CHU WEN JING JENNIFER v. SIN HON WAI

HCA 10/2016

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 10 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 6 OF 2016

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IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 121 OF 2016

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(Consolidated by order of Master Hui dated 23 February 2016)

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D E C I S I O N

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A. INTRODUCTION

1.  The plaintiff and the defendant were formerly in a romantic relationship.

2.  It is not in dispute that:

(1) Between 2011 and 2015, during the subsistence of their relationship, the plaintiff:

(a) deposited various sums into a bank account in the sole name of the defendant and another bank account in theirjoint names (respectively, the “sole name bank account” and “the joint name bank account”, together “the Bank Accounts”);

(b) paid the purchase price and all related expenses for a property in Tseung Kwan O (“the Property”) that was put under the sole name of the defendant.

(2) On 24 May 2014, the defendant married another woman (“the Marriage”).  ‌This was not known to the plaintiff until sometime after 31 December 2015, upon which the relationship ended.

(3) In the meantime, the relationship subsisted and from 5 May 2014 (shortly before the Marriage when, the plaintiff says, the arrangements for the wedding must have been under way) to 7 December 2015 sums totaling HK$8,000,000 were deposited by the plaintiff into the Bank Accounts.

(4) The Property was purchased (by way of a provisional sale andpurchase agreement) on 7 July 2015.  Completion took place in November 2015.

I shall call the deposits referred to in (3) above, and the purchase of the Property by the plaintiff in the name of the defendant, as “the Transfers”.

3.  In her pleadings, the plaintiff alleges that the payments into the Bank Accounts (both before and after the Marriage) were for certain specific purposes and the defendant held the money in them on trust for her  . 

4.  As for the Property, she alleges that in early 2015 the defendant proposed that she should purchase a property in Tseung Kwan O (where she worked) so that they could live together, in anticipation of their intended marriage in 2017 (when they would move into another property there purchased by the plaintiff but not yet completed).  She agreed but after the purchase of the Property for that purpose found that it was too small for them to live in, so she decided to lease it out.  The defendant then persuaded her to put the Property in his sole name so that he could hold it on trust for her and to manage the rental matters for her.

5.  In the premises, she claims to be the beneficial owner of the Property and the monies in the Bank Accounts, all of which were held by the defendant on trust for her, and sues for their return.

6.  The defendant pleads that the sums deposited into the Bank Accounts (both before and after the Marriage) and the Property were intendedto be gifts from the plaintiff to him (save for one deposit of HK$1,000,000 into the sole name bank account in exchange for the defendant’s transfer of units in a unit trust of about that value into the joint name bank account, and save that the monies deposited into the joint name bank account were intended to be owned by them jointly).

7.  The plaintiff alleges that the balance in the joint name bank account was only HK$108 as at 3 pm on 31 December 2015, as against about HK$4,180,000 as at 17 December 2015.

8.  The plaintiff’s case of trust in relation to the sums paid into the Bank Accounts (both before and after the Marriage) and the Property was maintained in her affirmations made in support of her application for a Mareva injunction against the defendant, which was granted ex parte by Mr Recorder Whitehead SC on 5 February 2016, and which was continued subsequently by Mimmie Chan J and by Chung J.

B.  APPLICATION FOR SUMMARY JUDGMENT

9.  By summons dated 24 June 2016 (“the Summons”), the plaintiff applies for summary judgment, under Order 14 of the Rules of the High Court (Cap 4A), against the defendant for:

“the sum of HK$8,000,000 which represents the total of the sums the Plaintiff paid to the Defendant since 5 May 2014 and for the entire beneficial interest in [the Property], being a part of (i) the sums of cash the Plaintiff placed under the Defendant’s control and (ii) the properties held on trust by the Defendant, out of claims respectively mentioned in paragraphs 5 and 22.3 of the statement of claim”.

10.  This is the hearing of the Summons, which only seeks judgment on the return of the subject of the Transfers, but not on monies paid into the Bank Accounts, and another account in the sole name of the defendant, before that date.

11.  I set out here §§5 and 22.3 of the statement of claim, which form the basis of the application for summary judgment:

“5. Between 2011 and December 2015 the Plaintiff placed the following sums under the Defendant’s control:–

5.1 HK$5,500,000 — This is the sum paid into the [sole name bank account] ... These funds were part of the Plaintiff’sinvestments and savings ...

