CHAN CHUN HEI DAVID v. MA TUNG LILY

HCA 16978/1999

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 16978 OF 1999

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J U D G M E N T

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1. The plaintiff Mr. Chan Chun Hei David brings this action against the defendant, Mrs. Ma Tung Lily, in her capacity as the executrix of the estate of the plaintiff's mother, Madam Tao Shu Yau, deceased ("the deceased"). The deceased had died of stomach cancer on 26 September 1990. Her age as given on the death certificate was 59. This might well have been understated, as the plaintiff has said that the correct age of his mother at the time of death should have been 63 and according to the defendant, the real age of the deceased should have been 60 or 61. The plaintiff seeks a declaration that the Notice of Severance ("the Notice of Severance") purportedly executed by the deceased on 31 August 1990 by the deceased whereby she was to sever the joint tenancy of herself and the plaintiff in respect of a property was invalid. The property in question was Flat A on 9th Floor and car parking space No. 1 on the 1st Floor of Way Man Court, Nos. 50 and 52 Village Road, Happy Valley, Hong Kong ("the Property"). If the Notice of Severance was valid, the effect of this is that the whole of the Property would not pass to the plaintiff by survivorship and the deceased's half share that was severed would form part of her estate. The grounds on which the declaration is sought are that the deceased was not of sound mind and capacity and was incapable of understanding the Notice of Severance when she executed the same, and further or in the alternative, undue influence was brought to bear on the deceased by the defendant. The plaintiff also claims against the estate of the deceased the sum of HK$1,173,627.02, being sums he had paid for and on behalf of the deceased on various dates from 2 February 1989 to 31 December 1991 at her request on the understanding that the plaintiff would be reimbursed in full by the deceased or by her personal representative.

2. The defendant denies the allegations of lack of mental capacity of the deceased in executing the Notice of Severance and undue influence. As for the claim of moneys due from the estate, the defendant does not dispute that sums were paid out by the plaintiff in the amounts as alleged or that such payments were for and on behalf of the deceased. Liability is denied on the basis that there was no request or understanding that the plaintiff was to be reimbursed by the deceased or the estate for the payments. Alternatively, if there was any such request or understanding that the plaintiff was to be reimbursed, the plaintiff should reimburse himself out of the funds and assets of over HK$7 million which the deceased had transferred to him to be held on trust for her. A plea in the defence that the claim of the plaintiff against the estate in respect of the debts of the deceased is time barred has been abandoned. The defendant has also dropped the contention that the plaintiff is estopped from challenging the validity of the Notice of Severance as the plaintiff had raised these issues and abandoned them in an action (High Court Action No.P7 of 1996; "the probate action") brought by the defendant and the deceased's brother, Mr. Tao Hsu Mei Tony ("Tony") claiming probate of the deceased's will executed on 6 September 1990 ("the 2nd Will"). The defendant counterclaims for an account and enquiry of the mesne profits and income of the Property as the plaintiff has taken possession of it since the deceased passed away on 26 September 1990. It is admitted by the plaintiff in the further and better particulars of the statement of claim that he entered into occupation of the Property in July 1991.

3. I will first set out the family history and the background matters which are not in dispute.

The family history

4. The deceased grew up in Shanghai. She had two brothers, the younger of them was Tony and the elder was Tao Hsu Kwo also known as Lau Sze Kwo ("Lau"). She and the defendant, who is Shanghainese, were long time friends, having known each other from their early days in Shanghai as their families were neighbours. The deceased came to Hong Kong in about 1948 whereas the defendant came in 1962. They renewed their friendship after the defendant had settled in Hong Kong. The defendant is a medical doctor and she joined the University of Hong Kong as a teaching staff in 1968. She was Associate Professor in the Department of Pathology at the time of the incidents in question in 1990. She had retired in July 1997 and is now in her sixties.

5. The deceased had worked as a dance hostess for a while after she came to Hong Kong. Then she met a Cantonese of considerable wealth, Mr. Chan Wai, and they lived together as husband and wife. She bore Mr. Chan two children, the plaintiff who was born in 1950 and a younger son Chan Kam Tsuen Walter ("Walter"). When Mr. Chan passed away in 1957, he left the deceased substantial assets. The deceased had never married or worked for a living thereafter.

6. The plaintiff and Walter were educated in England in the 1960s. Walter became a qualified accountant and he has married and settled in England. The plaintiff left the U.K. in 1971, he then studied in the United States and later immigrated to Canada. In 1979, he returned to Hong Kong. Of the two sons, the deceased had regarded the plaintiff as her favourite because he was in Hong Kong and was closer to her although they did not live together. The plaintiff has been working as a secondary school teacher in Hong Kong intermittently. He is fifty-one years old.

7. According to the plaintiff, his mother was a very strong and independent woman. She raised the plaintiff and Walter on her own. Notwithstanding her lack of formal education, she had always managed all financial affairs and other matters on her own until she became seriously ill as described below. According to the defendant, the deceased was a filial daughter and she had for a long time supported her maiden family financially.

The deceased's illness

8. In June 1986, the deceased was diagnosed as suffering from adenocarcinoma. She had an operation on 26 June 1986 and was discharged from hospital on 16 July 1986. There was no recurrence of the disease until January 1988 when she had another operation with great difficulty and almost the whole of her stomach was removed. She left hospital on 27 February 1988. Three months later, the deceased made a will on 6 May 1988 ("the 1st Will") leaving her entire estate to the plaintiff and Walter in equal shares absolutely and appointing them the executors of her will. She was then living on her own in a flat in Dragon Garden, Tai Hang, which was registered in her sole name.

9. After her second operation, the deceased engaged a Filipino maid to look after her. The maid was Mrs. Terisita D. Mendoza also known as Tessie. She remained in the deceased's employment until the deceased had passed away.

10. In March 1989, the deceased sold the flat in Dragon Garden for about HK$3.08 million and, using part of the proceeds of sale, purchased the Property in Happy Valley at HK$1.9 million. The Property was assigned to the deceased and the plaintiff as joint tenants. It was in or about 1989 that the deceased added the plaintiff's name to some of her bank accounts.

11. In December 1989, the deceased made a gift of money to her brother Lau and US$20,000.00 was withdrawn from an account in the joint names of herself and the plaintiff.

12. Starting from April 1990, the deceased's condition deteriorated rapidly. She went in and out of hospitals. When she was an in-patient of the Queen Mary Hospital ("QMH"), she came under the care of Dr. Hui Wai Mo ("Dr. Hui"). She was admitted to QMH on 10 April 1990 and discharged on 14 April. On 15 April, she was admitted to the Hong Kong Sanatorium & Hospital and discharged on 22 April 1990. On 18 May 1990, she was re-admitted to that hospital and stayed for about a week. On 31 May 1990, she was admitted to QMH and was discharged on 10 June 1990 after palliative laser therapy. Her long-term prognosis was very poor. The deceased knew that her illness was at the terminal stage and that she did not have long to live.

13. On 19 April 1990, whilst the deceased was in hospital, she made a further gift of money to Lau in the sum of US$15,000.00. The plaintiff paid the amount to Lau at the request of the deceased. Also at about this time, in April and May 1990, substantial sums of over HK$7 million were transferred from various accounts and fixed deposits held in the joint names of the deceased and the plaintiff to the plaintiff's bank account. The plaintiff has asserted that the moneys were transferred as outright gifts to him. This is disputed by the defendant.

14. Walter came back from England to see his mother on 1 June 1990 and he left on 17 June. On the same day that he left, the deceased's goddaughter, Madam Chan Yau Kit ("Yau Kit ") arrived from Paris and stayed with the deceased at the Property. During her stay, Yau Kit obtained from the deceased two cheques for the total sum of HK$100,000.00, several fur coats and various items of jewellery. At the early hours of 29 June 1990, the plaintiff made a report to the police alleging theft by Yau Kit of money and valuables belonging to his mother. There is dispute as to why the plaintiff had made the report to the police. The plaintiff has alleged that he made the report because the deceased had changed her mind about giving the money and valuables to Yau Kit and she asked for his assistance to get them back. This is disputed by the defendant. The police did not pursue the complaint as Yau Kit later returned the items she had taken except for those she had already sent to France.

