MAK YUK KING v. THE PERSONAL REPRESENTATIVES OF WONG WAH WAI, DECEASED

CACV 47/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 47 OF 2013

(ON APPEAL FROM HCA NO. 850 OF 2009)

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J U D G M E N T

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Hon Cheung JA:

1. I agree with the judgment of Yuen JA.

Hon Yuen JA:

2. This is an appeal by Mr Wong Tak Seng (“Mr Wong”) from the judgment of Deputy High Court Judge Burrell (“the judge”) given on 19 February 2013.  As the judgment was written in English, this judgment is also written in English although the appeal was conducted in Chinese.  An interpreter will be made available to Mr Wong if he is present when this judgment is handed down, and a Chinese translation will be provided to him in due course if he so requests.

Background

3. Mr Wong’s father Wong Wah Wai (“the deceased”) died on 8 July 2008 aged 74, intestate.  The following assets (“the Assets”) were in his sole name at the time of his death:

  (1)  a flat bought in 1999 (“the Flat”),

  (2)  cash in a bank account, and

  (3)  a securities account. 

Proceedings

4. In proceedings commenced against Mr Wong as personal representative of the deceased’s estate, Madam Mak Yuk King (“Madam Mak”) claimed that she had been living with the deceased as man and wife since 1993 and that:

  (1)  the Flat had been transferred to her upon the deceased’s death under the principle of donatio mortis causa;

  further or alternatively,

  (2)  she has a beneficial interest in the Assets by virtue of a common intention constructive trust; alternatively that the estate is estopped by way of proprietary estoppel from denying her beneficial interest.

5. The trial took place over three days in January and February 2013.  Both parties were legally represented.  Madam Mak gave oral evidence and called five witnesses.  Mr Wong also gave evidence and called one witness.

Facts

6.1.  The deceased had a complicated personal life.  He married in China when he was 21. According to the documentary evidence, he and his wife had two children, a daughter and a son (Mr Wong). 

6.2.  However before Mr Wong was born, the deceased (then in his mid-20s’) left China.  He went first to Macau, and a year later moved to Hong Kong.  In the judge’s words the deceased had “no contact of any relevance” with his wife after he left China (para. 8, Judgment). 

7. The deceased lived on his own in Hong Kong, eventually setting up a clinic selling herbs and practising as a herbalist and bonesetter.

8.1.  In 1989, when the deceased was in his 50's, he met Madam Mak when she consulted him at his clinic.  She later began working for him as his only employee and received $4000 a month. 

8.2.  Their relationship developed.  In 1993 Madam Mak divorced her husband, from whom she had separated some 10 years ago.  The judge found that the deceased and Madam Mak gave a banquet in her home town announcing their relationship as de facto man and wife, and Madam Mak and her two daughters (then in their teens) lived with the deceased.  The deceased and Madam Mak treated each other as man and wife, and he supported her daughters whose father died a year after the divorce. 

8.3.  More importantly for present purposes, after they started to live together as man and wife, Madam Mak no longer drew a wage, even though she continued to work at the clinic.  The judge accepted her evidence that she worked longer hours, and expanded the scope of her work to include sourcing herbs in Hong Kong and the mainland at no or reduced cost with the help of her family and contacts.  As a result the clinic prospered.

9. Six years later (in 1999), the deceased and Madam Mak decided to acquire a flat as their residence.  The Flat was bought, without a mortgage, with profits from the clinic.  The Flat was registered in the deceased’s sole name, and the judge found that this was because Madam Mak was registered as a tenant of a public housing unit and she did not wish to lose the unit.  It was an unchallenged fact that the title deeds to the Flat were kept by Madam Mak. 

10.1.  As far as home life was concerned, the deceased and Madam Mak and her daughters regarded one another as family.  The daughters’ education was funded by profits from the clinic.  When one of them got married, photographs showed the deceased participating at the wedding party as part of the family. From time to time, the deceased went on vacation with Madam Mak and/or her daughters. 

10.2.  In other words, the deceased’s life with Madam Mak was no different from that of a normal married couple who worked together at a business. 

11.1.  Coming then to Mr Wong, he was born after the deceased had left China and they only met for the first time in 1980, when Mr Wong was 20 years old.  In 1992, the deceased helped Mr Wong set up home in Macau by buying a flat for him. 