5.2 HK$7,500,000 — This is the sum paid into the [joint name bank account] ... These funds were available so that the Defendant could access the money to deal with any urgent or emergency needs of the Plaintiff ...

5.3 HK$9,780,000 [into another account in the sole name of the defendant not the subject of this application for summary judgment].

...

22. In furtherance of the relationship as pleaded in paragraphs 2–8 hereinabove, the defendant proposed the following property purchases so they could live together in Tseung Kwan O:– ...

...

22.3 on or about 18 November 2015, the Defendant proposed purchasing [the Property]. The Plaintiff paid the whole purchase price and related expenses in full. She later discovered that [the Property] was too small and decided to lease out the flat. The Defendant had persuaded her to put [the Property] under his sole name for him to hold the said property on trust and to manage its rental arrangements for the Plaintiff”.

12.  Also of relevance are the following in the statement of claim:

“12.3.4  the [sole name bank account] and the money therein were held on trust by the Defendant for the Plaintiff solely for the purpose of making investments.

13. On the day of the opening of the [sole name bank account], the Plaintiff and the Defendant also opened the [joint name bank account] for the Defendant to hold the account and the money therein on trust for the Plaintiff for her emergency and/or urgent needs.

14. The Plaintiff had transferred money into the [joint name bank account] on various occasions explained in paragraph 13 hereinabove. The Defendant, however, emptied the [joint namebank account] (except for HK$108 remaining therein) at the end of 2015 when he suddenly appeared”.

13.  It can therefore be seen that in the pleadings, the Summons, as well as her case for the Mareva injunction to which she affirmed, the plaintiff is expressly relying on the allegation that the defendant was holding the Bank Accounts and the Property on trust for her, based on the intention and purpose of the plaintiff herself for which those assets were put in the name of the defendant.

14.  However, in her fifth affirmation, made in support of the present application for summary judgment, the basis of her application is different.  She makes no attempt to support a case for summary judgment based on her own pleaded facts, which she has verified by a statement of truth and confirmed by affirmations in support of her application for a Mareva injunction.  Rather, she relies on the defendant’s own pleaded case and says:

“I am advised and verily believe that his pleaded case as set out in his defence establishes his liability to me in relation to [the total sum of HK$8,000,000] that represents the payments I made to him after the date when he formed a relationship with his current wife whom he married on 24 May 2014.

Additionally, I believe he has no bona fide defence in relation to my claim to the beneficially ownership [sic] of [the Property] on the basis that he holds [the Property] on resulting trust for me.I am advised and verily believe that his pleaded case as set out in his defence establishes my beneficial ownership of the said property”.

15.  The parts of the Defence which the plaintiff relies on in particular, in addition to the facts stated in §2 above, are the following:

“23. In about 2013, the Defendant and his current wife, whom he had known from his previous workplace since 2000, had an accidental reunion when visiting their mutual friend in hospital. They started a relationship soon after and later married on 24^th May, 2014.

24. The Defendant did not reveal to the Plaintiff his relationship with his current wife as he did not want to hurt the Plaintiff’s feelings nor did he know how to break up with the Plaintiff, who had all along treated the Defendant generously.

25. On or about 16^th December 2015, the Defendant agreed to attend the New Year’s Eve Ball only after the Plaintiff pressed him to, as he did not enjoy the past few occasions. The Defendant never proposed or promised to ‘leave together [with the Plaintiff] to their new home to start living together’”.

16.  Relying on those passages, the plaintiff says at §8 of her fifth affirmation:

“If, as alleged by the Defendant the payments were romantic gifts, (which I deny) the gifts fail on the basis of the matters pleaded by the Defendant. The Defendant by the conduct that headmits at paragraphs 23 to 25 of his Defence and Counterclaim misled me as to the fundamentals of our relationship with the effect that I was deceived into believing it was an exclusive relationship when he had formed another relationship and had married his current wife on 24 May 2014” (emphasis added).