15. Also on 29 June 1990, the plaintiff arranged for about HK$7.5 million to be transferred into the deceased's savings account and on the same day he caused the deceased to sign two remittances remitting the entire sum from her account to two accounts abroad. One was an account in Luxembourg controlled by Walter and into this account US$400,000.00 was transferred. The other was the plaintiff's account in Canada and the balance of the money was sent there. It is the plaintiff's case that the sum of HK$7.5 million had come from the outright gifts of money from the deceased to him. As for the amount of US$400,000.00 he had caused to be paid into Walter's account, he alleges that this was a loan from him to Walter. By then, virtually all the money of the deceased had been transferred out of her bank account and she did not even have money to pay for her medical expenses.

16. On 6 July 1990, the deceased had a seizure at home and was admitted to QMH where she stayed until 19 July when she was transferred to the Tung Wah Hospital and remained there till 30 July. On 6 August 1990, she was re-admitted to QMH. From then onwards, she had stayed in QMH except for her home leave on 5 and 6 September 1990 until she passed away on 26 September.

The execution of various documents

17. In August 1990, the defendant left Hong Kong for a holiday abroad for four weeks. She arranged for her friend, one Mrs. Fan, to visit the deceased in hospital when she was away. Mrs. Fan was then working as a charitable worker in hospitals and she comforted patients who were terminally ill. She is married to Mr. William Fan, a partner of a firm of solicitors, Messrs. Fan & Fan. Mr. Fan has known the defendant since 1965.

18. On 31 August 1990, the plaintiff received from Messrs. Fan & Fan, who acted for the deceased, a letter and the Notice of Severance. The material parts of the solicitors' letter read as follows:

"We are instructed that you intend or are taking steps to sell [the Property] and have caused [the Property] to be inspected by various real estate agents and/or prospective buyers while [the deceased] was and still is in hospital.

We are now instructed to inform you, which we hereby do, that [the deceased] is still living in [the Property] although she has from time to time been required to be hospitalised for medical treatment, and has absolutely no intention of selling [the Property].

We are further instructed to inform you, which we hereby do, that any power(s) of attorney whatsoever that [the deceased] has given you (if any) is now revoked and declared null and void, and that you do not have [the deceased's] permission to act for her or on her behalf in any capacity whatsoever."

19. It was stated in the Notice of Severance that the document was interpreted to the deceased by Miss Lau Kwai Wa Selina ("Miss Lau"), who was then an articled clerk to Mr. William Fan, and that she had also witnessed the execution of the document by the deceased. Prior to the execution of the Notice of Severance in QMH, Dr. Hui had examined the deceased and he had issued a certificate stating that her mental state that day was "sound and clear". On a copy of the letter of Messrs. Fan & Fan and a copy of the Notice of Severance, the deceased had written in Chinese words to the effect that she had understood and agreed with the contents of each document.

20. Messrs. Fan & Fan also wrote to the plaintiff's solicitors, Messrs. Chan, Lau & Wai on 31 August 1990 enclosing a copy of the Notice of Severance upon being informed by the plaintiff when the documents were served on him that day that all communication should be channelled through his solicitors. There was no reply from the plaintiff or his solicitors to the letters of Messrs. Fan & Fan. The Notice of Severance was registered in the Land Registry on 1 September 1990.

21. On 6 September 1990, the deceased executed the 2nd Will by which she revoked the 1st Will and appointed the defendant and Mrs. Hsu Lo On Kay Angela ("Mrs. Hsu"), another old friend of the deceased, as the executors of her new will. She left half of her estate to her two brothers, Lau and Tony, in equal shares and the other half for such charitable objects as her executors might select. Her two sons were left nothing under the 2nd Will.

22. It was stated in the 2nd Will that it was interpreted to the deceased by Miss Lau in Cantonese and Miss Lau and her secretary Miss Wong Pui Man Rosana had subscribed their names as witnesses. The 2nd Will was executed when the deceased was on home leave and she was examined there by Dr. Hui who issued a certificate stating that the deceased that day was "alert and orientated in time and space, and is of sound mind".

23. Also on 6 September 1990, the defendant, Mrs. Hsu and three other friends of the deceased contributed a total sum of HK$100,000.00 which was deposited with Messrs. Fan & Fan for the benefit of the deceased. Payments were made out of this fund for the daily and medical expenses of the deceased until she passed away.

24. On 15 September 1990, Messrs. Fan & Fan wrote to Messrs. Chan, Lau & Wai stating that they had been informed that the plaintiff would approach the deceased for the execution of certain documents and putting on record that any document intended for the deceased's signature should first be forwarded to Messrs. Fan & Fan as her solicitors for approval. There was no reply to this letter and the deceased did not sign any document subsequently.

The legal proceedings

25. Less than a month after the deceased's death and on 15 October 1990, Messrs. Chan, Lau & Wai wrote to Messrs. Fan & Fan asking for a copy of the 2nd Will. Messrs. Fan & Fan declined to supply a copy, as the plaintiff was not a beneficiary or an executor. Further letters were received from the plaintiff's solicitors in November 1990 stating that they had instructions to issue a writ to challenge the validity of the 2nd Will and asking to be provided with a copy of it so that the plaintiff could proceed with his intended probate action without delay. Messrs. Fan & Fan did not give a substantive reply and they ceased to act for the executors in early 1991.

26. Estate duty clearance was obtained only in 1995 and the defendant applied for probate of the 2nd Will on 18 March 1995. As a caveat had been filed by the plaintiff and Walter in January 1995, a warning to caveator was filed by the defendant to which the plaintiff and Walter entered an appearance in May 1995 claiming that they were the executors of the 1st Will and that they disputed the validity of the 2nd Will. On 8 May 1996, the defendant and Tony brought the probate action against the plaintiff and Walter. By then, Lau had passed away on 12 November 1995. Only the plaintiff had taken an active part in contesting the probate action. He made a counterclaim seeking probate of the 1st Will to be granted to him.

27. Whilst the probate action was going on, Walter had brought two actions against the plaintiff, which were consolidated. They were High Court Action No. 12972 of 1995 and High Court Action No. 1678 of 1997. Walter claimed repayment of a loan of US$100,000.00 in 1995 and a declaration that he was the beneficial owner of a car parking space registered in the plaintiff's name in 1993. In his defence and counterclaim, the plaintiff alleged that the claims of Walter were to be set off against a loan of US$400,000.00 he had made to Walter on 28 June 1990; alternatively Walter was obliged to return the said sum to him as money had and received. The sum of US$400,000.00 was the money paid into the Luxembourg account controlled by Walter. The plaintiff did not give evidence at the trial before Hartmann J. in June 1998. The Judge found against the plaintiff and held that when he caused the deceased to remit HK$7.5 million to Walter's account and his Canadian account on 29 June 1990, the money had still belonged to the deceased. It was held that when the deceased transferred substantial sums to the plaintiff in April and May 1990, it was with the intention that the money was to be held by the plaintiff on trust for her and not as outright gifts. The judge accepted the evidence of Walter that once the deceased was aware of the remittance of US$400,000.00 to Walter, she ratified that as a gift to him in a telephone conversation she had with Walter in late July 1990, in the presence of the plaintiff. The plaintiff was found liable to Walter and his counterclaim was dismissed.

28. The probate action was compromised by an order made by consent on 13 October 1999. By that order, probate of the 2nd Will was granted to the defendant and the counterclaim of the plaintiff was dismissed. On 11 January 2000, a grant of probate of the 2nd Will was made to the defendant. It would appear from the schedule of property annexed to the grant that the deceased's half share in the Property was the only asset of value.

29. Shortly after the probate action was settled and on 29 October 1999, the plaintiff brought the present action against the defendant as the executrix of the estate of the deceased claiming the reliefs that I have mentioned.

