LAU WAI BING v. CHOI MAN LAI, the Administratrix of the Estate of LAU WAI YIN, Deceased

DCCJ 2399/2020

[2023] HKDC 1389

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO 2399 OF 2020

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BETWEEN

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JUDGMENT

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A. Overview

1.  This is the trial hearing of the claim of the plaintiff (“P”) for, amongst others, HK$2 million from the estate of her younger brother, Mr Lau Wai Yin, deceased (the “Deceased”). On 15 December 2018, the Deceased passed away in Pok Oi Hospital at the age of 62 due to pneumonia and myocardial infarction. The defendant (“D”) is the widow of the Deceased and the administratrix of the estate of the Deceased.

2.  On 11 February 2016, the Deceased won the 1^st prize of the Hong Kong Mark Six in the amount of HK$54,916,660. The said sum was paid into the Deceased’s bank account at Bank of China (“BOC”) (the “BOC Account”) on 18 February 2016. On 22 February 2016, the Deceased used the money in the BOC Account to purchase a cashier order of HK$2 million in favour of P (the “Cashier Order”). The Cashier Order was however cancelled shortly on the next day, and D deposited the HK$2 million back into the BOC Account. Subsequently on the same day, a time deposit of HK15 million was placed in the BOC Account.

3.  The primary question with which I am concerned is whether the Deceased had made a gift, or declared a trust, of HK$2 million in favour of P in the above process.

4.  At the trial, P was represented by Mr Ng Man Kin and D was represented by Miss Karen Wong.

5.  Apart from P herself, P’s sister Madam Lau Wai Kuen (劉惠娟) (“Kuen”) and P’s friend Ms Tai Chit Hang (戴捷恒) (“Ms Tai”) were also called as P’s witnesses. On the other hand, D was her only witness.

B. P’s case

6.  P case is as follows.

7.  The Deceased has 9 siblings in total and he comes the third. P is the second child and thus the elder sister of the Deceased.

8.  P all along had a close relationship with D. Over the years, P and his boyfriend Mr Lai Wing (黎榮) (“Mr Lai”) had rendered various financial assistances to the Deceased, for which the Deceased was grateful, before the Deceased won the Mark Six. For example: -

8.1. P started working at the age of 11 to earn money to support the Deceased’s education;

8.2. Mr Lai paid the Deceased’s private hospital charges following an incident whereby the Deceased was hit at the head by a robber when he was working at Wellcome Supermarket;

8.3. P helped the Deceased to pay for his marriage banquet in the sum of HK$15,000;

8.4. P gave HK$50,000 to the Deceased for the purchase of his Home Ownership Scheme property after the Deceased’s marriage; and

8.5. P supplied vermicelli rolls (腸粉) to the Deceased at a reduced rate at the time when the Deceased’s food stall business was not good.

9.  In around the end of February 2016, the Deceased orally informed P that he had arranged the Cashier Order for HK$2 million in favour of P as a gift.

10.  The Deceased sent the image of the HK$2 million Cashier Order to P by WhatsApp.

11.  P then forwarded the image to Ms Tai. P’s mobile phone subsequently fell into the water and was damaged. The image of the Cashier Order disclosed in these proceedings came from Ms Tai.

12.  There was a subsequent telephone conversation between the Deceased and P. The Deceased told P over the telephone that the Cashier Order was to be given to her as a gift since she had helped the Deceased a lot. P initially declined but eventually accepted the gift.

13.  P however did not have knowledge in investments. P therefore requested the Deceased to hold the HK$2 million for her.

14.  P and the Deceased orally agreed the following, which P contends amounted to a trust arrangement between the Deceased and P regarding the HK$2 million: -

14.1. The Deceased would hold the HK$2 million and all interests or profits earned therefrom as a trustee for her benefit by making a fixed term deposit or investing on behalf of P; and

14.2. Upon request and/or demand by P at any time, the Deceased would transfer the HK$2 million and all interests or profits earned therefrom back to P.

15.  In around late February 2016, P told Kuen that the Deceased would hold the HK$2 million as a trustee for P by making a fixed term deposit or investment.

16.  In around March 2016, the Deceased told Kuen that he would hold the HK$2 million as a trustee for P by making a fixed term deposit or investment.

17.  After the Deceased passed away, P demanded D to repay the Sum.

18.  P for the first time demanded D for repayment of HK$2 million by way of a WhatsApp message in mid-January 2019. There were WhatsApp messages from mid-January 2019 to 21 May 2019 between P and D in relation to the refund of the HK$2 million.

19.  Initially, D promised to transfer the HK$2 million back to P in around mid-April 2019. However, D eventually failed to do so.

20.  After 16 January 2019, D did not reply to P’s repeated claims including the demand letter dated 25 October 2019 issued by P’s Solicitors.