17.  Thus, it can be seen that, in this application, the plaintiff is still refuting the defendant’s case that the Transfers were romantic gifts given bya girlfriend to her boyfriend.  Her case of trust, which is of course wholly inconsistent with a case of gift, is maintained, and expressly stated by Mr Clough[1], her counsel, to be not abandoned.

18.  This summary judgment application is made solely on the basis of the defendant’s case that the Transfers were gifts, which the plaintiff continues to deny.  Mr Clough submits that if on the facts pleaded and admitted by the defendant he is liable to judgment there is no reason why summary judgment cannot or should not be granted.  He argues that the plaintiff is entitled to summary judgment for the return of the subject of the Transfers because the Transfers were “mistaken gifts”.

19.  Mr Clough argues that the defendant’s conduct was that he continued to treat the plaintiff as his girlfriend as a time when on his case he had intended to break up with her (referring to §24 of the Defence), but did not know how to do so.  The plaintiff’s consistent case (on trusts) is that the Transfers were based on a romantic relationship (because it was only because he was her boyfriend that she entrusted the monies and the Property to him).  The only possible inference, had she known that he had married another, was that she would have ended the relationship, and would not have made the Transfers.  The mistake, he says, was that he was not married.

C.  DISCUSSION

C1.  Appropriate procedure?

20.  The first question is whether the summary application procedure under Order 14 is appropriate in a case like this, where the plaintiff is not seeking judgment on facts which she pleads or verifies, but on facts whichthe defendant pleads and which she denies.  While the Transfers as objective facts are not in issue, the true legal character, and thus the legal rights and obligations of the parties in relation thereto, is decided primarily by the intention or state of mind of the plaintiff at the time of each Transfer, which is a question of fact, and the respective cases of the plaintiff (trust, which she is maintaining and not abandoning, and which she has affirmed by way of a statement of truth and in affirmations) and the defendant (gifts, which she expressly denies in an affirmation filed in support of the application for summary judgment) are totally inconsistent in this respect.

21.  This is, to say the least, as Mr Clough admits, “unusual”.

22.  The court can only give judgment to a plaintiff based on facts which entitle the plaintiff to judgment in law. Except in the case of defaultjudgments, such facts have to be established by way of admissions, affidavits (in cases where judgment is applied for or obtained by way of application before trial), or by evidence at trial.  Even in cases of default judgments, the facts have to be properly set out in a writ or a statement of claim which are then assumed to be true because no effective challenge is made by way of a notice of intention to defend or a defence.  But the point is that the court must have a set of facts based on which it can then give judgment.  What it cannot do is to ask to give judgment on a set of facts which the partyasking for judgment is itself saying to be untrue.

23.  In the context of summary judgment, when a plaintiff seeks to obtain the same under Order 14, he must:

(1) serve a statement of claim (Order 14, rule 1(1)).  ‌The statement of claim “must contain, and contain only, a statement in a summary form of the material facts on which the party pleadings relies for his claim” (Order 18, rule 7(1));

(2) support his application for summary judgment by “an affidavit verifying the facts on which the claim, or the part of a claim, to which the application relates is based and stating that in the deponent’s belief there is no defence to that claim or part, as the case may be” (Order 14, rule 2(1)).

24.  The court may give summary judgment unless inter alia the defendant shows that there is an issue or question in dispute which ought to be tried or that there ought for some other reason be a trial (Order 14, rule 3(1)).

25.  It is clear from the above provisions that a summary judgment can only be granted on the basis of facts as verified by the plaintiff in the affidavit in support, and, the case being defined and bound by the statement of claim, such facts must be confined to those facts as pleaded therein.  If no triable issue or other reasons for trial are shown by the defendant, then the court is entitled to accept those facts which have been pleaded, and verified on oath, as proven facts as between the parties, and to give summary judgment thereon.

26.  But where the application for summary judgment is based not on facts pleaded in a statement of claim and verified on oath by or on behalfof a plaintiff, the application falls outside the requirements of the provisions in Order 14 and cannot be granted thereunder.  In particular, I do not seehow an application for summary judgment can properly be made based onfacts not only not pleaded or verified by the plaintiff (as required by Order 14, rule 2(1)) but in fact the plaintiff still insists is untrue (namely that the Transfers were gifts).

