THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD v. CHAM WAI SING AND ANOTHER

HCMP 1302/2025

[2026] HKCFI 2937

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1302 OF 2025

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J U D G M E N T

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A. Introduction

1.  By originating summons herein, the plaintiff bank (“P”)  seeks an order against the 1^st and 2^nd defendants (“D1” and “D2” respectively, and “Ds” collectively)  for: (i)  payment of all sums of money due to P under a mortgage entered into with P; and (ii)  delivery up of vacant possession of the property charged under the mortgage namely House C3 of Chateau Scenic, Nos. 12-20 Ma Ying Path, Shatin, New Territories (the “Property”).

2.  At the hearing before me, P was represented by Ms. Valerie Kwok, D1 was represented by Ms. Joanna Wong, and D2 was represented by Mr. Owen Kun.

3.  P sought summary resolution of the proceedings in its favour. Ds argued that their defences to the action raised triable issues, such that the matter should be proceed to a trial with oral evidence and/or as if begun by writ.

B. Background

4.  D1 and D2 are registered owners of the Property, and are husband and wife respectively. The Property is the matrimonial home.

5.  The mortgage in question (the “Mortgage”)  is dated 31 May 2021 and is between P as Lender, Galaxy Food Limited (“Galaxy”)  as Borrower, and Ds as Mortgagors. Ds granted the Mortgage over the Property as security for all monies payable by Galaxy to P.

6.  D1 is a director and shareholder of Galaxy.

7.  P provided Galaxy with facilities under three sets of facility letters and one finance lease agreement. 

8.  There is no dispute: as to the outstanding amounts under the facilities granted by P to Galaxy; that there were events of default; that demands for repayment were made by P to Galaxy and subsequently by P to Ds; and that payment has not been made.

9.  Ds seek to avoid the orders sought by P on two bases: 

(1)  an alleged oral agreement reached around 2017 to the effect that D1 would transfer/gift the Property to D2; and

(2)  alleged undue influence of D1 over D2 in respect of the execution of the Mortgage, as to which P is said to have been put on inquiry and failed to take reasonable steps.

C. Evidence

10.  P filed affirmation evidence from: (i)  Lam Lok Hin Sam; and (ii)  Lam Ying Ha; each a Senior Manager of P’s Special Credit Unit.

11.  Ds each filed 2 affirmations.

D. Principles on summary judgment in mortgage actions

12.  In a mortgage action, a plaintiff may seek a summary determination of the matter pursuant to Order 28 rule 4[1].

13.  The approach is akin to an application for summary judgment under Order 14, save that the burden is not cast upon the defendant. Once the plaintiff’s entitlement to summary judgment is demonstrated prima facie on the evidence, the burden falls on the defendant to show that he or she has an arguable defence to the claim and/or there are triable issues.

14.  The court asks whether the defendant’s version of events is believable, as opposed to which version of events is to be believed; and whether the defendant has raised an arguable defence in law[2].

E. First alleged defence: oral agreement to transfer the Property to D2

Ds’ evidence on alleged agreement

15.  According to Ds’ affirmations[3], after two decades their marriage started to deteriorate around the mid-2010s, when D1 started to spend more time in Mainland China and less time in Hong Kong. Over time, the relationship deteriorated sufficiently that that they argued frequently, and D2 threatened to divorce D1 and split the family’s assets.

16.  However, through the assistance of D2’s siblings in particular her elder sister, Ds agreed to reconcile around early 2017. D2 agreed not to divorce D1 and claim ancillary relief against him, in return for D1 transferring his interest in the Property to D2 as a gift, which would be effected upon D2’s reasonable notice to D1 (the “Agreement”).

17.  The Agreement was said to be oral only, and witnesses by the elder sister.

18.  The original intention was transfer the Property to D2’s sole name immediately, but this was not done when Ds discovered the stamp duty implications of so doing. Therefore, it was agreed that whilst they would remain joint tenants of the Property, D2 would be the real and beneficial owner of the whole of the Property, and once they could afford to pay the stamp duty, D1 would transfer the Property to D2 on her request.