C. D’s case

21.  D’s case is as follows.

22.  The Deceased and D met in 1984 as co-workers in a Wellcome Supermarket. The Deceased was a shop manager therein whilst D was a saleswoman.

23.  The Deceased and D were married two years later in 1986. They have a son and a daughter, who is now 34 and 21 years of age respectively.

24.  Being born into a humble family, the Deceased did not have any knowledge or experience in investment. Family finances were handled by D solely and the Deceased often expressed to D that he was not good at investment.

25.  In about 2004, the Deceased and D opened a small eatery in Tsuen Wan. With the joint efforts of the Deceased and D, the business of the eatery was fairly well. In about early 2016, when the Deceased was at the age of 60, they made a joint decision to close their eatery due to the demanding workload.

26.  D had a close relationship with the Deceased. They were good partners in the family as well as in business. They had worked as a good team to share, discuss and handle the ups and downs of life together, and was thus able to maintain their marriage for over 30 years. For instance, as the Deceased did not have a good relationship with his son, he relied on D in communicating with his son. The Deceased also often shared with D stories between his siblings.

27.  After P’s divorce, she started courtship with Mr Lai and assisted Mr Lai in running his steamed vermicelli rolls factory until about 2017 or 2018. During the time when the Deceased and D ran their eatery, they often purchased steamed vermicelli rolls from Mr Lai. In 2018, Mr Lai passed away.

28.  After knowing that he had won the Mark Six, the Deceased went to the Hong Kong Jockey Club twice under the accompany of D for registration and for obtaining payment by cheque. They then took the cheque to the Leighton Road branch of the BOC in Causeway Bay and deposited the same into the Deceased’s BOC Account.

29.  On 22 February 2016, D accompanied the Deceased to the Tsuen Wan Plaza branch of BOC. The Deceased purchased a cashier order in the amount of HK$1 million for D’s mother, and the Cashier Order in the amount of HK$2 million for P. The Deceased told D specifically that the said HK$1 million was a gift to D’s mother. Nevertheless, regarding the HK$2 million, the Deceased did not say why it was purchased.

30.  On the next day, D accompanied the Deceased to deposit the Cashier Order back into his BOC Account. Again, the Deceased did not explain why he did not give the Cashier Order to P. Given that D and her mother had already received huge sums from the Deceased, D did not ask for the reasons and purposes behind the said purchase and cancellation.

31.  According to D’s knowledge, in about February 2016, P was at the age of retirement and was minded to sell the vermicelli rolls factory. P was not having any financial difficulty and there was no reason why the Deceased would gift HK$2 million to P.

32.  Throughout the years, the Deceased had gifted various small sums to his siblings in view of their needs. For example: -

32.1. In about March to April 2016, as both the Deceased’s sixth younger sister, Kuen and fifth younger brother had to undergo surgery, the Deceased gave them HK$100,000 each for paying their surgical fees;

32.2. The Deceased gifted HK$300,000 to his ninth sister’s partner, Mr Tam after knowing that Mr Tam’s business was bad, and that he had spent over HK$200,000 on treating the Deceased’s ninth sister’s mood disorder. In order to lessen Mr Tam’s financial burden, the Deceased instructed D to write a HK$300,000 cheque to Mr Tam. Nonetheless, Mr Tam refused to take the cheque and insisted that he did not need any monetary reward for taking care of the Deceased’s ninth sister;

32.3. During Chinese New Year in 2017, the Deceased gifted cash of HK$50,000 to each of his eighth and ninth sister. In 2018, the daughter of the Deceased’s eighth sister was getting married and the Deceased gifted cash of HK$10,000 to his niece; and

32.4. In 2018, Mr Lai passed away. Knowing that P had spent much money on his medical expenses, the Deceased paid for his hospital and funeral fees in the sum of HK$300,000 via D.

33.  During the lifetime of the Deceased, D had never heard from anyone, including the Deceased, P and/or their siblings concerning the Cashier Order, the alleged gift or the alleged trust arrangement.

34.  In about mid-January 2019, D first heard from her son that P was spreading false rumours within the WhatsApp group of P’s family that she had a HK$2 million time deposit in the Deceased’s bank account, and that D had failed to state the same when applying for probate. P even made derogatory and spurious remarks against D, alleging that D had intentionally caused the death of the Deceased and would harm her son similarly.

35.  When P messaged D asking for HK$2 million, D was still in the process of applying for a grant and had yet gone to the bank to confirm the assets left by the Deceased. After seeing the photo of the Cashier Order in the WhatsApp message, D thought that P was telling the truth and that there was HK$2 million in the Deceased’s bank account which in fact belonged to P.