27.  Further, if summary judgment is granted in such circumstances, it is not a judgment based on proven facts but based on facts which the beneficiary of the judgment (ie the plaintiff herself) denies to be true.  I cannot see how I can or should do that.  Judgment would have been given at a time when what the truth is on a most crucial part of the case is not resolved.  Unless I can now, at this stage, reject this denial, which I cannot (and the plaintiff is not asking me to), I do not see how it would be just to give judgment.

28.  Where a defendant has made admissions of fact, in pleadings or otherwise, which are sufficient to support a judgment, it may well be that the plaintiff can apply for and be granted judgment on admission under Order 27, rule 3, rather than go via the summary judgment route which focuses on the facts pleaded in the statement of claim.  This is not a route open to the plaintiff here because there is no admission by the defendant on the question of the state of mind of the plaintiff.

29.  Mr Ko, counsel for the defendant, refers me to §14/2/5 of Hong Kong Civil Procedure 2017 which states as follows:

“... where there is a material deviation between the statement of claim and the plaintiff’s affirmation, summary judgment ought not to be granted”.

30.  The deviation in this case is not so much between the statement of claim and the plaintiff’s fifth affirmation, which does not resile from the allegations made in the statement of claim, but is between the statement of claim (pleading trusts) and the factual basis (namely mistaken gifts) on which I am asked to give summary judgment.  However, the position must in my view be a fortiori, and, as I said above, this latter inconsistency is one which takes the matter outside the requirements of Order 14.  As Deputy High Court Judge Wilson Chan said in Li Chuen Kwai v Po Lam Construction Development Ltd (HCA 2376/2013, 24 September 2014) (cited at the above passage of Hong Kong Civil Procedure 2017) at §11(3)      :

“... an Order 14 application has to proceed on the case as pleaded, and it is those facts (as pleaded) which have to be verified on affidavit”.

31.  For this reason, in my judgment the application must be dismissed as not taken out properly (rather than for me to give leave to defend (unconditional or otherwise)).  However, and in any event, apart from this procedural difficulty, for reasons stated in the next section, I do not think that the grant of summary judgment is appropriate.

C2.  Triable issue?

32.  As I said above, the crucial factual issue is the intention or state of mind of the plaintiff when she made the Transfers, at a time when, it is agreed, the defendant had married another woman (or just about to), but the plaintiff did not know about it.

33.  The unusual feature of this case is that, unlike in almost every other application for summary judgment, the plaintiff is not asking me to dismiss the defendant’s evidence as incredible or as practically moonshine.  Rather, while not abandoning her own case which is inconsistent, she asks me to give judgment for her on the basis of what the defendant says in his pleadings.

34.  Apart from the conceptual difficulty for me to grant judgment to a plaintiff on basis of a factual situation (ie her state of mind being to make romantic gifts under a mistake) which on her own case is untrue, when she will then proceed with the rest of the claim (ie for transfers made before the Marriage) on a totally different factual basis (ie her state of mind being to transfer to the defendant as a trustee: a question of issue estoppel may arise when she pursues the return of the earlier transfers having obtained judgment on the Transfers but I need not deal with that here), even on the defendant’s pleaded case, I am of the view that no judgment should be granted by me at this stage.

35.  This is because, as I said above, the crucial issue is the state of mind of the plaintiff when she made the Transfers.  Her case that she is entitled to judgment on the defendant’s pleaded case of them being romantic gifts is premised on an argument that there is no triable issue that the Transfers were made under a causative mistake (the mistake being that the defendant was not married) which entitles her in law in effect to set aside the Transfers.

36.  While there is no dispute from the defendant that the plaintiff did not know of the fact that he was married at the time of the Transfers (or just about to in the case of the first of them), what he has not admitted is the fact that any such state of mind was causative of the Transfers in such circumstances that in law she is entitled to the return of the subject of the Transfers.  Thus, unless from the defendant’s pleaded case, in particular those passages heavily relied upon by Mr Clough, the existence of the necessary state of mind is not a triable issue, the plaintiff is not entitled to summary judgment.