19.  D2’s evidence was that since the Agreement, her relationship with her husband improved, and she gave up the idea of pursuing divorce and ancillary relief against him, in which case she might have been awarded a significant part of his assets.

20.  In addition, as complete beneficial owner of the Property, D2 began to pay the outgoings of the property such as utilities, management fees and rates from her own pocket. For utilities, she said she would settle them at convenience stores and could not currently locate records. For rates, she would settle them by way of bank transfer, and she produced a bank passbook showing certain rates transactions from April 2024 to October 2025. For management fees, she said that she settled them by cheque payable to a Mr. Lau, and she produced a cheque dated 16 January 2025 in favour of Mr. Lau.

Arguments and analysis

21.  Ds argued that there was a triable issue as to whether the above evidence led to a common intention constructive trust (“CICT”), whereby at the time of the alleged Agreement, D2 became the full beneficial owner of the Property with D1 holding his share of it on CICT for D2.

22.  The requirements for CCIT were summarised by Au-Yeung J in Chan Chun Ni v. Chan Ngai Keung [2022] HKCFI 3031, at §§19-21, which I will not here repeat.

23.  Where the CICT is said to arise at a time subsequent to the acquisition of the Property, the relevant common intention is less easily inferred than in a case where the common intention is said to pertain at the time of acquisition. In this situation, the court will be very slow to infer from conduct alone that the parties intended to vary existing beneficial interests, in the absence of an express post-acquisition agreement. See: Chan Chui Mee v. Mak Chi Choi [2009] 1 HKLRD 343 per Johnson Lam J (as he then was)  at §§34 & 35.

24.  Ds argued that the express agreement reached had the effect of creating at CICT which transferred the beneficial interest in the Property to D2. As to detrimental reliance, Ds pointed to D2’s evidence as to the outgoings which she shouldered since the Agreement, and her decision not to divorce D1 (saying also that the contributions could justify an inference of a CICT). Ds argued that since the Agreement was created ahead of the Mortgage, it would be unfair for D2 to be denied her interest in the Property. Since there were factual disputes as to the trust arrangement between Ds, the matter should proceed to trial rather than be resolved summarily.

25.  P argued that:

(1)  The alleged oral Agreement was incredible, including in light of; (i)  a Consent to Subscribe to the Land Registry’s E-Alert Service for Authorized Institutions, which both Ds signed as “owners” of the Property; and (ii)  Recital A of the Mortgage stating that the Mortgagor (defined as both D1 and D2)  is the registered and beneficial owner of the Property.

(2)  The evidence of D2’s contributions was in fact very limited and flimsy and covered only a handful of payments since the alleged Agreement.

(3)  As noted above, cogent evidence is required to prove a post-acquisition CICT.

(4)  Any agreement to transfer the interest in the Property from D1 to D2 did not create any equity affecting the Property since: (i)  a disposition of an interest in land is required by statute to be in writing; (ii)  the alleged Agreement was unsupported by consideration; and (iii)  it amounted at best to an imperfect gift, but equity will not assist a volunteer to perfect an imperfect gift where the donor has not taken steps to complete the transfer (by execution of a formal transfer instrument).

(5)  In any event, P was a bona fide purchaser for value of a legal interest in the Property by way of Mortgage. Accordingly, any equitable interest of D2 must yield to P’s legal interest unless it is shown that P had notice: Hong Kong Sai Kung Ngong Wo Resort Development Ltd v. Zhang Xianjie [2022] HKCFI 1710 at §§47-48. There was no evidence of constructive notice, and in fact on Ds’ case they had misrepresented to P their respective interests in the Property when procuring the Mortgage and loan facilities.

(6)  Further, Ds having executed the Mortgage containing recital A as described above, a contractual estoppel arose, preventing them from advancing their case on the basis that D2 is the sole beneficial owner of the Property.