36.  At the time, D was still in a shocked and depressing state due to the sudden death of the Deceased. Nevertheless, P did not assist D or care for D at all. Instead, she only concerned about the HK$2 million. P and the Deceased’s other siblings even got into an argument on the 3^rd day of the Deceased’s funeral, and subsequently refused to attend the same.

37.  When D replied to P’s messages, it was late at night already. D was exhausted from handling the Deceased’s funeral during the daytime. Hoping to take a rest as soon as possible, and to avoid further disputes with P, D replied without detailed thoughts that she would transfer HK$2 million back to her straight away. However, as D did not have sufficient cash on hand, she asked P to wait until about mid-April.

38.  D has never admitted knowledge of the alleged gift or trust arrangement in the said WhatsApp record, and that D has never thought that P would make up a story to deceive her.

39.  After obtaining the grant in February 2019, D went to the bank and checked that there was no time deposit in the Deceased’s assets. There was neither any stocks nor investment held by the Deceased.

40.  D then discovered that all P had said was a lie. She was very disappointed and blocked D’s WhatsApp and phone calls. Accordingly, D did not transfer HK$2 million to P in mid-April.

41.  From May to June 2019, P repeatedly went to D’s residence in Kam Tin to harass D’s family. During the time, D’s son was living therein whilst D had moved out. D’s son complained that P had posted a note on the entrance door threatening D to pay her money. P also yelled at the front door of the Kam Tin Property and made numerous telephone calls to D’s son.

42.  On 25 October 2019, D received a letter from P’s solicitors demanding D to pay P HK$2 million and the investment income derived therefrom. As P’s demand was unfounded, D did not reply.

43.  It is D’s case that the Deceased had never intended to gift HK$2 million by the Cashier Order to P. Alternatively, even if there was such an intention, the gift was incomplete as the Cashier Order was never delivered to P. Further, D contends that there was never any trust arrangement between the Deceased and P regarding the HK$2 million.

D. Disputed issues

44.  The parties agreed that the following three issues are in dispute. The issues are as follows: -

44.1. Whether the Deceased had arranged a cashier order for the sum of HK$2,000,000.00 drawn in favour of P as a gift to P (“Issue 1”);

44.2. Whether P and the Deceased entered into the Trust Arrangement (“Issue 2”);

44.3. Whether P is entitled to the relief claimed under Statement of Claim dated 27 May 2020 (“Issue 3”).

E. Legal principles

E1. Credibility of witnesses

45.  The test for assessing the credibility of witnesses has been set out in Hui Cheung Fai & Anor v Daiwa Development Limited, HCA 1734/2009 (unrep, 8/4/2014) at §§76-82 per DHCJ Eugene Fung SC.

“76. In making my findings of fact in this case, I am guided by a number of general principles which judges apply as to fact finding and the assessment of credibility.

77. Generally speaking, contemporaneous written documents and documents which came into existence before the problems in question emerged are of the greatest importance in assessing credibility: Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce). It is right to point out, however, that some of the documents in this case are alleged by the Son to be shams and those documents obviously cannot be used to assess the credibility of the parties.

78. In deciding whether to accept a witness’ account, importance should also be attached to the inherent likelihood or unlikelihood of an event having happened, or the apparent logic of events: eg Lam Rogerio Sou Fung v Tan Soon Gin George (unreported, HCA 2576/2005, 5 May 2011) §39 (Chu J).

79. In determining a witness’ credibility, I have also attached importance to the consistency of the witness’ evidence with undisputed or indisputable evidence, and the internal consistency of the witness’ evidence. The latter type of consistency is often tested by a comparison between the witness’ oral testimony and his or her witness statement.

80. I have cautioned myself against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses (Ting Kwok Keung v Tam Dick Yuen [2002] 5 HKCFAR 336 at §§36-37 (Bokhary PJ)), or from the assessment of the witnesses’ character (Esquire (Electronics) Ltd v HSBC [2007] 3 HKLRD 439 at §135 (Stock JA)).

81. The practical approach to assessing credibility of witnesses in a case such as the present may have best been summarised by the words of Robert Goff LJ, as he then was, in The Ocean Frost [1985] 1 Lloyd’s Rep 1 at 57:

“Speaking from my experience, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and to the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence such as there was in the present case, reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.”

82. Whilst these words were spoken in the context of a fraud case, I believe they are applicable to any case where a witness’ credibility features prominently in the court’s determination. They are particularly apposite in a case like the present where very serious allegations (akin to allegations of fraud) have been made by the Son against the defendants.”

