitors office to confirm the addresses of the properties owned by Madam Chan.  When he arrived with Madam Chan, the will was already prepared and he had confirmed to the solicitor that the addresses of the 4 properties were correct. When D was asked by Ms Chow during the trial why only 4 properties were mentioned, as there were more properties held by Madam Chan, D’s response was that the others were sold, and that the sale proceeds were given to P to pay for the medical fees, and the hospital fees were about HKD 20,000 a day.  D admitted that the only time that he had paid for Madam Chan’s hospital fees was after her death, and the bill was about HKD 60,000 odd.  

261.  Although Madam Chan was taking morphine and was under pain control, there was no expert evidence as to the effect of morphine and/or other medications on her mental/testamentary capacity whether at the time of her signing the SPoA, GPoA, the Confirmation Letter or her signing the 2^nd Will.  There was no expert medical evidence as to the effect of those medications as to Madam Chan’s mental/testamentary capacity.  Dr Au’s reported showed that Madam Chan could be alert at times when she was awake.  Madam Chan was readmitted into the hospital on 1 November 2012, about 5 days after she executed the 2^nd will, and she passed away 12 days later.

262.  The contents of the 2^nd Will were duly interpreted by the solicitor Mr Chan Chui Hung to Madam Chan who executed in the presence of Mr Chan and a clerk who signed as witness.  On the face of it, there was due execution.  In the 2^nd Will, Madam Chan had specifically bequeathed Property 1, Property 2, Property 3 and Property 5 to D together with her residuary estate.  There was no inconsistency between the 1^st and the 2^nd Will although in the 1^st Will, there were no specific bequests of the 4 properties.  I find there was no sufficient evidence that Madam Chan did not have the testamentary capacity to execute the 2^nd Will, and there had been due and proper execution of the 2^nd Will.

L.     CONCLUSION

263.  In the above circumstances, P’s claim must fail save for the Medical Expenses.

264.  According to P, he has moved into Property 2 in 2009.  There was no sufficient evidence to contradict P’s evidence that all utilities bills were in his name.  Property 2 has never been rented out since its purchase, and as found earlier, it was used by P jointly with Madam Chan as a meeting place on Sunday afternoons.  In light of their long romantic and intimate relationship, there was no sufficient evidence that Madam Chan would not have allowed P to move there in 2009.  I find P’s occupation of Property 2 rent free was with Madam Chan’s knowledge and consent but any such occupation of Property 2 would come to an end on Madam Chan’s death on 12 November 2012.

265.  The Estate should be entitled to mesne profits from December 2012 onwards until 31 May 2021 of HKD 2,0490,000[123], and from 1 June 2021 onwards until delivery up of vacant possession of Property 2, a monthly sum of HKD 21,000.  P should be allowed to deduct from the total amount payable by him any rates paid by him from the date of Madam Chan’s death.

M.     ORDER 

266.  The effect of my order is as follows:

(1)     P’s claim against D (on behalf of the Estate) is dismissed save that P is entitled to deduct the medical expenses he paid on behalf of Madam Chan of HKD 1,218,597 from the amount P had to repay the Estate.

(2)     P shall pay to D (on behalf of the Estate) a sum of HKD 1,944,025.44, namely HKD 3,162,622.44 less HKD 1,218,597 (Medical Expenses), within 28 days hereof.

(3)     P shall deliver vacant possession of Property 2 to D (on behalf of the Estate) on or before 30 June 2022.  P shall pay to D (on behalf of the Estate) mesne profits from December 2012 onwards until 31 May 2021 of HKD 2,0490,000, and from 1 June 2021 onwards until delivery up of vacant possession of Property 2, a monthly sum of HKD 21,000 less any rates paid by him.

(4)     As for costs, as D (Estate) is overall the successful party, P shall pay D (Estate) costs of this action to be taxed on party and party basis if not agreed.  This is an order nisi and shall be final after 28 days.