11.2.  Nevertheless the judge found that Mr Wong did not enjoy a close relationship with the deceased.  Mr Wong’s travel records showed that in the 4 years from June 2004 to July 2008 (when the deceased died), he only made 8 visits from Macau to Hong Kong, on each occasion returning to Macau on the same day.  The judge further noted that no photographs of the deceased with Mr Wong or the latter’s children were produced. 

12. This then was the background against which the judge had to decide whether 

  -  the deceased had transferred the Flat to Madam Mak by way of donatio mortis causa, and

  -   there was a common intention constructive trust and/or proprietary estoppel over the Assets.  (Although these two remedies are separate and distinct, quite often a factual situation may give rise to the possible application of both remedies.  It is not necessary in the present appeal to distinguish between the two.  As the judgment contained passages which were more pertinent to common intention constructive trust, I shall refer hereafter to that remedy only).

Judgment

13.1.  The judge found that the deceased had made a gift of the Flat to Madam Mak by way of donatio mortis causa, and that the requirements of a common intention constructive trust were satisfied in respect of the other Assets. 

13.2.  As far as the cash in the bank account was concerned, it stood originally at about $1m.  After taking into account the cost of funeral expenses and a withdrawal of $300,000 for Mr Wong’s use for legal expenses, the judge ordered that the balance (thought to be about $500,000) should be paid to Madam Mak.  The judge indicated that in ordering the balance to be so paid, he had taken into account the evidence that Madam Mak would have to repay relations on the mainland from whom she had borrowed money for the deceased’s medical expenses there (para. 39, Judgment).

13.3.  As for the securities, the judge considered that it would be equitable to apportion the securities account equally between the deceased and Madam Mak.

Appeal

14.1.  Mr Wong appealed.  The grounds in his notice of appeal were brief, and challenged the judge’s findings of fact. 

14.2.  In his oral submissions Mr Wong said when the deceased was in hospital and knew he was terminally ill, the deceased had said that he had “幾百萬” (“a few millions”, the first word “幾＂indicating “at least three”), and since there was only about $1m in cash and $1m in securities, that meant that he regarded the Flat as his, and that he had not intended to give it to Madam Mak.

14.3.  Mr Wong also submitted that if there was a common intention that Madam Mak was to have a beneficial interest in the Assets, the deceased would not have held them in his sole name, and he pointed to the fact that a flat in Panyu had been held by the deceased and one of Madam Mak’s daughters as co-owners.

14.4.  Mr Wong also submitted that Madam Mak was still claiming comprehensive social security assistance until 2001. 

New documents

15. In addition to written submissions, on 15 January 2015 Mr Wong had filed a clip of documents with the court.  These comprised:

  (1)   a list (prepared by Mr Wong) purporting to show his entry into and exit from Hong Kong from 13 September 1994 to 2 August 2003;

  (2)   photocopies of his Macau passport;

  (3)   two documents proving title 房地產權情況証明 (printed on 10 November 2000 and 22 February 2013 respectively) from 廣州市國土資源和房屋管理局番禺區分局 (Panyu Sub-department of the Guangzhou City Department of Management of Land Resources and Housing), stating that on 2 February 2000, a certificate had been issued that a flat in Panyu was co-owned by the deceased and Cheung Ka Yan, Madam Mak’s daughter.

16. We ascertained at the hearing that none of those documents had been produced at trial.  However there was no application from Mr Wong for leave to adduce fresh evidence, and it was far too late for him to make an application at the hearing of the appeal itself.

17.1.  In any event, even assuming that prior to the hearing of the appeal he had made an application to adduce these documents as fresh evidence, he would have failed to satisfy the first condition of Ladd v Marshall [1954] 1 WLR 1489. 

17.2.  As far as the first two sets of documents were concerned, they were his own documents and could have been obtained at the trial with reasonable diligence. 

17.3.  As for the last set of documents, they relate to a point which had in fact been made at the trial concerning the issue whether a flat in Panyu had been co-owned by the deceased with Miss Cheung (paras. 40-42, Judgment).  As these were official registry documents, again this was evidence which could have been obtained at the time of trial with reasonable diligence.

17.4.  When asked why these documents had not been produced at trial, Mr Wong was only able to say that his lawyers had not asked him to do so.  

