TING YUK HING v. XIAO ZHISEN

CACV399/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL 399 OF 2004

(ON APPEAL FROM DCCJ No. 6212 OF 2002)

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JUDGMENT

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Hon. Yuen JA:

1.  This is the Defendant’s appeal from an order of H.H. Judge C.B, Chan dated 24 September 2004 giving summary judgment to the Plaintiff in the sum of $500,000 with interest at judgment rate from 5 October 2002 to date thereof and thereafter at judgment rate until payment.

2.  On 18 December 2004, the judge gave the Defendant leave to appeal. 

Background facts

3.  The Plaintiff Ting Yuk Hing is now 81 years of age.  Ting Wai Ming, who is her next friend in these proceedings by an order made under the Mental Health Ordinance on 5 September 2002, is her half-brother.  The Defendant is her sister’s son.  However, according to a declaration made by the Plaintiff under the Oaths and Declarations Ordinance in July 1993 before a solicitor at Messrs Gallant YT Ho & Co., she had adopted the Defendant since he was 1 month old, had brought him up in the PRC until she left to work in Hong Kong when he was 6 years old, and thereafter sent money for his maintenance and education.  Their relationship was confirmed in a PRC notary’s certificate in September 1993.

4.  The Plaintiff had a flat in Reclamation Street ("the flat") where she had lived.

5.  On 17 March 1997, the Plaintiff made a will drafted by Gallant YT Ho & Co. appointing the Defendant (whom she referred to as her "adopted son") as her sole executor and giving her entire estate to him.

6.  On 26 June 1997, shortly after the Plaintiff moved to a home for women run by the Salvation Army, she made another will (in Chinese) giving the flat, cash and residuary estate to the Defendant, whom she again referred to as her "adopted son".

7.  On 8 July 1998, the Plaintiff and the Defendant went to Gallant Y T Ho & Co. where instructions were given for the transfer of the flat (which had been let to a tenant).  A printed form in Chinese ("the Chinese document") was signed by the Plaintiff and the Defendant which read as follows (with handwritten parts in italics):

This may be translated as follows:

"Re: No. 7 Reclamation Street, 5^th floor, Yaumatei, Kowloon.

We confirm that in relation to the above property  the purchase price of the sale and purchase, the mortgage loan of the mortgage, the rental deposit of the tenancy agreement etc. rates, government rent, management fees, rental deposit, etc. Hong Kong dollars — and/or all other moneys receivable were/shall be settled by us outside.  The solicitors’ firm is not required to deal with these matters.  The solicitors’ firm shall not be held liable if any dispute arises between us as regards the aforesaid moneys. 

To:    Messrs Gallant Y T Ho & Co.

Ting Yuk Hing

Xiao Zhisen

8 July 1998"

8.  At the solicitors’ office, the Plaintiff and the Defendant also executed two documents, both dated 10 July 1998, being (i) an Agreement for Sale and Purchase whereby the Plaintiff agreed to sell and the Defendant agreed to buy the flat for $500,000, and (ii) an Assignment of the flat.

9.  Clause 1(b) of the Agreement for Sale and Purchase provided that the purchase price of $500,000 "shall be paid on Completion Date" which was stipulated to be 10 July 1998 (the same day).

10.  The Assignment recited that "in consideration of the sum of HK$500,000 paid by the Purchaser to the Vendor (receipt whereof is acknowledged)", the Plaintiff assigned the flat to the Defendant.

11.  Both the Agreement and the Assignment had been interpreted to the parties by a clerk at the solicitors’ office.

12.  The Plaintiff had apparently moved from the Salvation Army women’s home to a nursing home in May 1998.  Then in February 1999, the Plaintiff moved to another nursing home, the Greenery Elderly Home, where she stayed for a year.  In February 2000, she transferred to a home run by the Yan Chai charitable organization.  There was apparently a dispute between the half-brother and the Defendant regarding the circumstances of this transfer.

13.  On 12 May 2000, the Plaintiff made another will in which she appointed her half-brother sole executor of her estate which she gave to the Tung Wah Group of Hospitals.  This will was drafted by another firm of solicitors, not by Gallant YT Ho & Co. whom she had retained previously for the adoption declaration, her 1^st will and the transfer of the flat.  A doctor certified that he had examined her on that day and had found her of sound mind and memory.

Proceedings under Mental Health Ordinance

14.  However in July 2002, the Plaintiff’s half-brother made an application to the Court under the Mental Health Ordinance for an order appointing him the committee of the estate of the Plaintiff.  In September 2002, an order was made.  Obviously medical evidence was adduced before the judge in those proceedings, but that evidence was not placed before the court in the present proceedings.  It is therefore not known when the Plaintiff became mentally incapable of dealing with her own affairs.

Proceedings for payment

15.  In October 2002, the Plaintiff (acting by her next friend) issued proceedings in the District Court against the Defendant for the sum of $500,000, being the purchase price of the flat which had not been paid.  Summary judgment was sought.

16.  A number of affirmations have been filed.  It is common ground that a lump sum of $500,000 had never been paid by the Defendant to the Plaintiff. 