26.  In my view, this line of defence can be disposed of very shortly.

27.  I do no need to consider all of the parties’ arguments, since I do not see any answer to the point that P was a bona fide purchase of the Property without notice such that, whatever equitable interest D2 might be able to establish, takes no effect as against P.

28.  When asked about this point during oral submissions, counsel for Ds were unable to offer any submission.

29.  Accordingly, I consider that no triable issue has been raised by the defence based on CICT.

F. Second alleged defence: undue influence

30.  Ds argued that the Mortgage was executed by D2 under the undue influence of D1. Further, P was put on inquiry, and failed to take “reasonable steps” as required. 

Ds’ evidence on undue influence

31.  D2’s evidence was to the following effect[4].

32.  D2 did not recall the details of the execution of the Mortgage, but she remembered that in 2021, D1 asked her to go to a solicitor’s firm in Central to execute certain documents. On the way there, she asked him what was happening, and he told her that she had to execute certain documents for Galaxy to borrow money, told her not to make a fuss, that he would do the talking with the solicitors, and that she just had to sign. She did not question D1 as she believed in him.

33.  When they arrived at the solicitor’s office, D1 and D2 both went to a room to sign documents. There was a male present from the office, D2 did not know who he was, D1 did all the talking, and she did not understand their conversation. D2 was then passed a document to sign, which she was reluctant to do, was not taken through it, and did not understand it as it was in English. She asked the male what it was about and he said it was to mortgage the Property.

34.  D2 was shocked, started to lose her temper, and questioned D1 as to what had happened. The other male left the room, D1 asked her to sign the document as it was for his company, and confidently assured her that everything would be fine and the Property would not be affected and taken away. She believed and trusted her husband, and in the end signed for this reason, though she was reluctant to since the Property was the only residence she had in Hong Kong.

35.  D2 recalls that she was not taken to an independent room to sign the document with the male, nor was she given a copy of the document. She was also not provided with any suggestion of independent legal advice as to the Mortgage.

36.  Had the Mortgage and related documents been fully explained to her, she would not have agreed to sign them.

37.  D1’s evidence in relation to undue influence, was to similar effect[5].

P’s evidence on undue influence

38.  P relied on the following documents in relation to alleged undue influence:

(1)  A Letter to Surety addressed by P to Ds, indicating inter alia in bold letters that P required that Ds seek legal advice before signing the security, and they would need to confirm to P the firm of solicitors advising them. The Letter to Surety enclosed a Nomination Form for solicitor for Ds, a draft Letter of Instruction to Solicitor,  and a copy of the facility letter evidencing the obligations to be guaranteed and secured. The Letter to Surety was signed by both Ds.

(2)  A Letter of Instructions to Solicitors which, inter alia, advised the nominated solicitors of steps which should be taken in providing independent legal advice to Ds in respect of the security, including explaining to the Surety in a face-to-face meeting in the absence of the Borrower the security and various features of it. The Letter of Instructions contained a signed and chopped confirmation dated 27 May 2021 by Chan Pak Shing, solicitor of Messrs. CK Mok & Co, confirming that the said solicitor had (i)  explained the terms of the security to the Surety and complied with the applicable Law Society of Hong Kong guidance note; and (ii)  complied with the terms of the letter of instructions and witnessed the Surety’s signature to the Security and the related Explanatory Note.

(3)  An Explanatory Note written in Chinese and English, explaining the terms of the Mortgage, which was signed by both Ds and bore the signature and chop of Chan Pak Shing of CK Mok & Co as witness.

(4)  A Nomination Form signed by Ds confirming to P that they would instruct Chan Pak Shing of CK Mok & Co to act on their behalf in relation to the giving of security, and that P would ask for and rely upon a certificate from the said solicitor confirming Ds’ understanding of the security.