E2. Gifts

46.  The legal principles on gift are recently summarised by Deputy High Court Judge Paul Lam SC in Ng Kit, Legal Representative and Sole Beneficiary of the Estate of Ng Kwun Yuen, Deceased v Wu Tsun Hua and Others at §§32-33: -

“32. In short, as submitted by P, a perfect gift may be made by a transfer of the gifted asset to the donee, accompanied by an intention in the donor to make a gift; the donor has to have done everything necessary to be done which is within his own power to do in order to transfer the gifted asset to the donee (T Choithram SA v Pagarani [2001] 1 WLR 1 at 11D-E).

33. P cites Young Tin Kin Kenneth, the Executor and Trustee of the Will of Yang Shen Sum, deceased v Lau Lan Fong Nancy, HCA 1545/2004 (6 September 2006, unreported) where DHCJ Muttrie considered the relevant legal principles in §§52-62. I have also considered Halsbury’s Laws of England (5^th ed, 2014), vol 52, §§201-270; and In re Cole, a bankrupt [1963] 1 Ch 175. For the present purpose, the relevant principles are as follows:

(a) If a gift is claimed, the onus is on the donee to prove it.

(b) A gift made between living persons (inter vivos) may be defined shortly as the transfer of any property from one person to another gratuitously while the donor is alive and not in expectation of death. It is an act whereby something is voluntarily transferred from the true owner in possession with the full intention that the thing shall not return to the donor.

(c) A gift is effective when the donor intends to make it a gift and the recipient takes the thing given and keeps it, knowing that he has done so.

(d) As a general rule, all property, real and personal, may be the subject of gift. With certain exceptions, choses or things in actions are assignable, and may also be the subjects of gift.

(e) A gift inter vivos may be made by various means: by deed or other instrument in writing; by delivery in cases where the subject of the gift admits of delivery; or by declaration of trust, which is the equitable equivalent of a gift.

(f) Gifts of chattels are more often made by delivery than by deed. A gift of chattels is not complete unless accompanied by delivery. Actual delivery is not mere evidence of the gift, but is part of the gift itself. To constitute delivery, the acts must be such, or be accompanied by such words, as to be unequivocal. But actual manual delivery by the donor to the donee of a chattel is not essential. It is sufficient if the donee is put by the donor in possession of the chattel, or if the donee obtains possession with the donor’s consent. Where chattels cannot be actually delivered owing to their bulk, they can be constructively delivered, for example by the delivery of the key of a warehouse in which they are stored. The delivery needs not be made at the time of the gift, delivery first and gift afterwards being as effectual as gift first and delivery afterwards.

(g) Where a gift rests merely in promise, whether written or oral, or in unfulfilled intention, it is incomplete and imperfect, and the court will not compel the intending donor, or those claiming under him, to complete and perfect it, except in circumstances where the donor’s subsequent conduct gives the donee a right to enforce the promise. If a gift is to be valid the donor must have done everything which, according to the nature of the property comprised in the gift, was necessary to be done by him in order to transfer the property and which it was in his power to do.

(h) In order that a voluntary equitable assignment of an equitable chose or thing in action may be valid it must be in all respects complete and perfect, so that the assignee is entitled to demand payment from the trustee or holder of the fund or debt and the trustee or holder is bound to make payment to the assignee, with no further act on the assignor’s part remaining to be done to perfect the assignee’s title.

(i) Save where a presumption of gift may arise, a gift between spouses or civil partners must be established in the same way as a gift between strangers; that is to say it must be made by deed or by delivery, and there must be a clear and distinct act of gift and evidence that a gift was intended, in particular when the claim is made after the death of the alleged donor.

(j) An act showing an intention to change the ownership may constitute sufficient delivery, notwithstanding that the chattels continued to be used by the spouses or civil partners in common: the act, however, must be such or be accompanied by such words as to be unequivocal; for if the facts are equally consistent with an intention to make an absolute gift of the property and an intention to allow the other spouse or civil partner to have the use of it, then title does not pass to that other spouse or civil partner.

(k) Prima facie the donor of a completed gift is not entitled to revoke it nor to recall any payment made voluntarily.” (emphasis added)

47.  In Yung Shu Wu v Vivienne Sung Wu [2011] 14 HKCFAR 39, Lord Walker of Gestingthorpe NPJ summarised the relevant legal principles when a claim is asserted against the estate of a deceased person at §§72-74: -

“72. First, the law of Hong Kong differs from the law of England as regards the formalities required for a disposition of an equitable interest … a signed written instrument is no longer required, as a matter of law, for the disposition of an equitable interest.