37.  In Pitt v Holt [2013] 2 AC 108, Lord Walker of Gestingthorpe (with whom the other six Supreme Court justices sitting agreed) said:

“104 For present purposes a mistake must be distinguished from mere ignorance or inadvertence, and also from what scholars in the field of unjust enrichment refer to as misprediction: see Weeliem Seah, ‘Mispredictions, Mistakes and the Law of Unjust Enrichment’ [2007] RLR 93; the expression may have first received judicial currency in Dextra Bank and Trust Co Ltd v Bank of Jamaica [2002] 1 All ER (Comm) 193. These distinctions are reasonably clear in a general sort of way, but they tend to get blurred when it comes to facts of particular cases. The editors of Goff & Jones, The Law of Unjust Enrichment, 8th ed (2011), para 9‑11 comment that the distinction between mistake and misprediction can lead to ‘some uncomfortably fine distinctions’, and the same is true of the distinction between mistake and ignorance.

105 Forgetfulness, inadvertence or ignorance is not, as such, a mistake, but it can lead to a false belief or assumption which the law will recognise as a mistake. The Court of Appeal of Victoria has held that mistake certainly comprehends ‘a mistakenbelief arising from inadvertence to or ignorance of a specific factor legal requirement’: Ormiston JA in Hookway v Racing Victoria Ltd (2005) 13 VR 444, 451. That case was on the borderline between voluntary disposition and contract. It concerned prize money for a horse race which was paid to the wrong owner because the official in charge of prize money was ignorant of a recent change in the rules of racing (permitting an appeal against disqualification after a drugs test). He made a mistake as to the real winner.

...

108 The fullest academic treatment of this topic is in Goff & Jones, The Law of Unjust Enrichment, 8th ed, paras 9‑32–9‑42. The editors distinguish between incorrect conscious beliefs, incorrect tacit assumptions, and true cases of mere causative ignorance (‘causative’ in the sense that but for his ignorance the person in question would not have acted as he did). The deputyjudge’s first instance decision in Pitt v Holt [2010] 1 WLR 1199, para 50 is suggested as an example of mere causative ignorance: ‘If someone does not apply his mind to a point at all, it is difficult to say that there has been some real mistake about the point’. The Court of Appeal adopted a different view of the facts, treating the case (para 216) as one of an incorrect conscious belief on the part of Mrs Pitt that the SNT had no adverse tax consequences. The editors of Goff & Jones are, on balance, in favour of treatingmere causative ignorance as sufficient. ‌They comment (at para 9‑41, in answering a ‘floodgates’ objection):

‘denying relief for mere causative ignorance produces a boundary line which may be difficult to draw in practice, and which is susceptible to judicial manipulation, according to whether it is felt that relief should be afforded—with the court’s finding or declining to find incorrect conscious beliefs or tacit assumptions according to the court’s perception of the merits of the claim.’

It may indeed be difficult to draw the line between mere causative ignorance and a mistaken conscious belief or a mistaken tacit assumption. I would hold that mere ignorance, even if causative,is insufficient, but that the court, in carrying out its task of findingthefacts,shouldnotshrinkfromdrawingtheinferenceofconsciousbelief or tacit assumption when there is evidence to support such an inference. I shall return (paras 127 and 128 below) to the suggestion that this may involve ‘judicial manipulation.’

...

125 The evaluation of what is or would be unconscionable must be objective. Millett J identified precisely the class of beneficiaries in whose interest it would be for the forfeiture to stand(apartfromtaxconsiderationswhichmadeitdisadvantageousfor the whole family), but he did not do so in order to embark onthe impossible task of establishing the state of the consciences of minor and unborn beneficiaries. Nor (apart from a defence of change of position) would the relative prosperity of the donor andthe donees be relevant, except so far as it was part of the mistake (as in Lord Scott of Foscote’s example in Deutsche Morgan Grenfell Group plc v Inland Revenue Comrs[2007] 1 AC 558, para 87: ‘a gift of £1,000 by A to B where B is believed by A to be impecunious but is in fact a person of substantial wealth ...’).