(5)  An exchange of letters dated January/February 2026 between P and its own solicitors acting in the transaction asking whether Messrs. CK Mok were instructed to advise the Mortgagors on the Mortgage, and whether there was any reason to believe that the Mortgagors were not properly advised on the nature and legal effect of the Mortgage. The solicitors replied to the effect that they believe that Chan Pak Shing of CK Mok & Co had interpreted and explained the content of the documents to the surety; it was also the practice to advise the surety the legal effects of the Mortgage; and they were not aware of any reason the Mortgagors were not properly advised on the nature and legal effect of the Mortgage.

39.  In reply evidence[6], D2 said that she had no recollection of seeing the various documents referred to at §38(1)  to (4)  above. The signature on them appeared to be hers, though she could not completely confirm this. She did not know who was Chan Pak Shing, and noticed that CK Mok & Co was located in a building to which she had never been. There was no face-to-face meeting with Chan Pak Shing, and the nature and effect of the Mortgage and related documents were never explained to her. According to her recollection she only went to a solicitor’s office at a location which should be that of P’s solicitors. She now recalled that she was asked by the male to sign numerous places in various documents. The nature of the documents was not explained, and there was no suggestion of seeking independent legal advice.

40.  D2 also adduced evidence of an extract from a legal journal indicating that Chan Pak Shing ceased to be a partner of CK Mok & Co on 30 September 2022, and the firm closed on the same day.

41.  D1’s reply evidence was to similar effect[7].

The law of undue influence

42.  The applicable principles were summarised by Godfrey Lam J (as he then was)  in Bank of China (Hong Kong)  Ltd v. Wong Kam Ho [2014] 1 HKLRD 41 at §§25 to 34 (with underlining added): 

“25. Undue influence is a doctrine of equity that enables the court to strike down a transaction where the intention to enter into it had been procured unconscionably. This may arise where the claimant had been overborne or coerced by another person, or where a person in whom the claimant had reposed trust and confidence abused that relationship in procuring the claimant’s consent. The forms that undue influence can take are infinitely varied and cannot be exhaustively set out, but they all result in the conclusion that the consent and intention of the claimant is so vitiated that it ‘ought not fairly to be treated as the expression of a person’s free will’: Etridge, supra, [7] per Lord Nicholls.

26. Whether or not a transaction was brought about by the exercise of undue influence is a question of fact. The burden of proving this fact lies with the person who asserts it, that is to say, generally, the person who claims to have been unduly influenced. As with other matters of fact, this question can be determined by the court by reference to direct evidence, such as the oral evidence of the person complaining of undue influence that she signed the document in question as a result of being subject to ‘excessive pressure, emotional blackmail or bullying’, or by inference from other, indirect evidence.

27. What facts can and should be found by inference is a question that depends on the circumstances of each case. The question is ‘whether the evidence justifies the inference that, on a balance of probabilities, the impugned transaction was procured by undue influence, that is to say, by an abuse by the allegedly dominant party of the trust and confidence reposed in him by the allegedly subservient party’: Li Sau Ying v Bank of China (Hong Kong)  Ltd (2004)  7 HKCFAR 579, per Lord Scott NPJ [34].

28. In a case where a man is said to have unduly influenced his wife, the fact that the wife has reposed trust and confidence in the husband in relation to the management of her financial affairs, coupled with the fact that the transaction is one that calls for explanation, are normally sufficient basis, absent evidence to the contrary, to infer that the transaction was brought about by the husband’s undue influence over the wife. In Etridge, supra, Lord Nicholls said [14]:

Proof that the complainant placed trust and confidence in the other party in relation to the management of the complainant’s financial affairs, coupled with a transaction which calls for explanation, will normally be sufficient, failing satisfactory evidence to the contrary, to discharge the burden of proof. On proof of these two matters the stage is set for the court to infer that, in the absence of a satisfactory explanation, the transaction can only have been procured by undue influence. In other words, proof of these two facts is prima facie evidence that the defendant abused the influence he acquired in the parties’ relationship. He preferred his own interests. He did not behave fairly to the other. So the evidential burden then shifts to him. It is for him to produce evidence to counter the inference which otherwise should be drawn.