73. Secondly, and in tension with the first point, Vivienne is making a claim against the estate of a deceased person who cannot give evidence against her claim. The court has always approached such claims with some suspicion, especially (in the case of an alleged gift) where the only or principal witness in support of the claim is the donee. Corroboration is not essential in every case. But as Plowman J said in Thomas v The Times Book Co Ltd [1966] 2 All ER 241, 244 (the curious case about ownership of the manuscript of Dylan Thomas’ Under Milk Wood),

“Therefore, not only in this case is the onus of proof on the defendants [who were resisting a claim by the poet’s administratrix], but I am enjoined by authority to approach their story with suspicion having regard to the fact that the other actor in the story, the late Dylan Thomas, is dead and cannot therefore give his own version of what took place.”

This principle has been applied in Cheung Cho Kam Sindy v Cheung Yuet Ying Rose (Deputy High Court Judge Muttrie, 13 July 2007).

74. This court has to give effect to both these rules. A written instrument signed by the deceased was not essential, as a matter of law, for a valid disposition of his equitable interest in the Good Harvest and Vacha accounts. Nor is corroboration essential as a matter of law. But here Vivienne was the sole witness to an alleged oral gift amounting (if she is right) to the entirety of the deceased’s assets in Hong Kong, worth millions of US dollars, at a time when the deceased’s liver cancer had not yet been confirmed (it was confirmed by the specialist on 28 December 2001 and its advanced state was disclosed later than that). She was undertaking a very heavy burden of proof to satisfy the court that the deceased made what Sargant J in Re Westerton [1919] 2 Ch 104, 109 referred to as “a clear gift then and there … an out and out gift and not an expression of a mere desire to make a gift”.” (emphasis added)

F. Credibility of witnesses in this case

48.  In general, I find P’s witnesses to be honest and reliable. They gave their answers in a straightforward and forthcoming manner and were not shaken under cross-examination. Further, I consider their evidence to be inherently probable and consistent with the overall factual background of this case.

49.  P is 70 years old. Due to poverty, she has not received any formal education and can only read some simple Chinese characters. I find that her evidence was generally direct and candid. On the other hand, whilst I accept that P had entrusted the HK$2 million with the Deceased because, amongst others, she had little knowledge about investments, I do not accept that she had no knowledge about time deposits. Save as aforesaid, I accept her evidence as reliable and when her evidence and D’s evidence are in conflict, I accept the former.

50.  I also find Kuen’s evidence to be honest and reliable. I accept D’s observation that there are paragraphs in the witness statements of P and Kuen that are identical, which suggests that their statements were prepared together. However, I do not find the same to adversely affect their overall credibility.

51.  Likewise, Ms Tai has given her evidence in a candid and direct manner. Since 2000, she had resided with P and Mr Lai when she had summer vacation. She then worked at Mr Lai’s vermicelli rolls factory since 2003. However, I do not accept that she had tailored her evidence in favour of P because of her said close relationship with P.

52.  On the other hand, I do not find D to be an honest or reliable witness. Her evidence was evasive and inherently improbable. Further, she has given contradictory answers on some important issues, as explained below.

G. Factual findings

G1. Whether P and Mr Lai had rendered favours to the Deceased

53.  As a matter of background, the undisputed evidence shows that the Deceased was a very generous person towards his family members. After collecting his winnings, the Deceased had gifted various sums to his relatives. D’s argument however is that those payments were made when these relatives were in need. Further, no one apart from D herself had received an amount as large as HK2 million from the Deceased.

54.  On the other hand, there appears to be no dispute that the Deceased had a very good relationship with P and the Deceased was very respectful to Mr Lai. D however disputes the circumstances of some of the alleged assistances rendered to the Deceased by P or Mr Lai. D’s contention is that there was therefore no reason for the Deceased to give such a substantial sum of money to P, whether by way of outright gift or declaration of trust.

55.  Despite D’s challenges, I accept P’s evidence that P and Mr Lai had rendered substantial and meaningful assistance to the Deceased over the years, and further that the Deceased was grateful for the same. My reasons are as follows: -

55.1. D disputes P’s case that she had earned money to support the Deceased’s education. However, it later transpired during cross-examination that D was merely disputing that the money was used specifically for the Deceased's education. Other than that, there appears to be no dispute that P had started earning money to support the family generally when she was only 11 years old;

55.2. D criticises that there are no contemporaneous documents to support Mr Lai’s payment of the Deceased’s medical fees. I find such criticism to be unjustified as this matter happened many years ago and at that time no one would logically have envisaged the need to keep the relevant documents. Further, D's argument that “it is likely” that the Deceased had returned the money back to P upon receiving compensation from his employer is pure conjecture without any basis;

55.3. D also criticises that there are no contemporaneous documents to support P’s payment for the Deceased’s marriage banquet. Such criticism is again rejected for the same reasons explained above;