The witnesses

30. The plaintiff gave evidence in English. The maid Tessie was not called, as she could not be found. A hearsay notice was served in respect of a letter written by Tessie to Dr. Hui on 22 July 1992 and two letters written by her to the plaintiff on 7 March 1995 and 30 April 1997 in which she gave descriptions of the deceased's physical and mental condition in the last few months of her life and the circumstances in which the Notice of Severance and the 2nd Will had come to be executed. Tessie had stated in one of her letters that she did not understand Chinese. It would appear that Tessie had communicated with the deceased in English.

31. The only other witness for the plaintiff was Professor Julian Critchley, professor of clinical pharmacology at the Chinese University of Hong Kong, who had provided two expert reports on the effect of a drug called Halcion which the deceased had taken regularly before her death as a hypnotic and painkiller. In short, Professor Critchley's expert opinion is that consumption of Halcion on a regular basis would impair cognitive ability and that the deceased's mental ability was impaired to a substantial degree as a result of the high dosage taken on a regular basis and the increased effect of the drug on her due to her age, her small stature, and her debilitated condition as she was suffering from terminal cancer.

32. The defendant called Dr. Mak Ki Yan, who is a psychiatrist, as well as Dr. Hui who had treated the deceased in QMH and given certificates on her mental condition when she executed the Notice of Severance and the 2nd Will. Miss Lau and the defendant also gave evidence.

The consumption of Halcion

33. I will first deal with the evidence on the consumption of Halcion by the deceased before I turn to the expert evidence on the effect of regular dosage.

34. According to a memo issued by the Tung Wah Hospital dated 31 July 1990, the drugs prescribed to the deceased at that time when she was terminally ill were 1 milligram Halcion taken at night and a tablet of Maxolon to be taken three times a day as and when required. Maxolon is a drug to reduce nausea. In his oral evidence, Dr. Hui stated that the deceased was given Halcion since April 1990 but he cannot recall whether she was already given 1 mg dosage nocte at that time. He prescribed that dosage to the deceased for maximum symptomatic relief because she was in an advanced stage of cancer.

35. There is evidence from Tessie and the plaintiff that the deceased had been taking high doses of Halcion in 1990. Tessie mentioned in her letter to Dr. Hui in 1992 that the deceased "took Halcion 0.5 mg, eight tablets a day", which was three times above her prescribed dosage, but did not mention when this had started. In her letter to the plaintiff in 1997, she stated that the night before the deceased signed the 2nd Will, the deceased had taken eight tablets.

36. According to the first witness statement of the plaintiff in March 2000, the deceased was prescribed Halcion by Dr. Hui when she was admitted to hospital in great pain. He stated that he learned from Tessie's letter to him in 1997 that the deceased had taken up to eight tablets a day and was still unable to sleep. He also mentioned that when the deceased was out of hospital, Tessie had gone to the chemist to buy Halcion for his mother. It should be noted in the long and rambling letters of Tessie, she did not mention that she had ever bought Halcion for the deceased.

37. In the plaintiff's supplemental witness statement which was made a week before the trial, he mentioned for the first time that he had bought Halcion for the deceased at her request and that the deceased had stored four to five bottles of Halcion in the kitchen. He added that he was concerned about the intake of Halcion when the deceased was in QMH and he requested Dr. Hui to issue a memo to certify that the deceased was taking a dosage of 1 mg. per day as treatment. The memo he referred to would appear to be the memo of the Tung Wah Hospital dated 31 July 1990.

38. In the plaintiff's evidence in chief, he explained that the memo of the Tung Wah Hospital, which I have mentioned above, was issued at his request. However, a different reason was given as to why he had asked for the memo and that was because he wanted to obtain evidence as he had learned that the defendant and Lau were acting in concert to obtain some money from the deceased for Lau to return to Shanghai. Under cross-examination, he said that the memo issued by Dr. Hui at his request was issued on 28 June 1990, in which no mention was made of the intake of Halcion. It is unclear from his evidence if he had asked Dr. Hui to issue a memo on two occasions. The plaintiff also mentioned in his oral evidence that he had seen the deceased tipping Halcion tablets out of a bottle without counting and that she must have taken 10 tablets or more on that occasion. He said the last time he saw the deceased taking Halcion from a bottle was when the deceased was staying at home in late June 1990. Again, this is something he had never mentioned in any of his witness statements and is contradictory to his first statement in which he stated that he learned from Tessie's letter to him in April 1997 that the deceased had taken "up to 8 1 mg Halcion tablets."

39. I should also mention that according to a schedule prepared by the plaintiff's legal advisers of the expenses that the plaintiff had paid on behalf of the deceased and her estate from February 1989 to December 1991, there was one item of expenses for HK$6,000.00 being a cheque dated 9 September 1990 payable to the owner of a dispensary in Happy Valley. The cheque was not produced although the plaintiff had produced some of the other cheques referred to in the schedule. The purpose of the cheque as described in the schedule was "purchase of Halcion and other pharmaceutical products for [the deceased]". It is not clear how much of the HK$6,000.00 was for the purchase of Halcion. The schedule was not disputed by the defendant. The plaintiff said in his evidence that he had purchased Halcion "several times" for the deceased from a pharmacy and that it cost HK$300.00 a bottle with 100 tablets, but there was no other item in the schedule of expenses for the purchase of Halcion by the plaintiff.

40. There is yet another account given by the plaintiff regarding the deceased's consumption of Halcion and that is in his letter to the defendant dated 21 February 1996. He stated in that letter that "as [the deceased] was seriously ill and Dr. Hui listened to her, and gave her a lot of Halcion" and he would appear to have blamed the doctor that the deceased was prescribed too much Halcion. He did not mention that he or the maid had bought Halcion for the deceased without the doctor's prescription. He also referred to a letter of Tessie in which she mentioned that the deceased "had once taken 20 pills at one time but still could not sleep." There was no mention in any of Tessie's letters produced by the plaintiff that the deceased had taken as many as 20 tablets on one occasion.

41. Tessie's evidence adduced under a hearsay notice must be looked at with some caution. From the tone and language of her letter to Dr. Hui, she can hardly be considered a non-partisan witness. I do not regard her evidence on the deceased's consumption of Halcion as satisfactory. I have considerable doubt if she could truly recall in 1997 that on the evening before the execution of the 2nd Will, the deceased had taken eight tablets. As for the statement in her letter in 1992 that the deceased took eight tablets a day, it is not clear as from when, how often and over what period the deceased had been doing this. I cannot attach weight and importance to such a vague statement. As for the plaintiff's evidence in this respect, in view of his contradictions, alterations and the different versions he gave at different times, I am unable to accept his evidence either.

42. I would only accept the unchallenged documentary evidence in the form of the memo from the Tung Wah Hospital that from about the end of July 1990 at least and up to the material time when the deceased executed the Notice of Severance on 31 August 1990, the regular dosage of the deceased was 1 mg Halcion per day. It must also be remembered that from 6 July 1990 up to the time of her death in September 1990, the deceased was continuously hospitalised save for two days of home leave which were after 31 August 1990, so there should have been little opportunity for her as an in-patient to take Halcion tablets grossly in excess of the prescribed dosage. There was no suggestion in the evidence of the plaintiff or of Tessie that there was drug abuse by the deceased when she was hospitalised. What was alleged was that the deceased had taken high dosages when she was not in hospital.

The effect of Halcion

43. The unchallenged evidence of Professor Critchley on the adverse effect of Halcion may be summarized as follows:

(1) Halcion, the brand name for triazolam, is used as a hypnotic in the short-term management of insomnia. It is used in doses of 0.125 to 0.25 mg at night and doses of 0.5 mg at night have been used for resistant cases. It is short acting in that it is rapidly and nearly completely absorbed from the gastrointestinal tract, peak plasma concentrations being achieved within two hours of administration by mouth. It has a plasma elimination half-life ranging from 1.5 to 5.5 hours.

(2) Despite controversy in the scientific literature regarding the severity of adverse effects of Halcion, there is no doubt that it can produce adverse reactions including fatigue, ataxia, euphoria, inco-ordination, drowsiness, agitation, paranoia, confusion and amnesia interfering with cognition. It has an acute amnesic profile.

(3) The effect of the drug on the mind can be very insidious in that the individual will often be unaware of the changes and he can appear superficially normal to outsiders.