29. The concept of a transaction that calls for explanation has been put in different ways, such as a transaction that is ‘not readily explicable by the relationship of the parties’ (Etridge, supra, [21], per Lord Nicholls), a transaction that is ‘not to be reasonably accounted for on the ground of friendship, relationship, charity, or other ordinary motives on which ordinary men act’ (Allcard v Skinner (1887)  LR 36 ChD 145, 185, per Lindley LJ; Etridge, supra, [22], [29], per Lord Nicholls), and a transaction that ‘constituted an advantage taken of the person subjected to the influence which, failing proof to the contrary, was explicable only on the basis that undue influence had been exercised to procure it’ (National Westminster Bank plc v Morgan [1985] AC 686, 704, per Lord Scarman; Etridge, supra, [25], [29], per Lord Nicholls). As will be seen, it is a concept quite separate and different from the question whether the third party is put on inquiry, which arises at the second stage of the analysis.

30. Many of the cases that have come before the courts in both the United Kingdom and Hong Kong concern guarantees or securities provided by wives for the husbands’ business debts. On this type of cases, Lord Nicholls said in Etridge, supra, [27],[30] and [31]:

[27] The problem has arisen in the context of wives guaranteeing payment of their husband’s business debts.

…

[30] I do not think that, in the ordinary course, a guarantee of the character I have mentioned is to be regarded as a transaction which, failing proof to the contrary, is explicable only on the basis that it has been procured by the exercise of undue influence by the husband. Wives frequently enter into such transactions. There are good and sufficient reasons why they are willing to do, despite the risks involved for them and their families. They may be enthusiastic. They may not. They may be less optimistic than their husbands about the prospects of the husbands’ businesses. They may be anxious, perhaps exceedingly so. But this is a far cry from saying that such transactions as a class are to be regarded as prima facie evidence of the exercise of undue influence by husbands.

[31] I have emphasised the phrase ‘in the ordinary course’. There will be cases where a wife’s signature of a guarantee or a charge of her share in the matrimonial home does call for explanation. Nothing I have said above is directed at such a case.

31. Similarly, in Etridge, supra, at [159] and [162], Lord Scott said:

[159] … In cases where experience, probably bitter, had led a wife to doubt the wisdom of her husband’s financial or business decisions, I still would not regard her willingness to support those decisions with her own assets as an indication that he had exerted undue influence over her to persuade her to do so. Rather I would regard her support as a natural and admirable consequence of the relationship of a mutually loyal married couple. The proposition that if a wife, who generally reposes trust and confidence in her husband, agrees to become surety to support his debts or his business enterprises a presumption of undue influence arises is one that I am unable to accept. To regard the husband in such a case as a presumed ‘wrongdoer’ does not seem to me consistent with the relationship of trust and confidence that is a part of every healthy marriage.

…

[162] In the surety wife cases it should, in my opinion, be recognised that undue influence, though a possible explanation for the wife’s agreement to become surety, is a relatively unlikely one. O’Brien itself was a misrepresentation case. Undue influence had been alleged but the undoubted pressure which the husband had brought to bear to persuade his reluctant wife to sign was not regarded by the judge or the Court of Appeal as constituting undue influence. The wife’s will had not been overborne by her husband. Nor was O’Brien a case in which, in my opinion, there would have been at any stage in the case a presumption of undue influence.