55.4. There is no dispute about the receipt of the HK$50,000 by the Deceased for his purchase of the Home Ownership Scheme property after the Deceased’s marriage. D however claimed that the said HK$50,000 had been repaid. D said that Mr Lai drove to Tsuen Wan Plaza to find her in about 1991, and she immediately withdrew HK$9,000 from the ATM, being all that she had at the time to repay Mr Lai. Being informed of the above, the Deceased told D that he would borrow money from the bank to repay Mr Lai. According to D’s knowledge, the Deceased did take out a loan at last. The alleged repayments were however disputed by P. On this issue, I prefer the evidence of P. On the other hand, and in any event, even assuming repayment had been made, it still does not change the fact that the lending of money in the first place when the Deceased was in need was already a favour; and

55.5. Regarding the selling of vermicelli rolls to the Deceased at a reduced rate, D argues that such evidence was contradicted by Ms Tai who said there were never any free or discounted vermicelli rolls sold to the Deceased as there were rules and accounts in the factory. I do not think such a discrepancy would affect P’s credibility on this matter. First, Ms Tai does not seem to be primarily responsible for the financial or accounting matters of the factory. Second, P was the person who rendered the relevant favour to the Deceased and therefore she should have a clearer recollection of the relevant factual background. On the other hand, Ms Tai appears to be speaking only about the general rules and accounts of the factory instead of specifically in respect of the dealings with Deceased, a matter which she appears to have no reason to pay specific attention to at the material time.

56.  In summary, I find that both P and Mr Lai had rendered substantial assistance over the years for which the Deceased was grateful. Given this factual background, together with the Deceased’s generous character, there appears to be nothing surprising or unreasonable for the Deceased to pay a substantial sum to P as a gift after he had won the Mark Six.

57.  In this regard, P testified, and I accept, that after the Deceased’s eatery business improved and before the Deceased won the Mask Six, the Deceased had already been paying living expenses to P and Mr Lai regularly. The money was in small change (散紙) and the Deceased entrusted Ms Tai to bring it to P.

58.  Her evidence was corroborated by Ms Tai. Ms Tai’s evidence is that she had been delivering vermicelli rolls to the Deceased’s eatery nearly every day since 2007. She confirmed that the Deceased asked her to bring money back to P. The money was put in a Manila envelope. This happened in more than one month’s interval and was not seldom. The money was for the expenses of P and Mr Lai.

59.  I find that such payments were made to return the favours received by the Deceased over the years.

G2. Circumstances under which the Deceased purchased the Cashier Order

60.  In this case, there is no dispute that the Cashier Order was purchased in P’s favour. D however argues that such a document does not necessarily supports the existence of a gift. Therefore, the circumstances in which the Cashier Order was purchased on 22 February 2016 and cancelled on 23 February 2016 are of crucial importance in this case.

61.  In this regard, P has stated in evidence how the Deceased sent the image of the Cashier Order to her via WhatsApp and then told her about the intended gift in a subsequent conversation. I accept her evidence.

62.  Further, such a gift and the subsequent alleged trust arrangement is supported by the evidence of Kuen, which I also accept: -

62.1. P told Kuen that the Deceased gifted P HK$ 2 million. As the sum was too big, P asked the Deceased to keep the sum for investment or time deposit on her behalf. Although such evidence is hearsay in nature, I do not see any reason why P would say so to Kuen at the time if the same was not true;

62.2. Subsequently, the Deceased told Kuen in March 2016 that a gift of HK$2 million was given to P when Kuen and the Deceased were travelling together on a bus to visit D at hospital. The Deceased told Kuen he was keeping the money for P for investment or time deposit. The Deceased further said he did it as an appreciation for what P had done to help him. Kuen asked the Deceased whether D knew the gift. The Deceased answered in the affirmative; and

62.3. Kuen explained that such incidents were not mentioned in the family gatherings because the Deceased did not like gossiping.

63.  In a similar vein, P’s evidence is supported by the evidence of Ms Tai, which I also accept, as follows: -

63.1. P told her that the Deceased had given her a sum of money as provision for old-age and expenses;

63.2. P told her the money was kept by the Deceased to do time deposit and investments since P did not know how to invest; and

63.3. Ms Tai agreed that the Deceased had never told her about the HK$2 million Cashier Order.

64.  On the other hand, D was evasive when she testified on the purchase of the HK$2 million Cashier Order. Her evidence was inherently incredible.

65.  D’s evidence in her witness statement on what had happened on 22 and 23 February 2016 when the Cashier Order was purchased and cancelled was as follows: -

“於2016年2月底左右，本人陪同先夫到中銀荃灣廣場分行。當天，先夫發出兩張本票，分別是一張港幣100萬元的本票予本人母親，及一張港幣200萬元的本票予原告人（下稱「該本票」）。先夫當時向本人表明送贈本人母親100萬元。就給予原告人的該本票，由於與本人沒有直接關係，先夫沒有向本人說明原因，本人亦沒有多問，畢竟本人已獲先夫送贈巨額金錢。其後，先夫把該本票存回自己户口時，即使本人亦陪伴在旁，本人亦沒有過問原因。”

66.  I find D’s evidence that she had not asked the Deceased about the HK$2 million Cashier Order when the same was purchased to be unconvincing. Such evidence defies common sense and is also contradictory to D’s own case.