(4) Triazalom psychosis, characterised by paranoid symptoms and/or visual, auditory, and tactile hallucinations, has been reported following therapeutic doses of 0.125 to 0.25 mg of the drug and is felt to be an idiosyncratic adverse effect.

(5) Some of Halcion's adverse effects are dose related. A toxic dose may be no more than three to four times its maximum recommended dose.

(6) The effect of Halcion increases where the patient is elderly, or is of low body weight, or is debilitated, as is often the case with patients suffering from terminal cancer, because of their increased sensitivity to the drug and reduced clearance of the drug from the liver.

(7) In the U.S., the maximum recommended dose was lowered from 0.5 mg to 0.25 mg in October 1987. In 1992, the Food and Drug Administration in the U.S. announced that the packet labelling should be reviewed to make sure that it emphasised adequately "low-dose, short-term use and the need to reduce the dose from 0.25 mg allowed for most adults to 0.125 mg for elderly or small stature (100 pounds) patients, as well as the occurrence of next-day anxiety in patients in clinical trials."

(8) It was withdrawn from the market in the U.K. in October 1991 due to concerns about the frequency of reported adverse effects. It was suspended in the Netherlands for a time and re-approved in 1990. It is now classified as a dangerous drug in Hong Kong.

(9) The effects of Halcion on mental function have been a cause for concern. Opinion still remains divided over the relative severity of the adverse effects of the drug and whether its risk-benefit ratio is acceptable to justify its continued use.

44. As for the effect of Halcion on the deceased specifically, that part of Professor Critchley's evidence, which was not challenged by the other medical experts, may be stated as follows:

(1) The dosage of 1 mg per day is a high dosage for the deceased, in view of her physical condition at the time and the terminal stage of her illness. Maxolon, which was prescribed to her as well, would have magnified the effect of Halcion because Maxolon tends to help the motility of the gastrointestinal tract.

(2) The deceased would have an onset of symptoms with a regular dose after a few weeks, and given her condition, she would be even more sensitive to the effect of the drug.

(3) The very basic motor functions of the deceased would not be affected so she was able to carry on with the activities of daily living. Her ability to think, to make rational judgments, to weigh up and balance things would certainly be impaired.

45. To what extent and degree the cognitive ability of the deceased was impaired by the intake of Halcion so as to affect her mental capacity in executing the Notice of Severance is a matter for this court to decide.

46. I should mention that although Dr. Hui had issued two certificates certifying that the deceased was of sound mind on the occasions when she executed the Notice of Severance and the 2nd Will, Dr. Hui has since qualified his opinion in two respects. Firstly, he accepted that the questions he had put to the deceased to check her mental condition were merely designed to ascertain if she was orientated in time and space. He had asked the deceased her name and his name; he tested her ability in recognizing people, such as the nurses who looked after her; and he checked her ability in the recollection of recent events, such as the food she had eaten the day before. Professor Critchley did not think this was a reliable test of the cognitive ability of the deceased because there was no test of her reasoning ability. I agree with Professor Critchley. Secondly, Dr. Hui has made a subsequent statement, on the advice of his solicitors, that his assessment in 1990 that the deceased was of sound mind must be considered against the background that the side effects of Halcion were not well known at that time. With the benefit of subsequent knowledge of these side effects and having read Professor Critchley's report, Dr. Hui's revised opinion is that he "cannot now exclude the possibility that [the deceased] only appeared [to be of sound mind] when in fact she was not due to the influence of Halcion."

47. There are four matters in which the medical experts do not agree with one another.

48. The first matter relates to the cause and effect of the secondary metastasis in the brain that the deceased might have suffered with the dissemination of the oesophageal cancer. Professor Critchley was of the view that Halcion could be responsible for triggering an epileptic fit of the deceased in July 1990, this would indicate some spread of the cancer to the brain and the secondary metastasis would have a profound effect on the cognitive and mental ability of the deceased. Dr. Mak's opinion was that any secondary metastasis could be due to electrolyte imbalance and that secondary metastasis can but does not always affect the mental condition, depending on the site of the metastasis and the presence of any systematic side effects. If secondary metastasis had affected the mental condition, Dr. Mak reasoned that there should also be physical or neurological deficits like increased intracranial pressure, cranial nerve lesions, etc. that should well be detected by the physicians treating the deceased and there was no evidence that this had occurred. I do not propose to resolve the differences between the experts here because the evidential basis for their views is inadequate. There is no satisfactory evidence that the deceased had suffered an epileptic fit in July 1990 other than the assertion in Tessie's letter to Dr. Hui. Dr. Hui had no recollection that the deceased had an epileptic fit when she was admitted to QMH on 6 July 1990. Whilst Dr. Hui did not rule out the possibility of a secondary metastasis in the brain, he cannot be certain about this because some symptoms might be difficult to pick up clinically and he did not carry out an investigation at the time.

49. The second matter relates to the effectiveness of Halcion on the susceptibility of the deceased to suggestions. Professor Critchley's opinion was that Halcion would make a person suggestible to ideas and it has been used as a date-rape drug in smaller doses. Whilst Dr. Mak agreed with Professor Critchley that Halcion could make the recipient more receptive to ideas when the drug is taken acutely, he was of the opinion that this effect would not be so obvious if the patient had been used to this medication, which was the case of the deceased, unless the patient had taken a mega dose of, say, ten tablets or more. I accept Dr. Mak's evidence on this.

50. The third matter relates to a five-page letter written by the defendant on behalf of the deceased to Walter on 10 September 1990.That letter was apparently written in response to Walter's letter to the deceased dated 31 August 1990. It had a postscript, which was added after the deceased had read the letter. There are some matters in the letter that the defendant could not have known about if the deceased had not told her. One example was the incident in which the plaintiff reported theft to the police of the things that Yau Kit had obtained from the deceased and it was written in the letter that after the report to the police, Yau Kit had returned to the plaintiff among other things five taels of gold and ten gold rings. These returned items tallied with the account in the letter of the police to the plaintiff dated 3 May 1995. Another example was the postscript setting out various items of property that the deceased had given to the plaintiff but still regarded by her as belonging to her, the plaintiff and Walter.

51. Professor Critchley was initially of the view that the letter could not tell him anything about the deceased's level of mental function because it was not written by the deceased or dictated by her notwithstanding that he found the letter to be "amazingly detailed". Later, he accepted that if the deceased did remember the things set out in the letter, this would indicate a remarkable degree of detail and although her reasoning and decision-making ability could still be impaired, the impairment would not be as marked as it might have been because the deceased would appear to have good recall of both short-term and long-term events.

52. Dr. Mak did not agree that he could not draw any conclusion about the deceased's mental condition from the letter. Whilst one should not put any weight on the use of language in that letter, the source and accuracy of the information in the letter would be of some significance if one were satisfied that the information was provided by the deceased and that it was accurate. I agree with Dr. Mak here.

53. The fourth matter relates to the wearing off of the effect of Halcion. In Dr. Mak's opinion, a patient who has been taking Halcion could have lucid intervals in which he could make rational decisions when the dose would wear off. Professor Critchley's view was that with regular dosing, the situation is different because the effect accumulates and for someone whose elimination mechanisms are impaired, as in the case of the deceased, the effect will be exacerbated. I accept Professor Critchley's evidence on this.

Signs of irrational behaviour and mental deterioration

54. I was asked to look at various incidents showing that the deceased did not behave rationally and to compare them with the known symptoms of side effects of Halcion reported in medical literature. It was submitted by Mr. Griffiths, SC on behalf of the plaintiff that these incidents would go to support the plaintiff's case that the mental capacity of the deceased was significantly impaired by her intake of Halcion. Evidence of these incidents was given by the plaintiff and in the letters of Tessie.