…

34.  It seems to me that even if one accepts this evidence at face value, it does not demonstrate any undue influence exercised by Yeung.  It is said that Lee completely trusted Yeung, and that she signed the document because Yeung told her to do so, without knowing what it was that she signed.  I accept there was a relationship of trust and confidence.  But such trust is not unusual between husband and wife.  It is as much in Hong Kong as in the United Kingdom ‘a part of every healthy marriage’ (per Lord Scott in Etridge, supra, [159]).  In my opinion, the transaction is not one that calls for explanation in the sense described in [29] above. The business of Wing Fat was the business of Yeung (jointly with Wong), who was the breadwinner of the family.  What Yeung earned from that business would be the income of the family.  Lee has a real interest in seeing that business prosper, and therefore in providing her guarantee and security over the Property required for the borrowing necessary for the business.  The Property, which they jointly held, was acquired with funds earned from the husband’s previous business and had been charged before more than once for bank financing to support [the] husband’s business.  In the transaction in question, Yeung, the husband, also gave a guarantee for Wing Fat’s debts in favour of the bank.  The fortunes of the husband and wife were tied together.”  

43.  In Li Sau Ying v. Bank of China (Hong Kong)  Ltd (2004)  7 HKCFAR 579, Lord Scott of Foscote NPJ expressed views to the effect that less emphasis should be placed (at least in “class 2B” cases)  on any presumption of undue influence, with the focus simply on whether the evidence justifies an inference that, on a balance of probabilities, the impugned transaction was procured by undue influence, that is to say, an abuse by the allegedly dominant party of the trust and confidence reposed in him by the allegedly subservient party: §§27 to 34.

44.  On the second question whether a bank is “put on inquiry” as to undue influence, the law imposes a low threshold. The bank is put on inquiry whenever a wife offers to stand surety for her husband’s debts. See: Wong Kam Ho §55, citing Royal Bank of Scotland plc v. Etridge (No. 2) [2002] 2 AC 773 at §§44-48, 84, 108 and 110; Vinson Finance Limited v. Chu Qingzhu and Anor [2022] HKCFI 449 per Cheng J at §35; One Savings Bank plc v Waller-Edwards [2025] 2 WLR 1263 per Lady Simler JSC at §§27, 32.

45.  On the third stage of reasonable steps (if the bank is put on inquiry), the bank has to take reasonable steps to satisfy itself that the wife has had brought home to her, in a meaningful way, the practical implications of the proposed transaction. The bank is not required to see to it that the wife understood the risks, but to take reasonable steps to bring her to an understanding of the implications. What amounts to reasonable steps will depend on the facts of each case. See: Etridge §54; Wong Kam Ho §59; Li Sau Ying §39.

46.  In Etridge, Lord Nicholls established a protocol (the “Etridge Protocol”)  which banks should follow if they choose to take reasonable steps by means of obtaining a certificate/confirmation from a solicitor acting from the wife, that the wife has been appropriately advised. See: Etridge §79; One Savings v Waller-Edwards §§33 & 34.

47.  Mr. Kun drew attention to the Court of Appeal’s judgment in Sun Hung Kai Investment Services Ltd v. Quality Prince Ltd (unreported, CACV 178/2009, 14 May 2010), which contains passages signaling caution in respect of the summary resolution of allegations of undue influence, given the fact-sensitive nature of the defence: §§36 & 42. Conversely, Ms. Kwok for P drew attention to various Hong Kong decisions in which summary resolution dismissing an alleged defence of undue influence was, on the facts of the particular case, considered appropriate.

The first question: whether there is a triable issue that D1 exercised undue influence over D2

48.  For the following reasons, I do not find Ds’ case that D2 signed the Mortgage under the undue influence of D1, to be credible and/or reasonably arguable.

49.  First, I consider that it has been shown that Ds have given inaccurate evidence on affirmation. In her first affirmation, D2 made repeated references to being a housewife, taking care of her husband whilst he was the breadwinner, and accordingly not having any solid commercial or business experience.[8]

50.  This is, however, contradicted by objective evidence adduced by P. A press release issued by InterContinental Grand Stanford Hotel describes D2 as Director of Housekeeping, and indicates that she has been working at the hotel for 30 years. Her duties are described as overseeing the florist, linen and uniform office[9]. Similarly, a newspaper articles shows that in 2011 D2 was interviewed about her 30 years in the field, including references to her role as Director of Housekeeping, having a degree in hotel management, and being promoted to supervisor at an early stage before her current role. In my opinion, the article suggests that D2’s role is managerial.