17.5.  As the first condition of Ladd v Marshall has not been satisfied, I have not taken these documents into account on appeal.  It is not necessary for me to consider whether they would have assisted Mr Wong in his appeal in any event.

Discussion

Donatio mortis causa

18. I shall first recount the judge’s findings in respect of the claim of donatio mortis causa, because if this principle applied, then the Flat would not fall to be included as part of the deceased’s assets, even if originally the Flat was acquired either for himself alone or on the basis of common intention constructive trust.  In a donatio mortis causa situation, a donee becomes absolutely entitled to the property on the donor’s death and the property is not part of the donor’s assets at all.  Thus it has been said that a donee takes not under, but against, the deceased’s personal representative (Re Estate of Lung Nga Lai Eilly [2014] 4 HKLRD 823, para. 7). 

19.1.  The judge found that about a month before the deceased died, when he was seriously ill with cancer in hospital in Guangzhou after having received treatment for a few months,

“... the deceased made statements to the clear effect that he wished [Madam] Mak to inherit the flat in the event of his death. ... He confirmed in words, knowing of his serious illness, the natural consequence of his actions, years earlier, when he gave her the title deeds. ... [B]y his words prior to death he converted her custody of the title deeds into a gift of the property after his death” (para. 28, Judgment).

19.2.  Although the judge did not specify any particular statement(s) from the oral testimony of Madam Mak and other witnesses, that is his finding of fact after having seen and heard the witnesses.  He held:

“Thus the ingredients of (a) an intention (b) expressed with the real possibility of death occurring in the near future and (c) that the property will pass on death are all satisfied” (para. 29, Judgment).

20.1.  However in a passage following, the judge also said this:

“His [the deceased’s] statement when in hospital that he would put the house into joint names when he returned to Hong Kong (presumably having recovered from his illness) reflects his intention as to her entitlement at that time. Whether or not he would have in fact done so cannot be predicted. It nevertheless remains the case that the gift was to take effect upon death” (para. 29, Judgment).

20.2.  I have to say that at one stage I had some difficulty with that passage.  If all that the deceased had said was that he intended to put the Flat into joint names when he returned to Hong Kong, the requirements of donatio mortis causa would not have been satisfied. 

20.3.  That is because a donatio mortis causa is a present gift (albeit a conditional one).  If the deceased’s only intention was to put the Flat into joint names when he returned to Hong Kong, his gift of the property (or an interest therein) would not be made until he signed the conveyancing document to make Madam Mak a joint tenant.

20.4.  Further, a joint tenant acquires an immediate interest in property (which can be converted any time into a tenancy in common by way of severance), and so the property would not pass only upon death as in a donatio mortis causa. 

20.5.  Moreover in the passage referred to in para.20.1 above, the words “(presumably having recovered from his illness)” appear to be inconsistent with the finding referred to in para.19.1 that the deceased knew of the seriousness of his illness.

21.1.  However I do not think that what the judge meant in the passage referred to in para. 20.1 was that he found donatio mortis causa to have been proved by the statement in that passage, or that the statement was all that the deceased had said. 

21.2.  Reading that passage in context, I think the judge was reconciling his finding of donatio mortis causa (as a result of other statements made by the deceased referred to in para. 19.1) with the deceased’s statement regarding his intention to put the Flat into joint names should he be fortunate enough to recover from his illness.  (In fact when the deceased returned to Hong Kong he was already so ill that he could only be given palliative care and he died in less than a week). 

21.3.  Accordingly I do not think the passage referred to detracts from the judge’s finding of donatio.

22.1.  The judge’s judgment was based on findings of fact, and despite Mr Wong’s submissions (which were also made at trial by his counsel), it is well-established that an appellate court should be very slow to interfere with findings of primary fact.  As Lord Hoffmann said in Biogen Inc v Medeva Plc [1997] RPC 1 and repeated in Piglowska v Piglowski [1999] 1 WLR 1360:

“The need for appellate caution in reversing the trial judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impressions which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance .... of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation”. (Emphasis added).