126 The gravity of the mistake must be assessed by a close examination of the facts, whether or not they are tested by cross‑examination, including the circumstances of the mistake and its consequences for the person who made the vitiated disposition. Other findings of fact may also have to be made in relation to change of position or other matters relevant to the exercise of the court’s discretion. Justice Paul Finn wrote in a paper,‘EquitableDoctrinesandDiscretioninRemedies’publishedinRestitution:Past,PresentandFuture(edsWRCornish,RichardNolan, Janet O’Sullivan and Graham Virgo) (1998), p 260:

‘the courts quite consciously now are propounding what are acceptable standards of conduct to be exhibited in our relationships and dealings with others ... A clear consequence of this emphasis on standards (and not on rules) is a far more instance‑specific evaluation of conduct.’

The injustice (or unfairness or unconscionableness) of leaving a mistaken disposition uncorrected must be evaluated objectively, but with an intense focus (in Lord Steyn’s well‑known phrase in In re S (A Child) [2005] 1 AC 593, para 17) on the facts of the particular case. That is why it is impossible, in my view, to give more than the most tentative answer to the problems posed by Professor Andrew Burrows in A Restatement of the English LawofUnjustEnrichment(2012),p66:wesimplydonotknowenoughabout the facts.

127 I add a postscript as to the criticism made by the editors ofGoff&Jones,TheLawofUnjustEnrichment,8thed,para9‑41,already quoted at para 108 above, of

‘a boundary line which may be difficult to draw in practice, and which is susceptible to judicial manipulation, according towhether it is felt that relief should be afforded—with the court’s finding or declining to find incorrect conscious beliefs or tacit assumptions according to the court's perception of the merits of the claim.’

There is some force in this, although the term ‘manipulation’ is a bit harsh. The fact that a unilateral mistake is sufficient means that the court may have to make findings as to the state of mind, at some time in the past, of a claimant with a lively personal interest in establishing that there was a serious causative mistake. This will often be a difficult task. But as a criticism of the Court of Appeal in Pitt v Holt I would reject it. The case was heard on affidavit evidence, without cross‑examination, and the Court of Appeal was in as good a position as the deputy judge to draw inferences and make findings of fact.

128   More generally, the apparent suggestion that the court ought not to form a view about the merits of a claim seems to me to go wide of the mark.  In a passage in Gillett v Holt [2001] Ch210,225,sinceapprovedbytheHouseofLords(seeespeciallythe speech of Lord Neuberger of Abbotsbury, with which the rest of the House agreed, in Fisher v Brooker [2009] 1 WLR 1764, para 63) I said in discussing proprietary estoppel that although its elements (assurance, reliance and detriment) may have to be considered separately they cannot be treated as watertight compartments:

‘the fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine. In the end the court must look at the matter in the round.’

In my opinion the same is true of the equitable doctrine of mistake. The court cannot decide the issue of what is unconscionable by an elaborate set of rules. It must consider in the round the existence of a distinct mistake (as compared with total ignorance or disappointed expectations), its degree of centrality to the transaction in question and the seriousness of its consequences, and make an evaluative judgment whether it would be unconscionable, or unjust, to leave the mistake uncorrected. The court may and must form a judgment about the justice of the case.”

38.  Thus, according to Lord Walker, mere ignorance, even if causative, is not sufficient to set aside a gift.  The mistake has to be a causative conscious belief or tacit assumption that the state of affairs is as the transferor (mistakenly) believed it to be.  As Lord Walker said, whichI respectfully agree, the line between a mistaken conscious belief, a mistaken tacit assumption, and ignorance, is difficult to draw, and it requires a finding of fact based on evidence.  Unless I can now, on the materials before me, without a trial and cross‑examination of the plaintiff, find that on the defendant’s pleaded case the conclusion that the plaintiff made the romanticgifts under, and caused by, a conscious belief or tacit assumption that the defendant was not married, rather than under a mere ignorance that he was,is of such an inevitability that the question does not merit further consideration at a trial, or to give the defendant an opportunity of cross‑examining the plaintiff on her state of mind, I do not see how summary judgment should be granted. And I do not think that I can so find.   Indeed, the entire basis of the plaintiff’ case is one of ignorance (ie she did not know that he was married or was about to), and whether, as Lord Walker said at §105 of his judgment in Pitt v Holt, such ignorance led to an operative conscious belief or tacit assumption, must in my view be examined further at a trial.  In my view, a case of mere ignorance (causative or not) is arguable.