51.  I have considered the explanations given in D2’s second affirmation, but I am not persuaded that the original affidavits gave a fair account of the facts. 

52.  In my view, this undermines the credibility of Ds’ assertions as to the circumstances in which the Mortgage was signed, and further, shows that D2 was likely more sophisticated than portrayed in Ds’ evidence.

53.  Second, and importantly, on the basis of D2’s own version of events, I am not persuaded that there is a triable issue raised of undue influence by D1. 

54.  It is part of D2’s own evidence that she knew that the document she signed was a mortgage, at the time she signed it. The tenor of her evidence is whilst she was reluctant to sign the document once she knew that, she was reassured by her husband, trusted him, and on that basis signed despite her reluctance.

55.  In my opinion, this lacks the character of facts sufficient to amount to undue influence.

56.  As noted in the case law cited above, undue influence may arise where the claimant has been overborne or coerced, or where a person in whom trust and confidence has been reposed abused the relationship by procuring the claimant’s consent; and/or where the consent and intention of the claimant is so vitiated that it ought not fairly to be treated as the expression of a person’s free will. The case law further contains reference to excessive pressure, emotional blackmail or bullying.

57.  In short, I do not think that D2’s assertions to the effect that she was persuaded to sign by her husband’s reassurances and the trust she placed in him, are sufficient[10]; particularly where she knew she was signing a mortgage.

58.  Further, insofar as reliance is placed on the notion that the transaction is one which is to D2’s disadvantage or “calls for explanation”, the case law shows that in the ordinary course, that is not the case where a wife stands surety for her husband’s business debts: see excepts above especially Wong Kam Ho citing Etridge.

59.  Mr. Kun for D2 argued that D1 had misrepresented the position since Ds say D1 told D2 that “everything would be fine and the Property would not be affected and taken away”. However, I take the view that on D2’s own evidence, this was in the nature of reassurance rather than misrepresentation. I do not think it is credible that D2 would have taken D1 to mean that the Property could not be taken away as she must have understood essentially what a mortgage meant. It is her own evidence that she knew that she was signing a mortgage and was reluctant to sign since the Property was her only residence in Hong Kong.

60.  I refer also in this respect to Etridge at §§32 & 33. Undue influence has a connotation of impropriety, and means that influence has been misused. Where a husband is forecasting the future of his business, and expressing hopes or fears, a degree of hyperbole may be only natural; and the courts should not too readily treat such exaggerations as misstatements. Inaccurate explanations of a proposed transaction are, however, a different matter.

61.  Third, I think there is some force in P’s argument that the notion that D2’s will was overborne by D1 does not sit well with Ds’ case on the alleged Agreement, which is to the effect that D2 was willing to divorce D1 and was only persuaded not to by an Agreement to transfer the beneficial interest in the Property to her. In addition, it is D2’s own evidence that had the Mortgage and related documents been properly explained to her, she would not have agreed to sign them, which if correct, further suggests that D2 was in fact able to stand up to her husband if required. Compare Standard Chartered Bank (Hong Kong)  Ltd v. Pak Kwan Ho [2018] HKCFI 523 per DHCJ To at §43.

62.  For these reasons taken cumulatively, I am not persuaded that there is a triable issue that the execution by D2 of the Mortgage and related documents was procured by the undue influence of D1.

63.  Given this finding, it is not strictly necessary to consider the subsequent stages of the analysis on undue influence, but for completeness I will briefly set out my views on those issues below.

The second question: whether P was put on inquiry

64.  As noted in the case law cited above, the threshold here is low. The bank is put on inquiry whenever a wife offers to stand surety for her husband’s debts.