55. Firstly, there was the incident concerning Yau Kit that I have described earlier. It is alleged by the plaintiff that a few days after the deceased had made gifts of money, clothes and jewellery to Yau Kit, she changed her mind and sought the assistance of the plaintiff to get Yau Kit to return the gifts and that was why the plaintiff had made a report to the police when he had an argument with Yau Kit about this. It was submitted on behalf of the plaintiff that this sudden change of decision shows unstable conduct of the deceased. I do not accept the plaintiff's evidence that the deceased had changed her mind about making the gifts to Yau Kit for no apparent reason. A reason was supplied in Tessie's letter to the plaintiff dated 30 April 1997. It would appear from that letter that the plaintiff became angry with the deceased when he learned that the deceased had made those gifts to Yau Kit, and that was why the deceased wanted to retrieve the gifts from Yau Kit. I accept Tessie's evidence on this.

56. Next, there was evidence from the plaintiff that on 24 June 1990, the deceased had told the branch manager of the Hang Seng Bank, where she had maintained joint accounts with the plaintiff, to remove the plaintiff's name from all their joint accounts because she disliked the plaintiff. The next day, she changed her mind and asked the manager to keep the plaintiff's name on the joint accounts because she liked him again. The plaintiff claimed he was told by the bank staffs about this on 29 June 1990 when he arranged for the remittance of various sums overseas. The bank staffs were not called to give evidence on this. As I have described earlier, various substantial sums were paid into the deceased's bank account on 29 June 1990 and remitted abroad the same day. If the deceased had behaved in this strange manner as alleged by the plaintiff, I have grave doubts if the bank would have carried out her instructions on 29 June 1990 without seeking additional confirmation from her in writing to protect its position. It does not appear from the plaintiff's evidence that this was done. He merely stated that the remittances were made on 29 June 1990 by the deceased who effected the transfer in the presence of two banking clerks who came to the Property for that purpose. I do not accept the hearsay evidence of the plaintiff that the deceased had given conflicting instructions to her bank regarding his status as a holder of the joint accounts for no apparent reason.

57. It was also said that the deceased had behaved irrationally towards the plaintiff. He was her favourite son all along but she began to hate him for no reason and started to refuse to see him after she had regained consciousness from the seizure on 6 July 1990. This dramatic change of attitude was attributed to the deterioration of the deceased's mental condition due to the side effects of Halcion. Mr. Griffiths has submitted at the outset of his closing submission that it was irrelevant whether the plaintiff was a good son or bad son and whether the deceased was hurt by the plaintiff's behaviour. However, he then submitted that the deceased's hatred of the plaintiff was a sign of her deteriorating mental faculty. If the deceased had indeed hated the plaintiff (assuming for the moment that she did hate him in the last few months of her life), it would be necessary to look at the plaintiff's conduct towards the deceased when she was dying and decide whether she was or must have been hurt by his conduct as that would provide some justification for her to hate her son.

58. There was disagreement between the plaintiff and the deceased regarding the standard of the room in which she was to be accommodated in QMH, whether it was to be the ordinary ward or first class ward. It would also appear that the deceased was unhappy about her transfer from QMH to the Tung Wah Hospital, according to the evidence of Tessie as well as the defendant, which I accept. The disagreement is apparent from the plaintiff's letter to the deceased dated 19 August 1990. In that letter, the plaintiff refused to put the deceased in a first class ward, saying that it was her own fault she had used up her money before she died and claiming that he had no money, notwithstanding that the deceased had transferred substantial sums to him in April and May 1990. The plaintiff admitted that if the deceased were of "sound mind", she would have felt upset about the letter and would have scolded him. He claimed however that he knew the deceased would not be able to read his letter by then and would just have shown the letter to her friends, and hence he had not written the letter for his mother but it was intended for his mother's friends and Lau. I totally reject the plaintiff's evidence. Regardless of whether the plaintiff was justified in turning down his mother's request, there is no reason to think that the deceased would not have been hurt by his behaviour on this alone, not to mention the plaintiff's behaviour regarding the sale of the Property and his reaction after the Notice of Severance was served on him, to be dealt with in the subsequent parts of this judgment. I do not regard the deceased's hatred of her son (assuming without deciding whether there was such hatred, the plaintiff has given conflicting evidence if his mother had hated him) was indicative of the deterioration in her mental condition.

59. The deceased had issued two cash cheques dated 25 June 1990 in the sum of HK$50,000.00 each, which were cashed by Yau Kit. The date on one of them was correct but the other cheque was dated 25 June 1989. A correction for the year was made on the cheque and counter-signed by the deceased. I attach no significance to this, as there is hardly any or any reliable evidence on the circumstances in which the mistake and correction were made.

60. Then it was said that the deceased had changed her mind after making gifts of money totalling US$35,000.00 to Lau. The basis for that allegation was a letter of Walter to the defendant dated 16 September 1990 in which he stated that the deceased had told him and the plaintiff that she regretted giving the money to her brother. I attach no weight to this, not knowing the full circumstances in which the deceased had said that to her sons. I accept the evidence of the defendant that the letter she wrote to Walter dated 10 September 1990 correctly reflected the deceased's intended message to Walter and it was stated in that letter that the US$35,000.00 was given to Lau as his retirement funds to enable him to return to Shanghai.

61. There is also the evidence of Tessie that the deceased had talked nonsense, behaved like a child, stared blankly, and that she could not recognise Tessie at times. The plaintiff gave evidence that the deceased had told him she walked up a mountain and saw Jesus, she had delusions about day and night, and could not recognise him on one occasion. For the reasons I have given earlier, Tessie's evidence must be scrutinised with care. It would appear that in her letter she was describing the deceased's mental condition at the time the 2nd Will was executed, not the deceased's condition when she signed the Notice of Severance. There might well be an element of exaggeration, looking at the emotive language used in her letter. Further, her evidence regarding what happened when the 2nd Will was executed differs in significant aspects from the evidence of the defendant and Miss Lau. This casts doubt as to the accuracy of her recollection. I prefer the evidence of the defendant and Miss Lau in this respect. As for the plaintiff, I have the utmost reservation about his reliability as a witness. I would be very slow to accept his evidence where this is not supported by a reliable source. For the above reasons, I do not propose to attach importance to the evidence of Tessie and the plaintiff relating to incidents of irrational behaviour of the deceased.

62. In assessing whether the deceased did have the requisite mental capacity to execute the Notice of Severance, I find it a much better approach to focus on the circumstances in which this document came to be executed instead of looking at other unrelated incidents of alleged irrational behaviour. Before I examine those circumstances, I should first set out the relevant principles of law relating to mental capacity in this context.

The law relating to the requisite mental capacity

63. It would be convenient to start with this dictum of Hoffmann J. (as he then was) in Re K (Court of Protection) [1988] 1 Ch. 310 at 313F to G:

"It is well established that capacity to perform a juristic act exists when the parties who purported to do the act had at the time the mental capacity, with the assistance of such explanation as he may have been given, to understand the nature and effect of that particular transaction: see In re Beaney, decd. [1978] 1 WLR 770."

64. So what should the deceased have understood about the nature and effect of the Notice of Severance for it to be held that she did or did not have the requisite mental capacity? Some guidance on this is found in the following dicta of Mr. Martin Nourse, QC, then sitting as a deputy judge of the Chancery Division, in Re Beaney:

"The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration of a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor's other assets a low degree of understanding will suffice. But, at the other extreme, if its effect is to dispose of the donor's only asset of value and thus, for practical purposes, to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of." (at 774E to F)

65. In that case, the transaction that was being challenged was the transfer of a property by the donor by way of gift to her eldest daughter, the property being the only asset of value of the donor. It was held that even if the donor did understand that she was making an absolute gift of the property to her daughter, the transfer was void because the degree of understanding required was as high as that required for the execution of a will. The donor did not understand she was in effect disposing of the whole of her estate by the transfer, thus pre-empting the devolution of her estate on intestacy, nor was she explained the claims of all potential beneficiaries in her estate. Further, it was held that on the evidence the donor was not capable of understanding and did not understand that she was making an absolute gift to her daughter, so the transfer was void on that ground as well.