39.  Understandably, in her fifth affirmation (quoted at §16 above), the plaintiff puts her state of mind in terms of a conscious belief that the defendant was not married.  However, I am of the view that this is a matter which must be examined further at trial. What is also understandable is that she does not, in her fifth affirmation, positively assert a connection as a matter of fact between such a belief with the act of making a romantic gift .  

40.  Further, for a gift to be revoked because of mistake, the mistake must be:

“of so serious a character as to render it unjust on the part of the donee to retain the property given to him”.

See Ogilvie v Littleboy (1897) 13 TLR 399 at 400 per Lindley LJ, cited by Pitt v Holt at §101 by Lord Walker, who at §124 said that that translates by equity into the cumbersome but familiar term of “unconscionableness”          .  

41.  While the mistake of the person seeking to set aside a transfer need not be known to or induced by the transferee (Pitt v Holt at §114), how the mistake came about, the defendant’s role in it, and its gravity and consequence, are all questions of fact bearing on the question of unconscionableness which, as Lord Walker said, must be assessed by a close examination of the facts.  ‌This is another reason which in my judgment ought to be examined at trial.

42.  Mr Clough relies on the four questions posed by Ribeiro PJ in Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd (2004) 7 HKCFAR 79 at §66 and suggests that restitution should be ordered because the defendant was unjustly enriched at the plaintiff’s expense.  However, while the categories of unjust enrichment are not closed (CTN Cash and Carry Ltd v Gallaher Ltd [1994] 4 All ER 714 at 720c–d per Sir Donald Nicholls VC), as Mann J said in Uren v First National Home Finance Ltd [2005] EWHC 2529 (Ch) at §§16 and 18:

“... it seems to me that it has not been established that the authorities have yet moved to a position in which it can be said that there is a freestanding claim of unjust enrichment in the sense that a claimant can get away with pleading facts which he says leads to an enrichment which he says is unjust ... it would follow that the claim fails because it does not plead facts which are capable of bringing the case within one of the established restitutionary claims or some justifiable extension of them”.

I do not read Shanghai Tongji as approving such a free standing claim.  ‌Inthat case, the unjust element relied upon is the “well‑recognized category” of total failure of consideration (§76).

43.  The plaintiff must therefore bring herself within one of the established grounds of restitution (if she is suggesting some extension of such grounds then summary judgment is hardly appropriate).  In this case, the “unjust” element advocated is that the defendant received all the gifts from the plaintiff without disclosing his marriage, which is in my judgment in substance a claim of mistake induced by the defendant’s conduct, and unconscionableness.   If so, my analysis above as to why the question of mistake, and unconscionableness, must go to trial applies.

44.  Mr Clough further argues that whether on the version pleaded by the plaintiff or by the defendant, the former is bound to win and so she ought to be given judgment now.  However, as discussed above, I do not agree, because if the finding is that she made the Transfers as romantic gifts out of mere ignorance, then she will not succeed.

45.  I also agree with Mr Ko that the “fraud exception” under Order 14, rule 1(2)(b), applies.  The plaintiff’s case is that the defendant “misled” (§8 of the plaintiff’s fifth affirmation, see §16 above) her regarding their relationship, which is an allegation of deliberate dishonesty, and therefore fraud in the wide or liberal meaning, as stated by the Court of Appeal in Pacific Electric Wire & Cable Co Ltd v Harmutty Ltd [2009] 3 HKLRD 94 at §31 per Rogers VP and in Zimmer Sweden AB v KPN Hong Kong Ltd [2016] 1 HKLRD 1016 at §18(6) per Yuen JA.  This allegation, which is not admitted, forms the basis of the plaintiff’s case of unconscionableness which she has to establish for her to succeed on the mistaken gift point, and so in this case the allegation of fraud would have to be made for the plaintiff to establish or maintain her claim under mistaken gift.

D.  CONCLUSION

46.  In the premises, I decline to give summary judgment.  ‌Because of the reasons in section C1 and §45 above, in my view I should dismiss the Summons rather than granting leave to defend.  I do so with an order nisi that costs be to the defendant to be paid by the plaintiff to be taxed if not agreed.

47.  I thank counsel for their assistance.