22.2.  To this, Bokhary PJ added in Ting Kwok Keung v Tam Dick Yuen (2002) 5 HKCFAR 336:

“Where the judgment turns on an issue of fact, the Court of Appeal must have regard to the nature of that issue of fact. And it must have regard to the advantages enjoyed by a trial judge who received the evidence on such an issue at first-hand, in other words, in whose presence the whole of the evidence unfolded in its living state. Such advantages can be, as Lord Shaw of Dunfermline put it in Clarke v Edinburgh Tramways [1919] SC (HL) 35 at p.36, ‘sometimes broad and sometimes subtle’. The question for the Court of Appeal is whether, even though it does not enjoy the advantages enjoyed by the trial judge who received the evidence at first-hand, it is nevertheless satisfied that his conclusion on the facts is plainly wrong. The Court of Appeal should intervene if so satisfied. But if not so satisfied, the Court of Appeal should defer to the trial judge’s conclusion even if in some doubt as to its correctness”. (Emphasis added).

22.3.  I do not see any grounds for this court to overturn the judge’s finding that the deceased had made a donatio mortis causa of the Flat to Madam Mak. 

Common intention constructive trust

23. I come now to the other Assets.

24.1.  The judge found that the remaining assets (ie the cash and the securities) had been acquired “since and as a result of” the deceased and Madam Mak becoming de facto man and wife (para. 19, Judgment).  They had been acquired with the income of the clinic, which had prospered with Madam Mak’s contributions after 1993. 

24.2.  The judge found that the deceased and Madam Mak had shared a common intention that they would both be beneficially entitled to the assets, and he accepted Madam Mak’s evidence of the deceased’s representations to her that she and her daughters would be looked after even after he died (paras. 30-31, Judgment).

24.3.  The judge also found that Madam Mak had relied upon such representations to her detriment.  He said (para. 34, Judgment):

“In my judgment the elements of detriment and reliance are satisfied by a common sense view of the entire duration of the relationship. Once they committed themselves to each other in 1993 she devoted herself to him and his business. She took no salary, she worked long hours, she made the business sufficiently profitable for them and her daughters to live on. She trusted the deceased to continue to provide for her and her daughters after his death, as he had done during his life. She permitted the assets to be in the deceased’s sole name, without question. She did not try and persuade him to write a will”.

24.4.  He found it would be unconscionable for the deceased’s estate to deny Madam Mak’s beneficial interest whatever it might be (para. 31, Judgment).

24.5.  As for the point made by Mr Wong as to the Assets having remained in the deceased’s sole name, the judge found that this was because the deceased and Madam Mak were of a generation, background and culture where it would be regarded as normal to place a family’s assets in the name of the head of the household (para. 20, Judgment) and the Panyu property was a different matter of which there was insufficient evidence at trial for the judge to make a proper finding (paras.40-42, Judgment).  As for Madam Mak’s claim for social security assistance, this was a matter of which the judge was aware, just as he was aware that she continued to hold onto her public housing unit even after she had started living with the deceased at the Flat.

Apportionment

Cash

25. Originally there was about $1m cash.  However, the account was reduced by funeral expenses and a sum of $300,000 for Mr Wong to use on legal expenses.  The judge ordered that the balance (thought to be about $500,000) should be paid to Madam Mak.  However it would be noted that the judge was aware that Madam Mak had borrowed quite substantial sums of money from her relations (nearly $300,000 from the husband of a niece) for the deceased’s medical expenses on the mainland (para. 39, Judgment).  The order for the balance to be paid to Madam Mak was therefore a rough and ready calculation which was consistent with an equal apportionment which the judge was entitled to make on his findings of fact. 

Securities

26. As for the securities account, the judge also ordered equal apportionment.  He referred to “second guessing what a will might have said had one been written” (para. 37, Judgment).  However when a court considers a common intention constructive trust, the focus is on both parties’ common intention at an earlier point in time, not on one party’s testamentary bequests.  I think what the judge meant was that whilst the deceased and Madam Mak had shared a common intention that they would both be beneficially entitled to the assets when they were acquired, it was not their intention that the survivor would take the entirety on the death of the other, and that the deceased had intended to retain his share of the cash and securities accounts as he would have wished to provide for his son.  Again this was consistent with an equal apportionment which the judge was entitled to make on his findings of fact. 

Order 

27. For the reasons set out above, I would dismiss the appeal with an order that the costs of the appeal should follow the event ie the appellant is to pay the respondent’s costs.

Hon D Pang J:

28. I also agree with the judgment of Yuen JA.

Hon Cheung JA:

29. Accordingly the appeal is dismissed and the appellant is to pay the respondent the costs of the appeal.