66. It was submitted by Mr. Griffiths that the degree of understanding required for the execution of the Notice of Severance should likewise be as high as that required for a will because the Property was the only asset of value remaining in the estate of the deceased, the transaction disposed of or affected what was effectively the deceased's only asset of value, and the effect of the Notice of Severance on the plaintiff is substantial. It was submitted that if the Notice were valid, this would deprive the plaintiff of half of the interest in the Property. I agree that this would be the case, if the Notice of Severance is considered in conjunction with the 2nd Will, which did not come into existence at the same time as the Notice but was executed six days later, a fact that should not be overlooked. There is no evidence to suggest that the deceased had resolved to make a new will in the terms of the 2nd Will when she executed the Notice of Severance. In fact, all indications from the facts that I find as to what had happened after the Notice of Severance was served on the plaintiff and his reaction thereto, as I will deal with in the subsequent part of this judgment, are to the contrary.

67. There appears to be no decided authority which deals squarely with the degree or extent of understanding required for the validity of a notice given by a co-owner to sever a joint tenancy. Counsel on both sides have not found any such case in their researches, nor have I in my own research.

68. In the written closing submission of Mr. Nelson Miu, who appeared for the defendant, he did not address the question whether the degree and extent of understanding required of the deceased should be as high as that required for the making of a will. When I asked Mr. Miu what should be the degree of understanding required in this instance, he submitted that the deceased should understand that by executing the Notice of Severance, this would mean that she would have a share in the Property and the effect of this was that the Property could not be sold without her approval. She should also understand that after her death, the Property would be distributed in accordance with her existing will, i.e. the 1st Will, so that her two sons would share in the Property.

69. When I put the same question to Mr. Griffiths, he gave a different answer. He submitted that the deceased should have understood the following matters:

(1) what the position was before the execution of the Notice of Severance, namely, that she was a joint tenant and that the Property could not be sold without her permission (he did not deal with the issue if the deceased had given the plaintiff a power of attorney, as I will consider below);

(2) that the interest of a deceased joint tenant would pass to the surviving joint tenant, whereas the interest of a tenant in common would form part of his estate upon his death as there is no right of survivorship;

(3) that if the deceased was to execute the Notice of Severance, this would only affect the position after her death;

(4) that if she was to execute the Notice of Severance, given the terms of the 2nd Will, the effect of this would be to deprive the plaintiff of 50% share in the Property (this is on the assumption that the deceased had contemplated making the 2nd Will when she executed the Notice, which is not borne out by the evidence as I will deal with below); and

(5) that before she executed the Notice, she should have reflected on what her assets were and considered what people in her life might have a call on those assets and whether the effect of signing the Notice would achieve what she felt she should do in respect of her family.

In other words, Mr. Griffiths maintained his submission at the outset that the same degree of understanding for the making of a will is required.

70. I do not find this an easy question to resolve. I think one should ask what is the basis for requiring that the degree of understanding in executing a certain document should be as high as that for the execution of a will. It would seem from the dicta in Re Beaney that the justification lies in that the person signing the particular document would in effect be disposing of his only asset of value, thus pre-empting the devolution of his estate under his will or on intestacy. In the present case, was the deceased disposing of her only asset of value (leaving aside for the time being the defendant's contention that the funds of over HK$7 million transferred by the deceased to the plaintiff in April and May 1990 were not as outright gifts but were to be held by the plaintiff on trust for the deceased) when she executed the Notice of Severance? Mr. Miu submitted that she was preserving her interest in the Property, so that it would not be disposed of in her lifetime against her wishes (I will deal with the circumstances in which the Notice was executed in the next part of this judgment). The deceased was merely severing her interest as a joint tenant, she had not effected any inter vivos disposition of her interest which was severed. Her interest as severed would be disposed of upon her death in accordance with her existing will, i.e. the 1st Will. I am inclined to agree with his submissions. Looked at in this manner, I do not see the justification for requiring the standard of mental capacity for executing the Notice of Severance in the particular circumstances of this case to be as high as the standard required for a will.

71. Mr. Griffiths no doubt has chosen his words carefully when he submitted that where the transaction "disposes of (or affects)" what is the donor's only asset of value, the degree of understanding required should be as high as that required for making a will. Unlike the words "disposes of", the word "affects" has a degree of ambiguity about it. The transaction might have affected materially the donor's only asset of value; it might also have affected the asset in a minor way. No doubt, the Notice of Severance did affect the Property, which was the only asset of value registered in the name of the deceased and within her control, but was her interest in the Property affected in such a material way to require the level of understanding to be the same as that for the making of a will? For the reasons I have given above, I am not persuaded that the degree of understanding required should be the same.

72. Having come to the view that the level of understanding required should not be as high as that for making a will, the next question is what should be the appropriate degree of understanding in the circumstances of this case. The judge in Re Beaney spoke of two extremes. At one extreme are cases where "the subject matter and value of a gift are trivial in relation to the donor's other assets" so that "a low degree of understanding will suffice". At the other extreme are transactions the effect of which would be "to dispose of the donor's only asset of value and thus, for practical purposes, to pre-empt the devolution of his estate under his will or on his intestacy", so that "the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of." The present case does not fall within either extreme, it would fall somewhere in between. As Rimer J. has commented in Re Morris, decd., Special Trustees for Great Ormond Street Hospital for Children v. Rushin and Ors., (Chancery Division, 19 April 2000, Lexis transcript), a sliding degree of capacity would appear to have been envisaged in the dicta in Re Beaney and this does not seem easy to apply. In my judgment, it is apparent from the dicta in Re Beaney that the mental capacity required for the execution of a particular document is relative to the nature and circumstances of the transaction effected by the instrument. Hence, to ascertain what should be the appropriate degree of understanding required, one should look at the circumstances and the reasons why the transaction was effected and to these matters I will now turn.

The circumstances in which the Notice of Severance was executed

73. Evidence on the circumstances in which the Notice of Severance came to be executed came from Miss Lau primarily. Her evidence on this was virtually unchallenged. I am satisfied that she is a truthful witness and I have no hesitation in accepting her evidence here.

74. Miss Lau did not know who had obtained instructions and from whom to prepare a Notice of Severance in respect of the Property. She knew that a partner of Messrs. Fan & Fan, Miss Susan Y.L. Lee, had seen the deceased in QMH before she went there on 31 August 1990. Miss Lau was instructed to go to the hospital by Mr. Fan to attend to the execution of the Notice by the deceased. According to Miss Lau, she arrived in the hospital that day with Mrs. Fan and saw the deceased and Lau. Before her arrival, someone had already arranged for Dr. Hui to examine the deceased for the purpose of certifying her mental condition that day. Miss Lau was told that estate agents had brought potential purchasers to view the Property while the deceased was in hospital. She cannot recall who gave her this information. She did remember that the deceased had shown her a letter from the plaintiff dated 19 August 1990, which I have mentioned above.

75. Miss Lau spoke to the deceased in Cantonese and she found that the deceased could carry on an ordinary conversation with her. She asked the deceased if it was her intention to sever the joint tenancy she had with the plaintiff so that they would hold the Property as tenants in common and explained to the deceased the effect of the severance would be from then onwards, the deceased would own half of the Property and the plaintiff would own the other half. The deceased answered yes. The deceased told Miss Lau she was worried that the plaintiff would dispose of the Property and she would be abandoned, and that her worry was based in part on the plaintiff's letter to her dated 19 August 1990. Further, the deceased said she was unable to remember if she had executed a power of attorney appointing the plaintiff to be her attorney in respect of the Property. After Miss Lau had explained to the deceased the contents of the Notice of Severance and the letter of Messrs. Fan & Fan to the plaintiff dated 31 August 1990, the deceased wrote in her own hand on a copy of each document some characters to the effect that she had understood and agreed with the contents of each document. The deceased asked Miss Lau to assure her whether the letter of Messrs. Fan & Fan and the Notice would be effective in preventing the plaintiff from disposing of the Property.