17.  The Defendant’s evidence was that since the 1980’s, he had been giving the Plaintiff some money from time to time (estimated at a total sum of $700,000 - $800,000) and the Plaintiff considered that these payments had more than offset the sum of $500,000.  In support of this assertion, he exhibited a letter from the Greenery Nursing Home which showed that for the year when the Plaintiff stayed there (February 1999 to February 2000), the Defendant had paid the difference between the basic fees and the Government subsidy (about $1,600 a month) and had also paid for extra expenses.

18.  The Defendant’s alternative defence was that if his previous payments to her was past consideration which could not be regarded as good consideration for the assignment, the flat was a gift from the Plaintiff to him.

19.  The Plaintiff’s evidence focussed on showing that the Defendant was not in a financial position to have paid anything like the sum of $500,000 over the years and that he had been tightfisted when asked to contribute to expenses connected with his birth parents.

Judgment in the District Court

20.  The judge first rejected the defence of past payment, but it is not necessary to deal with this part of the judgment as this defence has been abandoned by the Defendant. 

21.  The judge also held that the Defendant had failed to show a triable issue for the defence of gift.  She held first, that if the Plaintiff had wanted to make a gift of the flat to the Defendant, she would have given directions to that effect to the solicitors. 

22.  Secondly, the judge held that the Chinese document (para. 5 above) "does not state that consideration would not be collected or received by the Plaintiff.  It merely stated that the parties would handle this themselves" and this "shows that the Plaintiff and the Defendant well knew that pursuant to the Assignment, money was due to be paid by the Defendant to the Plaintiff". 

23.  Thirdly, the judge held that Clause 5 in the Agreement for Sale and Purchase (which provided "this agreement supersedes all previous agreements, whether oral or written, entered into by the parties hereto or their agents") precluded the Defendant from adducing evidence that there was a collateral agreement, or warranty, of a gift or waiver of payment of purchase price.

Discussion

24.  Taking the above reasons in reverse order, first, it is not the Defendant’s case that the parties had prior to the Agreement, made any contractual agreements relating to the sale and purchase.  The Defendant’s case (now, at least) is simply that the Plaintiff had made a gift of the flat to him.  Clause 5 is therefore irrelevant. 

25.  Secondly, what the judge with respect seems to have missed in her reading of the Chinese document is that the words "買賣之買價" ("the purchase price of the sale and purchase") had been deleted from the list of moneys receivable which the parties had settled or were to settle without the solicitors’ involvement.  Although the general words  " 其他一切應收款項" ("all other moneys receivable") remained in the printed form, it is unlikely that the Plaintiff meant by those general words the purchase price for the sale and purchase, having deleted those  specific words. 

26.  On the face of the Chinese document then, that could mean that the Plaintiff intended that the purchase price would not be settled outside between the parties - so that, as in the normal course, it would be settled through solicitors.  However such evidence as there is from the handling solicitor (as reported by the Plaintiff’s half-brother) was that those were not the Plaintiff’s instructions, and it is common ground that in fact the solicitors were never involved with the purchase price.

27.  That leaves one with the (at least arguable) inference from the Chinese document that the Plaintiff did not regard the purchase price as being receivable.  That would be consistent with an intention to make a gift of the flat to the Defendant.

28.  That leaves the judge’s third point: why, if a gift was intended, the Plaintiff did not simply instruct the solicitors to draft a deed of gift, but chose instead a sale and purchase, acknowledging receipt in the Assignment when she knew that no sum had been paid to her.

29.  The Defendant’s evidence was that the Plaintiff herself had said that the moneys he had given her over the years more than offset the purchase price.  There is some evidence that he had provided for her, although there is also evidence that he was not financially well-off and tightfisted with his birth parents.  What amounts the Plaintiff had received from the Defendant, what value she put on such payments given his financial situation and whether she had felt indebted to him, are all matters of fact which would have to be examined at trial when considering the circumstances in which the Plaintiff gave instructions to her solicitors in the way she did.

30.  In my view, it is at least arguable that the following facts throw up triable issues for a defence of gift:

(a)	the relationship between the Plaintiff and the Defendant which may (depending on whether the relationship of parent and child is established) raise the presumption of advancement;
(b)	the 1st and 2nd wills - which showed that the Plaintiff wished the flat to go to the Defendant (albeit after her death);
(c)	the Chinese document  - which showed that she did not regard the purchase price as being receivable;
(d)	her acknowledgement of receipt of the purchase price (said to be payable on completion) in the Assignment, well knowing that she had not received that sum on completion; and
(e)	the fact that for at least 2 years - as, on the Plaintiff’s own evidence, she was of clear mind in May 2000 - she took no steps to recover payment from the Defendant.  This was despite the fact that she had over the years instructed solicitors on her legal affairs.

Order

31.  By reason of the above, I consider that the Defendant has raised a triable issue of a defence of gift.  I would allow the appeal, set aside the judgment and give the Defendant unconditional leave to defend.  I do not consider that the Defendant’s defence of gift is so shadowy that conditional leave is called for.  I would also give an order nisi that the costs of the appeal be to the Defendant and the costs below be costs in the cause.

Hon. Chu J:

32.  For the reasons given, I agree that the appeal should be allowed and with the proposed order nisi as to costs.