67.  First, HK$2 million is not a small amount. There could be no logical reason why D, as the Deceased’s wife, would not want to know why the Cashier Order was purchased in P’s name. It has to be remembered that, according to D’s case, there was no need for the Deceased to return any substantial favours to P, and P was also not in any special needs at the time. In the circumstances, the mere contention that D had already received substantial funds from the Deceased could not even start to explain D’s aloofness in the matter.

68.  Second, and more importantly, it is D’s own case that her relationship with the Deceased was very close and they had very good communications. Paragraph 6 of D’s Witness Statement reads as follows: -

“本人與先夫的關係一直十分緊密，無論家庭還是生意上的大小事務，我們均合作無間。無論本人與先夫發生任何事，均會第一時間告知對方”

69.  It is therefore very odd that the Deceased had not already explained the relevant circumstances to D before the purchase of the Cashier Order. It is even odder when D was not interested in asking a single question about the Cashier Order after the same was purchased.

70.  I therefore reject D’s said testimony. I find that D had already learnt from the Deceased that the Cashier Order was intended to be a gift to P when the same was purchased.

G3. Circumstances under which the Deceased cancelled the Cashier Order

71.  Regarding what happened on 23 February 2016 when the Deceased cancelled the Cashier Order, D’s evidence during cross-examination was as follows: -

71.1. The Deceased and D went to the BOC branch at Butterfly Estate. Regarding P’s challenge that D should have asked the Deceased and/or the Deceased should have told her the reason why he purchased and cancelled the Cashier Order given their close relationship, D explained that she would not ask the Deceased everything; and

71.2. D had no idea that the Deceased had made a HK$15 million time deposit at the time. She did not hear any conversation between the bank manager and the Deceased on the said time deposit. She only recalled that the Deceased had signed some documents at the bank, but she did not know their content. She could not remember whether the Deceased and the bank manager had the discussion and handled the documents at the counter or in a room, as she often went to the bank with the Deceased.

72.  I find that D’s evidence on what had happened on the day of the cancellation of the Cashier Order to be also highly unsatisfactory.

73.  First, D had given two different versions of the relevant events. The first version was given during cross-examination on day 2 of the trial, when she said the Deceased took the Casher Order out from his pocket after withdrawing money at the bank. The second version emerged on day 3, when D said the Deceased took the Cashier Order from the drawer at home and told D that he wanted to cancel the same. D said she helped the Deceased to hold the Cashier Order when he wore a windbreaker. She then placed the Cashier Order inside her bag for convenience as the Deceased did not take a bag. D eventually confirmed that the second version was correct.

74.  Second, and more importantly, if she was already aware of the Deceased’s intention to cancel the Cashier Order at home, there was ample chance for her to enquire why the Deceased would want to cancel the same just one day after its purchase. Once again, however, D was entirely uninterested in knowing the reason, for no apparent reason.

75.  Third, after D disclosed the Deceased’s BOC passbook on day 3, it was discovered that the Deceased had in fact arranged a time deposit of HK$15 million on the same day after the Cashier Order was cancelled. As D was with the Deceased at the bank, I do not believe that D was unaware of this time deposit as alleged. Instead, I find that she had deliberately neglected to mention this HK15 million time deposit until the Deceased’s BOC passbook was disclosed on day 3. Even after the discovery of the passbook, D still tried to distance herself from the same during cross-examination. At one stage, she said the relevant entry was an insurance policy. Later, she said she was not aware of the said time deposit until the preceding night when she photocopied the passbook. I find such evidence to be incredible. The passbook was all along kept by D. Given its obvious importance, there is no reason why D would not have read it in detail at a much earlier stage. I find that she does not want to disclose this HK$15 million time deposit because the making of the same by the Deceased immediately after the cancellation of the Cashier Order would tend to support P’s case on the alleged trust arrangement.

76.  I make a finding of fact that D was aware of the trust arrangement between the Deceased and P at the material time, and that such an arrangement was the reason for the cancellation of the Cashier Order.

H. Issue 1: Whether there was a valid and complete gift of the HK$2 million

77.  Despite the aforesaid factual findings that the Deceased had intended to make a gift to P by way of the Cashier Order, I find that such an intended gift has not been perfected.