76. In my judgment, the Notice of Severance must be read with the letter of Messrs. Fan & Fan to ascertain the reason and circumstances why the document was executed. I find that the deceased had a real concern that the Property might be sold by the plaintiff before her death without her agreement. Her concern was not without basis. Firstly, I find that she had given a power of attorney to the plaintiff giving him authority to sell the Property on her behalf. When the plaintiff was asked about the existence of such a power of attorney in cross-examination, his answers were typically evasive. At first he said he did not know about this question. Then he said he could not recall that the deceased had signed a power of attorney in a solicitors firm. Later he said the deceased had probably misunderstood that her joint tenancy with him was a power of attorney. His evidence in this court was contradicted by his own pleading in the probate action in which it was clearly stated that the deceased had given him a power of attorney to deal with the Property. Secondly, I find that the plaintiff had made attempts to sell the Property and had given permission to estate agents to arrange for viewing of the Property by prospective buyers. I reject the plaintiff's evidence that he had no intention and made no attempts to sell the Property when his mother was still in hospital. It is telling that the letters of Messrs. Fan & Fan to him and to his solicitors dated 31 August 1990 stating that Messrs. Fan & Fan were instructed that he had intentions to sell the Property and to that end had arranged for estate agents and prospective buyers to inspect the premises were never answered. It is not without significance that in Tessie's letter to Dr. Hui dated 22 July 1992, she had understood that the plaintiff and Walter had agreed to sell the Property when the deceased was in hospital, whilst also stating that the money would be used to finance the deceased's hospital fees and funeral expenses. Further, it would appear from Walter's letter to the defendant dated 16 September 1990 that the plaintiff had expressed to Walter his intention to sell the Property and Walter had advised him not to rush into a deal. I have no reason to think that both Tessie and Walter were mistaken about the plaintiff's intention to sell the Property.

77. I find that the reasons for and the objective of the Notice of Severance were primarily to preserve the interest of the deceased in the Property so that it would not be disposed of without her consent during her lifetime. That the plaintiff's entitlement to the Property when the deceased passed away would be changed from the entire interest in the Property to a 75% interest in it (under the terms of the 1st Will, the plaintiff and Walter would have shared equally in the half share of the deceased in the Property) was of secondary concern. Hence, I am of the view that the degree of understanding required on the part of the deceased was that she should understand the primary reason and objective of the Notice of Severance. She should also understand the effect of the Notice of Severance on the devolution of her half share in the Property upon her death. It is not necessary that the deceased should also have a comprehensive understanding of her overall financial position at the time and appreciated the competing claims of all potential donees upon her bounty.

The circumstances in which the 2nd Will was executed

78. I am not concerned with the question whether the deceased did have the requisite mental capacity when she executed the 2nd Will. I need however to resolve the question whether she had resolved on making a new will in the terms of the 2nd Will when she executed the Notice of Severance, as this might constitute part of the circumstances in which the Notice came into being and would thereby affect the degree of understanding she should have of the transaction.

79. As I have found earlier, the deceased's worry that the Property would be sold and she would be abandoned was based in part on the plaintiff's letter to her dated 19 August 1990, the gist of which I have stated earlier. Miss Lau only received instructions to attend the deceased to take instructions from her for preparing a will on 5 September 1990. I find that what had happened after the Notice and the letters of Messrs. Fan & Fan were served on the plaintiff on 31 August 1990 and 5 September 1990 were as follows.

80. The plaintiff made no reply to the matters alleged against him in the letters of Messrs. Fan & Fan. However, he informed Walter that he was involved in litigation with the deceased, which caused Walter to write to the deceased on 31 August 1990. I do not accept his denial, as Walter would not have been so misinformed but for him. He immediately stopped paying all the expenses of the deceased, as was stated in the letter dated 10 September 1990 written by the defendant on behalf of the deceased to Walter, in response to Walter's letter of 31 August. I accept the evidence of the defendant that she and a few friends of the deceased had put up a trust fund of HK$100,000.00 on 6 September 1990 because the plaintiff had refused to pay for his mother's expenses after he received the Notice of Severance. I reject the plaintiff's evidence that it was "totally unnecessary" for his mother's friends to put up a trust fund or that it was "pure posturing". The plaintiff's refusal to pay his mother's expenses was also consistent with a note written by him to the deceased dated 2 September 1990 in which he stated that he promised to return all the cash to the deceased provided that she could get back the US$35,000.00 she had given to Lau.

81. I find that the deceased gave instructions to prepare a new will as a result of the happenings after the Notice of Severance was served on the plaintiff and she had not intended to make a new will when she executed the Notice of Severance.

Whether the deceased did have the requisite mental capacity

82. I accept the evidence of Miss Lau as to the conversation she had with the deceased before and after the execution of the Notice of Severance. From what the deceased had told Miss Lau, I am satisfied that she understood the primary purpose why she was to sever her joint tenancy with the plaintiff. It did not appear from the evidence of Miss Lau that she had explained to the deceased what would be the effect of the Notice of Severance on the devolution of her half share in the Property upon her death. There is however evidence in the letter of Tessie to the plaintiff dated 30 April 1997 that she had asked the deceased in QMH what was written in the "new document" received from Messrs. Fan & Fan before she read it to the deceased. According to Tessie, the deceased had told her the effect of the document was that the Property "was still hers as the owner, while she was alive, and that, when she dies it will automatically given [sic] to her two sons." Tessie was amazed by the deceased's statement, because that was not what written in the document exactly. I accept Tessie's evidence here, it has the ring of truth about it. I find that the document referred to was the Notice of Severance and that the deceased had understood the effect of it was that she would have an interest in the Property and upon her death, her interest in the Property would be bequeathed to the plaintiff and Walter, in accordance with the terms of the 1st Will. I also wish to say that the transaction effected by the Notice of Severance was entirely rational and prudent, in view of the real concerns of the deceased to protect her interest in the Property. Accordingly, I am of the view that notwithstanding that the deceased's cognitive ability was impaired by her consumption of Halcion, she did have sufficient understanding of the nature and effect of the transaction effected by the Notice of Severance to endow her with the requisite mental capacity.

Lucid interval and presumption

83. I was referred by Mr. Griffiths to the proposition that if during a period prior to the execution of a will the testator suffered from serious mental illness, a presumption arises that it continued, and the burden is then on the person propounding the will to rebut the presumption by establishing that the testator made the will during a lucid interval or after recovery from the mental illness. It was submitted that this proposition would apply to the present case. It is unnecessary for me to come to a conclusion if the proposition is applicable here. If there were an evidential burden for the defendant to discharge, I am satisfied that this has been discharged by the defendant, in view of the conclusion that I have reached on the evidence that the deceased did have sufficient understanding of the nature and effect of the transaction when she executed the Notice of Severance.

Undue influence

84. I turn to consider the plaintiff's case that the Notice of Severance should be set aside on the ground that it was procured by undue influence of the defendant.

85. The plaintiff's case as presented by Mr. Griffiths may be summarised as follows. It is alleged that the deceased was in a very vulnerable and impressionable condition in her state of terminal illness. Moreover, she was under the adverse effects of Halcion, including paranoia, anxiety, confusion, anxiety and agitation. The deceased reposed trust and confidence in the defendant, a medical doctor (although not the deceased's treating doctor), as the defendant had undertaken to look after her medical needs during her hospitalisation in QMH. In support of the allegation that trust and confidence was reposed in the defendant, the plaintiff pointed to the fact that the deceased had divulged personal information to the defendant including her financial and family matters, and details of her joint tenancy with the plaintiff in the Property. Furthermore, the defendant was appointed one of the executors under the 2nd Will.

86. As to the allegations that the Notice of Severance was procured by the undue influence of the defendant, the plaintiff relies on the following. Mr. and Mrs. Fan were introduced to the deceased by the defendant, they were the defendant's friends. The defendant and her friends worked on the deceased's vulnerable state of mind and had induced the deceased to believe that

(1) the plaintiff had caused the deceased to stay in a third class ward in QMH and to transfer her to the Tung Wah Hospital because he did not want to spend money on his mother having received his inheritance;

(2) the plaintiff had attempted to sell the Property when the deceased was in hospital; and

(3) the plaintiff was a bad son.

All these were falsehoods, according to the plaintiff. It was under those circumstances that the deceased had executed the Notice of Severance.