65.  Accordingly, P would have been put on inquiry.

The third question: reasonable steps

66.  As set out above, there is a factual dispute as to whether Ds in fact received legal advice from an independent solicitor. Mr. Kun argued that this could not be resolved summarily, and amounted to a triable issue.

67.  However, I have sympathy for Ms. Kwok’s submission that, irrespective whether Ds in fact met with and received advice from a solicitor of Messrs. CK Mok & Co, from P’s own perspective there was every reason to believe that they had, and P was entitled to rely on (amongst other things)  the confirmation received from the solicitor as to the legal advice which had been given.

68.  I also have sympathy for the submission that, given all the materials relied upon by P as set out at §38 above, P had done sufficient to discharge its duty to take reasonable steps.

69.  Having said this, I am cognisant that what is sufficient to amount to reasonable steps is, ultimately, fact-sensitive.

70.  In addition, I think that there is at least room for debate in this case whether the Etridge Protocol was, strictly speaking, complied with. For example, that protocol requires that the bank should take steps to check directly with the wife the name of the solicitor she wishes to act for her (Etridge §79(1)). I consider it at least arguable whether this was done, on the basis of the documents. In addition, there may be debate as to whether sufficient was done to ensure that the solicitor advised the wife in a meeting without the presence of the husband, as is required[11].

71.  On balance, I consider that there is a triable case or at least room for sensible debate, on the question of reasonable steps. Accordingly, I would not have resolved the proceedings in P’s favour summarily, had I taken a different view on the first question, dealt with above.

G. Conclusion and disposition

72.  For the above reasons, I conclude that P has established its entitlement to the relief sought in the origination summons on a summary basis, and that there is no triable issue raised by Ds’ alleged defences.

73.  Ds raised no dispute as to the form of the order sought by Ps, save that Ds requested that if an order for vacant possession was made, the period of time for delivery of vacant possession be 3 months rather than 28 days. 

74.  In this regard, Ds prayed in aid their age, that the Property is the matrimonial home in which they have lived for many years, that Ds would need more time to locate alternative accommodation, and that there was evidence of efforts currently being made by Ds to sell the Property in which case there would be sufficient funds to repay the amounts owed to P.

75.  In written submissions, Ds also made some reference to liberty to procure the sale of the Property and consequential directions; though the particular consequential directions were not specified, and this was not dealt with in oral submissions.

76.  P relied on Fubon Bank (Hong Kong)  Limited v. Ng Wai Kong [2021] HKCFI 1559 at §10 for the proposition that where the sum under a mortgage has become due the mortgagee is entitled as of right to an order for possession. The court has no jurisdiction to decline it with the exception of an adjournment for a short time to afford a mortgagor a chance of paying off the mortgage in full, which should not be done if there is no reasonable prospect of payment occurring.

77.  P argued that a period of 28 days was sufficient, and that Ds had been on notice of the proceedings for a considerable amount of time.

78.  I accept that P is entitled to possession but consider that ultimately, the time period given for delivery of possession is within the court’s discretion. Given the matters relied upon by Ds as set out above, I will in this case grant them 3 months to deliver vacant possession.

79.  I do not see the warrant for any additional orders or directions as to the sale of the Property as referred to in D2’s Skeleton Submissions, and I consider that the authorities referred to therein concern distinguishable scenarios. Further, this point was not elaborated orally.

80.  Accordingly, I will make orders as per the draft order attached to P’s Skeleton Submissions at paragraphs 1 to 3, save that the amount of time provided for at paragraph 2 should read “within 3 months” rather than “within 28 days”.

81.  I accept P’s submission that, in accordance with the provisions of the Mortgage, P should be awarded from Ds its costs of the origination summons on a solicitor and own client basis.

82.  I make an order nisi to this effect, with the costs to be summarily assessed if not agreed, such order to become final within 14 days in the absence of any application to vary.

83.  I have received P’s statement of costs for summary assessment, and direct that any statement of objections should be filed within 7 days.

84.  Finally, I thank counsel for their assistance with this matter.