78.  It is important to bear in mind the well-established principle laid down by Turner LJ in the English Court of Appeal case Milroy v Lord [1862] 4 De GF & J 264 at 274 and 275: -

“I take the law of this court to be well settled, that, in order to render a voluntary settlement valid and effectual, the settler must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him. He may of course do this by actually transferring the property to the persons for whom he intends to provide, and the provision will then be effectual, and it will be equally effectual if he transfers the property to a trustee for the purposes of the settlement, or declares that he himself holds it in trust for those purposes; and if the property be personal, the trust may, as I apprehend, be declared either in writing or by parol; but, in order to render the settlement binding, one or other of these modes must, as I understand the law of this court, be resorted to, for there is no equity in this court to perfect an imperfect gift. The cases I think go further to this extent, that if the settlement is intended to be effectuated by one of the modes to which I have referred, the court will not give effect to it by applying another of those modes. If it is intended to take effect by transfer, the court will not hold the intended transfer to operate as a declaration of trust, for then every imperfect instrument would be made effectual by being converted into a perfect trust.” (emphasis added)

79.  In this regard, I think P’s reliance on cases such as Rose v Inland Revenue Commissioners [1952] Ch 499 and Pennington v Waine [2002] EWCA Civ 227 is misplaced. In those cases, the donor had done everything necessary to transfer title and that it would be unconscionable for the donor to refuse to make the transfer. In this case, the Cashier Order has never been delivered to P, and there would be nothing unconscionable if the Deceased had elected to change his mind at that moment of time.

I. Issue 2: Trust agreement

80.  It is submitted by D that the alleged trust arrangement lacks certainty of words, as loose conversation could not be shown to be a declaration of trust: Jones v Lock [1865] LC 25.

81.  D argues that for the Deceased to make himself a trustee, there must be an expression of intention to become a trustee, whereas words of present gift show an intention to give over property to another, and not retain it in the Deceased’s own hands for any purpose, fiduciary or otherwise: Richards v Delbridge [1874] LR 18 Eq 11.

82.  In light of the said legal principles, D submits that P has failed to show that the Deceased had intended to impose legally enforceable duties of trusteeship on himself, rather than duties of a merely social or moral nature. P has also failed to show the Deceased intended to create a legal relationship involving trust duties as distinct from some other kind of legal relationship.

83.  With respect, I do not accept the said arguments.

84.  The relevant legal principles on the settlor’s intention are summarised in Snell’s Equity (34^th ed, 2020) (at §22-013): -

“(a) Construction of the settlor's intention. No particular form of expression is necessary for the creation of a trust if, on the whole, it can be gathered that a trust was intended. It is unnecessary for the settlor to use the word “trust”: the court construes the substance and effect of the words used, against the background of any relevant surrounding circumstances. Indeed, the settlor need not even understand that his words or conduct have created a trust if they have this effect on their proper legal construction. Conversely, it is not enough that the settlor describes the transaction as a trust if on its proper construction the transaction was not intended to operate as a trust. The settlor’s intention must be clear on two main questions: (1) that they intended the trustee to owe legally enforceable duties rather than duties of a merely social or moral nature; (2) that if they intended to create a legal relationship, it was to involve trust duties as distinct from some kind of legal relationship, such as a simple relationship of debtor and creditor.” (footnotes omitted)

85.  Lord Millett explained in Twinsectra Ltd v Yardley [2002] 2 AC 164 at 185B-C that:-

“A settler must, of course, possess the necessary intention to create a trust, but his subjective intentions are irrelevant. If he enters into arrangements which have the effect of creating a trust, it is not necessary that he should appreciate that they do so; it is sufficient that he intends to enter into them.”

86.  In the present case, the Deceased was required to put the money into a time deposit or to invest on P’s behalf, and the money was to be returned by the Deceased to P upon demand. The money was therefore not at the free disposal of the Deceased. The parties might not have known that they were creating a “trust”. However, the overall objective circumstances clearly show that there was an intention on the part of the Deceased to declare a trust over the HK$2 million for the benefit of P.

J. Disposition

87.  I therefore make the following orders: -

(1) A declaration that HK2 million has been held by the Deceased on trust for P since 23 February 2016.

(2) That pursuant to the provisions of Order 43, Rules of the District Court, Cap 336H, D do render to P a true and proper account for the said trust property, and and/or all property now representing the said trust property, including any interests, profits or other proceeds which have accrued upon the said trust property;

(3) That absent agreement thereon, appropriate directions be made by a Master for the taking of such an account, and that application therefor be made within 28 days of the date of judgment herein;

(4) That there be an order nisi that the costs of these proceedings be taxed if not agreed and paid by D to P, such order to become absolute unless written objection thereto is made within 14 days of the date of judgment herein.

88.  It remains for me to thank Mr Ng and Miss Wong for their assistance.