87. It is not entirely clear from Mr. Griffiths' submission if the plaintiff is relying on actual undue influence. If he is, there is no evidence of this. In the case of actual undue influence, it is necessary for the plaintiff to establish affirmatively that the deceased had executed the Notice of Severance not of her own free will but as a result of actual undue influence exerted against her. In view of my findings as to the circumstances in which the Notice was executed and my findings below on the defendant's total lack of involvement in the preparation of the Notice of Severance, this allegation fails completely.

88. If the plaintiff is relying on presumed undue influence, he would need to establish the existence of a relationship of trust and confidence between the defendant and the deceased of such a nature that it is fair to presume that the defendant abused the relationship in procuring the deceased to execute the Notice of Severance. Only when such relationship is established that the burden shifts to the defendant to prove that the deceased entered into the transaction as a result of the free exercise of her independent will.

89. The relationship between the defendant and the deceased does not come within one of the recognised relationships that would be irrefutably presumed by law as a relationship of trust and confidence. I am not satisfied on the evidence that in the last few months of the deceased's life, she was accustomed to repose a sufficient degree of trust and confidence in the defendant to give rise to the presumption. Although they were old friends, the deceased and the defendant did not meet very often because of the defendant's professional commitment. It was only after the deceased was admitted to QMH in 1990 that the defendant had visited the deceased whenever she could as she was working there. She was just one of the friends who comforted the deceased in her last days. Lau had also visited the deceased often in hospital. She did not assume an unusual importance in the life of the deceased, nor was the deceased dependent on the defendant for her daily needs. The defendant left Hong Kong for four weeks on 28 July 1990. I accept her evidence she had no involvement when the Notice of Severance was executed and she was only informed about this by Mrs. Fan after her return to Hong Kong. Moreover, even if there were a relationship of trust and confidence, the defendant did not abuse that relationship in that the transaction effected by the Notice of Severance did not result in some unfair advantage to the defendant at the expense of the deceased. As I have found, the transaction was rational and prudent and it was to protect the deceased's interest in the Property.

90. For the above reasons, I reject the plaintiff's case on undue influence.

Reimbursement of expenses

91. As I have stated earlier, there is no dispute that the plaintiff had paid HK$1,173,627.02 for and on behalf of the deceased. The issues arising in his claim for reimbursement of this sum are:

(1) whether the deceased had requested the plaintiff to pay her expenses on the express or implied understanding that he would be reimbursed by her or by her estate; and

(2) if the answer to (1) is yes, whether the plaintiff should reimburse himself out of the funds of over HK$7 million which the deceased had transferred to him in April and May 1990 not as an outright gift but to be held by him on trust for her.

92. The plaintiff's evidence is that by February 1989, the deceased could no longer handle her own financial affairs including her household and medical expenses. She began to hand over all her utility and other bills to the plaintiff and asked him to deal with them for her. She told the plaintiff specifically, "From now onwards, everything you pay I owe you." It was understood by the plaintiff and the deceased that the amounts he had paid out for her would be a "family loan" and the plaintiff endeavoured to, and did, keep most of the bills, receipts and vouchers to show what he had paid. The payments were made from three bank accounts, two were in the sole name of the plaintiff, the other was a joint account in the names of the deceased and the plaintiff. It is alleged that all payments made for the benefit of the deceased were paid out of the plaintiff's own funds, which were derived in part from the transfers by the deceased to him by way of gift (this is disputed by the defendant). These payments covered all the daily needs of the deceased.

93. It is not in dispute that the deceased had considerable funds in her bank accounts in 1989 and that she added the plaintiff as a joint holder to some of her accounts in that year. If she had indeed made the promise to the plaintiff to reimburse him for the expenses he paid, or if there was indeed an understanding between them that he would be reimbursed, there is no good reason why the plaintiff did not do so in 1989 or in any event prior to April 1990 from the substantial funds in the joint names as he was an authorised signatory. His claim for reimbursement was made for the first time in this action, in October 1999.

94. In April and May 1990, over HK$7 million were transferred from the joint accounts to the plaintiff's own account, leaving the deceased with virtually no money of her own. The plaintiff initially admitted that the transfers were executed by him (he later altered his evidence and said it was the deceased who had instructed the bank manager to transfer the funds to him in April 1990). When he was asked if he had told the deceased he was transferring the funds to his own account, he evaded the question and said that the deceased had told him to do so in 1988, that would be before she had added his name as a joint account holder. When he was pressed for a reason why the transfers were made only in April or May 1990, he said he had a feeling that his mother was not going to live that year and he did not know why he made the transfers in 1990. If these sums were indeed gifts to the plaintiff, as he has alleged, it is unreal to suggest that both the deceased and the plaintiff would have acted or continued to act on the understanding that whatever he paid, she would owe him as both would know that the deceased would have no money or assets to repay. If these sums were not gifts to the plaintiff but were to be held by him on trust for the deceased, then he should reimburse himself out of the trust funds if there was any promise or understanding for reimbursement, as contended by the defendant.

95. The plaintiff was asked by his counsel to expand on his assertion in his witness statements that his mother had made him the express promise to reimburse him. He said the reason why his mother had made that promise was because she was afraid that her brothers would harm him and ask him for money after she died and also because her friends were "vultures and hyenas" and "fair weather friends". Hence, she wanted to make sure that every cent he had paid for her, she would owe him. He repeated that answer in cross-examination. This assertion simply defies belief.

96. For the above reasons, I reject the plaintiff's evidence that there was any express or implied understanding between him and the deceased that he would receive reimbursement as he claims. It is not necessary for me to make a definite finding whether the amounts transferred out of the joint accounts in April and May 1990 were gifts to the plaintiff or to be held by him on trust for the deceased. I decline to make a finding on this, despite my dissatisfaction with the plaintiff's evidence about the reasons for the transfer, as I realize that there was material evidence adduced before Hartmann J. in Walter's action against the plaintiff in 1998, including a letter written by the deceased to Walter dated 26 June 1990 and the evidence of Walter on the deceased's ratification of a gift of US$400,000.00 to him, not adduced in evidence in this trial. The defendant's legal advisers had proceeded on the basis that the findings of Hartmann J. in that action that the money had still belonged to the deceased when two remittances were made from her account on 29 June 1990 and that part of the remittance to Walter was ratified as a gift would be binding on the plaintiff in this action. It was only in the supplemental closing submission of the defendant, given the day after the conclusion of this trial, that the concession was rightly made that the rulings of Hartmann J. are not binding on the plaintiff in this action.

97. For the above reasons, I reject the plaintiff's claim for reimbursement from the deceased's estate.

Conclusion and orders

98. I dismiss the plaintiff's claim for a declaration that the Notice of Severance is not valid and binding and his claim for reimbursement of HK$1,173,627.02 from the deceased's estate. I give judgment for the defendant on the claim.

99. The defendant counterclaims for an order of account and enquiry of the mesne profits of the Property on the basis that the Property has been under the charge, in the possession and use of the plaintiff since the death of the deceased and no account has been rendered by the plaintiff to the defendant as to the mesne profits and income of the Property. As I have mentioned at the outset, the plaintiff admits that he entered into occupation of the Property in July 1991. That was still his address when he gave evidence at this trial. There is no evidence that he has ever let the Property or any part of it. As a tenant in common of the Property, he enjoys the right to possession of the Property with the other tenant in common. The occupation is undivided, and neither owner can claim a separate part except by obtaining a partition order. A tenant in common not in occupation may not claim rent from a tenant in common who is in occupation of the whole property (Jones (AE) v. Jones (FW) [1977] 1 WLR 438). If the property is let to a stranger and one tenant in common has received more than his share of the rents and profits, he is liable to account to the other co-owner. There is however no evidence that the Property has ever been let. I dismiss the defendant's counterclaim for an account and enquiry.

100. As for the defendant's counterclaim for an order for sale of the Property under section 6 of the Partition Ordinance, Cap. 352, I propose to adjourn this to chambers as I would need to be satisfied that the procedural requirements for the institution of proceedings under Cap. 352 have been complied with. Further, I have heard no submissions as to whether an order for sale should be made. I also give the parties liberty to apply for necessary and consequential directions relating to an order for sale in the adjourned hearing.

101. I make an order nisi that the defendant is to have the costs of this action, to be taxed if not agreed.